File Nos. 2-72836
811-3207
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 27 [X]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 27 [X]
(Check appropriate box or boxes.)
GENERAL MONEY MARKET FUND, INC.
(Exact Name of Registrant as Specified in Charter)
c/o The Dreyfus Corporation
200 Park Avenue, New York, New York 10166
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (212) 922-6000
Mark N. Jacobs, Esq.
200 Park Avenue
New York, New York 10166
(Name and Address of Agent for Service)
It is proposed that this filing will become effective (check appropriate
box)
immediately upon filing pursuant to paragraph (b)
----
on (date) pursuant to paragraph (b)
----
X 60 days after filing pursuant to paragraph (a)(i)
----
on (date) pursuant to paragraph (a)(i)
----
75 days after filing pursuant to paragraph (a)(ii)
----
on (date) pursuant to paragraph (a)(ii) of Rule 485
----
If appropriate, check the following box:
this post-effective amendment designates a new effective date
for a previously filed post-effective amendment.
----
GENERAL MONEY MARKET FUND, INC.
Cross-Reference Sheet Pursuant to Rule 495(a)
Prospectus For Prospectus For
Government, Money
Combined Funds National Funds
Items in
Part A of Class A Class Class A Class B
Form N-1A Caption
_________ _______ Page Page Page Page
1 Cover Page Cover Cover Cover Cover
2 Synopsis 4 4 3 3
3 Condensed Financial 5 5 4 4
Information
4 General Description of 8,27 8,27 5,20 5,20
Registrant
5 Management of the Fund 13 14 8 9
5(a) Management's Discussion of * * * *
the Fund's Performance
6 Capital Stock and Other 27 27 20 20
Securities
7 Purchase of Securities Being 15 15 9 10
Offered
8 Redemption or Repurchase 21 21 15 15
9 Pending Legal Proceedings * * * *
Items in
Part B of
Form N-1A Page
- --------- _____
10 Cover Page Cover
11 Table of Contents B-2
12 General Information and History B-1, 44
13 Investment Objectives and Policies B-3
14 Management of the Fund B-19
15 Control Persons and Principal B-87
Holders of Securities
16 Investment Advisory and Other B-24
Services
_____________________________________
NOTE: * Omitted since answer is negative or inapplicable.
GENERAL MONEY MARKET FUND, INC.
Cross-Reference Sheet Pursuant to Rule 495(a) (continued)
Items in
Part B of
Form N-1A Caption Page
_________ _______ _____
17 Brokerage Allocation B-43
18 Capital Stock and Other Securities B-44
19 Purchase, Redemption and Pricing B-27,B-32
of Securities Being Offered B-38
20 Tax Status *
21 Underwriters B-1, B-22
22 Calculations of Performance Data B-41
23 Financial Statements B-46
Items in
Part C of
Form N-1A
_________
24 Financial Statements and Exhibits C-1
25 Persons Controlled by or Under C-3
Common Control with Registrant
26 Number of Holders of Securities C-3
27 Indemnification C-4
28 Business and Other Connections of C-5
Investment Adviser
29 Principal Underwriters C-10
30 Location of Accounts and Records C-13
31 Management Services C-13
32 Undertakings C-13
_____________________________________
NOTE: * Omitted since answer is negative or inapplicable.
_____________________________________________________________________________
COMBINED PROSPECTUS May 1, 1998
GENERAL MONEY MARKET FUNDS
CLASS A SHARES
_____________________________________________________________________________
General Government Securities Money Market Fund (the "Government
Money Fund"), General Money Market Fund (the "Money Fund"), General
California Municipal Money Market Fund (the "California Municipal Fund"),
General Minnesota Municipal Money Market Fund (the "Minnesota Municipal
Fund"), General Municipal Money Market Fund (the "National Municipal Fund")
and General New York Municipal Money Market Fund (the "New York Municipal
Fund") are open-end management investment companies, known as money market
mutual funds (each, a "Fund"). Each Fund seeks to provide you with as high a
level of current income as is consistent with the preservation of capital and
the maintenance of liquidity. In addition, each of the California Municipal
Fund, the Minnesota Municipal Fund, the National Municipal Fund and the New
York Municipal Fund seeks to provide current income exempt from Federal
income tax and, in the case of the California Municipal Fund, exempt from
State of California income taxes, in the case of the Minnesota Municipal
Fund, exempt from State of Minnesota income taxes, and, in the case of the
New York Municipal Fund, exempt from New York State and New York City income
taxes.
The Dreyfus Corporation professionally manages each Fund's portfolio.
An investment in the Funds is neither insured nor guaranteed by the
U.S. Government. There can be no assurance that the Funds will be able to
maintain a stable net asset value of $1.00 per share.
Since each of the California Municipal Fund, the Minnesota Municipal
Fund and the New York Municipal Fund may invest a significant portion of its
assets in a single issuer, an investment in these Funds may involve greater
risk than investments in certain other types of money market funds.
(cover page continued on next page)
This Prospectus sets forth concisely information about each Fund that
you should know before investing. It should be read and retained for future
reference.
The Statement of Additional Information, dated May 1, 1998, which may
be revised from time to time, provides a further discussion of certain areas
in this Prospectus and other matters which may be of interest to some
investors. It has been filed with the Securities and Exchange Commission and
is incorporated herein by reference. The Securities and Exchange Commission
maintains a web site (http://www.sec.gov) that contains the Statement of
Additional Information, material incorporated by reference, and other
information regarding the funds. For a free copy of the Statement of
Additional Information, write to a Fund at 144 Glenn Curtiss Boulevard,
Uniondale, New York 11556-0144, or call 1-800-645-6561. When telephoning, ask
for operator 144.
Mutual fund shares are not deposits or obligations of, or guaranteed
or endorsed by, any bank, and are not federally insured by the Federal
Deposit Insurance Corporation, the Federal Reserve Board, or any other
agency. Money market mutual fund shares involve certain investment risks,
including the possible loss of principal.
_____________________________________________________________________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
_____________________________________________________________________________
(CONTINUED FROM COVER PAGE)
You can invest, reinvest or redeem shares at any time without charge
or penalty imposed by a Fund.
