UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM N-CSR

                   CERTIFIED SHAREHOLDER REPORT OF REGISTERED
                         MANAGEMENT INVESTMENT COMPANIES

                 Investment Company Act file number: 811-00041
                 ---------------------------------------------

                    GENERAL AMERICAN INVESTORS COMPANY, INC.

--------------------------------------------------------------------------------
               (Exact name of registrant as specified in charter)

         450 Lexington Avenue, Suite 3300, New York, New York 10017-3911
--------------------------------------------------------------------------------
               (Address of principal executive offices) (Zip code)

                                Eugene S. Stark
                    General American Investors Company, Inc.
                            450 Lexington Avenue
                                Suite 3300
                       New York, New York  10017-3911
                  (Name and address of agent for service)

                                    Copy to:
                           John E. Baumgardner, Jr., Esq.
                             Sullivan & Cromwell LLP
                                125 Broad Street
                            New York, New York 10004


        Registrant's telephone number, including area code: 212-916-8400

Date of fiscal year end:  December 31

Date of reporting period: December 31, 2006

 2
ITEM 1.  REPORTS TO STOCKHOLDERS.


                                     GENERAL
                                     AMERICAN
                                    INVESTORS

                                      2006
                                     ANNUAL
                                     REPORT

 3
                    GENERAL AMERICAN INVESTORS COMPANY, INC.

Established  in 1927, the Company is a closed-end  investment  company listed on
the New York Stock  Exchange.  Its objective is long-term  capital  appreciation
through investment in companies with above average growth potential.




   FINANCIAL SUMMARY (unaudited)
-------------------------------------------------------------------------------------
                                                      2006                   2005
                                                 -------------         --------------
                                                                 
   Net assets applicable to Common Stock -
      December 31                               $1,199,453,088         $1,132,941,654
   Net investment income                            10,007,624              5,408,018
   Net realized gain                                86,176,349             63,024,095
   Net increase in unrealized appreciation          51,196,338            103,638,830
   Distributions to Preferred Stockholders         (11,900,000)           (11,900,000)

   Per Common Share-December 31
      Net asset value                                   $40.54                 $39.00
      Market price                                      $37.12                 $34.54
   Discount from net asset value                         -8.4%                 -11.4%

   Common Shares outstanding-Dec. 31                29,589,198             29,050,399
   Common Stockholders of record-Dec. 31                 4,006                  4,100
   Market price range* (high-low)                $39.47-$34.80          $35.45-$29.37
   Market volume-shares                              6,313,300              7,242,000
   *Unadjusted for dividend payments.




   DIVIDEND SUMMARY (per share) (unaudited)
-------------------------------------------------------------------------------------
                                               Ordinary        Long-Term
   Record Date             Payment Date         Income        Capital Gain     Total
   ------------            ------------       ---------       ------------   --------
   Common Stock
                                                                  
   Nov. 10, 2006           Dec. 21, 2006    $.333952           $2.666048      $3.000000
                                            ========           =========      =========
   Nov. 11, 2005           Dec. 22, 2005    $.587543 (a)       $1.260182      $1.847725
   Jan. 30, 2006           Feb. 13, 2006        -                .138000        .138000
                                            --------           ---------      ---------
      Total from 2005 earnings              $.587543           $1.398182      $1.985725
                                            ========           =========      =========
        (a) Includes short-term gains in the amount of $.041294 per share.

   Preferred Stock

   Mar. 7, 2006            Mar. 24, 2006     $.039403           $.332472        $.371875
   Jun. 7, 2006            Jun. 26, 2006      .039403            .332472         .371875
   Sep. 7, 2006            Sep. 25, 2006      .039403            .332472         .371875
   Dec. 7, 2006            Dec. 26, 2006      .039403            .332472         .371875
                                             --------          ---------       ---------
      Total for 2006                         $.157612          $1.329888       $1.487500
                                             ========          =========       =========

   Mar. 7, 2005            Mar. 24, 2005     $.102969           $.268906        $.371875
   Jun. 7, 2005            Jun. 24, 2005      .102969            .268906         .371875
   Sep. 7, 2005            Sep. 26, 2005      .102969            .268906         .371875
   Dec. 7, 2005            Dec. 27, 2005      .102969            .268906         .371875
                                             --------          ---------       ---------
      Total for 2005                         $.411876 (b)      $1.075624       $1.487500
                                             ========          =========       =========
          (b) Includes short-term gains in the amount of $.028844 ($.007211 per quarter).


                    General American Investors Company, Inc.
                    450 Lexington Avenue, New York, NY 10017
                          (212) 916-8400 (800) 436-8401
                       E-mail: InvestorRelations@gainv.com
                        www.generalamericaninvestors.com
 4

1  TO THE STOCKHOLDERS
--------------------------------------------------------------------------------
   General American Investors

The U.S. stock market rose for a fourth  consecutive year,  gaining 15.7% in the
12 months ended December 31, 2006, as measured by our benchmark,  the Standard &
Poor's 500 Stock Index (including income). General American Investors' net asset
value (NAV) per Common Share (assuming  reinvestment of all dividends) increased
12.2%. The return to our Common Stockholders was 16.8%, reflecting a decrease in
the discount at which our shares trade, which, at year end, was 8.4%.

The table that follows,  which compares our returns on an annualized  basis with
the S&P 500,  illustrates  that over many years  General  American  has produced
superior investment results.

Years        Stockholder Return      S&P 500
---------------------------------------------
  3                 14.3%             10.3%
  5                  6.6               6.1
 10                 16.1               8.4
 20                 15.1              11.8
 30                 16.8              12.5
 40                 13.8              11.0

The share repurchase  program,  a part of our continuing effort to maximize NAV,
continues.  In 2006, the Company  purchased  787,700 of its Common Shares on the
open market at an average  discount to NAV of 9.0%.  The Board of Directors  has
authorized  repurchases  of Common Shares when they are trading at a discount to
NAV in excess of 8%.

Coming on the heels of an  exceptional  year in 2005,  last year's  results were
less satisfying,  although consistent with our record of long-term  performance.
Curiously, bad news in Iraq and the renewed threat of nuclear proliferation were
accompanied by good markets and relatively strong economic activity.  Trouble in
the housing  market,  as reflected in weakening  prices and  declining  building
activity,  did not  appear to affect  the rest of the  economy.  With  inflation
contained,  seemingly, and abundant liquidity as evidenced by the relatively low
cost of money, and the ease with which it could be borrowed,  consumer  spending
continued to support corporate profits and share prices.

As the new year unfolds,  the sanguine investment climate that characterized the
past few years is showing  signs of strain.  The  economy is likely to  continue
slowing and corporate profits,  generally,  are expected to moderate.  While the
Fed appears to have stopped raising interest rates, the prospect of decreases in
the immediate  future is far from clear.  Because  consumer  spending,  the main
driver of GDP growth, remains asset-dependent,  a protracted downturn in housing
could create the potential for collateral  damage to other parts of the economy.
Globalization and its progeny, outsourcing,  have held real wages and employment
growth, thus buttressing corporate profits. However, the risk of more persistent
inflation,  as labor costs rise in a low unemployment  setting,  cannot be ruled
out. Should our trading partners weary of funding the current account deficit by
continuing  to invest  the bulk of their  receipts  in U.S.  securities,  dollar
weakness would likely ensue. The rise in interest rates that would likely attend
such a decline  could  have a  seriously  destabilizing  effect  on the  capital
markets.

While the investment climate may be more volatile this year,  equities should be
supported by relatively  reasonable  valuations  and interest  rates that remain
agreeable.  Additionally,  share buybacks,  increasing dividends, and felicitous
mergers and  acquisitions,  all  resulting  from the current  elevated  level of
corporate  profits,  are likely to buoy share  prices.  Our  investments  remain
focused on well-managed companies with strong financial characteristics that can
generate  consistent  earnings  growth and cash flow. We are confident  that our
portfolio reflects these attributes,  which should result in continuing superior
performance on a long-term basis.

We are pleased to announce  that,  on December 13, 2006,  Andrew V. Vindigni was
promoted  to Senior  Vice-President  of the  Company.  Mr.  Vindigni  has been a
Vice-President  of the  Company  since 1995 and has been  employed in a research
capacity with the Company since 1988.

Mr.  Lawrence B.  Buttenwieser,  Chairman  since 1995 and a Director since 1967,
will not be standing for  re-election  at the annual  meeting on April 11, 2007.
His wisdom and  judgment  have been  invaluable  to the Board.  We express  our
gratitude and deepest appreciation for his long and distinguished service to the
Company.

We are saddened to report that Richard R. Pivirotto,  our esteemed colleague and
Director,  died on January 8, 2007. Mr. Pivirotto,  was a director of Associated
Community Bancorp, Inc. and Immunomedics, Inc., a Trustee of General Theological
Seminary and Greenwich  Hospital  Corporation,  and Charter Trustee  Emeritus of
Princeton  University.  He served as a director  of the Company for more than 35
years. His counsel and support will be missed.

Information about the Company,  including our investment  objectives,  operating
policies  and  procedures,  investment  results,  record of  dividend  payments,
financial reports and press releases,  etc., is available on our website,  which
can be accessed at www.generalamericaninvestors.com.

By Order of the Board of Directors,

Spencer Davidson
President and Chief Executive Officer
January 17, 2007
 5

2  THE COMPANY
--------------------------------------------------------------------------------
   General American Investors

CORPORATE OVERVIEW

General American  Investors,  established in 1927, is one of the nation's oldest
closed-end investment companies. It is an independent  organization,  internally
managed.  For regulatory  purposes,  the Company is classified as a diversified,
closed-end  management investment company; it is registered under and subject to
the regulatory provisions of the Investment Company Act of 1940.

INVESTMENT POLICY

The primary objective of the Company is long-term capital  appreciation.  Lesser
emphasis  is placed on  current  income.  In  seeking  to  achieve  its  primary
objective,  the Company  invests  principally  in common stocks  believed by its
management to have better than average growth potential.

The Company's investment approach focuses on the selection of individual stocks,
each of which is  expected  to meet a clearly  defined  portfolio  objective.  A
continuous  investment  research program,  which stresses  fundamental  security
analysis,  is  carried on by the  officers  and staff of the  Company  under the
oversight  of the Board of  Directors.  A listing  of the  directors  with their
principal  affiliations,  showing a broad range of  experience  in business  and
financial affairs, is on page 20.

PORTFOLIO MANAGER

Mr.  Spencer  Davidson  has  been  responsible  for the  management  of  General
American's  portfolio since he was elected President and Chief Executive Officer
of the Company in August 1995. Mr.  Davidson,  who joined the Company in 1994 as
senior investment counselor, has spent his entire business career on Wall Street
since first joining an investment and banking firm in 1966.

"GAM" COMMON STOCK

As a closed-end  investment  company,  General American Investors does not offer
its  shares  continuously.  The  Common  Stock is listed  on The New York  Stock
Exchange (symbol, GAM) and can be bought or sold with commissions  determined in
the same manner as all listed stocks.  Net asset value is computed and published
on the  Company's  website daily (on an unaudited  basis) and is also  furnished
upon request.  It is also available on most electronic  quotation services using
the symbol "XGAMX." The figure for net asset value per share,  together with the
market price and the  percentage  discount or premium from net asset value as of
the close of each week, is published in Barron's and The Wall Street Journal.

The ratio of market  price to net asset value has shown  considerable  variation
over a long period of time.  While shares of GAM usually sell at a discount from
their underlying net asset value, as do the shares of most other domestic equity
closed-end  investment  companies,  they occasionally sell at a premium over net
asset value. During 2006, the stock sold at discounts from net asset value which
ranged from 6.1% (March 9 and November 2) to 13.2%  (January 4). At December 31,
the price of the stock was at a discount of 8.4% as compared  with a discount of
11.4% a year earlier.

"GAM Pr B" PREFERRED STOCK

On September 24, 2003, the Company issued and sold in an  underwritten  offering
8,000,000  shares  of its  5.95%  Cumulative  Preferred  Stock,  Series B with a
liquidation preference of $25 per share ($200,000,000 in the aggregate).

