New License Rules Reduce Gun Dealers Sharply, Especially In Cities

The number of federally licensed gun dealers has been halved in the last four years, Treasury Department officials said Wednesday, reflecting new rules that make it harder to get a license.

The drop has been particularly sharp in some big cities. The number of dealers in Detroit, for instance, dropped to 92 in 1996 from 468 in 1993. In Chicago, there were 11 dealers last year, compared with 256 in 1992.

While the report didn’t address the topic of gun sales, law-enforcement officials believe that cracking down on fly-by-night gun dealers helps keep guns away from criminals.

“There is a reduction in gun-related violence, and I feel this played a part,” said Raymond W. Kelly, the Treasury undersecretary for enforcement.

The crackdown on licensing is being matched by increased effort to trace guns. Kelly said it’s now easier to trace guns used in crimes, especially with more legitimate dealers keeping good records.

About 60 percent of the successfully traced crime guns originally came from only 1 percent of federally licensed dealers, meaning guns diverted to the illegal market are concentrated among a small number of shady dealers, according to the Treasury Department report.

Among the new rules, which were implemented in 1994: Gun license applicants must provide fingerprints and photographs for background checks; they also must have face-to-face interviews with federal inspectors and must comply with all state and local laws, notably zoning laws; in addition, the license fee was increased to $200 from $30 for three years.

Previously, “kitchen-table” dealers mailed in an application with the nominal fee.

“From their kitchens or garages, they received parcel post shipments of guns directly from arms manufacturers and resold them in complete disregard for local ordinances,” Kelly said.

He said that since October 1993, 647 applicants have been rejected for licenses because they had prior convictions.

Overall, federally licensed dealers have dropped to 124,286 from 286,500 in 1993.

Chip Walker, a spokesman for the National Rifle Association, said most of the reduction is due to economics.

“Many of these people had their licenses, but were only selling or buying three or four guns a year,” Walker said. “And they wonder, ‘Should I pay $200 for this license and I’m not doing anything with it?”’