Why did Sméagol turn into a 'creature', but not Bilbo Baggins?
Déagol found the ring in a river, Sméagol stole it and then turned into a weird creature.
Bilbo did not turn into a creature when he found the ring.
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Bilbo DID become addicted to the Ring - when it came time to part with it, he had a full on freakout:
‘Everything?’ said Gandalf. ‘The ring as well? You agreed to that, you remember.’
‘Well, er, yes, I suppose so,’ stammered Bilbo.
‘Where is it?’
‘In an envelope, if you must know,’ said Bilbo impatiently. ‘There on the mantelpiece. Well, no! Here it is in my pocket!’ He hesitated. ‘Isn't that odd now?’ he said softly to himself. ‘Yet after all, why not? Why shouldn't it stay there?‘
Gandalf looked again very hard at Bilbo, and there was a gleam in his eyes. ‘I think, Bilbo,’ he said quietly, ‘I should leave it behind. Don't you want to?’
‘Well yes – and no. Now it comes to it, I don't like parting with it at all, I may say. And I don't really see why I should. Why do you want me to?’ he asked, and a curious change came over his voice. It was sharp with suspicion and annoyance. ‘You are always badgering me about my ring; but you have never bothered me about the other things that I got on my journey.’
‘No, but I had to badger you,’ said Gandalf. ‘I wanted the truth. It was important. Magic rings are – well, magical; and they are rare and curious. I was professionally interested in your ring, you may say; and I still am. I should like to know where it is, if you go wandering again. Also I think you have had it quite long enough. You won't need it any more. Bilbo, unless I am quite mistaken.’
Bilbo flushed, and there was an angry light in his eyes. His kindly face grew hard. ‘Why not?’ he cried. ‘And what business is it of yours, anyway, to know what I do with my own things? It is my own. I found it. It came to me.‘
‘Yes, yes,’ said Gandalf. ‘But there is no need to get angry.’
‘If I am it is your fault,’ said Bilbo. ‘It is mine, I tell you. My own. My precious. Yes, my precious.‘
And there we go. "My precious".
The wizard's face remained grave and attentive, and only a flicker in his deep eyes showed that he was startled and indeed alarmed. ‘It has been called that before,’ he said, ‘but not by you.’
‘But I say it now. And why not? Even if Gollum said the same once. It's not his now, but mine. And I shall keep it, I say.’
Gandalf stood up. He spoke sternly. ‘You will be a fool if you do. Bilbo,’ he said. ‘You make that clearer with every word you say. It has got far too much hold on you. Let it go! And then you can go yourself, and be free.’
‘I'll do as I choose and go as I please,’ said Bilbo obstinately.
‘Now, now, my dear hobbit!’ said Gandalf. ‘All your long life we have been friends, and you owe me something. Come! Do as you promised: give it up!’
‘Well, if you want my ring yourself, say so!’ cried Bilbo. ‘But you won't get it. I won't give my precious away, I tell you.’ His hand strayed to the hilt of his small sword.
Gandalf's eyes flashed. ‘It will be my turn to get angry soon,’ he said. ‘If you say that again, I shall. Then you will see Gandalf the Grey uncloaked.’ He took a step towards the hobbit, and he seemed to grow tall and menacing; his shadow filled the little room.
Bilbo backed away to the wall, breathing hard, his hand clutching at his pocket. They stood for a while facing one another, and the air of the room tingled. Gandalf's eyes remained bent on the hobbit. Slowly his hands relaxed, and he began to tremble.
‘I don't know what has come over you, Gandalf,’ he said. ‘You have never been like this before. What is it all about? It is mine isn't it? I found it, and Gollum would have killed me, if I hadn't kept it. I'm not a thief, whatever he said.’
‘I have never called you one,’ Gandalf answered. ‘And I am not one either. I am not trying to rob you, but to help you. I wish you would trust me, as you used.’ He turned away, and the shadow passed. He seemed to dwindle again to an old grey man, bent and troubled.
Bilbo drew his hand over his eyes. ‘I am sorry,’ he said. ‘But I felt so queer. And yet it would be a relief in a way not to be bothered with it any more. It has been so growing on my mind lately. Sometimes I have felt it was like an eye looking at me. And I am always wanting to put it on and disappear, don't you know; or wondering if it is safe, and pulling it out to make sure. I tried locking it up, but I found I couldn't rest without it in my pocket. I don't know why. And I don't seem able to make up my mind.’
