ALLIANCE GOVERNMENT RESERVES INC, 497, 1999-11-12

ALLIANCE GOVERNMENT RESERVES INC
497, 1999-11-12

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This is filed pursuant to Rule 497(c).
Files Nos. 002-63315 and 811-02889

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For more information about the Fund, the following documents are available upon
request:

o Annual/Semi-Annual Reports to Shareholders

The Fund's annual and semi-annual reports to shareholders contain additional
information on the Fund's investments.

o Statement of Additional Information (SAI)

The Fund has an SAI, which contains more detailed information about the Fund,
including its operations and investment policies. The Fund's SAI is incorporated
by reference into (and is legally part of) this Prospectus.

You may request a free copy of a current annual/semi-annual report or the SAI,
or make inquiries concerning the Fund, by contacting your broker or other
financial intermediary, or by contacting Alliance:

By mail: c/o Alliance Fund Services, Inc.
P.O. Box 1520
Secaucus, New Jersey 07096

By phone: For Information and Literature:
(800) 824-1916

Or you may view or obtain these documents from the Securities and Exchange
Commission:

In person: at the Securities and Exchange Commission's Public Reference Room in
Washington, D.C.

By phone: 202-942-8090 (for information on the operation of the public
reference room only)

By mail: Public Reference Section
Securities and Exchange Commission
Washington, DC 20549-0102
(duplicating fee required)

By electronic mail: [email protected] (duplicating fee required)

On the Internet: www.sec.gov

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Table of Contents
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RISK/RETURN SUMMARY............................... 2
FEES AND EXPENSES OF THE FUND..................... 3
OTHER INFORMATION ABOUT THE FUND'S
OBJECTIVES, STRATEGIES, AND RISKS................. 3
Investment Objectives and Strategies........... 3
Risk Considerations............................ 3
MANAGEMENT OF THE FUND............................ 5
PURCHASE AND SALE OF SHARES....................... 6
How The Fund Values Its Shares................. 6
How To Buy Shares.............................. 6
How To Sell Shares............................. 6
Other.......................................... 6
DIVIDENDS, DISTRIBUTIONS, AND TAXES............... 7
DISTRIBUTION ARRANGEMENTS......................... 7
GENERAL INFORMATION............................... 7
FINANCIAL HIGHLIGHTS.............................. 8
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File No. 811-2888
AGRPRO1199

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Alliance
Government
Reserves

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Prospectus
November 1, 1999

The Securities and Exchange Commission has not approved or disapproved these
securities or passed upon the adequacy of this Prospectus. Any representation to
the contrary is a criminal offense.

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The Fund's investment adviser is Alliance Capital Management L.P., a
global investment manager providing diversified services to institutions and
individuals through a broad line of investments including more than 100 mutual
funds.

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RISK/RETURN SUMMARY
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The following is a summary of certain key information about the Fund. You
will find additional information about the Fund, including a detailed
description of the risks of an investment in the Fund, after this summary.

Objectives: The investment objectives of the Fund are--in the following
order of priority--safety of principal, excellent liquidity and maximum current
income to the extent consistent with the first two objectives.

Principal Investment Strategy: The Fund is a "money market fund" that
seeks to maintain a stable net asset value of $1.00 per share. The Fund pursues
its objectives by maintaining a portfolio of high-quality, U.S. Government
(including its agencies and instrumentalities) and other U.S.
dollar-denominated money market securities.

Principal Risks: The principal risks of investing in the Fund are:

o Interest Rate Risk. This is the risk that changes in interest rates will
adversely affect the yield or value of the Fund's investments in debt
securities.

o Credit Risk. This is the risk that the issuer or guarantor of a debt
security will be unable or unwilling to make timely interest or principal
payments, or to otherwise honor its obligations. The degree of risk for a
particular security may be reflected in its credit rating. Credit risk includes
the possibility that any of the Fund's investments will have its credit ratings
downgraded.

Another important thing for you to note:

An investment in the Fund is not a deposit in a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency. Although the Fund seeks to preserve the value of your investment at
$1.00 per share, it is possible to lose money by investing in the Fund.

PERFORMANCE AND BAR CHART INFORMATION

The performance table shows the Fund's average annual total returns and
the bar chart shows the Fund's annual total returns. The table and the bar chart
provide an indication of the historical risk of an investment in the Fund by
showing:

o the Fund's average annual total returns for one, five, and 10 years; and

o changes in the Fund's performance from year to year over 10 years.

The Fund's past performance does not necessarily indicate how it will
perform in the future.

You may obtain current seven-day yield information for the Fund by calling
(800) 221-9513 or your financial intermediary.

PERFORMANCE TABLE

1 Year 5 Years 10 Years
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4.60% 4.41% 4.89%
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BAR CHART

[The following information was depicted as a bar chart in the printed material.]

8.51% 7.50% 5.39% 3.21% 2.36% 3.27% 5.02% 4.48% 4.67% 4.60%

89 90 91 92 93 94 95 96 97 98

Calendar Year End

During the period shown in the bar chart, the highest return for a quarter
was 2.16% (quarter ending June 30, 1989) and the lowest return for a quarter was
0.57% (quarter ending September 30, 1993).

2
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FEES AND EXPENSES OF THE FUND
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This table describes the fees and expenses that you may pay if you buy and hold
shares of the Fund.

Shareholder Transaction Expenses (fees paid directly from your investment)

None

Annual Fund Operating Expenses (expenses that are deducted from Fund assets) and
Example

The example is to help you compare the cost of investing in the Fund with the
cost of investing in other funds. It assumes that you invest $10,000 in the Fund
for the time periods indicated and then redeem all of your shares at the end of
those periods. It also assumes that your investment has a 5% return each year,
the Fund's operating expenses stay the same, and all dividends and distributions
are reinvested. Your actual costs may be higher or lower.

ANNUAL FUND OPERATING EXPENSES EXAMPLE*
- ----------------------------------------------- ------------------------
Management Fees........................ .47% 1 Year.......... $102
Distribution (12b-1) Fees.............. .25% 3 Years......... $318
Other Expenses......................... .30% 5 Years......... $552
---- 10 Years........ $1,225
Total Operating Expenses............... 1.02%
Waiver and/or Expense Reimbursement*... (.02)%
----
Net Expenses........................... 1.00%

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* Reflects Alliance's contractual waiver (which continues from year to year
unless changed by vote of the Fund's shareholders) of a portion of its advisory
fee and/or reimbursement of a portion of the Fund's operating expenses so that
the Fund's expense ratio does not exceed 1.00%.

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OTHER INFORMATION ABOUT THE FUND'S OBJECTIVES, STRATEGIES, AND RISKS
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This section of the Prospectus provides a more complete description of the
investment objectives and principal strategies and risks of the Fund.

Please note:

o Additional descriptions of the Fund's strategies and investments, as
well as other strategies and investments not described below, may be found in
the Fund's Statement of Additional Information or SAI.

o There can be no assurance that the Fund will achieve its investment
objectives.

Investment Objectives and Strategies

As a money market fund, the Fund must meet the requirements of Securities
and Exchange Commission Rule 2a-7. The Rule imposes strict requirements on the
investment quality, maturity and diversification of the Fund's investments.
Under that Rule, the Fund's investments must each have a remaining maturity of
no more than 397 days and the Fund must maintain an average weighted maturity
that does not exceed 90 days.

The Fund's investments may include:

o marketable obligations issued or guaranteed by the U.S. Government, its
agencies, or instrumentalities, including issues of the U.S. Treasury, such as
bills, certificates of indebtedness, notes, and bonds;

o variable rate obligations; and

o repurchase agreements that are fully collateralized.

The Fund may commit up to 15% of its net assets to the purchase of
when-issued U.S. Government securities.

Risk Considerations

The Fund's principal risks are interest rate risk and credit risk. Because
the Fund invests in short-term securities, a decline in interest rates will
affect the Fund's yields as these securities mature or are sold and the Fund
purchases new short-term securities with lower yields. Generally, an increase in
interest rates causes the value of a debt instrument to decrease. The change in
value for shorter-term securities is usually smaller than for securities with
longer maturities. Because the Fund invests in securities with short maturities
and seeks to maintain a

3
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stable net asset value of $1.00 per share, it is possible, though unlikely, that
an increase in interest rates would change the value of your investment.

Credit risk is the possibility that a security's credit rating will be
downgraded or that the issuer of the security will default (fail to make
scheduled interest and principal payments). The Fund invests in highly-rated
securities to minimize credit risk.

The Fund may invest up to 10% of its net assets in illiquid securities.
Investments in illiquid securities may be subject to liquidity risk, which is
the risk that, under certain circumstances, particular investments may be
difficult to sell at an advantageous price. Illiquid restricted securities also
are subject to the risk that the Fund may be unable to sell the security due to
legal or contractual restrictions on resale.

The Fund also is subject to management risk because it is an actively
managed portfolio. Alliance will apply its investment techniques and risk
analyses in making investment decisions for the Fund, but there is no guarantee
that its techniques will produce the intended result.

Year 2000: Many computer systems and applications that process
transactions use two-digit date fields for the year of a transaction, rather
than the full four digits. If these systems are not modified or replaced,
transactions occurring after 1999 could be processed as year "1900," which could
result in processing inaccuracies and inoperability at or after the year 2000.
The Fund and its major service providers, including Alliance, utilize a number
of computer systems and applications that have been either developed internally
or licensed from third-party suppliers. In addition, the Fund and its major
service providers, including Alliance, are dependent on third-party suppliers
for certain systems applications and for electronic receipt of information
critical to their business. Should any of the computer systems employed by the
Fund or its major service providers, including Alliance, fail to process Year
2000 related information properly, that could have a significant negative impact
on the Fund's operations and the services that are provided to the Fund's
shareholders. To the extent that the operations of issuers of securities held by
the Fund are impaired by the Year 2000 problem, the value of the Fund's shares
may be materially affected. In addition, for the Fund's investments in foreign
markets, it is possible that foreign companies and markets will not be as
prepared for Year 2000 as domestic companies and markets.

The Year 2000 issue is a high priority for the Fund and Alliance. During
1997, Alliance began a formal Year 2000 initiative which established a
structured and coordinated process to deal with the Year 2000 issue. As part of
its initiative, Alliance established a Year 2000 project office to manage the
Year 2000 initiative, focusing on both information technology and
non-information technology systems. The Year 2000 project office meets
periodically with the audit committee of the board of directors of Alliance
Capital Management Corporation, Alliance's general partner, and with Alliance's
executive management to review the status of the Year 2000 efforts. Alliance has
also retained the services of a number of consulting firms which have expertise
in advising and assisting with regard to Year 2000 issues. Alliance reports that
by June 30, 1998 it had completed its inventory and assessment of its domestic
and international computer systems and applications, identified mission critical
systems (those systems where loss of their function would result in immediate
stoppage or significant impairment to core business units) and nonmission
critical systems and determined which of these systems were not Year 2000
compliant. All third-party suppliers of mission critical computer systems and
nonmission critical systems applications have been contacted to verify whether
their systems and applications will be Year 2000 compliant and their responses
are being evaluated. Substantially all of those contacted have responded and
approximately 90% have informed Alliance that their systems and applications are
or will be Year 2000 compliant. All mission and nonmission critical systems
supplied by third parties have been tested with the exception of those third
parties not able to comply with Alliance's testing schedule. Alliance reports
that it expects that all testing will be completed before the end of 1999.

Alliance has remediated, replaced or retired all of its non-compliant
mission critical systems and applications that can affect the Fund. All
nonmission critical systems have been remediated. After each system has been
remediated, it is tested with 19XX dates to determine if it still performs its
intended business function correctly. Next, each system undergoes a simulation
test using dates occurring after December 31, 1999. Inclusive of the replacement
and retirement of some of its systems, Alliance has completed these testing
phases for 98% of mission critical systems and 100% of nonmission critical
systems. Integrated systems tests were conducted to verify that the systems
would continue to work together. Full integration testing of all mission
critical and nonmission

4
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critical systems is completed. Testing of interfaces with third-party suppliers
has begun and will continue throughout 1999. Alliance reports that it has
completed an inventory of its facilities and related technology applications and
has begun to evaluate and test these systems. Alliance reports that it
anticipates that these systems will be fully operable in the year 2000. Alliance
has deferred certain other planned information technology projects until after
the year 2000 initiative is completed. Such delay is not expected to have a
material adverse effect on Alliance's financial condition or results of
operations. Alliance, with the assistance of a consulting firm, is developing
Year 2000 specific contingency plans with emphasis on mission critical
functions. These plans seek to provide alternative methods of processing in the
event of a failure that is outside Alliance's control.

