In 1963, during a Security Council debate on apartheid, Adlai Stevenson announced dramatically that the United States had banned all sale of arms to the Republic of South Africa. The step had been taken, he said, to show America’s deep concern that South Africa refused to abandon its racist policies. In March of this year, a reactor went critical at a research center near Pretoria, and South Africa joined the nuclear age. The feat was made possible by the firm that designed and built the equipment: Allis-Chalmers of Milwaukee.

Juxtaposed, the two events drive home some little-known truths about America and apartheid. The United States, while mouthing its disdain for the Afrikaan regime, is an accelerator of the economic boom that insures the Verwoerd government’s confidence and self-righteousness. As an investor in South Africa and as a trading partner, the United States is outranked only by Great Britain. The investments and the volume of trade rise month by month. Seeing this growing American entanglement, South Africa takes with a grain of salt any rude comments that may come from official American sources. Why worry, for example, about an embargo on arms that are easy to manufacture, as long as America licenses the export of nuclear machinery that South Africa cannot produce itself? The Republic’s ability to bear up under official US. scolding is further bolstered by American economic interests which are coalescing into a South Africa lobby designed to make certain that the remarks are not, after all, too rude.

The latest Department of Commerce figures show that U.S. direct investment in South Africa reached $415 million by the end of 1963. These official figures, however, understate the case: they are computed at book value rather than actual value and do not include such indirect investments as purchase of South African stocks and bonds, and American bank loans to South African companies. Various South African official and business sources offer figures that are anywhere from $250 million to $500 million higher than those of the Department of Commerce. It is safe to assume that total American investment has now reached between $750 million and $1 billion.

This total is little more than 1 per cent of American investment overseas, but it accounts for 11 per cent of foreign investment in South Africa (Britain is the leader with 60 per cent). More important, the figures show that American investment has accelerated during a period when world opinion has hardened toward South Africa. Direct American investment has tripled since 1950; since Sharpeville (1960) it has increased 45 per cent.

Profits, not politics, have drawn American capital to this neo-Fascist state. South Africans live in heady, booming times. Gross National Product increased 11 per cent last year, and the University of Stellenbosch's Bureau of Economic Research says that the only possible future brake on this boom is a shortage of skilled labor. But it adds that even this would help South Africa by holding back inflation. The average return on American investments in 1960 was 29 per cent in mining and 7.5 per cent in manufacturing. From 1958 to 1961, the average earnings on U.S. investments in South Africa were 17.1 per cent, one of the fattest returns in the world. And profits have increased since then.

The biggest American companies doing business in South Africa are automotive manufacturers. Ford and General Motors sold more than half of the 143,000 cars bought in South Africa last year. The cars were assembled in South Africa from parts made both in the United States and in South Africa. The Afrikaan Government is trying to make sure that more and more of these parts are manufactured at home. Under new regulations, South Africa will restrict imports to an assembler of autos unless he can show that 55 per cent of his output will be built from South African parts by 1967.

Faced by these regulations and by the competition of cheaper British, German and Japanese cars, the American firms have announced plans to build new parts plants in South Africa. Chrysler has investment plans of $35 million, General Motors, $33 million and Ford, $11 million. This is two-thirds of the total new investment in the South African automotive industry. Last April, General Motors opened its new $30 million, 17-acre engine plant at Aloes, near Port Elizabeth. The factory is producing the first auto engine manufactured and machined completely in South Africa. Ford is completing a similar plant nearby.

Besides insuring a market to American auto manufacturers, these plants comprise part of South Africa's strategic defense. The regime can face economic sanctions or even a rebellion with that much more confidence when it does not have to depend on imported auto engines. Once again the American ban on arms shipments to South Africa sounds hollow.

But it would be unfair to harp on the activities of Detroit's Big Three - 230 American firms are doing business in South Africa. Kimberly-Clark, operating with a South African company, is about to set up a new plant near Johannesburg to manufacture facial and toilet tissues, paper towels, napkins and other paper products. The list of American companies with plants or subsidiaries in the country reads like a U.S. Chamber of Commerce honor roll: Allied Chemical, American Cyanamid, Gillette, IBM, International Harvester, National Cash Register, Olin Mathieson, Procter & Gamble, Revlon and Upjohn, to tick off a few.

The United States is also South Africa's second largest trading partner (again next to Great Britain). In the first nine months of last year, the United States was selling goods to South Africa at a rate of $371 million a year, and imports from South Africa were at a rate of $236 million.

The United States buys mostly uranium, diamonds, copper, wool and rock-tail lobsters from South Africa - in all, 17 per cent of South Africa's exports. Trade from South Africa to America has remained fairly constant in the last few years (there was a small dip last year) but American exports to South Africa have grown markedly (in 1964, they were up 36 per cent). American sales to South Africa rise because of the country's need for heavy machinery, its increased consumer purchasing power, and its ability to redress any unfavorable balance of payments with gold - it produces 70 per cent of the world's supply.

