The auction is about to begin, and the narrator announces that the first item up for auction is the compass. The narrator is surprised to find that the auction is being held in a private room, and he asks the detective if he is surprised that he is there. The detective tells him that there are witnesses to the phantom, and that it is not necessary to be a real person to be able to see the phantom. He offers to give the detective the compass if the detective will help him catch the thief. He also offers to take the contents of the compass without any conditions.