<PAGE>
This is filed pursuant to Rule 497(e).
File Nos. 2-63315 and 811-02889.
<PAGE>
- --------------------------------------------------------------------------------
Yields
For current recorded yield information on the Funds, call toll free:
(800) 221-9513
- --------------------------------------------------------------------------------
The Funds are open-end management investment companies with investment
objectives of safety, liquidity and maximum current income (in the case of
Alliance Municipal Trust-General, exempt from Federal income taxes) to the
extent consistent with the first two objectives. Alliance Capital Reserves,
Alliance Government Reserves and the General Portfolio of Alliance Municipal
Trust are diversified. This prospectus sets forth the information about each
Fund that a prospective investor should know before investing. Please retain it
for future reference.
An investment in the Fund is (i) neither insured nor guaranteed by the U.S.
Government; (ii) not a deposit or obligation of, or guaranteed or endorsed by,
any bank; and (iii) not federally insured by the Federal Deposit Insurance
Corporation, the Federal Reserve Board or any other agency. There can be no
assurance that a Fund will be able to maintain a stable net asset value of $1.00
per share.
A "Statement of Additional Information," for each Fund dated October 30,1998,
which provides a further discussion of certain areas in this prospectus and
other matters which may be of interest to some investors,has been filed with the
Securities and Exchange Commission and is incorporated herein by reference. A
free copy may be obtained by contacting your Account Executive.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------
Contents
--------
Expense Information........................................................ 2
Financial Highlights....................................................... 3
Objectives and Policies.................................................... 5
Purchase and Redemption of Shares.......................................... 9
Additional Information..................................................... 9
- --------------------------------------------------------------------------------
BUTLER, WICK & COMPANY
introduces...
. Alliance Capital Reserves
. Alliance Government Reserves
. Alliance Municipal Trust-
General Portfolio
Prospectus
October 30, 1998
Butler Wick
-----------
& CO., INC.
-----------
MEMBER S.I.P.C.
CORPORATE HEADQUARTERS
City Centre One . Suite 700 . P.O. Box 149 . Youngstown, Ohio 44501
(330) 744-4351 in Ohio or 1-800-229-1643
Warren Alliance Canton Kent
330-393-1567 330-823-7666 330-493-1616 330-678-2151
Salem Sharon Franklin Cleveland
330-337-3911 724-546-2166 814-432-3169 440-899-0082
<PAGE>
EXPENSE INFORMATION
SHAREHOLDER TRANSACTION EXPENSES
The Funds have no sales load on purchases or reinvested dividends, deferred
sales load, redemption fee or exchange fee.
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES (as a percentage of average ACR AGR AMT-GEN
net assets, after expense reimbursement) ---- ---- -------
<S> <C> <C> <C>
Management Fees........................................... .46% .46% .50%
12b-1 Fees................................................ .25 .25 .25
Other Expenses............................................ .29 .29 .25
---- ---- ----
Total Fund Operating Expenses............................. 1.00% 1.00% 1.00%
</TABLE>
EXAMPLE
You would pay the following expenses on a $1,000 investment, assuming a 5%
annual return (cumulatively through the end of each time period):
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
ACR............................................. $10 $32 $55 $122
AGR............................................. $10 $32 $55 $122
AMT-General..................................... $10 $32 $55 $122
</TABLE>
The purpose of the foregoing table is to assist the investor in understand-
ing the various costs and expenses that an investor in the Fund will bear di-
rectly and indirectly. The expenses listed in the table for AGR are net of the
contractual reimbursement by the Adviser described in this prospectus. The ex-
penses of such Portfolio, before expense reimbursements, would be: Management
Fees--.47%, 12b-1 Fees--.25%, Other Expenses--.29% and Total Operating Ex-
penses--1.01%. The example should not be considered a representation of past
or future expenses; actual expenses may be greater or less than those shown.
2
<PAGE>
FINANCIAL HIGHLIGHTS . FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
(AUDITED)
The following tables have been audited by McGladrey & Pullen LLP, each of
the Fund's independent auditors, whose unqualified report thereon appears in
each Statement of Additional Information. This information should be read in
conjunction with the financial statements and notes thereto included in each
Fund's Statement of Additional Information.