The estimated current cost to Alliance of the Year 2000 initiative ranges
from approximately $40 million to $45 million. These costs consist principally
of modification and testing and costs to develop formal Year 2000 specific
contingency plans. These costs, which will generally be expensed as incurred,
will be funded from Alliance's operations and the issuance of debt. Through June
30, 1999, Alliance had incurred approximately $36.0 million of costs related to
the Year 2000 initiative. At this time, management of Alliance believes that the
costs associated with resolving the Year 2000 issue will not have a material
adverse effect on Alliance's results of operations, liquidity or capital
resources.

There are many risks associated with Year 2000 issues, including the risks
that the computer systems and applications used by the Fund and its major
service providers, will not operate as intended and that the systems and
applications of third-party suppliers to the Fund and its service providers will
not be Year 2000 compliant. Likewise there can be no assurance the compliance
schedules outlined above will be met or that the actual cost incurred will not
exceed cost estimates. Should the significant computer systems and applications
used by the Fund or its major service providers, or the systems of their
important third-party suppliers, be unable to process date-sensitive information
accurately after 1999, the Fund and its service providers may be unable to
conduct their normal business operations and to provide shareholders with
required services. In addition, the Fund and its service providers may incur
unanticipated expenses, regulatory actions and legal liabilities. The Fund and
Alliance cannot determine which risks, if any, are most reasonably likely to
occur or the effects of any particular failure to be Year 2000 compliant.
Certain statements provided by Alliance in this section entitled "Year 2000", as
such statements relate to Alliance, are "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995. To the fullest
extent permitted by law, the foregoing Year 2000 discussion is a "Year 2000
Readiness Disclosure" within the meaning of the Year 2000 Information and
Readiness Disclosure Act, 15 U.S.C. Sec. 1 (1998).

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MANAGEMENT OF THE FUND
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The Fund's investment adviser is Alliance Capital Management L.P., 1345
Avenue of the Americas, New York, New York 10105. Alliance is a leading
international investment adviser managing client accounts with assets as of
September 30, 1999 totaling more than $317 billion (of which more than $143
billion represented assets of investment companies). As of September 30, 1999,
Alliance managed retirement assets for many of the largest public and private
employee benefit plans (including 28 of the nation's FORTUNE 100 companies),
for public employee retirement funds in 31 states, for investment companies,
and for foundations, endowments, banks and insurance companies worldwide. The
52 registered investment companies managed by Alliance, comprising 118 separate
investment portfolios, currently have more than 4.8 million shareholder
accounts.

Alliance provides investment advisory services and order placement
facilities for the Fund. For the fiscal year ended June 30, 1999, the Fund paid
Alliance .45% as a percentage of average daily net assets, net of any waivers.
(See the "Annual Fund Operating Expenses" at the beginning of the Prospectus for
more information about fee waivers.)

Alliance makes significant payments from its own resources, which include
the management fees paid by the Fund, to compensate broker-dealers, depository
institutions, or other persons for providing distribution assistance and
administrative services and to otherwise promote the sale of Fund shares,
including paying for the preparation, printing, and distribution of prospectuses
and sales literature or other promotional activities.

5
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PURCHASE AND SALE OF SHARES
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How The Fund Values Its Shares

The Fund's net asset value or NAV is expected to be constant at $1.00 per
share, although this price is not guaranteed. The NAV is calculated at 12:00
Noon and 4:00 p.m., Eastern time, on each Fund business day (i.e., each weekday
exclusive of days the New York Stock Exchange or the banks in Massachusetts are
closed).

To calculate NAV, the Fund's assets are valued and totaled, liabilities
subtracted, and the balance, called net assets, is divided by the number of
shares outstanding. The Fund values its securities at their amortized cost. This
method involves valuing an instrument at its cost and thereafter applying a
constant amortization to maturity of any discount or premium, regardless of the
impact of fluctuating interest rates on the market value of the investment.

How To Buy Shares

o Initial Investment

You may purchase the Fund's shares by instructing your Account Executive
to invest in the Fund in connection with your brokerage account.

You also may purchase the Fund's shares directly from Alliance Fund
Services, Inc., or AFS. To obtain an Application Form, please telephone AFS
toll-free at (800) 237-5822. You also may obtain information about the Form,
purchasing shares, or other Fund procedures by calling this number.

Minimum Investment Amounts
o Initial $1,000
o Subsequent $100
o Minimum Maintenance Amount $500

These minimums do not apply to shareholder ac counts maintained through
financial intermediaries, which may maintain their own minimums.

o Subsequent Investments

By Check:

Mail or deliver your check or negotiable draft made payable to your
brokerage firm to your Account Executive, who will deposit it into the Fund.
Please indicate your brokerage account number.

By Sweep:

Your brokerage firm may offer an automatic "sweep" for the Fund in the
operation of brokerage cash accounts for its customers. Contact your Account
Executive to determine if a sweep is available and what the sweep requirements
are.

How To Sell Shares

You may "redeem" your shares (i.e., sell your shares) on any Fund business
day by contacting your Account Executive. If you do not maintain your shares
though a financial intermediary and recently purchased shares by check or
electronic funds transfer, you cannot redeem your investment until the Fund is
reasonably satisfied the check or electronic funds transfer has cleared (which
may take up to 15 days).

You also may redeem your shares:

o By Sweep:

If your brokerage firm offers an automatic sweep arrangement, the sweep
will automatically transfer from your Fund account sufficient amounts to cover a
debit balance that occurs in your brokerage account for any reason.

o By Checkwriting:

With this service, you may write checks made payable to any payee. First,
you must fill out a signature card, which you may obtain from your Account
Executive. There is a charge for check reorders. 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. You cannot write checks
for more than the principal balance (not including any accrued dividends) in
your account.

Other

The Fund has two transaction times each Fund business day, 12:00 Noon and
4:00 p.m., Eastern time. Investments receive the full dividend for a day if
Federal funds or bank wire monies are received by State Street Bank before 4:00
p.m., Eastern time, on that day.

Redemption proceeds are normally wired the same business day if a
redemption request is received prior to 12:00 p.m., Eastern time. Redemption
proceeds are wired

6
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or mailed the same day 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. Shares do not earn dividends on the day a
redemption is effected.

The Fund offers a variety of shareholder services. For more information
about these services, telephone AFS at (800) 221-5672.

A transaction, service, administrative or other similar fee may be charged
by your financial broker-dealer, agent, financial representative or other
financial intermediary with respect to the purchase, sale or exchange of shares
made through these financial intermediaries. These financial intermediaries may
also impose requirements with respect to the purchase, sale or exchange of
shares that are different from, or in addition to, those imposed by the Fund.

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DIVIDENDS, DISTRIBUTIONS, AND TAXES
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The Fund's net income is calculated at 4:00 p.m., Eastern time, each
business day and paid as dividends to shareholders. The dividends are
automatically invested in additional shares in your account. These additional
shares are entitled to dividends on following days resulting in compounding
growth of income. The Fund expects that its distributions will primarily consist
of net income, or, if any, short-term capital gains as opposed to long-term
capital gains. For Federal income tax purposes, the Fund's dividend
distributions of net income (or short-term capital gains) will be taxable to you
as ordinary income. Any capital gains distributions may be taxable to you as
capital gains. The Fund's distributions also may be subject to certain state and
local taxes.

Each year shortly after December 31, the Fund will send you tax
information stating the amount and type of all of its distributions for the
year.

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DISTRIBUTION ARRANGEMENTS
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The Fund has adopted a plan under Securities and Exchange Commission Rule
12b-1 that allows it to pay asset-based sales charges or distribution and
service fees in connection with the distribution of its shares. The amount of
these fees is .25% as a percentage of aggregate average daily net assets.
Because these fees are paid out of the Fund's assets on an on-going basis, over
time these fees will increase the cost of your investment and may cost you more
than paying other types of sales fees.

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GENERAL INFORMATION
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During drastic economic or market developments, you might have difficulty
in reaching AFS by telephone, in which event you should issue written
instructions to AFS. AFS is not responsible for the authenticity of telephone
requests to purchase or sell shares. AFS will employ reasonable procedures to
verify that telephone requests are genuine and could be liable for losses
resulting from unauthorized transactions if it failed to do so. Dealers and
agents may charge a commission for handling telephone requests. The telephone
service may be suspended or terminated at any time without notice.

7
<PAGE>

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FINANCIAL HIGHLIGHTS
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The financial highlights table is intended to help you understand the
Fund's financial performance for the past five years. Certain information
reflects financial information for a single Fund share. The total return in the
table represents the rate that an investor would have earned (or lost) on an
investment in the Fund (assuming investment of all dividends and distributions).
The information has been audited by McGladrey & Pullen, LLP, the Fund's
independent auditors, whose report, along with the Fund's financial statements,
appears in the SAI, which is available upon request.

<TABLE>
<CAPTION>
Year Ended June 30
================================================================
1999 1998 1997 1996 1995
======= ======= ======= ======= =======
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period ................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------- ------- ------- -------
Income from Investment Operations
Net investment income .................................. .0419(a) .0463(a) .0443 .0461(a) .0439(a)
Net gains or losses on securities ...................... .0000 .0000 .0000 .0000 .0000
------- ------- ------- ------- -------
Total from investment operations ....................... .0419 .0463 .0443 .0461 .0439
------- ------- ------- ------- -------
Less: Distributions
Dividends .............................................. (.0419) (.0463) (.0443) (.0461) (.0439)
Distributions .......................................... .0000 .0000 .0000 .0000 .0000
------- ------- ------- ------- -------
Total distributions .................................... (.0419) (.0463) (.0443) (.0461) (.0439)
------- ------- ------- ------- -------
Net asset value, end of period ......................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======= ======= ======= ======= =======
Total Return
Total investment return based on net asset value (b) ... 4.27% 4.74% 4.53% 4.72% 4.48%
Ratios/Supplemental Data
Net assets, end of period (in millions) ................ $ 5,583 $ 4,909 $ 3,762 $ 3,205 $ 2,514
Ratio to average net assets of:
Expenses, net of waivers and reimbursements ......... 1.00% 1.00% 1.00% 1.00% 1.00%
Expenses, before waivers and reimbursements ......... 1.02% 1.01% 1.00% 1.01% 1.05%
Net investment income ............................... 4.18%(a) 4.63%(a) 4.44% 4.60%(a) 4.42%(a)
</TABLE>

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(a) Net of expenses reimbursed or waived by Alliance.

(b) Total investment return is calculated assuming an initial investment made
at 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.

8
<PAGE>

<PAGE>

This is filed pursuant to Rule 497(c).
Files Nos. 002-63315 and 811-02889

<PAGE>

[LOGO] ALLIANCE GOVERNMENT RESERVES
____________________________________________________________

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

STATEMENT OF ADDITIONAL INFORMATION
November 1, 1999

____________________________________________________________
TABLE OF CONTENTS

Page

Investment Objectives and Policies.........................
Investment Restrictions....................................
Management.................................................
Purchase and Redemption of Shares...........................
Additional Information......................................
Daily Dividends-Determination of Net Asset Value............
Taxes.......................................................
General Information.........................................
Appendix-Commercial Paper and Bond Ratings..................
Financial Statements........................................
Independent Auditor's Report.................................
_______________________________________________________________

This Statement of Additional Information is not a prospectus but
supplements and should be read in conjunction with the Fund's
current Prospectus dated November 1, 1999. A copy of the
Prospectus may be obtained by contacting the Fund at the address
or telephone number shown above.

