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Tom Walker initially meets "Old Scratch" as he takes a shortcut through the swamp. When Tom reaches the site of an old fort that is said to be abandoned, he kicks at a skull on the ground. When an unknown voice tells him to leave the skull alone, Tom turns to find someone sitting on a stump. The mysterious figure is dressed strangely, is of unknown origin, and possesses "great red eyes." Because he is covered in soot, the unknown man appears to be completely black and carries an ax.
While most people would be terrified to encounter the devil, Tom Walker is not frightened at all. He observes Old Scratch and the work being done (trees symbolize souls and are being cut down and burned), then correctly identifies him.
Old Scratch and Tom Walker have "a long and earnest conversation together, as Tom returned homeward. At this time, the devil tells Tom of hidden treasure that can be his for a certain price. The price of finding the treasure is not revealed to the reader, but Tom refuses to make the agreement without thinking it over. Before parting from Old Scratch, Tom questions whether the devil is being honest with him. The devil replies by marking Tom Walker's head with a black fingerprint.
Washington Irving first sets the stage for Tom to meet the devil by providing information about Tom's mean and "miserly" character, his life at home with his willful wife, and the myth surrounding Kidd's buried treasure. On the day Tom meets the devil, he takes a shortcut home through the swamp that leads him to an old Indian fort. This fort is said to have been used by some for devil worship, which makes it a hallowed spot to meet "Old Scratch." Because Tom is such a rough character himself, he is not necessarily shocked to meet the devil; he's more surprised when he suddenly discovers another man sitting near him at the fort. The two argue over Deacon Peabody's property before Tom finds out his guest's identity. Irving explains Tom's response to meeting the devil as follows:
"One would think that to meet with such a singular personage in this wild, lonely place would have shaken any man's nerves; but Tom was a hard-minded fellow, not easily daunted, and he had lived so long with a termagant wife that he did not even fear the devil."
From this description, one might think that Tom has met a kindred spirit. Consequently, Tom is not easily tempted by the Devil's proposal to give him Kidd's treasure because it apparently comes with eternal conditions. (Making a deal with the Devil usually does.) However, Irving does not provide any details of the deal's requirements--he only mentions the following:
"What these conditions were may be easily surmised, though Tom never disclosed them publicly. They must have been very hard, for he required time to think of them, and he was not a man to stick at trifles when money was in view."
It can be inferred from this passage that Tom is being unusually thoughtful in taking the time to think about the details and validity of the offer. Also, being a shady character himself, Tom knows not to trust anyone, especially "Old Scratch."
The process that the devil and Tom go through when making the deal starts with the introduction, of course, because it is only fair for Tom to know with whom he is dealing. Then, Tom is tempted with the idea of becoming rich with Kidd's treasure. Finally, the conditions are set forth for accepting the deal. The meeting ends with Tom asking what evidence he can have that the devil is telling the truth. The devil responds by leaving his black fingerprint on Tom's forehead and saying, "There's my signature."
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