Rumors have swirled around the Dearborn Hotel for years. Was it really built by the Ku Klux Klan? Part of a researcher’s job is to sift through the available snippets of historic resources and tell a factual story about a person, place, or event. We look at newspaper articles, oral recordings, maps, corporate histories, and many other sources, realizing that sometimes these sources are just plain inaccurate or incomplete. Hopefully enough evidence will trickle down through time allowing us to check, double check, and confirm our facts in several different primary sources.

Oral histories in particular can be troublesome. Although personal histories often provide the most colorful stories, we humans sometimes get it wrong. People’s memories fade over time, individuals will have different perspectives of the same event, and we tend to repeat hearsay without questioning its validity. Which leads to today’s “Then and Now” column about the Dearborn Hotel on the east side and my quest to separate fact from urban legend.

As I have worked with the history and preservation committee of NESCO (the Near East Side Community Organization), over a dozen people have commented that the ten-story Dearborn Hotel was built by the Ku Klux Klan to house out-of-town members. Many eastsiders believe that a tunnel runs (or ran) under the street connecting the Dearborn Hotel to a brick house that was built for a KKK officer (some even say it was built for Grand Dragon D. C. Stephenson). So many individuals have repeated this that I tend to believe at least part of this persistent rumor, but I have not located written proof. Here is what I know and theorize so far. Can you add any details?

Liberty Hall announcement

Although most people only remember this building as the Dearborn Hotel, it was originally built to house a community club. Newspaper accounts reveal that several athletic clubs merged in December 1921 to form the Brookside Athletic Association. They dreamed of building a club house for sporting events as well as community gatherings. Minutes of organizational meetings explained that “our motive is an unselfish one, and our project unrestricted except to color. Any creed is invited, and [either] sex is welcome so long as one’s moral side is unquestionable.” Officers temporarily chose the name Westinghouse Community Club in February 1922 (presumably after the nearby Westinghouse Lamp Company), but this was quickly changed to the Commonwealth Community Club. The building itself was named Liberty Hall. The fundraising committee attempted to raise $75,000 by selling memberships and bricks to the public. (Indianapolis Star, February 17, 1923)

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Could the Ku Klux Klan have been behind the construction of this club? These reasons support the idea:

  • The Klan was at its height of popularity and power in Indiana in the early 1920s. By 1925, Indiana’s governor and over half of the members of the Indiana General Assembly were members of the Klan. As many as forty percent of the native-born white men in Indianapolis were KKK members and many east-siders were active participants.
  • The patriotic name Liberty Hall likely could have been chosen by the “100% American” Klan members who were upset by the influx of foreigners, primarily Catholics from eastern European countries, who were settling in Indianapolis in large numbers. An older gentleman from the nearby St. Philip Neri Parish told me that his Catholic school basketball team was never invited to play other teams in the Dearborn Hotel’s gymnasium because of the Klan’s involvement.
  • Keeping children “out of bad company” fits in with the goals of the Klan, who targeted adulterers, gamblers, prohibition violators, and undisciplined youths.
  • The name Commonwealth Community Club, or CCC for short, seems to mimic the alliteration of the Ku Klux Klan.


Liberty Hall, under construction, 1925
(W. H. Bass Photo Company Collection, Indiana Historical Society)

Liberty Hall, seen here during construction in 1925, was started by early 1923 and may have been built in phases. It appears that they are adding the top six floors. This view looks northeast at the brick and steel frame structure. If this building was a social club for the Ku Klux Klan, newspaper articles give no hint of it. Committee members regularly reported on the many potential community uses for the soon- to-be-finished hall. The fireproof building was to feature an auditorium/gymnasium suitable for socials, dances, home talent plays, musicals, and basketball. An area was to be furnished with home-like furniture, a reading room, kitchen, showers and baths, and public restrooms. The committee was working on a futuristic-sounding “wireless telephone system, whereby it will be possible for any member to learn the complete program to be at the community house at any time, thereby allowing him to keep in touch with any of the neighborhood activities in which he may be interested.”

