A Man Involved in Money 11-7-651H[an
n 11'4 ne
involved[ it 0-.
John 13. MacArthur has a 30' -year winning -streak and
.
Nov.
By NIXON SMILEY
-OHN D. MacArtbur,'one of ibe, nation's
richestnien, lives in a'$39,000 house, and.
draws a salary of. $25,000. a year. And
When, you see him slouching about his Colonnades
Hotel at Palm Beach Shores shirt -sleeved- and tier
.less — you can believe that be lives on a m.u.cb small-
er income.
MacArthur, as incredibly healthy at 68 as he is
incredibly rich, is a rare individual who make's no
effort to impress anyone.
0- ' wner of the MacArthur Insurance Group, which
includes Bankers Life and Casualty Co. of Chicago
and 11 other insurance -firms, he is worth more than
$300 million.
He could live in as fine a Palm, Beach mansion. as
he wished to, build, have a chauffeur, a house full of
servants, and give lavish parties.
When, such an idea was suggested to his wife,
she exploded with laughter.
"Him ate Palm Beach! " she exclaimed. "He'd go
nuts, with nothing to do."
MacArthur is an *early riser. Frequently getting
up before his wife does, he may fry himself an egg,
or, be may get into his two -year --old red Cadillac and
drive from 'his Lake Park home to his hotel for eggs
and toast.
Later in the morning he may drive to his office,
in a Boom -time bank building that looks like an aban-
doned warehouse. Or, be, may choose to spend the
morning slouching over coffee and smoking endless
cigarets as he talks with engineers, architects, fore-
men, bright-eyed salesmen, or his own executives.
Half a dozen persons may be sitting about his
table, each with his own mission. Even "con" men are
not tossed out. Crusty MacArthur figures he can
match wits with the best of them.
A single idea made MacArthur wealthy.
In the midst of the Depression of the 1930's,
when millions of people were dropping their insur-
ance policies because they could not meet the pay-
ments,, MacArthur figured out how to cash in on an
,apparently hopeless economic situation.
He offered insurance by mail — the - amount a
man could buy "for the dollar be had in his pocket."
The response was incredible. Competitors were
slow to adopt what to them was an utterly unortho-
dox. way of selling insurance, and MacArthur was
immediately on the road to riches.
, But MacArthur comes from a family noted for
its ideas. Geneiral Douglas MacArthur was a distant
cousin. The late, Charles MacArthur — author of
"The Front Page" and husband of Helen Hayes
was' a brother. And MacArthur has another brother,
Alfred, of Chicago, who made his own millions.
Alfred, made his in the insurance business too.
John D. MacArthur has been called a genius.
But whatever he has been called — and he has
been, called many things —1 MacArthur does seem to
have a genius for getting himself involved. in activi-
ties that require money.
His tendency to get himself involved. brought
him to Florida, where he has investments valued at
more than $50 million. Some of his investments came
about almost 'by accident.
Last year, for instance, be signed a note for over
$1 million, and wound up with the first, mortgage On
the Nassau Harbor Club — a property that . he never
wanted.
But MacArthur is like a cat. No matter how he is
dropped, he always lands on his feet..
As it turned out, he can't lose on his Nassau "ire
vestment," which is valued at between $3 and $4 mil-
lion.
Everybody knows of his latest involvement in
the. DeLong Ruby case.
A strange slide of the; DeLong Ruby involvement
is MacArthur's complete lack of interest in jewelry.
Why did he get involved?
"The underworld vermin who had the ruby
threatened to throw it into the ocean unless he got
$25,000 for its return," MacArthur said, slouching in
a. chair in the dining room. of his Colonnades Hotel.
0
$300 million,
MacArthurPutup -the money a . nd the ruby was
deliver -ed to b.im,., by way of a telephone booth at
Palm Beach Gardens, on Sept. 2. He returned it to
the American. Museum of Natural History in New
'York, from where it had been stolen the ye'
ar before.
"I felt like a -fool, giving that much money to the
underworld vermin," MacArthur'said "but if it helps
to catch, the rest, of the crumbs involved, then I'll. be
satisfied."
The $25,000 — which MacArthur hopes to "write
off" his income tax as a gift to the museum — was
less to him. than is a handful of change to most of us.
Moreover, the ruby affairs brought him a world
of publicity — for his insurance companies; for, the
city- of his own creation, Palm Beach Gardens, and
for his Colonnades Hotel.
But one MacArthur involvement can easily lead'
to another, as happened when hey and his wife Jour-
neyed to New York where. hewas honored by the
'American Museum of Natural History for his public
service.
