Indiana branch of the Ku Klux Klan
The Indiana Klan was the state of Indiana branch of the Ku Klux Klan, a secret society in the United States that organized in 1915 to promote ideas of racial superiority and affect public affairs on issues of Prohibition, education, political corruption, and morality. Like the rest of the KKK, it was strongly white supremacist against African Americans, Chinese Americans, and also Catholics and Jews, whose faiths were commonly associated with Irish, Italian, Balkan, and Slavic immigrants and their descendants. In Indiana, the Klan did not tend to practice overt violence but used intimidation in certain cases, whereas nationally the organization practiced illegal acts against minority ethnic and religious groups.
The Indiana Klan rose to prominence beginning in the early 1920s after World War I, when white Protestants felt threatened by social and political issues, including changes caused by decades of immigration from southern and eastern Europe. By 1922 Indiana had the largest Klan organization of any U.S. state, and its membership continued to increase dramatically under the leadership of D.C. Stephenson. It averaged 2,000 new members per week from July 1922 to July 1923, the month when Stephenson was appointed Grand Dragon of Indiana. He led the Indiana Klan, and other KKK chapters he supervised, to break away from the national organization in late 1923.
Indiana's Klan was one of the strongest in the country, with a large percentage of the entire White Protestant male population being members. It reached its peak of power at around 250,000 members. By 1925, over half the elected members of the Indiana General Assembly, the Governor of Indiana, and many other high-ranking officials in local and state government were members of the Klan. Politicians in many areas learned they needed the Klan's endorsement to win office.
That year Stephenson was charged and convicted for the rape and murder of Madge Oberholtzer, a young schoolteacher. His vile behavior caused a sharp drop in Klan membership, which decreased further with his exposure to the press of secret deals and the Klan's bribery of public officials. Denied pardon, in 1927 Stephenson began to talk to the "Indianapolis Times", giving them lists of people who had been paid by the Klan. Their press investigation exposed many Klan members, showed they were not law-abiding, and ended the power of the organization, as members dropped out by the tens of thousands. By the end of the decade, the Klan was down to about 4,000 members. Efforts by some to revive it in the period of the 1960s and 1970s were not successful.
Formation.
In 1920, Imperial Wizard William J. Simmons of Atlanta, Georgia chose Joe Huffington to start an official Indiana chapter of the Ku Klux Klan. Huffington left for Indiana and set up his first headquarters in Evansville.
Huffington met D.C. Stephenson, a fellow war veteran with a background in Texas and Oklahoma, who quickly became one of the leading members of the chapter. D.C. Stephenson moved during 1920 to Evansville, Indiana, where he worked for a retail coal company. He joined the Democratic Party and in 1922, ran unsuccessfully for a Democratic Congressional nomination. He was said to have already married and abandoned two wives before settling in Evansville. 
Stephenson was extraordinarily successful in recruiting and organizing new members. Like other agents, Stephenson got to keep a portion of the entrance fees, and began to amass wealth. Entrance in the Klan cost $10, plus dues, and the recruiter personally kept $4 of each registration. It is estimated that Stephenson made between two and five million dollars from his position in the Klan. Southern Indiana had already had significant vigilante activity among White Cap groups, dating back to the American Civil War.
Stephenson was an active recruiter. He initially stressed the concept of the Klan as a fraternal society and brotherhood, organized for civic activism, to help the poor and defend morality. He gained the support of many ministers and church congregations for these appeals to populist issues, and the Klan grew rapidly in Indiana.
Rise to power (1922–1925).
The Evansville Klavern became the most powerful in the state, and Stephenson soon contributed to attracting numerous new members. More than 5,400 men, or 23 percent of the native-born white men in Vanderburgh County, ultimately joined the Klan.
Building on the momentum, Stephenson set up a base in Indianapolis, where he helped create the Klan's state newspaper, "Fiery Cross" and he quickly recruited new agents and organizers, building on news about the organization. Protestant ministers were offered free memberships. From July 1922 to July 1923, nearly 2,000 new members joined the Klan in Indiana each week. Hiram Wesley Evans, who led recruiting for the national organization, maintained close ties to state leaders throughout 1921–1922 and especially to Stephenson, as Indiana by then had the largest state organization. Stephenson backed Evans in November 1922 when he unseated William J. Simmons as Imperial Wizard of the national KKK. Evans had ambitions to make the Klan a political force in the country.
Klansmen in the Indiana General Assembly passed a bill in 1922 that created a Klan Day at the Indiana State Fair, complete with a nighttime cross burning. Governor Warren T. McCray vetoed the bill, beginning his public resistance to the Klan; he was the highest-ranking official to oppose them. The same year Edward L. Jackson, a Klan member who had been elected as the Secretary of State, granted the Klan a state charter. McCray demanded the charter be revoked because the leaders of the Klan did not reveal themselves to sign the document. Jackson refused to revoke the charter. Stephenson ordered Jackson to offer McCray a $10,000 bribe to try to end his anti-Klan stance. McCray was personally wealthy and he refused the bribe.
In November 1922, Hiram Wesley Evans took power as the new Imperial Wizard in Atlanta, with the support of Stephenson. As a reward and in recognition of Stephenson's recruiting success, Evans appointed Stephenson as Grand Dragon of the Indiana Klan and head of recruiting for seven states north of Mississippi during a 1923 Fourth of July gathering of the Klan in Kokomo, Indiana, with more than 100,000 members and their families attending. Stephenson said, 
My worthy subjects, citizens of the Invisible Empire, Klansmen all, greetings. It grieves me to be late. The President of the United States kept me unduly long counseling on matters of state. Only my plea that this is the time and the place of my coronation obtained for me surcease from his prayers for guidance.
