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 accounted for the Portfolios' investment securities
held by Rushmore Trust as of the close of business on December 31, 1997.
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 which are the responsibility of
Rushmore Trust through custodian 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 December 31, 1997 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 December 31, 1997. 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 which
show the owners of the securities held by Mellon for the account of the
Rushmore Trust at December 31, 1997. We determined that 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 December 31, 1997.
In addition, a broker confirmed to us a purchase outstanding at December 31,
1997, which was in agreement with the Fund's records. We also agreed an
analysis of portfolio transactions recorded subsequent to September 16, 1997,
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 made
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 made 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
January 23, 1998
Fund for Tax-Free Investors
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