ALLIANCE GOVERNMENT RESERVES INC, 485BPOS, 1996-10-31

ALLIANCE GOVERNMENT RESERVES INC
485BPOS, 1996-10-31

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<PAGE>

As filed with the Securities and Exchange
Commission on October 31, 1996
File No. 2-63315

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

Pre-Effective Amendment No.

Post-Effective Amendment No. 24 X

and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940

Amendment No. 23 X

ALLIANCE GOVERNMENT RESERVES
(Exact Name of Registrant as Specified in Charter)
1345 Avenue of the Americas, New York, New York 10105
(Address of Principal Executive Office) (Zip Code)

Registrant's Telephone Number, including Area Code:(800) 221-5672

EDMUND P. BERGAN, JR.
Alliance Capital Management L.P.
1345 Avenue of the Americas
New York, New York 10105
(Name and address of agent for service)

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

X immediately upon filing pursuant to paragraph (b)
on (date) pursuant to paragraph (b)
60 days after filing pursuant to paragraph (a)
on (date) pursuant to paragraph (a) of rule 485.
75 days after filing pursuant to paragraph (a)(2)
on (date) pursuant to paragraph (a)(2) of Rule 485

Registrant has registered an indefinite number of shares of
beneficial interest pursuant to Rule 24f-2 under the Investment

<PAGE>

Company Act of 1940. Registrant's Rule 24f-2 notice for its
fiscal year ended June 30, 1996 was filed on August 29, 1996.

<PAGE>

CROSS REFERENCE SHEET
(as required by Rule 404(c))

N-1A Item No. Location in Prospectus
(Caption)

PART A

Item 1. Cover Page Cover Page

Item 2. Synopsis Expense Information

Item 3. Financial Highlights Financial Highlights

Item 4. General Description Investment Objectives
of Registrant and Policies

Item 5. Management of the Fund Additional Information

Item 6. Capital Stock and Other
Securities Additional Information

Item 7. Purchase of Securities Purchase and Redemption
Being Offered of Shares; Additional
Information

Item 8. Redemption or Repurchase Purchase and Redemption
of Shares

Item 9. Pending Legal Proceedings Not Applicable

PART B Location in Statement
of Additional Information
(Caption)

Item 10. Cover Page Cover Page

Item 11. Table of Contents Cover Page

Item 12. General Information Management;
and History General Information

Item 13. Investment Objectives Investment Objectives
and policies and policies Investment
Restrictions

Item 14. Management of the Fund Management

Item 15. Control Persons and Management
Principal Holders

<PAGE>

of Securities

PART B (continued) Location in Statement
of Additional
Information
(Caption)

Item 16. Investment Advisory and Management
Other Services

Item 17. Brokerage Allocation General Information

Item 18. Capital Stock and Other Daily Dividends -
Securities Determination of Net
Asset Value; General
Information

Item 19. Purchase, Redemption and Purchase and Redemption
Pricing of Securities of Shares; Daily
being offered Dividends -
Determination of Net
Asset Value

Item 20. Tax Status Taxes

Item 21. Underwriters General Information

Item 22. Calculation of General Information
Performance Data

Item 23. Financial Statements Financial Statements;
Report of Independent
Accountants

<PAGE>

- --------------------------------------------------------------------------------
YIELD MESSAGES

For current recorded yield information on Alliance Government Reserves, call
on a touch-tone telephone toll-free (800) 251-0539 and press the following
sequence of keys: [1] [#] [1] [#] [2] [5] [#]. For non-touch-tone telephones,
call toll- free (800) 221-9513.
- --------------------------------------------------------------------------------

Alliance Government Reserves (the "Fund") is a series of Alliance Government
Reserves, a diversified, open-end investment company. The Fund is a money
market fund with investment objectives of safety, liquidity and income. This
prospectus sets forth the information about the Fund that a prospective
investor should know before invest-ing. Please retain it for future
reference.

An investment in the Fund is (i) neither insured nor guaranteed by the U.S.
Government; (ii) not a deposit or obligation of, or guaranteed or endorsed
by, any bank; and (iii) not federally insured by the Federal Deposit Insurance
Corporation, the Federal Reserve Board or any other agency. There can be no
assurance that the Fund will be able to maintain a stable net asset value of
$1.00 per share.

A "Statement of Additional Information," dated November 1, 1996, which
provides a further discussion of certain areas in this prospectus and other
matters which may be of interest to some investors, has been filed with the
Securities and Exchange Commission and is incorporated herein by reference.
For a free copy, call (800) 221-5672 or write Alliance Fund Services, Inc. at
the address shown on page 7.

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

(R)This registered service mark used under license from the owner, Alliance
Capital Management L.P.
- --------------------------------------------------------------------------------
CONTENTS
--------
Expense Information....................................................... 2
Financial Highlights...................................................... 2
Introduction.............................................................. 3
Investment Objectives and Policies........................................ 4
Purchase and Redemption of Shares......................................... 5
Additional Information.................................................... 6
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------

ALLIANCE
GOVERNMENT
RESERVES

- --------------------------------------------------------------------------------

[ALLIANCE CAPITAL LOGO APPEARS HERE]

PROSPECTUS

NOVEMBER 1, 1996

ALC25PRO6
<PAGE>

- --------------------------------------------------------------------------------
EXPENSE INFORMATION
- --------------------------------------------------------------------------------

SHAREHOLDER TRANSACTION EXPENSES

The Fund has no sales load on purchases or reinvested dividends, deferred
sales load, redemption fee or exchange fee.

ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
<TABLE>
<S> <C>
Management Fees...................................................... .48%
12b-1 Fees........................................................... .25
Other Expenses....................................................... .27
----
Total Fund Operating Expenses........................................... 1.00%
</TABLE>

EXAMPLE
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
You would pay the following expenses on a
$1,000 investment, assuming a 5% annual
return (cumulatively through the end of
each time period): $10 $32 $55 $122
</TABLE>

The purpose of the foregoing table is to assist the investor in understand-
ing the various costs and expenses that an investor in the Fund will bear di-
rectly or indirectly. The example should not be considered a representation of
past or future expenses; actual expenses may be greater or less than those
shown.

- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS . For a share outstanding throughout each year (audited)
- --------------------------------------------------------------------------------
The following tables have been audited by McGladrey & Pullen LLP, the Fund's
independent auditors, whose report thereon appears in the Statement of Addi-
tional Information. This information should be read in conjunction with the
financial statements and notes thereto included in the Statement of Additional
Information.

<TABLE>
<CAPTION>
YEAR ENDED JUNE 30,
---------------------------------------------------------------------------------------
1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
------ ------- ------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, begin-
ning of period......... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------ ------- ------- ------- ------- ------- ------- ------- ------- -------
INCOME FROM INVESTMENT
OPERATIONS
Net investment income... .0461 .0439 .0244 .0256 .0421 .0640 .0765 .0774 0.0612 0.0541
Net realized gain on in-
vestments.............. -0- -0- -0- .0001 -0- -0- .0001 -0- -0- -0-
------ ------- ------- ------- ------- ------- ------- ------- ------- -------
Net increase in net
assets from operations. .0461 .0439 .0244 .0257 .0421 .0640 .0766 .0774 0.0612 0.0541
------ ------- ------- ------- ------- ------- ------- ------- ------- -------
LESS: DISTRIBUTIONS
Dividends from net in-
vestment income........ (.0461) (.0439) (.0244) (.0256) (.0421) (.0640) (.0765) (.0774) (0.0612) (0.0541)
Distributions from net
realized gains......... -0- -0- -0- (.0001) -0- -0- (.0001) -0- -0- -0-
------ ------- ------- ------- ------- ------- ------- ------- ------- -------
Total dividends and dis-
tributions............. (.0461) (.0439) (.0244) (.0257) (.0421) (.0640) (.0766) (.0774) (0.0612) (0.0541)
------ ------- ------- ------- ------- ------- ------- ------- ------- -------
Net asset value, end of
period................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
====== ======= ======= ======= ======= ======= ======= ======= ======= =======
TOTAL RETURNS
Total investment return
based on:
Net asset value(a)..... 4.72% 4.48% 2.48% 2.60% 4.30% 6.61% 7.96% 8.04% 6.31% 5.56%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year
(in millions).......... $3,205 $2,514 $2,061 $1,783 $1,572 $1,070 $584 $522 $315 $260
Ratio to average net as-
sets of:
Expenses, net of waivers
and reimbursements..... 1.00% 1.00% 1.00% 1.00% .95% .89% .88% .88% .80% .95%
Expenses, before waivers
and reimbursements..... 1.01% 1.05% 1.04% 1.02% .97% .93% .98% .98% .90% 1.05%
Net investment
income(b).............. 4.60% 4.42% 2.46% 2.55% 4.17% 6.28% 7.65% 7.86% 6.13% 5.41%
</TABLE>
- ---------------------
(a) Total investment return is calculated assuming an initial investment made
at the net asset value at the beginning of the period, reinvestment of all
dividends and distributions at net asset value during the period, and
redemption on the last day of the period.
(b) Net of expenses reimbursed or waived by the Adviser.
- -------------------------------------------------------------------------------

From time to time the Fund advertises its "yield" and "effective yield."
Both yield figures are based on historical earnings and are not intended to
indicate future performance. To calculate the "yield," the amount of dividends
paid on a share during a specified seven-day period is assumed to be paid each
week over a 52-week period and is shown as a percentage of the investment. To
calculate "effective yield," which will be higher than the "yield" because of
compounding, the dividends paid are assumed to be reinvested. Dividends for
the seven days ended June 30, 1996, after expense reimbursement, amounted to
an annualized yield of 4.38%, equivalent to an effective yield of 4.48%. Ab-
sent such reimbursement, the annualized yield for such period would have been
4.29%, equivalent to an effective yield of 4.38%.

2
<PAGE>

ALLIANCE GOVERNMENT RESERVES . . . . . with investment objectives of

SAFETY . LIQUIDITY . INCOME

We seek safety for the Fund by investing in a diversified list of
U.S. Government securities which are selected for their liquidity and
stability of principal. Liquidity of the investment portfolio is in-
creased even more by our emphasis on short-term issues. Specifically,
at the time of investment no security purchased can have a maturity
exceeding one year, which maturity may extend to 397 days, and the av-
erage maturity of the portfolio cannot exceed 90 days.

The short average maturity of the portfolio enhances our ability to
maintain the Fund's share price at $1.00--this, in turn, provides both
stability of value and liquidity to you and your fellow shareholders.

Our professional investment managers seek the maximum current income
for the Fund that is consistent with safety and maintenance of liquid-
ity. In addition to their knowledge and experience with money markets,
our managers obtain yield advantages for the Fund by making many secu-
rity purchases in especially large amounts such as $1 million and mul-
tiples thereof. Persons investing for themselves usually cannot ex-
ploit such money market opportunities due to the large investment
sizes required.

WHO SHOULD INVEST IN THE FUND?

The Fund is designed for individuals, brokers, institutions, advis-
ers, custodians, charities, fiduciaries, or corporations who can bene-
fit from high money market income--and who place value on an invest-
ment having the extra safety implicit in a portfolio containing U.S.
Government securities. The Fund also is suitable for persons and enti-
ties seeking an investment having liquidity, stability, simplicity,
and convenience. Investors using the Fund avoid certain mechanical
burdens that they would incur by investing in money markets directly,
such as monitoring of maturity dates, safeguarding of receipts and de-
liveries, and the maintenance of tax information and other records.

MAJOR FEATURES AND SERVICES OF ALLIANCE GOVERNMENT RESERVES

No withdrawal fees or penalties Free check-writing ($100 minimum per
Low-expense Distribution Plan check)
(.25 of 1% maximum annual rate) Free institutional record-keeping
Daily compounding of dividends services
First-day income for investments IRA, SEP, 403 (b) (7) and employer-
Same-day funds for withdrawals sponsored retirement plans
Low investment minimums

3
<PAGE>

- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVES AND POLICIES
- --------------------------------------------------------------------------------

The Fund's investment objectives are--in the following order of priority--
safety of principal, excellent liquidity, and maximum current income to the ex-
tent consistent with the first two objectives. As a matter of fundamental poli-
cy, the Fund pursues its objectives by maintaining a portfolio of high quality
money market securities of the types described in the succeeding paragraph, all
of which at the time of investment have remaining maturities of one year or
less, which maturities may extend to 397 days. The Fund may not change this
policy or the "other fundamental investment policies" described in a separate
section below without shareholder approval. The Fund may, without such approv-
al, create additional classes of shares in order to establish portfolios which
may have different investment objectives. There can be no assurance, as is true
with all investment companies, that the Fund's objectives will be achieved.

MONEY MARKET SECURITIES

The securities in which the Fund invests are: (1) marketable obligations of,
or guaranteed by, the United States Government, its agencies or instrumentali-
ties (collectively, the "U.S. Government"), including issues of the United
States Treasury, such as bills, certificates of indebtedness, notes and bonds,
and issues of agencies and instrumentalities established under the authority of
an act of Congress; and (2) repurchase agreements that are collateralized in
full each day by the types of securities listed above. These agreements are en-
tered into with "primary dealers" (as designated by the Federal Reserve Bank of
New York) in U.S. Government securities or State Street Bank and Trust Company,
the Fund's Custodian, and would create a loss to the Fund if, in the event of a
dealer default, the proceeds from the sale of the collateral were less than the
repurchase price. The Fund may commit up to 15% of its net assets to the pur-
chase of when-issued U.S. Government securities, whose value may fluctuate
prior to their settlement, thereby creating an unrealized gain or loss to the
Fund.

The Fund will comply with Rule 2a-7 under the Investment Company Act of 1940
(the "Act"), as amended from time to time, including the diversification, qual-
ity and maturity limitations imposed by the Rule. A more detailed description
of Rule 2a-7 is set forth in the Fund's Statement of Additional Information un-
der "Investment Objectives and Policies."

OTHER FUNDAMENTAL INVESTMENT POLICIES

To maintain portfolio diversification and reduce investment risk, the Fund may
not: (1) borrow money except from banks on a temporary basis or via entering
into reverse repurchase agreements in aggregate amounts not exceeding 10% of
its assets and to be used exclusively to facilitate the orderly maturation and
sale of portfolio securities during any periods of abnormally heavy redemption
requests, if they should occur; such borrowings may not be used to purchase in-
vestments and it will not purchase any investment while any such borrowings ex-
ist; or (2) pledge, hypothecate or in any manner transfer, as security for in-
debtedness, its assets except to secure such borrowings.

4
<PAGE>

- --------------------------------------------------------------------------------
PURCHASE AND REDEMPTION OF SHARES
- --------------------------------------------------------------------------------

OPENING ACCOUNTS

Instruct your Account Executive to open an account in the Fund in conjunc-
tion with your brokerage account.

SUBSEQUENT INVESTMENTS

A. BY CHECK THROUGH YOUR BROKERAGE FIRM

Mail or deliver your check made payable to your brokerage firm to your Ac-
count Executive who will deposit it into your brokerage account. Please indi-
cate your account number on the check.

B. BY SWEEP

Your brokerage firm may offer an automatic "sweep" for the Fund in the oper-
ation of brokerage cash accounts for its customers. Contact your Account Exec-
utive to determine if a sweep is available and what the sweep parameters are.

REDEMPTIONS

A. BY CHECKWRITING

With this service, you may write checks made payable to any payee in any
amount of $100 or more. Checks cannot be written for more than the principal
balance (not including any accrued dividends) in your account. You must first
fill out the Signature Card, which you can obtain from your Account Executive.
There is no additional charge for the checkwriting service. The checkwriting
service enables you to receive the daily dividends declared on the shares to
be redeemed until the day that your check is presented for payment.

B. BY SWEEP

If your brokerage firm offers an automatic sweep service, the sweep will au-
tomatically transfer from your Fund account sufficient cash to cover any debit
balance that may occur in your cash account for any reason.

OPENING AN ACCOUNT DIRECTLY WITH THE FUND; SHAREHOLDER SERVICES

If you wish to obtain an Application Form to open an account directly with
the Fund or if you have any questions about the Form, purchasing shares or
other Fund procedures, please telephone the Fund toll-free (800) 221-5672.

For more information on the purchase and redemption of Fund shares, as well
as shareholder services, see the Statement of Additional Information.

5
<PAGE>

- --------------------------------------------------------------------------------
ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------

SHARE PRICE. Shares are sold and redeemed on a continuous basis without sales
or redemption charges at their net asset value which is expected to be constant
at $1.00 per share, although this price is not guaranteed. The net asset value
of the Fund's shares is determined at 12:00 Noon and 4:00 p.m. (New York time)
each business day. The net asset value per share is calculated by taking the
sum of the value of the Fund's investments (amortized cost value is used for
this purpose) and any cash or other assets, subtracting liabilities, and divid-
ing by the total number of shares outstanding. All expenses, including the fees
payable to the Adviser, are accrued daily.

TIMING OF INVESTMENTS AND REDEMPTIONS. The Fund has two transaction times
each business day, 12:00 Noon and 4:00 p.m. (New York time). New investments
represented by Federal funds or bank wire monies received by State Street Bank
at any time during a day prior to 4:00 p.m. are entitled to the full dividend
to be paid to shareholders for that day. Shares do not earn dividends on the
day a redemption is effected regardless of whether the redemption order is re-
ceived before or after 12:00 Noon. However, if you wish to have Federal funds
wired the same day as your telephone redemption request, make sure that your
request will be received by the Fund prior to 12:00 Noon.

During periods of drastic economic or market developments, such as the market
break of October 1987, it is possible that shareholders would have difficulty
in reaching Alliance Fund Services, Inc. by telephone (although no such diffi-
culty was apparent at any time in connection with the 1987 market break). If a
shareholder were to experience such difficulty, the shareholder should issue
written instructions to Alliance Fund Services, Inc. at the address shown on
page 7 of this prospectus. The Fund reserves the right to suspend or terminate
its telephone redemption service at any time without notice. Neither the Fund
nor the Adviser, or Alliance Fund Services, Inc. will be responsible for the
authenticity of telephone requests for redemptions that the Fund reasonably be-
lieves to be genuine. The Fund will employ reasonable procedures in order to
verify that telephone requests for redemptions are genuine, including among
others, recording such telephone instructions and causing written confirmations
of the resulting transactions to be sent to shareholders. If the Fund did not
employ such procedures, it could be liable for losses arising from unauthorized
or fraudulent telephone instructions. Selected dealers or agents may charge a
commission for handling telephone requests for redemptions.

Redemption proceeds are normally wired or mailed either the same or the next
business day, but in no event later than seven days, unless redemptions have
been suspended or postponed due to the determination of an "emergency" by the
Securities and Exchange Commission or to certain other unusual conditions.

If your Fund shares are not maintained through a financial intermediary, pro-
ceeds from any subsequent redemption by you of Fund shares that were purchased
by check or electronic funds transfer will not be forwarded to you until the
Fund is reasonably assured that your check or electronic funds transfer has
cleared, up to fifteen days following the purchase date. If the redemption re-
quest during such period is in the form of a Fund check, the check will be
marked "insufficient funds" and be returned unpaid to the presenting bank.

MINIMUMS. The Fund has minimums of $1,000 for initial investments, $100 for
subsequent investments and a $500 minimum maintenance balance for each account.
These minimums do not apply to shareholder accounts maintained through broker-
age firms or other financial institutions, as such financial intermediaries may
maintain their own minimums. The Fund imposes a service charge upon financial
intermediaries to reflect the relatively higher costs of small accounts and
small transactions; these intermediaries may in turn pass on such charges to
affected accounts. Accounts not maintained through a financial intermediary are

6
<PAGE>

notified of low balances and required to increase their balance or be subject
to liquidation of their account. See the Statement of Additional Information
for further information.

DAILY DIVIDENDS, OTHER DISTRIBUTIONS, TAXES. All net income of the Fund is de-
termined each business day at 4:00 p.m. (New York time) and is paid immediately
thereafter pro rata to shareholders of record via automatic investment in addi-
tional full and fractional shares in each shareholder's account. As such addi-
tional shares are entitled to dividends on following days, a compounding growth
of income occurs.

Net income consists of all accrued interest income on Fund assets less the
Fund's expenses applicable to that dividend period. Realized gains and losses
are reflected in net asset value and are not included in net income.

For Federal income tax purposes, distributions out of interest income earned
by the Fund and net realized short-term capital gains are taxable to you as or-
dinary income, and distributions of net realized long-term capital gains, if
any, are taxable as long-term capital gains irrespective of the length of time
you may have held your shares. Distributions by the Fund may also be subject to
certain state and local taxes. Each year shortly after December 31, the Fund
will send you tax information stating the amount and type of all its distribu-
tions for the year just ended.

THE ADVISER. The Fund retains Alliance Capital Management L.P., 1345 Avenue of
the Americas, New York, NY 10105 under an Advisory Agreement to provide invest-
ment advice and, in general, to conduct the Fund's management and investment
program, subject to the general supervision and control of the Trustees of the
Fund. For the fiscal year ended June 30, 1996, the Fund paid the Adviser at an
annual rate of .48 of 1% of the average daily value of the Fund's net assets.

Under a Distribution Services Agreement (the "Agreement"), the Fund pays the
Adviser at a maximum annual rate of .25 of 1% of the Fund's aggregate average
daily net assets. For the fiscal year ended June 30, 1996, the Fund paid the
Adviser at an annual rate of .24 of 1% of the average daily value of the Fund's
net assets. Substantially all such monies (together with significant amounts
from the Adviser's own resources) are paid by the Adviser to broker-dealers and
other financial intermediaries for their distribution assistance and to banks
and other depository institutions for administrative and accounting services
provided to the Fund, with any remaining amounts being used to partially defray
other expenses incurred by the Adviser in distributing Fund shares. The Fund
believes that the administrative services provided by depository institutions
are permissible activities under present banking laws and regulations and will
take appropriate actions (which should not adversely affect the Fund or its
shareholders) in the future to maintain such legal conformity should any
changes in, or interpretations of, such laws or regulations occur.

The Adviser will reimburse the Fund to the extent that the Fund's aggregate
operating expenses (including the Adviser's fee and expenses of the Agreement)
exceed 1% of its average daily net assets for any fiscal year.

CUSTODIAN, TRANSFER AGENT AND DISTRIBUTOR. State Street Bank and Trust Compa-
ny, P.O. Box 1912, Boston, MA 02105, is the Fund's Custodian. Alliance Fund
Services, Inc. P.O. Box 1520, Secaucus, NJ 07096-1520 and Alliance Fund Dis-
tributors, Inc., 1345 Avenue of the Americas, New York, NY 10105, are the
Fund's Transfer Agent and Distributor, respectively. The transfer agent charges
a fee for its services.

FUND ORGANIZATION. The Fund is a series of Alliance Government Reserves (the
"Trust"). The Fund is one of two series of the Trust; shares of the other se-
ries, Alliance Treasury Reserves, are offered by a separate prospectus. The
Trust is a diversified, open-end investment company registered under the Act.
The Trust was reorganized as a Massachusetts business trust in October 1984,
having previously been a Maryland corporation since its formation in

7
<PAGE>

December 1978. The Trust's activities are supervised by its Trustees. Normally,
each share of each series is entitled to one vote, and vote as a single series
on matters that affect both series in substantially the same manner. Massachu-
setts law does not require annual meetings of shareholders and it is antici-
pated that shareholder meetings will be held only when required by Federal law.
Shareholders have available certain procedures for the removal of Trustees.

REPORTS. You receive semi-annual and annual reports of the Fund as well as a
monthly summary of your account. You can arrange for a copy of each of your ac-
count statements to be sent to other parties.

----------------

TRUSTEES
Dave H. Williams, Chairman
John D. Carifa
Sam Y. Cross
Charles H. P. Duell
William H. Foulk, Jr.
Elizabeth J. McCormack
David K. Storrs
Shelby White

OFFICERS
Ronald M. Whitehill, President
John R. Bonczek, Senior Vice President
Kathleen A. Corbet, Senior Vice President
Robert I. Kurzweil, Senior Vice President
Wayne D. Lyski, Senior Vice President
Patricia Netter, Senior Vice President
Ronald R. Valeggia, Senior Vice President
Drew Biegel, Vice President
John F. Chiodi, Jr., Vice President
Doris T. Ciliberti, Vice President
William J. Fagan, Vice President
Joseph R. LaSpina, Vice President
Linda D. Neil, Vice President
Raymond J. Papera, Vice President
Pamela F. Richardson, Vice President
Mark D. Gersten, Treasurer & Chief Financial Officer
Edmund P. Bergan, Jr., Secretary

<PAGE>

YIELD MESSAGES

For current recorded yield
information on Alliance Treasury
Reserves, call on a touch-tone
telephone toll-free (800) 251-0539
and press the following sequence of
keys:[_]1[_]#[_]1[_]#[_]9[_]0[_]#.
For non-touch-tone telephones, call
toll-free (800) 221-9513.

Alliance Treasury Reserves (the
"Fund") is a series of Alliance
Government Reserves, a diversified,
open-end investment company. The
Fund is a money market fund with
investment objectives of safety,
liquidity and income. This prospec-
tus sets forth the information
about the Fund that a prospective
investor should know before invest-
ing. Please retain it for future
reference.

