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SELIGMAN
SELIGMAN
NEW JERSEY
MUNICIPAL
FUND, INC.
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Providing Income Free From
Regular Income Tax
SEPTEMBER 30, 1997 * ANNUAL REPORT
Seligman Financial Services, Inc.
an affiliate of
[GRAPHIC OMITTED]
J. & W. Seligman & Co.
INCORPORATED
ESTABLISHED 1864
100 Park Avenue, New York, NY 10017
This report is intended only for the information of shareholders or those who
have received the offering prospectus covering shares of Capital Stock of
Seligman New Jersey Municipal Fund, Inc., which contains information about the
sales charges, management fee, and other costs. Please read the prospectus
carefully before investing or sending money.
TECNJ2 9/97
<PAGE>
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To the Shareholders
Seligman New Jersey Municipal Fund posted strong results in its fiscal year
ended September 30, 1997. Based on the net asset value of Class A shares, the
Fund posted a 7.96% total return on a pre-tax basis for the year. This is
equivalent to a taxable total return of 11.46%, assuming all dividends paid are
adjusted for the maximum federal income tax rate of 39.6%. The steady growth of
the economy, combined with benign levels of inflation, reduced yields in the
municipal bond market beginning in May. Bond prices rose, improving your Fund's
total return as the Fund continued to provide monthly income free from regular
income tax. Additional information on the Fund's investment results begins on
page 4.
Long-term municipal bond yields fluctuated within a narrow range during the
Fund's first quarter and into the early part of 1997. By March, yields began to
rise in response to reports of strong economic growth and in anticipation of a
Federal Reserve Board interest rate increase. After raising the federal funds
rate to 5.50% from 5.25% on March 25, the Fed left rates unchanged. As economic
growth continued without prompting a noticeable increase in inflation, the
municipal bond market rallied from May to July, and then traded within a narrow
range from August to September.
The yield on the Bond Buyer 20-Bond General Obligation Index, a benchmark for
the municipal market, ended the Fund's fiscal year at 5.36% on September 30,
1997, significantly lower than its 12-month high of 5.88% on April 10, and only
slightly higher than the July 31 low of 5.23%. The yield for the Bond Buyer
20-Bond General Obligation Index stood at 5.76% on September 30, 1996.
While economic indicators have been mixed recently, the overall tone of the
environment is good. Unemployment levels have remained historically low,
consumer and producer prices have been fairly stable, consumer spending has been
increasing at a reasonable rate, and orders for durable goods -- goods that have
a lifespan of three or more years -- have been rising. This economic expansion
has improved the financial well-being of municipalities and increased investor
confidence in the municipal bond market.
The next few months could be more challenging, given the recent volatility in
the global equity markets and the business slowdown in Southeast Asia.
Nevertheless, US economic reports remain positive overall. There are still a few
areas where potential inflationary problems persist, particularly in the labor
market. A significant increase in labor costs could prompt the Fed to become
more restrictive and move interest rates up another notch, though this is a
fading risk given recent international events. Nonetheless, the future prospects
of both the municipal bond market and your Fund remain positive. Supply and
demand levels in the municipal market should remain favorable regardless of the
short-term impact of any Fed move.
We thank you for your continued interest in Seligman New Jersey Municipal
Fund, and look forward to serving your investment needs in the many years to
come.
A discussion with your Portfolio Manager, the performance overview, portfolio
holdings, and financial statements follow this letter.
By order of the Board of Directors,
/S/ William C. Morris
Chairman
/S/ Brian T. Zino
President
October 31, 1997
1
<PAGE>
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Interview With Your Portfolio Manager, Thomas G. Moles
Q. What economic factors affected Seligman New Jersey Municipal Fund in the
last 12 months?
A. A healthy economy and a stable rate of inflation would seem the best of all
possible worlds. However, for much of the past year, the fixed-income
markets were most heavily influenced by economic growth and whether or not
inflation was an important risk factor. The longer the economic expansion
endured, the more anxious some market participants became that rising
inflation was just around the corner. The strong employment picture was of
particular concern. While low unemployment resulted in scattered labor
shortages, it did not translate into meaningfully higher wages. To date,
wage pressures continue to be restrained, mainly due to productivity
improvements and global competition. The market's reluctance to accept the
premise that economic vigor and low inflation are not mutually exclusive
has prevented long-term interest rates from falling to levels that would
better reflect this remarkable economic environment.
Q. What market factors affected Seligman New Jersey Municipal Fund in the last
12 months?
A. Seligman New Jersey Municipal Fund began its 10th year on a positive note.
During the past 12 months, long-term municipal yields, as measured by the
Bond Buyer 20-Bond General Obligation Index, fluctuated within a narrow
trading range. At September 30, 1997, yields were almost a half-point lower
than at the beginning of the Fund's fiscal year. The declining interest rate
environment led to rising prices for the majority of the Fund's holdings and
favorable performance results.
Investor demand for municipal securities generally kept pace with supply,
contributing to the relative stability of the municipal bond market. While
new issue volume has increased modestly over the
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A TEAM APPROACH
Seligman New Jersey Municipal Fund is managed by the Seligman Municipals Team,
headed by Thomas G. Moles. Mr. Moles is assisted in the management of the Fund
by a group of seasoned professionals who are responsible for research and
trading consistent with the Fund's investment objective.
YOUR PORTFOLIO MANAGER
Thomas G. Moles is a Managing Director of J. & W. Seligman & Co. Incorporated,
Vice President and Portfolio Manager of Seligman New Jersey Municipal Fund and
the other Seligman municipal mutual funds that include 19 separate portfolios,
and President and Portfolio Manager of Seligman Select Municipal Fund and
Seligman Quality Municipal Fund. He is responsible for more than $1.8 billion in
municipal securities. Mr. Moles, with more than 25 years of experience, has
spearheaded Seligman's municipal investment efforts since joining the firm in
1983.
