The United States emerged from World War I as the wealthiest nation in the world. Yet much industrial and social unrest marked the years immediately following the war. Business depression alternated with prosperity. In contrast to prewar standards, wages were relatively high, but much of this gain was offset by high prices. Many strikes occurred. Rapid demobilization of the armed forces and abrupt cancellation of wartime contracts resulted in heavy unemployment.
For a time there was widespread fear of radical doctrines, European in origin, that preached the overthrow of existing political and economic systems. In the "red scare" of 1919-20, many aliens suspected of being sympathetic to Communism were arrested and a number were deported. The "red scare" continued well into the 1920's.
Another reflection of social unrest was the rise of a politically powerful secret organization calling itself the Ku Klux Klan, an imitation of the organization of the same name that operated during the Reconstruction period. The KKK spread prejudice not only against blacks but also against Roman Catholics, Jews, and foreign-born citizens.
A vast migration of blacks from the South began during the war and continued in the postwar period. Hundreds of thousands moved to the industrial centers of the North in search of improved social and economic conditions. Most met widespread discrimination and were forced into overcrowded ghetto areas.
The Volstead Act to enforce prohibition of the sale of alcoholic beverages was passed by Congress over President Wilson's veto in 1919. There was widespread violation of this law. Bootlegging (the selling of illegal liquor) became an organized activity dominated by gangsters.
Three Republican Presidents, Warren G. Harding, Calvin Coolidge, and Herbert Hoover, served from 1921 to 1933.