Times were great for middle-class Americans in the 1920s, but a vast gulf existed between the rich and the poor. While industrialists such as Henry Ford and John D. Rockefeller earned tens of millions dollars annually, the average millworker or miner brought home only about forty dollars a month. And without union protection, many factory workers labored sixty hours a week under unbearably harsh sweatshop conditions.

Those who protested or tried to form unions to fight back were labeled communists by bosses and politicians who feared that an organized workforce might rise up and take over the factories. These worries were not entirely unfounded. In 1917 communist revolutionaries, known as Bolsheviks, toppled the Russian government, killed Czar Nicholas II and his family, and began an era of dictatorial rule. As the communists raised the red flag over the Russian capital in Moscow, a "Red Scare...