A historical overview of family firms in the United States

How do dynastic families adopt to social and economic forces restricting attempts to transmit family wealth from one gener-ation to the next? Writing in the 1850s, the physician and novelist Oliver Wendell Holmes summed up the problems faced by Americans who hoped to pass their firms and fortunes intact to their children and grandchildren: "It is in the nature of large fortunes to diminish rapidly, when subdivided and distributed. A million is the unit of wealth, now and here in America. It splits into four handsome properties; each of these into four good inher-itances; these, again, into scanty competences for four ancient maidens,-with whom it is best that the family should die out, unless it can begin again as its great-grandfather did. Now a million is a kind of golden cheese, which represents in a compendious form the summer's growth of a fat meadow of craft or commerce; and as this kind of meadow rarely bears more than one crop, it is pretty certain that sons and grandsons will not get another golden cheese out of it, whether they milk the same cows or turn in new ones. In other words, the millioncracy, considered in a large way, is not at all an affair of persons and families, but a perpetual fact of money with a variable human element " (Holmes, 1961 [1860], pp. 15-16). Holmes knew what he was talking about, for he was heir to two venerable family dynasties. His mother's family, the Wendells of Ports-mouth, New Hampshire, had reaped the "fat meadow of craft and com-merce " of the eighteenth-century West Indies trade. His father's family belonged to New England Brahmin caste of clergymen and scholars. Combining these two dynastic strands in a secular and industrial age, Holmes practiced medicine, taught at Harvard, and wrote for his own amusement. As a healer, he ministered to the bodies and minds of Boston's elite, who were struggling to run, pass on, and inherit family firms and fortunes. He distilled their experiences and distinctive outloo