Hiding behind one of the largest barrels Bilbo discovered the
trapdoors and their use, and lurking there, listening to the talk of
the king’s servants, he learned how the wine and other goods came up
the rivers, or over land, to the Long Lake. It seemed a town of Men
still throve there, built out on bridges far into the water as a
protection against enemies of all sorts, and especially against the
dragon of the Mountain. From Lake- town the barrels were brought up
the Forest River. Often they were just tied together like big rafts
and poled or rowed up the stream; sometimes they were loaded on to
flat boats.
     When the barrels were empty the elves cast them through the trapdoors,
opened the water-gate, and out the barrels floated on the stream,
bobbing along, until they were carried by the current to a place far
down the river where the bank jutted out, near to the very eastern
edge of Mirkwood. There they were collected and tied together and
floated back to Lake-town, which stood close to the point where the
Forest River flowed
     For some time Bilbo sat and thought about this water-gate, and
wondered if it could be used for the escape of his friends, and at
last he had the desperate beginnings of a plan.