DAVIS NEW YORK VENTURE FUND INC, 485BPOS, 1997-08-07

DAVIS NEW YORK VENTURE FUND INC
485BPOS, 1997-08-07

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<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM N-1A

REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933

REGISTRATION NO. 2-29858

POST-EFFECTIVE AMENDMENT NO. 54

AND

REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940

REGISTRATION NO. 811-1701

AMENDMENT NO. 29

DAVIS NEW YORK VENTURE FUND, INC.

124 East Marcy Street
Santa Fe, New Mexico 87501
(1-505-983-4335)

Agent For Service: Samuel P. Ynzunza, Esq.

124 East Marcy Street
Santa Fe, New Mexico 87501

Agent For Service: Sheldon R. Stein
D'Ancona & Pflaum
30 North LaSalle Street
Suite 2900
Chicago, Illinois 60602
(1-312-580-2014)

It is proposed that this filing will become effective:
immediately upon filing pursuant to paragraph (b)
---

X on August 4, 1997, pursuant to paragraph (b)
---
60 days after filing pursuant to paragraph (a)
on , pursuant to paragraph (a) of Rule 485
-----------

In accordance with Section 24(f) of the Investment Company Act of 1940 and
Rule 24f-2 thereunder, Registrant has previously elected to register an
indefinite number of shares of its Common Stock. The 24f-2 Notice was filed
on or about September 26, 1996.

<PAGE> 2

FORM N-1A
DAVIS NEW YORK VENTURE FUND, INC. - CLASS A, CLASS B
AND CLASS C SHARES

POST-EFFECTIVE AMENDMENT NO. 54 TO REGISTRATION
STATEMENT NO. 2-29858 UNDER THE SECURITIES ACT OF 1933
AND AMENDMENT NO. 29 UNDER THE INVESTMENT COMPANY
ACT OF 1940 TO REGISTRATION STATEMENT NO. 811-1701.

<TABLE>
CROSS REFERENCE SHEET
---------------------
<CAPTION>
N-1A
ITEM NO. PROSPECTUS CAPTION OR PLACEMENT
-------- -------------------------------
<C> <S>
1 Front Cover
2 Summary
3 Financial Highlights
4 Summary; Investment Objective and Policies
5 Adviser, Sub-Adviser and Distributor; Distribution Plans;
Purchase of Shares; Summary; Investment Objective and
Policies
5A Management's Discussion of Fund Performance (contained in
the 1996 Annual Report)
6 Summary; Shareholder Inquiries; Dividends and
Distributions; Federal Income Taxes; Fund Shares
7 Purchase of Shares; Adviser, Sub-Adviser and Distributor;
Exchange of Shares; Determining the Price of Shares;
Dividends and Distributions
8 Redemption of Shares; Exchange of Shares
9 (Not Applicable)

PART B CAPTION OR PLACEMENT
---------------------------
10 Cover Page
11 Table of Contents
12 (Not Applicable)
13 Investment Restrictions; Hedging of Foreign Currency
Risks; Repurchase Agreements Portfolio Transactions
14 Directors and Officers
15 Certain Shareholders of the Fund
16 Investment Advisory Services; Custodian; Auditors;
Determining the Price of Shares; Distribution of Fund
Shares
17 Portfolio Transactions
18 <F*>
19 Determining the Price of Shares; Reduction of Class A
Sales Charge
20 <F*>
21 <F*>
22 Performance Data
23 Financial Statements are incorporated by reference
from the 1996 Annual Report to Shareholders.

<FN>
- --------------------
<F*>INCLUDED IN PROSPECTUS
</TABLE>

<PAGE> 3

FORM N-1A
DAVIS NEW YORK VENTURE FUND, INC. - CLASS Y SHARES

<TABLE>
CROSS REFERENCE SHEET
---------------------
<CAPTION>
N-1A
ITEM NO. PROSPECTUS CAPTION OR PLACEMENT
-------- -------------------------------
<C> <S>
1 Front Cover
2 Summary
3 Financial Highlights
4 Summary; Investment Objective and Policies
5 Adviser, Sub-Adviser and Distributor; Purchase of
Shares; Summary; Investment Objective and Policies
5A Management's Discussion of Fund Performance (contained
in the 1996 Annual Report)
6 Summary; Shareholder Inquiries; Dividends and
Distributions; Federal Income Taxes; Fund Shares
7 Purchase of Shares; Adviser, Sub-Adviser and
Distributor; Exchange of Shares; Determining the
Price of Shares; Dividends and Distributions
8 Redemption of Shares; Exchange of Shares
9 (Not Applicable)

PART B CAPTION OR PLACEMENT
--------------------------

10 Cover Page
11 Table of Contents
12 (Not Applicable)
13 Investment Restrictions; Hedging of Foreign Currency
Risks; Repurchase Agreements Portfolio Transactions
14 Directors and Officers
15 Certain Shareholders of the Fund
16 Investment Advisory Services; Custodian; Auditors;
Determining the Price of Shares; Distribution of
Fund Shares
17 Portfolio Transactions
18 <F*>
19 Determining the Price of Shares; Reduction of Class A
Sales Charge
20 <F*>
21 <F*>
22 Performance Data
23 Financial Statements are incorporated by reference
from the 1996 Annual Report to Shareholders.
<FN>
- --------------------
<F*>INCLUDED IN PROSPECTUS
</TABLE>

<PAGE> 4

<TABLE>
TABLE OF CONTENTS
<CAPTION>

PAGE
<S> <C>
Summary 2
Financial Highlights 4
Investment Objective and Policies 6
Adviser, Sub-Adviser and Distributor 9
Distribution Plans 10
Purchase of Shares 11
Telephone Privilege 16
Exchange of Shares 16
Redemption of Share 17
Determining the Price of Shares 19
Dividends and Distributions 19
Federal Income Taxes 20
Fund Shares 20
Performance Data 21
Shareholder Inquiries 21
</TABLE>

<PAGE> 5

PROSPECTUS DECEMBER 1, 1997
CLASS A, CLASS B AND CLASS C AS REVISED AUGUST 4, 1997

DAVIS NEW YORK VENTURE FUND, INC.
124 EAST MARCY STREET
SANTA FE, NEW MEXICO 87501
1-800-279-0279
------------------------

MINIMUM INVESTMENT PLANS AVAILABLE

Initial Purchase $1,000 Individual Retirement Account (IRA)
For Retirement Plans $250 Prototype Retirement Plans
Subsequent Investment $25 Exchange Privilege
Automatic Investment Plan
Automatic Withdrawals Plan

DAVIS NEW YORK VENTURE FUND, INC. (THE "FUND") SEEKS TO
ACHIEVE GROWTH OF CAPITAL. It invests primarily in common stocks.

The Fund offers four classes of shares, Class A, B, C and Y, each having
different expense levels and sales charges. These alternatives permit you to
choose the method of purchasing shares that is most beneficial to you,
depending on the amount of the purchase, the length of time you expect to hold
the shares and other circumstances. The Class Y shares, available only to
certain qualified institutional investors, are offered through a separate
prospectus. For more information about the Class Y shares, see "Purchase of
Shares--Alternative Purchase Arrangements."

This Prospectus concisely sets forth information about the Class A,
Class B and Class C shares of the Fund that prospective investors should know
before investing. It should be read carefully and retained for future
reference. A Statement of Additional Information dated December 1, 1996 as
revised August 4, 1997, has been filed with the Securities and Exchange
Commission and is incorporated herein by reference. A copy of this Statement
and other information about the Fund may be obtained without charge by writing
to or calling the Fund at the above address or telephone number.

------------------------

SHARES IN THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, ANY BANK, AND ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

1
<PAGE> 6

SUMMARY

FUND EXPENSES. The following table is intended to assist you in
understanding the various costs and expenses that an investor in the Class A,
B and C shares of the Fund will bear directly or indirectly. The information
is based on the Fund's fiscal period ended January 31, 1997. You can refer to
the section "Adviser, Sub-Adviser and Distributor" and "Purchase of Shares"
for more information on transaction and operating expenses of the Fund.

<TABLE>
<CAPTION>
Shareholder Transaction Expenses Class A Class B Class C
- -------------------------------- ------- ------- -------
<S> <C> <C> <C>
Maximum sales load imposed on purchases 4.75% None None
Maximum sales load imposed on reinvested dividends None None None
Deferred sales load (a declining percentage of the
lesser of the net asset value of the shares
redeemed or the total cost of such shares)
Redeemed during first year 0.75%<F*> 4.00% 1.00%<F*>
Redeemed during second or third year None 3.00% None
Redeemed during fourth or fifth year None 2.00% None
Redeemed during sixth year None 1.00% None
Redeemed after sixth year None None None
Exchange Fee None None None

Annual Fund operating expenses (as a percentage of average net assets)
- ----------------------------------------------------------------------
Management fees 0.57% 0.57% 0.57%
12b-1 fees<F**> 0.18% 0.97% 1.00%
Transfer Agent Fees 0.08% 0.09% 0.06%
Other expenses 0.07% 0.07% 0.07%
----- ----- -----
Total Fund operating expenses 0.90% 1.70% 1.70%

<FN>
<F*> On certain Class A shares purchased after December 1, 1996 and redeemed
during the first year after purchase, there is a 0.75% deferred sales charge.
On Class C shares redeemed during the first year after purchase, there is a 1%
deferred sales charge.

<F**> The effect of a Rule 12b-1 plan is that long-term shareholders may pay
more than the maximum front-end sales charge permitted under applicable rules
of the National Association of Securities Dealers, Inc.
</TABLE>

Example:

You would pay the following expenses on a $1,000 investment, assuming a
5% annual return and (except as provided below) redemption at the end of each
time period:

<TABLE>
<CAPTION>
1 year 3 years 5 years 10 years
------ ------- ------- --------
<S> <C> <C> <C> <C>
Class A $56 $75 $95 $153

Class B $47 $74 $102 N/A
Class B (assuming no redemption at end of period) $17 $54 $92 N/A

Class C $17 $54 $92 $201
Class C (assuming no redemption at end of period) $17 $54 $92 $201
</TABLE>

THE 5% RATE USED IN THE EXAMPLE IS ONLY FOR ILLUSTRATION AND IS NOT INTENDED TO
BE INDICATIVE OF THE FUTURE PERFORMANCE OF THE FUND, WHICH MAY BE MORE OR LESS
THAN THE ASSUMED RATE. FUTURE EXPENSES MAY BE MORE OR LESS THAN THOSE SHOWN.

2
<PAGE> 7

THE FUND. Davis New York Venture Fund, Inc. is an open-end,
diversified, management investment company incorporated in Maryland in 1968
and registered under the Investment Company Act of 1940.

The Fund offers four classes of shares, Class A, B, C and Y. Class A
shares may be purchased at a price equal to their net asset value per share
plus a front-end sales charge imposed at the time of purchase. Purchases of
$1 million or more of Class A shares may be purchased at net asset value, but
shares purchased after December 1, 1996 are subject to a .75% contingent
deferred sales charge ("CDSC") on redemptions made within one year after
purchase. Class B shares may be purchased at net asset value, with no
front-end sales charge, but are subject to a CDSC on most redemptions made
within six years after purchase. Class C shares may also be purchased at net
asset value but are subject to a CDSC of 1% on redemptions made within one
year after purchase. These alternatives permit an investor to choose the
method of purchasing shares that is most beneficial given the amount of the
purchase, the length of time the investor expects to hold the shares, and
other circumstances. Each class of shares pays a Rule 12b-1 distribution fee
at an annual rate not to exceed (i) for Class A shares, 0.25% of the Fund's
aggregate average daily net assets attributable to the Class A shares and (ii)
for Class B and C shares, 1.00% of the Fund's aggregate average daily net
assets attributable to each such class. The purpose and function of the
deferred sales charge, and distribution fees with respect to the Class B and
Class C shares is the same as those of the front-end sales charge and
distribution services fee with respect to the Class A shares. The Class Y
shares, available only to certain qualified institutional investors, are
offered through a separate prospectus. For more information about the Class Y
shares, see "Purchase of Shares--Alternative Purchase Arrangements".

Each share of the Fund represents an identical interest in the
investment portfolio of the Fund. However, shares differ by class in
important respects. For example, Class B shares incur higher distribution
services fees and bear certain other expenses and will thus have a higher
expense ratio and pay correspondingly lower dividends than Class A shares.
Class B shares will automatically convert to Class A shares eight years after
the end of the calendar month in which the shareholder's order to purchase was
accepted, in the circumstances and subject to the qualifications described in
this Prospectus. Class C shares, like Class B shares, will also have a higher
expense ratio and pay correspondingly lower dividends than Class A shares, as
a result of higher distribution services fees and certain other expenses.
Unlike Class B shares, Class C shares do not have a conversion feature and
therefore will always be subject to higher distribution fees and other
expenses than Class A shares. The per share net asset value of the Class B
and Class C shares generally will be lower than the per share net asset value
of the Class A shares, reflecting the daily expense accruals of additional
distribution fees and certain other expenses applicable to Class B and C
shares. It is expected, however, that the per share net asset value of the
Class B and Class C shares generally will be lower than the per share net
asset value of the Class A shares, reflecting the daily expense accruals of
additional distribution fees and certain other expenses applicable to Class B
and Class C shares. The Board of Directors may offer additional classes of
shares in the future and may at any time discontinue the offering of any class
of shares. See "Purchase of Shares--Alternative Purchase Arrangements".

3
<PAGE> 8

INVESTMENT OBJECTIVE. The Fund's investment objective is growth of
capital. The Fund invests primarily in common stocks. These securities
are subject to the risk of price fluctuations reflecting both market
evaluations of the businesses involved and general changes in the equity
markets. The Fund may invest in foreign securities and attempt to
reduce currency fluctuation risks by engaging in related hedging
transactions. These transactions involve special risk factors. There
is no assurance that the investment objective of the Fund will be
achieved. See "Investment Objective and Policies".

INVESTMENT ADVISER, SUB-ADVISER AND DISTRIBUTOR. Davis Selected
Advisers, L.P., (the "Adviser") is the investment adviser for the Fund. Davis
Selected Advisers, NY, Inc., a wholly-owned subsidiary of the Adviser,
performs certain research and portfolio management services for the Fund under
a Sub Advisory Agreement with the Adviser. Davis Distributors, LLC (the
"Distributor") serves as the principal underwriter for the Fund. For more
information, see "Adviser, Sub-Adviser and Distributor".

PURCHASES, EXCHANGES AND REDEMPTIONS. Initial and subsequent
minimum investments in the Class A, B and C shares may be made in amounts
equal to $1,000 and $25, respectively, except that the minimum initial
investment for retirement plans is $250. Shares may be exchanged under
certain circumstances at net asset value for the same class of shares of
certain other funds managed by the Adviser. Accounts with a market value of
less than $250 caused by shareholder redemptions are redeemable by the Fund.
See "Purchase of Shares," "Exchange of Shares" and "Redemption of Shares".
Class A shareholders who are eligible to purchase Class Y shares may exchange
their shares for Class Y shares of the Fund. See "Purchase of Shares --
Alternative Purchase Arrangements" for Class Y eligibility requirements.

SHAREHOLDER SERVICES. Questions regarding the Fund or your account
may be directed to Davis Selected Advisers, L.P., at 1-800-279-0279 or to your
sales representative. Written inquiries may be directed to State Street Bank
& Trust Co., c/o The Davis Funds, P.O. Box 8406, Boston, MA 02266-8406.
During severe market conditions, the Distributor may experience difficulty in
accepting telephone redemptions or exchanges. If you are unable to contact the
Distributor at the above telephone number, you should call 1-505-820-3000
Monday through Friday between 8:00 a.m. and 4:00 p.m. Mountain Time.

4
<PAGE> 9

FINANCIAL HIGHLIGHTS

The following table provides you with information about the financial
history of the Fund's Class A and B shares. The table expresses the information
in terms of a single Class A, Class B, or Class C share for the respective
periods presented and is supplementary information to the Fund's financial
statements which are included in the 1996 Annual Report to Shareholders. Such
Report may be obtained by writing or calling the Fund. The Fund's financial
statements and financial highlights for the five years ended July 31, 1996
have been audited by the Fund's independent certified public accountants,
whose opinion thereon is contained in the Annual Report.

<TABLE>
<CAPTION>
------------------------------------------ CLASS A -------------------------------------------
Six Months
ended YEAR ENDED JULY 31,
1/31/97 ----------------------------------------------------------------------------------
(Unaudited) 1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
----------- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of
Period $15.24 $14.56 $12.04 $12.08 $10.70 $ 9.85 $ 9.39 $ 9.72 $ 8.07 $10.88 $10.41
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------

Income From Investment Operations
- ---------------------------------

Net Investment
Income .09 .20 .14 .16 .10 .14 .16 .36 .21 .19 .15

Net Gains on Securities
(both realized and
unrealized) 4.14 1.64 2.95 .54 1.98 1.57 1.02 .38 2.22 (.64) 2.10
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Total from
Investment
Operations 4.23 1.84 3.09 .70 2.08 1.71 1.18 .74 2.43 (.45) 2.25

Less Distributions
- ------------------

Dividends (from net
investment income) (.18) (.15) (.12) (.16) (.10) (.21) (.18) (.37) (.22) (.22) (.10)

Distributions
from Realized Capital
Gains (.70) (1.01) (.45) (.58) (.59) (.55) (.50) (.70) (.34) (1.66) (1.68)

Distributions
from Paid In Capital -- -- -- -- (.01) (.10) (.04) -- (.22) (.48) --
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Total Distributions (.88) (1.16) (.57) (.74) (.70) (.86) (.72) (1.07) (.78) (2.36) (1.78)
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------

Net Asset Value,
End of Period $18.59 $15.24 $14.56 $12.04 $12.08 $10.70 $ 9.85 $ 9.39 $ 9.72 $ 8.07 $10.88
====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ======

Total Return<F1> 28.07% 13.04% 27.21% 5.99% 20.20% 18.62% 14.29% 8.12% 33.44% (3.30)% 25.22%

Ratios/Supplemental Data
- ------------------------

Net Assets, end of Period 2,928 2,151 1,595 1,077 739 494 421 345 319 168 232
(000,000 omitted)

Ratio of Expenses
to Average Net Assets .90%<F*> .87% .90% .87% .89% .91% .97% .97% .97% 1.01% .93%

Ratio of Net Income
to Average Net Assets .98%<F*> 1.30% 1.11% 1.19% .85% 1.36% 1.84% 3.78% 2.45% 2.42% 1.48%

Portfolio Turnover Rate 11% 19% 15% 13% 24% 26% 52% 47% 58% 38% 55%

Average Commission Rate
per Share $.0600 -- -- -- -- -- -- -- -- -- --

<FN>
<F1>Sales charges are not reflected in calculation.
<F*>Annualized

5
<PAGE> 10

<CAPTION>
CLASS B CLASS C
----------------------------------------- ----------------------------------------
DECEMBER 1, 1994 DECEMBER 20, 1994
SIX MONTHS (COMMENCEMENT SIX MONTHS (COMMENCEMENT
ENDED YEAR OF OPERATIONS) ENDED YEAR OF OPERATIONS)
1/31/97 ENDED THROUGH 1/31/97 ENDED THROUGH
(UNAUDITED) 7/31/96 7/31/95 (UNAUDITED) 7/31/96 7/31/95
----------- ------- ------- ----------- ------- -------

<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 15.08 $ 14.43 $ 10.88 $ 15.12 $ 14.47 $ 11.16
------- ------- ------- ------- ------- -------

Income From Investment Operations
- ---------------------------------

Net Investment Income .01 .04 (.01) .01 .04 (.01)

Net Gains on Securities

(both realized and unrealized) 4.10 1.62 3.56 4.12 1.62 3.32
------- ------- ------- ------- ------- -------

Total From Investment Operations 4.11 1.66 3.55 4.13 1.66 3.31

Less Distributions
- ------------------

Dividends (from net investment income) (.04) -- -- (.04) -- --

Distributions From Realized Capital Gains (.70) (1.01) -- (.70) (1.01) --
------- ------- ------- ------- ------- -------

Total Distributions (.74) (1.01) -- (.74) (1.01) --
------- ------- ------- ------- ------- -------

Net Asset Value, End of Period $ 18.45 $ 15.08 $ 14.43 $ 18.51 $ 15.12 $ 14.47
======= ======= ======= ======= ======= =======

Total Return<F1> 27.51% 11.81% 26.07%<F*> 27.57% 11.78% 26.42%<F*>
- ----------------

Ratios/Supplemental Data
- ------------------------

Net Assets, End of Period (000 omitted) 584,067 288,835 39,857 275,823 117,255 11,729

Ratio of Expenses to Average Net Assets 1.70%<F*> 1.73% 1.78%<F*> 1.70%<F*> 1.73% 1.78%<F*>

Ratio of Net Income to Average Net Assets .17%<F*> .44% .23%<F*> .17%<F*> .44% .23%<F*>

Portfolio Turnover Rate 11% 19% 15% 11% 19% 15%

Average Commission Rate Per Share $.0600 -- -- $.0600 -- --

<FN>
<F1> Contigent deferred sales charges are not reflected in calculation
<F*> Annualized
</TABLE>

6
<PAGE> 11

INVESTMENT OBJECTIVE AND POLICIES

GENERAL. The Fund's investment objective is growth of capital. There
is no assurance that such objective will be achieved. The Fund ordinarily
invests in securities which the Adviser or Sub-Adviser believes have
above-average appreciation potential. Usually these securities are common
stocks. Income is not a significant factor in selecting the Fund's
investments.

Generally, the Fund invests predominantly in equity securities of
companies with market capitalizations of at least $250 million. It also will
invest in issues with smaller capitalizations. Special risks associated with
investing in small cap issuers relative to larger cap issuers include high
volatility of valuations and less liquidity. Investments will consist of
issues which the Adviser or Sub-Adviser believes have capital growth potential
due to factors such as undervalued assets or earnings potential, product
development and demand, favorable operating ratios, resources for expansion,
management abilities, reasonableness of market price, and favorable overall
business prospects.

An investment in the Fund may not constitute a complete investment
program and may not be appropriate for all investors or for short-term
investing.

FOREIGN INVESTMENTS. The Fund may invest in securities of foreign
issuers or securities which are principally traded in foreign markets
("foreign securities"). Investments in foreign securities may be made through
the purchase of individual securities on recognized exchanges and developed
over-the-counter markets, through American Depository Receipts ("ADRs")
covering such securities, and through U.S. registered investment companies
investing primarily in foreign securities. The Fund, however, may not invest
in the securities of other investment companies if more than 10% of the Fund's
total assets would then be invested in such companies. Other registered
investment companies usually have their own management costs or fees and the
Adviser will also earn its regular fee on Fund assets invested in such other
companies. When the Fund is invested in foreign securities, the operating
expenses of the Fund are likely to be higher than that of an investment company
investing exclusively in U.S. securities, since the management, custodial and
certain other expenses are expected to be higher.

Investments in foreign securities may involve a higher degree of risk
than investments in domestic issuers. Foreign securities are often
denominated in foreign currencies, which means that their value will be
affected by changes in exchange rates, as well as other factors that affect
securities prices. There is generally less publicly available information
about foreign securities and securities markets, and there may be less
government regulation and supervision of foreign issuers and securities
markets. Foreign securities and markets may also be affected by political and
economic instabilities, and may be more volatile and less liquid than domestic
securities and markets. Investment risks may include expropriation or
nationalization of assets, confiscatory taxation, exchange controls and
limitations on the use or transfer of assets, and significant withholding
taxes. Foreign economies may differ from the United States favorably or
unfavorably with respect to inflation rates, balance of payments, capital
reinvestment, gross national product expansion, and other relevant indicators.

To attempt to reduce exposure to currency fluctuations, the Fund may
trade in forward foreign currency exchange contracts (forward contracts),
currency futures contracts and options thereon and securities indexed to
foreign securities. These techniques may be used to lock in an exchange rate
in connection with transactions in securities denominated or traded in foreign
currencies, to hedge the currency risk in foreign securities held by the Fund
and to hedge a currency risk involved in an anticipated purchase of foreign
securities. Cross-hedging may also be utilized, that is, entering into a
hedge transaction in respect to a different foreign currency than the one in
which a trade is to be made or in which a portfolio security is principally
traded. There is no limitation on the amount of assets that may be committed
to currency hedging. However, the Fund will not engage in a futures
transaction if it would cause the aggregate of initial margin deposits and
premiums paid on outstanding options on futures contracts to exceed 5% of the
value of its total assets (excluding in calculating such 5% any in-the-money
amount of any option). Currency hedging transactions may be utilized as a tool
to reduce currency fluctuation risks due to a current or

7
<PAGE> 12

anticipated position in foreign securities. The successful use of currency
hedging transactions usually depends on the Adviser's or the Sub-Adviser's
ability to forecast interest rate and currency exchange rate movements. Should
interest or exchange rates move in an unexpected manner, the anticipated
benefits of futures contracts, options or forward contracts may not be achieved
or losses may be realized and thus the Fund could be in a worse position than
if such strategies had not been used. Unlike many exchange-traded futures
contracts, there are no daily price fluctuation limits with respect to options
on currencies and forward contracts, and adverse market movements could
therefore continue to an unlimited extent over a period of time. In addition,
the correlation between movements in the prices of such instruments and
movements in the price of the securities and currencies hedged or used for
cover will not be perfect and could produce unanticipated losses. Unanticipated
changes in currency prices may result in poorer overall performance for the
Fund than if it had not entered into such contracts. When taking a position in
an anticipatory hedge, the Fund is required to set aside cash or high grade
liquid securities to fully secure the obligation.

