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 December 19, 1997. 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 which are the responsibility of
Rushmore Trust through custodian 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 who have securities included in such
deposits.
Rushmore Trust confirmed to us that the portfolio securities owned by the
Fund on December 19, 1997 were held for the account of Rushmore Trust by
Mellon Bank, N.A. (Mellon) as agent for Rushmore Trust. We obtained
confirmation from Mellon of the securities held for the account of Rushmore
Trust as of December 19, 1997. 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 which
show the owners of the securities held by Mellon for the account of the
Rushmore Trust at December 19, 1997. 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 December 19, 1997. In
addition, a broker confirmed to us the repurchase agreement outstanding at
December 19, 1997, which was in agreement with the Fund's records. We
also agreed an analysis of portfolio transactions recorded subsequent to
March 31, 1997, 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
January 23, 1998
