A shareholder proposal to get Morgan Guaranty Trust Co. to disclose what loans it has made in South Africa since 1970 went down to defeat at yesterday's annual meeting of J. P. Morgan & Co., the holding company for the big New York bank.
But a question about whether Morgan has had a de facto moratorium on South African loans in effect for the last year received no denial from management.
The proposal, which was put forward by several church groups, was opposed by management and received only 5.49 percent of the votes cast. It follows actions at a number of large banks, including Citibank, Chase Manhattan and First Chicago, to cut back their leading to the South African government and its entities because of the government's policy of racial separation.
Morgan management had argued that disclosure of loans would breach the bank's normal policy of confidentiality. And bank Chairman Walter Page also argued that to cut back lending entirely could make it harder for the victims of apartheid to improve their situation and might set back needed social change.
Page said the bank's position on continued loans to South Africa would be assessed "on a case-by-case basis." The future economic viability of South Africa was also "a big question before us on every single loan," the Morgan chairman said.
Timothy Smith, director of the Interfaith Center on Corporate Responsibility, said he understood that Morgan has made no loans to the South African government in the last year and has a de facto moratorium in effect.
"I don't know how you learned that," Page responded, without bothering to deny the assertion.
Morgan's role in the Curtiss Wright proxy battle for control of Kennecott Copper Corp. also came up at the meeting. Morgan has $55 million of a $450 million revolving credit agreement recently negotiated by Kennecott with 24 banks. Morgan chairman Page sits on Kennecott's board, and the bank's massive trust department has discretion to vote one of the largest blocks of Kennecott shares - about 2 percent of the 33 million shares outstanding.