'Fafnir guarding the gold hoard' by Arthur Rackham.
There was once a dwarf king named Hreidmar. He lived in a grand hall overlooking the Andvari Falls, built for him by his eldest son, Regin. His youngest son, Fafnir, also lived with him. He was a gemsmith. He made the finest jewels around, diamond amulets that sparkled with silvery starlight an ruby bracelets that shimmered so bright that it was as if they were aflame. Hreidmar’s third son was Otr, a master fisherman who possessed the rare gift of being able to change his shape. He spent his days fishing in a glittering lake at the foot of the cliff. Each morning he would climb down the cliff, and each evening he would come back up with nets bulging with all the fish he had caught. You see, Otr had worked out a cunning scheme. He would set up his nets in the lake and then transform into an otter. As an otter, he would swim around the lake, herding any fish he found into his nets.
One day, Odin came to the lakeside accompanied by Hoenir and Loki. Odin had heard rumours of the beauty of the Andvari Falls and wanted to see it for himself. He was not disappointed. As he breathed in the fresh sea air, he looked at the far-off fjords, at the ice cliffs in the distance. Loki, however, was not as impressed. He sighed like a moody child and picked up a pebble. He noticed that there was an otter swimming in the nearby lake. Loki watched it gracefully glide through the water, leaping out of it every now and again for air.
Smirking, Loki turned to the lake. He readied his aim, and when the otter rose from the water, he threw the pebble at it.
It hit the otter’s head and killed it instantly.
Hearing the splash, Odin and Hoenir turned to the lake.
‘What have you done, Loki?’ Odin asked gravely. The corpse floating on the water's surface was not an otter but a dwarf.
It was then that Odin saw Hreidmar’s halls on the top of the cliff. ‘Perhaps this dwarf is of that household. It is a terrible thing you have done, Loki, and if he is of their kin, it is only right that you give them the grim news in person.’
So, the three gods carried the dwarf up the cliff and knocked on the door to Hreidmar’s halls.
Fafnir was the one unfortunate enough to answer the door. When he saw his brother's body, his face turned white. ‘Otr,’ he whimpered.
Then, Regin came over. There was a smithing hammer in his hands.
‘Are you the master of this household?’ Odin asked Regin.
‘That would be my father,’ Regin said solemnly.
‘In that case, we have some grave news to tell him.’
‘Father, something has happened to Otr,’ Regin called.
Hreidmar came to the door at once.
The old dwarf’s grey eyes widened when he saw his son’s body, and tears began to well in them.
‘My boy,’ he cried. 'What has happened?’
Hoenir, who had carried Otr’s body up the cliff, nudged Loki with his elbow.
Loki scowled at him and stepped forward. ‘Well, you see, there has been a slight incident, and I’m sorry to say that your dear boy, Otr, was caught in the crossfire. Let it be said that what happened was nobody’s fault. It is a mere consequence of the cruel world we live in. Had I anything to offer that would compensate your loss, I would gladly give it to you, but I know nothing can replace the loss of a loved one.’
The dwarf’s eyes lit up. ‘Well, if you were to donate some gold to us, I’ll gladly accept it. I’m sure it’ll help ease our mourning.’
Loki patted his pockets to show they were empty. ‘I am sorry to say that all my gold is in Asgard. I have nothing to give you. If it were possible, I would gladly give you a bag brimming with gold, but alas, I cannot.’
Hoenir grunted. ‘Surely you can think of something,’ he said. ‘Aren’t you always boasting about how resourceful you are? Now is as good a time as any to show us why we keep you around.’
‘I agree with Hoenir,’ Odin said. ‘You have wronged these dwarves greatly, and if there is something you can do that might make amends, it must be done.’ He handed Loki an empty cloth bag.
‘And remember,’ Hoenir sneered. ‘You said bristling.’
Loki snatched the bag from Odin’s hands and stormed out of the halls.
He looked around the grassy cliff, but all he could see were bright blue skies and the steep slope to the bottom.
He wandered around.
What could I give the dwarves? Loki thought. I am certainly not going back to Asgard to give them any of my gold, but what else can I do? I do not believe they will be too impressed with a bag full of soil.
Just then, he noticed an opening in the ground.
Loki went over and peered in. It was a burrow of some sort, but for what animal, he did not know. The hole was far too big for a badger. Perhaps this could be a hidden treasure trove, he thought.
Loki dropped to his knees and squeezed in.
The air inside the tunnel was stale and stuffy. Sharp stones dug into his knees, and dirt crumbled above his head, getting in his eyes and mouth. A few times, Loki thought about turning back, but he carried on.
Eventually, the way became wide enough that Loki could rise up and walk. There was even the faint golden glint of light ahead of him.
Loki followed it, walking faster and faster.
At the end of the tunnel, he found that his suspicions had been correct. This was a treasure trove, after all, but it seemed the treasure already had an owner.
It belonged to a pale-skinned dwarf called Andvari.
