The "custom-of-the-trade provision" of section 303(b) of the Interstate Commerce Act, 49 U.S.C. § 903(b), exempts from Interstate Commerce Commission regulation the carriage by water carrier of "commodities in bulk which are (in accordance with the existing custom of the trade in the handling and transportation of such commodities as of June 1, 1939) loaded and carried without wrappers or containers and received and delivered by the carrier without transportation mark or count." From the time of its enactment in 1940 until 1976, the ICC interpreted this provision to exempt from ICC regulation only the carriage of those commodities actually carried in bulk as of June 1, 1939. In 1975, barge operators filed a petition seeking cancellation of a tariff for the carriage of bulk grains. A Commission administrative law judge concluded that the petitioners had not met their burden of proof that the commodities were exempt under section 303(b).1 On appeal, in response to a suggestion by an intervenor, the Commission's Division 2 reinterpreted that provision to instead exempt the carriage by water of all bulk commodities transported in the manner in which commodities were carried in bulk on June 1, 1939, whether or not the particular commodity in question was carried in bulk on that date. It concluded that all of the commodities involved in the tariff in issue were therefore exempt from regulation, and that the tariff should be cancelled in its entirety.2 A show cause order, inviting any interested party to show cause why the division's conclusions should not be adopted, was published on February 4, 1976.3 The Association of American Railroads (Railroads), although not originally a party, filed a petition in response to this publication seeking reconsideration of the division's reinterpretation of the "custom-of-the-trade provision."4 The division denied this petition,5 and the Commission, in general session, denied the Railroads' subsequent petition seeking a finding that the proceeding involved an issue of general transportation importance.6 The Railroads then filed the present petition for review, and S. C. Loveland Company, a certified water carrier, has intervened.7I.

Section 303(b), as originally enacted in the Transportation Act of 1940,8 excepted the transportation by water carriers of "commodities in bulk" from regulation by the ICC, but provided that this exception would apply only where three criteria were satisfied: (1) "the cargo space of the vessel in which such commodities are transported is being used for the carrying of not more than three such commodities" (the "three-commodity restriction"); (2) the bulk commodities be ones "which are (in accordance with the existing custom of the trade in the handling and transportation of such commodities as of June 1, 1939) loaded and carried without wrappers or containers and received and delivered by the carrier without transportation mark or count" (the "custom-of-the-trade provision"); and (3) the "no-mixing rule."9 In addition, the section provided that "two or more vessels while navigated as a unit (barges) shall be considered to be a single vessel." Each of these restrictions had been subject to criticism, and all except the custom-of-the-trade provision were repealed when the section was amended in 197010 and 1973. Section 303(b) now states:

Nothing in this (part) shall apply to the transportation by water carriers of commodities in bulk. This subsection shall apply only in the case of commodities in bulk which are (in accordance with the existing custom of the trade in the handling and transportation of such commodities as of June 1, 1939) loaded and carried without wrappers or containers and received and delivered by the carrier without transportation mark or count. This subsection shall not apply to transportation subject, at the time this part takes effect, to the provisions of the Intercoastal Shipping Act, 1933, as amended.11

We conclude that the language of the "custom-of-the-trade provision" in the 1940 Act and which was retained without change in the 1970 and 1973 amendments is susceptible on its face to either interpretation urged by the parties to this petition for review. We therefore proceed to consider other indications of the meaning intended by Congress.

The Commission concedes that for 35 years, it interpreted the custom-of-the-trade provision to exclude from regulation only the carriage by water of commodities actually carried in bulk on June 1, 1939.12 The 1973 amendment left the language of the custom-of-the-trade provision unchanged. The Railroads and the intervenor argue that the Congress in 1973 was clearly aware of the Commission's longstanding interpretation of that provision, and that the Commission is barred by the "doctrine of reenactment" from now changing its interpretation. On the other hand, the division in its report and order relied principally on its view that the legislative history of the 1973 amendment justified a reinterpretation of the provision. We find this claim to be unsupported and the Commission in this court does not rely directly on this argument.13 Instead it bases its response primarily upon the division's alternative holding that the new interpretation is necessary because the original interpretation was incorrect.14 In support of this position, however, the Commission contends that "(a) review of the legislative history of Section 303(b) of the Act, particularly as amended in 1973, and as discussed in the Commission's report at issue herein, . . . is indeed the proper one."15 We therefore consider the legislative history of the 1973 amendment and determine what effect, if any, it should have on the disposition of this case.