TEMPORARY DEFENSIVE INVESTMENTS. For defensive purposes or to
accommodate inflows of cash awaiting more permanent investment, the Fund may
temporarily and without limitation hold high-grade short-term money market
instruments, cash and cash equivalents, including repurchase agreements.

RESTRICTED AND ILLIQUID SECURITIES. The Fund may invest in
restricted securities, i.e., securities which, if sold, would cause the Fund
to be deemed an "underwriter" under the Securities Act of 1933 (the "1933
Act") or which are subject to contractual restrictions on resale. The Fund's
policy is to not purchase or hold illiquid securities (which may include
restricted securities) if more than 15% of the Fund's net assets would then be
illiquid. If at any time more than 15% of the Fund's net assets are illiquid,
steps will be taken as soon as practicable to reduce the percentage of
illiquid assets to 15% or less.

The restricted securities which the Fund may purchase include securities
which have not been registered under the 1933 Act but are eligible for
purchase and sale pursuant to Rule 144A ("Rule 144A Securities"). This Rule
permits certain qualified institutional buyers, such as the Fund, to trade in
privately placed securities even though such securities are not registered
under the 1933 Act. The Adviser or Sub-Adviser, under criteria established by
the Fund's Board of Directors, will consider whether Rule 144A securities
being purchased or held by the Fund are illiquid and thus subject to the
Fund's policy limiting investments in illiquid securities. In making this
determination, the Adviser or Sub-Adviser will consider the frequency of
trades and quotes, the number of dealers and potential purchasers, dealer
undertakings to make a market, and the nature of the security and the market
place trades (for example, the time needed to dispose of the security, the
method of soliciting offers and the mechanics of transfer). The liquidity of
Rule 144A Securities will also be monitored by the Adviser and Sub-Adviser
and, if as a result of changed conditions, it is determined that a Rule 144A
Security is no longer liquid, the Fund's holding of illiquid securities will
be reviewed to determine what, if any, action is required in light of the
policy limiting investments in such securities. Investing in Rule 144A
Securities could have the effect of increasing the amount of investments in
illiquid securities if qualified institutional buyers are unwilling to
purchase such securities.

REPURCHASE AGREEMENTS. The Fund may enter into repurchase
agreements, but normally will not enter into repurchase agreements maturing in
more than seven days, and may make repurchase agreement transactions through a
joint account with other funds which have the same investment adviser. A
repurchase agreement, as referred to herein, involves a sale of securities to
the Fund, with the concurrent agreement of the seller (a bank or securities
dealer which the Adviser or Sub-Adviser determines to be financially sound at
the time of the transaction) to repurchase the securities at the same price
plus an amount equal to accrued interest at an agreed-upon interest rate,
within a specified time, usually less than one week, but, on occasion, at a
later time. The repurchase obligation of the seller is, in effect, secured by
the underlying securities. In the event of a bankruptcy or other default of a
seller of a repurchase agreement, the Fund could experience both delays in
liquidating the underlying securities and losses, including (a) possible
decline in the value of the collateral during the period while the Fund seeks
to enforce its rights thereto; (b) possible loss of all or a part of the income
during this period; and (c) expenses of enforcing its rights.

8
<PAGE> 13

BORROWING. The Fund may not borrow money except from banks for
extraordinary or emergency purposes in amounts not exceeding 10% of the value
of the Fund's total assets (excluding the amount borrowed) at the time of
borrowing. The Fund may not pledge or hypothecate any of its assets, except
in connection with permitted borrowing in amounts not exceeding 15% of the
value of the Fund's total assets (excluding the amount borrowed) at the time
of such borrowing.

PORTFOLIO TRANSACTIONS. The Adviser and Sub-Adviser are responsible for
the placement of portfolio transactions, subject to the supervision of the
Board of Directors. It is the Fund's policy to seek to place portfolio
transactions with brokers or dealers who will execute transactions as
efficiently as possible and at the most favorable price. Subject to this
policy, research services and placement of orders by securities firms for Fund
shares may be taken into account as a factor in placement of portfolio
transactions. In seeking the Fund's investment objective, the Fund may trade
to some degree in securities for the short term if the Adviser or Sub-Adviser
believes that the growth potential of a security no longer exists, considers
that other securities have more growth potential, or otherwise believes that
such trading is advisable. Because of the Fund's investment policies,
portfolio turnover rate will vary. At times it could be high, which could
require the payment of larger amounts in brokerage commissions. The Adviser
and Sub-Adviser are authorized to place portfolio transactions with Shelby
Cullom Davis & Co., a member of the New York Stock Exchange, which may be
deemed to be an affiliate of the Adviser, if the commissions are fair and
reasonable and comparable to commissions charged by non-affiliated qualified
brokerage firms for similar services. Portfolio turnover rates are set forth
in "Financial Highlights".

FUNDAMENTAL POLICIES. The Fund has adopted certain investment
restrictions set forth in the Statement of Additional Information. These
restrictions and the Fund's investment objective are fundamental policies and
may not be changed unless authorized by a vote of the shareholders. All other
policies are non-fundamental and may be changed without shareholder approval.
Except for the restriction with respect to illiquid securities, any percentage
restrictions set forth in the prospectus or in the Statement of Additional
Information apply as of the time of investment without regard to later
increases or decreases in the values of securities or total net assets.

ADVISER, SUB-ADVISER AND DISTRIBUTOR

Subject to the direction and supervision of the Fund's Board of
Directors, the Fund's affairs are managed by Davis Selected Advisers, L.P.,
124 East Marcy Street, Santa Fe, New Mexico 87501. Venture Advisers, Inc. is
the Adviser's sole general partner. Shelby M.C. Davis is the controlling
shareholder of the general partner. The Adviser manages the Fund's investment
and business operations. Davis Distributors, LLC (the "Distributor"), a
subsidiary of the Adviser serves as the distributor or principal underwriter
of the Fund's shares. Davis Selected Advisers-NY, Inc., ("DSA-NY" or the
"Sub-Adviser") a wholly-owned subsidiary of the Adviser, performs research and
portfolio management services for the Fund under a Sub-Advisory Agreement with
the Adviser. The Adviser also acts as investment adviser for Davis High
Income Fund, Inc., Davis Tax-Free High Income Fund, Inc., Davis Series, Inc.
and Davis International Series, Inc. (collectively with the Fund, the "Davis
Funds"), Selected American Shares, Inc., Selected Special Shares, Inc. and
Selected Capital Preservation Trust (collectively, the "Selected Funds"). The
Distributor acts as the principal underwriter for the Davis and Selected
Funds.

The Fund pays the Adviser a fee at the annual rate based on average net
assets, as follows: 0.75% on the first $250 million; 0.65% on the next $250
million; 0.55% on the next $2.5 billion; 0.54% on the next $1 billion; 0.53%
on the next $1 billion; 0.52% on the next $1 billion; 0.51% the next $1
billion; and 0.50% of average net assets in excess of $7 billion. This fee is
higher than that of most other mutual funds but is not necessarily higher than
that paid by funds with a similar objective. The Fund also reimburses the
Adviser for its costs of providing certain accounting and financial reporting,
shareholder services and compliance with state securities laws. Under the
Sub-Advisory Agreement with DSA-NY, the Adviser pays all of DSA-NY's direct
and indirect costs of operation. All the fees paid to DSA-NY are paid by the
Adviser and not the Fund.

9
<PAGE> 14

Prior to his responsibilities as co-portfolio manager, Christopher C. Davis
worked closely with Shelby M.C. Davis as an assistant portfolio manager and
research analyst beginning in September, 1989.

Shelby M.C. Davis is Chief Investment Officer of the Adviser. As Chief
Investment Officer, he is active in providing investment themes, strategies
and individual stock selections to the Fund. He was the Fund's primary
portfolio manager from its inception in 1969 until February 19, 1997. He is a
an officer of all investment companies managed by the Adviser and was the
portfolio manager of a growth and income fund managed by the Adviser from May
1, 1993 until February 19, 1997. He has been a director of the Adviser's
general partner since 1969.

The Distributor is reimbursed by the Fund for some of its distribution
expenses through Distribution Plans which have been adopted with respect to
the Class A, Class B and Class C shares and approved by the Fund's Board of
Directors in accordance with Rule 12b-1 under the Investment Company Act of
1940. See "Distribution Plans" below for more details.

DISTRIBUTION PLANS

The Fund bears some of the costs of selling its shares under
Distribution Plans adopted with respect to its Class A, Class B and Class C
shares pursuant to Rule 12b-1 under the Investment Company Act of 1940. This
rule regulates the manner in which a mutual fund may assume costs of
distributing and promoting the sale of its shares.

Payments under the Class A Distribution Plan are limited to an annual
rate of 0.25% of the average daily net asset value of the Class A shares.
Such payments are made to reimburse the Distributor for the fees it pays to
its salespersons and other firms for selling Fund shares, servicing
shareholders and maintaining shareholder accounts. Where a commission is paid
for purchases of $1 million or more of Class A shares and as long as the
limits of the Distribution Plan have not been reached, such payment is also
made from 12b-1 distribution fees received from the Fund. Normally, such fees
are at the annual rate of 0.25% of the average net asset value of the accounts
serviced and maintained on the books of the Fund. Payments under the Class A
Distribution Plan may also be used to reimburse the Distributor for other
distribution costs (excluding overhead) not covered in any year by any portion
of the sales charges the Distributor retains. See "Purchase of Shares."

Payments under the Class B Distribution Plan are limited to an annual
rate of 1% of the average daily net asset value of the Class B shares. In
accordance with current applicable rules, such payments are also limited to
6.25% of gross sales of Class B shares plus interest at 1% over the prime rate
on any unpaid amounts. Up to 0.75% of the average daily net assets is used to
pay the Distributor a 4% commission on new sales of Class B Shares. Most or
all of such commissions are reallowed to salespersons and to firms responsible
for such sales. No commissions are paid by the Fund with respect to sales by
the Distributor to officers, directors and full-time employees of the Fund,
the Distributor or the Adviser's General Partner. Up to 0.25% of average net
assets is used to reimburse the Distributor for the payment of service and
maintenance fees to its salespersons and other firms for shareholder servicing
and maintenance of shareholder accounts.

10
<PAGE> 15

If, due to the foregoing payment limitations, the Fund is unable to pay
the Distributor the 4% commission on new sales of Class B shares, the
Distributor intends, but is not obligated, to accept new orders for shares and
pay commissions in excess of the payments it receives from the Fund. The
Distributor intends to seek full payment from the Fund of any excess amounts
with interest at 1% over the prime rate at such future date when and to the
extent such payments on new sales would not be in excess of the limitations.
The Fund is not obligated to make such payments; the amount (if any), timing
and condition of any such payments are solely within the discretion of the
directors of the Fund who are not interested persons of the Distributor or the
Fund and have no direct or indirect financial interest in the Class B
Distribution Plan (the "Independent Directors"). If the Class B Distribution
Plan is terminated, the Distributor will ask the Independent Directors to take
whatever action they deem appropriate with regard to the payment of any excess
amounts. As of March 31, 1997, the Distributor paid $17,403,490 in
commissions for which the Distributor had not yet received reimbursement.

Payments under the Class C Distribution Plan are also limited to an
annual rate of 1% of the average daily net asset value of the Class C shares,
and are subject to the same 6.25% and 1% limitations applicable to the Class B
Distribution Plan. The entire amount of payments may be used to reimburse the
Distributor for the payments of an initial commission and service and
maintenance fees to its salespersons and other firms for selling new Class C
shares, shareholder servicing and maintenance of shareholder accounts.

In addition, to the extent that any investment advisory fees paid by the
Fund may be deemed to be indirectly financing any activity which is primarily
intended to result in the sale of Fund shares within the meaning of Rule
12b-1, the Plans authorize the payment of such fees.

Each of the Distribution Plans may be terminated at any time by vote of
the Independent Directors or by vote of the respective class. Payments
pursuant to a Distribution Plan are included in the operating expenses of the
class.

As described above, dealers or others will receive different levels of
compensation depending on which class of shares they sell. The Distributor may
make expense reimbursements for special training of a dealer's registered
representatives, advertising or equipment, or to defray the expenses of dealer
meetings. Any such amounts may be paid by the Distributor from the fees it
receives under the Class A, Class B and Class C Distribution Plans.

In addition, the Distributor may, from time to time, pay additional cash
compensation or other promotional incentives to authorized dealers or agents
that sell shares of the Fund. In some instances, such cash compensation or
other incentives may be offered only to certain dealers or agents who employ
registered representatives who have sold or may sell significant amounts of
shares of the Fund and/or the other Davis Funds managed by the Adviser during
a specified period of time.

Shares of the Fund may also be sold through banks or bank-affiliated
dealers. Any determination that such banks or bank-affiliated dealers are
prohibited from selling shares of the Fund under the Glass-Steagall Act would
have no material adverse effects on the Fund. State securities laws may
require such firms to be licensed as securities dealers in order to sell
shares of the Fund.

11
<PAGE> 16

PURCHASE OF SHARES

GENERAL. You can purchase Class A, Class B or Class C shares of the
Fund from any dealer or other person having a sales agreement with the
Distributor.

There are three ways to make an initial investment in the Fund. One way
is to fill out the Application Form included in this Prospectus and mail it to
State Street Bank and Trust Company ("State Street") at the address on the
Form. The dealer must also sign the Form. Your dealer or sales
representative will help you fill out the Form. All purchases made by check
should be in U.S. dollars (minimum $1,000, except $250 for retirement plans)
and made payable to THE DAVIS FUNDS, or in the case of a retirement
account, the custodian or trustee. THIRD PARTY CHECKS WILL NOT BE
ACCEPTED. When purchases are made by check, redemptions will not be allowed
until the investment being redeemed has been in the account for 15 calendar
days.

Another way to make an initial investment is to have your dealer order
and pay for the shares. In this case, you must pay your dealer. The dealer
can order the shares from the Distributor by telephone or wire. You can also
use this method for additional investments of at least $1,000.

The third way to purchase shares is by wire. Shares may be purchased at
any time by wiring federal funds directly to State Street. Prior to an
initial investment by wire, the shareholder should telephone Davis
Distributors, LLC at 1-800-279-0279 to advise them of the investment and class
of shares and to obtain an account number and instructions. A completed Plan
Adoption Agreement or Application Form should be mailed to State Street after
the initial wire purchase. To assure proper credit, the wire instructions
should be made as follows:

State Street Bank and Trust Company,
Boston, MA 02210
Attn.: Mutual Fund Services
DAVIS NEW YORK VENTURE FUND, INC.
Shareholder Name,
Shareholder Account Number,
Federal Routing Number 011000028,
DDA Number 9904-606-2

After your initial investment, you can make additional investments of at
least $25. Simply mail a check payable to "The Davis Funds" to State Street
Bank and Trust Company, c/o The Davis Funds, P.O. Box 8406, Boston, MA
02266-8406. The check should be accompanied by a form which State Street will
provide after each purchase. If you do not have a form, you should tell State
Street that you want to invest the check in shares of the Fund. If you know
your account number, you should also give it to State Street.

The Fund does not issue certificates for Class A shares unless you
request a certificate each time you make a purchase. Certificates are not
issued for Class B or Class C shares or for accounts using the Automatic
Withdrawal Plan. Instead, shares purchased are automatically credited to an
account maintained for you on the books of the Fund by State Street. Each
time you add to or withdraw from your account, you will receive a statement
showing the details of the transaction and any other transactions you had
during the current year.

12
<PAGE> 17

ALTERNATIVE PURCHASE ARRANGEMENTS. The Fund offers four classes
of shares. With certain exceptions described below, Class A shares are sold
with a front-end sales charge at the time of purchase and are not subject to a
sales charge when they are redeemed. Class B shares are sold without a sales
charge at the time of purchase, but are subject to a deferred sales charge if
they are redeemed within six years after purchase. Class B shares will
automatically convert to Class A shares eight years after the end of the
calendar month in which the shareholder's order to purchase was accepted.
Class C shares are purchased at their net asset value per share without the
imposition of a front-end sales charge but are subject to a 1% deferred sales
charge if redeemed within one year after purchase and do not have a conversion
feature. Class Y shares are offered through a separate prospectus to (i) trust
companies, bank trusts, pension plans, endowments or foundations acting on
behalf of their own account or one or more clients for which such institution
acts in a fiduciary capacity and investing at least $5,000,000 at any one time
("Institutions"); (ii) any state, county, city, department, authority or
similar agency which invests at least $5,000,000 at any one time
("Governmental Entities"); and (iii) any investor with an account established
under a "wrap account" or other similar fee-based program sponsored and
maintained by a registered broker-dealer approved by the Distributor ("Wrap
Program Investors"). Class Y shares are sold at net asset value without the
imposition of Rule 12b-1 charges. For more information about the Class Y
shares, call the Fund at 1-800-279-0279.

Depending on the amount of the purchase and the anticipated length of
time of investment, investors may choose to purchase one class of shares
rather than another. Investors who would rather pay the entire cost of
distribution at the time of investment, rather than spreading such cost over
time, might consider Class A shares. Other investors might consider Class B
or Class C shares, in which case 100% of the purchase price is invested
immediately. The Fund will not accept any purchase of Class B shares in the
amount of $250,000 or more per investor. Such purchase must be made in Class
A shares. Class C shares may be more appropriate for the short-term investor.
The Fund will not accept any purchase of Class C shares when Class A shares
may be purchased at net asset value. See also "Distribution Plans" for more
information.

Wrap Program Investors should be aware that both Class A and Class Y
shares are made available by the Fund at net asset value to sponsors of wrap
programs. However, Class A shares are subject to additional expenses under
the Fund's Rule 12b-1 Plan and sponsors of wrap programs utilizing Class A
shares are generally entitled to payments under the Plan. If the sponsor has
selected Class A shares, investors should discuss these charges with their
program's sponsor and weigh the benefits of any services to be provided by the
sponsor against the higher expenses paid by Class A shareholders.

13
<PAGE> 18

CLASS A SHARES. Class A shares are sold at their net asset value
plus a sales charge. The amounts of the sales charges are shown in the
following table.

<TABLE>
<CAPTION>
Customary
Sales Charge Charge as Concession to Your
as Percentage Approximate Percentage Dealer as Percentage
Amount of Purchase of Offering Price of Amount Invested of Offering Price
- ------------------ ----------------- ---------------------- --------------------
<S> <C> <C> <C>
$99,999 or less 4-3/4% 5.0% 4%
$100,000 to $249,999 3-1/2% 3.6% 3%
$250,000 to $499,999 2-1/2% 2.6% 2%
$500,000 to $749,999 2% 2.0% 1-3/4%
$750,000 to $999,999 1% 1.0% 3/4 of 1%
$1,000,000 or more 0% 0.0% 0%<F*>

<FN>
<F*> On purchases of $1 million or more, the investor pays no front-end sales
charge but a contingent deferred sales charge of 0.75% may be imposed if
shares purchased after December 1, 1996 are redeemed within the first year
after purchase. The Distributor may pay the financial service firm a
commission during the first year after such purchase at an annual rate as
follows:

<CAPTION>
Purchase Amount Commission
--------------- ----------
<S> <C>
First $3,000,000 .75%
Next $2,000,000 .50%
Over $5,000,000 .25%
</TABLE>

Where a commission is paid for purchases of $1 million or more, such payment
will be made from 12b-1 distribution fees received from the Fund and, in cases
where the limits of the distribution plan in any year have been reached, from
the Distributor's own resources.

There are a number of ways to reduce the sales charge on the purchase of

Class A shares, as set forth below.

(i) Family Purchases: Purchases made by an individual, such
individual's spouse and children under 21 are combined and treated as a
purchase of a single person.

(ii) Group Purchases: The purchases of an organized group, whether or
not incorporated, are combined and treated as the purchase of a single person.
The organization must have been organized for a purpose other than to purchase
shares of mutual funds.

(iii) Purchases for Employee Benefit Plans: Trusteed or other
fiduciary accounts and Individual Retirement Accounts ("IRA") of a single
employer are treated as purchases of a single person. Purchases of and
ownership by an individual and such individual's spouse under an IRA are
combined with their other purchases and ownership.

(iv) Purchases under a Statement of Intention: By executing the
"Statement of Intention" included in the Application Form at the back of the
Prospectus, purchases of Class A shares of $100,000 or more made over a
13-month period may be made at the applicable price for the aggregate shares
actually purchased during the period. Please see "Terms and Conditions" at
the back of this prospectus.

(v) Rights of Accumulation: If you notify your dealer or the
Distributor, you may include the Class A shares you already own (valued at
maximum offering price) in calculating the price applicable to your current
purchase.

14
<PAGE> 19

(vi) Combined Purchases with other Davis Funds: Purchases of Class A
shares of the Fund may be combined with your purchases of Class A shares of
other Davis Funds, including Davis High Income Fund, Inc., Davis Tax-Free High
Income Fund, Inc., Davis International Series, Inc. and all funds offered by
Davis Series, Inc. (other than Davis Government Money Market Fund), separately
or under combined Statements of Intention or rights of accumulation to
determine the price applicable to your purchases of Class A shares of the
Fund.

(vii) Sales at Net Asset Value: The sales charge will not apply to:
(1) Class A shares purchased through the automatic reinvestment of dividends
and distributions (see "Dividends and Distributions"); (2) Class A shares
purchased by directors, officers and employees of any fund for which the
Adviser acts as investment adviser or officers and employees of the Adviser,
Sub-Adviser or Distributor including former directors and officers and any
spouse, child, parent, grandparent, brother or sister ("immediate family
members") of all of the foregoing, and any employee benefit or payroll
deduction plan established by or for such persons; (3) Class A shares
purchased by any registered representatives, principals and employees (and any
immediate family member) of securities dealers having a sales agreement with
the Distributor; (4) initial purchases of Class A shares totaling at least
$250,000 but less than $5,000,000, made at any one time by banks, trust
companies and other financial institutions on behalf of one or more clients
for which such institution acts in a fiduciary capacity; (5) Class A shares
purchased by any single account covering a minimum of 250 participants (this
250 participant minimum may be waived for certain fee based mutual fund
marketplace programs) and representing a defined benefit plan, defined
contribution plan, cash or deferred plan qualified under 401(a) or 401(k) of
the Internal Revenue Code or a plan established under section 403(b), 457 or
501(c)(9) of such Code or "rabbi trusts"; (6) Class A shares purchased by
persons participating in a "wrap account" or similar fee-based program
sponsored and maintained by a registered broker-dealer approved by the Fund's
Distributor or by investment advisors or financial planners who place trades
for their own accounts or the accounts of their clients and who charge a
management, consulting or other fee for their services; and clients of such
investment advisors or financial planners who place trades for their own
accounts if the accounts are linked to the master account of such investment
advisor or financial planner on the books and records of the broker or agent;
and (7) Class A shares amounting to less than $5,000,000 purchased by any
state, county, city, department, authority or similar agency. Investors may
be charged a fee if they effect purchases in fund shares through a broker or
agent. The Fund may also issue Class A shares at net asset value incident to
a merger with or acquisition of assets of an investment company.

CLASS B SHARES. Class B shares are offered at net asset value,
without a front-end sales charge. With certain exceptions described below,
the Fund imposes a deferred sales charge of 4% on shares redeemed during the
first year after purchase, 3% on shares redeemed during the second or third
year after purchase, 2% on shares redeemed during the fourth or fifth year
after purchase and 1% on shares redeemed during the sixth year after purchase.
However, on Class B shares of the Fund which are acquired upon exchange from
Class B shares of other Davis Funds which were purchased prior to December 1,
1994, the Fund will impose a deferred sales charge of 4% on shares redeemed
during the first calendar year after purchase; 3% on shares redeemed during
the second calendar year after purchase; 2% on shares redeemed during the
third calendar year after purchase; and 1% on shares redeemed during the
fourth calendar year after purchase, and no deferred sales charge is imposed
on amounts redeemed after four calendar years from purchase. Class B shares
will be subject to a maximum Rule 12b-1 fee at the annual rate of 1% of the
class' average daily net asset value. The Fund will not accept any purchase
of Class B shares in the amount of $250,000 or more per investor.

15
<PAGE> 20

Class B shares that have been outstanding for eight years will
automatically convert to Class A shares without imposition of a front-end
sales charge. The Class B shares so converted will no longer be subject to
the higher expenses borne by Class B shares. Because the net asset value per
share of the Class A shares may be higher or lower than that of the Class B
shares at the time of conversion, although the dollar value will be the same,
a shareholder may receive more or less Class A shares than the number of Class
B shares converted. Under the Funds' private Internal Revenue Service Ruling,
such a conversion will not constitute a taxable event under the federal income
tax law. In the event that this ceases to be the case, the Board of Directors
will consider what action, if any, is appropriate and in the best interests of
the Class B shareholders. In addition certain Class B shares held by certain
defined contribution plans automatically convert to Class A shares based on
increases of plan assets as described in the Statement of Additional
Information.

