BABSON VALUE FUND INC, 497J, 1997-04-09

BABSON VALUE FUND INC
497J, 1997-04-09

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BABSON
VALUE
FUND

Prospectus
March 31, 1997

A no-load mutual fund
invested in common stocks
considered undervalued.

JONES & BABSON
MUTUAL FUNDS

PROSPECTUS
March 31, 1997

BABSON
VALUE FUND, INC.

Managed and Distributed By:
JONES & BABSON, INC.
2440 Pershing Road, Suite G-15
Kansas City, Missouri 64108

Toll-Free 1-800-4-BABSON
(1-800-422-2766)
In the Kansas City area 471-5200

Investment Counsel:
DAVID L. BABSON & CO. INC.
Cambridge, Massachusetts

INVESTMENT OBJECTIVE

A no-load mutual fund which seeks long-term growth of capital and income by
investing in a diversified portfolio of common stocks which are considered to
be undervalued in relation to earnings, dividends and/or assets. The Fund may
be considered "contrarian" in nature in that the portfolio will typically
include shares of companies that are relatively unpopular and out-of-favor
with general investors. (For a definition of "contrarian," see page 5 of this
prospectus.) This Fund is not intended to be a complete investment program.
(For a discussion of risk factors see page 6 of this prospectus.)

PURCHASE INFORMATION
Minimum Investment

Initial Purchase $ 1,000
Initial IRA and Uniform Transfers (Gifts)
to Minors Purchases $ 250
Subsequent Purchase:
By Mail $ 100
By Telephone Purchase (ACH) $ 100
By Wire $ 1,000
All Automatic Monthly Purchases $ 50

Shares are purchased and redeemed at net asset value. There are no sales,
redemption or Rule 12b-1 distribution charges. If you need further
information, please call the Fund at the telephone numbers indicated.

ADDITIONAL INFORMATION

This prospectus should be read and retained for future reference. It contains
the information that you should know before you invest. A "Statement of
Additional Information" of the same date as this prospectus has been filed
with the Securities and Exchange Commission and is incorporated by reference.
Investors desiring additional information about the Fund may obtain a copy
without charge by writing or calling the Fund.

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.

TABLE OF CONTENTS Page

Fund Expenses 3
Financial Highlights 4
Investment Objective and Portfolio Management Policy 5
Repurchase Agreements 6
Risk Factors 6
Investment Restrictions 7
Performance Measures 7
How to Purchase Shares 8
Initial Investments 8
Investments Subsequent to Initial Investment 9
Telephone Investment Service 9
Automatic Monthly Investment Plan 10
How to Redeem Shares 10
Systematic Redemption Plan 12
How to Exchange Shares Between Funds 13
How Share Price is Determined 14
Officers and Directors 14
Management and Investment Counsel 14
General Information and History 16
Dividends, Distributions and Their Taxation 16
Shareholder Services 17
Shareholder Inquiries 18

BABSON VALUE FUND, INC.
FUND EXPENSES

Shareholder Transaction Expenses

Maximum sales load imposed on purchases None
Maximum sales load imposed on reinvested dividends None
Deferred sales load None
Redemption fee None
Exchange fee None

Annual Fund Operation Expenses
(as a percentage of average net assets)

Management fees .95%
12b-1 fees None
Other expenses .01%
Total Fund operating expenses .96%

You would pay the following expenses on a $1,000 investment, assuming
(1) 5% annual return and (2) redemption at the end of each time period:

1 Year 3 Year 5 Year 10 Year
$10 $31 $53 $118

The above information is provided in order to assist you in understanding the
various costs and expenses that a shareholder of the Fund will bear directly
or indirectly. The expenses set forth above are for the fiscal year ended
November 30, 1996. The example should not be considered a representation of
past or future expenses. Actual expenses may be greater or less than those
shown.

FINANCIAL HIGHLIGHTS

The following financial highlights for each of the ten years in the period
ended November 30, 1996, have been derived from audited financial statements
of Babson Value Fund, Inc. Such information for each of the five years in the
period ended November 30, 1996, should be read in conjunction with the
financial statements of the Fund and the report of Ernst & Young LLP,
independent auditors, appearing in the November 30, 1996, Annual Report to
Shareholders which is incorporated by reference in this prospectus. The
information for each of the five years in the period ended November 30, 1991,
is not covered by the report of Ernst & Young LLP.

<TABLE>
<CAPTION>
1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
</CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year $31.78 $25.19 $25.36 $22.24 $18.74 $16.20 $19.00 $16.85 $13.59 $15.04

Income from investment operations:
Net investment income .553 .589 .562 .543 .649 .711 .770 .764 .636 .553
Net gains or losses on
securities (both realized
and unrealized) 7.194 7.205 .577 3.932 3.565 2.539 (3.025) 2.226 2.656 (1.333)
Total from investment operations 7.747 7.794 1.139 4.475 4.214 3.250 (2.255) 2.990 3.292 (.780)

Less distributions:
Dividends from net
investment income (.532) (.60) (.398) (1.030) (.714) (.710) (.506) (.760) (.032) (.630)
Distributions from
capital gains (.345) (.604) (.911) (.325) - - (.039) (.080) - (.040)
Total distributions (.877) (1.204) (1.309) (1.355) (.714) (.710) (.545) (.840) (.032) (.670)

Net asset value, end of year $38.65 $31.78 $25.19 $25.36 $22.24 $18.74 $16.20 $19.00 $16.85 $13.59

Total return 24.91% 32.07% 4.51% 21.13% 23.29% 20.81% (12.21)% 18.59% 24.27% (5.36%)

Ratios/Supplemental Data
Net assets, end of year (in millions) $764 $293 $120 $42 $34 $25 $22 $20 $10 $13
Ratio of expenses to average
net assets .96% .98% .99% 1.00% 1.01% 1.01% 1.04% 1.06% 1.11% 1.08%
Ratio of net investment income to
average net assets 1.63% 2.12% 2.32% 2.34% 3.10% 3.82% 4.44% 4.10% 3.87% 3.31%
Portfolio turnover rate 11% 6% 14% 26% 17% 31% 6% 17% 24% 52%
*Average commission paid per
equity share traded $.0548 - - - - - - - - -

<FN>
<F1>*Disclosure required for fiscal years beginning after September 1, 1995.
</FN>
</TABLE>

INVESTMENT OBJECTIVE AND
PORTFOLIO MANAGEMENT POLICY

Babson Value Fund's investment objective is to seek long-term growth of
capital and income by investing principally in a diversified portfolio
of common stocks which are considered to be undervalued in relation to
earnings, dividends and/or assets. The Fund's investment objective and
policy as described in this section will not be changed without approval
of a majority of the Fund's outstanding shares.

The Fund intends to invest in stocks of companies which are rated "B-"
or better in investment quality (growth and stability of earnings and
dividends) by Standard & Poor's and/or "B" or better by Value Line in
financial strength. (For a description of these ratings see "Description
of Stock Ratings" in the "Statement of Additional Information.")

A stock will be considered to be undervalued if it is currently trading
at a price below which the investment adviser believes it should be
trading and therefore a superior potential investment based on one or
more of the following comparisons:

1. price relative to earnings,
2. price relative to dividends,
3. price relative to assets as measured by book value.

Valuation levels as described above for each security will be compared
to a large universe of stocks as selected by the investment adviser, as
well as its own past history of valuation over several years. The
universe will vary from time to time and may consist of as many as a
thousand stocks. The holdings in the portfolio will be monitored
regularly by the Fund's manager to determine that they continue to be
relatively favorable investments. For a discussion of risk factors
involved in investing in undervalued stocks, see "Risk Factors."

Investors' attitudes toward different kinds of companies tend to shift
back and forth over time, from enthusiasm to pessimism and back to
enthusiasm. The Fund may be considered to be "contrarian" in nature
because of its primary focus on undervalued stocks, and typically its
portfolio will consist of companies whose shares are relatively
unpopular and out-of-favor, among investors generally, at the time of
purchase. However, the portfolio will be restricted to companies which
the Fund's investment counsel believes are sound businesses with good
future potential and should, therefore, eventually gain greater investor
favor.

Although individual stocks in the portfolio may be in any price range
because value as determined by the investment adviser is relative rather
than absolute, it is expected that the average price/earnings ratio of
the stocks in the portfolio as a whole will be lower than that of the
Standard & Poor's 500, that the average dividend yield on the
investments will be higher than that of the S&P 500, and that the
average price to book value ratio will be lower than that of the S&P
500. It is also anticipated that some of the companies in the portfolio
may not be paying current dividends.

Except for necessary reserves including but not limited to reserves held
to cover redemptions and unanticipated expenses, as determined by
management, all assets will be invested in marketable securities
composed principally of common stocks and securities convertible into
common stocks. The reserves will be held in cash or high-quality, short-
term debt obligations readily changeable into cash such as: (1)
certificates of deposit, bankers' acceptances and other short-term
obligations issued domestically by United States commercial banks having
assets of at least $1 billion and which are members of the Federal
Deposit Insurance Corporation or holding companies of such banks; (2)
commercial paper of companies rated P-2 or higher by Moody's Investors
Service, Inc. (Moody's) or A-2 or higher by Standard and Poor's
Corporation (S&P), or if not rated by either Moody's or S&P, a company's
commercial paper may be purchased by the Fund if the company has an
outstanding bond issue rated Aa or higher by Moody's or AA or higher by
S&P; (3) short-term debt securities which are non-convertible and which
have one year or less remaining to maturity at the date of purchase and
which are rated Aa or higher by Moody's or AA or higher by S&P; (4)
negotiable certificates of deposit and other short-term debt obligations
of savings and loan associations having assets of at least $1 billion
and which are members of the Federal Home Loan Banks Association and
insured by the Federal Savings and Loan Insurance Corporation. (For
additional information on ratings, see "Description of Commercial Paper
Ratings" in the "Statement of Additional Information.")

Management believes, however, that there may be times when the
shareholders' interests are best served by investing temporarily in
preferred stocks, bonds or other defensive issues. It retains the
freedom to administer the portfolio of the Fund accordingly when, in its
judgment, economic and market conditions make such a course desirable.
Normally, however, the Fund will maintain at least 80% of the portfolio
in common stocks. There are no restrictions or guidelines regarding the
investment of Fund assets in shares listed on an exchange or traded
over-the-counter.

The Fund may also invest in issues of the United States treasury or a
United States government agency subject to repurchase agreements. The
use of repurchase agreements by the Fund involves certain risks. For a
discussion of these risks, see "Risk Factors Applicable to Repurchase
Agreements."

