"Mr. Dene's new submarine!" Mr. Llewellyn John's hands dropped to his sides as he gazed at Sage in blank amazement. "His new submarine," he repeated.

"Yes, sir."

"What on earth do you know about it?" demanded Mr. Llewellyn John, looking at Sage with a startled expression.

"John Dene has invented a submarine," proceeded the literal Sage, "with some novel features, including a searchlight that has overcome the opacity of water. The thing is lying on the St. Lawrence River just below Quebec. Yesterday he called to see Sir Lyster Grayne, who brought him here with Admiral Heyworth."

Mr. Llewellyn John gazed in bewilderment at Malcolm Sage, his eyes shifted to Colonel Walton and then back again to Sage.

"But," he began, "you're watching us, not the enemy. Did you know of this?" he turned to the chief of Department Z.

Colonel Walton shook his head. "I haven't seen Sage since you telephoned yesterday until a few minutes ago," he said.

"Where—how——?" Mr. Llewellyn John paused.

"It's our business to know things, sir," was Sage's quiet reply.

"And yet you didn't report this to——" began Mr. Llewellyn John.