Holden says that he "didn't exactly flunk out or anything" at Elkton Hills; he "just quit, sort of". He says that one of his biggest reasons for leaving was because he was "surrounded by phonies...that's all...they were coming in the goddamn window". As an example of what he is talking about, he describes the headmaster, Mr. Haas, who was "the phoniest bastard (he) ever met in (his) life". On Sundays, Mr. Haas would greet the students' parents when they drove up to the school, but if a boy had "old funny-looking parents", he would spend little time with them and quickly go to talk to someone else" (Chapter 2).
Elkton Hills, along with the other prep schools Holden has attended, is representative of the corruption and hypocrisy inherent in the educational system and in the world at large. While places like Pency Prep declare that their objective is "to mold splendid, clear-thinking young men" (Chapter 1), in reality, they are institutions rife with cruelty and pretence. Elkton Hills in particular exemplifies the prep school environment at its worst. Holden remembers an incident in particular when a classmate, James Castle, "a skinny little weak-looking guy", would not take back something he said about a very conceited guy, Phil Stabile. What James Castle said was tactless but true, and when Phil Stabile and a group of his friends accosted James and did horrible things to him in a locked room to try to force him to retract his words, James resisted, and finally jumped out of a window to his death. Holden remembers vividly seeing James' bloodied body, clothed in a sweater he had borrowed from Holden. James' death may be seen as being symbolic of lost innocence - his own and Holden's - and the inevitable fate of those who dare to decry phoniness to speak the truth (Chapter 22).
The reason Holden gives for leaving Elkton Hills is the fact that he was surrounded by "phonies". He mentioned the fact that the school was one of the phoniest places he has been to. As we know Holden really hates phonies. He gives us an example as to how the school was phony was, by mentioning an old teacher. This teacher was phony to parents and would like to pretend when the principle came in, and acted "Phony".