In San Francisco at Crown Point, the fishermen sit on the docks while the store owners put out signs saying that they can no longer issue credit. Jim arrives and goes to the Mermaid Tavern. As Jim orders a drink, a bearded fanatic comes up to him and speaks of the coming of Leviathan. The bartender tells the man, Daniel, to get out, but Jim tips the man first. Artie comes in, disguised as a crippled Portuguese fisherman, and sits down next to Jim. He explains that Daniel is a seagoing evangelist and the Portuguese fisherman have been banned from going out by the naval authorities. The agents are there to meet an old friend, Lt. Dave Bartlett, who says that he discovered something that he couldn’t even reveal to Admiral Hammond.
Bartlett comes into the bar and thanks them for coming. He apologies for the secrecy but explains that he doesn’t know whom to trust. Bartlett starts to explain but stops when several men come in. He tells the agents that they’ve been following him for days and tells them to meet him behind the bar in five minutes. Jim walks out with him and the newcomers go back with them. While Artie watches them, he hears the sound of machinery from the wall. He then smiles as Jim knocks the men back and lends a hand, knocking out the last one. The agents run out the back and are shocked to see a giant tentacle pull a crate into the water and submerge. They find Bartlett’s crushed body on the nearby dock along with an empty folder.
The next day, Jim and Artie meet with Hammond’s aide, Commander Beech. Beech dismisses Bartlett as an undisciplined idiot and objected to him going outside of channels. Hammond comes in and asks why Bartlett sent for them, and the agents admit their friend was killed before they could find out. The admiral tells them that he believes a legendary kraken killed Bartlett after being forced to the surface. Three fishermen have been killed in the last week, their boats smashed apart. Hammond has ordered an oceanographic commission to come up with a way to kill the creature. They’re interrupted when Hammond’s wife Dolores comes in. She reminds Beech that he offered to take him riding and he then reminds Hammond about his staff meeting. She invites the agents to stay for lunch but they decline.
As the agents start to leave, the fisherman’s spokesman, Jose Aguila, barges into Hammond’s office. He asks Hammond to lift the ban, pointing out that it’s been a month and they are starving. Aguila refuses to accept his decision, saying that he will fish no matter what he has to. Once he leaves, Hammond tells his aide to arrest Aguila for his own safety and then leaves for his staff meeting. As the agents leave, Jim goes to talk to Aguila while Artie searches Bartlett’s quarters.
While Artie breaks into Bartlett’s room, Jim goes to the docks and goes to a bar to find Aguila. When he asks the bartender, the man feigns ignorance but Aguila comes in and Jim orders him a drink. Aguila warns him that the fishermen are angry with the government, just as six sailors come in. The fisherman assumes that they’re government men, but Jim points out that they’re wearing outdated Civil War sailor uniforms. Aguila pulls the overhead netting down and the two men take on the six thugs. After disposing of them, Jim says that the Navy are after Aguila and the two men leave via the window.
As Artie uses a lamp to search Bartlett’s quarters, he hears a rattling inside the base and finds a key inside marked “Neptune 7.” The agent realizes Bartlett hid it figuring someone would come after it, just as three thugs come in. They tell Artie to hand over the key and he feigns tossing it on the floor. It’s actually a smoke grenade and Artie calmly walks out while they choke.
Aguila thanks Jim for the fight and prepares to go fishing, but Jim tries to stop him. Daniel wanders by, speaking again about the Leviathan, and recognizes Jim from earlier. Jim gives him some more money and asks when Leviathan will arrive. Daniel says that it will be there soon and rise to kill the sinners. Aguila slips away and rows out into the bay, and Jim jumps aboard so they can continue talking.
Artie goes to the Neptune Building and confirms that the key opens the door. He finds an advanced diving helmet.
Aguila rows out and tells Jim it’s time to fish. Something rises out of the deep, rocking the boat, and massive tentacles grab the boat. The two men try to drive it off but Jim is knocked overboard and the creature pulls Aguila underwater. Jim grabs a machete just as the kraken grabs him as well and manages to cut himself free. He grabs the side of the boat, still holding a piece of severed tentacle.