There is no assurance that the Fund's objective of long-term growth of
capital and income can be achieved. Portfolio turnover will be no more
than is necessary to meet the Fund's objective. Under normal
circumstances, it is anticipated that it will not exceed 100% on an
annual basis. For the fiscal years ended November 30, 1996, November 30,
1995 and November 30, 1994, the total dollar amount of brokerage
commissions paid by the Fund and the annual portfolio turnover rate were
as follows:

Portfolio
Fiscal Brokerage Turnover
Year Commissions Rate

1996 $669,271 11%
1995 $243,470 6%
1994 $184,842 14%

REPURCHASE AGREEMENTS

A repurchase agreement involves the sale of securities to the Fund with
the concurrent agreement by the seller to repurchase the securities at
the Fund's cost plus interest at an agreed rate upon demand or within a
specified time, thereby determining the yield during the purchaser's
period of ownership. The result is a fixed rate of return insulated from
market fluctuations during such period. Under the Investment Company Act
of 1940, repurchase agreements are considered loans by the Fund.

The Fund will enter into such repurchase agreements only with United
States banks having assets in excess of $1 billion which are members of
the Federal Deposit Insurance Corporation, and with certain securities
dealers who meet the qualifications set from time to time by the Board
of Directors of the Fund. The term to maturity of a repurchase agreement
normally will be no longer than a few days. Repurchase agreements
maturing in more than seven days and other illiquid securities will not
exceed 10% of the total assets of the Fund.

RISK FACTORS

There are risks in investing in unpopular stocks since the factors
causing the unpopularity may persist longer than expected at the time of
purchase, or they may get worse. These factors may range from a
reduction in earnings expectations to a major business problem. However,
in the judgment of management, those risks are substantially mitigated
by investing in stocks which are undervalued in the market in relation
to earnings, dividends and/or assets.

Risk Factors
Applicable To
Repurchase Agreements

The use of repurchase agreements involves certain risks. For example, if
the seller of the agreement defaults on its obligation to repurchase the
underlying securities at a time when the value of these securities has
declined, the Fund may incur a loss upon disposition of them. If the
seller of the agreement becomes insolvent and subject to liquidation or
reorganization under the Bankruptcy Code or other laws, disposition of
the underlying securities may be delayed pending court proceedings.
Finally, it is possible that the Fund may not be able to perfect its
interest in the underlying securities. While the Fund's management
acknowledges these risks, it is expected that they can be controlled
through stringent security selection criteria and careful monitoring
procedures.

INVESTMENT RESTRICTIONS

In addition to the investment objective and portfolio management
policies set forth under the caption "Investment Objective and Portfolio
Management Policy," the Fund is subject to certain other restrictions
which may not be changed without approval of the lesser of: (1) at
least 67% of the voting securities present at a meeting if the holders
of more than 50% of the outstanding securities of the Fund are present
or represented by proxy, or (2) more than 50% of the outstanding voting
securities of the Fund. Among these restrictions, the more important
ones are that the Fund will not purchase the securities of any issuer if
more than 5% of the Fund's total assets would be invested in the
securities of such issuer, or the Fund would hold more than 10% of any
class of securities of such issuer; the Fund will not make any loan (the
purchase of a security subject to a repurchase agreement or the purchase
of a portion of an issue of publicly distributed debt securities is not
considered the making of a loan); and the Fund will not borrow or pledge
its credit under normal circumstances, except up to 10% of its total
assets (computed at the lower of fair market value or cost) for
temporary or emergency purposes, and not for the purpose of leveraging
its investments; and provided further that any borrowings shall have
asset coverage of at least 3 to 1. The Fund will not buy securities
while borrowings are outstanding. The full text of these restrictions
are set forth in the "Statement of Additional Information."

PERFORMANCE MEASURES

From time to time, the Fund may advertise its performance in various
ways, as summarized below. Further discussion of these matters also
appears in the "Statement of Additional Information." A discussion of
Fund performance is included in the Fund's Annual Report to Shareholders
which is available from the Fund upon request at no charge.

Total Return

The Fund may advertise "average annual total return" over various
periods of time. Such total return figures show the average percentage
change in value of an investment in the Fund from the beginning date of
the measuring period to the end of the measuring period. These figures
reflect changes in the price of the Fund's shares and assume that any
income dividends and/or capital gains distributions made by the Fund
during the period were reinvested in shares of the Fund. Figures will be
given for recent one-, five- and ten-year periods (if applicable), and
may be given for other periods as well (such as from commencement of the
Fund's operations, or on a year-by-year basis). When considering
"average" total return figures for periods longer than one year, it is
important to note that a Fund's annual total return for any one year in
the period might have been greater or less than the average for the
entire period.

Performance Comparisons

In advertisements or in reports to shareholders, the Fund may compare
its performance to that of other mutual funds with similar investment
objectives and to stock or other relevant indices. For example, it may
compare its performance to rankings prepared by Lipper Analytical
Services, Inc. (Lipper), a widely recognized independent service which
monitors the performance of mutual funds. The Fund may compare its
performance to the Standard & Poor's 500 Stock Index (S&P 500), an index
of unmanaged groups of common stocks, the Dow Jones Industrial Average,
a recognized unmanaged index of common stocks of 30 industrial companies
listed on the NYSE, or the Consumer Price Index. Performance
information, rankings, ratings, published editorial comments and
listings as reported in national financial publications such as
Kiplinger's Personal Finance Magazine, Business Week, Morningstar Mutual
Funds, Investor's Business Daily, Institutional Investor, The Wall
Street Journal, Mutual Fund Forecaster, No-Load Investor, Money, Forbes,
Fortune and Barron's may also be used in comparing performance of the
Fund. Performance comparisons should not be considered as representative
of the future performance of any Fund. Further information regarding the
performance of the Fund is contained in the "Statement of Additional
Information."

Performance rankings, recommendations, published editorial comments and
listings reported in Money, Barron's, Kiplinger's Personal Finance
Magazine, Financial World, Forbes, U.S. News & World Report, Business
Week, The Wall Street Journal, Investors Business Daily, USA Today,
Fortune and Stanger's may also be cited (if the Fund is listed in any
such publication) or used for comparison, as well as performance
listings and rankings from Morningstar Mutual Funds, Personal Finance,
Income and Safety, The Mutual Fund Letter, No-Load Fund Investor, United
Mutual Fund Selector, No-Load Fund Analyst, No-Load Fund X, Louis
Rukeyser's Wall Street newsletter, Donoghue's Money Letter, CDA
Investment Technologies, Inc., Wiesenberger Investment Companies
Service, and Donoghue's Mutual Fund Almanac.

HOW TO PURCHASE SHARES

Shares are purchased at net asset value (no sales charge) from the Fund
through its agent, Jones & Babson, Inc., 2440 Pershing Road, Suite G-15,
Kansas City, MO 64108. For information call toll free 1-800-4-BABSON (1-
800-422-2766), or in the Kansas City area 471-5200. If an investor
wishes to engage the services of any other broker to purchase (or
redeem) shares of the Fund, a fee may be charged by such broker. The
Fund will not be responsible for the consequences of delays including
delays in the banking or Federal Reserve wire systems.

You do not pay a sales commission when you buy shares of the Fund.
Shares are purchased at the Fund's net asset value (price) per share
next effective after a purchase order and payment have been received by
the Fund. In the case of certain institutions which have made
satisfactory payment arrangements with the Fund, orders may be processed
at the net asset value per share next effective after a purchase order
has been received by the Fund.

The Fund reserves the right in its sole discretion to withdraw all or
any part of the offering made by this prospectus or to reject purchase
orders when, in the judgment of management, such withdrawal or rejection
is in the best interest of the Fund and its shareholders. The Fund also
reserves the right at any time to waive or increase the minimum
requirements applicable to initial or subsequent investments with
respect to any person or class of persons, which include shareholders of
the Fund's special investment programs. The Fund reserves the right to
refuse to accept orders for Fund shares unless accompanied by payment,
except when a responsible person has indemnified the Fund against losses
resulting from the failure of investors to make payment. In the event
that the Fund sustains a loss as the result of failure by a purchaser to
make payment, the Fund's underwriter, Jones & Babson, Inc. will cover
the loss.

INITIAL INVESTMENTS

Initial investments - By mail. You may open an account and make an
investment by completing and signing the application which accompanies
this prospectus. Make your check ($1,000 minimum unless your purchase is
pursuant to an IRA or the Uniform Transfers (Gifts) to Minors Act in
which case the minimum initial purchase is $250) payable to UMB Bank,
n.a. Mail your application and check to:

Babson Value Fund, Inc.
2440 Pershing Road, Suite G-15
Kansas City, Missouri 64108

Initial investments - By wire. You may purchase shares of the Fund by
wiring funds ($1,000 minimum) through the Federal Reserve Bank to the
custodian, UMB Bank, n.a. Prior to sending your money, you must call the
Fund toll free 1-800-4-BABSON (1-800-422-2766), or in the Kansas City
area 471-5200 and provide it with the identity of the registered account
owner, the registered address, the Social Security or Taxpayer
Identification Number of the registered owner, the amount being wired,
the name and telephone number of the wiring bank and the person to be
contacted in connection with the order. You will then be provided a Fund
account number, after which you should instruct your bank to wire the
specified amount, along with the account number and the account
registration to:

UMB Bank, n.a.
Kansas City, Missouri, ABA #101000695
For Babson Value Fund, Inc./
AC=987032-6213
OBI=(Assigned Fund number and name in
which registered.)

A completed application must be sent to the Fund as soon as possible so
the necessary remaining information can be recorded in your account.
Payment of redemption proceeds will be delayed until the completed
application is received by the Fund.

INVESTMENTS SUBSEQUENT TO
INITIAL INVESTMENT

You may add to your Fund account at any time in amounts of $100 or more
if purchases are made by mail, $1,000 or more if purchases are made by
wire, or $100 or more if purchases are made by telephone purchase (ACH).
Automatic monthly investments must be in amounts of $50 or more.

Checks should be mailed to the Fund at its address, and make them
payable to UMB Bank, n.a. Always identify your account number or include
the detachable reminder stub which accompanies each confirmation.

Wire share purchases should include your account registration, your
account number and the Babson Fund in which you are purchasing shares.
It also is advisable to notify the Fund by telephone that you have sent
a wire purchase order to the bank.

TELEPHONE INVESTMENT SERVICE

To use the Telephone Investment Service, you must first establish your
Fund account and authorize telephone orders in the application form, or,
subsequently, on a special authorization form provided upon request. If
you elect the Telephone Investment Service, you may purchase Fund shares
by telephone and authorize the Fund to draft your checking account ($100
minimum) for the cost of the shares so purchased. You will receive the
next available price after the Fund has received your telephone call.
Availability and continuance of this privilege is subject to acceptance
and approval by the Fund and all participating banks. During periods of
increased market activity, you may have difficulty reaching the Fund by
telephone, in which case you should contact the Fund by mail or
telegraph. The Fund will not be responsible for the consequences of
delays, including delays in the banking or Federal Reserve wire systems.

