Daisy went up-stairs to wash her face—too late I thought with humiliation of my towels—while Gatsby and I waited on the lawn.
Well well well…
So, Nick, our dispassionate narrator, is subject to social norms and pressures after all. For all his self-imposed distancing (see Chapter 1) and dubious self-control, Nick is worried about how his TOWELS will reflect on him. What would Daisy say if she saw these?
Nick attempts to be on the periphery, but cares about the exciting people he mixes with, by which I mean he cares what they think of him.
To help improve the meaning of these lyrics, visit "The Great Gatsby (Chapter V)" by F. Scott Fitzgerald and leave a comment on the lyrics box