Interestingly, the Valley of Ashes lies between the beautiful villages of East Egg and West Egg and the city of New York. It is, in fact, a dumping ground of industrial waste that has been burned. This valley is a metaphor for the moral and social waste that a materialistic American Dream has wrought. As one critic writes, the Valley of Ashes
...suggests that in the triumph of the industrialized, commercialized, and banalized world to come, the American dream of open horizons and limitless possibilities would be reduced to a burned-out, undifferentiated mass.
In addition, the Valley of Ashes is a metaphor for the corruption of the idealized American Dream of Jay Gatsby who believes in the green light of hope and renewal, who is convinced that he can recapture the past. For, his "holy grail," Daisy, is corrupted as her moral degeneracy is exemplified in her unconscionable avoidance of assuming responsibility for the killing of Myrtle Wilson. According to Myrtle's husband George, the omniscient eyes of Dr. T. J. Ecklebery see this murder and exact punishment through him at the agent of fate.
As an allusion to the Book of Jeremiah in the Old Testament, the Valley of Ashes evokes the warnings of Jermiah to the Israelites that they must desist in their sinful ways or they will be punished. After the Israelites ignore Jeremiah's warnings, they are, indeed, punished and forced to journey to Egypt. In Chapter 31, verse 40 Jeremiah advises the people,
And the whole valley of the dead bodies, and of the ashes, and all the fields unto the brook of Kidron, unto the corner of the horse gate toward the east, shall be holy unto the LORD; it shall not be plucked up, nor thrown down any more for ever.
Made the sacrificial victim, Jay Gatsby is killed by George Wilson, and returns to ashes. Later on, even the Valley of Ashes is transformed.