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SIGNATURE CATHY WHITE
TITLE ASST. VICE PRESIDENT
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[DESCRIPTION]Auditors Report of Internal Control
January 17, 1997
To the Board of Directors of
The Alliance Fund, Inc.
In planning and performing our audit of the financial statements of
The Alliance Fund, Inc. (the "Fund") for the year ended November 30,
1996, we considered its internal control structure, including
procedures for safeguarding securities, in order to determine our
auditing procedures for the purposes of expressing our opinion on the
financial statements and to comply with the requirements of Form N-
SAR, and not to provide assurance on the internal control structure.
The management of the Fund is responsible for establishing and
maintaining an internal control structure. In fulfilling this
responsibility, estimates and judgments by management are required to
assess the expected benefits and related costs of internal control
structure policies and procedures. Two of the objectives of an
internal control structure are to provide management with reasonable,
but not absolute, assurance that assets are appropriately safeguarded
against loss from unauthorized use or disposition and that
transactions are executed in accordance with management's
authorization and recorded properly to permit preparation of
financial statements in conformity with generally accepted accounting
principles.
Because of inherent limitations in any internal control structure,
errors or irregularities may occur and may not be detected. Also,
projection of any evaluation of the structure 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 structure would not
necessarily disclose all matters in the internal control structure
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 the
specific internal control structure elements 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 the
internal control structure, including procedures for safeguarding
securities, that we consider to be material weaknesses as defined
above as of November 30, 1996.
This report is intended solely for the information and use of
management and the Securities and Exchange Commission.
PRICE WATERHOUSE LLP
A:\alliance fund inc.doc 01/28/97 11:59 AM fj
|charge code: 23600-100-1
[DESCRIPTION]Report of 10f-3 Transactions
Securities Purchases in Underwritings Involving
Transactions with Donaldson, Lufkin, & Jenrette Securities Co
Subject to Rule 10f-3 Under the Investment Company Act of 1940
THE ALLIANCE FUND
<TABLE>
10f-3 TRANSACTIONS FOR THE PERIOD DECEMBER 1, 1995 THROUGH FEBRUARY 29, 1996
<CAPTION>
Total
Shares Shares % of Issue Shares
Date Shares % of FundPrice perPurchased by Issued Purchased Held
Security PurchasedPurchasedAssets Share Fund Group (000) By Group Broker(s) 02/29/96
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
United Dominion Inds. LT 02/09/96 60,000 0.13% $22.63 60,000 4,500 1.33% Goldman Sachs 60,000
</TABLE>
<TABLE>
10f-3 TRANSACTIONS FOR THE PERIOD MARCH 1, 1996 THROUGH MAY 31, 1996
<CAPTION>
Total
Date Shares % of FundPrice perPurchased by Issued Purchased Held
Security PurchasedPurchasedAssets Share Fund Group (000) By Group Broker(s) 05/31/96
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Lucent Technologoes 04/03/96 176,800 0.48% $27.00 272,300 111,000 0.25% Goldman Sachs 0
Associates First Capital 05/07/96 15,900 0.05% $29.00 81,100 67,000 0.12% Goldman Sachs 0
Western Wireless 05/22/96 113,200 0.26% $23.50 113,200 11,000 1.03% Goldman Sachs 113,200
</TABLE>
<TABLE>
10f-3 TRANSACTIONS FOR THE PERIOD JUNE 1, 1996 THROUGH AUGUST 31, 1996
<CAPTION>
Total
Date Shares % of FundPrice perPurchased by Issued Purchased Held
Security PurchasedPurchasedAssets Share Fund Group (000) By Group Broker(s) 08/31/96
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Teleport Communications 06/27/96 10,000 0.02% $16.00 567,800 23,500 2.42% C.J. Lawrence 149,300
Teleport Communications 06/27/96 159,300 0.26% $16.00 567,800 23,500 2.42% Merrill Lynch 149,300
BJ Services Company 07/01/96 70,000 0.24% $34.25 75,000 8,500 0.88% Merrill Lynch 85,000
BJ Services Company 07/01/96 5,000 0.02% $34.25 75,000 8,500 0.88% Wasserstein 85,000
Pharmacia & Upjohn, Inc. 07/23/96 20,000 0.09% $40.00 20,000 46,000 0.04% Goldman Sachs 60,000
</TABLE>
<TABLE>
10f-3 TRANSACTIONS FOR THE PERIOD SEPTEMBER 1, 1996 THROUGH NOVEMBER 30, 1996
<CAPTION>
Total
Date Shares % of FundPrice perPurchased by Issued Purchased Held
Security PurchasedPurchasedAssets Share Fund Group (000) By Group Broker(s) 11/30/96
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Deutsche Telecom 11/18/96 124,000 0.23% $18.89 1,077,590 85,000 1.27% Goldman Sachs 24,000
</TABLE>
1-Purchase may not exceed 3% of Fund's Total Assets.
2-Purchases by all Alliance Funds may not exceed the greater of (i) 4% of
the principal amount of the offering or (ii) $500,000 in principal amount,
but in no event may exeed 10% of the principal amount of the offering.
