The Donald (Fagen) and Walter Becker who comprise Steely Dan, rarely discuss the meaning or 'exact' interpretation behind each of their songs. They also downplay the fact that their album's carry the name of one song, stating that they really didn't want to emphasize the single song, but selected the title track for various reasons along the way.
Here's some notes from a few interviews found online:
The Royal Scam
Questioner: So what's it about?
WB: About four-and-a-half minutes!
DF: No, Puerto Rico and New York City both figure in the fabric of that lyric. You'll have to construe the rest for yourself, 'cause we don't want to ruin it for you. The mystery is what makes it interesting, isn't it?
WB: If we were to tell you what that song is about, it would be doing a disservice to the song and we would always be lending credence to the notion that in order to enjoy the song you have to know exactly what it means. Or that it does mean exactly one thing. And it doesn't really. None of those things are true.
(A different interview) Questioner: Is the Royal Scam about Puerto Ricans trying to settle in New York?
DF: Because the interpretation is so accurate I wouldn't even want to comment any further.
WB: In other words, you already know more than is good for you.
DF: To tell you the truth, we tend to refrain from discussing specifics as far as lyrics go because it is a matter of subjective interpretation and there are some things that are better that man does not know. You are on the right track and whatever you make of it will suffice really.
(A different interview again)
DF: Of course, the royal scam would mean a confidence trick on a grand scale. That's about all I'd like to say about that song.
WB: 'Cause that Puerto Rico nonsense that someone over here invented is ... I don't know, I think it's gotten out of hand. And it's not really to the point, as far as I'm concerned.
DF: See, that song does have a topical aspect -- and because of that it's dangerous to give specifics, and it is an allegory and it is written in rather Biblical argot, I can tell you that. The song does have a rather poetic way of expressing what we wanted to express. I'm very fond of that lyric.
WB: The Royal Scam isn't the key song. It's regrettable that if you name an album after one of the songs, which is something we don't do all the time, people take it for more than it is. We like each song to be listened to individually without relating to the whole album, although if you record a certain selection of songs the album will have a certain character. Generally, the cheese stands alone.
One of my all-time favorites:
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