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American Funds Distributors, Inc.
333 South Hope Street
Los Angeles, California 90071
Telephone 800/421-5475, ext. 59

Institutional selling group agreement


Ladies and Gentlemen:

We have entered into a principal underwriting agreement with each Fund in The
American Funds Group (Funds) under which we are appointed exclusive agent for
the sale of shares. You have indicated that you wish to act as agent for your
customers in connection with the purchase, sale and redemption of shares of the
Funds as are qualified for sale in your state. We agree to honor your request,
subject to the terms of this Selling Group Agreement (Agreement) set forth
below.

1.       Authorization

a.   As a member  of a group of firms  authorized  to make  shares  of the Funds
     available  to  institutional  customers  (Selling  Group),  you  will  make
     available to retirement plans (each a Plan, and collectively, Plans) shares
     of the Funds only as described in this Section 1. In placing orders for the
     purchase  and sale of shares of the Funds,  you will be acting as agent for
     your customers.  We shall execute  transactions  for each of your customers
     only  upon  your  authorization,  at the  regular  public  price  currently
     determined  by the  respective  Funds  in the  manner  described  in  their
     offering prospectuses  (Prospectuses).  This Agreement on your part runs to
     us and to the respective Funds and is for the benefit of and enforceable by
     each.  The offering  Prospectuses  and this  Agreement  set forth the terms
     applicable  to sales of  shares  of the  Funds  through  you and all  other
     representations or documents are subordinate.

b.   Except  as  provided  for in  paragraphs  c and d of this  Section:  (1) if
     approved by us in writing prior to bidding, you will make Class A shares of
     the Funds  available  only to a Plan of an  entity  whose  retirement  plan
     assets are already  invested in Class A shares and which total at least $50
     million,  and (2) you will make Class R shares of the Funds  available only
     to a Plan of an entity  whose  retirement  plan  assets  total at least $50
     million.

c.   For a Plan of an entity  whose  retirement  plan assets total less than $50
     million, we may, at our discretion,  approve in writing your making Class A
     shares  available  to the Plan if the entity's  retirement  plan assets are
     already  invested in Class A shares and if the Plan uses the services of an
     independent  financial  intermediary  (e.g.,  broker,   financial  advisor,
     consultant,  or RIA). The financial  intermediary  must provide us with the
     following  information  in writing prior to any approval we might give: (1)
     the name of the financial intermediary and the firm with whom the financial
     intermediary is affiliated, (2) the name of the proposed Plan, (3) the name
     of the  Fund(s)  and  share  class  (i.e.,  Class A or R) in which the Plan
     intends to invest, (4) a statement that identifies you or another entity as
     the one providing  recordkeeping  services to the Plan, and (5) a statement
     from the financial  intermediary that acknowledges you as the broker-dealer
     of record and that no compensation under this Agreement will be paid to the
     financial intermediary from American Funds.

d.   For a Plan of an entity  whose  retirement  plan assets total less than $50
     million, we may, at our discretion,  approve in writing your making Class R
     shares  available  to the Plan if it uses the  services  of an  independent
     financial  intermediary (e.g., broker,  financial advisor,  consultant,  or
     RIA). The financial  intermediary  must provide us in writing with the same
     information listed in paragraph c prior to any approval we might give.

2.   Compensation on Class A Shares

     In consideration of your acting as agent for your customers in connection
     with the purchase and redemption of Fund shares and to compensate you for
     providing certain services to your customers, we will pay you compensation
     as described below, subject to your compliance with the following terms.
     Your eligibility to continue receiving this compensation will be evaluated
     periodically, and your failure to comply with the terms below may result in
     our discontinuing ongoing payments to you. Initial qualification does not
     assure continued participation, and the payment of this compensation is
     subject to the limitations contained in each Fund's Plan of Distribution
     and may be varied or discontinued by us at any time.

a.   You agree to  cooperate  as  requested  with  programs  that we  provide to
     enhance  shareholder  service.  You also agree to assume an active  role in
     providing  shareholder  services such as processing purchase and redemption
     transactions,  establishing  shareholder  accounts,  and providing  certain
     information and assistance with respect to the Funds.

b.   You agree to support our marketing efforts by granting  reasonable requests
     for visits to your offices by our wholesalers.

c.   You agree to assign an individual to each Plan account on your books and to
     reassign the account  should that  individual  no longer be assigned to the
     account.  You agree to instruct each such  individual to regularly  contact
     shareholders having accounts so assigned.

d.   You  agree  to  pass  through   either   directly  or   indirectly  to  the
     individual(s) assigned to such accounts a share of the compensation paid to
     you pursuant to this  Agreement.  You recognize  that  payments  under this
     Agreement are intended to compensate  the  individual  for  providing,  and
     encourage  the  individual  to continue to provide,  service to the account
     holder.

