Someone has set fire to the Thompsons' greenhouse, and little Teddy was the only eyewitness. He tells Margaret and Owen (Nucky's out of town) that it was a "gypsy," but later he's found by Cornelia with a gas can and rags. He's also sleeping with a knife under his pillow so he can defend his family with Nucky gone, so things are all kinds of creepy as far as Teddy is concerned. Owen's over at the house a lot more after the fire, and after taking care of a vagrant snooping around the premises, Margaret seduces him into one more roll in the hay, or in the burned out greenhouse.
Meantime, Nucky is in Washington in order to shore things up with Harry Daugherty, for whom things are deteriorating quickly. Jess Smith is falling apart before our very eyes, and Means' advice for the Justice Department to scapegoat one bootlegger has the hammer about to drop on either Nucky or George Remus, and since Remus got there first, it looks like Nucky's on the hot seat again. He gets arrested by prohies on his way out of town for possession of a pint of booze, and though he ends up only having to pay a $5 fine, he is reacquainted in the courtroom with one Esther Randolph, who finds herself working the 1920s equivalent of Night Court. She's the Markie Post. Nucky meets up with Esther at a diner later and after they banter semi-contentiously, he offers her a big fish: Harry Daugherty himself. Wouldn't it be nice to take down a major bootlegger like Remus and expose the shameful corruption in the DoJ in the same swing? Esther is intrigued.
Back in Atlantic City, Richard Harrow is attending veterans' group meetings, where the attendees are getting mighty disgruntled at a government that seems more interested in getting fat off of corporate kickbacks than taking care of its veterans. Richard takes note of an especially grizzled old-timer named Sagorsky, and he really takes note of Sagorsky's kind, beguiling daughter, Julia.
In less wholesome news, Gillian Darmody meets a solid wall of soldier muscle out in the streets and returns with him to his boarding house for some energetic sex during which she calls him "baby" and then, in case anybody was not certain of what was going on, she tells him she intends to call him "James." Making it weird, Gillian.
Young Teddy Thompson wakes Margaret up in the wee hours -- there's a fire, he says. Out the window, the greenhouse is burning, so Margaret sends Teddy to his sister to make sure she's okay. Cut to the bucket brigade putting out the last of the blaze, and Cornelia there to offer Margaret moral support. And maybe also a little bit to check out Owen Sleater. She spots him walking toward them, in his fedora and coat like he's a big shot all of a sudden, and actually turns to Margaret and asks if she looks ridiculous. Margaret says, "I think we both do." What follows is a highly sexually-charged conversation, the subject of which is immaterial but if you must know: Sleater asks the women if they know what might have caused the fire, and Cornelia offers the odd fact that compost is quite flammable, at which point Sleater directs his sex ray at her and smirkily asks if she knew of compost being kept in the greenhouse. Cornelia blushes and giggles like a schoolgirl, while Margaret literally sasses her neck at Owen all, "I don't have the first clue what was in there, and stop trying to score with my friend."
Cut to the kitchen inside, where Sleater and Margaret are asking Teddy about just what he saw. He's kind of vague on details, but he says he saw the fire starting because he was "looking for the man," a gypsy who he says has been around the property. This is news to Margaret and somewhat alarming. Teddy says he was in the street this morning, holding his "bag full of gypsy things." As any gypsy surely would. Sleater's being very sweet with the boy, I should mention, but he and Margaret can't make much of this gypsy talk. Margaret sends him to bed.
Owen tells Margaret he wouldn't make too much of the man with the bag. Margaret wonders why Gareth the bodyguard is here, then, or him for that matter. Owen makes an ill-advised joke about seeing Cornelia in her night clothes, but he admits he's here because Nucky's away on business. Margaret thinks for a moment and asks, "Was it Gyp Rosetti?" Owen tries to play dumb, but Margaret wonders if Teddy's mixing up Gyp for a gypsy, and also informs Owen that they have his dog. He tells her that a) Gyp is not a gypsy, but also b) his business with Nucky is long since concluded (um...) and he wouldn't bother with setting the greenhouse on fire (UM...). "Unless it was the puca," Sleater teases Margaret. "Roaming the fields at night..." Margaret actually smiles a bit at this ridiculous flight of fancy; she does so enjoy this private little connection she and Owen share. From the top of the stairs, Teddy spies on them, lord knows what he understands about the vagaries of sexual tension. Or Ireland, for that matter.