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Smith & Wesson's Faustian Bargain, Part I

Dave Kopel is the research director of the Independence Institute, a free market think tank in Golden, Colorado.

March 20, 2000, National Review Online. More by Kopel on lawsuits against gun manfacturers.

Connecticut handgun manufacturer Smith & Wesson has earned the dubious honor of becoming Bill Clinton's favorite gun company. By agreeing to modify its product design and distribution, the company earned a promise not to be sued by Andrew Cuomo’s Department of Housing and Urban Development, by the Attorneys General of New York and Connecticut, and got some — but not all — of the cities which have sued the company to drop their lawsuits.

Smith and Wesson says that if it had not stopped the suits, the company would have gone out of business within a year, due to attorney fees. But it should be noted that other gun companies are under equally great financial pressure, and have not capitulated.

To be sure, the agreement will have only a moderate effect on the way Smith and Wesson does business. At the same time, the contract terms — if enforced against other gun companies — could drive them out of business. The application of the agreement to several of Smith & Wesson's smaller competitors, or to Glock (one of the largest and most successful handgun companies), would destroy them. Thus, Smith and Wesson gains an advantage, by agreeing to terms which will harm its competitors.

The positive short-term consequences for the company will be increased government sales and reduced litigation expenses. The negative consequences will be that Smith & Wesson will lose many of its retailers. In addition, gun buyers who care about Second Amendment rights will stop buying Smith & Wesson products.

In the long term, S&W has increased the chances that it, along with every other handgun manufacturer, will be destroyed. S&W has legitimated frivolous lawsuits against financially vulnerable businesses, and has thereby encouraged the victimization of many other business by abusive lawyers and prohibition groups.

In short, S&W's appeasement — which, in many cases, does little to alter the way the company has been doing business — gains it a short armistice with its enemies. But appeasement didn't save France, and it won't save S&W.

Here’s the first half of what's in the agreement, according to the official summary on the HUD website. I have decoded it in [brackets].

All handguns must meet the following safety and design standards:

  • Second "hidden" serial number, to prevent criminals from obliterating serial numbers.
    [Already done by many gun manufacturers.]
  • External locking device sold with all guns within 60 days.
    [S&W has been giving away locks with every handgun since 1997.]
  • Internal locking device on all guns within 24 months.
    [The lock that S&W will use can be left in the “open” position permanently.]
  • Manufacturers commit 2% of annual firearms revenues to the development of authorized user technology [Smart Guns]. Within 36 months, authorized user technology will be included in all new firearm models, with the exception of curios and collectors’ firearms. If top eight manufacturers agree, authorized user technology will be included in all new firearms.
    [Note that the new technology is for new models only, not new production of current models. S&W has already been working at personalization technology. So far, solving the problem of putting a computer in a gun-and making the computer work 100% reliably-has proven extremely difficult. Buyer resistance to guns that only work 99% of the time is likely to be very serious. To the extent that this agreement helps pass legislation to mandate so-called smart guns, the agreement will put S&W’s competitor Glock out of business; Glock has made a business decision not to invest millions of dollars in personalization technology that may never work reliably.]
  • Child Safety. Within 12 months, handguns will be designed so they cannot be readily operated by a child under 6.
    [S&W guns already conform to this. The revolvers have a 10 pound trigger pull, and the semi-automatic pistols require that the slide be pulled.]
  • Performance test. All firearms will be subject to a performance test to ensure safety and quality.
    [Common industry practice already.]
  • Drop test. All firearms will be subject to a test to ensure they do not fire when dropped.
    [No handgun manufacturer in the U.S. makes guns which fail the drop test.]
  • All pistols must meet the following additional requirements:
    [“Pistol” in this context means a self-loading, semi-automatic handgun, as opposed to a revolver.]
  • Safety device. Positive manually operated safety device.
    [Already standard on S&W pistols.]
  • Magazine disconnectors must be available on all pistols to customers who desire the feature, within 12 months.
    [A magazine disconnect prevents the gun from firing if the magazine is not in the gun, and there is a round in the firing chamber. People who own handguns for defensive purposes, including law enforcement officers, generally prefer guns without magazine disconnects.]
  • Chamber load indicators on all pistols, showing whether the pistol is loaded, within 12 months.
    [To the extent that the people begin to rely on chamber load indicators, they will violate the fundamental firearms safety rule: “treat every gun as if it’s loaded.]
  • New firearm designs will not be able to accept large-capacity magazines that were manufactured prior to September 1994. (Manufacture of such magazines has been prohibited since that date.)
    [So new S&W guns have to be incompatible with pre-1995 magazines. Here, S&W undercuts defensive gun use, by ensuring that people who buy new models will not be able to fire more than 11 rounds without stopping to change the magazine. There are many incidents in which defensive gun users have had to fire more than 11 rounds to stop multiple attackers, or even single attackers who are under the influence of drugs.]
  • If law enforcement agencies or the military certify the need, exceptions to these requirements may be made. Manufacturers will ask that these guns not be resold to the civilian market.
    [Law enforcement retains the ability to obtain reliable firearms. Since defensive gun use by ordinary people is immoral, it would be better for them to die rather than defend themselves with an effective firearm.]

