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Wednesday, October 9, 2013

Our Response

This letter is a response to an email sent by James D Julia, Inc. to its customers.  Their email claims that "a competing auctioneer" has launched a campaign to "disparage" not only their auction service, but also the lifelong collection of Dr. Geoffrey Sturgess.  This email also attempts to paint their "competitor" as an organization that would shy away from "the truth and what the facts are."  Obviously, we wish to offer a rebuttal and have done so with the following letter. -Ed.

Dear Fellow Collectors, 

As many of you are aware, Rock Island Auction Company recently published an article as part of our ongoing series written by RIAC employees. This article pertained to import marks on collectable and investment grade firearms. This article has been widely read and received a great deal of attention in the firearms collecting community. An employee of RIAC wrote this article with full knowledge of the importation of the Dr. Geoffrey Sturgess Collection. In fact, it was because such an impressive collection was being imported that collectively we decided to address the topic. Not only would such an article be extremely relevant, but also very helpful to the gun collectors. We covered various sides of the issue, though thanks to many responses in various internet forums and comments sections there was still much that people had to say on the topic. With any article, there will be those who agree and those who dissent and both sides have been posting. The overall conclusion is that import marks are detrimental to collectability and push value down. Unfortunately, James Julia has taken our article as a direct attack, claiming that Rock Island Auction Company has “disparaged” both his auction service and the Sturgess Collection. Nothing could be further from the truth.

Indeed, as a collector myself and my company have no reason to besmirch the Sturgess Collection; it is a lifetime of a collector’s work that we admire just as we do with so many collections that also indicate such dedication and passion. We have no reason to drive down gun values as Julia claims. For surely as such an effect would happen to Julia, it would also happen to us. The aphorism says, “a rising tide lifts all boats,” after all. Furthermore, we do not believe we have “damaged” nor had a “negative effect on the industry as a whole.” On the contrary, the article was written as an educational point of interest on a subject pertinent to collectors worldwide. Not once does the article mention James Julia or the Sturgess Collection by name in an attempt to call out either one. However, since Julia’s has addressed us directly in an email seeking “facts” and “the truth,” we should like to respond to this email and the specifics surrounding this sale. We shall do this in the interest of further protecting gun collectors, whether they are our customers or not.

Regarding Import Marks
We have seen the picture and document supplied by Julia showing an example of the import marks and unfortunately, they raise more questions than they answer.  Julia promises “truth” and “facts” in his email, yet neglects to show collectors everything they need to make an informed decision.  Both pictures showing import marks show the “SIMPSON LTD / G’BURG, IL” mark on a Luger pistol.  While abbreviations are certainly allowed when making import marks, where is the rest of the required ATF importation information?  As our article pointed out, by law several pieces of information are required to be included in the marking of a firearm for import.  Certainly some information is already present on the gun, such as a serial number, and not required to be duplicated in the import markings, but where is the rest of the information?  Sometimes, however, experimental guns do not have the serial number and the importer is required by law to assign one.  Some Lugers will indicate that they are made in Germany, but most do not.  Collectors and potential buyers must be shown where the importer marked that.  This is not some grand challenge.  This is an opportunity for transparency on the part of Julia for the benefit of the buying public.  Where are the caliber markings?  The law also says you must indicate the model of the gun if designated (27 CFR § 478.92).  In the spirit of truth and fact, we ask Julia show the buying public where that has been properly marked on firearms requiring it.

The placement of these marks also raises questions. ATF Guidelines clearly state that they “require markings that legibly identify each item or package and require that such markings be conspicuous… ‘conspicuous’ means that all required markings must be placed in such a manner as to be wholly unobstructed from plain view.” In Julia’s own words, their markings on the appropriate Sturgess Collection items have been described as “almost indistinguishable,” “imperceptible,” “impossible to see,” “non-noticeable,” and most damningly, “inconspicuous.” According to his own description of the marked items, they do not comply with ATF standards, which state, “Held further, an imported firearm with any part of the required marking partially or wholly obstructed from plain view is not marked in accordance with 27 CFR § 478.92 and 27 CFR § 479.102,” (all emphasis as written). If the ATF judges these to be improperly marked, are they then contraband? While we do not know the answer, we believe this is one of several questions to which customers deserve an irrefutable answer. Furthermore, such markings are required to be “placed in a manner not susceptible of being readily obliterated, altered, or removed” (27 CFR § 479.102). The opening of the magazine well does not lend itself well to either of the above requirements and is, in our opinion, an attempt to circumvent the legal stipulations, but that is for the ATF to determine.

Regarding Taxes
We all know that Uncle Sam gets what is owed to him. Even people as powerful as Al Capone, Judy Garland, and Abbott & Costello have been brought down by not paying what was due. While we are not suggesting that anyone is currently not paying the United States properly, the issue remains unresolved of who will be paying the FAET taxes on these imported guns. Julia’s statement from his own attorney states that “James D. Julia, Inc. is not liable for paying FAET as it is not the beneficial owner of the firearms.” It goes further to indicate that only FFL dealers would have to pay if they are not using them for personal use or if they import less than 50 firearms per calendar year. However, when Butterfield’s sold the Rolf Muller Collection in 1994, it consisted of mostly antique European revolvers. Little did collectors know that a Federal Excise Tax would be incurred on such items as Lugers. 6 months after the sale a notice arrived stating that they would owe 10% of the entire sale price (including the buyer’s premium). The 50 gun exemption, as of October 1, 2005, did not yet apply. In this case, the guns were imported not singularly, but as a collection. Therefore, there is no “under 50 gun” exemption.

The attorney’s statement further says, “While we are confident in our position, we always caution clients that the TTB is not bound to take a similar view. We also take this opportunity to point out that anyone not our client may treat this summary as general guidance only, and we are specifically disclaiming providing tax or legal advice to anyone except James D. Julia, Inc.” Is the buying public to accept “guidance” from somebody paid by and solely representing Julia or will they heed facts and events that have actually taken place?

Julia’s email ends with a wish that gun collectors will make their own decisions based on fact and reality. We do too. Our article was not an attack. It was a service to collectors who may consider buying from this or other imported collections. Questions remain despite all Julia’s empty assurances.
  • Are the guns properly marked? If so, show us the markings for caliber, model, and country.
  • Are there consequences to owning improperly marked guns?
  • Are improperly marked guns contraband?
  • Who exactly will be paying the taxes on these guns? Are you liable?
  • On experimental guns without a manufacturer’s serial number, were they assigned a number by the importer? If so, where was it placed? We have not yet been shown. Also, can we be assured that it meets the .003 inch depth and 1/16th inch height required of serial numbers?
All Rock Island Auction Company has sought in this whole endeavor is to investigate the ins and outs of imported firearms as an important collection was coming to market. Julia has seen fit to take this to an entirely different level. Therefore, we ask the buying public to demand and insist on complete answers and proof to these very pertinent questions. Collectors want peace of mind, privacy, and to keep the government out of their business. Right now none of those is assured. You be the judge. Is all of our talk about import marks just sour grapes or is it necessary information for collectors? Draw your own conclusions. Protect yourself.

Best of luck to Dr. Sturgess at auction and congratulations on an amazing collection.


Pat Hogan

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