The title character, after a lengthy and time-consuming series of deals and chores by the youngster - to gain the trust of the older farmer or rancher- well to make it short the title character DIES and dies horribly in childbirth- the death of an Animal in childbirth is an unusual plot device. It is stated a horrible noise came from the barn. The plot obviously goes downhill from there. The death of an animal is a not-unknown plot device in some juvenile sagas- as diverse as Old Yeller (rabid dog shot by adult character), The Rambunctious Doberman ( short story, later radio drama, the dog is killed in a rather mysterious accident,) and some others. Not in the jolliest tradition of kiddy tales.
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The climax of "The Red Pony" occurs when Jody's beloved pony, Gabilan, tragically dies while working in the fields. This event marks a turning point in the story as Jody faces loss and begins to mature as he learns about the harsh realities of life and death.