POWER, PRIVILEGE AND THE POST The Katharine Graham Story By Carol Felsenthal Putnam. 511 pp. $29.95

AS SEEN through Carol Felsenthal's pitiless lens, two specters haunt this tale of Katharine Graham and The Washington Post: her mother and her husband. In Felsenthal's lively and irreverent narrative, these holy monsters demeaned and intimidated Graham, just as they set goals she ultimately was determined to achieve. She triumphed over them by creating an institution of great wealth and influence. But in doing so she became, in part, what they had been. It is the bittersweet quality of this triumph, the transmutation of a shy, sensitive young woman into a tough corporate executive, that gives poignancy to Felsenthal's account of the rise and rise of The Post.

Felsenthal, whose last book was a biography of Alice Roosevelt Longworth, tells the story not only of a woman, but of a family, a corporation, and the interplay of politics and personality that is the real drama of Washington. The Post is at the center of that drama. Together with its only real competitor for influence, the New York Times, it sets the stage, delineates the players, feeds the lines, and prompts the audience. It has become, for better or worse, an integral part of our system of government.

It was not always so. When Graham's father, Eugene Meyer, a New York millionaire, bought the bankrupt paper in 1933 for $825,000, it was puny and disreputable, the worst of the capital's five dailies. But journalism was only a minor interest for Meyer. Believing that neither his son nor any of his four daughters wanted to run the paper, or was capable of doing so, he found an heir in Katharine Graham's husband, Philip Graham.

An artful charmer from Florida who had courted and impressed a number of powerful older men -- including his Harvard Law professor, that ultimate flatterer of the great, Felix Frankfurter -- Graham had married Katharine in 1940. With his energy, determination, wit and dash, he seemed destined for high places -- maybe even, some thought, the White House. Becoming son-in-law to the rich Eugene Meyer by marrying what Felsenthal describes as his frumpish, insecure daughter seemed to many a step up that ladder. In 1948 Meyer turned over control of The Post to the impatient and ambitious Graham.

This golden boy began the transformation of a sleepy paper into a media empire. In 1950 he started buying radio and TV stations, in 1954 he took over the competing Washington Times-Herald, and in 1961 he managed to acquire -- with the help of Benjamin Bradlee, who received a handsome finder's fee -- Newsweek magazine for a mere $9 million net cost. By the late 1950s the Post was making more than $2 million a year and Time put Phil Graham on its cover.

But Graham was interested less in profit than in influence. If he could not himself be president, he would be a kingmaker. In 1960 he tried to make Lyndon Johnson president, and when Kennedy took the prize, Graham hatched the plan to put Johnson in as his running mate. Johnson himself later said that Graham "told Kennedy to make me Vice President."

Felsenthal tries to convey the apparent seductiveness of Phil Graham, the vitality and charm that presumably dazzled all in his circle. "Phil Graham walked into a room and took it over," she quotes David Halberstam. Not all, however, were so charmed. In the view of William F. Buckley Jr., Graham was a "man profoundly and primarily in love with himself."

He was also a deeply disturbed man, and much of his energy was the manifestation of a worsening manic-depressive psychosis. During these episodes, Felsenthal states, he could be bitterly abusive toward his wife, berating her opinions, her appearance, and her "Jewish blood." In his manic states, he could display a nasty anti-semitism, perhaps stemming from his sense of obligation toward his generous father-in-law.

These outbursts were followed by depressions when, Felsenthal writes, he turned to his wife for solace. In 1957 he had a nervous breakdown and retreated to the family farm in Virginia for a full six months. He embarked upon a course of treatment with a Washington psychiatrist, but the deadly cycle continued unabated.

Katharine Graham, according to Felsenthal, had come to her marriage with a low sense of self-esteem induced in large part by her mother, the formidable Agnes E. Meyer. A woman of liberal instincts, imperial demeanor and strong opinions on every subject, Agnes Meyer cultivated friendships with prominent men such as Auguste Rodin, Thomas Mann, John Dewey and Adlai Stevenson. In the words of her daughter, she was a "sort of Viking, very bright, and utterly contemptuous of everyone else."

It was not easy to please such a mother, and Katharine Graham, according to Felsenthal, once told a friend that she felt like an orphan growing up. When she graduated from the University of Chicago in 1938 neither parent showed up for the ceremonies, although her mother's secretary sent a congratulatory note with her first name misspelled.

In her marriage, Felsenthal quotes her as saying, "I was a second-class citizen and my role was to keep Phil happy." But this was not possible. In one of his manic states this seriously disturbed man embarked on an affair with a young journalist, buying her a house in Washington, and even declaring that he would turn over the paper to her. His self-destructive course became public at a spring 1963 newspaper convention where he denounced the assembled owners and editors and began disrobing. With the exception of a small Texas news service, no one printed a word about the episode. Then, on Aug. 3, 1963, on leave from the sanitorium he had entered six weeks earlier, Phil Graham put a shotgun to his head and pulled the trigger.

His wife inherited 55 percent of the voting control of an enterprise about which she knew almost nothing. At the age of 46 she was, in the words of the paper's future managing editor, Howard Simons, like "a shaky little doe coming on wobbly legs out of the forest." Everyone expected her either to sell the paper or let the managers run it until her oldest son, Donald, was ready to take over.

Instead she hung on, seeking the counsel of men such as Robert McNamara and Warren Buffett, to whose self-assurance she was attracted, and gradually established control over the corporation. Felsenthal takes her to task for being too concerned with the mighty, citing examples of seemingly obsequious behavior toward presidents and moguls. "Kay was probably not a woman of enough backbone and confidence to resist the entreaties of new and powerful friends," she writes, "not because, like Phil, she wanted to manipulate world events, but because she so longed to please." What kept her from falling into this trap, the author concludes, was Ben Bradlee. "Hiring him and giving him carte blanche were the two best decisions of her career."

Felsenthal rightly relates, as examples of Graham's bravery, her support for the Watergate investigation at a time when The Post stood alone, and more important, the decision to publish the Pentagon Papers despite a court injunction and Nixon administration threats to the financial viability of the paper. She also recounts some less inspiring stories, such as Graham's die-hard support of the Vietnam War until late 1968, her breaking of the pressmen's union, her seeming cruelty toward employees deemed no longer useful, and her successful effort to secure the suppression and recall from bookstores of an unflattering and apparently inaccurate 1979 biography entitled Katharine the Great.

This book, too, is unlikely to please its subject, both for its irreverent treatment of her family and its portrayal of inside machinations at The Post. Yet Felsenthal gives credit where it is due, and paints a persuasive portrait of a gutsy woman who "turned what at Phil's death was a small and somewhat parochial family business into a behemoth."

She may have been too impressed by the company of the mighty, too attracted to men of flash and drive, and too "haunted by the fear of not doing the job right." But that was a fear instilled by the two demons of her life. As Felsenthal shows in this compelling portrait, by confronting those demons she created something bigger than either of them could have done. Ronald Steel is the author of "Walter Lippmann and the American Century."