BULL & BEAR U S GOVERNMENT SECURITIES FUND INC, N-30D, 1999-03-12

BULL & BEAR U S GOVERNMENT SECURITIES FUND INC
N-30D, 1999-03-12

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U.S. GOVERNMENT SECURITIES FUND
11 Hanover Square
New York, NY 10005

1-888-847-4200

American Stock
Exchange Symbol: BXL
Semi-Annual Report
December 31, 1998

February 10, 1999

Fellow Shareholders:

It is a pleasure to report that the Fund's market total returns to
shareholders continue to be excellent and among the best of all 25 closed-end
government bond funds tracked by Morningstar, Inc. (an independent financial
analysis firm). According to Morningstar, 16.07% is the Fund's market total
return for the 12 months ending December 31, 1998 (ranking #1 of 24 funds) (NAV
return 6.35%). This compares favorably with the Lipper Government securities
Index total return of +7.82%, and the Lipper Morgage Backed Securities Index
total return of 6.43% for the same period in each case.

Investment in Equities

Commencing October 19, 1998, the Fund began investing in equity and
other securities. Although as of December 31, 1998, these investments comprised
less than 5% of total net assets, the performance of this sector of the Fund's
portfolio has been very rewarding - with a 16.09% total return including
dividends in the approximate two and a half month period. Over the course of
1999, the Fund anticipates making continued investments in equities and other
securities to substantially increase this allocation.

Review and Outlook

Declining interest rates are most frequently associated with slowing
growth and rising unemployment, but that was not the case last summer and fall.
During this period, in response to distressed financial market conditions, the
Federal Reserve pre-emptively lowered its Federal Funds rate target by a total
of 0.75 %, but the U.S. economy grew at around a 4% rate, well above "trend,"
and unemployment fell to less than 4.5%.

The injection of liquidity by the Federal Reserve and central
bankers throughout the developed world restored financial market stability and
caused a significant decline in U.S. interest rates. U.S. government debt prices
also rose during this period due to their attraction as a safe haven during
times of turmoil. Between the end of June and year end, 30 year Treasury bond
rates fell by over 0.5%, and briefly yielded less than 4.75%. Shorter term
assets, such as Treasury notes maturing in two years, declined briefly by almost
a full percent, to as low as 3.75%, as investors sought safety and liquidity,
and anticipated additional Federal Reserve easing. Since late autumn, as
financial markets have recovered and the domestic economy has continued to
expand, interest rates have risen moderately.

Ironically, with consumer inflation up only 1.6% over the last year,
and rising only 0.8% in the fourth quarter the lowest in 40 years - the 4.75%
Federal Funds rate is still somewhat restrictive by historic measures. Despite
the recent eases, the economy continues to perform well, growing at a robust
5.6% rate in the fourth quarter alone. Additionally, the $70 billion Federal
budget surplus also exerts a fiscal drag on the economy. A variety of factors,
including declining import and commodity prices, high levels of industrial
capacity, and increases in productivity have all contributed to the strength of
the expansion. In any event, the limited supply of new Treasury debt is a
positive for the bond market.

<PAGE>

We do not anticipate currently a change in Federal Reserve policy in
the short term. Should imbalances reemerge in financial markets, we have every
confidence that the Federal Reserve will act decisively to maintain relative
stability.

8% Dividend Distribution Policy Continued

The adoption by the Fund's Board of Directors in December 1997 of a
managed 8% dividend distribution policy has been well received. The policy is
intended to provide shareholders with a stable cash flow and reduce or eliminate
any market price discount to net asset value. The quarterly dividend
distributions of approximately 8% on an annual basis of the Fund's net asset
value will be paid primarily from ordinary income and any capital gains with the
balance representing return of capital. For the twelve months ended December 31,
1998, actual distributions were 8.13% of average net assets with approximately
80% derived from net investment income and the balance from return of capital.
We believe shares of the Fund are a sound value and an attractive investment for
income oriented portfolios.

Dividend Reinvestment Plan Offers Important Advantage

The Fund's current net asset value is $14.20. With a recent closing
market price of $13.00 per share, we believe this represents an important
opportunity to purchase additional shares at an attractive discount from their
underlying value. The Fund's Dividend Reinvestment Plan is particularly
attractive because quarterly dividend distributions are reinvested without
charge at the lower of net asset value per share or market price, which can
contribute significantly to growing your investment over time. Please call toll
1-888-847-4200 and we will be happy to assist you.

We appreciate your support and look forward to continuing to serve
your investment needs.

Sincerely,

Thomas B. Winmill Steven A. Landis
President Senior Vice President
Portfolio Manager

BULL & BEAR U.S. GOVERNMENT SECURITIES FUND, INC.
Schedule of Portfolio Investments - December 31, 1998 (Unaudited)

Principal Market
Amount Value

U.S. Government Obligations (30.0%)
$1,000,000 U.S. Treasury Note, 5.75%, due 10/31/02 $ 1,036,250
1,000,000 U.S. Treasury Note, 6.625%, due 5/15/07 1,125,000
1,000,000 U.S. Treasury Note, 4.75%, due 11/15/08 1,008,125
400,000 U.S. Treasury Note, 6.125%, due 11/15/27 448,125
Total U.S. Government Obligations (cost: $3,493,728) 3,617,500

U.S. Government Agencies (67.6%)
1,000,000 Federal Home Loan Bank, 6.46%, due 10/12/12 1,097,719
1,000,000 Federal National Mortgage Assn., 6.08%, due 9/25/00 1,018,262
1,000,000 Federal National Mortgage Assn., 6.41%, due 11/13/12 1,091,991
660,391 Government National Mortgage Assn., 6.50%, due 7/15/08 672,774
997,461 Government National Mortgage Assn., 6.50%, due 1/15/28 988,156
1,595,032 Government National Mortgage Assn., 7.0%, due 11/15/10 1,640,890
572,747 Government National Mortgage Assn., 7.0%, due 6/15/23 586,527
114,788 Government National Mortgage Assn., 7.0%, due 5/15/24 117,550
889,386 Government National Mortgage Assn., 7.25%, due 1/15/27 913,984
Total U.S. Government Agencies (cost: $7,860,511) 8,127,853

Shares Common Stocks (2.4%)
1,500 Federal National Mortgage Association 111,000
1,900 Federal Home Loan Mortgage Corporation 122,431
2,000 Northwestern Corporation 52,875
Total Common Stocks (cost: $247,582) 286,306

Total Investments (cost: $11,601,821) (100.0%) $12,031,659

See accompanying notes to financial statements.

Notes to Financial Statements

(1) The Fund, a Maryland corporation, is registered under the Investment Company
Act of 1940, as amended, as a

<PAGE>

diversified closed-end management investment company. The Fund's shares are
listed on the American Stock Exchange. The investment objective of the Fund is
to provide investors with a high level of income, liquidity, and safety of
principal. The Fund seeks to achieve its investment objective by investing
primarily in securities backed by the full faith and credit of the United
States, as set forth in its prospectus. The following is a summary of
significant accounting policies consistently followed by the Fund in the
preparation of its financial statements. With respect to security valuation,
securities listed or traded on a national securities exchange or the Nasdaq
National Market System ("NMS") are valued at the last quoted sales price on the
day the valuations are made. Such listed securities that are not traded on a
particular day and securities traded in the over-the-counter market that are not
on the NMS are valued at the mean between the current bid and asked prices.
Securities for which quotations from the national securities exchange or the NMS
are not readily available or reliable and other assets may be valued based on
over-the-counter quotations or at fair value as determined in good faith by or
under the direction of the Board of Directors. Debt obligations with remaining
maturities of 60 days or less are valued at cost adjusted for amortization of
premiums and accretion of discounts. Investment transactions are accounted for
on the trade date (date the order to buy or sell is executed). Interest income
is recorded on the accrual basis. In preparing financial statements in
conformity with generally accepted accounting principles, management makes
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements, as well as the reported
amounts of revenues and expenses during the reporting period. Actual results
could differ from those estimates.

(2) The Fund intends to comply with the requirements of the Internal Revenue
Code applicable to regulated investment companies and to distribute
substantially all of its taxable investment income and net capital gains, if
any, after utilization of any capital loss carryforward, to its shareholders and
therefore no Federal income tax provision is required. At June 30, 1997, the
Fund had an unused capital loss carryforward of approximately $2,508,000, of
which $1,716,000 expires in 1998, $361,000 in 2003, $202,000 in 2004 and
$229,000 in 2005. Based on Federal income tax cost of $13,721,354, gross
unrealized appreciation and gross unrealized depreciation were $128,390 and
$76,832, respectively at June 30,1997.

