The New Year brings little cheer for the riverbankers, as the approaching railway threatens to destroy everyone's homes, and even Badger seems to have given up hope. Despite this, Toad insists on holding a New Year's celebration at the Hall, and on providing the entertainment himself (by playing the bagpipes very badly and reading with an exaggerated accent from the poetry of Rabbie Burns). Mole's cousin Auberon is in attendance. During the evening two messengers bring news to the group: the first concerning the weasels and a stolen traction engine; the second concerning new developments on the railway.
