EXCELLENT SECURITY

Sun (Auckland), Volume IV, Issue 1046, 9 August 1930, Page 1

EXCELLENT SECURITY

MR. ELIOT DAVIS ON CIVIC THEATRE ENTERPRISE

REPLY TO VIR. MASON, M.P,

Interviewed b/ a Sun representative on the subjecl of Mr. IT. G. R. Mason’s statement in the House of Representatives, regarding the advance by the Bank of New Zealand in connection with the Civic Theatre, Mr. Eliot R. Davis, one of the guarantors, stated that it showed Mr. Mason up as having a very poor idea of banking finance Quite apart from the irregularity of his statement that there was no other money invested in the theatre, Mr. Davis ventured to say that it was one of the functions of a bank to advance moneys for the encouragement of industry and progress providing they were quite .satisfied with the security. The management of the Bank of New Zealand was quite capable of ascertaining, prior to the advance, whether there was any risk attaching to the security, which, in this case, probably approximated £750,000. If all the advances of the bank were as safely invested as in this security, then its shareholders would have every cause for satisfaction and good reason to expect increased dividends.

Probably 90 per cent, or more of the whole cost of this theatre was spent in labour and material in the City of Auckland, thereby largely assisting in the relief of unemployment, although, unfortunately, there was plenty of surplus remaining unemployed at the time. Again, the City of Auckland was now possessed of one of the finest theatres in the Southern Hemisphere, and. in his travels round the world, ho had never seen anything better of its kind.

As regards no money being available for farming interests, although not a banker. Mr. Davis felt sure that the banks had millions of pounds which they would lend on similar securities to that which the Bank of New Zealand held in regard to the Civic Theatre. The trouble was to find the securities in this respect under the present unfortunate conditions now appertaining to farming. He himself had a large area of sheep country near Clevedon which he would bo prepared to sell at half its cost if the buyer could satisfy the bank that the equity was there, or, even get some friend approved by the bank to guarantee the advance. It was no use lying down and squealing because financial conditions today in New Zealand, in common with the rest of the world, were infinitely worse than they were at the time the advance was arranged. The proper way was to grasp the situation with both hands and develop a spirit of optimism among the people. As a much-travelled man. Mr. Davis has the greatest confidence in New Zealand and its ability to rise over present conditions. “Finally, I would say to Mr. Mason. ‘Facta baud verba,' which, when I went to school meant ‘Deeds, not words.’” said Mr. Davis.