FRANKLIN ASSET ALLOCATION FUND
NSAR-B, 1999-02-26
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<PAGE>      PAGE  1
000 B000000 12/31/98
000 C000000 0000014698
000 D000000 N
000 E000000 NF
000 F000000 Y
000 G000000 N
000 H000000 N
000 I000000 3.0.a
000 J000000 U
001 A000000 FRANKLIN ASSET ALLOCATION FUND
001 B000000 811-730
001 C000000 6503122000
002 A000000 777 MARINERS ISLAND BOULEVARD
002 B000000 SAN MATEO
002 C000000 CA
002 D010000 94404
002 D020000 1585
003  000000 N
004  000000 N
005  000000 N
006  000000 N
007 A000000 Y
007 B000000  1
007 C010100  1
007 C020100 FRANKLIN ASSET ALLOCATION FUND
007 C030100 N
007 C010200  2
007 C010300  3
007 C010400  4
007 C010500  5
007 C010600  6
007 C010700  7
007 C010800  8
007 C010900  9
007 C011000 10
020 A000001 EDWARDS (A.G.) & SONS INC.
020 B000001 43-0895447
020 C000001     31
020 A000002 ABN AMRO CHICAGO CORP.
020 B000002 36-2549961
020 C000002     20
020 A000003 EVEREN SECURITIES INC.
020 B000003 36-2693816
020 C000003     14
020 A000004 NOMURA SECURITIES INTERNATIONAL INC.
020 B000004 13-2642206
020 C000004     10
020 A000005 PAINEWEBBER INC.
020 B000005 13-2638166
020 C000005      8
020 A000006 MERRILL LYNCH PIERCE FENNER
<PAGE>      PAGE  2
020 B000006 13-5674085
020 C000006      7
020 A000007 DAIN RAUSCHER INC.
020 B000007 41-0212020
020 C000007      5
020 A000008 SANFORD BERNSTEIN
020 B000008 13-2625874
020 C000008      5
020 A000009 LIPPER ANALYTICAL SECURITIES CORP.
020 B000009 13-2792478
020 C000009      4
020 A000010 SALOMON SMITH BARNEY
020 B000010 13-1912900
020 C000010      3
021  000000      127
022 A000001 DONALDSON, LUFKIN & JENRETTE SECURITIES CORP.
022 B000001 13-2741729
022 C000001    253469
022 D000001       840
022 A000002 BARCLAYS CAPITAL INC.
022 B000002 13-3551367
022 C000002    247876
022 D000002         0
022 A000003 PARIBAS CORP.
022 B000003 13-3235334
022 C000003    244800
022 D000003         0
022 A000004 CIBC OPPENHEIMER CORP.
022 B000004 13-3639028
022 C000004    240872
022 D000004         0
022 A000005 GREENWICH CAPITAL MARKETS INC.
022 B000005 13-3122275
022 C000005    239969
022 D000005         0
022 A000006 DRESDNER KLEINWORT BENSON, NORTH AMERICA LLC
022 B000006 04-2442748
022 C000006    211433
022 D000006         0
022 A000007 WARBURG DILLON READ LLC
022 B000007 13-2932996
022 C000007    205410
022 D000007         0
022 A000008 NATIONSBANC MONTGOMERY SECURITIES LLC
022 B000008 95-4035346
022 C000008    201683
022 D000008         0
022 A000009 BT ALEX BROWN
022 B000009 13-3311934
022 C000009    179025
022 D000009       701
<PAGE>      PAGE  3
022 A000010 DEUTSCHE BANK CAPITAL CORP.
022 B000010 13-6124068
022 C000010    178347
022 D000010         0
023 C000000    2788593
023 D000000      14959
026 A000000 Y
026 B000000 Y
026 C000000 Y
026 D000000 Y
026 E000000 N
026 F000000 N
026 G010000 N
026 G020000 N
026 H000000 N
027  000000 Y
077 A000000 Y
077 B000000 Y
077 Q010000 Y
