MUNICIPAL SECURITIES TRUST SERIES 1, 485BPOS, 1994-04-22

MUNICIPAL SECURITIES TRUST SERIES 1
485BPOS, 1994-04-22

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As filed with the Securities and Exchange Commission on April 22, 1994

Registration No. 2-62605 *

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

POST-EFFECTIVE AMENDMENT
To
FORM S-6

FOR REGISTRATION UNDER THE SECURITIES ACT
OF 1933 OF SECURITIES OF UNIT INVESTMENT
TRUSTS REGISTERED ON FORM N-8B-2

A. Exact name of trust:

MUNICIPAL SECURITIES TRUST, SERIES 1, SERIES 2, SERIES 3, SERIES 4
and SERIES 5

B. Name of depositor: BEAR, STEARNS & CO. INC.

C. Complete address of depositor's principal executive office:

245 Park Avenue
New York, NY 10167

D. Name and complete address of agent for service:

PETER J. DeMARCO Copy of comments to:
Managing Director MICHAEL R. ROSELLA, ESQ.
Bear, Stearns & Co. Inc. Battle Fowler
245 Park Avenue 280 Park Avenue
New York, NY 10167 New York, NY 10017
(212) 856-6858

It is proposed that this filing become effective (check appropriate box)

/ / immediately upon filing pursuant to paragraph (b) of Rule 485
/ x / on April 29, 1994 pursuant to paragraph (b)

/ / 60 days after filing pursuant to paragraph (a)
/ / on ( date ) pursuant to paragraph (a) of Rule 485

* The Prospectus included in this Registration Statement constitutes a
combined Prospectus as permitted by the provisions of Rule 429 of
the General Rules and Regulations under the Securities Act of 1933
(the "Act"). Said Prospectus covers units of undivided interest in
Municipal Securities Trust, Series 1, Series 2, Series 3, Series 4
and Series 5 covered by prospectuses heretofore filed as part of
separate registration statements on Form S-6 (Registration
Nos. 2-62605, 2-63595, 2-65899, 2-68167 and 2-68389, respectively)
under the Act. This filing constitutes Post-Effective Amendment
No. 15 for Series 1 and Series 2 and Post-Effective Amendment No. 14
for Series 3, Series 4 and Series 5.

<PAGE>

MUNICIPAL SECURITIES TRUST
SERIES 1, SERIES 2,
SERIES 3, SERIES 4,
SERIES 5

CROSS-REFERENCE SHEET

Pursuant to Rule 404 of Regulation C
under the Securities Act of 1933

(Form N-8B-2 Items required by Instruction as
to the Prospectus in Form S-6)

Form N-8B-2 Form S-6
Item Number Heading in Prospectus

I. Organization and General Information

1. (a) Name of trust................... Front Cover of Prospectus
(b) Title of securities issued...... "
2. Name and address of each depositor.. The Sponsor
3. Name and address of trustee..... The Trustee
4. Name and address of principal
underwriters...................... The Sponsor
5. State of organization of trust..... Organization
6. Execution and termination of
trust agreement................... Trust Agreement, Amendment and
Termination
7. Changes of name..................... Not Applicable
8. Fiscal year......................... "
9. Litigation.......................... None

II. General Description of the Trust and Securities of the Trust

10. (a) Registered or bearer
securities...................... Certificates

(b) Cumulative or distributive Interest and Principal
securities...................... Distributions
(c) Redemption...................... Trustee Redemption
(d) Conversion, transfer, etc....... Certificates, Sponsor
Repurchase,
Trustee Redemption, Exchange
Privilege and Conversion Offer
(e) Periodic payment plan........... Not Applicable
(f) Voting rights................... Trust Agreement, Amendment and
Termination
(g) Notice to certificateholders.... Records, Portfolio, Trust
Agreement,
Amendment and Termination, The
Sponsor, The Trustee
(h) Consents required............... Trust Agreement, Amendment and
Termination
(i) Other provisions................ Tax Status
11. Type of securities
comprising units.................. Objectives, Portfolio,
Description
of Portfolio
12. Certain information regarding
periodic payment certificates..... Not Applicable
13. (a) Load, fees, expenses, etc....... Summary of Essential
Information,
Offering Price, Volume and Other
Discounts, Sponsor's and
Underwriters' Profits, Total
Reinvestment Plan, Trust
Expenses
and Charges
(b) Certain information regarding
periodic payment certificates Not Applicable
(c) Certain percentages............. Summary of Essential
Information,
Offering Price, Total
Reinvestment
Plan
(d) Price differences............... Volume and Other Discounts
(e) Other loads, fees, expenses..... Certificates
(f) Certain profits receivable
by depositors, principal
underwriters, trustee or
affiliated persons........ Sponsor's and Underwriters'
Profits
(g) Ratio of annual charges
to income................ Not Applicable
14. Issuance of trust's securities...... Organization, Certificates
15. Receipt and handling of payments
from purchasers................... Organization
16. Acquisition and disposition of
underlying securities............. Organization, Objectives,
Portfolio,
Portfolio Supervision
17. Withdrawal or redemption............ Comparison of Public Offering
Price,
Sponsor's Repurchase Price and
Redemption Price, Sponsor
Repurchase, Trustee Redemption
18. (a) Receipt, custody and
disposition of income......... Distribution Elections, Interest
and
Principal Distributions,
Records,
Total Reinvestment Plan
(b) Reinvestment of distributions... Total Reinvestment Plan
(c) Reserves or special funds....... Interest and Principal
Distributions
(d) Schedule of distributions....... Not Applicable
19. Records, accounts and reports....... Records, Total Reinvestment Plan
20. Certain miscellaneous provisions
of trust agreement................ Trust Agreement, Amendment and
Termination
(a) Amendment....................... "
(b) Termination..................... "
(c) and (d) Trustee, removal and
successor................... The Trustee
(e) and (f) Depositor, removal
and successor................ The Sponsor
21. Loans to security holders........... Not Applicable
22. Limitations on liability............ The Sponsor, The Trustee,
The Evaluator
23. Bonding arrangements................ Part II--Item A
24. Other material provisions
of trust agreement................ Not Applicable

III. Organization, Personnel and Affiliated Persons of Depositor

25. Organization of depositor........... The Sponsor
26. Fees received by depositor.......... Not Applicable
27. Business of depositor............... The Sponsor
28. Certain information as to
officials and affiliated
persons of depositor.............. Part II--Item C
29. Voting securities of depositor...... Not Applicable
30. Persons controlling depositor....... "
31. Payments by depositor for certain
services rendered to trust........ "
32. Payment by depositor for certain
other services rendered to trust.. "
33. Remuneration of employees of
depositor for certain services
rendered to trust................... "
34. Remuneration of other persons for
certain services rendered to trust.. "

IV. Distribution and Redemption of Securities

35. Distribution of trust's
securities by states.............. Distribution of Units
36. Suspension of sales of
trust's securities................ Not Applicable
37. Revocation of authority
to distribute..................... "
38. (a) Method of distribution.......... Distribution of Units, Total
Reinvestment Plan
(b) Underwriting agreements......... "
(c) Selling agreements.............. "
39. (a) Organization of principal
underwriters................ The Sponsor
(b) N.A.S.D. membership of
principal underwriters........ "
40. Certain fees received by
principal underwriters............ Not Applicable
41. (a) Business of principal
underwriters.................. The Sponsor
(b) Branch offices of principal
underwriters.................. Not Applicable
(c) Salesmen of principal
underwriters.................. "
42. Ownership of trust's
securities by certain persons..... "
43. Certain brokerage commissions
received by principal
underwriters...................... "
44. (a) Method of valuation............. Summary of Essential
Information,
Offering Price, Accrued
Interest,
Volume and Other Discounts,
Total Reinvestment Plan,
Distribution of Units
(b) Schedule as to offering price... Not Applicable
(c) Variation in offering price
to certain persons............ Distribution of Units, Total
Reinvestment Plan, Volume and
Other Discounts
45. Suspension of redemption rights..... Trustee Redemption

46. (a) Redemption valuation............ Comparison of Public Offering
Price,
Sponsor's Repurchase Price and
Redemption Price, Trustee
Redemption
(b) Schedule as to
redemption price.............. Not Applicable
47. Maintenance of position in
underlying securities............. Comparison of Public Offering
Price,
Sponsor's Repurchase Price and
Redemption Price, Sponsor
Repurchase, Trustee Redemption

V. Information Concerning the Trustee or Custodian

48. Organization and regulation
of trustee........................ The Trustee
49. Fees and expenses of trustee........ Trust Expenses and Charges
50. Trustee's lien...................... "

VI. Information Concerning Insurance of Holders of Securities

51. Insurance of holders of
trust's securities................ Not Applicable

VII. Policy of Registrant

52. (a) Provisions of trust agreement
with respect to selection or
elimination of underlying
securities.................... Objectives, Portfolio, Portfolio
Supervision
(b) Transactions involving
elimination of underlying
securities.................... Not Applicable
(c) Policy regarding substitution
or elimination of underlying
securities.................... Objectives, Portfolio, Portfolio
Supervision, Substitution of
Bonds
(d) Fundamental policy not
otherwise covered............. Not Applicable
53. Tax status of trust................. Tax Status

VIII. Financial and Statistical Information

54. Trust's securities during
last ten years.................... Not Applicable
55. Hypothetical account for issuers
of periodic payment plans......... "
56. Certain information regarding
periodic payment certificates..... "
57. Certain information regarding
periodic payment plans............ "
58. Certain other information
regarding periodic payment plans.. "
59. Financial Statements
(Instruction 1(c) to Form S-6)...... Statement of Financial Condition
<PAGE>

Note: Part A of This Prospectus May Not Be
Distributed Unless Accompanied by Part B.

MUNICIPAL SECURITIES TRUST

SERIES 1

_______________________________________________________________________

The Trust is a unit investment trust designated Series 1 ("Municipal
Trust") with an underlying portfolio of long-term tax-exempt bonds issued
by or on behalf of states, municipalities and public authorities, and was
formed to preserve capital and to provide interest income (including,
where applicable, earned original issue discount) which, in the opinions
of bond counsel to the respective issuers, is, with certain exceptions,
currently exempt from regular Federal income tax (including where
applicable earned original discount) under existing law but may be subject
to state and local taxes. Such interest income may, however, be a
specific preference item for purposes of Federal individual and/or
corporate alternative minimum tax. Investors may recognize taxable
capital gain upon maturity or earlier redemption of the underlying bonds.
(See "Tax Status" and "The Trust--Portfolio" in Part B of this
Prospectus.) The Sponsor is Bear, Stearns & Co. Inc. The value of the
Units of the Trust will fluctuate with the value of the underlying bonds.
Minimum purchase: 1 Unit.

_______________________________________________________________________

This Prospectus consists of two parts. Part A contains the Summary
of Essential Information as of December 31, 1993 (the "Evaluation Date"),
a summary of certain specific information regarding the Trust and audited
financial statements of the Trust, including the related portfolio, as of
the Evaluation Date. Part B of this Prospectus contains a general summary
of the Trust.

Investors should retain both parts of this
Prospectus for future reference.

_________________________________________________________________________

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

Prospectus Part A Dated April 29, 1994

<PAGE>

THE TRUST. The Trust is a unit investment trust formed to preserve
capital and to provide interest income (including, where applicable,
earned original issue discount) which, in the opinions of bond counsel to
the respective issuers, is, with certain exceptions, currently exempt from
regular federal income tax under existing law through investment in a
fixed, diversified portfolio of long-term bonds (the "Bonds") issued by or
on behalf of states, municipalities and public authorities. A Trust
designated as a short/intermediate-term trust must have a dollar-weighted
average portfolio maturity of more than two years but less than five
years; a Trust designated as an intermediate-term trust must have a
dollar-weighted average portfolio maturity of more than three years but
not more than ten years; a Trust designated as an intermediate/long-term
trust must have a dollar-weighted average portfolio maturity of more than
ten years but less than fifteen years; and a Trust designated as a long-
term trust must have a dollar-weighted average portfolio maturity of more
than ten years. Although the Supreme Court has determined that Congress
has the authority to subject interest on bonds such as the Bonds in the
Trust to regular federal income taxation, existing law excludes such
interest from regular federal income tax. Such interest income may,
however, be subject to the federal corporate alternative minimum tax and
to state and local taxes. (See "Description of Portfolio" in this Part A
for a description of those Bonds which pay interest income subject to the
federal individual alternative minimum tax. See also "Tax Status" in
Part B of this Prospectus.) Some of the Bonds in the portfolio may be
"Zero Coupon Bonds", which are original issue discount bonds that provide
for payment at maturity at par value, but do not provide for the payment
of any current interest. Some of the Bonds in the portfolio may have been
purchased at an aggregate premium over par. Some of the Bonds in the
Trust have been issued with optional refunding or refinancing provisions
("Refunded Bonds") whereby the issuer of the Bond has the right to call
such Bond prior to its stated maturity date (and other than pursuant to
sinking fund provisions) and to issue new bonds ("Refunding Bonds") in
order to finance the redemption. Issuers typically utilize refunding
calls in order to take advantage of lower interest rates in the
marketplace. Some of these Refunded Bonds may be called for redemption
pursuant to pre-refunding provisions ("Pre-Refunded Bonds") whereby the
proceeds from the issue of the Refunding Bonds are typically invested in
government securities in escrow for the benefit of the holders of the Pre-
Refunded Bonds until the refunding call date. Usually, Pre-Refunded Bonds
will bear a triple-A rating because of this escrow. The issuers of Pre-
Refunded Bonds must call such Bonds on their refunding call date.
Therefore, as of such date, the Trust will receive the call price for such
bonds but will cease receiving interest income with respect to them. For
a list of those Bonds which are Pre-Refunded Bonds, if any, as of the
Evaluation Date, see "Notes to Financial Statements" in this Part A. All
of the Bonds in the Trust were rated "A" or better by Standard & Poor's
Corporation or Moody's Investors Service, Inc. at the time originally
deposited in the Trust. For a discussion of the significance of such
ratings see "Description of Bond Ratings" in Part B of this Prospectus and
for a list of ratings on the Evaluation Date see the "Portfolio". The
payment of interest and preservation of capital are, of course, dependent
upon the continuing ability of the issuers of the Bonds to meet their
obligations. There can be no assurance that the Trust's objectives will
be achieved. Investment in the Trust should be made with an understanding
of the risks which an investment in long-term fixed rate obligations may
entail, including the risk that the value of the underlying portfolio will
decline with increases in interest rates, and that the value of Zero
Coupon Bonds is subject to greater fluctuations than coupon bonds in
response to changes in interest rates. Each Unit in the Trust represents
a 1/6163rd undivided interest in the principal and net income of the
Trust. The principal amount of Bonds deposited in the Trust per Unit is
reflected in the Summary of Essential Information. (See "The Trust--
Organization" in Part B of this Prospectus.) The Units being offered
hereby are issued and outstanding Units which have been purchased by the
Sponsor in the secondary market.

PUBLIC OFFERING PRICE. The secondary market Public Offering Price
of each Unit is equal to the aggregate bid price of the Bonds in the Trust
divided by the number of Units outstanding, plus a sales charge of 4.5% of
the Public Offering Price, which is the same as 4.712% of the net amount
invested in Bonds per Unit. In addition, accrued interest to expected
date of settlement is added to the Public Offering Price. If Units had
been purchased on the Evaluation Date, the Public Offering Price per Unit
would have been $754.22 plus accrued interest of $13.32 under the monthly
distribution plan and $16.52 under the semi-annual distribution plan, for
a total of $767.54 and $770.74, respectively. The Public Offering Price
per Unit can vary on a daily basis in accordance with fluctuations in the
aggregate bid price of the Bonds. (See the "Summary of Essential
Information" and "Public Offering--Offering Price" in Part B of this
Prospectus.)

ESTIMATED LONG TERM RETURN AND ESTIMATED CURRENT RETURN. The rate
of return on an investment in Units of the Trust is measured in terms of
"Estimated Current Return" and "Estimated Long Term Return".

Estimated Long Term Return is calculated by: (1) computing the
yield to maturity or to an earlier call date (whichever results in a lower
yield) for each Bond in the Trust's portfolio in accordance with accepted
bond practices, which practices take into account not only the interest
payable on the Bond but also the amortization of premiums or accretion of
discounts, if any; (2) calculating the average of the yields for the Bonds
in the Trust's portfolio by weighing each Bond's yield by the market value
of the Bond and by the amount of time remaining to the date to which the
Bond is priced (thus creating an average yield for the portfolio of the
Trust); and (3) reducing the average yield for the portfolio of the Trust
in order to reflect estimated fees and expenses of the Trust and the
maximum sales charge paid by investors. The resulting Estimated Long Term
Return represents a measure of the return to investors earned over the
estimated life of the Trust. (For the Estimated Long Term Return to
Certificateholders under the monthly and semi-annual distribution plans,
see "Summary of Essential Information".)

Estimated Current Return is a measure of the Trust's cash flow.
Estimated Current Return is computed by dividing the Estimated Net Annual
Interest Income per Unit by the Public Offering Price per Unit. In
contrast to the Estimated Long Term Return, the Estimated Current Return
does not take into account the amortization of premium or accretion of
discount, if any, on the Bonds in the portfolio of the Trust. Moreover,
because interest rates on Bonds purchased at a premium are generally
higher than current interest rates on newly issued bonds of a similar type
with comparable rating, the Estimated Current Return per Unit may be
affected adversely if such Bonds are redeemed prior to their maturity.

The Estimated Net Annual Interest Income per Unit of the Trust will
vary with changes in the fees and expenses of the Trustee and the
Evaluator applicable to the Trust and with the redemption, maturity, sale
or other disposition of the Bonds in the Trust. The Public Offering Price
will vary with changes in the bid prices of the Bonds. Therefore, there
is no assurance that the present Estimated Current Return or Estimated
Long Term Return will be realized in the future. (For the Estimated
Current Return to Certificateholders under the monthly and semi-annual
distribution plans, see "Summary of Essential Information". See
"Estimated Long Term Return and Estimated Current Return" in Part B of
this Prospectus.)

A schedule of cash flow projections is available from the Sponsor
upon request.

DISTRIBUTIONS. Distributions of interest income, less expenses,
will be made by the Trust either monthly or semi-annually depending upon
the plan of distribution applicable to the Unit purchased. A purchaser of
a Unit in the secondary market will initially receive distributions in
accordance with the plan selected by the prior owner of such Unit and may
thereafter change the plan as provided in "Interest and Principal
Distributions" in Part B of this Prospectus. Distributions of principal,
if any, will be made semi-annually on June 15 and December 15 of each
year. (See "Rights of Certificateholders--Interest and Principal
Distributions" in Part B of this Prospectus. For estimated monthly and
semi-annual interest distributions, see "Summary of Essential
Information".)

MARKET FOR UNITS. The Sponsor, although not obligated to do so,
presently maintains and intends to continue to maintain a market for the
Units at prices based upon the aggregate bid price of the Bonds in the
portfolio of the Trust. The Secondary Market repurchase price is based on
the aggregate bid price of the Bonds in the Trust portfolio, and the
reoffer price is based on the aggregate bid price of the Bonds plus a
sales charge of 4.5% of the Public Offering Price (4.712% of the net
amount invested) plus net accrued interest. If such a market is not
maintained, a Certificateholder will be able to redeem his Units with the
Trustee at a price also based upon the aggregate bid price of the Bonds.
(See "Sponsor Repurchase" and "Public Offering--Offering Price" in Part B
of this Prospectus.)

TOTAL REINVESTMENT PLAN. Certificateholders under the semi-annual
plan of distribution have the opportunity to have their interest
distributions and principal distributions, if any, reinvested in available
series of "Insured Municipal Securities Trust" or "Municipal Securities
Trust." (See "Total Reinvestment Plan" and for residents of Texas, see
"Total Reinvestment Plan for Texas Residents" in Part B of this
Prospectus.) The Plan is not designed to be a complete investment
program.

<PAGE>

MUNICIPAL SECURITIES TRUST
SERIES 1

SUMMARY OF ESSENTIAL INFORMATION AS OF DECEMBER 31, 1993

Date of Deposit: February 6, 1979 Minimum Principal Distribution:
Principal Amount of Bonds ...$4,290,000 $1.00 per Unit.
Number of Units .............6,163 Weighted Average Life to
Fractional Undivided Inter- Maturity:
est in Trust per Unit .....1/6163 14.6 Years.
Principal Amount of Minimum Value of Trust:
Bonds per Unit ............$696.09 Trust may be terminated if
Secondary Market Public value of Trust is less than
Offering Price** $3,200,000 in principal amount
Aggregate Bid Price of Bonds.
of Bonds in Trust .......$4,439,076+++ Mandatory Termination Date:
Divided by 6,163 Units ....$720.28 The earlier of December 31,
Plus Sales Charge of 4.5% 2028 or the disposition of the
of Public Offering Price $33.94 last Bond in the Trust.
Public Offering Price Trustee***: The Bank of New
per Unit ................$754.22+ York.
Redemption and Sponsor's Trustee's Annual Fee: Monthly
Repurchase Price plan $1.08 per $1,000 and semi-
per Unit ..................$720.28+ annual plan $.60 per $1,000.
+++ Evaluator: Kenny S&P Evaluation
++++ Services.
Excess of Secondary Market Evaluator's Fee for Each
Public Offering Price Evaluation: Minimum of $35
over Redemption and plus $.25 per each issue of
Sponsor's Repurchase Bonds in excess of 50 issues
Price per Unit ............$33.94++++ (treating separate maturities
Difference between Public as separate issues).
Offering Price per Unit Sponsor: Bear, Stearns & Co.
and Principal Amount per Inc.
Unit Premium/(Discount) ...$58.13
Evaluation Time: 4:00 p.m.
New York Time.

PER UNIT INFORMATION BASED UPON INTEREST DISTRIBUTION PLAN ELECTED

Monthly Semi-Annual
Option Option

Gross annual interest income# .........$49.22 $49.22
Less estimated annual fees and
expenses ............................ 1.97 1.47
Estimated net annual interest ______ ______
income (cash)# ......................$47.25 $47.25
Estimated interest distribution# ...... 3.93 23.87
Estimated daily interest accrual# ..... .1312 .1326
Estimated current return#++ ........... 6.26% 6.33%
Estimated long term return++ .......... 5.50% 5.57%
Record dates .......................... 1st of Dec. 1 and
each month June 1
Interest distribution dates ........... 15th of Dec. 15 and
each month June 15

<PAGE>
* The Date of Deposit is the date on which the Trust Agreement was
signed and the deposit of the Bonds with the Trustee made.

** For information regarding offering price per unit and applicable
sales charge under the Total Reinvestment Plan, see "Total
Reinvestment Plan" in Part B of this Prospectus.

*** The Trustee maintains its corporate trust office at 101 Barclay
Street, New York, New York 10286 (tel. no.: 1-800-431-8002). For
information regarding redemption by the Trustee, see "Trustee
Redemption" in Part B of this Prospectus.

+ Plus accrued interest to expected date of settlement (approximately
five business days after purchase) of $13.32 monthly and $16.52
semi-annually.

++ The estimated current return and estimated long term return are
increased for transactions entitled to a discount (see "Employee
Discounts" in Part B of this Prospectus), and are higher under the
semi-annual option due to lower Trustee's fees and expenses.

+++ Based solely upon the bid side evaluation of the underlying Bonds
(including, where applicable, undistributed cash in the principal
account). Upon tender for redemption, the price to be paid will be
calculated as described under "Trustee Redemption" in Part B of this
Prospectus.

++++ See "Comparison of Public Offering Price, Sponsor's Repurchase Price
and Redemption Price" in Part B of this Prospectus.

# Does not include income accrual from original issue discount bonds,
if any.

<PAGE>

INFORMATION REGARDING THE TRUST
AS OF DECEMBER 31, 1993

DESCRIPTION OF PORTFOLIO*

The portfolio of the Trust consists of 12 issues representing
obligations of issuers located in 9 states. The Sponsor has participated
as a sole underwriter or manager, co-manager or member of an underwriting
syndicate from which 15% of the initial aggregate principal amount of the
Bonds were acquired. Approximately 43.9% of the Bonds are obligations of
state and local housing authorities; approximately 25.2% are hospital
revenue bonds; none are issued in connection with the financing of nuclear
generating facilities; and none are "mortgage subsidy" bonds. All of the
Bonds in the Trust are subject to redemption prior to their stated
maturity dates pursuant to sinking fund or optional call provisions. The
Bonds may also be subject to other calls, which may be permitted or
required by events which cannot be predicted (such as destruction,
condemnation, termination of a contract, or receipt of excess or
unanticipated revenues). One issue representing $375,000 of the principal
amount of the Bonds is a general obligation bond. All 11 of the remaining
issues representing $3,915,000 of the principal amount of the Bonds are
payable from the income of a specific project or authority and are not
supported by the issuer's power to levy taxes. The portfolio is divided
for purpose of issue as follows: Highway 1, Hospitals 4, Housing 5, and
Water and Sewers 1. For an explanation of the significance of these
factors see "The Trust--Portfolio" in Part B of this Prospectus.

* Changes in the Trust Portfolio: From January 1, 1994 to March 24,
1994, the entire principal amount of the Bonds in portfolio no. 11
has been called and is no longer contained in the Trust.

<PAGE>

As of December 31, 1993, none of the Bonds were original issue
discount bonds. Approximately 23.2% of the aggregate principal amount of
the Bonds in the Trust were purchased at a "market" discount from par
value at maturity, approximately 54.5% were purchased at a premium and
approximately 22.3% were purchased at par. For an explanation of the
significance of these factors see "Discount and Zero Coupon Bonds" in
Part B of this Prospectus.

None of the Bonds in the Trust are subject to the federal individual
alternative minimum tax under the Tax Reform Act of 1986. See "Tax
Status" in Part B of this Prospectus.

<PAGE>
FINANCIAL AND STATISTICAL INFORMATION

Selected data for each Unit outstanding for the periods listed below:

Distribu-
tions of
Distributions of Interest Principal
During the Period (per Unit) During
Net Asset * Semi- the
Units Out- Value Monthly Annual Annual Period
Period Ended standing Per Unit Option Option Option (Per Unit)

December 31, 1991 6,422 $896.45 $61.19 $61.82 -0-
December 31, 1992 6,184 909.18 60.93 61.50 -0-
December 31, 1993 6,163 734.93 55.45 56.04 $192.18

* Net Asset Value per Unit is calculated by dividing net assets as
disclosed in the "Statement of Net Assets" by the number of Units
outstanding as of the date of the Statement of Net Assets. See
Note 5 of Notes to Financial Statements for a description of the
components of Net Assets.

<PAGE>

Independent Auditors' Report

The Sponsor, Trustee and Certificateholders
Municipal Securities Trust, Series 1:

We have audited the accompanying statement of net assets, including the
portfolio, of Municipal Securities Trust, Series 1 as of December 31, 1993,
and the related statements of operations, and changes in net assets for
each of the years in the three year period then ended. These financial
statements are the responsibility of the Trustee (see note 2). Our
responsibility is to express an opinion on these financial statements
based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned
as of December 31, 1993, by correspondence with the Trustee. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable
basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Municipal Securities
Trust, Series 1 as of December 31, 1993, and the results of its operations
and the changes in its net assets for each of the years in the three year
period then ended in conformity with generally accepted accounting
principles.

KPMG Peat Marwick

New York, New York
March 31, 1994
<PAGE>

Statement of Net Assets

December 31, 1993

Investments in marketable securities,
at market value (cost $4,208,674) $ 4,439,071

Excess of other assets over total liabilities 90,326
----------

Net assets (6,163 units of fractional undivided
interest outstanding, $734.93 per unit) $ 4,529,397
==========

See accompanying notes to financial statements.

<PAGE>

<TABLE>
Statements of Operations
<CAPTION>
Years ended December 31,
---------- --------- ----------
1993 1992 1991
---------- --------- ----------
<S> <C> <C> <C>
Investment income - interest $ 348,472 398,869 406,520
---------- --------- ----------

Expenses:
Trustee's fees 8,223 8,519 8,905
Evaluator's fees 3,300 3,308 3,012
---------- --------- ----------

Total expenses 11,523 11,827 11,917
---------- --------- ----------

Investment income, net 336,949 387,042 394,603
---------- --------- ----------

Realized and unrealized gain
(loss) on investments:
Net realized gain (loss) on
bonds sold or called 30,022 (3,927) (591)
Unrealized appreciation
for the year 87,976 85,326 327,497
---------- --------- ----------

Net gain on investments 117,998 81,399 326,906
---------- --------- ----------

Net increase in net
assets resulting
from operations $ 454,947 468,441 721,509
========== ========= ==========

See accompanying notes to financial statements.
</TABLE>

<PAGE>

<TABLE>

Statements of Changes in Net Assets
<CAPTION>
Years ended December 31,
----------- --- ----------- --- -----------
1993 1992 1991
----------- ----------- -----------
<S> <C> <C> <C>
Operations:
Investment income, net $ 336,949 387,042 394,603
Net realized gain (loss) on
bonds sold or called 30,022 (3,927) (591)
Unrealized appreciation
for the year 87,976 85,326 327,497
----------- ----------- -----------

Net increase in net
assets resulting
from operations 454,947 468,441 721,509
----------- ----------- -----------

Distributions:
To Certificateholders:
Investment income 344,086 386,233 395,041
Principal 1,185,088 - -

Redemptions:
Interest 381 4,452 253
Principal 18,371 212,377 14,970
----------- ----------- -----------

Total distributions
and redemptions 1,547,926 603,062 410,264
----------- ----------- -----------

Total increase (decrease) (1,092,979) (134,621) 311,245

Net assets at beginning of year 5,622,376 5,756,997 5,445,752
----------- ----------- -----------

Net assets at end of year (including
undistributed net investment
income of $90,322, $97,840
and $101,483, respectively) $ 4,529,397 5,622,376 5,756,997
=========== =========== ===========

See accompanying notes to financial statements.
</TABLE>

<PAGE>

MUNICIPAL SECURITIES TRUST, SERIES 1

Notes to Financial Statements

December 31, 1993, 1992 and 1991

(1) Organization

Municipal Securities Trust, Series 1 (Trust) was organized on
February 6, 1979 by Bear, Stearns & Co. Inc. (Sponsor) under the laws
of the State of New York by a Trust Indenture and Agreement, and is
registered under the Investment Company Act of 1940.

(2) Summary of Significant Accounting Policies

The Bank of New York (Trustee) has custody of and responsibility for
the accounting records and financial statements of the Trust and is
responsible for establishing and maintaining a system of internal
control related thereto.

The Trustee is also responsible for all estimates of expenses and
accruals reflected in the Trust's financial statements. The
accompanying financial statements have been adjusted to record the
unrealized appreciation (depreciation) of investments and to record
interest income and expenses on the accrual basis.

