the Princor
Mutual
Funds
November 17, 1997
Mr. Stephan L. Jones
President
Principal Special Markets Fund, Inc.
The Principal Financial Group
Des Moines, IA 50392-0200
Dear Mr. Jones
Principal Mutual Life Insurance Company intends to purchase 3,100,000
shares of Common Stock of Principal Special Markets Fund, Inc. - International
SmallCap Portfolio, par value $.01 per share (the "Shares") at $10.00 per share.
In connection with such purchase, Principal Mutual Life Insurance Company
represents and warrants that it will purchase such Shares as an investment and
not with a view to resale, distribution or redemption.
PRINCIPAL MUTUAL LIFE INSURANCE COMPANY
BY_/s/Michael D. Roughton______________
Michael D. Roughton
Princor Financial Services Corporation, The Principal Financial Group, Des
Moines, Iowa 50392-0200 (800) 247-4123/FAX (515) 248-4745
