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Ivanov leaves for the country where he has been appointed chief inspector. On the train, Ivanov is acquainted with Pechurkov, a notorious "crook" from the same town. The inspector passes himself as a leather-merchant. In the compartment Pechurkov brazenly lies that he personally knows the expected inspector and confidentially tells everyone his fabrications. His "piece of news" spreads all over the little town. Men and women, old and young, whisper and part with the words: "And keep it under your hat!" Pechurkov meanwhile buys all the hides from the other merchants, signing bills, in order to resell them to his new acquaintance. The leather-merchants gather. Somebody announces that Ivanov is no leather-merchant but the new chief inspector. Pechurkov loses his money. He bursts in tears. The inspector promises to tell him "the latest news". He whispers something unintelligible and ends with: "But keep it under your hat!"