In "The Yellow House Mystery" by Gertrude Chandler Warner, Mr. Alden expresses his belief that the initials "S. M." refer to Sam McGregor. This suggests that he has a clear idea about the identity of the person connected to the mystery. His insight reflects his thoughtful approach to solving puzzles and understanding the context of the situation they are in.
The story revolves around a group of children who explore the eerie yellow house and work together to uncover the secrets it holds. Mr. Alden's deduction about Sam McGregor illustrates the camaraderie and teamwork among the characters as they navigate their adventurous journey in unraveling the enigma of the house.