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<PAGE> PAGE 2
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<PAGE> PAGE 3
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<PAGE> PAGE 4
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<PAGE> PAGE 5
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<PAGE> PAGE 7
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<PAGE> PAGE 8
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SIGNATURE THOMAS M. REYNOLDS
TITLE CONTROLLER
[ARTICLE] 6
[CIK] 0000089558
[NAME] SMITH BARNEY APPRECIATION FUND INC. CLASS A
<TABLE>
<S> <C>
[PERIOD-TYPE] YEAR
[FISCAL-YEAR-END] DEC-31-1997
[PERIOD-END] DEC-31-1997
[INVESTMENTS-AT-COST] 2,926,507,966
[INVESTMENTS-AT-VALUE] 4,242,923,442
[RECEIVABLES] 14,941,440
[ASSETS-OTHER] 15,681
[OTHER-ITEMS-ASSETS] 0
[TOTAL-ASSETS] 4,259,880,563
[PAYABLE-FOR-SECURITIES] 14,266,445
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 8,835,378
[TOTAL-LIABILITIES] 23,101,823
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 2,842,435,818
[SHARES-COMMON-STOCK] 181,451,832
[SHARES-COMMON-PRIOR] 163,392,466
[ACCUMULATED-NII-CURRENT] 0
[OVERDISTRIBUTION-NII] 1,964,848
[ACCUMULATED-NET-GAINS] 73,962,598
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 1,316,415,476
[NET-ASSETS] 4,234,778,740
[DIVIDEND-INCOME] 62,311,249
[INTEREST-INCOME] 33,623,647
[OTHER-INCOME] 0
[EXPENSES-NET] 47,394,092
[NET-INVESTMENT-INCOME] 48,540,804
[REALIZED-GAINS-CURRENT] 541,703,300
[APPREC-INCREASE-CURRENT] 307,655,353
[NET-CHANGE-FROM-OPS] 849,358,653
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] 1,204,098
[DISTRIBUTIONS-OF-GAINS] 9,807,550
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 17,513,526
[NUMBER-OF-SHARES-REDEEMED] 24,395,501
[SHARES-REINVESTED] 24,941,341
[NET-CHANGE-IN-ASSETS] 446,488,191
[ACCUMULATED-NII-PRIOR] 0
[ACCUMULATED-GAINS-PRIOR] 81,727,277
[OVERDISTRIB-NII-PRIOR] 6,493
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 23,133,933
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 47,012,287
[AVERAGE-NET-ASSETS] 2,347,369,894
[PER-SHARE-NAV-BEGIN] 12.85
[PER-SHARE-NII] 00.19
[PER-SHARE-GAIN-APPREC] 03.17
[PER-SHARE-DIVIDEND] 00.20
[PER-SHARE-DISTRIBUTIONS] 02.09
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 13.92
[EXPENSE-RATIO] 00.95
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
</TABLE>
[ARTICLE] 6
[CIK] 0000089558
[NAME] SMITH BARNEY APPRECIATION FUND INC. CLASS B
<TABLE>
<S> <C>
[PERIOD-TYPE] YEAR
[FISCAL-YEAR-END] DEC-31-1997
[PERIOD-END] DEC-31-1997
[INVESTMENTS-AT-COST] 2,926,507,966
[INVESTMENTS-AT-VALUE] 4,242,923,442
[RECEIVABLES] 14,941,440
[ASSETS-OTHER] 15,681
[OTHER-ITEMS-ASSETS] 0
[TOTAL-ASSETS] 4,259,880,563
[PAYABLE-FOR-SECURITIES] 14,266,445
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 8,835,378
[TOTAL-LIABILITIES] 23,101,823
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 2,842,435,818
[SHARES-COMMON-STOCK] 101,607,793
[SHARES-COMMON-PRIOR] 88,543,916
[ACCUMULATED-NII-CURRENT] 0
[OVERDISTRIBUTION-NII] 1,964,848
[ACCUMULATED-NET-GAINS] 73,962,598
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 1,316,415,476
[NET-ASSETS] 4,234,778,740
[DIVIDEND-INCOME] 62,311,249
[INTEREST-INCOME] 33,623,647
[OTHER-INCOME] 0
[EXPENSES-NET] 47,394,092
[NET-INVESTMENT-INCOME] 48,540,804
[REALIZED-GAINS-CURRENT] 541,703,300
[APPREC-INCREASE-CURRENT] 307,655,353
[NET-CHANGE-FROM-OPS] 849,358,653
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] 209,194
[DISTRIBUTIONS-OF-GAINS] 5,527,902
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 16,098,504
[NUMBER-OF-SHARES-REDEEMED] 16,311,962
[SHARES-REINVESTED] 13,977,335
[NET-CHANGE-IN-ASSETS] 446,488,191