‘Then trust mine,’ said Gandalf. ‘It is quite made up. Go away and leave it behind. Stop possessing it. Give it to Frodo, and I will look after him.’
... and yet, he STILL doesn't part with it:
‘You have still got the ring in your pocket,’ said the wizard.
‘Well, so I have!’ cried Bilbo. ‘And my will and all the other documents too. You had better take it and deliver it for me. That will be safest.’
And later on, Gandalf confirms it to Frodo:
‘A Ring of Power looks after itself, Frodo. It may slip off treacherously, but its keeper never abandons it. At most he plays with the idea of handing it on to someone else's care – and that only at an early stage, when it first begins to grip. But as far as I know Bilbo alone in history has ever gone beyond playing, and really done it. He needed all my help, too. And even so he would never have just forsaken it, or cast it aside. It was not Gollum, Frodo, but the Ring itself that decided things. The Ring left him.’
The only three things that differentiated them was that, first, Bilbo owned the Ring for a far less time than Gollum; second, that he didn't use it extensively; and third, that he was clearly a better, more "pure" person than Sméagol, who, if we recall, murdered his best friend the moment they found the ring.
Not only that, but we see that the Ring even became addictive to Frodo, from the first moment he dealt with it, when Gandalf advised him to try to hammer it to destroy it:
Frodo drew the Ring out of his pocket again and looked at it. It now appeared plain and smooth, without mark or device that he could see. The gold looked very fair and pure, and Frodo thought how rich and beautiful was its colour, how perfect was its roundness. It was an admirable thing and altogether precious. When he took it out he had intended to fling it from him into the very hottest part of the fire. But he found now that he could not do so, not without a great struggle. He weighed the Ring in his hand, hesitating, and forcing himself to remember all that Gandalf had told him; and then with an effort of will he made a movement, as if to cast it away – but he found that he had put it back in his pocket.
and later, when Bilbo tried to get to see the ring in Elrond's palace:
‘Have you got it here?’ he asked in a whisper. ‘I can't help feeling curious, you know, after all I've heard. I should very much like just to peep at it again.’
‘Yes, I've got it,’ answered Frodo, feeling a strange reluctance. ‘It looks just the same as ever it did.’
‘Well, I should just like to see it for a moment,’ said Bilbo.
When he had dressed, Frodo found that while he slept the Ring had been hung about his neck on a new chain, light but strong. Slowly he drew it out. Bilbo put out his hand. But Frodo quickly drew back the Ring. To his distress and amazement he found that he was no longer looking at Bilbo; a shadow seemed to have fallen between them, and through it he found himself eyeing a little wrinkled creature with a hungry face and bony groping hands. He felt a desire to strike him.
As @Mchl correctly noted, there are also examples of Frodo becoming addicted, and he was associated with the Ring less than Bilbo clock-time-wise. I omitted them from the answer since the question was about Bilbo.
Bilbo wore the ring for substantially less time than Sméagol/Gollum (who was estimated to have been a ring bearer for nearly 600 years) but even limited exposure to its presence caused his behaviour to become erratic. He was incredibly reluctant to part with the ring, periodically wore it (despite dire warnings from Gandalf) and on one occasion, he flew into a rage at the suggestion that he give it up. All of these are classic symptoms of an addiction.
In terms of the physical changes, we can see from the film that those were starting to occur too;
Remember Tom Bombadil - who does not appear in the films; which takes away an important foil to Sauron. He is not affected by the ring - Frodo puts it on and he can still see him - it bears no power over him. The ring affects the weak more - the weak of character, the weak of will, the people who do not have anything to live for; who have nothing which would dissuade them from succumbing.
It can be seen as like heroin - I always have done, I don't know if this is a common parallel that is drawn. (Tolkien meant the book to be a reaction to the rise of Nazism). If you see some junkies on the street, who look awful - they look like Gollum and they would do anything to get money for the drug - I am not saying they would kill their best friend as Gollum did, but you hear stories. It consumes them and destroys their lives.
Some people try it, or do it occasionally, it does not take over their lives - they would not do 'anything' to get it... Why? Perhaps they have more to live for. They have a stronger character. A drugs takes as much from you as you let it. When it does take people over, it usually does coincide with a loss in their lives - making them weaker.
