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SIGNATURE MICHELLE A. WHALEN
TITLE SR. ADMINISTRATOR
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<NAME> STRATTON MONTHLY DIVIDEND REIT SHARES, INC.
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TAIT, WELLER & BAKER
Certified Public Accountants
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
ON INTERNAL CONTROL STRUCTURE
Board of Directors
Stratton Monthly Dividend REIT Shares, Inc.
Plymouth Meeting, Pennsylvania
In planning and performing our audit of the financial statements of
Stratton Monthly Dividend REIT Shares, Inc. for the period ended December
31, 1997, 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 Trust 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 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, 1997.
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.
Philadelphia, Pennsylvania
January 16, 1998
Exhibit Sub-Item 77C
The Special Meeting of Stockholders of Stratton Growth Fund, Inc., Stratton
Monthly Dividend Shares, Inc. and The Stratton Funds, Inc. was held
December 9, 1997 for purposes of considering and acting upon the matters
set forth in the Proxy Statement and summarized below. A quorum was
represented at each Meeting and the voting results are also set forth
below:
Stratton Growth Fund, Inc.
A. Election of Eight Directors:
For Withhold Authority
James W. Stratton 1,268,569 5,009
Lynne M. Cannon 1,268,030 5,548
John J. Lombard, Jr. 1,268,569 5,009
Douglas J. MacMaster, Jr. 1,268,569 5,009
Henry A. Rentschler 1,268,569 5,009
Merritt N. Rhoad, Jr. 1,268,249 5,329
Alexander F. Smith 1,268,403 5,175
Richard W. Stevens 1,268,569 5,009
B. Selection of Tait, Weller & Baker as the Fund's independent public
accountants for the fiscal year ending December 31, 1997:
For Against Abstain
1,261,022 1,542 11,014
Stratton Monthly Dividend REIT Shares, Inc.
A. Election of Eight Directors:
For Withhold Authority
James W. Stratton 2,324,792 62,858
Lynne M. Cannon 2,316,485 71,165
John J. Lombard, Jr. 2,315,429 72,221
Douglas J. MacMaster, Jr. 2,306,301 81,349
Henry A. Rentschler 2,313,337 74,313
Merritt N. Rhoad, Jr. 2,321,045 66,605
Alexander F. Smith 2,318,704 68,946
Richard W. Stevens 2,322,043 65,607
B. Selection of Tait, Weller & Baker as the Fund's independent public
accountants for the fiscal year ending December 31, 1997:
For Against Abstain
2,317,676 17,875 52,099
C. Approval of the change to the industry concentration policy in order
that the Fund's concentration will be only in Real Estate Investment
Trusts:
For Against Abstain Not Voted
1,906,702 158,926 57,236 264,786
D. Approval of the change of the name of the Fund from Stratton Monthly
Dividend Shares, Inc. to Stratton Monthly Dividend REIT Shares, Inc.:
For Against Abstain
2,170,552 167,943 49,155
Stratton Small-Cap Yield Fund
A. Election of Eight Directors:
For Withhold Authority
James W. Stratton 659,468 560
Lynne M. Cannon 659,455 573
John J. Lombard, Jr. 659,288 740
Douglas J. MacMaster, Jr. 659,436 592
Henry A. Rentschler 659,267 761
Merritt N. Rhoad, Jr. 659,255 773
Alexander F. Smith 659,423 605
Richard W. Stevens 659,288 740
B. Selection of Tait, Weller & Baker as the Fund's independent public
accountants for the fiscal year ending December 31, 1997:
For Against Abstain
658,239 87 1,702