Investments are carried at market value which is determined by either
Standard & Poor's Corporation or Moody's Investors Service, Inc.
(Evaluator) as discussed in Footnotes to Portfolio. The market value
of the investments is based upon the bid prices for the bonds at the
end of the year, except that the market value on the date of deposit
represents the cost to the Trust based on the offering prices for
investments at that date. The difference between cost (including
accumulated accretion of original issue discount on zero-coupon
bonds) and market value is reflected as unrealized appreciation
(depreciation) of investments. Securities transactions are recorded
on the trade date. Realized gains (losses) from securities
transactions are determined on the basis of average cost of the
securities sold or redeemed.

(3) Income Taxes

The Trust is not subject to Federal income taxes as provided for by
the Internal Revenue Code.

(4) Trust Administration

The fees and expenses of the Trust are incurred and paid on the basis
set forth under "Trust Expenses and Charges" in Part B of this
Prospectus.

The Trust Indenture and Agreement provides for interest distributions
as often as monthly (depending upon the distribution plan elected by
the Certificateholders).

The Trust Indenture and Agreement further requires that principal
received from the disposition of bonds, other than those bonds sold
in connection with the redemption of units, be distributed to
Certificateholders.

See "Financial and Statistical Information" in Part A of this
Prospectus for the amounts of per unit distributions during the years
ended December 31, 1993, 1992, and 1991.

The Trust Indenture and Agreement also requires the Trust to redeem
units tendered. 21, 238, and 18 units were redeemed during the years
ended December 31, 1993, 1992, and 1991, respectively.

(5) Net Assets

At December 31, 1993, the net assets of the Trust represented the
interest of Certificateholders as follows:

Original cost to Certificateholders $ 8,194,147
Less initial gross underwriting commission (368,720)

7,825,427

Accumulated cost of bonds sold or called (3,616,753)
Net unrealized appreciation 230,397
Undistributed net investment income 90,322
Undistributed proceeds from bonds sold or called 4

Total $ 4,529,397

The original cost to Certificateholders, less the initial gross
underwriting commission, represents the aggregate initial public offering
price net of the applicable sales charge on 8,000 units of fractional
undivided interest of the Trust as of the date of deposit.

<PAGE>

<TABLE>

MUNICIPAL SECURITIES TRUST, SERIES 1

Portfolio
December 31, 1993
<CAPTION>

Port- Aggregate Coupon Rate/ Redemption Feature
folio Principal Name of Issuer Ratings Date(s) of S.F.--Sinking Fund Market
No. Amount and Title of Bonds (1) Maturity(2) Ref.--Refunding (2) (6) Value(3)
--- --------- --------------------- ------ -------------- -------------------------- ---------
<S> <C> <C> <C> <C> <C> <C>
1 $ 300,000 Maricopa County, AAA 7.625% 1/01/00 @ 100 S.F. $ 361,746
Arizona Hospital 1/01/2008 None
Revenue Bonds,
Project of 1978
(Samaritan Health
Service)

2 505,000 Lomod Bunker Hill A+ 7.600 12/15/03 @100 S.F. 507,899
Housing Development 12/15/2010 6/15/94 @100 Ref.
Corporation
(California) Senior
Citizens Facilities
Revenue Bonds, Series
1978 (Section 8
Assisted Project)

3 315,000 Placer County Water A 3.750 Currently @ 100 S.F. 271,602
Agency (California) 7/01/2012 7/01/94 @ 102.25 Ref.
Middle Fork Project
Revenue Bonds, 1963
Series A

4 435,000 Tampa Housing NR 8.000 Currently @ 100 S.F. 440,555
Development 10/01/2008 10/01/94 @ 105 Ref.
Corporation, Inc.
First Lien Revenue
Bonds Series 1978
(Tampa Heights
Apartments Section 8
Assisted Elderly
Project)

5 100,000 Illinois Health AAA 7.250 8/01/99 @ 100 S.F. 112,069
Facilities Authority 8/01/2006 None
Revenue Refunding
Bonds, Series 1978
(Ravenswood Hospital
Medical Center
Project)

6 500,000 Lake Charles A 7.600 5/01/01 @100 S.F. 524,735
Non-Profit Housing 5/01/2010 5/01/95 @ 105 Ref.
Development
Corporation (A
Louisiana Non-Profit
Corporation) Section
8 Assisted First
Mortgage Revenue
Bonds, Series 1978

7 200,000 Lee County, AAA 7.375 10/01/98 @ 100 S.F. 224,052
Mississippi, Hospital 10/01/2009 None
System Revenue Bonds
(North Mississippi
Medical Center) 1979
B

8 375,000 City of Philadelphia, BB 7.500 No Sinking Fund 393,386
Pennsylvania, General 8/01/2005 8/01/94 @ 102.5 Ref.
Obligation Bonds,
1979 Series A

9 445,000 Virginia Housing AA 6.700 Currently @100 S.F. 453,989
Development 11/01/2021 2/1/94 @ 102 Ref.
Authority,
Multi-Family Mortgage
Bonds, 1978 Series B

10 235,000 Richmond Metropolitan A 5.600 Currently @ 100 S.F. 251,156
Authority (A 1/15/2013 None
Political Subdivision
of the Commonwealth
of Virginia)
Expressway Revenue
Bonds, Series of 1973

11 400,000 Wisconsin Housing A1* 7.400 11/01/00 @ 100 S.F. 404,504
Finance Authority, 11/01/2010 3/1/94 @ 100.5 Ref.
Housing Revenue
Bonds, 1978 Series B

12 480,000 City of Wauwatosa A* 7.250 10/01/98 @ 100 S.F. 493,378
(Milwaukee County, 10/01/2010 4/01/94 @ 102 Ref.
Wisconsin) Hospital
Facility Revenue
Bonds, Series 1977
(The Kurtis R.
Froedtert Memorial
Lutheran Hospital,
Inc. Project)

--------- ---------
$ 4,290,000 $ 4,439,071
========= =========

See accompanying footnotes to portfolio and notes to financial statements.
</TABLE>

<PAGE>
MUNICIPAL SECURITIES TRUST, SERIES 1

Footnotes to Portfolio

December 31, 1993

(1) All ratings are by Standard & Poor's Corporation, except for those
identified by an asterisk (*) which are by Moody's Investors Service,
Inc. A brief description of the ratings symbols and their meanings
is set forth under "Description of Bond Ratings" in Part B of this
Prospectus.

(2) See "The Trust - Portfolio" in Part B of this Prospectus for an
explanation of redemption features. See "Tax Status" in Part B of
this Prospectus for a statement of the Federal tax consequences to a
Certificateholder upon the sale, redemption or maturity of a bond.

(3) At December 31, 1993, the net unrealized appreciation of all the bonds
was comprised of the following:

Gross unrealized appreciation $ 267,964
Gross unrealized depreciation ( 37,567)

Net unrealized appreciation $ 230,397

(4) The annual interest income, based upon bonds held at December 31, 1993,
to the Trust is $303,368.

(5) Bonds sold or called after December 31, 1993 are noted in a footnote
"Changes in Trust Portfolio" under "Description of Portfolio" in Part
A of this Prospectus.

(6) The Bonds may also be subject to other calls, which may be permitted or
required by events which cannot be predicted (such as destruction,
condemnation, termination of a contract, or receipt of excess or
unanticipated revenues).
<PAGE>

Note: Part A of This Prospectus May Not Be
Distributed Unless Accompanied by Part B.

MUNICIPAL SECURITIES TRUST

SERIES 2

_______________________________________________________________________

The Trust is a unit investment trust designated Series 2 ("Municipal
Trust") with an underlying portfolio of long-term tax-exempt bonds issued
by or on behalf of states, municipalities and public authorities, and was
formed to preserve capital and to provide interest income (including,
where applicable, earned original issue discount) which, in the opinions
of bond counsel to the respective issuers, is, with certain exceptions,
currently exempt from regular Federal income tax (including where
applicable earned original discount) under existing law but may be subject
to state and local taxes. Such interest income may, however, be a
specific preference item for purposes of Federal individual and/or
corporate alternative minimum tax. Investors may recognize taxable
capital gain upon maturity or earlier redemption of the underlying bonds.
(See "Tax Status" and "The Trust--Portfolio" in Part B of this
Prospectus.) The Sponsor is Bear, Stearns & Co. Inc. The value of the
Units of the Trust will fluctuate with the value of the underlying bonds.
Minimum purchase: 1 Unit.

_________________________________________________________________________

Investors should retain both parts of this
Prospectus for future reference.

_________________________________________________________________________

Prospectus Part A Dated April 29, 1994

<PAGE>

THE TRUST. The Trust is a unit investment trust formed to preserve
capital and to provide interest income (including, where applicable,
earned original issue discount) which, in the opinions of bond counsel to
the respective issuers, is, with certain exceptions, currently exempt from
regular federal income tax under existing law through investment in a
fixed, diversified portfolio of long-term bonds (the "Bonds") issued by or
on behalf of states, municipalities and public authorities. A Trust
designated as a short/intermediate-term trust must have a dollar-weighted
average portfolio maturity of more than two years but less than five
years; a Trust designated as an intermediate-term trust must have a
dollar-weighted average portfolio maturity of more than three years but
not more than ten years; a Trust designated as an intermediate/long-term
trust must have a dollar-weighted average portfolio maturity of more than
ten years but less than fifteen years; and a Trust designated as a long-
term trust must have a dollar-weighted average portfolio maturity of more
than ten years. Although the Supreme Court has determined that Congress
has the authority to subject interest on bonds such as the Bonds in the
Trust to regular federal income taxation, existing law excludes such
interest from regular federal income tax. Such interest income may,
however, be subject to the federal corporate alternative minimum tax and
to state and local taxes. (See "Description of Portfolio" in this Part A
for a description of those Bonds which pay interest income subject to the
federal individual alternative minimum tax. See also "Tax Status" in
Part B of this Prospectus.) Some of the Bonds in the portfolio may be
"Zero Coupon Bonds", which are original issue discount bonds that provide
for payment at maturity at par value, but do not provide for the payment
of any current interest. Some of the Bonds in the portfolio may have been
purchased at an aggregate premium over par. Some of the Bonds in the
Trust have been issued with optional refunding or refinancing provisions
("Refunded Bonds") whereby the issuer of the Bond has the right to call
such Bond prior to its stated maturity date (and other than pursuant to
sinking fund provisions) and to issue new bonds ("Refunding Bonds") in
order to finance the redemption. Issuers typically utilize refunding
calls in order to take advantage of lower interest rates in the
marketplace. Some of these Refunded Bonds may be called for redemption
pursuant to pre-refunding provisions ("Pre-Refunded Bonds") whereby the
proceeds from the issue of the Refunding Bonds are typically invested in
government securities in escrow for the benefit of the holders of the Pre-
Refunded Bonds until the refunding call date. Usually, Pre-Refunded Bonds
will bear a triple-A rating because of this escrow. The issuers of Pre-
Refunded Bonds must call such Bonds on their refunding call date.
Therefore, as of such date, the Trust will receive the call price for such
bonds but will cease receiving interest income with respect to them. For
a list of those Bonds which are Pre-Refunded Bonds, if any, as of the
Evaluation Date, see "Notes to Financial Statements" in this Part A. All
of the Bonds in the Trust were rated "A" or better by Standard & Poor's
Corporation or Moody's Investors Service, Inc. at the time originally
deposited in the Trust. For a discussion of the significance of such
ratings see "Description of Bond Ratings" in Part B of this Prospectus and
for a list of ratings on the Evaluation Date see the "Portfolio". The
payment of interest and preservation of capital are, of course, dependent
upon the continuing ability of the issuers of the Bonds to meet their
obligations. There can be no assurance that the Trust's objectives will
be achieved. Investment in the Trust should be made with an understanding
of the risks which an investment in long-term fixed rate obligations may
entail, including the risk that the value of the underlying portfolio will
decline with increases in interest rates, and that the value of Zero
Coupon Bonds is subject to greater fluctuations than coupon bonds in
response to changes in interest rates. Each Unit in the Trust represents
a 1/6292nd undivided interest in the principal and net income of the
Trust. The principal amount of Bonds deposited in the Trust per Unit is
reflected in the Summary of Essential Information. (See "The Trust--
Organization" in Part B of this Prospectus.) The Units being offered
hereby are issued and outstanding Units which have been purchased by the
Sponsor in the secondary market.

PUBLIC OFFERING PRICE. The secondary market Public Offering Price
of each Unit is equal to the aggregate bid price of the Bonds in the Trust
divided by the number of Units outstanding, plus a sales charge of 4.5% of
the Public Offering Price, which is the same as 4.712% of the net amount
invested in Bonds per Unit. In addition, accrued interest to expected
date of settlement is added to the Public Offering Price. If Units had
been purchased on the Evaluation Date, the Public Offering Price per Unit
would have been $656.22 plus accrued interest of $11.59 under the monthly
distribution plan, $13.57 under the semi-annual distribution plan and
$13.85 under the annual distribution plan, for a total of $667.81, $669.79
and $670.07, respectively. The Public Offering Price per Unit can vary on
a daily basis in accordance with fluctuations in the aggregate bid price
of the Bonds. (See the "Summary of Essential Information" and "Public
Offering--Offering Price" in Part B of this Prospectus.)

ESTIMATED LONG TERM RETURN AND ESTIMATED CURRENT RETURN. The rate
of return on an investment in Units of the Trust is measured in terms of
"Estimated Current Return" and "Estimated Long Term Return".

Estimated Long Term Return is calculated by: (1) computing the
yield to maturity or to an earlier call date (whichever results in a lower
yield) for each Bond in the Trust's portfolio in accordance with accepted
bond practices, which practices take into account not only the interest
payable on the Bond but also the amortization of premiums or accretion of
discounts, if any; (2) calculating the average of the yields for the Bonds
in the Trust's portfolio by weighing each Bond's yield by the market value
of the Bond and by the amount of time remaining to the date to which the
Bond is priced (thus creating an average yield for the portfolio of the
Trust); and (3) reducing the average yield for the portfolio of the Trust
in order to reflect estimated fees and expenses of the Trust and the
maximum sales charge paid by investors. The resulting Estimated Long Term
Return represents a measure of the return to investors earned over the
estimated life of the Trust. (For the Estimated Long Term Return to
Certificateholders under the monthly, semi-annual and annual distribution
plans, see "Summary of Essential Information".)

The Estimated Net Annual Interest Income per Unit of the Trust will
vary with changes in the fees and expenses of the Trustee and the
Evaluator applicable to the Trust and with the redemption, maturity, sale
or other disposition of the Bonds in the Trust. The Public Offering Price
will vary with changes in the bid prices of the Bonds. Therefore, there
is no assurance that the present Estimated Current Return or Estimated
Long Term Return will be realized in the future. (For the Estimated
Current Return to Certificateholders under the monthly, semi-annual and
annual distribution plans, see "Summary of Essential Information". See
"Estimated Long Term Return and Estimated Current Return" in Part B of
this Prospectus.)

A schedule of cash flow projections is available from the Sponsor
upon request.

DISTRIBUTIONS. Distributions of interest income, less expenses,
will be made by the Trust either monthly, semi-annually or annually
depending upon the plan of distribution applicable to the Unit purchased.
A purchaser of a Unit in the secondary market will initially receive
distributions in accordance with the plan selected by the prior owner of
such Unit and may thereafter change the plan as provided in "Interest and
Principal Distributions" in Part B of this Prospectus. Distributions of
principal, if any, will be made semi-annually on June 15 and December 15
of each year. (See "Rights of Certificateholders--Interest and Principal
Distributions" in Part B of this Prospectus. For estimated monthly, semi-
annual and annual interest distributions, see "Summary of Essential
Information".)

TOTAL REINVESTMENT PLAN. Certificateholders under the semi-annual
and annual plans of distribution have the opportunity to have their
interest distributions and principal distributions, if any, reinvested in
available series of "Insured Municipal Securities Trust" or "Municipal
Securities Trust." (See "Total Reinvestment Plan" and for residents of
Texas, see "Total Reinvestment Plan for Texas Residents" in Part B of this
Prospectus.) The Plan is not designed to be a complete investment
program.

<PAGE>

MUNICIPAL SECURITIES TRUST
SERIES 2

SUMMARY OF ESSENTIAL INFORMATION AS OF DECEMBER 31, 1993

Date of Deposit: September 13, 1979 Minimum Principal Distribution:
Principal Amount of Bonds ...$3,630,000 $1.00 per Unit.
Number of Units .............6,292 Weighted Average Life
Fractional Undivided Inter- to Maturity: 18.5 Years.
est in Trust per Unit .....1/6292 Minimum Value of Trust:
Principal Amount of Trust may be terminated if
Bonds per Unit ............$576.92 value of Trust is less than
Secondary Market Public $3,200,000 in principal amount
Offering Price** of Bonds.
Aggregate Bid Price Mandatory Termination Date:
of Bonds in Trust .......$3,943,141+++ The earlier of December 31,
Divided by 6,292 Units ....$626.69 2028 or the disposition of the
Plus Sales Charge of 4.5% last Bond in the Trust.
of Public Offering Price $29.53 Trustee***: The Bank of New
Public Offering Price York.
per Unit ................$656.22+ Trustee's Annual Fee: Monthly
Redemption and Sponsor's plan $1.08 per $1,000; semi-
Repurchase Price annual plan $.60 per $1,000;
per Unit ..................$626.69+ and annual plan is $.40 per
+++ $1,000.
++++ Evaluator: Kenny S&P Evaluation
Excess of Secondary Market Services.
Public Offering Price Evaluator's Fee for Each
over Redemption and Evaluation: Minimum of $35
Sponsor's Repurchase plus $.25 per each issue of
Price per Unit ............$29.53++++ Bonds in excess of 50 issues
Difference between Public (treating separate maturities
Offering Price per Unit as separate issues).
and Principal Amount per Sponsor: Bear, Stearns & Co.
Unit Premium/(Discount) ...$79.30 Inc.
Evaluation Time: 4:00 p.m.
New York Time.

PER UNIT INFORMATION BASED UPON INTEREST DISTRIBUTION PLAN ELECTED

Monthly Semi-Annual Annual
Option Option Option

Gross annual interest income# .........$43.21 $43.21 $43.21
Less estimated annual fees and
expenses ............................ 1.73 1.33 1.23
Estimated net annual interest ______ ______ ______
income (cash)# ......................$41.48 $41.88 $41.98
Estimated interest distribution# ...... 3.45 20.94 41.98
Estimated daily interest accrual# ..... .1152 .1163
.1166
Estimated current return#++ ........... 6.32% 6.38% 6.40%
Estimated long term return++ .......... 5.46% 5.52% 5.53%
Record dates .......................... 1st of Dec. 1 and Dec. 1
each month June 1
Interest distribution dates ........... 15th of Dec. 15 and Dec. 15
each month June 15

<PAGE>
* The Date of Deposit is the date on which the Trust Agreement was
signed and the deposit of the Bonds with the Trustee made.

** For information regarding offering price per unit and applicable
sales charge under the Total Reinvestment Plan, see "Total
Reinvestment Plan" in Part B of this Prospectus.

+ Plus accrued interest to expected date of settlement (approximately
five business days after purchase) of $11.59 monthly, $13.57 semi-
annually and $13.85 annually.

++++ See "Comparison of Public Offering Price, Sponsor's Repurchase Price
and Redemption Price" in Part B of this Prospectus.

# Does not include income accrual from original issue discount bonds,
if any.

<PAGE>

INFORMATION REGARDING THE TRUST
AS OF DECEMBER 31, 1993

DESCRIPTION OF PORTFOLIO*

The portfolio of the Trust consists of 11 issues representing
obligations of issuers located in 10 states. The Sponsor has participated
as a sole underwriter or manager, co-manager or member of an underwriting
syndicate from which 13.8% of the initial aggregate principal amount of
the Bonds were acquired. Approximately 28.9% of the Bonds are obligations
of state and local housing authorities; approximately 42.2% are hospital
revenue bonds; none are issued in connection with the financing of nuclear
generating facilities; and approximately 27.6% are "mortgage subsidy"
bonds. All of the Bonds in the Trust are subject to redemption prior to
their stated maturity dates pursuant to sinking fund or optional call
provisions. The Bonds may also be subject to other calls, which may be
permitted or required by events which cannot be predicted (such as
destruction, condemnation, termination of a contract, or receipt of excess
or unanticipated revenues). None of the Bonds are general obligation
bonds. Eleven issues representing $3,630,000 of the principal amount of
the Bonds are payable from the income of a specific project or authority
and are not supported by the issuer's power to levy taxes. The portfolio
is divided for purpose of issue as follows: Airport 1, Federally
Subsidized Mortgage 2, Hospital 5 and Housing 3. For an explanation of
the significance of these factors see "The Trust--Portfolio" in Part B of
this Prospectus.

* Changes in the Trust Portfolio: From January 1, 1994 to March 24,
1994, $40,000 of the principal amount of the Bonds in portfolio
no. 1 and $50,000 of the principal amount of the Bonds in portfolio
no. 6 have been called and are no longer contained in the Trust. 65
Units have been redeemed from the Trust.

<PAGE>

As of December 31, 1993, none of the aggregate amount of the Bonds
were original issue discount bonds. Approximately 34.7% of the aggregate
principal amount of the Bonds in the Trust were purchased at a discount
from par value at maturity, approximately 17.9% were purchased at a
premium and approximately 47.4% were purchased at par. For an explanation
of the significance of these factors see "Discount and Zero Coupon Bonds"
in Part B of this Prospectus.

None of the Bonds in the Trust are subject to the federal individual
alternative minimum tax under the Tax Reform Act of 1986. See "Tax
Status" in Part B of this Prospectus.

<PAGE>
FINANCIAL AND STATISTICAL INFORMATION

Selected data for each Unit outstanding for the periods listed below:

December 31, 1991 6,370 $756.24 $55.80 $56.32 $56.47$ 71.20
December 31, 1992 6,323 653.74 50.72 51.15 51.33 113.18
December 31, 1993 6,292 638.87 43.30 43.75 43.85 40.87

<PAGE>
Independent Auditors' Report

The Sponsor, Trustee and Certificateholders
Municipal Securities Trust, Series 2:

We have audited the accompanying statement of net assets, including the
portfolio, of Municipal Securities Trust, Series 2 as of December 31,
1993, and the related statements of operations, and changes in net assets
for each of the years in the three year period then ended. These
financial statements are the responsibility of the Trustee (see note 2).
Our responsibility is to express an opinion on these financial statements
based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as
of December 31, 1993, by correspondence with the Trustee. An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable
basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Municipal Securities
Trust, Series 2 as of December 31, 1993, and the results of its operations
and the changes in its net assets for each of the years in the three year
period then ended in conformity with generally accepted accounting
principles.

KPMG Peat Marwick

New York, New York
March 31, 1994
<PAGE>

Statement of Net Assets

December 31, 1993

Investments in marketable securities,
at market value (cost $3,602,102) $ 3,943,123

Excess of other assets over total liabilities 76,616
----------

Net assets ( 6,292 units of fractional undivided
interest outstanding, $638.87 per unit) $ 4,019,739
==========

See accompanying notes to financial statements.
<PAGE>
<TABLE>

Statements of Operations
<CAPTION>
Years ended December 31,
-------- --------- ---------
1993 1992 1991
-------- --------- ---------

<S> <C> <C> <C>
Investment income - interest $ 282,830 328,987 374,012
-------- --------- ---------

Expenses:
Trustee's fees 6,794 7,662 8,155
Evaluator's fees 3,298 3,309 3,012
-------- --------- ---------

Total expenses 10,092 10,971 11,167
-------- --------- ---------

Investment income, net 272,738 318,016 362,845
-------- --------- ---------

Realized and unrealized
gain on investments:
Net realized gain on
bonds sold or called 11,249 7,599 500
Unrealized appreciation
for the year 154,221 64,149 112,285
-------- --------- ---------

Net gain on investments 165,470 71,748 112,785
-------- --------- ---------

Net increase in net
assets resulting
from operations $ 438,208 389,764 475,630
======== ========= =========

See accompanying notes to financial statements.
</TABLE>
<TABLE>
<PAGE>

Statements of Changes in Net Assets
<C>
Years ended December 31,
----------- ----------- -----------
1993 1992 1991
----------- ----------- -----------
<S> <C> <C> <C>
Operations:
Investment income, net $ 272,738 318,016 362,845
Net realized gain on
bonds sold or called 11,249 7,599 500
Unrealized appreciation
for the year 154,221 64,149 112,285
----------- ----------- -----------

Net increase in net
assets resulting
from operations 438,208 389,764 475,630
----------- ----------- -----------

Distributions to Certificateholders:
Investment income 274,065 321,886 365,535
Principal 257,313 715,637 460,308

Redemptions:
Interest 495 1,183 4,531
Principal 20,220 34,671 209,760
----------- ----------- -----------

Total distributions and redemptions 552,093 1,073,377 1,040,134
----------- ----------- -----------

Total decrease (113,885) (683,613) (564,504)

Net assets at beginning of year 4,133,624 4,817,237 5,381,741
----------- ----------- -----------

Net assets at end of year (including
undistributed net investment
income of $76,598, $78,420 and
$83,473, respectively) $ 4,019,739 4,133,624 4,817,237
=========== =========== ===========

See accompanying notes to financial statements.
</TABLE>
<PAGE>

MUNICIPAL SECURITIES TRUST, SERIES 2

Notes to Financial Statements

December 31, 1993, 1992, and 1991

(1) Organization

Municipal Securities Trust, Series 2 (Trust) was organized on
September 13, 1979 by Bear, Stearns & Co. Inc. (Sponsor) under the
laws of the State of New York by a Trust Indenture and Agreement, and
is registered under the Investment Company Act of 1940.

(2) Summary of Significant Accounting Policies

Investments are carried at market value which is determined by either
Standard & Poor's Corporation or Moody's Investors Service, Inc.
(Evaluator) as discussed in Footnotes to Portfolio. The market value
of the investments is based upon the bid prices for the bonds at the
end of the year, except that the market value on the date of deposit
represents the cost to the Trust based on the offering prices for
investments at that date. The difference between cost and market
value is reflected as unrealized appreciation (depreciation) of
investments. Securities transactions are recorded on the trade date.
Realized gains (losses) from securities transactions are determined
on the basis of average cost of the securities sold or redeemed.

(3) Income Taxes

The Trust is not subject to Federal income taxes as provided for by
the Internal Revenue Code.

(4) Trust Administration

The fees and expenses of the Trust are incurred and paid on the basis
set forth under "Trust Expenses and Charges" in Part B of this
Prospectus.

The Trust Indenture and Agreement provides for interest distributions
as often as monthly (depending upon the distribution plan elected by
the Certificateholders).

See "Financial and Statistical Information" in Part A of this
Prospectus for the amounts of per unit distributions during the years
ended December 31, 1993, 1992 and 1991.

The Trust Indenture and Agreement also requires the Trust to redeem
units tendered. 31, 47, and 270 units were redeemed during the years
ended December 31, 1993, 1992, and 1991, respectively.

(5) Net Assets

At December 31, 1993, the net assets of the Trust represented the
interest of Certificateholders as follows:

Original cost to Certificateholders $ 8,207,757
Less initial gross underwriting commission (369,360)

7,838,397

Accumulated cost of bonds sold or called (4,236,295)
Net unrealized appreciation 341,021
Undistributed net investment income 76,598
Undistributed proceeds from bonds sold or called 18

Total $ 4,019,739

<PAGE>
<TABLE>
MUNICIPAL SECURITIES TRUST, SERIES 2

Portfolio
December 31, 1993
<CAPTION>
Port- Aggregate Coupon Rate/ Redemption Feature
folio Principal Name of Issuer Ratings Date(s) of S.F.--Sinking Fund Market
No. Amount and Title of Bonds (1) Maturity(2) Ref.-Refunding (2) (6) Value(3)
-- --------- --------------------- ----- ------------ ----------------------- ----------
<S> <C> <C> <C> <C> <C> <C>
1 $ 320,000 Helena-West Helena AA 7.650% Currently @ 100 S.F. $ 324,410
(Arkansas) 9/01/2011 3/01/94 @ 101 Ref.
Residential Housing
Facilities Board,
Single Family
Mortgage Revenue
Bonds (Privately
Insured or Federally
Insured or Guaranteed
Mortgage Loans)
Series 1979

2 50,000 City of Atlanta, A 6.300 1/01/00 @ 100 S.F. 50,617
Georgia, Airport 1/01/2007 2/03/94 @ 101 Ref.
Facilities Revenue
Bonds, Series 1977

3 500,000 Illinois Health AAA 7.500 9/01/98 @ 100 S.F. 580,510
Facilities Authority 9/01/2009 None
Revenue Bonds, Series
1979 (Mercy Center
for Health Care
Services
Project) - Aurora,
Illinois

4 220,000 City of Davenport, NR 7.200 7/01/99 @ 100 S.F. 245,472
Iowa, Hospital 7/01/2009 None
Facility Revenue
Bonds, Series
1979, St. Luke's
Hospital Project

5 500,000 Denham AAA 7.200 No Sinking Fund 595,055
Springs/Livingston 8/01/2011 None
Housing and Mortgage
Finance Authority
(Denham Springs,
Louisiana) Single
Family Mortgage
Revenue Bonds
(Multiple Originators
and Servicers) 1979
Series A

6 180,000 City of Vadnais A+ 7.500 Currently @ 100 S.F. 181,577
Heights, Ramsey 8/01/2009 8/01/94 @ 100 Ref.
County, Minnesota,
Housing Development
Rev. Bonds, Series A,
1979 Riverwood
Housing Fdtn. Prj.

7 400,000 Housing Finance NR 7.750 2/01/96 @ 100 S.F. 410,752
Corporation of the 2/01/2011 4/01/94 @ 102 Ref.
City of Long Branch,
New Jersey, Section 8
Assisted Mortgage
Revenue Bonds (Ocean
View Towers
Associates Series
1979 Project)

8 500,000 County of Marion, BBB+ 7.500 12/01/00 @ 100 S.F. 511,790
Ohio, Hospital 12/01/2011 2/01/94 @ 102 Ref.
Improvement First
Mortgage Revenue
Bonds (Community
Medcenter Hospital
Project Series 1979)
Term B

9 650,000 Northeastern Oklahoma NR 8.000 4/01/11 @ 100 S.F. 679,816
Housing Finance 4/01/2020 4/01/95 @ 105 Ref.
Corporation (Nowata,
Oklahoma, Section 8
Assisted Project)
First Lien Revenue
Bonds, Series 1979

10 200,000 Anderson County, AAA 6.625 8/01/96 @ 100 S.F. 236,076
South Carolina 8/01/2009 None
Hospital Facilities
Revenue Bonds, Series
1979 (Anderson
Memorial Hospital)

11 110,000 Charleston County, AAA 7.000 10/01/96 @ 100 S.F. 127,048
South Carolina 10/01/2011 None
Hospital Facilities
Revenue Bonds Series
1979 (Roper Hospital
Project)

--------- ----------
$ 3,630,000 $ 3,943,123
========= ==========

See accompanying footnotes to the portfolio and notes to the financial statements.
</TABLE>
<PAGE>
MUNICIPAL SECURITIES TRUST, SERIES 2

Footnotes to Portfolio

December 31, 1993

(3) At December 31, 1993, the net unrealized appreciation of all the
bonds was comprised of gross unrealized appreciation of $341,021.

