<PAGE> PAGE 1
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001 A000000 THE AMERICAN FUNDS TAX-EXEMPT SERIES II
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022 C000001 42525
022 D000001 39891
022 A000002 SMITH BARNEY INC.
<PAGE> PAGE 2
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022 A000003 PAINE WEBBER INC.
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022 C000003 22990
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022 A000004 MORGAN STANLEY & CO. INC.
022 B000004 13-2655998
022 C000004 19956
022 D000004 25531
022 A000005 GOLDMAN, SACHS & CO.
022 B000005 13-5108880
022 C000005 22766
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022 A000006 MERRILL LYNCH, PIERCE, FENNER & SMITH INC.
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022 A000007 LEHMAN COMMERCIAL PAPER, INC.
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022 C000007 8132
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022 A000009 BEAR, STEARNS & CO. INC.
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<PAGE> PAGE 3
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<PAGE> PAGE 4
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<PAGE> PAGE 5
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<PAGE> PAGE 6
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<PAGE> PAGE 7
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<PAGE> PAGE 8
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080 A000100 NATIONAL UNION FIRE INSURANCE COMPANY
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<PAGE> PAGE 9
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SIGNATURE JULIE F. WILLIAMS
TITLE SECRETARY
INDEPENDENT AUDITORS' REPORT
The Tax-Exempt Fund of California, Inc.:
In planning and performing our audit of the financial
statements of Tax-Exempt Fund of California, Inc., (the
"Fund") for the year ended August 31, 1998 (on which we
have issued our report dated September 30, 1998), we
considered its internal control, including control
activities for safeguarding securities, in order to
determine our auditing procedures for the purpose of
expressing our opinion on the financial statements and to
comply with the requirements of Form N-SAR, and not to
provide assurance on the Fund's internal control.
The management of the Fund is responsible for establishing
and maintaining internal control. In fulfilling this
responsibility, estimates and judgments by management are
required to assess the expected benefits and related costs
of controls. Generally, controls that are relevant to an
audit pertain to the entity's objective of preparing
financial statements for external purposes that are fairly
presented in conformity with generally accepted accounting
principles. Those controls include the safeguarding of
assets against unauthorized acquisition, use, or
disposition.
Because of inherent limitations in any internal control,
errors or fraud may occur and may not be detected. Also,
projection of any evaluation of internal control to future
periods is subject to the risk that it may become
inadequate because of changes in conditions or that the
effectiveness of the design and operation may deteriorate.
Our consideration of the Fund's internal control would not
necessarily disclose all matters in internal control that
might be material weaknesses under standards established
by the American Institute of Certified Public Accountants.
A material weakness is a condition in which the design or
operation of one or more of the internal control
components does not reduce to a relatively low level the
risk that errors or fraud in amounts that would be
material in relation to the financial statements being
audited may occur and not be detected within a timely
period by employees in the normal course of performing
their assigned functions. However, we noted no matters
involving the Fund's internal control and its operation,
including controls for safeguarding securities, that we
consider to be material weaknesses as defined above as of
August 31, 1998.
This report is intended solely for the information and use
of management, the Board of Directors of Tax-Exempt Fund
of California, Inc., and the Securities and Exchange
Commission.
DELOITTE & TOUCHE LLP
Los Angeles, California
September 30, 1998
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