There is ample evidence in the legislative history of the 1973 amendment that the Congress did not intend thereby to alter the meaning of the custom-of-the-trade provision, and the Commission was therefore well advised in electing not to rely directly upon the division's reading of that history. It was no accident that the 1970 and 1973 amendments left intact only the custom-of-the-trade provision, of the three restrictions in the original section 303(b). For a number of years, the restrictions in section 303(b) presented no problems for barge operators. In later years, however, water carrier operations evolved and tow boats became larger and more powerful, permitting larger tows. The 1940 limitations in section 303(b) made operations increasingly inconvenient and inefficient.16 A number of bills attempting to deal with the "mixing rule" problem were introduced, beginning with the 87th Congress. Bills introduced to the 90th Congress in 1967 would have repealed not only the no-mixing rule and the three-commodity restriction, but also the custom-of-the-trade provision.17 At subcommittee hearings, the elimination of all three restrictions was vigorously supported by the Commission18 and by various shipper representatives.19 The testimony of each assumed the correctness of the Commission's prior interpretation of the custom-of-the-trade provision.

Instead of the sweeping amendment proposed in 1967, the Congress in 1970 adopted a more limited amendment temporarily suspending the effect of the no-mixing rule. In the same Act, Congress directed the Department of Transportation (DOT), with the assistance of the Interstate Commerce Commission and the Secretary of the Army, to "undertake a comprehensive study of the present system of economic regulation of dry bulk commodity transportation," and to complete the study within two years.20 The result of this order was a two-volume report submitted to the Congress in 1973.21 In this report, DOT summarized the existing language and interpretation of section 303(b), collected and analyzed data concerning its application and effect, and recommended permanent statutory amendment. The summary of the meaning of the custom-of-the-trade provision is in accord with the Commission's interpretation at that time.22 DOT concluded that "(t)he Three-Commodity-Restriction is confusing, has never had universal compliance, and has not been the subject of formal enforcement action," and that "(t)he No-Mixing Rule has never directly affected the operating practices of the inland water carriers; in its early years the status of barge technology made the Rule irrelevant while in recent years its enforcement has been held in abeyance."23 The Department therefore recommended that both of these restrictions be repealed.24 The Department, however, reached a contrary conclusion regarding the custom-of-the-trade provision:

After reviewing the detailed records of the regulated dry bulk commodity movements which actually move regulated, and polling a wide and representative sample of barge and chemical industry experts, it was found that sugar is the only commodity moving in significant quantities on the inland waterways that would be affected by dropping the Custom-of-the-Trade provision.25

The Department noted that repeal of the provision would probably have little effect on the price of sugar, and as a result of these findings, recommended that:

No change need be made in the Custom-of-the-Trade Provision at this time. Nevertheless, there exist strong theoretical arguments for doing so at some time in the future. When and if a new dry bulk commodity emerges which, except for the Custom-of-the-Trade Provision, would be eligible for the Section 303(b) exemption, favorable consideration should be given to the elimination of the Provision or to the giving of comparable relief.26

At Senate and House subcommittee hearings, the Department explained its conclusions and recommendations,27 and industry representatives endorsed its views.28 The Commission, however, again argued that the custom-of-the-trade provision should also be repealed.29

In its Report, the Senate Committee on Commerce included the comments of both the Department and the Commission.30 The Department's comments restated the accepted meaning of the custom-of-the-trade provision: "All dry bulk commodities transported by water are exempt from economic regulation provided they were moved in bulk by water on or prior to June 1, 1939."31 The Commission once again recommended the repeal of all three restrictions in section 303(b).32 The Committee, however, adopted the recommendations of the Department of Transportation "that the three commodity restriction and the no mixing rule be permanently repealed," but "that the custom-of-the-trade provision not be altered at this time."33 There was no house report, and the Senate bill, which retained the custom-of-the-trade provision without change from its original 1940 language, was enacted into law.

