GENERAL MONEY MARKET FUND, INC.
CLASS A AND CLASS B
PART B
(STATEMENT OF ADDITIONAL INFORMATION)
JUNE 3, 1996
This Statement of Additional Information, which is not a prospectus,
supplements and should be read in conjunction with the current Prospectus
of General Money Market Fund, Inc. (the "Fund"), dated June 3, 1996, as it
may be revised from time to time. To obtain a copy of the Fund's
Prospectus, please write to the Fund at 144 Glenn Curtiss Boulevard,
Uniondale, New York 11556-0144, or call the following numbers:
Call Toll Free 1-800-645-6561
In New York City -- Call 1-718-895-1396
Outside the U.S. and Canada -- Call 516-794-5452
The Dreyfus Corporation (the "Manager") serves as the Fund's
investment adviser.
Premier Mutual Fund Services, Inc. (the "Distributor") is the
distributor of the Fund's shares.
TABLE OF CONTENTS
Page
Investment Objective and Management Policies. . . . . . . . B-2
Management of the Fund. . . . . . . . . . . . . . . . . . . B-5
Management Agreement. . . . . . . . . . . . . . . . . . . . B-9
Purchase of Shares. . . . . . . . . . . . . . . . . . . . . B-10
Service Plan and Distribution Plan. . . . . . . . . . . . . B-11
Shareholder Services Plans. . . . . . . . . . . . . . . . . B-12
Redemption of Shares. . . . . . . . . . . . . . . . . . . . B-13
Shareholder Services. . . . . . . . . . . . . . . . . . . . B-15
Determination of Net Asset Value. . . . . . . . . . . . . . B-18
Dividends, Distributions and Taxes. . . . . . . . . . . . . B-19
Yield Information . . . . . . . . . . . . . . . . . . . . . B-19
Portfolio Transactions. . . . . . . . . . . . . . . . . . . B-20
Information About the Fund. . . . . . . . . . . . . . . . . B-20
Transfer and Dividend Disbursing Agent, Custodian,
Counsel and Independent Auditors. . . . . . . . . . . . . B-21
Appendix. . . . . . . . . . . . . . . . . . . . . . . . . . B-22
Financial Statements. . . . . . . . . . . . . . . . . . . . B-25
Report of Independent Auditors. . . . . . . . . . . . . . . B-35
INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES
The following information supplements and should be read in
conjunction with the sections in the Fund's Prospectus entitled
"Description of the Fund" and "Appendix."
Portfolio Securities
Bank Obligations. As a result of Federal and state laws and
regulations, domestic banks whose certificates of deposit ("CDs") may be
purchased by the Fund are, among other things, generally required to
maintain specified levels of reserves, and are subject to other supervision
and regulation designed to promote financial soundness. However, not all
of such laws and regulations apply to the foreign branches of domestic
banks. Domestic commercial banks organized under Federal law are
supervised and examined by the Comptroller of the Currency and are required
to be members of the Federal Reserve System and to have their deposits
insured by the Federal Deposit Insurance Corporation (the "FDIC").
Domestic banks organized under state law are supervised and examined by
state banking authorities but are members of the Federal Reserve System
only if they elect to join. In addition, state banks whose CDs may be
purchased by the Fund are insured by the Bank Insurance Fund administered
by the FDIC (although such insurance may not be of material benefit to the
Fund, depending upon the principal amount of the CDs of each bank held by
the Fund) and are subject to Federal examination and to a substantial body
of Federal law and regulation.
Obligations of foreign branches of domestic banks, foreign
subsidiaries of domestic banks and domestic and foreign branches of foreign
banks, such as CDs and time deposits ("TDs"), may be general obligations of
the parent banks in addition to the issuing branch, or may be limited by
the terms of a specific obligation and governmental regulation. Such
obligations are subject to different risks than are those of domestic
banks. These risks include foreign economic and political developments,
foreign governmental restrictions that may adversely affect payment of
principal and interest on the obligations, foreign exchange controls and
foreign withholding and other taxes on interest income. These foreign
branches and subsidiaries are not necessarily subject to the same or
similar regulatory requirements as apply to domestic banks, such as
mandatory reserve requirements, loan limitations, and accounting, auditing
and financial recordkeeping requirements. In addition, less information
may be publicly available about a foreign branch of a domestic bank or
about a foreign bank than about a domestic bank.
Obligations of United States branches of foreign banks may be general
obligations of the parent bank in addition to the issuing branch, or may be
limited by the terms of a specific obligation or by Federal and state
regulation as well as governmental action in the country in which the
foreign bank has its head office. A domestic branch of a foreign bank with
assets in excess of one billion dollars may or may not be subject to
reserve requirements imposed by the Federal Reserve System or by the state
in which the branch is located if the branch is licensed in that state.
In addition, Federal branches licensed by the Comptroller of the
Currency and branches licensed by certain states ("State Branches") may or
may not be required to: (1) pledge to the regulator, by depositing assets
with a designated bank within the state, a certain amount of their assets
as fixed from time to time by the appropriate regulatory authority; and (2)
maintain assets within the state in an amount equal to a specified
percentage of the aggregate amount of liabilities of the foreign bank
payable at or through all of its agencies or branches within the state.
The deposits of Federal or State Branches generally must be insured by the
FDIC if such branches take deposits of less than $100,000.
In view of the foregoing factors associated with the purchase of CDs
and TDs issued by foreign branches of domestic banks, by foreign
subsidiaries of domestic banks, by foreign branches of foreign banks or by
domestic branches of foreign banks, the Manager carefully evaluates such
investments on a case-by-case basis.
The Fund may purchase CDs issued by banks, savings and loan
associations and similar thrift institutions with less than one billion
dollars in assets, the deposits of which are insured by the FDIC, provided
the Fund purchases any such CD in a principal amount of no more than
$100,000, which amount would be fully insured by the Bank Insurance Fund or
the Savings Association Insurance Fund administered by the FDIC. Interest
payments on such a CD are not insured by the FDIC. The Fund will not own
more than one such CD per such issuer.
Repurchase Agreements. The Fund's custodian or sub-custodian will
have custody of, and will hold in a segregated account, securities acquired
by the Fund under a repurchase agreement. Repurchase agreements are
considered by the staff of the Securities and Exchange Commission to be
loans by the Fund. In an attempt to reduce the risk of incurring a loss on
a repurchase agreement, the Fund will enter into repurchase agreements only
with domestic banks with total assets in excess of $1 billion, or primary
government securities dealers reporting to the Federal Reserve Bank of New
York, with respect to securities of the type in which the Fund may invest,
and will require that additional securities be deposited with it if the
value of the securities purchased should decrease below the resale price.
Illiquid Securities. Where a substantial market of qualified
institutional buyers develops for certain restricted securities purchased
by the Fund pursuant to Rule 144A under the Securities Act of 1933, as
amended, the Fund intends to treat such securities as liquid securities in
accordance with procedures approved by the Fund's Board. Because it is not
possible to predict with assurance how the market for restricted securities
pursuant to Rule 144A will develop, the Fund's Board has directed the
Manager to monitor carefully the Fund's investments in such securities with
particular regard to trading activity, availability of reliable price
information and other relevant information. To the extent that, for a
period of time, qualified institutional buyers cease purchasing restricted
securities pursuant to Rule 144A, the Fund's investing in such securities
may have the effect of increasing the level of illiquidity in the Fund's
portfolio during such period.
Investment Restrictions
The Fund has adopted investment restrictions numbered 1 through 12 as
fundamental policies which cannot be changed without approval by the
holders of a majority (as defined in the Investment Company Act of 1940, as
amended (the "1940 Act")) of the Fund's outstanding voting shares.
Investment restriction number 13 is not a fundamental policy and may be
changed by vote of a majority of the Fund's Board members at any time. The
Fund may not:
1. Purchase common stocks, preferred stocks, warrants or other
equity securities, or purchase corporate bonds or debentures, state bonds,
municipal bonds or industrial revenue bonds (except through the purchase of
debt obligations referred to under "Description of the Fund" in the
Prospectus and under "Investment Objective and Management Policies" in this
Statement of Additional Information).
2. Borrow money except from banks for temporary or emergency (not
leveraging) purposes in an amount up to 15% of the value of the Fund's
total assets (including the amount borrowed) based on the lesser of cost or
market, less liabilities (not including the amount borrowed) at the time
the borrowing is made. While borrowings exceed 5% of the value of the
Fund's total assets, the Fund will not make any additional investments.
3. Pledge its assets except in an amount up to 15% of the value of
its total assets but only to secure borrowings for temporary or emergency
purposes.
4. Sell securities short.
5. Write or purchase put or call options.
6. Underwrite the securities of other issuers.
7. Purchase or sell real estate investment trust securities,
commodities, or oil and gas interests.
8. Make loans to others (except through the purchase of debt
obligations referred to under "Description of the Fund" in the Prospectus
and under "Investment Objective and Management Policies" in this Statement
of Additional Information).
9. Invest more than 15% of its assets in the obligations of any one
bank, or invest more than 5% of its assets in the commercial paper of any
one issuer. Notwithstanding the foregoing, to the extent required by the
rules of the Securities and Exchange Commission, the Fund will not invest
more than 5% of its assets in the obligations of any one bank.
