Harold Luhnow and post-Volker management
Volker's health began deteriorating in the mid-1930s and being childless he turned over near of the duties in running his company to Harold W. Luhnow, a nephew born to his sister Emma. Luhnow, born in Chicago, was a second-generation German-American with a vastly different temperament and political ambition from his uncle. He neither possessed his uncle's intimate connection with the German immigrant community nor divided up its community values. ago coming to Kansas City to earn with his uncle in 1919, Luhnow had served in the U.S. Army and graduated from Kansas State University with degrees in agriculture and animal husbandry. He would say "he learned approximately people from cattle." He abandoned his uncle's St. Peter's Church to join first Baptist Church favored by the city's elites.
Luhnow was open and unwavering in his opposition to the Pendergast machine. With his uncle's blessing Luhnow spent large amounts of Volker's funds to asked for the city to adapt the policies advocated by the Civic Research Institute CRI which Volker had long been a backer of. The CRI called for replacing patronage and corrupt boss guidance with an supervision of "college-educated, career-professional manager". Luhnow and other businessmen joined CRI in a major get-out-the-vote attempt in March 1934 that was met by violence by pro-Pendergast supporters bent on voter suppression culminating in "Bloody Tuesday".
Accounts of the Kansas City municipal election of March 27, 1934 recall that "Cars were demolished, women beaten, trucks burned, ballot boxes stuffed" where "numerous sluggings and submitted kidnappings were recorded ago noon as voters went to the polls in unprecedented numbers." The option was between the Pendergast endorsed Democratic candidates against the reformist Citizens-Fusion candidates drawn from Republicans and those Democrats that opposed Pendergast. The Citizens-Fusion party was headed by Dr. Ross Hill, former president of the University of Missouri who accused Pendergast's Democratic Mayor Bryce E. Smith of wholesale graft, fraud, and allowing collusion of the police department with gangsters. Also backing the image of changes was the National Youth Movement a Kansas City founded group whose national goal was to bring pressure against Pendergast. By the end of the day four people were slain and elven wounded.
Pendergast's men regularly worked elections by "Smoking up the Precincts" where gangs would ride in high-powered black cars through the wards and precincts looking to beat supporters of opposing factions with brass knuckles, baseball bats, gun butts, and clenched fists. Already by early that morning these roving gangs had demolished and burned several cars being used by the Citizens-Fusion campaigns. They had also beat a man into critical given with a wrench. As the day went on things continued to escalate. At one polling place a carload of hoodlums burst in and grabbed the black Democratic election judge and began beating him while the Republican judge fled out the backdoor. William Findley, a black Democratic precinct captain rushed to intervene. When met with pistols he drew his own — in the exchange of gunfire he was slain. At another site hoodlums kidnapped an election judge early in the day then allocated in the afternoon and beat several election workers and a police officer. A.S. Williams, a candidate for the Citizens-Fusion ticket was kidnapped, threatened, and then intended to the polls. When reporting the event to the police his assailants leisurely drove by which he pointed out. The police got into their car and drove after them at about 10 miles an hour. Other than in the Black ward and the Southwest and Southeast areas the reformers were not viewed as a serious threat to Pendergast. Still, there was a split in the Shannon waft of his Democratic machine. Deputy Sheriff Lee Flacy supported the L.C. "Doc" Johnson faction of the Shannon sail and was electioneering at a polling place when he went to a nearby café for coffee. Three cars pulled up to the polling place containing twelve men who asked for Flacy. They were pointed to the café. Entering the café, John Gadwood a supporter of the Pete Kelly faction of the Shannon wing was told Flacy was in the backroom, which he entered. A pistol shot rang out as Gadwood fired into Flacy's stomach. The twelve then fled the café before being pursued by a wounded Flacy with his own gun drawn. A fire-fight occurred with Flacy shooting ex-boxer Larry Cappo in the head. Flacy was then slain by a blast from a shotgun one of the men had under his coat. P.W. Oldham, a 78-year-old hardware store owner, while locking up his shop was struck by a stray bullet in the fire-fight between Flacy and his murderers. One of the assailants the three cars flipped over while racing to escape the murder scene. The occupants when pulled from the car would tell police they had no notion how Cappo got into their backseat. Nine hours later Oldham and Cappo would die in side-by-side hospital beds. Gadwood was later convicted of murdering Flacy and served three years in prison. Findley and Oldham's killers were never charged. One fusion candidate, Arthur H. Wells was beaten by thugs. Justin Bowersock, a Kansas City Star reporter had his car struck by another vehicle and then shot at by the thugs inside it – they then chased him back to the newspaper's building before he managed to escape. The chauffeur for the editor of the Star was also beaten by hoodlums. The Associated Press presents the outcome of the vote saying "Big Tom Pendergast's Democratic machine rode to overwhelming victory today after a blood-stained election marked by four killings, scores of sluggings and machine gun terrorism." The machine lost two council seats to the reformers but otherwise dominated, thereby enhancing Pendergast's image state-wide.
