Clifford, who becomes fatigued easily, is now in the habit of retiring early, which is fortunate for Phoebe, who thus has a good deal of time to herself. Interestingly, she is changing; her eyes are now larger, darker, and deeper, and she seems to be less girlish. In the summer house, she is occasionally thrown into the company of Holgrave, who tells her about his varied career as a schoolmaster, salesman, country editor, peddler, sailor, communal farmer, hypnotist, and now as a photographer. He has retained his good conscience always, but he seems to obey strange rules. He is calm, cool, and more intellectual than emotional. He asks Phoebe about Clifford and seems surprised that she does not wish to try fathoming the man's nature. Holgrave rants about the dead weight of the past, says that houses should last only twenty years, and he mentions Maule's curse, which he says is very real. He fancies himself to be quite a thinker, but one might well wonder whether he himself will ever amount to anything. He tells Phoebe that he is a published author, and he begins to read to her a story that he has written about Alice Pyncheon.
Holgrave's story relates that thirty-seven years after the house was built, the owner, Gervayse Pyncheon, grandson of the old Colonel, summoned the carpenter Matthew Maule, the only son of Thomas Maule, who built the Pyncheon mansion, to ask him about the missing documents, the deeds to "the lands eastward." Matthew took offense at Gervayse's European manners, and so, for revenge against the Pyncheons in general, he hypnotized the proud, beautiful, and pure Alice Pyncheon. Immediately thereafter, Alice described her vision of the old wizard Maule and his carpenter son as they tried to prevent blood-soaked old Colonel Pyncheon from releasing a parchment document to his heirs. Later, Alice, still a mesmerized "slave," kissed Matthew's bride, then caught cold, and died. Her sudden death wounded the carpenter's grandson; he gnashed his teeth — he had sought only to humble Alice, not destroy her.
Phoebe is half-hypnotized by the exciting story of Alice, and Holgrave admirably resists a terrible temptation to say something to Phoebe to make her his slave forever. In the darkening garden, the two young people talk of Holgrave's unusual happiness here, and of Phoebe's feelings of maturity because of her help to Clifford and Hepzibab; she has given them some of her "sunshine" and the presence of her youth, a quality which swiftly passes. Phoebe explains that she must go home again, for a few days, but she says that she will be back soon. Holgrave says that he enjoys watching the drama of two centuries seemingly drawing to a close. Phoebe calls him heartless, but he explains that he has only a mystical feeling, that he really knows nothing of consequence concerning the old Pyncheon house. Two mornings later, Phoebe takes a train bound for home. Hepzibah notes Phoebe's growing sadness. Clifford, however, calls her "a bud now blooming"; Uncle Venner urges her to return quickly, since otherwise he may be at the workhouse, and he calls her an angel who is essential to the well-being of her old cousins.
Discussing Clifford with Holgrave in Chapter 12, "The Daguerreotypist," Phoebe reflects that Clifford's mood changes without any reason that can be guessed at — "just as a cloud comes over the sun." She feels, however, that it is not quite right to look too closely into his moods. The dark, more analytical Holgrave seems to understand Clifford's moods; nevertheless, he turns the conversation to subjects less dark.
Holgrave, a descendant of the submerged and almost forgotten Maules, carries with him some of their darkness. His tale of Alice Pyncheon, in Chapter 13, is not a tale "for the open daylight." In fact, he begins it while the late sunbeams gild the old Pyncheons' House of the Seven Gables. The story is a narrative of Pyncheon pride and the dark powers of the injured Maules; it is set some thirty-seven years after the construction of the house and the mysterious death of its founder.
In Holgrave's tale of Alice Pyncheon, the aristocratic Alice, who "deemed herself conscious of a power — combined of beauty, high, unsullied purity, and the preservative force of womanhood" is, in effect, seduced by the second Matthew Maule. The language of the entire episode is transparently sexual, and Alice is drawn not merely by Matthew's hypnotic prowess but by also "the remarkable comeliness, strength, and energy of Maule's figure." The outcome of this "seduction," however, is not a true union of any sort. Having been socially insulted by Alice's arrogant father, Maule uses his sexual mastery only to demonstrate his sadistic control over Alice. "A power that she little dreamed of had laid its grasp upon her maiden soul. A will, most unlike her own, constrained her to do its grotesque and fantastic bidding."
As a Maule, Holgrave possesses the family's mesmeric powers which seduce and destroy. But it should be noted that he has resisted the temptation to assume control over Phoebe through either his sexual prowess — inherent in the sexual quality of the tale and in his being a Maule — or the effects of his miming, as he imitates the gestures by which Matthew Maule hypnotized Alice Pyncheon. Even though Holgrave has too much integrity, too much "reverence of another's individuality," Phoebe does emerge from her dreamlike trance to a beautiful moonlit evening and a new interest in Holgrave, an interest which will soon grow into love.
Before we begin to generalize Holgrave's character in wholly positive terms, there are a few considerations we should examine. Holgrave's education has been the result of "passing through the thoroughfares of life," while not being a part of that life. He has passed through a great number of occupations in his relatively short life — none of which he has mastered. Not only is he a sort of jack-of-all-trades, but he has stuck with none of them. In his present occupation, he is a photographer, a daguerreotypist; he "makes pictures out of sunlight"; this occupation is another sign of a flaw in his character. He is motivated by an intellectual curiosity, of which his daguerreotypes are an emblem, and he is not a creative artist despite the fact that he is believed to be one, for his pictures lack both depth and chiaroscuro. They penetrate Judge Jaffrey's exterior but, like Holgrave's limited vision, they offer no insight into the complex shadows of Jaffrey or, by extension, the house and its occupants; in fact, they tend to isolate the particular individual from his context. Holgrave is a walking paradox: On one hand, he has cut himself off from tradition; on the other hand, he is very much part of that tradition. He believes that all houses should be made of wood and should be razed after twenty years; at the end of the novel, he is planning to build a new stone house. He does not wish to control Phoebe, but he does wish that he had Phoebe's chance to try and truly fathom Clifford's actions. Perhaps the most damaging testimony that Hawthorne gives against Holgrave is that he is too much the scientist, too much a cerebral man to ever be the "savior" of the house and its occupants. Phoebe herself recognizes this.