THE PALM COURT in New York's Plaza Hotel is a very classy place to stop for tea. Impeccably dressed waiters, who click their heels and stride with the stiff elegance of Russian officers in a Hollywood extravaganza, serve coffee in glistening silver coffeepots. Fragments of blase conversations about grand openings and charity balls and Tiffany diamonds drift above the fronds of potted palms encircling the cozy tables.

But one does not pay the cafe's outrageous bills for the impassive waiters, the richly aromatic coffee or the proximity to Bergdorf's and Saks, or even for the Bavarian chocolate cake or the fresh strawberries sinking into whipped cream castles in the middle of February. The fee is for the privilege of engaging in one of America's favorite sports: gazing at the idle rich. Americans are notorious people watchers, and every afternoon between 3:30 and 4:00, the Fifth Avenue window shopper swarm into the Palm Court, trying to casually blend in with the Fifth Avenue shoppers, surreptitiously glancing at the rich matrons and other Beautiful People.

It should come as no surprise, then, if the characters in Louis Auchincloss's new novel The Dark Lady have an instant appeal for many readers. His protagonists would fit right into the Palm Court, and they are the ogled, not the oglers. They move in a world of wealth, status and power, and even their tragedies are tinged with high society glamor. And tragedies abound in this occasionally melodramatic, disjoined story, which opens during the Depression, develops which opens during the Depression, develops through World War II, skips over the Armistice years and picks up again early in the McCarthy era.

Elesina Dart is the dark lady. Well-born, though only moderately wealthy, Elesina is a twice-divorced, hard-drinking rebellious actress in her early '30s when she meets social climber Ivy Trask. Ivy is a homely fashion editor whose shrewdness and harshness eventually garner her more than grace and beauty alone would have. Elesina becomes Ivy's protegee, or more accurately, her obsession, and together they fabricate the credentials necessary to enter the upper echelons of New York society. Ivy becomes an unwanted but tolerated member of the select world but Elesina, after her dramatic and scandalous entrance, becomes first a secure part of high society and then one of its sovereigns. The Dark Lady is the story of Elesina's rise and conquests, which take place primarily within, and at the expense of the Stein family.

Ivy cleverly maneuvers Elesina into the "salon," where poets recite new odes over cocktails and scholars extemporise treatises on Shakespeare at the dinner table. Irving Stein, who heads this circle, is a Jewish multimillionaire banker who heads this circle. His ideal in life is to create a "temple of beauty" at Broadlawns, his weekend estate. Clara, his unloved but valuable because Protestant wife, is "the centerpiece of his collection, the beautiful woman to whom the beautiful porcelains, the ivories and jades, the medieval tapestries and stained glass paid silent tribute," the "priestess for the shrine" in the suburbs.

David is their youngest son, a curly-haired Adonis who dreams like a Don Quixote. David's tragedy is that he confuses morality, dignity romance and passion. He fights Hitler at Dunkirk, still haunted by the memory of prep school bigotry and the hollow echo of his father's words, offered as a feeble solace: "Some of my best friends are anti-Semites."

Characters like Ivy are the salvation of many authors. Ivy epitomizes the calculating bitch without becoming a caricature. None of her actions strain credibility, and this is an asset for a plot that gets as cluttered as this one does. Ivy realizes her thwarted spinster dreams through Elesina. Anticipating or rather shaping the impact Elesina has on the Stein men, Ivy patiently builds the foundation for the power she knows Elesina eventually will wield. Disregarding the sacrifices the Steins and eventually she herself make for Elesina. Ivy engineers a divorce, schedules rendezvous for adulterers, sheds the appropriate number of tears at funerals and calmly confronts suicide. The one obstacle she does not foresee is that Elesina, whose egotism and avarice Ivy kindles and nurtures, eventually, albeit belatedly, develops at least an embryonic conscience, making Ivy expendable.

THIS CHANGE in Elesina, culminating in the final third of the book, is sketchy and weakens the whole story. Some of the characters, including Ivy and Irving, are vividly etched. Others, despite the colorful capsule case histories Auchincloss graciously offers, are not quite comprehensible. Unfortunately, Elesina is one of the incomplete characters. The rich, spoiled beauty is quite frankly not believable in her role as a Republican Carthyism, (which Auchincloss treats frothily as a minor disturbance.)

The episodes and traumas often veer toward the neo-Gothic, with social secretaries replacing spinster govenesses, and gay cousins occupying closets that mad old women once inhabited. Auchincloss also occasionally mires himself in melodramatic ramblings that he evidently perceives as powerful prose ("Orgasm with David was like the raising of a communion cup before an altar that knew no sacrament but love.") but these indulgent tirades are only sporadic; Auchincloss is generally a smooth and vivid writer.

The characters' own musings on art and literature occasionally sound as pretentious or ridiculous as the New Yorker at its worst--("Art was a process of conversion, a machine that could turn even garbage into something clean and glistening").

But more often, the author's obvious personal intelligence, coupled with that which he bestows on his characters, including the women, counteracts the nose in the air excesses. The theatrical, artistic and literary allusions (not to mention numerous Harvard Law School alumni) that Auchincloss generously strews throughout the novel usually liven, rather than overburden his dialogue.

OCCASIONALLY, however, the scholarly approach backfires. When David, pondering an affair with his stepmother, mentions Phaedre, Auchincloss is unsubtly and rather stupidly warning the reader that the plot's next twist is unoriginal; footnotes are admirable in a scholarly essay but they don't blend well into the dialogue of a novel. And if the references to Hedda Gabler are supposed to fill vacuums in Elesine's character with delicate but complex psychological motives, Auchincloss is either flattering himself or insulting the reader. As Auchincloss he is really quite admirable. As Ibsen or as Racine, he is, however, disappointing.

Auchincloss may strut a bit but he does not moralize. He delivers no indictments against aging millionaries who swap loyalty for beauty, and neither lauds nor ridicules youths who seek truth in the trenches of a war. And Elesina, the dark lady with the soaring ambition who taints all those who come close to her, does not pay for her sins, at least not as dearly as her friends, family and lovers pay for her. At the end of the book Elesina is still stunning, still wealthy, still powerful, and still adored. Even the palm fronds would tremble in her presence; Elesina is a twisted version of the American dream.