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 sec.240.14a-11(c) or sec.240.14a-12

Pacific American Income Shares, Inc.
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(Name of Registrant as Specified In Its Charter)

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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), or 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:

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

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(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
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(4) Proposed maximum aggregate value of transaction:

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(5) Total fee paid:

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/ / 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.

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(4) Date Filed:

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PACIFIC AMERICAN INCOME SHARES, INC.

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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 8, 1997

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To the Stockholders of
PACIFIC AMERICAN INCOME SHARES, INC.

The Annual Meeting of Stockholders of Pacific American Income Shares, Inc.
(the "Company") will be held in the Board Room of Western Asset Management
Company, 117 E. Colorado Boulevard, Pasadena, California, on Tuesday, April 8,
1997 at 9:00 a.m., California time, for the following purposes:

(1) Electing a Board of Directors;

(2) Ratifying or rejecting the selection of Price Waterhouse as independent
accountants for the Company for the fiscal year ending December 31,
1997; and

(3) Transacting such other business as may properly come before the Annual
Meeting and any adjournment thereof.

The Board of Directors has fixed the close of business on February 17,
1997, as the record date for the determination of stockholders entitled to
receive notice of and to vote at the Annual Meeting and any adjournment thereof.

By Order of the Board of Directors

Donna E. Barnes, Secretary

Pasadena, California
February 28, 1997

STOCKHOLDERS WHO DO NOT EXPECT TO ATTEND THE ANNUAL MEETING IN PERSON ARE
URGED TO DATE, FILL IN, SIGN AND MAIL THE ENCLOSED PROXY IN THE ACCOMPANYING
ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
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PACIFIC AMERICAN INCOME SHARES, INC.

PROXY STATEMENT

The accompanying Proxy is solicited by the Board of Directors of the
Company for use at the Annual Meeting of Stockholders to be held on April 8,
1997, at 9:00 a.m., California time, and at any adjournment thereof. Unless
otherwise specified, Proxies will be voted for the election as directors of the
nominees of the Board of Directors and for ratification of the selection of the
Company's independent accountants. The Company's principal office address is 117
E. Colorado Boulevard, Pasadena, California 91105. This Proxy Statement and the
form of proxy were was first mailed to stockholders on or about February 28,
1997.

The close of business on February 17, 1997 has been fixed as the record
date for the determination of stockholders entitled to notice of and to vote at
the Annual Meeting and any adjournment thereof. As of February 17, 1997 there
were 9,319,423 shares of the Company's Common Stock outstanding and entitled to
one vote per share with respect to each matter to be voted on at the Annual
Meeting. The outstanding shares of Common Stock constitute the only outstanding
voting securities of the Company entitled to be voted at the Annual Meeting. At
that date no person owned of record, or to the Company's knowledge, beneficially
more than 5% of the Company's Common Stock, except that Cede & Co., securities
depository, owned of record 72% of the Company's Common Stock. A majority of the
Company's outstanding shares as of February 17, 1997, must be represented in
person or by proxy to constitute a quorum for the Annual Meeting.

Each stockholder has the right to revoke his or her proxy at any time
before it is voted. A proxy may be revoked by filing with the Secretary of the
Company a written revocation or a properly executed proxy bearing a later date.
Any stockholder may attend the Annual Meeting, whether or not he or she has
previously given a proxy.

The solicitation of Proxies for the Annual Meeting will be made primarily
by mail. However, if necessary to ensure satisfactory representation at the
Annual Meeting, additional solicitation may take place by telephone, telegraph
or personal interview by officers and employees of the Company, who will not
receive additional compensation for such services. The Company will reimburse
brokers and other nominees, in accordance with New York Stock Exchange approved
reimbursement rates, for their expenses in forwarding solicitation material to
the beneficial owners of stock of the Company. All expenses incurred in
connection with the solicitation of proxies will be borne by the Company.

A majority of the shares entitled to vote, present in person or represented
by proxy, will constitute a quorum at the Annual Meeting. In all matters other
than the election of directors, the affirmative vote of the majority of shares
of the Company's Common Stock present in person or represented by proxy at the
Annual Meeting and entitled to vote on the subject matter will be the act of the
stockholders. Directors will be elected by a plurality of the votes of the
shares of the Company's Common Stock present in person or represented by
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proxy and entitled to vote on the election of directors. Discretionary authority
is provided in the Proxy as to any matters not specifically referred to therein.
The Board of Directors is not aware of any other matters which are likely to be
brought before the Annual Meeting. However, if any such matters properly come
before the Annual Meeting, it is understood that the Proxy holders are fully
authorized to vote thereon in accordance with their judgment and discretion.