Fund shares may be purchased only by clients of Service Agents as
described herein. By this Prospectus, each Fund is offering Class A shares.
Another class of Fund shares_Class B shares_are offered by the Fund pursuant
to a separate prospectus and are not offered hereby. Class A and Class B
shares are identical, except as to the services offered to, and the expenses
borne by, each Class which may affect performance. If you would like to
obtain information about Class B shares, please write to the address or call
the number set forth below.
Each Fund is a separate investment portfolio with operations and
results that are unrelated to those of each other Fund. This combined
Prospectus has been prepared for your convenience to provide you the
opportunity to consider six investment choices in one document.
TABLE OF CONTENTS
Page
Annual Fund Operating Expenses........................... 4
Condensed Financial Information.......................... 5
Yield Information........................................ 7
Description of the Funds................................. 8
Management of the Funds.................................. 13
How to Buy Shares........................................ 15
Shareholder Services..................................... 18
How to Redeem Shares..................................... 21
Service Plan............................................. 24
Shareholder Services Plan................................ 25
Dividends, Distributions and Taxes....................... 25
General Information...................................... 27
Appendix................................................. 30
[Page 2]
[This Page Intentionally Left Blank]
[Page 3]
<TABLE>
<CAPTION>
Annual Fund Operating Expenses
(as a percentage of average daily net assets)
GOVERNMENT
MONEY MONEY
FUND FUND
_____________ ______
<S> <C> <C>
Management Fees.......................................................... .50% .50%
12b-1 Fees............................................................... .20% .20%
Other Expenses........................................................... .12% .18%
Total Fund Operating Expenses..... ............................... .82% .88%
EXAMPLE:
You would pay the following expenses on
a $1,000 investment, assuming (1) 5% annual
return and (2) redemption at the end of
each time period:
1 YEAR $ 8 $ 9
3 YEARS $ 26 $ 28
5 YEARS $ 46 $ 49
10 YEARS $101 $108
</TABLE>
<TABLE>
<CAPTION>
CALIFORNIA MINNESOTA NATIONAL NEW YORK
MUNICIPAL MUNICIPAL MUNICIPAL MUNICIPAL
FUND FUND FUND FUND
______ ___________ _________ __________
<S> <C> <C> <C> <C>
Management Fees............................................ .50% .50% .50% .50%
12b-1 Fees................................................... None None None None
Other Expenses............................................... .20% .15% .12% .16%
Total Fund Operating Expenses............................... .70% .65% .62% .66%
EXAMPLE:
You would pay the following expenses on
a $1,000 investment, assuming (1) 5% annual
return and (2) redemption at the end of
each time period:
1 YEAR $ 7 $ 7 $ 6 $ 7
3 YEARS $22 $21 $20 $21
5 YEARS $39 $36 $35 $37
10 YEARS $87 $81 $77 $82
</TABLE>
_______________________________________________________________________________
THE AMOUNTS LISTED IN THE EXAMPLE SHOULD NOT BE CONSIDERED AS
REPRESENTATIVE OF PAST OR FUTURE EXPENSES AND ACTUAL
EXPENSES MAY BE GREATER OR LESS THAN THOSE INDICATED. MOREOVER, WHILE THE
EXAMPLE ASSUMES A 5% ANNUAL RETURN, EACH FUND'S ACTUAL PERFORMANCE WILL VARY
AND MAY RESULT IN AN ACTUAL RETURN GREATER OR LESS THAN 5%.
______________________________________________________________________________
The purpose of the foregoing tables is to assist you in understanding
the costs and expenses borne by each Fund, the payment of which will reduce
investors' annual return. The information in the foregoing tables does not
reflect any fee waivers or expense reimbursement arrangements that may be in
effect. Other Expenses for the Minnesota Municipal Fund are based on
estimated amounts for the current fiscal year. Certain Service Agents (as
defined below) may charge their clients direct fees for effecting transactions
in Fund shares; such fees are not reflected in the foregoing table. For a
further description of the various costs and expenses incurred in the
operation of the Funds, as well as expense reimbursement or waiver
arrangements, see "Management of the Funds," "How to Buy Shares," "Service
Plan" and "Shareholder Services Plan."
[Page 4]
CONDENSED FINANCIAL INFORMATION
The information in the following tables has been audited by Ernst &
Young LLP, each Fund's independent auditors. Further financial data, related
notes and reports of independent auditors accompany the Statement of
Additional Information, available upon request.
FINANCIAL HIGHLIGHTS
Contained below for each Fund (except the Minnesota Municipal Fund,
which has not completed its first reporting period) is per share operating
performance data for a Class A share outstanding, total investment return,
ratios to average net assets and other supplemental data for each period
indicated. This information has been derived from the Fund's financial
statements.
<TABLE>
<CAPTION>
GOVERNMENT MONEY FUND
___________________________________________________________________________________________________________
TEN MONTHS
FISCAL YEAR ENDED ENDED
JANUARY 31, NOVEMBER 30,
___________________________________________________________________________________________________________
PER SHARE DATA: 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1997(1)
_____ ______ ______ _____ ____ ____ ____ ____ ____ _____ _______
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of
period.... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
_____ ______ ______ _____ ____ ____ ____ ____ ____ _____ _____
INVESTMENT OPERATIONS:
Investment
income-net... .058 .068 .082 .072 .053 .033 .027 .038 .052 .047 .040
_____ ______ ______ _____ ____ ____ ____ ____ ____ _____ _____
DISTRIBUTIONS:
Dividends from
investment
income-net... (.058) (.068) (.082) (.072) (.053) (.033) (.027) (.038) (.052) (.047) (.040)
_____ ______ ______ _____ ____ ____ ____ ____ ____ _____ _____
Net asset value,
end of period.. $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
===== ===== ===== ===== ===== ===== ===== ===== ===== ===== =====
TOTAL INVESTMENT
RETURN.... 5.96% 6.99% 8.56% 7.42% 5.46% 3.36% 2.69% 3.90% 5.35% 4.75% 4.84%(2)
RATIOS/SUPPLEMENTAL
DATA:
Ratio of expenses
to average
net assets..... .83% .87% .87% .86% .82% .82% .81% .83% .84% .82% .82%(2)
Ratio of net
investment
income to
average net
assets... 5.80% 6.74% 8.23% 7.14% 5.27% 3.28% 2.66% 3.82% 5.22% 4.65% 4.78%(2)
Net Assets, end
of period
(000's
omitted).... $292,204 $263,130 $306,610 $408,817 $609,015 $725,419 $536,884 $513,345 $530,054 $519,861 $510,289
(1) Effective February 1, 1997, the Fund has changed its fiscal year end from
January 31 to November 30.