Liberty Hall, 1926
(W.H. Bass Photo Company Collection, Indiana Historical Society)

The Bass Photo Company photographed the newly constructed building in 1926. The club lasted a very short time. By 1930 the address was listed as the Marigold Club and Café, and in 1931 was listed for the first time as the Dearborn Hotel. The hotel served the eastside for about sixty years. Sixty-six rooms on the upper floors housed guests while a bar and full-sized gymnasium were open to the public. WAIV, a classical radio station started by Eli Lilly and Company scientists, went on the air in 1961 from studios in the Dearborn. Ironically, in 1968 WTLC, the first African-American radio station in Indianapolis, began broadcasting from the building supposedly built by the Ku Klux Klan.


In 1991 the rundown Dearborn Hotel was purchased by Wheeler Mission for use as a full-service facility for needy families and youth. It was named the John D. Hughes Community Center. Since 2009 Wheeler Mission has used the building as their Center for Women and Children. (Google Street View looking west on Michigan Street, 2009)

Streetview of the house

So does anyone know if a tunnel ever led from this house at 3203 E. Michigan Street under the street to the Dearborn Hotel? Was this home built by the Ku Klux Klan or the Commonwealth Community Club? Grand Dragon D. C. Stephenson lived in nearby Irvington and was sentenced to life in prison for the rape and kidnapping of a woman in 1925. It is possible that the home was planned for Stephenson or another KKK officer, but never came to be due to the decline of the Klan during the late 1920s. The home was owned in the 1930s through ‘50s by Dr. Robert J. D. Peters who saw patients in the small addition to the east (left in this 2009 Google Street View photo). Neighbors have told me that a door on the north wall (facing the Dearborn Hotel) has been blocked up and others swear that a tunnel has mostly been filled-in but still leads several yards under the street. My furnace man used to service this house and says that he has inspected the basement closely and there is no clue that there is now or ever was a tunnel.

Streetview of hotel and house

(2009 Google Street View looking east on Michigan Street from Dearborn Street)

Follow up: I called the current homeowners, Gene and Jan Crouch, who have a wealth of information that came with the property. This house was built in 1927 (they have the receipt to prove it) for Dr. Peters who was a good friend of D. C. Stephenson. By 1927 Stephenson was in jail and the Klan was rapidly losing popularity. The tunnel led not to Liberty Hall, but to a one-story brick machine shop west of the hall. In case of a police raid, Klan members could leave Liberty Hall, go the adjacent machine shop, ditch their robes in the tunnel, and be playing pool in the Doctor’s basement by the time the cops arrived. Gene believes that Stephenson himself was involved with planning Liberty Hall, but he is not sure about the KKK’s involvement (but the CCC name is suspicious to him, too). Many of the Klan members were also members of the local Masonic Lodge. He believes the tunnel was only used for a few years and partially collapsed “many, many” years ago when a sewer line was run underneath Michigan Street. The tunnel entrance in the front of their home caved in about fifteen years ago and solid blocks now cover the opening. Dr. Peters died in the 1950s, but his wife continued to live in the home until about 1989.

I have yet to determine the Klan’s involvement, but I am sharing my notes in hopes that the readers of Historic Indianapolis will share their memories and help solve this mystery that I have not had time to fully research.

[Would you like to see your old photographs featured in this Then and Now column? If so, attach a high resolution jpeg or png and any details about the building within our “Say Hi” link in the footer of our website.]


15 responses to “Then and Now: Liberty Hall / Dearborn Hotel, 3208 E. Michigan Street”

  1. Dave Blomenberg says:

    The threefold hard C sound of the original club certainly fits in with the not-so-secret “code” of a KKK-sympathetic business. Many such businesses even changed to the folksy substitution of K’s in their names. This really is a fascinating article, Joan–thanks!

  2. Rochelle Hornsby-Goode says:

    I just recently found this sight and I love it!! I grew up on East New York Street. While waiting for our school bus we all took cover on the side porch (Dearborn Street) of this house. In all the years (3 or4) 1973-1976, we children never seen anyone at this house. I would have sworn that it was vacant. Not one time did anyone ever come out and tell us to remove ourselves from the porch! I’m seeing that the property was occupied so maybe the Drs. wife must have not been bothered by us preteens and teenagers. I am glad that I finally have some history to this place, it’s always been a bit of a mystery! Thanks for the memories!

