Summary
Watson escorts Mary home, only to see her burst into tears on the ride back, a result of the turbulence of the day. Watson then goes to pick up Toby, only to be yelled at by Mr. Sherman before he realizes that Watson is a friend of Sherlock's.
Mr. Sherman explains that he is wary of children who come around, and he happily helps Watson. Sherman has a large collection of animals, on whom he dotes. Watson wins Toby over with a sugar cube and takes him back to Pondicherry Lodge.
Sherlock and Watson retrace the footsteps of the man who climbed in the window, noticing that his toes are spread wider than either of theirs. Holmes easily retraces his steps, proving that his theory is possible.
Holmes then uses Toby to reconfirm other parts of his theory, using the dog to trace the scent of creosote across the road. Sherlock uses the clues in his possession to deduce that the wooden-legged man is Jonathan Small, a convict whom Morstan met during his travels and whose name appears on a map of his.
It was due to his status as a convict that Small could not partake of the treasure as well. Holmes surmises that Small must have had help from within the household in order to execute his plan successfully, and that it was this associate who actually committed the act of murder.
Holmes believes that this associate is the wild and hairy man whom the twins saw as their father died. However, the creosote trail proves to be a dead-end:Toby got confused tracking the scent because so much creosote is moved around the city each day. They try to find the right trail but find that it ends at a boat, another dead-end. However, it is not a total loss: Holmes and Watson meet Mrs. Smith, who reveals that her husband took his boat, the Aurora, out at the request of a wooden-legged man and still hasn't come back.
Holmes employs some of his associates, "a dozen dirty and ragged little street Arabs" (126), sending them out to the docks to watch for the return of the boat. Watson and Holmes continue to try to puzzle out who the wild man is and where he could be from, guessing that he might be from South America.
Analysis
Watson expresses his doubts about Toby the dog, but is proven wrong as the little dog has no trouble following the scent of creosote. Holmes also demonstrates that some of his detective work is dependent on luck when he says how lucky it was that it hadn't rained yet, which would have washed away a piece of evidence.
We also see that Sherlock does not work completely alone. He has a cohort of people who help him as well, many of whom we meet in later stories in the "Sherlock Holmes" stories. Here we meet the dog Toby, who has a very sensitive nose. Toby's traits help supplement Sherlock's own abilities. Sherlock is able to confirm his hunch by verifying it through Toby.
Holmes theorizes how the murderer accomplished his crime, bouncing his ideas off of Watson. Here the reader sees the essence of their friendship and partnership: though Sherlock is very competent on his own, he works better with the help of others.
Holmes plays his violin while Watson falls asleep until the afternoon. Watson goes to visit and update Miss Morstan. Holmes struggles with the case, growing irascible. He again places ads in the newspaper asking for the whereabouts of Mr. Smith and his boat. A Mr. Athelny Jones shows up at Baker Street with a telegram that was sent to him. Holmes plays a prank on the two by appearing disguised as an old man, having just come back from investigating in this disguise, since too many people know his face nowadays,
