From this point on, Watson tells us, the story will be told as it was reported to Holmes himself: in letter form. Watson describes the loneliness and ancient feel of the moor. He goes on to relate the status of the escaped con, who has not been seen in two weeks. The relieved locals assume he has fled the area, since there is no food to sustain him on the moor.
Watson also alludes to a budding romantic relationship between Sir Henry and Miss Stapleton, whom he characterizes as exotic. Though Watson thinks her brother is a bit of a wet blanket by contrast, he nonetheless admits that he has hidden passions. He points out that Mr. Stapleton expresses disapproval of Sir Henry's interest in his sister.
Watson goes on to relate his meeting with another neighbor, Mr. Frankland of Lafter Hall. Mr. Frankland is a good-natured if quarrelsome man, who likes to sue people for the sake of suing. Watson notes his interest in astronomy and the telescope atop his house, often used for searching the moorlands for the escaped convict.
When Watson mentions that telegraph did not make it into Barrymore's hands, and he describes Sir Henry's questioning of his butler. Barrymore admits that he did not receive the wire from the postman himself, but insists that he was indeed at home that day. When Barrymore wonders what all the questions are about, Sir Henry appeases him by giving him a box of old clothes.
Watson reiterates his suspicions that Barrymore, whose wife he has once again been seen crying, is up to no good. Late one night, Watson is woken by the sound of footsteps outside his door. Peeking out, he sees Barrymore, silhouetted by a candle he is holding, skulking down the hall. As Watson follows him, he sees the butler go up to a window, and hold his candle aloft as if signaling to someone. Suddenly, he lets out an impatient groan and puts out the light. Watson makes it back to his room just in time, and later that night hears a key turning in a lock. Watson offers no speculation, leaving the theorizing to Holmes.
Having investigated the window that Barrymore used, Watson determines that this particular window has the best view of the moor. Watson suggests his suspicion of a love affair between Barrymore and a country lass, which would explain his wife's crying. Informing Sir Henry, who claims to have heard Barrymore's late night activity, Watson plots a late-night stakeout to catch Barrymore in the act.