GENERAL MONEY MARKET FUND INC, 497, 1997-12-05

GENERAL MONEY MARKET FUND INC
497, 1997-12-05

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GENERAL GOVERNMENT SECURITIES MONEY MARKET FUND, INC.
GENERAL MONEY MARKET FUND, INC.
GENERAL CALIFORNIA MUNICIPAL MONEY MARKET FUND
GENERAL MUNICIPAL MONEY MARKET FUND, INC.
GENERAL NEW YORK MUNICIPAL MONEY MARKET FUND
COMBINED PART B
(STATEMENT OF ADDITIONAL INFORMATION)
DECEMBER 1, 1997
CLASS A AND CLASS B SHARES

This Statement of Additional Information, which is not a prospectus,
supplements and should be read in conjunction with the current combined
Prospectus for Class A or Class B shares of General Government Securities
Money Market Fund, Inc. (the "Government Money Fund"), General Money Market
Fund, Inc. (the "Money Fund"), General California Municipal Money Market
Fund (the "California Municipal Fund"), General Municipal Money Market Fund,
Inc. (the "National Municipal Fund") and General New York Municipal Money
Market Fund (the "New York Municipal Fund") (each a "Fund" and collectively
the "Funds"), dated December 1, 1997, as it may be revised from time to
time. To obtain a copy of the Prospectus for Class A or Class B shares of a
Fund, please write to a 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. -- Call 516-794-5452

The Dreyfus Corporation (the "Manager") serves as each Fund's
investment adviser.

Premier Mutual Fund Services, Inc. (the "Distributor") is the
distributor of each Fund's shares.

Each Fund is a separate entity with a separate portfolio. The
operations and investment results of one Fund are unrelated to those of each
other Fund. This combined Statement of Additional Information has been
provided for your convenience to provide you with the opportunity to
consider five investment choices in one document.

TABLE OF CONTENTS
Page
Investment Objective and Management Policies B-3
Management of the Funds B-16
Management Agreements B-21
Purchase of Shares B-23
Service Plan and Distribution Plan B-24
Shareholder Services Plans B-27
Redemption of Shares B-28
Shareholder Services B-31
Determination of Net Asset Value B-34
Dividends, Distributions and Taxes B-35
Yield Information B-36
Portfolio Transactions B-38
Information About the Funds B-39
Transfer and Dividend Disbursing Agent, Custodian,
Counsel and Independent Auditors B-39
Financial Statements and Reports of Independent Auditors B-40
Appendix A B-41
Appendix B B-44
Appendix C B-48
Appendix D B-61
Appendix E B-74
INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES

The following information supplements and should be read in conjunction
with the sections of each Fund Prospectus entitled "Description of the
Funds" and "Appendix."

Portfolio Securities

Repurchase Agreements. (All Funds) Each 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 each Fund. In an attempt to reduce the risk of
incurring a loss on a repurchase agreement, each 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. (All Funds) Where a substantial market of
qualified institutional buyers develops for certain restricted securities
purchased by a 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, each 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, a Fund's investing in such
securities may have the effect of increasing the level of illiquidity in the
Fund's portfolio during such period.

Bank Obligations. (Money Fund) As a result of Federal and state laws
and regulations, domestic banks whose certificates of deposit ("CDs") may be
purchased by the Money 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 Money Fund are
insured by the Bank Insurance Fund administered by the FDIC (although such
insurance may not be of material benefit to the Money Fund, depending upon
the principal amount of the CDs of each bank held by the Money 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 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
required to: (1) pledge to the regulator, by depositing assets with a
designated bank within the state, a certain percentage 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 Money 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 Money 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 Money Fund will not
own more than one such CD per such issuer.

Municipal Obligations. (California Municipal Fund, National Municipal
Fund and New York Municipal Fund (the "Municipal Funds")) The average
distribution of investments (at value) in Municipal Obligations (including
notes) by ratings as of the date indicated, computed on a monthly basis, was
as follows:
<TABLE>
<CAPTION>

Percentage of Value
_______________________________________
California National New York
Municipal Municipal Municipal
Fitch Investors or Moody's Investors or Standard Fund Fund Fund
Service, L.P. Service, Inc. & Poor's Ratings Group July 31, November 30, November 30,
("Fitch") ("Moody's") ("S&P") 1997 1996 1996
______________ _________________ ______________________ __________ ___________ ____________
<S> <C> <C> <C> <C> <C>
F1+/F1 VMIG1/MIG1, SP1+/SP1, A1+/AI 92.1% 94.4% 95.7%
AAA/AA Aaa/Aa AAA/AA 4.9% 3.6% 1.0%
Not Rated Not Rated Not Rated 3.0%* 2.0* 3.3%*
====== ===== ======
100.0% 100.0% 100.0%
</TABLE>

The term "Municipal Obligations" generally includes debt obligations
issued to obtain funds for various public purposes, including the
construction of a wide range of public facilities such as airports, bridges,
highways, housing, hospitals, mass transportation, schools, streets and
water and sewer works. Other public purposes for which Municipal
Obligations may be issued include refunding outstanding obligations,
obtaining funds for general operating expenses and lending such funds to
other public institutions and facilities. In addition, certain types of
industrial development bonds are issued by or on behalf of public
authorities to obtain funds to provide for the construction, equipment,
repair or improvement of privately operated housing facilities, sports
facilities, convention or trade show facilities, airport, mass transit,
industrial, port or parking facilities, air or water pollution control
facilities and certain local facilities for water supply, gas, electricity
or sewage or solid waste disposal; the interest paid on such obligations may
be exempt from Federal income tax, although current tax laws place
substantial limitations on the size of such issues. Such obligations are
considered to be Municipal Obligations if the interest paid thereon
qualifies as exempt from Federal income tax in the opinion of bond counsel
to the issuer. There are, of course, variations in the security of
Municipal Obligations, both within a particular classification and between
classifications.

Floating and variable rate demand obligations are tax exempt
obligations ordinarily having stated maturities in excess of 13 months, but
which permit the holder to demand payment of principal at any time, or at
specified intervals not exceeding 13 months, in each
case upon not more than 30 days' notice. The issuer of such obligations
ordinarily has a corresponding right, after a given period, to prepay in its
discretion the outstanding principal amount of the obligations plus accrued
interest upon a specified number of days' notice to the holders thereof.
The interest rate on a floating rate demand obligation is based on a known
lending rate, such as a bank's prime rate, and is adjusted automatically
each time such rate is adjusted. The interest rate on a variable rate
demand obligation is adjusted automatically at specified intervals.

_______________________________
* Included in the Not Rated category are securities which, while not
rated, have been determined by the Manager to be of comparable quality to
securities in the VMIG1/MIG1 or SP-1+/SP-1 rating categories.

For the purpose of diversification under the Investment Company Act of
1940, as amended (the "1940 Act"), with respect to the National Municipal
Fund, the identification of the issuer of Municipal Obligations depends on
the terms and conditions of the security. When the assets and revenues of
an agency, authority, instrumentality or other political subdivision are
separate from those of the government creating the subdivision and the
security is backed only by the assets and revenues of the subdivision, such
subdivision would be deemed to be the sole issuer. Similarly, in the case
of an industrial development bond, if that bond is backed only by the assets
and revenues of the non-governmental user, then such non-governmental user
would be deemed to be the sole issuer. If, however, in either case, the
creating government or some other entity guarantees a security, such a
guaranty would be considered a separate security and will be treated as an
issue of such government or other entity.

The yields on Municipal Obligations are dependent on a variety of
factors, including general economic and monetary conditions, money market
factors, conditions in the Municipal Obligations market, size of a
particular offering, maturity of the obligation and rating of the issue.
The imposition of a Fund's management fee, as well as other operating
expenses, including fees paid under a Fund's Service Plan and/or
Distribution Plan, will have the effect of reducing the yield to investors.

Municipal lease obligations or installment purchase contract
obligations (collectively, "lease obligations") have special risks not
ordinarily associated with Municipal Obligations. Although lease
obligations do not constitute general obligations of the municipality for
which the municipality's taxing power is pledged, a lease obligation
ordinarily is backed by the municipality's covenant to budget for,
appropriate and make the payments due under the lease obligation. However,
certain lease obligations contain "non-appropriation" clauses which provide
that the municipality has no obligation to make lease or installment
purchase payments in future years unless money is appropriated for such
purpose on a yearly basis. Although "non-appropriation" lease obligations
are secured by the leased property, disposition of the property in the event
of foreclosure might prove difficult. Each Municipal Fund will seek to
minimize these risks by investing only in those lease obligations that
(1) are rated in one of the two highest rating categories for debt
obligations by at least two nationally recognized statistical rating
organizations (or one rating organization if the lease obligation was rated
only by one such organization) or (2) if unrated, are purchased principally
from the issuer or domestic banks or other responsible third parties, in
each case only if the seller shall have entered into an agreement with the
Fund providing that the seller or other responsible third party will either
remarket or repurchase the lease obligation within a short period after
demand by the Fund. The staff of the Securities and Exchange Commission
currently considers certain lease obligations to be illiquid. Accordingly,
not more than 10% of the value of a Fund's net assets will be invested in
lease obligations that are illiquid and in other illiquid securities.

A Municipal Fund will not purchase tender option bonds unless (a) the
demand feature applicable thereto is exercisable by the Fund within 13
months of the date of such purchase upon no more than 30 days' notice and
thereafter is exercisable by the Fund no less frequently than annually upon
no more than 30 days' notice and (b) at the time of such purchase, the
Manager reasonably expects (i) based upon its assessment of current and
historical interest rate trends, that prevailing short-term tax exempt rates
will not exceed the stated interest rate on the underlying Municipal
Obligations at the time of the next tender fee adjustment and (ii) that the
circumstances which might entitle the grantor of a tender option to
terminate the tender option would not occur prior to the time of the next
tender opportunity. At the time of each tender opportunity, the Fund will
exercise the tender option with respect to any tender option bonds unless
the Manager reasonably expects, (x) based upon its assessment of current and
historical interest rate trends, that prevailing short-term tax exempt rates
will not exceed the stated interest rate on the underlying Municipal
Obligations at the time of the next tender fee adjustment, and (y) that the
circumstances which might entitle the grantor of a tender option to
terminate the tender option would not occur prior to the time of the next
tender opportunity. The Fund will exercise the tender feature with respect
to tender option bonds, or otherwise dispose of its tender option bonds,
prior to the time the tender option is scheduled to expire pursuant to the
terms of the agreement under which the tender option is granted. The Fund
otherwise will comply with the provisions of Rule 2a-7 in connection with
the purchase of tender option bonds, including, without limitation, the
requisite determination by the Fund's Board that the tender option bonds in
question meet the quality standards described in Rule 2a-7, which, in the
case of a tender option bond subject to a conditional demand feature, would
include a determination that the security has received both the required
short-term and long-term quality rating or is determined to be of comparable
quality. In the event of a default of the Municipal Obligation underlying a
tender option bond, or the termination of the tender option agreement, the
Fund would look to the maturity date of the underlying security for purposes
of compliance with Rule 2a-7 and, if its remaining maturity was greater than
13 months, the Fund would sell the security as soon as would be practicable.
The Fund will purchase tender option bonds only when it is satisfied that
the custodial and tender option arrangements, including the fee payment
arrangements, will not adversely affect the tax exempt status of the
underlying Municipal Obligations and that payment of any tender fees will
not have the effect of creating taxable income for the Fund. Based on the
tender option bond agreement, the Fund expects to be able to value the
tender option bond at par; however, the value of the instrument will be
monitored to assure that it is valued at fair value.

Ratings of Municipal Obligations. (Municipal Funds) If, subsequent to
its purchase by a Municipal Fund, (a) an issue of rated Municipal
Obligations ceases to be rated in the highest rating category by at least
two rating organizations (or one rating organization if the instrument was
rated by only one such organization) or the Fund's Board determines that it
is no longer of comparable quality or (b) the Manager becomes aware that any
portfolio security not so highly rated or any unrated security has been
given a rating by any rating organization below the rating organization's
second highest rating category, the Fund's Board will reassess promptly
whether such security presents minimal credit risk and will cause the Fund
to take such action as it determines is in the best interest of the Fund and
its shareholders; provided
that the reassessment required by clause (b) is not required if the
portfolio security is disposed of or matures within five business days of
the Manager becoming aware of the new rating and the Fund's Board is
subsequently notified of the Manager's actions.

To the extent that the ratings given by Moody's, S&P or Fitch for
Municipal Obligations may change as a result of changes in such
organizations or their rating systems, each Fund will attempt to use
comparable ratings as standards for its investments in accordance with its
stated investment policies contained in the Fund's Prospectus and this
Statement of Additional Information. The ratings of Moody's, S&P and Fitch
represent their opinions as to the quality of the Municipal Obligations
which they undertake to rate. It should be emphasized, however, that
ratings are relative and subjective and are not absolute standards of
quality. Although these ratings may be an initial criterion for selection
of portfolio investments, the Manager also will evaluate these securities
and the creditworthiness of the issuers of such securities.

Taxable Investments. (Municipal Funds) The taxable investments in
which Municipal Funds may invest include U.S. Government securities,
commercial paper, certificates of deposit, time deposits, bankers'
acceptances, and repurchase agreements. See also "Repurchase Agreements"
above.

Securities issued or guaranteed by the U.S. Government or its agencies
or instrumentalities include U.S. Treasury securities, which differ in their
interest rates, maturities and times of issuance. Some obligations issued
or guaranteed by U.S. Government agencies and instrumentalities are
supported by the full faith and credit of the U.S. Treasury; others by the
right of the issuer to borrow from the U.S. Treasury; others by discretion
ary authority of the U.S. Government to purchase certain obligations of the
agency or instrumentality; and others only by the credit of the agency or
instrumentality. These securities bear fixed, floating or variable rates of
interest. Interest may fluctuate based on generally recognized reference
rates or the relationship of rates. While the U.S. Government provides
financial support to such U.S. Government-sponsored agencies or
instrumentalities, no assurance can be given that it will always do so,
since it is not so obligated by law.

Commercial paper consists of short-term, unsecured promissory notes
issued to finance short-term credit needs.

Certificates of deposit are negotiable certificates representing the
obligation of a bank to repay funds deposited with it for a specified period
of time.

Time deposits are non-negotiable deposits maintained in a banking
institution for a specified period of time (in no event longer than seven
days) at a stated interest rate. Investments in time deposits generally are
limited to London branches of domestic banks that have total assets in
excess of one billion dollars. Time deposits which may be held by the Fund
will not benefit from insurance from the Bank Insurance Fund or the Savings
Association Insurance Fund administered by the Federal Deposit Insurance
Corporation.

Bankers' acceptances are credit instruments evidencing the obligation
of a bank to pay a draft drawn on it by a customer. These instruments
reflect the obligation both of the bank and of the drawer to pay the face
amount of the instrument upon maturity. Other short-term bank obligations
may include uninsured direct obligations bearing fixed, floating or variable
rates of interest.

Management Policies

Forward Commitments. (Municipal Funds) Municipal Obligations and other
securities purchased on a forward commitment or when-issued basis are
subject to changes in value (generally changing in the same way, i.e.,
appreciating when interest rates decline and depreciating when interest
rates rise) based upon the public's perception of the creditworthiness of
the issuer and changes, real or anticipated, in the level of interest rates.
Securities purchased on a forward commitment or when-issued basis may expose
a Fund to risks because they may experience such fluctuations prior to their
actual delivery. Purchasing securities on a when-issued basis can involve
the additional risk that the yield available in the market when the delivery
takes place actually may be higher than that obtained in the transaction
itself. Purchasing securities on a forward commitment or when-issued basis
when a Fund is fully or almost fully invested may result in greater
potential fluctuation in the value of the Fund's net assets and its net
asset value per share.

Investment Considerations and Risks

Investing in California Municipal Obligations. (California Municipal Fund)
Investors should consider carefully the special risks inherent in the Fund's
investment in California Municipal Obligations. These risks result from
certain amendments to the California Constitution and other statues that
limit the taxing and spending authority of California governmental entities,
as well as from the general financial condition of the State of California.
A severe recession from 1990 through fiscal 1994 reduced revenues and
increased expenditures for social welfare programs, resulting in a period of
budget imbalance. During this period, expenditures exceeded revenues in
four out of six years, and the State accumulated and sustained a budget
deficit in its budget reserve, the Special Fund for Economic Uncertainties,
approaching $2.8 billion at its peak at June 30, 1993. By the 1993-94
fiscal year, the accumulated budget deficit was so large that it was
impractical to budget to retire it in one year, so a two-year program was
implemented, using the issuance of revenue anticipation warrants to carry a
portion of the deficit over the end of the fiscal year. When the economy
failed to recover sufficiently, a second two-year plan was implemented in
1994-95, again using cross-fiscal year revenue anticipation warrants to
partly finance the deficit into the 1995-96 fiscal year. As a consequence
of the accumulated budget deficits, the State's cash resources available to
pay its ongoing obligations were significantly reduced causing the State to
rely increasingly on external debt markets to meet its cash needs. Future
budget problems or a deterioration in California's general financial
condition may have the effect of impairing the ability of the issuers of
California Municipal Obligations to pay interest on, or repay the principal
of, such California Municipal Obligations. These and other factors may have
the effect of impairing the ability of the issuers of California Municipal
Obligations to pay interest on, or repay principal of, such California
Municipal Obligations. Investors should review "Appendix C" which sets
forth additional information relating to investing in California Municipal
Obligations.

