throughout the United States for preventing the purchasing of the specified firearms by persons under such ages. The procuring of firearms by juveniles (often without the knowledge or consent of their parents or guardians) has become a matter of national concern. The tragic consequences of this situation has been brought out in the proceeding of the Subcommittee to Investigate Juvenile Delinquency of the Committee on the Judiciary of the Senate.

The provisions of the subsection prohibiting licensees under the act from selling a firearm (other than a shotgun or rifle) to an unlicensed individual who is a resident of a State, other than that in which the importer's, manufacturer's, or dealer's place of business is located, is intended to deal with the very serious problem of individuals going across State lines to procure firearms which they could not lawfully procure or possess in their own State and without the knowledge of their local authorities. The hearings before the Subcommittee To Investigate Juvenile Delinquency of the Committee on the Judiciary of the Senate demonstrated the ease with which residents of a particular State, which has laws regulating the purchase of firearms, can circumvent such laws by procuring a firearm in a neighboring jurisdiction which has no such controls on the purchase of firearms.

Paragraph (4) of the subsection would make it unlawful for any Federally licensed importer, manufacturer, or dealer to sell or otherwise dispose of any firearm to any person who, by reason of State or local law, regulation, or ordinance, applicable to the place of sale or other disposition, may not lawfully receive or possess such firearm.

The conditions imposed by this subsection on the operations of persons licensed under the act are deemed to be reasonable conditions on the privilege granted to them, and necessary to effective control of interstate and foreign commerce in firearms, and to protect the public welfare.

Subsection (c)

Subsection (c) of section 2 of the bill is a new provision which, like subsection (b), deals with the activities of licensed importers, licensed manufacturers, and licensed dealers. This subsection would make it unlawful for any such importer, manufacturer, or dealer to sell or otherwise dispose of any firearm or ammunition to any person (other than a licensee operating under the provisions of secs. 3(d) or 6) knowing, or having reasonable cause to believe, that such person is under indictment or has been convicted in any court of the United States, or of a State (as defined in par. (2) of sec. 1) or possession, of a crime punishable by imprisonment for a term exceeding one year, or who is a fugitive from justice. In other words, licensees would be prohibited from knowingly disposing of firearms or ammunition to felons, fugitives from justice, or persons under indictment for a felony. This subsection would also make it unlawful for such importer, manufacturer, or dealer to ship or transport any firearm in interstate or foreign commerce to any person who may not lawfully receive such firearm under the provisions of subsection (a) of this section.

Subsection (d)

Subsection 2(d) of the bill is existing law (15 U.S.C. 902(e)) except that the words "in any court" have been inserted to conform the language to the language of subsection (e).

Subsection (e)

Subsection 2(e) of the bill is a restatement of existing law (15 U.S.C. 902(f)) revised to include persons under indictment. The omission of these persons from existing law appears to have been an inadvertent omission since such persons are, under existing law (15 U.S.C. 902(e)), prohibited from shipping or transporting firearms in interstate or foreign commerce. Also, the presumption contained in existing law has been eliminated, since it was declared unconstitutional by the Supreme Court in Tot v. United States, 319 U.S. 463.

Subsection (f)

Subsection (f) of section 2 as contained in the bill is a new provision which would make it unlawful for any person (including a licensee under the act) knowingly to deposit, or cause to be deposited for mailing, or delivery by mail, or knowingly to deliver, or cause to be delivered, to any common or contract carrier for transportation or shipment in interstate or foreign commerce, any package or other container in which there is any firearm, without written

notice to the Postmaster General or his delegate or to the carrier (as the case may be) that a firearm is being transported or shipped. This provision is correlated to the provisions of section 2(g) of the act as contained in the bill which in general prohibits carriers from delivering, or causing to be delivered, in interstate or foreign commerce, any firearm to any person who does not exhibit or produce evidence of a license obtained under section 3 of the act. Further, the testimony before the Subcommittee To Investigate Juvenile Delinquency of the Committee on the Judiciary of the Senate disclosed the existence of a practice of surreptitiously shipping firearms, without notice or disclosure, to circumvent requirements of Federal or State law.

Subsection (g)

Subsection 2(g) of the act as contained in the bill is a new provision which would in general make it unlawful for any common or contract carrier to deliver, or cause to be delivered, in interstate or foreign commerce, any firearm to any person who does not exhibit or produce evidence of a license obtained under section 3 of the act. As noted in the discussion of subsection 2(f), any person who delivers, or causes to be delivered to the common or contract carrier, any package or other container in which there is a firearm, is required to give written notice to the carrier that a firearm is being transported or shipped.

