how does diedrich knickerbocker come to know this story
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Knickerbocker knows the story because it has been repeated through the years. We are not told who he specifically heard it from.
"It is said by some to be the ghost of a Hessian trooper, whose head had been carried away by a cannon-ball, in some nameless battle during the revolutionary war; and who is ever and anon seen by the country folk hurrying along in the gloom of night, as if on the wings of the wind."
THE LEGEND OF SLEEPY HOLLOW