(4) The annual interest income, based upon bonds held at December 31, 1993,
to the Trust is $271,920.

(5) Bonds sold or called after December 31, 1993 are noted in a footnote
"Changes in Trust Portfolio" under "Description of Portfolio" in Part
A of this Prospectus.

Note: Part A of This Prospectus May Not Be
Distributed Unless Accompanied by Part B.

MUNICIPAL SECURITIES TRUST

SERIES 3

_________________________________________________________________________

The Trust is a unit investment trust designated Series 3 ("Municipal
Trust") with an underlying portfolio of long-term tax-exempt bonds issued
by or on behalf of states, municipalities and public authorities, and was
formed to preserve capital and to provide interest income (including,
where applicable, earned original issue discount) which, in the opinions
of bond counsel to the respective issuers, is, with certain exceptions,
currently exempt from regular Federal income tax (including where
applicable earned original discount) under existing law but may be subject
to state and local taxes. Such interest income may, however, be a
specific preference item for purposes of Federal individual and/or
corporate alternative minimum tax. Investors may recognize taxable
capital gain upon maturity or earlier redemption of the underlying bonds.
(See "Tax Status" and "The Trust--Portfolio" in Part B of this
Prospectus.) The Sponsor is Bear, Stearns & Co. Inc. The value of the
Units of the Trust will fluctuate with the value of the underlying bonds.
Minimum purchase: 1 Unit.

_________________________________________________________________________

Investors should retain both parts of this
Prospectus for future reference.

________________________________________________________________________

Prospectus Part A Dated April 29, 1994

<PAGE>

THE TRUST. The Trust is a unit investment trust formed to preserve
capital and to provide interest income (including, where applicable,
earned original issue discount) which, in the opinions of bond counsel to
the respective issuers, is, with certain exceptions, currently exempt from
regular federal income tax under existing law through investment in a
fixed, diversified portfolio of long-term bonds (the "Bonds") issued by or
on behalf of states, municipalities and public authorities. A Trust
designated as a short/intermediate-term trust must have a dollar-weighted
average portfolio maturity of more than two years but less than five
years; a Trust designated as an intermediate-term trust must have a
dollar-weighted average portfolio maturity of more than three years but
not more than ten years; a Trust designated as an intermediate/long-term
trust must have a dollar-weighted average portfolio maturity of more than
ten years but less than fifteen years; and a Trust designated as a long-
term trust must have a dollar-weighted average portfolio maturity of more
than ten years. Although the Supreme Court has determined that Congress
has the authority to subject interest on bonds such as the Bonds in the
Trust to regular federal income taxation, existing law excludes such
interest from regular federal income tax. Such interest income may,
however, be subject to the federal corporate alternative minimum tax and
to state and local taxes. (See "Description of Portfolio" in this Part A
for a description of those Bonds which pay interest income subject to the
federal individual alternative minimum tax. See also "Tax Status" in
Part B of this Prospectus.) Some of the Bonds in the portfolio may be
"Zero Coupon Bonds", which are original issue discount bonds that provide
for payment at maturity at par value, but do not provide for the payment
of any current interest. Some of the Bonds in the portfolio may have been
purchased at an aggregate premium over par. Some of the Bonds in the
Trust have been issued with optional refunding or refinancing provisions
("Refunded Bonds") whereby the issuer of the Bond has the right to call
such Bond prior to its stated maturity date (and other than pursuant to
sinking fund provisions) and to issue new bonds ("Refunding Bonds") in
order to finance the redemption. Issuers typically utilize refunding
calls in order to take advantage of lower interest rates in the
marketplace. Some of these Refunded Bonds may be called for redemption
pursuant to pre-refunding provisions ("Pre-Refunded Bonds") whereby the
proceeds from the issue of the Refunding Bonds are typically invested in
government securities in escrow for the benefit of the holders of the Pre-
Refunded Bonds until the refunding call date. Usually, Pre-Refunded Bonds
will bear a triple-A rating because of this escrow. The issuers of Pre-
Refunded Bonds must call such Bonds on their refunding call date.
Therefore, as of such date, the Trust will receive the call price for such
bonds but will cease receiving interest income with respect to them. For
a list of those Bonds which are Pre-Refunded Bonds, if any, as of the
Evaluation Date, see "Notes to Financial Statements" in this Part A. All
of the Bonds in the Trust were rated "A" or better by Standard & Poor's
Corporation or Moody's Investors Service, Inc. at the time originally
deposited in the Trust. For a discussion of the significance of such
ratings see "Description of Bond Ratings" in Part B of this Prospectus and
for a list of ratings on the Evaluation Date see the "Portfolio". The
payment of interest and preservation of capital are, of course, dependent
upon the continuing ability of the issuers of the Bonds to meet their
obligations. There can be no assurance that the Trust's objectives will
be achieved. Investment in the Trust should be made with an understanding
of the risks which an investment in long-term fixed rate obligations may
entail, including the risk that the value of the underlying portfolio will
decline with increases in interest rates, and that the value of Zero
Coupon Bonds is subject to greater fluctuations than coupon bonds in
response to changes in interest rates. Each Unit in the Trust represents
a 1/7108th undivided interest in the principal and net income of the
Trust. The principal amount of Bonds deposited in the Trust per Unit is
reflected in the Summary of Essential Information. (See "The Trust--
Organization" in Part B of this Prospectus.) The Units being offered
hereby are issued and outstanding Units which have been purchased by the
Sponsor in the secondary market.

PUBLIC OFFERING PRICE. The secondary market Public Offering Price
of each Unit is equal to the aggregate bid price of the Bonds in the Trust
divided by the number of Units outstanding, plus a sales charge of 4.5% of
the Public Offering Price, which is the same as 4.712% of the net amount
invested in Bonds per Unit. In addition, accrued interest to expected
date of settlement is added to the Public Offering Price. If Units had
been purchased on the Evaluation Date, the Public Offering Price per Unit
would have been $226.41 plus accrued interest of $19.95 under the monthly
distribution plan, $21.21 under the semi-annual distribution plan and
$21.79 under the annual distribution plan, for a total of $246.36, $247.62
and $248.20, respectively. The Public Offering Price per Unit can vary on
a daily basis in accordance with fluctuations in the aggregate bid price
of the Bonds. (See the "Summary of Essential Information" and "Public
Offering--Offering Price" in Part B of this Prospectus.)

ESTIMATED LONG TERM RETURN AND ESTIMATED CURRENT RETURN. The rate
of return on an investment in Units of the Trust is measured in terms of
"Estimated Current Return" and "Estimated Long Term Return".

Estimated Long Term Return is calculated by: (1) computing the
yield to maturity or to an earlier call date (whichever results in a lower
yield) for each Bond in the Trust's portfolio in accordance with accepted
bond practices, which practices take into account not only the interest
payable on the Bond but also the amortization of premiums or accretion of
discounts, if any; (2) calculating the average of the yields for the Bonds
in the Trust's portfolio by weighing each Bond's yield by the market value
of the Bond and by the amount of time remaining to the date to which the
Bond is priced (thus creating an average yield for the portfolio of the
Trust); and (3) reducing the average yield for the portfolio of the Trust
in order to reflect estimated fees and expenses of the Trust and the
maximum sales charge paid by investors. The resulting Estimated Long Term
Return represents a measure of the return to investors earned over the
estimated life of the Trust. (For the Estimated Long Term Return to
Certificateholders under the monthly, semi-annual and annual distribution
plans, see "Summary of Essential Information".)

The Estimated Net Annual Interest Income per Unit of the Trust will
vary with changes in the fees and expenses of the Trustee and the
Evaluator applicable to the Trust and with the redemption, maturity, sale
or other disposition of the Bonds in the Trust. The Public Offering Price
will vary with changes in the bid prices of the Bonds. Therefore, there
is no assurance that the present Estimated Current Return or Estimated
Long Term Return will be realized in the future. (For the Estimated
Current Return to Certificateholders under the monthly, semi-annual and
annual distribution plans, see "Summary of Essential Information". See
"Estimated Long Term Return and Estimated Current Return" in Part B of
this Prospectus.)

A schedule of cash flow projections is available from the Sponsor
upon request.

<PAGE>

MUNICIPAL SECURITIES TRUST
SERIES 3

SUMMARY OF ESSENTIAL INFORMATION AS OF DECEMBER 31, 1993

Date of Deposit: June 10, 1980 Evaluation Time: 4:00 p.m.
Principal Amount of Bonds ...$1,405,000 New York Time.
Number of Units .............7,108 Minimum Principal Distribution:
Fractional Undivided Inter- $1.00 per Unit.
est in Trust per Unit .....1/7108 Weighted Average Life
Principal Amount of to Maturity: 16.9 Years.
Bonds per Unit ............$197.66 Minimum Value of Trust:
Secondary Market Public Trust may be terminated if
Offering Price** value of Trust is less than
Aggregate Bid Price $3,600,000 in principal amount
of Bonds in Trust .......$1,536,889+++ of Bonds.
Divided by 7,108 Units ....$216.22 Mandatory Termination Date:
Plus Sales Charge of 4.5% The earlier of December 31,
of Public Offering Price $10.19 2028 or the disposition of the
Public Offering Price last Bond in the Trust.
per Unit ................$226.41+ Trustee***: The Bank of New
Redemption and Sponsor's York.
Repurchase Price Trustee's Annual Fee: Monthly
per Unit ..................$216.22+ plan $1.08 per $1,000; semi-
+++ annual plan $.60 per $1,000;
++++ and annual plan is $.40 per
Excess of Secondary Market $1,000.
Public Offering Price Evaluator: Kenny S&P Evaluation
over Redemption and Services.
Sponsor's Repurchase Evaluator's Fee for Each
Price per Unit ............$10.19++++ Evaluation: Minimum of $35
Difference between Public plus $.25 per each issue of
Offering Price per Unit Bonds in excess of 50 issues
and Principal Amount per (treating separate maturities
Unit Premium/(Discount) ...$28.75 as separate issues).
Sponsor: Bear, Stearns & Co.
Inc.

PER UNIT INFORMATION BASED UPON INTEREST DISTRIBUTION PLAN ELECTED

Monthly Semi-Annual Annual
Option Option Option

Gross annual interest income# .........$17.13 $17.13 $17.13
Less estimated annual fees and
expenses ............................ 1.16 .92 .87
Estimated net annual interest ______ ______ ______
income (cash)# ......................$15.97 $16.21 $16.26
Estimated interest distribution# ...... 1.33 8.10 16.26
Estimated daily interest accrual# ..... .0443 .0450 .0451
Estimated current return#++ ........... 7.05% 7.16% 7.18%
Estimated long term return++ .......... 5.26% 5.37% 5.39%
Record dates .......................... 1st of Dec. 1 and Dec. 1
each month June 1
Interest distribution dates ........... 15th of Dec. 15 and Dec. 15
each month June 15

<PAGE>
* The Date of Deposit is the date on which the Trust Agreement was
signed and the deposit of the Bonds with the Trustee made.

** For information regarding offering price per unit and applicable
sales charge under the Total Reinvestment Plan, see "Total
Reinvestment Plan" in Part B of this Prospectus.

+ Plus accrued interest to expected date of settlement (approximately
five business days after purchase) of $19.95 monthly, $21.21 semi-
annually and $21.79 annually.

++++ See "Comparison of Public Offering Price, Sponsor's Repurchase Price
and Redemption Price" in Part B of this Prospectus.

# Does not include income accrual from original issue discount bonds,
if any.

<PAGE>

INFORMATION REGARDING THE TRUST
AS OF DECEMBER 31, 1993

DESCRIPTION OF PORTFOLIO*

The portfolio of the Trust consists of 6 issues representing
obligations of issuers located in 5 states. The Sponsor has participated
as a sole underwriter or manager, co-manager or member of an underwriting
syndicate from which 6% of the initial aggregate principal amount of the
Bonds were acquired. Approximately 38.4% of the Bonds are obligations of
state and local housing authorities; approximately 24.6% are hospital
revenue bonds; none are issued in connection with the financing of nuclear
generating facilities; and approximately 29.9% are "mortgage subsidy"
bonds. All of the Bonds in the Trust are subject to redemption prior to
their stated maturity dates pursuant to sinking fund or optional call
provisions. The Bonds may also be subject to other calls, which may be
permitted or required by events which cannot be predicted (such as
destruction, condemnation, termination of a contract, or receipt of excess
or unanticipated revenues). None of the Bonds are general obligation
bonds. Six issues representing $1,405,000 of the principal amount of the
Bonds are payable from the income of a specific project or authority and
are not supported by the issuer's power to levy taxes. The portfolio is
divided for purpose of issue as follows: Electric Power 1, Federally
Subsidized Mortgage 1, Hospital 2 and Housing 2. For an explanation of
the significance of these factors see "The Trust--Portfolio" in Part B of
this Prospectus.

* Changes in the Trust Portfolio: From January 1, 1994 to March 24,
1994, $50,000 of the principal amount of the Bonds in portfolio
no. 6 has been called and is no longer contained in the Trust. 165
Units have been redeemed from the Trust.

<PAGE>

As of December 31, 1993, none of the Bonds were original issue
discount bonds. Approximately 37% of the aggregate principal amount of
the Bonds in the Trust were purchased at a discount from par value at
maturity, approximately 38.4% were purchased at a premium and
approximately 24.6% were purchased at par. For an explanation of the
significance of these factors see "Discount and Zero Coupon Bonds" in
Part B of this Prospectus.

None of the Bonds in the Trust are subject to the federal individual
alternative minimum tax under the Tax Reform Act of 1986. See "Tax
Status" in Part B of this Prospectus.

<PAGE>
FINANCIAL AND STATISTICAL INFORMATION

Selected data for each Unit outstanding for the periods listed below:

December 31, 1991 7,695 $278.05 $20.32 $20.58 $20.65 $27.88
December 31, 1992 7,450 240.03 17.50 17.78 17.84 37.04
December 31, 1993 7,108 233.46 16.43 16.75 16.81 11.03

<PAGE>
Independent Auditors' Report

The Sponsor, Trustee and Certificateholders
Municipal Securities Trust, Series 3:

We have audited the accompanying statement of net assets, including the
portfolio, of Municipal Securities Trust, Series 3 as of December 31,
1993, and the related statements of operations, and changes in net assets
for each of the years in the three year period then ended. These
financial statements are the responsibility of the Trustee (see note 2).
Our responsibility is to express an opinion on these financial statements
based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as
of December 31, 1993, by correspondence with the Trustee. An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable
basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Municipal Securities
Trust, Series 3 as of December 31, 1993, and the results of its operations
and the changes in its net assets for each of the years in the three year
period then ended in conformity with generally accepted accounting
principles.

KPMG Peat Marwick

New York, New York
March 31, 1994
<PAGE>

Statement of Net Assets
December 31, 1993

Assets:
Investments in marketable securities,
at market value (cost $1,321,331) $ 1,536,825

Accrued interest 27,623
Cash 95,310
-------
-------
Other assets 122,933
-------

Liabilities:
Accrued expenses 349
-------
Total liabilities 349
-------

Excess of other assets over other liabilities 122,584
----------

Net assets (7,108 units of fractional undivided
interest outstanding, $233.46 per unit) $ 1,659,409
==========

See accompanying notes to financial statements.
<PAGE>
<TABLE>

Statements of Operations
<CAPTION>
Years ended December 31,
-------- --------- ---------
1993 1992 1991
-------- --------- ---------
<S> <C> <C> <C>
Investment income - interest $ 128,385 137,540 156,365
-------- --------- ---------

Expenses:
Trustee's fees 4,230 4,588 5,113
Evaluator's fees 3,298 3,306 3,232
-------- --------- ---------

Total expenses 7,528 7,894 8,345
-------- --------- ---------

Investment income, net 120,857 129,646 148,020
-------- --------- ---------

Realized and unrealized gain
(loss) on investments:
Net realized gain on
bonds sold or called 24,864 62,650 6,075
Unrealized appreciation
(depreciation) for the year 8,788 (66,293) 43,387
-------- --------- ---------

Net gain (loss)
on investments 33,652 (3,643) 49,462
-------- --------- ---------

Net increase in net
assets resulting
from operations $ 154,509 126,003 197,482
======== ========= =========

See accompanying notes to financial statements.
</TABLE>
<PAGE>

<TABLE>
Statements of Changes in Net Assets
<CAPTION>
Years ended December 31,
------------ --- ----------- --- ----------
1993 1992 1991
------------ ----------- ----------
<S> <C> <C> <C>
Operations:
Investment income, net $ 120,857 129,646 148,020
Net realized gain on
bonds sold or called 24,864 62,650 6,075
Unrealized appreciation
(depreciation) for the year 8,788 (66,293) 43,387
------------ ----------- ----------

Net increase in net
assets resulting
from operations 154,509 126,003 197,482
------------ ----------- ----------

Distributions To Certificateholders:
Investment income 120,619 132,149 160,578
Principal 78,401 279,942 221,558

Redemptions:
Interest 7,229 5,651 10,950
Principal 77,089 59,621 129,920
------------ ----------- ----------

Total distributions
and redemptions 283,338 477,363 523,006
------------ ----------- ----------

Total decrease (128,829) (351,360) (325,524)

Net assets at beginning of year 1,788,238 2,139,598 2,465,122
------------ ----------- ----------

Net assets at end of year (including
undistributed net investment
income of $122,520, $129,511 and
$137,665, respectively) $ 1,659,409 1,788,238 2,139,598
============ =========== ==========

See accompanying notes to financial statements.
</TABLE>
<PAGE>

MUNICIPAL SECURITIES TRUST, SERIES 3

Notes to Financial Statements

December 31, 1993, 1992 and 1991

(1) Organization

Municipal Securities Trust, Series 3 (Trust) was organized on June
10, 1980 by Bear, Stearns & Co. Inc. (Sponsor) under the laws of the
State of New York by a Trust Indenture and Agreement, and is
registered under the Investment Company Act of 1940.

(2) Summary of Significant Accounting Policies

(3) Income Taxes

The Trust is not subject to Federal income taxes as provided for by
the Internal Revenue Code.

(4) Trust Administration

The fees and expenses of the Trust are incurred and paid on the basis
set forth under "Trust Expenses and Charges" in Part B of this
Prospectus.

The Trust Indenture and Agreement provides for interest distributions
as often as monthly (depending upon the distribution plan elected by
the Certificateholders).

See "Financial and Statistical Information" in Part A of this
Prospectus for the amounts of per unit distributions during the years
ended December 31, 1993, 1992, and 1991.

The Trust Indenture and Agreement also requires the Trust to redeem
units tendered. 342, 245 and 479 units were redeemed by the Trust
during the years ended December 31, 1993, 1992 and 1991,
respectively.

(5) Net Assets

At December 31, 1993, the net assets of the Trust represented the
interest of Certificateholders as follows:

Original cost to Certificateholders $ 9,384,130
Less initial gross underwriting commission (422,280)

8,961,850

Accumulated cost of bonds sold or called (7,640,519)
Net unrealized appreciation 215,494
Undistributed net investment income 122,520
Undistributed proceeds from bonds sold or called 64

Total $ 1,659,409

The original cost to Certificateholders, less the initial gross
underwriting commission, represents the aggregate initial public offering
price net of the applicable sales charge on 9,000 units of fractional
undivided interest of the Trust as of the date of deposit.
<PAGE>
<TABLE>

MUNICIPAL SECURITIES TRUST, SERIES 3

Portfolio
December 31, 1993
<CAPTION>
Port- Aggregate Coupon Rate/ Redemption Feature
folio Principal Name of Issuer Ratings Date(s) of S.F.--Sinking Fund Market
No. Amount and Title of Bonds (1) Maturity(2) Ref.--Refunding (2) (6) Value(3)
-- --------- --------------------- ------ ------------- ------------------------ ----------
<S> <C> <C> <C> <C> <C> <C>
1 $ 100,000 Salt River Project AA 5.000% 1/01/99 @ 100 S.F. $ 97,925
Agricultural 1/01/2010 2/01/94 @ 100 Ref.
Improvement and Power
District Electric
System Revenue
(Series A of 1973)
Arizona

2 245,000 Pulaski County, AAA 9.250 3/01/00 @ 100 S.F. None 322,440
Arkansas Hospital 3/01/2010
Revenue Bonds
(Arkansas Children's
Hospital) Series 1980

3 540,000 Marietta Housing NR 9.750 6/01/96 @ 100 S.F. 565,071
Development 6/01/2012 6/01/94 @ 104 Ref.
Corporation, Georgia,
Mortgage Revenue
Bonds, Series 1980
(Section 8 Assisted
Project)

4 100,000 Illinois Health AAA 9.000 10/01/95 @ 100 S.F. 127,333
Facilities Authority 10/01/2010 None
Revenue Bonds Series
1980 (The Methodist
Medical Center of
Illinois Project)
Peoria, Illinois

5 195,000 City of Coon Rapids, BBB+ 8.000 10/01/00 @ 100 S.F. 197,085
Anoka County, 10/01/2009 4/01/94 @ 100 Ref.
Minnesota Housing
Development Revenue
Bonds, 1979 Series A
(Rapids Mortgage
Assistance Foundation
Project)

6 225,000 City of Vadnais A+ 7.500 Currently @ 100 S.F. 226,971
Heights, Ramsey 8/01/2009 8/01/94 @ 100 Ref.
County, Minnesota
Housing Development
Revenue Bond 1979
Series A (Riverwood
Development
Corporation Project)

--------- ----------
$ 1,405,000 $ 1,536,825
========= ==========

See accompanying footnotes to portfolio and notes to financial statements.
</TABLE>
<PAGE>

MUNICIPAL SECURITIES TRUST, SERIES 3

Footnotes to Portfolio

December 31, 1993

(3) At December 31, 1993, the net unrealized appreciation of all the bonds
was comprised of gross unrealized appreciation of $215,494.

(4) The annual interest income, based upon bonds held at December 31, 1993,
to the Trust is $121,788.

(5) Bonds sold or called after December 31, 1993 are noted in a footnote
"Changes in Trust Portfolio" under "Description of Portfolio" in Part
A of this Prospectus.

Note: Part A of This Prospectus May Not Be
Distributed Unless Accompanied by Part B.

MUNICIPAL SECURITIES TRUST

SERIES 4

_________________________________________________________________________

The Trust is a unit investment trust designated Series 4 ("Municipal
Trust") with an underlying portfolio of long-term tax-exempt bonds issued
by or on behalf of states, municipalities and public authorities, and was
formed to preserve capital and to provide interest income (including,
where applicable, earned original issue discount) which, in the opinions
of bond counsel to the respective issuers, is, with certain exceptions,
currently exempt from regular Federal income tax (including where
applicable earned original discount) under existing law but may be subject
to state and local taxes. Such interest income may, however, be a
specific preference item for purposes of Federal individual and/or
corporate alternative minimum tax. Investors may recognize taxable
capital gain upon maturity or earlier redemption of the underlying bonds.
(See "Tax Status" and "The Trust--Portfolio" in Part B of this
Prospectus.) The Sponsor is Bear, Stearns & Co. Inc. The value of the
Units of the Trust will fluctuate with the value of the underlying bonds.
Minimum purchase: 1 Unit.

__________________________________________________________________________

Investors should retain both parts of this
Prospectus for future reference.

__________________________________________________________________________

Prospectus Part A Dated April 29, 1994

<PAGE>

THE TRUST. The Trust is a unit investment trust formed to preserve
capital and to provide interest income (including, where applicable,
earned original issue discount) which, in the opinions of bond counsel to
the respective issuers, is, with certain exceptions, currently exempt from
regular federal income tax under existing law through investment in a
fixed, diversified portfolio of long-term bonds (the "Bonds") issued by or
on behalf of states, municipalities and public authorities. A Trust
designated as a short/intermediate-term trust must have a dollar-weighted
average portfolio maturity of more than two years but less than five
years; a Trust designated as an intermediate-term trust must have a
dollar-weighted average portfolio maturity of more than three years but
not more than ten years; a Trust designated as an intermediate/long-term
trust must have a dollar-weighted average portfolio maturity of more than
ten years but less than fifteen years; and a Trust designated as a long-
term trust must have a dollar-weighted average portfolio maturity of more
than ten years. Although the Supreme Court has determined that Congress
has the authority to subject interest on bonds such as the Bonds in the
Trust to regular federal income taxation, existing law excludes such
interest from regular federal income tax. Such interest income may,
however, be subject to the federal corporate alternative minimum tax and
to state and local taxes. (See "Description of Portfolio" in this Part A
for a description of those Bonds which pay interest income subject to the
federal individual alternative minimum tax. See also "Tax Status" in
Part B of this Prospectus.) Some of the Bonds in the portfolio may be
"Zero Coupon Bonds", which are original issue discount bonds that provide
for payment at maturity at par value, but do not provide for the payment
of any current interest. Some of the Bonds in the portfolio may have been
purchased at an aggregate premium over par. Some of the Bonds in the
Trust have been issued with optional refunding or refinancing provisions
("Refunded Bonds") whereby the issuer of the Bond has the right to call
such Bond prior to its stated maturity date (and other than pursuant to
sinking fund provisions) and to issue new bonds ("Refunding Bonds") in
order to finance the redemption. Issuers typically utilize refunding
calls in order to take advantage of lower interest rates in the
marketplace. Some of these Refunded Bonds may be called for redemption
pursuant to pre-refunding provisions ("Pre-Refunded Bonds") whereby the
proceeds from the issue of the Refunding Bonds are typically invested in
government securities in escrow for the benefit of the holders of the Pre-
Refunded Bonds until the refunding call date. Usually, Pre-Refunded Bonds
will bear a triple-A rating because of this escrow. The issuers of Pre-
Refunded Bonds must call such Bonds on their refunding call date.
Therefore, as of such date, the Trust will receive the call price for such
bonds but will cease receiving interest income with respect to them. For
a list of those Bonds which are Pre-Refunded Bonds, if any, as of the
Evaluation Date, see "Notes to Financial Statements" in this Part A. All
of the Bonds in the Trust were rated "A" or better by Standard & Poor's
Corporation or Moody's Investors Service, Inc. at the time originally
deposited in the Trust. For a discussion of the significance of such
ratings see "Description of Bond Ratings" in Part B of this Prospectus and
for a list of ratings on the Evaluation Date see the "Portfolio". The
payment of interest and preservation of capital are, of course, dependent
upon the continuing ability of the issuers of the Bonds to meet their
obligations. There can be no assurance that the Trust's objectives will
be achieved. Investment in the Trust should be made with an understanding
of the risks which an investment in long-term fixed rate obligations may
entail, including the risk that the value of the underlying portfolio will
decline with increases in interest rates, and that the value of Zero
Coupon Bonds is subject to greater fluctuations than coupon bonds in
response to changes in interest rates. Each Unit in the Trust represents
a 1/9054th undivided interest in the principal and net income of the
Trust. The principal amount of Bonds deposited in the Trust per Unit is
reflected in the Summary of Essential Information. (See "The Trust--
Organization" in Part B of this Prospectus.) The Units being offered
hereby are issued and outstanding Units which have been purchased by the
Sponsor in the secondary market.

PUBLIC OFFERING PRICE. The secondary market Public Offering Price
of each Unit is equal to the aggregate bid price of the Bonds in the Trust
divided by the number of Units outstanding, plus a sales charge of 4.5% of
the Public Offering Price, which is the same as 4.712% of the net amount
invested in Bonds per Unit. In addition, accrued interest to expected
date of settlement is added to the Public Offering Price. If Units had
been purchased on the Evaluation Date, the Public Offering Price per Unit
would have been $178.26 plus accrued interest of $14.87 under the monthly
distribution plan, $15.12 under the semi-annual distribution plan and
$15.10 under the annual distribution plan, for a total of $193.13, $193.38
and $193.36, respectively. The Public Offering Price per Unit can vary on
a daily basis in accordance with fluctuations in the aggregate bid price
of the Bonds. (See the "Summary of Essential Information" and "Public
Offering--Offering Price" in Part B of this Prospectus.)

ESTIMATED LONG TERM RETURN AND ESTIMATED CURRENT RETURN. The rate
of return on an investment in Units of the Trust is measured in terms of
"Estimated Current Return" and "Estimated Long Term Return".

Estimated Long Term Return is calculated by: (1) computing the
yield to maturity or to an earlier call date (whichever results in a lower
yield) for each Bond in the Trust's portfolio in accordance with accepted
bond practices, which practices take into account not only the interest
payable on the Bond but also the amortization of premiums or accretion of
discounts, if any; (2) calculating the average of the yields for the Bonds
in the Trust's portfolio by weighing each Bond's yield by the market value
of the Bond and by the amount of time remaining to the date to which the
Bond is priced (thus creating an average yield for the portfolio of the
Trust); and (3) reducing the average yield for the portfolio of the Trust
in order to reflect estimated fees and expenses of the Trust and the
maximum sales charge paid by investors. The resulting Estimated Long Term
Return represents a measure of the return to investors earned over the
estimated life of the Trust. (For the Estimated Long Term Return to
Certificateholders under the monthly, semi-annual and annual distribution
plans, see "Summary of Essential Information".)

The Estimated Net Annual Interest Income per Unit of the Trust will
vary with changes in the fees and expenses of the Trustee and the
Evaluator applicable to the Trust and with the redemption, maturity, sale
or other disposition of the Bonds in the Trust. The Public Offering Price
will vary with changes in the bid prices of the Bonds. Therefore, there
is no assurance that the present Estimated Current Return or Estimated
Long Term Return will be realized in the future. (For the Estimated
Current Return to Certificateholders under the monthly, semi-annual and
annual distribution plans, see "Summary of Essential Information". See
"Estimated Long Term Return and Estimated Current Return" in Part B of
this Prospectus.)

A schedule of cash flow projections is available from the Sponsor
upon request.

