When Dr. Watson visits the apartment of his friend Sherlock Holmes, he finds the world’s first consulting detective in conference with a client with bright red hair, Mr. Jabez Wilson. Holmes invites Watson to remain and to hear the client’s unusual story. Wilson, a man of about sixty, is a not very successful small businessperson; the most noteworthy thing about him is the flaming color of his hair. After introductions all around, Wilson explains how upset he has been by a recent incident, so upset that he has come to Holmes for his help.
Wilson says that he is a man of very settled habits, a bachelor who almost never deviates from the daily routine of running his pawnshop. At least, he never deviated until he heard of the Red-Headed League. One day in his shop, his assistant, Vincent Spaulding, called his attention to an advertisement in the newspaper that announced an opening in the Red-Headed League. The announcement promised a salary of four pounds a week (about twenty dollars at the time of the story) for “purely nominal services” to the candidate who was accepted. The amount was a considerable sum at the time, especially if the duties were slight, and Spaulding urged Wilson to apply. The timid pawnbroker did so, but only after Spaulding practically took him to the office mentioned in the ad.
There Wilson heard the story of an eccentric American millionaire who had left a fortune to provide an income for Londoners with red hair as bright as the millionaire’s had been. Wilson was accepted into the League. He learned that the nominal duties consisted only of his coming to the office from 10:00 a.m. until 2:00 p.m. each day and copying out the Encyclopaedia Britannica in longhand. Since most of Wilson’s business was done in the evening, he was delighted at the chance to supplement his income. This he did for eight weeks, getting well into the “A” volume, until one day he arrived at the office to find it closed, with a notice on the door that the Red-Headed League had been dissolved. He was so disturbed by the thought that someone had been playing a practical joke on him that he came to Holmes for a solution.
Holmes points out that Wilson has lost nothing—indeed, has made thirty pounds—but says that the case is remarkable. Holmes soon discovers that Spaulding, who encouraged Wilson to apply, is not all that he seems. The assistant came to Wilson recently for half-wages, claiming to want to learn the business. Although perfectly satisfactory as an assistant, Spaulding has an interest in photography, has set up Wilson’s cellar as a darkroom, and is down in the basement every minute that Wilson does not need him in the shop above. Holmes promises to look into the case, and Wilson leaves.
Holmes and Watson first visit the district in which Wilson’s shop is located, where Holmes does some mysterious things: He asks directions from a clerk at the pawnshop; he taps the street outside with his walking stick and remarks that the case is complicated by the fact that it is Saturday. Later, he asks Watson to meet him at Baker Street that evening at ten, and to come armed. When Watson arrives, he finds two other men there: Peter Jones, an inspector from Scotland Yard, and a Mr. Merryweather, a bank director. Holmes takes them to a branch of the City and Suburban Bank, a branch located in the same district as Wilson’s pawnshop. There they enter the vaults of the bank, where Merryweather shows them a shipment of thirty thousand gold coins they have recently received from the Bank of France. Holmes says that they may have some time to wait, and they sit quietly in the dim vault.
After about an hour, they see a glint of light from the floor: A paving stone moves, and a man’s face appears from the hole. He climbs out, and Holmes and the inspector seize him.
Holmes later explains his reasoning: He became suspicious when first he heard that Vincent Spaulding had taken Wilson’s job offer at less than the normal wages. His time in the cellar suggested that there would be found the real interest of Spaulding. The business of the Red-Headed League seemed to be a trick to get the sedentary Wilson out of the shop for some hours each day so that Spaulding and his confederates could do whatever they were up to, unobserved. When, on his visit to the area, Holmes tapped the pavement and heard a hollow sound, he concluded that they were tunneling beneath the street to the branch bank in question. When he asked the pawnbroker’s clerk, Spaulding himself, for directions, Holmes recognized him as John Clay, a notoriously cunning criminal. The rest was the simple matter of gaining entrance to the bank vault—Holmes reasoned that the robbers would strike on Sunday, when the bank was closed—and waiting for them to appear.