Sherlock Holmes (Basil Rathbone) and Doctor Watson (Nigel Bruce) are in Canada attending a talk held by Lord Penrose (Paul Cavanagh) who is outlining his belief in the supernatural. The discussion is interrupted by a telephone call to say that Penrose's wife has been brutally murdered. Penrose hurries back home to the little town of Le Morte Rouge, where an apparition has been spooking the locals and slaughtering sheep - killing the animals in the same way his wife has been killed. Preparing to return to England, Holmes is given a letter written to him by Lady Penrose, asking him to save her life; it's too late for her, but can the great detective prevent more murders?
This entry into the Rathbone-Bruce series was scripted by Edmund L. Hartmann and the director Roy William Neill, and was not based on a Sir Arthur Conan Doyle original (but a Paul Gangelin and Brenda Weisberg one), although it does on first glance look like a retelling of The Hound of the Baskervilles. There is a glowing "monster" prowling the marshes around the small town, and it appears Lord Penrose is the next victim. Yet you'd be wrong, and you begin to suspect Penrose of being the killer, especially as he's so keen to convince Holmes of a supernatural explanation for the mystery.
Is he a red herring? The Scarlet Claw is often referred to as the best of the modern day, i.e. 1940s, Holmes films, and the plotting is pretty complex for such a short movie. The main theme is that Holmes uses his powers of deduction to solve puzzles, rather than relying on the superstition of the townsfolk; he neither believes nor disbelieves anything until he's in full possession of the facts. But even then, this does not prevent the murders continuing, and it's interesting to see Holmes foiled not once, but (tragically) twice in his attempts to track the killer down.
Watson is more of a buffoon than ever this time, letting Holmes fire off a few witty lines at his expense ("Yes, you can stop over at a farmyard and shoot all the chickens you want!"). The always-entertaining Bruce also gets a drunk scene, where he regales the regulars in the local tavern of his theories on crime, and backs up his claims by referencing that famous G.K. Chesterton book, erm, The Invisible Man (!) to illustrate how even Potts the postman (Gerald Hamer) could be a suspect. The unfortunate Watson is pushed into a bog by the killer, too.
Like The Hound of the Baskervilles, this is a deft mixture of atmospheric horror and thriller, stirring up many good suspense sequences. The scene where Holmes realises that a possible victim, the Judge (Miles Mander), is in mortal danger is particularly effective, with the detective outsmarted by the master of disguise who is behind the crimes. As is the scene where he tracks down the "paranoiac" to his secret lair, only to be trapped by him - luckily clumsy Watson saves the day, but not before interrupting the killer before he says the name of his next victim. It's all consistently good stuff, and it's not hard to see why it is one of the favourites of the Rathbone and Bruce adventures. And Canadians will enjoy the speech at the end.