Tales and Legend
Guinevere this goes back to my first post. I agree I don't see a reason for the hobbits to lie. What happens is Tolkien writes in perspective. If he has Gandalf talking he thinks what would Gandalf say? It doesn't mean it is accurate or correct.
In the appendix of LOTR it stated how very few dwarves ever succumbed to sauron or morgoth, no matter what the tales of men say. Then it goes on to state how the men were jealous of the dwarves wealth. So, I think it is very possible that men found a reason to be "jealous" of hobbits so they made tales. Tolkien often writes this way which makes his characters have their own "identity" and really pulls you into the story. You just kind of got to remember when someone says something from the book that is their opinion on it doesn't mean it is true. It very well could be true but not necessarily.
Besides the example from the appendix there are no more I can think of off the top of my head where Tolkien uses the characters "perspective," but I know I've caught more than one. So if anyone else found one please feel free to add in.
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