In review, it appears that Congress was fully advised by the Department as to the meaning of the entire section, including the then existing interpretation of the custom-of-the-trade provision. The Department also recommended (1) repeal of the three commodity restriction and (2) repeal of the no-mixing rule, but (3) that "(n)o change need be made in the custom-of-the-trade provision." So when Congress followed the Department's recommendations by repealing the provisions the Department had recommended and retaining the custom-of-the-trade provision, the conclusion is almost irrebuttable that they intended the latter provision to continue to be interpreted in the manner in which Congress was advised in the report. We thus find no hint in the legislative history of any intent to alter the meaning of the custom-of-the-trade provision.34III.

The legislative history of the 1970 and 1973 amendments, which left the 1940 Act's custom-of-the-trade provision intact, thus reveals that Congress did not intend thereby to change the meaning of that provision. Petitioner and intervenor further contend that in reenacting this provision without change, Congress has precluded a subsequent change in the administrative interpretation of that provision.

The Supreme Court has indicated that in order to bring this "doctrine of reenactment" into play, Congress must not only have been made aware of the administrative interpretation, but must also have given some "affirmative indication" of such intent.35 The legislative history of the two amendments, discussed in the previous part of this opinion, leaves no doubt that Congress was well aware of the Commission's longstanding interpretation of the custom-of-the-trade provision. Both the Commission and the Department of Transportation, in their numerous communications with the Senate and House committees and subcommittees, repeatedly described this undisputed interpretation. The comments of both the Commission and the Department were included in the 1973 Senate Report, the only report on the enacted legislation. The question of affirmative intent, however, requires further analysis.

While the Supreme Court has declined to hold that reenactment of a statute precluded a subsequent reinterpretation where there was not "the slightest affirmative indication" of such intent, Commissioner v. Glenshaw Glass Co., 348 U.S. 426, 431, 75 S. Ct. 473, 99 L. Ed. 483 (1955), it has been willing in appropriate cases to infer such intent from the legislative history of the subsequent legislation. For example, in United States v. Leslie Salt Co., 350 U.S. 383, 76 S. Ct. 416, 100 L. Ed. 441 (1956), the Commissioner of Internal Revenue sought to apply to certain corporate promissory notes a stamp tax applicable only to "debentures." Prior to that time, the Commissioner had consistently considered notes of the type in issue not to be "debentures," and moreover, a similar tax applicable to promissory notes had been repealed by Congress some years earlier. The Court struck down the Commissioner's reinterpretation of the term, concluding that the Commissioner's "original interpretation has had both express and implied congressional acquiescence, through the 1918 amendment to the statute . . . and through Congress having let the administrative interpretation remain undisturbed for so many years."36

In the present case, the legislative history of the two amendments clearly shows that Congress, well aware of the Commission's longstanding and unquestioned interpretation of the custom-of-the-trade provision, expressly rejected the Commission's repeated pleas that the provision be repealed. Congress thus not only expressed its satisfaction with the prior interpretation, but affirmatively concluded that it should not be changed for the time being, whether to assure that particular commodities continued to be regulated37 or simply to avoid too quickly making changes in the regulation of water carriers. On the basis of this legislative history, we conclude that Congress in 1970 and 1973 affirmatively intended to adopt the Commission's well established interpretation of that provision. The Commission was thus precluded in 1975 from radically changing its interpretation of that provision.38

In the alternative, we conclude that the proper meaning of the custom-of-the-trade provision is established by the context of the provision in the Act itself. Additionally, we regard the ICC's longstanding interpretation of the provision as some evidence of its proper interpretation.

