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The Dragon & the Lady: The murder that brought down the Ku Klux Klan

Posted at 5:28 PM, Aug 20, 2017
and last updated 2017-08-22 19:46:33-04

D.C. Stephenson believed he was untouchable.

The 33-year-old pushed his way through a crowd of assembled reporters on his way to the Marion County Jail, repeating only that he had nothing to say. He and two associates, Earl Klinck and Earl Gentry, were searched and then placed in a cell on the second floor of the jail, then known as federal row, with 39 other prisoners.

D.C. Stephenson. (Credit: Indiana Historical Society; Indianapolis Recorder Collection, Indiana Historical Society; Bass Photo Co. Collection, Indiana Historical Society.)

The assembled inmates faced charges ranging from bigamy and bootlegging to murder. Stephenson and his companions were charged themselves with assault and battery with attempt to kill, malicious mayhem, kidnapping and conspiracy to commit a felony.

But Stephenson, at least to his own mind, was not like the other prisoners. He was the former Grand Dragon of the Ku Klux Klan in Indiana – an organization he had grown from a membership of just a few thousand to one, by 1925, that had swelled in some estimates to more than half a million Hoosiers. In the previous election, Klan-backed candidates had swept into offices up and down the ticket. Those candidates included Gov. Edward L. Jackson and a majority of members in both chambers of the Indiana Legislature.

Stephenson, thinking, possibly, of his powerful friends at the Statehouse, was in a good mood for an inmate.

Among the reporters outside the jail covering his arrest was a writer for the New York Times. The paper noted that Stephenson and his companions didn’t seem particularly troubled by the seriousness of the charges against them. And it didn’t affect their appetite, either. Shortly after he was booked in, Stephenson had his first jail meal: fried liver and gravy, mashed potatoes, bread and water.

“Stephenson, Klink and Gentry ate with hearty appetites and complimented the jail food,” the Times reported. “The three mingled with the prisoners and all were in a jovial mood.”

The New York Times (April 21, 1925)

In public, Stephenson maintained a cool face, calling the charges against him a “political move.” He was one of the most powerful Republicans in the state of Indiana, and considered a shoe-in for the state’s open U.S. Senate seat. The Marion County prosecutor was a Democrat, which made him a political foe.

But in private, Stephenson expressed his true measure of himself. In the train car where he was accused of kidnapping, raping and repeatedly biting an Indianapolis woman – 28-year-old Madge Oberholtzer, of Irvington – Stephenson scoffed at the idea that anyone could touch him.

Oberholtzer, upon waking from the attack, yelled at Stephenson that the law would come for him.

“I am the law in Indiana,” Stephenson replied.

That phrase would come up again months later – when prosecutors asked a jury to sentence Stephenson to death for Oberholtzer’s murder.

Under the Sway of Hate

The Klan of the 1920s is known by historians as the Second Klan. Whereas the first Klan, founded immediately after the Civil War, had largely been confined to the South, the Second Klan found footholds around the country – propelled by Prohibition and, perhaps more importantly, backlash against a new wave of immigrants from Germany and other European countries, many of whom were Catholic.

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"This is very hard for 21st Century people to understand, but anti-Catholicism was deeply ingrained in Protestantism in Indiana and America," said renowned IU Historian Dr. James H. Madison. "In the 1920s anti-Catholicism drove good Hoosiers into the Klan as much as any other influence. So they joined the Klan to save Protestantism from the influence of the Catholic Church – which was, in their opinion, comprised of immigrants, of foreigners, of Germans and others. And the people who joined the Klan were convinced that alcohol was a sin, and that it was these Catholics who were responsible for the consumption of alcohol despite the Prohibition against it."

Madison, the author of a number of books about Indiana history, including "Hoosiers: A New History of Indiana" and "A Lynching in the Heartland: Race and Memory in America,” said the Second Klan found particularly fertile ground in Indiana because of the state’s large Protestant population, and due to the Indiana Klan’s charismatic leader, Stephenson.

The New York Times (Nov. 7, 1923)

In fact, the Klan had such a hold over the state that a Nov. 7, 1923, article in the New York Times proclaimed the state was “swayed entirely by Klan.”

“It would be difficult to exaggerate the Indiana situation, with a membership that even conservative anti-Klansmen admit approximates half a million men,” the Times reported. “The forces of the Klan are threatening to sweep everything before them in the 1924 election.”

The Times was correct. Klan-backed Republicans, supported by Stephenson and his half-million Klansmen, swept the 1924 elections, earning a majority in both chambers of the Indiana Legislature and the governor’s mansion, in the person of Gov. Edward L. Jackson.

It was at Jackson’s inauguration party where Stephenson would meet 28-year-old Madge Oberholtzer. Oberholtzer, who lived in Indianapolis’ Irvington neighborhood and managed the Indiana Young People’s Reading Circle, would later describe that meeting on her deathbed.

