The context is F. Scott Fitzgerald's "Bernice Bobs her Hair."
Oh, I wasn't thinking about that. I was considering whether we hadn't better bob your hair.
Later on in the story, we are clarified that Bernice's hair isn't the Bob cut when Marjorie offers this advice. So the situation is that Bernice doesn't have her hair Bob cut, but Marjorie is evaluating the prospect of her getting said cut. To me, it seems like the correct modal phrase to use is "had better," but "had better not" is used, implying that she already has a Bob cut when Marjorie is talking to her (and before her subsequent fainting spell).
What is Fitzgerald saying?