In the Shire, Bilbo Baggins's 111th birthday party is a big deal. Because of the rich and peculiar life he leads, all of the other Hobbits are extremely interested in him. The party is also going to be thrown for his young cousin, Frodo, who is turning 33, the hobbit age of adulthood. Frodo grew up in a distant place. His father and mother died in a boat accident. Bilbo adopted him and made him his heir. Members of Bilbo's family called the Sackville-Bagginses; they were very upset when Bilbo cut them out of his will by adopting Frodo. Sam, a gardener for the Bagginses, reflects on the day Bilbo came back from his journey so many years ago to find his relatives auctioning off his stuff.
They prepare for the big party. Dawn rises the next day and Gandalf arrives with it. The wizard unloads fireworks from his lot and compliments Bilbo's garden. He asks him if he still means to carry out his plan and the aging hobbit does. Many carts roll into the field where the party is to be held. Hobbits from all over send in their acceptance to Bilbo's invitations. On the day of the party it is clear and sunny. Almost the entire town comes to hear the music and eat the amazing food. Gandalf sets off his astounding fireworks: "squibs, crackers, backarrapas, sparklers, torches, dwarf-candles, elf-fountains, goblin-barkers and thunderclaps. They were all superb." Book 1, Chapter 1, pg. 48. The party splits up to different tables for the banquet. All the guests enjoy the plentiful food but they begin to dread Bilbo's speech. The hobbit was known for inflicting his poetry on captive ears. He stands to welcome them and tells them that he invited 144 of them to equal the sum of Bilbo and Frodo's ages. Then he simply says that he is done with the party and he disappears. There is some silence, as they expect him to return, but he does not. Everyone thinks that the joke is in bad taste. They go on eating, regardless.
Bilbo disappeared by the use of his magic ring. He returns to his house at Bag End and begins to pack his stuff. He leaves a packet of stuff for Frodo. Gandalf approaches him and says that he thinks the joke should end. Bilbo feels old and wants to go to the mountains one last time. Gandalf asks if he is leaving the Ring and Bilbo hesitates. He begins to get angry at Gandalf and calls the ring his precious. The pair exchange harsh words but Bilbo refuses to leave the ring behind. He becomes more lucid and Gandalf suggests he leave the ring for Frodo. As he leaves, Bilbo almost forgets to take the ring out of his pocket, but Gandalf reminds him. The pair bid each other good bye and Bilbo leaves for good.
Frodo realizes that his uncle is really gone as Gandalf tells him to watch the ring but never use it. The next day, Frodo gives away many of Bilbo's possessions according to the instructions he left behind. Bilbo gives graciously to many of them and soon Bag End is mobbed by hobbits looking for a handout. The Sackville-Bagginses come and harass Frodo. One of them tries to steal things from the house. Sam and Frodo must wrestle away intruders looking for Bilbo's gold. They lock the door but then there is a knock. It is Gandalf. The wizard warns them again not to touch the ring. He says it has one power they all know of, but it might have more.
