It may be well to deal at once with the allegation that shipowners have made excessive profits. There is no doubt that during the first two years of the war ships earned large freights, not, however, due to what is commonly called "profiteering," but simply because the Government hesitated to check the imports of merchandise of a bulky character. After the Government had taken up the tonnage necessary for their transport purposes, what remained was not sufficient to convey the produce pressing for shipment. If imports had been regulated as they are now, the pressure for freight room would have been reduced and freights kept within moderate limits. The urgent need for checking imports of a bulky character was, I know, urged upon the Government by shipowners who foresaw the scramble for freight space, but the Government failed to respond to these representations. Their hands were very full, the tonnage problem was a new and difficult one, opening up many embarrassing questions, viz., as to what imports should be checked, the effect of this upon our manufacturers, and what would be the result of checking trade in one direction, in causing its dislocation in another, and the consequent disturbance of our foreign exchanges. All these and others were points upon which we had little or no experience to guide us, and the position was aggravated by the loss of tonnage due to the ravages of the submarine. Taking a calm view of the retrospect, and the gigantic and unique task with which the Government has been faced, they have accomplished their work with fewer blunders than might have been expected. After all, freights have not bulked largely in the increased cost of produce; a freight of £10 per ton is only 1d per pound. If we are to find the true cause of our high cost of living we must look at the inflation and consequent depreciation of our currency, the high rate of wages, and increased spending power of our working classes, and the indifferent harvests of last year in all parts of the world. The high freights earned by our shipping in 1914, 1915, and part of 1916 naturally caused the value of shipping to rapidly advance. Very few new merchant ships were being constructed; ships were being destroyed, and shipowners possessing established lines were forced to buy to maintain their services, and thus the value of secondhand steamers advanced to two, three, and even four times their pre-war values. Many holders, especially of tramp steamers, sold out and realised great fortunes, and these unexpected and unprecedented profits unfortunately escaped taxation, on the ground that they represented a return of capital; and it is these profits that have appeared unduly large in the public eye.