At the end of chapter three, Holmes and Watson arrive at what the author calls a "questionable and forbidding neighbourhood." Watson describes a line of dark brick houses, most of which are uninhabited, illuminated only by the gaudy public houses on the street corner. They stop at the only house with a light on and knock on the door.
In the next chapter, entitled "The Story of the Bald-headed Man," they enter what Watson calls a "sordid and common passage, ill-lit and worse furnished." They continue into another room, Watson calls an apartment, which as he says "looked as out of place as a diamond of the first water in a setting of brass." In comparison, to the hallway it is luxurious; decorated in a fashion inspired by the east. Expensive tapestries, curtains, and tiger skins are draped over the walls, oriental vases sit on sills, a huge hookah stands on a mat in the corner and a dove-shaped lamp hangs from the centre of the room. Watson says the carpet is so soft that his feet sink into it "as into a bed of moss."
Thaddeus Sholto is standing up to greet them. Watson describes him as a small man with a line of red hair skirting around a shining bald scalp and a set of irregular yellow teeth that he is so conscious of he tries to hide them with his hand. Despite his appearance, Watson says he is only 30 years old.
Thaddeus Sholto is presented as a strange little man, ingratiating and formally polite, but almost too polite, indicating perhaps that he's putting on some kind of an act. It's noticeable that there's something particularly weird about his facial features. They seem to be in a state of perpetual movement, constantly jerking this way and that between scowls and smiles. Nature has played an additional cruel trick on Sholto by giving him a pendulous lip beneath which protrudes a set of irregular yellow teeth. For good measure, Sholto is bald, despite his being only thirty years old.
As for Sholto's apartment, it sticks out like a sore thumb in the rickety old house it occupies. Though somewhat poky, Sholto's place is crammed from floor to ceiling with expensive antiques, furnishings, and draperies. It's notable, too, that there's an air of Eastern luxury about the place, with its two great tiger-skins and the large hookah, or water-pipe, that stands on a mat in the corner.
The description of Sholto is perhaps designed to throw us off the scent, as it were—to make the reader think that perhaps he's the one responsible for the crime. The fact that he's able to fit out his small apartment with such luxurious items only adds to our suspicions. Although Sholto turns out to be completely innocent of any crimes, he's briefly placed under arrest by Athelney Jones.