Seligman Municipals Team: (from left) Audrey Kuchtyak, Theresa Barion,
Debra McGuinness, (seated) Eileen Comerford, Thomas G. Moles
(Portfolio Manager)
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2
<PAGE>
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Interview With Your Portfolio Manager, Thomas G. Moles
past several years, it
has had a negligible impact on the total outstanding supply of municipal
bonds due to a record number of bond calls and redemptions.
Additionally, the extraordinary economic expansion, now in its seventh
year, continued to improve credit trends for the nation's states, cities,
and municipalities. Year-to-date, credit rating upgrades significantly
outnumbered rating downgrades. Within the Fund, the overall credit quality
of the portfolio improved as several of our holdings received upgraded
ratings.
Q. What was your investment strategy?
A. Consistent with our positive long-term interest rate outlook, new purchases
were concentrated in longer maturity bonds. Generally, for a parallel
decline in yields, long-term bonds appreciate more in price than
shorter-term bonds. Long-term bonds also offer significantly higher yields
than shorter-term bonds, allowing us to improve the Fund's yield. Further,
given the market's short-term volatility, we sought to lessen the impact of
temporary interest rate increases on the Fund's net asset value without
sacrificing future upside potential. To do so, we elected to purchase mostly
current coupon bonds (bonds with coupon rates at or near current market
rates). Current coupon bonds are intrinsically less sensitive to changes in
interest rates than lower coupon bonds of the same maturity.
As the Fund matures, older, callable portfolio holdings are approaching
their optional call dates, resulting in increased reinvestment risk.
(Callable bonds are bonds that are redeemable on specified dates and at
specified prices -- prior to maturity -- at the option of the issuer.) In
general, an open-end fund's income distributions will, over time, move
toward current market levels as a result of portfolio activity, shareholder
transactions, and bond calls and redemptions. In the past year, we focused
on improving the Fund's call protection by selling shorter-call bonds and
replacing them with longer-call bonds, while attempting to minimize the
impact on income distributions.
Q. What is the outlook?
A. While fixed-income market participants remain cautious, economic
fundamentals point to a continuation of steady, moderate growth with low
inflation. We, therefore, remain optimistic regarding the long-term
prospects of the Fund. Stable long-term interest rates, improving credit
trends, and attractive real rates of return bode well for the performance of
the municipal bond market going forward. We believe municipal bond funds
will continue to play an important role in helping investors meet their
investment goals. At Seligman, we have a straightforward approach to
managing your municipal bond fund. We invest for the long term, building a
diversified portfolio of quality bonds, and always work to provide our
shareholders with competitive investment returns.
3
<PAGE>
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Performance Overview and Portfolio Summary
This chart compares a $10,000 hypothetical investment made in Seligman New
Jersey Municipal Fund Class A shares with and without the initial 4.75% maximum
sales charge, since inception on February 16, 1988, through September 30, 1997,
to a $10,000 hypothetical investment made in the Lehman Brothers Municipal Bond
Index (Lehman Index) for the same period. The performance of Seligman New Jersey
Municipal Fund Class D shares is not shown in this chart but is included in the
table on page 5. It is important to keep in mind that the Lehman Index does not
include any fees or sales charges and does not reflect state-specific bond
market performance. The table on page 5 also includes relevant portfolio
characteristics.
SELIGMAN NEW JERSEY MUNICIPAL FUND
Seligman New Jersey Municipal Fund Class A
With Without
Sales Sales
DATE Charge Charge Lehman Index
- -----------------------------------------------------
16-Feb-88 $9,520 $10,000 $10,000
31-Mar-88 9,093 9,552 9,884
30-Jun-88 9,402 9,876 10,075
30-Sep-88 9,707 10,196 10,333
31-Dec-88 10,013 10,518 10,524
31-Mar-89 10,110 10,620 10,593
30-Jun-89 10,747 11,289 11,220
30-Sep-89 10,668 11,206 11,228
31-Dec-89 11,070 11,628 11,659
31-Mar-90 11,046 11,603 11,712
30-Jun-90 11,315 11,886 11,986
30-Sep-90 11,206 11,771 11,993
31-Dec-90 11,820 12,416 12,510
31-Mar-91 12,065 12,673 12,793
30-Jun-91 12,316 12,937 13,065
30-Sep-91 12,772 13,416 13,574
31-Dec-91 13,125 13,787 14,030
31-Mar-92 13,106 13,767 14,072
30-Jun-92 13,691 14,381 14,606
30-Sep-92 14,011 14,717 14,993
31-Dec-92 14,304 15,026 15,266
31-Mar-93 14,856 15,605 15,833
30-Jun-93 15,438 16,216 16,350
30-Sep-93 15,975 16,781 16,903
31-Dec-93 16,074 16,885 17,140
31-Mar-94 15,169 15,934 16,199
30-Jun-94 15,258 16,027 16,379
30-Sep-94 15,297 16,068 16,490
31-Dec-94 15,085 15,846 16,252
31-Mar-95 16,108 16,920 17,402
30-Jun-95 16,426 17,254 17,821
30-Sep-95 16,791 17,638 18,334
31-Dec-95 17,433 18,312 19,090
31-Mar-96 17,131 17,995 18,859
30-Jun-96 17,307 18,180 19,004
30-Sep-96 17,692 18,584 19,441
31-Dec-96 18,026 18,935 19,937
31-Mar-97 17,929 18,833 19,891
30-Jun-97 18,501 19,434 20,577
30-Sep-97 19,100 20,063 21,198
The performance of Class D shares will be greater than or less than the
performance shown for Class A shares, based on differences in sales charges and
fees paid by shareholders.
Performance data quoted represent changes in prices and assume that all
distributions within the period are invested in additional shares. The rates
of return will vary and the principal value of an investment will fluctuate.
