<PAGE>
ALLIANCE GOVERNMENT RESERVES
This is filed pursuant to Rule 497(e).
File Nos: 002-63315 and 811-02889
<PAGE>
YIELDS
For current recorded yield information on
the Funds, call toll-free (800) 221-9513.
The Funds are open-end management investment
companies with investment objectives of safe-
ty, liquidity and maximum current income (in
the case of Alliance Municipal Trust-Califor-
nia, exempt from Federal and state income
taxes to the extent consistent with the first
two objectives). Alliance Treasury Reserves
is diversified. The California Portfolio of
Alliance Municipal Trust is non-diversified,
and is offered only to residents of Califor-
nia. This prospectus sets forth the informa-
tion about each Fund that a prospective in-
vestor should know before investing. Please
retain it for future reference.
AN INVESTMENT IN A FUND IS (I) NEITHER IN-
SURED NOR GUARANTEED BY THE U.S. GOVERNMENT;
(ii) NOT A DEPOSIT OR OBLIGATION OF, OR GUAR-
ANTEED OR ENDORSED BY, ANY BANK; AND (III) CASH
NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT MANAGEMENT
INSURANCE CORPORATION, THE FEDERAL RESERVE SERVICE
BOARD OR ANY OTHER AGENCY. THERE CAN BE NO
ASSURANCE THAT A fUND WILL BE ABLE TO MAIN-
TAIN A STABLE NET ASSET VALUE OF $1.00 PER
SHARE. THE CALIFORNIA PORTFOLIO OF ALLIANCE
MUNICIPAL TRUST MAY INVEST A SIGNIFICANT POR-
TION OF ITS ASSETS IN THE SECURITIES OF A
SINGLE ISSUER. ACCORDINGLY, AN INVESTMENT IN
SUCH PORTFOLIO MAY BE RISKIER THAN AN INVEST-
MENT IN OTHER TYPES OF MONEY MARKET FUNDS.
Alliance Treasury Reserves
A "Statement of Additional Information" for
each Fund dated November 1, 1996, which pro-
vides a further discussion of certain areas Allliance Muncipal Trust
in this prospectus and other matters which - California Portfolio
may be of interest to some investors, has
been filed with the Securities and Exchange
Commission and is incorporated herein by ref-
erence. A free copy may be obtained by con- Prospectus November 1, 1996
tacting your Account Executive.
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 COMMIS-
SION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CON-
TRARY IS A CRIMINAL OFFENSE. [LOGO OF STONE & YOUNGBERG
LLC APPEARS HERE]
STONE & YOUNGBERG LLC
Established 1931
<TABLE>
CONTENTS
-------
<S> <C>
Expense Information....................................................... 2
Financial Highlights...................................................... 2
Investment Objectives and Policies........................................ 4
Purchase and Redemption of Shares......................................... 6
Additional Information.................................................... 7
</TABLE>
<PAGE>
EXPENSE INFORMATION
SHAREHOLDER TRANSACTION EXPENSES
The Funds have 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 ATR AMT-CA
assets, after expense reimbursement) ---- ------
<S> <C> <C>
Management Fees................................................. .50% .50%
12b-1 Fees...................................................... .25 .25
Other Expenses.................................................. .25 .25
---- ----
Total Fund Operating Expenses................................... 1.00% 1.00%
</TABLE>
EXAMPLE
You would pay the following expenses on a $1,000 investment, assuming a 5%
annual return (cumulatively through the end of each time period):
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
ATR.......................................... $10 $32 $55 $122
AMT--California.............................. $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 and 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 PERIOD
The following tables have been audited by McGladrey & Pullen LLP, each of
the Fund's independent auditors, whose unqualified report thereon appears in
each Statement of Additional Information. This information should be read in
conjunction with the financial statements and notes thereto included in each
Fund's Statement of Additional Information.
<TABLE>
<CAPTION>
SEPTEMBER 1, 1993(A)
ALLIANCE TREASURY RESERVES 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.