Abstentions will be treated as the equivalent of a negative vote for the
purpose of determining whether a proposal has been adopted and will have no
effect for the purpose of determining whether a director has been elected. As to
certain matters other than the election of directors, New York Stock Exchange
rules generally require that, when shares are registered in street or nominee
name, its member brokers receive specific instructions from the beneficial
owners in order to vote on such a proposal. If a member broker indicates on the
proxy that such broker does not have discretionary authority as to certain
shares to vote on a particular matter, those shares will not be considered as
present and entitled to vote with respect to that matter.

PROXIES

W. Curtis Livingston III, Kent S. Engel and Donna E. Barnes, the persons
named as proxies on the Proxy card accompanying this Proxy Statement, were
selected by the Board of Directors to serve in such capacity. Messrs. Livingston
and Engel and Ms. Barnes are each officers of the Company. Each executed and
returned Proxy will be voted in accordance with the directions indicated
thereon, or if no direction is indicated, such Proxy will be voted in accordance
with the recommendations of the Board of Directors contained in the Proxy
Statement. Unless instructions to the contrary are given, the shares represented
by a Proxy at the Annual Meeting will be voted for the Board of Directors'
nominees.

ELECTION OF DIRECTORS

Seven directors, constituting the entire Board of Directors, are to be
elected at the Annual Meeting to serve until the next Annual Meeting or until
their successors have been duly elected and qualified. The names and ages of the
nominees, their principal occupations during the past five years and certain of
their other affiliations and their ownership of the Company's Common Stock, are
given below. Six of the nominees are presently directors of the Company. One
nominee, Mr. William E.B. Siart, was chosen by the Board in February, 1997 to
fill an upcoming vacancy resulting from the April, 1997 retirement of Board
Member, Mr. Hough. The period of service of each as a director is as follows:
Mr. Barker since the incorporation of the Company in December, 1972; Mr. McGagh
since his election at the Annual Meeting of stockholders in 1984; Mr. Bryson
since his appointment by the Board of Directors on February 12, 1987 to fill a
vacancy resulting from the resignation of a director effective that date; Dr.
Gilman and Mr. Olson since their appointment by the Board on November 11, 1987
to fill two vacancies resulting from the increase on that date in the authorized
membership of the Board, and Mr. Simpson since his appointment by the Board of
Directors on November 10,

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1994 to fill a vacancy resulting from an increase in the authorized membership
of the Board. No director of the Company serves as an officer of the Company.
Each of the nominees has agreed to serve if elected at the Annual Meeting.
Messrs. Barker, Gilman, McGagh, Olson (since August, 1990) and Mr. Simpson
(since November, 1994) are members of the Board of Directors of Western Asset
Trust, Inc. ("Western Asset Trust"), an open-end management investment company
registered with the Securities and Exchange Commission and which has the same
Investment Advisor (as hereinafter defined) as the Company. It is the intention
of the persons designated as proxies in the Proxy, unless otherwise directed
therein, to vote at the Annual Meeting for the election of the nominees named
below as the entire Board of Directors. If any nominee is unable or unavailable
to serve, the persons named in the Proxies will vote the Proxies for such other
person as the Board of Directors may recommend.

SHARES OF
COMMON STOCK
BENEFICIALLY
PRINCIPAL OCCUPATION OWNED ON
NAME AGE AND OTHER AFFILIATIONS FEBRUARY 17, 1997
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Norman Barker, Jr.(1)(2)(6).. 74 Former Chairman of the Board of First 1,057
Interstate Bank of California and Former Vice
Chairman of the Board of First Interstate
Bancorp; currently a director of American
Health Properties, ICN Pharmaceutical, Inc.,
and TCW Convertible Securities Fund, Inc.;
Chairman of the Board of Bank Plus.
John E. Bryson(1)(3)(6)...... 53 Chairman and Chief Executive Officer of Edison 1,000
International (formerly SCEcorp) and its
principal subsidiary, Southern California
Edison Company, since October 1990. Also a
director of The Boeing Company, Times Mirror
Company and the W.M. Keck Foundation.
Chairman, California Business Roundtable and a
trustee of Stanford University.
Dr. Richard C. Gilman(2)(6).. 73 President (1965-1988), President Emeritus 1,033
(since 1988), of Occidental College.
William G. McGagh(2)(3)(6)... 67 Former Senior Vice President and Chief 900
Financial Officer (1980-1988) of Northrop
Grumman Corporation.
Ronald L. Olson(3)(4)(6)..... 55 Partner, law firm of Munger, Tolles & Olson, 1,000
Attorneys, Los Angeles (since 1968). Also a
director of Edison International (formerly
SCEcorp) and Rand Corporation.
William E. B. Siart(6)....... 50 Former Chairman and Chief Executive Officer of 1,000
First Interstate Bancorp; member of the Board
of Trustees of the University of Southern
California.

