A Citizen's Guide to Indiana

Franklin Delano Roosevelt (1933-1945) –

FDR was a member of the prominent Roosevelt clan in New York that had given rise to Teddy Roosevelt not long before. FDR and TR were from different wings of that family. Teddy was an Oyster Bay Republican Roosevelt, and Franklin was his fifth cousin, a Hyde Park Democrat. Franklin married Eleanor, one of the Oyster Bay Republicans (Theodore’s niece.)

Like Lincoln, I know I can’t do his Presidency justice, so I’m not going to try very hard. He was elected four times and led us through the Depression and World War II. He was born to an elite family and went to elite schools and, yet, he did much to improve the lot of the common man; he probably saved his fellow upper class members from suffering the same fate of the elite in Europe during this period; and they hated him for it. Some wouldn’t even say his name, referring to him only as “that man.”

President Roosevelt “made bitter enemies of the wealthy Protestants among whom he had lived most of his life.  He had raised their taxes, regulated their business practices, threatened their dominance; he was, they said, a hypocrite, untrustworthy, demagogic, a ‘traitor to his class,’ and many of them, hating his name too much even to utter it, simply called him ‘That Man in the White House.’ ”

“That Man” attitudes carried, most regrettably, the whiff of violence.  In early 1933, when Roosevelt was president-elect but not yet inaugurated, an assassin shot at him in Florida and barely missed.  Six years later, a writer shared this description of mainstream, if private, imaginations of violence:  “In the cabañas at Miami Beach the sun-tanned winter visitors said their business would be doing pretty well if it weren’t for THAT MAN.  In the country-club locker room the golfers talked about the slow pace of the stock market as they took off their golf shoes; and when, out of a clear sky, one man said, ‘Well, let’s hope somebody shoots him,’ the burst of agreement made it clear that everybody knew who was meant.”

. . .

They saw dictatorship and revolution where the majority of Americans saw leadership and a democratic resurgence.”

However, FDR famously responded, “They are unanimous in their hate for me and I welcome their hatred.”

Roosevelt had been vice-presidential candidate to James Cox when they ran against Warren Harding in 1920 and got thumped. In 1921, he contracted polio, and his political future seemed in doubt. But, he battled back, and in 1928, he was elected governor of New York. In 1932, Hoover and the Republicans were deeply unpopular on account of the Depression. There were a number of contenders for the Democratic nomination, but FDR had taken control of the New York machinery from Al Smith. He had the support of newspaper magnate, William Randolph Hearst; Irish leader Joseph Kennedy, Sr.; California leader (and Woodrow Wilson son-in-law) William McAdoo; and eventually John Nance Garner. Soon-to-be Indiana governor, Paul McNutt played some games with Indiana’s delegates during this convention and earned a grudge from FDR.

In the general election, FDR won a resounding victory.  He forged a coalition made up of organized labor, northern blacks, and ethnic Americans such as Italian-Americans, Polish-Americans and Jews and won with 57% of the votes and all but six states. The Congressional races also gave the Democrats a commanding presence. The Democrats won 313 Congressional seats to the Republicans’ 101 (and 4 to the Farmer-Labor party). The numbers in the Senate were 59-36-1. FDR’s first 100 days are still the benchmark against which other new Presidencies are measured. “Roosevelt spearheaded unprecedented major legislation and issued a profusion of executive orders that instituted the New Deal—a variety of programs designed to produce relief (government jobs for the unemployed), recovery (economic growth), and reform (through regulation of Wall Street, banks and transportation). He created numerous programs to support the unemployed and farmers, and to encourage labor union growth while more closely regulating business and high finance.” He also pushed for repeal of Prohibition, and the Twenty-First Amendment was completed on December 3, 1933. (Indiana was the seventh state to ratify the Twenty-First Amendment on June 26, 1933).

One of the Roosevelt administration’s major initiatives was the Works Progress Administration. It was established in 1935, and at its peak in 1938, it employed 3 million unemployed men and women (mostly men). Over the course of the 8 years it was in operation, it employed 8.5 million people.

