J. Edgar Hoover

America was affected by a series of severe social conflicts following World War I. Skyrocketing prices, nationwide strikes, revolutions throughout much of Europe and signs of a serious threat from radicals at home created a sense that the nation was under attack. Passage of both Prohibition (Eighteenth Amendment, making alcohol illegal) and Women's Suffrage (Nineteenth Amendment giving women right to vote) in 1919 reflected a change in the national character.

The fear of communism and political conspiracies ran high, in a phenomenon called the "Red Scare" from the association of Soviet communism with the color red, later a prominent color of the Soviet Union's flag. The perceived threat of a communist menace escalated in 1919 with a series of bombings against leading politicians. Public outcry reached fever pitch on the evening of June 2, 1919, when a number of bombs were detonated within an hour of each other in eight eastern cities, including Washington, D.C. One bomb partially destroyed the home of newly appointed attorney general A. Mitchell Palmer (1872–1936).

With President Woodrow Wilson preoccupied with the World War I peace treaty and bedridden by strokes, the nation's problems fell under the jurisdiction of the attorney general. New to his position, Palmer depended on the advice of his employees. He assembled a new General Intelligence Division (GID) at the Department of Justice with responsibility for investigating the strength of radical political organizations in the United States.

Palmer recruited J. Edgar Hoover as his special assistant and appointed him chief of the GID. By the fall of 1919 Hoover reported that radicals posed a real threat to the U.S. government. He advised drastic action be taken against a possible revolution. Under intense pressure from Congress and the public, Palmer clamped down on political dissent and agreed to deport many alien (foreign) radicals. Because the peace treaty had not yet been signed, Palmer decided that he could make use of extraordinary wartime powers under the Sedition Act of 1918 and the Espionage Act of 1917.

These acts made it a crime to interfere with military forces or promote the success of enemies of the United States. Palmer and Hoover orchestrated a series of well-publicized raids against any socialist supporter deemed capable of carrying out terrorist acts.

The "Palmer Raids" were conducted in over thirty cities nationwide with the arrests made by members of the Justice Department along with local police. The raids came without warning and focused on aliens rather than citizens whenever possible. Thousands of suspected radicals were arrested, most without proper arrest warrants and held without trial for up to four months. After investigation of each case by the Labor Department, the majority of those held were released.

In December 1919 only 248 of those arrested were actually deported. They were placed on a ship called the Buford bound for the Soviet Union. The public lost interest by the spring of 1920 as further terrorist attacks failed to materialize. By the fall when a bomb exploded on Wall Street, most American's considered the attack to be an assault by a deranged individual rather than a socialist conspiracy.