SCHEDULE 14A INFORMATION

                   PROXY STATEMENT PURSUANT TO SECTION 14(a)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                              (AMENDMENT NO. ___)

                 Filed by the Registrant                     [X]
                 Filed by a Party other than the Registrant  [ ]

                           Check the appropriate box:

                 [ ] Preliminary Proxy Statement
                 [ ] Confidential, for Use of the Commission Only
                      (as permitted by Rule 14a-6(e)(2))
                 [X] Definitive Proxy Statement
                 [ ] Definitive Additional Materials
                 [ ] Soliciting Material Pursuant to section 240.14a-11(c)
                      or section 240.14a-12

                   American Government Income Portfolio, Inc.
                      American Government Income Fund Inc.
                     American Opportunity Income Fund Inc. 
                (Name of Registrant as Specified in its Charter)

                                 [Insert Name]
    (Name of Person(s) Filing Proxy Statement if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

[X]  $125 (per Registrant) per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1),
     or 14a-6(i)(2) or Item 22(a)(2) of Schedule 14A.
[ ]  $500 per each party to the controversy pursuant to Exchange Act 
     Rule 14a-6(i)(3).
[ ]  Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

     (1) Title of each class of securities to which transaction applies:


     (2) Aggregate number of securities to which transaction applies:


     (3) Per unit price or other underlying value of transaction computed
         pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
         filing fee is calculated and state how it was determined):


     (4) Proposed maximum aggregate value of transaction :


     (5) Total fee paid:


[ ]  Check box if any part of the fee is offset as provided by Exchange Act
     Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
     paid previously. Identify the previous filing by registration statement
     number, or the Form or Schedule and the date of its filing.

     (1) Amount Previously Paid:


     (2) Form, Schedule or Registration Statement No.:


     (3) Filing Party:


     (4) Date Filed:


                   AMERICAN GOVERNMENT INCOME PORTFOLIO, INC.
                      AMERICAN GOVERNMENT INCOME FUND INC.
                     AMERICAN OPPORTUNITY INCOME FUND INC.
                              Piper Jaffray Tower
                             222 South Ninth Street
                       Minneapolis, Minnesota 55402-3804

                    NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
                         TO BE HELD ON AUGUST 17, 1995

     NOTICE IS HEREBY GIVEN that the annual meeting of shareholders of American
Government Income Portfolio, Inc. ("Government Portfolio"), American Government
Income Fund Inc. ("Government Fund") and American Opportunity Income Fund Inc.
("Opportunity Fund") (individually, a "Fund" and collectively, the "Funds") will
be held at 10:00 a.m., Central Time, on Thursday, August 17, 1995, on the
eleventh floor of the Piper Jaffray Tower, 222 South Ninth Street, Minneapolis,
Minnesota. The purposes of the meeting are as follow:

     1.  To fix the number of members of the Board of Directors of each Fund at
         six and to elect each Fund's Board of Directors.

     2.  To ratify the selection by a majority of the independent members of the
         Board of Directors of each Fund of KPMG Peat Marwick LLP as independent
         public accountants for each Fund for the fiscal year ending October 31,
         1995.

     3.  To transact such other business as may properly come before the
         meeting.

     Shareholders of record on June 23, 1995, are the only persons entitled to
notice of and to vote at the meeting.

     Your attention is directed to the attached Proxy Statement. WHETHER OR NOT
YOU EXPECT TO BE PRESENT AT THE UPCOMING MEETING, PLEASE FILL IN, SIGN, DATE,
AND MAIL THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE IN ORDER TO SAVE THE FUNDS
FURTHER SOLICITATION EXPENSE. A stamped return envelope is enclosed for your
convenience.


