UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES

Investment Company Act file number 811-1886

Seligman Capital Fund, Inc.
(Exact name of Registrant as specified in charter)

     100 Park Avenue
New York, New York 10017
(Address of principal executive offices) (Zip code)

     Lawrence P. Vogel
100 Park Avenue
New York, New York 10017
(Name and address of agent for service)

Registrant’s telephone number, including area code: (212) 850-1864

Date of fiscal year end:	12/31
Date of reporting period:	12/31/06

ITEM 1.       REPORTS TO STOCKHOLDERS.

Seligman Capital Fund, Inc.
	Annual Report December 31, 2006
	Seeking Capital Appreciation by Investing in Mid-Capitalization Growth Stocks
	J. & W. SELIGMAN & CO. INCORPORATED ESTABLISHED 1864 100 Park Avenue, New York, NY 10017

	SELIGMAN INVESTMENTS
EXPERIENCE  •  INSIGHT  •  SOLUTIONS

Experience Seligman has been in business for more than 140 years, at times playing a central role in the financial development of the country and its markets. Over that time, the firm has managed clients’ wealth through dramatic market changes and has remained a consistent, reliable presence on Wall Street. Today, Seligman is drawing on its long history and long-term perspective as we focus on the future and on developing investment solutions that help clients arrive at their goals. Insight Asset management is driven by insight — into the direction of the economy, how companies will perform, how markets will behave, and how investors will respond. Portfolio managers at the firm have been in the investment business, on average, for more than 20 years. Over that time, they have refined their ability to assess a company’s prospects, management, and products, while also weighing the impact of economic and market cycles, new trends, and developing technologies. Solutions Seligman’s commitment to the development of innovative investment products — including the nation’s first growth mutual fund, pioneering single-state municipal funds, and one of the country’s premier technology funds — defines our past and informs our future. Our ongoing research into the nature of investment risk —begun in the early 1990s — has resulted in the Seligman Time Horizon Matrix® asset allocation strategy that redefines the relationship between risk and reward over time. The strategy offers investors a variety of investment solutions for goals ranging from college savings to retirement planning. Whether you select Seligman for one investment product, or as a comprehensive asset manager, we believe we can help you reach your goals.	Table of Contents
	To The Shareholders	1
	Interview With Your
	Portfolio Manager	2
	Performance Overview	4
	Portfolio Overview	7
	Understanding and
	Comparing Your
	Fund’s Expenses	9
	Portfolio of Investments	10
	Statement of
	Assets and Liabilities	14
	Statement of
	Operations	15
	Statements of
	Changes in Net Assets	16
	Notes to Financial
	Statements	17
	Financial Highlights	24
	Report of Independent
	Registered Public
	Accounting Firm	28
	Matters Relating to the
	Directors’ Consideration
	of the Continuance of
	the Management
	Agreement	29
	Directors and Officers	33
	Additional Fund
	Information	37

To The Shareholders

Your annual shareholder report for Seligman Capital Fund, Inc. follows this letter. The report contains the Fund’s investment results, portfolio of investments, and financial statements.

For the year ended December 31, 2006, Seligman Capital Fund delivered a total return of 5.45%, based on the net asset value of Class A shares. The Fund’s peers, measured by the Lipper Mid-Cap Funds Average and the Lipper Mid-Cap Growth Funds Average, returned 11.21% and 8.54%, respectively, and the Fund’s benchmark, the Russell Midcap Growth Index, returned 10.66% for the same period.

Recent years have been disappointing with respect to the Fund’s relative investment results and, as a result, we have changed the Fund’s portfolio manager. In October 2006, Erik J. Voss joined Seligman as Portfolio Manager of Seligman Capital Fund and Head of the Seligman Growth Team. Prior to joining Seligman, Mr. Voss was a portfolio manager at Wells Capital Management Incorporated, and prior thereto, Strong Capital Management, Inc.

Thank you for your continued support of Seligman Capital Fund. We look forward to providing you with the investment experience, insight, and solutions you need to help you seek your financial goals for many years to come.

By order of the Board of Directors,

William C. Morris	Brian T. Zino
Chairman	President

February 23, 2007

Manager
J. & W. Seligman & Co.
Incorporated
100 Park Avenue
New York, NY 10017 General Distributor
Seligman Advisors, Inc.
100 Park Avenue
New York, NY 10017 General Counsel
Sullivan & Cromwell LLP Shareholder Service Agent
Seligman Data Corp.
100 Park Avenue
New York, NY 10017 Mail Inquiries To:
P.O. Box 9759
Providence, RI 02940-9759 Independent Registered
Public Accounting Firm
Deloitte & Touche LLP Important Telephone Numbers
(800) 221-2450 Shareholder Services
(800) 445-1777 Retirement Plan Services
(212) 682-7600 Outside the United States
(800) 622-4597 24-Hour Automated Telephone Access Service

1

Interview With Your Portfolio Manager
Erik J. Voss

Q:	How did Seligman Capital Fund perform during the year ended December 31, 2006?
A:	For the year ended December 31, 2006, Seligman Capital Fund delivered a total return of 5.5%, based on the net asset value of Class A shares. The Fund’s peers, measured by the Lipper Mid-Cap Funds Average and the Lipper Mid-Cap Growth Funds Average, returned 11.2% and 8.5%, respectively, and the Fund’s benchmark, the Russell Midcap Growth Index, returned 10.7% for the same period.
Q:	What market conditions and economic events materially affected the Fund’s performance during the year ended December 31, 2006?
A:	Despite some ups and downs, the market has been relatively strong overall. The year began on a strong note with the market delivering solid gains through mid-May and several of the major indices hitting five-year highs. Concerns over slowing economic growth, consumer spending, and the housing market, coupled with inflationary fears and uncertainty over further Fed action, led to a change in investors’ risk tolerance, and we saw a bout of profit taking. Oil prices hit an all-time high in mid-July as Middle East tensions flared over Lebanon’s attack on Israel and Iran’s potential nuclear ambitions, further fueling the summer sell-off.
	August, however, brought a sharp retreat in oil prices as a UN-sanctioned cease-fire between Lebanon and Israel and a slowing US economy relieved some of the upward price pressure. We also saw a decrease in longer-term interest rates as the 10-year US Treasury Bond rate declined considerably over a relatively short period of time. Inflation remained in check, and the Fed’s pause in raising the federal funds rate in August and at the subsequent Federal Open Market Committee meeting in September signaled to investors that it might be finished with its interest rate raising campaign.

	With a favorable backdrop of lower oil prices and longer-term interest rates, we saw a renewal of investor interest, and the market began to trade up from the year’s low. Stocks continued to rally through the end of the fourth quarter, led in particular by growth stocks and technology stocks.
	We continued to see strong corporate profits announcements, though decelerating slightly from previous record levels. The cash reserves so many companies have currently amassed on their balance sheets have dramatically increased corporate leverage throughout the world. The driving force behind the stock market was mergers and acquisitions (M&A) activity. Rather than starting new companies, we are seeing buy-outs of existing companies. M&A activity continued to accelerate with the total value of deals completed in 2006 setting a record annual high at $4 trillion.
Q:	What investment strategies and techniques materially affected the Fund’s performance during the year?
A:	The Fund’s largest weighting during the period was in the Information Technology sector. Relative to other sectors in the benchmark, the Russell Midcap Growth Index, the sector delivered generally weak performance. Sector selection—a relative overweight—as well as stock selection contributed negatively to the Fund’s investment results. Fund holdings Cogent and SanDisk were two of the largest performance detractors for the period. Cogent, a biometric company specializing in fingerprint technology, saw its stock price suffer following several earnings disappointments during the year. SanDisk, which supplies flash-memory storage chips used in consumer electronics,

2

Interview With Your Portfolio Manager
Erik J. Voss

posted negative performance for the period, faced with an inventory glut and acquisition-related charges. Broadcom, a leading supplier of integrated circuits used in broadband communications, was a bright spot among the Fund’s Information Technology holdings, as its performance earned it a top spot in the Fund’s leading performance contributors for the year.

The Industrials sector made the largest overall contribution to Fund performance for the year. The Fund was modestly underweight, relative to the benchmark, though strong stock selection within the sector, notably Herman Miller and Corrections Corp. of America, led to the Fund’s relative outperformance. Herman Miller delivered strong investment results for the year, as orders for its office furnishings were up over 20% for the year. Corrections Corp. of America, a private prison company, saw its stock soar as an intensifying focus on border security, an increasing population, and a lack of new prisons being built has resulted in demand severely outstripping available supply.

A TEAM APPROACH

Seligman Capital Fund, Inc. is managed by Seligman’s Growth Team, led by Erik J. Voss. Mr. Voss is assisted in the management of the Fund by seasoned research professionals who are responsible for identifying those companies in specific industries that offer the greatest potential for growth, consistent with the Fund’s objective. Team members include Christopher Boova, Christopher Kagaoan, Edward Mehalick, Helen Ng, Brian Turner, and Jennifer Haberkorn (trader).

The Fund had sizable weightings in the Health Care and Consumer Discretionary sectors, and while both delivered positively for the Fund on an absolute basis, stock selection within each led to performance lower than that of the benchmark. Specialty retailer Chico’s saw its stock price tumble over 50% in 2006, landing it among the Fund’s top performance detractors.

Energy was the bottom-performing sector in the benchmark, delivering negatively for both the benchmark and the Fund. The Fund’s relative underweight was offset by stock selection, in particular BJ Services, and the Fund underperformed on a relative basis. An oil services provider, BJ Services posted disappointing performance for the year as a result of less-than-expected activity due to a mild 2006 winter as well as declining natural gas prices.

The three top performing areas of the benchmark, Telecomm Services, Materials, and Utilities, accounted for the smallest benchmark weightings. While the Fund only outperformed the benchmark within Utilities, all three sectors made a positive contribution to the Fund’s investment results for the period.

The largest individual contributor to Fund performance came from NBTY in the Consumer Staples sector. The company is engaged in the manufacturing and retailing of nutritional supplements. Strong sales, reduced costs, and improving manufacturing efficiencies drove the stock up over 120% in 2006.

The views and opinions expressed are those of the Portfolio Manager(s), are provided for general information only, and do not constitute specific tax, legal, or investment advice to, or recommendations for, any person. There can be no guarantee as to the accuracy of market forecasts. Opinions, estimates, and forecasts may be changed without notice.

3

Performance Overview

This section of the report is intended to help you understand the performance of Seligman Capital Fund and to provide a summary of the Fund’s portfolio characteristics.

Performance data quoted in this report represents past performance and does not guarantee or indicate future investment results. The rates of return will vary and the principal value of an investment will fluctuate. Shares, if redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. Total returns of the Fund as of the most recent month-end will be available at www.seligman.com¹ by the seventh business day following that month-end. Calculations assume reinvestment of distributions, if any. Performance data quoted does not reflect the deduction of taxes that an investor may pay on distributions or the redemption of shares. The return information presented herein for periods prior to September 26, 2002 does not reflect increased management fees that were in effect beginning on such date. If those increased fees had been reflected, returns would have been lower.

Returns for Class A shares are calculated with and without the effect of the initial 4.75% maximum sales charge. Returns for Class B shares are calculated with and without the effect of the maximum 5% contingent deferred sales charge (“CDSC”), charged on redemptions made within one year of purchase, declining to 1% in the sixth year and 0% thereafter. The ten-year return for Class B shares reflects automatic conversion to Class A shares approximately eight years after their date of purchase. Returns for Class C shares are calculated with and without the effect of the initial 1% maximum sales charge and the 1% CDSC, charged on redemptions made within 18 months of purchase. Returns for Class D and Class R shares are calculated with and without the effect of the 1% CDSC, charged on redemptions made within one year of purchase. Class I shares have no sales charges, and returns are calculated accordingly.

