Why did Captain Smollett turn down Silver's proposal?

I think he does take the deal. The man who accompanies Silver says "Cap'n Silver" wants to make terms, and Smollett claims he has not heard of "Cap'n Silver." Consequently, Silver explains that after Smollett's "desertion" the men elected Silver captain and he wants Smollett's assurance that he will not be harmed if he enters the stockade. Not happily, the captain agrees to his request.