DREYFUS LIQUID ASSETS, INC.
LETTER TO SHAREHOLDERS
Dear Shareholder:
Dreyfus Liquid Assets completed its latest semi-annual fiscal period June
30, 1996, during which period interest rates initially declined, and then
began a rise that has lasted through the end of the reporting period.
We are pleased to report that the Fund provided an annualized yield of
4.73% to its shareholders for the six months. After taking into account the
effect of compounding, the annualized effective yield was 4.84%.*
THE ECONOMY
The U.S. economy is rebounding in 1996 following its midcycle growth
slowdown of last year. Yet overall corporate profit growth is slowing this
year. Although actual inflation remains steady, faster economic growth has
reignited fears of higher future inflation. This has pushed bond yields
higher and built expectations of a Federal Reserve Board tightening in coming
months.
Economic growth has accelerated since year-end. The first quarter's 2.3%
real Gross Domestic Product growth brought with it a demand rebound that
depleted inventories. Even stronger second quarter growth is apparent, led by
manufacturers' attempts to rebuild inventories. In addition, steady job
creation continues to support growth in consumer incomes and spending. As
yet, there are few indications of economic cooling. Some previously strong
capital goods sectors may now be slowing, but overall economic growth is
broadening to more industries. Despite better economic performance this year
than last, profit growth may have peaked last year.
Non-oil price inflation has remained tame this year, although surging oil
prices boosted overall inflation temporarily this spring. Nevertheless, signs
of a faster economic pace have reignited fears of higher future inflation,
especially coming from upward pressure on wages as the labor market tightens.
Thus, bond yields have risen substantially this year. Short-term market rates
are also higher in expectation of Federal Reserve tightening in coming
months. So far, long-term rates have risen much more than short-term rates,
forcing the yield curve to steepen. A steep yield curve is usually supportive
of sustained growth in the real economy.
As we look forward, the question arises whether the higher interest rates
already in place and those in prospect will effectively cool the economy. At
present, however, any advance signs of an eventual cooling off in the economy
are hard to discern. The preoccupation at present is with the economy's
impressive strength, and the problems such growth could create.
THE MONEY MARKET AND THE PORTFOLIO
During the latest six months, the money markets generally have reflected
the underlying economic conditions described in the preceding section.
At the end of January, shortly after the latest semi-annual fiscal period
began, the Federal Reserve Board, still concerned about slack in the economy,
lowered interest rates by one quarter of one percent. The Federal Funds rate
was set at 5 1/4% and the discount rate at 5%.
As the previous year ended and a new one began, we had prepared the
portfolio for the possibility of lower rates, by extending average
maturities.
After the Fed's January 31 action, economic statistics began to indicate
that business activity was accelerating. By springtime this was beginning to
change the course of interest rates. Short-term yields started firming. In
recognition of this market trend, we began gradually to shorten average
maturities as opportunities arose. To make the Fund's returns as attractive
as possible, we tried to maintain maturities that were a bit longer than the
market average. However, in the face of rising concern about a possible
revival of inflation, average maturities were reduced as the year proceeded.
Currently, the market clearly expects another change in course by the
Federal Reserve. The central bank has not revised its interest rate targets
since late January. Accordingly, we have been positioning the portfolio for
the possibility of higher rates.
The political season is now getting underway with a vengeance, with the
two major party conventions scheduled for August, followed by the election
campaign itself. This also must be factored into the interest rate equation.
Recent history demonstrates, however, that political nominating conventions
in past years have not dissuaded the Federal Reserve from taking any action
it deems necessary to manage the money supply and interest rates.
We appreciate the opportunity to manage money on your behalf and will
continue our best efforts to bring you rewarding returns.
Sincerely,
[Patricia A. Larkin signature logo]
Patricia A. Larkin
Senior Portfolio Manager
July 18, 1996
New York, N.Y.
* Annualized effective yield is based upon dividends declared daily and
reinvested daily.
<TABLE>
<CAPTION>
DREYFUS LIQUID ASSETS, INC.
STATEMENT OF INVESTMENTS JUNE 30, 1996 (UNAUDITED)
PRINCIPAL
NEGOTIABLE BANK CERTIFICATES OF DEPOSIT-6.7% AMOUNT VALUE
________ ________
<S> <C> <C>
Chase Manhattan Bank N.A.
