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This passage occurs in the beginning of the novel when Nick goes to dinner at Tom and Daisy's house. During the evening, Tom suddenly starts talking about a book he has read, The Rise of the Coloured Empires:
Well, it's a fine book and everybody ought to read it. The idea is if we don't look out the white race will be--will be utterly submerged. It's all scientific stuff; it's been proved . . . It's up to us who are the dominant race [Nordic] to watch out or these other races will have control of things.
Tom's remarks show two things: He is an ignorant racist, and he is very proud of having read a book. Nick, for one, is quite surprised that Tom has read a book; in college Tom was never known for his intellect--only for his football skills.
Tom is a racist who thinks the Nordic "race" is the repository of civilization and who fears it is being overrun by the darker-skinned hordes. He warns Nick of this early in the novel, saying he has just read a book called The Rise of the Colored Empires by a man named Goddard. Actually, this is a reference to a real book by Theodore Lothrop Stoddard called The Rising Tide of Color Against White World Supremacy.
Daisy dismisses this interest of Tom's, and Nick sees it as outdated. Significantly, Tom will identify Nick and Jordan without hesitation as Nordics, while he pauses, just for a moment, before including Daisy in the category.
Tom's racism is part and parcel of his polo-pony, old money elitism. Only a narrow sliver of people in the world are truly like him in his estimation. When he finally does go to one of Gatsby's parties, he dismisses most of the individuals there as riffraff.
Nick understands Tom's racism as part of his limited intellect, but it becomes important in understanding Tom's reaction to Gatsby. Tom does not see the former James Gatz as a "Nordic." He is incredulous that Daisy would get involved with Gatsby, seeing him as only fit to make deliveries to the back door of the Buchanan mansion and implying that if Gatsby and Daisy were to get together, the next step would be racially mixed marriages.
Class is quite important to this novel, and Tom's racism can be understood as a way for him to maintain class privilege in a changing post-war world. Tom's reaction also suggests that Gatsby's ethnicity is not entirely Northern European.
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