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

<PAGE>

_______________________________________________________________

INVESTMENT OBJECTIVES AND POLICIES
_______________________________________________________________

The Fund is a series of Alliance Government Reserves
(the "Trust"). The Trust was reorganized in October 1984, as a
Massachusetts business trust, having previously been a Maryland
corporation since its formation in December 1978. The Fund is a
diversified, open-end investment company whose objectives are -
in the following order of priority - safety of principal,
excellent liquidity, and maximum current income to the extent
consistent with the first two objectives. There can be no
assurance, as is true with all investment companies, that the
Fund's objectives will be achieved. The Fund pursues its
objectives by maintaining a portfolio including the following
investments diversified by maturities not exceeding one year or
less (which maturities pursuant to Rule 2a-7 under the Investment
Company Act of 1940 as amended (the "Act"), may extend to 397
days or such greater length of time as may be permitted from time
to time pursuant to Rule 2a-7):

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

<PAGE>

Bank and Trust Company ("State Street Bank"), the Fund's
custodian. It is the Fund's current practice, which may be
changed at any time without shareholder approval, to enter into
repurchase agreements only with such primary dealers or State
Street Bank. For each repurchase agreement, the Fund requires
continual maintenance of the market value of the underlying
collateral in amounts equal to, or in excess of, the agreement
amount. While the maturities of the underlying collateral may
exceed 397 days, the term of the repurchase agreement is always
less than 397 days. In the event that a counterparty defaulted
on its repurchase obligation, the Fund might suffer a loss to the
extent that the proceeds from the sale of the collateral were
less than the repurchase price. If the counterparty became
bankrupt, the Fund might be delayed in selling the collateral.
Repurchase agreements often are for short periods such as one day
or a week, but may be longer. Repurchase agreements not
terminable within seven days will be limited to no more than 10%
of the Fund's assets.1 Pursuant to Rule 2a-7, a repurchase
agreement is deemed to be an acquisition of the underlying
securities provided that the obligation of the seller to
repurchase the securities from the money market fund is
collateralized fully (as defined in such Rule). Accordingly, the
counterparty of a fully collateralized repurchase agreement is
deemed to be the issuer of the underlying securities.

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

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

<PAGE>

acquiring the securities. To facilitate such acquisitions, the
Fund's Custodian will maintain, in a separate account of the
Fund, U.S. Government securities or other liquid high grade debt
securities having value equal to or greater than commitments held
by the Fund. Similarly, a separate account will be maintained to
meet obligations in respect of reverse repurchase agreements. On
delivery dates for such transactions, the Fund will meet its
obligations from maturities or sales of the securities held in
the separate account and/or from the available cash flow. If the
Fund, however, chooses to dispose of the right to acquire a when-
issued security prior to its acquisition, it can incur a gain or
loss. At the time the Fund makes the commitment to purchase a
security on a when-issued basis, it records the transaction and
reflects the value of the security in determining its net asset
value. No when-issued commitments will be made if, as a result,
more than 15% of the Fund's net assets would be committed.

Floating and Variable Rate Obligations. The Fund may
purchase floating and variable rate obligations, including
floating and variable rate demand notes and bonds. The Fund may
invest in variable and floating 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. The Fund may also purchase
floating and variable rate demand notes and bonds, which are
obligations ordinarily having stated maturities in excess of
13 months, but which permit the holder to demand payment of
principal and accrued interest at any time, or at specified
intervals not exceeding 397 days, in each case upon not more than
30 days' notice.

While there are many kinds of short-term securities used
by money market investors, the Fund, in keeping with its primary
investment objective of safety of principal, generally restricts
its portfolio to the types of investments listed above. Net
income to shareholders is aided both by the Fund's ability to
make investments in large denominations and by its efficiencies
of scale. Also, the Fund may seek to improve its income by
selling certain portfolio securities prior to maturity in order
to take advantage of yield disparities that occur in money
markets. The market value of the Fund's investments tends to
decrease during periods of rising interest rates and to increase
during intervals of falling rates.

Except as otherwise provided, the Fund's investment
policies are not designated "fundamental policies" within the
meaning of the Investment Company Act of 1940, as amended (the
"Act") and may, therefore, be changed by the Trustees of the

<PAGE>

Trust without a shareholder vote. However, the Fund will not
change its investment policies without contemporaneous written
notice to shareholders.

Rule 2a-7 under the Act. The Fund will comply with Rule
2a-7 under the Act, as amended from time to time, including the
diversification, quality and maturity limitations imposed by the
Rule. To the extent that the Fund's limitations are more
permissive than Rule 2a-7, the Fund will comply with the more
restrictive provisions of the Rule.

Currently, pursuant to Rule 2a-7, the Fund may invest
only in U.S. dollar-denominated "Eligible Securities" (as that
term is defined in the Rule) that have been determined by
Alliance Capital Management L.P. (the "Adviser") to present
minimal credit risks pursuant to procedures approved by the
Trustees. Generally, an Eligible Security is a security that
(i) has a remaining maturity of 397 days or less and (ii) is
rated, or is issued by an issuer with short-term debt outstanding
that is rated, in one of the two highest rating categories by two
nationally recognized statistical rating organizations ("NRSROs")
or, if only one NRSRO has issued a rating, by that NRSRO ("the
requisite NRSROs"). Unrated securities may also be Eligible
Securities if the Adviser determines that they are of comparable
quality to a rated Eligible Security pursuant to guidelines
approved by the Trustees. A description of the ratings of some
NRSROs appears in the Appendix attached hereto. Securities in
which the Fund invest may be subject to liquidity or credit
enhancements. These securities are generally considered to be
Eligible Securities if the enhancement or the issuer of the
enhancement has received the appropriate rating from the
requisite NRSROs.

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

<PAGE>

securities, or (B) five percent of its total assets in second
tier securities.

Senior Securities. The Fund will not issue senior
securities except as permitted by the Act or the rules,
regulations, or interpretations thereof.

_______________________________________________________________

INVESTMENT RESTRICTIONS
_______________________________________________________________

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

The Fund:

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

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

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

____________________

2. Which maturity, pursuant to Rule 2a-7, may extend to 397
days, or such greater length of time as may be permitted from
time to time pursuant to Rule 2a-7.

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

<PAGE>

if, as a result thereof, more than 5% of the Fund's assets would
be invested in repurchase agreements purchased from such seller;
and may not enter into any reverse repurchase agreements if, as a
result thereof, the Fund's obligations with respect to reverse
repurchase agreements would exceed 10% of the Fund's assets;

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

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

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

7. May not act as an underwriter of securities.

_______________________________________________________________

MANAGEMENT
_______________________________________________________________

Trustees and Officers

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

<PAGE>

Trustees

DAVE H. WILLIAMS4 , 67, Chairman, is Chairman of the
Board of Directors of Alliance Capital Management Corporation
("ACMC")5 , sole general partner of the Adviser with which he has
been associated since prior to 1994.

JOHN D. CARIFA4, 54, is the President, Chief Operating
Officer and a Director of ACMC with which he has been associated
since prior to 1994.

SAM Y. CROSS, 72, was, since prior to December 1993,
Executive Vice President of The Federal Reserve Bank of New York
and manager for foreign operations for The Federal Reserve
System. He is also a director of Fuji Bank and Trust Co. He is
Executive-In-Residence at the School of International and Public
Affairs, Columbia University. His address is 200 East 66th
Street, New York, New York 10021.

CHARLES H. P. DUELL, 61, is President of Middleton Place
Foundation with which he has been associated since prior to 1994.
He is also a Director of GRC International, Inc., a Trustee
Emeritus of the National Trust for Historic Preservation and
serves on the Board of Architectural Review, City of Charleston.
His address is Middleton Place Foundation, Ashley River Road,
Charleston, South Carolina 29414.

WILLIAM H. FOULK, JR., 67, is an Investment Adviser and
an Independent Consultant. He was formerly Senior Manager of
Barrett Associates, Inc., a registered investment adviser, with
which he had been associated since prior to 1994. His address is
2 Greenwich Plaza, Suite 100, Greenwich, CT 06830.

DAVID K. STORRS, 55, is President and Chief Executive
Officer of Alternative Investment Group, LLC (an investment
firm). He was formerly President of The Common Fund (investment
management for educational institutions) with which he had been
associated with since prior to 1994. His address is 65 South
Gate Road, Southport, Connecticut 06490.

____________________

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

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

<PAGE>

SHELBY WHITE, 61, is an author and financial journalist.
Her address is One Sutton Place South, New York, New York 10022.

Officers

RONALD M. WHITEHILL - President, 61, is a Senior Vice
President of ACMC and President of Alliance Cash Management
Services with which he has been associated since prior to 1994.

KATHLEEN A. CORBET - Senior Vice President, 39, is an
Executive Vice President of ACMC with which she has been
associated since prior to 1994.

DREW BIEGEL - Senior Vice President, 48 is a Vice
President of ACMC with which he has been associated since prior
to 1994.

JOHN R. BONCZEK - Senior Vice President, 39, is a Vice
President of ACMC with which he has been associated since prior
to 1994.

ROBERT I. KURZWEIL - Senior Vice President, 48, is a
Vice President of ACMC with which he has been associated since
prior to May 1994.

WAYNE D. LYSKI - Senior Vice President, 58, is an
Executive Vice President of ACMC with which he has been
associated since prior to 1994.

PATRICIA ITTNER - Senior Vice President, 48, is a Vice
President of ACMC with which she has been associated since prior
to 1994.

RAYMOND J. PAPERA - Senior Vice President, 43, is a
Senior Vice President of ACMC with which he has been associated
since prior to 1994.

KENNETH T. CARTY - Vice President, 38 is a Vice
President of ACMC with which he has been associated since prior
to 1994.

JOHN F. CHIODI, Jr. - Vice President, 33, is a Vice
President of ACMC with which he has been associated since prior
to 1994.

DORIS T. CILIBERTI - Vice President, 35, is an Assistant
Vice President of ACMC with which she has been associated since
prior to 1994.

<PAGE>

MARIA R. CONA - Vice President, 44, is an Assistant Vice
President of ACMC with which she has been associated since prior
to 1994.

WILLIAM J. FAGAN - Vice President, 37, is an Assistant
Vice President of ACMC with which he has been associated since
prior to 1994.

JOSEPH R. LASPINA - Vice President, 39, is an Assistant
Vice President of ACMC with which he has been associated since
prior to 1994.

LINDA N. KELLEY - Vice President, 39, is an Assistant
Vice President of ACMC with which she has been associated since
prior to 1994.

EDMUND P. BERGAN, Jr. - Secretary, 49, is a Senior Vice
President and the General Counsel of Alliance Fund Distributors,
Inc. ("AFD") and Alliance Fund Services, Inc. ("AFS") with which
he has been associated since prior to 1994.

MARK D. GERSTEN - Treasurer and Chief Financial Officer,
49, is a Senior Vice President of AFS and a Vice President of AFD
with which he has been associated since prior to 1994.

VINCENT S. NOTO - Controller, 34, is an Assistant Vice
President of AFS with which he has been associated since prior to
1994.

ANDREW L. GANGOLF - Assistant Secretary, 45, is a Vice
President and Assistant General Counsel of AFD with which he has
been associated since December 1994.

DOMENICK PUGLIESE - Assistant Secretary, 38, is a Vice
President and Assistant General Counsel of AFD with which he has
been associated since May 1995. Prior thereto, he was Vice
President and Counsel of Concord Holding Corporation since prior
to 1994.

EMILIE D. WRAPP - Assistant Secretary, 43, is a Vice
President and Assistant General Counsel of AFD with which she has
been associated since prior to 1994.

As of October 8, 1999, the Trustees and officers as a
group owned less than 1% of the shares of the Fund.

<PAGE>

The Fund does not pay any fees to, or reimburse expenses
of, its Trustees who are considered "interested persons" of the
Fund. The aggregate compensation paid by the Fund to each of the
Trustees during its fiscal year ended June 30, 1999, the
aggregate compensation paid to each of the Trustees during
calendar year 1998 by all of the funds to which the Adviser
provides investment advisory services (collectively, the
"Alliance Fund Complex") and the total number of registered
investment companies (and separate investment portfolios within
those companies) in the Alliance Fund Complex with respect to
which each of the Trustees serves as a director or trustee, are
set forth below. Neither the Fund nor any other fund in the
Alliance Fund Complex provides compensation in the form of
pension or retirement benefits to any of its directors or
trustees.

