To say that Older Hobbits were displeased would be an understatement. Lobelia and Lotho Sackville-Baggins were already displeased about the whole 'coming back' business, let alone having a miniature Wyrm suddenly appearing in the Shire. They aired their grievances quite publicly.
The Tooks and the Brandybuck's were certainly alright about the entire development- Other Baggins weren't so much, though Bilbo's aunts and uncles were willing to back their nephew in this case. Some of his cousins even, were willing to back him up, stoutly trusting Bilbo.
The argument raged on across the Shire, in a rather fierce battle of words. It did not, however, spill out of the Shire. They were just simple hobbits, no need to bother anyone else about this slightly pesky dragon business and all.
The Gamgee's, bless Gaffer's old, crumdegy heart, solidly backed Bilbo so long as the Dragon didn't "Mess with the garden I've been tending. We've got a boy on the way, an' I could be using the help."
It wouldn't matter much- the Gamgee's, at least Gaffer, was unlettered and they weren't Gentlehobbits. But the old hobbit had his own brand of influence- he and his kin tended to many gardens and fields of Gentlehobbits, and everyone knew once you claimed their loyalty, they would follow you to the ends of the middle-earth and back again.
Whitfoot, the Mayor at the time, was worried about the whole deal- "I'm not sure Bilbo, after all, Dragons go out in search of treasure do they not? There's little gold in the Shire, and our Silverware has a habit of disappearing when the Sackville's come by already without more disappearances."
So the battle raged across the Shire as the Dragon quickly grew. Bilbo dispared of ever feeding the dragon enough- Green's didn't cut it, and the meat Bilbo could buy was expensive.
Then one day the dragon off and vanished without warning, Bilbo had panicked, and even though no one knew what they were supposed to do with a dragon, a search party was quickly formed and sent out.
Small forms moved swiftly through the green lands holding torches above their heads in search of the dragon. They found it, staring hard at a particularly pesky rabbit warren that had been eating many crops in the Shire. At its feet lay a pile of slightly bloody fur. A few of the hobbit children nearby explained that the Dragon ("And oh, isn't he the prettiest thing you evar did see?") had been off and eating those pesky rabbits, and he was so much fun to play with, and oh, would they be able to play with him again?
The Dragon was then placed in the same category that Gandalf was often placed in- Disreputable and hardly proper but for the sake of the children, they would tolerate him. The Tooks claimed First Play.
Bilbo was just glad that the Dragon had learned how to hunt- now if he could only tell the Dragon that bringing home freshly killed rabbit without warning wasn't good… Then again, after Lobelia fainted at the sight and forced Lotho to drag her out…
Bilbo smiled at the dragon, rubbing its back along the ridge of hard scales, where the dragon enjoyed it most. "I suppose I can forgive you this once, hmm Little Wyrm?"
The dragon smirked back, lizard eyes glinting as it chirruped, "Little Wyrm!"
Bilbo about near fell out of his seat.
"What did you just say?"
The dragon's wings, once proudly spread, drooped slightly, miserably folding back along It's back. "Little Wyrm?"
"Ah, you're learning how to speak quite early, aren't you?" Speaking of which, Bilbo ought to give the little one a proper Name, shouldn't he? "Now then, a name for you, hmmm?"
"Little Wyrm! Little Wyrm!"
"Nonsense, that's what you are, hardly a good name… unless… Well, the elven word for you would be angulóke, but that isn't quite right for you. I'm not sure about Dwarvish- they didn't teach me much. Hmm, but just calling you Angulóke is hardly proper either…"
The dragon's head twisted curiously to look at him, filled with a Took's sense of curiosity. It's red scales, like it's parents Smaug, glittered in the sunlight. Bilbo settled back, looking thoughtful. "There was Glaurung, the first dragon, Ancalagon was the first winged-dragon, and Scatha the cold-drake. But Smaug was your parent I believe, and Gandalf claimed he was the last great dragon of Middle-earth. Then again, I guess Smaug was less male and more female, hmmm?"
The dragon chirruped, whistled, and clicked softly. Bilbo smiled at it, wondering what to do next- it was only a few weeks old, and already speaking! Would it hit its full size in another month or so? He sincerely hoped not- there was no hole in all of the Shire to hold a full-grown Dragon.
But names- first, names. "Ancalagon is a good name, do you not think? Ancalagon Baggins."
The dragon practically glowed with pride as Bilbo named It, chirruping softly. Bilbo hoped that the Dragon would do far better then the one it was named after. Ancalagon Baggins tugged at his clothing, and took to the air to sail to where a small pile of blankets lay.
There it curled on top, looking like it had found its treasure and gold in soft fleece comforters and thick quilts. Bilbo smiled at the thought, of a gigantic dragon with a horde of blankets and fleece. There were a couple of rabbit skins mixed within, the soft fluffiness a warm comfort.
Ancalagon looked like the most comfortable and contented dragon that had ever existed. As if sensing his thoughts, Ancalagon tucked its head beneath a wing like a chicken would, and quickly fell asleep.
A small gaggle of Hobbit Children made their way up the path, tossing a ball back and forth. "Mr. Baggins! Can the Wyrm come out to play?"
"Ancalagon," Bilbo said with a gesture to confirm the Dragon's name, "Is sleeping right now."
The pile of lazy red scales didn't so much stir or twitch when the children looked to it. It did stir when one of the smaller children tossed the ball to it, a tail whipping out to bat the ball back. The children giggled as a triangular head rose, fixing them with beady eyes. The dragon hissed and took to the air, carrying the ball in its sharp claws- Bilbo called after It, "Play nicely Ancalagon!"
The children scattered shrieking and giggling in delight, barely avoiding trampling the garden as Gaffer's rough, angry voice began rising in a shout to mind the vegetables. The dragon dove down to hover above the vegetables and growing green things to hiss at the children, and (gently) chase them away.
Gaffer's rough, sour face broke into an almost smile at Ancalagon, as he said, "Good work." Then, he bent his back into digging up the weeds attempting to choke the garden. The dragon, pleased with its 'protection' of its 'treasure' went back to lazily chasing the children, making quick loops in the sky.
Bilbo smiled at the sight, and settled down with his pipe to watch the world pass him by- and start planning a quick visit to Rivendale. Hopefully the Elves there would be willing to lend him their library.
This time when he left, he would leave a very big notice on the door- Leaving only for a short while. Do not auction my things thank you. The door has been locked. Only Brandybuck's locked their doors at night, but Bilbo was beginning to see the wisdom in such actions.
Dragon and children played in sunlight as Bilbo Baggins considered many important things, before at last discarding them for the simple pleasure of smoking a pipe in the slowly waning summer.