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 811-02631
-----------

Chestnut Street Exchange Fund
----------------------------------------------
(Exact name of registrant as specified in charter)

400 Bellevue Parkway
Wilmington, DE 19809
--------------------------------------
(Address of principal executive offices) (Zip code)

Edward J. Roach
400 Bellevue Parkway
Wilmington, DE 19809
--------------------------------------
(Name and address of agent for service)

registrant's telephone number, including area code: 302-792-2555
------------

Date of fiscal year end: December 31
-----------

Date of reporting period: December 31, 2004
-----------------

Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection, and policymaking roles.

A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. Section 3507.

ITEM 1. REPORTS TO STOCKHOLDERS.

The Report to Shareholders is attached herewith.

CHESTNUT STREET EXCHANGE FUND

(A CALIFORNIA LIMITED PARTNERSHIP)

Robert R. Fortune
Chairman

February 2, 2005
Fellow Partner:

Enclosed is the Annual Report of Chestnut Street Exchange Fund for the year
ended December 31, 2004.

Our Fund earned $5.65 per share of net investment income for a share
outstanding throughout 2004, compared to $4.61 per share earned in 2003. The
large increase in net investment income was attributable to a 15% increase in
2004 dividend income, amounting to over $800,000, of which $332,400 was a
special dividend from Microsoft Corp. The Microsoft dividend was equivalent to
approximately $0.36 per Fund share.

After providing for the January 2005 distribution, the net asset value per
partnership share at December 31, 2004 was $333.18. The net asset value at
September 30, 2004, the date of our last report, was $309.01.

During the fourth quarter of 2004, Motorola, Inc. distributed 31,847 shares
of Freescale Semiconductor, Inc. Class B Stock.

Additional information required by the Securities and Exchange Commission
regulations is enclosed.

Data on the equity markets, on certain holdings and on the performance of
our Fund since inception, including comparisons to leading stock market indices
appear in the accompanying Investment Adviser's Report.

Your comments or questions concerning Chestnut Street Exchange Fund are
welcomed.

Yours sincerely,

/s/ Robert R. Fortune

Robert R. Fortune

INVESTMENT ADVISER'S REPORT

MARKET REVIEW

US equity markets extended their strong November performance throughout
December to finish the fourth quarter up strongly. Falling oil prices and
generally benign economic releases combined with positive investor sentiment to
fuel the rally. Oil prices continued their heavy influence on the equity markets
in the fourth quarter. Investors have rightly worried that higher energy prices
would act as a tax on consumers and industrial companies and could drag down the
economy. During October oil peaked at roughly $54.25/barrel but retreated to the
low $40's by year-end on an increase in inventories. Stocks rallied as a result
in November and December. For the quarter, the S&P 500 Index returned 9.23%
while the Dow Jones Industrial Average rose 7.81%. Smaller stocks, as
represented by the Russell 2000 Index, and the technology-laden NASDAQ Index
gained 14.09% and 14.69%, respectively, indicating that investors have not yet
abandoned their penchant for more speculative assets.

For the fourth quarter, every sector of the S&P 500 had solid positive
returns. However, seven of ten S&P 500 sectors posted returns below the index
average. Economically sensitive stocks in the technology, consumer discretionary
and utility sectors were the best performers and were significantly better than
those in second place. Earnings prospects for the technology sector (+13.4%) did
not significantly improve but we believe investors returned to the sector for
its higher market sensitivity despite high valuations and weak fundamentals.
Evidence that the U.S. economic soft patch was over drove performance for
consumer discretionary stocks, which posted a 13.2% return for the period.
Energy stocks lagged during the quarter, with a return of 4.2%, as oil and gas
prices retreated during November and December. High energy prices continued to
translate into a boon for energy producers but investors began to take profits
in oil related issues based on the passing of peak prices. Health care stocks
continued to drag down the index as large capitalization pharmaceutical stocks
declined on continued bad news regarding the safety of popular name brand
prescription pain relief drugs. Merck continued its decline that started with
the September 30th announcement that Vioxx would be pulled from the market.
Pfizer was hit hard after a researcher recommended that its Celebrex pain
reliever be avoided for similar safety reasons. The health care sector managed a
gain of only 4.8% for the quarter, well behind the overall market.

During the quarter, small cap stocks led the markets with the Russell 2000
Index gaining 14.09%. By comparison, the Russell 1000 Index of large cap stocks
gained 9.79% and the Russell Mid Cap Index gained 13.66%. Value stocks
outperformed in the large cap sector but growth led the way in mid and small cap
arena. In all cases returns were similar. The Russell 1000 Value Index gained
10.38% while the Russell 1000 Growth Index rose 9.17%. In the mid cap space, The
Russell Mid-cap Value Index gained 13.46% for the quarter while the Russell
Mid-cap Growth Index gained 13.93%. Lastly, in the small cap universe, the
Russell 2000 Value Index rose 13.20% in the quarter while the Russell 2000
Growth Index gained 15.07%.

THE ECONOMY

Recent economic releases indicate that the economy is growing at a year
over year rate of 4% with a generally healthy labor market and contained
inflation. As we look forward, high energy prices remain a headwind for
consumers but increasing business spending should support the economic
expansion. In addition, the declining dollar should be marginally stimulative
for U.S. businesses. On the inflation front, overall inflation figures have
increased but core figures remain benign with the Consumer Price
2

INVESTMENT ADVISER'S REPORT (CONTINUED)

Index core inflation rate rising 2.2% year over year. Producer Price Inflation
is above where it was a year ago but it too remains controlled at the core
level, with the overall rate at 5.0% year over year and the core rate at 1.9%
year over year. We believe that the Fed's recent comments indicate they will
continue to tighten so we look for rising rates in the coming months.

