With its offices strategically over-looking the corner of Wall and Broad Streets in the heart of the New York financial district, the Morgan Guaranty Trust Co., it has been said, occupies "the precise center, geographical as well as metaphorical, of financial America and even of the financial world."

The unique nature in the competitive world of banking of Morgan, the fifth largest U.S. bank with assets of $31.7 billion at the end of last year, extends beyong mere size to its carefully cultivated image for pin-stripe banking know-how and a certain style.

"Expertise is expertized by the name Morgan Guaranty," noted one Wall Street banking analyst, "and it's very important thay they are able to keep that image and reputation alive."

On an average business day, the staggering total of $20 billion in transactions flows through Morgan.

These are likely to be an oil company's sales on behalf of a corporation or a central bank, a large project loan to a multinational corporation, or the purchase of Treasury bills for one of its correspondent banks.

The transactions certainly will not include auto loan repayments, borrowing for home improvements, or overdraft advances on a customer's bank card - the retail business that most of its large New York City competitors scramble after but Morgan abjuries.

For Morgan is almost exclusively known as a wholesale bank. "the pre-eminent wholesale bank," as Merrill Lynch, Pierce, Fenner & Smith banking analyst Eric Durant noted recently.

It is possible for an individual to get a checking account with Morgan, an extra service the bank provides to about 14,000 well-heeled customers at its five New York City offices. But on Jan. 1, the bank announced it was raising the minimum interest-free deposit required of its individual customers from $2,000 to $5,000.

Besides its banking business, Morgan also runs the country's largest and most influential bank trust department, with $24.2 billion in pension and individual trust assets under management as of the end of 1977.

On a typical day, Morgan can account for one-third of the total purchases or sales of a well-known stock such as Schlumberger or Tenneco on the floor of the New York Stock Exchange, which is directly across the street from the bank's headquarters.

The size of Morgan's trust department has raised concerns both about its excessive market power and what is feared is its indequate ability to maneuver - charges the bank vigorously refutes.

The concentration of its holdings in many companies and its ability to vote these shares also has drawn considerable fire from critics in Congress and elsewhere who see Morgan as sitting at the hub of a massive and conspiratorial interlock between this country's largest banks and corporations - another charge the bank denies.

The independence of Morgan's trust department from the rest of the bank currently is being put to an unusual test in the proxy battle Curtiss-Wright Corp. is waging for control of Kennecott Copper Corp.

Morgan's new chairman, Walter Page, sits on the board of Kennecott, one of only two outside corporate directorships he holds.

By his own admission, he has played an active role in shaping the company's internal strategy since he joined the board in 1961. Morgan also is one of Kennecott's major lenders, with a $55 million participation in a $450 million bank credit the copper company recently negotiated.

The trust department, meanwhile, holds and can vote nearly 1 million shares of Kennecott, about 2 percent of what is outstanding, a chunk that could prove decivise in a closely fought proxy war.

But altough the issue may come down to a simple vote of confidence or no confidence in the capability of Kennecott's present managment and board, including Page, or in the alternate slate of directors offered by Curtiss-Wright, the bank insists that the trust department will make its own independent decision.

"I think we're perfectly clear." Page said in an interview. "The trust and investment division has the sole responsibility to do the best it can for the beneficiaries of that stock," he added, noting he has removed himseld entirely from the decision.

Morgan, though it frequently may find itself on the spot, as in the Kennecott situation, rarely finds boots, Morgan emerged largely unscathed.

The lack of new domestic loan business for the big money-center banks during the current economic rebound also has not put much fo a crimp in Morgan's earnings. The bank continues to do a booming business abroad and, through its role as a major financial intermediary in the foreigh exchange and domestic maney markets, both collects fees on the volume of transactions and profits for its own account through astute trading.

"The nut of their operation is money arbitrage, finding a niche between buyers and seller and taking a position," noted one analyst who follows the bank. "They buy and sell money, and if people want loans, fine."

He noted that Morgan's domestic commercial and industrial loan portfolio onlu totaled $3.3 billion at the end of last year, just over 10 percent of the bank's total assets.

