As the two strangers made their way into Nuremburg, they found that a fair was being held there, and in the fair ground at the entrance to the town a very lively scene was taking place. Gay students, pretty maidens, old men, and prim matrons, all clad in holiday attire, were laughing, chattering, and bargaining on every side; and a group of soldiers, just about to depart for the wars, were standing under the trees outside a quaint old inn, drinking a gay farewell to their citizen friends.

Amongst these soldiers was a young man named Valentine, who alone appeared grave amongst the merry throng; and on being rallied by his careless companions for his dull spirits, he told them that his heart was heavy at the thought of leaving behind him his orphan sister, Margarita, a beautiful and virtuous young maiden, who, though placed in the charge of a worthy woman, would be left many months without a brother's loving care. Upon hearing this, a fair youth named Siebel, who, though scarcely more than a boy, had already the dauntless spirit of a man, came forward and declared enthusiastically that he would guard and watch over Margarita as a brother, in his stead; and Valentine, somewhat comforted by this assurance, pressed his young friend's hand gratefully, and joined in the parting merriment of his companions.

Whilst the soldiers were thus singing songs together and drinking their farewell bumpers, Mephistopheles suddenly joined the group, and declared that he would sing them a song also; and though the revellers shrank back instinctively from the evil-looking stranger, they felt themselves powerless to resist his mocking tone of command.

When the song came to an end, Mephistopheles began to foretell certain events in the lives of those present, and seeing a look of scorn and horror in the eyes of young Siebel, who unconsciously felt the dark stranger to be an enemy, he seized the youth's hand, and pronounced that every flower he touched henceforth should instantly wither and die.

Then, declaring that the wine offered to him was not worthy of the name, he struck with his sword a little cask surmounted by an effigy of Bacchus, which served as a sign to the inn, and instantly there gushed forth a stream of rich wine, with which the revellers quickly filled their cups.

But no sooner had they swallowed the strange fluid than they felt it coursing through their veins and mounting to their brain like liquid fire, and Mephistopheles, laughing sardonically at their amazement and discomfiture, filled a goblet himself, and drank it off to the health of "Fair Margarita!"

Enraged at hearing the name of his pure young sister thus lightly uttered by the sinister, fortune-telling stranger, Valentine resentfully drew his sword and rushed upon him, followed by Siebel and the other gallants standing about; but Mephistopheles quickly drew a circle around him with the point of his weapon, and his assailants then found themselves powerless, since their swords instantly snapped in half when thrust within the magic circle. Seeing that infernal powers were being used against them, the gallants held up aloft the hilts of their swords; and before the Sign of the Cross, the Demon cringed abjectly, and was compelled to retire.

The soldiers now made their final farewells, and went off to join the departing regiment; and soon after they had gone, Mephistopheles again appeared with Faust, who was by this time all eagerness to see the fair object of his vision. In answer to his oft-repeated impatient demand, Mephistopheles at last pointed to a fair-haired maiden now approaching them with a slow step and downcast eyes—a maiden of exquisite beauty, with all the charms of guileless innocence and perfect faith.

It was Margarita, the beloved sister of Valentine; and as Faust gazed upon her, he recognised with rapture the form and features of the lovely maiden shown to him by the Demon in his laboratory.

Hurrying forward with delight, he bowed gracefully, and begged to be allowed to escort her to her home; but Margarita was accustomed to treat the advances of gallants with coldness, and so, though her heart throbbed with sudden joy as she met the ardent gaze of the handsome stranger, she replied modestly that she was but a humble maiden who needed no such escort. She then passed quietly on her way; and the discomfited Faust gazed after her with eyes of passionate admiration and tender longing, for an uncontrollable love for the sweet maiden was already surging in his heart.