2012-06-12

Stock Holder Chapter 2


John Donald MacArthur owns Bankers Life & Casualty Company of Chicago, the second largest stock accident and health insurance company in the world. He owns Bankers outright—lock, stock and barrel. He is the stockholder. The sales force of Bankers numbers thirty-five hundred, and in 1967 the company had admitted assets of more than $350,000,000. If shares of Bankers Life were offered on the open market they would bring more than $1,000,000,000.
John MacArthur also owns—outright—Bankers Multiple Line Insurance Company ; Certified Life In-surance Company of California ; Constitution Life Insurance Company ; Marquette Life Insurance Company; International Life Insurance Company ; Protection Mutual Insurance Company of Pennsylvania ; Southeastern Title and Insurance Company; Gotham Life Insurance Company of New York; Union Bankers Insurance Company; Western American Life Insurance Company; and Western Life Assurance Company of Hamilton, Ontario.
The insurance companies John MacArthur owns have assets of more than $500,000,000, and a value on the open market in excess of $1,500,000,000. Had he not merged Westminster Life Insurance Company, Northern Mutual Casualty Company, State Life Insurance Company of Tennessee, State Life Insurance Company of Kentucky and Hotel Men's Mutual Benefit Association with other firms, his list of owned insurance companies would be even more impressive. Yet for this fantastically wealthy man, insurance has become little more than a sideline.
John MacArthur built, and he owns, the town of Palm Beach Gardens, Florida. Palm Beach Gardens is the home of the Professional Golfers Association and the huge RCA computer-building plant. MacArthur owns the PGA golf courses and clubhouse and, of course, a large block of RCA stock.
John MacArthur is the largest landowner in Florida. His holdings include eighty percent of the real property in Lake Park, which is the fastest growing section of sprawling Palm Beach County. He owns 32,000 acres in Sarasota County, 10,000 acres in Palm Beach County, 10,000 acres in Orlando, 3,000 acres in Dade County and 354 acres in Surfside. He also owns the Colonnades Beach Hotel in Palm Beach Shores, with 1,000 feet of oceanfront; a portion of the Sunshine State Parkway, a toll road ; the Nassau Harbor Club, Palm Beach Development Company, Layton's Park Trailer Camp, Southern Realties and Utilities Company, Fort Pierce Port and Terminal Company, Miami Prefabricators, Florida Aviation, MacArthur Television Productions, radio station WEAT and television station WEAT-TV.
John MacArthur's holdings outside Florida in-clude Citizens Bank and Trust Company of Park Ridge, Illinois ; the Wilton Hotel in Long Beach, California, and a dozen other hotels ; Brookshore Printing Company in Chicago; Mailers, Inc., in
Chicago ; Marshall John Advertising Agency in Chi-
cago ; and Red Top Brewing Company in Cincinnati.
John MacArthur has extensive farm and ranch lands in Illinois, Arizona, Georgia, Colorado and Michigan. He has a salvage operation in Alaska, a record company in New York, oil wells in New Mexico, resort land in Wisconsin, real property in West Germany and Argentina. He owns a chain of restaurants and a fleet of airplanes.
And he acquired it all on his own. Nothing was given to him, he didn't inherit a dime. He was born March 6, 1897, in Pittston, Pennsylvania, the seventh and last child of a dead-broke evangelist. At age seventy-two, his health, except for ulcers, was as robust as his bank account.
He lives in the hotel he owns, the Colonnades, next to the town he owns, Palm Beach Gardens, and each morning he rises at five and goes to the coffee shop in his hotel and holds court for a bewildering assortment of guests.
Congressmen, senators, governors, even presiden-tial candidates journey to the Colonnades to make their pitch for money. They invariably come away empty-handed. "I'm broke," John MacArthur tells them. "Everything I have is tied up in the corpora-tions. And I believe it's against your laws for a corporation to donate money."
John MacArthur has an especial dislike for any-thing connected with government. He has been in-vestigated innumerable times by state insurance de-partments, contends that his success has led to persecution. "They see all that money and figure I've got to be crooked," he says bitterly. Then he smiles, his eyes twinkle, and he says, "Of course they're right."
But John MacArthur's difficulties with the government haven't been limited to state insurance de-partment investigations. He has survived—and prospered—despite legal attacks from the Justice Department, the United States Post Office, the Federal Trade Commission, the Internal Revenue Service and the Interstate Commerce Commission.
Land developers, wheeler-dealer promotion men, fast-buck artists, ex-convicts, the unemployed and destitute, all come to the Colonnades, all are listened to. John MacArthur is available to everybody, but except for rare instances does business only when he can turn a profit—a huge one. The reason people continue to come to the Colonnades is the absolute simplicity involved in getting huge sums of money. There's no red tape : no co-signers are required, no board of directors studies the merits of the loan. Fifty million dollars, a hundred million, more—it's there for the taking if John MacArthur says "okay."
John MacArthur is an enigma to the leaders of charity drives. They can't believe that a man of his age and wealth isn't concerned with preserving his name in concrete and marble. Evangelist Billy Graham, in a plea for $25,000,000, wrote, "I have followed your Christian career for many years and am certain that God has had much to do with your good fortune. You might be interested to know that I learned a great deal about the Lord from your father, a great minister at whose feet I used to sit and who was largely responsible for my vocation."
