Holden finds Pencey Prep a phony place for several reasons, he observes that the school has an ad showing a guy riding a horse jumping over a fence. He finds this false advertisement since he tells us:
"Like as if all you ever did at Pencey as play poo all the time. I never even once saw a horse anywhere near the place." (Salinger)
Holden also does not believe the tag line of the advertisement that says:
"Since 1888 we have been molding boys into splendid, clear-thinking young men." (Salinger)
Holden takes great offense at this suggesting that Pencey does not mold young men any more than any other school, and he should know, since he has been to several. This motto offends Holden particularly, since he is not a clear-thinking young man, far from it.
Holden also comments on the quality of school spirit, or what is expected with regard to school spirit. Everyone goes to the football games and gets very excited at the games, cheering and screaming for their team. He views this as over the top.
"You could hear them all yelling, deep and terrific on the Pencey side, because pratically the whole school except me was there,... and you were supposed to commit suicide or something if old Pencey didn't win." (Salinger)
Holden rejects school spirit, he does not want to celebrate anything and finds the whole process of football, cheering and getting excited for your team a waste of time, and therefore it is phony.
Holden tells us that the school, although full of rich kids, is full of crooks. He says there are thieves who prowl around the halls and steal from students rooms. It boggles his mind that rich kids would steal, you can't get anymore phony than that, what a great contradiction.
"The week before somebody's stolen my camel's hair coat right out of my room, with my fur-lined gloves right in the pocket and all." (Salinger)