We learn that he is yellow and he knows that he is a coward not as assertive as he should be.
Holden says he would have tracked out where the thief had hidden his gloves and questioned him about them, but he would never brand the person a thief or start a fight.
That turns him yellow since he doesn't care about losing much and lacks the courage to name the man a thief in front of him.
Holden despises fights since he dislikes looking at the other person's face during fighting and believes he isn't competent at it. He stated that he would sooner toss a man out the window or chop off his head with an axe than engage in a fist battle with him.
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