In 1918 McElroy, a former engineer on the Pennsylvania Railroad, formed a company with partner Kenneth S. Fitzpatrick. Fitzpatrick-McElroy started out as a booking agency for chorus girls and singers in small theatres, eventually expanding into a 32 theatre operation in Illinois, northern Indiana, and Michigan. Twelve years later, the 51-year-old Chicago-based theatre magnate was reputedly worth $6 million and (rebounding from a divorce) set to marry a 25 year old.
On January 10, 1930, while his business partner was out of town, McElroy instructed his chauffeur to drive him to the vacant house of a friend. The driver stayed outside in the car, but left after a five-hour wait, figuring that his employer had fallen asleep. Some time later, a 10-year-old boy shoveling snow discovered the front door of the house open and notified the janitor. McElroy, dead from a self-inflicted gunshot wound to the head, was found in the living room partially lying under a phonograph. A note addressed to the dead man's business partner "Fitz" found stuck inside McElroy's hatband read: "Take insurance and pay Blue Lagoon and Tebbe. They have been too good to us to pass them by. Good-by." Letters in McElroy's pockets revealed that he owed more than $91,000, although a coroner's jury later concluded that loneliness, not financial worries, prompted the seemingly wealthy businessman to kill himself.