<TABLE>
<CAPTION>
YEAR ENDED JUNE 30,
ALLIANCE CAPITAL RESERVES -----------------------------------------------------------------------------------------------
1998 1997 1996 1995 1994 1993 1992 1991 1990
------- ------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of year....... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------- ------- ------- ------- ------- ------- ------- -------
INCOME FROM INVESTMENT
OPERATIONS
Net investment income.... .0471 .0452 .0471 .0447 .0255 .0266 .0438 .0662 .0782
Net realized gain on
investments............. -0- -0- -0- -0- -0- .0003 .0013 -0- -0-
------- ------- ------- ------- ------- ------- ------- ------- -------
Net increase in net
assets from operations.. .0471 .0452 .0471 .0447 .0255 .0269 .0451 .0662 .0782
------- ------- ------- ------- ------- ------- ------- ------- -------
LESS: DIVIDENDS AND
DISTRIBUTIONS
Dividends from net
investment income....... (.0471) (.0452) (.0471) (.0447) (.0255) (.0266) (.0438) (.0662) (.0782)
Distributions from net
realized gains.......... -0- -0- -0- -0- -0- (.0003) (.0013) -0- -0-
------- ------- ------- ------- ------- ------- ------- ------- -------
Total dividends and
distributions........... (.0471) (.0452) (.0471) (.0447) (.0255) (.0269) (.0451) (.0662) (.0782)
------- ------- ------- ------- ------- ------- ------- ------- -------
Net asset value, end of
year.................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======= ======= ======= ======= ======= ======= ======= ======= =======
TOTAL RETURN
Total investment return
based on net asset
value(a)................ 4.83% 4.63% 4.82% 4.57% 2.58% 2.73% 4.61% 6.84% 8.14%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year
(in millions)........... $ 8,015 $ 5,733 $ 4,804 $ 3,024 $ 2,417 $ 2,112 $ 1,947 $ 1,937 $ 1,891
Ratio to average net
assets of:
Expenses, net of waivers
and reimbursements..... 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% .97% .88%
Expenses, before waivers
and reimbursements..... 1.00% 1.00% 1.00% 1.03% 1.03% 1.00% 1.00% .97% .98%
Net investment
income(b).............. 4.71% 4.53% 4.69% 4.51% 2.57% 2.65% 4.37% 6.62% 7.82%
<CAPTION>
ALLIANCE CAPITAL RESERVES
1989
--------
<S> <C>
Net asset value,
beginning of year....... $ 1.00
--------
INCOME FROM INVESTMENT
OPERATIONS
Net investment income.... .0788
Net realized gain on
investments............. -0-
--------
Net increase in net
assets from operations.. .0788
--------
LESS: DIVIDENDS AND
DISTRIBUTIONS
Dividends from net
investment income....... (.0788)
Distributions from net
realized gains.......... -0-
--------
Total dividends and
distributions........... (.0788)
--------
Net asset value, end of
year.................... $ 1.00
========
TOTAL RETURN
Total investment return
based on net asset
value(a)................ 8.20%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year
(in millions)........... $ 1,536
Ratio to average net
assets of:
Expenses, net of waivers
and reimbursements..... .95%
Expenses, before waivers
and reimbursements..... 1.05%
Net investment
income(b).............. 7.87%
- -------
(a) Total investment return is calculated assuming an initial investment made
at the net asset value at the beginning of the period, reinvestment of all
dividends and distributions at net asset value during the period, and
redemption on the last day of the period.
(b) Net of expenses reimbursed or waived by the Adviser.
<CAPTION>
ALLIANCE GOVERNMENT YEAR ENDED JUNE 30,
RESERVES -----------------------------------------------------------------------------------------------
1998 1997 1996 1995 1994 1993 1992 1991 1990
------- ------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, begin-
ning of year............ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------- ------- ------- ------- ------- ------- ------- -------
INCOME FROM INVESTMENT
OPERATIONS
Net investment
income(b)............... .0463(b) .0443 .0461(b) .0439(b) .0244(b) .0256(b) .0421 .0640 .0765
Net realized gain on in-
vestments............... -0- -0- -0- -0- -0- .0001 -0- -0- .0001
------- ------- ------- ------- ------- ------- ------- ------- -------
Net increase in net
assets from operations.. .0463 .0443 .0461 .0439 .0244 .0257 .0421 .0640 .0766
------- ------- ------- ------- ------- ------- ------- ------- -------
LESS: DIVIDENDS AND DIS-
TRIBUTIONS
Dividends from net in-
vestment income......... (.0463) (.0443) (.0461) (.0439) (.0244) (.0256) (.0421) (.0640) (.0765)
Distributions from net
realized gains.......... -0- -0- -0- -0- -0- (.0001) -0- -0- (.0001)
------- ------- ------- ------- ------- ------- ------- ------- -------
Total dividends and dis-
tributions.............. (.0463) (.0443) (.0461) (.0439) (.0244) (.0257) (.0421) (.0640) (.0766)
------- ------- ------- ------- ------- ------- ------- ------- -------
Net asset value, end of
year.................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======= ======= ======= ======= ======= ======= ======= ======= =======
TOTAL RETURN
Total investment return
based on net asset
value(a)................ 4.74% 4.53% 4.72% 4.48% 2.48% 2.60% 4.30% 6.61% 7.96%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year
(in millions)........... $ 4,909 $ 3,762 $ 3,205 $ 2,514 $ 2,061 $ 1,783 $ 1,572 $ 1,070 $ 584
Ratio to average net as-
sets of:
Expenses, net of waivers
and reimbursements..... 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% .95% .89% .88%
Expenses, before waivers
and reimbursements..... 1.01% 1.00% 1.01% 1.05% 1.04% 1.02% .97% .93% .98%
Net investment
income(b).............. 4.63%(b) 4.44% 4.60%(b) 4.42%(b) 2.46%(b) 2.55%(b) 4.17% 6.28% 7.65%
<CAPTION>
ALLIANCE GOVERNMENT
RESERVES
1989
--------
<S> <C>
Net asset value, begin-
ning of year............ $ 1.00
--------
INCOME FROM INVESTMENT
OPERATIONS
Net investment
income(b)............... .0774
Net realized gain on in-
vestments............... -0-
--------
Net increase in net
assets from operations.. .0774
--------
LESS: DIVIDENDS AND DIS-
TRIBUTIONS
Dividends from net in-
vestment income......... (.0774)
Distributions from net
realized gains.......... -0-
--------
Total dividends and dis-
tributions.............. (.0774)
--------
Net asset value, end of
year.................... $ 1.00
========
TOTAL RETURN
Total investment return
based on net asset
value(a)................ 8.04%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year
(in millions)........... $ 522
Ratio to average net as-
sets of:
Expenses, net of waivers
and reimbursements..... .88%
Expenses, before waivers
and reimbursements..... .98%
Net investment
income(b).............. 7.86%
</TABLE>
- -------
(a) Total investment return is calculated assuming an initial investment made
at the net asset value at the beginning of the period, reinvestment of all
dividends and distributions at net asset value during the period, and
redemption on the last day of the period.