The Fund will employ reasonable procedures to confirm that instructions
communicated by telephone are genuine, and if such procedures are not
followed, the Fund may be liable for losses due to unauthorized or
fraudulent instructions. Such procedures may include, but are not
limited to requiring personal identification prior to acting upon
instructions received by telephone, providing written confirmations of
such transactions, and/or tape recording of telephone instructions.

The Fund reserves the right to initiate a charge for this service and to
terminate or modify any or all of the privileges in connection with this
service at any time upon 15 days written notice to shareholders, and to
terminate or modify the privileges without prior notice in any
circumstances where such termination or modification is in the best
interest of the Fund and its investors.

AUTOMATIC MONTHLY
INVESTMENT PLAN

You may elect to make monthly investments in a constant dollar amount
from your checking account ($50 minimum). The Fund will draft your
checking account on the same day each month in the amount you authorize
in your application, or, subsequently, on a special authorization form
provided upon request. Availability and continuance of this privilege is
subject to acceptance and approval by the Fund and all participating
banks. If the date selected falls on a day upon which the Fund shares
are not priced, investment will be made on the first date thereafter
upon which Fund shares are priced. The Fund will not be responsible for
the consequences of delays, including delays in the banking or Federal
Reserve wire systems.

HOW TO REDEEM SHARES

The Fund will redeem shares at the price (net asset value per share)
effective after receipt of a redemption request in "good order." (See
"How Share Price is Determined"). Shares can be redeemed by written
request or if previously authorized by telephone toll free 1-800-4-
BABSON (1-800-422-2766), or in the Kansas City area 471-5200.

All telephone requests to redeem shares, the proceeds of which are to be
paid by check, made within 30 days of our receipt of an address change
(including requests to redeem that accompany an address change) must be
in writing. The request must be signed by each person in whose name the
shares are owned, and all signatures must be guaranteed.

In each instance you must comply with the general requirements relating
to all redemptions as well as with specific requirements set out for the
particular redemption method you select. If you wish to expedite
redemptions by using the telephone/telegraph privilege, you should
carefully note the special requirements and limitations relating to
these methods. If an investor wishes to engage the services of any other
broker to redeem (or purchase) shares of the Fund, a fee may be charged
by such broker.

Where additional documentation is normally required to support
redemptions as in the case of corporations, fiduciaries, and others who
hold shares in a representative or nominee capacity, such as certified
copies of corporate resolutions, or certificates of incumbency, or such
other documentation as may be required under the Uniform Commercial Code
or other applicable laws or regulations, it is the responsibility of the
shareholder to maintain such documentation on file and in a current
status. A failure to do so will delay the redemption. If you have
questions concerning redemption requirements, please write or telephone
the Fund well ahead of an anticipated redemption in order to avoid any
possible delay.

Requests which are subject to special conditions or which specify an
effective date other than as provided herein cannot be accepted. All
redemption requests must be transmitted to the Fund at 2440 Pershing
Road, Suite G-15, Kansas City, Missouri 64108. The Fund will redeem
shares at the price (net asset value per share) next computed after
receipt of a redemption request in "good order." (See "How Share Price
is Determined.")

The Fund will endeavor to transmit redemption proceeds to the proper
party, as instructed, as soon as practicable after a redemption request
has been received in "good order" and accepted, but in no event later
than the third business day thereafter. Transmissions are made by mail
unless an expedited method has been authorized and specified in the
redemption request. The Fund will not be responsible for the
consequences of delays including delays in the banking or Federal
Reserve wire systems.

Redemptions will not become effective until all documents in the form
required have been received. In the case of redemption requests made
within 15 days of the date of purchase, the Fund will delay transmission
of proceeds until such time as it is certain that unconditional payment
in federal funds has been collected for the purchase of shares being
redeemed or 15 days from the date of purchase. You can avoid the
possibility of delay by paying for all of your purchases with a transfer
of federal funds.

Signature Guarantees are required in connection with all redemptions of
$50,000 or more by mail, or changes in share registration, except as
hereinafter provided. These requirements may be waived by the Fund in
certain instances where it appears reasonable to do so and will not
unduly affect the interests of other shareholders. Signature(s) must be
guaranteed by an "eligible Guarantor institution" as defined in Rule
17Ad-15 under the Securities Exchange Act of 1934. Eligible guarantor
institutions include: (1) national or state banks, savings associations,
savings and loan associations, trust companies, savings banks,
industrial loan companies and credit unions; (2) national securities
exchanges, registered securities associations and clearing agencies; or
(3) securities broker/dealers which are members of a national securities
exchange or clearing agency or which have a minimum net capital of
$100,000. A notarized signature will not be sufficient for the request
to be in proper form.

Signature guarantees will be waived for mail redemptions of $50,000 or
less, but they will be required if the checks are to be payable to
someone other than the registered owner(s), or are to be mailed to an
address different from the registered address of the shareholder(s), or
where there appears to be a pattern of redemptions designed to
circumvent the signature guarantee requirement, or where the Fund has
other reason to believe that this requirement would be in the best
interests of the Fund and its shareholders.

The right of redemption may be suspended or the date of payment
postponed beyond the normal three-day period when the New York Stock
Exchange is closed or under emergency circumstances as determined by the
Securities and Exchange Commission. Further, the Fund reserves the right
to redeem its shares in kind under certain circumstances. If shares are
redeemed in kind, the shareholder may incur brokerage costs when
converting into cash. Additional details are set forth in the "Statement
of Additional Information."

Due to the high cost of maintaining smaller accounts, the Board of
Directors has authorized the Fund to close shareholder accounts where
their value falls below the current minimum initial investment
requirement at the time of initial purchase as a result of redemptions
and not as the result of market action, and remains below this level for
60 days after each such shareholder account is mailed a notice of: (1)
the Fund's intention to close the account, (2) the minimum account size
requirement, and (3) the date on which the account will be closed if the
minimum size requirement is not met. Since the minimum investment amount
and the minimum account size are the same, any redemption from an
account containing only the minimum investment amount may result in
redemption of that account.

Withdrawal By Mail - Shares may be redeemed by mailing your request to
the Fund. To be in "good order" the request must include the following:

A written request for redemption, together with an endorsed share
certificate where a certificate has been issued, must be received by the
Fund in order to constitute a valid tender for redemption. For
authorization of redemptions by a corporation, it will also be necessary
to have an appropriate certified copy of resolutions on file with the
Fund before a redemption request will be considered in "good order." In
the case of certain institutions which have made satisfactory redemption
arrangements with the Fund, redemption orders may be processed by
facsimile or telephone transmission at net asset value per share next
effective after receipt by the Fund.

(1) A written redemption request or stock assignment (stock power)
containing the genuine signature of each registered owner exactly as the
shares are registered, with clear identification of the account by
registered name(s) and account number and the number of shares or the
dollar amount to be redeemed;

(2) any outstanding stock certificates representing shares to be
redeemed;

(3) signature guarantees as required (see Signature Guarantees); and

(4) any additional documentation which the Fund may deem necessary to
insure a genuine redemption.

Withdrawal By Telephone or Telegraph - You may withdraw any amount
($1,000 minimum if wired) or more by telephone toll free 1-800-4-BABSON
(1-800-422-2766), or in the Kansas City area 471-5200, or by telegram to
the Fund's address. Telephone/telegraph redemption authorization signed
by all registered owners with signatures guaranteed must be on file with
the Fund before you may redeem by telephone or telegraph. Funds will be
sent only to the address of record. The signature guarantee requirement
may be waived by the Fund if the request for this redemption method is
made at the same time the initial application to purchase shares is
submitted.

All communications must include the Fund's name, your account number,
the exact registration of your shares, the number of shares or dollar
amount to be redeemed, and the identity of the bank and bank account
(name and number) to which the proceeds are to be wired. This procedure
may only be used for non-certificated shares held in open account. For
the protection of shareholders, your redemption instructions can only be
changed by filing with the Fund new instructions on a form obtainable
from the Fund which must be properly signed with signature(s)
guaranteed.

Telephone or telegraph redemption proceeds may be transmitted to your
pre-identified bank account. Requests received prior to 4:00 P.M.
(Eastern Time), normally will be wired the following business day. Once
the funds are transmitted, the time of receipt and the funds'
availability are not under our control. If your request is received
during the day thereafter, proceeds normally will be wired on the second
business day following the day of receipt of your request. Wired funds
are subject to a $10 fee to cover bank wire charges, which is deducted
from redemption proceeds, but this charge may be reduced or waived in
connection with certain accounts. The Fund reserves the right to change
this policy or to refuse a telephone or telegraph redemption request or
require additional documentation to assure a genuine redemption, and, at
its option, may pay such redemption by wire or check and may limit the
frequency or the amount of such request. The Fund reserves the right to
terminate or modify any or all of the services in connection with this
privilege at any time without prior notice. Neither the Fund nor Jones &
Babson, Inc. assumes responsibility for the authenticity of withdrawal
instructions, and there are provisions on the authorization form
limiting their liability in this respect.

SYSTEMATIC REDEMPTION PLAN

If you own shares in an open account valued at $10,000 or more, and
desire to make regular monthly or quarterly withdrawals without the
necessity and inconvenience of executing a separate redemption request
to initiate each withdrawal, you may enter into a Systematic Withdrawal
Plan by completing forms obtainable from the Fund. For this service, the
manager may charge you a fee not to exceed $1.50 for each withdrawal.
Currently the manager assumes the additional expenses arising out of
this type of plan, but it reserves the right to initiate such a charge
at any time in the future when it deems it necessary. If such a charge
is imposed, participants will be provided 30 days notice.

Subject to a $50 minimum, you may withdraw each period a specified
dollar amount. Shares also may be redeemed at a rate calculated to
exhaust the account at the end of a specified period of time.

Dividends and capital gains distributions must be reinvested in
additional shares. Under all withdrawal programs, liquidation of shares
in excess of dividends and distributions reinvested will diminish and
may exhaust your account, particularly during a period of declining
share values.

You may revoke or change your plan or redeem all of your remaining
shares at any time. Withdrawal payments will be continued until the
shares are exhausted or until the Fund or you terminate the plan by
written notice to the other.

HOW TO EXCHANGE SHARES
BETWEEN FUNDS

Shareholders may exchange their Fund shares, which have been held in
open account for 15 days or more, and for which good payment has been
received, for identically registered shares of any other Fund in the
Babson or Buffalo Fund Group which is legally registered for sale in the
state of residence of the investor, except Babson Enterprise Fund, Inc.,
provided that the minimum amount exchanged has a value of $1,000 or more
and meets the minimum investment requirement of the Fund or Portfolio
into which it is exchanged.

