Watson decides to go visit Holmes two days after Christmas to wish him a happy holiday (a little late, perhaps?). Watson finds Holmes at home, sitting on a sofa in his purple dressing gown.
He, Holmes that is, has recently been examining an old hat, which Watson thinks might be connected to a crime.
Holmes says, no, no – it's just one of those weird little things that happens now and again. Here's how Holmes got the hat:
Peterson, a commissionaire (read: a hotel attendant or employee) acquainted with both Holmes and Watson, is walking home at around 4am on Christmas morning, having gone out for a drink with some friends.
As he's walking home, Peterson comes across a group of guys bullying this tall fellow with a goose carcass slung over his shoulder.
One of the "roughs" (a.k.a. thugs) manages to knock the hat off the head of this tall guy, and he raises his cane at them, accidentally breaking a shop window behind him.
Peterson runs over to the group to break it up, but because he's wearing a uniform, they all think he's a cop. The thugs take off in one direction, and the tall guy in the other, leaving behind both his goose and his hat.
Attached to the goose carcass is a card, "For Mrs. Henry Baker." But London has tons of Henry Bakers! So Peterson, honest fellow that he is, brings both the hat and the goose to his buddy Holmes for identification.
Holmes has been hanging on to the hat and the goose for the past couple days, but the goose is starting to get a little ripe. So Holmes has given it back to Peterson to roast. But he's hung on to the hat.
Here are some neat things about the hat:
(a) It has "H.B." written on the brim.
(b) It's cracked, worn, and is missing an elastic band that would otherwise hold the hat to one's head in strong winds.
(c) Holmes adds: the guy must be pretty smart, because the hat is giant. "A man with so large a brain must have something in it," says Holmes (Carbuncle.34).
(d) The hat's owner must have been well-to-do at some point, but has now fallen on hard times: the style of the hat suggests that it was made three years before, and was very expensive. But he's been wearing the thing solidly for the past three years and hasn't replaced it, even though it's so worn out be now – so he probably can't afford a new hat.
(e) The owner had the foresight to request a "hat securer" (that elastic band we mentioned in clue "b" above), but he hasn't replaced it since it fell off, "distinct proof of a weakening nature" (Carbuncle.38).
(f) The owner still has some self-respect, though: he has tried to cover up the patchy parts of the hat with black ink.
(g) The inside of the hat has a bunch of those tiny hairs that stick to your neck when you've just gotten a haircut, and the hairs are sticky with a kind of hair product called "lime-cream."
(h) Also gross: the hat's lining is stained with sweat: the owner, Holmes decides, is probably really out of shape.
(i) Holmes has also figured that this poor schmoe has a wife who no longer loves him: he has to be married because he was carrying a goose for Mrs. Henry Baker, but she obviously hasn't brushed the felt of his hat to get rid of the dust for weeks. She doesn't really care about his appearance anymore, figures Holmes.
(j) And, last but not least, there are five tallow stains on the hat from burning candles – a sign that the owner relies on candlelight, and not gas jets, to light his humble home.
Just as Holmes wraps up his little analysis of the mysterious hat, Peterson the commissionaire runs in.
When she was cooking that goose, Peterson's wife found a valuable blue diamond (a carbuncle, which is actually a cut of stone with a rounded top, generally used for red gems like rubies and garnets) in its throat. And it's the very same jewel lost by the Countess of Morcar, who's offered a thousand pound (read: about U.S. $132,000 today) reward for its return.
In fact, there's already been an arrest in the case: John Horner, a plumber at the Hotel Cosmopolitan. Horner is suspected thanks to the evidence given by one James Ryder, an employee at the hotel.
Horner has declared his own innocence but nobody believes him: after all, he's done time for robbery before.
Holmes is on the case! How did a blue jewel wind up in the neck of a goose owned by Mr. Henry Baker?
He decides to put an ad in the evening papers: "'Found at the corner of Goodge Street, a goose and a black felt hat. Mr. Henry Baker can have the same by applying at 6:30 this evening at 221B, Baker Street" (Carbuncle.64).
Holmes figures Baker will definitely reply to this ad because he's a poor man and he probably really regrets dropping his goose and hat in a moment of fright over breaking that shop window.