(3) The Fund retains Bull & Bear Advisers, Inc. as its Investment Manager. Under
the terms of the Investment Management Agreement, the Investment Manager
receives a management fee, payable monthly, based on the average weekly net
assets of the Fund, at the annual rate of 7/10 of 1% of the first $250 million,
5/8 of 1% from $250 million to $500 million, and 1/2 of 1% over $500 million.
The Investment Manager has agreed to waive all or part of its fee or reimburse
the Fund monthly if and to the extent the aggregate operating expenses of the
Fund exceed the most restrictive limit imposed by any state in which shares of
the Fund are qualified for sale, although currently the Fund is not subject to
any such limits. Certain officers and directors of the Fund are officers and
directors of the Investment Manager and Investor Service Center, Inc., the
Fund's former distributor. The Fund reimbursed the Investment Manager $4,003 for
providing certain administrative and accounting services at cost for the year
ended June 30, 1997. The Fund had a plan of distribution pursuant to Rule 12b-1
under the Investment Company Act of 1940 (the "12b-1 Plan"). Pursuant to the
12b-1 Plan, the Fund paid the Distributor a fee in an amount of one-quarter of
one percent per annum of the Fund's average daily net assets as compensation for
distribution and service activities. The fee was intended to cover personal
services provided to shareholders in the Fund and the maintenance of shareholder
accounts and all other activities and expenses primarily intended to result in
the sale of the Fund's shares. Effective with the conversion of the Fund to a
closed-end management investment company, the 12b-1 plan was terminated.
Investor Service Center also received $3,357 for shareholder administration
services which it provided to the Fund at cost for the period from July 1, 1996
to October 4, 1996.

(4) Purchases and proceeds of sales of U.S. government obligations other than
short term investments aggregated $30,406,318 and $28,090,166, respectively, for
the year ended June 30, 1997. Under an agreement with the custodian, custodian
fees are reduced by credits for cash balances. Such reductions amounted to
$6,480 during the year ended June 30, 1997

(5) The Fund has a committed bank line of credit for temporary or emergency
purposes. At June 30, 1997, there was no balance outstanding and the interest
rate was equal to the Federal Reserve Funds Rate plus 1.75 percentage points.
For the year ended June 30, 1997, the weighted average interest rate was 5.12%
based on the balances outstanding from the line of credit and the reverse
repurchase agreement during the year and the weighted average

<PAGE>

amount outstanding was $405,632.

(6) Effective October 4, 1996, the Fund converted from an open-end management
investment company to a closed-end management investment company. In connection
with the conversion, costs of approximately $73,428 have been charged against
paid-in capital. In addition, the Fund has adopted a Dividend Reinvestment Plan
(the "Plan"). Under the Plan, each dividend and capital gain distribution, if
any, declared by the Fund on outstanding shares will, unless elected otherwise
by each shareholder by notifying the Fund in writing at any time prior to the
record date for a particular dividend or distribution, be paid on the payment
date fixed by the Directors in additional shares in accordance with the
following: whenever the Market Price (as defined below) per share is equal to or
exceeds the net asset value per share at the time shares are valued for the
purpose of determining the number of shares equivalent to the cash dividend or
capital gain distribution (the "Valuation Date"), participants will be issued
additional shares equal to the amount of such dividend divided by the Fund's net
asset value per share. Whenever the Market Price per share is less than such net
asset value on the Valuation Date, participants will be issued additional shares
equal to the amount of such dividend divided by the Market Price. The Valuation
Date is the dividend or distribution payment date or, if that date is not an
American Stock Exchange trading day, the next trading day. For all purposes of
the Plan: (a) the Market Price of the shares on a particular date shall be the
average closing market price on the five trading days the shares traded
ex-dividend on the Exchange prior to such date or, if no sale occurred on the
Exchange prior to such date, then the mean between the closing bid and asked
quotations for the shares on the Exchange on such date, and (b) net asset value
per share on a particular date shall be as determined by or on behalf of the
Fund.

STATEMENT OF ASSETS AND LIABILITIES
December 31, 1998 (Unaudited)

ASSETS:
Investments at market value
(cost: $11,601,821) (note 1) ...... $12,031,659
Interest receivable ........................... 94,652
Other assets .................................. 958
Total assets ...................... 12,127,269
LIABILITIES:
Payables:
Borrowings - reverse repurchase agreement .................... 1,007,500
Demand note payable to bank (note 5) ......................... 190,431
Interest ..................................................... 241
Accrued expenses ................................................ 8,576
Total liabilities .......................................... 1,206,748

NET ASSETS: (applicable to 755,079
outstanding shares: 250,000,000 shares
of $.01 par value authorized) ........................ $10,920,521

NET ASSET VALUE PER SHARE:
($10,920,521 / 755,079 shares outstanding) ........... $14.46
At December 31, 1998, net assets consisted of:
Paid-in capital ...................................... $11,486,760
Accumulated net realized loss
on investments ........................... (675,590)
Accumulated deficit in investment income ............. (320,486)
Net unrealized appreciation on investments ........... 429,837
$10,920,521

STATEMENT OF OPERATIONS
For the Six Months Ended December 31, 1998 (Unaudited)

INVESTMENT INCOME:
Interest ....................................................... $383,137
Dividend ....................................................... 1,103
Total investment income ............................ 384,240
EXPENSES:
Legal (note 7) ................................................. 163,026
Investment management (note 3) ................................. 38,890
Interest ....................................................... 38,143
Directors ...................................................... 16,685
Custodian ...................................................... 13,698
Transfer agent ................................................. 8,106
Accounting and audit (note 3) .................................. 6,352
Printing ....................................................... 5,546
Registration (note 3) .......................................... 4,335
Other .......................................................... 914
Expenses ........................................... 295,695
Investment management fees waived (note 3) ......... (38,890)
Fee reduction (note 4) ............................. (1,600)
Net expenses ....................................... 255,205
Net investment income .................. 129,035
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Net realized gain from security transactions .................... 117,027
Unrealized appreciation of investments during the period ........ 224,378
Net realized and unrealized gain on investments .......... 341,405
Net increase in net assets resulting from operations ..... $470,440

<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS
For the Six Months Ended December 31, 1998
(Unaudited) and for the Year Ended June 30, 1998
31-Dec-98 June 30, 1998
OPERATIONS:

<S> <C> <C>
Net investment income ................................................. 129,035 186,230
Net realized gain from security transactions .......................... 117,027 311,085
Unrealized appreciation of investments during the period .............. 224,378 153,901
Net change in net assets resulting from operations ..... 470,440 651,216
Subtractions from paid in capital (note 6) ............................ - -39,253
DISTRIBUTIONS TO SHAREHOLDERS:
Distributions from net investment income ($0.44 and $0.25 per
share, respectively) .................................................. -332,494 -186,230
Distributions in excess of net realized gains ($0.16 and $0.42
per share, respectively) .............................................. -117,027 -311,085
Distributions from paid in capital ($0.42 per share) - -307,240
CAPITAL SHARE TRANSACTIONS:
Change in net assets resulting from reinvestment of distributions
(7,843 and 14,896 shares, respectively) (note 6) ....... 105,477 195,513
Total increase in net assets ........................... 126,396 2,921
NET ASSETS:
Beginning of period ................................................... 10,794,125 10,791,204
End of period ......................................................... $10,920,521 $10,794,125
</TABLE>

Notes to Financial Statements
(Unaudited)
(1) The Fund, a Maryland corporation, is registered under the Investment Company
Act of 1940, as amended, as a diversified closed-end management investment
company. The Fund's shares are listed on the American Stock Exchange. The
investment objective of the Fund is to provide investors with a high level of
income, liquidity, and safety of principal. The Fund seeks to achieve its
investment objective by investing primarily in securities backed by the full
faith and credit of the United States, as set forth in its prospectus. On August
17, 1998, the Fund announced that it intends to invest up to 35% of its total
assets in equity and other securities, commencing on October 19, 1998. The
following is a summary of significant accounting policies consistently followed
by the Fund in the preparation of its financial statements. With respect to
security valuation, securities listed or traded on a national securities
exchange or the Nasdaq National Market System ("NMS") are valued at the last
quoted sales price on the day the valuations are made. Such listed securities
that are not traded on a particular day and securities traded in the
over-the-counter market that are not on the NMS are valued at the mean between
the current bid and asked prices. Securities for which quotations from the
national securities exchange or the NMS are not readily available or reliable
and other assets may be valued based on over-the-counter quotations or at fair
value as determined in good faith by or under the direction of the Board of
Directors. Debt obligations with remaining maturities of 60 days or less are
valued at cost adjusted for amortization of premiums and accretion of discounts.
Investment transactions are accounted for on the trade date (date the order to
buy or sell is executed). Interest income is recorded on the accrual basis.
Premiums and discounts are amortized in accordance with income tax regulations.
In preparing financial statements in conformity with generally accepted
accounting principles, management makes estimates and assumptions that affect
the reported amounts of assets and liabilities at the date of the financial
statements, as well as the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

