In 1890 London, while Scotland Yard is trying to apprehend "The Terror," a criminal who has been murdering policemen, jewel thief Nicholas Revel discusses his next job with cohorts MacStreet, an insurance appraiser, and cabbie Ernie Perker. The plan calls for Nicky to steal the Calgary Emerald, which is insured by Mac's company, then Ernie will come forward a few days later, saying that he found it in his cab, and the three will split a £5,000 reward. Although Mac and Ernie think Nicky's plan to steal the emerald at an engagement party being given by Scotland Yard chief Sir Herbert Frensham for his daughter Jane is too risky, Nicky convinces them that it is foolproof. On the night of the party, Nicky easily steals the necklace, then, after removing the stone, throws the setting out the window. Unknown to Nicky, a constable patrolling the grounds has just become The Terror's latest victim. When Nicky jumps from the window, he discovers the body, but quickly runs away, not seeing the necklace. The police find the necklace next to the body, and Inspector Connor announces that whoever stole the emerald is also The Terror. Reading the newspaper account, Nicky is only mildly concerned and reassures the nervous Mac and Ernie that they will go through with the insurance plan as soon as Scotland Yard catches The Terror. Some time later, Jane's fiancé, Sir Christopher Lenhurst, is being given a party by members of his regiment. During the drunken revelry, they wager Chris that he cannot steal a policeman's helmet, and Chris accepts the challenge. He finds a helmet on the street and takes it back to the party, not knowing that it fell off the head of another murdered policeman. The next day, Connor is showing Sir Herbert an embroidered "L" on an expensive linen handkerchief found at the murder scene when Jane comes into his office and innocently mentions that she bought it for Chris. When Nicky reads that Chris has been arrested as The Terror, he knows that it is impossible as Chris had been out of the country when two of the crimes took place. He decides to help by appearing at the arraignment and testifies that he was riding in a taxicab when he saw Chris pick up the constable's helmet. His story is corroborated by Ernie, who also comes forward, saying that he was the cab driver. Although Connor is suspicious, Chris is cleared of murder and sentenced to a day in jail for stealing the helmet. When Jane thanks Nicky, he asks her to lunch, where he reveals his plan for capturing The Terror. He proposes that the newspapers report another attack but say that the victim survived and can identify the killer. Jane likes the plan and invites Nicky to dinner to explain it to her father. Sir Herbert also finds merit in it, but Connor dismisses it as too complicated. Because Jane likes Nicky, she offers to help him develop other plans by giving him inside information from Scotland Yard. For the next two weeks, while Chris is confined to quarters, Nicky and Jane see each other every day. Meanwhile, Connor has Nicky investigated, certain that he is both the jewel thief and The Terror. At the end of Chris's confinement, he is jealous when he finds Nicky having dinner with Jane, and relieved when their evening is cut short. Ernie waylays Nicky before he arrives at his flat and tells him that Connor has been inside for some time. Connor reaches the building lobby before Nicky, and a constable tells him that another murder has just taken place between Sir Herbert's house and Nicky's building. Connor then goes back to Nicky's flat and asks him to accompany him for a talk. As Nicky exits the cab they take to Scotland Yard, he gives Ernie a tip, wrapping the paper note around the emerald, which Nicky sneaked out of his flat. During their talk, Connor tells Nicky that The Terror sends postcards to the police before each murder, all postmarked at either 1:00 or 3:00. The next day, while Nicky is waiting for lunch with Jane, Mac shows up, nervously telling Nicky that he now has the emerald but wants to get rid of it. Jane and her father soon join them for lunch and Mac slips the emerald to Nicky. At Scotland Yard, Connor's investigation comes up with information that Mac, though seemingly honest, has been living beyond his means. Later, Jane goes to Nicky's flat and tells him that Connor has been questioning the emerald's insurance appraiser and the case will soon be broken. Nicky is about to tell her the truth about himself, when Chris knocks on the door. He thinks that he has been summoned by Nicky, but actually Connor had lured him to the flat with a phony note. Nicky hides Jane in another room and tells Chris that he has been spending a lot of time with her, then lies that he is not in love and plans not to see her again. After Chris leaves, Jane soon follows, certain that her feelings for Nicky have not been reciprocated. A few minutes later, Ernie arrives, warning Nicky that they must turn themselves in immediately so that they will be in custody when The Terror, who has just sent another postcard, commits another murder that night. Nicky still hopes The Terror will be caught, but to prove how impossible that is, Ernie marks a map, indicating the murder sites spread throughout London. When Nicky looks at the map, he realizes that the marks form most of the letter T and deduces the location of that night's murder. He asks Ernie to obtain a constable's uniform for him, then eludes the police who are watching his flat and goes to the murder site. He tells the patrolling constable that he is the officer's replacement, then takes over the beat. Soon The Terror lunges a sword at Nicky, but misses, after which Nicky chases him into a warehouse. The two scuffle over Nicky's gun, then The Terror falls from the warehouse elevator. A few minutes later, Connor arrives with several policemen, who had been summoned by the suspicious constable Nicky replaced. Before he dies, The Terror, who is recognized by Connor, reveals that he had planned to kill thirteen policemen, one for each year he had been imprisoned. Soon reporters arrive and hail Nicky as a hero. The emerald is found in The Terror's pocket and Connor says that he was sure that the robbery and the murders were connected. Later that night, Nicky is packed to leave his flat when Connor arrives to tell him that Mac has finally confessed everything. As they drive off in a cab, Connor assures Nicky that the courts will not be too hard on him, considering that he caught The Terror.