[ACCUMULATED-NII-PRIOR] 0
[ACCUMULATED-GAINS-PRIOR] 81,727,277
[OVERDISTRIB-NII-PRIOR] 6,493
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 23,133,933
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 47,012,287
[AVERAGE-NET-ASSETS] 1,297,033,497
[PER-SHARE-NAV-BEGIN] 12.81
[PER-SHARE-NII] 00.07
[PER-SHARE-GAIN-APPREC] 03.15
[PER-SHARE-DIVIDEND] 00.06
[PER-SHARE-DISTRIBUTIONS] 02.09
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 13.88
[EXPENSE-RATIO] 01.73
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
</TABLE>
[ARTICLE] 6
[CIK] 0000089558
[NAME] SMITH BARNEY APPRECIATION FUND INC. CLASS C
<TABLE>
<S> <C>
[PERIOD-TYPE] YEAR
[FISCAL-YEAR-END] DEC-31-1997
[PERIOD-END] DEC-31-1997
[INVESTMENTS-AT-COST] 2,926,507,966
[INVESTMENTS-AT-VALUE] 4,242,923,442
[RECEIVABLES] 14,941,440
[ASSETS-OTHER] 15,681
[OTHER-ITEMS-ASSETS] 0
[TOTAL-ASSETS] 4,259,880,563
[PAYABLE-FOR-SECURITIES] 14,266,445
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 8,835,378
[TOTAL-LIABILITIES] 23,101,823
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 2,842,435,818
[SHARES-COMMON-STOCK] 3,449,192
[SHARES-COMMON-PRIOR] 1,950,958
[ACCUMULATED-NII-CURRENT] 0
[OVERDISTRIBUTION-NII] 1,964,848
[ACCUMULATED-NET-GAINS] 73,962,598
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 1,316,415,476
[NET-ASSETS] 4,234,778,740
[DIVIDEND-INCOME] 62,311,249
[INTEREST-INCOME] 33,623,647
[OTHER-INCOME] 0
[EXPENSES-NET] 47,394,092
[NET-INVESTMENT-INCOME] 48,540,804
[REALIZED-GAINS-CURRENT] 541,703,300
[APPREC-INCREASE-CURRENT] 307,655,353
[NET-CHANGE-FROM-OPS] 849,358,653
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] 2,532
[DISTRIBUTIONS-OF-GAINS] 58,212
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 1,806,438
[NUMBER-OF-SHARES-REDEEMED] 778,806
[SHARES-REINVESTED] 430,602
[NET-CHANGE-IN-ASSETS] 446,488,191
[ACCUMULATED-NII-PRIOR] 0
[ACCUMULATED-GAINS-PRIOR] 81,727,277
[OVERDISTRIB-NII-PRIOR] 6,493
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 23,133,933
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 47,012,287
[AVERAGE-NET-ASSETS] 36,197,373
[PER-SHARE-NAV-BEGIN] 12.81
[PER-SHARE-NII] 00.09
[PER-SHARE-GAIN-APPREC] 03.13
[PER-SHARE-DIVIDEND] 00.06
[PER-SHARE-DISTRIBUTIONS] 02.09
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 13.88
[EXPENSE-RATIO] 01.72
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
</TABLE>
[ARTICLE] 6
[CIK] 0000089558
[NAME] SMITH BARNEY APPRECIATION FUND INC. CLASS Y
<TABLE>
<S> <C>
[PERIOD-TYPE] YEAR
[FISCAL-YEAR-END] DEC-31-1997
[PERIOD-END] DEC-31-1997
[INVESTMENTS-AT-COST] 2,926,507,966
[INVESTMENTS-AT-VALUE] 4,242,923,442
[RECEIVABLES] 14,941,440
[ASSETS-OTHER] 15,681
[OTHER-ITEMS-ASSETS] 0
[TOTAL-ASSETS] 4,259,880,563
[PAYABLE-FOR-SECURITIES] 14,266,445
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 8,835,378
[TOTAL-LIABILITIES] 23,101,823
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 2,842,435,818
[SHARES-COMMON-STOCK] 4,040,851
[SHARES-COMMON-PRIOR] 5,690,452
[ACCUMULATED-NII-CURRENT] 0
[OVERDISTRIBUTION-NII] 1,964,848
[ACCUMULATED-NET-GAINS] 73,962,598
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 1,316,415,476
[NET-ASSETS] 4,234,778,740
[DIVIDEND-INCOME] 62,311,249
[INTEREST-INCOME] 33,623,647
[OTHER-INCOME] 0
[EXPENSES-NET] 47,394,092
[NET-INVESTMENT-INCOME] 48,540,804
[REALIZED-GAINS-CURRENT] 541,703,300
[APPREC-INCREASE-CURRENT] 307,655,353
[NET-CHANGE-FROM-OPS] 849,358,653
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] 817,365
[DISTRIBUTIONS-OF-GAINS] 5,966,414
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 5,618,610
[NUMBER-OF-SHARES-REDEEMED] 7,268,211
[SHARES-REINVESTED] 0
[NET-CHANGE-IN-ASSETS] 446,488,191
[ACCUMULATED-NII-PRIOR] 0
