Capital Mystery

For a week, the rumor had flitted along Washington's Pennsylvania Avenue: John L. Lewis was buying the staid, red-chimneyed National Bank of Washington.

The National is not the biggest bank in the capital (resources: $29 million), but it is the oldest (est. 1809). Henry Clay and Daniel Webster were once depositors. In the War of 1812, the cashier cagily sneaked the bank's funds out of town the day the British captured the city. Later the bank lent the empty U.S. Treasury $50,000 to help rebuild the White House, which had been burned by the redcoats.

National's stock, originally issued at $40 a share, had been selling at around $200 a share until last week. Then Broker James M. Johnston, representing an undisclosed customer, suddenly offered $280 a share. For $2.9 million he reportedly snared 80% of National's stock. A few days later, the directors eased President J. Frank White up into the board chairmanship and elected a new president, Barnum L. Colton, who was brought over from the National Savings and Trust Co. There he had been a vice president and had handled the United Mine Workers' deposits, chiefly the welfare fund of some $25 million. Presumablythe fund might now be moved.

Colton and White said they did not know who had bought the bank. Broker Johnston, who was elected a director, knew but was telling no one. However, the United Mine Workers had been talking for some time about buying a bank--and it made good financial sense. The welfare fund was likely to soar to $100 million and the union could make more money by putting it out in bank loans than by drawing interest on it as a deposit. But when newsmen asked Lewis if he was now a banker, all they got was a faraway look and a curt: "No comment."

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