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

Dave H. Williams $-0- $-0- 6 15
John D. Carifa $-0- $-0- 50 116
Sam Y. Cross $2,343 $ 12,000 3 12
Charles H.P. Duell $2,343 $ 12,000 3 12
William H. Foulk, Jr. $2,343 $214,003 45 111
David K. Storrs $2,343 $ 12,000 3 12
Shelby White $2,343 $ 12,000 3 12

The Adviser

The Adviser, a Delaware limited partnership with
principal offices at 1345 Avenue of the Americas, New York, New
York 10105, has been retained under an investment advisory
agreement (the "Advisory Agreement") to provide investment advice
and, in general, to conduct the management and investment program
of the Fund under the supervision and control of the Fund's
Trustees.

<PAGE>

The Adviser is a leading global investment adviser
supervising client accounts with assets as of September 30, 1999
totaling $317.3 billion. The Adviser has eight offices in the
United States. Subsidiaries of the Adviser operate out of
offices in Bahrain, Bangalore, Calculta, Chennai, Istanbul,
Johannesburg, London, Luxembourg, Madrid, Mumbai, New Delhi,
Paris, Pune, Singapore, Sydney, Tokyo and Toronto, and affiliate
offices are located in Cairo, Hong Kong, Moscow, Sao Paulo,
Seoul, Vienna and Warsaw. The Adviser and its subsidiaries
employ over 2,000 persons worldwide.

The Adviser's clients are primarily major corporate
employee benefit fund, public employee retirement systems,
investment companies, foundations and endowment funds. There are
52 U.S.-registered investment companies managed by the Adviser,
comprising 118 separate investment portfolios. There are also
105 non-U.S. investment companies, comprising 127 separate
investment portfolios, managed by the Adviser and its affiliates.
These investment portfolios currently have approximately 4.8
million shareholder accounts, in aggregate. As of September 30,
1999, the Adviser was retained as an investment manager of
employee benefit fund assets for 28 of the Fortune 100 companies.

Alliance Capital Management Corporation ("ACMC") is the
general partner of the Adviser and a wholly owned subsidiary of
the The Equitable Life Assurance Society of the United States
("Equitable"). Equitable, one of the largest life insurance
companies in the United States, is the beneficial owner of an
approximately 55.4% partnership interest in the Adviser.
Alliance Capital Management Holding L.P. ("Alliance Holding")
owns an approximately 41.9% partnership interest in the Adviser.6
Equity interests in Alliance Holding are traded on the New York
Stock Exchange in the form of units. Approximately 98% of such
interests are owned by the public and management or employees of
the Adviser and approximately 2% are owned by Equitable.
Equitable is a wholly owned subsidiary of AXA Financial, Inc.
____________________

6. Until October 29, 1999, Alliance Holding served as the
investment adviser to the Fund. On that date, Alliance
Holding reorganized by transferring its business to the
Adviser. Prior thereto, the Adviser had no material business
operations. One result of the reorganization was that the
Advisory Agreement, then between the Fund and Alliance
Holding, was transferred to the Adviser by means of a
technical assignment, and ownership of Alliance Fund
Distributors, Inc. and Alliance Fund Services, Inc., the
Fund's principal underwriter and transfer agent,
respectively, also was transferred to the Advisers.

<PAGE>

("AXA Financial"), a Delaware corporation whose shares are traded
on the New York Stock Exchange. AXA Financial serves as the
holding company for the Adviser, Equitable and Donaldson, Lufkin
& Jenrette, Inc., an integrated investment and merchant bank. As
of June 30, 1999, AXA, a French insurance holding company, owned
approximately 58.2% of the issued and outstanding shares of
common stock of AXA Financial.

Under the Advisory Agreement, the Adviser provides
investment advisory services and order placement facilities for
the Fund and pays all compensation of Trustees of the Fund who
are affiliated persons of the Adviser. The Adviser or its
affiliates also furnish the Fund without charge with management
supervision and assistance and office facilities. Under the
Advisory Agreement, the Fund pays an advisory fee at an annual
rate of .50 of 1% of up to $1.25 billion of the average daily
value of the Fund's net assets, .49 of 1% of the next $.25
billion of such assets, .48 of 1% of the next $.25 billion of
such assets, .47 of 1% of the next $.25 billion of such assets,
.46 of 1% of the next $1 billion of such assets and .45 of 1% of
the average daily net assets of the Fund in excess of $3 billion.
The fee is accrued daily and paid monthly under the Advisory
Agreement. The Adviser will reimburse the Fund to the extent
that its net expenses (excluding taxes, brokerage, interest and
extraordinary expenses) exceed 1% of its average daily net assets
for any fiscal year. For the fiscal years ended June 30, 1997,
1998 and 1999 the Adviser received from the Fund, advisory fees
(net of reimbursement for the fiscal years ended June 30, 1998
and 1999) of $17,412,020, $19,694,085 (net of $528,930 of expense
reimbursement) and $25,589,419 (net of $1,123,076 of expense
reimbursement), respectively. In accordance with the
Distribution Services Agreement described below, the Fund may pay
a portion of advertising and promotional expenses in connection
with the sale of shares of the Fund. The Fund also pays for
printing of prospectuses and other reports to shareholders and
all expenses and fees related to registration and filing with the
Commission and with state regulatory authorities. The Fund pays
all other expenses incurred in its operations, including the
Adviser's management fees; custody, transfer and dividend
disbursing expenses; legal and auditing costs; clerical,
administrative accounting, and other office costs; fees and
expenses of Trustees who are not affiliated with the Adviser;
costs of maintenance of the Trust's existence; and interest
charges, taxes, brokerage fees, and commissions. As to the
obtaining of clerical and accounting services not required to be
provided to the Fund by the Adviser under the Advisory Agreement,

<PAGE>

the Fund may employ its own personnel. For such services, it
also may utilize personnel employed by the Adviser; if so done,
the services are provided to the Fund at cost and the payments
therefor must be specifically approved in advance by the
Trustees. The Fund paid to the Adviser a total of $164,000,
$167,000 and $169,000, respectively, for such services for the
fiscal years ended June 30, 1997, 1998 and 1999.

The Fund has made arrangements with certain broker-
dealers, including Pershing, Division of Donaldson, Lufkin &
Jenrette Securities Corporation ("Pershing"), an affiliate of the
Adviser, whose customers are Fund shareholders pursuant to which
payments are made to such broker-dealers performing recordkeeping
and shareholder servicing functions. Such functions may include
opening new shareholder accounts, processing purchase and
redemption transactions, and responding to inquiries regarding
the Fund's current yield and the status of shareholder accounts.
The Fund pays fully disclosed and omnibus broker dealers
(including Pershing) for such services. The Fund may also pay
for the electronic communications equipment maintained at the
broker-dealers' offices that permits access to the Fund's
computer files and, in addition, reimburses fully-disclosed
broker-dealers at cost for personnel expenses involved in
providing such services. All such payments must be approved or
ratified by the Trustees. For the fiscal years ended June 30,
1997, 1998 and 1999, the Fund paid such broker-dealers a total of
$2,146,522, $5,301,680 and $10,301,555, respectively.

The Advisory Agreement became effective on July 22,
1992. Continuance of the Advisory Agreement until June 30, 2000
was approved by the vote, cast in person by all the Trustees of
the Trust who neither were interested persons of the Trust nor
had any direct or indirect financial interest in the Agreement or
any related agreement, at a meeting called for that purpose on
June 21, 1999.

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

<PAGE>

exhibit willful misfeasance, bad faith, gross negligence, or
reckless disregard of its obligations.

Distribution Services Agreement

Rule 12b-1 under the Act permits an investment company
to directly or indirectly pay expenses associated with the
distribution of its shares in accordance with a duly adopted and
approved plan. The Fund has entered into a Distribution Services
Agreement (the "Agreement") which includes a plan adopted
pursuant to Rule 12b-1 (the "Plan") with AFD (the "Distributor"),
which applies to both series of the Trust. Pursuant to the Plan,
the Fund makes payments each month to AFD in an amount that will
not exceed, on an annualized basis, .25 of 1% of the Fund's
aggregate average daily net assets. In addition, under the
Agreement the Distributor makes payments for distribution
assistance and for administrative, accounting and other services
from its own resources which may include the management fee paid
by the Fund.

Payments under the Agreement are used in their entirety
for (i) payments to broker-dealers and other financial
intermediaries, including the Distributor and Donaldson, Lufkin &
Jenrette Securities Corporation and its Pershing Division,
affiliates of the Adviser, for distribution assistance and to
banks and other depository institutions for administrative and
accounting services, and (ii) otherwise promoting the sale of
shares of the Fund such as by paying for the preparation,
printing and distribution of prospectuses and other promotional
materials sent to existing and prospective shareholders and by
directly or indirectly purchasing radio, television, newspaper
and other advertising. In approving the Agreement the Trustees
determined that there was a reasonable likelihood that the
Agreement would benefit the Fund and its shareholders. During
the fiscal year ended June 30, 1999, the Fund made payments to
the Distributor for expenditures, under the Agreement in amounts
aggregating $14,312,497 which constituted .25 of 1% of the Fund's
average daily net assets during the period, and the Adviser made
payments from its own resources as described above aggregating
$17,618,657. Of the $31,931,154 paid by the Adviser and the Fund
under the Agreement, $1,159,000 was paid for advertising,
printing, and mailing of prospectuses to persons other than
current shareholders (the Fund's pro rata share was approximately
$519,497); and $30,772,154 was paid to broker-dealers and other
financial intermediaries for distribution assistance (the Fund's
pro rata share was approximately $13,793,000).

<PAGE>

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

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

The Agreement became effective on July 22, 1992.
Continuance of the Agreement until June 30, 2000 was approved by
the vote, cast in person by all the Trustees of the Fund who
neither were interested persons of the Fund nor had any direct or
indirect financial interest in the Agreement or any related
agreement, at a meeting called for that purpose on
June 21, 1999. The Agreement may be continued annually
thereafter if approved by a majority vote of the Trustees who
neither are interested persons of the Fund nor have any direct or
indirect financial interest in the Agreement or in any related
agreement, cast in person at a meeting called for that purpose.

All material amendments to the Agreement must be
approved by a vote of the Trustees, including a majority of the
disinterested Trustees, cast in person at a meeting called for
that purpose, and the Agreement may not be amended in order to
increase materially the costs which the Fund may bear pursuant to
the Agreement without the approval of a majority of the
outstanding shares of the Fund. The Agreement may also be
terminated at any time by a majority vote of the disinterested

<PAGE>

Trustees, or by a majority of the outstanding shares of the Fund
or by the Distributor. Any agreement with a qualifying broker-
dealer or other financial intermediary may be terminated without
penalty on not more than sixty days' written notice by a vote of
the majority of non-party Trustees, by a vote of a majority of
the outstanding shares of the Fund, or by the Distributor and
will terminate automatically in the event of its assignment.

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

_______________________________________________________________

PURCHASE AND REDEMPTION OF SHARES
_______________________________________________________________

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

Accounts Not Maintained Through Financial Intermediaries

Opening Accounts - New Investments

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

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

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

<PAGE>

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

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

3) Mail a completed Application Form to:

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

B. When Funds are Sent by Check

1) Fill out an Application Form.

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

Subsequent Investments

A. Investments by Wire (to obtain immediate credit)

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

B. Investments by Check

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

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

Investments Made by Check

Money transmitted by a check drawn on a member of the
Federal Reserve System is converted to Federal funds in one
business day following receipt and, thus, is then invested in the

<PAGE>

Fund. Checks drawn on banks which are not members of the Federal
Reserve System may take longer to be converted and invested. All
payments must be in United States dollars.

