eight mechanics were well occupied tuning exotic vehicles, Lichtman staked off a back corner of the shop and built himself another telescope. The result was a half-ton spyglass he didn't know what to do with. He placed an ad in a scientific journal and sold it within a week. By the time he had built and sold several more, he had become aware of an extensive market in this line. In 1967 he sold the garage and continued with optics exclusively. In 1968 he was made an irresistable offer for the telescope business, and saw his bank account soar to the point that a year off looked feasible. Mr. CONYERS. Thank you very much. We turn now to Mr. McClory. Mr. McCLORY. Thank you, Mr. Chairman. I have looked at the statements and listened to the testimony, and I have no questions. Mr. CONYERS. Mr. Ruger, do you have any concluding observations? We appreciate your cooperation. Mr RUGER. No, Mr. Chairman. I think that I have said the things that have crossed my mind most powerfully. And I think actually that the committee has accumulated an immense amount of points of view. And I see that many of the ideas and arguments which I thought were my particular property have been brought out by others. Mr. CONYERS. Thank you very much. Mr. Lichtman, your observations are very interesting and unique in comparison to those other manufacturers. We are grateful to all of you, and hope that you will continue to give us the benefit of your suggestions. Thank you very much for coming. The subcommittee is adjourned until further notice. [Whereupon, at 1:10 p.m., the subcommittee recessed subject to the call of the Chair.] FIREARMS LEGISLATION THURSDAY, JULY 24, 1975 HOUSE OF REPRESENTATIVES, This subcommittee met, pursuant to notice, at 10:15 a.m., 2237, Rayburn House Office Building, Hon. John Conyers, Jr. [chairman of the subcommittee], presiding. Present: Representatives Conyers, Mann, Thornton, McClory, and Wiggins. Also present: Maurice A. Barboza, counsel; and Constantine J. Gekas, associate counsel. Mr. CONYERS. The subcommittee will come to order. We will continue hearings on firearm legislation. I am very pleased to have as our witness today the Assistant Secretary of the Treasury, Mr. David R. Macdonald. We have a biographical sketch of Mr. Macdonald and I would like to welcome him and Mr. Rex Davis and the other members of their staffs who have been here before. Mr. Macdonald is the principal adviser to the Secretary of the Treasury with regard to policy guidelines on all Treasury law enforcement activities, which of course include the Bureau of Alcohol, Tobacco, and Firearms, as well as Secret Service, Customs, and a number of other offices within the Treasury Department. Mr. Macdonald serves as the U.S. representative to the International Criminal Police Communications Organization. We welcome you, Mr. Macdonald, and we appreciate your detailed staternent which without objection will be entered into the record at this point. That will enable you to summarize and make any additional comments you might choose. [The prepared statement of David R. Macdonald follows:] STATEMENT OF HON. DAVID R. MACDONALD, ASSISTANT SECRETARY OF THE Mr. Chairman, I am David P. Macdonald, Assistant Secretary for Enforcement, Operations, and Tariff Affairs, Treasury Department. I am pleased to be here today to discuss with you the President's legislative program regarding firearms regulation. Accompanying me are James B. Clawson, Deputy Assistant Secretary for Operations; James J. Featherstone, Deputy Assistant Secretary for Enforcement; Rex D. Davis, Director, Bureau of Alcohol, Tobacco and Firearms; and Marvin J. Dessler, Chief Counsel, Bureau of Alcohol, Tobacco and Firearms. As you know, in his recent Congressional message on crime, the President emphasized the need for more effective firearms legislation and enumerated specific areas wherein the need for remedial legislation is most urgent. As the President has indicated, the increase in violent crime in America has grown to such proportions as to become a matter of foremost concern in the minds of most law-abiding citizens. On the one hand, the President feels that (2693) legislation in this area is not invariably a royal road to the moral goal of a non-violent society. On the other hand, even though many people in this country feel that any legislation in this area is a pernicious invasion of their rights, some imaginative legislation should be tried which may bend us away from our headlong rush to increased violent crime. We all must determine how far legal processes are adapted to accomplish the objective of reduction in firearms violence that all of us seek to secure. Legislation in the area of firearms control, as elsewhere, must be a wise blend of accepted principle and courageous experiment. In this respect, Mr. Chairman, I would like to compliment you, Mr. McClory and the Committee for the truly open-minded spirit in which this Committee has held hearings over the last several months on this most difficult and controversial subject. The light generated by your hearings has substantially exceeded the heat. It is undisputed that the easy availability of firearms, especially handguns, does contribute to the frequency of violent crimes, particularly between family members and friends. Furthermore, the Treasury Department has observed that the staggering increase in crime that has occurred in recent years has also engendered a "race to arms" on the part of frightened citizens that all too frequently results in tragic consequences. Accordingly, the proposed legislation contains a number of diverse but interrelated provisions which are intended to effectuate a single objective, to restrict and deter the misuse of firearms. In furtherence of this goal and in specific response to the President's objectives as expressed in his June 19, 1975, crime message, the proposed legislation includes provisions addressing the following critical areas: (1) The need for sufficient licensing standards to insure that Federal licenses will only be issued to responsible, law-abiding persons who actually intend to conduct a bona fide business; (2) The need for more comprehensive controls upon the sale of handguns by Federal licensees in order to reduce the number of handguns sold to individuals in violation of Federal, State and local laws; (3) The need for controls upon the importation of parts for and the domestic manufacture and assembly and sale of small, lightweight, easily concealable, and inexpensive handguns commonly known as "Saturday Night Specials"; (4) The need for an effective statutory means to prosecute and punish felons and other dangerous persons for the possession of firearms; (5) The need for a mandatory sentencing provision that will apply, not only to recidivists, but