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This Act governed American immigration policy until the passage of the Immigration and Nationality Act of 1952, which revised it completely. For the first four years, until June 30, 1927, the 1924 Act set the annual quota of any nationality at 2% of the number of foreign-born persons of such nationality resident in the United States in 1890. That formula reduced total immigration to the United States from 357,803 in 1923–24 to 164,667 in 1924–25. The law's impact varied widely by country. For example, immigration from Great Britain and Ireland fell 19%, while immigration from Italy fell more than 90%.
The Act also established preferences under the quota system for certain relatives of U.S. residents, including their unmarried children under 21, their parents, and spouses aged 21 and over. It also preferred immigrants aged 21 and over who were skilled in agriculture, as well as their wives and dependent children under age 16. Exempted from quotas were wives and unmarried children under 18 of U.S. citizens, natives of Western Hemisphere countries, with their families non-immigrants and certain others.
The 1924 Act also established the "consular control system" of immigration. It divided responsibility for immigration between the State Department and the Immigration and Naturalization Service. It also required that no alien should be allowed to enter the United States without a valid immigration visa issued by an American consular officer abroad. It provided that no alien ineligible to become a citizen could be admitted to the United States as an immigrant. The Act also imposed fines on transportation companies who landed aliens in violation of U.S. immigration laws.
The Act followed concerns amid the Post-World War I recession held by many Americans who believed that bringing in more immigrants from other nations would make the unemployment rate higher. It was also in part the product of "The Red Scare" of 1919–1921, in which Woodrow Wilson's Attorney-General Mitchell Palmer warned about rampant foreign radicals migrating to undermine American values, wanting to provoke an uprising like Russia's 1917 Bolshevik Revolution.
Congressman Albert Johnson and Senator David Reed were the two main architects of the act. They knew a popular political issue when they saw one and the Act passed with strong congressional support. There were only nine dissenting votes in the Senate and even fewer in the House. One of these was freshman Brooklyn Representative and Jewish-American Emanuel Celler, who made the repeal of the Act his personal crusade during the rest of his career.
In speaking in the Senate in support of the bill, Reed said that the previous immigration legislation "disregards entirely those of us who are interested in keeping American stock up to the highest standard – that is, the people who were born here". He said that many immigrants arrived from their homeland in a sick and starving condition and were less capable of contributing to the American economy, and unable to adapt to American culture.
The law had support from many politicians from California, where a majority of Japanese and other East Asian immigrants had settled. The Chinese Exclusion Act of 1882 had already put an end to Chinese immigration, but Japanese, Korean and Filipino laborers were still arriving in Western states, which created an exclusionary movement among locals who feared that their jobs would be lost to these immigrants who provided cheaper labor. Despite some hesitation from President Calvin Coolidge and strong opposition from the Japanese government, the act was signed into law on May 24, 1924.
Despite putting his pen to this restrictive law, President Coolidge did not appear to be motivated by prejudice or racist attitudes that many in his day possessed. Coolidge realized that he faced majorities too strong in Congress for a president to override supported the act. When he signed the bill, he said in his accompanying message that be found the provision concerning the exclusion of Japanese immigrants the Act to be "unnecessary and deplorable", adding “If the exclusion provision stood alone I should disapprove it.”
Coolidge was a supporter of the concept of immigration controls. In his 1923 State of the Union message, he said: "New arrivals should be limited to our capacity to absorb them into the ranks of good citizenship. America must be kept American. For this purpose, it is necessary to continue a policy of restricted immigration."
Coolidge later reaffirmed his abhorrence of prejudice against immigrants in a couple of speeches that he gave. Speaking at the 1925 American Legion convention in Omaha, Nebraska, Coolidge said "Whether one traces his Americanism back three centuries to the Mayflower, or three years of the steerage, is not half so important as whether his Americanism of to-day is real and genuine. No matter by what various crafts we came here, we are all now in the same boat." In another address given in 1926 at the dedication of the statue of John Ericsson (the Swedish immigrant who pioneered the technology for the Monitor class of ships were used in the Civil War) Coolidge said "When once our feet have touched this soil, when once we have made this land our home, wherever our place of birth, whatever our race, we are all blended in one common country. All artificial distinctions of lineage and rank are cast aside. We all rejoice in the title of Americans."
With the imposition of the 1924 quota, the number of annual immigrants from Italy was reduced from an average of 200,000 to just 4,000. 86% of the 155,000 permitted to enter under the Act came from Northern European countries, with Germany, Great Britain, and Ireland having the highest quotas. The new quotas for immigration for Southern and Eastern European countries were so restrictive that in 1924 there were more Italians, Czechs, Yugoslavs, Greeks, Lithuanians, Hungarians, Portuguese, Romanians, Spaniards, Jews, Chinese, and Japanese that left the United States than those who arrived as immigrants. The quotas remained in place with minor alterations until the Immigration and Nationality Act of 1965.