Both an analysis of the sources of cost trends in libraries and the relationship of the prospective role of automation in library operations to the causes of cost trends and the predicted shortage of trained librarians are examined in the study of the economic structure of the library. Issues investigated are those particularly relating to current and prospective policies: considerations relating to automation, the prospects for funding from various sources, the compensation of librarians, the role of economics of size, and the nature of library costs. As libraries are presently operated, cumulatively rising relative costs per unit of service are an unavoidable consequence. Although this can be offset to some extent by automation, it also means that as the economy's wealth grows, the financial needs of the library will also increase. Appendices to the report describe an economic-mathematical model of library operations and give an application of the model for public library data from 1954 to 1959. (Author/CM)