Changing person and tense in a quote

I'm reading Cranford (1853) by Elizabeth Gaskell, and encountered the following passage:

"Have you seen any numbers of Pickwick Papers?" said [Captain Brown]. (They were then publishing in parts.) "Capital thing!"

Now Miss Jenkyns [...] looked upon any conversation about books as a challenge to her. So she answered and said, "Yes, she had seen them; indeed, she might say she had read them."

The text in bold is in quotation marks, so one would normally assume it was a literal reporting of the speaker's words. But here the text is in third person and past perfect tense, although it is a reply to a question in second person and present perfect tense. We presume that what Miss Jenkyns actually said was, "Yes, I have seen them; indeed, I might say I have read them." (Either that or we must assume that for some reason Miss Jenkyns is referring to herself in the third person, which would seem very peculiar and not in character.)

I'd like to learn more about this device. Does it have a name? What effect is intended by it? What other authors have used it, and in what time periods?

I've noticed this device at several other places in Cranford, and I also vaguely recall Jane Austen using it. It seems to mostly be used for humorous effect, as when a character says something unintentionally amusing or embarrassing. In the passage above, Miss Jenkyns expresses her disdain for Pickwick Papers, preferring the work of Samuel Johnson; but this only reveals her own poor taste in literature (in the opinion of the narrator, who also prefers Dickens).

It seems to me that the effect is to preserve the speaker's words and phrasing as much as possible, while at the same time distancing the reader from the speaker, so that the reader can most effectively see the speaker "hoist by her own petard." Does this seem accurate, or do I misunderstand?

Solution 1:

I think this is no more than a publishing convention of the time. Miss Jenkyns’s actual words would have been something like Yes, I have seen them; indeed, I might say I have read them. In reported speech this becomes She said that yes, she had seen them; indeed, she might say she had read them. Mrs Gaskell's publishers have simply chosen to enclose what is reported in quotation marks, a practice no longer followed.

EDIT: 'The Cambridge History of the English Language' seems to confirm this view to some extent:

Modern conventions of punctuation omit overt signals of quotation – quotation marks, dashes, indentation or whatever – when the quotation is anything but wholly direct, but in earlier usage it was possible to retain such punctuation when indirect speech was particularly faithful to the idiom of the original.

There follow examples from Elizabeth Gaskell, Antony Trollope and Edith Nesbit. The paragraph concludes:

Such examples represent a sort of halfway house between direct and indirect speech, as there is no formal subordination to the verb of reporting.