The aid and comfort that American dollars give South Africa are probably less significant in the long run than the effect these dollars will have on American public opinion. It is vital to American financial interests that South African policy receive a sympathetic hearing in the United States. Part of this necessity derives from guilt: it sometimes seems that no American businessman can invest a cent in South Africa without making a public pronouncement to justify his deed. But a more important part comes from greed. Profits could be jeopardized by sanctions or rebellion; as long as no harm comes to Verwoerd and his kind, the money rolls in.

Last March, Gen. Lauris Norstad, retired NATO Supreme Commander and now president of the Owens-Corning Fiberglas Corp., flew to Johannesburg to discuss plans for a multimillion-dollar expansion of a fiberglas plant in South Africa. With Harold Boeschenstein, chairman of Owens-Coming, at his side, General Norstad said: “We have full confidence in South Africa - not only we as individuals but the United States and the American people as well.” Asked about the UN discussions of sanctions, Norstad replied: “We hope that nobody will take any step that may cause more trouble than it will avoid.” Boeschenstein added: “Any boycott moves do not reflect the general opinion of the people of the United States nor of its businessmen.” Such remarks nourish the self-righteousness and blindness of South African whites. They also confuse the issue back home. The public, after all, sees General Norstad as a renowned diplomat and military strategist, not as an Owens-Corning executive. It counts for something when the former NATO Supreme Commander offers his learned views on South Africa. The Information Service of South Africa lost no time in distributing the cheery comments of Norstad and Boeschenstein to American news media.

Although much of the lobbying for South Africa is in this form of statements from individual American businessmen who profit by the status quo, there is some organization behind it. Businessmen in South Africa have created the South Africa Foundation to present a gilded picture of their land to the rest of the world. The foundation has organized committees of foreign businessmen in seventeen countries, and recently announced plans to open a foundation office in New York. The most prominent American member is Charles W. Englehard of Newark, N J., who was elected a vice chairman when the foundation was organized in 1959.

Englehard is chairman of a host of South African mining and industrial firms, including Rand Mines, Minerals and Chemicals, Philipp Corp., and the American-South African Investment Co. Colin Legum, in his book, South Africa: Crisis for the West, estimated Englehard‘s personal stake in South Africa at $33.6 million. Although Englehard some time ago lectured South Africa on the need for better racial policies, his latest statements brim with confidence in the existing state of affairs. In May, when he dedicated the new $3.6 million, 19-story Rand Mines building in Johannesburg, he announced: “With this structure we are expressing our confidence not only in the future of our mining group but also in the future of South Africa.” A few months earlier, in an annual report that showed record profits for the American-South African Investment Co., Englehard said that South African “progress in my opinion will be advanced if the rest of the world shows understanding of the problems which exist. Inaccurate reports, whether emanating from well-meaning sources or otherwise, only aggravate the difficulties and play into the hands of Communist supporters - more interested in furthering their own cause than in helping the people of this and other African countries.” Englehard’s remarks should not be dismissed as the talk of some eccentric rich man whose influence on American policy is negligible. He has been on the New Jersey delegation to several Democratic National Conventions, and is known as a generous contributor to the party.

The South African Foundation often takes American businessmen on tours of South Africa to see investment opportunities and the “positive” side of the country’s racial policies. These tours have made converts, including former Secretary of the Treasury John W. Snyder who, according to the foundation, now believes that “South Africa is worthy of our closest association in building up a strong world economy, and also in the protection of the world against the encroachment of communism.”

The South African lobby also has a recruit in the old China lobby. The American-Asia Education Exchange and its executive secretary, Marvin Liebman, have added South Africa to their stable of right-wing causes. In fact, the exchange is now known as the American-Afro-Asian Educational Exchange.

Any survey of American financial involvement in South Africa must raise some pointed questions about the relation of morality to money. The reply of American finance sometimes is that investments are amoral: dollars go where the profits are. Chase Manhattan, criticized for its loans to South Africa, wrote Students for a Democratic Society: “If we consider the receiver of a loan to be financially responsible, we do business with him, regardless of his nationality, religion, or political views. . . . We feel it would be unwise and unfair if we, as a bank, made judgments that were not based on economics.”

But morality does not sit well on the conscience of American investors in South Africa. They feel compelled to fabricate an image that accords with their greed. The goal of their lobby is to show how moral it is to uphold stable, capitalist, misunderstood South Africa, the only Western anchor on a continent of Communist chaos.

In one sense, this pretense of ethics exposes the vulnerability of the lobby. Unlike the China lobby, which simply had to drum into America what it was ready to believe, the South Africa lobby must counter prevailing opinion. Enough news has come from South Africa in the last decade to convince many Americans that Verwoerd and his regime are evil; the lobby must now prove that evil is good.

The voice of the lobby is growing louder, keeping pace with American financial interests in South Africa and the disorder on the rest of the continent. The lobby may not convince America that Verwoerd is good, but it may persuade America that he at least is better than chaos and communism. Can the United States allow economic sanctions that might create turmoil in South Africa and expose it for “Communist” pickings? Should the United States support the South African Government in case a ‘‘Communist” rebellion erupts? The lobby could be decisive in pulling the noses of U.S. policy makers toward loaded questions inspired by booming profits.

Stanley Meisler is a Washington newsman.