OUTLOOK

In response to the improvement in the economic tone in the U.S., clarity on
the political front and moderating oil prices, stocks advanced strongly during
the 4th quarter. The consensus view on Wall Street is that 2005 will be another
relatively good year for U.S. equities. But in our view, a lot of good news is
reflected in current stock prices. We continue to believe there will be a
significant profit growth slowdown throughout 2005 as the impact of moderating
global demand, higher input prices and comparisons with very strong results last
year combine to curtail the pace of earnings growth. The consensus calls for
earnings growth of approximately 10% for 2005; we think it could be somewhat
lower. As for valuations, we continue to believe that they are generally fair in
the U.S. but there is little hope for market P/E multiple expansion from the
current level. As a result, we anticipate that the equity market will trade in a
range for the next several months, and perhaps beyond. Notwithstanding the
recent surge in small company stocks, we believe that large caps should
outperform as valuations between large and small cap stocks have converged.

PORTFOLIO REVIEW

For the quarter ended December 31st, the portfolio returned 8.57%. Despite
the strong absolute return, the portfolio underperformed the benchmark S&P 500
Index, which climbed 9.23% in the period. The underperformance for the period
leaves the portfolio significantly behind the S&P 500 for the year with a return
of 3.56%, compared to a return of 10.87% for the index.

As we have discussed on several occasions over the past two years, the
significant outperformance in the market place of smaller capitalization, higher
volatility stocks has had a negative impact on the relative performance of the
portfolio. The outperformance trend for smaller stocks has been so pronounced
over this period that, even within large cap indices, the smaller stocks have
significantly outperformed the larger stocks. This trend has contributed
significantly to the underperformance of the Portfolio as the S&P 500 Index has
considerably more exposure to smaller stocks. Unfortunately, this trend
re-emerged during the 4th quarter, hurting relative performance once again. We
continue to believe, however, that large cap companies with more stable earnings
will outperform in the investment environment we anticipate in 2005.

Performance for the two largest stocks in the portfolio, Johnson & Johnson
and Intel, contributed strongly to performance during the 4th quarter. Intel
rose 16.6%, partially reversing its abysmal year to date performance. The
rebound was not the result of any company specific news but was most likely due
to the general return of investors to more market sensitive stocks and the fact
that the stock was down so significantly year to date. J&J rose 12.6% on the
back of a strong third quarter earnings release that saw net income rise 13%
over the same period a year ago. This, combined with the well-publicized woes at
Merck kept investors relatively enthusiastic about the company's prospects.

On the negative side, Marsh & McLennan cost the Portfolio significantly as
the stock fell 28.1% in the quarter. The stock initially lost 25% of its market
capitalization on the day following

INVESTMENT ADVISER'S REPORT (CONTINUED)

anannouncement from New York Attorney General Eliot Spitzer's office that the
company was under investigation for various fraudulent practices. Since that
time, the stock has stabilized as it appears that the company will end up under
new management, is cooperating with the investigation and that the likely
settlement will allow it to survive. That being said, the business model has
changed and the company is unlikely to be as profitable going forward. The stock
now trades at a substantial discount to its normal valuation and we are inclined
to hold the position at this time.

For the year, the majority of the Portfolio's underperformance was
attributable to the Intel position as the stock declined in excess of 26% during
the year. Intel was one of the top performers in 2003 but lost approximately 28%
in 2004. While Intel is clearly the semiconductor industry leader, competitive
pressure has increased and the company's markets are becoming more cyclical. We
continue to believe that the stock is being re-rated and will likely trade at a
lower valuation than in the past.

Merck fell approximately 28% in 2004 due to well-publicized issues with its
hugely successful drug Vioxx. On the last day of the second quarter, Merck
announced that it was pulling Vioxx from the market for safety reasons. At this
stage, we believe that the dividend is reasonably secure and the stock trades at
approximately nine times earnings. With this effects of this news still priced
into the stock, it does not appear to be the right time to sell. We will,
however, continue to monitor the position and may look for opportunities to
exit. Continued competitive pressure from a lackluster pipeline, management that
does not seem to be aggressively addressing problems and likely law suits over
Vioxx may pressure returns for several years.

Portfolio activity in the fourth quarter was limited to using shares of
Intel and Cabot Microelectronics to meet redemption requests in-kind. Intel
remains the second largest holding in the portfolio at roughly 11% of the net
asset value. Despite the pullback from last year's high, the stock is up more
than 50% from 2003 lows. With highly cyclical earnings and increasing volatility
we believe that the stock should be reduced in the portfolio. Cabot Micro trades
at a premium to other specialty chemical stocks as a result of its tie to the
semiconductor industry. We believe that the consensus long-term growth estimate
of 25% is too high and therefore the stock is susceptible to underperforming as
a result.

INVESTMENT ADVISER'S REPORT (CONCLUDED)

PERFORMANCE COMPARISON

COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN CHESTNUT STREET
EXCHANGE FUND(1) VS. S&P 500 INDEX AND DOW JONES INDUSTRIAL AVERAGE INDEX(2)

(PERFORMANCE GRAPH)

The performance data represent past performance and should not be
considered indicative of future performance which will fluctuate with changes in
market conditions. These performance fluctuations will cause an investor's
shares, when redeemed, to be worth more or less than their original cost.

In addition, the data does not reflect the deduction of taxes that a
shareholder would pay on distributions or redemption of Fund shares.

FOR THE PERIOD ENDED DECEMBER 31, 2004

<Table>
<Caption>
AVERAGE ANNUAL TOTAL RETURN
-------------------------------------------------
SINCE
3 MONTH 1 YEAR 3 YEAR 5 YEAR 10 YEAR INCEPTION(3)
------- ------ ------ ------ ------- ------------

Chestnut Street Exchange Fund.......... 8.58% 3.56% 0.85% -0.72% 10.30% 12.69%
S&P 500 Index.......................... 9.23% 10.87% 3.59% -2.30% 12.07% 12.65%
Dow Jones Industrial Average Index..... 7.59% 5.31% 4.71% 0.66% 13.08% 12.80%
</Table>

- ---------------

(1) The chart assumes a hypothetical $10,000 initial investment in the Fund made
on January 1, 1995 and reflects Fund expenses. Investors should note that
the Fund is an aggressively managed mutual fund while the indices are
unmanaged, do not incur expenses and are not available for investment.

(2) Results of index performance are presented for general comparative purposes.