(2) The Fund intends to comply with the requirements of the Internal Revenue
Code applicable to regulated investment companies and to distribute
substantially all of its taxable investment income and net capital gains, if
any, after utilization of any capital loss carryforward, to its shareholders and
therefore no Federal income tax provision is required. At June 30, 1998, the
Fund had an unused capital loss carryforward of approximately $772,000, of which
$361,000 expires in 2003, $202,000 in 2004 and $209,000 in 2005. Based on
Federal income tax cost of $11,601,821, gross unrealized appreciation was
$429,837at December 31, 1998.

(3) The Fund retains Bull & Bear Advisers, Inc. as its Investment Manager
pursuant to an investment management agreement. As compensation for the services
provided pursuant to such agreement, the Fund pays to the Investment Manager a
fee from its assets, such fee to be computed weekly and payable monthly in
arrears

<PAGE>

at the annual rate of 0.70% of the first $250 million, 0.625% from $250 million
to $500 million, and 0.50% over $500 million of the Fund's assets. This fee is
calculated by determining net assets on each Friday and applying the applicable
rate to such amount for the number of days in the week. The Investment Manager
has agreed to waive all or part of its fee or reimburse the Fund monthly if and
to the extent the aggregate operating expenses of the Fund exceed the most
restrictive limit imposed by any state in which shares of the Fund are qualified
for sale, although currently the Fund is not subject to any such limits. The
Investment Manager voluntarily waived $38,890 of its management fee during the
six months ended December 31, 1998. Certain officers and directors of the Fund
are officers and directors of the Investment Manager. The Fund reimbursed the
Investment Manager $2,226 for providing certain administrative and accounting
services at cost for the six months ended December 31, 1998.

At the Annual Meeting of Shareholders ("Annual Meeting") of the Fund held on
December 18, 1998, shareholders were asked to elect a director, to ratify the
selection of independent auditors for the fiscal period ending December 31,
1998, and to approve amending the Fund's Articles of Incorporation to change the
Fund's name. Shareholders elected Frederick A. Parker, Jr. director of the Fund
with 232,930 shares voting in favor, 271,848 shares voting to withhold
authority, and 1,681 shares not voting. The names of each other director whose
term of office continued after the meeting are Bassett S. Winmill, Mark C.
Winmill, Thomas B. Winmill, and Douglas Wu. Regarding ratification of
independent auditors, 227,627 shares voted in favor, 252,182 shares voted
against, 24,969 shares voted to abstain, and 1,681 did not vote. Regarding
amendment of the Fund's Articles of Incorporation to change the Fund's name;
183,014 shares voted in favor, 289,144 shares voted against, 32,620 shares voted
to abstain, and 1,681 shares did not vote.

Although not properly brought before the Annual Meeting and subject to the
Fund's objections and reservations in connection therewith, stockholder
proposals were made to adjourn the meeting and to terminate the Investment
Management Agreement. With respect to the first adjournment proposal, 100,890
shares voted in favor, 264,571 shares voted against, 0 shares voted to abstain,
and 140,998 shares did not vote. With respect to the second adjournment
proposal, 100,890 shares voted in favor, 264,571 shares voted against, 0 shares
voted to abstain, and 140,998 shares did not vote. With respect to the
termination proposal, 234,505 shares voted in favor, 2,770 shares voted against,
2,932 shares voted to abstain, and 266,252 did not vote.

(4) The Fund has entered into an arrangement with its custodian whereby interest
earned on uninvested cash balances was used to offset a portion of the Fund's
expenses. During the period, the Fund's custodian fees were reduced by $1,600,
under such arrangements. Purchases and proceeds of sales of U.S. government
obligations other than short term investments aggregated $8,484,769 and
$9,353,672, respectively, for the six months ended December 31, 1998.

(5) The Fund has a committed bank line of credit. At December 31, 1998, the
balance outstanding was $190,431 and the interest rate was equal to the Federal
Reserve Funds Rate plus 1.00 percentage point. For the six months ended December
31, 1998, the annualized weighted average interest rate was 4.34% based on the
balances outstanding from the line of credit and the reverse repurchase
agreement during the year and the weighted average amount outstanding was
$1,742,234.

<PAGE>

such dividend divided by the Market Price. The Valuation Date is the dividend or
distribution payment date or, if that date is not an American Stock Exchange
trading day, the next trading day. For all purposes of the Plan: (a) the Market
Price of the shares on a particular date shall be the average closing market
price on the five trading days the shares traded ex-dividend on the Exchange
prior to such date or, if no sale occurred on the Exchange prior to such date,
then the mean between the closing bid and asked quotations for the shares on the
Exchange on such date, and (b) net asset value per share on a particular date
shall be as determined by or on behalf of the Fund.

(7) A group called Karpus Investment Management ("KIM") at the 1997 annual
meeting of the Fund sought to elect its slate of nominees in opposition to
management and at the 1998 annual meeting of the Fund made a counter
solicitation on all management proposals and a solicitation to terminate the
investment management agreement. On February 19, 1998, KIM filed a lawsuit
against the Fund in the Circuit Court for Baltimore City, Maryland, Case No.
9805005, which was dismissed with prejudice on October 1, 1998. On February 19,
1998, the Fund filed a lawsuit against KIM in the United States District Court
for the Southern District of New York, 98 Civ. 1190. On December 22, 1998, KIM
filed a lawsuit against the Fund in the United States District Court for the
District of Maryland Court, 98-CV-4161 and the Fund has made counterclaims. In
connection with these and related matters, legal expenses borne by the Fund was
$163,026 for the six months ended December 31, 1998. In addition, KIM has filed
proxy materials to remove the Investment Manager of the Fund. The outcome of
these matters and their effect on the Fund or the management agreement with the
Investment Manager cannot be predicted with certainty.
<TABLE>
<CAPTION>
FINANCIAL HIIGHLIGHTS
Six
Months
Ended
December
31,
PER SHARE DATA 1998** 1998 1997 1996 1995 1994

<S> <C> <C> <C> <C> <C> <C>
Net asset value at beginning of period ................... $14.45 $14.74 $14.74 $15.20 $14.63 $15.53
Income from investment operations:
Net investment income ................................... 0.17 0.25 0.7 0.64 0.73 0.78
Net realized and unrealized ............................. 0.44 0.55 0.01 -0.46 0.6 -1.03
gain (loss) on investments
Total from investment ................................... 0.61 0.8 0.71 0.18 1.33 -0.25
operations
Less distributions:
Distributions from net investment income ................ -0.44 -0.25 -0.71 -0.64 -0.76 -0.65
Distributions in excess of net realized gains ........... -0.16 -0.42 _ _ _ _
Distributions from paid in capital ...................... _ -0.42 _ _ _ _
Increase (decrease) in net asset value .................. 0.01 -0.29 _ -0.46 0.57 -0.90
Net asset value at end of period ......................... $14.46 $14.45 $14.74 $14.74 $15.20 $14.63
Per share market value at end of period .................. $13.75 $13.13 $12.63
TOTAL RETURN ON NET ASSET VALUE BASIS .................... 4.58% 6.43% 5.58% 1.18% 9.40% -1.76%
TOTAL RETURN ON MARKET VALUE BASIS (a) ................... 9.44% 12.87% -9.57%
RATIOS/SUPPLEMENTAL DATA
Net assets at end of period (000's omitted) .............. $10,921 $10,794 $10,791 $13,035 $16,377 $17,777
Ratio of expenses to average net assets (b)(c)(d) ........ 4.62%* 5.77% 2.13% 2.10% 2.00% 1.85%
Ratio of net investment income to average net assets (e) . 2.32%* 1.69% 4.48% 4.25% 4.96% 4.16%
Portfolio turnover rate .................................. 68% 168.00% 246% 762% 482% 261%
</TABLE>

* Annualized.
** Unaudited
(a) Effective October 4, 1996, the Fund converted from an open-end
management investment company to a closed-end management investment company. The
Fund has calculated total return based upon purchases and sales of shares of the
Fund at current market values and reinvestment of dividends and distributions at
the lower of the per share net asset value on the payment date or the average of
the closing market price for the five days preceding the payment date.
(b) Ratio after custodian credits was 4.59%* and 2.07% for the six
months ended December 31, 1998 and the year ended June 30, 1997, respectively.
Prior to July 1,1996, there were no reductions in custodian fees. There were no
custodian credits for the year ended June 30, 1998.
(c) Ratio excluding interest expense was 3.94%*, 4.93% and 1.94% for
the six months ended December 31, 1998 and the years ended June 30, 1998 and
1997, respectively
(d) Ratio prior to reimbursement was 5.32%* and 5.82% for the six
months ended December 31, 1998 and the year ended June 30, 1998, respectively.

