Cartoon from Struwwelhitler featuring Stalin, 1941 The use of propaganda by the allies during the First World War came under critical scrutiny in the 1920s. Many German atrocity stories that had been the basis of lurid cartoons were exposed as myth, not least by veterans of the wartime British propaganda campaign such as the pacifist Labour MP, Arthur Ponsonby. His Falsehood in wartime (1928), was a sharp and timely warning that the dissemination of outright lies tended to backfire on democratic governments by engendering a climate of public mistrust and cynicism.

The need for truthfulness and greater clarity and focus to propaganda aimed behind enemy lines was the lesson of a 1938 government report drafted by one of Ponsonby's former colleagues, Sir Campbell Stuart, author of the seminal study of British propaganda during World War One, The Secrets of Crewe House (1920). Confronted as it was with Goebbels' propaganda machine, the challenges of new media such as radio, and finding itself on the eve of war, the government recognised that British propaganda methods needed reform.

Falsehood in wartime by Arthur PonsonbyThe rise of Adolf Hitler in Germany more generally deepened a distrust of the use of propaganda in war and peace. In the US, this mood reflected a reluctance to become embroiled in European politics. Propaganda itself was seen as 'foreign' and un-American, based upon a pessimistic reading of human nature. Pioneering studies of the power of marketing and advertising, such as Walter Lippman's, and popular theories of the role of mass psychology in urban populations, concluded that 'modern man' was uniquely vulnerable to the suggestive power and 'primitive force' of propaganda.

US scepticism also stemmed from the suspicion that extensive British propaganda penetration of the US during World War One had exerted an undue influence on the decision of the US to join the war. Many Americans were determined that this should not happen again.