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Louis A. 60 President and CEO Capital Operations (since 10,000
Simpson(2)(3)(5)(6)........ May 1993), Vice Chairman (1985-1993), Senior
Vice President and Chief Investment Officer
(1979-1985) of Government Employees Insurance
Company (GEICO Corporation). Former President
and CEO of Western Asset Management Company.
Also a director of Potomac Electric Power
Company, Potomac Capital Investment
Corporation, Salomon Inc., Thompson PBE and
Cohr Inc.

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(1) Member of the Executive Committee of the Board of Directors.

(2) Member of the Audit Committee of the Board of Directors.

(3) Member of the Nominating Committee of the Board of Directors.

(4) Because Mr. Olson's law firm provides legal services to the Investment
Adviser, Mr. Olson may be an "interested person", as defined in The
Investment Company Act of 1940, of the Company and the Investment Adviser
("Interested Person").

(5) Because Mr. Simpson is a Director of Salomon Inc., a registered
broker-dealer, Mr. Simpson may be an interested person.

(6) No nominee owns 1% or more of the outstanding shares of Common Stock.

As of February 17, 1997, all directors and officers of the Company as a
group beneficially owned 21,576 shares of the Company's Common Stock, which is
less than 1% of the outstanding shares calculated on the basis of the amount of
outstanding shares of Common Stock (9,319,423).

The Company's Board of Directors has established an Audit Committee, an
Executive Committee and a Nominating Committee. The Audit Committee meets with
the Company's independent accountants to review the financial statements of the
Company, the adequacy of internal controls and the accounting procedures and
policies of the Company, and reports on such matters to the Board of Directors.
The Executive Committee meets to determine and declare dividends on the Common
Stock and determines the net asset value of the Company. The Nominating
Committee meets to select nominees for election as directors of the Company by
the stockholders at the Annual Meeting. It is not the policy of the Nominating
Committee to consider nominees recommended by stockholders. The Board of
Directors does not have a compensation committee. During 1996 the Board of
Directors held five meetings, the Audit Committee held one meeting, the
Executive Committee held one meeting and the Nominating Committee held one
meeting.

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The following table sets forth compensation received by the Company's
directors for their services as directors during 1996:

TOTAL COMPENSATION
AGGREGATE PENSION OR RETIREMENT ESTIMATED ANNUAL FROM THE COMPANY AND
COMPENSATION BENEFITS ACCRUED AS PART BENEFITS UPON ITS FUND COMPLEX
NAME OF PERSON FROM THE COMPANY OF COMPANY'S EXPENSES RETIREMENT PAID TO DIRECTORS(1)
- -------------------------- ---------------- ------------------------ ---------------- --------------------

Norman Barker, Jr......... 10,400.00 -- -- 20,400.00
John E. Bryson............ 8,200.00 -- -- 8,200.00
Dr. Richard C. Gilman..... 8,000.00 -- -- 18,500.00
Gordon L. Hough(2)........ 8,400.00 -- -- 18,400.00
William G. McGagh......... 8,400.00 -- -- 20,400.00
Ronald L. Olson........... 8,100.00 -- -- 18,600.00
Louis A. Simpson.......... 8,100.00 -- -- 18,600.00

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(1) Includes amounts received from both the Company and from Western Asset
Trust, which has the same investment adviser as the Company.

(2) Mr. Hough shall retire from, and not stand for re-election for, the Board of
Directors effective April 8, 1997.

During 1996, the Company paid no remuneration to its officers, all of whom
were also officers or employees of Western Asset Management Company, the
Company's Investment Adviser.