                                                David Evans Rosedahl, Secretary

Dated:  July 7, 1995



                                PROXY STATEMENT

                   AMERICAN GOVERNMENT INCOME PORTFOLIO, INC.
                      AMERICAN GOVERNMENT INCOME FUND INC.
                     AMERICAN OPPORTUNITY INCOME FUND INC.
                              Piper Jaffray Tower
                             222 South Ninth Street
                       Minneapolis, Minnesota 55402-3804

                ANNUAL MEETING OF SHAREHOLDERS--AUGUST 17, 1995

     The enclosed proxy is solicited by the Board of Directors of American
Government Income Portfolio, Inc. ("Government Portfolio"), American Government
Income Fund Inc. ("Government Fund") and American Opportunity Income Fund Inc.
("Opportunity Fund") (individually, a "Fund" and collectively, the "Funds") in
connection with the annual meeting of shareholders of each Fund to be held
August 17, 1995, and any adjournments thereof. The costs of solicitation,
including the cost of preparing and mailing the Notice of Meeting and this Proxy
Statement, will be paid by each Fund, and such mailing will take place on
approximately July 12, 1995. Representatives of Piper Capital Management
Incorporated (the "Adviser"), the investment adviser and manager of each Fund,
may, without cost to the Funds, solicit proxies on behalf of the management of
the Funds by means of mail, telephone, or personal calls. The address of the
Adviser is that of the Funds as provided above.

     A proxy may be revoked before the meeting by giving written notice of
revocation to the Secretary of the Funds, or at the meeting prior to voting.
Unless revoked, properly executed proxies in which choices are not specified by
the shareholders will be voted "for" each item for which no choice is specified,
in accordance with the recommendation of each Fund's Board of Directors. In
instances where choices are specified by the shareholders in the proxy, those
proxies will be voted or the vote will be withheld in accordance with the
shareholder's choice. With regard to the election of directors, votes may be
cast in favor or withheld; votes that are withheld will be excluded entirely
from the vote and will have no effect. Abstentions may be specified on all
proposals other than the election of directors and will be counted as present
for purposes of determining whether a quorum of shares is present at the meeting
with respect to the item on which the abstention is noted, but will be counted
as a vote "against" such item. Under the Rules of the New York Stock Exchange,
each of the proposals being considered at the meeting is considered a
"discretionary" proposal, which means that brokers who hold Fund shares in
street name for customers are authorized to vote on such proposal on behalf of
their customers with or without specific voting instructions from such
customers. Should any other matters properly come before the meeting, it is the
intention of the persons named as proxies in the enclosed proxy to act upon them
according to their best judgment.

     Only shareholders of record on June 23, 1995, may vote at the meeting or
any adjournments thereof. As of that date, there were issued and outstanding
common shares, each with a $.01 par value, of each Fund as follows: Government
Portfolio--24,641,077 shares; Government Fund--21,643,149 shares; and
Opportunity Fund--23,050,573 shares. Common shares represent the only class of
securities of each Fund. Each shareholder of the Funds is entitled to one vote
for each share held. None of the matters to be presented at the meeting will
entitle any shareholder to appraisal rights. No person, to the knowledge of Fund
management, was the beneficial owner of more than 5% of the voting shares of any
of the Funds as of June 26, 1995.

     THE FUNDS' ANNUAL REPORTS FOR THE FISCAL YEAR ENDED OCTOBER 31, 1994, AND
SEMI-ANNUAL REPORTS FOR THE FISCAL PERIOD ENDED APRIL 30, 1995, INCLUDING
FINANCIAL STATEMENTS, WERE PREVIOUSLY MAILED TO SHAREHOLDERS. IF YOU HAVE NOT
RECEIVED A REPORT FOR YOUR FUND OR WOULD LIKE TO RECEIVE ANOTHER COPY, PLEASE
CONTACT THE FUNDS AT 222 SOUTH NINTH STREET, MINNEAPOLIS, MINNESOTA 55402, OR
CALL 800-866-7778, EXTENSION 6786, AND ONE WILL BE SENT, WITHOUT CHARGE, BY
FIRST-CLASS MAIL WITHIN THREE BUSINESS DAYS.


