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SIGNATURE FRANK STRAUSS
TITLE TREASURER
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<NAME> CGM CAPITAL DEVELOPMENT FUND
<SERIES>
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<NAME> CGM CAPTIAL DEVELOPMENT FUND
<S> <C>
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<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 639280046
<INVESTMENTS-AT-VALUE> 737660281
<RECEIVABLES> 15965782
<ASSETS-OTHER> 3713
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 753629776
<PAYABLE-FOR-SECURITIES> 6171875
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 24784997
<TOTAL-LIABILITIES> 30956872
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 624413126
<SHARES-COMMON-STOCK> 26808321
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<OVERDISTRIBUTION-GAINS> 0
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<INTEREST-INCOME> 288893
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<NET-INVESTMENT-INCOME> (2114797)
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<APPREC-INCREASE-CURRENT> (38714156)
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<EQUALIZATION> 0
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<NUMBER-OF-SHARES-REDEEMED> 2085022
<SHARES-REINVESTED> 6153926
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<ACCUMULATED-NII-PRIOR> 0
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</TABLE>
February 9, 1998
To the Board of Trustees of CGM Capital Development Fund
In planning and performing our audit of the financial statements
of the CGM Capital Development Fund (the "Fund") for the year
ended December 31, 1997, 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 to comply
with the requirements of Form N-SAR, not to provide assurance on
internal control.
The management of the Fund 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 control activities.
Generally, control activities that are relevant to an audit
pertain to the entity's objective of preparing financial
statements for external purposes that are fairly presented in
conformity with generally accepted accounting principles. Those
control activities include the safeguarding of assets against
unauthorized acquisition, use or disposition.
Because of inherent limitations in internal control, errors or
irregularities 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 any specific
internal control components 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 internal
control, including control activities 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 Board of Trustees of CGM Capital Development
Fund and the Securities and Exchange Commission.
PRICE WATERHOUSE LLP