An investment in the Fund is (i)
neither insured nor guaranteed by
the U.S. Government; (ii) not a de-
posit or obligation of, or guaran-
teed or endorsed by, any bank; and
(iii) not federally insured by the
Federal Deposit Insurance Corpora-
tion, the Federal Reserve Board or
any other agency. There can be no
assurance that the Fund will be
able to maintain a stable net asset
value of $1.00 per share.

A "Statement of Additional Infor-
mation," dated November 1, 1996,
which provides a further discussion
of certain areas in this prospectus
and other matters and which may be
of interest to some investors, has
been filed with the Securities and
Exchange Commission and is incorpo-
rated herein by reference. For a
free copy, call (800) 221-5672 or
write Alliance Fund Services, Inc.
at the address shown on page 7.

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

(R)This registered service mark
used under license from the owner,
Alliance Capital Management L.P.
CONTENTS

<TABLE>
<S> <C>
Expense Information....................................................... 2
Financial Highlights...................................................... 2
Introduction.............................................................. 3
Investment Objectives and Policies........................................ 4
Purchase and Redemption of Shares......................................... 5
Additional Information.................................................... 6
</TABLE>

ALLIANCE TREASURY RESERVES

[LOGO OF ALLIANCE CAPITAL APPEARS HERE]

PROSPECTUS

NOVEMBER 1, 1996

ALC90PRO6
<PAGE>

EXPENSE INFORMATION

SHAREHOLDER TRANSACTION EXPENSES

The Fund has no sales load on purchases or reinvested dividends, deferred
sales load, redemption fee or exchange fee.

<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
<S> <C>
Management Fees......................................................... .50%
12b-1 Fees.............................................................. .25
Other Expenses.......................................................... .25
----
Total Fund Operating Expenses........................................... 1.00%
</TABLE>

<TABLE>
<CAPTION>
EXAMPLE

1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
You would pay the following expenses on a
$1,000 investment, assuming a 5% annual
return (cumulatively through the end of
each time period): $10 $32 $55 $122
</TABLE>

FINANCIAL HIGHLIGHTS . For a share outstanding throughout each period (audited)

The following tables have been audited by McGladrey & Pullen LLP, the Fund's
independent auditors whose report thereon appears in the Statement of Addi-
tional Information. This information should be read in conjunction with the
financial statements and notes thereto included in the Statement of Additional
Information.

<TABLE>
<CAPTION>
SEPTEMBER 1, 1993(A)
YEAR ENDED YEAR ENDED THROUGH
JUNE 30, 1996 JUNE 30, 1995 JUNE 30, 1994
------------- ------------- --------------------
<S> <C> <C> <C>
Net asset value, beginning of
period....................... $ 1.00 $ 1.00 $ 1.00
-------- -------- -------
INCOME FROM INVESTMENT OPERA-
TIONS
Net investment income......... .0466 .0460 0.260
-------- -------- -------
LESS: DISTRIBUTIONS
Dividends from net investment
income....................... (.0466) (.0460) (.0260)
-------- -------- -------
Net asset value, end of peri-
od........................... $ 1.00 $ 1.00 $ 1.00
======== ======== =======
TOTAL RETURNS
Total investment return based
on: net asset value (b)...... 4.77% 4.71% 3.18%(c)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (in
thousands)................... $700,558 $493,702 $80,720
Ratio to average net assets
of:
Expenses, net of waivers and
reimbursements.............. .81% .69% .28%(c)
Expenses, before waivers and
reimbursements.............. 1.05% 1.05% 1.28%(c)
Net investment income (d).... 4.64% 4.86% 3.24%(c)
</TABLE>

- -------------
(a) Commencement of operations.
(b) Total investment return is calculated assuming an initial investment made
at the net asset value at the beginning of the period, reinvestment of all
dividends and distributions at net asset value during the period, and
redemption on the last day of the period.
(c) Annualized.
(d) Net of expenses reimbursed or waived by the Adviser.

From time to time the Fund advertises its "yield" and "effective yield."
Both yield figures are based on historical earnings and are not intended to
indicate future performance. To calculate the "yield," the amount of dividends
paid on a share during a specified seven-day period is assumed to be paid each
week over a 52-week period and is shown as a percentage of the investment. To
calculate "effective yield," which will be higher than the "yield" because of
compounding, the dividends paid are assumed to be reinvested. Dividends for
the seven days ended June 30, 1996, after expense reimbursement, amounted to
an annualized yield of 4.37%, equivalent to an effective yield of 4.47%.
Absent such reimbursement, the annualized yield for such period would have
been 4.19%, equivalent to an effective yield of 4.28%.

2
<PAGE>

ALLIANCE TREASURY RESERVES . . . . . with investment objectives of

SAFETY . LIQUIDITY . INCOME

We seek safety for the Fund by investing in issues of the U.S. Trea-
sury and repurchase agreements pertaining to such issues which are se-
lected for their liquidity and stability of principal. Liquidity of
the investment portfolio is increased even more by our emphasis on
short-term issues. Specifically, at the time of investment no security
purchased can have a maturity exceeding 397 days, and the average ma-
turity of the portfolio cannot exceed 90 days.

WHO SHOULD INVEST IN THE FUND?

The Fund is designed for individuals, brokers, institutions, advis-
ers, custodians, charities, fiduciaries, or corporations who can bene-
fit from high money market income--and who place value on an invest-
ment having the extra safety implicit in a portfolio containing U.S.
Treasury securities. The Fund also is suitable for persons and enti-
ties seeking an investment having liquidity, stability, simplicity,
and convenience. Investors using the Fund avoid certain mechanical
burdens that they would incur by investing in money markets directly,
such as monitoring of maturity dates, safeguarding of receipts and de-
liveries, and the maintenance of tax information and other records.

MAJOR FEATURES AND SERVICES OF ALLIANCE TREASURY RESERVES

No withdrawal fees or penalties Free check-writing ($100 minimum per
Low-expense Distribution Plan check)
(.25 of 1% maximum annual rate) Free institutional record-keeping
Daily compounding of dividends services.
First-day income for investments IRA, SEP, 403 (b) (7) and
Same-day funds for withdrawals employer-sponsored retirement plans
Low investment minimums

3
<PAGE>

INVESTMENT OBJECTIVES AND POLICIES

The Fund's investment objectives are--in the following order of priority--
safety of principal, excellent liquidity, and maximum current income to the ex-
tent consistent with the first two objectives. As a matter of fundamental poli-
cy, the Fund pursues its objectives by maintaining a portfolio of high quality
money market securities of the types described in the succeeding paragraph, all
of which at the time of investment have remaining maturities of 397 days. The
Fund may not change its investment objectives or the "other fundamental invest-
ment policies" described in a separate section below without shareholder ap-
proval. The Fund may, without such approval, create additional classes of
shares in order to establish portfolios which may have different investment ob-
jectives. There can be no assurance, as is true with all investment companies,
that the Fund's objectives will be achieved.

MONEY MARKET SECURITIES

The securities in which the Fund invests are: (1) issues of the U. S. Trea-
sury, such as bills, certificates of indebtedness, notes and bonds; and (2) re-
purchase agreements that are collateralized in full each day by the types of
securities listed above. These agreements are entered into with "primary deal-
ers" (as designated by the Federal Reserve Bank of New York) in U.S. Government
securities or State Street Bank and Trust Company, the Fund's Custodian. For
each repurchase agreement, the Fund requires continual maintenance of the mar-
ket value of the underlying collateral in amounts equal to, or in excess of,
the agreement amount. In the event of a dealer default, the Fund might suffer a
loss to the extent that the proceeds from the sale of the collateral were less
than the repurchase price. The Fund may commit up to 15% of its net assets to
the purchase of when-issued U.S. Treasury securities. Delivery and payment for
when-issued securities takes place after the transaction date. The payment
amount and the interest rate that will be received on the securities are fixed
on the transaction date. The value of such securities may fluctuate prior to
their settlement, thereby creating an unrealized gain or loss to the Fund.

OTHER FUNDAMENTAL INVESTMENT POLICIES

To maintain portfolio diversification and reduce investment risk, the Fund
may not: (1) borrow money except from banks on a temporary basis or via enter-
ing into reverse repurchase agreements in aggregate amounts not exceeding 10%
of its assets and to be used exclusively to facilitate the orderly maturation
and sale of portfolio securities during any periods of abnormally heavy redemp-
tion requests, if they should occur; such borrowings may not be used to pur-
chase investments and it will not purchase any investment while any such
borrowings exist; or (2) pledge, hypothecate or in any manner transfer, as se-
curity for indebtedness, its assets except to secure such borrowings.

4
<PAGE>

PURCHASE AND REDEMPTION OF SHARES

OPENING ACCOUNTS

Instruct your Account Executive to open an account in the Fund in conjunction
with your brokerage account.

SUBSEQUENT INVESTMENTS

A BY CHECK THROUGH YOUR BROKERAGE FIRM

Mail or deliver your check made payable to your brokerage firm to your Ac-
count Executive who will deposit it into your brokerage account. Please indi-
cate your account number on the check.

B. BY SWEEP

Your brokerage firm may offer an automatic "sweep" for the Fund in the opera-
tion of brokerage cash accounts for its customers. Contact your Account Execu-
tive to determine if a sweep is available and what the sweep parameters are.

REDEMPTIONS

A. BY CHECKWRITING

With this service, you may write checks made payable to any payee in any
amount of $100 or more. Checks cannot be written for more than the principal
balance (not including any accrued dividends) in your account. You must first
fill out the Signature Card, which you can obtain from your Account Executive.
There is no additional charge for the checkwriting service. The checkwriting
service enables you to receive the daily dividends declared on the shares to be
redeemed until the day that your check is presented for payment.

B. BY SWEEP

OPENING AN ACCOUNT DIRECTLY WITH THE FUND; SHAREHOLDER SERVICES

For more information on the purchase and redemption of Fund shares, as well
as shareholder services, see the Statement of Additional Information.

5
<PAGE>

ADDITIONAL INFORMATION

6
<PAGE>

charges to affected accounts. Accounts not maintained through a financial in-
termediary are notified of low balances and required to increase their balance
or be subject to liquidation of their account. See the Statement of Additional
Information for further information.

DAILY DIVIDENDS, OTHER DISTRIBUTIONS, TAXES. All net income of the Fund is
determined each business day at 4:00 p.m. (New York time) and is paid immedi-
ately thereafter pro rata to shareholders of record via automatic investment in
additional full and fractional shares in each shareholder's account. As such
additional shares are entitled to dividends on following days, a compounding
growth of income occurs.

THE ADVISER. The Fund retains Alliance Capital Management L.P., 1345 Avenue
of the Americas, New York, NY 10105 under an Advisory Agreement to provide in-
vestment advice and, in general, to conduct the Fund's management and invest-
ment program, subject to the general supervision and control of the Trustees of
the Fund. For the period ended June 30, 1996, the Fund paid the Adviser at an
annual rate of .50 of 1% of the average daily value of the Fund's net assets.

Under a Distribution Services Agreement (the "Agreement"), the Fund pays the
Adviser at a maximum annual rate of .25 of 1% of the Fund's aggregate average
daily net assets. For the period ended June 30, 1996, the Fund paid the Adviser
at an annual rate of .01% of the average daily value of the Fund's net assets.
Substantially all such monies (together with significant amounts from the Ad-
viser's own resources) are paid by the Adviser to broker-dealers and other fi-
nancial intermediaries for their distribution assistance and to banks and other
depository institutions for administrative services provided to the Fund, with
any remaining amounts being used to partially defray other expenses incurred by
the Adviser in distributing Fund shares. The Fund believes that the administra-
tive services provided by depository institutions are permissible activities
under present banking laws and regulations and will take appropriate actions
(which should not adversely affect the Fund or its shareholders) in the future
to maintain such legal conformity should any changes in, or interpretations of,
such laws or regulations occur.

CUSTODIAN, TRANSFER AGENT AND DISTRIBUTOR. State Street Bank and Trust Compa-
ny, P.O. Box 1912, Boston, MA 02105, is the Fund's Custodian. Alliance Fund
Services, Inc., P.O. Box 1520, Secaucus, NJ 07096-1520 and Alliance Fund Dis-
tributors, Inc., 1345 Avenue of the Americas, New York, NY 10105, are the
Fund's Transfer Agent and Distributor, respectively. The transfer agent charges
a fee for its services.

FUND ORGANIZATION. The Fund is a series of Alliance Government Reserves (the
"Trust"). The Fund is one of two series of the Trust; shares of the other se-
ries, also named Alliance Government Reserves, are offered by a separate pro-
spectus. The Trust is a diversified, open-end investment company registered un-
der the Act. The Trust was reorganized in October 1984, as a Massachusetts
business trust having previously been a Maryland corporation since its forma-
tion in December 1978. The Trust's activities are supervised by its Trustees.

7
<PAGE>

Normally, each share of each series is entitled to one vote, and vote as a sin-
gle series on matters that affect both series in substantially the same manner.
Massachusetts law does not require annual meetings of shareholders and it is
anticipated that shareholder meetings will be held only when required by Fed-
eral law. Shareholders have available certain procedures for the removal of
Trustees.

----------------

TRUSTEES
Dave H. Williams, Chairman
John D. Carifa
Sam Y. Cross
Charles H. P. Duell
William H. Foulk, Jr.
Elizabeth J. McCormack
David K. Storrs
Shelby White

<PAGE>

ALLIANCE GOVERNMENT RESERVES
(LOGO) (R)

P.O. Box 1520, Secaucus, New Jersey 07096-1520
Toll Free (800) 221-5672

STATEMENT OF ADDITIONAL INFORMATION
November 1, 1996

TABLE OF CONTENTS
Page

Investment Objectives and Policies . . . . . . . . 2

Investment Restrictions . . . . . . . . . . . . . 5

Management . . . . . . . . . . . . . . . . . . . . 6

Purchase and Redemption of Shares . . . . . . . . 15

Additional Information . . . . . . . . . . . . . . 19

Daily Dividends-Determination of Net Asset Value . 21

Taxes. . . . . . . . . . . . . . . . . . . . . . . 23

General Information . . . . . . . . . . . . . . . 23

Appendix-Commercial Paper and Bond Ratings . . . . 27

Financial Statements . . . . . . . . . . . . . . .

Independent Auditor's Report . . . . . . . . . . .

This Statement of Additional Information is not a prospectus but
supplements and should be read in conjunction with the Fund's
current Prospectus dated November 1, 1996. A copy of the
Prospectus may be obtained by contacting the Fund at the address
or telephone number shown above.

(R) This registered service mark used under license from the
owner, Alliance Capital Management L.P.

<PAGE>

INVESTMENT OBJECTIVES AND POLICIES

The Fund is a diversified, open-end investment company whose
objectives are - in the following order of priority - safety of
principal, excellent liquidity, and maximum current income to the
extent consistent with the first two objectives. The Fund
pursues its objectives by maintaining a portfolio of the
following investments diversified by maturities not exceeding one
year or less (which maturities pursuant to Rule 2a-7 under the
Investment Company Act of 1940 as amended (the "Act"), may extend
to 397 days):

1. Marketable obligations of, or guaranteed by, the United
States Government, its agencies or instrumentalities. These
include issues of the United States Treasury, such as bills,
certificates of indebtedness, notes and bonds, and issues of
agencies and instrumentalities established under the authority of
an act of Congress. The latter issues include, but are not
limited to, obligations of the Bank for Cooperatives, Federal
Financing Bank, Federal Home Loan Bank, Federal Intermediate
Credit Banks, Federal Land Banks, Federal National Mortgage
Association and Tennessee Valley Authority. Some of these
securities are supported by the full faith and credit of the U.S.
Treasury, others are supported by the right of the issuer to
borrow from the Treasury, and still others are supported only by
the credit of the agency or instrumentality.

2. Repurchase agreements pertaining to the above
securities. A repurchase agreement arises when a buyer purchases
a security and simultaneously agrees to resell it to the vendor
at an agreed-upon market rate which is effective for the period
of time the buyer's money is invested in the security and which
is not related to the coupon rate on the purchased security.
Repurchase agreements may be entered into with member banks of
the Federal Reserve System or "primary dealers" (as designated by
the Federal Reserve Bank of New York) in U.S. Government
securities or with State Street Bank and Trust Company. It is
the Fund's current practice, which may be changed at any time
without shareholder approval, to enter into repurchase agreements
only with such primary dealers or State Street Bank and Trust
Company, the Fund's Custodian. For each repurchase agreement,
the Fund requires continual maintenance of the market value of
the underlying collateral in amounts equal to, or in excess of,
the agreement amount. While the maturities of the underlying
collateral may exceed one year, the term of the repurchase
agreement is always less than one year. In the event that a
vendor defaulted on its repurchase obligation, the Fund might
suffer a loss to the extent that the proceeds from the sale of

<PAGE>

the collateral were less than the repurchase price. If the
vendor became bankrupt, the Fund might be delayed in selling the
collateral. Repurchase agreements often are for short periods
such as one day or a week, but may be longer. Repurchase
agreements not terminable within seven days will be limited to no
more than 10% of the Fund's assets.1 Pursuant to Rule 2a-7, a
repurchase agreement is deemed to be an acquisition of the
underlying securities provided that the obligation of the seller
to repurchase the securities from the money market fund is
collateralized fully (as defined in such Rule). Accordingly, the
vendor of a fully collateralized repurchase agreement is deemed
to be the issuer of the underlying securities.

Reverse Repurchase Agreements. While the Fund has no
present plans to do so, it may enter into reverse repurchase
agreements, which have the characteristics of borrowing and which
involve the sale of securities held by the Fund with an agreement
to repurchase the securities at an agreed-upon price, date and
interest payment.

When-Issued Securities. Certain new issues that the Fund is
permitted to purchase are available on a "when-issued" basis,
that is, delivery and payment for the securities take place after
the transaction date, normally within ten days (the Fund will not
make any such commitments of more than thirty days). The payment
amount and the interest rate that will be received on the
securities are fixed on the transaction date. The Fund will make
commitments for such when-issued transactions only with the
intention of actually acquiring the securities and, to facilitate
such acquisitions, the Fund's Custodian will maintain, in a
separate account, cash, U.S. Government or other appropriate
high-grade debt obligations of the Fund having value equal to or
greater than such commitments. Similarly, a separate account
will be maintained to meet obligations in respect of reverse
repurchase agreements. On delivery dates for such transactions,
the Fund will meet its obligations from maturities or sales of
the securities held in the separate account and/or from then
available cash flow. If the Fund chooses to dispose of the right
to acquire a when-issued security prior to its acquisition, it
could, as with the disposition of any other portfolio obligation,
incur a gain or loss due to market fluctuation. No when-issued
commitments will be made if, as a result, more than 15% of the
Fund's net assets would be so committed.

While there are many kinds of short-term securities used by
money market investors, the Fund, in keeping with its primary
____________________

1. As used throughout the Prospectus and Statement of Additional
Information, the term "assets" shall refer to the Funds total
assets.

<PAGE>

investment objective of safety of principal, restricts its
portfolio to the types of investments listed above. Net income
to shareholders is aided both by the Fund's ability to make
investments in large denominations and by its efficiencies of
scale. Also, the Fund may seek to improve its income by selling
certain portfolio securities prior to maturity in order to take
advantage of yield disparities that occur in money markets. The
market value of the Fund's investments tends to decrease during
periods of rising interest rates and to increase during intervals
of falling rates. Except as otherwise provided, the Fund's
investment policies are not designated "fundamental policies"
within the meaning of the Act and may, therefore, be changed by
the Trustees of the Trust without a shareholder vote. However,
the Fund will not change its investment policies without
contemporaneous written notice to shareholders. There can be no
assurance, as is true with all investment companies, that the
Fund's objectives will be achieved.

Rule 2a-7 under the Act. The Fund will comply with Rule
2a-7 under the Act, as amended from time to time, including the
diversification, quality and maturity limitations imposed by the
Rule.

Currently, pursuant to Rule 2a-7, the Fund may invest only
in U.S. dollar-denominated "eligible securities" (as that term is
defined in the Rule) that have been determined by the Adviser to
present minimal credit risks pursuant to procedures approved by
the Trustees. Generally, an eligible security is a security that
(i) has a remaining maturity of 397 days or less and (ii) is
rated, or is issued by an issuer with short-term debt outstanding
that is rated, in one of the two highest rating categories by two
nationally recognized statistical rating organizations ("NRSROs")
or, if only one NRSRO has issued a rating, by that NRSRO. A
security that originally had a maturity of greater than 397 days
is an eligible security if its remaining maturity at the time of
purchase is 397 calendar days or less and the issuer has
outstanding short-term debt that would be an eligible security.
Unrated securities may also be eligible securities if the Adviser
determines that they are of comparable quality to a rated
eligible security pursuant to guidelines approved by the
Trustees. A description of the ratings of some NRSROs appears in
the Appendix attached hereto.

<PAGE>

immediately after the acquisition thereof the Fund would have
invested more than (A) the greater of one percent of its total
assets or one million dollars in securities issued by that issuer
which are second tier securities, or (B) five percent of its
total assets in second tier securities.

_________________________________________________________________

INVESTMENT RESTRICTIONS
_________________________________________________________________

The foregoing investment objectives and policies and the
following restrictions may not, except as otherwise indicated, be
changed without the approval of a majority of the Fund's
outstanding shares. As used in this prospectus, the term
"majority of the Fund's outstanding shares" means the affirmative
vote of the holders of (a) 67% or more of the shares represented
at a meeting at which more than 50% of the outstanding shares are
represented or (b) more than 50% of the outstanding shares,
whichever is less. If a percentage restriction is adhered to at
the time of an investment, a later increase or decrease in
percentage resulting from a change in value of portfolio
securities or in amount of the Fund's assets will not constitute
a violation of that restriction.

The Fund:

1. May not purchase any security which has a maturity date
more than one year2 from the date of the Fund's purchase;

2. May not purchase securities other than marketable
obligations of, or guaranteed by, the United States Government,
its agencies or instrumentalities, or repurchase agreements
pertaining thereto;

3. May not enter into repurchase agreements if, as a result
thereof, more than 10% of the Fund's assets would be subject to
repurchase agreements not terminable within seven days (which may
be considered to be illiquid) or with any one seller3 if, as a
result thereof, more than 5% of the Fund's assets would be
invested in repurchase agreements purchased from such seller; and
may not enter into any reverse repurchase agreements if, as a

____________________

2. Which maturity, pursuant to Rule 2a-7, may extend to 397
days.

3. Pursuant to Rule 2a-7, the seller of a fully collateralized
repurchase agreement is deemed to be the issuer of the
underlying securities.

<PAGE>

result thereof, the Fund's obligations with respect to reverse
repurchase agreements would exceed 10% of the Fund's assets;

4. May not borrow money except from banks on a temporary
basis or via entering into reverse repurchase agreements in
aggregate amounts not to exceed 10% of the Fund's assets and to
be used exclusively to facilitate the orderly maturation and sale
of portfolio securities during any periods of abnormally heavy
redemption requests, if they should occur; such borrowings may
not be used to purchase investments and the Fund will not
purchase any investment while any such borrowings exist;

5. May not pledge, hypothecate or in any manner transfer,
as security for indebtedness, any securities owned or held by the
Fund except as may be necessary in connection with any borrowing
mentioned above, including reverse repurchase agreements, and in
an aggregate amount not to exceed 10% of the Fund's assets;

6. May not make loans, provided that the Fund may purchase
securities of the type referred to in paragraph 2 above and enter
into repurchase agreements with respect thereto; or

7. May not act as an underwriter of securities.

MANAGEMENT

Trustees and Officers

The Trustees and principal officers of the Fund and their
principal occupations during the past five years are set forth
below. Unless otherwise specified, the address of each such
person is 1345 Avenue of the Americas, New York, New York 10105.
Those Trustees whose names are preceded by an asterisk are
"interested persons" of the Fund as determined under the Act.
Each Trustee and officer is also a director, trustee or officer
of other registered companies sponsored by Alliance Capital
Management L.P. (the "Adviser").

Trustees

DAVE H. WILLIAMS,4 64, Chairman, is Chairman of the Board
of Directors of Alliance Capital Management Corporation

____________________

4. An "interested person" of the Fund as defined in the Act.

<PAGE>

("ACMC"),5 sole general partner of the Adviser with which he has
been associated since prior to 1991.

JOHN D. CARIFA,6 51, is the President, Chief Operating
Officer, and a Director of ACMC with which he has been associated
since prior to 1991.

SAM Y. CROSS, 69, was, since prior to December 1991,
Executive Vice President of The Federal Reserve Bank of New York
and manager for foreign operations for The Federal Reserve
System. He is also a director of Fuji Bank and Trust Co. His
address is 200 East 66th Street, New York, New York 10021.

CHARLES H. P. DUELL, 58, is President of Middleton Place
Foundation with which he has been associated since prior to 1991.
He is also a Director of GRC International, Inc., a Trustee
Emeritus of the National Trust for Historic Preservation and
serves on the Board of Architectural Review, City of Charleston.
His address is Middleton Place Foundation, Ashley River Road,
Charleston, South Carolina 29414.