    Smith & Wesson's Faustian Bargain, Part II

    By David Kopel

    National Review Online. March 21, 2000

    As promised, here’s the second half of Smith & Wesson's Faustian agreement with HUD, again decoded in [brackets].

  • Warnings about safe storage and handling included with all firearms within six months.
    [Every firearms manufacturer already includes a safety manual with the gun.]
  • Manufacturers will not sell firearms that can readily be converted into fully automatic weapons or that are resistant to fingerprints.
    [The first item has been illegal since 1934. The second item is a slap at Intratec, which has advertised a particular model as resistant to fingerprints.]
  • Manufacturers will sell only to authorized dealers and distributors and allow their authorized distributors to sell only to authorized dealers.
    [This conforms to S&W’s current business practice. Many smaller manufacturers, however, do not have the resources to maintain an authorized dealer system.]
  • Authorized dealers and distributors will agree to a code of conduct...the code of conduct will require authorized dealers and distributors to: make no gun show sales unless all sales at the gun show are completed only after a background check.
    [In other words, an authorized S&W dealer can’t sell a gun in most American states, since most states do not require background checks for handgun or long gun sales by private gun collectors. Already, every firearms dealer, including authorized S&W dealers, must, by law, run background checks on every customer; the requirement applies for in-store sales, and for gun show sales. Now, S&W will forbid its dealers to sell at gun shows simply because the law of the state where the gun show takes place authorizes unregistered sales by private collectors. Since gun show sales are a very important source of revenue for many small dealers, some dealers will probably drop Smith & Wesson, rather than dropping out of gun shows. This provision is an important step towards Handgun Control’s goal of requiring government permission for anyone to obtain a gun, under any circumstances.]
  • Wait as long as necessary for a completed Brady check showing that the purchaser is not a felon or otherwise prohibited before selling a gun to the purchaser.
    [Standard practice among most dealers already, although the law says that if the FBI instant check system fails to respond after 72 hours, the sale may go forward.]
  • Transfer firearms only to individuals who have passed certified safety course or exam and demonstrate to purchasers how to use all safety devices and how to load, unload, and safely store the firearm before completing the sale.
    [The second condition — demonstrating how to use the gun — is already common in many gun stores.]
  • All purchasers of multiple handguns [can] take only one handgun from the store on the day of sale, at which point a multiple sales report will be filed with ATF. The remainder of the guns can only be collected after 14 days.
    [The multiple sales report has been required by law since 1968. The delay is premised on the phony claim that lawful multiple purchases from retail gun stores are an important source of crime guns.]
  • Require persons under 18 to be accompanied by adults in gun stores or gun sections of stores.
    [Mandatory political correctness. No more sending your teenager to the local gun store to pick up some gun cleaning supplies for you. This helps further the idea that guns are evil, like cigarettes, and that children should be kept away from them.]
  • [Do] not sell large capacity magazines or semiautomatic assault weapons.
    [Furthers the lie from Handgun Control and Bill Clinton that so-called “assault weapons” — guns with certain cosmetic features — are preferred by criminals, as are magazines that hold more than 10 rounds. The sale of any of these items made before 1995 is perfectly legal, and HCI’s campaign for confiscation of all these items has been a failure. Many gun dealers are willing to sell S&W guns according to S&W’s terms, but here, S&W is attempting to forbid the sale of products from other companies. This provision will certainly cause some dealers to drop the S&W product line, rather than allowing one manufacturer to dictate the store’s inventory.]
