So as I predicted, Betty has the baby! I may have been wrong about the date, and she may have been wrong about the sex, but welcome to the world, little Eugene Scott Draper. Shit is gonna get CRAZY.
Before Betty goes into labor, she and Don meet with Miss Farrell, Sally's teacher, who tells them that Sally has been acting out and getting into fights with a classmate. The Drapers admit this could be because of the recent and, one assumes, never discussed death of Grandpa Gene. Betty is visibly uncomfortable during this scene, possibly because it turns out the girl Sally was fighting with is overweight a la Betty in her childhood, but probably because she's like 17 months pregnant at this point and just wants the kid to get out. And also, Betty doesn't do emotions. But apparently Miss Farrell does, because she goes into over-concern mode with Don about losing someone close at such a young age.
When Don gets back to the office he interrupts a meeting with Lane Pryce, who is insisting that the Mad Men and Boys stop spending all of PP&L's hard earned pounds on office supplies and drinks and what not. Since you never, ever, tell Don Draper what to do, he leaves. When Pryce confronts him about it later, Don just says that creative people need booze and pens to be creative, so Pryce can suck it.
Pete bitches to Kinsey that his clients don't make any money and Cosgrove is just sitting pretty with the A-list clientele. The account that is bothering him in particular is Admiral television manufacturers. While going over the numbers, Pete figures out that Admiral is outselling it's competitors in cities with higher African American populations, and decides he should sell that angle to Admiral—but not before he has a cringe-inducing conversation with Hollis, the black elevator operator, about what kind of TV he owns and why. At the client meeting, Campbell suggests to Admiral that they buy ads and air time in magazines and shows specifically targeted at black audiences. The Admiral people are appalled, as are Sterling and Cooper, who chew him out for daring to try to earn money from "that" particular demographic. Pryce, who can only see dollar and pound signs is like, "Well...uhh...times are changing so if the black folk wanna spend their money, why can't we take it?"
Meanwhile Duck Phillips is back. Yay? He calls Pete to set up a lunch since he's at Grey now and he's all about wooing ad men to join the company. When Pete reluctantly shows up to lunch he sees that Peggy is there, and of course is pissed. Duck accuses the two of them of having a secret relationship, but thinks the nature of it is purely business, and that when Pete ratted Rumsen out to him last season, it was so Peggy could get ahead. Because a woman can't do anything without a man to guide the way. Pete is all, "I won't sit here and get a free lunch with ANOTHER PERSON so good day!" And Peggy is all, "I will!" And Duck is all, "Peggy it's your time! You are a lady and we have to listen to ladies who have ideas. And you're a good one. Career Gals 4Eva!"
And speaking of career gals, Miss Farrell TOTALLY drunk dials Don at home to apologize (but really flirt her ass off) for how she acted in their meeting. Those two will definitely have sex later in the season.
Then Betty goes into labor, and so begin the extremely uncomfortable Betty in the hospital scenes. I say uncomfortable because I'm sure they were extremely realistic, from the drugging and hallucinating, to the bored husbands in the waiting room. Seeing Don drink whiskey with some dude who is waiting for his wife to give birth is one thing — men weren't in there with camcorders and coaching, we realize—but seeing a confused woman all alone going through the process of bearing a child while still understanding that her husband is enough of a lout that she doesn't trust him to just be waiting for her was unsettling to say the least. And then she just wakes up, holding the baby boy she had hoped would be a girl. Poor Betty.
Also? Poor Peggy. Because Duck's little "it's your time" speech got her thinking. A bit about her biological clock, and also a bit about the fact that she isn't paid the same as the men in her position who do exactly the same thing she does and sometimes, she argues, even less. So she goes to Don when he returns to work after the birth basically to say she deserves equal pay, by law. Holler Equal Pay Act of 1963! But Don is all "Budget, can't do it...blah." Oh hey, remember how earlier in the episode Sterling Cooper was cutting costs? But then Pete wanted to MAKE MONEY by broadening their market, and the racist, sexist Sterling and Cooper said no?
After Betty and Baby Gene come home from the hospital, we learn that Carla has been let go, so it's up to Betty to deal with the three kids all by herself. Cut to Betty dragging herself out of bed to tend to the crying infant. And...episode. This is not going to go well.