The chart on page 5 compares a $10,000 hypothetical investment made in Class A shares, with and without the initial 4.75% maximum sales charge, Class B shares, without the 5% CDSC and converted to Class A shares, and Class D shares, without the 1% CDSC, with a $10,000 investment made in the Russell Midcap Growth Index, for the ten-year period ended December 31, 2006. The performance of Class C, Class I and Class R shares, which commenced on later dates, and of Class A, Class B and Class D shares for other periods, with and without applicable sales charges and CDSCs, is not shown in this chart but is included in the total returns table. The performance of Class C, Class I and Class R shares will differ from the performance shown for Class A, Class B and Class D shares, based on the differences in sales charges and fees paid by shareholders. The Russell Midcap Growth Index excludes the effect of taxes, fees and sales charges.

An investment in the Fund is not a deposit in a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.

¹  The website reference is an inactive textual reference and information contained in or otherwise accessible through the website does not form a part of this report or the Fund’s prospectuses or statement of additional information.

4

Performance Overview

Investment Results Total Returns For Periods Ended December 31, 2006
							Average Annual
									Class C		Class I		Class R
									Since		Since		Since
	Six		One		Five		Ten		Inception		Inception		Inception
	Months*		Year		Years		Years		5/27/99		11/30/01		4/30/03
Class A
With Sales Charge	1.77	%	0.45	%	1.70	%	8.13	%	n/a		n/a		n/a
Without Sales Charge	6.85		5.45		2.70		8.66		n/a		n/a		n/a
Class B
With CDSC†	1.40		(0.40	)	1.53		n/a		n/a		n/a		n/a
Without CDSC	6.40		4.60		1.91		8.00	‡	n/a		n/a		n/a
Class C
With Sales Charge and CDSC††	4.37		2.62		1.71		n/a		5.45	%	n/a		n/a
Without Sales Charge and CDSC	6.44		4.65		1.92		n/a		5.58		n/a		n/a
Class D
With 1% CDSC	5.44		3.65		n/a		n/a		n/a		n/a		n/a
Without CDSC	6.44		4.65		1.93		7.85		n/a		n/a		n/a
Class I	7.17		5.98		3.21		n/a		n/a		3.60	%	n/a
Class R
With 1% CDSC	5.79		4.28		n/a		n/a		n/a		n/a		n/a
Without CDSC	6.79		5.28		n/a		n/a		n/a		n/a		14.87	%
Benchmarks**
Lipper Mid-Cap Funds Average	7.44		11.21		8.05		8.75		7.48		8.80		17.78
Lipper Mid-Cap Growth
Funds Average	5.46		8.54		5.88		7.52		5.58		6.61		16.26
Russell Midcap Growth Index	7.90		10.66		8.21		8.61		5.51		8.86		19.33

See footnotes on page 6.

5

Performance Overview

Net Asset Value Per Share

	Class A	Class B	Class C	Class D	Class I	Class R
12/31/06	$22.47	$18.63	$18.68	$18.67	$23.03	$22.34
6/30/06	21.02	17.51	17.54	17.54	21.49	20.91
12/31/05	21.30	17.81	17.84	17.84	21.73	21.21

*	Returns for periods of less than one year are not annualized.
**	The Lipper Mid-Cap Funds Average is an average of funds that, by prospectus or portfolio practice, invest primarily in companies with market capitalizations less than $5 billion at the time of purchase. The Lipper Mid-Cap Growth Funds Average is an average of funds that, by portfolio practice, invest at least 75% of their equity assets in companies with market capitalizations (on a three-year weighted basis) less than 300% of the dollar-weighted median market capitalization of the middle 1,000 securities of the S&P SuperComposite 1500 Index ($15.7 billion as of December 31, 2006). Mid-cap growth funds typically have an above-average price-to-earnings ratio, price-to-book ratio, and three-year sales-per-share growth value, compared to the S&P MidCap 400 Index. Lipper currently classifies the Fund as a mid-cap growth fund. The Russell Midcap Growth Index (Russell Index) measures the performance of those Russell Midcap companies with higher price-to-book ra tios and higher forecasted growth values, as determined by the Frank Russell Company. The stocks are also members of the Russell 1000 Growth Index. The Lipper Averages and the Russell Index are unmanaged benchmarks that assume the reinvestment of all distributions. The Lipper Averages exclude the effect of sales charges and taxes, and the Russell Index excludes the effect of fees, sales charges and taxes. Investors cannot invest directly in an average or index.
†	The CDSC is 5% if you sell your shares within one year of purchase and 2% for the five-year period.
††	The CDSC is 1% if you sell your shares within 18 months of purchase.
‡	Ten-year return for Class B shares reflects automatic conversion to Class A shares approximately eight years after their date of purchase.

6

Portfolio Overview

Diversification of Net Assets December 31, 2006
				Percent of Net Assets
				December 31,
	Issues	Cost	Value	2006	2005
Common Stocks:
Aerospace and Defense	2	$  10,537,611	$  13,030,765	2.9	1.4
Air Freight and Logistics	—	—	—	—	0.4
Airlines	1	6,068,289	5,779,400	1.3	1.0
Auto Components	—	—	—	—	2.3
Biotechnology	2	9,135,206	9,165,975	2.0	4.3
Capital Markets	3	20,961,656	21,625,746	4.8	3.1
Chemicals	—	—	—	—	1.7
Commercial Banks	—	—	—	—	0.8
Commercial Services and Supplies	1	6,675,060	8,308,260	1.8	5.3
Communications Equipment	2	13,059,273	14,391,160	3.2	0.6
Computers and Peripherals	1	3,847,692	3,360,643	0.7	3.4
Construction and Engineering	—	—	—	—	3.1
Containers and Packaging	1	3,847,664	5,539,088	1.2	1.3
Diversified Financial Services	—	—	—	—	1.5
Electrical Equipment	2	8,740,087	8,957,928	2.0	0.5
Electronic Equipment and Instruments	—	—	—	—	1.0
Energy Equipment and Services	4	25,078,829	24,900,714	5.5	2.7
Food and Staples Retailing	2	13,896,072	15,486,728	3.4	—
Food Products	1	6,199,966	7,026,936	1.6	3.3
Gas Utilities	—	—	—	—	0.3
Health Care Equipment and Supplies	5	24,205,681	25,072,655	5.5	3.9
Health Care Providers and Services	5	32,321,067	34,345,353	7.6	5.4
Hotels, Restaurants and Leisure	4	27,043,331	31,948,668	7.1	5.7
Household Durables	1	4,566,833	4,416,022	1.0	—
Independent Power Producers and
Energy Traders	1	3,798,270	4,903,900	1.1	0.6
Insurance	—	—	—	—	2.3
Internet and Catalog Retail	—	—	—	—	0.7
Internet Software and Services	2	12,688,167	13,230,980	2.9	0.9
IT Services	3	19,251,887	20,380,658	4.5	5.1
Life Sciences Tools and Services	3	14,662,594	14,562,452	3.2	—
Machinery	2	10,396,775	10,694,982	2.4	0.5
Media	2	11,142,156	12,577,246	2.8	0.5
Metals and Mining	1	4,689,270	4,475,119	1.0	1.0
Multiline Retail	—	—	—	—	1.5
Oil, Gas and Consumable Fuels	1	4,164,781	6,207,355	1.4	5.4
Personal Products	—	—	—	—	2.7
Pharmaceuticals	2	12,205,828	12,673,390	2.8	4.6
Road and Rail	1	8,010,180	7,912,014	1.7	—
Semiconductors and Semiconductor
Equipment	5	22,167,312	24,327,796	5.4	4.7
Software	5	19,521,683	18,791,187	4.1	4.8
Specialty Retail	4	24,896,706	28,701,837	6.3	7.8
Textiles, Apparel and Luxury Goods	2	10,905,647	12,073,900	2.7	0.4
Wireless Telecommunication Services	2	14,320,080	15,843,416	3.5	1.3
	73	409,005,653	440,712,273	97.4	97.8
Short-Term Holdings and
Other Assets Less Liabilities	2	11,849,881	11,849,881	2.6	2.2
Net Assets	75	$420,855,534	$452,562,154	100.0	100.0

7

Portfolio Overview

Largest IndustriesDecember 31, 2006

Largest Portfolio Holdings^† December 31, 2006

Security	Value	Percent of Net Assets
Hilton Hotels	$12,183,590	2.7
OfficeMax	12,005,370	2.7
Health Net	11,045,820	2.4
Research In Motion	9,928,506	2.2
Amdocs	9,920,000	2.2
Urban Outfitters	9,914,415	2.2
Gen-Probe	9,798,427	2.2
SAVVIS	9,659,555	2.1
Precision Castparts	9,432,740	2.1
Allergan	9,387,616	2.1

There can be no assurance that the securities presented have remained or will remain in the Fund’s portfolio. Information regarding the Fund’s portfolio holdings should not be construed as a recommendation to buy or sell any security or as an indication that any security is suitable for a particular investor.

† Excludes short-term holdings.

Largest Portfolio Changes During Past Six Months

Largest Purchases	Largest Sales
OfficeMax*	NBTY**
Hilton Hotels*	Corrections Corporation of America**
Gen-Probe*	Cintas**
SAVVIS*	Limited Brands**
Ensco International*	T. Rowe Price Group**
Urban Outfitters*	International Flavors & Fragrances**
Coventry Health Care*	Family Dollar Stores**
E*TRADE Financial	Smith International**
NII Holdings	Fiserv**
Rite Aid*	Cogent**

Largest portfolio changes from the previous period to the current period are based on cost of purchases and proceeds from sales of securities, listed in descending order.

  * Position added during the period.
** Position eliminated during the period.

8

Understanding and Comparing
Your Fund’s Expenses

As a shareholder of the Fund, you incur ongoing expenses, such as management fees, distribution and/or service (12b-1) fees (if applicable), and other Fund expenses. The information below is intended to help you understand your ongoing expenses (in dollars) of investing in the Fund and to compare them with the ongoing expenses of investing in other mutual funds. Please note that the expenses shown in the table are meant to highlight your ongoing expenses only and do not reflect any transactional costs, such as sales charges (also known as loads) on certain purchases or redemptions. Therefore, the table is useful in comparing ongoing expenses only, and will not help you to determine the relative total expenses of owning different funds. In addition, if transactional costs were included, your total expenses would have been higher.

The table is based on an investment of $1,000 invested at the beginning of July 1, 2006 and held for the entire six-month period ended December 31, 2006.

Actual Expenses

The table below provides information about actual expenses and actual account values. You may use the information, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value at the beginning of the period by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number under the heading entitled “Expenses Paid During Period” for the Fund’s share class that you own to estimate the expenses that you paid on your account during the period.

Hypothetical Example for Comparison Purposes

The table below also provides information about hypothetical expenses and hypothetical account values based on the actual expense ratio of each class and an assumed rate of return of 5% per year before expenses, which is not the actual return of any class of the Fund. The hypothetical expenses and account values may not be used to estimate the ending account value or the actual expenses you paid for the period. You may use this information to compare the ongoing expenses of investing in the Fund and other mutual funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other mutual funds.