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

Redemptions

A. By Telephone

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

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

During periods of drastic economic or market
developments, such as the market break of October 1987, it is
possible that shareholders would have difficulty in reaching AFS
by telephone (although no such difficulty was apparent at any
time in connection with the 1987 market break). If a shareholder
were to experience such difficulty, the shareholder should issue
written instructions to AFS at the address shown on the cover of
this Statement of Additional Information. The Fund reserves the
right to suspend or terminate its telephone redemption service at
any time without notice. Neither the Fund nor the Adviser, or
AFS will be responsible for the authenticity of telephone
requests for redemptions that the Fund reasonably believes to be
genuine. The Fund will employ reasonable procedures in order to
verify that telephone requests for redemptions are genuine,
including among others, recording such telephone instructions and

<PAGE>

causing written confirmations of the resulting transactions to be
sent to shareholders. If the Fund did not employ such
procedures, it could be liable for losses arising from
unauthorized or fraudulent telephone instructions. Selected
dealers or agents may charge a commission for handling telephone
requests for redemptions.

B. By Checkwriting

With this service, you may write checks made payable to
any payee. Checks cannot be written for more than the principal
balance (not including any accrued dividends) in your account.
First, you must fill out the Signature Card which is with the
Application Form. If you wish to establish this checkwriting
service subsequent to the opening of your Fund account, contact
the Fund by telephone or mail. There is no separate charge for
the checkwriting service, except that State Street Bank may
impose charges for checks which are returned unpaid because of
insufficient funds or for checks upon which you have placed a
stop order. There is currently a $7.50 charge for check
reorders.

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 to State Street Bank for payment.

C. By Mail

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

_______________________________________________________________

ADDITIONAL INFORMATION
_______________________________________________________________

Shareholders maintaining Fund accounts through brokerage
firms and other institutions should be aware that such
institutions necessarily set deadlines for receipt of transaction

<PAGE>

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

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

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

Arrangements for Telephone Redemptions. If you wish to
use the telephone redemption procedure, indicate this on your
Application Form and designate a bank and account number to
receive the proceeds of your withdrawals. If you decide later

<PAGE>

that you wish to use this procedure, or to change instructions
already given, send a written notice to Alliance Fund Services,
Inc., P.O. Box 1520, Secaucus, New Jersey 07096-1520, with your
signature guaranteed by an institution which is an eligible
guarantor. For joint accounts, all owners must sign and have
their signatures guaranteed.

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

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

The Alliance Plans Division of Frontier Trust Company, a
subsidiary of The Equitable Life Assurance Society of the United
States, is the custodian under these plans. The custodian
charges a nominal account establishment fee and a nominal annual
maintenance fee. A portion of such fees is remitted to AFS to
compensate that organization for services rendered to retirement
plan accounts maintained with the Fund.

Periodic Distribution Plans. Without affecting your
right to use any of the methods of redemption described above, by
checking the appropriate boxes on the Application Form, you may
elect to participate additionally in the following plans without
any separate charge. Under the Income Distribution Plan you
receive monthly payments of all the income earned in your Fund
account, with payments forwarded by check or electronically via
the Automated Clearing House ("ACH") network shortly after the
close of the month. Under the Systematic Withdrawal Plan, you
may request payments by check or electronically via the ACH
network in any specified amount of $50 or more each month or in
any intermittent pattern of months. If desired, you can order,

<PAGE>

via a signature-guaranteed letter to the Fund, such periodic
payments to be sent to another person. Shareholders wishing
either of the above plans electronically through the ACH network
should write or telephone the Fund or AFS at (800) 221-5672.

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

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

DAILY DIVIDENDS--DETERMINATION OF NET ASSET VALUE
_______________________________________________________________

All net income of the Fund is determined after the close
of each business day, currently 4:00 p.m. Eastern time (and at
such other times as the Trustees may determine) and is paid
immediately thereafter pro rata to shareholders of record via
automatic investment in additional full and fractional shares in

<PAGE>

each shareholder's account at the rate of one share for each
dollar distributed. As such additional shares are entitled to
dividends on following days, a compounding growth of income
occurs.

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

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

The Fund maintains procedures designed to maintain, to
the extent reasonably possible, the price per share as computed
for the purpose of sales and redemptions at $1.00. Such
procedures include review of the Fund's portfolio holdings by the
Trustees to the extent required by Rule 2a-7 under the Act at
such intervals as they deem appropriate to determine whether and
to what extent the net asset value of the Fund calculated by
using available market quotations or market equivalents deviates
from net asset value based on amortized cost. There can be no
assurance, however, that the Fund's net asset value per share
will remain constant at $1.00.

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

<PAGE>

_______________________________________________________________

TAXES
_______________________________________________________________

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

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

_______________________________________________________________

GENERAL INFORMATION
_______________________________________________________________

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

<PAGE>

The Fund has no obligations to enter into transactions
in portfolio securities with any dealer, issuer, underwriter or
other entity. In placing orders, it is the policy of the Fund to
obtain the best price and execution for its transactions. Where
best price and execution may be obtained from more than one
dealer, the Adviser may, in its discretion, purchase and sell
securities through dealers who provide research, statistical and
other information to the Adviser. Such services may be used by
the Adviser for all of its investment advisory accounts and,
accordingly, not all such services may be used by the Adviser in
connection with the Fund. The supplemental information received
from a dealer is in addition to the services required to be
performed by the Adviser under the Advisory Agreement, and the
expenses of the Adviser will not necessarily be reduced as a
result of the receipt of such information. During the fiscal
years ended June 30, 1997, 1998 and 1999, the Fund paid no
brokerage commissions.

Capitalization. All shares of the Fund, when issued,
are fully paid and non-assessable. The Trustees are authorized
to reclassify and issue any unissued shares to any number of
additional classes or series without shareholder approval.
Accordingly, the Trustees, in the future, for reasons such as the
desire to establish one or more additional portfolios with
different investment objectives, policies or restrictions, may
create additional classes or series of shares. Any issuance of
shares of another class would be governed by the Act and the law
of the Commonwealth of Massachusetts. If shares of another class
were issued in connection with the creation of a second
portfolio, each share of either portfolio would normally be
entitled to one vote for all purposes. Generally, shares of both
portfolios would vote as a single series for the election of
Trustees and on any other matter that affected both portfolios in
substantially the same manner. As to matters affecting each
portfolio differently, such as approval of the Advisory Agreement
and changes in investment policy, shares of each portfolio would
vote as separate classes. Certain procedures for the removal by
shareholders of trustees of investment trusts, such as the Fund,
are set forth in Section 16(c) of the Act.

At October 8, 1999, there were 6,071,512,853 shares of
beneficial interest of the Fund outstanding. To the knowledge of
the Fund the following persons owned of record and no person
owned beneficially, 5% or more of the outstanding shares of the
Portfolio as of October 8, 1999:

<PAGE>

No. of % of
Name and Address Shares Class

Pershing as Agent 1,178,462,293 19%
Omnibus Account for
Exclusive Benefit of Customers
1 Pershing Plaza
Jersey City, NJ 07399-0002

Pershing as Agent 4,239,427,399 70%
Omnibus Account for
Exclusive Benefit of Customers
1 Pershing Plaza
Jersey City, NJ 07399-0002

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

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

Accountants. An opinion relating to the Fund's
financial statements is given herein by McGladrey & Pullen, LLP,
New York, New York, independent auditors for the Fund. Effective
September 25, 1999, the Fund's auditors for the fiscal year
ending June 30, 2000 are PricewaterhouseCoopers LLP.

Yield Quotations. Advertisements containing yield
quotations for the Fund may from time to time be sent to
investors or placed in newspapers, magazines or other media on
behalf of the Fund. These advertisements may quote performance

<PAGE>

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

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

The Fund's yield for the seven-day period ended June 30,
1999 was 4.04% which is the equivalent of a 4.12% compounded
effective yield. Absent such reimbursement, the annualized yield
for such period would have been 4.02%, equivalent to an effective
yield of 4.10%. Current yield information for the Fund can be
obtained by a recorded message by telephoning toll-free at
(800) 221-9513.

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

<PAGE>

_______________________________________________________________

REPORT OF INDEPENDENT AUDITORS AND FINANCIAL STATEMENTS
______________________________________________________________

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

Alliance
Government
Reserves

Alliance Capital [LOGO](R)

Annual Report
June 30, 1999

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

<PAGE>

STATEMENT OF NET ASSETS
June 30, 1999 Alliance Government Reserves
================================================================================

Principal
Amount
(000) Security Yield Value
- --------------------------------------------------------------------------------

U.S. GOVERNMENT
AGENCIES-84.2%
FEDERAL HOME
LOAN MORTGAGE
CORP.-37.9%
$ 160,000 7/13/99................. 4.78% $ 159,748,267
94,000 8/23/99................. 4.79 93,348,188
45,500 7/09/99................. 4.80 45,451,871
91,000 8/10/99................. 4.80 90,522,756
94,000 8/13/99................. 4.80 93,470,049
102,500 8/20/99................. 4.80 101,828,055
69,500 7/06/99................. 4.81 69,454,149
94,000 9/13/99................. 4.81 93,089,924
53,395 7/06/99................. 4.83 53,359,663
46,000 7/09/99................. 4.83 45,951,444
74,000 7/14/99................. 4.83 73,871,733
8,500 7/16/99................. 4.83 8,483,142
25,500 7/01/99................. 4.84 25,500,000
100,000 9/10/99................. 4.84 99,065,167
91,406 7/09/99................. 4.85 91,309,211
41,500 8/06/99................. 4.85 41,302,668
70,000 10/01/99................ 4.86 69,152,067
90,500 7/09/99................. 4.87 90,402,260
140,000 9/02/99................. 4.97 138,789,700
100,000 9/15/99................. 5.03 98,950,778
100,000 9/16/99................. 5.03 98,936,972
30,000 7/23/99................. 5.05 29,907,783
89,000 8/03/99................. 5.06 88,588,820
18,000 9/17/99................. 5.07 17,804,610
42,500 9/23/99................. 5.08 42,002,183
35,000 9/10/99................. 5.09 34,652,790
66,500 9/10/99................. 5.12 65,835,055
30,000 9/09/99................. 5.13 29,703,667
128,000 9/23/99................. 5.13 126,485,760
--------------
2,116,968,732
--------------
FEDERAL HOME
LOAN BANK-19.2%
25,000 4.75%, 7/13/99.......... 4.87 24,960,417
18,000 4.82%, 8/12/99 FRN...... 5.33 17,989,519
36,000 4.95%, 2/17/00.......... 5.07 35,973,571
57,500 4.95%, 2/18/00.......... 5.07 57,457,604
154,000 5.00%, 2/10/00.......... 5.00 153,997,238
10,000 5.02%, 3/03/00.......... 5.03 9,997,900
20,000 5.03%, 7/23/99.......... 5.05 19,938,522
30,000 5.03%, 2/25/00.......... 5.00 29,990,767
35,000 5.05%, 3/03/00.......... 5.15 34,995,799
64,000 5.05%, 3/03/00.......... 5.05 64,000,000
96,400 5.10%, 3/03/00.......... 5.17 96,366,412
91,000 5.10%, 5/17/00.......... 5.17 90,947,325
41,000 5.14%, 3/17/00.......... 5.12 41,000,000
91,000 5.15%, 5/19/00.......... 5.25 90,931,737
91,000 5.16%, 3/08/00.......... 5.23 90,953,195
120,000 5.30%, 8/18/99 FRN...... 5.35 119,992,110
91,100 5.41%, 6/14/00.......... 5.45 91,068,206
--------------
1,070,560,322
--------------
STUDENT LOAN
MARKETING
ASSOCIATION-15.6%
84,000 5.48%, 2/14/00 FRN...... 5.54 83,969,178
140,000 5.50%, 12/03/99 FRN..... 5.54 139,976,219
184,000 5.51%, 2/04/00 FRN...... 5.59 183,978,493
189,000 5.53%, 11/24/99 FRN..... 5.56 188,977,320
84,000 5.57%, 9/30/99 FRN...... 5.57 84,000,000
189,000 5.58%, 11/09/99 FRN..... 5.61 188,959,979
--------------
869,861,189
--------------
FEDERAL NATIONAL
MORTGAGE
ASSOCIATION-11.1%
18,000 4.32%, 9/22/99 FRN...... 5.17 17,966,600
29,237 4.74%, 9/22/99.......... 4.85 28,917,488
27,700 4.76%, 7/30/99.......... 4.84 27,593,786
99,500 4.76%, 9/17/99.......... 4.88 98,473,823
176,000 5.00%, 7/20/99.......... 5.04 175,535,556
90,200 5.00%, 5/05/00 MTN...... 5.10 90,111,663
40,000 5.01%, 9/22/99.......... 5.07 39,537,967
50,000 5.03%, 7/20/99.......... 5.04 49,867,264
63,900 5.04%, 4/06/00 MTN...... 5.10 63,863,092
31,000 5.09%, 12/08/99......... 5.21 30,298,711
--------------
622,165,950
--------------
FEDERAL FARM
CREDIT BANK-0.4%
6,000 4.87%, 9/01/99.......... 4.98 5,998,556
14,000 5.43%, 8/02/99 MTN...... 4.96 14,004,172
--------------
20,002,728
--------------
Total U.S. Government
Agencies
(amortized cost
$4,699,558,921)......... 4,699,558,921
--------------

