order to permit that system to continue to grow as it has grown, in order that the private system may grow alongside the public system, we are justified in extending Federal aid to public hospitals, in cases in which the State has surveyed the situation and has approved the construction of a hospital or of an addition to a particular hospital in a certain section. It seems to me that in that event it is perfectly proper that Federal aid be extended to such private hospitals as well as to public hospitals. Otherwise, we shall gradually make public the entire hospital system in the United States, but at much greater expense and, I think, with discouragement to people who are charitably inclined. For years the establishment and conduct of hospitals has been the aim of charitable people who wish to give their money to such institutions, and take pleasure in doing so. Their donations give to the administration a certain independence which is not always present in public affairs.

In view of all this, it becomes imperative to maintain the relationship between the governmental and the voluntary hospital by making provision in the law that a portion of the funds be reserved for the construction of voluntary as well as governmental hospitals. It may be that by reason of rapidly developing conditions and regional differences, any rigorous mathematical or mechanical device be written into the law to "freeze" control, the relationship quantitatively on a national or a State level may be impractical.

I urgently plead that the maintenance of this American pattern, and it is uniquely and distinctly American-not only in principle but also historically-be included as an obligatory feature in the statements of policy and the regulation, which will in due time be formulated to implement the purposes of this legislation.

Mr. BROWN. Does S. 191 do that; does it meet your demands on that subject?

Reverend SCHWITALLA. I would say with one further reservation that I am introducing in just a moment, in order not to try the patience of the subcommittee's members, I am down to the second last page, and the last page is only half a page.

Mr. BROWN. Fair enough.

Reverend SCHWITALLA. I want to be sure that you know about where I am. I will not talk until 5 o'clock.

I wish to make a further suggestion concerning the appeal procedure devised in this bill. Provision is made for an appeal in case the State plans fail to meet the approval of the Surgeon General.

Section 623 (b), page 12, lines 15-20, in this case the Federal Hospital Council shall, upon request of the State agency, afford it an opportunity for hearing, and if the council determines that the plan or modification complies with the requirements, the Surgeon General shall thereupon approve such plan or modification.

That is the first one, and I wish heartily to endorse it.

Concerning the second appeal procedure in S. 191—an application of an individual agency approved by the State council shall not be disapproved by the Surgeon General until the applicant and the State agency shall have had an opportunity for a hearing (paragraph 625 (a))-if the Surgeon General refuses to approve an application after such a hearing by the applicant and the State agency, or if any State is dissatisfied with the Surgeon General's action concerning an alleged noncompliance with the provisions of the law, the applicant or the State may appeal to the United States Circuit Court of Appeals. We heard about this matter and I am sure that the matter is clarified since discussion this morning.

In this case, extensive and detailed provision is made in S. 191 for this contingency.

Here is an answer to your question, Mr. Brown.

It will be noted that the appeal power is intimately intertwined throughout S. 191 with the functions and powers of the Surgeon General. It would seem, therefore, that if now I make a plea for the inclusion in this legislation of another appeal procedure, I am advising that the powers of the Surgeon General be still further increased. Such is not my intention. It is my intention, however, to safeguard the possible abuse of Federal funds on the State level by introducing a check on the decisions of the State councils in the case of certain applications.

When a voluntary hospital applies to a State agency for approval of its project and when the State council disapproves the project, it is recommended by those whom I represent, that the applicant institution should be able to appeal directly to the Surgeon General over the State council if the applicant institution is making its application without calling upon or using the State funds of any kind.

In other words, in those cases in which funds derived from private sources and from Federal sources alone are used for the erection of a hospital, and in which, therefore, by concession, no State funds of any kind are involved, an appeal should be possible for the applicant directly to the Surgeon General even over the decision of the State council.

Mr. Chairman and members of the subcommittee, I am resuming my last paragraph just for the moment. In all of the discussions this morning and this afternoon, I think probably, too, in all of your questions, the questions all seemed to be pointed in this way: That there is a question here of Federal funds being matched on a graded basis by State funds. In other words, the question was not raised where the State funds are coming from or where the funds that originate in the State are coming from.

It is perfectly clear that those funds could come from nongovernmental sources, in those cases where there is a question of the erection of a non-tax-supported hospital or a voluntary hospital.