The Preferred  Shares are  noncallable  for 5 years,  are rated "Aaa" by Moody's
Investors Service, Inc. and are listed and traded on The New York Stock Exchange
(symbol, GAM Pr B).
 6

3  THE COMPANY
--------------------------------------------------------------------------------
   General American Investors

The preferred capital is available to leverage the investment performance of the
Common Stockholders.  As is the case for leverage in general, it may also result
in higher market volatility for the Common Stockholders.

DIVIDEND AND DISTRIBUTION POLICY

The Company's dividend and distribution  policy is to distribute to stockholders
before year-end  substantially  all ordinary income  estimated for the full year
and capital gains realized during the ten-month  period ended October 31 of that
year. If any additional  capital gains are realized or ordinary income is earned
during the last two months of the year,  a  "spill-over"  distribution  of these
amounts  will be paid  early  in the  following  year  to  Common  Stockholders.
Dividends and  distributions  on shares of Preferred  Stock are paid  quarterly.
Distributions  from  capital  gains  and  dividends  from  ordinary  income  are
allocated  proportionately among holders of shares of Common Stock and Preferred
Stock.

Dividends from income have been paid continuously on the Common Stock since 1939
and capital gain distributions in varying amounts have been paid for each of the
years  1943-2006  (except for the year 1974).  (A table  listing  dividends  and
distributions paid during the 20-year period 1987-2006 is shown at the bottom of
page 6.) To the extent that shares can be issued,  dividends  and  distributions
are paid to Common  Stockholders in additional shares of Common Stock unless the
stockholder  specifically  requests  payment in cash.  Spill-over  dividends and
distributions of nominal amounts may be paid in cash only.

PROXY VOTING POLICIES, PROCEDURES AND RECORD

The policies and procedures used by General American  Investors to determine how
to vote proxies relating to portfolio  securities and the Company's proxy voting
record for the 12-month  period ended June 30, 2006 are  available:  (1) without
charge,   upon  request,   by  calling  the  Company  at  its  toll-free  number
(1-800-436-8401),       (2)      on      the      Company's      website      at
www.generalamericaninvestors.com   and  (3)  on  the   Securities  and  Exchange
Commission's website at www.sec.gov.

DIRECT REGISTRATION

The Company makes available  direct  registration  for its Common  Shareholders.
Direct  registration,   which  is  an  element  of  the  Investors  Choice  Plan
administered  by our  transfer  agent,  is a system that  allows for  book-entry
ownership and the electronic  transfer of our Common Shares.  Accordingly,  when
Common  Shareholders,  who  hold  their  shares  directly,  receive  new  shares
resulting  from a purchase,  transfer or dividend  payment,  they will receive a
statement showing the credit of the new shares as well as their Plan account and
certificated  share  balances.  A brochure  which  describes  the  features  and
benefits of the Investors Choice Plan,  including the ability of shareholders to
deposit  certificates  with our  transfer  agent,  can be  obtained  by  calling
American Stock Transfer & Trust Company at  1-800-413-5499,  calling the Company
at  1-800-436-8401 or visiting our website:  www.generalamericaninvestors.com  -
click on Distribution & Reports, then Report Downloads.

PRIVACY POLICY AND PRACTICES

General American Investors  collects  nonpublic  personal  information about its
customers  (stockholders)  with respect to their  transactions  in shares of the
Company's securities but only for those stockholders whose shares are registered
in their  names.  This  information  includes  the  stockholder's  address,  tax
identification or Social Security number and dividend elections.  We do not have
knowledge of, nor do we collect  personal  information  about,  stockholders who
hold the Company's securities at financial institutions such as brokers or banks
in "street name" registration.

We do not disclose any nonpublic personal  information about our stockholders or
former stockholders to anyone, except as permitted by law.

We restrict access to nonpublic  personal  information about our stockholders to
those  employees who need to know that  information  to provide  services to our
stockholders.  We maintain physical,  electronic and procedural  safeguards that
comply with federal  standards  to guard our  stockholders'  nonpublic  personal
information.
 7

4  INVESTMENT RESULTS  (UNAUDITED)
--------------------------------------------------------------------------------
   General American Investors

"Total return on $10,000 investment 20 years ended December 31, 2006"

The investment  return for a Common  Stockholder of General  American  Investors
(GAM) over the 20 years ended  December 31, 2006 is shown in the table below and
in the accompanying chart. The  return based on  GAM's net asset value (NAV) per
Common  Share in  comparison  to the  change in the  Standard & Poor's 500 Stock
Index (S&P 500) is also displayed.  Each  illustration  assumes an investment of
$10,000 at the beginning of 1987.

THE  STOCKHOLDER  RETURN is the return a Common  Stock  holder of GAM would have
achieved assuming  reinvestment of all dividends and distributions at the actual
reinvestment  price and of all cash  dividends at the average (mean between high
and low) market price on the ex-dividend date.

THE GAM NET ASSET  VALUE (NAV)  RETURN is the return on shares of the  Company's
Common  Stock  based on the NAV per share,  including  the  reinvestment  of all
dividends and distributions.

THE  S&P  500  RETURN  is  the  time-weighted  total  rate  of  return  on  this
widely-recognized,  unmanaged  index which is a measure of general  stock market
performance, including dividend income.

The  results  illustrated  are a  record  of  past  performance  and  may not be
indicative of future results.


                              GENERAL AMERICAN INVESTORS
              -------------------------------------------------------     STANDARD & POOR'S 500
                 STOCKHOLDER RETURN         NET ASSET VALUE RETURN                RETURN
              ------------------------    ---------------------------   ------------------------------
              CUMULATIVE       ANNUAL       CUMULATIVE      ANNUAL       CUMULATIVE          ANNUAL
              INVESTMENT       RETURN       INVESTMENT      RETURN       INVESTMENT          RETURN
             -------------------------    ---------------------------   ------------------------------
                                                                           
     1987        $8,389        -16.11%        $10,253         2.53%        $10,524            5.24%
     1988        10,173         21.26          12,054        17.57          12,264            16.53
     1989        15,116         48.60          16,618        37.86          16,141            31.62
     1990        15,721          4.00          17,730         6.69          15,643            -3.09
     1991        29,084         85.00          28,561        61.09          20,398            30.40
     1992        33,382         14.78          29,575         3.55          21,946             7.59
     1993        28,068        -15.92          29,058        -1.75          24,167            10.12
     1994        25,862         -7.86          28,261        -2.74          24,474             1.27
     1995        31,350         21.22          34,926        23.58          33,652            37.50
     1996        37,457         19.48          41,900        19.97          41,361            22.91
     1997        53,406         42.58          55,329        32.05          55,147            33.33
     1998        70,127         31.31          74,772        35.14          70,892            28.55
     1999        97,631         39.22         101,989        36.40          85,751            20.96
     2000       116,278         19.10         119,980        17.64          77,956            -9.09
     2001       121,313          4.33         118,540        -1.20          68,687           -11.89
     2002        88,304        -27.21          91,252       -23.02          53,480           -22.14
     2003       112,155         27.01         116,255        27.40          68,753            28.56
     2004       122,013          8.79         128,311        10.37          76,172            10.79
     2005       143,243         17.40         149,097        16.20          79,851             4.83
     2006       167,279         16.78         167,347        12.24          92,356            15.66


 8
5   INVESTMENT RESULTS  (UNAUDITED)
--------------------------------------------------------------------------------
    General American Investors

[CAPTION]
[Line  graph  with  heading  "20-YEAR  INVESTMENT  RESULTS  ASSUMING  AN INITIAL
INVESTMENT OF $10,000" at top left hand side.  The vertical axis is to the right
side of the page and is labeled "CUMULATIVE VALUE OF INVESTMENT." The axis range
is from $0 to $180,000 in $20,000 increments. The horizontal axis, on the bottom
of the page,  consists of the years 1987  through  2006 in one year  increments.
Within the graph are three  lines.  The first line  represents  GAM  Stockholder
Return.  The second line  represents  GAM Net Asset Value Return,  and the third
line  represents the return of the S&P 500 Stock Index.  The data points for the
lines are derived  from the columns  labeled  "Cumulative  Investment"  from the
table on the preceding page.  Also,  embedded in upper left portion of the graph
is a table which appears as follows:]



         COMPARATIVE ANNUALIZED INVESTMENT RESULTS
         -----------------------------------------
    YEARS ENDED         STOCKHOLDER      GAM NET       S&P 500
 DECEMBER 31, 2006         RETURN       ASSET VALUE   STOCK INDEX
------------------------------------------------------------------
                                                
     1 year                16.8%          12.2%          15.7%
     5 years                6.6            7.1            6.1
    10 years               16.1           14.9            8.4
    15 years               12.4           12.5           10.6
    20 years               15.1           15.1           11.8

 9


6  MAJOR STOCK CHANGES*: THREE MONTHS ENDED DECEMBER 31, 2006 (UNAUDITED)
--------------------------------------------------------------------------------
   General American Investors




                                                                                SHARES HELD
INCREASES                                                       SHARES       DECEMBER 31, 2006
------------------------------------------------------------------------------------------------------------------------------------
                                                                            

NEW POSITIONS

    Cephalon, Inc.                                                    -             150,000 (a)
    Epoch Holding Corporation Series A Convertible
         Preferred 4.6%                                          10,000              10,000
    QUALCOMM Incorporated                                       700,000             700,000
    Rio Tinto plc ADR                                                 -              65,000 (a)
    Wachovia Corporation                                        614,864 (b)         614,864

ADDITIONS

    Dollar General Corporation                                  901,000           2,500,000
    PepsiCo, Inc.                                                50,000             225,000
    Xerox Corporation                                           350,000           2,250,000


DECREASES
------------------------------------------------------------------------------------------------------------------------------------

ELIMINATIONS

    Golden West Financial Corporation                             585,000 (b)             -
    Standard MEMS, Inc. Series A Convertible Preferred            546,000                 -

REDUCTIONS

    Alkermes, Inc.                                                 65,000           175,000
    American International Group, Inc.                             15,000           360,000
    Annaly Capital Management, Inc.                               105,000           550,000
    Everest Re Group, Ltd.                                         35,000           500,000
    MFA Mortgage Investments, Inc.                                150,000           925,000
    Microsoft Corporation                                          80,000           720,000
    Pfizer Inc                                                    389,100         1,347,900
    The TJX Companies, Inc.                                       240,000         2,100,000
    VeriSign, Inc.                                                 20,000           113,500


* Excludes transactions in Common and Preferred Stocks-Miscellaneous-Other.
(a) Securities purchased in prior period and previously carried under Common and Preferred Stocks-Miscellaneous-Other.
(b) 614,864 shares of Wachovia Corporation were received in exchange for 585,000 shares of Golden West Financial
     Corporation in conjunction with a merger.



"This table shows dividends and distributions  on the Company's Common Stock for
the prior  20-year  period.  Amounts  shown are based upon the year in which the
income was earned,  not the year paid.  Spill-over  payments made after year-end
are attributable to income and gain earned in the prior year."

DIVIDENDS AND DISTRIBUTIONS PER COMMON SHARE (1987-2006)  (UNAUDITED)
--------------------------------------------------------------------------------


                      EARNINGS SOURCE
                 ----------------------------
                  SHORT-TERM     LONG-TERM
   YEAR   INCOME CAPITAL GAINS  CAPITAL GAINS
----------------------------------------------
                          
   1987    $.35         -          $1.54
   1988     .29         -           1.69
   1989     .21      $.02           1.56
   1990     .21         -           1.65
   1991     .09         -           3.07
   1992     .03         -           2.93
   1993     .06         -           2.34
   1994     .06         -           1.59
   1995     .10       .03           2.77
   1996     .20       .05           2.71
   1997     .21         -           2.95
   1998     .47         -           4.40
   1999     .42       .62           4.05
   2000     .48      1.55           6.16
   2001     .37       .64           1.37
   2002     .03         -            .33
   2003     .02         -            .59
   2004     .217        -           .957
   2005     .547      .041         1.398
   2006     .334        -          2.666

 10

7  TEN LARGEST INVESTMENT HOLDINGS (UNAUDITED)
--------------------------------------------------------------------------------
   General American Investors

"The statement of investments as of December 31, 2006,  shown on pages 12 and 13
includes 54 security  issues.  Listed here are the ten largest  holdings on that
date."




