Report of Independent Registered Public Accounting Firm


To the Shareholders and
Board of Directors of
Flaherty & Crumrine Preferred Income Fund Incorporated

In planning and performing our audit of the financial statements
of Flaherty & Crumrine Preferred Income Fund Incorporated as of
and for the year ended November 30, 2005, in accordance with the
standards of the Public Company Accounting Oversight Board
(United States), we considered its internal control over
financial reporting, including control activities for
safeguarding securities, as a basis for designing our auditing
procedures for the purpose of expressing our opinion on the
financial statements and to comply with the requirements of Form
N-SAR, but not for the purpose of expressing an opinion on the
effectiveness of Flaherty & Crumrine Preferred Income Fund
Incorporated s internal control over financial reporting.
Accordingly, we express no such opinion.

The management of Flaherty & Crumrine Preferred Income Fund
Incorporated is responsible for establishing and maintaining
effective internal control over financial reporting. In
fulfilling this responsibility, estimates and judgments by
management are required to assess the expected benefits and
related costs of controls. A company s internal control over
financial reporting is a process designed to provide reasonable
assurance regarding the reliability of financial reporting and
the preparation of financial statements for external purposes in
accordance with U.S. generally accepted accounting principles.
Such internal control includes policies and procedures that
provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use or disposition of a
company s assets that could have a material effect on the
financial statements.

Because of its inherent limitations, internal control over
financial reporting may not prevent or detect misstatements.
Also, projections of any evaluation of effectiveness to future
periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree
of compliance with the policies or procedures may deteriorate.

A control deficiency exists when the design or operation of a
control does not allow management or employees, in the normal
course of performing their assigned functions, to prevent or
detect misstatements on a timely basis. A significant deficiency
is a control deficiency, or combination of control deficiencies,
that adversely affects the company s ability to initiate,
authorize, record, process or report financial data reliably in
accordance with U.S. generally accepted accounting principles
such that there is more than a remote likelihood that a
misstatement of the company s annual or interim financial
statements that is more than inconsequential will not be
prevented or detected. A material weakness is a significant
deficiency, or combination of significant deficiencies, that
results in more than a remote likelihood that a material
misstatement of the annual or interim financial statements will
not be prevented or detected.

Our consideration of Flaherty & Crumrine Preferred Income Fund
Incorporated s internal control over financial reporting was for
the limited purpose described in the first paragraph and would
not necessarily disclose all deficiencies in internal control
that might be significant deficiencies or material weaknesses
under standards established by the Public Company Accounting
Oversight Board (United States). However, we noted no
deficiencies in Flaherty & Crumrine Preferred Income Fund
Incorporated s internal control over financial reporting and its
operation, including controls for safeguarding securities, that
we consider to be a material weakness as defined above as of
November 30, 2005.

This report is intended solely for the information and use of
management and the Board of Directors of Flaherty & Crumrine
Preferred Income Fund Incorporated and the Securities and
Exchange Commission and is not intended to be and should not be
used by anyone other than these specified parties.






Boston, Massachusetts
January 20, 2006

To the Shareholders and
Board of Directors of
Flaherty & Crumrine Preferred Income Fund Incorporated
Page 2