(3) Cumulative since inception total returns were 2,772.63%, 2,705.30% and
2,813.65% for the Chestnut Street Exchange Fund, the S&P 500 Index and the
Dow Jones Industrial Average Index, respectively for the period December 29,
1976 (inception) to December 31, 2004.

January 30, 2005 BLACKROCK INVESTMENT MANAGEMENT CORP.
5

FUND EXPENSES

As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs, and (2) ongoing costs, including management fees; and other expenses.
These examples are intended to help you understand your ongoing costs (in
dollars) of investing in the Fund and to compare these costs with the ongoing
costs of investing in other mutual funds.

These examples are based on an investment of $1,000 invested at the
beginning of the period and held for the entire six months ended December 31,
2004.

ACTUAL EXPENSES

The first line of the accompanying table below provides information about
actual account values and actual expenses. You may use the information in this
line, together with the amount you invested, to estimate the expense that you
paid over the period. Simply divide your account value by $1,000 (for example,
an $8,600 account value divided by $1,000 = 8.6), then multiply the result by
the number in the first line under the heading entitled "Expenses Paid During
Period" to estimate the expenses you paid on your account during this period.

HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES

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

Please note that the expenses shown in the accompanying table are meant to
highlight your ongoing costs only and do not reflect any transactional costs.
Therefore, the second line of the accompanying table is useful in comparing
ongoing costs only, and will not help you determine the relative total costs of
owning different funds.

CHESTNUT STREET EXCHANGE FUND

<Table>
<Caption>
EXPENSES PAID
BEGINNING ENDING DURING SIX
ACCOUNT VALUE ACCOUNT VALUE MONTHS ENDING
JULY 1, 2004 DECEMBER 31, 2004 DECEMBER 31, 2004*
------------- ----------------- ------------------

Actual................................. $1,000.00 $1,025.50 $2.14
Hypothetical (5% return before
expenses)............................ $1,000.00 $1,023.03+ $2.14
</Table>

- ---------------

* Expenses are calculated using the Fund's annualized expense ratio, which
represents the ongoing expenses as a percentage of net assets for the six
months ended 12/31/04. Expenses are calculated by multiplying the annualized
expense ratio by the average account value for such period; then multiplying
the result by the number of days in the most recent fiscal half year; and
then dividing that result by the number of days in the fiscal year. The
expense ratio for the most recent fiscal half year may differ from the
expense ratio based on one-year data in the Financial Highlights. The
annualized expense ratio for the period was 0.42%.

+ Hypothetical expenses are based on the Fund's actual annualized expense ratios
and an assumed rate of return of 5% per year before expenses.

CHESTNUT STREET EXCHANGE FUND

(A CALIFORNIA LIMITED PARTNERSHIP)

STATEMENT OF NET ASSETS

DECEMBER 31, 2004

<Table>
<Caption>
SHARES VALUE
- ---------- ------------

COMMON STOCKS--98.6%
BASICS--3.8%
106,123 Air Products & Chemicals, Inc. .... $ 6,151,950
90,747 Cabot Corp. ....................... 3,510,094
44,695* Cabot Microelectronics Corp. ...... 1,790,035
------------
11,452,079
------------
CAPITAL EQUIPMENT--7.6%
95,519 Emerson Electric Co. .............. 6,695,882
384,000 General Electric Co. .............. 14,016,000
41,300 Pitney Bowes, Inc. ................ 1,911,364
------------
22,623,246
------------
CONSUMER CYCLICALS--6.6%
105,300* Comcast Corp. Class A.............. 3,504,384
136,206 Disney (Walt) Co................... 3,786,527
152,000 3M Co. ............................ 12,474,640
------------
19,765,551
------------
ENERGY--4.9%
44,280 BP plc ADR......................... 2,585,952
155,296 Exxon Mobil Corp. ................. 7,960,473
60,432 Schlumberger, Ltd. ................ 4,045,922
------------
14,592,347
------------
FINANCIAL--24.1%
117,433 American Express Co. .............. 6,619,698
30,000 American International Group,
Inc. ............................ 1,970,100
416,572 Bank of America Corp. ............. 19,574,718
70,000 Fannie Mae......................... 4,984,700
116,352 Marsh & McLennan Companies,
Inc. ............................ 3,827,981
50,647 Moody's Corporation................ 4,398,692
148,000 J.P. Morgan Chase & Co. ........... 5,773,480
97,200 Wachovia Corp. .................... 5,112,720
314,532 Wells Fargo & Co. ................. 19,548,164
------------
71,810,253
------------
HEALTHCARE--26.1%
243,928 Abbott Laboratories, Inc. ......... 11,379,241
68,547 Baxter International, Inc. ........ 2,367,613
24,392* Hospira, Inc. ..................... 817,132
79,516 IMS Health, Inc. .................. 1,845,566
747,935 Johnson & Johnson, Inc. ........... 47,434,038
48,448* Medco Health Solutions, Inc. ...... 2,015,437
368,553 Merck & Company, Inc. ............. 11,845,293
------------
77,704,320
------------
</Table>

<Table>
<Caption>
SHARES VALUE
- ---------- ------------

RETAIL--0.8%
57,133 Albertson's, Inc. ................. $ 1,364,336
47,000* Safeway, Inc. ..................... 927,780
------------
2,292,116
------------
STAPLES--3.7%
234,213 Coca Cola (The) Co. ............... 9,750,287
48,000 Sara Lee Corp. .................... 1,158,720
------------
10,909,007
------------
TECHNOLOGY--16.1%
31,847* Freescale Semiconductor, Inc.,
Class B.......................... 584,711
61,097 Hewlett-Packard Co. ............... 1,281,204
41,884 International Business Machines
Corp. ........................... 4,128,925
1,418,484 Intel Corp. ....................... 33,178,341
110,800 Microsoft Corp. ................... 2,959,468
288,439 Motorola, Inc. .................... 4,961,151
78,000* Oracle Corp. ...................... 1,070,160
------------
48,163,960
------------
TRANSPORTATION--2.8%
119,796 Burlington Northern Santa Fe
Corp. ........................... 5,667,549
40,000 Union Pacific Corp. ............... 2,690,000
------------
8,357,549
------------
UTILITIES--2.1%
151,713 Verizon Communications, Inc. ...... 6,145,894
------------
Total Common Stocks
(Cost: $37,677,022).......... 293,816,322
------------
</Table>