(e) Ratio prior to reimbursement was 3.02%* and 1.64% for the six months
ended December 31, 1998 and the year ended June 30, 1998, respectively.

Bull & Bear U.S. Government Securities Fund, Inc.
By-laws As Amended March 3, 1999

AMENDED BY-LAWS
OF
BULL & BEAR U.S. GOVERNMENT SECURITIES FUND, INC.

(A MARYLAND CORPORATION)

ARTICLE I -- NAME OF CORPORATION, LOCATION OF OFFICES AND SEAL

Section 1.1. Name. The name of the Corporation is Bull & Bear U.S. Government
Securities Fund, Inc.

Section 1.2. Principal Offices. The principal office of the Corporation in the
State of Maryland shall be located in Baltimore, Maryland. The Corporation may,
in addition, establish and maintain such other offices and places of business as
the board of directors may, from time to time, determine.

Section 1.3. Seal. The corporate seal of the Corporation shall consist of two
(2) concentric circles, between which shall be the name of the Corporation, and
in the center shall be inscribed the year of its incorporation, and the words
"Corporate Seal". The form of the seal shall be subject to alteration by the
board of directors and the seal may be used by causing it or a facsimile to be
impressed or affixed or printed or otherwise reproduced. Any officer or director
of the Corporation shall have authority to affix the corporate seal of the
Corporation to any document requiring the same.

ARTICLE II -- STOCKHOLDERS

Section 2.1. Annual Meetings. There shall be no stockholders' meetings for the
election of directors and the transaction of other proper business except as
required by the Investment Company Act of 1940, the listing requirements of the
stock exchange or market where the Corporation's stock is listed, or as
hereinafter provided, in which case the annual meeting shall be held in December
of each year.

Section 2.2. Special Meetings. Special meetings of stockholders may be called at
any time by the board of directors, the chairman of the board, or the president
or a co-president and shall be held at such time and place as may be stated in
the notice of the meeting. The secretary shall call a special meeting of the
stockholders on the written request of stockholders entitled to cast at least a
majority of all the votes entitled to be cast at the meeting. Such request shall
state the purpose of such meeting and the matters proposed to be acted on
thereat, and no other business shall be transacted at any such special meeting.
The secretary shall inform such stockholders of the reasonably estimated costs
of preparing and mailing the notice of the meeting, and upon payment to the
Corporation of such costs, the secretary shall give not less than ten nor more
than 90 days' notice of the time, place and purpose of the meeting in the manner
provided in Section 2.3 of this Article II.

Section 2.3. Notice of Meetings. The secretary shall cause notice of the place,
date and hour and, in the case of a special meeting or as otherwise required by
law, the purpose or purposes for which the

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meeting is called, to be served personally or to be mailed, postage prepaid, not
less than 10 nor more than 90 days before the date of the meeting, to each
stockholder entitled to vote at such meeting at his address as it appears on the
records of the Corporation at the time of such mailing. Notice shall be deemed
to be given when deposited in the United States mail addressed to the
stockholders as aforesaid.

Notice of any stockholders meeting need not be given to any stockholder who
shall sign a written waiver of such notice whether before or after the time of
such meeting, which waiver shall be filed with the records of such meeting, or
to any stockholder who is present at such meeting in person or by proxy. Notice
of adjournment of a stockholders meeting to another time or place need not be
given if such time and place are announced at the meeting.

Irregularities in the notice of any meeting to, or the nonreceipt of any such
notice by, any of the stockholders shall not invalidate any action otherwise
properly taken by or at any such meeting.

Section 2.4. Quorum and Adjournment of Meetings. In the absence of a quorum, the
stockholders present in person or by proxy or, if no stockholder entitled to
vote is present in person or by proxy, any officer present entitled to preside
or act as secretary of such meeting may adjourn the meeting without determining
the date of the new meeting or from time to time without further notice to a
date not more than 120 days after the original record date. Any business that
might have been transacted at the meeting originally called may be transacted at
any such adjourned meeting at which a quorum is present.

Section 2.5. Voting and Inspectors. Unless statute or the Articles of
Incorporation, as amended and/or restated from time to time (the "Charter")
provide otherwise, at every stockholders meeting, each stock holder shall be
entitled to one vote for each share and a fractional vote for each fraction of a
share of stock of the Corporation validly issued and outstanding and standing in
his name on the books of the Corporation on the record date fixed in accordance
with Section 7.4 hereof, either in person or by proxy appointed by instrument in
writing subscribed by such stockholder or his duly authorized attorney, except
that no shares held by the Corporation shall be entitled to a vote.

If no record date has been fixed, the record date for the determination of
stockholders entitled to notice of or to vote at a meeting of stockholders shall
be the later of the close of business on the day on which notice of the meeting
is mailed or the 30th day before the meeting, or, if notice is waived by all
stockholders, at the close of business on the 11th day preceding the day on
which the meeting is held.

Except as otherwise specifically provided in the Charter or these By-laws or as
required by applicable law, all matters shall be decided by a vote of the
majority of the votes validly cast at a meeting at which a quorum is present.
The vote upon any question shall be by ballot whenever requested by any person
entitled to vote, but, unless such a request is made, voting may be conducted in
any way approved by the meeting.

At any meeting at which there is an election of directors, the chairman of the
meeting may appoint two inspectors of election who shall first subscribe an oath
or affirmation to execute faithfully the duties of inspectors at such election
with strict impartiality and according to the best of their ability, and shall,
after

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the election, make a certificate of the result of the vote taken. No candidate
for the office of director shall be appointed as an inspector.

The determination of such inspectors as to all matters relating to the form or
validity of proxies, ballots, and voting directions thereon, and all other
matters upon which their certificate would be based shall be deemed final and
conclusive, and such inspectors' determinations shall not be subject to
challenge or review prior to the issuance of their certificate, unless such
challenge or review is approved by the vote of a majority of the Board of
Directors.

The certificate of the result of the vote taken shall be deemed final and
conclusive, and such inspectors' decisions shall not be judicially reviewable,
unless such judicial review is approved by the vote of a majority of the Board
of Directors.

Section 2.6. Validity of Proxies. The right to vote by proxy shall exist only if
the instrument authorizing such proxy to act shall have been signed by the
stockholder or by his duly authorized attorney. Unless a proxy provides
otherwise, it shall not be valid more than 11 months after its date. All proxies
shall be delivered to the secretary of the Corporation or to the person acting
as secretary of the meeting before being voted, who shall decide all questions
concerning qualification of voters, the validity of proxies, and the acceptance
or rejection of votes. If inspectors of election have been appointed by the
chairman of the meeting, such inspectors shall decide all such questions. A
proxy with respect to stock held in the name of two or more persons shall be
valid if executed by one of them unless at or prior to exercise of such proxy
the Corporation receives from any one of them a specific written notice to the
contrary and a copy of the instrument or order which so provides. A proxy
purporting to be executed by or on behalf of a stockholder shall be deemed valid
unless challenged at or prior to its exercise.

Section 2.7. Stock Ledger and List of Stockholders. It shall be the duty of the
secretary or assistant secretary of the Corporation to cause an original or
duplicate stock ledger containing the names and addresses of all the
stockholders and the number of shares held by them, respectively, to be
maintained at the office of the Corporation's transfer agent. Such stock ledger
may be in written form or any other form capable of being converted into written
form within a reasonable time for visual inspection.

