PAGE 1
000 B000000 08/31/99
000 C000000 350900
000 D000000 N
000 E000000 NF
000 F000000 Y
000 G000000 N
000 H000000 N
000 I000000 3.0
000 J000000 A
001 A000000 TEMPLETON GLOBAL SMALLER COMPANIES FUND, INC.
001 B000000 811-3143
001 C000000 9545277591
002 A000000 500 EAST BROWARD BLVD, SUITE 2100
002 B000000 FT. LAUDERDALE
002 C000000 FL
002 D010000 33394
002 D020000 3091
003 000000 N
004 000000 N
005 000000 N
006 000000 N
007 A000000 N
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007 C010700 7
007 C010800 8
007 C010900 9
007 C011000 10
008 A000001 TEMPLETON INVESTMENT COUNSEL, INC.
008 B000001 A
008 C000001 801-15125
008 D010001 FORT LAUDERDALE
008 D020001 FL
008 D030001 33394
008 D040001 3091
010 A000001 FRANKLIN TEMPLETON SERVICES, INC.
010 C010001 FORT LAUDERDALE
010 C020001 FL
010 C030001 33394
010 C040001 3091
011 A000001 FRANKLIN TEMPLETON DISTRIBUTORS, INC.
011 B000001 8-5889
011 C010001 ST. PETERSBURG
011 C020001 FL
011 C030001 33716
011 C040001 1205
012 A000001 FRANKLIN TEMPLETON INVESTOR SERVICES, INC.
012 B000001 84-00000
012 C010001 ST. PETERSBURG
012 C020001 FL
012 C030001 33716
012 C040001 1205
013 A000001 PRICEWATERHOUSECOOPERS LLP
013 B010001 NEW YORK
013 B020001 NY
013 B030001 10036
015 A000001 THE CHASE MANHATTAN BANK
015 B000001 C
015 C010001 NEW YORK
015 C020001 NY
015 C030001 10081
015 E010001 X
015 A000002 THE CHASE MANHATTAN BANK
015 B000002 S
015 C010002 BUENOS AIRES
015 D010002 ARGENTINA
015 D020002 1061
015 E040002 X
PAGE 2
015 A000003 THE CHASE MANHATTAN BANK
015 B000003 S
015 C010003 SYDNEY
015 D010003 AUSTRALIA
015 D020003 NSW 2000
015 E040003 X
015 A000004 BANK AUSTRIA AG
015 B000004 S
015 C010004 VIENNA
015 D010004 AUSTRIA
015 D020004 A-1011
015 E040004 X
015 A000005 GENERALE BANK
015 B000005 S
015 C010005 BRUSSELS
015 D010005 BELGIUM
015 D020005 1000
015 E040005 X
015 A000006 CITIBANK, N.A.
015 B000006 S
015 C010006 SAO PAULO
015 D010006 BRAZIL
015 D020006 SP01311-920
015 E040006 X
015 A000007 BARCLAYS BANK OF BOTSWANA LIMITED
015 B000007 S
015 C010007 GABORONE
015 D010007 BOTSWANA
015 E040007 X
015 A000008 DELETE
015 A000009 CANADIAN IMPERIAL BANK OF COMMERCE
015 B000009 S
015 C010009 TORONTO
015 D010009 CANADA
015 D020009 M5L-1G9
015 E040009 X
015 A000010 STANDARD CHARTERED BANK
015 B000010 S
015 C010010 DHAKA
015 D010010 BANGLADESH
015 D020010 1000
015 E040010 X
015 A000011 DEN DANSKE BANK
015 B000011 S
015 C010011 COPENHAGEN
015 D010011 DENMARK
015 E040011 X
015 A000012 CESKOSLOVENSKA OBCHODNI BANKA, A.S.
015 B000012 S
015 C010012 PRAGUE
015 D010012 CZECH REPUBLIC
PAGE 3
015 D020012 115 20
015 E040012 X
015 A000013 THE CHASE MANHATTAN BANK
015 B000013 S
015 C010013 LONDON
015 D010013 UNITED KINGDOM
015 D020013 EC2N 4AJ
015 E040013 X
015 A000014 MERITA BANK LTD
015 B000014 S
015 C010014 HELSINKI
015 D010014 FINLAND
015 E040014 X
015 A000015 BANQUE PARIBAS
015 B000015 S
015 C010015 PARIS
015 D010015 FRANCE
015 D020015 75078
015 E040015 X
015 A000016 DRESDNER BANK AG
015 B000016 S
015 C010016 FRANKFURT
015 D010016 GERMANY
015 E040016 X
015 A000017 BARCLAYS BANK PLC
015 B000017 S
015 C010017 ATHENS
015 D010017 GREECE
015 D020017 10562
015 E040017 X
015 A000018 THE CHASE MANHATTAN BANK