The WPA built traditional infrastructure of the New Deal such as roads, bridges, schools, courthouses, hospitals, sidewalks, waterworks, and post-offices, but also constructed museums, swimming pools, parks, community centers, playgrounds, coliseums, markets, fairgrounds, tennis courts, zoos, botanical gardens, auditoriums, waterfronts, city halls, gyms, and university unions. Most of these are still in use today. The amount of infrastructure projects of the WPA included 40,000 new and 85,000 improved buildings. These new buildings included 5,900 new schools; 9,300 new auditoriums, gyms, and recreational buildings; 1,000 new libraries; 7,000 new dormitories; and 900 new armories. In addition, infrastructure projects included 2,302 stadiums, grandstands, and bleachers; 52 fairgrounds and rodeo grounds; 1,686 parks covering 75,152 acres; 3,185 playgrounds; 3,026 athletic fields; 805 swimming pools; 1,817 handball courts; 10,070 tennis courts; 2,261 horseshoe pits; 1,101 ice-skating areas; 138 outdoor theatres; 254 golf courses; and 65 ski jumps.

The WPA was disbanded during World War II when a labor shortage developed.

These acts did not end the Depression, but they did seem to help. And the continuous effort itself helped Americans keep hope. In 1936, his victory was even more resounding, winning 60.8% of the vote and all but two states.

A lot of his work was undone by the Supreme Court who determined many of his actions were unconstitutional. He floated a scheme to pack the court by appointing more justices. (Nothing in the Constitution dictates 9 Justices). He faced stiff opposition and this did not succeed. However, Roosevelt simply outlasted them. And, by 1941, he had appointed seven of the nine justices, and they began to find his acts constitutional.  With respect to the economy, there was recovery from 1933-1937, but federal expenditures were cut in response to the recovery, and the economy backslid in 1937-1938.

Next time: World War II and FDR’s third and fourth terms.

Continuing on with the national scene during the Hoover administration:

Wall Street Crash

When I was in high school, early in the semester, one day in October, our history teacher told us about Hoover and his proclamations that poverty was almost eliminated.  Hoover said, “Given the chance to go forward with the policies of the last eight years, we shall soon with the help of God, be in sight of the day when poverty will be banished from this nation.” Our teacher told us that, when politicians start talking like that, it’s probably time to head for the hills. He read some overblown prosperity quote from a politician of the day and suggested that the economy might be ripe for a crash. Black Monday happened a week or two later. Mr. Johns had our attention. It wasn’t long after Hoover’s poverty-banishment speech that the Wall Street Crash of 1929 took place.

On December 3, 1929, President Hoover announced to Congress that the worst effects of the stock market crash were behind the country. They were not. I’m not going to be able to explain the causes of the Depression with any level of detail or authority, but in part, it was caused by a speculative bubble on Wall Street. Money is meant to be a proxy for value. It is a sort of battery for storing wealth. When you’re bartering, you have to get kind of lucky and match two people who need what the other person has. Money allows that match to take place over space and time and innumerable people. A critical component in this system is trust that when you trade your value for money that you’ll be able to get comparable value when you go to trade your money for goods and services later on. With a bubble, money becomes detached from the underlying value it’s supposed to represent. People are essentially betting on the momentum of the market. Eventually, the distance between monetary valuation and actual value becomes too great, people stop trusting that money will hold its value into the future, and the lack of trust becomes a self-fulfilling prophecy. Markets crash and take down productive activity with it. People become much more cautious about how they’ll spend their money, and the crash throws sand into the gears of economic activity. You have people who have the ability and inclination to create goods and services, and you have people who really need those goods and services, but you can’t match them up. The money stops flowing. Then the people with the need can’t find markets for their own goods and services, can’t acquire the money they need to buy goods and services from others, and consequently can’t afford to buy from others. It’s a vicious cycle — sort of the flip side of the bubble. The amount of money flowing is not well matched as a proxy for the potential value in the system.

During the Depression, the mismatch between the flow of money and the potential value in the economic system was not well-served by the economic schools of thought that set a premium on government non-intervention in the economy and balanced budgets. This was not confined to the United States. The world economy had become interconnected enough that it was a worldwide problem. Economic troubles assisted the rise of totalitarianism.