The Company may not invest in securities of Legg Mason, Inc., the parent of
the Company's Investment Adviser, or in any securities of its subsidiaries, but
may invest in securities of other corporations of which directors of the Company
are directors or officers. No nominee for director has purchased or sold more
than 1% of the outstanding class of any securities issued by Legg Mason, Inc. or
the Company's Investment Adviser or any of their subsidiaries during the last
fiscal year. Because Mr. Simpson is a director of Salomon Brothers, the Company
will not effect any transactions utilizing Salomon Brothers or its affiliates as
the Company's broker-dealer.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's officers and directors, and persons who
beneficially own more than ten percent of a registered class of the Company's
equity securities, to file reports of ownership and changes in ownership with
the Securities and Exchange Commission ("SEC") and the New York Stock Exchange.
Officers, directors and greater than ten percent stockholders are required by
SEC regulation to furnish the Company with copies of all Section 16(a) forms
they file.

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Based solely on its review of the copies of such forms received by it, or
written representations from certain reporting persons, the Company believes
that, during 1996, all filing requirements applicable to its officers,
directors, and greater than ten percent beneficial owners were complied with.

INFORMATION CONCERNING THE INVESTMENT
ADVISER AND THE COMPANY'S OFFICERS

Western Asset Management Company, the Company's investment adviser and
administrator ("Investment Adviser"), is a subsidiary of Legg Mason, Inc. Legg
Mason, Inc. is a holding company which, through its subsidiaries, is engaged in
securities brokerage, investment advisory, corporate and public finance, and
mortgage banking services to individuals, institutions, corporations and
municipalities, and the provision of other financial services. The address of
Legg Mason, Inc. is 111 South Calvert Street, Baltimore, Maryland 21202.

The executive officers of the Company and their relationship to the
Investment Adviser are as follows: W. Curtis Livingston III (age: 53), Chairman
and Chief Executive Officer and Director of the Investment Adviser and President
of the Company; Kent S. Engel (49), Director of the Investment Adviser and Vice
President and Portfolio Manager of the Company; Scott F. Grannis (47), Director
of the Investment Adviser and Vice President of the Company; Ilene S. Harker
(42), Director of the Investment Adviser and Vice President of the Company. All
of the executive officers of the Company, with the exception of Ms. Harker, have
held the foregoing positions for more than the past five years. Ms. Harker has
held the position of Director of the Investment Adviser since 1986 and held the
position of Secretary of the Company from November, 1993 to April, 1996. No
director of the Company is an employee, officer, director, general partner or
shareholder of the Investment Adviser or Legg Mason, Inc. or has, or had during
the last five years, any material direct or indirect interest in the Investment
Adviser or Legg Mason, Inc.

RATIFICATION OR REJECTION OF SELECTION OF
INDEPENDENT ACCOUNTANTS

The Board of Directors has selected Price Waterhouse as independent
accountants for the Company for the fiscal year ending December 31, 1997 and
recommends that the stockholders ratify such selection. Ratification by the
stockholders of such selection is required if such accountants are to sign or
certify financial statements filed with the Securities and Exchange Commission.
The Board of Directors recommends that the stockholders vote in favor of
ratification of Price Waterhouse as independent accountants for the Company. The
employment of such accountants is conditioned upon the right of the Company, by
vote of a majority of its outstanding voting securities, to terminate such
employment without any penalty. Price Waterhouse does not have any direct or
material indirect financial interest in the Company. A representative of Price
Waterhouse will be present at the Annual Meeting and will be given the
opportunity to make a statement and will be available to respond to appropriate
questions.

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Audit services provided by Price Waterhouse during 1996 consisted primarily
of an examination of the Company's financial statements and reviews of filings
by the Company with the Securities and Exchange Commission. Non-audit services
performed by Price Waterhouse for the Company in 1996 consisted of its review of
the Company's tax returns.

STOCKHOLDER PROPOSALS FOR 1997 ANNUAL MEETING

Proposals that stockholders wish to present to the 1998 Annual Meeting and
to be included in the Company's proxy materials relating to such meeting must be
delivered to the Secretary of the Company not less than 120 days prior to
February 26, 1998.

ANNUAL REPORT TO STOCKHOLDERS

The Company's Annual Report to Stockholders for the fiscal year ended
December 31, 1996, containing financial and other information pertaining to the
Company, is enclosed with this Proxy Statement. The Annual Report to
stockholders does not constitute a part of this Proxy Statement. The Company
will furnish without charge to each person whose Proxy is being solicited, upon
request of such person, a copy of the Annual Report to Stockholders. Requests
for copies of the Annual Report to Stockholders should be directed to Pacific
American Income Shares, Inc., Attention: Investor Relations, 117 E. Colorado
Boulevard, Pasadena, California 91105, (818) 449-0309.

