<PAGE> PAGE 1
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008 B00AA01 A
008 C00AA01 801-32361
008 D01AA01 NEW YORK
008 D02AA01 NY
008 D03AA01 10105
011 A00AA01 ALLIANCE FUND DISTRIBUTORS, INC.
011 B00AA01 8-30851
011 C01AA01 NEW YORK
011 C02AA01 NY
011 C03AA01 10105
012 A00AA01 ALLIANCE FUND SERVICES, INC.
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<PAGE> PAGE 2
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013 A00AA01 MCGLADREY AND PULLEN LLP
013 B01AA01 NEW YORK
013 B02AA01 NY
013 B03AA01 10017
014 A00AA01 DONALDSON, LUFKIN & JENRETTE SECURITIES CORP.
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<PAGE> PAGE 3
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<PAGE> PAGE 4
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<PAGE> PAGE 5
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<PAGE> PAGE 6
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<PAGE> PAGE 7
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<PAGE> PAGE 8
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<PAGE> PAGE 9
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<PAGE> PAGE 10
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<PAGE> PAGE 11
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<PAGE> PAGE 12
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<PAGE> PAGE 13
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<PAGE> PAGE 14
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SIGNATURE JOSEPH REZABEK
TITLE ASST. VICE PRESIDENT
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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<NAME> ALLIANCE CAPITAL RESERVES
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<NAME> ALLIANCE CAPITAL RESERVES
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[AVG-DEBT-OUTSTANDING] 0
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</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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<CIK> 0000275017
<NAME> ALLIANCE CAPITAL RESERVES
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<NUMBER> 02
<NAME> ALLIANCE MONEY RESERVES
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</TABLE>
REPORT OF CERTIFIED PUBLIC ACCOUNTANTS
To the Shareholders and
Board of Trustees of
Alliance Capital Reserves
In planning and performing our audit of the financial statements of Alliance
Capital Reserves, a series investment company consisting of Alliance Capital
Reserves Portfolio and Alliance Money Reserves Portfolio for the year ended
June 30, 1999, we considered its internal control, including control activi-
ties for safeguarding securities, in order to determine our auditing proce-
dures for the purpose of expressing our opinion on the financial statements
and to comply with the requirements of Form N-SAR, not to provide assurance on
internal control.
The management of Alliance Capital Reserves is responsible for establishing
and maintaining internal control. In fulfilling this responsibility, estimates
and judgments by management are required to assess the expected benefits and
related costs of controls. Generally, controls that are relevant to an audit
pertain to the entity's objective of preparing financial statements for exter-
nal purposes that are fairly presented in conformity with generally accepted
accounting principles. Those controls include the safeguarding of assets
against unauthorized acquisition, use, or disposition.
Because of inherent limitations in internal control, error or fraud may occur
and not be detected. Also, projection of any evaluation of internal control
to future periods is subject to the risk that it may become inadequate because
of changes in conditions or that the effectiveness of the design and operation
may deteriorate.
Our consideration of internal control would not necessarily disclose all mat-
ters in internal control that might be material weaknesses under standards es-
tablished by the American Institute of Certified Public Accountants. A mate-
rial weakness is a condition in which the design or operation of one or more
of the internal control components does not reduce to a relatively low level
the risk that misstatements caused by error or fraud in amounts that would be
material in relation to the financial statements being audited may occur and
not be detected within a timely period by employees in the normal course of
performing their assigned functions. However, we noted no matters involving
internal control and its operation, including controls for safeguarding secu-
rities, that we consider to be material weaknesses as defined above as of June
30, 1999.
This report is intended solely for the information and use of management, the
Board of Trustees of Alliance Capital Reserves and the Securities and Exchange
Commission.
McGladrey & Pullen, LLP
New York, New York
July 23, 1999
August 11, 1999
U.S. Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Attention: Mr. Paul F. Roye
Director, Division of Investment Management
Obligations of General American
Life Insurance Company
Ladies and Gentlemen:
With reference to Rule 2a-7(c)(6)(iii) under the Investment Company Act
of 1940, as amended (the "1940 Act"), this letter is to confirm the
information provided to the staff of the Division of Investment Management by
telephone last night concerning debt obligations (the "Obligations") issued
by General American Life Insurance Company ("General American") which are
held in the investment portfolios of "money market funds" of which Alliance
Capital Management L.P. ("Alliance") is the investment adviser (each a
"Fund"). The name of each Fund, the approximate principal amount of the
Obligations held by the Fund and the approximate percentage of each Fund's net
assets represented by the Obligations are as follows:
Approximate Principal Approximate Percentage
Amount of Obligations Held of Fund's Net Assets
Name of Fund (in Millions) Represented by the
Obligations
Alliance Capital Reserves $405 3.7%
Alliance Capital Money 60 3.9%
Reserves
Alliance Institutional 85 3.3%
Reserves, Inc. - Prime Portfolio
Alliance Institutional 20 2.7%
Reserves, Inc. - Trust Portfolio
As we informed the staff, each Fund has an unconditional right upon
demand to receive payment of the outstanding principal of the Obligations it
holds plus accrued interest thereon, which demand may be made at any time upon
not more than seven days' notice. Each Fund submitted a proper demand on
August 2, 1999 for the entire amount of the principal and accrued interest on
the Obligations it held. Payment of the amount demanded should have been
received on August 9, 1999. No portion of that amount was paid to any Fund on
that date nor has any portion thereof since been received by any Fund.
A meeting of the Board of Directors or Trustees of each Fund was held
yesterday. At the meeting, the Directors or Trustees of each Fund approved a
methodology for valuation of the Obligations under current conditions on a
fair value basis, which resulted in a valuation of at the close of business
yesterday of 98 cents on the dollar. The Directors or Trustees of each Fund
also determined, with reference to Rule 2a-7(c)(6)(iii) of the 1940 Act, that
disposal of the Obligations held by the Fund would not be in the Fund's best
interests.
As we also discussed with the staff, developments pertinent to the
Obligations are being monitored closely for each of the Funds by Alliance, and
contingency planning is well underway. The Obligations are currently being
treated as illiquid.
Please contact me (at (212) 969-2108) or Emilie Wrapp of Alliance (at
(212) 969-2154) should you require additional information concerning this
matter.
Very truly yours,
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