When McMurtry became aware of the critical condition into which the Order had fallen after Germer's death, he was impelled to invoke his documents of emergency authorization from Crowley, and assume the title "Caliph of O.T.O.," as specified in Crowley's letters to McMurtry from the 1940s. For the two witnesses he believed were necessary for this act, he chose Dr. Israel Regardie (1907-1985) and Gerald Yorke (1901-1983). McMurtry referred to these two as the "Eyes of Horus," as the two most prominent surviving personal students of Crowley. He advised them of his plans to reconstitute the O.T.O. using his letters of charter from Crowley, and requested their support, which was offered. McMurtry completed the activation of his Caliphate by June of 1969, with a letter to Hermann Metzger of Switzerland.
Upon activation of the Caliphate, surviving O.T.O. members from the Germer and Crowley years were invited to join with McMurtry to resume regular operations of O.T.O. At that time there were less than a dozen surviving older O.T.O. members in the United States. Soror Meral, Soror Grimaud, Mildred Burlingame and Gabriel Montenegro indicated willingness to see the O.T.O. accessible to the general public. Ray Burlingame had died some years before, and Dr. Montenegro died on July 14, 1969, before an organizational meeting could be held. Frederick Mellinger had re-established his contacts with the Theosophical Society and had been essentially inactive in O.T.O. since approximately 1956, except to write his letter blocking the probate of Germer's will in favor of Metzger in 1963. Mellinger died on August 29, 1970. In 1969 and 1970, McMurtry, Burlingame and Sorores Meral and Grimaud began to perform initiations. On December 28, 1971, the Ordo Templi Orientis Association was registered with the State of California to form a legal entity for O.T.O.
Sascha Germer died in April of 1975, and in 1976 when her death became known, the O.T.O. Association under McMurtry obtained a court order for delivery of the remnant of the O.T.O. archives that had been in her custodianship. This order was issued, recognizing Grady McMurtry as the authorized representative of O.T.O., by the Superior Court in Calaveras County, California, and filed July 27th, 1976.
Under McMurtry, as Caliph or acting Head of O.T.O., several attempts were made to attract new members to O.T.O. and to make the Order known to the public. In 1970, O.T.O. published Crowley's Thoth Tarot Cards, illustrated by Lady Frieda Harris, from the Dublin address. Response was slow, but a few new members were initiated through efforts centered in Dublin, California at The College of Thelema and in San Francisco at the Kaaba Clerk House. The San Francisco activity collapsed, and one new member resigned. Activity continued for two years in Dublin, and then was transferred to Berkeley, California.
In 1977, McMurtry held O.T.O. initiations at his home in Berkeley, California, and began a group there. O.T.O. was incorporated under the laws of the State of California on March 26th, 1979 e.v. Those who had claimed in print to be O.T.O. members or who were known to be former members were notified of the formation of this corporation, and given a period of time to file a claim to continued membership, according to a precedent established earlier by Karl Germer. The corporation attained Federal Tax exemption as a religious entity under IRS Code 501(c)3 in 1982.
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