For a big part, they didn’t. Of course in smaller circles people knew exactly what happened, but nationally it was denied or downplayed and covered up by the South. Until sometimes they couldn’t. Like in the Emmett Till case, who was on a family visit from Chicago and was lynched in Alabama. This got a lot of media coverage nation wide for a change.

Wikipedia has a nice article about it. It’s rare in European languages, but it does exist

The meaning is clear, but I never heard “it’s curtains” irl. It seems it was popular in gangster movies mid 20th century and apparently (still?) well understood in the eighties, but are people in the US still saying that?