Holmes is very concerned by this news and outraged that the police have dismissed the matter as a practical joke. John Openshaw has a single piece of paper that survived the burning and Holmes urges him to place this on the sundial in the brass box with a note to say that the other papers were destroyed.
John hurries off to fulfil this task and Holmes explains to Watson that K.K.K stands for Ku Klux Klan. The K.K.K was a secret society formed by ex-confederate soldiers after the American Civil War. Holmes believes that the papers Elias burnt may have contained incriminating evidence against some men who had been involved with the Klan.
The next morning Holmes prepares to set out upon the case but Watson sees from the morning paper that Holmes is too late, John Openshaw is reported to have drowned by Waterloo Bridge apparently after an accidental fall.
Holmes is deeply affected by the death of the young man and sets a trap for the gang responsible for the murder. That night he returns to Baker Street and puts five orange pips in an envelope and addresses it to Captain James Calhoun. On the inside flap he writes “S.H for J.C.”