[ACCUMULATED-GAINS-PRIOR] 81,727,277
[OVERDISTRIB-NII-PRIOR] 6,493
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 23,133,933
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 47,012,287
[AVERAGE-NET-ASSETS] 95,184,457
[PER-SHARE-NAV-BEGIN] 12.86
[PER-SHARE-NII] 00.27
[PER-SHARE-GAIN-APPREC] 03.14
[PER-SHARE-DIVIDEND] 00.25
[PER-SHARE-DISTRIBUTIONS] 02.09
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 13.93
[EXPENSE-RATIO] 00.60
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
</TABLE>
[ARTICLE] 6
[CIK] 0000089558
[NAME] SMITH BARNEY APPRECIATION FUND INC. CLASS Z
<TABLE>
<S> <C>
[PERIOD-TYPE] YEAR
[FISCAL-YEAR-END] DEC-31-1997
[PERIOD-END] DEC-31-1997
[INVESTMENTS-AT-COST] 2,926,507,966
[INVESTMENTS-AT-VALUE] 4,242,923,442
[RECEIVABLES] 14,941,440
[ASSETS-OTHER] 15,681
[OTHER-ITEMS-ASSETS] 0
[TOTAL-ASSETS] 4,259,880,563
[PAYABLE-FOR-SECURITIES] 14,266,445
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 8,835,378
[TOTAL-LIABILITIES] 23,101,823
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 2,842,435,818
[SHARES-COMMON-STOCK] 13,917,395
[SHARES-COMMON-PRIOR] 11,887,327
[ACCUMULATED-NII-CURRENT] 0
[OVERDISTRIBUTION-NII] 1,964,848
[ACCUMULATED-NET-GAINS] 73,962,598
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 1,316,415,476
[NET-ASSETS] 4,234,778,740
[DIVIDEND-INCOME] 62,311,249
[INTEREST-INCOME] 33,623,647
[OTHER-INCOME] 0
[EXPENSES-NET] 47,394,092
[NET-INVESTMENT-INCOME] 48,540,804
[REALIZED-GAINS-CURRENT] 541,703,300
[APPREC-INCREASE-CURRENT] 307,655,353
[NET-CHANGE-FROM-OPS] 849,358,653
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] 3,538,999
[DISTRIBUTIONS-OF-GAINS] 25,006,990
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 903,381
[NUMBER-OF-SHARES-REDEEMED] 905,778
[SHARES-REINVESTED] 2,032,465
[NET-CHANGE-IN-ASSETS] 446,488,191
[ACCUMULATED-NII-PRIOR] 0
[ACCUMULATED-GAINS-PRIOR] 81,727,277
[OVERDISTRIB-NII-PRIOR] 6,493
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 23,133,933
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 47,012,287
[AVERAGE-NET-ASSETS] 178,751,013
[PER-SHARE-NAV-BEGIN] 12.87
[PER-SHARE-NII] 00.24
[PER-SHARE-GAIN-APPREC] 03.18
[PER-SHARE-DIVIDEND] 00.26
[PER-SHARE-DISTRIBUTIONS] 02.09
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 13.94
[EXPENSE-RATIO] 00.60
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
</TABLE>
SMITH BARNEY APPRECIATION FUND INC.
10f-3 REPORT
June 1, 1997 through November 30, 1997
% of
Trade Purch.
Fund % of
Issuer Date Selling Dealer Shares
Price Assets Issue
Polo Ralph Lauren 6/11/97 Goldman Sachs 8,000
$26.00 0.005% 0.38%
ARM Financial 6/18/97 Morgan Stanley 15,000
15.00 0.006 0.48
Galileo International 7/24/97 Morgan Stanley
50,000 24.00 0.030 0.16
Ispat International 8/07/97 DLJ 30,000
27.00 0.020 0.43
First Union Corp. 9/18/97 Morgan Stanley
100,000 48.375 0.12 1.15
American Italian Pasta 10/8/97 Morgan Stanley
41,500 18.000 0.02 0.88
To the Shareholders and Board of Directors of
Smith Barney Appreciation Fund Inc.:
In planning and performing our audit of the financial statements
of Smith Barney Appreciation Fund Inc. (the "Fund") for the year
ended December 31, 1997, 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 Fund 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 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 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 and its operation, including controls for safeguarding
securities that we consider to be material weaknesses as defined
above.
This report is intended solely for the information and use of
management, the Board of Directors of the Fund, and the
Securities and Exchange Commission.
February 10, 1998
