In Chapter 2 of The Catcher in the Rye, Mr. Spencer asks Holden why he was expelled from Elkton Hills prep school. Holden doesn't try to explain because he feels that the old man wouldn't understand him. However, he confides to the reader that:
One of the biggest reasons I left Elkton Hills was because I was surrounded by phonies.
Holden also thinks that Pencey is full of phonies. These are adolescent boys he is talking about. By Holden's standards most of us are probably phonies at that time of life. We are not exactly trying to find out who we are, but trying to make up an identity based on some people we admire and on our fantasies about who we would like to be. The following statement by V. S. Pritchett, English author and critic, sums it up pretty succinctly:
Well, youth is the period of assumed personalities and disguises. It is the time of the sincerely insincere.
It seems fair enough to say that Holden is a phony himself but that he can't see it in himself, only in others. He must be aware that he does a lot of pretending. Throughout the novel he is trying to appear older and more sophisticated than he really is.
Holden is reluctant to explain to Pencey teacher Mr Spencer about his 'difficulties' at Elkton Hills School. He explains himself with typical teenage slang, ' I didn't exactly flunk out or anything. I just quit, sort of'. He is suggesting, half-heartedly, that the decision to leave was his own. The reader will note that on the other hand, it is the school that has taken the decision to expel him from Pencey.
Privately he elaborates 'I left Elkton Hills...because I was surrounded by phonies..they had this hadmaster, Mr Haas, that was the phoniest bastard I ever met in my life'. For Holden, Haas is a phoney because he doesn't treat poorer parents as politely and charmingly as he treats richer ones. It incenses Holden that in the supposedly level playing field of education, class and wealth should be an issue.
This is the first mention of 'phonies' - the first of many - in the book and is therefore very significant. Here, as later, it demonstrates Holden's idealism, his unwilingness to accept life's inconsistencies. However, the fact that he 'quit', shows that at this stage in his development, he is running away rather than facing up to life's inequalities in a more mature fashion.