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First: In the area of faculty salaries, this bill does carry forward the recommendations of the Advisory Budget Commission, and you will recall that there were three areas we mentioned to you in which we thought we had to seek increased support: first in the Division of Health Affairs, second in the Agricultural Experiment Station, and third the Agricultural Extension Service. Restorations have been made by the Joint Appropriations Committee in these three areas.

Second: The bill contains the recommendations of the Advisory Budget Commission as they relate to the University libraries--all three.

Third: Modest appropriation increases for certain other programs are included in the appropriations bill.

Fourth: A level of support for the University Hospital that will enable it to be on a sound fiscal basis and to open the remaining sixteen beds has been recommended by the Joint Appropriations Committee.

In our program for capital improvements we sought to recoup on some of the losses resulting from the 1961 bond issue defeat and to project our construction program to meet the growing enrollment load and the expanding University functions. The appropriations bill again carries forward the recommendations of the Advisory Budget Commission, and for this we are grateful.

We have not been successful in our efforts to reduce the burden of self-liquidation costs placed upon the students. No change has been made in the Advisory Budget Commission's recommendation that student housing, the Student Union at Chapel Hill and other projects are to be financed by 100 per cent self-liquidation of the costs of construction.

There are other bills still pending that will directly involve the University and I shall simply mention these: first is the expansion of educational television to a statewide network; second, a cancer research and treatment facility; and third, proposed legislation to improve the state retirement system.

On several occasions I have indicated the great concern we have that improvements be made in the retirement benefits for our faculty and staff members. This concern has been stated to the Trustees of the Retirement System, not only by the University but by the Board of Higher Education, the state employees, and the public school teachers. And this was stated as recently again as last week before the appropriate committee of the state Senate. A bill incorporating significant changes in the vesting period and the level of benefits to be paid is before the General Assembly, and any help you could give to insure its favorable passage I assure you would be greatly appreciated.

We are grateful to the members of this Board of Trustees who are also members of this session of the General Assembly who have been most helpful in securing the favorable actions relating to the University budget up to this hour. The appropriations bill is before the Senate tomorrow and will be coming up in the House soon.

These then are three principal areas of the year's work. Other matters will be presented to you in the reports I mentioned earlier; but in closing this statement, I wish to pay particular tribute to Chancellor Aycock, Chancellor Caldwell, and Chancellor Singletary and their associates, Mr. Branch, Mr. Vann, and Mr. Ferguson, and to my colleagues, Dr. Anderson, Mr. Weaver, Mr. Shepard, Mr. Teague, and Mr. Dorton. These men and their faculties and staff associates work hard to make possible the progress this report reveals, and to them the full measure of credit is due this year.

As we look ahead to 1963-64, let us resolve that the full power of the total resources of this Board of Trustees, the faculties, administration, student bodies, alumni, and friends of these institutions shall be used to position the University firmly in its role of leadership in higher education in this state. One year from today I am confident that the record will show that the University met its obligations and more, and that this state and our nation will have been served in a faithful and productive way.