When Tom Walker takes a shortcut home and travels into the dark, gloomy swamp, he comes across the mysterious "black woodsman." The black woodsman that approaches Tom Walker is the devil, who is also known as Old Scratch. Tom is initially startled by Old Scratch, who is dressed in Native American garb and covered in soot. Tom and the devil proceed to have an amicable conversation, which involves Old Scratch offering Tom an enticing proposition. The devil explains to Tom that he protects great sums of money buried by Kidd the pirate, which are under his command. Old Scratch then offers Tom an opportunity to attain the gold, on certain conditions. Tom never discloses the specifics of the arrangement, but is it implied that the devil is willing to give him Kidd the pirate's buried treasure in exchange for his soul.

Tom does not immediately agree to the Devil's proposal but eventually decides to make a deal to attain the treasure in exchange for his soul. Old Scratch also insists that the money gained should be employed in his service, and he initially tries to make Tom a slave-trader. However, Tom refuses to be employed in the "black traffic" and decides to become a usurer, who is willing to "extort bonds, foreclose mortgages, drive the merchants to bankruptcy."