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This scene reflects the motif of appearances vs. reality within the novel. The owl-eyed man is the typical guest at Gatsby's parties. He was not invited, stating "I was brought. Most people were brought." His presence is only underscoring the fact that he is taking advantage of Gatsby, as so many others do. He also confides that he's "been drunk for about a week now." The feeling of decadence and extravagance is heavy in his words. Later, he is a passenger in a car accident that occurs as the party is winding down.
So, being a typical guest, he expects everyone to be as fake as he himself. But instead, he is shocked to discover that the books are:
Absolutely real--have pages and everything. I thought they'd be a nice durable cardboard. Matter of fact they're absolutely real. Pages and--Here! Lemme show you.
He then follows it up:
It's a bona fide piece of printed matter. It fooled me. This fella's a regular Belasco. It's a triumph. What thoroughness!
Here he is comparing Gatsby to a playwright known for his sense of realism. He's pointing out that although Gatsby is building a facade through his wealth, he strives to make it a realistic one in every aspect. Gatsby resembles his books-he's real, but unrefined and unreadable.
As his nickname suggests, the Owl-Eyed man actually sees Gatsby and understands him as a man creating an illusion. However, he never judges him and is the only party guest (outside of Nick) to turn up at Gatsby's funeral. Other guests drink and eat at Gatsby's expense, but don't spend time thinking about him the way Owl Eyes does.
Owl Eyes and Nick happen to run into each other in Gatsby's library during a party. Because he realizes Gatsby is projecting a facade, Owl Eyes registers surprise that the books on Gatsby's library shelves are real. He had thought that Gatsby would use cardboard imitations of book covers. He admires Gatsby for going to such great lengths to project an image. However, he also notes that the pages in Gatsby's books are uncut, meaning that while the books are real, Gatsby hasn't read them.
The point of this exchange is to show both that Gatsby is a fraud but also that there's substance and artistry behind the illusion: this foreshadows the way, for instance, that Gatsby's insistence on himself as an Oxford man is both illusory and real: he hasn't attended Oxford as a student for three years like the typical undergraduate, but he did attend for five weeks in conjunction with his military service. Gatsby is both more and less than he seems, an enigma at the heart of the novel. Fitzgerald here calls into question what is real and what is illusion, and where the boundaries between the two might be.
Finally, it's worth noting that Owl Eyes pulls volume one of Stoddard's lectures from Gatsby's shelves. We note that earlier in the book, Tom Buchanan has been reading Goddard's The Rise of the Colored Empires. This is a little joke on Fitzgerald's part: Stoddard is or was a real writer of racist, anti-immigration works while Goddard is a fictitious writer Fitzgerald has invented for Tom to read. Fitzgerald's joke is that the "fake," Gatsby, has the real book (which he hasn't read) while Tom reads the fake. Further, Owl Eyes refers to Gatsby as a "Belasco." Belasco was an actual famous playwright and producer of the era, who innovated with theater lighting, and was also, incidentally, the son of Jewish immigrants, adding to hints of Gatsby's possible Jewish origins and an interesting juxtaposition to Stoddard's racist theories and anti-immigration politics. Like Belasco, Gatsby writes his own script and stages his own drama.
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