Shares, if redeemed, may be worth more or less than their original cost. Past
per for mance is not indicative of future in vest ment results.
4
<PAGE>
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Performance Overview and Portfolio Summary
INVESTMENT RESULTS PER SHARE
TOTAL RETURNS
For Periods Ended September 30, 1997
<TABLE>
<CAPTION>
AVERAGE ANNUAL
-------------------------------------------
CLASS A CLASS D
SINCE SINCE
ONE FIVE INCEPTION INCEPTION
SIX MONTHS YEAR YEARS 2/16/88 2/1/94
-------------- ------ ------- ------- ---------
<S> <C> <C> <C> <C> <C>
CLASS A*
With Sales Charge 1.50% 2.82% 5.35% 6.95% n/a
Without Sales Charge 6.53 7.96 6.39 7.50 n/a
CLASS D*
With 1% CDSL 5.08 6.11 n/a n/a n/a
Without CDSL 6.08 7.10 n/a n/a 3.93%
LEHMAN INDEX** 6.57 9.03 7.17 8.16+ 5.64++
</TABLE>
<TABLE>
<CAPTION>
NET ASSET VALUE DIVIDEND, CAPITAL GAIN, AND YIELD INFORMATION
For Periods Ended September 30, 1997
9/30/97 3/31/97 9/30/96 DIVIDENDS 0 CAPITAL GAIN 0 SEC YIELD 00
-------- -------- -------- ------------- ---------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
CLASS A $7.56 $7.27 $7.60 CLASS A $0.360 $0.248 4.15%
CLASS D 7.64 7.35 7.68 CLASS D 0.311 0.248 3.61
</TABLE>
<TABLE>
<CAPTION>
HOLDINGS BY MARKET SECTOR++ MOODY'S/S&P RATINGS++
<S> <C> <C> <C>
Revenue Bonds 81% Aaa/AAA 58%
General Obligation Bonds 19 Aa/AA 18
A/A 16
Baa/BBB 8
</TABLE>
WEIGHTED AVERAGE MATURITY 23.0 years
- ------------------
* Return figures reflect any change in price and assume all distributions
within the period are invested in additional shares. Returns for Class A
shares are calculated with and without the effect of the initial 4.75%
maximum sales charge. Returns for Class D shares are calculated with and
without the effect of the 1% contingent deferred sales load ("CDSL"),
charged only on redemptions made within one year of the date of
purchase.
A portion of the Fund's income may be subject to applicable state and local
taxes, and any amount may be subject to the federal alternative minimum tax.
** The Lehman Index is an unmanaged index that does not include any fees or
sales charges and does not reflect state-specific bond market performance.
Investors cannot invest directly in an index.
+ From 2/29/88.
++ From 1/31/94.
0 Represents per share amount paid or declared for the year ended September
30, 1997.
00 Current yield, representing the annualized yield for the 30-day period ended
September 30, 1997, has been computed in accordance with SEC regulations and
will vary.
++ Percentages based on market values of long-term holdings at September 30,
1997.
5
<PAGE>
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Portfolio of Investments
September 30, 1997
<TABLE>
<CAPTION>
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
- ---------- ------------------- ----------- -----------
<S> <C> <C> <C>
$2,500,000 Brick Township Municipal Utilities Authority, NJ Rev.,
6-1/2% due 12/1/2012 ................................................. Aaa/AAA $ 2,766,625
1,000,000 Delran Sewerage Authority, NJ Subordinated Sewer Rev.,
7-1/2% due 3/1/2013 .................................................. Aaa/AAA 1,045,180
3,000,000 Howell Township, NJ GOs, 6.80% due 1/1/2014 ............................. Aaa/AAA 3,312,510
3,000,000 Middletown, NJ Board of Education School GOs, 5.80% due 8/1/2019 ........ Aaa/AAA 3,118,260
1,000,000 New Jersey Building Authority State Building Rev., 7.20% due 6/15/2013... Aa2/AA- 1,036,820
1,500,000 New Jersey Building Authority State Building Rev., 5% due 6/15/2018 ..... Aa2/AA- 1,434,630
2,000,000 New Jersey Economic Development Authority Rev. (The Trustees
of the Lawrenceville School Project), 5-3/4% due 7/1/2016 ........... Aa2/NR 2,077,180
3,000,000 New Jersey Economic Development Authority Gas Facilities Rev.
(NUI Corporation Project), 5.70% due 6/1/2032* ....................... Aaa/AAA 3,043,170
2,900,000 New Jersey Economic Development Authority Sewage Facilities Rev.
(Anheuser-Busch Project), 5.85% due 12/1/2030* ....................... A1/A+ 2,996,251
1,000,000 New Jersey Economic Development Authority Water Facilities Rev.
(Middlesex Water Co. Project), 5.20% due 10/1/2022 ................... Aaa/AAA 971,400
3,500,000 New Jersey Economic Development Authority Water Facilities Rev.
(New Jersey-American Water Co., Inc. Project), 5-1/2% due 6/1/2023* .. Aaa/AAA 3,424,365
2,500,000 New Jersey Educational Facilities Financing Authority Rev.
(Princeton University), 6% due 7/1/2024 .............................. Aaa/AAA 2,619,675
1,000,000 New Jersey Health Care Facilities Financing Authority Rev.
(Chilton Memorial Hospital), 5% due 7/1/2013 ......................... A2/A 968,140
2,000,000 New Jersey Health Care Facilities Financing Authority Rev.
(St. Clare's Riverside Medical Center), 5-3/4% due 7/1/2014 .......... Aaa/AAA 2,086,380
2,000,000 New Jersey Health Care Facilities Financing Authority Rev.
