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The story begins with Frank and Joe Hardy barely avoiding being hit by a speeding driver, who they notice has bright red hair. Later, this same red-haired driver attempts a ferry boat ticket office robbery and successfully steals a yellow jalopy called Queen from the Hardys' friend, Chet Morton. Due to one witness reporting that the villain had dark hair, the Hardys assume he is using a red wig. It is learned that the thief returned to Chet's home to steal a tire, helping Frank and Joe to find Queen abandoned in a public wooded area.
The excitement of finding Queen is quickly gone when it is reported that there has been a robbery of forty thousand dollars in securities and jewels from the Tower Mansion owned by siblings Hurd and Adelia Applegate. Hurd Applegate is convinced that the Tower's caretaker, Henry Robinson, is the guilty party. The Hardys are especially concerned by this accusation, because Henry's son, Perry, is a friend of theirs who will have to quit school to work since his father can no longer get a job as a result of Applegate's accusation. The only "proof" of Henry Robinson's guilt is that he was suddenly able to pay off a debt and refused to reveal where he got the money to do so.
The Hardys suspect that the red-haired man may be involved with the Tower robbery and search the place where The Queen was found, finding the red wig. The Hardys' dad, detective Fenton Hardy, learns that the wig was manufactured in New York City. Fenton Hardy goes to New York and learns of a criminal named John "Red" Jackley who is fond of using disguises. Soon, Jackley is injured in a railroad handcar accident, causing him to be hospitalized. About to die, Jackley confesses that he committed the Tower Mansion robbery and put the loot "in the old tower..." Jackley dies before he is able to explain further. Jackley is a tall man with dark hair.