CLASS C SHARES. Class C shares are offered at net asset value
without a sales charge at the time of purchase. Class C shares redeemed
within one year of purchase will be subject to a 1% charge upon redemption.
Class C shares do not have a conversion feature. The Fund will not accept any
purchases of Class C shares when Class A shares may be purchased at net asset
value.

The Distributor will pay a commission to the firm responsible for the sale
of Class C shares. No other fees will be paid by the Distributor during the
one-year period following purchase. The Distributor will be reimbursed for
the commission paid from 12b-1 fees paid by the Fund during the one-year
period. If Class C shares are redeemed within the one-year period after
purchase, the 1% redemption charge will be paid to the Distributor. After
Class C shares have been outstanding for more than one year, the Distributor
will make quarterly payments to the firm responsible for the sale of the
shares in amounts equal to 0.75% of the annual average daily net asset value
of such shares for sales fees and 0.25% of the annual average daily net asset
value of such shares for service and maintenance fees.

CONTINGENT DEFERRED SALES CHARGES. Any contingent deferred sales charge
imposed upon the redemption of Class A, Class B or Class C shares is a
percentage of the lesser of (i) the net asset value of the shares redeemed or
(ii) the original cost of such shares. No contingent deferred sales charge is
imposed when you redeem amounts derived from (a) increases in the value of
shares redeemed above the net cost of such shares or (b) certain shares with
respect to which the Fund did not pay a commission on issuance, including
shares acquired through reinvestment of dividend income and capital gains
distributions. Upon request for redemption, shares not subject to the
contingent deferred sales charge will be redeemed first. Thereafter, shares
held the longest will be the first to be redeemed.

The contingent deferred sales charge (CDSC) on Class A, B, and C Shares
that are subject to a CDSC will be waived if the redemption relates to the
following: (a) in the event of the total disability (as evidenced by a
determination by the federal Social Security Administration) of the shareholder
(including registered joint owner) occurring after the purchase of the shares
being redeemed; (b) in the event of the death of the shareholder (including a
registered joint owner); (c) for redemptions made pursuant to an automatic
withdrawal plan in an amount, on an annual basis, up to 12% of the value of
the account at the time the shareholder elects to participate in the automatic
withdrawal plan; (d) for redemptions from a qualified retirement plan or IRA
that constitute a tax-free return of contributions to avoid tax penalty; (e) on
redemptions of shares sold to directors, officers and employees of any fund for
which the Adviser acts as investment adviser or officers and employees of the
Adviser, Sub-Advisers or Distributor including former directors and officers
and immediate family members of all of the foregoing, and any employee benefit
or payroll deduction plan established by or for such persons; (f) on
redemptions pursuant to the right of the Fund to liquidate a shareholder's
account if the aggregate net asset value of the shares held in such account
falls below an established minimum amount; (g) certain other exceptions related
to defined contribution plans as described in the Statement of Additional
Information.

PROTOTYPE RETIREMENT PLANS. The Distributor and certain qualified
dealers have available prototype retirement plans (e.g. 401(k), profit
sharing, money purchase, Simplified Employee Pension ("SEP") plans, model

16
<PAGE> 21

403(b) and 457 plans for charitable, educational and governmental entities)
sponsored by the Funds for corporations and self-employed individuals and
prototype Individual Retirement Account ("IRA") plans and SIMPLE IRA plans for
both individuals and employers. These plans utilize the shares of the Fund
and other Davis Funds as their investment vehicle. State Street acts as
custodian or trustee for the plans and charges the participant $10 to
establish each account and an annual maintenance fee of $10 per account (up to
a maximum of $20 per social security number). Such fees will be redeemed
automatically at year end from your account, unless you elect to pay the fee
directly.

AUTOMATIC INVESTMENT PLAN. Shareholders may arrange for automatic
monthly investing whereby State Street will be authorized to initiate a debit
to the shareholder's bank account of a specific amount (minimum $25) each
month which will be used to purchase Fund shares. For institutions that are
members of the Automated Clearing House system (ACH), such purchases can be
processed electronically on any day of the month between the 3rd and 28th day
of each month. After each automatic investment, the shareholder will receive
a transaction confirmation and the debit should be reflected on the
shareholder's next bank statement. The plan may be terminated at any time by
the shareholder. If you desire to utilize this plan, you may use the
appropriate designation on the Application Form.

DIVIDEND DIVERSIFICATION PROGRAM. You may also establish a
dividend diversification program which allows you to have all dividends and
any other distributions automatically invested in shares of one or more of the
Davis Funds, subject to state securities law requirements and the minimum
investment requirements set forth below. You must receive a current prospectus
for the other fund or funds prior to investment. Shares will be purchased at
the chosen fund's net asset value on the dividend payment date. A dividend
diversification account must be in the same registration as the distributing
fund account and must be of the same class of shares. All accounts
established or utilized under this program must have a minimum initial value
of at least $250 and all subsequent investments must be at least $25. This
program can be amended or terminated at any time, upon at least 60 days'
notice. If you would like to participate in this program, you may use the
appropriate designation on the Application Form.

TELEPHONE PRIVILEGE

Unless you have provided in your application that the telephone
privilege is not to be available, the telephone privilege is automatically
available under certain circumstances for exchanging shares and for redeeming
shares. BY EXERCISING THE TELEPHONE PRIVILEGE TO SELL OR EXCHANGE SHARES, YOU
AGREE THAT THE FUND SHALL NOT BE LIABLE FOR FOLLOWING TELEPHONE INSTRUCTIONS
REASONABLY BELIEVED TO BE GENUINE. Reasonable procedures will be employed to
confirm that such instructions are genuine and if not employed, the Fund may be
liable for unauthorized instructions. Such procedures will include a request
for personal identification (account or social security number) and tape
recording of the instructions. You should be aware that during unusual market
conditions we may have difficulty in accepting telephone requests, in which
case you should contact us by mail. See "Exchange of Shares - By Telephone",
"Redemption of Shares - By Telephone" and "Redemption of Shares - Expedited
Redemption Privilege".

EXCHANGE OF SHARES

GENERAL. The exchange privilege is a convenient way to buy shares in
other Davis Funds in order to respond to changes in your goals or in market
conditions. If such goals or market conditions change, the Davis Funds offer
a variety of investment objectives that includes common stock funds,
tax-exempt and corporate bond funds, and a money market fund. However, the
Fund is intended as a long-term investment and is not intended for short-term
trades. Shares of a particular class of the Fund may be exchanged only for
shares of the same class of another Davis Fund except that Class A
shareholders who are eligible to purchase Class Y shares may exchange their
shares for Class Y shares of the Fund. All of the Davis Funds offer Class A,
Class B and Class C shares. The shares to be received upon exchange must be
legally available for sale in your state. The net asset value of the initial
shares being acquired must be at least $1,000 unless such exchange is under the
Automatic Exchange Program described below.

17
<PAGE> 22

CDSC, such shares will be exchanged at relative net asset value, but the escrow
or segregated account will continue with respect to the shares acquired in the
exchange. In addition, the terms of any CDSC, or redemption fee, to which any
Class B or Class C shares are subject at the time of exchange will continue to
apply to any shares acquired upon exchange.

Before you decide to make an exchange, you must obtain the current
prospectus of the desired fund. Call your broker or the Distributor for
information and a prospectus for any of the other Davis Funds registered in
your state. Read the prospectus carefully. If you decide to exchange your
shares, send State Street a written unconditional request for the exchange and
follow the instructions regarding delivery of share certificates contained in
the section on "Redemption of Shares". A signature guarantee is not required
for such an exchange. However, if shares are also redeemed for cash in
connection with the exchange transaction, a signature guarantee may be
required. See "Redemption of Shares". Your dealer may charge an additional
fee for handling an exercise of the exchange privilege.

AUTOMATIC EXCHANGE PROGRAM. The Fund also offers an automatic
monthly exchange program. All accounts established or utilized under this
program must have the same registration and a minimum initial value of at
least $250. All subsequent exchanges must have a value of at least $25. Each
month, shares will be simultaneously redeemed and purchased at the chosen
Davis Fund's applicable offering price. If you would like to participate in
this program, you may use the appropriate designation on the Application Form.

An exchange involves both a redemption and a purchase, and normally both
are done on the same day. However, in certain instances such as where a large
redemption is involved, the investment of redemption proceeds into shares of
other Davis Funds may take up to seven days. For federal income tax purposes,
exchanges between funds are treated as a sale and purchase. Therefore, there
will usually be a recognizable capital gain or loss due to an exchange. An
exchange between different classes of the same fund is not a taxable event.

The number of times a shareholder may exchange shares among the Davis
Funds within a specified period of time may be limited at the discretion of
the Distributor. Currently, more than four exchanges out of a fund during a
twelve month period are not permitted without the prior written approval of
the Distributor. The Fund reserves the right to terminate or amend the
exchange privilege at any time upon 60 or more days' notice.

BY TELEPHONE. You may exchange shares by telephone into accounts
with identical registrations. Please see the discussion of procedures in
respect to telephone instructions in the section entitled "Telephone
Privilege," as such procedures are also applicable to exchanges.

REDEMPTION OF SHARES

GENERAL. You can redeem, or sell back to the Fund, all or part of
your shares at any time at net asset value less any applicable sales charges
or redemption fees. You can do this by sending a written request to State
Street Bank and Trust Company, c/o The Davis Funds, P.O. Box 8406, Boston, MA
02266-8406, indicating how many of your shares or what dollar amount you want
to redeem. If more than one person owns the shares to be redeemed, all owners
must sign the request. The signatures on the request must correspond to the
account from which the shares are being redeemed.

18
<PAGE> 23

Sometimes State Street needs more documents to verify authority to make
a redemption. This usually happens when the owner is a corporation,
partnership or fiduciary (such as a trustee or the executor of an estate) or
if the person making the request is not the registered owner of the shares.

If shares to be redeemed are represented by a certificate, the
certificate, signed by the owner or owners, must be sent to State Street with
the request.

For the protection of all shareholders, the Fund also requires that
signatures appearing on a share certificate, stock power or redemption request
where the proceeds would be more than $50,000, must be guaranteed by a bank,
credit union, savings association, securities exchange, broker, dealer or
other guarantor institution. A signature guarantee is also required in the
event that any modification to the Fund's application is made after the
account is established, including the selection of the Expedited Redemption
Privilege. In some situations such as where corporations, trusts or estates
are involved, additional documents may be necessary to effect the redemption.
The transfer agent may reject a request from any of the foregoing eligible
guarantors, if such guarantor does not satisfy the transfer agent's written
standards or procedures or if such guarantor is not a member or participant of
a signature guarantee program. This provision also applies to exchanges when
there is also a redemption for cash. A signature guarantee on redemption
requests where the proceeds would be $50,000 or less is not required, provided
that such proceeds are being sent to the address of record and, in order to
ensure authenticity of an address change, such address of record has not been
changed within the last 30 days. All notifications of address changes must be
in writing.

Redemption proceeds are normally paid to you within seven days after
State Street receives your proper redemption request. Payment for redemptions
can be suspended under certain emergency conditions determined by the
Securities and Exchange Commission or if the New York Stock Exchange is closed
for other than customary or holiday closings. If any of the shares redeemed
were just bought by you, payment to you may be delayed until your purchase
check has cleared (which usually takes up to 15 days from the purchase date).
You can avoid any such redemption delay by paying for your shares with a
certified or cashier's check or by bank wire or federal funds.

Redemptions are ordinarily paid to you in cash. However, the Fund's
Board of Directors is authorized to decide that conditions exist making cash
payments undesirable, although the Board has never reached such a decision.
If the Board should decide to make payment in other than cash, redemptions
could be paid in securities, valued at the value used in computing the Fund's
net asset value. There would be brokerage costs incurred by the shareholder in
selling such redemption proceeds. We must, however, redeem shares solely in
cash up to the lesser of $250,000 or 1% of the Fund's net asset value,
whichever is smaller, during any 90-day period for any one shareholder.

Your shares may also be redeemed through participating brokers or
dealers. The Distributor may repurchase shares from your dealer, if your
dealer is a member of the Distributor's selling group. Your dealer may, but
is not required to, use this method in selling back your shares and may place
any repurchase request by telephone or wire. Any broker dealer may charge you
a service fee or commission. No charge is payable if you redeem your own
shares through State Street rather than having a dealer arrange for a
repurchase.

19
<PAGE> 24

EXPEDITED REDEMPTION PRIVILEGE. Investors with accounts other
than prototype retirement plans and IRAs may designate on the Expedited
Redemption Privilege Form (included in this prospectus), an account with any
commercial bank and have the cash proceeds from the redemption sent, by either
wire or electronically through the Automated Clearing House system ("ACH"), to
a pre-designated bank account. State Street will accept instructions to
redeem shares and make payment to a pre-designated commercial bank account by
(a) written request signed by the registered shareholder, (b) telephone
request by any Qualified Dealer to Davis Distributors, LLC (1-800-279-0279),
and (c) by facsimile request by the shareholder to State Street. At the time
of redemption, the shareholder must request that federal funds be wired or
transferred by ACH to the bank account designated on the application. The
redemption proceeds under this procedure may not be directed to a savings
bank, savings and loan or credit union account except by arrangement with its
correspondent bank or unless such institution is a member of the Federal
Reserve System. The Distributor, in its discretion, may limit the amount that
may be redeemed by a shareholder in any day under the Expedited Redemption
Privilege to $25,000. There is a $5 charge by State Street for wire service,
and receiving banks may also charge for this service. Payment by ACH will
usually arrive at your bank two banking days after your call. Payment by wire
is usually credited to your bank account on the next business day after your
call. The Expedited Redemption Privilege may be terminated, modified or
suspended by the Fund at any time. See "Telephone Privilege".

The name of the registered shareholder and corresponding Fund account
number must be supplied. The Expedited Redemption Privilege Form provides for
the appropriate information concerning the commercial bank and account number.
Changes in ownership, account number (including the identity of your bank) or
authorized signatories of the pre-designated account may be made by written
notice to State Street with your signature, and those of new owners or signers
on the account, guaranteed by a commercial bank or trust company. Additional
documentation may be required to change the designated account when shares are
held by a corporation, partnership, executor, administrator, trustee or
guardian.

BY TELEPHONE. You can redeem shares by telephone and receive a check
by mail, but please keep in mind:

The check can only be issued for up to $25,000;
The check can only be issued to the registered owner (who must be an
individual);
The check can only be sent to the address of record; and
Your current address of record must have been on file for 30 days.

AUTOMATIC WITHDRAWALS PLAN. Under the Automatic Withdrawals Plan,
you can indicate to State Street how many dollars you would like to receive
each month or each quarter. Your account must have a value of at least
$10,000 to start a plan. Shares are redeemed so that you will receive the
payment you have requested approximately on the 25th day of the month.
Withdrawals involve redemption of shares and may produce gain or loss for
income tax purposes. Shares of the Fund initially acquired by exchange from
any of the other Davis Funds, will remain subject to an escrow or segregated
account to which any of the exchanged shares were subject. If you utilize
this program using Class B or Class C shares, any applicable contingent
deferred sales charges will be imposed on such shares redeemed. Purchase of
additional shares concurrent with withdrawals may be disadvantageous to you
because of tax and sales load consequences. If the amount you withdraw
exceeds the dividends on your shares, your account will suffer depletion.
Your Automatic Withdrawals Plan may be terminated by you at any time without
charge or penalty. The Fund reserves the right to terminate or modify the
Automatic Withdrawals Plan at any time. Call or write the Fund if you want
further information on the Automatic Withdrawals Plan.

INVOLUNTARY REDEMPTIONS. To relieve the Fund of the cost of
maintaining uneconomical accounts, the Fund may effect the redemption of
shares at net asset value in any account if the account, due to shareholder
redemptions, has a value of less than $250. At least 60 days prior to such
involuntary redemption, the Fund will mail a notice to the shareholder so that
an additional purchase may be effected to avoid such redemption.

20
<PAGE> 25

SUBSEQUENT REPURCHASES. After some of or all your shares are
redeemed or repurchased, you may decide to put back all or part of your
proceeds into the same Class of the Fund's shares. Any such shares will be
issued without sales charge at the net asset value next determined after you
have returned the amount of your proceeds. In addition, any CDSC assessed on
Class B or Class C shares will be returned to the account. Class B or Class C
shares will be deemed to have been purchased on the original purchase date for
purposes of calculating the CDSC and conversion period. This can be done by
sending the Fund or the Distributor a letter, together with a check for the
reinstatement amount. The letter must be received, together with the payment,
within 30 days after the redemption or repurchase. You can only use this
privilege once.

DETERMINING THE PRICE OF SHARES

The net asset value per share of each class is determined daily by
dividing the total value of investments and other assets, less any
liabilities, by the total number of outstanding shares of each class.
Valuation of the Fund's portfolio securities is based upon their market value.
Securities traded on a national securities exchange are valued at the last
published sales prices on the exchange, or, in the absence of recorded sales,
at the average of closing bid and asked prices on such exchange.
Over-the-counter securities are valued at the average of closing bid and asked
prices. Assets for which there are no quotations available will be valued at a
fair value as determined by or at the direction of the Board of Directors.
Investments in short-term securities (maturing in sixty days or less) are
valued at amortized cost unless the Board of Directors determines that such
cost is not a fair value.

The net asset value per share is determined as of the earlier of the
close of the exchange or 4:00 p.m. Eastern Time on each day the New York Stock
Exchange is open. The price per share for purchases or redemptions made
directly through State Street normally is such value next computed after State
Street receives the purchase order or redemption request. If the purchase
order or redemption request is placed with your dealer, then the applicable
price is normally computed as of 4:00 p.m. Eastern Time on the day the dealer
receives the order, provided that the dealer receives the order before 4:00
p.m. Eastern Time. Otherwise, the applicable price is the next determined net
asset value. It is the responsibility of your dealer to promptly forward
purchase and redemptions orders to the Distributor. Note that in the case of
redemptions and repurchases of shares owned by corporations, trusts or
estates, or of shares represented by outstanding certificates, State Street
may require additional documents to effect the redemption and the applicable
price will be determined as of the close of the next computation following the
receipt of the required documentation or outstanding certificates. See
"Redemption of Shares."

DIVIDENDS AND DISTRIBUTIONS

There are two sources for the payments made to you by the Fund. The
first is net investment income and the second source is realized capital
gains. You will receive quarterly confirmation statements for dividends
declared and shares purchased through reinvestment of dividends. You will
also receive confirmations after each purchase (other than through dividend
reinvestment) and after each redemption. Because Class B and Class C shares
incur higher distribution services fees and bear certain other expenses, such
shares will have higher expense ratios and will pay correspondingly lower
dividends than Class A shares. For tax purposes, information concerning
distributions will be mailed annually to shareholders.

Shareholders have the option to receive all dividends and distributions
in cash, to have all dividends and distributions reinvested, or to have income
dividends paid in cash and short-term and long-term capital gain distributions
reinvested. Reinvestment of all dividends and distributions is automatic for
accounts utilizing the Automatic Withdrawal Plan. The reinvestment of
dividends and distributions is made at net asset value (without any initial or
contingent deferred sales charge) on the payment date. For the protection of
the shareholder, upon receipt of the second dividend check which has been
returned to the State Street as undeliverable, undelivered dividends will
be invested in additional shares at the current net asset value and the account
designated as a dividend reinvestment account.

21
<PAGE> 26

FEDERAL INCOME TAXES

This section is not intended to be a full discussion of all the aspects
of the federal income tax law and its effects on the Fund and its shareholders.
Shareholders may be subject to state and local taxes on distributions. Each
investor should consult his or her own tax adviser regarding the effect of
federal, state and local taxes on an investment in the Fund.

The Fund intends to continue to qualify as a regulated investment
company under the Internal Revenue Code (the "Code") and, if so qualified,
will not be liable for federal income tax to the extent its earnings are
distributed, except in respect to realization of the "built-in gains" as
described below. If, for any calendar year, the distribution of earnings
required under the Code exceeds the amount distributed, an excise tax, equal
to 4% of the excess, will be imposed on the Fund. The Fund intends to make
distributions during each calendar year sufficient to prevent imposition of
the excise tax.

Distributions of net investment income and net realized short-term
capital gains will be taxable to shareholders as ordinary income.
Distributions of net long-term capital gains (other than the built-in gains as
discussed below) will be taxable to shareholders as long-term capital gain
regardless of how long the shares have been held. Distributions will be
treated the same for tax purposes whether received in cash or in additional
shares. Dividends declared in the last calendar month to shareholders of
record in such month and paid by the end of the following January are treated
as received by the shareholder in the year in which they are declared.

On October 12, 1990, the Fund acquired by merger the investment
portfolio of Mulford Securities Corp., a private investment company which, on
the date of the merger, owned securities with a fair market value in excess of
their cost ("Mulford built-in gains"). For a period of ten years after the
merger, to the extent that the Fund realizes any net Mulford built-in gains in
any year, the Fund will incur a capital gains tax and will distribute to
shareholders only the excess of the amount of the net gains realized over the
amount of the tax. Such distributions will be taxable as ordinary income.
(The Fund will be reimbursed for the tax it pays through an escrow established
for this purpose under the terms of the merger.)

A gain or loss for tax purposes may be realized on the redemption of
shares. If the shareholder realizes a loss on the sale or exchange of any
shares held for six months or less and if the shareholder received a capital
gain distribution during such period, then such loss is treated as a long-term
capital loss to the extent of such capital gain distribution.

FUND SHARES

Shares issued by the Fund are currently divided into four classes, Class
A, Class B, Class C and Class Y shares. The Board of Directors may offer
additional classes in the future and may at any time discontinue the offering
of any class of shares. Each share, when issued and paid for in accordance
with the terms of the offering, is fully paid and non-assessable. Shares have
no preemptive or subscription rights and are freely transferable. Each share
of the Fund represents an interest in the assets of the Fund and has identical
voting, dividend, liquidation and other rights and the same terms and
conditions as any other shares except that (i) each dollar of net asset value
per share is entitled to one vote, (ii) the expenses related to a particular
class, such as those related to the distribution of each class and the
transfer agency expenses of each class are borne solely by each such class and
(iii) each class of shares votes separately with respect to provisions of the
Rule 12b-1 Distribution Plan which pertains to a particular class and other
matters for which separate class voting is appropriate under applicable law.
Each fractional share has the same rights, in proportion, as a full share.
Shares do not have cumulative voting rights; therefore, the holders of more
than 50% of the voting power of the Fund can elect all of the directors of the
Fund. Due to the differing expenses of the classes, dividends of Class B and
Class C shares are likely to be lower than for Class A shares, and are likely
to be higher for Class Y shares than for any other class of shares. For more
information about Class Y shares, call the Fund at 1-800-279-0279 to obtain the
Class Y prospectus.

22
<PAGE> 27

PERFORMANCE DATA

From time to time, the Fund may advertise information regarding its
performance. Such information may consist of "total return" and "average
annual total return" and will be calculated separately for each class. These
performance figures are based upon historical results and are not intended to
indicate future performance.

"Average annual total return" refers to the Fund's average annual
compounded rate of return over a stated period that would equate an initial
amount invested at the beginning of the period to the ending redeemable value
of the investment.

"Total return" refers to the Fund's compounded rate of return over a
stated period that would equate an initial amount invested at the beginning of
the period to the ending redeemable value of the investment. Total return is
not annualized. In the event the Fund advertises its total return or average
annual total return, the stated periods will be one, five and ten years, and may
also include longer or shorter periods, including the life of the Fund. The
computation of total and average annual total return assumes reinvestment of all
dividends and distributions, and deduction of all charges and expenses. In
addition, a table showing the performance of an assumed investment of $10,000
may be used from time to time.

The Fund may also quote average annual total return on net asset value.
Such data will be calculated substantially as described above except that
sales charges will not be deducted.

In reports or other communications to shareholders and in advertising
material, the performance of the Fund may be compared to recognized unmanaged
indices or averages of the performance of similar securities. Also, the
performance of the Fund may be compared to that of other funds of comparable
size and objectives as listed in the rankings prepared by Lipper Analytical
Services, Inc., Morningstar, Inc. or similar independent mutual fund rating
services, and the Fund may use evaluations published by nationally recognized
independent ranking services and publications.

The Fund's 1996 Annual Report contains additional performance
information and will be made available upon request and without charge.

SHAREHOLDER INQUIRIES

Shareholder inquiries should be directed to Davis Distributors, LLC, by
writing to State Street Bank and Trust Company, c/o the Davis Funds, P.O. Box
8406, Boston, MA 02266-8406 or calling (800) 279-0279. Davis Direct Access is
the Davis Funds' automated telephone system that enables shareholders to
perform a number of account transactions automatically by using a touch-tone
phone. Shareholders may obtain Fund and account specific information and make
purchases, exchanges and redemptions.

23
<PAGE> 28

NOTES

24
<PAGE> 29

TERMS AND CONDITIONS FOR A STATEMENT OF INTENTION (CLASS A SHARES ONLY)

TERMS OF ESCROW:

1. Out of my initial purchase (or subsequent purchases if necessary) 5% of
the dollar amount specified in this Statement will be held in escrow by State
Street in the form of shares (computed to the nearest full share at the public
offering price applicable to the initial purchase hereunder) registered in my
name. For example, if the minimum amount specified under this statement is
$100,000 and the public offering price applicable to transactions of $100,000
is $10 a share, 500 shares (with a value of $5,000) would be held in escrow.

