The modern passport has its beginnings in World War I; it is an outcome of a heightened state of security that kind of stuck around:

The great watershed in the reestablishment of passport regimes among all the major countries of Europe and North America, however, was the First World War, under the declaration of “national emergency.” In the political and economic nationalistic environment that followed the war in 1918, passport controls became an institutionalized feature of international travel, with governments reasserting the right to control exit from and entry into national territories under their control.

Source here.

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