                                                                                                    % COMMON
                                                                           SHARES         VALUE     NET ASSETS*
                                                                       -------------------------------------------------------------
                                                                                               

CEMEX, S.A. de C.V. ADR                                                  2,350,862    $79,647,204       6.6%
Domiciled in Mexico, CEMEX is the third largest cement producer
in the world.  With the expansion of its operations into related
construction materials and additional geographic areas, as well as
its focus on cost containment, the company's free cash flow
should continue to increase, supporting a positive long-term outlook.
------------------------------------------------------------------------------------------------------------------------------------

THE HOME DEPOT, INC.                                                     1,570,000     63,051,200       5.3
The largest company in home center retailing, Home Depot's
proven merchandising capabilities and strong financial structure
should provide the basis for continuing growth.
------------------------------------------------------------------------------------------------------------------------------------

THE TJX COMPANIES, INC.                                                  2,100,000     59,892,000       5.0
Through its T.J. Maxx and Marshalls divisions, TJX is the leading
off-price retailer. The continued growth of these divisions, along
with expansion into related U.S. and foreign off-price formats,
provide ongoing growth opportunities.
------------------------------------------------------------------------------------------------------------------------------------

APACHE CORPORATION                                                         825,000     54,870,750       4.6
Apache is a large independent oil and gas company with  a long
history of growing production and creating value for shareholders.
The company's operations are primarily focused in North America,
the North Sea and Egypt.
------------------------------------------------------------------------------------------------------------------------------------

WEATHERFORD INTERNATIONAL LTD.                                           1,220,000     50,983,800       4.3
Weatherford supplies a broad range of oil field services through
its Drilling Methods, Well Construction, Drilling Tools and
Intervention Services divisions on a worldwide basis.  Its focus on
increasing production from existing fields and synergies from the
acquisition of assets from Precision Drilling should lead to
earnings growth.
------------------------------------------------------------------------------------------------------------------------------------

TALISMAN ENERGY INC.                                                     3,000,000     50,970,000       4.2
Talisman, headquartered in Calgary, Alberta, is an upstream
oil and gas producer with global operations.  The company is
focusing on larger, deep gas opportunities in North America
and large international projects which should lead to faster
production growth and higher returns.
------------------------------------------------------------------------------------------------------------------------------------

EVEREST RE GROUP, LTD.                                                     500,000     49,055,000       4.1
One of the largest independent U.S. property/casualty reinsurers,
generates annual premiums of approximately $4 billion and has
a high quality, well-reserved AA balance sheet. This Bermuda
domiciled company has a strong management team that exercises
underwriting discipline and efficient expense control,
resulting in above-average earnings and book value growth.
------------------------------------------------------------------------------------------------------------------------------------

REPUBLIC SERVICES, INC.                                                  1,175,000      47,787,250       4.0
Republic Services is a leading provider of non-hazardous solid waste
collection and disposal services in the U.S. The efficient operation
of its routes and facilities combined with appropriate pricing enable
Republic Services to generate significant free cash flow. The high
probability of additional contracts and improved economic activity
should result in higher waste volumes for the company.
------------------------------------------------------------------------------------------------------------------------------------

DOLLAR GENERAL CORPORATION                                               2,500,000      40,150,000       3.3
Dollar General, is the country's largest dollar store company.  It has
the opportunity to expand sales by adding new stores and to expand
margins by the strategy and tactics of a new management team.
------------------------------------------------------------------------------------------------------------------------------------

XEROX CORPORATION                                                        2,250,000      38,137,500       3.2
Xerox develops, manufactures and finances a broad range of
document processing products and services for use in offices
worldwide.  The growing adoption of color and digital products
should lead to growing profitability.
------------------------------------------------------------------------------------------------------------------------------------
                                                                                      $534,544,704      44.6%
                                                                                      ============      =====

*Net assets applicable to the Company's Common Stock.
 11

8  PORTFOLIO DIVERSIFICATION (unaudited)
--------------------------------------------------------------------------------
   General American Investors

"The  diversification of the Company's net assets applicable to its Common Stock
by  industry  group as of December  31, 2006 and 2005 is shown in the  following
table."


                                                                             PERCENT COMMON NET ASSETS*
                                           DECEMBER 31, 2006                        DECEMBER 31
                               ----------------------------------------------------------------------------------
INDUSTRY CATEGORY                   COST(000)            VALUE(000)            2006             2005
-----------------------------------------------------------------------------------------------------------------
                                                                                  
Oil and Natural Gas
  (Including Services)              $148,725              $206,447             17.2%           29.7%
                                    --------              --------             ----            ----
Finance and Insurance
  Banking                             17,349               101,658              8.5             8.8
  Insurance                           87,398               217,772             18.2            15.8
  Other                               22,878                31,330              2.6             1.1
                                    --------              --------             ----            ----
                                     127,625               350,760             29.3            25.7
                                    --------              --------             ----            ----
Retail Trade                          86,347               226,656             18.9            17.9
                                    --------              --------             ----            ----
Health Care
  Pharmaceuticals                     66,003               104,218              8.7             8.0
  Medical Instruments
    and Devices                       10,484                24,080              2.0             2.3
                                    --------              --------             ----            ----
                                      76,487               128,298             10.7            10.3
                                    --------              --------             ----            ----
Communications and
  Information Services                64,261               102,828              8.6             6.1
Consumer Products and Services        67,332                86,001              7.2             5.9
Building and Real Estate              31,961                79,647              6.6             6.0
Miscellaneous**                       43,663                50,017              4.2             3.7
Environmental Control
  (Including Services)                26,227                47,787              4.0             3.9
Technology                            31,683                38,138              3.2             2.5
Computer Software and Systems         21,197                28,189              2.3             3.8
Machinery &Equipment                  12,430                20,677              1.7             -
Electronics                           12,287                15,235              1.3             1.2
Mining                                13,421                13,811              1.1             -
Semiconductors                             -                     -              -               0.5
                                    --------              --------             ----            ----
                                     763,646             1,394,491            116.3           117.2
Short-Term Securities                 17,256                17,256              1.4             0.3
                                    --------              --------             ----            ----
  Total Investments                 $780,902             1,411,747            117.7           117.5
Other Assets and Liabilities - Net  ========               (12,294)            (1.0)            0.1
Preferred Stock                                           (200,000)           (16.7)          (17.6)
                                                          --------             ----            ----
Net Assets Applicable to
  Common Stock                                          $1,199,453            100.0%          100.0%
                                                        ==========            =====           =====


*   Net assets applicable to the Company's Common Stock.
**   Securities which have been held for less than one year, not previously disclosed and not restricted.



 12
9  STATEMENT OF ASSETS AND LIABILITIES
--------------------------------------------------------------------------------
   General American Investors


                                                                                DECEMBER 31,
                                                                     ------------------------------
ASSETS                                                                   2006              2005
---------------------------------------------------------------------------------------------------
                                                                               
INVESTMENTS, AT VALUE (NOTE 1a)
   Common and preferred stocks
      (cost  $729,900,430 and $714,895,565, respectively)         $1,359,753,863     $1,301,855,069
   Corporate note (cost $33,745,957 and
      $33,123,366, respectively)                                      34,737,500         25,812,500
   Money market fund (cost $17,255,705 and
    $3,822,949, respectively)                                         17,255,705          3,822,949
                                                                   -------------      -------------
   Total investments (cost $780,902,092 and
      $751,841,880, respectively)                                  1,411,747,068      1,331,490,518
CASH, RECEIVABLES AND OTHER ASSETS
   Cash                                                                   34,235             13,298
   Receivable for securities sold                                      2,875,316          5,733,693
   Dividends, interest and other receivables                           1,430,378          1,028,867
   Pension asset, excess funded                                        8,656,759                  -
   Prepaid pension cost                                                        -          7,714,456
   Prepaid expenses and other assets                                     149,755            214,022
                                                                   -------------      -------------

TOTAL ASSETS                                                       1,424,893,511      1,346,194,854
                                                                   -------------      -------------

LIABILITIES
---------------------------------------------------------------------------------------------------

   Payable for securities purchased                                   13,515,130          1,468,214
   Preferred dividend accrued but not yet declared                       231,389            231,389
   Pension benefit liability                                           3,320,727                  -
   Accrued pension expense                                                     -          3,101,128
   Accrued thrift plan expense                                         2,992,285          2,598,356
   Accrued expenses and other liabilities                              5,380,892          5,854,113
                                                                    ------------        -----------
TOTAL LIABILITIES                                                     25,440,423         13,253,200
                                                                    ------------        -----------

 5.95% CUMULATIVE PREFERRED STOCK, SERIES B -
   8,000,000 shares at a liquidation value of
   $25 per share (note 2)                                            200,000,000        200,000,000
                                                                    ------------        -----------
NET ASSETS APPLICABLE TO COMMON STOCK -  29,589,198
    and 29,050,399 shares, respectively (note 2)                  $1,199,453,088     $1,132,941,654
                                                                  ==============     ==============
NET ASSET VALUE PER COMMON SHARE                                          $40.54             $39.00
                                                                  ==============     ==============


NET ASSETS APPLICABLE TO COMMON STOCK
---------------------------------------------------------------------------------------------------
    Common Stock, 29,589,198 and 29,050,399 shares at par
      value, respectively (note 2)                                   $29,589,198        $29,050,399
    Additional paid-in capital (note 2)                              538,093,876        518,972,693
    Undistributed realized gain (loss) on investments (note 2)        (1,715,049)         3,969,333
    Undistributed net investment income (note 2)                       2,218,917          1,531,980
    Accumulated other comprehensive income (note 5)                      652,559                  -
    Unallocated distributions on Preferred Stock                        (231,389)          (231,389)
    Unrealized appreciation on investments, securities
      sold short and options                                         630,844,976        579,648,638
                                                                  --------------      -------------

NET ASSETS APPLICABLE TO COMMON STOCK                             $1,199,453,088     $1,132,941,654
                                                                  ==============     ==============


(see notes to financial statements)
 13
10  STATEMENT OF OPERATIONS
--------------------------------------------------------------------------------
    General American Investors



                                                                          YEAR ENDED DECEMBER 31,
                                                                         --------------------------
INCOME                                                                     2006             2005
---------------------------------------------------------------------------------------------------
                                                                                 
   Dividends (net of foreign withholding taxes
     of $325,061 and $490,458, respectively)                           $16,065,789      $16,403,240
   Interest                                                              6,301,585        2,318,112
                                                                       -----------      -----------
TOTAL INCOME                                                            22,367,374       18,721,352
                                                                       -----------      -----------

EXPENSES
---------------------------------------------------------------------------------------------------

   Investment research                                                   8,054,383        8,695,758
   Administration and operations                                         2,922,014        3,236,737
   Office space and general                                                544,210          537,671
   Directors' fees and expenses                                            286,326          218,402
   Auditing and legal fees                                                 163,000          216,600
   Transfer agent, custodian and registrar fees and expenses               140,346          176,854
   Stockholders' meeting and reports                                       134,106          129,857
   Miscellaneous taxes                                                     115,365          101,455
                                                                       -----------      -----------
TOTAL EXPENSES                                                          12,359,750       13,313,334
                                                                       -----------      -----------
NET INVESTMENT INCOME                                                   10,007,624        5,408,018
                                                                       -----------      -----------

