When a library borrows, it takes the financial responsibility, in case of loss or injury, and if the borrower is an individual, he takes it. The State library pays transportation on all loans to and from the county free libraries, and the county free library on all loans within the county. Loans to other libraries are usually paid--sending charge by the library sending the book and returning charge by the library returning the book. The expense of administering the service of inter-library loans is not being considered here in California, and we believe that question will never arise here, no matter how great the demands on each other grow to be. The spirit of co-operation is growing so rapidly here that the rivalry seems to be more who has and can give more rather than who can take more. IV. Order in which libraries should be applied to for a loan. There is no order here in California except that almost all libraries apply first to the State library and the State library being naturally the best informed on the special lines of strength in the various libraries in California, can request the library that is either known to have it or is likely to have it, to forward it to the library needing it. This is already possible for periodical files as there is at the State library a union list of periodical files in California libraries. Periodicals which are not in any California library, are borrowed with least loss of time, from the Library of Congress or Surgeon General's library. V. Average duration of loans. It would not be economical to plan a time limit on loans, as usually the library requesting it states the time the book will be needed and it is, if possible, loaned for that period. As soon as the library borrowing it is through with it, even if sooner than the time it expected to need it, the book is returned. Any book must of necessity be subject to recall by the library loaning it. There cannot well be a limit to the number of volumes loaned at any one time. That would naturally depend upon the need. No fines or other penalties for negligence in returning loans are necessary where there is a spirit of perfect co-operation, as librarians all understand the necessity of system, and in California at least, show great consideration for each other. VI. Forms of application for loans; notice of shipment, etc. The forms used by the State library and county free libraries in California have been found to be perfectly satisfactory. Requests are sent in to the State library in duplicate. One is returned with the disposition made of it written on it and the duplicate is kept on file as a record at the State library. If not in the State library a similar duplicated request is sent to some other library. VII. Inter-library loans in California.