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SIGNATURE ELLEN TERRY
TITLE VICE PRESIDENT
ARTHUR ANDERSEN LLP
REPORT OF INDEPENDENT PUBLIC 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, 1998, we
considered its internal control structure, including control activities 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 judgements 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 acquisition, 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
fraud 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 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 misstatements caused by error or fraud 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, 1998.
This report is intended solely for the information and use of management,
The Board of Directors of The New America High Income Fund, Inc., and the
Securities and Exchange Commission.
/s/ Arthur Andersen LLP
Boston, Massachusetts
January 29, 1999
On May 20, 1998, the Fund issued 2,400 shares of Series D Auction Term
Preferred, (ATP). The Series D 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 shares plus accumulated and unpaid
dividends. The Fund is required to maintain certain asset coverage with respect
to the ATP under the Fund's Charter and the 1940 Act.
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