Effective at the close of business on January 31, 1992, the Directors of
the Babson Enterprise Fund, Inc. took action to limit the offering of
that Fund's shares. Babson Enterprise Fund, Inc. will not accept any new
accounts, including IRAs and other retirement plans, until further
notice, nor will Babson Enterprise Fund accept transfers from
shareholders of other Babson Funds, who were not shareholders of record
of Babson Enterprise Fund at the close of business on January 31, 1992.
Investors may want to consider purchasing shares in Babson Enterprise
Fund II, Inc. as an alternative.

To authorize the Telephone/Telegraph Exchange Privilege, all registered
owners must sign the appropriate section on the original application, or
the Fund must receive a special authorization form, provided upon
request. During periods of increased market activity, you may have
difficulty reaching the Fund by telephone, in which case you should
contact the Fund by mail or telegraph. The Fund reserves the right to
initiate a charge for this service and to terminate or modify any or all
of the privileges in connection with this service at any time and
without prior notice under any circumstances where continuance of these
privileges would be detrimental to the Fund or its shareholders such as
an emergency, or where the volume of such activity threatens the ability
of the Fund to conduct business, or under any other circumstances, upon
60 days written notice to shareholders. The Fund will not be responsible
for the consequences of delays including delays in the banking or
Federal Reserve wire systems.

Exchanges by mail may be accomplished by a written request properly
signed by all registered owners identifying the account, the number of
shares or dollar amount to be redeemed for exchange, and the Babson or
Buffalo Fund into which the account is being transferred.

If you wish to exchange part or all of your shares in the Fund for
shares of another Fund or Portfolio in the Babson or Buffalo Fund Group,
you should review the prospectus of the Fund to be purchased, which can
be obtained from Jones & Babson, Inc. Any such exchange will be based on
the respective net asset values of the shares involved. Any exchange
between Funds involves the sale of an asset. Unless the shareholder
account is tax-deferred, this is a taxable event.

HOW SHARE PRICE IS DETERMINED

In order to determine the price at which new shares will be sold and at
which issued shares presented for redemption will be liquidated, the net
asset value per share is computed once daily, Monday through Friday, at
the specific time during the day that the Board of Directors sets at
least annually, except on days on which changes in the value of
portfolio securities will not materially affect the net asset value, or
days during which no security is tendered for redemption and no order
to purchase or sell such security is received by the Fund, or customary
holidays. For a list of the holidays during which the Fund is not open
for business, see "How Share Price is Determined" in the "Statement of
Additional Information."

The price at which new shares of the Fund will be sold and at which
issued shares presented for redemption will be liquidated is computed
once daily at 4:00 P.M. (Eastern Time), except on those days when the
Fund is not open for business.

The per share calculation is made by subtracting from the Fund's total
assets any liabilities and then dividing into this amount the total
outstanding shares as of the date of the calculation.

Each security listed on an Exchange is valued at its last sale price on
that Exchange on the date as of which assets are valued. Where the
security is listed on more than one Exchange, the Fund will use the
price of that Exchange which it generally considers to be the principal
Exchange on which the stock is traded. Lacking sales, the security is
valued at the mean between the current closing bid and asked prices. An
unlisted security for which over-the-counter market quotations are
readily available is valued at the mean between the last current bid and
asked prices. When market quotations are not readily available, any
security or other asset is valued at its fair value as determined in
good faith by the Board of Directors.

OFFICERS AND DIRECTORS

The officers of the Fund manage its day-to-day operations. The Fund's
manager and its officers are subject to the supervision and control of
the Board of Directors. A list of the officers and directors of the Fund
and a brief statement of their present positions and principal
occupations during the past five years is set forth in the "Statement of
Additional Information."

MANAGEMENT AND INVESTMENT COUNSEL

Jones & Babson, Inc. was founded in 1960. It organized the Fund in 1984,
and acts as its manager and principal underwriter. Pursuant to the
current Management Agreement, Jones & Babson, Inc. provides or pays the
cost of all management, supervisory and administrative services required
in the normal operation of the Fund. This includes investment management
and supervision; fees of the custodian, independent auditors and legal
counsel; remuneration of officers, directors and other personnel; rent;
shareholder services, including the maintenance of the shareholder
accounting system and transfer agency; and such other items as are
incidental to corporate administration.

Not considered normal operating expenses, and therefore payable by the
Fund, are taxes, interest, governmental charges and fees, including
registration of the Fund and its shares with the Securities and Exchange
Commission and the Securities Departments of the various States,
brokerage costs, dues, and all extraordinary costs and expenses
including but not limited to legal and accounting fees incurred in
anticipation of or arising out of litigation or administrative
proceedings to which the Fund, its officers or directors may be subject
or a party thereto.

As a part of the Management Agreement, Jones & Babson, Inc. employs at
its own expense David L. Babson & Co. Inc. as its investment counsel to
assist in the investment advisory function. David L. Babson & Co. Inc.
is an investment counseling firm founded in 1940. It serves a broad
variety of individual, corporate and other institutional clients by
maintaining an extensive research and analytical staff. It has an
experienced investment analysis and research staff which eliminates the
need for Jones & Babson, Inc. and the Fund to maintain an extensive
duplicate staff, with the consequent increase in the cost of investment
advisory service. The cost of the services of David L. Babson & Co. Inc.
is included in the fee of Jones & Babson, Inc. The Management Agreement
limits the liability of the manager and its investment counsel, as well
as their officers, directors and personnel, to acts or omissions
involving willful malfeasance, bad faith, gross negligence, or reckless
disregard of their duties. Roland W. Whitridge has been the manager of
Babson Value Fund since its inception in 1984. He is a Chartered
Financial Analyst. He joined David L. Babson & Co. in 1974, and has over
30 years of investment management experience.

As compensation for all the foregoing services, the Fund pays Jones &
Babson, Inc. a fee at the annual rate of 95/100 of one percent (.95%) of
average daily net assets.

The annual fee charged by Jones & Babson, Inc. is higher than the fees
of most other investment advisers whose charges cover only investment
advisory services with all remaining operational expenses absorbed
directly by the Fund. Yet, it compares favorably with these other advisers
when all expenses to Fund shareholders are taken into account. Jones &
Babson, Inc. pays David L. Babson & Co. Inc. a fee of 35/100 of one
percent (.35%) of the average daily total net assets, which is computed
daily and paid semimonthly. The total expenses of the Fund for the fiscal
year ended November 30, 1996, amounted to 96/100 of one percent (.96%)
of the average net assets.

Certain officers and directors of the Fund are also officers or
directors or both of other Babson Funds, Jones & Babson, Inc. or David
L. Babson & Co. Inc.

Jones & Babson, Inc. is a wholly-owned subsidiary of Business Men's
Assurance Company of America which is considered to be a controlling
person under the Investment Company Act of 1940. Assicurazioni Generali
S.p.A., an insurance organization founded in 1831 based in Trieste,
Italy, is considered to be a controlling person and is the ultimate
parent of Business Men's Assurance Company of America. Mediobanca is a
5% owner of Generali.

David L. Babson & Co. Inc. is a wholly-owned subsidiary of Massachusetts
Mutual Life Insurance Company headquartered in Springfield,
Massachusetts. Massachusetts Mutual Life Insurance Company is an
insurance organization founded in 1851 and is considered to be a
controlling person of David L. Babson & Co. Inc., under the Investment
Company Act of 1940.

The current Management Agreement between the Fund and Jones & Babson,
Inc., which includes the Investment Counsel Agreement between Jones &
Babson, Inc. and David L. Babson & Co. Inc., will continue in effect
until October 31, 1997, and will continue automatically for successive
annual periods ending each October 31 so long as such continuance is
specifically approved at least annually by the Board of Directors of the
Fund or by the vote of a majority of the outstanding voting securities
of the Fund, and, provided also that such continuance is approved by the
vote of a majority of the directors who are not parties to the
Agreements or interested persons of any such party at a meeting held in
person and called specifically for the purpose of evaluating and voting
on such approval. Both Agreements provide that either party may
terminate by giving the other 60 days written notice. The Agreements
terminate automatically if assigned by either party.

GENERAL INFORMATION AND HISTORY

The Fund, incorporated in Maryland on July 24, 1984, has a present
authorized capitalization of 50,000,000 shares of $1 par value common
stock. All shares are of the same class with like rights and privileges.
Each full and fractional share, when issued and outstanding, has: (1)
equal voting rights with respect to matters which affect the Fund; and
(2) equal dividend, distribution and redemption rights to the assets of
the Fund. Shares when issued are fully paid and non-assessable. The Fund
may create other series of stock but will not issue any senior
securities. Shareholders do not have pre-emptive or conversion rights.

Non-cumulative voting - These shares have non-cumulative voting rights,
which means that the holders of more than 50% of the shares voting for
the election of directors can elect 100% of the directors, if they
choose to do so, and in such event, the holders of the remaining less
than 50% of the shares voting will not be able to elect any directors.

The Maryland Statutes permit registered investment companies, such as
the Fund, to operate without an annual meeting of shareholders under
specified circumstances if an annual meeting is not required by the
Investment Company Act of 1940. There are procedures whereby the
shareholders may remove directors. These procedures are described in the
"Statement of Additional Information" under the caption "Officers and
Directors." The Fund has adopted the appropriate provisions in its By-
Laws and may not, at its discretion, hold annual meetings of
shareholders for the following purposes unless required to do so: (1)
election of directors; (2) approval of any investment advisory
agreement; (3) ratification of the selection of independent auditors;
and (4) approval of a distribution plan. As a result, the Fund does not
intend to hold annual meetings.

The Fund may use the name "Babson" in its name so long as Jones &
Babson, Inc. is continued as manager and David L. Babson & Co. Inc. as
its investment counsel. Complete details with respect to the use of the
name are set out in the Management Agreement between the Fund and Jones
& Babson, Inc.

This prospectus omits certain of the information contained in the
registration statement filed with the Securities and Exchange
Commission, Washington, D.C. These items may be inspected at the offices
of the Commission or obtained from the Commission upon payment of the
fee prescribed.

DIVIDENDS, DISTRIBUTIONS AND THEIR TAXATION

The Fund pays dividends from net investment income quarterly, usually in
March, June, September and December. Distribution from capital gains
realized on the sale of securities, if any, will be declared annually on
or before December 31. Dividend and capital gains distributions will be
reinvested automatically in additional shares at the net asset value per
share next computed and effective at the close of business on the day
after the record date, unless the shareholder has elected on the
original application, or by written instructions filed with the Fund, to
have them paid in cash.

The Fund has qualified and intends to continue to qualify for taxation
as a "regulated investment company" under the Internal Revenue Code so
that the Fund will not be subject to federal income tax to the extent
that it distributes its income to its shareholders. Dividends, either
in cash or reinvested in shares, paid by the Fund from net investment
income will be taxable to shareholders as ordinary income, and will
generally qualify in part for the 70% dividends-received deduction for
corporations. The portion of the dividends so qualified depends on the
aggregate taxable qualifying dividend income received by the Fund from
domestic (U.S.) sources. The Fund will send to shareholders a statement
each year advising the amount of the dividend income which qualifies for
such treatment.

