A young Sussex gentleman named John Openshaw has a strange story: in 1869 his uncle Elias Openshaw had suddenly come back to England to settle on an estate at Horsham, West Sussex after living for years in the United States as a planter in Florida and serving as a Colonel in the Confederate Army.
Not being married, Elias had allowed his nephew to stay at his estate. Strange incidents have occurred; one is that although John could go anywhere in the house he could never enter a locked room containing his uncle's trunks. Another peculiarity was that in March 1883 a letter postmarked Pondicherry, in India, arrived for the Colonel inscribed only "K.K.K." with five orange pips enclosed.
More strange things happened: Papers from the locked room were burnt and a will was drawn up leaving the estate to John Openshaw. The Colonel's behaviour became bizarre. He would either lock himself in his room and drink or he would go shouting forth in a drunken sally with a pistol in his hand. On 2 May 1883 he was found dead in a garden pool.
On 4 January 1885 Elias's brother Joseph receives a letter postmarked Dundee with the initials "K.K.K" and instructions to leave "the papers" on the sundial. Despite his son's urging, Joseph Openshaw refuses to call the police. Three days later, Joseph Openshaw is found dead in a chalk-pit. The only clue John Openshaw can furnish Holmes is a page from his uncle's diary marked March 1869 in which orange pips have been sent to three men, of whom two flee and the third has been "visited".
Holmes advises Openshaw to leave the diary page with a note telling of the destruction of the Colonel's papers on the garden sundial. After Openshaw leaves, Holmes deduces from the time that has passed between the letter mailings and the deaths of Elias and his brother that the writer is on a sailing ship.
Holmes also recognises the "K.K.K" as Ku Klux Klan, an anti-Reconstruction group in the South until its sudden collapse in March 1869 – and theorises that this collapse was the result of the Colonel's maliciously taking their papers away to England.
The next day there is a newspaper account that the body of Openshaw has been found in the River Thames and the death is believed to be an accident. Holmes checks sailing records of ships who were at both Pondicherry in January/February 1883 and at Dundee in January 1885 and recognises a Georgia sloop named The Lone Star. Lone Star may refer to the Lone Star State, Texas, although the boat is registered to Georgia. Furthermore Holmes confirms that The Lone Star had docked in London a week before. Holmes sends five orange pips to the captain of The Lone Star, and then sends a telegram to the Savannah police claiming that the captain and two mates are wanted for murder. The Lone Star never arrives in Savannah due to a severe gale. The only trace of the boat is a mast marked "L.S." sighted in the North Atlantic.