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SIGNATURE MR. PATRICK F. QUAN
TITLE SECRETARY
INDEPENDENT AUDITORS' REPORT
American Balanced Fund, Inc.:
In planning and performing our audit of the financial statements
of American Balanced Fund, Inc. (the "Fund") for the year ended
December 31, 1995, we considered its internal control structure,
including procedures for safeguarding securities, in order to
determine our auditing procedures for the purpose of expressing an
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
safeguarded against loss from unauthorized use or disposition and
that transactions are executed in accordance with management's
authorization and recorded properly to permit the preparation of
financial statements in accordance with generally accepted
accounting principles.
Because of inherent limitations in any internal control structure,
errors or irregularities may nevertheless occur and not be
detected. Also, projection of any evaluation of the structure to
future periods is subject to the risk that procedures may become
inadequate because of changes in conditions or that the
effectiveness of the design and operation of policies and
procedures 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, 1995.
This report is intended solely for the information and use of the
management and the Securities and Exchange Commission.
Deloitte & Touche LLP
January 26, 1996
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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