As MacArthur was leaving his hotel, in company
with his 'Wife. and Heloen Hayes, a "kindly' looking
man" approached and asked:
"Are you Mr. John D. MacArthur?"
"I can't deny it," MacArthur said figuring it
was another person who wanted to congratulate him
on. recovering the ruby.
'Well., 1've got a summons for you," the man
replied, banding it to MacArthur.
It proved to be a summons in a'S2 million dam-
age suit filed against MacArthur by a former em.-
p1oye.
"He].], I'm always getting sued for something or
other," he said, recalling the incident as he lighted a.
fresh cigaret from the stub of the one he had just
smoked.
This time. il was by a fellow I fired some time
ago. Claimed his reputation was damaged because, I
let him out. Hell, I couldn't have damaged his reputa-
tion. If he'd. been. any damn good I wouldn't have
fired him.."
MacArthur should be accustomed to litigation.
Few successful men have been, involved in mora 'suits
and counter -suits.
"I'm supp o*sed to love litigation," he said, screw-,
ing up his deeply lined face.. "I'll probably plead guil-
ty. I did enjoy Winning* when I was young — and I
won a lot of battles.
"Maybe I won. so many battles because; I tried tc
avoid. those where I stood a good chance of losing."
He has no reluctance- about discussing the count-
less suits in. which he has been, involved, including
litigation with his wife, the former Catherine Hyland,
in the late 1940's.
"She sued the bell out of me and I sued her," he
said.
The MacAxthurs were divorced in 1.948 but smbse-
quently remarried. She is a quiet wom-an, with, an ex-
plosive laugh, who helped her husband to build his
insurance business.
MacArthur has a son and a daughter by his first
wife, Louise Ingals MacArthur. He has no children by -
his second wife, whom he married the first time
— in 1937.
ACARTIJUR has been investigated count-
less times by the Internal Aevenue, Service
—'which be refers to, as the "Infernal Rev-
enue, Service." And be has been accused by. the. U.S.
Post Office and by the Federal Trade Commission.
"I've been investigated and re -investigated more.
times than I can remember — and I've been exonerat-
ed every time," he said. "I think that's a pretty damn
good record. If I had ever committed anything wrong
eveTybody would know, about it."
But be contends that anybody who enjoys sky-
rocketing financial success is subject to investigation
and to lawsuits.
I NOV, 4/) 194
ht/If you're highly successful in a, financial way,"
said, (tpeople may look at you and say: 'That fel-
low's got to be crooked, to get where he is.'
And people will sue you if there's a slim chance
of collecting, he said.
"A lawyer once. said to me after he had lost a
suit ': 'MacArthur, I'm going to sue you every chance
I get. I've got the law of averages on my side. One
day I'll win and you'll pay plenty.'
"I replied: 'Go ahead and sue, you S-O.B.'
For several years MacArthur engaged in a battle
with state insurance commissioners and competitors.
His biggest suit — for $30 million — was filed
against the late Ed Larson, Florida insurance commis-
sioner, and Zack. Cravely, Georgia insurance commis-
sioner.
He charged that the commissioners conspired
with his competitors to throttle -his insurance busi-
ness -in the two states. -He dropped the suit after at-
taining his goal — freedom for- his agents to sell in-
surpnee in Florida and Georgia.
"Hell, I liked Ed Larson," he said, recalling the
suit of nearly- 15 years ago. "I' brought the suit in
self-defense. I learned years ago that the best defense
Is an. offense,
MacArthur sued an olld friend` publicist Carl
Byoir, for $5 million.
64l' did it to make Carl stop libeling me," MacAr,
thur, said. "We had been good friends; but when a
deal of his went sour he blamed me for it and proceed-
ed to attack me, and my company."
(Byoir was associated with. Ralph Stolkin and
Julius Gaines in the early development of Carol City,,
in. Dade County, and in the development of Lake Park
in, Palm Beach County. NfacArthur acquired both
properties, after which be, and Gaines engaged in li-ti-
glation.)
ECALLING his damage suit against Byoir,
MacArthur winced painfully.
"Hell) I couldn't figureout what got into
Carl," he said.. "We had been good friends for years.
Then, all of...a sudden, he began attacking, me, in. leit-
ters to our mutual friends. I figured something was
wrong —. and I began investigating. T had one of my
agents get a copy of the hospital records wheire Carl.
had gone fora physical checkup.
"Sure enough. something- was wrong: Carl had
cancer. He was going to die and be knew it. But up
untiL.this time nobody knew it, but Carl and his
doctor. He hadn't even told, his wife."
