American Gas Index Fund, Inc.
4922 Fairmont Avenue
Bethesda, Maryland 20814
To the Board of Directors of American Gas Index
Fund, Inc.:
We are the auditors of American Gas Index Fund, Inc.,
(the Fund). Rushmore Trust and Savings, FSB (Rushmore
Trust), a related entity, is custodian of the Fund and
the Fund is therefore subject to the provisions of
Rule 17f-2 under the Investment Company Act of 1940.
Accordingly, we have, without prior notice to the Fund
or to Rushmore Trust, accounted for the Fund's
investment securities held by Rushmore Trust as of the
close of business on August 21, 1998. It is understood
that this report is solely for the use of management and
for the information of the Securities and Exchange
Commission and should not be used for any other purpose.
Rushmore Trust, in addition to acting as custodian for the
Fund, is custodian for other customers. Agents of Rushmore
Trust hold, or account for by book entry, securities that
are the responsibility of Rushmore Trust through custodial
or trust agreements. Securities held by agents of Rushmore
Trust, while identified by such agents as being deposited
by Rushmore Trust, cannot be identified by such agents as
to the specific customers of Rushmore Trust whom have
securities included in such deposits.
Rushmore Trust confirmed to us that Mellon Bank, N.A.
(Mellon), as agent for Rushmore Trust, held the portfolio
securities owned by the Fund on August 21, 1998 for the
account of Rushmore Trust. We obtained confirmation from
Mellon of the securities held for the account of Rushmore
Trust as of August 21, 1998. We reviewed Rushmore Trust's
reconciliation of Mellon's confirmation to Rushmore Trust's
internal records, identifying securities held by Mellon as
a part of Rushmore Trust's aggregate security position with
Mellon. We also reviewed Rushmore Trust's records that show
the owners of the securities held by Mellon for the account
of the Rushmore Trust at August 21, 1998. We determined
that these securities, identified by such records as the
property of the Fund, were in agreement with the Fund's
records of securities owned at August 21, 1998. In
addition, a broker confirmed to us the repurchase
agreement outstanding at August 21, 1998, which was in
agreement with the Fund's records. We also agreed an
analysis of portfolio transactions recorded subsequent to
March 31, 1998, the date of the last audit of the
financial statements, in the investment accounts to
supporting records and verified a sample of portfolio
security transactions to supporting records and
documentation.
Because the above procedures were not sufficient to
constitute an audit made in accordance with generally
accepted auditing standards, we do not express an
opinion on the investment accounts referred to above as
of the dates indicated. In connection with the
procedures referred to above, no matters came to our
attention that caused us to believe that the specified
accounts should be adjusted. Had we performed additional
procedures or had we made an audit of the financial
statements of the Fund in accordance with generally
accepted auditing standards, matters might have come to
our attention that would have been reported to you.
This report relates only to the investments specified
above and does not extend to the financial statements
of the Fund, taken as a whole for any date or period.
Deloitte & Touche, LLP
Princeton, New Jersey
October 2, 1998