				Actual		Hypothetical
	Beginning			Ending		Ending
	Account	Annualized		Account	Expenses Paid	Account	Expenses Paid
	Value	Expense		Value	During Period**	Value	During Period**
	7/1/06	Ratio*		12/31/06	7/1/06 to 12/31/06	12/31/06	7/1/06 to 12/31/06
Class A	$1,000.00	1.53	%	$1,068.50	$  7.98	$1,017.49	$  7.78
Class B	1,000.00	2.28		1,064.00	11.86	1,013.71	11.57
Class C	1,000.00	2.28		1,064.40	11.86	1,013.71	11.57
Class D	1,000.00	2.28		1,064.40	11.86	1,013.71	11.57
Class I	1,000.00	1.02		1,071.70	5.33	1,020.06	5.19
Class R	1,000.00	1.78		1,067.90	9.28	1,016.23	9.05

*	Expenses of Class B, Class C, Class D, Class I and Class R shares differ from the expenses of Class A shares due to the differences in 12b-1 fees and other class-specific expenses paid by each share class. See the Fund’s prospectuses for a description of each share class and its fees, expenses and sales charges.
**	Expenses are equal to the annualized expense ratio based on actual expenses for the period July 1, 2006 to December 31, 2006, multiplied by the average account value over the period, multiplied by 184/365 (number of days in the period).

9

Portfolio of Investments
December 31, 2006

	Shares	Value
Common Stocks 97.4%
Aerospace and Defense 2.9%
Precision Castparts	120,500	$    9,432,740
Spirit Aerosystems Holdings (Class A)*	107,500	3,598,025
		13,030,765
Airlines 1.3%
JetBlue Airways*	407,000	5,779,400
Biotechnology 2.0%
Cepheid*	269,100	2,287,350
MedImmune*	212,500	6,878,625
		9,165,975
Capital Markets 4.8%
Bear Stearns	28,000	4,557,840
E*TRADE Financial*	411,000	9,214,620
Northern Trust	129,400	7,853,286
		21,625,746
Commercial Services and Supplies 1.8%
Herman Miller	228,500	8,308,260
Communications Equipment 3.2%
Comverse Technology*	211,400	4,462,654
Research In Motion*	77,700	9,928,506
		14,391,160
Computers and Peripherals 0.7%
SanDisk*	78,100	3,360,643
Containers and Packaging 1.2%
Pactiv*	155,200	5,539,088
Electrical Equipment 2.0%
First Solar	116,400	3,468,720
Thomas & Betts*	116,100	5,489,208
		8,957,928
Energy Equipment and Services 5.5%
BJ Services	221,200	6,485,584
Ensco International	170,100	8,515,206
Grant Prideco*	129,400	5,146,238
National Oilwell Varco*	77,700	4,753,686
		24,900,714

See footnotes on page 13.

10

Portfolio of Investments
December 31, 2006

	Shares	Value
Food and Staples Retailing 3.4%
Rite Aid*	1,506,200	$ 8,193,728
SUPERVALU	204,000	7,293,000
		15,486,728
Food Products 1.6%
Dean Foods*	166,200	7,026,936
Health Care Equipment and Supplies 5.5%
DENTSPLY International	212,000	6,328,200
Gen-Probe*	187,100	9,798,427
Hologic*	50,700	2,397,096
Northstar Neuroscience*	136,600	1,964,308
St. Jude Medical*	125,400	4,584,624
		25,072,655
Health Care Providers and Services 7.6%
Coventry Health Care*	148,100	7,412,405
DaVita*	87,200	4,959,936
Health Net*	227,000	11,045,820
Psychiatric Solutions*	177,100	6,644,792
Quest Diagnostics	80,800	4,282,400
		34,345,353
Hotels, Restaurants and Leisure 7.1%
Hilton Hotels	349,100	12,183,590
International Game Technology	167,000	7,715,400
Sonic*	207,450	4,968,428
Starwood Hotels & Resorts Worldwide	113,300	7,081,250
		31,948,668
Household Durables 1.0%
Harman International Industries	44,200	4,416,022
Independent Power Producers and Energy Traders 1.1%
AES*	222,500	4,903,900
Internet Software and Services 2.9%
SAVVIS*	270,500	9,659,555
VeriSign*	148,500	3,571,425
		13,230,980
IT Services 4.5%
Amdocs*	256,000	9,920,000
Cognizant Technology Solutions (Class A)*	89,400	6,898,104
Paychex	90,100	3,562,554
		20,380,658

See footnotes on page 13.

11

Portfolio of Investments
December 31, 2006

	Shares	Value
Life Sciences Tools and Services 3.2%
Nektar Therapeutics*	177,600	$   2,701,296
Pharmaceutical Product Development	146,600	4,723,452
Thermo Fisher Scientific*	157,600	7,137,704
		14,562,452
Machinery 2.4%
AGCO*	109,500	3,387,930
ITT	128,600	7,307,052
		10,694,982
Media 2.8%
Liberty Global (Class A)*	310,200	9,042,330
Univision Communications (Class A)*	99,800	3,534,916
		12,577,246
Metals and Mining 1.0%
Freeport-McMoRan Copper & Gold (Class B)	80,300	4,475,119
Oil, Gas and Consumable Fuels 1.4%
Noble Energy	126,500	6,207,355
Pharmaceuticals 2.8%
Allergan	78,400	9,387,616
Penwest Pharmaceuticals*	197,700	3,285,774
		12,673,390
Road and Rail 1.7%
CSX	229,800	7,912,014
Semiconductors and Semiconductor Equipment 5.4%
Integrated Device Technology*	173,000	2,678,040
Intersil (Class A)*	135,100	3,231,592
KLA-Tencor	144,300	7,178,925
NVIDIA*	207,500	7,679,575
Varian Semiconductor Equipment Associates*	78,200	3,559,664
		24,327,796
Software 4.1%
BEA Systems*	319,500	4,019,310
Business Objects (ADR)*	92,300	3,641,235
Citrix Systems*	205,200	5,550,660
Electronic Arts*	43,200	2,175,552
salesforce.com*	93,400	3,404,430
		18,791,187

See footnotes on page 13.

12

Portfolio of Investments
December 31, 2006

	Shares or
	Principal
	Amount		Value
Specialty Retail 6.3%
Advance Auto Parts*	62,400	shs.	$   2,218,944
GameStop (Class A)*	82,800		4,563,108
OfficeMax	241,800		12,005,370
Urban Outfitters*	430,500		9,914,415
			28,701,837
Textiles, Apparel and Luxury Goods 2.7%
Coach*	117,300		5,039,208
Iconix Brand Group*	362,800		7,034,692
			12,073,900
Wireless Telecommunication Services 3.5%
American Tower (Class A)*	186,100		6,937,808
NII Holdings*	138,200		8,905,608
			15,843,416
Total Common Stocks (Cost $409,005,653)			440,712,273
Short-Term Holdings 3.9%
Fixed Time Deposit 3.1%
BNP Paribas, Grand Cayman, 5.15%, 1/3/2007	$14,000,000		14,000,000
Repurchase Agreement 0.8%
State Street Bank 4.35%,
dated 12/29/2006, maturing 1/2/2007, in the
amount of $3,777,825, collateralized by:
$3,840,000 US Treasury Notes 4.5%,
2/15/2016, with a fair market value of $3,854,400	3,776,000		3,776,000
Total Short-Term Holdings (Cost $17,776,000)			17,776,000
Total Investments (Cost $426,781,653) 101.3%			458,488,273
Other Assets Less Liabilities (1.3)%			(5,926,119	)
Net Assets 100.0%			$452,562,154

* Non-income producing security.
ADR—American Depositary Receipts.
See Notes to Financial Satements.

13

Statement of Assets and Liabilities
December 31, 2006

Assets:
Investments, at value:
Common stocks (cost $409,005,653)	$440,712,273
Short-term holdings (cost $17,776,000)	17,776,000
Total investments (cost $426,781,653)	458,488,273
Cash (includes restricted cash of $13,686)	14,289
Receivable for Capital Stock sold	495,134
Receivable for dividends and interest	200,816
Receivable for securities sold	100,978
Investment in, and expenses prepaid to, shareholder service agent	43,151
Other	24,422
Total Assets	459,367,063
Liabilities:
Payable for securities purchased	3,508,211
Payable for Capital Stock repurchased	2,672,890
Management fees payable	332,864
Distribution and service (12b-1) fees payable	173,291
Accrued expenses and other	117,653
Total Liabilities	6,804,909
Net Assets	$452,562,154
Composition of Net Assets:
Capital Stock, at par ($1 par value; 500,000,000 shares authorized;
21,240,209 shares outstanding):
Class A	$   13,564,876
Class B	2,267,661
Class C	2,093,702
Class D	2,241,406
Class I	937,534
Class R	135,030
Additional paid-in capital	546,604,932
Accumulated net realized loss	(146,989,607	)
Net unrealized appreciation of investments	31,706,620
Net Assets	$452,562,154
Net Asset Value Per Share:
Class A ($304,734,948 ÷ 13,564,876 shares)	$22.47
Class B ($42,257,858 ÷ 2,267,661 shares)	$18.63
Class C ($39,099,887 ÷ 2,093,702 shares)	$18.68
Class D ($41,858,256 ÷ 2,241,406 shares)	$18.67
Class I ($21,595,299 ÷ 937,534 shares)	$23.03
Class R ($3,015,906 ÷ 135,030 shares)	$22.34

See Notes to Financial Statements.

14

Statement of Operations
For the Year Ended December 31, 2006

Investment Income:
Dividends	$     2,908,303
Interest	732,224
Total Investment Income	3,640,527
Expenses:
Management fee	4,175,270
Distribution and service (12b-1) fees	2,225,532
Shareholder account services	1,521,867
Custody and related services	144,417
Registration	111,735
Shareholder reports and communications	75,843
Auditing and legal fees	56,356
Directors’ fees and expenses	17,080
Miscellaneous	49,457
Total Expenses	8,377,557
Net Investment Loss	(4,737,030	)
Net Realized and Unrealized Gain (Loss) on Investments:
Net realized gain on investments	46,793,370
Net change in unrealized appreciation of investments	(18,401,087	)
Net Gain on Investments	28,392,283
Increase in Net Assets from Operations	$23,655,253

See Notes to Financial Statements.

15

Statements of Changes in Net Assets

	Year Ended December 31,
	2006		2005
Operations:
Net investment loss	$    (4,737,030	)	$    (6,341,804	)
Net realized gain on investments	46,793,370		75,069,955
Net change in unrealized appreciation of investments	(18,401,087	)	(12,306,787	)
Increase in Net Assets from Operations	23,655,253		56,421,364
Capital Share Transactions:
Net proceeds from sales of shares	35,593,429		43,021,577
Exchanged from associated funds	4,820,015		10,303,044
Total	40,413,444		53,324,621
Cost of shares repurchased	(122,700,072	)	(157,856,334	)
Exchanged into associated funds	(11,694,073	)	(9,654,080	)
Total	(134,394,145	)	(167,510,414	)
Decrease in Net Assets from Capital Share Transactions	(93,980,701	)	(114,185,793	)
Decrease in Net Assets	(70,325,448	)	(57,764,429	)
Net Assets:
Beginning of year	522,887,602		580,652,031
End of Year (net of accumulated net investment loss
of $25,312 for 2005)	$452,562,154		$522,887,602
See Notes to Financial Statements.

