To date there has been no scholarly exploration of the genesis and nature of Friedrich Halm’s earliest extant Novelle, St. Sylvesterabend (New Year’s Eve). The present research article attempts to fill that gap by determining the contested date of the story’s origin, establishing it as 1823. Furthermore, the article examines the tale’s simplicity of style, which is distinct from Halm’s later Kleist-influenced narratives. Furthermore, it analyzes the novel’s structural principle of parallels and contrasts, and its themes of monomania, secularised religiosity, and Christian caritas. The article also indicates how vicious criticism of the tale by Halm’s literary mentor, Michael Enk von der Burg, lacerated the young Halm’s self-confidence as a Novelle writer and crippled his novelistic creativity for decades to come.