Conscience and the Portfolios

Should Christian investments have a Christian conscience? For years most churches have avoided obvious immoral profit from sources such as slums and brothels, but lately they have become involved in stickier moral issues. Last week Presiding Bishop John E. Hines announced that the Episcopal Church will demand at the next General Motors stockholders meeting that the company end its operations in South Africa.

The Episcopal Church owns 12,574 shares of GM stock, only a tiny fraction of the 285,500,000 shares outstanding. But the uphill fight is meant to be dramatic. It is one of two initial campaigns of the church's new Committee on Social Criteria for Investments, headed by Wall Street Lawyer Robert S. Potter. Another possible action, on which a report is due this week, is opposition to new open-pit mining operations in Puerto Rico by American Metal Climax and Kennecott, in which the national Episcopal Church office and local churches hold a combined $10 million in stock.

Moving GM. Rather than establishing broad moral guidelines, the Episcopal investment committee chose to tackle issues on a case-by-case approach. Investigation of South African investments had long been mandated by the church, says Potter, and GM was an obvious target. "If you can move GM," he says, "you can move everybody." The General Motors plant at Port Elizabeth employs some 6,200 South Africans, who would be put out of work if the plant closed. Moreover, GM officials note, some 65% of the plant's employees are nonwhite. Though the government decrees different starting salaries for whites and nonwhites, GM says that it makes up the difference in added benefits for nonwhites, such as free hospitalization and lower rents. In the crunch, the company feels that it can count on stockholder support.

The Episcopalians might have better luck against the proposed copper mines. After Bishop Francisco Reus-Froylan of Puerto Rico persuaded the church to hold hearings about the project, five other denominations with extensive stock in the mining companies joined the inquiry: the American Baptist Convention, the United Methodists, the United Presbyterians, the Lutheran Church in America and the United Church of Christ. The hearings in Puerto Rico revealed cause for concern; among other things, they showed that neither government nor mining firms had made plans for relocating displaced farmers, and that no conclusive investigation of environmental hazards had been completed. The mining companies refused to participate in the church inquiry on the grounds that their negotiations with the government were confidential, but the companies' defense may come out at government hearings scheduled to begin next week.

Pope's Fault. The United Church of Christ was an even earlier pioneer in social use of its investments. In 1965 its home and foreign mission boards began to question companies whose stock they held about equal-employment policies. Since then, two General Synods of the U.C.C. have gone considerably farther. Now the church tries to help worthwhile causes, such as minority economic development, even when the return may be less than bluechip. It opposes investments that are inconsistent with church positions on race, poverty, peace and world development.

A different approach has been used by the United Methodist Church. Its Board of Missions yanked a $10 million investment portfolio out of First National City Bank of New York when that bank and nine others extended a $40 million line of credit to South Africa. The women's division of the board sold $400,000 in Dow Chemical stock to protest the "moral irresponsibility" of the company's napalm.

The Vatican, too, has been looking at its investments. Its financiers have sold most of the church's 15% interest in Italy's Societa Generate Immobiliare, a company that made its fortune building luxury housing. The Vatican no longer intends to hold a principal interest in any company--but hardly as a method of protest. Explains one of the church's lay financial advisers in Rome: "The Vatican was getting blamed for too many things. If Immobiliare raised the rents, the tenants blamed the Vatican. If the water was cut off, it was the Pope's fault." To alter that image, the Vatican will now have "neither authority nor responsibility in the management of a company."

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