5.25%-5.40%, 9/20/96-10/17/96........................................... $ 70,000,000 $ 70,000,000
Old Kent Bank & Trust Co.
4.80%, 2/28/97.......................................................... 10,000,000 10,151,883
Union Bank of California
5.05%-5.46%, 7/22/96-9/13/96............................................ 220,000,000 220,000,000
_______
TOTAL NEGOTIABLE BANK CERTIFICATES OF DEPOSIT
(cost $300,151,883)..................................................... $300,151,883
========
BANKERS' ACCEPTANCE-.2%
First National Bank of Boston
5.62%, 11/25/96-11/26/96
(cost $8,797,545)....................................................... $ 9,000,000 $8,797,545
========
COMMERCIAL PAPER-48.5%
AT&T Corp.
5.24%, 7/31/96.......................................................... $ 20,000,000 $19,915,000
BHF Finance (Delaware) Inc.
5.01%-5.61%, 8/20/96-2/14/97............................................ 70,000,000 68,842,542
Bankers Trust New York Corp.
5.42%, 7/8/96........................................................... 75,000,000 74,923,073
Bear Stearns Companies Inc.
5.06%, 7/22/96.......................................................... 35,000,000 34,898,937
Chase Manhattan Corp.
5.41%-5.59%, 9/11/96-2/21/97............................................ 145,000,000 142,094,482
Den Danske Corp. Inc.
5.20%-5.63%, 7/22/96-12/27/96........................................... 190,000,000 186,657,952
Dresdner U.S. Finance, Inc.
5.50%, 1/17/97.......................................................... 100,000,000 97,066,666
First National Bank of Boston
5.41%, 8/12/96.......................................................... 7,000,000 6,956,227
Ford Motor Credit Co.
5.52%, 10/24/96......................................................... 50,000,000 49,134,305
General Electric Capital Corp.
5.03%-5.62%, 7/19/96-12/26/96........................................... 220,000,000 216,197,039
General Electric Capital Services, Inc.
5.22%-5.74%, 7/19/96-2/28/97............................................ 135,000,000 132,040,560
General Motors Acceptance Corp.
5.24%-5.63%, 7/19/96-12/27/96........................................... 220,000,000 217,177,897
Lehman Brothers Holdings, Inc.
5.45%-5.74%, 7/10/96-2/14/97............................................ 175,000,000 171,141,450
Maguire/Thomas Partners, Westlake Southlake Partnership
5.49%, 7/11/96.......................................................... 28,410,000 28,367,227
DREYFUS LIQUID ASSETS, INC.
STATEMENT OF INVESTMENTS (CONTINUED) JUNE 30, 1996 (UNAUDITED)
PRINCIPAL
COMMERCIAL PAPER (CONTINUED) AMOUNT VALUE
________ ________
Merrill Lynch & Co., Inc.
5.18%-5.43%, 7/29/96-9/6/96............................................. $ 125,000,000 $124,059,632
Mitsubishi Motors Credit of America, Inc.
5.43%-5.45%, 7/1/96-8/2/96 (a).......................................... 100,000,000 99,713,067
NationsBank Corp.
5.61%, 11/15/96......................................................... 25,000,000 24,478,639
Paine Webber Group Inc.
5.50%-5.53%, 8/1/96-9/16/96............................................. 95,000,000 94,170,801
Sears Roebuck Acceptance Corp.
5.40%-5.57%, 8/6/96-2/21/97............................................. 75,000,000 73,860,410
Societe Generale North America, Inc.
5.15%, 7/22/96.......................................................... 33,000,000 32,903,173
Swedbank, Inc.
5.32%-5.64%, 7/18/96-12/23/96........................................... 220,000,000 216,029,654
The Walt Disney Co.
5.60%, 12/16/96......................................................... 50,000,000 48,728,333
_______
TOTAL COMMERCIAL PAPER (cost $2,159,357,066)................................ $2,159,357,066
========
CORPORATE NOTES-12.8%
Bear Stearns Companies Inc.
5.40%-5.58%, 7/11/96-11/18/96 (b)....................................... $ 175,000,000 $175,000,000
CIT Group Holdings, Inc.
