EXHIBIT 99.3
                              ------------
                           COMMERCE GROUP CORP.
                          6001 NORTH 91ST STREET
                         MILWAUKEE, WI  53225-1795
                      414/462-5310 . FAX 414/462-5312
  Stock Symbols:  CGCO (OTC BB) . CMG OR CMG.BN (Boston Stock Exchange)


AND/OR COMMERCE/SANSEB JOINT VENTURE (Joint Venture)
AND/OR HOMESPAN REALTY CO., INC. (Homespan)
AND/OR ECOMM GROUP INC. (Ecomm)
AND/OR SAN LUIS ESTATES, INC. (SLE)
AND/OR SAN SEBASTIAN GOLD MINES, INC. (Sanseb)
AND/OR UNIVERSAL DEVELOPERS, INC. (UDI)
ALL LOCATED AT THE SAME ADDRESS

May 8, 2000


Mr. Edward L. Machulak
Edward L. Machulak Rollover
Individual Retirement Account
903 West Green Tree Road
River Hills, Wisconsin  53217

Dear Mr. Machulak:

At today's Commerce Group Corp. (Commerce) Directors' meeting, the
Directors were informed about the confirmation, disclosure and status
letter you requested from Commerce and its affiliates to establish and
confirm the amount due and the collateral pledged to  the Edward L.
Machulak Rollover Individual Retirement Account (ELM RIRA) as of
Commerce's fiscal year ended March 31, 2000.  Today, Commerce's Directors
approved, ratified and confirmed the contents of this letter and
authorized me to authenticate and confirm the outstanding obligations due
to the ELM RIRA, and the collateral pledged to the ELM RIRA as of
Commerce's fiscal year ended March 31, 2000, which are as follows:

1.  Promissory Notes and Other Obligations

    The total amount of all of the open-ended, secured, on-demand
    promissory notes, together with interest due to the ELM RIRA, amounts
    to $646,141.24 as of March 31, 2000.  These promissory notes, since
    April 1, 1994, bear interest, payable monthly, at the rate of 4% over
    the prime base interest rate established from time to time by the
    First National Bank of Chicago, Chicago, Illinois, (now Bank One),
    but not less than 16% per annum (Schedule of Principal and Interest
    as of March 31, 2000, Exhibit A).

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2.  Collateral Pledged to the ELM RIRA

    General Lumber & Supply Co., Inc. (GLSCO), Edward L. Machulak (ELM)
    as an individual and not as a Director or Officer of Commerce, the
    ELM RIRA and the Sylvia Machulak Rollover Individual Retirement
    Account (SM RIRA) collectively and individually identified as the
    lender(s), have been assigned on October 19, 1987, all of the rights,
    titles, claims, remedies and interest in and to the mine concession
    which was granted by the Government of El Salvador to Mineral San
    Sebastian, S.A. de C.V.  (Misanse) on July 23, 1987, and thereafter
    from time to time amended, and which Misanse then assigned to the
    Joint Venture on September 22, 1987.  This collateral specifically
    includes all of the San Sebastian Gold Mine precious metal ore
    reserves.  Commerce and the Joint Venture have the right to assign
    this and any subsequent concession agreement.  Reference is made to
    Exhibit 2 included in the April 9, 1990 confirmation letter.
    Effective February 1996, the Government of El Salvador approved a rev
    ised version of the mining law.  Therefore, Commerce applied for the
    San Sebastian Gold Mine mining concession applicable to this mining
    law.  This concession is subject to compliance requirements which
    have been presented to the El Salvador Director of Mines and
    Hydrocarbons.  Therefore, it is clearly understood that this
    concession, and all of the rights thereunder, in addition to the
    concession granted on July 23, 1987, together with all precious metal
    ore reserves, is pledged as collateral to all of the parties
    mentioned herein.