Section 2.8. Action Without Meeting. Any action required or permitted to be
taken by stockholders at a meeting of stockholders may be taken without a
meeting if (a) all stockholders entitled to vote on the matter consent to the
action in writing, (b) all stockholders entitled to notice of the meeting but
not entitled to vote at it sign a written waiver of any right to dissent, and
(c) the consents and waivers are filed with the records of the meetings of
stockholders. Such consent shall be treated for all purposes as a vote at the
meeting.

Section 2.9. Election of Directors. Subject to the Charter, the election of any
director by stockholders requires the affirmative vote of at least eighty
percent (80%) of the outstanding shares of all classes of voting stock, voting
together, in person or by proxy at a meeting at which a quorum is present
("Meeting"), unless such action is approved by the vote of a majority of the
Board of Directors, in which case such action requires the affirmative vote of a
plurality of the votes cast at the Meeting.

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Section 2.10. Nomination of Directors. Only persons who are nominated in
accordance with the following procedures shall be eligible for election as
directors of the Corporation, except as may be otherwise provided in the Charter
of the Corporation with respect to the right, if any, of holders of preferred
stock of the Corporation to nominate and elect a specified number of directors
in certain circumstances. Nominations of persons for election to the Board of
Directors may be made at any annual meeting of stockholders, or at any special
meeting of stockholders called for the purpose of electing directors, (a) by or
at the direction of the Board of Directors (or any duly authorized committee
thereof) or (b) by any stockholder of the Corporation (i) who is a stockholder
of record on the date of the giving of the notice provided for in this Section
2.10 and on the record date for the determination of stockholders entitled to
vote at such meeting and (ii) who complies with the notice procedures set forth
in this Section 2.10 .

In addition to any other applicable requirements, for a nomination to be made by
a stockholder, such stockholder must have given timely notice thereof in proper
written form to the Secretary of the Corporation.

To be timely, a stockholder's notice to the Secretary must be delivered to or
mailed and received at the principal executive offices of the Corporation (a) in
the case of an annual meeting, not less than sixty (60) calendar days nor more
than ninety (90) calendar days prior to the anniversary date of the immediately
preceding annual meeting of stockholders; provided, however, that in the event
that the annual meeting is called for a date that is not within thirty (30)
calendar days before or sixty (60) calendar days after such anniversary date,
notice by the stockholder in order to be timely must be so received not later
than the close of business on the later of the sixtieth (60th) calendar day
prior to such annual meeting or the tenth (10th) calendar day following the day
on which notice of the date of the annual meeting was mailed or public
disclosure of the date of the annual meeting was made, whichever first occurs;
and (b) in the case of a special meeting of stockholders called for the purpose
of electing directors, not later than the close of business on the tenth (10th)
calendar day following the day on which notice of the date of the special
meeting was mailed or public disclosure of the date of the special meeting was
made, whichever first occurs. For purposes of this Section 2.10, the date of a
public disclosure shall include, but not be limited to, the date on which such
disclosure is made in a press release reported by the Dow Jones News Services,
the Associated Press or any comparable national news service or in a document
publicly filed by the Corporation with the Securities and Exchange Commission
pursuant to Sections 13, 14 or 15(d) (or the rules and regulations thereunder)
of the Securities Exchange Act of 1934, as amended, or pursuant to Section 30
(or the rules and regulations thereunder) of the Investment Company Act of 1940,
as amended.

To be in proper written form, a stockholder's notice to the Secretary must set
forth (a) as to each person whom the stockholder proposes to nominate for
election as a director (i) the name, age, business address and residence address
of the person, (ii) the principal occupation or employment of the person, (iii)
the class or series and number of shares of capital stock of the Corporation
which are owned beneficially or of record by the person and (iv) any other
information relating to the person that would be required to be disclosed in a
proxy statement or other filings required to be made in connection with
solicitations of proxies for election of directors pursuant to Section 14 of the
Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder; and (b) as to the stockholder giving the notice (i) the
name and record address of such stockholder, (ii) the class or series and number
of shares

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of capital stock of the Corporation which are owned beneficially or of record by
such stockholder, (iii) a description of all arrangements or understandings
between such stockholder and each proposed nominee and any other person or
persons (including their names) pursuant to which the nomination(s) are to be
made by such stockholder, (iv) a representation that such stockholder intends to
appear in person or by proxy at the meeting to nominate the persons named in its
notice and (v) any other information relating to such stockholder that would be
required to be disclosed in a proxy statement or other filings required to be
made in connection with solicitations of proxies for election of directors
pursuant to Section 14 of the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder. Such notice must be
accompanied by a written consent of each proposed nominee to being named as a
nominee and to serve as a director if elected. No person shall be eligible for
election as a director of the Corporation unless nominated in accordance with
the procedures set forth in this Section 2.10. If the Chairman of the meeting
determines that a nomination was not made in accordance with the foregoing
procedures, the Chairman shall declare to the meeting that the nomination was
defective and such defective nomination shall be disregarded.

Section 2.11. Business at Annual Meeting. No business may be transacted at an
annual meeting of stockholders, other than business that is either (a) specified
in the notice of meeting (or any supplement thereto) given by or at the
direction of the Board of Directors (or any duly authorized committee thereof),
(b) otherwise properly brought before the annual meeting by or at the direction
of the Board of Directors (or any duly authorized committee thereof) or (c)
otherwise properly brought before the annual meeting by any stockholder of the
Corporation (i) who is a stockholder of record on the date of the giving of the
notice provided for in this Section 2.11 and on the record date for the
determination of stockholders entitled to vote at such annual meeting and (ii)
who complies with the notice procedures set forth in this Section 2.11.

In addition to any other applicable requirements, for business to be properly
brought before an annual meeting by a stockholder, such stockholder must have
given timely notice thereof in proper written form to the Secretary of the
Corporation.

To be timely, a stockholder's notice to the Secretary must be delivered to or
mailed and received at the principal executive offices of the Corporation not
less than sixty (60) calendar days nor more than ninety (90) calendar days prior
to the anniversary date of the immediately preceding annual meeting of
stockholders; provided, however, that in the event that the annual meeting is
called for a date that is not within thirty (30) calendar days before or sixty
(60) calendar days after such anniversary date, notice by the stockholder in
order to be timely must be so received not later than the close of business on
the later of the sixtieth (60th) calendar day prior to such annual meeting or
the tenth (10th) calendar day following the day on which notice of the date of
the annual meeting was mailed or public disclosure of the date of the annual
meeting was made, whichever first occurs. For purposes of this Section 2.11, the
date of a public disclosure shall include, but not be limited to, the date on
which such disclosure is made in a press release reported by the Dow Jones News
Services, the Associated Press or any comparable national news service or in a
document publicly filed by the Corporation with the Securities and Exchange
Commission pursuant to Sections 13, 14 or 15(d) (or the rules and regulations
thereunder) of the Securities Exchange Act of 1934, as amended, or pursuant to
Section 30 (or the rules and regulations thereunder) of the Investment Company
Act of 1940, as amended.

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Bull & Bear U.S. Government Securities Fund, Inc.
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To be in proper written form, a stockholder's notice to the Secretary must set
forth as to each matter such stockholder proposes to bring before the annual
meeting (i) a brief description of the business desired to be brought before the
annual meeting and the reasons for conducting such business at the annual
meeting, (ii)the name and record address of such stockholder, (iii) the class or
series and number of shares of capital stock of the Corporation which are owned
beneficially or of record by such stockholder, (iv) a description of all
arrangements or understandings between such stockholder and any other person or
persons (including their names) in connection with the proposal of such business
by such stockholder and any material interest of such stockholder in such
business and (v) a representation that such stockholder intends to appear in
person or by proxy at the annual meeting to bring such business before the
meeting.

No business shall be conducted at the annual meeting of stockholders except
business brought before the annual meeting in accordance with the procedures set
forth in this Section 2.11, provided, however, that, once business has been
properly brought before the annual meeting in accordance with such procedures,
nothing in this Section 2.11 shall be deemed to preclude discussion by any
stockholder of any such business. If the Chairman of an annual meeting
determines that business was not properly brought before the annual meeting in
accordance with the foregoing procedures, the Chairman shall declare to the
meeting that the business was not properly brought before the meeting and such
business shall not be transacted.

ARTICLE III -- BOARD OF DIRECTORS

Section 3.1. General Powers. Except as otherwise provided by operation of law,
by the Charter, or by these By-laws, the business and affairs of the Corporation
shall be managed under the direction of and all the powers of the Corporation
shall be exercised by or under authority of its board of directors.

