SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                         RULE 23C-2 NOTICE OF INTENTION
                              TO REDEEM SECURITIES

                                       OF

                          FLAHERTY & CRUMRINE PREFERRED
                            INCOME FUND INCORPORATED

                      301 E. Colorado Boulevard, Suite 720
                               Pasadena, CA 91101
                                 (626) 795-7300

                                    under the

                         Investment Company Act of 1940

                    Investment Company Act File No. 811-06179

                  The undersigned registered closed-end investment company
hereby notifies the Securities and Exchange Commission that it intends to redeem
securities of which it is the issuer, as set forth below in accordance with the
requirements of Rule 23c-2 under the Investment Company Act of 1940, as amended,
and states that it is filing this notice with the Commission pursuant to
permission granted by the Commission's staff fewer than 30 days prior to the
date set for redemption.

         (1)      TITLE OF THE CLASS OF SECURITIES OF FLAHERTY & CRUMRINE
                  PREFERRED INCOME FUND INCORPORATED (THE "FUND") TO BE
                  REDEEMED:

                  Auction Preferred Stock (CUSIP #338480205) par value $.01 per
         share, liquidation preference of $100,000 per share (the "Preferred
         Stock").

         (2)      DATE ON WHICH THE SECURITIES ARE TO BE CALLED OR REDEEMED:

                           November 12, 2008

         (3)      APPLICABLE PROVISIONS OF THE GOVERNING INSTRUMENT PURSUANT TO
                  WHICH THE SECURITIES ARE TO BE CALLED OR REDEEMED:

                  The shares of Preferred Stock are to be redeemed pursuant to
         Part I, Articles 3(a) and 3(b), of the Fund's Articles Supplementary
         Creating and Fixing the Rights of Auction Preferred Stock.


         (4)      THE NUMBER OF SHARES TO BE REDEEMED AND THE BASIS UPON WHICH
                  THE SHARES TO BE REDEEMED ARE TO BE SELECTED:

                  The Fund intends to redeem, by lot (as determined by the
         Depository Trust Company), 150 shares of Preferred Stock.





                                    SIGNATURE

                  Pursuant to the requirement of Rule 23c-2 of the Investment
Company Act of 1940, the Fund has duly caused this Notice of Intention to Redeem
Securities to be signed on its behalf by the undersigned, in the City of
Pasadena and the State of California, on this 28th day of October 2008.

                                             FLAHERTY & CRUMRINE PREFERRED
                                             INCOME FUND INCORPORATED



                                             By:      /S/ R. ERIC CHADWICK
                                             -----------------------------------
                                             Name: R. Eric Chadwick
                                             Title:   Chief Financial Officer