The economic impact of this bill would be greatest with respect to both distributors and dealers selling ammunition but not guns. An annual license fee of $100 for the privilege of selling regulated ammunition is so large as to cause nearly all to discontinue sales of regulated ammunition. Even if the annual fee were reduced to a more reasonable amount, the recordkeeping requirements would serve to deter a large majority from selling regulated ammunition. The impact of the bill would be first experienced by the retail outlets and then the wholesale distributors would be directly affected by the curtailment of ammunition sales by those retail outlets.

In most instances these retail outlets are small family-owned establishments such as grocery stores, sporting goods stores, hardware stores, specialty stores, or gasoline service stations located in nonurban areas.

Many retail outlets carry ammunition as a customer service. For the sportsman it is a means of supplying him ammunition along with other items he needs in the field during hunting trips away from home. For the local residents it is ancillary to supplying him with his other daily supplies.

In rural areas the use of ammunition frequently represents food on the table for the family. Rabbit and squirrel are often the meat meal in rural homes. In many instances neither the customer nor the retail outlet is in an economic position to purchase or maintain a stock of any significant quantity of ammunition.

The rural service station or the rural general store that sells ammunition purely as a convenience item to sportsmen or as a necessity item to local residents is not in a position to maintain detailed records on sales involving less than $1, and to devote the time required to keep such records on a meaningful basis.

To the extent that any of these retail outlets would obtain a license, and pay any license fee, they would do so as a penalty in the interests of customer service or to meet customer need. For the majority, the $100 proposed fee would be too costly to justify their continued sale of ammunition subject to the act.

The simple economics of time and manpower combined with the risk of error or failure to comply with recordkeeping requirements are sufficient alone to cause most of these retail outlets to discontinue the sale of ammunition covered by the bill.

For further evidence of the impact that the license fee requirement S. 1592 would have on ammunition dealers we refer to the recent testimony before this subcommittee of Dr. E. C. Hadley on behalf of the Sporting Arms & Manufacturers' Institute:

"According to recent figures, there are about 120,000 dealers who sell ammunition in the United States, two-thirds of whom do not sell firearms. The average annual retail sales of ammunition of these dealers amounts to $1,800. This is an average, and many dealers have sales less than $1,800. Assuming a net profit of 5 percent, which is high for the average hardware or sporting goods store, this means that they earn less than $100 net profit on their sales. On the basis of such earnings, it is obvious that most dealers could hardly afford any license fee at all, much less $100. If ammunition is included in this bill, many of these small businessmen would have no choice but to stop handling it. This would make it difficult for many sportsmen to obtain ammunition, particularly in the sparsely settled areas of the country in which most hunting and shooting takes place."

We agree with Dr. Hadley that the typical small country merchant-whether located in Maryland, Minnesota, or Arkansas-whose total annual retail sales of ammunition are less than $50 to $100 can ill afford any large annual license fee for the privilege of selling that volume of ammunition. Moreover, even if the license fee were smaller, the recordkeeping requirements in and of themselves would cause him to discontinue the sale of those regulated items.

We reiterate our belief, supported by the statements of the Treasury Department officials to which we previously have referred, that the provisions relating to ammunition in this bill serve no useful purpose in terms of its objectives. Their inclusion would, instead, impose a needless economic burden on the small retailer who has carried the item to provide a service to his regular customers or as a means of attracting the sportsman or hunter into his store.

The many who could neither afford the license fees, nor adequately fulfill the recordkeeping requirements of S. 1592 would be forced to forego the sale of a product which only the large retailer could continue to sell.

Surely it is not the desire of Congress to impose unneeded, unworkable, and expensive restraints on the manufacture and sale of ammunition-as well as on the small merchant, the sportsman, the farmer, and the rancher-when in doing so the economic cost is without any social or economic value.

STATEMENT OF JOYCE W. HORNADY

My name is Joyce W. Hornady, my home is Grand Island, Nebr., and my business is manufacturing. I am the president of Hornady Manufacturing Co., a small firm which since 1949 has produced bullets for sportsmen to reload. Reloading is a specialized and increasingly popular part of the shooting sports, and its growth has contributed to the overall health of the shooting industry. As a manufacturer I believe that S. 1592 holds serious implications for my own business, and as a shooter and private citizen I am opposed to the basic practical intent of the bill, eliminating all mail-order sales of firearms and severely restricting all interstate firearms commerce.