WILLIAM H. FOULK, JR., 64, is an independent consultant. He
was formerly Senior Manager of Barrett Associates, Inc., a
registered investment adviser, with which he had been associated
since prior to 1991. His address is 2 Hekma Road, Greenwich, CT
06831.

ELIZABETH J. McCORMACK, 74, is an Associate of Rockefeller
Family and Associates (philanthropic organization) and has been
since prior to 1991. She is a Director of Philip Morris, Inc.,
Champion International Corporation and The American Savings Bank.
She is a Trustee of Hamilton College, and a Member of the Board
of Overseers Managers of Swarthmore College and the Memorial
Sloan-Kettering Cancer Center. Her address is 30 Rockefeller
Plaza, New York, New York 10112.

DAVID K. STORRS, 52, is an independent consultant. He was
formerly President of The Common Fund (investment management for
educational institutions) with which he had been since prior to
1991. His address is 65 South Gate Lane, Southport, Connecticut
06490.

____________________

5. For purposes of this Statement of Additional Information,
ACMC refers to Alliance Capital Management Corporation, the
sole general partner of the Adviser, and to the predecessor
general partner of the Adviser of the same name.

6. An "interested person" of the Fund as defined in the Act.

<PAGE>

SHELBY WHITE, 58, is an author and financial journalist. Her
address is One Sutton Place South, New York, New York 10022.
partner of the Adviser of the same name.

Officers

RONALD M. WHITEHILL - President, 58, is a Senior Vice
President of ACMC and President of Alliance Cash Management
Services with which he has been associated since 1993.
Previously, he was Senior Vice President and Managing Director of
Reserve Fund since prior to 1991.

JOHN R. BONCZEK - Senior Vice President, 36, is a Vice
President of ACMC with which he has been associated since prior
to 1991.

KATHLEEN A. CORBET - Senior Vice President, 36, has been a
Senior Vice President of ACMC since July 1993. Previously, she
held various responsibilities as head of Equitable Capital
Management Corporation's Fixed Income Management Department,
Private Placement Secondary Trading and Fund Management since
prior to 1991.

ROBERT I. KURZWEIL - Senior Vice President, 45, has been a
Vice President of ACMC since May 1994. Previously, he was Vice
President of Sales and Business Development for Automatic Data
Processing with which he had been associated since prior to 1991.

WAYNE D. LYSKI - Senior Vice President, 55, is an Executive
Vice President of ACMC with which he has been associated since
prior to 1991.

PATRICIA NETTER - Senior Vice President, 45, is a Vice
President of ACMC with which she has been associated since prior
to 1991.

RONALD R. VALEGGIA - Senior Vice President, 49, is a Senior
Vice President of ACMC with which he has been associated since
prior to 1991.

DREW BIEGEL - Vice President, 45, is a Vice President of
ACMC which he has been associated with since prior to 1991.

JOHN F. CHIODI, Jr. - Vice President, 30, is a Vice
President of ACMC with which he has been associated since prior
to 1991.

<PAGE>

DORIS T. CILIBERTI - Vice President, 32, is an Assistant
Vice President of ACMC with which she has been associated since
prior to 1991.

WILLIAM J. FAGAN - Vice President, 34, is an Assistant Vice
President of ACMC with which he has been associated since prior
to 1991.

JOSEPH R. LASPINA - Vice President, 36, is an Assistant Vice
President of ACMC with which he has been associated since prior
to 1991.

LINDA D. NEIL - Vice President, 36, is an Assistant Vice
President of ACMC with which she has been associated since August
1993. Previously, she was an Associate Director of The Reserve
Fund since prior to 1991.

RAYMOND J. PAPERA - Vice President, 40, is a Vice President
of ACMC with which he has been associated since prior to 1991.

PAMELA F. RICHARDSON - Vice President, 43, is a Vice
President of ACMC with which she has been associated since prior
to 1991.

EDMUND P. BERGAN, Jr. - Secretary, 46, is a Senior Vice
President and General Counsel of Alliance Fund Distributors, Inc.
("AFD") with which he has been associated since prior to 1991.

MARK D. GERSTEN - Treasurer and Chief Financial Officer, 46,
is a Senior Vice President of Alliance Fund Services, Inc.
("AFS") and AFD with which he has been associated since prior to
1991.

JOSEPH J. MANTINEO - Controller, 37, is a Vice President of
AFS with which he has been associated since prior to 1991.

As of October 16, 1996, the Trustees and officers as a group
owned less than 1% of the shares of the Fund.

The Fund does not pay any fees to, or reimburse expenses of,
its Trustees who are considered "interested persons" of the Fund.
The aggregate compensation paid by the Fund to each of the
Trustees during its fiscal year ended June 30, 1996, the
aggregate compensation paid to each of the Trustees during
calendar year 1995 by all of the registered investment companies
to which the Adviser provides investment advisory services
(collectively, the "Alliance Fund Complex") and the total number
of funds in the Alliance Fund Complex with respect to which each
of the Trustees serves as a director or trustee, are set forth

<PAGE>

below. Neither the Fund nor any other fund in the Alliance Fund
Complex provides compensation in the form of pension or
retirement benefits to any of its directors or trustees.

Total Number
Total of Funds in the
Compensation Alliance Fund
from the Complex Including
Alliance the Fund, as to
Aggregate Fund Complex, which the Trustee
Name of Trustee Compensation Including is a Director
of the Fund from the Fund the Fund or Trustee

Dave H. Williams $-0- $-0- 6
John D. Carifa $-0- $-0- 50
Sam Y. Cross $2,271 $ 14,250 3
Charles H.P. Duell $2,271 $ 15,000 3
William H. Foulk, Jr. $3,000 $143,500 31
Elizabeth J. McCormack $1,896 $ 12,000 3
David K. Storrs $2,271 $ 12,000 3
Shelby White $2,271 $ 13,500 3

The Adviser

Alliance Capital Management L.P., a New York Stock Exchange
listed company with principal offices at 1345 Avenue of the
Americas, New York, New York 10105, has been retained under an
investment advisory agreement (the "Advisory Agreement") to
provide investment advice and, in general, to conduct the
management and investment program of the Fund under the
supervision and control of the Fund's Board of Directors.

The Adviser is a leading international investment manager
supervising client accounts with assets as of June 30, 1996 of
more than $168 billion (of which more than $55 billion
represented the assets of investment companies). The Adviser's
clients are primarily major corporate employee benefit funds,
public employee retirement systems, investment companies,
foundations and endowment funds and included as of June 30, 1996,
33 of the FORTUNE 100 companies. As of that date, the Adviser
and its subsidiaries employed approximately 1,450 employees who
operated out of domestic offices and the offices of subsidiaries
in Bombay, Istanbul, London, Paris, Sao Paulo, Sydney, Tokyo,
Toronto, Bahrain, Luxembourg and Singapore. The 51 registered
investment companies comprising more than 100 separate investment
portfolios managed by the Adviser currently have more than two
million shareholders.

<PAGE>

Alliance Capital Management Corporation, the sole general
partner of, and the owner of a 1% general partnership interest
in, the Adviser, is an indirect wholly-owned subsidiary of The
Equitable Life Assurance Society of the United States
("Equitable"), one of the largest life insurance companies in the
United States and a wholly-owned subsidiary of The Equitable
Companies Incorporated ("ECI"), a holding company controlled by
AXA, a French insurance holding company. As of June 30, 1996,
ACMC, Inc. and Equitable Capital Management Corporation, each a
wholly-owned direct or indirect subsidiary of Equitable, together
with Equitable, owned in the aggregate approximately 57% of the
issued and outstanding units representing assignments of
beneficial ownership of limited partnership interests in the
Adviser ("Units"). As of June 30, 1996, approximately 33% and
10% of the Units were owned by the public and employees of the
Adviser and its subsidiaries, respectively, including employees
of the Adviser who serve as Trustees of the Fund

As of March 1, 1996, AXA and its subsidiaries owned
approximately 63.9% of the issued and outstanding shares of
capital stock of ECI. AXA is the holding company for an
international group of insurance and related financial services
companies. AXA's insurance operations include activities in life
insurance, property and casualty insurance and reinsurance. The
insurance operations are diverse geographically, with activities
in France, the United States, Australia, the United Kingdom,
Canada and other countries, principally in the Asia Pacific area.
AXA is also engaged in asset management, investment banking,
securities trading, brokerage, real estate and other financial
services activities in the United States, Europe and the Asia
Pacific area. Based on information provided by AXA, as of
March 1, 1996, 42.1% of the issued ordinary shares (representing
53.4% of the voting power) of AXA were owned by Midi
Participations, a French holding company ("Midi"). The shares of
Midi were, in turn, owned 61.4% (representing 62.5% of the voting
power) by Finaxa, a French holding company, and 38.6%
(representing 37.5% of the voting power) by subsidiaries of
Assicurazioni Generali S.p.A., an Italian corporation (one of
which, Belgica Insurance Holding S.A., a Belgian corporation,
owned 30.8%, representing 33.1% of the voting power). As of
March 1, 1996, 61.1% of the voting shares (representing 73.4% of
the voting power) of Finaxa were owned by five French mutual
insurance companies (the "Mutuelles AXA") (one of which, AXA
Assurances I.A.R.D. Mutuelle, owned 34.7% of the voting shares
representing 40.4% of the voting power), and 25.5% of the voting
shares of Finaxa (representing 16% of the voting power) were
owned by Banque Paribas, a French bank. Including the ordinary
shares owned by Midi, as of March 1, 1996, the Mutuelles AXA

<PAGE>

directly or indirectly owned 51% of the issued ordinary shares
(representing 64.7% of the voting power) of AXA. Acting as a
group, the Mutuelles AXA control AXA, Midi and Finaxa.

Under the Advisory Agreement, the Adviser provides investment
advisory services and order placement facilities for the Fund and
pays all compensation of Trustees of the Fund who are affiliated
persons of the Adviser. The Adviser or its affiliates also
furnish the Fund without charge with management supervision and
assistance and office facilities. Under the Advisory Agreement,
the Fund pays an advisory fee at an annual rate of .50 of 1% of
up to $1.25 billion of the average daily value of the Fund's net
assets, .49 of 1% of the next $.25 billion of such assets, .48 of
1% of the next $.25 billion of such assets, .47 of 1% of the next
$.25 billion of such assets, .46 of 1% of the next $1 billion of
such assets and .45 of 1% of the average daily net assets of the
Fund in excess of $3 billion. The fee is accrued daily and paid
monthly. The Adviser will reimburse the Fund to the extent that
its net expenses (excluding taxes, brokerage, interest and
extraordinary expenses) exceed 1% of its average daily net assets
for any fiscal year. For the fiscal years ended June 30, 1994,
1995 and 1996 the Adviser received from the Fund, advisory fees
of $9,200,580, $10,057,300 and $14,176,991, respectively. In
accordance with the Distribution Services Agreement described
below, the Fund may pay a portion of advertising and promotional
expenses in connection with the sale of shares of the Fund. The
Fund also pays for printing of prospectuses and other reports to
shareholders and all expenses and fees related to registration
and filing with the Securities and Exchange Commission and with
state regulatory authorities. The Fund pays all other expenses
incurred in its operations, including the Adviser's management
fees; custody, transfer and dividend disbursing expenses; legal
and auditing costs; clerical, administrative accounting, and
other office costs; fees and expenses of Trustees who are not
affiliated with the Adviser; costs of maintenance of the Trust's
existence; and interest charges, taxes, brokerage fees, and
commissions. As to the obtaining of clerical and accounting
services not required to be provided to the Fund by the Adviser
under the Advisory Agreement, the Fund may employ its own
personnel. For such services, it also may utilize personnel
employed by the Adviser; if so done, the services are provided to
the Fund at cost and the payments therefor must be specifically
approved in advance by the Trustees. The Fund paid to the
Adviser a total of $139,000, $151,500 and $163,000, respectively,
for such services for the fiscal years ended June 30, 1994, 1995
and 1996.

The Fund has made arrangements with certain broker-dealers
whose customers are Fund shareholders pursuant to which the

<PAGE>

broker-dealers perform shareholder servicing functions, such as
opening new shareholder accounts, processing purchase and
redemption transactions, and responding to inquiries regarding
the Fund's current yield and the status of shareholder accounts.
The Fund pays for the electronic communications equipment
maintained at the broker-dealers' offices that permits access to
the Fund's computer files and, in addition, reimburses the
broker-dealers at cost for personnel expenses involved in
providing the services. All such reimbursements must be approved
in advance by the Trustees. For the fiscal years ended June 30,
1994, 1995 and 1996, the Fund reimbursed such broker-dealers a
total of $803,149, $1,406,467 and $1,611,378, respectively.

The Advisory Agreement became effective on July 22, 1992.
Continuance of the Advisory Agreement until June 30, 1997 was
approved by the vote, cast in person by all the Trustees of the
Trust who neither were interested persons of the Trust nor had
any direct or indirect financial interest in the Agreement or any
related agreement, at a meeting called for that purpose on June
3, 1996.

The Advisory Agreement will remain in effect thereafter from
year to year provided that such continuance is specifically
approved annually by a vote of a majority of the outstanding
shares of the Fund or by the Fund's Trustees, including in either
case approval by a majority of the Trustees who are not parties
to the Advisory Agreement or interested persons as defined in the
Act. The Advisory Agreement may be terminated without penalty on
60 days' written notice at the option of either party or by a
vote of the outstanding voting securities of the Fund; it will
automatically terminate in the event of assignment. The Adviser
is not liable for any action or inaction in regard to its
obligations under the Advisory Agreement as long as it does not
exhibit willful misfeasance, bad faith, gross negligence, or
reckless disregard of its obligations.

Distribution Services Agreement

Rule 12b-1 adopted by the Securities and Exchange Commission
under the Act permits an investment company to directly or
indirectly pay expenses associated with the distribution of its
shares in accordance with a duly adopted and approved plan. The
Fund has entered into a Distribution Services Agreement (the
"Agreement") which includes a plan adopted pursuant to Rule 12b-1
(the "Plan") with Alliance Fund Distributors, Inc. (the
"Distributor") and the Adviser. Pursuant to the Plan, the Fund
pays to the Distributor a Rule 12b-1 distribution services fee
which may not exceed an annual rate of .25 of 1% of the Fund's
aggregate average daily net assets. In addition, under the

<PAGE>

Agreement the Adviser makes payments for distribution assistance
and for administrative and accounting services from its own
resources which may include the management fee paid by the Fund.

Payments under the Agreement are used in their entirety for
(i) payments to broker-dealers and other financial
intermediaries, including the Distributor, for distribution
assistance and to banks and other depository institutions for
administrative and accounting services, and (ii) otherwise
promoting the sale of shares of the Fund such as by paying for
the preparation, printing and distribution of prospectuses and
other promotional materials sent to existing and prospective
shareholders and by directly or indirectly purchasing radio,
television, newspaper and other advertising. In approving the
Agreement the Trustees determined that there was a reasonable
likelihood that the Agreement would benefit the Fund and its
shareholders. During the fiscal year ended June 30, 1996, the
Fund made payments to the Adviser for expenditures, under the
Agreement in amounts aggregating $7,023,265 which constituted .24
of 1% of the Fund's average daily net assets during the period,
and the Adviser made payments from its own resources as described
above aggregating $8,477,211. Of the $15,500,476 paid by the
Adviser and the Fund under the Agreement, $99,000 was paid for
advertising, printing, and mailing of prospectuses to persons
other than current shareholders; and $15,401,476 was paid to
broker-dealers and other financial intermediaries for
distribution assistance.

The administrative and accounting services provided by banks
and other depository institutions may include, but are not
limited to, establishing and maintaining shareholder accounts,
sub-accounting, processing of purchase and redemption orders,
sending confirmations of transactions, forwarding financial
reports and other communications to shareholders and responding
to shareholder inquiries regarding the Fund. The State of Texas
requires that shares of the Fund may be sold in that state only
by dealers or other financial institutions that are registered
there as broker-dealers. As interpreted by courts and
administrative agencies, certain laws and regulations limit the
ability of a bank or other depository institution to become an
underwriter or distributor of securities. However, in the
opinion of the Fund's management based on the advice of counsel,
these laws and regulations do not prohibit such depository
institutions from providing other services for investment
companies such as the administrative and accounting services
described above. The Trustees will consider appropriate
modifications to the Fund's operations, including discontinuance
of payments under the Agreement to banks and other depository
institutions, in the event of any future change in such laws or

<PAGE>

regulations which may affect the ability of such institutions to
provide the above-mentioned services.

The Treasurer of the Fund reports the amounts expended under
the Agreement and the purposes for which such expenditures were
made to the Trustees on a quarterly basis. Also, the Agreement
provides that the selection and nomination of disinterested
Trustees (as defined in the Act) are committed to the discretion
of the disinterested Trustees then in office.

The Agreement became effective on July 22, 1992. Continuance
of the Agreement until June 30, 1997 was approved by the vote,
cast in person by all the Trustees of the Fund who neither were
interested persons of the Fund nor had any direct or indirect
financial interest in the Agreement or any related agreement, at
a meeting called for that purpose on June 3, 1996. The Agreement
may be continued annually thereafter if approved by a majority
vote of the Trustees who neither are interested persons of the
Fund nor have any direct or indirect financial interest in the
Agreement or in any related agreement, cast in person at a
meeting called for that purpose.

All material amendments to the Agreement must be approved by
a vote of the Trustees, including a majority of the disinterested
Trustees, cast in person at a meeting called for that purpose,
and the Agreement may not be amended in order to increase
materially the costs which the Fund may bear pursuant to the
Agreement without the approval of a majority of the outstanding
shares of the Fund. The Agreement may also be terminated at any
time by a majority vote of the disinterested Trustees, or by a
majority of the outstanding shares of the Fund or by the
Distributor. Any agreement with a qualifying broker-dealer or
other financial intermediary may be terminated without penalty on
not more than sixty days' written notice by a vote of the
majority of non-party Trustees, by a vote of a majority of the
outstanding shares of the Fund, or by the Distributor and will
terminate automatically in the event of its assignment.

The Agreement is in compliance with rules of the National
Association of Securities Dealers, Inc. (the "NASD") which became
effective July 7, 1993 and which limit the annual asset-based
sales charges and service fees that a mutual fund may impose to
.75% and .25%, respectively, of average annual net assets.

<PAGE>

PURCHASE AND REDEMPTION OF SHARES

Generally, shares of the Fund are sold and redeemed on a
continuous basis without sales or redemption charges at their net
asset value which is expected to be constant at $1.00 per share,
although this price is not guaranteed.

Accounts Not Maintained Through Financial Intermediaries

Opening Accounts - New Investments

A. When Funds are Sent by Wire (the wire method permits
immediate credit)

1) Telephone the Fund toll-free at (800) 824-1916. The
Fund will ask for the name of the account as you
wish it to be registered, address of the account,
and taxpayer identification number (social security
number for an individual). The Fund will then
provide you with an account number.

2) Instruct your bank to wire Federal funds (minimum
$1,000) exactly as follows:

ABA 0110 0002-8
State Street Bank and Trust Company
Boston, MA 02101
Alliance Government Reserves
DDA 9903-279-9

Your account name as registered with the Fund
Your account number as registered with the
Fund

3) Mail a completed Application Form to:

Alliance Fund Services, Inc.
P.O. Box 1520
Secaucus, New Jersey 07096-1520

B. When Funds are Sent by Check

1) Fill out an Application Form.

2) Mail the completed Application Form along with your
check or negotiable bank draft (minimum $1,000),
payable to "Alliance Government Reserves," to
Alliance Fund Services, Inc. as in A(3) above.

<PAGE>

Subsequent Investments

A. Investments by Wire (to obtain immediate credit)

Instruct your bank to wire Federal funds (minimum $100)
to State Street Bank and Trust Company ("State Street Bank")
as in A(2) above.

B. Investments by Check

Mail your check or negotiable bank draft (minimum $100),
payable to "Alliance Government Reserves," to Alliance Fund
Services, Inc. as in A(3) above.

Include with the check or draft the "next investment" stub
from one of your previous monthly or interim account statements.
For added identification, place your Fund account number on the
check or draft.

Investments Made by Check

Money transmitted by a check drawn on a member of the Federal
Reserve System is converted to Federal funds in one business day
following receipt and, thus, is then invested in the Fund.
Checks drawn on banks which are not members of the Federal
Reserve System may take longer to be converted and invested. All
payments must be in United States dollars.

PROCEEDS FROM ANY SUBSEQUENT REDEMPTION BY YOU OF FUND SHARES
THAT WERE PURCHASED BY CHECK OR ELECTRONIC FUNDS TRANSFER WILL
NOT BE FORWARDED TO YOU UNTIL THE FUND IS REASONABLY ASSURED THAT
YOUR CHECK OR ELECTRONIC FUNDS TRANSFER HAS CLEARED, UP TO
FIFTEEN DAYS FOLLOWING THE PURCHASE DATE. If the redemption
request during such period is in the form of a Fund check, the
check will be marked "insufficient funds" and be returned unpaid
to the presenting bank.

Redemptions

A. By Telephone

You may withdraw any amount from your account on any
Fund business day (i.e., any weekday exclusive of days on
which the New York Stock Exchange or State Street Bank is
closed) between 9:00 a.m. and 5:00 p.m. (New York time) via
orders given to Alliance Fund Services, Inc. by telephone
toll-free (800) 824-1916. Such redemption orders must
include your account name as registered with the Fund and the
account number.

<PAGE>

If your telephone redemption order is received by Alliance
Fund Services, Inc. prior to 12:00 Noon (New York time), we will
send the proceeds in Federal funds by wire to your designated
bank account that day. The minimum amount for a wire is $1,000.
If your telephone redemption order is received by Alliance Fund
Services, Inc. after 12:00 Noon and before 4:00 p.m., we will
wire the proceeds the next business day. You also may request
that proceeds be sent by check to your designated bank.
Redemptions are made without any charge to you.

During periods of drastic economic or market developments,
such as the market break of October 1987, it is possible that
shareholders would have difficulty in reaching Alliance Fund
Services, Inc. by telephone (although no such difficulty was
apparent at any time in connection with the 1987 market break).
If a shareholder were to experience such difficulty, the
shareholder should issue written instructions to Alliance Fund
Services, Inc. at the address shown on the cover of this
statement of additional information. The Fund reserves the right
to suspend or terminate its telephone redemption service at any
time without notice. Neither the Fund nor the Adviser, or
Alliance Fund Services, Inc. will be responsible for the
authenticity of telephone requests for redemptions that the Fund
reasonably believes to be genuine. The Fund will employ
reasonable procedures in order to verify that telephone requests
for redemptions are genuine, including among others, recording
such telephone instructions and causing written confirmations of
the resulting transactions to be sent to shareholders. If the
Fund did not employ such procedures, it could be liable for
losses arising from unauthorized or fraudulent telephone
instructions. Selected dealers or agents may charge a commission
for handling telephone requests for redemptions.

B. By Check-Writing

With this service, you may write checks made payable to
any payee in any amount of $100 or more. Checks cannot be
written for more than the principal balance (not including
any accrued dividends) in your account. First, you must fill
out the Signature Card which is with the Application Form.
If you wish to establish this check-writing service
subsequent to the opening of your Fund account, contact the
Fund by telephone or mail. There is no separate charge for
the check-writing service, except that State Street Bank will
impose its normal charges for checks which are returned
unpaid because of insufficient funds or for checks upon which
you have placed a stop order.

The check-writing service enables you to receive the daily
dividends declared on the shares to be redeemed until the day
that your check is presented to State Street Bank for payment.

<PAGE>

C. By Mail

You may withdraw any amount from your account at any
time by mail. Written orders for withdrawal, accompanied by
duly endorsed certificates, if issued, should be mailed to
Alliance Fund Services, Inc., P.O. Box 1520, Secaucus, New
Jersey 07096-1520. Such orders must include the account name
as registered with the Fund and the account number. All
written orders for redemption, and accompanying certificates,
if any, must be signed by all owners of the account with the
signatures guaranteed by an institution which is an "eligible
guarantor" as defined in Rule 17Ad-15 under the Securities
Exchange Act of 1934, as amended.

ADDITIONAL INFORMATION

Shareholders maintaining Fund accounts through brokerage
firms and other institutions should be aware that such
institutions necessarily set deadlines for receipt of transaction
orders from their clients that are earlier than the transaction
times of the Fund itself so that the institutions may properly
process such orders prior to their transmittal to State Street
Bank. Should an investor place a transaction order with such an
institution after its deadline, the institution may not effect
the order with the Fund until the next business day.
Accordingly, an investor should familiarize himself or herself
with the deadlines set by his or her institution. (For example,
the Distributor accepts purchase orders from its customers up to
2:15 p.m. New York time for issuance at the 4:00 p.m. transaction
time and price.) A brokerage firm acting on behalf of a customer
in connection with transactions in Fund shares is subject to the
same legal obligations imposed on it generally in connection with
transactions in securities for a customer, including the
obligation to act promptly and accurately.

Orders for the purchase of Fund shares become effective at
the next transaction time after Federal funds or bank wire monies
become available to State Street Bank for a shareholder's
investment. Federal funds are a bank's deposits in a Federal
Reserve Bank. These funds can be transferred by Federal Reserve
wire from the account of one member bank to that of another
member bank on the same day and are considered to be immediately
available funds; similar immediate availability is accorded
monies received at State Street Bank by bank wire. Money
transmitted by a check drawn on a member of the Federal Reserve
System is converted to Federal funds in one business day
following receipt. Checks drawn on banks which are not members
of the Federal Reserve System may take longer. All payments

<PAGE>

(including checks from individual investors) must be in United
States dollars.