015 B000018 S
015 C010018 HONG KONG
015 D010018 HONG KONG
015 E040018 X
015 A000019 THE HONGKONG AND SHANGHAI BANKING CORP. LTD
015 B000019 S
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015 D010019 INDONESIA
015 D020019 10023
015 E040019 X
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015 A000021 THE HONGKONG AND SHANGHAI BANKING CORP LTD
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015 D010021 INDIA
PAGE 4
015 D020021 400 025
015 E040021 X
015 A000022 THE FUJI BANK, LIMITED
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015 D010022 JAPAN
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015 E040023 X
015 A000024 CITIBANK BUDAPEST RT.
015 B000024 S
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015 D020024 H-1051
015 E040024 X
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015 B000025 S
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015 E040025 X
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015 A000027 CHASE MANHATTAN BANK MEXICO, S.A.
015 B000027 S
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015 D010027 MEXICO
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015 A000028 DELETE
015 A000029 BANQUE COMMERCIALE DU MAROC S.A.
015 B000029 S
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015 E040029 X
015 A000030 ABN AMRO N.V.
015 B000030 S
015 C010030 DE BREDA
015 D010030 NETHERLANDS
015 D020030 4800
015 E040030 X
015 A000031 NATIONAL NOMINEES LIMITED
015 B000031 S
PAGE 5
015 C010031 AUCKLAND
015 D010031 NEW ZEALAND
015 E040031 X
015 A000032 DEN NORSKE BANK ASA
015 B000032 S
015 C010032 OSLO
015 D010032 NORWAY
015 D020032 N-0107
015 E040032 X
015 A000033 THE HONGKONG AND SHANGHAI BANKING CORP. LTD
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015 D010033 PHILIPPINES
015 E040033 X
015 A000034 BANCO ESPIRITO SANTO E COMERCIAL DE LISBOA SA
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015 D010034 PORTUGAL
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015 D010035 PAKISTAN
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015 A000036 STANDARD CHARTERED BANK
015 B000036 S
015 C010036 SINGAPORE
015 D010036 SINGAPORE
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015 E040036 X
015 A000037 CHASE MANHATTAN BANK CMB, S.A.
015 B000037 S
015 C010037 MADRID
015 D010037 SPAIN
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015 E040037 X
015 A000038 THE HONGKONG AND SHANGHAI BANKING CORP LTD
015 B000038 S
015 C010038 COLOMBO
015 D010038 SRI LANKA
015 D020038 1
015 E040038 X
015 A000039 SKANDINAVISKA ENSKILDA BANKEN
015 B000039 S
015 C010039 STOCKHOLM
015 D010039 SWEDEN
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015 E040039 X
015 A000040 UBS AG
015 B000040 S
PAGE 6
015 C010040 ZURICH
015 D010040 SWITZERLAND
015 D020040 8021
015 E040040 X
015 A000041 THE CHASE MANHATTAN BANK
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015 A000042 CITIBANK, N.A.
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015 A000043 CITIBANK, N.A.
015 B000043 S
015 C010043 CARACAS
015 D010043 VENEZUELA
015 D020043 1010
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015 A000044 THE CHASE MANHATTAN BANK
