e had done so, or, if they had, they did not
recall the matter when Blake questioned them. So that young man resumed:

"Well, I'll tell you what I saw: Labenstein was leaning over the rail on
the side where the submarine showed, and he was holding a big white
cloth over the side."

"A big white cloth?" cried Joe.

"That's what it was," went on Blake. "It looked to me like a signal."

"Do you mean a signal of surrender?" asked Charlie. "A white flag? He
wouldn't have any right to display that, anyhow. It would have to come
from Captain Merceau."

"Maybe he meant that he'd surrender personally," suggested Joe, "and
didn't want his fellow-murderers to hurt him."

"I don't know what his object was," went on Blake, "but I saw him take
from his pocket a big white cloth and hold it over the side. It could
easily have been seen from the submarine, and must have been, for he
displayed it just before the underwater boat came up."

"A white cloth," mused Joe. "From his pocket. Was it his handkerchief,
Blake?"

"He wouldn't have one as large as that, even if he suffered from hay
fever. I think it was a signal."

"A signal for what?" Charlie again asked.

"To tell the submarine some piece of news, of course--perhaps the port
of sailing, something of the nature of our cargo, or perhaps to tell
just where to send the torpedo. I understand we are carrying some
munitions, and it may be that this German spy directed the commander of
the submarine where to aim the torpedo so as to explode them."

"But he'd be signaling for his own death warrant!" cried Joe.

"Not necessarily," answered Blake. "He may have had some understanding
with the submarine that he was to be saved first. Perhaps he was going
to jump overboard before the torpedo was fired and was to be picked up.
Anyhow, I saw him draping a white cloth over the side, and I'm sure it
was a signal."

"Well, I guess you're right," said Joe. "The next question is, what's to
be done? This fellow is a spy and a traitor, and we ought to expose
him."

"Yes," agreed Blake. "But we'd better have a little more evidence than
just my word. You fellows didn't see what I saw, that's plain, and
perhaps no one else did. So it would only make a big fuss and not result
in anything if I told the captain."

"Then what are you going to do?" asked Charlie.

"Just keep watch," Blake answered.

"What about Lieutenant Secor?" asked Joe.

"Well, I didn't see him do anything," admitted Bl