5.40%, 12/23/96 (b)..................................................... 125,000,000 124,930,515
General Motors Acceptance Corp.
5.69%, 2/3/97........................................................... 12,500,000 12,641,015
Lehman Brothers Holdings, Inc.
5.50%, 1/6/97 (b)....................................................... 50,000,000 50,000,000
Merrill Lynch & Co., Inc.
5.38%-5.50%, 2/13/97-7/2/97 (b)......................................... 105,000,000 104,991,632
PHH Corp.
5.38%, 9/18/96 (b)...................................................... 100,000,000 99,991,582
_______-
TOTAL CORPORATE NOTES (cost $567,554,744)................................... $ 567,554,744
========
SHORT-TERM BANK NOTES-10.3%
Bank of America Illinois
5.62%, 12/23/96......................................................... $ 45,000,000 $ 45,000,000
Comerica Bank
5.74%, 5/13/97.......................................................... 50,000,000 50,004,657
5.36%-5.37%, 9/18/96-2/14/97 (b)........................................ 100,000,000 99,982,778
First National Bank of Boston
5.36%-5.44%, 7/12/96-11/18/96 (b)....................................... 80,000,000 80,000,000
NationsBank, N.A.
5.73%, 4/30/97.......................................................... 50,000,000 49,972,159
DREYFUS LIQUID ASSETS, INC.
STATEMENT OF INVESTMENTS (CONTINUED) JUNE 30, 1996 (UNAUDITED)
PRINCIPAL
SHORT-TERM BANK NOTES (CONTINUED) AMOUNT VALUE
________ ________
PNC Bank, N.A.
5.50%, 9/18/96.......................................................... $ 10,000,000 $ 10,001,612
5.44%-5.49%, 7/29/96-5/15/97 (b)........................................ 100,000,000 99,956,378
Society National Bank, Cleveland
5.92%, 5/21/97 ......................................................... 25,000,000 25,000,000
_______
TOTAL SHORT-TERM BANK NOTES (cost $459,917,584)............................. $ 459,917,584
========
U.S. GOVERNMENT AGENCIES-16.1%
Federal Farm Credit Banks, Floating Rate Notes
5.32%-5.33%, 8/14/96-12/30/96 (b)....................................... $ 200,000,000 $199,927,692
Federal Home Loan Banks, Discount Notes
5.52%, 7/1/96........................................................... 18,000,000 18,000,000
Federal Home Loan Banks, Floating Rate Notes
5.40%, 4/27/98 (b)...................................................... 50,000,000 50,136,887
Federal National Mortgage Association, Floating Rate Notes
5.32%-5.43%, 9/27/96-7/25/97 (b)........................................ 450,000,000 449,964,378
_______
TOTAL U.S. GOVERNMENT AGENCIES (cost $718,028,957).......................... $718,028,957
========
TIME DEPOSIT-.4%
Republic National Bank of New York (London)
5.37%, 7/1/96
(cost $16,886,000) ..................................................... $ 16,886,000 $ 16,886,000
========
REPURCHASE AGREEMENTS-5.2%
Nomura Securities International
5.38%, dated 6/28/96, due 7/1/96 in the amount of
$83,299,294 (fully collateralized by $88,500,000 U.S.
Treasury Bills due from 3/6/97 to 5/29/97, value $84,983,646)........... $ 83,262,000 $ 83,262,000
SBC Capital Markets
5.20%, dated 6/28/96, due 7/1/96 in the amount of
$150,065,000 (fully collateralized by $161,907,000 U.S.
Treasury Bills due 6/26/97, value $153,107,489)......................... 150,000,000 150,000,000
_______
TOTAL REPURCHASE AGREEMENTS (cost $233,262,000)............................. $ 233,262,000
========
TOTAL INVESTMENTS (cost $4,463,955,779)............................. 100.2% $4,463,955,779
====== ========
LIABILITIES, LESS CASH AND RECEIVABLES ............................. (.2%) $ (7,833,589)
====== ========
NET ASSETS ......................................................... 100.0% $4,456,122,190
====== ========
NOTE TO STATEMENT OF INVESTMENTS;
(a) Backed by an irrevocable letter of credit.
(b) Variable interest rate - subject to periodic change.
See independent accountants' review report and notes to financial statements.