REALIZED GAIN (LOSS) AND CHANGE IN UNREALIZED APPRECIATION ON INVESTMENTS (NOTES 1F AND 4)
---------------------------------------------------------------------------------------------------
   Net realized gain on investments:
     Long transactions                                                  86,808,130       63,646,612
     Short sale transactions (note 1b)                                    (629,681)        (755,114)
     Option transactions (note 1c)                                          (2,100)         132,597
                                                                       -----------      -----------
   Net realized gain on investments
     (long-term except for $2,228,817 and
     $14,501,035, respectively)                                         86,176,349       63,024,095
   Net increase in unrealized appreciation                              51,196,338      103,638,830
                                                                       -----------      -----------
NET GAIN ON INVESTMENTS                                                137,372,687      166,662,925
DISTRIBUTIONS TO PREFERRED STOCKHOLDERS                                (11,900,000)     (11,900,000)
                                                                      ------------     ------------
INCREASE IN NET ASSETS RESULTING FROM OPERATIONS                      $135,480,311     $160,170,943
                                                                      ============     ============

(see notes to financial statements)

 14

11  STATEMENT OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
    General American Investors




                                                                           YEAR ENDED DECEMBER 31,
                                                                      -----------------------------
OPERATIONS                                                                 2006            2005
---------------------------------------------------------------------------------------------------
                                                                               
   Net investment income                                               $10,007,624      $5,408,018
   Net realized gain on investments                                     86,176,349      63,024,095
   Net increase in unrealized appreciation                              51,196,338     103,638,830
                                                                       -----------      -----------
                                                                       147,380,311     172,070,943
                                                                       -----------      -----------

   Distributions to Preferred Stockholders:
      From net income                                                   (1,092,608)       (845,368)
      From short-term capital gains                                       (168,288)     (2,449,640)
      From long-term capital gains                                     (10,639,104)     (8,604,992)
                                                                       -----------      -----------
      Decrease in net assets from Preferred distributions              (11,900,000)    (11,900,000)
                                                                       -----------      -----------

 INCREASE IN NET ASSETS RESULTING FROM OPERATIONS                      135,480,311      160,170,943
                                                                       -----------      -----------
 OTHER COMPREHENSIVE INCOME
      Adjustment to initially apply FAS 158 (note 5)                       652,559                 -
                                                                       -----------      -----------

 DISTRIBUTIONS TO COMMON STOCKHOLDERS
---------------------------------------------------------------------------------------------------

   From net income                                                      (8,230,843)      (4,333,771)
   From short-term capital gains                                        (1,262,677)     (12,389,129)
   From long-term capital gains                                        (79,790,662)     (43,672,026)
                                                                       -----------      -----------
DECREASE IN NET ASSETS FROM COMMON DISTRIBUTIONS                       (89,284,182)     (60,394,926)
                                                                       -----------      -----------

CAPITAL SHARE TRANSACTIONS (NOTE 2)
---------------------------------------------------------------------------------------------------

   Value of Common Shares issued in payment of distributions            48,748,838       36,584,716
   Cost of Common Shares purchased                                     (29,086,092)     (39,812,172)
                                                                       -----------      -----------
INCREASE (DECREASE) IN NET ASSETS - CAPITAL TRANSACTIONS                19,662,746       (3,227,456)
                                                                       -----------      -----------
NET INCREASE  IN NET ASSETS                                             66,511,434       96,548,561

NET ASSETS APPLICABLE TO COMMON STOCK
---------------------------------------------------------------------------------------------------

BEGINNING OF YEAR                                                    1,132,941,654    1,036,393,093
                                                                     -------------    -------------
END OF YEAR (including undistributed net investment
  income of $2,218,917 and $1,531,980, respectively)                $1,199,453,088   $1,132,941,654
                                                                    ==============   ==============
(see notes to financial statements)


 15


12  STATEMENT OF INVESTMENTS DECEMBER 31, 2006
--------------------------------------------------------------------------------
    General American Investors




                        SHARES    COMMON AND PREFERRED STOCKS                                     VALUE (NOTE 1a)
-----------------------------------------------------------------------------------------------------------------
                                                                                          
BUILDING AND            2,350,862 CEMEX, S.A. de C.V. ADR               (COST  $31,961,056)          $79,647,204
REAL ESTATE (6.6%)                                                                                   -----------
-----------------------------------------------------------------------------------------------------------------
COMMUNICATIONS AND        775,000 American Tower Corporation (a)                                      28,892,000
INFORMATION SERVICES      900,000 Cisco Systems, Inc. (a)                                             24,597,000
(8.6%)                    350,000 Lamar Advertising Company Class A (a)                               22,886,500
                          700,000 QUALCOMM Incorporated                                               26,453,000
                                                                                                     -----------
                                                                        (COST  $64,260,573)          102,828,500
                                                                                                     -----------
-----------------------------------------------------------------------------------------------------------------
COMPUTER SOFTWARE         300,000 EMC Corporation (a)                                                  3,960,000
AND SYSTEMS (2.3%)        720,000 Microsoft Corporation                                               21,499,200
                          113,500 VeriSign, Inc. (a)                                                   2,729,675
                                                                                                     -----------
                                                                        (COST  $21,197,130)           28,188,875
                                                                                                     -----------
-----------------------------------------------------------------------------------------------------------------
CONSUMER PRODUCTS         325,000 Constellation Brands, Inc. (a)                                       9,431,500
AND SERVICES (4.3%)       350,000 Diageo plc ADR                                                      27,758,500
                          225,000 PepsiCo, Inc.                                                       14,073,750
                                                                                                     -----------
                                                                         (COST $33,585,638)           51,263,750
                                                                                                     -----------
-----------------------------------------------------------------------------------------------------------------
ELECTRONICS (1.3%)        550,000 Molex Incorporated Class A             (COST $12,287,441)           15,235,000
                                                                                                     -----------
-----------------------------------------------------------------------------------------------------------------
ENVIRONMENTAL CONTROL   1,175,000 Republic Services, Inc.                (COST $26,227,380)           47,787,250
(INCLUDING SERVICES)                                                                                 -----------
(4.0%)
-----------------------------------------------------------------------------------------------------------------
FINANCE AND INSURANCE    BANKING (8.5%)
(29.3%)                  ----------------------------------------------------------------------------------------
                          270,000 Bank of America Corporation                                         14,415,300
                          310,000 M&T Bank Corporation                                                37,869,600
                          170,000 SunTrust Banks, Inc.                                                14,356,500
                          614,864 Wachovia Corporation                                                35,016,505
                                                                                                    ------------
                                                                         (COST $17,349,060)          101,657,905
                                                                                                    ------------
                         INSURANCE (18.2%)
                         ----------------------------------------------------------------------------------------
                          275,000 The Allstate Corporation                                            17,905,250
                          360,000 American International Group, Inc.                                  25,797,600
                          275,000 Annuity and Life Re (Holdings), Ltd. (a)                               110,000
                          350,000 Arch Capital Group Ltd. (a)                                         23,663,500
                          400,000 AXIS Capital Holdings Limited                                       13,348,000
                              300 Berkshire Hathaway Inc. Class A (a)                                 32,997,000
                          500,000 Everest Re Group, Ltd.                                              49,055,000
                          285,000 MetLife, Inc.                                                       16,817,850
                          335,000 PartnerRe Ltd.                                                      23,795,050
                          230,000 Transatlantic Holdings, Inc.                                        14,283,000
                                                                                                    ------------
                                                                         (COST $87,398,021)          217,772,250
                                                                                                    ------------
                         OTHER (2.6%)
                         ----------------------------------------------------------------------------------------
                          550,000 Annaly Capital Management, Inc.                                      7,650,500
                           10,000 Epoch Holding Corporation Series A Convertible Preferred 4.6% (d)   16,566,667
                          925,000 MFA Mortgage Investments, Inc.                                       7,113,250
                                                                                                    ------------
                                                                         (COST $22,878,434)           31,330,417
                                                                                                    ------------
                                                                        (COST $127,625,515)          350,760,572
                                                                                                    ------------
-----------------------------------------------------------------------------------------------------------------
HEALTH CARE (10.7%)      PHARMACEUTICALS (8.7%)
                         ----------------------------------------------------------------------------------------
                          175,000 Alkermes, Inc. (a)                                                   2,339,750
                          170,000 Biogen Idec Inc. (a)                                                 8,362,300
                          150,000 Cephalon, Inc. (a)                                                  10,561,500
                          604,900 Cytokinetics, Incorporated (a)                                       4,524,652
                          200,000 Genentech, Inc. (a)                                                 16,226,000
                          380,000 MedImmune, Inc. (a)                                                 12,300,600
                          180,000 Novo Nordisk B                                                      14,992,200
                        1,347,900 Pfizer Inc                                                          34,910,610
                                                                                                    ------------
                                                                         (COST $66,003,518)          104,217,612
                                                                                                    ------------
                         MEDICAL INSTRUMENTS AND DEVICES (2.0%)
                         ----------------------------------------------------------------------------------------
                          450,000 Medtronic, Inc.                        (COST $10,483,716)           24,079,500
                                                                                                    ------------
                                                                         (COST $76,487,234)          128,297,112
                                                                                                    -------------

 16

13  STATEMENT OF INVESTMENTS DECEMBER 31, 2006 - continued
--------------------------------------------------------------------------------
    General American Investors




                        SHARES    COMMON AND PREFERRED STOCKS (continued)                        VALUE (NOTE 1a)
-----------------------------------------------------------------------------------------------------------------
                                                                                       
MACHINERY & EQUIPMENT   1,150,000 ABB Ltd. ADR                           (COST $12,430,211)        $20,677,000
(1.7%)                                                                                           -------------
---------------------------------------------------------------------------------------------------------------
MINING (1.1%)              65,000 Rio Tinto plc ADR                      (COST $13,420,904)         13,811,850
                                                                                                 -------------
---------------------------------------------------------------------------------------------------------------
MISCELLANEOUS (4.2%)              Other (b)                              (COST $43,662,790)         50,016,500
                                                                                                 -------------
---------------------------------------------------------------------------------------------------------------
OIL AND NATURAL GAS       825,000 Apache Corporation                                                54,870,750
(INCLUDING SERVICES)      850,000 Halliburton Company                                               26,392,500
(17.2%                  1,000,000 Patterson-UTI Energy, Inc.                                        23,230,000
                        3,000,000 Talisman Energy Inc.                                              50,970,000
                        1,220,000 Weatherford International Ltd. (a)                                50,983,800
                                                                                                 -------------
                                                                        (COST $148,725,073)        206,447,050
                                                                                                 -------------
---------------------------------------------------------------------------------------------------------------
RETAIL TRADE (18.9%)      700,000 Costco Wholesale Corporation                                      37,009,000
                        2,500,000 Dollar General Corporation                                        40,150,000
                        1,570,000 The Home Depot, Inc. (c)                                          63,051,200
                        2,100,000 The TJX Companies, Inc.                                           59,892,000
                          575,000 Wal-Mart Stores, Inc.                                             26,553,500
                                                                                                  ------------
                                                                          (COST$86,346,776)        226,655,700
                                                                                                  ------------
---------------------------------------------------------------------------------------------------------------
TECHNOLOGY (3.2%)       2,250,000 Xerox Corporation (a)                  (COST $31,682,709)         38,137,500
                                                                                                  ------------
---------------------------------------------------------------------------------------------------------------

                           TOTAL COMMON AND PREFERRED STOCKS (113.4%)   (COST $729,900,430)      1,359,753,863
                                                                                                 -------------
---------------------------------------------------------------------------------------------------------------


                    PRINCIPAL AMOUNT          CORPORATE NOTE
---------------------------------------------------------------------------------------------------------------
CONSUMER PRODUCTS     $35,000,000 General Motors Nova Scotia Finance Company
AND SERVICES (2.9%)      6.85% Guaranteed Notes Due 10/15/08             (COST $33,745,957)         34,737,500
                                                                                                 --------------

                         SHARES      SHORT-TERM SECURITY AND OTHER ASSETS
---------------------------------------------------------------------------------------------------------------
                       17,255,705 SSgA Prime Money Market Fund (1.4%)    (COST $17,255,705)         17,255,705
                                                                                                 -------------

TOTAL INVESTMENTS (e) (117.7%)                                          (COST $780,902,092)      1,411,747,068
     Liabilities in excess of receivables and other assets (-1.0%)                                 (12,293,980)
                                                                                                 -------------
                                                                                                 1,399,453,088
PREFERRED STOCK (-16.7%)                                                                          (200,000,000)
                                                                                                --------------
NET ASSETS APPLICABLE TO COMMON STOCK (100%)                                                    $1,199,453,088
                                                                                                ==============

 (a) Non-income producing security.
 (b) Securities which have been held for less than one year.
 (c) 1,000,000 shares held by custodian in a segregated custodian account as collateral for short positions, if any.
 (d) Restricted security of an affiliate acquired 11/7/06.
 (e) At December 31, 2006: (1) the cost of investments for Federal income tax purposes was the same as the cost for financial
     reporting purposes, (2) aggregate gross unrealized appreciation was $632,899,306, (3) aggregate gross unrealized depreciation
     was $2,054,330, and (4) net unrealized appreciation was $630,844,976.

