Simkins v Moses H Cone Memorial Hospital Brief and Appendix

    In The

United States Court of Appeals
F o r  t h e  F o u r t h  C i r c u it

MOSES H. CONE MEMORIAL HOSPITAL, 
a corporation, ET AL.,

Defendants-A ppellees.

On Appeal from the United States District Court 
for the Middle District of North Carolina

BRIEF ( COMMUNITY
HOSPITAL, INC., AND A. O. SMITH

No. 8908

G. C. SIMKINS, JR., ET AL., AND 
UNITED STATES OF AMERICA,

Plaintiffs-Appellants,

v.

I pr
T h o r n t o n  H. B r o o k s  

T h o m a s  O . M o o r e , Jr.
Attorneys for Wesley Long Community 
Hospital, Inc., and A. O. Smith

OF COUNSEL:
M c L e n d o n , B r i m , H o l d e r n e s s  & B r o o k s  

440 West Market Street 
Greensboro, North Carolina



TABLE OF CONTENTS

Page

Argument __________________________________  2

1. Background ________________________  2

2. Eaton v. Walker Hospital is Controlling____  2-10

3. Effect of receipt of federal financial
contributions under the Hill-Burton A ct_____10-17

4. Construction of hospitals not a state functional7-19 

Conclusion _________________________________ 19-20

Appendix

Exhibit A _________________________________ A-l

Additional Excerpts from North Carolina
State Plan ___________________________A-2-4

Affidavit of A. O. Smith in Support of Response to 
Plaintiffs’ Motion for Summary Judgment and 
Preliminary Injunction___________________A-5

Hospital Survey and Construction B ill___ _____ A-7

Hospital Construction Act _________________ A-10

A Bill—S. 2625 ______________________ _____A-l 5

i



TABLE OF CASES

Page

Eaton v. Jam es Walker M emorial Hospital, 261 F.
2d 521; cert. den. 359 U. S. 984 ________________  2

H enderson v. Trailway Bus C ompany, 194 F. Supp.
423 (1961) ______________________________ _...19

M cC abe v. A tchison, Topeka and S.F.R. Co.,
235 U. S. 151 (1914) ________________________16

GENERAL STATUTES

General Statutes §§ 131-126.1 through 131-126.17______  3

ii



In The

United States Court of Appeals
F o r  t h e  F o u r t h  C ir c u it

No. 8908

G. C. SIMKINS, JR., ET AL, AND 
UNITED STATES OF AMERICA,

Plaintiffs-Appellants,

v.

MOSES H. CONE MEMORIAL HOSPITAL, 
a corporation, ET AL.,

D efendants-A ppellees.

On Appeal from the United States District Court 

for the Middle District of North Carolina

BRIEF OF WESLEY LONG COMMUNITY 

HOSPITAL, INC., AND A. O. SMITH



2

A R G U M E N T
1. Background

The plaintiffs-appellants (herein referred to as Plaintiffs) 
are Negro physicians-dentists-laymen who instituted a single 
class action on 12 February 1962 in the District Court against 
two different hospitals, The Moses H. Cone Memorial Hos­
pital (herein referred to as Cone Hospital) and Wesley Long 
Community Hospital, Inc. (herein referred to as Long Hos­
pital) . Plaintiffs sought to enjoin the Hospitals from denying 
them, admission to staff and treatment facilities on the basis 
of race. The United States of America (herein referred to as 
United States) was permitted to intervene,1 and has filed a 
brief requesting that the judgment of the District Court be 
reversed for similar reasons as argued by Plaintiffs.

Long Hospital’s factual situation is different from that of 
Cone Hospital in two respects: selection of board of trustees 
and training of nurses. It is believed, however, that the same 
general principles of law are applicable and an effort will be 
made to avoid duplication of argument.

2. Eaton v. Walker Hospital is controlling

Insofar as Long Hospital is concerned, the decision of this 
Court in Eaton v. James Walker M emorial Hospital, 261 F.

V  United States was allowed by the District Court “to intervene as a party to the 
extent necessary for a proper presentation of the facts and law relating to the 
constitutionality of the statute above referred to. W ith reference to motions 
now pending before the court, the United States will be heard, within the 
limitations just mentioned, on the plaintiffs’ motion for summary judgment’’ 
(PI. App. 188a). At the hearing of the case before the District Court on 26 
lune 1962, in arguing the extent of intervention that should be permitted to 
United States, the Attorney General stated: “MR. BARRETT: W ell, we 
have been trying to be as candid as possible with respect to the question of 
full participation. As I say, we do not propose to participate as a party with 
respect to the question of the staff privileges aspect of the case, but beyond 
that, under the intervention statute we believe that under the intervention 
statute that we would have the same rights of participation as if we were a 
party” (Tr. 108-9). United States devotes only seven pages of its brief 
(pp. 40-48) to a discussion of its claim that Section 291e(f) of Title 42 is 
violative of the Constitution. The remaining part of the United States’ brief 
is devoted to a discussion of the merits of the case.



3

2d 521; cert, den. 359 U.S. 984, is controlling. The Eaton 
case was decided in November 1958, with Judge Soper writ­
ing the unanimous opinion for the Court, consisting of Judges 
Sobeloff, Haynesworth and himself. The two cases are on 
“all fours”:

a. The parties in both cases are of the same class. That 
is, the plaintiffs are physicians licensed by the state of North 
Carolina to practice their profession in this state; and the 
defendants are bodies corporate under the laws of the state 
of North Carolina vested with the authority to operate a non­
profit hospital.

b. The jurisdiction asserted and the relief sought are the 
same. In both cases jurisdiction was invoked under 28 U.S.C. 
|| 1331 and 1343(3), and on the civil rights statute, 42 U.S.C. 
111981 and 1983. The relief sought in both cases was an in­
junction restraining the defendants from denying the plain­
tiffs rights because of their race.

c. The same state licensing requirements were in force. In 
both cases the hospitals were licensed by the state of North 
Carolina pursuant to the provisions of General Statutes 
5$ 131-126.1 through 131-126.17, and were subject to the 
same rules and regulations of the North Carolina Medical 
Care Commission.

d. In both cases the hospitals were exempt from ad va­
lorem property taxes levied by the respective cities and coun­
ties in which they were located.

e. Ownership of property. In Eaton, at the time of the 
trial, title to the property was vested in the Board of Managers 
of the hospital. In 1901 the city of Wilmington and the 
county of New Hanover conveyed the hospital as it then 
existed to the Board of Managers to hold in trust so long as it 
should be maintained as such for the benefit of the city and 
county. In case of disuse or abandonment, the property was



4

to revert to the city and county. Subsequently, additional land 
was acquired by the Board of Managers in fee simple without 
restrictions and additional buildings were erected thereon.