Encouraged by his success, in September 1923, Stephenson severed his ties with the existing national organization of the KKK, and formed a rival KKK made up of the chapters he led. That year Stephenson changed his affiliation from the Democratic to the Republican Party, which predominated in Indiana and much of the Midwest. He notably supported Republican Edward L. Jackson, rumored to be a Klan member, when he ran (successfully) for governor in 1924. 
Political agenda and rhetoric.
The Klan's rhetoric was anti-Catholic and anti-Semitic in these years, as rapid expansion of industrial jobs in Indiana and other Midwestern states brought tens of thousands of immigrants from southern and eastern Europe. As these immigrants were mainly of Catholic or Jewish faith, the Klan alleged that they were behind secret plots to overthrow the government and exterminate Protestants. Its lesser enemy, however, were African Americans. 
The Indiana Klan stressed more social issues than racism, as it promised to uphold moral standards, help enforce Prohibition, and end political corruption. The Klan also publicly attacked adulterers, gamblers, and undisciplined youths. This moralistic focus attracted support from religious leaders, particularly those active in the Temperance movement. Daisy Douglas Barr, who had risen to political prominence through the successful campaign to ban alcohol in the city of Muncie nearly a decade earlier, became a vocal supporter of the Indiana Klan. Appointed by Stephenson as Imperial Empress of the Klan in 1923, Barr's public persona was crucial to expanding the Klan's membership among women.
The Klan members wanted to end authorization for Catholic parochial schools, and remove all Catholic influence from public schools. The Klan was unable to attain either goal, but attained support for their agenda from key leaders. Samuel Ralston delivered an anti-Catholic speech in 1922 which the Klan reproduced and spread across the state. With their support, he was elected to the United States Senate in 1923.
Peak of influence.
At the height of its power, the Klan had over 250,000 members. The highest concentration was in cities in the central part of the state. Klan membership was discouraged in some parts of the state; in New Albany, for instance, city leaders denounced the Klan and discouraged residents from joining. Other cities, including Indianapolis, were almost completely controlled by the Klan, and election to public office was impossible without their support. Street fights occurred in Indianapolis between the Klan members and minority groups. Statewide, estimates of native white male Indiana Klan membership ranged from 27 to 40%.
With its high rate of membership, the Indiana Klan became influential in the Indiana politics and a public endorsement from the organization leadership could practically guarantee victory at the polls. This led to many Indiana politicians at all levels of government to join the Klan in order to gain their support. 
Unable to bring Governor McCray to their side, leaders in the Indiana Klan worked to uncover dirt on McCray to force him out of office. They uncovered loans solicited by McCray in a questionable way. Because the solicitations were sent by mail, they were subject to federal mail fraud laws. The Klan leaders used their influence to have McCray tried, convicted, and imprisoned for mail fraud, forcing him to resign from office in 1924. Edward Jackson was elected to the governor's office that fall.
The Klan had a large budget, based on a percentage of membership fees and dues. With more than 50,000 dues-paying members in Indianapolis, the Klan had access to tens of millions of dollars. A large part of these funds went to helping the poor, but millions were also poured into bribing public officials, paying off enemies, purchasing weapons, and contributing to political campaigns. The Klan became so powerful, and Stephenson so influential, that, by 1925, he began to brag, saying "I am the law in Indiana."
Scandal.
In 1925, Stephenson, the head of the Indiana Klan, met Madge Oberholtzer, the head of the state's commission to combat illiteracy. During the night of the inaugural ball of Republican Governor Edward L. Jackson, she was abducted from her home, taken to the Indianapolis train station, and held in a private railroad car. On the train to Hammond, Stephenson repeatedly raped her and bit her. In Hammond, she pleaded the need to get to a drug store, where she secretly ate mercury tablets and bi-chloride. Using the illness which was brought on by the poisons as an excuse, she begged Stephenson to release her. He took her back to Indianapolis and held her at his place. After Oberholtzer refused to marry him several days later, he had her returned to her home and secretly placed in bed. When her parents found her, the young woman was nearly dead. Taken to the hospital, Oberholtzer died about a month later. She told her story in detail to several witnesses. Stephenson was immediately arrested and charged with second-degree murder. The attending doctor, who testified during the trial, said that Oberholtzer's wounds appeared as if a cannibal had chewed her. The prosecution claimed that the wounds and the mercury had both caused the death of Oberholtzer. Stephenson was convicted and the State Supreme Court upheld the decision in "Stephenson v. State". He was sentenced to prison, serving time until 1956, when he was granted parole.
Denied a pardon by Governor Jackson, who he had supported during his campaign for governor, Stephenson began to talk to reporters for the "Indianapolis Times" and expose many of the high-profile members of the Klan in 1926. Stephenson gave the reporters the names of politicians and officials who the Klan had bribed, and the names of politicians and officials who had accepted money from the Klan. The mayor of Indianapolis, John Duvall, was jailed for thirty days and later, he was convicted of bribery. Numerous commissioners and other local leaders across the state were charged with bribery and forced to resign, stemming from their