In the rocky depths of the wild Rhine river three lovely water-nymphs—Flosshildr, Woglinda, and Wellgunda—were merrily swimming hither and thither one dusky twilight; for though it was their duty to guard a certain mighty treasure, they found their task a light one, since no one had ever sought to rob them of it.

This evening, however, a visitor came to them at last; and suddenly the Rhine nymphs ceased their gambols in great surprise, on beholding a stranger in their midst. From a deep cleft in the rocks below a hideous black gnome had appeared; for Alberic the Nibelung, being of an adventurous spirit, had wandered upwards from Nibelheim, the underground abode of the gnomes, eager for fresh exploits.

As he now gazed upon the lovely Rhine nymphs, he was suddenly filled with a longing desire to possess one of them as a bride, and uttering a friendly greeting, he endeavoured to ingratiate himself with them. The water-maidens, however, scorned his advances, laughing at his ugly appearance; and when, incited by the fierce desire within him, he vainly tried to seize first one and then another in his grasp, they swam away merrily, leading him on with teasing taunts from rock to rock, until he was quite exhausted.

Presently, on approaching a central rock, upon which the nymphs had ensconced themselves, he was astonished to behold a wondrous gleam of gold issuing from its peak, and delighted at this dazzling radiance, he asked what it was. The maidens replied that the marvellous glow he saw came from the precious treasure they had been set to guard, the Rhinegold, which could only be torn from the rock by one who had forsworn for ever all the delights of love, and who might then shape from it a magic Ring that would gain him mighty power in the world.

On hearing this, Alberic, who had always longed for power, determined to gain the treasure; and loudly declaring that he renounced love and its delights for ever, he climbed the rock, and by a mighty effort wrenched the magic gold from its summit. The Rhine nymphs, now powerless to protect their treasure, dived back into the water with cries of despair, whilst Alberic triumphantly returned to Nibelheim with his prize.

Soon after this incident, the chief of the gods, Wotan, the All-Father, entered into an agreement with two powerful giants, Fasolt and Fafner, to build him a noble castle in Asgard, the abode of the gods; and in payment for this service, he promised to bestow upon them Freia, the goddess of Youth and Beauty.

Awakening one dawning day upon a flowery mountain-side, where he had been slumbering beside his celestial spouse, Fricka, the goddess of Marriage, he saw the glittering turrets of a glorious mansion upon a distant rocky height, and knew that the task was done; and arousing Fricka, he proudly pointed out to her their new abode, to which he gave the name of Valhalla.

Just then, however, the beautiful Freia fled to them for protection; and closely pursuing came the two giants, demanding her as the payment agreed upon for the task they had just completed.

But Wotan now refused to give up the beloved Freia, and when the giants, furious at his refusal, again demanded their rights, he turned eagerly for help to Loki, the god of Fire and Deceit, at whose mischievous instigation he had entered into the compact. Loki had promised the great god to assist him in preventing the giants from obtaining the reward agreed upon for their labours, and he now cunningly related the story of how the Rhine nymphs had lost their magic gold to Alberic the gnome, hoping to excite the giants' interest in a treasure that could secure the holder such mighty power.

His ruse succeeded; for the two giants now declared that they would accept Alberic's treasure in lieu of the Goddess Freia; and they desired Wotan to set forth, and rob the gnome at once.

Wotan, however, was furious at being asked to turn thief, and angrily refused to do their bidding; and upon this, Fasolt and Fafner suddenly seized Freia, and ran off with her, declaring that they would hold her in pledge until the Rhine Gold treasure was delivered to them.

And now, a dreadful misfortune befell the dwellers in Asgard; for Freia was the guardian of a magic apple-tree, the fruit of which, eaten daily, alone preserved their youth and immortality. Deprived of the beautiful guardian's care, the apples began to fade and die, and the gods, consequently, quickly found themselves growing old and withered, and their radiant strength departing.

Full of horror, Wotan was now forced to secure the return of Freia at the price named by the giants; and, accompanied by Loki, he descended through a rocky cleft to Nibelheim.

