Report of Independent Auditors
Board of Directors
of The Primary Trend Fund, Inc. and The Primary Income Funds, Inc.
In planning and performing our audit of the consolidated financial
statements of the Primary Trend Fund, Inc and The Primary Income
Funds, Inc. (comprised of The Primary Income Fund and the Primary
U.S. Government Fund) (the "Funds") for the year ended June 30,
2000, we considered their internal control, including control activities
for safeguarding securities, 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 internal control.
The management of the Funds 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 internal control. Generally,
internal controls that are relevant to an audit pertain to the Funds'
objective of preparing financial statements for external purposes that
are fairly presented in conformity with generally accepted accounting
principles. Those internal controls include the safeguarding of assets
against unauthorized acquisition, use, or disposition.
Because of inherent limitations in any internal control, misstatements
due to errors or fraud may occur and not be detected. Also,
projections of any evaluation of internal control to future periods are
subject to the risk that internal control may become inadequate
because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate.
Our consideration of 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 specific 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
consolidated 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 internal control, including control activities for
safeguarding securities, and its operation that we consider to be
material weaknesses as defined above as of June 30, 2000.
This report is intended solely for the information and use of the board
of directors and management of the Funds and the Securities and
Exchange Commission and is not intended to be and should not be
used by anyone other than these specified parties.
Ernst & Young
LLP
July 26, 2000
