SMITH BARNEY SHEARSON
GOVERNMENT AND AGENCIES FUND INC.
SUPPLEMENT TO PROSPECTUS
dated November 29, 1993
On May 25, 1994, the Board of Directors of Smith Barney Shearson
Government and Agencies Fund Inc. (the "Fund") approved a proposed
reorganization pursuant to which the assets of the Fund would be acquired
by Government Portfolio ("Government Portfolio"), a series of Smith Barney
Money Funds, Inc., through an exchange of shares of Government Portfolio
and the assumption by Government Portfolio of substantially all of the
Fund's liabilities. These shares would then be distributed to shareholders
of the Fund in liquidation of the Fund.
Under the terms of the proposed reorganization, each shareholder of
the Fund would become a shareholder of Government Portfolio, receiving
shares of Government Portfolio with a value equal to the value of the
shareholder's investment in the Fund in accordance with the terms of the
plan of reorganization. No sales charge would be imposed in the
transaction, although a gain or loss for Federal income tax purposes may be
recognized by shareholders as a result of the reorganization.
The proposed reorganization is subject to the fulfillment of certain
conditions, including the approval of shareholders of the Fund. Proxy
materials describing the proposed reorganization will be mailed to Fund
shareholders in anticipation of a meeting of shareholders expected to be
held in October of 1994. If approved by shareholders at that time, the
transaction will occur as soon after the meeting as practicable.
Dated: May 29, 1994
g\shared\domestic\clients\shearson\funds\sgai\merg.doc
