There was growing suspicion about Gatsby within the context of the novel including the curiosity of a reporter, which actually begins this chapter. This is part of the reason Nick chose to include the history of Gatz at this point. The other reason, more connected to Nick and the major themes of the novel (appearance/reality, the American dream), was Nick’s fascination with this man. Gatsby was actually the type of person Nick would tend to dislike: a socialite, elitist, throwing parties for other socialites that he is not really close to, seemingly superficial, and engaged in bootlegging/drug dealing. Nick mentions, early in the novel, how he prides himself on honesty. Here we have Gatsby who is living a lie and yet Nick finds something endearing about him. Nick is connected to Gatsby (or Gatz) because he is, like Nick, from a small town and naively chasing a dream. This history of Gatz could probably have occurred earlier in the novel, but that would go against the premise of the book. Fitzgerald had to wait to give this history because the reader is getting the story from Nick. Nick first met Gatsby; it wasn’t until much later that he learned of Gatz and this really helped him understand the man and why he found Gatsby/Gatz so fascinating. In order to give the reader a complete concept of Gatsby, Fitzgerald first had to develop the character of Gatsby before he could present his alter ego Gatz.