TEMPLETON GROWTH FUND INC, N-30D, 1999-05-04

TEMPLETON GROWTH FUND INC
N-30D, 1999-05-04

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SEMI ANNUAL REPORT

[GRAPHIC]
February 28, 1999

TEMPLETON GROWTH FUND, INC.

[LOGO FRANKLIN TEMPLETON]

PAGE
[LOGO CELEBRATING OVER 50 YEARS]

Thank you for investing with Franklin Templeton. We encourage our investors to
maintain a long-term perspective and remember that all securities markets move
both up and down, as do mutual fund share prices. We appreciate your past
support and look forward to serving your investment needs in the years ahead.

In 1992, Sir John Templeton retired after a 50-year career of helping investors
manage their money. Currently he devotes all of his time and efforts to the John
Templeton Foundation. A major portion of his assets remain invested in the
Templeton funds which are managed by many of the investment professionals he
selected and trained.

[PHOTO OF MARK G. HOLOWESKO, CFA]

MARK G. HOLOWESKO, CFA
Portfolio Manager
Templeton Growth Fund

Mark G. Holowesko is president and portfolio manager of Templeton Growth Fund
and several other Templeton funds. He joined the Templeton organization in 1985
in Nassau, Bahamas, and serves as chief investment officer of equity research
worldwide, as well as an officer and director of Templeton Worldwide Inc. Mr.
Holowesko received a B.A. in economics from Holy Cross College and an M.B.A.
from Babson College. He is a Chartered Financial Analyst and a former director
of the International Society of Financial Analysts.

PAGE

SHAREHOLDER LETTER

Your Fund's Goal: Templeton Growth Fund seeks long-term capital growth. Under
normal market conditions, the Fund will invest primarily in the equity
securities of companies located anywhere in the world, including emerging
markets.

Dear Shareholder:

We are pleased to bring you this semiannual report of Templeton Growth Fund,
which covers the six months ended February 28, 1999. During this time,
relatively low interest rates, benign inflation and increasing productivity
contributed to a rise in many global equity markets, and on February 28, 1999,
the Morgan Stanley Capital International(R) (MSCI) World Index was 22.77% higher
than on September 1, 1998.(1) Within this environment, the Fund's Class A shares
provided an 11.09% six-month cumulative total return, as shown in the
Performance Summary on page 8.

CONTENTS

Shareholder Letter ............. 1

Performance Summary ............ 7

Financial Highlights &
Statement of Investments ....... 10

Financial Statements ........... 22

Notes to Financial
Statements ..................... 25

[FUND CATEGORY PYRAMID]

Global
Growth
Growth & Income
Income
Tax-Free Income

(1). Source: Standard & Poor's(R) Micropal. The unmanaged MSCI World Index
tracks the performance of approximately 1,500 securities in 23 countries, and is
designed to measure world stock market performance. It includes reinvested
dividends. One cannot invest directly in an index, nor is an index
representative of the Fund's portfolio.

You will find a complete listing of the Fund's portfolio holdings, including
dollar value and number of shares or principal amount, beginning on page 14 of
this report.

PAGE

GEOGRAPHIC DISTRIBUTION
Based on Total Net Assets
2/28/99

[THIS CHART SHOWS IN BAR CHART FORMAT THE GEOGRAPHIC DISTRIBUTION OF TEMPLETON
GROWTH FUND'S PORTFOLIO HOLDINGS ON FEBRUARY 28, 1999, BASED ON TOTAL NET
ASSETS.]

European Stocks 32.7%
North American Stocks 30.5%
Asian Stocks 16.2%
Latin American Stocks 8.0%
Australian & New Zealand Stocks 4.0%
Mid-East/African Stocks 1.0%
Fixed-Income Securities 6.0%
Short-Term Investments & Other Net Assets 1.6%

The underperformance of the Fund relative to the index was largely due to our
value-oriented investment philosophy, which involves purchasing securities we
consider undervalued and holding them until their value is recognized by the
market. During the period under review, "growth" investors seemed to ignore
fundamental values, as share prices were pushed to record levels in a
momentum-driven market. At the end of the reporting period, the MSCI World Index
was trading at 29.8 times earnings, 14.7 times cash earnings and 3.55 times book
value. Globally, the most expensive stocks, as measured by price-to-earnings
(P/E) ratios, outperformed the least expensive by 2.8 times. In North America,
the ratio was 5.7 times, and in Europe, 4.1 times.(2)

ASIA

Improving economic conditions in many Asian countries drove up stock prices
there and, although they remained below their collective peak, Far East markets,
as measured by the Morgan Stanley Capital International(R) (MSCI) Far East
Index, rose 24% on average during the reporting period.(3) The best performing
Asian equity market was Korea's, which rose 91.8% in U.S. dollar terms.(4)

On February 28, 1999, Hong Kong represented the Fund's largest country weighting
in Asia. In our opinion, the long-term impact of the region's financial problems
on many quality companies has been over-estimated. For example, shares of HSBC
Holdings PLC, a bank and financial organization with

(2). Source: MSCI. Ratios calculated on a cap weighted basis.

(3). Source: Standard & Poor's Micropal. The unmanaged MSCI Far East Index
includes approximately 400 companies representing the stock markets of Hong
Kong, Japan and Singapore. One cannot invest directly in an index, nor is an
index representative of the Fund's portfolio.

(4). Source: Bloomberg.

PAGE
subsidiaries in Asia, Europe, the U.S. and the Middle East, were selling at a
discount to those of other international banks on a price-to-book-value basis as
of February 28, 1999.

EUROPE

Events culminating in the euro's successful introduction on January 1, 1999,
helped boost many European equity markets, and the Morgan Stanley Capital
International(R) All Country (MSCI AC) Europe Index rose 10.84% from September
1, 1998 to February 28, 1999.(5) In mainland Europe, we bought additional shares
of UPM-Kymmene Corp., one of the world's largest forest product companies.
Despite a management team which, in our opinion, is excellent, its shares were
trading at a single-digit P/E ratio and at a discount to the company's peer
group. We also took advantage of opportunities to buy shares of several European
energy and chemical companies, many of which are consolidating in efforts to
enhance value. And in the United Kingdom, we initiated a position in British
Airways PLC, an international and domestic passenger airline, which we believe
could benefit from higher operating margins resulting from improved cost
efficiencies and lower fuel prices.

LATIN AMERICA

Although Latin American companies saw a record number of mergers, equity markets
in the region posted mixed results during the reporting period. Mexico's market
rose 44.4%, Argentina's 7.2%, and Brazil's, where the lack of a strong

TOP 10 EQUITY HOLDINGS
2/28/99

[THIS CHART SHOWS IN TABLE FORMAT THE TOP 10 EQUITY HOLDING OF TEMPLETON
GROWTH FUND AS OF FEBRUARY 28, 1999, BASED ON TOTAL NET ASSETS.]

NAME, % OF TOTAL
INDUSTRY, COUNTRY NET ASSETS
- --------------------------------------------------------------
HSBC Holdings PLC
Banking, Hong Kong* 2.3%

General Motors Corp.
Automobiles, U.S. 1.9%

Koninklijke Philips Electronics NV
Electrical & Electronics,
Netherlands 1.9%

Boeing Co.
Aerospace & Military
Technology, U.S. 1.8%

Telefonos de Mexico SA
(Telmex), L, ADR
Telecommunications, Mexico 1.6%

YPF Sociedad Anonima, ADR
Energy Sources, Argentina 1.5%

Cheung Kong Holdings Ltd.
Multi-Industry, Hong Kong* 1.4%

Ford Motor Co.
Automobiles, U.S. 1.4%

National Australia Bank Ltd.
Banking, Australia 1.4%

American Stores Co.
Merchandising, U.S. 1.4%

* Hong Kong reverted to the sovereignty of China on July 1, 1997.

(5). Source: Standard & Poor's Micropal. The unmanaged MSCI AC Europe Index
measures the weighted average performance, in U.S. dollars, of about 60% of the
market capitalization listed on European stock exchanges (approximately 700
securities). It includes reinvested dividends. One cannot invest directly in an
index, nor is an index representative of the Fund's portfolio.

PAGE
international financial policy kept the equity market under pressure, declined
21.4%.(6) As of February 28, 1999, our Brazilian holdings included shares of
several Telebras subsidiaries which we believed were undervalued. The portfolio
also included a position in Telmex, a provider of local and international
telephone services in Mexico. In spite of increased competition arising from the
deregulation of the Mexican telephone market, Telmex experienced only modest
market-share loss during the six months under review.

UNITED STATES

During the reporting period, the U.S. economy performed extremely well. Money
flowing to the perceived safety of the U.S. market, and frenzied purchasing of
Internet-related stocks pushed many prices to record levels, with the S&P 500(R)
Index rising from 994.24 on September 1, 1998 to 1,238.33 on February 28, 1999.
(7)

However, declines in share prices of cyclical and commodity related companies,
as well as underperformance of the average stock relative to more popular blue
chip stocks, enabled us to discover some stocks we considered bargains in the
U.S. We took advantage of weakness in the energy sources sector by adding
positions in Burlington Resources Inc., Occidental Petroleum Corp., and Valero
Energy Corp. As of February 28, 1999, automobiles, aerospace and military
technology, energy sources, and

TOP 10 COUNTRIES
REPRESENTED IN THE FUND*
Equity Investments
(92.4% of Total Net Assets)
2/28/99

% OF TOTAL
COUNTRY NET ASSETS
-------------------------------
United States 27.6%

United Kingdom 11.7%

Hong Kong** 10.8%

Netherlands 4.6%

Sweden 4.4%

Australia 3.8%

Germany 3.4%

Argentina 2.7%

France 2.7%

Mexico 2.6%

* Does not include fixed-income securities and short-term investments and
other net assets.

