The two-level theory of mental abilities posits two broad classes of ability: level I (learning and memory) and level II (the "g" factor of intelligence tests, reasoning, abstraction, and problem solving). Levels I and II are hypothesized to interact with SES and/or race such that: (l) SES differences are greater for level II than for I, and (2) the correlation between levels I and II, and the regression of level I upon II, are greater in upper than in lower SES populations. These hypotheses are borne out by digit span memory measures and Lorge-Thorndike Verbal and Nonverbal Intelligence Tests, obtained on all the white and black pupils in grades 4-6 in a California school district. Analyses were performed on raw scores, and orthogonal and oblique factor scores. The largest effects in accord with the hypotheses are attributable to differences between the white population (all SES levels) and the low SES black group. One aspect of the two-level theory as originally formulated must be revised in light of the present evidence--i.e. the hypothesis of hierarchical functional dependence of level II performance on level I ability. There appears only to be slight degree of such dependence of level II on level I, and more for Nonverbal than for Verbal intelligence test scores. (Author)