The familiar Hindley-Milner type system of the ML language family is extended with monad annotations to account for possible side e ects of expression evaluation. This also allows e ects to be e ectively encapsulated by lexical scopes, with enforcement provided by t ype checking. A t ype-and-e ects analysis supports type inference. Type soundness and completeness theorems establish the coherence of monadic type inference with the reference semantics of a small ML-style language.