This provision is also correlated to the provisions of section 2(a) of the act as contained in the bill, and is intended to aid in effectuating the provisions of that subsection which are intended to channel interstate or foreign commerce in firearms to persons licensed under the act.

Subsection (h)

Subsection (h) of section 2 as contained in the bill is existing law (15 U.S.C. 902(g)) and relates to the transportation or shipment of stolen firearms.

Subsection (i)

Subsection 2(i) as contained in the bill is a restatement of existing law (15 U.S.C. 902 (h)). The language has been revised to correspond with other comparable provisions of Federal law pertaining to the receipt or sale of stolen property "moving as, or which is a part of, or which constitutes interstate or foreign commerce," (see 18 U.S.C. 2313 relating to sale or receipt of stolen vehicles). This change will make it clear that the provisions apply to stolen firearms or ammunition transported in interstate or foreign commerce, after having been stolen, as well as to firearms and ammunition stolen in the course of movement in interstate or foreign commerce.

Subsection (j)

Subsection 2(j) as contained in the bill is a restatement of existing law (15 U.S.C. 902 (i)) relating to firearms from which the manufacturer's serial number has been removed, obliterated or altered. The restatement makes applicable the provisions of the subsection to an importer's serial number, as well as the manufacturer's, since importers and manufacturers are separately classified under the provisions of the bill. The restatement also deletes the words "and the possession of any such firearm shall be presumptive evidence that such firearm was being transported, shipped, or received, as the case may be, by the possessor in violation of this act" since the presumption is meaningless in view of the decision of the Supreme Court in Tot v. United States, 319 U.S. 463. Subsection (k)

Subsection (k) of section 2 of the act as contained in the bill is a new provision which would make it unlawful for any person to import or bring into the United States, or any possession thereof, any firearm in violation of the provisions of this act or to import or bring into the United States or any possession thereof any ammunition for a destructive device. This provision is correlated to the provisions relating to importation of firearms contained in section 3(e).

Subsection (1)

Subsection (1) of section 2 of the act as contained in the bill is a new provision which would make it unlawful for any person to knowingly receive any firearm or ammunition which has been imported or brought into the United States, or any possession thereof, in violation of the provisions of this act. This subsection also is correlated to the provisions of section 3 (e) of the act relating to importation.

Section 3 of the bill

Section 3 of the bill would amend section 3 of the Federal Firearms Act (15 U.S.C. 903) which relates to licensing of importers, manufacturers, and dealers, and to recordkeeping by licensees.

Subsection (a)

Subsection (a) of section 3 of the act as contained in the bill is a restatement and revision of existing law (15 U.S.C. 903 (a)).

Under existing law, an "importer" is required to obtain a license as a "manufacturer." The bill provides a separate classification for importers, and under subsection (a) an importer would be required to obtain a license as such. Under existing law, the applicant, if a manufacturer or importer, paid a fee of $25 per annum, and, if a dealer, a fee of $1 per annum. These fees are completely unrealistic and, in the case of dealers, represent only a fraction of the cost of processing an application and issuing a license. Further, the information presented at the public hearings (held in 1963 by the Subcommittee to Investigate Juvenile Delinquency of the Judiciary Committee of the Senate, and by the Commerce Committee of the Senate in 1963 and 1964 on S. 1975, 88th Cong., 1st sess.) strongly indicated that many of the persons holding licenses as dealers under the Federal Firearms Act were not bona fidely engaged in business as such, but had, due to the nominal license fees, obtained the licenses for their own personal reasons (e.g., to obtain a discount on purchase of firearms, or to ship, or receive concealable weapons through the mails, or to circumvent State or local requirements).

Under the provision of subsection (a) of section 3 of the act as contained in the bill the license fees would be increased to a figure which would make it very unlikely that any person not bona fidely engaged in business as an importer, manufacturer, or dealer would attempt to obtain a Federal Firearms Act license. The increased license fees would be such as to not only cover the cost of processing an application and issuing the license, but would defray the cost of conducting the investigation contemplated by the provisions of section 3 (c) of the act as contained in the bill to determine the qualifications of the applicant to engage in the business, and whether or not he would be likely to conduct his operations in compliance with the act.