(see notes to financial statements)


 17
14  NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
    General American Investors

--------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES

General American Investors Company,  Inc. (the "Company"),  established in 1927,
is  registered  under  the  Investment  Company  Act of  1940  as a  closed-end,
diversified  management  investment  company.  It is  internally  managed by its
officers under the direction of the Board of Directors.

     The  preparation  of financial  statements  in conformity  with  accounting
principles  generally accepted in the United States requires  management to make
estimates  and  assumptions  that affect the amounts  reported in the  financial
statements  and  accompanying  notes.  Actual  results  could  differ from those
estimates.

a. SECURITY VALUATION  Securities traded on a national  securities  exchange are
valued at the last reported  sales price on the last business day of the period.
Securities  reported on the NASDAQ  national  market are valued at the  official
closing price on that day. Listed  and NASDAQ  securities for which no sales are
reported on that day and other securities traded in the over-the-counter  market
are  valued at the last bid price  (asked  price for open  short  positions  and
options written) on the valuation date.  Securities  traded primarily in foreign
markets are generally  valued at the preceding  closing price of such securities
on their  respective  exchanges  or markets.  If, after the close of the foreign
market, conditions change significantly, the price of certain foreign securities
may be adjusted  to reflect  fair value as of the time of the  valuation  of the
portfolio.  Investments  in money  market  funds  are  valued at their net asset
value.  The  restricted  security is valued at par value (cost),  divided by the
conversion  price of $6.00  multiplied by the last  reported  sales price of the
publicly traded common stock of the corporation.

b.  SHORT  SALES The  Company  may make  short  sales of  securities  for either
speculative or hedging purposes. When the Company makes a short sale, it borrows
the securities  sold short from a broker;  in addition,  the Company places cash
with that broker and securities in a segregated account with the custodian, both
as collateral for the short  position.  The Company may be required to pay a fee
to borrow the securities and may also be obligated to pay any dividends declared
on the  borrowed  securities.  The Company  will  realize a gain if the security
price decreases and a loss if the security price  increases  between the date of
the  short  sale  and the  date on  which  the  Company  replaces  the  borrowed
securities.

c. OPTIONS The Company may purchase and write (sell) put and call  options.  The
risk  associated  with  purchasing  an option is that the Company pays a premium
whether or not the option is exercised. Additionally, the Company bears the risk
of loss of the premium and a change in market value should the  counterparty not
perform under the contract.  Put and call options purchased are accounted for in
the same manner as portfolio securities.  Premiums received from writing options
that expire  unexercised  are treated by the Company on the  expiration  date as
realized gains from investments. The difference between the premium received and
the amount paid on effecting a closing purchase transaction, including brokerage
commissions, is also treated as a realized gain, or, if the premium is less than
the amount paid for the closing purchase  transaction,  as a realized loss. If a
call option is exercised,  the premium is added to the proceeds from the sale of
the underlying  security in determining  whether the Company has realized a gain
or loss.  If a put option is exercised,  the premium  reduces the cost basis for
the  securities  purchased  by the  Company.  The Company as writer of an option
bears the  market  risk of an  unfavorable  change in the price of the  security
underlying the written option.

d. FEDERAL INCOME TAXES The Company's  policy is to fulfill the  requirements of
the Internal  Revenue Code applicable to regulated  investment  companies and to
distribute substantially all taxable income to its stockholders. Accordingly, no
provision for Federal income taxes is required.

e. INDEMNIFICATIONS In the ordinary course of business,  the Company enters into
contracts  that contain a variety of  indemnifications.  The  Company's  maximum
exposure under these arrangements is unknown.  However,  the Company has not had
prior claims or losses pursuant to these indemnification  provisions and expects
the risk of loss thereunder to be remote.

f.  OTHER  As  customary  in  the  investment   company   industry,   securities
transactions   are  recorded  as  of  the  trade  date.   Dividend   income  and
distributions to stockholders are recorded as of the ex-dividend dates. Interest
income,  adjusted for  amortization of discount and premium on  investments,  is
earned from  settlement  date and is  recognized on the accrual  basis.  Cost of
short-term investments represents amortized cost.

--------------------------------------------------------------------------------
2.  CAPITAL STOCK AND DIVIDEND DISTRIBUTIONS

The  authorized  capital stock of the Company  consists of 50,000,000  shares of
Common Stock,  $1.00 par value, and 10,000,000 shares of Preferred Stock,  $1.00
par value, of which 29,589,198 shares and 8,000,000 shares,  respectively,  were
outstanding at December 31, 2006.

     On September 24, 2003, the Company issued and sold 8,000,000  shares of its
5.95% Cumulative  Preferred  Stock,  Series B in an underwritten  offering.  The
Preferred  Shares are noncallable for 5 years and have a liquidation  preference
of $25.00 per share plus an amount equal to accumulated and unpaid  dividends to
the date of redemption.  The underwriting discount and other expenses associated
with the Preferred  Stock  offering  amounted to $6,700,000  and were charged to
paid-in capital.

     The Company is required to allocate  distributions  from long-term  capital
gains  and other  types of income  proportionately  among  holders  of shares of
Common Stock and Preferred  Stock. To the extent that dividends on the shares of
Preferred  Stock are not paid from long-term  capital  gains,  they will be paid
from ordinary income or net short-term  capital gains or will represent a return
of capital.

 18
15  NOTES TO FINANCIAL STATEMENTS - continued
--------------------------------------------------------------------------------
    General American Investors

--------------------------------------------------------------------------------
2.  CAPITAL STOCK AND DIVIDEND DISTRIBUTIONS -  (Continued from previous page.)

     Under the  Investment  Company  Act of 1940,  the  Company is  required  to
maintain  an  asset  coverage  of at  least  200% for the  Preferred  Stock.  In
addition,  pursuant to the Rating Agency Guidelines,  the Company is required to
maintain a certain  discounted  asset  coverage for its portfolio that equals or
exceeds the Basic Maintenance Amount under the guidelines established by Moody's
Investors  Service,  Inc.  The  Company  has met  these  requirements  since the
issuance of the Preferred Stock. If the Company fails to meet these requirements
in the future and does not cure such  failure,  the  Company  may be required to
redeem,  in whole or in part, shares of Preferred Stock at a redemption price of
$25.00 per share plus accumulated and unpaid dividends (whether or not earned or
declared).  In  addition,  the  Company's  failure to meet the  foregoing  asset
coverage  requirements  could restrict its ability to pay dividends on shares of
Common  Stock and could lead to sales of  portfolio  securities  at  inopportune
times.

     The holders of Preferred  Stock have voting  rights  equivalent to those of
the holders of Common Stock (one vote per share) and,  generally,  vote together
with the holders of Common Stock as a single class.

     At all times,  holders  of  Preferred  Stock will elect two  members of the
Company's  Board of  Directors  and the holders of Preferred  and Common  Stock,
voting as a single  class,  will elect the remaining  directors.  If the Company
fails to pay  dividends  on the  Preferred  Stock in an amount equal to two full
years' dividends,  the holders of Preferred Stock will have the right to elect a
majority of the  directors.  In  addition,  the  Investment  Company Act of 1940
requires that approval of the holders of a majority of any outstanding Preferred
Shares, voting separately as a class, would be required to (a) adopt any plan of
reorganization  that would adversely affect the Preferred Stock and (b) take any
action  requiring a vote of security  holders,  including,  among other  things,
changes in the Company's subclassification as a closed-end investment company or
changes in its fundamental investment policies.

     The Company  classifies its Preferred Stock pursuant to the requirements of
EITF D-98,  Classification  and  Measurement  of  Redeemable  Securities,  which
requires  that  preferred  stock for  which its  redemption  is  outside  of the
company's  control should be presented outside of net assets in the statement of
assets and liabilities.

   Transactions in Common Stock during 2006 and 2005 were as follows:



                                                    SHARES                       AMOUNT
                                               ------------------------------------------------
                                                2006      2005            2006         2005
                                               -------   -------       ---------    ----------
                                                                        
      Treasury shares issued in payment of
         dividends and distributions          1,326,499   1,067,491    $1,326,499   $1,067,491
      Increase in paid-in capital                                      47,422,339   35,517,225
                                                                       ----------   ----------
         Total increase                                                48,748,838   36,584,716
                                                                       ----------   ----------
      Shares purchased (at an average
         discount from net asset value of
         9.0% and 12.4%, respectively)          787,700   1,222,404      (787,700) (1,222,404)
      Decrease in paid-in capital                                     (28,298,392)(38,589,768)
                                                                      ----------- -----------
         Total decrease                                               (29,086,092)(39,812,172)
                                                                      ----------- -----------
      Net increase (decrease)                                         $19,662,746 ($3,227,456)
                                                                      =========== ===========

     At December 31, 2006, the Company held in its treasury  1,642,365 shares of
Common Stock with an aggregate cost in the amount of $49,650,348.

     Distributions for tax and book purposes are substantially the same.

     As of December 31, 2006, the components of distributable earnings
     on a tax basis were as follows:

                 Undistributed ordinary income                       $889,490
                 Accumulated capital losses                        (1,715,049)
                 Unrealized appreciation                          630,844,976
                                                                 ------------
                                                                 $630,019,417
                                                                 ============

     In accordance with U.S.  Treasury  Regulations,  the Company has elected to
defer  $1,715,049 of net realized capital losses arising after October 31, 2006.
Such losses are treated for tax purposes as arising on January 1, 2007.

     To reflect  reclassification  arising from permanent "book/tax" differences
for   non-deductible   expenses   during  the  year  ended  December  31,  2006,
undistributed  net  investment  income was increased by $2,764,  and  additional
paid-in  capital was  decreased by $2,764.  Net assets were not affected by this
reclassification.

--------------------------------------------------------------------------------
3.  OFFICERS' COMPENSATION
The  aggregate  compensation  paid by the  Company  during  2006 and 2005 to its
officers  (identified  on  page  19)  amounted  to  $7,255,500  and  $5,881,000,
respectively.

--------------------------------------------------------------------------------
4.  PURCHASES AND SALES OF SECURITIES
Purchases  and  sales of  securities  and  securities  sold  short  (other  than
short-term  securities  and options)  during 2006 amounted to  $250,301,775  and
$321,482,449, on long transactions, respectively, and $4,061,806 and $3,432,125,
on short sale transactions, respectively.

--------------------------------------------------------------------------------
5.  BENEFIT PLANS
The Company has funded and unfunded defined  contribution  thrift plans that are
available to its  employees.  The aggregate cost of such plans for 2006 and 2005
was $805,729 and $815,088, respectively.

     The  Company   also  has  both  a  funded   (Qualified)   and  an  unfunded
(Supplemental)  noncontributory  defined  benefit  pension  plans that cover its
employees.  The plans  provide  defined  benefits  based on years of service and
final  average  salary with an offset for a portion of social  security  covered
compensation.

     Effective December 31, 2006, the Company adopted the recognition provisions
of  Financial   Accounting  Standards  Board  ("FASB")  Statement  of  Financial
Accounting Standards No. 158 "Employers'  Accounting for Defined Benefit Pension
and Other Postretirement Plans" ("FAS158") which was released on September 2006.
FAS 158 improves  financial  reporting by requiring  employers to recognize  the
overfunded or underfunded status of a defined benefit  postretirement plan as an
asset or liability in the statement of assets and  liabilities  and to recognize
changes in funded  status in the year in which the changes  occur  through other
comprehensive income.

