FOREIGN TRADE ZONES 11
into the large port it now is solely on account of the needs of the extensive popu-
lation at its door; neither has it developed because of the manufactures carried
on in its vicinity or of natural wealth, such as coal, to be exported from its neigh-
borhood. It is true that within 25 miles of the docks there is 2 population of
9,000,000 people and that the port is the mouth through which the population
is largely fed and supplied by ships. It is true also that there are in and near
London engineering factories, breweries, tobacco works, and so on, but the
people are not as a whole dependent upon such industries as in what is termed “a
manufacturing town.” What is supremely true of London is that it has devel-
oped into a great international market and the financial center of the world. Of
its vast population an enormous proportion finds its vocation as distributors and
middlemen, financiers and bankers, bookkeepers and typists. Immense quanti-
ties of goods are imported not for the population at hand to consume or manu-
facture but for storage, sale, and distribution to other parts of the kingdom and,
indeed, other parts of the world. This entrepot trade has always been the most
striking feature of the port of London.
Free ports are designed to encourage international trade of the
character in which London has been so successful, but which can not
be carried on in customs ports in high tariff countries without incon-
venience and expense.
2. SPECIAL FACTORS WHICH WOULD AFFECT THE VALUE OF FREE
PORT OR FOREIGN TRADE ZONES IN THE UNITED STATES
The balance of Part I of this report consists mainly of an analysis
of various aspects of free ports as developed outside of the United
States with a view to suggesting the probable consequences of estab-
lishing such a system in the United States.
Tt must not be assumed, however, that the consequences of estab-
lishing free ports or foreign trade zones in the United States would
necessarily be identical with those which have followed the estab-
lishment of free ports abroad. Owing to the remoteness of most
American ports from foreign countries to which imported goods could
be reexported, it should not be expected that the immediate use of
American free ports would approach that of Hamburg or the other
more active free ports of Europe. The ultimate importance of free
ports to the United States would largely depend on the extent to
which American ports became world centers for the distribution of
goods coming from or the collection of goods destined for certain
areas of the world, near by or afar, which are not themselves great
shipping centers. That there would immediately be some business
of this kind there can be no doubt. As to whether it would ulti-
mately be large or small, only the future could tell.
This report will aim to throw as much light as possible on the char-
acter of the advantages now derived by free ports abroad and which
might be anticipated for free ports or foreign trade zones in the
United States.
