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The Scare had its origins in the hyper-nationalism of the Great War as well as the Russian Revolution. At the war's end, following the October Revolution, American authorities saw the threat of Communist revolution in the actions of organized labor, including such disparate cases as the Seattle General Strike and the Boston Police Strike and then in the bomb campaign directed by anarchist groups at political and business leaders. Fueled by labor unrest and the anarchist bombings, and then spurred on by United States Attorney General A. Mitchell Palmer's attempt to suppress radical organizations, it was characterized by exaggerated rhetoric, illegal search and seizures, unwarranted arrests and detentions, and the deportation of several hundred suspected radicals and anarchists. In addition, the growing anti-immigration nativism movement among Americans viewed increasing immigration from Southern Europe and Eastern Europe as a threat to American political and social stability.
Bolshevism and the threat of a Communist-inspired revolution in the U.S. became the overriding explanation for challenges to the social order, even such largely unrelated events as incidents of interracial violence. Fear of radicalism was used to explain the suppression of freedom of expression in form of display of certain flags and banners. The Red Scare effectively ended in mid-1920, after Attorney General Palmer forecast a massive radical uprising on May Day and the day passed without incident.
The Red Scare's origins lie in the subversive actions (both real and imagined) of foreign and leftist elements in the United States, especially militant followers of Luigi Galleani, and in the attempts of the U.S. government to quell protest and gain favorable public views of America's entering World War I. At the end of the 19th century and prior to the rise of the Galleanist anarchist movement, the Haymarket affair of 1886 had already heightened the American public's fear of foreign anarchist and radical socialist elements within the budding American workers' movement. In 1917, President Woodrow Wilson established the Committee on Public Information to circulate and distribute anti-German and pro-Allied propaganda and other news. To add to the effectiveness of the Committee, the Bureau of Investigation (the name for the Federal Bureau of Investigation until 1935) disrupted the work of German-American, union, and leftist organizations through the use of raids, arrests, agents provocateurs, and legal prosecution. Revolutionary and pacifist groups, such as the Socialist Party of America and the Industrial Workers of the World (IWW; its members are known as Wobblies), strongly opposed the war. Many leaders of these groups, most notably Eugene V. Debs, were prosecuted for giving speeches urging resistance to the draft. Members of the Ghadar Party were also put on trial in the Hindu–German Conspiracy Trial.
The effort was also helped by the United States Congress, with the passing of the Espionage Act in 1917 and its sister act the Sedition Act of 1918. The Espionage Act made it a crime to interfere with the operation or success of the military, and the Sedition Act forbade Americans to use "disloyal, profane, scurrilous, or abusive language" about the United States government, flag, or armed forces of the United States during war.
After the war officially ended, the government investigations abated for a few months but did not cease. They soon resumed in the context of the Russian Revolution of 1917, the Russian Civil War, and the Red Terror. To some Americans, this was a time of uncertainty and fear over the prospects of an anarchist, socialist or communist revolution in the United States.
In February 1919, there was a five-day general work stoppage by more than 65,000 workers in the city of Seattle, Washington, which lasted from February 6 to February 11 of that year. Dissatisfied workers in several unions began the strike to gain higher wages after two years of the Great War wage controls. Most other local unions, including members of the American Federation of Labor (AFL) and the Industrial Workers of the World (IWW), joined the walkout. Although the strike was non-violent and lasted less than a week, government officials, the press, and much of the public viewed the strike as a radical attempt to subvert US institutions.
Some commentators raised alarm by calling it the work of Bolsheviks and other radicals inspired by "un-American" ideologies, making it the first concentrated eruption of the anti-Red hysteria that characterized the Red Scare of 1919 and 1920.
In the spring and early summer of the same year, the anarchist followers of Luigi Galleani attempted numerous bombing operations throughout the US.
In the summer and early fall, race riots in several major American cities took place. The riots resulted from a variety of postwar social tensions related to the demobilization of veterans of the Great War, both black and white, and competition for jobs and housing among ethnic whites and blacks. In addition, it was a time of labor unrest in which some industrialists used blacks as strikebreakers, increasing resentment. The riots were extensively documented in the press, which along with the federal government feared Socialist and communist influence on the black civil rights movement following the Bolshevik Revolution in Russia and the Spartacist Revolution in Germany. They also feared foreign anarchists, who had bombed homes and businesses of prominent business and government leaders.