10. Invest less than 25% of its assets in securities issued by banks
or invest more than 25% of its assets in the securities of issuers in any
other industry, provided that there shall be no limitation on the purchase
of obligations issued or guaranteed by the U.S. Government, its agencies or
instrumentalities.
11. Invest in companies for the purpose of exercising control.
12. Invest in securities of other investment companies, except as
they may be acquired as part of a merger, consolidation or acquisition of
assets.
13. Enter into repurchase agreements providing for settlement in more
than seven days after notice or purchase securities which are illicit, if,
in the aggregate, more than 10% of the value of the Fund's net assets would
be so invested.
If a percentage restriction is adhered to at the time of investment, a
later increase or decrease in percentage resulting from a change in values
or assets will not constitute a violation of such restriction.
The Fund may make commitments more restrictive than the restrictions
listed above so as to permit the sale of Fund shares in certain states.
Should the Fund determine that a commitment is no longer in the best
interest of the Fund and its shareholders, the Fund reserves the right to
revoke the commitment by terminating the sale of Fund shares in the state
involved.
MANAGEMENT OF THE FUND
Board members and officers of the Fund, together with information as
to their principal business occupations during at least the last five
years, are shown below. Each Board member who is deemed to be an
"interested person" of the Fund, as defined in the 1940 Act, is indicated
by an asterisk.
Board Members of the Fund
CLIFFORD L. ALEXANDER, JR., Board Member. President of Alexander &
Associates, Inc., a management consulting firm. From 1977 to 1981, Mr.
Alexander served as Secretary of the Army and Chairman of the Board of
the Panama Canal Company, and from 1975 to 1977, he was a member of
the Washington, D.C. law firm of Verner, Liipfert, Bernhard, McPherson
and Alexander. He is a director of American Home Products
Corporation, The Dun & Bradstreet Corporation, MCI Communications
Corporation, Mutual of America Life Insurance Company and TLC Beatrice
International Holdings, Inc. He is 62 years old and his address is
400 C Street, N.E., Washington, D.C. 20002.
PEGGY C. DAVIS, Board Member. Shad Professor of Law, New York
University School of Law. Professor Davis has been a member of the
New York University law faculty since 1983. Prior to that time, she
served for three years as a judge in the courts of New York State; was
engaged for eight years in the practice of law, working in both
corporate and non-profit sectors; and served for two years as a
criminal justice administrator in the government of the City of New
York. She writes and teaches in the fields of evidence,
constitutional theory, family law, social sciences and the law, legal
process and professional methodology and training. She is 53 years
old and her address is c/o New York University School of Law, 249
Sullivan Street, New York, New York 10012.
*JOSEPH S. DiMARTINO, Chairman of the Board. Since January 1995, Chairman
of the Board of various funds in the Dreyfus Family of Funds. For
more than five years prior thereto, he was President, a director and,
until August 1994, Chief Operating Officer of the Manager and
Executive Vice President and a director of Dreyfus Service
Corporation, a wholly-owned subsidiary of the Manager and, until
August 24, 1994, the Fund's distributor. From August 1994 to December
31, 1994, he was a director of Mellon Bank Corporation. He is also
Chairman of the Board of Directors of Noel Group, Inc., a venture
capital company; a trustee of Bucknell University; and a director of
the Muscular Dystrophy Association, HealthPlan Services Corporation,
Belding Heminway, Inc., a manufacturer of industrial threads,
specialty yarns, home furnishings and fabrics, Curtis Industries,
Inc., a national distributor of securities products, chemicals, and
automotive and other hardware, and Staffing Resources, Inc. He is 52
years old and his address is 200 Park Avenue, New York, New York
10166.
ERNEST KAFKA, Board Member. A physician engaged in private practice
specializing in the psychoanalysis of adults and adolescents. Since
1981, he has served as an Instructor at the New York Psychoanalytic
Institute and, prior thereto, held other teaching positions. He is
Associate Clinical Professor of Psychiatry at Cornell Medical School.
For more than the past five years, Dr. Kafka has held numerous
administrative positions and has published many articles on subjects
in the field of psychoanalysis. He is 63 years old and his address is
23 East 92nd Street, New York, New York 10128.
SAUL B. KLAMAN, Board Member. Chairman and Chief Executive Officer of SBK
Associates, which provides research and consulting services to
financial institutions. Dr. Klaman was President of the National
Association of Mutual Savings Banks until November 1983, President of
the National Council of Savings Institutions until June 1985, Vice
Chairman of Golembe Associates and BEI Golembe, Inc. until 1989 and
Chairman Emeritus of BEI Golembe, Inc. until November 1992. He also
served as an Economist to the Board of Governors of the Federal
Reserve System and on several Presidential Commissions, and has held
numerous consulting and advisory positions in the fields of economics
and housing finance. He is 76 years old and his address is 431-B
Dedham Street, The Gables, Newton Center, Massachusetts 02159.
NATHAN LEVENTHAL, Board Member. President of Lincoln Center for the
Performing Arts, Inc. Mr. Leventhal was Deputy Mayor for Operations
of New York City from September 1979 until March 1984 and Commissioner
of the Department of Housing Preservation and Development of New York
City from February 1978 to September 1979. Mr. Leventhal was an
associate and then a member of the New York law firm of Poletti
Freidin Prashker Feldman and Gartner from 1974 to 1978. He was
Commissioner of Rent and Housing Maintenance for New York City from
1972 to 1973. Mr. Leventhal also serves as Chairman of Citizens
Union, an organization which strives to reform and modernize city and
state government. He is 53 years old and his address is 70 Lincoln
Center Plaza, New York, New York 10023-6583.
For so long as the Fund's plans described in the sections captioned
"Service Plan and Distribution Plan" and "Shareholder Services Plans"
remain in effect, the Board members of the Fund who are not "interested
persons" of the Fund, as defined in the 1940 Act, will be selected and
nominated by the Board members who are not "interested persons" of the
Fund.
The Fund typically pays its Board members an annual retainer and a per
meeting fee and reimburses them for their expenses. The Chairman of the
Board receives an additional 25% of such compensation. Emeritus Board
members are entitled to receive an annual retainer and per meeting fee of
one-half the amount paid to them as Board members. The aggregate amount of
compensation paid to each Board member by the Fund for the fiscal year
ended January 31, 1996, and by all other funds in the Dreyfus Family of
Funds for which such person is a Board member (the number of which is set
forth in parenthesis next to each Board member's total compensation) for
the year ended December 31, 1995, were as follows:
Total Compensation
Aggregate From Fund and
Name of Board Compensation from Fund Complex Paid
Member Fund* to Board Member
Clifford L. Alexander, Jr. $5,500 $ 94,386 (17)
Peggy C. Davis $5,500 $ 81,636 (15)
Joseph S. DiMartino $6,875 $448,618 (94)
Ernest Kafka $5,500 $ 81,136 (15)
Saul B. Klaman $5,500 $ 81,886 (15)
Nathan Leventhal $5,500 $ 81,636 (15)
________________________
* Amount does not include reimbursed expenses for attending Board
meetings, which amounted to $297 for all Board members as a group.
Officers of the Fund
MARIE E. CONNOLLY, President and Treasurer. President, Chief Executive
Officer and a director of the Distributor and an officer of other
investment companies advised or administered by the Manager. From
December 1991 to July 1994, she was President and Chief Compliance
Officer of Funds Distributor, Inc., the ultimate parent of which is
Boston Institutional Group, Inc. Prior to December 1991, she served
as Vice President and Controller, and later as Senior Vice President,
of The Boston Company Advisors, Inc. She is 38 years old.
JOHN E. PELLETIER, Vice President and Secretary. Senior Vice President and
General Counsel of the Distributor and an officer of other investment
companies advised or administered by the Manager. From February 1992
to July 1994, he served as Counsel for The Boston Company Advisors,
Inc. From August 1990 to February 1992, he was employed as an
Associate at Ropes & Gray. He is 31 years old.
ERIC B. FISCHMAN, Vice President and Assistant Secretary. Associate
General Counsel of the Distributor and an officer of other investment
companies advised or administered by the Manager. From September 1992
to August 1994, he was an attorney with the Board of Governors of the
Federal Reserve System. He is 30 years old.
ELIZABETH A. BACHMAN, Vice President and Assistant Secretary. Assistant
Vice President of the Distributor and an officer of other investment
companies advised or administered by the Manager. She is 26 years
old.
FREDERICK C. DEY, Vice President and Assistant Treasurer. Senior Vice
President of the Distributor and an officer of other investment
companies advised or administered by the Manager. From 1988 to
August 1994, he was manager of the High Performance Fabric Division of
Springs Industries Inc. He is 34 years old.
JOSEPH S. TOWER, III, Assistant Treasurer. Senior Vice President,
Treasurer and Chief Financial Officer of the Distributor and an
officer of other investment companies advised or administered by the
Manager. From July 1988 to August 1994, he was employed by The Boston
Company, Inc. where he held various management positions in the
Corporate Finance and Treasury areas. He is 33 years old.
JOHN J. PYBURN, Assistant Treasurer. Assistant Treasurer of the
Distributor and an officer of other investment companies advised or
administered by the Manager. From 1984 to July 1994, he was Assistant
Vice President in the Mutual Fund Accounting Department of the
Manager. He is 60 years old.
MARGARET M. PARDO, Assistant Secretary. Legal Assistant with the
Distributor and an officer of other investment companies advised or
administered by the Manager. From June 1992 to April 1995, she was a
Medical Coordination Officer at ORBIS International. Prior to June
1992, she worked as Program Coordinator at Physicians World
Communications Group. She is 27 years old.
