Plot
Sherlock Holmes and is retiring, Watson taking up the rooms full-time with his wife (who, although repeatedly mentioned, remains unseen throughout the film,) and is visited by Professor Moriarty before he goes, the latter congratulating Holmes on his "wise" decision to retire, saying that he should otherwise have been obliged to "take extreme measures". Holmes leaves to Sussex soon thereafter, being accompanied by Mrs. Hudson.
Meanwhile, Moriarty and his clerk and jack-of-all-trades minion Colonel Moran are consulted by Ted Balding (Baldwin in the book), who explains that he and the remaining members of the society of Scowrers wish Mr. John Douglas of Birlstone Manor (also called Birleston throughout the film, and "Castle" and "Hall) dead, and are willing to pay Moriarty fifty thousand dollars, which Moriarty says is a "reasonable" sum. Moriarty agrees, but stipulates that Balding does whatever he says, follows his orders implicitly, and leaves things in Moriarty's hands, to which Balding acquiesces.
Meanwhile, Holmes, while Watson is paying a visit to him and Mrs. Hudson, receives a letter from his informant Porlock, a "weak link" in Moriarty's "chain", which consists only of several letters, numbers, and the words "DOUGLAS" and "BIRLSTONE", which, by various deductions and Whittaker's Almanac (as in the book), they proceed to figure out means that something bad shall occur to Mr. John Douglas of Birlestone Manor. Lestrade, fulfilling Alec MacDonald's somewhat less dim-witted role from the book, then arrives, saying he wishes to consult Holmes about something; then sees the Birlstone papers, and is quite surprised, for, as he explains, Douglas was "horribly murdered" the night before. Holmes bets an incredulous Lestrade a bee-hive (as in the books, Holmes has retired to bee-keeping) to Lestrade's bowler-hat that Moriarty is involved, and despite Watson's dissuasions they go to Birlstone.
At Birlstone they meet local Inspector Mason, examine the body, looking at the weapon--a sawed-off shotgun--finding a brand on Douglas' arm and Douglas' wedding-ring missing, oddly enough, they interview Douglas' friend Cecil J. Barker and Douglas' wife Ettie (who is the first wife from the book, instead of the second), but when the latter tries to tell other things, Holmes reprimands her and tells her to tell the truth, explaining that the brand is that of the murderous secret society in America, the Scowrers. (Here follows almost exactly, narrated by Mrs. Douglas in flash-backs, part two of the original book). Lestrade, hearing it, gives his opinion that it is solved: Douglas, who turned out to be a detective called Birdy Edwards, was murdered by his old compatriot Ted Balding, who broke gaol some years before, and Watson supports this, however Holmes rather inscrutably points out that Douglas has a dumb-bell missing, and then tells Watson to bring him his (Watson's) crook-handled umbrella, as he (Holmes) wishes to "fish" in the moat. Holmes also rather mysteriously tries to pawn off a "History of Birlstone" book on Lestrade.
Watson goes out to offer his condolences to Mrs. Douglas, and finds her laughing and rejoicing with Barker; she asks him a question, that if she were to tell Holmes something in confidence, would he give it to the police?--Watson stuffily responds that they ought to ask Holmes himself, and passes back in, to wear Holmes has finished fishing, and found a bundle, containing a map of Birlstone, a knife, clothes, and the dumb-bell, which he at first conceals from Watson. Watson gives Holmes his opinion of what REALLY happened, viz.: That Barker, in love with Mrs. Douglas, killed Douglas, and Mrs. Douglas made up the whole story of the Scowrers. Without saying if he believes it or disbelieves it, Holmes tells Watson that the candle, the same, as Ames the butler informed them, as some unlighted ones in the room, could not possibly have burnt down so much as it has in the time Barker said it did, and therefore he was in the room much longer; and since Mrs. Douglas corroborates his story, she must too be lying. He then tells Watson and Lestrade to come with him into the tower that night.
Meanwhile, Moriarty and Moran prepare to go to Birlstone, Moriarty saying that they shall find Balding in the tower, hidden, explaining that the best place for him to hide was near the crime had been committed, as no one should suspect it.
In the tower, Holmes takes them to an old priest-hole (hence the "History of Birlstone", which should have explained this), and he invites Douglas to come out; and then explains what really happened, viz.: Balding came, according to Moriarty's plan, intending to kill Douglas with the knife, they fought in the room, and the knife fell from Balding's grasp; then Balding tried to shoot him with the gun, but it went off accidentally in the ensuing struggle and killed him. Barker and Mrs. Douglas came in, and Douglas explained what they should have to do: he should set up the now-unrecognisable Balding as himself (Balding having also the brand of the Scowrers on him), and he should start anew later under a different name, no longer plagued by the escaped Scowrers--but Douglas, although he put his other rings on Balding, was unable to remove his wedding-ring, from long use to it. He and Barker then, weighed down by the dumb-bell, threw Balding's possessions in the moat. Douglas congratulates Holmes on his deductions.
Moriarty then comes in a car with Moran, telling the Colonel that he shall be back presently with Balding; however, upon entering the tower, he finds Holmes, Lestrade, Douglas, and Watson awaiting him; he tries to strangle Holmes, but fails. Moriarty, however, manages to make a bolt for it up to the top of the tower, throwing loosened rocks down at the others as he goes; and, when standing in the ruined window, he tries to smash Holmes, but Holmes quickly takes out his revolver and shoots him, causing Moriarty to fall in to the moat below and drown. Upon Lestrade and Watson remarking that it was a long drop, Holmes says it was "a little longer than that requiring by law", but that it suffices, as he calmly lights his pipe. (The killing of Moriarty, as Watson observes, is the titular "Triumph of Sherlock Holmes").
