Worlds in Collision : MEAN SPIRIT <i> By Linda Hogan (Atheneum: $19.95; 370 pp.) </i>

Linda Hogan, a Chickasaw writer with a fine reputation as a poet, has chosen as the subject of her first novel the Oklahoma oil boom of the 1920s. The Indians who had been forcibly resettled onto apparently worthless land suddenly found themselves in possession of one of the country’s richest oil fields--to their great misfortune. U.S. businessmen and government, as it happened, couldn’t bear the sight of a rich Indian, and although the history of Native Americans since colonization is a fairly predictable story of betrayal and land theft, this chapter is a particular shocker. Only a poet could have made it both shocking and beautiful to read.

The novel is set in Watona, where Osage and Creek families live in farmhouses above a great pool of oil, and one by one are turning up dead. An old water-diviner named Michael Horse watches his fire and tries to piece together the mystery. At church, the Rev. Joe Billy declares, “The Indian world is on a collision course with the white world. . . . They are waging a war with Earth. But, I say to you, our tears reach God.”

But God seems to be elsewhere when oilmen arrive unannounced to pump out the earth’s black blood and pay the landowners as little as possible. When Moses Graycloud goes to collect the annual royalty payment that must support his family (since his land is ruined for farming), he’s told that full-bloods now get only 10%: $200. Any who argue are declared insane and appointed the wards of white attorneys who handle their money. Some who can’t pay their bills get a loan from the benevolent rancher and oilman John Hale, who secures the loan with a life-insurance policy on which he’ll collect when they die. He never has to wait long.

At the eye of the storm is Nola Blanket, beautiful daughter of the murdered Grace Blanket, heir to her mother’s enormous oil fortune but also cherished progeny of the Hill People, who shun Watona’s worldliness but send down four silent guardians to watch over Nola.

She embodies every conflict of her time. She saw one of John Hale’s men shoot her mother, but if she reports this it surely will end her own life. She is a child scarred by horror, but also a gentle, unearthly beauty who inspires love and fear in her oppressors. She brilliantly defies her boarding-school teachers, but then agrees to marry the son of her court-appointed warden because she knows her presence in Moses and Belle Graycloud’s home endangers them. She spends her money on a wildly opulent wedding and extravagant gifts for her people. When she becomes pregnant, she talks constantly to “her future,” the only thing left for her to trust.

Nola’s story is woven together with that of Belle Graycloud, who listens to bees and wears a meteorite around her neck; of Stacey Red Hawk, a smart Lakota Sioux who tucks his braids into his hat and goes to Washington in hopes that law enforcement can be made honest; of mute John Stink, who crawls from his grave and walks the Earth more freely as a ghost than he could in life.

The tapestry is as well made as a good mystery novel, but equally compelling for its vivid language and characters. When Belle Graycloud happens on a truckload of sacred eagles “with the blue-white membranes of death closed over their eyes,” shot by hunters who will sell them for souvenirs, they look to her “like a tribe of small, gone people, murdered and taken away in the back of a truck.” When Nola Blanket’s husband gives her an emerald-green parrot, she walks like an apparition to the window and sets it free.

This is North American magic realism; in the same way Gabriel Garcia Marquez and Isabel Allende examine their political history with a conjurer’s eye, Hogan has wrapped wonder and magic around some brutal American truths. Neither magic nor truth is diminished by the association.

The story, though relentlessly sad, is leavened throughout with a circumspect humor, as when Michael Horse retreats to the hills to write a new chapter of the Bible: The Book of Horse. He consults a dismayed priest for advice on how to get it copyrighted and included in the Bible. Horse modestly tells him: “The Bible is full of mistakes. I thought I would correct them. For instance, where does it say that all living things are equal?”

“The priest shook his head. ‘It doesn’t say that. It says man has dominion over the creatures of the earth.’

“ ‘Well, that’s where it needs to be fixed. That’s part of the trouble, don’t you see?’ ”

The stereotype of the stoic Indian who does not flinch as he’s beaten was probably invented by a guilty conscience. The Indians in this novel aren’t stoic. When they can, they laugh and make love; when they can’t, they weep and lock themselves in the cellar. When their own traditions can’t guide them or blunt their despair, they turn to liquor and Ouija boards. They aren’t “other,” they’re ourselves.

Hogan has done one of the finest things a novelist can do: She’s created empathy. She carves a vast tragedy down to a size and shape that will fit into a human heart. It’s an important event, because this chance to fully realize a point of view alien to our own--this empathy--is the thing that may just save us in the end.