A Prayer for my Daughter dates from 1919 and expresses what is, by modern standards, a pretty regressive attitude to women. Broadly, Yeats says that he hopes his daughter will be beautiful and accomplished, but also courteous and acquiescent.
In the final stanza that the question quotes, he makes clear that this is in the service of helping her acquire a bridegroom.
And may her bridegroom bring her to a house
Where all's accustomed, ceremonious;
This is a coded reference to the hope that the man in question will be from an aristocratic family that observes tradition. So when he goes on to say:
How but in custom and in ceremony
Are innocence and beauty born?
He is expressing his belief that "innocence and beauty" in a woman are impossible outside of the aristocratic tradition. Contrast with the preceding lines:
For arrogance and hatred are the wares
Peddled in the thoroughfares.
Which would seem to imply the corollary, that the common "thoroughfares" used by ordinary folk are the places you find arrogance and hate.
It's worth noting that this regressive sentiment seems to have been born, in part, by Yeats' experience trying to create the Irish National Theatre Society. Its early years were very troubled, leading to actual riots and protests after productions of The Playboy of the Western World and The Shewing-Up of Blanco Posnet. This led Yeats to develop a deep disdain for the metropolitan Irish middle classes who made up the bulk of the theatregoing public. He expresses this in a short poem called A Coat:
I made my song a coat
Covered with embroideries
Out of old mythologies
From heel to throat;
But the fools caught it,
Wore it in the world’s eyes
As though they’d wrought it.
Song, let them take it
For there’s more enterprise
In walking naked.
This poem also marks a transition between his early and middle periods. Of course, you can also see the roots of his dislike for middle-class values in his early poems which idolise the peasantry and heroes of Irish myth.
- Ramazani, Jahan, Richard Ellmann, and Robert O'Clair. 2003. The Norton anthology of modern and contemporary poetry.