To sum up, some people are stronger than others and have more to live for. Bilbo is a strong character, as is Frodo: they are led by their morals and a sense that they are working towards a greater good: it is this perception and understanding of a greater good that makes Frodo risk his life; that makes Gandalf sacrifice himself. This, rather than giving them a burden; something they must to; protects them; it rises them above where they would be otherwise and gives them something to live for.
Likewise; if you want to rehabilitate drug-addicts; don't fight the physical addition in isolation: fight the social addition, which is far more pernicious: if people have nothing to be clean for, they will not be able to be. The best help you can give anyone is to give them something to fight for: something that makes them feel they are part of something which is bigger than themselves, and that with others as a group, they can achieve what they could not on their own. Bilbo and Frodo are saved from being consumed by the ring because they have a much more powerful drug; they are able to fight to rid the world of an evil that has the power to harm those they care about.
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The other answers explain pretty well how Bilbo was affected by the Ring as well.
As for why Gollum was ... well ... Gollum (and Bilbo wasn't):
Bilbo used it much less than Gollum. Gollum used it to catch food and hide from orcs, so he would be wearing it quite often. Bilbo would not need to wear it, he was an upstanding member of society who probably could feed himself well. (On the other hand, Smeagol had been banished by the other hobbits, and had to fend for himself)
Additionally, Gollum is very old, it may be possible that he wasn't in such a bad state while a hundred years old.
I would say that there are many valid points given, but one truly missing item is Light. In particular, Gollum hid from the Light in all forms. When daylight became too strong after possessing the ring, he sulked around only at night. When the light of the stars became too strong, he then hid from all Light under the mountain. The stars were put into the sky by Varda (Elbereth) "In light is her power and joy" and she is even more feared by Melkor than Manwe, according to The Silmarillion. Light is then feared more so by Dark than anything else.
A hobbit, on the other hand, truly enjoys Light, in some ways even more so than the Elves or any other creature. You could say that they have a Lightness to their internal morality. Gollum had an internal darkness due to his actions (murder/theft/betrayal/lying.)
It's the basic core struggle between Light and Dark, Good and Evil.
A hobbit is not immune to Evil, as over time Bilbo's behavior had changed somewhat, at least in regards to the possessiveness/selfishness of the ring. He had possession of the ring for decades, whereas Gollum had it for hundreds of years. It's not guaranteed that Bilbo would have turned into another Gollum if he possessed the ring after 600 years - I would assert that he would take much, much longer to get to the broken down physical/mental state of Gollum.
Frodo had the ring in his every-day-control for about a year and he became obsessive. I believe this was accelerated due to the exposure to the ring wraiths and the proximity of Sauron. As he physically came closer to Darkness/Evil, and even infected by it by the stab wound, he became more obsessive of the ring than even Bilbo did. (Bilbo voluntarily walked away from it after all.)
For a short time, and in a remarkably quick fashion, Gollum started become free of the Darkness from the ring while he was being treated fairly by Frodo/Sam and as he helped them in their sacred quest. (He was exposed to Light-based behavior and reciprocated in kind.) This just goes to show that a little Light covers a lot of Dark! He wasn't even cursing the Sun when he temporarily became friendly. Given enough time exposed to Light, Gollum may have eventually been a permanent convert.
It would follow that anyone anyone exposed to the Dark is negatively affected by it, and anyone exposed to the Light is positively affected by it (to a greater degree than Darkness.) The amount of the affect is determined by comparing the current internal state of the person involved, the amount of the Lightness or Darkness involved, and the willingness/desire of the person to accept the gift/curse.
A side - the ring didn't initially work on Tom Bombadil. He was so full of Light that the Darkness had no affect. In my opinion, he was a hobbit version of a Maiar. Even Tom would be corruptible given enough effort by Darkness. (He could possibly be immune to Sauron, but not Melkor.)
We could further discuss Galadriel's temptation, but to cut this short, given the formula above, the higher the status in a society the more easily tempted for Darkness due to the individual's desire for power. To relate to today's events - we would all be likely better served by plucking an individual off the street at random to become president than spending a billion dollars on a single campaign. The higher the stature, the greater the corruption. In JRR Tolken's experience, nothing likely exhibited it more than Adolph Hitler and Joseph Stalin who both killed millions. Ultimate power leads to extreme corruption.