DREYFUS LIQUID ASSETS, INC.
STATEMENT OF ASSETS AND LIABILITIES JUNE 30, 1996 (UNAUDITED)
ASSETS:
Investments in securities, at value-Note 1(a,b)......................... $4,463,955,779
Interest receivable..................................................... 18,787,352
Prepaid expenses and other assets....................................... 1,203,289
_______
4,483,946,420
LIABILITIES:
Due to The Dreyfus Corporation and affiliates........................... $ 1,792,772
Due to Custodian........................................................ 25,236,746
Accrued expenses........................................................ 794,712 27,824,230
______ _______
NET ASSETS ................................................................ $4,456,122,190
========
REPRESENTED BY:
Paid-in capital......................................................... $4,457,106,929
Accumulated undistributed investment income-net......................... 1,156,473
Accumulated net realized (loss) on investments.......................... (2,141,212)
_______
NET ASSETS at value applicable to 4,457,982,567 shares outstanding
(25 billion shares of $.10 par value Common Stock authorized)........... $4,456,122,190
========
NET ASSET VALUE, offering and redemption price per share
($4,456,122,190 / 4,457,982,567 shares)................................. $1.00
========
STATEMENT OF OPERATIONS SIX MONTHS ENDED JUNE 30, 1996 (UNAUDITED)
INVESTMENT INCOME:
INTEREST INCOME......................................................... $ 126,293,951
EXPENSES:
Management fee-Note 2(a).............................................. $10,846,399
Shareholder servicing costs-Note 2(b)................................. 6,425,283
Custodian fees........................................................ 128,569
Prospectus and shareholders' reports.................................. 109,180
Professional fees..................................................... 47,030
Registration fees..................................................... 46,023
Directors' fees and expenses-Note 2(c)................................ 41,928
Miscellaneous......................................................... 125,837
______
TOTAL EXPENSES.................................................... 17,770,249
Less-reduction in management fee due to undertaking-Note 2(a)......... 188,735
______
NET EXPENSES...................................................... 17,581,514
_______-
INVESTMENT INCOME-NET....................................................... 108,712,437
NET REALIZED GAIN ON INVESTMENTS-Note 1(b).................................. 39,815
_______
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $ 108,752,252
========
See independent accountants' review report and notes to financial statements.
DREYFUS LIQUID ASSETS, INC.
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED SIX MONTHS ENDED
DECEMBER 31, JUNE 30, 1996
1995 (UNAUDITED)
_________ _________
OPERATIONS:
Investment income-net............................................... $ 246,487,807 $ 108,712,437
Net realized gain on investments.................................... 1,371,818 39,815
________ ________
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.............. 247,859,625 108,752,252
________ ________
DIVIDENDS TO SHAREHOLDERS FROM;
Investment income-net............................................... (245,910,562) (108,786,111)
________ ________
CAPITAL STOCK TRANSACTIONS ($1.00 per share):
Net proceeds from shares sold....................................... 16,013,690,375 9,558,648,696
Dividends reinvested................................................ 244,666,772 108,108,633
Cost of shares redeemed............................................. (16,663,741,867) (9,670,539,504)
________ ________
(DECREASE) IN NET ASSETS FROM CAPITAL STOCK TRANSACTIONS.......... (405,384,720) (3,782,175)
________ ________
TOTAL (DECREASE) IN NET ASSETS................................ (403,435,657) (3,816,034)
NET ASSETS:
Beginning of period................................................. 4,863,373,881 4,459,938,224
________ ________
End of period (including undistributed investment income-net:
$1,230,147 in 1995 and $1,156,473 in 1996)........................ $ 4,459,938,224 $ 4,456,122,190
======== =========
</TABLE>
See independent accountants' review report and notes to financial statements.
DREYFUS LIQUID ASSETS, INC.
FINANCIAL HIGHLIGHTS
Contained below is per share operating performance data for a share of
Common Stock outstanding, total investment return, ratios to average net
assets and other supplemental data for each period indicated. This
information has been derived from the Fund's financial statements.