(b) Net of expenses reimbursed or waived by the Adviser.
3
<PAGE>
<TABLE>
<CAPTION>
GENERAL PORTFOLIO
--------------------------------------------------------------------------------------------
ALLIANCE MUNICIPAL SIX MONTHS
TRUST YEAR ENDED JUNE 30, ENDED
------------------------------------------------------------------------------ JUNE 30,
1998 1997 1996 1995 1994 1993 1992 1991 1990 1989
------ ----- ------ ------ ------ ------ ------ ------ ------ ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of
period.............. $ 1.00 $1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------ ----- ------ ------ ------ ------ ------ ------ ------ ------
INCOME FROM
INVESTMENT
OPERATIONS
Net investment
income.............. .028 .028 .029 .028(d) .018(d) .020(d) .034 .046 .055 .030
Net realized and
unrealized loss on
investments......... -0- -0- -0- (.003) -0- -0- -0- -0- -0- -0-
------ ----- ------ ------ ------ ------ ------ ------ ------ ------
Net increase in net
asset value from
operations.......... .028 .028 .029 .025 .018 .020 .034 .046 .055 .030
------ ----- ------ ------ ------ ------ ------ ------ ------ ------
ADD: CAPITAL
CONTRIBUTIONS
Capital Contributed
by the Adviser...... -0- -0- -0- .003 -0- -0- -0- -0- -0- -0-
------ ----- ------ ------ ------ ------ ------ ------ ------ ------
LESS: DIVIDENDS
Dividends from net
investment income... (.028) (.028) (.029) (.028) (.018) (.020) (.034) (.046) (.055) (.030)
------ ----- ------ ------ ------ ------ ------ ------ ------ ------
Net asset value, end
of period........... $ 1.00 $1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
====== ===== ====== ====== ====== ====== ====== ====== ====== ======
TOTAL RETURN
Total investment
return based on net
asset value(a)...... 2.85% 2.81% 2.93% 2.83%(c) 1.81% 2.05% 3.48% 4.71% 5.65% 6.13%(b)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of
period (in
millions)........... $1,196 $ 980 $1,148 $1,189 $1,134 $1,016 $ 914 $ 883 $ 798 $ 695
Ratio to average net
assets of:
Expenses, net of
waivers and
reimbursements..... .98% .94% .95% .94% .92% .92% .92% .89% .83% .84%(b)
Expenses, before
waivers and
reimbursements..... .98% .94% .95% .95% .94% .94% .95% .95% .93% .94%(b)
Net investment
income(d).......... 2.81% 2.76% 2.90% 2.78%(d) 1.80%(d) 2.02%(d) 3.40% 4.57% 5.50% 5.96%(b)
<CAPTION>
ALLIANCE MUNICIPAL
TRUST YEAR ENDED
DECEMBER 31,
1988
------------
<S> <C>
Net asset value,
beginning of
period.............. $ 1.00
------------
INCOME FROM
INVESTMENT
OPERATIONS
Net investment
income.............. .047
Net realized and
unrealized loss on
investments......... -0-
------------
Net increase in net
asset value from
operations.......... .047
------------
ADD: CAPITAL
CONTRIBUTIONS
Capital Contributed
by the Adviser...... -0-
------------
LESS: DIVIDENDS
Dividends from net
investment income... (.047)
------------
Net asset value, end
of period........... $ 1.00
============
TOTAL RETURN
Total investment
return based on net
asset value(a)...... 4.81%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of
period (in
millions)........... $ 633
Ratio to average net
assets of:
Expenses, net of
waivers and
reimbursements..... .83%
Expenses, before
waivers and
reimbursements..... .93%
Net investment
income(d).......... 4.69%
</TABLE>
- -------
(a) Total investment return is calculated assuming an initial investment made
at the net asset value at the beginning of the period, reinvestment of all
dividends and distributions at net asset value during the period, and
redemption on the last day of the period.
(b) Annualized.
(c) The capital contribution by the Adviser had no effect on total return.
(d) Net of expenses reimbursed or waived by the Adviser.
---------------
From time to time the Fund advertises its "yield" and "effective yield."
Both yield figures are based on historical earnings and are not intended to
indicate future performance. To calculate the "yield," the amount of dividends
paid on a share during a specified seven-day period is assumed to be paid each
week over a 52-week period and is shown as a percentage of the investment. To
calculate "effective yield," which will be higher than the "yield" because of
compounding, the dividends paid are assumed to be reinvested. Further informa-
tion about each Fund's performance is contained in the annual report to share-
holders and Statement of Additional Information which may be obtained without
charge by contacting Alliance Fund Services, Inc. at the address shown in this
prospectus.