In 1932, about 43,000 marchers made up of World War I veterans and their families camped near Washington D.C. They came to be known as the Bonus Army. The Great Depression had thrown them out of work, and they were demanding that they be paid their World War 1 “bonus.” In 1924, Congress passed legislation that gave veterans additional compensation for World War 1 service that amounted to $625 in 1924 dollars (about $7,900 in present money) plus interest. The catch was that they were issued certificates, payable in 20 years. In 1932, the veterans were demanding that the bonus be paid now rather than in another 12 years. At one point, after the marchers had been camped out for 6 weeks or more, the D.C. police tried to disperse the crowd but were hopelessly overmatched and shot two of the veterans.  President Hoover ordered the army to clear out the veterans. Douglas MacArthur, George Patton, and Dwight Eisenhower were involved in the action.

Infantry and and cavalry supported by six tanks were dispatched with Chief of Staff General Douglas MacArthur in command. Major Dwight D. Eisenhower served as his liaison with Washington police and Major George Patton led the cavalry.

By 4:45 P.M. the troops were massed on Pennsylvania Ave. below the Capitol. Thousands of Civil Service employees spilled out of work and lined the streets to watch. The veterans, assuming the military display was in their honor, cheered. Suddenly Patton’s troopers turned and charged. “Shame, Shame” the spectators cried. Soldiers with fixed bayonets followed, hurling tear gas into the crowd.

By nightfall the BEF had retreated across the Anacostia River where Hoover ordered MacArthur to stop. Ignoring the command, the general led his infantry to the main camp. By early morning the 10,000 inhabitants were routed and the camp in flames. Two babies died and nearby hospitals overwhelmed with casualties. Eisenhower later wrote, “the whole scene was pitiful. The veterans were ragged, ill-fed, and felt themselves badly abused. To suddenly see the whole encampment going up in flames just added to the pity.”

By the time the election of 1932 rolled around, the public was not thrilled with Hoover in particular or Republicans in general.

In Indiana Bicentennial 9, we’ll be heading into the Great Depression and World War II, covering the years from 1929 through 1945. Thanks to FDR’s willingness to buck tradition, that leaves me with only two Presidents to cover – Herbert Hoover’s one term (1929-1933), and three of FDR’s terms (1933-1945). The governors were Harry Leslie (1929-1933), Paul McNutt (1933-1937), M. Clifford Townsend (1937-1941), and Henry Schricker (1941-1945).

My very rough sense — probably not original to me and probably very debatable — is that American history divides into three major parts separated by the Civil War and the Great Depression/World War II. Part of that stems from my path-of-least-resistance approach as an amateur historian (or “fan of history” as Dan Carlin likes to say.) When I’m casually reading about American history, when I get to 1850-1865 or 1929-1945, all narratives bend toward the Civil War or Great Depression/WWII. I know life was going on, and if I expend some effort, I can find accounts of events not related to those major topic, but those events exert a lot of gravitational force. And, after those events have passed, American society tends to look a lot different than what came before.

Herbert Hoover (1929-1933) –   Herbert Hoover was something of a self-promoting, technocratic whiz kid whose administration got clobbered by the Great Depression. Hoover was born in Iowa and got an engineering degree from Stanford. He initially worked in California, but then took a position that moved him to Australia for several years and then China. In 1900, he and his wife were pinned down by the Boxer Rebellion. He became a partner in the mining company and then acquired interests of his own in Australia and then investments world-wide. By the time World War I broke out, he was rich. During that war, he worked with humanitarian relief efforts, including as chairman of the Commission for Relief in Belgium. When the U.S. joined the war in 1917, Hoover sought and was appointed to the U.S. Food Administration. He believed that centralization of power was necessary to the war effort, and he was given a great deal of authority. “Hoover established set days for people to avoid eating specified foods and save them for soldiers’ rations: meatless Mondays, wheatless Wednesdays, and “when in doubt, eat potatoes”. . . . The agency employed a system of price controls and licensing requirements for suppliers to maximize production.”

