Warnings by the American Association of Colleges to universities throughout the nation that buying up business might endanger the tax exemption status of the educational institutions does not apply to Harvard, Paul C. Cabot '21, Treasurer to the University, said yesterday.

Cabot said he was "in complete agreement" with a report made to the A.A.C. Thursday by Harold E. Stassen, president of the University of Pennsylvania. Stassen deplored university buying of outside businesses and said such procedure was "an abuse" which could jeopardize the tax privileges of higher education in the United States.

Two bills were introduced into Congress last year to tax earnings of educational institutions from business ventures. Legitimate college enterprises such as university presses might be taxed under such legislation, Cabot fears.

"If passed," Cabot said, "such bills might have serious repercussions on those universities, like Harvard, that have attempted to live within the spirit, as well as the letter of the law.

"In the past and in the foreseeable future," Cabot continued, "Harvard proposes to maintain its policy of not buying, owning or operating businesses on a tax-free basis, that have no relationship to the ordinary conduct of the University's academic affairs."