Whether paid in cash or additional shares of the Fund, and regardless of
the length of time Fund shares have been owned by the shareholder,
distributions from long-term capital gains are taxable to shareholders
as such, but are not eligible for the dividends-received deduction for
corporations. Shareholders are notified annually by the Fund as to
federal tax status of dividends and distributions paid by the Fund. Such
dividends and distributions may also be subject to state and local
taxes.

Exchange and redemption of Fund shares are taxable events for federal
income tax purposes. Shareholders may also be subject to state and
municipal taxes on such exchanges and redemptions. You should consult
your tax adviser with respect to the tax status of distributions from
the Fund in your state and locality.

The Fund intends to declare and pay dividends and capital gains
distributions so as to avoid imposition of the federal excise tax. To do
so, the Fund expects to distribute during each calendar year an amount
equal to: (1) 98% of its calendar year ordinary income; (2) 98% of its
capital gains net income (the excess of short- and long-term capital
gain over short- and long-term capital loss) for the one-year period
ending each November 30; and (3) 100% of any undistributed ordinary or
capital gain net income from the prior calendar year. Dividends declared
in October, November or December and made payable to shareholders of
record in such a month are deemed to have been paid by the Fund and
received by shareholders on December 31 of such year, so long as the
dividends are actually paid before February 1 of the following year.

To comply with IRS regulations, the Fund is required by federal law to
withhold 31% of reportable payments (which may include dividends,
capital gains distributions, and redemptions) paid to shareholders who
have not complied with IRS regulations. In order to avoid this
withholding requirement, shareholders must certify on their Application,
or on a separate form supplied by the Fund, that their Social Security
or Taxpayer Identification Number provided is correct and that they are
not currently subject to backup withholding, or that they are exempt
from backup withholding.

The federal income tax status of all distributions will be reported to
shareholders each January as a part of the annual statement of
shareholder transactions. Shareholders not subject to tax on their
income will not be required to pay tax on amounts distributed to them.

THE TAX DISCUSSION SET FORTH ABOVE IS INCLUDED HEREIN FOR GENERAL
INFORMATION ONLY. PROSPECTIVE INVESTORS SHOULD CONSULT THEIR OWN TAX
ADVISERS WITH RESPECT TO THE TAX CONSEQUENCES TO THEM OF AN INVESTMENT
IN THE FUND.

SHAREHOLDER SERVICES

The Fund and its manager offer shareholders a broad variety of services
described throughout this prospectus. In addition, the following
services are available:

Automatic Monthly Investment - You may elect to make monthly
investments in a constant dollar amount from your checking account ($50
minimum). The Fund will draft your checking account on the same day each
month in the amount you authorize in your application, or, subsequently,
on a special authorization form provided upon request.

Automatic Reinvestment - Dividends and capital gains distributions may
be reinvested automatically, or shareholders may elect to have dividends
paid in cash and capital gains reinvested, or to have both paid in cash.

Telephone Investments - You may make investments of $100 or more by
telephone if you have authorized such investments in your application,
or, subsequently, on a special authorization form provided upon request.
See "Telephone Investment Service."

Automatic Exchange - You may exchange shares from your account ($100
minimum) in any of the Babson Funds to an identically registered account
in any other fund in the Babson or Buffalo Group except Babson
Enterprise Fund, Inc. according to your instructions. Monthly exchanges
will be continued until all shares have been exchanged or until you
terminate the Automatic Exchange authorization. A special authorization
form will be provided upon request.

Transfer of Ownership - A shareholder may transfer shares to another
shareholder account. The requirements which apply to redemptions apply
to transfers. A transfer to a new account must meet initial investment
requirements.

Systematic Redemption Plan - Shareholders who own shares in open
account valued at $10,000 or more may arrange to make regular
withdrawals without the necessity of executing a separate redemption
request to initiate each withdrawal.

Sub-Accounting - Keogh and corporate tax qualified retirement plans, as
well as certain other investors who must maintain separate participant
accounting records, may meet these needs through services provided by
the Fund's manager, Jones & Babson, Inc. Investment minimums may be met
by accumulating the separate accounts of the group. Although there is
currently no charge for sub-accounting, the Fund and its manager reserve
the right to make reasonable charges for this service.

Prototype Retirement Plans - Jones & Babson, Inc. offers a defined
contribution prototype plan - The Universal Retirement Plan- which is
suitable for all who are self-employed, including sole proprietors,
partnerships, and corporations. The Universal Prototype includes both
money purchase pension and profit-sharing plan options.

Individual Retirement Accounts - Also available is an Individual
Retirement Account (IRA). The IRA uses the IRS model form of plan and
provides an excellent way to accumulate a retirement fund which will
earn tax-deferred dollars until withdrawn. An IRA may also be used to
defer taxes on certain distributions from employer-sponsored retirement
plans. You may contribute up to $2,000 of compensation each year ($4,000
if a spousal IRA is established), some or all of which may be
deductible. Consult your tax adviser concerning the amount of the tax
deduction, if any.

Simplified Employee Pensions (SEPs) - The Jones & Babson IRA may be
used with IRS Form 5305 - SEP to establish a SEP-IRA, to which the self-
employed individual may contribute up to 15% of net earned income or
$30,000, whichever is less. A SEP-IRA offers the employer the ability to
make the same level of deductible contributions as a Profit-Sharing Plan
with greater ease of administration, but less flexibility in plan
coverage of employees.

SHAREHOLDER INQUIRIES

Telephone inquiries may be made toll free to the Fund,
1-800-4-BABSON (1-800-422-2766), or in the Kansas
City area 471-5200.

Shareholders may address written inquiries to the
Fund at:

Babson Value Fund, Inc.
2440 Pershing Road, Suite G-15
Kansas City, MO 64108

INDEPENDENT AUDITORS

ERNST & YOUNG LLP
Kansas City, Missouri

LEGAL COUNSEL

STRADLEY, RONON, STEVENS & YOUNG
Philadelphia, Pennsylvania
JOHN G. DYER
Kansas City, Missouri

CUSTODIAN

UMB BANK, n.a.
Kansas City, Missouri

TRANSFER AGENT

JONES & BABSON, INC.
Kansas City, Missouri

EQUITIES
Growth Fund
Enterprise Fund*
Enterprise Fund II
Value Fund
Shadow Stock Fund
International Fund

FIXED INCOME
Bond Trust
Money Market Fund
Tax-Free Income Fund

* Closed to new investors.

JONES & BABSON
MUTUAL FUNDS

2440 Pershing Road
Kansas City, MO 64108-2561
816-471-5200

1-800-4-BABSON
(1-800-422-2766)

http://www.jbfunds.com

<PAGE>

PART B

BABSON VALUE FUND, INC.

STATEMENT OF ADDITIONAL INFORMATION

March 31, 1997

This Statement is not a prospectus but should be read in conjunction with the
Fund's current Prospectus dated March 31, 1997. To obtain the Prospectus
please call the Fund toll-free 1-800-4-BABSON (1-800-422-2766), or in the
Kansas City area 471-5200.

TABLE OF CONTENTS

Investment Objective and Policies 2
Portfolio Transactions 2
Investment Restrictions 2
Performance Measures 4
How the Fund's Shares are Distributed 4
How Share Purchases are Handled 4
Redemption of Shares 5
Signature Guarantees 5
Management and Investment Counsel 6
How Share Price is Determined 6
Officers and Directors 6
Custodian 8
Independent Auditors 9
Other Jones & Babson Funds 9
Description of Stock Ratings 10
Description of Commercial Paper Ratings 11
Financial Statements 11

INVESTMENT OBJECTIVE AND POLICIES

The following policies supplement the Fund's
investment objective and policies set forth in the
Prospectus.

PORTFOLIO TRANSACTIONS

Decisions to buy and sell securities for the Fund
are made by Jones & Babson, Inc. pursuant to
recommendations by David L. Babson & Co. Inc.
Officers of the Fund and Jones & Babson, Inc. are
generally responsible for implementing or
supervising these decisions, including allocation of
portfolio brokerage and principal business and the
negotiation of commissions and/or the price of the
securities. In instances where securities are
purchased on a commission basis, the Fund will seek
competitive and reasonable commission rates based
on circumstances of the trade involved and to the
extent that they do not detract from the quality of the
execution.

The Fund, in purchasing and selling portfolio
securities, will seek the best available combination of
execution and overall price (which shall include the
cost of the transaction) consistent with the
circumstances which exist at the time. The Fund
does not intend to solicit competitive bids on each
transaction.

The Fund believes it is in its best interest and that
of its shareholders to have a stable and continuous
relationship with a diverse group of financially
strong and technically qualified broker-dealers who
will provide quality executions at competitive rates.
Broker-dealers meeting these qualifications also will
be selected for their demonstrated loyalty to the
Fund, when acting on its behalf, as well as for any
research or other services provided to the Fund.
Substantially all of the portfolio transactions are
through brokerage firms which are members of the
New York Stock Exchange which is typically the
most active market in the size of the Fund's
transactions and for the types of securities
predominant in the Fund's portfolio. When buying
securities in the over-the-counter market, the Fund
will select a broker who maintains a primary market
for the security unless it appears that a better
combination of price and execution may be obtained
elsewhere. The Fund normally will not pay a higher
commission rate to broker-dealers providing benefits
or services to it than it would pay to broker-dealers
who do not provide it such benefits or services.
However, the Fund reserves the right to do so within
the principles set out in Section 28(e) of the
Securities Exchange Act of 1934 when it appears
that this would be in the best interests of the
shareholders.

No commitment is made to any broker or dealer
with regard to placing of orders for the purchase or
sale of Fund portfolio securities, and no specific
formula is used in placing such business. Allocation
is reviewed regularly by both the Board of Directors
of the Fund and Jones & Babson, Inc.

Since the Fund does not market its shares through
intermediary brokers or dealers, it is not the Fund's
practice to allocate brokerage or principal business
on the basis of sales of its shares which may be made
through such firms. However, it may place portfolio
orders with qualified broker-dealers who recommend
the Fund to other clients, or who act as agents in the
purchase of the Fund's shares for their clients.

Research services furnished by broker-dealers may
be useful to the Fund manager and its investment
counsel in serving other clients, as well as the Fund.
Conversely, the Fund may benefit from research
services obtained by the manager or its investment
counsel from the placement of portfolio brokerage of
other clients.

When it appears to be in the best interests of its
shareholders, the Fund may join with other clients of
the manager and its investment counsel in acquiring
or disposing of a portfolio holding. Securities
acquired or proceeds obtained will be equitably
distributed between the Fund and other clients
participating in the transaction. In some instances,
this investment procedure may affect the price paid
or received by the Fund or the size of the position
obtained by the Fund.