The Subcommittee To Investigate Juvenile Delinquency has demonstrated through its lengthy and thorough investigations that there is a need for new Federal firearms legislation to support State and local firearms laws. The easy circumvention of local laws by juveniles, addicts, felons, and the mentally incompetent through their purchase of firearms by mail from uncritical and noncurious-or totally unscrupulous-dealers begs for legislative action. owe the subcommittee a great debt for its work in bringing this situation to national attention.

We

The question now is, What legislation can best eliminate the abuses which currently exist?

Of the testimony this subcommittee has received on the bill presently under consideration, S. 1592, that of Senator Gordon Allott, of Colorado, May 20, 1965, is among the most perceptive. Like Senator Allott and others who have given the problem their full consideration, I endorse legislation (such as Senator Dodd's S. 14) intended to help the States prevent illegal access to firearms by eliminating interstate firearms shipments which violate State and/ or local laws.

But like Senator Allott, I see a vast difference in basic philosophy between S. 14 and S. 1592. The former bill affirms the legitimate use of firearms by taking a direct approach to restrict interstate shipments to prevent sales to criminals, juveniles, and the mentally incompetent. S. 1592, on the other hand, questions these legitimate uses by stringently regulating all firearms commerce, not just commerce opposed to the public interest.

I believe that mail-order sales of firearms, which S. 1592 would end, are and historically have been in the public's best interest. From a statistical approach, far and away the vast majority of such sales are legitimate. But rather than approaching specific and well-documented abuses with the goal of eliminating them, S. 1592 goes far beyond this purpose by eliminating private interstate firearms commerce.

I believe, too, that the bill's concern with surplus military firearms and their importation, the bill's import restriction provision regarding surplus small arms is not relevant to the purported anticrime intent of the bill. Surplus military small arms have a rightful place in our economy, and have had an important role to play in the growth of shooting interest in America. I believe that the elimination of military small arms imports-provided in section 2(e), 3—would be of no benefit to the general public, though it would afford some unneeded trade protection to our domestic producers.

Even after amendments to (1) eliminate antique firearms from the bill's provisions, (2) eliminate small arms ammunition from regulation by the bill, and (3) affirm specifically the right of sportsmen to carry rifles and shotguns between States for legitimate sporting purposes, S. 1592 is still objectionable in its basic provision. It is a trade regulation bill with serious commercial consequences for my own business, and for hundreds of small businesses throughout the Nation.

Basic to the purposes of S. 1592 is the definition, indentification, licensing, and regulation of firearms dealers, manufacturers, and pawnbrokers. As many have previouly testified, the license fee for dealers, $100, seems exorbitant. I firmly

endorse an increase in the present Federal firearms permit fee which, I understand, does not cover cost of issuance. This permit has long been used by many private individuals to obtain unearned trade discounts on shooting equipment and supplies. But bona fide dealers can be identified and nondealers can be kept from claiming dealer status for considerably less than $100. If the purpose of the licensing provisions of S. 1592 is to regularize firearms distribution by discouraging private and noncommercial citizens from claiming dealer status, then I believe the license fees can be reduced to more sensible levels such as those proposed in earlier legislation and suggested by the committee's interim Report No. 1340. The $100 license fee for dealers seems punitive-and designed to drive from firearms trade not only noncommercial private citizens but small and entirely reputable legitimate dealers as well.

It seems to me that overly stringent regulations-such as the executive dealer fee discussed above-characterize much of the bill. S. 1592 proposes harsh measures far beyond those necessary to correct a problem or stop an abuse. Ostensibly, the basic purpose of the bill is to prevent individuals from obtaining firearms in violation of State or local laws. Practically speaking, the measure does more than is sufficient to give this aid to State and local authorities. It will eliminate a vast amount of legitimate commerce among the States and in so doing will not only inflict losses on hundreds of reputable small businesses, but will impose discriminatory regulations on thousands of law-abiding shooters and sportsmen.

S. 1592 does not discriminate between proper and improper, legal and illegal mail-order firearms sales; it begs the question by eliminating all of them. Many have spoken against mail-order firearms sales; I should like to defend them, for legitimate sales are entirely defensible, and there are dozens of proper reasons why firearms have been and should continue to be easily available from distant sources. No local supplier, however excellent, is ever able furnish all of the firearms that a shooter might want. Custom gunsmiths throughout the Nation specialize in exclusive types, styles, or models of guns, and the gunsmith who has earned a reputation for high quality, outstanding performance, and meticulous workmanship has in the past been able to expand his market as his reputation spread throughout the country. Eliminating mail-order sales will destroy the national market now open to the small custom gunsmith. It will destroy also the business of the specialized supply houses which have developed to serve special target shooting or hunting interests.