 19
16  NOTES TO FINANCIAL STATEMENTS - continued
--------------------------------------------------------------------------------
General American Investors

--------------------------------------------------------------------------------
5.  PENSION BENEFIT PLANS - (Continued from previous page.)
OBLIGATIONS AND FUNDED STATUS OF DEFINED BENEFIT PLANS:



                                           DECEMBER 31, 2006 (MEASUREMENT DATE) DECEMBER 31, 2005 (MEASUREMENT DATE)
                                           -----------------------------------  -----------------------------------
                                           QUALIFIED    SUPPLEMENTAL            QUALIFIED  SUPPLEMENTAL
                                               PLAN        PLAN        TOTAL      PLAN        PLAN         TOTAL
                                             ---------  ------------  --------  ---------  ------------  ----------
                                                                                        

CHANGE IN BENEFIT OBLIGATION:
 Benefit obligation at beginning of year  $8,902,156    $3,139,034  $12,041,190 $7,487,615   $2,690,636   $10,178,251
 Service cost                                201,809       115,586      317,395    194,771      112,956       307,727
 Interest cost                               501,644       182,511      684,155    481,413      166,597       648,010
 Benefits paid                              (542,274)     (165,252)    (707,526)  (514,291)    (146,513)     (660,804)
 Actuarial (gains)/losses                       (848)       48,848       48,000  1,071,753      298,925     1,370,678
 Plan amendments                                   -             -            -    180,895       16,433       197,328
                                          ----------    ----------  ----------- ----------   ----------   -----------
 Projected benefit obligation at
   end of year                             9,062,487     3,320,727   12,383,214  8,902,156    3,139,034    12,041,190
                                          ----------    ----------  ----------- ----------   ----------   -----------
CHANGE IN PLAN ASSETS:
 Fair value of plan assets at
   beginning of year                      15,906,987             -   15,906,987 14,625,572            -    14,625,572
 Miscellaneous adjustment                         -              -            -     64,946            -        64,946
 Actual return on plan assets              2,354,533             -    2,354,533  1,730,760            -     1,730,760
 Employer contributions                           -        165,252      165,252          -      146,513       146,513
 Benefits paid                              (542,274)     (165,252)    (707,526)  (514,291)    (146,513)     (660,804)
                                          ----------    ----------  ----------- ----------   ----------   -----------
 Fair value of plan assets at
   end of year                            17,719,246             -   17,719,246 15,906,987            -    15,906,987
                                          ----------    ----------  ----------- ----------   ----------   -----------
FUNDED STATUS AT END OF YEAR               8,656,759    (3,320,727)   5,336,032  7,004,831   (3,139,034)    3,865,797
   Unrecognized actuarial (gains)/losses           -             -            -    407,303      (53,984)      353,319
   Unrecognized prior service cost                 -             -            -    302,322       91,890       394,212
                                          ----------    ----------  ----------- ----------   ----------   -----------
   Net amount recognized at end of year   $8,656,759   ($3,320,727)  $5,336,032 $7,714,456  ($3,101,128)   $4,613,328
                                          ==========    ==========  =========== ==========   ==========   ===========

Accumulated benefit obligation at
  end of year                             $8,400,586    $2,971,614  $11,372,200 $8,322,164   $2,725,423   $11,047,587
                                          ==========    ==========  =========== ==========   ==========   ===========

INCREMENTAL EFFECT OF ADOPTING FAS 158      BEFORE      ADJUSTMENTS    AFTER
                                          ----------    ----------- -----------
Noncurrent benefit asset                  $7,939,307      $717,452   $8,656,759

LIABILITIES
   Current benefit liability                 213,549            -       213,549
   Noncurrent benefit liability            3,042,285        64,893    3,107,178

Accumulated other comprehensive income             -      (652,559)    (652,559)

AMOUNTS RECOGNIZED IN ACCUMULATED OTHER
  COMPREHENSIVE INCOME CONSIST OF:
   Net actuarial loss/(gain)             ($1,006,540)      ($5,136) ($1,011,676)       N/A         N/A           N/A
   Prior service cost/(credit)               289,088        70,029      359,117        N/A         N/A           N/A
                                          ----------    ----------  ----------- ----------   ----------   -----------
                                           ($717,452)      $64,893    ($652,559)       N/A         N/A           N/A
                                          ==========    ==========  =========== ==========   ==========   ===========
WEIGHTED-AVERAGE ASSUMPTIONS AS OF END OF FISCAL YEAR:
   Discount rate                                5.75%         5.75%                   5.50%       5.50%
   Expected return on plan assets               8.75%          N/A                    8.75%        N/A
   Salary scale assumption                      4.25%         4.25%                   4.25%       4.25%
COMPONENTS OF NET PERIODIC BENEFIT COST:
   Service cost                             $201,809      $115,586     $317,395   $194,771    $112,956      $307,727
   Interest cost                             501,645       182,511      684,156    481,413     166,597       648,010
   Expected return on plan assets         (1,127,040)            -   (1,127,040)(1,077,936)          -    (1,077,936)
   Amortization of:
     Prior service cost                       13,235        21,861       35,096     13,235      24,439        37,674
     Recognized net actuarial loss           185,502             -      185,502    152,996           -       152,996
                                          ----------    ----------  ----------- ----------   ----------   -----------
   Net periodic benefit cost               ($224,849)     $319,958      $95,109  ($235,521)   $303,992       $68,471
                                          ==========    ==========  =========== ==========   ==========   ===========
WEIGHTED-AVERAGE ASSUMPTIONS FOR DETERMINING NET
 PERIODIC BENEFIT COST FOR YEARS ENDED DECEMBER 31:
   Discount rate                                5.50%      5.50%                   5.75%        5.75%
   Expected long-term rate of
     return on plan assets                      8.75%       N/A                    8.75%         N/A
   Rate of salary increase                      4.25%      4.25%                   4.25%        4.25%

-------------------------------------------------------------------------------
PLAN ASSETS
The Company's qualified pension plan asset allocations by asset
at December 31, 2006 and 2005, are as follows:

                                December 31
                             ---------------
Asset Category               2006       2005
--------------               ----       ----
  Equity securities          88.2%      97.3%
  Debt securities            11.8        2.7
                            -----      -----
Total                       100.0%     100.0%
                            =====      =====
Generally, not less than 80% of plan assets are invested in investment
companies that invest in equity securities.
--------------------------------------------------------------------------------


EXPECTED CASH FLOWS                        Qualified   Supplemental
                                              Plan         Plan         Total
                                          ----------   -------------   ---------
                                                             
Expected Company contributions for 2007           -      $213,549      $213,549
                                          ==========   =============   =========
Estimated benefit payments:
     2007                                  $527,506      $213,549      $741,055
     2008                                   536,049       257,363       793,412
     2009                                   542,757       289,572       832,329
     2010                                   561,535       320,654       882,189
     2011                                   583,903       353,543       937,446
     2012-2016                            3,190,667     2,217,100     5,407,767


--------------------------------------------------------------------------------
6.  PUT OPTION
 A transaction in a written collateralized put option during the
 year ended December 31, 2006 was as follows:




                                                          Collateralized Put
                                                      --------------------------
                                                      Contract         Premium
                                                      ---------         --------
                                                                 
Options written                                          100            $16,199
Options terminated in closing purchase transactions     (100)           (16,199)
                                                      ---------         --------
Options outstanding, December 31,2006                      -                  $0
                                                      =========         ========

--------------------------------------------------------------------------------
7.  OPERATING LEASE COMMITMENT
In July 1992, the Company  entered into an operating  lease agreement for office
space  which  expires in 2007 and  provides  for future  rental  payments in the
aggregate amount of approximately  $5.6 million.  The lease agreement contains a
clause  whereby the Company  received  twenty  months of free rent  beginning in
December  1992 and  escalation  clauses  relating  to  operating  costs and real
property taxes.

     Rental expense  approximated  $308,900 for 2006. Minimum rental commitments
under the operating lease are approximately $505,000 in 2007.

 20

17  NOTES TO FINANCIAL STATEMENTS - continued
--------------------------------------------------------------------------------
    General American Investors

--------------------------------------------------------------------------------
7.  OPERATING LEASE COMMITMENT- (Continued from previous page.)
     In January  2003,  the Company  extended a sublease  agreement  (originally
entered into in March 1996) which expires in 2007 and provides for future rental
receipts.  Minimum rental receipts under the sublease are approximately $254,000
in 2007.  The Company  will also  receive its  proportionate  share of operating
expenses and real property taxes under the sublease.

--------------------------------------------------------------------------------
8.  RECENT ACCOUNTING PRONOUNCEMENTS
On July 13, 2006, the FASB released FASB  Interpretation  No. 48 "Accounting for
Uncertainty  in  Income  Taxes"  ("FIN48").  FIN 48  provides  guidance  for how
uncertain tax positions should be recognized,  measured, presented and disclosed
in the  financial  statements.  FIN 48 requires the  evaluation of tax positions
taken or  expected  to be taken in the course of  preparing  the  Company's  tax
returns to determine  whether the tax  positions are  "more-likely-than-not"  of
being  sustained by the applicable  tax  authority.  Tax positions not deemed to
meet the  more-likely-than-not  threshold  would be recorded as a tax benefit or
expense in the current  year.  Adoption of FIN 48 is required  for fiscal  years
beginning  after June 29,  2007 and is to be applied to all open tax years as of
the effective  date.  Management  does not believe that the  application of this
standard will have a material impact on the financial statements of the Company.

     On September 20, 2006, the FASB released Statement of Financial  Accounting
Standards No. 157 "Fair Value  Measurements" ("FAS 157"). FAS 157 establishes an
authoritative  definition of fair value, sets out a framework for measuring fair
value, and requires additional  disclosures about fair-value  measurements.  The
application of FAS 157 is required for fiscal years beginning after November 15,
2007 and interim periods within those fiscal years.  Management does not believe
that the  application  of this  standard  will  have a  material  impact  on the
financial statements of the Company.
--------------------------------------------------------------------------------

FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
General American Investors

"The  following  table  shows  per  share  operating   performance  data,  total
investment  return,  ratios and supplemental data for each year in the five-year
period  ended  December  31,  2006.  This  information  has  been  derived  from
information  contained in the financial statements and market price data for the
Company's shares."