<PAGE>

MUNICIPAL SECURITIES TRUST
SERIES 4

SUMMARY OF ESSENTIAL INFORMATION AS OF DECEMBER 31, 1993

Date of Deposit: June 27, 1980 Minimum Principal Distribution:
Principal Amount of Bonds ...$1,420,000 $1.00 per Unit.
Number of Units .............9,054 Weighted Average Life
Fractional Undivided Inter- to Maturity: 19.6 Years.
est in Trust per Unit .....1/9054 Minimum Value of Trust:
Principal Amount of Trust may be terminated if
Bonds per Unit ............$156.84 value of Trust is less than
Secondary Market Public $4,000,000 in principal amount
Offering Price** of Bonds.
Aggregate Bid Price Mandatory Termination Date:
of Bonds in Trust .......$1,541,364+++ The earlier of December 31,
Divided by 9,054 Units ....$170.24 2028 or the disposition of the
Plus Sales Charge of 4.5% last Bond in the Trust.
of Public Offering Price $8.02 Trustee***: The Bank of New
Public Offering Price York.
per Unit ................$178.26+ Trustee's Annual Fee: Monthly
Redemption and Sponsor's plan $1.08 per $1,000; semi-
Repurchase Price annual plan $.60 per $1,000;
per Unit ..................$170.24+ and annual plan is $.40 per
+++ $1,000.
++++ Evaluator: Kenny S&P Evaluation
Excess of Secondary Market Services.
Public Offering Price Evaluator's Fee for Each
over Redemption and Evaluation: Minimum of $35
Sponsor's Repurchase plus $.25 per each issue of
Price per Unit ............$8.02++++ Bonds in excess of 50 issues
Difference between Public (treating separate maturities
Offering Price per Unit as separate issues).
and Principal Amount per Sponsor: Bear, Stearns & Co.
Unit Premium/(Discount) ...$21.42 Inc.
Evaluation Time: 4:00 p.m.
New York Time.

PER UNIT INFORMATION BASED UPON INTEREST DISTRIBUTION PLAN ELECTED

Monthly Semi-Annual Annual
Option Option Option

Gross annual interest income# .........$13.16 $13.16 $13.16
Less estimated annual fees and
expenses ............................ .93 .74 .70
Estimated net annual interest ______ ______ ______
income (cash)# ......................$12.23 $12.42 $12.46
Estimated interest distribution# ...... 1.01 6.21 12.46
Estimated daily interest accrual# ..... .0339 .0345 .0346
Estimated current return#++ ........... 6.86% 6.97% 6.99%
Estimated long term return++ .......... 6.93% 7.04% 7.06%
Record dates .......................... 1st of Dec. 1 and Dec. 1
each month June 1
Interest distribution dates ........... 15th of Dec. 15 and Dec. 15
each month June 15

<PAGE>

* The Date of Deposit is the date on which the Trust Agreement was
signed and the deposit of the Bonds with the Trustee made.

** For information regarding offering price per unit and applicable
sales charge under the Total Reinvestment Plan, see "Total
Reinvestment Plan" in Part B of this Prospectus.

+ Plus accrued interest to expected date of settlement (approximately
five business days after purchase) of $14.87 monthly, $15.12 semi-
annually and $15.10 annually.

++++ See "Comparison of Public Offering Price, Sponsor's Repurchase Price
and Redemption Price" in Part B of this Prospectus.

# Does not include income accrual from original issue discount bonds,
if any.

<PAGE>

INFORMATION REGARDING THE TRUST
AS OF DECEMBER 31, 1993

DESCRIPTION OF PORTFOLIO*

The portfolio of the Trust consists of 5 issues representing
obligations of issuers located in 4 states. The Sponsor has participated
as a sole underwriter or manager, co-manager or member of an underwriting
syndicate from which 20.5% of the initial aggregate principal amount of
the Bonds were acquired. None of the Bonds are obligations of state and
local housing authorities; approximately 26.8% are hospital revenue bonds;
none are issued in connection with the financing of nuclear generating
facilities; and none are "mortgage subsidy" bonds. All of the Bonds in
the Trust are subject to redemption prior to their stated maturity dates
pursuant to sinking fund or optional call provisions. The Bonds may also
be subject to other calls, which may be permitted or required by events
which cannot be predicted (such as destruction, condemnation, termination
of a contract, or receipt of excess or unanticipated revenues). None of
the Bonds are general obligation bonds. Five issues representing
$1,420,000 of the principal amount of the Bonds are payable from the
income of a specific project or authority and are not supported by the
issuer's power to levy taxes. The portfolio is divided for purpose of
issue as follows: Electric Power 1, Federally Subsidized Mortgage 1,
Hospital 2 and Pollution Control 1. For an explanation of the
significance of these factors see "The Trust--Portfolio" in Part B of this
Prospectus.

* Changes in the Trust Portfolio: From January 1, 1994 to March 24,
1994, the entire principal amounts of the Bonds in portfolio
nos. 1b, 2b, 3b and 5 have been called and are no longer contained
in the Trust. 30 Units have been redeemed from the Trust.

<PAGE>

As of December 31, 1993, none of the Bonds were original issue
discount bonds. Approximately 18.3% of the aggregate principal amount of
the Bonds in the Trust were purchased at a discount from par value at
maturity, approximately 81.7% were purchased at a premium and none were
purchased at par. For an explanation of the significance of these factors
see "Discount and Zero Coupon Bonds" in Part B of this Prospectus.

None of the Bonds in the Trust are subject to the federal individual
alternative minimum tax under the Tax Reform Act of 1986. See "Tax
Status" in Part B of this Prospectus.

<PAGE>
FINANCIAL AND STATISTICAL INFORMATION

Selected data for each Unit outstanding for the periods listed below:

December 31, 1991 9,505 $471.78 $41.08 $41.46 $41.56$ 45.81
December 31, 1992 9,391 183.50 30.34 30.65 30.73 284.42
December 31, 1993 9,054 185.17 11.99 12.24 12.28 -0-

<PAGE>
Independent Auditors' Report

The Sponsor, Trustee and Certificateholders
Municipal Securities Trust, Series 4:

We have audited the accompanying statement of net assets, including the
portfolio, of Municipal Securities Trust, Series 4 as of December 31, 1993,
and the related statements of operations, and changes in net assets for
each of the years in the three year period then ended. These financial
statements are the responsibility of the Trustee (see note 2). Our
responsibility is to express an opinion on these financial statements based
on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
Our procedures included confirmation of securities owned as of December 31,
1993, by correspondence with the Trustee. An audit also includes assessing
the accounting principles used and significant estimates made by management,
as well as evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Municipal Securities
Trust, Series 4 as of December 31, 1993, and the results of its operations
and the changes in its net assets for each of the years in the three year
period then ended in conformity with generally accepted accounting
principles.

KPMG Peat Marwick

New York, New York
March 31, 1994
<PAGE>

Statement of Net Assets

December 31, 1993

Investments in marketable securities,
at market value (cost $1,370,126) $ 1,552,765

Accrued interest 56,368
Cash 67,785
Other assets 124,153
---------

Accrued expenses 354
---------
---------
Total liabilities 354
---------

Excess of other assets over total liabilities 123,799
-----------

Net assets ( 9,054 units of fractional undivided
interest outstanding, $185.17 per unit) $ 1,676,564
===========

See accompanying notes to financial statements.
<PAGE>
<TABLE>
Statements of Operations
<CAPTION>
Years ended December 31,
--------- --- --------- --- ----------
1993 1992 1991
--------- --------- ----------
<S> <C> <C> <C>
Investment income - interest $ 120,211 277,256 400,117
--------- --------- ----------

Expenses:
Trustee's fees 4,371 6,300 7,405
Evaluator's fees 3,298 3,307 2,806
--------- --------- ----------

Total expenses 7,669 9,607 10,211
--------- --------- ----------

Investment income, net 112,542 267,649 389,906
--------- --------- ----------

Realized and unrealized gain
(loss) on investments:
Net realized gain (loss) on
bonds sold or called (537) (31,838) 9,026
Unrealized appreciation
(depreciation) for the year 16,126 14,860 (443)
--------- --------- ----------

Net gain (loss)
on investments 15,589 (16,978) 8,583
--------- --------- ----------

Net increase in net
assets resulting
from operations $ 128,131 250,671 398,489
========= ========= ==========

See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>

Statements of Changes in Net Assets
<CAPTION>
Years ended December 31,
--------------- -- ------------ -- ----------
1993 1992 1991
--------------- ------------ ----------
<S> <C> <C> <C>
Operations:
Investment income, net $ 112,542 267,649 389,906
Net realized gain (loss) on
bonds sold or called (537) (31,838) 9,026
Unrealized appreciation
(depreciation) for the year 16,126 14,860 (443)
--------------- ------------ ----------

Net increase in net
assets resulting
from operations 128,131 250,671 398,489
--------------- ------------ ----------

Distributions to Certificateholders:
Investment income 111,795 287,610 392,515
Principal - 2,680,945 436,124

Redemptions:
Interest 5,229 2,016 2,306
Principal 57,746 41,189 59,775
--------------- ------------ ----------

Total distributions
and redemptions 174,770 3,011,760 890,720
--------------- ------------ ----------

Total decrease (46,639) (2,761,089) (492,231)

Net assets at beginning of year 1,723,203 4,484,292 4,976,523
--------------- ------------ ----------

Net assets at end of year (including
undistributed net investment
income of $135,200, $139,682
and $161,659, respectively) $ 1,676,564 1,723,203 4,484,292
=============== ============ ==========

See accompanying notes to financial statements.

</TABLE>
<PAGE>

MUNICIPAL SECURITIES TRUST, SERIES 4

Notes to Financial Statements

December 31, 1993, 1992, and 1991

(1) Organization

Municipal Securities Trust, Series 4 (Trust) was organized on June
27, 1980 by Bear, Stearns & Co. Inc. (Sponsor) under the laws of the
State of New York by a Trust Indenture and Agreement, and is
registered under the Investment Company Act of 1940.

(2) Summary of Significant Accounting Policies

The Bank of New York (Trustee) has custody of and responsibility for
the accounting records and financIal statements of the Trust and is
responsible for establishing and maintaining a system of internal
control related thereto.

Investments are carried at market value which is determined by either
Standard & Poor's Corporation or Moody's Investors Service, Inc.
(Evaluator) as discussed in Footnotes to Portfolio. The market value
of the investments is based upon the bid prices for the bonds at the
end of the year, except that the market value on the date of deposit
represents the cost to the Trust based on the offering prices for
investments at that date. The difference between cost and market
value is reflected as unrealized appreciation (depreciation) of
investments. Securities transactions are recorded on the trade date.
Realized gains (losses) from securities transactions are determined
on the basis of average cost of the securities sold or redeemed.

(3) Income Taxes

The Trust is not subject to Federal income taxes as provided for by
the Internal Revenue Code.

(4) Trust Administration

The fees and expenses of the Trust are incurred and paid on the basis
set forth under "Trust Expenses and Charges" in Part B of this
Prospectus.

The Trust Indenture and Agreement provides for interest distributions
as often as monthly (depending upon the distribution plan elected by
the Certificateholders).

See "Financial and Statistical Information" in Part A of this
Prospectus for the amounts of per unit distributions during the years
ended December 31, 1993, 1992 and 1991.

The Trust Indenture and Agreement also requires the Trust to redeem
units tendered. 337, 114, and 121 units were redeemed during the
years ended December 31, 1993, 1992, and 1991, respectively.

(5) Net Assets

At December 31, 1993, the net assets of the Trust represented the
interest of Certificateholders as follows:

Original cost to Certificateholders $ 10,316,488
Less initial gross underwriting commission (464,200)

9,852,288

Accumulated cost of bonds sold or called (8,482,162)
Net unrealized appreciation 182,639
Undistributed net investment income 135,200
Distributions in excess of proceeds
from bonds sold or called (11,401)

Total $ 1,676,564

The original cost to Certificateholders, less the initial gross
underwriting commission, represents the aggregate initial public offering
price net of the applicable sales charge on 10,000 units of fractional
undivided interest of the Trust as of the date of deposit.

<PAGE>
<TABLE>
MUNICIPAL SECURITIES TRUST, SERIES 4

Portfolio
December 31, 1993
<CAPTION>
Port- Aggregate Coupon Rate/ Redemption Feature
folio Principal Name of Issuer Ratings Date(s) of S.F.--Sinking Fund Market
No. Amount and Title of Bonds (1) Maturity(2) Ref. --Refunding (2)(6) Value(3)
-- ---------- --------------------- ------ ------------ ----------------------- ---------
<S> <C> <C> <C> <C> <C> <C>
1a $ 230,000 Jacksonville Health AAA 9.125% Currently @ 100 S.F. $ 267,311
Facilities Authority, 1/01/2003 None
Florida, Health
Facilities Revenue
Bonds, Series 1980,
St. Vincent's Medical
Center, Inc.

1b 20,000 Jacksonville Health AAA 9.125 Currently @ 100 S.F. 20,000
Facilities Authority, 1/01/2003 1/01/94 @ 100 Ref.
Florida Health
Facilities Revenue
Bonds, Series 1980,
St. Vincent's Medical
Center, Inc.

2a 125,000 Jacksonville Health AAA 9.125 Currently @ 100 S.F. 151,233
Facilities Authority, 1/01/2003 None
Florida Health
Facilities Revenue
Bonds, Series 1980,
St. Catherine Laboure
Manor, Inc.

2b 5,000 Jacksonville Health AAA 9.125 Currently @ 100 S.F. 5,000
Facilities Authority, 1/01/2003 1/01/94 @ 100 Ref.
Florida Health
Facilities Revenue
Bonds, Series 1980,
St. Catherine Laboure
Manor, Inc.

3a 765,000 New Jersey Economic AAA 8.875 Currently @ 100 S.F. 833,850
Development Authority 1/15/2020 None
Economic Development
Senior Revenue Bonds
(Lakewood of Voorhees
FHA Insured Project)
1980 Series A

3b 15,000 New Jersey Economic AAA 8.875 Currently @ 100 S.F. 15,000
Development Authority 1/15/2020 1/17/94 @ 100 Ref.
Economic Development
Senior Revenue Bonds
(Lakewood of Voorhees
FHA Insured Project)
1980 Series A

4 150,000 South Carolina Public A+ 5.875 7/01/99 @ 100 S.F. 150,081
Service Authority 7/01/2018 2/01/94 @ 100.5 Ref.
Electric System
Expansion, 1978
Series

5 110,000 Grant County South AA- 5.900 2/01/93 @ 100 S.F. 110,290
Dakota Pollution 2/01/2004 2/01/94 @ 100 Ref.
Control Revenue,
Otter Tall Power Co.
Series 1974

---------- ---------
$ 1,420,000 $ 1,552,765
========== =========

See accompanying footnotes to portfolio and notes to the financial statements.
</TABLE>
<PAGE>
MUNICIPAL SECURITIES TRUST, SERIES 4

Footnotes to Portfolio

December 31, 1993

(3) At December 31, 1993, the net unrealized appreciation of all the
bonds was comprised of the following:

Gross unrealized appreciation $ 183,101
Gross unrealized depreciation (462)

Net unrealized appreciation $ 182,639

(4) The annual interest income, based upon bonds held at December 31,
1993, to the Trust is $119,203.

(5) Bonds sold or called after December 31, 1993 are noted in a footnote
"Changes in Trust Portfolio" under "Description of Portfolio" in Part
A of this Prospectus.

(6) The Bonds may also be subject to other calls, which may be permitted
or required by events which cannot be predicted (such as destruction,
condemnation, termination of a contract, or receipt of excess or
unanticipated revenues).
<PAGE>

Note: Part A of This Prospectus May Not Be
Distributed Unless Accompanied by Part B.

MUNICIPAL SECURITIES TRUST

SERIES 5

__________________________________________________________________

The Trust is a unit investment trust designated Series 5 ("Municipal
Trust") with an underlying portfolio of long-term tax-exempt bonds issued
by or on behalf of states, municipalities and public authorities, and was
formed to preserve capital and to provide interest income (including,
where applicable, earned original issue discount) which, in the opinions
of bond counsel to the respective issuers, is, with certain exceptions,
currently exempt from regular Federal income tax (including where
applicable earned original discount) under existing law but may be subject
to state and local taxes. Such interest income may, however, be a
specific preference item for purposes of Federal individual and/or
corporate alternative minimum tax. Investors may recognize taxable
capital gain upon maturity or earlier redemption of the underlying bonds.
(See "Tax Status" and "The Trust--Portfolio" in Part B of this
Prospectus.) The Sponsor is Bear, Stearns & Co. Inc. The value of the
Units of the Trust will fluctuate with the value of the underlying bonds.
Minimum purchase: 1 Unit.

__________________________________________________________________

Investors should retain both parts of this
Prospectus for future reference.

__________________________________________________________________

Prospectus Part A Dated April 29, 1994

<PAGE>

THE TRUST. The Trust is a unit investment trust formed to preserve
capital and to provide interest income (including, where applicable,
earned original issue discount) which, in the opinions of bond counsel to
the respective issuers, is, with certain exceptions, currently exempt from
regular federal income tax under existing law through investment in a
fixed, diversified portfolio of long-term bonds (the "Bonds") issued by or
on behalf of states, municipalities and public authorities. A Trust
designated as a short/intermediate-term trust must have a dollar-weighted
average portfolio maturity of more than two years but less than five
years; a Trust designated as an intermediate-term trust must have a
dollar-weighted average portfolio maturity of more than three years but
not more than ten years; a Trust designated as an intermediate/long-term
trust must have a dollar-weighted average portfolio maturity of more than
ten years but less than fifteen years; and a Trust designated as a long-
term trust must have a dollar-weighted average portfolio maturity of more
than ten years. Although the Supreme Court has determined that Congress
has the authority to subject interest on bonds such as the Bonds in the
Trust to regular federal income taxation, existing law excludes such
interest from regular federal income tax. Such interest income may,
however, be subject to the federal corporate alternative minimum tax and
to state and local taxes. (See "Description of Portfolio" in this Part A
for a description of those Bonds which pay interest income subject to the
federal individual alternative minimum tax. See also "Tax Status" in
Part B of this Prospectus.) Some of the Bonds in the portfolio may be
"Zero Coupon Bonds", which are original issue discount bonds that provide
for payment at maturity at par value, but do not provide for the payment
of any current interest. Some of the Bonds in the portfolio may have been
purchased at an aggregate premium over par. Some of the Bonds in the
Trust have been issued with optional refunding or refinancing provisions
("Refunded Bonds") whereby the issuer of the Bond has the right to call
such Bond prior to its stated maturity date (and other than pursuant to
sinking fund provisions) and to issue new bonds ("Refunding Bonds") in
order to finance the redemption. Issuers typically utilize refunding
calls in order to take advantage of lower interest rates in the
marketplace. Some of these Refunded Bonds may be called for redemption
pursuant to pre-refunding provisions ("Pre-Refunded Bonds") whereby the
proceeds from the issue of the Refunding Bonds are typically invested in
government securities in escrow for the benefit of the holders of the Pre-
Refunded Bonds until the refunding call date. Usually, Pre-Refunded Bonds
will bear a triple-A rating because of this escrow. The issuers of Pre-
Refunded Bonds must call such Bonds on their refunding call date.
Therefore, as of such date, the Trust will receive the call price for such
bonds but will cease receiving interest income with respect to them. For
a list of those Bonds which are Pre-Refunded Bonds, if any, as of the
Evaluation Date, see "Notes to Financial Statements" in this Part A. All
of the Bonds in the Trust were rated "A" or better by Standard & Poor's
Corporation or Moody's Investors Service, Inc. at the time originally
deposited in the Trust. For a discussion of the significance of such
ratings see "Description of Bond Ratings" in Part B of this Prospectus and
for a list of ratings on the Evaluation Date see the "Portfolio". The
payment of interest and preservation of capital are, of course, dependent
upon the continuing ability of the issuers of the Bonds to meet their
obligations. There can be no assurance that the Trust's objectives will
be achieved. Investment in the Trust should be made with an understanding
of the risks which an investment in long-term fixed rate obligations may
entail, including the risk that the value of the underlying portfolio will
decline with increases in interest rates, and that the value of Zero
Coupon Bonds is subject to greater fluctuations than coupon bonds in
response to changes in interest rates. Each Unit in the Trust represents
a 1/9473rd undivided interest in the principal and net income of the
Trust. The principal amount of Bonds deposited in the Trust per Unit is
reflected in the Summary of Essential Information. (See "The Trust--
Organization" in Part B of this Prospectus.) The Units being offered
hereby are issued and outstanding Units which have been purchased by the
Sponsor in the secondary market.

PUBLIC OFFERING PRICE. The secondary market Public Offering Price
of each Unit is equal to the aggregate bid price of the Bonds in the Trust
divided by the number of Units outstanding, plus a sales charge of 4.5% of
the Public Offering Price, which is the same as 4.712% of the net amount
invested in Bonds per Unit. In addition, accrued interest to expected
date of settlement is added to the Public Offering Price. If Units had
been purchased on the Evaluation Date, the Public Offering Price per Unit
would have been $181.40 plus accrued interest of $20.26 under the monthly
distribution plan, $21.31 under the semi-annual distribution plan and
$21.05 under the annual distribution plan, for a total of $201.66, $202.71
and $202.45, respectively. The Public Offering Price per Unit can vary on
a daily basis in accordance with fluctuations in the aggregate bid price
of the Bonds. (See the "Summary of Essential Information" and "Public
Offering--Offering Price" in Part B of this Prospectus.)

ESTIMATED LONG TERM RETURN AND ESTIMATED CURRENT RETURN. The rate
of return on an investment in Units of the Trust is measured in terms of
"Estimated Current Return" and "Estimated Long Term Return".

Estimated Long Term Return is calculated by: (1) computing the
yield to maturity or to an earlier call date (whichever results in a lower
yield) for each Bond in the Trust's portfolio in accordance with accepted
bond practices, which practices take into account not only the interest
payable on the Bond but also the amortization of premiums or accretion of
discounts, if any; (2) calculating the average of the yields for the Bonds
in the Trust's portfolio by weighing each Bond's yield by the market value
of the Bond and by the amount of time remaining to the date to which the
Bond is priced (thus creating an average yield for the portfolio of the
Trust); and (3) reducing the average yield for the portfolio of the Trust
in order to reflect estimated fees and expenses of the Trust and the
maximum sales charge paid by investors. The resulting Estimated Long Term
Return represents a measure of the return to investors earned over the
estimated life of the Trust. (For the Estimated Long Term Return to
Certificateholders under the monthly, semi-annual and annual distribution
plans, see "Summary of Essential Information".)

The Estimated Net Annual Interest Income per Unit of the Trust will
vary with changes in the fees and expenses of the Trustee and the
Evaluator applicable to the Trust and with the redemption, maturity, sale
or other disposition of the Bonds in the Trust. The Public Offering Price
will vary with changes in the bid prices of the Bonds. Therefore, there
is no assurance that the present Estimated Current Return or Estimated
Long Term Return will be realized in the future. (For the Estimated
Current Return to Certificateholders under the monthly, semi-annual and
annual distribution plans, see "Summary of Essential Information". See
"Estimated Long Term Return and Estimated Current Return" in Part B of
this Prospectus.)

A schedule of cash flow projections is available from the Sponsor
upon request.

<PAGE>

MUNICIPAL SECURITIES TRUST

SERIES 5

SUMMARY OF ESSENTIAL INFORMATION AS OF DECEMBER 31, 1993

Date of Deposit: July 29, 1980 Minimum Principal Distribution:
Principal Amount of Bonds ...$1,555,000 $1.00 per Unit.
Number of Units .............9,473 Weighted Average Life
Fractional Undivided Inter- to Maturity: 11.5 Years.
est in Trust per Unit .....1/9473 Minimum Value of Trust:
Principal Amount of Trust may be terminated if
Bonds per Unit ............$164.15 value of Trust is less than
Secondary Market Public $4,000,000 in principal amount
Offering Price** of Bonds.
Aggregate Bid Price Mandatory Termination Date:
of Bonds in Trust .......$1,641,134+++ The earlier of December 31,
Divided by 9,473 Units ....$173.24 2028 or the disposition of the
Plus Sales Charge of 4.5% last Bond in the Trust.
of Public Offering Price $8.16 Trustee***: The Bank of New
Public Offering Price York.
per Unit ................$181.40+ Trustee's Annual Fee: Monthly
Redemption and Sponsor's plan $1.08 per $1,000; semi-
Repurchase Price annual plan $.60 per $1,000;
per Unit ..................$173.24+ and annual plan is $.40 per
+++ $1,000.
++++ Evaluator: Kenny S&P Evaluation
Excess of Secondary Market Services.
Public Offering Price Evaluator's Fee for Each
over Redemption and Evaluation: Minimum of $35
Sponsor's Repurchase plus $.25 per each issue of
Price per Unit ............$8.16++++ Bonds in excess of 50 issues
Difference between Public (treating separate maturities
Offering Price per Unit as separate issues).
and Principal Amount per Sponsor: Bear, Stearns & Co.
Unit Premium/(Discount) ...$17.25 Inc.
Evaluation Time: 4:00 p.m.
New York Time.

PER UNIT INFORMATION BASED UPON INTEREST DISTRIBUTION PLAN ELECTED

Monthly Semi-Annual Annual
Option Option Option

Gross annual interest income# .........$14.05 $14.05 $14.05
Less estimated annual fees and
expenses ............................ 1.00 .75 .69
Estimated net annual interest
income (cash)# ......................$13.05 $13.30 $13.36
Estimated interest distribution# ...... 1.08 6.65 13.36
Estimated daily interest accrual# ..... .0362 .0369 .0371
Estimated current return#++ ........... 7.19% 7.33% 7.36%
Estimated long term return++ .......... 6.40% 6.54% 6.57%
Record dates .......................... 1st of Dec. 1 and Dec. 1
each month June 1
Interest distribution dates ........... 15th of Dec. 15 and Dec. 15
each month June 15

<PAGE>
* The Date of Deposit is the date on which the Trust Agreement was
signed and the deposit of the Bonds with the Trustee made.

** For information regarding offering price per unit and applicable
sales charge under the Total Reinvestment Plan, see "Total
Reinvestment Plan" in Part B of this Prospectus.

+ Plus accrued interest to expected date of settlement (approximately
five business days after purchase) of $20.26 monthly, $21.31 semi-
annually and $21.05 annually.

++++ See "Comparison of Public Offering Price, Sponsor's Repurchase Price
and Redemption Price" in Part B of this Prospectus.

# Does not include income accrual from original issue discount bonds,
if any.

<PAGE>

INFORMATION REGARDING THE TRUST
AS OF DECEMBER 31, 1993

DESCRIPTION OF PORTFOLIO*

The portfolio of the Trust consists of 4 issues representing
obligations of issuers located in 3 states. The Sponsor has participated
as a sole underwriter or manager, co-manager or member of an underwriting
syndicate from which 36% of the initial aggregate principal amount of the
Bonds were acquired. Approximately 88.4% of the Bonds are obligations of
state and local housing authorities; approximately 5.1% are hospital
revenue bonds; none are issued in connection with the financing of nuclear
generating facilities; and none are "mortgage subsidy" bonds. All of the
Bonds in the Trust are subject to redemption prior to their stated
maturity dates pursuant to sinking fund or optional call provisions. The
Bonds may also be subject to other calls, which may be permitted or
required by events which cannot be predicted (such as destruction,
condemnation, termination of a contract, or receipt of excess or
unanticipated revenues). None of the Bonds are general obligation bonds.
Four issues representing $1,555,000 of the principal amount of the Bonds
are payable from the income of a specific project or authority and are not
supported by the issuer's power to levy taxes. The portfolio is divided
for purpose of issue as follows: Federally Subsidized Mortgage 2,
Hospital 1 and Industrial Development Authority 1. For an explanation of
the significance of these factors see "The Trust--Portfolio" in Part B of
this Prospectus.

* Changes in the Trust Portfolio: From January 1, 1994 to March 24,
1994, the entire principal amount of the Bonds in portfolio no. 1b
has been called and is no longer contained in the Trust. 58 Units
have been redeemed from the Trust.

<PAGE>

As of December 31, 1993, none of the Bonds were original issue
discount bonds. Approximately 38.6% of the aggregate principal amount of
the Bonds in the Trust were purchased at a discount from par value at
maturity, approximately 5.1% were purchased at a premium and approximately
56.3% were purchased at par. For an explanation of the significance of
these factors see "Discount and Zero Coupon Bonds" in Part B of this
Prospectus.

None of the Bonds in the Trust are subject to the federal individual
alternative minimum tax under the Tax Reform Act of 1986. See "Tax
Status" in Part B of this Prospectus.

<PAGE>
FINANCIAL AND STATISTICAL INFORMATION

Selected data for each Unit outstanding for the periods listed below:

December 31, 1991 9,708 $403.69 $37.09 $37.46 $37.57$113.21
December 31, 1992 9,473 227.54 21.42 21.71 21.80 175.09
December 31, 1993 9,473 211.37 15.13 15.42 15.48 19.47

Independent Auditors' Report

The Sponsor, Trustee and Certificateholders
Municipal Securities Trust, Series 5:

We have audited the accompanying statement of net assets, including the
portfolio, of Municipal Securities Trust, Series 5 as of December 31,
1993, and the related statements of operations, and changes in net assets
for each of the years in the three year period then ended. These
financial statements are the responsibility of the Trustee (see note 2).
Our responsibility is to express an opinion on these financial statements
based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as
of December 31, 1993, by correspondence with the Trustee. An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable
basis for our opinion.

In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Municipal
Securities Trust, Series 5 as of December 31, 1993, and the results of
its operations and the changes in its net assets for each of the years
in the three year period then ended in conformity with generally accepted
accounting principles.

KPMG Peat Marwick

New York, New York
March 31, 1994

<PAGE>

Statement of Net Assets

December 31, 1993

Investments in marketable securities,
at market value (cost $1,399,800) $ 1,641,093

Accrued interest 54,853
Cash 306,753
--------
Other assets 361,606
--------

Accrued expenses 363
--------
Total liabilities 363
--------

Excess of other assets over total liabilities 361,243
------------

Net assets (9,473 units of fractional undivided
interest outstanding, $211.37 per unit) $ 2,002,336
============

See accompanying notes to financial statements.

<PAGE>
<TABLE>
Statements of Operations
<CAPTION>
Years ended December 31,
-------- --- ---------- --- -----------
1993 1992 1991
-------- ---------- -----------
<S> <C> <C> <C>
Investment income - interest $ 151,586 204,549 363,941
-------- ---------- -----------

Expenses:
Trustee's fees 4,958 5,806 7,450
Evaluator's fees 3,298 3,306 3,358
-------- ---------- -----------

Total expenses 8,256 9,112 10,808
-------- ---------- -----------

Investment income, net 143,330 195,437 353,133
-------- ---------- -----------

Realized and unrealized gain
(loss) on investments:
Net realized gain on
bonds sold or called 70,450 74,613 34,675
Unrealized appreciation
(depreciation) for the year (38,137) (72,334) 104,262
-------- ---------- -----------

Net gain on
investments 32,313 2,279 138,937
-------- ---------- -----------

Net increase in net
assets resulting
from operations $ 175,643 197,716 492,070
======== ========== ===========

See accompanying notes to financial statements.
</TABLE>

<PAGE>

<TABLE>

Statements of Changes in Net Assets

<CAPTION>
Years ended December 31,
------------ --- --------------- --- -------------
1993 1992 1991
------------ --------------- -------------
<S> <C> <C> <C>
Operations:
Investment income, net $ 143,330 195,437 353,133
Net realized gain on
bonds sold or called 70,450 74,613 34,675
Unrealized appreciation
(depreciation) for the year (38,137) (72,334) 104,262
------------ --------------- -------------

Net increase in net
assets resulting
from operations 175,643 197,716 492,070
------------ --------------- -------------

Distributions to Certificateholders:
Investment income 144,384 207,395 361,571
Principal 184,439 1,691,401 1,099,043

Redemptions:
Interest - 4,983 1,472
Principal - 57,411 31,792
------------ --------------- -------------

Total distributions
and redemptions 328,823 1,961,190 1,493,878
------------ --------------- -------------

Total decrease (153,180) (1,763,474) (1,001,808)

Net assets at beginning of year 2,155,516 3,918,990 4,920,798
------------ --------------- -------------

Net assets at end of year (including
undistributed net investment
income o$189,455, $190,509
and $207,450, respectively) $ 2,002,336 2,155,516 3,918,990
============ =============== =============

See accompanying notes to financial statements.
</TABLE>

<PAGE>

MUNICIPAL SECURITIES TRUST, SERIES 5

Notes to Financial Statements

December 31, 1993, 1992 and 1991

(1) Organization

Municipal Securities Trust, Series 5 (Trust) was organized on July
29, 1980 by Bear, Sterns & Co. Inc. (Sponsor) under the laws of the
State of New York by a Trust Indenture and Agreement, and is
registered under the Investment Company Act of 1940.

