After she returned to America, in 1840-41, Dix conducted a statewide investigation of how her home state of Massachusetts cared for the insane poor. In most cases, towns contracted with local individuals to care for people with mental disorders who could not care for themselves, and who lacked family and friends to provide for them. Unregulated and underfunded, this system produced widespread abuse. After her survey, Dix published the results in a fiery report, a Memorial, to the state legislature. "I proceed, Gentlemen, briefly to call your attention to the present state of Insane Persons confined within this Commonwealth, in cages, stalls, pens! Chained, naked, beaten with rods, and lashed into obedience." The outcome of her lobbying was a bill to expand the state's mental hospital in Worcester.
Henceforth, Dix traveled from New Hampshire to Louisiana, documenting the condition of pauper lunatics, publishing memorials to state legislatures, and devoting enormous personal energy to working with committees to draft the enabling legislation and appropriations bills needed to build asylums. In 1846, Dix travelled to Illinois to study its treatment of mental illness. She became ill and spent the winter of 1846 in Springfield, Illinois recovering, but her report was ready for the January 1847 legislative session, which promptly adopted legislation establishing Illinois' first state mental hospital. In 1848, Dorothea Dix visited North Carolina and called for reform in the care of mentally ill patients. In 1849, when the North Carolina State Medical Society was formed, the construction of an institution in the capital, Raleigh, for the care of mentally ill patients was authorized. The hospital, named in honor of Dorothea Dix, opened in 1856. The Dorothea Dix Hospital is threatened to close because of budget shortfalls as of October 2010. She was instrumental in the founding of the first public mental hospital in Pennsylvania, the Harrisburg State Hospital, and later in establishing its library and reading room in 1853.
The culmination of her work was the Bill for the Benefit of the Indigent Insane, legislation to set aside 12,225,000 acres (49,473 km2) of Federal land (10,000,000 acres (40,000 km2) for the benefit of the insane and the remainder for the "blind, deaf, and dumb"), with proceeds from its sale distributed to the states to build and maintain asylums. Dix's land bill passed both houses of Congress, but in 1854 President Franklin Pierce vetoed it, arguing that the federal government should not commit itself to social welfare, which was properly the responsibility of the states. Stung by the defeat of her land bill, in 1854 and 1855 Dix traveled to England and Europe, where she reconnected with the Rathbones and conducted investigations of Scotland's madhouses that precipitated the Scottish Lunacy Commission.
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