  3. Joan Hostetler says:

    Thanks for sharing your memories of the place, Rochelle. I need to write another follow-up to share that I found articles The Fiery Cross (the KKK’s newspaper) proving that the club was funded by the Klan.

  4. Donna Moore says:

    Just scrolled down and seen your name ??? i tried to find you on Facebook no luck. How are you and your family ?

    Would love to hear from you. Donna

  5. Brian Hinds says:

    I lived 2 houses away from this house when I was in my teens in the 90’s. My father also stayed in the hotel with my paternal mother when I was born in the 70’s. I grew up and lived on LaSalle st right off the Alley that borders this house to the South. I always thought this was a very nice house for the neighborhood. I never knew anyone to live in that house in all my 12 years on LaSalle St and walking by that house day and night while living next to it all those years. Pretty cool to get some history on this place as I was always curious myself. I know the Dearborn hotel has changed hands and been many different things. They have had a little thrift shop in the smaller building to the West of the hotel for a few years. Heck I remember when Club LaSalle was on the corner, RCA building was actually being used by RCA, the little VCR repair shop on the South East corner of LaSalle/Michigan and much more. Crazy how much this area has changed over the years.

  6. anthony johnson says:

    I lived there and worked as a desk clerk from 1984 to 1990 and I knew this hotel inside and out in the basement of the hotel on the west side there is a tunnel that did go thru but was bricked on the second floor was a basketball court and a small pool hall and on the third was a full suite this was a nice place to stay the weekly rent for this was $65.00 a week the upper rooms was $25.00 without a private bath and $35.00 with private bath this place did have a fire when one of the electrical box was over loaded took 2 weeks to get this back on and by the way the switch board was very old something like you see in a old movies . But anyway there was other rooms in the basement one was for all the items like clothes and TVs where tents would skip out and would hold them until they came back I got to look at some old suitcases where one had a letter from 1957 unopened next to the hotel was a body shop it also had a tunnel when I was there the owner was dick Denney he sold it to a new owner and only own it for 1 year he never paid the water bill so all the tents stop paying rent he paid it then resold it back to dick denney I moved out in 1990 now I have a beautiful home in Danville in

  7. John Bartlow says:

    I played basketball at the Dearborn Gym from about 1958 until 1962 or three. It would be hard to call it a “full size gym,” as it was a grade school size court. The court would end and there would be a wall about two feet away. Many a time I was body checked into an off court wall, as the competition was rough. There was a balcony that ran all the way around the gym, and they put a row of folding chairs where for a quarter you could watch industrial league games all day Sunday. Earl Engelhard ran the gym and charged 35 cents to play from ten until five and another 35 cents to play from 5 till 10 at night. You played until you lost and then had next. My mother worked in the Standard food store that was just to the west of the hotel during WWII. (you can see it in the pictures and it looks like a food store.) It was closed when a Standard “supermarket” opened at 10th and Dearborn sometime in the late 40’s or 50’s. I remember my grandmother working the election polls that were held in the hotel during the early 1950’s. There were two shops in the lower level walk downs on each side of the main entrance. One was a barber shop that was called “Paul’s”, if my memory serves me. He used hand clippers that pinched like all get out, but he only charged a quarter. I didn’t know if there was another auditorium or ballroom upstairs, but it would be tough to put a show on in the gym, as there was just no room for a stage or lights, and there was no sign of any plans for something like that. A friend of mine who was an Eagle Scout worked the desk at the hotel and saved a man’s life after a room fire, by giving him CPR or whatever it was called back then. Good times for a poor boy.

  8. Christopher Hodapp says:

    Our production company shot scenes from a movie in the Dearborn Hotel in the summer of 1988. “Father’s Day” starred country western singer and actor Ed Bruce, Terry Moore (of ‘Come Back Little Sheba’ and ‘Mighty Joe Young’ fame), and Grant Cramer (who soon afterwards got peripherally dragged into the O.J. Simpson trial mania). We primarily shot in one of the upstairs rooms (7th floor, I think), and the lobby and main staircase areas.

