<PAGE>
This is filed pursuant to Rule 497(e).
File Nos: 2-63315 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 in-
vestment objectives of safety, liquidity and maximum current in-
come (in the case of Alliance Municipal Trust-General, exempt from
Federal income taxes and, in the case of the California Portfolio,
exempt from Federal and state income taxes) to the extent consis-
tent with the first two objectives. Alliance Capital Reserves, Al-
liance Money Reserves, Alliance Government Reserves, Alliance
Treasury Reserves and the General Portfolio of Alliance Municipal
Trust are diversified. The California Portfolio of Alliance Munic-
ipal Trust is non-diversified, and are offered only to residents
of California. This prospectus sets forth the information about
each Fund that a prospective investor should know before invest-
ing. Please retain it for future reference.
An investment in a Fund is (i) neither insured nor guaranteed by
the U.S. Government; (ii) not a deposit or obligation of, or guar-
anteed 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 a Fund
will be able to maintain a stable net asset value of $1.00 per
share. The California Portfolio of Alliance Municipal Trust may
invest a significant portion of its assets in the securities of a
single issuer. Accordingly, an investment in such Portfolio may be
riskier than an investment in other types of money market funds.
A "Statement of Additional Information" for each Fund dated Octo-
ber 31, 1997, 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. A free copy
may be obtained by contacting your Account Executive.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SE-
CURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMIS-
SION 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 OF-
FENSE.
CONTENTS
-----------
<TABLE>
<S> <C>
Expense Information....................................................... 2
Financial Highlights...................................................... 3
Investment Objectives and Policies........................................ 6
Purchase and Redemption of Shares......................................... 12
Additional Information.................................................... 13
</TABLE>
ALCCWPR07
================================================================================
CW Asset Management Program
================================================================================
featuring...
. Alliance Capital Reserves
. Alliance Money Reserves
. Alliance Government Reserves
. Alliance Treasury Reserves
. Alliance Municipal Trust
- General Portfolio
- California Portfolio
Prospectus
October 31, 1997
[LETTERHEAD OF CROWELL, WEEDON & CO. APPEARS HERE]
<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 assets,
after expense ACR AMR AGR ATR AMT-GEN AMT-CA
reimbursement) --- --- --- --- ------- ------
<S> <C> <C> <C> <C> <C> <C>
Management Fees....................... .46% .48% .47% .50% .50% .50%
12b-1 Fees............................ .25 .25 .25 .25 .25 .25
Other Expenses........................ .29 .27 .28 .25 .25 .25
---- ---- ---- ---- ---- ----
Total Fund Operating Expenses......... 1.00% 1.00% 1.00% 1.00% 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>
ACR.......................................... $10 $32 $55 $122
AMR.......................................... $10 $32 $55 $122
AGR.......................................... $10 $32 $55 $122
ATR.......................................... $10 $32 $55 $122
AMT--General................................. $10 $32 $55 $122
AMT--California.............................. $10 $32 $55 $122
</TABLE>
The purpose of the foregoing table is to assist the investor in
understanding the various costs and expenses that an investor in the Fund will
bear directly and indirectly. The expenses listed in the table for AMR are net
of the contractual reimbursement by the Adviser described in this prospectus.
The expenses of such Portfolio, before expense reimbursements, would be:
Management Fees--.50%, 12b-1 Fees--.25%, Other Expenses--.27% and Total
Operating Expenses--1.02%. The example should not be considered a
representation of past or future expenses; actual expenses may be greater or
less than those shown.
2
<PAGE>
- --------------------------------------------------------------------------------
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>
YEAR ENDED JUNE 30,
ALLIANCE CAPITAL RESERVES ----------------------------------------------------------------------------------------
1997 1996 1995 1994 1993 1992 1991 1990 1989 1988
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of year....... $ 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.... .0452 .0471 .0447 .0255 .0266 .0438 .0662 .0782 .0788 .0625
Net realized gain on
investments............. -0- -0- -0- -0- .0003 .0013 -0- -0- -0- -0-
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Net increase in net
assets from operations.. .0452 .0471 .0447 .0255 .0269 .0451 .0662 .0782 .0788 .0625
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
LESS: DIVIDENDS AND
DISTRIBUTIONS
Dividends from net
investment income....... (.0452) (.0471) (.0447) (.0255) (.0266) (.0438) (.0662) (.0782) (.0788) (.0625)
Distributions from net
realized gains.......... -0- -0- -0- -0- (.0003) (.0013) -0- -0- -0- -0-
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Total dividends and
distributions........... (.0452) (.0471) (.0447) (.0255) (.0269) (.0451) (.0662) (.0782) (.0788) (.0625)
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Net asset value, end of
year.................... $ 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)...... 4.63% 4.82% 4.57% 2.58% 2.73% 4.61% 6.84% 8.14% 8.20% 6.45%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year
(in millions)........... $ 5,733 $ 4,804 $ 3,024 $ 2,417 $ 2,112 $ 1,947 $ 1,937 $ 1,891 $ 1,536 $ 1,392
Ratio to average net
assets of:
Expenses, net of waivers
and reimbursements..... 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% .97% .88% .95% .95%
Expenses, before waivers
and reimbursements..... 1.00% 1.00% 1.03% 1.03% 1.00% 1.00% .97% .98% 1.05% 1.05%
Net investment
income(b).............. 4.53% 4.69% 4.51% 2.57% 2.65% 4.37% 6.62% 7.82% 7.87% 6.26%
</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.
