The American Funds Income Series
                         U.S. Government Securities Fund
                333 S. Hope Street, Los Angeles, California 90071
                   Telephone (213) 486-9200 Fax (213) 486-9455


77E: Legal Proceedings

The  Registrant,  Capital  Research and Management  Company("CRMC"),  its parent
company  and  certain  funds  advised  by CRMC are  named as  defendants  in two
purported  class  actions.  The complaints are quite similar and allege that the
defendants  failed to disclose  preferential  market timing  arrangements.  They
appear based entirely on publicly available information, including media reports
and regulatory filings relating primarily to other industry  participants.  Both
were filed with the U.S.  District Court,  Southern  District of New York (Foley
Square).  The first,  Ruehlman  v. AMCAP Fund et al, was filed on March 24, 2004
and the  other,  Barkov  v.  AMCAP  Fund et al,  on April 8,  2004.  Each of the
lawsuits is without merit and will be defended vigorously.