To the Audit Committee of the Board of Directors of
American Gas Index Fund, Inc.:
We have examined management's assertion about American
Gas Index Fund, Inc. (the Fund's) compliance with the
requirements of subsections (b) and (c) of Rule 17f-2
under the Investment Company Act of 1940 (the Act) as
of December 31, 1998, included in the accompanying
Management Statement Regarding Compliance with Certain
Provisions of the Investment Company Act of 1940.
Management is responsible for the Fund's compliance
with those requirements. Our responsibility is to
express an opinion on management's assertion about
the Fund'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 Fund's compliance
with those requirements and performing such other
procedures as we considered necessary in the
circumstances. Included among our procedures were
the following tests performed as of December 31, 1998,
and with respect to agreement of security purchases
and sales, for the period from August 21, 1998, the
date of our last examination, through December 31, 1998:
* Confirmation of all securities held by Rushmore Trust
and Savings, FSB (Rushmore Trust) in book entry form for
the account of the Fund;
* Confirmation from Rushmore Trust that the securities held
for the account of the Fund were held for the account of
Rushmore Trust by Mellon Bank, N.A. (Mellon), as agent
for Rushmore Trust;
* Confirmation with Mellon of all securities held by
Mellon in book entry form for the account of Rushmore
Trust;
* Confirmation with brokers that all purchases and sales
outstanding were in agreement with the Fund's records;
* Reconciliation of all such securities to the books and
records of the Rushmore Trust and the Fund;
* Confirmation of all repurchase agreements with brokers
and agreement of underlying collateral with broker's
records;
* Agreement of two security purchases and one security
sale since our last report from the books and records
of the Fund to broker confirmations.
We believe that our examination provides a reasonable
basis for our opinion. Our examination does not provide
a legal determination on the Fund's compliance with
specified requirements.
In our opinion, management's assertion that American Gas
Index Fund, Inc. was in compliance with the requirements
of subsections (b) and (c) of Rule 17f-2 of the
Investment Company Act of 1940 as of December 31, 1998
with respect to securities reflected in the investment
account of the Fund is fairly stated, in all material
respects.
This report is intended solely for the information and use
of management and the Audit Committee of the Board of
Directors of American Gas Index Fund, Inc., and the
Securities and Exchange Commission and is not intended
to be and should not be used by anyone other than
these specified parties.
Deloitte & Touche LLP
Princeton, New Jersey
April 21, 1999
Management Statement Regarding Compliance with
Certain Provisions of the Investment Company Act of 1940
We, as members of management of American Gas Index, Fund,
Inc. (the Fund), 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 effective internal controls over compliance
with those requirements. We have performed an
evaluation of the Fund's compliance with the
requirements of subsections (b) and (c) of Rule 17f-2
as of December 31, 1998 and from August 21, 1998
(last examination date) through December 31, 1998.
Based on this evaluation, we assert that the Fund was
in compliance with the requirements of subsections (b)
and (c) of Rule 17f-2 of the Investment Company Act of
1940 as of December 31, 1998 and from August 21, 1998
(last examination date) through December 31, 1998, with
respect to securities reflected in the investment
accounts of American Gas Index Fund, Inc.
Richard J. Garvey
Chairman
Timothy N. Coakley
Vice President
