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This is a quote by Nick as he regarded the information that Jordan just gave him. She told him that Gatsby bought the house he bought to be near Daisy. She has also told him the story of how Daisy and Jay met and how it came to be that Daisy married Tom rather than Jay. This quote contributes to the overall meaning of the story because Jay Gatsby was born suddenly; that is, the man was born James Gatz and only suddenly became Jay Gatsby when Dan Cody asked him his name years before. Jay recreated himself not just then, but later, in the years following the war and before the start of the story. When Jay and Daisy parted as Jay left for war, Jay was poor. He worked hard to re-invent himself as a wealthy man. It is therefore somewhat ironic that Nick sees this information as a sort of "birth" for his understanding of Jay Gatsby. Furthermore, this quote contributes to the overall meaning because of the words "purposeless splendor". Waste, in many forms, is one of the themes of the story and the word "purposeless" is a word about waste. Of course, "splendor" describes the lifestyles enjoyed by the Buchanans and by Jay Gatsby.
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