See Accompanying Notes to Financial Statements.
7

STATEMENT OF NET ASSETS (CONCLUDED)
<Table>
<Caption>
PAR VALUE
- ---------- ------------

SHORT-TERM OBLIGATIONS--2.0%
$6,100,000 Federal Home Loan Mortgage Corp.
01/03/05, 1.00%
(Cost: $6,099,661)............... $ 6,099,661
------------
</Table>

<Table>

TOTAL INVESTMENT IN SECURITIES
(Cost: $43,776,683)............ 100.6% 299,915,983
Assets in excess of other
liabilities.................... 0.1% 399,569
Distributions payable............ (0.7%) (2,067,250)
Payable to:
Investment Advisors (Note B)... (0.0%) (83,808)
Managing Directors (Note B).... (0.0%) (556)
Custodian (Note B)............. (0.0%) (2,102)
Transfer Agent (Note B)........ (0.0%) (2,363)
----- ------------
NET ASSETS (Applicable to 894,898
partnership shares
outstanding)................... 100.0% $298,159,473
===== ============
NET ASSET VALUE PER SHARE........ $ 333.18
============
NET ASSETS APPLICABLE TO SHARES
OWNED BY:
Limited partners
(890,068 shares)............... $296,550,228
Managing general partners (4,830
shares)........................ 1,609,245
------------
Total net assets (894,898
shares)........................ $298,159,473
============
</Table>

- ---------------
* Non-Income Producing

ADR-American Depositary Receipt

PORTFOLIO HOLDINGS SUMMARY TABLE

<Table>
<Caption>
% OF NET
SECURITY TYPE/INDUSTRY ASSETS VALUE
- ----------------------------- -------- ------------

COMMON STOCKS:
Basics..................... 3.8% $ 11,452,079
Capital Equipment.......... 7.6% 22,623,246
Consumer Cyclicals......... 6.6% 19,765,551
Energy..................... 4.9% 14,592,347
Financial.................. 24.1% 71,810,253
Healthcare................. 26.1% 77,704,320
Retail..................... 0.8% 2,292,116
Staples.................... 3.7% 10,909,007
Technology................. 16.1% 48,163,960
Transportation............. 2.8% 8,357,549
Utilities.................. 2.1% 6,145,894
SHORT-TERM INVESTMENTS....... 2.0% 6,099,661

LIABILITIES IN EXCESS OF
OTHER ASSETS............... -0.6% (1,756,510)
----- ------------
Net Assets--100.0%......... 100.0% $298,159,473
===== ============
</Table>

See Accompanying Notes to Financial Statements.
8

CHESTNUT STREET EXCHANGE FUND

(A CALIFORNIA LIMITED PARTNERSHIP)

STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 2004

<Table>

INVESTMENT INCOME
Dividends (Net of foreign taxes withheld
of $1,993)............................ $ 6,260,716
Interest................................ 67,035
-----------
Total investment income........... 6,327,751
-----------
Expenses
Investment advisory fee................. 974,813
Managing general partners' compensation
and officer's salary.................. 85,200
Legal................................... 79,000
Custodian............................... 25,397
Printing................................ 20,000
Audit................................... 17,000
Transfer agent.......................... 15,300
Miscellaneous........................... 8,680
Insurance............................... 4,684
-----------
Total expenses...................... 1,230,074
-----------
Net investment income............. 5,097,677
-----------
REALIZED AND UNREALIZED GAIN(LOSS) ON
INVESTMENTS:
Realized loss on sale of investment
securities (for federal tax purposes
net loss is $221,201)................. (221,201)
Realized gain from security
transactions: distributed upon
redemption of partnership shares...... 6,669,877
Unrealized appreciation of investments:
Beginning of year....... $257,484,371
End of year............. 256,139,300
------------
Net change in unrealized
appreciation.................... (1,345,071)
-----------
Net realized and unrealized gain
on investments.................. 5,103,605
-----------
Net increase in net assets resulting
from operations..................... $10,201,282
===========
</Table>

STATEMENTS OF CHANGES IN NET ASSETS
YEARS ENDED DECEMBER 31,

<Table>
<Caption>
2004 2003
------------ ------------

INCREASE/(DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income.. $ 5,097,677 $ 4,341,303
Net realized loss from
security transactions
(for federal income
tax purposes net loss
is $221,201 and
$3,705,400).......... (221,201) (3,705,400)
Excess of market value
over book value of
securities
distributed upon
redemption of
partnership shares... 6,669,877 25,691,943
Increase/(decrease) in
unrealized
appreciation of
investments.......... (1,345,071) 38,197,777
------------ ------------
Increase in net assets
resulting from
operations........... 10,201,282 64,525,623
------------ ------------
DISTRIBUTIONS TO PARTNERS
FROM:
Net investment
income............... (5,103,069) (4,330,721)
------------ ------------
CAPITAL SHARE TRANSACTIONS:
Net asset value of
1,337 and 1,390
shares issued in lieu
of cash
distributions........ 429,848 391,979
Cost of 21,496 and
100,338 shares
repurchased.......... (6,952,068) (28,990,104)
------------ ------------
Decrease in net assets
from capital share
transactions......... (6,522,220) (28,598,125)
------------ ------------
Total
increase/(decrease)
in net assets........ (1,424,007) 31,596,777
NET ASSETS:
Beginning of year...... 299,583,480 267,986,703
------------ ------------
End of year*........... $298,159,473 $299,583,480
============ ============
</Table>

- ---------------

* Includes undistributed net investment income of $6,208 and $11,600,
respectively.