The address of each officer of the Fund is 200 Park Avenue, New York,
New York 10166.
Board members and officers of the Fund, as a group, owned less than 1%
of the Fund's shares outstanding on May 6, 1996.
The following shareholder owned of record 5% or more of the Fund's
Class A shares outstanding as of May 6, 1996: First Interstate Bank CUST,
A/C Consolidated CAP Sponsored IRA, IRA Services, Attn: Mutual Funds, P.O.
Box 1389, San Carlos, CA 94070-7389 (5.5062%).
MANAGEMENT AGREEMENT
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Management
of the Fund."
The Manager provides management services pursuant to the Management
Agreement (the "Agreement") dated August 24, 1994 with the Fund, which is
subject to annual approval by (i) the Fund's Board or (ii) vote of a
majority (as defined in the 1940 Act) of the outstanding voting securities
of the Fund, provided that in either event the continuance also is approved
by a majority of the Board members who are not "interested persons" (as
defined in the 1940 Act) of the Fund or the Manager, by vote cast in person
at a meeting called for the purpose of voting on such approval. The
Agreement was approved by shareholders on August 3, 1994. The Board,
including a majority of the Board members who are not "interested persons"
of any party to the Agreement, last voted to renew the Agreement at a
meeting held on September 27, 1995. The Agreement is terminable without
penalty, on 60 days' notice, by the Fund's Board or by vote of the holders
of a majority of the Fund's shares or, upon not less than 90 days' notice,
by the Manager. The Agreement will terminate automatically in the event of
its assignment (as defined in the 1940 Act).
The following persons are officers and/or directors of the Manager:
Howard Stein, Chairman of the Board and Chief Executive Officer; W. Keith
Smith, Vice Chairman of the Board; Christopher M. Condron, President, Chief
Operating Officer and a director; Stephen E. Canter, Vice Chairman, Chief
Investment Officer and a director; Lawrence S. Kash, Vice Chairman-
Distribution and a director; Philip L. Toia, Vice Chairman-Operations and
Administration and a director; William T. Sandalls, Jr., Senior Vice
President and Chief Financial Officer; Elie M. Genadry, Vice President-
Institutional Sales; William F. Glavin, Jr., Vice President-Corporate
Development; Mark N. Jacobs, Vice President, General Counsel and Secretary;
Patrice M. Kozlowski, Vice President-Corporate Communications; Mary Beth
Leibig, Vice President-Human Resources; Jeffrey N. Nachman, Vice President-
Mutual Fund Accounting; Andrew S. Wasser, Vice President-Information
Systems; Maurice Bendrihem, Controller; Elvira Oslapas, Assistant
Secretary; and Mandell L. Berman, Frank V. Cahouet, Alvin E. Friedman,
Lawrence M. Greene and Julian M. Smerling, directors.
The Manager manages the Fund's portfolio of investments in accordance
with the stated policies of the Fund, subject to the approval of the Fund's
Board. The Manager is responsible for investment decisions and provides
the Fund with portfolio managers who are authorized by the Board to execute
purchases and sales of securities. The Fund's portfolio managers are
Bernard W. Kiernan and Patricia A. Larkin. The Manager also maintains a
research department with a professional staff of portfolio managers and
securities analysts who provide research services for the Fund as well as
for other funds advised by the Manager. All purchases and sales are
reported for the Board's review at the meeting subsequent to such
transactions.
The Manager maintains office facilities on behalf of the Fund, and
furnishes statistical and research data, clerical help, accounting, data
processing, bookkeeping and internal auditing and certain other required
services to the Fund. The Manager also may make such advertising and
promotional expenditures using its own resources, as it from time to time
deems appropriate.
All expenses incurred in the operation of the Fund are borne by the
Fund, except to the extent specifically assumed by the Manager. The
expenses borne by the Fund include: taxes, interest, brokerage fees and
commissions, if any, fees of Board members who are not officers, directors,
employees or holders of 5% or more of the outstanding voting securities of
the Manager, Securities and Exchange Commission fees, state Blue Sky
qualification fees, charges of custodians, transfer and dividend disbursing
agents' fees, certain insurance premiums, industry association fees,
outside auditing and legal expenses, costs of maintaining the Fund's
existence, investor services (including, without limitation, telephone and
personnel expenses), costs of shareholder reports and meetings, costs of
preparing and printing prospectuses and statements of additional
information for regulatory purposes and for distribution to existing
shareholders, and any extraordinary expenses. The Fund bears certain
expenses in accordance with separate written plans and also bears certain
costs associated with implementing and operating such plans. See "Service
Plan and Distribution Plan."
As compensation for the Manager's services, the Fund has agreed to pay
the Manager a monthly management fee at the annual rate of .50 of 1% of the
value of the Fund's average daily net assets. All fees and expenses are
accrued daily and deducted before payment of dividends to investors. For
the fiscal years ended January 31, 1994, 1995 and 1996, the management fees
paid by the Fund amounted to $3,213,934, $2,850,622 and $3,172,667,
respectively.
The Manager has agreed that if in any fiscal year the aggregate
expenses of the Fund, exclusive of taxes, brokerage, interest and (with the
prior written consent of the necessary state securities commissions)
extraordinary expenses, but including the management fee, exceed 1-1/2% of
the average market value of the net assets of the Fund for that fiscal
year, the Fund may deduct from the payment to be made to the Manager under
the Agreement, or the Manager will bear, such excess expense. Such
deduction or payment, if any, will be estimated daily and reconciled and
effected or paid, as the case may be, on a monthly basis. No such
deduction or payment was required for the fiscal year ended January 31,
1996.
The aggregate of the fees payable to the Manager is not subject to
reduction as the value of the Fund's net assets increases.
PURCHASE OF SHARES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "How to Buy
Shares."
The Distributor. The Distributor serves as the Fund's distributor on
a best efforts basis pursuant to an agreement which is renewable annually.
The Distributor also acts as distributor for the other funds in the General
Family of Funds, the funds in the Dreyfus Family of Funds and for certain
other investment companies. In some states, certain financial institutions
effecting transactions in Fund shares may be required to register as
dealers pursuant to state law.
Using Federal Funds. Dreyfus Transfer, Inc., the Fund's transfer and
dividend disbursing agent (the "Transfer Agent"), or the Fund may attempt
to notify the investor upon receipt of checks drawn on banks that are not
members of the Federal Reserve System as to the possible delay in
conversion into Federal Funds and may attempt to arrange for a better means
of transmitting the money. If the investor is a customer of a securities
dealer ("Selected Dealer") and his order to purchase Fund shares is paid
for other than in Federal Funds, the Selected Dealer, acting on behalf of
its customer, will complete the conversion into, or itself advance, Federal
Funds, generally on the business day following receipt of the customer
order. The order is effective only when so converted and received by the
Transfer Agent. An order for the purchase of Fund shares placed by an
investor with sufficient Federal Funds or a cash balance in his brokerage
account with a Selected Dealer will become effective on the day that the
order, including Federal Funds, is received by the Transfer Agent.
Reopening an Account. An investor may reopen an account with a
minimum investment of $100 without filing a new Account Application during
the calendar year the account is closed or during the following calendar
year, provided the information on the old Account Application is still
applicable.
SERVICE PLAN AND DISTRIBUTION PLAN
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Service
Plan and Distribution Plan."
Rule 12b-1 (the "Rule") adopted by the Securities and Exchange
Commission under the 1940 Act provides, among other things, that an
investment company may bear expenses of distributing its shares only
pursuant to a plan adopted in accordance with the Rule. The Fund's Board
has adopted such a plan with respect to Class A and Class B (each a
"Plan"). Under each Plan, the Fund bears directly the costs of preparing,
printing and distributing prospectuses and statements of additional
information and of implementing and operating the Plan. Under the Plan
adopted with respect to Class A (the "Service Plan"), the Fund reimburses
(a) the Distributor for payments made for distributing Class A shares and
servicing shareholder accounts ("Servicing") and (b) the Manager, Dreyfus
Service Corporation and any affiliate of either of them (collectively,
"Dreyfus") for payments made for Servicing. Each of the Distributor and
Dreyfus may pay one or more financial institutions, Selected Dealers or
other industry professionals (collectively, "Service Agents"), a fee in
respect of Class A shares owned by shareholders with whom the Service Agent
has a Servicing relationship or for whom the Service Agent is the dealer or
holder of record. Under the Plan adopted with respect to Class B (the
"Distribution Plan"), the Fund reimburses the Distributor for payments made
to third parties for distributing (within the meaning of the Rule) Class B
shares. The Fund's Board believes that there is a reasonable likelihood
that each Plan will benefit the Fund and holders of the relevant Class of
shares.
A quarterly report of the amounts expended under each Plan, and the
purposes for which such expenditures were incurred, must be made to the
Fund's Board for its review. In addition, each Plan provides that it may
not be amended to increase materially the costs which the Fund may bear for
distribution pursuant to the Plan without shareholder approval of the
affected Class and that other material amendments of the Plan must be
approved by the Board, and by the Board members who are not "interested
persons" (as defined in the 1940 Act) of the Fund or the Manager and have
no direct or indirect financial interest in the operation of the Plan or in
any related agreements entered into in connection with such Plan, by vote
cast in person at a meeting called for the purpose of considering such
amendments. Each Plan is subject to annual approval by such vote of the
Board members cast in person at a meeting called for the purpose of voting
on the Plan. Each Plan was last so approved on September 27, 1995. Each
Plan is terminable at any time by vote of a majority of the Directors who
are not "interested persons" and have no direct or indirect financial
interest in the operation of the Plan or in any of the related agreements
or by vote of a majority of the relevant Class of shares.
