"In the town they tell the story of the great pearl – how it was found and how it was lost again. They tell of Kino, the fisherman, and of his wife, Juana, and of the baby, Coyotito. And because the story has been told so often, it has taken root in every man's mind. And, as with all retold tales that are in people's hearts, there are only good and bad things and black and white things and good and evil things and no in-between anywhere.
"If this story is a parable, perhaps everyone takes his own meaning from it and reads his own life into it. In any case, they say in the town that…"
First of all, it’s questionable whether the is technically an epigraph, or whether it’s part of the story. Epigraphs are traditionally quotes from other sources that lie outside the work itself; this is clearly fictional and written by the author, so it functions more to set a tone than imbue a message.
What the epigraph does is tell us how to read The Pearl: as a parable. The story of Kino is not the story of just Kino, and the pearl is about more than just a pearl. It’s letting us know to keep a look-out for allegory and veiled significance. The last bit of the epigraph—"they say in the town that"—sets us up for the tone of the novella. Steinbeck is presenting his work in the tradition of oral storytelling. It reads as though we’re being spoken to. (See our discussions of Writing Style and Tone for more details.)