The title to all of Long Hospital’s property, both real and 
personal, is vested in it in fee simple without restrictions, and 
without any right of reversion to the city or county. The title 
to its property was not derived from the city or county, but 
rather was acquired from third parties with its own funds.

f. Trustees of hospitals. In Eaton, the original members 
of the hospital’s Board of Managers were appointed pursuant 
to a private act of the North Carolina Legislature. At the 
time of trial, all members of the Board were elected by it and 
it was a self-perpetuating board. The Board of Trustees of 
Long Hospital are elected by it and it is a self-perpetuating 
board. At no time has any member of the Long Hospital 
Board of Trustees been elected or appointed thereto by any 
public agency.

g. Financial contribution by city and county to hospital. 
In Eaton, prior to 1951, the city and county made direct an­
nual contributions for the support, maintenance and opera­
tion of the hospital. These appropriations were derived from 
taxes collected by the city and county. These funds were 
used for the maintenance and operation, as well as construc­
tion of the hospital. Subsequent to 1951, direct payments 
were made by the city and county, pursuant to contract to­
talling in excess of $250,000.00. At the time of the trial, the 
city had no contract with the hospital and was not a source of 
revenue. The county, however, at the time of the trial did pro­
vide funds to the hospital according to contract for the care 
of indigent patients at a negotiated per diem rate. The Pri­
vate Laws of North Carolina of 1901, Chapter 12, provided 
for annual appropriations to the hospital by the city and 
county and required the Board of Managers to make annual 
reports to the city and county concerning the conduct and



5

management of the hospital. There is no indication that this 
statute was ever repealed. All private acts passed prior to 1953 
were held to be unconstitutional by the Supreme Court of 
North Carolina for other reasons.

Long Hospital has never received, directly or indirectly, 
monetary contributions from either the city of Greensboro or 
the county of Guilford.

h. Financial grants or contributions from Federal Gov­
ernment. In Eaton, it was alleged that that hospital had from 
time to time exercised the right of eminent domain, and had 
“received large grants of money from the Federal Government 
for expansion and maintenance of the said hospital.”2 Long 
Hospital also “is the recipient of federal funds under the Hill- 
Burton program in aid of its construction and expansion pro­
gram” (Complaint, par. X, 13a) .

It is quite evident that the facts in the Long Hospital case 
are much stronger for a holding of non-state action than was 
present in the Eaton case. While, as shown, many of the facts 
in the two cases are identical yet there are the following ele­
ments of possible state action in the Eaton case that are not 
present in the Long Hospital case:

1. In Eaton, the original hospital was established on a site 
and the appropriation of certain monies for its maintenance 
was made by the city and county under authority of an act of 
the General Assembly of North Carolina. No analogous situ­
ation exists with Long Hospital.

V  At the hearing on, 26 June 1962 before the District Court on the instant 
motions, counsel for Plaintiffs stated that “the funds were received in, the 
Eaton case under some war-time emergency act” (Tr. 82). The act referred 
to was the Defense Public Works Act (Act of October 14, 1940, as amended 
June 28, 1941), 55 Stat. 361, 42 U.S.lC.A. 1531, et seq. The amount of the 
grant from the Federal Government in Eaton was $508,000.00 and was used 
to build a new wing on the hospital with an operating suite. Although this 
amount and the use thereof is not shown in the record, as one of counsel 
for the plaintiffs in the Eaton case is the same as counsel for Plaintiffs in the 
present case, these facts can be verified.



6

2. The provisions of the deed by which the site of the hos­
pital in Eaton was conveyed by the city and county to the 
Board of Managers of that hospital constituted a conveyance 
upon express trust to operate the hospital for the benefit of 
the city and county, with reverter to the city and county in 
case of disuse or abandonment. No such conveyance from 
the city or county to Long Hospital is involved, and there is 
no right of reverter to the city and county of its property in 
the event of disuse or abandonment.

3. In Eaton, a self-perpetuating governing body was 
placed in charge of the hospital by an act of the Legislature of 
the state in compliance with the wishes of the donor of the 
property. This situation is completely lacking at Long Hos­
pital as it is a voluntarily formed corporation which provides 
for its own Board of Trustees to operate the hospital.

This Court held in Eaton, and correctly we believe, that 
the Walker Memorial Hospital “was not an instrumentality 
of the State but a corporation managed and operated by an 
independent board free from State control.” The facts of the 
instant record clearly show that the same ruling of the Eaton 
case should be applied to Long Hospital.

United States is strangely silent concerning the controlling 
effect of Eaton on the Long Hospital. It refers to the Eaton 
case at only one place in its Brief, page 5, and there it merely 
recites the District Court’s reliance upon the case. It makes 
no attempt to comment upon the ruling in Eaton nor does it 
seek to distinguish it from the present case. Plaintiffs also fail 
to come to real grips with the applicability of the Eaton case 
to the Long Hospital factual situation. Plaintiffs half-heart­
edly attempt to distinguish the two cases by a footnote treat­
ment on page 25 of its Brief. Plaintiffs fail, however, to ade­
quately distinguish the two cases. First, they say that “in 
Eaton all governmental aid in the construction of facilities 
ceased in 1901.” As shown, this is incorrect for the hospital in



7

Eaton “received large grants of money from the Federal Gov­
ernment for expansion and maintenance of the said hospital'’ 
(paragraph 12 of Complaint in Eaton) . Next, the plaintiffs 
say that the hospital in Eaton did not “have to conform to the 
requirements and standards of the Hill-Burton Act”, but at 
the hearing before the District Court the Plaintiffs and the 
defendants “conceded that the Hill-Burton funds received by 
the defendant hospitals should be considered as unrestricted  
funds” (Opinion of District Court, 214-215a) .3 Thus, in de­
termining whether state action results from an acceptance of 
Hill-Burton funds, a recognition that such funds are to be 
treated as though they are unrestricted, makes the two cases 
parallel for, as was pointed out in Eaton (p. 525), the Su­
preme Court has held “in a very similar situation . . . that a 
grant of public land by an act of Congress to the Board of 
Trustees of the University did not make the board a public 
corporation.”

Plaintiffs then argue that Eaton does not control Long 
Hospital because the resources which the hospital there re­
ceived from the government for the treatment of indigent 
patients amounted to only 4.5 per cent of the hospital’s total

3/ At the hearing before the District Court, Plaintiffs’ position with regard to the 
nature of the federal contributions under the Hill-Burton Act is expressly 
stated by counsel in answer to the Court’s inquiry, as follows:
“MR. MELTSNER: I am not sure precisely what you are getting at.

“THE COURT: W hat I am saying is this, that if Congress has enacted a 
statute saying that we are going to make a billion dollars a year available to 
private hospitals for construction on the basis of need, and we will survey, and 
we will have the state to make the survey for us and wre are committed to the 
proposition that we will give fifty percent of the construction cost to provide 
hospital facilities for so many rooms for every 100,000 people throughout the 
United States, and when that survey is made, in order to construct that 
facility, we will give 50 percent of the cost, and nothing is said about how 
you must operate it; we will just give you 50 percent of the cost. That is all 
they say; no1 restrictions. Now would there be difference in that grant to 
those hospitals under those situations than the grant they'' received here from 
the government saying that you may use this money to build the facility 
on a discriminatory basis; and they say, all right, under those circumstances, 
we will accept those funds; is there any difference? Does one make the facility 
more public, or the character of it more public than the other? I understand 
that is the position that counsel for the Defendants take, and I want to know 
your position.

“M R. MELTSNER: That is my position” (Tr. 80-81).



