It has been much discussed that Wagner halted composition of Siegfried partway through Act Two (leaving Siegfried under a linden tree) in 1857, and did not begin work on Act Two until 1869, finally reaching completion in 1871. The Ring project had reached a financial crisis, and having moved on mentally to Tristan, Wagner was eager to tackle its different musical and dramatic problems. The intervening years also saw the completion and performance of Die Meistersinger.

Wagner's sense of what he wanted to do with the Ring drama changed by the time he returned to Siegfried. When he began the Ring, he had clearly seen Siegfried as the hero of the drama, but the desire to more fully explore Wotan's predicament impelled him to expand the project. Wagner's readings of the philosopher Schopenhauer also had altered his conception to a more pessimistic one, in which the power of love alone would not be sufficient to conquer the curse of greed and corruption.

An unusual aspect of this work is that the dramatic action consists almost exclusively of confrontations: in Act One, Mime and Siegfried, and the Wanderer and Mime; Act Two, the Wanderer and Alberich, Siegfried and Fafner, Mime and Alberich, Siegfried and Mime again; then Act Three, the Wanderer and Erda, the Wanderer and Siegfried, and Siegfried and Brünnhilde. In Siegfried, Wotan has resolved to desist from controlling events and calls himself the Wanderer. He is very much present throughout this drama, however, which introduces his new motive, a unique, compact creation. It is at once descending, chromatic, sequential, and cyclic, and neatly conveys the god's renunciation and his ceaseless wandering through the realm of earth.

Siegfried has many elements of a folk or fairy tale: a dark, menacing forest as a setting; a naive, but heroic foundling, a dwarf, a pet bear who makes a brief appearance, a ferocious dragon and a talking bird. The dragon (Fafner) and bird are actually given voices with which to communicate: the dragon is an offstage bass projected through a speaking tube, and the bird is a coloratura soprano. Siegfried's colorful orchestration also reflects its fairy tale milieu, with its anvil, stage horn, and double-reed effects. The "Forest Murmurs" interlude in Act Two features solo woodwinds in a delightfully tremulous imitation of nature. The addition of a high, bright, penetrating soprano voice as the Wood Bird is almost an instrumental effect as well. The essential fairy tale confrontation between Siegfried and the dragon is preceded and accompanied by a fanciful clash of motives and timbres as Siegfried's horn does vivid battle with Fafner's contrabassoon.

Inevitably, the first two acts of Siegfried are stylistically closer to Das Rheingold and Die Walküre, where the motivic material was generally concise. Act Three introduces more expansive motives associated with the Wanderer's dialogue with Erda, and Siegfried and Brünnhilde's grand concluding love duet. The use of motives looks towards the freedom and fluidity of Götterdämmerung, and they are combined in denser polyphonic textures, reflecting the technique developed in Tristan.

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