The narrator now provides information about Smaug's actions while the dwarves and Bilbo have been in the Mountain. When the people of Esgaroth see a golden light flowing from the Mountain, some at first believe that the ancient prophecies about the return of the King Under the Mountain have been fulfilled. A man named Bard, however, knows that the dragon has come, and calls the town to arms. As Smaug attacks the town, destroying much of it in flame, Bard leads archers in a return attack. Despair settles over some of the town's fleeing residents-including the Master, who gets into a boat seeking to save himself-but, when things are looking bleakest, the thrush whom Bilbo saw earlier tells Bard (who can understand the thrush's language) about the vulnerable hole in Smaug's underbelly. Bard shoots an arrow directly into the hole, and the dragon falls to earth, utterly demolishing the town. The surviving population clamors to crown Bard as their new king, but the Master understandably resists this idea, pointing out that the people of the land have always chosen their leaders "from among the old and wise." When this argument fails to sway the people, the Master tells them that their troubles began only when the dwarves came among them. For the time being, Bard agrees to stay and continue serving the Master, ordering the camps and seeing that the wounded are cared for. Bard-like many of the people of Esgaroth-is interested in Smaug's hoarded treasure, now apparently free for others to claim (since Bard believes that Thorin and his companions must have perished in the dragon's attack).
Bard sends messengers to the King of the Wood-elves requesting assistance. Those messengers, however, discover that the Wood-elves are already on the march, who also believes that Thorin and the rest have perished. The Wood-elves, aware of the commotion around the Lonely Mountain, believe that war has erupted, and are marching to defend their interests-"he too had not forgotten the legend of the wealth" of the ancient dwarves. But, upon hearing Bard's news of what has really happened, the King of the Wood-elves orders many of his people to go to Esgaroth to assist in relief and reconstruction efforts. Other men of arms, however, elven and mortal, make ready to march to the Lonely Mountain, in search of Smaug's hoard.
The Master's shifting of attention from his own efforts at self-preservation to the supposed guilt of the dwarves at arousing the dragon should take on a special resonance for modern readers, who have witnessed such scapegoating throughout the 20th century, most notably in the events of the Holocaust. Tolkien, of course, wrote The Hobbit before World War II; but the genocide undertaken by the Nazis alerts post-Holocaust readers to the presence of the universal tendency to blame others for one's own failings or troubles in literature of any period. The Holocaust has, one can only hope, sensitized audiences to the troubling recurrence of scapegoating, whether in real or fantastic contexts. This chapter further "darkens" the tone of the book, indicating that Tolkien-perhaps along with his readers-is discovering how fully realized his fantasy world is. It and its denizens harbor, as do all human beings, the possibility for both good and evil. With the death of Smaug, the "fairy tale" quality of The Hobbit seems to disappear altogether-and, as readers will see, those left behind in the wake of the dragon's attack do not immediately "live happily ever after." The quest driving the plot is still recovery of lost treasure, but those who undertake that quest now want to recover the treasure, not from a dragon, but from each other.