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SIGNATURE MICHELLE A. WHALEN
TITLE COMPLIANCE ADMIN.
<TABLE> <S> <C>
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<NAME> STRATTON MONTHLY DIVIDEND SHARES, INC.
<MULTIPLIER> 1000
<S> <C>
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<PERIOD-END> DEC-31-1996
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</TABLE>
Tait, Weller & Baker
Certified Public Accountants
Report of Independent Certified Public Accountants
on Internal Control Structure
Board of Directors
Stratton Monthly Dividend Shares, Inc.
Plymouth Meeting, Pennsylvania
In planning and performing our audit of the financial statements of Stratton
Monthly Dividend Shares, Inc. for the period ended December 31, 1996, we
considered its internal control structure, including procedures 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 the internal
control structure.
The management of the Fund is responsibile 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 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 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 December 31, 1996.
This report is intended solely for the information and use of management and
the Securities and Exchange Commission, and should not be used for any other
purpose.
Tait, Weller & Baker
Philadelphia, Pennsylvania
January 13, 1997
EXHIBIT SUB-ITEM 77C
The Special Meeting of Shareholders of Stratton Monthly Dividend Shares,
Inc. was held on November 29, 1996 for purposes of considering and acting
upon the matter set forth in the Proxy Statement and summarized below. A
quorum was represented at the Meeting and the voting results are also set
forth below:
(1) The Shareholders of Stratton Monthly Dividend Shares, Inc. approved
the change in the Fund's policy of investing at least 25% of its
assets in securities of public utility companies engaged in the
production, transmission or distribution of electric, energy, gas,
water or telephone service so that the policy includes securities of
Real Estate Investment trusts in addition to securities of companies
on the foregoing industries. The voting results were: 2,441,982
shares voted "FOR"; 74,418 shares voted "AGAINST"; and 46,680 shares
"ABSTAINED."