INVESTMENT RESTRICTIONS

In addition to the investment objective and
portfolio management policies set forth in the
Prospectus under the caption "Investment Objective
and Portfolio Management Policy," the following
restrictions also may not be changed without
approval of the "holders of a majority of the
outstanding shares" of the Fund.

The Fund will not: (1) purchase the securities of
any one issuer, except the United States government,
if immediately after and as a result of such purchase
(a) the value of the holdings of the Fund in the
securities of such issuer exceeds 5% of the value of
the Fund's total assets, or (b) the Fund owns more
than 10% of the outstanding voting securities, or any
other class of securities, of such issuer; (2) engage
in the purchase or sale of real estate or commodities;
(3) underwrite the securities of other issuers; (4)
make loans to any of its officers, directors, or
employees, or to its manager, or general distributor,
or officers or directors thereof; (5) make any loan
(the purchase of a security subject to a repurchase
agreement or the purchase of a portion of an issue of
publicly distributed debt securities is not considered
the making of a loan); (6) invest in companies for
the purpose of exercising control of management; (7)
purchase securities on margin, or sell securities
short; (8) purchase shares of other investment
companies except in the open market at ordinary
broker's commission or pursuant to a plan of merger
or consolidation; (9) invest in the aggregate more
than 5% of the value of its gross assets in the
securities of issuers (other than federal, state,
territorial, or local governments, or corporations, or
authorities established thereby), which, including
predecessors, have not had at least three years' con-
tinuous operations; (10) except for transactions in its
shares or other securities through brokerage
practices which are considered normal and generally
accepted under circumstances existing at the time,
enter into dealings with its officers or directors, its
manager or underwriter, or their officers or directors,
or any organization in which such persons have a
financial interest; (11) purchase or retain securities
of any company in which any Fund officers or
directors, or Fund manager, its partner, officer, or
director beneficially owns more than 1/2 of 1% of
said company's securities, if all such persons owning
more than 1/2 of 1% of such company's securities,
own in the aggregate more than 5% of the
outstanding securities of such company; (12) borrow
or pledge its credit under normal circumstances,
except up to 10% of its gross assets (computed at the
lower of fair market value or cost) for temporary or
emergency purposes, and not for the purpose of
leveraging its investments, and provided further that
any borrowing in excess of 5% of the total assets of
the Fund shall have asset coverage of at least 3 to 1;
(13) make itself or its assets liable for the
indebtedness of others; or (14) invest in securities
which are assessable or involve unlimited liability.

In addition to the fundamental investment restric-
tions set out above, in order to comply with the law
or regulations of various States, the Fund will not
engage in the following practices: (1) invest in
securities which are not readily marketable or in
securities of foreign issuers which are not listed on a
recognized domestic or foreign securities exchange;
(2) write put or call options; (3) invest in oil, gas and
other mineral leases or arbitrage transactions; (4)
purchase or sell real estate (including limited
partnership interests, but excluding readily
marketable interests in real estate investment trusts
or readily marketable securities of companies which
invest in real estate); or (5) purchase securities of
issuers which the company is restricted from selling
to the public without registration under the
Securities Act of 1933, including Rule 144(a)
securities.

Certain states also require that the Fund's
investments in warrants, valued at the lower of cost
or market, may not exceed 5% of the value of the
Fund's net assets. Included within that amount, but
not to exceed 2% of the value of the Fund's net assets
may be warrants which are not listed on the New
York or American Stock Exchange. Warrants
acquired by the Fund in units or attached to
securities may be deemed to be without value for
purposes of this limitation.

PERFORMANCE MEASURES

Total Return

The Fund's "average annual total return" figures
described and shown below are computed according
to a formula prescribed by the Securities and
Exchange Commission. The formula can be
expressed as follows:

P(1+T)n = ERV

Where: P = a hypothetical initial payment
of $1000

T = average annual total return

n = number of years

ERV = Ending Redeemable Value of a
hypothetical $1000 payment
made at the beginning of the
1, 5, or 10 year (or other)
periods at the end of the 1,5,
or 10 year (or other) periods
(or fractional portions
thereof);

The table below shows the average total return for
the Fund for the specified periods.

For the one year 12/1/95-11/30/96 24.91%

For the five years 12/1/91-11/30/96 20.82%

For the ten years 12/1/86-11/30/96 14.31%

From commencement of 16.20%
operation to 11/30/96*
__________________________________________

* The Fund commenced operation
December 21, 1984.

HOW THE FUND'S SHARES ARE
DISTRIBUTED

Jones & Babson, Inc., as agent of the Fund, agrees
to supply its best efforts as sole distributor of the
Fund's shares and, at its own expense, pay all sales
and distribution expenses in connection with their
offering other than registration fees and other
government charges.

Jones & Babson, Inc. does not receive any fee or
other compensation under the distribution agreement
which continues in effect until October 31, 1997, and
which will continue automatically for successive
annual periods ending each October 31, if continued
at least annually by the Fund's Board of Directors,
including a majority of those Directors who are not
parties to such Agreements or interested persons of
any such party. It terminates automatically if
assigned by either party or upon 60 days written
notice by either party to the other.

Jones & Babson, Inc. also acts as sole distributor
of the shares for David L. Babson Growth Fund,
Inc., D.L. Babson Bond Trust, D.L. Babson Money
Market Fund, Inc., D.L. Babson Tax-Free Income
Fund, Inc., Babson Enterprise Fund, Inc., Babson
Enterprise Fund II, Inc., Shadow Stock Fund, Inc.,
Babson-Stewart Ivory International Fund, Inc., Scout
Stock Fund, Inc., Scout Bond Fund, Inc., Scout
Money Market Fund, Inc., Scout Tax-Free Money
Market Fund, Inc., Scout Regional Fund, Inc., Scout
WorldWide Fund, Inc., Scout Balanced Fund, Inc.,
Buffalo Balanced Fund, Inc., Buffalo Equity Fund,
Inc., Buffalo High Yield Fund, Inc. and Buffalo USA
Global Fund, Inc.

HOW SHARE PURCHASES ARE HANDLED

Each order accepted will be fully invested in whole
and fractional shares, unless the purchase of a
certain number of whole shares is specified, at the
net asset value per share next effective after the order
is accepted by the Fund.

Each investment is confirmed by a year-to-date
statement which provides the details of the
immediate transaction, plus all prior transactions in
your account during the current year. This includes
the dollar amount invested, the number of shares
purchased or redeemed, the price per share, and the
aggregate shares owned. A transcript of all activity
in your account during the previous year will be
furnished each January. By retaining each annual
summary and the last year-to-date statement, you
have a complete detailed history of your account
which provides necessary tax information. A
duplicate copy of a past annual statement is available
from Jones & Babson, Inc. at its cost, subject to a
minimum charge of $5 per account, per year
requested.

Normally, the shares which you purchase are held
by the Fund in open account, thereby relieving you of
the responsibility of providing for the safekeeping of
a negotiable share certificate. Should you have a
special need for a certificate, one will be issued on
request for all or a portion of the whole shares in
your account. There is no charge for the first
certificate issued. A charge of $3.50 will be made
for any replacement certificates issued. In order to
protect the interests of the other shareholders, share
certificates will be sent to those shareholders who
request them only after the Fund has determined that
unconditional payment for the shares represented by
the certificate has been received by its custodian,
UMB Bank, n.a.

If an order to purchase shares must be canceled
due to non-payment, the purchaser will be
responsible for any loss incurred by the Fund arising
out of such cancellation. To recover any such loss,
the Fund reserves the right to redeem shares owned
by any purchaser whose order is canceled, and such
purchaser may be prohibited or restricted in the
manner of placing further orders.

The Fund reserves the right in its sole discretion to
withdraw all or any part of the offering made by the
prospectus or to reject purchase orders when, in the
judgment of management, such withdrawal or
rejection is in the best interest of the Fund and its
shareholders. The Fund also reserves the right at
any time to waive or increase the minimum
requirements applicable to initial or subsequent
investments with respect to any person or class of
persons, which include shareholders of the Fund's
special investment programs.

REDEMPTION OF SHARES

The right of redemption may be suspended, or the
date of payment postponed beyond the normal three-
day period by the Fund's Board of Directors under
the following conditions authorized by the
Investment Company Act of 1940: (1) for any
period (a) during which the New York Stock
Exchange is closed, other than customary weekend
and holiday closing, or (b) during which trading on
the New York Stock Exchange is restricted; (2) for
any period during which an emergency exists as a
result of which (a) disposal by the Fund of securities
owned by it is not reasonably practicable, or (b) it is
not reasonably practicable for the Fund to determine
the fair value of its net assets; or (3) for such other
periods as the Securities and Exchange Commission
may by order permit for the protection of the Fund's
shareholders.

The Fund has elected to be governed by Rule 18f-1
under the Investment Company Act of 1940 pursuant
to which the Fund is obligated to redeem shares
solely in cash up to the lesser of $250,000 or 1% of
the Fund's net asset value during any 90-day period
for any one shareholder. Should redemptions by any
shareholder exceed such limitation, the Fund may
redeem the excess in kind. If shares are redeemed in
kind, the redeeming shareholder may incur
brokerage costs in converting the assets to cash. The
method of valuing securities used to make
redemptions in kind will be the same as the method
of valuing portfolio securities described under "How
Share Price is Determined" in the Prospectus, and
such valuation will be made as of the same time the
redemption price is determined.

SIGNATURE GUARANTEES

Signature guarantees normally reduce the
possibility of forgery and are required in connection
with each redemption method to protect shareholders
from loss. Signature guarantees are required in
connection with all redemptions of $50,000 or more
by mail or changes in share registration, except as
provided in the Prospectus.

Signature guarantees must appear together with
the signature(s) of the registered owner(s), on:

(1) a written request for redemption;

(2) a separate instrument of assignment, which
should specify the total number of shares to be
redeemed (this "stock power" may be obtained
from the Fund or from most banks or stock
brokers); or

(3) all stock certificates tendered for redemption.

MANAGEMENT AND
INVESTMENT COUNSEL

As a part of the Management Agreement, Jones &
Babson, Inc. employs at its own expense David L.
Babson & Co. Inc., as its investment counsel. David
L. Babson & Co. Inc. was founded in 1940 as a
private investment research and counseling
organization. On June 30, 1995, David L. Babson &
Co. Inc. became a wholly-owned subsidiary of
Massachusetts Mutual Life Insurance Company.
David L. Babson & Co. Inc. serves individual,
corporate and other institutional clients. It
participates with Jones & Babson in the management
of nine Babson no-load mutual funds.

The aggregate management fees paid to Jones &
Babson, Inc. during the most recent fiscal year ended
November 30, 1996, and from which Jones &
Babson, Inc. paid all the Fund's expenses except
those payable directly by the Fund, were $4,586,127.
The annual fee charged by Jones & Babson, Inc.
covers all normal operating costs of the Fund.

