The transition from war to peace was, for many, tumultuous. A massive influenza epidemic, which had spread rapidly throughout Europe in 1917, broke out in the United States in the spring of 1918. Before it vanished a year later, as mysteriously as it had begun, it claimed the lives of more than half-a-million Americans.
The immediate economic boom right after the war led to high expectations that were quickly sunk once the postwar economy returned to normal. In turn, labor became dissatisfied with the rising costs of living, long hours and unsympathetic management. In 1919 alone, over 4 million workers went on strike. During that summer, moreover, race riots broke out in both the North and South.
Yet the event that triggered the greatest national outcry and concern had occurred two years earlier outside the United States: the Bolshevik Revolution of 1917 in Russia. With morale low, Americans became fearful that, just as a small faction had seized power in Russia, so could a similar group take over the United States. This fear crystallized when, in April 1919, the postal service intercepted nearly 40 bombs addressed to prominent citizens.
Attorney General A. Mitchell Palmer set up a new office of general intelligence within the Justice Department, and appointed J. Edgar Hoover as its head. Hoover began collecting files on known radicals, and raids on various organizations led to deportations of scores of people. Although Palmer's dire warnings continued to fuel what became known as the "Red Scare," the threats never materialized; and by the summer of 1920, the American people realized that the United States was safe from anarchy.
Source: U.S. Department of State