As Protests Raged, Harvard Founded Its Own Management Company
In the fall of 1973, Harvard’s treasurer decided the University should control its own purse strings.In the fall of 1973, Harvard’s treasurer decided the University should control its own purse strings.
The University’s endowment totaled $1.4 billion — a small fraction of its nearly $51 billion today, but still the largest university endowment in the world — and for over two decades was managed by the Boston-based State Street Research and Management Company.
Harvard’s treasurer George Putnam Jr. ’49, though, felt that Harvard should have more authority over its own finances, and on Oct. 23, 1973 he announced that the University planned to establish its own management company to handle its endowment.
Shortly thereafter, the Harvard Corporation approved the proposal, gradually shifting the University’s holdings to the newly founded Harvard Management Company — which stewarded an explosion of growth in the University’s endowment in the following decades.
At the same time, however, the University had been grappling for years with fierce protests over its holdings in Gulf Oil, which was deeply involved in the Portuguese occupation of Angola. As of February 1972, Harvard had 680,000 shares of Gulf Oil stock worth $20 million.
While the protests did not directly lead to the founding of HMC, the two events represent a moment of heightened scrutiny in University history regarding Harvard’s endowment — and embody the long history of Harvard’s financial holdings as a site of student protest.
‘An Onward Struggle of Humanity’
On April 20, 1972, 34 student protesters occupied Massachusetts Hall at dawn to protest Harvard’s holdings in Gulf Oil.
They would stay there for nearly a week.
The occupation — staged by members of the Pan-African Liberation Committee — was the peak of the PALC-led movement that demanded Harvard divest from its investment in Gulf Oil. They would be joined at the start by up to 100 supporters, who braved the sleet and the cold to chant and picket outside of Mass. Hall.
PALC alleged Harvard’s investments in firms operating in Angola “facilitates the daily slaughter of Africans” and that “Harvard is deeply implicated in this crime.” The newly-elected Harvard President Derek C. Bok had resisted student calls for divestment from Gulf Oil, despite escalating protests.
“There is no question in my mind that Portugal has inflicted grave wrongs on Black people in Angola and Mozambique. The question for Harvard to consider in the next few weeks is the most responsible position for Harvard to take as a shareholder in a company doing considerable business in those two countries,” Bok said in February 1972. Still, he did not commit to a change in the University’s holdings, which were at the time still managed by State Street.
On April 14, 40 demonstrators gathered outside Mass. Hall to demand that Harvard pay reparations to the Angolan people. Three days later, 50 members of the African Research Group and Harvard Radcliffe New American Movement protested Portuguese colonialism at the Harvard Club of Boston. Three days after that, on April 20, students would use crowbars to break into Mass. Hall to begin their occupation.
“This is before it was common to speak of things of thinking globally and acting locally. Just giving life to slogans like that, in an onward struggle of humanity and a better world,” said David L. Dance ’74, who was part of the group who helped organize the occupation.
In a joint statement issued the morning of the occupation, the Harvard-Radcliffe Association of African and Afro-American Students and the PALC demanded from Harvard “a public statement that it will not be involved in racist imperialist adventures in the future.”
“We feel that Blacks at Harvard are not getting anywhere with petitions and discussions,” AFRO president Kevin J. Mercadel ’74 said at the time. “So we are adopting direct action, direct tactics.”
As the occupation stretched into the night, approximately 2,000 students gathered in Sanders Theater and voted “overwhelmingly” to support PALC’s demands, according to an article in The Crimson. Over the following week, the occupiers continued to maintain student support.
“We built up roughly 2,000 people demonstrating in Harvard Yard,” Dance said.“And then crosses were set up in the interim, to represent the folks who were dying as a result of the struggles in southern Africa.”
When they finally vacated Mass. Hall, the students clothed the John Harvard statue in the outfit of a Ku Klux Klan member.
“Our ultimate decisions in terms of how to come out of the building just involved getting some white bedsheets together and dressing John Harvard up in the Klan’s outfit and vacating the building,” David said.
Despite the protests, George F. Bennet ’33 — who managed Harvard’s endowment prior to HMC’s founding as the president of State Street — held a “consistent view” that firms should not interfere in the management of the companies they invested in, according to Daniel A. Swanson ’74, a former Crimson president who covered the Mass. Hall occupation as a reporter.
“If you own shares, you have no business interfering in the day-to-day or week-to-week strategy management of the company,” Swanson said, describing Bennet’s investment approach. “The key thing here is he had a consistent position.”
Still, Swanson said the protesters’ primary goal was to spread awareness that Portuguese colonies remained in Angola — not to necessarily force Harvard to divest its holdings in Gulf Oil, which it never did.
“Nobody was stupid enough to think it was going to mean that Angola was going to become independent overnight,” Swanson said. “The whole point was to get publicity surrounding this issue so that people would know.”
“So the protest worked, not totally, not completely — it worked,” he said.
The Creation of the Company
While the protests over Harvard’s holdings in Gulf Oil did not directly lead to the founding of the HMC, they likely put pressure on the University to establish a managing corporation.
“I would speculate that the protests might have accelerated a decision making process about creating a management company that was already underway,” said Robert W. Decherd ’73, who, like Swanson, was a former Crimson president who covered the occupation as a reporter.
More directly, the occupation led to the creation of the Advisory Committee on Shareholder Responsibility. Bok established the Committee in 1972 to advise the Corporation on the impacts of their investments. According to the University, the Committee was established “concerning the social and ethical implications of the choices it must make as a major shareholder in many companies.” The ASCR proved itself to be a prominent force in advising the Corporation on how to manage its money.
Just two years later, the HMC would be founded. Crucially, HMC employees would not be allowed to serve on corporate boards for any of the companies in which Harvard was invested, a marked shift from the previous policy. Bennet, the former University treasurer and State Street president, served on several corporate boards.
Walter M. Cabot ’55 — the HMC’s first president and deputy treasurer — said he believed Bok wanted the University to have greater authority over its endowment.
“I think the University and Derek Bok wanted more control over the management than what was provided by State Street,” Cabot said. A Crimson article from 1974 mentions that “Bok and most of the members of the Corporation found themselves at odds with Bennett’s attitudes toward shareholder responsibility, investment policy and other aspects of Harvard’s financial dealings.”
With Cabot in charge, HMC would “try to avoid putting Harvard money into companies which, in their opinion, are not socially responsible,” The Crimson wrote.
While Cabot did not recall the HMC adapting its investing strategy to respond to the Angola protests, he said the company did focus on pushing firms to lessen apartheid in South Africa under his leadership.
“Apartheid in South Africa was a big issue,” Cabot said. “Harvard never did divest, but we did put pressure on companies to reduce the pressure of apartheid and we were selective in our portfolio.”
The HMC’s creation created a new focus for student protest. For the past five decades, students have protested against Harvard’s holdings in all sorts of nations and industries, most notably in apartheid South Africa, fossil fuels, and Israel.
Though the protests did not completely change Harvard’s approach to investment or the founding of the HMC, Dance still said the students who risked their Harvard careers played a pivotal role in raising awareness of the Portuguese holding of Angola.
“At every moment, it’s all about a struggle for consciousness,” Dance said. “That’s very often just the role — the catalyst to raise consciousness to another level.”
—Staff writer William C. Mao can be reached at william.mao@thecrimson.com. Follow him on X @williamcmao.
—Staff writer Veronica H. Paulus can be reached at veronica.paulus@thecrimson.com. Follow her on X @VeronicaHPaulus.