                                  PROPOSAL ONE
                             ELECTION OF DIRECTORS

     The Bylaws of each Fund provide that the shareholders have the power to fix
the number of Directors. The Directors recommend that the size of the Board of
Directors of each Fund be set at six.

     It is intended that the enclosed proxy will be voted for the election of
the six persons named below as Directors of each Fund unless such authority has
been withheld in the proxy. The term of office of each person elected will be
until the next annual meeting of shareholders or until his or her successor is
duly elected and shall qualify. Pertinent information regarding each nominee for
the past five years is set forth following his or her name below. Each of the
nominees also serves as a Director of each of the other closed-end and open-end
investment companies managed by the Adviser (except that Mr. Bennett does not
serve as a Director of Piper Global Funds Inc.). Mr. Ellis and Ms. Goldberg have
served as a Director of each Fund since the commencement of operations. Messrs.
Bennett, Dyer and Latimer and Ms. Emmerich have served as Directors of each Fund
since December 1, 1989, October 30, 1989, October 23, 1991 and May 18, 1993,
respectively.




NAME                          AGE        PRINCIPAL OCCUPATION AND BUSINESS EXPERIENCE DURING PAST 5 YEARS

                                   
David T. Bennett               54        Of counsel to the law firm of Gray, Plant,  Mooty, Mooty & Bennett,  P.A.,
                                         located in  Minneapolis,  Minnesota.  Mr.  Bennett is  chairman of a group
                                         of  privately  held  companies  and serves on the board of  directors of a
                                         number of non-profit organizations.

Jaye F. Dyer                   68        President  of Dyer  Management  Company,  a  private  management  company,
                                         since  January 1, 1991;  prior  thereto,  Mr. Dyer was President and Chief
                                         Executive Officer of Dyco Petroleum  Corporation,  a Minneapolis based oil
                                         and natural gas development  company he founded,  from 1971 until March 1,
                                         1989,  and  Chairman  of the Board  until  December  31,  1990.  Mr.  Dyer
                                         serves on the board of directors of  Northwestern  National Life Insurance
                                         Company,   The  ReliaStar   Financial   Corp.   (the  holding  company  of
                                         Northwestern  National Life Insurance  Company) and various privately held
                                         and nonprofit corporations.

William H. Ellis*              53        President of Piper Jaffray  Companies  Inc. and Piper  Jaffray Inc.  since
                                         September  1982 and  Chief  Operating  Officer  of the same two  companies
                                         since  August  1983;  Director  and  Chairman  of the Board of the Adviser
                                         since October 1985 and President of the Adviser since December 1994.

Karol D. Emmerich              46        President   of  The   Paraclete   Group,   a   consultant   to   nonprofit
                                         organizations,  since May  1993;  prior  thereto,  Ms.  Emmerich  was Vice
                                         President,  Treasurer  and  Chief  Accounting  Officer  of  Dayton  Hudson
                                         Corporation  from 1980 to May 1993.  Ms.  Emmerich is an Executive  Fellow
                                         at the  University  of St. Thomas  Graduate  School of Business and serves
                                         on the board of  directors  of a number of  privately  held and  nonprofit
                                         corporations.

Luella G. Goldberg             58        Member of the Board of Directors of  Northwestern  National Life Insurance
                                         Company (since 1976),  The ReliaStar  Financial  Corp.  (since 1989),  TCF
                                         Financial  Corporation  (since  1988),  the  holding  company  of TCF Bank
                                         Savings  fsb  (since  1985) and  Hormel  Foods  Corp.  (since  1993).  Ms.
                                         Goldberg  also serves as a Trustee of Wellesley  College and as a director
                                         of  a  number  of  other   organizations,   including  the  University  of
                                         Minnesota  Foundation  and  the  Minnesota  Orchestral  Association.   Ms.
                                         Goldberg was  Chairman of the Board of Trustees of Wellesley  College from
                                         1985 to 1993 and acting President from July 1, 1993 to October 1, 1993.

