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SIGNATURE CATHY WHITE
TITLE VICE PRESIDENT
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January 9, 1998
To the Shareholders and 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,
1997, we considered its internal control, including control
activities for 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 N-
SAR, not to provide assurance on internal control.
The management of the Fund is responsible for establishing and
maintaining internal control. In fulfilling this responsibility,
estimates and judgments by management are required to assess the
expected benefits and related costs of control activities.
Generally, control activities 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 control activities
include the safeguarding of assets against unauthorized acquisition,
use or disposition.
Because of inherent limitations in internal control, errors or
irregularities may occur and 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 internal control would not necessarily disclose
all matters in 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 components 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 control activities for
safeguarding securities, that we consider to be material weaknesses
as defined above as of November 30, 1997.
This report is intended solely for the information and use of
management and the Board of Directors of the Fund and the Securities
and Exchange Commission.
PRICE WATERHOUSE LLP
A:\NSAR The Alliance Fund.doc 01/23/98 12:59 PM ali
|Chg: 69437-240-1
The Alliance Fund, Inc.
Exhibit 77Q1(a)
811-00204_______
Articles of Incorporation: Incorporated by reference to Exhibit 1 to
Post-Effective Amendment No. 120 to Registrant's Registration Statement
on Form N-1A, filed with the Securities and Exchange Commission on
October 31, 1997.
By-Laws: Incorporated by reference to Exhibit 2 to Post-Effective
Amendment No. 120 to Registrant's Registration Statement on Form N-1A,
filed with the Securities and Exchange Commission on October 31, 1997.
The Alliance Fund, Inc.
Exhibit 77Q1(e)
811-00204
Investment Advisory Agreement: Incorporated by reference to Exhibit 5 to
Post-Effective Amendment No. 120 to Registrant's Registration Statement
on Form N-1A, filed with the Securities and Exchange Commission on
October 31, 1997.
The Alliance Fund, Inc.
811-00204
Item 77I Terms of new or amended securities
In 1996, the Fund issued a new class of shares, Adviser Class
shares. Adviser Class shares,along with Class A, Class B, Class C shares
each represent an interest in the same portfolio of investments of the
Fund, have the same rights and are identical in all respects, except
that (i) Class A shares bear the expense of the initial sales charge (or
contingent deferred sales charge, when applicable) and Class B and
Class C shares bear the expense of the deferred sales charge,
(ii) Class B shares and Class C shares each bear the expense of a higher
distribution services fee than that borne by Class A shares, and Advisor
Class shares do not bear such a fee, (iii) Class B and Class C shares
bear higher transfer agency costs than that borne by Class A and Advisor
Class shares; (iv) each of Class A, Class B and Class C has exclusive
voting rights with respect to provisions of the Rule 12b-1 Plan pursuant
to which its distribution services fee is paid and other matters for
which separate class voting is appropriate under applicable law,
provided that, if the Fund submits to a vote of the Class A
shareholders, an amendment to the Rule 12b-1 Plan that would materially
increase the amount to be paid thereunder with respect to the Class A
shares, then such amendment will also be submitted to the Class B and
Advisor Class shareholders and the Class A, the Class B and the Advisor
Class shareholders will vote separately by class; and (v) Class B and
Advisor Class shares are subject to a conversion feature. Each class
has different exchange privileges and certain different shareholder
service options available.
[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, 1996 THROUGH FEBRUARY 28, 1997
<CAPTION>
Total
Shares Shares % of Issue Shares
Date Shares % of FundPrice perPurchased bIssued Purchased Held
Security PurchasedPurchasedAssets (1Share Fund Group (000) By Group (Broker(s) 02/28/97
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Circuit City (Car Max Grou02/04/97 143,500 0.28% $20.00 238,900 21,860 1.09% Morgan Stanley 470,000
</TABLE>
<TABLE>
10f-3 TRANSACTIONS FOR THE PERIOD JUNE 1, 1997 THROUGH AUGUST 31, 1997
<CAPTION>
Total
Date Shares % of FundPrice perPurchased bIssued Purchased Held
Security PurchasedPurchasedAssets Share Fund Group (000) By Group Broker(s) 08/31/97
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Santa Fe International Cor06/09/97 90,000 0.22% $28.50 229,200 35,000 0.65% Goldman Sachs 0
Polo Ralph Lauren 06/11/97 14,000 0.03% $26.00 14,000 29,500 0.05% Goldman Sachs 0
ISPAT Internationals 08/07/97 89,500 0.19% $27.00 126,500 25,000 0.51% CS First Boston Corp. 0
</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.
<TABLE>
10f-3 TRANSACTIONS FOR THE PERIOD OCTOBER 6, 1997 THROUGH NOVEMBER 30, 1997
<CAPTION>
Total
Date Shares % of FundPrice perPurchased bOffered Purchased Held
Security PurchasedPurchasedAssets Share Fund Group (000) By Group Broker(s) 11/30/97
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Teleport Comm.Group 11/06/97 71,200 $45.00 134,200 15,000 0.89% Merrill Lynch 1,250,000
Teleport Comm.Group 11/06/97 10,000 $45.00 134,200 15,000 0.89% CS First Boston Corp. 1,250,000
Teleport Comm.Group 11/06/97 10,000 $45.00 134,200 15,000 0.89% UBS Securities 1,250,000
</TABLE>
* Unless otherwise indicated, the securities were part of an issue registered
under the Securities Act of 1933 and offered to the public.
**Indicates the puchase of an Eligible Rule 144A Security.
1) Purchases by all Alliance Funds, including the Fund, may not exceed: (a) if
purchased in an offering than an Eligible Rule 144A Offering, 25% of the
principal amount of the offering of such class; or (b) if purchased in an
Eligible Rule 144A Offering, 25% of the total of (i) the principal amount
of the offering of such class sold by the underwriters or members of the
selling syndicate to qualified institutional buyers, plus (ii) the principal
amount of the offering of such class in any concurrent public offering.