Section 3.2. Power to Issue and Sell Stock. The board of directors may from time
to time issue and sell or cause to be issued and sold any of the Corporation's
authorized shares to such persons and for such consideration as the board of
directors shall deem advisable, subject to the provisions of the Charter.

Section 3.3. Power to Authorize Dividends. The board of directors, from time to
time as they may deem advisable, may authorize and pay dividends in stock, cash
or other property of the Corporation, out of any source available for dividends,
to the stockholders according to their respective rights and interests in
accordance with the provisions of the Charter. The board of directors may
prescribe from time to time that dividends may be payable at the election of any
of the stockholders (exercisable before or after the declaration of the
dividend), either in cash or in shares of the Corporation, provided that the sum
of the cash dividend actually paid to any stockholder and the asset value of the
shares received (determined as of such time as the board of directors shall have
prescribed, pursuant to the Charter, with respect to shares sold on the date of
such election) shall not exceed the full amount of cash to which the stockholder
would be entitled if he elected to receive only cash.

Section 3.4. Number and Term of Directors. Except for the initial board of
directors, the board of directors shall consist of not fewer than three nor more
than fifteen directors, as specified by a resolution of a majority of the entire
board of directors. Each director shall hold office until his successor is
elected

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and qualified or until his earlier death, resignation or removal. Any vacancy
created by an increase in directors may be filled in accordance with Section 3.6
of this Article III.

All acts done at any meeting of the directors or by any person acting as a
director, so long as his successor shall not have been duly elected or
appointed, shall, notwithstanding that it be afterwards discovered that there
was some defect in the election of the directors or of such person acting as a
director or that they or any of them were disqualified, be as valid as if the
directors or such other person, as the case may be, had been duly elected and
were or was qualified to be directors or a director of the Corporation.

Directors need not be stockholders of the Corporation.

Section 3.5. Election. The initial director or directors shall be that person or
persons named as such in the Charter. At each annual meeting, the stockholders
shall elect directors to hold office.

Section 3.6. Vacancies and Newly Created Directorships. Any vacancies in the
board of directors, whether arising from death, resignation, removal, an
increase in the number of directors or otherwise, shall be filled by a vote of
the board of directors in accordance with the Charter.

Section 3.7. [Reserved.]

Section 3.8. Regular Meetings. The meeting of the board of directors for
choosing officers and transacting other proper business, and all other meetings,
shall be held at such time and place, within or outside the state of Maryland,
as the board may determine and as provided by resolution. Notice of such
meetings need not be given, following the annual meeting of stockholders,
provided that notice of any change in the time or place of such meetings shall
be sent promptly to each director not present at the meeting at which such
change was made, in the manner provided for notice of special meetings. Members
of the board of directors or any committee designated thereby may participate in
a meeting of such board or committee by means of a conference telephone or
similar communications equipment that allows all persons participating in the
meeting to hear each other at the same time; and participation by such means
shall constitute presence in person at a meeting.

Section 3.9. Special Meetings. Special meetings of the board of directors shall
be held whenever called by the chairman of the board or the president or a
co-president (or, in the absence or disability of the chairman of the board or
the president or a co-president, by any officer or director, as they so
designate) at the time and place (within or outside of the State of Maryland)
specified in the respective notice or waivers of notice of such meetings. At
least three days before the day on which a special meeting is to be held, notice
of special meetings, stating the time and place, shall be (a) mailed to each
director at his residence or regular place of business or (b) delivered to him
personally or transmitted to him by telegraph, telefax, telex, cable or
wireless.

Section 3.10. Waiver of Notice. No notice of any meeting need be given to any
director who is present at the meeting or who waives notice of such meeting in
writing (which waiver shall be filed with the records of such meeting), either
before or after the time of the meeting.

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Section 3.11. Quorum and Voting. At all meetings of the board of directors, the
presence of a majority of the number of directors then in office shall
constitute a quorum for the transaction of business, provided that there shall
be present at least two directors. In the absence of a quorum, a majority of the
directors present may adjourn the meeting, from time to time, until a quorum
shall be present. The action of a majority of the directors present at a meeting
at which a quorum is present shall be the action of the board of directors,
unless concurrence of a greater proportion is required for such action by law,
by the Charter or by these By-laws.

Section 3.12. Action Without a Meeting. As amended, any action required or
permitted to be taken at any meeting of the board of directors or of any
committee thereof may be taken without a meeting if a written consent to such
action is signed by all members of the board or of such committee, as the case
may be, and such written consent is filed with the minutes of proceedings of the
board or committee.

Section 3.13. Compensation of Directors. Directors may receive such compensation
for their services as may from time to time be determined by resolution of the
board of directors.

ARTICLE IV -- COMMITTEES

Section 4.1. Organization. By resolution adopted by the board of directors, the
board may designate one or more committees of the board of directors, including
an Executive Committee, each consisting of at least one director. Each member of
a committee shall be a director and shall hold committee membership at the
pleasure of the board. The chairman of the board, if any, shall be a member of
the Executive Committee. The board of directors shall have the power at any time
to change the members of such committees and to fill vacancies in the
committees.

Section 4.2. Powers of the Executive Committee. Unless otherwise provided by
resolution of the board of directors, when the board of directors is not in
session the Executive Committee shall have and may exercise all powers of the
board of directors in the direction of the management of the business and
affairs of the Corporation that may lawfully be exercised by an Executive
Committee except the power to declare a dividend on stock, authorize the
issuance of stock (except as permitted by the Maryland General Corporation Law),
recommend to stockholders any action requiring stockholders approval, amend
these By-laws, approve any merger or share exchange which does not require
stockholder approval or approve or terminate any contract with an "investment
adviser" or "principal underwriter," as those terms are defined in the
Investment Company Act of 1940, as amended (the "1940 Act"). Notwithstanding the
above, such Executive Committee may make such dividend calculations and payments
as are consistent with applicable law, including the Maryland General
Corporation Law.

Section 4.3. Powers of Other Committees of the Board of Directors. To the extent
provided by resolution of the board, other committees of the board of directors
shall have and may exercise any of the powers that may lawfully be granted to
the Executive Committee.

Section 4.4. Proceedings and Quorum. In the absence of an appropriate resolution
of the board of directors, each committee may adopt such rules and regulations
governing its proceedings, quorum and

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manner of acting as it shall deem proper and desirable, provided that a quorum
shall not be less than two directors. In the event any member of any committee
is absent from any meeting, the members thereof present at the meeting, whether
or not they constitute a quorum, may appoint a member of the board of directors
to act in the place of such absent member.

ARTICLE V -- OFFICERS

Section 5.1. Officers. The officers of the Corporation shall be a president or
co-presidents, a secretary, and a treasurer, and may include one or more vice
presidents (including executive and senior vice presidents), assistant
secretaries or assistant treasurers, and such other officers as may be appointed
in accordance with the provisions of Section 5.11 hereof. The board of directors
may, but shall not be required to, elect a chairman and vice chairman of the
board.

Section 5.2. Election, Tenure and Qualifications. The officers of the
Corporation (except those appointed pursuant to Section 5.11 hereof) shall be
elected by the board of directors at its first meeting or such subsequent
meetings as shall be held prior to its first annual meeting, and thereafter at
regular board meetings, as required by applicable law. If any officers are not
elected at any annual meeting, such officers may be elected at any subsequent
meetings of the board. Except as otherwise provided in this Article V, each
officer elected by the board of directors shall hold office until his or her
successor shall have been elected and qualified. Any person may hold one or more
offices of the Corporation except that no one person may serve concurrently as
both the president or a co-president and vice president. A person who holds more
than one office in the Corporation may not act in more than one capacity to
execute, acknowledge, or verify an instrument required by law to be executed,.
acknowledged, or verified by more than one officer. The chairman of the board
shall be chosen from among the directors of the Corporation and may hold such
office only so long as he continues to be a director. No other officer need be a
director.

Section 5.3. Vacancies and Newly Created Offices. If any vacancy shall occur in
any office by reason of death, resignation, removal, disqualification or other
cause, or if any new office shall be created, such vacancies or newly created
offices may be filled by the chairman of the board at any meeting or, in the
case of any office created pursuant to Section 5.11 hereof, by any officer upon
whom such power shall have been conferred by the board of directors.