When he returned to the U.S. in 1919, Hoover was courted by both Republicans and Democrats. He thought 1920 was likely to be a Republican year and, so, joined that party. Hoover lost a campaign for the Senate in California and was not a top contender when he put his name in for the Presidency. But, he ultimately supported Harding in getting the nomination. Harding named Hoover to be his Secretary of Commerce. “From Harding he demanded, and received, authority to coordinate economic affairs throughout the government. He created many sub-departments and committees, overseeing and regulating everything from manufacturing statistics, the census and radio, to air travel. In some instances he “seized” control of responsibilities from other Cabinet departments when he deemed that they were not carrying out their responsibilities well. “

Hoover was opposed to Teddy Roosevelt’s antagonistic relationship to business and sought to make the Department of Commerce a service organization, forging relationships between government and business. For example, in conjunction with home construction businesses and banks, he organized the “Own your own home” campaign and helped promote the new innovation of long-term home mortgages. He worked with Congress to create the Radio Act of 1927 which allowed the government to give broadcasters a monopoly to broadcast on particular frequencies of what had been public airwaves. He organized meetings where motor vehicle trade organizations were heavily involved that promulgated a Uniform Vehicle Code and Model Municipal Traffic Ordinance that were greatly influential.

In 1927, though not strictly the job of the Commerce Secretary, Hoover’s humanitarian background brought him into the relief effort following the Great Mississippi Flood of 1927. The attention he got from these efforts helped propel his campaign efforts for the Presidency in 1928. The positive press propelled him past his primary opponent, Illinois governor, Frank Lowden. His general election opponent was New York governor, Al Smith. They had similar positions on many issues. One area where they differed was on the issue of Prohibition. Smith supported its repeal which appealed to the urban Catholic population. Hoover’s “dry” position was more appealing to the rural Protestant population. That plus the general prosperity under Coolidge led to a landslide victory. Abandoning black Republicans in the south helped the party start to crack the “Solid South.” There was a rift among the southern, rural conservative democrats left over from when they were the party of the Confederacy and the urban, immigrant Catholic Democrats from the northern cities. Abandoning black Republicans in the South helped Republicans to exploit that rift. (W.E.B. Dubois would recall, “In 1928, Negroes faced absolute dilemma. Neither Hoover nor Smith wanted the Negro vote and both publicly insulted us.”)

When Hoover took office, the country was still in the grip of Prohibition. Just before his inauguration, the Saint Valentine’s Day Massacre took place in Chicago, allowing Al Capone to take control of organized crime there. Prohibition was one of the last great efforts of the Progressive Era. Enforcement was targeted primarily at the working class poor who were probably its intended targets in any event. Law enforcement was overwhelmed, public opinion was not necessarily on it side, the terrain made smuggling relatively easy, and Prohibition eliminated what had been an important source of tax revenue. Hoover established a committee to investigate the 18th Amendment which came to be known as the Wickersham Commission. The Commission ultimately reported “the widespread evasion of Prohibition and its negative effects on American society and recommended much more aggressive and extensive law enforcement to enforce compliance with anti-alcohol laws.”

Next time: The Wall Street Crash

D.C. Stephenson

At different times, Stephenson called himself “a nobody from nowhere, really” and “I am the law in Indiana.” He was the son of a sharecropper, a recruiter for the army, an admirer of the style of socialist leader Oscar Ameringer, and a  traveling salesman who had a habit of leaving his wives. He found himself in Evansville, Indiana as a stock salesman for the Citizens Coal Company at about the time the Klan was starting up in Indiana. He was apparently “not a man of firm prejudices,” but adopted those causes that he could manipulate to his own benefit. (For example, he ran for Congress as a “wet” Democrat in 1922. When that didn’t work, he switched to dry Republicanism.

He had a gift for sales, quick to develop an easy comfort with his target. But, he also had a weakness for liquor and women. While in a hotel in Columbus, Ohio in 1922:

The hotel’s manicurist reported that when she arrived for Stephenson’s appointment, “there were three full quarts of whiskey and when I told him that I didn’t want any, he came over and grabbed me. He said that he would give me a hundred dollars if I would allow him to have intercourse with me. Of course, he was more rude than I care to be in expressing it… I told him that I was not in the habit of being insulted by anyone like that, and he said… ‘You will or I’ll kill you.’” She fled and ran into two of his associates outside, who tried to console her. “Don’t pay any attention to him,” one said. “He is a good fellow; he is drunk; he is all right when he is sober. You go downstairs and don’t bother about it.”

By all accounts, he was instrumental in the success of the Klan in Indiana. He made $4 from every $10 recruit and got wealthy. He implemented the innovation of giving a free Klan membership to every Protestant minister in Indiana (many declined.)