For the fiscal year ended January 31, 1996, the Distributor and
Dreyfus paid $2,149,964 to Service Agents for Servicing, of which
$1,246,201 was reimbursed by the Fund pursuant to the Service Plan and the
Manager reimbursed the remainder. In addition, for the fiscal year ended
January 31, 1996, the Fund paid $29,056 for preparing, printing and
distributing prospectuses and statements of additional information and for
implementing and operating the Service Plan.
For the period March 31, 1995 (effective date of the Distribution
Plan) through January 31, 1996, the Fund paid the Distributor $22,866 with
respect to Class B under the Distribution Plan.
SHAREHOLDER SERVICES PLANS
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Shareholder
Services Plans."
The Fund has adopted a Shareholder Services Plan with respect to Class
A pursuant to which the Fund reimburses Dreyfus Service Corporation for
certain allocated expenses of providing personal services and/or
maintaining shareholder accounts. The Fund also has adopted a Shareholder
Services Plan with respect to Class B pursuant to which the Fund pays the
Distributor for the provision of certain services to the holders of Class B
shares. Under each Shareholder Services Plan, 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. Under the Shareholders Services Plan for Class B,
the Distributor may make payments to Service Agents in respect of their
services.
A quarterly report of the amounts expended under each Shareholder
Services Plan, and the purposes for which such expenditures were incurred,
must be made to the Fund's Board for its review. In addition, each
Shareholder Services Plan provides that material amendments of the
Shareholder Services Plan must be approved by the Fund's Board, and by the
Board members who are not "interested persons" (as defined in the 1940 Act)
of the Fund and have no direct or indirect financial interest in the
operation of the Shareholder Services Plan by vote cast in person at a
meeting called for the purpose of considering such amendments. Each
Shareholder Services Plan is subject to annual approval by such vote of the
Board members cast in person at a meeting called for the purpose of voting
on the Shareholder Services Plan. Each Shareholder Services Plan was last
so approved on September 27, 1995. Each Shareholder Services Plan is
terminable at any time by vote of a majority of the Board members who are
not "interested persons" and have no direct or indirect financial interest
in the operation of the Shareholder Services Plan.
For the fiscal year ended January 31, 1996, the Fund was charged
$381,305 pursuant to the Shareholder Services Plan with respect to Class A,
of which $69,755 was reimbursed by the Manager.
For the period March 31, 1995 (effective date of the Shareholder
Services Plan for Class B) through January 31, 1996, the Fund was charged
$28,582 pursuant to the Shareholder Services Plan with respect to Class B,
of which $7,655 was reimbursed by the Manager pursuant to an undertaking.
REDEMPTION OF SHARES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "How to
Redeem Shares."
Check Redemption Privilege. An investor may indicate on the Account
Application, Shareholder Services Form or by later written request that the
Fund provide Redemption Checks ("Checks") drawn on the investor's Fund
account. Checks will be sent only to the registered owner(s) of the
account and only to the address of record. The Account Application,
Shareholder Services Form or later written request must be manually signed
by the registered owner(s). Checks may be made payable to the order of any
person in an amount of $500 or more. When a Check is presented to the
Transfer Agent for payment, the Transfer Agent, as the investor's agent,
will cause the Fund to redeem a sufficient number of full or fractional
shares in the investor's account to cover the amount of the Check.
Dividends are earned until the Check clears. After clearance, a copy of
the Check will be returned to the investor. Investors generally will be
subject to the same rules and regulations that apply to checking accounts,
although the election of this Privilege creates only a shareholder-transfer
agent relationship with the Transfer Agent.
If the amount of the Check is greater than the value of the shares in
an investor's account, the Check will be returned marked insufficient
funds. Checks should not be used to close an account.
Wire Redemption Privilege. By using this Privilege, the investor
authorizes the Transfer Agent to act on wire or telephone redemption
instructions from any person representing himself or herself to be the
investor, or a representative of the investor's Service Agent, and
reasonably believed by the Transfer Agent to be genuine. Ordinarily, the
Fund will initiate payment for shares redeemed pursuant to this Privilege
on the same business day if the Transfer Agent receives the redemption
request in proper form prior to 12:00 Noon, New York time, on such day;
otherwise the Fund will initiate payment on the next business day.
Redemption proceeds ($1,000 minimum) will be transferred by Federal Reserve
wire only to the commercial bank account specified by the investor on the
Account Application or the Shareholder Services Form, or to a correspondent
bank if the investor's bank is not a member of the Federal Reserve System.
Fees ordinarily are imposed by such bank and usually are borne by the
investor. Immediate notification by the correspondent bank to the
investor's bank is necessary to avoid a delay in crediting the funds to the
investor's bank account.
Investors with access to telegraphic equipment may wire redemption
requests to the Transfer Agent by employing the following transmittal code
which may be used for domestic or overseas transmissions:
Transfer Agent's
Transmittal Code Answer Back Sign
144295 144295 TSSG PREP
Investors who do not have direct access to telegraphic equipment may
have the wire transmitted by contacting a TRT Cables operator at
1-800-654-7171, toll free. Investors also should advise the operator that
the above transmittal code must be used and also inform the operator of the
Transfer Agent's answer back sign.
To change the commercial bank or account designated to receive
redemption proceeds, a written request must be sent to the Transfer Agent.
This request must be signed by each shareholder, with each signature
guaranteed as described below under "Stock Certificates; Signatures."
Stock Certificates; Signatures. Any certificates representing Fund
shares to be redeemed must be submitted with the redemption request.
Written redemption requests must be signed by each shareholder, including
each holder of a joint account, and each signature must be guaranteed.
Signatures on endorsed certificates submitted for redemption also must be
guaranteed. The Transfer Agent has adopted standards and procedures
pursuant to which signature-guarantees in proper form generally will be
accepted from domestic banks, brokers, dealers, credit unions, national
securities exchanges, registered securities associations, clearing agencies
and savings associations, as well as from participants in the New York
Stock Exchange Medallion Signature Program, the Securities Transfer Agents
Medallion Program ("STAMP"), and the Stock Exchanges Medallion Program.
Guarantees must be signed by an authorized signatory of the guarantor and
"Signature-Guaranteed" must appear with the signature. The Transfer Agent
may request additional documentation from corporations, executors,
administrators, trustees or guardians, and may accept other suitable
verification arrangements from foreign investors, such as consular
verification. For more information with respect to signature-guarantees,
please call one of the telephone numbers listed on the cover.
Redemption Commitment. The Fund has committed itself to pay in cash
all redemption requests by any shareholder of record, limited in amount
during any 90-day period to the lesser of $250,000 or 1% of the value of
the Fund's net assets at the beginning of such period. Such commitment is
irrevocable without the prior approval of the Securities and Exchange
Commission. In the case of requests for redemption in excess of such
amount, the Fund's Board reserves the right to make payments in whole or in
part in securities (which may include non-marketable securities) or other
assets of the Fund in case of an emergency or any time a cash distribution
would impair the liquidity of the Fund to the detriment of the existing
shareholders. In such event, the securities would be valued in the same
manner as the Fund's portfolio is valued. If the recipient sold such
securities, brokerage charges would be incurred.
Suspension of Redemptions. The right of redemption may be suspended
or the date of payment postponed (a) during any period when the New York
Stock Exchange is closed (other than customary weekend and holiday
closings), (b) when trading in the markets the Fund ordinarily utilizes is
restricted, or when an emergency exists as determined by the Securities and
Exchange Commission so that disposal of the Fund's investments or
determination of its net asset value is not reasonably practicable, or (c)
for such other periods as the Securities and Exchange Commission by order
may permit to protect the Fund's shareholders.
SHAREHOLDER SERVICES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Shareholder
Services."
Fund Exchanges. Shares of other funds purchased by exchange will be
purchased on the basis of relative net asset value per share as follows:
A. Exchanges for shares of funds that are offered without a
sales load will be made without a sales load.
B. Shares of funds purchased without a sales load may be
exchanged for shares of other funds sold with a sales load,
and the applicable sales load will be deducted.
C. Shares of funds purchased with a sales load may be exchanged
for shares of other funds sold without a sales load.
D. Shares of funds purchased with a sales load, shares of funds
acquired by a previous exchange from shares purchased with a
sales load, and additional shares acquired through
reinvestment of dividends or distributions of any such funds
(collectively referred to herein as "Purchased Shares") may
be exchanged for shares of other funds sold with a sales
load (referred to herein as "Offered Shares"), provided
that, if the sales load applicable to the Offered Shares
exceeds the maximum sales load that could have been imposed
in connection with the Purchased Shares (at the time the
Purchased Shares were acquired), without giving effect to
any reduced loads, the difference will be deducted.
To accomplish an exchange under item D above, shareholders must notify
the Transfer Agent of their prior ownership of fund shares and their
account number.
