Free State of Galveston made these businesses increasingly difficult to sustain. By the end of the 1950s, this era of Galveston's history had ended. The island of Galveston, which lies on the Gulf of Mexico, held one of the first major settlements in the eastern part of what is now Texas. During the mid-to-late-19th century, it became the largest city in the state. Galveston was also an important national commercial center and one of the busiest seaports in the United States, as the Port of Galveston was able to capitalize on Texas' rapid rise in the cotton trade. Its downtown was known as the
Port of Galveston then-newest ship, the "Carnival Magic" at the port. Terminal 2 was expanded in 2016 to accommodate Royal Caribbean's desire to base their larger "Freedom"-class ships in Galveston. The new facility can accommodate up to 5,000 passengers and allows for simultaneous handling of passengers embarking and disembarking. Port officials have earmarked $100,000 for the design of a third terminal, but are waiting for definitive interest from a cruise line before beginning work. The port receives fees of $11-$26 per cruise ship passenger, depending on whether port employees are responsible for tying the ship down, or for paying the harbor pilots responsible