also to first offenders who carry or use a firearm in the commission of a Federal felony; (6) The need for effective controls upon the multiple sale and purchase of handguns; and (7) The need for statutory provisions prohibiting the sale or transfer of firearms, especially handguns, by non-licensees to persons who are prohibited from purchasing, receiving, or possessing such firearm by Federal, State or local law. The Treasury Department has consistently maintained the position that the underpinnings of effective firearms regulation must be a body of responsible and cooperative Federal firearms licensees. The most critical point of contact in the implementation of Federal, State and local firearms regulations is the firearms dealer. For in the majority of cases it is he who must assure that firearms sales are in compliance with the law. In short, the Federal licensee can become a critical asset or an unmanageable liability in our quest for responsible firearms regulations. Indeed, the legislative history underlying the licensing provisions of the Gun Control Act of 1968 reflects a major Congressional concern that licenses would be issued only to responsible, law-abiding persons actually engaged in or intending to engage in business as importers, manufacturers, or dealers in firearms or ammunition. Unfortunatey, it has become apparent in recent years that Congressional aspirations in this regard have been frustrated by a proliferation of applications from individuals who never intended to engage in a bona fide firearms business, but who merely desire a Federal license in order to obtain firearms or ammunition for their personal use at wholesale prices or to receive firearms in interstate commerce for that purpose. Frequently, such individuals lack both the business experience and financial capacity needed to conduct a business. In any event, the number of licensees is beyond ATF's ability to audit on any reasonably recurring basis. Present Federal law requires every applicant for a Federal firearms dealers license who pays his $10 annual fee to be issued a license within 45 days unless he is under indictment for a felony, convicted of a felony, a fugitive from justice or a drug user or addict. Consequently, the Bureau of Alcohol, Tobacco and Firearms has been compelled to issue literally thousands of licenses to individuals, not all of whom engage in the business of dealing in firearms full time. Under the existing law, more than 160.000 individuals or entities are currently licensed to conduct firearms businesses in the United States. Since the passage of the 1968 Act, this figure has increased yearly. Of this number, it is estimated that less than 30 percent actually conduct a bona fide firearms business. Due to the sheer magnitude of the number of licensees, it is impossible for ATF to monitor each licensee and it is becoming increasingly difficult to maintain a meaningful and effective compliance program based upon even random or periodic inspections. Accordingly, the Administration proposes amendments to the Gun Control Act to tighten existing licensing standards in order to reduce the number of Federal licensees and discourage what might be called "nominal" applications. First, we propose amending the existing licensing standards by including a provision which would permit the Treasury to inquire into each applicant's business experience, financial standing, and trade connections in order to determine whether the applicant is likely to commence the proposed business within a reasonable period of time and maintain such business in conformity with Federal, State and relevant local law. A similar provision relating to an applicant's likelihood of complying with Federal law has existed for a number of years in the issuance of liquor permits to persons engaged in liquor businesses under the Federal Alcohol Administration Act. The provision has functioned fairly and effectively in that context and has been reasonably interpreted by the courts. A second proposal is to amend the Act to create special license categories for ammunition dealers, gunsmiths and dealers in long guns only. Experience has shown that a large portion of existing licensees (perhaps 20 to 30 percent) are engaged almost exclusively in selling ammunition. In fact, many of these licensees are small "mom and pop" stores which carry ammunition only as a convenience to their customers. Under existing law, separate categories do not exist for these persons and they receive the same dealer's license that is issued to firearms dealers. The establishment of these special licenses with a gradated fee schedule would restrict those persons to engaging in their limited activities. Hence, neither a gunsmith nor an ammunition retailer could lawfully sell firearms, and a long gun dealer could not sell handguns, but a firearms dealer would be permitted to sell all firearms, ammunition and to repair firearms. The new licensing structure would facilitate a more efficient and economical assignment of inspection priorities since these "limited" licensees would not require the same scrutiny as would unlimited firearms dealers. Among the reasons for the increase in license fees for pawnbrokers, it should be noted that one facet of ATF's "Project Identification," which involved the tracing of firearms used in crime in eight major urban areas, reflected that 30 to 35 percent of the handguns used in crime had passed through pawnshops. We would also apply the handgun-long gun fee distinction to the licensing of manufacturers and importers of firearms. We also find that there is a need for a greater range of penalties than presently exists with which to deal with firearms dealers who violate the laws. In this connection, we believe that ATF should have authority to suspend firearms licenses and assess civil fines. Under existing law, licenses are subject only to revocation if the holder has violated any provision of law or regulation. The only alternative to administrative revocation is the criminal prosecution of the licensee for violations that frequently are only inadvertent. While any violation of the Gun Control laws may be deemed to be serious, some are less serious than others and do not warrant the institution of criminal or revocation proceedings. Even inadvertent violations, however, may warrant administrative action less severe than license revocation. Turning now to the matter of handguns, the problem engendered by the proliferation of handguns in America's cities has become self-evident and requires no real elaboration. Suffice it to say that recent estimates place the number of handguns in America at about 40 million while deaths by handguns have increased almost 50 percent in the last decade. The President has expressed |