To request an exchange, an investor, or an investor's Service Agent
acting on the investor's behalf, must give exchange instructions to the
Transfer Agent in writing or by telephone. The ability to issue exchange
instructions by telephone is given to all Fund shareholders automatically,
unless the investor checks the applicable "No" box on the Account
Application, indicating that the investor specifically refuses this
Privilege. By using the Telephone Exchange Privilege, the investor
authorizes the Transfer Agent to act on telephonic instructions from any
person representing himself or herself to be the investor or a
representative of the investor's Service Agent, and reasonably believed by
the Transfer Agent to be genuine. Telephone exchanges may be subject to
limitations as to the amount involved or the number of telephone exchanges
permitted. Shares issued in certificate form are not eligible for
telephone exchanges.
To establish a personal retirement plan by exchange, shares of the
fund being exchanged must have a value of at least the minimum initial
investment required for the fund into which the exchange is being made.
For Dreyfus-sponsored Keogh Plans, IRAs and IRAs set up under a Simplified
Employee Pension Plan ("SEP-IRAs") with only one participant, the minimum
initial investment is $750. To exchange shares held in corporate plans,
403(b)(7) Plans and SEP-IRAs with more than one participant, the minimum
initial investment is $100 if the plan has at least $2,500 invested among
the funds in the Dreyfus Family of Funds. To exchange shares held in
personal retirement plans, the shares exchanged must have a current value
of at least $100.
Auto-Exchange Privilege. The Auto-Exchange Privilege permits an
investor to purchase, in exchange for shares of the Fund, shares of another
fund in the Dreyfus Family of Funds. This Privilege is available only for
existing accounts. Shares will be exchanged on the basis of relative net
asset value as described above under "Fund Exchanges." Enrollment in or
modification or cancellation of this Privilege is effective three business
days following notification by the investor. An investor will be notified
if his account falls below the amount designated to be exchanged under this
Privilege. In this case, an investor's account will fall to zero unless
additional investments are made in excess of the designated amount prior to
the next Auto-Exchange transaction. Shares held under IRA and other
retirement plans are eligible for this Privilege. Exchanges of IRA shares
may be made between IRA accounts and from regular accounts to IRA accounts,
but not from IRA accounts to regular accounts. With respect to all other
retirement accounts, exchanges may be made only among those accounts.
Fund Exchanges and the Auto-Exchange Privilege are available to
shareholders resident in any state in which shares of the fund being
acquired legally may be sold. Shares may be exchanged only between
accounts having identical names and other identifying designations.
Shareholder Services Forms and prospectuses of the other funds may be
obtained by calling 1-800-645-6561. The Fund reserves the right to reject
any exchange request in whole or in part. The Fund Exchanges service or
the Auto-Exchange Privilege may be modified or terminated at any time upon
notice to shareholders.
Automatic Withdrawal Plan. The Automatic Withdrawal Plan permits an
investor with a $5,000 minimum account to request withdrawal of a specified
dollar amount (minimum of $50) on either a monthly or quarterly basis.
Withdrawal payments are the proceeds from sales of Fund shares, not the
yield on the shares. If withdrawal payments exceed reinvested dividends
and distributions, the investor's shares will be reduced and eventually may
be depleted. Automatic Withdrawal may be terminated at any time by the
investor, the Fund or the Transfer Agent. Shares for which certificates
have been issued may not be redeemed through the Automatic Withdrawal Plan.
Dividend Sweep. Dividend Sweep allows investors to invest on the
payment date their dividends or dividends and capital gain distributions,
if any, from the Fund in shares of another fund in the Dreyfus Family of
Funds of which the investor is a shareholder. Shares of other funds
purchased pursuant to this privilege will be purchased on the basis of
relative net asset value per share as follows:
A. Dividends and distributions paid by a fund may be
invested without imposition of a sales load in shares of other
funds that are offered without a sales load.
B. Dividends and distributions paid by a fund which does
not charge a sales load may be invested in shares of other funds
sold with a sales load, and the applicable sales load will be
deducted.
C. Dividends and distributions paid by a fund which
charges a sales load may be invested in shares of other funds
sold with a sales load (referred to herein as "Offered Shares"),
provided that, if the sales load applicable to the Offered Shares
exceeds the maximum sales load charged by the fund from which
dividends or distributions are being swept, without giving effect
to any reduced loads, the difference will be deducted.
D. Dividends and distributions paid by a fund may be invested in
shares of other funds that impose a contingent deferred sales
charge ("CDSC") and the applicable CDSC, if any, will be imposed
upon redemption of such shares.
Corporate Pension/Profit-Sharing and Personal Retirement Plans. The
Fund makes available to corporations a variety of prototype pension and
profit-sharing plans, including a 401(k) Salary Reduction Plan. In
addition, the Fund makes available Keogh Plans, IRAs, including SEP-IRAs
and IRA "Rollover Accounts," and 403(b)(7) Plans. Plan support services
also are available. Investors can obtain details on the various plans by
calling the following numbers toll free: for Keogh Plans, please call 1-
800-358-5566; for IRAs and IRA "Rollover Accounts," please call 1-800-645-
6561; or for SEP-IRAs, 401(k) Salary Reduction Plan, and 403(b)(7) Plans,
please call 1-800-322-7880.
Investors who wish to purchase Fund shares in conjunction with a Keogh
Plan, a 403(b)(7) Plan or an IRA, including a SEP-IRA, may request from the
Distributor forms for adoption of such plans.
The entity acting as custodian for Keogh Plans, 403(b)(7) Plans or
IRAs may charge a fee, payment of which could require the liquidation of
shares. All fees charged are described in the appropriate form.
Shares may be purchased in connection with these plans only by direct
remittance to the entity which acts as custodian. Such purchases will be
effective when payments received by the Transfer Agent are converted into
Federal Funds. Purchases for these plans may not be made in advance of
receipt of funds.
The minimum initial investment for corporate plans, salary reduction
plans, 403(b)(7) Plans and SEP-IRAs, with more than one participant, is
$2,500, with no minimum on subsequent purchases. The minimum initial
investment for Dreyfus-sponsored Keogh Plans, IRAs, SEP-IRAs and 403(b)(7)
Plans, with only one participant, is normally $750, with no minimum on
subsequent purchases. Individuals who open an IRA also may open a
non-working spousal IRA with a minimum investment of $250.
The investor should read the prototype retirement plans and the
applicable form of custodial agreement for further details as to
eligibility, service fees and tax implications, and should consult a tax
adviser.
DETERMINATION OF NET ASSET VALUE
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "How to Buy
Shares."
Amortized Cost Pricing. The valuation of the Fund's portfolio
securities is based upon their amortized cost, which does not take into
account unrealized capital gains or losses. This involves valuing an
instrument at its cost and thereafter assuming 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. While
this method provides certainty in valuation, it may result in periods
during which value, as determined by amortized cost, is higher or lower
than the price the Fund would receive if it sold the instrument.
The Fund's Board has established, as a particular responsibility
within the overall duty of care owed to Fund shareholders, procedures
reasonably designed to stabilize the Fund's 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 Board, at such intervals as
it may deem appropriate, to determine whether the Fund's net asset value
calculated by using available market quotations or market equivalents
deviates from $1.00 per share based on amortized cost. In such review,
investments for which market quotations are readily available will be
valued at the most recent bid price or yield equivalent for such securities
or for securities of comparable maturity, quality and type as obtained from
one or more of the major market makers for the securities to be valued.
Other investments and assets will be valued at fair value as determined in
good faith by the Board.
The extent of any deviation between the Fund's net asset value based
upon available market quotations or market equivalents and $1.00 per share
based on amortized cost will be examined by the Fund's Board. If such
deviation exceeds 1/2 of 1%, the Board promptly will consider what action,
if any, will be initiated. In the event the Board determines that a
deviation exists which may result in material dilution or other unfair
results to investors or existing shareholders, it has agreed to take such
corrective action as it regards as necessary and appropriate, including:
selling portfolio instruments prior to maturity to realize capital gains or
losses or to shorten average portfolio maturity; withholding dividends or
paying distributions from capital or capital gains; redeeming shares in
kind; or establishing a net asset value per share by using available market
quotations or market equivalents.
New York Stock Exchange and Transfer Agent Closings. The holidays (as
observed) on which both the New York Stock Exchange and the Transfer Agent
are closed currently are: New Year's Day, Presidents' Day, Memorial Day,
Independence Day, Labor Day, Thanksgiving and Christmas.
DIVIDENDS, DISTRIBUTIONS AND TAXES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Dividends,
Distributions and Taxes."
Ordinarily, gains and losses realized from portfolio transactions will
be treated as capital gain or loss. However, all or a portion of any gain
realized from the sale or other disposition of certain market discount
bonds will be treated as ordinary income under Section 1276 of the Internal
Revenue Code of 1986, as amended.
YIELD INFORMATION
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Yield
Information."
For the seven-day period ended January 31, 1996, the Fund's yield was
4.87% for Class A and 4.78% for Class B and the Fund's effective yield was
4.99% for Class A and 4.89% for Class B. The yield for Class B reflects
the reimbursement of certain expenses attributable to Class B, without
which the Fund's Class B yield and the effective yield for the seven-day
period ended January 31, 1996 would have been 4.70% and 4.81%,
respectively. Yield is computed in accordance with a standardized method
which involves determining the net change in the value of a hypothetical
pre-existing Fund account having a balance of one share at the beginning of
a seven calendar day period for which yield is to be quoted, dividing the
net change by the value of the account at the beginning of the period to
obtain the base period return, and annualizing the results (i.e.,
multiplying the base period return by 365/7). The net change in the value
of the account reflects the value of additional shares purchased with
dividends declared on the original share and any such additional shares and
fees that may be charged to shareholder accounts, in proportion to the
length of the base period and the Fund's average account size, but does not
include realized gains and losses or unrealized appreciation and
depreciation. Effective yield is computed by adding 1 to the base period
return (calculated as described above), raising that sum to a power equal
to 365 divided by 7, and subtracting 1 from the result.
