Pete Campbell and Peggy Olsen start an office romance. Peggy's copy for the lipstick account goes over well and the men in the firm congratulate her. A new telephone receptionist, Lois Saddler, takes a liking to Salvatore Romano but his own interests seem to lie elsewhere. Don Draper gets an unexpected bonus from Bert Cooper and wants to take Midge on a surprise trip to Paris. She seems too involved with her beatnik friends however. Don reflects on his unhappy childhood and in flashbacks he reveals some life lessons he learned early on when a hobo spent the day working on the family farm in exchange for a meal.
Alone in the office early in the morning, Pete and Peggy, as the former deals with a personal crossroads and the latter a professional one, open up to each other in more ways than one. With a little sales job, one of those crossroads ends up being more satisfying than the other on the most part. They, however, are not as alone as they believe. Lois, new to the switchboard, has ulterior motives for getting lost in the office. She does not know that her tour will probably be all for not as witnessed by an incident later that evening at the Roosevelt Hotel. Bert gives Don a lucrative bonus and a little advice. What Don plans to do with the money doesn't quite come to pass. In a marijuana induced haze, Don can't help but think back to an incident with a hobo from his childhood that influenced who he is today and shaped his view of his family life at that time.
- Peggy comes in early and spontaneously has sex with Pete in his office.
Don gets a bonus from his boss, Mr. Cooper. Don sells a lipstick company on Peggy's ad campaign. (Of course, nobody tells the male lipstick execs that a woman wrote the copy!) Peggy's reward is a drink with the admen in Don's office.
The new switchboard operator is smitten with Salvatore and flirts with him.
Peggy organizes an after work celebration of her successful ad and invites Pete. Salvatore has drinks with one of the lipstick execs who makes a pass at Sal, who is interested but fearful. "What are you afraid of?" asks the exec. "Are you kidding?" replies Sal. He shakes hands very formally and leaves.
Peggy tries to get Pete to join in dancing but he tells her he does not like her this way. (Happy and triumphant?) Pete leaves. Peggy has some tears.
Don goes to Midge's apartment and snipes at and is sniped at by her beatnik friends, but they also end up smoking marijuana together. Don shows Midge his bonus check and tries to persuade her to come with him on an impromptu trip to Paris, but she turns him down. Don has a flashback to his Depression Era childhood when Don's name was Dick: A hobo comes to their house and, while the man of the house (Dick's father Archie Whitman) tries to reject the hobo, Dick's stepmother Abigail Whitman takes in the hobo and tries to give him a coin in advance for working for food. The head of the house confiscates the coin, implying he will pay the hobo after he has worked. The hobo talks to Dick before bedtime and teaches him symbols used by hobos to mark houses they visit. The last symbol means "a dishonest man lives here." Dick reveals that someone has taught him to think of himself as "the whore's son." (We are not told who calls him this.) The hobo seems to be the first person Dick has ever met who doesn't want to stigmatize him. The next day, the hobo works, but Archie doesn't pay him. As the hobo leaves, Dick notices the symbol for "dishonest man" has been carved on their fence.
Back in 1960: Don takes an instant photo of Midge and her friend and, looking at the picture, realizes they are in love. Nevertheless, he proposes once more to Midge that they go to Paris. She turns him down. As Don leaves the apartment, one of the beats says, "The cops are outside, you can't go out there." "No," says Don, putting on his suit coat and hat, "YOU can't go out there." Sure enough, when the police see him they just say, "Good evening, sir."