"Baloney," John MacArthur said. "My father died thirty-five years ago. He was eighty-eight years old then, hadn't preached in public for at least ten years before that."
One of John MacArthur's closest associates believes his attitude toward charitable contributions is a healthy one : "Especially where Billy Graham is concerned. Hell, he once offered Mickey Cohen twenty thousand dollars to get up on the podium and say he'd been saved."
A check of Los Angeles court records does indeed indicate that the famed evangelist and the diminutive West Coast mobster were strangely chummy. Graham testified to a Grand Jury that he had lent Mickey Cohen ten thousand dollars. Actually, Cohen was rolling in money ; but he couldn't spend it without arousing suspicion. In order to finance his high living, he had to be able to explain to Internal Revenue Service where the money came from. Checks signed by people like Billy Graham, and marked "loan," proved to be an excellent dodge. Cohen paid cash for the checks from his hidden assets, told IRS he managed to survive only because of the generosity of friends.
In any event, John MacArthur wasn't moved off his wallet by Billy Graham's suggestion that he donate money in exchange for a building being named after him. In fact, John MacArthur has never been accused of a philanthropic bent. He agrees : "Charity is for three types. Those who believe in God, those who want to be remembered when they're gone, and those who want to impress somebody. I'm an atheist, I hope people forget me, and if I want to impress anyone I'll paste the annual statement on the wall."
Nor does he try to impress anyone. "I have more enemies per square foot than any man around," hesays, though he professes ignorance of the reasons why. He professes no similar ignorance when asked how a poor minister's son became a billionaire:
"Hard work, luck and opportunism in that order. I've also got one hell of a good bunch of people working for me. Ninety percent of the people you deal with are honest and loyal. You've got to trust people. If you go around biting on quarters to see if they're lead, you'll wind up with a mouthful of chipped teeth."
What drives a man to accumulate a billion dollars? John MacArthur was asked.
"I had to show somebody," he replied.
The people who work for John MacArthur, especially his insurance agents, have an enormous personal loyalty to him. As additional millions roll in, they take vicarious pleasure in his success, knowing the way he started—ill-educated, penniless, peddling insurance door-to-door. Legends of his selling prowess are related in reverent tones by old-timers who were with him in the lean days. "John was a super salesman," they say. "He could sell reading glasses to a blind man."
John MacArthur's employees call him "The Skipper," think of him as kind, benevolent, interested in their personal problems. They sell insurance with the same zeal and for the same reasons a football team wins one for the retiring coach. To meet John MacArthur, to shake his hand, is, for his employees, to be greeted by the gods.
The Saturday Evening Post called John Mac-Arthur "shrewd and witty . . . a sort of Hildy Johnson . . . sentimental."
Look praised him for hiring the handicapped. Collier's said he was "public-spirited."
Fortune found him "refreshingly honest."
The Miami Herald lauded his "drive, guts, belief in self."
The American Museum of Natural History hon-ored him for public service.
Eleanor Roosevelt and President Eisenhower called a MacArthur company (Bankers Life) "Tops."
The governor of Minnesota, the Miami police de-partment, the F.B.I., the Department of Labor, a United Nations committee, all have commended him.
The United States government recognized him as a hero during World War I.
The Horatio Alger Award was given him.
John MacArthur's Number One fan is newscaster Paul Harvey. Harvey waxes ecstatic at the drop of MacArthur's name. For Harvey, John MacArthur epitomizes all that's right about this country. On numerous occasions he has interrupted his broad-casts to say just that.
Even Las Vegas' bashful billionaire, Howard Hughes, has grudgingly admitted that John Mac-Arthur is the toughest man he knows to get the best of in a business deal. In September, 1967, R & H Holding Company, owned by John MacArthur and headed by Maurice Friedman, had title to the Frontier Hotel property in Las Vegas. When Friedman got the axe from gaming authorities, John MacArthur entered into negotiations with Howard Hughes for the sale of the land. It was property Hughes dearly desired and it was relatively useless to MacArthur. Nevertheless, it was given a liberal
market value of $11,203,324. Hughes paid $14,000,-
000 for it. Incidentally, Maurice Friedman, Mac-
Arthur's man in Las Vegas, was recently sentenced to six years in prison and fined $100,000 for masterminding the Friar's Club gin rummy cheating case. Las Vegas publisher Hank Greenspun, shoe manu-facturer Harry Karl, real estate tycoon Richard Corenson, singer Tony Martin and comedians Phil Silvers and Zeppo Marx were among those bilked out of more than $450,000 in the rigged card game.
Still, the name John MacArthur is hardly a household word. He stays in the background, makes certain that what is printed is bland and easily for-gettable, largely the product of public relations experts. Ask a hundred people who John MacArthur is and chances are you'll draw a hundred blank stares. John MacArthur doesn't want fame or recog-nition because—some people say—the rags-to-riches story of the poor boy turned billionaire is not, despite the Award, a Horatio Alger story.
"This is a man," one MacArthur observer said, "so personally corrupt that he brazens out deals and screws people in ways that others on his level never do."
Perhaps. But if that's true, there are reasons.

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