(2) Annualized.
</TABLE>
<TABLE>
<CAPTION>
MONEY FUND
___________________________________________________________________________________________________________
TEN MONTHS
FISCAL YEAR ENDED ENDED
JANUARY 31, NOVEMBER 30,
___________________________________________________________________________________________________________
PER SHARE DATA: 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1997(1)
_____ ______ ______ _____ ____ ____ ____ ____ ____ _____ _______
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of
period.... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
_____ ______ ______ _____ ____ ____ ____ _____ ____ _____ _____
Investment
Operations:
Investment
income_net.. .060 .069 .085 .074 .055 .032 .025 .037 .053 .047 .041
_____ ______ ______ _____ ____ ____ ____ _____ ____ _____ _____
Distributions:
Dividends from
investment
income_net..... (.060) (.069) (.085) (.074) (.055) (.032) (.025) (.037) (.053) (.047) (.041)
_____ ______ ______ _____ ____ ____ ____ _____ ____ _____ _____
Net asset value,
end of period.. $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
===== ===== ===== ===== ===== ===== ===== ===== ===== ===== =====
TOTAL INVESTMENT
RETURN.. 6.15% 7.10% 8.80% 7.64% 5.61% 3.26% 2.56% 3.75% 5.42% 4.81% 4.99%(2)
RATIOS/SUPPLEMENTAL
DATA:
Ratio of expenses
to average net
assets..... .95% .97% .93% .91% .92% .95% .94% .94% .86% .84% .88%(2)
Ratio of net
investment
income to average
net assets... 6.00% 6.84% 8.43% 7.39% 5.44% 3.22% 2.53% 3.68% 5.28% 4.71 4.89%(2)
Decrease reflected
in above expense
ratios due to
undertakings
by The Dreyfus
Corporation.... __ __ __ __ __ __ .02% .04% .01% __ __
Net Assets, end of
period (000's
omitted).... $763,441 $710,810 $915,548 $677,257 $845,690 $688,785 $616,072 $572,116 $654,581 $764,119 $903,313
(1) Effective February 1, 1997, the Fund has changed its fiscal year end from
January 31 to November 30.
(2) Annualized.
</TABLE>
<TABLE>
<CAPTION>
[Page 5]
CALIFORNIA MUNICIPAL FUND
____________________________________________________________________________________________________________
TEN MONTHS
FISCAL YEAR ENDED ENDED
JANUARY 31, NOVEMBER 30,
___________________________________________________________________________________________________________
PER SHARE DATA: 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1997(1)
_____ ______ ______ _____ ____ ____ ____ ____ ____ _____ _______
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of
period...... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
_____ ______ ______ _____ ____ ____ ____ _____ ____ _____ _____
INVESTMENT OPERATIONS:
Investment
income_net...... .045 .053 .058 .052 .036 .024 .023 .031 .029 .029 .010
_____ ______ ______ _____ ____ ____ ____ _____ ____ _____ _____
DISTRIBUTIONS:
Dividends from
investment
income_net..... (.045) (.053) (.058) (.052) (.036) (.024) (.023) (.031) (.029) (.029) (.010)
_____ ______ ______ _____ ____ ____ ____ _____ ____ _____ _____
Net asset value,
end of period.. $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
===== ===== ===== ===== ===== ===== ===== ===== ===== ===== =====
TOTAL INVESTMENT
RETURN.... 4.62% 5.46% 5.93% 5.29% 3.65% 2.46% 2.27% 3.14% 2.94% 2.95%(2) 2.96%(2)
RATIOS / SUPPLEMENTAL
DATA:
Ratio of expenses
to average net
assets.... .50% .76% .07% .02% .20% .33% .33% .52% .65% .64%(2) .70%(2)
Ratio of net
investment income
to average net
assets.... 4.48% 5.29% 5.78% 5.08% 3.59% 2.43% 2.24% 3.07% 2.91% 2.91%(2) 2.97%(2)
Decrease reflected
in above expense
ratios due to
undertakings by
The Dreyfus
Corporation.... .21% __ .65% .59% .41% .30% .28% .11% __ __ __
Net Assets, end of
period (000's
omitted)..... $109,037 $77,372 $281,909 $538,978 $549,383 $608,534 $699,105 $463,404 $390,155 $327,226 $361,102
(1) Effective August 1, 1997, the Fund has changed its fiscal year end from
July 31 to November 30.
(2) Annualized.