<TABLE>
<CAPTION>
FEBRUARY 16,
YEAR ENDED JUNE 30, 1989(A)
ALLIANCE MONEY RESERVES -------------------------------------------------------------- THROUGH
1997 1996 1995 1994 1993 1992 1991 1990 JUNE 30, 1989
------ ------ ------ ------ ------ ------ ------ ------ -------------
<S> <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
------ ------ ------ ------ ------ ------ ------ ------ ------
INCOME FROM INVESTMENT
OPERATIONS
Net investment income.. .045 .047 .045 .025 .027 .044 .066 .079 .033
------ ------ ------ ------ ------ ------ ------ ------ ------
LESS: DIVIDENDS
Dividends from net in-
vestment income....... (.045) (.047) (.045) (.025) (.027) (.044) (.066) (.079) (.033)
------ ------ ------ ------ ------ ------ ------ ------ ------
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)..... 4.64% 4.81% 4.50% 2.57% 2.71% 4.47% 6.87% 8.26% 9.18%(c)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of pe-
riod (in millions)..... $1,011 $ 755 $2,510 $1,795 $1,626 $1,412 $1,262 $ 993 $ 563
Ratio to average net as-
sets of:
Expenses, net of waiv-
ers and reimburse-
ments................. 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% .97% .89% .99%(c)
Expenses, before waiv-
ers and reimburse-
ments................. 1.06% 1.00% 1.04% 1.09% 1.04% 1.04% 1.03% .99% 1.09%(c)
Net investment
income(d)............. 4.55% 4.80% 4.53% 2.55% 2.67% 4.33% 6.56% 7.92% 9.16%(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.
3
<PAGE>
<TABLE>
<CAPTION>
ALLIANCE GOVERNMENT YEAR ENDED JUNE 30,
RESERVES ------------------------------------------------------------------------------------------
1997 1996 1995 1994 1993 1992 1991 1990 1989 1988
------ ------ ------- ------- ------- ------- ------- ------- ------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, begin-
ning of year........... $ 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... .0443 .0461 .0439 .0244 .0256 .0421 .0640 .0765 .0774 .0612
Net realized gain on in-
vestments.............. -0- -0- -0- -0- .0001 -0- -0- .0001 -0- -0-
------ ------ ------- ------- ------- ------- ------- ------- ------- ------
Net increase in net
assets from operations. .0443 .0461 .0439 .0244 .0257 .0421 .0640 .0766 .0774 .0612
------ ------ ------- ------- ------- ------- ------- ------- ------- ------
LESS: DIVIDENDS AND DIS-
TRIBUTIONS
Dividends from net in-
vestment income........ (.0443) (.0461) (.0439) (.0244) (.0256) (.0421) (.0640) (.0765) (.0774) (.0612)
Distributions from net
realized gains......... -0- -0- -0- -0- (.0001) -0- -0- (.0001) -0- -0-
------ ------ ------- ------- ------- ------- ------- ------- ------- ------
Total dividends and dis-
tributions............. (.0443) (.0461) (.0439) (.0244) (.0257) (.0421) (.0640) (.0766) (.0774) (.0612)
------ ------ ------- ------- ------- ------- ------- ------- ------- ------
Net asset value, end of
year................... $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)..... 4.53% 4.72% 4.48% 2.48% 2.60% 4.30% 6.61% 7.96% 8.04% 6.31%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year
(in millions).......... $3,762 $3,205 $2,514 $2,061 $1,783 $1,572 $1,070 $584 $522 $315
Ratio to average net as-
sets of:
Expenses, net of waivers
and reimbursements..... 1.00% 1.00% 1.00% 1.00% 1.00% .95% .89% .88% .88% .80%
Expenses, before waivers
and reimbursements..... 1.00% 1.01% 1.05% 1.04% 1.02% .97% .93% .98% .98% .90%
Net investment
income(b).............. 4.44% 4.60% 4.42% 2.46% 2.55% 4.17% 6.28% 7.65% 7.86% 6.13%
</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.
<TABLE>
<CAPTION>
SEPTEMBER 1, 1993(A)
YEAR ENDED YEAR ENDED YEAR ENDED THROUGH
ALLIANCE TREASURY JUNE 30, 1997 JUNE 30, 1996 JUNE 30, 1995 JUNE 30, 1994
RESERVES ------------- ------------- ------------- --------------------
<S> <C> <C> <C> <C>
Net asset value, begin-
ning of period......... $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------
INCOME FROM INVESTMENT
OPERATIONS
Net investment income... .0443 .0466 .0460 .0260
-------- -------- -------- -------
LESS: DIVIDENDS
Dividends from net in-
vestment income........ (.0443) (.0466) (.0460) (.0260)
-------- -------- -------- -------
Net asset value, end of
period................. $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== =======
TOTAL RETURNS
Total investment return
based on: net asset
value (b).............. 4.53% 4.77% 4.71% 3.18%(c)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year
(in thousands)......... $704,084 $700,558 $493,702 $80,720
Ratio to average net as-
sets of:
Expenses, net of waiv-
ers and reimburse-
ments................. .85% .81% .69% .28%(c)
Expenses, before waiv-
ers and reimburse-
ments................. 1.00% 1.05% 1.05% 1.28%(c)
Net investment income
(d)................... 4.43% 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.
