In the municipal elections of 1917, against the tide of propaganda and patriotism, the Socialists made remarkable gains. Their candidate for mayor of New York. Morris Hillquit, got 22 percent of the vote, five times the normal Socialist vote there. Ten Socialists were elected to the New York State legislature. In Chicago, the party vote went from 3.6 percent in 1915 to 34.7 percent in 1917. In Buffalo, it went from 2.6 percent to 30.2 percent.

George Creel and the government were behind the formation of an American Alliance for Labor and Democracy, whose president was Samuel Gompers and whose aim was to "unify sentiment in the nation" for the war. There were branches in 164 cities; many labor leaders went along. According to James Weinstein, however, the Alliance did not work: "Rank-and-file working class support for the war remained lukewarm…" And although some prominent Socialists — Jack London, Upton Sinclair, Clarence Darrow — became prowar after the U.S. entered, most Socialists continued their opposition.

Congress passed, and Wilson signed, in June of 1917, the Espionage Act. From its title one would suppose it was an act against spying. However, it had a clause that provided penalties up to twenty years in prison for "Whoever, when the United States is at war, shall willfully cause or attempt to cause insubordination, disloyalty, mutiny, or refusal of duty in the military or naval forces of the United States, or shall willfully obstruct the recruiting or enlistment service of the U.S…" Unless one had a theory about the nature of governments, it was not clear how the Espionage Act would be used. It even had a clause that said "nothing in this section shall be construed to limit or restrict… any discussion, comment, or criticism of the acts or policies of the Government…" But its double- talk concealed a singleness of purpose. The Espionage Act was used to imprison Americans who spoke or wrote against the war.

Two months after the law passed, a Socialist named Charles Schenck was arrested in Philadelphia for printing and distributing fifteen thousand leaflets that denounced the draft law and the war. The leaflet recited the Thirteenth Amendment provision against "involuntary servitude" and said the Conscription Act violated this. Conscription, it said, was "a monstrous deed against humanity in the interests of the financiers of Wall Street." And: "Do not submit to intimidation."

Schenck was indicted, tried, found guilty, and sentenced to six months in jail for violating the Espionage Act. (it turned out to be one of the shortest sentences given in such cases.) Schenck appealed, arguing that the Act, by prosecuting speech and writing, violated the First Amendment: "Congress shall make no law… abridging the freedom of speech, or of the press…"

The Supreme Court's decision was unanimous and was written by its most famous liberal, Oliver Wendell Holmes. He summarized the contents of the leaflet and said it was undoubtedly intended to «obstruct» the carrying out of the draft law. Was Schenck protected by the First Amendment? Holmes said:

The most stringent protection of free speech would not protect a man in falsely shouting fire in a theatre and causing a panic… The question in every case is whether the words used are used in such circumstances and are of such a nature as to create a clear and present danger that they will bring about the substantive evils that Congress has a right to prevent.

Holmes's analogy was clever and attractive. Few people would think free speech should be conferred on someone shouting fire in a theater and causing a panic. But did that example fit criticism of the war? Zechariah Chafee, a Harvard law school professor, wrote later (Free Speech in the United States) that a more apt analogy for Schenck was someone getting up between the acts at a theater and declaring that there were not enough fire exits. To play further with the example: was not Schenck's act more like someone shouting, not falsely, but truly, to people about to buy tickets and enter a theater, that there was a fire raging inside?

Perhaps free speech could not be tolerated by any reasonable person if it constituted a "clear and present danger" to life and liberty; after all, free speech must compete with other vital rights. But was not the war itself a "clear and present danger," indeed, more clear and more present and more dangerous to life than any argument against it? Did citizens not have a right to object to war, a right to be a danger to dangerous policies?

(The Espionage Act, thus approved by the Supreme Court, has remained on the books all these years since World War I, and although it is supposed to apply only in wartime, it has been constantly in force since 1950, because the United States has legally been in a "state of emergency" since the Korean war. In 1963, the Kennedy administration pushed a bill [unsuccessfully] to apply the Espionage Act to statements uttered by Americans abroad; it was concerned, in the words of a cable from Secretary of State Rusk to Ambassador Lodge in Vietnam, about journalists in Vietnam writing "critical articles… on Diem and his government" that were "likely to impede the war effort.")

The case of Eugene Debs soon came before the Supreme Court. In June of 1918, Debs visited three Socialists who were in prison for opposing the draft, and then spoke, across the street from the jail, to an audience he kept enthralled for two hours. He was one of the country's great orators, and was interrupted again and again by laughter and applause. "Why, the other day, by a vote of five-to-four-a kind of craps game, come seven, come eleven-they declared the child labor law unconstitutional." He spoke of his comrades in jail. He dealt with the charges that Socialists were pro-German. "I hate, I loathe, I despise Junkers and Junkerdom. I have no earthly use for the Junkers of Germany, and not one particle more use for the Junkers in the United States." (Thunderous applause and cheers.)

They tell us that we live in a great tree republic; that our institutions are democratic; that we are a tree and self-governing; people. That is too much, even for a joke…

Wars throughout history have been waged for conquest am! plunder… — And that is war in a nutshell. The master class has always declared the wars; the subject class has always fought the battles.…

Debs was arrested for violating the Espionage Act. There were draft-age youths in his audience, and his words would "obstruct the recruiting or enlistment service."

His words were intended to do much more than that:

Yes, in good time we are going to sweep into power in this nation and throughout the world. We are going to destroy all enslaving evil degrading capitalist institutions and re-create them as free and humanizing institutions. The world is daily changing before our eyes. The sun of capitalism is setting; the sun of Socialism is rising… In due time the hour will strike and this great cause triumphant… will proclaim the emancipation of the working class and the brotherhood of all mankind. (Thunderous and prolonged applause.)

Debs refused at his trial to take the stand in his defense, or to call a witness on his behalf. He denied nothing about what he said. But before the jury began its deliberations, he spoke to them:

I have been accused of obstructing the war. I admit it. Gentlemen, I abhor war. I would oppose war if I stood alone… I have sympathy with the suffering, struggling people everywhere. It does not make any difference under what flag they were born, or where they live…

The jury found him guilty of violating the Espionage Act. Debs addressed the judge before sentencing:

Your honor, years ago I recognized my kinship within all living beings, and I made up my mind that I was not one bit better than the meanest on earth. I said then, and I say now, that while there is a lower class, I am in it; while there is a criminal element, I am of it; while mere is a soul in prison, I am not free.