After Byoir died in 1957, MacArthur dropped his
suit - but because- it involved a dead man's estate, a
legal ceremony was required.
MacArthur and Mrs. Grace Byoir met with their
lawyers and he signed papers releasing the Byolr es-
tate from possible. damages-. Mrs. Byoir's lawyer
turned to. her and informed her that she. must hand
MacArth'ur a dollar to complete the legality.
"She opened her purse," MacArthur recalled,
`band took out a one dollar gold piece and handed it to
Recollection of the incident was more touching
than the tough-minded MacArthur wanted to show.
"Hell, I took it home and showed it to my wife,"
he said. "And then's when the trouble started. I had
to scrounge around and find another dollar gold piece
so that she could have, a pair of earrings.
MacArthur entered the insurance business with
his oldest brother, -Alfred, in Chicago at the age of
19. Failure to) finish grammar school proved to be no
handicap.
About as crusty then as he is now, MacArthur
soon be -came a topnotch salesman.. He left phis brother
in the 1920's to take a jo,b with another company',
quit it in 1928 to buy the Marquette Life, Insurance
Co. for $7,500.
Forming a partnership with. Catherine Hyland,
MacArthur turned the office over to her and he went
outside to sell. Together they survived the market
crash of 1929 and the dep cession that followed.
"But we were just holding our -own," MacArthur
reca lled.
In 1935 MacArthur purchased Bankers Life and
L
Casualty Co. for $2,500. It was through -Bankers that
he started his mail order business.
"Remember, it was in -the depression, and, people
just didn't have money to make annual payments on
the policies they had taken out in better 'times," Mae -
Arthur said. "So they began dropping them.
-64But everybody wanted some insurance -the
amount they could afford. I figured. that if I could
find some way to do business with- a persion for the
amount of money he had in his pocket — a -dollar or
two dollars — I could sell him insurance."
But 'his troubles started as his business skyrock-
eted.
"Insurance commissioners just, couldn't believe
that a company could suddenly start doing such a big
business.," he said.
It took MacArthur several years to convince
state insurance commissioners that there was noth-
ing. wrong with selling insurance by mail.
MacArthur's Florida activities began 10�- years
ago when he took possession of 3,000 -acre Carol
City and 3,200 acres in Palm Beach County, -including
the town of Lake Park.
"It all happened because I lent Ralph Stolkin a
rnitlion, dollars in..a weak moment," MacArthur said.
"It it was getting late at night and I was -tired, so I
said: 'Aw, hell, I'll let you have the money,' and
wrote him a check.
"The next thing I knew Ralph was down in Dade
County with Carl Byoir,, announcing plans to build
10,000 homes in a place called Stolkin City.
0 ."But Ralph was getting some bad publicity and
he decided to change the name to Coral City."
(The Miami Herald and The Wall Street Journal
ran series about Stolkin's activities as a punchboard
manufacturer and his involvement in allegedly ques.-
tionabte charity drives.)
"No sooner than Ralph had changed the name to
Coral City, the city of Coral Gables: began raising
hell," MacArthur added. "To avoid a.suit, Ralph
changed the name to Carol City."
MacArthur took over Carol City and Lake Park
ito recover his loan to Stolkin and one he had, subse-
quently made to Byoir.
He invested $8 million in Carol City before sell-
ing it to developers Arthur Desser and Harold Gar-
field for $12 million, but later repossessed it after
their plans went sour.
'.MacArthur concentrated his interest in the devol-
opment of Lake Park, in which he owned 80 per cent
of the vacant lots, as well as more than 2,000 acres of
other north Palm Beach County properties.
When Lake Park officials bucked his plans for
ins tatting water and sewers, he ordered them. to va-
eate the municipal buildings, which he owned, th'all
proceeded to go over their heads to get the backing
of voting residents.
INCE -then Lake Park and surrounding
communities have become the; fastest gro:w-
ing part of Palm Beach County.
In 1960 MacArthur started his own unique city,
Palm Beach Gardens. Since then it. has grown from
one squat -ter to -more than 3,000 and growth contin-
ues rapidly.
. MacArthur believes his city is one of the few
ever to start with an industry -before the first home
was built.
The city's first building permit was issued for an
RC.A computer -building plant,: since expanded and
now employing 2,000. MacArthur owns a large block
of RCA stock,
Palm Beach Gardens is national headquarters of
the Professional Golfers Association*, with ---two 36 -
:Mi -,ami Herald StJNDA.YoMAGAZfNE'-Su'rida.y,,N.oy..:.7':--i-965 .9
AGC. #
*4irmo_
Fz_ft�_M
"I've been investigated and re-inves-
mw-w
tiacted-more times than I can re -
M ember."