16

Notes to Financial Statements

1.	Multiple Classes of Shares — Seligman Capital Fund, Inc. (the “Fund”) offers the following six classes of shares:
	Class A shares are sold with an initial sales charge of up to 4.75% and a continuing service fee of up to 0.25% on an annual basis. Class A shares purchased in an amount of $1,000,000 or more are sold without an initial sales charge but are subject to a contingent deferred sales charge (“CDSC”) of 1% on redemptions within 18 months of purchase. Eligible employee benefit plans that have at least $500,000 invested in the Seligman Group of mutual funds or 50 eligible employees may purchase Class A shares at net asset value, but, in the event of a plan termination, will be subject to a CDSC of 1% on redemptions of shares purchased within 18 months prior to plan termination.
	Class B shares are sold without an initial sales charge but are subject to a distribution fee of 0.75% and a service fee of up to 0.25% on an annual basis, and a CDSC, if applicable, of 5% on redemptions in the first year of purchase, declining to 1% in the sixth year and 0% thereafter. Class B shares will automatically convert to Class A shares approximately eight years after their date of purchase. If Class B shares of the Fund are exchanged for Class B shares of another Seligman mutual fund, the holding period of the shares exchanged will be added to the holding period of the shares acquired, both for determining the applicable CDSC and the conversion of Class B shares to Class A shares.
	Class C shares are sold primarily with an initial sales charge of up to 1%, and a CDSC, if applicable, of 1% imposed on redemptions made within 18 months of purchase. Class C shares purchased through certain financial intermediaries may be bought without an initial sales charge and with a 1% CDSC on redemptions made within 12 months of purchase. All Class C shares are subject to a distribution fee of up to 0.75% and a service fee of up to 0.25% on an annual basis.
	Class D shares are sold without an initial sales charge but are subject to a distribution fee of up to 0.75% and a service fee of up to 0.25% on an annual basis, and a CDSC, if applicable, of 1% imposed on redemptions made within one year of purchase.
	Class I shares are offered to certain institutional clients and other investors, as described in the Fund’s Class I shares prospectus. Class I shares are sold without any sales charges and are not subject to distribution or service fees.
	Class R shares are offered to certain employee benefit plans and are not available to all investors. They are sold without an initial sales charge, but are subject to a distribution fee of up to 0.25% and a service fee of up to 0.25% on an annual basis, and a CDSC, if applicable, of 1% on redemption made within one year of a plan’s initial purchase of Class R shares.
	All classes of shares represent interests in the same portfolio of investments, have the same rights and are generally identical in all respects except that each class bears its own class-specific expenses, and has exclusive voting rights with respect to any matter on which a separate vote of any class is required.
2.	Significant Accounting Policies — The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America which require management to make certain estimates and assumptions at the date of the financial statements. Actual results may differ from these estimates. The following summarizes the significant accounting policies of the Fund:
	a.	Security Valuation — Securities traded on an exchange are valued at the last sales price on the primary exchange or market on which they are traded. Securities not listed on an exchange or security market, or securities for which there is no last sales price, are valued at the mean of the most recent bid and asked prices or are valued by J. & W. Seligman & Co. Incorporated (the “Manager”) based on quotations provided by primary market makers in such securities. Securities for which market quotations are not readily available (or are otherwise no longer valid or reliable) are valued at fair value determined in accordance with procedures approved by the Fund’s Board of Directors. This can occur in the event of,

17

Notes to Financial Statements

	among other things, natural disasters, acts of terrorism, market disruptions, intra-day trading halts, and extreme market volatility. The determination of a fair value involves subjective judgments. As a result, using fair value to price a security may result in a price materially different from the prices used by other mutual funds to determine net asset value or the price that may be realized upon the actual sale of the security. Short-term holdings that mature in more than 60 days are valued at current market quotations. Short-term holdings maturing in 60 days or less are valued at amortized cost.
	b.	Federal Taxes — There is no provision for federal income tax. The Fund has elected to be taxed as a regulated investment company and intends to distribute substantially all taxable net income and net gain realized.
	c.	Security Transactions and Related Investment Income — Investment transactions are recorded on trade dates. Identified cost of investments sold is used for both financial reporting and federal income tax purposes. Dividends receivable and payable are recorded on ex-dividend dates. Interest income is recorded on an accrual basis.
	d.	Repurchase Agreements — The Fund may enter into repurchase agreements. Generally, securities received as collateral subject to repurchase agreements are deposited with the Fund’s custodian and, pursuant to the terms of the repurchase agreement, must have an aggregate market value greater than or equal to the repurchase price, plus accrued interest, at all times. On a daily basis, the market value of securities held as collateral for repurchase agreements is monitored to ensure the existence of the proper level of collateral.
	e.	Multiple Class Allocations — All income, expenses (other than class-specific expenses), and realized and unrealized gains or losses are allocated daily to each class of shares based upon the relative value of shares of each class. Class-specific expenses, which include distribution and service fees and any other items that are specifically attributable to a particular class, are charged directly to such class. For the year ended December 31, 2006, distribution and service fees, shareholder account services and registration expenses were class-specific expenses.
	f.	Distributions to Shareholders — Dividends and other distributions to shareholders are recorded on ex-dividend dates.
	g.	Restricted Cash — Restricted cash represents deposits that are being held by banks as collateral for letters of credit issued in connection with the Fund’s insurance policies.
3.	Management Fee, Distribution Services, and Other Transactions — The Manager manages the affairs of the Fund and provides the necessary personnel and facilities. Compensation of all officers of the Fund, all directors of the Fund who are employees of the Manager, and all personnel of the Fund and the Manager is paid by the Manager. The Manager receives a fee, calculated daily and payable monthly, equal to 0.85% per annum of the first $1 billion of the Fund’s average daily net assets, 0.80% per annum of the next $1 billion of the Fund’s average daily net assets, and 0.75% per annum of the Fund’s average daily net assets in excess of $2 billion. The management fee reflected in the Statement of Operations represents 0.85% per annum of the Fund’s average daily net assets.
	For the year ended December 31, 2006, Seligman Advisors, Inc. (the “Distributor”), agent for the distribution of the Fund’s shares and an affiliate of the Manager, received commissions and concessions of $12,471 from sales of Class A and Class C shares. Commissions of $59,811 and $7,749 were paid to dealers for sales of Class A and Class C shares, respectively.
	The Fund has an Administration, Shareholder Services and Distribution Plan (the “Plan”) with respect to distribution of its shares. Under the Plan, with respect to Class A shares, service organizations can enter into agreements with the Distributor and receive a continuing fee of up to 0.25% on an annual basis, payable monthly, of the average daily net assets of the Class A shares attributable to the particular service

18

Notes to Financial Statements

organizations for providing personal services and/or the maintenance of shareholder accounts. The Distributor charges such fees to the Fund pursuant to the Plan. For the year ended December 31, 2006, fees incurred under the Plan aggregated $819,731 or 0.25% per annum of the average daily net assets of Class A shares.

Under the Plan, with respect to Class B shares, Class C shares, Class D shares and Class R shares, service organizations can enter into agreements with the Distributor and receive a continuing fee for providing personal services and/or the maintenance of shareholder accounts of up to 0.25% on an annual basis of the average daily net assets of the Class B, Class C, Class D and Class R shares for which the organizations are responsible; and, for Class C, Class D and Class R shares, fees for providing other distribution assistance of up to 0.75% (0.25%, in the case of Class R shares) on an annual basis of such average daily net assets. Such fees are paid monthly by the Fund to the Distributor pursuant to the Plan.

For the year ended December 31, 2006, fees incurred under the Plan, equivalent to 1% per annum of the average daily net assets of Class B, Class C, and Class D shares, and 0.50% per annum of the average daily net assets of Class R shares, amounted to $515,699, $450,162, $427,330 and $12,610, respectively.

The Distributor and Seligman Services, Inc., also an affiliate of the Manager, are eligible to receive distribution and service fees pursuant to the Plan. For the year ended December 31, 2006, the Distributor and Seligman Services, Inc. received distribution and service fees of $73,358.

The Distributor is entitled to retain any CDSC imposed on certain redemptions of Class A, Class C, Class D, and Class R shares. For the year ended December 31, 2006, such charges amounted to $19,967. The Distributor has sold to third parties its rights to collect any CDSC imposed on redemptions of Class B shares.

For the year ended December 31, 2006, Seligman Data Corp., which is owned by the Fund and certain associated investment companies, charged the Fund at cost $1,521,867 for shareholder account services in accordance with a methodology approved by the Fund’s directors. Class I shares receive more limited shareholder services than the Fund’s other classes of shares (the “Retail Classes”). Seligman Data Corp. does not allocate to Class I the costs of any of its departments that do not provide services to the Class I shareholders.

Costs of Seligman Data Corp. directly attributable to the Retail Classes of the Fund were charged to those classes in proportion to their respective net asset values. Costs directly attributable to Class I shares were charged to Class I. The remaining charges were allocated to the Retail Classes and Class I by Seligman Data Corp. pursuant to a formula based on their net assets, shareholder transaction volumes and number of shareholder accounts.

The Fund and certain other associated investment companies (together, the “Guarantors”) have severally but not jointly guaranteed the performance and observance of all the terms and conditions of two leases entered into by Seligman Data Corp., including the payment of rent by Seligman Data Corp. (the “Guaranties”). The leases and the related Guaranties expire in September 2008 and January 2009. The obligation of the Fund to pay any amount due under the Guaranties is limited to a specified percentage of the full amount, which generally is based on the Fund’s percentage of the expenses billed by Seligman Data Corp. to all Guarantors in the most recent calendar quarter. As of December 31, 2006, the Fund’s potential obligation under the Guaranties is $107,800. As of December 31, 2006, no event has occurred which would result in the Fund becoming liable to make any payment under the Guaranties. A portion of the rent paid by Seligman Data Corp. is charged to the Fund as part of Seligman Data Corp.’s shareholder account services cost.

The Fund’s investment in Seligman Data Corp. is recorded at a cost of $2,199.

Certain officers and directors of the Fund are officers or directors of the Manager, the Distributor, Seligman Services, Inc., and/or Seligman Data Corp.

19

Notes to Financial Statements

	The Fund has a compensation arrangement under which directors who receive fees may elect to defer receiving such fees. Directors may elect to have their deferred fees accrue interest or earn a return based on the performance of the Fund or other funds in the Seligman Group of Investment Companies. Deferred fees and related accrued earnings are not deductible by the Fund for federal income tax purposes until such amounts are paid. The accumulated balance at December 31, 2005, of $25,312 was paid to the participating director in January 2006. As of December 31, 2006, no directors were participating in the deferred compensation arrangement.
4.	Committed Line of Credit — The Fund is a participant in a joint $400 million committed line of credit that is shared by substantially all funds in the Seligman Group of Investment Companies. The directors have currently limited the Fund’s borrowings to 10% of its net assets. Borrowings pursuant to the credit facility are subject to interest at a rate equal to the overnight federal funds rate plus 0.50%. The Fund incurs a commitment fee of 0.10% per annum on its share of the unused portion of the credit facility. The credit facility may be drawn upon only for temporary purposes and is subject to certain other customary restrictions. The credit facility commitment expires in June 2007, but is renewable annually with the consent of the participating banks. For the year ended December 31, 2006, the Fund did not borrow from the credit facility.
5.	Purchases and Sales of Securities — Purchases and sales of portfolio securities, excluding US Government obligations and short-term investments, for the year ended December 31, 2006, amounted to $974,735,927 and $1,072,897,460, respectively.
6.	Federal Tax Information — Certain components of income, expense and realized capital gain and loss are recognized at different times or have a different character for federal income tax purposes and for financial reporting purposes. Where such differences are permanent in nature, they are reclassified in the components of net assets based on their characterization for federal income tax purposes. Any such reclassifications will have no effect on net assets, results of operations or net asset value per share of the Fund. As a result of the differences described above, the treatment for financial reporting purposes of distributions made during the year from net investment income or net realized gains may differ from their treatment for federal income tax purposes. Further, the cost of investments also can differ for federal income tax purposes.
	At December 31, 2006, the cost of investments for federal income tax purposes was $427,038,651. The tax basis cost was greater than the cost for financial reporting primarily due to the tax deferral of losses on wash sales in the amount of $256,998.
	At December 31, 2006, the tax components of accumulated earnings (losses) were as follows:

Gross unrealized appreciation of portfolio securities	$     38,558,808
Gross unrealized depreciation of portfolio securities	(7,109,186	)
Net unrealized appreciation of portfolio securities	31,449,622
Capital loss carryforward	(146,732,609	)
Total accumulated losses	$(115,282,987	)

At December 31, 2006, the Fund had a capital loss carryforward for federal income tax purposes of $146,732,609, all of which expires in 2010 and is available for offset against future taxable net capital gains. The amount was determined after adjustments for certain differences between financial reporting and tax purposes, such as deferral of losses on wash sales. Accordingly, no capital gain distributions are expected to be paid to shareholders until net capital gains have been realized in excess of the available capital loss carryforward. During the year 2006, the Fund utilized $45,616,210 of prior years’ capital loss carryforwards to offset current year’s net capital gains.

