When Squints was telling the the boys while they were in the tree house about Mr. Mertle, Mr. Mertle was depicted as a white man, but when Smalls and Benny went to get Smalls's baseball from Mr. Mertle, Mr. Mertle was a black man.
That was Squints version of the story...we learn later that most of his story was false, including who Mr. Mertle really was. Squints did not know Mr. Mertle, so he couldn't have possibly known he was black, so he assumed he was white.
He's depicted as a white man because Squints has no idea what he's talking about. Squints has just heard things and tells this extremely tall tale. That's all.
Don't you remember though that when Squints was telling his story, it was depicted as a really long time ago...(hence it being in black and white!) so the white man could have died or sold his house (maybe he didn't want to keep/ take care of the dog anymore) and then eventually Mr. Mertle bought it. I don't think it was a slipup, but who knows? :D
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