8

income. We know of no rule of law that applies the de 
minimis doctrine to a determination of whether state action 
is present. Even so, Plaintiffs have overlooked the fact that in 
Eaton the original gift of the land and much of its early opera­
tional grants came from the city and county, and that it also 
“received large grants of money from the Federal Govern­
ment for expansion and maintenance of the said hospital” 
(Complaint). The fact that such funds had been received by 
the hospital in previous years does not alter the legal conse­
quences of the grant, and in any event the same situation 
prevails with these hospitals.

Plaintiffs next urge as a reason why Eaton does not control 
here is because “no governmental appointees sat on the Board 
of the hospital in Eaton nor did it participate in any arrange­
ment with state educational institutions.” But, as shown, 
Plaintiffs make no claim that these situations exist at Long 
Hospital.

Plaintiffs recognize that the hospital in Eaton was licensed 
under the same North Carolina law applicable to Long Hos­
pital, but seek to avoid this similarity by saying that the point 
was not argued before this Court or discussed in its opinion. 
Perhaps this point was not expressly argued before this Court 
but it is recognized that the same licensing provisions and pro­
cedures covered the hospitals in both cases and, as aptly ob­
served by the District Court in its opinion (212a): “To 
hold that all persons and businesses required to be licensed 
by the state are; agents of the state would go completely be­
yond anything that has ever been suggested by the courts.”

Finally, Plaintiffs argue that Eaton does not control Long 
Hospital because at the former hospital “segregation was not 
pursuant to authorization of federal law.” This attempted 
distinction begs the question and lacks merit. Long and Cone 
Hospitals have repeatedly stated that their segregation was not 
made pursuant to any authorization contained in the Hill-



9

Burton Act. The District Court in its opinion (220a) ex­
pressly notes that the defendants make no claim to “any right 
or privilege under the separate but equal provisions of the 
Hill-Burton Act.”

It is readily apparent that the only substantial distinctions 
between Long Hospital and the hospital in Eaton lie in facts 
that establish the latter’s governmental involvement to be 
even more real than that of the former. Plaintiffs reject this 
approach and apparently urge the Court to consider only the 
“totality” of the contacts as though the whole were not equal 
to the sum of its parts. This quaint arithmetical analogy, 
taken out of context from Supreme Court dicta, provides a test 
which is more easily espoused than applied. Plaintiffs seek 
to persuade this Court to inject itself into the private affairs of 
Long Hospital by adopting a strained, unreal and semantical 
definition of state action that is unsupported by legal prece­
dent. In effect, they feel that the law as established in the 
Eaton case should be overruled by sociological and ethical 
considerations which only tend to cloud and obscure the legal 
question before the Court. In summary, or in “totality”, the 
governmental contacts of the hospital in Eaton were as 
follows:

(1) Tax exemption

(2) Licensed by state and subject to state regulation pur­
suant to license

(3) Federal grants

(4) Service to the public

(5) History of county and city contributions

(6) Possibility of reverter to local government

(7) Evolution from governmental hospital to private 
hospital



10

(8) Contractual agreement with county for care of in­
digent patients

(9) Majority of Board of Managers originally appointed 
by governmental agencies

In summary, or in “totality”, the governmental contacts of 
Long Hospital are as follows:

(1) Tax exemption

(2) Licensed by state and subject to state regulation pur­
suant to license

(3) Federal grants

(4) Service to the public

In Eaton, the above factors were alleged to be sufficient to 
uphold the jurisdiction of the Court. The District Court dis­
agreed and dismissed the complaint. This Court affirmed the 
dismissal. It is submitted that if there was no jurisdiction 
over the Walker Hospital, a! fortiori, there is no jurisdiction 
over Long Hospital. 3

3. Effect of receipt of federal financial contributions under 
the Hill-Burton Act.

The constitutional impact of governmental financial as­
sistance to Long Hospital can be no greater than that of the 
financial grants to the hospital in Eaton. The injunction 
sought by Plaintiffs would impose Court controls over the 
administration and operation of defendant hospitals on the 
theory that in reality such operation is being performed by the 
sovereign for the asserted reason that defendants are govern­
mental agencies. The factor urged as the catalyst is the Hill- 
Burton monies and the manner of their receipt. It is argued 
that this transforms admittedly private operation and admin­
istration into action somehow characterized as “public.” One



11

objection to this argument is that it overlooks the use to which 
these governmental funds have been put. The governmental 
funds received by the hospital in Eaton were spent for its ac­
tual maintenance, operation and administration. This Court 
properly held that governmental funds as an aid to operation 
does not affect the private nature of the operation. Here it is 
argued that governmental funds as an aid to construction and 
expansion will render the subsequent administration of such 
expanded facilities no longer private in nature. If the govern­
ment, by its financial aid to the operation of the hospital in 
Eaton did not thereby “insinuate” itself into its operation, it 
follows that financial aid to the expansion of Long Hospital 
did not “insinuate” the government into its operation.

United States goes even further by advancing an argument 
for “State action” from a premise which has thus far been 
denied legal precedent. This major premise is set forth in its 
brief as follows (pp. 18-19) :

“Our position is based on the fact that the Hill-Burton 
system contemplates a State obligation to plan for facilities 
to provide adequate hospital service to all the people of 
the State. To the extent that this obligation is carried out 
by otherwise private institutions, th ese  recip ien ts o f  th e  
fed era l grants are a ctin g fo r  th e State and are th ere fo re  
su b je ct , in this resp ect, to  th e  obliga tions im posed  upon  
State agen ts and instrum entalities b y th e F ourteen th  
A mendm ent.” (Emphasis added)

-Stated differently, this argument seems to be that Congress 
has decided that private entities are fulfilling a public need 
and wishes to encourage them by financial grants in aid. How­
ever. because the service they fulfill is of benefit to the public 
in general, they are therefore acting for the state and on its 
behalf Bv virtue of this service th ey  b ecam e th e  state, for 
onlv the state must accord its citizens equal protection and 
due process of law. Thus, there is no longer a sphere within



12

which private citizens can successfully provide basic public 
necessities without in fact becoming the state. It is the nature 
of the function performed rather than the degree of control 
by public officials that determines when private action be­
comes public. If we have correctly interpreted the argument 
of United States, it is far reaching and without judicial 
support.

