Describe the treatment of the hobbits & dwarves by the men of Laketown & The Master of Laketown.

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Bilbo Baggins and his dwarf compatriots are relieved to have finally escaped the dungeons of the Wood Elves in Mirkwood. With each dwarf encased in an empty barrel and Bilbo hanging on as best he can, on top of a barrel or two, the group find themselves floating their way down to Laketown. Laketown is a city of humans, located south of the Lonely Mountain. The people there are friends with the Wood Elves.

When Bilbo and the dwarfs first approach the guards at the bridge before the city of Laketown, the guards are surprised to see them. Unprepared for the sight of so many dwarfs and the specter of their leader, Thorin Oakenshield, demanding to see the Master of Laketown, the guards can only nervously comply with the unusual demand. When the entourage finally stand in the great halls of the Master of Laketown, the people of the city are in a frenzy. They remember the prophecy of the return of the King under the Mountain, and they are ecstatic at this new development, despite the fact that Thorin Oakenshield isn't the King under the Mountain; he is the grandson of Thror, the actual King under the Mountain.

The Master of Laketown is initially suspicious of Thorin's claim. Additionally, he isn't too keen on potentially offending the Elven King, who wields great power in the area. Meanwhile, the Wood Elves in the Master's hall indignantly proclaim that Bilbo and the dwarfs are prisoners of their king who have escaped from the dungeons. Basically, the Wood Elves portray the dwarfs as vagabonds who pose a danger to law-abiding citizens. In the end, the clamor of the crowds decide the situation for the Master of Laketown: he reluctantly makes Bilbo and the dwarfs welcome in his great hall. Seeing the Master's changing stance, the whole town loses no time in housing some of the dwarfs in their homes and in generally lavishing an opulent hospitality on Thorin's grateful band of warriors.

In due time, Bilbo and the dwarfs regain their strength, and Thorin decides that they must be on their way. The Master finds himself ambivalent about this announcement. On the one hand, he has never really believed Thorin's story nor imagined that the dwarfs would dare to confront Smaug, the dragon. On the other hand, he finds himself relieved that the dwarfs will soon be on their way, as it has been very expensive to tend to their needs during their short stay. So, with the Master and his councilors waving the dwarfs off from the steps of the town hall (after providing them with necessary provisions for the journey), Thorin and his group row away. The people of Laketown sing heartily as the dwarfs make their way down the river.