He sat on top of one of his piles of gold, eyeing Loki suspiciously. He was muttering incoherently to himself.
‘Hello, master dwarf. This is a fine hoard of gold you have here,’ Loki said.
‘This is my gold,’ the dwarf snapped. ‘You can’t have it!’
‘No, certainly not,’ Loki reasoned. It was clear that if he wanted some of Andvari’s gold, he could not simply take it. He would need to trick the dwarf somehow.
‘Have a look at this.’ Loki bent down and took out the dagger he had hidden in his boot.
The blade's hilt was enwrought with black onyx stones, and it had a velvet handle. When Loki removed the sheath, the metal shimmered with a silver glow that lit up the cavern. It was of Asgardian make, and there were few things it could not slice through with ease.
The dwarf jumped up and rushed over to Loki.
‘Do you like it?’ Loki asked. ‘Well, I would gladly give it to you. All I ask for is something in return.’
‘No! This is all my gold,’ Andvari snapped.
‘And that is why I would only ask for a small portion of it. Just enough to fill up this little bag. Honestly, with this much gold, you would hardly know the difference. Plus, you’d have a one-of-a-kind dagger.’
‘Splendid,’ Loki said. He put the dagger back in his boot.
Without wasting another second, he darted over to the pile of treasure and began shovelling it into the bag.
Once it was full, he came back over to the dwarf. ‘See that,’ Loki said, pointing at Andvari's treasure hoard. ‘You can hardly notice I have taken anything at all.’
He could not help noticing an emerald ring on Andvari’s finger.
‘Say, that ring of yours, could I have that too?’
‘But this is my ring,’ the dwarf snarled.
‘That is a shame,’ Loki said. ‘And here I was thinking we had a deal.’
‘Fine,’ Andvari moaned. He took off the ring and slung it in Loki’s bag.
Something in the dwarf’s expression changed when he took off the ring. His eyes were that bit brighter, and his expression that bit softer. If Loki had been paying attention to anything other than himself, he might have realised that the ring carried a curse. According to rumours, these rings are pure evil. They drain the wearers of all goodness. Any hope they once felt is extinguished. Any ties of love or friendship are severed. They eventually become possessed by greed and spite.
‘Farewell’, Loki said. He headed out of the tunnel.
‘Wait. What about my dagger?’ Andvari asked.
Loki turned back. ‘You do not want my old dagger. Certainly not. You shall have a dagger fresh from the forges of Asgard.
As soon as I get back, I will put in an order at the smithy, and as soon as it is forged, Hermod will bring it down to you. You will probably have it sometime before the next full moon.’
‘How do I know you are not lying to me?’ Andvari said.
Loki stomped his foot. ‘Me, tell a lie? Certainly not! Not a day goes by without someone telling me how honest I am. Thor himself can strike me down if ever I tell a lie!’
Before the dwarf could even respond to this, Loki scampered away.
When Loki got to the other side, he took a deep breath of the fresh sea air to clear his lungs and brushed the dirt from his clothes. Before he went back into Hreidmar’s Halls, he checked the skies for any signs of thunder.
‘So, he has returned,’ Hoenir said when he saw Loki step into the halls. ‘And with a full bag, no less.’
Hoenir had laid Otr on a bench.
‘All went well, I trust?’ Odin asked.
‘Very well, indeed. I went back to Asgard and took the gold from my personal vaults. It was the least I could do.’
‘From your vaults, you say?’ Odin remarked. ‘I am impressed.’
Hoenir sniggered. 'Yeah right,' he mumbled.
Loki handed Hreidmar the bag.
‘Thank you, Loki,’ Hreidmar said. He took the bag. ‘May the skalds forever sing songs of your generosity.’
‘I’m sure they’ll sing something,’ Hoenir muttered.
‘Farewell, master dwarf,’ Odin said.
The three gods bowed their heads at Otr’s body and left the halls.
Hreidmar did not waste any time before he opened the bag and divvied up the gold.
Fafnir was mesmerised by the beautiful emeralds on Andvari’s ring and demanded it for himself. Hreidmar and Regin, who had no love for jewellery, gave it to him without complaint. Little did they know exactly what they had done, though.
The ring soon took hold of Fafnir. He spent more and more of his time on his own, even refusing to dine with his family.
When Regin passed by his chambers, he often heard him muttering to himself in his room. He became lustful, jealous of the gold Hreidmar and Regin possessed. So much so that one night, he crept into his father’s bed-chamber and slit his throat.
He would have done the same to Regin too, but the dwarf awoke in time and fought off his brother. But, not wanting to finish off Fafnir, Regin fled.
Fafnir now had everything he wanted. His father was dead, his brother was gone, and he possessed enough riches to satisfy his greed. The ring had twisted his heart, but it had not finished with him. Over time, Fafnir ceased to be a dwarf and became a dragon.
He soon found that Hreidmar’s halls were too bright for him. So, he took his treasure and slivered to a new, darker lair.