More than 1,500 years ago Nagas ruled the waterways of the earth. From the white nagas of the Alps to the black nagas of the Nile. Over the years the slaughter of the Nagas for their skin, known throughout the world as Naugahyde, decimated their numbers.
But way back then 3 fierce Nagas, namely Huu-aiy, Duu-aiy and Luu-aiy ruled a region along the Mekhong River that would become known as Isaan. The were firce and terrible. They would rape the men and sell the women of villages into slavery. They were short and darker than the other Nagas in the area. The Nagas from other parts of the River would call them lazy and stupid, which only tended to make Huu-aiy, Duu-aiy and Luu-aiy more irritable. Every year during the Pansaa people would flock to the Temple to seek solace from these terrible times. One year a Western Bhikkhu spent the Pansaa there and would chat daily with the village chief. He mentioned to the village chief that it might be a good idea just to ask Huu-aiy, Duu-aiy and Luu-aiy, what they wanted. The village chief laughed, How could a foreigner understand the ways of his people. So year after year the men were raped and the women sold and the people formed committees and held meeting after meeting, until the village chief stood up and said, "I have thought long and hard about this situation and have decided we must ask Huu-aiy, Duu-aiy and Luu-aiy what thay want." The people cheeered and for the next 20 years organized committees and held meetings and finally decided now was the time to ask Huu-aiy, Duu-aiy and Luu-aiy what they wanted.
So the committee went to riverside and shouted for the 3 scoundrels and asked them what they wanted. The 3, Huu-aiy, Duu-aiy and Luu-aiy scratched thir ugly thick brown skulls and told the villagers to hang on a minute and held a meeting.
Huu-aiy, Duu-aiy and Luu-aiy soon came back and said this. " We are laughed at by all the other Nagas for being dark skinned, ugly, stupid and lazy and we want to end this. You have among you a group light of skin, soft to the touch and they dress so well and their makeup is fine. We also noticed that they sort of enjoyed it when we raped your men, so what we want is..... pause for effect.... evrey year you must throw into the waters and offering of 100 lady boys for our pleasure and we will leave the village in peace." The villagers formed committees and held meetings trying to figure out a way to scam the Nagas and could not figure a way. As a matter of fact they were so frightened and relived that they decided to float little banana leaf boats with candles in them so the Nagas were sure to see all 100. And the Festival of Loy Katoey was born.
Many years later along came a people from the South who called themselves Thais. They saw the Festivals of Isaan and saw potential for a committee they foresaw that would be called "Tourism Authority of Thailand". Now time had gone on Huu-aiy, Duu-aiy and Luu-aiy had passed on, but out of respect the people of Isaan still made the offering to the Nagas. These people to the south seemed to worship the Katoeys and the "Tourism Authority of Thailand" even held beauty pageants for them so they kept the banana leaf concept and what is known today as "Loy Krathong" was born.