(Hackensack Medical Center), 6-5/8% due 7/1/2017 .................... Aaa/AAA 2,172,760
2,500,000 New Jersey Health Care Facilities Financing Authority Rev.
(The Medical Center at Princeton), 7% due 7/1/2022 ................... Aaa/AAA 2,709,550
3,000,000 New Jersey Health Care Facilities Financing Authority Rev.
(Holy Name Hospital), 6% due 7/1/2025 ................................ NR/BBB+ 3,072,660
1,500,000 New Jersey Health Care Facilities Financing Authority Rev. (AHS
Hospital Corporation), 5% due 7/1/2027 ............................... Aaa/AAA 1,417,890
</TABLE>
- ------------------
+ Ratings have not been audited by Deloitte & Touche LLP.
* Interest income earned from this security is subject to the federal
alternative minimum tax.
See Notes to Financial Statements.
6
<PAGE>
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Portfolio of Investments
September 30, 1997
<TABLE>
<CAPTION>
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
- ---------- ------------------- ----------- -----------
<S> <C> <C> <C>
$890,000 New Jersey Housing & Mortgage Finance Agency (Home Mortgage
Purchase Rev.), 7-7/8% due 10/1/2016 ................................. Aaa/AAA $ 910,336
220,000 New Jersey Housing & Mortgage Finance Agency (Home Buyer Rev.),
7.65% due 10/1/2016 ................................................... Aaa/AAA 229,764
1,500,000 New Jersey Housing & Mortgage Finance Agency (Home Buyer Rev.),
6% due 10/1/2021* ..................................................... Aaa/AAA 1,547,805
1,000,000 New Jersey Housing & Mortgage Finance Agency (Home Buyer Rev.),
5-3/8% due 4/1/2025* .................................................. Aaa/AAA 968,620
345,000 New Jersey Housing & Mortgage Finance Agency (Home Buyer Rev.),
7.70% due 10/1/2029* .................................................. Aaa/AAA 361,643
3,000,000 New Jersey State GOs, 5-5/8% due 7/15/2015 ............................... Aa1/AA+ 3,143,490
340,000 New Jersey Wastewater Treatment Trust Loan Rev., 7-1/4% due 5/15/2006 .... Aa3/AA 353,647
420,000 New Jersey Wastewater Treatment Trust Loan Rev., 7-1/4% due 5/15/2007 .... Aa3/AA 436,859
990,000 New Jersey Wastewater Treatment Trust Loan Rev., 7-3/8% due 5/15/2007 .... Aaa/AAA 1,031,352
10,000 New Jersey Wastewater Treatment Trust Loan Rev., 7-3/8% due 5/15/2007 .... Aaa/AAA 10,409
3,000,000 Port Authority of New York & New Jersey Consolidated Rev.,
5-3/4% due 6/15/2030 .................................................. A1/AA- 3,082,830
2,000,000 Puerto Rico Highway & Transportation Authority Highway Rev.,
5-1/2% due 7/1/2036 ................................................... Baa1/A 2,006,800
2,500,000 Salem County, NJ Improvement Authority Rev. (Correctional Facility
& Courthouse Annex), 5.70% due 5/1/2017 ............................... Aaa/AAA 2,570,775
2,500,000 Salem County, NJ Pollution Control Financing Authority Waste Disposal Rev.
(E. I. duPont de Nemours & Co.), 6-1/8% due 7/15/2022* ................ Aa3/AA- 2,586,600
1,750,000 South Jersey Port Corporation, NJ Marine Terminal Rev.,
6-7/8% due 1/1/2020 ................................................... NR/A+ 1,789,235
1,250,000 South Jersey Port Corporation, NJ Marine Terminal Rev.,
5.60% due 1/1/2023 .................................................... NR/A+ 1,250,400
-----------
TOTAL MUNICIPAL BONDS (Cost $59,517,876)-- 97.9% ...................................................... 62,554,011
VARIABLE RATE DEMAND NOTES (Cost $400,000)-- 0.6% ..................................................... 400,000
OTHER ASSETS LESS LIABILITIES-- 1.5% .................................................................. 924,721
-----------
NET ASSETS-- 100.0% ................................................................................... $63,878,732
===========
</TABLE>
- ------------------
+ Ratings have not been audited by Deloitte & Touche LLP.
* Interest income earned from this security is subject to the federal
alternative minimum tax.
See Notes to Financial Statements.
7
<PAGE>
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Statement of Assets and Liabilities
September 30, 1997
<TABLE>
<S> <C> <C>
ASSETS:
Investments, at value:
Long-term holdings (Cost $59,517,876)............................. $62,554,011
Short-term holdings (Cost $400,000)............................... 400,000 $62,954,011
----------
Cash 94,477
Interest receivable.................................................................. 1,061,220
Receivable for Capital Stock sold.................................................... 39,698
Expenses prepaid to shareholder service agent........................................ 10,585
Other................................................................................ 1,973
-----------
Total Assets 64,161,964
-----------
LIABILITIES:
Dividends payable.................................................................... 111,271
Payable for Capital Stock repurchased................................................ 47,001
Accrued expenses, taxes, and other................................................... 124,960
-----------
Total Liabilities.................................................................... 283,232
-----------
Net Assets........................................................................... $63,878,732
===========
COMPOSITION OF NET ASSETS:
Capital Stock, at par ($.001 par value; 100,000,000 shares authorized; 8,448,845
shares outstanding):
Class A........................................................................... $ 8,281
Class D........................................................................... 168
Additional paid-in capital........................................................... 60,205,198
Undistributed net realized gain...................................................... 628,950
Net unrealized appreciation of investments........................................... 3,036,135
-----------
Net Assets $63,878,732
===========
NET ASSET VALUE PER SHARE:
Class A ($62,596,774 / 8,281,139 shares)............................................. $7.56
=====
Class D ($1,281,958 / 167,706 shares)................................................ $7.64
=====
</TABLE>
- ------------------
See Notes to Financial Statements.
