Plot:

1930

The story involves Nancy Drew helping her friend Emily Crandall find out who stole her heirloom jewels. Emily's aunt and guardian, Hazel Willoughby, unwisely removes them from a safe deposit box and carries them with her while lunching at Lilac Inn, only to have her handbag stolen while the diners are distracted.

In the meantime, Nancy must hire a temporary maid in the absence of Mrs. Gruen, her housekeeper. Nancy uncovers the thief, Mary Mason, one of the applicants for the position of a maid. She then tracks Mary Mason to a gang, which includes Mary's brother, Bud. Nancy is bound and gagged and left aboard the gang's sinking cabin cruiser to die, but is rescued by the river patrol.

In the end, Nancy captures the jewel thief, exonerates the guardian, and returns her orphaned friend's fortune to her.

1961

The story still revolves around Emily Willoughby's (name changed from Crandell) jewels, only this time, Nancy and her friend Helen travel to the historic inn and resort owned by Emily and her fiancé, Dick, which will serve as their livelihood after marriage. Lilac Inn, in full bloom, is being "haunted" by a mysterious glowing woman in a flowing gown with brunette hair. Waitresses leave the restaurant business based upon their fear.

Nancy is called home to investigate a break-in of her own bedroom, and discovers by surprise someone is wearing some of her own distinctive clothing and charging luxury items on her account at local department stores. Nancy returns to the inn only to see Emily's diamonds stolen during a melodramatic blackout during her 21st birthday dinner.

In the meantime, a strange shark appears in the Muskoka River and Nancy uses newly acquired scuba skills to investigate with Dick's friend John, who is on leave from the military. The girls' guest cottage gets set on fire by a time bomb, but luckily, Nancy and Helen weren't in the cottage at that time. Nancy sneaks back to the inn after a day's absence and dresses in a composite of the apparition, aided by mini electric torches in her dress sleeves, and is shocked to come face to face with a ghost, this time wearing Nancy's titian blond hair and make-up style just like Nancy.

Further investigation leads Nancy to believe Gay Moreau, an actress sent to prison by her father for forgery and larceny, may be involved in the case. Nancy is caught spying on Gay, disguised as a waitress at the Inn, and other criminal gang members, all involved in espionage. She is gagged and bound hand and foot aboard the ship. Finally, her gag is removed as Gay talks to her, and Nancy realizes her Father exposed Gay's Father for crimes. The crooks have a miniature submarine, and use it to escape, leaving Nancy bound aboard a sinking cabin cruiser. However, she screams for help and is rescued in time. Gay, dressed as Nancy, is exposed, and Nancy finds out John has been investigating the stolen electronics parts; Gay couldn't resist the chance to steal diamonds and tried to discredit Nancy by running up her charge accounts on luxury items. Nancy receives presidential honors for breaking the cold war spy investigation.

Artwork

The book was printed with a navy jacket and four glossy illustrations, all by artist Russell H. Tandy. In 1950, the cover art was updated with work by artist Bill Gillies. The text was completely rewritten by series owner Harriet Stratemeyer Adams in 1961. The cover art was changed again to reflect the new story, this time by artist Rudy Nappi, and internal plain paper illustrations were added. Only the first two printings of this volume were available in a dust jacket. The book's text and artwork remained the same when the publisher switched to picture-cover illustrated binding editions in 1962.

R.H. Tandy illustrated Nancy spying on the criminals in the original cover art, along with a frontispiece and three internal illustrations showing various elements of the story. He updated the frontispiece in 1943. In 1950, the dust jacket art was changed to show an updated version of Nancy with the crooks behind her. This art was not retained for the story revision in 1961, as the scene is eliminated by a completely different story. Rudy Nappi illustrates a ghostly picture of two girls illuminated by glowing lights in the cuff of their long-sleeved gowns. The 1961 cover art appears to feature both Nancy, facing, and a mysterious dark-haired girl. In actuality, Nancy has her back to the reader, and is the dark-haired girl in the foreground; the other girl is actually Nancy's impostor.