Holmes tells Peterson to leave the stone with Holmes, and to buy a second goose and leave that one with Holmes.
Peterson takes off and Holmes spends some time staring at the pretty blue gem.
Watson has some medical stuff to do for his practice, so he leaves but promises to come back later that evening to see how the case is unfolding.
Watson arrives at the Baker Street apartment at the same time as a tall fellow with the red, flushed complexion of a frequent drinker. It is, in fact, Mr. Baker, who's just as Holmes guessed: a drinker who has fallen on bad times. Still, he's smart and well-educated – and maybe a little ridiculous.
Baker explains that he didn't try to look for the lost bird and hat because he was certain he wouldn't be able to get them back, and that the thugs who assaulted him probably stole his stuff, too.
Baker shows no interest in recovering the original throat or feet of the bird when Holmes offers them to him, so he clearly has no idea that a blue diamond was stuffed into the neck of his goose.
Baker knows nothing of the crime, but he does know where he bought his goose. Holmes then manages to use this information (via a trip to an inn and a visit to a poultry stand in a public market) to trace the bird all the way to a Mrs. Oakshott at Brixton Road.
Just as Holmes and Watson are leaving the Covent Garden poultry stand and planning to visit Mrs. Oakshott in the morning, they hear a tussle.
The guy who sold Mrs. Oakshott's geese to the innkeeper, who then supplied Henry Baker, is named Breckinridge. He's in the middle of an argument with a small man who's asking about Mrs. Oakshott's geese. Breckinridge is getting really annoyed at all of these people asking about Mrs. Oakshott this and Mrs. Oakshott that, and refuses to talk to the little guy too.
Holmes stops the little fellow as he's walking away from the poultry stand. Holmes says he knows all: he knows that the man is trying to trace a goose that has passed from Mrs. Oakshott to Breckinridge to Windigate (the Alpha innkeeper) to Henry Baker. Phew!
The little guy is delighted by Holmes's knowledge, and together, he, Holmes, and Watson flag down a cab.
The little guy first gives a false name (John Robinson) but then confesses that he's really James Ryder, an employee of the Hotel Cosmopolitan (remember, the guy who fingered John Horner as the thief of the Countess's blue carbuncle?). As they sit in the cab together, he looks nervous.
And he might as well – because once they all arrive at Baker Street, Holmes reveals that he has found the blue carbuncle in the throat of the goose Ryder's looking for.
Ryder confesses that the Countess's maid, Catherine Cusack, told him about the stone.
Holmes then fills in the rest: Ryder knows that Horner had been brought up on charges of theft before, so the cops would naturally be more suspicious of that other guy anyway. Ryder invents something for Horner to do in the Countess's room and then, once Horner leaves, Ryder and Cusack go through her jewels and have Horner arrested for the crime.
Ryder begs Holmes for mercy. He explains everything:
The morning of December 22nd, once Horner is arrested, Ryder runs away from the hotel at once. The thing is, Ryder hasn't planned this thing very well, so now that he has the jewel he doesn't actually know what to do with it.
Ryder goes to his sister's place (remember, Mrs. Oakshott, the original goose seller) where he can lay low for a little while and think of what to do.
Ryder wants to fence the stone (i.e., hand it off to someone who knows what to do with stolen goods so he can get some cash), but he needs to figure out a way to keep the jewel hidden while he brings it to his pal.
Ryder sees his sister's flock of geese out back and has a brilliant idea: he'll stuff the jewel down the throat of one and, since his sister promised him a bird for Christmas, he'll use its body as a kind of jewelry case for transporting the stone.
His sister lets him pick out a bird. He then kills it and brings it to a friend who's done some time and probably knows something about selling stolen stuff.
But once the men cut open the bird's throat – there's nothing there. The fool has mixed up which bird is which!
That's the story Ryder tells Holmes, and then he falls apart crying on the floor, since he's ruined his good name now without ever having seen a penny for his crime.
Holmes is disgusted, and just tells the guy to get out.
Ryder runs off.
Holmes explains his actions to Watson: after all, it's not his job to do what the police can't. Ryder will be so frightened by this brush with the law that he'll never go wrong again. And, anyway, there isn't enough of a case against Horner to send him to jail. So, Holmes concludes, I just want to let this one go – let's eat dinner.