015 B000044 S
015 C010044 ISTANBUL
015 D010044 TURKEY
015 D020044 80700
015 E040044 X
015 A000045 THE STANDARD BANK OF SOUTH AFRICA LIMITED
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015 C010045 JOHANNESBURG
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015 E040045 X
015 A000046 THE HONGKONG AND SHANGHAI BANKING CORP LTD
015 B000046 S
015 C010046 SEOUL
015 D010046 SOUTH KOREA
015 E040046 X
015 A000047 THE HONGKONG AND SHANGHAI BANKING CORP LTD
015 B000047 S
015 C010047 SHANGHAI
015 D010047 CHINA
015 D020047 200120
015 E040047 X
015 A000048 THE HONGKONG AND SHANGHAI BANKING CORP LTD
015 B000048 S
015 C010048 SHENZHEN
015 D010048 CHINA
015 E040048 X
015 A000049 BANKBOSTON, N.A.
015 B000049 S
PAGE 7
015 C010049 MONTEVIDEO
015 D010049 URUGUAY
015 E040049 X
015 A000050 CITIBANK, N.A.
015 B000050 S
015 C010050 CAIRO
015 D010050 EGYPT
015 E040050 X
015 A000051 BARCLAYS BANK OF GHANA LIMITED
015 B000051 S
015 C010051 ACCRA
015 D010051 GHANA
015 E040051 X
015 A000052 THE HONGKONG AND SHANGHAI BANKING CORP LTD
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015 C010052 PORT LOUIS
015 D010052 MAURITIUS
015 E040052 X
015 A000053 BARCLAYS BANK OF ZIMBABWE LIMITED
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015 C010053 HARARE
015 D010053 ZIMBABWE
015 E040053 X
015 A000054 BANK HANDLOWY W. WARSZAWIE S.A.
015 B000054 S
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015 D010054 POLAND
015 D020054 00-950
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015 A000055 CESKOSLOVENSKA OBCHODNI BANKA A.S.
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015 D010056 LUXEMBOURG
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015 A000057 HSBC BANK MIDDLE EAST
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015 D010057 BAHRAIN
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015 A000058 ING BANK N.V.
015 B000058 S
015 C010058 BUCHAREST
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015 E040058 X
PAGE 8
015 A000059 BARCLAYS BANK OF ZAMBIA LIMITED
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015 C010059 LUSAKA
015 D010059 ZAMBIA
015 E040059 X
015 A000060 DELETE
015 A000061 THE CYPRUS POPULAR BANK LTD.
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015 D020061 CY-1598
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015 A000062 CITIBANK, N.A
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015 A000063 DELETE
015 A000064 BANQUE PARIBAS
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015 D010064 ITALY
015 D020064 20121
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015 A000065 SOCIETE GENERALE DE BANQUES EN COTE D'IVOIRE
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015 D010065 IVORY COAST
015 D020065 01
015 E040065 X
015 A000066 THE BANK OF BERMUDA LIMITED
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015 C010066 HAMILTON
015 D010066 BERMUDA
015 E040066 X
015 A000067 THE FIRST NATIONAL BANK OF CHICAGO
015 B000067 S
015 C010067 LONDON
015 D010067 UNITED KINGDOM
015 D020067 NW 1 3FN
015 E040067 X
015 A000068 HSBC BANK MIDDLE EAST
015 B000068 S
015 C010068 MUSCAT
015 D010068 OMAN
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015 A000069 STANDARD BANK NAMIBIA LTD
015 B000069 S
015 C010069 WINDHOEK
015 D010069 NAMIBIA
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PAGE 9
015 A000070 CHASE MANHATTAN BANK INTERNATIONAL
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015 C010070 MOSCOW
015 D010070 RUSSIA
015 D020070 125047
015 E040070 X
015 A000071 DELETE
015 A000072 EUROCLEAR
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PAGE 10
020 A000007 MACQUARIE EQUITIES
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PAGE 11
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PAGE 12
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PAGE 13
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PAGE 14
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PAGE 15
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PAGE 16
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PAGE 17
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SIGNATURE /s/JAMES R. BAIO
James R. Baio
TITLE TREASURER
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE TEMPLETON
GLOBAL SMALLER COMPANIES FUND, INC. AUGUST 31, 1999 ANNUAL REPORT AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000350900
<NAME> TEMPLETON GLOBAL SMALLER COMPANIES FUND, INC.
<SERIES>
<NUMBER> 001
<NAME> TEMPLETON GLOBAL SMALLER COMPANIES FUND, INC. - CLASS A
<S> <C>
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<NET-CHANGE-FROM-OPS> 142500368
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (20124664)
<DISTRIBUTIONS-OF-GAINS> (32018770)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 185542788
<NUMBER-OF-SHARES-REDEEMED> (234204372)
<SHARES-REINVESTED> 7007145
<NET-CHANGE-IN-ASSETS> (224817320)
<ACCUMULATED-NII-PRIOR> 20510225
<ACCUMULATED-GAINS-PRIOR> 31883873
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> (9202670)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (17237802)
<AVERAGE-NET-ASSETS> 1185824034
<PER-SHARE-NAV-BEGIN> 6.90
<PER-SHARE-NII> 0.13
<PER-SHARE-GAIN-APPREC> 0.66
<PER-SHARE-DIVIDEND> (0.11)
<PER-SHARE-DISTRIBUTIONS> (0.18)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 7.40
<EXPENSE-RATIO> 1.39
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE TEMPLETON
GLOBAL SMALLER COMPANIES FUND, INC. AUGUST 31, 1999 ANNUAL REPORT AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000350900
<NAME> TEMPLETON GLOBAL SMALLER COMPANIES FUND, INC.