** Hong Kong reverted to the sovereignty of China on July 1, 1997.

(6). Source: Bloomberg.
(7). Source: Standard & Poor's Micropal. Index is unmanaged and includes
reinvested dividends. One cannot invest directly in an index.

PAGE
forest product and paper companies comprised the Fund's main U.S. holdings.
General Motors Corp., one of the top holdings, has been experiencing favorable
cost and margin trends, and we believe its North American operations could begin
to show a turnaround. Boeing Co., the world's leading commercial aircraft
manufacturer, has been focusing on profitability, reducing costs and reexamining
its manufacturing process. Its share price, in our opinion, does not reflect the
possibility of replacement demand for American commercial aircraft, increased
defense spending, or a resurgence of Asian orders.

Looking forward, we are optimistic about the Fund's prospects, and remain
confident in our value style of investing. It has rewarded shareholders with
long-term results in the past, and we firmly believe it would be wrong to change
our style now.

This discussion reflects our views, opinions and portfolio holdings as of
February 28, 1999, the end of the reporting period. However, market and economic
conditions are changing constantly, which can be expected to affect our
strategies and portfolio composition. Although past performance is not
predictive of future results, these insights may help you better understand our
investment and management philosophy.

Please remember, there are special risks associated with global investing
related to market, currency, economic, social, political and other factors.
Emerging market securities involve similar but heightened risks, in addition to
those associated with the

PAGE
relatively small size and lesser liquidity of those markets. Investing in any
emerging market means accepting a certain amount of volatility and, in some
cases, severe market corrections. For example, Taiwan's equity market has
increased 951% in the last 15 years, but has suffered six declines of more than
20% during that time.(8) While short-term volatility can be disconcerting,
declines in excess of 50% are not unusual in emerging markets. These risks and
considerations are discussed in the Fund's prospectus.

Thank you for investing in Templeton Growth Fund. We welcome your comments and
look forward to serving you in the future.

Sincerely,

/s/ Mark G. Holowesko
- ---------------------------
Mark G. Holowesko, CFA
President
Templeton Growth Fund, Inc.

(8). Source: Bloomberg. Based on quarterly percentage price change over 15 years
ended December 31, 1998. Market returns are measured in U.S. dollars and do not
include reinvested dividends.

PAGE
PERFORMANCE SUMMARY AS OF 2/28/99

Distributions will vary based on earnings of the Fund's portfolio and any
profits realized from the sale of the portfolio's securities, as well as the
level of each class' operating expenses. Past distributions are not indicative
of future trends. All total returns include reinvested distributions at net
asset value.

PRICE AND DISTRIBUTION INFORMATION (9/1/98 - 2/28/99)

<TABLE>
<CAPTION>
CLASS A CHANGE 2/28/99 8/31/98
- ---------------------------------------------------------------
<S> <C> <C> <C>
Net Asset Value - $0.65 $16.13 $16.78
</TABLE>

<TABLE>
<CAPTION>
Distributions
-------------
<S> <C>
Dividend Income $0.4050
Long-Term Capital Gain $1.6950
Short-Term Capital Gain $0.3400
TOTAL $2.4400
</TABLE>

<TABLE>
<CAPTION>
Class B Change 2/28/99 1/1/99
- ---------------------------------------------------------------
<S> <C> <C> <C>
Net Asset Value - $0.25 $16.12 $16.37
</TABLE>

<TABLE>
<CAPTION>
Class C Change 2/28/99 8/31/98
- ---------------------------------------------------------------
<S> <C> <C> <C>
Net Asset Value - $0.63 $15.86 $16.49
</TABLE>

<TABLE>
<CAPTION>
Distributions
-------------
<S> <C>
Dividend Income $0.3104
Long-Term Capital Gain $1.6950
Short-Term Capital Gain $0.3400
TOTAL $2.3454
</TABLE>

<TABLE>
<CAPTION>
Advisor Class Change 2/28/99 8/31/98
- ----------------------------------------------------------------
<S> <C> <C> <C>
Net Asset Value - $0.65 $16.15 $16.80
</TABLE>

<TABLE>
<CAPTION>
Distributions
-------------
<S> <C>
Dividend Income $0.4398
Long-Term Capital Gain $1.6950
Short-Term Capital Gain $0.3400
TOTAL $2.4748
</TABLE>

CLASS A (formerly Class I):
Subject to the current, maximum 5.75% initial sales charge. Prior to July 1,
1992, Fund shares were offered at a higher initial sales charge. Thus, actual
total returns would have been lower. On January 1, 1993, the Fund implemented a
Rule 12b-1 plan, which affects subsequent performance.

CLASS B:
Subject to no initial sales charge, but subject to a contingent deferred sales
charge (CDSC) declining from 4% to 0% over six years. These shares have higher
annual fees and expenses than Class A shares.

CLASS C (formerly Class II):
Subject to 1% initial sales charge and 1% CDSC for shares redeemed within 18
months of investment. These shares have higher annual fees and expenses than
Class A shares.

ADVISOR CLASS:
No initial sales charge or Rule 12b-1 fees and are available to a limited class
of investors.

Templeton Growth Fund paid distributions derived from long-term capital gains of
$1.6950 per share in October, 1998. The Fund hereby designates such
distributions as capital gain dividends per Internal Revenue Code Section 852
(b)(3).

Past performance is not predictive of future results.

PAGE
(1). Cumulative total return represents the change in value of an investment
over the periods indicated and does not include sales charges.

(2). Average annual total return represents the average annual change in value
of an investment over the periods indicated and includes the current,
applicable, maximum sales charge(s) for that class. Six-month return has not
been annualized. Since Class B shares have existed for less than one year, the
figures for that class represent aggregate total return from inception;
therefore, average annual total returns are not provided.

(3). These figures represent the value of a hypothetical $10,000 investment in
the Fund over the periods indicated and include the current, applicable, maximum
sales charge(s) for that class.

(4). One-year total return represents the change in value of an investment over
the one-year periods ended on the specified dates and does not include sales
charges.

(5). On January 2, 1997, the Fund began selling Advisor Class shares to certain
eligible investors as described in the prospectus. This share class does not
have sales charges or a Rule 12b-1 plan. Performance quotations have been
calculated as follows: (a) For periods prior to January 2, 1997, figures reflect
Class A performance, excluding the effect of the Class A sales charge, but
including the effect of Rule 12b-1 fees and other Class A expenses; and (b) for
periods after January 1, 1997, figures reflect actual Advisor Class performance,
including the deduction of all fees and expenses applicable to that class. Since
January 2, 1997 (commencement of sales), the cumulative and average annual total
return of Advisor Class shares were 13.21% and 5.92% respectively.

Since markets can go down as well as up, investment return and principal value
will fluctuate with market conditions, currency volatility and the social,
economic and political climates of countries where the Fund invests. Emerging
markets involve heightened risks related to the same factors, in addition to
those associated with their relatively small size and lesser liquidity. You may
have a gain or loss when you sell your shares.

PERFORMANCE

<TABLE>
<CAPTION>
INCEPTION
CLASS A 6-MONTH 1-YEAR 5-YEAR 10-YEAR (11/29/54)
- -----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Cumulative
Total Return (1) 11.09% -9.07% 58.02% 216.04% 37,541.64%

Average Annual
Total Return (2) 4.73% -14.29% 8.29% 11.54% 14.19%

Value of $10,000
Investment (3) $10,473 $8,571 $14,890 $29,794 $3,547,753
</TABLE>

<TABLE>
<CAPTION>
2/28/95 2/28/96 2/28/97 2/28/98 2/28/99
-----------------------------------------------------------
<S> <C> <C> <C> <C> <C>
One-Year
Total Return (4) 0.10% 21.90% 19.75% 18.93% -9.07%
</TABLE>

<TABLE>
<CAPTION>
INCEPTION
CLASS B (1/1/99)
- --------------------------------------------------------------
<S> <C>
Cumulative Total Return (1) - 1.53%
Aggregate Total Return (2) - 5.47%
Value of $10,000 Investment (3) $9,453
</TABLE>

<TABLE>
<CAPTION>
INCEPTION
CLASS C 6-MONTH 1-YEAR 3-YEAR (5/1/95)
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Cumulative
Total Return (1) 10.79% - 9.69% 26.61% 45.47%
Average Annual
Total Return (2) 8.71% - 11.35% 7.82% 9.98%
Value of $10,000
Investment (3) $10,871 $8,865 $12,535 $14,402
</TABLE>

<TABLE>
<CAPTION>
2/28/97 2/28/98 2/28/99
-----------------------------------
<S> <C> <C> <C>
One-Year
Total Return (4) 18.77% 18.05% - 9.69%
</TABLE>

<TABLE>
<CAPTION>
INCEPTION
ADVISOR CLASS (5) 6-MONTH 1-YEAR 5-YEAR 10-YEAR (11/29/54)
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Cumulative
Total Return (1) 11.31% - 8.82% 58.85% 217.70% 37,739.14%
Average Annual
Total Return (2) 11.31% - 8.82% 9.70% 12.25% 14.36%
Value of $10,000
Investment (3) $11,131 $9,118 $15,885 $31,770 $3,783,914
</TABLE>

<TABLE>
<CAPTION>
2/28/95 2/28/96 2/28/97 2/28/98 2/28/99
------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
One-Year
Total Return (4) 0.10% 21.90% 19.75% 19.24% - 8.82%
</TABLE>

Past performance is not predictive of future results.

PAGE

TEMPLETON GROWTH FUND

CLASS A

If you had invested $10,000 in Templeton Growth Fund - Class A at inception, it
would have been worth more than $3.5 million on February 28, 1999. The chart
below illustrates the cumulative total return of a hypothetical $10,000
investment in the Fund on November 29, 1954 (inception), with income dividends
and capital gains reinvested as shown through February 28, 1999.*

$3,547,753
Total value of investment
2/28/99

[GRAPH]

[THE FOLLOWING CHART SHOWS IN GRAPH FORMAT THE CUMULATIVE TOTAL RETURN OF A
$10,000 INVESTMENT IN THE FUND ON NOVEMBER 29, 1954 (INCEPTION) AS OF FEBRUARY
28, 1999.]