George Latimer                 59        Director,  Special Actions Office, Office of the Secretary,  Department of
                                         Housing and Urban Development  since 1993; prior thereto,  Mr. Latimer had
                                         been Dean of Hamline Law School,  Saint Paul,  Minnesota,  since 1990. Mr.
                                         Latimer  also  serves on the board of  directors  of  Digital  Biometrics,
                                         Inc. and Payless Cashways, Inc.



*Denotes Directors who are "interested persons" (as defined by the Investment
Company Act of 1940, as amended) of the Funds. Mr. Ellis is deemed an
"interested person" of the Funds because of his positions with the Adviser
and/or its affiliates.

     Except as indicated above, the Directors of the Funds are not directors of
any other "reporting companies." As of June 26, 1995, the officers and Directors
of the Funds as a group beneficially owned less than 1% of the outstanding
shares of each Fund. None of the officers or Directors of the Funds have family
relationships with other officers or Directors of the Funds.

     The Board of Directors of each Fund has established an Audit Committee,
currently consisting of Mr. Dyer, Ms. Emmerich and Ms. Goldberg, who serves as
its chairperson. The Audit Committee met twice during the fiscal year ended
October 31, 1994. The Funds do not have nominating or compensation committees.

     The functions to be performed by the Audit Committee are to recommend
annually to the Board a firm of independent certified public accountants to
audit the books and records of the Funds for the ensuing year; to monitor that
firm's performance; to review with the firm the scope and results of each audit
and determine the need, if any, to extend audit procedures; to confer with the
firm and representatives of the Funds on matters concerning the Funds' financial
statements and reports including the appropriateness of its accounting practices
and of its financial controls and procedures; to evaluate the independence of
the firm; to review procedures to safeguard portfolio securities; to review the
purchase by the Funds from the firm of non-audit services; to review all fees
paid to the firm; and to facilitate communications between the firm and the
Funds' officers and Directors.

     The Board of Directors also has established a Committee of the Independent
Directors, consisting of Mr. Bennett, who serves as chairperson, Messrs. Dyer
and Latimer, Ms. Emmerich and Ms. Goldberg and a Derivatives Committee
consisting of Ms. Emmerich, who serves as chairperson, Ms. Goldberg and Mr.
Dyer. These committees were formed on November 1, 1994, and therefore, did not
meet during the fiscal year ended October 31, 1994.

     The functions of the Committee of the Independent Directors are: (a)
recommendation to the full Board of approval of any management, advisory,
sub-advisory and/or administration agreements; (b) recommendation to the full
Board of approval of any underwriting and/or distribution agreements; (c) review
of the fidelity bond and premium allocation; (d) review of errors and omissions
and any other joint insurance policies and premium allocation; (e) review of,
and monitoring of compliance with, procedures adopted pursuant to certain rules
promulgated under the 1940 Act; and (f) such other duties as the independent
directors shall, from time to time, conclude are necessary or appropriate to
carry out their duties under the 1940 Act. The functions of the Derivatives
Committee are: (a) to oversee practices, policies and procedures of the Adviser
in connection with the use of derivatives; (b) to receive periodic reports from
management and independent accountants; and (c) to report periodically to the
Committee of the Independent Directors and the Board of Directors.

     During the fiscal year ended October 31, 1994, there were six meetings of
the Board of Directors of each Fund. All Directors, except Mr. Ellis, attended
at least 75% of the aggregate of the meetings of the Board of Directors and
meetings of committees of which they were members that were held while they were
serving on the Board of Directors or on such committee. Mr. Ellis (who does not
serve on any committees) attended four of the six meetings of the Board of
Directors of each Fund.

