Nanna and Thora, the daughters of Elsinore's governor, George Griffenfeld. Until now, the girls have scornfully refused the two suitors' advances. The young men hope for better luck, now that they have secured royal appointments. Nanna and Thora appear, and they appear receptive to the men's entreaties. But after the men leave, the girls admit that the appointments are a practical joke, one of many their father has perpetrated on the citizens of Elsinore. The King's Hussars enter, led by Corporal Harold. The Governor has compelled them to dance like ballet-girls every day from 10 to 2. Griffenfeld joins them, and chastises the Hussars for their lack of a sense of humour. He admits to Harold, however, that one of his practical jokes has backfired. Just for fun, he had proposed marriage to the extraordinarily wealthy Dame Hecla Cortlandt. He now wants to break off the engagement, but he fears her dangerous temper. When she arrives, Griffenfeld asks her what she would do if, hypothetically, his proposal turned out to be a ruse. Her angry reply leaves him terrified. With his two daughters, he plots to trick Mats Munck, the local Syndic, into believing that Dame Cortlandt wants to marry Munck. After they leave, the Prince Regent appears, in disguise, dressed as a "tattered vagabond". He has received many complaints about Griffenfeld's behaviour from the citizens of Elsinore, and he wants to see for himself if they are true. He encounters Christina, who is struck by his resemblance to the statue, but he tells her that he is a mere strolling player, Nils Egilsson. After she leaves, he encounters Griffenfeld, who also notices the resemblance. Seeing another opportunity for a practical joke, Griffenfeld asks "Egilsson" to impersonate the Prince Regent – dispensing fake honours to the townspeople, which will later be revealed as amusing hoaxes. Christina overhears their agreement, but left alone with the Regent once again, promises not to divulge their secret. Mats Munck has a meeting with Dame Cortlandt, in which she believes she is consulting him on arrangements for her marriage with Griffenfeld, but Mats believes that she plans to marry him. Dame Cortlandt finds his behaviour incomprehensible. Erling and Tortenssen now learn that their court appointments are a sham. Nanna and Thora reject their marriage proposals, given their impoverished status. Fed up with Griffenfeld's incessant practical jokes, Erling and Tortenssen assemble the townspeople, and are joined