With respect to the literary status of fiction in England and America, Martin is correct. Until the late 19th century, English prose fiction was considered popular fiction, as opposed to prestigious belletristic writing such as poetry, history, moral essays, etc. Case in point: When Poe went off to the U of Virginia to study literature in the 1820s his guardian wrote to him to complain that instead of devoting all of his time to his literary studies Poe was wasting time reading novels. The popularity of novels, and their perceived low literary quality (with their gothic horrors, seduction plots, and so on) produced moral panics among social conservatives in early national America, as discussed by Cathy Davidson in Revolution and the Word. While different genres existed with different conventions and some were considered trashier than others in different contexts, all novels were considered leisure reading and popular entertainment, not high art. What happened to exalt novels to the status of "literature" by the other end of that century is a long story, but suffice it to say that when Henry James wrote the essay "The Art of Fiction" in the 1880s he was being deliberately provocative with that title: He was trying to make the case that fiction was an art. That is a short and reductive answer--I am on my phone--but hope it helps.