4
<PAGE>
<TABLE>
<CAPTION>
GENERAL PORTFOLIO
ALLIANCE MUNICIPAL TRUST ------------------------------------------------------------------------------------------------
YEAR ENDED
YEAR ENDED JUNE 30, SIX MONTHS DECEMBER 31,
----------------------------------------------------------------- ENDED --------------
1997 1996 1995 1994 1993 1992 1991 1990 JUNE 30, 1989 1988 1987
------ ------ ------ ------ ------ ------ ------ ------ ------------- ------ ------
<S> <C> <C> <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 $ 1.00 $ 1.00
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
INCOME FROM INVESTMENT
OPERATIONS
Net investment income.. .028 .029 .028 .018 .020 .034 .046 .055 .030 .047 .041
Net realized and
unrealized loss on
investments........... -0- -0- (.003) -0- -0- -0- -0- -0- -0- -0- -0-
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Net increase in net
asset value from
operations............ .028 .029 .025 .018 .020 .034 .046 .055 .030 .047 .041
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
ADD: CAPITAL
CONTRIBUTIONS
Capital Contributed by
the Adviser........... -0- -0- .003 -0- -0- -0- -0- -0- -0- -0- -0-
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
LESS: DIVIDENDS
Dividends from net
investment income..... (.028) (.029) (.028) (.018) (.020) (.034) (.046) (.055) (.030) (.047) (.041)
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
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 $ 1.00
====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ======
TOTAL RETURNS
Total investment return
based on net asset
value(a).............. 2.81% 2.93% 2.83%(c) 1.81% 2.05% 3.48% 4.71% 5.65% 6.13%(b) 4.81% 4.18%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of
period (in millions).. $980 $1,148 $1,189 $1,134 $1,016 $914 $883 $798 $695 $633 $690
Ratio to average net
assets of:
Expenses, net of
waivers and
reimbursements........ .94% .95% .94% .92% .92% .92% .89% .83% .84%(b) .83% .80%
Expenses, before
waivers and
reimbursements........ .94% .95% .95% .94% .94% .95% .95% .93% .94%(b) .93% .90%
Net investment
income(d)............. 2.76% 2.90% 2.78% 1.80% 2.02% 3.40% 4.57% 5.50% 5.96%(b) 4.69% 4.08%
</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) Annualized.
(c) The capital contribution by the Adviser had no effect on total return.
(d) Net of expenses reimbursed or waived by the Adviser.
<TABLE>
<CAPTION>
CALIFORNIA PORTFOLIO
------------------------------------------------------------------------------
YEAR ENDED JUNE 30,
------------------------------------------------------------------------------
1997 1996 1995 1994 1993 1992 1991 1990
-------- -------- -------- -------- -------- -------- -------- --------
<S> <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
-------- -------- -------- -------- -------- -------- -------- --------
INCOME FROM
INVESTMENT
OPERATIONS
Net investment
income......... .027 .029 .027 .018 .020 .032 .043 .050
-------- -------- -------- -------- -------- -------- -------- --------
LESS: DIVIDENDS
Dividends from
net investment
income......... (.027) (.029) (.027) (.018) (.020) (.032) (.043) (.050
-------- -------- -------- -------- -------- -------- -------- --------
Net asset value,
end of period.. $ 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)....... 2.76% 2.91% 2.78% 1.83% 2.05% 3.26% 4.43% 5.17
RATIOS/SUPPLEMENTAL
DATA
Net assets, end
of period
(000's
omitted)....... $357,148 $297,862 $236,479 $219,673 $156,200 $121,317 $111,957 $104,097
Ratio to average
net assets of:
Expenses, net of
waivers and
reimbursements.. .93% .93% .93% .93% .93% .95% 1.00% .99
Expenses, before
waivers and
reimbursements.. .96% .94% 1.01% 1.02% 1.02% 1.05% 1.10% 1.09
Net investment
income(d)...... 2.73% 2.86% 2.75% 1.82% 2.01% 3.18% 4.32% 5.03
<CAPTION>
CALIFORNIA PORTFOLIO
---------------------------------
SIX MONTHS JUNE 2, 1988(A)
ENDED THROUGH
JUNE 30, 1989 DECEMBER 31, 1988
------------- -----------------
<S> <C> <C>
Net asset value,
beginning of
period.......... $ 1.00 $ 1.00
-------- --------
INCOME FROM
INVESTMENT
OPERATIONS
Net investment
income......... .029 .030
-------- --------
LESS: DIVIDENDS
Dividends from
net investment
income......... (.029) (.030)
-------- --------
Net asset value,
end of period.. $ 1.00 $ 1.00
======== ========
TOTAL RETURNS
Total investment
return based on
net asset
value(b)....... 6.02%(c) 5.20%(c)
RATIOS/SUPPLEMENTAL
DATA
Net assets, end
of period
(000's
omitted)....... $242,124 $103,390
Ratio to average
net assets of:
Expenses, net of
waivers and
reimbursements.. .92%(c) .89%(c)
Expenses, before
waivers and
reimbursements.. 1.02%(c) 1.10%(c)
Net investment
income(d)...... 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.
