THE Harvard Corporation's decision to retain its security holdings in Manufacturers Hanover Trust Co., considerably weakens the already tenuous policy it has adopted toward investments in companies operating in and lending to South Africa. It also demonstrates the difficulties inherent in implementing the ACSR recommendations set forth as guidelines in the Corporation report of April 27.

Harvard's attitude toward the evaluation of companies on a case-by-case basis implies that the community will not see any real dissociation from South Africa until, at the very least, next year, and probably not for several years. Though Manufacturers Hanover's status with regards to making or extending loans to the South African government and its agencies was an "inactive front" during April, the bank has not made a statement regarding its policy towards renewals of such loans. Nor is it clear whether the bank has, since its annual meeting, made or extended such loans since it considers such information to fall within the bounds of the client-bank relationship.

Manufacturers Hanover does not publicly oppose making loans to the South African government if it deems those to be beneficial to the entire spectrum of the society. However, private correspondence leads Harvard to assume the practices of the bank to be consistent with the recommendations outlined in the Corporation report. Harvard would like the community to trust its interpretation of the bank's policy. But it is only beginning to consider the ways in which it will evaluate the banks on a case-by-case basis, and has not yet developed a mechanism for assuring that the banks will indeed hold to their private promises.

THERE is nothing in Harvard's present management structure that guarantees it will be aware of any new transactions between the banks and the South African government. Furthermore, the ambiguity inherent in the language of the report allows Harvard to judge a bank satisfactory on the basis of its private statements, disregarding (as in the case of Manufacturers Hanover) the bank's seemingly unsatisfactory publicly stated policy. It also provides Harvard with leeway in its interpretation--strict or loose--of the policy adopted by the bank. Harvard needs to define more clearly its criteria and procedures for evaluating institutions dealing with South Africa. Otherwise, the case-by-case evaluation will be nothing but a semblence of commitment to the already tenuous policy outlined in the Corporation report. The community cannot be satisfied with tacit private assurances.