Investing in New York Municipal Obligations. (New York Municipal Fund) Each
investor should consider carefully the special risks inherent in the
investment in New York Municipal Obligations by the Fund. These risks
result from the financial condition of New York State, certain of its public
bodies and municipalities, and New York City. Beginning in early 1975, New
York State, New York City and other New York State entities faced serious
financial difficulties which jeopardized the credit standing and impaired
the borrowing abilities of such entities and contributed to high interest
rates on, and lower market prices for, debt obligations issued by them. A
recurrence of such financial difficulties or a failure of certain financial
recovery programs could result in defaults or declines in the market values
of various New York Municipal Obligations in which the Fund may invest. If
there should be a default or other financial crisis relating to New York
State, New York City, a State or City agency, or a State municipality, the
market value and marketability of outstanding New York Municipal Obligations
in the Fund's portfolio and the interest income to the Fund could be
adversely affected. Moreover, the national recession and the significant
slowdown in the New York and regional economies in the early 1990's added
substantial uncertainty to estimates of the State's tax revenues, which, in
part, caused the State to incur cash-basis operating deficits in the General
Fund and issue deficit notes during the fiscal periods 1989 through 1992.
New York State's financial operations have improved, however, during recent
fiscal years. For its fiscal years 1993 through 1997, the State recorded
balanced budgets on a cash basis, with positive fund balances in the General
Fund. New York State ended its 1996-97 fiscal year on March 31, 1997 in
balance on a cash basis, with a cash surplus in the General Fund of
approximately $1.4 billion. There can be no assurance that New York State
will not face substantial potential budget gaps in future years. Investors
should review "Appendix D" which sets forth additional information relating
to investing in New York Municipal Obligations.

Investment Restrictions

Government Money Fund. The Government Money Fund has adopted
investment restrictions numbered 1 through 10 as fundamental policies, which
cannot be changed without approval by the holders of a majority (as defined
in the 1940 Act) of the Fund's outstanding voting shares. Investment
restrictions numbered 11 and 12 are not fundamental policies and may be
changed by vote of a majority of the Government Money Fund's Board members
at any time. The Government Money 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.

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. Sell securities short or purchase securities on margin.

4. Write or purchase put or call options.

5. Underwrite the securities of other issuers.

6. Purchase or sell real estate, real estate investment trust
securities, commodities, or oil and gas interests.

7. Make loans to others (except through the purchase of debt
obligations referred to under "Description of the Funds" in the Prospectus).

8. Invest in companies for the purpose of exercising control.

9. Invest in securities of other investment companies, except as they
may be acquired as part of a merger, consolidation or acquisition of assets.

10. Invest more than 25% of its assets in the securities of issuers in
any industry, provided that there shall be no limitation on investments in
obligations issued or guaranteed as to principal and interest by the U.S.
Government.

11. Pledge, mortgage, hypothecate or otherwise encumber its assets,
except to the extent necessary to secure permitted borrowings.

12. Enter into repurchase agreements providing for settlement in more
than seven days after notice or purchase securities which are illiquid, if,
in the aggregate, more than 10% of the value of the Fund's net assets would
be so invested.

* * * * *

Money Fund. The Money 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 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
Money Fund's Board members at any time. The Money 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 Funds" in the
Prospectus and under "Investment Objective and Management Policies" in this
Statement of Additional Information).

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 Funds" 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 illiquid, if,
in the aggregate, more than 10% of the value of the Fund's net assets would
be so invested.

* * * * *

California Municipal Fund. The California Municipal Fund has adopted
investment restrictions numbered 1 through 9 as fundamental policies, which
cannot be changed without approval by the holders of a majority (as defined
in the 1940 Act) of the Fund's outstanding voting shares. Investment
restrictions numbered 10 and 11 are not fundamental policies and may be
changed by vote of a majority of the California Municipal Fund's Board
members at any time. The California Municipal Fund may not:

1. Purchase securities other than Municipal Obligations and Taxable
Investments as those terms are defined above and in the Prospectus.

3. Sell securities short or purchase securities on margin.

4. Underwrite the securities of other issuers, except that the Fund
may bid separately or as part of a group for the purchase of Municipal
Obligations directly from an issuer for its own portfolio to take advantage
of the lower purchase price available.

5. Purchase or sell real estate, real estate investment trust
securities, commodities or commodity contracts, or oil and gas interests,
but this shall not prevent the Fund from investing in Municipal Obligations
secured by real estate or interests therein.

6. Make loans to others except through the purchase of qualified debt
obligations and the entry into repurchase agreements referred to above and
in the Fund's Prospectus.

7. Invest more than 25% of its total assets in the securities of
issuers in any single industry; provided that there shall be no such
limitation on the purchase of Municipal Obligations and, for temporary
defensive purposes, securities issued by domestic banks and obligations
issued or guaranteed by the U.S. Government, its agencies or
instrumentalities.

8. Invest in companies for the purpose of exercising control.

9. Invest in securities of other investment companies, except as they
may be acquired as part of a merger, consolidation or acquisition of assets.

10. Pledge, hypothecate, mortgage or otherwise encumber its assets,
except to the extent necessary to secure permitted borrowings.

11. Enter into repurchase agreements providing for settlement in more
than seven days after notice or purchase securities which are illiquid if,
in the aggregate, more than 10% of the value of the Fund's net assets would
be so invested.

* * * * *

National Municipal Fund. The National Municipal Fund has adopted
investment restrictions numbered 1 through 11 as fundamental policies which
cannot be changed without approval by the holders of a majority (as defined
in the 1940 Act) of the Fund's outstanding voting shares. Investment
restriction number 12 is not a fundamental policy and may be changed by vote
of a majority of the National Municipal Fund's Board members at any time.
The National Municipal Fund may not:

1. Purchase securities other than Municipal Obligations and Taxable
Investments as those terms are defined above and in the Prospectus.

3. Pledge, hypothecate, mortgage or otherwise encumber its assets,
except to secure borrowings for temporary or emergency purposes.

4. Sell securities short or purchase securities on margin.

5. Underwrite the securities of other issuers, except that the Fund
may bid separately or as part of a group for the purchase of Municipal
Obligations directly from an issuer for its own portfolio to take advantage
of the lower purchase price available.

6. Purchase or sell real estate, real estate investment trust
securities, commodities or commodity contracts, or oil and gas interests,
but this shall not prevent the Fund from investing in Municipal Obligations
secured by real estate or interests therein.

7. Make loans to others except through the purchase of qualified debt
obligations and the entry into repurchase agreements referred to above and
in the Prospectus.

8. Invest more than 15% of its assets in the obligations of any one
bank, or invest more than 5% of its assets in the obligations of any other
issuer, except that up to 25% of the value of the Fund's total assets may be
invested, and securities issued or guaranteed by the U.S. Government or its
agencies or instrumentalities may be purchased, without regard to any such
limitations. 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, except that
up to 25% of the value of the Fund's total assets may be invested without
regard to such limitation.

9. Invest more than 25% of its assets in the securities of issuers in
any single industry; provided that there shall be no limitation on the
purchase of Municipal Obligations and, for defensive purposes, securities
issued by banks and obligations issued or guaranteed by the U.S. Government,
its agencies or instrumentalities.

10. Purchase more than 10% of the voting securities of any issuer or
invest in companies for the purpose of exercising control.

11. Invest in securities of other investment companies, except as they
may be acquired as part of a merger, consolidation or acquisition of assets
and except for the purchase, to the extent permitted by Section 12 of the
1940 Act, of shares of registered unit investment trusts whose assets
consist substantially of Municipal Obligations.

* * * * *

New York Municipal Fund. The New York Municipal Fund has adopted
investment restrictions numbered 1 through 9 as fundamental policies, which
cannot be changed without approval by the holders of a majority (as defined
in the 1940 Act) of the Fund's outstanding voting shares. Investment
restrictions numbered 10 and 11 are not fundamental policies and may be
changed by vote of a majority of the New York Municipal Fund's Board members
at any time. The New York Municipal Fund may not:

1. Purchase securities other than Municipal Obligations and Taxable
Investments as those terms are defined above and in the Prospectus.

3. Sell securities short or purchase securities on margin.

6. Make loans to others, except through the purchase of qualified
debt obligations and the entry into repurchase agreements referred to above
and in the Fund's Prospectus.

8. Invest in companies for the purpose of exercising control.

9. Invest in securities of other investment companies, except as they
may be acquired as part of a merger, consolidation or acquisition of assets.

10. Pledge, hypothecate, mortgage or otherwise encumber its assets,
except to the extent necessary to secure permitted borrowings.

11. Enter into repurchase agreements providing for settlement in more
than seven days after notice or purchase securities which are illiquid, if,
in the aggregate, more than 10% of the value of the Fund's net assets would
be so invested.

* * * * *

Municipal Funds. For purposes of Investment Restriction No. 7 for the
California Municipal Fund and the New York Municipal Fund and Investment
Restriction No. 9 for the National Municipal Fund, industrial development
bonds, where the payment of principal and interest is the ultimate
responsibility of companies within the same industry, are grouped together
as an industry.

All Funds. 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.

Each Fund may make commitments more restrictive than the restrictions
listed above so as to permit the sale of Fund shares in certain states.
Should a 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 FUNDS

Board members and officers of each Fund, together with information as
to their principal business occupations during at least the last five years,
are shown below.

Board Members of the Funds

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,
Cognizant Corporation, a service provider of marketing information and
information technology, The Dun & Bradstreet Corporation, MCI
Communications Corporation, Mutual of America Life Insurance Company
and TLC Beatrice International Holdings, Inc. He is 63 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 54 years old and her address is c/o New York University
School of Law, 249 Sullivan Street, New York, New York 10011.

JOSEPH S. DiMARTINO, Chairman of the Board. Since January 1995, Chairman of
the Board of various funds in the Dreyfus Family of Funds. He is also
Chairman of the Board of Directors of Staffing Resources, Inc., a
temporary placement agency; and a director of The Muscular Dystrophy
Association, HealthPlan Services Corporation, a provider of marketing,
administrative and risk management services to health and other benefit
programs, The Noel Group, Inc., a venture capital company, Carlyle
Industries, Inc. (formerly, Belding Heminway Company, Inc.), a button
packager and distributor, and Curtis Industries, Inc., a national
distributor of security products, chemicals, and automotive and other
hardware. For more than five years prior to January 1995, 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 Funds' distributor. From August 1994 until
December 31, 1994, he was a director of Mellon Bank Corporation. He is
53 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 64 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 77 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 served as Chairman of Citizens Union,
an organization which strives to reform and modernize city and state
government from June 1994 until June 1997. He is 54 years old and his
address is 70 Lincoln Center Plaza, New York, New York 10023-6583.
For so long as a Fund's plan 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.

Each 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 amounts of
compensation paid to each Board member by each Fund for its most recent
fiscal year, 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, 1996, are set forth below.

Total Compensation
Aggregate From Funds and
Compensation Fund Complex Paid
Name of Board Member from the Fund* to Board Member
___________________ _______________ _________________

CLIFFORD L. ALEXANDER, JR. $ 82,436 (17)

Government Money Fund 1 $5,000
Money Fund 1 $5,000
California Municipal Fund 2 $3,750
National Municipal Fund 3 $5,000
New York Municipal Fund 3 $3,750

PEGGY C. DAVIS $ 73,084 (15)

Government Money Fund $5,500
Money Fund $5,500
California Municipal Fund $3,750
National Municipal Fund $5,500
New York Municipal Fund $4,000

JOSEPH S. DIMARTINO $517,075 (94)

Government Money Fund $6,875
Money Fund $6,875
California Municipal Fund $4,688
National Municipal Fund $6,875
New York Municipal Fund $5,000

ERNEST KAFKA $ 69,584 (15)

Government Money Fund $5,000
Money Fund $5,000
California Municipal Fund $3,750
National Municipal Fund $5,000
New York Municipal Fund $3,750

SAUL B. KLAMAN $ 73,584 (15)

Government Money Fund $5,500
Money Fund $5,500
California Municipal Fund $3,750
National Municipal Fund $5,500
New York Municipal Fund $4,000

NATHAN LEVENTHAL $ 71,084 (15)

Government Money Fund $5,500
Money Fund $5,500
California Municipal Fund $3,750
National Municipal Fund $5,500
New York Municipal Fund $4,000

_____________________________________

* Amount does not include reimbursed expenses for attending Board
meetings, which amounted to $1,015 for the Government Money Fund, $597
for the Money Fund, $687 for the California Municipal Fund, $1,199 for
the National Municipal Fund and $2,510 for the New York Municipal Fund,
for all Board members as a group.

1. The Fund's most recent fiscal year end was January 31, 1997
2. The Fund's most recent fiscal year end was July 31, 1997
3. The Fund's most recent fiscal year end was November 30, 1996

Officers of the Funds
_____________________

MARIE E. CONNOLLY, President and Treasurer. President, Chief Executive
Officer, Chief Compliance Officer and a director of the Distributor and
Funds Distributor, Inc., the ultimate parent of which is Boston
Institutional Group, Inc., and an officer of other investment companies
advised or administered by the Manager. She is 40 years old.

DOUGLAS C. CONROY, Vice President and Assistant Secretary. Assistant Vice
President of Funds Distributor, Inc., and an officer of other
investment companies advised or administered by the Manager. From
April 1993 to January 1995, he was a Senior Fund Accountant for
Investors Bank & Trust Company. From December 1991 to March 1993, he
was employed as a Fund Accountant at The Boston Company, Inc. He is 28
years old.

ELIZABETH A. KEELEY, Vice President and Assistant Secretary. Vice President
of the Distributor and Funds Distributor, Inc., and an officer of other
investment companies advised or administered by the Manager. She has
been employed by the Distributor since September 1995. She is 27 years
old.

MARY A. NELSON, Vice President and Assistant Treasurer. Vice President of
the Distributor and Funds Distributor, Inc., and an officer of other
investment companies advised or administered by the Manager. From
September 1989 to July 1994, she was an Assistant Vice President and
Client Manager for The Boston Company, Inc. She is 33 years old.

MICHAEL S. PETRUCELLI, Vice President and Assistant Treasurer. Senior Vice
President of Funds Distributor, Inc., and an officer of other
investment companies advised or administered by the Manager. From
December 1989 through November 1996, he was employed by GE Investments
where he held various financial, business development and compliance
positions. He also served as Treasurer of the GE Funds and as Director
of GE Investment Services. He is 36 years old.

JOSEPH F. TOWER, III, Vice President and Assistant Treasurer. Senior Vice
President, Treasurer, Chief Financial Officer and a director of the
Distributor and Funds Distributor, Inc., 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 35 years old.

RICHARD W. INGRAM, Vice President and Assistant Treasurer. Executive Vice
President of the Distributor and Funds Distributor, Inc., and an
officer of other investment companies advised or administered by the
Manager. From March 1994 to November 1995, he was Vice President and
Division Manager for First Data Investor Services Group. From 1989 to
1994, he was Vice President, Assistant Treasurer and Tax Director -
Mutual Funds of The Boston Company, Inc. He is 41 years old.

The address of each officer of the Funds is 200 Park Avenue, New York,
New York 10166.

Each Fund's Board members and officers, as a group, owned less than 1%
of the Fund's shares outstanding on November 7, 1997.

Set forth in "Appendix E" to this Statement of Additional Information
are the shareholders known by each Fund (as indicated) to own of record 5%
or more of such Fund's Class A and Class B shares outstanding on November 7,
1997. A shareholder who beneficially owns, directly or indirectly, more
than 25% of the Fund's voting securities may be deemed a "control person"
(as defined in the 1940 Act) of the Fund.

MANAGEMENT AGREEMENTS

The following information supplements and should be read in conjunction
with the section of each Fund Prospectus entitled "Management of the Funds."

