The four men were lined up and searched. Only Cron was found to have a gun.

"You can't get me on that," he sneered. "I have a permit to carry a weapon."

The forty thousand dollars was brought to light.

"Quite a nice haul," a policeman commented, examining the roll of bills.

"You can't arrest a man for having money in his pocket," Lynch said harshly. "You don't find it marked do you?"

"The truth is, you have no case against us," Cron snapped. "It's only this silly girl's word against ours. No doubt she's been reading detective stories!"

"I can furnish an alibi for the entire day," Lynch added.

"Unless this ridiculous charge is dropped I warn you I'll sue for false arrest," Cron went on furiously.

The officers paid no heed to the talk, yet they knew that their case against the four was not water-tight. As Cron had said, it was a matter of Penny Nichols' testimony against the four. True, she had the Rembrandt as evidence, but it might be difficult to prove that the four men had been involved in the theft. They had painful recollections of other cases against Max Lynch which had dissolved like soap bubbles in a wind. The man had no equal at producing unexpected witnesses who for a sum of money would provide him with a complete alibi. His lawyer, employed at a yearly salary, was as clever as he was unscrupulous.

"Search the room," the police captain ordered. "The Dillon pearls must be here."

The men set about their task with system and thoroughness. They examined every inch of the mattress, they went through all of the clothing, even ripping out the linings of coats and jackets. The floor boards were tested to learn if any had been recently loosened.

"You'll not find the necklace here," Cron said harshly.

Penny watched the search with growing uneasiness. She had felt certain that the pearls would be found in the studio. The conversation she had overheard while tied in the closet had led her to believe that the necklace was in Cron's possession. It must be somewhere in the room.

She crossed over to a bookcase which the officers had not yet examined.

Instantly, she noted that Hanley Cron was watching her intently. She lifted out the lower row of volumes. Nothing had been hidden behind them.

"Little Miss Detective!" Cron jeered.

Penny took out a few of the books on the second shelf. She uttered a little cry of surprise.

"My Black Imp!" she exclaimed, wheeling toward Cron. "So you were the one who entered my room and stole it."

Triumphantly, she caught up the little clay figure from its hiding place.

"Now I know you're crazy!" Cron snapped. "Someone sent that figure to me in the mail. And rightly it should have been returned to me too!

You and that Coulter girl came here and robbed me of it."

Penny gazed thoughtfully down at the Black Imp. She recalled how startled Max Lynch had been when he had viewed it on her father's desk.

Then later, either Cron or an agent of his, had risked capture to enter the Nichols house and recover the little statue. Why was it so valuable? What secret did it guard?

Suddenly, Penny knew. With a triumphant laugh, she raised the Black Imp and hurled it against the wall. It shattered into a dozen pieces.

"Say, what's the idea?" a policeman demanded. Then he stared down at the floor.

Among the broken fragments of day lay Mrs. Dillon's pearl necklace.

"There's your evidence," Penny said calmly. "I think even Max Lynch may find it difficult to alibi this."

With a fatalistic shrug, the gambler turned to the policeman who guarded him.

"You win," he said. "Buckle on the cuffs and let's go."

"There's something I'd like to learn before you take these men away,"

Penny mentioned to the captain. "Mr. Hoges has a letter in his possession which I wish I might examine."

"Is this the one you mean?" the officer asked. The envelope he indicated had been taken from Hoges when he was searched a few minutes before.

"I think it is."

The policeman handed Penny the letter and he quickly examined it.

"This is the right one," she said in relief. "And it exonerates Amy Coulter of any wrong doing."

The brief message read:

"Mr. Hoges: I shall be unable to accept the work which you offered me.

I am returning the money paid me as an advance fee."

Penny was jubilant at the way matters had ended. She had many questions to ask Cron and Max Lynch but she decided to postpone them, realizing that the men were not likely to reveal anything which could be used as evidence against them.

As the four crooks were led away, the captain waited to compliment Penny for her valuable a.s.sistance.

"Tell me, young lady," he commanded admiringly, "how did you know Mrs.

Dillon's pearls were hidden inside that clay figure?"

"I wasn't absolutely certain," Penny admitted. "But a number of things made me suspicious. First, I recalled that the man who s.n.a.t.c.hed the necklace from Mrs. Dillon ran into this studio."

"Could you identify that man?"

"I think you already have him under arrest. I don't know his name, but I feel certain he is the same person now that I have viewed him closely."

"He ran into this studio you say?"

"Yes, and when I entered I found Hanley Cron modeling the Black Imp.

The possibility did not occur to me at the time, but now I know he must have received the pearls from the actual thief, and molded them into the wet clay."

"A very clever scheme."

"Yes, and it would have succeeded, save for one thing. Cron copied the statue of Amy Coulter's Black Imp. We thought he intended to put it to some commercial use, and took it from him."

"He permitted you to take it away?" the officer asked in surprise.

"It happened that a policeman came into the studio. I think he must have been afraid to make a fuss."

"Undoubtedly. Then what happened?"