Thomas Jackson interviews Zora Smallidge at her Kingsport apartment. She’s evasive, but confronted with the evidence that her grandfather had her address, she admits that he visited her there two nights ago. She thought he was running away from Dixon and trying to get rid of something.
Jackson then collects Celestine Whateley and the two of them visit Horace “Diamond” Walsh at his office. (On reading Jackson’s card: “Arkham, huh? I ain’t been to Arkham since — I’ve never been to Arkham.”) He tells them that he gave Smallidge some money and put him on a bus to New York City, but they’re pretty sure he’s lying. Whateley suggests that Smallidge left something with Walsh before he left. Walsh tells them he wouldn’t hold anything dangerous, despite his familial feelings for the old man. He also says that Smallidge said something about making a “horrible mistake.” Again, they think he’s not being completely truthful with them.
Dr. Whateley calls on some of her contacts in the Occultist community and learns that Austin Kittrell has been a fixture at auctions and estate sales, buying all sorts of occult, religious and funerary objects. He’s either a very eclectic collector or not a very discriminating one. He was a member of the now-defunct Providence Spritist and Psychic Society, but Whateley considers that a dead end. The group was part of the 1920s spiritualism fad and was never very serious. More of a secret drinking club, really.
Jackson and Whateley talk to Kittrell, who (lies to them and) says he never met Smallidge and doesn’t have anything from him.
They stake out his hotel and tail him to a local restaurant. Whateley sits in the bar to see who he meets while Jackson doubles back to search his hotel suite. Sneaking in and picking the lock, he finds some notes on upcoming auctions and book sales. There’s a wall safe in the suite and he picks that lock as well (it locks with a key rather than a combination) and finds an object wrapped in a bath towel. It’s a red box, roughly 14 inches by 10 inches by 2 inches, made of lacquered wood ornately carved with aquatic themes — lots of tentacles. He rewraps it, relocks the safe, stashes the box in the trunk of his car and returns to the restaurant.
There, Whateley has seen that Kittrell’s dinner companion is Oliver Gardiner. Jackson tells her he thinks he’s found the Red Box and they leave immediately for Arkham, where they arrange to have the box securely crated and stored in the Archaeology Department’s vault. They decide to pretend to keep looking for the box, to divert suspicion from themselves once Kittrell notices that it’s missing.