United States requires something more than financial aid 
in order to have “State action.” For this “something more” 
it turns to the Hill-Burton Act and to fragments of its legisla­
tive history without articulating whether the “something 
more” would be sufficient absent the financial aid. It is sub­
mitted that a proper analysis of the Hill-Burton Act reveals 
this “something more” to be a fiction. In the words of the 
District Court, “it can be fairly said, however, that the only 
significance of these requirements (minimum construction 
and equipment standards) is to insure properly planned and 
well constructed facilities that can be efficiently operated.” 
The Act gives rise to no governmental controls over the Hos­
pitals’ operation and administration. Moreover, it is ques­
tionable whether restrictions of future operations as a condi­
tion of the grant would render Long Hospital a government 
instrumentality in view of the Congressional obligation to in­
sure that the public funds would not be wasted by the recipi­
ent. In short, this “something more” is lacking just as Con­
gress intended it to be, This intent is clearly stated in the fol­
lowing passage in the Act itself:

“Except as otherwise specifically provided, nothing in 
this sub-chapter shall be construed as conferring on any 
Federal officer or employee the right to exercise any super­
vision or control over the administration, personnel, main­
tenance, or operation of any hospital, . . . with respect to 
which any funds have been or may be expended under 
this sub-chapter.” (42 U.S.C. § 291m)



13

Plaintiffs place great stress upon those provisions of the 
Hill-Burton Act which provide that the States desiring to re­
ceive funds must submit a state plan for approval by the Sur­
geon General. This is in fulfillment of the first major pur­
pose of the Act as stated in Section 291, i.e., to assist the states 
to inventory their existing hospitals and develop programs for 
construction of public and o th er  n onp ro fit hospitals. The 
states desiring to receive federal grants to help finance their 
survey must submit a plan which conforms to the require­
ments of Section 291 f. Once this has been done, the first 
major congressional intent has been fulfilled — the only one 
contemplating or involving state action.

The second major purpose of Hill-Burton is stated in 
Section 291 to be to assist in the construction of public and 
o th er n onp ro fit hospitals. It is here that governmental in­
volvement beyond financial assistance ceases. It ceases be­
cause Congress intended it to cease at that point. This is 
clearly established in the provisions of Section 291 m quoted 
above. The effect of Hill-Burton is much more simple and 
straightforward than Plaintiffs and United States would lead 
the Court to believe. Congress decided that it would be a 
good thing to spend federal funds in aid of private hospital 
construction. United States concedes that this without 
“something more” is insufficient to transform otherwise pri­
vate action into state action. They hope to establish this 
something more by pointing to the state plan which must be 
approved by the Surgeon General. But there is no magic in 
Section 291 f. This section simply sets forth the requirements 
for the state plan. Congress merely decided to abdicate to the 
states the congressional responsibility of insuring that the fed­
eral monies will be disbursed in the most efficient manner pos­
sible to ultimate recipients who meet the necessary require­
ments and according to priorities established by the states.

Presumably every federal grant to a private institution



14

should be to fulfill an important need. It is also basic that 
Congress must establish guidelines as to basic qualifications 
of prospective recipients of the grant. Furthermore, it often 
happens that the number of qualified recipients will exceed 
the amount of funds available so a system of priorities must be 
established. Likewise, Congress must be satisfied that the 
funds will be used to further the basic purposes of the grant 
itself. It would be of no avail to grant funds to a private 
school for the construction of a new library if the school is 
free to use the money to build a football stadium, or a library 
that will collapse in two years, or a library without book­
shelves. Finally, it is necessary to gather together a group of 
citizens to administer the distribution of the funds so that the 
foregoing restrictions will be followed. In this sense, there is 
no such thing as an unrestricted grant. It is submitted that 
Hill-Burton goes no further than what is in keeping with 
sound fiscal policy. The United States’ brief (pp. 28-29, p. 
29, fn 20) recognizes that the Act and its legislative history is 
replete with provisions and language indicating that the Hill- 
Burton Act constitutes merely a program of federal grants-in- 
aid. It is submitted that the simple answer to the simple ques­
tion posed by the case at bar can be found in these provisions.

Plaintiffs seek to persuade this Court that the provisions 
of Section 29le  (f) somehow change the private nature of the 
Hospital corporations. The discussion is understandably 
vague and precedents cited deal mostly with situations of state 
enforcement of criminal statutes. Perhaps a close reading of 
the discrimination provisions in the Act may serve to clear 
the air. First, it must be clearly kept in mind that the Act 
requires n o th in g  of the hospitals in the way of discrimina­
tion or non-discrimination. United States apparently concedes 
that Congress is under no obligation to do so (Brief, p. 39) . 
The Surgeon General is given an option  to require nondis­
crimination as a condition of the grant. The record shows that



15

such option was not exercised in the instant case. A reason for 
the non-requirement of nondiscrimination is that separate hos­
pital facilities are available for separate population groups in 
the Greensboro area. In such a case Congress precluded the 
Surgeon General from requiring a nondiscrimination pledge 
from a prospective recipient. Presumably the Surgeon General 
would have no authority to require nondiscrimination unless 
he were specifically authorized to do so by Congress. Con­
gress has authorized him to do so if he wishes but only if 
certain conditions do not exist. Similarly, Congress author­
ized him to require a prospective recipient to treat indigent 
patients but limited this authority to those situations where 
it would be financially feasible for the recipient to do so. This 
is an entirely different situation from one in which a recipient 
was required to discriminate in order to be eligible for funds. 
To say that Congress sanctioned discrimination would lead to 
the conclusion that it would have impliedly sanctioned dis­
crimination by private hospitals had it remained altogether 
silent on the subject.

Hill-Burton Act is not governmental sanction of discrimi­
nation. Plaintiffs argue that “discrimination was affirmatively 
sanctioned by a federal statute and federal regulations, and by 
a State Plan for hospital construction on a segregated basis” 
(Brief, p. 31). United States frames the same argument in a 
slightly different manner: “The essential point is that, even 
in the case of otherwise private hospitals, Congress was un­
willing to leave the avoidance of unconstitutional discrimina­
tion to free private decision. Congress perceived and forced 
the States (and also the hospitals choosing to participate in 
the program) to accept a governmental obligation. . . . Any­
one taking the money would take it, as it were, subject to the 
trust, and in performing the trust the taker would be acting 
for the government and subject, in this respect, to its consti­
tutional obligations” (Brief, pp. 33-34). In support of this



16

argument Plaintiffs and United States both place reliance 
upon the case of M cC abe v. A tchison, Topeka and S.F.R. 
Co., 235 U.S. 151 (1914). Reliance upon this decision is 
not well founded. There the Supreme Court held that the 
allegations of the complaint of the Negro plaintiffs were too 
vague to justify the granting of an injunction. In this respect, 
the decision below was affirmed. However, as additional 
grounds for denying relief, the Circuit Court of Appeals had 
held that the Oklahoma statute authorizing absolute discrimi­
nation on railroad luxury facilities was not in conflict with 
the Fourteenth Amendment as it was competent for the state 
legislature to consider the limited demand by the Negro race 
for such accommodations. The Supreme Court disagreed 
with this without considering or discussing the proper way in 
which the constitutionality of such a statute could be called 
into question. The Court did not indicate that an injunction 
would have been allowed if plaintiffs could have shown irre­
parable injury. Mr. Justice Plughes theorized that if a private 
corporation w hile a ctin g under authority o f  state law, deprives 
an individual of his Fourteenth Amendment rights such indi­
vidual may properly complain that his privilege has been in­
vaded. While it is difficult to speculate as to whether the 
Court felt that the defendants in question were acting under 
authority of state law in that case since the point was not 
raised, it should be noted, however, that by virtue of the 
wording of the statute in question it was necessary for the 
carrier to rely on the statutory exception in order to be re­
moved from the broad mandatory provisions of the statute.

