The day after the battle with the spiders Bilbo and the dwarves tried for the last time to find a way out before they died of hunger and thirst. They got up and walked on. Suddenly they saw Wood-elves with their bows and spears. They told the dwarves to stop. There was no thought of a fight. So they simply stopped and sat down and waited — all except Bilbo, who put on his ring and disappeared.

The elves bound the dwarves in a long line. Bilbo was walking silently behind them. Suddenly the torches stopped, and they began to cross the bridge. The bridge led across the river to the king’s doors. In a great hall with pillars sat the king on a wooden chair. On his head was a crown of berries and red leaves, for it was autumn again. In the spring he wore a crown of woodland flowers. In his hand he held a staff of oak.

The prisoners were brought before him; he told his men to unbind them. «They need no ropes in here,» said he. «There is no escape from my magic doors for those who are once brought inside.»

The king asked the dwarves about their doings, and where they were going to, and where they were coming from; but he didn’t get more news out of them than out of Thorin. They were angry and did not even pretend to be polite.

«What have we done, king?» said Balin, who was the eldest now. «Is it a crime to be lost in the forest, to be hungry and thirsty, to be trapped by spiders?»

The king answered: «It is a crime to wander in my kingdom without leave. Do you forget that you were in my kingdom, using the road that my people made? Did you not pursue and trouble my people in the forest? Now I have a right to know why you came here, and so tell me now, or I will keep you all in prison!» Then he ordered to put the dwarves in separate cells and to give them food and drink. But he did not tell them that Thorin was also his prisoner. Bilbo found that out.

Poor Mr Baggins lived in that place all alone; he didn’t take off his ring. Bilbo walked around the king’s palace to know it better.

Eventually he managed to find out where each dwarf was kept. He found all their twelve cells in different parts of the palace. One day he heard the talk of the guards and learned that there was another dwarf in prison too, in a deep dark place. He guessed at once, of course, that that was Thorin. At last after many difficulties he managed to find the place, and to talk with the chief of the dwarves. Thorin felt miserable, and was even beginning to think of telling the king all about his treasure and his quest, when he heard Bilbo’s little voice at his keyhole. He could hardly believe his ears. Soon he had a long talk with the hobbit on the other side.

So Bilbo took secretly Thorin’s message to each of the other dwarves, telling them that Thorin, their chief, was also in prison, and he told them not to open their secret. The other dwarves quite agreed when they got the message. They didn’t want to share the treasure, and they all trusted Bilbo.

Bilbo sat and thought and thought, but no bright idea came.

One day Bilbo discovered a very interesting thing: the great gates were not the only entrance to the caves. A stream flowed under part of the lowest regions of the palace, and joined the Forest River. There was a water-gate at the place where underground water came out of the mountain. There the rocky roof came down close to the surface of the stream, and from it a grating could be dropped right to the bed of the river to prevent anyone coming in or out that way. But the grating was often open, because a lot of traffic went out and in by the water-gate. There was a dark tunnel leading deep into the heart of the hill; but at one point the roof had an opening which was covered with great oaken trapdoors. These opened up into the king’s cellars. There stood many barrels. The Wood-elves, and especially their king, liked wine very much. The wine and other goods were brought from far away, from the vineyards of Men in distant lands.

Bilbo discovered the trapdoors and their use, and learned how the wine and other goods came from the Long Lake. There was a town of Men there built on bridges. From Lake-town the barrels were brought up the Forest River. Often the barrels were tied together; sometimes they were loaded onto flat boats.

When the barrels were empty the elves dropped them through the trapdoors, opened the water-gate, and the barrels floated out on the stream, until they were carried by the current to the eastern edge of Mirkwood. There they were collected and tied together and floated back to Lake-town, which stood close to the point where the Forest River flowed into the Long Lake.

For some time Bilbo sat and thought about this water-gate. He wanted to use it for the escape of his friends, and at last he had a plan.

One evening two guards took meal to the prisoners and then decided to taste the new wine that had just come in. Bilbo followed the two elves, until they entered a small cellar and sat down at a table. Soon they began to drink and laugh merrily.