e.   You  acknowledge  that (i) all  compensation  is subject to the limitations
     contained  in  each  Fund's  Plan of  Distribution  and  may be  varied  or
     discontinued  at any  time,  (ii) in  order  to  receive  a  payment  for a
     particular  month,  the payment must amount to at least $100,  and (iii) no
     compensation  will be paid on shares  purchased  under the net asset  value
     purchase  privilege  as described in the Funds'  statements  of  additional
     information.

f.   You will be paid a monthly  fee in  respect of Class A shares of Funds held
     in accounts  that are  assigned to you. The fee shall be the product of the
     average  daily net asset value of Class A shares of Funds in Category 1 and
     Category  2 on the  attached  Schedule  A held  in  such  accounts  for the
     applicable  month  multiplied by one-twelfth of 0.25%. The rate for Class A
     shares  of  Funds  in  Category  3 on the  attached  Schedule  A  shall  be
     one-twelfth of 0.15%.


3.   Retirement   Plan  Share  Classes  (R  shares)  and  Account  Options  (for
     retirement plans only)

a.   We  will  pay  you  ongoing  compensation  on a  quarterly  basis,  at  the
     applicable  annual rate set forth  below,  of the  average  daily net asset
     value of R shares of Funds listed in Category 1,  Category 2 and Category 3
     on the attached  Schedule A that are held in a Plan account assigned to you
     at the end of the  quarter for which  payment is made.  The payment of this
     ongoing compensation is subject to the limitations contained in each Fund's
     Plan of  Distribution  and may be varied or  discontinued  at any time.  We
     expect that you will  maintain one account for each of your Plan  customers
     on the books of the Funds.

     R Share Class                   Annual Compensation Rate
       Class R-1                               1.00%
       Class R-2                               0.75%
       Class R-3                               0.50%
       Class R-4                               0.25%
       Class R-5                       No compensation paid

b.   If you hold Plan accounts in an omnibus  account  (i.e.,  multiple Plans in
     one account on the books of the Funds), Plans that are added to the omnibus
     account  after  May 15,  2002 may  invest  only in R  shares,  and you must
     execute an Omnibus Addendum to the Selling Group  Agreement,  which you can
     obtain by calling our Home Office Service Team at  800/421-5475,  extension
     59.

4.   Order Processing

     Any order by you for the purchase of shares of the respective Funds through
     us shall be accepted at the time when it is received by us (or any
     clearinghouse agency that we may designate from time to time), and at the
     offering and sale price next determined, unless rejected by us or the
     respective Funds. In addition to the right to reject any order, the Funds
     have reserved the right to withhold shares from sale temporarily or
     permanently. We will not accept any order from you that is placed on a
     conditional basis or subject to any delay or contingency prior to
     execution. The procedure relating to the handling of orders shall be
     subject to instructions that we shall forward from time to time to all
     members of the Selling Group. The shares purchased will be issued by the
     respective Funds only against receipt of the purchase price, in collected
     New York or Los Angeles Clearing House funds. If payment for the shares
     purchased is not received within three days after the date of confirmation
     the sale may be cancelled forthwith, by us or by the respective Funds,
     without any responsibility or liability on our part or on the part of the
     Funds, and we and/or the respective Funds may hold you responsible for any
     loss, expense, liability or damage, including loss of profit suffered by us
     and/or the respective Funds, resulting from your delay or failure to make
     payment as aforesaid. If this section conflicts with provisions of any
     operational agreement you have with any of our affiliates, such operational
     agreement shall control.

5.   Timeliness of Submitting Orders

     You are obliged to date and indicate the time of receipt of all orders you
     receive from your customers and to transmit promptly all orders to us in
     time to provide for processing at the price next determined after receipt
     by you, in accordance with the Prospectuses. You are not to withhold
     placing with us orders received from any customers for the purchase of
     shares. You shall not purchase shares through us except for the purpose of
     covering purchase orders already received by you, or for your bona fide
     investment.

6.   Repurchase of Shares

     If any share is repurchased by any of the Funds or is tendered thereto for
     redemption within seven business days after confirmation by us of the
     original purchase order from you for such security, you shall forthwith
     refund to us the full compensation paid to you on the original sale.

7.   Processing Redemption Requests

     You shall not purchase any share of any of the Funds from a record holder
     at a price lower than the net asset value next determined by or for the
     Funds' shares. You shall, however, be permitted to sell any shares for the
     account of a shareholder of the Funds at the net asset value currently
     quoted by or for the Funds' shares, and may charge a fair service fee for
     handling the transaction provided you disclose the fee to the record owner.

8.   Prospectuses and Marketing Materials

     We shall furnish you without charge reasonable quantities of offering
     Prospectuses (including any supplements currently in effect), current
     shareholder reports of the Funds, and sales materials issued by us from
     time to time. In the purchase of shares through us, you are entitled to
     rely only on the information contained in the offering Prospectus(es). You
     may not publish any advertisement or distribute sales literature or other
     written material to the public that makes reference to us or any of the
     Funds (except material that we furnished to you) without our prior written
     approval.