    When I went location hunting and found it, I had a long talk with one of the older employees then who told me the tunnel tale, and also claimed it went to the body shop across the street, not the house. His take was that Stephenson was locked in an especially bitter battle with the local parish priest at nearby St. Phillip Neri, so the ten story building was intentionally placed in that odd location out of downtown and up on Michigan Street so that all of the neighboring Catholics couldn’t avoid seeing the Klan’s hotel on their horizon every day of their lives. It certainly dominates the neighborhood even today, and it more than dwarfed the church, which is admittedly several blocks over on Rural.

    Another commenter mentioned the gymnasium at the Dearborn being cramped, with walls right around its edges. Curiously, the gym at St. Philip Neri suffered from the same design, as I recall. Perhaps a design fad at the time.

  9. Edwin Quantrall says:

    “Many of the Klan members were also members of the local Masonic Lodge.”

    That’s pretty unusual. The Klan generally saw the Masons as a pseudo- or anti-Christian cult. (Not to mention competition for all that dues and donation money!)

  10. Anonymous says:


  11. Sara says:

    when I was in the first grade 1971, We lived in an apartment above a tavern at the corner of Lasalle and Michigan – just a few doors down. I used to go to the Dearborn Hotel as a kid for my mother to get her cigarettes. There was a machine on the main level with the pull out knobs that you put coins into to get them. There was never any talk of the KKK -but my father used to talk about that hotel being used for the “Shriners” meetings. Part of the original Murat-Shrine circus prior to Barnum and Bailey taking over later. They had an open seating area, dark interior – mostly empty all the time. I’ve been trying to locate pictures of where I lived, and the street there from 1970-1971,72.

  12. MiKe sims says:

    I remember st Philip Neri. The Garvey family were parishioners.We used to bowl on the alleys in the basement. Fun times in the 40’s and 50’s

    Was that tavern the Tick Tock Lounge?

  13. John Dowd says:

    I delivered newspapers to the Dearborn in the late 50’s. I was also a student at St. Philip Neri school. I never knew anything about a Klan involvement there although I can remember feeling uncomfortable when dropping off the paper. They had a prepaid subscription so I never had to see anyone there to collect for the paper. We lived two blocks from the church. As far as the structure “dominating” the neighborhood and the nearby Catholic Church, I can honestly say I was only aware of the place when delivering the paper. I never noticed it in the skyline.

  14. Christopher Hodapp says:

    By 1923, Indiana had the largest per capita Klan membership of any state in the U.S. thanks to Stephenson’s marketing strategies and the hiring of traveling salesmen given major commissions to plump for members. Indiana’s Klan sold itself as a full-throated patriotic organization and down-peddled the national organization’s more racist rhetoric. Masons were considered to the cream off the top when it came to fraternal lodge members in those days (although the KKK deliberately went after ALL existing fraternal lodge members because those men were already amenable to joining multiple lodge groups in those days).

    Stephenson himself was made a Mason in Waltham, Massachusetts, and even after moving to Texas and then Indiana, he kept his membership there right up until after he was found guilty of murder in 1925. His house was (and is) in Irvington, just a block away from Irvington Lodge 666, and he was a regular attendee at their meetings. Several of Indiana’s top Klan organizers also were members or attendees there. Ironically, the Pulitzer Prize-winning reporter from the trial, John Niblack, received his law degree in 1927, and became the assistant Marion County prosecutor that year. He, too, was a member at Irvington Lodge, and Stephenson turned over all of his incriminating “little black boxes” to him, that were filled with cancelled checks, receipts, letters and other documents that proved wholesale corruption of political figures all over the state.

    The judge in Stephenson’s 1925 trial, Will M. Sparks, was also a Mason, from Noblesville, and he despised the Klan’s operations in Indiana. He had sentenced Stephenson to the longest prison term possible.

  15. Edward Vincent Olsen says:

    At the time the Dearborn Hotel was being built, Msgr. Noll, Pastor of St. Philip Neri was expanding the school to become the largest Roman Catholic Grade School in the Diocese of Indianapolis, and in the State of Indiana. There was a lot of trouble with the Klan and in the center of the transept windows of the church are two flags depicted, the flag that is visible on the North Street side is the US flag, and the flag in the South window is the flag of The Papal States. When the parish did build the school expansion, there is a huge stained glass window of the US Flag in the landing of the main staircase, “to prove how American Catholics are”.

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