<PAGE>
This is filed pursuant to Rule 497(e).
File No. 2-35566
<PAGE>
SEQUOIA FUND, INC.
Supplement to Prospectus January 2, 1997
This supplement to the current prospectus of Sequoia
Fund, Inc. supersedes certain information on the cover of
the prospectus and under the headings "PURCHASE OF SHARES"
and "REDEMPTION OF SHARES."
The phone number on the cover of the prospectus is
replaced by:
"(800) 686-6884"
The seventh paragraph under the heading "PURCHASE OF
SHARES" is deleted in its entirety.
The fourth and fifth paragraphs of the section
"REDEMPTION OF SHARES" are replaced in their entirety to
read:
"The Fund will also, for the principal purpose of
determining the net asset value per share at which the
redemption price shall be computed, give effect to a
stockholder's telephone or other oral request to the Fund
for the redemption of his shares, subject to the Fund's
right under certain circumstances to request verification of
the identity of the party requesting the redemption prior to
giving effect to the redemption request. Promptly following
his oral redemption request of greater than $25,000 to the
Fund or if the redeeming stockholder has changed his address
of record in the 60 days prior to the oral redemption
request, a stockholder should forward to the Fund's Transfer
Agent all the appropriate supporting documentation as set
forth in the immediately preceding paragraph. Although the
amount of payment for such redeemed shares will be
determined at the net asset value per share next computed
following the stockholder's oral redemption request, such
payment will not be made until the Transfer Agent has
received all required documentation.
A stockholder's oral redemption request is (upon
satisfactory verification if requested by the Fund)
effective to divest him of the redeemed shares for all
purposes except the Fund's forwarding of payment therefor.
If the redemption is in an amount greater than $25,000 or
the redeeming stockholder has changed his address of record
in the 60 days prior to the oral redemption request, the
amount of such payment will be held by the Fund for such
stockholder's account, without interest, until the Transfer
<PAGE>
Agent has received proper documentation as to the
redemption."
<PAGE>
This is filed pursuant to Rule 497(e).
File No. 2-35566
<PAGE>
SEQUOIA FUND, INC.
Supplement to Statement of January 2, 1997
Additional Information
This supplement to the current statement of additional
information of Sequoia Fund, Inc. supersedes certain
information on the cover of the statement of additional
information and under the heading "REDEMPTION OF SHARES."
The telephone number on the cover of the statement of
additional information is replaced by:
"(Telephone 800-686-6884)"
The section "REDEMPTION OF SHARES" is replaced in its
entirety by:
"The right of redemption may not be suspended or
(other than by reason of a stockholder's delay in furnishing
the required documentation following certain oral redemption
requests) the date of payment upon redemption postponed for
more than seven days after a stockholder's redemption
request in accordance with the procedures set forth in the
Prospectus, except for any period during which the New York
Stock Exchange, Inc. is closed (other than customary week-
end and holiday closings) or during which the Securities and
Exchange Commission determines that trading thereon is
restricted, or for any period during which an emergency (as
determined by the Securities and Exchange Commission) exists
as a result of which disposal by the Fund of securities
owned by it is not reasonably practicable or as a result of
which it is not reasonably practicable for the Fund fairly
to determine the value of its net assets, or for such other
period as the Securities and Exchange Commission may by
order permit for the protection of security holders of the
Fund."
69900020.AO8
