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Author: John Ross
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Prohibition’s Ugly Legacy
March 12, 1974
(from “Unintended Consequences” by John Ross, Copyright © 1996 by Accurate Press. ISBN 1-888118-04-0. Pages 348-361)
Reprinted with permission.
A year after the 1933 repeal of Prohibition, Congress passed the National Firearms Act of 1934 and created a situation that was (and is) both unique and bizarre. The situation is unique because no other consumer good or manufactured product in the entire country is treated under the law in the same way that National Firearms Act firearms are treated. The situation is bizarre because under this law, two absolutely identical guns, consecutively produced within one minute of each other by the same manufacturer on the same assembly line, can fall into such drastically different legal categories that possession of one has the government’s blessing, while possession of the other (even by the same person) merits a ten-year prison sentence. As if this were not unusual enough, a 1968 amendment to the National Firearms Act now prohibits the owner of the “bad” weapon (whichever of the two guns it may be) from placing himself in compliance with federal law.
The National Firearms Act introduced a huge distortion into the free market for all guns which fell under its scope. The result is a three-tier pricing schedule in the market for firearms regulated by this obscure section of the U.S. Code, as well as several legal questions which, to date, have not yet been resolved.
This paper addresses a distortion in the free market caused by government intervention. It is not intended to be a political science treatise. However, in order to fully understand this distortion and “how we got here”, some history is in order. This is an unfamiliar area to most people, and it is quite possible that without a thorough explanation of the history behind the current law, the average person would refuse to believe our present situation.
HISTORY
The issue of owning militia-type arms to protect oneself and one’s freedoms was not controversial in the early days of our country’s history. It was taken for granted. All citizens of this country had this basic right. Prior to 1934, there were no federal laws regulating firearms ownership(1), and virtually no state laws, either. All prohibitions (and attendant punishment) focused on violent criminal actions and not possession of inanimate objects.
Two events changed this situation on a state level: The Emancipation Proclamation, and large-scale immigration. Many lawmakers didn’t like the idea of foreigners and former slaves having the same rights as whites. The especially disliked the idea of these “undesirables” being able to protect themselves and control their own destinies.
Legislators didn’t want blacks being able to defend their freedoms, either at the voting booth, or by having guns. Because the Second Amendment guaranteed the right to keep and bear arms, and the Fourteenth Amendment guaranteed equal protection under the law, legislative creativity was required.
Poll taxes and literacy tests solved the problem of blacks voting. Blocking Constitutionally-protected black possession of inanimate object required a slightly different strategy. One solution to the dilemma was to require permits to possess or carry arms(2). These permits could then be arbitrarily denied. Another answer was for a state to enact an outright prohibition on carrying weapons for self-protection(3). These outright prohibitions were then selectively enforced. The South Carolina legislature, perhaps pleased with the success of their poll tax, passed a law in 1875 prohibiting ownership of all firearms other than those manufactured by Colt or Winchester(4). Since these makes were much more expensive than all others, this law was a novel way to prevent poor people of all races from having guns.
Immigrants got similar treatment. In complete defiance of the U.S. Constitution, California state law prohibited Chinese from testifying against whites in any court of law for a 20-year period in the late 1800s(5). In New York, discussion urging passage of the 1907 Sullivan Law made mention of how that law would make it illegal for “swarthy immigrants” to have guns(6). Texas gun restrictions subjugated Americans of Mexican origin(7).
All these laws, however, were passed on a state level. It was not until 1934 that any federal law was enacted which affected firearms possession. There is some disagreement about the impetus behind this law, as will soon be discussed.
THE NATIONAL FIREARMS ACT OF 1934
The first significant federal gun law was passed in June of 1934 with minimal fanfare. It attracted little attention because it only affected a small number of arms: Full-automatic weapons (machine guns), rifles and shotguns with barrels shorter than eighteen inches (amended to sixteen inches for rifles in 1958), and rifles and shotguns with overall lengths less than twenty-six inches. These arms now fell under federal regulation. In addition, any device designed or redesigned to muffle the report of a firearm (a “silencer”) also fell under the scope of the National Firearms Act(8), despite the fact that these devices were not and are not in any way, shape, or form, “firearms”.
Because of the Second Amendment, Congress realized it did not have the authority to ban these arms. Instead, the bill was slipped in as a revenue-raising measure under the Interstate Commerce Clause. Under the National Firearms Act, no person my transport, deliver, or sell in interstate commerce any firearm or silencer as described above without first having in his possession a stamp-affixed form for the firearm. The tax stamp must first be bought so that it can be affixed to the federal form when it is approved. For the form to be approved, the applicant must be fingerprinted, signed off by the local police chief, and submit to an FBI records check. The “stamp” referred to in the law costs $200. The owner of an NFA-regulated weapon must have this approved form (with the $200 stamp affixed) in his possession before the arm (or silencer) in question may be transported in interstate commerce. This $200 tax must be paid each time the NFA-regulated item changes ownership.