He had his hooks in Ed Jackson pretty deeply. Besides providing him with critical electoral support, he had the goods on Jackson and the attempted bribe of Governor McCray.  He was at the apex of his power on January 12, 1925 at the Athletic Club in Indianapolis where he was attending an inauguration party for Jackson. That’s when he met Madge Oberholtzer. Oberholtzer was a 28 year old manager of the “Indiana Young People’s Reading Circle,” a division of the Department of Public Instruction. She was at the party helping to pass out name tags.

After that, Stephenson pursued her to some degree and, eventually, he was having her write a book on public health, ostensibly so he could have the legislature mandate a book of its type be taught in schools then arrange to have it sold to fill the new requirement. She also acted as his aide in the 1925 General Assembly, running notes from his office to the State House. On March 15, 1925, Stephenson left a message for her to come to his home. He had some business that he needed to take care of before he went to Chicago the next day. At about 10 p.m. she arrived home and received that note. She went to his place a few blocks away. Stephenson was raging drunk.  At that point, Stephenson, his bodyguard, and his chauffeur forced her to drink whiskey. She was then forced into his car, driven to the train station, and forced into his private train car. At that point, Stephenson tore her dress, raped her repeatedly and bit her extensively. (“She was bitten, chewed, and pummeled.”)

They made it as far as Hammond where Stephenson checked into a hotel, saying she was his wife. He forced her to write a telegram to her mother saying she was going to Chicago. As he slept, she managed to take his revolver. She thought about shooting him but could not, believing it would disgrace her family. That morning, she convinced one of his bodyguards to take her to the pharmacy to buy some rouge. She bought mercuric chloride tablets while she was there and managed to take 6 of them, intending to kill herself, when she got back to the hotel. She began vomiting blood and Stephenson panicked. The group headed back to Indianapolis. Oberholtzer was hidden in a room above Stephenson’s garage for a period of time, but two days after she’d been raped, she was taken back to her family’s house where they were told she had been in a car accident. Before taking her home, Stephenson warned Overholzer against telling about what he’d done to her, saying, “You must forget this, what is done has been done. I am the law and the power.”

On March 28, she told what had happened to her in a signed statement. She died on April 14, 1925 from a staph infection from the bites, plus kidney failure from the mercury poisoning. Her dying declaration was used as evidence against Stephenson when the Marion County Prosecutor, Will Remy — a man Stephenson had unsuccessfully attempted to bribe Governor McCray to avoid having in office — charged him with rape and murder. He was convicted and sentenced to life in prison on November 14, 1925. The scandal caused by Stephenson’s actions destroyed the Klan in Indiana. Members quit en masse.

In 1927, when Stephenson did not get the pardon he expected from Governor Jackson, he started talking to the Indianapolis Times. “[H]e provided names of people who had been paid bribes by the Klan and taken part in other illegal activity. He had kept a “black box” of records which provided evidence for many of his accusations. He exposed Jackson’s having tried to bribe McCray with $10,000 years earlier.” Jackson did not bow to pressure to resign. He left office in disgrace and was tried on the bribery charge. The trial ended in a hung jury and the statute of limitations prevented re-trial.

Stephenson, was paroled from prison in 1950 but violated the terms of the parole. He was paroled again in 1956, one condition of which was that he leave Indiana. In 1961, in Independence, Missouri, Stephenson was arrested on charges of attempting to sexually molest a sixteen-year-old girl.  He died on June 28, 1966 in Jonesborough, Tennessee.

After his term of office was over in 1929, Ed Jackson opened a law office in Indianapolis. In 1937, he moved to Orleans, Indiana where he maintained an apple orchard and raised cattle. In 1948, he suffered a massive stroke that left him bedridden until he died in 1954.

That brings us to the end of installment 8. In the next installment, we’ll enter the Great Depression. [*cue ominous music*]

Edward Jackson (1925 – 1929) Ed Jackson was born in Howard County in 1873. He eventually passed the bar to become a lawyer and opened an office in Henry County. He handled work for the Prosecutor’s office and then was elected to the Prosecutor position, then as the Circuit Court Judge. He married Rosa Wilkinson and was married to her for 22 years before she died in the influenza epidemic of 1919.