4
<PAGE>
INVESTMENT OBJECTIVES AND POLICIES
The investment objectives of each of the Funds are in the following order of
priority--safety of principal, excellent liquidity and, to the extent consis-
tent with the first two objectives, maximum current income (exempt from income
taxation to the extent described below in the case of AMT-General). As a mat-
ter of fundamental policy, each Fund pursues its objectives by maintaining a
portfolio of high quality money market securities all of which at the time of
investment have remaining maturities of one year or less, which maturities may
extend to 397 days. While the fundamental policies described above and the
other fundamental investment policies described below may not be changed with-
out shareholder approval, each Fund may, upon notice to shareholders, but
without such approval, change non-fundamental investment policies or create
additional classes of shares in order to establish portfolios which may have
different investment objectives. There can be no assurance that any Fund's ob-
jectives will be achieved.
The Funds will comply with Rule 2a-7 ("Rule 2a-7") under the Investment Com-
pany Act of 1940, (the "1940 Act"), as amended from time to time, including
the diversification, quality and maturity limitations imposed by the Rule. The
average maturity of each Fund's portfolio cannot exceed 90 days. A more de-
tailed description of Rule 2a-7 is set forth in each Fund's Statement of Addi-
tional Information. To the extent that each Fund's limitations are more per-
missive than Rule 2a-7, each Fund will comply with the more restrictive
provisions of the Rule.
ALLIANCE CAPITAL RESERVES
The money market securities in which the Fund invests include: (1) marketable
obligations of, or guaranteed by, the United States Government, its agencies
or instrumentalities (collectively, the "U.S. Government"); (2) certificates
of deposit, bankers' acceptances and interest-bearing savings deposits issued
or guaranteed by banks or savings and loan associations having total assets of
more than $1 billion and which are members of the Federal Deposit Insurance
Corporation or denominated in U.S. dollars and issued by U.S. branches of for-
eign banks having total assets of at least $1 billion that are believed by the
Adviser to be of quality equivalent to that of other such instruments in which
the Fund may invest; (3) commercial paper, including variable amount master
demand notes, of prime quality [i.e., rated A-1+ or A-1 by Standard & Poor's
Corporation ("Standard & Poor's") or Prime-1 by Moody's Investors Service,
Inc. ("Moody's") or, if not rated, issued by companies having outstanding debt
securities rated AAA or AA by Standard & Poor's, or Aaa or Aa by Moody's] and
participation interests in loans extended by banks to such companies; and (4)
repurchase agreements that are collateralized fully as that term is defined in
Rule 2a-7 under the 1940 Act. These agreements are entered into with "primary
dealers" (as designated by the Federal Reserve Bank of New York) in U.S. Gov-
ernment securities or State Street Bank and Trust Company, the Fund's Custodi-
an, and would create a loss to the Fund if, in the event of a dealer default,
the proceeds from the sale of the collateral were less than the repurchase
price. The Fund may also invest in the types of instruments described in (2)
above issued or maintained at foreign branches of U.S. banks described in such
clause and prime quality dollar-denominated commercial paper issued by foreign
companies meeting the criteria specified in (3) above. The money market secu-
rities in which the Fund invests may have variable or floating rates of inter-
est ("variable rate obligations") as permitted by Rule 2a-7. Variable rate ob-
ligations have interest rates which are adjusted either at predesignated
periodic intervals or whenever there is a change in the market rate to which
the interest rate of the variable rate obligation is tied. Some variable rate
obligations allow the holder to demand payment of principal and accrued inter-
est at any time, or at specified intervals. The Fund follows Rule 2a-7 with
respect to the diversification, quality, and maturity of variable rate obliga-
tions.
To the extent the Fund purchases money market instruments issued by foreign
entities, consideration will be given due to the domestic marketability of
such instruments, and possible interruptions of, or restrictions on, the flow
of international currency transactions.
5
<PAGE>
The Fund may purchase restricted securities that are determined by the Ad-
viser to be liquid in accordance with procedures adopted by the Trustees of
the Fund, including securities eligible for resale under Rule 144A under the
Securities Act of 1933 (the "Securities Act") and commercial paper issued in
reliance upon the exemption from registration in Section 4(2) of the Securi-
ties Act. Restricted securities are securities subject to contractual or legal
restrictions on resale, such as those arising from an issuer's reliance upon
certain exemptions from registration under the Securities Act.
The Fund may also invest up to 10% of the value of its net assets in securi-
ties as to which a liquid trading market does not exist, provided such invest-
ments are consistent with the Fund's investment objectives. Such securities
may include securities that are not readily marketable, such as certain secu-
rities that are subject to legal or contractual restrictions on resale (other
than those restricted securities determined to be liquid as described above)
and repurchase agreements not terminable within seven days. As to illiquid se-
curities, the Fund is subject to a risk that should the Fund desire to sell
them when a ready buyer is not available at a price the Fund deems representa-
tive of their value, the value of the Fund's net assets could be adversely af-
fected.
The Fund may invest in asset-backed securities that meet its existing diver-
sification, quality and maturity criteria. Asset-backed securities are securi-
ties issued by special purpose entities whose primary assets consist of a pool
of loans or accounts receivable. The securities may be in the form of a bene-
ficial interest in a special purpose trust, limited partnership interest, or
commercial paper or other debt securities issued by a special purpose corpora-
tion. Although the securities may have some form of credit or liquidity en-
hancement, payments on the securities depend predominately upon collection of
the loans and receivables held by the issuer. It is the Fund's current inten-
tion to limit its investment in such securities to not more than 5% of its net
assets.
