As a usurer, Tom develops a reputation as a man quite willing to lend money to those in need, which earns him popularity because during the time of a former governor, Governor Belcher, money had been scarce and paper credit was the norm. Hard times had followed.
Now, though, adventurers, land-jobbers, speculators, merchants, and all sorts of people come to borrow money from Tom to begin new endeavors. Tom would eventually squeeze them dry with interests rates, bonds, and mortgages, and acquired even more wealth for himself. He builds himself a vast house with his earnings, but because he is still frugal, he does not furnish it. He sets himself up a carriage, but nearly starves the horses that pull it.
As he grows older, though, Tom begins to think about his life a bit more, and realizes that while he has enjoyed great pleasure in this life, because of what he's done he might not have the same luxury in the next life. Even though it was part of the bargain he made with Old Scratch, he decides to try and cheat himself out of the conditions and begins a life of religious zeal. He attends church more than anyone else, prays incessantly, and keeps a huge Bible in his home. Tom becomes as known for this as he had been known before for his riches.
Despite his efforts, though, Tom has a lingering feeling that the Old Scratch, the devil, will return to claim him. He keeps a Bible in his coat pocket at all times so as not to be caught unawares. He does not, however, mend his bad business practices, and continues to extort money from poor speculators. Legend has it that, assuming the world would be turned upside down when the devil came for him, he saddled and buried his horse with its feet sticking up so that he'd be able to try and ride away from Old Scratch. This has not been confirmed, however.
One day a poor land-jobber who Tom had dealt with in the past came to his house to beg for a few months’ indulgence because he didn't yet have the money he needed to repay his loan. Tom is angry and refuses to wait any longer. The land-jobber continues to plead and reminds Tom that he has made so much money off of him already. Tom responds with "The devil take me if I have made a farthing!" and that is the beginning of the end.
There's a knock at his door; it's a black man waiting with a black horse. The man tells Tom he's come for him; Tom realizes he's been caught off guard without a Bible on his person. A countryman reports the sight of the man whisking Tom away on the horse in the middle of a thunderstorm heading toward the Indian fort, and Tom never returns.
Trustees were appointed to handle Tom's possessions, but they realize that he no longer has any; as soon as he was carried away all of his money, stocks, and bonds vanished, his house burned down, and his horses were reduced to mere skeletons. According to the narrator, the story of "The Devil and Tom Walker" has become a proverb all across New England.
"The Devil and Tom Walker" is first and foremost a satirical account of the perils of greed, and in this section, Tom pays the price for his greed that never ended. This satire is very relevant to the time period in which Irving wrote this story, as the early 1800s were a time of constant land expansion and industrial growth. American landowners and businesspeople consistently coveted more even though they already had plenty, just like Tom Walker does in this story.
The final section of the story satirizes not only greed, but also religious devotion for the wrong reasons. People—Tom Walker a shining example—often wrongfully believe that outward displays of piety are enough to atone for hidden lives full of sin, and the story clearly implies that this is not the case. Tom Walker is the ultimate hypocrite in this section, praying and carrying around a Bible yet still seeking to obtain the wealth of others. In the end, Tom's false front of religious zeal is not enough to save him from the fate that he sealed for himself as soon as he accepted the devil's bargain.
This story teaches readers a number of important lessons all relating to greed, wealth, and bargaining. It certainly reflects the common mantra "money does not buy happiness." After becoming a usurer, Tom Walker has all the money in the world and yet he is still grouchy, not particularly liked, and with his wife gone, without any sort of personal relationships whatsoever. Towards the end of his life he spent all his time worrying about what would happen to him in the next one; his money was not enough security for him. Despite his wealth, Tom's greedy nature caused him to lead a life that one could only call miserable.
This story also speaks volumes about empathy, values, and morality. Tom Walker valued wealth above all else—above his wife's life and above the poor clients he constantly bled dry. He was incapable of empathy. He started on a moral decay as soon as the story began, and readers watched as his conscience deteriorated little by little until finally he had none left, and his only concern was being punished in the afterlife. The story relays the important message that people are worth much more than material wealth, something that Tom Walker never learned.
At the end, Tom Walker and Old Scratch are one and the same. Just like the devil himself, Tom was greedy and unforgiving, making impossible bargains with his clients exactly as Old Scratch bargained with him. It is now impossible to differentiate between the protagonist and antagonist of this story; Tom's deal with the devil has turned him into the devil.
The typical Faustian bargain tale dictates that the protagonist must trade away his soul to the devil for something that he desires. It becomes clear that the end of this story that Tom quite literally agreed to trade his soul away, because he knows that the devil will come for him soon. But one of the most striking things is that Tom has the audacity to believe that he can change the fate he has sealed for himself simply by carrying around a book of prayer and pretending to be religious. All dealings with the devil are final, and Tom, though he knew exactly who Old Scratch was right from the start, was foolish enough to try and change that.