The dividing line between "historical situation" and "material circumstances" may seem somewhat vague, but generally you might consider imposing this rule: if you can only talk about it, it's historical, but if you could touch it, it's material. For instance, the historical circumstances of "On the Quai at Smyrna" involved the failed Greek invasion of Turkey, the successful Turkish counterattack, the vicious tactics employed by both sides against civilian populations who were used for military purposes to use up troops' time and materiel to aid them. That accounts for the British officer's cynical attitude. Both sides are being awful, the civilians haven't a chance, there's almost nothing he can do, and he's being made psychologically numb. The material circumstances involve the officer's command of a powerful naval vessel, the civilians' poverty and fear and helplessness, the Turkish commander's possession of artillery that might or might not be used against the ship and docks, the use of mules as pack animals in the first mechanized World War, the processes of childbirth, dying, etc. One could even invoke the tale's notable absence of material circumstances of narration, the lack of a locale for the invisible auditor's reception of the officer's tale (is he telling our narrator/listener in a bar, a railroad car, in Paris, in Chicago?).
In The Great Gatsby, Fitzgerald makes a lot of the material conditions which define class in America in the mid-1920s: houses of various sizes and decors, a gas station (one of many he invokes!), popular magazines, automobiles, polo ponies, ash heaps, wind-blown curtains, railroad trains, lots illicit liquor of various sorts ("four cocktails just in from the pantry" , "a corky but rather impressive claret" , "The bottle of whiskey--a second one" , "a quantity of champagne" , "a bottle of sauterne" , "A little champagne?" , "she was stupid with liquor" ), and a little puppy with an expensive leash and a box of dog biscuits. I could go on, of course, because FSF has saturated the novel with entirely countable (almost wrote "countless"!) references to objects from American life. A New Critic would develop a theme from them, one involving a metaphor or an irony or a paradox. A Marxist would ask what they mean in socio-economic terms as they represent the material circumstances of the characters.