Back at the Lonely Mountain, Bilbo and the dwarves watch the gathering of birds with growing wonder. The thrush returns, and Balin comments that he wishes it were a raven. He does not know the thrush’s language, but the ravens can communicate with dwarves. The thrush flies away, and Balin watches it go, murmuring that it seems to understand everything it hears. Not long later, the thrush reappears with a very old raven, Roäc, who explains that Smaug is dead and that Lake-town is destroyed. Roäc says the men and elves are coming to seek a share in the treasure, and he points out that the small group of dwarves cannot defend the Lonely Mountain alone. He advises Thorin to avoid negotiating with the Master of Lake-town but to speak instead with Bard, the man who slew the dragon. Roäc believes that a new era of peace can begin for dwarves, elves, and men if Thorin acts wisely.

Thorin grows angry at the suggestion that anyone but his friends and family should ask for a share of the treasure. He has spent long hours inside the mountain looking at the jewels, and he does not want to give up any of it—not even to the needy townspeople or to the heroes who killed Smaug. He asks Roäc to send messengers to his cousins, asking them to send reinforcements to defend the gold. Roäc does not seem to approve of this choice, but he does as Thorin asks.

The dwarves rush back to the mountain and begin fortifying it against an invasion. Dwarves are skilled at such work, so the job gets finished quickly. When the men and elves arrive a few days later, they are astonished to see a large wall preventing their forward progress. Bard speaks with Thorin, pointing out that he killed Smaug and that part of the treasure belonged to his own ancestors as well as to Thorin’s. After some deliberation, he demands one twelfth of the treasure under the mountain.

Thorin flatly refuses to give Bard any part of the treasure, no matter what claim he may have on it. He accuses the men, and especially the elves they have brought with them, of being thieves and looters. He says he will speak with Bard again only if he lays down his arms and orders the elves to leave.

Bilbo feels dissatisfied with the way events are progressing. He is not as greedy as the dwarves are, and it seems just to him that the men who killed Smaug should have some share in the treasure—especially since they are now in great need. As far as Bilbo is concerned, the adventure should be over. He does not want to live in a cramped, dragon-smelling hole in a mountain for one moment more.