The State of Machine Gun Sales and an Interview with Midwest Tactical's Frank Goepfert

Ownership of fully-automatic firearms, also called machine guns, in the United States is a far cry from what it was prior to the days of Al Capone, Baby Face Nelson, and the like nearly 100 years ago.

For those who haven’t been around that long, and aren’t aware of how things used to be, prior to 1934 one could buy a Thompson Submachine Gun from the ubiquitous Sears, Roebuck and Company catalog with no background check, transfer tax or registration. Having failed to secure significant military orders, the Auto Ordnance Company marketed this little marvel as a tool for criminal control on the ranch.

Though the Thompson was marvelous for legal recreational use, self-defense, and as a Second Amendment firearm against tyranny, it would soon gain popularity with less scrupulous individuals who made it quite famous through their infamous exploits. At about $200 for a new Thompson with a 20-round stick mag, few could afford to own a Thompson in the 1920s or early ’30s.

The submachine gun was a very new concept back in the early ’20s when the TSMG was first produced. At the time, the firepower of the Thompson was unmatched by any American small arm. Firing the .45 ACP round from a 20-round detachable magazine, or better yet, a 50- or 100-round detachable drum magazine, and with a rate of fire of between 700-950 rounds per minute (depending on the model), the Thompson’s firepower was incredible.

The rise of organized crime during America's prohibition era and the use of the Thompson by gangsters led to the subsequent strict regulations of all machine guns and establishment of the National Firearms Act (NFA). Unpleasantries such as the St. Valentine’s Day Massacre, which took place in 1929, quickly began to turn public opinion against machine guns and eroded support for the Second Amendment’s “shall not be infringed” clause. Leftist political organizations and Hollywood also contributed to the anti-Second Amendment sentiment as well (yes, even back then). The writing was on the wall.

In 1934, Congress was able to pass the controversial National Firearms Act (NFA) of 1934 in an effort to control the distribution of machine guns. Although the NFA created a tax and a registry system for machine guns, a good portion of the lawmakers at the time simply wanted to ban production and ownership of all machine guns, along with other weapons and devices they considered unnecessary. Those items included not only machine guns, silencers and short-barreled rifles, but also originally included handguns. Since an outright ban on any firearm or class of firearm was unconstitutional, Congress needed a loophole. What legislators agreed upon, and the president eventually signed into law, was a $200 transfer tax to be paid upon transfer of any machine gun. This was written off as constitutional and covered under Congress’s authority to tax. Of course, in 1934, $200 was a whole lot of money. So, Congress effectively banned machine guns since very few people could, or would pay, a $200 tax in addition to the extremely high price of the gun. Remember, this was an era when a new Ford car cost $400.

In addition to machine guns, the 1934 Act defined as NFA items all shotguns and rifles having barrels less than 18 inches in length (rifle barrels were later amended to 16-inch minimums), firearm suppressors, mufflers and silencers, and certain firearms described as “any other weapons.” Thankfully, in the end, the list did not include handguns. Although not universally considered as constitutional, the NFA is still enforced and was later expanded upon by the 1968 Gun Control Act.

As years passed, the $200 transfer tax became less of a hurdle for many Americans. After WWII, many returning veterans brought machine guns back from foreign battlefields. This was legal as long as the guns were either brought back through the proper channels, or that the guns lacked a component which would allow firing or full-auto firing such as a firing pin or magazine. There’s a story out there that during WWII, marines and sailors brought back dozens of Japanese Type 96 and Type 99 machine guns, as souvenirs, on board their ship from a battle in the Pacific. The ship’s admiral instructed those with “souvenirs” that they had two choices; either throw the magazines overboard and keep the machine guns, or throw the machine guns overboard and keep the magazines. You can imagine which went overboard. As a result of this incident, and many others like it, most Type 96 and 97 machine guns are still missing magazines, and the price range of one of those magazines today is in the thousands. With the passage of the 1968 Gun Control Act, this practice was no longer allowed as these “missing parts” machineguns were now considered as “live.” A 30-day amnesty was then established, during that year, to allow the registration of unregistered machine-guns, veteran bring backs, or other NFA regulated firearms. This ’68 law also banned the importation of machine guns for civilian sales which also restricted prices of original foreign machine guns, but it was still legal to build a “new” machine gun from an imported parts set which usually included a receiver that was saw cut in half.

Due to the larger number of NFA items on the registry, and the less inhibitive price of the transfer tax, the sale in legal machine guns began picking up in the 1960s. Several dealers, who were also enthusiasts, began buying and selling machine guns, and were a great source for machine guns for sale and vast knowledge that few others possessed like J. Curtis Earl. Although Earl charged two to three times the going rate for his machine guns, he was a great promoter and marketer for the machine-gun collecting hobby. He usually got his asking price.

