Nucky and Eli have paid Chalky a visit in his home. His fancy, genteel home, where his son Lester plays the piano, evincing an ill-fitting gentility and calm. Lenore, Chalky's wife, says Lester will be attending Morehouse in 2 years. Oh, damn, RED FLAG for poor Lester there. Wife and son leave, and Chalky's face sours. Both Nucky and Eli as what happened, and Eli in particular focuses on the two injured Klansmen, including one Herman Dacus, who was a schoolteacher! Like it's this huge tragedy. Chalky's like, "I've got four dead bodies and half a dozen wounded, including a woman, so shove it." Nucky assures he'll take care of it, but Chalky's not so sure anymore. Weren't they supposed to be protected from this shit in the first place? He's got his people to take care of too -- "10,000 black folk who make this city hum." He tells Nucky to "go school these crackers," lest he find out what happens when those 10,000 stop making it hum. Nucky: "I'm the only thing keeping you from a lynch mob." Chalky: "Are you ready for what happens here if I turn up at the end of a rope?" Nucky: "Your people have a lot more to lose in that case than I do." He says he'll handle this, but Chalky needs to stay in the fucking house. Chalky says they can see themselves out and exits. Nucky bawls out Eli for not having this Klan shit under control. Eli's response is about Chalky: "That is one uppity shine."
Margaret (wearing her GIANT fur coat) goes to see the nun who beat Teddy, Sister Bernice. Bernice is stern but good humored(ish), and she does not back down from her abuse of Teddy. She tells Margaret that when Teddy says he did nothing wrong, he's a liar. He was playing with matches (from Babbette's supper club, of all places) in the coat closet. Margaret is dumbstruck. Bernice latches onto her widowhood, making all sorts of implications about Margaret living with "Teddy's uncle." Anyway, Teddy is not expelled -- Father Brennan intervened. He's a close friend of Mr. Thompson, after all. Her circumstances having been bared for the bride of Christ to see, Margaret beats a hasty retreat.
At the Commodore's house, we've got a meeting of the No Nuckys Club. It should be noted that the Commodore's sitting room is adorned with all those taxidermied big game from the opening montage. It becomes clear immediately that the Klan attack was their doing. Jimmy uncomfortable with it; did they have to kill a woman? The Commodore says this is war and it's not for the squeamish. Plus he obviously could give a fuck about the darkies. The plan is to sow unrest within Nucky's kingdom. Eli says Chalky's got 10,000 men, but the Commodore says with the Klan on their side, they've got more numbers than that. The Commodore ("Lou," as Eli calls him) further plans to use Governor Edwards, who hates Nucky more than they do. They'll get the governor to intervene should there be anything so distasteful as a race riot. Eli is once again in the position of wanting to know more than the guy in charge will tell him. And likely once again jealous that Jimmy has a better position in the organization. "Nucky Thompson was weaned on my teat!" the Commodore huffs. He will handle him.