5
<PAGE>
---------------
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 ACR
dividends for the seven days ended June 30, 1997 amounted to an annualized
yield of 4.72%, equivalent to an effective yield of 4.83%. For AMR dividends
for the seven days ended June 30, 1997, after expense reimbursement, amounted
to an annualized yield of 4.72%, equivalent to an effective yield of 4.83%.
Absent such reimbursement, the annualized yield for such period would have
been 4.66%, equivalent to an effective yield of 4.77%. For AGR dividends for
the seven days ended June 30, 1997 amounted to an annualized yield of 4.62%,
equivalent to an effective yield of 4.73%. For ATR dividends for the seven
days ended June 30, 1997, after expense reimbursement, amounted to an
annualized yield of 4.60%, equivalent to an effective yield of 4.69%. Absent
such reimbursement, the annualized yield for such period would have been
4.45%, equivalent to an effective yield of 4.54%. Dividends for the General
Portfolio for the seven days ended June 30, 1997 amounted to an annualized
yield of 3.20%, equivalent to an effective yield of 3.25%. Dividends for the
California Portfolio for the seven days ended June 30, 1997, after expense
reimbursement, amounted to an annualized yield of 3.08%, equivalent to an
effective yield of 3.13%. Absent expense reimbursement, the annualized yield
for this period would have been 3.05%, equivalent to an effective yield of
3.10%.
- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVES AND POLICIES
- --------------------------------------------------------------------------------
The investment objective of Alliance Money Reserves is maximum current in-
come to the extent consistent with safety of principal and liquidity. The in-
vestment objectives of each of the other Funds are--in the following order of
priority--safety of principal, excellent liquidity and, to the extent consis-
tent with the first two objectives, maximum current income that is, in the
case of each Portfolio of Alliance Municipal Trust, exempt from income taxa-
tion to the extent described below. As a matter of fundamental policy, each
Fund pursues its objectives by maintaining a portfolio of high-quality money
market securities all of which at the time of investment have remaining matu-
rities of one year (397 days with respect to ATR) or less, which maturities
may extend to 397 days. While the fundamental policies described above and the
other fundamental investment policies described below may not be changed with-
out shareholder approval, each Fund may, upon notice to shareholders, but
without such approval, change nonfundamental investment policies or create ad-
ditional classes of shares in order to establish portfolios which may have
different investment objectives. There can be no assurance that any Fund's ob-
jectives will be achieved.
The Funds will comply with Rule 2a-7 under the Investment Company Act of
1940 (the "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. To
the extent that each Fund's limitations are more permissive than Rule 2a-7,
each Fund will comply with the more restrictive provisions of the Rule.
ALLIANCE CAPITAL RESERVES
The money market securities in which Alliance Capital Reserves ("ACR") in-
vests include: (1) marketable obligations of, or guaranteed by, the United
States Government, its agencies or instrumentalities (collectively, the "U.S.
Government"); (2) certificates of deposit, bankers' acceptances and interest-
bearing savings deposits issued or guaranteed by banks or savings and loan as-
sociations having total assets of more than $1 billion and which are members
of the Federal Deposit Insurance Corporation and certificates of deposit and
bankers' acceptances denominated in U.S. dollars and issued by U.S. branches
of
6
<PAGE>
foreign banks having total assets of at least $1 billion that are believed by
the Adviser to be of quality equivalent to that of other such instruments in
which ACR may invest; (3) commercial paper, including variable amount master
demand notes, of prime quality [i.e., rated A-1+ or A-1 by Standard & Poor's
Corporation ("Standard & Poor's") or Prime-1 by Moody's Investors Service,
Inc. ("Moody's") or, if not rated, issued by companies having outstanding debt
securities rated AAA or AA by Standard & Poor's, or Aaa or Aa by Moody's] and
participation interests in loans extended by banks to such companies; and (4)
repurchase agreements that are collateralized in full each day by liquid secu-
rities of the types listed above. These agreements are entered into with "pri-
mary dealers" (as designated by the Federal Reserve Bank of New York) in U.S.
Government securities or State Street Bank and Trust Company, ACR's Custodian,
and would create a loss to ACR if, in the event of a dealer default, the pro-
ceeds from the sale of the collateral were less than the repurchase price. ACR
may also invest in certificates of deposit issued by, and time deposits main-
tained at, foreign branches of domestic banks described in (2) above and prime
quality dollar-denominated commercial paper issued by foreign companies meet-
ing the criteria specified in (3) above. The money market securities in which
ACR invests may have variable or floating rates of interest ("variable rate
obligations") as permitted by Rule 2a-7 under the 1940 Act. Variable rate ob-
ligations have interest rates which are adjusted either at predesignated peri-
odic intervals or whenever there is a change in the market rate to which the
interest rate of the variable rate obligation is tied. Some variable rate ob-
ligations allow the holder to demand payment of principal at anytime, or at
specified intervals. ACR follows Rule 2a-7 with respect to the diversifica-
tion, quality, and maturity of variable rate obligations.
ACR may purchase restricted securities that are determined by the Adviser to
be liquid in accordance with procedures adopted by the Trustees of ACR, in-
cluding securities eligible for resale under Rule 144A under the Securities
Act of 1933 (the "Securities Act") and commercial paper issued in reliance
upon the exemption from registration in Section 4(2) of the Securities Act.
