Fund for Tax-Free Investors, Inc.
4922 Fairmont Avenue
Bethesda, Maryland 20814
To the Board of Directors of Fund for Tax-Free
Investors, Inc:
We are the auditors of Fund for Tax-Free Investors,
Inc. (the Fund), a series investment company
comprised of three portfolios, the Money Market,
Virginia, and Maryland portfolios (the Portfolios).
Rushmore Trust and Savings, FSB (Rushmore Trust), a
related entity, is custodian of all of the Fund's
portfolios and the Fund is therefore subject to the
provisions of Rule 17f-2 under the Investment
Company Act of 1940. Accordingly, we have, without
prior notice to the Fund or to Rushmore Trust,
accounted for the Portfolios' investment securities
held by Rushmore Trust as of the close of business
on June 29, 1998. It is understood that this report
is solely for the use of management and for the
information of the Securities and Exchange Commission
and should not be used for any other purpose.
Rushmore Trust, in addition to acting as custodian
for the Portfolios, is custodian for other customers.
Agents of Rushmore Trust hold, or account for by book
entry, securities that are the responsibility of
Rushmore Trust through custodial or trust agreements.
Securities held by agents of Rushmore Trust, while
identified by such agents as being deposited by
Rushmore Trust, cannot be identified by such agents
as to the specific customers of Rushmore Trust who
have securities included in such deposits.
Rushmore Trust confirmed to us that the portfolio
securities owned by the Fund on June 29, 1998 were
held for the account of Rushmore Trust by Mellon
Bank, N.A. (Mellon), as agent for Rushmore Trust.
We obtained confirmation from Mellon of the
securities held for the account of Rushmore Trust
as of June 29, 1998. We reviewed Rushmore Trust's
reconciliation of Mellon's confirmation to Rushmore
Trust's internal records, identifying securities
held by Mellon as a part of Rushmore Trust's
aggregate security position with Mellon. We also
reviewed Rushmore Trust's records that show the
owners of the securities held by Mellon for the
account of the Rushmore Trust at June 29, 1998.
We determined that these securities, identified
by such records as the property of the Fund's
Portfolios, were in agreement with the Fund's
records of securities owned at June 29, 1998. In
addition, a broker confirmed to us the purchase
outstanding at June 29, 1998, which was in
agreement with the Portfolios' records. We also
agreed an analysis of portfolio transactions
recorded subsequent to January 20, 1998, the date
of our most recent examination of the Fund's
securities required under Rule 17f-2, in the
investment accounts to supporting records and
verified a sample of portfolio security
transactions to supporting records and
documentation.
Because the above procedures were not sufficient
to constitute an audit conducted in accordance
with generally accepted auditing standards, we
do not express an opinion on the investment
accounts referred to above as of the dates
indicated. In connection with the procedures
referred to above, no matters came to our
attention that caused us to believe that the
specified accounts should be adjusted. Had we
performed additional procedures or had we
conducted an audit of the financial statements
of the Fund in accordance with generally accepted
auditing standards, matters might have come to
our attention that would have been reported to
you. This report relates only to the investments
specified above and does not extend to the
financial statements of the Fund, taken as a
whole for any date or period.
Deloitte & Touche LLP
Princeton, New Jersey
August 7, 1998
