Thaddeus goes on to explain that Bartholomew found the treasure in a secret room at the top of Pondicherry Lodge. The treasure-chest contains jewels of great value. Thaddeus insists that this should be shared between the two brothers and Miss Morstan, which would make her 'the richest heiress in England'.
When they are finally admitted to Pondicherry Lodge, Holmes and Watson discover that Bartholomew Sholto is dead in his room and the treasure is gone. The door is locked from the inside and so Holmes looks for clues as to what has happened.
Holmes discovers footprints that must belong to a man with a wooden leg, a thorn in Bartholomew Sholto's scalp (which Holmes claims is poisoned) and small barefoot prints on the roof that are stained with creosote.
Mr Athelney Jones, a police detective, arrives and comes quickly to the conclusion that Thaddeus is the murderer. He arrests him and takes him away. Meanwhile. Holmes sends Watson to collect a dog called Toby who has 'the most amazing power of scent'.