the lieutenant.

"Yes, indeed. They constituted the subject of the interesting story Dad
was telling me at table to-night."

"Did he tell you what they contained?" asked Ned.

"He did not. He told me only what they dealt with."

"He believes there is a plot against the completion of the Panama canal?"

"Oh, yes; he is quite certain of it."

"Did he mention the parties he suspected?"

"He refused to do so. I can't understand why he should refuse. Can you?"

"I think I can appreciate his position," replied Ned.

"Great Scott!" cried Frank. "Do you think the agents of the men we are to
grapple with in the Canal Zone have been in this house to-night? If so, it
looks like they were looking us up, instead of our being after them."

"Where is this man Pedro?" asked Ned, not answering the question.

"He was in the study when I left, a few moments ago."

"Then we will go down there. I want to ask him a few questions."

At the foot of the staircase, they heard the telephone ringing, and Frank
went into the closet. When he came out again he seemed excited and
unnerved.

"I guess there's something more than the necklace at stake to-night," he
said, "for Dad's rooms in the newspaper building have been ransacked. I
guess we won't have to go down to Gatun to lock horns with the men who are
in this plot against Uncle Sam. If the Gatun dam was in New York, they
might have blown it up to-night, for all that has been done to thwart
them."

"Well, we've just got to work on the case," grinned Jimmie.

CHAPTER IV.

THE MAN IN THE CLOSET.

"If you take my advice," Ned said to Frank, as they reached the study
door, "you won't say anything to your father about the trouble at the
office until we have talked with him concerning the raid on the house. He
might rush off to the newspaper building immediately, without answering
our questions about the visit to his room."

"That is just what he would do," Frank replied.

When the boys entered the study, closely followed by Lieutenant Gordon and
Jimmie, they found three men in the room. One was Mr. Shaw, lying on a
couch at the front of the apartment. One was Dr. Benson, who sat in an
easy chair at his side. The third was Pedro, the servant mentioned by
Frank as one of his father's favored attendants. He stood by the couch as
the boys stepped into the room, his bold black eyes studying their faces
impertinently as they entered.

The man was not far from forty, tall, sle