What anticrime purpose is served by eliminating dozens if not hundreds of completely reputable small businesses? None, I submit. Instead of addressing itself directly to the problem of unscrupulous dealers and manufacturers and their illegal interstate sales, S. 1592 proposes broad regulations which will destroy or seriously damage many small and legitimate businesses and leave them utterly without recourse. I suggest that the affidavit system, as proposed in S. 14 with only a few additions, if given vigorous Federal enforcement and if coupled with stiff penalties to individuals and firms which violate the law, will eliminate the abuses which should be eliminated without deleterious effects on legitimate

commerce.

The shooting sports have grown rapidly in the past two decades as more and more Americans have discovered the pleasures of hunting and of target and recreational shooting. One of the most important contributions to this growth has been the introduction into the American firearms market of surplus military small arms, especially rifles, available at attractive prices. Not only have these firearms introduced millions to shooting, they have also spurred domestic firearms production and resulted in the exceptional growth of related shooting supply and equipment companies.

The bulk of imports of surplus military weapons are those small arms which are readily adaptable to sport shooting; and the role of Mauser, Enfield, and Springfield military rifles in the growth of the shooting industry cannot be underestimated. In an article in the April issue of Shooting Industry magazine, a trade publication for this industry, Editor Bob Steindler reported a study he had conducted among gunshops on the importance of the military rifle. He learned that most surplus rifles underwent a 2-year transformation from their original condition into a sporting rifle. The owners were shooters who might not be able to purchase a new sporting firearm, but who could invest about the same amount over a long period of upgrade a surplus military firearm with scope, sporting stock, swivels, and other accessories.

The influence of surplus military rifles on our entire industry has been highly beneficial. In West Virginia (gun barrels), Missouri (rifle stocks), Colorado (telescopes and iron sights), Texas (gun cases), Iowa (gun bluing)—all over the country small businesses have developed to serve shooters with products to upgrade their original surplus military purchase. My own company makes hunting bullets in many calibers not commercially popular before surplus Mausers and Enfields became available, and even our domestic ammunition producers have followed suit by introducing hunting cartridges to fit these formerly military calibers. And the greatest beneficiary of all, after the American shooters, has been the small sporting goods retailer or gunsmith who has increased his service work as a result of his accessory sales.

Surplus military firearms have been branded in other testimony as dangerous, junk, harmful to the domestic economy, without redeeming sporting value, and so forth. So-called antidumping attempts at curtailing the import of these surplus military firearms have been made often in the past, and I do not believe that the arguments which failed before have any more relevance now. Insofar as S. 1592 would provide increased Federal scrutiny and regulation of strictly military weapons and "destructive devices," would promote more effective scrutiny of Federal licensees, would make it unlawful to deliver or transport stolen firearms, I heartily concur with its intent. But in the loose and frequent delegation of authority to the Secretary of the Treasury, in the attempt to eliminate all mail-order sales of firearms, and in the curtailment of surplus military small arms imports I find objections which make S. 1592 completely unacceptable. I am in favor of putting the onus on the criminal instead of his instrument, and believe that by developing a sound affidavit system the beneficial effects anticipated to reduce crime can be achieved without the serious drawbacks of S. 1592.

STATEMENT BY ALAN S. KRUG, NATURAL RESOURCES ECONOMIST,
UNIVERSITY PARK, PA.

Reference is first made to section 1(4)-definition of "destructive device"weapons with a barrel of one-half inch or more in diameter would include legitimate cartridge sporting rifles of such calibers as .50-70 Winchester, .500 Jeffrey Magnum Nitro Express, .505 Gibbs Rimless Nitro Express, .577 Nitro Express, .600 Nitro Express, and others. Some provision should be made in the bill for the exclusion of these firearms from the "destructive device" category. In regard to section 2-unlawful acts the following should be considered when evaluating any proposed prohibition of the sale of firearms by mail:

(1) Millions of Americans do not have anything like convenient access to a firearms dealer. To prohibit mail-order sales of firearms to these individuals would indeed be placing severe and unreasonable restrictions upon them. This situation would become all the more acute when the appalling, exorbitant license fees proposed in this bill drive many legitimate firearms dealers and gunsmiths out of business.

(2) Dealers only carry certain lines of firearms. Often, a particular firearm that is wanted must be ordered by mail, as no local dealer is able to supply it.

(3) Many handguns used in competitive target shooting are custom built, are not available from local firearms dealers, and can be obtained only by mail order from the gunsmith who manufactures them. The same situation exists with respect to many custom-built sporting rifles and shotguns.

