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Traveller!
You would turn over the first card of your captain's deck and apply its

. If the card's

is sufficient to cover the cost, then you're done. If not, you need to decide whether to spend another card from your captain's deck or if you'll pick one from your hand, and this process is repeated until the total cost has been met.
So two important points:
1. Whether expending from hand or the captain's deck, you apply the card's

. The process is identical, but when expending from hand you already know the card's

.
2. You don't have to declare where you'll expend from, but rather the decision as to whether to expend from hand or deck is made with each individual card expended, and you're free to mix and match.
Example
Captain Kangaroo attempts to procure a card with a cost of
. He elects to expend a card from the top of his deck, which has an
of 1. This leaves him one point short, which he can meet by expending a card from his hand or his deck.