OTHER FUNDAMENTAL INVESTMENT POLICIES
To maintain portfolio diversification and reduce investment risk, the Fund
may not: (1) invest more than 25% of its assets in the securities of issuers
conducting their principal business activities in any one industry although
there is no such limitation with respect to U.S. Government securities or cer-
tificates of deposit, bankers' acceptances and interest bearing savings depos-
its; (2) invest more than 5% of its assets in securities of any one issuer
(except the U.S. Government) although with respect to 25% of its total assets
it may invest without regard to such limitation; (3) invest more than 5% of
its assets in the securities of any issuer (except the U.S. Government) having
less than three years of continuous operation or purchase more than 10% of any
class of the outstanding securities of any issuer (except the U.S. Govern-
ment); (4) borrow money except from banks on a temporary basis or via entering
into reverse repurchase agreements in aggregate amounts not exceeding 15% of
its assets and to facilitate the orderly maturation and sale of portfolio
securities during any periods of abnormally heavy redemption requests; (5)
mortgage, pledge or hypothecate its assets except to secure such borrowings;
or (6) enter into repurchase agreements, if as a result thereof, more than 10%
of the Fund's assets would be subject to repurchase agreements not terminable
within seven days.
As a matter of operating policy, the Fund may invest no more than 5% of its
total assets in the securities of any one issuer (as determined pursuant to
Rule 2a-7), except that the Fund may invest up to 25% of its total assets in
the first tier securities (as defined in Rule 2a-7) of a single issuer for a
period of up to three business days. Fundamental policy number (2) would give
the Fund the ability to invest, with respect to 25% of its assets, more than
5% of its assets in any one issuer only in the event Rule 2a-7 is amended in
the future.
ALLIANCE GOVERNMENT RESERVES
The securities in which the Fund invests are: (1) marketable obligations of,
or guaranteed by, the United States Government, its agencies or instrumentali-
ties (collectively, the "U.S. Government"), including issues of the United
States Treasury, such as bills, certificates of indebtedness, notes and bonds,
and issues of agencies and instrumentalities established under the authority
of an act of Congress; and (2) repurchase agreements that are collateralized
fully as that term is defined in Rule 2a-7 under the 1940 Act. These agree-
ments are entered into with "primary dealers" (as designated by the Federal
6
<PAGE>
Reserve Bank of New York) in U.S. Government securities or State Street Bank
and Trust Company, the Fund's Custodian, and would create a loss to the Fund
if, in the event of a dealer default, the proceeds from the sale of the col-
lateral were less than the repurchase price. The Fund may commit up to 15% of
its net assets to the purchase of when-issued U.S. Government securities,
whose value may fluctuate prior to their settlement, thereby creating an
unrealized gain or loss to the Fund. The money market securities in which the
Fund may invest may have variable or floating rates of interest ("variable
rate obligations") as permitted by Rule 2a-7. Variable rate obligations have
interest rates which are adjusted either at predesignated periodic intervals
or whenever there is a change in the market rate to which the interest rate of
the variable rate obligation is tied. Some variable rate obligations allow the
holder to demand payment of principal and accrued interest at any time, or at
specified intervals. The Fund follows Rule 2a-7 with respect to the diversifi-
cation, quality and maturity of variable rate obligations.
OTHER FUNDAMENTAL INVESTMENT POLICIES
To maintain portfolio diversification and reduce investment risk, the Fund
may not: (1) borrow money except from banks on a temporary basis or via enter-
ing into reverse repurchase agreements in aggregate amounts not exceeding 10%
of its assets and to be used exclusively to facilitate the orderly maturation
and sale of portfolio securities during any periods of abnormally heavy re-
demption 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; (2) pledge, hypothecate or in any manner transfer, as
security for indebtedness, its assets except to secure such borrowings; or (3)
enter into repurchase agreements if, as a result thereof, more than 10% of its
assets would be subject to repurchase agreements not terminable within seven
days.
ALLIANCE MUNICIPAL TRUST
The investment objectives of AMT-General are safety of principal, liquidity
and, to the extent consistent with these objectives, maximum current income
that is exempt from income taxation to the extent described below. Except when
AMT-General assumes a temporary defensive position, at least 80% of such Port-
folio's total assets will be invested in such securities (as opposed to the
taxable investments described below). Normally, substantially all of such
Portfolio's income will be tax-exempt as described below (e.g., for 1997, 100%
of the income of such Portfolio was exempt from Federal income taxes). The
Fund may in the future establish additional portfolios which may have differ-
ent investment objectives.
The General Portfolio seeks maximum current income that is exempt from Fed-
eral income taxes by investing principally in a diversified portfolio of high
quality municipal securities. Such income may be subject to state or local in-
come taxes.
AMT-General may invest without limitation in tax-exempt municipal securities
subject to the alternative minimum tax (the "AMT").
Under current Federal income tax law, (1) interest on tax-exempt municipal
securities issued after August 7, 1986 which are "specified private activity
bonds," and the proportionate share of any exempt-interest dividends paid by a
regulated investment company which receives interest from such specified pri-
vate activity bonds, will be treated as an item of tax preference for purposes
of the AMT imposed on individuals and corporations, though for regular Federal
income tax purposes such interest will remain fully tax-exempt, and (2) inter-
est on all tax-exempt obligations will be included in "adjusted current earn-
ings" of corporations for AMT purposes. Such bonds have provided, and may con-
tinue to provide, somewhat higher yields than other comparable municipal
securities. See below, "Daily Dividends, Other Distributions, Taxes."
