24F-2NT

                                FORM 24F-2
                    Annual Notice of Securities Sold
                          Pursuant to Rule 24f-2



1.    Name and address of issuer:

      T. Rowe Price New Income Fund, Inc.
      100 East Pratt Street
      Baltimore, MD 21202


2.    Name of each series or class of funds for which this notice is
      filed:

      Not Applicable
      

3.    Investment Company Act File Number: 811-2396

      Securities Act File Number: 02-48848


4.    Last day of fiscal year for which this notice is filed: 

      May 31, 1997

5.    Check box if this notice is being filed more than 180 days after
      the close of the issuer's fiscal year for purposes of reporting
      securities sold after the close of the fiscal year but before
      termination of the issuer's 24f-2 declaration:                [  ]

6.    Date of termination of issuer's declaration under rule
      24f-2(a)(1), if applicable (see instruction A.6):

      Not applicable

7.    Number and amount of securities of the same class or series which
      had been registered under the Securities Act of 1933 other than
      pursuant to rule 24f-2 in a prior fiscal year, but which remained
      unsold at the beginning of the fiscal year:

      13,955,057 shares

8.    Number and amount of securities registered during the fiscal year
      other than pursuant to rule 24f-2:

      None

9.    Number and aggregate sale price of securities sold during the
      fiscal year:  

      36,820,791 shares aggregating $323,914,407


10.  Number and aggregate sale price of securities sold during the
     fiscal year in reliance upon registration pursuant to rule 24f-2:

 
     36,410,982 shares aggregating $321,200,798

11.  Number and aggregate sale price of securities issued during the
     fiscal year in connection with dividend reinvestment plans, if 
     applicable (see Instruction B.7):

     8,164,056 shares aggregating $71,848,333


12.  Calculation of registration fee:

     (i)  Aggregate sale price of securities
          sold during the fiscal year in reliance
          on rule 24f-2 (from Item 10):              	$  321,200,798

    (ii)  Aggregate price of shares issued in 
          connection with dividend reinvestment 
          plans (from Item 11, if applicable):       	+  71,848,333

   (iii)  Aggregate price of shares redeemed 
          or repurchased during the fiscal year 
          (if applicable):                           	-  331,111,291

    (iv)  Aggregate price of shares redeemed or 
          repurchased and previously applied as 
          a reduction to filing fees pursuant 
          to rule 24e-2 (if applicable):             	+        -0-

     (v)  Net aggregate price of securities sold 
          and issued during the fiscal year in 
          reliance on rule 24f-2 [line (i), plus 
          line (ii), less line (iii), plus line 
          (iv)] (if applicable):                    	 = $   61,937,840

    (vi)  Multiplier prescribed by Section 6(b) 
          of the Securities Act of 1933 or other 
          applicable law or regulation (see 
          Instruction C.6):                          	x     1/3300

   (vii)  Fee due [line (i) or line (v) 
          multiplied by line (vi)]:                  	= $    18,769.04



Instruction:  Issuers should complete lines (ii), (iii), (iv), and (v)
              only if the form is being filed within 60 days after the
              close of the issuer's fiscal year.  See instruction C.3.



13.    Check box if fees are being remitted to the Commission's 
       lockbox depository as described in section 3a of the
       Commission's Rules of Informal and Other Procedures
       (17 CFR 202.3a).                                              [X]


       Date of mailing or wire transfer of filing fees to the 
       Commission's lockbox depository:

SIGNATURES

This report has been signed below by the following persons on behalf of
the issuer and in the capacities and on the dates indicated.


Carmen F. Deyesu, Treasurer
By (Signature and Title)*

July 18, 1997

EX-99.5

SHEREFF, FRIEDMAN, HOFFMAN & GOODMAN, LLP
919 THIRD AVENUE
NEW YORK, NEW YORK 10022-9998
(212) 758-9500


July 18, 1997

T. Rowe Price New Income Fund, Inc.
100 East Pratt Street
Baltimore, Maryland  21202

Dear Sirs:

	T. Rowe Price New Income Fund, Inc., a Maryland
 corporation (the  "Corporation") is filing with the
 Securities and Exchange Commission a Rule 24f-2 Notice
 containing the information specified in paragraph (b)(1) of
 Rule 24f-2 under the Investment Company Act of 1940 (the
 "Rule").  The effect of the Rule 24f-2 Notice, when
 accompanied by this opinion and by the filing fee, if any,
 payable as prescribed by paragraph (c) of the Rule will be
 to make definite the number of shares sold by the
 Corporation during the fiscal year ending May 31, 1997 in
 reliance upon the Rule, if any (the "Rule 24f-2 Shares").


	We have, as counsel, participated in various
 corporate and other proceedings relating to the Corporation 
and to the Rule 24f-2 Shares.  We have examined copies,
 either certified or otherwise proven to our satisfaction to
 be genuine, of its Charter and By-Laws, as currently in
 effect, and a certificate dated July 8, 1997, issued by the
 Department of Assessments and Taxation of the State of
 Maryland certifying the existence and good standing of the
 Corporation.  We have also reviewed the Corporation's
 Registration Statement on Form N-1A and the form of the
 Rule 24f-2 Notice being filed by the Corporation.  We are
 generally familiar with the corporate affairs of the
 Corporation.

	The Corporation has advised us that the Rule
 24f-2 Shares were sold in the manner contemplated by the
 prospectus of the Corporation that was current and
 effective under the Securities Act of 1933 at the time of
 sale, and that the Rule 24f-2 Shares were sold in numbers
 within the limits prescribed by the Charter of the
 Corporation for a consideration not less than the par value
 thereof as required by the laws of Maryland and not less
 than the net asset value thereof as required by the
 Investment Company Act of 1940.

	Based upon the foregoing, it is our opinion
 that:
		The Corporation has been duly organized
 and is legally existing under the laws of the State of
 Maryland.


	The Corporation is authorized to issue two
 hundred million (200,000,000) shares of Capital Stock, par
 value one dollar ($1.00) per share.  Under Maryland law,
 (i) the number of authorized shares may be increased or
 decreased by 
action of the Board of Directors and
 (ii) shares which were issued and which have subsequently
 been redeemed by the Corporation are, by virtue of such
 redemption, restored to the status of authorized and
 unissued shares.

	The Rule 24f-2 Shares were legally issued
 and are fully paid and non-assessable.


	We hereby consent to the filing of this opinion
 with the Securities and Exchange Commission together with
 the Rule 24f-2 Notice of the Corporation, and to the filing
 of this opinion under the securities laws of any state.


	We are members of the Bar of the State of New
 York and do not hold ourselves out as being conversant with
 the laws of any jurisdiction other than those of the United
 States of America and the State of New York.  We note that
 we are not licensed to practice law in the State of
 Maryland, and to the extent that any opinion expressed
 herein involves the law of Maryland, such opinion should be
 understood to be based solely upon our review of the
 documents referred to above, the published statutes of that
 State and, where applicable, published cases, rules or
 regulations of regulatory bodies of that State.


Very truly yours,

/s/ Shereff, Friedman, Hoffman & Goodman, LLP
Shereff, Friedman, Hoffman & Goodman, LLP

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