PRINCIPAL INCOME PRINCIPAL + CAP GAINS PRINCIPAL + TOTAL VALUE
DIVIDENDS CAP GAINS
<S> <C> <C> <C> <C> <C> <C>

11/29/54 $9,425 $0 $9,425 $0 $9,425 $9,425
12/31/54 $9,576 $0 $9,576 $0 $9,576 $9,576
12/31/55 $10,250 $0 $10,250 $0 $10,250 $10,250
12/31/56 $10,726 $0 $10,726 $0 $10,726 $10,726
12/31/57 $8,911 $0 $8,911 $0 $8,911 $8,911
12/31/58 $13,261 $0 $13,261 $0 $13,261 $13,261
12/31/59 $15,118 $0 $15,118 $0 $15,118 $15,118
12/31/60 $17,210 $0 $17,210 $0 $17,210 $17,210
12/31/61 $20,358 $0 $20,358 $0 $20,358 $20,358
12/31/62 $17,606 $0 $17,606 $0 $17,606 $17,606
12/31/63 $18,511 $0 $18,511 $0 $18,511 $18,511
12/31/64 $23,506 $296 $23,802 $0 $23,506 $23,802
12/31/65 $28,313 $760 $29,073 $0 $28,313 $29,073
12/31/66 $26,484 $1,048 $27,532 $0 $26,484 $27,532
12/31/67 $29,632 $1,682 $31,314 $0 $29,632 $31,314
12/31/68 $40,283 $2,857 $43,140 $0 $40,283 $43,140
12/31/69 $47,446 $4,176 $51,622 $0 $47,446 $51,622
12/31/70 $43,676 $4,622 $48,298 $0 $43,676 $48,298
12/31/71 $51,555 $6,320 $57,875 $1,013 $52,568 $58,888
12/31/72 $84,354 $11,271 $95,625 $3,637 $87,991 $99,262
12/31/73 $69,085 $9,801 $78,886 $10,529 $79,614 $89,415
12/31/74 $58,719 $9,469 $68,188 $10,435 $69,154 $78,623
12/31/75 $79,077 $14,655 $93,732 $14,451 $93,528 $108,183
12/31/76 $113,384 $22,907 $136,291 $22,456 $135,840 $158,747
12/31/77 $126,955 $28,103 $155,058 $36,033 $162,988 $191,091
12/31/78 $149,482 $35,006 $184,488 $43,311 $192,793 $227,799
12/31/79 $184,071 $47,071 $231,142 $57,794 $241,865 $288,936
12/31/80 $214,609 $61,327 $275,936 $87,798 $302,407 $363,734
12/31/81 $210,086 $66,829 $276,915 $85,947 $296,033 $362,862
12/31/82 $213,478 $80,038 $293,516 $108,561 $322,039 $402,077
12/31/83 $278,228 $114,668 $392,896 $141,489 $419,717 $534,385
12/31/84 $269,463 $122,307 $391,770 $154,204 $423,667 $545,974
12/31/85 $321,206 $161,412 $482,618 $215,055 $536,261 $697,673
12/31/86 $363,902 $208,249 $572,151 $273,680 $637,582 $845,831
12/31/87 $331,668 $219,095 $550,763 $321,336 $653,004 $872,099
12/31/88 $388,784 $293,580 $682,364 $395,521 $784,305 $1,077,885
12/31/89 $445,618 $385,960 $831,578 $489,482 $935,100 $1,321,060
12/31/90 $370,405 $367,034 $737,439 $463,998 $834,403 $1,201,437
12/31/91 $436,286 $476,190 $912,476 $665,363 $1,101,649 $1,577,839
12/31/92 $406,597 $482,422 $889,019 $755,314 $1,161,911 $1,644,333
12/31/93 $498,209 $623,674 $1,121,883 $1,060,095 $1,558,304 $2,181,978
12/31/94 $458,906 $610,067 $1,068,973 $1,130,853 $1,589,759 $2,199,826
12/31/95 $490,575 $713,327 $1,203,902 $1,432,193 $1,922,768 $2,636,095
12/31/96 $552,497 $881,788 $1,434,285 $1,743,583 $2,296,080 $3,177,868
12/31/97 $548,540 $961,807 $1,510,347 $2,181,732 $2,730,272 $3,692,079
12/31/98 $462,866 $892,107 $1,354,973 $2,245,565 $2,708,431 $3,600,538
2/28/99 $456,082 $879,028 $1,335,110 $2,212,643 $2,668,725 $3,547,753

</TABLE>

Total Value of Investment with Capital Gains and Dividends Reinvested

Value of Investment with Capital Gains Reinvested

Value of Investment with Dividends Reinvested

* Cumulative total return represents the change in value of an investment over
the indicated period. All figures have been restated to reflect the current,
maximum 5.75% initial sales charge; thus actual total return for purchasers of
shares during the periods shown may differ. Prior to July 1, 1992, these shares
were offered at a higher initial sales charge. On January 1, 1993, the Fund's
Class A shares implemented a plan of distribution under Rule 12b-1, which will
affect subsequent performance.

Except as noted, all figures assume reinvestment of dividends and capital gains
at net asset value. Since markets can go down as well as up, investment return
and principal value will fluctuate with market conditions, and you may have a
gain or loss when you sell your shares.

The historical data shown above pertain only to Class A shares of the Fund. The
Fund offers other share classes, subject to different fees and expenses, which
will affect their performance. Please see the prospectus for more details.
Past performance is not predictive of future results.

PAGE
TEMPLETON GROWTH FUND, INC.
Financial Highlights

<TABLE>
<CAPTION>
CLASS A
------------------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED AUGUST 31,
FEBRUARY 28, 1999 ----------------------------------------------------------------
(UNAUDITED) 1998 1997 1996 1995 1994
------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
(For a share outstanding throughout the
period)
Net asset value, beginning of period... $16.78 $22.47 $18.75 $18.96 $18.95 $17.47
------------------------------------------------------------------------------------
Income from investment operations:
Net investment income................. .15 .50 .54 .50 .39 .29
Net realized and unrealized gains
(losses)............................ 1.64 (2.76) 4.48 1.34 1.20 2.58
------------------------------------------------------------------------------------
Total from investment operations....... 1.79 (2.26) 5.02 1.84 1.59 2.87
------------------------------------------------------------------------------------
Less distributions from:
Net investment income................. (.41) (.55) (.49) (.44) (.29) (.27)
Net realized gains.................... (2.03) (2.88) (.81) (1.61) (1.29) (1.12)
------------------------------------------------------------------------------------
Total distributions.................... (2.44) (3.43) (1.30) (2.05) (1.58) (1.39)
------------------------------------------------------------------------------------
Net asset value, end of period......... $16.13 $16.78 $22.47 $18.75 $18.96 $18.95
------------------------------------------------------------------------------------
------------------------------------------------------------------------------------
Total Return*.......................... 11.09% (12.61)% 28.28% 10.85% 9.51% 17.47%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's)...... $11,710,624 $11,116,564 $12,129,283 $8,450,737 $6,964,298 $5,611,560
Ratios to average net assets:
Expenses.............................. 1.12%** 1.08% 1.08% 1.09% 1.12% 1.10%
Net investment income................. 1.77%** 2.53% 2.81% 2.87% 2.40% 1.76%
Portfolio turnover rate................ 11.77% 48.23% 41.81% 19.63% 35.21% 27.35%
</TABLE>

*Total return does not reflect sales commissions and is not annualized.
**Annualized.
10

PAGE

TEMPLETON GROWTH FUND, INC.
Financial Highlights (continued)

<TABLE>
<CAPTION>
CLASS B
-----------------
PERIOD ENDED
FEBRUARY 28, 1999
(UNAUDITED)+
-----------------
<S> <C>
PER SHARE OPERATING PERFORMANCE
(For a share outstanding throughout the period)
Net asset value, beginning of period........................ $16.37
-----------------
Income from investment operations:
Net investment income...................................... --
Net realized and unrealized losses......................... (.25)
-----------------
Total from investment operations............................ (.25)
-----------------
Net asset value, end of period.............................. $16.12
-----------------
-----------------
Total Return*............................................... (1.53)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's)........................... $2,892
Ratios to average net assets:
Expenses................................................... 1.94%**
Net investment income...................................... .07%**
Portfolio turnover rate..................................... 11.77%
</TABLE>

*Total return does not reflect the contingent deferred sales charge and is not
annualized.
**Annualized.
+For the period January 1, 1999 (effective date) to February 28, 1999.
11

PAGE
TEMPLETON GROWTH FUND, INC.
Financial Highlights (continued)

<TABLE>
<CAPTION>
CLASS C
------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED AUGUST 31,
FEBRUARY 28, 1999 -------------------------------------------------
(UNAUDITED) 1998 1997 1996 1995+
------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
(For a share outstanding throughout the period)
Net asset value, beginning of period........... $16.49 $22.18 $18.57 $18.90 $17.48
------------------------------------------------------------------------
Income from investment operations:
Net investment income......................... .10 .38 .42 .49 .04
Net realized and unrealized gains (losses).... 1.61 (2.77) 4.39 1.19 1.38
------------------------------------------------------------------------
Total from investment operations............... 1.71 (2.39) 4.81 1.68 1.42
------------------------------------------------------------------------
Less distributions from:
Net investment income......................... (.31) (.42) (.39) (.40) --
Net realized gains............................ (2.03) (2.88) (.81) (1.61) --
------------------------------------------------------------------------
Total distributions............................ (2.34) (3.30) (1.20) (2.01) --
------------------------------------------------------------------------
Net asset value, end of period................. $15.86 $16.49 $22.18 $18.57 $18.90
------------------------------------------------------------------------
------------------------------------------------------------------------
Total Return*.................................. 10.79% (13.32)% 27.30% 9.99% 8.12%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's).............. $879,765 $872,219 $755,184 $280,087 $42,548
Ratios to average net assets:
Expenses...................................... 1.87%** 1.83% 1.84% 1.87% 1.86%**
Net investment income......................... 1.03%** 1.79% 2.14% 2.25% 1.61%**
Portfolio turnover rate........................ 11.77% 48.23% 41.81% 19.63% 35.21%
</TABLE>

