After the death of Baldur, Loki never again ventured to intrude himself into the presence of the gods. He knew well enough that he had now done what could never be forgiven him, and that, for the future, he must bend all his cunning and vigilance to the task of hiding himself from the gaze of those whom he had so injured, and escaping the just punishment he had brought upon himself.
"The world is large, and I am very clever," said Loki to himself, as he turned his back upon Asgard, and wandered out into Manheim; "there is no end to the thick woods, and no measure for the deep waters; neither is there any possibility of counting the various forms under which I shall disguise myself. Odin will never be able to find me; I have no cause to fear." But though Loki repeated this over and over again to himself, he was afraid.
He wandered far into the thick woods, and covered himself with the deep waters; he climbed to the tops of misty hills, and crouched in the dark of hollow caves; but above the wood, and through the water, and down into the darkness, a single ray of calm, clear light seemed always to follow him, and he knew that it came from the eye of Odin who was watching him from Air Throne.
Then he tried to escape the watchful eye by disguising himself under various shapes. Sometimes he was an eagle on a lonely mountain-crag; sometimes he hid himself as one among a troop of timid reindeer; sometimes he lay in the nest of a wood-pigeon; sometimes he swam, a bright-spotted fish, in the sea; but, wherever he was, among living creatures, or alone with dead nature, everything seemed to know him, and to find a voice in which to say to him, "You are Loki, and you have killed Baldur." Air, earth, or water, there was no rest for him anywhere.
Tired at last of seeking what he could nowhere find, Loki built himself a house near a narrow, glittering river which, lower down flashed from a high rock into the sea below. He took care that his house should have four doors in it, that he might look out on every side and catch the first glimpse of the gods when they came, as he knew they would come, to take him away. Here his wife, Siguna, and his two sons, Ali and Nari, came to live with him.
Siguna was a kind woman, far too good and kind for Loki. She felt sorry for him now that she saw he was in great fear, and that every living thing had turned against him, and she would have hidden him from the just anger of the gods if she could; but the two sons cared little about their father's dread and danger; they spent all their time in quarreling with each other; and their loud, angry voices, sounding above the waterfall, would speedily have betrayed the hiding-place, even if Odin's piercing eye had not already found it out.
At last, one day when he was sitting in the middle of his house looking alternately out of all the four doors and amusing himself as well as he could by making a fishing-net, he spied in the distance the whole company of the gods approaching his house. The sight of them coming all together—beautiful, and noble, and free—pierced Loki with a pang that was worse than death. He rose without daring to look again, threw his net on a fire that burned on the floor, and, rushing to the side of the little river, he turned himself into a salmon, swam down to the deepest, stillest pool at the bottom, and hid himself between two stones. The gods entered the house, and looked all round in vain for Loki, till Kvasir, one of Odin's sons, famous for his keen sight, spied out the remains of the fishing-net in the fire; then Odin knew at once that there was a river near, and that it was there where Loki had hidden himself. He ordered his sons to make a new net, and to cast it into the water, and drag out whatever living thing they could find there. It was done as he desired. Thor held one end of the net, and all the rest of the gods drew the other through the water. When they pulled it up the first time, however, it was empty, and they would have gone away disappointed had not Kvasir, looking earnestly at the meshes of the net, saw that something living had certainly touched them. They then added a weight to the net, and threw it with such force that it reached the bottom of the river, and dragged up the stones in the pool.
Loki now saw the danger he was in of being caught in the net, and, as there was no other way of escape, he rose to the surface, swam down the river as quickly as he could, and leaped over the net into the waterfall. He swam and leaped quick as a flash of lightning, but not so quickly but that the gods saw him, knew him through his disguise, and resolved that he should no longer escape. They themselves divided into two bands. Thor waded down the river to the waterfall; the other gods stood in a group below. Loki swam backwards and forwards between them. First he thought he would dart out into the sea, and then that he would spring over the net back again into the river. This last seemed the easiest way of escape, and with the greatest speed he attempted it. Thor, however, was watching for him, and as soon as Loki leaped out of the water he stretched out his hand and caught him while he was yet turning in the air. Loki wriggled his slippery, slimy length through Thor's fingers; but the Thunderer grasped him tightly by the tail, and, holding him in this manner in this hand, waded to the shore. There Father Odin and the other gods met him; and, at Odin's first searching look, Loki was obliged to drop his disguise, and, cowering and frightened, to assume his proper shape before the assembled lords. One by one they turned their faces from him; for, in looking at him, they seemed to see over again the death of Baldur the Beloved.
You were told that there were high rocks looking over the sea near Loki's house. One of these, higher than the rest, had midway four projecting stones, and to these the gods resolved to bind Loki so that he should never again be able to torment the inhabitants of Manheim or Asgard by his evil-doings. Thor proposed to return to Asgard, to bring a chain with which to bind the prisoner; but Odin assured him that he had no need to take such a journey. "Loki," he said, "has already forged for himself a chain stronger than any you can make. While we have been occupied in catching him, his two sons, Ali and Nari, transformed into wolves by their evil passions, have fought with and destroyed each other. With their sinews we must make a chain to bind their father, and from that he can never escape."
It was done as Asa Odin said. A rope was made of the dead wolves' sinews, and as soon as it touched Loki's body it turned into bands of iron and bound him immovably to the rock. Secured in this manner the gods left him.