(2) Summary of Significant Accounting Policies

Investments are carried at market value which is determined by either
Standard & Poor's Corporation or Moody's Investors Service, Inc.
(Evaluator) as discussed in Footnotes to Portfolio. The market value
of the investments is based upon the bid prices for the bonds at the
end of the year, except that the market value on the date of deposit
represents the cost to the Trust based on the offering prices for
investments at that date. The difference between cost and market
value is reflected as unrealized appreciation (depreciation) of
investments. Securities transactions are recorded on the trade date.
Realized gains (losses) from securities transactions are determined
on the basis of average cost of the securities sold or redeemed.

(3) Income Taxes

The Trust is not subject to Federal income taxes as provided for by
the Internal Revenue Code.

(4) Trust Administration

The fees and expenses of the Trust are incurred and paid on the basis
set forth under "Trust Expenses and Charges" in Part B of this
Prospectus.

The Trust Indenture and Agreement provides for interest distributions
as often as monthly (depending upon the distribution plan elected by
the Certificateholders).

See "Financial and Statistical Information" in Part A of this
Prospectus for the amounts of per unit distributions during the years
ended December 31, 1993, 1992 and 1991.

The Trust Indenture and Agreement also requires the Trust to redeem
units tendered. No units were redeemed during the year ended
December 31, 1993. 235 and 66 units were redeemed during the years
ended December 31, 1992 and 1991, respectively.

(5) Net Assets

At December 31, 1993, the net assets of the Trust represented the
interest of Certificateholders as follows:

Original cost to Certificateholders $ 10,096,700
Less initial gross underwriting commission (454,300)

9,642,400

Accumulated cost of bonds sold or called (8,242,600)
Net unrealized appreciation 241,293
Undistributed net investment income 189,455
Undistributed proceeds from bonds sold or called 171,788

Total $ 2,002,336

The original cost to Certificateholders, less the initial gross
underwriting commission, represents the aggregate initial public offering
price net of the applicable sales charge on 10,000 units of fractional
undivided interest of the Trust as of the date of deposit.
<PAGE>

<TABLE>

MUNICIPAL SECURITIES TRUST, SERIES 5

Portfolio
December 31, 1993
<CAPTION>

Port- Aggregate Coupon Rate/ Redemption Feature
folio Principal Name of Issuer Ratings Date(s) of S.F.--Sinking Fund Market
No. Amount and Title of Bonds (1) Maturity(2) Ref.--Refunding (2)(6) Value(3)
------- ---------- --------------------- ------ ------------- ---------------------- ---------
<S> <C> <C> <C> <C> <C> <C>
1a $ 865,000 Hialeah Family NR 9.875% Currently @ 100 S.F. $ 924,581
Housing Corp., Inc. 1/01/2012 1/01/96 @ 105 Ref.
(Hialeah, Florida)
Section 8 1980
Assisted Mortgage
Revenue Bonds
(Meadowgreen Apts.
Project)

1b 10,000 Hialeah Family NR 9.875 Currently @ 100 S.F. 10,000
Housing Corp., Inc. 1/01/2012 1/01/94 @ 100 Ref.
(Hialeah, Florida)
Section 8 1980
Assisted Mortgage
Revenue Bonds
(Meadowgreen Apts.
Project)

2 80,000 Jacksonville Health AAA 9.125 Currently @ 100 S.F. 92,978
Facilities Authority, 1/01/2003 None
Florida, Health
Facilities Revenue
Bonds, Series 1980,
St. Vincent's Medical
Center, Inc.

3 500,000 Housing Authority of A1* 6.750 5/01/98 @ 100 S.F. 513,915
the County of DeKalb, 5/01/2009 5/01/94 @ 104 Ref.
Georgia First
Mortgage Revenue
Bonds (Series
1978-Section 8
Assisted Project)

4 100,000 Allegheny County, BAA3* 5.700 Currently @ 100 S.F. 99,619
Pennsylvania 8/01/2007 2/01/94 @ 100 Ref.
Industrial
Development
Authority, U.S. Steel
Corp., 1977 Issue,
Series B

---------- ---------
$ 1,555,000 $ 1,641,093
========== =========

See accompanying footnotes to the portfolio and notes to the financial statements.
</TABLE>

<PAGE>

MUNICIPAL SECURITIES TRUST, SERIES 5

Footnotes to Portfolio

December 31, 1993

(3) At December 31, 1993, the net unrealized appreciation of all the bonds
was comprised of gross unrealized appreciation of $241,293.

(4) The annual interest income, based upon bonds held at December 31, 1993,
to the Trust is $133,156.

(5) Bonds sold or called after December 31, 1993 are noted in a footnote
"Changes in Trust Portfolio" under "Description of Portfolio" in Part
A of this Prospectus.

Note: Part B of This Prospectus May Not Be
Distributed Unless Accompanied by Part A.

Please Read and Retain Both Parts
of This Prospectus for Future Reference.

MUNICIPAL SECURITIES TRUST

Prospectus Part B

Dated: April 29, 1994

THE TRUST

Organization

"Municipal Securities Trust" (the "Trust") consists of the "unit
investment trusts" designated as set forth in Part A.* The Trust was
created under the laws of the State of New York pursuant to a Trust
Indenture and Agreements** (collectively, the "Trust Agreement"), dated
the Date of Deposit, among Bear, Stearns & Co. Inc., as Sponsor, Kenny S&P
Evaluation Services, as Evaluator, and, depending on the particular Trust,
either The Bank of New York or United States Trust Company of New York, as
Trustee. The name of the Trustee for a particular Trust is contained in
the "Summary of Essential Information" in Part A. For a description of
the Trustee for a particular Trust, see "Trust Administration--The
Trustee."
* This Part B relates to the outstanding series of Municipal Securities
Trust or Municipal Securities Trust Discount Series as reflected in
Part A attached hereto.

** References in this Prospectus to the Trust Agreements are qualified
in their entirety by the respective Trust Indentures and Agreements
which are incorporated herein by reference.

<PAGE>

On the Date of Deposit the Sponsor deposited with the Trustee
long-term bonds and/or delivery statements relating to contracts for the
purchase of certain such bonds (the "Bonds") and cash or an irrevocable
letter of credit issued by a major commercial bank in the amount required
for such purchases. Thereafter, the Trustee, in exchange for the Bonds so
deposited, delivered to the Sponsor the Certificates evidencing the
ownership of all Units of the Trust.

The Trust consists of the bonds described under "The Trust" in
Part A of this Prospectus, the interest (including, where applicable
earned original discount) on which, in the opinions of bond counsel to the
respective issuers given at the time of original delivery of the Bonds, is
exempt from regular federal income tax under existing law.

Each "Unit" outstanding on the Evaluation Date represented an
undivided interest or pro rata share in the principal and interest of the
Trust in the per Unit ratio set forth under "Summary of Essential
Information" in Part A. To the extent that any Units are redeemed by the
Trustee, the fractional undivided interest or pro rata share in the Trust
represented by each unredeemed Unit will increase, although the actual
interest in the Trust represented by such fraction will remain unchanged.
Units will remain outstanding until redeemed upon tender to the Trustee by
Certificateholders, which may include the Sponsor or until the termination
of the Trust Agreement.

Objectives

The Trust, one of a series of similar but separate unit
investment trusts formed by the Sponsor, offers investors the opportunity
to participate in a portfolio of long-term tax-exempt bonds with a greater
diversification than they might be able to acquire themselves. The
objectives of the Trust are to preserve capital and to provide interest
income (including, where applicable, earned original issue discount)
which, in the opinions of bond counsel to the respective issuers given at
the time of original delivery of the Bonds, is, with certain exceptions,
exempt from regular federal income tax under existing law. Such interest
income may, however, be subject to the federal corporate alternative
minimum tax and to state and local taxes. An investor will realize
taxable income upon maturity or early redemption of the market discount
bonds in a Trust portfolio and will realize, where applicable, tax-exempt
income to the extent of the earned portion of interest, including original
issue discount earned on the bonds in a Trust portfolio. Investors should
be aware that there is no assurance the Trust's objectives will be
achieved as these objectives are dependent on the continuing ability of
the issuers of the Bonds to meet their interest and principal payment
requirements, on the continuing satisfaction of the Bonds of the
conditions required for the exemption of interest thereon from regular
federal income tax, and on the market value of the Bonds, which can be
affected by fluctuations in interest rates and other factors.

Since disposition of Units prior to final liquidation of the
Trust may result in an investor receiving less than the amount paid for
such Units (see "Comparison of Public Offering Price, Sponsor's Repurchase
Price and Redemption Price"), the purchase of a Unit should be looked upon
as a long-term investment. Neither the Trust nor the Total Reinvestment
Plan is designed to be a complete investment program.

Portfolio

All of the Bonds in the Trust were rated "A" or better by
Standard & Poor's Corporation or Moody's Investors Service, Inc. at the
time originally deposited in the Trust. For a list of the ratings of each
Bond on the Evaluation Date, see "Portfolio" in Part A.

For information regarding (i) the number of issues in the Trust,
(ii) the range of fixed maturities of the Bonds, (iii) the number of
issues payable from the income of a specific project or authority and
(iv) the number of issues constituting general obligations of a government
entity, see "The Trust" and "Portfolio" in Part A.

When selecting Bonds for the Trust, the following factors, among
others, were considered by the Sponsor on the Date of Deposit: (a) the
quality of the Bonds and whether such Bonds were rated "A" or better by
either Standard & Poor's Corporation or Moody's Investors Service, Inc.,
(b) the yield and price of the Bonds relative to other tax-exempt
securities of comparable quality and maturity, (c) income to the Certifi-
cateholders of the Trust and (d) the diversification of the Trust
portfolio, as to purpose of issue and location of issuer, taking into
account the availability in the market of issues which meet the Trust's
quality, rating, yield and price criteria. Subsequent to the Evaluation
Date, a Bond may cease to be rated or its rating may be reduced below that
specified above. Neither event requires an elimination of such Bond from
a Trust but may be considered in the Sponsor's determination to direct the
Trustee to dispose of the Bond. See "Portfolio Supervision". For an
interpretation of the bond ratings see "Description of Bond Ratings".

Housing Bonds. Some of the aggregate principal amount of the
Bonds may consist of obligations of state and local housing authorities
whose revenues are primarily derived from mortgage loans to rental housing
projects for low to moderate income families. Since such obligations are
usually not general obligations of a particular state or municipality and
are generally payable primarily or solely from rents and other fees,
adverse economic developments including failure or inability to increase
rentals, fluctuations of interest rates and increasing construction and
operating costs may reduce revenues available to pay existing obligations.
See "Description of Portfolio" in Part A for the amount of rental housing
bonds contained therein.

Hospital Revenue Bonds. Some of the aggregate principal amount
of the Bonds may consist of hospital revenue bonds. Ratings of hospital
bonds are often initially based on feasibility studies which contain
projections of occupancy levels, revenues and expenses. Actual experience
may vary considerably from such projections. A hospital's gross receipts
and net income will be affected by future events and conditions including,
among other things, demand for hospital services and the ability of the
hospital to provide them, physicians' confidence in hospital management
capability, economic developments in the service area, competition,
actions by insurers and governmental agencies and the increased cost and
possible unavailability of malpractice insurance. Additionally, a major
portion of hospital revenue typically is derived from federal or state
programs such as Medicare and Medicaid which have been revised
substantially in recent years and which are undergoing further review at
the state and federal level.

Proposals for significant changes in the health care system and
the present programs for third party payment of health care costs are
under consideration in Congress and many states. Future legislation or
changes in the areas noted above, among other things, would affect all
hospitals to varying degrees and, accordingly, any adverse change in these
areas may affect the ability of such issuers to make payment of principal
and interest on such bonds. See "Description of Portfolio" in Part A for
the amount of hospital revenue bonds contained therein.

Nuclear Power Facility Bonds. Certain Bonds may have been
issued in connection with the financing of nuclear generating facilities.
In view of recent developments in connection with such facilities,
legislative and administrative actions have been taken and proposed
relating to the development and operation of nuclear generating
facilities. The Sponsor is unable to predict whether any such actions or
whether any such proposals or litigation, if enacted or instituted, will
have an adverse impact on the revenues available to pay the debt service
on the Bonds in the portfolio issued to finance such nuclear projects.
See "Description of Portfolio" in Part A for the amount of bonds issued to
finance nuclear generating facilities contained therein.

Mortgage Subsidy Bonds. Certain Bonds may be "mortgage subsidy
bonds" which are obligations of which all or a significant portion of the
proceeds are to be used directly or indirectly for mortgages on owner-
occupied residences. Section 103A of the Internal Revenue Code of 1954,
as amended, provided as a general rule that interest on "mortgage subsidy
bonds" will not be exempt from Federal income tax. An exception is
provided for certain "qualified mortgage bonds." Qualified mortgage bonds
are bonds that are used to finance owner-occupied residences and that meet
numerous statutory requirements. These requirements include certain
residency, ownership, purchase price and target area requirements, ceiling
amounts for state and local issuers, arbitrage restrictions and (for bonds
issued after December 31, 1984) certain information reporting,
certification, public hearing and policy statement requirements. In the
opinions of bond counsel to the issuing governmental authorities, interest
on all the Bonds in a Trust that might be deemed "mortgage subsidy bonds"
will be exempt from Federal income tax when issued. See "Description of
Portfolio" in Part A for the amount of mortgage subsidy Bonds contained
therein.

Mortgage Revenue Bonds. Certain Bonds may be "mortgage revenue
bonds." Under the Internal Revenue Code of 1986, as amended (the "Code")
(and under similar provisions of the prior tax law) "mortgage revenue
bonds" are obligations the proceeds of which are used to finance owner-
occupied residences under programs which meet numerous statutory
requirements relating to residency, ownership, purchase price and target
area requirements, ceiling amounts for state and local issuers, arbitrage
restrictions, and certain information reporting certification, and public
hearing requirements. There can be no assurance that additional federal
legislation will not be introduced or that existing legislation will not
be further amended, revised, or enacted after delivery of these Bonds or
that certain required future actions will be taken by the issuing
governmental authorities, which action or failure to act could cause
interest on the Bonds to be subject to federal income tax. If any portion
of the Bonds proceeds are not committed for the purpose of the issue,
Bonds in such amount could be subject to earlier mandatory redemption at
par, including issues of Zero Coupon Bonds (see "Discount and Zero Coupon
Bonds"). See "Description of Portfolio" in Part A for the amount of
mortgage revenue bonds contained therein.

Private Activity Bonds. The portfolio of the Trust may contain
other Bonds which are "private activity bonds" (often called Industrial
Revenue Bonds ("IRBs") if issued prior to 1987) which would be primarily
of two types: (1) Bonds for a publicly owned facility which a private
entity may have a right to use or manage to some degree, such as an
airport, seaport facility or water system and (2) facilities deemed owned
or beneficially owned by a private entity but which were financed with
tax-exempt bonds of a public issuer, such as a manufacturing facility or a
pollution control facility. In the case of the first type, bonds are
generally payable from a designated source of revenues derived from the
facility and may further receive the benefit of the legal or moral
obligation of one or more political subdivisions or taxing jurisdictions.
In most cases of project financing of the first type, receipts or revenues
of the Issuer are derived from the project or the operator or from the
unexpended proceeds of the bonds. Such revenues include user fees,
service charges, rental and lease payments, and mortgage and other loan
payments.

The second type of issue will generally finance projects which
are owned by or for the benefit of, and are operated by, corporate
entities. Ordinarily, such private activity bonds are not general
obligations of governmental entities and are not backed by the taxing
power of such entities, and are solely dependent upon the creditworthiness
of the corporate user of the project or corporate guarantor.

The private activity bonds in the Trust have generally been
issued under bond resolutions, agreements or trust indentures pursuant to
which the revenues and receipts payable under the issuer's arrangements
with the users or the corporate operator of a particular project have been
assigned and pledged to the holders of the private activity bonds. In
certain cases a mortgage on the underlying project has been assigned to
the holders of the private activity bonds or a trustee as additional
security. In addition, private activity bonds are frequently directly
guaranteed by the corporate operator of the project or by another
affiliated company. See "Description of Portfolio" in Part A for the
amount of private activity bonds contained therein.

Litigation. Litigation challenging the validity under state
constitutions of present systems of financing public education has been
initiated in a number of states. Decisions in some states have been
reached holding such school financing in violation of state constitutions.
In addition, legislation to effect changes in public school financing has
been introduced in a number of states. The Sponsor is unable to predict
the outcome of the pending litigation and legislation in this area and
what effect, if any, resulting changes in the sources of funds, including
proceeds from property taxes applied to the support of public schools, may
have on the school bonds in a Trust.

To the Sponsor's knowledge, there is no litigation pending as of
the date of this Prospectus with respect to any Bonds which might
reasonably be expected to have a material adverse effect on a Trust. Such
litigation, as, for example, suits challenging the issuance of pollution
control revenue bonds under recently-enacted environmental protection
statutes, may affect the validity of such Bonds or the tax-free nature of
the interest thereon. At any time after the date of this Prospectus,
litigation may be instituted on a variety of grounds with respect to the
Bonds in a Trust. The Sponsor is unable to predict whether any such
litigation may be instituted or, if instituted, whether it might have a
material adverse effect on a Trust.

Other Factors. The Bonds in the Trust, despite their optional
redemption provisions which generally do not take effect until 10 years
after the original issuance dates of such bonds (often referred to as "ten
year call protection"), do contain provisions which require the issuer to
redeem such obligations at par from unused proceeds of the issue within a
stated period. In recent periods of declining interest rates there have
been increased redemptions of bonds, particularly housing bonds, pursuant
to such redemption provisions. In addition, the Bonds in the Trusts are
also subject to mandatory redemption in whole or in part at par at any
time that voluntary or involuntary prepayments of principal on the
underlying collateral are made to the trustee for such bonds or that the
collateral is sold by the bond issuer. Prepayments of principal tend to
be greater in periods of declining interest rates; it is possible that
such prepayments could be sufficient to cause a bond to be redeemed
substantially prior to its stated maturity date, earliest call date or
sinking fund redemption date.

The Bonds may also be subject to other calls, which may be
permitted or required by events which cannot be predicted (such as
destruction, condemnation, or termination of a contract.

In 1976 the federal bankruptcy laws were amended so that an
authorized municipal debtor could more easily seek federal court
protection to assist in reorganizing its debts so long as certain
requirements were met. Historically, very few financially troubled
municipalities have sought court assistance for reorganizing their debts;
notwithstanding, the Sponsors are unable to predict to what extent
financially troubled municipalities may seek court assistance in
reorganizing their debts in the future and, therefore, what effect, if
any, the applicable federal bankruptcy law provisions will have on the
Trusts.

The Trust may also include "moral obligation" bonds. Under
statutes applicable to such bonds, if an issuer is unable to meet its
obligations, the repayment of such bonds becomes a moral commitment but
not a legal obligation of the state or municipality in question. See
"Description of Portfolio" and "The Trust" in Part A of this Prospectus
for the amount of moral obligations bonds contained in the Trust.

Certain of the Bonds in the Trust are subject to redemption
prior to their stated maturity dates pursuant to sinking fund or call
provisions. A sinking fund is a reserve fund appropriated specifically
toward the retirement of a debt. A callable bond is one which is subject
to redemption or refunding prior to maturity at the option of the issuer.
A refunding is a method by which a bond is redeemed at or before maturity
from the proceeds of a new issue of bonds. In general, call provisions
are more likely to be exercised when the offering side evaluation of a
bond is at a premium over par than when it is at a discount from par. A
listing of the sinking fund and call provisions, if any, with respect to
each of the Bonds is contained under "Portfolio" in Part A of this
Prospectus. Certificateholders will realize a gain or loss on the early
redemption of such Bonds, depending upon whether the price of such Bonds
is at a discount from or at a premium over par at the time Certificate-
holders purchase their Units.

Neither the Sponsor nor the Trustee shall be liable in any way
for any default, failure or defect in any of the Bonds. Because certain
of the Bonds from time to time may be redeemed or will mature in
accordance with their terms or may be sold under certain circumstances, no
assurance can be given that a Trust will retain its present size and
composition for any length of time. The proceeds from the sale of a Bond
or the exercise of any redemption or call provision will be distributed to
Certificateholders on the next distribution date, except to the extent
such proceeds are applied to meet redemptions of Units. See "Trustee
Redemption".

Discount and Zero Coupon Bonds

The Municipal Discount Trust contains original issue discount
bonds. Some of the Bonds in the Municipal Trust may also be original
issue discount bonds. The original issue discount, which is the
difference between the initial purchase price of the Bonds and the face
value, is deemed to accrue on a daily basis and the accrued portion will
be treated as tax-exempt interest income for regular federal income tax
purposes. Upon sale or redemption, any gain realized that is in excess of
the earned portion of original issue discount will be taxable as capital
gain. (See "Tax Status".) The current value of an original issue
discount bond reflects the present value of its face amount at maturity.
The market value tends to increase more slowly in early years and in
greater increments as the Bonds approach maturity. Of these original
issue discount bonds, a portion of the aggregate principal amount of the
Bonds in the Trust are Zero Coupon Bonds. Zero Coupon Bonds do not
provide for the payment of any current interest and provide for payment at
maturity at face value unless sooner sold or redeemed. The market value
of Zero Coupon Bonds is subject to greater fluctuation than coupon bonds
in response to changes in interest rates. Zero Coupon Bonds generally are
subject to redemption at compound accreted value based on par value at
maturity. Because the issuer is not obligated to make current interest
payments, Zero Coupon Bonds may be less likely to be redeemed than coupon
bonds issued at a similar interest rate.

Some of the Bonds in the Trust may have been purchased at a
"market" discount from par value at maturity. This is because the coupon
interest rates on the discount bonds at the time they were purchased and
deposited in the Trust were lower than the current market interest rates
for newly issued bonds of comparable rating and type. At the time of
issuance the discount bonds were for the most part issued at then current
coupon interest rates. The current returns (coupon interest income as a
percentage of market price) of discount bonds will be lower than the
current returns of comparably rated bonds of similar type newly issued at
current interest rates because discount bonds tend to increase in market
value as they approach maturity and the full principal amount becomes
payable. A discount bond held to maturity will have a larger portion of
its total return in the form of capital gain and less in the form of tax-
exempt interest income than a comparable bond newly issued at current
market rates. Gain on the disposition of a Bond purchased at a market
discount generally will be treated as ordinary income, rather than capital
gain, to the extent of accrued market discount. Discount bonds with a
longer term to maturity tend to have a higher current return and a lower
current market value than otherwise comparable bonds with a shorter term
of maturity. If interest rates rise, the value of discount bonds will
decrease; and if interest rates decline, the value of discount bonds will
increase. The discount does not necessarily indicate a lack of market
confidence in the issuer.

PUBLIC OFFERING

Offering Price

The secondary market Public Offering Price per Unit is computed
by adding to the aggregate bid price of the Bonds in each Trust divided by
the number of Units outstanding, an amount based on the applicable sales
charge times such aggregate bid price of the Bonds in each Trust (see
"Public Offering Price" in Part A for the applicable sales charge for the
Trust). A proportionate share of accrued interest on the Bonds to the
expected date of settlement for the Units is added to the Public Offering
Price. Accrued interest is the accumulated and unpaid interest on a Bond
from the last day on which interest was paid and is initially accounted
for daily by the Trust at the daily rate set forth under "Summary of
Essential Information" in Part A. The secondary market Public Offering
Price can vary on a daily basis from the amount stated in Part A in
accordance with fluctuations in the prices of the Bonds. The price to be
paid by each investor will be computed on the basis of an evaluation made
on the day the Units are purchased. The aggregate bid price evaluation of
the Bonds is determined in the manner set forth under "Trustee
Redemption".

The Evaluator may obtain current prices for the Bonds from
investment dealers or brokers (including the Sponsor) that customarily
deal in tax-exempt obligations or from any other reporting service or
source of information which the Evaluator deems appropriate.

Accrued Interest

An amount of accrued interest which represents accumulated
unpaid or uncollected interest on a Bond from the last day on which
interest was paid thereon will be added to the Public Offering Price and
paid by the Certificateholder at the time the Units are purchased. Since
the Trust normally receives the interest on Bonds twice a year and the
interest on the Bonds in the Trust is accrued on a daily basis, the Trust
will always have an amount of interest accrued but not actually received
and distributed to Certificateholders. A Certificateholder will not
recover his proportionate share of accrued interest until the Units are
sold or redeemed, or the Trust is terminated. At that time, the Certifi-
cateholder will receive his proportionate share of the accrued interest
computed to the settlement date in the case of a sale or termination and
to the date of tender in the case of redemption.

Employee Discounts

Employees (and their immediate families) of Bear, Stearns & Co.
Inc. and of any underwriter of a Trust, pursuant to employee benefit
arrangements, may purchase Units of a Trust at a price equal to the bid
side evaluation of the underlying securities in the Trust divided by the
number of Units outstanding plus a reduced sales charge of $10.00 per
Unit. Such arrangements result in less selling effort and selling
expenses than sales to employee groups of other companies. Resales or
transfers of Units purchased under the employee benefit arrangements may
only be made through the Sponsor's secondary market, so long as it is
being maintained.

Distribution of Units

Certain banks and thrifts will make Units of the Trust available
to their customers on an agency basis. A portion of the sales charge paid
by their customers is retained by or remitted to the banks. Under the
Glass-Steagall Act, banks are prohibited from underwriting Units; however,
the Glass-Steagall Act does permit certain agency transactions and the
banking regulators have indicated that these particular agency
transactions are permitted under such Act. In addition, state securities
laws on this issue may differ from the interpretations of federal law
expressed herein and banks and financial institutions may be required to
register as dealers pursuant to state law.

The Sponsor intends to qualify the Units for sale in
substantially all States through dealers who are members of the National
Association of Securities Dealers, Inc. Units may be sold to dealers at
prices which represent a concession of up to (a) 4% of the Public Offering
Price for the Municipal Securities Trust Series or (b) $25.00 per unit for
the Municipal Securities Trust Discount Series, subject to the Sponsor's
right to change the dealers' concession from time to time. Such Units may
then be distributed to the public by the dealers at the Public Offering
Price then in effect. In addition, for transactions of 1,000,000 Units or
more, the Sponsor intends to negotiate the applicable sales charge and
such charge will be disclosed to any such purchaser. The Sponsor reserves
the right to reject, in whole or in part, any order for the purchase of
Units. The Sponsor reserves the right to change the discounts from time
to time.

Sponsor's Profits

The Sponsor will receive a gross commission on all Units sold in
the secondary market equal to the applicable sales charge on each
transaction. (See "Offering Price".) In addition, in maintaining a
market for the Units (see "Sponsor Repurchase"), the Sponsor will realize
profits or sustain losses in the amount of any difference between the
price at which it buys Units and the price at which it resells such Units.

Participants in the "Total Reinvestment Plan" can designate a
broker as the recipient of a dealer concession. See "Total Reinvestment
Plan".

Comparison of Public Offering Price, Sponsor's Repurchase Price
and Redemption Price

The secondary market Public Offering Price of Units will be
determined on the basis of the current bid prices of the Bonds in the
Trust, plus the applicable sales charge. The value at which Units may be
resold in the secondary market or redeemed will be determined on the basis
of the current bid prices of such Bonds without any sales charge. On the
Evaluation Date, the Public Offering Price per Unit (based on the bid
prices of the Bonds in the Trust plus the sales charge) exceeded the
Repurchase and Redemption Price per Unit (based upon the bid prices of the
Bonds in the Trust without the sales charge) by the amount shown under
"Summary of Essential Information" in Part A of this Prospectus. For this
reason, among others (including fluctuations in the market prices of Bonds
and the fact that the Public Offering Price includes the applicable sales
charge), the amount realized by a Certificateholder upon any redemption or
repurchase of Units may be less than the price paid for such Units.

ESTIMATED LONG TERM RETURN AND ESTIMATED CURRENT RETURN

The rate of return on an investment in Units of each Trust is
measured in terms of "Estimated Current Return" and "Estimated Long Term
Return".

Estimated Long Term Return is calculated by: (1) computing the
yield to maturity or to an earlier call date (whichever results in a lower
yield) for each Bond in a Trust's portfolio in accordance with accepted
bond practices, which practices take into account not only the interest
payable on the Bond but also the amortization of premiums or accretion of
discounts, if any; (2) calculating the average of the yields for the Bonds
in each Trust's portfolio by weighing each Bond's yield by the market
value of the Bond and by the amount of time remaining to the date to which
the Bond is priced (thus creating an average yield for the portfolio of
each Trust); and (3) reducing the average yield for the portfolio of each
Trust in order to reflect estimated fees and expenses of that Trust and
the maximum sales charge paid by Certificateholders. The resulting
Estimated Long Term Return represents a measure of the return to
Certificateholders earned over the estimated life of each Trust. The
Estimated Long Term Return as of the day prior to the Evaluation Date is
stated for each Trust under "Summary of Essential Information" in Part A.

Estimated Current Return is computed by dividing the Estimated
Net Annual Interest Income per Unit by the Public Offering Price per Unit.
In contrast to the Estimated Long Term Return, the Estimated Current
Return does not take into account the amortization of premium or accretion
of discount, if any, on the Bonds in the portfolios of each Trust.
Moreover, because interest rates on Bonds purchased at a premium are
generally higher than current interest rates on newly issued bonds of a
similar type with comparable rating, the Estimated Current Return per Unit
may be affected adversely if such Bonds are redeemed prior to their
maturity. On the day prior to the Evaluation Date, the Estimated Net
Annual Interest Income per Unit divided by the Public Offering Price
resulted in the Estimated Current Return stated for each Trust under
"Summary of Essential Information" in Part A.