All shares purchased are confirmed to each shareholder and
are credited to his or her account at the net asset value. To
avoid unnecessary expense to the Fund and to facilitate the
immediate redemption of shares, share certificates, for which no
charge is made, are not issued except upon the written request of
a shareholder. Certificates are not issued for fractional
shares. Shares for which certificates have been issued are not
eligible for any of the optional methods of withdrawal; namely,
the telephone, telegraph, check-writing or periodic redemption
procedures. The Fund reserves the right to reject any purchase
order.

Arrangements for Telephone Redemptions. If you wish to use
the telephone redemption procedure, indicate this on your
Application Form and designate a bank and account number to
receive the proceeds of your withdrawals. If you decide later
that you wish to use this procedure, or to change instructions
already given, send a written notice to Alliance Fund Services,
Inc., P.O. Box 1520, Secaucus, New Jersey 07096-1520, with your
signature guaranteed by an institution which is an eligible
guarantor. For joint accounts, all owners must sign and have
their signatures guaranteed.

Automatic Investment Program. A shareholder may purchase
shares of the Fund through an automatic investment program
through a bank that is a member of the National Automated
Clearing House Association. Purchases can be made on a Fund
business day each month designated by the shareholder.
Shareholders wishing to establish an automatic investment program
should write or telephone the Fund or Alliance Fund Service, Inc.
at (800) 221-5672.

Retirement Plans. The Fund's objectives of safety of
principal, excellent liquidity and maximum current income to the
extent consistent with the first two objectives may make it a
suitable investment vehicle for part or all of the assets held in
various tax-deferred retirement plans. The Fund has available
forms of individual retirement account (IRA), simplified employee
pension plans (SEP), 403(b)(7) plans and employer-sponsored
retirement plans (Keogh or HR10 Plan). Certain services
described in this prospectus may not be available to retirement
accounts and plans. Persons desiring information concerning
these plans should write or telephone the Fund or AFS at (800)
221-5672.

The Alliance Plans Division of Frontier Trust Company, a
subsidiary of The Equitable Life Assurance Society of the United
States, is the custodian under these plans. The custodian

<PAGE>

charges a nominal account establishment fee and a nominal annual
maintenance fee. A portion of such fees is remitted to AFS to
compensate that organization for services rendered to retirement
plan accounts maintained with the Fund.

Periodic Distribution Plans. Without affecting your right to
use any of the methods of redemption described above, by checking
the appropriate boxes on the Application Form, you may elect to
participate additionally in the following plans without any
separate charge. Under the Income Distribution Plan you receive
monthly payments of all the income earned in your Fund account,
with payments forwarded by check or electronically via the
Automated Clearing House ("ACH") network shortly after the close
of the month. Under the Systematic Withdrawal Plan, you may
request payments by check or electronically via the ACH network
in any specified amount of $50 or more each month or in any
intermittent pattern of months. If desired, you can order, via a
signature-guaranteed letter to the Fund, such periodic payments
to be sent to another person. Shareholders wishing either of the
above plans electronically through the ACH network should write
or telephone the Fund or AFS at (800) 221-5672.

The Fund has the right to close out an account if it has a
zero balance on December 31 and no account activity for the first
six months of the subsequent year. Therefore, unless this has
occurred, a shareholder with a zero balance, when reinvesting,
should continue to use his account number. Otherwise, the
account should be re-opened pursuant to procedures described
above or through instructions given to a financial intermediary.

A "business day," during which purchases and redemptions of
Fund shares can become effective and the transmittal of
redemption proceeds can occur, is considered for Fund purposes as
any weekday exclusive of national holidays on which the New York
Stock Exchange is closed and Good Friday; if one of these
holidays falls on a Saturday or Sunday, purchases and redemptions
will likewise not be processed on the preceding Friday or the
following Monday, respectively. On any such day that is an
official bank holiday in Massachusetts, neither purchases nor
wired redemptions can become effective because Federal funds
cannot be received or sent by State Street Bank. On such days,
therefore, the Fund can only accept redemption orders for which
shareholders desire remittance by check. The right of redemption
may be suspended or the date of a redemption payment postponed
for any period during which the New York Stock Exchange is closed
(other than customary weekend and holiday closings), when trading
on the New York Stock Exchange is restricted, or an emergency (as
determined by the Securities and Exchange Commission) exists, or
the Commission has ordered such a suspension for the protection
of shareholders. The value of a shareholder's investment at the
time of redemption may be more or less than his or her cost,

<PAGE>

depending on the market value of the securities held by the Fund
at such time and the income earned.

DAILY DIVIDENDS--DETERMINATION OF NET ASSET VALUE

All net income of the Fund is determined after the close of
each business day, currently 4:00 p.m. New York time (and at such
other times as the Trustees may determine) and is paid
immediately thereafter pro rata to shareholders of record via
automatic investment in additional full and fractional shares in
each shareholder's account at the rate of one share for each
dollar distributed. As such additional shares are entitled to
dividends on following days, a compounding growth of income
occurs.

Net income consists of all accrued interest income on Fund
portfolio assets less the Fund's expenses applicable to that
dividend period. Realized gains and losses are reflected in net
asset value and are not included in net income. Net asset value
per share is expected to remain constant at $1.00 since all net
income is declared as a dividend each time net income is
determined.

The valuation of the Fund's portfolio securities is based
upon their amortized cost which does not take into account
unrealized securities gains or losses as measured by market
valuations. The amortized cost method involves valuing an
instrument at its cost and thereafter applying a constant
amortization to maturity of any discount or premium, regardless
of the impact of fluctuating interest rates on the market value
of the instrument. During periods of declining interest rates,
the daily yield on shares of the Fund may be higher than that of
a fund with identical investments utilizing a method of valuation
based upon market prices for its portfolio instruments; the
converse would apply in a period of rising interest rates.

The Fund utilizes the amortized cost method of valuation of
portfolio securities in accordance with the provisions of Rule
2a-7 under the Act. Pursuant to such rule, the Fund maintains a
dollar-weighted average portfolio maturity of 90 days or less and
invests only in securities of high quality. The Fund also
purchases instruments which, at the time of investment, have
remaining maturities of no more than one year which maturities
may extend to 397 days. The Fund maintains procedures designed
to stabilize, to the extent reasonably possible, the price per
share as computed for the purpose of sales and redemptions at
$1.00. Such procedures include review of the Fund's portfolio
holdings by the Trustees at such intervals as they deem

<PAGE>

appropriate to determine whether and to what extent the net asset
value of the Fund calculated by using available market quotations
or market equivalents deviates from net asset value based on
amortized cost. If such deviation exceeds 1/2 of 1%, the Trustees
will promptly consider what action, if any, should be initiated.
In the event the Trustees determine that such a deviation may
result in material dilution or other unfair results to new
investors or existing shareholders, they will consider corrective
action which might include (1) selling instruments prior to
maturity to realize capital gains or losses or to shorten average
portfolio maturity; (2) withholding dividends of net income on
shares; or (3) establishing a net asset value per share using
available market quotations or equivalents. There can be no
assurance, however, that the Fund's net asset value per share
will remain constant at $1.00.

The net asset value of the shares is determined each business
day at 12:00 Noon and 4:00 p.m. (New York time). The net asset
value per share is calculated by taking the sum of the value of
the Fund's investments and any cash or other assets, subtracting
liabilities, and dividing by the total number of shares
outstanding. All expenses, including the fees payable to the
Adviser, are accrued daily.

TAXES

The Fund has qualified in each fiscal year to date and
intends to qualify in each future year to be taxed as a regulated
investment company under the Internal Revenue Code of 1986, as
amended (the "Code") and, as such, will not be liable for Federal
income and excise taxes on the net income and capital gains
distributed to its shareholders. Since the Fund distributes all
of its net income and capital gains, the Fund itself should
thereby avoid all Federal income and excise taxes.

For shareholders' Federal income tax purposes, all
distributions by the Fund out of interest income and net realized
short-term capital gains are treated as ordinary income and
distributions of long-term capital gains, if any, are treated as
long-term capital gains irrespective of the length of time the
shareholder held shares in the Fund. Since the Fund derives
nearly all of its gross income in the form of interest and the
balance in the form of short-term capital gains, it is expected
that for corporate shareholders, none of the Fund's distributions
will be eligible for the dividends-received deduction under
current law.

<PAGE>

GENERAL INFORMATION

Portfolio Transactions. Subject to the general supervision
of the Trustees of the Fund, the Adviser is responsible for the
investment decisions and the placing of the orders for portfolio
transactions for the Fund. Because the Fund invests in
securities with short maturities, there is a relatively high
portfolio turnover rate. However, the turnover rate does not
have an adverse effect upon the net yield and net asset value of
the Fund's shares since the Fund's portfolio transactions occur
primarily with issuers, underwriters or major dealers in money
market instruments acting as principals. Such transactions are
normally on a net basis which do not involve payment of brokerage
commissions. The cost of securities purchased from an
underwriter usually includes a commission paid by the issuer to
the underwriters; transactions with dealers normally reflect the
spread between bid and asked prices.

The Fund has no obligations to enter into transactions in
portfolio securities with any dealer, issuer, underwriter or
other entity. In placing orders, it is the policy of the Fund to
obtain the best price and execution for its transactions. Where
best price and execution may be obtained from more than one
dealer, the Adviser may, in its discretion, purchase and sell
securities through dealers who provide research, statistical and
other information to the Adviser. Such services may be used by
the Adviser for all of its investment advisory accounts and,
accordingly, not all such services may be used by the Adviser in
connection with the Fund. The supplemental information received
from a dealer is in addition to the services required to be
performed by the Adviser under the Advisory Agreement, and the
expenses of the Adviser will not necessarily be reduced as a
result of the receipt of such information. Portfolio securities
will not be purchased from or sold to the Adviser's parent, or
any subsidiary or affiliate of the parent. During the fiscal
years ended June 30, 1994, 1995 and 1996, the Fund paid no
brokerage commissions.

Capitalization. All shares of the Fund, when issued, are
fully paid and non-assessable. The Trustees are authorized to
reclassify and issue any unissued shares to any number of
additional classes or series without shareholder approval.
Accordingly, the Trustees, in the future, for reasons such as the
desire to establish one or more additional portfolios with
different investment objectives, policies or restrictions, may
create additional classes or series of shares. Any issuance of
shares of another class would be governed by the Act and the law

<PAGE>

of the Commonwealth of Massachusetts. If shares of another class
were issued in connection with the creation of a second
portfolio, each share of either portfolio would normally be
entitled to one vote for all purposes. Generally, shares of both
portfolios would vote as a single series for the election of
Trustees and on any other matter that affected both portfolios in
substantially the same manner. As to matters affecting each
portfolio differently, such as approval of the Advisory Agreement
and changes in investment policy, shares of each portfolio would
vote as separate classes. Certain procedures for the removal by
shareholders of trustees of investment trusts, such as the Fund,
are set forth in Section 16(c) of the Act.

At October 16, 1996, there were 3,420,616,539 shares of
beneficial interest of the Fund outstanding. To the knowledge of
the Fund the following persons owned of record, and no person
owned beneficially, 5% or more of the outstanding shares of the
Fund as of October 16, 1996:

Name and Address No. of Shares % of Fund
Robert W. Baird & Co, as Agent, 185,401,330.7 5.42%
Omnibus A/C for Exclusive
Benefit of Customers
First Wisconsin Building
777 East Wisconsin Avenue
Milwaukee, Wisconsin 53202-5302

Legal Matters. The legality of the shares offered hereby has
been passed upon by Seward & Kissel, New York, New York, counsel
for the Fund and the Adviser. Seward & Kissel has relied upon
the opinion of Sullivan & Worcester, Boston, Massachusetts, for
matters relating to Massachusetts law.

Auditors. An opinion relating to the Fund's financial
statements is given herein by McGladrey & Pullen, LLP, New York,
New York, independent auditors for the Fund.

Yield Quotations. Advertisements containing yield quotations
for the Fund may from time to time be sent to investors or placed
in newspapers, magazines or other media on behalf of the Fund.
These advertisements may quote performance rankings, ratings or
data from independent organizations or financial publications
such as Lipper Analytical Services, Inc., Morningstar, Inc.,
IBC's Money Fund Report, IBC's Money Market Insight or Bank Rate
Monitor or compare the Fund's performance to bank money market
deposit accounts, certificates of deposit or various indices.
Such yield quotations are calculated in accordance with the
standardized method referred to in Rule 482 under the Securities

<PAGE>

Act of 1933. Yield quotations are thus determined by (i)
computing the net change over a seven-day period, exclusive of
capital changes, in the value of a hypothetical pre-existing
account having a balance of one share at the beginning of such
period, (ii) dividing the net change in account value by the
value of the account at the beginning of such period, and (iii)
multiplying such base period return the result by (365/7)--with
the resulting yield figure carried to the nearest hundredth of
one percent. The Fund's effective annual yield represents a
compounding of the annualized yield according to the following
formula:

effective yield = [(base period return + 1)365/7] - 1

The Fund's yield for the seven-day period ended June 30,
1996, after expense reimbursement, was 4.38% which is the
equivalent of a 4.48% compounded effective yield. Absent such
reimbursement, the annualized yield for such period would have
been 4.29%, equivalent to an effective yield of 4.38%. Current
yield information for the Fund can be obtained by a recorded
message by telephoning toll-free at (800) 221-9513.

Additional Information. This Statement of Additional
Information does not contain all the information set forth in the
Registration Statement filed by the Fund with the Securities and
Exchange Commission under the Securities Act of 1933. Copies of
the Registration Statement may be obtained at a reasonable charge
from the Commission or may be examined, without charge, at the
Commission's offices in Washington, D.C.

26
00250083.AB7

<PAGE>

APPENDIX

A-1+, A-1 and Prime-1 Commercial Paper Ratings

"A-1+" is the highest, and "A-1" the second highest,
commercial paper rating assigned by Standard & Poor's Corporation
("Standard & Poor's") and "Prime-1" is the highest commercial
paper rating assigned by Moody's Investors Service, Inc.
("Moody's"). Standard & Poor's uses the numbers 1+, 1, 2 and 3
to denote relative strength within its highest classification of
"A", while Moody's uses the numbers 1, 2 and 3 to denote relative
strength within its highest classification of "Prime." Commercial
paper issuers rated "A" by Standard & Poor's have the following
characteristics: liquidity ratios are better than industry
average; long term debt rating is A or better; the issuer has
access to at least two additional channels of borrowing; basic
earnings and cash flow are in an upward trend; and typically, the
issuer is a strong company in a well-established industry and has
superior management. Commercial paper issuers rated "Prime" by
Moody's have the following characteristics: their short-term debt
obligations carry the smallest degree of investment risk; margins
of support for current indebtedness are large or stable with cash
flow and asset protection well assured; current liquidity
provides ample coverage of near-term liabilities and unused
alternative financing arrangements are generally available; and
while protective elements may change over the intermediate or
longer term, such changes are most unlikely to impair the
fundamentally strong position of short-term obligations.

AAA & AA and Aaa & Aa Bond Ratings

Bonds rated AAA and Aaa have the highest ratings assigned to
debt obligations by Standard & Poor's and Moody's, respectively.
Standard & Poor's AAA rating indicates an extremely strong
capacity to pay principal and interest. Bonds rated AA by
Standard & Poor's also qualify as high-quality debt obligations.
Capacity to pay principal and interest is very strong, and the
majority of instances they differ from AAA issues only in small
degree. Moody's Aaa rating indicates the ultimate degree of
protection as to principal and interest. Moody's Aa rated bonds,
though also high-grade issues, are rated lower than Aaa bonds
because margins of protection may not be as large or fluctuations
of protective elements may be of greater amplitude or there may
be other elements present which make the long-term risks appear
somewhat larger.

27
00250083.AB8

<PAGE>

STATEMENT OF NET ASSETS
JUNE 30, 1996 ALLIANCE GOVERNMENT RESERVES
_______________________________________________________________________________

PRINCIPAL
AMOUNT
(000) SECURITY+ YIELD VALUE
- ------------------------------------------------------------------------
U.S. GOVERNMENT AND AGENCIES-98.2%
FEDERAL NATIONAL MORTGAGE
ASSOCIATION-32.4%
$ 50,000 10/30/96 4.91% $ 49,174,847
21,010 7/12/96 5.00 20,977,901
25,000 7/24/96 5.19 24,917,104
25,000 7/12/96 5.20 24,960,278
7,000 7/23/96 5.20 6,977,755
34,000 7/30/96 5.20 33,857,578
100,000 8/23/96 5.21 99,232,972
36,000 7/18/96 5.22 35,911,260
97,000 7/10/96 5.25 96,872,688
22,800 8/06/96 5.25 22,680,414
50,000 8/08/96 5.25 49,722,917
6,000 7/30/96 5.26 5,974,577
20,000 9/12/96 5.27 19,786,475
25,000 5.27%, 7/05/96 FRN 5.36 24,999,811
50,000 5.28%, 10/01/96 FRN 5.33 49,993,868
25,000 5.30%, 12/26/96 5.30 24,991,732
81,000 5.40%, 4/04/97 FRN 5.50 80,971,231
10,000 5.41%, 9/27/96 FRN 5.41 10,000,000
12,000 5.41%, 10/04/96 FRN 5.43 11,998,385
90,000 5.45%, 10/15/96 FRN 5.52 89,981,853
50,000 5.55%, 6/11/97 FRN 5.60 49,977,112
79,500 5.56%, 10/15/97 FRN 5.57 79,513,075
50,000 5.62%, 7/02/96 5.62 50,000,617
20,000 5.64%, 10/02/96 5.85 19,989,531
40,000 5.76%, 9/03/96 5.76 40,019,686
15,000 8.00%, 7/10/96 5.31 15,009,346
--------------
1,038,493,013

FEDERAL HOME LOAN MORTGAGE CORP.-16.5%
25,000 7/03/96 5.20 24,992,778
10,000 8/21/96 5.20 9,926,333
11,432 8/12/96 5.24 11,362,112
25,000 7/10/96 5.25 24,967,219
25,000 8/13/96 5.25 24,843,229
79,900 7/15/96 5.27 79,736,249
105,588 7/18/96 5.28 105,324,734
24,266 7/19/96 5.28 24,201,938
115,849 7/22/96 5.28 115,492,185
9,000 7/22/96 5.29 8,972,228
25,000 9/17/96 5.34 24,710,750
73,100 7/01/96 5.52 73,100,000
--------------
527,629,755

FEDERAL FARM CREDIT BANK-15.5%
10,725 7/15/96 5.29% 10,702,936
25,000 4.95%, 3/03/97 5.00 24,990,242
40,000 5.30%, 8/01/96 5.26 39,997,368
53,000 5.36%, 9/03/96 FRN 5.36 53,000,000
50,000 5.37%, 5/20/97 FRN 5.49 49,948,364
80,000 5.38%, 6/01/98 FRN 5.40 79,971,539
150,000 5.50%, 6/26/97 FRN 5.65 149,928,986
14,000 5.60%, 7/01/96 5.60 14,000,000
75,000 5.71%, 5/01/98 FRN 5.71 75,000,000
--------------
497,539,435

FEDERAL HOME LOAN BANK-15.3%
20,000 7/19/96 5.00 19,950,000
15,400 10/23/96 5.19 15,146,901
20,000 10/16/96 5.21 19,690,294
25,000 11/05/96 5.22 24,539,625
15,000 11/12/96 5.25 14,706,875
5,300 7/19/96 5.46 5,285,531
69,000 7/01/96 5.52 69,000,000
25,000 4.86%, 2/07/97 4.95 24,984,603
25,000 5.03%, 2/21/97 5.04 24,998,395
25,000 5.09%, 2/13/97 5.10 24,998,449
47,500 5.21%, 8/05/96 FRN 5.42 47,493,605
30,000 5.27%, 11/13/96 FRN 5.34 29,992,488
27,000 5.29%, 2/06/97 5.31 26,997,566
45,000 5.30%, 10/16/96 FRN 5.43 44,983,986
25,000 5.30%, 3/05/97 5.30 25,000,000
50,000 5.32%, 3/27/97 FRN 5.42 49,965,446
24,000 5.38%, 3/14/97 5.63 23,939,402
--------------
491,673,166

STUDENT LOAN MARKETING
ASSOCIATION-11.5%
20,000 5.41%, 11/24/97 FRN 5.43 19,993,442
94,400 5.45%, 12/20/96 FRN 5.45 94,400,000
49,300 5.46%, 4/18/97 FRN 5.50 49,285,281
100,000 5.49%, 8/04/97 FRN 5.49 100,000,000
32,000 5.54%, 2/17/98 FRN 5.62 31,959,824
30,880 5.59%, 11/20/97 FRN 5.56 30,891,385
8,300 5.59%, 1/21/98 FRN 5.62 8,296,283
20,000 5.69%, 8/22/96 FRN 5.59 20,000,933
15,000 6.13%, 6/30/97 FRN 5.90 15,008,596
369,835,744

STATEMENT OF NET ASSETS (CONTINUED) ALLIANCE GOVERNMENT RESERVES
_______________________________________________________________________________

PRINCIPAL
AMOUNT
(000) SECURITY+ YIELD VALUE
- ------------------------------------------------------------------------
U.S. TREASURY NOTES-6.0%
$ 25,000 6.13%, 5/31/97 5.69% $ 25,092,251
10,000 6.50%, 9/30/96 5.09 10,033,728
22,000 6.50%, 5/15/97 5.68 22,153,372
50,000 6.63%, 3/31/97 5.14 50,502,831
20,000 6.75%, 5/31/97 5.77 20,167,649
25,000 6.88%, 3/31/97 5.48 25,251,248
40,000 7.50%, 1/31/97 5.09-5.12 40,531,826
--------------
193,732,905

U.S. TREASURY BILL-0.8%
25,000 3/06/97 4.98 24,142,390

AGENCY FOR INTERNATIONAL
DEVELOPMENT HOUSING-0.2%
4,998 5.90%, 1/01/97 FRN 5.90 4,998,202

OVERSEAS PRIVATE INVESTMENT CORP.-0.0%
1,250 5.94%, 6/10/97 FRN 5.94 1,250,000

Total U.S. Government and Agencies
(amortized cost $3,149,294,610) 3,149,294,610

REPURCHASE AGREEMENT-0.8%
Morgan Stanley Group, Inc.
25,000 5.15%, dated 6/28/96, due 7/01/96
in the amount of $25,010,729 (cost
$25,000,000; collateralized by
$24,215,000, U.S. Treasury 7.5%,
11/15/01, value $26,150,255)
(amortized cost $25,000,000) 5.15% 25,000,000

TOTAL INVESTMENTS-99.0%
(amortized cost $3,174,294,610) 3,174,294,610
Other assets less liabilities-1.0% 30,724,515

NET ASSETS-100%
(offering and redemption price
of $1.00 per share; 3,205,936,475
shares outstanding) $3,205,019,125

+ All securities either mature or their interest rate changes in one year or
less.

Glossary:
FRN - Floating Rate Note

See notes to financial statements.

STATEMENT OF OPERATIONS
YEAR ENDED JUNE 30, 1996 ALLIANCE GOVERNMENT RESERVES
_______________________________________________________________________________

INVESTMENT INCOME
Interest $164,742,651

EXPENSES
Advisory fee (Note B) $14,176,991
Distribution assistance and administrative
service (Note C) 9,126,005
Transfer agency (Note B) 4,877,711
Registration fees 746,678
Custodian fees 385,833
Printing 293,941
Audit and legal fees 54,042
Trustees' fees 15,140
Miscellaneous 58,529
Total expenses 29,734,870
Less: fee waiver (328,362)
29,406,508
Net investment income 135,336,143

REALIZED GAIN ON INVESTMENTS
Net realized gain on investments 20,063

NET INCREASE IN NET ASSETS FROM OPERATIONS $135,356,206

STATEMENTS OF CHANGES IN NET ASSETS
_______________________________________________________________________________

YEAR ENDED YEAR ENDED
JUNE 30,1996 JUNE 30,1995
--------------- ---------------
INCREASE (DECREASE) IN NET ASSETS FROM
OPERATIONS
Net investment income $ 135,336,143 $96,532,096
Net realized gain (loss) on investments 20,063 (551,975)
Net increase in net assets from operations 135,356,206 95,980,121

DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income (135,336,143) (96,532,096)

TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST
Net increase (Note E) 690,690,859 453,818,535
Total increase 690,710,922 453,266,560

NET ASSETS
Beginning of year 2,514,308,203 2,061,041,643
End of year $3,205,019,125 $2,514,308,203

See notes to financial statements.