078  000000 N
086 A010000      0
086 A020000      0
086 B010000      0
086 B020000      0
086 C010000      0
086 C020000      0
086 D010000      0
086 D020000      0
086 E010000      0
086 E020000      0
086 F010000      0
086 F020000      0
086 A01AA00      0
086 A02AA00      0
086 B01AA00      0
086 B02AA00      0
086 C01AA00      0
086 C02AA00      0
086 D01AA00      0
086 D02AA00      0
086 E01AA00      0
086 E02AA00      0
086 F01AA00      0
086 F02AA00      0
008 A000101 FRANKLIN ADVISERS, INC.
008 B000101 A
008 C000101 801-26292
008 D010101 SAN MATEO
008 D020101 CA
008 D030101 94404
008 D040101 1585
<PAGE>      PAGE  4
010 A000101 FRANKLIN TEMPLETON SERVICES, INC.
010 C010101 SAN MATEO
010 C020101 CA
010 C030101 94404
010 C040101 1585
011 A000101 FRANKLIN/TEMPLETON DISTRIBUTORS, INC.
011 B000101 8-5889
011 C010101 SAN MATEO
011 C020101 CA
011 C030101 94404
011 C040101 1585
012 A000101 FRANKLIN/TEMPLETON INVESTOR SERVICES, INC.
012 B000101 84-1036
012 C010101 SAN MATEO
012 C020101 CA
012 C030101 94404
012 C040101 1585
013 A000101 PRICEWATERHOUSECOOPERS LLP
013 B010101 SAN FRANCISCO
013 B020101 CA
013 B030101 94105
013 B040101 2119
014 A000101 FRANKLIN/TEMPLETON DISTRIBUTORS, INC.
014 B000101 8-5889
015 A000101 THE BANK OF NEW YORK
015 B000101 C
015 C010101 NEW YORK
015 C020101 NY
015 C030101 10286
015 E010101 X
015 A000102 DELETE
015 A000103 DELETE
015 A000104 BANKBOSTON, N.A.
015 B000104 S
015 C010104 BUENOS AIRES
015 D010104 ARGENTINA
015 E040104 X
015 A000105 NATIONAL AUSTRALIA BANK LIMITED
015 B000105 S
015 C010105 MELBOURNE
015 D010105 AUSTRALIA
015 E040105 X
015 A000106 BANK AUSTRIA AG
015 B000106 S
015 C010106 VIENNA
015 D010106 AUSTRIA
015 E040106 X
015 A000107 DELETE
015 A000108 BANQUE BRUXELLES LAMBERT (BBL)
015 B000108 S
015 C010108 BRUSSELS
<PAGE>      PAGE  5
015 D010108 BELGIUM
015 E040108 X
015 A000109 DELETE
015 A000110 ROYAL BANK OF CANADA
015 B000110 S
015 C010110 TORONTO
015 D010110 CANADA
015 E040110 X
015 A000111 DELETE
015 A000112 DELETE
015 A000113 DELETE
015 A000114 DELETE
015 A000115 DELETE
015 A000116 DELETE
015 A000117 DEN DANSKE BANK
015 B000117 S
015 C010117 COPENHAGEN
015 D010117 DENMARK
015 E040117 X
015 A000118 DELETE
015 A000119 DELETE
015 A000120 MERITA BANK PLC
015 B000120 S
015 C010120 HELSINKI
015 D010120 FINLAND
015 E040120 X
015 A000121 BANQUE PARIBAS
015 B000121 S
015 C010121 PARIS
015 D010121 FRANCE
015 E040121 X
015 A000122 DRESDNER BANK AG
015 B000122 S
015 C010122 FRANKFURT
015 D010122 GERMANY
015 E040122 X
015 A000123 DELETE
015 A000124 THE HONGKONG AND SHANGHAI BANKING CORP LTD
015 B000124 S
015 C010124 HONG KONG
015 D010124 CHINA
015 E040124 X
015 A000125 DELETE
015 A000126 DELETE
015 A000127 THE HONGKONG AND SHANGHAI BANKING CORP LTD
015 B000127 S
015 C010127 JAKARTA
015 D010127 INDONESIA
015 E040127 X
015 A000128 ALLIED IRISH BANKS, PLC (AIB)
015 B000128 S
<PAGE>      PAGE  6
015 C010128 DUBLIN
015 D010128 IRELAND
