The background story starts with Thorin explaining the riches and history of the mines. The mines had excellent blacksmiths, some of the best in Middle Earth. They made armor, weapons, jewelry and more. After trading with elves and humans, the dwarves's wealth grew and grew, until their tunnels almost flooded with gold. His grandfather was the king when Smaug arrived. The gold drew the dragon, as everyone knows dragons have a love for anything worth currency especially red dragons. Thorin was lucky, being an adventurous lad, he was wandering outside the mountain when Smaug arrived. The dragon drew the dwarves out, killing most of them at the main gate (Along with some people and warriors from the nearby city, Dale). Then he cutoff people heading for different exits, side tunnels, you name it. He then entered the mines, and after slaughtering the rest, he gathered all the gold, and claimed it for his own, using the mass of coins, crowns, jewels, necklaces, etc. for his bed. The survivors wept outside the mines, a safe distance away. Thorin's father and grandfather survived but didn't explain how. They all went away, and tried to make a living, but not forgetting there stolen treasure, and their home.