Beatrice Colin talks about the febrile New York she uncovered for her latest novel, set in the Jazz Age

She demurs. No, she says, the piano's really just for her two children: that's their music on the stand, not hers. She had wanted to learn how to play jazz piano, like Monroe Simonov, the main character in her new novel, The Songwriter; to learn, like him, how to pick up the walking bass of stride and the showy rhythms of ragtime. She's got the keyboard basics, she says, but not much more.

So, sitting at the kitchen table of her Hyndland flat at 11 o'clock on a grimy, grey morning, she can't play me the kind of Tin Pan Alley songs that Monroe Simonov used to write and try to sell, nor can she show me how they would have been changed by the new, freeform music he'd have heard in Harlem. In a sense, though, she already has.

In The Songwriter, just as in her previous novel, The Luminous Life of Lilly Aphrodite, Colin gives us a ringside seat at the birth of modernism. In her last book, the background was the emergence of the cinema industry in Weimar Germany – far more innovative and sexually explicit than Hollywood would be for another half-century. In The Songwriter, set in New York from 1916 to 1920, the mix is just as rich. Revolutionaries are in town, anarchists are letting off bombs, soldiers are joining up for a war in faraway Flanders, women are about to win the vote.

Change isn't just in the air but in the music too. "Jazz was all about improvisation, and that mirrored the times," she says. "You could make yourself who you wanted to be, and that's what the characters in my book are starting to do – the old ways didn't have to be endured any longer. It must have been a tremendously exciting time.

"As a writer I just love going back to places where I think I know the history, and discovering a completely different past to the one I expected. In New York, where I lived for four years from 2001, I'd got no idea that in the time I wanted to write about, the city was such a hotbed of revolutionary politics, that people like Trotsky lived there, along with his young family.

"I arrived in New York five weeks after the Twin Towers fell. It was a strange time to be there, a time of huge paranoia about this new threat to America. But then I discovered that there'd been other terrorist attacks in its history; that someone – they never found out who – had driven a cart down Wall Street and let off a bomb outside JP Morgan's bank that had killed 38 people and injured hundreds. I read all about the Red Scare, about the Italian anarchists and Russian communists, and the parallels between then and 2001 seemed quite obvious."

Armed with a 1914 Baedeker, everything she could read from and about the period, and her own knowledge of New York, Colin set about trying to conjure up the febrile atmosphere of the times. Take, for example, the music. The jazz that whites would first hear at private parties in Harlem where they'd pay a dollar to get in was exciting enough, but then so too was the songwriting business it was edging out.

"Tin Pan Alley," Colin writes, "was much more than a location. It was a flutter in the belly, the float of a crescendo followed by the crash of a minor seventh chord. It was the buzz of adrenalin or the first draw of a cigarette. Something new mixed with something old. It was a cocktail of melancholy mixed with a generous shot of pandemonium."

I first met Beatrice Colin, 46, in the late 1980s. Back then she was a freelance journalist in Glasgow, where she had read English (and been a singer in the mildly successful indie-pop duo April Showers) at university. I knew her enough to call on her services as an occasional reviewer, but hadn't followed her career as a novelist.

Two years ago I started to feel guilty about that. For The Glimmer Palace, as her The Luminous Life of Aphrodite was titled in the US, she had received a $175,000 advance. In the book world, this is a rarity. I can think of only one Glasgow writer who's ever had that kind of cheque coming through the letterbox, and I can't think of any other one whose novel was then also picked – as this was – as one of the ten Richard and Judy "best reads" of 2009.

Two years ago, Colin also finished a PhD in creative writing at Strathclyde University, where she was taught by the brilliant South African-born writer Zoe Wicomb. For her dissertation, she wrote about the possibilities historical fiction offers of looking at the past through the eyes of those who are marginalised, who might not have left too much behind by way of diaries and memoirs and who therefore run the risk of being ignored when the history of their times gets written up.

Already, though, her knowledge of the subject was as much practical as theoretical. In her late twenties, she won a Radio 4 short story competition and wrote half a dozen radio plays and a few more adaptations. "The great thing about radio is that you can do anything or be anywhere – so I wrote a play about Paracelsus, the 16th-century alchemist, and we had people burning at the stake. In another we had a plane crash in the jungle – great fun, though it would all have cost millions on screen. So really, all that got me into historical fiction."

But so perhaps did her own family history. Her family were Russian Jews who had converted to Christianity in the 19th century but fled the country with the outbreak of revolution. Her great-grandmother, also a novelist, wrote a Russian bestseller at the turn of the 20th century, and her great-aunt Nina, who carved out a career in the German film industry between the wars, was a guiding spirit behind The Luminous Life of Lilly Aphrodite. There are Russian links too in The Songwriter, where one of the main characters, Ana Denisova, is a stylishly dressed Social Revolutionary from St Petersburg, on a speaking tour of the US.

Some of those Russians in New York during the First World War left their mark on the historical record: Trotsky, for example, wrote about living in the Bronx and the unaccustomed luxuries of having a flat with a bin chute and electric lights, and the anarchist Emma Goldman (like Ana Denisova, a lecturer on the subject of free love) wrote about being deported to Russia.

But Colin's novel – remember her PhD subject – isn't about the famous names. It's about the other people, less known to history, who might have been deported from the US to revolutionary Russia. Not about Fats Waller but what life would have been like for other early black jazz musicians, perhaps the ones who volunteered to fight in the war against Germany. Not about the famous names from Tin Pan Alley but about its more obscure practitioners, plugging away at that hit-and-miss (usually miss) business of selling songs to touring artistes, their hardscrabble lives an ironic counterpoint to their songs' bright and breezy lyrics.

Unknown to history, most of these characters might have been, but that hasn't stopped Colin blending their stories together, stirred with a tightly wound plot, in a heady cocktail. In her last novel, she admits, she occasionally felt overwhelmed by the sheer range of time she had to encompass – from the start of the century to the Nazis' rise to power.

In The Songwriter, there's the same epic sweep, but it's all condensed within four climactic years. "New York has been so written about so much that before I started writing I felt rather nervous about taking it on. But my New York – the New York of the Red Scare – is something that not a lot of people know about, so I felt I could probably do it. And of course living there helped a lot too."

First, though, she had to pile up a vast amount of research – on the obscurer corners of Tin Pan Alley, the layout of Central Park apartments, the history of black American regiments and the American aviation industry in the First World War, to name just a few subjects. Two years ago, she went to St Petersburg to find out more about the city her character Anna came from. It's also the city her grandfather was born in, and she was able to track down the house he grew up in.

His mother had written a bestselling novel in that house. And although he never lived to see it, a full century later, in a first floor flat in Hyndland, where the trains to Alexandria and all points north clatter beyond the window of a kitchen with an upright piano on which jazz is only seldom and inexpertly played, his granddaughter has done exactly the same thing.

The Songwriter, by Beatrice Colin, is published by John Murray, price 17.99.