*Total return does not reflect sales commissions or the contingent deferred
sales charge and is not annualized.
**Annualized.
+For the period May 1, 1995 (effective date) to August 31, 1995.
12

PAGE
TEMPLETON GROWTH FUND, INC.
Financial Highlights (continued)

<TABLE>
<CAPTION>
ADVISOR CLASS
---------------------------------------------
SIX MONTHS ENDED YEAR ENDED AUGUST 31,
FEBRUARY 28, 1999 ----------------------
(UNAUDITED) 1998 1997+
---------------------------------------------
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
(For a share outstanding throughout the period)
Net asset value, beginning of period........................ $16.80 $22.49 $19.37
---------------------------------------------
Income from investment operations:
Net investment income...................................... .16 .56 .37
Net realized and unrealized gains (losses)................. 1.66 (2.78) 2.75
---------------------------------------------
Total from investment operations............................ 1.82 (2.22) 3.12
---------------------------------------------
Less distributions from:
Net investment income...................................... (.44) (.59) --
Net realized gains......................................... (2.03) (2.88) --
---------------------------------------------
Total distributions......................................... (2.47) (3.47) --
---------------------------------------------
Net asset value, end of period.............................. $16.15 $16.80 $22.49
---------------------------------------------
---------------------------------------------
Total Return*............................................... 11.31% (12.41)% 16.11%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's)........................... $41,208 $36,301 $29,531
Ratios to average net assets:
Expenses................................................... .87%** .83% .83%**
Net investment income...................................... 2.01%** 2.81% 3.68%**
Portfolio turnover rate..................................... 11.77% 48.23% 41.81%
</TABLE>

*Total return is not annualized.
**Annualized.
+For the period January 2, 1997 (effective date) to August 31, 1997.
See Notes to Financial Statements.
13

PAGE

TEMPLETON GROWTH FUND, INC.
STATEMENT OF INVESTMENTS, FEBRUARY 28, 1999 (UNAUDITED)

<TABLE>
<CAPTION>
COUNTRY SHARES VALUE
-------------------------------------------
<S> <C> <C> <C>
COMMON STOCKS 89.5%
AEROSPACE & MILITARY TECHNOLOGY 4.1%
Boeing Co. ................................................. United States 6,411,000 $ 227,991,188
*General Motors Corp., H.................................... United States 2,031,300 95,851,969
Raytheon Co., A............................................. United States 2,147,015 113,523,418
Rolls-Royce PLC............................................. United Kingdom 18,575,804 81,240,500
---------------
518,607,075
---------------
APPLIANCES & HOUSEHOLD DURABLES 1.2%
Sony Corp................................................... Japan 1,856,700 140,523,944
Toro Co. ................................................... United States 550,000 16,431,250
---------------
156,955,194
---------------
AUTOMOBILES 5.3%
Autoliv Inc., SDR........................................... Sweden 1,201,152 45,379,138
Bayerische Motorenwerke AG BMW.............................. Germany 72,645 52,792,129
Fiat SpA, di Risp........................................... Italy 390,260 632,761
Ford Motor Co. ............................................. United States 3,016,600 178,922,088
General Motors Corp. ....................................... United States 2,944,500 243,105,281
Volkswagen AG............................................... Germany 368,350 24,119,960
Volvo AB, B................................................. Sweden 4,741,000 123,176,733
---------------
668,128,090
---------------
BANKING 5.9%
Australia & New Zealand Banking Group Ltd. ................. Australia 14,055,105 90,765,935
Banco Popular Espanol SA.................................... Spain 255,500 17,123,086
*Bangkok Bank Public Co. Ltd., fgn. ........................ Thailand 3,391,200 5,724,695
Deutsche Bank AG, Br. ...................................... Germany 1,469,399 76,458,107
Development Bank of Singapore Ltd., fgn. ................... Singapore 1,795,500 13,033,537
Guoco Group Ltd. ........................................... Hong Kong 19,237,000 29,794,973
HSBC Holdings PLC........................................... Hong Kong 10,238,141 288,072,632
National Australia Bank Ltd. ............................... Australia 10,723,122 178,780,846
National Australia Capital Securities PLC................... Australia 1,215,253 36,837,357
Unibanco Uniao de Bancos Brasileiros SA, GDR................ Brazil 773,440 10,441,440
---------------
747,032,608
---------------
BROADCASTING & PUBLISHING .2%
South China Morning Post Holdings, Ltd. .................... Hong Kong 30,911,000 13,265,667
South China Morning Post Holdings, Ltd., 144A............... Hong Kong 8,976,000 3,852,112
---------------
17,117,779
---------------
BUILDING MATERIALS & COMPONENTS 1.4%
Caradon PLC................................................. United Kingdom 5,154,667 12,716,970
Cemex SA.................................................... Mexico 4,814,087 13,806,347
Cemex SA, A, ADR............................................ Mexico 22,092 126,716
Cemex SA, B................................................. Mexico 4,694,000 14,452,145
Cemex SA, B, ADR............................................ Mexico 777,000 4,784,540
</TABLE>

PAGE
TEMPLETON GROWTH FUND, INC.
STATEMENT OF INVESTMENTS, FEBRUARY 28, 1999 (UNAUDITED) (CONT.)

<TABLE>
<CAPTION>
COUNTRY SHARES VALUE
-------------------------------------------
<S> <C> <C> <C>
COMMON STOCKS (CONT.)
BUILDING MATERIALS & COMPONENTS (CONT.)
+Hepworth PLC............................................... United Kingdom 16,767,410 $ 41,232,217
+Owens Corning.............................................. United States 2,893,300 92,043,106
---------------
179,162,041
---------------
BUSINESS & PUBLIC SERVICES 1.2%
*Humana Inc. ............................................... United States 8,335,200 145,866,000
---------------
CHEMICALS 4.7%
Akzo Nobel NV............................................... Netherlands 2,622,200 99,453,329
BASF AG..................................................... Germany 2,671,000 91,774,850
Bayer AG, Br. .............................................. Germany 904,100 31,759,372
Cookson Group PLC........................................... United Kingdom 24,025,284 62,158,908
DSM NV, Br. ................................................ Netherlands 1,273,290 110,423,086
Eastman Chemical Co. ....................................... United States 1,100,000 51,906,250
European Vinyls Corporation Evc International NV............ Netherlands 388,433 2,281,263
Imperial Chemical Industries PLC............................ United Kingdom 1,621,988 14,109,440
+Lyondell Chemical Co. ..................................... United States 5,068,600 67,792,525
Rhone-Poulenc SA, A......................................... France 1,400,000 64,163,785
---------------
595,822,808
---------------
CONSTRUCTION & HOUSING
Hollandsche Beton Groep NV.................................. Netherlands 544,171 5,197,088
---------------
ELECTRICAL & ELECTRONICS 6.4%
ABB AB, A................................................... Sweden 12,973,000 147,510,576
Alcatel SA.................................................. France 900,000 96,821,999
Fuji Photo Film Co. Ltd. ................................... Japan 1,267,000 46,558,112
General Electric Co. PLC.................................... United Kingdom 18,500,000 148,925,859
Koninklijke Philips Electronics NV.......................... Netherlands 3,371,830 235,041,665
Motorola Inc. .............................................. United States 1,967,600 138,223,900
---------------
813,082,111
---------------
ELECTRONIC COMPONENTS & INSTRUMENTS .1%
BICC PLC.................................................... United Kingdom 8,340,220 11,958,119
---------------
ENERGY EQUIPMENT & SERVICES .2%
Baker Hughes Inc. .......................................... United States 1,503,000 27,054,000
---------------
ENERGY SOURCES 8.3%
Amerada Hess Corp. ......................................... United States 2,108,000 95,650,500
*Barrett Resources Corp. ................................... United States 1,100,000 18,081,250
Burlington Resources Inc. .................................. United States 2,700,000 87,412,500
Norsk Hydro AS.............................................. Norway 3,551,577 120,457,074
Occidental Petroleum Corp. ................................. United States 6,000,000 90,375,000
Perez Companc SA, B......................................... Argentina 6,863,400 27,945,216
*Ranger Oil Ltd. ........................................... Canada 2,810,900 7,905,656
*Renaissance Energy Ltd. ................................... Canada 5,250,000 46,257,039
Repsol SA................................................... Spain 1,029,700 54,144,168
</TABLE>

PAGE
TEMPLETON GROWTH FUND, INC.
STATEMENT OF INVESTMENTS, FEBRUARY 28, 1999 (UNAUDITED) (CONT.)