1
<PAGE>

STATEMENT OF NET ASSETS (continued) Alliance Government Reserves
================================================================================

Principal
Amount
(000) Security Yield Value
- --------------------------------------------------------------------------------

REPURCHASE AGREEMENTS-17.2%
ABN Amro
$ 245,000 4.90%, dated 6/30/99,
due 7/01/99 in the
amount of $245,033,347
(cost $245,000,000;
collateralized by
$100,000,000 FHLMC,
6.18%, 6/14/02,
value $99,742,725,
$100,000,000 FFCB 31331H,
4.77%, 8/02/99,
value $100,695,628 and
$49,987,000 FMC
Discount Note, 9/09/99,
value $49,404,214)...... 4.90% $ 245,000,000
Lehman Brothers, Inc.
50,000 5.00%, dated 6/30/99,
due 7/01/99 in the
amount of $50,006,944
(cost $50,000,000;
collateralized by
$58,447,000 FNMA 15 Year
8.00%, 3/01/11,
value $26,537,561 and
$26,099,363 FHLMC
Gold PC 15 Year,
6.00%, 5/01/14,
value $25,035,475)...... 5.00 50,000,000
Paine Webber, Inc.
245,000 5.02%, dated 6/30/99,
due 7/08/99 in the
amount of $245,273,311
(cost $245,000,000;
collateralized by
$20,931,993 GNMA I 780947,
value $23,661,174,
$40,000,000 GNMA I 780886,
value $37,913,361,
$18,889,426 FHLMC C25626,
value $18,651,844,
$28,239,000 FNMA 190635,
value $15,055,165,
$30,000,000 FNMA 313819,
value $23,660,594,
$30,000,000 FNMA 413213,
value $27,950,982,
$18,748,000 GNMA I 780886,
value $14,338,833,
$50,000,000 FNMA 313294,
value $31,897,294,
$50,000,000 FNMA 252571,
value $50,000,000 and
$49,993,974 FNMA 303295,
value $13,360,300) (a).. 5.02 245,000,000
Paribas Corp.
100,000 5.00%, dated 6/30/99,
due 7/01/99 in the
amount of $100,013,889
(cost $100,000,000;
collateralized by
$50,000,000 FFCB,
4.875%, 9/01/99,
value $50,147,747 and
$51,855,000 FHLB,
5.48%, 6/21/00,
value $51,837,647)...... 5.00 100,000,000
Prudential Securities, Inc.
245,000 4.95%, dated 6/30/99,
due 7/07/99 in the
amount of $245,033,688
(cost $245,000,000;
collateralized by
$44,705,000 FNMA 323436,
6.00%, 11/01/28
value $40,834,053,
$99,487,938 FNMA 323362,
6.00%, 11/01/28,
value $90,840,049,
$135,938,292 FNMA 323549,
7.50%, 10/01/28,
value $119,721,736 and
$49,704,000 FNMA 323461,
7.50%, 10/01/13,
value $38,983,143)...... 4.95 245,000,000
State Street Bank &
Trust Co.
20,000 4.65%, dated 6/30/99,
due 7/01/99 in the
amount of $20,002,583
(cost $20,000,000;
collateralized by
$20,275,000
U.S. Treasury Note,
5.00%, 2/28/01,
value $20,402,003)...... 4.65 20,000,000

2
<PAGE>

Alliance Government Reserves
================================================================================

Principal
Amount
(000) Security Yield Value
- --------------------------------------------------------------------------------

State Street Bank &
Trust Co.
$ 55,100 4.80%, dated 6/30/99,
due 7/01/99 in the
amount of $55,107,347
(cost $55,100,000;
collateralized by
$55,855,000
U.S. Treasury Note,
5.00%, 2/28/01,
value $56,204,876)...... 4.80% $ 55,100,000
--------------

Total Repurchase
Agreements
(amortized cost
$960,100,000)........... 960,100,000
--------------

TOTAL INVESTMENTS-101.4%
(amortized cost
$5,659,658,921)......... 5,659,658,921
Other assets less
liabilities-(1.4%)...... (76,593,224)
--------------

NET ASSETS-100%
(offering and redemption
price of $1.00 per share;
5,583,900,617 shares
outstanding)............ 5,583,065,697
==============

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

(a) Repurchase agreements which are terminable within 7 days.

Glossary of Terms:

FRN Floating Rate Note
FFCB Federal Farm Credit Bank
FHLMC Federal Home Loan Mortgage Corporation
FNMA Federal National Mortgage Association
GNMA Government National Mortgage Association
MTN Medium Term Note

See notes to financial statements.

3
<PAGE>

STATEMENT OF OPERATIONS
Year Ended June 30, 1999 Alliance Government Reserves
================================================================================

<TABLE>
<S> <C> <C>
INVESTMENT INCOME
Interest .................................................. $ 296,475,357
EXPENSES
Advisory fee (Note B) ..................................... $ 26,712,495
Distribution assistance and administrative service (Note C) 24,783,052
Transfer agency (Note B) .................................. 4,835,345
Registration fees ......................................... 747,902
Printing .................................................. 598,094
Custodian fees ............................................ 488,926
Audit and legal fees ...................................... 107,193
Trustees' fees ............................................ 13,897
Miscellaneous ............................................. 86,994
--------------
Total expenses ............................................ 58,373,898
Less: expense reimbursement ............................... (1,123,076)
--------------
Net expenses .............................................. 57,250,822
--------------
Net investment income ..................................... 239,224,535
REALIZED GAIN ON INVESTMENTS
Net realized gain on investment transactions .............. 33,882
--------------
NET INCREASE IN NET ASSETS FROM OPERATIONS ................... $ 239,258,417
==============
</TABLE>

STATEMENT OF CHANGES IN NET ASSETS
================================================================================

<TABLE>
<CAPTION>
Year Ended Year Ended
June 30, 1999 June 30, 1998
-------------- --------------
<S> <C> <C>
INCREASE IN NET ASSETS FROM OPERATIONS
Net investment income ..................................... $ 239,224,535 $198,248,141
Net realized gain on investment transactions .............. 33,882 2,080
-------------- --------------
Net increase in net assets from operations ................ 239,258,417 198,250,221
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income ..................................... (239,224,535) (198,248,141)
TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST
Net increase (Note E) ..................................... 674,320,941 1,146,223,601
-------------- --------------
Total increase ............................................ 674,354,823 1,146,225,681
NET ASSETS
Beginning of year ......................................... 4,908,710,874 3,762,485,193
-------------- --------------
End of year ............................................... $5,583,065,697 $4,908,710,874
============== ==============
</TABLE>

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

See notes to financial statements.

4
<PAGE>

NOTES TO FINANCIAL STATEMENTS
June 30, 1999 Alliance Government Reserves
================================================================================

NOTE A: Significant Accounting Policies

Alliance Government Reserves (the "Trust") is an open-end diversified investment
company registered under the Investment Company Act of 1940. The Trust consists
of two portfolios: Alliance Government Reserves (the "Portfolio") and Alliance
Treasury Reserves, each of which is considered to be a separate entity for
financial reporting and tax purposes. The Portfolio pursues its objectives by
maintaining a portfolio of high-quality money market securities all of which, at
the time of investment, have remaining maturities of 397 days or less. The
financial statements have been prepared in conformity with generally accepted
accounting principles which require management to make certain estimates and
assumptions that affect the reported amounts of assets and liabilities in the
financial statements and amounts of income and expenses during the reporting
period. Actual results could differ from those estimates. The following is a
summary of significant accounting policies followed by the Portfolio.

1. Valuation of Securities

Securities in which the Portfolio invests are traded primarily in the
over-the-counter market and are valued at amortized cost, under which method a
portfolio instrument is valued at cost and any premium or discount is amortized
on a constant basis to maturity. Certain illiquid securities containing
unconditional puts at par value are also valued at amortized cost.

2. Taxes

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

3. Dividends

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

4. Investment Income and Investment Transactions

Interest income is accrued as earned. Investment transactions are recorded on a
trade date basis. Realized gain (loss) from investment transactions is recorded
on the identified cost basis.

5. Repurchase Agreements

It is the Portfolio's policy to take possession of securities as collateral
under repurchase agreements and to determine on a daily basis that the value of
such securities are sufficient to cover the value of the repurchase agreements.

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

NOTE B: Advisory Fee and Transactions with an Affiliate of the Adviser

The Portfolio pays its Adviser, Alliance Capital Management L.P., an advisory
fee at the annual rate of .50% on the first $1.25 billion of average daily net
assets; .49% on the next $.25 billion; .48% on the next $.25 billion; .47% on
the next $.25 billion; .46% on the next $1 billion; and .45% in excess of $3
billion. The Adviser has agreed, pursuant to the advisory agreement, to
reimburse the Portfolio to the extent that its annual aggregate expenses
(excluding taxes, brokerage, interest and, where permitted, extraordinary
expenses) exceed 1% of its average daily net assets for any fiscal year. For the
year ended June 30, 1999, the reimbursement amounted to $1,123,076.

The Portfolio compensates Alliance Fund Services, Inc., a wholly-owned
subsidiary of the Adviser, under a Transfer Agency Agreement for providing
personnel and facilities to perform transfer agency services for the Portfolio.
Such compensation amounted to $1,828,098 for the year ended June 30, 1999.

For the year ended June 30, 1999, the Fund's expenses were reduced by $8,024
under an expense offset arrangement with Alliance Fund Services.

5
<PAGE>

NOTES TO FINANCIAL STATEMENTS (continued) Alliance Government Reserves
================================================================================

NOTE C: Distribution Assistance and Administrative Services Plan

Under this Plan, the Portfolio pays Alliance Fund Distributors, Inc. (the
"Distributor"), a wholly-owned subsidiary of the Adviser, a distribution fee at
the annual rate of .25% of the average daily value of the Portfolio's net
assets. The Plan provides that the Distributor will use such payments in their
entirety for distribution assistance and promotional activities. For the year
ended June 30, 1999, the distribution fee amounted to $14,312,497. In addition,
the Portfolio may reimburse certain broker-dealers for administrative costs
incurred in connection with providing shareholder services, and may reimburse
the Adviser for accounting and bookkeeping, and legal and compliance support.
For the year ended June 30, 1999, such payments by the Portfolio amounted to
$10,470,555 of which $169,000 was paid to the Adviser.

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

NOTE D: Investment Transactions

At June 30, 1999, the cost of investments for federal income tax purposes was
the same as the cost for financial reporting purposes. At June 30, 1999 the Port
folio had a capital loss carryforward of $834,920, of which $46,271 expires in
2001, $236,674 expires in 2002 and $551,975 expires in the year 2003.