3.  Cross Pledge Collateral Agreement

    GLSCO, ELM, the ELM RIRA and the SM RIRA individually are entitled to
    specific collateral that has been pledged to them by Commerce, its
    subsidiaries, affiliates and the Joint Venture.  Upon default by
    Commerce, or its subsidiaries or affiliates or the Joint Venture,
    GLSCO, ELM, the ELM RIRA and the SM RIRA have the first right to the
    proceeds from the specific collateral pledged to each of them.
    Commerce, its subsidiaries, affiliates and the Joint Venture, also
    have cross-pledged the collateral without diminishing the rights of
    the specific collateral pledged to each of the following:  GLSCO,
    ELM, the ELM RIRA and the SM RIRA.  The purpose and the intent of the
    cross pledge of collateral is to assure GLSCO, ELM, the ELM RIRA and
    the SM RIRA, that each of them would be paid in full; thus, any
    excess collateral that would be available is for the purpose of
    satisfying any debts and obligations due to each of the named
    parties.  The formula to be used (after deducting the payments made
    from the specific collateral) is to total all of the debts due to
    GLSCO, ELM, the ELM RIRA and the SM RIRA, and then to divide this
    total debt into each individual debt to establish each individual's
    percentage of the outstanding debt due.  This percentage then will be
    multiplied by the total of the excess collateral to determine the
    amount of proceeds derived from the excess collateral and then the
    amount due to each of them would be distributed accordingly.

<PAGE>

4.  Cancellation of Inter-Company Debts Upon Default

    Since part of the collateral pledged to GLSCO, ELM, the ELM RIRA and
    the SM RIRA is the common stock of Homespan, Ecomm, Sanseb, SLE,
    Misanse, UDI and the interest in the ownership of the Joint Venture,
    Commerce agreed, upon default of the payment of principal or interest
    to any of the individual lender(s) mentioned herein, that it will
    automatically cancel any inter-company debts owed to Commerce by any
    of its wholly-owned subsidiaries or affiliates or the Joint Venture
    at such time as any of the stock or Joint Venture ownership is
    transferred to the collateral holders as a result of default of any
    promissory note.

5.  Guarantors

    This agreement further confirms that Commerce and all of the
    following are guarantors to the loans made by the ELM RIRA to
    Commerce: Joint Venture, Homespan, Ecomm, SLE, Sanseb and UDI.  They
    jointly and severally guarantee payment of the note(s) that were
    issued and also agree that these note(s) may be accelerated in
    accordance with the provisions contained in the agreement and/or any
    collateral or mortgages securing these notes.  Also, Commerce, all of
    its subsidiaries and the Joint Venture agree to the cross pledge of
    collateral for the benefit of GLSCO, ELM, the ELM RIRA and the SM
    RIRA.  Reference is made to Exhibit 3 included in the April 9, 1990
    confirmation letter.

6.  Omissions

    Commerce believes that it has included all of its obligations, monies
    due and has listed all of the collateral due to the ELM RIRA,
    however, since these transactions have taken place over a long period
    of time in which changes could have taken place, it is possible that
    inadvertently some item(s), particularly collateral, could have been
    omitted.  If that should prove to be a fact, then Commerce, the Joint
    Venture, Homespan, Ecomm, SLE, Sanseb, and UDI agree that those
    omissions of collateral, if any, are meant to be included as
    collateral with this confirmation and agreement.

<PAGE>

If you are in agreement with the contents of this letter, please sign
below and return one copy to Commerce.

Very truly yours,

COMMERCE GROUP CORP.

/s/ Edward A. Machulak
----------------------
Edward A. Machulak
Secretary

<PAGE>

The contents of this letter are agreed by the following:

COMMERCE/SANSEB JOINT VENTURE              HOMESPAN REALTY COMPANY, INC.
as Guarantor (Joint Venture)               as Guarantor (Homespan)

/s/ Edward L. Machulak                     /s/ Edward L. Machulak
_______________________________________    _________________________________
By: Edward L. Machulak, Auth. Designee     By: Edward L. Machulak, President


ECOMM GROUP INC.                           SAN LUIS ESTATES, INC.
as Guarantor (Ecomm)                       as Guarantor (SLE)

/s/ Edward A. Machulak                     /s/ Edward L. Machulak
____________________________________       _________________________________
By: Edward A. Machulak, Secretary          By: Edward L. Machulak, President


SAN SEBASTIAN GOLD MINES, INC.             UNIVERSAL DEVELOPERS, INC.
as Guarantor (Sanseb)                      as Guarantor (UDI)


/s/ Edward L. Machulak                     /s/ Edward L. Machulak
____________________________________       __________________________________
By:  Edward L. Machulak, President         By:  Edward L. Machulak, President


Accepted by:

/s/ Edward L. Machulak
_______________________________________
Edward L.  Machulak Rollover Individual
Retirement Account
Date:  May 8, 2000


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                         Exhibit A to Exhibit 99.3
         (Schedule of Principal and Interest as of March 31, 2000
              has been purposely omitted as it only reflects
             the calculations of the principal and interest.)