<TABLE>
<CAPTION>
COUNTRY SHARES VALUE
-------------------------------------------
<S> <C> <C> <C>
COMMON STOCKS (CONT.)
ENERGY SOURCES (CONT.)
Saga Petroleum AS........................................... Norway 3,754,160 $ 31,535,608
Shell Transport & Trading Co. PLC........................... United Kingdom 19,784,000 110,294,960
Shell Transport & Trading Co. PLC, Reg D.................... United Kingdom 36,000 1,208,250
Societe Elf Aquitaine SA.................................... France 1,030,000 107,415,336
+Valero Energy Corp., new................................... United States 2,907,700 51,066,481
YPF Sociedad Anonima........................................ Argentina 1,400,000 40,756,303
YPF Sociedad Anonima, ADR................................... Argentina 5,282,800 153,201,200
---------------
1,043,706,541
---------------
FINANCIAL SERVICES 1.3%
Lend Lease Corp. Ltd. ...................................... Australia 3,029,190 37,619,408
Merrill Lynch & Co. Inc. ................................... United States 1,580,300 121,288,025
---------------
158,907,433
---------------
FOOD & HOUSEHOLD PRODUCTS 2.3%
Archer-Daniels Midland Co. ................................. United States 9,232,794 139,646,007
Hillsdown Holdings PLC...................................... United Kingdom 10,211,538 11,451,214
Panamerican Beverages Inc., A............................... Mexico 1,216,400 19,234,325
Tate & Lyle PLC............................................. United Kingdom 13,600,000 98,587,037
*Terranova Foods PLC........................................ United Kingdom 3,325,382 4,368,353
Vitro SA de CV, A........................................... Mexico 6,090,720 9,201,851
Vitro SA de CV, ADR......................................... Mexico 962,440 4,330,980
---------------
286,819,767
---------------
FOREST PRODUCTS & PAPER 6.5%
Aracruz Celulose SA, ADR.................................... Brazil 2,338,900 30,113,338
Assidomaen AB............................................... Sweden 1,198,100 21,826,250
+Boise Cascade Corp. ....................................... United States 3,082,600 95,753,263
Bowater Inc. ............................................... United States 2,145,000 90,358,125
Carter Holt Harvey Ltd. .................................... New Zealand 21,502,738 19,721,803
Champion International Corp. ............................... United States 1,000,000 37,000,000
Fletcher Challenge Paper Ltd. .............................. New Zealand 18,802,836 13,008,047
International Paper Co. .................................... United States 3,400,000 142,800,000
Metsa Serla OY, B........................................... Finland 2,611,000 18,085,965
Mitsubishi Paper Mills Ltd. ................................ Japan 3,946,000 6,584,981
Mo Och Domsjoe AB, B........................................ Sweden 2,950,000 77,365,815
Norske Skogindustrier AS, A................................. Norway 994,000 29,569,507
Sappi Ltd. ................................................. South Africa 2,730,600 9,741,123
St. Joe Co. ................................................ United States 661,800 14,270,063
*Stora Enso OY, A........................................... Finland 98,700 877,622
*Stora Enso OY, A, fgn. .................................... Finland 718,823 6,108,106
Stora Enso OY, R............................................ Finland 4,973,575 44,224,115
*Stora Enso OY, R, fgn. .................................... Finland 4,361,145 38,657,906
Svenska Cellulosa AB, B..................................... Sweden 287,244 5,742,070
UPM-Kymmene Corp. .......................................... Finland 4,801,840 124,664,928
---------------
826,473,027
---------------
</TABLE>

PAGE
TEMPLETON GROWTH FUND, INC.
STATEMENT OF INVESTMENTS, FEBRUARY 28, 1999 (UNAUDITED) (CONT.)

<TABLE>
<CAPTION>
COUNTRY SHARES VALUE
-------------------------------------------
<S> <C> <C> <C>
COMMON STOCKS (CONT.)
INDUSTRIAL COMPONENTS 1.9%
Goodyear Tire & Rubber Co. ................................. United States 1,722,600 $ 79,670,250
Michelin SA, B.............................................. France 715,491 31,888,616
*RTI International Metals Inc. ............................. United States 462,700 4,916,188
Sandvik AB, A............................................... Sweden 130,100 2,497,335
Sandvik AB, B............................................... Sweden 3,656,000 70,178,750
SKF AB, A................................................... Sweden 1,002,995 13,305,411
SKF AB, B................................................... Sweden 2,480,374 34,268,525
---------------
236,725,075
---------------
INSURANCE 2.3%
Ace Ltd. ................................................... Bermuda 2,000,000 54,500,000
American General Corp. ..................................... United States 1,100,000 80,575,000
American International Group Inc. .......................... United States 137,813 15,702,012
Partnerre Ltd. ............................................. Bermuda 739,400 31,979,050
+W R Berkeley Corp. ........................................ United States 1,690,650 48,394,856
XL Capital Ltd., A.......................................... Bermuda 1,000,000 61,250,000
---------------
292,400,918
---------------
LEISURE & TOURISM .5%
Rank Group PLC.............................................. United Kingdom 6,565,891 24,981,563
Shangri-La Asia Ltd. ....................................... Hong Kong 48,233,000 34,551,083
---------------
59,532,646
---------------
MACHINERY & ENGINEERING 1.6%
+Agco Corp. ................................................ United States 5,739,500 37,665,469
BTR Siebe PLC............................................... United Kingdom 25,067,656 105,817,298
New Holland NV.............................................. Netherlands 1,600,000 15,900,000
Valmet (OY)................................................. Finland 2,000,000 20,857,347
Vickers Group PLC........................................... United Kingdom 8,396,988 19,908,913
---------------
200,149,027
---------------
MERCHANDISING 4.6%
American Stores Co. ........................................ United States 5,157,600 174,069,000
*CompUSA Inc. .............................................. United States 189,200 1,986,600
Dairy Farm International Holdings Ltd. ..................... Hong Kong 36,629,531 39,193,598
Gucci Group NV, Reg D....................................... Netherlands 1,366,900 95,683,000
Marks & Spencer PLC......................................... United Kingdom 6,989,000 47,136,731
Safeway PLC................................................. United Kingdom 14,432,027 62,424,262
Sears Roebuck & Co. ........................................ United States 2,600,000 105,625,000
W.H. Smith Group............................................ United Kingdom 5,740,290 50,347,774
---------------
576,465,965
---------------
METALS & MINING 4.7%
AK Steel Holding Corp. ..................................... United States 1,629,900 35,552,194
Alcan Aluminum Ltd. ........................................ Canada 3,463,361 83,974,170
Alcan Aluminum Ltd., fgn. .................................. Canada 1,500,000 36,468,750
</TABLE>

PAGE
TEMPLETON GROWTH FUND, INC.
STATEMENT OF INVESTMENTS, FEBRUARY 28, 1999 (UNAUDITED) (CONT.)

<TABLE>
<CAPTION>
COUNTRY SHARES VALUE
-------------------------------------------
<S> <C> <C> <C>
COMMON STOCKS (CONT.)
METALS & MINING (CONT.)
Anglo American Platinum Corp. Ltd. ......................... South Africa 3,000,000 $ 49,297,821
Billiton PLC................................................ United Kingdom 19,141,800 41,627,941
British Steel PLC........................................... United Kingdom 63,665,600 126,725,366
Companhia Siderurgica Nacional CSN, ADR..................... Brazil 1,177,905 9,864,954
Cyprus Amax Minerals Co. Inc. .............................. United States 1,142,500 12,853,125
Grupo Mexico SA de CV, B.................................... Mexico 6,004,300 16,495,992
Industrias Penoles SA....................................... Mexico 3,223,400 9,649,153
Iscor Ltd. ................................................. South Africa 21,374,700 3,657,334
Minorco SA, ADR............................................. Luxembourg 1,399,224 21,950,327
Outokumpu OY, A............................................. Finland 660,300 5,791,533
Pechiney SA, A.............................................. France 1,356,639 44,826,647
*Pohang Iron & Steel Co. Ltd. .............................. South Korea 1,093,160 57,815,075
+Titanium Metals............................................ United States 2,322,000 16,399,125
WMC Ltd. ................................................... Australia 7,933,500 24,631,467
---------------
597,580,974
---------------
MISC MATERIALS & COMMODITIES .9%
+Agrium Inc. ............................................... Canada 6,182,100 49,456,800
De Beers/Centenary Linked Units, Reg........................ South Africa 870,850 15,013,201
De Beers/Centenary Linked Units, ADR........................ South Africa 2,950,000 50,518,750
---------------
114,988,751
---------------
MULTI-INDUSTRY 6.4%
Alfa SA de CV, A............................................ Mexico 6,608,600 16,264,259
Amoy Properties Ltd. ....................................... Hong Kong 57,698,000 41,331,212
Broken Hill Proprietary Co. Ltd. ........................... Australia 11,287,048 84,734,861
Cheung Kong Holdings Ltd. .................................. Hong Kong 26,562,000 180,845,471
DESC SA de CV, B............................................ Mexico 10,295,000 9,803,777
DESC SA de CV, C, ADR....................................... Mexico 25,800 495,038
Elementis PLC............................................... United Kingdom 20,177,882 23,758,840
First Pacific Co. Ltd. ..................................... Hong Kong 37,473,000 22,611,245
*Hicom Holdings Bhd. ....................................... Malaysia 1,120,800 315,503
Hutchison Whampoa Ltd. ..................................... Hong Kong 12,000,000 83,249,976
Inchcape PLC................................................ United Kingdom 26,000,000 61,853,193
Jardine Matheson Holdings Ltd. ............................. Hong Kong 10,087,768 26,429,952
Jardine Strategic Holdings Ltd. ............................ Hong Kong 14,245,732 20,656,311
*Metra OY, B................................................ Finland 284,280 5,170,997
Pacific Dunlop Ltd. ........................................ Australia 14,221,277 24,814,205
Pilkington PLC.............................................. United Kingdom 40,000,000 40,370,382
*Saab AB, B................................................. Sweden 1,254,300 11,041,643
Swire Pacific Ltd., A....................................... Hong Kong 33,386,500 136,601,213
Swire Pacific Ltd., B....................................... Hong Kong 24,783,300 15,114,206
Wheelock and Company Ltd. .................................. Hong Kong 10,338,809 6,371,890
---------------
811,834,174
---------------
</TABLE>

PAGE
TEMPLETON GROWTH FUND, INC.
STATEMENT OF INVESTMENTS, FEBRUARY 28, 1999 (UNAUDITED) (CONT.)