2. In the event I should exchange some or all of my shares to those of
another mutual fund for which Davis Distributors, LLC, acts as distributor,
according to the terms of this prospectus, I hereby authorize State Street to
escrow the applicable number of shares of the new fund, until such time as
this Statement is complete.

3. If my total purchases are at least equal to the intended purchases, the
shares in escrow will be delivered to me or to my order.

4. If my total purchases are less than the intended purchases, I will remit
to Davis Distributors, LLC, the difference in the dollar amount of sales
charge actually paid by me and the sales charge which I would have paid if the
total purchase had been made at a single time. If remittance is not made
within 20 days after written request by Davis Distributors, LLC, or my dealer,
State Street will redeem an appropriate number of the escrowed shares in order
to realize such difference.

5. I hereby irrevocably constitute and appoint State Street my attorney to
surrender for redemption any or all escrowed shares with full power of
substitution in the premises.

6. Shares remaining after the redemption referred to in Paragraph No.
4 will be credited to my account.

7. The duties of State Street are only such as are herein provided being
purely ministerial in nature, and it shall incur no liability whatever except
for willful misconduct or gross negligence so long as it has acted in good
faith. It shall be under no responsibility other than faithfully to follow the
instructions herein. It may consult with legal counsel and shall be fully
protected in any action taken in good faith in accordance with advice from
such counsel. It shall not be required to defend any legal proceedings which
may be instituted against it in respect of the subject matter of this
Agreement unless requested to do so and indemnified to its satisfaction
against the cost and expense of such defense.

8. If my total purchases are more than the intended purchases and such
total is sufficient to qualify for an additional quantity discount, a
retroactive price adjustment shall be made for all purchases made under such
Statement to reflect the quantity discount applicable to the aggregate amount
of such purchases during the thirteen-month period.

25
<PAGE> 30

EXPEDITED REDEMPTION PRIVILEGE

[ ] If you wish the Expedited Redemption Privilege please check the box to
the left and complete the following information.

I (we) hereby authorize State Street Bank and Trust Company, Davis Selected
Advisers, L.P., Davis Distributors, LLC, and/or the Davis Funds to act upon
instructions received by telephone or telegraph, believed by them to be
genuine, and to redeem shares in my (our) account in any of the Davis Funds
and to wire the proceeds of such redemption to the predesignated bank listed
below. I (we) hereby agree that neither State Street Bank and Trust Company,
nor Davis Selected Advisers, L.P., nor Davis Distributors, LLC, nor the Davis
Funds nor any of their officers or employees, will be liable for any loss,
liability, cost or expense for acting upon such instructions.

- -------------------------------------- ------------------------------------
Signature of Shareholder Signature of Co-Shareholder

- ------------------------------------- ------------------------------------
Name of Commercial Bank (Title of Account at Bank)

- ------------------------------------ ------------------------------------
(Street) (Account Number at Bank)

- ------------------------------------ ------------------------------------
(City) (State) (Zip) (ABA/Transit Routing Number)

26
<PAGE> 31

NOTES

27
<PAGE> 32

NOTES

<PAGE> 33
PROSPECTUS December 1, 1996

Class Y Shares as revised August 4, 1997

Davis New York Venture Fund, Inc.
124 East Marcy Street
Santa Fe, New Mexico 87501
1-800-279-0279
---------------------------------

Minimum Investment Plans Available
Initial Purchase $5,000,000 Exchange Privilege
Wrap Fee Program Minimum

Investment subject to
Sponsor's Minimums

Davis New York Venture Fund, Inc. (the "Fund") seeks to achieve growth
of capital. It invests primarily in common stocks.

The Fund offers four classes of shares, Class A, B, C and Y, each
having different expense levels and sales charges. This Prospectus provides
information regarding the Class Y shares offered by the Fund. Class Y shares
are offered only to certain qualified purchasers, as described in this
Prospectus. Class A, Class B and Class C shares are offered under a
separate prospectus.

This Prospectus concisely sets forth information about the Class Y
shares of the Fund that prospective investors should know before investing.
It should be read carefully and retained for future reference. A Statement
of Additional Information dated December 1, 1996 as revised August 4, 1997,
has been filed with the Securities and Exchange Commission and is
incorporated herein by reference. A copy of this Statement and other
information about the Fund may be obtained without charge by writing to or
calling the Fund at the above address or telephone number.

-----------------------------

Shares in the Fund are not deposits or obligations of, or guaranteed or
endorsed by, any bank, and are not federally insured by the Federal Deposit
Insurance Corporation, the Federal Reserve Board or any other agency.

<PAGE> 34

SUMMARY

Fund Expenses. The following table is intended to assist you in
understanding the various costs and expenses that an investor in the Class Y
shares of the Fund will bear directly or indirectly. You can refer to the
section "Adviser, Sub-Adviser and Distributor" and "Purchase of Shares" for
more information on transaction and operating expenses of the Fund.

<TABLE>
<CAPTION>
Shareholder Transaction Expenses Class Y
- -------------------------------- -------
<S> <C>
Maximum sales load imposed on purchases None
Maximum sales load imposed on reinvested dividends None
Deferred sales load (a declining percentage of the
lesser of the net asset value of the shares
redeemed or the total cost of such shares)
Redeemed during first year None
Redeemed during second or third year None
Redeemed during fourth or fifth year None
Redeemed during sixth year None
Redeemed after sixth year None
Exchange Fee None

Annual Fund operating expenses (as a percentage of average net assets)
- ----------------------------------------------------------------------
<S> <C>
Management fees 0.57%
12b-1 fees 0.00%
Other expenses 0.06%
Total Fund operating expenses 0.63%
</TABLE>

Example:

You would pay the following expenses on a $1,000 investment, assuming a
5% annual return and redemption at the end of each time period:

<TABLE>
<CAPTION>
1 year 3 years 5 years 10 years
------ ------- ------- --------
<S> <C> <C> <C> <C>
Class Y $6 $20 $35 $79
</TABLE>

The 5% rate used in the example is only for illustration and is not
intended to be indicative of the future performance of the Fund, which may be
more or less than the assumed rate. Future expenses may be more or less than
those shown.

The Fund. Davis New York Venture Fund, Inc. is an open-end,
diversified management investment company incorporated in Maryland in 1968
and registered under the Investment Company Act of 1940.

The Fund offers four classes of shares. Class A, B and C shares are
sold through a separate Prospectus. Class Y shares are offered through this
Prospectus to (i) trust companies, bank trusts, endowments, pension plans or
foundations acting on behalf of their own account or one or more clients for
which such institution acts in a fiduciary capacity and investing at least
$5,000,000 at any one time ("Institutions"); (ii) any state, county, city,
department, authority or similar agency which invests at least $5,000,000
("Government Entities"); and (iii) any investor with an account established
under a "wrap account" or other fee based program, sponsored and maintained
by a registered broker-dealer approved by the Distributor ("Wrap Program
Investors").

<PAGE> 35

Investment Objective. The Fund's investment objective is growth of
capital. The Fund invests primarily in common stocks. These securities are
subject to the risk of price fluctuations reflecting both market evaluations
of the businesses involved and general changes in the equity markets. The
Fund may invest in foreign securities and attempt to reduce currency
fluctuation risks by engaging in related hedging transactions. These
transactions involve special risk factors. There is no assurance that the
investment objective of the Fund will be achieved. See "Investment Objective
and Policies".

Investment Adviser, Sub-Adviser and Distributor. Davis Selected
Advisers, L.P., (the "Adviser") is the investment adviser for the Fund.
Davis Distributors, LLC (the "Distributor"), a subsidiary of the Adviser,
serves as the principal underwriter for the Fund. Davis Selected
Advisers-NY, Inc., a wholly-owned subsidiary of the Adviser, performs certain
research and portfolio management services for the Fund under a Sub-Advisory
Agreement with the Adviser. See "Adviser, Sub-Adviser and Distributor".

Purchases, Exchanges and Redemptions. Class Y shares are sold at net
asset value without a sales charge. The initial minimum investment for
Institutions and Government Entities is $5,000,000. The initial minimum
investment for Wrap Program Investors is set by the sponsor of the program.
Shares may be exchanged under certain circumstances at net asset value for
the same class of shares of certain other funds managed by the Adviser. See
"Purchase of Shares," "Exchange of Shares" and "Redemption of Shares".

Class A shareholders who are eligible to purchase Class Y shares may
exchange their shares for Class Y shares of the Fund.

Shareholder Services. Questions regarding the Fund or your account may
be directed to Davis Distributor, LLC at 1-800-279-0279 or to your sales
representative. Written inquiries may be directed to State Street Bank and
Trust Co., c/o The Davis Funds, P.O. Box 8406, Boston, MA 02266-8406. During
severe market conditions, the Distributor may experience difficulty in
accepting telephone redemptions or exchanges. If you are unable to contact
the Distributor at the above telephone number, you should call 1-505-820-3000
Monday through Friday between 8:00 a.m. and 4:00 p.m. Mountain Time.

<PAGE> 36

FINANCIAL HIGHLIGHTS

The following financial highlights are derived from the financial
statements of the Fund and have been audited by Tait, Weller and Baker,
independent auditors. The table expresses the information in terms of a
single Class A share for the respective periods presented and is
supplementary information to the Fund's financial statements which are
included in the 1996 Annual Report to Shareholders. Such Reports may be
obtained by writing or calling the Fund. The Fund's financial statements and
financial highlights for the five years ended July 31, 1996 have been audited
by the Fund's independent certified public accountants, whose opinion thereon
is contained in the Annual Report.

<TABLE>
<CAPTION>
Class Y
October 2, 1996
(Commencement of
operations)
through
January 31, 1997
(Unaudited)
<S> <C>
Net Asset Value, Beginning of Period $ 16.66
-------
Income From Investment Operations
- ---------------------------------

Net Investment Income .07

Net Gains or Losses on Securities (both
realized and unrealized) 2.76
-------

Total From Investment Operations 2.83

Less Distributions
- ------------------

Dividends from net investment income (.06)

Distributions From Realized Capital Gains (.70)
-------

Total Distributions (.76)
-------

Net Asset Value, End of Period $ 18.73

Total Return 17.23%
- ------------

Ratios/Supplemental Data
- ------------------------

Net Assets, End of Period (000 omitted) 107,488

Ratio of Expenses to Average Net Assets .63<F*>

Ratio of Net Income to Average Net Assets 1.16%<F*>

Portfolio Turnover Rate 11%

Average Commission Rate Per Share $.0600
<FN>
<F*> Annualized
</TABLE>

<PAGE> 37

INVESTMENT OBJECTIVE AND POLICIES

General. The Fund's investment objective is growth of capital. There
is no assurance that such objective will be achieved. The Fund ordinarily
invests in securities which the Adviser or Sub-Adviser believes have
above-average appreciation potential. Usually these securities are common
stocks. Income is not a significant factor in selecting the Fund's investments.

Generally, the Fund invests predominantly in equity securities of
companies with market capitalizations of at least $250 million. It also will
invest in issues with smaller capitalizations. Special risks associated with
investing in small cap issuers relative to larger cap issuers include high
volatility of valuations and less liquidity. Investments will consist of
issues which the Adviser or Sub-Adviser believes have capital growth
potential due to factors such as undervalued assets or earnings potential,
product development and demand, favorable operating ratios, resources for
expansion, management abilities, reasonableness of market price, and
favorable overall business prospects.

Foreign Investments. The Fund may invest in securities of foreign
issuers or securities which are principally traded in foreign markets
("foreign securities"). Investments in foreign securities may be made through
the purchase of individual securities on recognized exchanges and developed
over-the-counter markets, through American Depository Receipts ("ADRs")
covering such securities, and through U.S. registered investment companies
investing primarily in foreign securities. The Fund, however, may not invest
in the securities of other investment companies if more than 10% of the
Fund's total assets would then be invested in such companies. Other
registered investment companies usually have their own management costs or
fees and the Adviser will also earn its regular fee on Fund assets invested
in such other companies. When the Fund is invested in foreign securities,
the operating expenses of the Fund are likely to be higher than that of an
investment company investing exclusively in U.S. securities, since the
management, custodial and certain other expenses are expected to be higher.

Investments in foreign securities may involve a higher degree of risk
than investments in domestic issuers. Foreign securities are often
denominated in foreign currencies, which means that their value will be
affected by changes in exchange rates, as well as other factors that affect
securities prices. There is generally less publicly available information
about foreign securities and securities markets, and there may be less
government regulation and supervision of foreign issuers and securities
markets. Foreign securities and markets may also be affected by political
and economic instabilities, and may be more volatile and less liquid than
domestic securities and markets. Investment risks may include expropriation
or nationalization of assets, confiscatory taxation, exchange controls and
limitations on the use or transfer of assets, and significant withholding
taxes. Foreign economies may differ from the United States favorably or
unfavorably with respect to inflation rates, balance of payments, capital
reinvestment, gross national product expansion, and other relevant
indicators.

<PAGE> 38

amount of assets that may be committed to currency hedging. However, the Fund
will not engage in a futures transaction if it would cause the aggregate of
initial margin deposits and premiums paid on outstanding options on futures
contracts to exceed 5% of the value of its total assets (excluding in
calculating such 5% any in-the-money amount of any option). Currency hedging
transactions may be utilized as a tool to reduce currency fluctuation risks due
to a current or anticipated position in foreign securities. The successful use
of currency hedging transactions usually depends on the Adviser's or the
Sub-Adviser's ability to forecast interest rate and currency exchange rate
movements. Should interest or exchange rates move in an unexpected manner, the
anticipated benefits of futures contracts, options or forward contracts may
not be achieved or losses may be realized and thus the Fund could be in a
worse position than if such strategies had not been used. Unlike many
exchange-traded futures contracts, there are no daily price fluctuation
limits with respect to options on currencies and forward contracts, and
adverse market movements could therefore continue to an unlimited extent over
a period of time. In addition, the correlation between movements in the
prices of such instruments and movements in the price of the securities and
currencies hedged or used for cover will not be perfect and could produce
unanticipated losses. Unanticipated changes in currency prices may result in
poorer overall performance for the Fund than if it had not entered into such
contracts. When taking a position in an anticipatory hedge, the Fund is
required to set aside cash or high grade liquid securities to fully secure
the obligation.

Temporary Defensive Investments. For defensive purposes or to
accommodate inflows of cash awaiting more permanent investment, the Fund may
temporarily and without limitation hold high-grade short-term money market
instruments, cash and cash equivalents, including repurchase agreements.

Restricted and Illiquid Securities. The Fund may invest in restricted
securities, i.e., securities which, if sold, would cause the Fund to be
deemed an "underwriter" under the Securities Act of 1933 (the "1933 Act") or
which are subject to contractual restrictions on resale. The Fund's policy
is to not purchase or hold illiquid securities (which may include restricted
securities) if more than 15% of the Fund's net assets would then be illiquid.
If at any time more than 15% of the Fund's net assets are illiquid, steps
will be taken as soon as practicable to reduce the percentage of illiquid
assets to 15% or less.

The restricted securities which the Fund may purchase include
securities which have not been registered under the 1933 Act but are eligible
for purchase and sale pursuant to Rule 144A ("Rule 144A Securities"). This
Rule permits certain qualified institutional buyers, such as the Fund, to
trade in privately placed securities even though such securities are not
registered under the 1933 Act. The Adviser or Sub-Adviser, under criteria
established by the Fund's Board of Directors, will consider whether Rule 144A
securities being purchased or held by the Fund are illiquid and thus subject
to the Fund's policy limiting investments in illiquid securities. In making
this determination, the Adviser or Sub-Adviser will consider the frequency of
trades and quotes, the number of dealers and potential purchasers, dealer
undertakings to make a market, and the nature of the security and the market
place trades (for example, the time needed to dispose of the security, the
method of soliciting offers and the mechanics of transfer). The liquidity of
Rule 144A Securities will also be monitored by the Adviser and Sub-Adviser
and, if as a result of changed conditions, it is determined that a Rule 144A
Security is no longer liquid, the Fund's holding of illiquid securities will
be reviewed to determine what, if any, action is required in light of the
policy limiting investments in such securities. Investing in Rule 144A
Securities could have the effect of increasing the amount of investments in
illiquid securities if qualified institutional buyers are unwilling to
purchase such securities.

<PAGE> 39

Repurchase Agreements. The Fund may enter into repurchase agreements,
but normally will not enter into repurchase agreements maturing in more than
seven days, and may make repurchase agreement transactions through a joint
account with other funds which have the same investment adviser. A
repurchase agreement, as referred to herein, involves a sale of securities to
the Fund, with the concurrent agreement of the seller (a bank or securities
dealer which the Adviser or Sub-Adviser determines to be financially sound at
the time of the transaction) to repurchase the securities at the same price
plus an amount equal to accrued interest at an agreed-upon interest rate,
within a specified time, usually less than one week, but, on occasion, at a
later time. The repurchase obligation of the seller is, in effect, secured
by the underlying securities. In the event of a bankruptcy or other default
of a seller of a repurchase agreement, the Fund could experience both delays
in liquidating the underlying securities and losses, including (a) possible
decline in the value of the collateral during the period while the Fund seeks
to enforce its rights thereto; (b) possible loss of all or a part of the
income during this period; and (c) expenses of enforcing its rights.

Borrowing. The Fund may not borrow money except from banks for
extraordinary or emergency purposes in amounts not exceeding 10% of the value
of the Fund's total assets (excluding the amount borrowed) at the time of
borrowing. The Fund may not pledge or hypothecate any of its assets, except
in connection with permitted borrowing in amounts not exceeding 15% of the
value of the Fund's total assets (excluding the amount borrowed) at the time
of such borrowing.

Portfolio Transactions. The Adviser and the Sub-Adviser are
responsible for the placement of portfolio transactions, subject to the
supervision of the Board of Directors. It is the Fund's policy to seek to
place portfolio transactions with brokers or dealers who will execute
transactions as efficiently as possible and at the most favorable price.
Subject to this policy, research services and placement of orders by
securities firms for Fund shares may be taken into account as a factor in
placement of portfolio transactions. In seeking the Fund's investment
objective, the Fund may trade to some degree in securities for the short term
if the Adviser or Sub-Adviser believes that the growth potential of a
security no longer exists, considers that other securities have more growth
potential, or otherwise believes that such trading is advisable. Because of
the Fund's investment policies, portfolio turnover rate will vary. At times
it could be high, which could require the payment of larger amounts in
brokerage commissions. The Adviser and Sub-Adviser are authorized to place
portfolio transactions with Shelby Cullom Davis & Co., a member of the New
York Stock Exchange, which may be deemed to be an affiliate of the Adviser,
if the commissions are fair and reasonable and comparable to commissions
charged by non-affiliated qualified brokerage firms for similar services.
Portfolio turnover rates are set forth in "Financial Highlights".

Fundamental Policies. The Fund has adopted certain investment
restrictions set forth in the Statement of Additional Information. These
restrictions and the Fund's investment objective are fundamental policies and
may not be changed unless authorized by a vote of the shareholders. All
other policies are non-fundamental and may be changed without shareholder
approval. Except for the restriction with respect to illiquid securities,
any percentage restrictions set forth in the prospectus or in the Statement
of Additional Information apply as of the time of investment without regard
to later increases or decreases in the values of securities or total net
assets.

ADVISER, SUB-ADVISER AND DISTRIBUTOR

Subject to the direction and supervision of the Fund's Board of
Directors, the Fund's affairs are managed by Davis Selected Advisers, L.P.,
124 East Marcy Street,

<PAGE> 40

Santa Fe, New Mexico 87501. Venture Advisers, Inc. is the Adviser's sole
general partner. Shelby M.C. Davis is the controlling shareholder of the
general partner. Subject to the direction and supervision of the Board of
Directors, the Adviser manages the Fund's investment and business operations.
Davis Distributors, LLC (the "Distributor"), a subsidiary of the Adviser, serves
as the distributor or principal underwriter of the Fund's shares. Davis
Selected Advisers-NY, Inc., a wholly-owned subsidiary of the Adviser, performs
research and portfolio management services for the Fund under a Sub-Advisory
Agreement with the Adviser. The Adviser also acts as investment adviser for
Davis High Income Fund, Inc., Davis Tax-Free High Income Fund, Inc., Davis
Series, Inc. and Davis International Series, Inc. (collectively with the Fund,
the "Davis Funds"), Selected American Shares, Inc., Selected Special Shares,
Inc. and Selected Capital Preservation Trust (collectively, the "Selected
Funds"). The Distributor also acts as the principal underwriter for the Davis
and Selected Funds.

The Fund pays the Adviser a fee at the annual rate based on average net
assets, as follows: 0.75% on the first $250 million; 0.65% on the next $250
million; 0.55% on the next $2.5 billion; 0.54% on the next $1 billion; 0.53%
on the next $1 billion; 0.52% on the next $1 billion; 0.51% the next $1
billion; and 0.50% of average net assets in excess of $7 billion. This fee
is higher than that of most other mutual funds but is not necessarily higher
than that paid by funds with a similar objective. The Fund also reimburses
the Adviser for its costs of providing certain accounting and financial
reporting, shareholder services and compliance with state securities laws.
Under the Sub-Advisory Agreement, the Adviser pays all of the Sub-Adviser's
direct and indirect costs of operation. All the fees paid to the Sub-Adviser
are paid by the Adviser and not the Fund.

Christopher C. Davis is the portfolio manager for the Fund and other
equity funds managed by the Adviser. He was co-portfolio manager of the
Fund, with Shelby M.C. Davis, from October 1, 1995 until February 19, 1997.
Prior to his responsibilities as co-portfolio manager, Christopher C. Davis
worked closely with Shelby M.C. Davis as an assistant portfolio manager and
research analyst beginning in September, 1989.

Shelby M.C. Davis is Chief Investment Officer of the Adviser. As Chief
Investment Officer, he is active in providing investment themes, strategies
and individual stock selections to the Fund. He was the Fund's primary
portfolio manager from its inception in 1969 until February 19, 1997. He is
an officer of all investment companies managed by the Adviser and was the
portfolio manager of a growth and income fund managed by the Adviser from May
1, 1993 until February 19, 1997. He has been a director of the Adviser's
general partner Since 1969.

The Distributor, is reimbursed by the Fund for some of its distribution
expenses through Distribution Plans which have been adopted with respect to
Class A, Class B and Class C shares and approved by the Fund's Board of
Directors and the shareholders of such classes in accordance with Rule 12b-1
under the Investment Company Act of 1940. The Class Y shares are not
subject to Rule 12b-1 fees.

PURCHASE OF SHARES

General. Class Y shares are offered through this Prospectus to (i)
trust companies, bank trusts, endowments, pension plans or foundations
("Institutions") acting on behalf of their own account or one or more clients
for which such Institution acts in a fiduciary capacity and investing at
least $5,000,000 at any one time; (ii) any state, county, city, department,
authority or similar agency which invests at least $5,000,000 ("Government
Entities"); and (iii) any investor with an account established under a "wrap
account" or other similar fee-based program sponsored and maintained by a
registered broker-dealer

<PAGE> 41

approved by the Fund's Distributor ("Wrap Program Investors"). Wrap Program
Investors may only purchase Class Y shares through the sponsors of such programs
who have entered into agreements with Davis Selected Advisers, L.P.

Wrap Program Investors should be aware that both Class A and Class Y
shares are made available by the Fund at net asset value to sponsors of wrap
programs. However, Class A shares are subject to additional expenses under
the Fund's Rule 12b-1 Plan and sponsors of wrap programs utilizing Class A
shares are generally entitled to payments under the Plan. If the sponsor has
selected Class A shares, investors should discuss these charges with their
program's sponsor and weigh the benefits of any services to be provided by
the sponsor against the higher expenses paid by Class A shareholders.

Purchase by Bank Wire. Shares may be purchased at any time by wiring
federal funds directly to State Street. Prior to an initial investment by
wire, the institutional shareholder or wrap program sponsor should telephone
Davis Distributors, LLC at 1-800-279-0279 to advise them of the investment
and class of shares and to obtain an account number and instructions. To
assure proper credit, the wire instructions should be made as follows:

You may make additional investments by wire or you may simply mail a
check payable to "The Davis Funds" to State Street Bank and Trust Company,
c/o The Davis Funds, P.O. Box 8406, Boston, MA 02266-8406. The check should
be accompanied by a form which State Street will provide after each purchase.
If you do not have a form, you should tell State Street that you want to
invest the check in shares of the Fund. If you know your account number, you
should also give it to State Street.

The Fund does not issue certificates for Class Y shares. Each time you
add to or withdraw from your account, you will receive a statement showing
the details of the transaction and any other transactions you had during the
current year.

TELEPHONE PRIVILEGE

Unless you have provided in your application that the telephone
privilege is not to be available, the telephone privilege is automatically
available under certain circumstances for exchanging shares and for redeeming
shares. By exercising the telephone privilege to sell or exchange shares,
you agree that the Fund shall not be liable for following telephone
instructions reasonably believed to be genuine. Reasonable procedures will
be employed to confirm that such instructions are genuine and if not
employed, the Fund may be liable for unauthorized instructions. Such
procedures will include a request for personal identification (account or
social security number) and tape recording of the instructions. You should
be aware that during unusual market conditions we may have difficulty in
accepting telephone requests, in which case you should contact us by mail.
See "Exchange of Shares - By Telephone", "Redemption of Shares - By
Telephone" and "Redemption of Shares - Expedited Redemption Privilege".