The Estimated Net Annual Interest Income per Unit of each Trust
will vary with changes in the fees and expenses of the Trustee and the
Evaluator applicable to each Trust and with the redemption, maturity, sale
or other disposition of the Bonds in each Trust. The Public Offering
Price will vary with changes in the bid prices of the Bonds. Therefore,
there is no assurance that the present Estimated Current Return or
Estimated Long Term Return will be realized in the future.

A schedule of cash flow projections is available from the
Sponsor upon request.

RIGHTS OF CERTIFICATEHOLDERS

Certificates

Ownership of Units of the Trust is evidenced by registered
Certificates executed by the Trustee and the Sponsor. Certificates may be
issued in denominations of one or more Units and will bear appropriate
notations on their faces indicating which plan of distribution has been
selected by the Certificateholder. Certificates are transferable by
presentation and surrender to the Trustee properly endorsed and/or
accompanied by a written instrument or instruments of transfer. Although
no such charge is presently made or contemplated, the Trustee may require
a Certificateholder to pay $2.00 for each Certificate reissued or
transferred and any governmental charge that may be imposed in connection
with each such transfer or interchange. Mutilated, destroyed, stolen or
lost Certificates will be replaced upon delivery of satisfactory indemnity
and payment of expenses incurred.

Interest and Principal Distributions

Interest received by the Trust is credited by the Trustee to an
Interest Account and a deduction is made to reimburse the Trustee without
interest for any amounts previously advanced. Proceeds representing
principal received from the maturity, redemption, sale or other
disposition of the Bonds are credited to a Principal Account.

Distributions to each Certificateholder from the Interest
Account are computed as of the close of business on each Record Date for
the following Payment Date and consist of an amount substantially equal to
one-twelfth, one-half or all of each Certificateholder's pro rata share of
the Estimated Net Annual Interest Income in the Interest Account,
depending upon the applicable plan of distribution. Distributions from
the Principal Account will be computed as of each semi-annual Record Date,
and will be made to the Certificateholders on or shortly after the next
semi-annual Payment Date. Proceeds representing principal received from
the disposition of any of the Bonds between a Record Date and a Payment
Date which are not used for redemptions of Units will be held in the
Principal Account and not distributed until the second succeeding semi-
annual Payment Date. No distributions will be made to Certificateholders
electing to participate in the Total Reinvestment Plan, except as provided
thereunder. Persons who purchase Units between a Record Date and a
Payment Date will receive their first distribution on the second Payment
Date after such purchase.

Because interest payments are not received by the Trust at a
constant rate throughout the year, interest distributions may be more or
less than the amount credited to the Interest Account as of a given Record
Date. For the purpose of minimizing fluctuations in the distributions
from the Interest Account, the Trustee will advance sufficient funds,
without interest, as may be necessary to provide interest distributions of
approximately equal amounts. All funds in respect of the Bonds received
and held by the Trustee prior to distribution to Certificateholders may be
of benefit to the Trustee and do not bear interest to Certificateholders.

As of the first day of each month, the Trustee will deduct from
the Interest Account, and, to the extent funds are not sufficient therein,
from the Principal Account, amounts necessary to pay the expenses of the
Trust (as determined on the basis set forth under "Trust Expenses and
Charges"). The Trustee also may withdraw from said accounts such amounts,
if any, as it deems necessary to establish a reserve for any applicable
taxes or other governmental charges that may be payable out of the Trust.
Amounts so withdrawn shall not be considered a part of the Trust's assets
until such time as the Trustee shall return all or any part of such
amounts to the appropriate accounts. In addition, the Trustee may
withdraw from the Interest and Principal Accounts such amounts as may be
necessary to cover redemptions of Units by the Trustee.

The estimated monthly, semi-annual or annual interest
distribution per Unit will be in the amount shown under Summary of
Essential Information and will change and may be reduced as bonds mature
or are redeemed, exchanged or sold, or as expenses of the Trust fluctuate.
No distribution need be made from the Principal Account until the balance
therein is an amount sufficient to distribute $1.00 per Unit.

Distribution Elections

Interest is distributed monthly, semi-annually or annually,
depending upon the distribution plan applicable to the Unit purchased.
Record Dates are the first day of each month for monthly distributions,
the first day of each June and December for semi-annual distributions and
the first day of each December for annual distributions. Payment Dates
will be the fifteenth day of each month following the respective Record
Dates. Certificateholders purchasing Units in the secondary market will
initially receive distributions in accordance with the election of the
prior owner. Every October each Certificateholder may change his
distribution election by notifying the Trustee in writing of such change
between October 1 and November 1 of each year. (Certificateholders
deciding to change their election should contact the Trustee by calling
the number listed on the back cover hereof for information regarding the
procedures that must be followed in connection with this written
notification of the change of election.) Failure to notify the Trustee on
or before November 1 of each year will result in a continuation of the
plan for the following 12 months.

Records

The Trustee shall furnish Certificateholders in connection with
each distribution a statement of the amount of interest, if any, and the
amount of other receipts, if any, which are being distributed, expressed
in each case as a dollar amount per Unit. Within a reasonable time after
the end of each calendar year (normally prior to January 31 of the
succeeding year), the Trustee will furnish to each person who at any time
during the calendar year was a Certificateholder of record, a statement
showing (a) as to the Interest Account: interest received (including any
earned original issue discount and amounts representing interest received
upon any disposition of Bonds), amounts paid for redemptions of Units, if
any, deductions for applicable taxes and fees and expenses of the Trust,
and the balance remaining after such distributions and deductions,
expressed both as a total dollar amount and as a dollar amount
representing the pro rata share of each Unit outstanding on the last
business day of such calendar year; (b) as to the Principal Account: the
dates of disposition of any Bonds and the net proceeds received therefrom
(including any unearned original issue discount but excluding any portion
representing accrued interest), deductions for payments of applicable
taxes and fees and expenses of the Trust, amounts paid for redemptions of
Units, if any, and the balance remaining after such distributions and
deductions, expressed both as a total dollar amount and as a dollar amount
representing the pro rata share of each Unit outstanding on the last
business day of such calendar year; (c) a list of the Bonds held and the
number of Units outstanding on the last business day of such calendar
year; (d) the Redemption Price per Unit based upon the last computation
thereof made during such calendar year; and (e) amounts actually
distributed to Certificateholders during such calendar year from the
Interest and Principal Accounts, separately stated, expressed both as
total dollar amounts and as dollar amounts representing the pro rata share
of each Unit outstanding on the last business day of such calendar year.

The Trustee shall keep available for inspection by Certificate-
holders at all reasonable times during usual business hours, books of
record and account of its transactions as Trustee, including records of
the names and addresses of Certificateholders, Certificates issued or
held, a current list of Bonds in the portfolio and a copy of the Trust
Agreement.
TAX STATUS

All Bonds acquired by the Trust were accompanied by copies of
opinions of bond counsel to the issuing governmental authorities given at
the time of original delivery of the Bonds to the effect that the interest
thereon is exempt from regular federal income tax, but such interest may
be subject to the federal corporate alternative minimum tax and to state
and local taxes. Neither the Sponsor nor the Trustee nor their respective
counsel have made any review of the proceedings relating to the issuance
of the Bonds or the bases for such opinions, and express no opinion as to
these matters, and neither the Trustee nor the Sponsor nor their
respective counsel have made an independent examination or verification
that the federal income tax status of the Bonds has not been altered since
the time of the original delivery of those opinions.

The Revenue Reconciliation Act of 1993 ("P.L. 103-66") was
recently enacted. P.L. 103-66 increases maximum marginal income tax rates
for individuals and corporations (generally effective for taxable years
beginning after December 31, 1992), extends the authority to issue certain
categories of tax-exempt bonds (qualified small issue bonds and qualified
mortgage bonds), limits the availability of capital gain treatment for
tax-exempt bonds purchased at a market discount, increases the amount of
Social Security benefits subject to tax (effective for taxable years
beginning after December 31, 1993) and makes a variety of other changes.
Prospective investors are urged to consult their own tax advisors as to
the effect of P.L. 103-66 on an investment in Units.

In rendering the opinion set forth below, counsel has examined
the Agreement, the final form of Prospectus dated the date hereof (the
"Prospectus") and the documents referred to therein, among others, and has
relied on the validity of said documents and the accuracy and completeness
of the facts set forth therein.

In the opinion of Battle Fowler, counsel for the Sponsor, under
existing law:

The Trust is not an association taxable as a corporation for federal
income tax purposes under the Internal Revenue Code of 1986 (the "Code"),
and income received by the Trust that consists of interest excludable from
federal gross income under the Code will be excludable from the federal
gross income of the Certificateholders of the Trust.

Each Certificateholder will be considered the owner of a pro rata
portion of the Trust under Section 676(a) of the Code. Thus, each Cer-
tificateholder will be considered to have received his pro rata share of
Bond interest when it is received by the Trust, and the net income
distributable to Certificateholders that is exempt from federal income tax
when received by the Trust will constitute tax-exempt income when received
by the Certificateholders.

Gain (other than any earned original issue discount) realized on a
sale or redemption of the Bonds or on a sale of a Unit is, however,
includable in gross income for federal income tax purposes, generally as
capital gain, although gain on the disposition of a Bond or a Unit
purchased at a market discount generally will be treated as ordinary
income, rather than capital gain, to the extent of accrued market
discount. (It should be noted in this connection that such gain does not
include any amounts received in respect of accrued interest.) Such gain
may be long or short-term depending on the facts and circumstances.
Capital losses are deductible to the extent of capital gains; in addition,
up to $3,000 of capital losses of non-corporate Certificateholders may be
deducted against ordinary income. Capital assets acquired on or after
January 1, 1988 must be held for more than one year to qualify for long-
term capital gain treatment. Individuals who realize long-term capital
gains will be subject to a maximum tax rate of 28% on such gain.

Each Certificateholder will realize taxable gain or loss when the
Trust disposes of a Bond (whether by sale, exchange, redemption or payment
at maturity), as if the Certificateholder had directly disposed of his pro
rata share of such Bond. The gain or loss is measured by the difference
between (i) the tax cost of such pro rata share and (ii) the amount
received therefor. For this purpose, a Certificateholder's tax cost for
each Bond is determined by allocating the total tax cost of each Unit
among all of the Bonds held in the Trust (in accordance with the portion
of the Trust comprised by each Bond). In order to determine the amount of
taxable gain or loss, the Certificateholder's amount received is similarly
allocated at that time. The Certificateholder may exclude from the amount
received any amounts that represent accrued interest or the earned portion
of any original issue discount but may not exclude amounts attributable to
market discount. Thus, when a Bond is disposed of by the Trust at a gain,
taxable gain will equal the difference between (i) the amount received and
(ii) the amount paid plus any original issue discount (limited, in the
case of Bonds issued after June 8, 1980, to the portion earned from the
date of acquisition to the date of disposition). Gain on the disposition
of a Bond purchased at a market discount generally will be treated as
ordinary income, rather than capital gain, to the extent of accrued market
discount. No deduction is allowed for the amortization of bond premium on
tax-exempt bonds such as the Bonds in computing regular federal income
tax.

Discount generally accrues based on the principle of compounding of
accrued interest, not on a straight-line or ratable method, with the
result that the amount of earned original issue discount is less in the
earlier years and more in the later years of a bond term. The tax basis
of a discount bond is increased by the amount of accrued, tax-exempt
original issue discount thus determined. This method of calculation will
produce higher capital gains (or lower losses) to a Certificateholder, as
compared to the results produced by the straight-line method of accounting
for original issue discount, upon an early disposition of a Bond by the
Trust or of a Unit by a Certificateholder.

A Certificateholder may also realize taxable income or loss when a
Unit is sold or redeemed. The amount received is allocated among all the
Bonds in the Trust in the same manner as when the Trust disposes of Bonds
and the Certificateholder may exclude accrued interest and the earned
portion of any original issue discount (but not amounts attributable to
market discount). The return of a Certificateholder's tax cost is
otherwise a tax-free return of capital.

A portion of social security benefits is includable in gross income
for taxpayers whose "modified adjusted gross income" combined with a
portion of their benefits exceeds a base amount. The base amount is
$25,000 for an individual, $32,000 for a married couple filing a joint
return and zero for married persons filing separate returns. Interest on
tax-exempt bonds is to be added to adjusted gross income for purposes of
computing the amount of benefits that are includable in gross income and
determining whether an individual's income exceeds the base amount above
which a portion of the benefits would be subject to tax. For taxable
years beginning after December 31, 1993, the amount of Social Security
benefits subject to tax will be increased.

Corporate Certificateholders are required to include in federal
corporate alternative minimum taxable income 75 percent of the amount by
which the adjusted current earnings (which will include tax-exempt
interest) of the corporation exceeds alternative minimum taxable income
(determined without this item). Further, interest on the Bonds is
includable in a 0.12% additional corporate minimum tax imposed by the
Superfund Amendments and Reauthorization Act of 1986 for taxable years
beginning before January 1, 1996. In addition, in certain cases, Subchap-
ter S corporations with accumulated earnings and profits from Subchapter C
years will be subject to a minimum tax on excess "passive investment
income" which includes tax-exempt interest.

The Trust is not subject to the New York State Franchise Tax on
Business Corporations or the New York City General Corporation Tax. For a
Certificateholder who is a New York resident, however, a pro rata portion
of all or part of the income of the Trust will be treated as the income of
the Certificateholder under the income tax laws of the State and City of
New York. Similar treatment may apply in other states.

The exemption of interest on municipal obligations for federal
income tax purposes does not necessarily result in exemption under the
income tax laws of any state or political subdivision. In general,
municipal bond interest exempt from federal income tax is taxable income
to residents of the State or City of New York under the tax laws of those
jurisdictions unless the bonds are issued by the State of New York or one
of its political subdivisions or by the Commonwealth of Puerto Rico or one
of its political subdivisions. For corporations doing business in New
York State, interest earned on state and municipal obligations that are
exempt from federal income tax, including obligations of New York State,
its political subdivisions and instrumentalities, must be included in
calculating New York State and New York City entire net income for
purposes of computing New York State and New York City franchise (income)
tax. The laws of the several states and local taxing authorities vary
with respect to the taxation of such obligations and each Certificate-
holder is advised to consult his own tax advisor as to the tax
consequences of his Certificates under state and local tax laws.

In the case of Bonds that are industrial revenue bonds ("IRBs")
or certain types of private activity bonds, the opinions of bond counsel
to the respective issuing authorities indicate that interest on such Bonds
is exempt from regular federal income tax. However, interest on such
Bonds will not be exempt from regular federal income tax for any period
during which such Bonds are held by a "substantial user" of the facilities
financed by the proceeds of such Bonds or by a "related person" thereof
within the meaning of the Code. Therefore, interest on any such Bonds
allocable to a Certificateholder who is such a "substantial user" or
"related person" thereof will not be tax-exempt. Furthermore, in the case
of Bonds that qualify for the "small issue" exemption, the "small issue"
exemption will not be available or will be lost if, at any time during the
three-year period beginning on the later of the date the facilities are
placed in service or the date of issue, all outstanding tax-exempt IRBs,
together with a proportionate share of any present issue, of an owner or
principal user (or related person) of the facilities exceeds $40,000,000.
In the case of IRBs issued under the $10,000,000 "small issue" exemption,
interest on such IRBs will become taxable if the face amount of the IRBs
plus certain capital expenditures exceeds $10,000,000.

In addition, a Bond can lose its tax-exempt status as a result
of other subsequent but unforeseeable events such as prohibited
"arbitrage" activities by the issuer of the Bond or the failure of the
Bond to continue to satisfy the conditions required for the exemption of
interest thereon from regular federal income tax. No investigation has
been made as to the current or future owners or users of the facilities
financed by the Bonds, the amount of such persons' outstanding tax-exempt
IRBs, or the facilities themselves, and no assurance can be given that
future events will not affect the tax-exempt status of the Bonds.
Investors should consult their tax advisors for advice with respect to the
effect of these provisions on their particular tax situation.

Interest on indebtedness incurred or continued to purchase or
carry the Units is not deductible for federal income tax purposes. In
addition, under rules used by the Internal Revenue Service for determining
when borrowed funds are considered used for the purpose of purchasing or
carrying particular assets, the purchase of Units may be considered to
have been made with borrowed funds even though the borrowed funds are not
directly traceable to the purchase of Units. Also, in the case of certain
financial institutions that acquire Units, in general no deduction is
allowed for interest expense allocable to such Units.

From time to time proposals have been introduced before Congress
to restrict or eliminate the federal income tax exemption for interest on
debt obligations similar to the Bonds in the Trust, and it can be expected
that similar proposals may be introduced in the future.

In a 1988 decision (South Carolina v. Baker), the U.S. Supreme
Court held that the federal government may constitutionally require states
to register bonds they issue and subject the interest on such bonds to
federal income tax if not registered, and that there is no constitutional
prohibition against the federal government's taxing the interest earned on
state or other municipal bonds. The Supreme Court decision affirms the
authority of the federal government to regulate and control bonds such as
the Bonds in the Trust and to tax interest on such bonds in the future.
The decision does not, however, affect the current exemption from taxation
of the interest earned on the Bonds in the Trust in accordance with Sec-
tion 103 of the Code.

The opinions of bond counsel or special tax counsel to the
issuing governmental authorities to the effect that interest on the Bonds
is exempt from regular federal income tax may be limited to law existing
at the time the Bonds were issued, and may not apply to the extent that
future changes in law, regulations or interpretations affect such Bonds.
Investors are advised to consult their own tax advisors for advice with
respect to the effect of any legislative changes.

LIQUIDITY

Sponsor Repurchase

The Sponsor, although not obligated to do so, intends to
maintain a secondary market for the Units. The Sponsor's secondary market
repurchase price will be based on the aggregate bid price of the Bonds in
the Trust portfolio, determined by the Evaluator on a daily basis, and
will be the same as the redemption price. See "Trustee Redemption". Cer-
tificateholders who wish to dispose of their Units should inquire of the
Sponsor prior to making a tender for redemption. The Sponsor may
discontinue repurchases of Units if the supply of Units exceeds demand, or
for other business reasons. The date of repurchase is deemed to be the
date on which Certificates representing Units are physically received in
proper form by the Sponsor, Bear, Stearns & Co. Inc., 245 Park Avenue, New
York, N.Y. 10167. Units received after 4:00 P.M., New York Time, will be
deemed to have been repurchased on the next business day. In the event a
market is not maintained for the Units, a Certificateholder may be able to
dispose of Units only by tendering them to the Trustee for redemption.

Prospectuses relating to certain other bond trusts indicate an
intention by the respective Sponsors, subject to change, to repurchase
units on the basis of a price higher than the bid prices of the bonds in
the trust. Consequently, depending on the prices actually paid, the
secondary market repurchase price of other trusts may be computed on a
somewhat more favorable basis than the repurchase price offered by the
Sponsor for units of this Trust, although in all bond trusts, the purchase
price of a unit depends primarily on the value of the bonds in the trust
portfolio.

Units purchased by the Sponsor in the secondary market may be
reoffered for sale by the Sponsor at a price based on the aggregate bid
price of the Bonds in the Trust plus the applicable sales charge (see
"Public Offering Price" in Part A) plus net accrued interest. Any Units
that are purchased by the Sponsor in the secondary market also may be
redeemed by the Sponsor if it determines such redemption to be in its best
interest.

The Sponsor may, under certain circumstances, as a service to
Certificateholders, elect to purchase any Units tendered to the Trustee
for redemption. (See "Trustee Redemption".) For example, if in order to
meet redemptions of Units the Trustee must dispose of Bonds, and if such
disposition cannot be made by the redemption date (seven calendar days
after tender), the Sponsor may elect to purchase such Units. Such
purchase shall be made by payment to the Certificateholder not later than
the close of business on the redemption date of an amount equal to the
Redemption Price on the date of tender.

Trustee Redemption

Units also may be tendered to the Trustee for redemption at its
corporate trust office as set forth in Part A of this Prospectus, upon
proper delivery of Certificates representing such Units and payment of any
relevant tax. At the present time there are no specific taxes related to
the redemption of Units. No redemption fee will be charged by the Sponsor
or the Trustee. Units redeemed by the Trustee will be cancelled.

Certificates representing Units to be redeemed must be delivered
to the Trustee and must be properly endorsed or accompanied by proper
instruments of transfer with signature guaranteed (or by providing
satisfactory indemnity, as in the case of lost, stolen or mutilated
Certificates). Thus, redemptions of Units cannot be effected until
Certificates representing such Units have been delivered by the person
seeking redemption. (See "Certificates".) Certificateholders must sign
exactly as their names appear on the faces of their Certificates. In
certain instances the Trustee may require additional documents such as,
but not limited to, trust instruments, certificates of death, appointments
as executor or administrator or certificates of corporate authority.

Within seven calendar days following a tender for redemption,
or, if such seventh day is not a business day, on the first business day
prior thereto, the Certificateholder will be entitled to receive in cash
an amount for each Unit tendered equal to the Redemption Price per Unit
computed as of the Evaluation Time on the date of tender. The "date of
tender" is deemed to be the date on which Units are received by the
Trustee, except that with respect to Units received after the close of
trading on the New York Stock Exchange, the date of tender is the next day
on which such Exchange is open for trading, and such Units will be deemed
to have been tendered to the Trustee on such day for redemption at the
Redemption Price computed on that day.

Accrued interest paid on redemption shall be withdrawn from the
Interest Account, or, if the balance therein is insufficient, from the
Principal Account. All other amounts paid on redemption shall be
withdrawn from the Principal Account. The Trustee is empowered to sell
Bonds in order to make funds available for redemptions. Such sales, if
required, could result in a sale of Bonds by the Trustee at a loss. To
the extent Bonds are sold, the size and diversity of the Trust will be
reduced.

The Redemption Price per Unit is the pro rata share of each Unit
in the Trust determined by the Trustee on the basis of (i) the cash on
hand in the Trust or moneys in the process of being collected, (ii) the
value of the Bonds in the Trust based on the bid prices of such Bonds and
(iii) interest accrued thereon, less (a) amounts representing taxes or
other governmental charges payable out of the Trust, (b) the accrued
expenses of the Trust and (c) cash allocated for the distribution to Cer-
tificateholders of record as of the business day prior to the evaluation
being made. The Evaluator may determine the value of the Bonds in the
Trust for purposes of redemption (1) on the basis of current bid prices of
the Bonds obtained from dealers or brokers who customarily deal in bonds
comparable to those held by the Trust, (2) on the basis of bid prices for
bonds comparable to any Bonds for which bid prices are not available,
(3) by determining the value of the Bonds by appraisal, or (4) by any
combination of the above.

The Trustee is irrevocably authorized in its discretion, if the
Sponsor does not elect to purchase a Unit tendered for redemption or if
the Sponsor tenders a Unit for redemption, in lieu of redeeming such Unit,
to sell such Unit in the over-the-counter market for the account of the
tendering Certificateholder at prices which will return to the Certifi-
cateholder an amount in cash, net after deducting brokerage commissions,
transfer taxes and other charges, equal to or in excess of the Redemption
Price for such Unit. The Trustee will pay the net proceeds of any such
sale to the Certificateholder on the day he would otherwise be entitled to
receive payment of the Redemption Price.

The Trustee reserves the right to suspend the right of
redemption and to postpone the date of payment of the Redemption Price per
Unit for any period during which the New York Stock Exchange is closed,
other than customary weekend and holiday closings, or trading on that
Exchange is restricted or during which (as determined by the Securities
and Exchange Commission) an emergency exists as a result of which disposal
or evaluation of the Bonds is not reasonably practicable, or for such
other periods as the Securities and Exchange Commission may by order
permit. The Trustee and the Sponsor are not liable to any person or in
any way for any loss or damage which may result from any such suspension
or postponement.

A Certificateholder who wishes to dispose of his Units should
inquire of his bank or broker in order to determine if there is a current
secondary market price in excess of the Redemption Price.

TOTAL REINVESTMENT PLAN

Under the Total Reinvestment Plan (the "Plan"), semi-annual and
annual Certificateholders (except Texas residents*) may elect to have all
regular interest and principal distributions, if any, with respect to
their Units reinvested either in units of various series of "Municipal
Securities Trust" which will have been created shortly before each semi-
annual or annual Payment Date (a "Primary Series") or, if units of a
Primary Series are not available, in units of a previously formed series
of the Trust which have been repurchased by the Sponsor in the secondary
market, including the units being offered hereby (a "Secondary Series")
(Primary Series and Secondary Series are hereafter collectively referred
to as "Available Series"). June 15 and December 15 of each year, in the
case of semi-annual Certificateholders, and December 15 of each year in
the case of annual Certificateholders, are the "Plan Reinvestment Dates".

* Texas residents may elect to participate in the "Total Reinvestment
Plan for Texas Residents" hereinafter described.

<PAGE>

Under the Plan (subject to compliance with applicable blue sky
laws), fractional units ("Plan Units") will be purchased from the Sponsor
at a price equal to the aggregate offering price per Unit of the bonds in
the Available Series portfolio during the initial offering of the
Available Series or at the aggregate bid price per Unit of the Available
Series if its initial offering has been completed, plus a sales charge
equal to 3.627% of the net amount invested in such bonds or 3-1/2% of the
Reinvestment Price per Plan Unit, plus accrued interest, divided by one
hundred (the "Reinvestment Price per Plan Unit"). All Plan Units will be
sold at this reduced sales charge of 3-1/2% in comparison to the regular
sales charge levied on primary and secondary market sales of units in any
series of "Municipal Securities Trust". Participants in the Plan will
have the opportunity to designate, in the Authorization Form for the Plan,
the name of a broker to whom the Sponsor will allocate a sales commission
of 1-1/2% per Plan Unit, payable out of the 3-1/2% sales charge. If no
such designation is made, the Sponsor will retain the sales commission.

Under the Plan, the entire amount of a participant's income and
principal distributions will be reinvested. For example, a Certificate-
holder who is entitled to receive $130.50 interest income from the Trust
would acquire 13.05 Plan Units assuming that the Reinvestment Price per
Plan Unit, plus accrued interest, was $10.

A semi-annual or annual Certificateholder may join the Plan at
the time he invests in Units of the Trust or any time thereafter by
delivering to the Trustee an Authorization Form which is available from
brokers or the Sponsor. In order that distributions may be reinvested on
a particular Plan Reinvestment Date, the Authorization Form must be
received by the Trustee not later than the 15th day of the month preceding
such Date. Authorization Forms not received in time for a particular Plan
Reinvestment Date will be valid only for the second succeeding Plan
Reinvestment Date. Similarly, a participant may withdraw from the Plan at
any time by notifying the Trustee (see below). However, if written
confirmation of withdrawal is not given to the Trustee prior to a
particular distribution, the participant will be deemed to have elected to
participate in the Plan with respect to that particular distribution and
his withdrawal would become effective for the next succeeding
distribution.

Once delivered to the Trustee, an Authorization Form will
constitute a valid election to participate in the Plan with respect to
Units purchased of the Trust (and with respect to Plan Units purchased
with the distributions from the Units purchased of the Trust) for each
subsequent distribution as long as the Certificateholder continues to
participate in the Plan. However, if an Available Series should
materially differ from the Trust in the opinion of the Sponsor, the
authorization will be voided and participants will be provided with both a
notice of the material change and a new Authorization Form which would
have to be returned to the Trustee before the Certificateholder would
again be able to participate in the Plan. The Sponsor anticipates that a
material difference which would result in a voided authorization would
include such facts as the inclusion of bonds in the Available Series
portfolio the interest income on which was not exempt from federal income
tax, or the inclusion of bonds which were not rated "A" or better by
either Standard & Poor's Corporation or Moody's Investors Service, Inc. on
the date such bonds were initially deposited in the Available Series
portfolio.

The Sponsor has the option at any time to use units of a
Secondary Series to fulfill the requirements of the Plan in the event
units of a Primary Series are not available either because a Primary
Series is not then in existence or because the registration statement
relating thereto is not declared effective in sufficient time to
distribute final prospectuses to Plan participants (see below). It should
be noted that there is no assurance that the quality and diversification
of the Bonds in any Available Series or the estimated current return
thereon will be similar to that of this Trust.

It is the Sponsor's intention that Plan Units will be offered on
or about each semi-annual and annual Record Date for determining who is
eligible to receive distributions on the related Payment Date. Such
Record Dates are June 1 and December 1 of each year for semi-annual Cer-
tificateholders, and December 1 of each year for annual Certificate-
holders. On each Record Date, the Sponsor will send a current Prospectus
relating to the Available Series being offered for the next Plan
Reinvestment Date along with a letter which reminds each participant that
Plan Units are being purchased for him as part of the Plan unless he
notifies the Trustee in writing by that Plan Reinvestment Date that he no
longer wishes to participate in the Plan. In the event a Primary Series
has not been declared effective in sufficient time to distribute a final
Prospectus relating thereto and there is no Secondary Series as to which a
registration statement is currently effective, it is the Sponsor's
intention to suspend the Plan and distribute to each participant his
regular semi-annual or annual distribution. If the Plan is so suspended,
it will resume in effect with the next Plan Reinvestment Date assuming
units of an Available Series are then being offered.

To aid a participant who might desire to withdraw either from
the Plan or from a particular distribution, the Trustee has established a
toll free number (see below) for participants to use for notification of
withdrawal, which must be confirmed in writing prior to the Plan
Reinvestment Date. Should the Trustee be so notified, it will make the
appropriate cash disbursement. Unless the withdrawing participant
specifically indicates in his written confirmation that (a) he wishes to
withdraw from the Plan for that particular distribution only, or (b) he
wishes to withdraw from the Plan for less than all units of each series of
"Municipal Securities Trust" which he might then own (and specifically
identifies which series are to continue in the Plan), he will be deemed to
have withdrawn completely from the Plan in all respects. Once a
participant withdraws completely, he will only be allowed to again
participate in the Plan by submitting a new Authorization Form. A sale or
redemption of a portion of a participant's Plan Units will not constitute
a withdrawal from the Plan with respect to the remaining Plan Units owned
by such participant.

Unless a Certificateholder notifies the Trustee in writing to
the contrary, each semi-annual and annual Certificateholder who has
acquired Plan Units will be deemed to have elected the semi-annual and
annual plan of distribution, respectively, and to participate in the Plan
with respect to distributions made in connection with such Plan Units.
(Should the Available Series from which Plan Units are purchased for the
account of an annual Certificateholder fail to have an annual distribution
plan, such Certificateholder will be deemed to have elected the semi-
annual plan of distribution, and to participate in the Plan with respect
to distributions made in connection with such Plan Units.) A participant
who subsequently desires to have distributions made with respect to Plan
Units delivered to him in cash may withdraw from the Plan with respect to
such Plan Units and remain in the Plan with respect to units acquired
other than through the Plan. Assuming a participant has his distributions
made with respect to Plan Units reinvested, all such distributions will be
accumulated with distributions generated from the Units of the Trust used
to purchase such additional Plan Units. However, distributions related to
units in other series of "Municipal Securities Trust" will not be
accumulated with the foregoing distributions for Plan purchases. Thus, if
a person owns units in more than one series of "Municipal Securities
Trust" (which are not the result of purchases under the Plan),
distributions with respect thereto will not be aggregated for purchases
under the Plan.

