Capote's story is more or less autobiographical, which is reflected in the setting (time and place) of the story, the 1930's rural South, a region suffering from a fair amount of poverty even before the onset of the nation's Great Depression. The main character is a litte boy who lives with aging relatives, as Capote had; his best friend is an elderly cousin who lives in the household, and every year about November, they gather pecans, save their pennies, and make fruitcakes for their "friends", who are actually people they barely know. On the surface, this is a nostalgic story of a lovely holiday tradition, but looking a bit deeper reveals a certain sadness, which is strongly related to the rural setting during the Depression, the family's poverty, and the loneliness of a little boy and an old lady who have nothing but each other, "a lost pair of kites" in the words of the narrator.
Other Southern writers who have set their work in the South of the 1930's include Capote's childhood friend, Harper Lee, in her largely autobiographical masterpiece, To Kill a Mockingbird, William Faulkner with Light in August and Mildred Taylor with her young adult novel Roll of Thunder, Hear My Cry.
The setting of Truman Capote's "A Christmas Memory," the rural South during the Depression Era, provides much local color and emotive language that distinguishes it from other nostalgia fiction.
In addition, fiction of the South is renowned for idiosyncratic characters, and Buddy's elderly cousin in Capote's story is certainly one of them. Each Christmas she and seven-year-old Buddy, two social outcasts who have forged a friendship, bake fruitcakes that they give to people who have, as the narrator comments, "struck [their] fancy." Most of the time these recipients of the fruitcakes are not people that Buddy and his cousin know. Buddy himself wonders,
Is it because my friend is shy with everyone except strangers that these strangers, and merest acquaintances, seem to us our truest friends?
After having saved pennies all year, Buddy and his cousin collect pecans in an old baby buggy. Then, "wallowing in the pleasures of conspiracy," they take the cousin's bead purse from its secret place and count its contents: $12.73. Part of this money they use for whisky. But, since state laws forbid its sale, they must buy this liquor from a bootlegger called Mr. Haha Jones, who has a cafe (a large log cabin) on the river's muddy edge. It is a sordid place where people have even been killed.
After exchanging gifts on Christmas, the two friends "sprawl on the grass and peel Satsumas" as they watch their kites. It is their last Christmas together, but the reader is left with curious impressions and a sympathetic view of an unusual boy and his old and dear friend who find each other and "fuel the blaze of [their] heart[s]" in a rustic environment.