(4) Prohibition of mail-order sales of firearms would give local dealers unfair bargaining advantage of customers in sales transactions. Fair competition would be eliminated, as would freedom of choice.

(5) Firearms manufacturers having the available resources to effect wide distribution of their products to local dealers would have unfair advantage over smaller firms with more limited resources.

(6) Prohibition of firearm sales by mail order would result in an inefficient utilization of resources and a financial loss to many individual firearms owners and dealers. There are hundreds of different types of firearms, each suited to a particular use in a particular time and place. In many instances, efficient distribution of preowned firearms can only be obtained through the mails. Mail order restrictions would immobilize these resources and cause a depreciation in value when a particular (specialized) firearm had to be sold in a geographic area where its potential use was limited in scope.

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; (7) The right to engage in interstate commerce can be considered a basic right of all American citizens; the arbitrary denial of this right to a select group-i.e., firearms owners, is not to be taken lightly. The same statement can be made in regard to use of the U.S. mails.

(8) Professional conservationists are in unanimous agreement that enactment of this legislation would have a highly detrimental effect on the conservation movement in this country. The ownership of firearms by legitimate persons would be discouraged, and this would be reflected in a substantial decrease in the money's available for conservation programs, as well as in a decrease in the sociological and political forces supporting the conservation movement. Any initial decrease in these categories would be increased through an induced multiplier effect much like that embodied in the Keynes induced multiplier concept. The ultimate effect on conservation could be catastrophic. The importance of sporting firearms and hunting in the field of conservation and natural resources management cannot be overestimated.

In subsection (3), conditions under which firearms can be shipped for service to manufacturers, dealers, and gunsmiths should be spelled out, and not left to the discretion of the Secretary. This is far too important a matter to be left to administrative decision.

Longtime experience in dealing with sportsmen and others who use firearms for recreational purposes leads me to believe that the ages of 21 years and 18 years as prescribed in subsection (5) are unnecessarily restrictive. The ages of 18 years for the purchase of a pistol and 16 years for the purchase of a rifle or shotgun are believed to be more appropriate.

Subsection (5) (b) (3) shuts off completely the supply of custom-built handguns to target shooters living in any other State than the one where the custom gun is manufactured.

The fees set by this bill in section 3, subsections (1), (2), and (3) are wholly unreasonable and can only be considered as punitive. There seems to be a concept embodied in this section of the bill to the effect that only the large businesses which are capable of affording a very high overhead can be legitimate dealers. This shows a gross ignorance of the true situation as it pertains in the United States. Many of our finest gunsmiths are part time, and a license fee such as that prescribed in section 3 would put many of them out of business. Many legitimate firearms dealers are also part-time enterprisers, and could ill afford such fantastic license fees. In general, there is very little money to be made from a gunshop; most gunwork and gun dealing in this country is a labor of love, not a get-rich-quick scheme. A high license fee would put many honest persons out of business, and would hardly discourage the illegitimate operator who stood to make a considerable profit from his activities (assuming that this is the intent of the high license fees).

Referring to section 3(a) (2) (e), “* ** or is, by reason of his business experience, financial standing, or trade connections, not likely to maintain operations in compliance with this Act; *** "is so incredible as to defy the imagination. This means absolutely nothing and at the same time means absolutely everything. The mere fact that such a provision is contained in this bill leads one to believe that the framers of this legislation have given very little thought to what its ultimate results might be.

Section 3 (e) (3), “* * * and that the importation or bringing in of the firearm would not be contrary to the public interest;" is in the same category as the above.

In section 3(f) the provision for the necessity of a sworn statement “executed by the principal law enforcement officer of the locality wherein the purchaser or person to whom it is otherwise disposed of resides, ***" sets a dangerous precedent in that it gives the local law-enforcement authority the power to prohibit an otherwise lawful transaction for no reason whatsoever.

S. 1592 does not seek to regulate the interstate shipment of firearms in such a way as to eliminate whatever present-day abuses may exist. Instead, S. 1592 attacks the rights and privileges of honest citizens, and at the same time, gives very little promise of accomplishing much of anything.

A more reasonable approach to the problem at hand is desirable. The KingHickenlooper bill represents such an approach. It would regulate the interstate shipment of firearms in such a manner as to correct existing abuses, but would not unduly infringe on the rights of the honest, law-abiding firearms owner and dealer. It would not drive legitimate dealers and gunsmiths out of business. It would not harm the conservation movement.