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

NOTE E: Transactions in Shares of Beneficial Interest

An unlimited number of shares ($.001 par value) are authorized. At June 30,
1999, capital paid-in aggregated $5,583,900,617. Transactions, all at $1.00 per
share, were as follows:

<TABLE>
<CAPTION>
Year Ended Year Ended
June 30, June 30,
1999 1998
------------- --------------
<S> <C> <C>
Shares sold ............................... 5,844,469,091 13,439,392,768
Shares issued on reinvestments of dividends 239,224,535 198,248,141
Shares redeemed ........................... (5,409,372,685) (12,491,417,308)
------------- --------------
Net increase .............................. 674,320,941 1,146,223,601
============= ==============
</TABLE>

6
<PAGE>

FINANCIAL HIGHLIGHTS Alliance Government Reserves
================================================================================

Selected Data For A Share Of Beneficial Interest Outstanding Throughout Each
Year

<TABLE>
<CAPTION>
Year Ended June 30,
-----------------------------------------------------------------
1999 1998 1997 1996 1995
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year ................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- --------
Income from Investment Operations
Net investment income ................................ .0419(a) .0463(a) .0443 .0461(a) .0439(a)
-------- -------- -------- -------- --------

Less: Dividends
Dividends from net investment income ................. (.0419) (.0463) (.0443) (.0461) (.0439)
-------- -------- -------- -------- --------
Net asset value, end of year ......................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ========

Total Return
Total investment return based on net asset value (b) . 4.27% 4.74% 4.53% 4.72% 4.48%

Ratios/Supplemental Data
Net assets, end of year (in millions) ................ $ 5,583 $ 4,909 $ 3,762 $ 3,205 $ 2,514
Ratios to average net assets of:
Expenses, net of waivers and reimbursements ....... 1.00% 1.00% 1.00% 1.00% 1.00%
Expenses, before waivers and reimbursements ....... 1.02% 1.01% 1.00% 1.01% 1.05%
Net investment income ............................. 4.18%(a) 4.63%(a) 4.44% 4.60%(a) 4.42%(a)
</TABLE>

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

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

(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.

7
<PAGE>

Independent Auditor's Report Alliance Government Reserves
================================================================================

To the Board of Trustees and Shareholders
Alliance Government Reserves Portfolio

We have audited the accompanying statement of net assets of Alliance Government
Reserves Portfolio as of June 30, 1999 and the related statements of operations,
changes in net assets, and financial highlights for the periods indicated in the
accompanying financial statements. These financial statements and financial
highlights are the responsibility of the Portfolio's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of June
30, 1999, by correspondence with the custodian and brokers.

An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Alliance Government Reserves Portfolio as of June 30, 1999, and the results of
its operations, changes in its net assets, and its financial highlights for the
periods indicated, in conformity with generally accepted accounting principles.

/s/ McGladrey & Pullen, LLP

McGladrey & Pullen, LLP
New York, New York
July 23, 1999

<PAGE>

_______________________________________________________________

APPENDIX
_______________________________________________________________

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

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

AAA & AA and Aaa & Aa Bond Ratings

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

<PAGE>

or there may be other elements present which make the long-term
risks appear somewhat larger.

<PAGE>

This is filed pursuant to Rule 497(c).
Files Nos. 002-63315 and 811-02889

<PAGE>

For more information about the Fund, the following documents are available upon
request:

o Annual/Semi-Annual Reports to Shareholders

The Fund's annual and semi-annual reports to shareholders contain additional
information on the Fund's investments.

o Statement of Additional Information (SAI)

By mail: c/o Alliance Fund Services, Inc.
P.O. Box 1520
Secaucus, New Jersey 07096

By phone: For Information and Literature:
(800) 824-1916

Or you may view or obtain these documents from the Securities and Exchange
Commission:

In person: at the Securities and Exchange Commission's
Public Reference Room in Washington, D.C.

By phone: 202-942-8090 (for information on the opera-
tion of the public reference room only)

By mail: Public Reference Section
Securities and Exchange Commission
Washington, DC 20549-0102
(duplicating fee required)

By electronic mail: [email protected] (duplicating fee
required)

On the Internet: www.sec.gov

- --------------------------------------------------------------------------------
Table of Contents
- -----------------
RISK/RETURN SUMMARY ........................................................ 2
FEES AND EXPENSES OF THE FUND .............................................. 3
OTHER INFORMATION ABOUT THE FUND'S
OBJECTIVES, STRATEGIES, AND RISKS .......................................... 3
Investment Objectives and Strategies ..................................... 3
Risk Considerations ...................................................... 3
MANAGEMENT OF THE FUND ..................................................... 5
PURCHASE AND SALE OF SHARES ................................................ 6
How The Fund Values Its Shares ........................................... 6
How To Buy Shares ........................................................ 6
How To Sell Shares ....................................................... 6
Other .................................................................... 6
DIVIDENDS, DISTRIBUTIONS, AND TAXES ........................................ 7
DISTRIBUTION ARRANGEMENTS .................................................. 7
GENERAL INFORMATION ........................................................ 7
FINANCIAL HIGHLIGHTS ....................................................... 8
- --------------------------------------------------------------------------------
File No. 811-02889
ATRPRO1199

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

Alliance
Treasury
Reserves

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

Prospectus
November 1, 1999

The Securities and Exchange Commission has not approved or disapproved these
securities or passed upon the adequacy of this Prospectus. Any representation to
the contrary is a criminal offense.

- --------------------------------------------------------------------------------
<PAGE>

- --------------------------------------------------------------------------------
RISK/RETURN SUMMARY
- --------------------------------------------------------------------------------

Objectives: The investment objectives of the Fund are--in the following
order of priority--safety of principal, excellent liquidity, and maximum current
income to the extent consistent with the first two objectives.

Principal Investment Strategy: The Fund is a "money market fund" that
seeks to maintain a stable net asset value of $1.00 per share. The Fund pursues
its objectives by maintaining a portfolio of high-quality, U.S. Treasury and
other U.S. dollar-denominated money market securities.

Principal Risks: The principal risks of investing in the Fund are:

o Interest Rate Risk. This is the risk that changes in interest rates will
adversely affect the yield or value of the Fund's investments in debt
securities.

Another important thing for you to note:

PERFORMANCE AND BAR CHART INFORMATION

o the Fund's average annual total returns for one and five years and the
life of the Fund; and

o changes in the Fund's performance from year to year over the life of the
Fund.

The Fund's past performance does not necessarily indicate how it will
perform in the future.

You may obtain current seven-day yield information for the Fund by calling
(800) 221-9513 or your financial intermediary.

PERFORMANCE TABLE

Since
1 Year 5 Year Inception*
- --------------------------------------------------------------------------------
4.36% 4.47% 4.39%
- --------------------------------------------------------------------------------

* Inception date: 9/1/93.

BAR CHART

89 90 91 92 93 94 95 96 97 98

n/a n/a n/a n/a n/a 3.73% 5.10% 4.53% 4.66% 4.36%

During the period shown in the bar chart, the highest return for a quarter
was 1.27% (quarter ending March 31, 1995) and the lowest return for a quarter
was 0.75% (quarter ending March 31, 1994).

2
<PAGE>

- --------------------------------------------------------------------------------
FEES AND EXPENSES OF THE FUND
- --------------------------------------------------------------------------------

This table describes the fees and expenses that you may pay if you buy and hold
shares of the Fund.

Shareholder Transaction Expenses (fees paid directly from your investment)

None

Annual Fund Operating Expenses (expenses that are deducted from Fund assets) and
Example

ANNUAL FUND OPERATING EXPENSES
--------------------------------------

Management Fees ..................................................... .50%
Distribution (12b-1) Fees ........................................... .25%
Other Expenses ...................................................... .27%
------
Total Operating Expenses ............................................ 1.02%
Waiver and/or Expense Reimbursement* ................................ (.02)%
------
Net Expenses ........................................................ 1.00%

EXAMPLE*
----------------------------

1 Year .............................................................. $ 102
3 Years ............................................................. $ 318
5 Years ............................................................. $ 552
10 Years ............................................................ $1,225

- ----------
* Reflects Alliance's contractual waiver (which continues from year to year
unless changed by vote of the Fund's shareholders) of a portion of its
advisory fee and/or reimbursement of a portion of the Fund's operating
expenses so that the Fund's expense ratio does not exceed 1.00%.

This section of the Prospectus provides a more complete description of the
investment objectives and principal strategies and risks of the Fund.

Please note:

o There can be no assurance that the Fund will achieve its investment
objectives.

Investment Objectives and Strategies

The Fund's investments may include:

o issues of the U.S. Treasury, such as bills, certificates of
indebtedness, notes, and bonds;

o variable rate obligations; and

o repurchase agreements that are fully collateralized.

The Fund may commit up to 15% of its net assets to the purchase of
when-issued U.S. Government securities.

Risk Considerations

3
<PAGE>

debt instrument to decrease. The change in value for shorter-term securities is
usually smaller than for securities with longer maturities. Because the Fund
invests in securities with short maturities and seeks to maintain a stable net
asset value of $1.00 per share, it is possible, though unlikely, that an
increase in interest rates would change the value of your investment.

4
<PAGE>

mission critical systems and 100% of nonmission critical systems. Integrated
systems tests were conducted to verify that the systems would continue to work
together. Full integration testing of all mission critical and nonmission
critical systems is completed. Testing of interfaces with third-party suppliers
has begun and will continue throughout 1999. Alliance reports that it has
completed an inventory of its facilities and related technology applications and
has begun to evaluate and test these systems. Alliance reports that it
anticipates that these systems will be fully operable in the year 2000. Alliance
has deferred certain other planned information technology projects until after
the year 2000 initiative is completed. Such delay is not expected to have a
material adverse effect on Alliance's financial condition or results of
operations. Alliance, with the assistance of a consulting firm, is developing
Year 2000 specific contingency plans with emphasis on mission critical
functions. These plans seek to provide alternative methods of processing in the
event of a failure that is outside Alliance's control.

- --------------------------------------------------------------------------------
MANAGEMENT OF THE FUND
- --------------------------------------------------------------------------------

The Fund's investment adviser is Alliance Capital Management L.P., 1345
Avenue of the Americas, New York, New York 10105. Alliance is a leading
international investment adviser managing client accounts with assets as of
September 30, 1999 totaling more than $317 billion (of which more than $143
billion represented assets of investment companies). As of September 30, 1999,
Alliance managed retirement assets for many of the largest public and private
employee benefit plans (including 28 of the nation's FORTUNE 100 companies),
for public employee retirement funds in 31 states, for investment companies,
and for foundations, endowments, banks and insurance companies worldwide. The 52
registered investment companies managed by Alliance, comprising 118 separate
investment portfolios, currently have more than 4.8 million shareholder
accounts.

Alliance provides investment advisory services and order placement
facilities for the Fund. For the fiscal year ended June 30, 1999, the Fund paid
Alliance .48% as a percentage of average daily net assets, net of any waivers.
(See the "Annual Fund Operating Expenses" at the begin ning of the Prospectus
for more information about fee waivers.)

5
<PAGE>

tance and administrative services and to otherwise promote the sale of Fund
shares, including paying for the preparation, printing, and distribution of
prospectuses and sales literature or other promotional activities.

- --------------------------------------------------------------------------------
PURCHASE AND SALE OF SHARES
- --------------------------------------------------------------------------------

How The Fund Values Its Shares

How To Buy Shares

o Initial Investment

You may purchase the Fund's shares by instructing your Account Executive
to invest in the Fund in connection with your brokerage account.

Minimum Investment Amounts

o Initial $1,000

o Subsequent $100

o Minimum Maintenance Amount $500

These minimums do not apply to shareholder accounts maintained through
financial intermediaries, which may maintain their own minimums.

o Subsequent Investments

o By Check:

Mail or deliver your check or negotiable draft made payable to your
brokerage firm to your Account Executive, who will deposit it into the Fund.
Please indicate your brokerage account number.

o By Sweep:

How To Sell Shares

You also may redeem your shares:

o By Sweep:

o By Checkwriting:

Other

The Fund has two transaction times each Fund business day, 12:00 Noon and
4:00 p.m., Eastern time. Investments receive the full dividend for a day if
Federal funds

6
<PAGE>

or bank wire monies are received by State Street Bank before 4:00 p.m., Eastern
time, on that day.

