In the 1920's NRA members could buy Krags for as little as $1.50, which was cheap even then. American Legion posts could get them "on loan" from the Army, and no one worried about ever returning them.
As Jim Watson says about later guns, quite a few were nickel or chrome plated for color guards for AL posts, high school and college bands, drill teams and the like. The rust probably did not start under the plating, the rust may have already been there and was just plated over. For the most part, plating was not done by a gun company, but by the local bumper shop.
Harley, you are right about those machineguns. Quite a few posts had and still have a few US or German MGs in the attic. Years ago I was shown some at an AL post that shall be nameless. When I mentioned registration, I got a blank look; no one had ever heard of the NFA or even considered that the guns they "took off Kaiser Bill's guys" might be illegal. I left quietly.