8
<PAGE>
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Statement of Operations
For the Year Ended September 30, 1997
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Interest.................................................................................... $3,891,278
EXPENSES:
Management fee................................................................ $ 325,747
Distribution and service fees................................................. 157,912
Shareholder account services.................................................. 93,645
Auditing and legal fees....................................................... 34,478
Custody and related services.................................................. 23,899
Shareholder reports and communications........................................ 18,530
Directors' fees and expenses.................................................. 17,788
Registration.................................................................. 14,064
Shareholders' meeting......................................................... 9,121
Miscellaneous................................................................. 5,493
----------
Total Expenses.............................................................................. 700,677
----------
Net Investment Income....................................................................... 3,190,601
NET REALIZED AND UNREALIZED
GAIN ON INVESTMENTS:
Net realized gain on investments.............................................. 640,851
Net change in unrealized appreciation of investments.......................... 1,107,067
----------
Net Gain on Investments..................................................................... 1,747,918
----------
Increase in Net Assets from Operations...................................................... $4,938,519
==========
</TABLE>
- ------------------
See Notes to Financial Statements.
9
<PAGE>
- -------------------------------------------------------------------------------
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30,
--------------------------------
1997 1996
----------- -----------
<S> <C> <C>
OPERATIONS:
Net investment income........................................................... $ 3,190,601 $ 3,594,115
Net realized gain on investments ............................................... 640,851 2,195,899
Net change in unrealized appreciation of investments ........................... 1,107,067 (2,021,726)
----------- -----------
Increase in Net Assets from Operations.......................................... 4,938,519 3,768,288
----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income:
Class A...................................................................... (3,147,677) (3,541,660)
Class D...................................................................... (42,924) (52,455)
Net realized gain on investments:
Class A...................................................................... (2,166,159) (38,742)
Class D...................................................................... (33,218) (665)
----------- -----------
Decrease in Net Assets from Distributions....................................... (5,389,978) (3,633,522)
----------- -----------
</TABLE>
<TABLE>
<CAPTION>
SHARES
-----------------------------
YEAR ENDED SEPTEMBER 30,
-----------------------------
CAPITAL SHARE TRANSACTIONS: 1997 1996
---------- ----------
<S> <C> <C> <C> <C>
Net proceeds from sale of shares:
Class A............................................. 945,721 402,194 7,009,688 3,064,342
Class D............................................. 63,366 45,794 479,673 351,548
Shares issued in payment of dividends:
Class A............................................. 243,739 265,124 1,811,306 2,018,408
Class D............................................. 4,274 4,538 32,136 34,928
Exchanged from associated Funds:
Class A............................................. 411,620 103,792 3,035,982 787,281
Class D............................................. 2,882 7,301 22,069 56,910
Shares issued in payment of gain distributions:
Class A............................................. 215,373 3,678 1,595,916 28,281
Class D............................................. 3,939 61 29,503 471
---------- ---------- ----------- -----------
Total.................................................. 1,890,914 832,482 14,016,273 6,342,169
---------- ---------- ----------- -----------
Cost of shares repurchased:
Class A............................................. (1,964,212) (1,609,005) (14,557,171) (12,267,718)
Class D............................................. (54,046) (52,478) (408,164) (400,063)
Exchanged into associated Funds:
Class A............................................. (290,897) (136,194) (2,146,414) (1,033,975)
Class D............................................. (2,553) (10,420) (19,210) (80,905)
---------- ---------- ----------- -----------
Total.................................................. (2,311,708) (1,808,097) (17,130,959) (13,782,661)
---------- ---------- ----------- -----------
Decrease in Net Assets from Capital
Share Transactions .................................... (420,794) (975,615) (3,114,686) (7,440,492)
---------- ---------- ----------- -----------
---------- ----------
Decrease in Net Assets.................................................................. (3,566,145) (7,305,726)
NET ASSETS:
Beginning of year....................................................................... 67,444,877 74,750,603
----------- -----------
End of Year............................................................................. $63,878,732 $67,444,877
=========== ===========
</TABLE>
- ------------------
See Notes to Financial Statements.
10
<PAGE>
- -------------------------------------------------------------------------------
Notes to Financial Statements
1. Multiple Classes of Shares -- Seligman New Jersey Municipal Fund, Inc. (the
"Fund") offers two classes of shares. All shares existing prior to February 1,
1994, the commencement date of Class D shares, were classified as Class A
shares. Class A shares are sold with an initial sales charge of up to 4.75% and
a continuing service fee of up to 0.25% on an annual basis. Class A shares
purchased in an amount of $1,000,000 or more are sold without an initial sales
charge but are subject to a contingent deferred sales load ("CDSL") of 1% on
redemptions within 18 months of purchase. Class D shares are sold without an
initial sales charge but are subject to a distribution fee of up to 0.75% and a
service fee of up to 0.25% on an annual basis, and a CDSL of 1% imposed on
redemptions made within one year of purchase. The two classes of shares
represent interests in the same portfolio of investments, have the same rights,
and are generally identical in all respects except that each class bears its
separate distribution and certain other class expenses, and has exclusive voting
rights with respect to any matter on which a separate vote of any class is
required.
2. Significant Accounting Policies -- The financial statements have been
prepared in conformity with generally accepted accounting principles which
require management to make certain estimates and assumptions at the date of the
financial statements. The following summarizes the significant accounting
policies of the Fund:
a. Security Valuation --All municipal securities and other short-term holdings
maturing in more than 60 days are valued based upon quotations provided by
an independent pricing service or, in their absence, at fair value
determined in accordance with procedures approved by the Board of Directors.