The Manager provides management services pursuant to separate
Management Agreements (respectively, the "Agreement") dated August 24, 1994
with each Fund. As to each Fund, the Agreement 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 Fund's outstanding voting securities, provided that in
either event the continuance also is approved by a majority of the Fund's
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. Each Fund's Agreement was approved
by shareholders on August 3, 1994 and was last approved by the Fund's Board,
including a majority of the Board members who are not "interested persons"
of any party to the Agreement, at a meeting held on September 17, 1997. As
to each Fund, 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. Each
Agreement will terminate automatically, as to the relevant Fund, in the
event of its assignment (as defined in the 1940 Act).

The following persons are officers and/or directors of the Manager: W.
Keith Smith, Chairman of the Board; Christopher M. Condron, President, Chief
Executive Officer, 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; William T. Sandalls, Jr.,
Senior Vice President and Chief Financial Officer; 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; William V. Healey, Assistant
Secretary; and Mandell L. Berman, Burton C. Borgelt, Frank V. Cahouet and
Richard F. Syron, directors.

The Manager manages each 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
each Fund with portfolio managers who are authorized by the Board to execute
purchases and sales of securities. The portfolio managers of the Government
Money Fund and the Money Fund are Bernard W. Kiernan, Patricia A. Larkin and
Thomas Riordan. The portfolio managers of the Municipal Funds are Joseph P.
Darcy, A. Paul Disdier, Douglas J. Gaylor, Karen M. Hand, Stephen C. Kris,
Richard J. Moynihan, W. Michael Petty, Jill C. Shaffro, Samuel J. Weinstock
and Monica S. Wieboldt. The Manager also maintains a research department
with a professional staff of portfolio managers and securities analysts who
provide research services for each Fund and for other funds advised by the
Manager.

The Manager maintains office facilities on behalf of each Fund, and
furnishes statistical and research data, clerical help, accounting, data
processing, bookkeeping and internal auditing and certain other required
services to the Funds. 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 a Fund are borne by such
Fund, except to the extent specifically assumed by the Manager. The
expenses borne by each 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. Each 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" and "Shareholder Services Plans."

As compensation for the Manager's services under the Agreement, each
Fund has agreed to pay the Manager a monthly management fee at the annual
rate of .50 of 1% of the value of such Fund's average daily net assets. All
fees and expenses are accrued daily and deducted before declaration of
dividends to investors. Set forth below are the total amounts paid by each
Fund to the Manager for each Fund's last three fiscal years:

Fiscal Year Ended January 31,
1997 1996 1995
---- ---- ---

Government Money Fund $3,002,777 $2,622,700 $2,624,643

Money Fund $5,285,812 $3,172,667 $2,850,622

Fiscal Year Ended July 31,
1997 1996 1995
---- ---- ----

California Municipal Fund $1,836,034 $2,195,288 $2,105,653

Fiscal Year Ended November 30,
1996 1995 1994
--- ---- ----

National Municipal Fund $1,566,276 $1,447,734 $1,620,876

New York Municipal Fund $2,945,172 $2,936,785 $1,156,870

As to each Fund, 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 such 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. As to each
Fund, no such deduction or payment was required for the most recent fiscal
year end.

As to each Fund, 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 of each Fund Prospectus entitled "How to Buy Shares."

The Distributor. The Distributor serves as each Fund's distributor on
a best efforts basis pursuant to an agreement which is renewable annually.
The Distributor also acts as distributor for the funds in the Dreyfus Family
of Funds and for certain other investment companies.

Using Federal Funds. Dreyfus Transfer, Inc., each 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.

TeleTransfer Privilege. (California Municipal Fund and New York
Municipal
Fund only) TeleTransfer purchase orders may be made at any time. Purchase
orders received by 4:00 p.m., New York time, on any business day that the
Transfer Agent and the New York Stock Exchange are open for business will be
credited to the shareholder's Fund account on the next bank business day
following such purchase order. Purchase orders made after 4:00 p.m., New
York time, on any business day the Transfer Agent and the New York Stock
Exchange are open for business, or orders made on Saturday, Sunday or any
Fund holiday (e.g., when the New York Stock Exchange is not open for
business), will be credited to the shareholder's Fund account on the second
bank business day following such purchase order. To qualify to use the
TeleTransfer Privilege, the initial payment for purchase of Fund shares must
be drawn on, and redemption proceeds paid to, the same bank and account as
are designated on the Account Application or Shareholder Services Form on
file. If the proceeds of a particular redemption are to be wired to an
account at any other bank, the request must be in writing and signature-
guaranteed. See "Redemption of Shares--TeleTransfer Privilege."

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 of each Fund Prospectus relating to Class A shares entitled
"Service Plan" and in conjunction with the section of each Fund Prospectus
relating to Class B shares entitled "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 Board of each
of the Government Money Fund and the Money Fund has adopted separate plans
with respect to Class A and Class B of such Funds and the Board of each of
the Municipal Funds has adopted a plan with respect to Class B of such Funds
(each, a "Plan"). Under each Plan, the respective Fund bears directly the
costs of preparing, printing and distributing prospectuses and statements of
additional information and of implementing and operating the Plan. Under
each Plan adopted with respect to Class A of the Government Money Fund and
Money Fund (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. Under each Service Plan, 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 of the Fund 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 each Fund's 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. Each 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 Fund's 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 17, 1997.
Each Plan is terminable at any time by vote of a majority of the Fund's
Board members 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.

Set forth below are the total amounts paid by each of the Government
Money Fund and the Money Fund pursuant to its Service Plan with respect to
Class A (i) to the Distributor ("Distributor Payments") as reimbursement for
distributing Class A shares and Servicing, (ii) to Dreyfus for payments made
for Servicing ("Dreyfus Payments"), and (iii) for costs of preparing,
printing and distributing prospectuses and statement of additional
information and of implementing and operating the Service Plan ("Printing
and Implementation") for the Fund's most recent fiscal year ended January
31, 1997.
<TABLE>
<CAPTION>

Total Amount
Paid Pursuant Distributor Printing and
Name of Fund to Service Plan Payments Dreyfus Payments Implementation
- ------------ ---------------- ----------- --------------- --------------
<S> <C> <C> <C> <C>
Government
Money Fund
- Class A $1,937,170 $ 881,905 $1,047,607 $ 7,658

Money Fund
- Class A $2,627,518 $1,160,113 $1,454,173 $13,232
</TABLE>

Set forth below are the total amounts paid by each Fund to the
Distributor pursuant to its Distribution Plan with respect to Class B for
the Fund's most recent fiscal year:

Total Amount
Paid Pursuant to
Name of Fund Distribution Plan
- ----------- ------------------

Fiscal Year Ended
January 31, 1997
-----------------
Government
Money Fund
- Class B $ 153,504

Money Fund
- Class B $ 660,152

Fiscal Year
Ended
July 31, 1997
-------------
California
Municipal Fund
- - Class B $ 7,812

Fiscal Year
Ended
November 30, 1996
-----------------
National
Municipal Fund $ 29,002
- - Class B

New York
Municipal Fund
- - Class B $ 50,576

SHAREHOLDER SERVICES PLANS

The following information supplements and should be read in conjunction
with the section of each Fund Prospectus entitled "Shareholder Services
Plan."

Each 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. Each 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. As to each Fund, 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 to 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 its
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 17, 1997. 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.

Set forth below are the total amounts payable by each Fund pursuant to
its separate Shareholder Services Plans for Class A and Class B, the amounts
reimbursed to the Fund by the Manager pursuant to undertakings in effect, if
any, and the net amount paid by the Fund for the Fund's most recent fiscal
year:
<TABLE>
<CAPTION>

Total Amount
Payable Pursuant to Amount Reimbursed
Name of Fund Shareholder Services Pursuant to Net Amount Paid by
and Class Plan Undertaking Fund
- ------------ -------------------- ----------------- -------------------
Fiscal Year Ended Fiscal Year Ended Fiscal Year Ended
January 31, 1997 January 31, 1997 January 31, 1997
----------------- ----------------- ------------------
<S> <C> <C> <C>
Government
Money Fund
- - Class A $ 215,006 $ - $215,006
- - Class B $ 191,880 $62,817 129,061

Fiscal Year Ended Fiscal Year Ended Fiscal Year Ended
January 31, 1997 January 31, 1997 January 31, 1997
---------------- ----------------- -----------------
Money Fund
- - Class A $ 363,543 $ - $363,543
- - Class B $ 825,189 $243,136 582,053

Fiscal YearEnded Fiscal Year Ended Fiscal Year Ended
July 31, 1997 July 31, 1997 July 31, 1997
---------------- ----------------- -----------------
California
Municipal
Fund
- - Class A $ 217,509 $ - $217,509
- - Class B $ 11,719 $ 2,734 $ 8,985

Fiscal Year Ended Fiscal Year Ended Fiscal Year Ended
November 30, 1996 November 30, 1996 November 30, 1996
----------------- ----------------- -----------------
National
Municipal Fund
- - Class A $ 82,464 $ - $ 82,464
- - Class B $ 43,503 $ 41,481 $ 2,022

Fiscal Year Ended Fiscal Year Ended Fiscal Year Ended
November 30, 1996 November 30, November 30,1996
----------------- ----------------- -----------------
New York
Municipal Fund
-Class A $ 476,762 $ - $476,762
-Class B $ 75,863 $ 40,347 $35,516
</TABLE>

REDEMPTION OF SHARES

The following information supplements and should be read in conjunction
with the section of each Fund Prospectus entitled "How to Redeem Shares."

Check Redemption Privilege. Each Fund provides Redemption Checks
("Checks") automatically upon opening an account, unless the investor
specifically refuses the Check Redemption Privilege by checking the
applicable "No" box on the Account Application. The Check Redemption
Privilege may be established for an existing account by a separate signed
Shareholder Services Form. Checks will be sent only to the registered
owner(s) of the account and only to the address of record. The Account
Application or Shareholder Services Form must be manually signed by the
registered owner(s). Checks are drawn on the investor's Fund account and
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, telephone or letter 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, each
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 5:00 p.m., 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 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."

TeleTransfer Privilege. (California Municipal Fund and New York
Municipal
Fund only) Investors should be aware that if they have selected the
TeleTransfer privilege, any request for a wire redemption will be effected
as a TeleTransfer transaction through the Automated Clearing House (ACH)
system unless more prompt transmittal specifically is requested. Redemption
proceeds will be on deposit in the investor's account at an ACH member bank
ordinarily two business days after receipt of the redemption request. See
"Purchase of Shares -- TeleTransfer Privilege."

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. Each 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, each Fund's Board reserves the right to make payments in whole or in
part in 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 might 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 a Fund ordinarily utilizes is restricted, or
when an emergency exists as determined by the Securities and Exchange
Commission so that disposal of a 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 a
Fund's shareholders.

SHAREHOLDER SERVICES

The following information supplements and should be read in conjunction
with the section of each Fund 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 (including
over The Dreyfus Touch automated telephone system) 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. The minimum
initial investment is $750 for Dreyfus-sponsored Keogh Plans, IRAs
(including regular IRAs, spousal IRAs for a non-working spouse, Roth IRAs,
IRAs set up under a Simplified Employee Pension Plan ("SEP-IRAs"), and
rollover IRAs) and 403(b)(7) Plans with only one participant, and $500 for
Dreyfus-sponsored education IRAs. 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 a Fund, shares of certain
other funds 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. Each 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
automatically their dividends or dividends and capital gain distributions,
if any, paid by a 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.
(Government Money Fund and Money Fund) Each of the Government Money Fund and
the Money Fund makes available to corporations a variety of prototype
pension and profit-sharing plans, including Keogh Plans, IRAs (including
regular IRAs, spousal IRAs for a non-working spouse, Roth IRAs, SEP-IRAs,
rollover IRAs and Education IRAs), 401(k) Salary Reduction Plans 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 of each Fund Prospectus entitled "How to Buy Shares."

Amortized Cost Pricing. The valuation of each 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.

Each Fund's Board has established, as a particular responsibility
within the overall duty of care owed to the Fund's shareholders, procedures
reasonably designed to stabilize the Fund's price per share as computed for
the purpose of purchases 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, to the extent a Fund is permitted to invest in such
instruments, will be valued at fair value as determined in good faith by the
Board. With respect to the Municipal Funds, market quotations and market
equivalents used in the Board's review are obtained from an independent
pricing service (the "Service") approved by the Board. The Service values
these Funds' investments based on methods which include considerations of:
yields or prices of municipal obligations of comparable quality, coupon,
maturity and type; indications of values from dealers; and general market
conditions. The Service also may employ electronic data processing
techniques and/or a matrix system to determine valuations.

The extent of any deviation between a 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 a Fund's 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, Martin Luther King, Jr. 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 of each Fund Prospectus entitled "Dividends, Distributions
and Taxes."

Management believes that each Fund has qualified as a "regulated
investment company" under the Internal Revenue Code of 1986, as amended (the
"Code"), for it most recent fiscal year and each Fund intends to continue to
so qualify, if such qualification is in the best interests of its
shareholders. The term "regulated investment company" does not imply the
supervision of management or investment practices or policies by any
government agency.

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 Code.

With respect to the California Municipal Fund, if, at the close of each
quarter of its taxable year, at least 50% of the value of the Fund's total
assets consists of Federal tax exempt obligations, then the Fund may
designate and pay Federal exempt-interest dividends from interest earned on
all such tax exempt obligations. Such exempt-interest dividends may be
excluded by shareholders of the Fund from their gross income for Federal
income tax purposes. Dividends derived from Taxable Investments, together
with distributions from any net realized short-term securities gains,
generally are taxable as ordinary income for Federal income tax purposes
whether or not reinvested. Distributions from net realized long-term
securities gains generally are taxable as long-term capital gains to a
shareholder who is a citizen or resident of the United States, whether or
not reinvested and regardless of the length of time the shareholder has held
his shares.

With respect to the California Municipal Fund, if, at the close of each
quarter of its taxable year, at least 50% of the value of the Fund's total
assets consists of obligations which, when held by an individual, the
interest therefrom is exempt from California personal income tax, and if the
Fund qualifies as a management company under the California Revenue and
Taxation Code, then the Fund will be qualified to pay dividends to its
shareholders that are exempt from California personal income tax (but not
from California franchise tax) ("California exempt-interest dividends").
However, the total amount of California exempt-interest dividends paid by
the Fund to a non-corporate shareholder with respect to any taxable year
cannot exceed such shareholder's pro rata share of interest received by the
Fund during such year that is exempt from California taxation less any
expenses and expenditures deemed to have been paid from such interest.

For shareholders subject to the California personal income tax, exempt-
interest dividends derived from California Municipal Obligations will not be
subject to the California personal income tax. Distributions from net
realized short-term capital gains to California resident shareholders will
be subject to the California personal income tax distributed by the Fund as
ordinary income. Distributions from net realized long-term capital gains
may constitute long-term capital gains for individual California resident
shareholders. Unlike under Federal tax law, the California Municipal Fund's
shareholders will not be subject to California personal income tax, or
receive a credit for California taxes paid by the Fund, on undistributed
capital gains. In addition, California tax law does not consider any
portion of the exempt-interest dividends paid an item of tax preference for
the purpose of computing the California alternative minimum tax.

YIELD INFORMATION

The following information supplements and should be read in conjunction
with the section of each Fund Prospectus entitled "Yield Information."

For the seven-day period ended July 31, 1997, the yield and effective
yield for Class A and Class B shares of each Fund were as follows:

Name of Fund and Class Yield Effective Yield
- --------------------- ----- ---------------
Government Money Fund
Class A 4.83% 4.95%
Class B 4.68% /4.61* 4.79% /4.72%*

Money Fund
Class A 4.97% 5.09%
Class B 4.83% /4.79* 4.95% /4.90%*

California Municipal Fund
Class A 2.94% 2.98%
Class B 2.59% / 2.52%* 2.62% / 2.55%*

National Municipal Fund
Class A 3.20% 3.25%
Class B 2.86% / 2.76%* 2.90% / 2.80%*

New York Municipal Fund
Class A 3.08% 3.13%
Class B 2.70% / 2.60%* 2.74% / 2.63%*
________________
* Net of absorbed expenses.

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. Both yield figures take into account any
applicable distribution and service fees. As a result, at any given time,
the performance of Class B shares should be expected to be lower than that
of Class A shares.

