Gold Fever as the Human Condition : FOOL’S GOLD <i> by Richard Wiley (Alfred A. Knopf: $18.95; 293 pp.) : </i>

For most of “Fool’s Gold,” a mule--dead as a doornail, stiff as a board and literally frozen in its tracks at a hitching post--stands staring in the window of a bathhouse in gold-rush-crazed Nome.

Meanwhile, in a neighboring Eskimo village, a missionary out of his element in more ways than one struggles to explain the mysteries of life by extolling saints such as Andrew the Suicidal: “‘Rejoice, rejoice, rejoice’ Andrew said to Jesus once. ‘All you ever talk about is rejoice. What about me? What about now? I’ll kill myself . . . “‘

Like the frozen mule, Richard Wiley’s second novel is at once poignant, macabre and whimsical.

And like the inventive Rev. Raymond, “Fool’s Gold” is deeper and more knowing that it first seems.

Wiley received the 1987 PEN/Faulkner Award for his first novel, “Soldiers in Hiding.” With “Fools’s Gold,” he cleanly clears the hurdle of the often difficult second novel, successfully moving to another time and place and taking his untethered imagination with him.

Alaska has long been a literary locale with an irresistible swagger--which has created its own problems. Especially since the ‘70s pipeline boom, the 49th state has been the location for a succession of novels, some of them reading like travel brochures with plot notes penciled in the margins. The mountains were there, gleaming out of central casting--and, too often, the characters were out of central casting as well.

Wiley resists any temptation to follow the well-marked trail of howling dogs, gushing oil and manly men. Rather, “Fool’s Gold” is about the quiet daydreams within, glowing like warm embers glimpsed through a cabin window.

The place is Nome in the fall of 1899. An already rough and tumble gold rush is about to go berserk when gold is discovered on the beach--the one place where a claim can’t be staked.

In this turbulent tent city, eight characters come together, seeking their fortune and their fate. They are Fugino and Kaneda, two Japanese who share the dream of returning to Tokyo with their gold; Finn Wallace, an Irishman who takes life as he finds it; John Hummel, a scurvy-ridden villain who leaves blood wherever he goes; Ellen and Henriette, who start a bathhouse; Rev. Raymond, and Phil, an Eskimo who travels back and forth between two worlds with somewhat surprising ease, given the times.

The story unfolds in the course of one winter, the lull before the hurly-burly push of 1900.

Wiley’s Nome seems a tad newer and even fresher than the grim, often greedy camp of that period, maybe because it’s viewed through optimistic adventurers’ eyes. And his ensemble is awfully liberal in its immediate, respectful embrace of foreign people and different cultures--a necessary development given Wiley’s later meditations on culture and language.

But “Fool’s Gold” is ultimately less about a time and place in Alaska than it is about a time and place in people’s lives. In this, the essential truth of any frontier experience, Wiley is a master.

Like the town itself, everyone in turn-of-the-century Nome was in the act of becoming. Lives shifted with the speed of quicksilver, and dreams no doubt danced in the air like the smoke spiraling over the tent stoves.

Wiley reminds us that simple people don’t always have simple dreams--and that even simple dreams can be hard to share.

Not surprisingly, winter becomes the perfect metaphor for these interior lives; doors freeze shut, icy caves become potential traps, solitude becomes isolation. Over and over, the men and women in “Fool’s Gold” are caught within themselves, trapped by emotional walls that once served as shelter.

Like the Japanese Kaneda and the Eskimo Phil, who spend days sharing a winter tent and blithely speaking different languages, people may mean well--and, in this case, even look alike--but they live in such different worlds, sometimes they don’t even recognize the borders.

It is neither gold fever nor cabin fever at work here; it is the human condition. Like the vast icebergs further north, these men and women display only the tips of their lives to those around them. As Finn, the philosophizing Irishman concludes, there are as many realities as there are languages to express them.

In such a world, life and hope have an almost unlimited chance. The fantastical becomes as real as the fondest secret wish--what is there, after all, to separate them in a place where gold rides in with each new tide?

By the time bungling Rev. Raymond suggests, “When you search for God, search for him with your imagination,” we suspect he’s onto something.

And so is Wiley. His is not the epoch, but the moment. Although his Eskimo villagers in particular are sometimes painted in simplistic, broadbrush strokes, most of Wiley’s smaller portraits are first-rate. Like the crystal chandelier that opens “Fool’s Gold,” delicately rustling through the streets of Nome, the effect is evocative and fine.