Short-term holdings maturing in 60 days or less are generally valued at
amortized cost.
b. Federal Taxes -- There is no provision for federal income tax. The Fund has
elected to be taxed as a regulated investment company and intends to
distribute substantially all taxable net income and net gain realized.
c. Security Transactions and Related Investment Income -- Investment
transactions are recorded on trade dates. Identified cost of investments
sold is used for both financial statement and federal income tax purposes.
Interest income is recorded on the accrual basis. The Fund amortizes
original issue discounts and premiums paid on purchases of portfolio
securities. Discounts other than original issue discounts are not amortized.
d. Multiple Class Allocations-- All income, expenses (other than class-specific
expenses), and realized and unrealized gains or losses are allocated daily
to each class of shares based upon the relative value of the shares of each
class. Class-specific expenses, which include distribution and service fees
and any other items that are specifically attributable to a particular
class, are charged directly to such class. For the year ended September 30,
1997, distribution and service fees were the only class-specific expenses.
e. Distributions to Shareholders -- Dividends are declared daily and paid
monthly. Other distributions paid by the Fund are recorded on the
ex-dividend date. The treatment for financial statement purposes of
distributions made to shareholders during the year from net investment
income or net realized gains may differ from their ultimate treatment for
federal income tax purposes. These differences are caused primarily by
differences in the timing of the recognition of certain components of
income, expense, or realized capital gain for federal income tax purposes.
Where such differences are permanent in nature, they are reclassified in the
components of net assets based on their ultimate characterization for
federal income tax purposes. Any such reclassifications will have no effect
on net assets, results of operations or net asset value per share of the
Fund.
3. Purchases and Sales of Securities -- Purchases and sales of portfolio
securities, excluding short-term investments, for the year ended September 30,
1997, amounted to $13,012,333 and $18,521,484, respectively.
11
<PAGE>
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Notes to Financial Statements
At September 30, 1997, the cost of investments for federal income tax purposes
was substantially the same as the cost for financial reporting purposes, and the
tax basis gross unrealized appreciation and depreciation of investments amounted
to $3,110,005 and $73,870, respectively.
4. Management Fee, Administrative Services, and Other Transactions -- J. & W.
Seligman & Co. Incorporated (the "Manager") manages the affairs of the Fund and
provides the necessary personnel and facilities. Compensation of all officers of
the Fund, all directors of the Fund who are employees or consultants of the
Manager, and all personnel of the Fund and the Manager, is paid by the Manager.
The Manager's fee, calculated daily and payable monthly, is equal to 0.50% per
annum of the Fund's average daily net assets.
Seligman Financial Services, Inc. (the "Distributor"), agent for the
distribution of the Fund's shares and an affiliate of the Manager, received
concessions of $11,430 from the sale of Class A shares, after commissions of
$84,854 paid to dealers.
The Fund has an Administration, Shareholder Services and Distribution Plan
(the "Plan") with respect to distribution of its shares. Under the Plan, with
respect to Class A shares, service organizations can enter into agreements with
the Distributor and receive a continuing fee of up to 0.25% on an annual basis,
payable quarterly, of the average daily net assets of the Class A shares
attributable to the particular service organizations for providing personal
services and/or the maintenance of shareholder accounts. The Distributor charges
such fees to the Fund pursuant to the Plan. For the year ended September 30,
1997, fees paid aggregated $147,532, or 0.23% per annum of the average daily net
assets of Class A shares.
Under the Plan, with respect to Class D shares, service organizations can enter
into agreements with the Distributor and receive a continuing fee for providing
personal services and/or the maintenance of shareholder accounts of up to 0.25%
on an annual basis of the average daily net assets of the Class D shares for
which the organizations are responsible, and fees for providing other
distribution assistance of up to 0.75% on an annual basis of such average daily
net assets. Such fees are paid monthly by the Fund to the Distributor pursuant
to the Plan. For the year ended September 30, 1997, fees paid amounted to
$10,380, or 1% per annum of the average daily net assets of Class D shares.
The Distributor is entitled to retain any CDSL imposed on redemptions of
Class D shares occurring within one year of purchase and on certain redemptions
of Class A shares occurring within 18 months of purchase. For the year ended
September 30, 1997, such charges amounted to $260.
Seligman Services, Inc., an affiliate of the Manager, is eligible to receive
commissions from certain sales of Fund shares, as well as distribution and
service fees pursuant to the Plan. For the year ended September 30, 1997,
Seligman Services, Inc. received commissions of $2,451 from the sale of shares
of the Fund. Seligman Services, Inc. also received distribution and service fees
of $9,787, pursuant to the Plan.
Seligman Data Corp., which is owned by certain associated investment
companies, charged at cost $93,157 for shareholder account services.
Certain officers and directors of the Fund are officers or directors of the
Manager, the Distributor, Seligman Services, Inc., and/or Seligman Data Corp.
The Fund has a compensation arrangement under which directors who receive
fees may elect to defer receiving such fees. Interest is accrued on the deferred
balances. The cost of such fees and interest is included in directors' fees and
expenses, and the accumulated balance thereof at September 30, 1997, of $41,230
is included in other liabilities. Deferred fees and related accrued interest are
not deductible for federal income tax purposes until such amounts are paid.
12
<PAGE>
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Financial Highlights
The Fund's financial highlights are presented below. "Per share operating
performance" data is designed to allow investors to trace the operating
performance of each Class, on a per share basis, from the beginning net asset
value to the ending net asset value, so that investors can understand what
effect the individual items have on their investment, assuming it was held
throughout the period. Generally, per share amounts are derived by converting
the actual dollar amounts incurred for each item, as disclosed in the financial
statements, to their equivalent per share amounts, based on average shares
outstanding.
"Total return based on net asset value" measures each Class's performance
assuming that investors purchased Fund shares at net asset value as of the
beginning of the period, invested dividends and capital gains paid at net asset
value, and then sold their shares at the net asset value on the last day of the
period. The total return computations do not reflect any sales charges investors
may incur in purchasing or selling shares of the Fund. Total returns for periods
of less than one year are not annualized.
