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SIGNATURE ROBERT L. MUELLER
TITLE VICE PRESIDENT
<TABLE> <S> <C>
<ARTICLE> 6
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> DEC-31-1998
<INVESTMENTS-AT-COST> 38,518,613
<INVESTMENTS-AT-VALUE> 98,339,856
<RECEIVABLES> 108,935
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<OTHER-ITEMS-ASSETS> 0
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<SHARES-COMMON-STOCK> 2,639,729
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<OVERDISTRIBUTION-NII> 0
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<OVERDISTRIBUTION-GAINS> 0
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<DIVIDEND-INCOME> 676,151
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<NET-INVESTMENT-INCOME> (252,172)
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</TABLE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors and Shareholders of
the L. Roy Papp Stock Fund, Inc.:
In planning and performing our audit of the financial statements
of the L. Roy Papp Stock Fund, Inc., for the year ended
December 31, 1998, 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 L. Roy Papp Stock Fund, Inc., 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 entity's 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 structure 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
misstatements caused by error or fraud 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
as of December 31, 1998.
This report is intended solely for the information and use
of management, the Board of Directors of The L. Roy Papp
Stock Fund, Inc., and the Securities and Exchange Commission.
ARTHUR ANDERSEN LLP
Phoenix, Arizona,
January 21, 1999.