                                                       2006        2005          2004          2003          2002
                                                     --------    --------      --------      --------      --------
                                                                                          
   PER SHARE OPERATING PERFORMANCE
     Net asset value, beginning of year               $39.00      $35.49        $33.11        $26.48        $35.14
                                                     --------    --------      --------      --------      --------
        Net investment income                            .34         .19           .32           .03           .19
        Net gain (loss) on securities - realized
          and unrealized                                4.72        5.85          3.48          7.72         (7.88)

        Other comprehensive income                       .03           -             -             -             -
                                                     --------    --------      --------      --------      --------
        Distributions on Preferred Stock:
          Dividends from net investment income          (.04)       (.03)         (.09)         (.01)         (.12)
          Distributions from net short-term
            capital gains                               (.01)       (.08)            -             -             -
          Distributions from net long-term
            capital gains                               (.36)       (.30)         (.32)         (.35)         (.23)
                                                     --------    --------      --------      --------      --------
                                                        (.41)       (.41)         (.41)         (.36)         (.35)
                                                     --------    --------      --------      --------      --------
          Total from investment operations              4.68        5.63          3.39          7.39         (8.04)
                                                     --------    --------      --------      --------      --------
        Distributions on Common Stock:
          Dividends from investment income              (.29)       (.15)         (.23)         (.02)         (.02)
          Distributions from net short-term
            capital gains                               (.04)       (.44)            -             -          (.19)
          Distributions from net long-term
            capital gains                              (2.81)      (1.53)         (.78)         (.52)         (.41)
                                                     --------    --------      --------      --------      --------
                                                       (3.14)      (2.12)        (1.01)         (.54)         (.62)
                                                     --------    --------      --------      --------      --------

     Capital Stock transaction -
        effect of Preferred Stock offering                 -           -             -          (.22)            -
                                                     --------    --------      --------      --------      --------
     Net asset value, end of year                     $40.54      $39.00        $35.49        $33.11        $26.48
                                                     ========    ========      ========      ========      ========
     Per share market value, end of year              $37.12      $34.54        $31.32        $29.73        $23.85
                                                     ========    ========      ========      ========      ========


   TOTAL INVESTMENT RETURN - Stockholder
     Return, based on market price per share           16.78%      17.40%         8.79%        27.01%       (27.21)%



   RATIOS AND SUPPLEMENTAL DATA
     Net assets applicable to Common Stock,
        end of year (000's omitted)               $1,199,453  $1,132,942    $1,036,393      $986,335      $809,192
     Ratio of expenses to average net assets
        applicable to Common Stock                      1.06%       1.25%         1.15%         1.23%         0.92%
     Ratio of net income to average net assets
        applicable to Common Stock                      0.86%       0.51%         0.94%         0.13%         0.61%
     Portfolio turnover rate                           19.10%      20.41%        16.71%        18.62%        22.67%

   PREFERRED STOCK
     Liquidation value, end of year
        (000's omitted)                             $200,000    $200,000      $200,000      $200,000     $150,000
     Asset coverage                                      700%        666%          618%          593%         639%
     Liquidation preference per share                 $25.00      $25.00        $25.00        $25.00       $25.00
     Market value per share                           $24.44      $24.07        $24.97        $25.04       $25.85

 21
18  REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
--------------------------------------------------------------------------------
    General American Investors

TO THE  BOARD OF  DIRECTORS  AND  STOCKHOLDERS  OF  GENERAL  AMERICAN  INVESTORS
COMPANY, INC.

We have audited the accompanying statement of assets and liabilities,  including
the statement of investments,  of General American Investors Company, Inc. as of
December 31, 2006,  and the related  statements of operations and changes in net
assets  for each of the two  years  in the  period  then  ended,  and  financial
highlights for each of the five years in the period then ended.  These financial
statements and financial  highlights  are the  responsibility  of the Company's
management.  Our  responsibility  is to express  an opinion on these  financial
statements and financial highlights based on our audits.

We conducted our audits in accordance  with the standards of the Public  Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material  misstatement.  We were
not engaged to perform an audit of the Company's internal control over financial
reporting.  Our audits included consideration of internal control over financial
reporting as a basis for designing audit  procedures that are appropriate in the
circumstances,  but  not  for  the  purpose  of  expressing  an  opinion  on the
effectiveness  of the  Company's  internal  control  over  financial  reporting.
Accordingly,  we express no such opinion. An audit includes examining, on a test
basis,  evidence  supporting  the  amounts  and  disclosures  in the  financial
statements.  Our  procedures  included  confirmation  of securities  owned as of
December 31, 2006, by correspondence with the custodian and brokers.  An audit
also includes assessing the accounting principles used and significant estimates
made by management,  as well as evaluating the overall financial  statement pre-
sentation.  We  believe  that our  audits  provide  a  reasonable  basis for our
opinion.

In our opinion,  the financial  statements and financial  highlights referred to
above  present  fairly,  in all material  respects,  the  financial  position of
General American  Investors  Company,  Inc. at December 31, 2006, the results of
its  operations  and the  changes in its net assets for each of the two years in
the period then ended,  and the financial  highlights for each of the five years
in the period then ended, in conformity with U.S. generally accepted  accounting
principles.

Ernst & Young LLP

New York, New York
January 17, 2007
 22
19  OFFICERS
--------------------------------------------------------------------------------
    General American Investors



   NAME (AGE)                 PRINCIPAL OCCUPATION             NAME (AGE)                PRINCIPAL OCCUPATION
    EMPLOYEE SINCE              DURING PAST 5 YEARS             EMPLOYEE SINCE            DURING PAST 5 YEARS
-----------------------------------------------------------------------------------------------------------------------------------
                                                                                 

Spencer Davidson (64)         President and Chief               Sally A. Lynch, Ph.D.(47) Vice-President of the
  1994                           Executive Officer of the         1997                       Company since 2006
                                 Company since 1995                                          securities analyst
                                                                                             (biotechnology industry)

Andrew V. Vindigni (47)       Senior Vice-President of the      Peter P. Donnelly (58)    Vice-President of the
  1988                           Company since 2006               1974                       Company since 1991
                                 Vice-President 1995-2006;                                   securities trader
                                 securities analyst (financial
                                 services industry)
                                                                Diane G. Radosti (54)     Treasurer of the
                                                                  1980                       Company since 1990
Eugene S. Stark (48)          Vice-President, Administration                                 Principal Accounting
   2005                          of the Company since 2005,                                  Officer since 2003
                                 Principal Financial Officer
                                 since 2005, Chief Compliance
                                 Officer since 2006;            Carole Anne Clementi (60) Secretary of the
                                 Chief Financial Officer of       1982                       Company since 1994
                                 Prospect Energy Corporation                                 shareholder relations
                                 (2005);                                                     and office management
                                 Vice-President of
                                 Prudential Financial, Inc.
                                 (1987-2004)                    Craig A. Grassi (38)      Assistant Vice-President of
                                                                  1991                       the Company since 2005
                                                                                             information technology
Jesse Stuart (40)              Vice-President of the
      2003                       Company since 2006
                                 securities analyst (general    Maureen E. LoBello (56)   Assistant Secretary of the
                                 industries);                     1992                       Company since 2005
                                 securities analyst & portfolio                              benefits administration
                                 manager of Scudder, Stevens
                                 and Clark (1996-2003)



     All  officers  serve for a term of one year and are elected by the Board of
     Directors  at the time of its  annual  organization  meeting  on the second
     Wednesday in April.  The address for each officer is the Company's  office.
     Other  directorships  and  affiliations  for Mr.  Davidson are shown in the
     listing of Directors on page 20.

SERVICE ORGANIZATIONS
--------------------------------------------------------------------------------
COUNSEL
Sullivan & Cromwell LLP

INDEPENDENT AUDITORS
Ernst & Young LLP

CUSTODIAN
State Street Bank and Trust Company

TRANSFER AGENT AND REGISTRAR
American Stock Transfer & Trust Company
59 Maiden Lane
New York, NY 10038
1-800-413-5499
www.amstock.com

--------------------------------------------------------------------------------

In addition to purchases of the  Company's  Common Stock as set forth in Note 2,
on page 15, purchases of Common Stock may be made at such times, at such prices,
in such amounts and in such manner as the Board of Directors may deem advisable.

In addition to distributing  financial statements as of the end of each quarter,
General  American  Investors  files a Quarterly  Schedule of Portfolio  Holdings
(Form N-Q) with the  Securities and Exchange  Commission  (SEC) as of the end of
the first and third calendar quarters.  The Company's Forms N-Q are available at
www.generalamericaninvestors.com  and on the SEC's website:  www.sec.gov.  Also,
Forms N-Q may be  reviewed  and  copied at the SEC's  Public  Reference  Room in
Washington,  DC. Information on the operation of the SEC's Public Reference Room
may be obtained by calling 1-800-SEC-0330.  A copy of the Company's Form N-Q may
be obtained by calling us at 1-800-436-8401.

On May 2, 2006, the Company submitted a CEO annual certification to the New York
Stock  Exchange  ("NYSE") on which the  Company's  principal  executive  officer
certified  that he was not  aware,  as of that  date,  of any  violation  by the
Company of the NYSE's Corporate  Governance listing standards.  In addition,  as
required by Section 302 of the Sarbanes-Oxley Act of 2002 and related SEC rules,
the Company's principal executive and principal financial officer made quarterly
certifications, included in filings with the SEC on Forms N-CSR and N-Q relating
to, among other things,  the Company's  disclosure  controls and  procedures and
internal control over financial reporting, as applicable.
 23

20  DIRECTORS
--------------------------------------------------------------------------------
    General American Investors




   NAME (AGE)                     PRINCIPAL OCCUPATION
   DIRECTOR SINCE                 DURING PAST 5 YEARS                   OTHER DIRECTORSHIPS AND  AFFILIATIONS
---------------------------------------------------------------------------------------------------------------------------------
   INDEPENDENT ("DISINTERESTED") DIRECTORS
---------------------------------------------------------------------------------------------------------------------------------
                                                                  
   Lawrence B. Buttenwieser (75)  Counsel 2002-present
   Chairman of the                Partner 1966-2002
     Board of Directors           Katten Muchin Zavis Rosenman
   1967                           and predecessor firms (lawyers)

   Arthur G. Altschul, Jr. (42)   Managing Member                       Delta Opportunity Fund, Ltd., Director
   1995                           Diaz & Altschul Capital               Diversified Natural Products, Inc., Director
                                    Management, LLC                     Medicis Pharmaceutical Corporation, Director
                                  (private investment company)          Medrium, Inc., Chairman, Board of Directors
                                                                        National Public Radio Foundation, Trustee
                                                                        Neurosciences Research Foundation, Trustee
                                                                        The Overbrook Foundation, Director

   Lewis B. Cullman (88)          Philanthropist                        Chess-in-the-Schools, Chairman, Board of Trustees
   1961                                                                 Metropolitan Museum of Art, Honorary Trustee
                                                                        Museum of Modern Art, Vice Chairman,
                                                                          International Council and Honorary Trustee
                                                                        Neurosciences Research Foundation, Vice Chairman,
                                                                          Board of Trustees
                                                                        The New York Botanical Garden, Senior Vice
                                                                          Chairman, Board of Managers

   Gerald M. Edelman (77)         Member, Professor and Chairman        Neurosciences Institute of the Neurosciences
   1976                             of the Department of Neurobiology     Research Foundation,  Director and President
                                  The Scripps Research Institute

   John D. Gordan, III (61)       Partner
   1986                           Morgan, Lewis & Bockius LLP
                                  (lawyers)

   Sidney R. Knafel (76)          Managing Partner                      IGENE Biotechnology, Inc., Director
   1994                           SRK Management Company                Insight Communications Company, Inc.,
                                  (private investment company)            Chairman, Board of Directors
                                                                        VirtualScopics, Inc., Director
                                                                        Vocollect, Inc., Director

   D. Ellen Shuman (51)           Vice President and                    Bowdoin College, Trustee
   2004                             Chief Investment Officer            Edna McConnell Clark Foundation,
                                  Carnegie Corporation of New York        Investment Advisor
                                                                        The Investment Fund for Foundations, Director

   Joseph T. Stewart, Jr. (77)    Corporate director and trustee        Foundation of the University of
   1987                                                                   Medicine and Dentistry of New Jersey, Trustee
                                                                        Marine Biological Laboratory, Member,
                                                                          Advisory Council
                                                                        United States Merchant Marine Academy, Trustee,
                                                                          Board of Advisors
                                                                        United States Merchant Marine Academy Foundation,
                                                                          Trustee

   Raymond S. Troubh (80)         Financial Consultant                  Diamond Offshore Drilling, Inc., Director
   1989                                                                 Gentiva Health Services, Inc., Director
                                                                        Sun-Times Media Group, Inc., Director
                                                                        Triarc Companies, Inc., Director

   INSIDE ("INTERESTED") DIRECTOR
------------------------------------------------------------------------------------------------------------------------------------

   Spencer Davidson (64)          President and Chief Executive Officer Medicis Pharmaceutical Corporation, Director
   1995                           General American Investors            Neurosciences Research Foundation, Trustee
                                    Company, Inc. since 1995

   All Directors serve for a term of one year and are elected by Stockholders at the time of the annual meeting on the second
   Wednesday in April.  The address for each Director is the Company's office.

                                   -------------------------------------------------------
                                           William T. Golden, Director Emeritus


 24
                    General American Investors Company, Inc.
                    450 Lexington Avenue, New York, NY 10017
                         (212) 916-8400 (800) 436-8401
                       E-mail:InvestorRelations@gainv.com
                        www.generalamericaninvestors.com
 25
ITEM 2. CODE OF ETHICS.

