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<PAGE> PAGE 2
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<PAGE> PAGE 3
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SIGNATURE HEIKO H. THIEME
TITLE CHIEF EXECUTIVE OFF.
EXHIBIT 77 (b)
LANDSBURG PLATT RASCHIATORE & DALTON
Certified Public Accountants
117 South 17th Street 13th Floor Philadelphia, Pennsylvania 19103
215-561-6633 FAX 215-561-2070
July 18, 1996
To The Board of Directors
The American Heritage Fund, Inc.
1370 Avenue of the Americas
31st Floor
New York, NY 10019
In planning and performing our audit of the financial statements of The
American Heritage Fund, Inc. for the year ended May 31, 1996, we consider 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, not to provide assurance on the internal control structure.
The management of The American Heritage Fund, Inc. is responsible for
establishing and maintaining an internal control structure. In fulfilling this
responsibility, estimates and judgments by management are required to asses the
expected benefits and related cost of internal control structure policies and
procedures. Two of the objectives of an internal structure are to provide
management with reasonable, but not absolute, assurance that assets are
safeguarded against loss from unauthorized use or disposition and 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 may 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 with 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
May 31, 1996.
This report is intended solely for the information and use of management and
the Securities and Exchange Commission.
/s/ Landsburg Platt Raschiatore & Dalton
LANDSBURG PLATT RASCHIATORE & DALTON
EXHIBIT 77 (E)
The disclosure under the caption "Legal Proceedings" in the Registrant's
Prospectus dated October 19, 1995 as Supplemented on July 18, 1996 filed
pursuant to Rule 497 under the Securities Act of 1933 is hereby incorporated by
reference.
EXHIBIT 77(O)
<TABLE>
<CAPTION>
Date of Number of
Purchase Issuer Shares Seller
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
12/08/95 Eckerd Corp 1,000 Morgan Stanley & Co. Inc.
12/19/95 NCI Building Systems, Inc. 2,000 Montgomery Securities
12/19/95 Health & Retirement Property Trust 5,000 Smith Barney Shearson Inc.
01/25/96 Nice Systems Ltd - ADR 1,000 Bishop Rosen & Co. Inc.
01/25/96 World Color Press Inc. 5,000 Donald Lufkin & Jenrette
Securities Corp.
02/01/96 Electric Fuel Corp. 5,000 Bishop Rosen & Co. Inc.
03/01/96 Baan Company NV 1,500 Morgan Stanley & Co. Inc.
03/05/96 Beacon Properties Corp. 2,500 Donaldson Lufkin & Jenrette
Securities Corp.
03/08/96 Case Corporation 2,000 Morgan Stanley & Co.
03/08/96 Case Corporation 2,500 Donaldson Lufkin & Jenrette
Securities Corp.
03/13/96 Orchard Supply Hardware 10,000 Montgomery Securities
Stores Corp.
03/14/96 Coer D'Alene Mines Corp. (PR) 9,000 Bishop Rosen & Co. Inc.
03/29/96 Tadiran Telecommunications 1,000 Paine Webber Incorporated
04/03/96 Reckson Associates Realty Corp. 5,000 Donaldson Lufkin & Jenrette
Securities Corp.
</TABLE>
1
<PAGE>
<TABLE>
<CAPTION>
Date of Number of
Purchase Issuer Shares Seller
<S> <C> <C> <C>
04/17/96 Terranova (Bermuda) Holdings Ltd. 500 Merrill Lynch Pierce Fenner &
Smith Inc.
</TABLE>
Each purchase was on a delivery versus payment basis. The information upon
which the determination described in paragraph (h)(3) of Rule 10f-3 was made
consisted of representations of an executive officer of the Fund with respect
to compliance with procedures adopted by the Board of Directors. Bear, Stearns
& Co. Inc. was a member of the underwriting syndicate with respect to each of
the above-named issuers.
2
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 6
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> MAY-31-1996
<PERIOD-END> MAY-31-1996
<INVESTMENTS-AT-COST> 35,199,572
<INVESTMENTS-AT-VALUE> 20,964,595
<RECEIVABLES> 664,020
<ASSETS-OTHER> 1,030,880
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 22,659,495
<PAYABLE-FOR-SECURITIES> 983,688
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 246,054
<TOTAL-LIABILITIES> 1,229,742
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 68,609,851
<SHARES-COMMON-STOCK> 28,148,091
<SHARES-COMMON-PRIOR> 48,970,443
<ACCUMULATED-NII-CURRENT> (1,175,397)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (31,769,724)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (14,234,977)
<NET-ASSETS> 21,429,753
<DIVIDEND-INCOME> 423,660
<INTEREST-INCOME> 232,111
<OTHER-INCOME> 5,128
<EXPENSES-NET> 1,516,705
<NET-INVESTMENT-INCOME> (855,806)
<REALIZED-GAINS-CURRENT> (8,172,888)
<APPREC-INCREASE-CURRENT> 13,187,053
<NET-CHANGE-FROM-OPS> 4,158,359
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 4,827,260
<NUMBER-OF-SHARES-REDEEMED> 25,649,612
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (20,822,352)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
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<GROSS-EXPENSE> 1,516,705
<AVERAGE-NET-ASSETS> 24,257,202
<PER-SHARE-NAV-BEGIN> 0.63
<PER-SHARE-NII> (0.02)
<PER-SHARE-GAIN-APPREC> 0.15
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<AVG-DEBT-PER-SHARE> 0.050
</TABLE>
