Show and explain the reaction of people around the prison in chapter one? And why does the novel begin with prison gates?

Part of the
key to your question comes at the beginning of the chapter:

The founders of a new colony, whatever Utopia of human virtue and happiness they might
originally project, have invariably recognised it among their earliest practical necessities to
allot a portion of the virgin soil as a cemetery, and another portion as the site of a
prison.

No matter what hopes the founders of our country
had, even  the most optimistic about its possibilities, the had to realize that two of the not
so optimistic realities of human life, crime and death, had to be acknowledged and provided
for.   Its description fits its purpose, and specific mention is made to the "iron"
work, reminiscient of the reference made later to 's need for an "iron framework"
(faith) which, while it confines him, is necessary for his support.