Although not obligated to do so, the Sponsor has maintained and
intends to continue to maintain a market for the Plan Units and
continuously to offer to purchase Plan Units at prices based upon the
aggregate bid price of the bonds in the Available Series portfolio, during
the initial offering of the Available Series, or at the aggregate bid
price of the Bonds in the Available Series if its initial offering has
been completed. The Sponsor may discontinue such purchases at any time.
The aggregate bid price of the underlying bonds may be expected to be less
than the aggregate offering prices. In the event that a market is not
maintained for Plan Units, a participant desiring to dispose of his Plan
Units may be able to do so only by tendering such Plan Units to the
Trustee for redemption at the Redemption Price of full units in the
Available Series corresponding to such Plan Units, which is based upon the
aggregate bid price of the underlying bonds as described in the "Municipal
Securities Trust" Prospectus for the Available Series in question. If a
participant wishes to dispose of his Plan Units, he should inquire of the
Sponsor as to current market prices prior to making a tender for
redemption to the Trustee.

Any participant may tender his Plan Units for redemption to the
Available Series trustee. Participants may redeem Plan Units by making a
written request to the Trustee, at the address listed in the "Summary of
Essential Information" in Part A on the Redemption Form supplied by the
Trustee. The redemption price per Plan Unit will be determined as set
forth in the "Municipal Securities Trust" Prospectus of the Available
Series from which such Plan Unit was purchased following receipt of the
request and adjusted to reflect the fact that it relates to a Plan Unit.
There is no charge for the redemption of Plan Units.

The Trust Agreement requires that the Trustee notify the Sponsor
of any tender of Plan Units for redemption. So long as the Sponsor is
maintaining a bid in the secondary market, the Sponsor will purchase any
Plan Units tendered to the Trustee for redemption by making payment
therefor to the Certificateholder in an amount not less than the
redemption price for such Plan Units on the date of tender not later than
the day on which such Plan Units would otherwise have been redeemed by the
Trustee.

Participants in the Plan will not receive individual
certificates for their Plan Units unless the amount of Plan Units
accumulated represents the principal amount of bonds originally underlying
each Unit and, in such case, a written request for certificates is made to
the Trustee. All Plan Units will be accounted for by the Trustee on a
book entry system. Each time Plan Units are purchased under the Plan, a
participant will receive a confirmation stating his cost, number of Units
purchased and estimated current return. Questions regarding a
participant's statement should be directed to the Trustee by calling the
Trustee at the number listed in the "Summary of Essential Information" in
Part A.

All expenses relating to the operation of the Plan are borne by
the Sponsor. Both the Sponsor and the Trustee reserve the right to
suspend, modify or terminate the Plan at any time for any reason,
including the right to suspend the Plan if the Sponsor is unable or
unwilling to establish a Primary Series or is unable to provide Secondary
Series units. All participants will receive notice of any such
suspension, modification or termination.

Total Reinvestment Plan for Texas Residents

Except as specifically provided under this Section, and unless
the context otherwise requires, all provisions and definitions contained
under the heading "Total Reinvestment Plan" shall be applicable to the
Total Reinvestment Plan for Texas Residents ("Texas Plan").

Semi-annual and annual Certificateholders of the Trust who are
residents of Texas have the option prior to any semi-annual or annual
distribution to elect affirmatively to reinvest that distribution,
including both interest and principal, if any, in an Available Series.

A resident of Texas who is a semi-annual Certificateholder may
join the Texas Plan for any particular semi-annual or annual distribution
by delivering to the Trustee an Authorization Form For Texas Residents
("Texas Authorization Form") specifically mentioning the date of the
particular semi-annual or annual distribution he wishes to reinvest. On
or about each semi-annual or annual Record Date, Texas Authorization Forms
shall be sent by the Trustee to every Certificateholder who is a resident
of Texas. In the event that the Sponsor suspends the Plan or the Texas
Plan, no Texas Authorization Forms shall be sent. In order that
distributions may be reinvested on a particular Plan Reinvestment Date,
the Texas Authorization Form must be received by the Trustee on or before
such Date. Texas Authorization Forms not received in time for the Plan
Reinvestment Date will be deemed void. A participant who delivers a Texas
Authorization Form to the Trustee may thereafter withdraw said
authorization by notifying the Trustee at its toll free telephone number
prior to a Plan Reinvestment Date. Such notification of a withdrawal must
be confirmed in writing prior to the Plan Reinvestment Date. Under no
circumstances shall a Texas Authorization Form be provided or accepted by
the Trustee which provides for the reinvestment of distributions for more
than one Plan Reinvestment Date.

On or about each semi-annual and annual Record Date, the Sponsor
will send a current Prospectus relating to the Available Series being
offered on the next Plan Reinvestment Date along with a letter
incorporating a Texas Authorization Form which specifies the funds
available for reinvestment, reminds each participant that no Plan Units
will be purchased for him unless the Texas Authorization Form is received
by the Trustee on or before that particular Plan Reinvestment Date, and
states that the Texas Authorization Form is valid only for that particular
semi-annual or annual distribution. If the Available Series should
materially differ from the Trust, the participant will be provided with a
notice of the material change and a new Texas Authorization Form which
would have to be returned to the Trustee before the Certificateholder
would again be able to participate in the Plan.

Each semi-annual and annual Certificateholder who has acquired
Plan Units will be deemed to have elected the semi-annual and annual plan
of distribution, respectively, with respect to such Units, but such Cer-
tificateholder will not be deemed to participate in the Plan for any
particular distribution unless and until he delivers to the Trustee a
Texas Authorization Form pertaining to those Plan Units. (Should the
Available Series from which Plan Units are purchased for the account of an
annual Certificateholder fail to have an annual distribution plan, such
Certificateholder will be deemed to have elected the semi-annual plan of
distribution, and to participate in the Plan with respect to distributions
made, in connection with such Plan Units.)

TRUST ADMINISTRATION

Portfolio Supervision

The Sponsor may direct the Trustee to dispose of Bonds upon
(i) default in payment of principal or interest on such Bonds,
(ii) institution of certain legal proceedings with respect to the issuers
of such Bonds, (iii) default under other documents adversely affecting
debt service on such Bonds, (iv) default in payment of principal or
interest on other obligations of the same issuer or guarantor, (v) with
respect to revenue Bonds, decline in revenues and income of any facility
or project below the estimated levels calculated by proper officials
charged with the construction or operation of such facility or project or
(vi) decline in price or the occurrence of other market or credit factors
which in the opinion of the Sponsor would make the retention of such Bonds
in the Trust detrimental to the interests of the Certificateholders. If a
default in the payment of principal or interest on any of the Bonds occurs
and if the Sponsor fails to instruct the Trustee to sell or hold such
Bonds, the Trust Agreement provides that the Trustee may sell such Bonds.

The Sponsor is authorized by the Trust Agreement to direct the
Trustee to accept or reject certain plans for the refunding or refinancing
of any of the Bonds. Any bonds received in exchange or substitution will
be held by the Trustee subject to the terms and conditions of the
Agreement to the same extent as the Bonds originally deposited. Within
five days after such deposit, notice of such exchange and deposit shall be
given by the Trustee to each Certificateholder registered on the books of
the Trustee, including an identification of the Bonds eliminated and the
bonds substituted therefor. Except as stated, the acquisition by the
Trust of any securities other than the bonds initially deposited is
prohibited.

Trust Agreement, Amendment and Termination

The Trust Agreement may be amended by the Trustee, the Sponsor
and the Evaluator without the consent of any of the Certificateholders:
(1) to cure any ambiguity or to correct or supplement any provision which
may be defective or inconsistent; (2) to change any provision thereof as
may be required by the Securities and Exchange Commission or any successor
governmental agency; or (3) to make such other provisions in regard to
matters arising thereunder as shall not adversely affect the interests of
the Certificateholders.

The Trust Agreement may also be amended in any respect, or
performance of any of the provisions thereof may be waived, with the
consent of the holders of Certificates evidencing 66-2/3% of the Units
then outstanding, for the purpose of modifying the rights of Certificate-
holders; provided that no such amendment or waiver shall reduce any Cer-
tificateholder's interest in the Trust without his consent or reduce the
percentage of Units required to consent to any such amendment or waiver
without the consent of the holders of all Certificates. The Trust
Agreement may not be amended, without the consent of the holders of all
Certificates then outstanding, to increase the number of Units issuable or
to permit the acquisition of any bonds in addition to or in substitution
for those initially deposited in the Trust, except in accordance with the
provisions of the Trust Agreement. The Trustee shall promptly notify Cer-
tificateholders, in writing, of the substance of any such amendment.

The Trust Agreement provides that the Trust shall terminate upon
the maturity, redemption or other disposition, as the case may be, of the
last of the Bonds held in the Trust but in no event is it to continue
beyond the end of the calendar year preceding the fiftieth anniversary of
the execution of the Trust Agreement. If the value of the Trust shall be
less than the minimum amount set forth under "Summary of Essential
Information" in Part A, the Trustee may, in its discretion, and shall,
when so directed by the Sponsor, terminate the Trust. The Trust may also
be terminated at any time with the consent of the holders of Certificates
representing 100% of the Units then outstanding. In the event of
termination, written notice thereof will be sent by the Trustee to all
Certificateholders. Within a reasonable period after termination, the
Trustee must sell any Bonds remaining in the Trust, and, after paying all
expenses and charges incurred by the Trust, distribute to each Certifi-
cateholder, upon surrender for cancellation of his Certificate for Units,
his pro rata share of the Interest and Principal Accounts.

The Sponsor

The Sponsor, Bear, Stearns & Co. Inc., a Delaware corporation,
is engaged in the underwriting, investment banking and brokerage business
and is a member of the National Association of Securities Dealers, Inc.
and all principal securities and commodities exchanges, including the New
York Stock Exchange, the American Stock Exchange, the Midwest Stock
Exchange and the Pacific Stock Exchange. Bear Stearns maintains its
principal business offices at 245 Park Avenue, New York, New York 10167
and, since its reorganization from a partnership to a corporation in
October, 1985 has been a wholly-owned subsidiary of The Bear Stearns
Companies Inc. Bear Stearns, through its predecessor entities, has been
engaged in the investment banking and brokerage business since 1923. Bear
Stearns is the sponsor for numerous series of unit investment trusts,
including: A Corporate Trust, Series 1; New York Municipal Trust,
Series 1 (and Subsequent Series), Discount & Zero Coupon Fund-1st Series
(and Subsequent Series); Municipal Securities Trust, Series 1 (and
Subsequent Series), 1st Discount Series (and Subsequent Series), Multi-
State Series 1 (and Subsequent Series), High Income Trust Series 1 (and
Subsequent Series), Insured Municipal Securities Trust, Series 1-4
(Multiplier Portfolio), Series 1 (and Subsequent Series), 5th Discount
Series (and Subsequent Series), Navigator Series (and Subsequent Series),
Mortgage Securities Trust, CMO Series 1 (and Subsequent Series) and Equity
Securities Trust, Series 1, Signature Series, Gabelli Communications
Income Trust (and Subsequent Series). The information included herein is
only for the purpose of informing investors as to the financial
responsibility of the Sponsor and its ability to carry out its contractual
obligations.

The Sponsor is liable for the performance of its obligations
arising from its responsibilities under the Trust Agreement, but will be
under no liability to Certificateholders for taking any action, or
refraining from taking any action, in good faith pursuant to the Trust
Agreement, or for errors in judgment except in cases of its own willful
misfeasance, bad faith, gross negligence or reckless disregard of its
obligations and duties.

The Sponsor may resign at any time by delivering to the Trustee
an instrument of resignation executed by the Sponsor.

If at any time the Sponsor shall resign or fail to perform any
of its duties under the Trust Agreement or becomes incapable of acting or
becomes bankrupt or its affairs are taken over by public authorities, then
the Trustee may either (a) appoint a successor Sponsor; (b) terminate the
Trust Agreement and liquidate the Trust; or (c) continue to act as Trustee
without terminating the Trust Agreement. Any successor Sponsor appointed
by the Trustee shall be satisfactory to the Trustee and, at the time of
appointment, shall have a net worth of at least $1,000,000.

The Trustee

For certain of the Trusts as set forth in the "Summary of
Essential Information" in Part A, the Trustee is United States Trust
Company of New York, with its principal place of business at 45 Wall
Street, New York, New York 10005 and a corporate trust office at 770
Broadway, New York, New York 10003. United States Trust Company of New
York has, since its establishment in 1853, engaged primarily in the
management of trust and agency accounts for individuals and corporations.
The Trustee is a member of the New York Clearing House Association and is
subject to supervision and examination by the Superintendent of Banks of
the State of New York, the Federal Deposit Insurance Corporation and the
Board of Governors of the Federal Reserve System.

For certain other Trusts as set forth in the "Summary of
Essential Information" in Part A, the Trustee is The Bank of New York, a
trust company organized under the laws of New York, having its offices at
101 Barclay Street, New York, New York 10286 (1-800-431-8002). The Bank
of New York is subject to supervision and examination by the
Superintendent of Banks of the State of New York and the Board of
Governors of the Federal Reserve System, and its deposits are insured by
the Federal Deposit Insurance Corporation to the extent permitted by law.
The Trustee must be a banking corporation organized under the laws of the
United States or any state which is authorized under such laws to exercise
corporate trust powers and must have at all times an aggregate capital,
surplus and undivided profits of not less than $5,000,000. The duties of
the Trustee are primarily ministerial in nature. The Trustee did not
participate in the selection of Securities for the portfolio of the Trust.

The Trustee shall not be liable or responsible in any way for
taking any action, or for refraining from taking any action, in good faith
pursuant to the Trust Agreement, or for errors in judgment; or for any
disposition of any moneys, Bonds or Certificates in accordance with the
Trust Agreement, except in cases of its own willful misfeasance, bad
faith, gross negligence or reckless disregard of its obligations and
duties; provided, however, that the Trustee shall not in any event be
liable or responsible for any evaluation made by the Evaluator. In
addition, the Trustee shall not be liable for any taxes or other
governmental charges imposed upon or in respect of the Bonds or the Trust
which it may be required to pay under current or future law of the United
States or any other taxing authority having jurisdiction. The Trustee
shall not be liable for depreciation or loss incurred by reason of the
sale by the Trustee of any of the Bonds pursuant to the Trust Agreement.

For further information relating to the responsibilities of the
Trustee under the Trust Agreement, see "Rights of Certificateholders".

The Trustee may resign by executing an instrument in writing and
filing the same with the Sponsor, and mailing a copy of a notice of
resignation to all Certificateholders. In such an event the Sponsor is
obligated to appoint a successor Trustee as soon as possible. In
addition, if the Trustee becomes incapable of acting or becomes bankrupt
or its affairs are taken over by public authorities, the Sponsor may
remove the Trustee and appoint a successor as provided in the Trust
Agreement. Notice of such removal and appointment shall be mailed to each
Certificateholder by the Sponsor. If upon resignation of the Trustee no
successor has been appointed and has accepted the appointment within
thirty days after notification, the retiring Trustee may apply to a court
of competent jurisdiction for the appointment of a successor. The
resignation or removal of the Trustee becomes effective only when the
successor Trustee accepts its appointment as such or when a court of
competent jurisdiction appoints a successor Trustee. Upon execution of a
written acceptance of such appointment by such successor Trustee, all the
rights, powers, duties and obligations of the original Trustee shall vest
in the successor.

Any corporation into which the Trustee may be merged or with
which it may be consolidated, or any corporation resulting from any merger
or consolidation to which the Trustee shall be a party, shall be the
successor Trustee. The Trustee must always be a banking corporation
organized under the laws of the United States or any State and have at all
times an aggregate capital, surplus and undivided profits of not less than
$2,500,000.

The Evaluator

The Evaluator is Kenny S&P Evaluation Services, a division of
Kenny Information Systems, Inc. with main offices located at 65 Broadway,
New York, New York 10006. The Evaluator is a wholly-owned subsidiary of
McGraw-Hill, Inc. The Evaluator is a registered investment advisor and
also provides financial information services.

The Trustee, the Sponsor and Certificateholders may rely on any
evaluation furnished by the Evaluator and shall have no responsibility for
the accuracy thereof. Determinations by the Evaluator under the Trust
Agreement shall be made in good faith upon the basis of the best
information available to it, provided, however, that the Evaluator shall
be under no liability to the Trustee, the Sponsor, or Certificateholders
for errors in judgment, except in cases of its own willful misfeasance,
bad faith, gross negligence or reckless disregard of its obligations and
duties.

The Evaluator may resign or may be removed by the Sponsor and
the Trustee, and the Sponsor and the Trustee are to use their best efforts
to appoint a satisfactory successor. Such resignation or removal shall
become effective upon the acceptance of appointment by the successor
Evaluator. If upon resignation of the Evaluator no successor has accepted
appointment within thirty days after notice of resignation, the Evaluator
may apply to a court of competent jurisdiction for the appointment of a
successor.

TRUST EXPENSES AND CHARGES

At no cost to the Trust, the Sponsor has borne all the expenses
of creating and establishing the Trust, including the cost of initial
preparation and execution of the Trust Agreement, registration of the
Trust and the Units under the Investment Company Act of 1940 and the
Securities Act of 1933, preparation and printing of the Certificates, the
fees of the Evaluator during the initial public offering, legal and
auditing expenses, advertising and selling expenses, initial fees and
expenses of the Trustee and other out-of-pocket expenses.

The Sponsor will not charge the Trust a fee for its services as
such. See "Sponsor's Profits".

The Trustee will receive for its ordinary recurring services to
the Trust an annual fee in the amount set forth under "Summary of
Essential Information" in Part A of this Prospectus. For a discussion of
the services performed by the Trustee pursuant to its obligations under
the Trust Agreement, see "Trust Administration" and "Rights of Certifi-
cateholders".

The Evaluator will receive, for each daily evaluation of the
Bonds in the Trust, a fee in the amount set forth under "Summary of
Essential Information" in Part A of this Prospectus.

The Trustee's and Evaluator's fees are payable monthly as of the
Record Date from the Interest Account to the extent funds are available
and then from the Principal Account. Both fees may be increased without
approval of the Certificateholders by amounts not exceeding proportionate
increases in consumer prices for services as measured by the United States
Department of Labor's Consumer Price Index entitled "All Services Less
Rent".

The following additional charges are or may be incurred by the
Trust: all expenses (including counsel and auditing fees) of the Trustee
incurred and advances made in connection with its activities under the
Trust Agreement, including the expenses and costs of any action undertaken
by the Trustee to protect the Trust and the rights and interests of the
Certificateholders; fees of the Trustee for any extraordinary services
performed under the Trust Agreement; indemnification of the Trustee for
any loss or liability accruing to it without gross negligence, bad faith
or willful misconduct on its part, arising out of or in connection with
its acceptance or administration of the Trust; indemnification of the
Sponsor for any loss, liabilities and expenses incurred in acting as
Sponsor of the Trust without gross negligence, bad faith or willful
misconduct on its part; and all taxes and other governmental charges
imposed upon the Bonds or any part of the Trust (no such taxes or charges
are being levied, made or, to the knowledge of the Sponsor, contemplated).
The above expenses, including the Trustee's fees, when paid by or owing to
the Trustee are secured by a first lien on the Trust. In addition, the
Trustee is empowered to sell Bonds in order to make funds available to pay
all expenses.

EXCHANGE PRIVILEGE AND CONVERSION OFFER

Exchange Privilege

Certificateholders may elect to exchange any or all of their
Units of these Trusts for Units of one or more of any available series of
Insured Municipal Securities Trust, Municipal Securities Trust, New York
Municipal Trust, Mortgage Securities Trust, A Corporate Trust or Equity
Securities Trust (upon receipt by Equity Securities Trust of an
appropriate exemptive order from the Securities and Exchange Commission)
(the "Exchange Trusts") at a reduced sales charge as set forth below.
Under the Exchange Privilege, the Sponsor's repurchase price of the Units
being surrendered, and only after the initial offering period is
completed, will be based on the aggregate bid price of the Bonds in the
particular Trust portfolio. Units in an Exchange Trust then will be sold
to the Certificateholder at a price based on the aggregate offer price of
the Bonds in the Exchange Trust portfolio during the initial public
offering period of the Exchange Trust (or for Units of Equity Securities
Trust, based on the market value of the underlying securities in the
Equity Trust portfolio); or based on the aggregate bid price of the Bonds
in the Exchange Trust portfolio if its initial public offering has been
completed, plus accrued interest (or for Units of Equity Securities Trust,
based on the market value of the underlying securities in the Equity Trust
portfolio) and a reduced sales charge as set forth below.

Except for unitholders who wish to exercise the Exchange
Privilege within the first five months of their purchase of Units of
Trust, the sales charge applicable to the purchase of units of an Exchange
Trust shall be $15 per unit (or per 1,000 Units for the Mortgage
Securities Trust or per 100 Units for the Equity Securities Trust)
(approximately 1.5% of the price of each Exchange Trust unit (or 1,000
Units for the Mortgage Securities Trust or 100 Units for the Equity
Securities Trust)). For unitholders who wish to exercise the Exchange
Privilege within the first five months of their purchase of Units of
Trust, the sales charge applicable to the purchase of units of an Exchange
Trust shall be the greater of (i) $15 per unit (or per 1,000 Units for the
Mortgage Securities Trust or per 100 Units for the Equity Securities
Trust), or (ii) an amount which when coupled with the sales charge paid by
the unitholder upon his original purchase of Units of the Trust at least
equals the sales charge applicable in the direct purchase of units of an
Exchange Trust. The Exchange Privilege is subject to the following
conditions:

(1) The Sponsor must be maintaining a secondary market in both
the Units of the Trust held by the Certificateholder and the Units of
the available Exchange Trust. While the Sponsor has indicated its
intention to maintain a market in the Units of all Trusts sponsored
by it, the Sponsor is under no obligation to continue to maintain a
secondary market and therefore there is no assurance that the
Exchange Privilege will be available to a Certificateholder at any
specific time in the future. At the time of the Certificateholder's
election to participate in the Exchange Privilege, there also must be
Units of the Exchange Trust available for sale, either under the
initial primary distribution or in the Sponsor's secondary market.

(2) Exchanges will be effected in whole units only. Any excess
proceeds from the Units surrendered for exchange will be remitted and
the selling Certificateholder will not be permitted to advance any
new funds in order to complete an exchange. Units of the Mortgage
Securities Trust may only be acquired in blocks of 1,000 Units.
Units of the Equity Securities Trust may only be acquired in blocks
of 100 Units.

(3) The Sponsor reserves the right to suspend, modify or
terminate the Exchange Privilege. The Sponsor will provide
unitholders of the Trust with 60 days' prior written notice of any
termination or material amendment to the Exchange Privilege, provided
that, no notice need be given if (i) the only material effect of an
amendment is to reduce or eliminate the sales charge payable at the
time of the exchange, to add one or more series of the Trust eligible
for the Exchange Privilege or to delete a series which has been
terminated from eligibility for the Exchange Privilege, (ii) there is
a suspension of the redemption of units of an Exchange Trust under
Section 22(e) of the Investment Company Act of 1940, or (iii) an
Exchange Trust temporarily delays or ceases the sale of its units
because it is unable to invest amounts effectively in accordance with
its investment objectives, policies and restrictions. During the 60
day notice period prior to the termination or material amendment of
the Exchange Privilege described above, the Sponsor will continue to
maintain a secondary market in the units of all Exchange Trusts that
could be acquired by the affected unitholders. Unitholders may,
during this 60 day period, exercise the Exchange Privilege in
accordance with its terms then in effect. In the event the Exchange
Privilege is not available to a Certificateholder at the time he
wishes to exercise it, the Certificateholder will immediately be
notified and no action will be taken with respect to his Units
without further instructions from the Certificateholder.

To exercise the Exchange Privilege, a Certificateholder should
notify the Sponsor of his desire to exercise his Exchange Privilege. If
Units of a designated, outstanding series of an Exchange Trust are at the
time available for sale and such Units may lawfully be sold in the state
in which the Certificateholder is a resident, the Certificateholder will
be provided with a current prospectus or prospectuses relating to each
Exchange Trust in which he indicates an interest. He may then select the
Trust or Trusts into which he desires to invest the proceeds from his sale
of Units. The exchange transaction will operate in a manner essentially
identical to a secondary market transaction except that units may be
purchased at a reduced sales charge.

Example: Assume that after the initial public offering has been
completed, a Certificateholder has five units of a Trust with a current
value of $700 per unit which he has held for more than 5 months and the
Certificateholder wishes to exchange the proceeds for units of a secondary
market Exchange Trust with a current price of $725 per unit. The proceeds
from the Certificateholder's original units will aggregate $3,500. Since
only whole units of an Exchange Trust may be purchased under the Exchange
Privilege, the Certificateholder would be able to acquire four units (or
4,000 Units of the Mortgage Securities Trust or 400 Units of the Equity
Securities Trust) for a total cost of $2,960 ($2,900 for unit and $60 for
the sales charge). The remaining $540 would be remitted to the
Certificateholder in cash. If the Certificateholder acquired the same
number of units at the same time in a regular secondary market
transaction, the price would have been $3,068.80 ($2,900 for units and
$168.80 for the sales charge, assuming a 5 1/2% sales charge times the
public offering price).

The Conversion Offer

Unit owners of any registered unit investment trust for which
there is no active secondary market in the units of such trust (a
"Redemption Trust") may elect to redeem such units and apply the proceeds
of the redemption to the purchase of available Units of one or more series
of A Corporate Trust, Municipal Securities Trust, Insured Municipal
Securities Trust, Mortgage Securities Trust, New York Municipal Trust or
Equity Securities Trust (upon receipt by the Equity Securities Trust of an
appropriate exemptive order from the Securities and Exchange Commission)
sponsored by Bear, Stearns & Co. Inc. or the Sponsor (the "Conversion
Trusts") at the Public Offering Price for units of the Conversion Trust
based on a reduced sales charge as set forth below. Under the Conversion
Offer, units of the Redemption Trust must be tendered to the trustee of
such trust for redemption at the redemption price, which is based upon the
aggregate bid side evaluation of the underlying bonds in such trust and is
generally about 1-1.2% to 2% lower than the offering price for such bonds
(or for Units of Equity Securities Trust, based on the market value of the
underlying securities in the Equity Trust portfolio). The purchase price
of the units in the Conversion Trust will be based on the aggregate offer
price of the bonds in the Conversion Trust Portfolio during its initial
offering price (or for Units of Equity Securities Trust, based on the
market value of the underlying securities in the Equity Trust portfolio);
or, at a price based on the aggregate bid price of the underlying bonds if
the initial public offering of the Conversion Trust has been completed,
plus accrued interest (or for Units of Equity Securities Trust, based on
the market value of the underlying securities in the Equity Trust
portfolio) and a sales charge as set forth below.

Except for unitholders who wish to exercise the Conversion Offer
within the first five months of their purchase of units of a Redemption
Trust, the sales charge applicable to the purchase of Units of the
Conversion Trust shall be $15 per Unit (or per 1,000 Units for the
Mortgage Securities Trust or per 100 Units for the Equity Securities
Trust). For unitholders who wish to exercise the Conversion Offer within
the first five months of their purchase of units of a Redemption Trust,
the sales charge applicable to the purchase of Units of a Conversion Trust
shall be the greater of (i) $15 per Unit (or per 1,000 Units for the
Mortgage Securities Trust or per 100 Units for the Equity Securities
Trust) or (ii) an amount which when coupled with the sales charge paid by
the unitholder upon his original purchase of units of the Redemption Trust
at least equals the sales charge applicable in the direct purchase of
Units of a Conversion Trust. The Conversion Offer is subject to the
following limitations:

(1) The Conversion Offer is limited only to unit owners of any
Redemption Trust, defined as a unit investment trust for which there
is no active secondary market at the time the Certificateholder
elects to participate in the Conversion Offer. At the time of the
unit owner's election to participate in the Conversion Offer, there
also must be available units of a Conversion Trust, either under a
primary distribution or in the Sponsor's secondary market.

(2) Exchanges under the Conversion Offer will be effected in
whole units only. Unit owners will not be permitted to advance any
new funds in order to complete an exchange under the Conversion
Offer. Any excess proceeds from units being redeemed will be
returned to the unit owner. Units of the Mortgage Securities Trust
may only be acquired in blocks of 1,000 units. Units of the Equity
Securities Trust may only be acquired in blocks of 100 Units.

(3) The Sponsor reserves the right to modify, suspend or
terminate the Conversion Offer at any time without notice to unit
owners of Redemption Trusts. In the event the Conversion Offer is
not available to a unit owner at the time he wishes to exercise it,
the unit owner will be notified immediately and no action will be
taken with respect to his units without further instruction from the
unit owner. The Sponsor also reserves the right to raise the sales
charge based on actual increases in the Sponsor's costs and expenses
in connection with administering the program, up to a maximum sales
charge of $20 per unit (or per 1,000 units for the Mortgage
Securities Trust or per 100 Units for the Equity Securities Trust).

To exercise the Conversion Offer, a unit owner of a Redemption
Trust should notify his retail broker of his desire to redeem his
Redemption Trust Units and use the proceeds from the redemption to
purchase Units of one or more of the Conversion Trusts. If Units of a
designated, outstanding series of a Conversion Trust are at that time
available for sale and if such Units may lawfully be sold in the state in
which the unit owner is a resident, the unit owner will be provided with a
current prospectus or prospectuses relating to each Conversion Trust in
which he indicates an interest. He then may select the Trust or Trusts
into which he decides to invest the proceeds from the sale of his Units.
The transaction will be handled entirely through the unit owner's retail
broker. The retail broker must tender the units to the trustee of the
Redemption Trust for redemption and then apply the proceeds to the
redemption toward the purchase of units of a Conversion Trust at a price
based on the aggregate offer or bid side evaluation per Unit of the
Conversion Trust, depending on which price is applicable, plus accrued
interest and the applicable sales charge. The certificates must be
surrendered to the broker at the time the redemption order is placed and
the broker must specify to the Sponsor that the purchase of Conversion
Trust Units is being made pursuant to the Conversion Offer. The unit
owner's broker will be entitled to retain $5 of the applicable sales
charge.

Example: Assume a unit owner has five units of a Redemption
Trust which has held for more than 5 months with a current redemption
price of $675 per unit based on the aggregate bid price of the underlying
bonds and the unit owner wishes to participate in the Conversion Offer and
exchange the proceeds for units of a secondary market Conversion Trust
with a current price of $750 per Unit. The proceeds from the unit owner's
redemption of units will aggregate $3,375. Since only whole units of a
Redemption Trust may be purchased under the Conversion Offer, the unit
owner will be able to acquire four units of the Conversion Trust (or 4,000
units of the Mortgage Securities Trust or 400 Units for the Equity
Securities Trust) for a total cost of $2,860 ($2,800 for units and $60 for
the sales charge). The remaining $515 would be remitted to the unit owner
in cash. If the unit owner acquired the same number of Conversion Trust
units at the same time in a regular secondary market transaction, the
price would have been $2,962.96 ($2,800 for units and $162.96 sales
charge, assuming a 5 1/2% sales charge times the public offering price).

