Valley Forge Fund Inc · N-CSR · For 6/30/05

Filed On 7/11/05 10:19am ET   ·   SEC File 811-01932   ·   Accession Number 102681-5-11

Certified Annual Shareholder Report of a Management Investment Company   ·   Form N-CSR
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: N-CSR       Ncsr Report                                           12±    55K 

Document Table of Contents

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FORM  N-CSR 
CERTIFIED SHAREHOLDERS REPORT OF REGISTERED MANAGEMENT INESTMENT COMPANIES

Investment Company Act file number                   811-2287                   

Exact name of registrant as specified in charter     Valley Forge Fund          

Address of principal executive offices               1375 Anthony Wayne Dr      
                                         Wayne PA  19087

Name and address of agent for service                Bernard B. Klawans         
                                               1375 Anthony Wayne Dr
                                         Wayne PA  19087

Registrants telephone number, including area code    610-688-6839               

Date of fiscal year end:                             12/31/05                   

Date of reporting period:                            01/01/05 to 06/30/05       

Item 1. Report to Shareholders.                                                 

                                                   Valley Forge Fund
                                                        1375 Anthony Wayne Dr.
                                                Wayne PA 19087
                                               June 30, 2005

Dear Shareholder:                                                               

Your Fund started 2005 at $9.24 per share.  Results show that our net asset     
per share declined slighty to $8.83 representing a decrease in value of 4.44%   
so far this year as compared to the Dow Jones Industrial Average ("DJIA") that  
has decreased 4.71%.  In other words, your Fund has performed slightly better   
than the overall market as measured by the ever popular DJIA.                   

This has been a difficult market.  Two securities have been sold, General Motors
and Aleris Internatonal.  A new security Granger (W. W.) Inc. has been purchased
and substantial positions have been added to the Fund's holdings of Federal     
Agric Mtg Corp, CSCO Systems and Time Warner Inc.                               

While the above moves have barely changed the Fund's cash position from 16% at  
yearend 2004 to about 18% at present, the moves were made to acquire securities 
taht are expected to add to the Fund's performance this summer.  However,       
Management may sell certain securities to minimize the market downturn that     
sometimes occurs in the September/October period.                               

Financial figures for the six months ended June 30, 2005 are attached.          

Respectfully submitted,                                                         

Bernard B. Klawans                                                              
President                                                                       

- 1 - 

VALLEY FORGE FUND 

EXPENSES - June 30, 2005  

As a shareholder of the Fund, you incur two types of costs: direct ones, such as
wire and low balance fees; and indirect (ongoing) costs that include manage-    
ment fees and other operating expenses.  This example is intended to help you   
understand your ongoing costs (in dollars) of investing in this Fund as compared
to the ongoing costs of investing in any other mutual fund.                     

Actual Expenses: The first line of the following table provides actual values   
and expenses for a $1,000 account over the period January 1 to June 30, 2005.   
Simply divide your account value on January 1, 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 "Expenses Paid During Period" to calculate the 
expenses you actually paid on your account over the past six months.            

Hypothetical Example for Comparison Purposes: The second line of the table pro- 
vides hypothetical account values & expenses based on the Fund's actual expense 
ratio and an assumed rate of return of 5% per year before expenses.  These hypo-
thetical value and expenses may not be used for anything but comparison of on-  
going costs of investing in this Fund with an assumed rate of return of 5% hy-  
pothetical examples that appear in the shareholder reports of other funds.      
Please note that the expenses shown in the table are meant to highlight your    
ongoing costs only and do not reflect any direct costs, such as wire or low bal-
ance fees.  Therefore, the second line of the table is useful in paring ongoing 
costs only, and will not help you determine the relative total costs of owning  
different funds.  In addition, if these direct costs were included, your cost   
would be higher.                                                                
                   Beginning Account      Ending Account       Expenses Paid
                           Value                 Value           During Period *
                     January 1, 2005       June 30, 2005       January 1, 2005
                                                               June 30, 2005
Actual                  $1,000.00             $  955.63               $5.87     
Hypothetical **          1,000.00              1,019.90                6.29     

