Peter Rabbit and Johnny Chuck had gone down to the Smiling Pool for a call on their old friend, Jerry Muskrat. But Jerry was nowhere to be seen. They waited and waited, but no Jerry Muskrat.

"Probably he is taking a nap in that big house of his," said Johnny Chuck, "and if he is we'll have to sit here until he wakes up, or else go back home and visit him some other time."

"That's so," replied Peter. "I don't see what he has his house in the water for, anyway. If he had built it on land, like sensible people, we might be able to waken him. Funny place to build a house, isn't it?"

Johnny Chuck scratched his head thoughtfully. "It does seem a funny place," he admitted. "It certainly does seem a funny place. But then, Jerry Muskrat is a funny fellow. You know how much of the time he stays in the water. That seems funny to me. I suppose there is a reason for it, and probably there is a reason for building his house where it is. I've found that there is a reason for most things. Probably Jerry's great-great-grandfather built his house that way, and so Jerry does the same thing."

Peter Rabbit suddenly brightened up. "I do believe you are right, Johnny Chuck, and if you are, there must be a story about it, and if there is a story, Grandfather Frog will be sure to know it. There he is, over on his big green lily-pad, and he looks as if he might be feeling very good-natured this morning. Let's go ask him why Jerry Muskrat builds his house in the water."

Grandfather Frog saw them coming, and he guessed right away that they were coming for a story. He grinned to himself and pretended to go to sleep.

"Good morning, Grandfather Frog," said Johnny Chuck. Grandfather Frog didn't answer. Johnny tried again, and still no reply.

"He's asleep," said Johnny, looking dreadfully disappointed, "and I guess we'd better not disturb him, for he might wake up cross, and of course we wouldn't get a story if he did."

Peter looked at Grandfather Frog sharply. He wasn't so sure that that was a real nap. It seemed to him that there was just the least little hint of a smile in the corners of Grandfather Frog's big mouth. "You sit here a minute," he whispered in Johnny Chuck's ear.

So Johnny Chuck sat down where he was, which was right where Grandfather Frog could see him by lifting one eyelid just the teeniest bit, and Peter hopped along the bank until he was right behind Grandfather Frog. Now just at that place on the bank was growing a toadstool. Peter looked over at Johnny Chuck and winked. Then he turned around, and with one of his long hind-feet, he kicked the toadstool with all his might. Now toadstools, as you all know, are not very well fastened at the roots, and this one was no different from the rest. When Peter kicked it it flew out into the air and landed with a great splash in the Smiling Pool, close beside the big green lily-pad on which Grandfather Frog was sitting. Of course he didn't see it coming, and of course it gave him a great start.

"Chug-a-rum!" exclaimed Grandfather Frog and dived head first into the water. A minute later Peter's sharp eyes saw him peeping out from under a lily-pad to see what had frightened him so.

"Ha, ha, ha!" shouted Peter, dancing about on the bank. "Ha, ha, ha! Grandfather Frog, afraid of a toadstool! Ha, ha, ha!"

At first Grandfather Frog was angry, very angry indeed. But he is too old and too wise to lose his temper for long over a joke, especially when he has been fairly caught trying to play a joke himself. So presently he climbed back on to his big green lily-pad, blinking his great, goggly eyes and looking just a wee bit foolish.

"Chug-a-rum! I might have known that that was some of your work, Peter Rabbit," said he, "but I thought it surely was a stone thrown by Farmer Brown's boy. What do you mean by frightening an old fellow like me this way?"

"Just trying to get even with you for trying to fool us into thinking that you were asleep when you were wide awake," replied Peter. "Oh, Grandfather Frog, do tell us why it is that Jerry Muskrat builds his house in the water. Please do!"

"I have a mind not to, just to get even with you," said Grandfather Frog, settling himself comfortably, "but I believe I will, to show you that there are some folks who can take a joke without losing their temper."

"Goody!" cried Peter and Johnny Chuck together, sitting down side by side on the very edge of the bank.

Grandfather Frog folded his hands across his white and yellow waistcoat and half closed his eyes, as if looking way, way back into the past.

"Chug-a-rum!" he began. "A long, long time ago, when the world was young, there was very little dry land, and most of the animals lived in the water. Yes, Sir, most of the animals lived in the water, as sensible animals do to-day."

Peter nudged Johnny Chuck. "He means himself and his family," he whispered with a chuckle.

"After a time," continued Grandfather Frog, "there began to be more land and still more. Then some of the animals began to spend most of their time on the land. As there got to be more and more land, more and more of the animals left the water, until finally most of them were spending nearly all of the time on land. Now Old Mother Nature had been keeping a sharp watch, as she always does, and when she found that they were foolish enough to like the land best, she did all that she could to make things comfortable for them. She taught them how to run and jump and climb and dig, according to which things they liked best to do, so that it wasn't very long before a lot of them forgot that they ever had lived in the water, and they began to look down on those who still lived in the water, and to put on airs and hold their heads very high.

"Now, of course, Old Mother Nature didn't like this, and to punish them she said that they should no longer be able to live in the water, even if they wanted to. At first they only laughed, but after a while they found that quite often there were times when it would be very nice to be at home in the water as they once had been. But it was of no use. Some could swim as long as they could keep their heads above water, but as soon as they put their heads under water they were likely to drown. You know that is the way with you to-day, Peter Rabbit."

Peter nodded. He knew that he could swim if he had to, but only for a very little way, and he hated the thought of it.

"Now there were a few animals, of whom old Mr. Muskrat, the grandfather a thousand times removed of Jerry Muskrat, was one, who learned to walk and run on dry land, but who still loved the water," continued Grandfather Frog. "One day Old Mother Nature found Mr. Muskrat sitting on a rock, looking very mournful.

"'What's the matter, Mr. Muskrat?' she asked.

"Mr. Muskrat looked very much ashamed as he finally owned up that he was envious of his cousins and some of the other animals, because they had such fine houses on the land.

"'Then why don't you build you a fine house on the land?' asked Old Mother Nature.

"Mr. Muskrat hesitated. 'I--I--love the water too well to want to stay on land all the time,' said he, 'and--and--well, I was put in the water in the first place, and I ought to be contented with what I have got and make the best of it.'

"Old Mother Nature was so pleased with Mr. Muskrat's reply that right away she made up her mind that he should have a finer house than any of the others, so she took him over to a quiet little pool, where the water was not too deep and she showed him how to build a wonderful house of mud and rushes and twigs, with a nice warm bedroom lined with grass above the water, and an entrance down under the water, so that no one except those who still lived most of the time in the water could possibly get into it. None of his friends on land had such a big, fine house, and Mr. Muskrat was very proud of it. But with all his pride he never forgot that it was a reward for trying to be content with his surroundings and making the best of them.

"So from that day to this, the Muskrats have built their houses in the water, and have been among the most industrious, contented, and happy of all the animals. And that is why Jerry Muskrat has built that fine house in the Smiling Pool and has so few enemies," concluded Grandfather Frog.

Peter Rabbit drew a long breath, which was almost a sigh. "I almost wish my grandfather a thousand times removed had been content to stay in the water, too," he said.

"Chug-a-rum!" retorted Grandfather Frog. "If he had, you wouldn't have the dear Old Briar-patch. Be content with what you've got,"

"I think I will," said Peter.