<SERIES>
<NUMBER> 002
<NAME> TEMPLETON GLOBAL SMALLER COMPANIES FUND, INC. - CLASS B
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> AUG-31-1999
<PERIOD-END> AUG-31-1999
<INVESTMENTS-AT-COST> 991791218
<INVESTMENTS-AT-VALUE> 1105612552
<RECEIVABLES> 6207203
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1111819755
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 15852082
<TOTAL-LIABILITIES> 15852082
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 907330849
<SHARES-COMMON-STOCK> 29870
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 21774665
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 53040825
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 113821334
<NET-ASSETS> 1095967673
<DIVIDEND-INCOME> 36782235
<INTEREST-INCOME> 3491150
<OTHER-INCOME> 0
<EXPENSES-NET> (17237802)
<NET-INVESTMENT-INCOME> 23035583
<REALIZED-GAINS-CURRENT> 53185618
<APPREC-INCREASE-CURRENT> 66279167
<NET-CHANGE-FROM-OPS> 142500368
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 29870
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (224817320)
<ACCUMULATED-NII-PRIOR> 20510225
<ACCUMULATED-GAINS-PRIOR> 31883873
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> (9202670)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (17237802)
<AVERAGE-NET-ASSETS> 84595
<PER-SHARE-NAV-BEGIN> 7.02
<PER-SHARE-NII> 0.07
<PER-SHARE-GAIN-APPREC> 0.27
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 7.36
<EXPENSE-RATIO> 2.21 <F1>
<FN>
<F1>ANNUALIZED
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE TEMPLETON
GLOBAL SMALLER COMPANIES FUND, INC. AUGUST 31, 1999 ANNUAL REPORT AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000350900
<NAME> TEMPLETON GLOBAL SMALLER COMPANIES FUND, INC.
<SERIES>
<NUMBER> 003
<NAME> TEMPLETON GLOBAL SMALLER COMPANIES FUND, INC. - CLASS C
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> AUG-31-1999
<PERIOD-END> AUG-31-1999
<INVESTMENTS-AT-COST> 991791218
<INVESTMENTS-AT-VALUE> 1105612552
<RECEIVABLES> 6207203
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1111819755
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 15852082
<TOTAL-LIABILITIES> 15852082
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 907330849
<SHARES-COMMON-STOCK> 4061841
<SHARES-COMMON-PRIOR> 5645488
<ACCUMULATED-NII-CURRENT> 21774665
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 53040825
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 113821334
<NET-ASSETS> 1095967673
<DIVIDEND-INCOME> 36782235
<INTEREST-INCOME> 3491150
<OTHER-INCOME> 0
<EXPENSES-NET> (17237802)
<NET-INVESTMENT-INCOME> 23035583
<REALIZED-GAINS-CURRENT> 53185618
<APPREC-INCREASE-CURRENT> 66279167
<NET-CHANGE-FROM-OPS> 142500368
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (381690)
<DISTRIBUTIONS-OF-GAINS> (996475)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1311746
<NUMBER-OF-SHARES-REDEEMED> (3082452)
<SHARES-REINVESTED> 187059
<NET-CHANGE-IN-ASSETS> (224817320)
<ACCUMULATED-NII-PRIOR> 20510225
<ACCUMULATED-GAINS-PRIOR> 31883873
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> (9202670)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (17237802)
<AVERAGE-NET-ASSETS> 34148809
<PER-SHARE-NAV-BEGIN> 6.78
<PER-SHARE-NII> 0.08
<PER-SHARE-GAIN-APPREC> 0.65
<PER-SHARE-DIVIDEND> (0.06)
<PER-SHARE-DISTRIBUTIONS> (0.18)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 7.27
<EXPENSE-RATIO> 2.13
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE TEMPLETON
GLOBAL SMALLER COMPANIES FUND, INC. AUGUST 31, 1999 ANNUAL REPORT AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000350900
<NAME> TEMPLETON GLOBAL SMALLER COMPANIES FUND, INC.