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1996 ALLIANCE GOVERNMENT RESERVES
_______________________________________________________________________________

NOTE A: SIGNIFICANT ACCOUNTING POLICIES
Alliance Government Reserves (the "Trust") is an open-end diversified
investment company registered under the Investment Company Act of 1940. The
Trust consists of two portfolios: Alliance Government Reserves (the
"Portfolio") and Alliance Treasury Reserves. Each portfolio is considered to be
a separate entity for financial reporting and tax purposes. As a matter of
fundamental policy, each Portfolio pursues its objectives by maintaining a
portfolio of high-quality money market securities all of which, at the time of
investment, have remaining maturities of 397 days or less. The following is a
summary of significant accounting policies followed by the Portfolio.

1. VALUATION OF SECURITIES
Securities in which the Portfolio invests are traded primarily in the
over-the-counter market and are valued at amortized cost, under which method a
portfolio instrument is valued at cost and any premium or discount is amortized
on a constant basis to maturity.

2. TAXES
It is the Portfolio's policy to comply with the requirements of the Internal
Revenue Code applicable to regulated investment companies and to distribute all
of its investment company taxable income and net realized gains, if applicable,
to its shareholders. Therefore, no provisions for federal income or excise
taxes are required.

3. DIVIDENDS
The Portfolio declares dividends daily and automatically reinvests such
dividends in additional shares at net asset value. Net realized capital gains
on investments, if any, are expected to be distributed near year end.

4. GENERAL
Interest income is accrued as earned. Security transactions are recorded on a
trade date basis. Security gains and losses are determined on the identified
cost basis. It is the Portfolio's policy to take possession of securities as
collateral under repurchase agreements and to determine on a daily basis that
the value of such securities are sufficient to cover the value of the
repurchase agreements.

NOTE B: ADVISORY FEE AND TRANSACTIONS WITH AN AFFILIATE OF THE ADVISER
The Portfolio pays its Adviser, Alliance Capital Management L.P., an advisory
fee at the annual rate of .50 of 1% on the first $1.25 billion of average daily
net assets; .49 of 1% on the next $.25 billion; .48 of 1% on the next $.25
billion; .47 of 1% on the next $.25 billion; .46 of 1% on the next $1 billion;
and .45% in excess of $3 billion. The Adviser has agreed to reimburse the
Portfolio to the extent that its aggregate expenses (excluding taxes,
brokerage, interest and, where permitted, extraordinary expenses) exceed 1% of
its average daily net assets for any fiscal year. No reimbursement was required
for the year ended June 30, 1996. The Portfolio compensates Alliance Fund
Services, Inc. (a wholly-owned subsidiary of the Adviser) for providing
personnel and facilities to perform transfer agency services for the Portfolio.
Such compensation amounted to $3,186,714 for the year ended June 30, 1996.

NOTE C: DISTRIBUTION ASSISTANCE AND ADMINISTRATIVE SERVICES PLAN
Under this plan, the Portfolio pays the Adviser a distribution fee at the
annual rate of up to .25 of 1% of the average daily value of the Portfolio's
net assets. The Plan provides that the Adviser will use such payments in their
entirety for distribution assistance and promotional activities. For the year
ended June 30, 1996, the distribution fee amounted to $7,351,627 of which
$328,362 was waived. In addition, the Portfolio reimbursed certain
broker-dealers for administrative costs incurred in connection with providing
shareholder services, accounting and bookkeeping, and legal and compliance
support. For the year ended June 30, 1996, such payments by the Portfolio
amounted to $1,774,378 of which $163,000 was paid to the Adviser.

ALLIANCE GOVERNMENT RESERVES
_______________________________________________________________________________

NOTE D: INVESTMENT TRANSACTIONS
At June 30, 1996, the cost of portfolio securities for federal income tax
purposes was the same as the cost for financial reporting purposes. At June 30,
1996 the Portfolio had a capital loss carryforward of $917,350, of which
$128,701 expires in 2001, $236,674 expires in 2002 and $551,975 expires in 2003.

NOTE E: TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST
An unlimited number of shares ($.001 par value) are authorized. At June 30,
1996, capital paid-in aggregated $3,205,936,475. Transactions, all at $1.00 per
share, were as follows:

YEAR ENDED YEAR ENDED
JUNE 30, 1996 JUNE 30, 1995
---------------- ---------------
Shares sold 13,672,251,535 9,487,236,684
Shares issued on reinvestments of dividends 135,336,143 96,532,096
Shares redeemed (13,116,896,819) (9,129,950,245)
Net increase 690,690,859 453,818,535

NOTE F: FINANCIAL HIGHLIGHTS
Selected data for a share outstanding throughout each year.

<TABLE>
<CAPTION>
YEAR ENDED JUNE 30,
1996 1995 1994 1993 1992
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00

INCOME FROM INVESTMENT OPERATIONS
Net investment income .0461 .0439 .0244 .0256 .0421
Net realized gain on investments -0- -0- -0- .0001 -0-
Net increase in net assets from
operations .0461 .0439 .0244 .0257 .0421

LESS: DISTRIBUTIONS
Dividends from net investment income (.0461) (.0439) (.0244) (.0256) (.0421)
Distributions from net realized gains -0- -0- -0- (.0001) -0-
Total dividends and distributions (.0461) (.0439) (.0244) (.0257) (.0421)
Net asset value, end of year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00

TOTAL RETURNS
Total investment return based on:
net asset value (a) 4.72% 4.48% 2.48% 2.60% 4.30%

RATIOS/SUPPLEMENTAL DATA
Net assets, end of year(in millions) $3,205 $2,514 $2,061 $1,783 $1,572
Ratio to average net assets of:
Expenses, net of waivers and
reimbursements 1.00% 1.00% 1.00% 1.00% .95%
Expenses, before waivers and
reimbursements 1.01% 1.05% 1.04% 1.02% .97%
Net investment income (b) 4.60% 4.42% 2.46% 2.55% 4.17%
</TABLE>

(a) Total investment return is calculated assuming an initial investment made
at the net asset value at the beginning of the period, reinvestment of all
dividends and distributions at net asset value during the period, and
redemption on the last day of the period.

(b) Net of expenses reimbursed or waived by the Adviser.

INDEPENDENT AUDITOR'S REPORT ALLIANCE GOVERNMENT RESERVES
_______________________________________________________________________________

TO THE BOARD OF TRUSTEES AND SHAREHOLDERS ALLIANCE GOVERNMENT RESERVES PORTFOLIO

We have audited the accompanying statement of net assets of Alliance Government
Reserves Portfolio as of June 30, 1996 and the related statements of
operations, changes in net assets, and financial highlights for the periods
indicated in the accompanying financial statements. These financial statements
and financial highlights are the responsibility of the Portfolio's management.
Our responsibility is to express an opinion on these financial statements and
financial highlights 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 and financial
highlights 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 June
30, 1996, by correspondence with the custodian.

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 and financial highlights referred to
above present fairly, in all material respects, the financial position of
Alliance Government Reserves Portfolio as of June 30, 1996, and the results of
its operations, changes in its net assets, and its financial highlights for the
periods indicated, in conformity with generally accepted accounting principles.

McGladrey & Pullen, LLP
New York, New York
July 26, 1996

<PAGE>

(LOGO) (R) ALLIANCE TREASURY RESERVES
______________________________________________________________

P.O. Box 1520, Secaucus, New Jersey 07096-1520
Toll Free (800) 221-5672
______________________________________________________________

STATEMENT OF ADDITIONAL INFORMATION
November 1, 1996

______________________________________________________________

TABLE OF CONTENTS

Page

Investment Objectives and Policies . . . . . . . . 2

Investment Restrictions . . . . . . . . . . . . . 5

Management . . . . . . . . . . . . . . . . . . . . 6

Purchase and Redemption of Shares . . . . . . . . 16

Additional Information . . . . . . . . . . . . . . 19

Daily Dividends-Determination of Net Asset Value . 22

Taxes . . . . . . . . . . . . . . . . . . . . . . 23

General Information . . . . . . . . . . . . . . . 24

Appendix-Commercial Paper and Bond Ratings . . . . 28

Financial Statements . . . . . . . . . . . . . . . 29-33

Independent Auditor's Report . . . . . . . . . . . 34

(R): This registered service mark used under license from the
owner, Alliance Capital Management L.P.

<PAGE>

______________________________________________________________

INVESTMENT OBJECTIVES AND POLICIES
______________________________________________________________

The Fund is a diversified, open-end investment company
whose objectives are - in the following order of priority -
safety of principal, excellent liquidity, and maximum current
income to the extent consistent with the first two objectives.
The Fund pursues its objectives by maintaining a portfolio of the
following investments diversified by maturities not exceeding 397
days:

1. Issues of the United States Treasury, such as
bills, certificates of indebtedness, notes and bonds. Such issues
are supported by the full faith and credit of the U.S. Treasury.

2. Repurchase agreements pertaining to the above
securities. A repurchase agreement arises when a buyer purchases
a security and simultaneously agrees to resell it to the vendor
at an agreed-upon market rate which is effective for the period
of time the buyer's money is invested in the security and which
is not related to the coupon rate on the purchased security.
Repurchase agreements may be entered into with member banks of
the Federal Reserve System or "primary dealers" (as designated by
the Federal Reserve Bank of New York) in U.S. Government
securities or with State Street Bank and Trust Company. It is
the Fund's current practice, which may be changed at any time
without shareholder approval, to enter into repurchase agreements
only with such primary dealers or State Street Bank and Trust
Company, the Fund's Custodian. For each repurchase agreement,
the Fund requires continual maintenance of the market value of
the underlying collateral in amounts equal to, or in excess of,
the agreement amount. While the maturities of the underlying
collateral may exceed 397 days, the term of the repurchase
agreement is always less than 397 days. In the event that a
vendor defaulted on its repurchase obligation, the Fund might
suffer a loss to the extent that the proceeds from the sale of
the collateral were less than the repurchase price. If the
vendor became bankrupt, the Fund might be delayed in selling the
collateral. Repurchase agreements often are for short periods
such as one day or a week, but may be longer. Repurchase
agreements not terminable within seven days will be limited to no
more than 10% of the Fund's assets.7 Pursuant to Rule 2a-7, a
repurchase agreement is deemed to be an acquisition of the
underlying securities provided that the obligation of the seller
____________________

7. As used throughout the Prospectus and Statement of Additional
Information, the term "assets" shall refer to the Fund's
total assets.

<PAGE>

to repurchase the securities from the money market fund is
collateralized fully (as defined in such Rule). Accordingly, the
vendor of a fully collateralized repurchase agreement is deemed
to be the issuer of the underlying securities.

When-Issued Securities. Certain new issues that the
Fund is permitted to purchase are available on a "when-issued"
basis -that is, delivery and payment for the securities take
place after the transaction date, normally within ten days (the
Fund will not make any such commitments of more than thirty
days). The payment amount and the interest rate that will be
received on the securities are fixed on the transaction date.
The Fund will make commitments for such when-issued transactions
only with the intention of actually acquiring the securities and,
to facilitate such acquisitions, the Fund's Custodian will
maintain, in a separate account, cash, U.S. Government or other
appropriate high-grade debt obligations of the Fund having value
equal to or greater than such commitments. Similarly, a separate
account will be maintained to meet obligations in respect of
reverse repurchase agreements. On delivery dates for such
transactions, the Fund will meet its obligations from maturities
or sales of the securities held in the separate account and/or
from then available cash flow. If the Fund chooses to dispose of
the right to acquire a when-issued security prior to its
acquisition, it could, as with the disposition of any other
portfolio obligation, incur a gain or loss due to market
fluctuation. No when-issued commitments will be made if, as a
result, more than 15% of the Fund's net assets would be so
committed.

While there are many kinds of short-term securities used
by money market investors, the Fund, in keeping with its primary
investment objective of safety of principal, restricts its
portfolio to the types of investments listed above. Net income
to shareholders is aided both by the Fund's ability to make
investments in large denominations and by its efficiencies of
scale. Also, the Fund may seek to improve its income by selling
certain portfolio securities prior to maturity in order to take
advantage of yield disparities that occur in money markets. The
market value of the Fund's investments tends to decrease during
periods of rising interest rates and to increase during intervals
of falling rates. Except as otherwise provided, the Fund's
investment policies are not designated "fundamental policies"
within the meaning of the Investment Company Act of 1940, as

<PAGE>

amended, (the "Act") and may, therefore, be changed by the
Trustees of the Trust without a shareholder vote. However, the
Fund will not change its investment policies without
contemporaneous written notice to shareholders. There can be no
assurance, as is true with all investment companies, that the
Fund's objectives will be achieved.

Rule 2a-7 under the Act. The Fund will comply with Rule
2a-7 under the Act, as amended from time to time, including the
diversification, quality and maturity limitations imposed by the
Rule.

Currently, pursuant to Rule 2a-7, the Fund may invest
only in U.S. dollar-denominated "eligible securities" (as that
term is defined in the Rule) that have been determined by the
Adviser to present minimal credit risks pursuant to procedures
approved by the Trustees. Generally, an eligible security is a
security that (i) has a remaining maturity of 397 days or less
and (ii) is rated, or is issued by an issuer with short-term debt
outstanding that is rated in one of the two highest rating
categories by two nationally recognized statistical rating
organizations ("NRSROs") or, if only one NRSRO has issued a
rating, by that NRSRO. A security that originally had a maturity
of greater than 397 days is an eligible security if its remaining
maturity at the time of purchase is 397 calendar days or less and
the issuer has outstanding short-term debt that would be an
eligible security. Unrated securities may also be eligible
securities if the Adviser determines that they are of comparable
quality to a rated eligible security pursuant to guidelines
approved by the Trustees. A description of the ratings of some
NRSROs appears in the Appendix attached hereto.

Under Rule 2a-7 the Fund may not invest more than five
percent of its assets in the securities of any one issuer other
than the United States Government, its agencies and
instrumentalities. In addition, the Fund may not invest in a
security that has received, or is deemed comparable in quality to
a security that has received, the second highest rating by the
requisite number of NRSROs (a "second tier security") if
immediately after the acquisition thereof the Fund would have
invested more than (A) the greater of one percent of its total
assets or one million dollars in securities issued by that issuer
which are second tier securities, or (B) five percent of its
total assets in second tier securities.

<PAGE>

______________________________________________________________

INVESTMENT RESTRICTIONS
______________________________________________________________

The Fund:

1. May not purchase any security which has a remaining
maturity of more than 397 days from the date of the Fund's
purchase;

2. May not purchase securities other than marketable
obligations of the United States Treasury, or repurchase
agreements pertaining thereto;

3. May not enter into repurchase agreements if, as a
result thereof, more than 10% of the Fund's net assets would be
subject to repurchase agreements not terminable within seven days
(which may be considered to be illiquid) or with any one seller8
if, as a result thereof, more than 5% of the Fund's assets would
be invested in repurchase agreements purchased from such seller;
and may not enter into any reverse repurchase agreements if, as a
result thereof, the Fund's obligations with respect to reverse
repurchase agreements would exceed 10% of the Fund's assets;

4. May not borrow money except from banks on a
temporary basis or via entering into reverse repurchase
agreements in aggregate amounts not to exceed 10% of the Fund's
assets and to be used exclusively to facilitate the orderly
maturation and sale of portfolio securities during any periods of
abnormally heavy redemption requests, if they should occur; such
borrowings may not be used to purchase investments and the Fund
will not purchase any investment while any such borrowings exist;

5. May not pledge, hypothecate or in any manner
transfer, as security for indebtedness, any securities owned or
____________________

8. Pursuant to Rule 2a-7, the seller of a fully collateralized
repurchase agreement is deemed to be the issuer of the
underlying securities.

<PAGE>

held by the Fund except as may be necessary in connection with
any borrowing mentioned above, including reverse repurchase
agreements, and in an aggregate amount not to exceed 10% of the
Fund's assets;

6. May not make loans, provided that the Fund may
purchase securities of the type referred to in paragraph 2 above
and enter into repurchase agreements with respect thereto; or

7. May not (a) make investments for the purpose of
exercising control; (b) purchase securities of other investment
companies, except in connection with a merger, consolidation,
acquisition or reorganization; (c) invest in real estate (other
than money market securities secured by real estate or interests
therein or money market securities issued by companies which
invest in real estate, or interests therein), commodities or
commodity contracts, interests in oil, gas and other mineral
exploration or other development programs; (d) purchase any
restricted securities or securities on margin; (e) make short
sales of securities or maintain a short position or write,
purchase or sell puts, calls, straddles, spreads or combinations
thereof; (f) invest in securities of issuers (other than agencies
and instrumentalities of the United States Government) having a
record, together with predecessors, of less than three years of
continuous operation if more than 5% of the Fund's assets would
be invested in such securities; (g) purchase or retain securities
of any issuers if those officers and trustees of the Fund and
employees of the Adviser who own individually more than 1/2 of 1%
of the outstanding securities of such issuer together own more
than 5% of the securities of such issuer; or (h) act as an
underwriter of securities.

______________________________________________________________

MANAGEMENT
______________________________________________________________

Trustees and Officers

The Trustees and principal officers of the Trust and
their primary occupations during the past five years are set
forth below. Unless otherwise specified, the address of each
such person is 1345 Avenue of the Americas, New York, New York
10105. Those Trustees whose names are preceded by an asterisk
are "interested persons" of the Trust as determined under the
Act. Each Trustee and officer is affiliated as such with one or
more of the other registered investment companies that are
advised by Alliance Capital Management L.P. (the "Adviser").

<PAGE>

Trustees

DAVE H. WILLIAMS, 64,9 Chairman, is Chairman of the
Board of Directors of Alliance Capital Management Corporation
("ACMC"),10 sole general partner of the Adviser with which he
has been associated since prior to 1991.

JOHN D. CARIFA, 51,11 is the President, Chief Operating
Officer, and a Director of ACMC with which he has been associated
since prior to 1991.

WILLIAM H. FOULK, JR., 64, is an independent consultant.
He was formerly Senior Manager of Barrett Associates, Inc., a
registered investment adviser, with which he had been associated
since prior to 1991. His address is 2 Hekma Road, Greenwich, CT
06831.

ELIZABETH J. McCORMACK, 74, is an Associate of
Rockefeller Family and Associates (philanthropic organization)
and has been since prior to 1991. She is a Director of Philip
Morris, Inc., Champion International Corporation and The American
Savings Bank. She is a Trustee of Hamilton College, and a Member
of the Board of Overseers Managers of Swarthmore College and the
Memorial Sloan-Kettering Cancer Center. Her address is 30
Rockefeller Plaza, New York, New York 10112.

____________________

9. An "interested person" of the Fund as defined in the Act.

10. For purposes of this Statement of Additional Information,
ACMC refers to Alliance Capital Management Corporation, the
sole general partner of the Adviser, and to the predecessor
general partner of the Adviser of the same name.

11. An "interested person" of the Fund as defined in the Act.

<PAGE>

DAVID K. STORRS, 52, is an independent consultant. He
was formerly President of The Common Fund (investment management
for educational institutions) with which he had been associated
since prior to 1991. His address is 65 South Gate Lane,
Southport, Connecticut 06490.

SHELBY WHITE, 58, is an author and financial journalist.
Her address is One Sutton Place South, New York, New York 10022.

Officers

JOHN R. BONCZEK - Senior Vice President, 36, is a Vice
President of ACMC with which he has been associated since prior
to 1991.

KATHLEEN A. CORBET - Senior Vice President, 36, has been
a Senior Vice President of ACMC since July 1993. Previously, she
held various responsibilities as head of Equitable Capital
Management Corporation's Fixed Income Management Department,
Private Placement Secondary Trading and Fund Management since
prior to 1991.

ROBERT I. KURZWEIL - Senior Vice President, 45, has been
a Vice President of ACMC since May 1994. Previously, he was Vice
President of Sales and Business Development for Automatic Data
Processing with which he had been associated since prior to 1991.

WAYNE D. LYSKI - Senior Vice President, 55, is an
Executive Vice President of ACMC with which he has been
associated since prior to 1991.

PATRICIA NETTER - Senior Vice President, 45, is a Vice
President of ACMC with which she has been associated since prior
to 1991.

RONALD R. VALEGGIA - Senior Vice President, 49, is a
Senior Vice President of ACMC with which he has been associated
since prior to 1991.

DREW BIEGEL - Vice President, 45, is a Vice President of
ACMC which he has been associated with since prior to 1991.

JOHN F. CHIODI, Jr. - Vice President, 30, is a Vice
President of ACMC with which he has been associated since prior
to 1991.

<PAGE>

DORIS T. CILIBERTI - Vice President, 32, is an Assistant
Vice President of ACMC with which she has been associated since
prior to 1991.

WILLIAM J. FAGAN - Vice President, 34, is an Assistant
Vice President of ACMC with which he has been associated since
prior to 1991.

JOSEPH R. LASPINA - Vice President, 36, is an Assistant
Vice President of ACMC with which he has been associated since
prior to 1991.

RAYMOND J. PAPERA - Vice President, 40, is a Vice
President of ACMC with which he has been associated since prior
to 1991.

PAMELA F. RICHARDSON - Vice President, 43, is a Vice
President of ACMC with which she has been associated since prior
to 1991.

EDMUND P. BERGAN, Jr. - Secretary, 46, is a Senior Vice
President and General Counsel of Alliance Fund Distributors, Inc.
("AFD") with which he has been associated since prior to 1991.

MARK D. GERSTEN - Treasurer and Chief Financial Officer,
46, is a Senior Vice President of Alliance Fund Services, Inc.
("AFS") and AFD with which he has been associated since prior to
1991.

JOSEPH J. MANTINEO - Controller, 37, is a Vice President
of AFS with which he has been associated since prior to 1991.

As of October 16, 1996, the Trustees and officers as a
group owned less than 1% of the shares of the Fund.

The Fund does not pay any fees to, or reimburse expenses
of, its Trustees who are considered "interested persons" of the
Fund. The aggregate compensation paid by the Fund to each of the
Trustees during its fiscal year ended June 30, 1996, the
aggregate compensation paid to each of the Trustees during
calendar year 1995 by all of the registered investment companies
to which the Adviser provides investment advisory services
(collectively, the "Alliance Fund Complex") and the total number
of funds in the Alliance Fund Complex with respect to which each
of the Trustees serves as a director or trustee, are set forth
below. Neither the Fund nor any other fund in the Alliance Fund

<PAGE>

Complex provides compensation in the form of pension or
retirement benefits to any of its directors or trustees.

Dave H. Williams $-0- $-0- 6
John D. Carifa $-0- $-0- 50
Sam Y. Cross $1,641 $ 14,250 3
Charles H.P. Duell $1,641 $ 14,250 3
William H. Foulk, Jr. $3,000 $143,500 31
Elizabeth J. McCormack $1,266 $ 12,000 3
David K. Storrs $1,641 $ 12,000 3
Shelby White $1,641 $ 13,500 3

The Adviser

Alliance Capital Management L.P., a New York Stock
Exchange listed company with principal offices at 1345 Avenue of
the Americas, New York, New York 10105, has been retained under
an investment advisory agreement (the "Advisory Agreement") to
provide investment advice and, in general, to conduct the
management and investment program of the Fund under the
supervision and control of the Fund's Board of Directors.

The Adviser is a leading international investment
manager supervising client accounts with assets as of June 30,
1996 of more than $168 billion (of which more than $55 billion
represented the assets of investment companies). The Adviser's
clients are primarily major corporate employee benefit funds,
public employee retirement systems, investment companies,
foundations and endowment funds and included as of June 30, 1996,
33 of the FORTUNE 100 companies. As of that date, the Adviser
and its subsidiaries employed approximately 1,450 employees who
operated out of domestic offices and the offices of subsidiaries
in Bombay, Istanbul, London, Paris, Sao Paulo, Sydney, Tokyo,
Toronto, Bahrain, Luxembourg and Singapore. The 51 registered
investment companies comprising more than 100 separate investment
portfolios managed by the Adviser currently have more than two
million shareholders.

<PAGE>

("Equitable"), one of the largest life insurance companies in the
United States and a wholly-owned subsidiary of The Equitable
Companies Incorporated ("ECI"), a holding company controlled by
AXA, a French insurance holding company. As of June 30, 1996,
ACMC, Inc. and Equitable Capital Management Corporation, each a
wholly-owned direct or indirect subsidiary of Equitable, together
with Equitable, owned in the aggregate approximately 57% of the
issued and outstanding units representing assignments of
beneficial ownership of limited partnership interests in the
Adviser ("Units"). As of June 30, 1996, approximately 33% and
10% of the Units were owned by the public and employees of the
Adviser and its subsidiaries, respectively, including employees
of the Adviser who serve as Trustees of the Fund.