2
<PAGE>
<TABLE>
<CAPTION>
CALIFORNIA PORTFOLIO
ALLIANCE MUNICIPAL TRUST -------------------------------------------------------------------------------------------------------
YEAR ENDED JUNE 30, SIX MONTHS JUNE 2, 1988(A)
-------------------------------------------------------------------- ENDED THROUGH
1996 1995 1994 1993 1992 1991 1990 JUNE 30, 1989 DECEMBER 31, 1988
-------- -------- -------- -------- -------- -------- -------- ------------- -----------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period.... $ 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... .029 .027 .018 .020 .032 .043 .050 .029 .030
-------- -------- -------- -------- -------- -------- -------- -------- --------
LESS: DISTRIBUTIONS
Dividends from net
investment income...... (.029) (.027) (.018) (.020) (.032) (.043) (.050) (.029) (.030)
-------- -------- -------- -------- -------- -------- -------- -------- --------
Net asset value, end of
period................. $ 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(b)..... 2.91% 2.78% 1.83% 2.05% 3.26% 4.43% 5.17% 6.02%(c) 5.20%(c)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of
period
(000's omitted)........ $297,862 $236,479 $219,673 $156,200 $121,317 $111,957 $104,097 $242,124 $103,390
Ratio to average net
assets of:
Expenses, net of
waivers and
reimbursements........ .93% .93% .93% .93% .95% 1.00% .99% .92%(c) .89%(c)
Expenses, before
waivers and
reimbursements........ .94% 1.01% 1.02% 1.02% 1.05% 1.10% 1.09% 1.02%(c) 1.10%(c)
Net investment
income(d)............. 2.86% 2.75% 1.82% 2.01% 3.18% 4.32% 5.03% 5.90%(c) 5.21%(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 each 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. For ATR
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%. For AMT-California
dividends for the seven days ended June 30, 1996, after expense reimbursement,
amounted to an annualized yield of 2.64%, equivalent to an effective yield of
2.68%. Absent such reimbursement, the annualized yield for such period would
have been 2.56%, equivalent to an effective yield of 2.59%.
3
<PAGE>
INVESTMENT OBJECTIVES AND POLICIES
The investment objectives of each of the Funds are--in the following order
of priority--safety of principal, excellent liquidity and, to the extent con-
sistent with the first two objectives, maximum current income (exempt from in-
come taxation to the extent described below in the case of AMT-California). As
a matter of fundamental policy, each Fund pursues its objectives by maintain-
ing a portfolio of high-quality money market securities all of which at the
time of investment have remaining maturities of one year (397 days with re-
spect to ATR) or less, which maturities may extend to 397 days. While the fun-
damental policies described above and the "other fundamental investment poli-
cies" described below may not be changed without shareholder approval, each
Fund may upon notice to shareholders, but without such approval, change non-
fundamental investment policies or create additional classes of shares in or-
der to establish portfolios which may have different investment objectives.
There can be no assurance that any Fund's objectives will be achieved.
The Funds will comply with Rule 2a-7 of the Investment Company Act of 1940
(the "1940 Act"), as amended from time to time, including the diversification,
quality and maturity limitations imposed by the Rule. The average maturity of
each Fund's portfolio cannot exceed 90 days. A more detailed description of
Rule 2a-7 is set forth in each Fund's Statement of Additional Information.
ALLIANCE TREASURY RESERVES
The securities in which Alliance Treasury Reserves ("ATR") invests are: (1)
issues of the U.S. Treasury, such as bills, certificates of indebtedness,
notes and bonds; and (2) repurchase agreements that are collateralized in full
each day by the types of securities listed above. These agreements are entered
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,
ATR's Custodian. For each repurchase agreement, ATR requires continual mainte-
nance of the market value of the underlying collateral in amounts equal to, or
in excess of, the agreement amount. In the event of a dealer default, ATR
might suffer a loss to the extent that the proceeds from the sale of the
collateral were less than the repurchase price. ATR may commit up to 15% of
its net assets to the purchase of when-issued U.S. Treasury securities. Deliv-
ery 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 ATR.
