Two young collegians, Anthony Markham, an enigmatic person, and Alan Strange, whose temperament is the direct antithesis of his friend, compete for the honors of swimming. Both men are aspirants for the hand of Rosalie Latimer, the daughter of the banker, Latimer, to whom Alan is the confidential secretary. Alan wins the swimming match, which so distresses Markham that he insults him. Alan, taking exception to the retort, retaliates by a swift punch on the jaw, felling Markham, who leaves, vowing vengeance. Two years later we sec Alan still trying to win the hand of Rosalie, while Markham, still the puzzling fellow, has managed to break into society and is looked upon as a reputed gentlemen, although his source of income is quite unknown. He, too, is still trying to win the fair Rosalie. To the home of the banker come Lord and Lady Monteagle, bedecked with diamonds galore. For fear of any probable burglary, the chief of Scotland Yard details Detective Locksley to the mansion. The banker is persuaded to place the diamond necklace belonging to Lady Monteagle in the safe, and he delegates this duty to Alan, who, just as he has completed his commission, is knocked unconscious from a blow on the head by Markham, who appropriates the jewels and escapes without leaving any means of identification. Alan is found later, and despite his protestations of innocence, is placed in jail. Through the importunities of Rosalie, who is the only one to believe that Alan is innocent, Locksley is persuaded to ferret out the real thief. In the company of an assistant detective. Locksley goes to the desolated house of Markham, and through past observances he comes to the conclusion that the "water rat" (Markham), is responsible for the number of burglaries and crimes committed in the past. Following the requests of Locksley, the assistant dresses as a scarecrow, and from a place of vantage he observes every move of the "water rat." Locksley calls at the house of Markham and is received by a man servant. He is told to wait a while. Becoming impatient after waiting for some time, Locksley looks out of the window and perceives the servant making a fast getaway with a package in the surrounding water. This is also seen by the assistant, who goes in pursuit. The assistant, in struggling with the servant, is knocked unconscious. Locksley goes to his rescue, and he finds in the canoe a small package that was overlooked by the servant. Upon opening it he discovers a diamond ring, the property of Lady Monteagle. Locksley and his assistant again visit the house of the "water rat," and after climbing the stairs in the turret, they observe Markham examining his plunder. A terrific struggle follows. Markham, hearing more of the detective's aides coming up the stairs, plunges head first out of the window. He meets his death in the dive and Alan is relieved from the stigma of theft, much to the pleasure of Rosalie.