[Please note: This post contains discussion of pedophilia relating to the Alice books and Lewis Carroll, as well as a visual of drug use via smoking.]
So says Batwoman to the new villain who goes by “Alice” and speaks in lines from Carroll’s books (Rucka et al. n.p.). She’s referring to the Mad Hatter, a.k.a. Jervis Tetch, who’s been rhyming creepily around Gotham City since 1949 (Brooker 152). Take a look:
As you can see, he bears a striking resemblance to Tenniel’s Hatter: the oversized hat, the diminutive build, the unkempt thatch of hair and even his beaky nose look as though they’re lifted directly from Alice’s Adventures in Wonderland:
The Hatter shows up a lot. Sometimes he’s presented almost exactly as Tenniel drew him, as in Jeph Loeb’s and Tim Sale’s Haunted Knight:
Check out how faithfully Sale’s recreated the tea party scene: Alice’s resentful pout, the boy in the hare costume, the Hatter’s posture — though here, his Hatter is decidedly less pleasant, sinister and shadowed under the hat. There’s a reason for that: the Hatter, like I said earlier, is a villain, and he’s one that preys on children. Little girls, especially:

Art by Dave McKean, words by Grant Morrison. This page is prefaced by the Hatter singing, from off-screen, “Twinkle, twinkle, little bat…”
Copyright DC Comics, 1989, 2004
Will Brooker argues convincingly that this representation — he refers specifically to Haunted Knight’s Hatter — simply embodies many of the anxieties surrounding Carroll’s relationships with little girls:
It is Tetch’s appropriation of Carroll as props for his criminality — with overtones of child molestation — that outrages Batman, although it seems clear that Tetch is on one level only reading into Carroll what some critics have been identifying for decades, and seeing Alice as inherently disturbing. The clash between superhero and villain in this story, then […], could be seen as a clash of interpretations. […] Batman, however, is also acting out his own reading of Carroll…[His and Tetch’s] face-to-face confrontation, then, is partly a battle to decide who will be master of what Alice means. (152-153)
(If you’re curious about Carroll’s relationships with little girls, you should read Carol Mavor’s chapter on him in Pleasure’s Taken.)
I do find it curious that this specific interpretation of the Hatter only really shows up in the 1980s; as Georgina Kleege notes, suspicions about Carroll’s pedophilia were around even during his lifetime (171). But within the context of comics — and especially superhero comics — I suppose it’s not that surprising. In 1954, the comics industry created the Comics Code Authority, much like the film industry’s Hayes Code, to avoid government censorship. The government was interested in censorship because a psychiatrist, Fredrick Wertham, wrote a book called Seduction of the Innocent which basically managed to convince everyone that comic books were turning their children into juvenile delinquent homosexuals. (Wertham’s books is actually very reasonable, but we are talking about the era of the Lavender Scare and McCarthyism. Extreme reactions — like neighborhood comic book burnings — were de rigeur.)
As Chris Couch, comics professor at UMass, likes to say, the Comics Code “lobotomized” the comics industry. You weren’t allowed to show sexual violence, you weren’t allowed to show disrespect of women or police or other government representatives. I imagine that corrupting such a figure as Lewis Carroll, beloved children’s author, was similarly frowned upon. But by 1986, pretty much no one was actually paying attention to the CCA, making the Hatter free for corruption and “dark” interpretations by the time Grant Morrison decided to do the weirdest Batman book ever.
Brooker, Will. Alice’s Adventures: Lewis Carroll in Popular Culture. New York: Continuum, 2004. Print.
Kleege, Georgina. “Memory Works Both Ways.” Southwest Review. 167-200. PDF.
Loeb, Jeph (w), and Tim Sale (a). Batman: Haunted Knight. New York: DC Comics, 1996. Print.
Morrison, Grant (w), Dave McKean (a), and Gaspar Saladino (l). Arkham Asylum: A Serious House on Serious Earth, 15th Anniversary Edition. Ed. Karen Berger, Art Young. New York: DC Comics, 1989, 2004. Print.
Rucka, Greg (w), J.H. Williams (a), et al. Batwoman: Elegy. Ed. Michael Siglain. New York: DC Comics, 2009, 2010. Print.
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