DR. ERNEST G. STILLMAN '08, one of the Harvard's biggest financial supporters in the middle of this century, was almost as eccentric as he was rich.

Although like other alums he bankrolled swimming pools, baseball cages, professorships and construction in the Yard, he devoted much of his life to silviculture, donating a forest, a museum and some $1.25 million to Harvard to encourage scholarship in the field.

In his last will and testament, released upon his death in 1949, Stillman instructed his caretakers "to have my remains cremated and the ashes scattered in Black Rock Forest, Orange County, New York." In the same document, he donated to the University the 3800-acre parcel of land that borders the Hudson River, along with a sizable endowment.

Thirty-four years later, Harvard began a campaign to sell the forest to a prominent New York environmentalist for $400,000, and to keep the endowment--which by then had grown to $2.5 million--to support another Harvard forest in Petersham, Mass.

Black Rock, located more than 200 miles farther away from Harvard than Petersham, was little used by students or faculty, who could conduct virtually all necessary research at Petersham. In addition, Black Rock costs some $25,000 to $30,000 a year to maintain.

Although the majority of the income from the Black Rock Trust Fund is now used for Petersham, under New York state law governing charitable trusts, Harvard must support the little-used Black Rock Forest for silviculture research. Harvard cannot invest heavily in the Petersham forest--and today, new funds for forestry are not readily available.

AT THE TIME OF the sale in August 1984, and right up to today, Harvard said Stillman intended the then-$1.2 million gift to support forestry at Harvard in general, and not specifically at Black Rock.

Harvard proceeded cautiously with the sale, unwilling to offend the family and friends or to violate the trust of a prominent donor. It secured a deal with a wealthy and respected philanthropist in New York, William T. Golden, who promised to use the forest for research and preserve Stillman's intentions.

But the deal, despite Golden's promise, was the subject of severe criticism from one member of the Stillman family, from New York environmentalists, from other Harvard alumni--and eventually from the New York Attorney General's office. Many said they feared Harvard was violating Stillman's intention.

Now, after a year of correspondence and compromise, the Attorney General's office is reportedly moving closer to supporting some deal for the sale of the Black Rock Forest. The office is a key party in arguing either for or against any such deal in the necessary court session for the dispensation of a charitable trust.

While an end to the ordeal does not seem immediate, the tensions between the various New York alumni and Harvard, two groups which are not natural enemies, have increased in anticipation. Any resolution to the problem will almost certainly leave some questions unanswered, and some parties dissatisfied.

A decision in Harvard's favor may prompt some counter court action by one New York group, while a decision unfavorable to the University may indefinitely delay the sale and cost Harvard thousands annually.

HARVARD'S MOST RECENT proposal, offered last spring after some compromise, is to sell the forest to Golden for $400,000. Golden would form an "educational consortium" of about a dozen schools to use the forest for research. Harvard would then leave that $400,000 in a permanent endowment to remain associated with Black Rock, but would keep the $2.5 million to support Petersham operations.

The Attorney General's office, which has received testimony from people on all sides of the issue and has claimed to honor the terms of the original charitable trust, late last summer proposed that Harvard leave a total of $900,000 with the forest, according to Pamela Mann, an assistant attorney general in charge of charitable trusts.

Harvard rejected that offer, instead saying that $400,000 is an adequate amount to maintain the forest for silviculture.