Restricted securities are securities subject to contractual or legal restric-
tions on resale, such as those arising from an issuer's reliance upon certain
exemptions from registration under the Securities Act.
ACR may also invest up to 10% of the value of its net assets in securities
as to which a liquid trading market does not exist, provided such investments
are consistent with ACR's investment objectives. Such securities may include
securities that are not readily marketable, such as certain securities that
are subject to legal or contractual restrictions on resale (other than those
restricted securities determined to be liquid as described above) and repur-
chase agreements not terminable within seven days. As to these securities, ACR
is subject to a risk that should ACR desire to sell them when a ready buyer is
not available at a price ACR deems representative of their value, the value of
ACR's net assets could be adversely affected.
ACR may invest in asset-backed securities that meet its existing diversifi-
cation, quality and maturity criteria. Asset-backed securities are securities
issued by special purpose entities whose primary assets consist of a pool of
loans or accounts receivable. The securities may be in the form of a benefi-
cial interest in a special purpose trust, limited partnership interest, or
commercial paper or other debt securities issued by a special purpose corpora-
tion. Although the securities may have some form of credit or liquidity en-
hancement, payments on the securities depend predominately upon collection of
the loans and receivables held by the issuer. It is ACR's current intention to
limit its investment in such securities to not more than 5% of its net assets.
OTHER FUNDAMENTAL INVESTMENT POLICIES
To maintain portfolio diversification and reduce investment risk, ACR may
not: (1) invest more than 25% of its assets in the securities of issuers con-
ducting their principal business activities in any one industry although there
is no such limitation with respect to U.S. Government securities or certifi-
cates of deposit, bankers' acceptances and interest bearing savings deposits;
(2) invest more than 5% of its assets in securities of any one issuer (except
the U.S. Government) although with respect to 25% of its total assets it may
invest without regard to such limitation; (3) invest more than 5% of its as-
sets in the securities of any issuer (except the U.S. Government) having less
than three years of continuous operation or purchase more than 10% of any
class of the outstanding securities of any issuer (except the U.S. Govern-
ment); (4) borrow money except from banks on a temporary basis or
7
<PAGE>
via entering into reverse repurchase agreements in aggregate amounts not ex-
ceeding 15% of its assets and to facilitate the orderly maturation and sale of
portfolio securities during any periods of abnormally heavy redemption re-
quests; (5) mortgage, pledge or hypothecate its assets except to secure such
borrowings; or (6) enter into repurchase agreements, if as a result thereof,
more than 10% of ACR's assets would be subject to repurchase agreements not
terminable within seven days.
As a matter of operating policy, fundamental policy number (2) would give
ACR the ability to invest, with respect to 25% of its assets, more than 5% of
its assets in any one issuer only in the event Rule 2a-7 is amended in the fu-
ture.
ALLIANCE MONEY RESERVES
The money market securities in which Alliance Money Reserves ("AMR") invests
include: (1) marketable obligations of, or guaranteed by, the United States
Government, its agencies or instrumentalities (collectively, the "U.S. Govern-
ment"); (2) certificates of deposit and bankers' acceptances issued or guaran-
teed by, or time deposits maintained at, banks or savings and loan associa-
tions (including foreign branches of U.S. banks or U.S. or foreign branches of
foreign banks) having total assets of more than $500 million; (3) commercial
paper, including variable amount master demand notes, of high quality [i.e.,
rated A-1 or A-2 by Standard & Poor's Corporation ("Standard & Poor's"),
Prime-1 or Prime-2 by Moody's Investors Service, Inc. ("Moody's"), Fitch-1 or
Fitch-2 by Fitch Investors Service, Inc., or Duff 1 or Duff 2 by Duff & Phelps
Inc. or, if not rated, issued by U.S. or foreign companies having outstanding
debt securities rated AAA, AA or A by Standard & Poor's, or Aaa, Aa or A by
Moody's] and participation interests in loans extended by banks to such compa-
nies; and (4) repurchase agreements that are collateralized in full each day
by liquid securities of the types listed above. Repurchase agreements may be
entered into only with those banks (including State Street Bank and Trust Com-
pany, AMR's Custodian) or broker-dealers ("vendors") that are eligible under
the procedures adopted by the Trustees for evaluating and monitoring the cred-
itworthiness of such vendors. A repurchase agreement would create a loss to
AMR if, in the event of a vendor default, the proceeds from the sale of the
collateral were less than the repurchase price. The money market securities in
which AMR invests may have variable or floating rates of interest ("variable
rate obligations") as permitted by Rule 2a-7 under the 1940 Act. Variable rate
obligations have interest rates which are adjusted either at predesignated pe-
riodic intervals or whenever there is a change in the market rate to which the
interest rate of the variable rate obligation is tied. Some variable rate ob-
ligations allow the holder to demand payment of principal at any time, or at
specified intervals. AMR follows Rule 2a-7 with respect to the diversifica-
tion, quality and maturity of variable rate obligations.
To the extent AMR purchases money market instruments issued by foreign enti-
ties, consideration will be given to the domestic marketability of such in-
struments, and possible interruptions of, or restrictions on, the flow of in-
ternational currency transactions.