</TABLE>
<TABLE>
<CAPTION>
NATIONAL MUNICIPAL FUND
______________________________________________________________________________________________
FISCAL YEAR ENDED
NOVEMBER 30,
______________________________________________________________________________________________
PER SHARE DATA: 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997
_____ _____ _____ _____ _____ _____ _____ _____ _____ _____
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of year......... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
_____ _____ _____ _____ _____ _____ _____ _____ _____ _____
INVESTMENT OPERATIONS:
Investment income_net...... .046 .057 .054 .043 .027 .021 .023 .034 .029 .031
DISTRIBUTIONS:
Dividends from investment
income _ net........... (.046) (.057) (.054) (.043) (.027) (.021) (.023) (.034) (.029) (.031)
_____ _____ _____ _____ _____ _____ _____ _____ _____ _____
Net asset value, end
of year...... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
===== ===== ===== ===== ===== ===== ===== ===== ===== =====
TOTAL INVESTMENT RETURN..... 4.68% 5.89% 5.51% 4.36% 2.74% 2.10% 2.27% 3.41% 2.97% 3.14%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to
average net assets ........ .62% .64% .62% .62% .64% .63% .64% .66% .66% .62%
Ratio of net investment income
to average net asset..... 4.55% 5.74% 5.39% 4.30% 2.71% 2.08% 2.22% 3.35% 2.93% 3.09%
Net Assets, end of year
(000's omitted)......... $394,583 $343,917 $352,320 $342,595 $397,912 $352,147 $294,711 $294,379 $256,862 $273,058
</TABLE>
<TABLE>
<CAPTION>
[Page 6]
NEW YORK MUNICIPAL FUND
______________________________________________________________________________________________
FISCAL YEAR ENDED
NOVEMBER 30,
______________________________________________________________________________________________
PER SHARE DATA: 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997
_____ _____ _____ _____ _____ _____ _____ _____ _____ _____
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of year....... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
_____ _____ _____ _____ _____ _____ _____ _____ _____ _____
INVESTMENT OPERATIONS:
Investment income-net.... .043 .052 .056 .044 .028 .020 .023 .032 .028 .029
_____ _____ _____ _____ _____ _____ _____ _____ _____ _____
DISTRIBUTIONS:
Dividends from investment
income-net................ (.043) (.052) (.056) (.044) (.028) (.020) (.023) (.032) (.028) (.029)
_____ _____ _____ _____ _____ _____ _____ _____ _____ _____
Net asset value, end of
year.... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
===== ===== ===== ===== ===== ===== ===== ===== ===== =====
TOTAL INVESTMENT RETURN....... 4.34% 5.36% 5.76% 4.45% 2.78% 2.00% 2.34% 3.28% 2.84% 2.98%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to
average net assets.......... .50% .75% __ .09% .25% .32% .34% .58% .68% .66%
Ratio of net investment income
to average net assets...... 4.22% 5.97% 5.58% 4.44% 2.99% 1.98% 2.33% 3.23% 2.80% 2.94%
Decrease reflected in above
expense ratios due to undertakings
by The Dreyfus Corporation.. .27% .15% .66% .55% .38% .35% .32% .05% __ __
Net Assets, end of year
(000's omitted)....... $62,140 $49,335 $500,947 $586,933 $630,899 $612,441 $689,918 $636,013 $507,537 $440,750
</TABLE>
YIELD INFORMATION
From time to time, each Fund advertises its yield and effective
yield. Both yield figures are based on historical earnings and are not
intended to indicate future performance. It can be expected that these yields
will fluctuate substantially. A Fund's yield refers to the income generated
by an investment in Fund over a seven-day period (which period will be stated
in the advertisement). This income is then "annualized." That is, the amount
of income generated by the investment during that week is assumed to be
generated each week over a 52-week period and is shown as a percentage of the
investment. The effective yield is calculated similarly, but, when
annualized, the income earned by an investment in the Fund is assumed to be
reinvested. The effective yield will be slightly higher than the yield
because of the compounding effect of this assumed reinvestment. A Fund's
yield and effective yield may reflect absorbed expenses pursuant to any
undertaking that may be in effect. See "Management of the Funds."
As to the California Municipal Fund, the Minnesota Municipal Fund,
the National Municipal Fund and the New York Municipal Fund (collectively,
the "Municipal Funds"), tax equivalent yield is calculated by determining the
pre-tax yield which, after being taxed at a stated rate (in the case of the
California Municipal Fund, the Minnesota Municipal Fund and the New York
Municipal Fund, typically the highest combined Federal and California,
Minnesota or New York State and New York City, respectively, personal income
tax rates), would be equivalent to a stated yield or effective yield
calculated as described above.
Yield information is useful in reviewing a Fund's performance, but
because yields will fluctuate, under certain conditions such information may
not provide a basis for comparison with domestic bank deposits, other
investments which pay a fixed yield for a stated period of time, or other
investment companies which may use a different method of computing yield.
Comparative performance information may be used from time to time in
advertising or marketing Fund shares, including data from Lipper Analytical
Services, Inc., Bank Rate Monitortrademark, N. Palm Beach, Fla. 33408, IBC's
Money Fund Reporttrademark, Morningstar, Inc. and other industry
publications.
[Page 7]
DESCRIPTION OF THE FUNDS
INVESTMENT OBJECTIVE
The investment objective of the Government Money Fund and the Money
Fund is to provide you with as high a level of current income as is
consistent with the preservation of capital and, in the case of the
Government Money Fund, the maintenance of liquidity. The investment objective
of the Municipal Funds is to maximize current income exempt from Federal
income tax to the extent consistent with the preservation of capital and the
maintenance of liquidity and, in the case of the California Municipal Fund,
exempt from State of California income taxes, in the case of the Minnesota
Municipal Fund, exempt from the State of Minnesota income taxes, and, in the
case of the New York Municipal Fund, exempt from New York State and New York
City income taxes. Each Fund's investment objective cannot be changed without
approval by the holders of a majority (as defined in the Investment Company
Act of 1940, as amended (the "1940 Act")) of such Fund's outstanding voting
shares. There can be no assurance that a Fund's investment objective will be
achieved. Each Fund pursues its investment objective in the manner described
below. Securities in which a Fund invests may not earn as high a level of
current income as long-term or lower quality securities which generally have
less liquidity, greater market risk and more fluctuation in market value.
MANAGEMENT POLICIES
Each Fund seeks to maintain a net asset value of $1.00 per share for
purchases and redemptions. To do so, each Fund uses the amortized cost method
of valuing its securities pursuant to Rule 2a-7 under the 1940 Act, which
Rule includes various maturity, quality and diversification requirements,
certain of which are summarized as follows. In accordance with Rule 2a-7,
each Fund is required to maintain a dollar-weighted average portfolio
maturity of 90 days or less, purchase only instruments having remaining
maturities of 13 months or less and invest only in U.S. dollar denominated
securities determined in accordance with procedures established by the Fund's
Board to present minimal credit risks and, in the case of the Money Fund and
each Municipal Fund, which 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
instrument was rated by only one such organization) or, if unrated, are of
comparable quality as determined in accordance with procedures established by
the Fund's Board. The nationally recognized statistical rating organizations
currently rating instruments of the type the Money Fund and each Municipal
Fund may purchase are Moody's Investors Service, Inc. ("Moody's"), Standard &
Poor's Ratings Group ("S&P"), Duff & Phelps Credit Rating Co., Fitch IBCA,
Inc. ("Fitch") and Thomson BankWatch, Inc., and their rating criteria are
described in the "Appendix" to the Statement of Additional Information. This
discussion concerning investment ratings does not apply to the Government
Money Fund because it invests exclusively in U.S. Government securities and
repurchase agreements in respect thereof. For further information regarding
the amortized cost method of valuing securities, see "Determination of Net
Asset Value" in the Statement of Additional Information. There can be no
assurance a Fund will be able to maintain a stable net asset value of $1.00
per share.
