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John D. MacArthur It's Never to Late to be a Billionaire (Palm Beach Profile):cl Palm Beach Profile John D PodC/'\rthur It's Never too Late jim'.) be a Billionaire John D. MacArthur was little known during his lifetime, but when he died he was reported to be the second -to - last American billionaire. He owned the Bankers Life and Casualty Com- pany, a bona fide giant among insurance companies, as well as banks, oil wells, television and radio stations, restaurants, half a dozen other insurance companies, and real estate, much of it here in south Florida. MacArthur had substantial pieces of Chicago, New York, and other American cities, and he owned far more of Florida than anyone else when land here was booming. Real estate was the largest part of his holdings, and the development of those Florida holdings is overseen by the Bankers Land Company. The insurance com- pany was the money machine with which MacArthur actually made his fortunes. John D. MacArthur was a self- made billionaire. He was the youngest son of a fundamentalist preacher who enforced a life of poverty and disci- pline on his family. Four sons fled the household as soon as they were old enough, and all set about becom- ing over -achievers in Chicago. Alfred, the eldest, soon became a prominent insurance executive. Telfer went to work for a chain of suburban newspapers when he was 20, and owned the chain by the time he was 25. Charles became a journalist and later a screenwriter and playwright. He and Ben Hecht collaborated on The Front Page. John was the last, and by all accounts, the least promising. At 17, he was an irascible youth, driven, but with no apparent direction. He was set loose on the streets to sell insurance for his brother Alfred, and on raw instinct, John promptly outsold any three salesmen. But he clashed 10 As one of America's last billionaires, John D. MacArthur was little known during his lifetime. repeatedly with his brother. John tried newspaper work for a while, but had little aptitude for it. In World War I, he deserted both the U.S. Navy and the Royal Air Force, and was caught trying to stow away aboard a troopship in New York Harbor.. After the war, MacArthur returned to Chicago and dedicated himself to hard work. He sold insurance again, while failing at running a gas station and a bakery. In 1919, he married Louise Ingalls, a socialite who bore him two children. But work drew him away from his family, and he even- tually got a divorce. Shortly after, he married Catherine Hyland who, in her own way, was just as driven to success as John. Just before the Great Depression, MacArthur bought his first insurance company, Marquette Life, which was small and sinking, but cheap at $7,500. During the Depression, he borrowed $2,500 and bought Bankers Life and Casualty out of outright bankruptcy. Bankers was a box of papers that he carried with him in the back seat of his car. John was the entire sales force, and Catherine the office staff. They worked 20 hours a day just trying to keep their two companies existing through the worst of times. John's success story, when it happened, was swift and simple. He please turn to page 14 'CJ PALM BEACH PROFILE L continued from page 10 chanced on mail order insurance, which wasn't a new idea and wasn't his invention, but it was a thing of the moment. He sent out a blunt, four-page letter, printed on newsprint, and offered the most basic term insurance from Bankers—policies of $500 or $1,000—or whatever people could afford, for the change in their pockets. It was insurance for poor people, which was something new, and just then nearly everyone was poor, even John. The return envelopes came back by the tens of thousands with the pocket money of the Depression poor. Over a five year period, MacArthur made Bankers into a real insurance company, expanding nationwide, and raising up sales forces. And people still bought insurance. MacArthur always had the figures to show that his customers were buying good coverage. In fact, they were getting back more in claim settlements than they would have from most other insurance companies. The figures can still be seen in yellowed and brittle reports filed each year with the Illinois Department of Insurance. They show that for all of John D. MacArthur 's innovative marketing, he never trifled with the trust of his policyholders. With that kind of reputation, Bankers Life grew. Now and again, MacArthur would purchase other companies, paying very little, and always getting a good return on his investment, with no board of directors and no stockholders to interfere with anything. He kept Bankers economical to a degree that Scrooge would admire. The company headquarters in Chicago sprawled around Lawrence and Elston Avenues, eventually spreading into nearby supermarkets, a bowling alley, a bank, a funeral home, stores, houses, garages, and apartment buildings. During the early 1960s, Bankers grew into an empire, yielding more and more millions for MacArthur. At that point he was estimated to be worth half -a -billion dollars. It remained for the man to become a billionaire in his retirement years— those years spent here in south Florida. His real-estate career in this state began when he foreclosed on a loan, The JDM country club, formerly home of the PGA, was a pet MacArthur project completed in 1965. and a piece of prime property dropped into his lap. MacArthur had waited until then to make himself a legend in his own time. Before, he had been a series of enterprises, not a personality. He did not feign shyness, but worked better without exposure. When he was 60, John D. MacArthur seemed to have a public coming- out. He made an appearance every day, played his part for the public, and thoroughly enjoyed it. Reporters often called him "rumpled looking" which was more than kind. He was gravel -voiced, tobacco -stained, but colorful, as he made his daily appear- ances in the coffee shop of the Colonnades Hotel in Palm Beach Shores. He made his billions by outdeal i ng every competitor in the vast entrepreneurial world of Florida real estate. It was at the Colonnades Hotel that he lived with his wife Catherine, and a various assortment of dogs, including two poodles and a retriever named Zeck. He ran his empire from the back table in the coffee shop, drinking pot after pot of black coffee, and chain smoking Winstons. His clothes were far from elegant, and he often was mistaken for a janitor. But he continued from his coffee - shop office, making deals, talking, working, observing. Often called "eccentric," or "a maverick," he made his billions as a loner who took risks and I ived for 80 years. MacArthur needed most of his 80 years to become a true bi I I ionai re. He still wasn't even close to that sum when he was in his early 70's. In fact, he hadn't even made his first million until he was 45 years old. Being foresighted, he set up the MacArthur Foundation, shortly before his death in 1978, deliberately leaving no instructions on the disbursement of funds. Locally, the foundation has done much work, donating substantial properties to form the John D. MacArthur State Park on land formerly known as "Air Force Beach" And so, in a sense, MacArthur's work still continues, through the foundation, and The Bankers Land Company. "I'm not rich," MacArthur often said. "I just happen to work for companies that are rich as hell. And ... I happen to own the com- pan ies"