CONTENTS. Principal imported articles on which drawback was paid.. Page. LETTER OF TRANSMITTAL. UNITED STATES TARIFF COMMISSION, The Committee on Ways and Means of the House of Representatives: We have the honor to transmit herewith, in accordance with your request dated October 4, 1919, information compiled by the United States Tariff Commission on free zones. FREE ZONES IN PORTS OF THE UNITED STATES. INTRODUCTION. The act of September 8, 1916, creating the United States Tariff Commission (sec. 702) declares: It shall be the duty of said commission to investigate the administration of the customs laws of this country * *, to investigate the operation of customs laws, and to submit reports of its investigations. * An investigation of the administration of the customs laws necessarily compels scrutiny of bonded warehouses, bonded manufacturing warehouses, and the drawback system as instrumentalities in foreign trade. The free zone, as an alternative and supplementary device, particularly for the promotion of transshipment in foreign trade, merits consideration. At the request of the Committee on Commerce of the United States Senate, the Tariff Commission has had occasion to investigate free zones abroad and the possibility of establishing such zones in the United States. Hearings were held in New York, San Francisco, Philadelphia, New Orleans, and Galveston, and questionnaires were sent to hundreds of merchants and shippers, to chambers of commerce and other commercial organizations in the United States. Interviews were had with Government agents and others familiar with the operation of free zones in other countries. Data procured by the Secretary of State, Secretary of Commerce, and Secretary of the Treasury were placed at the disposal of the Tariff Commission. Study was made of the history and workings of free zones in Europe and of the laws and regulations controlling them. From information thus obtained, the following report is compiled. DEFINITION AND PURPOSE OF A FREE ZONE. The word "free" in connection with "port" or "zone" is apt to be misleading. It is proper to note, therefore, that the term has no relation either to port charges or to any policy of "free trade" or protection" in this case. Conventional nomenclature is in this case misleading. A "neutral" zone would be more properly descriptive. A free port or free zone is a place, limited in extent, that differs from adjacent territory in being exempt from the customs laws as affecting goods destined for reexport; it means simply that, as regards customs duties, there is freedom, unless and until imported goods enter the domestic market. 7 |