MUNICIPAL SECURITIES
The municipal securities in which AMT-General invests include municipal notes
and short-term municipal bonds. Municipal notes are generally used to provide
for short-term capital needs and generally have maturities of one year or
less. Examples include tax anticipation and revenue anticipation notes, which
are generally issued in anticipation of various seasonal revenues, bond antic-
ipation notes, and tax-exempt commercial paper. Short-
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<PAGE>
term municipal bonds may include general obligation bonds, which are secured
by the issuer's pledge of its faith, credit and taxing power for payment of
principal and interest, and revenue bonds, which are generally paid from the
revenues of a particular facility or a specific excise or other source.
AMT-General may invest in variable rate obligations whose interest rates are
adjusted either at predesignated periodic intervals or whenever there is a
change in the market rate to which the security's interest rate is tied. Such
adjustments minimize changes in the market value of the obligation and, ac-
cordingly, enhance the ability of AMT-General to maintain a stable net asset
value. Variable rate securities purchased may include participation interests
in industrial development bonds backed by letters of credit of Federal Deposit
Insurance Corporation member banks having total assets of more than $1 bil-
lion. AMT-General will comply with Rule 2a-7 with respect to its investments
in variable rate obligations supported by letters of credit.
AMT-General's municipal securities at the time of purchase are rated within
the two highest quality ratings of Moody's Investors Service, Inc. (Aaa and
Aa, MIG 1 and MIG 2, or VMIG 1 and VMIG 2) or Standard & Poor's Corporation
(AAA and AA or SP-1 and SP-2), or judged by the Adviser to be of comparable
quality. Securities must also meet credit standards applied by the Adviser.
To further enhance the quality and liquidity of the securities in which AMT-
General invests, such securities frequently are supported by credit and li-
quidity enhancements, such as letters of credit, from third party financial
institutions. The Adviser continuously monitors the credit quality of such
third parties; however, changes in the credit quality of such a financial in-
stitution could cause AMT-General's investments backed by that institution to
lose value and affect AMT-General's share price.
AMT-General also may invest in stand-by commitments, which may involve cer-
tain expenses and risks, but such commitments are not expected to comprise
more than 5% of AMT-General's net assets. AMT-General may commit up to 15% of
its net assets to the purchase of when-issued securities. The Fund's custodian
will maintain, in a separate account of AMT-General, liquid assets having
value equal to, or greater than, such when-issued securities. The price of
when-issued securities, which is generally expressed in yield terms, is fixed
at the time the commitment to purchase is made, but delivery and payment for
such securities takes place at a later time. Normally the settlement date oc-
curs from within ten days to one month after the purchase of the issue. The
value of when-issued securities may fluctuate prior to their settlement,
thereby creating an unrealized gain or loss to AMT-General.
TAXABLE INVESTMENTS
The taxable investments in which AMT-General may invest include obligations
of the U.S. Government and its agencies, high quality certificates of deposit
and bankers' acceptances, prime commercial paper, and repurchase agreements.
OTHER INVESTMENT POLICIES
AMT-General will not invest more than 10% of its net assets in illiquid secu-
rities. As to these securities, AMT-General is subject to a risk that should
AMT-General desire to sell them when a ready buyer is not available at a price
AMT-General deems representative of their value, the value of AMT-General's
net assets could be adversely affected. Illiquid securities may include secu-
rities that are not readily marketable.
The following investment policies are fundamental policies with respect to
AMT-General. To reduce investment risk, AMT-General (i) may not invest more
than 25% of its total assets in municipal securities whose issuers are located
in the same state, and may not invest more than 25% of its total assets in mu-
nicipal securities the interest upon which is paid from revenues of similar-
type projects; (ii) AMT-General may not invest more than 5% of its total as-
sets in the securities of any one issuer except the U.S. Government, although
with respect to 25% of its total assets AMT-General may invest up to 10% per
issuer, and (iii) AMT-General may not purchase more than 10% of any class of
the voting securities of any one issuer except those of the U.S. Government.
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As a matter of operating policy, AMT-General may invest no more than 5% of
its assets in the securities of any one issuer (as determined pursuant to Rule
2a-7), except that AMT-General may invest up to 25% of its assets in the first
tier securities (as defined in Rule 2a-7 and described in the Statement of Ad-
ditional Information) of a single issuer for a period of up to three business
days. Fundamental policy number (i) with respect to the AMT-General Portfolio
would give AMT-General the investment latitude described therein only in the
event Rule 2a-7 is further amended in the future.
PURCHASE AND REDEMPTION OF SHARES
For more information on the purchase and redemption of each Fund's shares,
see such Fund's Statement of Additional Information.
PURCHASE OF SHARES
OPENING ACCOUNTS
Instruct your Account Executive to use ACR, AGR or AMT-General in conjunction
with your brokerage account.
SUBSEQUENT INVESTMENTS
A. BY CHECK THROUGH BUTLER, WICK
Mail or deliver your check or negotiable draft payable to "Butler, Wick &
Co." to your Account Executive who will deposit it into the Fund(s). Please
indicate your Fund account number on the check or draft.
B. BY SWEEP
Butler, Wick has available an automatic "sweep" for the Funds in the opera-
tion of brokerage accounts for its customers. Once your account is estab-
lished, all monies
coming into your cash account will be moved into your money maket fund account
daily.
C. BY CONTACTING YOUR ACCOUNT EXECUTIVE
Cash that has come into your brokerage account from proceeds of your securi-
ties sales or from any other source can be moved into your Fund account by
contacting your Account Executive either specifically each time that you know
there is a cash balance or by providing standing instructions to your Account
Executive to immediately move all such cash to the Funds.