015 E040128 X
015 A000129 BANQUE INTERNATIONALE A LUXEMBOURG
015 B000129 S
015 C010129 LUXEMBOURG CITY
015 D010129 LUXEMBOURG
015 E040129 X
015 A000130 DELETE
015 A000131 BANK OF TOKYO MITSUBISHI (BTM)
015 B000131 S
015 C010131 TOKYO
015 D010131 JAPAN
015 E040131 X
015 A000132 THE HONGKONG BANK MALAYSIA BERHAD (HBMB)
015 B000132 S
015 C010132 KUALA LUMPUR
015 D010132 MALAYSIA
015 E040132 X
015 A000133 BANCO NACIONAL DE MEXICO
015 B000133 S
015 C010133 MEXICO CITY
015 D010133 MEXICO
015 E040133 X
015 A000134 DELETE
015 A000135 MEES PIERSON
015 B000135 S
015 C010135 AMSTERDAM
015 D010135 NETHERLANDS
015 E040135 X
015 A000136 AUSTRALIA AND NEW ZEALAND BANKING GROUP LTD
015 B000136 S
015 C010136 WELLINGTON
015 D010136 NEW ZEALAND
015 E040136 X
015 A000137 DEN NORSKE BANK ASA
015 B000137 S
015 C010137 OSLO
015 D010137 NORWAY
015 E040137 X
015 A000138 STANDARD CHARTERED BANK (SCB)
015 B000138 S
015 C010138 KARACHI
015 D010138 PAKISTAN
015 E040138 X
015 A000139 DELETE
015 A000140 THE HONGKONG AND SHANGHAI BANKING CORP LTD
015 B000140 S
015 C010140 MANILA
015 D010140 PHILIPPINES
015 E040140 X
<PAGE>      PAGE  7
015 A000141 DELETE
015 A000142 BANCO COMERCIAL PORTUGUES S.A. (BCP)
015 B000142 S
015 C010142 LISBON
015 D010142 PORTUGAL
015 E040142 X
015 A000143 UNITED OVERSEAS BANK LIMITED (UOB)
015 B000143 S
015 C010143 SINGAPORE
015 D010143 SINGAPORE
015 E040143 X
015 A000144 STANDARD CORPORATE AND MERCHANT BANK (SCMB)
015 B000144 S
015 C010144 JOHANNESBURG
015 D010144 SOUTH AFRICA
015 E040144 X
015 A000145 DELETE
015 A000146 BANCO BILBAO VIZCAYA (BBV)
015 B000146 S
015 C010146 MADRID
015 D010146 SPAIN
015 E040146 X
015 A000147 STANDARD CHARTERED BANK (SCB)
015 B000147 S
015 C010147 COLOMBO
015 D010147 SRI LANKA
015 E040147 X
015 A000148 SKANDINAVISKA ENSKILDA BANKEN (SEB)
015 B000148 S
015 C010148 STOCKHOLM
015 D010148 SWEDEN
015 E040148 X
015 A000149 UNION BANK OF SWITZERLAND
015 B000149 S
015 C010149 ZURICH
015 D010149 SWITZERLAND
015 E040149 X
015 A000150 DELETE
015 A000151 STANDARD CHARTERED BANK
015 B000151 S
015 C010151 BANGKOK
015 D010151 THAILAND
015 E040151 X
015 A000152 OSMANLI BANKASI A.S. (OTTOMAN BANK)
015 B000152 S
015 C010152 ISTANBUL
015 D010152 TURKEY
015 E040152 X
015 A000153 THE BANK OF NEW YORK
015 B000153 S
015 C010153 LONDON
<PAGE>      PAGE  8
015 D010153 UNITED KINGDOM
015 E040153 X
015 A000154 DELETE
015 A000155 DELETE
015 A000156 BANQUE BRUXELLES LAMBERT
015 B000156 S
015 C010156 BRUSSELS
015 D010156 EASDAG
015 E040156 X
015 A000157 CEDEL (DEPOSITORY)
015 B000157 S
015 C010157 LUXEMBOURG CITY
015 D010157 LUXEMBOURG
015 E040157 X
015 A000158 FIRST CHICAGO CLEARING CENTRE (FCCC)
015 B000158 S
015 C010158 LONDON
015 D010158 UNITED KINGDOM
015 E040158 X
015 A000159 EUROCLEAR
015 B000159 S
015 C010159 BRUSSELS
015 D010159 BELGIUM
015 E040159 X
015 A000160 DELETE
015 A000161 DELETE
015 A000162 DELETE
015 A000163 DELETE
015 A000164 DELETE
015 A000165 DELETE