Yields will fluctuate and are not necessarily representative of future
results. Each investor should remember that yield is a function of the
type and quality of the instruments in the portfolio, portfolio maturity
and operating expenses. An investor's principal in the Fund is not
guaranteed. See "Determination of Net Asset Value" for a discussion of the
manner in which the Fund's price per share is determined.
PORTFOLIO TRANSACTIONS
Portfolio securities ordinarily are purchased directly from the issuer
or from an underwriter or a market maker for the securities. Usually no
brokerage commissions are paid by the Fund for such purchases. Purchases
from underwriters of portfolio securities include a concession paid by the
issuer to the underwriter and the purchase price paid to market makers for
the securities may include the spread between the bid and asked price. No
brokerage commissions have been paid by the Fund to date.
Transactions are allocated to various dealers by the Fund's portfolio
managers in their best judgment. The primary consideration is prompt and
effective execution of orders at the most favorable price. Subject to that
primary consideration, dealers may be selected for research, statistical or
other services to enable the Manager to supplement its own research and
analysis with the views and information of other securities firms and may
be selected based upon their sales of Fund shares.
Research services furnished by brokers through which the Fund effects
securities transactions may be used by the Manager in advising other funds
it advises and, conversely, research services furnished to the Manager by
brokers in connection with other funds the Manager advises may be used by
the Manager in advising the Fund. Although it is not possible to place a
dollar value on these services, it is the opinion of the Manager that the
receipt and study of such services should not reduce the overall expenses
of its research department.
INFORMATION ABOUT THE FUND
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "General
Information."
Each Fund share has one vote and, when issued and paid for in
accordance with the terms of the offering, is fully paid and
non-assessable. Fund shares have equal rights as to dividends and in
liquidation. Shares have no preemptive, subscription or conversion rights
and are freely transferable.
The Fund sends annual and semi-annual financial statements to all its
share-
holders.
TRANSFER AND DIVIDEND DISBURSING AGENT, CUSTODIAN,
COUNSEL AND INDEPENDENT AUDITORS
Dreyfus Transfer, Inc., a wholly-owned subsidiary of the Manager, P.O.
Box 9671, Providence, Rhode Island 02940-9671, is the Fund's transfer and
dividend disbursing agent. Under a transfer agency agreement with the
Fund, the Transfer Agent arranges for the maintenance of shareholder
account records for the Fund, the handling of certain communications
between shareholders and the Fund and the payment of dividends and
distributions payable by the Fund. For these services, the Transfer Agent
receives a monthly fee computed on the basis of the number of shareholder
accounts it maintains for the Fund during the month, and is reimbursed for
certain out-of-pocket expenses. For the period December 1, 1995 (effective
date of transfer agency agreement) through January 31, 1996, the Fund paid
the Transfer Agent $36,359.
The Bank of New York, 90 Washington Street, New York, New York 10286
is the Fund's custodian.
First Interstate Bank of California, 707 Wilshire Boulevard, Los
Angeles, California 90017, serves as a sub-custodian of the Fund's
investments.
The Transfer Agent, The Bank of New York and First Interstate Bank of
California have no part in determining the investment policies of the Fund
or which securities are to be purchased or sold by the Fund.
Stroock & Stroock & Lavan, 7 Hanover Square, New York, New York
10004-2696, as counsel for the Fund, has rendered its opinion as to certain
legal matters regarding the due authorization and valid issuance of the
shares being sold pursuant to the Fund's Prospectus.
Ernst & Young LLP, 787 Seventh Avenue, New York, New York 10019,
independent auditors, have been selected as auditors of the Fund.
APPENDIX
Description of the two highest commercial paper, bond and other short-
and long-term rating categories assigned by Standard & Poor's Ratings Group
("S&P"), Moody's Investors Service, Inc. ("Moody's"), Fitch Investors
Service, L.P. ("Fitch"), Duff & Phelps Credit Rating Co. ("Duff"), IBCA
Limited and IBCA Inc. ("IBCA") and Thomson BankWatch, Inc. ("BankWatch"):
Commercial Paper and Short-Term Ratings
The designation A-1 by S&P indicates that the degree of safety
regarding timely payment is either overwhelming or very strong. Those
issues determined to possess overwhelming safety characteristics are
denoted with a plus sign (+) designation. Capacity for timely payment on
issues with an A-2 designation is strong. However, the relative degree of
safety is not as high as for issues designated A-1.
The rating Prime-1 (P-1) is the highest commercial paper rating
assigned by Moody's. Issuers of P-1 paper must have a superior capacity
for repayment of short-term promissory obligations and ordinarily will be
evidenced by leading market positions in well established industries, high
rates of return of funds employed, conservative capitalization structures
with moderate reliance on debt and ample asset protection, broad margins in
earnings coverage of fixed financial charges and high internal cash
generation, and well established access to a range of financial markets and
assured sources of alternate liquidity. Issues rated Prime-2 (P-2) have a
strong capacity for repayment of short-term promissory obligations. This
ordinarily will be evidenced by many of the characteristics cited above but
to a lesser degree. Earnings trends and coverage ratios, while sound, will
be more subject to variation. Capitalization characteristics, while still
appropriate, may be more affected by external conditions. Ample alternate
liquidity is maintained.
The rating Fitch-1 (Highest Grade) is the highest commercial paper
rating assigned by Fitch. Paper rated Fitch-1 is regarded as having the
strongest degree of assurance for timely payment. The rating Fitch-2 (Very
Good Grade) is the second highest commercial paper rating assigned by Fitch
which reflects an assurance of timely payment only slightly less in degree
than the strongest issues.
The rating Duff-1 is the highest commercial paper rating assigned by
Duff. Paper rated Duff-1 is regarded as having very high certainty of
timely payment with excellent liquidity factors which are supported by
ample asset protection. Risk factors are minor. Paper rated Duff-2 is
regarded as having good certainty of timely payment, good access to capital
markets and sound liquidity factors and company fundamentals. Risk factors
are small.
The designation A1 by IBCA indicates that the obligation is supported
by a very strong capacity for timely repayment. Those obligations rated
A1+ are supported by the highest capacity for timely repayment.
Obligations rated A2 are supported by a strong capacity for timely
repayment, although such capacity may be susceptible to adverse changes in
business, economic, or financial conditions.
The rating TBW-1 is the highest short-term obligation rating assigned
by BankWatch. Obligations rated TBW-1 are regarded as having the strongest
capacity for timely repayment. Obligations rated TBW-2 are supported by a
strong capacity for timely repayment, although the degree of safety is not
as high as for issues rated TBW-1.
Bond and Long-Term Ratings
Bonds rated AAA are considered by S&P to be the highest grade
obligations and possess an extremely strong capacity to pay principal and
interest. Bonds rated AA by S&P are judged by S&P to have a very strong
capacity to pay principal and interest and, in the majority of instances,
differ only in small degrees from issues rated AAA.
Bonds rated Aaa by Moody's are judged to be of the best quality.
Bonds rated Aa by Moody's are judged by Moody's to be of high quality by
all standards and, together with the Aaa group they comprise what are
generally known as high-grade bonds. Bonds rated Aa 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 or there may be other
elements present which make the long-term risks appear somewhat larger.
Moody's applies numerical modifiers 1, 2 and 3 in the Aa rating category.
The modifier 1 indicates a ranking for the security in the higher end of
this rating category, the modifier 2 indicates a mid-range ranking, and the
modifier 3 indicates a ranking in the lower end of the rating category.
Bonds rated AAA by Fitch are judged by Fitch to be strictly high
grade, broadly marketable, suitable for investment by trustees and
fiduciary institutions and liable to slight market fluctuation other than
through changes in the money rate. The prime feature of an AAA bond is a
showing of earnings several times or many times interest requirements, with
such stability of applicable earnings that safety is beyond reasonable
question whatever changes occur in conditions. Bonds rated AA by Fitch are
judged by Fitch to be of safety virtually beyond question and are readily
salable, whose merits are not unlike those of the AAA class, but whose
margin of safety is less strikingly broad. The issue may be the obligation
of a small company, strongly secured but influenced as to rating by the
lesser financial power of the enterprise and more local type of market.
Bonds rated AAA by Duff are considered to be of the highest credit
quality. The risk factors are negligible, being only slightly more than
U.S. Treasury debt. Bonds rated AA are considered by Duff to be of high
credit quality with strong protection factors. Risk is modest but may vary
slightly from time to time because of economic conditions.
Obligations rated AAA by IBCA have the lowest expectation of
investment risk. Capacity for timely repayment of principal and interest
is substantial, such that adverse changes in business, economic or
financial conditions are unlikely to increase investment risk
significantly. Obligations rated AA by IBCA have a very low expectation of
investment risk. Capacity for timely repayment of principal and interest
is substantial. Adverse changes in business, economic or financial
conditions may increase investment risk albeit not very significantly.