  • Provide law enforcement, government regulators, and the Oversight Commission established in this Agreement with access to documents necessary to determine compliance; cooperate fully in the Agreement’s Oversight mechanism.
    [In other words, stores that sell S&W guns must surrender their business privacy, and their Fourth Amendment right to insist that government employees obtain a court order before looking at private records.]
  • Maintain an electronic record of all ATF trace requests and report trace requests to manufacturers.
    [Easy for any store with a computer.]
  • Forgo firearms sales to licensed dealers known to be under indictment.
    [So much for the Fifth Amendment principle of innocent until proven guilty.]
  • [Do not] make sales to straw purchasers.
    [Has been illegal since 1968.]
  • Manufacturers will: Provide quarterly sales data to ATF.
    [Resurrects a BATF proposal that Congress voted down by a 3-1 margin in 1978.]
  • [Do not] market guns in any manner designed to appeal to juveniles or criminals.
    [Doesn’t affect S&W, which only makes handguns, but undercuts companies like Marlin, which make lightweight .22 rifles for teenagers.]
  • Refrain from selling any modified/sporterized semi-automatic pistol of type that cannot be imported into U.S.
    [No impact on S&W, but does affect some other handgun companies.]
  • Reaffirm policy of not placing advertisements in vicinity of schools, high crime zones, and public housing.
    [Most gun stores advertise with newspaper ads rather than billboards, so this has little impact. But the provision implies that people in high crime zones and public housing should not have firearms for protection.]
  • Implement a security plan for securing firearms.
    [Common already, since dealers don’t want their inventory stolen.]
  • If an authorized dealer or distributor has a disproportionate number of crime guns traced to it within three years of sale, the manufacturers will take action, including possible termination or suspension, against the dealer or distributor. ,br>[BATF traces a gun whenever local law enforcement asks. There is no requirement that the gun be connected to a crime, and the majority of gun traces are unrelated to the use of a gun in a crime. By requesting traces in every possible circumstance, a local police chief can drive up the trace numbers for gun stores in his area. Then, S&W will cut off sales to those stores — even though the stores have done nothing wrong, and have sold every gun in compliance with the law.]
  • Oversight Commission will be established and empowered to oversee implementation of the Agreement. The Commission will have five members selected as follows: one by manufacturers; two by city and county parties; one by state parties; one by ATF.
    [Thus, the commission will have a 4-1 anti-gun majority.]
  • Within six months, if technologically available, manufacturers will fire all firearms before sale and will enter the digital image of the casings in a system compatible with the National Integrated Ballistics Identification Network and accessible to ATF. This will enable law enforcement to trace crime guns when only the bullets or casings are recovered.
    [...and bring us a few steps closer to universal gun registration.]
  • Manufacturers shall participate in ATF’s Access 2000 program, which establishes electronic links with ATF and enables high-speed tracing of crime guns.
    [Already done by most large manufacturers. Again, most traces are unrelated to gun crime.]
  • The parties will work together to support legislative efforts to reduce firearm misuse and the development of authorized user technology.
    [S&W commits itself to work with the gun prohibition lobby, and to outlaw companies like Glock, which do not want to risk their customers’ lives by making potentially unreliable computer guns.]
  • Upon resolution of all current city, state, and county lawsuits, manufacturers will dedicate 1% of overall firearms revenues to an education trust fund.
    [Who controls the trust fund?]
  • If other manufacturers enter agreements with more expansive design and distribution reforms, and those manufacturers, along with the manufacturer parties to this Agreement, account for fifty percent or more of United States handgun sales, the manufacturer parties to this Agreement will agree to abide by the same reforms.
    [S&W commits itself to even further abuses, if more gun companies capitulate.]
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