Please read the following article from the New York Times by Zev Chafets
The Sy Empire
"In school, though, the SY kids mixed with other children, not only J-Dubs but also gentiles. The gentiles posed the gravest concern. Friendships with them developed, love affairs sprouted. There were intermarriages. Some Christian partners even volunteered to convert to Judaism.
Enter the rabbis with their Edict, in 1935. They wanted to build an iron wall of self-separation around the community. They couldn’t do this the Hassidic way, dressing the men in costumes of ancient design, physically segregating women and making sure that children received nothing in the way of useful secular education. After all, the Syrian men couldn’t be expected to make money if they looked like figures from 18th-century Poland.
And so the rabbis turned to the heart of the matter: matrimony. Most American Jewish communities in those days (and many today) viewed intermarriage as a taboo. Conversion, however, was a loophole. The Edict intended to close that loophole. It proclaimed, “No male or female member of our community has the right to intermarry with non-Jews; this law covers conversion, which we consider to be fictitious and valueless.”