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SIGNATURE GORDON H. SILVER
TITLE VICE PRESIDENT
COOPERS & LYBRAND
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees and Shareholders of
Putnam Capital Growth & Income Fund
In planning and performing our audit of the financial
statements and selected per share data and ratios of Putnam Capital
Growth & Income Fund for the period ended May 31, 1994, we
considered its internal control structure, including procedures for
safeguarding securities, in order to determine our auditing
procedures for the purpose of expressing our opinion on the
financial statements and selected per share data and ratios and to
comply with the requirements of Form N-SAR, not to provide
assurance on the internal control structure.
The management of Putnam Capital Growth & Income Fund is
responsible for establishing and maintaining an internal control
structure. In fulfilling this responsibility, estimates and
judgements by management are required to assess the expected
benefits and related costs of internal control structure policies
and procedures. Two of the objectives of an internal control
structure are to provide management with reasonable, but not
absolute, assurance that assets are safeguarded against loss from
unauthorized use or disposition and that transactions are executed
in accordance with management's authorization and recorded properly
to permit preparation of financial statements in conformity with
generally accepted accounting principles.
Because of inherent limitations in any internal control
structure, errors or irregularities may occur and not be detected.
Also, projection of any evaluation of the structure 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 structure
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 operations of the
specific internal control structure elements does not reduce to a
relatively low level the risk that errors or irregularities in
amounts that would be material in relations to the financial
statements and selected per share data and ratios 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 structure,
including procedures for safeguarding securities, that we consider
to be material weaknesses, as defined above, as of May 31, 1994.
This report is intended solely for the information and use of
management of Putnam Capital Growth & Income Fund and the
Securities and Exchange Commission.
/s/ Coopers &Lybrand
COOPERS & LYBRAND
Boston, Massachusetts
July 28, 1994