AMR may purchase restricted securities that are determined by the Adviser to
be liquid in accordance with procedures adopted by the Trustees of AMR, in-
cluding securities eligible for resale under Rule 144A under the Securities
Act of 1933 (the "Securities Act") and commercial paper issued in reliance
upon the exemption from registration in Section 4(2) of the Securities Act.
Restricted securities are securities subject to contractual or legal restric-
tions on resale, such as those arising from an issuer's reliance upon certain
exemptions from registration under the Securities Act.
AMR may also invest up to 10% of the value of its net assets in securities
as to which a liquid trading market does not exist, provided such investments
are consistent with AMR's investment objectives. Such securities may include
securities that are not readily marketable, such as certain securities that
are subject to legal or contractual restrictions on resale (other than those
restricted securities determined to be liquid as described above) and repur-
chase agreements not terminable within seven days. As to these securities, AMR
is subject to a risk that should AMR desire to sell them when a ready buyer is
not available at a price AMR deems representative of their value, the value of
AMR's net assets could be adversely affected.
AMR may invest in asset-backed securities that meet its existing diversifi-
cation, quality and maturity criteria. Asset-backed securities are securities
issued by special
8
<PAGE>
purpose entities whose primary assets consist of a pool of loans or accounts
receivable. The securities may be in the form of a beneficial interest in a
special purpose trust, limited partnership interest, or commercial paper or
other debt securities issued by a special purpose corporation. Although the
securities may have some form of credit or liquidity enhancement, payments on
the securities depend predominately upon collection of the loans and receiv-
ables held by the issuer. It is AMR's current intention to limit its invest-
ment in such securities to not more than 5% of its net assets.
OTHER FUNDAMENTAL INVESTMENT POLICIES
To maintain portfolio diversification and reduce investment risk, AMR may
not: (1) invest more than 25% of its assets in the securities of issuers con-
ducting their principal business activities in any one industry although there
is no such limitation with respect to U.S. Government securities or certifi-
cates of deposit, bankers' acceptances and interest bearing savings deposits;
(2) invest more than 5% of its assets in the securities of any one issuer (ex-
cept the U.S. Government) although with respect to 25% of its total assets it
may invest without regard to such limitation; (3) invest more than 5% of its
assets in the securities of any issuer (except the U.S. Government) having
less than three years of continuous operation or purchase more than 10% of any
class of the outstanding securities of any issuer (except the U.S. Govern-
ment); (4) borrow money except from banks on a temporary basis or via entering
into reverse repurchase agreements in aggregate amounts not exceeding 15% of
its assets and to facilitate the orderly maturation and sale of portfolio se-
curities during any periods of abnormally heavy redemption requests; (5) mort-
gage, pledge or hypothecate its assets except to secure such borrowings; or
(6) enter into repurchase agreements, if as a result thereof, more than 10% of
AMR's assets would be subject to repurchase agreements not terminable within
seven days.
As a matter of operating policy, fundamental policy number (2) would give
AMR the ability to invest, with respect to 25% of its assets, more than 5% of
its assets in any one issuer only in the event Rule 2a-7 is amended in the fu-
ture.
ALLIANCE GOVERNMENT RESERVES
The securities in which Alliance Government Reserves ("AGR") invests are:
(1) marketable obligations of, or guaranteed by, the United States Government,
its agencies or instrumentalities (collectively, the "U.S. Government"), in-
cluding 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 entered into with "primary dealers" (as
designated by the Federal Reserve Bank of New York) in U.S. Government securi-
ties or State Street Bank and Trust Company, AGR's Custodian, and would create
a loss to AGR if, in the event of a dealer default, the proceeds from the sale
of the collateral were less than the repurchase price. AGR may commit up to
15% of its net assets to the purchase of when-issued U.S. Government securi-
ties, whose value may fluctuate prior to their settlement, thereby creating an
unrealized gain or loss to AGR. The money market securities in which AGR may
invest may have variable or floating rates of interest ("variable rate obliga-
tions") as permitted by Rule 2a-7 under the 1940 Act. Variable rate obliga-
tions have interest rates which are adjusted either at predesignated periodic
intervals or whenever there is a change in the market rate to which the inter-
est rate of the variable rate obligation is tied. Some variable rate obliga-
tions allow the holder to demand payment of principal at any time, or at spec-
ified intervals. AGR follows Rule 2a-7 with respect to the diversification,
quality and maturity of variable rate obligations.
OTHER FUNDAMENTAL INVESTMENT POLICIES
To maintain portfolio diversification and reduce investment risk, AGR 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
investments and AGR will not purchase any investment while any such borrowings
exist; (2) pledge, hypothecate or in any manner transfer, as security for in-
debtedness, its assets except to secure such
9
<PAGE>
borrowings; or (3) enter into repurchase agreements if, as a result thereof,
more than 10% of its assets would be subject to repurchase agreements not ter-
minable within seven days.
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 col-
lateral 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. 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 securi-
ties are fixed on the transaction date. The value of such securities may fluc-
tuate prior to their settlement, thereby creating an unrealized gain or loss
to ATR. The money market securities in which ATR may invest may have variable
or floating rates of interest ("variable rate obligations") as permitted by
Rule 2a-7 under 1940 Act. Variable rate obligations have interest rates which
are adjusted either at predesignated periodic intervals or whenever there is a
change in the market rate to which the interest rate of the variable rate ob-
ligation is tied. Some variable rate obligations allow the holder to demand
payment of principal at any time, or at specified intervals. ATR follows Rule
2a-7 with respect to the diversification, quality and maturity of variable
rate obligations.