<TABLE>
<CAPTION>
COUNTRY SHARES VALUE
-------------------------------------------
<S> <C> <C> <C>
COMMON STOCKS (CONT.)
REAL ESTATE 1.3%
Boston Properties Inc. ..................................... United States 460,700 $ 14,886,369
Hang Lung Development Co. Ltd. ............................. Hong Kong 24,309,000 23,374,793
Hong Kong Land Holdings Ltd. ............................... Hong Kong 13,093,000 13,747,650
New World Development Co. Ltd. ............................. Hong Kong 17,699,244 32,553,222
Rouse Co. .................................................. United States 2,532,500 59,197,188
*Wereldhave NV.............................................. Netherlands 313,594 16,902,646
---------------
160,661,868
---------------
TELECOMMUNICATIONS 5.1%
Bell Atlantic Corp. ........................................ United States 2,100,000 120,618,750
Hong Kong Telecommunications Ltd. .......................... Hong Kong 41,597,548 69,796,796
PT Indosat TBK, ADR......................................... Indonesia 36,075 468,975
Rostelekom.................................................. Russia 3,872,000 3,058,880
SK Telecom Co. Ltd., ADR.................................... South Korea 7,403,850 74,963,981
Smartone Telecommunications Holdings Ltd. .................. Hong Kong 16,023,500 43,327,718
Telecom Argentina Stet-France SA, ADR....................... Argentina 2,974,700 80,502,819
Telefonica de Argentina SA, B, ADR.......................... Argentina 960,080 28,082,340
Telefonica del Peru SA, B................................... Peru 8,459,874 10,171,696
Telefonica del Peru SA, B, ADR.............................. Peru 1,083,200 12,795,300
Telefonos de Mexico SA (Telmex), L.......................... Mexico 14,118,470 39,994,059
Telefonos de Mexico SA (Telmex), L, ADR..................... Mexico 2,900,000 165,843,750
---------------
649,625,064
---------------
TEXTILES & APPAREL .1%
*Adidas-Salomon AG.......................................... Germany 187,160 17,854,113
---------------
TRANSPORTATION 3.0%
British Airways PLC......................................... United Kingdom 13,046,000 96,504,285
Cathay Pacific Airways Ltd. ................................ Hong Kong 33,892,000 37,838,831
Hitachi Zosen Corp. ........................................ Japan 3,725,000 4,552,255
Peninsular & Oriental Steam Navigation Co. ................. United Kingdom 4,621,630 54,307,225
Singapore Airlines Ltd., fgn. .............................. Singapore 23,586,900 173,956,812
Stolt Nielsen SA............................................ Norway 463,500 4,982,625
Stolt Nielsen SA, ADR....................................... Norway 459,000 5,364,563
---------------
377,506,596
---------------
UTILITIES ELECTRICAL & GAS 8.0%
*CEZ AS..................................................... Czech Republic 2,047,771 2,668,369
CLP Holdings Ltd. .......................................... Hong Kong 18,639,900 87,813,410
Electrabel SA............................................... Belgium 154,273 64,354,509
Entergy Corp. .............................................. United States 3,600,000 101,700,000
Gener SA, ADR............................................... Chile 1,467,200 22,008,000
Hong Kong Electric Holdings Ltd. ........................... Hong Kong 41,999,600 119,530,338
Iberdrola SA, Br. .......................................... Spain 5,700,000 89,165,157
Illinova Corp. ............................................. United States 2,900,000 68,875,000
*Korea Electric Power Corp. ................................ South Korea 6,273,800 148,191,925
National Grid Group PLC..................................... United Kingdom 2,504,100 18,112,222
</TABLE>

PAGE
TEMPLETON GROWTH FUND, INC.
STATEMENT OF INVESTMENTS, FEBRUARY 28, 1999 (UNAUDITED) (CONT.)

<TABLE>
<CAPTION>
COUNTRY SHARES VALUE
-------------------------------------------
<S> <C> <C> <C>
COMMON STOCKS (CONT.)
UTILITIES ELECTRICAL & GAS (CONT.)
National Power PLC.......................................... United Kingdom 3,800,000 $ 30,224,921
Potomac Electric Power Co. ................................. United States 5,187,734 126,451,016
Powergen PLC................................................ United Kingdom 907,444 11,091,919
Thames Water Group PLC...................................... United Kingdom 3,826,785 62,776,390
Transportadora de Gas del Sur SA, B, Reg S, ADR............. Argentina 1,400,000 13,825,000
Veba AG..................................................... Germany 900,000 47,521,817
---------------
1,014,309,993
---------------
TOTAL COMMON STOCKS (COST $11,818,808,718).................. 11,311,524,845
---------------
PREFERRED STOCKS 2.9%
Ballast Nedam NV, ctf., cvt., pfd. ......................... Netherlands 86,182 2,440,854
Banco Bradesco SA BBD, pfd. ................................ Brazil 3,171,500,000 12,748,339
*Banco Bradesco SA BBD, rts., pfd. ......................... Brazil 131,455,953 525,064
Centrais Eletricas Brasileiras SA (Electrobras), B, pfd. ... Brazil 120,400,000 1,650,693
Centrais Eletricas Brasileiras SA (Electrobras), ADR,
pfd. ..................................................... Brazil 3,986,800 27,329,662
*Centrais Geradoras Do Sul Do Brasil SA (Gerasul), ADR,
pfd. ..................................................... Brazil 350,790 1,060,128
Cia Vale do Rio Doce, A, pfd. .............................. Brazil 949,560 12,155,301
Cia Vale do Rio Doce, A, ADR, pfd. ......................... Brazil 1,350,400 17,286,447
Embotelladora Andina SA, B, ADR, pfd. ...................... Chile 183,500 2,133,188
*Embratel Participacoes SA, ADR, pfd. ...................... Brazil 2,525,000 34,403,125
Fiat SpA, pfd. ............................................. Italy 18,931,350 28,907,742
Petroleo Brasileiro SA (Petrobras), pfd. ................... Brazil 250,000,000 19,792,383
Tele Celular Sul Participacoes SA, ADR, pfd. ............... Brazil 102,500 1,652,813
Tele Centro Oeste Celular Participacoes SA, ADR, pfd. ...... Brazil 341,663 896,865
Tele Leste Celular Participacoes SA, ADR, pfd. ............. Brazil 20,500 429,219
Tele Nordeste Celular Participacoes SA, ADR, pfd. .......... Brazil 51,250 781,563
Tele Norte Celular Participacoes SA, ADR, pfd. ............. Brazil 20,500 498,406
Tele Sudeste Celular Participacoes SA, ADR, pfd. ........... Brazil 205,000 2,729,063
Telecomunicacoes Brasileiras SA (Telebras), unit, pfd. ..... Brazil 875,600,000 56,709,622
Telecomunicacoes Brasileiras SA (Telebras), ADR, pfd. ...... Brazil 1,025,000 176,172
*Telecomunicacoes de Minas Gerais SA Telemig, C, pfd. ...... Brazil 38,363,000 344,984
Telecomunicacoes de Minas Gerais SA Telemig, B, pfd. ....... Brazil 38,363,000 631,529
Telecomunicacoes de Sao Paulo SA (Telesp), pfd. ............ Brazil 220,000,000 20,548,108
*Telemig Celular Participacoes SA, ADR, pfd. ............... Brazil 51,250 948,125
Telesp Celular Participacoes SA, ADR, pfd. ................. Brazil 410,000 8,610,000
Telesp Participacoes SA, ADR, pfd. ......................... Brazil 1,025,000 16,912,500
Usinas Siderurgicas de Minas Gerais SA, pfd. ............... Brazil 4,188,959 5,104,972
Volkswagen AG, pfd. ........................................ Germany 2,218,960 88,178,662
---------------
TOTAL PREFERRED STOCKS (COST $651,392,142).................. 365,585,529
---------------
</TABLE>

PAGE
TEMPLETON GROWTH FUND, INC.
STATEMENT OF INVESTMENTS, FEBRUARY 28, 1999 (UNAUDITED) (CONT.)

<TABLE>
<CAPTION>
PRINCIPAL
COUNTRY AMOUNT** VALUE
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
BONDS 6.0%
U.S. Treasury Bonds:
14.00%, 11/15/11.......................................... United States $ 97,000,000 $ 147,470,360
7.875%, 2/15/21........................................... United States 128,500,000 160,343,972
6.25%, 8/15/23............................................ United States 155,303,000 163,990,339
U.S. Treasury Notes:
6.375%, 7/15/99........................................... United States 78,000,000 78,487,500
6.00%, 10/15/99........................................... United States 108,000,000 108,708,804
6.375%, 1/15/00........................................... United States 98,000,000 99,133,174
---------------
TOTAL BONDS (COST $727,148,534)............................. 758,134,149
---------------
SHORT TERM INVESTMENTS 1.7% (COST $208,084,188)
U.S. Treasury Bills, 4.07% to 4.57%, with maturities to
5/20/99................................................... United States 209,431,000 208,055,426
---------------
TOTAL INVESTMENTS (COST $13,405,433,582) 100.1%............. 12,643,299,949
OTHER ASSETS, LESS LIABILITIES (.1%)........................ (8,811,357)
---------------
TOTAL NET ASSETS 100.0%..................................... $12,634,488,592
---------------
---------------
</TABLE>

*Non-income producing.
**Securities denominated in U.S. dollars.
+The Investment Company Act of 1940 defines "affiliated companies" as
investments in portfolio companies in which the Fund owns 5% or more of the
outstanding voting securities. Investments in affiliated companies at February
28, 1999 were $499,803,842.
See Notes to Financial Statements.
21

PAGE

TEMPLETON GROWTH FUND, INC.
Financial Statements

STATEMENT OF ASSETS AND LIABILITIES
FEBRUARY 28, 1999 (UNAUDITED)

