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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 had also learned they needed Klan endorsement to win office.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.This led to many Indiana politicians at all levels of government to join the Klan in order to gain their support.The Klan became so powerful, and Stephenson so influential, that by 1925 he began to brag, saying "I am the law in Indiana." 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.

Stephenson backed Evans in November 1922 when he unseated William J. Evans had ambitions to make the Klan a political force in the country.

By 1922 the state had the largest organization nationally, and its membership continued to increase dramatically under the leadership of D. He led the Indiana Klan and other chapters he supervised to break away from the national organization in late 1923.

Indiana's Klan organization reached its peak of power in the following years, when it had 250,000 members, an estimated 30% of native-born white men.

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. Mc Cray vetoed the bill, beginning his public resistance to the Klan; he was the highest-ranking official to oppose them. Jackson, a Klan member who had been elected as the Secretary of State, granted the Klan a state charter.

Mc Cray demanded the charter be revoked because the leaders of the Klan did not reveal themselves to sign the document. Stephenson ordered Jackson to offer Mc Cray a ,000 bribe to try to end his anti-Klan stance.

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