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I have a lurking suspicion that Leonidas W. Smiley is a myth; that my friend … only conjectured that, if I asked old Wheeler about him, it would remind him of his infamous Jim Smiley, and he would go to work and bore me nearly to death with some infernal reminiscence of him …. If that was the design, it certainly succeeded.

This passage at the very beginning of the story sets up everything that follows as an elaborate practical joke played on the narrator by his friend. The admission by the narrator that he suspects he’s being pranked sets the tone of whimsy and humor for the rest of the piece. It is also the first of many pranks and cons by tricksters in the story, which is a motif throughout.

I found Simon Wheeler dozing comfortably by the bar-room stove of the old, dilapidated tavern in the ancient mining camp of Angel's….

The narrator describes Simon Wheeler as he finds him, as well as the setting for the story, during the plot’s exposition. It is significant that the narrator uses the term ancient to describe Angel’s Camp. Angel’s Camp is at most 18 years old at the time of the story's publication, so ancient is almost certainly used tongue-in-cheek and adds to the humor. But the description also implies that Wheeler’s stories make up the history of the place.

To me, the spectacle of a man drifting serenely along through such a queer yarn without ever smiling, was exquisitely absurd.

This quote comes just before Wheeler begins his tales. It reveals the narrator’s perspective and that he has a particular sense of humor. The narrator’s perspective here is important for the context and tone of the rest of the piece. It invites other listeners to appreciate and laugh along with the narrator at the absurdity of Wheeler’s stories.

And then Smiley says, “That's all right that's all right if you'll hold my box a minute, I'll go and get you a frog.”

This quote comes during the climax of the story, when Jim Smiley makes his fatal mistake. Smiley’s words here help drive the plot because they reveal his key mistake which turns everything on its head. Throughout the tale, Smiley is the one to lure people into overconfidence so they will take a bad bet. But here, Smiley himself gets excited and rushes off to get the stranger a frog, which shows that Smiley is the overconfident one, and his overconfidence is his undoing.

Next section The Triumph of the Common Person over the Elite

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