As to the Municipal Funds, tax equivalent yield is computed by dividing
that portion of the yield or effective yield (calculated as described above)
which is tax exempt by 1 minus a stated tax rate and adding the quotient to
that portion, if any, of the yield of the Fund that is not tax exempt.
Based upon a 1997 Federal and State of California income tax rate of 45.22%,
the tax equivalent yield for the 7-day period ended July 31, 1997 for Class
A and Class B shares of the California Municipal Fund was as follows:

Name of Fund and Class Tax Equivalent Yield
- ---------------------- -------------------

California Municipal Fund
Class A 5.37%
Class B 4.73% / 4.60%*

Based upon a 1997 Federal tax rate of 39.60%, the tax equivalent yield
for the seven-day period ended July 31, 1997 for the Class A and Class B
shares of National Municipal Fund was as follows:

Name of Fund and Class Tax Equivalent Yield
- --------------------- -------------------

National Municipal Fund
Class A 5.30%
Class B 4.74% / 4.57%*

Based upon a combined 1997 Federal, New York State and New York City
personal income tax rate of 46.43%, the tax equivalent yield for the seven-
day period ended July 31, 1997 for Class A and Class B shares of the New
York Municipal Fund was as follows:

Name of Fund and Class Tax Equivalent Yield
- ---------------------- --------------------
New York Municipal Fund
Class A 5.75%
Class B 5.04% / 4.85%*
______________
* Net of absorbed expenses.

The tax equivalent yields noted above for the National Municipal Fund
represent the application of the highest Federal marginal personal income
tax rate currently in effect. The taxes equivalent figures, however, do not
include the potential effect of any state or local (including, but not
limited to, county, district or city) taxes, including applicable
surcharges. The tax equivalent yield noted above for the California
Municipal Fund represents the application of the highest Federal and State
of California marginal personal income tax rates presently in effect. The
tax equivalent yields noted above for the New York Municipal Fund represent
the application of the highest Federal, New York State, and New York City
marginal personal income tax rates presently in effect. For Federal
personal income tax purposes a 39.60% tax rate has been used, for California
Sate income tax purposes the rate of 9.30% has been used, and for New York
State and New York City personal income tax purposes, the rates of 6.85% and
4.46%, respectively, have been used. In addition, there may be pending
legislation which could affect such stated tax rates or yields. Each
investor should consult its tax adviser, and consider its own factual
circumstances and applicable tax laws, in order to ascertain the relevant
tax equivalent yield.

Yields will fluctuate and are not necessarily representative of future
results. The 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 a Fund is not guaranteed.
See "Determination of Net Asset Value" for a discussion of the manner in
which a Fund's price per share is determined.

From time to time, each Municipal Fund may use hypothetical tax
equivalent yields or charts in its advertising. These hypothetical yields
or charts will be used for illustrative purposes only and not as being
representative of the Fund's past or future performance.

From time to time, advertising materials for a Fund may refer to or
discuss then-current or past economic conditions, developments and/or
events, or actual or proposed tax legislation. From time to time,
advertising materials for a Fund may also refer to statistical or other
information concerning trends relating to investment companies, as compiled
by industry associations such as the Investment Company Institute.

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, as such, are paid by a 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, and
sales price received from, market makers for the securities may include the
spread between the bid and asked price. No brokerage commissions have been
paid by any Fund to date.

Transactions are allocated to various dealers by the portfolio managers
of a Fund 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 a 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 FUNDS

The following information supplements and should be read in conjunction
with the section of each Fund 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.

Each 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 each Fund's transfer and
dividend disbursing agent. Under a separate Transfer Agency Agreement with
each 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 from each Fund computed on the basis of the number of
shareholder accounts it maintains for such Fund during the month, and is
reimbursed for certain out-of-pocket expenses. The fee paid the Transfer
Agent by each Fund for the Fund's most recent fiscal year was as follows:

Government Money Fund $ 58,897
Money Fund $213,208
California Municipal Fund $114,834
National Municipal Fund $ 64,987
New York Municipal Fund $172,569

The Bank of New York, 90 Washington Street, New York, New York 10286,
is each Fund's custodian.

Stroock & Stroock & Lavan LLP, 180 Maiden Lane, New York, New York
10038-4982, as counsel for each 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 each Fund Prospectus.

Ernst & Young LLP, 787 Seventh Avenue, New York, New York 10019,
independent auditors, have been selected as auditors of each Fund.

FINANCIAL STATEMENTS AND REPORTS OF INDEPENDENT AUDITOR

The Annual and Semi-Annual Reports to Shareholders of the Funds are
separate documents and the financial statements, accompanying notes and,
with respect to the Annual Reports, reports of independent auditors
appearing therein are incorporated by reference into this Statement of
Additional Information. When requesting a copy of this Statement of
Additional Information, you will receive the annual report(s) for the
Fund(s) in which you are a shareholder.

NAME OF FUND ANNUAL & SEMI-ANNUAL REPORTS
- ----------------------------- ----------------------------
General Government Securities January 31, 1997 - Annual
Money Market Fund, Inc. July 31, 1997 - Semi-Annual

General Money Market Fund, Inc. January 31, 1997 -Annual
July 31, 1997 - Semi-Annual

General California Municipal July 31, 1997 - Annual
Money Market Fund

General Municipal Money Market November 30, 1996 - Annual
Fund, Inc. May 31, 1997 - Semi-Annual

General New York Municipal November 30, 1996 - Annual
Money Market Fund May 31, 1997 - Semi-Annual

APPENDIX A
(MONEY FUND ONLY)

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. The rating AA may be
modified by the addition of a plus or minus sign to show relative standing
within the rating category.

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.
APPENDIX B
(MUNICIPAL FUNDS)

Description of S&P, Moody's and Fitch ratings:

S&P

Municipal Bond Ratings

An S&P municipal bond rating is a current assessment of the
creditworthiness of an obligor with respect to a specific obligation.

The ratings are based on current information furnished by the issuer or
obtained by S&P from other sources it considers reliable, and will include:
(1) likelihood of default-capacity and willingness of the obligor as to the
timely payment of interest and repayment of principal in accordance with the
terms of the obligation; (2) nature of and provisions of the obligation; and
(3) protection afforded by, and relative position of, the obligation in the
event of bankruptcy, reorganization or other arrangement under the laws of
bankruptcy and other laws affecting creditors' rights.

AAA

Debt rated AAA has the highest rating assigned by S&P. Capacity to pay
interest and repay principal is extremely strong.

Debt rated AA has a very strong capacity to pay interest and repay
principal and differs from the highest rated issues only in a small degree.

Municipal Note Ratings

SP-1

The issuers of these municipal notes exhibit very strong or strong
capacity to pay principal and interest. Those issues determined to possess
overwhelming safety characteristics are given a plus (+) designation.

Commercial Paper Ratings

The rating A is the highest rating and is assigned by S&P to issues
that are regarded as having the greatest capacity for timely payment.
Issues in this category are delineated with the numbers 1, 2 and 3 to
indicate the relative degree of safety. Paper rated A-1 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.

Moody's

Municipal Bond Ratings

Aaa

Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to
as "gilt edge." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized
are most unlikely to impair the fundamentally strong position of such
issues.

Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what generally are
known as high grade bonds. They are rated lower than the best bonds because
margins of protection may not be as large as in Aaa securities or
fluctuation of protective elements may be of greater amplitude or there may
be other elements present which make the long-term risks appear somewhat
larger than in Aaa securities. Bonds in the Aa category which Moody's
believes possess the strongest investment attributes are designated by the
symbol Aa1.

Commercial Paper Ratings

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 on 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. Issuers rated Prime-2
(P-2) have a strong ability for repayment of senior short-term debt
obligations. Capitalization characteristics, while still appropriate, may
be more affected by external conditions. Ample alternate liquidity is
maintained.

Municipal Note Ratings

Moody's ratings for state and municipal notes and other short-term
loans are designated Moody's Investment Grade (MIG). Such ratings recognize
the difference between short-term credit risk and long-term risk. Factors
affecting the liquidity of the borrower and short-term cyclical elements are
critical in short-term ratings, while other factors of major importance in
bond risk, long-term secular trends for example, may be less important over
the short run.

A short-term rating may also be assigned on an issue having a demand
feature. Such ratings will be designated as VMIG or, if the demand feature
is not rated, as NR. Short-term ratings on issues with demand features are
differentiated by the use of the VMIG symbol to reflect such characteristics
as payment upon periodic demand rather than fixed maturity dates and payment
relying on external liquidity. Additionally, investors should be alert to
the fact that the source of payment may be limited to the external liquidity
with no or limited legal recourse to the issuer in the event the demand is
not met.

Moody's short-term ratings are designated Moody's Investment Grade as
MIG 1 or VMIG 1 through MIG 4 or VMIG 4. As the name implies, when Moody's
assigns a MIG or VMIG rating, all categories define an investment grade
situation.

MIG 1/VMIG 1

This designation denotes best quality. There is present strong
protection by established cash flows, superior liquidity support or
demonstrated broad-based access to the market for refinancing.

MIG 2/VMIG 2

This designation denotes high quality. Margins of protection are ample
although not so large as in the preceding group.

Fitch

Municipal Bond Ratings

The ratings represent Fitch's assessment of the issuer's ability to
meet the obligations of a specific debt issue or class of debt. The ratings
take into consideration special features of the issue, its relationship to
other obligations of the issuer, the current financial condition and
operating performance of the issuer and of any guarantor, as well as the
political and economic environment that might affect the issuer's future
financial strength and credit quality.

AAA

Bonds rated AAA are considered to be investment grade and of the
highest credit quality. The obligor has an exceptionally strong ability to
pay interest and repay principal, which is unlikely to be affected by
reasonably foreseeable events.

Bonds rated AA are considered to be investment grade and of very high
credit quality. The obligor's ability to pay interest and repay principal
is very strong, although not quite as strong as bonds rated AAA. Because
bonds rated in the AAA and AA categories are not significantly vulnerable to
foreseeable future developments, short-term debt of these issuers is
generally rated F-1+.

Plus (+) and minus (-) signs are used with a rating symbol to indicate
the relative position of a credit within the rating category.

Short-Term Ratings

Fitch's short-term ratings apply to debt obligations that are payable
on demand or have original maturities of up to three years, including
commercial paper, certificates of deposit, medium-term notes, and municipal
and investment notes.

Although the credit analysis is similar to Fitch's bond ratings
analysis, the short-term rating places greater emphasis than bond ratings on
the existence of liquidity necessary to meet the issuer's obligations in a
timely manner.

F-1+

Exceptionally Strong Credit Quality. Issues assigned this rating are
regarded as having the strongest degree of assurance for timely payment.

F-1

Very Strong Credit Quality. Issues assigned this rating reflect an
assurance of timely payment only slightly less in degree than issues rated F-
1+.

F-2

Good Credit Quality. Issues carrying this rating have a satisfactory
degree of assurance for timely payments, but the margin of safety is not as
great as the F-1+ and F-1 categories.
APPENDIX C

INVESTING IN CALIFORNIA MUNICIPAL OBLIGATIONS

RISK FACTORS--INVESTING IN CALIFORNIA MUNICIPAL OBLIGATIONS

Certain California (the "State") constitutional amendments, legislative
measures, executive orders, civil actions and voter initiatives, as well as
the general financial condition of the State, could adversely affect the
ability of issuers of California Municipal Obligations to pay interest and
principal on such obligations. The following information constitutes only a
brief summary, does not purport to be a complete description, and is based
on information drawn from official statements relating to securities
offerings of the State of California and various local agencies, available
as of the date of this Statement of Additional Information. While the Fund
has not independently verified such information, it has no reason to believe
that such information is not correct in all material respects.

Recent Developments. From mid-1990 to late 1993, the State suffered a
recession with the worst economic, fiscal and budget conditions since the
1930s. Construction, manufacturing (especially aerospace), exports and
financial services, among others, were all severely affected. Job losses
have been the worst of any post-war recession. Unemployment reached 10.1%
in January 1994, but fell sharply to 7.7% in October and November 1994.
According to the State's Department of Finance, recovery from the recession
in California began in 1994.

The recession seriously affected State tax revenues, which basically
mirror economic conditions. It also has caused increased expenditures for
health and welfare programs. The State also has been facing a structural
imbalance in its budget with the largest programs supported by the General
Fund (K-12 schools and community colleges, health and welfare, and
corrections) growing at rates higher than the growth rates for the principal
revenue sources of the General Fund. As a result, the State experienced
recurring budget deficits in the late 1980s and early 1990s. The State
Controller reported that expenditures exceeded revenues for four of the five
years ending with 1991-92. However, at June 30, 1996, according to the
Department of Finance, the State's Special Fund for Economic Uncertainties
("SFEU") had a small negative balance of approximately $87 million, all but
eliminating the accumulated budget deficit from early 1990's.

The accumulated budget deficits over the past several years, together
with expenditures for school funding which have not been reflected in the
budget, and reduction of available internal borrowable funds, have combined
to significantly deplete the State's cash resources to pay its ongoing
expenses. In order to meet its cash needs, the State has had to rely for
several years on a series of external borrowings, including borrowings past
the end of a fiscal year. Such borrowings are expected to continue in
future fiscal years. To meet its cash flow needs in the 1994-95 fiscal year
the State issued, in July and August 1994, $4.0 billion of revenue
anticipation warrants which mature on April 25, 1996, and $3.0 billion of
revenue anticipation notes which matured on June 28, 1995.

The State issued $3.0 billion of revenue anticipation notes for 1996-97
fiscal year end on August 7, 1996, which matured on June 30, 1997.
As a result of the deterioration in the State's budget and cash
situation, the rating agencies reduced the State's credit ratings. Between
October 1991 and July 1994, the rating on the State's general obligation
bonds was reduced by S&P from "AAA" to "A," by Moody's from "Aaa" to "A1"
and by Fitch from "AAA" to "A."

The 1996-97 Fiscal Year Budget projects $47.6 billion of General Fund
revenues and transfers and $47.3 billion of budgeted expenditures.

It projects $50.7 billion of General Fund revenues and transfers and
$50.3 billion of budgeted expenditures and projects a balance in the SEFU of
$552 million on June 30, 1998.

The 1997-98 Fiscal Year Budget was released by the Governor on January
9, 1997.

On December 6, 1994, Orange County, California (the "County"), together
with its pooled investment funds (the "County Funds") filed for protection
under Chapter 9 of the Federal Bankruptcy Code, after reports that the
County Funds had suffered significant market losses in their investments,
causing a liquidity crisis for the County Funds and the County. More than
200 other public entities, most of which, but not all, are located in the
County, were also depositors in the Funds. As of mid-January 1995,
following a restructuring of most of the Funds' assets to increase their
liquidity and reduce their exposure to interest rate increases, the County
estimated the County Funds' loss at about $1.69 billion, or about 23% of
their initial deposits of approximately $7.5 billion. Many of the entities
which deposited monies in the Funds, including the County, are facing cash
flow difficulties because of the bankruptcy filing and may be required to
reduce programs or capital projects. This may also effect their ability to
meet there outstanding obligations.

The State has no existing obligation with respect to any outstanding
obligations or securities of the County or any of the other participating
entities. However, in the event the County is unable to maintain county
administered State programs because of insufficient resources, it may be
necessary for the State to intervene, but the State cannot presently predict
what, if any, action may occur.

State Finances. State moneys are segregated into the General Fund and
approximately 800 Special Funds including, Bond, Trust and Pension Funds.
The General Fund consists of the revenues received into the State Treasury
and earnings from State investments, which are not required by law to be
credited to any other fund. The General Fund is the principal operating
fund for the majority of governmental activities and is the depository of
most major State revenue sources.

The SFEU is funded with General Fund revenues and was established to
protect the State from unforeseen reduced levels of revenues and/or
unanticipated expenditure increases. Amounts in the SFEU may be transferred
by the Controller as necessary to meet cash needs of the General Fund. The
Controller is required to return moneys so transferred without payment of
interest as soon as there are sufficient moneys in the General Fund. For
budgeting and accounting purposes, any appropriation made from the SFEU is
deemed an appropriation from the General Fund. For year-end reporting
purposes, the Controller is required to add the balance in the SFEU to the
balance in the General Fund so as to show the total monies then available
for General Fund purposes.

Inter-fund borrowing has been used for many years to meet temporary
imbalances of receipts and disbursements in the General Fund. As of June
30, 1996, the General Fund had outstanding loans from the SFEU and Special
Funds in the amount of $1.5 billion.

Articles XIIIA and XIIIB. XIIC and XIIID to the State Constitution and
Other Revenue Law Changes. Prior to 1977, revenues of the State government
experienced significant growth primarily as a result of inflation and
continuous expansion of the tax base of the State. In 1978, State voters
approved an amendment to the State Constitution known as Proposition 13,
which added Article XIIIA to the State Constitution, reducing ad valorem
local property taxes by more than 50%. In addition, Article XIIIA provides
that additional taxes may be levied by cities, counties and special
districts only upon approval of not less than a two-thirds vote of the
"qualified electors" of such district, and requires not less than a two-
thirds vote of each of the two houses of the State Legislature to enact any
changes in State taxes for the purpose of increasing revenues, whether by
increased rate or changes in methods of computation.