<TABLE>
<S> <C>
Assets:
Investments in securities, at value (cost
$13,405,433,582).......................................... $12,643,299,949
Cash....................................................... 57,698
Receivables:
Investment securities sold................................ 58,629,515
Capital shares sold....................................... 10,448,377
Dividends and interest.................................... 44,183,448
---------------
Total assets.......................................... 12,756,618,987
---------------
Liabilities:
Payables:
Investment securities purchased........................... 63,485,856
Capital shares redeemed................................... 45,752,174
To affiliates............................................. 11,504,097
Distributions to shareholders.............................. 21,609
Accrued expenses........................................... 1,366,659
---------------
Total liabilities..................................... 122,130,395
---------------
Net assets, at value........................................ $12,634,488,592
---------------
---------------
Net assets consist of:
Undistributed net investment income........................ $ 94,792,702
Net unrealized depreciation................................ (762,133,633)
Accumulated net realized gain.............................. 109,721,150
Capital shares............................................. 13,192,108,373
---------------
Net assets, at value........................................ $12,634,488,592
---------------
---------------
CLASS A:
Net asset value per share ($11,710,623,767 / 725,791,346
shares outstanding)...................................... $16.13
---------------
---------------
Maximum offering price per share ($16.13 / 94.25%)......... $17.11
---------------
---------------
CLASS B:
Net asset value per share ($2,891,681 / 179,398 shares
outstanding)*............................................ $16.12
---------------
---------------
CLASS C:
Net asset value per share ($879,764,796 / 55,483,353 shares
outstanding)*............................................ $15.86
---------------
---------------
Maximum offering price per share ($15.86 / 99.00%)......... $16.02
---------------
---------------
ADVISOR CLASS:
Net asset value per share ($41,208,348 / 2,550,858 shares
outstanding)............................................. $16.15
---------------
---------------
</TABLE>

*Redemption price per share is equal to net asset value less any applicable
sales charge.
See Notes to Financial Statements.
22

PAGE

TEMPLETON GROWTH FUND, INC.
Financial Statements (continued)

STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED FEBRUARY 28, 1999 (UNAUDITED)

<TABLE>
<S> <C> <C>
Investment Income:
(net of foreign taxes of $8,093,024)
Dividends.................................................. $138,647,848
Interest................................................... 46,578,726
------------
Total investment income............................... $ 185,226,574
Expenses:
Management fees (Note 3)................................... 39,003,262
Administrative fees (Note 3)............................... 5,090,810
Distribution fees (Note 3)
Class A................................................... 14,914,761
Class B................................................... 2,288
Class C................................................... 4,564,193
Transfer agent fees (Note 3)............................... 7,709,000
Custodian fees............................................. 2,029,000
Reports to shareholders.................................... 1,554,900
Registration and filing fees............................... 216,000
Professional fees.......................................... 99,800
Directors' fees and expenses............................... 105,000
Other...................................................... 84,592
------------
Total expenses........................................ 75,373,606
--------------
Net investment income........................... 109,852,968
--------------
Realized and unrealized gains (losses):
Net realized gain (loss) from:
Investments............................................... 114,157,166
Foreign currency transactions............................. (2,578,866)
------------
Net realized gain..................................... 111,578,300
Net unrealized appreciation on investments............ 1,111,040,559
--------------
Net realized and unrealized gain............................ 1,222,618,859
--------------
Net increase in net assets resulting from operations........ $1,332,471,827
--------------
--------------
</TABLE>

See Notes to Financial Statements.
23

PAGE

TEMPLETON GROWTH FUND, INC.
Financial Statements (continued)

STATEMENTS OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
SIX MONTHS ENDED
FEBRUARY 28, 1999 YEAR ENDED
(UNAUDITED) AUGUST 31, 1998
---------------------------------------
<S> <C> <C>
Increase (decrease) in net assets:
Operations:
Net investment income..................................... $ 109,852,968 $ 352,041,372
Net realized gain from investments and foreign currency
transactions............................................ 111,578,300 1,794,895,388
Net unrealized appreciation (depreciation) on
investments.............................................. 1,111,040,559 (3,948,921,534)
---------------------------------------
Net increase (decrease) in net assets resulting from
operations............................................ 1,332,471,827 (1,801,984,774)
Distributions to shareholders from:
Net investment income:
Class A.................................................. (266,935,436) (309,635,887)
Class C.................................................. (16,086,921) (16,109,670)
Advisor Class............................................ (974,245) (846,245)
Net realized gains:
Class A.................................................. (1,337,704,921) (1,624,126,003)
Class C.................................................. (105,466,786) (109,111,611)
Advisor Class............................................ (4,507,946) (4,067,274)
Capital share transactions (Note 2):
Class A.................................................. 963,135,160 2,570,690,896
Class B.................................................. 2,939,477 --
Class C.................................................. 36,284,563 389,245,855
Advisor Class............................................ 6,250,196 17,030,051
---------------------------------------
Net increase (decrease) in net assets................... 609,404,968 (888,914,662)
Net assets:
Beginning of period........................................ 12,025,083,624 12,913,998,286
---------------------------------------
End of period.............................................. $12,634,488,592 $12,025,083,624
---------------------------------------
---------------------------------------
Undistributed net investment income included in net assets:
End of period.............................................. $ 94,792,702 $ 268,936,336
---------------------------------------
---------------------------------------
</TABLE>

See Notes to Financial Statements.
24

PAGE

TEMPLETON GROWTH FUND, INC.
Notes to Financial Statements (unaudited)

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

Templeton Growth Fund, Inc. (the Fund) is registered under the Investment
Company Act of 1940 as a diversified, open-end investment company. The Fund
seeks long-term capital growth. Under normal market conditions, the Fund invests
primarily in the equity securities of companies located anywhere in the world,
including emerging markets. The following summarizes the Fund's significant
accounting policies.

a. SECURITY VALUATION:

Securities listed or traded on a recognized national exchange or NASDAQ are
valued at the latest reported sales price. Over-the-counter securities and
listed securities for which no sale is reported are valued within the range of
the latest quoted bid and asked prices. Securities for which market quotations
are not readily available are valued at fair value as determined by management
in accordance with procedures established by the Board of Directors.

b. FOREIGN CURRENCY TRANSLATION:

Portfolio securities and other assets and liabilities denominated in foreign
currencies are translated into U.S. dollars based on the exchange rate of such
currencies against U.S. dollars on the date of valuation. Purchases and sales of
securities and income items denominated in foreign currencies are translated
into U.S. dollars at the exchange rate in effect on the transaction date. When
the Fund purchases or sells foreign securities it will customarily enter into a
foreign exchange contract to minimize foreign exchange risk from the trade date
to the settlement date of such transactions.

The Fund does not separately report the effect of changes in foreign exchange
rates from changes in market prices on securities held. Such changes are
included in net realized and unrealized gain or loss from investments.

Realized foreign exchange gains or losses arise from sales of foreign
currencies, currency gains or losses realized between the trade and settlement
dates on securities transactions, and the difference between the recorded
amounts of dividends, interest and foreign withholding taxes, and the U.S.
dollar equivalent of the amounts actually received or paid. Net unrealized
foreign exchange gains and losses arise from changes in foreign exchange rates
on foreign currency denominated assets and liabilities other than investments in
securities held at the end of the reporting period.

c. INCOME TAXES:

No provision has been made for income taxes because the Fund's policy is to
qualify as a regulated investment company under the Internal Revenue Code and to
distribute all of its taxable income.

d. SECURITY TRANSACTIONS, INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS:

Security transactions are accounted for on trade date. Realized gains and losses
on security transactions are determined on a specific identification basis.
Certain income from foreign securities is recorded as soon as

PAGE
TEMPLETON GROWTH FUND, INC.
Notes to Financial Statements (unaudited) (continued)

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONT.)

d. SECURITY TRANSACTIONS, INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS (CONT.)
information is available to the Fund. Interest income and estimated expenses are
accrued daily. Dividend income and distributions to shareholders are recorded on
the ex-dividend date.

Realized and unrealized gains and losses and net investment income, other than
class specific expenses, are allocated daily to each class of shares based upon
the relative proportion of net assets of each class.

e. ACCOUNTING ESTIMATES:

The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities at the date of the
financial statements and the amounts of income and expense during the reporting
period. Actual results could differ from those estimates.

2. CAPITAL STOCK

The Fund offers four classes of shares; Class A, Class B, Class C, and Advisor
Class shares. Effective January 1, 1999, Class I and Class II shares were
renamed Class A and Class C respectively, and a fourth class of shares, Class B,
was established. The shares differ by their initial sales load, distribution
fees, voting rights on matters affecting a single class of shares and the
exchange privilege of each class.

At February 28, 1999, there were 1.8 billion shares authorized ($0.01 par value)
of which 1.2 billion, 100 million, 400 million and 100 million were designated
Class A shares, Class B shares, Class C shares and Advisor Class shares,
respectively. Transactions in the Fund's shares were as follows:

<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
FEBRUARY 28, 1999 AUGUST 31, 1998
-----------------------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT
-----------------------------------------------------------------------
<S> <C> <C> <C> <C>
CLASS A SHARES:
Shares sold....................................... 103,708,022 $ 1,710,182,026 162,377,765 $ 3,342,332,950
Shares issued on reinvestment of distributions.... 91,923,668 1,440,479,862 84,313,094 1,737,946,375
Shares redeemed................................... (132,372,027) (2,187,526,728) (123,878,907) (2,509,588,429)
-----------------------------------------------------------------------
Net increase...................................... 63,259,663 $ 963,135,160 122,811,952 $ 2,570,690,896
-----------------------------------------------------------------------
-----------------------------------------------------------------------
</TABLE>

PAGE
TEMPLETON GROWTH FUND, INC.
Notes to Financial Statements (unaudited) (continued)

2. CAPITAL STOCK (CONT.)

PERIOD ENDED
FEBRUARY 28, 1999*
----------------------------
SHARES AMOUNT
----------------------------
<S> <C> <C> <C> <C>
CLASS B SHARES:
Shares sold............................................. 183,445 $ 3,007,502
Shares redeemed......................................... (4,047) (68,025)
----------------------------
Net increase............................................ 179,398 $ 2,939,477
----------------------------
----------------------------
</TABLE>

<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
FEBRUARY 28, 1999 AUGUST 31, 1998
----------------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT
----------------------------------------------------------------
<S> <C> <C> <C> <C>
CLASS C SHARES:
Shares sold............................................. 10,332,539 $ 167,498,758 21,887,098 $ 446,684,900
Shares issued on reinvestment of distributions.......... 6,946,379 107,252,391 5,371,460 109,391,107
Shares redeemed......................................... (14,673,780) (238,466,586) (8,429,791) (166,830,152)
----------------------------------------------------------------
Net increase............................................ 2,605,138 $ 36,284,563 18,828,767 $ 389,245,855
----------------------------------------------------------------
----------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
FEBRUARY 28, 1999 AUGUST 31, 1998
----------------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT
----------------------------------------------------------------
<S> <C> <C> <C> <C>
ADVISOR CLASS SHARES:
Shares sold............................................. 610,022 $ 10,150,838 1,306,769 $ 26,289,488
Shares issued on reinvestment of distributions.......... 334,891 5,247,737 235,380 4,848,120
Shares redeemed......................................... (554,511) (9,148,379) (694,766) (14,107,557)
----------------------------------------------------------------
Net increase............................................ 390,402 $ 6,250,196 847,383 $ 17,030,051
----------------------------------------------------------------
----------------------------------------------------------------
</TABLE>

*Effective date of Class B shares was January 1, 1999.

3. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES

Certain officers of the Fund are also officers or directors of Templeton Global
Advisors Ltd. (TGAL), Franklin Templeton Services, Inc. (FT Services),
Franklin/Templeton Distributors, Inc. (Distributors) and Franklin/Templeton
Investor Services, Inc. (Investor Services), the Fund's investment manager,
administrative manager, principal underwriter and transfer agent, respectively.

PAGE
TEMPLETON GROWTH FUND, INC.
Notes to Financial Statements (unaudited) (continued)

3. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES (CONT.)
The Fund pays an investment management fee to TGAL based on the average daily
net assets of the Fund as follows:

<TABLE>
<CAPTION>
ANNUALIZED
FEE RATE AVERAGE DAILY NET ASSETS
- -----------------------------------------------------------------
<S> <C>
0.75% First $200 million
0.675% Over $200 million, up to and including $1.3 billion
0.60% Over $1.3 billion
</TABLE>

The Fund pays an administrative fee to FT Services based on the Fund's average
daily net assets as follows:

<TABLE>
<CAPTION>
ANNUALIZED
FEE RATE AVERAGE DAILY NET ASSETS
- -----------------------------------------------------------------
<S> <C>
0.15% First $200 million
0.135% Over $200 million, up to and including $700 million
0.10% Over $700 million, up to and including $1.2 billion
0.075% Over $1.2 billion
</TABLE>

The Fund reimburses Distributors up to 0.25%, 1.00% and 1.00% per year of the
average daily net assets of Class A, Class B and Class C shares, respectively,
for costs incurred in marketing the Fund's Class A, Class B and Class C shares.
Under the Class A distribution plan, costs exceeding the maximum may be
reimbursed in subsequent periods. At February 28, 1999, there were no
unreimbursed costs. Distributors received net commissions from sales of the
Fund's shares, and received contingent deferred sales charges for the period of
$886,224 and $317,151, respectively.

Legal fees of $99,800 were paid to a law firm in which a partner is an officer
of the Fund.

4. INCOME TAXES

At February 28, 1999, the net unrealized depreciation based on the cost of
investments for income tax purposes of $13,407,193,359 was as follows:

<TABLE>
<S> <C>
Unrealized appreciation................................... $ 1,343,600,006
Unrealized depreciation................................... (2,107,493,416)
---------------
Net unrealized depreciation............................... $ (763,893,410)
===============
</TABLE>

5. INVESTMENT TRANSACTIONS

Purchases and sales of securities (excluding short-term securities) for the
period ended February 28, 1999 aggregated $2,157,634,682 and $1,394,396,395,
respectively.

PAGE
LITERATURE REQUEST

For a free brochure and prospectus, which contain more complete information,
including charges and expenses, call Franklin Templeton Fund Information at
1-800/DIAL BEN(R) (1-800/342-5236). Please read the prospectus carefully before
investing or sending money. To ensure the highest quality of service, telephone
calls to or from our service departments may be monitored, recorded and
accessed. These calls can be determined by the presence of a regular beeping
tone.

FRANKLIN TEMPLETON GROUP

GLOBAL GROWTH
Franklin Global Health Care Fund
Mutual Discovery Fund
Templeton Developing
Markets Trust
Templeton Foreign Fund
Templeton Foreign Smaller
Companies Fund
Templeton Global
Infrastructure Fund
Templeton Global
Opportunities Trust
Templeton Global Real Estate Fund
Templeton Global
Smaller Companies Fund
Templeton Greater European Fund
Templeton Growth Fund
Templeton Latin America Fund
Templeton Pacific Growth Fund
Templeton World Fund

GLOBAL GROWTH AND INCOME
Franklin Global Utilities Fund
Mutual European Fund
Templeton Global Bond Fund
Templeton Growth and
Income Fund

GLOBAL INCOME
Franklin Global Government
Income Fund
Franklin Templeton Global
Currency Fund
Franklin Templeton Hard
Currency Fund
Templeton Americas Government
Securities Fund

GROWTH
Franklin Biotechnology
Discovery Fund
Franklin Blue Chip Fund
Franklin California Growth Fund
Franklin DynaTech Fund
Franklin Equity Fund
Franklin Gold Fund
Franklin Growth Fund
Franklin MidCap Growth Fund
Franklin Small Cap
Growth Fund

GROWTH AND INCOME
Franklin Asset Allocation Fund
Franklin Balance Sheet
Investment Fund*
Franklin Convertible
Securities Fund
Franklin Equity Income Fund
Franklin Income Fund
Franklin MicroCap Value Fund*
Franklin Natural Resources Fund
Franklin Real Estate
Securities Fund
Franklin Rising Dividends Fund
Franklin Utilities Fund
Franklin Value Fund
Mutual Beacon Fund
Mutual Financial Services Fund
Mutual Qualified Fund
Mutual Shares Fund

FUND ALLOCATOR SERIES
Franklin Templeton Conservative
Target Fund
Franklin Templeton Moderate
Target Fund
Franklin Templeton Growth
Target Fund

INCOME
Franklin Adjustable U.S.
Government Securities Fund
Franklin's AGE High Income Fund
Franklin Bond Fund
Franklin Floating Rate Trust
Franklin Investment Grade
Income Fund
Franklin Short-Intermediate
U.S. Government Securities Fund
Franklin Strategic Income Fund
Franklin U.S. Government
Securities Fund
Franklin Federal Money Fund
Franklin Money Fund

FRANKLIN FUNDS SEEKING
TAX-FREE INCOME
Federal Intermediate-Term
Tax-Free Income Fund
Federal Tax-Free Income Fund
High Yield Tax-Free Income Fund
Insured Tax-Free Income Fund
Puerto Rico Tax-Free
Income Fund
Tax-Exempt Money Fund

FRANKLIN STATE-SPECIFIC
FUNDS SEEKING
TAX-FREE INCOME
Alabama
Arizona**
California**
Colorado
Connecticut
Florida**
Georgia
Kentucky
Louisiana
Maryland
Massachusetts+
Michigan+
Minnesota+
Missouri
New Jersey
New York**
North Carolina
Ohio+
Oregon
Pennsylvania
Tennessee***
Texas
Virginia

VARIABLE ANNUITIES++
Franklin Valuemark(R)
Franklin Templeton
Valuemark Income Plus
(an immediate annuity)

* These funds are now closed to new accounts, with the exception of retirement
plan accounts.

** Two or more fund options available: long-term portfolio, intermediate-term
portfolio, a portfolio of insured municipal securities, and/or a high yield
portfolio (CA) and a money market portfolio (CA and NY).

*** The fund may invest up to 100% of its assets in bonds that pay interest
subject to the federal alternative minimum tax.

+ Portfolio of insured municipal securities.

++ Franklin Valuemark and Franklin Templeton Valuemark Income Plus are issued by
Allianz Life Insurance Company of North America or by its wholly owned
subsidiary, Preferred Life Insurance Company of New York, and distributed by
NALAC Financial Plans, LLC. The Franklin Valuemark Funds are managed by Franklin
Advisers, Inc. and its Templeton and Franklin affiliates.

01/99

PAGE
Bulk Rate
U.S. Postage
PAID
Permit No. 75
Bell, CA

[LOGO FRANKLIN TEMPLETON]

Templeton Growth Fund, Inc.
777 Mariners Island Blvd., P.O. Box 7777
San Mateo, CA 94403-7777

SEMIANNUAL REPORT

PRINCIPAL UNDERWRITER
Franklin/Templeton Distributors, Inc.
777 Mariners Island Blvd.
San Mateo, California 94404-1585
1-800/DIAL BEN(R)
www.franklin-templeton.com

SHAREHOLDER SERVICES
1-800/632-2301

FUND INFORMATION
1-800/342-5236

This report must be preceded or accompanied by the current Templeton Growth
Fund, Inc. prospectus, which contains more complete information including risk
factors, charges and expenses. Like any investment in securities, the value of
the Fund's portfolio will be subject to the risk of loss from market, currency,
economic, political and other factors, as well as investment decisions by the
Investment Manager, which will not always be profitable or wise. The Fund and
its investors are not protected from such losses by the Investment Manager.
Therefore, investors who cannot accept this risk should not invest in shares of
the Fund.

To ensure the highest quality of service, telephone calls to or from
our service departments may be monitored, recorded and accessed.
These calls can be determined by the presence of a regular beeping tone.

101 S99 04/99 [RECYCLE LOGO] Printed on recycled paper