276 FOREIGN TRADE ZONES 
these two zones and their functions may be clearly understood the 
steps which have led up to their establishment and the present atti- 
tude of the Greek and Yugoslav Governments on the subject are 
described in the following paragraphs. Apart from purely economic 
motives, political considerations between Greece and Yugoslavia have 
had much to do with the establishment and the subsequent delay in 
the operation of the Yugoslav free zone, and the establishment of the 
Greek free zone. 
The Yugoslav free zone was originally the subject of a convention 
between Greece and Serbia signed on May 19, 1914. On account of 
the outbreak of the European War nothing was done toward its 
establishment until the latter part of 1922. The zone area was for- 
mally ceded to Yugoslavia on March 6, 1925. 
The Greek free zone, which surrounds the Yugoslav zone, was 
inaugurated on October 18, 1925. 
YUGOSLAV FREE ZONE 
DRIGIN OF, AND NEGOTIATIONS LEADING UP TO ITS ORGANIZATION 
Before the World War Saloniki was the natural maritime port for 
Serbia which at that time had no outlet on the Adriatic Sea. In the 
spring of 1914 an agreement was signed between Greece and Serbia 
assigning a free zone to Serbian commerce at Saloniki, but owing to 
the outbreak of the war it was not ratified. In spite of the expansion 
of Serbia into the State of Yugoslavia with a seaboard on the Adri- 
atic, the need for an outlet on the Aegean remained, and the question 
of a free zone at Saloniki was reopened in November, 1922. The 
same month Greece ratified the 1914 agreement but Yugoslavia 
refused to do so on the grounds that its terms were not adequate to 
her requirements. Negotiations on the subject were resumed and 
on May 10, 1923, a new agreement was signed in Belgrade. By the 
terms of this agreement Greece ceded to Yugoslavia for a period of 50 
years an ares in the port of Saloniki to be placed under the Yugoslav 
customs administration. The zone was to remain an integral part of 
Greek territory and under Greek sovereignty, but was to be admin- 
istered by Yugoslav customs authorities. State and municipal 
land in the area was to be ceded without charge, but land under 
private ownership was to be expropriated by the Greek Government 
and paid for by Yugoslavia. Officials in the zone were to be Yugo- 
slavs, and the chief executive authority was to be vested in a Yugoslav 
official under the control of the Greek captain of the port of Saloniki. 
Goods in transit between the zone and Yugoslavia, and goods imported 
for use or consumption in the zone were to be free from all Greek 
State or municipal taxation. Yugoslavia was to enjoy most-favored- 
nation treatment in the port of Saloniki as well as any advantages 
arising from the establishment of a Greek free zone. The contracting