At Diggs-Johnson Middle School in Baltimore, librarian Mary Duginske starts her library lessons by handing youngsters folders holding paper-clipped handouts.

Before class is over, Ms. Duginske makes sure she gets back every folder -- and every paper clip.

This is the Baltimore public school system, where paper clips are scarce. In a school system that's one of the state's poorest, teachers and principals have learned to scrounge for the nuts and bolts of education -- basic things such as pencils, paper, even paper clips. The city spends about $4,600 overall per child, compared with $6,000 in neighboring Baltimore County. Its poverty shows in overcrowded classrooms, underpaid teachers, leaky roofs and a lack of special programs such as art and music.

The dearth of supplies is just another obstacle teachers and principals must overcome. Frequently, they do so by dipping into their own pockets. In informal surveys, teachers in the city

schools estimate they spend an average of $300 a year of their own money on classroom supplies, says Baltimore Teachers Union President Irene Dandridge.

Teachers in other school systems also spend their own money to supplement what's provided, but in this as in so many other areas, Baltimore's schools stand in a class alone.

Consider:

* At Eutaw-Marshburn Elementary, teachers cut paper towels in half to make them last longer. Here, as in many other city schools, toilet paper isn't left in bathroom dispensers. It's parceled out, one small wad at a time. This year, children in Anne Schmidt's fifth-grade classrooms made Christmas cards in orange and green because there was no red construction paper -- or money to buy some. After 22 years in the school system, Ms. Schmidt is philosophical. "The sentiment's the same," she says.

* Because copy fluid and ditto material are scarce, teachers in most city schools are used to taking one workbook, making only enough copies for a class, then using the same copies for each subsequent class.

* Pam Rutherford has given up trying to get beginning writing paper -- the kind with largely spaced lines bisected by a dotted line -- for her first-graders at Hamilton Elementary. It's just not available, so Ms. Rutherford no longer asks for it. She estimates she spends $200 to $300 of her money a year, but on more fundamental things, like copy paper.

* At a recent state hearing, Southwestern High School student Scott Ross asked legislators for more money for city schools. At his school, said Mr. Ross, he spends most of his class time copying notes from the blackboard because there aren't enough books for students to take home.

* Frederick Douglass High School student Myron Missouri showed up earlier this school year at a press breakfast held by school Superintendent Walter G. Amprey. His complaint: None of the school's five music classes has a tape player.

Deputy Superintendent Patsy Baker Blackshear knows the supply shortage is a problem in city schools. Last year, the system surveyed new teachers and found the lack of supplies to be one of their top concerns.

Put simply, the money Baltimore has to spend just can't compare with what's available elsewhere, said Ms. Blackshear, a former Anne Arundel County school board member.

The situation is aggravated because many children can't afford the supplies schools typically ask students to buy, such as notebooks, she said. As a result, the city's teachers and principals have turned scrounging into an art. Schools hold candy sales and other fund-raisers for extras like field trips and incentives and awards. Parents chip in for big-ticket items, such as band uniforms or, at Roland Park Elementary and Middle School, cafeteria aides.

Then there's the unofficial but thriving market that has developed between schools.

"If I know or I hear that someone has some Latin books that they're not using but they may need some of my math books, I'll call up the principal and we make a trade," says Evelyn T. Beasely, Roland Park Elementary and Middle School principal.

Sheila Z. Kolman, principal of West Baltimore Middle School, has a deal with the state center that tests would-be administrators. They save their pencil stubs for her. Ms. Kolman, who heads the Public School Administrators and Supervisors Association, also lobbies area businesses for used or old notebooks she

keeps on hand as extras.

"I have become a regular beggar for my children in my school," Ms. Kolman says. "That is something that unfortunately has become a way of life, living and working in a school system that is underfunded and unfairly funded. When you go to conventions and things, you see our people in Baltimore City signing up for everything that's free; everything that's a sample."

In some city schools, classroom supplies extend to more fundamental items. At Bay-Brook Elementary, for example, veteran prekindergarten teacher Gail Browne estimates she spends $300 to $350 a year on classroom supplies.

She spends the money on brightly colored construction paper, finger paints and little extras to make her room inviting. But she also buys underwear, socks, hats and coats, and keeps a box of Cheerios and a carton of milk on hand for those children who come to school hungry.

"It hurts my heart to see a child come to school every day with the same pair of socks on," Ms. Browne said. "It hurts my heart to see a child come to school with shoes on and the soles are coming off the shoes. It hurts my heart to see a child come to school without a coat."

Then there are the luxuries. By Baltimore standards, those include: enough textbooks for every child, unlimited copying, more paper, workbooks for every child, up-to-date library books and the hands-on teaching tools so essential for teaching concepts -- things such as blocks and cones.

"When I started in the system, you could get anything that you wanted," says Ms. Schmidt, who started teaching 22 years ago at Eutaw-Marshburn Elementary.

"There were machines that were floating around that I didn't even know what they were for. Everyone had their own audiovisual machines in their rooms. We never ran out of paper of any kind."

Now, Ms. Schmidt says: "Things are so very tight. There have been other periods when the system was in a money crunch, but never like this. And most of the time, if you need something you just go and buy it yourself. It saves the hassle."

Donna Dieckman, a Baltimore native, was a student teacher in Ms. Schmidt's class last year. Ms. Dieckman came to Eutaw-Marshburn after a stint as a student teacher in Montgomery County. The contrast between the two systems, she says, made her physically ill.

"It was very difficult," she says.

In Montgomery County, where supplies were plentiful, she took crayons, paper, grassy playgrounds, science equipment and current library books for granted.

"When I got to Baltimore," Ms. Dieckman recalls, "there was nothing. Everything that I did I did out of my own pocket. . . . They didn't even have their own pencils."

Ms. Dieckman recalls a period of two weeks during which her school's teachers shared a can of ditto fluid one of them bought because the school had none. "What difference is made in the city is made by the teachers, not by the schools," she says.

The supply battle, and the adverse effect it had on teaching, soon proved to be too much for Ms. Dieckman. She left the city's schools for a teaching job in Montgomery County.

"I spent many hours at night not putting time into planning or anything but scrummaging around looking for supplies," she said of her Baltimore experience. "In the county, I had planning time and I had supplies and I could put more time and thought into what I was doing."