In Chapter 3, while attending one of Gatsby's lavish parties, people discuss different rumors about him. One of them says that Gatsby might have killed a man, and then a party-goer named Lucille says that she thinks he was a German spy during the war (meaning World War I). Another man at the party confirms that this information is correct, as he knows someone who grew up with Gatsby in Germany. Another party-goer says that Gatsby couldn't have been a German spy during the war, as he was in the American army during the war. Then, the rumor about how Gatsby killed a man continues to circulate. Nick notes that those who find little to whisper about are inspired to whisper about Gatsby, and he chalks these rumors up to "the romantic speculation" that surrounds Gatsby. By keeping his past a secret, Gatsby inspires wild rumors. The truth about Gatsby, as Nick later discovers, is far less dramatic in many ways.
It is in Chapter 3, when Nick goes to the first of Gatsby's parties that he attends, that he discovers the hive of speculation that surrounds his host and his mysterious background. Very swiftly, he is drawn into gossip surrounding Gatbsy and who he is and his life history. Some say that "he killed someone," others say he was a "German spy during the war," that he grew up in Germany, and others argue that this was impossible as he served in the American army during the war. Nick ironically makes the following comment as he listens to all of this speculation:
It was testimony to the romantic speculation that he inspired that there were whispers about him from those who had found little that it was necessary to whisper about in this world.
This quote captures the mystery about Gatsby, this larger-than-life figure, and also the way that, to a certain extent, it suited Gatsby to build up this "romantic speculation" concerning him precisely to get him talked about and discussed, which is part of his aim in eventually winning Daisy back. It is also important to remember that Gatsby fills his house with guests who do not know him and are happy merely to gossip maliciously about his identity and past. Gatsby is completely separate from such frivolity.