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SIGNATURE XYZ
TITLE XYZ
77.B
[LETTERHEAD] ARTHUR ANDERSEN LLP
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Board of Directors of
The New America High Income Fund, Inc.:
In planning and performing our audit of the financial statements of The New
America High Income Fund, Inc. for the year ended December 31, 1997, we
considered its internal control structure, including procedures for safeguarding
securities, in order to determine our auditing procedures for the purpose of
expressing our opinion on the financial statements and to comply with the
requirements of Form N-SAR, not to provide assurance on the internal control
structure.
The management of The New America High Income Fund, Inc. is responsible for
establishing and maintaining an internal control structure. In fulfilling this
responsibility, estimates and judgments by management are required to assess the
expected benefits and related costs of internal control structure policies and
procedures. Two of the objectives of an internal control structure are to
provide management with reasonable, but not absolute, assurance that assets are
safeguarded against loss from unauthorized use or disposition and transactions
are executed in accordance with management's authorization and recorded properly
to permit preparation of financial statements in conformity with generally
accepted accounting principles.
Because of inherent limitations in any internal control structure, errors or
irregularities may occur and not be detected. Also, projection of any evaluation
of the structure to future periods is subject to the risk that it may become
inadequate because of changes in conditions or that the effectiveness of the
design and operation may deteriorate.
Our consideration of the internal control structure would not necessarily
disclose all matters in the internal control structure that might be material
weaknesses under the standards established by the American Institute of
Certified Public Accountants. A material weakness is a condition in which the
design or operation of the specific internal control structure elements does not
reduce to a relatively low level the risk that errors or irregularities in
amounts that would be material in relation to the financial statements being
audited may occur and not be detected within a timely period by employees in the
normal course of performing their assigned functions. However, we noted no
matters involving the internal control structure, including procedures for
safeguarding securities, that we consider to be material weaknesses, as defined
above, as of December 31, 1997.
This report is intended solely for the information and use of management and the
Securities and Exchange Commission.
/s/ Arthur Andersen LLP
Boston, Massachusetts
January 23, 1998
77.C
On May 29, 1997 the Annual Meeting of Stockholders of The New America High
Income Fund, Inc. was held. The following proposal was approved by the Fund's
common and preferred stockholders.
1. To approve the Articles of Amendment which would split each share of the
Fund's outstanding Series A and Series B Auction Term Preferred Stock into two
shares of the same series, reduce the liquidation preference of each such share
from $50,000 to $25,000 plus accumulated and unpaid dividends and make certain
conforming technical changes.
Number of Shares
Votes For 38,273,153.834
Votes Against 1,284,423.715
77. I.
At the May 29, 1997 Annual Meeting, the shareholders of the Fund's common and
preferred stock voted to split the Fund's Auction Term Preferred (ATP) Series A
and Series B 2:1. Effective June 3, 1997, the liquidation preference of the
Fund's Series B ATP was reduced from $50,000 per share to $25,000 per share plus
accumulated and unpaid dividends and the number of shares outstanding doubled
from 800 to 1,600 shares. Effective June 17, 1997, the liquidation preference of
the Fund's Series A ATP was reduced from $50,000 to $25,000 per share plus
accumulated and unpaid dividends and the number of shares outstanding doubled
from 1,200 to 2,400.
On May 6, 1997 the Fund issued 2,000 shares of Series C ATP. The Series C ATP
has a liquidation preference of $25,000 per share plus accumulated and unpaid
dividends.
The ATP is redeemable at the option of the Fund, or subject to mandatory
redemption (if the Fund is in default of certain coverage requirements) at a
redemption price equal to $25,000 per share plus accumulated and unpaid
dividends. The Fund is required to maintain certain asset coverages with respect
to the ATP under the Fund's Charter and the 1940 Act.
77. Q. 1.
The Investment Advisory Agreement (the "Agreement") dated February 19, 1992
between The New America High Income Fund, Inc. and Wellington Management
Company, LLP is amended as of August 1, 1997 to replace the first sentence of
Section 3, "Compensation of the Investment Adviser," of the Agreement with the
following:
"For the services to be rendered by the Investment Adviser as provided in
Sections 1 and 2 of this Agreement, the Fund shall pay to the Investment
Adviser, as promptly as possible after the last day of each month, an investment
advisory fee at the annual rate of .45% of the Fund's "Average Net Assets,"
based on the average weekly net asset value."
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