Other Fundamental Investment Policies. To maintain portfolio diversification
and reduce investment risk, ATR may not: (1) borrow money except from banks on
a temporary basis or via entering into reverse repurchase agreements in aggre-
gate amounts not exceeding 10% of its assets and to be used exclusively to fa-
cilitate 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 it will not purchase
any investment while any such borrowings exist; or (2) pledge, hypothecate or
in any manner transfer, as security for indebtedness, its assets except to se-
cure such borrowings.
ALLIANCE MUNICIPAL TRUST
The investment objectives of AMT-California are safety of principal, liquid-
ity and, to the extent consistent with these objectives, maximum current in-
come that is exempt from income taxation to the extent described below. Except
when such Portfolio assumes a temporary defensive position, as a matter of
fundamental policy, at least 80% of such Portfolio's total assets will be in-
vested in municipal securities (as opposed to the taxable investments de-
scribed below). Normally, substantially all of such Portfolio's income will be
tax-exempt as described below (e.g., for 1995, 100% of the income of such
Portfolio was exempt from Federal income taxes).
AMT-California seeks maximum current income that is exempt from Federal and
California state personal income taxes by investing, as a matter of fundamen-
tal policy, not less than 65% of its total assets in a portfolio of high qual-
ity municipal securities issued by the State of California or its political
subdivisions.
4
<PAGE>
Check-Writing
Service
Complete the Signature
Card. A supply of free
checks will be sent to you
shortly.
Send this completed form to:
Stone & Youngberg LLC
Attn: Cashier Dept.
50 California Street
Ste. 3500
San Francisco CA 94111
ALLIANCE
- --------------------------------------------------------------------------------
BROKER DEALER
STONE & YOUNGBERG LLC
- --------------------------------------------------------------------------------
ACCOUNT NAME(S) AS REGISTERED
- --------------------------------------------------------------------------------
ACCOUNT ADDRESS Street City State Zip Code
- --------------------------------------------------------------------------------
ACCOUNT SOCIAL SECURITY NO. OR TAXPAYER IDENTIFICATION NO.
- --------------------------------------------------------------------------------
AUTHORIZED SIGNATURE(S)
1. .................................. 2. ....................................
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Joint Accounts check one: [_] Either owner is authorized to sign
Redemption Checks.
[_] All owners are required to sign
Redemption checks.
(If no box is checked, only one signature will
be required.)
Checkbooks are not transferable to other accounts. If you change account
numbers or change funds, you must reapply for check-writing.
STATE STREET BANK AND TRUST COMPANY Subject to conditions printed on the
reverse side
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+ SIGNATURE GAURANTEED BY (see reverse side) +
+ +
+ ........................................................................ +
+ (Name of Bank or Firm) +
+ +
+ ........................................................................ +
+ (Name of Officer & Title) +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
<PAGE>
The payment of funds is authorized by the signature(s) appearing on the reverse
side. Each signatory guarantees the genuineness of the other signatures.
State Street Bank and Trust Company (the "Bank") is hereby appointed agent by
the person(s) signing this card (the "Depositor(s)") and, as agent, is
authorized and directed, upon presentment of checks to the Bank to transmit such
checks to the Fund or its transfer agent as requests to redeem shares registered
in the name of the Depositor(s) in the amounts of such checks for deposit in
this checking account.
This checking arrangement is subject to the applicable terms and restrictions,
including charges, set forth in the current Prospectus for each Alliance mutual
fund as to which the Depositor has arranged to redeem shares by check-writing.
The Bank is further authorized to effect redemptions to defray the Bank's
charges relating to this checking arrangement. The Depositor(s) agrees that he
shall be subject to the rules and regulations of the Bank pertaining to this
checking arrangement as amended from time to time; that the Bank has the right
not to honor checks which do not meet the Bank's normal standards for checks
presented to it, that the Bank and Alliance have the right to change, modify or
terminate this check-writing service at any time; and that the Bank shall be
liable only for its own negligence.