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 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
investments and ATR will not purchase any investment while any such borrowings
exist; (2) pledge, hypothecate or in any manner transfer, as security for in-
debtedness, its assets except to secure such borrowings; or (3) enter into re-
purchase agreements, if as a result thereof, more than 10% of its assets would
be subject to repurchase agreements not terminable within seven days.
ALLIANCE MUNICIPAL TRUST
The investment objectives of each Portfolio 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 a Portfolio assumes a temporary defensive position, as a matter of funda-
mental policy, at least 80% of each Portfolio's total assets will be invested
in municipal securities (as opposed to the taxable investments described be-
low). Normally, substantially all of each Portfolio's income will be tax-ex-
empt as described below (e.g., for 1996, 100% of the income of each Portfolio
was exempt from Federal income taxes).
The General Portfolio seeks maximum current income that is exempt from Fed-
eral income taxes by investing principally in a diversified portfolio of high
quality municipal securities. Such income may be subject to state or local in-
come taxes.
The California Portfolio seeks maximum current income that is exempt from
Federal and California state personal income taxes by investing, as a matter
of fundamental policy, not less than 65% of its total assets in a portfolio of
high quality municipal securities issued by the State of California or its po-
litical subdivisions.
Each Portfolio 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,
10
<PAGE>
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 private 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) interest on all tax-exempt obligations
will be included in "adjusted current earnings" of corporations for AMT pur-
poses. Such bonds have provided, and may continue to provide, somewhat higher
yields than other comparable municipal securities. See below, "Daily Divi-
dends, Other Distributions, Taxes."
There can be no assurance that the Portfolios will achieve their investment
objectives. Potential investors in the California Portfolio 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 portfolios of the relevant state's issues with those of more diversified
portfolios, including other states' issues, before making an investment deci-
sion. The Adviser believes that by maintaining the California Portfolio's in-
vestments in liquid, short-term, high quality investments, the Portfolio is
largely insulated from the credit risks that exist on long-term municipal se-
curities of the relevant state. See the Statement of Additional Information
for a more detailed discussion of the financial condition of California.
Municipal Securities. The municipal securities in which each Portfolio 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.
A Portfolio 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 the Portfolio to maintain a stable net asset
value. Variable rate securities purchased may include participation interests
in industrial development bonds backed by letters of credit of Federal Deposit
Insurance Corporation member banks having total assets of more than $1 bil-
lion. Each Portfolio will comply with Rule 2a-7 with respect to its invest-
ments in variable rate obligations supported by letters of credit.
Each Portfolios' 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
Portfolios invest, 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 a Portfolio's investments backed by that institution to
lose value and affect a Portfolio's share price.
A Portfolio also may invest in stand-by commitments, which may involve cer-
tain expenses and risks, but such commitments are not expected to comprise
more than 5% of any Portfolio's net assets. A Portfolio may commit up to 15%
of its net assets to the purchase of when-issued securities. The Fund's custo-
dian will maintain, in a separate account of the respective Portfolio, liquid
high-grade debt securities having value equal to, or greater than, such when-
issued securities. The price of when-issued securities, which is generally ex-
pressed 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 purchase of the issue. The value of when-issued securities
11
<PAGE>
PURCHASE AND REDEMPTION OF SHARES
may fluctuate prior to their settlement, thereby creating an unrealized gain
or loss to a Portfolio.
Taxable Investments. The taxable investments in which each Portfolio 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 Investment Policies. No Portfolio of the Fund will invest more than
10% of its net assets in illiquid securities. As to these securities, a Port-
folio is subject to a risk that should the Portfolio desire to sell them when
a ready buyer is not available at a price the Portfolio deems representative
of their value, the value of the Portfolio's net assets could be adversely af-
fected. Illiquid securities may include securities that are not readily mar-
ketable.
The following investment policies are fundamental policies with respect to
each applicable Portfolio. To reduce investment risk, the General Portfolio
may not invest more than 25% of its total assets in municipal securities whose
issuers are located in the same state, and no Portfolio may invest more than
25% of its total assets in municipal securities the interest upon which is
paid from revenues of similar-type projects; a Portfolio may not invest more
than 5% of its total assets in the securities of any one issuer except the
U.S. Government, although (i) with respect to 25% of its total assets the Gen-
eral Portfolio may invest up to 10% per issuer, and (ii) the California Port-
folio may 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 a Portfolio may
not purchase more than 10% of any class of the voting securities of any one
issuer except those of the U.S. Government.
- --------------------------------------------------------------------------------
PURCHASE AND REDEMPTION OF SHARES
- --------------------------------------------------------------------------------
For more information on the purchase and redemption of each Fund's shares,
see such Fund's Statement of Additional Information.
The Funds offer a variety of shareholder services. For more information
about these services, please call your Account Executive.
OPENING ACCOUNTS
Instruct your Account Executive to use ACR, AMR, AGR, ATR, AMT-General or
AMT-CA in conjunction with your brokerage account. If no specific Fund is se-
lected, your cash will be invested in ACR.
