Types of Narration and Speech

Taking into account that it`s a story within a story, it`s rather confusing to define the type of narration from the point of view of presentation. At the very first sentence we see the hint which reveals the idea of third-person narrative: "Dreams and warnings are things I don`t believe in, said the night watchman".  Further events are told from the first-person, namely this night watchman, indication of which can be seen in the following examples: "we was homeward-bound from Sydney", "he woke us all up", "I never see a man..." etc. That`s why I believe him to be the narrator of the story. So as we see,  the narrator is one of  the characters though he`s not the protagonist. Still he appears to be more a viewer than a participant of depicted events. 

As for the type of speech employed by the narrator, the analyzed text is narration mixed with direct and represented speech with pure insertions of description. 

Another thing to be taken into consideration is the way the story is presented. The night watchman`s pronunciation is typical of uneducated speech. Numerous cases of graphon highlight his social status as a retired sailor familiar with a life on the docks, who adopts a London cockney dialect prevalent on the waterfront. As an example of graphon one may notice `ad, arter, `er, o`, addication, wot, ses, agin, `oarse, `appen, ain`t, p`r`aps, d`ye, on`y, fust-rate, unfortunit and a lot of others. Some of words used by the narrator are fixed in the dictionaries dialect variants of common words: feller (instead of fellow) and afore (instead of before). 

Lack of education is also underlined by grammatical mistakes as in following cases: "we was (were) homeward-bound from Sydney", "do(ing) all he could", "in a(n) offhand way" etc. Nevertheless politeness of the narrator is shown through the purposeful omission of vulgarisms presented by the metaphor: "Bill called something that I won`t soil my ears by repeating".

By all means those things contribute to the strong impression of natural colloquial speech as if we don`t read the story but listen to it in the form of friendly conversation. Narrator addresses the reader (or listener): "if you`ll believe me". Another usage of pronoun "you" within the narration is an example of I --> you transposition: "little bits that you couldn`t make head nor tail of", which also imparts to the utterance the freshness of immediate address to the listener.