See Accompanying Notes to Financial Statements.
9

CHESTNUT STREET EXCHANGE FUND

(A CALIFORNIA LIMITED PARTNERSHIP)

FINANCIAL HIGHLIGHTS

(FOR A SHARE OF THE FUND OUTSTANDING THROUGHOUT EACH YEAR)

<Table>
<Caption>
YEARS ENDED DECEMBER 31,
----------------------------------------------------
2004 2003 2002 2001 2000
-------- -------- -------- -------- --------

Net Asset Value, Beginning of Year....... $ 327.39 $ 264.29 $ 340.39 $ 362.68 $ 369.83
-------- -------- -------- -------- --------
Income From Investment Operations:
Net investment income.................. 5.65 4.61 3.99 3.79 3.76
Net gain (loss) on securities (both
realized and unrealized)............. 5.80 63.09 (76.09) (22.30) (7.15)
-------- -------- -------- -------- --------
Total from investment
operations...................... 11.45 67.70 (72.10) (18.51) (3.39)
-------- -------- -------- -------- --------
Less Distributions:
From net investment income............. (5.66) (4.60) (4.00) (3.78) (3.76)
From realized gains.................... 0.00 0.00 0.00 0.00 0.00
-------- -------- -------- -------- --------
Total distributions............... (5.66) (4.60) (4.00) (3.78) (3.76)
-------- -------- -------- -------- --------
Net Asset Value, End of Year............. $ 333.18 $ 327.39 $ 264.29 $ 340.39 $ 362.68
======== ======== ======== ======== ========
Total Return............................. 3.56% 25.78% (21.25)% (5.05)% (0.92)%
======== ======== ======== ======== ========
Ratios/Supplemental Data:
Net Assets, End of Year (000's)........ $298,159 $299,583 $267,987 $360,055 $398,580
Ratios to average net assets:
Operating expenses................... 0.42% 0.43% 0.41% 0.39% 0.38%
Net investment income................ 1.75% 1.57% 1.31% 1.12% 0.96%
Portfolio Turnover Rate................ 0.47% 1.18% 0.98% 0.00% 1.77%
</Table>

See Accompanying Notes to Financial Statements.
10

NOTES TO FINANCIAL STATEMENTS

(A) ORGANIZATION

Chestnut Street Exchange Fund (the "Fund"), a California Limited
Partnership, is registered under the Investment Company Act of 1940, as
amended, as a diversified open-end management company. The Fund's
investment objective is to seek long-term growth of capital and,
secondarily, current income. Effective January 1, 1998, the Fund changed
its status for tax purposes from a partnership to a regulated investment
company. The change resulted from the enactment of the "Publicly Traded
Partnership" rules to the Internal Revenue Code in 1987, which first
applied to the Fund after 1997.

(B) SIGNIFICANT ACCOUNTING PRINCIPLES

The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities at the date of the financial statements
and the reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates. The following is
a summary of significant accounting policies followed by the Fund in the
preparation of its financial statements.

SECURITY VALUATIONS

Securities listed or traded on an exchange are valued generally at the
last sales price as of the close of the customary trading session on the
exchange where the security is principally traded, or lacking any sales
on a particular day, valued at the closing bid price on that day. Each
security reported on the NASDAQ Stock Market, Inc. is valued at the
NASDAQ Official Close Price. Securities for which market quotations are
not readily available or are believed to be unreliable are valued at
fair value as determined in good faith using methods approved by the
Managing General Partners. Short-term obligations having 60 days or less
to maturity are valued at amortized cost which approximates market
value.

SECURITIES TRANSACTIONS AND INVESTMENT INCOME

Securities transactions are accounted for on a trade date basis.
Realized gains and losses on sales and redemptions in kind are computed
on the basis of specific identification for both financial reporting and
income tax purposes. For securities exchanged into the Fund at the
Fund's inception in 1976, the cost for financial reporting purposes is
the value of those securities as used in the Exchange. The cost, for
income tax purposes, of securities exchanged into the Fund is the tax
basis of the individual investor. Interest income is recorded on the
accrual basis. Dividend income is recorded on the ex-dividend date.

DISTRIBUTIONS

Distributions from net investment income are paid quarterly and recorded
on the ex-dividend date. Distributions of capital gains, if any, are
paid annually and recorded on the ex-dividend date.

FEDERAL INCOME TAXES

The Fund intends to comply with the requirements of the Internal Revenue
Code necessary to qualify as a regulated investment company and, as
such, will not be subject to federal income taxes on otherwise taxable
income which is distributed to shareholders. The Fund may elect not to
distribute long-term capital gains to shareholders, but retain these
gains and pay the income tax at the applicable corporate income tax
rate. If the Fund elects to pay the tax on long-term capital gains, on
the last day of the year the tax is paid, the partners are entitled to a
proportionate credit for the tax payment and the tax basis of their
shares is increased by the amount of undistributed gains less the tax
paid by the Fund. At December 31, 2004, the Fund had a capital loss
carryforward of $6,214,861, of which $2,288,260 expires December 31,
2010, $3,705,400 expires December 31, 2011 and $221,201 expires December
31, 2012. Therefore, no provision for federal income taxes is recorded
in the financial statements.

PNC Bank and BlackRock Institutional Management Corporation ("BIMC"), a
majority-owned subsidiary of PNC Bank, are co-investment advisers to the
Fund pursuant to an Advisory Agreement dated January 1, 1998. In June 1998,
PNC Bank and BIMC restructured their operations and BlackRock Financial
Management, Inc. ("BFM"), a majority-owned subsidiary of PNC Bank, assumed
the rights and obligations of PNC Bank under the Advisory Agreement. The
Fund pays BIMC an investment advisory fee for advisory, accounting and
administrative services of BIMC and BFM.

The Advisory Agreement provides for a fee at the annual rate of 4/10ths of
1% of the first $100,000,000 of the Fund's average daily net assets plus
3/10ths of 1% of net assets exceeding $100,000,000.

PFPC Inc., an affiliate of PNC Bank, serves as the Fund's transfer and
dividend disbursing agent. As compensation for these services, PFPC Inc. is
entitled to a fee equal to $12,500 per year plus related out-of-pocket
expense.

