Even if hard times kill hate (which does indeed seem counter-intuitive), I really doubt they kill it that much.
There where other reasons for that massive decline
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Resistance and decline
Many groups and leaders, including prominent Protestant ministers such as Reinhold Niebuhr in Detroit, spoke out against the Klan. In response to blunt attacks against Jewish Americans and the Klan's campaign to illegalize private schools, the Jewish Anti-Defamation League was formed after the lynching of Leo Frank. When one civic group began to publish Klan membership lists, the number of members quickly declined. The National Association for the Advancement of Colored People carried on public education campaigns in order to inform people about Klan activities and lobbied against Klan abuses in Congress. After its peak in 1925, Klan membership began to decline rapidly in most areas of the Midwest.[61]
In Alabama, KKK vigilantes, thinking that they had governmental protection, launched a wave of physical terror in 1927, targeting both blacks and whites who had violated racial norms and for perceived moral lapses.[71] The state's conservative elite counterattacked. Grover C. Hall, Sr., editor of the Montgomery Advertiser, began publishing a series of editorials and articles that attacked the Klan for its "racial and religious intolerance". Hall won a Pulitzer Prize for his crusade.[72] Other newspapers kept up a steady, loud attack on the Klan, referring to the organization as violent and "un-American". Sheriffs cracked down. In the 1928 presidential election, the state voted for the Democratic candidate Al Smith, although he was Catholic. Klan membership in Alabama dropped to less than six thousand by 1930. Small independent units continued to be active in Birmingham, where in the late 1940s, members launched a reign of terror by bombing the homes of upwardly mobile African Americans. KKK activism increased as a reaction against the civil rights movement in the 1950s and 1960s. (see below.)
When D.C. Stephenson, the Grand Dragon of Indiana and 22 northern states, was convicted in 1925 of the notorious rape and murder of Madge Oberholtzer, the Klan declined dramatically in Indiana. Stephenson was convicted in a sensational trial. According to historian Leonard Moore, a leadership failure caused the organization's collapse:[73]
Stephenson and the other salesmen and office seekers who maneuvered for control of Indiana's Invisible Empire lacked both the ability and the desire to use the political system to carry out the Klan's stated goals. They were disinterested in, or perhaps even unaware of, grass roots concerns within the movement. For them, the Klan had been nothing more than a means for gaining wealth and power. These marginal men had risen to the top of the hooded order because, until it became a political force, the Klan had never required strong, dedicated leadership. More established and experienced politicians who endorsed the Klan, or who pursued some of the interests of their Klan constituents, also accomplished little. Factionalism created one barrier, but many politicians had supported the Klan simply out of expedience. When charges of crime and corruption began to taint the movement, those concerned about their political futures had even less reason to work on the Klan's behalf.
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