Annihilating many of the good effects of the recent conservative tendencies, the government now contemplates the inauguration of a ten billion dollar public works program. Coming at a period when business appears ready for a definite seasonal recovery, this project is likely to have deleterious repercussions in the fields of industry and finance.

No substantial business recovery can be logically anticipated until public confidence is restored by a definite program which aims towards a balanced budget and a stable monetary policy. In the depressions of the seventies and the nineties, much of the business stagnation could be definitely traced to the uncertainty of the monetary policy and the threat of inflation. When the government in those eras definitely settled the policies in favor of sound money, confidence was immediately established and an expanding industry paved the way to recovery and prosperity. It is this same uncertainty which paralyzes business today. It is this ghost of inflation which hovers over financial circles and prevents a restoration of confidence. As Dr. Kemmerer ably pointed out. It is the federal deficit which constitutes the chief threat of inflation. As long as the government continues its policy of lavish expenditures, as long as a glittering flood of gold purs from the Treasury, no honeyed words of the President can banish the fear inspired by the prospects of monetary manipulation. Regardless of its temporary effects on unemployment, any plan which contemplates the expenditure of billions of dollars is detrimental to the country's welfare insofar as it retards business rehabilitation.

In the past, the wheels of recovery have been started by the flow of private capital into the channels of investment. Any program of spending which increases the national deficit and prejudices the soundness of the monetary unit is an obstacle to industrial progress.