Vallin's character Jack is marrying Betty and planning to honeymoon in their newly-purchased home in the "soup herbs" (a Brooklynese malapropism meaning "suburbs"). Unfortunately for the happy couple, the house purchased is next door to a huge and apparently haunted house in which strange activities, screams and comings and goings have been observed. The cause of all this hoodoo is the fact that Nazi spies have taken up residence in the "haunted" house led by bossman Emil (Bela Lugosi). A henchman offers Jack double the money he paid for it to buy back the house next door (in order to avoid any possible snooping undermining the Nazi cell) and Jack reluctantly accepts. Add into the mix Jack's dopey brother Glimpy (Huntz Hall) and his friends the "East Side Kids" including the English-language mangling Mugs (Leo Gorcey) and standout comic presence Scruno (former "Little Rascal" Sammy Morrison) and what we have is a rather above-average "old dark house mystery comedy" from Monogram.
While the honeymoon couple are away, the East Side Kids decide to head on over to the new house and check things out. Naturally, as happens in these movies, the boys mistake the spooky old mansion as the house bought by Jack. Inside they discover the place dust-covered and dilapidated and the boys can't understand why Jack would buy THIS spider-trap instead of the homier house next door. Being delinquents, they decide a nice thing to do would be to go next to to the smaller house (which still has the "for sale" sign out front declaring it to be fully furnished) and steal all the furniture for the honeymooners. They traipse all the furniture from the couple's ACTUAL house over to the spooky "haunted" house -- all the while Lugosi and his Nazi henchmen observe from behind the cut-out eyes of paintings and inside secret passages. This provides one of the films best comic scenes as Scruno is dusting the living room, Lugosi decides to stand behind a framed hole in the wall and pretend to be a painting. The copious dust thrown about by Scruno naturally causes Lugosi to sneeze; it is in this scene that Lugosi startlingly manages to get his "Oh Shit!"-sounding sneeze past the sleeping censors! While Scruno is alternately confused and scared by the painting switching from Lugosi and back, Glimpy is also having painting troubles -- a portrait of Napoleon alternately takes off his coat, puts it back on and then appears in long underwear. Hey, who said Nazis didn't have a sense of humour?!? The boys also discover a printing press for Nazi propaganda; this printing press makes several trips back and forth between houses. Again thinking the haunted house belongs to Jack, the East Side Kids carry the printing press over to the smaller house so Jack won't get into trouble. Naturally, the honeymoon couple returns to find the police at their REAL house ready to cart Jack away for espionage.
Naturally, GHOSTS ON THE LOOSE isn't supposed to be believeable or realistic. It's simply what it is: a light mystery comedy with appropriate World War II patriotism. As such, it actually plays quite well and holds the interest throughout; never becoming tedious during it's brief hour running time. Leo Gorcey, Huntz Hall and Sammy Morrison are all genuinely funny during the film while the rest of the East Side Kids are merely there for the ride. One gem of a line occurs when Gorcey and Hall are trying to convince the local police to show up for the wedding -- in order to bring some "class". Gorcey lies to the police chief and tells him that he heard a mob from a neighboring town is rumoured to be showing up during the wedding so the police should be there to ensure order. When the police chief asks what mob, Gorcey says he isn't sure. Huntz Hall chimes in with "I think it's the Katzman mob". Sam Katzman, of course, is the prolific poverty row producer who just happens to be co-producing this very film! Gorcey's Brooklynese malapropisms actually don't grate on the nerves while Huntz Hall and Sammy Morrison make a surprisingly light and funny physical comedy team. At one point in the film, both Hall and Morrison together literally run up a wall; resulting in Hall sitting crossed-legged on top of a wall-mounted moose's antlers! Ava Gardner looks stunning as always and does her damnedest to make herself memorable in an underwritten part. The great Lugosi, of course, looks to be having the time of his life; but he also is given surprisingly little to do. There is also a small appearance by character actress Minerva Urecal (THE CORPSE VANISHES and MURDER BY INVITATION) as Nazi Emil's sinister housekeeper. Director William Beaudine (who helmed everything from Charlie Chan movies to VOODOO MAN to the Mantan Moreland "all-black cast" film LUCKY GHOST) keeps things chugging along nicely. And no . . . there are absolutely no ghosts -- loose or tied up -- in the entire film. All in all, GHOSTS ON THE LOOSE is a much better way to spend your time than sitting through KUNG FU PANDA!