<TABLE>
<CAPTION>
CLASS A
-------------------------------------------------------
YEAR ENDED SEPTEMBER 30,
-------------------------------------------------------
1997 1996 1995 1994 1993
----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net Asset Value, Beginning of Year ..................... $7.60 $7.59 $7.40 $8.24 $7.74
----- ----- ----- ----- -----
Net investment income .................................. .36 .39 .39 .41 .42
Net realized and unrealized investment gain (loss)..... .21 .01 .29 (.74) .61
----- ----- ----- ----- -----
Increase (Decrease) from Investment Operations ......... .57 .40 .68 (.33) 1.03
Dividends paid or declared.............................. (.36) (.39) (.39) (.41) (.42)
Distributions from net gain realized.................... (.25) -- (.10) (.10) (.11)
----- ----- ----- ----- -----
Net Increase (Decrease) in Net Asset Value.............. (.04) .01 .19 (.84) .50
----- ----- ----- ----- -----
Net Asset Value, End of Year ........................... $7.56 $7.60 $7.59 $7.40 $8.24
===== ===== ===== ===== =====
TOTAL RETURN BASED ON NET ASSET VALUE: 7.96% 5.37% 9.77% (4.25)% 14.02%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets ......................... 1.06% 1.02% 1.01% .90% .86%
Net investment income to average net assets ............ 4.90% 5.06% 5.29% 5.24% 5.37%
Portfolio turnover...................................... 20.22% 25.65% 4.66% 12.13% 15.90%
Net Assets, End of Year
(000s omitted).......................................... $62,597 $66,293 $73,561 $73,942 $82,447
Without management fee waiver:**
Net investment income per share ..................... $.39 $.40 $.40
Ratios:
Expenses to average net assets ...................... 1.06% 1.07% 1.11%
Net investment income to average net assets.......... 5.24% 5.07% 5.12%
</TABLE>
- ------------------
See footnotes on page 14.
13
<PAGE>
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Financial Highlights
<TABLE>
<CAPTION>
CLASS D
-------------------------------------------
YEAR ENDED SEPTEMBER 30, 2/1/94*
------------------------------ TO
1997 1996 1995 9/30/94
---- ---- ---- -------
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net Asset Value, Beginning of Period ..................... $7.68 $7.67 $7.48 $8.14
----- ----- ----- -----
Net investment income .................................... .31 .33 .33 .23
Net realized and unrealized investment gain (loss)........ .21 .01 .29 (.66)
----- ----- ----- -----
Increase (Decrease) from Investment Operations ........... .52 .34 .62 (.43)
Dividends paid or declared ............................... (.31) (.33) (.33) (.23)
Distributions from net gain realized ..................... (.25) .-- (.10) --
----- ----- ----- -----
Net Increase (Decrease) in Net Asset Value ............... (.04) .01 .19 (.66)
----- ----- ----- -----
Net Asset Value, End of Period............................ $7.64 $7.68 $7.67 $7.48
===== ===== ===== =====
TOTAL RETURN BASED ON NET ASSET VALUE: 7.10% 4.56% 8.79% (5.47)%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets ........................... 1.83% 1.79% 1.89% 1.75%+
Net investment income to average net assets............... 4.13% 4.29% 4.45% 4.37%+
Portfolio turnover........................................ 20.22% 25.65% 4.66% 12.13%++
Net Assets, End of Period
(000s omitted)............................................ $1,282 $1,152 $1,190 $986
Without management fee waiver:**
Net investment income per share ....................... $.33 $.22
Ratios:
Expenses to average net assets......................... 1.94% 1.87%+
Net investment income to average net assets............ 4.40% 4.25%+
</TABLE>
- ------------------
* Commencement of offering of Class D shares.
** During the periods stated, the Manager, at its discretion, waived a portion
of its fees.
+ Annualized.
++ For the year ended September 30, 1994.
See Notes to Financial Statements.
14
<PAGE>
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Report of Independent Auditors
The Board of Directors and Shareholders,
Seligman New Jersey Municipal Fund, Inc.:
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of Seligman New Jersey Municipal Fund, Inc. as of
September 30, 1997, the related statements of operations for the year then ended
and of changes in net assets for each of the years in the two-year period then
ended, and the financial highlights for each of the periods presented. These
financial statements and financial highlights are the responsibility of the
Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements.
Our procedures included confirmation of securities owned as of September 30,
1997 by correspondence with the Fund's custodian. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of Seligman New Jersey
Municipal Fund, Inc. as of September 30, 1997, the results of its operations,
the changes in its net assets, and the financial highlights for the respective
stated periods, in conformity with generally accepted accounting principles.
/s/ DELOITTE & TOUCHE LLP
New York, New York
October 31, 1997
15
<PAGE>
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Board of Directors
Fred E. Brown
Director Emeritus
Director and Consultant, J. & W. Seligman & Co. Incorporated
John R. Galvin 2
Dean, Fletcher School of Law and Diplomacy
at Tufts University
Director, Raytheon Company
Director, USLIFE Corporation
Alice S. Ilchman 3
President, Sarah Lawrence College
Trustee, Committee for Economic Development
Chairman, The Rockefeller Foundation
Frank A. McPherson 2
Director, Kimberly-Clark Corporation
Director, Baptist Medical Center
John E. Merow
Retired Chairman and Senior Partner,
Sullivan & Cromwell, Law Firm
Director, Commonwealth Aluminum Corporation
Betsy S. Michel 2
Trustee, Geraldine R. Dodge Foundation
Chairman of the Board of Trustees, St. George's School
William C. Morris 1
Chairman
Chairman of the Board, J. & W. Seligman & Co.