IBCA also assigns a rating to certain international and U.S. banks.
An IBCA bank rating represents IBCA's current assessment of the strength of
the bank and whether such bank would receive support should it experience
difficulties. In its assessment of a bank, IBCA uses a dual rating system
comprised of Legal Ratings and Individual Ratings. In addition, IBCA
assigns banks Long- and Short-Term Ratings as used in the corporate ratings
discussed above. Legal Ratings, which range in gradation from 1 through 5,
address the question of whether the bank would receive support from central
banks or shareholders if it experienced difficulties, and such ratings are
considered by IBCA to be a prime factor in its assessment of credit risk.
Individual Ratings, which range in gradations from A through E, represent
IBCA's assessment of a bank's economic merits and address the question of
how the bank would be viewed if it were entirely independent and could not
rely on support from state authorities or its owners.
In addition to ratings of short-term obligations, BankWatch assigns a
rating to each issuer it rates, in gradations of A through E. BankWatch
examines all segments of the organization including, where applicable, the
holding company, member banks or associations, and other subsidiaries. In
those instances where financial disclosure is incomplete or untimely, a
qualified rating (QR) is assigned to the institution. BankWatch also
assigns, in the case of foreign banks, a country rating which represents an
assessment of the overall political and economic stability of the country
in which the bank is domiciled.
<TABLE>
<CAPTION>
GENERAL MONEY MARKET FUND, INC.
STATEMENT OF INVESTMENTS JANUARY 31, 1996
PRINCIPAL
NEGOTIABLE BANK CERTIFICATES OF DEPOSIT-21.3% AMOUNT VALUE
_______ _______
<S> <C> <C>
Bayerische Vereinsbank AG (Yankee)
5.88%, 12/6/96.......................................................... $ 20,000,000 $ 20,000,000
Commerzbank AG (Yankee)
6%, 2/2/96.............................................................. 10,000,000 10,000,000
Dai-Ichi Kangyo Bank Ltd. (London)
5.82%, 3/8/96........................................................... 5,000,000 5,000,049
Mitsubishi Bank Ltd. (London)
5.63%, 3/12/96.......................................................... 15,000,000 15,003,239
Mitsubishi Bank Ltd. (Yankee)
5.83%, 3/6/96........................................................... 5,000,000 5,000,067
Rabobank Nederland N.V. (Yankee)
5.14%, 7/1/96........................................................... 20,000,000 20,003,163
Sanwa Bank Ltd. (Yankee)
5.46%, 4/30/96.......................................................... 25,000,000 25,003,049
Sumitomo Bank Ltd. (Yankee)
5.61%-5.70%, 4/2/96-4/19/96............................................. 35,000,000 35,001,150
SwedBank (Yankee)
5.32%, 6/26/96.......................................................... 15,000,000 15,000,000
----------
TOTAL NEGOTIABLE BANK CERTIFICATES OF DEPOSIT
(cost $150,010,717)..................................................... $150,010,717
============
BANKERS' ACCEPTANCE-7.6%
Bank of Tokyo Ltd. (Yankee)
5.80%-5.82%, 3/1/96-3/6/96.............................................. $ 35,000,000 $34,822,597
Dai-Ichi Kangyo Bank Ltd. (Yankee)
5.90%-6.00%, 2/14/96-3/11/96............................................ 19,000,000 18,934,464
----------
TOTAL BANKERS' ACCEPTANCE
(cost $53,757,061)...................................................... $53,757,061
============
COMMERCIAL PAPER-23.7%
Bankers Trust New York Corp.
5.42%, 7/8/96........................................................... $ 20,000,000 $19,536,972
Den Danske Corp. Inc.
5.20%-5.52%, 6/12/96-7/31/96............................................ 35,000,000 34,223,837
General Electric Capital Corp.
5.40%, 6/24/96.......................................................... 9,000,000 8,810,640
General Motors Acceptance Corp.
5.82%, 2/23/96.......................................................... 5,000,000 4,982,461
Lehman Brothers Holdings Inc.
5.65%, 5/10/96 (a)...................................................... 10,000,000 10,000,000
Maguire/Thomas Partners Westlake/Southlake Partnership
5.86%, 3/4/96 (b)....................................................... 10,650,000 10,595,283
GENERAL MONEY MARKET FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) JANUARY 31, 1996
PRINCIPAL
COMMERCIAL PAPER (CONTINUED) AMOUNT VALUE
_______ _______
Merrill Lynch & Co. Inc.
5.28%, 6/21/96.......................................................... $ 15,000,000 $14,696,262
NationsBank Corp.
5.61%, 5/28/96.......................................................... 10,000,000 9,822,550
Spintab AB
5.60%-5.86%, 3/26/96-4/16/96............................................ 35,000,000 34,664,667
SwedBank Inc.
5.32%-5.90%, 2/20/96-7/18/96............................................ 20,000,000 19,622,279
----------
TOTAL COMMERCIAL PAPER
(cost $166,954,951)..................................................... $166,954,951
============
CORPORATE NOTES-15.5%
Bear Stearns Companies Inc.
5.65%-5.74%, 7/17/96-11/18/96 (a)....................................... $20,000,000 $20,000,000
General Electric Capital Corp.
5.76%-5.78%, 3/29/96-4/5/96 (a)......................................... 25,000,000 24,999,036
General Motors Acceptance Corp.
5.59%, 6/7/96 (a)....................................................... 5,000,000 4,998,158
Lehman Brothers Holdings Inc.
5.75%-5.95%, 5/16/96-1/6/97 (a)......................................... 20,000,000 20,000,000
Merrill Lynch & Co. Inc.
5.68%-5.81%, 7/2/96-1/16/97 (a)......................................... 19,000,000 18,998,959
PHH Corp.
5.65%, 11/12/96 (a)..................................................... 20,000,000 19,989,247
----------
TOTAL CORPORATE NOTES
(cost $108,985,400)..................................................... $108,985,400
============
SHORT-TERM BANK NOTES-5.7%
First National Bank of Boston
5.73%-5.77%, 6/7/96-6/24/96 (a)......................................... $ 30,000,000 $30,000,000
PNC Bank N.A.
5.50%, 9/18/96.......................................................... 10,000,000 10,004,694
----------
TOTAL SHORT-TERM BANK NOTES
(cost $40,004,694)...................................................... $ 40,004,694
============
U.S. GOVERNMENT AGENCIES-27.0%
Federal Farm Credit Banks, Floating Rate Notes
5.58%, 11/7/96-7/25/97 (a).............................................. $ 25,000,000 $ 24,983,276
Federal Home Loan Banks, Floating Rate Notes
6.08%, 1/31/97 (a)...................................................... 15,000,000 15,000,000
Federal Home Loan Mortgage Corp., Floating Rate Notes
5.75%, 6/30/98 (a)...................................................... 10,700,000 10,729,392
GENERAL MONEY MARKET FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) JANUARY 31, 1996
PRINCIPAL
U.S. GOVERNMENT AGENCIES (CONTINUED) AMOUNT VALUE
__________ __________
Federal National Mortgage Association, Floating Rate Notes
5.56%-6.09%, 9/27/96-1/21/98 (a)........................................ $140,000,000 $139,938,815
----------
TOTAL U.S. GOVERNMENT AGENCIES
(cost $190,651,483)..................................................... $190,651,483
============
Time Deposits - 1.7%
Berliner Handels-und Frankfurter Bank AG (London)
5.62%, 2/1/96
(cost $11,999,000)...................................................... $11,999,000 $11,999,000
============
TOTAL INVESTMENTS
(cost $722,363,306).......................................... 102.5% $722,363,306
======= =============
LIABILITIES, LESS CASH AND RECEIVABLES........................... (2.5%) $ (17,336,284)
======= =============
NET ASSETS ................................................ 100.0% $705,027,022
======= =============
NOTES TO STATEMENT OF INVESTMENTS:
(a) Variable interest rate-subject to periodic change.
(b) Backed by an irrevocable letter of credit.
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
GENERAL MONEY MARKET FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES JANUARY 31, 1996
<S> <C> <C>
ASSETS:
Investments in securities, at value-Note 1(a)........................... $722,363,306
Interest receivable..................................................... 3,683,951
Prepaid expenses........................................................ 58,896
-------------
726,106,153
LIABILITIES:
Due to The Dreyfus Corporation and subsidiaries......................... $303,065
Due to Distributor...................................................... 115,990
Due to Custodian........................................................ 445,060
Payable for investment securities purchased............................. 20,008,919
Accrued expenses and other liabilities.................................. 206,097 21,079,131
----------- -------------
NET ASSETS ................................................................ $705,027,022
=============
REPRESENTED BY:
Paid-in capital......................................................... $705,045,716
Accumulated net realized (loss) on investments.......................... (18,694)
-------------
NET ASSETS at value......................................................... $705,027,022
=============
Shares of Common Stock outstanding:
Class A Shares
(15 billion shares of $.01 par value shares authorized)............... 654,600,180
=============
Class B Shares
(1 billion shares of $.01 par value shares authorized)................ 50,445,536
=============
NET ASSET VALUE per share:
Class A Shares
($654,581,139 / 654,600,180 shares)................................... $1.00
========
Class B Shares
($50,445,883 / 50,445,536 shares)..................................... $1.00
========
See notes to financial statements.
GENERAL MONEY MARKET FUND, INC.