<PAGE> 42

EXCHANGE OF SHARES

General. You may exchange Class Y shares of the Fund for Class Y
shares of the other Davis Funds. The Davis Funds offer a variety of
investment objectives that includes common stock funds, tax-exempt and
corporate bond funds, and a money market fund. However, the Fund is intended
as a long-term investment and is not intended for short-term trades. The net
asset value of the initial shares being acquired must be at least $5,000,000
for Institutions and Government Entities or minimums set by wrap program
sponsors. Class A shareholders who are eligible to purchase Class Y shares
may exchange their shares for Class Y shares of the Fund.

Before you decide to make an exchange, you must obtain the current
prospectus of the desired fund. Call the Distributor for information and a
prospectus for any of the other Davis Funds registered in your state. Read
the prospectus carefully. If you decide to exchange your shares, send State
Street a written unconditional request for the exchange and follow the
instructions regarding delivery of share certificates contained in the
section on "Redemption of Shares". A signature guarantee is not required for
such an exchange. However, if shares are also redeemed for cash in
connection with the exchange transaction, a signature guarantee may be
required. See "Redemption of Shares". Your dealer may charge an additional
fee for handling an exercise of the exchange privilege.

An exchange involves both a redemption and a purchase, and normally
both are done on the same day. However, in certain instances such as where a
large redemption is involved, the investment of redemption proceeds into
shares of other Davis Funds may take up to seven days. For federal income
tax purposes, exchanges are treated as a sale and purchase. Therefore, there
will usually be a recognizable capital gain or loss due to an exchange.

The number of times a shareholder may exchange shares among the Davis
Funds within a specified period of time may be limited at the discretion of
the Adviser. Currently, more than three exchanges out of a fund during a
twelve month period are not permitted without the prior written approval of
the Adviser. The Fund reserves the right to terminate or amend the exchange
privilege at any time upon 60 or more days' notice.

By Telephone. You may exchange shares by telephone into accounts with
identical registrations. Please see the discussion of procedures in respect
to telephone instructions in the section entitled "Telephone Privilege," as
such procedures are also applicable to exchanges.

REDEMPTION OF SHARES

General. You can redeem, or sell back to the Fund, all or part of your
shares at any time. You can do this by sending a written request to State
Street Bank and Trust Company, c/o The Davis Funds, P.O. Box 8406, Boston, MA
02266-8406, indicating how many of your shares or what dollar amount you want
to redeem. If more than one person owns the shares to be redeemed, all
owners must sign the request. The signatures on the request must correspond
to the account from which the shares are registered.

<PAGE> 43

For the protection of all shareholders, the Fund also requires that
signatures appearing on a stock power or redemption request where the
proceeds would be more than $50,000, must be guaranteed by a bank, credit
union, savings association, securities exchange, broker, dealer or other
guarantor institution. A signature guarantee is also required in the event
that any modification to the Fund's application is made after the account is
established, including the selection of the Expedited Redemption Privilege.
In some situations such as where corporations, trusts or estates are
involved, additional documents may be necessary to effect the redemption.
The transfer agent may reject a request from any of the foregoing eligible
guarantors, if such guarantor does not satisfy the transfer agent's written
standards or procedures or if such guarantor is not a member or participant
of a signature guarantee program. This provision also applies to exchanges
when there is also a redemption for cash. A signature guarantee on
redemption requests where the proceeds would be $50,000 or less is not
required, provided that such proceeds are being sent to the address of record
and, in order to ensure authenticity of an address change, such address of
record has not been changed within the last 30 days. All notifications of
address changes must be in writing.

Redemption proceeds are normally paid to you within seven days after
State Street receives your proper redemption request. Payment for
redemptions can be suspended under certain emergency conditions determined by
the Securities and Exchange Commission or if the New York Stock Exchange is
closed for other than customary or holiday closings. If any of the shares
redeemed were just bought by you, payment to you may be delayed until your
purchase check has cleared (which usually takes up to 15 days from the
purchase date). You can avoid any such redemption delay by paying for your
shares with a certified or cashier's check or by bank wire or federal funds.

Redemptions are ordinarily paid to you in cash. However, the Fund's
Board of Directors is authorized to decide that conditions exist making cash
payments undesirable, although the Board has never reached such a decision.
If the Board should decide to make payment in other than cash, redemptions
could be paid in securities, valued at the value used in computing the Fund's
net asset value. There would be brokerage costs incurred by the shareholder
in selling such redemption proceeds. We must, however, redeem shares solely
in cash up to the lesser of $250,000 or 1% of the Fund's net asset value,
whichever is smaller, during any 90-day period for any one shareholder.

Your shares may also be redeemed through participating brokers or
dealers. The Distributor may repurchase shares from your dealer, if your
dealer is a member of the Distributor's selling group. Your dealer may, but
is not required to, use this method in selling back your shares and may place
any repurchase request by telephone or wire. Any dealer may charge you a
service fee or commission. No charge is payable if you redeem your own
shares through State Street rather than having a dealer arrange for a
repurchase.

DETERMINING THE PRICE OF SHARES

The net asset value per share of each class is determined daily by
dividing the total value of investments and other assets, less any
liabilities, by the total number of outstanding shares of each class.
Valuation of the Fund's portfolio securities is based upon their market
value. Securities traded on a national securities exchange are valued at the
last published sales prices on the exchange, or, in the absence of recorded
sales, at the average of closing bid and asked prices on such exchange.
Over-the-counter securities are valued at the average of closing bid and
asked prices. Investments in short-term securities (maturing in sixty days
or less) are valued at amortized cost unless the Board of Directors
determines that such cost is not a fair value. Assets for which there are no
quotations available will be valued at a fair value as determined by, or at
the direction of, the Board of Directors .

<PAGE> 44

The net asset value per share is determined as of the earlier of the
close of the exchange or 4:00 p.m. Eastern Time on each day the New York
Stock Exchange is open. The price per share for purchases or redemptions
made directly through State Street normally is such value next computed after
State Street receives the purchase order or redemption request. If the
purchase order or redemption request is placed with your dealer, then the
applicable price is normally computed as of 4:00 p.m. Eastern Time on the day
the dealer receives the order, provided that the dealer receives the order
before 4:00 p.m. Eastern Time. Otherwise, the applicable price is the next
determined net asset value. It is the responsibility of your dealer to
promptly forward purchase and redemptions orders to the Distributor. Note
that in the case of redemptions and repurchases of shares owned by
corporations, trusts or estates, State Street may require additional
documents to effect the redemption and the applicable price will be
determined as of the close of the next computation following the receipt of
the required documentation. See "Redemption of Shares."

DIVIDENDS AND DISTRIBUTIONS

There are two sources for the payments made to you by the Fund. The
first is net investment income and the second source is realized capital
gains. Distributions are made at least annually. You will receive quarterly
confirmation statements for dividends declared and shares purchased through
reinvestment of dividends. You will also receive confirmations after each
purchase (other than through dividend reinvestment) and after each
redemption. For tax purposes, information concerning distributions will be
mailed annually to shareholders.

Shareholders have the option to receive all dividends and distributions
in cash, to have all dividends and distributions reinvested, or to have
income dividends paid in cash and short-term and long-term capital gain
distributions reinvested. The reinvestment of dividends and distributions is
made at net asset value on the payment date. Upon receipt of the second
dividend check which has been returned to State Street as undeliverable,
undelivered dividends will be invested in additional shares at the current
net asset value and the account designated as a dividend reinvestment
account.

FEDERAL INCOME TAXES

This section is not intended to be a full discussion of all the aspects
of the federal income tax law and its effects on the Fund and its
shareholders. Shareholders may be subject to state and local taxes on
distributions. Each investor should consult his or her own tax adviser
regarding the effect of federal, state and local taxes on an investment in
the Fund.

The Fund intends to continue to qualify as a regulated investment
company under the Internal Revenue Code (the "Code") and, if so qualified,
will not be liable for federal income tax to the extent its earnings are
distributed, except in respect to realization of the "built-in gains" as
described below. If for any calendar year the distribution of earnings
required under the Code exceeds the amount distributed, an excise tax, equal
to 4% of the excess, will be imposed on the Fund. The Fund intends to make
distributions during each calendar year sufficient to prevent imposition of
the excise tax.

<PAGE> 45

treated the same for tax purposes whether received in cash or in additional
shares. Dividends declared in the last calendar month to shareholders of
record in such month and paid by the end of the following January are treated
as received by the shareholder in the year in which they are declared.

On October 12, 1990, the Fund acquired by merger the investment
portfolio of Mulford Securities Corp., a private investment company which, on
the date of the merger, owned securities with a fair market value in excess
of their cost ("Mulford built-in gains"). For a period of ten years after
the merger, to the extent that the Fund realizes any net Mulford built-in
gains in any year, the Fund will incur a capital gains tax and will
distribute to shareholders only the excess of the amount of the net gains
realized over the amount of the tax. Such distributions will be taxable as
ordinary income. (The Fund will be reimbursed for the tax it pays through an
escrow established for this purpose under the terms of the merger.)

A gain or loss for tax purposes may be realized on the redemption of
shares. If the shareholder realizes a loss on the sale or exchange of any
shares held for six months or less and if the shareholder received a capital
gain distribution during such period, then such loss is treated as a
long-term capital loss to the extent of such capital gain distribution.

FUND SHARES

Shares issued by the Fund are currently divided into four classes,
Class A, Class B, Class C and Class Y shares. Due to the differing expenses
of the classes, dividends of Class B and Class C shares are likely to be
lower than for Class A shares, and are likely to be higher for Class Y shares
than for any other class of shares. For more information regarding the Class
A, B and C shares, please call 1-800-279-0279 to request a prospectus for
those shares.

The Board of Directors may offer additional classes in the future and
may at any time discontinue the offering of any class of shares. Each share,
when issued and paid for in accordance with the terms of the offering, is
fully paid and non-assessable. Shares have no preemptive or subscription
rights and are freely transferable. Each share of the Fund represents an
interest in the assets of the Fund and has identical voting, dividend,
liquidation and other rights and the same terms and conditions as any other
shares except that (i) each dollar of net asset value per share is entitled
to one vote, (ii) the expenses related to a particular class, such as those
related to the distribution of each class and the transfer agency expenses of
each class are borne solely by each such class and (iii) each class of shares
votes separately with respect to provisions of the Rule 12b-1 Distribution
Plan which pertains to a particular class and other matters for which
separate class voting is appropriate under applicable law. Each fractional
share has the same rights, in proportion, as a full share. Shares do not
have cumulative voting rights; therefore, the holders of more than 50% of the
voting power of the Fund can elect all of the directors of the Fund.

PERFORMANCE DATA

From time to time, the Fund may advertise information regarding its
performance. Such information may consist of its "yield", "distribution
rate", "average annual total return", and "total return" and will be
calculated separately for each class. These performance figures are based
upon historical results and are not intended to indicate future performance.

"Yield" is computed by dividing the net investment income per share (as
defined in applicable regulations of the Securities and Exchange Commission)
during a specified 30-

<PAGE> 46

day period by the maximum offering price per share on the last day of such
period. Yield is an annualized figure, in that it assumes that the same level
of net investment income is generated over a one year period. The yield formula
annualizes net investment income by providing for semi-annual compounding.

"Distribution rate" is determined by dividing the income dividends per
share for a stated period by the net asset value per share on the last day of
such period. Distribution rates published are measures of the level of
income dividends distributed during a specified period. Thus, such rates
differ from yield (which measures income actually earned by a Fund) and total
return (which measures actual income, plus realized and unrealized gains or
losses of a Fund's investments). Consequently, distribution rates alone
should not be considered complete measures of performance.

"Total return" refers to the Fund's compounded rate of return over a
stated period that would equate an initial amount invested at the beginning of
the period to the ending redeemable value of the investment. Total return is
not annualized. In the event the Fund advertises its total return or average
annual total return, the stated periods will be one, five and ten years, and
may also include longer or shorter periods, including the life of the Fund.
The computation of total and average annual total return assumes reinvestment
of all dividends and distributions, and deduction of all charges and
expenses.

In addition, a table showing the performance of an assumed investment
of $10,000 may be used from time to time. The Fund may also quote average
annual total return and total return on net asset value. Such data will be
calculated substantially as described above, except that sales charges will
not be deducted.

In reports or other communications to shareholders and in advertising
material, the performance of the Fund may be compared to recognized unmanaged
indices or averages of the performance of similar securities. Also, the
performance of the Fund may be compared to that of other funds of similar
size and objectives as listed in the rankings prepared by Lipper Analytical
Services, Inc., Morningstar, Inc. or similar independent mutual fund rating
services, and the Fund may use evaluations published by nationally recognized
independent ranking services and publications.

The Fund's 1996 Annual Report contains additional performance
information and will be made available upon request and without charge.

SHAREHOLDER INQUIRIES

Shareholder inquiries should be directed to Davis Distributors, LLC, by
writing to State Street Bank and Trust Company, c/o The Davis Funds, P.O. Box
8406, Boston, MA 02266-8406 or by calling 1-800-279-0279. Davis Direct
Access is the Davis Funds' automated telephone system that enables
shareholders to perform a number of account transactions automatically by
using a touch-tone phone. Shareholders may obtain Fund and account specific
information and make purchases, exchanges and redemptions.

<PAGE> 47

<TABLE>
TABLE OF CONTENTS
<CAPTION>

PAGE
<S> <C>
Summary 2

Financial Highlights 3

Investment Objective and Policies 5

Adviser, Sub-Adviser and Distributor 7

Purchase of Shares 8

Telephone Privilege 9

Exchange of Shares 9

Redemption of Shares 9

Determining the Price of Shares 10

Dividends and Distributions 11

Federal Income Taxes 11

Fund Shares 11

Performance Data 12

Shareholder Inquiries 13
</TABLE>

<PAGE> 48
STATEMENT OF ADDITIONAL INFORMATION

December 1, 1996,
as revised August 4, 1997

Davis New York Venture Fund, Inc.
124 East Marcy Street
Santa Fe, New Mexico 87501
1-800-279-0279

TABLE OF CONTENTS
Topic Page
Investment Restrictions 2
Hedging of Foreign Currency Risks 3
Repurchase Agreements 4
Portfolio Transactions 4
Directors and Officers 5
Directors Compensation Schedule 7
Certain Shareholders of the Fund 7
Investment Advisory Services 8
Custodian 9
Auditors 9
Determining the Price of Shares 9
Reduction of Class A Sales Charge 9
Exemptions to Class B Sales and Conversion Features 10
Distribution of Fund Shares 11
Performance Data 12

This Statement of Additional Information is not a prospectus and should be
read in conjunction with the Class A, Class B and Class C Prospectus dated
December 1, 1996 as revised August 4, 1997, and the Class Y Prospectus dated
December 1, 1996 as revised August 4, 1997. The Prospectuses may be obtained
from the Fund.

The Fund's unaudited financial statements included in the Semi-Annual Report
to Shareholders for the Fund dated January 31, 1997 are expressly
incorporated herein by reference and made a part of this Statement of
Additional Information. Copies of the Semi-Annual Report may be obtained free
of charge from the Fund. All interim financial information reflects all
adjustments which are, in the opinion of management, necessary to a fair
statement of the results for such interim period.

INVESTMENT RESTRICTIONS

The investment restrictions set forth below and the Fund's investment
objective set forth in the Prospectus may not be changed without the approval
of the holders of the lesser of (i) 67% of the eligible votes, if the holders
of more than 50% of the eligible votes are represented or (ii) more than 50%
of the eligible votes. All percentage limitations set forth in these
restrictions apply as of the time of an investment without regard to later
increases or decreases in the value of securities or total or net assets.

1. The Fund may not buy or sell commodities or commodity contracts, except
contracts in respect to foreign currencies for hedging (risk reduction)
purposes.
<PAGE> 49
2. The Fund may not purchase real estate or real estate mortgages as such,
but may purchase the liquid securities of companies, including real estate
investment trusts, holding real estate or interests (including mortgage
interests) therein.

3. The Fund may not buy the securities of any company if after such
purchase the Fund would then own more than 10% of such company's voting
securities or any class of such company's securities. For this purpose all
debt securities are deemed to comprise a single class.

4. The Fund may not buy the securities of any company if more than 5% of
the value of the Fund's total assets would then be invested in that company.
(U.S. Government Securities, i.e. securities issued by the U.S. Government or
its agencies or instrumentalities and repurchase agreements involving such
securities, are not included in this limitation.)

5. The Fund does not concentrate its investments in any one industry and
may not buy the securities of companies in any one industry if more than 25%
of the value of the Fund's total assets would then be invested in companies
in that industry. (U.S. Government Securities are not included in this
limitation.)

6. The Fund may not purchase or write puts, calls, or a combination
thereof ("option transactions"), except that the Fund may (i) write listed
covered call options ("calls") on portfolio securities and purchase call
options to close such transactions (provided that no such call is written if
it would cause more than 25% of the value of the Fund's total assets to be
subject to calls), (ii) purchase warrants issued by a company relating to its
own securities or those of a company it is controlled by or controls or with
which it is under common control and (iii) engage in option transactions in
respect to foreign currencies for hedging purposes.

7. The Fund may not buy the securities of companies in continuous
operation for less than three years (including predecessors) if more than 5%
of the value of the Fund's total assets would then be invested in such
securities.

8. The Fund may not buy securities of other registered investment
companies, except: (i) shares of investment companies investing primarily in
foreign securities so long as such purchase does not cause the Fund to (a)
have more than 5% of the value of its total assets invested in any one such
company, (b) have more than 10% of the value of its total assets invested in
the aggregate of all such companies, or (c) own more than 3% of the total
outstanding voting stock of any such company; or (ii) as a part of a merger,
consolidation, reorganization or acquisition of assets. An investor of the
Fund may incur duplicate fees if shares of investment companies are
purchased.

9. The Fund may not sell short, buy on margin or engage in arbitrage
transactions. This restriction does not apply to transactions in respect to
foreign currencies for hedging purposes.

10. The Fund may not purchase illiquid securities if more than 15% of the
value of the Fund's net assets would be invested in such securities.

11. The Fund does not invest for the purpose of exercising control or
management of other companies.
<PAGE> 50
12. The Fund may not borrow money except from banks for extraordinary or
emergency purposes in amounts not exceeding 10% of the value of the Fund's
total assets (excluding the amount borrowed) at the time of borrowing. The
Fund may not pledge or hypothecate any of its assets, except in connection
with permitted borrowing in amounts not exceeding 15% of the value of the
Fund's total assets (excluding the amount borrowed) at the time of such
borrowing. (These restrictions do not apply to the use of margin deposits in
connection with transactions in foreign currencies for hedging purposes.)

13. The Fund may not buy or continue to hold securities if any officers or
directors of the Fund, the Adviser or the Adviser's General Partner own too
many of the same securities. This would happen if any of these individuals
own 1/2 of 1% or more of the securities and all such individuals who own that
much or more own 5% of such securities.

14. The Fund does not engage in the underwriting of securities; however,
the Fund may technically be considered an "underwriter" if it sells
restricted securities.

15. The Fund may not lend money, except that it may buy debt securities
customarily acquired by institutional investors. These debt securities may
comprise all or a portion of an issue of "restricted" debt securities. The
Fund may also buy debt securities which have been sold to the public and may
enter into repurchase agreements. The Fund may lend its portfolio securities
subject to having 100% collateral in cash or U.S. Government Securities. The
Fund will not lend securities if such a loan would cause more than 20% of the
total value of its assets to then be subject to such loans.

Non-Fundamental Policies. In addition to the foregoing restrictions,
the Fund is subject to certain other non-fundamental policies which may be
changed without shareholder approval.

HEDGING OF FOREIGN CURRENCY RISKS

The Fund may purchase or sell forward foreign currency exchange
contracts ("forward contracts") to attempt to minimize the risk to the Fund
from adverse changes in the relationship between the U.S. dollar and foreign
currencies. A forward contract is an obligation to purchase or sell a
specific currency for an agreed price at a future date which is individually
negotiated and privately traded by currency traders and their customers. Such
a contract gives the Fund a position in a negotiated, currently non-regulated
market. The Fund may enter into a forward contract, for example, when it
enters into a contract for the purchase or sale of a security denominated in
a foreign currency in order to "lock in" the U.S. dollar price of the
security ("transaction hedge"). Additionally, for example, when the Adviser
or Sub-Adviser believes that a foreign currency may suffer a substantial
decline against the U.S. dollar, it may enter into a forward sale contract to
sell an amount of that foreign currency approximating the value of some or
all of the Fund's portfolio securities denominated in such foreign currency,
or when the Fund believes that the U.S. dollar may suffer a substantial
decline against a foreign currency, it may enter into a forward purchase
contract to buy that foreign currency for a fixed dollar amount in
anticipation of purchasing foreign traded securities ("position hedge"). In
this situation the Fund may, in the alternative, enter into a forward
contract in respect to a different foreign currency for a fixed U.S. dollar
amount ("cross hedge"). This may be done, for example, where the Adviser or
Sub-Adviser believes that the U.S. dollar value of the currency to be sold
pursuant to the forward contract will fall whenever there is a decline in the
U.S. dollar value of the currency in which portfolio securities of the Fund
are denominated.

The Fund may purchase and write put and call options on foreign
currencies for the purpose of protecting against declines in the U.S. dollar
value of foreign currency-
<PAGE> 51
denominated portfolio securities and against increases in the U.S. dollar cost
of such securities to be acquired. As in the case of other kinds of options,
however, the writing of an option on a foreign currency constitutes only a
partial hedge, up to the amount of the premium received, and the Fund could be
required to purchase or sell foreign currencies at disadvantageous exchange
rates, thereby incurring losses. The purchase of an option on a foreign
currency may constitute an effective hedge against fluctuations in exchange
rates although, in the event of rate movements adverse to the Fund's position,
it may forfeit the entire amount of the premium plus related transaction costs.
Options on foreign currencies to be written or purchased by the Fund are
traded on U.S. and foreign exchanges or over-the-counter. Currently, a
significant portion or all of the value of an over-the-counter option may be
treated as an illiquid investment and subject to the restriction on such
investments as long as the SEC requires that over-the-counter options be
treated as illiquid. Generally, the Fund would utilize options traded on
exchanges where the options are standardized.

The Fund may enter into contracts for the purchase or sale for future
delivery of foreign currencies ("currency futures contracts") and may
purchase and write put and call options to buy or sell currency futures
contracts. A "sale" of a currency futures contract means the acquisition of
a contractual obligation to deliver the foreign currencies called for by the
contract at a specified price on a specified date. A "purchase" of a
currency futures contract means the incurring of a contractual obligation to
acquire the foreign currencies called for by the contract at a specified
price on a specified date. Options on currency futures contracts to be
purchased by the Fund will be traded on U.S. or foreign exchanges or
over-the-counter. The Fund will not enter into any futures contracts or
options on currency futures contracts if immediately thereafter the aggregate
of initial margin deposits on all the outstanding currency futures contracts of
the Fund and premiums paid on outstanding options on currency futures contracts
would exceed 5% of the market value of the total assets of the Fund (excluding
in such market value any in-the-money amount of any option).

The Fund may also purchase securities (debt securities or deposits)
which have their coupon rate or value at maturity determined by reference to
the value of one or more foreign currencies. The Fund will not use leverage.
These strategies will be used for hedging purposes only. The Fund will hold
securities or other options or futures positions whose values are expected to
offset its obligations under the hedge strategies. The Fund will not enter
into a currency hedging position that exposes the Fund to an obligation to
another party unless it owns either (i) an offsetting position in securities,
options or futures positions or (ii) cash, receivables and short-term debt
securities with a value sufficient to cover its potential obligations. The
Fund will comply with requirements established by the SEC with respect to
coverage of options and futures strategies by mutual funds, and, if so
required, will set aside cash and high grade liquid debt securities in a
segregated account with its custodian bank in the amount prescribed. The
Fund's custodian will maintain the value of such segregated account equal to
the prescribed amount by adding or removing additional cash or liquid
securities to account for fluctuations in the value of securities held in
such account. Securities held in a segregated account cannot be sold while
the futures or option strategy is outstanding, unless they are replaced with
similar securities.

The Fund's ability to dispose of its positions in futures contracts,
options and forward contracts will depend on the availability of liquid
markets in such instruments. Markets in options and futures with respect to
currencies are still developing. It is impossible to predict the amount of
trading interest that may exist in various types of futures contracts,
options and forward contracts. If a secondary market does not exist with
respect to an option purchased or written by the Fund over-the-counter, it
might not be possible to effect a closing transaction in the option ( i.e.,
dispose of the option) with the result that (i) an option purchased by the
Fund would have to be exercised in order for the
<PAGE> 52
Fund to realize any profit and (ii) the Fund may not be able to sell currencies
covering an option written by the Fund until the option expires or it delivers
the underlying futures currency upon exercise. Therefore, no assurance can be
given that the Fund will be able to utilize these instruments effectively for
the purposes set forth above. The Fund's ability to engage in currency hedging
transactions may be limited by tax considerations.

The Fund's transactions in forward contracts, options on foreign
currencies and currency futures contracts will be subject to special tax
rules under the Internal Revenue Code that, among other things, may affect
the character of any gains or losses of the Fund as ordinary or capital and
the timing and amount of any income or loss to the Fund. This, in turn,
could affect the character, timing and amount of distributions by the Fund to
shareholders. The Fund may be limited in its foreign currency transactions
by tax considerations.

