In the plains beyond the Long Lake.
Beorn, being a man who had lived a long time and seen much of the world's strangeness, was acquainted with the concept of Trolls. Therefore, when a two-meter-tall "miniature Troll" came strolling casually into his new yard, he paused his meal for only a second. Recognizing the underlying draconic smugness, he simply went back to eating.
Smaug wasn't bothered by the lack of fanfare. He plopped down heavily on the grass beside the skin-changer. "Settling in all right?"
"Hm," Beorn grunted.
"Did you cook that yourself?" Smaug asked, eyeing the massive wooden bowl of stew.
"Hm," Beorn replied, chewing methodically.
"Smells fantastic. Your technique has improved," Smaug noted.
Beorn swallowed his mouthful and looked at the Troll. Despite his gruff nature, curiosity won out. "Lord Bard told me that you were the one who taught them these new ways of cooking."
"I did indeed," Smaug grinned, his jagged Troll-teeth showing.
"You are a dragon," Beorn said, his brow furrowing. "How do you know the secrets of the spice trade and the hearth?"
"Hah! Who wrote the rule that a dragon can't appreciate a good braise?" Smaug laughed. "There's a lot I know, Beorn. You'll find out in time."
"..." Beorn decided he didn't actually want to know. He took another large bite of stew and remained silent.
Smaug chatted amiably for a few more minutes, carrying the conversation entirely by himself. Finally, he stood up. "Well, I'll leave you to it. If you need anything, come find me. If I'm out, Bard can sort it out for you."
Beorn instinctively opened his mouth to say he needed nothing, but closed it again. The food was remarkably good.
Smaug stepped away, shifting smoothly into his Eagle form before taking to the sky.
Because he was flying as an Eagle, the alarm shells of Mirkwood did not sound. The Elves were too busy forging armor and drilling with spears to notice a single bird of prey. Smaug landed on the high balcony of the King's pavilion.
It was empty. He hopped down the stairs until he found a guard, squawked at him to get his attention, and waited.
A few minutes later, Thranduil appeared, looking thoroughly exhausted and profoundly irritated. He was accompanied by his son, Legolas.
"You again," Thranduil sighed, rubbing his temples. "What is it now?"
"Old neighbor! You look dreadful. Has someone upset you?" Smaug asked, feigning innocent concern.
"..." Thranduil had truly had enough of this creature. "State your business."
"Heh, just a few minor matters," Smaug chirped cheerfully. "Three small things, to be precise."
Three things? Does he think this is a tavern? Thranduil's scowl deepened.
Legolas stood silently beside his father, observing.
Smaug noticed the young prince and decided to poke the bear. "Legolas, isn't it? What did you do to make your father so miserable? He looks like he swallowed a lemon."
... Legolas suddenly felt a deep, profound sympathy for his father. This dragon was infuriating.
"Continue," Thranduil ground out through clenched teeth.
"Right then. The most important thing first," Smaug said, dropping the playful tone. "I have a proposal regarding the future of your kingdom."
"I can imagine how stressed you've been lately, old neighbor. I know you like it here. You want to live out your immortal days in peace, ignoring the mess of the outside world."
"So, I propose a formal alliance. We face the coming war together. In exchange, I swear upon my life that when the dust settles, your borders will remain exactly as they are. You can have your peace forever."
Thranduil's eyes narrowed, his mind racing. He was a King, and he understood the subtext of diplomacy.
If we ally, I keep my home.
"And if I refuse?" Thranduil asked, his voice a cold whisper.
"No hard feelings. It's just a proposal," Smaug replied breezily. "But let's play out a hypothetical scenario."
"Say we don't ally. I'm just one dragon. I look at Sauron's massive Orc army and think, 'Why should I risk my neck for Middle-earth?' I have no quarrel with Sauron. So, I adopt a policy of strict non-resistance."
"I step aside. The Orcs march right through the Mountain pass. Sauron isn't stupid; if I don't fight him, he won't waste resources fighting me."
The implication hung in the air like a guillotine blade.
Thranduil had already run this exact scenario in his head.
If Smaug stepped aside, the Orc legions would pour into the North. And their very first target, standing right in their path, would be Mirkwood. Unlike the dragon, the Elves could not claim "neutrality." The blood-feud between the Eldar and the Shadow went back to the dawn of the world. They would have to fight, and they would likely be slaughtered.
Thranduil remained silent.
Legolas, listening to the exchange, felt a cold shock. His father had warned him that the dragon was cunning, but hearing it firsthand was terrifying. This wasn't a beast; this was a king holding a knife to their throats with a smile.
"I will consider your proposal," Thranduil finally said, his voice tight. "What were the other two matters?"
"Thank you for your consideration," Smaug replied politely. "Second matter: I'm going back to see those Stone Giants. I know you know what they want. What is their price?"
Thranduil weighed the request. Was this information worth withholding? The dragon could likely find out from Elrond or Galadriel eventually.
"I require gold," Thranduil stated, turning the situation to his advantage. "Ten thousand pounds. For the war effort."
Smaug's eyes lit up. He didn't hesitate. He shifted back into his massive, draconic true form. He opened his jaws and triggered his system storage.
Clatter—clink—crash!
A literal waterfall of pure gold coins, goblets, and bars poured from his maw, quickly forming a glittering hill on the balcony floor.
Legolas stared, his jaw slack. He stores it... inside himself? Does he not digest it?
"Take a look, old neighbor. Is that enough?" Smaug asked, wiping his mouth with a claw.
Thranduil glanced at the pile. To a dragon, it was pocket change; to a King outfitting an army, it was a godsend. "It is more than enough."
"Keep the change. You'll need it for armor and weapons," Smaug said dismissively. "Oh, and if you need Mithril, I have a fair bit in Erebor, and there's plenty more rotting in Moria. We can trade later."
Thranduil's eyes widened slightly at the mention of Mithril, but he kept to the bargain.
"The Stone Giants are creatures of the earth," Thranduil explained. "Like any creature, they must eat. But they do not eat meat or grain. They eat stone. And the purer the stone, the better."
"They eat gems."
Thranduil looked directly into Smaug's golden eyes. "I can assure you, Smaug. If you offer them the Arkenstone, they will do whatever you ask."
Smaug froze.
The Arkenstone? He had just promised Gandalf he would give the Arkenstone to Thorin. But if it was the key to securing the ultimate defense system for his kingdom...
Well, Smaug thought, a wicked grin forming in his mind. Thorin Oakenshield is going to be very disappointed.