Primarily as a result of the reductions in local property tax revenues
received by local governments following the passage of Proposition 13, the
Legislature undertook to provide assistance to such governments by
substantially increasing expenditures from the General Fund for that purpose
beginning in the 1978-79 fiscal year. In recent years, in addition to such
increased expenditures, the indexing of personal income tax rates (to adjust
such rates for the effects of inflation), the elimination of certain
inheritance and gift taxes and the increase of exemption levels for certain
other such taxes had a moderating impact on the growth in State revenues.
In addition, the State has increased expenditures by providing a variety of
tax credits, including renters' and senior citizens' credits and energy
credits.

The State is subject to an annual "appropriations limit" imposed by
Article XIIIB of the State Constitution adopted in 1979. Article XIIIB
prohibits the State from spending "appropriations subject to limitation" in
excess of the appropriations limit imposed. "Appropriations subject to
limitations" are authorizations to spend "proceeds of taxes," which consist
of tax revenues, and certain other funds, including proceeds from regulatory
licenses, user charges or other fees to the extent that such proceeds exceed
"the cost reasonably borne by such entity in providing the regulation,
product or service." One of the exclusions from these limitations is "debt
service" (defined as "appropriations required to pay the cost of interest
and redemption charges, including the funding of any reserve or sinking fund
required in connection therewith, on indebtedness existing or legally
authorized as of January 1, 1979 or on bonded indebtedness thereafter
approved" by the voters). In addition, appropriations required to comply
with mandates of courts or the Federal government and, pursuant to
Proposition 111 enacted in June 1990, appropriations for qualified capital
outlay projects and appropriations of revenues derived from any increase in
gasoline taxes and motor vehicle weight fees above January 1, 1990 levels
are not included as appropriations subject to limitation. In addition, a
number of recent initiatives were structured or proposed to create new tax
revenues dedicated to certain specific uses, with such new taxes expressly
exempted from the Article XIIIB limits (e.g., increased cigarette and
tobacco taxes enacted by Proposition 99 in 1988). The appropriations limit
also may be exceeded in cases of emergency. However, unless the emergency
arises from civil disturbance or natural disaster declared by the Governor,
and the appropriations are approved by two-thirds of the Legislature, the
appropriations limit for the next three years must be reduced by the amount
of the excess.

The State's appropriations limit in each year is based on the limit for
the prior year, adjusted annually for changes in California per capita
personal income and changes in population, and adjusted, when applicable,
for any transfer of financial responsibility of providing services to or
from another unit of government. The measurement of change in population is
a blended average of statewide overall population growth, and change in
attendance at local school and community college ("K-14") districts. As
amended by Proposition 111, the appropriations limit is tested over
consecutive two-year periods. Any excess of the aggregate "proceeds of
taxes" received over such two-year periods above the combined appropriations
limits for those two years is divided equally between transfers to
K-14 districts and refunds to taxpayers.

As originally enacted in 1979, the State's appropriations limit was
based on its 1978-79 fiscal year authorizations to expend proceeds of taxes
and was adjusted annually to reflect changes in cost of living and
population (using different definitions, which were modified by Proposition
111). Commencing with the 1991-92 fiscal year, the State's appropriations
limit is adjusted annually based on the actual 1986-87 limit, and as if
Proposition 111 had been in effect. The State Legislature has enacted
legislation to implement Article XIIIB which defines certain terms used in
Article XIIIB and sets forth the methods for determining the State's
appropriations limit. Government Code Section 7912 requires an estimate of
the State's appropriations limit to be included in the Governor's Budget,
and thereafter to be subject to the budget process and established in the
Budget Act.

For the 1993-94 fiscal year, the State appropriations limit was $36.60
billion, and appropriations subject to limitation were $6.55 billion under
the limit. The limit for the 1994-95 fiscal year was $37.55 billion, and
appropriations subject to limitations were $5.93 billion under the limit.
The limit for the 1992 fiscal year was $39.31 billion, and the
appropriations subject to limitation were estimated to be $5.12 billion
under the limit. The limit for the 1996-97 fiscal year was $42 billion, and
the appropriations subject to limitation were estimated to be $7.12 billion
under the limit.

In November 1988, State voters approved Proposition 98, which changed
State funding of public education below the university level and the
operation of the State's appropriations limit, primarily by guaranteeing K-
14 schools a minimum share of General Fund revenues. Under Proposition 98
(as modified by Proposition 111, which was enacted in June 1990), K-14
schools are guaranteed the greater of (a) 40.3% of General Fund revenues
("Test 1"), (b) the amount appropriated to K-14 schools in the prior year,
adjusted for changes in the cost of living (measured as in Article XIIIB by
reference to California per capita personal income) and enrollment ("Test
2"), or (c) a third test, which would replace the second test in any year
when the percentage growth in per capita General Fund revenues from the
prior year plus .5% is less than the percentage growth in California per
capita personal income ("Test 3"). Under "Test 3," schools would receive
the amount appropriated in the prior year adjusted for changes in enrollment
and per capita General Fund revenues, plus an additional small adjustment
factor. If "Test 3" is used in any year, the difference between "Test 3"
and "Test 2" would become a "credit" to schools which would be the basis of
payments in future years when per capita General Fund revenue growth exceeds
per capita personal income growth.

Proposition 98 permits the Legislature by two-thirds vote of both
houses, with the Governor's concurrence, to suspend the K-14 schools'
minimum funding formula for a one-year period. In the fall of 1989, the
Legislature and the Governor utilized this provision to avoid having 40.3%
of revenues generated by a special supplemental sales tax enacted for
earthquake relief go to K-14 schools. Proposition 98 also contains
provisions transferring certain State tax revenues in excess of the Article
XIIIB limit to K-14 schools.

The 1991-92 Budget Act, applying "Test 2" of Proposition 98,
appropriated approximately $18.4 billion for K-14 schools pursuant to
Proposition 98. During the course of the fiscal year, revenues proved to be
substantially below expectations. By the time the Governor's Budget was
introduced in January 1992, it became clear that per capita growth in
General Fund revenues for 1991-92 would be far smaller than the growth in
California per capita personal income and the Governor's Budget therefore
reflected a reduction in Proposition 98 funding in 1991-92 by applying "Test
3" rather than "Test 2."

In response to the changing revenue situation and to fully fund the
Proposition 98 guarantee in both the 1991-92 and 1992-93 fiscal years
without exceeding it, the Legislature enacted several bills as part of the
1992-93 budget package which responded to the fiscal crisis in education
funding. Fiscal year 1991-92 Proposition 98 appropriations for K-14 schools
were reduced by $1.083 billion. In order to not adversely impact cash
received by school districts, however, a short-term loan was appropriated
from the non-Proposition 98 State General Fund. The Legislature then
appropriated $16.6 billion to K-14 schools for 1992-93 (the minimum
guaranteed by Proposition 98), but designated $1.083 billion of this amount
to "repay" the prior year loan, thereby reducing cash outlays in 1992-93 by
that amount. In addition to reducing the 1991-92 fiscal year appropriations
for K-14 schools by $1.083 billion and converting the amount to a loan (the
"inter-year adjustment"), Chapter 703, Statutes of 1992 also made an
adjustment to "Test 1," based on the additional $1.2 billion of local
property taxes that were shifted to schools and community colleges. The
"Test 1" percentage changed from 40% to 37%. Additionally, Chapter 703
contained a provision that if an appellate court should determine that the
"Test 1" recalculation or the inter-year adjustment is unconstitutional,
unenforceable or invalid, Proposition 98 would be suspended for the 1992-93
fiscal year, with the result that K-14 schools would receive the amount
intended by the 1992-93 Budget Act compromise.

The State Controller stated in October 1992 that, because of a drafting
error in Chapter 703, he could not implement the $1.083 billion reduction of
the 1991-92 school funding appropriation, which was part of the inter-year
adjustment. The Legislature untimely enacted corrective legislation as part
of the 1993-94 Budget package to implement the $1.083 billion inter-year
adjustment as originally intended.

In the 1992-93 Budget Act, a new loan of $732 million was made to K-12
schools in order to maintain per-average daily attendance ("ADA") funding at
the same level as 1991-92, at $4,187. An additional loan of $241 million
was made to community college districts. These loans are to be repaid from
future Proposition 98 entitlements. (The teachers' organization lawsuit
also seeks to declare invalid the provision making the $732 million a loan
"repayable" from future years' Proposition 98 funds. Including both State
and local funds, and adjusting for the loans and repayments, on a cash
basis, total Proposition 98 K-12 funding in 1992-93 increased to $21.5
billion, 2.4% more than the amount in 1992-93 ($21.0 billion).

Based on revised State tax revenues and estimated decreased reported
pupil enrollment, the 1993-94 Budget Act projected that the 1992-93
Proposition 98 Budget Act appropriations of $16.6 billion exceeded a revised
minimum guarantee by $313 million. As a result, the 1993-94 Budget Act
reverted $25 million in 1992-93 appropriations to the General Fund.
Limiting the reversion to this amount ensures that per ADA funding for
general purposes will remain at the prior year level of $4,217 per pupil.
The 1993-94 Governor's Budget subsequently proposed deficiency funding of
$121 million for school apportionments and special education, increasing
funding per pupil in 1992-93 to $4,244. The 1993-94 Budget Act also
designated $98 million in 1992-93 appropriations toward satisfying prior
years' guarantee levels, an obligation that resulted primarily from updating
State tax revenues for 1991-92, and designates $190 million as a loan
repayable from 1993-94 funding.

The 1993-94 Budget Act projected the Proposition 98 minimum funding
level at $13.5 billion based on the "Test 3" calculation where the guarantee
is determined by the change in per capita growth in General Fund revenues,
which are projected to decrease on a year-over-year basis. This amount also
takes into account increased property taxes transferred to school districts
from other local governments.

Legislation accompanying the 1993-94 Budget Act (Chapter 66/93)
provided a new loan of $609 million to K-12 schools in order to maintain per
ADA funding at $4,217 and a loan of $178 million to community colleges.
These loans have been combined with the K-14 1992-93 loans into one loan
totalling $1.760 billion. Repayment of this loan would be from future
years' Proposition 98 entitlements, and would be conditioned on maintaining
current funding levels per pupil for K-12 schools. Chapter 66 also reduced
the "Test 1" percentage to 35% to reflect the property tax shift among local
government agencies.

The 1994-95 Budget Act appropriated $14.4 billion of Proposition 98
funds for K14 schools based on Test 2. This exceeds the minimum Proposition
98 guarantee by $8 million to maintain K-12 funding per pupil at $4,217.
Based upon updated State revenues, growth rates and inflation factors, the
1994-95 Budget Act appropriated an additional $286 million within
Proposition 98 for the 1993-94 fiscal year, to reflect a need in
appropriations for school districts and county offices of education, as well
as an anticipated deficiency in special education fundings. These and other
minor appropriation adjustments increase the 1993-94 Proposition 98
guarantee to $13.8 billion, which exceeds the minimum guarantee in that year
by $272 million and provides per pupil funding of $4,225.

The 1995-96 Governor's Budget adjusts the 1993-94 minimum guarantee to
reflect changes in enrollment and inflation, and 1993-94 Proposition 98
appropriations were increased to $14.1 billion, primarily to reflect changes
in the statutory continuous appropriation for apportionments. The revised
appropriations now exceed the minimum guarantee by $32 million. This
appropriation level still provides per-pupil funding of $4,225.

The 1994-95 Proposition 98 minimum guarantee also has been adjusted for
changes in factors described above, and is now calculated to be $14.9
billion. Within the minimum guarantee, the dollars per pupil have been
maintained at the prior year's level; consequently, the 1994-95 minimum
guarantee now includes a loan repayment of $135 million, and the per-pupil
funding increases to $4,231.

The 1995-96 Governor's Budget proposes to appropriate $15.9 billion of
Proposition 98 funds to K-14 to meet the guarantee level. Included within
the guarantee is a loan repayment of $379 million for the combined
outstanding loans of $1.76 billion. Funding per pupil is estimated to
increase by $61 over 1994-95 to $4,292.

In November 1996, State voters approved Proposition 218, which added
Articles XIIIC and XIIID to the State Constitution generally requiring voter
approval of most tax or fee increases by local governments and curtailing
local governments' use of benefit assessments to fund certain property-
related services to finance infrastructure. The amendments extend to all
local government entities the requirement that all taxes for general
purposes be approved by a majority vote and that all taxes for special
purposes be approved by a two-thirds majority vote (including the
ratification of those taxes that have been imposed since January 1, 1995 up
to the effective date of the amendments). Proposition 218 also limits the
use of special assessments or "property-related" fees to services or
infrastructure that confer a "special benefit" to specific property; police,
fire and other services are now deemed to benefit the public at large and,
therefore, could not be funded by special assessments. Finally, the
amendments enable the voters to use their initiative power to repeal
previously-authorized taxes, assessments, fees and charges. It remains to
be seen what impact these Articles will have on existing and future
California debt obligations.

Sources of Tax Revenue. The California personal income tax, which in
1994-95 contributed about 43% of General Fund revenues, is closely modeled
after the Federal income tax law. It is imposed on net taxable income
(gross income less exclusions and deductions). The tax is progressive with
rates ranging from 1% to 9.3%. Personal, dependent, and other credits are
allowed against the gross tax liability. In addition, taxpayers may be
subject to an alternative minimum tax ("AMT") which is much like the Federal
AMT. This is designed to ensure that excessive use of tax preferences does
not reduce taxpayers' liabilities below some minimum level. Legislation
enacted in July 1991 added two new marginal tax rates, at 10% and 11%,
effective for tax years 1991 through 1995. After 1995, the maximum personal
income tax rate returned to 9.3%, and the AMT rate dropped from 8.5% to 7%.

The personal income tax is adjusted annually by the change in the
consumer price index to prevent taxpayers from being pushed into higher tax
brackets without a real increase in income.

The sales tax is imposed upon retailers for the privilege of selling
tangible personal property in California. Most retail sales and leases are
subject to the tax. However, exemptions have been provided for certain
essentials such as food for home consumption, prescription drugs, gas,
electricity and water. Sales tax accounted for about 34% of General Fund
revenue in 1994-95. Bank and corporation tax revenues comprised about 13%
of General Fund revenue in 1994-95. In 1989, Proposition 99 added a 25
cents per pack excise tax on cigarettes, and a new equivalent excise tax on
other tobacco products. Legislation enacted in 1993 added an additional 2
cents per pack for the purpose of funding breast cancer research.

General Financial Condition of the State. In the years following
enactment of the Federal Tax Reform Act of 1986, and conforming changes to
the State's tax laws, taxpayer behavior became more difficult to predict,
and the State experienced a series of fiscal years in which revenue came in
significantly higher or lower than original estimates. The 1989-90 fiscal
year ended with revenues below estimates and the SFEU was fully depleted by
June 30, 1990. This date essentially coincided with the date of the most
recent recession, and the State subsequently accumulated a budget deficit in
the SFEU approaching $2.8 billion at its peak. The State's budget problems
in recent years also have been caused by a structural imbalance which has
been identified by the current and previous Administrations. The largest
General Fund programs -- K-14 education, health, welfare and corrections --
were increasing faster than the revenue base, driven by the State's rapid
population increases.

Starting in the 1990-91 fiscal year, each budget required multibillion
dollar actions to bring projected revenues and expenditures into balance and
to close large "budget gaps" which were identified. The Legislature and
Governor eventually agreed on significant cuts in program expenditures, some
transfers of program responsibilities and funding from the State to local
governments, revenue increases (particularly in the 1991-92 fiscal year
budget), and various one-time adjustments and accounting changes. However,
as the recession took hold and deepened after the summer of 1990, revenues
dropped sharply and expenditures for health and welfare programs increased
as job losses mounted, so that the State ended each of the 1990-91 and 1991-
92 fiscal years with an unanticipated deficit in the budget reserve, the
SFEU, as compared to projected positive balances.

As a result of the revenue shortfalls accumulating for the previous two
fiscal years, the Controller in April 1992 indicated that cash resources
(including borrowing from Special Funds) would not be sufficient to meet all
General Fund obligations due on June 30 and July 1, 1992. On June 25, 1992,
the Controller issued $475 million of 1992 Revenue Anticipation Warrants
(the "1992 Warrants") in order to provide funds to cover all necessary
payments from the General Fund at the end of the 1991-92 fiscal year and on
July 1, 1992. The 1992 Warrants were paid on July 24, 1992. In addition to
the 1992 Warrants, the Controller reported that as of June 30, 1992, the
General Fund had borrowed $1.336 billion from the SFEU and $4.699 billion
from other Special Funds, using all but about $183 million of borrowable
cash resources.

To balance the 1992-93 Governor's Budget, program reductions totalling
$4.365 billion and a revenue and transfer increase of $872 million were
proposed for the 1991-92 and 1992-93 fiscal years. Economic performance in
the State continued to be sluggish after the 1992-93 Governor's Budget was
prepared. By the time of the "May Revision," issued on May 20, 1992, the
Administration estimated that the 1992-93 Budget needed to address a gap of
about $7.9 billion, much of which was needed to repay the accumulated budget
deficits of the previous two years.

