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SIGNATURE DENNIS J MCDONNELL
TITLE PRES, CEO & TRUSTEE
KPMG Peat Marwick LLP
700 Louisiana
P.O. Box 4545
Houston, TX 77210-4545
Independent Auditors' Report On Internal Accounting Control
The Board of Directors
Mosher, Inc.
In planning and performing our audit of the financial statements
of Mosher, Inc. for the year ended December 31, 1996, we
considered its internal control structure, including procedures
for safeguarding securities, 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 Mosher, Inc. is responsible for establishing
and maintaining an internal control structure. In fulfilling this
responsibility, estimates and judgements 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 accordance with
generally accepted accounting principles.
Because of inherent limitations in any system of 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 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, 1996.
This report is intended solely for the information and use
of management and the Securities and Exchange Commission.
/s/ KPMG Peat Marwick LLP
KPMG Peat Marwick LLP
January 17, 1997
NSAR ITEM 77C
Mosher, Inc.
(a) An Annual Meeting of Shareholders was held on June 7, 1996 and a
Special Meeting of Shareholders was held on October 29, 1996.
(b) The election of Directors of Mosher, Inc. (the "Fund") at the Annual
Meeting of Shareholders on June 7, 1996 included:
Dougal Cameron
Milton E. Eliot
Christopher T. Jones
Richard L. Kendall
John H. Linsey
Robert C. McNair
Charles C. Ryrie
Robert Stewart, Jr.
(c) The following were voted on at the June 7, 1996 meeting:
1) Election of Directors
Dougal Cameron For 1,140,970 Withheld 150
Milton E. Eliot For 1,141,120 Withheld 0
Christopher T. Jones For 1,141,120 Withheld 0
Richard L. Kendall For 1,141,120 Withheld 0
John H. Linsey For 1,140,970 Withheld 150
Robert C. McNair For 1,140,970 Withheld 150
Charles C. Ryrie For 1,123,969 Withheld 17,151
Robert Stewart, Jr. For 1,132,975 Withheld 8,145
2) To Ratify the Selection of KPMG Peat Marwick LLP as
Independent Auditors for its Current Fiscal Year.
For 1,139,673 Against 0
The following was voted on at the October 29, 1996 meeting:
1) Approval of New Investment Advisory Agreement in the event of
a change of control of the Adviser.
For 1,149,913 Against 2,000
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