REPURCHASE AGREEMENTS

A repurchase agreement involves a sale of securities to the Fund, with
the concurrent agreement of the seller (a member bank of the Federal Reserve
System or securities dealer which the Adviser or Sub-Adviser believes to be
financially sound) to repurchase the securities at the same price plus an
amount equal to accrued interest at an agreed-upon interest rate, within a
specified time, usually less than one week, but, on occasion, at a later
time. The repurchase obligation of the seller is, in effect, secured by the
underlying securities, which are securities issued or guaranteed by the U.S.
Government, its agencies or instrumentalities. In the event of a bankruptcy
or other default of a seller of a repurchase agreement, the Fund could
experience both delays in liquidating the underlying securities and losses,
including (a) possible decline in the value of the collateral during the
period while the Fund seeks to enforce its rights thereto, (b) possible loss
of all or a part of the income during this period and (c) expenses of
enforcing its rights.

The Fund will enter into repurchase agreements only when the seller
agrees that the value of the underlying securities, including accrued
interest (if any), will at all times be equal to or exceed the value of the
repurchase agreement. The Fund will not enter into a repurchase agreement
maturing in more than seven days if it would cause more than 10% of the value
of its total assets to be invested in such transactions. Repurchase
agreements maturing in less than seven days are not deemed illiquid
securities for the purpose of the Fund's 15% limitation on illiquid
securities.

PORTFOLIO TRANSACTIONS

Davis Selected Advisers, L.P. (the "Adviser") and Davis Selected
Advisers-NY, Inc. (the 'Sub-Adviser") make investment decisions and arrange
for the placement of buy and sell orders and the execution of portfolio
transactions for the Fund, subject to review by the Board of Directors. In
this regard, the Adviser or Sub-Adviser will seek to obtain the most
favorable price and execution for the transaction given the size and risk
involved. In placing executions and paying brokerage commissions, the
Adviser or Sub-Adviser considers the financial responsibility and reputation
of the broker or dealer, the range and quality of the services made available
to the Fund and the professional services rendered, including execution,
clearance procedures, wire service quotations and ability to provide
supplemental performance, statistical and other research information for
consideration, analysis and evaluation by the Adviser's or Sub-Adviser"s
staff. In accordance with this policy, brokerage transactions may not be
executed solely on the basis of the lowest commission rate available for a
particular transaction. Research services provided to the Adviser or Sub-
Adviser by or through brokers who effect portfolio transactions for the Fund
may be used in servicing other accounts managed by the Adviser and likewise
<PAGE> 53
research services provided by brokers used for transactions of other accounts
may be utilized by the Adviser or Sub-Adviser in performing services for the
Fund. Subject to the requirements of best execution, the placement of orders
by securities firms for shares of the Fund may be taken into account as a
factor in the placement of portfolio transactions.

On occasions when the Adviser or Sub-Adviser deems the purchase or sale
of a security to be in the best interests of the Fund as well as other
fiduciary accounts, the Adviser or Sub-Adviser may aggregate the securities
to be sold or purchased for the Fund with those to be sold or purchased for
other accounts in order to obtain the best net price and most favorable
execution. In such event, the allocation will be made by the Adviser or Sub-
Adviser in the manner considered to be most equitable and consistent with its
fiduciary obligations to all such fiduciary accounts, including the Fund. In
some instances, this procedure could adversely affect the Fund but the Fund
deems that any disadvantage in the procedure would be outweighed by the
increased selection available and the increased opportunity to engage in
volume transactions.

The Adviser and Sub-Adviser believe that research from brokers and
dealers is desirable, although not essential, in carrying out their
functions, in that such outside research supplements the efforts of the
Adviser and Sub-Adviser by corroborating data and enabling the Adviser and
Sub-Adviser to consider the views, information and analyses of other research
staffs. Such views, information and analyses include such matters as
communicating with persons having special expertise on certain companies,
industries, areas of the economy and/or securities prices, obtaining written
materials on these or other areas which might affect the economy and/or
securities prices, obtaining quotations on securities prices and obtaining
information on the activities of other institutional investors. The Adviser
and Sub-Adviser research, at their own expense, each security included in, or
being considered for inclusion in, the Fund's portfolio. As any particular
research obtained by the Adviser or Sub-Adviser may be useful to the Fund,
the Board of Directors or its Committee on brokerage, in considering the
reasonableness of the commissions paid by the Fund, will not attempt to
allocate, or require the Adviser to allocate, the relative costs or benefits
of research.

During the last three fiscal years ended July 31, 1996, 1995 and 1994,
the Fund paid brokerage commissions of $1,315,346, $929,980 and $750,697,
respectively.

DIRECTORS AND OFFICERS

The names and addresses of the directors and officers of the Fund are
set forth below, together with their principal business affiliations and
occupations for the last five years. The Fund's directors are divided into
five classes, three of which are each comprised of two directors and two of
which are comprised of three directors. Directors in each class generally
serve five-year terms. As these terms are staggered, our shareholders
generally elect two or three directors at each annual meeting. The asterisk
following the names of Shelby M.C. Davis and Jeremy H. Biggs indicates that
they are considered to be "interested persons" of the Fund, as defined in the
Investment Company Act. As indicated below, certain directors and officers
of the Fund hold similar positions with the following funds that are managed
by the Adviser: Davis High Income Fund, Inc., Davis Tax-Free High Income
Fund, Inc., Davis Series, Inc. and Davis International Series, Inc.
(collectively the "Davis Funds").

Wesley E. Bass, Jr. (8/21/31), 710 Walden Road, Winnetka, IL 60093. Director
of the Company and each of the Davis Funds except Davis International Series,
Inc.; President, Bass & Associates (a financial consulting firm); formerly,
First Deputy City Treasurer, City of Chicago, and Executive Vice President,
Chicago Title and Trust Company.
<PAGE> 54

Jeremy H. Biggs (8/16/35),* Two World Trade Center, 94th Floor, New York, NY
10048. Director and Chairman of the Company and each of the Davis Funds;
Director of the Van Eck Funds; Consultant to the Adviser. Vice Chairman,
Head of Equity Research Department, Chairman of the U.S. Investment Policy
Committee and member of the International Investment Committee of Fiduciary
Trust Company International.

Marc P. Blum (9/9/42), 233 East Redwood Street, Baltimore, MD 21202.
Director of the Company and each of the Davis Funds except Davis
International Series, Inc.; Chief Executive Officer, World Total Return Fund,
L.P.; Member, Gordon, Feinblatt, Rothman, Hoffberger and Hollander, LLC
(attorneys); Director, Mid-Atlantic Realty Trust.

Eugene M. Feinblatt (10/28/19), 233 East Redwood Street, Baltimore, MD 21202.
Director of the Company and each of the Davis Funds except Davis
International Series, Inc.; of Counsel, Gordon, Feinblatt, Rothman,
Hoffberger and Hollander, LLC (attorneys).

Jerry D. Geist (5/23/34), 931 San Pedro Dr. S.E., Albuquerque, NM 87108.
Director of the Company and each of the Davis Funds except Davis
International Series, Inc.; Chairman, Santa Fe Center Enterprises; President
and Chief Executive Officer, Howard Energy International Utilities; Director,
CH2M-Hill, Inc.; Retired Chairman and President, Public Service Company of
New Mexico.

D. James Guzy (3/7/36), 508 Tasman Drive, Sunnyvale, CA 94089. Director of
the Company and each of the Davis Funds except Davis International Series,
Inc.; Chairman, PLX Technology, Inc. (a manufacturer of semi-conductor
circuits); Director, Intel Corp. (a manufacturer semi-conductor circuits),
Cirrus Logic Corp. (a manufacturer of semi-conductor circuits) and Alliance
Technology Fund (a mutual fund).

G. Bernard Hamilton (3/18/37), Avanti Partners, P.O. Box 1119, Richmond, VA
23218. Director of the Company and each of the Davis Funds except Davis
International Series, Inc.; Managing General Partner, Avanti Partners, L.P.

LeRoy E. Hoffberger (6/8/25), The Exchange - Suite 215, 1112 Kenilworth
Drive, Towson, MD 21204. Director of the Company and each of the Davis
Funds except Davis International Series, Inc.; of Counsel to Gordon,
Feinblatt, Rothman, Hoffberger and Hollander, LLC (attorneys); Chairman,
Mid-Atlantic Realty Trust; Director and President, CPC, Inc. (a real estate
company); Director and Vice President, Merchant Terminal Corporation;
formerly, Director of Equitable Bancorporation, Equitable Bank and Maryland
National Bank, and formerly, Director and President, O-W Fund, Inc. (a
private investment fund).

Laurence W. Levine (4/9/31), c/o Bigham Englar Jones & Houston, 14 Wall
Street, 21st, Floor, New York, NY 10005-2140. Director of the Company and
each of the Davis Funds except Davis International Series, Inc.; Partner,
Bigham, Englar, Jones and Houston (attorneys); United States Counsel to
Aerolineas Argentina; Director, various private companies.

Christian R. Sonne (5/6/30), P.O. Box 777, Tuxedo Park, NY 10987. Director
of the Company and each of the Davis Funds except Davis International Series,
Inc.; General Partner of Tuxedo Park Associates (a land holding and
development firm); President and Chief Executive Officer of Mulford
Securities Corporation (a private investment fund) until 1990; formerly, Vice
President of Goldman Sachs & Company (investment banker).
<PAGE> 55

Edwin R. Werner (4/1/22), 207 Gosling Hill Drive, Manhasset, NY 11030.
Director of the Company and each of the Davis Funds except Davis
International Series, Inc.; President, The Estates of North Hills New York;
formerly, Chairman and CEO, Empire Blue Cross and Blue Shield of New York.
Shelby M.C. Davis (3/20/37),* 4135 North Steers Head Road, Jackson Hole, WY
83001. President of the Fund and each of the Davis Funds; President of
Selected American Shares, Inc., Selected Special shares, Inc. and Selected
Capital Preservation Trust; Director, Chairman and Chief Executive Officer,
Venture Advisers, Inc., effective August 15, 1995; Employee of Capital Ideas,
Inc. (financial consulting firm); Consultant to Fiduciary Trust Company
International; Director, Shelby Cullom Davis Financial Consultants, Inc.

Andrew A. Davis (6/25/63), 124 East Marcy Street, Santa Fe, NM 87501. Vice
President of the Company and each of the Davis Funds; Director and President,
Venture Advisers, Inc. effective August 15, 1995; formerly, Vice President
and head of convertible security research, PaineWebber, Incorporated.

Christopher C. Davis (7/13/65), 70 Pine Street, 43rd Floor, New York, NY
10270-0108. Vice President of the Company and each of the Davis Funds except
Davis International Series, Inc.; Director, Venture Advisers, Inc.
Kenneth C. Eich (8/14/53), 124 East Marcy Street, Santa Fe, NM 87501. Vice
President of the Fund and each of the Davis Funds, Selected American Shares,
Inc., Selected Special Shares, Inc. and Selected Capital Preservation Trust;
Chief Operating Officer, Davis Selected Advisers, L.P. Former President and
Chief Executive Officer of First of Michigan Corporation. Former Executive
Vice President and Chief Financial Officer of Oppenheimer Management
Corporation.

Carolyn H. Spolidoro (11/19/52), 124 East Marcy Street, Santa Fe, NM 87501.
Vice President of the Company and each of the Davis Funds; Vice President,
Venture Advisers, Inc.

Eileen R. Street (3/11/62), 124 East Marcy Street, Santa Fe, NM 87501.
Treasurer and Assistant Secretary of the Company and each of the Davis Funds,
Selected American Shares, Inc., Selected Special Shares, Inc. and Selected
Capital Preservation Trust; Senior Vice President and Chief Financial
Officer, Venture Advisers, Inc.

Samuel P. Ynzunza (8/13/62), 124 East Marcy Street, Santa Fe, NM 87501.
Vice President and Secretary of the Company and each of the Davis Funds,
Selected American Shares, Inc., Selected Special Shares, Inc., and Selected
Capital Preservation Trust. Senior Vice President and General Counsel, Davis
Selected Advisers, L.P. Former Corporate Counsel for INVESCO Funds Group,
Inc. and Franklin Resources, Inc.

Sheldon R. Stein (11/29/28), 30 North LaSalle Street, Suite 2900, Chicago, IL
60602, Assistant Secretary of the Company and each of the Davis Funds,
Selected American Shares, Inc., Selected Special Shares, Inc. and Selected
Capital Preservation Trust; Partner D'Ancona & Pflaum, the Company's legal
counsel.

Arthur Don (9/24/53), 30 North LaSalle Street, Suite 2900, Chicago, IL
60602, Assistant Secretary of the Company and each of the Davis Funds,
Selected American Shares, Inc., Selected Special Shares, Inc. and Selected
Capital Preservation Trust; Partner D'Ancona & Pflaum, the Company's legal
counsel.

The Company does not pay salaries to any of its officers. The Adviser
performs certain services on behalf of the Company and is reimbursed by the
Company for the costs of providing these services. See "Investment Advisory
Services."
<PAGE> 56
DIRECTORS' COMPENSATION SCHEDULE

During the fiscal year ended July 31, 1996, the compensation paid to
the directors who are not considered to be interested persons of the Fund was
as follows:

<TABLE>
<CAPTION>
Aggregate Fund Total
Name Compensation Complex Compensation<F*>
<S> <C> <C>
Wesley E. Bass 7,375 24,250
Marc P. Blum 7,200 23,550
Eugene M. Feinblatt 6,400 20,900
Jerry D. Geist 6,300 20,550
D. James Guzy 7,250 23,700
G. Bernard Hamilton 7,150 23,300
LeRoy E. Hoffberger 7,150 23,500
Laurence W. Levine 7,150 23,500
Christian R. Sonne 7,250 23,450
Edwin R. Werner 7,150 23,300

<FN>
<F*> Complex compensation is the aggregate compensation paid, for services as a
Director, by all mutual funds with the same investment adviser.
</TABLE>

CERTAIN SHAREHOLDERS OF THE FUND

The following table sets forth, as of August 1, 1997 the name and
holdings of each person known by the Fund to be a record owner of more than
5% of its outstanding Class A shares. As of such date, there were
176,373,735.055 Class A shares outstanding and the directors and officers of
the Fund, as a group, owned 3,802,306.954 Class A shares, or approximately
2.16% of the Fund's outstanding Class A shares. As of such date, there were
52,065,257.333 Class B and 24,893,662.897 Class C shares outstanding. The
directors and officers of the Fund do not presently own or intend to own any
Class B or C shares of the Fund. As of such date, there were 22,819,683.543
Class Y shares outstanding and the directors and officers of the Fund, as a
group, owned 879,911.748 Class Y shares, or approximately 3.86% of the Fund"s
outstanding Class Y shares. The Fund is not aware of any shareholder who
beneficially owns in excess of 25% of the Fund's total outstanding shares.

<TABLE>
<CAPTION>
Number of Percent of Class
Name and Address Shares Owned Outstanding
<S> <C> <C>
Class A shares

Shelby Cullom Davis & Co. 13,018,849.913 7.38%
609 5th Avenue
New York, New York 10017-1021

Merrill Lynch Pierce Fenner & Smith 14,268,817.959 8.08%
4800 Deerlake Drive East, 3rd Floor
Jacksonville, FL 32246-6484

Merrill Lynch Pierce Fenner & Smith 13,033,056.866 7.39%
FBO: Qualified Retirement Plans
400 Strium Drive 4th Floor
Somerset, NJ 08873-4102
<PAGE> 57
Class B shares

Merrill Lynch Pierce Fenner & Smith 17,106,700.14 32.86%
4800 Deerlake Drive East, 3rd Floor
Jacksonville, FL 32246-6484

Class C shares

Merrill Lynch Pierce Fenner & Smith 11,485,891.000 46.14%
4800 Deerlake Drive East, 3rd Floor
Jacksonville, FL 32246-6484

Class Y shares

Merrill Lynch Pierce Fenner & Smith 14,789,897.000 64.81%
4800 Deerlake Drive East, 3rd Floor
Jacksonville, FL 32246-6484
</TABLE>

INVESTMENT ADVISORY SERVICES

Davis Selected Advisers, L.P. serves as investment adviser for the Fund
pursuant to an investment advisory agreement (the "Advisory Agreement")
adopted in accordance with the requirements of the Investment Company Act of
1940. Pursuant to the Advisory Agreement, the Adviser, subject to the
general supervision of the Fund's Board of Directors, provides management and
investment advice, and furnishes statistical, executive and clerical
personnel, bookkeeping, office space, and equipment necessary to carry out
its investment advisory functions and such corporate managerial duties as are
requested by the Board of Directors of the Fund. The Fund bears all expenses
other than those specifically assumed by the Adviser under the Advisory
Agreement, including preparation of its tax returns, financial reports to
regulatory authorities, dividend determinations and transaction and
accounting matters related to its custodian bank, transfer agency, custodial
and shareholder services, and qualification of its shares under federal and
state securities laws.

Davis Selected Advisers-NY, Inc., a wholly-owned subsidiary of the
Adviser, performs research and portfolio management services for the Fund
under a Sub-Advisory Agreement with the Adviser.

For the Adviser's services, the Fund pays the Adviser a monthly fee at
the annual rate based on average net assets, as follows: 0.75% on the first
$250 million; 0.65% on the next $250 million; 0.55% on the next $2.5
billion; 0.54% on the next $1 billion; 0.53% on the next $1 billion; 0.52% on
the next $1 billion; 0.51% the next $1 billion; and 0.50% of average net
assets in excess of $7 billion. The aggregate advisory fees paid by the Fund
to the Adviser for the fiscal years ended July 31, 1996, 1995 and 1994 were
$12,351,657, $7,587,812 and $6,021,981, respectively. Under the Sub-Advisory
Agreement, the Adviser pays all of the Sub-Adviser"s direct and indirect
costs of operations. All the fees paid to the Sub-Adviser are paid by the
Adviser and not the Fund.

Under the Advisory Agreement, if expenses borne by the Fund in any
fiscal year (including the advisory fee, but excluding interest, taxes,
brokerage fees and payments made under a Rule 12b-1 Distribution Plan and,
where permitted, extraordinary expenses) exceed limitations imposed by
applicable state securities laws or regulations, the Adviser must reimburse
the Fund for any such excess at least annually, up to the amount of its
<PAGE> 58
advisory fee. These expense limitations may be raised or lowered from time
to time. The present maximum operating expense limitations are 2-1/2% of the
first $30 million of average net assets, 2% of the next $70 million of
average net assets and 1-1/2% of average net assets over $100 million.

The reimbursable costs for certain accounting and administrative
services for the fiscal years ended July 31, 1996, 1995 and 1994 were
$65,004, $51,668 and $45,000, respectively. The reimbursable costs for
qualifying the Fund's shares for sale with state agencies for such periods
were $12,000, $9,336 and $8,004, respectively, and the reimbursable costs for
providing shareholder services for such periods were $141,804, $77,178 and
$77,856, respectively.

The Advisory Agreement also makes provisions for portfolio transactions
and brokerage policies of the Fund which are discussed above under "Portfolio
Transactions."

In accordance with the provisions of the Investment Company Act, the
Advisory Agreement will terminate automatically upon assignment and is
subject to cancellation upon 60 days' written notice by the Fund's Board of
Directors, the vote of the holders of a majority of the Fund's outstanding
shares or the Adviser. The continuance of the Agreement must be approved at
least annually by the Fund's Board of Directors or by the vote of holders of
a majority of the outstanding shares of the Fund. In addition, any new
agreement or the continuation of the existing agreement must be approved by
a majority of directors who are not parties to the agreement or interested
persons of any such party.

The Adviser has adopted a Code of Ethics which regulates the personal
securities transactions of the Adviser's investment personnel and other
employees and affiliates with access to information regarding securities
transactions of the Fund. The Code of Ethics requires investment personnel
to disclose personal securities holdings upon commencement of employment and
all subsequent trading activity to the Adviser's Compliance Officer.
Investment personnel are prohibited from engaging in any securities
transactions, including the purchase of securities in a private offering,
without the prior consent of the Compliance Officer. Additionally, such
personnel are prohibited from purchasing securities in an initial public
offering and are prohibited from trading in any securities (i) for which the
Fund has a pending buy or sell order, (ii) which the Fund is considering
buying or selling, or (iii) which the Fund purchased or sold within seven
calendar days.

CUSTODIAN

The Custodian of the Fund's assets is State Street Bank and Trust
Company ("State Street"), Atlantic Division, 470 Atlantic Avenue, Boston,
Massachusetts 02210. The Custodian maintains all of the instruments
representing the investments of the Fund and all cash. The Custodian
delivers securities against payment upon sale and pays for securities against
delivery upon purchase. The Custodian also remits Fund assets in payment of
Fund expenses, pursuant to instructions of officers or resolutions of the
Board of Directors.

AUDITORS

The Fund's auditors are Tait, Weller & Baker, Two Penn Center, Suite
700, Philadelphia, Pennsylvania 19102-1707. The audit includes examination
of annual financial statements furnished to shareholders and filed with the
Securities and Exchange Commission, consultation on financial accounting and
reporting matters, and meeting with the Audit Committee of the Board of
Directors. In addition, the auditors review federal and state income tax
returns and related forms.
<PAGE> 59
DETERMINING THE PRICE OF SHARES

The Fund does not price its shares or accept orders for purchases or
redemptions on days when the New York Stock Exchange is closed. Such days
currently include New Year's Day, President's Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day and Christmas Day.

REDUCTION OF CLASS A SALES CHARGE

There are a number of ways to reduce the sales charge imposed on the
purchase of the Fund's Class A shares, as described below. These reductions
are based upon the fact that there is less sales effort and expense involved
in respect to purchases by affiliated persons and purchases made in large
quantities.

Family or Group Purchases. Certain purchases made by or for more than
one person may be considered to constitute a single purchase, including (i)
purchases for family members, including spouses and children under 21, (ii)
purchases by trust or other fiduciary accounts and purchases by Individual
Retirement Accounts for employees of a single employer and (iii) purchases
made by an organized group of persons, whether incorporated or not, if the
group has a purpose other than buying shares of mutual funds. For further
information on group purchase reductions, contact the Adviser or your dealer.

Statements of Intention. Another way to reduce the sales charge is by
signing a Statement of Intention. A Statement is included in the Application
Form included in the Prospectus. Please read it carefully before completing
it.

If you enter into a Statement of Intention you (or any "single
purchaser") may state that you intend to invest at least $100,000 in the
Fund's Class A shares over a 13-month period. The amount you say you intend
to invest may include Class A shares which you already own, valued at the
offering price, at the end of the period covered by the Statement. A
Statement may be backdated up to 90 days to include purchases made during
that period, but the total period covered by the Statement may not exceed 13
months.

Shares having a value of 5% of the amount you state you intend to
invest will be held "in escrow" to make sure that any additional sales
charges are paid. If any of the Fund's shares are in escrow pursuant to a
Statement and such shares are exchanged for shares of another Davis Fund, the
escrow will continue with respect to the acquired shares.

No additional sales charge will be payable if you invest the amount you
have indicated. Each purchase under a Statement will be made as if you were
buying at one time the total amount indicated. For example, if you indicate
that you intend to invest $100,000, you will pay a sales charge of 3-1/2% on
each purchase.

If you buy additional amounts during the period to qualify for an even
lower sales charge, you will be charged such lower charge. For example, if
you indicate that you intend to invest $100,000 and actually invest $250,000,
you will, by retroactive adjustment, pay a sales charge of 2-1/2%.

If during the 13-month period you invest less than the amount you have
indicated, you will pay an additional sales charge. For example, if you
state that you intend to invest $250,000 and actually invest only $100,000,
you will, by retroactive adjustment, pay a sales charge of 3-1/2%. The sales
charge you actually pay will be the same as if you had purchased the shares
in a single purchase.
<PAGE> 60
A Statement does not bind you to buy, nor does it bind the Adviser to
sell, the shares covered by the Statement.

Rights of Accumulation. Another way to reduce the sales charge is
under a right of accumulation. This means that the larger purchase entitled
to a lower sales charge need not be in dollars invested at one time. The
larger purchases that you (or any "single purchaser") make at any one time
can be determined by adding to the amount of a current purchase the value of
Fund shares (at offering price) already owned by you.

For example, if you owned $100,000 worth (at offering price) of the
Fund's Class A shares and invest $5,000 in additional shares, the sales
charge on that $5,000 investment would be 3-1/2%, not 4-3/4%.

If you claim this right of accumulation, you or your dealer must so
notify the Distributor (or State Street, if the investment is mailed to State
Street) when the purchase is made. Enough information must be given to
verify that you are entitled to such right.

Combined Purchases with other Davis Funds. Your ownership or purchase
of Class A shares of Davis High Income Fund, Inc., Davis Tax-Free High Income
Fund, Inc., Davis Series, Inc. and Davis International Series, Inc.
(collectively with the Fund, the "Davis Funds") may also reduce your sales
charges in connection with the purchase of the Fund's Class A shares. This
applies to all three situations for reduction of sales charges discussed
above.

