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Mc Cray 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.The Evansville Klavern became the most powerful in the state, and Stephenson soon contributed to attracting numerous new members.More than 5400 men, or 23 percent of the native-born white men in Vanderburgh County, ultimately joined the Klan.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. 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. Stephenson moved during 1920 to Evansville, Indiana, where he worked for a retail coal company.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. Evans had ambitions to make the Klan a political force in the country.
Protestant ministers were offered free memberships. From July 1922 to July 1923, nearly 2,000 new members joined the Klan in Indiana each week.
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.
My worthy subjects, citizens of the Invisible Empire, Klansmen all, greetings. The President of the United States kept me unduly long counseling on matters of state.
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.