PFPC Trust Company, a subsidiary of PFPC Inc, serves as the Fund's
custodian. As compensation for its services as custodian, PFPC Trust
Company is entitled to a fee computed at an annual rate of .0065% of the
Fund's average gross assets plus additional fees based on the number and
type of transactions.

The managing general partners each receive a fixed fee as compensation for
their services. In addition, the President, Treasurer and Chief Compliance
Officer receives additional payments for overseeing the Fund's activities,
including compliance with federal securities laws, and reimbursements of
related expenses. Total payments to or for the managing general partners
amounted to $85,200.

Legal fees amounting to $79,000 were paid to Drinker, Biddle & Reath LLP.
Mr. Malloy, Secretary of the Fund, is a partner of that firm.

(D) INVESTMENT TRANSACTIONS

Purchases and sales of investment securities (excluding short-term
obligations) were $4,409,074 and $1,342,769, respectively, for the year
ended December 31, 2004.

(E) NET ASSETS

At December 31, 2004, net assets consisted of:

<Table>

Undistributed net investment income......................... $ 6,208
Accumulated net realized losses on securities............... (6,214,861)
Net unrealized appreciation of investments (book basis)..... 256,139,300
Other capital -- paid-in or reinvested...................... 48,228,826
------------
$298,159,473
============
</Table>

(F) DISTRIBUTIONS TO SHAREHOLDERS

Net investment income and capital gain distributions are determined in
accordance with federal income tax regulations, which may differ from
accounting principles generally accepted in the United States of America.
The primary difference applicable to the Fund's distributions is the
requirement to pass through 40% of its aggregate expenses to the partners
of the Fund. This is required because the Fund has fewer than 500 partners
and does not continuously offer shares. The partners treat this
pass-through of expenses as a distribution of net investment income and a
corresponding miscellaneous itemized deduction of investment expense.

The tax character of distributions paid during 2004 and 2003 was as
follows:

<Table>
<Caption>
2004 2003
---------- ----------

Ordinary income............................................. $5,595,098 $4,807,208
Investment expense.......................................... (492,029) (476,487)
---------- ----------
$5,103,069 $4,330,721
========== ==========
</Table>

(G) TAX MATTERS

At December 31, 2004, the components of distributable earnings on a tax
basis were as follows:

<Table>

Undistributed ordinary income (before tax allocation
described above).......................................... $ 6,208
Capital loss carryover...................................... (6,214,861)
Net unrealized appreciation of investments.................. 261,243,370
------------
$255,034,717
============
</Table>

The cost of investments for federal income tax purposes at December 31,
2004 was $38,672,613. The unrealized appreciation (an excess of value over
cost) was $261,243,370. The difference between book basis and tax basis of
investments is attributable to the use of the individual partners' tax
basis for those securities contributed to the Fund at its inception, as
required by law.

On December 31, 2004 undistributed net realized gains (losses) on
securities was decreased by $6,669,877 and additional paid in capital was
increased by $6,669,877 due to permanent differing book and tax treatment
of realized gains and losses. Net assets of the Fund were unaffected by
this change.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Partners
Chestnut Street Exchange Fund

We have audited the accompanying statement of net assets of Chestnut Street
Exchange Fund (the "Fund"), as of December 31, 2004, and the related statement
of operations for the year then ended, and the statement of changes in net
assets and the financial highlights for the each of the two years in the period
then ended. 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. The financial highlights for each of the three years in the period ended
December 31, 2002 were audited by other auditors whose report dated February 14,
2003 expressed an unqualified opinion on those financial highlights.

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. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included confirmation of
securities owned as of December 31, 2004 by correspondence with the custodian.
An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. 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
Chestnut Street Exchange Fund as of December 31, 2004, the results of its
operations for the year then ended, and the changes in its net assets and the
financial highlights for each of the two years in the period then ended, in
conformity with accounting principles generally accepted in the United States of
America.

Briggs, Bunting & Dougherty, LLP

Philadelphia, Pennsylvania
January 26, 2005

ADDITIONAL INFORMATION

CHANGE OF INDEPENDENT AUDITORS

PricewaterhouseCoopers LLP ("PwC"), the independent auditors to Chestnut Street
Exchange Fund (the "Registrant"), have been retained as an internal audit
supporting service provider by The PNC Financial Services Group, Inc. ("PNC"),
an affiliate of the Registrant's investment adviser and certain other of its
service providers. In order to provide certain contemplated services to PNC and
its affiliates in the future, which would cause PwC to no longer be independent
with respect to the Registrant, PwC informed the Registrant on September 8, 2003
that it would decline to stand to serve as Independent auditors to the
Registrant as of October 29, 2003.

PwC's reports on the Registrant's financial statements for the fiscal year ended
December 31, 2002 contained no adverse opinion or disclaimer of opinion nor were
they qualified or modified as to uncertainty, audit scope or accounting
principles. During the Registrant's fiscal year ended December 31, 2002, (I)
there were no disagreements with PwC on any matter of accounting principles or
practices, financial statement disclosure or auditing scope or procedure, which
disagreements, if not resolved to the satisfaction of PwC, would have caused it
to make reference to the subject matter of the disagreements in connection with
its reports on the Registrant's financial statements for such years, and (ii)
there were no "reportable events" of the kind described in item 304(a)(1)(v) of
Regulation S-K under the Securities Exchange Act of 1934, as amended.

On December 18, 2003, the Registrant by action of its Managing General Partners
upon the recommendation of its Audit Committee engaged Briggs Bunting &
Dougherty LLP as the independent auditors to audit the Registrant's financial
statements for the fiscal year ending December 31, 2003. During the Registrant's
fiscal year ended December 31, 2002, neither the Registrant, its portfolio nor
anyone on their behalf has consulted Briggs Bunting & Dougherty LLP on items
which (I) concerned the application of accounting principles to a specified
transaction, either completed or proposed, or the type of audit opinion that
might be rendered on the Registrant's financial statements or (ii) concerned the
subject or a disagreement (as defined in paragraph (a)(1)(iv) of Item 304 of
Regulation S-K) or reportable events (as described in paragraph (a)(1)(v) of
said Item 304).
- ------------------------------

The above information is required to be included in our Annual Report to
Partners for two years following a change of independent auditors in December
2003.