Send this completed form to:
Stone & Youngberg LLC
Attn: Cashier Dept.
50 California Street
Ste. 3500
San Francisco, CA 94111
<PAGE>
AMT-California of the Fund may invest without limitation in tax-exempt mu-
nicipal securities subject to the alternative minimum tax (the "AMT").
Under current Federal income tax law, (1) interest on tax-exempt municipal
securities issued after August 7, 1986 which are "specified private activity
bonds," and the proportionate share of any exempt-interest dividends paid by a
regulated investment company which receives interest from such specified pri-
vate activity bonds, will be treated as an item of tax preference for purposes
of the AMT imposed on individuals and corporations, though for regular Federal
income tax purposes such interest will remain fully tax-exempt, and (2) inter-
est on all tax-exempt obligations will be included in "adjusted current earn-
ings" of corporations for AMT purposes. Such bonds have provided, and may con-
tinue to provide, somewhat higher yields than other comparable municipal secu-
rities. See below, "Daily Dividends, Other Distributions, Taxes."
There can be no assurance that AMT-California will achieve its investment
objectives. Potential investors in AMT-California should consider the greater
risk of the concentration of such Portfolio versus the safety that comes with
less concentrated investments and should compare yields available on portfo-
lios of the relevant state's issues with those of more diversified portfolios,
including other states' issues, before making an investment decision. The Ad-
viser believes that by maintaining such Portfolio's investments in liquid,
short-term, high quality investments, such Portfolio is largely insulated from
the credit risks that exist on long-term municipal securities of the relevant
state. See the Statement of Additional Information for a more detailed discus-
sion of the financial condition of California.
Municipal Securities. The municipal securities in which AMT-California in-
vests include municipal notes and short-term municipal bonds. Municipal notes
are generally used to provide for short-term capital needs and generally have
maturities of one year or less. Examples include tax anticipation and revenue
anticipation notes, which are generally issued in anticipation of various sea-
sonal revenues, bond anticipation notes, and tax-exempt commercial paper.
Short-term municipal bonds may include general obligation bonds, which are se-
cured by the issuer's pledge of its faith, credit and taxing power for payment
of principal and interest, and revenue bonds, which are generally paid from
the revenues of a particular facility or a specific excise or other source.
AMT-California may invest in variable rate obligations whose interest rates
are adjusted either at predesignated periodic intervals or whenever there is a
change in the market rate to which the security's interest rate is tied. Such
adjustments minimize changes in the market value of the obligation and, ac-
cordingly, enhance the ability of AMT-California to maintain a stable net as-
set value. Variable rate securities purchased may include participation inter-
ests in industrial development bonds backed by letters of credit of Federal
Deposit Insurance Corporation member banks having total assets of more than $1
billion. The letters of credit of any single bank in respect of all variable
rate obligations will not cover more than 10% of AMT-California's total as-
sets.
AMT-California's municipal securities at the time of purchase are rated
within the two highest quality ratings of Moody's Investors Service, Inc. (Aaa
and Aa, MIG 1 and MIG 2, or VMIG 1 and VMIG 2) or Standard & Poor's Corpora-
tion (AAA and AA or SP-1 and SP-2), or judged by the Adviser to be of compara-
ble quality. Securities must also meet credit standards applied by the
Adviser.
To further enhance the quality and liquidity of the securities in which the
Portfolio invests, such securities frequently are supported by credit and li-
quidity enhancements, such as letters of credit, from third party financial
institutions. The Adviser continuously monitors the credit quality of such
third parties; however, changes in the credit quality of such a financial in-
stitution could cause AMT-California's investments backed by that institution
to lose value and affect the Portfolio's share price.