 * Expenses are equal to the Fund's annualized expense ratio of 1.20% multiplied
by the average account value over the period, multiplied by 181/365           
(to reflect                                                                 
the one half year period).                                                    
**   With a 5% return before expenses                                         

       TOP TEN HOLDINGS AND ASSET ALLOCATION

 Top Ten Holdings, % of Net Assets       Asset Allocation, % of Net Assets
   Comcast Corp. New Class A    6.48     Basic Materials                  2.62
   Cisco Systems                6.05     Communications                  11.77
   Time Warner Inc.             5.29     Consumer Orientated             25.99
   Supervalu Inc.               5.17     Industrials                     19.07
   Newell Rubbermaid Inc.       5.04     Manufacturing                    8.80
   Alexander & Baldwin Inc.     4.89     Technology                      13.26
   Hercules Incorporated        4.48     Cash & Cash Equivalents         15.84
   McDonalds Corp.              4.40     Other Assets Net of Liabilities  2.65
   EMC Corporation              4.34                                     _____
    Federal Argic Mtg Corp       4.19                                    100.00%
                               ______                                   ======
50.33%          
======          

 - 2 -

VALLEY FORGE FUND 
SCHEDULE OF INVESTMENTS - JUNE 30, 2005   

COMMON STOCKS:                81.51%                  Shares               Value

Basic Materials               2.62%                                           
  Barrick Gold Corp (Canadian)                        8,000          $   200,240
  Coeur D'Alene Mines *                              13,000               47,190
                                                                     ___________
                                                                         247,430
Communications               11.77%                                           
  ADC Telecommunications *                           14,286              311,000
  AT&T Corp.                                         10,000              190,400
  Comcast Corp. New Cl A *                           20,000              613,400
                                                                     ___________
                                                                       1,114,800
Consumer Orientated          25.99%                                           
  Federal Argic Mtg Corp. Cl C Non Voting            17,900              394,695
  Home Depot Incorporated                            10,000              389,000
  McDonalds Corp.                                    15,000              416,250
  Pep Boys - Many, Moe & Jack                        20,000              270,800
  Supervalu Inc.                                     15,000              489,150
  Time Warner Inc. *                                 30,000              501,300
                                                                     ___________
                                                                       2,461,195
Industrials                  19.07%                                           
  Alexander & Baldwin Inc.                           10,000              463,500
  Duke Energy Corp.                                  10,000              297,300
  Hercules Incorporated *                            30,000              424,500
  General Electric Company                           10,000              346,500
  Granger (W. W.) Inc.                                5,000              273,950
                                                                     ___________
                                                                       1,805,750
Manufacturing                 8.80%                                           
  Abitibi Consolidated (Canadian)                    60,000              268,800
  Fedders Corp.                                      40,000               88,000
  Newell Rubbermaid Inc.                             20,000              476,800
                                                                     ___________
                                                                         833,600
Technology                   13.26%                                           
  Arrow Electronics Inc.                             10,000              271,600
  Cisco Systems *                                    30,000              572,400
  EMC Corporation *                                  30,000              411,300
                                                                     ___________
                                                                       1,255,300
                                                                     ___________
    TOTAL COMMON STOCKS               (COST $ 8,421,518)             $ 7,718,075
                                                                     ___________
SHORT TERM INVESTMENTS:        15.84%                                           
  Commerce Bank Cert of Dep 3.443.s11/09 **                            1,500,000
                                                                       _________
    Total Short-term Investment       (COST $ 1,500,000)             $ 1,500,000
                                                                     ___________

TOTAL INVESTMENTS             97.35%  (COST $ 9,921,518              $ 9,218,075
OTHER NET ASSETS               2.65%  (COST $   216,285                  250,855
                                                                      __________
NET ASSETS                   100.00%  (COST $10,137,803              $ 9,468,930
                                                                      ==========
* Non-income producing during the year       ** Redeemable upon request 
The accompaning notes are integral parts of these unaudited financial statements

