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On 16 January 1920 the Eighteenth Amendment to the Constitution came into force, making it illegal to sell alcohol in the USA. The Anti-Saloon League and the Women's Christian Temperance Union, and some religious groups put pressure on the government to prohibit the production and sale of alcohol. They claimed that alcohol was the work of the devil and that it disobeyed Christianity.

Prohibition was difficult to enforce. As gangsters started selling alcohol, organised crime started. The people who sold alcohol were called Bootleggers. Rum-runners smuggled alcohol into the USA from Canada and Mexico. Moonshiners distilled their own alcohol at home. Illegal drinking bars called speakeasies opened and by 1925 there were over 10,000 of these in New York alone. There was more corruption as gangsters bribed police officers, judges and politicians to turn a blind eye to their illegal activities.

Attempts to try to enforce the Prohibition Act failed. There were not enough agents and they were on low salaries and easy to bribe. It was impossible to persuade drinkers to change a habit of a lifetime.

There were gangsters in every city and during the 1920s groups would fight each other for control of specific areas. In Chicago, Dion O'Bannion controlled the bootleg business in the south of the city and John Torrio in the north. Al Capone later became a prominent character. The Saint Valentine's Day Massacre of 1929 was the climax of the gangster wars between Bugs Moran and Al Capone. Al Capone was finally arrested for tax evasion.

Corruption in politics was another problem in the 1920s. In 1920 Warren Harding was elected President of the USA. He gave important and influential jobs to friends. The Ohio Gang was a group of politicians who were in positions of power during Harding's administration. They betrayed the public's trust in several scandals.

At the beginning of 1924, soon after Harding's death, Congress began investigating reports of corruption and bribery during Harding's administration. Several members of the Gang were charged and imprisoned for corruption. Charles R Forbes was found guilty of fraud, conspiracy and bribery in the Veterans' Bureau. Albert B Fall was found guilty, fined $100,000 and imprisoned for his part in the Teapot Dome scandal. Harry M Daugherty was found guilty of selling alcohol illegally and giving licences and pardons to offenders.