In contrast, the Hill-Burton Act does not impose any 
obligation upon the hospitals to desegregate or to maintain 
segregated facilities. A conclusive answer to the argument of 
Plaintiffs and United States is the fact that one of the defend­
ants herein, Cone Hospital, maintains a non-segregated hos­
pital to a limited degree (see Plaintiffs’ Brief, p. 5, fn 4, as to



17

admission of Negro patients, and p. 6 as to its admission of 
Negro physicians-dentists to staff privileges). The finding of 
the District Court on this point needs to be repeated (214a) :

“Racial discrimination, it should be emphasized, is per­
mitted, not required. As evidence of the fact that the de­
fendants do not consider themselves obligated under the 
agreement permitting segregation, the Cone Hospital has 
for some time admitted Negro patients on a limited basis. 
Additionally, the defendants have repeatedly stated, both 
in their briefs and oral arguments, that they in no way rely 
upon the provisions of the Hill-Burton Act, or their agree­
ment with the North Carolina Medical Care Commission, 
which permit discrimination. . . . ”

United States says in its brief (p. 33): “Whether in the ab­
sence of this governmental supervision and control racially 
restrictive admission policies of Hill-Burton hospitals would 
otherwise be purely 'private action’ and subject to no consti­
tutional strictures need not be considered.” United States 
thereby begs the very question here presented, because in fact 
we do have an “absence of this governmental supervision.”

4. Construction of hospitals not a state function.
United States at pages 18-22 of its brief advances the 

argument that the Hill-Burton system contemplates a State 
obligation to plan for facilities to provide for hospital service 
to all the people, and that when a private institution becomes 
the recipient of federal grants it “becomes pro tanto a state in­
strumentality with concomitant obligations” (p. 20). This 
theory is recurrent in various forms throughout the briefs of 
both Plaintiffs and United States. Thus, United States argues 
that if private facilities appear inadequate in a particular area 
the State would have to fill in with governmental institutions 
(p. 20);  and that the State has assumed as a State function 
the obligation of planning for adequate hospital care (pp.



18

22-23.) United States urges that Congress regarded the 
availability of hospital services to be a State responsibility, and 
argues that these defendant hospitals fulfill a public function 
which the State would have to perform if the hospitals did not.

This simply is not the case. Congress did not intend that 
the Federal or State government enter the business of provid­
ing hospital services. This was specifically left to the individ­
ual recipients of the funds on a voluntary basis. If a group of 
citizens in an area in which hospital facilities are inadequate 
do not desire to construct a hospital or expand the facilities 
then existing, no pressures are exerted by the State to con­
struct same nor will it step in and provide the facilities itself. 
The obligation to provide the facilities remains with the citi­
zens. The funds are made available only on a “matching 
basis”; that is, the private institution or public hospital must 
put up its own funds to match those received under Hill- 
Burton. The obligation of the State is only to plan in the 
generally accepted sense of that word, and to insure a system 
of priorities for distribution of the Federal funds to areas 
where there is the greater need. At the time of the passage of 
the Act, there were many areas of North Carolina in which no 
hospital facilities whatsoever were available and indeed this 
situation presently exists. The Government thus has not effec­
tively “planned” facilities for these areas, in the sense that it 
has gone into the business of affirmatively providing facilities 
there. This is not a State obligation, and Congress did not 
intend it to be. In fact, Congress took pains to insure that 
the Act would not produce such a result. The States do survey 
and submit “plans”, but this is for the sole purpose of insur­
ing equitable distribution and proper administration of the 
Federal funds.

Furthermore, even if Long Hospital were providing a serv­
ice which is of a type that the State had also assumed an obli­
gation to provide, there is no legal precedent for the proposi­



19

tion that this is State action within the meaning of the con­
stitution. Plaintiffs and United States in this regard have tried 
to equate hospital care with public education which is a State 
obligation to furnish. As demonstrated above, this is not the 
case with medical facilities. Assuming, however, that furnish­
ing hospital care could be fairly classified as a State obligation, 
Long Hospital is still no more subject to constitutional restric­
tions than a good faith private college which receives Federal 
funds for construction of a research center or a new wing to 
its library. Here again Plaintiffs and United States miscon­
ceive the basic functioning of our Federal form of Govern­
ment. When private citizens render service to the public, they 
do not thereby become the sovereign, even in those areas 
where the State has also chosen to act. And merely because 
the State helps in the administration and disbursement of 
federal funds to the end that more people may have medical 
facilities available, it does not thereby make the construction 
and expansion of the facilities a State obligation.

CONCLUSION
The principle of law applicable to a determination of this 

case was succinctly stated by Judge Bryan to be: “Racial seg­
regation on property in private demesne has never in law been 
condemnable. Indeed, the occupant may lawfully forbid any 
and all persons, regardless of his reason or their race or reli­
gion, to enter or remain upon any part of his premises which 
are not devoted to a public use.”4/

This Court has previously applied such principle of law to 
facts parallel with those of Long Hospital in Eaton, and there 
affirmed the dismissal of the complaint by the District Court.

As stated by Judge Soper in Eaton, the Court may not 
take into account “the ethical quality of the action’7 of the 
hospitals. As Long Hospital is a private corporation whose
i/ H enderson v. Trailway Bus Company, 194 F. Supp. 423 (1961). Three-judge 

court composed of Judges Boreman, Bryan, and Lewis, American Civil Lib­
erties Union appeared as amicus curiae.



20

premises are not devoted to a public use and as it is not an 
instrumentality of the State, neither a sociological-economic- 
political argument nor a strained construction of Congres­
sional purpose will save this complaint from dismissal in a fed­
eral court. If the doors of Long Hospital are to be involun­
tarily opened to the public prospectively, the keys are in the 
possession of the legislature,5/ or of the executive,6/ but are 
not to be found retroactively in the judiciary.7/

The Hill-Burton Act was enacted into law in 1946, and 
since that date the disbursement of millions of dollars have 
been approved by the Surgeon General under State plans for 
territorial areas where separate hospital facilities were pro­
vided for separate population groups. Congress has not 
amended the law since its enactment. United States has not 
heretofore concerned itself with the administration of the 
Act. This action and intervention sixteen years after the en­
actment of the Act comes late in the day in an effort to find 
a congressional intent that never existed.

The judgment of the District Court was correct and 
should be affirmed.

Respectfully submitted,
T h o r n t o n  H . B r o o k s  

T h o m a s  O. M o o r e , J r .

A ttorneys fo r  W esley  L ong C om m unity  
Hospital, In c, and A. O. Smith

OF COUNSEL:
M c L e n d o n , B r i m , H o l d e r n e s s  & B r o o k s  

440 West Market Street 
Greensboro, North Carolina

5/ See S.2625, a bill to' amend the Act to prohibit discrimination in any respect 
on account of race, creed, or color in hospital facilities, Appendix p. A-l S, post.

6/ Cf. Executive Order 11063, issued 20 November 1962, providing that racial 
and religious discrimination in the sale or rental of federally owned, operated 
or finan ced  housing is forbidden for the future. The Order provides that as to 
past housing with federal financial assistance the appropriate federal agencies 
will seek to promote the voluntary abandonment of discrimination.

V  Eaton v. James Walker M emorial Hospital, supra.



