Under the Firearms Owners' Protection Act, commonly known as McClure-Volkmer (its sponsors), Federal firearms license holders are allowed to sell guns at gun shows located in their home State. Further, individuals not federally licensed as gun dealers can sell their personal firearms as a "hobby." Also, the act restricts the ability of the Bureau of Alcohol, Tobacco, and Firearms (ATF) from conducting inspections of the business premises of federally licensed firearms dealers and reduces the record keeping required of federally licensed firearms dealers, specifically eliminating record keeping of ammunition sales. In providing the fuel for the proliferation of gun shows, McClure-Volkmer has helped provide a readily available source of weapons and ammunition for a wide variety of criminals. The first section of this report details the events leading to the passage of the McClure-Volkmer bill, followed by a section that chronicles the debate over allowing Federal firearms license holders to sell at gun shows. It identifies the two changes in the bill that led to the proliferation of gun shows. Another section describes the proliferation of gun shows that followed the passage of the legislation, the competition between licensed dealers and unlicensed hobbyists, the opportunities presented to Class 3 machine-gun dealers by gun shows, and the limitations on law enforcement in policing gun shows. The next section identifies notable gun show participants, such as David Koresh and Timothy McVeigh, and the role gun shows play in the militia movement. How gun shows have become a ready market for stolen military parts is discussed in another section. The study also examines three new developments that may have an effect on gun shows: increased civil litigation; the decrease in the number of Federal firearms license holders; and the first-time sponsorship of shows by the National Rifle Association. The concluding section offers a set of Federal and State policy recommendations based on the study's findings. Appended sample of gun show ads, the 1993 testimony of convicted firearms trafficker Edward Daily III before the House Subcommittee on Crime and Criminal Justice, and the 1993 testimony of Bernard Shaw of the Maryland State Police Licensing Division before the same House Subcommittee