The gnome seemed pleased by her respectful manner. He said something in a low voice to the little man they had been watching, who thereupon handed him two bright copper pieces.

'Here,' he said, 'here is a souvenir for each of you—a real lucky penny. Never part with them except in direst need, which with them in your possession is not likely ever to befall you.'

The children were very pleased, and thanked him most politely.

'And now,' he said, 'as we pass on, you may glance at the other side of the manufactory, where we are employed on horse-shoes,' and he crossed between the rows of little men, each at his table, to where several were seated together at a larger one.

Hildegarde gave an exclamation of disappointment.

'What are they doing?' she cried. 'Mending old horse-shoes? What ugly things!'

'You foolish child,' said the gnome. 'How little you appreciate our skill! Of course the work they are doing is much more difficult than making pretty things. They are copying old horse-shoes after the clumsy earth fashion. Who would use a new one for luck, I should like to know, and how little do you people up there think when you pick up an old cast-off horse-shoe, as you think, what it really is, and where it has come from.'

Hildegarde felt rather snubbed. It was the first time she had forgotten the fairy's warning.

'How very clever!' she said.