A separate classification and higher fees are provided in the case of a manufacturer or importer of, or a dealer in, "destructive devices" as defined in section 1(4) of the act as contained in the bill. Since "destructive devices" are not ordinary articles of commerce, it is anticipated that very few such licenses will be issued. The purpose of this separate classification and higher fee with respect to such devices is to make more effective the stringent controls imposed under the bill with regard thereto.

A separate license with higher license fee is also provided for pawnbroker dealers. A "pawnbroker" is defined in section 1 of the bill. It may be noted that under the National Firearms Act (26 U.S.C. chap. 53) pawnbroker dealers are charged a higher rate of occupational tax than other dealers.

The language of the first sentence is intended to make it clear that no person shall engage in business as an importer of firearms or ammunition, or as a manufacturer of firearms or ammunition, or as a dealer in firearms or ammunition, until he has filed an application with, and received a license to do so from, the Secretary. In order to effectively regulate interstate and foreign commerce in firearms and ammunition, it is necessary that all persons engaging in these businesses be licensed. Similar provisions were upheld in Hanf v. United States, 235 F. 2d 710, cert. den. 352 U.S. 880, as reasonably necessary to effective control of interstate and foreign commerce under comparable conditions.

The provision that applicants shall be required to pay a fee for obtaining their license "for each place of business" is merely a clarification of existing law, since existing law is now so construed (see 26 CFR pt. 177.33).

Subsection (b)

Subsection (b) of section 3 as contained in the bill is a restatement and revision of the provisions of existing law (15 U.S.C. 903(b)). Existing law provides that upon payment of the prescribed fee the Secretary of the Treasury shall issue to such applicant a license which shall entitle the licensee to transport, ship, or receive firearms and ammunition in interstate or foreign commerce unless and until the license is suspended or revoked in accordance with the provisions of the act. It will be noted that there are no specific conditions on the issuance of a license other than the payment of the prescribed fee.

However,

in view of the proscriptions in section 2 of the act against the shipment, transportation, or receipt in interstate or foreign commerce of firearms or ammunition by a person who is a fugitive from justice, or who has been convicted of, or who is under indictment for, any offense punishable by imprisonment for a term exceeding 1 year, the act has consistently been construed as precluding the issuance of licenses to such persons since it would be illegal for them to engage in the transactions covered by the license. (See 26 CFR pt. 177.) The revision of section 3(b) makes it clear that the privileges granted to the licensee are not unlimited or unconditional but are subject to the provisions of this act and other applicable provisions of law, and also that the application for the license may be denied under the conidtions set forth in section 3 (c) of the act as contained in the bill.

Subsection (c)

Subsection (c) of section 3 of the act as contained in the bill is basically a new provision, except to the extent that it sets forth the construction of existing law to the effect that a license will not be issued to a person who is prohibited from transporting, shipping, or receiving firearms or ammunition in interstate or foreign commerce under the provisions of subsection (d) or (e) of section 2 of the act (i.e., a person who has been convicted of, or who is under indictment for, a felony, or who is a fugitive from justice).

The existing provisions of the Federal Firearms Act, regarding the issuance of licenses, represent an anomaly to the general practice with regard to the issuance of licenses or permits in that the act contains no standards for the issuance or denial of a license such as are contained in other comparable acts (see 26 U.S.C. 5271(c) and 5712, and 27 U.S.C. 204 (a) (2)).

Even though the act has no specific statutory standards, the courts would have held that there would have been an implied standard had the terms of the act provided any discretion to the Secretary with regard to the issuance of a license (see Ma-King Co., v. Blair, 271 U.S. 479, where the Supreme Court held that in the case of a statute which granted discretion, i.e., used the language “may issue" rather than "shall issue," that a license could be denied if there were reasonable grounds for believing that the applicant would not be likely to conduct his operations in conformity with Federal law).

Subsection (c) of section 3 of the act as contained in the bill eliminates the anomalous situation with respect to the licensing system contained in existing law and sets forth specific standards under which an application shall be disapproved and the license denied, after notice and opportunity for hearing.

The standards provided in subsection (c) are very similar to the standards provided in 26 U.S.C. section 5271 (c) (relating to permits to procure, deal in, or use specially denatured distilled spirits); 26 U.S.C. 5712 (relating to permits for manufacturers of tobacco products); and to 27 U.S.C 204 (relating to wholesale dealers in liquors, importers of liquors, etc.). It may be noted that the principal standard in all three of the statutes cited is the implied standard recognized by the Supreme Court in the Ma-King case (Ma-King v. Blair, 271 U.S. 479).

