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The Keeper of the Keys

By Linda S. Drucker

Since the formation of a professional corporation to manage Harvard's portfolio nearly a decade ago, University Treasurer George Putnam '49 may no longer make the day-to-day decisions about how to invest every Harvard dollar. But the soft-spoken unobtrusive businessman continues to be the key influence on university investment policy.

The president of his own management firm, handling more than $8 billion in mutual funds. Putnam is a Boston Brahmin who inherited his father's flourishing business. Today Putnam, devotes considerable time and energy to philanthropic activities--16 to 20 hours a week alone on the essentially non-paying post of treasurer.

In his spare time he farms and reads, often condensed books in Rearder's Digest. "I'm basically a very ordinary person," he acknowledges. Putnam's unassuming personality makes it easy to underestimate the depth of his convictions--particularly the conviction that financial security is the key to Harvard's future. Like most other Corporation members, he prefers to leave the educational matters to the Faculty.

In an interview earlier this spring. Putnam explained that as inflation erodes the value of the University's endowment, the University will not be able to continue to attract the same kind of students or faculty.

"What worries me-most is that someday soon Harvard may no longer be in the position to admit students who are not able to pay their own way. Right now, our admissions policy is 'buck-blind,' so to speak. But this problem is going to arise in the very near future."

And so, with this ostensibly liberal motivation. George Putnam took whoat most students deemed to be an illiberal position.

Disturbed by the negative reaction of the business community to the University's sale of $50 million in Citicorp notes after the bank open a line of credit to South Africa. Putnam abandoned his customary behind-the-scenes posture to take a leading role in advocating that the Corporation lift its blanket prohibition against investments in banks that loan money to South Africa.

Claiming that the present investment policy is too "restrictive." Putnam urged repeatedly that the character of the loan be taken into account, and the policy revised to allow the University to invest in banks that loan money to South Africa for "humanitarian" purposes.

"Some loans may help to preserve the status quo, but others better the condition of Blacks. Why can't we differentiate?" Putnam said. "I am puzzled by the way students tend to paint all of these things with the same broad brushstrokes."

Putnam, however, added that his personal support of a policy change did not mean that "the Corporation would unilaterally alter its policy without first consulting the Harvard community." Putnam also reassured students that he would not interfere with the independent review of Harvard's bank-loan policy being conducted by the Advisory Committee on Shareholder Responsibility (ACSR).

Putnam's statements drew fire from undergraduates who charged Putnam and the Corporation with attempting to take advantage of a temporary lull in student activism in order to retreat from the sole concession they had made in April 1978, when 3000-plus protestors demanded complete divestitutre.

Furthermore, student members of the ACSR suspected that Putnam and other Corporation members who agreed with him were pressuring Milton Katz. Stimson Professor of Law and Chairman of the ACSR.

Katz, maintaining that Corporation members had not affected the outcome of the ACSR's deliberations, did acknolwedge that Putnam had "informally made his views known at a cocktail party."

With the brouhaha over investment policy expected to continue into next year, Putnam will continue to be the key actor. As Treasurer, it is his responsibility to assess what restrictions on University investments are "feasible" in light of the University's overall objectives. How much pressure he chooses to exert may well determine the outcome of the current review.

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