One of seven studies prepared by the Advisory Commission on Intergovernmental Relations (ACIR) in its examination of the federal fiscal system, this study examines the allocation and coordination of federal resources among the various levels of government for the development of libraries and library services. Topics addressed include the federal, state, and local roles within their current and historical contexts; the limited role of federal involvement prior to 1956 and the passage of the Library Services Act in that year; the heyday of federal aid in the 1960s; conflicts between the President and Congress concerning library aid; the organizational issue of the struggle for a federal presence; an analysis of the political dynamics of federal involvement; and a brief discussion of the future of the federal role in libraries. Figures list major federal library legislation and the changing purposes in the public library system, and seven tables provide budgetary, appropriations, and expenditures information. (RAA)