015 A000166 DELETE
015 A000167 DELETE
015 A000168 DELETE
015 A000169 DELETE
015 A000170 DELETE
015 A000171 DELETE
015 A000172 DELETE
015 A000173 DELETE
015 A000174 STANBIC BANK ZAMBIA LIMITED (STANBIC)
015 B000174 S
015 C010174 LUSAKA
015 D010174 ZAMBIA
015 E040174 X
015 A000175 STANBIC BANK ZIMBABWE LIMITED (STANBIC)
015 B000175 S
015 C010175 HARARE
015 D010175 ZIMBABWE
015 E040175 X
018  000100 Y
019 A000100 Y
019 B000100  197
<PAGE>      PAGE  9
019 C000100 FRNKTEMGRP
024  000100 Y
025 A000101 BANKAMERICA CORP.
025 B000101 94-1687665
025 C000101 E
025 D000101    1804
025 A000102 GENERAL ELECTRIC CAPITAL CORP.
025 B000102 13-1500700
025 C000102 D
025 D000102     982
025 A000103 MERILL LYNCH & CO. INC.
025 B000103 13-5674085
025 C000103 E
025 D000103     668
025 D000104       0
025 D000105       0
025 D000106       0
025 D000107       0
025 D000108       0
028 A010100      2120
028 A020100         0
028 A030100         0
028 A040100      2163
028 B010100      2156
028 B020100         0
028 B030100         0
028 B040100      2220
028 C010100      2787
028 C020100       434
028 C030100         0
028 C040100      1845
028 D010100      2803
028 D020100         1
028 D030100         0
028 D040100      1877
028 E010100      2191
028 E020100         0
028 E030100         0
028 E040100      7290
028 F010100      5739
028 F020100      1240
028 F030100         0
028 F040100      2785
028 G010100     17796
028 G020100      1675
028 G030100         0
028 G040100     18180
028 H000100      3071
029  000100 Y
030 A000100    373
030 B000100  5.75
<PAGE>      PAGE  10
030 C000100  0.00
031 A000100     47
031 B000100      0
032  000100    326
033  000100      0
034  000100 Y
035  000100      1
036 A000100 N
036 B000100      0
037  000100 N
038  000100      0
039  000100 N
040  000100 Y
041  000100 Y
042 A000100   0
042 B000100   0
042 C000100 100
042 D000100   0
042 E000100   0
042 F000100   0
042 G000100   0
042 H000100   0
043  000100    240
044  000100     85
045  000100 Y
046  000100 N
047  000100 Y
048  000100  0.000
048 A010100   100000
048 A020100 0.625
048 B010100   150000
048 B020100 0.500
048 C010100        0
048 C020100 0.000
048 D010100        0
048 D020100 0.000
048 E010100        0
048 E020100 0.000
048 F010100        0
048 F020100 0.000
048 G010100        0
048 G020100 0.000
048 H010100        0
048 H020100 0.000
048 I010100        0
048 I020100 0.000
048 J010100        0
048 J020100 0.000
048 K010100   250000
048 K020100 0.450
049  000100 N
<PAGE>      PAGE  11
050  000100 N
051  000100 N
052  000100 N
053 A000100 N
054 A000100 Y
054 B000100 Y
054 C000100 Y
054 D000100 N
054 E000100 N
054 F000100 N
054 G000100 Y
054 H000100 Y
054 I000100 N
054 J000100 Y
054 K000100 N
054 L000100 Y
054 M000100 Y
054 N000100 N
054 O000100 Y
055 A000100 N
055 B000100 N
056  000100 N
057  000100 N
058 A000100 N
059  000100 Y
060 A000100 Y
060 B000100 Y
061  000100     1000
062 A000100 N