“After the banquet he asked me for a date several times, but I gave him no definite answer,” Oberholtzer said. “He later insisted that I take dinner with him at the Washington Hotel and I consented and he came for me at my home in his Cadillac car, and on this occasion we dined together. After that he called me several times on the phone, and once again I had dinner with him at the Washington Hotel with another party.”

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The inauguration party had been in January 1925. Oberholtzer said she wouldn’t see Stephenson again until March 15, 1925, when she returned home from a friend’s house to a message from Stephenson.

Stephenson tried, but ultimately failed, to keep Oberholtzer’s dying declaration from being admitted into evidence against him. In fact, it took a ruling by the Indiana Supreme Court to settle the matter.

The Train to Chicago

In his book, “My Indiana,” author Irving Leibowitz transcribed Oberholtzer’s testimony in full.

Oberholtzer told police that the message she received was to call Stephenson, who then asked her to come over to his house to talk to her about “something very important to me.”

Madge Augustine Oberholtzer

When she arrived, Oberholtzer said she was immediately concerned because there were no other women around. Shortly thereafter, she said, Oberholtzer, Klinck and Gentry forced her to drink something.

“I said I wanted no drink but Stephenson and the others forced me drink,” Oberholtzer said. “I was afraid not to do so and I drank three small glasses of the drink. This made me very ill and dazed and I vomited.”

Stephenson then informed Oberholtzer she was traveling to Chicago with him. When she protested, he said, “Oh, yes! You are going with me to Chicago. I love you more than any woman I have ever known.”

The men then forced Oberholtzer into Stephenson’s car, whereupon they drove downtown to Union Station and bought tickets on the train to Chicago leaving that night.

Oberholtzer, Stephenson and Gentry entered a private train car. There, she described Stephenson’s horrific attack against her:

Stephenson took hold of the bottom of my dress and pulled it up over my head. I tried to fight but was weak and unsteady. Stephenson took hold of my two hands and held them. I had not the strength to move. What I had drunk was affecting me. Stephenson took all my clothes off and pushed me into the lower berth. After the train had started, Stephenson got in with me and attacked me. He held me so I could not move. I did not know and do not remember all that happened. He chewed me all over my body, bit my neck and face, chewing my tongue, chewed my breasts until they bled, my back, my legs, my ankles and mutilated me all over my body. I remember I heard a buzz early in the morning and the porter calling us to get up for Hammond and Gentry shook me and said it was time to get up, that we were to get off at Hammond. At this time I was becoming more conscious and Stephenson was flourishing his revolver. I said to him to shoot me. He held the revolver against my side, but I did not flinch. I said to him again to kill me, but he put the gun in his grip.”

When the train arrived at Hammond, Indiana, the party got off and headed to the Indiana Hotel, where Stephenson forced Oberholtzer to say she was his wife so they could stay in the same room. Stephenson ordered a breakfast of grapefruit, coffee, sausage and buttered toast and ate ravenously. Oberholtzer ate nothing.

Distraught, Oberholtzer decided to take her own life. She testified that at one point she grabbed Stephenson’s revolver and placed it to her head, but decided that would bring too much shame to her mother.

Instead, under the pretense of buying makeup, Oberholtzer convinced the men to give her $15 to go to the nearby drug store. There she bought a box of bichloride mercury tablets.

Back at the hotel, once she thought the men were asleep, Oberholtzer laid out 18 of the tablets, intending to take them all. She was only able to swallow six, “because they burnt me so,” she said.

Upon discovering Oberholzter ill, delirious and vomiting blood, the men panicked. Stephenson told Oberholtzer she would have to get her stomach pumped, but Oberholtzer refused to check into the hospital as his wife, which he demanded.

Instead, the men eventually placed her back in Stephenson’s car, which Klinck had driven up from Indianapolis, and headed home.

I don't know much about what happened after that. My mind was in a daze. I was in terrible agony. Shorty checked out for all of us, and they put me in the back seat of the machine with Stephenson. We then started for home in the automobile. After we got a piece Stephenson said to Shorty to take the auto license plates off of the car, which he did, and Stephenson said to him to say if questioned that we had parked in the last town we had passed through and auto plates had been stolen. All the way back to Indianapolis I suffered great pain and agony and screamed for a doctor. I said I wanted a hypodermic to ease the pain, but they refused to stop. I begged and said to Stephenson to leave me along the road someplace, that someone would stop and take care of me if he wouldn't. I said to him that I felt he was more cruel to me than he had been the night before. He said he would stop at the next town before we got there but never did.”

Eventually, after leaving her in Stephenson’s garage for a while, the men brought Oberholtzer back to her mother’s house. Stephenson told her to tell people she’d been in a car accident.