Each of the Government Money Fund, the Money Fund and the National
Municipal Fund, is classified as a diversified investment company. Each of
the California Municipal Fund, the Minnesota Municipal Fund and the New York
Municipal Fund is classified as a non-diversified investment company.
Government Money Fund _ The Fund invests in securities issued or guaranteed
as to principal and interest by the U.S. Government or its agencies or
instrumentalities, and repurchase agreements in respect of such securities.
See "Appendix_Certain Portfolio Securities."
[Page 8]
Money Fund _ The Fund invests in short-term money market obligations,
including securities issued or guaranteed by the U.S. Government or its
agencies or instrumentalities, time deposits, certificates of deposit,
bankers' acceptances and other short-term obligations issued by domestic
banks, foreign subsidiaries or foreign branches of domestic banks, domestic
and foreign branches of foreign banks and thrift institutions, repurchase
agreements, asset-backed securities, and high quality domestic and foreign
commercial paper and other short-term corporate obligations, including those
with floating or variable rates of interest. The Fund may invest in U.S.
dollar denominated obligations issued or guaranteed by one or more foreign
governments or any of their political subdivisions, agencies or
instrumentalities, including obligations of supranational entities. See
"Appendix_Certain Portfolio Securities." During normal market conditions, at
least 25% of the value of the Fund's total assets will be invested in bank
obligations. See "Investment Considerations and Risks" below.
National Municipal Fund _ The Fund will invest at least 80% of the value of
its net assets (except when maintaining a temporary defensive position) in
Municipal Obligations. Municipal Obligations are debt obligations issued by
states, territories and possessions of the United States and the District of
Columbia and their political subdivisions, agencies and instrumentalities, or
multistate agencies or authorities, the interest from which is, in the
opinion of bond counsel to the issuer, exempt from Federal income tax.
Municipal Obligations generally include debt obligations issued to obtain
funds for various public purposes as well as certain industrial development
bonds issued by or on behalf of public authorities. Municipal Obligations
bear fixed, floating or variable rates of interest. See "Appendix_Certain
Portfolio Securities."
From time to time, the Fund may invest more than 25% of the value of
its total assets in industrial development bonds which, although issued by
industrial development authorities, may be backed only by the assets and
revenues of the non-governmental users. Interest on Municipal Obligations
(including certain industrial development bonds) which are specified private
activity bonds, as defined in the Internal Revenue Code of 1986, as amended
(the "Code"), issued after August 7, 1986, while exempt from Federal income
tax, is a preference item for the purpose of the alternative minimum tax.
Where a regulated investment company receives such interest, a proportionate
share of any exempt-interest dividend paid by the investment company may be
treated as such a preference item to shareholders. The Fund may invest
without limitation in such Municipal Obligations if The Dreyfus Corporation
determines that their purchase is consistent with the Fund's investment
objective.
From time to time, on a temporary basis other than for temporary
defensive purposes (but not to exceed 20% of the value of the Fund's net
assets) or for temporary defensive purposes, the Fund may invest in taxable
money market instruments ("Taxable Investments") of the quality described
under "Appendix_Certain Portfolio Securities_Taxable Investments."
California Municipal Fund _ The Fund's management policies are identical to
those of the National Municipal Fund, except that, under normal
circumstances, at least 65% of the value of the Fund's net assets will be
invested in debt securities of the State of California, its political
subdivisions, authorities and corporations, the interest from which is, in
the opinion of bond counsel to the issuer, exempt from Federal and State of
California personal income taxes (collectively, "California Municipal
Obligations"). The remainder of the Fund's assets may be invested in
securities that are not California Municipal Obligations and therefore may be
subject to California income taxes. To the extent acceptable California
Municipal Obligations are at any time unavailable for investment by the Fund,
the Fund will invest temporarily in other Municipal Obligations which may be
subject to State of California
[Page 9]
income tax and in Taxable Investments. See "Investment Considerations and
Risks_Investing in California Municipal Obligations" below, "Dividends,
Distributions and Taxes" and "Appendix_Certain Portfolio Securities."
Minnesota Municipal Fund _ The Fund's management policies are identical to
those of the National Municipal Fund, except that, under normal
circumstances, at least 65% of the value of the Fund's net assets will be
invested in debt securities of the State of Minnesota, its political
subdivisions, authorities and corporations, the interest from which is, in
the opinion of bond counsel to the issuer, exempt from Federal and State of
Minnesota personal income taxes (collectively, "Minnesota Municipal
Obligations"). The remainder of the Fund's assets may be invested in
securities that are not Minnesota Municipal Obligations and therefore may be
subject to Minnesota income taxes. To the extent acceptable Minnesota
Municipal Obligations are at any time unavailable for investment by the Fund,
the Fund will invest temporarily in other Municipal Obligations which may be
subject to State of Minnesota income tax and in Taxable Investments. See
"Investment Considerations and Risks_Investing in Minnesota Municipal
Obligations" below, "Dividends, Distributions and Taxes" and
"Appendix_Certain Portfolio Securities."
New York Municipal Fund _ The Fund's management policies are identical to
those of the National Municipal Fund, except that, under normal
circumstances, at least 65% of the value of the Fund's net assets will be
invested in debt securities of the State of New York, its political
subdivisions, authorities and corporations, the interest from which is, in
the opinion of bond counsel to the issuer, exempt from Federal, New York
State and New York City income taxes (collectively, "New York Municipal
Obligations"). The remainder of the Fund's assets may be invested in
securities that are not New York Municipal Obligations and therefore may be
subject to New York State and New York City income taxes. To the extent
acceptable New York Municipal Obligations are at any time unavailable for
investment by the Fund, the Fund will invest temporarily in other Municipal
Obligations which may be subject to New York State and New York City income
taxes and in Taxable Investments. See "Investment Considerations and
Risks_Investing in New York Municipal Obligations" below, "Dividends,
Distributions and Taxes" and "Appendix_Certain Portfolio Securities."
