What's your opinion on U.S. companies doing business in South Africa?

The real question you're asking me is, should we make loans to South Africa? And would we do more harm than good if we pulled out? Well, we asked ourselves the same thing. To get the answers we put Vernon Jordan, head of the Urban League, and Frank Thomas, who was then head of the Bedford-Stuyvesant Redevelopment, but who's since been elected head of the Ford Foundation, on an airplane with Bill Spencer, the president of the bank. They went down there for eleven days, and they talked to everybody you could name.

They tore themselves apart, emotionally. They worked from early in the morning until late at night, and they came home tired, but convinced that if we pulled our investment out of South African enterprises, it would create massive unemployment, which wouldn't do anybody any good.

The course of action they recommended is to keep doing what we've been trying to do all along--that is, press against the outer limits of the law. For example, Citibank was the first foreign organization there to have a pension plan for blacks and whites. We have no segregated lobbies, lending offices, tellers' lines, or any of those things in Citibank. All of which is illegal. The same thing is now true of most other multinationals there.

The investment that we have down there isn't that large. Our total capital in the Union of South Africa is only around sixteen million. But the amount isn't the real issue. What matters is a human question--how do you get rid of a system that is totally unacceptable in the civilized world, without throwing the whole country into massive unemployment? That's a hard trick. As far as the financial impact of a pullout is concerned, I don't think it would amount to much, but the human impact would be devastating.

You've been asked many times why Citibank decided not to continue lending to the Government of South Africa and government-owned enterprises there. You've responded that it was purely an economic decision. Do you see any case where you wouldn't extend credit, even though it was profitable for you in the long run?

What we really said is that we evaluate the many factors that make up what we believe is a good credit risk. One of those factors is the political stability of the host country. Apartheid is a repugnant political system, for which no humane person has any praise whatsoever. That is a big negative factor in assessing credit risk. The positive side of their credit position is that diamonds and gold are relatively good exports.

If we were to base our lending decisions solely on the purity of political systems, I'm not sure we could justify every loan we make to New York City.

No one could construe that as a moral question.

Oh, yes, they could. You didn't talk to the pickets outside our door.

Question withdrawn.

The point is that everyone has his own moral book. If we get into the business of judging the world's value systems, we're in terrible trouble. Maybe we should never have lent to the City of Atlanta prior to Martin Luther King.

So the business of the bank is to be an economic intermediary, and not a moral intermediary.

That's right.