<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEAR ENDED DECEMBER 31, JUNE 30, 1996
-----------------------------------------------------
PER SHARE DATA: 1991 1992 1993 1994 1995 (UNAUDITED)
---- ---- ---- ---- ---- ------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period.. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
---- ---- ---- ---- ---- ------
INVESTMENT OPERATIONS;
Investment income-net................. .057 .034 .026 .035 .053 .024
---- ---- ---- ---- ---- ------
DISTRIBUTIONS;
Dividends from investment income-net.. (.057) (.034) (.026) (.035) (.053) (.024)
---- ---- ---- ---- ---- ------
Net asset value, end of period........ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
==== ==== ==== ==== ==== ====
TOTAL INVESTMENT RETURN................... 5.87% 3.47% 2.64% 3.53% 5.45% 4.77%*
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets .67% .72% .77% .76% .79% .76%*
Ratio of net investment income to
average net assets.................. 5.75% 3.43% 2.62% 3.49% 5.33% 4.71%*
Decrease in above expense ratios
due to undertaking by the Manager... -- -- -- -- -- .01%*
Net Assets, end of period (000's Omitted) $6,200,255 $5,502,100 $4,828,134 $4,863,374 $4,459,938 $4,456,122
*Annualized.
</TABLE>
See independent accountants' review report and notes to financial statements.
DREYFUS LIQUID ASSETS, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES:
Dreyfus Liquid Assets, Inc. (the "Fund") is registered under the
Investment Company Act of 1940 ("Act") as a diversified open-end management
investment company. The Fund's investment objective is to provide investors
with as high a level of current income as is consistent with the preservation
of capital. The Dreyfus Corporation ("Manager") serves as the Fund's
investment adviser. The Manager is a direct subsidiary of Mellon Bank, N.A.
Premier Mutual Fund Services, Inc. (the "Distributor") acts as the distributor
of the Fund's shares, which are sold to the public without a sales charge.
It is the Fund's policy to maintain a continuous net asset value per
share of $1.00; the Fund has adopted certain investment, portfolio valuation
and dividend and distribution policies to enable it to do so. There is no
assurance, however, that the Fund will be able to maintain a stable net asset
value of $1.00.
(A) PORTFOLIO VALUATION: Investments are valued at amortized cost, which
has been determined by the Fund's Board of Directors to represent the fair
value of the Fund's investments.
(B) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities
transactions are recorded on a trade date basis. Realized gain and loss from
securities transactions are recorded on the identified cost basis. Interest
income is recognized on the accrual basis. Cost of investments represents
amortized cost.
The Fund may enter into repurchase agreements with financial
institutions, deemed to be creditworthy by the Fund's Manager, subject to the
seller's agreement to repurchase and the Fund's agreement to resell such
securities at a mutually agreed upon price. Securities purchased subject to
repurchase agreements are deposited with the Fund's custodian and, pursuant
to the terms of the repurchase agreement, must have an aggregate market value
greater than or equal to the repurchase price plus accrued interest at all
times. If the value of the underlying securities falls below the value of the
repurchase price plus accrued interest, the Fund will require the seller to
deposit additional collateral by the next business day. If the request for
additional collateral is not met, or the seller defaults on its repurchase
obligation, the Fund maintains the right to sell the underlying securities at
market value and may claim any resulting loss against the seller.
(C) DIVIDENDS TO SHAREHOLDERS: It is the policy of the Fund to declare
and pay dividends from investment income-net on each business day. Dividends
from net realized capital gain are normally declared and paid annually, but
the Fund may make distributions on a more frequent basis to comply with the
distribution requirements of the Internal Revenue Code. To the extent that
net realized capital gain can be offset by capital loss carryovers, it is the
policy of the Fund not to distribute such gain.
On July 1, 1996, the Fund declared a cash dividend of approximately
$.0004 per share from undistributed investment income-net which includes
investment income-net for Saturday, June 29, 1996 and Sunday, June 30, 1996.
(D) FEDERAL INCOME TAXES: It is the policy of the Fund to continue to
qualify as a regulated investment company, if such qualification is in the
best interests of its shareholders, by complying with the applicable
provisions of the Internal Revenue Code, and to make distributions of taxable
income sufficient to relieve it from substantially all Federal income and
excise taxes.
DREYFUS LIQUID ASSETS, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
The Fund has an unused capital loss carryover of approximately $2,181,000
available for Federal income tax purposes to be
applied against future net securities profits, if any, realized subsequent to
December 31, 1995. If not applied, $2,110,000 expires in 1997 and $71,000
expires in 1998.