9.   Effect of Prospectus

     This Agreement is in all respects subject to statements regarding the sale
     and repurchase or redemption of shares made in offering Prospectuses of the
     Funds, which shall control and override any provision to the contrary in
     this Agreement.

10.  Relationship of Parties

     You shall make available shares of the Funds only through us. In no
     transaction (whether of purchase or sale) shall you have any authority to
     act as agent for, partner of, or participant in a joint venture with us or
     with the Funds or any other entity having either a Selling Group Agreement
     or other agreement with us.

11.  State Securities Qualification

     We act solely as agent for the Funds and are not responsible for qualifying
     the Funds or their shares for sale in any jurisdiction. Upon written
     request we will provide you with a list of the jurisdictions in which the
     Funds or their shares are qualified for sale. We also are not responsible
     for the issuance, form, validity, enforceability or value of Fund shares.

12.  Representations

a.   You represent that you are (a) a properly  registered or licensed broker or
     dealer under  applicable  federal and state securities laws and regulations
     and are  complying  with and will  continue to comply  with all  applicable
     federal and state laws,  rules and  regulations;  a member of the  National
     Association of Securities  Dealers,  Inc. (NASD);  and your membership with
     the NASD is not  currently  suspended  or  terminated;  or (b) a "bank"  as
     defined in Section 3(a)(6) of the Securities Exchange Act of 1934 (or other
     financial  institution) and not otherwise  required to register as a broker
     or  dealer  under  such Act or any  state  laws.  You  agree to  notify  us
     immediately in writing if any of the foregoing representations ceases to be
     true to a material extent.  You also agree that, if you are a bank or other
     financial  institution  as set  forth  above,  you  will  comply  with  the
     applicable rules of the NASD, that you will maintain  adequate records with
     respect  to  your   customers  and  their   transactions,   and  that  such
     transactions  will be without  recourse  against you by your customers.  We
     recognize  that, in addition to applicable  provisions of state and federal
     securities  laws,  you may be  subject  to the  provisions  of  other  laws
     governing,  among other  things,  the conduct of activities by federal- and
     state-chartered and supervised financial  institutions and their affiliated
     organizations.  Because  you  will  be the  only  entity  having  a  direct
     relationship  with the customer in  connection  with  securities  purchases
     hereunder,  you  will be  responsible  in that  relationship  for  ensuring
     compliance  with  all  applicable   federal  and  state  laws,   rules  and
     regulations relating to securities purchases hereunder.

b.   We represent that (a) we are acting as an underwriter within the meaning of
     the  applicable  rules of the NASD and are complying with and will continue
     to  comply  with  all  applicable   federal  and  state  laws,   rules  and
     regulations,  (b) we are a member of the NASD and (c) our  membership  with
     the NASD is not currently  suspended or terminated.  We agree to notify you
     immediately in writing if any of the foregoing representations ceases to be
     true to a material extent.


13.  Confidentiality

     Each party to this Agreement agrees to maintain all information received
     from the other party pursuant to this Agreement in confidence, and each
     party agrees not to use any such information for any purpose, or disclose
     any such information to any person, except as permitted by applicable laws,
     rules and regulations. This provision shall survive the termination of this
     Agreement.

14.  Termination

     Either of us may cancel this Agreement at any time by written notice to the
other.

15.  Notices

     All communications to us should be sent to the above address. Any notice to
     you shall be duly given if mailed or sent by overnight courier to you at
     the address specified by you below.


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Execute this Agreement in duplicate and return one of the duplicate originals to
us for our file. This Agreement (i) may be amended by notification from us and
orders received following such notification shall be deemed to be an acceptance
of any such amendment and (ii) shall be construed in accordance with the laws of
the State of California.



Very truly yours,
American Funds Distributors, Inc.


 By___________________________________________________________
     Kevin G. Clifford
     President



 Accepted

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            Firm


 By___________________________________________________________
             Officer or Partner

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             Print Name

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             Title


Address:

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Date:

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Schedule A
January 15, 2001
(supersedes Schedule A dated May 3, 1999)



Category 1                                  Category 2

AMCAP Fund                                  American High-Income Trust
American Balanced Fund                      Bond Fund of America
American Mutual Fund                        Capital World Bond Fund
Capital Income Builder                      Intermediate Bond Fund of America
Capital World Growth and Income Fund        U.S. Government Securities Fund
EuroPacific Growth Fund
Fundamental Investors
Growth Fund of America
Income Fund of America
Investment Company of America
New Economy Fund
New Perspective Fund
New World Fund
SMALLCAP World Fund
Washington Mutual Investors Fund



                     Category 3

                     Cash Management Trust of America
                     U.S. Treasury Money Fund of America