Because of the size of the tax, the frequency with which it must be paid, and the method by which it is levied, the National Firearms Act bears a strong resemblance to the Stamp Act of 1765(9).
Being fingerprinted and forced to submit to an FBI investigation is unusual, to say the least, for a revenue-raising measure. To put this “revenue-raising” tax in perspective, in 1934, $200 was more than a month’s wages for a worker building Model “A”s on the Ford assembly line in Dearborn, Michigan(10). In the ‘20s, silencers sold for $20 in hardware stores and Thomson submachine guns could be bought out of the Sears catalog for $125. The idea that levying a $200 tax on these manufactured good would actually raise revenue is absurd. The demand for each of the items covered y the National Firearms Act was elastic enough that virtually no one was willing to pay the government an additional $200 for any of them. According to Treasury Department records, there was not a single tax-paid registration in 1934(11), and there was one in 1935(12).
Another consequence of the Act was that new development of machine guns by individual inventors stopped overnight. Given that the vast majority of full-auto weapons now in use were designed by private individuals, this is a serious issue. The U.S.’s foremost authority on machine guns, Lt. Col. George M. Chin, has frequently described the Act a devastating blow to American security in that is has crippled all future military small arms development in this country and will continue to do so until it is repealed(13).
After passage of the Act, there were only three classes of people who continued to buy these goods: Large companies bought the weapons for strike control and other labor relations purposes(14). Police departments, the military, and special occupational taxpayers(15) continued to buy, for they were exempt from the tax. Violent criminals continued to buy these weapons outside of legal channels, just as they had obtained liquor during Prohibition.
This reality brings us to the next issue concerning this obscure federal law.
REASONS FOR THE PASSAGE OF THE NATIONAL FIREARMS ACT
In almost every published description of the National Firearms Act of 1934 is a mention of the 1929 “St. Valentine’s Day Massacre”(16), and a statement to the effect tha the Act was passed because machine guns wee being used with horrible results by bootleggers and other organized crime figures. There are several things wrong with this claim.
First, it is laughable to hope that people for whom murder is a standard business practice will go present themselves to the local police chief to get fingerprinted, and pay $200 for the privilege. Similarly, it is ludicrous to think that putting legal restrictions on firearms will reduce their availability to those people whose entire livelihood involves finding, buying, transporting, selling, and delivering illegal goods.
Second, the highly publicized incidents of underworld gangs machine-gunning each other over liquor shipments stopped overnight with the repeal of Prohibition, which occurred a full year before passage of the National Firearms Act.
Third, the Act also affects weapons other than machine guns; rifles and shotguns with barrels or overall lengths below a certain minimum are regulated by the NFA. It is very difficult to conceive of a reason why the owner of a shotgun with a barrel 17-1/2” long should be charged with a felony I he refuses to be fingerprinted and pay $200, when owning a shotgun with a barrel a half-inch longer is no crime at all. To compound this utter absence of logic, under the National Firearms Act a person becomes a felon if he affixes a piece of wood to the butt of his pistol (doubling the weapon’s physical size), for he is now in possession of a “short-barreled rifle”, which is covered by the Act.
To make the final leap from the illogical to the ridiculous, the Act regulates noise mufflers, which are not firearms at all. Hollywood to the contrany, the FBI has been unable to document a single case of a firearm silencer being used in a crime in the last fifty years(17). Given that the citizens fire upwards of six billion rounds of ammunition per year(18), the inclusion of silencers into the NFA is one of the greatest contributors to hearing loss in the United States and therefore must be regarded as one of the largest Public Health blunders of this century(19).
The real reason for the passage of the National Firearms Act can be summed up in four words: Expansion of federal powers. In 1934, two major changes had recently occurred in the United States. The first was that Franklin Roosevelt had initiated an exponential increase in the size and power for the federal government. The second change was the ratification of the Twenty-first Amendment, which repealed Prohibition. Let us examine the latter incident first.
In the thirteen years that Prohibition had been in effect, there was a great proliferation of people involved in the illicit manufacture, importation, and distribution of alcohol. This in turn produced a tremendous expansion of the Treasury Department and the number of its agents(20). With repeal, the liquor distribution was done by legitimate businessmen, and thousands of Treasury agents were idled. Federal legislation levying $200 taxes on goods worth between $3 and $100 was guaranteed to promote non-compliance by the citizens, thereby giving former Prohibition agents something to enforce.
It is interesting to note that the original draft of the National Firearms Act included all handguns then in existence in the United States. Because of the handgun language, some of the strongest opposition to the original version of the National Firearms Act came from women, who were vulnerable to attack from stronger assailants and got the greatest benefit from being able to carry a small weapon for personal protection.
