Theory:

     Ray reached into his cash-box, pulled out a fifty-dollar note and passed it into the man’s hand. As they shook hands, Ray looked into the man’s eyes; they seemed to say, “Thank you!” They both knew the watch wasn’t worth that much. Before turning to leave, the man wrote, “I will be back to pick it up as soon as I can. Merry Christmas!”
 
     The little story ended on the half hour with the clocks striking all together. The timepieces, which had been looking on silently all the while, rang out the time with such feeling that even Ray thought he could hear them. Their sweet, musical message was filled with hope. The timeless message of ‘Peace on earth, goodwill towards all’ was felt by the three men who stood in the old-clock shop.
Explanation:
  
Though the man said that Ray could pay him for what the watch was worth, Ray pulled out a fifty-dollar note from his cash box and gave it to the man. Both Ray and the man knew that the watch wasn't worth that much money.
 
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Ray pulled out a fifty-dollar note and passed it into the man’s hand

The men shook each other's hands, indicating that the situation has changed from bad to good. Ray looked at the man's face, and felt as if the latter's eyes were saying "thank you". The money not only helped the man financially, but it also helped him morally. Ray redeemed the man's life through kindness and thoughtfulness. Before the man left the shop, he turned to the notepad to write one last message. In it, he informed Ray that he would be back as soon as he can to pick up his watch and wished him a 'Merry Christmas'. The message not merely meant that the man would come back for his watch, but, more than anything, he would be back to repay his debt and Ray's kindness.
 
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The man was grateful and promises Ray that he will repay his debt

It was midnight when the incident with the man ended, and all the clocks and timepieces in the shop started striking and ringing out together. It rang out with so much feeling that Ray felt as he could hear them. Christmas arrived at the moment, and the sound from the clocks seemed as music.
 
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The clocks and timepieces ring out in harmony
 
The clock striking twelve was symbolical as it was not merely the beginning of a new day, but also the beginning of a new life for the two visitors. The men not only got the money, but they also left as changed men.
 
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The men underwent a transformation, thanks to Ray's thoughtful and kind heart
  
The music from the clocks filled the shop with hope, and the three men realised the real and timeless message of Christmas: 'Peace on earth, goodwill towards all'. As peace is a collective action, it can be attained only through us being kind to each other. Ray demonstrated the message very effectively.
  
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The timeless message of Christmas: Peace on earth, goodwill towards all
 
Meaning of difficult word:
 
S.No
Words
Meanings
1
GoodwillFriendly, helpful, or cooperative feelings or attitude
Reference:
National Council of Educational Research and Training (2006). The Old-Clock Shop (pp. 11-14). Published at the Publication Division by the Secretary, National Council of Educational Research and Training, Sri Aurobindo Marg, New Delhi.