Strange things are happening in the hotel. First, Racksole notices the headwaiter, Jules, winking at his daughter's friend, Reginald Dimmock, while they consume their expensive steak. He dismisses the headwaiter. The next day Miss Spencer, the pretty, efficient hotel clerk who has been employed there for years, disappears. It appears that she just took her things and left, no one knows when or where. And Prince Eugen, a prince regnant of Posen, who was to come to the hotel and meet his youthful uncle Prince Aribert (he and the nephew are of the same age), never turns up. Then the body of Dimmock, who was an equerry to the princes, come ahead to prepare for their visit, is found. He was obviously poisoned. And soon after, Dimmock's body disappears.
The same evening the hotel is having a ball in the Gold Room, hosted by a Mr and Mrs Sampson Levi. There is a special secret window though which one can observe the room and the guests. Racksole looks out of it and sees among the guests the dismissed headwaiter, Jules. Racksole runs out to confront him and throw him out, but can't find him. He comes back to the secret window to find Jules, staring intensely into the ball room. Racksole orders him out of the hotel for the second