 - 3 -

VALLEY FORGE FUND   
STATEMENT OF ASSETS & LIABILITIES - JUNE 30, 2005 

Assets: Investments in securities at value (cost $9,921,518)         $9,218,075 
 Cash and cash equivalents                                             216.285
 Dividends and interest receivable                                      34,570
                                                                    __________
          Total Assets                                               9,468,930
                                                                    __________

Liabilities:                                                                  0 
                                                                    __________
         Total Liabilities                                                   0

Net Assets:                                                          $9,468,930 
                                                                    ==========

Composition of Net Assets:  Common stock                             $    1,072 
 Paid in capital                                                    10,047,520
  Net unrealized depreciation of securities                          (  703,443)
 Accumulated undistributed net investment income                       123.781
                                                                    __________
Net Assets  (equivalent to $8.83 per share based on 1,072,448             
              shares outstading) (Note 4)                           $9,468,930
                                                                    ==========

STATEMENT OF OPERATIONS - SIX MONTHS ENDED JUNE 30, 2005

Investment Income:  Dividends (net of foreign taxes)                 $   58,703 
 Interest                                                               30,879
                                                                    __________
   Total Income:                                                        89,582

Expenses: Investment advisory fee (Note 2)                               47,413 
Professional fes                                                            
 Printing and mailing expenses                                           2,929
 Non-interested directors' fees and expensesn                              990
 Registration fees                                                       3,613
Insurance expense                                                           
 Communications                                                            400
 Taxes                                                                     150
 Other expenses                                                          1,688
                                                                    __________
   Total Expenses:                                                      57,183
                                                                    __________
Net Investment Income:                                                   32,399 
                                                                    __________
Realized Gain of (Loss) from Investments:                                       
 Net realized gain on investment securities                             48,141
  Net decrease in unrealized depreciation on investment securities     (527,337)
                                                                    __________
Net Realized and Unrealized Gain from Investments:                     (479,196)
                                                                    __________
Net Increase (Decrease) in Net Assets Resulting from Operations:     $ (446,797)
                                                                    ==========

The accompanying notes are an integral part of these unaudited financial
  statements

 - 4 -

 VALLEY FORGE FUND
  STATEMENT OF CHANGES IN NET ASSETS - SIX MONTHS ENDED JUNE 30, 2005 & 2004

                                                       06/30/05       06/30/04
Increase (Decrease) in Net Assets from Operations:                              
Investment income - net                              $   32,399     $   15,818
 Net realized gain (loss) from investment transactions    48,141         (5,895)
 Unrealized appreciation (depreciation) of investments  (527,337)      (151,408)
                                                     __________     __________
   Net Inc.(Decrease) in Net Assets from Operations     (446,797)      (141,485)

Distributions to shareholders                                 0              0
 Share transactions (Note 4)                            (154,342)         83,399
                                                     __________     __________
   Total Increase in Net Assets                         (601,140)       (58,086)

Net Assets: Beginning of period                      $10,070,070     $9,523,509 
                                                     __________     __________
 End of period                                       $9,468,930     $9,465,423
                                                     ==========     ==========

      FINANCIAL HIGHLIGHTS

         6 Mon
                               ended           Year  Ended
                               06/30           December 31
                                        2005    2004    2003    2002    2001
PER SHARE DATA:                                                                 
Net Asset Value, Beginning of Year       $ 9.24  $ 8.89  $ 7.18  $ 7.98  $ 7.00 

Income from Investment Operations:                                              
Net investment Income                     0.03    0.13    0.14    0.15    0.31
Net security realized & unrealized gains (0.44)   0.35    1.72   (0.78)   0.99
                                        ________________________________________
 Total Inc {Loss} from Investment Ops    (0.41)   0.48    1.86   (0.63)   1.30
                                        ________________________________________
Distributions:                                                                  
 Dividends                                 0.00   (0.07)  (0.10)  (0.17)  (0.31)
 Long term  Capital Gains                  0.00   (0.06)  (0.05)  (0.00)  (0/01)
                                        ________________________________________
  Toral from Distributions                 0.00   (0.13)  (0.15)  (0.17)  (0.32)
                                        ________________________________________
Net Asset Value, End of Period             8.83  $ 9.24  $ 8.89  $ 7.18  $ 7.98 
                                        ========================================