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During those days, machine guns were relatively cheap. An MG42 cost about $250 in the 1970s and rose to about $1,000 by about the mid-1980s; an original 1921 Colt Thompson cost about $2,000 in the 1980s with a newly-produced Numrich 1928 Thompson selling for about $600. Full-auto MAC-10s ran between $150 to $500 throughout the 1980s. MP5s were the cost of an HK94 carbine plus whatever the licensed manufacturer wanted to charge for the conversion - about $800 total in 1985. In addition, it was legal to build your own machine gun by filing an ATF Form 1 and paying the $200 tax. Several manufacturers of NFA items were actively building new machine guns just for the hobbyist market and magazines like Firepower began to hit the newsstands around 1983, which included articles on how to convert UZI carbines, AR-15s, M1 Carbines, HK93s, and many others to full auto.

Because of the reasonable prices at the time, it was quite feasible for the average working man to have several registered, fully-automatic guns in his safe and be able to shoot the heck out of them on the weekend. It was quite a hobby for the law-abiding, red-blooded American during the ’60s, ’70s and ’80s. Decades passed with only a slight increase in cost to acquire most transferable machine guns.

Then everything changed again.

During the lame duck session of Congress between Christmas and New Year’s Day in 1985, Congress narrowly voted the Hughes Amendment into law within the Firearms Owners’ Protection Act. This effectively banned any further production of machine guns for civilian use. After May of 1986, machine guns could only be produced for use by law enforcement and military. All previously registered machine guns were grandfathered in and have remained legal to freely transfer between law-abiding citizens. [EDITOR’S NOTE: Although then NRA Legislative Action Executive Director Wayne LaPierre vowed to lead efforts repeal the unconstitutional Hughes Amendment in 1986, no effective effort has ever been launched in the last 34 years. LaPierre just got his salary raised to around $2,000,000.]

The Hughes Amendment spurred a dramatic price increase that continues to this day. It is estimated that when the amendment took effect there were roughly 250,000 previously registered transferable machine guns. The latest estimate released by NFA branch of ATF some 30 years later was 186,000. The reduction is believed to have occurred due to loss, theft, fire, forfeiture, and inaccurate record keeping.

This large of reduction in supply over time combined with an ever-increasing demand makes the transferable machine gun market an anomaly. A quick study reveals that the value of any machine gun has far outpaced inflation for the last 30 years. For instance, the Colt Thompson, which sold for $200 originally, and could be bought for about $2,000 during the early ’80s, might now sell for more than $50,000. That converted HK94/MP5 mentioned above is now valued at over $32,000.

At this point, you might be asking where you go to find transferable machine guns for sale. Nowadays, the internet has made information easy to obtain. A quick search turns up several NFA specialized dealers and many NFA-friendly listing sites.

Frank Goepfert owns Midwest HYPERLINK "https://www.atfmachinegun.com/"Tactical Inc., which sells more machine guns out of its Jasper, Mo., shop than just about anyone else in the country. Frank and his wife, Joy, have been in the business together for half of their 28-year marriage. Formerly a top-10 dealer on Gun Broker, Midwest Tactical now has its own listing site, GunSpoHYPERLINK "https://gunspot.com/"t.com, where you will find hundreds of transferable machine guns offered for sale by dozens of dealers from all over the nation.

We recently caught up with Frank to learn a little more about his history and get his take on the state of machine gun ownership and current sales trends.

Firearms News (FN): When did you get into the gun business?

Frank Goepfert (FG): We started in the gun business under a type 07 with SOT in 2005.

FN: Were you always a gun owner? What was the first gun you ever had?

FG: I have technically been a gun owner since I was 6. I was given a Red Ryder for my 6th birthday. Unfortunately, I may have been a little young for the responsibility. Within 30 minutes I had shot the window out of the sliding glass door on the back porch. Oops!

FN: At what age did you learn that machine guns were legal? What was your response?

FG: Growing up and through my early adult life I had a love for guns in general. Something about machine guns was particularly fascinating. Of course, I was always simply told they were illegal. One day when I was in my early 30s, I just got the wild hair idea to do some research on my own. In so doing, I discovered machine guns were indeed legal. The problem was, each state had its own restrictions on Class 3 ownership. In my home state of Missouri, at the time, we could only have C and R machine guns. [C&R / Curio & Relic machineguns are those which are deemed by BATFE to be either antique or unique collectables.] I discovered with a type 7 license [manufacturing license] and SOT [a tax stamp added to a firearms license in order to do business with NFA-regulated firearms], not only could I own any transferable machine gun whether C and R or not, but I could also build machine guns for marketing to law enforcement and the government. It seemed too good to be true. Consequently, I requested the necessary forms, but sat on them for months thinking, “It’s too good to be true.” Finally, I got around to doing the fingerprints and sending in the application forms to become a Class 3 dealer. Still thinking it was highly unlikely I would ever even hear from ATF, I forgot I had even sent the forms in. Months later, I got a call out of the blue from our field office. I was startled and amazed, not to mention nervous. The examiner on the phone told me she would like to set up an appointment to interview for my license at my proposed place of business. She continued, “Mr. Goepfert, I just don’t see any reason you would need this type of license.” Despite my lack of prior experience, the examiner and I hit it off pretty well. When she said I would be receiving my license in the mail in a few weeks, I was blown away. I was on cloud nine for weeks.