20

Notes to Financial Statements

7. Capital Share Transactions — The Fund has authorized 500,000,000 shares of $1 par value Capital Stock. Transactions in shares of Capital Stock were as follows:

				Year Ended December 31,
	2006					2005
Class A	Shares			Amount		Shares			Amount
Net proceeds from sales of shares	874,363		$	19,000,285		1,425,277		$	28,006,939
Exchanged from associated funds	117,016			2,555,719		289,838			5,686,717
Converted from Class B*	177,688			3,857,657		224,215			4,458,378
Total	1,169,067			25,413,661		1,939,330			38,152,034
Cost of shares repurchased	(3,604,795	)		(77,719,884	)	(5,444,830	)	(107,151,333		)
Exchanged into associated funds	(275,720	)		(5,956,555	)	(232,965	)		(4,589,616	)
Total	(3,880,515	)		(83,676,439	)	(5,677,795	)	(111,740,949		)
Decrease	(2,711,448	)	$	(58,262,778	)	(3,738,465	)	$	(73,588,915	)
Class B	Shares			Amount		Shares			Amount
Net proceeds from sales of shares	68,982		$	1,251,556		116,389		$	1,912,654
Exchanged from associated funds	53,465			980,967		72,095			1,206,483
Total	122,447			2,232,523		188,484			3,119,137
Cost of shares repurchased	(886,508	)		(15,973,943	)	(1,011,567	)		(16,682,685	)
Exchanged into associated funds	(140,502	)		(2,516,193	)	(186,559	)		(3,040,898	)
Converted to Class A*	(213,260	)		(3,857,657	)	(267,177	)		(4,458,378	)
Total	(1,240,270	)		(22,347,793	)	(1,465,303	)		(24,181,961	)
Decrease	(1,117,823	)	$	(20,115,270	)	(1,276,819	)	$	(21,062,824	)
Class C	Shares			Amount		Shares			Amount
Net proceeds from sales of shares	85,225		$	1,557,427		101,619		$	1,679,367
Exchanged from associated funds	36,641			680,783		39,752			671,625
Total	121,866			2,238,210		141,371			2,350,992
Cost of shares repurchased	(751,300	)		(13,641,499	)	(1,081,580	)		(17,903,840	)
Exchanged into associated funds	(80,366	)		(1,438,528	)	(40,302	)		(662,677	)
Total	(831,666	)		(15,080,027	)	(1,121,882	)		(18,566,517	)
Decrease	(709,800	)	$	(12,841,817	)	(980,511	)	$	(16,215,525	)
Class D	Shares			Amount		Shares			Amount
Net proceeds from sales of shares	479,927		$	8,697,029		476,842		$	7,927,824
Exchanged from associated funds	32,785			598,829		165,609			2,738,177
Total	512,712			9,295,858		642,451			10,666,001
Cost of shares repurchased	(653,620	)		(11,874,458	)	(774,028	)		(12,891,688	)
Exchanged into associated funds	(96,875	)		(1,772,818	)	(84,603	)		(1,359,073	)
Total	(750,495	)		(13,647,276	)	(858,631	)		(14,250,761	)
Decrease	(237,783	)	$	(4,351,418	)	(216,180	)	$	(3,584,760	)

*Automatic conversion of Class B shares to Class A shares approximately eight years after the initial purchase date.

21

Notes to Financial Statements

	Year Ended December 31,
	2006					2005
Class I	Shares		Amount			Shares		Amount
Net proceeds from sales of shares	159,716		$	3,539,941		123,671		$	2,494,969
Cost of shares repurchased	(135,511	)		(3,011,537	)	(129,272	)		(2,654,685	)
Increase (decrease)	24,205		$	528,404		(5,601	)	$	(159,716	)
Class R	Shares			Amount		Shares			Amount
Net proceeds from sales of shares	71,553		$	1,547,191		50,187		$	999,824
Exchanged from associated funds	167			3,717		2			42
Total	71,720			1,550,908		50,189			999,866
Cost of shares repurchased	(22,182	)		(478,751	)	(28,790	)		(572,103	)
Exchanged into associated funds	(458	)		(9,979	)	(98	)		(1,816	)
Total	(22,640	)		(488,730	)	(28,888	)		(573,919	)
Increase	49,080		$	1,062,178		21,301		$	425,947

8.	Other Matters — In late 2003, the Manager conducted an extensive internal review in response to public announcements concerning frequent trading in shares of open-end mutual funds. As of September 2003, the Manager had one arrangement that permitted frequent trading in the Seligman registered investment companies (the “Seligman Funds”). This arrangement was in the process of being closed down by the Manager before the first proceedings relating to trading practices within the mutual fund industry were publicly announced. Based on a review of the Manager’s records for 2001 through 2003, the Manager identified three other arrangements that had permitted frequent trading in the Seligman Funds. All three had already been terminated prior to the end of September 2002.
	The results of the Manager’s internal review were presented to the Independent Directors of all Seligman Funds. In order to resolve matters with the Independent Directors relating to the four arrangements that permitted frequent trading, the Manager, in May 2004, made payments to three mutual funds and agreed to waive a portion of its management fee with respect to another mutual fund (none of which was Seligman Capital Fund).
	Beginning in February 2004, the Manager was in discussions with the New York staff of the Securities and Exchange Commission (“SEC”) and the Office of the New York Attorney General (“Attorney General”) in connection with their review of frequent trading in certain of the Seligman Funds. No late trading is involved. This review was apparently stimulated by the Manager’s voluntary public disclosure of the foregoing arrangements in January 2004. In March 2005, negotiations to settle the matter were initiated by the New York staff of the SEC. After several months of negotiations, tentative agreement was reached, both with the New York staff of the SEC and the Attorney General, on the financial terms of a settlement. However, settlement discussions with the Attorney General ended when the Attorney General sought to impose operating conditions on the Manager that were unacceptable to the Manager, would have applied in perpetuity and were not requested or required by the SEC. Subsequently, the New York staff of the SEC indicated that, in lieu of moving forward under the terms of the tentative financial settlement, the staff was considering recommending to the Commissioners of the SEC the instituting of a formal action against the Manager, the Distributor, and Seligman Data Corp. (together, “Seligman”).
	Seligman believes that any action would be both inappropriate and unnecessary, especially in light of the fact that Seligman previously resolved the underlying issue with the Independent Directors of the Seligman Funds and made recompense to the affected Seligman Funds.
	Immediately after settlement discussions with the Attorney General ended, the Attorney General issued subpoenas to certain of the Seligman Funds and their directors. The subpoenas sought various Board

22

Notes to Financial Statements

	materials and information relating to the deliberations of the Independent Directors as to the advisory fees paid by the Seligman Funds to the Manager. The Manager objected to the Attorney General’s seeking of such information and, on September 6, 2005, filed suit in federal district court seeking to enjoin the Attorney General from pursuing a fee inquiry. Seligman believes that the Attorney General’s inquiry is improper because Congress has vested exclusive regulatory oversight of investment company advisory fees in the SEC. At the end of September 2005, the Attorney General indicated that it intended to file an action at some time in the future alleging, in substance, that the Manager permitted other persons to engage in frequent trading other than the arrangements described above and, as a result, the prospectus disclosure of the Seligman Funds is and has been misleading. On September 26, 2006, the Attorney General commenced a civil action in New York State Supreme Court against J. & W. Seligman & Co. Incorporated, Seligman Advisors, Inc., Seligman Data Corp. and Brian T. Zino (President of the Manager and the Seligman Funds), reiterating, in substance, the foregoing claims and various other related matters. The Attorney General also claims that the fees charged by Seligman are excessive. The Attorney General is seeking damages and restitution, disgorgement, penalties and costs (collectively, “Damages”), including Damages of at least $80 million relating to alleged timing occurring in the Seligman Funds and disgorgement of profits and management fees, and injunctive relief. Seligman and Mr. Zino believe that the claims are without merit and intend to defend themselves vigorously. Any resolution of these matters with regulatory authorities may include, but not be limited to, sanctions, penalties, injunctions regarding Seligman, restitution to mutual fund shareholders or changes in procedures. Any Damages will be paid by Seligman and not by the Seligman Funds. If Seligman is unsuccessful in its defense of these proceedings, it and its affiliates could be barred from providing services to the Seligman Funds, including serving as an investment adviser for the Seligman Funds and principal underwriter for the open-end Seligman Funds. If these results occur, Seligman will seek exemptive relief from the SEC to permit it and its affiliates to continue to provide services to the Seligman Funds. There is no assurance that such exemptive relief will be granted. Seligman does not believe that the foregoing legal action or other possible actions should have a material adverse impact on Seligman or the Seligman Funds; however, there can be no assurance of this, or that these matters and any related publicity will not result in reduced demand for shares of the Seligman Funds or other adverse consequences.
9.	Recently Issued Accounting Pronouncements — In July 2006, the Financial Accounting Standards Board (“FASB”) issued FASB Interpretation No. 48 (“FIN 48”), “Accounting for Uncertainty in Income Taxes — an interpretation of FASB Statement No. 109.” FIN 48 provides guidance for how uncertain tax positions, if any, should be recognized, measured, presented and disclosed in the financial statements. FIN 48 is effective for fiscal years beginning after December 15, 2006 and, in accordance with recent SEC guidance, can be implemented within the first required financial statement reporting period. Accordingly, the Fund will incorporate the effects, if any, of FIN 48 in its semi-annual report for the six months ended June 30, 2007. The Fund is currently evaluating the impact, if any, of applying the various provisions of FIN 48.
	In September 2006, the FASB issued Statement of Financial Accounting Standards No. 157 (“SFAS No. 157”), “Fair Value Measurements.” SFAS No. 157 defines fair value, establishes a framework for measuring fair value of assets and liabilities and expands disclosure about fair value measurements. SFAS No. 157 is effective for fiscal years beginning after November 15, 2007. The Fund is currently evaluating the impact of the adoption of SFAS No. 157 but believes the impact will be limited to expanded disclosures in the Fund’s financial statements.

23

Financial Highlights

The tables below are intended to help you understand each Class’s financial performance for the periods presented. Certain information reflects financial results for a single share of a Class that was held throughout the periods shown. Per share amounts are calculated using average shares outstanding during the period. Total return shows the rate that you would have earned (or lost) on an investment in each Class, assuming you reinvested all your dividends and capital gain distributions, if any. Total returns do not reflect any taxes or sales charges and are not annualized for periods of less than one year.

