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<PAGE> PAGE 2
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SIGNATURE LAURA FERGERSON
TITLE ASSISTANT TREASURER
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE FRANKLIN
TAX-EXEMPT MONEY FUND JULY 31, 1998 ANNUAL REPORT AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUL-31-1998
<PERIOD-END> JUL-31-1998
<INVESTMENTS-AT-COST> 163,696,285
<INVESTMENTS-AT-VALUE> 163,696,285
<RECEIVABLES> 1,098,332
<ASSETS-OTHER> 214,774
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 165,009,391
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 484,256
<TOTAL-LIABILITIES> 484,256
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 164,525,135
<SHARES-COMMON-PRIOR> 161,037,791
<ACCUMULATED-NII-CURRENT> 0
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<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 164,525,135
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 5,836,320
<OTHER-INCOME> 0
<EXPENSES-NET> (1,058,093)
<NET-INVESTMENT-INCOME> 4,778,127
<REALIZED-GAINS-CURRENT> 1,693
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 4,779,820
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (4,779,820)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 358,177,980
<NUMBER-OF-SHARES-REDEEMED> (359,483,372)
<SHARES-REINVESTED> 4,792,736
<NET-CHANGE-IN-ASSETS> 3,487,344
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> (174,317)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (232,931)
<AVERAGE-NET-ASSETS> 162,733,042
<PER-SHARE-NAV-BEGIN> 1.000
<PER-SHARE-NII> 0.029
<PER-SHARE-GAIN-APPREC> 0.000
<PER-SHARE-DIVIDEND> (0.029)
<PER-SHARE-DISTRIBUTIONS> 0.000
<RETURNS-OF-CAPITAL> 0
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<EXPENSE-RATIO> .650
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<AVG-DEBT-PER-SHARE> 0.000
</TABLE>
REPORT OF INDEPENDENT AUDITORS
To the Shareholders and Board of Directors of
Franklin Tax-Exempt Money Fund:
In planning and performing our audit of the
financial statements of Franklin Tax-Exempt
Money Fund for the year ended
July 31, 1998, we considered its internal
control, including controls over safeguarding
securities, in order to determine our auditing
procedures for the purpose of expressing our
opinion on the financial statements and to
comply with the requirements of Form N-SAR,
not to provide assurance on internal control.
The management of the Franklin Tax-Exempt
Money Fund is responsible for establishing
and maintaining internal control. In fulfilling
this responsibility, estimates and judgments
by management are required to assess the
expected benefits and related costs of controls.
Generally, controls that are relevant to an
audit pertain to the entity's objective of
preparing financial statements for external
purposes that are fairly presented in
conformity with generally accepted accounting
principles. Those controls include the
safeguarding of assets against unauthorized
acquisition, use, or disposition.
Because of inherent limitations in internal
control, errors or irregularities may occur
and may not be detected. Also, projection
of any evaluation of internal control to
future periods is subject to the risk that
it may become inadequate because of changes
in conditions or that the effectiveness of
the design and operation may deteriorate.
Our consideration of internal control would not
necessarily disclose all matters in internal
control that might be material weaknesses
under standards established by the American
Institute of Certified Public Accountants. A
material weakness is a condition in which the
design or operation of any specific internal
control component does not reduce to a
relatively low level the risk that errors or
irregularities in amounts that would be
material in relation to the financial
statements being audited may occur and not be
detected within a timely period by employees
in the normal course of performing their
assigned functions. However, we noted no
matters involving internal control, including
controls over safeguarding securities, that we
consider to be material weaknesses as defined
above, as of July 31, 1998.
This report is intended solely for the
information and use of management and the
Securities and Exchange Commission.
S\PricewaterhouseCoopers LLP
San Francisco, California
September 4, 1998