The severity of the budget actions needed led to a long delay in
adopting the budget. With the failure to enact a budget by July 1, 1992,
the State had no legal authority to pay many of its vendors until the budget
was passed. Starting on July 1, 1992, the Controller was required to issue
"registered warrants" in lieu of normal warrants backed by cash to pay many
State obligations. Available cash was used to pay constitutionally mandated
and priority obligations, such as debt service on bonds and revenue
anticipation warrants. Between July 1 and September 4, 1992, the Controller
issued an aggregate of approximately $3.8 billion of registered warrants
payable from the General Fund, all of which were called for redemption by
September 4, 1992 following enactment of the 1992-93 Budget Act and issuance
by the State of $3.3 billion of interim notes.

The Legislature enacted the 1992-93 Budget Bill on August 29, 1992, and
it was signed by the Governor on September 2, 1992. The 1992-93 Budget Act
provided for expenditures of $57.4 billion and consisted of General Fund
expenditures of $40.8 billion and Special Fund and Bond Fund expenditures of
$16.6 billion. The Department of Finance estimated a balance in the SFEU of
$28 million on June 30, 1993.

The $7.9 billion budget gap was closed primarily through cuts in the
program expenditures (principally for health and welfare programs, aid to
schools and support for higher education), together with some increases in
revenues from accelerated collections and changes in tax laws to confirm to
Federal law changes, and a variety of on-time inter-fund transfers and
deferrals. The other major component of the budget compromise was a law
requiring local governments to transfer a total of $1.3 billion to K-12
school and community college districts, thereby reducing by that amount
General Fund support for those districts under Proposition 98.

In May 1993, the Department of Finance projected that the General Fund
would end the fiscal year on June 30, 1993 with an accumulated budget
deficit of about $2.8 billion, and a negative fund balance of about $2.2
billion (the difference being certain reserves for encumbrances and school
funding costs). As a result, the State issued $5 billion of revenue
anticipation notes and warrants.

The Governor's 1993-94 Budget, introduced on January 8, 1993, proposed
General Fund expenditures of $37.3 billion, with projected revenues of $39.9
billion. It also proposed Special Fund expenditures of $12.4 billion and
Special Fund revenues of $12.1 billion. The 1993-94 fiscal year represented
the third consecutive year the Governor and the Legislature were faced with
a very difficult budget environment, requiring revenue actions and
expenditure cuts totaling billions of dollars to produce a balanced budget.
To balance the budget in the face of declining revenues, the Governor
proposed a series of revenue shifts from local government, reliance on
increased Federal aid and reductions in state spending.

The "May Revision" of the Governor's Budget, released on May 20, 1993,
indicated that the revenue projections of the January Budget Proposal were
tracking well, with the full year 1992-93 about $80 million higher than the
January projection. Personal income tax revenue was higher than projected,
sales tax was close to target, and bank and corporation taxes were lagging
behind projections. The May Revision projected the State would have an
accumulated deficit of about $2.75 billion by June 30, 1993. The Governor
proposed to eliminate this deficit over an 18-month period. He also agreed
to retain the 0.5% sales tax scheduled to expire June 30 for a six-month
period, dedicated to local public safety purposes, with a November election
to determine a permanent extension. Unlike previous years, the Governor's
Budget and May Revision did not calculate a "gap" to be closed, but rather
set forth revenue and expenditure forecasts and proposals designed to
produce a balanced budget.

The 1993-94 Budget Act was signed by the Governor on June 30, 1993,
along with implementing legislation. The Governor vetoed about $71 million
in spending. With enactment of the Budget Act, the State carried out its
regular cash flow borrowing program for the fiscal year, which included the
issuance of approximately $2 billion of revenue anticipation notes that
matured on June 28, 1994.

The 1993-94 Budget Act was predicated on General Fund revenues and
transfers estimated at $40.6 billion, about $700 million higher than the
January Governor's Budget, but still about $400 million below 1992-93 (and
the second consecutive year of actual decline). The principal reasons for
declining revenues were the continued weak economy and the expiration (or
repeal) of three fiscal steps taken in 1991--a half cent temporary sales
tax, a deferral of operating loss carry forwards, and repeal by initiative
of a sales tax on candy and snack foods.

The 1993-94 Budget Act also assumed Special Fund revenues of $11.9
billion, an increase of 2.9% over 1992-93.

The 1993-94 Budget Act included General Fund expenditures of $38.5
billion (a 6.3% reduction from projected 1992-93 expenditures of $41.1
billion), in order to keep a balanced budget within the available revenues.
The Budget also included Special Fund expenditures of $12.1 billion, a 4.2%
increase.

The 1993-94 Budget Act contained no General Fund tax/revenue increases
other than a two year suspension of the renters' tax credit.

Administration reports during the course of the 1993-94 fiscal year
indicated that while economic recovery appeared to have started in the
second half of the fiscal year, recessionary conditions continued longer
than had been anticipated when the 1993-94 Budget Act was adopted. Overall,
revenues for the 1993-94 fiscal year were about $800 million lower than
original projections, and expenditures were about $780 million higher,
primarily because of higher health and welfare caseloads, lower property
taxes which require greater State support for K-14 education to make up to
shortfall, and lower than anticipated Federal government payments for
immigration-related costs. The reports in May and June 1994, indicated that
revenues in the second half of the 1993-94 fiscal year were very close to
the projections made in the Governor's Budget of January 10, 1994, which was
consistent with a slow turn around in the economy.

The Department of Finance's July 1994 Bulletin, which included final
June receipts, reported that June revenues were $114 million (2.5%) above
projection, with final end-of-year results at $377 million (about 1%) above
the May Revision projections. Part of this result was due to the end-of-
year adjustments and reconciliations. Personal income tax and sales tax
continued to track projections. The largest factor in the higher than
anticipated revenues was from bank and corporation taxes, which were $140
million (18.4%) above projection in June.

During the 1993-94 fiscal year, the State implemented the Deficit
Retirement Plan, which was part of the 1993-94 Budget Act, by issuing $1.2
billion of revenue anticipation warrants in February 1994 that matured
December 21, 1994. This borrowing reduced the cash deficit at the end of the
1993-94 fiscal year. Nevertheless, because of the $1.5 billion variance
from the original 1993-94 Budget Act assumptions, the General Fund ended the
fiscal year at June 30, 1994 carrying forward an accumulated deficit of
approximately $1.8 billion.

Because of the revenue shortfall and the State's reduced internal
borrowable cash resources, in addition to the $1.2 billion of revenue
anticipation warrants issued as part of the Deficit Retirement Plan, the
State issued an additional $2.0 billion of revenue anticipation warrants
that matured July 26, 1994, which were needed to fund the State's
obligations and expenses through the end of the 1993-94 fiscal year.

The 1994-95 fiscal year represented the fourth consecutive year the
Governor and Legislature were faced with a very difficult budget environment
to produce a balanced budget. Many program cost and budgetary adjustments
had already been made in the last three years. The Governor's Budget
Proposal, as updated in May and June 1994, proposed a two-year solution to
pass the accumulated deficit. The budget proposal set forth revenue and
expenditure forecasts and revenue and expenditure proposals which estimated
operating surpluses for the budget for both 1994-95 and 1995-96, and lead to
the elimination of the accumulated budget deficit, estimated at about $1.8
billion at June 30, 1994, by June 30, 1996.

The 1994-95 Budget Act, signed by the Governor on July 8, 1994,
projected revenues and transfers of $41.9 billion, $2.1 billion higher than
revenues in 1993-94. This reflected the Administration's forecast of an
improving economy. Also included in this figure was the projected receipt
of about $360 million from the Federal government to reimburse the State's
cost of incarcerating undocumented immigrants, most of which eventually was
not received.

The 1994-95 Budget Act projected Special Fund revenues of $12.1
billion, a decrease of 2.4% from 1993-94 estimated revenues.

The 1994-95 Budget Act projected General Fund expenditures of $40.9
billion, an increase of $1.6 billion over the 1993-94 fiscal year. The 1994-
95 Budget Act also projected Special Fund expenditures of $13.7 billion, a
5.4% increase over 1993-94 fiscal year estimated expenditures.
The 1994-95 Budget Act contained no tax increases. Under legislation
enacted for the 1993-94 Budget Act, the renters' tax credit was suspended
for two years (1993 and 1994). A ballot proposition to permanently restore
the renters' tax credit after 1995 failed at the June 1994 election. The
Legislature enacted a further one-year suspension of the renters' tax
credit, for 1995, saving about $390 million in the 1995-96 fiscal year.

The 1995-96 Budget Act was signed by the Governor on August 3, 1995, 34
days after the start of the fiscal year. The Budget Act projected General
Fund revenues and transfers of $44.1 billion, a 3.5% increase from the prior
year. Expenditures were budgeted at $43.4 billion, a 4% increase. The
Budget Act also projected Special Fund revenues of $12.7 billion and
appropriated Special Fund expenditures of $13.0 billion.

Final data for the 1995-96 Fiscal Year showed revenues and transfers of
$46.1 billion, some $2 billion over the original fiscal year estimate, which
was attributed to the strong economic recovery. Expenditures also
increased, to an estimated $45.4 billion, as a result of the requirement to
expend revenues for schools under Proposition 98, and among other things,
failure of the federal government to enact welfare reform during the fiscal
year and to budget new aid for illegal immigrant costs, both of which had
been counted on to allow reductions in State costs. Available internal
borrowable resources (available cash, after payment of all obligations due)
on June 30, 1996 was approximately $3.8 billion, representing a significant
improvement in the State's cash position, and ending the need for deficit
borrowing over the end of the fiscal year. The State's improved cash
position allowed it to repay the $4.0 billion Revenue Anticipation Warrant
issue on April 25, 1996, and to issue only $2.0 billion in revenue
anticipation notes during the fiscal year, which matured on June 28, 1996.

The 1996-97 Budget Act was signed by the Governor on July 15, 1996,
along with various implementing bills. The Governor vetoed about $82
million of appropriations (both General Fund and Special Fund). With the
signing of the Budget Act, the State implemented its regular cash flow
borrowing program with the issuance of $3.0 billion of Revenue Anticipation
Notes to mature on June 30, 1997. The Budget Act appropriated a modest
budget reserve in the SFEU of $305 million, as of June 30, 1997. The
Department of Finance projected that, on June 30, 1997, the State's
available internal borrowable (cash) resources will be $2.9 billion, and
after payment of all obligations due by that date, so that no cross-fiscal
year borrowing will be needed.

The Legislature rejected the Governor's proposed 15% cut in personal
income taxes (to be phased in over three years), and did not approve a 5%
cut in bank and corporation taxes, which was to be effective for income
years starting on January 1, 1997. As a result, revenues for the fiscal
year were estimated to total $47.64 billion, a 3.3% increase over the final
estimated 1995-96 revenues. Special Fund revenues were estimated to be
$13.3 billion.

The Budget Act contained General Fund appropriations totaling $47.25
billion, a 4.0% increase over the final estimated 1995-96 expenditures.
Special Fund expenditures were budgeted at $12.6 billion.

With the continued strong economic recovery in the State, the
Department of Finance has estimated, in connection with the release of the
Governor's 1997-98 Budget Proposal, that revenues for the 1996-97 fiscal
year will exceed initial projections by about $760 million. This increase
will be offset by higher expenditures for K-14 school aid (pursuant to
Proposition 98) and for health and welfare costs, because Federal law
changes and other Federal actions did not provide as much assistance to the
State as was initially planned in the Budget Act. The Department's updated
projections show a balance in the SFEU of $197 million, slightly lower than
projected in July 1996. The Department also projects the State's cash
position will be stronger than originally estimated, with unused internal
borrowable resources at June 30, 1997 of approximately $4.3 billion.

APPENDIX D

INVESTING IN NEW YORK MUNICIPAL OBLIGATIONS

RISK FACTORS--INVESTING IN NEW YORK MUNICIPAL OBLIGATIONS

The financial condition of New York State (the "State") and certain of
its public bodies (the "Agencies") and municipalities, particularly New York
City (the "City"), could affect the market values and marketability of New
York Municipal Obligations which may be held by the Fund. The following
information constitutes only a brief summary, does not purport to be a
complete description, and is based on information drawn from official
statements relating to securities offerings of the State, the City and the
Municipal Assistance Corporation for the City of New York ("MAC") available
as of the date of this Statement of Additional Information. While the Fund
has not independently verified such information, it has no reason to believe
that such information is not correct in all material respects.

A national recession commenced in mid-1990. The downturn continued
through the remainder of the 1990-91 fiscal year, and was followed by a
period of weak economic growth during the remainder of the 1991 calendar
year. For the calendar year 1992, the national economy continued to
recover, although at a rate below all post-war recoveries. The recession
was more severe in the State than in other parts of the nation, owing to a
significant retrenchment in the financial services industry, cutbacks in
defense spending, and an overbuilt real estate market. The State economy
remained in recession until 1993, when employment growth resumed. Since
early 1993, the State has gained approximately 100,000 jobs. The State's
economy expanded modestly during 1995. Although industries that export
goods and services abroad are expected to benefit from the lower dollar,
growth will be slowed by government cutbacks at all levels. On an average
annual basis, employment growth in 1995 was estimated to be about the same
as 1994. Both personal income and wages were estimated to have recorded
moderate gains in 1995. Employment growth is expected to slow significantly
in 1996 as the pace of national economic growth slackens, entire industries
experience consolidations, and governmental employment continues to shrink.
Personal income is estimated to have increased by approximately 5.0% in
1996.

The State's budget for the 1996-97 fiscal year was enacted by the
Legislature on July 13, 1996, more than three months after the start of the
fiscal year. Prior to adoption of the budget, the Legislature enacted
appropriations for disbursements considered to be necessary for State
operations and other purposes, including all necessary appropriations for
debt service. The State Financial Plan for the 1996-97 fiscal year was
formulated on July 25, 1996 and is based on the State's budget as enacted by
the Legislature and signed into law by the Governor, as well as actual
results for the first quarter of the 1996-97 fiscal year.

After adjustments for comparability between fiscal years, the adopted
1996-97 budget projects a year-over-year increase in General Fund
disbursements of 0.2%. Adjusted State Funds (excluding Federal grants)
disbursements are projected to increase by 1.6% from the prior fiscal year.
All Governmental Funds projected disbursements increase by 4.1% over the
prior fiscal year, after adjustments for comparability.

The 1996-97 State Financial Plan is projected to be balanced on a cash
basis. As compared to the Governor's proposed budget as revised on March
20, 1996, the State's adopted budget for 1996-97 increases General Fund
spending by $842 million, primarily from increases for education, special
education and higher education ($563 million). The balance represents
funding increases to a variety of other programs, including community
projects and increased assistance to fiscally distressed cities. Resources
used to fund these additional expenditures include $540 million in increased
revenues projected for 1996-97 based on higher-than-projected tax
collections during the first half of calendar 1996, $110 million in
projected receipts from a new State tax amnesty program, and other resources
including certain non-recurring resources. The total amount of non-
recurring resources included in the 1996-97 State budget is projected to be
$1.3 billion, or 3.9% of total General Fund receipts.

The State revised the cash-basis 1996-97 State Financial Plan on
January 14, 1997, in conjunction with the release of the Executive Budget
for the 1997-98 fiscal year. The 1996-97 General Fund Financial Plan
continues to be balanced. The Division of the Budget projects that, prior
to taking the actions described below, the General Fund Financial Plan would
have shown an operating surplus of approximately $1.3 billion. These
actions include implementing reduced personal income tax withholding to
reflect the impact of tax reduction actions which took effect on January 1,
1997. The Financial Plan assumes the use of $250 million for this purpose.
In addition, $943 million is projected to be used to pay tax refunds during
the 1996-97 fiscal year or reserved to pay refunds during the 1997-98 fiscal
year, which produces a benefit for the 1997-98 Financial Plan. Finally, $65
million is projected to be deposited into the Tax Stabilization Reserve Fund
("TSRF") (in addition to the required deposit of $15 million), increasing
the cash balance in that fund to $317 million by the end of 1996-97.

The projected surplus results primarily from growth in the underlying
forecast for projected receipts. As compared to the enacted budget,
revenues are expected to increase by more than $1 billion, while
disbursements are expected to fall by $228 million. These changes from
original Financial Plan projections reflect actual results through December
1996 as well as modified economic and social services caseload projections
for the balance of the fiscal year. The General Funds closing balance is
expected to be $358 million at the end of 1996-97.

