Some 3 to 6 million people joined the Klan between 1920 and 1925; some of the Klan's greatest successes occurred in Indiana, Kansas, Oklahoma, Colorado, and Oregon. This time period saw major structural changes as a result of the severe agricultural crisis, the expansion and consolidation of industrial capitalization, and the expansion of suffrage to women. The Klan was characterized by nativism, racism, religious bigotry, coercive moralism, and economic conservatism. The Klan was guided by microeconomic logic to use cultural appeals to stimulate demand for what its members had to offer in exchange within economic and political markets. It also used cultural attacks to restrict the supply of competitors. Statistical analyses of State-level membership estimates and county-level membership data from Indiana, where the Klan experienced its greatest success, support these arguments. The independent variables used in these analyses included cultural differentiation, percentage urban, percentage decrease in the value of farmland, percentage of farms operated by tenants, and several other factors. Findings indicated that it is a mistake to ignore economic and political incentives when trying to explain the rise of the Klan in the early 1920s. Notably, the Klan's three historical peaks, which occurred in the South during Reconstruction, during the early 1920s, and in the South during the civil rights movement, have coincided with substantial economic and political transformations. Tables, figures, notes, and 54 references (Author abstract modified)