062 B000100   0.0
062 C000100   0.0
062 D000100   0.0
062 E000100   0.0
062 F000100   0.0
062 G000100   0.0
062 H000100   0.0
062 I000100   0.0
062 J000100   0.0
062 K000100   0.0
062 L000100   0.0
062 M000100   0.0
062 N000100   0.0
062 O000100   0.0
062 P000100   0.0
062 Q000100   0.0
062 R000100   0.0
063 A000100   0
063 B000100  0.0
066 A000100 Y
066 B000100 N
066 C000100 N
<PAGE>      PAGE  12
066 D000100 N
066 E000100 N
066 F000100 N
066 G000100 Y
067  000100 N
068 A000100 N
068 B000100 N
069  000100 N
070 A010100 Y
070 A020100 Y
070 B010100 Y
070 B020100 Y
070 C010100 Y
070 C020100 N
070 D010100 Y
070 D020100 Y
070 E010100 Y
070 E020100 N
070 F010100 Y
070 F020100 N
070 G010100 Y
070 G020100 N
070 H010100 Y
070 H020100 N
070 I010100 N
070 I020100 N
070 J010100 Y
070 J020100 N
070 K010100 Y
070 K020100 N
070 L010100 Y
070 L020100 Y
070 M010100 Y
070 M020100 Y
070 N010100 N
070 N020100 N
070 O010100 Y
070 O020100 N
070 P010100 Y
070 P020100 N
070 Q010100 N
070 Q020100 N
070 R010100 N
070 R020100 N
071 A000100     54631
071 B000100     45325
071 C000100     83510
071 D000100   54
072 A000100 12
072 B000100     2024
072 C000100     1005
<PAGE>      PAGE  13
072 D000100        0
072 E000100        0
072 F000100      623
072 G000100        0
072 H000100        0
072 I000100      151
072 J000100        6
072 K000100       27
072 L000100       13
072 M000100        8
072 N000100       25
072 O000100        0
072 P000100        0
072 Q000100        0
072 R000100       18
072 S000100        2
072 T000100      240
072 U000100        0
072 V000100        0
072 W000100       10
072 X000100     1123
072 Y000100        0
072 Z000100     1906
072AA000100     6729
072BB000100     5562
072CC010100     9936
072CC020100        0
072DD010100     1984
072DD020100        0
072EE000100     1213
073 A010100   0.1900
073 A020100   0.0000
073 B000100   0.1100
073 C000100   0.0000
074 A000100        0
074 B000100    14852
074 C000100     2985
074 D000100    19339
074 E000100     1836
074 F000100    70932
074 G000100        0
074 H000100        0
074 I000100        0
074 J000100      101
074 K000100        0
074 L000100      582
074 M000100        0
074 N000100   110627
074 O000100     1490
074 P000100      113
074 Q000100        0
<PAGE>      PAGE  14
074 R010100        0
074 R020100        0
074 R030100      413
074 R040100      343
074 S000100        0
074 T000100   108268
074 U010100    10867
074 U020100        0
074 V010100     9.96
074 V020100     0.00
074 W000100   0.0000
074 X000100     8443
074 Y000100     3044
075 A000100        0
075 B000100    99653
076  000100     0.00
080 A000100 ICI MUTUAL INSURANCE COMPANY
080 C000100   175000
081 A000100 Y
081 B000100 196
082 A000100 N
082 B000100        0
083 A000100 N
083 B000100        0
084 A000100 N
084 B000100        0
085 A000100 Y
085 B000100 N
SIGNATURE   KIMBERLEY MONASTERIO                         
TITLE       ASSISTANT TREASURER 
 


