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for the first half of the year encourage us to be somewhat more optimistic at this time. Most budgetary units are thus far reasonably on target, and the Magazine is currently expected to show a surplus of $125,000 or more this year. As may be seen on page 14, our "revenue-producing activities" overall should do better than break even this year despite our continued subsidy of Press operations and the start-up efforts of our National Associates Program. Thus, in current FY 1973, we should be able to complete another step in the rebuilding of our current unrestricted funds working capital, while at the same time making a modest beginning toward reestablishment of the Secretary's "Fluid Research Funds"-- i.e, grants to priority research projects for our scientists for which funds are not otherwise available.
       
Among our restricted fund accounts the Freer Gallery, aided by increased endowment fund income from adoption this year of the Total Return investment policy, should now live well within its income and rebuild its modest income reserve up to $175,000 by year end. Other restricted funds which are supported by income from endowment funds and also those restricted funds financed by gifts and private grants, should maintain roughly the same levels as for FY 1972, as shown in the bottom sections of page 13. Expenditures of contracts and grants received from Federal agencies are expected to rise by some 5-10% in current FY 1973.