CLASS A
	Year Ended December 31,
		2006			2005			2004			2003			2002
Per Share Data:
Net Asset Value, Beginning of Year	$	21.30		$	19.10		$	17.66		$	13.11		$	19.66
Income (Loss) from Investment Operations:
Net investment loss		(0.17	)		(0.19	)		(0.19	)		(0.16	)		(0.14	)
Net realized and unrealized gain (loss) on investments		1.34			2.39			1.63			4.71			(6.41	)
Total from Investment Operations		1.17			2.20			1.44			4.55			(6.55	)
Net Asset Value, End of Year	$	22.47		$	21.30		$	19.10		$	17.66		$	13.11
Total Return		5.45	%		11.52	%		8.15	%		34.71	%		(33.32	)%
Ratios/Supplemental Data:
Net assets, end of year (000s omitted)	$	304,735		$	346,688		$	382,188		$	396,147		$	335,220
Ratio of expenses to average net assets		1.51	%		1.52	%		1.51	%		1.57	%		1.34	%
Ratio of net investment loss to average net assets		(0.77	)%		(0.97	)%		(1.05	)%		(1.08	)%		(0.93	)%
Portfolio turnover rate		203.65	%		176.42	%		212.27	%		142.14	%		132.45	%

____________
See footnotes on page 27.

24

Financial Highlights

CLASS B
	Year Ended December 31,
		2006			2005			2004			2003			2002
Per Share Data:
Net Asset Value, Beginning of Year	$	17.81		$	16.09		$	15.00		$	11.21		$	16.95
Income (Loss) from Investment Operations:
Net investment loss		(0.28	)		(0.29	)		(0.27	)		(0.23	)		(0.23	)
Net realized and unrealized gain (loss) on investments		1.10			2.01			1.36			4.02			(5.51	)
Total from Investment Operations		0.82			1.72			1.09			3.79			(5.74	)
Net Asset Value, End of Year	$	18.63		$	17.81		$	16.09		$	15.00		$	11.21
Total Return		4.60	%		10.69	%		7.27	%		33.81	%		(33.86	)%
Ratios/Supplemental Data:
Net assets, end of year (000s omitted)	$	42,258		$	60,285		$	75,004		$	90,719		$	78,832
Ratio of expenses to average net assets		2.26	%		2.27	%		2.26	%		2.32	%		2.09	%
Ratio of net investment loss to average net assets		(1.52	)%		(1.72	)%		(1.80	)%		(1.83	)%		(1.68	)%
Portfolio turnover rate		203.65	%		176.42	%		212.27	%		142.14	%		132.45	%
CLASS C
	Year Ended December 31,
		2006			2005			2004			2003			2002
Per Share Data:
Net Asset Value, Beginning of Year	$	17.84		$	16.12		$	15.03		$	11.23		$	16.98
Income (Loss) from Investment Operations:
Net investment loss		(0.28	)		(0.29	)		(0.27	)		(0.23	)		(0.23	)
Net realized and unrealized gain (loss) on investments		1.12			2.01			1.36			4.03			(5.52	)
Total from Investment Operations		0.84			1.72			1.09			3.80			(5.75	)
Net Asset Value, End of Year	$	18.68		$	17.84		$	16.12		$	15.03		$	11.23
Total Return		4.65	%		10.67	%		7.25	%		33.84	%		(33.86	)%
Ratios/Supplemental Data:
Net assets, end of year (000s omitted)	$	39,100		$	50,023		$	60,996		$	74,672		$	67,545
Ratio of expenses to average net assets		2.26	%		2.27	%		2.26	%		2.32	%		2.09	%
Ratio of net investment loss to average net assets		(1.52	)%		(1.72	)%		(1.80	)%		(1.83	)%		(1.68	)%
Portfolio turnover rate		203.65	%		176.42	%		212.27	%		142.14	%		132.45	%

____________
See footnotes on page 27.

25

Financial Highlights

CLASS D
	Year Ended December 31,
		2006			2005			2004			2003			2002
Per Share Data:
Net Asset Value, Beginning of Year	$	17.84		$	16.11		$	15.02		$	11.23		$	16.97
Income (Loss) from Investment Operations:
Net investment loss		(0.28	)		(0.29	)		(0.27	)		(0.23	)		(0.23	)
Net realized and unrealized gain (loss) on investments		1.11			2.02			1.36			4.02			(5.51	)
Total from Investment Operations		0.83			1.73			1.09			3.79			(5.74	)
Net Asset Value, End of Year	$	18.67		$	17.84		$	16.11		$	15.02		$	11.23
Total Return		4.65	%		10.74	%		7.26	%		33.75	%		(33.82	)%
Ratios/Supplemental Data:
Net assets, end of year (000s omitted)	$	41,858		$	44,225		$	43,426		$	44,990		$	39,110
Ratio of expenses to average net assets		2.26	%		2.27	%		2.26	%		2.32	%		2.09	%
Ratio of net investment loss to average net assets		(1.52	)%		(1.72	)%		(1.80	)%		(1.83	)%		(1.68	)%
Portfolio turnover rate		203.65	%		176.42	%		212.27	%		142.14	%		132.45	%
CLASS I
	Year Ended December 31,
		2006			2005			2004			2003			2002
Per Share Data:
Net Asset Value, Beginning of Year	$	21.73		$	19.38		$	17.84		$	13.17		$	19.66
Income (Loss) from Investment Operations:
Net investment loss		(0.06	)		(0.09	)		(0.10	)		(0.08	)		(0.06	)
Net realized and unrealized gain (loss) on investments		1.36			2.44			1.64			4.75			(6.43	)
Total from Investment Operations		1.30			2.35			1.54			4.67			(6.49	)
Net Asset Value, End of Year	$	23.03		$	21.73		$	19.38		$	17.84		$	13.17
Total Return		5.98	%		12.13	%		8.63	%		35.46	%		(33.01	)%
Ratios/Supplemental Data:
Net assets, end of year (000s omitted)	$	21,595		$	19,844		$	17,807		$	13,744		$	7,796
Ratio of expenses to average net assets		1.01	%		1.00	%		1.00	%		1.06	%		0.83	%
Ratio of net investment loss to average net assets		(0.27	)%		(0.45	)%		(0.54	)%		(0.54	)%		(0.43	)%
Portfolio turnover rate		203.65	%		176.42	%		212.27	%		142.14	%		132.45	%
Without expense reimbursement:ø
Ratio of expenses to average net assets														0.85	%
Ratio of net investment loss to average net assets														(0.45	)%

____________
See footnotes on page 27.

26

Financial Highlights

CLASS R
										4/30/03*
	Year Ended December 31,									to
		2006			2005			2004		12/31/03
Per Share Data:
Net Asset Value, Beginning of Period	$	21.21		$	19.05		$	17.65		$	13.42
Income (Loss) from Investment Operations:
Net investment loss		(0.22	)		(0.24	)		(0.23	)		(0.13	)
Net realized and unrealized gain on investments		1.35			2.40			1.63			4.36
Total from Investment Operations		1.13			2.16			1.40			4.23
Net Asset Value, End of Period	$	22.34		$	21.21		$	19.05		$	17.65
Total Return		5.28	%		11.34	%		7.93	%		31.52	%
Ratios/Supplemental Data:
Net assets, end of period (000s omitted)	$	3,016		$	1,823		$	1,232		$	2
Ratio of expenses to average net assets		1.76	%		1.77	%		1.76	%		1.79	%†
Ratio of net investment loss to average net assets		(1.02	)%		(1.22	)%		(1.30	)%		(1.23	)%†
Portfolio turnover rate		203.65	%		176.42	%		212.27	%		142.14	%‡

____________
* Commencement of offering of shares.
† Annualized.
‡ Computed at the Fund level for the year ended December 31, 2003.
ø The Manager, at its discretion, reimbursed certain expenses of Class I shares.
See Notes to Financial Statements.

27

Report of Independent Registered
Public Accounting Firm

The Board of Directors and Shareholders,
Seligman Capital Fund, Inc.:

We have audited the accompanying statement of assets and liabilities of Seligman Capital Fund, Inc. (the “Fund”), including the portfolio of investments, as of December 31, 2006, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the periods presented. These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. The Fund is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of December 31, 2006, by correspondence with the custodian and brokers; where replies were not received from brokers we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Seligman Capital Fund, Inc. as of December 31, 2006, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for the periods presented, in conformity with accounting principles generally accepted in the United States of America.

DELOITTE & TOUCHE LLP
New York, New York
February 27, 2007

28

Matters Relating to the Directors’
Consideration of the Continuance of the
Management Agreement

The directors of Seligman Capital Fund, Inc. unanimously approved the continuance of the Management Agreement with the Manager at a meeting held on November 15, 2006.

Prior to approval of the continuance of the Management Agreement, the directors requested and evaluated extensive materials from the Manager. They reviewed the proposed continuance of the Management Agreement with the Manager and with experienced counsel who advised on the legal standards for their consideration. The independent directors also discussed the proposed continuance in a private session with counsel.

The directors considered their knowledge of the nature and quality of the services provided by the Manager to the Fund gained from their experience as directors and/or trustees of the Seligman Group of Funds, their overall confidence in the Manager’s integrity and competence they have gained from that experience, the Manager’s initiative in identifying and raising potential issues with the directors and its responsiveness, frankness and attention to concerns raised by the directors in the past, including the Manager’s willingness to consider and implement organizational and operational changes designed to improve investment results and the services provided to the Seligman Group of Funds. The directors noted that the Board has six regular meetings each year, at each of which they receive presentations from the Manager on the investment results of the Fund and review extensive materials and information presented by the Manager.

The directors also considered all other factors they believed relevant, including the specific matters discussed below. In their deliberations, the directors did not identify any particular information that was all-important or controlling, and directors attributed different weights to the various factors. The directors determined that the selection of the Manager to manage the Fund, and the overall arrangements between the Fund and the Manager as provided in the Management Agreement, including the management fee, were fair and reasonable in light of the services performed, expenses incurred and such other matters as the directors considered relevant in the exercise of their reasonable judgment. The material factors and conclusions that formed the basis for the directors’ determination included the following:

Nature, Extent and Quality of Services Provided

The directors considered the scope and quality of services provided by the Manager under the Management Agreement. The directors considered the quality of the investment research capabilities of the Manager and the other resources it has dedicated to performing services for the Fund. They also noted the professional experience and qualifications of the Fund’s portfolio management team and other senior personnel of the Manager. At prior meetings the directors had also considered the Manager’s selection of brokers and dealers for portfolio transactions. The quality of administrative and other services, including the Manager’s role in coordinating the activities of the Fund’s other service providers, also were considered. The directors concluded that, overall, they were satisfied with the nature, extent and quality of services provided (and expected to be provided) to the Fund under the Management Agreement.

On an ongoing basis, the Manager reports to the directors on the status of various matters relating to market timing activity affecting certain funds in the Seligman Group of Funds. In connection with the

29

Matters Relating to the Directors’
Consideration of the Continuance of the
Management Agreement

continuance review, the Manager and its counsel and the directors’ special counsel also addressed, among other matters: the action brought in September 2005 by the Manager and its president against the Attorney General of the State of New York seeking an order enjoining the Attorney General from, among other things, investigating the fees paid by the funds in the Seligman Group of Funds to the Manager; and the action brought in September 2006 by the Attorney General against the Manager, Seligman Data Corp., the president of the Manager and Seligman Advisors, Inc. (“Seligman Advisors”) relating to market timing and also claiming that the fees charged by the Manager are excessive. The directors also noted the indication in September 2005 by the Staff of the New York Office of the Securities and Exchange Commission (“SEC”) that it was considering recommending that the SEC institute a formal action against the Manager and Seligman Advisors relating to market timing. After a detailed presentation by the Manager and further discussion with the Manager, the Manager’s counsel, the directors’ special counsel and other counsel independent of the Manager, and consideration of the potential consequences of the various matters referred to above, the independent directors concluded that they retained confidence in the integrity of the Manager and its ability to provide management services to the Fund.

