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"Beware of the water devil." That was what the editor said to the star reporter as he sent him off to Florida to investigate the mysterious water denizen that was causing a panic among the residents on the shores of Crystal Lake. The reporter laughed; he was not a bit worried about the water devil, for his assignment was taking him to the spot where his sweetheart lived and where he suspected a great treasure in gold bullion that had been stolen from her father was buried. Four crooks had stolen the gold from the mine of his sweetheart's father in Mexico and had carried it by boat to Florida, where one of them had double-crossed his pals, marooned them on an island in a lake, buried the gold and went north, expecting to join his wife and disappear with her, returning to Florida later for the gold, but the other crooks got away sooner than he expected, followed him North and besieged him in his own house. Cut off from all help, he wrote a note to his wife. He also drew a map telling where he had hidden the treasure, painted it over with blue watercolor and hung it on his wall just before the avengers broke in. In the fight that followed he was blinded and mortally wounded and was taken to the hospital. The wife of one of the crooks followed him there, knowing that he was blind, and pretending to be his wife, tried to get the secret of the treasure, but failed. Later he died after saying to his wife, who came at last: "The blue picture; the blue picture." Being out of money and unable to solve the mystery of the blue picture, the wife wrote to the mine owner, offering to divide the gold if he could help her locate it. The owner was away, and before his daughter could answer the letter the crooks managed to do away with the writer of it and carried off the blue picture, which they suspected contained the clue. It is at the scene of the killing that the reporter meets the mine owner's daughter and falls in love with her. It is there, too, that the reporter finds a fragment of the blue picture and suspects its importance, chiefly from the efforts of the wife of the sole surviving crook to steal it from him. He lets her steal it at last, and then follows her and finds the blue picture in the shack in Florida where she lives with her husband. This shack is on the banks of the lake where the water devil moves and has his being. Hesitating to carry off the picture, the reporter photographs it, only to find out later that blue (the picture is blue) is non-actinic and does not photograph. His sweetheart, who develops the film for him, comforts him for his failure. They throw aside the film as useless; they had hoped the pictured scene would give them the location of the gold. The film falls into the hands of the woman who now has the picture, and she finds out that the writing and the plan giving the secret has photographed through the blue and can be read by the aid of a magnifying glass. But before she can take the secret to her husband and with him find and get away with the gold, the daughter of the rightful owner of the gold comes upon her, takes the film from her, locks her up, and gets to the reporter with the glad tidings that at last she knows where the stolen gold is buried. Unluckily, the imprisoned woman's husband is with the reporter when the girl brings the news, and he offers to take the pair to the island where the gold is buried, in his boat, and help them to dig it up. All this he does, and then he calmly tells them that the gold is his and they are going to die and be buried in the hole from which the gold was taken. Just at this moment, when the ruffian, standing in the gold-ladened boat, raises his rifle and is about to shoot, from the water behind the boat rises the water devil, of whom much had been told, but of whose real existence few people had been convinced. It carries off the would-be murderer, and the girl, happy in having restored to her father his lost gold, finds still greater happiness in the life-long love of the young reporter, whose bride she consents to be.