     No compensation is paid by the Funds to any Directors who are officers or
employees of the Adviser or any of its affiliates. The Funds, together with all
closed-end investment companies managed by the Adviser, pay each of the other
Directors an aggregate quarterly retainer of $5,000, which is allocated among
the Funds and such other investment companies on the basis of each company's net
assets. In addition, each Fund pays each such Director a fee for each in-person
meeting of the Board of Directors he or she attends. Such fee is based on the
net asset value of the Fund and ranges from $250 (net assets of less than $200
million) to $1,500 (net assets of $5 billion or more). Members of the Audit
Committee who are not affiliated with the Adviser receive $1,000 per meeting
attended ($2,000 for the chairperson of such Committee) with such fee being
allocated among all closedand open-end investment companies managed by the
Adviser on the basis of relative net asset values. Members of the Committee of
the Independent Directors and the Derivatives Committee currently receive no
additional compensation. In addition, each Director who is not affiliated with
the Adviser is reimbursed for expenses incurred in connection with attending
meetings.

     The following table sets forth the aggregate compensation received by each
Director from each Fund for the fiscal year ended October 31, 1994, as well as
the total compensation received by each Director from the Funds and all other
open-end and closed-end investment companies managed by the Adviser or an
affiliate of the Adviser (the "Fund Complex") during the calendar year ended
December 31, 1994. Directors who are officers or employees of the Adviser or any
of its affiliates did not receive any such compensation and are not included in
the table.




                                                                Pension or
                                    Aggregate                   Retirement          Estimated           Total
                                  Compensation                   Benefits        Annual Benefits    Compensation
                                 from the Funds               Accrued as Part         Upon            from Fund
Director                Gov.Port.   Gov. Fund   Opp. Fund     of Fund Expense      Retirement          Complex*

                                                                                          
David T. Bennett         $2,443      $1,943      $2,443             None               None             $57,500
Jaye F. Dyer             $2,496      $1,996      $2,496             None               None             $68,250
Karol D. Emmerich        $2,496      $1,996      $2,496             None               None             $68,250
Luella G. Goldberg       $2,549      $2,049      $2,549             None               None             $71,250
George Latimer           $2,443      $1,943      $2,443             None               None             $65,250



*  Consists of 26 open-end and closed-end investment companies managed by the
   Adviser or an affiliate of the Adviser, including the Funds. Each director
   included in the table, other than Mr. Bennett, serves on the board of each
   such open-end and closed end investment company. Mr. Bennett serves on the
   board of 24 of such open-end and closed-end investment companies.

     The Directors recommend that the shareholders of each Fund vote in favor of
the foregoing nominees to serve as Directors of each Fund. The vote of a
majority of shares of each Fund represented at the meeting, provided at least a
quorum (a majority of the outstanding shares) is represented in person or by
proxy, is sufficient for the election of the above nominees. Unless otherwise
instructed, the proxies will vote for the above six nominees. In the event any
of the above nominees are not candidates for election at the meeting, the
proxies will vote for such other persons as the Board of Directors may
designate. Nothing currently indicates that such a situation will arise.

                                  PROPOSAL TWO
                 RATIFICATION OF INDEPENDENT PUBLIC ACCOUNTANTS

     The Investment Company Act of 1940 (the "1940 Act") provides that every
registered investment company shall be audited at least once each year by
independent public accountants selected by a majority of the directors of the
investment company who are not interested persons of the investment company or
its investment adviser. The 1940 Act requires that the selection be submitted
for ratification or rejection by the shareholders at their next annual meeting
following the selection.

     The Directors, including a majority who are not interested persons of the
Adviser or the Funds, have selected KPMG Peat Marwick LLP to be each Fund's
independent public accountants for the fiscal year ending October 31, 1996. KPMG
Peat Marwick LLP has no direct or material indirect financial interest in the
Funds or in the Adviser, other than receipt of fees for services to the Funds.
KPMG Peat Marwick LLP serves as the independent public accountants for each of
the other investment companies managed by the Adviser. KPMG Peat Marwick LLP has
been the independent public accountants for each Fund since each commenced
operations.

