In 1923, after the population exchange between Greece and Turkey, many ethnic Greeks from Asia Minor fled to Greece as a result of theGreco-Turkish War. They settled in poor neighborhoods in Piraeus, Thessaloniki, and Athens. Many of these immigrants were highly educated, such as songwriter Vangelis Papazoglou, and Panagiotis Toundas, composer and leader of Odeon Records' Greek subsidiary, who are traditionally considered as the founders of the Smyrna School of Rebetiko. Another tradition from Smyrna that came along with the Greek refugees was the tekés (τεκές) 'opium den', or hashish dens. Groups of men would sit in a circle and smoke hashish from a hookah, and improvised music of various kinds.
With the coming of the Metaxas dictatorship, rebetiko was repressed due to the uncompromising lyrics. Hashish dens, baglamas and bouzoukiwere banned, or at least playing in the eastern-style manner and scales.
Some of the earliest legends of Greek music, such as the quartet of Anestis Delias, Markos Vamvakaris, Stratos Payioumtzis and Yiorgos Batis came out of this music scene. Vamvakaris became perhaps the first renowned rebetiko musician after the beginning of his solo career. Other popular rebetiko songwriters and singers of this period (1940s) include: Dimitris Gogos (better known as Bayandéras), Stelios Perpiniadis,Spyros Peristeris, Giannis Papaioannou,