At Pennsbury Manor Dave recalls William Penn's upbringing in England. Viewers learn that the King of England granted Penn the largest land charter ever given, hoping that other Quakers would follow Penn to the New World. Dave explains how Penn founded Philadelphia as a city of tolerance and how he created a system of government that provided for the separation of powers and checks and balances. Dave's final stop is Betsy Ross' house, where he tells the story of the creation of the first U.S. flag.