EXHIBIT No. 157 S.A.A.M.I. Mr. E. C. Hadley, the president of the Sporting Arms and Ammunition Manufacturers Institute, a trade organization composed primarily of the New England manufacturers such as Winchester and Remington, made a statement before Senator Dodd's Subcommittee for Juvenile Delinquency on June 4, 1965, testifying on S. 1592. Talking specifically on surplus military weapons, he said as follows: "As early as 1958 the sporting arms industry sought to obtain a ban or restriction on trade and national defense grounds." [Emphasis ours.] It is interesting to note that Mr. Hadley himself admits that the S.A.A.M.I. endeavors to embargo importation of military surplus rifles were based on "trade and national defense grounds" and not on any grounds of crime prevention. Inasmuch as crime prevention is the purpose of S. 1592 now before Congress, Mr. Hadley's reasons of "trade and national defense" do not have any place here whatsoever. Just to set the record straight, between 1957 and 1964 the New England manufacturers have been responsible, directly or indirectly, for 11 separate attempts before the legislative and executive branches of the Federal Government to eliminate the importation of military surplus rifles (see detailed schedule enclosed). They have been rejected every time for lack of merit. Further on, Mr. Hadley states, and I quote: "We wish to make it clear that we did not then and do not now oppose the importation of quality sporting firearms of new manufacture." This statement would not appear to agree with the statement made by Mr. Hadley on Tuesday, March 25, 1958, before the House Foreign Affairs Committee. On page 5 of his statement talking about the sporting arms industry's problems, he said as follows: "There are four sources of the industry's problem. First, the importation of American-made rifles declared surplus by our allies abroad; second, the importation of surplus used and new foreign made military surplus rifles; third, the importation of foreign made commercial arms; fourth, the sale of surplus military firearms by the U.S. Government within the United States." We cannot account for this discrepancy in testimony, but this committee should be aware of the fact that in the meantime Winchester has opened a factory in Japan and is importing shotguns from Japan to the United States, presumably in an effort to counter the serious competition always furnished by the Browning Arms Co. which imports their shotguns from Belgium. This committee should know, furthermore, that of the problem areas mentioned in 1958, the New England manufacturers have succeeded to eliminate two; namely, the importation of American-made rifles declared surplus by allies abroad, and the sale of surplus military firearms by the U.S. Government within the United States. EXHIBIT No. 158 OUTLINE OF MOVES TO OBTAIN EMBARGO ON MILITARY RIFLE IMPORTS 1. In May 1957, and January 1958, these northeastern manufacturers applied themselves to the Department of Defense and the Department of State for an administrative decision to cut off military rifle imports. Both Departments declined and the Department of Defense letter, dated July 12, 1957, stated that military security, defense mobilization, and the degree of competition were all taken into account in arriving at this conclusion. 2. Failing to persuade the agencies of the executive branch responsible for national security, these companies then turned to Congress in the spring of 1958 for legislation which would accomplish the same purpose by amending section 414 of the Mutual Security Act of 1954. After engineering a sweeping embargo of military firearms imports in the bill reported out of the House Foreign Affairs Committee (the so-called Morano amendment), they were soundly defeated by a vote on the floor of the House when the gun collectors and other gun enthusiasts became alerted to the problem. The Senate, with the benefit of advice from the Department of State and Department of Defense, followed the House in confining the broadside embargo to the reimportation of U.S.-made arms originally exported as lend-lease or military assistance. Thus the Congress witnessed a clear test of political strength between a few manufacturing companies geographically concentrated in the Northeast and the hundreds of thou sands of gun enthusiasts and the hundreds of small businesses serving them which are spread across this country. 3. These manufacturers then turned their attention to the Department of Commerce, traditionally attentive to the problems of American business faced with foreign competition. In October 1958, one or more meetings between the representatives of the firearms manufacturers and the Department of Commerce resulted in the initiation of an investigation into the impact of both imported and domestic surplus sales of small arms on the domestic firearms industry. The resulting study, completed December 1959, was protested bitterly by the manufacturers for its failure to agree with their position and for various factual findings inconsistent with their claims. 