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https://www.atf.gov/file/11816/download

The pistol stabilizing brace was neither "designed" nor approved to be used as a shoulder stock, and therefore use as a shoulder stock constitutes a "redesign" of the device because a possessor has changed the very function of the item. Any individual letters stating otherwise are contrary to the plain language of the NFA, misapply Federal law, and are hereby revoked.

Any person who intends to use a handgun stabilizing brace as a shoulder stock on a pistol (having a rifled barrel under 16 inches in length or a smooth bore firearm with a barrel under 18 inches in length) must first file an ATF Form 1 and pay the applicable tax because the resulting firearm will be subject to all provisions of the NFA.
 

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My understanding is that the ordinal NFA included handguns and including SBR and SBS made sense to prevent people from bypassing the handgun ban registration. Congress didn't believe it would pass with the handguns listed, so they took them out, but left the SBR and SBS. I believe it was an oversight and unintentional, but I have no proof of that.
It was debated at length. Mr. Frederick is the NRA chairman at the time.

The CHAIRMAN. In what sense is the possession of a pistol essential to the self-defense of people who live in rural communities, as you have stated? Do you mean it is essential to the self-defense of an individual who is out on the highway, or in his home? In what sense is a pistol essential to the self-defense of an individual who lives in a rural community? Why is not a rifle or a shotgun, the possession of which would not be prohibited under this act, sufficient for the self- defense of an individual or an individual's home? In what sense did you mean that? You know, most of the States have laws against carrying concealed weapons.

Mr. FREDERICK. Exactly. I think those are quite proper laws and are the only effective laws.

The CHAIRMAN. Then it can be that you are referring only to the possession of a pistol in the home.

Mr. FREDERICK. No; because many people do find occasion to carry pistols, and do so under license.

The CHAIRMAN. That would not necessarily be a matter of self-defense, would it?

Mr. FREDERICK. Oh, yes, in many, many instances.

The CHAIRMAN. I never heard of it.

Mr. FREDERICK. I have heard of it in hundreds of instances.

Mr. FREAR. My experience is that the average person who carries a revolver is not one who lives in a rural district, but in New York or Chicago and such places that Dillinger and men of his type are found.
Unfortunately, he supported the NFA generally, but he did argue for possession and carrying of pistols. http://www.keepandbeararms.com/nra/nfa.htm
 

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Makes one wonder what the big deal is about open carry today.
Most of the states have no law prohibiting openly carried firearms today. Even that discussion, which you quoted, referred to licensing concealed carry (in context).
No; because many people do find occasion to carry pistols, and do so under license.
 
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