What is the setting of "The Minister's Black Veil"?

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Yes, the setting of the story is identified in the first line of the text: "The sexton stood in the porch of Milford meeting-house, pulling busily at the bell-rope."  Milford is a town in Massachusetts, a fact that can be confirmed with a quick google search, but we could also...

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Yes, the setting of the story is identified in the first line of the text: "The sexton stood in the porch of Milford meeting-house, pulling busily at the bell-rope."  Milford is a town in Massachusetts, a fact that can be confirmed with a quick google search, but we could also make a fairly educated guess to this effect because of the clues Hawthorne gives us regarding the time period in which the story is set.  First, Puritans referred to their places of worship as meetinghouses because they preferred to differentiate their worship from that of Catholics.  The Puritans loathed Catholicism and what they viewed as the corruption in that Church; Puritan meetinghouses lacked ornament and the accoutrements associated with Catholic churches.  Further, some members of the community are given the title, Goodman, which was essentially the Puritan "Mister."  Both the reference to the meetinghouse as well as to Goodman Gray help to identify this community as a Puritan one which means that the story likely takes place sometime between 1640 and 1690.  Since the Puritans began the Massachusetts Bay Colony, identifying this group as Puritan helps to confirm the setting's location as well as time.

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The setting of "The Minister's Black Veil" is the town of Milford, somewhere in New England, which we know from a footnote in which Hawthorne says that "another clergyman of New England" made himself famous for adopting the same "eccentricity" as Reverend Hooper.  Given the fact that Hawthorne spend much of his life in Salem, Massachusetts, it is reasonable to place Milford in or near Massachusetts.

Although the fact that the story takes place in "Milford" is of little consequence, the fact that the setting is in New England is very important.  In towns like Milford, usually small and agricultural based, the minister is usually the leading citizen, looked up to by everyone, including civil authorities, for moral guidance, religious instruction, and comfort in times of distress.  Anything that alters the nature of the town's minister will also affect the town either negatively or positively, so the setting itself is an important element in the overall story even though the town's name is relatively unimportant.

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Like much of Hawthorne's work, "The Minister's Black Veil" is set in Puritan New England and reflects the austere atmosphere of the Puritans who were so concerned with sin in an unforgiving perspective of humankind. The central symbol of the story is the black veil that the Puritan clergyman, Mr. Hooper, dons. It is "a dismal shade" that represents the universality of sin and sorrow. For this reason Mr. Hooper refuses to remove the veil, even as he lies dying, insisting that the black veil is "on every visage" around him.

Because of the Puritan setting which is "characterized by gloom and piety," the black veil becomes ominous since the others in Mr. Hooper's congregation fear that he may keep his face covered because he sees their secret iniquities.

Each member of the congregation, the most innocent girl, and the man of hardened breast, felt as if the preacher had crept upon them, behind his awful veil, and discovered their hoarded iniquity of deed or though.  

Consequently, they become uncomfortable around him, fearing that he knows what is on their consciences. Yet no one ventures to ask Mr. Hooper why he covers his face other than his fianceé. 

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