ALICE LANNON and Mike McCarthy are a sister and brother from Newfoundland who can trace three of the stories in the collection Fables, Fairies & Folklore of Newfoundland (Jesperson, 105 pages, $9.95 paper) from a family oral tradition that's endured for at least six generations. Their joint efforts have produced a slim but memorable tome divided into sections headed "Folktales," "I "Fairy Lore," "Miracles, Prophecy and Witchcraft," "Ghost Stories," and "Superstitions, Cures and Weather Lore." Attractive black-and-white illustrations, uncredited but clearly drawn from contemporary sources, heighten the stories' dramatic effect, and the salty air that pervades the telling leaves little doubt of their authenticity. (In "Jack, Bill and Tom and the Ship that Could Sail over Land and Water," for example, two of the hero's eight gifted helpers are named "Drink-All ... [who] ... could level hills and mountains by just sliding down them") What may strike the reader "from away" most, however, are editorial explanations along the lines of:

"... belief in the Fairies or Little People ... was still pretty general even in the first half of the twentieth century ... Green was the colour of the Fairies ... [and] ... it was not safe for humans to wear ... [it] ... In fact many Newfoundlanders of the time firmly believed that the St. John's fire of 1892, followed by the Bank Crash of 1894, were caused because in each year the Newfoundland government issued green postage stamps, and so aroused the ire of the Little People."