     Representatives of KPMG Peat Marwick LLP are expected to be present at the
meeting. Such representatives will be given the opportunity to make a statement
to the shareholders if they desire to do so and are expected to be available to
respond to any questions that may be raised at the meeting.

     The Board of Directors recommends that the shareholders of each Fund vote
in favor of the ratification of the selection of KPMG Peat Marwick LLP as the
independent public accountants for the Funds. The vote of a majority of the
shares of each Fund represented at the meeting, provided at least a quorum (a
majority of the outstanding shares) is represented in person or by proxy, is
sufficient for the ratification of the selection of the independent public
accountants. Unless otherwise instructed, the proxies will vote for the
ratification of the selection of KPMG Peat Marwick LLP as each Fund's
independent public accountants.

                            EXECUTIVE FUND OFFICERS

     Certain information about the executive officers of the Funds is set forth
below. Unless otherwise indicated, all positions have been held more than five
years.

                                  POSITION AND TERM OF OFFICE WITH THE FUNDS AND
NAME                     AGE      BUSINESS EXPERIENCE DURING THE PAST FIVE YEARS

Worth Bruntjen            58      President of the Funds since inception; Senior
                                  Vice President of the Adviser.

Paul A. Dow               44      Senior Vice President of Opportunity Fund
                                  since 1991; previously, Vice President of
                                  Opportunity Fund since inception; Senior Vice
                                  President and Chief Investment Officer of the
                                  Adviser.

Marijo A. Goldstein       42      Senior Vice President of the Funds since 1995;
                                  previously, Vice President of Opportunity Fund
                                  since inception and of Government Fund and
                                  Government Portfolio since 1992; Senior Vice
                                  President of the Adviser since 1993;
                                  previously Vice President of the Adviser since
                                  1991 and a fixed income analyst of the Adviser
                                  since 1988.

Robert H. Nelson          31      Senior Vice President of the Funds since 1995;
                                  previously, Vice President of the Funds since
                                  1993; Senior Vice President of the Adviser
                                  since November 1993; previously, Vice
                                  President of the Adviser from 1991 to 1993 and
                                  Assistant Vice President from 1989 to 1991.

Amy K. Johnson            29      Vice President of the Funds since 1994; Vice
                                  President of the Adviser since 1994;
                                  previously, Accounting Manager from 1993 to
                                  1994 and a mutual fund accountant from 1991 to
                                  1993 with the Adviser. Prior to joining the
                                  Adviser, she was an audit senior with KPMG
                                  Peat Marwick in Minneapolis, Minnesota from
                                  1990 to 1992.

David E. Rosedahl        48       Secretary of the Funds since inception;
                                  Secretary and Director of the Adviser;
                                  Managing Director, Secretary (since 1993) and
                                  General Counsel for Piper Jaffray Inc.;
                                  Managing Director and General Counsel for
                                  Piper Jaffray Companies Inc.; and General
                                  Counsel of the Adviser.

Charles N. Hayssen       44       Treasurer of the Funds since inception;
                                  Director, Chief Financial Officer and Chief
                                  Operating Officer (since 1994) of the Adviser;
                                  Managing Director of Piper Jaffray Inc. and of
                                  Piper Jaffray Companies Inc.; and Chief
                                  Financial Officer of Piper Jaffray Inc.


                            SUPPLEMENTAL INFORMATION

     Based on Fund records and other information, the Funds believe that all SEC
filing requirements applicable to their Directors, officers, Adviser and
companies affiliated with the Adviser, pursuant to Section 16(a) of the
Securities Exchange Act of 1934, with respect to the Funds' fiscal year ended
October 31, 1994 were satisfied.

                             SHAREHOLDER PROPOSALS

     Any proposal by a shareholder to be considered for presentation at the next
Annual Meeting must be received at the Funds' offices, Piper Jaffray Tower, 222
South Ninth Street, Minneapolis, Minnesota 55402, no later than March 15, 1996.


