Free Port

Free Port, a port at whose wharves the vessels of all nations can load and unload free of customs duties and commercial charges, with the exception of the usual harbour dues. A free port is thus, from the commercial point of view, an open harbour in contradistinction to one that is closed to all vessels except those of the country in which it is situated, and from the administrative point of view financially a foreign territory within the state to which it politically belongs. In the middle ages free ports were established for the purpose of attracting trade to particular maritime centres, especially by Italy, France, Spain, Austria, and Portugal, at the period when the exploitation of their colonies for the benefit of the mother-country was the ruling principle in the commercial policy of those states. In the end of the 18th and the beginning of the 19th century free ports acquired a position of peculiar importance during the years in which prohibitive and protectionist measures were in force. Since then, however, they have decreased both in importance and in number. At the present time their chief use is that of entrepôts for facilitating the more convenient interchange and distribution of commodities destined for more or less distant markets. To all intents and purposes their utility has been destroyed by the rival system of bonded warehousing, which has always prevailed in England and the United States in preference to the other system (see BONDED WAREHOUSES). In 1889 the only free ports remaining on the continent of Europe were Trieste and Fiume in Austria, and Hamburg and Bremen in Germany—the latter two having since 1888 only a restricted area within the free port. Trieste and Fiume ceased to be free ports in 1891, while in that year Copenhagen was made one. Among free ports outside of Europe are Hong-kong, Menado in Celebes, Singapore, Georgetown (Penang), Amboyna, Banda, Ternate, St Thomas (West Indies), Livingstone in Guatemala, and, since 1892, Zanzibar.