OTHER MATTERS

A description of the Fund's Proxy Voting Policies and Procedures as well as
information regarding the voting of proxies relating to portfolio securities for
the most recent 12-month period ended June 30, 2004, are available upon request
and without charge by calling (800) 852-4750 or by visiting the Securities and
Exchange Commission's ("SEC's") website at http://www.sec.gov.

The Fund files its complete schedule of portfolio holdings with the SEC for the
first and third quarters of each fiscal year on Form N-Q. The Fund's Forms N-Q
are available on the SEC's website at http://www.sec.gov. The Fund's Forms N-Q
may be reviewed and copied at the SEC's Public Reference Room in Washington,
D.C. Information about the Public Reference Room may be obtained by calling
(800) SEC-0330.

INFORMATION ON THE MANAGING GENERAL
PARTNERS AND OFFICERS OF THE FUND

The list below provides certain information about the identity and business
experience of the Managing General Partners and officers of the Fund. The Fund's
Statement of Additional information includes additional information about the
Fund's Managing General Partners, which may be obtained from the Fund free of
charge by calling 1-800-852-4750.

TERM OF OFFICE: The Fund's partnership agreement provides that each Managing
General Partner holds officer until the earliest of (a) the election of his
successor; or (b) the date a Managing General Partner dies, resigns, becomes
insane, is adjudicated a bankrupt or is removed by a majority of the partners.
The officers of the Fund are elected by the Managing General Partners and each
officer holds office for one year or until he or she shall resign or be removed
or until his or her successor is elected and qualified.

<Table>
<Caption>
NUMBER OF
PORTFOLIOS
POSITION IN FUND OTHER(2)
WITH THE PRINCIPAL COMPLEX(1) DIRECTORSHIPS
FUND AND OCCUPATIONS DURING OVERSEEN BY HELD BY
LENGTH OF PAST 5 YEARS AND MANAGING MANAGING
NAME, ADDRESS AND AGE TIME SERVED CURRENT AFFILIATIONS GENERAL PARTNERS GENERAL PARTNER
- --------------------- --------------- --------------------------------- ---------------- ---------------

INTERESTED MANAGING GENERAL
PARTNERS
Richard C. Caldwell Managing Advisory Director, PNC Florida, 1 None
3601 Ocean Drive General Partner FSB; Advisory Director in
Vero Beach, FL 32963 since 1997 Philadelphia and Southern New
Age: 60 Jersey region for PNC Bank;
Consultant for PNC Florida;
Chairman, Florida Advisory
Council; formerly, President and
Chief Executive Officer, PNC Bank
FSB from May 1998 until July
1999; Director, JLC, Inc. since
February 1996 (investment holding
company); Director, DR Inc. since
April 1994 (investment holding
company).
Edward J. Roach* Managing Certified Public Accountant; Vice 1 None
400 Bellevue Parkway General Partner Chairman of the Board, Fox Chase
Wilmington, DE 19809 since 2000, Cancer Center; President and
Age: 80 Chief Treasurer of 1 other investment
Compliance company advised by BIMC;
Officer since Director, The Bradford Funds,
2004, President Inc. until 2000.
since 2002,
Treasurer since
1981
</Table>

DISINTERESTED MANAGING
GENERAL PARTNERS
Robert R. Fortune Managing Financial Consultant; Member of 1 None
2920 Ritter Lane General Partner the Financial Executives
Allentown, PA 18104 since 1976, Institute and American Institute
Age: 88 Chairman since of Certified Public Accountants.
1994
Langhorne B. Smith Managing Retired. President and Director, 1 None
7036 Goshen Road General Partner The Sandridge Corporation
Newtown Square, PA 19073 since 1997 (private investment company);
Age: 68 Director, Claneil Enterprises,
Inc. (private investment company)
David R. Wilmerding, Jr. Managing Chairman, Wilmerding & Associates 44 None
One Tower Bridge General Partner (investment advisers) since
100 Front Street since 1976 February 1989; Director, Beaver
Suite 1430 Management Corporation; Director,
West Conshohocken, PA 19428 Mutual Fire Marine & Inland
Age: 69 Insurance Co., Inc; Director,
People First, Inc. (unitary
savings and loan holding
company).
OFFICER
Michael P. Malloy Secretary since Secretary of the Chestnut Street N/A N/A
Drinker Biddle & Reath LLP 2001 Exchange Fund; Partner in the law
One Logan Square firm of Drinker Biddle & Reath
Philadelphia, PA 19103 LLP.
Age: 45
</Table>

* Messrs. Caldwell and Roach are "interested persons" of the Fund as that term
is defined in the Investment Company Act of 1940 ("1940 Act"). Mr. Caldwell
owns stock of an affiliate of the adviser and Mr. Roach is an employee of
the Fund.

(1) A Fund Complex means two or more investment companies that hold themselves
out to investors as related companies for purposes of investment and
investor services, or have a common investment adviser or have an investment
adviser that is an affiliated person of the investment adviser of any of the
other investment companies. David R. Wilmerding, Jr. also serves as a
Trustee of the BlackRock Funds.

(2) Directorships of companies required to report to the Securities and Exchange
Commission under the Securities Exchange Act of 1934, as amended (i.e.,
"public companies") or other investment companies registered under the 1940
Act.

- ---------------------------------------------------
- ---------------------------------------------------
MANAGING GENERAL PARTNERS

Richard C. Caldwell
Robert R. Fortune
Edward J. Roach
Langhorne B. Smith
David R. Wilmerding, Jr.