Dated:  July 7, 1995                            David Evans Rosedahl, Secretary



                   AMERICAN GOVERNMENT INCOME PORTFOLIO, INC.
                THIS PROXY IS SOLICITED ON BEHALF OF MANAGEMENT

     The undersigned appoints William H. Ellis, Charles N. Hayssen and David
Evans Rosedahl, and each of them, with power to act without the other and with
the right of substitution in each, the proxies of the undersigned to vote all
shares of American Government Income Portfolio, Inc. (the "Fund"), held by the
undersigned at the annual meeting of shareholders of the Fund to be held on
August 17, 1995, and at any adjournments thereof, with all the powers the
undersigned would possess if present in person. All previous Proxies given with
respect to the meeting are revoked.

THE PROXIES ARE INSTRUCTED:
1.   To vote:
            ______FOR all nominees listed below 
                   (except as marked to the contrary below) 
            ______WITHHOLD AUTHORITY to vote for all nominees listed below

     NOMINEES: David T. Bennett, Jaye F. Dyer, William H. Ellis, Karol D.
Emmerich, Luella G. Goldberg and George Latimer. (Instruction: To withhold
authority to vote for any individual nominee, write that nominee's name on the
line provided below.)


2.   To vote: FOR ___ AGAINST ___ ABSTAIN ___ ratification of the selection
of KPMG Peat Marwick LLP as independent public accountants for the Fund.

     To transact any other business that may properly come before the meeting or
any adjournments thereof.

     THIS PROXY WILL BE VOTED AS INSTRUCTED ON THE ABOVE MATTERS. IT IS
UNDERSTOOD THAT, IF NO CHOICE IS SPECIFIED, THIS PROXY WILL BE VOTED "FOR" ALL
ITEMS. UPON ALL OTHER MATTERS THE PROXIES SHALL VOTE AS THEY DEEM IN THE BEST
INTERESTS OF THE FUND. RECEIPT OF NOTICE OF MEETING AND PROXY STATEMENT IS
ACKNOWLEDGED BY YOUR EXECUTION OF THIS PROXY. SIGN, DATE, AND RETURN IN THE
ADDRESSED ENVELOPE-NO POSTAGE REQUIRED. PLEASE MAIL PROMPTLY TO SAVE THE FUND
FURTHER SOLICITATION EXPENSE.


                                            Dated: ______________________ , 1995

                                            ____________________________________

                                            ____________________________________

                                            IMPORTANT: Please date and sign this
                                            Proxy. If the stock is held jointly,
                                            signature should include both names.
                                            Executors, administrators, trustees,
                                            guardians, and others signing in a
                                            representative capacity should give
                                            their full title as such.



                      AMERICAN GOVERNMENT INCOME FUND INC.
                THIS PROXY IS SOLICITED ON BEHALF OF MANAGEMENT

     The undersigned appoints William H. Ellis, Charles N. Hayssen and David
Evans Rosedahl, and each of them, with power to act without the other and with
the right of substitution in each, the proxies of the undersigned to vote all
shares of American Government Income Fund Inc. (the "Fund"), held by the
undersigned at the annual meeting of shareholders of the Fund to be held on
August 17, 1995, and at any adjournments thereof, with all the powers the
undersigned would possess if present in person. All previous Proxies given with
respect to the meeting are revoked.

THE PROXIES ARE INSTRUCTED:
1.   To vote:
             ______FOR all nominees listed below 
                    (except as marked to the contrary below) 
             ______WITHHOLD AUTHORITY to vote for all nominees listed below

     NOMINEES: David T. Bennett, Jaye F. Dyer, William H. Ellis, Karol D.
Emmerich, Luella G. Goldberg and George Latimer. (Instruction: To withhold
authority to vote for any individual nominee, write that nominee's name on the
line provided below.)


2.   To vote: FOR ___ AGAINST ___ ABSTAIN ___ ratification of the selection
of KPMG Peat Marwick LLP as independent public accountants for the Fund.