"He said, ‘You must forget this, what is done has been done, I am the law and the power,’” Oberholter said. “He said to me several times that his word was the law.”

Stephenson had called Oberholtzer over to his house on March 15. She didn’t die until April 14, nearly a month later. Once she was pronounced dead, prosecutors filed new charges against Stephenson, Klinck and Gentry. It was now a murder case.

Cutting Off the Head of the Snake

“Stephenson vs. State” would become a landmark case – not just because it involved murder charges against a former Grand Dragon of the KKK, but also because it dealt with murder as a crime of omission, rather than commission, according to attorney George Brattain.

Brattain, 76, practices law in Terre Haute, Indiana. He is also, as it happens, the grandson of Leotus Neese, one of the jurors in the Stephenson case.

Leotus Neese, 75 (The Indianapolis Times, Dec. 10, 1950)

Brattain said he didn’t realize how important the case was until he attended law school himself, where it was one of the major cases taught in criminal law.

“Grandfather never expressed an opinion or talked about the case,” Brattain said. “I guess he just looked at it like something he needed to do as a citizen.”

After a lengthy trial, and six hours of deliberation, a jury of “10 farmers, one business man and a truck driver” found Stephenson, Klinck and Gentry guilty of murder in the second degree. Prosecutors had asked for the death penalty, but Stephenson ultimately received a sentence of 20 years in prison.

Before the sentence was announced, prosecuting attorney Ralph Kane let the jury know exactly who they were looking at.

According to the New York Times’ account of the trial, Kane called Stephenson a “hideous monster” and a “serpent who should be put away for the protection of the daughters of the future.”

The New York Times (Nov. 15, 1925)

Brattain’s grandfather, Neese, was one of the farmers the Times recorded in Stephenson’s jury. Brattain says he thinks Stephenson thought he could intimidate his way out of the charges. He was wrong.

“He just wasn’t going to run those German farmers off the road,” Brattain said. “They weren’t intimidated by him.”

In December 1950, 25 years after the trial, the now-defunct Indianapolis times asked eight of the 12 members of Stephenson’s jury how they would vote if the trial was held over again. Only one member of the jury, 69-year-old Cash Applegate, said he would have held out for a manslaughter verdict instead of murder in the second degree.

The other seven jurors the Indianapolis Times spoke with, including Neese, said their opinions hadn’t changed. Neese, like many of the men, said Stephenson’s refusal to take the stand on his own behalf reflected poorly on him.

“Stephenson has done a lot of talking and has done a lot of things that were not right since the trial, and I haven’t heard of any new evidence or reasons since then for changing my vote for first degree murder,” Neese said in the article. “The lawyers did everything they could to keep him from testifying at the trial, and I wanted to hear what he had to say. He never defended himself.”

Following his conviction, and denied a pardon by the governor he’d helped elect, Stephenson quickly flipped on his fellow Klansmen. In an interview with the Indianapolis Times, Stephenson provided a list of officials who had accepted bribes and payments from the Klan. The result was a series of indictments up and down the political power structure, including the head of the Republican Party in Marion County, and Gov. Ed Jackson himself.

The horrific nature of Stephenson’s attack on Oberholtzer and the resulting scandal from the trial and Stephenson’s disclosures was too much for the Indiana Klan to survive. Huge numbers of Klansmen quit almost immediately following the news of the attack. Estimates are that the Klan may have lost as many as half of its members statewide by the following year.

The trial left such a black mark on the Klan that Brattain, whose only family played a pivotal role in bringing the group down, said he was taught almost nothing about it in school. Madison, the IU historian, said that was true no matter where you were in the state.

"I think the Klan left such a stink in Indiana," he said. "It's the foulest-smelling beast we've had to deal with in Indiana. And it created a deep, deep fear in Hoosiers. For a long time Hoosiers would not even talk about the Klan. Not until the 1970s-80s, really. There's still a lot of confusion and anxiety about it. People say, oh, my great-great grandfather was a member of the Klan. Well, of course he was. If he was a good Methodist, he probably joined the Klan."

The Oberholtzer family grave at Memorial Park Cemetery.

Stephenson was paroled in 1950, but was arrested in Minneapolis after violating the terms of his parole and was sentenced to another 10 years in prison. He was finally released in 1956 on the condition that he leave Indiana and never come back. He died 10 years later at the age of 74 in Jonesborough, Tennessee.

Oberholtzer was buried at Memorial Park Cemetery on the far east side near the intersection of Washington Street and Post Road. Her grave marker can be found there still, alongside four other members of her family.

Jordan Fischer is the Senior Digital Reporter for RTV6. He writes about crime & the underlying issues that cause it. Follow his reporting on Twitter at @Jordan_RTV6 or on Facebook.