Costs of Services Provided and Profitability

The directors reviewed information concerning profitability of the Manager’s investment advisory and investment company activities and its financial condition based on historical information and estimates for the current year, as well as historical and estimated profitability data for the Fund. The directors reviewed with the Manager’s chief financial officer, the assumptions and methods of allocation used by the Manager in preparing the profitability data. The directors recognized that it is difficult to make comparisons of profitability from fund management contracts because comparative information is not generally publicly available and is affected by numerous factors. In considering profitability information, the directors considered the effect of fall-out benefits on the Manager’s expenses, as well as the “revenue sharing” arrangements the Manager has entered into with certain entities that distribute shares of the Seligman Group of Funds. The directors focused on profitability of the Manager’s relationships with the Fund before taxes and distribution expenses. The directors concluded that they were satisfied that the Manager’s level of profitability from its relationship with the Fund was not excessive.

Fall-Out Benefits

The directors considered that the Manager benefits from soft dollar arrangements whereby it receives brokerage and research services from brokers that execute the Seligman Group of Funds’ purchases and sales of securities. They reviewed a description of the Manager’s practices with respect to allocating portfolio brokerage for brokerage and research services, data on the dollar amount of commissions allocated for third-party research and brokerage services and for proprietary research and brokerage services, and a current list of firms providing third-party research and brokerage to the Manager. The directors also considered that a broker-dealer affiliate of the Manager receives 12b-1 fees from the Fund in respect of shares held in certain accounts, and that the Fund’s distributor (another affiliate of the Manager) retains a portion of the 12b-1 fees from the Fund and receives a portion of the sales charges on sales or redemptions of certain classes of shares. The directors further recognized that the Manager’s profitability would be somewhat lower without these benefits. The

30

Matters Relating to the Directors’
Consideration of the Continuance of the
Management Agreement

directors noted that the Manager may derive reputational and other benefits from its association with the Fund. The directors concluded that the fall-out benefits realized by the Manager from its relationship with the Fund were appropriate.

Investment Results

In addition to the information received by the directors for the meeting, the directors receive detailed performance information for the Funds at each regular Board meeting during the year. At the meeting, the directors reviewed performance information for the Fund covering a wide range of periods, including the first nine months of 2006, the preceding six calendar years and annualized one-, three-, five- and ten-year rolling periods ended September 30, 2006.

The directors reviewed information showing performance of the Fund compared to other funds in the Lipper Mid-Cap Funds Average, Lipper Mid-Cap Growth Funds Average, the Russell Midcap Growth Index, and to a group of competitor funds selected by the Manager. The directors also reviewed information about the portfolio turnover rate of the Fund compared to other investment companies with similar investment objectives. The directors noted that the Fund’s Lipper ranking was above the median for the ten-year period presented, but that its results were generally below the benchmarks in the more recent periods, although the results did exceed the benchmarks in certain years. The Manager noted that a new portfolio manager had been hired in the fall of 2006. Taking into account these comparisons and the other factors considered, the directors concluded that the Fund’s investment results over time had been satisfactory.

Management Fee and Other Expenses

The directors considered the management fee rate paid by the Fund to the Manager. The directors recognized that it is difficult to make comparisons of management fees because there are variations in the services that are included in the fees paid by other funds. The directors also considered the fees the Manager charges other clients with investment objectives similar to those of the Fund.

The directors noted that the Manager manages a registered investment company that is a “clone” of the Fund but is sold exclusively to insurance company separate accounts. The directors further noted that the management fee rate paid by the Fund is higher than the management fee rate paid by its “clone” portfolio. The Manager explained that the lower fee rate applicable to the clone portfolio was largely the result of fee rate increases at the Fund that had not been sought for the clone portfolio. This was because, in view of the small size of the clone portfolio and the fact that, at various times, the clone portfolio had been subsidized by the Manager, the Manager had determined not to recommend fee rate increases for the clone portfolio to match those recommended for the Fund.

The Manager also manages accounts for institutional clients with investment objectives similar to those of the Portfolio. The fee rates payable by the Manager’s institutional clients are lower than the management fee rate paid by the Fund. The Manager reviewed with the directors the significantly greater scope of the services it provides the Fund relative to institutional clients. The Manager also noted that since open-end funds, such as the Fund, are constantly issuing and redeeming shares, they are more difficult to manage than an institutional account, where the assets are relatively stable.

31

Matters Relating to the Directors’
Consideration of the Continuance of the
Management Agreement

The directors acknowledged and understood these considerations and accordingly gave appropriate weight to these fee comparisons.

The directors also compared the Fund’s management fee rate to the rate paid by a subset of funds, with assets more nearly comparable to those of the Fund, in its Lipper category (the “peer group”). The information showed that the Fund’s current effective management fee rate was within the range of management fees paid by the funds in the peer group although somewhat above the average and the median for the peer group.

The directors also considered the total expense ratio of the Fund in comparison to the fees and expenses of funds within its peer group. In considering the expense ratio of the Fund, the directors noted that it has elected to have shareholder services provided at cost by Seligman Data Corp. (“SDC”), a company owned by certain of the investment companies in the Seligman Group of Funds that provides shareholder services to the Fund and other investment companies in the Seligman Group of Funds at cost. SDC provides services exclusively to the Seligman Group of Funds, and the directors believed that the arrangement with SDC has provided the Fund and its shareholders with a consistently high level of service.

The directors noted that the Fund’s expense ratio was somewhat higher than the median and the average for the peer group, which the Manager attributed in part to the Fund’s higher than median management fee. The directors concluded that the expense ratio was acceptable in light of the high quality of service that the Fund receives and the other factors considered.

Economies of Scale

The directors noted that the management fee schedule for the Fund contains breakpoints that reduce the fee rate on assets above specified levels, although, at the Fund’s current asset levels, it was unlikely to benefit from them in the next year. The directors recognized that there is no direct relationship between the economies of scale realized by funds and those realized by their investment adviser as assets increase. The directors do not believe that there is a uniform methodology for establishing breakpoints that give effect to fund specific services provided by the Manager. The directors also observed that in the investment company industry as a whole, as well as among funds similar to the Fund, there is no uniformity or pattern in the fees and asset levels at which breakpoints (if any) apply, and that the advisory agreements for many competitor funds do not have breakpoints at all. Having taken these factors into account, the directors concluded that the Fund’s breakpoint arrangements were acceptable under the Fund’s circumstances.

32

Directors and Officers
Information pertaining to the Directors and Officers of Seligman Capital Fund, Inc. is set forth below.

Independent Directors

Name, (Age), Position(s)	Principal Occupation(s) During Past Five Years, Directorships
held with Fundø	and Other Information
John R. Galvin (77)1,3	Dean Emeritus, Fletcher School of Law and Diplomacy at Tufts
• Director: 1995 to Date	University; Director or Trustee of each of the investment companies of
• Oversees 61 Portfolios	the Seligman Group of Funds†; and Chairman Emeritus, American
in Fund Complex	Council on Germany. Formerly, Director, Raytheon Co. (defense and com-
	mercial electronics), Governor of the Center for Creative Leadership, and
	Trustee, Institute for Defense Analyses. From February 1995 until June
	1997, he was a Director, USLIFE Corporation (life insurance). From June
	1987 to June 1992, Mr. Galvin was the Supreme Allied Commander,
	NATO, and the Commander-in-Chief, United States European Command.
John F. Maher (63)1,3	Retired President and Chief Executive Officer of Great Western Financial
• Director: December	Corporation and its principal subsidiary, Great Western Bank (a federal
2006 to Date**	savings bank); and Director or Trustee of each of the investment compa-
• Oversees 57 Portfolios	nies of the Seligman Group of Funds† (with the exception of Seligman
in Fund Complex	Cash Management Fund, Inc., Seligman New Technologies Fund, Inc.,
	Seligman New Technologies Fund II, Inc., and Seligman Quality
	Municipal Fund, Inc.).
Frank A. McPherson (73)2,3	Retired Chairman of the Board and Chief Executive Officer of Kerr-McGee
• Director: 1995 to Date	Corporation (diversified energy and chemical company); Director or
• Oversees 61 Portfolios	Trustee of each of the investment companies of the Seligman Group of
in Fund Complex	Funds†; and Director, DCP Midstream GP, LLP (natural gas processing),
	Integris Health (owner of various hospitals), Oklahoma Chapter of the
	Nature Conservancy, Oklahoma Medical Research Foundation, Boys and
	Girls Clubs of Oklahoma, Oklahoma City Public Schools Foundation, and
	Oklahoma Foundation for Excellence in Education. Formerly, Director,
	ConocoPhillips (integrated international oil corporation), Kimberly-Clark
	Corporation (consumer products) and BOK Financial (bank holding com-
	pany). From 1990 until 1994, Director, the Federal Reserve System’s
	Kansas City Reserve Bank.
Betsy S. Michel (64)1,3	Attorney; Director or Trustee of each of the investment companies of the
• Director: 1984 to Date	Seligman Group of Funds†; and Trustee, The Geraldine R. Dodge
• Oversees 61 Portfolios	Foundation (charitable foundation). Formerly, Chairman of the Board of
in Fund Complex	Trustees of St. Georgeís School (Newport, RI); and Trustee, World
	Learning, Inc. (international educational training), and Council of New
	Jersey Grantmakers.

____________
See footnotes on page 36.

33

Directors and Officers

Independent Directors (continued)

Name, (Age), Position(s)	Principal Occupation(s) During Past Five Years, Directorships
held with Fundø	and Other Information
Leroy C. Richie (65)1,3	Counsel, Lewis & Munday, P.C. (law firm); Chairman and Chief Executive
• Director: 2000 to Date	Officer, Q Standards Worldwide, Inc. (library of technical standards);
• Oversees 60 Portfolios	Director or Trustee of each of the investment companies of the Seligman
in Fund Complex	Group of Funds† (with the exception of Seligman Cash Management
	Fund, Inc.); Director, Kerr-McGee Corporation (diversified energy and
	chemical company), Infinity, Inc. (oil and gas services and exploration),
	and Vibration Control Technologies, LLC (auto vibration technology);
	Lead Outside Director, Digital Ally Inc. (digital imaging); Director and
	Chairman, Highland Park Michigan Economic Development Corp.; and
	Chairman, Detroit Public Schools Foundation. Formerly, Trustee, New
	York University Law Center Foundation; and Vice Chairman, Detroit
	Medical Center and Detroit Economic Growth Corp. From 1990 until
	1997, Vice President and General Counsel, Automotive Legal Affairs,
	Chrysler Corporation.
Robert L. Shafer (74)2,3	Ambassador and Permanent Observer of the Sovereign Military Order of
• Director: 1980 to Date	Malta to the United Nations; and Director or Trustee of each of the
• Oversees 61 Portfolios	investment companies of the Seligman Group of Funds†. From May 1987
in Fund Complex	until June 1997, Director, USLIFE Corporation (life insurance) and from
	1973 until January 1996, Vice President, Pfizer Inc. (pharmaceuticals).
James N. Whitson (71)1,3	Retired Executive Vice President and Chief Operating Officer, Sammons
• Director: 1993 to Date	Enterprises, Inc. (a diversified holding company); Director or Trustee of
• Oversees 61 Portfolios	each of the investment companies of the Seligman Group of Funds†; and
in Fund Complex	Director, CommScope, Inc. (manufacturer of coaxial cable). Formerly,
	Director and Consultant, Sammons Enterprises, Inc. and Director,
	C-SPAN (cable television networks).