AMT-California also may invest in stand-by commitments, which may involve
certain expenses and risks, but such commitments are not expected to comprise
more than 5% of the Portfolio's net assets. AMT-California may commit up to
15% of its net assets to the purchase of when-issued securities. The Fund's
custodian will maintain, in a separate account of AMT-California, liquid high-
5
<PAGE>
grade debt securities having value equal to, or greater than, such when-issued
securities. The price of when-issued securities, which is generally expressed
in yield terms, is fixed at the time the commitment to purchase is made, but
delivery and payment for such securities takes place at a later time. Normally
the settlement date occurs from within ten days to one month after the pur-
chase of the issue. The value of when-issued securities may fluctuate prior to
their settlement, thereby creating an unrealized gain or loss to AMT-Califor-
nia.
Taxable Investments. The taxable investments in which AMT-California may in-
vest include obligations of the U.S. Government and its agencies, high quality
certificates of deposit and bankers' acceptances, prime commercial paper, and
repurchase agreements.
Other Fundamental Investment Policies. To reduce investment risk, AMT-Cali-
fornia may not invest more than 25% of its total assets in municipal securi-
ties the interest upon which is paid from revenues of similar-type projects;
may not invest more than 5% of its total assets in the securities of any one
issuer except the U.S. Government; may not invest 50% of its respective total
assets in as few as four issuers (but no more than 25% of total assets in any
one issuer); and may not purchase more than 10% of any class of the voting se-
curities of any one issuer except those of the U.S. Government.
PURCHASE AND REDEMPTION OF SHARES
OPENING ACCOUNTS
Instruct your Account Executive to use ATR or AMT-California in conjunction
with your brokerage account. There is a $250 minimum initial investment.
SUBSEQUENT INVESTMENTS
A. BY CHECK THROUGH STONE & YOUNGBERG
Mail or deliver your check or negotiable draft payable to Stone & Youngberg,
which will deposit it into the Fund(s). Please indicate your Stone & Youngberg
brokerage account number on the check or draft.
B. BY SWEEP
Stone & Youngberg has available an automatic "sweep" to the Fund(s) for its
customers' brokerage accounts. Proceeds from sale transactions, as well as
other credit balances in your Stone & Youngberg brokerage account, will be
swept into your money market fund daily.
C. CUSTOMER SERVICE DESK
Questions regarding purchases or sales of the Fund(s) can be answered by
contacting 1-800-447-8686.
REDEMPTIONS
A. BY CONTACTING YOUR ACCOUNT EXECUTIVE
Instruct your Account Executive to order a withdrawal from your fund account
and forward payment to you or your designee with a Stone & Youngberg check.
B. BY SWEEP
Stone & Youngberg's sweep arrangement moves money from your money market ac-
count to cover purchases in your Stone & Youngberg brokerage account.
C. BY CHECKWRITING
With this service, you may write checks made payable to any payee in the
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 located on the previous page of this pro-
spectus. There is no separate 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 pay-
ment. All check ordering must be handled through Stone & Youngberg.
6
<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 each Fund's shares is determined each business day at 12:00
Noon and 4:00 p.m. (New York time). The net asset value per share of a Fund is
calculated by taking the sum of the value of that Fund's investments (amor-
tized cost value is used for this purpose) and any cash or other assets, sub-
tracting liabilities, and dividing 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 Funds have 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.
During drastic economic or market developments, shareholders might have dif-
ficulty in reaching Alliance Fund Services, Inc. by telephone in which event
the shareholder should issue written instructions to Alliance Fund Services,
Inc. at the address shown in this prospectus. The Funds reserve the right to
suspend or terminate their telephone service at any time without notice. Nei-
ther the Funds nor the Adviser, or Alliance Fund Services, Inc. will be re-
sponsible for the authenticity of telephone requests to purchase or sell
shares. Alliance Fund Services, Inc. will employ reasonable procedures in or-
der to verify that telephone requests are genuine and could be liable for
losses arising from unauthorized transactions if it failed to do so. 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.
DAILY DIVIDENDS, OTHER DISTRIBUTIONS, TAXES. All net income of each 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 that Fund of record via automatic
investment in additional full and fractional shares of that Fund in each
shareholder's account. 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 assets less the
Fund's expenses applicable to that dividend period. Realized gains and losses
are reflected in its net asset value and are not included in net income.