Jackson won election to Secretary of State in 1916, but resigned to enlist in the Army in 1917 when the U.S. entered World War I. He was stationed in various locations in the U.S., ultimately ending up in West Lafayette, reaching the rank of major and commanded the Student Army Training Corps at Purdue. When the war ended, Jackson briefly took up a law practice in Lafayette. In 1920, he returned to the Secretary of State position, first by appointment, then by election. At some point during this period, Jackson joined the Klan. He had his eye on the governor’s office, and D.C. Stephenson had his eye on Jackson.

In 1924, Jackson ran for the governor’s office. “The first year of Jackson’s term was comparatively tranquil. He got the state-tax rate reduced from 30 cents to 22. He expanded the state park system buying the first land for Dunes Park on the shore of Lake Michigan and promoting the movement for the George Rogers Clark Memorial at Vincennes.” In 1925, he was caught up in a minor scandal involving Prohibition. Prohibition was a national policy, but states had enforcement responsibility. Under Jackson and at the urging of the Anti-Saloon League, Indiana passed the “Bone Dry Law,” which made Indiana’s enforcement relatively strict, banning even medicinal whiskey. After that passed, Jackson’s second wife got sick.

When Jackson’s wife, Lydia, was ill, the governor asked the attorney general to procure some medicinal whiskey for her, as the attorney general previously had for his own children. Revelation of the alcohol consumption prompted a minor scandal that diminished Jackson’s standing as governor.

But Jackson’s big problem was with the Klan. While he was Secretary of State, Jackson issued the Klan a state charter. Governor McCray demanded that it be rescinded since the leadership would not reveal themselves to sign the charter. Jackson refused.  In 1923, Jackson was attempting to help the Klan secure the appointment of a favored individual, James McDonald, as Prosecutor of Marion County. When McCray’s former campaign manager could not make the sale, Jackson came in to make a pitch with the offer of a $10,000 bribe to make the appointment. McCray did not accept, appointing Will Remy as Prosecutor instead. It would not be long before McCray was forced to resign due to his legal problems (said to have been fanned by Klansmen who opposed him.)

D.C. Stephenson arranged to put Jackson at the head of a ticket pushed by the Klan. Jackson accepted $227,000 in campaign funds and promised to put Stephenson’s men in state positions. Thanks to Klan support, Jackson won a contested Republican primary. Meanwhile, on the Democratic side, the Catholic support for anti-Klan, Lafayette mayor, George Durgan was not enough to win the primary against Tom Taggert’s machine candidate, Dr. Carleton McCulloch. McCulloch and Taggart had decided on a neutral strategy with respect to the Klan. The party rank and file was divided on the issue — the Democrats Catholic constituency was anti-Klan but there were plenty of Democratic Klansmen. Durgan’s strong showing, however, disrupted their plans. McCulloch only got a plurality, and he was therefore forced to contend with the strength of the anti-Klan movement in the party. After the primary, McCulloch was forced to speak out against the Klan to get the Democratic nomination. Despite the candidates’ efforts to mute the Klan issue, the newspaper coverage of the election turned the election into a referendum on the Klan. Stephenson’s man, Ed Jackson, beat McCulloch 53.4% to 46.6%. The election marked a demographic shift with Democrats losing a good number of white Protestants and picking up the support of black voters who had formerly been loyal Republicans.

Stephenson’s political ambitions caused friction with the national organization. The national organization was not so eager to engage overtly in politics. Many of its members looked upon the Klan as a lodge where they could talk about their vision of “pure American values” in private. But Stephenson was ambitious and not content to work in the political background. There was also the matter of money.

On July 4, 1923, Stephenson was appointed Grand Dragon of Indiana. Apparently the Klan organization was such that a semi-autonomous division could be created and a Grand Dragon appointed — this was not often done for financial reasons. But, in Stephenson’s case, the move seemed justified. Nevertheless, the Indiana Klan had to pay substantial “tribute” to the national organization. Stephenson resigned his positions in September of 1923 and, between then and the Spring of 1924, there was jockeying between him and the Imperial Wizard Hiram Evans for control of the Indiana organization. In May of 1924 — after the primary in which Jackson was nominated as the Republican gubernatorial nominee —  Stephenson declared Indiana’s independence of the national Klan.