First, we note that the Commission's revised interpretation of the provision would render it meaningless. Apart from the "grandfather clause" here in issue, the custom-of-the-trade provision is limited in its application to "commodities in bulk which are . . . loaded and carried without wrappers or containers and received and carried without transportation mark or count." In view of the reasonable meaning of this language and the history of the Act, the Commission has consistently interpreted it to refer to "fungibles, which can be poured, scooped, or shoveled, and which generally are of such a size that they cannot be handled by the piece."39 Such commodities are not tallied by the piece, but constitute "a loose mass which is poured or thrown into a vessel or vehicle without regard to order, and which is restrained during transportation only by the bottom and sides of the carrying vessel and its bulkheads."40 This interpretation is eminently reasonable, and the Commission has not suggested that it has been or should be changed in any way.

The reinterpretation of the parenthetical limitation that the Commission now urges would exempt from regulation any bulk commodity now carried in the same manner as bulk commodities were carried on June 1, 1939. The Commission has not suggested that bulk commodities on that date were handled other than by being "poured, scooped, or shoveled" into vessels or vehicles in which they were "restrained during transportation only by the bottom and sides of the carrying vessel," and without containers, mark or count. Nor has the Commission suggested that any "bulk" commodity presently in existence or foreseeable would be carried in any other way.41 Thus, by reading the parenthetical phrase within the custom-of-the-trade provision to relate only to "methodology," the Commission extends the provision to include all bulk commodities, as defined by section 303(b), and thus renders the parenthetical limitation surplusage. "This construction, therefore, offends the well-settled rule that all parts of a statute, if at all possible, are to be given effect."42 The Commission's attempted reinterpretation would accomplish by administrative fiat what it failed to accomplish through the Congress.

Next, we can divine no rational basis for the distinction drawn by the Commission between sugar, which it continues to find within its regulatory jurisdiction, and other commodities not actually carried "in bulk . . . without wrappers or containers" on June 1, 1939. The Commission concedes that sugar was carried in sacks on that date, and that this does not qualify within the meaning of section 303(b).43 However, since the legislative history of the 1973 amendment indicated that sugar was subject to ICC regulation,44 the division concluded that sugar must continue to be regulated:

It is obvious, however, that for other reasons Congress wished sugar to remain regulated. In this one case, we will adhere to the specific intent of Congress, rather than reasoning from its general intent. Although under the more logical interpretation of its general intent under section 303(b) we might have considered sugar as now exempt if handled in bulk in the appropriate manner, the specific intent of Congress concerning the regulation of this commodity obviously must take precedence.45

But there is no question that sugar is at present handled in bulk in the same manner as other commodities were handled in bulk on June 1, 1939. The Commission has thus offered no explanation in terms of methodology for its different treatment of sugar, much less a colorably rational explanation. Even if the Commission's reinterpretation of the custom-of-the-trade provision were rational in the abstract, its exclusion of sugar without any rational explanation at all in terms of the very basis of the construction it has adopted would render the Commission's order arbitrary and capricious. Indeed, it is difficult to conceive how any rational distinction could be drawn on this ground between bulk sugar and other bulk commodities.

Finally, we note that the Congress in enacting the 1940 Act was perfectly capable of speaking clearly when it intended to refer to the "inherent nature" of commodities, rather than to particular commodities handled "in bulk" as of a specific date. Section 303(e)(2) grants to the Commission the power, upon application and subject to conditions, to exempt from regulation

in addition to the transportation otherwise excluded under this section, transportation by contract carriers by water which, by reason of the inherent nature of the commodities transported, their requirement of special equipment, or their shipment in bulk, is not actually and substantially competitive with transportation by any common carrier subject to this part or part I or part II.46

This discretionary exemption is drafted in terms that leave no doubt that its applicability depends on the manner of carriage and the characteristics of the commodity, and not on whether it was the custom of the trade to carry a particular commodity in a given way at a particular date. This supports the conclusion that the parenthetical phrase in section 303(b), which specifies a precise date, was meant to exempt only the specific commodities so carried on that date.

For all of the foregoing reasons, we conclude that the Commission's attempted reinterpretation of the custom-of-the-trade provision to exclude the intent plainly expressed by inclusion of the specific date is arbitrary and capricious and contrary to the meaning of section 303(b).

Vacated and Remanded.