AUTHOR ATWOOD MAKES HER CASE.

Byline: Christopher Lehmann-Haupt The New York Times

Title: ``Alias Grace''

Author: Margaret Atwood

Data: 468 pages, Nan A. Talese/Doubleday; $24.95

Our rating: Four Stars

Of the actual case on which Margaret Atwood's powerful new novel, ``Alias Grace,'' is based, relatively few hard facts are known.

On July 23, 1843, Thomas Kinnear, a wealthy Ontario farmer, and his housekeeper, Nancy Montgomery, were murdered. Kinnear's stable hand, James McDermott, and 16-year-old maid, Grace Marks, were tried and convicted for the act. McDermott was hanged, but Marks' sentence was commuted to life because of her youth and sex, and she entered the Provincial Penitentiary in Kingston, Ont., on Nov. 19, 1843.

Yet the case attracted extraordinary attention. As Atwood writes in her afterword:

``The details were sensational: Grace Marks was uncommonly pretty and also extremely young; Kinnear's housekeeper, Nancy Montgomery, had previously given birth to an illegitimate child and was Thomas Kinnear's mistress; at her autopsy she was found to be pregnant. Grace and her fellow servant James McDermott had run away to the United States together and were assumed by the press to be lovers. The combination of sex, violence and the deplorable insubordination of the lower classes was most attractive to the journalists of the day.''

Grace herself, Atwood adds, ``continued to be written about over the course of the century, and she continues to polarize opinion.'' So Atwood has both rich material and enticing mysteries out of which to build a novel that is part epistolary, part narrative and altogether compelling.

By focusing on Grace's story, she echoes the major obsessions of her fiction: women's identity, the relations of the sexes, the nature of consciousness itself.

In the broadest sense, Grace's story even recapitulates the passage to self-discovery of the I-narrator in ``Surfacing,'' Atwood's second novel of the nine she has published, and the one that first earned her major attention.

Atwood's chief invention in her new novel is Dr. Simon Jordan, who has been engaged to interview Grace by people who believe her innocent and who are trying to get her pardoned. Grace has been unable to remember what she was doing when her employers were murdered. She insists she fainted, something she has a tendency to do in any case, like many women of her time.

Because Simon is interested in unconscious mental processes (his ambition is to start his own asylum), Grace's supporters hope that he can stimulate her to recall what happened, or, as he puts it, ``open her up like an oyster.''

As he interviews her, she recounts the autobiography that forms the novel's main narrative: how as a 12-year-old she shipped from Northern Ireland with her parents and six younger siblings, how her mother died in midpassage, how she hired out as a maid for a wealthy Toronto couple and how she had to leave and get other work because of her knowledge that their son had made her best friend pregnant and forced the abortion that killed her.

In Atwood's inventive handling, Grace is a sharp-eyed and highly intelligent character with the narrative skills to bring drama to the details of 19th-century domestic life.

Her subordinate roles as a child, a poor person, a servant and a prisoner have bred in her a bitter sense of irony, which she eloquently expresses to Simon as she begins to feel more comfortable with him.

``I cannot remember my mother when she wasn't in what they call a delicate condition; although there is nothing delicate about it that I can see. They also call it an unhappy condition, and that is closer to the truth - an unhappy condition followed by a happy event, although the event is by no means always happy.''

Because they are both attractive and intelligent, you expect Simon and Grace to fall in love with each other. And in fact they do, in a sense. But also you despair of their ability to communicate, particularly when Simon starts offering Grace an apple and other fruits and vegetables that are stored in cellars, in the hope of getting her to think about the subterranean place where one of the murder victims was found.

Seeing what her interrogator is up to, Grace easily outwits him, and Simon starts down the path of obtuseness that leads both to his own undoing and the story's surprising climax.

What happens at this climax will not even be hinted at here, as its mystery helps to sustain a long and detailed narrative. Yet Atwood's story hardly lacks for more immediate puzzles to be solved.

Among them, the apple that Simon offers Grace initiates an intricate symbolic working out of the Eden myth that ultimately resolves itself in Grace's theory that only one tree existed in Paradise, ``and that the Fruit of Life and the Fruit of Good and Evil were the same.''

She concludes, ``And if you ate of it you would die, but if you didn't eat of it you would die also; although if you did eat of it, you would be less bone-ignorant by the time you got around to your death.''

Another leitmotif is sounded by repeated references to the storyteller Scheherazade. Grace remarks on the pleasure men take in listening to her tales of suffering. Later in her life she writes to Simon of their interviews:

``I could tell when your interest was slacking, as your gaze would wander; but it gave me joy every time I managed to come up with something that would interest you. Your cheeks would flush and you would smile like the sun on the parlor clock, and if you'd had ears like a dog they would have been pricked forward, with your eyes shining and your tongue hanging out, as if you'd found a grouse in a bush.''

The comparison to Scheherazade is apt. And if Grace manages to keep several people in her life simultaneously at bay and attracted to her, the reader, too, is part of her fascinated audience.

For her narrative powers are what draw one through the intricate maze of Atwood's story and lead to the heart of its complex vision of human motive and self-awareness.

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Photo: In ``Alias Grace,'' Margaret Atwood probes the psyche of a woman jailed for murder.