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You're right, except those ratings were created in the 60s, not the 20s. Before then, you had the Hays Code where movies weren't rated, but they had to meet the standards of the code before they could be released. And even earlier, you had pre-code Hollywood, which was sort of in between in terms of explicitness.PG-13 isn't a government thing. There are no laws against children watching anything except for porn.
However, private companies only started the movie rating system (G,PG,PG-13,R) in America as a way to prevent the government from starting a censorship board back in the 1920s.