I think it would be the first one. Based on the story, both Della and Jim love each other.Della has the most beautiful hair in the world. This had pushed Jim to buy her a bejeweled comb. Jim was so excited to see Della with his gift. But Jim was surprised to see that his wife had cut her hair so that she can buy him a watch. Jim was a bit disappointed about it. But Della had cheered him saying that her hair will eventually grow and that she can use his present for her very soon.