Alice Belin Flagg was the young sister of a wealthy rice planter who owned "The Hermitage". Alice was sent to school in Charleston, where at the New Year's Saint Cecelia Ball, her beau presented her with an engagement ring. Her brother did not approve of the fiancee because he did not belong to the wealthy planter class, and Alice was not allowed to wear the ring on her finger when she was at the Hermitage, Instead, she wore it on a ribbon around her neck, hidden in the collar of her blouse.

One morning Alice awoke with a high fever. During her illness her brother discovered the ring and cast it into the inlet creek near the Hermitage. Alice died crying for the ring. Her brother dressed her in a white ball gown, and she was buried in a temporary grave near the Hermitage. Her body was later moved to the cemetery at All Saints Church near Pawleys Island, where it now rests under a simple marble slab bearing only the name "Alice". It is said that her spirit can be evoked by walking around the grave backward 13 times. several people who have tried this ritual also testify that they felt a "tug" at their own ring.

The legend of Pawleys Island's "Gray Man" dates back to the 1820's, when a wealthy planter, on his way to propose marriage, was thrown from his horse into quicksand and killed. Two days later, his love was walking on the beach and saw a gray figure. As she drew closer she recognized him as her lover, but he disappeared when she reached him.

That night she suffered a nightmare in which she was caught in a storm at sea. The next day she and her family left Pawleys Island for the mainland, just in time to escape a deadly hurricane.

The Gray Man was spotted again toward the end of the century, and immediately after he was seen, the famous Storm of 1893 struck Magnolia Beach just north of Pawleys.

The ghost's appearance came to be associated with impending hurricanes. Those who heeded his warning found that they and their property were spared. The Gray Man was also sighted before Hurricane Hugo in 1989, and was the subject of an episode of the television program "Unsolved Mysteries".