Section 5.4. Removal and Resignation. At any meeting called for such purpose,
the Executive Committee may remove any officer from office (either with or
without cause) by the affirmative vote, given at the meeting, of a majority of
the members of the Committee. Any officer may resign from office at any time by
delivering a written resignation to the board of directors, the president or a
co-president, the secretary, or any assistant secretary. Unless otherwise
specified therein, such resignation shall take effect upon delivery.

Section 5.5. Chairman of the Board. The chairman of the board, if there be such
an officer, shall be the senior officer of the Corporation, shall preside at all
stockholders meetings and at all meetings of the board of directors and shall be
ex officio a member of all committees of the board of directors. He shall

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have such other powers and perform such other duties as may be assigned to him
from time to time by the board of directors.

Section 5.6. Vice Chairman of the Board. The board of directors may from time to
time elect a vice chairman who shall have such powers and perform such duties as
from time to time may be assigned to him by the board of directors, chairman of
the board or the president or a co-president. At the request of, or in the
absence or in the event of the disability of the chairman of the board, the vice
chairman may perform all the duties of the chairman of the board or the
president or a copresident and, when so acting, shall have all the powers of and
be subject to all the restrictions upon such respective officers.

Section 5.7. President, Co-President. The president or co-presidents shall be
the chief executive officer or co-chief executive officers, as the case may be,
of the Corporation and, in the absence of the chairman of the board or vice
chairman or if no chairman of the board or vice chairman has been chosen, shall
preside at all stockholders meetings and at all meetings of the board of
directors and shall in general exercise the powers and perform the duties of the
chairman of the board. Subject to the supervision of the board of directors, the
president or the co-presidents shall have general charge of the business,
affairs and property of the Corporation and general supervision over its
officers, employees and agents. Except as the board of directors may otherwise
order, the president or a co-president may sign in the name and on behalf of the
Corporation all deeds, bonds, contracts, or agreements. The president or a
co-president shall exercise such other powers and perform such other duties as
from time to time may be assigned by the board of directors.

Section 5.8. Vice President. The board of directors may from time to time elect
one or more vice presidents (including executive and senior vice presidents) who
shall have such powers and perform such duties as from time to time may be
assigned to them by the board of directors or the president or co-presidents. At
the request of, or in the absence or in the event of the disability of, the
president or both co-presidents, the vice president (or, if there are two or
more vice presidents, then the senior of the vice presidents present and able to
act) may perform all the duties of the president or co-presidents and, when so
acting, shall have all the powers of and be subject to all the restrictions upon
the president or co-presidents.

Section 5.9. Treasurer and Assistant Treasurers. The treasurer shall be the
chief accounting officer of the Corporation and shall have general charge of the
finances and books of account of the Corporation. The treasurer shall render to
the board of directors, whenever directed by the board, an account of the
financial condition of the Corporation and of all transactions as treasurer; and
as soon as possible after the close of each financial year he shall make and
submit to the board of directors a like report for such financial year. The
treasurer shall cause to be prepared annually a full and complete statement of
the affairs of the Corporation, including a balance sheet and a financial
statement of operations for the preceding fiscal year, which shall be submitted
at the annual meeting of stockholders and filed within 20 days thereafter at the
principal office of the Corporation in the state of Maryland. The treasurer
shall perform all acts incidental to the office of treasurer, subject to the
control of the board of directors.

Any assistant treasurer may perform such duties of the treasurer as the
treasurer or the board of directors may assign, and, in the absence of the
treasurer, may perform all the duties of the treasurer.

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Section 5.10. Secretary and Assistant Secretaries. The secretary shall attend to
the giving and serving of all notices of the Corporation and shall record all
proceedings of the meetings of the stockholders and directors in books to be
kept for that purpose. The secretary shall keep in safe custody the seal of the
Corporation, and shall have responsibility for the records of the Corporation,
including the stock books and such other books and papers as the board of
directors may direct and such books, reports, certificates and other documents
required by law to be kept, all of which shall at all reasonable times be open
to inspection by any director. The secretary shall perform such other duties
which appertain to this office or as may be required by the board of directors.

Any assistant secretary may perform such duties of the secretary as the
secretary or the board of directors may assign, and, in the absence of the
secretary, may perform all the duties of the secretary.

Section 5.11. Subordinate Officers. The chairman of the board from time to time
may appoint such other officers or agents as he may deem advisable, each of whom
shall have such title, hold office for such period, have such authority and
perform such duties as the board of directors may determine. The chairman of the
board from time to time may delegate to one or more officers or agents the power
to appoint any such subordinate officers or agents and to prescribe their
respective rights, terms of office, authorities and duties. Any officer or agent
appointed in accordance with the provisions of this Section 5.11 may be removed,
either with or without cause, by any officer upon whom such power of removal
shall have been conferred by the board of directors.

Section 5.12. Remuneration. The salaries or other compensation of the officers
of the Corporation shall be fixed from time to time by resolution of the board
of directors, except that the board of directors may by resolution delegate to
any person or group of persons the power to fix the salaries or other
compensation of any subordinate officers or agents appointed in accordance with
the provisions of Section 5.11 hereof.

Section 5.13. Surety Bonds. The board of directors may require any officer or
agent of the Corporation to execute a bond (including, without limitation, any
bond required by applicable law, and the rules and regulations of the Securities
and Exchange Commission promulgated thereunder) to the Corporation in such sum
and with such surety or sureties as the board of directors may determine,
conditioned upon the faithful performance of his or her duties to the
Corporation, including responsibility for negligence and for the accounting of
any of the Corporation's property, funds or securities that may come into his
hands.

ARTICLE VI -- EXECUTION OF INSTRUMENTS, VOTING OF SECURITIES

Section 6.1. Checks, Notes, Drafts, Etc. So long as the Corporation shall employ
a custodian to keep custody of the cash and securities of the Corporation, all
checks and drafts for the payment of money by the Corporation may be signed in
the name of the Corporation by the custodian. Promissory notes, checks or drafts
payable to the Corporation may be endorsed only to the order of the custodian or
its nominee and only by any two of the following: the treasurer, the president
or a co-president, a vice president (including executive and senior vice
presidents) or by such other person or persons as shall be authorized by the
board of directors, provided that no one person may sign in the capacity of two
such officers. Except as

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otherwise authorized by the board of directors, all requisitions or orders for
the assignment of securities standing in the name of the custodian or its
nominee, or for the execution of powers to transfer the same, shall be signed in
the name of the Corporation by any two of the following: the president or a
co-president, vice president (including executive and senior vice presidents),
treasurer or an assistant treasurer, provided that no one person may sign in the
capacity of two such officers.

Section 6.2. Voting of Securities. Unless otherwise ordered by the board of
directors, the president or a co-president, or any vice president (including
executive and senior vice presidents) shall have full power and authority on
behalf of the Corporation to attend and to act and to vote, or in the name of
the Corporation to execute proxies to vote, at any meeting of stockholders of
any company in which the Corporation may hold stock. At any such meeting such
officer shall possess and may exercise (in person or by proxy) any and all
rights, powers and privileges incident to the ownership of such stock. The board
of directors may by resolution from time to time confer like powers upon any
other person or persons in accordance with the laws of the State of Maryland.

ARTICLE VII -- CAPITAL STOCK

Section 7.1. Certificates of Stock. The interest of each stockholder of the
Corporation may be, but shall not be required to be, evidenced by certificates
for shares of stock in such form not inconsistent with the Charter as the board
of directors may from time to time authorize. No certificate shall be valid
unless it is signed in the name of the Corporation by a president or a
co-president or a vice president and countersigned by the secretary or an
assistant secretary or the treasurer or an assistant treasurer of the
Corporation and sealed with the seal of the Corporation, or bears the facsimile
signatures of such officers and a facsimile of such seal. In case any officer
who shall have signed any such certificate, or whose facsimile signature has
been placed thereon, shall cease to be such an officer (because of death,
resignation or otherwise) before such certificate is issued, such certificate
may be issued and delivered by the Corporation with the same effect as if he
were such officer at the date of issue.

The number of each certificate issued, the name and address of the person owning
the shares represented thereby, the number of such shares and the date of
issuance shall be entered upon the stock ledger of the Corporation at the time
of issuance.

Every certificate exchanged, surrendered for redemption or otherwise returned to
the Corporation shall be marked "canceled" with the date of cancellation.

