<DOCUMENT>
<TYPE>EX-99.77.B
<SEQUENCE>3
<FILENAME>ex77-803.txt
<DESCRIPTION>INTERNAL CONTROL REPORT
<TEXT>
INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROL

To the Board of Directors
The Herzfeld Caribbean Basin Fund, Inc.

In planning and performing our audit of the financial statements of The Herzfeld
Caribbean  Basin Fund,  Inc. for the year ended June 30, 2003, we considered its
internal control,  including control activities for safeguarding securities,  in
order to determine our auditing  procedures  for the purpose of  expressing  our
opinion on the financial  statements and to comply with the requirements of Form
N-SAR, not to provide assurance on internal control.

The management of The Herzfeld  Caribbean  Basin Fund,  Inc. is responsible  for
establishing   and   maintaining    internal   control.   In   fulfilling   this
responsibility, estimates and judgments by management are required to assess the
expected  benefits and related costs of controls.  Generally,  controls that are
relevant to an audit  pertain to the entity's  objective of preparing  financial
statements for external  purposes that are fairly  presented in conformity  with
accounting principles generally accepted in the United States of America.  Those
controls  include the safeguarding of assets against  unauthorized  acquisition,
use or disposition.  Because of inherent limitations in internal control,  error
or fraud may occur and not be detected.  Also,  projection of any  evaluation of
internal  control  to future  periods  is subject to the risk that it may become
inadequate  because of changes in  conditions or that the  effectiveness  of the
design and operation may deteriorate.

Our consideration of internal control would not necessarily disclose all matters
in  internal   control  that  might  be  material   weaknesses  under  standards
established  by the  American  Institute  of  Certified  Public  Accountants.  A
material weakness is a condition in which the design or operation of one or more
of the internal  control  components  does not reduce to a relatively low level,
the risk that  misstatements  caused by error or fraud in amounts  that would be
material in relation to the financial statements being audited may occur and not
be  detected  within a timely  period  by  employees  in the  normal  course  of
performing  their assigned  functions.  However,  we noted no matters  involving
internal  control  and  its  operation,   including  controls  for  safeguarding
securities,  that we consider to be material  weaknesses  as defined above as of
June 30, 2003.

This report is intended solely for the information and use of management and the
Board of Directors of The Herzfeld Caribbean Basin Fund, Inc. and the Securities
and  Exchange  Commission,  and is not  intended to be and should not be used by
anyone other than these specified parties.

Miami, Florida
July 18, 2003

</TEXT>
</DOCUMENT>