They get a lot of their money just [WORD ILLEGIBLE] the money markets because they're very good at it," he added, many companies tend to call [WORD ILLEGIBLE] first. It's a cumulative effect of the first call which gives Morgan a [WORD ILLEGIBLE] and lets them profits in the market."

Another Wall Street analyst noted Morgan's ability to "raise any funds, at any size, at the most favorable rate, anywhere in the world, anytime they want. And in times of adversity, people tend to put money in the strongest banks, and Morgan would top any list."

Morgan has carefully tended to its reputation for security by keeping its capitalization very high. Shareholder equity was 5.23 percent of tatal assets in 1977, by far the highest level of any of this country's 15 biggest banks.

Because of Morgan's desirability as a secure deposit haven, as single-institution Switzerland, Morgan as of the end of March had $6 billion in deposit funds that it was forced to redeposit with other financial institutions, because it could not put them to immediate use.

We want to keep a presence in the market and continue to keep the suppliers of dollars coming to us," said Page. "And that's why we do all of this redepositing. It's a sort of an anchor to [WORD ILLEGIBLE] - really a service to the people we have contacts with in taking in their money. Of course, you don't have to take it all the time, but you don't continually say 'I'm sorry,' or quote them a low interest rate, or they don't come back to you.

Page said some of these customers include members of the Organization of Petroleum Exporting Countries, the major international corporations, the oil companies, and "central banks all over the world."

"We like to keep a close relationship with them, so we buy more money than we can use," he noted.

In its recently released first-quarter earnings report, J. P. Morgan & Co., the parent holding company for the bank, reported a 20.3 percent increase in operating profits to $59.6 million over the same quarter last year.

Pretax interest income, or the spread between the price Morgan pays for money and the revenues it gets when it puts the funds to work in loans and investments, rose only 1 percent to $131.8 million. But noninterest income, which includes everything from profits on its trading account, fees for its trust services, foreigh exchange trading income, and other feed and commissions, rose 45 percnet to $71.1 million.

Page warned at the recent annual meeting that the high level of earnig s fro foreigh exchange anf other market activity could not be reliably predicted to continue.

For all of 1977, Morgan earned $216.3 million, a gain of 7.7 percent over the previous year. Foreigh income represented 54 percent of the total, up slightly from the precious year, but below the 1975 high og 60 percent. However, foreign deposits last year grew 15 percent to $12.1 billion, exceeding domestic deposits by nearly $3 billion.And, for the first time, foreign loans exceeded domestic loans.

Because of the pressure on interest rate spreads here and abroad, Morgan's entire earnings gain last year was attributed to reduced tax rates, accomplished through increased purchase of tax-free municipal securities.

Taxable equivalent yields Morgan was earning on its $187 million portfolio of New York Municipal Assistance Corp. securities, for example, was a mouth-watering 17 percent to 18 percent. Pretax earnings last year were actually $15.9 million lower than in 1976, but applicable income taxes were $31.5 million below those the year before.

Morgan last year earned 72 cents on each hundred dollars of assets it held at the end of 1977, according to a Standard & poor's tabulatin. This is the highest return of any of the big money-center banks. It compares with a 54-cent return for Citicorp, its nearest New York competitor, 51 cents for BankAmerica, and 60 cents for Chicago's Continental Illinois Bank.

Not that Morgan hasn't made its share of mistakes. Morgan was the lead bank for W.T. Grant & Co. when it went bankrupt. And observers say the bank had a special resposibility in the matter because a top Morgan executives eas a long-time member of the Grant board through its period of increasing difficulty and up to the time of its bankruptcy filling.

Morgan, with an exposure of $97 million in loans in loans to Grant, took a $50 million write-off on the loan than they had on all other loans up to that point," one analysts observed.

Morgan also was one of the banks that jumped aggressively into real estate lending, finding itself owning a large number of foreclosed properties when the marker collapsed.

However, compared to most other banks, the total levels of Morgan's had loan write-offs have been small.

"They came through one of the worst recessions in 40 years with no perceptible damage to their loan portfolio or their earnings," one Wall Street banking analysts commented.