To be honest, when I started, I didn’t have the knowledge to be diving into the Class 3 business. It’s the kind of thing you need to know what you’re doing. I am thankful I quickly made good contacts who became close friends and helped immensely with their knowledge. Mike Friend from Firing Line in Wyandotte, Okla., and Ed Holtz from Urban Armory in Jamestown, N.Y., remain business associates and friends. I am still thankful for their early contributions of both knowledge and support.

FN: Did you ever deal with any of the large machine gun dealers of years past, like J. Curtis Earl, Neal Smith, Kent Lomont or Bob Landis?

FG: Over the years it seems we have had occasion to deal with most of the well-known, high volume Class 3 dealers, as well as most of the smaller or specialized shops. Our business is not focused solely on transferable machine guns. We have managed dozens of license closeouts for other Class 3 licensees who were ready to retire or move on to something else. This has put us in a position to move thousands of dealer sample machine guns throughout the years and has put us in contact with most of the active dealers. The Class 3 world is a tight community with a lot of real decent folks. It’s a pleasure to know and do business with most of them.

FN: What are some of the most popular machine guns sold nowadays? What makes them so popular?

FG: The most popular transferable machine guns currently tend to be the more modern and versatile. The HK transferable sear has long been one of the most popular items because it can be used in the entire family of HK semi-auto hosts. This means with one registered sear you can have an MP5, HK53, G3, HK23, etc., the list goes on. The second most popular item remains the M16, whether original or conversion. The M16 is modern and versatile. Caliber and configuration changes are simple and fast. The MAC family of weapons remains very popular due to the price point and because Lage MFG continues to make excellent and innovative products for the MACs that greatly enhance their performance. These are only the highest demand items that come to mind. Basically, there has been a good demand for any transferable machine gun for quite some time. Not everyone’s tastes and likes are the same, which is nice.

FN: What is the oldest machine gun you ever sold?

FG: One of the really neat things about this business is the antiquities we see on a regular basis. Many of the guns we purchase for resale were, at one time, deployed on a foreign battleground. It’s easy to let your mind wonder to where the gun may have been and what it “saw,” in some cases a century ago. The older original machine guns are a rarity compared to the later WWII era guns and more modern civilian models that were made and registered in mass. Some of the oldest and most desirable machine guns we have had include the 1910 Maxim, 08/15 Maxim, 1914 Marlin Potato Digger, 1914 Lewis Gun and, of course, the original 1921 Colt Thompsons. These guns vary widely in price based on history, condition, originality and model, but sometimes run upwards of $50k in price. As an investment, these are some of the very best the gun world has to offer. The recent slump in demand for collectible firearms has proven that, with few exceptions, the Class 3 sector of this market is much more resilient and resistant to erosion of value than the Title 1 portion.

FN: What is the most expensive machine gun you ever sold? 

FG: We once had one of the very few original FN 240 machine guns. Without disclosing the price, I can say it quickly sold for more than $200k. We sometimes wonder what the real market price should be on such rarities because there are no comparative sales, whatsoever. We recently had a customer seeking an appraisal on one of the very few transferable Berretta 93R pistols. We could find history where one had sold years ago for over $100k, but nothing more recent. Since demand over the last 10 years has increased so dramatically, what he was asking was essentially an impossible task. Unfortunately, I was not confident we could offer an accurate appraisal. With those types of rarities, the sale price basically becomes the new current value of the item. It’s a bit backward.

FN: What is the rarest machine gun you ever sold?

FG: We have had several very rare machine guns to offer. In the Class 3 world, “rare” can mean one of a kind. We have had transferable Smith & Wesson machine pistols, Dealer Sample 93Rs, Mini Guns and a transferable original FN 240. The rarest item we ever sold, to the best of my knowledge, was a Pancor Jackhammer. The Jackhammer was a fully automatic 12-gauge shotgun. It was more or less experimental only. What we sold was one of only two reported to exist. I have no idea who might have the second one. 

FN: Have you ever purchased a machine gun that was found by a family member who didn’t know if it was registered? If so, what was the story?

