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Mr. BATTIN. Back in 1958 you testified before the House Foreign Affairs Committee, at which time you said, and I quote:

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; and fourth the sale of surplus military firearms by the U.S. Government within the United States.

At that time I think generally you were talking about what was affecting the firearms industry within the United States.

Mr. HADLEY. Yes. I think there were four different categories that might have affected it. Is that what this says?

Mr. BATTIN. Yes. These were the four areas that were evidently causing some problem as far as the sale of U.S. made weapons in the United States. You were getting competition from the U.S. Government in the sale of surplus U.S. weapons and from foreign powers that declared surplus weapons and that had become obsolete because of new developments in arms.

Mr. HADLEY. Yes.

Mr. BATTIN. We are talking about a bill dealing with the prevention of crime and the position of the institute historically has been, it would seem, is against the importation of weapons, which I think would probably more properly fit back in 1962 when we had the Trade Expansion Act before the committee.

r. HADLEY. I would say at that time our concern was primarily an economic one. We didn't anticipate all this crime business or what was going to happen that I described a few minutes ago.

Currently, as I say, it appears that the economic aspects are not deemed nearly as important as they were at that time and the crime ones certainly appear to us significant, where they weren't thought of at that time.

Mr. BATTIN. You were present in the room when I directed some questions to the previous witness dealing with people beginning a hobby and becoming interested in shooting for the first time, target practice, hunting, and what not.

Mr. HADLEY. Yes,

Mr. BATTIN. There was an article in the Wall Street Journal on August 5, 1964, that indicated that the sale of U.S.-made weapons had increased substantially in 1961 over the previous comparable period in 1963, which was in the last half of the year.

Do you attribute any of this to the interest that people have gained through buying first an inexpensive weapon which might be imported military surplus and later going up into the Cadillac of sporting goods which are made in the United States?

Mr. HADLEY. I have no means of answering that question. There are various ups and downs in volume. I don't know. I agree with you that there is a tendency for people with hobbies to upgrade them and that in dollar sales would tend to increase. I think that is valid and we hope it will continue to an increasing strength.

Mr. BATTIN. I would agree with you.

Mr. Hadley. Those of us who are in the industry, but as to the answer to that specifice thing I have no idea. I can't say.

Mr. Bartin. The reason I asked, and certainly a good example, is Eastman Kodak. You can buy a Brownie camera for little or nothing, but soon a person becomes interested in taking pictures and the first thing you know he moves up and not only has a fine camera in his hands, but also starts taking moving pictures and becomes quite enthusiastic.

I am sure you have been to people's homes to see their pictures, I sure have.

Mr. Hadley. It certainly is a splendid example of that kind of thing. I wish the gun business might do as well as Kodak did on that kind of thing.

Mr. Battis. Don't you think that is happening? The people of this country have more free time, and with a great emphasis being placed on recreation. With travel becoming less of a problem people who live in a congested area can go on a vacation. They participate in outdoor sports, such as hunting, and that is going to provide the incentive and certainly the stimulus for the industries that you represent ot become more involved in providing fine, accurate, and safe weapons.

Mr. HADLEY. I agree with you.
Mr. BATTIN. I have no further questions.
Mr. WATTS. Is that all? Any questions?
Mr. BROYHILL. Mr. Chairman, one quick observation here.

Mr. Hadley, I would like to commend you for a very interesting and I think a very important statement that you made on page 7 when you pointed out that the Treasury Department had gone to great lengths to point out that the restrictions on the out-of-State and over-thecounter purchases would not be applicable to sporting kinds of firearms.

Certainly if they can identify them for purposes of regulation and put in a separate category the over-the-counter out-of-State sales, there is no reason why they couldn't be equally identified as a separate type of weapon for mail-order purchases.

I think that is a very, very interesting statement you made. I would be very interested in finding out what the Treasury Department's answer to that would be, the acknowledgment that the sportingtype firearms should be treated separately insofar as over-the-counter purchases out of the State.

That is one of the problems that the Treasury Department had talked out, to close that loophole, you state yourself you would like to have it closed and exempt the sporting-type weapons from it.