TOTAL RETURN:                            (4.44)%   5.40%  25.91% (7.89)%  18.57%

RATIOS TO AVERAGE NET ASSETS:                                                   
Expenses                                   0.60%   1.22%   1.32%   1.24%   1.26%
Net Investment Income                      0.34%   0.69%   1.31%   2.30%   3.90%

SUPPLEMENTAL DATA:                                                              
Net Assets, End of Period in Thousands   $ 9,468 $10,070 $ 9,523 $ 7,334 $ 7,182
Portfolio Turnover Rate                    6.78%  14.99%  16.27%  43.10%  75.45%

The accompaning notes are an integral part of these unaudited financial 
statements

- 5 - 

NOTES TO FINANCIAL STATEMENTS - JUNE 30, 2005   

  1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES - Organization: The Valley
 Forge Fund, Inc. (the "Fund"), is a non-diversified open-end management invest-
ment company  registered under the Investment Company Act of 1940, as amended.
The Fund's investment objective is to provide appreciation through investment 
in common stocks and securities convertible into common stocks.  The following
summarizes significant accounting policies employed by the Fund.              

 Security Valuation:  Securities are valued  at the last reported sales price or
 in the case of securities where there is no reported last sale, the closing bid
 price.  Securities for  which market  quotations  are not readily available are
 valued at their fair values as determined  in good faith by or under the super-
 vision of the Company's Board of Directors in accordance with methods that have
 been  authorized by  the Board.  Short-term investments  with maturities  of 60
days or less are valued at amortize cost which approximates market value.     

 Securities Transactions & Investment Income: Security transactions are recorded
on the dates transactions are entered into (the trade dates).  Realized gains 
& losses on security transactions are determined on the identified cost basis.
 Dividend income is recorded on the ex-dividend date.  Interest income is deter-
mined on the accrual basis.  Discount on fixed income securities is amortized.

 Dividends and Distributions to Shareholders: The Fund records all dividends and
 distributions payable  to shareholders on the ex-dividend date.  Permanent book
 and tax  differences relating to  shareholder distributions  may result  in re-
 classifications to paid in capital  and may affect the per-share allocation be-
 tween net investment income and realized and unrealized gain/loss.  Undistribu-
 ted net investment income and accumulated  undistributed net realized gain/loss
 on investment transactions may include temporary book and tax differences which
 reverse in subsequent periods.  Any taxable  income or gain remaining at fiscal
year end is distributed in the following year.                                

Federal Income Taxes: It is the Fund's intention to qualify as a regulated in-
 vestment company and  distribute all of  its taxable income.  The Fund has com-
 plied to date with the  provisions of the  Internal Revenue  Code applicable to
 investment companies and accordingly, no provision  for Federal income taxes is
required in the financial statements.                                         

 Use of Estimates: The preparation of  financial statements in  conformity  with
 generally accepted accounting principles requires management  to make estimates
 and assumptions that affect the reported amounts of  assets and liabilities and
 disclosure  of contingent assets and  liabilities at the date of the  financial
 statements and the reported  amounts of increases  and decreases  in net assets
 from operations  during the reporting  period.  Actual results  may differ from
those estimates.                                                              

 2. MANAGEMENT FEE AND TRANSACTIONS WITH AFFILIATES - Under the terms of the
investment management agreement, Valley Forge Management Corp. ("the Manager")  
has agreed to provide the Fund investment  management services and be respons-  
ible for the day to day operations of the Fund.  The Manager will receive a fee,
payable monthly, for proiding investment advice at anannual rate of 1% based on 
the average daily assets of the Fund.  The fee will be accrued daily and paid   
monthly.  A management fee of $47,413 was paid for the six months ended June 30,
2005.                                                                           

The Manager also provided transfer agency, portfolio pricing, administration,   
accounting, financial reporting, tax accounting, and compliance services to the 
Fund at no charge for the six months ended June 30, 2005.  Mr. Bernard Klawans  
is sole owner, director and officer of the Manager and President of the Fund.   
    This is an unaudited financial statement

