This excellent story actually consists of two stories being told within a story, as an aunt and then a bachelor amuse some children with very different stories. The setting however is on a train in a carriage. it is a very hot afternoon, and thus the two children that the aunt is desperately trying to look after are feeling fractious and hot and bothered and tired of the journey. Note what the text tells us of the setting:
It was a hot afternoon, and the railway carriage was correspondibly sultry, and the next stop was at Templecombe, nearly an hour ahead. The occupants of the carriage were a small girl, and a smaller girl, and a small boy. An aunt belonging to the children occupied one corner seat, and the further corner seat on the opposite side was occupied by a bachelor who was a stranger to their party, but the small girls and the small boy emphatically occupied the compartment.
Note the way in which the impatience, boredom and fatigue of the children is emphasised through the heat and the fact that there will not be another stop for at least an hour. We can understand the way in which the children somewhat take over the compartment, even though there is another man there. The stage is thus set for the two different stories that follow.