INVESTMENT CONSIDERATIONS AND RISKS
General _ Each Fund attempts to increase yields by trading to take advantage
of short-term market variations. This policy is expected to result in high
portfolio turnover but should not adversely affect a Fund since each Fund
usually does not pay brokerage commissions when it purchases short-term debt
obligations, including U.S. Government securities. The value of the portfolio
securities held by each Fund will vary inversely to changes in prevailing
interest rates. Thus, if interest rates have increased from the time a
security was purchased, such security, if sold, might be sold at a price less
than its cost. Similarly, if interest rates have declined from the time a
security was purchased, such security, if sold, might be sold at a price
greater than its purchase cost. In either instance, if the security was
purchased at face value and held to maturity, no gain or loss would be
realized.
Bank Securities (Money Fund Only) _ To the extent the Fund's investments are
concentrated in the banking industry, the Fund will have correspondingly
greater exposure to the risk factors which are characteristic of such
investments. Sustained increases in interest rates can adversely affect the
availability or liquidity and cost of capital funds for a bank's lending
activities, and a deterioration in general economic conditions could increase
the exposure to credit losses. In addition, the value of and the investment
return on the Fund's shares could be affected by economic or regulatory
developments
[Page 10]
in or related to the banking industry, which industry also is subject
to the effects of competition within the banking industry as well as with
other types of financial institutions. The Fund, however, will seek to
minimize its exposure to such risks by investing only in debt securities
which are determined to be of high quality.
Foreign Securities (Money Fund Only) _ Since the Fund's portfolio may contain
securities issued by foreign governments, or any of their political
subdivisions, agencies or instrumentalities, and by foreign subsidiaries and
foreign branches of domestic banks, domestic and foreign branches of foreign
banks, and commercial paper issued by foreign issuers, the Fund may be
subject to additional investment risks with respect to those securities that
are different in some respects from those incurred by a fund which invests
only in debt obligations of U.S. domestic issuers, although such obligations
may be higher yielding when compared to the securities of U.S. domestic
issuers. Such risks include possible future political and economic
developments, seizure or nationalization of foreign deposits, imposition of
foreign withholding taxes on interest income payable on the securities,
establishment of exchange controls or adoption of other foreign governmental
restrictions which might adversely affect the payment of principal and
interest on these securities.
Investing in Municipal Obligations (Municipal Funds) _ Each of the Municipal
Funds may invest more than 25% of the value of its total assets in Municipal
Obligations which are related in such a way that an economic, business or
political development or change affecting one such security also would affect
the other securities; for example, securities the interest upon which is paid
from revenues of similar types of projects. As a result, each of these Funds
may be subject to greater risk as compared to a fund that does not follow
this practice.
Certain municipal lease/purchase obligations in which each of the
Municipal Funds may invest may contain "non-appropriation" clauses which
provide that the municipality has no obligation to make lease payments in
future years unless money is appropriated for such purpose on a yearly basis.
Although "non-appropriation" lease/purchase obligations are secured by the
leased property, disposition of the leased property in the event of
foreclosure might prove difficult. In evaluating the credit quality of a
municipal lease/purchase obligation that is unrated, The Dreyfus Corporation
will consider, on an ongoing basis, a number of factors including the
likelihood that the issuing municipality will discontinue appropriating
funding for the leased property.
Certain provisions in the Code relating to the issuance of Municipal
Obligations may reduce the volume of Municipal Obligations qualifying for
Federal tax exemption. One effect of these provisions could be to increase
the cost of the Municipal Obligations available for purchase by the Fund and
thus reduce available yield. Shareholders should consult their tax advisers
concerning the effect of these provisions on an investment in any of the
Municipal Funds. Proposals that may restrict or eliminate the income tax
exemption for interest on Municipal Obligations may be introduced in the
future. If any such proposal were enacted that would reduce the availability
of Municipal Obligations for investment by the Municipal Funds so as to
adversely affect Fund shareholders, each Municipal Fund would reevaluate its
investment objective and policies and submit possible changes in the Fund's
structure to shareholders for their consideration. If legislation were
enacted that would treat a type of Municipal Obligation as taxable, the
Municipal Funds would treat such security as a permissible Taxable Investment
within the applicable limits set forth herein.
Investing in California Municipal Obligations (California Municipal Fund
Only) _ Since the California Municipal Fund is concentrated in securities
issued by California or entities within
[Page 11]
California, an investment in the Fund may involve greater risk than
investments in certain other types of money market funds. You should consider
carefully the special risks inherent in investing principally in California
Municipal Obligations. These risks result from certain amendments to the
California Constitution and other statutes 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. You should obtain and
review a copy of the Statement of Additional Information which more fully
sets forth these and other risk factors.
Investing in Minnesota Municipal Obligations (Minnesota Municipal Fund Only) _
Since the Minnesota Municipal Fund is concentrated in securities issued by
Minnesota or entities within Minnesota, an investment in the Fund may involve
greater risk than investments in certain other types of money market funds.
You should consider carefully the special risks inherent in investing
principally in Minnesota Municipal Obligations. These risks result from the
financial condition of the State of Minnesota and its municipalities. The
structure of Minnesota's economy parallels the structure of the United
States' economy as a whole when viewed at a highly aggregated level of
detail. Diversity and a significant natural resource base are two important
characteristics of the State's economy. However, the State of Minnesota
experienced financial difficulties in the early 1980s because of a downturn
in the State's economy resulting from the national recession. More recently,
real growth has been equal to or greater than national growth. There can be
no assurance that the financial problems referred to or similar future
problems will not affect the market value or marketability of Minnesota
Municipal Obligations or the ability of the issuer thereof to pay interest or
principal thereon. You should obtain and review a copy of the Statement of
Additional Information which more fully sets forth these and other risk
factors.
Investing in New York Municipal Obligations (New York Municipal Fund Only) _
Since the New York Municipal Fund is concentrated in securities issued by New
York or entities within New York, an investment in the Fund may involve
greater risk than investments in certain other types of money market funds.