- 6 - 

 VALLEY FORGE FUND
 NOTES TO FINANCIAL STATEMENTS (Continued) - JUNE 30, 2005

3. INVESTMENT TRANSACTIONS - Purchases and sales of investment securities   
(excluding short-term securities) for the six months ended June 30, 2005 were   
$641,964 and $940,469 respectively.                                             

4. CAPITAL SHARE TRANSACTIONS - As of June 30, 2005, there were 10,000,000  
shares of $.001 per value capital stock authorized.  The total par value and    
paid-in capital equaled $10,048,592.  Transactions in capital stock were as     
follows for the six months ended:                                               

                                       June 30, 2005         June 30, 2004
                                       Shares     Amount     Shares     Amount
                                      ------------------    ------------------
Shares sold                             18,009 $  156,313     51,772 $  459,818 
Shares issued in dividend reinvestment       0          0          0          0 
Shares redeemed                        (35,842)  (310,656)   (42,316)  (376,419)
                                       _________________________________________
Net increase (decrease)                (17,833) ($154,343)     9,456  $  83,399 
                                       =========================================

5. FEDERAL INCOME TAXES - Income and long-term capital gsain distributions are  
determined in accordance with Federal income tax regulations, which may differ  
from accounting principles generally accepted in the United States.  At the end 
of this period, net unrealized depreciation for Federal income tax purposes     
aggregated $703,523 of which $695,012 related to unrealized appreciation of     
securities and $1,398,535 related to unrealized  depreciation of securities.    
The cost of investments at June 30, 2005 for Federal income tax purposes was    
$9,921,518, excluding short-term investments.  As of June 30, 2005 the taxable  
components of distributable earnings were:                                      

Undistributed ordinary income         $   85.640  
Undistributed long-term capital gain  $   48,141  
Undistributed depreciation            $ (703,443) 

The tax character of distributions paid during the years ended December 31, 2004
and 2003 were as follows:                                                       
                    2004      2003
Qualified dividends             $ 74,427   $104,992             
Long-term capital gains         $ 68,941   $ 52,206             

     Ten Year $10,000 Investment Performance Growth Record

DJIA   I 10000 12941 17560 20487 25107 23909 25427 23685 23019 26726 26351
I                                                           
VFF    I 10000 10643 11832 11844 12938 11898 13469 14256 13545 15735 16094
       I _________________________________________________________________
                1996  1997  I998  1999  2000  2001  2002  2003  2004  2005
        June 30 Date

       Average Annual Return Chart for

     1 Year 2.28%      5 Year 7.05%      10 Year 6.09%

Please note that the average annual returns above do not gurantee that the      
Valley Forge Fund will perform the same in the future.  They just present how   
the Fund actually performed in the past ten years.                              
 - 7 -

THE FUND'S BOARD OF DIRECTORS INFORMATION 

Business and affairs of the Fund are managed under the direction of the Board of
Directors.  Data pertaining to each Director is set forth below and is amplified
in the Fund's Statement of Additional Information.  These data are also avail-  
able without charge, by calling 1-800-548-1942.  In addition, each Director may 
be contacted by writing to him directly c/o the Valley Forge Fund.              

 Interested Directors & Officers

Name, Address      Position      Term  of Office       Principal        Other 
   and Age         with  Fund      and Length of        Occupation     Director-
                                  Time Served        Past 5 Years      ships

*Bernard B. Klawans Director   Elected for One Year     Pres Valley       None  
84          President  Served  Since Incep-     Forge  Fund     
                     tion May 15, 1973     Valley Forge PA

*Sandra K. Texter   Treasurer  Elected for One Year    System Analyst     None  
55                         Served Since        Lockeed Martin   
                          Jan 30, 2001      King of Prussia PA

 Independent Directors

Victor J. Belanger  Director   Elected for One Year     Retired Chief     None  
64                         Served Since         Financial Off   
                         Aug 18, 1980        Linearizer Tech

Dr. James P. King   Director   Elected for One Year        President      None  
73                     Served  Since Incep-    Desilube Tech Inc
                     tion  May 15, 1973        Lansdale PA

C. William Majer    Director   Elected for One Year        President      None  
69                         Served Since          Majerplus LTD  
                         June 21, 2005         Philadelphia PA

Donald A. Peterson    COB      Elected for One Year    Program  Manager   None  
Age 65             &           Served Since        DRS Technologies     
            Director       Aug 15, 1974       King of Prussia PA

* "Interested persons" in the Fund as defined in the Investment Company Act of  
1940 are Mr. Klawans because of his ownership of the Fund's Investment Adviser  
and Mrs. Texter because she is the daughter of Mr. Klawans.                     