If a "single purchaser" decides to buy the Fund's Class A shares as
well as Class A shares of any of the other Davis Funds (other than shares of
Davis Government Money Market Fund) at the same time, these purchases will be
considered a single purchase for the purpose of calculating the sales charge.
For example, a single purchaser can invest at the same time $100,000 in the
Fund's Class A shares and $150,000 in the Class A shares of VIP and pay a
sales charge of 2-1/2%, not 3-1/2%.

Similarly, a Statement of Intention for the Fund's Class A shares and
for the Class A shares of the other Davis Funds (other than Davis Government
Money Market Fund) may be aggregated. In this connection, the Fund's Class A
shares and the Class A shares of the other Davis Funds which you already own,
valued at the current offering price at the end of the period covered by your
Statement of Intention, may be included in the amount you have stated you
intend to invest pursuant to your Statement.

Lastly, the right of accumulation applies also to the Class A shares of
the other Davis Funds (other than Davis Government Money Market Fund) which
you own. Thus, the amount of current purchases of the Fund's Class A shares
which you make may be added to the value of the Class A shares of the other
Davis Funds (valued at their current offering price) already owned by you in
determining the applicable sales charge. For example, if you owned $100,000
worth of shares of Davis High Income Fund, Inc. and Davis Financial Fund and
Davis Convertible Securities Fund, (valued at the applicable current offering
price) and invest $5,000 in the Fund's shares, the sales charge on your
investment would be 3-1/2%, not 4-3/4%.

In all the above instances where you wish to claim this right of
combining the shares you own of the other Davis Funds, you or your dealer
must notify the Distributor (or State Street, if the investment is mailed to
State Street) of the pertinent facts. Enough information must be given to
permit verification as to whether you are entitled to a reduction in sales
charges.
<PAGE> 61
Issuance of Shares at Net Asset Value. There are many situations where
the sales charge will not apply to the purchase of Class A shares, as
discussed in the Prospectus. In addition, the Fund occasionally may be
provided with an opportunity to purchase substantially all the assets of a
public or private investment company or to merge another such company into
the Fund. This offers the Fund the opportunity to obtain significant assets.
No dealer concession is involved. It is industry practice to effect such
transactions at net asset value as it would adversely affect the Fund's
ability to do such transactions if the Fund had to impose a sales charge.

EXEMPTIONS TO CLASS B SALES AND CONVERSION FEATURES

Class B shares of the Davis New York Venture Fund, Inc. are made
available to Retirement Plan Participants such as 401K or 403B Plans at NAV
with the waiver of contingent deferred sales charge (CDSC) if:

(i) the Plan is recordkept on a daily valuation basis by Merrill Lynch and,
on the date the Plan sponsor signs the Merrill Lynch Recordkeeping Service
Agreement, the Plan has less than $3 million in assets invested in
broker/dealer funds not advised or managed by Merrill Lynch Asset Management,
L.P. ("MLAM") that are made available pursuant to a Services Agreement
between Merrill Lynch and the fund's principal underwriter or distributor and
in funds advised or managed by MLAM (collectively, the "Applicable
Investments"); or

(ii) the Plan is recordkept on a daily valuation basis by an independent
recordkeeper whose services are provided through a contract o alliance
arrangement with Merrill Lynch, and on the date the Plan Sponsor signs the
Merrill Lynch Recordkeeping Service Agreement, the Plan has less than $3
million in assets, excluding money market funds, invested in Applicable
Investments; or

(iii) the Plan has less than 500 eligible employees, as determined by the
Merrill Lynch plan conversion manager, on the date the Plan Sponsor signs the
Merrill Lynch Recordkeeping Service Agreement.

Plans recordkept on a daily basis by Merrill Lynch or an independent
recordkeeper under a contract with Merrill Lynch that are currently investing
in Class B shares of the Davis mutual funds convert to Class A shares once
the Plan has reached $5 million invested in Applicable Investments. The Plan
will receive a Plan level share conversion. The Fund may make similar
exceptions for other financial institutions sponsoring or administering
similar benefit plans.

Issuance of Shares at Net Asset Value. There are many situations where
the sales charge will not apply to the purchase of Class A shares, as
discussed in the Prospectus. In addition, the Fund occasionally may be
provided with an opportunity to purchase substantially all the assets of a
public or private investment company or to merge another such company into
the Fund. This offers the Fund the opportunity to obtain significant assets.
No dealer concession is involved. It is industry practice to effect such
transactions at net asset value as it would adversely affect the Fund's
ability to do such transactions if the Fund had to impose a sales charge.

DISTRIBUTION OF FUND SHARES

Davis Distributors, LLC, ('the Distributor"), acts as principal
underwriter of the Fund's shares on a continuing basis pursuant to a
Distributing Agreement. Pursuant to Distributing Agreement, the Distributor
pays for all expenses in connection with the
<PAGE> 62
preparation, printing and distribution of advertising and sales literature for
use in offering the Fund's shares to the public, including reports to
shareholders to the extent they are used as sales literature. The Distributor
also pays for the preparation and printing of prospectuses other than those
forwarded to existing shareholders. The continuance and assignment provisions
of the Distributing Agreement are the same as those of the Advisory Agreement.

During the Fund's fiscal years ended July 31, 1996, 1995 and 1994, the
Adviser, in its capacity as distributor, received total sales charges (which
the Fund does not pay) on the sale of Class A shares of the Fund of
$11,092,007, $5,230,889 and $7,256,343, respectively. Of this amount, the
Adviser paid concessions to dealers of $9,343,681, $4,404,100 and $6,104,072,
respectively.

In addition, the Fund has adopted distribution plans with respect to
each class of its shares pursuant to Rule 12b-1 under the Investment Company
Act (the "Distribution Plans"). Payments under the Class A Distribution Plan
are limited to an annual rate of 0.25% of the average daily net asset value
of the Class A shares. Payments under the Class B and Class C Distribution
Plans are limited to an annual rate of 1.00% of the average daily net asset
value of each such class of shares.

To the extent that any investment advisory fees paid by the Fund may be
deemed to be indirectly financing any activity which is primarily intended to
result in the sale of shares of the Fund within the meaning of Rule 12b-1,
the payments of such fees are authorized under the Plans.

The Distribution Plans continue annually so long as they are approved
in the manner provided by Rule 12b-1 or unless earlier terminated by vote of
the majority of the Fund's Independent Directors or a majority of the Fund's
outstanding shares. The Distributor is required to furnish quarterly written
reports to the Board of Directors detailing the amounts expended under the
Distribution Plans. The Distribution Plans may be amended provided that all
such amendments comply with the applicable requirements then in effect under
Rule 12b-1. Presently, Rule 12b-1 requires, among other procedures, that it
be continued only if a majority of the Independent Directors approve
continuation at least annually and that amendments materially increasing the
amount to be spent for distribution be approved by the Independent Directors
and the shareholders. As long as the Distribution Plans are in effect, the
Fund must commit the selection and nomination of candidates for new
Independent Directors to the sole discretion of the existing Independent
Directors.

During the fiscal years ended July 31, 1996 and 1995, the Adviser
received $2,614,412 and $1,514,686 under the Class A Distribution Plan
$1,561,856 and $94,221, under the Class A and Class B Distribution Plan and
$570,693 and $20,342 under the Class C Distribution Plan. All of these
amounts were paid to dealers and sales personnel.

PERFORMANCE DATA

The average annual total return (as defined below) with respect to the
Fund's Class A shares for each of the periods indicated below is as follows:

One year ended January 31, 1997 24.63%
Five years ended January 31, 1997 19.04%
Ten years ended January 31, 1997 16.45%
<PAGE> 63
The average annual total return with respect to the Fund's Class B
shares for the one year ended January 31, 1997 and for the period beginning
December 1, 1994 and ended January 31, 1997 (life of class) were 26.57% and
33.16%, respectively. The average annual total return with respect to the
Fund's Class C shares for the year ended January 31, 1997 and for the period
beginning December 20, 1994 and ended January 31, 1997 (life of class) were
29.63% and 33.69%, respectively.

Average annual total return measures both the net investment income
generated by, and the effect of any realized or unrealized appreciation or
depreciation of, the underlying investments in the Fund's portfolio. Average
annual total return is calculated separately for each class in accordance
with the standardized method prescribed by the Securities and Exchange
Commission by determining the average annual compounded rates of return over
the periods indicated, that would equate the initial amount invested to the
ending redeemable value, according to the following formula:

P(1+T)n - ERV

Where: P = hypothetical initial payment of $1,000

T = average annual total return

n = number of years

ERV = ending redeemable value at the end of the period of a hypothetical
$1,000 payment made at the beginning of such period

This calculation (i) assumes all dividends and distributions are reinvested
at net asset value on the appropriate reinvestment dates and (ii) deducts (a)
the maximum front-end or applicable contingent deferred sales charge from the
hypothetical initial $1,000 investment, and (b) all recurring fees, such as
advisory fees, charged as expenses to all shareholder accounts.

Total return is the cumulative rate of investment growth which assumes
that income dividends and capital gains are reinvested. It is determined by
assuming a hypothetical investment at the net asset value at the beginning of
the period, adding in the reinvestment of all income dividends and capital
gains, calculating the ending value of the investment at the net asset value
as of the end of the specified time period, subtracting he amount of the
original investment. This calculated amount is then expressed as a percentage
by multiplying by 100.

The total return (as defined above) for the Fund's Class A shares for
each of the periods indicated below is as follows:

One year ended January 31, 1997 24.63%
Five years ended January 31, 1997 139.25%
Ten years ended January 31, 1997 359.22%

The total return with respect to the Fund's Class B shares for the year
ended January 31, 1997 and for the period beginning December 1, 1994 and
ended January 31, 1997 (life of class) were 26.57% and 86.15%, respectively.
The total return with respect to the Fund's Class C shares for the year ended
January 31, 1997 and for the period beginning December 20, 1994 and ended
January 31, 1997 (life of class) were 29.63% and 84.95%, respectively.
<PAGE> 64
In reports or other communications to shareholders and in advertising
material, the Fund may compare its performance to recognized averages and
indices of performance such as the Consumer Price Index, the Dow Jones
Industrial Average, the Standard & Poor's 500 Stock Index and to the
performance of mutual fund indexes as reported by Lipper Analytical Services,
Inc. ("Lipper") or CDA Investment Technologies, Inc. ("CDA"), two widely
recognized independent mutual fund reporting services. Lipper and CDA
performance calculations include reinvestment of all capital gain and income
dividends for the periods covered by the calculations. The Consumer Price
Index is generally considered to be a measure of inflation. The Dow Jones
Industrial Average and the Standard & Poor's 500 Stock Index are unmanaged
indices of common stocks which are considered to be generally representative
of the United States stock market. The market prices and yields of these
stocks will fluctuate.

The Fund may also use evaluations of the Fund published by nationally
recognized ranking services and by financial publications. Any given
performance comparison should not be considered representative of the Fund's
performance for any future period.
<PAGE> 65
FORM N-1A

DAVIS NEW YORK VENTURE FUND, INC.

POST-EFFECTIVE AMENDMENT NO. 54 UNDER THE SECURITIES ACT OF 1933
REGISTRATION STATEMENT No. 2-29858

AND

AMENDMENT NO. 29 UNDER THE INVESTMENT COMPANY ACT OF 1940
REGISTRATION NO. 811-1701

PART C

OTHER INFORMATION
-----------------

Item 24. Financial Statements and Exhibits
---------------------------------

(a) Financial Statements:

Included in Part A:

(i) Financial Highlights.

Included in Part B by incorporation from the 1996 Annual Report:

(i) Schedule of Investments at July 31, 1996.

(ii) Statement of Assets & Liabilities at July 31,1996.

(iii) Statement of Operations for the year ended July 31, 1996.

(iv) Statement of Changes in Net Asset Value for the years ended
July 31, 1996 and 1995.

(v) Notes to Financial Statements.

(vi) Financial Highlights.

(vii) Report of Independent Certified Public Accountants.

(b) Exhibits:

(1) (a) Articles of Incorporation, incorporated by reference
to Exhibit (1) to Registrant's Post-Effective
Amendment No. 50, File No. 2-29858.

(1) (b) Articles Supplementary to Articles of Incorporation.

(2) Amended and Restated Bylaws, incorporated by
reference to Exhibit (2) to Registrant's Post-
Effective Amendment No. 50, File No. 2-29858.

(3) Not applicable.

(4) Not applicable.

(5) (a) Investment Advisory Agreement, incorporated by
reference to Exhibit (5) to Registrant's Post-
Effective Amendment No. 50, File No. 2-29858.

<PAGE> 66
(5) (b) Investment Advisory Agreement, as amended effective
December 1, 1996, incorporated by reference to
Exhibit 5(b) to Registrant's Post Effective
Amendment No. 52, File 2-29858.

(5) (c) Sub-Advisory Agreement between Davis Selected
Adviser, L.P. and Davis Selected Adviser-NY, Inc.,
incorporated by reference to Exhibit 5(c) to
Registrant's Post Effective Amendment No. 52, File 2-
29858.

(6) (a) Distributor's Agreement, incorporated by reference to
Exhibit (6) to Registrant's Post-Effective
Amendment No. 50, File No. 2-29858.

(6) (b) Transfer and Assumption Agreement dated June 1, 1997.

(7) Not applicable.

(8) (a) Custodian Contract, incorporated by reference to
Exhibit (8) (a) to Registrant's Post-Effective
Amendment No. 44, File No. 2-29858.

(8) (b) Transfer Agency and Service Agreement, incorporated
by reference to Exhibit (8) (b) to Registrant's Post-
Effective Amendment No. 44, File No. 2-29858.

(9) Not applicable.

(10) Opinion and Consent of Counsel (Reavis & McGrath),
incorporated by reference to Exhibit 10 to
Registrant's Post-Effective Amendment No. 35, File
No. 2-29858.

(11) Consent of Auditors.

(12) Not applicable.

(13) Not applicable.

(14) (a) Prototype Retirement Plan, incorporated by reference
to Exhibit (1) to Registrant's Post-Effective
Amendment No. 38, File No. 2-29858.

(14) (b) Individual Retirement Account, incorporated by
reference to Exhibit (ii) Registrant's Post-Effective
Amendment No. 38, File No. 2-29858.

(15) (a) Distribution Plan for Class A shares, as amended..

(15) (b) Distribution Plan for Class B shares, incorporated by
reference to Exhibit 15 (b) to Registrant's Post-
Effective Amendment No. 50, File No. 2-29858.

(15) (c) Distribution Plan for Class C shares, incorporated by
reference to Exhibit 15 (c) to Registrant's Post-
Effective Amendment No. 50, File No. 2-29858.

(16) Sample computation of average annual total return,
incorporated by reference to Exhibit (16) of
Registrant's Post-Effective Amendment No. 40, File
No. 2-29858.

(18) (a) Powers of Attorney, incorporated by reference to
Exhibit (18)(a) to Registrant's Post-Effective
Amendment No. 48, File No. 2-29858.

(18) (b) Plan pursuant to Rule 18f-3, as amended.

(18) (c) Power of Attorney for Eileen R. Street

<PAGE> 67
Item 25. Persons Controlled by or Under Common Control With Registrant
--------------------------------------------------------------

Not applicable

Item 26. Number of Holders of Securities
-------------------------------

<TABLE>
<CAPTION>
Number of Record Holders
Title of Class as of June 30, 1997
-------------- ------------------------
<S> <C>
Common Stock
Class A shares 68,421
Class B shares 42,982
Class C shares 11,999
Class Y shares 35
</TABLE>

Item 27. Indemnification
---------------

Registrant's Articles of Incorporation indemnifies its directors,
officers and employees to the full extent permitted by Section 2-418 of the
Maryland General Corporation Law, subject only to the provisions of the
Investment Company Act of 1940. The indemnification provisions of the
Maryland General Corporation Law (the "Law") permit, among other things,
corporations to indemnify directors and officers unless it is proved that the
individual (1) acted in bad faith or with active and deliberate dishonesty,
(2) actually received an improper personal benefit in money, property or
services, or (3) in the case of a criminal proceeding, had reasonable cause
to believe that his act or omission was unlawful. The Law was also amended to
permit corporations to indemnify directors and officers for amounts paid in
settlement of stockholders' derivative suits.

In addition, the Registrant's directors and officers are covered under
a policy to indemnify them for loss (subject to certain deductibles)
including costs of defense incurred by reason of alleged errors or omissions,
neglect or breach of duty. The policy has a number of exclusions including
alleged acts, errors, or omissions which are finally adjudicated or
established to be deliberate, dishonest, malicious or fraudulent or to
constitute willful misfeasance, bad faith, gross negligence or reckless
disregard of their duties in respect to any registered investment company.
This coverage is incidental to a general policy carried by the Registrant's
adviser.

In addition to the foregoing indemnification, Registrant's Articles of
Incorporation exculpate directors and officers with respect to monetary
damages except to the extent that an individual actually received an improper
benefit in money property or services or to the extent that a final
adjudication finds that the individual acted with active and deliberate
dishonesty.

Item 28. Business and Other Connections of Investment Adviser
----------------------------------------------------

The Investment Adviser of the Registrant, Davis Selected Advisers, L.P,
is also the investment adviser for Davis High Income Fund, Inc., Davis
Tax-Free High Income Fund, Inc., Davis Series, Inc., Davis International
Series, Inc., Selected American Shares, Inc., Selected Special Shares Inc. and
Selected Capital Preservation Trust. It also may engage as an investment
adviser for accounts other than mutual funds, although this is not presently
business of a substantial nature.

Shelby M.C. Davis is a Director, Chairman, Chief Executive Officer and
principal owner of Venture Advisers, Inc. (the "General Partner") and is a
Director of Shelby Cullom Davis Financial Consultants, Inc., 70 Pine Street,
New York, New York 10270.

<PAGE> 68
Item 29. Principal Underwriters
----------------------

(a) Davis Distributors, LLC, located at 124 East Marcy Street, Santa
Fe, NM 87501, is the principal underwriter for the Registrant also acts as
principal underwriter for Davis High Income Fund, Inc., Davis Tax-Free High
Income Fund, Inc., Davis Series, Inc. and Davis International Series, Inc.,
Selected American Shares, Inc., Selected Special Shares, Inc. and Selected
Capital Preservation Trust.

(b) Management of the General Partner of the Principal Underwriters

<TABLE>
<CAPTION>
Name and Principal Positions and Officers with Positions and Offices
Business Address General Partner of Underwriter with Registrant
- ------------------ ------------------------------ ---------------------
<S> <C> <C>
Shelby M.C. Davis
4135 North Steers Head Road
Jackson Hole, WY 83001 Director, Chairman and Chief Executive Officer President

Carolyn H. Spolidoro
142 East Marcy Street
Santa Fe, NM 87501 Vice President Vice President

Andrew A. Davis
124 East Marcy Street
Santa Fe, NM 87501 President Vice President

Christopher C. Davis
70 Pine Street, 43rd Floor
New York, NY 10270-0108 Director Vice President

Eileen R. Street
124 East Marcy Street
Santa Fe, NM 87501 Senior Vice President and Secretary Vice President and Treasurer

Sam P. Ynzunza
124 East Marcy Street
Santa Fe, NM 87501 Senior Vice President and General Counsel Vice President and Secretary
</TABLE>

<PAGE> 69
Item 30. Location of Accounts and Records
--------------------------------

Accounts and records are maintained at the offices of Davis Selected
Advisers, L.P., 124 East Marcy Street, Santa Fe, New Mexico 87501, and at
the offices of the Registrant's custodian, State Street Bank and Trust
Company, One Heritage Drive, North Quincy, Massachusetts 02107, and the
Registrant's transfer agent State Street Bank and Trust, c/o Service Agent,
BFDS, Two Heritage Drive, 7th Floor, North Quincy, Massachusetts 02107.

Item 31. Management Services
-------------------

Not applicable

Item 32. Undertakings
------------

Registrant undertakes to furnish each person to whom a prospectus is
delivered with a copy of Registrant's latest annual report to shareholders
upon request and without charge.
<PAGE> 70
DAVIS NEW YORK VENTURE FUND, INC.

SIGNATURES
----------

Registrant certifies that this Amendment meets all of the requirements
for effectiveness pursuant to Rule 485(b).

Pursuant to the requirements of the Securities Act of 1933 and/or the
Investment Company Act of 1940, the Registrant has caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Chicago and State of Illinois on the 31st day of
July, 1996.

DAVIS NEW YORK VENTURE FUND, INC.

<F*>By: /s/ Sheldon R. Stein
--------------------
Sheldon R. Stein,

Attorney-in-Fact

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.

<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----

<S> <C> <C>
Shelby M.C. Davis<F*> President, (Chief Executive Officer) July 31, 1997
- -----------------
Shelby M.C. Davis

Eileen R. Street<F*> Principal Financial Officer and Treasurer July 31, 1997
- ----------------
Eileen R. Street

<F*>By: /s/ Sheldon R. Stein
--------------------
Sheldon R. Stein,
Attorney-in-Fact
<FN>

<F*>Sheldon R. Stein signs this document on behalf of the Registrant and
the foregoing officers pursuant to the powers of attorney filed as Exhibit
(18)(a) to Registrant's Post Effective Amendment No. 48 and Exhibit 18(c) to
this Registration Statement.
</TABLE>

<PAGE> 71
DAVIS NEW YORK VENTURE FUND, INC.

Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment has been signed on July 31, 1997 by the following
persons in the capacities indicated.

Signature Title
--------- -----
<S> <C>
Wesley E. Bass. Jr.<F*> Director
- -------------------------
Wesley E. Bass, Jr.

Jeremy H. Biggs<F*> Director
- -------------------------
Jeremy H. Biggs

Marc P. Blum<F*> Director
- -------------------------
Marc P. Blum

Eugene M. Feinblatt<F*> Director
- -------------------------
Eugene M. Feinblatt

Jerry D. Geist<F*> Director
- -------------------------
Jerry D. Geist

D. James Guzy<F*> Director
- -------------------------
D. James Guzy

G. Bernard Hamilton<F*> Director
- -------------------------
G. Bernard Hamilton

LeRoy E. Hoffberger<F*> Director
- -------------------------
LeRoy E. Hoffberger

Laurence W. Levine<F*> Director
- -------------------------
Laurence W. Levine

Christian R. Sonne<F*> Director
- -------------------------
Christian R. Sonne

Edwin R. Werner<F*> Director
- -------------------------
Edwin R. Werner

<FN>
<F*>Sheldon R. Stein signs this document on behalf of each of the
foregoing persons pursuant to the powers of attorney filed as Exhibit 18(a)
to Registrant's Post-Effective Amendment No. 48.

/s/Sheldon R. Stein
-------------------
Sheldon R. Stein
Attorney-in-Fact
</TABLE>

<PAGE> 1

EXHIBIT 1(b)

DAVIS NEW YORK VENTURE FUND, INC.
ARTICLES SUPPLEMENTARY
TO
ARTICLES OF INCORPORATION PURSUANT
TO SECTIONS 2-208 AND 2-208.1 OF THE MARYLAND
GENERAL CORPORATION LAW

Davis New York Venture Fund, Inc., a Maryland corporation, having its
principal office in Baltimore, Maryland, hereby certifies to the State
Department of Assessment and Taxation of Maryland that:

FIRST: Prior to the designation and reclassification of the common
stock of the corporation, the corporation had a total of 1,000,000,000
shares, $.05 par value per share, 200,000,000 of which are unclassified,
350,000,000 of which are classified as Class A Common Stock, 350,000,000 of
which are classified as Class B Common Stock and 100,000,000 of which are
classified as Class C Common Stock, each a par value of $.05 a share. The
aggregate par value of all the authorized stock is $50,000,000 of which
$10,000,000 is unclassified and $40,000,000is classified.

SECOND: The Articles of Incorporation are hereby supplemented by (I)
changing the description of certain items and conditions under which the
classes of stock may be issued, (ii) reclassifying 50,000,000 shares of the
authorized and unissued shares of each of the Class A Common Stock and Class
B Common Stock as Class Y Common Stock and, (iii) designating 50,000,000
shares of the authorized and unissued stock as Class Y Common Stock, all with
$.05 par value per share.

THIRD: The Class A Common Stock, Class B Common Stock, Class C Common
Stock and Class Y Common Stock shall represent investment in the same pool of
assets and shall have the same preferences, conversion and other rights,
voting powers, restrictions, limitations as to dividends, qualifications, and
terms and conditions of redemption except as set forth in the Articles of
Incorporation of the Corporation and as set forth below:

Expenses related to the distribution of each class of stock and such other
expenses as may be permitted by rule or order of the Securities and Exchange
Commission and as the Board of Directors shall deem appropriate shall be
borne solely by each class, and the bearing of such expenses shall be
appropriately reflected (in the manner determined by the Board of Directors)
in the net asset value, dividends, distribution and liquidation rights of the
shares of such Class;

The Class A Common Stock may be subject to a front-end load and a Rule 12b-1
distribution fee as determined by the Board of Directors from time to time
prior to issuance of such stock and, in addition, the Class A Common Stock
issued after filing of these Articles may also be subject to a contingent
deferred sales charge, as determined by the Board of Directors from time to
time prior to issuance of such stock;

The Class B Common Stock may be sold without a front-end sales load and may
be subject to a contingent deferred sales charge and a Rule 12b-1
distribution fee as determined by the Board of Directors from time to time
prior to the issuance of such stock and shall be converted to Class A Common
Shares at the end of eight (8) years after purchase or such earlier period as
determined by the Board of Directors giving effect to reciprocal exchange
privileges;
<PAGE> 2
The Class C Common Stock may be sold without a front-end sales load and may
be subject to a contingent deferred sales charge and to a Rule 12b-1
distribution fee as determined by the Board of Directors from time to time
prior to issuance of such stock;

The Class Y Common Stock may be sold without a front-end sales load or
contingent deferred sales charge and without a Rule 12b-1 distribution fee;

Each class shall vote separately on matters pertaining only to that class, as
the Board of Directors shall from time to time determine, and;

Nothing herein shall prohibit the imposition of a redemption fee or exchange
fee upon any Class.