Incorporated
Chairman, Carbo Ceramics Inc.
Director, Kerr-McGee Corporation
James C. Pitney 3
Retired Partner, Pitney, Hardin, Kipp & Szuch,
Law Firm
James Q. Riordan 3
Director, The Brooklyn Union Gas Company
Trustee, Committee for Economic Development
Director, Dow Jones & Co., Inc.
Director, Public Broadcasting Service
Richard R. Schmaltz 1
Managing Director, J. & W. Seligman & Co.
Incorporated
Trustee Emeritus, Colby College
Robert L. Shafer 3
Retired Vice President, Pfizer Inc.
Director, USLIFE Corporation
James N. Whitson 2
Executive Vice President and Director,
Sammons Enterprises, Inc.
Director, C-SPAN
Director, Red Man Pipe and Supply Company
Brian T. Zino 1
President
President, J. & W. Seligman & Co. Incorporated
Chairman, Seligman Data Corp.
- ----------------
Member: 1 Executive Committee
2 Audit Committee
3 Director Nominating Committee
16
<PAGE>
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Executive Officers
William C. Morris
Chairman
Brian T. Zino
President
Thomas G. Moles
Vice President
Lawrence P. Vogel
Vice President
Thomas G. Rose
Treasurer
Frank J. Nasta
Secretary
FOR MORE INFORMATION
Manager
J. & W. Seligman & Co. Incorporated
100 Park Avenue
New York, NY 10017
General Counsel
Sullivan & Cromwell
Independent Auditors
Deloitte & Touche LLP
General Distributor
Seligman Financial Services, Inc.
100 Park Avenue
New York, NY 10017
Shareholder Service Agent
Seligman Data Corp.
100 Park Avenue
New York, NY 10017
Important Telephone Numbers
(800) 221-2450 Shareholder Services
(800) 622-4597 24-Hour
Automated
Telephone Access Service
17
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Glossary of Financial Terms
CAPITAL GAIN DISTRIBUTION -- A payment to mutual fund shareholders of profits
realized on the sale of securities in the fund's portfolio. For tax purposes,
these profits may be considered short-, mid-, or long-term capital gains and may
be taxed at different rates.
CAPITAL APPRECIATION/DEPRECIATION -- An increase or decrease in the market value
of a mutual fund's portfolio securities, which is reflected in the net asset
value of the fund's shares. Capital appreciation/depreciation of an individual
security is in relation to the original purchase price.
COMPOUNDING -- The change in the value of an investment as shareholders receive
earnings on their investment's earnings. For example, if $1,000 is invested at a
fixed rate of 7% a year, the initial investment is worth $1,070 after one year.
If the return is compounded, second year earnings will be based not on the
original $1,000, but on the $1,070, which includes the first year's earnings.
CONTINGENT DEFERRED SALES LOAD (CDSL) -- Depending on the class of shares owned,
a fee charged by a mutual fund when shares are sold back to the fund (the CDSL
expires after a fixed time period).
DIVIDEND -- A payment by a mutual fund, usually derived from the fund's net
investment income (dividends and interest less expenses).
DIVIDEND YIELD -- A measurement of a fund's dividend as a percentage of the
maximum offering price.
EXPENSE RATIO -- The cost of doing business for a mutual fund, expressed as a
percent of the fund's net assets.
INVESTMENT OBJECTIVE -- The shared investment goal of a fund and its
shareholders.
MANAGEMENT FEE -- The amount paid by a mutual fund to its investment advisor(s).
MULTIPLE CLASSES OF SHARES -- Although an individual mutual fund invests in only
one portfolio of securities, it may offer investors several purchase options
which are "classes" of shares. Multiple classes permit shareholders to choose
the fee structure that best meets their needs and goals. Generally, each class
will differ in terms of how and when sales charges and certain fees are
assessed.
NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC.
(NASD) -- A self-regulatory body with authority over firms that distribute
mutual funds.
NET ASSET VALUE (NAV) PER SHARE -- The market worth of one fund share, obtained
by adding a mutual fund's total assets (securities, cash, and any accrued
earnings), subtracting liabilities, and dividing the resulting net assets by the
number of shares outstanding.
OFFERING PRICE (OP) -- The price at which a mutual fund's share can be
purchased. The offering price per share is the current net asset value plus any
sales charge.
PORTFOLIO TURNOVER -- A measure of the trading activity in
a mutual fund's investment portfolio that reflects how often securities are
bought and sold.
PROSPECTUS -- The legal document describing a mutual fund to all prospective
shareholders. It contains information required by the Securities and Exchange
Commission (SEC), such as a fund's investment objective and policies, services,
investment restrictions, officers and directors, how shares are bought and
redeemed, fund fees and other charges, and the fund's financial statements.
SEC YIELD -- SEC Yield refers to the net income earned by a fund during a recent
30-day period. This income is annualized and then divided by the maximum
offering price per share on the last day of the 30-day period. The SEC Yield
formula reflects semiannual compounding.
SECURITIES AND EXCHANGE COMMISSION -- The primary US federal agency that
regulates the registration and distribution of mutual fund shares.
STATEMENT OF ADDITIONAL INFORMATION -- Document that contains updated or more
detailed information about a mutual fund and supplements the prospectus. It is
available at no charge upon request.
TOTAL RETURN -- A measure of a fund's performance encompassing all elements of
return. Reflects the change in share price over a given period and assumes all
distributions are taken in additional fund shares. The Average Annual Total
Return represents the average annual compounded rate of return for the periods
presented.
YIELD ON SECURITIES -- For bonds, the current yield is the coupon rate of
interest, divided by the purchase price. For stocks, the yield is measured by
dividing dividends paid by the market price of the stock.
- --------------------
Adapted from the Investment Company Institute's 1997 Mutual Fund Fact Book.
18
<PAGE>