You should consider carefully the special risks inherent in investing
principally in New York Municipal Obligations. 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
[Page 12]
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. You should obtain and review a copy of the Statement of
Additional Information which more fully sets forth these and other risk
factors.
Non-Diversified Status (California Municipal Fund, Minnesota Municipal Fund
and New York Municipal Fund) _ The classification of each of these Funds as a
"non-diversified" investment company means that the proportion of the Fund's
assets that may be invested in the securities of a single issuer is not
limited by the 1940 Act. A "diversified" investment company is required by
the 1940 Act generally, with respect to 75% of its total assets, to invest
not more than 5% of such assets in the securities of a single issuer. Since a
relatively high percentage of each of these Funds' assets may be invested in
the obligations of a limited number of issuers, the Fund's portfolio may be
more sensitive to changes in the market value of a single issuer. However, to
meet Federal tax requirements, at the close of each quarter each Fund may not
have more than 25% of its total assets invested in any one issuer and, with
respect to 50% of total assets, not more than 5% of its total assets invested
in any one issuer. These limitations do not apply to U.S. Government
securities.
Simultaneous Investments _ Investment decisions for each Fund are made
independently from those of other investment companies advised by The Dreyfus
Corporation. If, however, such other investment companies desire to invest
in, or dispose of, the same securities as a Fund, available investments or
opportunities for sales will be allocated equitably to each investment
company. In some cases, this procedure may adversely affect the size of the
position obtained for or disposed of by the Fund or the price paid or
received by the Fund.
Year 2000 Risks _ Like other mutual funds, financial and business
organizations and individuals around the world, each Fund could be adversely
affected if the computer systems used by The Dreyfus Corporation and the
Fund's other service providers do not properly process and calculate
date-related information and data from and after January 1, 2000. This is
commonly known as the "Year 2000 Problem." The Dreyfus Corporation is taking
steps to address the Year 2000 Problem with respect to the computer systems
that it uses and to obtain assurances that comparable steps are being taken
by the Funds' other major service providers. At this time, however, there can
be no assurance that these steps will be sufficient to avoid any adverse
impact on a Fund.
MANAGEMENT OF THE FUNDS
Investment Adviser _ The Dreyfus Corporation, located at 200 Park Avenue, New
York, New York 10166, was formed in 1947 and serves as each Fund's investment
adviser. The Dreyfus Corporation is a
[Page 13]
wholly-owned subsidiary of Mellon Bank, N.A., which is a wholly-owned
subsidiary of Mellon Bank Corporation ("Mellon"). As of March 31, 1998, The
Dreyfus Corporation managed or administered approximately $100 billion in
assets for approximately 1.7 million investor accounts nationwide.
The Dreyfus Corporation supervises and assists in the overall
management of each Fund's affairs under separate Management Agreements
related to each Fund, subject to the authority of the Board in accordance
with applicable law.
Mellon is a publicly owned multibank holding company incorporated
under Pennsylvania law in 1971 and registered under the Federal Bank Holding
Company Act of 1956, as amended. Mellon provides a comprehensive range of
financial products and services in domestic and selected international
markets. Mellon is among the twenty-five largest bank holding companies in
the United States based on total assets. Mellon's principal wholly-owned
subsidiaries are Mellon Bank, N.A., Mellon Bank (DE) National Association,
Mellon Bank (MD), The Boston Company, Inc., AFCO Credit Corporation and a
number of companies known as Mellon Financial Services Corporations. Through
its subsidiaries, including The Dreyfus Corporation, Mellon managed more than
$305 billion in assets as of December 31, 1997, including approximately $104
billion in proprietary mutual fund assets. As of December 31, 1997, Mellon,
through various subsidiaries, provided non-investment services, such as
custodial or administration services, for more than $1.532 trillion in
assets, including approximately $60 billion in mutual fund assets.
For the fiscal year ended November 30, 1997, each Fund (except the
Minnesota Municipal Fund, which has not completed its first fiscal year) paid
The Dreyfus Corporation a monthly management fee at the effective annual rate
of .50 of 1% of the value of the Fund's average daily net assets. From time
to time, The Dreyfus Corporation may waive receipt of its fees and/or
voluntarily assume certain expenses of a Fund, which would have the effect of
lowering the expense ratio of such Fund and increasing yield to investors. No
Fund will pay The Dreyfus Corporation at a later time for any amounts it may
waive, nor will a Fund reimburse The Dreyfus Corporation for any amounts it
may assume.
In allocating brokerage transactions, The Dreyfus Corporation seeks
to obtain the best execution of orders at the most favorable net price.
Subject to this determination, The Dreyfus Corporation may consider, among
other things, the receipt of research services and/or the sale of shares of a
Fund or other funds managed, advised or administered by The Dreyfus
Corporation as factors in the selection of broker-dealers to execute
portfolio transactions for each Fund. See "Portfolio Transactions" in the
Statement of Additional Information.
Expenses _ All expenses incurred in the operation of a Fund are borne by the
Fund, except to the extent specifically assumed by The Dreyfus Corporation.
The expenses borne by a Fund include: organizational costs, taxes, interest,
brokerage fees and commissions, if any, fees of Board members who are not
officers, directors, employees or holders of 5% of more of the outstanding
voting securities of The Dreyfus Corporation or any of its affiliates,
Securities and Exchange Commission fees, state Blue Sky qualification fees,
advisory fees, charges of registrars and custodians, transfer and dividend
disbursing agents' fees, outside auditing and legal expenses, costs of
maintaining the Fund's existence, costs attributable to investor services,
costs of preparing and printing prospectuses and statements of additional
information for regulatory purposes and for distribution to existing
shareholders, costs of shareholders' reports and meetings, and any
extraordinary expenses. See "General Information."
The Dreyfus Corporation may pay the Funds' distributor for
shareholder services from The Dreyfus Corporation's own assets, including
past profits but not including the management fee paid by the
[Page 14]
Funds. The Funds' distributor may use part or all of such payments to pay
Service Agents in respect of these services.
Distributor _ Each Fund's distributor is Premier Mutual Fund Services, Inc.
(the "Distributor"), located at 60 State Street, Boston, Massachusetts 02109.
The Distributor's ultimate parent is Boston Institutional Group, Inc.
