The protagonists are an American millionaire, Theodore Racksole, and his daughter Nella (Helen). While staying at the supremely exclusive Grand Babylon Hotel, Nella asks for a steak and Bass beer for dinner, but the order is refused. To get her what she wants Racksole buys the entire hotel, for  400,000 "and a guinea" (so the previous owner can say that he haggled with the multi-millionaire businessman).
Strange things are happening in the hotel. First, Racksole notices the headwaiter, Jules, winking at his daughter's friend, Reginald Dimmock, while they consume their expensive steak. He dismisses the headwaiter. The next day Miss Spencer, the pretty, efficient hotel clerk who has been employed there for years, disappears. It appears that she just took her things and left, no one knows when or where. And Prince Eugen, a prince regnant of Posen, who was to come to the hotel and meet his youthful uncle Prince Aribert (he and the nephew are of the same age), never turns up. Then the body of Dimmock, who was an equerry to the princes, come ahead to prepare for their visit, is found. He was obviously poisoned. And soon after, Dimmock's body disappears.
The same evening the hotel is having a ball in the Gold Room, hosted by a Mr and Mrs Sampson Levi. There is a special secret window though which one can observe the room and the guests. Racksole looks out of it and sees among the guests the dismissed headwaiter, Jules. Racksole runs out to confront him and throw him out, but can't find him. He comes back to the secret window to find Jules, staring intensely into the ball room. Racksole orders him out of the hotel for the second time.
Prince Aribert, who met Nella in Paris while he was travelling incognito under the name of Count Steenbock, confides the whole story to her. He tells her that Prince Eugen never arrived, and no one knows where he is. He was last seen at Ostend. His Majesty the Emperor sent a telegram to Aribert, requesting the whereabouts of Eugen. Aribert, who does not know whether there might be a secret love affair, or an abduction, is facing a dilemma. At last he decides to go to Berlin and state the facts to the Emperor. Nella promises him help and support in London.
After the departure of Aribert, an old lady signs into the hotel under the name of 'Baroness Zerlinski'. Some chance remarks about hotel rooms convinced Nella, who was substituting for the hotel clerk, that it was, in fact Miss Spencer in disguise. When she finds out that Miss Spencer suddenly checks out and departs for Ostend, Nella too goes to Ostend, leaving a short message for her father as to her whereabouts.
In Ostend, Nella follows Miss Spencer into a house, and tries to find out what's going on, threatening the latter with a revolver. Miss Spencer says that she was under orders of Jules, the headwaiter, whose real name is Tom Jackson and who is, she claims, her husband. She says that Jackson/Jules quarrelled with Dimmock and that he had some "money business" with Prince Eugen. She admits that the Prince was a captive in that same house, and she looked after him. He was abducted to prevent him arriving to London, for it would have "upset the scheme". Then Miss Spencer fakes a faint, and Nella, who comes nearer to see if she can help her, is overpowered. Nella loses consciousness.
Output: What incident causes Racksole to buy the hotel?