At length the yacht is raised, and Perry moves on to his next job: searching for treasure in the sunken ocean liner "Katawa" off of Reed's Point. They enlist the aid of eager photographer and inventor Earl Chipsley and his remarkable underwater X-ray motion picture camera. But the second mate of the "Katawa", Clark Hornblow, institutionalized after having gone mad at the time of the wreck, insists the riches are elsewhere, having been stolen by other officers using a lifeboat. What's more, Kuntz and his henchmen will stop at nothing to claim the gold and diamonds for themselves. The Hardys are beset by dangers above and below the surface of the sea as they attempt to secure the "Katawa"'s fantastic treasure.