THE CAMBRIDGE City Council took an impressive step last week when it voted to divest its holdings gradually in companies doing business in South Africa--a step that stands in ironic contrast to Harvard's position on the same issue.

Prompted by a citywide vote of more than two-to-one against investments in companies tied to South Africa on a non-binding referendum last fall, the council last week adopted the proposal of the city's Retirement Board that it sell such stocks as soon as it could do so without losing money. While immediate divestiture might have been preferable, the none-too-prosperous city on balance is making a wise decision since the money from the fund pays the pensions of city workers.

Harvard might take a lesson from the city government. Despite its lack of comparable wealth and security, city officials agreed divestiture was a good idea. "It seems the most direct way out, the way that will do the most good," George O'Brien, assistant city manager for fiscal affairs, said at one point, rejecting the head-of-a-pin arguments and moral sophistries that have characterized the University's attempts to mute controversy. If the city can put moral interests ahead of long-term financial ones, so can Harvard.