PROXY VOTING GUIDLINES

The Fund's votint policies and procedures and how these policies were applied in
voting on securities in the Fund's portfolio is available without charge by     
calling 1-800-552-1948 or by visiting the Secirities & Exchange  Commission     
(SEC) website (http://www.sec.gov).                                             

QUARTERLY PORTFOLIO SCHEDULE  

The Fund now files a complete schedule of investments with the SEC for the first
and third quarters of each fiscal year on Federal Form N-Q.  These forms are    
available on the SEC's website at http://www.sec.gov.  They may be reviewed and 
copied on the SEC's Public Reference Room (PRR)in Washington DC.  Information   
on the operation of the PRR may be obtained by calling 1-800-723-0330.          

 - 8 -

Item 2. Code of Ethics.                                                         

CODE OF ETHICS
Pursuant to  the requirements of Sections 406 and 407 of the Sarbanes-Oxley Act 
of 2002 the Vally Forge Fund, (the "Fund"), hereby adopts the following Code of 
Ethics that applies to the Fund's principal executive, financial and accounting 
officers or persons performing similar functions regardless of whether these    
individuals are employed by the Fund or a third party in order to prepare these 
written standards that are reasonably designed to deter wrongdoing and to       

a) Honest and ethical conduct, including the ethical handling of actual or      
apparent conflicts of interest between personal and professional relationships; 

b) Full, fair, accurate, timely and understandable disclosure in reports and    
documents that the Fund files with, or submits to, the Securities & Exchange    
Commission and in all public communications;                                    

c) Compliance with all applicable governmental laws, rules and regulations;     

d) Prompt internal reporting of violations of the code, should any ever occur,  
to all principal officers of the Fund and all appropriate persons identified in 
the code; and                                                                   

e) The principal executive officer of the Fund will be held accountable for     
adherence to the code as presented above.                                       

Item 3. Audit Committee Financial Expert.                                       

The Fund is small and has had a flawless financial record since inception 33    
years ago.  The current principal executive officer has prepared all financial  
documents ever issued by the Fund, and has been doing so since the Fund's for-  
mation.  The current Fund auditor is Michael Baranowsky of Sanville & Company,  
whose reports and communications indicate gtotal satisfacation with the reports 
he has received.  Victor Belanger, retired Chief Financial Officer, Linearizer  
Technology Inc. in Hamilton NJ is an "independent" member of the Board of       
Directors of the Valley Forge Fund who has performed several independent audits 
including those of the Fund's securities held in self custodianship in the past 
twenty years.  He always reported satisfactory findings to the Board of Direct- 
ors.  This 33 year record is believed to be sufficient rational to preclude the 
need for an Audit Committee or an Audit Committee Financial Expert to monitor   
future Fund finances unless the Fund should exceed 15 million in total assets.  

Item 4. Principal Accountant Fees and Services.                                 

Sanville & Co. has charged $8,000 in 2004 and $9,150 in 2003 for professional   
services rendered in providing annual audits along with services required in    
"fingering" certificates as required in Rule 17f-2 for self custodianship of    
Fund securities.                                                                

Item 10. Submission of Matters to a Vote of Security Holders.                   

Matters submitted to shareholders for votes are done through proxies that are   
filed on Edgar as DEF-14A filings.  In each of these filings, shareholders are  
invited to submit proposals of their choice in accordance with Rule 14a-8 under 
the Securities & Exchange Act of 1934 which sets forth certain requirements.    