Mr. HADLEY. Yes, sir.
Mr. BATTIN. Mr. Chairman.
Mr. WATTS. Yes, sir.

Mr. BATTin. I have had a little bit of difficulty in understanding the position of the Treasury Department and maybe you could shed some light on the subject because undoubtedly you have had an opportunity to talk with some of the people in the Treasury Department. Their testimony before the Senate committee indicated strong support for the Dodd bill.

Yet when they came to this committee, beginning a week ago yesterday, one of the first things that happened was a suggestion, and later the production of a number of amendments trying to meet every objection that seemed to come forth on the first day of the hearing. I am curious as to whether or not this isn't just, for lack of a better defini

tion, "foot-in-the-door legislation" and the administration will take all amendemnts offered in the House,

As you know, the Senate passes one bill and the House passes another and generally we go into conference and the members of this committee who aren't on the conference committee don't have any opportunity to go in and state their views or again argue their position. We could come out with a bill that would look like the Dodd bill.

I am just wondering whether or not the institute that you represent had an opportunity to consult with the Treasury Department about the amendments that have been suggested to the bill that is presently before this committee.

Mr. HADLEY. I am advised that we did not, but what we would hope would be that some of our testimony given in the Senate committee was so significant that it might have affected some of those who were interested in the bill, like Treasury.

Mr. BATTIN. Thank you.
Mr. Watts. Any questions?

Mr. JENNINGS. Mr. Hadley, I share your view here that $100 is entirely too high for a dealer's license. I share the administration's view that $1 is not adequate. Yet I see that you recommended a $10 license fee for dealers. Is that going to be sufficient to keep the average person from getting a dealer's license just for the purpose of purchasing one or two guns for his own use or for his friend's use?

Is that really going to set up a dealer's standard? Is that license fee large enough to set up a bona fide dealer, or is it just going to be used to circumvent the law.

Mr. HADLEY. We refer to the large number of them and to the $10 business. The $10 wasn't generated by us. It was proposed I think somewhere else and we approved of that as being sufficiently far away from $100, but the point that we make is that $10 would be all right and would permit the Government to check up and see whether all these people were dealers in the proper sense of the word or whether there are some that perhaps shouldn't be accorded a license as a dealer.

Mr. JENNINGS. By the same token and using the same reasoning would you think $25 would be adequate?

Mr. "HADLEY. We say there are 40,000 dealers. At $10 apiece, $400,000 would enable an adequate checkup. We certainly don't favor the higher license fees because we are so keenly aware of how many small places there are in the country that couldn't even make a profit that would justify one of the higher fees, that is, for convenience.

Mr. JENNINGS. You mean they would have to sell more than one of two guns in order to pay for the license?

Mr. HADLEY. I don't know what the limits are for the license.

Mr. JENNINGS. How many guns would they have to sell normally in order to pay for a $10 license, profit on how many guns?

Mr. HADLEY. I would only be guessing at that, but it certainly would have to be several if they were inexpensive guns such as might be handled by the small dealer.

Mr. JENNINGS. Several. What do you mean? That they would have to sell and make $1 per gun to cover their license fee?

Mr. HADLEY. In that event they would have to sell more to want to be in the business rather than to break even. If they made a dollar profit obviously they would have to sell 10 of them.

Mr. JENNINGS. I quite well agree with you as far as the legitimate dealer is concerned, but my question is, Is this going to prevent a person from acquiring a dealer's license just for the purpose of buying one gün or a couple of guns which will really clutter up the records and not be fair to the legitimate dealer?

Mr. HADLEY. It is our opinion that this $400,000 which would be collected could be used by the Treasury Department to see in part that very thing, whether this is a really licensed dealer, or whether it is somebody who just wants to sidestep the business and is willing to pay the $10.

Mr. JENNINGS. What can they do about it if they find that it isn't? If they find that I bought a dealer's license just for the sole purpose of buying two guns and they use this $400,000 for the purpose of checking on me and they find that that is all I used it for, what advantage is it?

