Alfred Hitchcock is discussing the concept of letting the audience ‘play God.’ in the sense of a complete understanding of the stories and characters.
He uses an example of a murder mystery movie to convey his belief of puzzling of the audience not being equivalent to creating suspense within the viewer. He states "One of the characters, a young man, is standing in a shadowy room ... if the audience does not know whether the young man himself is a killer or a hero they will not know whether to cheer or weep. If the audience does know, if they have been told all the secrets that the characters do not know, they'll work like the devil for you because they know what fate is facing the poor actors." He also uses the example of Rope, a movie filmed at Warner Brothers. "[Rope] stars James Stewart with Joan Chandler, our new discovery, in the feminine lead. ... The audience knows everything from the start, the players know nothing. There is not a single detail to puzzle the audience. It certainly is not a whodunit for the simple reason that everyone out front knows who did it. ... The fact that the audience watches actors go blithely through an atmosphere that is loaded with evil makes for real suspense."
Explanation:
Basically, Alfred believes that suspense is created when an audience understands the characters and the scenario rather than pure mystery in the whodunit sense.