Nick recalls the many colorful and distinguished people who came to Gatsby's parties in the summer of 1922. Distinguished and well-known citizens of both East and West Egg came to his house and enjoyed the food and music that he had provided for them, even though none of them knew him. By cataloging Gatsby's esteemed guests, Nick wants the reader to realize how quickly the tide soon turns on Gatsby and how easy it was for his friends - the reckless, wealthy people whose approval he craved - to betray and forget about him.
While they are driving in Gatsby's car one day to meet Jordan for lunch, Gatsby tells Nick a fabricated account of his past life. He tells Nick that he was left a huge inheritance by his wealthy parents and that he had traveled extensively all over the world after their death. He boasts to Nick that he had gone to Oxford, but Nick notices that he seems a little bit nervous as he boasts about his education, as if he were, as Jordan had believed, lying about his past. Gatsby goes on to boast of his triumphs during the war and even shows Nick a medal that he had received from Montenegro for his courage and strength. Nick doesn't believe Gatsby's lies but is still amazed by Gatsby's sincere belief that he is, in fact, telling the truth about himself and his past.
A policeman stops them on the road, but Gatsby takes out a white card from his pocket, and the cop quickly apologizes for stopping him. Gatsby tells Nick that he had once done the police commissioner a favor, and this incident first alerts Nick to Gatsby's illegal practices.
When they are about to meet Jordan for lunch, they run into one of Gatsby's cronies, Meyer Wolfshiem, who, as Gatsby later tells Nick, is the gambler responsible for fixing the 1919 World Series. Wolfshiem and Gatsby chat for a bit, and Wolfshiem, mistaking Nick for someone who Gatsby had told him about, asks Nick if he would like to be involved in a business negotiation. Gatsby quickly cuts Wolfshiem off from finishing his offer and whisks Nick away from Wolfshiem's table. At the restaurant, Nick and Gatsby run into Tom Buchanan, and after Nick introduces an awkward Gatsby to Tom, Gatsby disappears before they are to meet Jordan.
Later on, Jordan tells Nick that Gatsby and Daisy had been in love before she had married Tom. Daisy had been the most beautiful and sought-after girl in Louisville, and while Gatsby was stationed there during the war, the two had met and promised themselves to each other in October of 1917. But Gatsby was sent to Europe, and after Daisy moped around the house for a few days, she got back into the swing of things and became engaged to the wealthy and prominent Tom Buchanan. Even though Daisy had let go of their love, Gatsby had clung on to it for dear life, and he believed that once he returned to the States after the war, he would be able to reclaim his Daisy. Jordan later reveals to Nick that Gatsby wants him to re-introduce him to Daisy five years after the war had separated them.
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