Stock Sales: Mixing Finance With Politics

THE UNIVERSITY'S ANNOUNCEMENT late last week of the decision to sell over $600,000 of stock in two banks that lend money to the apartheid government of South Africa came as a surprise to almost everyone involved in the divestiture conflict.

Unfortunately, the explanation for the sudden sale given by the men who watch over Harvard's $1.5 billion portfolio was no surprise, falling into the University's pattern of consistent disregard for the humanitarian issues involved in the South Africa financial situation.

MacKay Shields Financial Corporation, the investment firm that controls a segment of Harvard's portfolio including the Citicorp and Manufacturer's Hanover stock in question, told the University last week it was selling those particular stocks as part of a $1.6 million changeover to investments with greater and faster growth potential. Walter M. Cabot '55, deputy treasurer of the University, relayed that information to the Advisory Committee on Shareholder Responsibility (ACSR), but said at the same time that the sales stemmed from purely financial, and not political, motivations, though the sale has obvious political repercussions.

Cabot's claim is plausible. The stocks, purchased last year, have appreciably declined in value, as have many bank stocks, and a periodic housecleaning of a large portfolio is to be expected. The stocks may have depreciated at least partially because of mounting political pressure. It is difficult to ignore the political significance of the sale; still, taking the University at its word, the decision should have had political, as well as financial consideration.

Several other colleges and universities, including Hampshire College, the University of Wisconsin, and Ohio State University, have already publicly announced that they will rid themselves of stock in companies that support the South Africa government. To these schools, the obvious repression and denial of human rights that characterize the minority rule in South Africa made their claims as institutions of freedom and learning hypocritical as long as they continued to hold the tainted stocks.

Since Harvard commands so much respect in academic and social circles, a decision by the University to divest at least some of its South Africa-related stocks, particularly investments in commercial banks that directly support South Africa through loans, would command a great deal of influence, since many major institutions must come to grips with the question in the near future. The University should make such a decision and take an active role in shareholder resolutions calling for the withdrawal of U.S. investments in South Africa.

There is no indication that the sale of Manufacturer's Hanover and Citicorp stock represents Harvard's first step in taking a stand on the inhumane situation in South Africa. If in the future the University decides at long last to place morals over finances, it should say so, instead of throwing the controversy into the dry realm of finance, avoiding moral implications involved in the sale, and saving face in the business community. It is admirable when a university--even Harvard--listens to critics within its own community and publicly changes its policy to correct a glaring injustice.