Section 7.2. Transfer of Shares. Shares of the Corporation shall be transferable
on the books of the Corporation by the holder of record thereof (in person or by
his duly authorized attorney or legal representative) (a) if a certificate or
certificates have been issued, upon surrender duly endorsed or accompanied by
proper instruments of assignment and transfer, with such proof of the
authenticity of the signature as the Corporation or its agents may reasonably
require, or (b) as otherwise prescribed by the board of directors. Except as
otherwise provided in the Charter, the shares of stock of the Corporation may be
freely transferred, subject to the charging of customary transfer fees, and the
board of directors may, from time to time, adopt rules and regulations with
reference to the method of transfer of the shares

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of stock of the Corporation. The Corporation shall be entitled to treat the
holder of record of any share of stock as the absolute owner thereof for all
purposes, and accordingly shall not be bound to recognize any legal, equitable
or other claim or interest in such share on the part of any other person,
whether or not it shall have express or other notice thereof, except as
otherwise expressly provided by law or the statutes of the State of Maryland.

Section 7.3. Transfer Agents and Registrars. The board of directors may from
time to time appoint or remove transfer agents or registrars of transfers for
shares of stock of the Corporation, and it may appoint the same person as both
transfer agent and registrar. Upon any such appointment being made all
certificates representing shares of capital stock thereafter issued shall be
countersigned by one of such transfer agents or by one of such registrars of
transfers or by both and shall not be valid unless so countersigned. If the same
person shall be both transfer agent and registrar, only one countersignature by
such person shall be required.

Section 7.4. Fixing of Record Date. The board of directors may fix in advance a
date as a record date for the determination of the stockholders entitled to
notice of or to vote at any stockholders meeting or any adjournment thereof, or
to express consent to corporate action in writing without a meeting, or to
receive payment of any dividend or other distribution or allotment of any
rights, or to exercise any rights in respect of any change, conversion or
exchange of stock, or for the purpose of any other lawful action, provided that
(a) such record date shall be within 90 days prior to the date on which the
particular action requiring such determination will be taken, except that a
meeting of stockholders convened on the date for which it was called may be
adjourned from time to time without further notice to a date not more than 120
days after the original record date; (b) the transfer books shall not be closed
for a period longer than 20 days; and (c) in the case of a meeting of
stockholders, the record date shall be at least 10 days before the date of the
meeting.

Section 7.5. Lost, Stolen or Destroyed Certificates. Before issuing a new
certificate for stock of the Corporation alleged to have been lost, stolen or
destroyed, the board of directors or any officer authorized by the board may, in
its discretion, require the owner of the lost, stolen or destroyed certificate
(or his legal representative) to give the Corporation a bond or other indemnity,
in such form and in such amount as the board or any such officer may direct and
with such surety or sureties as may be satisfactory to the board or any such
officer, sufficient to indemnify the Corporation against any claim that may be
made against it on account of the alleged loss, theft or destruction of any such
certificate or the issuance of such new certificate.

ARTICLE VIII -- CONFLICT OF INTEREST TRANSACTIONS

Section 8.1. Validity of Contract or Transactions. In the event that any officer
or director of the Corporation shall have any interest, direct or indirect, in
any other firm, association or corporation as officer, employee, director or
stockholder, no transaction or contract made by the Corporation with any such
other firm, association or corporation shall be valid unless such interest shall
have been disclosed or made known to all of the directors or to a majority of
the directors and such transaction or contract shall

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Bull & Bear U.S. Government Securities Fund, Inc.
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have been approved by a majority of a quorum of directors, which majority shall
consist of directors not having any such interest or a majority of the directors
in office, including directors having such an interest.

ARTICLE IX -- FISCAL YEAR AND ACCOUNTANT

Section 9.1. Fiscal Year. The fiscal year of the Corporation shall, unless
otherwise ordered by the board of directors, be twelve calendar months ending on
the 30th day of June.

ARTICLE X -- INDEMNIFICATION AND INSURANCE

Section 10.1. Indemnification of Officers, Directors, Employees and Agents. In
accordance with applicable law, including the Maryland General Corporation Law,
the Corporation shall indemnify each person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
("Proceeding"), by reason of the fact that he or she is or was a director,
officer, employee, or agent of the Corporation, or is or was serving at the
request of the Corporation as a director, officer, employee, partner, trustee or
agent of another corporation, partnership, joint venture, trust, or other
enterprise, against all reasonable expenses (including attorneys' fees) actually
incurred, and judgments, fines, penalties and amounts paid in settlement in
connection with such Proceeding to the maximum extent permitted by law, now
existing or hereafter adopted. Notwithstanding the foregoing, the following
provisions shall apply with respect to indemnification of the Corporation's
directors, officers, and investment manager (as defined in the 1940 Act):

(a) Whether or not there is an adjudication of
liability in such Proceeding, the
Corporation shall not indemnify any such
person for any liability arising by reason
of such person's willful misfeasance, bad
faith, gross negligence, or reckless
disregard of the duties involved in the
conduct of his or her office or under any
contract or agreement with the Corporation
("disabling conduct").

(b) The Corporation shall not indemnify any such person
unless:

(1) the court or other body before which the
Proceeding was brought (a) dismisses the
Proceeding for insufficiency of evidence of
any disabling conduct, or (b) reaches a
final decision on the merits that such
person was not liable by reason of disabling
conduct; or

(2) absent such a decision, a reasonable
determination is made, based upon a review
of the facts, by (a) the vote of a majority
of a quorum of the directors of the
Corporation who are neither interested
persons of the Corporation as defined in the
1940 Act, nor parties to the Proceeding, or
(b) if such quorum is not obtainable, or
even if obtainable, if a majority of a
quorum of directors described

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Bull & Bear U.S. Government Securities Fund, Inc.
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above so directs, based upon a written
opinion by independent legal counsel, that
such person was not liable by reason of
disabling conduct.

(c) Reasonable expenses (including attorneys'
fees) incurred in defending a Proceeding
involving any such person will be paid by
the Corporation in advance of the final
disposition thereof upon an undertaking by
such person to repay such expenses unless it
is ultimately determined that he or she is
entitled to indemnification, if:

(1) such person shall provide adequate
security for his or her undertaking;

(2) the Corporation shall be insured
against losses arising by reason
of such advance; or

(3) a majority of a quorum of the
directors of the Corporation who
are neither interested persons
of the Corporation as defined in
the 1940 Act, nor parties to the
Proceeding, or independent legal
counsel in a written opinion,
shall determine, based on a
review of readily available
facts, that there is reason to
believe that such person will be
found to be entitled to
indemnification.

Section 10.2. Insurance of Officers, Directors, Employees and Agents. The
Corporation may purchase and maintain insurance or other sources of
reimbursement to the extent permitted by law on behalf of any person who is or
was a director, officer, employee or agent of the Corporation, or is or was
serving at the request of the Corporation as a director, officer, employee,
partner, trustee or agent of another corporation, partnership, joint venture,
trust or other enterprise against any liability asserted against him or her and
incurred by him or her in or arising out of his position.

Section 10.3. Non-exclusivity. The indemnification and advancement of expenses
provided by, or granted pursuant to, this Article X shall not be deemed
exclusive of any other rights to which those seeking indemnification or
advancement of expenses may be entitled under the Charter, these By-laws,
agreement, vote of stockholders or directors, or otherwise, both as to action in
his or her official capacity and as to action in another capacity while holding
such office.

Section 10.4. Amendment. Notwithstanding anything to the contrary herein, no
amendment, alteration or repeal of this Article or the adoption, alteration or
amendment of any other provisions to the Charter or these By-laws inconsistent
with this Article shall adversely affect any right or protection of any person
under this Article with respect to any act or failure to act which occurred
prior to such amendment, alteration, repeal or adoption.

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Bull & Bear U.S. Government Securities Fund, Inc.
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ARTICLE XI -- AMENDMENTS

Section 11.1. General. Except as provided in Section 11.2 of this Article XI,
all By-laws of the Corporation, whether adopted by the board of directors or the
stockholders, shall be subject to amendment, alteration or repeal, and new
By-laws may be made only by the affirmative vote of a majority of directors, at
any meeting the notice or waiver of notice of which shall have specified or
summarized the proposed amendment, alteration, repeal or new By-law. No
amendment of any Section of these By-laws shall be made by the stockholders of
the Corporation except as set forth in Section 11.2 of this Article XI.

Section 11.2. By Stockholders Only. No amendment of any section of these By-laws
shall be made except by the stockholders of the Corporation if the By-laws
provide that such section may not be amended, altered or repealed except by the
stockholders. From and after the issuance of any shares of the capital stock of
the Corporation no amendment, alteration or repeal of this Article XI shall be
made except by the stockholders of the Corporation.