The hearing and appeal procedures provided by the Administrative Procedure Act (act of June 11, 1946, 5 U.S.C. 1001 et seq.) would, as in the case of the permits provided for in 26 U.S.C. sections 5271 and 5712, be applicable with respect to license proceedings under the Federal Firearms Act.

The provisions of paragraph (2) relating to individuals possessing, directly or indirectly, the power to direct or cause the direction of the management and policies of the corporation, partnership, or association, are necessary to preclude felons or other individuals who could not obtain a license as an individual from using a corporation or other business organization to conduct their operations. In the past, individuals convicted of a felony have formed corporations for the purpose of continuing their firearms operations.

The provisions of paragraph (5) would preclude the issurance of licenses to applicants who do not have, or do not intend to have or maintain, bona fide business premises for the conduct of the business. This provision will be a definite aid in limiting licensees under the Federal Firearms Act to persons bona fidely engaged in business, and assuring that there will be an appropriate place that is subject to proper inspection where the required records will be maintained. The information developed at the public hearings held by the Subcommittee To Investigate Juvenile Delinquency of the Judiciary Committee of the Senate disclosed a definite need for such a provision. It was shown that in some cases

importers or dealers maintained no regular place of business which could be found, and conducted their operations through post office boxes, mail drops, answering services, etc.

Subsection (d)

Subsection (d) of section 3 of the act as contained in the bill replaces the provisions of existing law contained in section 3 (c) of the act (15 U.S.C. 903 (c)) and reflects the construction of existing law as contained in current regulations (26 CFR 177).

The requirement of existing law, concerning the posting of a bond by a licensee convicted of a violation of the act in order to continue operations pending final disposition of the case on appeal, serves no useful purpose, and has been omitted. Further, the provisions of this subsection have been revised to simplify administration. Since the licensee is required to reapply each year for a license, the information on the application relating to his indictment and/or conviction will be adequate. Also, the license itself can, as at present, contain a warning that the licensee cannot continue operations once his conviction has become final (other than as provided in section 6).

As under existing law and regulations, a new license will not be issued to a person under indictment for, or who has been convicted of, an offense punishable by imprisonment for a term exceeding 1 year. However, a licensed importer, licensed manufacturer, or licensed dealer may continue operations pursuant to his existing license (provided that prior to the expiration of the term of the existing license timely application is made for a new license), during the term of such indictment and until any conviction pursuant to the indictment becomes final, whereupon he shall be subject to all provisions of this act and operations pursuant to such license shall be discontinued. If a bona fide application for relief is filed under section 6, operations may continue until such application is acted upon.

Subsection (e)

Subsection (e) of section 3 of the act as contained in the bill is a new provision designed to bring under control the flow of surplus military weapons and other firearms being imported or brought into the United States which are not particularly suitable for target shooting, hunting, or any other lawful sporting purpose. The interim report of the Committee on the Judiciary made by its Subcommittee To Investigate Juvenile Delinquency with respect to the "Interstate Traffice in Mail-Order Firearms" (S. Rept. 1340, 88th Cong., 2d sess.) made it clear that such firearms are a principal source of supply of juvenile delinquents and certain other criminal elements. This report also indicated that many of these firearms were in such poor condition, or of such poor workmanship, that their use would be hazardous.

The operations of certain importers of and dealers in such firearms has reflected a flagrant disregard of the public interest.

Under the provisions of the subsection, no person could import or bring firearms into the United States or a possession thereof, except upon authorization by the Secretary. Such authorization would not be issued under the provisions of this subsection unless it was established to the satisfaction of the Secretary that certain conditions designed to protect the public interest had been met.

These provisions would not hinder the importation of currently produced firearms of a type and quality generally recognized as particularly suitable for lawful sporting purposes, or the importation of antique or unserviceable firearms (not readily restorable to firing condition), imported or brought in as a curio or museum piece.

Subsection (f)

Section 3 (f) of the act as contained in the bill is a new provision relating to the sale or other disposition of destructive devices, machineguns, short-barreled shotguns, and short-barreled rifles by licensees to nonlicensees. This provision is imposed as a condition on the privilege granted the licensee to engage in interstate or foreign commerce with respect to such firearms. Since these are not ordinary articles of commerce, it is not expected that there will be any significant volume of transactions falling within the application of the subsection. However, it is deemed to be in the public interest to place adequate controls over the disposition of these firearms by licensees to nonlicensed persons.