Although America was known as the 'land of the free', and the 'American Dream' embodied the notion that anyone could rise to the top in society regardless of their origins, Fitzgerald reveals in The Great Gatsby that strong social divisions were already in place, with "indiscernible barbed wire" in between them.
When Nick describes the difference between West Egg and East Egg (based on the Hamptons in Long Island), he seems slightly embarrassed, saying West Egg is "the less fashionable of the two".
The difference is actually one of class, partly between new money and old money, but also of social provenance. In the USA, Protestants of English, Scottish, French, Dutch or German origin formed the social elite. They were the descendants of those immigrants who had originally come to the USA in search of religious freedom, like the Pilgrim Fathers, or to develop business interests. They were well educated and able people, often already wealthy, who quickly formed an aristocracy in all but name.
Poor migrants from Eastern Europe, Poland and Ireland were looked down on. Jewish immigrants, although they might be wealthy, were also excluded socially. Nick makes this clear in his vivid description in chapter four of the visitors to Gatsby's parties.
From East Egg, then, came the Chester Beckers and the Leeches, and a man named Bunsen, whom I knew at Yale and Doctor Webster Civet…
The listed names of the East Eggers: Hornbeam, Voltaire, Blackbuck, Ismay, Chrystie, Hubert Auerbach, Clarence Endive are clearly all of Western European origin, like the characters Buchanan and Carraway.
By contrast, those from West Egg sound East European, Irish or Jewish:
the Poles and the Mulreadys, Cecil Roebuck and Cecil Schoen and Gulick…Eckhaus…Clyde Cohen and Don S Schwartz and Arthur McCarty
In the novel, Gatsby's real name is 'Gatz'. He has anglicised this to 'Gatsby' in order to be more socially acceptable.