STATEMENT OF OPERATIONS YEAR ENDED JANUARY 31, 1996
INVESTMENT INCOME:
INTEREST INCOME............................................................. $38,965,556
EXPENSES:
Management fee-Note 2(a)................................................ $3,172,667
Distribution fees (Class A & B Shares)-Note 2(b)........................ 1,269,067
Shareholder servicing costs-Note 2(c)................................... 764,150
Custodian fees.......................................................... 111,646
Registration fees....................................................... 110,350
Professional fees....................................................... 59,933
Prospectus and shareholders' reports.................................... 40,231
Directors' fees and expenses-Note 2(d).................................. 37,465
Miscellaneous........................................................... 12,772
-----------
TOTAL EXPENSES.................................................... 5,578,281
Less-reduction in shareholder servicing costs due
to undertaking-Note 2(c).............................................. 77,410
-----------
NET EXPENSES...................................................... 5,500,871
-----------
INVESTMENT INCOME-NET....................................................... 33,464,685
NET REALIZED (LOSS) ON INVESTMENTS-Note 1(b)................................ (3,057)
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $33,461,628
=============
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
GENERAL MONEY MARKET FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED JANUARY 31,
_________________________________
1995 1996
_____________ _____________
<S> <C> <C>
OPERATIONS:
Investment income-net............................................. $ 20,951,934 $33,464,685
Net realized gain (loss) on investments........................... 7,685 (3,057)
_____________ _____________
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........ 20,959,619 33,461,628
_____________ _____________
DIVIDENDS TO SHAREHOLDERS FROM;
Investment income-net:
Class A Shares.................................................. (20,951,934) (32,893,579)
Class B Shares.................................................. _ (571,106)
_____________ _____________
TOTAL DIVIDENDS............................................. (20,951,934) (33,464,685)
_____________ _____________
CAPITAL STOCK TRANSACTIONS ($1.00 per share):
Net proceeds from shares sold:
Class A Shares.................................................. 3,846,418,471 4,736,674,991
Class B Shares.................................................. _ 98,889,385
Dividends reinvested:
Class A Shares.................................................. 20,559,011 32,106,715
Class B Shares.................................................. _ 79,652
Cost of shares redeemed:
Class A Shares.................................................. (3,910,940,423) (4,686,313,457)
Class B Shares.................................................. _ (48,523,501)
_____________ _____________
INCREASE (DECREASE) IN NET ASSETS FROM
CAPITAL STOCK TRANSACTIONS................................ (43,962,941) 132,913,785
_____________ _____________
TOTAL INCREASE (DECREASE) IN NET ASSETS................... (43,955,256) 132,910,728
NET ASSETS:
Beginning of year................................................. 616,071,550 572,116,294
_____________ _____________
End of year....................................................... $ 572,116,294 $ 705,027,022
=============== =============
See notes to financial statements.
</TABLE>
GENERAL MONEY MARKET FUND, INC.
FINANCIAL HIGHLIGHTS
Reference is made to page 4 of the Fund's Prospectus dated June 3, 1996.
See notes to financial statements.
GENERAL MONEY MARKET FUND, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES:
General Money Market Fund, 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 load. On May 26, 1994, the Fund's Board of Directors approved an
amendment to the Fund's Charter to provide for the issuance of additional
shares of the Fund. The amendment was approved by Fund shareholders on August
3, 1994. Pursuant to the amendment, the Fund's existing authorized shares
were classified as Class A shares and one billion newly authorized shares of
the Common Stock of the Fund, par value $.01 per share, were classified as
Class B shares. The Fund began offering both Class A and Class B shares on
March 31, 1995. Class A shares and Class B shares are identical except for
the services offered to and the expenses borne by each class and certain
voting rights. Class A shares are subject to a Service Plan adopted pursuant
to Rule 12b-1 under the Act, Class B shares are subject to a Distribution
Plan adopted pursuant to Rule 12b-1 under the Act and, in addition, Class B
shares are charged directly for sub-accounting services provided by service
agents at an annual rate of .05% of the value of the average daily net assets
of Class B shares.
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.
(C) DIVIDENDS TO SHAREHOLDERS: It is the policy of the Fund to declare
dividends from investment income-net on each business day; such dividends are
paid monthly. 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.
(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.
The Fund has an unused capital loss carryover of approximately $12,000
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to January 31,
1996. The carryover does not include net realized securities losses from
November 1, 1995 through
GENERAL MONEY MARKET FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
January 31, 1996 which are treated, for Federal
income tax purposes, as arising in fiscal 1997. If not applied, the carryover
expires in fiscal 2002.
At January 31, 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 computed at the annual rate of .50 of 1% of the average
daily value of the Fund's net assets and is payable monthly. The Agreement
provides for an expense reimbursement from the Manager should the Fund's
aggregate expenses, exclusive of taxes, interest on borrowings, brokerage
commissions and extraordinary expenses, exceed 11\2% of the average value of
the Fund's net assets for any full fiscal year. There was no expense
reimbursement for the year ended January 31, 1996, pursuant to the Agreement.
Effective December 1, 1995, 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 $36,359 for the period from
December 1, 1995 through January 31, 1996.
(B) Under the Service Plan (the "Plan") with respect to Class A shares
only, adopted pursuant to Rule 12b-1 under the Act, the Fund directly bears
the costs of preparing, printing and distributing prospectuses and statements
of additional information and of implementing and operating the Plan. In
addition, the Fund reimburses (a) the Distributor for payments made for
distributing Class A shares and servicing shareholder accounts ("Servicing")
and (b) the Manager, Dreyfus Service Corporation, a wholly-owned subsidiary
of the Manager, and their affiliates (collectively "Dreyfus") for payments
made for Servicing, at an aggregate annual rate of up to .20 of 1% of the
value of the average daily net assets of Class A. Both the Distributor and
Dreyfus may pay Service Agents (a securities dealer, financial institution or
other industry professional) a fee in respect of Class A shares owned by
shareholders with whom the Service Agent has a Servicing relationship or for
whom the Service Agent is the dealer or holder of record. Both the
Distributor and Dreyfus determine the amounts to be paid to Service Agents to
which it will make payments and the basis on which such payments are made.
During the year ended January 31, 1996, $1,246,201 was charged to the Fund
pursuant to the Plan.
Under the Distribution Plan with respect to Class B shares ("Class B
Distribution Plan"), adopted pursuant to Rule 12b-1 under the Act, effective
March 31, 1995, the Fund directly bears the costs of preparing, printing and
distributing prospectuses and statements of additional information and of
implementing and operating the Class B Distribution Plan. In addition, the
Fund reimburses the Distributor for payments made to third parties for
distributing Class B shares at an aggregate annual rate of up to .20 of 1% of
the value of the average daily net assets of Class B. For the period March
31, 1995 through January 31, 1996, $22,866 was charged to the Fund pursuant
to the Class B Distribution Plan.
(C) Under the Fund's Shareholder Services Plan with respect to Class A
("Class A Shareholder Services Plan"), the Fund reimburses Dreyfus Service
Corporation an amount not to exceed an annual rate of .25 of
1% of the value of the Fund's average daily net assets of Class A for certain
allocated expenses of providing
GENERAL MONEY MARKET FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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 year ended
January 31, 1996, the Fund was charged an aggregate of $381,305 pursuant to
the Class A Shareholder Services Plan, of which $69,755 was reimbursed by the
Manager.
Under the Fund's Shareholder Services Plan with respect to Class B
("Class B Shareholder Services Plan"), effective March 31, 1995, the Fund
pays the Distributor for the provision of certain services to the holders of
Class B shares a fee at an annual rate of .25 of 1% of the value of the
average daily net assets of Class B. 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.
The Distributor may make payments to Service Agents in respect of these
services. The Distributor determines the amounts to be paid to Service Agents.
The Manager has undertaken, through January 31, 1997, that if the
aggregate expenses of Class B of the Fund (excluding certain expenses as
described above) exceed 1% of the value of the average daily net assets of
Class B, the Manager will reimburse the expenses of the Fund under the Class
B Shareholder Services Plan to the extent of any excess expense and up to the
full fee payable under the Class B Shareholder Services Plan. For the period
March 31, 1995 through January 31, 1996, $28,582 was charged to the Fund
pursuant to the Class B Shareholder Services Plan, of which $7,655 was
reimbursed by the Manager.
(D) Each director who is not an "affiliated person" as defined in the Act
receives from the Fund an annual fee of $2,500 and an attendance fee of $500
per meeting. The Chairman of the Board receives an additional 25% of such
compensation.
GENERAL MONEY MARKET FUND, INC.
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
SHAREHOLDERS AND BOARD OF DIRECTORS
GENERAL MONEY MARKET FUND, INC.
We have audited the accompanying statement of assets and liabilities of
General Money Market Fund, Inc., including the statement of investments, as
of January 31, 1996, and the related statement of operations for the year
then ended, the statement of changes in net assets for each of the two years
in the period then ended, and financial highlights for each of the years
indicated therein. These financial statements and financial highlights are
the responsibility of the Fund'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 January 31, 1996 by correspondence with the custodians
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 General Money Market Fund, Inc. at January 31, 1996, the results
of its operations for the year then ended, the changes in its net assets for
each of the two years in the period then ended, and the financial highlights
for each of the indicated years, in conformity with generally accepted
accounting principles.
[Ernst & Young signature logo]
New York, New York
March 6, 1993
