After being abused by a tough street punk, Flip challenges the bully to a boxing match.+
"Bully" is a Bluto-type - you know: big, gruff guy with a cigar, small bowler hat, needs a shave.....the kind of "ruffian" you see pictured in the 1930s cartoons (and feature films, sometimes.) Here, he picks a fight with poor Flip.
Before you know it, a neutral party comes along, shows the two guys a sign advertising "boxing to-night" and advises them to take it to the arena, where at least they could pick up some bucks if they're going to fight Flip isn't crazy about the idea, knowing he could get killed, but his little friend pushes him to it because they need money. Lots of folks did back in 1931.