"In this circumstance(the strain of which only those who have marked, say, five hundred handwritten scripts on the same subject will fully appreciate) Tolkien turned over a page to find that a candidate:had mercifully left one of the pages with no writing on it (which is the best thing that can possible happen to an examiner) and I wrote on it: 'In a hole in the ground there lived a hobbit. ' Names always generate a story in my mind. Eventually I thought I'd better find out what hobbits were like. But that's only the beginning." Pg 1-2. 

"Shortly after The Hobbit came out, on 16th January 1938, the Observer printed a letter from an unknown correspondent suggesting some evidently unconvincing connections between hobbits and other real or rumoured furry creatures... good - humouredly denying the suggestions, and rejecting both furriness and rabbits 'my hobbit... was not furry, except about the feet. Nor indeed was he like a rabbit... Calling him 'a nassty little rabbit' was a piece of vulgar trollery, just as 'descendant of rats' was a piece of dwarfish malice.' ...But whatever else might be said about them, hobbits had to be allowed to be people; not spirits, not animals, but people." Pg 4-5

"It is in fact, in everything except being underground (and in there being no servants), the home of a member of the Victorian upper-middle class of Tolkien's nineteenth-century youth, full of studies, parlours, cellars, pantries, wardrobes, and all the rest...Bilbo must live after the introduction of a postal service - our familiar system dates, in England, from 1937... But the fact is that hobbits are, and always remain, highly anachronistic in the ancient world of Middle-earth." Pg 5-6

"(...just as Tolkien, aware that his own name was originally German, tended to identify himself with his mother's Worcestershire family name of Suffield, Letters, p. 12)." Pg 11

"In the original Old Norse, this contains rather more than sixty names, mostly strung together as a simple rhythmic list, repeated in slightly different in Snorri Sturluson's thirteenth-century guide to Norse mythology, the Skaldskáparmal...Eight of the thirteenth dwarf-names of Tolkien's Thorin and Company are here along with the name of Thorin's relative Dain, his grandfather Thror, and something close to his father Thrain...However Tolkien did not just copy the 'Tally of the Dwarves', or quarry it for names. He must rather have looked at it, refused to see it, as most scholars do, as a meaningless or no longer comprehensible rigmarole, and instead asked himself a string of questions about it." Pg 16

"As for Gandálfr, or Gandalf, Tolkien seems to have worked out a more complex explanation. In early drafts of The Hobbit Gandalf was the name given to the chief dwarf, while in the first edition what Bilbo sees that first morning is just 'a little old man'...Tolkien made significant changes in both the second and third editions, 1951 and 1966, some of them discussed later on - Gandalf has become 'an old man with a staff'..." Pg 17

"None of these divisions, of course, is vital, and it is quite likely that Tolkien did not plan them or pay any attention to them. They do show, however, how Tolkien fed in the fairy-tale elements one at a time, introducing them separately for many chapters...The other aspect of this one-at-a-time presentation, though, is the steady rise of Bilbo's status, and the increasing evenness of the confrontation between the modern values he represents and the ancient ones he encounters. " Pg 21

"The Hobbit itself had been published almost by accident, with a pupil who knew of its existence recommending it to a publisher's representative who encouraged him to send it to Stanley Unwin, and Unwin sr...Once it had come out, had been acclaimed, and Unwin had not unreasonably asked for a sequel, Tolkien must have wondered what to do. The texts he had on hand, and on which he had been working for twenty years already, were versions, in poetry and prose, of the complex of tales associated with the Silmarillion... Told as much, Tolkien, we now know, began work on the sequel which was to turn into The Lord of the Rings some time between 16th and 19th December 1937, in the university's Christmas vacation." Pg 53

"Yet however neat the final product, at that point in late 1937, and for long afterwards, Tolkien had no clear plan at all, certainly nothing even remotely like the schema outlined at the start of this chapter. It is an interesting, and for any intending writer of fiction rather an encouraging experience, to read through the selections from Tolkien's many drafts now published in volumes VI-IX of The History of Middle-earth (The Return of the Shadow, The Treason of Isengard, The War of the Ring, and Sauron Defeated), and to note how long it was before the most obvious and seemingly inevitable decisions were made at all. Tolkien knew, for instance, that Bilbo's ring now had to be explained and would become important in the story...However Christopher Tolkien notes that more than two years after his father started work on the sequel, he was still 'without any clear conception of what lay before him." Pg 53-54

"Tolkien did in fact have several resources when he began work in December 1937. One was the backlog of material which would in the end become the Silmarillion. As mention above, he had already sent some of this to Stanley Unwin, and though it had been rejected for separate publication, he could clearly continue to use it, as he had here and there in The Hobbit, to give a sense of depth and background to his main story. Thus Aragorn, in the chapter ' A Knife in the Dark' (I/11), not only sings a song of Beren and Lúthien, but also gives an extensive paraphrase of the legend concerning them, which had formed a major pat of the package rejected by Unwin."