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Nancy, Bess and George are spending a week at the Steadman Resort in upstate New York. Strange things have been happening at the normally quiet resort and Nancy offers to investigate. Nancy learns that wild stories are circulating about one of the islands, to which the resort offers canoe trips. It seems that the island is haunted by the ghost of a Victorian financier who once lived there. He was reported to have hung himself on the island. After being stranded on the haunted island and being forced to spend the night in the spooky house.