Analyzing the fiscal policy of the Administration from three of its most significant aspects, the creation of flat credit, the public works program, and relief expenditures, Lewis W. Douglas, in the third Godkin, Lecture, indicated his opinion of the inevitability of inflation. "It cannot be doubted," he said, "that we have reached the point at which deficits are financed by flat credit, and that at some time, just as in all previous experiences, we may reach the point where government deficits will be met by the direct or indirect governmental or central bank printing of flat money. But even if we do not, the time eventually will arrive when fear of bank deposits will induce an inflation just as in all previous experiences with fear of money, it has arisen."

Turning directly to the Administration, Mr. Dougins alleged it was committed to monetary manipulation, that its public works program has failed utterly to reduce unemployment, and that emergency expenditures have increased to such an extent as to render a balanced budget, a return to fiscal sanity, to financial responsibility, difficult if not impossible. In his estimate of what has been called recent recovery, Mr. Douglas found only a hollow illusion, created largely by huge government appropriations, and by flat credit.

"First, because revenues will not be sufficient to meet expenditures, and second, because a deliberately excessive spending policy cannot induce recovery," he felt that sooner or later, even assuming an intervening "boom" America will have to choose between chaos and a return to American institutions. A day of reckoning is bound to come.

"When that day arrives, it is difficult to conceive the method by which we may escape from the despotism of dictatorship."