It's 1963. Don, warming some milk late at night, slips into a reverie in which a woman delivers birth to a stillborn baby. Later she receives the baby of a prostitute who dies in childbirth. The infant's name is Dick, a mordant choice given the prostitute's threat to sever her client's penis and boil it in hog's fat for getting her pregnant.
Don serves the milk to the pregnant Betty to help her sleep. “I packed your valise,” she tells him, but it's damaged because Sally whacked the clasp with a hammer. Don soothes Betty with a guided visualization of a day at the beach. "You're good at this," she says.
The next day in Cooper's office, Lane Pryce, the financial officer installed by Sterling Cooper's British parent, calls Don "the face of our business," which is why he needs to visit their client London Fog -- the raincoat makers -- in Baltimore. Burt Peterson, the head of accounts, enters and is promptly fired. "You're the dying empire," Burt rails at Lane. "We're the future."
Downstairs in the secretarial pool, Peterson continues his tirade. "Drop dead, you limey vulture," he shouts at John Hooker, ostensibly Lane's secretary but really, as he tells Joan, his superior's "right arm." Hooker calls Americans' inability to control their emotions "unbecoming." If Hooker had spoken to her first, Joan replies, things would have gone more smoothly.
In a meeting with Lane, an apprehensive Pete becomes all smiles when Lane appoints him head of accounts. Later that day, Lane also offers Ken the position.
Don and Sal fly to Baltimore. Masquerading as "Bill" and "Sam," they receive a dinner invitation from Shelly, their flirtatious stewardess.
Leaving the office, Pete tells Ken he's always been a big fan of his work. Ken thanks Pete for reminding him "that I can do this job."
At dinner, Shelly's stewardess pal gushes that Don and Sal's stated profession, accounting, sounds "sexy." When the navigator mocks her, Don, with Sal playing along, piques everyone’s curiosity by intimating that the two are investigating James Hoffa, President of the Teamsters, for embezzlement.
"I'm engaged," Shelly tells Don later in his hotel hallway, afraid this might be her last chance to dally. "I've been married a long time," Don says. "You get plenty of chances."
Sal, meanwhile, calls for help with his room's air conditioner. A bellhop fixes it, and then kisses him. "Oh, Jesus," sighs Sal as the bellhop reaches inside his boxers. Seconds later, the hotel's fire alarm goes off. Don, rushing down the fire escape, passes Sal's window and sees the bellhop in his undershirt.
The next morning, a startled Pete learns that Ken has also been named head of accounts.
Don makes his London Fog house call, smoothly reassuring the owner and his son about Sterling Cooper's commitment to their firm and consumers' continuing need for its product. "There will be fat years and there will be lean years," Don says. "But it is going to rain."
Pete sits stone-faced while Joan ticks off the respective clients that he and an exuberant Ken will handle. Though the two men are splitting the company, Lane explains, "It's possible someone could distinguish themselves."
Returning from Baltimore, Don asks Sal to be "completely honest" about something. After a pregnant pause, Don pitches a concept for London Fog with the tagline, "Limit your exposure."
Back at Sterling Cooper, Joan gives Hooker Burt Peterson's office. He'll also get his own typist, to keep him from commandeering other executives' secretaries, something Peggy has been complaining about.
"They want us to hate each other," Ken tells Pete later. "I refuse to participate in that." Pete makes it clear he's not interested in them running together "holding hands."
Trudy drops by Pete's office with a present. "Why can't I get anything good all at once?" he grouses after telling her about sharing his position. Trudy advises him not to turn "an amazing opportunity" sour.
Roger visits Don. "Is Cooper playing God or Darwin?" Don asks about pitting Pete against Ken. Roger thinks the idea was actually the Brits'. He told them it was stupid, he says, "But they don't always get our inflection."
Pete asks curtly if he can speak with Don, but his tone softens when he notices Roger in the office. He's honored by his promotion, he tells the two men. Cooper wanders in and tells Pete he wants him, as the firm's "real Yankee," to work on a campaign involving New York's Penn Station.
Lane orders Hooker to vacate his new digs. It's unseemly for him to get an office after a third of the workforce has been fired. Hooker accedes, then comments, "This place is a gynocracy." Lane says that he hadn't noticed.
In Don and Betty's bedroom, Sally apologizes for breaking the valise, saying it was only because she didn't want daddy to leave. "I will always come home," he replies.
Sally discovers the stewardess’s pin in Don's luggage and asks if it's for her. It is, he replies. "Tell me about the day I was born," Sally asks. Don and Betty's tale begins with Don arriving home late from work on a rainy night.
