Sharing the Wealth: How Katharine Graham's Father Handled the Washington Post Legacy
Excerpts from The Inheritor's Handbook: A Definitive Guide for Beneficiaries
If you're an adult with living parents, sooner or later you'll face
the inevitable day when your parents die, and you must cope with their
estate. Today's tax laws, notes Warren, New Jersey, tax lawyer Gordon Millspaugh,
all but guarantee that "unless there's appropriate planning, the worst-case situation will happen: The government will take more than 50 percent
of your estate, if you're wealthy." So addressing estate-planning issues
is a critical matter.
If you take the proper steps early -- say by boning up on estate issues,
urging your living parents to write a will, and helping them to draft it
-- you'll play a role in these decisions, save tax dollars, and experience
the rewarding feeling of exercising control over your destiny. But if you
and your parents shut your eyes to the inevitability of death, these critical
decisions will most likely be made for you by strangers while you stand
The Washington Post Story
Before approaching your parents, you need to appreciate not only what they want, but also what your siblings want. Most psychologists, estate lawyers, and financial planners point out that siblings really want fairness -- not necessarily equal treatment -- from their parents. If, say, one child is running the family business while the others show no interest in the enterprise, it's unfair to ask the parents to split the business
equally among all their children. Eugene Meyer's transfer of the Washington
Post in 1948 is a case in point.
Meyer was a 58-year-old financier with five children when he bought
the Post at a bankruptcy auction in 1933. Among his children, only his
daughter Katharine, then 16, showed interest in the paper. She subsequently
worked there sporadically and often advised her father. But since she was
a woman, she wasn't seriously considered as his successor. Her husband,
Philip Graham, became the Post's associate publisher in 1946. The following
year, the Meyers gave Philip and Katharine a gift of 350 of their 5,000
Class A shares -- the company's only voting shares.
And in mid 1948 Eugene Meyer, then 73, decided to pass control of the
Post on to the Grahams. To effect this transfer, Meyer and his wife Agnes
gave the Grahams a $75,000 gift to help them buy 4,650 more Class A shares
at $48 per share to bring the Grahams' total stake to 100 percent of the
company's 5,000 voting shares. Two years later, the Meyers gave the rest
of their Post shares to the family foundation, assuring that the family
-- specifically the Grahams -- would remain in control.
This wasn't as much of a windfall for the Grahams as it might seem,
since at that point the Post was losing money and its survival depended
largely on the Grahams' own efforts. Nevertheless, such a gift to one child
could have created huge resentments among Katharine Graham's four siblings.
So in order to preserve a sense of fairness, Meyer gave an equal amount
of money to each of Katharine's siblings at that time.
"There were a few tense moments when my father told them about the arrangements,"
Katharine wrote in her 1997 memoir, Personal History, "but nothing like
the difficulties that were to develop in other newspaper families." Katharine's
brother Bill decided at this point to pursue a medical career, and was
subsequently given the opportunity to invest in the Post.
Katharine's three sisters responded very differently to identical treatment.
"Flo, who was already estranged from the family, was, with some difficulty,
reassured by my father that she and her children were being fairly dealt
with. Bis and Ruth, who had every right to feel unevenly treated, have
remained generous, loyal, loving, and supportive in every way. They were
left secure but not affluent compared with my brother and myself. They
were never given the opportunity to buy Post stock, largely because it
was worth very little in the beginning and was regarded as risky." In effect,
Eugene Meyer's gift of the deficit-plagued Washington Post to his daughter
Katharine was a gift bearing dubious value and tremendous risk at the time
it was made. It became valuable because Katharine and her husband made
it valuable -- and her siblings, for the most part, subsequently acknowledged
Author Dan Rottenberg has written seven books, including Finding
Our Fathers and Revolution on Wall Street, and also writes for
major magazines. He has been a columnist for the Philadelphia Inquirer
The Inheritor's Handbook: A Definitive Guide for Beneficiaries
Copyright 1999 by Dan Rottenberg
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