Mr. Hadley. It may be in the legislation there should be some statement that one must be a legitimate dealer of some significant proportion. I wouldn't attempt to say what it would be, but it might be defined. In fact, the Secretary of the Treasury Department is apparently given quite a lot of latitude in this bill. Maybe he could define it, that there must be a place of business, that a person must sell

Mr. JENNINGS. Would you recommend that we broaden the authority that we are going to give the Secretary of the Treasury in light of your nine points here?

Mr. HADLEY. No. Our position is rather the reverse, but I am merely observing

Mr. JENNINGS. I thought it was. Mr. HADLEY (continuing). That perhaps it is now within his purview.

Mr. JENNINGS. I see. All right. Thank you, Mr. Chairman.
Mr. Watts. Thank you, Mr. Hadley.
Mr. BROYHILL. Mr. Chairman, just one more question, very quickly.
Mr. Watts. All right.

Mr. BROYHILL. Just to elaborate on what Mr. Jennings said, is the actual net profit-you said so in your statement, but I want to make certain this is a correct figure-3 percent on the sporting-type gun?

Mr. HADLEY. No, I wouldn't dare to make a statement like that. In the Senate Committee hearing we were talking about this point and we estimated that the dealer might make 5 percent after taxes and expenses and so on, and then there turned up testimony by the National Retail Hardware Association, 1964 figures, which showed that they reported for their membership a net of 1.65 percent.

Well, now, we put in 3 percent here because it didn't seem logical to attempt to hug up to this average figure, which includes God knows what.

On the other hand, that was so low ve thought that we should revise our estimate from 5 percent down to 3 percent.

Mr. BROYHILL. It is an amazingly low percentage of profit. Mr. HADLEY. It looks so to me, too. Mr. BROYHILL. Thank you. Mr. WATTS. Thank you, Mr. Hadley. The committee will be adjourned until tomorrow morning at 10 o'clock.

(Whereupon, at 12:07 p.m., the committee recessed to reconvene at 10 a.m., Wednesday, July 21, 1965.)

PROPOSED AMENDMENTS TO FIREARMS ACTS

JULY 21, 1965

HOUSE OF REPRESENTATIVES,
COMMITTEE ON WAYS AND MEANS,

Washington, D.C. The committee met at 10 a.m., pursuant to notice, in the committee room, Longworth House Office Building, Hon. John C. Watts presiding.

Mr. WATTS. The committee will come to order.

The first witness is our honorable colleague, John Saylor. We are delighted to have you. You may proceed as you desire.

STATEMENT OF HON. JOHN P. SAYLOR, A REPRESENTATIVE IN

CONGRESS FROM THE STATE OF PENNSYLVANIA

Mr. SAYLOR. Thank you, Mr. Chairman.

Members of the committee, I appear here on a subject that is very close to me, because all of my life I have been associated with a family that has owned and used guns. One of my earliest recollections of my father and of my grandfather is watching them at a target shoot when I was a very small boy, and as soon as I was old enough or big enough to carry a small gun, I was taught by my father and my grandfather how to use it. As near as I know, never in my life have I used

any

of the weapons that I own for any illegal purpose. Therefore when I read that the Treasury Department, and the Attorney General, and other groups in this country are concerned about the use of weapons and trying to place limitations upon the ownership of weapons, the registration of weapons, I become concerned.

We all know that a great deal of the present excitement about guns has come from a very unfortunate incident that occurred in the State of Texas when our late beloved President was assassinated. There was a great to-do about where that

gun

came from. I might say that having been brought up with guns it is rather startling to find that no fingerprints have yet been discovered on that gun of anybody.

Mr. Chairman, to show you the panic that has occurred, the city of Philadelphia in my State has panícked. The Council of the City of Philadelphia have passed an ordinance that it is illegal to even go through the city of Philadelphia in possession of any type of gun. This is hard to believe, but legislation originated in Philadelphia requires that all sporting arms purchased, transferred, or brought into the city, including rifles and shotguns, may not legally be possessed in the county without first presenting the owner's name, his address,

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