Description Of The Exchange Trusts And The Conversion Trusts

A Corporate Trust may be an appropriate investment vehicle for
an investor who is more interested in a higher current return on his
investment (although taxable) than a tax-exempt return (resulting from the
fact that the current return from taxable fixed income securities is
normally higher than that available from tax-exempt fixed income
securities). Municipal Securities Trust and New York Municipal Trust may
be appropriate investment vehicles for an investor who is more interested
in tax-exempt income. The interest income from New York Municipal Trust
is, in general, also exempt from New York State and local New York income
taxes, while the interest income from Municipal Securities Trust is
subject to applicable New York State and local New York taxes, except for
that portion of the income which is attributable to New York obligations
in the Trust portfolio, if any. The interest income from each State Trust
of the Municipal Securities Trust, Multi-State Series is, in general,
exempt from state and local taxes when held by residents of the state
where the issuers of bonds in such State Trusts are located. The Insured
Municipal Securities Trust combines the advantages of providing interest
income free from regular federal income tax under existing law with the
added safety of irrevocable insurance. Insured Navigator Series further
combines the advantages of providing interest income free from regular
federal income tax and state and local taxes when held by residents of the
state where issuers of bonds in such state trusts are located with the
added safety of irrevocable insurance. Mortgage Securities Trust offers
an investment vehicle for investors who are interested in obtaining safety
of capital and a high level of current distribution of interest income
through investment in a fixed portfolio of collateralized mortgage
obligations. Equity Securities Trust offers investors an opportunity to
achieve capital appreciation together with a high level of current income.

Tax Consequences Of The Exchange Privilege And The Conversion Offer

A surrender of units pursuant to the Exchange Privilege or the
Conversion Offer normally will constitute a "taxable event" to the Cer-
tificateholder under the Code. The Certificateholder will recognize a tax
gain or loss that will be of a long or short-term capital or ordinary
income nature depending on the length of time the units have been held and
other factors. A Certificateholder's tax basis in the Units acquired
pursuant to the Exchange Privilege or Conversion Offer will be equal to
the purchase price of such Units. Investors should consult their own tax
advisors as to the tax consequences to them of exchanging or redeeming
units and participating in the Exchange Privilege or Conversion Offer.

OTHER MATTERS

Legal Opinions

The legality of the Units originally offered and certain matters
relating to federal tax law have been passed upon by Messrs. Battle
Fowler, 280 Park Avenue, New York, New York 10017, or Berger Steingut
Tarnoff & Stern, 600 Madison Avenue, New York, New York 10022, as counsel
for the Sponsor. Messrs. Carter, Ledyard & Milburn, Two Wall Street, New
York, New York 10005 have acted as counsel for United States Trust Company
of New York. On the initial date of deposit, Messrs. Booth & Baron acted
as counsel for The Bank of New York.

Independent Auditors

The financial statements of the Trust included in Part A of this
Prospectus, as of the dates set forth in Part A, have been examined by
KPMG Peat Marwick, independent certified public accountants for the
periods indicated in its reports appearing herein. The financial
statements of KPMG Peat Marwick have been so included in reliance on its
report given upon the authority of said firm as experts in accounting
and auditing.

DESCRIPTION OF BOND RATINGS*

Standard & Poor's Corporation

A brief description of the applicable Standard & Poor's
Corporation rating symbols and their meanings is as follows:

A Standard & Poor's corporate or municipal bond rating is a
current assessment of the creditworthiness of an obligor with respect to a
specific debt obligation. This assessment of creditworthiness may take
into consideration obligors such as guarantors, insurers, or lessees.

The bond rating is not a recommendation to purchase or sell a
security, inasmuch as it does not comment as to market price.

The ratings are based on current information furnished to
Standard & Poor's by the issuer and obtained by Standard & Poor's from
other sources it considers reliable. The ratings may be changed,
suspended or withdrawn as a result of changes in, or unavailability of,
such information.

* As described by the rating agencies.

<PAGE>

The ratings are based, in varying degrees, on the following
considerations:

(1) Likelihood of default--capacity and willingness of the obligor
as to the timely payment of interest and repayment of principal in
accordance with the terms of the obligation.

(2) Nature of and provisions of the obligation.

(3) Protection afforded by, and relative position of, the obligation
in the event of bankruptcy, reorganization or other arrangement under the
laws of bankruptcy and other laws affecting creditors' rights.

AAA -- This is the highest rating assigned by Standard & Poor's
to a debt obligation and indicates an extremely strong capacity to pay
principal and interest.

AA -- Bonds rated AA also qualify as high-quality debt
obligations. Capacity to pay principal and interest is very strong, and
they differ from AAA issues only in small degrees.

A -- Bonds rated A have a strong capacity to pay principal and
interest, although they are somewhat more susceptible to the adverse
effects of changes in circumstances and economic conditions.

BBB -- Bonds rated BBB are regarded as having an adequate
capacity to pay principal and interest. Whereas they normally exhibit
adequate protection parameters, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to pay
principal and interest for bonds in this category than for bonds in the A
category.

Plus (+) or Minus (-): To provide more detailed indications of
credit quality, the ratings from "AA" to "BB" may be modified by the
addition of a plus or minus sign to show relative standing within the
major rating categories.

Provisional Ratings -- (Prov.) following a rating indicates the
rating is provisional, which assumes the successful completion of the
project being financed by the issuance of the bonds being rated and
indicates that payment of debt service requirements is largely or entirely
dependent upon the successful and timely completion of the project. This
rating, however, while addressing credit quality subsequent to completion,
makes no comment on the likelihood of, or the risk of default upon failure
of, such completion. Accordingly, the investor should exercise his own
judgment with respect to such likelihood and risk.

Moody's Investors Service, Inc.

A brief description of the applicable Moody's Investors Service,
Inc.'s rating symbols and their meanings is as follows:

Aaa -- Bonds which are rated Aaa are judged to be of the best
quality. They carry the smallest degree of investment risk and are
generally referred to as "gilt edge". Interest payments are protected by
a large or by an exceptionally stable margin and principal is secure.
While the various protective elements are likely to change, such changes
as can be visualized are most unlikely to impair the fundamentally strong
position of such issues.

Aa -- Bonds which are rated Aa are judged to be of high quality
by all standards. Together with the Aaa group they comprise what are
generally known as high grade bonds. They are rated lower than the best
bonds because margins of protection may not be as large as in Aaa
securities or fluctuation of protective elements may be of greater
amplitude or there may be other elements present which make the long term
risks appear somewhat larger than in Aaa securities.

A -- Bonds which are rated A possess many favorable investment
attributes and are to be considered as upper medium grade obligations.
Factors giving security to principal and interest are considered adequate
but elements may be present which suggest a susceptibility to impairment
sometime in the future.

Baa -- Bonds which are rated Baa are considered as medium grade
obligations, i.e., they are neither highly protected nor poorly secured.
Interest payments and principal security appear adequate for the present
but certain protective elements may be lacking or may be
characteristically unreliable over any great length of time. Such bonds
lack outstanding investment characteristics and in fact have speculative
characteristics as well.
Those bonds in the A and Baa group which Moody's believes
possess the strongest investment attributes are designated by the symbol
A 1 and Baa 1. Other A bonds comprise the balance of the group. These
rankings (1) designate the bonds which offer the maximum in security
within their quality group, (2) designate bonds which can be bought for
possible upgrading in quality and (3) additionally afford the investor an
opportunity to gauge more precisely the relative attractiveness of
offerings in the market place.

Moody's applies numerical modifiers, 1, 2, and 3 in each generic
rating classification from Aa through B in its corporate bond rating
system. The modifier 1 indicates that the security ranks in the higher
end of its generic rating category; the modifier 2 indicates a mid-range
ranking; and the modifier 3 indicates that the issue ranks in the lower
end of its generic rating category.

Con-Bonds for which the security depends upon the completion of
some act or the fulfillment of some condition are rated conditionally.
These are debt obligations secured by (a) earnings of projects under
construction, (b) earnings of projects unseasoned in operating experience,
(c) rentals which begin when facilities are completed, or (d) payments to
which some other limiting condition attaches. Rating denotes probable
credit stature upon completion of construction or elimination of basis of
condition.

<PAGE>
FOR USE WITH MUNICIPAL SECURITIES TRUST
SERIES 1-25
1st-34th DISCOUNT SERIES

==========================================================================

AUTHORIZATION FOR INVESTMENT IN MUNICIPAL SECURITIES TRUST

TRP PLAN - TOTAL REINVESTMENT PLAN

I hereby elect to participate in the TRP Plan and am the owner of _____
units of Series ___/___ Discount Series.

I hereby authorize The Bank of New York, Trustee, to pay all semi-annual
or annual distributions of interest and principal (if any) with respect to
such units to The Bank of New York, as TRP Plan Agent, who shall
immediately invest the distributions in units of the available series of
Municipal Securities Trust.

The foregoing authorization is subject in Date ______________, 19__
all respects to the terms and conditions of
participation set forth in the prospectus
relating to such available series.

___________________________________________
Registered Holder (print) Registered Holder (print)

___________________________________________
Registered Holder Signature Registered Holder Signature
(Two signatures if joint tenancy)

My Brokerage Firm's Name

Street Address

City, State & Zip Code

Salesman's Name ___________________________ Salesman's No.

UNIT HOLDERS NEED ONLY DATE AND SIGN THIS FORM AND MAIL THIS CARD.

==========================================================================

Mail to your Broker
or
The Bank of New York
101 Barclay Street
New York, New York 10286

<PAGE>
FOR USE WITH MUNICIPAL SECURITIES TRUST
SERIES 26-44
35th-72nd DISCOUNT SERIES

==========================================================================

AUTHORIZATION FOR INVESTMENT IN MUNICIPAL SECURITIES TRUST

TRP PLAN - TOTAL REINVESTMENT PLAN

I hereby elect to participate in the TRP Plan and am the owner of _____
units of Series ___/___ Discount Series.

I hereby authorize the United States Trust Company of New York, Trustee,
to pay all semi-annual or annual distributions of interest and principal
(if any) with respect to such units to the United States Trust Company of
New York, as TRP Plan Agent, who shall immediately invest the
distributions in units of the available series of Municipal Securities
Trust.

The foregoing authorization is subject in Date ______________, 19__
all respects to the terms and conditions of
participation set forth in the prospectus
relating to such available series.

___________________________________________
Registered Holder (print) Registered Holder (print)

___________________________________________
Registered Holder Signature Registered Holder Signature
(Two signatures if joint tenancy)

My Brokerage Firm's Name

Street Address

City, State & Zip Code

Salesman's Name ___________________________ Salesman's No.

UNIT HOLDERS NEED ONLY DATE AND SIGN THIS FORM AND MAIL THIS CARD.

==========================================================================

Mail to your Broker
or
United States Trust Company of New York
Attn: UIT Reinvestment Unit A
770 Broadway
New York, New York 10003

<PAGE>

INDEX MUNICIPAL SECURITIES TRUST
(Unit Investment Trust)
Prospectus
Title Page
Dated: April 29, 1994
Summary of Essential Information . . . A-4
Information Regarding the Trust . . . . A-6 Sponsor:
Financial and Statistical Information . A-7
Audit and Financial Information Bear, Stearns & Co. Inc.
Report of Independent Accountants . . F-1 245 Park Avenue
Statements of Net Assets . . . . . . F-2 New York, New York 10167
Statements of Operations . . . . . . F-3 212-272-2500
Statements of Changes in Net Assets . F-4
Notes to Financial Statements . . . . F-5 Trustee:
Portfolio . . . . . . . . . . . . . . F-7
The Trust . . . . . . . . . . . . . . . 1 United States Trust Company
Public Offering . . . . . . . . . . . . 7 of New York
Estimated Long Term Return and 770 Broadway
Estimated Current Return . . . . . . 8 New York, New York 10003
Rights of Certificateholders . . . . . 9 1-800-428-8890
Tax Status . . . . . . . . . . . . . . 11
Liquidity . . . . . . . . . . . . . . . 15 or
Total Reinvestment Plan . . . . . . . . 17
Trust Administration . . . . . . . . . 21 The Bank of New York
Trust Expenses and Charges . . . . . . 25 101 Barclay Street
Exchange Privilege and Conversion Offer 26 New York, New York 10286
Other Matters . . . . . . . . . . . . . 30 1-800-431-8002
Description of Bond Ratings . . . . . . 30
Evaluator:

Parts A and B of this Prospectus do not
contain all of the information set forth in Kenny S&P Evaluation
the registration statement and exhibits Services
relating thereto, filed with the Securities 65 Broadway
and Exchange Commission, Washington, D.C., New York, New York 10006
under the Securities Act of 1933, and to
which reference is made.

* * *

This Prospectus does not constitute an offer to sell, or a
solicitation of an offer to buy, securities in any state to any person to
whom it is not lawful to make such offer in such state.

* * *

No person is authorized to give any information or to make any
representations not contained in Parts A and B of this Prospectus; and any
information or representation not contained herein must not be relied upon
as having been authorized by the Trust, the Trustee, the Evaluator, or the
Sponsor. The Trust is registered as a unit investment trust under the
Investment Company Act of 1940. Such registration does not imply that the
Trust or any of its Units have been guaranteed, sponsored, recommended or
approved by the United States or any state or any agency or officer
thereof.

<PAGE>

PART II

ADDITIONAL INFORMATION NOT REQUIRED
IN PROSPECTUS

CONTENTS OF REGISTRATION STATEMENT

This Post-Effective Amendment to the Registration Statements on Form S-6
comprises the following papers and documents:

The facing sheet on Form S-6.
The Cross-Reference Sheet.
The Prospectus consisting of pages.
Signatures.
Consent of Independent Auditors.
Consent of Counsel (included in Exhibits 99.3.1 and 99.3.1.1).
Consents of the Evaluator including Confirmation of Ratings (included in
Exhibit 99.5.1).

The following exhibits:

99.1.1 -- Form of Reference Trust Agreement, as amended (filed as
Exhibit 1.1 to Amendment No. 1 to Form S-6 Registration
Statements Nos. 2-62605, 2-63595, 2-65899, 2-68167 and
2-68389 of Municipal Securities Trust, Series 1, Series 2,
Series 3, Series 4 and Series 5, respectively, on
February 6, 1979, September 13, 1979, June 10, 1980,
June 27, 1980 and July 29, 1980, respectively, and
incorporated herein by reference).

99.1.1.1 -- Trust Indenture and Agreement for New York Municipal
Trust, Series 1 (and Subsequent Series) (filed as
Exhibit 1.1.1 to Amendment No. 2 to Form S-6 Registration
Statement No. 2-62505 of New York Municipal Trust,
Series 1 on November 21, 1978 and incorporated herein by
reference).

99.1.3.4 -- Certificate of Incorporation of Bear, Stearns & Co. Inc.,
as amended (filed as Exhibit 99.1.3.4 to Form S-6
Registration Statement Nos. 33-50891 and 33-50901 of
Insured Municipal Securities Trust, New York Navigator
Insured Series 15 and New Jersey Navigator Insured
Series 11; and Municipal Securities Trust, Multi-State
Series 44, respectively, on December 9, 1993 and
incorporated herein by reference).

99.1.3.5 -- By-Laws of Bear, Stearns & Co. Inc., as amended (filed as
Exhibit 99.1.3.5 to Form S-6 Registration Statement Nos.
33-50891 and 33-50901 of Insured Municipal Securities
Trust, New York Navigator Insured Series 15 and New Jersey
Navigator Insured Series 11; and Municipal Securities
Trust, Multi-State Series 44, respectively, on December 9,
1993 and incorporated herein by reference).

99.1.4 -- Form of Agreement Among Underwriters (filed as Exhibit 1.4
to Amendment No. 1 to Form S-6 Registration Statement
No. 2-62605 of Municipal Securities Trust, Series 1 on
December 15, 1978 and incorporated herein by reference).

99.2.1 -- Form of Certificate (filed as Exhibit 2.1 to Amendment
No. 1 to Form S-6 Registration Statement Nos. 2-62605,
2-63595, 2-65899, 2-68167 and 2-68389 of Municipal
Securities Trust, Series 1, Series 2, Series 3, Series 4
and Series 5, respectively, on February 6, 1979,
September 13, 1979, June 10, 1980, June 27, 1980 and
July 29, 1980, respectively, and incorporated herein by
reference).

99.3.1 -- Opinion of Battle Fowler (formerly Battle, Fowler, Jaffin
& Kheel) as to the legality of the securities being
registered, including their consent to the delivery
thereof and to the use of their name under the headings
"Tax Status" and "Legal Opinions" in the Prospectus, and
to the delivery of their opinion regarding tax status of
the Trust (filed as Exhibit 3.1 to Amendment No. 1 to
Form S-6 Registration Statements Nos. 2-62605, 2-63595,
2-65899, 2-68167 and 2-68389 of Municipal Securities
Trust, Series 1, Series 2, Series 3, Series 4, and
Series 5, respectively, on February 6, 1979, September 13,
1979, June 10, 1980, June 27, 1980 and July 29, 1980,
respectively, and incorporated herein by reference).

99.3.1.1 -- Opinion of Battle Fowler (formerly Battle, Fowler, Jaffin
& Kheel) as to tax status of securities being registered
(filed as Exhibit 3.1.1 to Amendment No. 1 to Form S-6
Registration Statements Nos. 2-62605, 2-63595, 2-65899,
2-68167 and 2-68389 of Municipal Securities Trust,
Series 1, Series 2, Series 3, Series 4 and Series 5,
respectively, on February 6, 1979, September 13, 1979,
June 10, 1980, June 27, 1980 and July 29, 1980,
respectively, and incorporated herein by reference).

*99.5.1 -- Consents of the Evaluator including Confirmation of
Ratings.

99.6.0 -- Power of Attorney of Bear, Stearns & Co. Inc., the
Depositor, by its Officers and a majority of its Directors
(filed as Exhibit 6.0 to Post-Effective Amendment No. 8 to
Form S-6 Registration Statements Nos. 2-92113, 2-92660,
2-93073, 2-93884 and 2-94545 of Municipal Securities
Trust, Multi-State Series 4, 5, 6, 7 and 8, respectively,
on October 30, 1992 and incorporated herein by reference).
* Being filed by this Amendment.

<PAGE>
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the
registrants, Municipal Securities Trust, Series 1, Series 2, Series 3,
Series 4 and Series 5 certify that they have met all of the requirements
for effectiveness of this Post-Effective Amendment to the Registration
Statements pursuant to Rule 485(b) under the Securities Act of 1933. The
registrants have duly caused this Post-Effective Amendment to the
Registration Statements to be signed on their behalf by the undersigned,
thereunto duly authorized, in the City of New York and State of New York
on the 22nd day of April, 1994.

MUNICIPAL SECURITIES TRUST, SERIES 1,
SERIES 2, SERIES 3, SERIES 4, and SERIES 5
(Registrants)

BEAR, STEARNS & CO. INC.
(Depositor)

By: PETER J. DeMARCO
(Authorized Signator)

Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment to the Registration Statements has been signed
below by the following persons who constitute the principal officers and a
majority of the directors of Bear, Stearns & Co. Inc., the Depositor, in
the capacities and on the dates indicated.

Name Title Date

ALAN C. GREENBERG Chairman of the Board, Chief )
Executive Officer, Director and )
Senior Managing Director )
JAMES E. CAYNE President, Director and Senior )
Managing Director )April 22, 1994
ALVIN H. EINBENDER Chief Operating Officer, Executive)
Vice President, Director and )
Senior Managing Director )
JOHN C. SITES, JR. Executive Vice President, Director)
and Senior Managing Director )By:PETER J. DeMARCO
MICHAEL L. TARNOPOL Executive Vice President, Director)
and Senior Managing Director )
VINCENT J. MATTONE Executive Vice President, Director)Attorney-in-Fact*
and Senior Managing Director )
ALAN D. SCHWARTZ Executive Vice President, Director)
and Senior Managing Director )
DOUGLAS P.C. NATION Director and Senior Managing )
Director )
WILLIAM J. MONTGORIS Chief Financial Officer, Senior )
Vice President-Finance and Senior )
Managing Director )
KENNETH L. EDLOW Secretary and Senior Managing )
Director )
MICHAEL MINIKES Treasurer and Senior Managing )
Director )
MICHAEL J. ABATEMARCO Controller, Assistant Secretary )
and Senior Managing Director )
MARK E. LEHMAN Senior Vice President - General )
Counsel and Senior Managing )
Director )
FREDERICK B. CASEY Assistant Treasurer and Senior )
Managing Director )

_______________

* An executed power of attorney was filed as Exhibit 6.0 to Post-
Effective Amendment No. 8 to Registration Statements Nos. 2-92113,
2-92660, 2-93073, 2-93884 and 2-94545 on October 30, 1992.

<PAGE>
CONSENT OF INDEPENDENT AUDITORS

We consent to the use in these Post-Effective Amendments to the Registration
Statements of our reports on the financial statements of Municipal Securities
Trust, Series 1; Municipal Securities Trust, Series 2; Municipal Securities
Trust, Series 3; Municipal Securities Trust, Series 4 and Municipal Securities
Trust, Series 5 included herein and to the reference to our firm under the
heading "Independent Auditors" in the Prospectus which is part of this
Registration Statement.

KPMG PEAT MARWICK

New York, New York
April 15, 1994

<PAGE>
EXHIBIT INDEX

Exhibit Description Page No.

99.1.1 Form of Reference Trust Agreement, as
amended (filed as Exhibit 1.1 to Amendment
No. 1 to Form S-6 Registration Statements
Nos. 2-62605, 2-63595, 2-65899, 2-68167
and 2-68389 of Municipal Securities Trust,
Series 1, Series 2, Series 3, Series 4 and
Series 5, respectively, on February 6,
1979, September 13, 1979, June 10, 1980,
June 27, 1980 and July 29, 1980,
respectively, and incorporated herein by
reference).

99.1.1.1 Trust Indenture and Agreement for New York
Municipal Trust, Series 1 (and Subsequent
Series) (filed as Exhibit 1.1.1 to
Amendment No. 2 to Form S-6 Registration
Statement No. 2-62505 of New York
Municipal Trust, Series 1 on November 21,
1978 and incorporated herein by
reference).

99.1.3.4 Certificate of Incorporation of Bear,
Stearns & Co. Inc., as amended (filed as
Exhibit 99.1.3.4 to Form S-6 Registration
Statement Nos. 33-50891 and 33-50901 of
Insured Municipal Securities Trust, New
York Navigator Insured Series 15 and New
Jersey Navigator Insured Series 11; and
Municipal Securities Trust, Multi-State
Series 44, respectively, on December 9,
1993 and incorporated herein by
reference).

99.1.3.5 By-Laws of Bear, Stearns & Co. Inc., as
amended (filed as Exhibit 99.1.3.5 to Form
S-6 Registration Statement Nos. 33-50891
and 33-50901 of Insured Municipal
Securities Trust, New York Navigator
Insured Series 15 and New Jersey Navigator
Insured Series 11; and Municipal
Securities Trust, Multi-State Series 44,
respectively, on December 9, 1993 and
incorporated herein by reference).

99.1.4 Form of Agreement Among Underwriters
(filed as Exhibit 1.4 to Amendment No. 1
to Form S-6 Registration Statement
No. 2-62605 of Municipal Securities Trust,
Series 1 on December 15, 1978 and
incorporated herein by reference).

99.2.1 Form of Certificate (filed as Exhibit 2.1
to Amendment No. 1 to Form S-6
Registration Statement Nos. 2-62605,
2-63595, 2-65899, 2-68167 and 2-68389 of
Municipal Securities Trust, Series 1,
Series 2, Series 3, Series 4 and Series 5,
respectively, on February 6, 1979,
September 13, 1979, June 10, 1980,
June 27, 1980 and July 29, 1980,
respectively, and incorporated herein by
reference).

99.3.1 Opinion of Battle Fowler (formerly Battle,
Fowler, Jaffin & Kheel) as to the legality
of the securities being registered,
including their consent to the delivery
thereof and to the use of their name under
the headings "Tax Status" and "Legal
Opinions" in the Prospectus, and to the
delivery of their opinion regarding tax
status of the Trust (filed as Exhibit 3.1
to Amendment No. 1 to Form S-6
Registration Statements Nos. 2-62605
2-63595, 2-65899, 2-68167 and 2-68389 of
Municipal Securities Trust, Series 1,
Series 2, Series 3, Series 4, and
Series 5, respectively, on February 6,
1979, September 13, 1979, June 10, 1980,
June 27, 1980 and July 29, 1980,
respectively, and incorporated herein by
reference).

99.3.1.1 Opinion of Battle Fowler (formerly Battle,
Fowler, Jaffin & Kheel) as to tax status
of securities being registered, including
their consent to the filing thereof and to
the use of their name under the heading
"Tax Status" in the Prospectus (filed as
Exhibit 3.1.1 to Amendment No. 1 to
Form S-6 Registration Statements
Nos. 2-62605, 2-63595, 2-65899, 2-68167
and 2-68389 of Municipal Securities Trust,
Series 1, Series 2, Series 3, Series 4 and
Series 5, respectively, on February 6,
1979, September 13, 1979, June 10, 1980,
June 27, 1980 and July 29, 1980,
respectively, and incorporated herein by
reference).

99.5.1 Consents of the Evaluator including
Confirmation of
Ratings...................................

99.6.0 Power of Attorney of Bear, Stearns & Co.
Inc., the Depositor, by its Officers and a
majority of its Directors (filed as
Exhibit 6.0 to Post-Effective Amendment
No. 8 to Form S-6 Registration Statements
Nos. 2-92113, 2-92660, 2-93073, 2-93884
and 2-94545 of Municipal Securities Trust,
Multi-State Series 4, 5, 6, 7 and 8,
respectively, on October 30, 1992 and
incorporated herein by reference).

KENNY S&P EVALUATION SERVICES
A Division of Kenny Information Systems, Inc.

65 Broadway
New York, New York 10006-2511
Telephone 212/770-4990

F.A. Shinal
Senior Vice President
Chief Financial Officer

April 29, 1994

Bear, Stearns & Co., Inc.
245 Park Avenue
New York, NY 10167

RE: Municipal Securities Trust
Series 1
Gentlemen:

We have examined the post-effective Amendment to the
Registration Statement File No. 2-62605 for the above-captioned trust. We
hereby acknowledge that Kenny S&P Evaluation Services, a division of Kenny
Information Systems, Inc. is currently acting as the evaluator for the
trust. We hereby consent to the use in the Amendment of the reference to
Kenny S&P Evaluation Services as evaluator.

In addition, we hereby confirm that the ratings indicated in the
above-referenced Amendment to the Registration Statement for the
respective bonds comprising the trust portfolio are the ratings currently
indicated in our KENNYBASE database.

You are hereby authorized to file a copy of this letter with the
Securities and Exchange Commission.

Sincerely,

F. A. Shinal
Senior Vice President
FAS/cns
<PAGE>

KENNY S&P EVALUATION SERVICES
A Division of Kenny Information Systems, Inc.

65 Broadway
New York, New York 10006-2511
Telephone 212/770-4990

F.A. Shinal
Senior Vice President
Chief Financial Officer

April 29, 1994

Bear, Stearns & Co., Inc.
245 Park Avenue
New York, NY 10167

RE: Municipal Securities Trust
Series 2
Gentlemen:

We have examined the post-effective Amendment to the
Registration Statement File No. 2-63595 for the above-captioned trust. We
hereby acknowledge that Kenny S&P Evaluation Services, a division of Kenny
Information Systems, Inc. is currently acting as the evaluator for the
trust. We hereby consent to the use in the Amendment of the reference to
Kenny S&P Evaluation Services as evaluator.

You are hereby authorized to file a copy of this letter with the
Securities and Exchange Commission.

Sincerely,

F. A. Shinal
Senior Vice President
FAS/cns
<PAGE>

KENNY S&P EVALUATION SERVICES
A Division of Kenny Information Systems, Inc.

65 Broadway
New York, New York 10006-2511
Telephone 212/770-4990

F.A. Shinal
Senior Vice President
Chief Financial Officer

April 29, 1994

Bear, Stearns & Co., Inc.
245 Park Avenue
New York, NY 10167

RE: Municipal Securities Trust
Series 3
Gentlemen:

We have examined the post-effective Amendment to the
Registration Statement File No. 2-65899 for the above-captioned trust. We
hereby acknowledge that Kenny S&P Evaluation Services, a division of Kenny
Information Systems, Inc. is currently acting as the evaluator for the
trust. We hereby consent to the use in the Amendment of the reference to
Kenny S&P Evaluation Services as evaluator.

You are hereby authorized to file a copy of this letter with the
Securities and Exchange Commission.

Sincerely,

F. A. Shinal
Senior Vice President
FAS/cns
<PAGE>

KENNY S&P EVALUATION SERVICES
A Division of Kenny Information Systems, Inc.

65 Broadway
New York, New York 10006-2511
Telephone 212/770-4990

F.A. Shinal
Senior Vice President
Chief Financial Officer

April 29, 1994

Bear, Stearns & Co., Inc.
245 Park Avenue
New York, NY 10167

RE: Municipal Securities Trust
Series 4
Gentlemen:

We have examined the post-effective Amendment to the
Registration Statement File No. 2-68167 for the above-captioned trust. We
hereby acknowledge that Kenny S&P Evaluation Services, a division of Kenny
Information Systems, Inc. is currently acting as the evaluator for the
trust. We hereby consent to the use in the Amendment of the reference to
Kenny S&P Evaluation Services as evaluator.

You are hereby authorized to file a copy of this letter with the
Securities and Exchange Commission.

Sincerely,

F. A. Shinal
Senior Vice President
FAS/cns
<PAGE>

KENNY S&P EVALUATION SERVICES
A Division of Kenny Information Systems, Inc.

65 Broadway
New York, New York 10006-2511
Telephone 212/770-4990

F.A. Shinal
Senior Vice President
Chief Financial Officer

April 29, 1994

Bear, Stearns & Co., Inc.
245 Park Avenue
New York, NY 10167

RE: Municipal Securities Trust
Series 5
Gentlemen:

We have examined the post-effective Amendment to the
Registration Statement File No. 2-68389 for the above-captioned trust. We
hereby acknowledge that Kenny S&P Evaluation Services, a division of Kenny
Information Systems, Inc. is currently acting as the evaluator for the
trust. We hereby consent to the use in the Amendment of the reference to
Kenny S&P Evaluation Services as evaluator.

You are hereby authorized to file a copy of this letter with the
Securities and Exchange Commission.

Sincerely,

F. A. Shinal
Senior Vice President

FAS/cns