Under the Advisory Agreement, the Adviser provides
investment advisory services and order placement facilities for
the Fund and pays all compensation of Trustees of the Trust who

<PAGE>

are affiliated persons of the Adviser. The Adviser or its
affiliates also furnish the Fund without charge with management
supervision and assistance and office facilities. Under the
Advisory Agreement, the Fund pays an advisory fee at an annual
rate of .50 of 1% of up to $1.25 billion of the average daily
value of the Fund's net assets, .49 of 1% of the next $.25
billion of such assets, .48 of 1% of the next $.25 billion of
such assets, .47 of 1% of the next $.25 billion of such assets,
.46 of 1% of the next $1 billion of such assets and .45 of 1% of
the average daily net assets of the Fund in excess of $3 billion.
The fee is accrued daily and paid monthly. The Adviser has
agreed to reimburse the Fund to the extent that its net expenses
(excluding taxes, brokerage, interest and extraordinary expenses)
exceed 1% of its average daily net assets for any fiscal year.
The Adviser also voluntarily agreed to reimburse the Portfolio
from September 1, 1993 (commencement of operations) through
February 14, 1994 for all expenses, from February 15, 1994
through April 14, 1994 for expenses exceeding .20 of 1% of its
average daily net assets, from April 18, 1994 to July 14, 1994
for expenses exceeding .40 of 1% of its average daily net assets,
from July 15, 1994 to March 8, 1995 for expenses exceeding .60 of
1% of its average daily net assets, from March 9, 1995 to
March 26, 1995 for expenses exceeding .70 of 1% of its average
daily net assets, from March 27, 1995 to April 25, 1996 for
expenses exceeding .80 of 1% of its average daily net assets and
from April 26, 1996 to June 30, 1996 for expenses exceeding .85
of 1% of its average daily net assets. Accordingly, for the
fiscal periods ended June 30, 1994, 1995 and 1996, the Adviser
received from the Fund advisory fees of $0, $1,044,322 and
$2,681,355, respectively. In accordance with the Distribution
Services Agreement described below, the Fund may pay a portion of
advertising and promotional expenses in connection with the ale
of shares of the Fund. The Fund also pays for printing of
prospectuses and other reports to shareholders and all expenses
and fees related to registration and filing with the Securities
and Exchange Commission and with state regulatory authorities.
The Fund pays all other expenses incurred in its operations,
including the Adviser's management fees; custody, transfer and
dividend disbursing expenses; legal and auditing costs; clerical,
administrative accounting, and other office costs; fees and
expenses of Trustees who are not affiliated with the Adviser;
costs of maintenance of the Trust's existence; and interest
charges, taxes, brokerage fees, and commissions. As to the
obtaining of clerical and accounting services not required to be
provided to the Fund by the Adviser under the Advisory Agreement,
the Fund may employ its own personnel. For such services, it
also may utilize personnel employed by the Adviser; if so done,
the services are provided to the Fund at cost and the payments
therefor must be specifically approved in advance by the
Trustees. The Fund paid to the Adviser a total of $127,000 and
$119,000 for such services for the fiscal years ended June 30,

<PAGE>

1995 and 1996, respectively. For the period September 1, 1993
(commencement of operations) through June 30, 1994, no payments
were made by the Portfolio for such services.

The Fund has made arrangements with certain broker-
dealers whose customers are Fund shareholders pursuant to which
the broker-dealers perform shareholder servicing functions, such
as opening new shareholder accounts, processing purchase and
redemption transactions, and responding to inquiries regarding
the Fund's current yield and the status of shareholder accounts.
The Fund pays for the electronic communications equipment
maintained at the broker-dealers' offices that permits access to
the Fund's computer files and, in addition, reimburses the
broker-dealers at cost for personnel expenses involved in
providing the services. All such reimbursements must be approved
in advance by the Trustees. For the years ended June 30, 1995
and 1996, the Fund reimbursed such broker-dealers a total of
$52,438 and $111,603, respectively. For the period September 1,
1993 (commencement of operations) through June 30, 1994, the Fund
made no such reimbursements.

The Advisory Agreement became effective on July 22,
1992. Continuance of the Advisory Agreement until June 30, 1997
was approved by the vote, cast in person by all the Trustees of
the Trust who neither were interested persons of the Trust nor
had any direct or indirect financial interest in the Agreement or
any related agreement, at a meeting called for that purpose on
June 3, 1996.

The Advisory Agreement will remain in effect thereafter
from year to year provided that such continuance is specifically
approved annually by a vote of a majority of the outstanding
shares of the Fund or by the Fund's Trustees, including in either
case approval by a majority of the Trustees who are not parties
to the Advisory Agreement or interested persons as defined in the
Act. The Advisory Agreement may be terminated without penalty on
60 days' written notice at the option of either party or by a
vote of the outstanding voting securities of the Fund; it will
automatically terminate in the event of assignment. The Adviser
is not liable for any action or inaction in regard to its
obligations under the Advisory Agreement as long as it does not
exhibit willful misfeasance, bad faith, gross negligence, or
reckless disregard of its obligations.

Distribution Services Agreement

<PAGE>

Alliance Fund Distributors, Inc. (the "Distributor") and the
Adviser under which the Fund makes payments each month to the
Adviser in an amount that will not exceed, on an annualized
basis, of .25 of 1% of the Fund's aggregate average daily net
assets. In addition, under the Agreement the Adviser makes
payments for distribution assistance and for administrative,
accounting and other services from its own resources which may
include the management fee paid by the Fund.

Payments under the Agreement are used in their entirety
for (i) payments to broker-dealers and other financial
intermediaries, including the Distributor, for distribution
assistance and to banks and other depository institutions for
administrative and accounting services, and (ii) otherwise
promoting the sale of shares of the Fund such as by paying for
the preparation, printing and distribution of prospectuses and
other promotional materials sent to existing and prospective
shareholders and by directly or indirectly purchasing radio,
television, newspaper and other advertising. In approving the
Agreement the Trustees determined that there was a reasonable
likelihood that the Agreement would benefit the Fund and its
shareholders. For the year ended June 30, 1996, the Fund made
payments to the Adviser for expenditures under the Agreement in
amounts aggregating $55,396 which constituted .01% at an annual
rate of the Fund's average daily net assets during the period,
and the Adviser made payments from its own resources as described
above aggregating $2,582,143. Of the $2,637,539 paid by the
Adviser and the Fund under the Agreement, $50,000 was paid for
advertising, printing, and mailing of prospectuses to persons
other than current shareholders; and $2,587,539 was paid to
broker-dealers and other financial intermediaries for
distribution assistance.

The administrative, accounting and other services
provided by broker-dealers, depository institutions and other
financial intermediaries may include, but are not limited to,
establishing and maintaining shareholder accounts, sub-
accounting, processing of purchase and redemption orders, sending
confirmations of transactions, forwarding financial reports and
other communications to shareholders and responding to
shareholder inquiries regarding the Fund. The State of Texas
requires that shares of the Fund may be sold in that state only
by dealers or other financial institutions that are registered
there as broker-dealers. As interpreted by courts and
administrative agencies, certain laws and regulations limit the
ability of a bank or other depository institution to become an
underwriter or distributor of securities. However, in the
opinion of the Fund's management based on the advice of counsel,
these laws and regulations do not prohibit such depository
institutions from providing other services for investment
companies such as the administrative, accounting and other

<PAGE>

services described above. The Trustees will consider appropriate
modifications to the Fund's operations, including discontinuance
of payments under the Agreement to banks and other depository
institutions, in the event of any future change in such laws or
regulations which may affect the ability of such institutions to
provide the above-mentioned services.

The Treasurer of the Trust reports the amounts expended
under the Agreement and the purposes for which such expenditures
were made to the Trustees on a quarterly basis. Also, the
Agreement provides that the selection and nomination of
disinterested Trustees (as defined in the Act) are committed to
the discretion of the disinterested Trustees then in office. The
Agreement was initially approved for the Fund by the Trustees at
a meeting held on June 14, 1993. Continuance of the Agreement
until June 30, 1997 was approved by the vote, cast in person by
all the Trustees of the Fund who neither were interested persons
of the Fund nor had any direct or indirect financial interest in
the Agreement or any related agreement, at a meeting called for
that purpose on June 3, 1996. The Agreement may be continued
annually thereafter if approved by a majority vote of the
Trustees who neither are interested persons of the Trust nor have
any direct or indirect financial interest in the Agreement or in
any related agreement, cast in person at a meeting called for
that purpose.

All material amendments to the Agreement must be
approved by a vote of the Trustees, including a majority of the
disinterested Trustees, cast in person at a meeting called for
that purpose, and the Agreement may not be amended in order to
increase materially the costs which the Fund may bear pursuant to
the Agreement without the approval of a majority of the
outstanding shares of the Fund. The Agreement may also be
terminated at any time by a majority vote of the disinterested
Trustees, or by a majority of the outstanding shares of the Fund
or by the Adviser. Any agreement with a qualifying broker-dealer
or other financial intermediary may be terminated without penalty
on not more than sixty days' written notice by a vote of the
majority of non-party Trustees, by a vote of a majority of the
outstanding shares of the Fund, or by the Adviser and will
terminate automatically in the event of its assignment.

The Agreement is in compliance with rules of the
National Association of Securities Dealers, Inc. (the "NASD")
which became effective July 7, 1993 and which limit the annual
asset-based sales charges and service fees that a mutual fund may
impose to .75% and .25%, respectively, of average annual net
assets.

<PAGE>

______________________________________________________________

PURCHASE AND REDEMPTION OF SHARES
______________________________________________________________

Accounts Not Maintained Through Financial Intermediaries

Opening Accounts -- New Investments

A. When Funds are Sent by Wire (the wire method permits
immediate credit)

1) Telephone the Fund toll-free at (800) 824-1916.
The Fund will ask for the name of the account as
you wish it to be registered, address of the
account, and taxpayer identification number (social
security number for an individual). The Fund will
then provide you with an account number.

2) Instruct your bank to wire Federal funds (minimum
$1,000) exactly as follows:

ABA 0110 0002-8
State Street Bank and Trust Company
DDA 9903-279-9
Attention: Mutual Funds Division
Alliance Treasury Reserves

Your account name as registered with the Fund
Your account number as registered with the Fund

3) Mail a completed Application Form to:

Alliance Fund Services, Inc.
P.O. Box 1520
Secaucus, New Jersey 07096-1520

B. When Funds are Sent by Check

1) Fill out an Application Form.

2) Mail the completed Application Form along with your
check or negotiable bank draft (minimum $1,000),
payable to "Alliance Treasury Reserves," to
Alliance Fund Services, Inc. as in A(3) above.

<PAGE>

Subsequent Investments

A. Investments by Wire (to obtain immediate credit)

Instruct your bank to wire Federal funds (minimum $100)
to State Street Bank and Trust Company ("State Street Bank") as
in A(2) above.

B. Investments by Check

Mail your check or negotiable bank draft (minimum $100),
payable to "Alliance Treasury Reserves," to Alliance Fund
Services, Inc. as in A(3) above.

Include with the check or draft the "next investment"
stub from one of your previous monthly or interim account
statements. For added identification, place your Fund account
number on the check or draft.

Investments Made by Check

Money transmitted by a check drawn on a member of the
Federal Reserve System is converted to Federal funds in one
business day following receipt and, thus, is then invested in the
Fund. Checks drawn on banks which are not members of the Federal
Reserve System may take longer to be converted and invested. All
payments must be in United States dollars.

PROCEEDS FROM ANY SUBSEQUENT REDEMPTION BY YOU OF FUND
SHARES THAT WERE PURCHASED BY CHECK OR ELECTRONIC FUNDS TRANSFER
WILL NOT BE FORWARDED TO YOU UNTIL THE FUND IS REASONABLY ASSURED
THAT YOUR CHECK OR ELECTRONIC FUNDS TRANSFER HAS CLEARED, UP TO
FIFTEEN DAYS FOLLOWING THE PURCHASE DATE. If the redemption
request during such period is in the form of a Fund check, the
check will be marked "insufficient funds" and be returned unpaid
to the presenting bank.

Redemptions

A. By Telephone

You may withdraw any amount from your account on any
Fund business day (i.e., any weekday exclusive of days on
which the New York Stock Exchange or State Street Bank is
closed) between 9:00 a.m. and 5:00 p.m. via orders given to
Alliance Fund Services, Inc. by telephone toll-free
(800) 824-1916. Such redemption orders must include your
account name as registered with the Fund and the account
number.

<PAGE>

If your telephone redemption order is received by
Alliance Fund Services, Inc. prior to 12:00 Noon, we will send
the proceeds in Federal funds by wire to your designated bank
account that day. The minimum amount for a wire is $1,000. If
your telephone redemption order is received by Alliance Fund
Services, Inc. after 12:00 Noon and before 4:00 p.m., we will
wire the proceeds the next business day. You also may request
that proceeds be sent by check to your designated bank.
Redemptions are made without any charge to you.

During periods of drastic economic or market
developments, such as the market break of October 1987, it is
possible that shareholders would have difficulty in reaching
Alliance Fund Services, Inc. by telephone (although no such
difficulty was apparent at any time in connection with the 1987
market break). If a shareholder were to experience such
difficulty, the shareholder should issue written instructions to
Alliance Fund Services, Inc. at the address shown on the cover of
this statement of additional information. The Fund reserves the
right to suspend or terminate its telephone redemption service at
any time without notice. Neither the Fund nor the Adviser, or
Alliance Fund Services, Inc. will be responsible for the
authenticity of telephone requests for redemptions that the Fund
reasonably believes to be genuine. The Fund will employ
reasonable procedures in order to verify that telephone requests
for redemptions are genuine, including among others, recording
such telephone instructions and causing written confirmations of
the resulting transactions to be sent to shareholders. If the
Fund did not employ such procedures, it could be liable for
losses arising from unauthorized or fraudulent telephone
instructions. Selected dealers or agents may charge a commission
for handling telephone requests for redemptions.

B. By Check-Writing

With this service, you may write checks made payable to
any payee in any amount of $100 or more. Checks cannot be
written for more than the principal balance (not including
any accrued dividends) in your account. First, you must fill
out the Signature Card which is with the Application Form.
If you wish to establish this check-writing service
subsequent to the opening of your Fund account, contact the
Fund by telephone or mail. There is no separate charge for
the check-writing service, except that State Street Bank will
impose its normal charges for checks which are returned
unpaid because of insufficient funds or for checks upon which
you have placed a stop order.

The check-writing service enables you to receive the daily
dividends declared on the shares to be redeemed until the day
that your check is presented to State Street Bank for payment.

<PAGE>

C. By Mail

You may withdraw any amount from your account at any
i5time by mail. Written orders for withdrawal, accompanied
by duly endorsed certificates, if issued, should be mailed to
Alliance Fund Services, Inc., P.O. Box 1520, Secaucus, New
Jersey 07096-1520. Such orders must include the account name
as registered with the Fund and the account number. All
written orders for redemption, and accompanying certificates,
if any, must be signed by all owners of the account with the
signatures guaranteed by an institution which is an "eligible
guarantor" as defined in Rule 17Ad-15 under the Securities
Exchange Act of 1934, as amended.

______________________________________________________________

ADDITIONAL INFORMATION
______________________________________________________________

Shareholders maintaining Fund accounts through brokerage
firms and other institutions should be aware that such
institutions necessarily set deadlines for receipt of transaction
orders from their clients that are earlier than the transaction
times of the Fund itself so that the institutions may properly
process such orders prior to their transmittal to State Street
Bank. Should an investor place a transaction order with such an
institution after its deadline, the institution may not effect
the order with the Fund until the next business day.
Accordingly, an investor should familiarize himself with the
deadlines set by his institution. (For example, the Distributor
accepts purchase orders from its customers up to 2:15 p.m. New
York time for issuance at the 4:00 p.m. transaction time and
price.) A brokerage firm acting on behalf of a customer in
connection with transactions in Fund shares is subject to the
same legal obligations imposed on it generally in connection with
transactions in securities for a customer, including the
obligation to act promptly and accurately.

Orders for the purchase of Fund shares become effective
at the next transaction time after Federal funds or bank wire
monies become available to State Street Bank for a shareholder's
investment. Federal funds are a bank's deposits in a Federal
Reserve Bank. These funds can be transferred by Federal Reserve
wire from the account of one member bank to that of another
member bank on the same day and are considered to be immediately
available funds; similar immediate availability is accorded
monies received at State Street Bank by bank wire. Money
transmitted by a check drawn on a member of the Federal Reserve
System is converted to Federal funds in one business day
following receipt. Checks drawn on banks which are not members

<PAGE>

of the Federal Reserve System may take longer. All payments
(including checks from individual investors) must be in United
States dollars.

All shares purchased are confirmed to each shareholder
and are credited to his account at the net asset value. To avoid
unnecessary expense to the Fund and to facilitate the immediate
redemption of shares, share certificates, for which no charge is
made, are not issued except upon the written request of a
shareholder. Certificates are not issued for fractional shares.
Shares for which certificates have been issued are not eligible
for any of the optional methods of withdrawal; namely, the
telephone, telegraph, check-writing or periodic redemption
procedures. The Fund reserves the right to reject any purchase
order.

Arrangements for Telephone Redemptions. If you wish to
use the telephone redemption procedure, indicate this on your
Application Form and designate a bank and account number to
receive the proceeds of your withdrawals. If you decide later
that you wish to use this procedure, or to change instructions
already given, send a written notice to Alliance Fund Services,
Inc., P.O. Box 1520, Secaucus, New Jersey 07096-1520, with your
signature guaranteed by an institution which is an eligible
guarantor. For joint accounts, all owners must sign and have
their signatures guaranteed.

Automatic Investment Program. A shareholder may
purchase shares of the Fund through an automatic investment
program through a bank that is a member of the National Automated
Clearing House Association. Purchases can be made on a Fund
business day each month designated by the shareholder.
Shareholders wishing to establish an automatic investment program
should write or telephone the Fund or Alliance Fund Service, Inc.
at (800) 221-5672.

The Alliance Plans Division of Frontier Trust Company, a
subsidiary of The Equitable Life Assurance Society of the United

<PAGE>

States, is the custodian under these plans. The custodian
charges a nominal account establishment fee and a nominal annual
maintenance fee. A portion of such fees is remitted to AFS to
compensate that organization for services rendered to retirement
plan accounts maintained with the Fund.

Periodic Distribution Plans. Without affecting your
right to use any of the methods of redemption described above, by
checking the appropriate boxes on the Application Form, you may
elect to participate additionally in the following plans without
any separate charge. Under the Income Distribution Plan you
receive monthly payments of all the income earned in your Fund
account, with payments forwarded by check or electronically via
the Automated Clearing House ("ACH") network shortly after the
close of the month. Under the Systematic Withdrawal Plan, you
may request payments by check or electronically via the ACH
network in any specified amount of $50 or more each month or in
any intermittent pattern of months. If desired, you can order,
via a signature-guaranteed letter to the Fund, such periodic
payments to be sent to another person. Shareholders wishing
either of the above plans electronically through the ACH network
should write or telephone the Fund or AFS at (800) 221-5672.

The Fund has the right to close out an account if it has
a zero balance on December 31 and no account activity for the
first six months of the subsequent year. Therefore, unless this
has occurred, a shareholder with a zero balance, when
reinvesting, should continue to use his account number.
Otherwise, the account should be re-opened pursuant to procedures
described above or through instructions given to a financial
intermediary.

A "business day," during which purchases and redemptions
of Fund shares can become effective and the transmittal of
redemption proceeds can occur, is considered for Fund purposes as
any day the New York Stock Exchange is open for trading; however,
on any such day that is an official bank holiday in
Massachusetts, neither purchases nor wired redemptions can become
effective because Federal funds cannot be received or sent by
State Street Bank. On such days, therefore, the Fund can only
accept redemption orders for which shareholders desire remittance
by check. The right of redemption may be suspended or the date
of a redemption payment postponed for any period during which the
New York Stock Exchange is closed (other than customary weekend
and holiday closings), when trading on the New York Stock
Exchange is restricted, or an emergency (as determined by the
Securities and Exchange Commission) exists, or the Commission has
ordered such a suspension for the protection of shareholders.
The value of a shareholder's investment at the time of redemption
may be more or less than his cost, depending on the market value

<PAGE>

of the securities held by the Fund at such time and the income
earned.

______________________________________________________________

DAILY DIVIDENDS--DETERMINATION OF NET ASSET VALUE
______________________________________________________________

All net income of the Fund is determined after the close
of each business day, currently 4:00 p.m. New York time (and at
such other times as the Trustees may determine) and is paid
immediately thereafter pro rata to shareholders of record via
automatic investment in additional full and fractional shares in
each shareholder's account at the rate of one share for each
dollar distributed. As such additional shares are entitled to
dividends on following days, a compounding growth of income
occurs.

Net income consists of all accrued interest income on
Fund portfolio assets less the Fund's expenses applicable to that
dividend period. Realized gains and losses are reflected in net
asset value and are not included in net income. Net asset value
per share is expected to remain constant at $1.00 since all net
income is declared as a dividend each time net income is
determined.

The valuation of the Fund's portfolio securities is
based upon their amortized cost which does not take into account
unrealized securities gains or losses as measured by market
valuations. The amortized cost method involves valuing an
instrument at its cost and thereafter applying a constant
amortization to maturity of any discount or premium, regardless
of the impact of fluctuating interest rates on the market value
of the instrument. During periods of declining interest rates,
the daily yield on shares of the Fund may be higher than that of
a fund with identical investments utilizing a method of valuation
based upon market prices for its portfolio instruments; the
converse would apply in a period of rising interest rates.

The Fund utilizes the amortized cost method of valuation
of portfolio securities in accordance with the provisions of Rule
2a-7 under the Act. Pursuant to such rule, the Fund maintains a
dollar-weighted average portfolio maturity of 90 days or less,
purchases instruments which, at the time of investment, have
remaining maturities of no more than 397 days and invests only in
eligible securities. The Fund maintains procedures designed to
stabilize, to the extent reasonably possible, the price per share
as computed for the purpose of sales and redemptions at $1.00.
Such procedures include review of the Fund's portfolio holdings
by the Trustees at such intervals as they deem appropriate to
determine whether and to what extent the net asset value of the

<PAGE>

Fund calculated by using available market quotations or market
equivalents deviates from net asset value based on amortized
cost. If such deviation exceeds 1/2 of 1%, the Trustees will
promptly consider what action, if any, should be initiated. In
the event the Trustees determine that such a deviation may result
in material dilution or other unfair results to new investors or
existing shareholders, they will consider corrective action which
might include (1) selling instruments prior to maturity to
realize capital gains or losses or to shorten average portfolio
maturity; (2) withholding dividends of net income on shares; or
(3) establishing a net asset value per share using available
market quotations or equivalents. There can be no assurance,
however, that the Fund's net asset value per share will remain
constant at $1.00.

The net asset value of the shares is determined each
business day at 12:00 Noon and 4:00 p.m. (New York time). The
net asset value per share is calculated by taking the sum of the
value of the Fund's investments and any cash or other assets,
subtracting liabilities, and dividing by the total number of
shares outstanding. All expenses, including the fees payable to
the Adviser, are accrued daily.

______________________________________________________________

TAXES
______________________________________________________________

The Fund has qualified in each fiscal year to date and
intends to qualify in each future year to be taxed as a regulated
investment company under the Internal Revenue Code of 1986, as
amended (the "Code") and, as such, will not be liable for Federal
income and excise taxes on the net income and capital gains
distributed to its shareholders. Since the Fund intends to
distribute all of its net income and capital gains, the Fund
itself should thereby avoid all Federal income and excise taxes.

<PAGE>

______________________________________________________________

GENERAL INFORMATION
______________________________________________________________

Portfolio Transactions. Subject to the general
supervision of the Trustees of the Trust, the Adviser is
responsible for the investment decisions and the placing of the
orders for portfolio transactions for the Fund. Because the Fund
invests in securities with short maturities, there may be a
relatively high portfolio turnover rate. However, the turnover
rate does not have an adverse effect upon the net yield and net
asset value of the Fund's shares since the Fund's portfolio
transactions occur primarily with issuers, underwriters or major
dealers in money market instruments acting as principals. Such
transactions are normally on a net basis which do not involve
payment of brokerage commissions. The cost of securities
purchased from an underwriter usually includes a commission paid
by the issuer to the underwriters; transactions with dealers
normally reflect the spread between bid and asked prices.

The Fund has no obligations to enter into transactions
in portfolio securities with any dealer, issuer, underwriter or
other entity. In placing orders, it is the policy of the Fund to
obtain the best price and execution for its transactions. Where
best price and execution may be obtained from more than one
dealer, the Adviser may, in its discretion, purchase and sell
securities through dealers who provide research, statistical and
other information to the Adviser. Such services may be used by
the Adviser for all of its investment advisory accounts and,
accordingly, not all such services may be used by the Adviser in
connection with the Fund. The supplemental information received
from a dealer is in addition to the services required to be
performed by the Adviser under the Advisory Agreement, and the
expenses of the Adviser will not necessarily be reduced as a
result of the receipt of such information. Portfolio securities
will not be purchased from or sold to the Adviser's parent, or
any subsidiary or affiliate of the parent. During the period
September 1, 1993 (commencement of operations) through June 30,
1994 and for the fiscal years ended June 30, 1995 and 1996, the
Fund paid no brokerage commissions.

Capitalization. All shares of the Trust, when issued,
are fully paid and non-assessable. The Trustees are authorized
to reclassify and issue any unissued shares to any number of
additional classes or series without shareholder approval.
Accordingly, the Trustees, in the future, for reasons such as the
desire to establish one or more additional portfolios with
different investment objectives, policies or restrictions, may
create additional classes or series of shares. Any issuance of
shares of another class would be governed by the Act and the law

<PAGE>

of the Commonwealth of Massachusetts. Shares of each portfolio
are normally entitled to one vote for all purposes. Generally,
shares of all portfolios vote as a single series for the election
of Trustees and on any other matter that affected all portfolios
in substantially the same manner. As to matters affecting each
portfolio differently, such as approval of the Advisory Agreement
and changes in investment policy, shares of each portfolio vote
as separate series. Certain procedures for the removal by
shareholders of trustees of investment trusts, such as the Trust,
are set forth in Section 16(c) of the Act.

