William Bottrell, the famed folklorist of Cornwall, used this image in his 1880, final volume on Cornish traditions, but he included little explanation as to what was being depicted.
Traditional Northern European beliefs included the idea that it was possible to be magically "reborn" by passing through a natural opening, such as is depicted in this lithograph. A mother is holding her child, and someone waits on the other side of the stone, ready to grab the infant (notice the other person's hand). Apparently, the baby was ill: the belief was that this act of rebirth could cure a child who was failing to thrive.
Cornwall is noted for these sorts of megaliths. Originally, the stone was probably flat. Various natural forces eroded the hole. Early inhabitants of Britain noticed the opening and placed the stone on end, with an eye to the significance of this natural feature. The exact reason for the focus of these early inhabitants can only be a matter of conjecture since there are no written records to tell us what they were thinking and what they believed. By Bottrell's time, we have documentation of how more recent people viewed these monuments.
I discuss this and other aspects of Cornish folklore in my forthcoming book, The Folklore of Cornwall: The Oral Traditions of a Celtic Nation (courtesy of the University of Exeter Press): http://www.exeterpress.co.uk/en/Book/1068/The-Folklore-of-Cornwall.html