To learn first hand how the libraries of North Carolina, especially public libraries, function in spite of budget cuts, a hearing was held in Lumberton (North Carolina) to hear the testimony of interested parties from the state and national levels and specifically from the congressional district of southeastern North Carolina. While library budgets are being drastically cut, costs continue to rise, as the witnesses attest. At this hearing, the Library of Congress introduced "American Memory," a project that will use compact discs and laser video disks to make important collections from the Library of Congress available to researchers, teachers, students, and the public at local libraries and schools. American Memory, which will eventually exist as an online resource, is the library of the future. A demonstration of the technology and search strategies of American Memory was presented. Twenty-three other witnesses addressed the hearing, including representatives of the American Library Association; representatives of state, academic, public, and depository libraries; and patrons and users of the local county library. Additional submissions for the record include letters. (SLD)