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FOREIGN TRADE ZONES

The experience in Europe indicates that an excessive number of competing
 free ports in the same general trade area tends to defeat the
purpose for which they are designed. On the other hand, there may
be areas where it would be desirable to authorize more than one free
zone within the same port of entry, which would not be permissible
ander the terms of some of the bills heretofore introduced. For these
reasons it is felt that the best procedure with relation to the establishment
 of free ports, if Congress authorizes them, would be one
similar to that now followed in connection with the adoption of
channel improvements at our harbors. Under this plan, Congress
might call for examinations to be conducted by the Bureau of Operetions,
 U. S. Shipping Board, and Board of Engineers for Rivers and
Harbors, War Department, of specified localities with a view to the
establishment of free ports or foreign trade zones therein. Such
examinations should include an exhaustive investigation of the navigation
 and terminal facilities; the position of the port as an outlet
for exports and as a port for the receipt and distribution of imports;
its advantages or disadvantages with respect to the concentration
of products of foreign origin and their redistribution to other countries;
 its relation to the established trade routes of the United States;
and its influence in attracting more cargo to American ships; the
rail and highway communications; and the suitability of the location
 for proper coordination of rail and water routes, In brief, the
investigation, which should precede the authorization or establishment
of a free port, should not differ materially from the port and transportation
 investigations which the Corps of Engineers and the
United States Shipping Board have made, in connection with the
functions devolving upon these establishments.
Attention is particularly invited to section 8 of the merchant marine
act of June 5, 1920, which authorizes the Shipping Board, in cooperation
 with the War Department, to undertake certain specified functions
 with the object of promoting, encouraging, and developing ports
and transportation facilities in connection with water cominerce,
The following is quoted from this act:
That it shall be the duty of the board, in cooperation with the Secretary of
War, with the object of promoting, encouraging, and developing ports and
transportation facilities in connection with water commerce over which it has
jurisdiction, to investigate territorial regions and zones tributary to such ports,
taking into consideration the economies of transportation by rail, water, and
highway, and the natural direction of the flow of commerce; to investigate the
causes of the congestion of commerce at ports and the remedies applicable thereto;
to investigate the subject of water terminals, including the necessary docks,
warehouses, apparatus, equipment, and appliances in connection therewith, with
a view to devising and suggesting the types most appropriate for different locations
 and for the most expeditious and economical transfer or interchange of
passengers or property between carriers by water and carriers by rail: to advise