In the collection I have, the Children of the Night follows closely behind Dig Me No Grave. As far as I'm concerned it's one of the best stories in the book, and I believe it's a great deal more effective in scaring our generation than it was in scaring Howard's.
The Gutenberg Project has the full text of this story online, it's about 14 pages long if you want to take a few minutes so you can follow my thoughts. I must caution you, though, this is a horror story, and a good one. So it will make you uncomfortable. Also, a stronger than the standard 30s racism applies, consider this your trigger warning. And yes, I will give you thoughts on it below.
There are spoilers after the space, of course.
Let's start with the small stuff first, we have a bunch of white men discussing race and ancient cults. They're having are argument over the shapes of people's heads. This leads into discussing the gobs and gobs of books on the wall, which leads into discussing ancient cults and the sleepytime mutterings of someone else's roommate who-may-have-not-been-completely-white-not-that-there's-anything-wrong-with-that.
Ladies and Gentlemen, we have Nerds.
There are three pairs of characters at the start, and the first pair--Taverel and Clements--are effectively ciphers. They're there to argue points that didn't fit the four more substantial characters.
The dialogue tells us a lot about the second pair. We learn that if Conrad had been a teenager in the 90s he would be buying clothes at Hot Topic and trying to replicate Glen Danzig's library in his bedroom. But he's a grown man in the 1930s, so instead he's gathered a group of nerds to awe with his collection of really weird, potentially dangerous forbidden tomes and ancient artifacts. This really doesn't contradict my impression of him from Dig Me No Grave. It only serves to reinforce that he has more curiosity than sense.
We learn that Professor Kirowan is a professor, and a skeptic, and he gets pretty irritable if you try to tell him you know more about the shape of people's heads than he does. He is still casually racist towards Asian people. He does, however, admit to not knowing all the answers. He won't allow that YOU know them instead, but he does allow that he's not omniscient. This doesn't actually contradict DMNG either, especially as Kirowan was more forcefully skeptical in that story when he was creeped out. Judging by that impression, he believed Conrad's hypothesis but a) didn't want to let anyone think he'd believe such a thing, b) didn't want the others believing such a thing, or c) was trying to convince himself he didn't believe such a thing. Really, the only new information about Kirowan is that the snapping and shouting at Conrad in the last story wasn't necessarily because he was scared, but because he's irritable.
The last pair gets fleshed out in the narration, directly and indirectly. Through narrator John O'Donnel we learn that Ketrick is a mild-mannered introvert who comes off as a cold fish but may or may not secretly have a sensitive nature. He isn't sure about Ketrick's nature, as he's concentrated so much on tracing Ketrick's Welsh bloodline because the man just doesn't look white enough to him. It's bothered O'Donnel enough that he's actually discussed it with a Professor at the university, and concluded that there must be some Asian somewhere in the blood. Yes, benefit of the doubt suggests that this could have come up in a class discussion involving both Ketrick and O'Donnel and genetics, but I can't shake the image of O'Donnel crouching and running around campus, whispering in the ears of blond-haired and blue-eyed faculty "He just doesn't look Welsh. Something's off about the eyes." Why can't I shake that image? Because three paragraphs about Ketrick's pedigree suggests the narrator might be just a tad preoccupied with it.
Of course, this being John fucking Conrad's house the conversation has to lead to some sort of trouble and it comes from a little flint hammer that is carelessly passed to the one guy who doesn't look completely white. And here's where the 30s horror story pattern breaks. From even what O'Donnel can see, the hammer itself twists in of Ketrick's hand and forces him to knock O'Donnel on the head. Ketrick doesn't suddenly turn murderous on holding it. He doesn't reveal himself to be a big bad villain out to kill O'Donnel all along. He innocently swings the thing and finds his arm wrenched in the wrong direction.
The story's even open for the interpretation that O'Donnel's past-life flashback may have been brought on by the combination of him and the hammer, not Ketrick and the hammer.
Either way, O'Donnel wakes not as a nerd in her nerd friend's study, but as a badass warrior from a race of badass warriors. But as Aryara he's allowed his five friends to be slaughtered by the "Children of the Night" who have creepy yellow eyes and look like little trolls. As readers we're treated to a few pages of violence, bloodlust, angst, tribalism and barbaric vengeance before O'Donnel returns to his five living friends in the present day.
And what could be more natural--after returning from a past-life in which you allowed your five closest friends to die-- than to immediately try to kill one of your five closest friends in the present time?
I suspect that may be one of the things about this story that drive home the insanity of the protagonist. In Howard's horror stories there is a lot of shuffling back and forth between lives, and a lot of people-who-aren't-white-enough-for-the-narrator being bad guys, and a lot of actions that thinking person would consider signs of insanity. There's narrative justification for those actions usually. Usually Howard does make the guy-who's-not-white the bad guy. The past life shifts in other stories have obvious parallels (see People of the Dark, where three people who have met in a past life meet again and get to redo a disastrous encounter in a modern setting). Howard's narrators are usually reliable and their impressions are backed up by the actions of the other characters.
John O'Donnel's impressions are not backed up here. Ketrick performs no actions that justify the narrator's suspicion. The one point that WOULD justify the suspicion, the swinging of the hammer, is blamed on the hammer and not Ketrick. The parallel of the scenes even falls short of O'Donnel's impression, because the past-life friends were all killed by an outside attack--it wasn't four of them betrayed by the fifth who happened to be bad. All five were victims.
When O'Donnel comes out of his fugue, he reads Ketrick's regret as insincere based on his eyes. Ketrick's eyes are the trait that makes O'Donnel suspicious, and we have nothing besides them to suggest that he's insincere, and we have everything about O'Donnel's past life experience to suggest he wouldn't be rational when dealing with Ketrick.
It's obvious the man is an innocent, and O'Donnel is irrational.
I can't say for sure that Howard didn't mean for his protagonist to be heroic, and maybe I just get the imrpession because I'm commuting from Lovecraft-land where unreliable and insane narrators are the norm but O'Donnel strikes me as the bad guy in the piece. If Howard had intended for him to be heroic, he fucked up. And this writer specializes in making characters I would not like in real life seem pretty heroic, so I'm not inclined to think he fucked this up. I can only conclude we're supposed to see O'Donnel as having gone completely bugfuck insane and the racism in the narrative was there on purpose to back this up.
In that vein, I can't imagine Howard had anywhere close to an idea how terrifying reading an insane, unreliable narrator rant about the regality of the Aryan race would be to future generations. Not in 1931. This story must have more effect now than it did back then.
But the scariest element in this story isn't the Naziesque rantings. It's how easy the break was. Here O'Donnel may have been a bit preoccupied with his one particular friend, but otherwise he was just at the normal level of clueless racism for his generation. Then he gets hit with the hammer and has a very strong hallucination/past-life memory (depending I suppose on whether you ask Conrad or Kirowan exactly what happened to him) and suddenly he's plotting the death of a completely innocent person because that guy doesn't look like he's from a pure Saxon bloodline. Suddenly a seemingly harmless casual prejudice that could have been nursed without adversely affecting the rest of the world turns into a violent psychosis.
Think of the last time you thought something along the lines of "I can't change his mind but he'd never do anything to actually hurt someone" and then just try to tell me this story is not fucking horrifying.