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<PAGE> PAGE 2
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<PAGE> PAGE 6
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<PAGE> PAGE 7
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<PAGE> PAGE 10
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<PAGE> PAGE 11
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SIGNATURE JIM ARNOLD
TITLE ADMINISTRATOR
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Report of Independent Auditors
The Board of Directors
The Primary Income Funds, Inc.
In planning and performing our audit of the financial
statements of The Primary Income Funds, Inc.
(comprising The Primary Income Fund and The Primary
U.S. Government Fund) for the year ended June 30,
1997, we considered their 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, not to provide assurance on the internal
control structure.
The management of The Primary Income Funds, Inc., 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 that 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 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 June 30,
1997.
This report is intended solely for the information
and use of management and the Securities and Exchange
Commission.
/s/ ERNST & YOUNG LLP
July 25, 1997
Milwaukee, Wisconsin
