The outspoken Katharine Hepburn once called Monaco "a pimple on the chin of the south of France." She wasn't referring to the principality's lack of beauty, but rather to the preposterous idea of having a little country, a feudal anomaly, taking up some of the Riviera's best coastline. Hemmed in by France on three sides and facing the Mediterranean, tiny Monaco staunchly maintains its independence. Even Charles de Gaulle couldn't force the late Prince Rainier to do away with his tax-free policy. As almost everybody in an overburdened world knows by now, the Monégasques do not pay taxes. Nearly all their country's revenue comes from tourism and gambling. Monaco -- or rather, its capital of Monte Carlo -- has for a century been a symbol of glamour. Its legend was further enhanced by the 1956 marriage of the man who was at that time the world's most eligible bachelor, Prince Rainier III, to the American actress Grace Kelly. Ms. Kelly met the prince when she was in Cannes for the film festival to promote To Catch a Thief, the Hitchcock movie she made with Cary Grant. A journalist friend arranged a Paris Match photo shoot with the prince -- and the rest is history.

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