     To transact any other business that may properly come before the meeting or
any adjournments thereof.

     THIS PROXY WILL BE VOTED AS INSTRUCTED ON THE ABOVE MATTERS. IT IS
UNDERSTOOD THAT, IF NO CHOICE IS SPECIFIED, THIS PROXY WILL BE VOTED "FOR" ALL
ITEMS. UPON ALL OTHER MATTERS THE PROXIES SHALL VOTE AS THEY DEEM IN THE BEST
INTERESTS OF THE FUND. RECEIPT OF NOTICE OF MEETING AND PROXY STATEMENT IS
ACKNOWLEDGED BY YOUR EXECUTION OF THIS PROXY. SIGN, DATE, AND RETURN IN THE
ADDRESSED ENVELOPE-NO POSTAGE REQUIRED. PLEASE MAIL PROMPTLY TO SAVE THE FUND
FURTHER SOLICITATION EXPENSE.


                                            Dated: ______________________ , 1995

                                            ____________________________________

                                            ____________________________________

                                            IMPORTANT: Please date and sign this
                                            Proxy. If the stock is held jointly,
                                            signature should include both names.
                                            Executors, administrators, trustees,
                                            guardians, and others signing in a
                                            representative capacity should give
                                            their full title as such.



                     AMERICAN OPPORTUNITY INCOME FUND INC.
                THIS PROXY IS SOLICITED ON BEHALF OF MANAGEMENT

     The undersigned appoints William H. Ellis, Charles N. Hayssen and David
Evans Rosedahl, and each of them, with power to act without the other and with
the right of substitution in each, the proxies of the undersigned to vote all
shares of American Opportunity Income Fund Inc. (the "Fund"), held by the
undersigned at the annual meeting of shareholders of the Fund to be held on
August 17, 1995, and at any adjournments thereof, with all the powers the
undersigned would possess if present in person. All previous Proxies given with
respect to the meeting are revoked.

THE PROXIES ARE INSTRUCTED:
1.   To vote:
            ______FOR all nominees listed below 
                   (except as marked to the contrary below)
            ______WITHHOLD AUTHORITY to vote for all nominees listed below

     NOMINEES: David T. Bennett, Jaye F. Dyer, William H. Ellis, Karol D.
Emmerich, Luella G. Goldberg and George Latimer. (Instruction: To withhold
authority to vote for any individual nominee, write that nominee's name on the
line provided below.)


2.   To vote: FOR ___ AGAINST ___ ABSTAIN ___ ratification of the selection
of KPMG Peat Marwick LLP as independent public accountants for the Fund.

     To transact any other business that may properly come before the meeting or
any adjournments thereof.

     THIS PROXY WILL BE VOTED AS INSTRUCTED ON THE ABOVE MATTERS. IT IS
UNDERSTOOD THAT, IF NO CHOICE IS SPECIFIED, THIS PROXY WILL BE VOTED "FOR" ALL
ITEMS. UPON ALL OTHER MATTERS THE PROXIES SHALL VOTE AS THEY DEEM IN THE BEST
INTERESTS OF THE FUND. RECEIPT OF NOTICE OF MEETING AND PROXY STATEMENT IS
ACKNOWLEDGED BY YOUR EXECUTION OF THIS PROXY. SIGN, DATE, AND RETURN IN THE
ADDRESSED ENVELOPE-NO POSTAGE REQUIRED. PLEASE MAIL PROMPTLY TO SAVE THE FUND
FURTHER SOLICITATION EXPENSE.


                                            Dated: ______________________ , 1995

                                            ____________________________________

                                            ____________________________________

                                            IMPORTANT: Please date and sign this
                                            Proxy. If the stock is held jointly,
                                            signature should include both names.
                                            Executors, administrators, trustees,
                                            guardians, and others signing in a
                                            representative capacity should give
                                            their full title as such.