David L. Babson & Co. Inc. has an experienced
investment analysis and research staff which
eliminates the need for Jones & Babson, Inc. and the
Fund to maintain an extensive duplicate staff, with
the consequent increase in the cost of investment
advisory service. The cost of the services of David
L. Babson & Co. Inc. is included in the services of
Jones & Babson, Inc. During the most recent fiscal
year ended November 30, 1996, Jones & Babson,
Inc. paid David L. Babson & Co. Inc. a fee
amounting to $1,691,238.

HOW SHARE PRICE IS DETERMINED

The net asset value per share of the Fund portfolio
is computed once daily, Monday through Friday, at
the specific time during the day that the Board of
Directors of the Fund sets at least annually, except
on days on which changes in the value of a Fund's
portfolio securities will not materially affect the net
asset value, or days during which no security is
tendered for redemption and no order to purchase or
sell such security is received by the Fund, or the
following holidays:

New Year's Day January 1
Presidents' Holiday Third Monday
in February
Good Friday Friday before Easter
Memorial Day Last Monday
in May
Independence Day July 4
Labor Day First Monday
in September
Thanksgiving Day Fourth Thursday
in November
Christmas Day December 25

OFFICERS AND DIRECTORS

The Fund is managed by Jones & Babson, Inc.
subject to the supervision and control of the Board of
Directors. The following table lists the Officers and
Directors of the Fund. Unless noted otherwise, the
address of each Officer and Director is 2440
Pershing Road, Suite G-15, Kansas City, Missouri
64108. Except as indicated, each has been an
employee of Jones & Babson, Inc. for more than five
years.

* Larry D. Armel, President and Director.
President and Director, Jones & Babson, Inc.,
David L. Babson Growth Fund, Inc., D.L. Babson
Money Market Fund, Inc., D.L. Babson Tax-Free
Income Fund, Inc., Babson Enterprise Fund, Inc.,
Babson Enterprise Fund II, Inc., Shadow Stock
Fund, Inc., Babson-Stewart Ivory International
Fund, Inc., Scout Stock Fund, Inc. , Scout Bond
Fund, Inc., Scout Money Market Fund, Inc., Scout
Tax-Free Money Market Fund, Inc., Scout
Regional Fund, Inc., Scout WorldWide Fund,
Inc.,Scout Balanced Fund, Inc., Buffalo Balanced
Fund, Inc., Buffalo Equity Fund, Inc., Buffalo
High Yield Fund, Inc., Buffalo USA Global Fund,
Inc.; President and Trustee of D.L. Babson Bond
Trust.

__________________________________________

* Directors who are interested persons as that
term is defined in the Investment Company Act
of 1940, as amended.

Francis C. Rood, Director.
Retired, 6429 West 92nd Street, Overland Park,
Kansas 66212. Formerly, Group Vice President-
Administration, Hallmark Cards, Inc.; Director,
David L. Babson Growth Fund, Inc., D. L. Babson
Money Market Fund, Inc., D.L. Babson Tax-Free
Income Fund, Inc., Babson Enterprise Fund, Inc.,
Babson Enterprise Fund II, Inc., Shadow Stock
Fund, Inc.; Buffalo Balanced Fund, Inc., Buffalo
Equity Fund, Inc., Buffalo High Yield Fund, Inc.,
Buffalo USA Global Fund, Inc.; Trustee of D.L.
Babson Bond Trust.

William H. Russell, Director.
Financial consultant, 645 West 67th Street, Kansas
City, Missouri 64113; Director, David L. Babson
Growth Fund, Inc., D.L. Babson Money Market
Fund, Inc., D.L. Babson Tax-Free Income Fund,
Inc., Babson Enterprise Fund, Inc., Babson
Enterprise Fund II, Inc., Shadow Stock Fund, Inc.,
Babson-Stewart Ivory International Fund, Inc.;
Buffalo Balanced Fund, Inc., Buffalo Equity Fund,
Inc., Buffalo High Yield Fund, Inc., Buffalo USA
Global Fund, Inc.; Trustee of D.L. Babson Bond
Trust.

H. David Rybolt, Director.
Consultant, HDR Associates, P.O. Box 2468,
Shawnee Mission, Kansas 66202; Director, David L.
Babson Growth Fund, Inc., D.L. Babson Money
Market Fund, Inc., D.L. Babson Tax-Free Income
Fund, Inc., Babson Enterprise Fund, Inc., Babson
Enterprise Fund II, Inc., Shadow Stock Fund, Inc.;
Buffalo Balanced Fund, Inc., Buffalo Equity Fund,
Inc., Buffalo High Yield Fund, Inc., Buffalo USA
Global Fund, Inc.; Trustee of D.L. Babson Bond
Trust.

P. Bradley Adams, Vice President and Treasurer.
Vice President and Treasurer, Jones & Babson, Inc.,
David L. Babson Growth Fund, Inc., D.L. Babson
Money Market Fund, Inc., D.L. Babson Tax-Free
Income Fund, Inc., Babson Enterprise Fund, Inc.,
Babson Enterprise Fund II, Inc., Shadow Stock
Fund, Inc., Babson-Stewart Ivory International Fund,
Inc., D.L. Babson Bond Trust; Scout Stock Fund,
Inc., Scout Bond Fund, Inc., Scout Money Market
Fund, Inc., Scout Tax-Free Money Market Fund,
Inc., Scout Regional Fund, Inc., Scout WorldWide
Fund, Inc., Scout Balanced Fund, Inc.; Buffalo
Balanced Fund, Inc., Buffalo Equity Fund, Inc.,
Buffalo High Yield Fund, Inc., Buffalo USA Global
Fund, Inc.

Elizabeth L. Allwood, Vice President and
Assistant Secretary.
Assistant Vice President and Assistant Secretary,
Jones & Babson, Inc. Vice President and Assistant
Secretary, David L. Babson Growth Fund, Inc., D.L.
Babson Money Market Fund, Inc., D.L. Babson Tax-
Free Income Fund, Inc., Babson Enterprise Fund,
Inc., Babson Enterprise Fund II, Inc., Babson-
Stewart Ivory International Fund, Inc., D.L. Babson
Bond Trust, Scout Stock Fund, Inc., Scout Bond
Fund, Inc., Scout Money Market Fund, Inc., Scout
Tax-Free Money Market Fund, Inc., Scout Regional
Fund, Inc., Scout WorldWide Fund, Inc., Scout
Balanced Fund, Inc., Buffalo Balanced Fund, Inc.,
Buffalo Equity Fund, Inc., Buffalo High Yield Fund,
Inc., Buffalo USA Global Fund, Inc.

Michael A. Brummel, Vice President, Assistant
Secretary and Assistant Treasurer.
Vice President, Jones & Babson, Inc., David L.
Babson Growth Fund, Inc., D.L. Babson Money
Market Fund, Inc., D.L. Babson Tax-Free Income
Fund, Inc., Babson Enterprise Fund, Inc., Babson
Enterprise Fund II, Inc., Shadow Stock Fund, Inc.,
Babson-Stewart Ivory International Fund, Inc., D.L.
Babson Bond Trust; Vice President, Assistant
Secretary and Assistant Treasurer, Scout Stock Fund,
Inc., Scout Bond Fund, Inc., Scout Money Market
Fund, Inc., Scout Tax-Free Money Market Fund,
Inc., Scout Regional Fund, Inc., Scout WorldWide
Fund, Inc., Scout Balanced Fund, Inc.; Buffalo
Balanced Fund, Inc., Buffalo Equity Fund, Inc.,
Buffalo High Yield Fund, Inc., Buffalo USA Global
Fund, Inc.

Martin A. Cramer, Vice President and Secretary.
Vice President and Secretary, Jones & Babson, Inc.,
David L. Babson Growth Fund, Inc., D.L. Babson
Money Market Fund, Inc., D.L. Babson Tax-Free
Income Fund, Inc., Babson Enterprise Fund, Inc.,
Babson Enterprise Fund II, Inc., Shadow Stock
Fund, Inc., Babson-Stewart Ivory International Fund,
Inc., D.L. Babson Bond Trust; Scout Stock Fund,
Inc., Scout Bond Fund, Inc., Scout Money Market
Fund, Inc., Scout Tax-Free Money Market Fund,
Inc., Scout Regional Fund, Inc., Scout WorldWide
Fund, Inc., Scout Balanced Fund, Inc.; Buffalo
Balanced Fund, Inc., Buffalo Equity Fund, Inc.,
Buffalo High Yield Fund, Inc., Buffalo USA Global
Fund, Inc.

Constance E. Martin, Vice President.
Assistant Vice President, Jones & Babson, Inc. Vice
President, David L. Babson Growth Fund, Inc., D.L.
Babson Money Market Fund, Inc., D.L. Babson Tax-
Free Income Fund, Inc., Babson Enterprise Fund,
Inc., Babson Enterprise Fund II, Inc., Babson-
Stewart Ivory International Fund, Inc., D.L. Babson
Bond Trust, Scout Stock Fund, Inc., Scout Bond
Fund, Inc., Scout Money Market Fund, Inc., Scout
Tax-Free Money Market Fund, Inc., Scout Regional
Fund, Inc., Scout WorldWide Fund, Inc., Scout
Balanced Fund, Inc., Buffalo Balanced Fund, Inc.,
Buffalo Equity Fund, Inc., Buffalo High Yield Fund,
Inc., Buffalo USA Global Fund, Inc.

Roland W. Whitridge, Vice President-Portfolio.
Sr. Vice President and Director, David L. Babson &
Co. Inc., One Memorial Drive, Cambridge,
Massachussetts 02142; Vice President-Portfolio,
Shadow Stock Fund, Inc.

Remuneration of Officers and Directors. None of
the officers or directors will be remunerated by the
Fund for their normal duties and services. Their
compensation and expenses arising out of normal
operations will be paid by Jones & Babson, Inc.
under the provisions of the Management Agreement.

<TABLE>
<CAPTION>
COMPENSATION TABLE

Pension or Estimated Total
Aggregate Retirement Annual Compensation
Name of Compensation Benefits Accrued Benefits From All Babson
Director From each As Part of Fund Upon Funds Paid to
Fund Expenses Retirement Directors**
______________ ____________ ________________ __________ _____________
</CAPTION>
<S> <C> <C> <C> <C>
Larry D. Armel* -- -- -- --
Francis C. Rood $7,250 -- -- $7,250
William H. Russell $7,250 -- -- $7,500
H. David Rybolt $7,250 -- -- $7,250
</TABLE>
______________ ____________ ________________ ___________ _____________

* As an "interested director," Mr. Armel received no compensation for
his services as a director.
** The amounts reported in this column reflect the total compensation
paid to each director for his services as a director of nine Babson
Funds during the fiscal year ended June 30, 1996. Directors fees are
paid by the Funds' manager and not by the Funds themselves.