____________
See footnotes on page 36.

34

Directors and Officers

Interested Directors and Principal Officers

Name, (Age), Position(s)	Principal Occupation(s) During Past Five Years, Directorships
held with Fundø	and Other Information
William C. Morris* (68)	Chairman and Director, J. & W. Seligman & Co. Incorporated; Chairman
• Director and Chairman	of the Board and Director or Trustee of each of the investment compa-
of the Board: 1988 to Date	nies of the Seligman Group of Funds†; Chairman and Director, Seligman
• Oversees 61 Portfolios	Advisors, Inc., Seligman Services, Inc. and Carbo Ceramics Inc. (manu-
in Fund Complex	facturer of ceramic proppants for oil and gas industry); Director,
	Seligman Data Corp.; and President and Chief Executive Officer of The
	Metropolitan Opera Association. Formerly, Director, Kerr-McGee
	Corporation (diversified energy and chemical company) and Chief
	Executive Officer of each of the investment companies of the Seligman
	Group of Funds.
Brian T. Zino* (54)	Director and President, J. & W. Seligman & Co. Incorporated; President,
• Director: 1993 to Date	Chief Executive Officer, and, with the exception of Seligman Cash
• President: 1995 to Date	Management Fund, Inc., Director or Trustee of each of the investment
• Chief Executive Officer:	companies of the Seligman Group of Funds†; Director, Seligman
2002 to Date	Advisors, Inc. and Seligman Services, Inc.; and Chairman, Seligman Data
• Oversees 60 Portfolios	Corp. Formerly, Member of the Board of Governors of the Investment
in Fund Complex	Company Institute; and Director (formerly Chairman), ICI Mutual
	Insurance Company.
Eleanor T.M. Hoagland (55)	Managing Director, J. & W. Seligman & Co. Incorporated; and Vice
• Vice President and	President and Chief Compliance Officer of each of the investment com-
Chief Compliance Officer:	panies of the Seligman Group of Funds†.
2004 to Date
Thomas G. Rose (49)	Managing Director, Chief Financial Officer, and Treasurer, J. & W.
• Vice President:	Seligman & Co. Incorporated; Senior Vice President, Finance, Seligman
2000 to Date	Advisors, Inc. and Seligman Data Corp.; and Vice President of each of the
	investment companies of the Seligman Group of Funds†, Seligman
	Services, Inc. and Seligman International, Inc.
Lawrence P. Vogel (50)	Senior Vice President and Treasurer, Investment Companies, J. & W.
• Vice President: 1992 to Date	Seligman & Co. Incorporated; Vice President and Treasurer of each of the
• Treasurer: 200o to Date	investment companies of the Seligman Group of Funds† and Treasurer,
	Seligman Data Corp.

____________
See footnotes on page 36.

35

Directors and Officers

Interested Directors and Principal Officers (continued)

Name, (Age), Position(s)	Principal Occupation(s) During Past Five Years, Directorships
held with Fundø	and Other Information
Erik J. Voss (39)	Managing Director, J. & W. Seligman & Co. Incorporated; Vice President
• Vice President and	and Portfolio Manager of Seligman Growth Fund, Inc.; Vice President of
Portfolio Manager:	Seligman Portfolios, Inc. and Portfolio Manager of its Capital Portfolio.
From October 2006	Formerly, Portfolio Manager, Wells Capital Management Incorporated,
	and prior thereto, Strong Capital Management.
Frank J. Nasta (42)	Director, Managing Director, General Counsel and Corporate Secretary,
• Secretary: 1994 to Date	J. & W. Seligman & Co. Incorporated; Secretary of each of the investment
	companies of the Seligman Group of Funds†; Director and Corporate
	Secretary, Seligman Advisors, Inc. and Seligman Services, Inc.; and
	Corporate Secretary, Seligman International, Inc. and Seligman
	Data Corp.

The Fund’s Statement of Additional Information (SAI) includes additional information about Fund directors and is available, without charge, upon request. You may call toll-free (800) 221-2450 in the US or call collect (212) 682-7600 outside the US to request a copy of the SAI, to request other information about the Fund, or to make shareholder inquiries.

________

ø	The address for each of the directors and officers is 100 Park Avenue, 8th Floor, New York, NY 10017. Each director serves for an indefinite term, until the election and qualification of a successor or until his or her earlier death, resignation, or removal. Each officer is elected annually by the Board of Directors.
†	The Seligman Group of Funds consists of 24 registered investment companies.
*	Messrs. Morris and Zino are considered “interested persons” of the Fund, as defined in the Investment Company Act of 1940, as amended, by virtue of their positions with J. & W. Seligman & Co. Incorporated and its affiliates.
**	Mr. Maher was appointed to the Board on December 18, 2006.

Member:	1 Audit Committee
	2 Director Nominating Committee
	3 Board Operations Committee

36

Additional Fund Information

Quarterly Schedule of Investments

A complete schedule of portfolio holdings owned by the Fund will be filed with the SEC for the first and third quarters of each fiscal year on Form N-Q, and will be available to shareholders (i) without charge, upon request, by calling toll-free (800) 221-2450 in the US or collect (212) 682-7600 outside the US or (ii) on the SEC’s website at www.sec.gov.¹ In addition, the Form N-Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling (800) SEC-0330. Certain of the information contained in the Fund’s Form N-Q is also made available to shareholders on Seligman’s website at www.seligman.com.¹

Proxy Voting

A description of the policies and procedures used by the Fund to determine how to vote proxies relating to portfolio securities as well as information regarding how the Fund voted proxies relating to portfolio securities during the 12-month period ended June 30 of each year will be available (i) without charge, upon request, by calling toll-free (800) 221-2450 in the US or collect (212) 682-7600 outside the US and (ii) on the SEC’s website at www.sec.gov.¹ Information for each new 12-month period ending June 30 will be available no later than August 31 of that year.

1   These website references are inactive textual references and information contained in or otherwise accessible through these websites does not form a part of this report or the Fund’s prospectuses or statement of additional information.

37

This report is intended only for the information of shareholders or those who have received the offering prospectuscovering shares of Capital Stock of Seligman Capital Fund, Inc., which containsinformation about the investmentobjectives, risks, charges, and expenses of the Fund, each of which should be consideredcarefully before investing or sendingmoney.
	EQCA2 12/06

ITEM 2.	CODE OF ETHICS.
	As of December 31, 2006, the registrant has adopted a code of ethics that applies to its principal executive and principal financial officers.
ITEM 3.	AUDIT COMMITTEE FINANCIAL EXPERT
	The registrant’s board of directors has determined that Mr. James N. Whitson, a member of its audit committee, is an audit committee financial expert. Mr. Whitson is “independent” as such term is defined in Form N-CSR.
ITEM 4.	PRINCIPAL ACCOUNTANT FEES AND SERVICES.
	(a) – (d) Aggregate fees billed to the registrant for the last two fiscal years for professional services rendered by the registrant’s principal accountant were as follows:
		2006	2005
	Audit Fees	$39,910	$38,010
	Audit-Related Fees	–	–
	Tax Fees	2,500	2,350
	All Other Fees	–	–
	Audit fees include amounts related to the audit of the registrant’s annual financial statements and services normally provided by the accountant in connection with statutory and regulatory filings. Tax fees include amounts related to tax compliance, tax planning, and tax advice.
	Aggregate fees billed by the registrant’s principal accountant for the last two fiscal years for non-audit services provided to the registrant’s investment adviser (not including a sub-adviser whose role is primarily portfolio management and is subcontracted or overseen by another investment adviser) and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registered investment company, where the engagement relates directly to the operations and financial reporting of the registrant, were as follows:
		2006	2005
	Audit-Related Fees	$141,710	$124,560
	Tax Fees	11,955	8,000
	All Other Fees	–	–
	Audit-related fees include amounts for (i) attestation services for the registrant’s shareholder service agent; (ii) testing of the registrant’s shareholder service agent’s conversion to a new record-keeping system and (iii) performance of certain agreed-

upon procedures relating to certain services performed by the registrant’s distributor. Tax fees include amounts related to tax compliance, tax planning, and tax advice for and an evaluation of certain tax reporting procedures of the registrant’s shareholder service agent.

(e) (1) The Audit Committee is required to preapprove audit and non-audit services performed for the registrant by the principal accountant in order to assure that the provision of such services does not impair the principal accountant’s independence. The Audit Committee also is required to preapprove certain non-audit services performed by the registrant’s principal accountant for the registrant’s investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser) and certain of the adviser’s affiliates that provide services directly related to the operations and financial reporting of the registrant. Unless a type of service to be provided by the principal accountant has received preapproval, it will require specific preapproval by the Audit Committee.

The Audit Committee may delegate preapproval authority to one or more of its members. The member or members to whom such authority is delegated shall report any preapproval decisions to the Audit Committee at its next scheduled meeting.

Notwithstanding the foregoing, under certain circumstances, preapproval of non-audit services of a de minimis amount is not required.

(2) No services included in (b) – (d) above were approved pursuant to the waiver provisions of paragraphs (c)(7)(i)(C) or (c)(7)(ii) of Rule 2-01 of Regulation S-X.

(f) Not applicable.

(g) The aggregate fees billed for the most recent fiscal year and the preceding fiscal year by the registrant’s principal accountant for non-audit services rendered to the registrant, its investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant were $156,165 and $134,910, respectively.

(h) All non-audit services rendered in (g) above were pre-approved by the registrant’s audit committee. Accordingly, the audit committee considered whether these services were compatible with maintaining the principal accountant’s independence.

ITEM 5.       AUDIT COMMITTEE OF LISTED REGISTRANTS. Not applicable.

ITEM 6.       SCHEDULE OF INVESTMENTS. Included in Item 1 above.

ITEM 7.	DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
	Not applicable.
ITEM 8.	PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
	Not applicable.
ITEM 9.	PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS.
	Not applicable.
ITEM 10.	SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
	Not applicable.
ITEM 11.	CONTROLS AND PROCEDURES.
	(a) The registrant's principal executive officer and principal financial officer have concluded, based upon their evaluation of the registrant's disclosure controls and procedures as conducted within 90 days of the filing date of this report, that these disclosure controls and procedures provide reasonable assurance that material information required to be disclosed by the registrant in the report it files or submits on Form N-CSR is recorded, processed, summarized and reported, within the time periods specified in the Commission's rules and forms and that such material information is accumulated and communicated to the registrant's management, including its principal executive officer and principal financial officer, as appropriate, in order to allow timely decisions regarding required disclosure.
	(b) The registrant’s principal executive officer and principal financial officer are aware of no changes in the registrant’s internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.
ITEM 12.	EXHIBITS.
	(a)(1)	Code of Ethics for Principal Executive and Principal Financial Officers.
	(a)(2)	Certifications of principal executive officer and principal financial officer as required by Rule 30a-2(a) under the Investment Company Act of 1940.
	(a)(3)	Not applicable.
	(b)	Certifications of chief executive officer and chief financial officer as required by Rule 30a-2(b) under the Investment Company Act of 1940.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

SELIGMAN CAPITAL FUND, INC.

By:
	/S/ BRIAN T. ZINO
	Brian T. Zino
	President and Chief Executive Officer

Date: March 9, 2007

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By:
	/S/ BRIAN T. ZINO
	Brian T. Zino
	President and Chief Executive Officer

Date: March 9, 2007

By:
	/S/ LAWRENCE P.VOGEL
	Lawrence P. Vogel
	Vice President, Treasurer and Chief Financial Officer

Date: March 9, 2007

SELIGMAN CAPITAL FUND, INC.

EXHIBIT INDEX

(a)(1)	Code of Ethics for Principal Executive and Principal Financial Officers.
(a)(2)	Certifications of principal executive officer and principal financial officer as required by Rule 30a-2(a) under the Investment Company Act of 1940.
(b)	Certification of chief executive officer and chief financial officer as required by Rule 30a-2(b) of the Investment Company Act of 1940.