The number of pistols and revolvers in the U.S. in 1934 has been variously estimated at between thirty and one hundred million(21). Compare this figure with perhaps one million machine guns and short-barreled long guns that fell under the Treasury’s jurisdiction in the National Firearms Act’s final form(22). One can only guess at what would have happened if in 1934 the government had told every citizen to cough up $200 for each handgun he owned that he might someday want to take or ship across state lines.
The removal of handguns from the National Firearms Act may expain the odd inclusion of silencers in the legislation. In the first third of this century, silencers were commonly available in any store where firearms were sold. The term “silencer” is in fact a misnomer. It was a trade name coined by Hiram P. Maxim, and automotive engineer who applied the principles of muffler design to safety valves, compressors, blowers, and firearms(23). A “silencer” does not make a firearm noiseless, any more than the muffler on a diesel truck exhaust conceals the fact that the truck is approaching(24). With the 1934 Act making it a felony to transport common noise mufflers in interstate commerce without paying $200 (each!) to the government, millions of citizens were now in violation of federal law.
Although the National Firearms Act stipulated a grace period where owners could register three weapons and silencers free of charge, the Treasury reported that a grand total of 15,791 registrations occurred in this period(25). This indicates approximately 1% compliance. The 1934 Act was thus a huge success at turning millions of citizens into criminals.
The National Firearms Act fit in perfectly with the systematic creation of government programs and deficit spending that Franklin Roosevelt immediately began to institute the instant he took office. Te NFA was a model vehicle for the continued expansion of government power: It was arbitrary (i.e. the 18-inch rule); it gave the government sweeping authority over something very common; it focused on inanimate objects rather than criminal behavior; it levied draconian taxes on these objects; and most importantly, it created millions of criminals with the stroke of a pen, just as Prohibition had.
A clear example of the fact that the National Firearms Act had nothing to do with crime and everything to do with government power occurred immediately prior to its passage. Senator Hatton Sumners of Texas, the Chairman of the House Judiciary Committee, had been a virulent opponent of the proposed bill and had bottled it up because it “did violence to states’ rights”(26). On April 23, 1934, Roosevelt called Sumners into the White House for a chat. Sumners agreed to vote for passage(27).
ENFORCEMENT OF THE NATIONAL FIREARMS ACT PRIOR TO 1968
After the NFA was passed, sales of affected items came to an abrupt halt. Domestic firearms manufacturers stopped producing any long guns with barrels shorter than 18”. They also quit making any pistols with lugs on the butt for shoulder stocks. Manufacturers of noise reducers (most notably the Maxim Silencer Co.) went out of business entirely.
After the short grace period, citizens who owned NFA-regulated items on which the tax had not been paid had several choices. The first was to pay $200 to the Treasury for each item. In 1934, no one did this. The second choice was to relinquish NFA-regulated items to the Treasury without any compensation. No one did this, either. The third option, theoretically at least, was to avoid selling or transporting anything covered under the Act outside the state. The fourth was to disassemble the machine gun, short-barreled long gun, or silencer so that it was inoperable, and keep the parts separate. In the case of short-barreled arms, the owner could also replace the barrel with one of 18” or longer, and have a legal, functioning gun again without paying $200.
Short-barreled rifles and shotguns were produced in low numbers in the years prior to 1934(28) but the same could not be said for machine guns. The Colt-manufactured Thompson, BAR, and belt-fed Brownings had all been produced in large numbers and had been available on the civilian market for over a decade. Furthermore, two million American soldiers had been sent to Europe in WWI, and over half of these had served in combat units. These verans had brought back many “war trophies”, as they were called, with complete legality(29). Machine guns were a relatively new and interesting battlefield weapon in 1918(30), and captured examples were brought home by most soldiers. A conservative estimate of the full-automatic WWI weapons brought into the United States by the returning two million veterans is one million(31). Other knowledgeable sources place the figure at over twice that(32).
The Treasury Department decreed that the owners of these weapons could either register them for $200, or remove critical parts (such as the bolt) from them, which would render them inoperable. In this latter case, the gun was no longer considered a weapon subject to registration and $200 tax, but rather a “DEWAT”, which was the Treasury Department’s acronym (sort of) for Deactivated War Trophy.
When agents encountered an otherwise law-abiding citizen with a non-taxed machine gun in his possession, standard procedure was to give him the choice of paying the $200 tax and registering it “live”, or removing the bolt and/or other internal parts.
As years passed, the economy improved, wages and prices went up, and the U.S. fought in two more wars. A few million more veterans returned home from WWII and Korea with a few million more war trophies. By the ‘50s and ‘60s, some citizens actually were paying the $200 tax and getting tax stamps from the Treasury Department on weapons brought back from WWI, WWII, and Korea, and on newly-purchased machine guns from the many manufacturers around the world.
THE GUN CONTROL ACT OF 1968 ---- Continued...
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