I am hoping that there will be another appeal written into the law somewhere, that in cases in which an applicant for Federal aid, for a Federal grant for the erection of a hospital, uses his own funds plus Federal funds without in anyway asking for State funds, originating governmental State funds, that an appeal may be possible if a State council has refused approval.

Mr. BROWN. Under this law, Father, if the State board or council approved it, can the Federal Government contribute its portion to be matched by a nonpublic institution at the present time?

Reverend SCHWITALLA. I think so. I think S. 191 does that; allows that.

Mr. BROWN. I rather had that impression. I wanted to be sure. And then the question that you bring up is the right of appeal by that institution in case it is turned down?

Reverend SCHWITALLA. Yes, sir, and the appeal directly to the Surgeon General over the head of the State council.

Let us assume that the institution, St. Mary's Hospital, has done all it could do on the State level and the State still says "Nothing doing,"

and I am assuming now, of course, needless to say, I hope you will understand that, I am assuming now that everything else is equal here; in other words, that the State plan is all taken care of, all of that sort of thing, and that we have a complete compliance of the institution with the State standards and with the Federal standards, and all of that sort of thing.

Mr. BROWN. Let me ask you this: Here is Washington County out in Ohio, and it applies to the State council for funds and asks that the Federal Government match the funds paid by the taxpayers of Washington County; but the project is turned down by the State council. Then they have the right of appeal, do they not?

Reverend SCHWITALLA. They have the right of appeal.

Dr. PARRAN. No, they do not.

Dr. SMELZER. No.

Reverend SCHWITALLA. They have the right of appeal. If not, they do have the right of appeal; they have the right of appeal, I am

sure.

Mr. HARRIS. Not to the Surgeon General, they do not, Father. Reverend SCHWITALLA. The State council has turned them down. They can argue with the State council, can they not?

Mr. BROWN. If the State council turns them down, would the taxsupported institution have the right of appeal to the Surgeon General? In other words, would they have the same right that you ask for the non-tax-supported institution?

Reverend SCHWITALLA. I cannot answer that, unless you can answer it for me. I thought that they had, personally.

Mr. REED. I think they have the right to appeal to the State. Let us get this straight, a nonprofit agency.

Reverend SCHWITALLA. No, no; this is tax-supported, a county hospital.

Mr. REED. A county hospital. I do not think it has the right. J could not say categorically on that. I would have to check on that. Reverend SCHWITALLA. I would have to check it, too. I thought I was paralleling, frankly I thought I was paralleling that.

Mr. BROWN. I am wondering if you would want to give a right of appeal to the private institution that we would not give to some agency of the Government, itself.

Reverend SCHWITALLA. I, frankly, believe that would be unfair, and I would withdraw that recommendation, if that is the case, but I would like to ask someone here, for instance, Dr. Parran.

Mr. HARRIS. Dr. Parran, do you care to comment on that?

Dr. PARRAN. Under the provisions of S. 191, there is no right of appeal by an applicant within the State, whether a public body on a nonprofit corporation, over the decision of the State agency.

Mr. HARRIS. The right of appeal applies only to the action of the Surgeon General?

Dr. PARRAN. No right of appeal to the Federal Government. Mr. HARRIS. The right of appeal applies only to the action of the Surgeon General?

Dr. PARRAN. They have a right of court review, appeal to the court from the action of the Surgeon General.

There is nothing in the law which authorizes an applicant to appeal to the courts over the decision of the State hospital agency.

Mr. MARCANTONIO. Nothing in the law provides for an appeal from the State agency to the Surgeon General?

Dr. PARRAN. That is correct.

Mr. BROWN. I want to be sure that we are right about it, as the bill is now drawn, the proposed law, S. 191, the State councils have final jurisdiction, and if they turn down a project that eliminates that project from further consideration?

If the proposal made by the Reverend Father were put into effect, or if it applied to all hospitals, then actually the Surgeon General would be final, the court of last resort to decide upon every local issue. Is that not true?

Dr. PARRAN. Conceivably.

Mr. BROWN. If his aid were given to every hospital?

Dr. PARRAN. The Surgeon General would need to review the appeals of any dissatisfied local applicant.

Mr. BROWN. The bill stops them at the state level now?

Dr. PARRAN. That is right. Disapproval stops at the state level. Mr. BROWN. In other words, you cannot consider an application unless the State council approves?