4. Without waiting for completion of the Department of Commerce investigation, the manufacturers' next maneuver was to file a petition, dated July 29, 1959, asking the Director of the Office of Civil and Defense Mobilization (hereafter referred to as OCDM) to find that the national security was threatened by the importation of low-cost obsolete centerfire rifles on the grounds that the facilities of the six petitioning companies play an important role in the national defense and were being impaired by this alleged competition. After 3 years of the most intensive and extensive investigation into all aspects of this matter, the petition was denied. On June 4, 1962, the Director of the Office of Emergency Planning (the agency that inherited this case from the Office of Civil and Defense Mobilization) ruled that imports of military surplus rifles did not threaten to impair the national security. 5. During November 1959, a joint letter from Senators Saltonstall, Keating, and Bush is understood to have requested that OCDM in effect provide injunctive relief to the petitioners through the imposition of a temporary embargo on military rifle imports. OCDM having no authority to impose embargoes in the absence of the necessary statutory findings, referred the letter to the Department of State, which thereupon informed the three Senators and the importers concerned that it was conducting its own investigation, independently of OCDM, and would issue no more import licenses until completion thereof. The State Department completed its investigation and lifted its embargo, insofar as 95 percent of military rifles were affected, during February 1960. This indicates that it determined that imports do not adversely affect the national security. For unrelated reasons, the embargo continued temporarily on military semiautomatic rifles and full automatic rifles, however, it was subsequently lifted on semiautomatic rifles. Insofar as full automatic rifles are concerned, these can be imported only under conditions defined by the Departments of State and Treasury. 6. At a hearing before the Senate Finance Committee in April 1960, these manufacturers submitted a statement opposing the widely supported King bill, designed to improve procedure for preventing firearms from falling into criminal hands and to eliminate pointless interference with legitimate trade. The statement predominantly emphasized objection to the proposed 2-inch reduction in the minimum barrel length of carbines which the then existing law classified as a concealed weapon. (Certain foreign-made carbines, due to use of the metric system of measurement, fell a fraction of an inch short of the 18-inch limit in the old law). Nonetheless, the King bill was subsequently enacted into law as an amendment of the National Firearms Act. This episode gives an added idea of the scope of the campaign against imported military firearms. 7. A press release of May 9, 1960, indicated that Senator Saltonstall called upon the chairman of the Senate Preparedness Subcommittee to investigate the importation of military surplus. It is quite evident that this was motivated by the six petitioning New England firearms manufacturers and perhaps due to the fact that as a decision approached in the OCDM investigation there was evidence of recognition by the manufacturers that their atempt to identify themselves with national security in order to obtain protective relief may not have been succeeding. This attempt followed the same past pattern of starting a new investigation before the current one had been completed. On June 7, 1960, Senator Lyndon Johnson stated in a letter to counsel for the American Council for Technical Products, Inc., that the Senate Preparedness Investigating Committee was not scheduling any hearings in response to the request of Senator Saltonstall because, "we are currently awaiting the results of a study by the executive branch of Government which is reviewing the matter based upon the appeal filed by the American Sporting Arms Manufacturers." 8. Also concurrent with the OCDM investigation, these New England manufacturers turned their attention to the U.S. Tariff Commission, with the hope that they would be able to provide information to the Commissioner's bearing on the advisability of an "escape clause" proceeding, primarily on the same subject as the OCDM investigation. On March 16, 1961, the Tariff Commission staff advised the counsel of the American Council for Technical Products, Inc. that the Tariff Commission was preparing a study of the sporting firearms industry. Regretfully, we are unable to cite the exact results of this report, however, it evidently did not agree with the position of the New England manufacturers, as witness their opposition to the duty reduction on imported firearms in the Trade Expansion Act of 1962 which we will allude to later. 