G. William Miller and K. S. Wu are the merchant bankers of 19th Street.

In a city known best for high-stakes politics, Miller and Wu engage in high-stakes finance. Although they work in the same elite merchant banking profession on the same downtown Washington street, Miller and Wu say they have never met and know nothing about each other's activities. Their lack of contact is the result of the secretive nature of merchant banking. Both Miller, the former Treasury secretary and former Federal Reserve Board chairman, and Wu, the globe-trotting deal maker from Taiwan who is vice chairman of Peers & Co., do big deals quietly. And they are careful not to reveal the names of clients who want to keep a low profile.

"I don't like to give interviews," Miller said. "I like to be private."

"He runs the firm like a Swiss bank," said Michael H. Cardozo, a managing director of G. William Miller & Co., adding that this is the first time Miller has discussed his merchant banking activities with the press.

Merchant banking, as Miller and Wu practice it, includes providing financial advice to wealthy families and companies, arranging mergers and real estate deals, and providing capital to businesses that need it. Their Washington brand of merchant banking has an international flavor, with both men advising foreigners interested in buying U.S. businesses and real estate.

What distinguishes this pair of merchant bankers from investment bankers, who earn fees for arranging similar deals, is that they frequently act not only as financial advisers but also as principals. That means Miller and Wu often invest their own money in the companies they advise and in the deals they arrange. Sometimes they receive stock in a company in lieu of an advisory fee. Because they are not involved in the day-to-day operations of these companies, it is possible to advise many at the same time. That is one of the elements that attracted Miller to merchant banking.

"After 25 years or so of literally being the chairman or head of a big organization, I'd like to move from being quarterback, so to speak, to being coach," said Miller, 61, who served as a top officer of Textron Inc. from 1956 to 1978, before joining the Carter administration. "While I am still young and have lots of time to do things, I'd rather coach 10 or 15 teams . . . than just one."

Wu said he wants his year-old merchant banking firm to focus on helping medium and small U.S. and Japanese businesses gain access to the others' markets through acquisitions and clever marketing.

"My observation is that the bottleneck of trade between the U.S. and Japan really doesn't lie between multinationals like IBM and Sony," Wu said. "The real bottleneck lies in medium and small companies unable to find access on the other side of the Pacific. Precisely for that reason, I have started to germinate this concept of bridging these two cultures in business and investment banking, with the caveat that we are a merchant banking firm. We tend to put our money where our mouth is, instead of just putting deals together and earning fees from that. "Tale of a Wealthy Client

One way to understand how merchant banking firms operate is to look at some of their clients and deals. One of Miller's major clients is the wealthy Middle Eastern Ojjeh family. The patriarch of the family is Akram Ojjeh, who was born in Syria, carries a Saudi Arabian passport, and lives in Paris, according to Miller.

The Ojjeh family operates through a company called the TAG Group. TAG stands for Techniques d'Avant-Garde. The giant company has wide-ranging operations in Europe, the Middle East and North and South America. It has offices in Riyadh and Jeddah, Saudi Arabia; Paris, Geneva, and Washington. Miller said the Ojjeh family likes to have offices in town houses. TAG owns its Washington office at 1215 19th St. NW, a handsome town house built in 1885 that once was Theodore Roosevelt's home. Not coincidentally, G. William Miller & Co. has its offices in the town house and shares certain employes with TAG.

According to a 1984 summary of its operations, TAG's investments exceed $600 million. Miller's job for TAG is to locate and assist in acquisitions of U.S. businesses. Before TAG hired Miller, he had been doing some deals on his own, since leaving the Treasury in 1981. After gaining this major client, Miller put together a small staff and formally launched his merchant banking business in January 1983.

"TAG as a client was coincident with starting our firm," Miller said. "One of the reasons we needed a firm was to service a company like TAG. I don't think I could have done it alone. They have retained our firm to handle their investments in the western hemisphere."

