[DESCRIPTION] LEGAL OPINION
October 28, 1996
SM&R Capital Funds, Inc.
One Moody Plaza
Galveston, Texas 77550
Gentlemen:
Referring to the shares of Common Stock, $.01 par value, of SM&R Capital Funds,
Inc. (the "Company") sold during its fiscal year ended August 31, 1996, in
reliance upon registration of an indefinite number of shares pursuant to Rule
24f-2 under the Investment Company Act of 1940, as amended, in connection with
which the company is filing its Rule 24f-2 Notice, we have examined the
Company's Articles of Incorporation, its corporate records in connection with
the issuance of said shares, the Company's Registration Statement with the
Securities and Exchange Commission under the Securities Act of 1933, as
amended, related prospectuses and its Notification of Election Under
Rule 24f-1. On the basis of such examination, we are of the opinion that:
1. The Company is a corporation duly organized and existing under the laws of
the State of Maryland.
2. The 39,051,942 shares of Common Stock sold in reliance upon the
registration of an indefinite number of shares pursuant to Rule 24f-2 have
been duly and legally authorized, and are validly issued, fully paid and
non-assessible.
Yours very truly,
GREER, HERZ & ADAMS, L.L.P.
JERRY L. ADAMS
