‘But this is terrible!’ cried Frodo. ‘Far worse than the worst that I imagined from your hints and warnings. O Gandalf, best of friends, what am I to do? For now I am really afraid. What am I to do? What a pity that Bilbo did not stab that vile creature, when he had a chance!’

‘Pity? It was Pity that stayed his hand. Pity, and Mercy: not to strike without need. And he has been well rewarded, Frodo. Be sure that he took so little hurt from the evil, and escaped in the end, because he began his ownership of the Ring so. With Pity.’

[...]

'He deserves death.’

‘Deserves it! I daresay he does. Many that live deserve death. And some that die deserve life. Can you give it to them? Then do not be too eager to deal out death in judgement. For even the very wise cannot see all ends. I have not much hope that Gollum can be cured before he dies, but there is a chance of it. And he is bound up with the fate of the Ring. My heart tells me that he has some part to play yet, for good or ill, before the end; and when that comes, the pity of Bilbo may rule the fate of many – yours not least. In any case we did not kill him: he is very old and very wretched. The Wood-elves have him in prison, but they treat him with such kindness as they can find in their wise hearts.’