OTHER BUSINESS

Management is not aware of any other matters to be presented for action at
the Annual Meeting. However, if any such other matters are properly presented,
it is the intention of the persons designated in the enclosed Proxy to vote in
accordance with their best judgement.

By Order of the Board of Directors

Donna E. Barnes, Secretary

February 28, 1997

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PACAM-PS-97
11
/X/ PLEASE MARK VOTES
AS IN THIS EXAMPLE

- -------------------
PACIFIC AMERICAN
INCOME SHARES, INC.
- -------------------

WITH- FOR ALL
FOR HOLD EXCEPT
1) ELECTION OF DIRECTORS / / / / / /

NORMAN BARKER, JR., JOHN E. BRYSON, DR. RICHARD C. GILMAN,
WILLIAM G. MCGAGH, RONALD L. OLSON, WILLIAM E.B. SLART,
AND LOUIS A. SIMPSON

INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL
NOMINEE(S), MARK THE "FOR ALL EXCEPT" BOX AND STRIKE A LINE
THROUGH THE NOMINEE'S NAME IN THE LIST ABOVE.

RECORD DATE SHARES:
FOR AGAINST ABSTAIN
2) The ratification of the selection of Price / / / / / /
Waterhouse as independent accountants for the
Company for the year ending December 31, 1997.

With discretionary power upon such other matters
as may properly come before the meeting or any
adjournment thereof.

THIS PROXY WILL BE VOTED AS SPECIFIED. IF NO
SPECIFICATION IS MADE, THIS PROXY WILL BE VOTED
FOR THE ELECTION AS DIRECTORS OF THE NOMINEES
OF THE BOARD OF DIRECTORS AND FOR THE RATIFICATION
OF THE SELECTION OF PRICE WATERHOUSE AS INDEPENDENT
ACCOUNTANTS FOR THE COMPANY.

Please be sure to sign and date this Proxy. Date

Shareholder sign here Co-owner sign here

Mark box at right if an address change or comment has / /
been noted on the reverse side of this card.

DETACH CARD DETACH CARD

PACIFIC AMERICAN INCOME SHARES, INC.

Dear Shareholder:

Please take note of the important information enclosed with this Proxy Ballot.
There are a number of issues related to the management and operation of your
Corporation that require your immediate attention and approval. These are
discussed in detail in the enclosed proxy materials.

Your vote counts, and you are strongly encouraged to exercise your right to
vote your shares.

Please mark the boxes on this proxy card to indicate how your shares shall be
voted. Then sign the card, detach it and return your proxy vote in the
enclosed postage paid envelope.

Your vote must be received prior to the Annual Meeting of Stockholders,
April 8, 1997.

Thank you in advance for your prompt consideration of these matters.

Sincerely,

Pacific American Income Shares, Inc.

PACIFIC AMERICAN INCOME SHARES, INC.

ANNUAL MEETING OF STOCKHOLDERS - APRIL 8, 1997

THIS PROXY IS SOLICITED ON BEHALF
OF THE BOARD OF DIRECTORS OF PACIFIC AMERICAN INCOME SHARES, INC.

The undersigned, revoking all prior proxies, hereby appoints W. Curtis
Livingston III, Kent S. Engel and Donna E. Barnes and each of them, attorneys
and proxies of the undersigned, each with full power of substitution, to attend
the Annual Meeting of the Stockholders of Pacific American Income Shares, Inc.,
a Delaware corporation (the "Company"), to be held in the Board Room of Western
Asset Management Company, 117 E. Colorado Boulevard, Pasadena, California, on
April 8, 1997, at 9:00 a.m. California time, and at any adjournments thereof,
and thereat to vote as indicated all shares of the Common Stock of the Company
which the undersigned would be entitled to vote if personally present with
respect to the matters listed on the reverse, which are more fully described in
the Proxy Statement of the Company dated February 28, 1997 receipt of which is
acknowledged by the undersigned.

PLEASE VOTE AND SIGN ON REVERSE AND RETURN PROMPTLY USING THE ENCLOSED ENVELOPE.

Please sign this Proxy exactly as your name(s) appear(s) on the reverse side.
Joint owners should each sign personally. Trustees and other fiduciaries should
indicate the capacity in which they sign. If a corporation, this signature
should be that of an authorized officer who should state his or her title.

HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?

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