9. On June 30, 1960, the so-called Dodd amendment was passed by the Senate as a rider to a State Department appropriation bill. The Dodd amendment stated that it was "the sense of the Senate" that the State Department "should take action as may be necessary to prevent the importation of all military firearms." It was included by action of the Senate Subcommittee on Appropriations for State, Justice, and the Judiciary, whose chairman was Senator Lyndon Johnson and included both Senators Dodd and Saltonstall. There was no explanation in the Appropriation Committee report and no comment on the floor of the Senate. Upon being informed of the Dodd amendment, various importers, manufacturers, gun dealers, gun enthusiasts and the National Rifle Association acquainted the members of the Senate-House conferees of their concern and as a result the Senate-House conferees removed this rider from the State Department appropriation bill (H.R. 11666). Congressman Rooney reported to the House that this action was taken because "this language might raise havic with the small sporting goods dealers and gunsmiths all over the country." (Congressional Record, August 24, 1960). On August 24, 1960, the Dodd amendment was again introduced as a rider to the Mutual Security appropriation bill (H.R. 12619). On August 25, the Senate-House conferees on the Mutual Security appropriation bill (a different group from the State Department appropriation bill conferees) also struck the Dodd amendment from that bill. 10. On April 4, 1962, the Sporting Arms & Ammunition Manufacturers Institute (representing seven New England firearms manufacturers) addressed a letter to the chairman of the House Ways and Means Committee protesting the substance of the Trade Expansion Act of 1962 (H.R. 9900), as it pertains to the reduction of tariffs on all firearm imports. Point one of their suggested changes was a provision that the antidumping laws be amended to include imported military surplus, so this matter has already been considered by the House Committee on Ways and Means and turned down. Without itemizing the many other ramifications of this complaint, it is suffice to note that this complaint did not alter or modify the position of the Ways and Means Committee, for the Trade Expansion Act of 1962 was subsequently passed in its original form, insofar as applying tariff reductions within the province of imported firearms. 11. On August 14, 1963, Senator Saltonstall introduced S. 2043, a companion bill, H.R. 8256, being introduced in the House by Representative Conte on August 27. These bills provided that "the foreign market value of imported firearms and ammunition which have been disposed of as surplus by a foreign government shall, for the purposes of this title, be not less than the constructed value of the merchandise as defined in section 206." An examination of the intent and substance of the Anti-Dumping Act of 1921 indicates that this disguised attempt to establish an increased tariff duty does not fall within the purview of the act. It is, as a matter of fact, diametrically opposed to the policy of the U.S. Tariff Commission as established by the restriction of duties in imported firearms in the Trade Expansion Act of 1962. Both these bills died in the past Congress but were reintroduced in the 89th Congress under S. 1448 dated March 8, 1965, and H.R. 5563 dated March 1, 1965, waiting to be voted upon. EXHIBIT No. 159 SMALL BUSINESS MARKET New developments in small arms technology since World War II, as well as the standardization by Western European and South American armies on the new NATO caliber, have made millions of rifles and handguns obsolete. These guns are being sold by the governments concerned, and are being bought for im portation to the United States under appropriate Department of State licenses issued by the Office of Munitions Control. The rifles in question are overwhelmingly of the bolt-action type as used during World War I and World War II, such as the U.S. Springfield, the British Enfield, the German Mauser, etc. They are all in the .30-caliber range, between the 6.5millimeter Swedish, equivalent of a .256, to the .303 British and 8-millimeter Mausers. These cartridges all are sufficiently heavy to bring down most medium game at good ranges. These rifles reach the American sportsman through two different channels of distribution and thus affect two types of businesses: on one hand through the large merchandising companies such as Sears, Montgomery Ward, GambleSkogmo; on the other, through small gunsmiths and gun dealers. Many member stores, in chains such as Western Auto, are actually individually owned thus constitute individual small enterprises, only loosely integrated in a chain for purchasing economy. Whenever a rifle is sold, either in a small gun store or a large department store, the customer will buy an addition $10-$20 or more accessories such as cartridges, a sling, a gun case, maybe an adjustable sight, etc. Many shooters, for reasons of economy or in quest of ultimate precision, prefer to load their own cartridges and will buy powder, bullets, primers, and reloading tools. Thus