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SIGNATURE CATHY WHITE
TITLE VICE PRESIDENT
Report of Independent Auditors
To the Shareholders and Board of Directors of
Alliance Mortgage Securities Income Fund, Inc.
In planning and performing our audit of the financial statements of Alliance
Mortgage Securities Income Fund, Inc. for the year ended December 31, 1997, we
considered its internal control, including control activities for safeguarding
securities, in order to determine our auditing procedures for the purpose of
expressing our opinion on the financial statements and to comply with the
requirements of Form N-SAR, not to provide assurance on the internal control.
The management of Alliance Mortgage Securities Income Fund, Inc. is
responsible for establishing and maintaining internal control. In fulfilling
this responsibility, estimates and judgments by management are required to
assess the expected benefits and related costs of controls. Generally,
controls that are relevant to an audit pertain to the entity's objective of
preparing financial statements for external purposes that are fairly presented
in conformity with generally accepted accounting principles. Those controls
include the safeguarding of assets against unauthorized acquisition, use or
disposition.
Because of inherent limitations in internal control, errors or fraud may occur
and not be detected. Also, projection of any evaluation of internal control
to future periods is subject to the risk that it may become inadequate because
of changes in conditions or that the effectiveness of the design and operation
may deteriorate.
Our consideration of the internal control would not necessarily disclose all
matters in the internal control that might be material weaknesses under
standards established by the American Institute of Certified Public
Accountants. A material weakness is a condition in which the design or
operation of one or more of the internal control components does not reduce to
a relatively low level the risk that errors or fraud in amounts that would be
material in relation to the financial statements being audited may occur and
not be detected within a timely period by employees in the normal course of
performing their assigned functions. However, we noted no matters involving
the internal control and its operation, including controls for safeguarding
securities, that we consider to be material weaknesses as defined above at
December 31, 1997.
This report is intended solely for the information and use of the board of
directors and management of Alliance Mortgage Securities Income Fund, Inc. and
the Securities and Exchange Commission.
ERNST & YOUNG LLP
January 30, 1998
77.C)
Copy of Notice of Meeting, Proxy Statement and Proxy Card was filed by
the Registrant - Incorporated by reference as DEF 14A on December 10,
1997 - File Nos. 2-85921 and 811-3829).
77.I)
In 1996, the Fund issued a new class of shares, Adviser Class
shares. Adviser Class shares, along with Class A, Class B, Class C
shares each represent an interest in the same portfolio of investments
of the Fund, have the same rights and are identical in all respects,
except that (i) Class A shares bear the expense of the initial sales
charge (or contingent deferred sales charge, when applicable) and Class
B and Class C shares bear the expense of the deferred sales charge, (ii)
Class B shares and Class C shares each bear the expense of a higher
distribution services fee than that borne by Class A shares, and Advisor
Class shares do not bear such a fee, (iii) Class B and Class C shares
bear higher transfer agency costs than that borne by Class A and Advisor
Class shares; (iv) each of Class A, Class B and Class C has exclusive
voting rights with respect to provisions of the Rule 12b-1 Plan pursuant
to which its distribution services fee is paid and other matters for
which separate class voting is appropriate under applicable law,
provided that, if the Fund submits to a vote of the Class A
shareholders, an amendment to the Rule 12b-1 Plan that would materially
increase the amount to be paid thereunder with respect to the Class A
shares, then such amendment will also be submitted to the Class B and
Advisor Class shareholders and the Class A, the Class B and the Advisor
Class shareholders will vote separately by class; and (v) Class B and
Advisor Class shares are subject to a conversion feature. Each class
has different exchange privileges and certain different shareholder
service options available.
77.Q1
(1)(a) Copy of Articles of Incorporation of the Registrant -
Incorporated by reference (filed as Exhibit 1(a) to Post-Effective
Amendment No. 30 of Registration Statement on Form N-1A, filed October
31, 1997 - File Nos. 2-85921 and 811-3829).
Copy of existing By-Laws of the Registrant - Incorporated by reference
(filed as Exhibit 2 to Post-Effective Amendment No. 30 of Registration
Statement on Form N-1A, filed October 31, 1997 - File Nos. 2-85921 and
811-3829).
(5) Copy of Investment Advisory Agreement between the Registrant
and Alliance Capital Management L.P. - Incorporated by reference (filed
as Exhibit 5 to Post-Effective Amendment No. 65 of Registration
Statement on Form N-1A, filed October 31, 1997 - File Nos. 2-85921 and
811-3829).
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