FG: We have gotten dozens of calls over the years from family members who found a machine gun brought home from WWII by a loved one who has passed away. We have to give them the bad news, that unless the gun was properly registered, not only does it have no value, but it is also likely to land the possessor in a heap of trouble if discovered. WWII era machine guns were brought back in large numbers by veterans who were returning from foreign battlefields. America was a different place then, and this was allowed as long as the gun was brought back through the proper channels and was issued “bring-back” papers, essentially putting the gun on the federal registry. Lots of guys evidently did not consider it a big deal and didn’t see to it the guns were properly documented. The last opportunity to register such guns was the Amnesty of 1968. That was a one-month period during which anyone possessing a machine gun or other NFA weapon could register it to themselves, thus making it “OK” to possess. Of course, not everyone knew about the amnesty, and there was lots of distrust of the government. At the time, these guns were not worth much at all, so few even bothered. As a result, there are quite a few bring-backs for which the only legal option is to destroy or turn them in. It’s a sad situation, as this is part of our history. Nonetheless, it’s very unlikely we will ever see another amnesty enabling registration.

FN: Do you ever make trades for collectible machine guns with police departments? If so, what kind of guns have they had?

FG: Lots of the surplus WWII machine guns were issued to departments after the war. For this reason, it was once very common for departments to have a few original C and R machine guns. Of course, in the early days, many of the departments had the highly valuable 1921 Colt Thompsons so they could match the firepower of the notorious gangsters. Long ago, Class 3 dealers discovered that in many cases the departments had no idea what the value of these guns had risen to. It was easy for an unscrupulous dealer to trade a department out of some valuable hardware for a few current issue AR-15s or Ruger AC 556s. Those days are gone. The internet vastly increased the availability of pricing information and most of the good stuff harbored in departments throughout small-town America dried up. It is rare that we are able to purchase anything from a department now.

FN: Can you please tell us a little bit about current machine gun prices?

FG: The current values of transferable machine guns have been holding fairly flat for the last year or so. During the Obama administration, we saw prices effectively double in a short period of time. As a result, the market is taking a breather with things fairly stable. Because no machine guns have been registered for civilian ownership since May 19^th of 1986, it is highly likely prices will continue to climb over the coming years.

FN: Where do you see machine gun ownership going with the current high prices?

FG: Ownership demographics have changed dramatically as we have seen prices increase. In late 1986, a transferable HK sear could be bought for less than $100. The tax stamp was $200 dollars at that time, so these were indeed cheap. No one really seemed to want them from what I am told. Today the same sear will sell for north of $30k. The days of the working man owing a safe full of machine guns is pretty much over. We have bought from a number of “average Joe” type guys who had the foresight to purchase decades ago when things were cheap. Needless to say, they made a killing when they sold. The extreme prices of these items today have made them primarily an investment. We typically sell to wealthy business types, doctors and lawyers. The buyers are, in many cases, building a well-rounded collection they plan to pass down to kids or sell when they retire. For them, transferable machine guns make a lot of sense as an addition to their other investments.

FN: Are there any serious efforts to repeal the 1934 NFA?

FG: To the best of my knowledge there are no serious efforts under way to repeal the NFA or to modify current regulations in any way. We see ownership of NFA items as being more secure than ownership of the current AR15 due to the fact that no crimes have been committed with registered machine guns. The FBI background check system, coupled with the current economic selective nature of the current market, have proven very effective.

FN: So, it appears the market for transferable machine guns has been very reliable. Have you chosen to focus solely on dealing in Class 3 items, or have you diversified into other types of weapons?

FG: We have chosen to focus on dealing in NFA primarily with very little focus on Title 1 firearms, i.e. normal pistols, rifles, etc. For years we relied heavily on auction websites as a means to advertise and sell our machine guns. We were a top 10 sellers on a large and well-known auction site for years. As fees went up, we began to consider investing those resources into our own development. Being an industry leader, we were well aware of the shortcomings of other sites and had lots of ideas for improvement. As a result, we have recently launched Gunspot.com, a cutting-edge firearms auction website that is taking the industry by storm. Honestly, when we started this site we had no idea how quickly it would gain traction. The industry seems to be hungry for something better and more affordable than the other, older auction-style sites. It has been fascinating to see the growth. Gunspot.com is a place where you will see everything from Glock pistols to $100,000 transferable machine guns and armored vehicles. We allow both dealers and individuals to list their guns and ammo much more easily than competitive websites due to the modern platform. For dealers partnering with our site, we are offering affordable credit card processing and their own personalized store, with checkout for the items in their stores. The stores and processing are so easy to set up it can be done in an afternoon. I could go on all day about Gunspot.com, but seeing is believing. You just have to see it for yourself.