"What is your theory, Fred?" asked Dr. Dutton, with interest.

"I think I may as well take you all into my confidence," answered our hero.

"And why not?" replied the doctor.

"Of course you will, Fred," said Nellie.

"Yes, I think you can help me in working up the case."

"We will surely do all we can," said Dr. Dutton. "But what is the nature of your suspicion?"

"It is so grave a matter I hate to breathe it to any one till I have further proof, therefore I must ask you all to keep it strictly confidential."

"It shall be treated as such," replied Dr. Dutton.

"I think it probable," said Fred, "that John Rexford's store was robbed and burned, and it is not altogether impossible that it was done to raise this money for Mr. Simmons."

"Oh, that can't be so," returned the doctor, amazed at the thought.

"There are reasons that lead me to think so.""And Matthew might have done it to try and injure you," put in Nellie, as she thought how far De Vere had carried his malice.

"That might be so," replied Fred, "but I reason from the belief that Matthew was forced to raise the money."

"Is that the only point on which you found your theory?" asked Dr. Dutton.

"No, sir. I thought something was wrong when Jacob Simmons first met me in the mill. He seemed fairly startled on seeing me. I decided then to keep my eyes open. In a few days I saw him use a peculiar knife—called a mechanic's pocket knife—which is in itself quite a kit of tools. I managed to have Jack Hickey borrow it so I could examine it. The minute I had it in my hands I recognized it as the very one that was in Mr. Rexford's show case when I left his store. It was an expensive knife, and I don't believe Simmons ever bought it.

"That is a good piece of evidence, surely," replied the doctor, "but can you get the knife when you need it?"

"I have bought it," and he explained his method of obtaining it. "Moreover," continued Fred, "I remember when I was tried for burning Mr. Rexford's store, Matthew and Tim were both present. They sat together and showed a very keen interest in the trial, and when it went in my favor, their disappointment was plainly to be seen."

"Did it occur to you then that they possibly had anything to do with burning the store?"

"No, but knowing what I do now, it seems to me probable. This paper furnishes just the evidence I was waiting for."

"I admire your bold reasoning, Fred," said the physician.

"His theory seems plausible," added Mrs. Dutton, "though I can't believe Matthew would think of doing such an act."

Fred felt much pleased at the good impression he was evidently making upon Nellie's parents.

"I may be entirely wrong," he replied, "but I have sufficient confidence in the idea to feel warranted in testing the matter."

"I would advise you to do so," said the doctor.

Presently Fred arose to go, and after receiving a cordial invitation from the doctor and his wife to call often, and a cheerful good night from Nellie, he withdrew, happy over the warm welcome given him, and full of enthusiasm in his purpose to bring the guilty parties to justice.

He first went home and got the knife in question, and then made his way straight to Mr. Rexford's room, where he found him alone.

"Good evening, Mr. Rexford," said Fred heartily."Good evening," returned the merchant, wondering what the boy's object could be in calling.

This was the first time they had met alone to speak since the trouble at the store when Fred was discharged.

"I suppose you have learned nothing new relative to the cause of your store's burning," remarked our hero.

"No, nothing."

"You were not very generous with your old clerk to have him arrested, charged with such an act."

The merchant winced.

"I think I have a chance now to do you a favor in return for your generosity," continued Fred.

This sarcasm cut deeply, but there was something about the boy's manner that kept the merchant from answering angrily.

"What is it?" he at length asked.

"I have a clue that would perhaps lead to the arrest of the parties who plundered and burned your store."

Rexford's interest was now fully aroused.

"Have you?" he asked eagerly.

"Yes, and I have sufficient evidence, I think, to warrant you in making an arrest."

"Is it possible?"

"Yes, there is no doubt of it."Fred now took the knife from his pocket and passed it to his former employer.

The merchant recognized it instantly by its peculiar handle. He said, in answer to Fred's questions, that the knife had not been sold, and that it must have been taken from his show case the night of the fire. He remembered showing it that evening to a customer, and distinctly recollected putting it back into the show case.

This, then, constituted a strong piece of evidence to show that the store was robbed.

Fred then explained how the knife came into his possession.

"You have worked up the case skilfully," said Mr. Rexford.

"I hope I have made no mistakes," answered Fred.

"You have shown care and ingenuity, and have succeeded in getting very strong evidence. This is better than Sheriff Coombs has done."

"I have other evidence also in my possession that makes this much stronger," replied our hero, and he showed Mr. Rexford the paper that Nellie Dutton had found, and gave him his theory of the robbery.

"I agree with you fully. It looks very reasonable," said the merchant, whose enthusiasm was well aroused. "I can hardly wait till morning before taking action in the matter."