Norman Gortsby always prided himself on his incredible ability to read people. As he sits on a park bench in Hyde Park each evening, he watches the massed ranks of humanity going by and jumps to conclusions about what kind of people they are and what kind of lives they lead. There's an air of smug self-satisfaction about Gortsby, who seems to think he possesses some kind of magic power in reading people and their motivations.
When the young man sits next to him on the park bench, it seems that Gortsby's remarkable—but self-assessed—record of judgement will continue. By a process of deduction that would impress Sherlock Holmes, he arrives at the conclusion that the young man is a con-artist trying to cheat him. The young man's story about losing his hotel and his bar of soap on the same day is plainly ridiculous, and so Gortsby, full of himself as always, refuses to hand over any money.
However, after the young man trudges off, disappointed, Gortsby sees a block of soap lying on the ground, indicating that the young man was telling the truth after all. Gortsby runs after him, and when he catches up to the young man apologizes for doubting his story earlier and loans him some money.
Yet Gortsby's talent for reading people has failed him, because the young man really was a con-artist after all, and the bar of soap belonged to someone else. The problem is that Gortsby's supposed talent for reading people has never really tested up until now. But now that it has been, it's been found wanting.