Appendix



Exhibit A—Attached to Part I of Project Construction Appli­
cation of Long Hospital—Item D (See Plaintiffs’ Appendix 
93a).

EXHIBIT “A”

Supplement to Section 5D, Part 1, Project Construction Ap- 
cation for Project No. NC-311, Wesley Long Community 
Hospital, Greensboro, North Carolina, completed according 
to Instructions for Filling Out the Project Construction Appli­
cation, Form PHS-62(HF).

1. Nature of Construction:

The proposed 150 bed Wesley Long Community LIos- 
pital will replace the existing 78 bed Wesley Long Com­
munity Hospital at Greensboro, North Carolina. At 
the completion of the proposed new project, the Board 
of Trustees of Wesley Long Community Hospital have 
agreed, by resolution, to abandon the existing 78 bed 
facility for hospital use. l ir e  new hospital will be con­
structed of modern, lire resistant and functional 
materials.

2. Need for Project:

The Guilford County area has a civilian population of 
approximately 144,859. Based on the area ratio there is 
a need of 652 beds. Seven hundred fifty-four (754) have 
been planned for the area and at present time 451 suit­
able beds exist. There remains an additional need of 
303 hospital beds. Only 59.8% of needs have been met.

3. Nature of the Program for Project:

The proposed hospital will offer services of a general 
hospital — medical, surgical, obstetrical and pediatrics.



A-2

Beds will be assigned approximately:
Medical — 35%
Surgical — 30%
Obstetrical — 2 5 % 
Pediatrics — 10%

There is a medical staff of sufficient number to staff the 
hospital. A nursing staff, technicians and other person­
nel are and will continue to be available.

4. General Remarks:
No other factors.

ADDITIONAL EXCERPTS FROM 
NORTH CAROLINA STATE PLAN

GENERAL HOSPITALS
For purposes of planning, the Commission has tradition­

ally designated the county as the hospital service area. In sev­
eral instances to allow for local considerations, one or more 
counties have been combined in one service area. Several 
counties have, for the same reason, been subdivided into the 
service areas. While the county is accepted as the service 
area, the Commission exercises discretion with regard to ap­
proving applications for hospital projects where, in view of 
county population and other local factors, a hospital is not 
considered to be needed or the ability of the area to staff and 
support a hospital adequately is questionable. Accordingly, 
the Commission is under no obligation to approve a hospital 
for a county merely on the basis there are no existing facilities 
within the area.

Occupancy data for the individual hospitals have been ob­
tained from reports recently submitted for licensing purposes. 
Substantial variations in the bed count from previous revi­
sions have been explained by footnote on Form PHS-5.



A-3

Initially approved projects for which Part 1 of the Project 
Construction Application has been, or is in the process of 
being, submitted for general hospital construction have been 
included in the Plan as existing facilities. Also, construction 
of additional general hospital facilities without federal aid 
have been shown as existing facilities provided that contracts 
have been awarded.

Following are the procedures used for assigning beds to 
General Hospital areas to arrive at relative need:

Areas are classified (a) Base—An area having at least 
one general hospital with a bed capacity of 200 or more 
beds and having a comprehensive representation of the 
various specialties of medicine, (b) Intermediate—An area 
having or that will have at least one general hospital with 
a bed capacity of at least 100 beds, (c) Plural—Any area 
not designated as Base or Intermediate.

In lieu of the method previously used for assigning 
general hospital beds, the Commission, for the purposes of 
this revision of the Plan, has assigned each hospital area 
the minimum of 2.5 beds per thousand and in cases where 
utilization and the factors specified below merit beds in 
excess of 2.5 per thousand, the beds planned for such areas 
have been adjusted.

There is no justification for the arbitrary assignment of 
beds on the basis of 4.5 per thousand for Base areas, 4 per 
thousand for Intermediate areas and 2.5 for Rural areas. 
This in the past has resulted in ridiculous incidents. In 
realization of the fact that local conditions will influence 
bed need and that beds are generally assigned in accord­
ance with the above rather arbitrary consideration, the fol­
lowing method provides more uniformity in distribution 
in accordance with anticipated need for the following year. 
The factors listed below have been utilized in exceptional



A-4

areas where the 2.5 beds per thousand ratio does not satisfy
immediate or long range needs:

A. M etropolitan  Areas having dense population concen­
tration, high utilization of existing facilities and with 
a comprehensive representation of medical specialties.

B. H ighly Industrialized Areas with a relatively dense 
population.

C. D efen se Areas in which additional beds should be 
planned to care for dependents of Service Personnel 
and an influx of Civilian Personnel.

D. R esort Areas in which additional beds should be 
planned to allow for peak seasonal loads.

E. D em onstrated N eed  in an area (1) for hospitals of 
50 beds or less with occupancy of 60% or more and 
(2) for hospitals with beds in excess of 50 with occu­
pancy of 75% or more.

F. Existing Facilities — All areas are given credit for exist­
ing facilities regardless of utilization.

G. Areas w ith  T ea ch in g Hospitals A ssociated w ith  
S chools o f  M ed icin e (M edica l C enters) — See expla­
nation under “Special Areas.”

These areas have been indicated on Form “Medical Facili­
ties Summary” under the Area Column.

# £ # # #

For planning purposes, all facilities of 15 beds and less are 
classified as replaceable in view of the fact that it can be 
assumed that hospitals of such limited size cannot offer the 
broad services expected of the general hospital. Facilities of 
this category, therefore, are omitted from the State Plan.



A-5

AFFIDAVIT OF A. O. SMITH IN SUPPORT OF RE­
SPONSE TO PLAINTIFFS’ MOTION FOR SUMMARY 
JUDGMENT AND PRELIMINARY INJUNCTION 

(FILED: 8 JUNE 1962)

A F F I D A V I T

A. O. SMITH, first being duly sworn, deposes and says:

I.

That he resides in Greensboro, North Carolina, and has 
served as Administrator of Wesley Long Community Hos­
pital, Inc., for twenty-three years. That he is familiar with the 
hospital and medical facilities in the county in which this hos­
pital is located, namely, Guilford County, North Carolina.

II.

That L. Richardson Memorial Hospital, a hospital serving 
Negroes in the community of Greensboro and an applicant 
for Hilll-Burton funds for its construction and expansion pro­
gram, has on hand and in operation a diagnostic X-ray ma­
chine and complete available facilities to provide periodic 
clinical evaluation of a person who has a confirmed gastric 
ulcer of thirty-five years duration. That the said L. Richard­
son Memorial Plospital has employed on its staff a qualified 
and competent radiologist to operate the diagnostic X-ray 
machine and facilities available at such hospital, and there 
are other members of the staff of that hospital who can make 
periodic clinical evaluations of a person suffering from a con­
firmed gastric ulcer, including the making of necessary labora­
tory procedures and tests. That the medical equipment and 
facilities for the treatment of a confirmed gastric ulcer at 
Wesley Long Community Hospital, Inc., are believed to be 
no more complete nor better than those available at the L. 
Richardson Memorial Hospital, or hospitals in High Point, or 
at the offices of orivate physicians.



A-6

III.