Distributions to you out of tax-exempt interest income earned by AMT-Cali-
fornia is not subject to Federal income tax (other than the AMT). Any exempt-
interest dividends derived from interest on municipal securities subject to
the AMT will be a specific preference item for purposes of the Federal indi-
vidual and corporate AMT. Distributions to residents of California out of in-
come earned by AMT-California from California municipal securities are exempt
from California personal income taxes. Distributions out of taxable interest
income, other investment income, and short-term capital gains are taxable to
you as ordinary income and distributions of 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 of short and long-term capital gains,
if any, are normally made near year-end. Each year shortly after December 31,
the Funds will send you tax information stating the amount and type of all its
distributions for the year just ended.
THE ADVISER. Each Fund retains Alliance Capital Management L. P., 1345 Ave-
nue of the Americas, New York, NY 10105 under separate Advisory Agreements to
provide investment advice and, in general, to supervise its management and in-
vestment program, subject to the general control of the Trustees of each Fund.
For the fiscal
7
<PAGE>
year ended June 30, 1996, ATR and AMT-California each paid the Adviser an ad-
visory fee at an annual rate of .50 and .50 of 1%, respectively, of the aver-
age daily value of the respective Portfolio's net assets.
Under a Distribution Services Agreement (the "Agreement"), each Fund pays
the Adviser at a maximum annual rate of .25 of 1% of the Fund's aggregate av-
erage daily net assets. For the fiscal year ended June 30, 1996, ATR and AMT-
California each paid the Adviser a distribution services fee at an annual rate
of .01 and .24 of 1%, respectively, of the average daily value of the net as-
sets of each Portfolio. Substantially all such monies (together with signifi-
cant amounts from the Adviser's own resources) are paid by the Adviser to bro-
ker-dealers and other financial intermediaries for their distribution assis-
tance and to banks and other depository institutions for administrative and
accounting services provided to the Funds, with any remaining amounts being
used to partially defray other expenses incurred by the Adviser in distribut-
ing the Funds' shares. The Funds believe that the administrative services pro-
vided by depository institutions are permissible activities under present
banking laws and regulations and will take appropriate actions (which should
not adversely affect the Funds or their shareholders) in the future to main-
tain such legal conformity should any changes in, or interpretations of, such
laws or regulations occur.
The Adviser will reimburse each Fund to the extent that aggregate operating
expenses of that Fund (including the Adviser's fee and expenses incurred under
the Agreement) exceed 1% of its average daily net assets for any fiscal year.
CUSTODIAN, TRANSFER AGENT AND DISTRIBUTOR. State Street Bank and Trust Com-
pany, P.O. Box 1912, Boston, MA 02105, is the Funds' 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
Funds' Transfer Agent and Distributor, respectively.
FUND ORGANIZATION. Alliance Government Reserves (not offered by this pro-
spectus) and ATR are series of Alliance Government Reserves which is a diver-
sified open-end management investment company registered under the 1940 Act.
The Fund was reorganized as a Massachusetts business trust in October 1984,
having previously been a Maryland corporation since its formation in December
1978. AMT-California is a non-diversified series of Alliance Municipal Trust,
which is also an open-end management investment company registered under the
1940 Act consisting of such series and six other series not offered by this
prospectus. The Fund was reorganized as a Massachusetts business trust in
April 1985, having previously been a Maryland corporation since its formation
in January 1983. Each Fund's activities are supervised by its Trustees. Nor-
mally, shares of each series of Alliance Municipal Trust and Alliance Govern-
ment Reserves are entitled to one vote per share, and vote as a single series,
on matters that affect each 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 Trust-
ees.
REPORTS. You receive semi-annual and annual reports for your Fund as well as
a monthly summary of your account.
Since this prospectus sets forth information about all the Funds, it is the-
oretically possible that a Fund might be liable for any materially inaccurate
or incomplete disclosure in this prospectus concerning another Fund. Based on
the advice of counsel, however, the Funds believe that the potential liability
of each Fund with respect to the disclosure in this prospectus extends only to
the disclosure relating to that Fund.
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