The building at the end of Potomac Street, where the Iron Horse Inn stands today, was built in 1799. It was the home of the superintendent of the armory while the armory was being built, and during the first years of gun production in Harpers Ferry. During the Civil War it was used to house both Confederate and Union troops. It was auctioned by the government after the war and came into private hands.
The proprietor of the restaurant had gone home early one evening and had left a son in the kitchen and a daughter in law waiting on tables. They had closed the restaurant and were getting ready to go home when the daughter in law went upstairs to change clothes. Suddenly the door in the room she was in started to shake violently. The shaking was followed by something going down the steps. She said it hit every step. She thought her brother in law had fallen down the steps, but in going to investigate, she found him coming out of the kitchen. He thought she had fallen down the steps. He went into the kitchen to get a meat cleaver, and together they searched the building. They found nothing.
About three weeks later the proprietor was getting ready to go home when again the door at the top of the stairs started shaking violently. As she stood there, something came down the steps directly in front of her, hitting every step. But she saw nothing.
The proprietor started asking questions about town, and finally met up with an older gentleman who said he knew what had happened in the building .
Before the Battle of Gettysburg the Union forces had control of Harpers Ferry, and the Confederates wanted to know how many troops worked in the town. They sent a young confederate spy across the river, dressed in Union blue. It was a daring mission: a spy caught wearing the enemy uniform would be hung on the spot.
One day as the spy was walking down Potomac Street he was challenged. He turned and started walking quickly down the street. They yelled for him to halt again. He panicked and ran toward the building, not knowing it was being used to house Union soldiers. A young Union officer had witnessed the scene from an upstairs window, and when the spy tried to get through the upstairs door to hide, the Union officer opened the door and shot him point blank.
Strange things continue to happen in the building. On nine consecutive Saturdays the chimney of a kerosene lamp has been blown off and thrown across the room. Lamps hurled from the mantle have been caught in midair; and objects inexplicably move during the night. Some are sure it is the Confederate spy caught once again... in an act of a different sort.
(From Ghosts of Harpers Ferry by Stephen D. Brown)