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Pony Curtis is the teenage narrator and protagonist of the novel. When his parents were killed in a car accident, Darry, his twenty- year-old brother, began to provide for him. He resents Darry's bullying manner, not realizing that he does so because he loves him and wants him to make something of himself. Pony belongs to an eastside gang of poor teenagers, called the Greasers; their rivals are the Socs, the rich kids living on the west side of town.
Pony's antagonist is his status in life. Poor and from the wrong side of town, he gets no breaks in life, even though he is a good student and studies hard. He joins the Greasers because it is the thing to do if you live on the east side of town. Their rivals are the Socs, a gang of rich, spoiled kids living on the west side of town. The Socs constantly pick fights with the Greasers, and Bob, one of the Socs, attacks Johnny and Pony because they have been friendly with Cherry. Johnny kills Bob in self-defense, and he and Pony go into hiding in a church in Windrixville. When the church catches on fire, Johnny and Pony try to save the children trapped inside. Johnny is serious injured during the rescue and dies a few days later in a hospital.
Dally, who was Johnny's best friend, is completely shattered by his death. Crazy with grief, he robs a store and then threatens the police with an unloaded gun. As a result, he is killed. Now Pony has lost two friends. He falls sick, becomes delirious, tries to deny Johnny's death, and begins to fail in school.
The climax occurs when Pony reads the letter that Johnny has written to him before his death. Johnny encourages his friend to "stay gold" - to look for the sunsets and good things in life. He tells Pony that if he tries, he will be able to make something worthwhile out of his life. Reading the letter is the turning point in Pony's life.
The novel ends as a tragic comedy. Even though Bob, Johnny, and Dally have needlessly perished, Pony overcomes his problems, largely due to Johnny's letter of encouragement. He reconciles with Darry, finally understanding how much his older brother loves and cares for him. He also accepts that he does not have to be an outsider or a Greaser for the rest of his life. In order to seek help and understanding for underprivileged children like himself, Pony's mission becomes to tell others about the immense obstacles that stand in the way of success for teenagers from the wrong side of town. The novel, therefore, ends on a note of hope and optimism.