TAG owns hotels, office buildings, a stake in a major importer and distributor of Rolls Royce and Jaguar automobiles in Europe, the largest endive farm in Quebec, a ranch in California specializing in avocados, a giant farm in Paraguay with 10,000 head of cattle, and valuable paintings, jewelry and other assets, according to its 1984 report. TAG also has invested in the United States by participating in the financing of Meridien Hotels in New Orleans, Newport Beach, Calif., Houston, Boston, and San Francisco, and The Registry Hotel in Dallas, the report said.

"We are looking for non-real estate investments for TAG , some operating companies," Miller said. "They have felt a substantial amount of their investment should be in the United States, and they need people here who are in this market and understand it. We are engaged both in new opportunities and in overseeing what they have."

Miller's firm has six professionals, three of whom work in Providence, R.I. The Rhode Island group consists of former Rhode Island governor J. Joseph Garrahy, and J. Joseph Kruse and Ronald A. Van Brocklyn, two executives who worked with Miller at Textron, which is based in Providence. In Miller's Washington office are Michael H. Cardozo, who served as deputy counsel in the Carter White House, and Steven L. Skancke, who was a deputy executive secretary for the Treasury secretary in the Carter and Reagan administrations.

On the domestic side of merchant banking, Miller has been instrumental in founding a new company, the Private Satellite Network (PSN), and in restructuring an ailing North Carolina steel company, Korf Industries. He has purchased a major stake in a St. Louis-based industrial company and assisted in financing new product development based on government research.

Reflecting on PSN, Miller proudly says, "There were two young people who came to see me and had an idea and the beginning of a business plan, though they needed someone with business experience to help them formulate it, raise the money and help them launch it. And we did just that."

Miller serves as chairman of the rapidly growing company, which is a leader in the direct broadcast satellite field. PSN provides corporations and other large institutions with private video networks. One of PSN's clients is Wang Laboratories Inc., which uses the network to communicate computer sales strategies to its employes. Merrill Lynch was the firm's first client; others include Ford Motor Co., IBM Corp. and J. C. Penney Co.

Miller said PSN provides companies with "point-to-multi-point television" to communicate important messages to its employes. Now in its third year of operations, PSN expects to have about $12 million in sales this year, Miller said, predicting sales will double next year.

Miller, who owns stock in the firm, could reap a windfall if PSN follows through with plans to sell stock to the public in about a year and a half. With his extensive contacts in the corporate world, Miller not only has helped PSN raise $18 million in financing and organize a management structure, but also has paved the way for PSN to sell its services to blue-chip firms.

One of Miller's strengths as a merchant banker is his ability to manipulate numbers creatively, to see ways of negotiating and selling assets that can lead a struggling company with a weak balance sheet to prosperity. He does this without using so much as a calculator, one source said.* Korf Radios SOS to Miller

About three years ago, Korf Industries, of Charlotte, N.C., was on the verge of bankruptcy when it asked Miller for his help. Struggling under a mountain of debt, the firm's creditors were ready to pull the plug before Miller stepped in. He gained the confidence of lenders and began a restructuring program that has included the sale of steel mills and replacement of debt-financing with equity or stock. In return for his efforts, Miller got stock in the firm, which has increased dramatically in value, he said.

"Sell off assets to raise cash, work with lenders to pay off debt, reduce debt, convert debt to equity and do all of those things we did at Chrysler," Miller said, comparing the bailout of Korf to his role as Treasury secretary when the federal government bailed out the ailing Chrysler Corp. several years ago. "Working very closely with management, we end up with a company in good shape that has a sturdy balance sheet. We have reduced debt from $265 million to $40 million in the process over a two-year period." Miller renamed Korf Georgetown Industries.

The venture Miller seems most excited about these days is a partnership called ComTech, which uses government research to develop new products for the private sector. It develops proprietary technologies so that they are ready for manufacturing and marketing. With a private financing program designed by Miller, the company has the funds to develop engineering prototypes, some of which could lead to new products or even industries. Miller serves as the financial adviser to ComTech, is an investor in the firm, and is in the midst of completing ComTech's first major financing, a $25 million offering.

