What caused the red scare was the recent Bolshevik Revolution in Russia that overthrew the Czar and created the Soviet Union. It was the first time in history that socialism was being attempted on a nationwide scale. Some people were led to believe that immigrants from eastern Europe wanted to do the same thing here in America.
The fear was also brought on by fear of immigration and a general distaste for anarchists. Anarchists had been sending mail bombs to prominent figures, sparking more fears that radical revolutionaries wanted to overthrow the government.
The US government abused its power for an illegitimate political crusade
The Government responded by imprisoning suspected radicals and by deporting immigrants. They would catch these people on raids, of which the largest was on January 2nd, 1920, where more than 4000 people were captured. These were called the Palmer Raids.
New Things:1. Federal Police2. Communists in America
A high profile case of the red scare at its peak was on April 15th, 1921, with the Sacco-Vanzetti case. The two men on trial were immigrants accused of robbing a bank. There wasn't much evidence to convict them, but the fact that they were anarcho-socialists meant that their death warrant was already signed. They were executed and pleaded innocence
Things began shifting back to normal after people began to realize the blatant overstepping of government power, ranging from punishing people for using free speech, to deporting fully legal first generation immigrants for being from the wrong countries.
The effects of the first Red Scare can still be felt today. For example, the Federal Bureau of Investigation was founded at the time to hunt down radicals. Additionally, it resulted in the forming of a Communist labor party and the passing of the Quota Act.