He did it again! I think I know what he meant, "the writing of prose". But I'll bet it is hard to find in any dictionary.
"So far as the Greeks are concerned, this need not surprise us, since it was only in their decline that they took to prose. In the splendid period of their richest accomplishment they had found fit expression for their imaginings only in poetry; and there is significance in the fact that no one of the nine muses had been assigned to foster prosefiction."

Edit: He used it a second time, but with a hyphen suggesting he had coined it:
"But even if the more careless prose-fictions of the Greeks and of the Latins are far inferior artistically to the larger Attic poems and to the lighter Roman lyrics, still they are immensely superior to the chaotic narratives which are all we can discover in the dark ages that followed the downfall of Imperial rule. Medieval fiction is not unfairly represented by the “Gesta Romanorum,” that storehouse of tales of all sorts and of all lengths, gathered from the ends of the earth and heaped up at haphazard."