"'Hell I'm always . getting sued for
something; or other.
=_n
k.Maybe I -"7on so any hattles be-,
Cause I tried to avo"d. fixose where I
n g GIMCC Of' IOSI'ITBO '"
F),toC,)d I _�00d. CT rj 0
ning in; shirt sleeveSNXI.--'S the uiAmer?
Like his late brother, Charlie, MacArthur is
pmcbezd joker.
Some. Ynonths ago wher, he Nvass to, cut a r lbboo r to
Dper, ffic, new Palm Beach Gardens interchange on the
Sunsh6n.e State, Parkway, MacArthur unexpectedly
reached J(:�ir I the taright necktie cd County Commission-
eT K F. Van Kessel arid, sndppedll it in half.
But even Charlie couldn't havem.atched his prac-
tical joke with five earloads of lettuce some years
aglo-
ilE had grown the leltuee on his farm at l
A.]am, osa-7 Colorado, after loading it
into refrigerator cars, discorvered that the
markets NxTere already glutted with lettuce.
'117ho, eutiJd 'use, a carload of lettuce?" he
thought. with
And, running through his mind, he came up w
the names of five friends and forwarded the lettuce
to them, — A47 riting, ahead to let them know.
I One who reC*j%7ed, a car was Patrick H. Hoy, then
manager of the Sherman and Ambassador hotels in
Chicago.
Hay, now., president of Material Service, a divi-
sion of General Dynamics, was sitting at the table
when MacArthur related the incident.
"I still remember . the shock oaf getting a carload
L_
of lettuce',"Hov said,. "But '"Te disposed of it. We used
some in Our hotels and sold the rest."
MacArthur recalled that friends disposed of four
carloads.
"But Clarence Page sent his carload back to me
and darnned if I didn't have to pay the freight both
ways," he said.
lfcakcArthur is frequently confused with Dairy-
man J. ?N . McArthur.
One the night of the last presidential election,
Folin D. MacArthur was asked to comment on televi-
sion about the trends of the returns, which showed
Johnson leading Goldwater.
MacArthur observed that he was sorry 'to see
Gold,\vater losing; that he thought the country need-
ed a change.
The next day he received a letter from a viewer
who informed him that he "would never drink anoth-
er drop of MacArthur dairy milk as long. as I live."
MacArthur doesn't care a hang about what peo-
ple think of him, but he regrets that people continue
to confuse him with "that nice man McArthur who
has the dairy."
MacArthur did not acquire all of his Florida
properties merely to protect loans, he, had m a d e.
good
. g
'because "they . seemed like
Some he acquired �n
deals."' An example is the 32,000 acres in Sarasota
County, for which he paid the Edith Ringling estate
in excess of $2 million. -n Beach County I and
He 0-"Tns 10,000 acres in Pali
over 3,000 acres in Dade County. His latest big acqui-
sition was 10,000 -acre Rocket City, near Orlando.
"I took over Rocket City to protect the loan I
had made to the developers," he said.
The loan was for more than a million dollars.
When a New York newspaper reported that he
had bought Rocket City outright, MacArthur was
quick to write a letter of correction.
"They (the developers) defaulted and I am cur-
rently a debtor in possession," he wrote. "I paid off
several defaulted mortgages. I am in the process of
unscrambling the eggs.'*
He wound up with a first mortgage on the "INTas-
sau Harbor Club through an entirely different route.
"I didn't want the club," he said, running a hand
through his thin hair, "and I still don't rant. it. The
builder,Y William Jess, i-N-.a.s a good friend. He needed
to borrow somethinv, over $1.5 million to pay off em -
tractors" hens --and I signeO a Tiole."
Jess; borrowed, mune-,: frol-r- C"hase Manhattan
Bank,, ycid off .he hens, and soon, thereafter died of
a heart attack.
'lite hank' brought suit against MacArthur to
cullect the loan, ph -,is Inteiest.
I ecT n I q bu
& tfi . ri-ay have 6 U �W`,e;
tg-z3:. _ng te no T
16 J J _ S, Ul "I
�ow In fbe hell co-luijd -7 kncoX thDt s v WO U. c -T' P
Aec. 708'
MacArthur paid, cif., The, -rjc)q:e Zk�j, tio, 1K.
__9r-L9a9c on the Nassau' Ha bar Club. . a fjy�s L
"I didnt mind, paying c.11 t`hle nolte,, but I got sore
as hell when I got a blu:f±'
, 'GTr- 113 -ie blanks- lawyer for.