At October 16, 1996, there were 718,472,250 shares of
beneficial interest of the Fund outstanding. To the knowledge of
the Fund there were no persons who owned of record or
beneficially 5% or more of the outstanding shares of the Fund as
of October 16, 1996.

Shareholder Liability. Under Massachusetts law,
shareholders could, under certain circumstances, be held
personally liable for the obligations of the Fund. However, the
Agreement and Declaration of Trust disclaims shareholder
liability for acts or obligations of the Fund and requires that
the Trustees use their best efforts to ensure that notice of such
disclaimer be given in each note, bond, contract, instrument,
certificate or undertaking made or issued by the Trustees or
officers of the Trust. The Agreement and Declaration of Trust
provides for indemnification out of the property of the Fund for
all loss and expense of any shareholder of the Fund held
personally liable for the obligations of the Fund. Thus, the
risk of a shareholder incurring financial loss on account of
shareholder liability is limited to circumstances in which the
Fund would be unable to meet its obligations. In the view of the
Adviser, such risk is not material.

Legal Matters. The legality of the shares offered
hereby has been passed upon by Seward & Kissel, New York, New
York, counsel for the Fund and the Adviser. Seward & Kissel has
relied upon the opinion of Sullivan & Worcester, Boston,
Massachusetts, for matters relating to Massachusetts law.

Accountants. An opinion relating to the Fund's
financial statements is given herein by McGladrey & Pullen, LLP,
New York, New York, independent auditors for the Trust.

<PAGE>

Insight or Bank Rate Monitor or compare the Fund's performance to
bank money market deposit accounts, certificates of deposit or
various indices. Such yield quotations are calculated in
accordance with the standardized method referred to in Rule 482
under the Securities Act of 1933. Yield quotations are thus
determined by (i) computing the net change over a seven-day
period, exclusive of capital changes, in the value of a
hypothetical pre-existing account having a balance of one share
at the beginning of such period, (ii) dividing the net change in
account value by the value of the account at the beginning of
such period, and (iii) multiplying such base period return the
result by (365/7)--with the resulting yield figure carried to the
nearest hundredth of one percent. The Fund's effective annual
yield represents a compounding of the annualized yield according
to the following formula:

effective yield = [(base period return + 1)365/7] - 1

The Fund's yield for the seven-day period ended June 30,
1996, after expense reimbursement, was 4.37% which is the
equivalent of a 4.47% compounded effective yield. Absent such
reimbursement, the annualized yield for such period would have
been 4.19%, equivalent to an effective yield of 4.28%. Current
yield information for the Fund can be obtained by a recorded
message by telephoning toll-free at (800) 221-9513.

<PAGE>

______________________________________________________________

APPENDIX
______________________________________________________________

A-1+, A-1 and Prime-1 Commercial Paper Ratings

"A-1+" is the highest, and "A-1" the second highest,
commercial paper rating assigned by Standard & Poor's Corporation
("Standard & Poor's") and "Prime-1" is the highest commercial
paper rating assigned by Moody's Investors Service, Inc.
("Moody's"). Standard & Poor's uses the numbers 1+, 1, 2 and 3
to denote relative strength within its highest classification of
"A", while Moody's uses the numbers 1, 2 and 3 to denote relative
strength within its highest classification of "Prime." Commercial
paper issuers rated "A" by Standard & Poor's have the following
characteristics: liquidity ratios are better than industry
average; long-term debt rating is A or better; the issuer has
access to at least two additional channels of borrowing; basic
earnings and cash flow are in an upward trend; and typically, the
issuer is a strong company in a well-established industry and has
superior management. Commercial paper issuers rated "Prime" by
Moody's have the following characteristics: their short-term debt
obligations carry the smallest degree of investment risk; margins
of support for current indebtedness are large or stable with cash
flow and asset protection well assured; current liquidity
provides ample coverage of near-term liabilities and unused
alternative financing arrangements are generally available; and
while protective elements may change over the intermediate or
longer term, such changes are most unlikely to impair the
fundamentally strong position of short-term obligations.

AAA & AA and Aaa & Aa Bond Ratings

Bonds rated AAA and Aaa have the highest ratings
assigned to debt obligations by Standard & Poor's and Moody's,
respectively. Standard & Poor's AAA rating indicates an
extremely strong capacity to pay principal and interest. Bonds
rated AA by Standard & Poor's also qualify as high-quality debt
obligations. Capacity to pay principal and interest is very
strong, and in the majority of instances they differ from AAA
issues only in small degree. Moody's Aaa rating indicates the
ultimate degree of protection as to principal and interest.
Moody's Aa rated bonds, though also high-grade issues, are rated
lower than Aaa bonds because margins of protection may not be as
large or fluctuations of protective elements may be of greater
amplitude or there may be other elements present which make the
long-term risks appear somewhat larger.

A-1
00250083.AB8

<PAGE>

STATEMENT OF NET ASSETS
JUNE 30, 1996 ALLIANCE TREASURY RESERVES
_______________________________________________________________________________

PRINCIPAL
AMOUNT
(000) SECURITY YIELD VALUE
- ------------------------------------------------------------------------
U.S. GOVERNMENT OBLIGATIONS-71.1%
U.S. TREASURY NOTES-52.4%
$ 10,000 4.75%, 2/15/97 5.39% $ 9,955,416
57,000 6.13%, 7/31/96 4.82-5.20 57,050,018
65,000 6.50%, 9/30/96 5.02-5.23 65,187,012
60,000 6.88%, 10/31/96 5.23-5.25 60,286,023
10,000 6.88%, 2/28/97 5.38 10,094,531
115,000 7.25%, 8/31/96 5.14-5.24 115,303,898
6,000 7.50%, 1/31/97 5.13 6,079,596
10,000 7.88%, 7/15/96 4.95 10,010,739
33,000 7.88%, 7/31/96 5.20 33,067,350
------------
367,034,583

U.S. TREASURY BILLS-18.7%
25,000 7/25/96 4.71 24,921,500
33,000 8/01/96 4.96 32,859,053
50,000 8/22/96 5.00 49,638,889
20,000 8/29/96 5.04 19,834,800
3,500 9/19/96 5.09 3,460,400
------------
130,714,642

Total U.S. Government Obligations
(amortized cost $497,749,225) 497,749,225

REPURCHASE AGREEMENTS-27.4%
BANKERS TRUST REPO
32,000 5.15%, dated 6/27/96, due
7/01/96 in the amount of
$32,018,311 (cost $32,000,000;
collateralized by $33,460,000
U.S. Treasury Bills, 12/12/96,
value $32,667,333) 5.15 32,000,000

GOLDMAN SACHS & CO.
32,000 5.26%, dated 6/27/96, due
7/11/96 in the amount of
$32,065,458 (cost $32,000,000;
collateralized by $29,645,000
U.S. Treasury Bond, 8.00%,
11/15/21, value $32,958,715) 5.26 32,000,000

J.P. MORGAN & CO.
32,000 5.26%, dated 6/27/96, due
7/02/96 in the amount of
$32,023,378 (cost $32,000,000;
collateralized by $32,559,000
U.S. Treasury Note, 5.625%,
10/31/97, value $32,709,851) 5.26% 32,000,000

MERRILL LYNCH REPO
32,000 5.15%, dated 6/27/96, due
7/01/96 in the amount of
$32,018,311 (cost $32,000,000;
collateralized by $33,480,000
U.S. Treasury Bills, 12/12/96,
value $32,686,859) 5.15 32,000,000

MORGAN STANLEY REPO
32,000 5.28%, dated 6/27/96, due
7/02/96 in the amount of
$32,023,467 (cost $32,000,000;
collateralized by $28,780,000
U.S. Treasury Bond, 8.125%,
8/15/21, value $33,001,281) 5.28 32,000,000

STATE STREET BANK AND TRUST CO.
32,000 5.10%, dated 6/28/96, due
7/01/96 in the amount of
$32,013,600 (cost $32,000,000;
collateralized by $31,830,000
U.S. Treasury Bond, 7.125%,
2/15/23, value $32,978,216) 5.10 32,000,000

Total Repurchase Agreements
(amortized cost $192,000,000) 192,000,000

TOTAL INVESTMENTS-98.5%
(amortized cost $689,749,225) 689,749,225
Other assets less liabilities-1.5% 10,808,432

NET ASSETS-100%
(offering and redemption price
of $1.00 per share; 700,558,552
shares outstanding) $700,557,657

See notes to financial statements.

STATEMENT OF OPERATIONS
YEAR ENDED JUNE 30, 1996 ALLIANCE TREASURY RESERVES
_______________________________________________________________________________

INVESTMENT INCOME
Interest $29,253,913

EXPENSES
Advisory fee (Note B) $ 2,681,355
Distribution assistance and administrative
service (Note C) 1,579,280
Transfer agency (Note B) 813,781
Registration expense 235,572
Custodian fees 140,184
Printing 97,179
Audit and legal fees 43,109
Trustees' fees 11,521
Amortization of organization expense 9,150
Miscellaneous 19,713
Total expenses 5,630,844
Less: fee waiver (1,285,281)
4,345,563
Net investment income 24,908,350

REALIZED GAIN ON INVESTMENTS
Net realized gain on investments 3,652

NET INCREASE IN NET ASSETS FROM OPERATIONS $24,912,002

STATEMENTS OF CHANGES IN NET ASSETS
_______________________________________________________________________________

YEAR ENDED YEAR ENDED
JUNE 30,1996 JUNE 30,1995
------------- -------------
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS
Net investment income $ 24,908,350 $ 13,260,896
Net realized gain (loss) on investments 3,652 (1,959)
Net increase in net assets from operations 24,912,002 13,258,937

DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income (24,908,350) (13,260,896)

TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST
Net increase (Note E) 206,852,122 412,984,016
Total increase 206,855,774 412,982,057

NET ASSETS
Beginning of year 493,701,883 80,719,826
End of year $700,557,657 $493,701,883

See notes to financial statements.

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1996 ALLIANCE TREASURY RESERVES
_______________________________________________________________________________

NOTE A: SIGNIFICANT ACCOUNTING POLICIES
Alliance Government Reserves (the "Trust") is an open-end diversified
investment company registered under the Investment Company Act of 1940. The
Trust consists of two portfolios: Alliance Government Reserves and Alliance
Treasury Reserves (the "Portfolio"). Each portfolio is considered to be a
separate entity for financial reporting and tax purposes. As a matter of
fundamental policy, each Portfolio pursues its objectives by maintaining a
portfolio of high-quality money market securities all of which, at the time of
investment, have remaining maturities of 397 days or less. The following is a
summary of significant accounting policies followed by the Portfolio.

2. ORGANIZATION EXPENSES
The organization expenses of the Portfolio are being amortized against income
on a straight-line basis through September, 1998.

3. TAXES
It is the Portfolio's policy to comply with the require-ments of the Internal
Revenue Code applicable to regulated investment companies and to distribute all
of its investment company taxable income and net realized gains, if applicable,
to its shareholders. Therefore, no provisions for federal income or excise
taxes are required.

4. DIVIDENDS
The Portfolio declares dividends daily and automatically reinvests such
dividends in additional shares at net asset value. Net realized capital gains
on investments, if any, are expected to be distributed near year end.

5. GENERAL
Interest income is accrued as earned. Security transactions are recorded on a
trade date basis. Security gains and losses are determined on the identified
cost basis. It is the Portfolio's policy to take possession of securities as
collateral under repurchase agreements and to determine on a daily basis that
the value of such securities is sufficient to cover the value of the repurchase
agreements.

The Adviser has agreed, pursuant to the advisory agreement, to reimburse the
Portfolio to the extent that its aggregate expenses (excluding taxes,
brokerage, interest and, where permitted, extraordinary expenses) exceed 1% of
its average daily net assets for any fiscal year. The Adviser also voluntarily
agreed to reimburse the Portfolio from July 1, 1995 to April 25, 1996 for
expenses exceeding .80 of 1% of its average daily net assets and from April 26,
1996 to June 30, 1996 for expenses exceeding .85 of 1% of its average daily net
assets. No reimbursement was required for the year ended June 30, 1996. The
Portfolio compensates Alliance Fund Services, Inc. (a wholly-owned subsidiary
of the Adviser) for providing personnel and facilities to perform transfer
agency services for the Portfolio. Such compensation amounted to $356,606 for
the year ended June 30, 1996.

NOTES TO FINANCIAL STATEMENTS (CONTINUED) ALLIANCE TREASURY RESERVES
_______________________________________________________________________________

NOTE C: DISTRIBUTION ASSISTANCE AND ADMINISTRATIVE SERVICES PLAN
Under this Plan, the Portfolio pays the Adviser a distribution fee at the
annual rate of up to .25% of 1% of the average daily value of the Portfolio's
net assets. The Plan provides that the Adviser will use such payments in their
entirety for distribution assistance and promotional activities. For the year
ended June 30, 1996, the distribution fee amounted to $1,340,677 of which
$1,285,281 was waived. In addition, the Portfolio may reimburse certain
broker-dealers for administrative costs incurred in connection with providing
shareholder services, accounting and bookkeeping, and legal and compliance
support. For the year ended June 30, 1996, such payments by the Portfolio
amounted to $238,603 of which $127,000 was paid to the Adviser.

NOTE D: INVESTMENT TRANSACTIONS
At June 30, 1996, the cost of securities for federal income tax purposes was
the same as the cost for financial reporting purposes. At June 30, 1996, the
Portfolio had a capital loss carryforward of $895 which expires in 2003.

NOTE E: TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST
An unlimited number of shares ($.001 par value) are authorized. At June 30,
1996, capital paid-in aggregated $700,558,552. Transactions, all at $1.00 per
share, were as follows:

YEAR ENDED YEAR ENDED
JUNE 30, 1996 JUNE 30, 1995
--------------- ---------------
Shares sold 3,173,100,216 2,037,450,750
Shares issued on reinvestments of dividends 24,908,350 13,260,896
Shares redeemed (2,991,156,444) (1,637,727,630)
Net increase 206,852,122 412,984,016

ALLIANCE TREASURY RESERVES
_______________________________________________________________________________

NOTE F: FINANCIAL HIGHLIGHTS
Selected data for a share outstanding throughout each period.

SEPTEMBER 1,
YEAR ENDED JUNE 30, 1993(A)
--------------------- THROUGH
1996 1995 JUNE 30,1994
--------- --------- ------------
Net asset value, beginning of period $1.00 $1.00 $1.00

INCOME FROM INVESTMENT OPERATIONS
Net investment income .0466 .0460 .0260

LESS: DISTRIBUTIONS
Dividends from net investment income (.0466) (.0460) (.0260)
Net asset value, end of period $1.00 $1.00 $1.00

TOTAL RETURNS
Total investment return based on:
net asset value (b) 4.77% 4.71% 3.18%(c)

RATIOS/SUPPLEMENTAL DATA
Net assets, end of period(in thousands) $700,558 $493,702 $80,720
Ratio to average net assets of:
Expenses, net of waivers and
reimbursements .81% .69% .28%(c)
Expenses, before waivers and
reimbursements 1.05% 1.05% 1.28%(c)
Net investment income (d) 4.64% 4.86% 3.24%(c)

(a) Commencement of operations.

(b) Total investment return in calculated assuming an initial investment made
at the net asset value at the beginning of the period, reinvestment of all
dividends and distributions at net asset value during the period, and
redemption in the last day of the period.

(d) Net of expenses reimbursed or waived by the Adviser.

INDEPENDENT AUDITOR'S REPORT ALLIANCE TREASURY RESERVES
_______________________________________________________________________________

TO THE BOARD OF TRUSTEES AND SHAREHOLDERS ALLIANCE TREASURY RESERVES PORTFOLIO

We have audited the accompanying statement of net assets of Alliance Treasury
Reserves Portfolio as of June 30, 1996 and the related statements of
operations, changes in net assets, and financial highlights for the periods
indicated in the accompanying financial statements. These financial statements
and financial highlights are the responsibility of the Portfolio's management.
Our responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.

In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Alliance Treasury Reserves Portfolio as of June 30, 1996, and the results of
its operations, changes in its net assets, and its financial highlights for the
periods indicated, in conformity with generally accepted accounting principles.

McGladrey & Pullen, LLP
New York, New York
July 26, 1996

<PAGE>

PART C
OTHER INFORMATION

ITEM 24. Financial Statements and Exhibits for the Fund

(a) Financial Highlights

Included in the Prospectuses:

Financial Information

Included in the Statement of Additional
Information:

Statement of Net Assets, June 30, 1996
Statement of Operations, June 30, 1996
Statement of Changes in Net Assets
for the years ended June 30, 1995 and June 30, 1996
Notes to Financial Highlights, June 30, 1996
Report of Independent Auditors

Included in Part C of the Registration Statement

All other schedules are omitted as the required
information is inapplicable

(b) Exhibits

(1) Declaration of Trust - Incorporated by
reference to Exhibit 1 to Post-Effective
Amendment No. 8 of the Registrant's
Registration Statement on Form N-1A (File No.
2-63315) (the "Registrant's Form N-1A"), filed
November 1, 1984.

(2) By-Laws - Incorporated by reference to Exhibit
2 to Post-Effective Amendment No. 8 of the
Registrant's Form N-1A, filed November 1,
1984.

(3) Not applicable.

(4) (a) Specimen form of Share Certificate for
Alliance Government Reserves - Incorporated by
reference to Exhibit 4 to Post-Effective
Amendment No. 14 of the Registrant's Form N-
1A, filed October 28, 1988.

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(4) (b) Specimen form of Share Certificate for
Alliance Treasury Reserves - Incorporated by
reference to Exhibit 4(b) to Post-Effective
Amendment No. 19 of the Registrant's Form N1-
A, filed June 21, 1993.

(5) (a) Copy of Advisory Agreement between the
Registrant and Alliance Capital Management
L.P., as amended on November 6, 1990 -
Incorporated by reference to Exhibit No.5 to
Post-Effective Amendment No. 17 of the
Registrant's Form N1-A, filed October 28,
1991.

(5) (b) Copy of Advisory Agreement between the
Registrant and Alliance Capital Management
L.P., dated July 22, 1992 - Incorporated by
reference to Exhibit No. 5 to Post-Effective
Amendment No. 18 of the Registrant's Form N1-
A, filed October 13, 1992.

(6) (a) Copy of Distribution Services Agreement
between the Registrant and Alliance Fund
Distributors, Inc., as amended on November 6,
1990 - Incorporated by reference to Exhibit
No. 6 to Post-Effective Amendment No. 17 of
the Registrant's Form N1-A, filed October 28,
1991.

(6) (b) Copy of Distribution Services Agreement
between the Registrant and Alliance Fund
Distributors, Inc., dated July 22, 1992 -
Incorporated by reference to Exhibit 6(b) to
Post-Effective Amendment No. 18, filed
October 13, 1992.

(7) Not applicable.

(8) Copy of Custodian Contract between the
Registrant and State Street Bank and Trust
Company - Incorporated by reference to Exhibit
No. 8 to Post-Effective Amendment No. 14 of
the Registrant's Form N1-A, filed October 28,
1988.

(9) Not applicable.

(10) Not applicable.

(11) Consent of Independent Auditor - Filed
herewith.

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(12) Not applicable.

(13) Not applicable.

(14) Not applicable.

(15) Rule 12b-1 Plan - See Exhibit 6(a) and 6(b)
hereto.

(16) Schedule of Computation of Performance
Quotation Provided in Response to Item 22 -
Incorporated by reference to Exhibit No. 16 to
Post-Effective Amendment No. 18 of the
Registrant's Form N1-A, filed October 13,
1992.

(27) Financial Data Schedule - Filed herewith.

Other Exhibit:

Powers of Attorney of: John D. Carifa, Charles
H.P. Duell, William H. Foulk, Jr., Alfred Lee
Loomis, III, Elizabeth J. McCormack, David K.
Storrs, Dave. H. Williams, John Winthrop -
Incorporated by reference to Other Exhibits to
Post-Effective Amendment No. 14 of the Registrant's
Form N1-A, filed October 28, 1988.

Power of Attorney of Hon. James D. Hodgson -
Incorporated by reference to Other Exhibits to
Post- Effective Amendment No. 16 of the
Registrant's Form N1-A, filed August 30, 1990.

Powers of Attorney of: Sam Y. Cross and Shelby
White - Incorporated by reference to Other Exhibits
to Post-Effective Amendment No. 18 of the
Registrant's Form N1-A, filed October 13, 1992.

Powers of Attorney of: John D. Carifa, Sam Y.
Cross, Charles H.P. Duell, William H. Foulk, Jr.,
Elizabeth J. McCormack, David K. Storrs, Shelby
White, Dave. H. Williams - Filed herewith.

ITEM 25. Persons Controlled by or under Common Control with
Registrant.

None.

ITEM 26. Number of Holders of Securities.

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Registrant had, as of October 16, 1996, record
holders of shares of beneficial interest:

Alliance Government Reserves 219,264
Alliance Treasury Reserves 24,775

ITEM 27. Indemnification

It is the Registrant's policy to indemnify its
trustees and officers, employees and other agents
as set forth in Article V of Registrant's Agreement
and Declaration of Trust, filed as Exhibit 1 in
response to Item 24 and Section 7 of the
Distribution Agreement filed as Exhibit 6 in
response to Item 24, all as set forth below. The
liability of the Registrant's trustees and officers
is also dealt with in Article V of Registrant's
Agreement and Declaration of Trust. The Adviser's
liability for loss suffered by the Registrant or
its shareholders is set forth in Section 4 of the
Advisory Agreement filed as Exhibit 5 in response
to Item 24, as set forth below.

Article V of Registrant's Agreement and Declaration
of Trust reads as follows:

Section 5.1 - No Personal Liability of
Shareholders, Trustees, etc.
No Shareholder shall be subject to any personal
liability whatsoever to any Person in connection
with Trust Property, including the or any series
thereof. No Trustee, officer, employee or agent of
the Trust shall property of any series of the
Trust, or the acts, obligations or affairs of the
Trust be subject to any personal liability
whatsoever to any Person, other than the Trust or
applicable series thereof or its Shareholders, in
connection with Trust Property or the property of
any series thereof or the affairs of the Trust or
any series thereof, save only that arising from bad
faith, willful misfeasance, gross negligence or
reckless disregard for his duty to such Person; and
all such Persons shall look solely to the Trust
Property or the property of the appropriate series
of the Trust for satisfaction of claims of any
nature arising in connection with the affairs of
the Trust or any series thereof. If any
Shareholder, Trustee, officer, employee or agent,
as such, of the Trust is made a party to any suit
or proceeding to enforce any such liability, he

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shall not, on account thereof, be held to any
personal liability. The Trust shall indemnify and
hold each Shareholder harmless from and against all
claims by reason of his being or having been a
Shareholder, and shall reimburse such Shareholder
for all legal and other expenses reasonably
incurred by him in connection with any such claim
or liability, provided that any such expenses shall
be paid solely out of the funds and property of the
series of the Trust with respect to which such
Shareholder's shares are issued. The rights
accruing to a Shareholder under this Section 5.1
shall not exclude any other right to which such
Shareholder may be lawfully entitled, nor shall
anything herein contained restrict the right of the
Trust to indemnify or reimburse a Shareholder in
any appropriate situation even though not
specifically provided herein.

Section 5.2 - Non-Liability of Trustees, etc. No
Trustee, officer, employee or agent of the Trust
shall be liable to the Trust, its Shareholders, or
to any Shareholder, Trustee, officer, employee, or
agent thereof for any action or failure to act
(including without limitation the failure to compel
in any way any former or acting Trustee to redress
any breach of trust) except for his own bad faith,
willful misfeasance, gross negligence or reckless
disregard of his duties.

Section 5.3 - Indemnification.
(a) The Trustees shall provide for indemnification
by the Trust (or by the appropriate series thereof)
of every person who is, or has been, a Trustee or
officer of the Trust against all liability and
against all expenses reasonably incurred or paid by
him in connection with any claim, action, suit or
proceeding in which he becomes involved as a party
or otherwise by virtue of his being or having been
a Trustee or officer and against amounts paid or
incurred by him in the settlement thereof, in such
manner as the Trustees may provide from time to
time in the By-Laws.

(b) The words "claim," "action," "suit," or
"proceeding" shall apply to all claims, actions,
suits or proceedings (civil, criminal, or other,
including appeals), actual or threatened; and the
words "liability" and "expenses" shall include,
without limitation, attorneys' fees, costs,

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<PAGE>

judgments, amounts paid in settlement, fines,
penalties and other liabilities.

Section 5.4 - No Bond Required of Trustees. No
Trustee shall be obligated to give any bond or
other security for performance of any of his duties
hereunder.

