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001 A000000 THE CHAPMAN FUNDS, INC.
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011 A00AA01 THE CHAPMAN CO.
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<PAGE> PAGE 2
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012 A00AA01 CHAPMAN CAPITAL MANAGEMENT, INC.
012 B00AA01 84-00932
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015 A00AA01 UMB BANK
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<PAGE> PAGE 3
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SIGNATURE NATHAN A. CHAPMAN, JR.
TITLE PRESIDENT
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from the
registrant's audited semi annual financial statements dated October 31, 1997 amd
os qualified in its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 12-MOS
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<PERIOD-END> OCT-31-1997
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</TABLE>
ERNST & YOUNG LLP Two Commerce Square Phone: 215 448-5000
Suite 4000 Fax: 215 448-4069
2001 Market Street
Philadelphia
Pennsylvania 19103-7096
Report of Independent Auditors
Board of Directors
The Chapman Funds, Inc.
Baltimore, Maryland
In planning and performing our audit of the financial statements
of The Chapman Funds, Inc. (the Fund), comprised of the U.S.
Treasury Fund, for the year ended October 31, 1997, we
considered its internal control, 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.
The management of the Fund is responsible for establishing and
maintaining internal control. In fulfilling this
responsibility, estimates and judgments by management are
required to assess the expected benefits and related costs of
controls. Generally, controls that are relevant to an audit
pertain to the entitys objective of preparing financial
statements for external purposes that are fairly presented in
conformity with generally accepted accounting principles. Those
controls include the safeguarding of assets against unauthorized
acquisition, use or disposition.
Because of inherent limitations in internal control, errors or
irregularities may occur and not be detected. Also, projection
of any evaluation of internal control 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 would not necessarily
disclose all matters in the internal control 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 one or more
of the internal control components 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 and its operation, including
controls for safeguarding securities, that we consider to be
material weaknesses as defined above at October 31, 1997.
This report is intended solely for the information and use of
the Board of Directors and management of the Fund and the
Securities and Exchange Commission.
/s/ ERNST & YOUNG LLP
Philadelphia, Pennsylvania
November 17, 1997