At June 30, 1996, the cost of investments for Federal income tax purposes
was substantially the same as the cost for financial reporting purposes (see
the Statement of Investments).
NOTE 2-MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES:
(A) Pursuant to a management agreement ("Agreement") with the Manager,
the management fee is based on the value of the Fund's average daily net
assets and is computed at the following annual rates: 1/2 of 1% of the first
$1.5 billion; 48/100ths of 1% of the next $500 million; 47/100ths of 1% of
the next $500 million; and 45/100ths of 1% over $2.5 billion. The fee is
payable monthly.
The Agreement provides for an expense reimbursement from the Manager
should the Fund's aggregate expenses, exclusive of taxes, brokerage, interest
on borrowings and extraordinary expenses, exceed 1% of the average value of
the Fund's net assets for any full year. However, the Manager has undertaken
from June 1, 1996 through December 31, 1997 to reduce the management fee paid
by, or reimburse such excess expenses of the Fund, to the extent that the
Fund's aggregate annual expenses (exclusive of certain expenses as described
above) exceed an annual rate of .75 of 1% of the value of the Fund's average
daily net assets. The reduction in management fee, pursuant to the
undertaking, amounted to $188,735 during the period ended June 30, 1996.
(B) Pursuant to the Fund's Shareholder Services Plan, the Fund reimburses
Dreyfus Service Corporation, a wholly-owned subsidiary of the Manager, an
amount not to exceed an annual rate of .25 of 1% of the value of the Fund's
average daily net assets for certain allocated expenses of providing personal
services and/or maintaining shareholder accounts. The services provided may
include personal services relating to shareholder accounts, such as answering
shareholder inquiries regarding the Fund and providing reports and other
information, and services related to the maintenance of shareholder accounts.
During the six months ended June 30, 1996, the Fund was charged an aggregate
of $2,667,015 pursuant to the Shareholder Services Plan.
The Fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of
the Manager, under a transfer agency agreement for providing personnel and
facilities to perform transfer agency services for the Fund. Such
compensation amounted to $2,384,643 during the six months ended June 30,
1996.
(C) Each director who is not an "affiliated person" as defined in the Act
receives from the Fund an annual fee of $6,500 and an attendance fee of $500
per meeting. The Chairman of the Board receives an additional 25% of such
compensation.
DREYFUS LIQUID ASSETS, INC.
REVIEW REPORT OF ERNST & YOUNG LLP, INDEPENDENT ACCOUNTANTS
SHAREHOLDERS AND BOARD OF DIRECTORS
DREYFUS LIQUID ASSETS, INC.
We have reviewed the accompanying statement of assets and liabilities of
Dreyfus Liquid Assets, Inc., including the statement of investments, as of
June 30, 1996, and the related statements of operations and changes in net
assets and financial highlights for the six month period ended June 30, 1996.
These financial statements and financial highlights are the responsibility of
the Fund's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures
to financial data, and making inquiries of persons responsible for financial
and accounting matters. It is substantially less in scope than an audit
conducted in accordance with generally accepted auditing standards, which
will be performed for the full year with the objective of expressing an
opinion regarding the financial statements and financial highlights taken as
a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to the interim financial statements and financial highlights
referred to above for them to be in conformity with generally accepted
accounting principles.
We have previously audited, in accordance with generally accepted
auditing standards, the statement of changes in net assets for the year ended
December 31, 1995 and financial highlights for each of the five years in the
period ended December 31, 1995 and in our report dated February 2, 1996, we
expressed an unqualified opinion on such statement of changes in net assets
and financial highlights.
[Ernst and Young LLP signature logo]
New York, New York
August 1, 1996
[Dreyfus lion "d" logo]
DREYFUS LIQUID ASSETS, INC.
200 Park Avenue
New York, NY 10166
MANAGER
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
CUSTODIAN
The Bank of New York
90 Washington Street
New York, NY 10286
TRANSFER AGENT &
DIVIDEND DISBURSING AGENT
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Printed in U.S.A. 039AR966
[Dreyfus logo]
Liquid
Assets, Inc.
Semi-Annual
Report
June 30, 1996
