On the bottoms lie the incredible refuse of the sea, shells broken and chipped and bits of skeleton, claws, the whole sea bottom a fantastic cemetery on which the living scamper and scramble (18.4)
So every time you squish your toes in the sand, you're stepping on skeletons. Yikes. But Steinbeck doesn't seem grossed out by this. For the narrator, it's just "incredible" that the ocean floor is a big graveyard. Death and bones are part of what makes nature so fantastic.