Messrs. Rood, Russell and Rybolt have no
financial interest in, nor are they affiliated with,
either Jones & Babson, Inc. or David L. Babson &
Co. Inc.

The Audit Committee of the Board of Directors is
composed of Messrs. Rood, Russell and Rybolt.

The Officers and Directors of the Fund as a group
own less than 1% of the Fund.

The Fund will not hold annual meetings except as
required by the Investment Company Act of 1940
and other applicable laws. The Fund is a Maryland
corporation. Under Maryland law, a special meeting
of stockholders of the Fund must be held if the Fund
receives the written request for a meeting from the
stockholders entitled to cast at least 25% of all the
votes entitled to be cast at the meeting. The Fund
has undertaken that its Directors will call a meeting
of stockholders if such a meeting is requested in
writing by the holders of not less than 10% of the
outstanding shares of the Fund. To the extent
required by the undertaking, the Fund will assist
shareholder communications in such matters.

CUSTODIAN

The Fund's assets are held for safekeeping by an
independent custodian, UMB Bank, n.a. This means
the bank, rather than the Fund, has possession of the
Fund's cash and securities. The custodian bank is
not responsible for the Fund's investment
management or administration. But, as directed by
the Fund's officers, it delivers cash to those who have
sold securities to the Fund in return for such
securities, and to those who have purchased portfolio
securities from the Fund, it delivers such securities
in return for their cash purchase price. It also
collects income directly from issuers of securities
owned by the Fund and holds this for payment to
shareholders after deduction of the Fund's expenses.
The custodian is compensated for its services by the
manager. There is no charge to the Fund.

INDEPENDENT AUDITORS

The Fund's financial statements are audited
annually by independent auditors approved by the
directors each year, and in years in which an annual
meeting is held the directors may submit their
selection of independent auditors to the shareholders
for ratification. Ernst & Young LLP, One Kansas
City Place, 1200 Main Street, Suite 2000, Kansas
City, Missouri 64105, is the Fund's present
independent auditors.

Reports to shareholders will be published at least
semiannually.

OTHER JONES & BABSON FUNDS

The Fund is one of nine no-load funds comprising
the Babson Mutual Fund Group managed by Jones &
Babson, Inc. in association with its investment
counsel, David L. Babson & Co. Inc. The other
funds are:

EQUITY FUNDS

DAVID L. BABSON GROWTH FUND, INC.
was organized in 1960, with the objective of long-
term growth of both capital and dividend income
through investment in the common stocks of well-
managed companies which have a record of long
term above-average growth of both earnings and
dividends.

BABSON ENTERPRISE FUND, INC. was
organized in 1983, with the objective of long-term
growth of capital by investing in a diversified
portfolio of common stocks of smaller, faster-
growing companies with market capital of $15
million to $300 million at the time of purchase.
This Fund is intended to be an investment vehicle
for that part of an investor's capital which can
appropriately be exposed to above-average risk in
anticipation of greater rewards. This Fund is
currently closed to new shareholders.

BABSON ENTERPRISE FUND II, INC. was
organized in 1991, with the objective of long-term
growth of capital by investing in a diversified
portfolio of common stocks of smaller, faster-
growing companies which at the time of purchase
are considered by the Investment Adviser to be
realistically valued in the smaller company sector of
the market. This Fund is intended to be an
investment vehicle for that part of an investor's
capital which can appropriately be exposed to
above-average risk in anticipation of greater
rewards.

SHADOW STOCK FUND, INC. was organized
in 1987, with the objective of long-term growth of
capital that can be exposed to above-average risk in
anticipation of greater-than-average rewards. The
Fund expects to reach its objective by investing in
small company stocks called "Shadow Stocks," i.e.,
stocks that combine the characteristics of "small
stocks" (as ranked by market capitalization) and
"neglected stocks" (least held by institutions and
least covered by analysts).

BABSON-STEWART IVORY INTERNATIONAL
FUND, INC. was organized in 1987, with the
objective of seeking a favorable total return (from
market appreciation and income) by investing
primarily in a diversified portfolio of equity
securities (common stocks and securities
convertible into common stocks) of established
companies whose primary business is carried on
outside the United States.

FIXED INCOME FUNDS

D. L. BABSON BOND TRUST was organized in
1944, and has been managed by Jones & Babson,
Inc. since 1972, with the objective of a high level of
current income and reasonable stability of principal.
It offers two portfolios - Portfolio L and Portfolio S.

D. L. BABSON MONEY MARKET FUND,
INC. was organized in 1979, to provide investors
the opportunity to manage their money over the
short term by investing in high-quality short-term
debt instruments for the purpose of maximizing
income to the extent consistent with safety of
principal and maintenance of liquidity. It offers
two portfolios - Prime and Federal. Money market
funds are neither insured nor guaranteed by the
U.S. Government and there is no assurance that the
funds will maintain a stable net asset value.

D. L. BABSON TAX-FREE INCOME FUND,
INC. was organized in 1979, to provide
shareholders the highest level of regular income
exempt from federal income taxes consistent with
investing in quality municipal securities. It offers
three separate high-quality portfolios (including a
money market portfolio) which vary as to average
length of maturity. Income from the Tax-Free
Money Market portfolio may be subject to state and
local taxes, as well as the Alternative Minimum
Tax.

BUFFALO FUNDS

Jones & Babson also sponsors and manages the
Buffalo Group of Mutual Funds. They are:

BUFFALO BALANCED FUND, INC. was
organized in 1994, with the objective of long-term
capital growth and high current income through
investing in common stocks and secondarily by
investing in convertible bonds, preferred stocks
and convertible preferred stocks.

BUFFALO EQUITY FUND, INC. was
organized in 1994, with the objective of long-term
capital appreciation to be achieved primarily by
investment in common stocks. Realization of
dividend income is a secondary consideration.

BUFFALO HIGH YIELD FUND, INC. was
organized in 1994, with the objective of a high
level of current income and secondarily, capital
growth by investing primarily in high-yielding
fixed income securities.

BUFFALO USA GLOBAL FUND, INC. was
organized in 1994, with the objective of capital
growth by investing in common stocks of
companies based in the United States that receive
greater than 40% of their revenues or pre-tax
income from international operations.

A prospectus for any of the Funds may be obtained
from Jones & Babson, Inc., 2440 Pershing Road,
Suite G-15, Kansas City, Missouri 64108.

Jones & Babson, Inc. also sponsors seven mutual
funds which especially seek to provide services to
customers of affiliate banks of UMB Financial
Corporation. They are: Scout Stock Fund, Inc.,
Scout Bond Fund, Inc., Scout Money Market Fund,
Inc., Scout Tax-Free Money Market Fund, Inc.,
Scout Regional Fund, Inc., Scout WorldWide Fund,
Inc. and Scout Balanced Fund, Inc.

DESCRIPTION OF STOCK RATINGS

Standard & Poor's Earnings and Dividend
Rankings for Common Stocks (S&P) - Growth and
stability of earnings and dividends are deemed key
elements in establishing Standard & Poor's earnings
and dividend rankings for common stocks. Basic
scores are computed for earnings and dividends, then
adjusted by a set of predetermined modifiers for
growth, stability within long-term trend, and
cyclically. Adjusted scores for earnings and
dividends are then combined to yield a final score.
The final score is measured against a scoring matrix
determined by an analysis of the scores of a large
and representative sample of stocks. The rankings
are:
A+ Highest
A High
A- Above Average
B+ Average
B Below Average
B- Lower
C Lowest
D In Reorganization

Value Line Ratings of Financial Strength - The
financial strength of each of the companies reviewed
by Value Line is rated relative to all the others. The
ratings are:

A++ The very highest relative financial strength.
A+ Excellent financial position relative to other
companies.
A High grade relative financial strength.
B++ Superior financial health on a relative basis.
B+ Very good relative financial structure.
B Good overall relative financial structure.
C++ Satisfactory finances relative to other
companies.
C+ Below-average relative financial position.
C Poorest financial strength relative to other
major companies.

The ratings are based upon computer analysis of a
number of key variables that determine: (a)
financial leverage, (b) business risk and (c) company
size plus the judgment of their analysts and senior
editors regarding factors that cannot be quantified
across-the-board for all stocks. The primary
variables that are indexed and studied include equity
coverage of debt, equity coverage of intangibles,
"quick ratio" accounting methods, variability of
return, quality of fixed charge coverage, stock price
stability and company size.

DESCRIPTION OF COMMERCIAL
PAPER RATINGS

Moody's . . . Moody's commercial paper rating is
an opinion of the ability of an issuer to repay
punctually promissory obligations not having an
original maturity in excess of nine months. Moody's
has one rating - prime. Every such prime rating
means Moody's believes that the commercial paper
note will be redeemed as agreed. Within this single
rating category are the following classifications:

Prime - 1 Highest Quality
Prime - 2 Higher Quality
Prime - 3 High Quality

The criteria used by Moody's for rating a
commercial paper issuer under this graded system
include, but are not limited to the following factors:

(1) evaluation of the management of the issuer;

(2) economic evaluation of the issuer's industry
or industries and an appraisal of speculative
type risks which may be inherent in certain
areas;

(3) evaluation of the issuer's products in relation
to competition and customer acceptance;

(4) liquidity;

(5) amount and quality of long-term debt;

(6) trend of earnings over a period of ten years;

(7) financial strength of a parent company and
relationships which exist with the issuer; and

(8) recognition by the management of
obligations which may be present or may
arise as a result of public interest questions
and preparations to meet such obligations.

S&P . . . Standard & Poor's commercial paper
rating is a current assessment of the likelihood of
timely repayment of debt having an original maturity
of no more than 270 days. Ratings are graded into
four categories, ranging from "A" for the highest
quality obligations to "D" for the lowest. The four
categories are as follows:

"A" Issues assigned this highest rating are
regarded as having the greatest capacity for
timely payment. Issues in this category are
further refined with the designations 1, 2,
and 3 to indicate the relative degree of
safety.

"A-1" This designation indicates that the degree of
safety regarding timely payment is very
strong.

"A-2" Capacity for timely payment on issues with
this designation is strong. However, the
relative degree of safety is not as
overwhelming.

"A-3" Issues carrying this designation have a
satisfactory capacity for timely payment.
They are, however, somewhat more
vulnerable to the adverse effects of changes
in circumstances than obligations carrying
the higher designations.

"B" Issues rated "B" are regarded as having only
an adequate capacity for timely payment.
Furthermore, such capacity may be
damaged by changing conditions or short-
term adversities.

"C" This rating is assigned to short-term debt
obligations with a doubtful capacity for
payment.

"D" This rating indicates that the issuer is either
in default or is expected to be in default
upon maturity.

FINANCIAL STATEMENTS

The audited financial statements of the Fund
which are contained in the November 30, 1996,
Annual Report to Shareholders are incorporated
herein by reference.