From the way she's walking on his arm, it looks clear that Cora has let go her anger toward her husband and as they amble around the grounds, Cora expresses the opinion that Thomas hasn't done anything wrong, so Lord Grantham can't just sack him. Lord Grantham, however, doesn't suppose Thomas can expect to stay his valet now that Bates has returned, so Cora suggests he let Carson come up with an idea. They then see the nurse wheeling baby Sybil around, which prompts Lord Grantham to ask if Branson has said anything further about moving out. Cora, however, wonders how Lord Grantham can want him to: "He's our responsibility now, Robert; he and the baby. We owe that to Sybil." You'd think Lord Grantham would be so happy that she can discuss such a subject without acrimony that he'd agree to anything, but he merely says he's got to get on as the meeting with Jarvis and Matthew is happening. I suppose he's at least been consistent about that topic putting him in a bad mood.
Speaking of bad moods, here's Thomas asking Bates if he's got any plans and Bates tells him it's early to say. Molesley, however, does a better job for Bates than he could do for himself by blundering up and saying he expects Thomas will be looking for something to do now. With the room filling up, this statement is met by stares ranging from awkward to icy, but Alfred at least can be relied on to be both oblivious and one-note, so he says there's a late film on that night (Way Down East) starring Lillian Gish, and would Ivy like to go with him? In response, Ivy asks Jimmy James if he's going and gets a negative reply and I'd think it says something about how obvious it is to everyone that Alfred's wasting his time that no one even winces on his behalf, but Ivy attempts to make the question about how she can't go with Alfred on her own, as her mother wouldn't like it. Mrs. Hughes agrees and says that she'll sanction it if "Marge" or "Alice" will go with them, and Ivy gives in with the condition that Mrs. Patmore give her blessing too. She adds to Alfred, "Straight there and back, mind," and he looks at her like this is some kind of victory instead of the closest he's ever going to get. Man, he's an idiot.
It's time to meet Jarvis, who's old and also disapproving as he notes that Matthew's proposals would essentially mean a complete overhaul of the estate all at once. Matthew tries to defend his plans, but Lord Grantham -- emboldened by having an ally to his reactionary mentality for once -- scoffs that the whole thing is ridiculous and Downton has existed harmoniously for hundreds of years. I'd point out that Lord Grantham was so desperate for funds to keep said harmonious existence going that he blew his wife's entire fortune, but that point will be made for me soon enough. Jarvis tries to take a slightly more conciliatory tone in pointing out how new Matthew is to the Downton game and when Matthew decides it's his turn to get offended, Lord Grantham says he is new, so there's no point in biting Jarvis's head off... as if you can't see his teeth marks all over Matthew's neck. Matthew reiterates what I just said, which is that Lord Grantham used Cora's money to bail the place out for years, and now Downton needs to be self-supporting if it's to survive. Lord Grantham is actually taken aback by Matthew's vehemence and he says he's given them plenty to think about. Upon being prompted, Jarvis agrees in a tone of voice that makes it sound like he's wondering if there's any possibility of upping his retirement timetable.