Among the technologies ComTech hopes to turn into products, or even new industries, is a flat panel display that would make a television screen "so flat it can hang like a picture," Miller said. The firm also has been pursuing two anti-cancer agents, a mobile blood-pressure monitoring system, and an electronic circuit component that improves the quality of FM radio reception.* The Ascent of K. S. Wu

Unlike Miller, who has contacts throughout the U.S. corporate and financial communities, K. S. Wu, 52, knew that he would need strong U.S. partners to have a successful international merchant banking firm. To accomplish this, he joined forces with Ralph Saul, a former president of the American Stock Exchange and chairman of INA Corp., and with Paul Kelly, who had been a senior investment banker with First Boston Corp. and several other firms, to form Peers & Co. Wu runs the Washington office of the firm at 1020 19th St. NW; Peers also has offices in New York and Westport, Conn.

Before Peers, Wu worked as an investment banker in Asia and also served as chairman of a bi-national government committee in 1977-78 to try to expand distribution of U.S. products in Japan.

Peers has ties on both sides of the Pacific. In Japan, it has the support of the Long-Term Credit Bank (LTCB), which is supplying Peers with capital and with information about possible acquisitions and trading opportunities in Japan. One LTCB employe works in Peers' New York office. In the United States, Peers has the financial backing of Kemper Financial Cos., an affiliate of Kemper Insurance.

Peers began last year with about $12 million in capital; $400,000 from LTCB, $5 million from Kemper and the rest from Peers employes and several special partners.

Last year, Peers bought control of Texas HiTech Inc., a publicly held consumer electronics firm based in Oklahoma City. That investment already has paid off. Wu said the stock is already worth about 20 times the three cents a share Peers paid for it. He said it demonstrates how Peers can effectively restructure a company financially and also give it access to new sources of supply for its products from Asia.

"I put them in touch with suppliers from Hong Kong, from Taiwan, from Korea and lowered their costs," Wu said.

"We bought it when the company was in disarray and financially just in trouble," he said. "We invested $1.2 million in equity for 40 percent of the company. In addition to that, three of us put ourselves on the board and began assisting the company in financing, sourcing of the product from Asia , and we did some guarantees of bank financing for their international trade."

Wu said Peers also showed Texas HiTech, a distributor of televisions and cellular telephones, how to clean up the debt on its balance sheet through a technique known as off-balance-sheet financing. And now that the company is healthy, Texas HiTech is growing through acquisition of a competitor, Lloyds, that is five times its size, Wu said.

"The stock of the company went up more than 20 times, so we used that inflated paper currency and went into an acquisition of a larger company," he said, adding that the acquisition will be worth between $15 million and $20 million.

Wu said Peers' merchant banking activities include arranging international mergers and acquisitions, international trade, and real estate investments. He said the firm advised Sumitomo Rubber on its purchase of a minority stake in the Dunlop USA tire and rubber business, and that Peers is providing acquisition and other strategic advice to seven to 10 clients. With several million dollars in revenue and 17 professional employes, the firm will break even in its first year of operations, he believes.

In the international trade area, Peers arranged for Kuwait to purchase military vehicles made in Chile and is in the midst of determining the best way to market Paul Newman's salad dressing, spaghetti sauce and popcorn in Japan. On behalf of Asian investors, the firm is looking for real estate investments in Washington, Los Angeles, New York, Chicago and San Francisco.

Wu believes his firm can help many U.S. businesses expand their trade with Japan. "There is a famous Chinese proverb that you have to know your enemy as well as yourself and then every battle is won," Wu said. "I think the U.S. business is disadvantaged in its dealings with a foreign country in that way, especially with Asia."

And how did Wu, Paul Kelly and Ralph Saul agree on the name Peers & Co.?

"We were sort of dancing around with Saul, Wu and Kelly and it sounded like the United Nations and it doesn't look like a law firm," Wu said. "We had gone through names like Asia Pacific Merchant Bank. Peers was a brilliant idea of Paul Kelly's one day. It sounds simple enough. All of us are equal partners. Peers in itself is friends among equals."