REDEMPTIONS
A. BY CONTACTING YOUR ACCOUNT EXECUTIVE
Instruct your Account Executive to order a withdrawal from your Fund account
to purchase securities or to make payment with a Butler, Wick check either to
you or to your designated payee.
B. BY CHECKWRITING
With this service you may write checks made payable to any payee. Checks can-
not be written for more than the principal balance (not including any accrued
dividends) in your account. (Note: In the event that a check or other debit is
presented which exceeds the principal balance in the account, the account will
be assessed a $20 prepayment overdraft fee by Butler, Wick.) First you must
fill out the Signature Card which you can obtain from your Account Executive.
The checkwriting service enables you to receive the daily dividends declared
on the shares to be redeemed until the day that your check is presented for
payment. All check ordering must be handled through Butler, Wick. Please con-
tact your Account Executive when additional checks are needed.
ADDITIONAL INFORMATION
SHARE PRICE. Shares are sold and redeemed on a continuous basis without sales
or redemption charges at their net asset value which is expected to be con-
stant at $1.00 per share, although this price is not guaranteed. The net asset
value of each Fund's shares is determined each business day at 12:00 Noon and
4:00 p.m. (Eastern
9
<PAGE>
time). The net asset value per share of a Fund is calculated by taking the sum
of the value of that Fund's investments (amortized cost value is used for this
purpose) 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.
TIMING OF INVESTMENTS AND REDEMPTIONS. The Funds have two transaction times
each business day, 12:00 Noon and 4:00 p.m. (Eastern time). New investments
represented by Federal funds or bank wire monies received by State Street Bank
at any time during a day prior to 4:00 p.m. are entitled to the full dividend
to be paid to shareholders for that day. Shares do not earn dividends on the
day a redemption is effected regardless of whether the redemption order is re-
ceived before or after 12:00 Noon. However, if you wish to have Federal funds
wired the same day as your telephone redemption request, make sure that your
request will be received by the Fund prior to 12:00 Noon.
During drastic economic or market developments, you might have difficulty in
reaching Alliance Fund Services, Inc. by telephone in which event you should
issue written instructions to Alliance Fund Services, Inc. at the address
shown in this prospectus. Alliance Fund Services, Inc. is not responsible for
the authenticity of telephone requests to purchase or sell shares. Alliance
Fund Services, Inc. will employ reasonable procedures to verify that telephone
requests are genuine and could be liable for losses arising from unauthorized
transactions if it failed to do so. Dealers or agents may charge a commission
for handling telephone requests. The telephone service may be suspended or
terminated at anytime without notice.
Redemption proceeds are normally wired or mailed either the same or the next
business day, but in no event later than seven days, unless redemptions have
been suspended or postponed due to the determination of an "emergency" by the
Securities and Exchange Commission or to certain other unusual conditions.
DAILY DIVIDENDS, OTHER DISTRIBUTIONS, TAXES. All net income of each Fund is
determined each business day at 4:00 p.m. (Eastern time) and is paid immedi-
ately thereafter pro rata to shareholders of that Fund of record via automatic
investment in additional full and fractional shares of that Fund in each
shareholder's account. As such additional shares are entitled to dividends on
following days, a compounding growth of income occurs.
Net income consists of all accrued interest income on Fund assets less the
Fund's expenses applicable to that dividend period. Realized gains and losses
are reflected in its net asset value and are not included in net income.
Distributions to you out of tax-exempt interest income earned by AMT-General
are not subject to Federal income tax (other than the AMT), but may be subject
to state or local income taxes. Any exempt interest dividends derived from in-
terest on municipal securities subject to the AMT will be a specific prefer-
ence item for purposes of the Federal individual and corporate AMT. Distribu-
tions out of taxable interest income, other investment income, and short-term
capital gains are taxable to you as ordinary income and distributions of long-
term capital gains, if any, are taxable as long-term capital gains irrespec-
tive of the length of time you may have held your shares. Distributions of
short- and long-term capital gains, if any, are normally made near year-end.
Each year shortly after December 31, the Fund will send you tax information
stating the amount and type of all its distributions for the year just ended.
THE ADVISER. Each Fund retains Alliance Capital Management L.P., 1345 Avenue
of the Americas, New York, NY 10105, under separate Advisory Agreements to
provide investment advice and, in general, to supervise its management and in-
vestment program, subject to the general control of the Trustees of each Fund.
For the fiscal year ended June 30, 1998, ACR, AGR and AMT-General, each paid
the Adviser an advisory fee (net of reimbursement for AGR) at an annual rate
of .46, .46 and .50 of 1%, respectively, of the average daily value of the re-
spective Portfolio's net assets.
The Adviser is a leading international investment manager supervising client
accounts with assets as of June 30, 1998 of more than $262 billion (of which
more than $107 billion represented the assets of investment companies). The
Adviser's clients are primarily major
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<PAGE>
corporate employee benefit funds, public employee retirement systems, invest-
ment companies, foundations and endowment funds. The 58 registered investment
companies managed by the Adviser comprising 123 separate investment portfolios
currently have more than 3.5 million shareholders. As of June 30, 1998, the
Adviser was retained as an investment manager for employee benefit plan assets
for 32 of the FORTUNE 100 companies.
