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CORRESP
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McRae Industries,Inc.

Mark R. Busch

704.331.7440

Fax: 704.353.3140

mbusch@kennedycovington.com

September 29, 2005

VIA: EDGAR

Securities and Exchange Commission

Division of Corporation Finance, Mail Stop 3561

450 Fifth Street, NW

Washington, DC 20549-0308

    Attention:

    Scott Anderegg, Esq.

    RE:

    McRae Industries, Inc.

    Schedule 13E-3 (File no. 5-34909)

    Preliminary Proxy Statement on Schedule 14A (File no. 1-8578)

Ladies and Gentlemen:

     Our client, McRae Industries, Inc. (the “Company”) has today filed Amendment No. 3 to its
Schedule 13E-3 (SEC file no. 5-34909) as well as Amendment No. 3 to its Preliminary Proxy Statement
on Schedule 14A (SEC file no. 1-8578). The Proxy Statement filed today reflects the changes made
in response to the comments in the staff’s comment letters dated September 9, 2005 and September
26, 2005. The responses below are keyed to the number of each of the comments.

     The responses to the comments included in the September 9, 2005 comment letter, which have
been prepared by the Company with input from its advisors, are as follows:

    Comment

    No.

    Response

    1

    The “Special Factors — Recommendation of the Special
Committee” section of proxy statement has been revised by
deleting the sentence that stated that “[n]either brokers and
other nominees nor beneficial owners are record holders.” The
“Questions and Answers” section of the proxy statement already
included detailed information regarding what actions security
holders may take to be certain of the manner in which their
shares will be treated.

Securities and Exchange Commission

September 29, 2005

Page 2

    Comment

    No.

    Response

    2

    The “Special Factors — Recommendation of the Special
Committee” section of proxy statement has been revised to
clarify how each of the factors that supported the special
committee’s fairness determination with respect to
unaffiliated security holders who would be cashed out also
supported the special committee’s fairness determination with
respect to unaffiliated security holders who would remain
following the transaction.

    3

    The “Special Factors — Recommendation of the Special
Committee” section of the proxy statement has been revised to
provide additional details regarding why the special committee
believed that the Company’s going concern value significantly
exceeded its liquidation value.

    4

    The “Opinion of the Financial Advisor” section of the proxy
statement has been revised to further explain why Oxford
Advisors believed that among all methodologies typically used
by expert financial advisors, the ones it used were the most
appropriate for determining the value of the Company in this
particular transaction.

    5

    The “Opinion of the Financial Advisor” section of the proxy
statement has been revised to describe how the size of the
companies used in the comparable company analysis and the size
of the transactions and the companies involved in the
transactions used in the comparable transactional analysis
factored into such analyses.

    6

    The “Opinion of the Financial Advisor” section of the proxy
statement has been revised to clarify how the comparable
transactional analysis supports Oxford Advisor’s fairness
opinion and to further explain why Oxford Advisors believed
that the premium proposed to be paid in the transaction over
the highest price paid for the common stock over the 12-month
period prior to announcement of the transaction was a better
indicator of fairness than the premium proposed to be paid in
the transaction over the closing price on the day prior to the
announcement of the transaction.

Securities and Exchange Commission

September 29, 2005

Page 3

     The responses to the comments included in the September 26, 2005 comment letter, which have
been prepared by the Company with input from its advisors, are as follows:

    Comment

    No.

    Response

    1

    Oxford Advisors determined that the companies included in the
comparable company analysis had operations and size most
comparable to the Company’s even though most were
significantly larger than the Company because they were the
smallest publicly traded companies with operations comparable
to the Company’s that it was able to identify. As the
“Opinion of the Financial Advisor” section of the proxy
statement previously noted, Oxford Advisors took into account
the significantly larger median size of the comparable
companies as compared to the Company by discounting the
average multiples of the comparable companies by 15%. The use
of the term “size” in the Comparable Company Analysis
subsection of the “Opinion of the Financial Advisor” section
of the proxy statement refers to total revenues. The first
paragraph of the Comparable Company Analysis subsection of the
“Opinion of the Financial Advisor” section of the proxy
statement has been revised to note the above.

    2

    Oxford Advisors believed that fact that the Company was
proposing to pay the highest price paid for the common stock
over the 12-month period prior to announcement of the
transaction was a better indicator of fairness than the amount
of the premium over the closing price on the day prior to the
announcement of the transaction primarily because, as the
“Opinion of the Financial Advisor” section of the proxy
statement previously noted, the Company’s military boot unit’s
operating profits were down by 75% for the first six months of
fiscal 2005 compared to the first six months of fiscal 2004
and in Oxford Advisor’s view the future profitability of this
core business was uncertain. The Comparable Transactional
Analysis subsection of the “Opinion of the Financial Advisor”
section of the proxy statement has been revised to clarify
this point.

    Oxford Advisors’ comparable transactional analysis included
far too many companies for tabular presentation of the premium
calculations for each to be practicable. However, to more
clearly present the results of the comparable transactional
analysis, tabular presentation of the premium ranges
calculated compared to the premiums proposed to be paid in the
transaction has been added to the Comparable Transactional
Analysis subsection of the “Opinion of the Financial Advisor”
section of the proxy statement.

Securities and Exchange Commission

September 29, 2005

Page 4

     I hereby confirm on behalf of the Company, D. Gary McRae and James W. McRae (collectively, the
“Filings Persons”) that:

    •

    The Filing Persons are responsible for the adequacy and accuracy of the disclosure
in the filings;

    •

    Staff comments or changes to disclosure in response to staff comments do not
foreclose the Commission from taking any action with respect to the
filings; and

    •

    The Filing Persons may not assert staff comments as a defense in any proceeding
initiated by the Commission or any person under the federal securities laws of the
United States.

Very truly yours,

/s/ Mark R. Busch

Mark R. Busch

For the Firm

    cc:

    McRae Industries, Inc.