Gnomes were Teddy's favorites. He had no brothers and sisters, so was obliged to make up games for himself, and invent people to play with him, and the people were almost always gnomes.

At the foot of the lawn which stretched before the house where he lived, stood an oak-tree. This tree was so old that the trunk was quite hollow, and Teddy could squeeze inside it by making himself small. It was here that all his wonderful adventures began. He always went to the oak every morning, vaguely hoping at sometime to catch sight of a belated elf, who might be lurking about after the day had really begun.