A Big Switch

Harvard's decision this week to sell over $600,000 worth of stock in two banks that lend money to the South African government proves once again that the University moves in mysterious ways.

Amid the mounting clamor of student groups calling for Harvard's divestiture of its holdings in the banks--Citibank and Manufacturers Hanover Trust--the investment firm that controls part of Harvard's investment portfolio suddenly announced it was selling the bank stocks "for investment reasons."

MacKay Shields Financial Corporation notified the University Thursday of its intention to sell $1.6 million worth of stocks, including the bank stock and some shares in General Motors, and to purchase stocks in smaller but faster-growing companies.

While Lawrence F. Stevens '65, secretary of the Advisory Committee on Shareholder Responsibility (ACSR), agreed that the transaction was "purely financial in nature," some campus groups have claimed the sale was at least partially politically motivated.

At its last two meetings, the ACSR, which is charged with investigating the social implications of Harvard's investment policy, discussed the general issue of investing in banks operating in South Africa.

The ACSR had tentatively decided "to take action" against such banks.

On Wednesday, Citibank's executive vice president for international affairs defended that bank's South African operation before the ACSR. But the stocks still went up for sale.

Whatever the reason for the transaction, some student observers said Harvard's back-door divestiture of the stock may well make it that much harder for the University to resist demands for stronger action against apartheid--including supporting share-holder resolutions calling for withdrawal of all U.S. corporations operating in South Africa.

Harvard still owns about $16 million in bonds and short-term certificates of deposit in three banks operating in South Africa, although financial officials for the University say all these notes will be paid off by June.