The 1997-98 Financial Plan projects balance on a cash basis in the
General Fund. It reflects a continuing strategy of substantially reduced
State spending, including program restructurings, reductions in social
welfare spending, and efficiency and productivity initiatives. Total
General Fund receipts and transfers from other funds are projected to be
$32.88 billion, a decrease of $88 million from total receipts projected in
the current fiscal year. Total General Fund disbursements and transfers to
other funds are projected to be
$32.84 billion, a decrease of $56 million from spending totals projected for
the current fiscal year.

The State Financial Plan was based upon forecasts of national and State
economic activity. Economic forecasts have frequently failed to predict
accurately the timing and magnitude of changes in the national and the State
economies. Many uncertainties exist in forecasts of both the national and
State economies, including consumer attitudes toward spending, Federal
financial and monetary policies, the availability of credit and the
condition of the world economy, which could have an adverse effect on the
State. There can be no assurance that the State economy will not experience
worse-than-predicted results, with corresponding material and adverse
effects on the State's projections of receipts and disbursements.

There can be no assurance that the State will not face substantial
potential budget gaps in future years resulting from a significant disparity
between tax revenues projected from a lower recurring receipts base and the
spending required to maintain State programs at current levels. To address
any potential budgetary imbalance, the State may need to take significant
actions to align recurring receipts and disbursements in future fiscal
years.

On June 6, 1990, Moody's changed its ratings on all the State's
outstanding general obligation bonds from A1 to A. On March 26, 1990 and
January 13, 1992, S&P changed its ratings on all of the State's outstanding
general obligation bonds from AA- to A and from A to A-, respectively. In
February 1991, Moody's lowered its rating on the City's general obligation
bonds from A to Baa1 and in July 1995, S&P lowered its rating on such bonds
from A- to BBB+. Ratings reflect only the respective views of such
organizations, and their concerns about the financial condition of New York
State and City, the debt load of the State and City and any economic
uncertainties about the region. There is no assurance that a particular
rating will continue for any given period of time or that any such rating
will not be revised downward or withdrawn entirely if, in the judgment of
the agency originally establishing the rating, circumstances so warrant.

(1) The State, Agencies and Other Municipalities. During the mid-
1970s, some of the Agencies and municipalities (in particular, the City)
faced extraordinary financial difficulties, which affected the State's own
financial condition. These events, including a default on short-term notes
issued by the New York State Urban Development Corporation ("UDC") in
February 1975, which default was cured shortly thereafter, and a
continuation of the financial difficulties of the City, created substantial
investor resistance to securities issued by the State and by some of its
municipalities and Agencies. For a time, in late 1975 and early 1976, these
difficulties resulted in a virtual closing of public credit markets for
State and many State related securities.

In response to the financial problems confronting it, the State
developed and implemented programs for its 1977 fiscal year that included
the adoption of a balanced budget on a cash basis (a deficit of $92 million
that actually resulted was financed by issuing notes that were paid during
the first quarter of the State's 1978 fiscal year). In addition,
legislation was enacted limiting the occurrence of additional so-called
"moral obligation" and certain other Agency debt, which legislation does
not, however, apply to MAC debt.

GAAP-Basis Projected Results--1996-97 Fiscal Year. For the 1996-97 fiscal
year, the General Fund GAAP Financial Plan is projected to show total
revenues of $33.04 billion, total expenditures of $32.92 billion, and net
other financing sources and uses of $771 million. The surplus of $886
million primarily reflects an increase in projected revenues.

GAAP-Basis Results--1995-96 Fiscal Year. The State completed its 1995-96
fiscal year with a combined Governmental Funds operating surplus of $432
million, which included an operating surplus in the General Fund of $380
million, in the Capital Projects Funds of $276 million and in the Debt
Service Funds of $185 million. There was an operating deficit of $409
million in the Special Revenue Funds. The State's Combined Balance Sheet as
of March 31, 1996 showed an accumulated deficit in its combined Governmental
Funds of $1.23 billion, reflecting liabilities of $14.59 billion and assets
of $13.35 billion. This accumulated Governmental Funds deficit includes a
$2.93 billion accumulated deficit in the General Fund and an accumulated
deficit of $712 million in the Capital Projects Fund type as partially
offset by accumulated surpluses of $468 million and $1.94 billion in the
Special Revenue and Debt Service Fund types, respectively.

GAAP-Basis Results--1994-95 Fiscal Year. The State's Combined Balance Sheet
as of March 31, 1995 showed an accumulated deficit in its combined
Governmental Funds of $1.666 billion reflecting liabilities of $14.778
billion and assets of $13.112 billion. This accumulated Governmental Funds
deficit includes a $3.308 billion accumulated deficit in the General Fund,
as well as accumulated surpluses in the special Revenue and Debt Service
Fund types of $877 million and $1.753 billion, respectively, and a $988
million accumulated deficit in the Capital Projects Fund type.

The State completed its 1994-95 fiscal year with a combined
Governmental Funds operating deficit of $1.791 billion, which included
operating deficits in the General Fund of $1.426 billion, in the Capital
Projects Funds of $366 million, and in the Debt Service Funds of $38
million. There was an operating surplus in the Special Revenue Funds of $39
million.

GAAP-Basis Results--1993-94 Fiscal Year. The State reported a General Fund
operating surplus of $914 million for the 1993-94 fiscal year, as compared
to an operating surplus of $2.065 billion for the prior fiscal year. The
1993-94 fiscal year surplus reflects several major factors, including the
cash basis surplus recorded in 1993-94, the use of $671 million of the 1992-
93 surplus to fund operating expenses in 1993-94, net proceeds of $575
million in bonds issued by the New York Local Government Assistance
Corporation ("LGAC") and the accumulation of a $265 million balance in the
Contingency Reserve Fund ("CRF"). Revenues increased $543 million (1.7%)
over prior fiscal year revenues with the largest increase occurring in
personal income taxes. Expenditures increased $1.659 billion (5.6%) over
the prior fiscal year, with the largest increase occurring in State aid for
social services programs.

The Special Revenue Fund and Debt Service Fund ended 1993-94 with
operating surpluses of $149 million and $23 million, respectively. The
Capital Projects Fund ended with an operating deficit of $35 million.

GAAP-Basis Results--1992-93 Fiscal Year. The State completed its 1992-93
fiscal year with a GAAP-basis operating surplus of $2.065 billion in the
General Fund and an accumulated deficit of $2.551 billion. The Combined
Statement of Revenues, Expenditures and Changes in Fund Balances reported
total revenues of $31.085 billion, total expenditures of $29.337 billion,
and net other financing sources and uses of $317 million. The surplus
primarily reflects the 1992-93 cash-basis surplus and the net proceeds of
$881 million in bonds issued by LGAC.

The Special Revenue, Debt Service and Capital Projects Fund types ended
the 1992-93 fiscal year with GAAP-basis operating surpluses of $131 million,
$381 million, and $57 million, respectively.

State Financial Plan--Cash-Basis Results--General Fund. The General
Fund is the principal operating fund of the State and is used to account for
all financial transactions, except those required to be accounted for in
another fund. It is the State's largest fund and receives almost all State
taxes and other resources not dedicated to particular purposes. General
Fund moneys are also transferred to other funds, primarily to support
certain capital projects and debt service payments in other fund types.

In the State's 1996-97 fiscal year, the General Fund is expected to
account for approximately 47% of total Governmental Funds disbursements and
71% of total State Funds disbursements. The General Fund is projected to be
balanced on a cash basis for the 1996-97 fiscal year. Total receipts and
transfers from other funds are projected to be $33.17 billion, an increase
of $365 million from the prior fiscal year. Total General Fund
disbursements and transfers to other funds are projected to be $33.12
billion, an increase of $444 million from the total in the prior fiscal
year.

New York State's financial operations have improved during recent
fiscal years. During the period 1989-90 through 1991-92, the State incurred
General Fund operating deficits that were closed with receipts from the
issuance of tax and revenue anticipation notes ("TRANs"). First, the
national recession, and then the lingering economic slowdown in the New York
and regional economy, resulted in repeated shortfalls in receipts and three
budget deficits. During its last four fiscal years, however, the State
recorded balanced budgets on a cash basis, with positive fund balances as
described below.

The State ended its 1995-96 fiscal year on March 31, 1996 with a
General Fund cash surplus. The Division of the Budget reported that
revenues exceeded projections by $270 million, while spending for social
service programs was lower than forecast by $120 million and all other
spending was lower by $55 million. From the resulting benefit of $445
million, a $65 million voluntary deposit was made into the TSRF, and $380
million was used to reduce 1996-97 Financial Plan liabilities by
accelerating 1996-97 payments, deferring 1995-96 revenues, and making a
deposit to the tax refund reserve account.

The General Fund closing fund balance was $287 million, an increase of
$129 million from 1994-95 levels. The $129 million change in fund balance
is attributable to the $65 million voluntary deposit to the TSRF, a $15
million required deposit to the TSRF, a $40 million deposit to the CRF, and
a $9 million deposit to the Revenue Accumulation Fund. The closing fund
balance includes $237 million on deposit in the TSRF, to be used in the
event of any future General Fund deficit as provided under the State
Constitution and State Finance Law. In addition, $41 million is on deposit
in the CRF. The CRF was established in State fiscal year 1993-94 to assist
the State in financing the costs of extraordinary litigation. The remaining
$9 million reflects amounts on deposit in the Revenue Accumulation Fund.
This fund was created to hold certain tax receipts temporarily before their
deposit to other accounts. In addition, $678 million was on deposit in the
tax refund reserve account, of which $521 million was necessary to complete
the restructuring of the State's cash flow under the LGAC program.

General Fund receipts totaled $32.81 billion, a decrease of 1.1% from
1994-95 levels. This decrease reflects the impact of tax reductions enacted
and effective in both 1994 and 1995. General Fund disbursements totaled
$32.68 billion for the 1995-96 fiscal year, a decrease of 2.2% from 1994-95
levels.

The State ended its 1994-95 fiscal year with the General Fund in
balance. The $241 million decline in the fund balance reflects the planned
use of $264 million from the CRF, partially offset by the required deposit
of $23 million to the TSRF. In addition, $278 million was on deposit in the
tax refund reserve account, $250 million of which was deposited to continue
the process of restructuring the State's cash flow as part of the LGAC
program. The closing fund balance of $158 million reflects $157 million in
the TSRF and $1 million in the CRF.

General Fund receipts totaled $33.16 billion, an increase of 2.9% from
1993-94 levels. General Fund disbursements totaled $33.40 billion for the
1994-95 fiscal year, an increase of 4.7% from the previous fiscal year. The
increase in disbursements was primarily the result of one-time litigation
costs for the State, funded by the use of the CRF, offset by $188 million in
spending reductions initiated in January 1995 to avert a potential gap in
the 1994-95 State Financial Plan. These actions included savings from a
hiring freeze, halting the development of certain services, and the
suspension of non-essential capital projects.

The State ended its 1993-94 fiscal year with a General Fund cash
surplus, primarily the result of an improving national economy, State
employment growth, tax collections that exceeded earlier projections and
disbursements that were below expectations. A deposit of $268 million was
made to the CRF, with a withdrawal during the year of $3 million, and a
deposit of $67 million was made to the TSRF. These three transactions
resulted in the change in fund balance of $332 million. In addition, a
deposit of $1.14 billion was made to the tax refund reserve account, of
which $1.03 billion was available for budgetary purposes in the 1994-95
fiscal year. The remaining $114 million was redeposited in the tax refund
reserve account at the end of the State's 1994-95 fiscal year to continue
the process of restructuring the State's cash flow as part of the LGAC
program. The General Fund closing balance was $399 million, of which $265
million was on deposit in the CRF and $134 million in the TSRF. The CRF was
initially funded with a transfer of $100 million attributable to a positive
margin recorded in the 1992-93 fiscal year.

General Fund receipts totaled $32.23 billion, an increase of 2.6% from
1992-93 levels. General Fund disbursements totaled $31.90 billion for the
1993-94 fiscal year, 3.5% higher than the previous fiscal year. Receipts
were higher in part due to improved tax collections from renewed State
economic growth, although the State continued to lag behind the national
economic recovery. Disbursements were higher due in part to increased local
assistance costs for school aid and social services, accelerated payment of
certain Medicaid expenses, and the cost of an additional payroll for State
employees.

Cash-Basis Results--Other Governmental Funds. Activity in the three other
governmental funds has remained relatively stable over the last three fiscal
years, with Federally-funded programs comprising approximately two-thirds of
these funds. The most significant change in the structure of these funds
has been the redirection, beginning in the 1993-94 fiscal year, of a portion
of transportation-related revenues from the General Fund to two new
dedicated funds in the Special Revenue and Capital Projects Fund types.
These revenues are used to support the capital programs of the Department of
Transportation and the Metropolitan Transportation Authority ("MTA").

The Special Revenue Funds account for State receipts from specific
sources that are legally restricted in use to specified purposes and include
all moneys received from the Federal government. Revenues in Special
Revenue Funds in the State's 1995-96 fiscal year increased $1.45 billion
over the prior fiscal year as a result of increases in federal grants and
lottery revenues. Disbursements from Special Revenue Funds in the State's
1995-96 fiscal year increased $1.21 billion over the prior fiscal year as a
result of increased costs for social services programs and an increase in
the distribution of lottery proceeds to school districts.

The Capital Projects Funds are used to finance the acquisition and
construction of major capital facilities and to aid local government units
and Agencies in financing capital construction. Revenues in the Capital
Projects Funds in the State's 1995-96 fiscal year increased $260 million
primarily because a larger share of the petroleum business tax was shifted
from the General Fund to the Dedicated Highway and Bridge Trust Fund and by
an increase in federal grant revenues. Expenditures increased $194 million
because of increased expenditures for education and health and environmental
projects.

The Debt Service Funds serve to fulfill State debt service on long-term
general obligation State debt and other State lease/purchase and contractual
obligation financing commitments. Revenues in the Debt Service Funds in the
State's 1995-96 fiscal year increased $10 million because of increases in
both dedicated taxes and mental hygiene patient fees. Expenditures
increased $201 million.

State Borrowing Plan. The State anticipates that its capital programs
will be financed, in part, through borrowings by the State and public
authorities in the 1996-97 fiscal year. The State expects to issue $411
million in general obligation bonds (including $153.6 million for purposes
of redeeming outstanding BANs) and $154 million in general obligation
commercial paper. The Legislature has also authorized the issuance of up to
$101 million in COPs during the State's 1996-97 fiscal year for equipment
purchases. The projection of the State regarding its borrowings for the
1996-97 fiscal year may change if circumstances require.

State Agencies. The fiscal stability of the State is related, at least
in part, to the fiscal stability of its localities and various of its
Agencies. Various Agencies have issued bonds secured, in part, by
non-binding statutory provisions for State appropriations to maintain
various debt service reserve funds established for such bonds (commonly
referred to as "moral obligation" provisions).

At September 30, 1995, there were 17 Agencies that had outstanding debt
of $100 million or more. The aggregate outstanding debt, including
refunding bonds, of these 17 Agencies was $73.45 billion as of September 30,
1995. As of March 31, 1995, aggregate Agency debt outstanding as State-
supported debt was $27.9 billion and as State-related was $36.1 billion.
Debt service on the outstanding Agency obligations normally is paid out of
revenues generated by the Agencies' projects or programs, but in recent
years the State has provided special financial assistance, in some cases on
a recurring basis, to certain Agencies for operating and other expenses and
for debt service pursuant to moral obligation indebtedness provisions or
otherwise. Additional assistance is expected to continue to be required in
future years.

Several Agencies have experienced financial difficulties in the past.
Certain Agencies continue to experience financial difficulties requiring
financial assistance from the State. Failure of the State to appropriate
necessary amounts or to take other action to permit certain Agencies to meet
their obligations could result in a default by one or more of such Agencies.
If a default were to occur, it would likely have a significant effect on the
marketability of obligations of the State and the Agencies. These Agencies
are discussed below.

The New York State Housing Finance Agency ("HFA") provides financing
for multifamily housing, State University construction, hospital and nursing
home development, and other programs. In general, HFA depends upon
mortgagors in the housing programs it finances to generate sufficient funds
from rental income, subsidies and other payments to meet their respective
mortgage repayment obligations to HFA, which provide the principal source of
funds for the payment of debt service on HFA bonds, as well as to meet
operating and maintenance costs of the projects financed. From January 1,
1976 through March 31, 1987, the State was called upon to appropriate a
total of $162.8 million to make up deficiencies in the debt service reserve
funds of HFA pursuant to moral obligation provisions. The State has not
been called upon to make such payments since the 1986-87 fiscal year.