Note - my first answer here...I stumbled across this interesting question while viewing Stack Overflow and decided to compose what I have typically inferred in regards to this topic.
Pure speculation here, but behind the scenes, so to speak, Sauron had slowly been regaining power, so perhaps there was less outside influence on Bilbo (during the pre- LOTR time) than on Frodo.
I'm tempted to suggest that, in addition to the time difference, Smeagol was living alone, isolated not only from his family but even from vaguely related species, while Bilbo had the emotional support of his entire village :-).
I would suggest that "addicted" is the wrong terminology here. "Possessed by" or "obsessed with" the Ring would be a better description of what happened. (In the book, I believe it is described as the ring having a "hold" on the character.)
The Ring in LOTR is frequently described as an entity all of its own. It speaks of the Ring seeking to return itself to Sauron, and that it is using the various ring bearers to do so.
Gollum held the ring for significantly longer than Bilbo, and therefore its hold on him was more considerable. It warped his personality from Smeagol to that of Gollum. He was possessed by such a desire to keep it secret that he hid himself in the cave and became the creature Gollum.
Bilbo, in the years he possessed the ring, did not seem to wear it particularly often. (At least this is implied in the books.) And, notably, even when it was time to give up the ring, it seemed to work its way back to his hand or pocket numerous times. (See above)
In fact, the final time he puts the ring on, it is described as practically leaping onto his finger.
Thus the ring seems to have a mind of its own, and would be more of a possession than an addiction.
One thing that people seem to be missing here is the condition of the ring bearer. Many of the other answers are true and right!
But consider these points:
as Gollum wormed his way under the mountains, he grew gaunt and pale - obviously his body was missing things to get healthy - there fore the Ring supplied some things to him. This changed him utterly. He lost the ring in the year Third Age 2941.
Bilbo, not only having the ring 1/10 the time did not (as stated above) use the ring as often. But more telling IMHO is that he was well fed, comfortable, and most importantly, Sauron was not yet searching for the ring. It is only when Gollum leaves the mountains and is caught does Sauron learn the One Ring had been found. As Sauron gained power he searched for the ring, it began trying to get back to him - thus Bilbo telling Gandalf "it has been growing on my mind lately".
Frodo had received the ring in TA 3001, and he was well fed and comfortable. The hobbits left the Shire in TA 3018. He only had large lapses of control of himself when in relative close proximity to the Dark Lord's power; i.e in the Shire, on Weathertop, etc. As Frodo was wounded on Weathertop and then began to get closer and closer to Mordor, the ring's power grew and its hold on Frodo did too. This was especially evident as they grew hungrier and had less energy: Frodo's will power was taken up more and more in resisting the ring. Finally being half-starved, in Mt. Doom in the middle of Mordor he succumbed. Gandalf gave him credit that he resisted the ring better than most. You can see how it affected both Boromir and Denethor and neither ever touched it. Galadriel herself was tempted when the company was in Lothlorien.
Smeagol withdrew from society and spent around 600 years in a cave with only the Ring for company -- far longer than his normal lifespan. As a result, his body changed: He skin became pale, his body gaunt, and his eyes became bigger to help him see better in the dark.
After all that time in a cave, alone, living off of scraps, he became even more eccentric; and couldn't stand sunlight or "normal" food. Gollum was the product of spending so much time in the presence of something dark and corrupting.
Bilbo, on the other hand, still lived in the Shire (he didn't need to run away, like Smeagol did) and only spent 60 years with in the company of the Ring. Despite this, the Ring was growing in power while he held it, and even though it didn't have time to corrupt his body and mind as completely as Smeagol's, it did take its toll on him.
Because it's the ring that controls the character. Whoever had it for long would tend to fall in love with the ring and do everything in their power to not lose it. Since Bilbo only had it for a short time, shorter than that of Gollum, that's why he is not that much in love with the ring. If you watch the movie carefully, Bilbo does fall in love with the ring as time goes on. And he has a hard time giving it up at the end.
First off, I didn't read all the comments, so sorry about that. But if I remember correctly Smeagol is part of the 'River Folk' who aren't necessarily Hobbits.
That could explain the difference.. and of course the fact that he killed to obtain the ring and spent many years with it in exile (and the dark).