The sentence from Herman Melville's short story "The Lightning-Rod Man" which is an example of allusion is the one we find in letter B. Who has empowered you, you Tetzel, to peddle round your indulgences from divine ordinations?
One of the characters is mocked by being called Tetzel, who was a German Dominican preacher who sold "indulgences" (paid forgiveness for one's sins) in the 1500's. In the aforementioned sentence, there is an allusion to Martin Luther, who was openly against Tetzel and his "indulgences". An allusion is an indirect reference to something or someone, and Martin Luther is indirectly mentioned in the sense that it's like he is talking to his adversary. Except it's not Martin Luther himself speaking; it's one of the characters who try to impersonate him.