dissent">McMILLAN, District Judge

(dissenting):

This is a trial court; we sit as a jury and must weigh the evidence.

Plaintiffs contend that the AFDC program is labeled and considered and treated as a “black” program, and is administered in a fashion which discriminates against AFDC beneficiaries because most of them are black. They further contend that the refusal of North Carolina to opt for AFDC and Medicaid benefits for otherwise qualified pregnant women is a part of this racial discrimination.

The evidence strongly supports the contentions of the plaintiffs.

David T. Flaherty, Secretary of the North Carolina State Department of Human Resources, agreed that the objective of the AFDC program is to provide “subsistence for indigent children and their mothers” and further testified: “but we’re not doing it in North Carolina to the extent that we should. . . . And it came out

from the Research Triangle that we were only providing fifty percent of what it takes for a family of four to get along in North Carolina.” (Flaherty deposition, page 14.)

“I oppose vehemently the effort to add, in a subversive way, another aspect to a program that the Legislature and no one else supported.”

“Q. In other words, the AFDC program is not popular with the General Assembly?

“A. It’s not popular with the people of the state . . . .” (Flaherty deposition, pages 22-23.)

“We’re providing right now fifty percent of what it takes for AFDC — ” (Flaherty deposition, page 24.)

“North Carolina has one of the highest [perinatal mortality and morbidity rates], and we have a particular problem where the blacks are double the loss by death of the whites.” (Flaherty deposition, page 28.)

“The State does not provide AFDC or Medicaid to pregnant women because it was never intended by the General Assembly that it would . . . .” (Flaherty deposition, page 38.)

“I had a twenty-seven million dollar surplus in my budget last year in the Department of Human Resources.” (Flaherty deposition, page 68.)

The testimony of the former Deputy Director, Mr. Ward, includes the following:

“Q. Would it be fair to say that through the years the level of AFDC benefits has been low in relation to the actual ' need, as recognized by the Department?

“A. Yes, I believe I can say that very comfortably. That it was not founded on a sound cost-of-living basis.” (Ward deposition, page 9.) ******

“Q. Would it be fair to say that the AFDC program over the years has been viewed by members of the General Assembly as an unpopular program?

“A. Generally, yes.

“Q. Have members of the General Assembly ever asked you, personally, as a representative of the State Department of Social Services for statistics reflecting the racial breakdown of these various programs?

“A. Yes.” (Ward deposition, pages 9-10.)

******

“A. The ratio, to my knowledge, was always above fifty-five percent in my history with the agency. Fifty-five percent black.

“Q. Did members of the General Assembly and county Commissioners, in any of the conversations with you *1035about the AFDC program, make specific criticisms about the AFDC program?

“A. Yes.

“Q. What were the most reoccurring and predominant criticisms made of the AFDC program?

“A. Usually relating to the amount of the AFDC grant versus wages, and the difficulty in hiring farm workers, or workers to do general labor, because the AFDC payment was high compared to average wages paid in North Carolina at the time.

“Q. Okay, that’s what you would say would be the most reoccurring criticism?

“A. That, and race was always an issue.

“Q. When you say ‘that,’ you mean legislators and county commissioners made criticisms of the program that related to the fact that the program • was primarily a black program or that they perceived it that way?

“A. Yes, that’s right. And it made it difficult for the labor market.

[ALL ABOVE EMPHASIS ADDED.]

“Q. Based upon your conversations with members of the General Assembly again, and county commissioners, would it be fair to say that the racial composition of the AFDC program was a substantial factor in the determination of the level of benefits budgeted by the General Assembly for the AFDC?

“A. It’s hard to give weight to that. Generally, yes.

“Q. (By Mr. Hart) Were the Old Age and the APTD programs viewed as predominantly white programs?

* * * * * *

“A. Yes.

“Q. (By Mr. Hart) During the 1960’s, did certain eastern North Carolina counties systematically cut large numbers of persons off the AFDC rolls during certain periods of the year?

“A. Yes. I had it called to my attention by field representatives at various times that some counties during the summer farm season, when farm labor was needed, some counties would reduce their AFDC rolls, whether the particular client had a job or not.

“Q. What justification, if any, did these field representatives or county commissioners or county directors in those counties offer in support of these seasonal terminations?

“A. That there was enough work for everyone if they would merely go and ask for it.

“Q. (By Mr. Hart) If I could pursue this for just a minute, the justification was — I thought I heard you say there were enough jobs available. Was a part of that, also, any expressed concern in those counties for the need for labor?

“A. Yes.

“Q. And was it a specific need that you heard mentioned for any particular kind of labor?

“A. Mostly farm labor.

“Q. Did you ever hear it said that, as a justification for that, that it was a need for cheap, black labor?

“A. Yes, it has been said.

“Q. (By Mr. Hart) Was the State Department generally aware of this practice of seasonal lay-offs in certain counties?