Dr. PARRAN. That is correct. I did not understand Father Schwitalla's recommendations to be limited entirely to the nonprofit hospital. As I understood his recommendation, certainly in earlier discussions I have had with him, he argued, and somewhat persuasively, for the right of appeal of a local applicant from beyond the decision of the State council.

Reverend SCHWITALLA. Based on the use of Federal funds by those agencies, Mr. Brown.

Mr. BROWN. Yes, I understand.

Reverend SCHWITALLA. The validity of the argument is just as strong for the tax-supported institution using Federal funds as it is for the other.

Mr. BROWN. There is only one flaw that I might pick in the presentation of that argument, and that is that eventually it would lead to making the Surgeon General the final arbiter as to whether or not any local hospital should be given consideration, and some place along the line you are going to have to cut someone off.

Reverend SCHWITALLA. May I counter, Mr. Brown, by saying that at the present time the Surgeon General may take exceptions to the State council. The negative side is already provided for.

Mr. BROWN. He has the right to turn down the recommendation of the State council, as I understand it, but he does not have the right to set aside the rejection of the State council and say, "Nowithstanding your rejection of this project, we are going to aid it anyway."

Reverend SCHWITALLA. I am trying to understand that when the Almighty God gave power to forgive sins and power to retain sins, and the discretionary power ought to work both ways here. That is the difficulty in the law.

I felt it particularly for the private hospitals; and perhaps, my presentation is too colored on that side, but the argument is just as strong in the other direction.

Mr. BROWN. All streets are not two-way streets in this modern day. That seems to be the case here. Some of them are one-way

streets.

Mr. MARCANTONIO. Before we leave this point on this matter of appeal, after all we are spending Federal funds and leaving the decision entirely to the State, especially where the decision is negative. I think that question that the Father has raised is very, very interesting. I would like to know, Father, just why do you make that recommendatiton; what is the background for it?

Reverend SCHWITALLA. Since I am only a gentleman and not under oath right here, when I talk I will try to tell the truth anyway. It seems to me, Mr. Marcantonio, that there is reason for a little fear on State levels that the rights of minorities are not always going to be safeguarded 100 percent.

Mr. MARCANTONIO. That is what I wanted to bring out.

Reverend SCHWITALLA. I want to say to you plainly as I can say it to you.

Mr. BROWN. I think that is entirely the issue, and I think that is one sound argument behind what you have said.

Mr. MARCANTONIO And the right to appeal.

Reverend SCHWITALLA. And we must not let, in a matter of this kind, doubt grow anywhere as to the high idealism of this law. It is fine. It must be based on need. Need is a very, very broad term here. We have to give a measure of need and we do give it in terms of the per capita income of the various States.

We have a gradation on the basis of per capita income, but, as I tried to point out, when I took that little sentence of Dr. Smelzer's, where he said that "hospital service is not a simple matter," I tried to show how much is implied, how complicated hospital service is, ranging all the way from mere physical service up to the highest attitudes, psychology, morals, and ethics, and everything else. Need must be interpreted in that same broad way. You can kill the service of a hospital if some of the aspects of the need are forgotten in any particular State. I am talking here very plainly and very carefully. That is what I am talking about.

Mr. HARRIS. I think that is very pertinent. Personally, in my thinking on the issue, as you presented, there are two things that I want to mention, or at least ask your comment on in this respect: First, in the bill as passed by the Senate, Senate 191, it provides an appeal from the action of the Surgeon General to the courts, I believe I am right in that.

Reverend SCHWITALLA. Yes, sir.

Mr. HARRIS. Mr. Brown mentioned a few moments ago if such provision as you have just suggested to permit the appeal from the State agency or the State council to the Surgeon General, you would in effect make him the final arbiter.

What would you think about giving the right of appeal to the courts from the decision of the State council or the State agency?

Reverend SCHWITALLA. We had an hour and a half discussion about that last night, Mr. Chairman, and it is a tremendously fascinating question. I am perfectly willing to admit this, that it is a new pattern. It is a new pattern in government, but it is such an eminentlyseemingly such an eminently fair pattern that it looks to me as if it is entirely consonant with American thinking.

And the Surgeon General is the last person, of course, that we have to find fault with.

The trouble, you see, is that we cannot perpetuate Dr. Parran. If we knew that the 95th Surgeon General after the present on was going