That Wesley Long Community Hospital, Inc., has no 
special dental facilities applicable to the removal of impacted 
teeth. That although it has a dental chair as is commonly 
found in a dentist’s office, and an oral rinse basin attached 
thereto such as found in any dentist’s office, yet these facili­
ties are not used in the removal of impacted teeth. When 
patients are brought to Wesley Long Community Hospital, 
Inc., for the removal of impacted teeth they are operated upon 
on general operating tables such as used for general opera­
tions. The dental surgeons who perform operations at Wes­
ley Long bring their own instruments and equipment and the 
hospital does not maintain any special dental equipment for 
their use. The dental facilities available at L. Richardson Me­
morial Hospital for the removal of an impacted molar tooth 
are equal to those at Wesley Long, and impacted molars are 
removed at that hospital by dental surgeons in the regular 
course.

This the 7th day of June, 1962.

/s/ A. O. SMITH 
Affiant

SWORN to and subscribed before 
me this the 7th day of June, 1962.
/s/ JOYCE F. TROGDON 

Notary Public
My Commission Expires: June 5, 1963.

CALENDAR NO. 678

79TH CONGRESS :
1st SESSION :

S E N A T E
: REPORT 
: NO. 674



A-7

HOSPITAL SURVEY AND CONSTRUCTION BILL

OCTOBER 30, 1945. — Ordered to be printed

MR. HILL, from the Committee on Education and Labor, 
submitted the following

R E P O R T
[To accompany S. 191]

The Committee on Education and Labor to whom was 
referred the bill (S. 191) to amend the Public Health Service 
Act to authorize grants to the States for surveying their hos­
pitals and public health centers and for planning construction 
of additional facilities, and to authorize grants to assist in 
such construction, having considered the same, report favor­
ably thereon with an amendment in the nature of a substitute 
and recommend that the bill as amended do pass.

# # # #

II. SUMMARY OF BASIC PROVISIONS OF BILL 
In brief summary, S. 191 proposes a program of Federal 

grants-in-aid for two purposes:

1. To assist the States to ascertain their hospital and 
public-health-facility needs through State-wide surveys and 
to develop state-wide programs for construction of those 
facilities needed to supplement existing facilities so as to 
serve all the people of the State, and

2. To aid in the construction of those necessary facili­
ties for public and voluntary nonprofit hospitals and for 
public health centers, which State and local resources can 
help build and can maintain, and which are in conformity 
with the approved State construction program and the 
standards for construction projects required under the bill.

An aDpropriation of $5,000,000 is authorized for the survey



A-8

and planning features of the bill, and $75,000,000 for each 
of the five fiscal years 1947 to 1951 for the construction 
program.

IV. SPECIAL PROBLEMS CONSIDERED BY 
COMMITTEE

*  *  *  *

A related problem intensively studied by the committee 
was the assurance of the maintenance and operation of the 
facilities which would be built under this program. Because 
of the provision in this bill requiring any applicant for con­
struction assistance to assure that financial support will be 
available for maintenance and operation of the facility when 
built, there is the danger that the communities having the 
greatest need for such facilities may be unable to secure them 
unless the State comes to their aid. In recommending this 
bill, the committee recognizes that S. 191 is addressed only 
to the provision of physical plant, and that it does not directly 
deal with the maintenance and operation problem, which is a 
serious one. It is the conclusion of the committee that assist­
ance in the cost of maintenance and operation of hospitals in 
the neediest areas should be considered in separate legislation, 
when more information is available from the surveys to be 
made.

* * * #

V. ANALYSIS OF BILL 
PART A. PURPOSES

# # # #

The bill is not a Federal hospital construction bill. The 
need for a country-wide program of hospital construction has 
been demonstrated. It remained for the committee to con­
sider and determine the relationship that should exist between 
the Federal Government and the States in planning and carry­
ing out such a program. The committee believes that a Fed-



A-9

eral-aid program of the character set forth in the reported bill, 
which will supplement State and. loca l funds for planning and 
carrying out a construction program, but will at the same time 
encourage the States to assume the responsibility for carrying 
out the program to the greatest possible extent consistent with 
a proper check upon expenditure of Federal appropriations, 
will be most effective in a long-range hospital-construction 
program.

# # # #

PART C. CONSTRUCTION
❖  # # #

G eneral regu lations. . . . The committee recognizes the 
impracticability, as a general rule, of attempting to write de­
tailed administrative regulations into a statute. At the same 
time, having in mind the underlying purpose of preserving so 
far as practicable the independence of the States in carrying 
out their plans, the committee felt that the Congress should 
specify general requirements and limit the Federal Govern­
ment’s regulatory control to those requirements. The matters 
in question were given most careful consideration and it is 
believed the scope of the Federal regulatory powers is con­
sistent with effective Federal control of appropriated moneys.

# *  *  *

PART D. MISCELLANEOUS
*  # # #

The concluding section, added by the committee amend­
ment, would make clear that except in the matters specifically 
dealt with elsewhere in the title, the title does not confer on 
any Federal officer or employee any supervisory authority over 
the administration, personnel, maintenance, or operation of 
any hospital receiving Federal aid under the title.



A-10

HOSPITAL CONSTRUCTION ACT 
H E A R I N G S  
BEFORE THE

COMMITTEE ON EDUCATION AND LABOR 
U N I T E D  S T A T E S  S E N A T E  

SEVENTY-NINTH CONGRESS 
FIRST SESSION 

ON 
S. 191

A BILL TO AMEND THE PUBLIC HEALTH SERVICE 
ACT TO AUTHORIZE GRANTS TO THE STATES 
FOR SURVEYING THEIR HOSPITALS AND PUBLIC 
HEALTH CENTERS AND FOR PLANNING CON­
STRUCTION OF ADDITIONAL FACILITIES, AND 
TO AUTHORIZE GRANTS TO ASSIST IN SUCH 
CONSTRUCTION.

FEBRUARY 26, 27, 28, MARCH 12, 13, AND 14, 1945

S. 191 was introduced into the Senate by Senator Lister 
Hill of Alabama and Senator Harold Burton of Ohio. At the 
Hearings before the Senate Committee on Education and 
Labor on February 26, 1945, Senator Hill made a statement 
with reference to the Bill. Among his statements are the fol­
lowing:

He pointed out that several possible methods of approach 
had been explored by the Subcommittee and that it was 
agreed that certain broad general principles be made a part of 
any federal-aid legislation. One of these principles was that 
“voluntary nonprofit hospitals as well as State, county, and 
municipal hospitals shall be eligible for assistance” (page 8). 
“Accordingly, after due and careful consideration of all the



A-ll

factors mentioned before, Senator Burton and I introduced 
into the Senate as an amendment to the public health service 
law of 1944 a bill known as Senate bill 191, ‘The Hospital 
Construction Act.’ ” (Page 8).