INVESTMENT ADVISERS

BlackRock Financial Management, Inc.
and
BlackRock Institutional
Management Corporation
100 Bellevue Parkway
Wilmington, Delaware 19809

TRANSFER AGENT

PFPC Inc.
P.O. Box 8950
Wilmington, Delaware 19899
(800) 852-4750
- ---------------------------------------------------
- ---------------------------------------------------
- ---------------------------------------------------
- ---------------------------------------------------

[CHESTNUT STREET EXCHANGE FUND LOGO]

ANNUAL REPORT
DECEMBER 31, 2004

CHESTNUT STREET EXCHANGE
FUND

400 Bellevue Parkway
Wilmington, Delaware 19809
(302) 792-2555
Edward J. Roach, President & Treasurer
- ---------------------------------------------------
- ---------------------------------------------------

ITEM 2. CODE OF ETHICS.

(a) The registrant, as of the end of the period covered by this report,
has adopted a code of ethics that applies to the registrant's
principal executive officer, principal financial officer, principal
accounting officer or controller, or persons performing similar
functions, regardless of whether these individuals are employed by
the registrant or a third party.

(c) There have been no amendments, during the period covered by this
report, to a provision of the code of ethics that applies to the
registrant's principal executive officer, principal financial
officer, principal accounting officer or controller, or persons
performing similar functions, regardless of whether these
individuals are employed by the registrant or a third party, and
that relates to any element of the code of ethics description.

(d) The registrant has not granted any waivers, including an implicit
waiver, from a provision of the code of ethics that applies to the
registrant's principal executive officer, principal financial
officer, principal accounting officer or controller, or persons
performing similar functions, regardless of whether these
individuals are employed by the registrant or a third party, that
relates to one or more of the items set forth in paragraph (b) of
this item's instructions.

(f) The registrants Code of Ethics is attached as an Exhibit hereto.

ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.

The registrant's board of managing general partners has determined that the
registrant has at least one "audit committee financial expert" (as defined in
Item 3 of Form N-CSR) serving on its audit committee. Langhorne B. Smith is the
"audit committee financial expert" and is "independent" (as each item is defined
in Item 3 of Form N-CSR).

ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

Audit Fees

(a) The aggregate fees billed for each of the last two fiscal years for
professional services rendered by the principal accountant for the
audit of the registrant's annual financial statements or services
that are normally provided by the accountant in connection with
statutory and regulatory filings or engagements for those fiscal
years are $17,500 for 2003 and $20,400 for 2004.

Audit-Related Fees

(b) The aggregate fees billed in each of the last two fiscal years for
assurance and related services by the principal accountant that are
reasonably related to the performance of the audit of the

registrant's financial statements and are not reported under
paragraph (a) of this Item are $0 for 2003 and $0 for 2004.

Tax Fees

(c) The aggregate fees billed in each of the last two fiscal years for
professional services rendered by the principal accountant for tax
compliance, tax advice, and tax planning are $0 for 2003 and $0 for
2004.

All Other Fees

(d) The aggregate fees billed in each of the last two fiscal years for
products and services provided by the principal accountant, other
than the services reported in paragraphs (a) through (c) of this
Item are $0 for 2003 and $0 for 2004.

(e)(1) Disclose the audit committee's pre-approval policies and procedures
described in paragraph (c)(7) of Rule 2-01 of Regulation S-X.

The Audit Committee does not have pre-approved policies and procedures.
Instead, the Audit Committee approves on a case-by-case basis each audit
or non-audit service before the accountant is engaged by the Registrant.

(e)(2) The percentage of services described in each of paragraphs (b)
through (d) of this Item that were approved by the audit committee
pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X
are as follows:

(b) Not applicable.

(d) Not applicable.

(f) The percentage of hours expended on the principal accountant's
engagement to audit the registrant's financial statements for the
most recent fiscal year that were attributed to work performed by
persons other than the principal accountant's full-time, permanent
employees was 0%.

(g) The aggregate non-audit fees billed by the registrant's accountant
for services rendered to the registrant, and rendered to 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 any entity controlling,
controlled by, or under common control with the adviser that
provides ongoing services to the registrant for each of the last two
fiscal years of the registrant was $0 for 2003 and $0 for 2004.

(h) Not applicable.

ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.

Not applicable.

ITEM 6. SCHEDULE OF INVESTMENTS

Schedule of Investments in securities of unaffiliated issuers as of the close of
the reporting period is included as part of the report to shareholders filed
under Item 1 of this form.

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 yet 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.

There have been no material changes to the procedures by which the shareholders
may recommend nominees to the registrant's board of directors, where those
changes were implemented after the registrant last provided disclosure in
response to the requirements of Item 7(d)(2)(ii)(G) of Schedule 14A (17 CFR
240.14a-101), or this Item.

ITEM 11. CONTROLS AND PROCEDURES.

(a) The registrant's principal executive and principal financial
officers, or persons performing similar functions, have concluded
that the registrant's disclosure controls and procedures (as defined
in Rule 30a-3(c) under the Investment Company Act of 1940, as
amended (the "1940 Act") (17 CFR 270.30a-3(c))) are effective, as of
a date within 90 days of the filing date of the report that includes
the disclosure required by this paragraph, based on their evaluation
of these controls and procedures required by Rule 30a-3(b) under the
1940 Act (17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b)
under the Securities Exchange Act of 1934, as amended (17 CFR
240.13a-15(b) or 240.15d-15(b)).

(b) There were no changes in the registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the 1940 Act
(17 CFR 270.30a-3(d)) that occurred during the registrant's 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, or any amendment thereto, that is the subject of
disclosure required by Item 2 is attached hereto.

(a)(2) Certifications pursuant to Rule 30a-2(a) under the 1940 Act and
Section 302 of the Sarbanes-Oxley Act of 2002 are attached hereto.

(a)(3) Not applicable.

(b) Certifications pursuant to Rule 30a-2(b) under the 1940 Act and
Section 906 of the Sarbanes-Oxley Act of 2002 are attached hereto.

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.

(registrant) Chestnut Street Exchange Fund
--------------------------------------------------------------------

By (Signature and Title)* /s/ Edward J. Roach
-------------------------------------------------------
Edward J. Roach, President & Treasurer
(principal executive officer & principal financial
officer)

Date March 7, 2005
--------------------------------------------------------------------------

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.

Date March 7, 2005
----------------------------------------------------------------------------

* Print the name and title of each signing officer under his or her signature.