“A. Yes.

“Q. And did the State Department, to your knowledge, take action to stop this practice?

“A. They took action through negotiation, and over a period of years I understand it has been stopped. But there was no legal action, to my knowledge.

“Q. Does the General Assembly determine how much the state will put up for its share of AFDC, OAA, and APTD allocations each year?

*1036“A. Yes, if I understood you correctly. They determine the amount of dollars, not the percentage. That is, based on the federal percentage.

“Q. Yes, sir, that’s what I was asking.

“A. Right.” (Ward deposition, pages 11, 12,13,14. Emphasis added.)

* * * * *

“Q. So would it be fair to say that Mr. Howison’s and Dr. Blackmon’s concerns about children born out of wedlock were primarily concerns about black births out of wedlock and their relation to the AFDC program?

“A. That was to be in my opinion. In my opinion, that was their chief concern.” (Ward deposition, page 17.)

“Q. Can you remember specifically whether any legislators ever told you that they would oppose raising AFDC benefits because it was a black program?

* * sfc s{: >H *

“A. I believe those words might have been used, but by a very few. Mostly, they would say that it had no support from their constituency, that it was not a good political move to support higher AFDC payments, because there was no lobby, no strong community movement to insist that legislators respond to that need.

“Q. (By Mr. Hart) So then although you don’t remember many legislators using those exact words, is it your interpretation that that was the thrust behind a lot of objections?

“A. That was a part of it, in my opinion.” (Ward deposition, page 26.)

“Q. It is accurate also according to your experience, isn’t it, that the Department’s request for a budget in AFDC is somewhat a function of their view of what the General Assembly will realistically grant them, isn’t it?

“A. I would say that comes into consideration, yes.

“Q. And that’s true not only now, but has been true during the years when . you were Deputy Commissioner, isn’t it?

“A. Yes.” (Ward deposition, pages 38-39.)

* * * * * *

The Old Age Assistance program and the Aid to the Permanently and Totally Disabled are thought of as “white” programs, and are funded at figures more nearly approaching the cost of subsistence.

The North Carolina General Assembly is a white group (with one or two strays in recent years); the Directors of Social Services in most counties are all white; the management of the Social Services operation is ninety-seven percent white; and the history of North Carolina is that up until 1969, there were scores of laws on the books requiring racial segregation in all public and many private areas of life.

With this background of racial segregation and discrimination, and with the “black” AFDC program noticeably underfunded compared to the “white” programs, and in view of the legislative attitude and the testimony above quoted, the plaintiffs have made out a showing which puts the burden upon the defendants to demonstrate non-racial reasons for the racially discriminatory results of their failure to opt for AFDC benefits for needy pregnant women.

The fact that white mothers are also losers in the program does not prove lack of racial motive; it simply shows that white people caught up in a “black” program are also victims of racial bias.

Plaintiffs have demonstrated that the actions and inactions of the state in administering the AFDC program have both discriminatory purpose and discriminatory effect. Therefore, defendants must demonstrate a compelling state interest to support their actions. Jefferson v. Hackney, 406 U.S. 535, 92 S.Ct. 1724, 32 L.Ed.2d at 285 (1972); Whitfield v. Oliver, 399 F.Supp. 348 (M.D.Ala.1975).

*1037The evidence does not demonstrate to me that protection of the state’s treasury is the purpose of the state’s actions; there is talk in the testimony of such a purpose, but it is not persuasive and the dollar amounts involved, measured against the $27,000,000 surplus in this particular department, make bona fide protection of the fisc a very dubious explanation.

The evidence does not support the majority’s findings or assumptions (Finding No. 15) that the group represented by the plaintiffs can get adequate medical care without the Medicaid which the state denies them.

The state’s abandonment of the “man in the house” rule after being forced to do so is not proof that the discrimination it evidenced has been eliminated.

The evidence does not justify the finding that food stamps are “generally available” to the plaintiffs; unless they have money to buy food stamps, it should not be found that “food purchased with these food coupons contributes significantly to the nutritional well being of such women.” (Finding No. 16.)

The majority argue (page 1029) that “proof of the State’s purpose in maintaining the status quo with regard to AFDC and unborn children is well-nigh impossible.”

That depends upon whether the evidence is read in its entirety or whether the evidence is marshalled in opposition to any proof of improper motive.

The majority as I read the opinion have marshalled the evidence in support of a view that saving the state money rather than racial motives explains the actions of the defendants.

After reading the documentary evidence, and after hearing the live testimony which I had the opportunity to hear, I am unable to agree that it supports that conclusion.

I believe plaintiffs have established a prima facie case of racial discrimination; that the defendants have failed to advance adequate non-racial reasons for the discrimination; and that the plaintiffs, black and white, are the victims of unconstitutional racial discrimination.

I dissent.

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