OMB APPROVAL
OMB NUMBER: 3235-0145
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13G
Under the Securities Exchange Act of 1934
(Amendment No. 2)*
Preferred Income Fund
(Name of Issuer)
Common Stock
(Title of Class of Securities)
74037G-10-6
(CUSIP Number)
Check the following box if a fee is being paid with this statement
"X" (A fee is not required only if the filing person: (1) has a
previous statement on file reporting beneficial ownership of more
than five percent of the class of securities described in Item 1; and
(2) has filed no amendment subsequent thereto reporting beneficial
ownership of five percent or less of such class.) (See Rule 13d-7).
*The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject
class of securities, and for any subsequent amendment containing
information which would alter the disclosure provided in a prior
cover page.
The information required in the remainder of this cover page shall
not be deemed to be "filed" for the purpose of Section 18 of the
Securities Exchange Act of 1934 ("Act") or otherwise subject to the
liabilities of that section of the Act but shall be subject to all
other provisions of the Act (however, see the Notes).
SEC 1745 (5-87)
<page
CUSIP NO. 74037G-10-6 13G
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
The Commerce Group, Inc.
ID#: 04-2599931
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a)0
(b)0
3. SEC USE ONLY
4. CITIZENSHIP OR PLACE OF ORGANIZATION
Commonwealth of Massachusetts
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH
5. SOLE VOTING POWER
2,040,400
6. SHARED VOTING POWER
N/A
7. SOLE DISPOSITIVE POWER
2,040,400
8. SHARED DISPOSITIVE POWER
N/A
9. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,040,400
10. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN
SHARES*
N/A
11. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 9
20.7%
12. TYPE OF REPORTING PERSON*
HC
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THE COMMERCE GROUP, INC.
SCHEDULE 13G
December 31, 1998
Item 1.
a. Preferred Income Fund
b. 301 E. Colorado Blvd.
Pasadena, CA 91101-1911
Item 2.
a. The Commerce Group, Inc.
b. 211 Main Street, Webster, MA 01570;
c. Organized under the laws of the Commonwealth of Massachusetts;
d. Common Stock of Preferred Income Fund;
e. Preferred Income Fund CUSIP - 74037G-10-6
Item 3. If this statement is filed pursuant to Rule 13d-
1(b), or 13d-2(b), check whether the person filing
is a:
Parent Holding Company, in accordance with 240.13d-
1(b)(1)(ii)(G);
Item 4. Ownership
a. 2,040,400 shares of common stock;
b. 20.7% of common stock owned;
c. (i) 2,040,400 shares;
(ii) N/A;
(iii) 2,040,400 shares;
(iv) N/A;
Item 5. Ownership of Five Percent or Less of a Class
N/A;
Item 6. Ownership of More than Five Percent on Behalf of
Another Person.
N/A;
Item 7. Identification and Classification of the Subsidiary
Which Acquired the Security Being Reported on By
the Parent Holding Company
The Commerce Insurance Company - (IC);
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THE COMMERCE GROUP, INC.
SCHEDULE 13G
December 31, 1998
Item 8. Identification and Classification of Members of the
Group
N/A;
Item 9. Notice of Dissolution of Group
N/A;
Item 10. Certification.
By signing below I certify that, to the best of my knowledge and
belief, the securities referred to above were acquired in the
ordinary course of business and were not acquired for the purpose of
and do not have the effect of changing or influencing the control of
the issuer of such securities and were not acquired in connection
with or as a participant in any transaction having such purposes or
effect.
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief,
I certify that the information set forth in this statement is true,
complete and correct.
February 3, 1999
Date
Signature
Randall V. Becker,
Chief Accounting Officer &
Treasurer
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