How did the old man get to know that James is In problem

The old man had been watching, and he believed the aunts to be evil. He wanted to help James, and thus, he gave him the bag of goodies that would change his life.

"... marvelous things will start happening to you, fabulous, unbelievable things -- and you will never be miserable again in your life. Because you are miserable, aren't you? You needn't tell me! I know all about it! Now, off you go and do exactly as I say. And don't whisper a word of this to those two horrible aunts of yours! Not a word!