the sale of the original military rifle for $25 or $40, triggers off followup sales of several times the original purchase price. These articles are manufactured by small manufacturing enterprises all over the United States, such as Fajen in Warsaw, Mo., making stocks, Redfield in Denver, Colo., and Williams in Davison, Mich., making sights, Hornady in Grand Island Nebr., making bullets, as well as hundreds more making slings, gun cases, reloading dies, etc. Interarmco sells directly to approximately 6,000 small gun dealers and gunsmiths in 50 States. One of our accounts, G. R. Douglas in Charleston, W. Va., employs some 35 men, turning out some of the most accurate precision barrels in the world. During the past 6 months we have sold to him about 900 military actions of one type alone, the German Mauser 33/40. Mr. Douglas fits his precision barrels to our actions and sells them to the discriminating sportsmen who subsequently have them stocked and finished by a gunsmith of their choice. One aspect of this type of business is that companies such as Winchester and Remington have consistently refused to sell their actions to gunsmiths until approximately 1 year ago; a gunsmith, if he wanted to make a custom rifle, had to buy either a military surplus action or a foreign commercial action imported from Finland, Sweden, or Belgium. Today, Winchester Model 70 actions are available for the price of $115 each (note that the entire M-70 rifles cost $139 complete). A small gunsmith can get this action at a discount of 25 percent or at about $76.25. In comparison, new, commercial actions such as a Finnish-made Sako, cost $54. On the other hand, we charge between $14.50 and $24 for our military Mauser actions, depending on the type. Another reason why the trade likes military surplus rifles is because of their attractive price. In the same manner as a lower price Kodak camera provides the first step for a hobbyist who may eventually wind up owning several high-priced cameras plus innumerable lenses, military surplus rifles provide the beginner with a natural source with which to start out on his hobby. Military surplus rifles, as is, sell between $25 and $40 each; sporters based on military rifle actions will sell from $30 to $70. A new Winchester M-70 costs $139, other models of center-fire rifles as made by other New England manufacturers, around $100, and as low as $60. Secondhand, they will sell for as low as half or two-thirds of their new price. The price range clearly overlaps. One factor which contributes greatly to the popularity of military rifles is the "sporterization" aspect. According to a 1959 survey 44.7 percent of militaryrifle buyers modify them by cutting down the stock and the barrel, replacing the sights and generally lightening and dressing up the weapon. We ourselves are selling more and more "sporterized" military rifles to the large chains and lesser quantities of "as is" rifles. Some of these sporters are being made for us right in New Haven, Conn., by American labor at the rate of about 1,500 per month. We expect to sell between 35,000 and 40,000 sporterized military rifles this year to the various department stores, chainstores, and so forth. Based on Department of Commerce figures, as found in the Foreign Trade Reports, I personally estimate that approximately 2 million military surplus rifles have been imported during the past 10 years and they have caused a large increase in the volume of these small gun businesses to the extent that, according to an article published in the April 1965 issue of the Shooting Industry **** better than 50 percent of his gunsmithing service and work is in the sporterizing field, that better than 80 percent of his inletted stock sales are for surplus arms." Contrary to what certain administration witnesses have tried to establish, military surplus imports do not consist largely of destructive devices such as mortars, bazookas, AT rifles, artillery pieces, and so forth. A search of our records indicate that during the past 12 years Interarmco has imported 4,524 such devices, an average of 377 yearly. I doubt very much that all our competitors put together have imported the same over the years. These imports are insignificant and we would be the first to urge that such items be included in the provisions of the National Firearms Act, thus making them subject to registration as well as the $200 transfer tax. Only a small percentage of military surplus is really sold through mail-order channels proper; of our total U.S. sales volume, only between $100,000 and $150,000 yearly are sold through the mail or railway express at retail prices to individuals who are not federally licensed dealers. For instance, during calendar 1964, our subsidiary, Hunters Lodge, sold approximately 2,300 rifles and as many pistols, and we are by far the largest such company in the United States. Senator DODD. Very well. Thank you again, Mr. Cummings. Senator DODD. The hearings are adjourned. (Whereupon, at 11:30 a.m., the hearing was closed.) |