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Alice Jane Chandler Webster was born in Fredonia, New York. She was the eldest child of Annie Moffet Webster and Charles Luther Webster. She lived her early childhood in a strongly matriarchal and activist setting, with her great-grandmother, grandmother and mother all living under the same roof. Her great-grandmother worked on temperance issues and her grandmother on racial equality and women's suffrage.
Alice's mother was niece to Mark Twain, and her father was Twain's business manager and subsequently publisher of many of his books by Charles L. Webster and Company, founded in 1884. Initially the business was successful, and when Alice was five the family moved to a large brownstone in New York, with a summer house on Long Island. However, the publishing company ran into difficulties, and increasingly the relationship with Mark Twain deteriorated. In 1888, her father had a breakdown and took a leave of absence, and the family moved back to Fredonia. He subsequently committed suicide in 1891 from a drug overdose.
Alice attended the Fredonia Normal School and graduated in 1894 in china painting. From 1894 to 1896, she attended the Lady Jane Grey School, 269 Court Street, in Binghamton as a boarder. During her time there, the school taught academics, music, art, letter-writing, diction and manners to about 20 girls. The Lady Jane Grey School inspired many of the details of the school in Webster's novel Just Patty, including the layout of the school, the names of rooms (Sky Parlour, Paradise Alley), uniforms, and the girls' daily schedule and teachers. It was at the school that Alice became known as Jean. Since her roommate was also called Alice, the school asked if she could use another name. She chose "Jean", a variation on her middle name. Jean graduated from the school in June 1896 and returned to the Fredonia Normal School for a year in the college division.