<TABLE> <S> <C>

<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED 
FROM THE FRANKLIN ASSET ALLOCATION FUND DECEMBER 31, 1998 
ANNUAL REPORT AND IS QUALIFIED IN ITS ENTIRETY 
BY REFERENCE TO SUCH FINANCIAL STATEMENT.
</LEGEND>
<SERIES>
   <NUMBER> 1
   <NAME> FRANKLIN ASSET ALLOCATION FUND
       
<S>                             <C>
<PERIOD-TYPE>                   YEAR
<FISCAL-YEAR-END>                          DEC-31-1998
<PERIOD-END>                               DEC-31-1998
<INVESTMENTS-AT-COST>                       72,661,825
<INVESTMENTS-AT-VALUE>                      95,092,264
<RECEIVABLES>                               15,534,969
<ASSETS-OTHER>                                       0   
<OTHER-ITEMS-ASSETS>                                 0
<TOTAL-ASSETS>                             110,627,233
<PAYABLE-FOR-SECURITIES>                     1,490,163
<SENIOR-LONG-TERM-DEBT>                              0
<OTHER-ITEMS-LIABILITIES>                      869,184
<TOTAL-LIABILITIES>                          2,359,347
<SENIOR-EQUITY>                                      0
<PAID-IN-CAPITAL-COMMON>                    85,695,698
<SHARES-COMMON-STOCK>                       10,866,825
<SHARES-COMMON-PRIOR>                        9,902,204
<ACCUMULATED-NII-CURRENT>                       35,773
<OVERDISTRIBUTION-NII>                               0
<ACCUMULATED-NET-GAINS>                        357,292
<OVERDISTRIBUTION-GAINS>                             0
<ACCUM-APPREC-OR-DEPREC>                    22,179,123
<NET-ASSETS>                               108,267,886
<DIVIDEND-INCOME>                            1,005,016    
<INTEREST-INCOME>                            2,024,036
<OTHER-INCOME>                                       0
<EXPENSES-NET>                             (1,123,535)
<NET-INVESTMENT-INCOME>                      1,905,517
<REALIZED-GAINS-CURRENT>                     1,166,727
<APPREC-INCREASE-CURRENT>                    9,935,854
<NET-CHANGE-FROM-OPS>                       13,008,098 
<EQUALIZATION>                                       0
<DISTRIBUTIONS-OF-INCOME>                  (1,984,332) 
<DISTRIBUTIONS-OF-GAINS>                   (1,213,212)
<DISTRIBUTIONS-OTHER>                                0
<NUMBER-OF-SHARES-SOLD>                      4,374,604
<NUMBER-OF-SHARES-REDEEMED>                (3,711,329)
<SHARES-REINVESTED>                            301,346
<NET-CHANGE-IN-ASSETS>                      18,637,702
<ACCUMULATED-NII-PRIOR>                         79,306
<ACCUMULATED-GAINS-PRIOR>                      439,059
<OVERDISTRIB-NII-PRIOR>                              0
<OVERDIST-NET-GAINS-PRIOR>                           0
<GROSS-ADVISORY-FEES>                        (623,263)
<INTEREST-EXPENSE>                                   0
<GROSS-EXPENSE>                            (1,123,535)
<AVERAGE-NET-ASSETS>                        99,652,815
<PER-SHARE-NAV-BEGIN>                            9.050
<PER-SHARE-NII>                                   .180
<PER-SHARE-GAIN-APPREC>                          1.030
<PER-SHARE-DIVIDEND>                            (.190)
<PER-SHARE-DISTRIBUTIONS>                       (.110)
<RETURNS-OF-CAPITAL>                              .000
<PER-SHARE-NAV-END>                              9.960
<EXPENSE-RATIO>                                  1.130
<AVG-DEBT-OUTSTANDING>                               0
<AVG-DEBT-PER-SHARE>                              .000
        


</TABLE>


REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Trustees of Franklin
Asset Allocation Fund, Inc.


In planning and performing our audit of the financial
statements of Franklin Asset Allocation Fund, Inc. for the
year ended December 31, 1998, we considered its internal
control, including controls over safeguarding securities, in
order to determine our auditing procedures for the purpose
of expressing our opinion on the financial statements and to
comply with the requirements of Form NSAR, not to provide
assurance on internal control.

The management of Franklin Asset Allocation Fund, Inc. is
responsible for establishing and maintaining internal
control. In fulfilling this responsibility, estimates and
judgements by management are required to assess the expected
benefits and related costs of controls. Generally, controls
that are relevant to an audit pertain to the entity's
objective of preparing financial statements for external
purposes that are fairly presented in conformity with
generally accepted accounting principles. Those controls
include the safeguarding of assets against unauthorized
acquisition, use or disposition.

Because of inherent limitations in internal control, errors
or irregularities may occur and may not be detected. Also,
projection of any evaluation of internal control to future
periods is subject to the risk that it may become inadequate
because of changes in conditions or that the effectiveness
of the design and operation may deteriorate.

Our consideration of the internal control would not
necessarily disclose all matters in the internal control
that might be material weaknesses under standards
established by the American Institute of Certified Public
Accountants. A material weakness is a condition in which the
design or operation of any specific internal control
component does not reduce to a relatively low level the risk
that errors or irregularities in amounts that would be
material in relation to the financial statements being
audited may occur and not be detected within a timely period
by employees in the normal course of performing their
assigned functions. However, we noted no matters involving
internal control, including controls over safeguarding
securities, that we consider to be material weaknesses, as
defined above as of December 31, 1998.

This report is intended solely for the information and use
of management and the Securities and Exchange Commission.


S\PRICEWATERHOUSECOOPERS LLP




PricewaterhouseCoopers LLP
San Francisco, California
February 4, 1999









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