<SERIES>
<NUMBER> 004
<NAME> TEMPLETON GLOBAL SMALLER COMPANIES FUND-ADVISOR CLASS
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> AUG-31-1999
<PERIOD-END> AUG-31-1999
<INVESTMENTS-AT-COST> 991791218
<INVESTMENTS-AT-VALUE> 1105612552
<RECEIVABLES> 6207203
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1111819755
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 15852082
<TOTAL-LIABILITIES> 15852082
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 907330849
<SHARES-COMMON-STOCK> 839947
<SHARES-COMMON-PRIOR> 1039536
<ACCUMULATED-NII-CURRENT> 21774665
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 53040825
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 113821334
<NET-ASSETS> 1095967673
<DIVIDEND-INCOME> 36782235
<INTEREST-INCOME> 3491150
<OTHER-INCOME> 0
<EXPENSES-NET> (17237802)
<NET-INVESTMENT-INCOME> 23035583
<REALIZED-GAINS-CURRENT> 53185618
<APPREC-INCREASE-CURRENT> 66279167
<NET-CHANGE-FROM-OPS> 142500368
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (115538)
<DISTRIBUTIONS-OF-GAINS> (162672)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2435651
<NUMBER-OF-SHARES-REDEEMED> (2677179)
<SHARES-REINVESTED> 41939
<NET-CHANGE-IN-ASSETS> (224817320)
<ACCUMULATED-NII-PRIOR> 20510225
<ACCUMULATED-GAINS-PRIOR> 31883873
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> (9202670)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (17237802)
<AVERAGE-NET-ASSETS> 6994220
<PER-SHARE-NAV-BEGIN> 6.91
<PER-SHARE-NII> 0.16
<PER-SHARE-GAIN-APPREC> 0.65
<PER-SHARE-DIVIDEND> (0.12)
<PER-SHARE-DISTRIBUTIONS> (0.18)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 7.42
<EXPENSE-RATIO> 1.14
</TABLE>
To the Board of Directors of
Templeton Global Smaller Companies Fund, Inc.
In planning and performing our audit of the financial statements and financial
highlights of Templeton Global Smaller Companies Fund, Inc. for the year ended
August 31, 1999, 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 financial highlights and to comply with the requirements of Form N-SAR, not
to provide assurance on internal control.
The management of Templeton Global Smaller Companies Fund, Inc. 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 controls. Generally, controls that are
relevant to an audit pertain to the entity's objective of preparing financial
statements and financial highlights 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 fraud 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 one or more
of the internal control components does not reduce to a relatively low level the
risk that misstatements caused by error or fraud in amounts that would be
material in relation to the financial statements and financial highlights 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 and its operation, including controls for
safeguarding securities, that we consider to be material weaknesses as defined
above as of August 31, 1999.
This report is intended solely for the information and use of management, the
Board of Directors of Templeton Global Smaller Companies Fund, Inc. and the
Securities and Exchange Commission.
/s/PricewaterhouseCoopers LLP
New York, New York
September 30, 1999
77 K - CHANGE IN INDEPENDENT ACCOUNTANTS
On August 13, 1999, McGladrey & Pullen, LLP (McGladrey) resigned as independent
auditors of the Fund pursuant to an agreement by PricewaterhouseCoopers LLP
(PwC) to acquire McGladrey's investment company practice. The McGladrey partners
and professionals serving the Fund at the time of the acquisition joined PwC.
The reports of McGladrey on the financial statements of the Fund during the past
two fiscal years contained no adverse opinion or disclaimer of opinion, and were
not qualified or modified as to uncertainty, audit scope or accounting
principles. In connection with its audits for the two most recent fiscal years
and through August 13, 1999, there were no disagreements with McGladrey on any
matter of accounting principle or practices, financial statement disclosure, or
auditing scope or procedure, which disagreements, if not resolved to the
satisfaction of McGladrey would have caused it to make reference to the subject
matter of disagreement in connection with its report. On August 31, 1999, the
Fund, with the approval of its Board of Directors and its Audit Committee,
engaged PwC as its independent auditors."
Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street
Washington D.C. 20549
We were previously the independent accountants for Templeton Global Smaller
Companies Fund, Inc. We have read their notification of change in independent
accountants made in Item 77K of Form N-SAR. We agree with the statements in the
filing.
/s/MCGLADREY & PULLEN, LLP
New York, New York
October 27, 1999
