Holmes, Watson, and MacDonald travel to Birlstone village in Sussex. John Douglas was murdered at around midnight and had been shot in the head. The house is an old manor with a moat and drawbridge. A man named Cecil Barker was staying at the house on the night the murder took place and was a regular guest of Mr. and Mrs. Douglas. A sawn-off shotgun was found at the scene. It appeared to have been fired at close range which caused the head to have been completely blown to pieces.
Cecil Barker says that he believes a secret society of men pursued Douglas and that this fear for his life is what prompted him to live in such a quiet area of England. Mr. Douglas married his wife when he came to England five years previously. He had been married before and that first wife died of typhoid. Douglas had met and worked with Cecil Barker in America for a time and then suddenly left for Europe. Both Cecil Barker and Mrs. Douglas were aware that some danger overhung Douglas and that this danger was connected with some episode of his life in America. Mrs. Douglas says that she had heard her husband mention "The Valley of Fear".