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<PAGE> PAGE 2
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<PAGE> PAGE 12
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<PAGE> PAGE 13
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<PAGE> PAGE 14
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<PAGE> PAGE 15
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<PAGE> PAGE 16
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SIGNATURE DAVID F. HILL
TITLE PRESIDENT
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<SHARES-REINVESTED> 251
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<PER-SHARE-NII> 0.78
<PER-SHARE-GAIN-APPREC> 0.11
<PER-SHARE-DIVIDEND> (0.78)
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<PER-SHARE-NAV-END> 8.79
<EXPENSE-RATIO> 0.94
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000833045
<NAME> SAFECO TAXABLE BOND TRUST
<SERIES>
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<NAME> SAFECO INTERMEDIATE-TERM U.S. TREASURY FUND
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<PERIOD-START> OCT-01-1995
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<INVESTMENTS-AT-COST> 14,416
<INVESTMENTS-AT-VALUE> 14,276
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960163XO
To the Board of Directors and Shareholders
of SAFECO Taxable Bond Trust
In planning and performing our audit of the financial statements
of SAFECO Taxable Bond Trust, consisting of the SAFECO High-Yield
Bond Fund, SAFECO GNMA Fund, and SAFECO Intermediate-Term U.S.
Treasury Fund, for the year ended September 30, 1996, 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, and not to provide assurance on the internal control
structure.
The management of SAFECO Taxable Bond Trust 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 may 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
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 September 30, 1996.
This report is intended solely for the information and use of
management and the Securities and Exchange Commission.
November 1, 1996
Attachment 77(I)
SAFECO Intermediate-Term Treasury Fund , a series of the
Registrant, began issuing Class A shares of common stock at
$.001 par value on September 30, 1996. Class A shares are
subject to a maximum front end sales charge of 4.5%
declining to zero with an investment of $1,000,000 or more
and carry a 25 basis point service fee.
SAFECO Intermediate-Term Treasury Fund also began issuuing
Class B shares of common stock at $.001 par value on
September 30, 1996. Class B shares are subject to a maximum
contingent deferred sales charge of 5.00%, declining to zero
over six years. Class B shares automatically convert to
Class A shares in the first month following the sixth
anniversary of the initial investment. Class B shares carry
a 25 basis point service fee and a 75 basis point
distribution fee.