of the work I have been engaged on, I
may as well tell you that confidential reports from Washington have
warned me to be on my guard," said Captain Simms. "It was in reply to
one of these that I sent a code dispatch to-night."

It was half an hour later, and they were all seated in the Captain's
room, having told their story.

"But I should have imagined making up a code was a very simple matter,"
said Billy.

"That is just where you are wrong, my boy," smiled Captain Simms. "A
commercial code, perhaps, can be jumbled together in any sort of
fashion, but a practical naval code is a different matter. Besides
dealing in technicalities it must be absolutely invulnerable to even the
cleverest reader of puzzles. The new code was necessitated by the fact
that secret agents discovered that an expert in the employ of a foreign
power had succeeded in solving a part of our old one. It was only a very
small part, but in case of trouble with that country it might have meant
defeat if the enemy knew even a fragment of the wireless code that was
being flashed through the air."

"Have you nearly completed your work?" asked Jack.

"Almost," was the reply, "but the fact that these men are here rather
complicates matters. At Musky Bay, the name of the little settlement
where I am stopping, they think I am just a city man up for the fishing.
I do not use my right name there. By an inadvertence, I suppose it was
habit, I wrote it on the hotel register to-night. That was a sad
blunder, for it is practically certain that these men will not rest till
they have found out where I am working."

"At any rate I'm mighty glad we followed that Jarrow," said Jack.

"And caught enough of their plans to put you on guard," chimed in Billy.

"Yes, and I am deeply grateful to you boys," was the rejoinder.
"'Forewarned is forearmed.' If Judson and his crowd attempt any foul
tactics they will find me ready for them."

"Judson apparently wishes now that he had not been so anxious to secure
that contract as to promise the naval code as a sort of bonus," said
Jack.

"I don't doubt it," answered Captain Simms. "Now that I recall it, I
heard rumors that Judson, who once had a steel contract with our
government, is not so sound financially as he seems. I judge he would go
to great lengths to assure a large contract that would get him out of
his difficulties."

"I should imagine so," replied Jack. "What was the reason he never did
any more work for