 - 9 -

Item 11. Controls and Procedures.                                               

Bernard B. Klawans is the president of the Fund.  He handles all financial mat- 
ters of the Fund and has provided excellent internal control procedures to pro- 
duce accuracy and safety in all financial matters involving Fund operations.  He
is also president and owner of the Investment Adviser, the Valley Forge Manage- 
ment Corporation that has provided the function of Transfer Agent "pro bono" to 
the Fund.  He has provided the additional control of requiring the signatures of
either the Treasureer, Sandra Texter or Ellen Klawans that holds no position in 
the Fund or Adviser as well as his on all checks issued by the Fund.            
Auditors have reviewed the Internal Control exercised by the Fund every year    
since it was installed as a filing requirement by the Securities & Exchange     
Commission and found it to be satisfactory for a small (less that 15 million    
dollars in total assets) fund.                                                  

Item 12. Exhibits.                                                              

A. Code of Ethics.                                                        
Filed under Item 2 Code of Ethics above                             

B. Certification.                                                         

CERTIFICATIONS EXHIBIT  

I, Bernard B. Klawans certify that:   

1. I have prepared this report on Form N-CSR of the Valley Forge Fund, Inc.;    

2. Based on my knowledge, this report does not contain any untrue statement, a  
material fact or omit to state a material fact necessary to make the statement  
made, in light of the circumstances under which such statements were made, mis- 
leading with respect to the period covered by this report;                      

3. Based on my knowledge, the financial statements, and other financial infor-  
mation presented, fairly show in all material respects as of, and for the peri- 
ods included in this report.  Cash flow information is not considered pertainent
to this document or the registrant;                                             

4. The Fund is small being under 15 million dollars in total assets.  Mr.       
Klawans is the certifying officer of the Fund.  The Board, in view of the small 
size of the Fund determined that the clean operation by him over the past 33    
years, the continuing history of certified audits and the auditors satisfaction 
as stated in their statement of internal control exercised by the Fund, made it 
unnecessary to have more certifying officers.  Mr. Klawans therefore is respons-
ible for establishing and maintaining disclosure controls and procedures (as    
defined in Rule 30a-2(c) under the Investment Company Act of 1940) for the re-  
gistrant and has:                                                               
 a) Designed such disclosure controls and procedures to ensure that material
information relating to the registrant is made known to him by all others 
   associated with the Fund, particularly during the period which this report is
being prepared;                                                           
b) Evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this   
report (the "Eveluation Date"); and                                       
 c) Evaluated and believes that the effectiveness of the disclosure controls
and procedures produces a satisfactory evaluation of the Fund's financials
  reported in the audited annual report given above as of the Evaluation Date;

5. The Board of Directors and Mr. Klawans have discused, based on their most    
recent evaluation, that:                                                        

- 10 -

a) They were satisfied that there were no significant deficiencies in     
  the design or operation of internal controls which could adversly affect the
registrrant's ability to record, process, summarize, and report financial 
data; and                                                                 

b) There was no fraud, whether or not material, that involves management  
or other employees who might have a role in internal controls;            

6. The registrant's Board of Directors and Mr. Klawans hereby state in this re- 
port that there are no changes in internal controls or other factors that signi-
ficantly affect internal controls subsequent to the date our most recent evalua-
tion, including any corrective actions with regard to significant deficiencies  
and material weaknesses.                                                        

Date:                                                  06/30/05           
                                            /s/ Bernard B. Klawans
                                             President

SIGNATURES      

Pursuant to the requirements of the Securities Exchange Act of 1934 and the     
Invsstment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.             

(Registrant)                                  Valley Forge Fund, Inc.           

By (Signature and Title)                      /s/ Bernard B. Klawans            
                                      Bernard B. Klawans
                             President

Date                                              06/30/05                      

Dates Referenced Herein   and   Documents Incorporated By Reference

This N-CSR Filing		Date		Other Filings
		12/31/03		NSAR-B, N-CSR
		6/30/04		N-PX, N-CSR, NSAR-A
		12/31/04		N-CSR, NSAR-B
		1/1/05
		6/21/05
For The Period Ended		6/30/05		NSAR-A, N-PX
Filed On / Filed As Of / Effective As Of		7/11/05
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