Source plot synopsis — includes the ending
Birlstone House is surrounded by a shallow moat, which the murderer appears to have crossed as they fled the crime scene. After interviewing Cecil Barker, a frequent guest at Birlstone House who discovered the body, they agree that suicide is out of the question and that someone from outside the house committed the murder. Barker explains that Douglas married after arriving in England five years earlier. Barker believes a secret society of men pursued Douglas, and that he retreated to rural England out of fear for his life. Mrs. Douglas said her husband mentioned something called "The Valley of Fear". Holmes learns that the housekeeper heard a sound, as if of a door slamming, half an hour before the alarm; Holmes believes that this sound was the fatal shot.
Local detective White Mason and Inspector MacDonald track a bicycle found on the grounds of the house to an American staying at a guest house. The American appears to be the murderer, but there is no sign of him. Holmes asks MacDonald to write to Barker, telling him that the police intend to search the moat the next day. That night, they lie in wait outside Birlstone Manor and see Barker fish the clothes of the missing American out of the moat. Barker refuses to explain the situation. At that moment, Douglas appears, alive and well. He hands Watson a written account called "The Valley of Fear", which explains why he feared for his life.
Douglas explains that he had spotted an enemy of his, Ted Baldwin, in the area and expected an attack. When Baldwin attempted to shoot Douglas in his study, Douglas grabbed hold of Baldwin's shotgun; in the struggle, Baldwin was shot in the face. With Barker's help, Douglas dressed the man in his clothes to confuse his enemies. He then hid himself in the old priest hole at Birlstone.
The main narrative pauses to explain Douglas' past in America. Douglas' real name was Birdy Edwards and he had been a Pinkerton detective in Chicago. Working undercover for the Pinkertons, Edwards had travelled to Vermissa Valley (the titular Valley of Fear) under the name 'Jack McMurdo' to infiltrate a corrupt coal miners' masonic lodge, secretly a cover for a murderous gang of protection racketeers known as the Scowrers. After Edwards brought the gang to justice, the surviving criminals attempted to kill him. Edwards changed his name to Douglas and fled to England.
Holmes urges Douglas to leave England. Douglas takes this advice, but, shortly after, Holmes learns from Barker that Douglas was lost overboard on the ship to Africa. Holmes believes Moriarty was responsible for ending Douglas' life and he swears to bring Moriarty down.
Sources and content license
Source and revision history ↗ · Adapted from Wikipedia contributors, The Valley of Fear. Section headings and formatting adjusted. · Content license