Statement of Dr. Donald C. Smeltzer, President, Ameri­
can Hospital Association, page 14:

“This committee is undoubtedly familiar with the 
background of the. nonprofit community hospital. Organ­
ized by the citizens of the community, these hospitals now 
render a major portion of the general hospital care to the 
citizens of this country. Many of these voluntary hospitals 
are operated by the various churches. Their organization 
and support results from the finest attitudes in our society. 
Private charity through these organizations endeavors to 
assist in the healing of all members of society. This bill 
provides that Federal funds may be granted to nonprofit 
hospitals and to hospitals owned and operated by subdivi­
sions of Government. The voluntary hospitals of this 
country have played a dominant role in developing im­
provements in hospital methods and in raising the quality 
of hospital care for the people of this country. Public hos­
pitals are needed, particularly for the care of mental pa­
tients and the tuberculous. However, it is fortunate that 
in legislation with the broad aims indicated in this bill, 
provision is made for maintaining the best in our present 
system of hospital service by making possible grants to 
both nonprofit and governmental hospitals/'

February 27, 1945, Statement of Dr. Thomas Parran, Sur­
geon General, United States Public Health Service:

“DR. PARRAN. From the above concept, it should 
be clear that I am not recommending a system of federally 
operated hospitals. On the contrary, what I am suggesting 
and what Senate bill 191 would provide is that the Federal



A-12

Government help the States to fill out the missing pieces 
in the present hospital pattern and that the hos­
pitals continue to be under local government and volun­
tary management as they are now. Quite naturally, a com­
pletely integrated hospital system such as I have described 
is an objective to be accomplished by education, mutual 
agreement, voluntary effort and such encouragement as 
government may be able to offer.” (Page 60)

❖  # #

"DR. PARRAN. As to one aspect of your question, or 
statement, Senator Taft, including the question which I 
think you raised yesterday specifically, that is, would it be 
more desirable to authorize loans instead of grants, or 
loans as well as grants, for the construction of hospitals 
and other health facilities, I think that is a point which 
this committee might wish to consider.” (Page 77)

* * *

Statement of William B. Umstead, Durham, North Caro­
lina, former Congressman. Appearing as personal representa 
tive of the Governor of North Carolina:

"In February 1944 the Governor of our State, appoint­
ed a commission of 50 representative North Carolinians, 
including leading physicians and laymen, to make a survey 
of our hospital and medical needs and to recommend a 
program to the people and the General Assembly of North 
Carolina. Among other things, this commission found 
that 41 States of the Union now rank ahead of North 
Carolina in the number of hospital beds per thousand 
population; 44 States rank ahead of North Carolina in 
the number of physicians per thousand population; 40 
States have a smaller percentage of mothers dying in child­
birth; 38 States have a small percentage of infant deaths, 
and in 1944, 47 States had a smaller percentage of selec­



A-13

tive-service rejections for physical defects. North Carolina, 
with a population of approximately three and one-half 
millions, has only 1 city with over 100,000 inhabitants. 
Most of our people live in rural areas and small towns. The 
commission found: There are 2.37 hospital beds per thou­
sand population; there are 34 counties without hospitals; 
for our Negro population, which is approximately 1,000,- 
000, there are 1.66 hospital beds per thousand; we have 1 
physician per 1,938 population.

“Many other interesting and impressive facts were dis­
closed by the commission. These are sufficient, however, 
to clearly demonstrate the need for additional doctors and 
hospital facilities in North Carolina.” (Page 283)

“The proposed plan lays a solid foundation for State 
cooperation with the Federal Government, as required by 
Senate bill 191, and designates the North Carolina Medi­
cal Care Commission as the agency of the State for the 
administration of the plan as proposed in the senate bill 
referred to. It also provides for the creation of an advisory 
council, as required by the Hill-Burton bill.” (Page 284)

* # #

“SENATOR SMITPI. Mr. Umstead, you confirm 
Dr. Reynolds’ statement that probably, if this plan goes 
through, North Carolina can take care of the maintenance 
problem. I notice in your bill you provide maintenance 
for the indigent people who cannot provide for their own 
care.

“MR. UMSTEAD. Yes, Senator. It is not contem­
plated, however, under the proposed plan in our State, to 
which I referred, that the State government will have any­
thing to do, as such, with the local operation of the hos­



A-14

pital unit or public-health center, except insofar as it 
would be necessary for that hospital unit to meet the re­
quirements of the commission before it could participate 
in the plan and receive payment for indigent patients.

“SENATOR SMITH. You plan to decentralize right 
down to the local unit?

“MR. UMSTEAD. Yes, sir. The financial condition 
of the area or the county, the means at their command, 
their own efforts, the needs of the hospital, and various 
other things, would enter into the decision of our commis­
sion, as I understand it, in dealing with the necessity of a 
hospital at that particular place. When the necessity has 
been established in accordance with the qualifications laid 
down by the commission — and, of course, I do not know 
what they will be, except as to certain restrictions and re­
quirements set forth in the bill — have been complied with 
and the construction completed and the hospital 
equipped, I know of nothing in the proposed State legis­
lation which would give to the commission the control of 
the operation of that hospital unit.

“If I may go one step further, I think it would be, at 
least it is my opinion that it would be, exceedingly difficult 
and very unwise for either the State or the Federal Gov­
ernment to undertake to go so far as to assume the main­
tenance and the operating responsibility for the local hos­
pital unit. [Page 284]

*  $  *

‘SENATOR DONNELL. Would you favor the ac­
ceptance by your State of Federal funds for the operation 
of a hospital if that acceptance involved giving to the 
Federal Government the right to determine the number 
of doctors, the number of nurses, the medical treatment, 
and the type of equipment in the local hospital?



A-15

“MR. UMSTEAD. You mean if it gave to the Fed­
eral Government the right to control, direct, and supervise 
the operation of the hospital unit?

“SENATOR DONNELL. Or to veto the views of the 
local authorities.

“MR. UMSTEAD. Speaking for myself, Senator, I 
would not be in favor of that.

“SENATOR DONNELL. Yes, sir.” (Page 285)

87th CONGRESS 
1st Session

S. 2625

IN THE SENATE OF THE UNITED STATES 
September 23, 1961

M r . Javits introduced the following bill; which was read 
twice and referred to the Committee on Labor and 

Public Welfare

A BILL

To amend the Hospital Survey and Construction Act to pro­
hibit discrimination in any respect whatsoever on account 
of race, creed, or color in hospital facilities.

Be it en a cted  by th e Senate and H ouse o f  R epresen ta tives 
o f  th e  U nited States o f  America in C ongress assem bled , That 
subsection (f) of section 622 of the Hospital Survey and Con­
struction Act, as amended, is further amended to read as 
follows:



A-16

“That the State plan shall provide for adequate hospital 
facilities for the people residing in a State, without discrimi­
nation in any respect whatsoever on account of race, creed, or 
color, and shall provide for adequate hospital facilities for per­
sons unable to pay therefor. Such regulation shall require 
that before approval of any application for a hospital or addi­
tion to a hospital is recommended by a State agency, assur­
ance shall be received by the State from the applicant that (1) 
such hospital or addition to a hospital will be made available 
to all persons residing in the territorial area of the applicant, 
without discrimination in any respect whatsoever on account 
of race, creed, or color; and (2) there will be made available 
in each such hospital or addition to a hospital a reasonable 
volume of hospital services to persons unable to pay therefor, 
but exception shall be made if such a requirement is not fea­
sible from a financial standpoint.”