The agents meet at the Wanderer
and Artie shows Jim Bartlett’s self-contained deep-water diving rig. Jim shows Artie the tentacle and they confirm it’s made of rubber with a hollow core. They take it to the admiral to see his reaction and explain that it works on a hydraulic system. Beech points out that they only have the agents’ word of where they got the fake tentacle, but Hammond orders him out. The agents figure there is some reason for the elaborate charade other than killing fisherman, and Hammond shows them a wire confirming that Admiral Farragut will be arriving in San Francisco the next day to conduct an inspection. Farragut will be arriving aboard the Missouri
, their newest ironclad. Hammond sends a signal to Farragut suggesting he avoid Crown Point and tells his aide, Lt. Barclay, to deliver it personally.
Dolores comes in with some port and invites Jim to accompany her to see their prize daisies. Once they’re alone, Dolores tells Jim that she’s had a feeling of impending doom, one that her husband shares.
Inside, Hammond tells Artie that he’s realized he wants to show him something that he believes relevant to the mystery. Before he can say more, the bottle of port starts smoking. Artie lunges forward and yells a warning... just as the bomb blows up. Jim runs in and finds Artie and a dead Hammond. As Beech brings in his men to put out the fire, Artie tells Jim what Hammond said and notices that an aquarium stand was jarred loose in the blast. They pull it from the wall and find a hidden compartment. Inside is a model of an underwater fortress.
Back at the train, Artie is examining the model when Jim returns from the hospital. Dolores is under sedation and won’t come out of it for a couple of hours. Artie shows his partner the model and they conclude that there is a conduit leading down from a fixed shore installation. Remembering the noise at the saloon, Artie figures that it was the compressor necessary to maintain the air pressure in the fortress. He’s going to go back to the saloon while Jim searches for the submarine airlock and enters the fortress from below. When Artie points out that it’s a hundred feet below the surface, Jim figures that given the scale of the conduit, it must be positioned on the spot where Aguila was killed. He will go down using Bartlett’s experimental diving gear.
Artie and Jim row out to the spot and Artie tells his partner that he’ll meet him in the fortress. Jim dives down, avoiding sharks, while Artie rows back to the dock. With his oxygen running out, Jim finds the submarine airlock and gets inside just in time. He finds Beech seated at a desk in a laboratory, but discovers that the officer is dead. Dolores and several thugs comes in, explaining that he was loyal to Hammond. She explains that her husband was brilliant but unambitious, and Jim figures that she has plenty. When Jim wonders why it was necessary to kill Hammond, Daniel steps out, clean-shaven and wearing a military uniform. He explains that they not only stole Hammond’s sketches for an underwater fortress, but for a missile as well. Daniel shows Jim Hammond’s self-propelled missile with a magnet to guide it to its target: an ironclad. They plan to sell the fortress and the missile and promised to provide a suitable demonstration. Daniel intercepted the telegram warning Farragut off and has his men tie Jim up.
Artie goes back to the Mermaid Tavern, posing as a Swedish mechanic. He tells the bartender that he’s there to work on the compressor. When the man feigns ignorance, Artie insists that he’s there to make repairs and the bartender leads him to a private door. As he follows the noise, the real mechanic comes out and Artie knocks him out with a gas-filled balloon and prepares a new disguise.
Dolores is admiring their hydraulic kraken and notes to Jim that he damaged it during the fight. Jim realizes that they used it to frighten away the fishermen so that they could build the fortress with no one the wiser. Daniel returns and tells Dolores that it’s time, and they watch via a periscope as the Missouri
arrives in the bay. The technicians arm the missile and prepare to launch, while Artie comes in disguised as the mechanic. realizing that Jim is tied to a pipe, Artie hooks one end of a chain to Jim’s pipe and the other to a nearby compressor wheel. Jim’s pipe is pulled free and the compressor is jammed. The thugs knock Artie away, stunning him, and try to put out the resulting fire. Jim runs to the launch panel but is too late to stop the launch. The missile homes in on the ironclad while Dolores slips out. As the thugs run after Jim, he swings down to the main door. The agents lock it and Artie goes after Dolores while Jim swims after the missile.
Jim catches up to the slow-moving missile and reverses the setting. It sinks below the water, heading for the fortress, and Jim swims clear just in time as a massive explosion destroys Daniel and his men.
Later, the agents are traveling in the Wanderer
and Artie is calculating the pressures on the fortress using Hammond’s plans. He notices Jim reading a book he doesn’t recognize and asks what it is. Jim explains that a friend, playboy Irving Moore, sent his little black book of former dates because he was getting married. Artie asks to see it and Jim refuses, and his partner offers him any book he had in trade. When Jim refuses, Artie jokingly threatens him until Jim turns it over.
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