At Fort Yukon there lives an ugly, mad, and cruel man by the name of Beauty Smith. Nature was not kind to him in looks, or in life. White Fang instinctually distrusts this "monstrosity."
Beauty Smith wants to buy White Fang, but Gray Beaver refuses to sell him. Beauty circumvents Gray Beaver's refusal by offering him some whiskey. Gray Beaver becomes so addicted to liquor that he drinks his money away. Broke, he is forced to sell White Fang to Beauty Smith.
Beauty Smith subverts Gray Beaver's mastery over White Fang by conning Gray Beaver into becoming an alcoholic. This cunning scheme shows the evil and manipulative quality of Beauty Smith's character.
Gray Beaver ties a leather thong around White Fang's neck and hands him over to Beauty Smith, who beats White Fang severely with his club and ties him to a stick in the ground.
The club, stick, and leather thong symbolize the shift in White Fang's ownership to Beauty, as well as Beauty's assertion of total power over White Fang.
White Fang feels like he still belongs to Gray Beaver, so he escapes from Beauty and returns to his former owner. Gray Beaver takes him back to Beauty Smith, who beats him. This happens several times, until Gray Beaver stands by to watch Beauty lash White Fang with a whip. Thoroughly beaten, White Fang follows at Beauty's heels back to the fort. He regards his new owner as a "mad god."
Beauty uses violence and bondage to control White Fang, but it does entirely subdue his loyalty to Gray Beaver. Only Gray Beaver's inaction is enough to signal to White Fang that he must obey his new owner. White Fang's nickname for Beauty, "mad god", underlines both Beauty's cruelty and his power.