$32,500 — his fee, for puttinig hj.s, name or
Per's," MacArthur said.
He Pr'01MP-t1Y WrOte tcs. Wilharn , Ogden of the
C -hasp Manhattan Bank arld, expressed his unhappi-
ness oxer the. bili. 1", the letter, ivas a \761eeJ three:`_ t to
take his insurance conripainiess, business- firorn tht- bank
if 'he ha -d to pay the Ia
a, A•yer- s fee.
To, insure action, he . sent a Copy of .fhe letter to
David Rockefeller, chairman of the board.
MacArthur is in the PTOCeSs Of eonsohdatin*g hlc
I'lorida properties under- a single corporation, Royal
American Industries.
Other properties DOt helrelcdore- mentioned, in-
clude Southern Realty and Util
J1Jcs Co.. v-,Ith, acreage
in Dade, Pinellas and Volusia ec��
A _)nticms; Fort Pierce
Port and Terminal Co. at Fort Pierce, Radio Station
.WEAT and Telvision Station 11'EAT-n7 in Palm
Beach Count,3,, Miami Prefabricators and r1orida ANTi-
ation., both in Miami.
Because of his major holdings. he is likely to
a/
forget little items, such as a 35,4 -acre Tr-aet in, Surf-
side NN'Thich he purchased in, 1961 for $811,801, and
Layton's Park Trailer Camp at Riviera Beach.
And, of course, there is the Colonnades, Which he
purchased with nearly 1,0010 feet of oceanfront for
�675,000. He is now spending twice that amount on a
revamping program which includes rebuilding just
about everything except the hotel's familiar Moorish -
styled eclumns.
. In addition to his farm and ranch 'in, Colorado, he
owns a tract at Kodiak Island,, Alaska: the Citizens
Bank and. Trust Co., Park Ridge, IIL s several pieces
of N,-aluabk-- property in Miohiganl- and tie Wilton
Hotel, T .4ong Beach, Calif.
He mens the Grayba-r Building in Neiv York —
t5
or maybe it's the lease on the property. He couldn't
remember which.
cii got the Gra.
ybar Building in. a deal with my
friend, Bill Zeckendorf," he said. "Bill owed me somc,
money and he paid me off..''
The building, located near Grand'Cenfral Station,
stands on one of the most valuablie site's in Manhat-
ta-m
Zeckendorf sent MacArthuia*handsome lVelmar-
aner dog, on '"7hich MacArthur" promptly phrii-)ed the
name Zeckendorf _TI — "because., with 'his long nose,
he looks exactly like Bill."
Ho,",- does "MacArthur manage such a iiJde_o;;vp-rea(J
"I've got one hell of a good, bunch, of Tw_--ople mlork-
ing for me," he replied.
He believes that - 90 per cent of the people you,
deal ,xith arc, honest, Sincere, loyal..
"You've got to trust people,"' he said. "Ilf, you go
around biting on quarters to, see it tbev're lead,
N 7 OU11 wind up with a mouthful, of chipped teceth."
I 1 9LT a major reason. for MacArthur"s in-
redible success is plain drive and lots of
guts. He f inds, it hard to believe that he.
can't do something if he wants to.
A feiv months ago he asked a Fort Lauderdale
engineer ineer if he could raise the rof of a -r- audiiitorjum
at the Colonnades Hotel about 18 inches.
"Imposs-ible," the ei,-igineer rephecI
"The hell it is," MacArthur remarked.
He called his superintendent, Pat WIC-01-sh, who
shaves once fa week.
``Pat, I Nvant that roof raiised,` he ordeir-ed. "'And
t you ma wel�l raise it high
t" -bile y1lou re at i .1 y as
enough for another floor."
"'Hell., 11acArthur, that's goiing- to be a to-,i�igh
x7 Or -e
'Wefl, if it N� ere going- te ai,n be. ecas.jq�,, I'd hav
given. it -t-o a boy to do."
"OK, MacArthur; we'll do Ift."
-k\.n.d the 200,000--poLmd rc�oJ. was raised 'hi.gh
enough to add, a fourt"ha Eloor ID t�-ie three--sbo-ry bu-J-1d-
ing'.
. "'I v7 -ant any te-1.11ing --nae 0 -tat sonne-
da-mri- ifib ean't be done,". _M_,1ac1\_.r1'hur sald, Se--r-lVVI�4ng
-up, hi!s fa-ce as clgaxeed Eiomxake ch-Jifted iro-rn Ns raouth
aad nOs:1rU_,&