The Scheherezade of Hareem’s Trailer Court : A BLUE MOON IN POORWATER<i> by Cathryn Hankla (Ticknor & Fields: $17.95; 278 pp.) </i>

Hardly a week goes by without a new lamentation upon the current state of American fiction. Critics say our novels lack interesting story lines, engaging characters, a sense of community, beauty of language, and spiritual depth. Such critics would do well to pay attention to the works of young Southern and Appalachian writers, many still telling stories about real people in real places, stories warmed by a sense of mystery and the love of the author for the characters. Cathryn Hankla is such a storyteller.

“A Blue Moon in Poorwater” is Hankla’s first novel after books of poetry and short stories. Her narrator is Dorie Parks, who lives in the small southwestern Virginia town of Poorwater. Dorie tells of the sometimes tragic, sometimes miraculous events of her fifth- grade year in the late 1960s.

Dorie’s father is a coal miner. Her mother is a sad, quiet woman who mourns the frequent absences of her beloved oldest child, Dorie’s brother Willie. It is Willie’s sudden reappearance in the company of a snake-handling evangelist that marks the beginning of Dorie’s extraordinary year.

The incidents which follow--including a mining dispute, a church burning, and a macabre discovery in a doctor’s basement--do not a first seem related. But Dorie, who lives in Hareem’s Trailer Court, is reading “The Arabian Nights.” She notices that “it seemed like I could never get through one story without another one starting. It was like a great big box with smaller and smaller boxes inside, but you couldn’t ever tell where the treasure would be, if there was one.” Seen through Dorie’s eyes, the eyes of a child gaining glimpses of adult vision, events begin to connect. Wisdom and maturity bring not cool rationality, but a wide-eyed wonderment at the great beauty and terrible evil of the world.

One of the stories Dorie tells is all too commonplace in the Appalachian coal fields. The Parks’ next-door-neighbor is killed in a mining accident. Coal company negligence has caused the death, but the company doesn’t want to pay compensation to the man’s widow. A deal is struck with the mine inspector, unsafe conditions are covered up, and the miner is blamed for his own death. The attempts of Dorie’s father to discover the truth are like the uncorking of a genie’s pot in “The Arabian Nights”: Evil is unleashed, a blind evil careless of who is hurt.

This story is told gradually, intertwined with others like strands of a rope. There is the family of Dorie’s best friend Betty, the daughter of a doctor. And the life of play shared by Dorie and Betty, which captures the imagination, risk-taking and high spirits that girls are as much blessed with as boys. And Dorie’s school with its social distinctions ranging from “holler kids” through the town “dirty boys” to Betty’s peers among the local elite. Hankla captures perfectly the nuances of class: Dorie, still a child, has some access to the homes of the better-off. But her parents can not even feel at home in the town church.

Framing these tales is the tragedy of Dorie’s brother Willie. A high school dropout rumored to be on drugs, he is obviously troubled, but the depth of his problems is only revealed toward the book’s end. He is a messenger from a strange world of uprooted hippies and space travel, and through him, the demons of the late ‘60s--the acid, the violence, the Vietnam War--come home to Poorwater.

It is Hankla’s gift to take material that could be mean and ugly and mine it for beauty, to depict not alienation, but the cruel and tender binding of family and community members one to another. Her feet are planted firmly in the mountains of Appalachia, a place where violence and love flourish together, where contradictions are commonplace and people do not hesitate to name both good and evil. It is a place where a child like Dorie can gain the gift of healing, recognize it as a fearsome gift, and lose it again; where a young man like Willie can be driven mad by his own sense of sinfulness.

“A Blue Moon in Poorwater” is sometimes uneven. Some of Dorie’s attempts at philosophy are a bit rambling, and the growth of stories within stories may irritate some readers. But Hankla’s novel is a book to haunt long after it is finished. Her characters are real people. And she proves that storytellers with the power to conjure still walk among us.