Carol L. Somplatsky-Jarman, Director of International Justice of the Interfaith Center on Corporate Responsibility (ICCR), points out in her testimony that most major U.S. banks now have a policy prohibiting loans to the South African government. ICCR and its member churches had met with and filed shareholder resolutions with many of these banks to advocate this policy. This has been largely won, so the focus has shifted to loans to private sector entities in South Africa. A number of U.S. banks have ended their loans to the South-African private sector, including First National Bank of Boston, Wells-Fargo, Chase Manhattan Bank, Mellon Bank and Harris Bancorp. Yet there has been a tremendous increase in private sector lending since 1980. Between the end of 1980 and 1984, lending by U.S. banks to the South African economy increased 4.5-fold. Lending to the government and government-owned corporations remained relatively stable during this time, but bank-to-bank lending increased by seven times. Interbank lending has been cited as having led to the rapid deterioration of the South African economic position. It has been estimated that South Africa's short-term debt amounted to $12 billion when the crisis hit, and that between $800 million and $1 billion of these loans have not been rolled over in the last two months. The South Africans have been unable to cope with these demands on their capital reserves and have responded with a moratorium on debt principal repayments. Due to the fragile state of the South African economy, Somplatsky-Jarman says that the churches call upon the Subcommittee on Domestic Monetary Policy to require that U.S. banks reveal the size of their outstanding loans to South Africa and identify their borrowers. The testimony mentions Congressman Fauntroy, racism, the white minority government, Prime Minister B. J. Vorster, Finance Minister Owen Horwood, Gerhard De Kock, the South African Reserve Bank, CMG, equity investments, President Reagan, Gerald Miller, Nedbank, trade-related loans, the World Council of Churches, European bank lending, Euromoney, Austria, Luxembourg, Italy, Spain, France, United Kingdom, Belgium, Switzerland, Federal Republic of Germany, Citicorp, Morgan Guaranty Trust Corporation, Barclays National Bank, the Electric Supply Commission (ESCOM), Volskas Bank, Manufacturers Hanover, the SEC, membership in ICCR, and the anti-apartheid movement.
Used by permission of the Interfaith Center on Corporate Responsibility.
Collection: Miloanne Hecathorn papers