Our hero recognized Ike Denman, the traitor and falsifier, captain of the "Nancy," and he heard Ike say:

"You are sure it was not one of the islanders?"

"I am sure. I tell you I recognized the man!"

"You recognized him?"

"Yes."

"Who was he?"

"Ballard!"

A murmur of incredulousness rose from the men, and Ike Denman exclaimed:

"You have been fooled by your fancy; you have been dreaming!"

"No; I wasn't dreaming; I swear I saw Ballard, the man who went overboard from the 'Nancy' twenty miles out at sea."

"I tell you, man, you have been dreaming."

The man pointed down to his wet clothes.

"Yes, you scoundrel, you fell asleep and rolled down the bank into the water, and you saw a ghost in your dream."

"You fellows may think I saw a ghost, but I can prove I didn't. Yes, sir, prove it."

"How?"

"Bring your lanterns and come with me."

"What will you show us?"

"The man's tracks in the sand at the spot where he and I had the wrestle."

The man started for the point where our hero had first met the smuggler; had the former been less bravo and reckless he would have seized the opportunity to get away, but he was curious to witness the result of the inquiry, and he moved along to the spot where the combat had taken place, and took up a position on the bluff near enough to see and overhear.

The men with their lanterns reached the place and an examination followed.

The imprints of two pairs of feet were plainly visible. Denman made close examination, even measuring the different footprints; when he had concluded he said in a hoarse voice:

"Boys, we've been followed; there's an enemy on the island and he must never get away alive!"

By the glare of the lanterns our hero could see the men's faces, and they were pale and contorted with excitement and trepidation.

"I reckon I'll go now," he said, "it's getting rather warm around here."

The officer quietly moved away, while Denman divided his men into several squads and started them on a hunt for the spy.

The master of the "Nancy" was completely mystified. He could not understand how it was possible, under even the most extraordinary circumstances, that Ballard could be alive and upon the island. He supposed; as a matter of course, the detective was dead, and yet his man had positively sworn as to the revenue officer's identity.

"This is the most wonderful thing in all my experience!" declared the master of the "Nancy," as alone he walked back toward the landing-place of the boats.

Meantime the detective had reached a most extraordinary determination. He saw that the chances were against him if he sought to reach the boat in which he and Taylor had crossed from the mainland; and yet it ways absolutely necessary that he should have a boat. He reasoned that the smugglers would scatter all over the island, and concluded that the safest place for him was the starting-point of the searchers. It required a cool, level-headed man to decide under all the circumstances, and our hero was just the sort of man described.

CHAPTER XXVI,

The detective made sure that the men had scattered, and that the search was in full blast, when he doubled on his course and moved down toward the warehouse. Here again he displayed his reckless courage. He approached the small building on the bluff, from the rear, and entered it, and one mystery was explained--the building was but the cover to the entrance to an immense underground warehouse.

A lantern was hanging near by, and the detective seized it and descending the stairs entered a great store-house.

A sight met his gaze which filled him with amazement. His fortune was made at last; the store-house was filled with packages of valuable goods; indeed, an immense fortune lay scattered about.

Later on the detective came to learn more particularly the methods of the smugglers, but for the present as he stood there he realized that he was a wondrously lucky man, unless he should prove unlucky enough to be captured.

While standing in the subterranean store-house an idea entered his mind and he exclaimed:

"By George, that's just the scheme."

He returned to the upper room and replaced the lantern, and immediately redescended to the storehouse.

The detective had a masked lantern with him, having secured it while abiding a few hours at the home of his guide, Taylor.

Spencer Vance had determined to hide himself in the smugglers' underground warehouse. He had reached the conclusion that he could find no safer place.

Spencer Vance had struck a big scheme. Even while in such great peril, and while busy, he was revolving in his mind all the chances and contingencies; but over all loomed the possibility of discovery. There was no friendly sea to receive him should those men find him secreted in their treasure den.

The detective was like a man walking in a suspected coal mine with a lighted torch, who at any moment might strike a chamber filled with the fatal gas, which coming in contact with the light, would have blown man and mine to smithereens.

Meantime the search continued on the island, and the detective was rejoiced as he saw that, after all, the discovery of his presence was a most excellent thing, as it would lead to the eventual discovery of the real smugglers, through means which will be described later on.

Vance had measured every step as he progressed, and knew just where he would fetch out, provided he once got away from the island; but there, as stated, loomed the chance against him. His opportunity would depend largely upon the decision of Ike Denman after the return of his searching parties.

One of the searching parties was moving along looking for a trail, when a cry from one of their number brought the squad together. The man had stumbled upon the strapped and gagged smuggler.

There was a circus for a few moments after the discovery, and there followed some loud swearing, not low; but deep, fast and furious.

The man had been gagged so long it was some minutes before he could relate his sad tale.

One of the men said to him:

"Who served you out, Jim?"

When the man found voice he answered:

"The devil or one of his imps."

"Hello! did you see the ghost"

"What ghost?"

"The ghost of Ballard."

"I don't know anything about the ghost of Ballard, but I had a rough scrimmage with the gamest man I ever tackled."

"Didn't you recognize him?"

"No."

"I wonder if there are two of 'em on the island?"

"What's happened, boys?"

"Well, it's looking as though the devil himself were loose tonight."

The man proceeded and told how another of their crew had met the island mystery, and had been half drowned by him.