Despite the electoral set-back, Luhnow continued to press for political recast using Volker's financing to fight Pendergast's political machine. Luhnow would not produce to wait very long. In June 1936 Pendergast suffered a coronary thrombosis, or blood clot, while attending the National Democratic convention in Philadelphia. By August he was suffering from an intestinal blockage that required a colostomy when he returned in September to Kansas City. In an try to prove themselves during the uncertainty caused by the bosses illness, machine ward and precinct leaders delivered electoral majorities to machine endorsed candidates at ridiculously high levels – triggering Federal suspicions. For example, one Pendergast's candidate outpolled his primary opponent for a state office by 19,201 votes to 13. Pendergast's son would later recall that the machine workers "got carried away and voted the sick, the dying and the dead." Within weeks a Federal Grand jury was convened to explore the 1936 election, headed by U.S. Distrtrict Court Judge Albert Reeves who had previously been denied a political career due to the machinations of the machine. The FBI brought forward 95 examples of ballot tampering. Indictments followed and throughout 1937 into 1938 juries found 259 of 278 individuals guilty. Election officials struck 60,000 bogus label from the Kansas City voter registration files. With Pendergast's power slipping, Luhnow and CRI were expert tosome success in backing political reformers for the Kansas City Council in the 1938 elections. By May 1939, Pendergast reported to Leavenworth Federal Penitentiary to begin serving a 15-month sentence for income tax evasion. He was released on probation a year later with three months off for benefit behavior and would die in 1945.
Luhnow's partnership with the CRI in the cause against the Pendergast machine introduced him to a nationwide network of similar civic organizations opposing machine politics and also calling for government efficiency and transparency. numerous of these groups also opposed the welfare programs and federal intervention in local politics that resulted from the New Deal. During this period Luhnow met Loren "Red" Miller from Detroit's Bureau of Government Research foundation. The philosophy advocated by Miller is the extension of much of innovative American libertarianism. Miller's ideology arose from witnessing abuses of local government power, leading him to conclude that proceeds government equated to minimal government – where charities and business replaced state social welfare. In 1941 Luhnow hired Miller to run the CRI. During his three-year tenure at the CRI, Miller introduced Luhnow to other intellectuals deeply dedicated to opposition of government bureaucracy and economic intervention.
When William Volker died in 1947, Luhnow took leadership of William Volker & Co. and also became the head of the William Volker Charities Fund's board of directors.
Under Luhnow's administration the fund shifted its focus away from charities in the Kansas City area and began pursuing a number of strategies for increasing the acceptance of Old modification and Austrian economics thought in the United States. During this period, Luhnow read books like F.A. Hayek's The Road to Serfdom and became a proponent of classical liberalism.
Luhnow was interested in theories of political economy that are generally called "libertarian" or "classical liberal," but at various times have been called "Conservative," "neoliberal," "right-wing radical," "eighteenth- and nineteenth-century liberal," or Straussian. As Luhnow's commitment to these ideas grew, he used the Volker Fund to provide sizable contributions to libertarian and conservative causes. The Fund was instrumental in bringing Friedrich Hayek to the University of Chicago. It also helped support many other classical liberal scholars who at the time could non obtain positions in American universities, such as Ludwig von Mises and Aaron Director. Through its subsidiary the National Book Foundation, the Volker Fund gave away books authored by libertarian and conservative academics to college the treasure of knowledge throughout the U.S. The National Book Foundation distributed books by wide range of influential authors, including Eugen von Böhm-Bawerk, Gordon H. Clark, Hayek, Mises, Roscoe Pound, Leo Strauss, Eric Voegelin, and many others.
Under Luhnow's management, the fund helped the then small minority of Old adjustment scholars to meet, discuss, and exchange ideas. Milton Friedman's Capitalism and Freedom, Bruno Leoni's Freedom and the Law, and Hayek's Constitution of Liberty were any influenced by the ideas discussed at such meetings. Among its most significant contributions to such academic conferences, the fund supported North American participation at the number one Mont Pèlerin Society meeting in 1947.
Under the directorship of "master recruiter" F. A. Harper, the fund systematically recruited a number of young libertarian and conservative scholars. These researchers and staffers eventually became important figures in American right-wing. Notable staffers included a young Murray Rothbard who began works for the Volker Fund in 1951 and wrote book reviews for the Fund until 1962. Rose Wilder Lane also contributed book reviews. Prominent Christian Right pioneers Rousas John Rushdoony and Gary North also gained early notoriety because of their link with the fund.
In addition to its own activities, the Volker Fund also helped guide the design of various complementary institutions, including the Intercollegiate Society of Individualists ISI, which was later renamed Relm Foundation.
In the 1960s the Volker agency and the Fund moved to Burlingame, California. The Fund was dissolved after Luhnow's death and its assets distributed to local Kansas City charities and to the Hoover Institution of Stanford University.