Summary
At the behest of one of his wife's friends, Watson goes to Upper Swandam Lane, a notorious neighborhood, to look for the friend's husband in an opium den. After finding the man, Watson runs into Holmes in disguise, who explains that he is working a case on the disappearance of a man named Neville St. Clair.
Mrs. St. Clair had explained to Holmes that she unexpectedly saw her husband in the window of the opium den and that when she went in to look for him, he had disappeared. All that were left in the room with Hugh Boone, a professional beggar, were Mr. St. Clair's clothes. Boone is imprisoned on suspicion of having had something to do with St. Clair's disappearance.
Holmes, however, deduces that Boone is in fact St. Clair in disguise, which he proves by wiping the stage cosmetics from Boone's face in the prison. St. Clair/Boone explains that he figured out he could make a solid living by begging in disguise but does not want his wife to find out. Holmes makes him swear not to do so again.
Analysis
There are several red herrings in this story that are meant to mislead the reader and do in fact mislead Holmes, even though they were not planted by the intention of any villain. This demonstrates that in Holmes' detective work, not every clue leads in a straightforward manner to an accurate conclusion about the truth of the case and that Holmes, just as the reader, can become confused.
This story is also perhaps the only one in which the usual opposition of villain and victim is played with, so that the suspected villain is in fact the victim, and the victim is in fact the one who caused the mystery and potential harm in the first place. As in "A Case of Identity," the clever use of a disguise and acting allow for a character to assume another identity for the sake of financial gain, which is an element that firmly roots even the most outlandish of mysteries in the most mundane of realities. It also suggests, in the case of the present story, the kind of socioeconomic problems that motivate many of the crimes or partial crimes. St. Neville resorted to begging full-time because his newspaper employment was unfulfilling and not well-paying, and he was able to pull begging off as a job because of its established place in society.