Owen Sleater continues to flirt shamelessly with Katy, which earns Katy the expected shaming and reprimand from Margaret. And later, when Margaret gets snippy with Sleater, he totally flirts with her, too! Meanwhile, Little Teddy Schroeder is making his First Confession this week, and the stern, disapproving priest tells Margaret that she must set a good example by confessing her own sins. This gives her some moments of inner turmoil. Nucky tells her she'd better not be thinking about confessing anything real, but when she finally gets to the confessional, she does come clean ... about lusting after a "bad" man in her employ. And how!
Lucy is now monstrously pregnant and ends up going into labor while Van Alden is busy at the hospital, throwing his religion at anybody who comes to visit a broiled and half-dead Agent Clarkson, who wakes up and says to Nelson, "I see you. I know what you did." Since this could mean just about anything to Van Alden, he assumes God is fixing to punish him. He calls his wife but can't bring himself to confess his many sins. And besides, it turns out Clarkson is delirious and the whole "I know what you did" thing was some childhood memory he's been reliving. Lucky day for Nelson, right? Well, not quite. Lucy ends up delivering the baby herself, and after Van Alden goes out to find a doctor, he returns to find his wife tending to Lucy. She freaks out on her husband and bites his wrist before running away.
If you've been keeping a running tally for the most objectionable character this show has ever produced, you're going to want to include Boy Prosecutor Chip, who smarms his way to a ruling that transfers Nucky's case to federal court, then spends the rest of the day whoring and asking people if they know who his father is. But there's a bump in the road when Senator Edge gets back on the scene and strong-arms Attorney General Daugherty to place a more hawkish prosecutor on Nucky's case. Sucks having enemies, Nuck.
Finally, Nucky, Rothstein and Waxey Gordon meet at the Ritz to finalize the Philly importing deal. With Waxey is Herman, formerly seen in Manny Horvitz's employ. Out on the boardwalk, Jimmy spots Nucky walking with Waxey and Herman and calls Manny, thinking Manny has struck a deal with Nucky and fucked him over. But Manny is chagrined, to say the least, to learn of Herman's allegiance, and he calls Jimmy down to interrogate the guy (learning all about Waxey's deal with Nucky and where the ships are coming in tonight) before inviting Jimmy to slash his throat like the hired killer he is.
That night, it's another woodlands ambush for Jimmy, as they ambush the cars being guarded by Luciano and Lansky. With the shooting at a stalemate, Lucky initiates an on-site summit, where he, Lansky and Jimmy strike a deal to let this shipment go through and then unite to take down the entire bootlegging scene. Out with the old guard, in with the new, heroin-friendly overlords.
Agent Van Alden is reading his bible while Lucy yells from the other room that she needs him to pick up some lemons from the store. She's supposed to be eating lemons for the pregnancy, see. She's in the kitchen, sitting on the end of the chair, looking like she's about to drop the kid out onto the floor. As delicate and demure as the day God made her. She complains that she can't get comfortable, to which the ultra-supportive Van Alden responds that he's been busy visiting Agent Clarkson, who is having trouble getting comfortable himself as he is currently burned over half his body. Lucy's all, "Sorry, daddy. I just want to be done with this." He says he'll pick up some lemons.
Christ on the cross! ...No, really, that's how this scene starts, with a shot of Christ on the cross. We're at the Catholic school, where Margaret, Nucky, and young Teddy are meeting with Father Ed (I'm sure he wasn't called "Father Ed" in these pre-Vatican II times, but we only get Nucky referring to him by his first name, so...) regarding Teddy's upcoming sacrament of First Confession. The priest is talking sternly about sin and hellfire, the usual pre-Confession spiel. Margaret is encouraging when Teddy struggles for the answers, but Nucky is impatient that he has to answer these questions at all. You get the feeling Nucky has lingering issues from his school days. So he rolls his eyes as the priest tells Teddy that sinning makes him like "the cruel Jews who taunted Jesus on the cross" and that it angers God. Nucky taps his watch and tells Father Ed that they need to wrap this up. Father Ed lectures that it's important that they set a good example to Teddy, which Nucky blows off and heads out to the car. With Nucky gone, the priest goes on lecturing about how Teddy is now seven years old, "The Age of Reason," old enough to know the difference between right and wrong. Old enough now that God doesn't simply watch over him, he judges him. Margaret looks lost in thought at that concept. Father Ed -- whose demeanor seems to be permanently angry -- says that Margaret needs to make sure Teddy is prepared to list his sins thoroughly tomorrow... and she should be prepared to do the same. Margaret is surprised by this. Why her? Father Ed says it's to set a good example, of course.
Federal court. Mr. Charles "Chip" Thorogood represents the people of the United States in their interest to take on jurisdiction of the Nucky Thompson case, on account of Mann Act violations that -- as he disingenuously grandstands -- he had to read about in the paper, because State's attorney Solomon Bishop failed to come forward with them! Can you imagine? Chip is really making an immediate and unfavorable impression here, with a most unpleasant combination of insincerity, grandstanding, and try-hard striving. The judge -- despite taking notice of Chippy's dweeby green shoes, and not being very impressed by them -- nonetheless sees the case Chippy's way. Bishop looks across the room at Nucky's attorney, who shrugs smugly.