SUBSEQUENT INVESTMENTS
A. BY CHECK THROUGH CROWELL, WEEDON & CO.
Mail or deliver your check or negotiable draft payable to "Crowell, Weedon &
Co." to your Account Executive who will deposit it into the Fund(s). Please
indicate your Fund account number on the check or draft.
B. BY SWEEP
Crowell, Weedon & Co. has available an automatic "sweep" for the Funds in
the operation of brokerage accounts for its customers. If you request the
sweep arrangement, every day all cash exceeding $10 which has come into your
brokerage account from interest and dividends paid on your securities held in
"street" name is moved into your account.
C. BY CONTACTING YOUR ACCOUNT EXECUTIVE
Cash that has come into your brokerage account from any source can be moved
into your Fund account by contacting your Account Executive specifically each
time that you know there is a cash balance.
REDEMPTIONS
A. BY CONTACTING YOUR ACCOUNT EXECUTIVE
Instruct your Account Executive to order a withdrawal from your Fund account
to purchase securities or to make payment to you with a Crowell, Weedon & Co.
check.
B. BY CHECKWRITING
With this service, you may write checks made payable to any payee in any
amount. Checks cannot be written for more than the principal balance (not in-
cluding any accrued dividends) in your account. First you must fill out the
Signature Card which you can obtain from you Ac-
12
<PAGE>
count Executive. 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. Contact your Account Executive for any applicable
charges.
C. BY SWEEP
Crowell, Weedon & Co.'s automatic "sweep" also moves money from your account
to cover securities purchased in your Crowell, Weedon & Co. securities
account.
- --------------------------------------------------------------------------------
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. 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 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. The Funds will employ reasonable procedures in order to verify that
telephone requests are genuine and could be liable for losses arising from un-
authorized 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 each Port-
folio of Alliance Municipal Trust are not subject to Federal income tax (other
than the AMT), but, in the case of the General Portfolio, may be subject to
state or local income taxes. Any exempt-interest dividends derived from inter-
est on municipal securities subject to the AMT will be a specific preference
item for purposes of the Federal individual and corporate AMT. Distributions
to residents of California out of income earned by the California Portfolio
from California
13
<PAGE>
municipal securities are exempt from California personal income taxes. Distri-
butions 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 irre-
spective 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 Avenue
of the Americas, New York, NY 10105 under separate Advisory Agreements to pro-
vide 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 year ended June 30, 1997, ACR, AMR, AGR, ATR, AMT-General and
AMT-CA each paid the Adviser an advisory fee at an annual rate of .47, .44,
.48, .49, .50 and .50 of 1%, respectively, of the average daily value of the
respective Portfolio's net assets.
The Adviser is a leading international investment manager, supervising cli-
ent accounts with assets as of September 30, 1997 totaling more than $217 bil-
lion (of which more than $81 billion represented the assets of investment com-
panies). The Adviser's clients are primarily major corporate employee benefit
plans, public employee retirement plans, insurance companies, banks, founda-
tions and endowment funds. The 54 registered investment companies managed by
the Adviser comprising 116 separate investment portfolios currently have over
two million shareholders. As of September 30, 1997, the Adviser was retained
as an investment manager of employee benefit fund assets for 28 of the Fortune
100 companies.
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, one of the largest life insurance companies in the United States,
which is a wholly-owned subsidiary of The Equitable Companies Incorporated, a
holding company controlled by AXA, a French insurance holding company. Certain
information concerning the ownership and control of Equitable by AXA is set
forth in each Fund's Statement of Additional Information under "Management of
the Fund."
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 period ended June 30, 1997, ACR, AMR, AGR,
ATR, AMT-General and AMT-CA each paid the Adviser a distribution services fee
at an annual rate of .25, .25, .25, .11, .25 and .22 of 1%, respectively, of
the average daily value of the net assets of each Portfolio. Substantially all
such monies (together with significant amounts from the Adviser's own re-
sources) are paid by the Adviser to broker-dealers and other financial inter-
mediaries for their distribution assistance 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 in-
curred by the Adviser in distributing the Funds' shares. The Funds believe
that the administrative services provided by depository institutions are per-
missible 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 maintain 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. The transfer agent
charges a fee for its services.
FUND ORGANIZATION. AGR and ATR are series of Alliance Government Reserves
which is a diversified open-end management investment company registered under
the 1940 Act. The Fund was reorganized as a Massachusetts business trust in
October 1984, having previ-
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ously been a Maryland corporation since its formation in December 1978. ACR
and AMR are series of Alliance Capital Reserves, a diversified open-end man-
agement investment company registered under the 1940 Act. The Fund was reorga-
nized as a Massachusetts business trust in October 1984, having previously
been a Maryland corporation since its formation in April 1978. AMT-General is
a diversified and AMT-CA is a non-diversified series of Alliance Municipal
Trust consisting of six other series not offered by this prospectus, which is
also an open-end management investment company registered under the 1940 Act.
The Fund was reorganized as a Massachusetts business trust in April 1985, hav-
ing previously been a Maryland corporation since its formation in January
1983. Each Fund's activities are supervised by its Trustees. Normally, shares
of each series of Alliance Municipal Trust, Alliance Government Reserves and
Alliance Capital 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. Massachusetts law does not require annual meetings of shareholders and
it is anticipated 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 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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