The Spain Fund
500 Plaza Drive Secaucus NJ 07094
(201) 319-4000
Management Statement Regarding Compliance with
Certain Provisions of the Investment Company Act of 1940
We, as members of management of The Spain Fund, Inc. (the
"Company"), are responsible for complying with the requirements
of subsections (b) and (c) of Rule 17f-2, "Custody of
Investments by Registered Management Investment Companies", of
the Investment Company Act of 1940. We are also responsible for
establishing and maintaining an effective internal control
structure over compliance with the requirements of subsections
(b) and (c) of Rule 17f-2 as of March 13, 1998.
Except as indicated below, all securities owned by the company
as reflected in the accounting records of the Company at March
13, and which are denoted by such records as being under the
control of Banco Bilbao Vizcaya, S.A. (" the subcustodian") were
held in book entry form by the Spanish central depository,
Servicio de Compensacion y Liquidacion de Valores ("SCL"). The
securities maintained by SCL are held in an omnibus account on
behalf of the subcustodian. At March 13, 1998, the subcustodian
physically held 1,511,470 shares of Unidad Editorial, S.A.
Series A.
Based on this evaluation as of March 13, 1998, we assert that
the Company was in compliance with those provisions of Rule
17f-2 of the Investment Company Act of 1940, with respect to
securities reflected in the investment account of the Company.
The Spain Fund, Inc.
By:
____________________________________
Name/Title
____________________________________
Name/Title
Report of Independent Accountants
June 20, 1998
To the Board of Directors of
The Spain Fund, Inc.
We have examined management's assertions about the compliance of
The Spain Fund, Inc. (the "Company") with the requirements of
subsections (b) and (c) of Rule 17f-2 under the Investment
Company Act of 1940 ("the Act") as of January 30, 1998 included
in the accompanying Management Statement Regarding Compliance
with Certain Provisions of the Investment Company Act of 1940.
Management is responsible for the Company's compliance with
those requirements. Our responsibility is to express an opinion
on management's assertions about the Company's compliance based
on our examination.
Our examination was made in accordance with standards
established by the American Institute of Certified Public
Accountants and accordingly included examining, on a test basis,
evidence about the Company's compliance with those requirements
and performing such other procedures as we considered necessary
in the circumstances. Such procedures were performed by us, and
by other independent accountants who have reported to us, with
respect to securities denoted by the Company's accounting
records as being under the control of Banco Bilbao Vizcaya, S.A.
("the subcustodian"). Included among the procedures performed
were the following tests performed as of January 30, 1998 and
for the period from December 1, 1997 through January 30, 1998
with respect to agreement of purchases and sales of securities
without prior notice to management.
Confirmation of securities with the Company's custodian, Brown
Brothers Harriman & Co., including the location of such
securities.
Count and inspection of all securities located in the vault of
the subcustodian in Bilbao, Spain. This was performed by other
independent accountants who have reported to us. The other
accountants counted such securities on June 5, 1998. We noted
that there has been no change in such holdings since our last
examination.
Reconciliation by the other independent accountants of
selected securities denoted by the Custodian's records as being
held by the subcustodian in book entry form at Servicio de
Compensacion y Liquidacion de Valores ("SCL") in Spain.
Reconciliation of confirmation results and the results of the
work of the other independent accountants for all securities to
the books and records of the Company.
Agreement of two security purchases and two security sales or
maturities since our last examination, from the books and
records of the Company to broker confirmations or subsequent
bank statements.
We believe that our examination, including the procedures
performed by the other independent accountants, provides a
reasonable basis for our opinion. Our examination does not
provide a legal determination on the Company's compliance with
specified requirements.
In our opinion, management's assertion that The Spain Fund, Inc.
was in compliance with the above mentioned provisions of Rule
17f-2 of the Investment Company Act of 1940 as of January 30,
1998 is fairly stated, in all material respects.
This report is intended solely for the information and use of
management of The Spain Fund, Inc. and The Securities and
Exchange Commission and should not be used for any other purpose.
PRICE WATERHOUSE LLP