The Morgan Guaranty Trust Co. is the product of a 1959 merger between the Guaranty Trust Co., and old-line New York bank which provided most of the trust business, and J.P. Morgan & Co., until 1940 the private bank of America's best-known and, to some, most infamous, financier, J. Pierpint Morgan Sr., and his descendants.

J. Pierpont, who died in 1913, was one of the prime targets of the turn-of-the-century trust busters because of his efforts to reduce competition.

Morgan, an undisputed financial genius, both was accused of causing the money panic of 1895 when he battled W.H. Harriman for control of the Northern Pacific Railroad, and credited in 1907 with stopping a more serous financial run when trust-busting President Teddy Roosevelt himself turned to Morgan for assistance.

Morgan advised the U.S. Treasury to deposit funds in banks (this was before the creation of the Federal Reserve system) to ease the panic. He also was credited with single-handedly raising a huge sum on Wall Street within a few minutes time to provide loans to disptressed businesses that were on the verge of collapse.

On his death, control of the bank passed to his son J.P. Morgan, ans his partners. THe bank went public in 1940 when Charles Steele, a partner who then held the largest share in the bank, 36 percent, died, and the action was taken for estate purposes.

Page, 62, who succeeded to the chairmanship in January after serving as president of the bank since 1971, retains ties to the original Morgan family through his marriage to J.P. Morgan's granddaughter, Jane.

The avuncular Page, a life-long employe of the bank, also has the blue-blood pedigree that is associated with the bank's management. His grandfather and namesake was U.S. ambassador to the Court of St. James.

TO outsiders, the change at the top was almost imperceptible because of Morgan's practice fo management through a committee of officers. This allows for continuity and for the grooming of future heads of the bank. And it divides the sometimes onerous entertaining responsibility the bank's top executives are obligated to maintain in order to keep personal ties with Morgan's blue-chip roster of customers.

Lewis Preston, 51, became president in January and also is on the committee.Another life-long Morgan employe, Preston is the heir apparent to succeed Page when he reaches retirement age un 1980.

Under Page and Preston, the bank is unlikely to make any change in direction, continuing to turn away from retail banking and its high overhead costs, and even declining to expand its customer base to the second-tier companies because of the step-down in creditworthiness that can be associated with such a move.

Are there any clouds on Morgan's horizon?

"A banker's role is to worry all the time," Page said. He indicated that one of his chied concersn is the large volume and "terrific velocity to the money" that goes through the world banking system, largely through electronic transfers.

Preston expressed concern that continued weakness in the dollar could trigger a series of capital controls by world governments. He dismissed concerns about bank lending to foreign countries, saying it was "foolish to agregate the problem." He did note a worrisome situation with regard to Peru, which is on the verge of defaulting on some loans, and the struggle Zaire is having keeping up with its debt service payments.

"But as far as a generalized default is concerned, to assume that it's a disease that will spread from country to country underestimates the importance of private credit to these countries," Preston said.

Overseas, Morgan has a significant presence in Europe, is looking to increase its already ample activity in Asia (it will be opening a new office this year in Seoul), but feeld frustrated in being shut out of Brazil because of that government's closed-door policy to foreign branches. Morgan would like to buy an equity interest in one of the existing Brazillian banks.

Morgan also has come under fire for its continung policy of lending to the government of South Africa and to corporations doing business in that country.

Despite an ambigous position he took at the annual meeting on the question of whether Morgan has put into effect a de facto moratorium on South African loans, Page said in an interview that Morgan "should be free to make loans to the South African government or its entities if we feel that this contributes to a peaceful solution to the terrible problems there . . . . We are not just going to cut off loans to South Africa."

Meanwhile, Morgan has a special and enviable banking relationship with the kingdom of Saudi Arabia, perhaps unique among the world's banks.

"I think this grew out of the close relationship we've had with them for years," Page said. "The old Guaranty Trust Co. was the original bank for Abdul Aziz At the time, it was also the bank for Aramco (the Arabian-American Oil Co.) when Aramco began its work in Saudi Arabia.

"I thick hardly a day goes by when there isn't somebody from Morgan Guaranty in Saudi Arabia, though we have no offices there," he added.