Redemption proceeds are normally wired the same business day if a
redemption request is received prior to 12:00 p.m., Eastern time. Redemption
proceeds are wired or mailed the same day 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. Shares do not earn dividends
on the day a redemption is effected.

The Fund offers a variety of shareholder services. For more information
about these services, telephone AFS at (800) 221-5672.

A transaction, service, administrative or other similar fee may be charged
by your financial broker-dealer, agent, financial representative or other
financial intermediary with respect to the purchase, sale or exchange of shares
made through these financial intermediaries. These finan cial intermediaries may
also impose requirements with respect to the purchase, sale or exchange of
shares that are different from, or in addition to, those imposed by the Fund.

The Fund's net income is calculated at 4:00 p.m., Eastern time, each
business day and paid as dividends to shareholders. The dividends are
automatically invested in additional shares in your account. These additional
shares are entitled to dividends on following days resulting in compounding
growth of income. The Fund expects that its distributions will primarily consist
of net income, or, if any, short-term capital gains as opposed to long-term cap
ital gains. For Federal income tax purposes, the Fund's dividend distributions
of net income (or short-term capital gains) will be taxable to you as ordinary
income. Any capital gains distributions may be taxable to you as capital gains.
The Fund's distributions also may be subject to certain state and local taxes.

Each year shortly after December 31, the Fund will send you tax
information stating the amount and type of all of its distributions for the
year.

- --------------------------------------------------------------------------------
DISTRIBUTION ARRANGEMENTS
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
GENERAL INFORMATION
- --------------------------------------------------------------------------------

7
<PAGE>

- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
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Year Ended June 30
---------------------------------------------------------
1999 1998 1997 1996 1995
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period .................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- --------

Income from Investment Operations

Net investment income (a) ................................ .0389 .0453 .0443 .0466 .0460
Net gains or losses on securities ........................ .0000 .0000 .0000 .0000 .0000
-------- -------- -------- -------- --------
Total from investment operations ......................... .0389 .0453 .0443 .0466 .0460
-------- -------- -------- -------- --------
Less: Distributions

Dividends ................................................ (.0389) (.0453) (.0443) (.0466) (.0460)
Distributions ............................................ .0000 .0000 .0000 .0000 .0000
-------- -------- -------- -------- --------
Total distributions ...................................... (.0389) (.0453) (.0443) (.0466) (.0460)
-------- -------- -------- -------- --------
Net asset value, end of period ........................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ========
Total Return

Total investment return based on net asset value (b) ..... 3.96% 4.63% 4.53% 4.77% 4.71%

Ratios/Supplemental Data

Net assets, end of period (in millions) ..................$811,752 $740,056 $704,084 $700,558 $493,702
Ratios to average net assets of:
Expenses, net of waivers and reimbursements ............ 1.00% .95% .85% .81% .69%
Expenses, before waivers and reimbursements ............ 1.02% 1.01% 1.00% 1.05% 1.05%
Net investment income (a) .............................. 3.88% 4.53% 4.43% 4.64% 4.86%
</TABLE>
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(a) Net of expenses reimbursed or waived by Alliance.

(b) Total investment return is calculated assuming an initial investment made at
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.

8
<PAGE>

<PAGE>

This is filed pursuant to Rule 497(c).
Files Nos. 002-63315 and 811-02889

<PAGE>

[LOGO] ALLIANCE TREASURY RESERVES
_______________________________________________________________

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

STATEMENT OF ADDITIONAL INFORMATION
November 1, 1999
_______________________________________________________________

TABLE OF CONTENTS

Page

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

Investment Restrictions.....................................

Management..................................................

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

Additional Information......................................

Daily Dividends-Determination of Net Asset Value............

Taxes.......................................................

General Information.........................................

Appendix-Commercial Paper and Bond Rating...................

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

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

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

<PAGE>

_________________________________________________________________

INVESTMENT OBJECTIVES AND POLICIES
_________________________________________________________________

The Fund is a series of Alliance Government Reserves
(the "Trust"). The Trust was reorganized in October 1984, as a
Massachusetts business trust, having previously been a Maryland
corporation since its formation in December 1978. The Fund is a
diversified, open-end investment company whose objectives are -
in the following order of priority - safety of principal,
excellent liquidity, and maximum current income to the extent
consistent with the first two objectives. There can be no
assurance, as is true with all investment companies, that the
Fund's objectives will be achieved. The Fund pursues its
objectives by maintaining a portfolio of the following
investments diversified by maturities not exceeding 397 days:

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

2. Repurchase agreements pertaining to the above
securities. A repurchase agreement arises when a buyer purchases
a security and simultaneously agrees to resell it to the
counterparty at an agreed-upon future date. The resale price is
greater than the purchase price, reflecting an agreed-upon market
rate which is effective for the period of time the buyer's money
is invested in the security and which is not related to the
coupon rate on the purchased security. Repurchase agreements
may be entered into with member banks of the Federal Reserve
System or "primary dealers" (as designated by the Federal Reserve
Bank of New York) in U.S. Government securities or with State
Street Bank and Trust Company ("State Street Bank"), the Fund's
Custodian. It is the Fund's current practice, which may be
changed at any time without shareholder approval, to enter into
repurchase agreements only with such primary dealers or State
Street Bank. For each repurchase agreement, the Fund requires
continual maintenance of the market value of the underlying
collateral in amounts equal to, or in excess of, the agreement
amount. While the maturities of the underlying collateral may
exceed 397 days, the term of the repurchase agreement is always
less than 397 days. In the event that a counterparty defaulted
on its repurchase obligation, the Fund might suffer a loss to the
extent that the proceeds from the sale of the collateral were
less than the repurchase price. If the counterparty became
bankrupt, the Fund might be delayed in selling the collateral.

<PAGE>

Repurchase agreements often are for short periods such as one day
or a week, but may be longer. Repurchase agreements not
terminable within seven days will be limited to no more than 10%
of the Fund's assets. Pursuant to Rule 2a-7 under the Investment
Company Act of 1940, as amended (the "Act"), a repurchase
agreement is deemed to be an acquisition of the underlying
securities, provided that the obligation of the seller to
repurchase the securities from the money market fund is
collateralized fully (as defined in such Rule). Accordingly, the
counterparty of a fully collateralized repurchase agreement is
deemed to be the issuer of the underlying securities.

When-Issued Securities. Certain new issues that the
Fund is permitted to purchase are available on a "when-issued"
basis. When so offered, the price, which is generally expressed
in yield terms, is fixed at the time the commitment to purchase
is made, but delivery and payment for the when-issued securities
take place at a later date. Normally, the settlement date occurs
from within ten days to one month after the purchase of the
issue. During the period between purchase and settlement, no
payment is made by the Fund to the issuer and, thus, no interest
accrues to the Fund from the transaction. When-issued securities
may be sold prior to the settlement date, but the Fund makes
when-issued commitments only with the intention of actually
acquiring the securities. To facilitate such acquisitions, the
Fund's Custodian will maintain, in a separate account of the
Fund, U.S. Government securities or other liquid high grade debt
securities having value equal to or greater than commitments held
by the Fund. Similarly, a separate account will be maintained to
meet obligations in respect of reverse repurchase agreements. On
delivery dates for such transactions, the Fund will meet its
obligations from maturities or sales of the securities held in
the separate account and/or from the available cash flow. If the
Fund, however, chooses to dispose of the right to acquire a when-
issued security prior to its acquisition, it can incur a gain or
loss. At the time the Fund makes the commitment to purchase a
security on a when-issued basis, it records the transaction and
reflects the value of the security in determining its net asset
value. No when-issued commitments will be made if, as a result,
more than 15% of the Fund's net assets would be committed.

<PAGE>

Floating and Variable Rate Obligations. The Fund may
purchase floating and variable rate obligations, including
floating and variable rate demand notes and bonds. The Fund may
invest in variable and floating 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. The Fund may also purchase
floating and variable rate demand notes and bonds, which are
obligations ordinarily having stated maturities in excess of 397
days, but which permit the holder to demand payment of principal
and accrued interest at any time, or at specified intervals not
exceeding 397 days, in each case upon not more than 30 days'
notice.

Except as otherwise provided, the Fund's investment
policies are not designated "fundamental policies" within the
meaning of the Act and may, therefore, be changed by the Trustees
of the Trust without a shareholder vote. However, the Fund will
not change its investment policies without contemporaneous
written notice to shareholders.

<PAGE>

Trustees. Generally, an Eligible Security is a security that
(i) has a remaining maturity of 397 days or less and (ii) is
rated, or is issued by an issuer with short-term debt outstanding
that is rated in one of the two highest rating categories by two
nationally recognized statistical rating organizations ("NRSROs")
or, if only one NRSRO has issued a rating, by that NRSRO ("the
requisite NRSROs"). Unrated securities may also be Eligible
Securities if the Adviser determines that they are of comparable
quality to a rated Eligible Security pursuant to guidelines
approved by the Trustees. A description of the ratings of some
NRSROs appears in the Appendix attached hereto. Securities in
which the Fund invests may be subject to liquidity or credit
enhancements. These securities are generally considered to be
Eligible Securities if the enhancement or the issuer of the
enhancement has received the appropriate rating from the
requisite NRSROs.

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

Senior Securities. The Fund will not issue senior
securities except as permitted by the Act or the rules,
regulations, or interpretations thereof.

_______________________________________________________________

INVESTMENT RESTRICTIONS
_______________________________________________________________

<PAGE>

"majority of the Fund's outstanding shares" means the affirmative
vote of the holders of (a) 67% or more of the shares represented
at a meeting at which more than 50% of the outstanding shares are
represented or (b) more than 50% of the outstanding shares,
whichever is less. If a percentage restriction is adhered to at
the time of an investment, a later increase or decrease in
percentage resulting from a change in value of portfolio
securities or in amount of the Fund's assets will not constitute
a violation of that restriction.

The Fund:

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

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

3. May not enter into repurchase agreements if, as a
result thereof, more than 10% of the Fund's net assets would be
subject to repurchase agreements not terminable within seven days
(which may be considered to be illiquid) or with any one seller7
if, as a result thereof, more than 5% of the Fund's assets would
be invested in repurchase agreements purchased from such seller;
and may not enter into any reverse repurchase agreements if, as a
result thereof, the Fund's obligations with respect to reverse
repurchase agreements would exceed 10% of the Fund's assets;

____________________

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

<PAGE>

agreements, and in an aggregate amount not to exceed 10% of the
Fund's assets;

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

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

MANAGEMENT
_______________________________________________________________

Trustees and Officers

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

<PAGE>

Trustees

8 DAVE H. WILLIAMS, 67, Chairman, is Chairman of the
Board of Directors of Alliance Capital Management Corporation
("ACMC"),9 sole general partner of the Adviser with which he has
been associated since prior to 1994.

7JOHN D. CARIFA, 54, is the President, Chief Operating
Officer and a Director of ACMC with which he has been associated
since prior to 1994.

DAVID K. STORRS, 55, is President and Chief Executive
Officer of Alternative Investment Group, LLC (an investment
firm). He was formerly President of The Common Fund (investment
management for educational institutions) with which he had been
associated since prior to 1994. His address is 65 South Gate
Road, Southport, Connecticut 06490.

____________________

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

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

<PAGE>

SHELBY WHITE, 61, is an author and financial journalist.
Her address is One Sutton Place South, New York, New York 10022.

Officers

RONALD M. WHITEHILL - President, 61, is a Senior Vice
President of ACMC and President of Alliance Cash Management
Services with which he has been associated since prior to 1994.

KATHLEEN A. CORBET - Senior Vice President, 39, is an
Executive Vice President of ACMC with which she has been
associated since prior to 1994.

DREW BIEGEL - Senior Vice President, 48, is a Vice
President of ACMC with which he has been associated since prior
to 1994.

JOHN R. BONCZEK - Senior Vice President, 39, is a Vice
President of ACMC with which he has been associated since prior
to 1994.

ROBERT I. KURZWEIL - Senior Vice President, 48, is a
Vice President of ACMC with which he has been associated since
prior to 1994.