Caine travelled to Tangier, Morocco, for three weeks In March 1890, researching Muslim and Jewish life. Disregarding the advice of British consular officials Caine explored the Kasbah alone on foot at all hours of the day and night. Returning to Tangier in Spring 1891 to pick up local colour for his next novel The Scapegoat, he suffered an attack of malarial fever. Caine became the house-guest of Ion Perdicaris, who arranged Caine's nursing until he was sufficiently recovered to return to England. In July of the same year The Little Manx Nation was published. It was originally delivered in the form of three lectures on the history of the Isle of Man which were given at the Royal Institution, London on 22 and 29 January and 4 February 1891. The book is dedicated to Manx poet Thomas Edward Brown, who supplied Caine with information on Manx legends and ballads.
The Scapegoat was written at Hawthorns immediately after Caine returned home from Morocco, while he was still impeded by malaria. First serialised in The Illustrated London News between July and October 1891, and then in The Penny Illustrated Paper between October 1891 January 1892. In the story, little Naomi is deaf and dumb and blind. Her mother is dead. She lives with her father, in Israel's house. As Israel changes his ways to become a better person Naomi starts to regain her lost senses. The novel was published in two volumes in September 1891 by William Heinemann, and simultaneously in Europe, America and Canada. Set in Morocco in the last years of the Sultan Abd er-Rahman, it exposed anti-Semitic persecution and was described as a ‘scathing indictment of Moroccan tyranny’. The book was praised by ‘the most intelligent and influential members of the respectable Jewish community in London’. Caine's Connections with the British Jewish community extended back to Caine's youth. Novelist Israel Zangwill, enlisted Caine in the Zionist movement. The Scapegoat brought Caine a considerable correspondence, mainly because of its pro-Jewish stance. At this time Caine and Mary's second son, Derwent was born on 12 September 1891.