On July 9, 2003, the Board of Directors adopted a code of ethics that applies to
registrant's  principal  executive and senior  financial  officers.  The code of
ethics    is    available     on     registrant's     Internet     website    at
http://www.generalamericaninvestors.com/corporateinfo.html. Since the code of
ethics was adopted there have been no amendments to the code nor have there been
granted any waivers from any provisions of the code of ethics.

ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.

The Board of Directors has determined  that none of the members of  registrant's
audit committee meets the definition of "audit  committee  financial  expert" as
the term has been defined by the U.S.  Securities and Exchange  Commission  (the
"Commission").  In addition,  the Board of  Directors  has  determined  that the
members  of  the  audit  committee  have  sufficient   financial  expertise  and
experience to perform the duties and responsibilities of the audit committee.

ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

(a)  AUDIT FEES  The aggregate  fees paid and  accrued  by the  registrant  for
professional services rendered by its independent  auditors,  Ernst & Young LLP,
for the audit of the registrant's annual financial  statements and the review of
the registrant's semi-annual financial statements for 2006 and 2005 were $80,600
and $75,000, respectively.

(b) AUDIT RELATED FEES The aggregate  fees paid or accrued by the registrant for
audit-related  professional  services rendered by Ernst & Young LLP for 2006 and
2005 were $25,400 and $23,700, respectively.  Such services and related fees for
2006 and 2005 included:  performance of agreed upon  procedures  relating to the
preferred stock basic  maintenance  reports  ($6,400 and $6,000,  respectively),
review of  quarterly  employee  security  transactions  and  issuance  of report
thereon ($15,000 and $14,000,  respectively)  and other  audit-related  services
($4,000 and $3,700, respectively).

(c)  TAX  FEES  The  aggregate  fees  paid  or  accrued  by the  registrant  for
professional  services  rendered  by  Ernst & Young  LLP for the  review  of the
registrant's  federal,  state  and  city  income  tax  returns  and  excise  tax
calculations for 2006 and 2005 were $13,500 and $13,000, respectively.

(d)  ALL OTHER FEES  No such fees were billed to the registrant by Ernst & Young
LLP for 2006 or 2005.

(e)(1) AUDIT COMMITTEE PRE-APPROVAL POLICY All services to be performed for the
registrant by Ernst & Young LLP must be pre-approved by the audit committee. All
services performed during 2006 and 2005 were pre-approved by the committee.

   (2) Not applicable.

(f) Not applicable.

(g)  The  aggregate  fees  paid  or  accrued  by the  registrant  for  non-audit
professional  services  rendered by Ernst & Young LLP to the registrant for 2006
and 2005 were $38,900 and $36,700, respectively.

(h) Not applicable.

ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.

(a)  The  registrant  has  a  separately-designated   standing  audit  committee
established in accordance  with Section  3(a)(58)(A) of the Securities  Exchange
Act of 1934. The members of the audit committee are: Sidney R. Knafel, chairman,
Arthur G. Altschul, Jr., Lawrence B. Buttenwieser, Lewis B. Cullman, John D.
Gordan, III and D. Ellen Shuman.

(b) Not applicable.

ITEM 6. SCHEDULE OF INVESTMENTS

The schedule of investments in securities of unaffiliated issuers is included as
part of the report to stockholders filed under Item 1 of this form.

ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.

                    General American Investors Company, Inc.

                      PROXY VOTING POLICIES AND PROCEDURES


     General  American  Investors  Company,  Inc.  (the  "Company")  is uniquely
structured as an internally managed closed-end  investment company. Our research
efforts,  including the receipt and analysis of proxy  material,  are focused on
the securities in the Company's  portfolio,  as well as  alternative  investment
opportunities.  We vote proxies relating to our portfolio securities in the best
long-term interests of the Company.

     Our investment  approach  stresses  fundamental  security  analysis,  which
includes  an  evaluation  of the  integrity,  as  well as the  effectiveness  of
management  personnel.  In proxy material,  we review  management  proposals and
management  recommendations relating to shareholder proposals in order to, among
other things, gain assurance that management's positions are consistent with its
integrity and the long-term  interests of the company. We generally find this to
be the case and, accordingly, give significant weight to the views of management
when we vote proxies.

     Proposals  that may have an  impact  on the  rights  or  privileges  of the
securities held by the Company would be reviewed very carefully. The explanation
for a negative impact could justify the proposal; however, if such justification
were not present, we would vote against a significant reduction in the rights or
privileges associated with any of our holdings.

     Proposals  relating  to  corporate  governance  matters  are  reviewed on a
case-by-case  basis.  When they involve  changes in the state of  incorporation,
mergers or other restructuring,  we would, if necessary,  complete our review of
the rationale for the proposal by contacting company  representatives  and, with
few  exceptions,  vote  in  favor  of  management's  recommendations.  Proposals
relating to anti-takeover provisions, such as staggered boards, poison pills and
supermajorities could be more problematic.  They would be considered in light of
our  assessment  of the  capability of current  management,  the duration of the
proposal, the negative impact it might have on the attractiveness of the company
to future "investors," among other factors. We can envision  circumstances under
which we would vote against an anti-takeover provision.

     Generally,  we would vote with management on proposals  relating to changes
to the company's capital structure, including increases and decreases of capital
and  issuances  of  preferred  stock;  however,  we would  review  the facts and
circumstances associated with each proposal before finalizing our decision.

     Well-structured stock option plans and management compensation programs are
essential for companies to attract and retain high caliber management personnel.
We generally vote in favor of proposals relating to these issues; however, there
could be an occasion on which we viewed such a proposal as over  reaching on the
part of management or having the potential for excessive  dilution when we would
vote against the proposal.

     Corporations should act in a responsible manner toward their employees, the
communities in which they are located, the customers they serve and the world at
large.  We have  observed  that most  stockholder  proposals  relating to social
issues focus on a narrow issue and the corporate position set forth in the proxy
material  provides a well-considered  response  demonstrating an appropriate and
responsible  action or position.  Accordingly,  we generally support  management
recommendations  on these types of proposals;  however,  we would  consider each
proposal on a case-by-case basis.

     We take voting proxies of securities  held in our portfolio very seriously.
As indicated above, it is an integral part of the analytical  process at General
American  Investors.  Each  proposal and any  competing  interests  are reviewed
carefully on a case-by-case basis.  Generally, we support and vote in accordance
with the  recommendations of management;  however,  the overriding basis for the
votes we cast is the best long-term interests of the Company.

Date: July 9, 2003

Item 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.

As of  December  31, 2006 and the date of this  filing,  Mr.  Spencer  Davidson,
President and Chief Executive  Officer,  serves as the Portfolio  Manager of the
registrant and is responsible  for its day-to-day  management.  He has served in
this capacity  since 1995.  Mr.  Davidson does not provide such services for any
other registered  investment  companies,  pooled investment  vehicles,  or other
accounts.  For performing  such  responsibilities,  Mr.  Davidson  receives cash
compensation in the form of a fixed salary and an annual  performance bonus. The
annual  performance bonus is principally based upon the absolute  performance of
the  registrant  and  its  relative  performance  to  a  closed-end   management
investment  company peer group  (comprised of core equity funds) and the S&P 500
Index. Performance is evaluated in December by the Compensation Committee of the
Board of Directors  (the members of which are  independent  and consult with the
full Board of Directors), based upon the registrant's net asset value return and
total  investment  return during the twelve months ended October 31.  Additional
consideration is given to performance  during the subsequent  intervening period
and to  market  compensation  data  provided  by a noted  industry  compensation
consulting firm. Mr. Davidson  beneficially  owns in excess of $1 million of the
registrant's outstanding equity securities.



ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.



                                                   REGISTRANT PURCHASES OF EQUITY SECURITIES

                                                               (c) Total Number of Shares      (d) Maximum Number (or Approximate
  Period         (a) Total Number         (b) Average Price    (or Units) Purchased as Part     Dollar Value) of Shares (or Units)
                     of Shares               Paid per Share       of Publicly Announced         that May Yet Be Purchased Under
   2006         (or Units) Purchased            (or Unit)           Plans or Programs               the Plans or Programs
------------------------------------------------------------------------------------------------------------------------------------
                                                                                     
07/01-07/31            38100                  35.8238               38100                        676200

08/01-08/31            52000                  36.6649               52000                        624200

09/01-09/30            44200                  37.1442               44200                        580000

10/01-10/31            48700                  38.2654               48700                        531300

11/01-11/30            82400                  36.5333               82400                        448900

12/01-12/31            82700                  37.3596               82700                        366200
                     -------                 --------             -------                        ------
Total                 348100                                       348100
                     =======                                      =======

        Note - On July 12, 2006, the Board of Directors authorized and the registrant announced the repurchase
               of up to 400,000 shares of the registrant's common stock when the shares are trading at
               a discount from the underlying net asset value of at least 8%. This represents a continuation
               of a repurchase program which began in March 1995.  As of the beginning of the period, July 1, 2006,
               there were 314,300 shares available for repurchase under such authorization.  As of the end of the
               period, December 31, 2006, there were 366,200 shares available for repurchase under this program.





ITEM 10.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

There have been no material changes to the procedures by which  shareholders may
recommmend  nominees to the registrant's  Board of Directors as set forth in the
registrant's Proxy Statement, dated February 28, 2006.

ITEM 11. CONTROLS AND PROCEDURES.


Conclusions of principal officers concerning controls and procedures

(a) As of December 31, 2006, an evaluation was performed  under the  supervision
and with  the  participation  of the  officers  of  General  American  Investors
Company,  Inc. (the  "Registrant"),  including the principal  executive  officer
("PEO") and principal  financial officer ("PFO"), to assess the effectiveness of
the Registrant's  disclosure controls and procedures.  Based on that evaluation,
the  Registrant's  officers,  including the PEO and PFO,  concluded  that, as of
December 31, 2006, the  Registrant's  disclosure  controls and  procedures  were
reasonably  designed  so as to  ensure:  (1)  that  information  required  to be
disclosed  by the  Registrant  on  Form  N-CSR  and  on  Form  N-Q is  recorded,
processed,  summarized  and reported  within the time  periods  specified by the
rules and forms of the Securities and Exchange Commission; and (2) that material
information  relating  to the  Registrant  is made  known  to the PEO and PFO as
appropriate to allow timely decisions regarding required disclosure.

(b) There have been no significant changes in the Registrant's  internal control
over  financial  reporting  (as defined in Rule  30a-3(d)  under the  Investment
Company Act of 1940 (17 CFR 270.30a-3(d))  that occurred during the Registrant's
last fiscal quarter that has  materially  affected,  or is reasonably  likely to
materially affect, the Registrant's internal control over financial reporting.

ITEM 12. EXHIBITS

(a)(1) As indicated in Item 2., the code of ethics is posted on the registrant's
       Internet website.

(a)(2) The certifications of the principal executive officer and the principal
       financial officer pursuant to Rule 30a-2(a)under the Investment Company
       Act of 1940 are attached hereto as Exhibit 99 CERT.

(a)(3) There were no written  solicitations  to  purchase  securities under
       the Rule 23c-1  under the  Investment Company Act of 1940 during the
       period covered by the report.

(b)    The certifications of the principal executive officer and the principal
       financial officer pursuant to Rule 30a-2(b) under the Investment Company
       Act of 1940 are attached hereto as Exhibit 99.906 CERT.


 27
SIGNATURES

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

General American Investors Company, Inc.

By: /s/Eugene S. Stark
    Eugene S. Stark
    Vice-President, Administration

Date: February 9, 2007

  Pursuant to the requirements of the Securities Exchange Act of 1934 and
the Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.

By: /s/Spencer Davidson
    Spencer Davidson
    President and Chief Executive Officer
    (Principal Executive Officer)

Date: February 9, 2007

By: /s/Eugene S. Stark
    Eugene S. Stark
    Vice-President, Administration
    (Principal Financial Officer)

Date: February 9, 2007