Prose Edda Captured

What is the reason for gold being called otter-payment? It is
said that when the Æsir went to explore the whole world — Odin
and Loki and Hænir—they came to a certain river and went along
the river to a certain waterfall, and by the waterfall there was an
otter and it had caught a salmon in the waterfall and was eating it
with eyes half-dosed. Then Loki picked up a stone and threw it at
the otter and hit its head. Then Loki was triumphant at his catch,
that he had got in one blow otter and salmon. Then they picked up
the salmon and the otter and took them with them, then came to a
certain farm and went in. The farmer that lived there was called
Hreidmar. He was a person of great power and was skilled in magic.
The Æsir asked if they could have a night’s lodging there and said
they had plenty of provisions with them and showed the farmer
their catch. And when Hreidmar saw the otter, he called his sons
Fafnir and Regin and said their brother Otter had been killed and
also who had done it. Now the family went up to the Æsir, and
took them prisoner and bound them, and then revealed about the
otter, that he was Hreidmar’s son. The Æsir offered a ransom for
their lives, as much wealth as Hreidmar himself wished to decide,
and these terms were agreed between them and confirmed with
oaths. Then the otter was skinned. Hreidmar took the otter-skin
and announced to them that they were to fill the skin with red gold
and then cover it entirely, and these were to be the terms of their
settlement. Then Odin sent Loki into the world of black-elves and
he came across a dwarf called Andvari. He was a fish in a lake, and
Loki captured him and imposed on him as a ransom all the gold he
had in his cave. And when they came into the cave the dwarf
brought out all the gold he had, and that was a substantial amount
of wealth. Then the dwarf slipped under his arm one small gold
ring. But Loki saw and told him to hand over the ring. The dwarf
asked him not to take the ring from him, saying he could multiply
wealth for himself from the ring if he kept it. Loki said the dwarf
was not going to keep one penny and took the ring from him and
went out, and the dwarf pronounced that this ring should be the
deadly destruction of whoever possessed it. Loki said that he was
happy for that to be so, and that it would have power to remain
valid, this pronouncement, inasmuch as he would bring it to the
ears of those who took possession of the ring. He went off back to
Hreidmar’s and showed Odin the gold. And when Odin saw the
ring he found it beautiful and removed it from the treasure, and
started paying Hreidmar the gold. The latter then filled the
otter-skin as tightly as he could and stood it up when it was full.
Then Odin went up to it and began covering the skin with the
gold. Then he told Hreidmar to see whether the skin was now
fully covered, and Hreidmar looked and examined closely and
saw one whisker and said it must be covered, otherwise it was the
end of any agreement between them. Then Odin took out the ring
and covered the whisker and declared that they were now quit of
the otter-payment. And when Odin had taken his spear and Loki
his shoes and they had no need to have any more fear, then Loki
pronounced that it should remain valid, what Andvari had pro-
nounced, that the ring and the gold should be the death of him
who possessed it, and this was subsequently fulfilled. Now it has
been told why gold is called otter-payment or the Æsir’s forced
payment or strife-metal.


- Prose Edda, Skaldskaparmal