Section 5.5 - No Duty of Investigation; Notice in
Trust Instruments, Insurance. No purchaser,
lender, transfer agent or other Person dealing with
the Trustees or any officer, employee or agent of
the Trust shall be bound to make any inquiry
concerning the validity of any transaction
purporting to be made by the Trustees or by said
officer, employee or agent or be liable for the
application of money or property paid, loaned, or
delivered to or on the order of the Trustees or of
said officer, employee or agent. Every obligation,
contract, instrument, certificate, Share, other
security of the Trust or undertaking, and every
other act or thing whatsoever executed in
connection with the Trust shall be conclusively
presumed to have been executed or done by the
executors thereof only in their capacity as
Trustees under the Declaration or in their capacity
as officers, employees or agents of the Trust.
Every written obligation, contract, instrument,
certificate, Share, other security of the Trust or
undertaking made or issued by the Trustees shall
recite that the same is executed or made by them
not individually, but as Trustees under the
Declaration, and that the obligations of any such
instrument are not binding upon any of the Trustees
or Shareholders, individually, but bind only the
Trust Property or the property of the appropriate
series of the Trust, and may contain any further
recital which they or he may deem appropriate, but
the omission of such recital shall not operate to
bind the Trustees or Shareholders individually.
The Trustees shall at all times maintain insurance
for the protection of the Trust Property, its
Shareholders, Trustees, officers, employees and
agents in such amount as the Trustees shall deem
adequate to cover possible tort liability, and such
other insurance as the Trustees in their sole
judgment shall deem advisable.

Section 5.6 - Reliance on Experts, etc. Each
Trustee and officer or employee of the Trust shall,
in the performance of his duties, be fully and

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<PAGE>

completely justified and protected with regard to
any act or any failure to act resulting from
reliance in good faith upon the books of account or
other records of the Trust, upon an opinion of
counsel or upon reports made to the Trust by any of
its officers or employees or by the Investment
Adviser, the Distributor, Transfer Agent, selected
dealers, accountants, appraisers or other experts
or consultants selected with reasonable care by the
Trustees, officers or employees of the Trust,
regardless of whether such counsel or expert may
also be a Trustee.

The Advisory Agreement between Registrant and
Alliance Capital Management L.P. provides that
Alliance Capital Management L.P. will not be liable
under such agreement for any mistake of judgment or
in any event whatsoever except for lack of good
faith and that nothing therein shall be deemed to
protect, or purport to protect, Alliance Capital
Management L.P. against any liability to Registrant
or its security holders to which it would otherwise
be subject by reason of willful misfeasance, bad
faith or gross negligence in the performance of its
duties thereunder, or by reason of reckless
disregard of its obligations and duties thereunder.

The Distribution Agreement between the Registrant
and Alliance Fund Distributors, Inc. provides that
the Registrant will indemnify, defend and hold
Alliance Fund Distributors, Inc., and any person
who controls it within the meaning of Section 15 of
the Investment Company Act of 1940, free and
harmless from and against any and all claims,
demands, liabilities and expenses which Alliance
Fund Distributors, Inc. or any controlling person
may incur arising out of or based upon any alleged
untrue statement of a material fact contained in
Registrant's Registration Statement or Prospectus
or Statement of Additional Information or arising
out of, or based upon any alleged omission to state
a material fact required to be stated in or
necessary to make the statements in either thereof
not misleading; provided, however that nothing
therein shall be so construed as to protect
Alliance Fund Distributors, Inc. against any
liability to Registrant or its security holders to
which it would otherwise be subject by reason of
willful misfeasance, bad faith or gross negligence
in the performance of its duties thereunder, or by

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<PAGE>

reason of reckless disregard of its obligations and
duties thereunder.

The foregoing summaries are qualified by the entire
text of Registrant's Agreement and Declaration of
Trust, the Advisory Agreement between Registrant
and Alliance Capital Management L.P. and the
Distribution Agreement between Registrant and
Alliance Fund Distributors, Inc.

Insofar as indemnification for liabilities arising
under the Securities Act may be permitted to
trustees, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that, in
the opinion of the Securities and Exchange
Commission, such indemnification is against public
policy as expressed in the Securities Act and is,
therefore, unenforceable. In the event that a
claim for indemnification against such liabilities
(other than the payment by the Registrant of
expenses incurred or paid by a trustee, officer or
controlling person of the Registrant in the
successful defense of any action, suit or
proceeding) is asserted by such trustee, officer or
controlling person in connection with the
securities being registered, the Registrant will,
unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question of
whether such indemnification by it is against
public policy as expressed in the Securities Act
and will be governed by the final adjudication of
such issue.

In accordance with Release No. IC-11330
(September 2, 1980) the Registrant will indemnify
its directors, officers, investment manager and
principal underwriters only if (1) a final decision
on the merits was issued by the court or other body
before whom the proceeding was brought that the
person to be indemnified (the "indemnitee") was not
liable by reason or willful misfeasance, bad faith,
gross negligence or reckless disregard of the
duties involved in the conduct of his office
("disabling conduct") or (2) a reasonable
determination is made, based upon a review of the
facts, that the indemnitee was not liable of
disabling conduct, by (a) the vote of a majority of
a quorum of the directors who are neither
"interested persons" of the Registrant as defined

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<PAGE>

in section 2(a)(19) of the Investment Company Act
of 1940 nor parties to the proceeding
("disinterested, non-party directors"), or (b) an
independent legal counsel in a written opinion.
The Registrant will advance attorneys fees or other
expenses incurred by its directors, officers,
investment adviser or principal underwriters in
defending a proceeding, upon the undertaking by or
on behalf of the indemnitee to repay the advance
unless it is ultimately determined that he is
entitled to indemnification and, as a condition to
the advance, (1) the indemnitee shall provide a
security for his undertaking, (2) the Registrant
shall be insured against losses arising by reason
of any lawful advances, or (3) a majority of a
quorum of disinterested, non-party directors of the
Registrant, or an independent legal counsel in a
written opinion, shall determine, based on a review
of readily available facts (as opposed to a full
trial-type inquiry), that there is reason to
believe that the indemnitee ultimately will be
found entitled to indemnification.

The Registrant participates in a joint directors
and officers liability insurance policy issued by
the ICI Mutual Insurance Company. Coverage under
this policy has been extended to directors,
trustees and officers of the investment companies
managed by Alliance Capital Management L.P. Under
this policy, outside trustees and directors would
be covered up to the limits specified for any claim
against them for acts committed in their capacities
as trustee or director. A pro rata share of the
premium for this coverage is charged to each
investment company.

ITEM 28. Business and Other Connections of Investment
Adviser.

The descriptions of Alliance Capital Management
L.P. under the caption "The Adviser" in the
Prospectus and "Management of the Fund" in the
Prospectus and in the Statement of Additional
Information constituting Parts A and B,
respectively, of this Registration Statement are
incorporated by reference herein.

The information as to the directors and executive
officers of Alliance Capital Management
Corporation, the general partner of Alliance
Capital Management L.P., set forth in Alliance

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<PAGE>

Capital Management L.P.'s Form ADV filed with the
Securities and Exchange Commission on April 21,
1988 (File No. 801-32361) and amended through the
date hereof, is incorporated by reference.

ITEM 29. Principal Underwriters

(a) Alliance Fund Distributors, Inc., the Registrant's
Principal Underwriter in connection with the sale
of shares of the Registrant, also acts as Principal
Underwriter or Distributor for the following
investment companies:

ACM Institutional Reserves, Inc.
AFD Exchange Reserves
Alliance All-Asia Investment Fund, Inc.
Alliance Balanced Shares, Inc.
Alliance Bond Fund, Inc.
Alliance Capital Reserves
Alliance Developing Markets Fund, Inc.
Alliance Global Dollar Government Fund, Inc.
Alliance Global Small Cap Fund, Inc.
Alliance Global Strategic Income Trust, Inc.
Alliance Government Reserves
Alliance Growth and Income Fund, Inc.
Alliance Income Builder Fund, Inc.
Alliance International Fund
Alliance Limited Maturity Government Fund, Inc.
Alliance Money Market Fund
Alliance Mortgage Securities Income Fund, Inc.
Alliance Multi-Market Strategy Trust, Inc.
Alliance Municipal Income Fund II
Alliance Municipal Income Fund, Inc.
Alliance Municipal Trust
Alliance New Europe Fund, Inc.
Alliance North American Government Income Trust,
Inc.
Alliance Premier Growth Fund, Inc.
Alliance Quasar Fund, Inc.
Alliance Real Estate Investment Fund, Inc.
Alliance/Regent Sector Opportunity Fund, Inc.
Alliance Short-Term Multi-Market Trust, Inc.
Alliance Technology Fund, Inc.
Alliance Utility Income Fund, Inc.
Alliance Variable Products Series Fund, Inc.
Alliance World Income Trust, Inc.
Alliance Worldwide Privatization Fund, Inc.
Fiduciary Management Associates
The Alliance Fund, Inc.
The Alliance Portfolios

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<PAGE>

(b) The following are the Directors and Officers of
Alliance Fund Distributors, Inc., the principal
place of business of which is 1345 Avenue of the
Americas, New York, New York, 10105.

Name Positions and Positions and
Offices With Offices With
Underwriter Registrant

Michael J. Laughlin Chairman

Robert L. Errico President

Edmund P. Bergan, Jr. Senior Vice President, Secretary
General Counsel
and Secretary

Daniel J. Dart Senior Vice President

Richard A. Davies Senior Vice President,
Managing Director

Byron M. Davis Senior Vice President

Kimberly A. Gardner Senior Vice President

Geoffrey L. Hyde Senior Vice President

Richard E. Khaleel Senior Vice President

Barbara J. Krumsiek Senior Vice President

Stephen R. Laut Senior Vice President

Daniel D. McGinley Senior Vice President

Dusty W. Paschall Senior Vice President

Antonios G. Poleondakis Senior Vice President

Gregory K. Shannahan Senior Vice President

Joseph F. Sumanski Senior Vice President

Peter J. Szabo Senior Vice President

Nicholas K. Willett Senior Vice President

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<PAGE>

Richard A. Winge Senior Vice President

Jamie A. Atkinson Vice President

Benji A. Baer Vice President

Warren W. Babcock III Vice President

Kenneth F. Barkoff Vice President

William P. Beanblossom Vice President

Jack C. Bixler Vice President

Casimir F. Bolanowski Vice President

Kevin T. Cannon Vice President

William W. Collins, Jr. Vice President

Leo H. Cook Vice President

Richard W. Dabney Vice President

John F. Dolan Vice President

Mark J. Dunbar Vice President

Sohaila S. Farsheed Vice President

Linda A. Finnerty Vice President

William C. Fisher Vice President

Robert M. Frank Vice President

Gerard J. Friscia Vice President &
Controller

Andrew L. Gangolf Vice President and Assistant
Assistant General Secretary
Counsel

Mark D. Gersten Vice President Treasurer and
Chief
Financial
Officer

Joseph W. Gibson Vice President

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<PAGE>

Troy L. Glawe Vice President

Herbert H. Goldman Vice President

James E. Gunter Vice President

Alan Halfenger Vice President

Daniel M. Hazard Vice President

George R. Hrabovsky Vice President

Valerie J. Hugo Vice President

Thomas K. Intoccia Vice President

Robert H. Joseph, Jr. Vice President
and Treasurer

Richard D. Keppler Vice President

Sheila F. Lamb Vice President

Donna M. Lamback Vice President

Thomas Leavitt, III Vice President

James M. Liptrot Vice President

James P. Luisi Vice President

Shawn P. McClain Vice President

Christopher J. MacDonald Vice President

Michael F. Mahoney Vice President

Maura A. McGrath Vice President

Matthew P. Mintzer Vice President

Joanna D. Murray Vice President

Nicole Nolan-Koester Vice President

Daniel J. Phillips Vice President

Robert T. Pigozzi Vice President

James J. Posch Vice President

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<PAGE>

Robert E. Powers Vice President

Domenick Pugliese Vice President and Assistant
Associate General Secretary
Counsel

Bruce W. Reitz Vice President

Dennis A. Sanford Vice President

Raymond S. Sclafani Vice President

Richard J. Sidell Vice President

J. William Strott, Jr. Vice President

Richard E. Tambourine Vice President

Joseph T. Tocyloski Vice President

Neil S. Wood Vice President

Emilie D. Wrapp Vice President and Assistant
Special Counsel Secretary

Maria L. Carreras Assistant Vice
President

John W. Cronin Assistant Vice
President

Leon M. Fern Assistant Vice
President

William B. Hanigan Assistant Vice
President

John C. Hershock Assistant Vice
President

James J. Hill Assistant Vice
President

Kalen H. Holliday Assistant Vice
President

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<PAGE>

Edward W. Kelly Assistant Vice
President

Nicholas J. Lapi Assistant Vice
President

Patrick Look Assistant Vice
President &
Assistant
Treasurer

Thomas F. Monnerat Assistant Vice
President

Jeanette M. Nardella Assistant Vice
President

Carol H. Rappa Assistant Vice
President

Lisa Robinson-Cronin Assistant Vice
President

Robert M. Smith Assistant Vice
President

Wesley S. Williams Assistant Vice
President

Mark R. Manley Assistant Secretary

ITEM 30. Location of Accounts and Records.

The majority of the accounts, books and other
documents required to be maintained by Section
31(a) of the Investment Company Act of 1940 and the
Rules thereunder are maintained as follows:
journals, ledgers, securities records and other
original records are maintained principally at the
offices of Alliance Fund Services, Inc. 500 Plaza
Drive, Secaucus, New Jersey 07094 and at the
offices of State Street Bank and Trust Company, the
Registrant's Custodian, 225 Franklin Street,
Boston, Massachusetts 02110. All other records so
required to be maintained are maintained at the
offices of Alliance Capital Management L.P., 1345
Avenue of the Americas, New York, New York 10105.

C-15

<PAGE>

ITEM 3l. Management Services.
Not applicable.

ITEM 32. Undertakings.
The Registrant undertakes to furnish each person to
whom a prospectus is delivered with a copy of the
Registrant's latest report to shareholders, upon
request and without charge.

C-16

<PAGE>

SIGNATURE

Pursuant to the requirements of the Securities Act of
1933, as amended, and the Investment Company Act of 1940, as
amended, the Registrant certifies that it meets all of the
requirements for effectiveness of this Amendment to its
Registration pursuant to Rule 485(b) under the Securities Act of
1933 and has duly caused this Amendment to its Registration
Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of New York and State of
New York on the 29th day of October 1996.

ALLIANCE GOVERNMENT RESERVES

by/s/ Ronald M. Whitehill
Ronald M. Whitehill
President

Pursuant to the requirements of the Securities Act of
l933, as amended, this Amendment to the Registration Statement
has been signed below by the following persons in the capacities
and on the dates indicated:

C-17

<PAGE>

Signature Title Date

1) Principal
Executive Officer

/s/ Ronald M. Whitehill President October 29, 1996
Ronald M. Whitehill

2) Principal Financial and
Accounting Officer

/s/ Mark D. Gersten Treasurer October 29, 1996
Mark D. Gersten and Chief
Financial
Officer

3) All of the Trustees

John D. Carifa Elizabeth J. McCormack
Sam Y. Cross David K. Storrs
Charles H.P. Duell Shelby White
William H. Foulk, Jr. Dave H. Williams

by/s/ Edmund P. Bergan, Jr. October 29, 1996
(Attorney-in-fact)
Edmund P. Bergan, Jr.

C-18

<PAGE>

Index to Exhibits

Page

(11) Consent of Independent Auditors

(27) Financial Data Schedule

Other Exhibits:
Power of Attorney for
John D. Carifa
Sam Y. Cross
Charles H.P. Duell
William H. Foulk, Jr.
Elizabeth J. McCormack
David K. Storrs
Shelby White
Dave H. Williams

C-19

<PAGE>

SIGNATURE

ALLIANCE GOVERNMENT RESERVES

by /s/ Ronald M. Whitehall
Ronald M. Whitehall
President

Signature Title Date

1) Principal
Executive Officer

/s/ Ronald M. Whitehall President October 29, 1996
Ronald M. Whitehill

2) Principal Financial and
Accounting Officer

/s/ Mark D. Gersten Treasurer and October 29, 1996
Mark D. Gersten Chief Financial
Officer

3) All of the Trustees
John D. Carifa Elizabeth J.
McCormack
Sam Y. Cross David K. Storrs
Charles H.P. Duell Shelby White
William H. Foulk, Jr. Dave H. Williams

by/s/ Edmund P. Bergan October 29, 1996
(Attorney-in-fact)
Edmund P. Bergan, Jr.

C-20
00250083.AB8

<PAGE>

CONSENT OF INDEPENDENT AUDITORS

We hereby consent to the use of our reports dated
July 26, 1996 on the financial statements of the Government
Reserves Portfolio and the Treasury Reserves Portfolio, series of
Alliance Government Reserves, referred to therein in Post-
Effective Amendment No. 24 to the Registration Statement on
Form N-1A, File No. 2-63315, as filed with the Securities and
Exchange Commission.

We also consent to the reference to our firm in the
Prospectus under the caption "Financial Highlights" and in the
Statement of Additional Information under the caption
"Accountants."

New York, New York
October 28, 1996

00250083.AC3

<PAGE>

Other Exhibit

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that the person whose

signature appears below hereby revokes all prior powers granted

by the undersigned to the extent inconsistent herewith and

constitutes and appoints John D. Carifa, Edmund P. Bergan, Jr.

and Emilie D. Wrapp, and each of them, to act severally as

attorneys-in-fact and agents, with power of substitution and

resubstitution, for the undersigned, solely for the purpose of

signing on such person's behalf any Registration Statement on

Form N-1A, and any amendments thereto, of Alliance Government

Reserves and filing the same, with exhibits thereto, and other

documents in connection therewith, with the Securities and

Exchange Commission, hereby ratifying and confirming all that

said attorneys-in-fact, or their substitute or substitutes, may

do or cause to be done by virtue hereof.

/s/ Dave H. Williams
_____________________
Dave H. Williams

Dated: September 30, 1996

00250083.AB9

<PAGE>

Other Exhibit

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that the person whose

signature appears below hereby revokes all prior powers granted

by the undersigned to the extent inconsistent herewith and

constitutes and appoints John D. Carifa, Edmund P. Bergan, Jr.

and Emilie D. Wrapp, and each of them, to act severally as

attorneys-in-fact and agents, with power of substitution and

resubstitution, for the undersigned, solely for the purpose of

signing on such person's behalf any Registration Statement on

Form N-1A, and any amendments thereto, of Alliance Government

Reserves and filing the same, with exhibits thereto, and other

documents in connection therewith, with the Securities and

Exchange Commission, hereby ratifying and confirming all that

said attorneys-in-fact, or their substitute or substitutes, may

do or cause to be done by virtue hereof.

/s/ John D. Carifa
___________________
John D. Carifa

Dated: September 30, 1996

00250083.AB9

<PAGE>

Other Exhibit

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that the person whose

signature appears below hereby revokes all prior powers granted

by the undersigned to the extent inconsistent herewith and

constitutes and appoints John D. Carifa, Edmund P. Bergan, Jr.

and Emilie D. Wrapp, and each of them, to act severally as

attorneys-in-fact and agents, with power of substitution and

resubstitution, for the undersigned, solely for the purpose of

signing on such person's behalf any Registration Statement on

Form N-1A, and any amendments thereto, of Alliance Government

Reserves and filing the same, with exhibits thereto, and other

documents in connection therewith, with the Securities and

Exchange Commission, hereby ratifying and confirming all that

said attorneys-in-fact, or their substitute or substitutes, may

do or cause to be done by virtue hereof.

/s/ Sam Y. Cross
_________________
Sam Y. Cross

Dated: September 30, 1996

00250083.AB9

<PAGE>

Other Exhibit

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that the person whose

signature appears below hereby revokes all prior powers granted

by the undersigned to the extent inconsistent herewith and

constitutes and appoints John D. Carifa, Edmund P. Bergan, Jr.

and Emilie D. Wrapp, and each of them, to act severally as

attorneys-in-fact and agents, with power of substitution and

resubstitution, for the undersigned, solely for the purpose of

signing on such person's behalf any Registration Statement on

Form N-1A, and any amendments thereto, of Alliance Government

Reserves and filing the same, with exhibits thereto, and other

documents in connection therewith, with the Securities and

Exchange Commission, hereby ratifying and confirming all that

said attorneys-in-fact, or their substitute or substitutes, may

do or cause to be done by virtue hereof.

/s/ Charles H.P. Duell
________________________
Charles H.P. Duell

Dated: September 30, 1996

00250083.AB9

<PAGE>

Other Exhibit

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that the person whose

signature appears below hereby revokes all prior powers granted

by the undersigned to the extent inconsistent herewith and

constitutes and appoints John D. Carifa, Edmund P. Bergan, Jr.

and Emilie D. Wrapp, and each of them, to act severally as

attorneys-in-fact and agents, with power of substitution and

resubstitution, for the undersigned, solely for the purpose of

signing on such person's behalf any Registration Statement on

Form N-1A, and any amendments thereto, of Alliance Government

Reserves and filing the same, with exhibits thereto, and other

documents in connection therewith, with the Securities and

Exchange Commission, hereby ratifying and confirming all that

said attorneys-in-fact, or their substitute or substitutes, may

do or cause to be done by virtue hereof.

/s/ William H. Foulk, Jr.
__________________________
William H. Foulk, Jr.

Dated: September 30, 1996

00250083.AB9

<PAGE>

Other Exhibit

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that the person whose

signature appears below hereby revokes all prior powers granted

by the undersigned to the extent inconsistent herewith and

constitutes and appoints John D. Carifa, Edmund P. Bergan, Jr.

and Emilie D. Wrapp, and each of them, to act severally as

attorneys-in-fact and agents, with power of substitution and

resubstitution, for the undersigned, solely for the purpose of

signing on such person's behalf any Registration Statement on

Form N-1A, and any amendments thereto, of Alliance Government

Reserves and filing the same, with exhibits thereto, and other

documents in connection therewith, with the Securities and

Exchange Commission, hereby ratifying and confirming all that

said attorneys-in-fact, or their substitute or substitutes, may

do or cause to be done by virtue hereof.

/s/ Elizabeth J. McCormack
___________________________
Elizabeth J. McCormack

Dated: September 30, 1996

00250083.AB9

<PAGE>

Other Exhibit

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that the person whose

signature appears below hereby revokes all prior powers granted

by the undersigned to the extent inconsistent herewith and

constitutes and appoints John D. Carifa, Edmund P. Bergan, Jr.

and Emilie D. Wrapp, and each of them, to act severally as

attorneys-in-fact and agents, with power of substitution and

resubstitution, for the undersigned, solely for the purpose of

signing on such person's behalf any Registration Statement on

Form N-1A, and any amendments thereto, of Alliance Government

Reserves and filing the same, with exhibits thereto, and other

documents in connection therewith, with the Securities and

Exchange Commission, hereby ratifying and confirming all that

said attorneys-in-fact, or their substitute or substitutes, may

do or cause to be done by virtue hereof.

/s/ David K. Storrs
____________________
David K. Storrs

Dated: September 30, 1996

00250083.AB9

<PAGE>

Other Exhibit

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that the person whose

signature appears below hereby revokes all prior powers granted

by the undersigned to the extent inconsistent herewith and

constitutes and appoints John D. Carifa, Edmund P. Bergan, Jr.

and Emilie D. Wrapp, and each of them, to act severally as

attorneys-in-fact and agents, with power of substitution and

resubstitution, for the undersigned, solely for the purpose of

signing on such person's behalf any Registration Statement on

Form N-1A, and any amendments thereto, of Alliance Government

Reserves and filing the same, with exhibits thereto, and other

documents in connection therewith, with the Securities and

Exchange Commission, hereby ratifying and confirming all that

said attorneys-in-fact, or their substitute or substitutes, may

do or cause to be done by virtue hereof.

/s/ Shelby White
_________________
Shelby White

Dated: September 30, 1996

00250083.AB9

WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.

<PAGE>

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<NAME> ALLIANCE GOVERNMENT RESERVES
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<ASSETS-OTHER> 14,070,486
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<ACCUMULATED-GAINS-PRIOR> (937,413)
<OVERDISTRIB-NII-PRIOR> 0

<PAGE>

<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 14,176,000
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 29,734,000
<AVERAGE-NET-ASSETS> 2,940,650,855
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> 0.0461
<PER-SHARE-GAIN-APPREC> 0.00
<PER-SHARE-DIVIDEND> (0.0461)
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> 1.00
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

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WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.

<PAGE>

<ARTICLE> 6
<CIK> 0000278042
<NAME> ALLIANCE GOVERNMENT RESERVES
<SERIES>
<NUMBER> 02
<NAME> ALLIANCE TREASURY RESERVES

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<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1995
<PERIOD-END> JUN-30-1996
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<INVESTMENTS-AT-VALUE> 689,749,225
<RECEIVABLES> 8,231,070
<ASSETS-OTHER> 3,850,719
<OTHER-ITEMS-ASSETS> 19,739
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<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,293,096
<TOTAL-LIABILITIES> 1,293,096
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<NET-CHANGE-FROM-OPS> 24,912,002
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<DISTRIBUTIONS-OF-INCOME> (24,908,350)
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<NUMBER-OF-SHARES-REDEEMED> (2,991,156,444)
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<PAGE>

<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 2,681,000
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 5,631,000
<AVERAGE-NET-ASSETS> 536,270,911
<PER-SHARE-NAV-BEGIN> 1.00
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