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 PICCADILLY ADVERTISING CO., INC. (Piccadilly)
Whose name was changed as of January 27, 1999  to 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 10, 1999


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, 1999.  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, 1999, 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 $550,950.83 as of March 31, 1999.  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,
     but not less than 16% per annum (Schedule of Principal and Interest
     as of March 31, 1999, Exhibit A).

<PAGE>

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.  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 an updated version of the mining
     law.  Therefore, Commerce applied for a mining concession applicable
     to this mining law at the San Sebastian Gold Mine.  The concession
     is subject to compliance which has 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,
     are to become collateral effective simultaneously upon receiving the
     concession to all of the parties herein mentioned.

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.

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 10, 1999

<PAGE>

                       Exhibit A to Exhibit 99.3
        (Schedule of Principal and Interest as of March 31, 1999
             has been purposely omitted as it only reflects
            the calculations of the principal and interest.)