Alberich recognises in Loge an old enemy. Loge's reply to Alberich's, "I know you well enough, you and your kind!" is perhaps, with its cheerful dancing flicker, his prettiest bit of self-description. "You know me, childish elf? Then, say, who am I, that you should be surly? In the cold hollow where you lay shivering, how would you have had light and cheering warmth, if Loge had never laughed for you?..."
But Alberich seems to remember too many reasons for distrusting him. "I can now, however," he boasts, "defy you all!" and he calls to their notice the heaped riches,—the Hort.
"But," remarks Wotan, "of what use is all that wealth in cheerless Nibelheim, where there is nothing to buy?"
"Nibelheim," replies Alberich, "is good to furnish treasures and to keep them safe. But when they form a sufficient heap, I shall use them to make myself master of the world!"
"And how, my good fellow, shall you accomplish this?"
Alberich has apprehended in this guest one of the immortals,—which, taken into consideration a speech suggestive every time it resounds of calm heights and stately circumstances, is not strange. Alberich hates him, hates them all. This is his exposition of his plan: "You who, lapped in balmy airs, live, laugh, and love up there, with a golden fist I shall catch you all! Even as I renounced love, all that lives shall renounce it! Ensnared and netted in gold, you shall care for gold only! You immortal revellers, cradling yourselves on blissful heights in exquisite pastimes, you despise the black elf! Have a care!... For when you men have come to be the servants of my power, your sweetly adorned women, who would despise the dwarf's love, since he cannot hope for love, shall be forced to serve his pleasure. Ha ha! Do you hear? Have a care, have a care, I say, of the army of the night, when the riches of the Nibelungs once climb into the light!"
Wotan, whose Olympian self-sufficiency is usually untroubled by what any mean other-person may say, at this cannot contain himself, but starting to his feet cries out a command for the blasphemous fool's annihilation! Before Alberich, however, has caught the words—his deafness perhaps it is which saves his life—Loge has called Wotan back to his reason. Practising on Alberich's not completely outlived simplicity, he by the ruse of feigning himself very stupid and greatly impressed by his cleverness, now induces him to show off for their greater amazement the power of the Tarnhelm, which it appears has not only the trick of making the wearer at will invisible, but of lending him whatever shape he may choose. Later we find that it has also the power to transport the wearer at pleasure to the ends of the earth in a moment of time.
To put Loge's incredulity to shame, Alberich, Tarnhelm on head, turns himself into a dragon, drawing its cumbersome length across the stage to a fearsome tune which gives all of its uncouthness, and never fails to call forth laughter, like the giants' tread. As a further exhibition of his power, after full measure of flattery in Loge's pretended fright, he at the prompting of the same changes himself into a toad, which has but time for a hop or two, before Wotan places his calm foot upon it. Loge snatches the Tarnhelm off its head and Alberich is seen in his own person writhing under Wotan. Loge binds him fast, and the gods, with their struggling prey between them, hurry off through the pass by which they came.
Then reoccurs, but reversed, the transformation between Nibelheim and the upper world. The region of the stithies is passed, the little hammers are heard. At last Wotan and Loge with Alberich reappear through the sulphur-cleft.
"Look, beloved," says Loge to the unhappy captive, "there lies the world which you think of conquering for your own. Tell me now, what little corner in it do you intend as a kennel for me?" And he dances around him, snapping his fingers to the prettiest, heartlessly merry fire-music.