FOURTH: Immediately following the designation and reclassification of stock,
the Corporation will have a total of 1,000,000,000 shares, $.05 par value per
share, 150,000,000 of which will be unclassified, 300,000,000 of which shall
be classified as Class A Common Stock, 300,000,000 of which shall be
classified as Class B Common Stock, 100,000,000 of which shall be classified
as Class C Common Stock and 150,000,000 shall be classified as Class Y Common
Stock, each with a par value of $.05 per share. The aggregate par value of
all the shares is $50,000,000 of which $7,500,000 unclassified and$42,500,000
is classified.

FIFTH: The stock of the Corporation has been classified by the Board of
Directors of the Corporation in accordance with and pursuant to Article
FIFTH, Section (b) of the Articles of Incorporation of the Corporation.

SIXTH: The Corporation is registered as an open-end investment company with
the Securities and Exchange Commission pursuant to the Investment Company Act
of 1940.

SEVENTH: The Board of Directors duly adopted a resolution (I) re-designating
the preferences of the classes of Common Stock issued after the filing of
these articles; (ii) reclassifying 50,000,000 shares of the authorized and
unissued shares of each of the Class A Common Stock and Class B Common Stock
as Class Y Common Stock; and (iii) designating 50,000,000 shares of the
authorized and unissued stock of the corporation as Class Y Common Stock on
July 29, 1996.

EIGHTH: The effective date of these Articles Supplementary shall be September
1, 1996.
<PAGE> 3

IN WITNESS THEREOF, Davis New York Venture Fund, Inc. has caused these
presents to be signed in its name and on its behalf by its Vice President and
witnessed by its Secretary on August 18, 1996.

DAVIS NEW YORK VENTURE FUND, INC.

By:
------------------------------------
Carl R. Luff, Vice President

ATTEST:

_______________________________
Raymond O. Padilla, Secretary

THE UNDERSIGNED, The Vice President of Davis New York Venture Fund,
Inc., who executed on behalf of said Corporation the foregoing Articles
Supplementary to the Charter, of which this certificate is made a part,
hereby acknowledges, in the name and on behalf of said Corporation, foregoing
Articles Supplementary to the Charter to be the corporate act of said
Corporation, and further certifies that, to the best of his knowledge,
information and belief, the matters and facts set forth therein with respect
to the approval thereof are true in all material respects under the penalties
of perjury.

DATED: August 28, 1996

_________________________________
Carl R. Luff, Vice President

<PAGE> 1

EXHIBIT 6(b)

TRANSFER AND ASSUMPTION

THIS TRANSFER AND ASSUMPTION is entered into as of June 1, 1997
by and among Davis Selected Advisors, L.P., a Colorado limited partnership
(the "Transferor"), Davis Distributors, L.L.C., a Delaware limited liability
company (the "Transferee") and Davis New York Venture Fund, Inc. ("DNYVF"), a
Maryland corporation.

WHEREAS, this Transferor is the sole member of the Transferee and
controls and manages the business of the Transferee; and

WHEREAS, the Transferor was organized to assume and continue the
distribution services business with respect to the investment companies for
which the Transferor serves as investment advisor; and

WHEREAS, the Transferor has entered into a Distributing Agreement
(the "Agreement") dated April 15, 1993 with DNYVF, pursuant to which the
Transferor serves as distributor of shares of capital stock of DNYVF;

NOW THEREFORE, the parties hereto agree as follows:

The Transferor hereby transfers unto the Transferee all of its rights,
obligations and liabilities under the Agreement.

The Transferee, in consideration of the transfer to it of all Transferor's
rights, obligations and liabilities under the Agreement, hereby accepts and
assumes such rights, obligations and liabilities.

All references to Transferor in the Agreement shall, as of June 1, 1997, be
deemed to refer to the Transferee.

DNYVF hereby acknowledges and approves this transfer and agrees that, as of
June 1, 1997, the transferee shall be the other party to the Agreement in
lien of the Transferor

IN WITNESS THEREOF, the undersigned have caused this Transfer and Assumption
to be executed on their behalf as of the date written above.

DAVIS SELECTED ADVISERS, L.P. DAVIS NEW YORK VENTURE FUND, INC.
By: Venture Advisers, Inc.
General Partner

By:_____________________ By:______________________________

DAVIS DISTRIBUTORS, LLC

By:______________________________

<PAGE> 1

Exhibit 11

CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

We consent to the reference to our firm in the Registration Statement, (Form
N-1A), and related Statement of Additional Information of Davis New York
Venture Fund, Inc. and to the inclusion of our report dated August 29, 1996
to the Shareholders and Board of Directors of Davis New York Venture Fund,
Inc.

/s/ Tait, Weller & Baker
Tait, Weller & Baker

Philadelphia, Pennsylvania
July 30, 1997

<PAGE> 1

EXHIBIT 15(a)

DAVIS FUNDS
MASTER RULE 12b-1 DISTRIBUTION PLAN
FOR CLASS A SHARES

The Plan:

Purpose. The Company shall finance the distribution of its Class A shares
pursuant to Rule 12b-1 under the Investment Company Act of 1940 ("Act")
according to the terms of this Distribution Plan (the "Plan").

Fees. Amounts, not exceeding in the aggregate a maximum annual amount equal
to 0.25% of the average of the daily net asset values of the Class A shares
of the Company during each fiscal year of the Company, may be paid quarterly
by the Company to the Distributor out of the assets attributable to such
shares at any time after the effective date of the Plan to: (1) reimburse the
Distributor for fees paid to its salespersons and to other firms which offer
and sell the Company's shares and/or provide servicing and maintenance of
shareholder accounts and (ii) reimburse the Distributor its other
distribution expenses, after application of the Distributor's portion of
sales charges incurred in the connection with the distribution of Company
shares, excluding overhead expense and including expenses of promotion, sales
seminars, wholesaling, advertising and sales literature. For this purpose
sales literature shall not include reports sent to shareholders regulatory
bodies which are paid for by the Company.

To the extent that any investment advisory fees paid by the Company may be
deemed to be indirectly financing any activity which is primarily intended to
result in the sale of shares of the Company within the meaning of Rule 12b-1,
the payments of such fees are authorized under this Plan.

Required Approvals and Term. Subject to paragraph 8, the Plan shall not take
effect until it has been approved by the vote of at least a majority (as
defined in the Act) of the outstanding Class A shares of the Company. In
addition, the Plan shall not take effect until it has been approved, together
with any related agreements, by votes of the majority of both (I) the Board
of Directors of the Company and (ii) those directors of the Company who are
not "interested persons" of the Company as defined in the Act and who have no
direct or indirect financial interest in the operation of the Plan or any
agreements related to it ("Independent Directors", cast in person at a
meeting called for the purpose of voting on the Plan or such Agreements.
Unless sooner terminated pursuant to the terms hereof, the Plan shall
continue in effect for a period of one year from its effective date, and
thereafter shall continue in effect so long as such continuance is
specifically approved at least annually in the manner provided for by Rule
12b-1 under the Act.

Periodic Reports. Any person authorized to direct the disposition of monies
paid or payable by the Company pursuant to the Plan or any related agreement
shall provide to the Company's Board of Directors, and the Board of Directors
shall review at least quarterly, a written report of the amounts so expended
and the purposes for which such expenditures were made.

Termination. Subject to paragraph 8, the Plan may be terminated at any time
by a vote of a majority of the Independent Directors, or by a majority vote
of the outstanding Class A shares.
<PAGE> 2
Related Agreements. Any agreement related to the Plan shall be in writing,
and shall provide:

That such agreement may be terminated at any time, without payment of
penalty, by a vote of a majority of the Independent Directors or by a
majority vote of the Class A shares on not more than 60 days written notice
to any other party to the agreement; and

That such agreement shall terminate automatically in the event of its
assignment.

Amendments. The Plan may not be amended to increase materially the amount of
distribution expenses provided for in paragraph 2 unless such amendment is
approved in the manner provided for in paragraph 3, and no material amendment
to the Plan shall be made unless approved by the Board of Directors and the
Independent Directors. Special Procedures for Series Company. If the Company
is or becomes a series company (as defined in Rule 18f-2 under the Act), then
the Plan shall not take effect as to the Class A shares of any series and no
amendment may be effected to increase materially the amount of distribution
expenses as to the Class A shares of any series until it has been approved by
the Board of Directors, the Independent Directors and the Class A shareholders
of such series in the manner provided in paragraph 3; and no material
amendment to the Plan in respect to such shares shall be made unless approved
as to such shares by the Board of Directors and Independent Directors. The
Plan may be terminated as to any series at any time by a majority vote of the
Independent Directors and by a majority vote of the Class A shareholders of
the series.

<PAGE> 1

Exhibit 18(b)

Davis New York Venture Fund, Inc.
Plan Pursuant to Rule 18f-3, as amended
---------------------------------------

Registrant elects to offer different classes of shares of its common stock
pursuant to Rule 18f-3 under the following Plan.

1. Registrant's current Plan encompasses four classes of shares that
may be offered as follows:

(a) Class A shares with a front end sales charge ("FESC") subject to
certain exceptions, a contingent deferred sales charge ("CDSC") under certain
circumstances, and to Rule 12b-1 fees ("Rule 12b-1 fees"). The applicable
FESC, including reductions and exceptions, application of the CDSC and the
Rule 12b-1 fees are set forth in Exhibits "A" and "E" attached hereto.

(b) Class B shares at net asset value subject to (i) Rule 12b-1 fees
and (ii) a CDSC for redemptions or repurchases by the Registrant effected
within a certain period of time not exceeding eight years from the date of
purchase. Class B shares outstanding will automatically convert to Class A
shares within eight years after the end of the month in which the shares were
purchased. (However, for shares purchased before December 1, 1994 which are
represented by stock certificates, the stock certificates must be returned to
the transfer agent to effect conversion.) In addition, certain Class B
shares held by certain defined contribution plans automatically convert to
Class A shares based on increases of plan assets. The deferred sales
charges, conversion and Rule 12b-1 fees are as set forth in Exhibits "B" and
"E" attached hereto.

(c) Class C shares at net asset value subject to a fee upon
redemption within one year of purchase and Rule 12b-1 fees. The terms and
conditions of the Class C shares are as set forth in Exhibits "C" and "E"
attached hereto.

(d) Class Y shares at net asset value with no Rule 12b-1 charges.
Class Y shares are available only to certain types of investors as defined in
Exhibit "D" attached hereto.
<PAGE> 2
(e) Exchange Privileges: The exchange privileges are set forth in
Exhibit "F" hereto. In summary, for a nominal exchange fee, shares of a
class may be exchanged for shares of the same class of certain other
registrants with the same investment adviser or distributor (or any series
issued by such registrants) at net asset value except that: (i) Any shares
issued in exchange for shares still subject to any unpaid FESC or CDSC or
other charge payable upon redemption remain subject to such unpaid charges;
(ii) Money market series Class A shares which were initially purchased from
the money market series may be exchanged for any class of shares at the
public offering price of the acquired shares (which may include a sales
charge) and are subject to any CDSC or other charge upon redemption normally
applicable to the acquired shares; and (iii) Class A shareholders who are
eligible to purchase Class Y shares may exchange their shares for Class Y
shares of the Fund.

2. Income, realized and unrealized capital gains and losses and
expenses not allocated to a particular class are allocated to each class on
the basis of relative net assets.

Expenses allocable to a specific class are expenses specifically
incurred for such class including the following:

(a) Rule 12b-1 expenses
(b) Incremental transfer agency expenses
(c) Incremental costs of preparing, printing and mailing shareholder
reports, proxy materials and prospectuses related to such class
(d) Registration fees and other expenses of registration of the
shares of such class under laws or regulations of any jurisdiction in which
the class of shares is to be offered
(e) Directors' fees and expenses incurred as a result of issues
relating solely to such class
(f) Legal and accounting expenses relating solely to such class.

3. Each class will vote separately with respect to any matter as
required by applicable law or which separately affects that class. As
provided in the Articles of Incorporation, each dollar of net asset value per
share is entitled to one vote.

2
<PAGE> 3
Exhibit A

CLASS A SHARES. Class A shares are sold at their net asset value
plus a sales charge. The amounts of the sales charges are shown in the
following table.

<TABLE>
<CAPTION>
Customary
Sales Charge Charge as Concession to Your
as Percentage Approximate Percentage Dealer as Percentage
Amount of Purchase of Offering Price of Amount Invested of Offering Price
- ------------------ ----------------- ------------------ -----------------
<S> <C> <C> <C>
$99,999 or less 4-3/4% 5.0% 4%
$100,000 to $249,999 3-1/2% 3.6% 3%
$250,000 to $499,999 2-1/2% 2.6% 2%
$500,000 to $749,999 2% 2.0% 1-3/4%
$750,000 to $999,999 1% 1.0% 3/4 of 1%
$1,000,000 or more 0% 0.0% 0%<F*>

<FN>
<F*> On purchases of $1 million or more, the investor pays no front-end sales
charge but a contingent deferred sales charge of 0.75% may be imposed if
shares purchased after August 1, 1997 are redeemed within the first year
after purchase. The Distributor may pay the financial service firm a
commission during the first year after such purchase at an annual rate as
follows:

<CAPTION>
Purchase Amount Commission
--------------- ----------
<S> <C>
First $3,000,000 .75%
Next $2,000,000 .50%
Over $5,000,000 .25%

Where a commission is paid for purchases of $1 million or more, such payment
will be made from 12b-1 distribution fees received from the Fund and, in
cases where the limits of the distribution plan in any year have been
reached, from the Distributor's own resources.
</TABLE>

There are a number of ways to reduce the sales charge on the purchase
of Class A shares, as set forth below.

(i) Family Purchases: Purchases made by an individual, such
individual's spouse and children under 21 are combined and treated as a
purchase of a single person.

3
<PAGE> 4
(ii) Group Purchases: The purchases of an organized group, whether or
not incorporated, are combined and treated as the purchase of a single
person. The organization must have been organized for a purpose other than
to purchase shares of mutual funds.

(vi) Combined Purchases with other Davis Funds: Purchases of Class A
shares of the Fund may be combined with your purchases of Class A shares of
other Davis Funds, including Davis High Income Fund, Inc., Davis Tax-Free
High Income Fund, Inc., Davis International Series, Inc. and all funds
offered by Davis Series, Inc. (other than Davis Government Money Market
Fund), separately or under combined Statements of Intention or rights of
accumulation to determine the price applicable to your purchases of Class A
shares of the Fund.

4
<PAGE> 5

officers and any spouse, child, parent, grandparent, brother or sister
("immediate family members") of all of the foregoing, and any employee benefit
or payroll deduction plan established by or for such persons; (3) Class A
shares purchased by any registered representatives, principals and employees
(and any immediate family member) of securities dealers having a sales
agreement with the Distributor; (4) initial purchases of Class A shares
totaling at least $250,000 but less than $5,000,000, made at any one time by
banks, trust companies and other financial institutions on behalf of one or
more clients for which such institution acts in a fiduciary capacity; (5) Class
A shares purchased by any single account covering a minimum of 250 participants
(this 250 participant minimum may be waived for certain fee based mutual fund
marketplace programs) and representing a defined benefit plan, defined
contribution plan, cash or deferred plan qualified under 401(a) or 401(k) of
the Internal Revenue Code or a plan established under section 403(b), 457 or
501(c)(9) of such Code or "rabbi trusts"; (6) Class A shares purchased by
persons participating in a "wrap account" or similar fee-based program
sponsored and maintained by a registered broker-dealer approved by the Fund's
Distributor or by investment advisors or financial planners who place trades
for their own accounts or the accounts of their clients and who charge a
management, consulting or other fee for their services; and clients of such
investment advisors or financial planners who place trades for their own
accounts if the accounts are linked to the master account of such investment
advisor or financial planner on the books and records of the broker or agent;
and (7) Class A shares amounting to less than $5,000,000 purchased by any
state, county, city, department, authority or similar agency. Investors may
be charged a fee if they effect purchases in fund shares through a broker or
agent. The Fund may also issue Class A shares at net asset value incident to
a merger with or acquisition of assets of an investment company.

5
<PAGE> 6
Exhibit B

CLASS B SHARES. Class B shares are offered at net asset value,
without a front-end sales charge. With certain exceptions described below,
the Fund imposes a deferred sales charge of 4% on shares redeemed during the
first year after purchase, 3% on shares redeemed during the second or third
year after purchase, 2% on shares redeemed during the fourth or fifth year
after purchase and 1% on shares redeemed during the sixth year after
purchase. However, on Class B shares of the Fund which are acquired upon
exchange from Class B shares of other Davis Funds which were purchased prior
to December 1, 1994, the Fund will impose a deferred sales charge of 4% on
shares redeemed during the first calendar year after purchase; 3% on shares
redeemed during the second calendar year after purchase; 2% on shares
redeemed during the third calendar year after purchase; and 1% on shares
redeemed during the fourth calendar year after purchase, and no deferred
sales charge is imposed on amounts redeemed after four calendar years from
purchase. Class B shares will be subject to a maximum Rule 12b-1 fee at the
annual rate of 1% of the class' average daily net asset value. The Fund will
not accept any purchase of Class B shares in the amount of $250,000 or more
per investor.

Class B shares that have been outstanding for eight years will
automatically convert to Class A shares without imposition of a front-end
sales charge. The Class B shares so converted will no longer be subject to
the higher expenses borne by Class B shares. Because the net asset value per
share of the Class A shares may be higher or lower than that of the Class B
shares at the time of conversion, although the dollar value will be the same,
a shareholder may receive more or less Class A shares than the number of
Class B shares converted. Under the Funds' private Internal Revenue Service
Ruling, such a conversion will not constitute a taxable event under the
federal income tax law. In the event that this ceases to be the case, the
Board of Directors will consider what action, if any, is appropriate and in
the best interests of the Class B shareholders. In addition, certain Class B
shares held by certain defined contribution plans automatically convert to
Class A shares based on increases of plan assets as described in the
Statement of Additional Information.

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Exhibit C

CLASS C SHARES. Class C shares are offered at net asset value
without a sales charge at the time of purchase. Class C shares redeemed
within one year of purchase will be subject to a 1% charge upon redemption.
Class C shares do not have a conversion feature. The Fund will not accept
any purchases of Class C shares when Class A shares may be purchased at net
asset value.

The Distributor will pay a commission to the firm responsible for the
sale of Class C shares. No other fees will be paid by the Distributor during
the one-year period following purchase. The Distributor will be reimbursed
for the commission paid from 12b-1 fees paid by the Fund during the one-year
period. If Class C shares are redeemed within the one-year period after
purchase, the 1% redemption charge will be paid to the Distributor. After
Class C shares have been outstanding for more than one year, the Distributor
will make quarterly payments to the firm responsible for the sale of the
shares in amounts equal to 0.75% of the annual average daily net asset value
of such shares for sales fees and 0.25% of the annual average daily net asset
value of such shares for service and maintenance fees.

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Exhibit D

CLASS Y SHARES. Currently, Class Y shares are offered to (i) trust
companies, bank trusts, endowments, pension plans or foundations acting on
behalf of their own account or one or more clients for which such institution
acts in a fiduciary capacity and investing at least $5,000,000 at any one
time; (ii) any state, county, city, department, authority or similar agency
prohibited by law from paying a sales charge which invests at least
$5,000,000; and (iii) any investor with an account established under a "wrap
account" or other similar fee-based program sponsored and maintained by a
registered broker-dealer approved by the Fund's Adviser ("Wrap Program
Investors").

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Exhibit E

CONTINGENT DEFERRED SALES CHARGES. Any contingent deferred sales
charge imposed upon the redemption of Class A, Class B or Class C shares is a
percentage of the lesser of (i) the net asset value of the shares redeemed or
(ii) the original cost of such shares. No contingent deferred sales charge
is imposed when you redeem amounts derived from (a) increases in the value of
shares redeemed above the net cost of such shares or (b) certain shares with
respect to which the Fund did not pay a commission on issuance, including
shares acquired through reinvestment of dividend income and capital gains
distributions. Upon request for redemption, shares not subject to the
contingent deferred sales charge will be redeemed first. Thereafter, shares
held the longest will be the first to be redeemed.

The contingent deferred sales charge (CDSC) on Class A, B, and C Shares
that are subject to a CDSC will be waived if the redemption relates to the
following: (a) in the event of the total disability (as evidenced by a
determination by the federal Social Security Administration) of the
shareholder (including registered joint owner) occurring after the purchase
of the shares being redeemed; (b) in the event of the death of the
shareholder (including a registered joint owner); (c) for redemptions made
pursuant to an automatic withdrawal plan in an amount, on an annual basis, up
to 12% of the value of the account at the time the shareholder elects to
participate in the automatic withdrawal plan; (d) for redemptions from a
qualified retirement plan or IRA that constitute a tax-free return of
contributions to avoid tax penalty; (e) on redemptions of shares sold to
directors, officers and employees of any fund for which the Adviser acts as
investment adviser or officers and employees of the Adviser, Sub-Adviser or
Distributor including former directors and officers and immediate family
members of all of the foregoing, and any employee benefit or payroll
deduction plan established by or for such persons; (f) on redemptions
pursuant to the right of the Fund to liquidate a shareholder's account if the
aggregate net asset value of the shares held in such account falls below an
established minimum amount; (g) certain other exceptions related to defined
contribution plans as described in the Statement of Additional Information.

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Exhibit F

Exchange Privileges

Shares of a particular class of the Fund may be exchanged only for
shares of the same class of another Davis Fund except that Class A
shareholders who are eligible to purchase Class Y shares may exchange their
shares for Class Y shares of the Fund. All of the Davis Funds offer Class A,
Class B and Class C shares. The shares to be received upon exchange must be
legally available for sale in your state. The net asset value of the initial
shares being acquired must be at least $1,000 unless such exchange is under
the Automatic Exchange Program described below.

Shares may be exchanged at relative net asset value without any
additional charge. However, if any shares being exchanged are subject to an
escrow or segregated account pursuant to the terms of a Statement of
Intention or a CDSC, such shares will be exchanged at relative net asset
value, but the escrow or segregated account will continue with respect to the
shares acquired in the exchange. In addition, the terms of any CDSC, or
redemption fee, to which any Class B or Class C shares are subject at the
time of exchange will continue to apply to any shares acquired upon exchange.

Before you decide to make an exchange, you must obtain the current
prospectus of the desired fund. Call your broker or the Distributor for
information and a prospectus for any of the other Davis Funds registered in
your state. Read the prospectus carefully. If you decide to exchange your
shares, send State Street a written unconditional request for the exchange
and follow the instructions regarding delivery of share certificates
contained in the section on "Redemption of Shares". A signature guarantee is
not required for such an exchange. However, if shares are also redeemed for
cash in connection with the exchange transaction, a signature guarantee may
be required. See "Redemption of Shares". Your dealer may charge an
additional fee for handling an exercise of the exchange privilege.

AUTOMATIC EXCHANGE PROGRAM. The Fund also offers an automatic

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monthly exchange program. All accounts established or utilized under this
program must have the same registration and a minimum initial value of at
least $250. All subsequent exchanges must have a value of at least $25.
Each month, shares will be simultaneously redeemed and purchased at the
chosen Davis Fund's applicable offering price. If you would like to
participate in this program, you may use the appropriate designation on the
Application Form.

An exchange involves both a redemption and a purchase, and normally
both are done on the same day. However, in certain instances such as where a
large redemption is involved, the investment of redemption proceeds into
shares of other Davis Funds may take up to seven days. For federal income
tax purposes, exchanges between funds are treated as a sale and purchase.
Therefore, there will usually be a recognizable capital gain or loss due to
an exchange. An exchange between different classes of the same fund is not a
taxable event.

<PAGE> 1
Exhibit 18(c)

DAVIS NEW YORK VENTURE FUND, INC.

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes and
appoints Shelby M.C. Davis, Samuel P. Ynzunza, Sheldon R. Stein and Arthur
Don, and each of them, her attorneys-in-fact, each with the power of
substitution, for her in any and all capacities, to sign any post-effective
amendments to the registration statement under the Securities Act of 1933
(Registration No. 2-29858) and/or the Investment Company Act of 1940
(Registration No. 811-1701), whether on Form N-1A or any successor forms
thereof, and to file the same, with exhibits thereto and other documents in
connection therewith, with the Securities and Exchange Commission and all
appropriate state or federal regulatory authorities. The undersigned hereby
ratifies and confirms all that each of the aforenamed attorneys-in-fact, or
her substitute or substitutes, may do or cause to be done by virtue hereof.

IN WITNESS WHEREOF, the undersigned have executed this Power of
Attorney as of the 30th day of July, 1997.

/s/ Eileen R. Street
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Eileen R. Street, Treasurer