The paragraph you quote is from "A Study in scarlet", by Sir Arthur Conan Doyle. To give a little perspective, it was the first book to introduce the characters of Sherlock Holmes and John Watson, and as they have just moved into 221b Baker Street together, Watson is still trying to get to know his new housemate better.
To add a little more perspective to the quoted paragraph itself, Watson is reading an article about the art of deduction, which attempts to show how much a person might learn through accurate and systematic observation of their surroundings. From the book:
The writer claimed by a momentary expression, a twitch of a muscle or
a glance of an eye, to fathom a man's inmost thoughts. Deceit,
according to him, was an impossibility in the case of one trained to
observation and analysis.
By a man's finger nails, by his coat-sleeve, by his boot, by his
trouser knees, by the callosities of his forefinger and thumb, by his
expression, by his shirt cuffs — by each of these things a man's
calling is plainly revealed.
Watson is quite skeptical of this, as he states - "It struck me as being a remarkable mixture of shrewdness and of absurdity".
Now to your quoted paragraph:
"What ineffable twaddle!" I cried, slapping the magazine down on the
table, "I never read such rubbish in my life."
"What is it?" asked
"Why, this article," I said, pointing at it with my
egg spoon as I sat down to my breakfast. "I see that you have read it
since you have marked it. I don't deny that it is smartly written. It
irritates me though. It is evidently the theory of some arm-chair
lounger who evolves all these neat little paradoxes in the seclusion
of his own study. It is not practical. I should like to see him
clapped down in a third class carriage on the Underground, and asked
to give the trades of all his fellow-travellers. I would lay a
thousand to one against him."
In the bold text, Watson is referring back to the writer's earlier claim that he could tell a man's calling, or profession, simply by observing details such as his finger nails, coat-sleeve, boot, trouser knees, the calluses on his hands and so on. A "third-class carriage on the Underground" would have been where on would have expected to see working class people, tradesmen and so on, travelling on the London underground train system, and Watson is making a hypothetical bet, that he would like to see the writer placed (or 'clapped down') in one of the carriages, and for him to use the skills he boasts about in the article to work out the professions of the other passengers in the carriage. He bets against the writer being successful by a large margin - 1000/1 odds against him being successful.
As it transpired, unknown to Watson, Holmes was the author of the article, which sets the scene fro Watson to be impressed by Holmes's deductive abilities.