UDC has experienced, and expects to continue to experience, financial
difficulties with the housing programs it had undertaken prior to 1975,
because a substantial number of these housing program mortgagors are unable
to make full payments on their mortgage loans. Through a subsidiary, UDC is
currently attempting to increase its rate of collection by accelerating its
program of foreclosures and by entering into settlement agreements. UDC has
been, and will remain, dependent upon the State for appropriations to meet
its operating expenses. The State also has appropriated money to assist in
the curing of a default by UDC on notes which did not contain the State's
moral obligation provision.

The MTA oversees New York City's subway and bus lines by its
affiliates, the New York City Transit Authority and the Manhattan and Bronx
Surface Transit Operating Authority (collectively, the "TA"). Through MTA's
subsidiaries, the Long Island Rail Road Company, the Metro-North Commuter
Railroad Company and the Metropolitan Suburban Bus Authority, the MTA
operates certain commuter rail and bus lines in the New York metropolitan
area. In addition, the Staten Island Rapid Transit Authority, an MTA
subsidiary, operates a rapid transit line on Staten Island. Through its
affiliated agency, the Triborough Bridge and Tunnel Authority (the "TBTA"),
the MTA operates certain toll bridges and tunnels. Because fare revenues
are not sufficient to finance the mass transit portion of these operations,
the MTA has depended and will continue to depend for operating support upon
a system of State, local government and TBTA support and, to the extent
available, Federal operating assistance, including loans, grants and
subsidies. If current revenue projections are not realized and/or operating
expenses exceed current projections, the TA or commuter railroads may be
required to seek additional State assistance, raise fares or take other
actions.

Over the past several years the State has enacted several
taxes--including a surcharge on the profits of banks, insurance corporations
and general business corporations doing business in the 12-county region
(the "Metropolitan Transportation Region") served by the MTA and a special
.25% regional sales and use tax--that provide additional revenues for mass
transit purposes, including assistance to the MTA. In addition, since 1987,
State law has required that the proceeds of .25% mortgage recording tax paid
on certain mortgages in the Metropolitan Transportation Region be deposited
in a special MTA fund for operating or capital expenses. Further, in 1993,
the State dedicated a portion of certain additional State petroleum business
tax receipts to fund operating or capital assistance to the MTA. For the
1996-97 State fiscal year, total State assistance to the MTA is estimated at
approximately $1.09 billion.

In 1981, the State Legislature authorized procedures for the adoption,
approval and amendment of a five-year plan for the capital program designed
to upgrade the performance of the MTA's transportation systems and to
supplement, replace and rehabilitate facilities and equipment, and also
granted certain additional bonding authorization therefor.

State legislation accompanying the 1996-97 adopted State budget
authorized the MTA, TBTA and TA to issue an aggregate of $6.5 billion in
bonds to finance a portion of a new $11.98 billion MTA capital plan for the
1995 through 1999 calendar years (the "1995-99 Capital Program"), and
authorized the MTA to submit the 1995-99 Capital Program to the Capital
Program Review Board for approval. This plan supersedes the overlapping
portion of the MTA's 1992-96 Capital Program. This is the fourth capital
plan since the Legislature authorized procedures for the adoption, approval
and amendment of MTA capital programs and is designed to upgrade the
performance of the MTA's transportation systems by investing in new rolling
stock, maintaining replacement schedules for existing assets and bringing
the MTA system into a state of good repair. The 1995-99 Capital Program
assumes the issuance of an estimated $5.1 billion in bonds under this $6.5
billion aggregate bonding authority. The remainder of the plan is projected
to be financed through assistance from the State, the Federal government,
and the City of New York, and from various other revenues generated from
actions taken by the MTA.

There can be no assurance that such governmental actions will be taken,
that sources currently identified will not be decreased or eliminated, or
that the 1995-1999 Capital Program will not be delayed or reduced. If the
MTA capital program is delayed or reduced because of funding shortfalls or
other factors, ridership and fare revenues may decline, which could, among
other things, impair the MTA's ability to meet its operating expenses
without additional State assistance.

The cities, towns, villages and school districts of the State are
political subdivisions of the State with the powers granted by the State
Constitution and statutes. As the sovereign, the State retains broad powers
and responsibilities with respect to the government, finances and welfare of
these political subdivisions, especially in education and social services.
In recent years the State has been called upon to provide added financial
assistance to certain localities.

Other Localities. Certain localities in addition to the City could
have financial problems leading to requests for additional State assistance
during the last several State fiscal years. The potential impact on the
State of such actions by localities is not included in the projections of
the State receipts and disbursements in the State's 1996-97 fiscal year.

Fiscal difficulties experienced by the City of Yonkers resulted in the
re-establishment of the Financial Control Board for the City of Yonkers by
the State in 1984. That Board is charged with oversight of the fiscal
affairs of Yonkers. Future actions taken by the State to assist Yonkers
could result in increased State expenditures for extraordinary local
assistance.

Beginning in 1990, the City of Troy experienced a series of budgetary
deficits that resulted in the establishment of a Supervisory Board for the
City of Troy in 1994. The Supervisory Board's powers were increased in
1995, when Troy MAC was created to help Troy avoid default on certain
obligations. The legislation creating Troy MAC prohibits the City of Troy
from seeking federal bankruptcy protection while Troy MAC bonds are
outstanding.

Seventeen municipalities received extraordinary assistance during the
1996 legislative session through $50 million in special appropriations
targeted for distressed cities.

Municipalities and school districts have engaged in substantial
short-term and long-term borrowings. In 1994, the total indebtedness of all
localities in the State, other than the City, was approximately $17.7
billion. A small portion (approximately $82.9 million) of this indebtedness
represented borrowing to finance budgetary deficits and was issued pursuant
to enabling State legislation. State law requires the Comptroller to review
and make recommendations concerning the budgets of those local government
units other than the City authorized by State law to issue debt to finance
deficits during the period that such deficit financing is outstanding.
Seventeen localities had outstanding indebtedness for deficit financing at
the close of their fiscal year ending in 1994.

From time to time, Federal expenditure reductions could reduce, or in
some cases eliminate, Federal funding of some local programs and accordingly
might impose substantial increased expenditure requirements on affected
localities to increase local revenues to sustain those expenditures. If the
State, the City or any of the Agencies were to suffer serious financial
difficulties jeopardizing their respective access to the public credit
markets, the marketability of notes and bonds issued by localities within
the State could be adversely affected. Localities also face anticipated and
potential problems resulting from certain pending litigation, judicial
decisions and long-range economic trends. The longer-range, potential
problems of declining city population, increasing expenditures and other
economic trends could adversely affect localities and require increasing
State assistance in the future.

Certain litigation pending against the State or its officers or
employees could have a substantial or long-term adverse effect on State
finances. Among the more significant of these litigations are those that
involve: (i) the validity and fairness of agreements and treaties by which
various Indian tribes transferred title to the State of approximately six
million acres of land in central New York; (ii) certain aspects of the
State's Medicaid rates and regulations, including reimbursements to
providers of mandatory and optional Medicaid services; (iii) contamination
in the Love Canal area of Niagara Falls; (iv) a challenge to the State's
practice of reimbursing certain Office of Mental Health patient-care
expenses with clients' Social Security benefits; (v) a challenge to the
methods by which the State reimburses localities for the administrative
costs of food stamp programs; (vi) a challenge to the State's possession of
certain funds taken pursuant to the State's Abandoned Property law; (vii)
alleged responsibility of State officials to assist in remedying racial
segregation in the City of Yonkers; (viii) an action, in which the State is
a third party defendant, for injunctive or other appropriate relief,
concerning liability for the maintenance of stone groins constructed along
certain areas of Long Island's shoreline; (ix) actions challenging the
constitutionality of legislation enacted during the 1990 legislative session
which changed the actuarial funding methods for determining contributions to
State employee retirement systems; (x) an action against State and City
officials alleging that the present level of shelter allowance for public
assistance recipients is inadequate under statutory standards to maintain
proper housing; (xi) an action challenging legislation enacted in 1990 which
had the effect of deferring certain employer contributions to the State
Teachers' Retirement System and reducing State aid to school districts by a
like amount; (xii) a challenge to the constitutionality of financing
programs of the Thruway Authority authorized by Chapters 166 and 410 of the
Laws of 1991 (described below in this Part); (xiii) a challenge to the
constitutionality of financing programs of the Metropolitan Transportation
Authority and the Thruway Authority authorized by Chapter 56 of the Laws of
1993 (described below in this Part); (xiv) challenges to the delay by the
State Department of Social Services in making two one-week Medicaid payments
to the service providers; (xv) challenges by commercial insurers, employee
welfare benefit plans, and health maintenance organizations to provisions of
Section 2807-c of the Public Health Law which impose 13%, 11% and 9%
surcharges on inpatient hospital bills and a bad debt and charity care
allowance on all hospital bills paid by such entities; (xvi) challenges to
the promulgation of the State's proposed procedure to determine the
eligibility for and nature of home care services for Medicaid recipients;
(xvii) a challenge to State implementation of a program which reduces
Medicaid benefits to certain home-relief recipients; and (xviii) challenges
to the rationality and retroactive application of State regulations
recelebrating nursing home Medicaid rates.

(2) New York City. In the mid-1970s, the City had large accumulated
past deficits and until recently was not able to generate sufficient tax and
other ongoing revenues to cover expenses in each fiscal year. However, the
City has achieved balanced operating results for each of its fiscal years
since 1981 as reported in accordance with the then-applicable GAAP
standards. The City's ability to maintain balanced operating results in
future years is subject to numerous contingencies and future developments.

In 1975, the City became unable to market its securities and entered a
period of extraordinary financial difficulties. In response to this crisis,
the State created MAC to provide financing assistance to the City and also
enacted the New York State Financial Emergency Act for the City of New York
(the "Emergency Act") which, among other things, created the Financial
Control Board (the "Control Board") to oversee the City's financial affairs
and facilitate its return to the public credit markets. The State also
established the Office of the State Deputy Comptroller ("OSDC") to assist
the Control Board in exercising its powers and responsibilities. On June
30, 1986, the Control Board's powers of approval over the City Financial
Plan were suspended pursuant to the Emergency Act. However, the Control
Board, MAC and OSDC continue to exercise various monitoring functions
relating to the City's financial condition. The City prepares and operates
under a four-year financial plan which is submitted annually to the Control
Board for review and which the City periodically updates.

The City's independently audited operating results for each of its
fiscal years from 1981 through 1995 show a General Fund surplus reported in
accordance with GAAP. The City has eliminated the cumulative deficit in its
net General Fund position.

During the 1990 and 1991 fiscal years, as a result of a slowing
economy, the City has experienced significant shortfalls in almost all of
its major tax sources and increases in social services costs, and was
required to take actions to close substantial budget gaps in order to
maintain balanced budgets in accordance with the Financial Plan.

According to a recent OSDC economic report, the City's economy was slow
to recover from the recession and was expected to have experienced a weak
employment situation, and moderate wage and income growth, during the 1995-
96 period. Also, Financial Plan reports of OSDC, the Control Board, and the
City Comptroller have variously indicated that many of the City's balanced
budgets have been accomplished, in part, through the use of non-recurring
resource, tax and fee increases, personnel reductions and additional State
assistance; that the City has not yet brought its long-term expenditures in
line with recurring revenues; that the City's proposed gap-closing programs,
if implemented, would narrow future budget gaps; that these programs tend to
rely heavily on actions outside the direct control of the City; and that the
City is therefore likely to continue to face futures projected budget gaps
requiring the City to reduce expenditures and/or increase revenues.
According to the most recent staff reports of OSDC, the Control Board and
the City Comptroller during the four-year period covered by the current
Financial Plan, the City is relying on obtaining substantial resources from
initiatives needing approval and cooperation of its municipal labor unions,
Covered Organizations, and City Council, as well as the State and Federal
governments, among others, and there can be no assurance that such approval
can be obtained.

The City requires certain amounts of financing for seasonal and capital
spending purposes. The City issued $1.75 billion of notes for seasonal
financing purposes during the 1994 fiscal year. The City's capital
financing program projects long-term financing requirements of approximately
$17 billion for the City's fiscal years 1995 through 1998 for the
construction and rehabilitation of the City's infrastructure and other fixed
assets. The major capital requirement include expenditures for the City's
water supply system, and waste disposal systems, roads, bridges, mass
transit, schools and housing. In addition, the City and the Municipal Water
Finance Authority issued about $1.8 billion in refunding bonds in the 1994
fiscal year.

State Economic Trends. The State historically has been one of the
wealthiest states in the nation. For decades, however, the State has grown
more slowly than the nation as a whole, gradually eroding its relative
economic position. Statewide, urban centers have experienced significant
changes involving migration of the more affluent to the suburbs and an
influx of generally less affluent residents. Regionally, the older
Northeast cities have suffered because of the relative success that the
South and the West have had in attracting people and business. The City has
also had to face greater competition as other major cities have developed
financial and business capabilities which make them less dependent on the
specialized services traditionally available almost exclusively in the City.

During the 1982-83 recession, overall economic activity in the State
declined less than that of the nation as a whole. However, in the calendar
years 1984 through 1991, the State's rate of economic expansion was somewhat
slower than that of the nation. In the 1990-91 recession, the economy of
the State, and that of the rest of the Northeast, was more heavily damaged
than that of the nation as a whole and has been slower to recover. The
total employment growth rate in the State has been below the national
average since 1984. The unemployment rate in the State dipped below the
national rate in the second half of 1981 and remained lower until 1991;
since then, it has been higher. According to data published by the U.S.
Bureau of Economic Analysis, during the past ten years, total personal
income in the State rose slightly faster than the national average only from
1986 through 1988.
APPENDIX E

Set forth below, as to each share Class of each Fund, as applicable,
are those shareholders of record known by the Fund to own 5% or more of a
Class of shares of the Fund as of November 7, 1997.

Government Money Fund

Class A: Compass Bank, Attn: Sharon Weaver, P.O. Box 10566, Birmingham, AL
35296 - owned of record 5.1%

Class B: Robert W. Baird & Co., Omnibus Account for the Exclusive Benefit
of Customers, P.O. Box 672, Milwaukee, WI 53201-0672 - owned of
record 59.2%;

First Albany Corporation, P.O. Box 22024, Albany, NY 12201-
2024 - owned of record 23.3%;

NationsBanc Montgomery Securities, Money Market Funds
Omnibus, 600 Montgomery Street, Suite 4, San Francisco, CA 9411-
2702 - owned of record 6.3%;

George K. Baum & Company, Attn: Ron Frazier, 120 West 12th
Street, Kansas City, MO 64105-1917 - owned of record 5.4%.

Money Fund

Class A: NationsBanc Montgomery Securities, Money Market Funds Omnibus, 600
Montgomery Street, Suite 4, San Francisco, CA 9411-2702 - owned of
record 13.8%

Class B: Robert W. Baird & Co., Omnibus Account for the Exclusive Benefit
of Customers, P.O. Box 672, Milwaukee, WI 53201-0672 - owned of
record 48.6%;

First Albany Corporation, P.O. Box 22024, Albany, NY 12201-
2024 - owned of record 34%;

George K. Baum & Company, Attn: Ron Frazier, 120 West 12th
Street, Kansas City, MO 64105-1917 - owned of record 7.1%.

California Municipal Fund

Class A: NationsBanc Montgomery Securities, Money Market Funds Omnibus, 600
Montgomery Street, Suite 4, San Francisco, CA 9411-2702 - owned of
record 15%

Class B: Robert W. Baird & Co., Omnibus Account for the Exclusive Benefit
of Customers, P.O. Box 672, Milwaukee, WI 53201-0672 - owned of
record 45.9%;

NationsBanc Montgomery Securities, Money Market Funds
Omnibus, 600 Montgomery Street, Suite 4, San Francisco, CA 9411-
2702 - owned of record 43.6%;

First Albany Corporation, P.O. Box 22024, Albany, NY 12201-
2024 - owned of record 10.5%

National Municipal Fund

Class A: NationsBanc Montgomery Securities, Money Market Funds Omnibus, 600
Montgomery Street, Suite 4, San Francisco, CA 9411-2702 - owned of
record 22.3%

Class B: Robert W. Baird & Co., Omnibus Account for the Exclusive Benefit
of Customers, P.O. Box 672, Milwaukee, WI 53201-0672 - owned of
record 80.8%;

George K. Baum & Company, Attn: Ron Frazier, 120 West 12th
Street, Kansas City, MO 64105-1917 - owned of record 11.2%.;

First Albany Corporation, P.O. Box 22024, Albany, NY 12201-
2024 - owned of record 5.5%

New York Municipal Fund

Class A:
Class B: First Albany Corporation, P.O. Box 22024, Albany, NY 12201-2024 -
owned of record 90.4%;

Robert W. Baird & Co., Omnibus Account for the Exclusive
Benefit of Customers, P.O. Box 672, Milwaukee, WI 53201-0672 -
owned of record 6.1%