The narrator says that on board the seventy-four on which Billy now serves, a high level of discipline and morale is maintained because of Captain the Honorable Edward Fairfax Vere. He is a good captain, a bachelor in his forties, mindful of his crew's welfare, but also strict in the enforcement of discipline. He is a bold and intelligent commander, and though of noble blood did not rely solely on these connections for the advancement of his career.
He is an undemonstrative man, not particularly quick to laugh, and on ship he is an unobtrusive captain. He is given to moments of dreaminess and staring out at the ocean. In the navy his nickname is "Starry Vere," bestowed on him by a friend who had come across the name in a poem. He is also an extremely well-read man, stocking his shelf with a formidable list of books each time he sets out to sea. At times he can seem pedantic, because he makes allusions to ancient events as often as to modern ones, oblivious to the fact that most of the men with whom he speaks do not do much reading beyond the newspaper.
The narrator also describes John Claggart, the master-at-arms, warning us that his portrait will fail to grasp the true stuff of the man. During this period, the master-at-arms had evolved from a weapons instructor into a kind of chief of police. Claggart is thirty-five years old, tall and lean, though not puny-looking. His appearance suggests intelligence. He is a pale man, and the narrator hints that something is not quite right with Claggart's health. Nothing is known about Claggarts's past, but rumors abound that he is a knight or nobleman who was pressed into the navy after committing some kind of crime. The narrator tells us that in those days, the British navy was so short-staffed that common criminals would be brought in from prisons to fill ship rosters. The narrator mentions that Claggart came into naval service only recently, as a low-ranking officer, but by his shows of competence rose quickly to master-at-arms. Rumors about him are to be expected, because the master-at-arms is never an officer with whom the crewmen feel comfortable.
Melville finishes his sketches of the story's principal players. In Vere, we have a man of principal. Melville emphasizes Vere's devotion to his office; he cannot make compromises on discipline, but he does care about the welfare of his crew. Vere is also a man of well-considered but firm principle, no stranger to deep thought and abstraction. He reads voraciously, has considered his own convictions, and stands by them: "In view of the troubled period in which his lot was cast, this was well for him. His settled convictions were as a dike against those invading waters of novel opinion social, political, and otherwise, which carried away as in a torrent no few minds in those days, minds by nature not inferior to his own" (312). Vere sees his own actions and decision within the tremendous context of his day's social and political turmoil; this way of seeing things will have profound implications later on.
Claggart is the third of our main characters. His physical description is consistent with a certain tradition of representing the devil: a tall, thin, sinister, intelligent-looking and constitutionally imperfect man. His unknown past heightens the anxiety about him; the narrator tells us that he may have a shameful or criminal past.
The characters, though Melville fleshes them out and makes them real, are deeply allegorical. Billy Budd is the innocent, the noble savage, man before the Fall, Christ. All of these tropes come together in him. Vere is principal, law, order, justice; he is also the father figure to Billy's Christ. Claggart is malevolence cloaked in power, abused authority, evil itself.