"Indeed, it is a palace!" exclaimed the smiling Claus. "I must thank the good Knooks again, for their knowledge of man's needs as well as for their labors in my behalf."

He left his new home with a glad feeling that he was not quite alone in the world, although he had chosen to abandon his Forest life. Friendships are not easily broken, and the immortals are everywhere.

Upon reaching the brook he drank of the pure water, and then sat down on the bank to laugh at the mischievous gambols of the ripples as they pushed one another against rocks or crowded desperately to see which should first reach the turn beyond. And as they raced away he listened to the song they sang:

"Rushing, pushing, on we go!
Not a wave may gently flow—
All are too excited.
Ev'ry drop, delighted,
Turns to spray in merry play
As we tumble on our way!"

Next Claus searched for roots to eat, while the daffodils turned their little eyes up to him laughingly and lisped their dainty song:

"Blooming fairly, growing rarely,
Never flowerets were so gay!
Perfume breathing, joy bequeathing,
As our colors we display."

It made Claus laugh to hear the little things voice their happiness as they nodded gracefully on their stems. But another strain caught his ear as the sunbeams fell gently across his face and whispered:

"Here is gladness, that our rays
Warm the valley through the days;
Here is happiness, to give
Comfort unto all who live!"

"Yes!" cried Claus in answer, "there is happiness and joy in all things here. The Laughing Valley is a valley of peace and good-will."

He passed the day talking with the ants and beetles and exchanging jokes with the light-hearted butterflies. And at night he lay on his bed of soft moss and slept soundly.