Here they made their way to the cave of Alberic, whose brother, Mime, they found crouching beside his blacksmith's forge, smarting from recent blows. For by this time Alberic had shaped from the Rhine Gold a magic Ring of marvellous power, and by means of it had made himself the ruler of Nibelheim, forcing the unhappy gnomes to slave day and night, amassing treasure-hoards for him. He had also compelled his brother, Mime, the most skillful smith in that land of forges, to make him a Tarnhelm, or wishing cap, by means of which he could render himself invisible, or take on the form of any creature he chose.

Having learnt this from Mime, who was even now smarting from the blows of his tyrant-brother, the two gods laid their plans; and when Alberic presently appeared, they greeted him in friendly tones, and invited him to show them the wonderful powers of his Tarnhelm.

The gnome, proud of his new treasure, at once put on his wishing-cap, and changed himself into a dragon; and then, at the request of the cunning Loki, he unsuspectingly took on the form of a toad. However, no sooner did the toad appear, than the gods instantly seized it, and binding their captive securely, they triumphantly bore him off to Wotan's mountain-side.

Here Alberic, though he had quickly regained his own shape, found himself a prisoner indeed, his precious Tarnhelm having been put out of his reach; and the exultant gods refused to set him free until he had agreed to yield up all his mighty treasures. So the wretched dwarf, in order to gain his freedom, was compelled to call upon his gnome-subjects to bring forth the precious hoards they had laid up for him, and to pile them in a heap upon the mountain-side.

When the Tarnhelm had been added to the glittering heap of gold and gems, Alberic entreated to be allowed to retain the magic Ring, and upon the request being refused, he passionately laid a curse upon the circlet, declaring that it should bring disaster and death upon every person who should afterwards own it. But in spite of the curse, the Ring was snatched from his finger by Wotan, and then, on being set free, the hapless gnome, robbed of his power, fled back to his own land, vanishing through a cleft in the rock.

A concourse of gods and goddesses had now arrived upon the scene; and presently the giants, Fasolt and Fafner, also arrived to claim their wages, bringing their hostage with them. At first Wotan also endeavoured to retain the Ring for himself; but the gods refused to yield Freia until they possessed this wonderful talisman as well as the other treasures. Then Erda, the wise goddess of Earth, rose slowly from the ground, and warned the great god that disaster was in store for him the longer he held the now fatal talisman; and at last, overcome by this warning, Wotan tore the Ring from his finger, and flung it upon the treasure-heap.

The giants now took possession of their prize; and upon Freia being set at liberty, all the gods at once regained their pristine youth and strength.

But Alberic's curse had not been a vain one, and no sooner did the giants obtain their treasure than they began to quarrel as to which should have the Ring; and in the fight that quickly ensued, Fasolt was killed. Fafner, the survivor, then secured the mighty hoard, together with the Ring and Tarnhelm, and retired to a certain gloomy cave in a wild, deserted spot; and here, in the form of a huge, fiery dragon, he guarded the prize he had won.

Wotan, over-awed at this immediate proof of the terrible power of Alberic's curse, began to wonder how he could preserve himself and all the gods descended from him; for he, also, had owned the fatal Ring for a time, and, god though he was, his powers were limited. Even when Fricka reminded him that the dazzling abode, Valhalla, was still left to him as a Castle of Refuge, he was little comforted, knowing that it had been obtained at a shameful price that would at length bring about the destruction of the gods, since he, their All-Father, could not escape the curse laid upon him; but he agreed to take possession of the castle.

Since the glittering mansion was separated from them by the great yawning valley of the Rhine, Donner, the god of Thunder, came forward to their aid; and first clearing the cloud-laden, misty air by means of a thunderstorm, he set up a dazzling rainbow-bridge from one mountain top to the other.

It completely spanned the valley; and upon this beautiful arch of radiant light, the gods passed over to take possession of the glorious halls of Valhalla.