Alliance Capital Management Corporation, the sole general partner of, and the
owner of a 1% general partnership interest in, the Adviser, is an indirect
wholly owned subsidiary of The Equitable Life Assurance Society of the United
States, one of the largest life insurance companies in the United States,
which is a wholly-owned subsidiary of The Equitable Companies Incorporated, a
holding company controlled by AXA, a French insurance holding company. Certain
information concerning the ownership and control of Equitable by AXA is set
forth in each Fund's Statement of Additional Information under "Management of
the Fund."
Under a Distribution Services Agreement (the "Agreement"), each Fund pays the
Adviser at a maximum annual rate of .25 of 1% of the Fund's aggregate average
daily net assets. For the period ended June 30, 1998, ACR, AGR and AMT-General
each paid the Adviser a distribution services fee at an annual rate of .25 of
1% of the average daily value of the net assets of each Portfolio. Substan-
tially all such monies (together with significant amounts from the Adviser's
own resources) are paid by the Adviser to broker-dealers and other financial
intermediaries for their distribution assistance and to banks and other depos-
itory institutions for administrative and accounting services provided to the
Funds, with any remaining amounts being used to partially defray other ex-
penses incurred by the Adviser in distributing the Fund's shares. The Funds
believe that the administrative services provided by depository institutions
are permissible activities under present banking laws and regulations and will
take appropriate actions (which should not adversely affect the Fund or its
shareholders) in the future to maintain such legal conformity should any
changes in, or interpretations of, such laws or regulations occur.
The Adviser will reimburse each Fund to the extent that aggregate operating
expenses of that Fund (including the Adviser's fee and expenses incurred under
the Agreement) exceed 1% of its average daily net assets for any fiscal year.
CUSTODIAN, TRANSFER AGENT AND DISTRIBUTOR. State Street Bank and Trust Compa-
ny, P.O. Box 1912, Boston, MA 02105, is the Fund's Custodian. Alliance Fund
Services, Inc., P.O. Box 1520, Secaucus NJ 07096-1520, and Alliance Fund Dis-
tributors, Inc., 1345 Avenue of the Americas, New York, NY 10105, are the
Fund's Transfer Agent and Distributor, respectively. The transfer agent
charges a fee for its services.
YEAR 2000. Many computer systems and applications in use today process trans-
actions using two digit date fields for the year of the 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 computer system failures. This is
commonly known as the Year 2000 problem. Should any of the computer systems
employed by the Funds' major service providers fail to process Year 2000 in-
formation properly, that could have a significant negative impact on the
Funds' operations and the services that are provided to the Funds' sharehold-
ers.
With respect to the Year 2000, the Funds have been advised that the Adviser,
Distributor and Transfer Agent (collectively, "Alliance") began to address the
Year 2000 issue several years ago in connection with the replacement or up-
grading of certain computer systems and applications. During 1997, Alliance
began a formal Year 2000 initiative, which established a structured and coor-
dinated process to deal with the Year 2000 issue. Alliance reports that it has
completed its assessment of the Year 2000 issues on its domestic and interna-
tional computer systems and applications. Currently, management of Alliance
expects that the required modifications for the majority of its significant
systems and applications that will be in use on January 1, 2000, will be com-
pleted and tested by the end of 1998. Full integration testing of these sys-
tems and testing of interfaces with third-party suppliers will continue
through 1999. At this time, management of Alliance believes that the costs as-
sociated
11
<PAGE>
with resolving this issue will not have a material adverse effect on its oper-
ations or on its ability to provide the level of services it currently pro-
vides to the Funds.
The Funds and Alliance have been advised by the Funds' Custodian that it is
also in the process of reviewing its systems with the same goals. As of the
date of this prospectus, the Funds and Alliance have no reason to believe that
the Custodian will be unable to achieve these goals.
FUND ORGANIZATION. AGR and Alliance Treasury Reserves (not offered by this
prospectus) are series of Alliance Government Reserves which is a diversified
open-end management investment company registered under the 1940 Act. The Fund
was reorganized as a Massachusetts business trust in April 1984, having previ-
ously been a Maryland corporation since formation in December 1978. ACR and
Alliance Money Reserves (not offered by this prospectus) are series of Alli-
ance Capital Reserves, a diversified open-end management investment company
registered under the 1940 Act. The Fund was reorganized as a Massachusetts
business trust in October 1984, having previously been a Maryland corporation
since its formation in April 1978. AMT-General is a diversified series of Al-
liance Municipal Trust, which is also an open-end management investment com-
pany registered under the 1940 Act consisting of such series and seven other
series not offered by this prospectus. The Fund was reorganized as a Massachu-
setts business trust in April 1985, having previously been a Maryland corpora-
tion since its formation in January 1983. Each Fund's activities are super-
vised by its Trustees. Normally, shares of each series of Alliance Municipal
Trust, Alliance Government Reserves and Alliance Capital Reserves are entitled
to one vote per share, and vote as a single series, on matters that affect
each series in substantially the same manner. Massachusetts law does not re-
quire annual meetings of shareholders and it is anticipated that shareholder
meetings will be held only when required by Federal law. Shareholders have
available certain procedures for the removal of Trustees.
REPORTS. You receive semi-annual and annual reports for your Fund as well as
a monthly summary of your account.
Since this prospectus sets forth information about all the Funds, it is theo-
retically possible that a Fund might be liable for any materially inaccurate
or incomplete disclosure in this prospectus concerning another Fund. Based on
the advice of counsel, however, the Funds believe that the potential liability
of each Fund with respect to the disclosure in this prospectus extends only to
the disclosure relating to that Fund.
12