Transfer and Dividend Disbursing Agent and Custodian _ Dreyfus Transfer,
Inc., a wholly-owned subsidiary of The Dreyfus Corporation, P.O. Box 9671,
Providence, Rhode Island 02940-9671, is each Fund's Transfer and Dividend
Disbursing Agent (the "Transfer Agent"). The Bank of New York, 90 Washington
Street, New York, New York 10286, is each Fund's Custodian.
HOW TO BUY SHARES
Each Fund's shares may be purchased only by clients of certain
financial institutions (which may include banks), securities dealers
("Selected Dealers"), and other industry professionals such as investment
advisers, accountants and estate planning firms (collectively, "Service
Agents") that have entered into service agreements with the Distributor. For
shareholders who purchase Fund shares from the Distributor, the Distributor
will act as Service Agent. Stock certificates are issued only upon your
written request. No certificates are issued for fractional shares. It is not
recommended that the Municipal Funds be used as a vehicle for Keogh, IRA or
other qualified plans. Each Fund reserves the right to reject any purchase
order.
The minimum initial investment in each Fund is $2,500, or $1,000 if
you are a client of a Service Agent which maintains an omnibus account in the
relevant Fund and has made an aggregate minimum initial purchase in the Fund
for its customers of $2,500. Subsequent investments must be at least $100.
For the Government Money Fund and the Money Fund, however, the minimum
initial investment is $750 for Dreyfus-sponsored Keogh Plans, IRAs (including
regular IRAs, spousal IRAs for a non-working spouse, Roth IRAs, SEP-IRAs and
rollover IRAs) and 403(b)(7) Plans with only one participant and $500 for
Dreyfus-sponsored Education IRAs, with no minimum for subsequent purchases.
The initial investment must be accompanied by the Account Application. For
full-time or part-time employees of The Dreyfus Corporation or any of its
affiliates or subsidiaries, directors of The Dreyfus Corporation, Board
members of a fund advised by The Dreyfus Corporation, including members of
each Fund's Board, or the spouse or minor child of any of the foregoing, the
minimum initial investment is $1,000. For full-time or part-time employees of
The Dreyfus Corporation or any of its affiliates or subsidiaries who elect to
have a portion of their pay directly deposited into their Fund accounts, the
minimum initial investment is $50. The Government Money Fund and the Money
Fund reserve the right to offer Fund shares without regard to minimum
purchase requirements to employees participating in certain qualified and
non-qualified employee benefit plans or other programs where contributions or
account information can be transmitted in a manner and form acceptable to
such Fund. Each Fund reserves the right to vary further the initial and
subsequent investment minimum requirements at any time.
You may purchase Fund shares by check or wire. Checks should be made
payable to "The Dreyfus Family of Funds" or, if for Dreyfus retirement plan
accounts with respect to the Government Money Fund and the Money Fund, to
"The Dreyfus Trust Company, Custodian." Payments to open new accounts which
are mailed should be sent to The Dreyfus Family of Funds, P.O. Box 9387,
Providence, Rhode Island 02940-9387, together with your Account Application
indicating that Class A shares are being purchased. For subsequent
investments, your Fund account number should appear on the check and an
investment slip should be enclosed and sent to The Dreyfus Family of Funds,
P.O. Box 105,
[Page 15]
Newark, New Jersey 07101-0105. For Dreyfus retirement plan accounts, both
initial and subsequent investments should be sent to The Dreyfus Trust
Company, Custodian, P.O. Box 6427, Providence, Rhode Island 02940-6427.
Neither initial nor subsequent investments should be made by third party
check. Purchase orders may be delivered in person only to a Dreyfus Financial
Center. These orders will be forwarded to the relevant Fund and will be
processed only upon receipt thereby. For the location of the nearest Dreyfus
Financial Center, please call one of the telephone numbers listed under
"General Information." Other purchase procedures may be in effect for clients
of certain Service Agents.
Wire payments may be made if your bank account is in a commercial
bank that is a member of the Federal Reserve System or any other bank having
a correspondent bank in New York City. Immediately available funds may be
transmitted by wire to The Bank of New York together with the applicable
Fund's DDA# as shown below, for purchase of Fund shares in your name:
DDA # 8900052414/General Government Securities Money Market Fund, Inc.
DDA # 8900051957/General Money Market Fund, Inc.
DDA # 8900052163/General California Municipal Money Market Fund
DDA # 8900337451/General Minnesota Municipal Money Market Fund
DDA # 8900052376/General Municipal Money Market Fund
DDA # 8900052171/General New York Municipal Money Market Fund
The wire must include your Fund account number (for new accounts, your
Taxpayer Identification Number ("TIN") should be included instead), account
registration and dealer number, if applicable, and must indicate the Class of
shares being purchased. If your initial purchase of Fund shares is by wire,
please call 1-800-645-6561 after completing your wire payment to obtain your
Fund account number. Please include your Fund account number on the Account
Application and promptly mail the Account Application to the Fund, as no
redemptions will be permitted until the Account Application is received. You
may obtain further information about remitting funds in this manner from your
bank. All payments should be made in U.S. dollars and, to avoid fees and
delays, should be drawn only on U.S. banks. A charge will be imposed if any
check used for investment in your account does not clear. Each Fund makes
available to certain large institutions the ability to issue purchase
instructions through compatible computer facilities.
Fund shares also may be purchased through Dreyfus-AUTOMATIC Asset
BuilderRegistration Mark, the Government Direct Deposit Privilege or the
Payroll Savings Plan described under "Shareholder Services." These services
enable you to make regularly scheduled investments and may provide you with a
convenient way to invest for long-term financial goals. You should be aware,
however, that periodic investment plans do not guarantee a profit and will
not protect an investor against loss in a declining market.
Subsequent investments also may be made by electronic transfer of
funds from an account maintained in a bank or other domestic financial
institution that is an Automated Clearing House member. You must direct the
institution to transmit immediately available funds through the Automated
Clearing House to The Bank of New York with instructions to credit your Fund
account. The instructions must specify your Fund account registration and
your Fund account number preceded by the digits "1111."
Service Agents may receive different levels of compensation for
selling different Classes of shares. Management understands that some Service
Agents may impose certain conditions on their clients which are different
from those described in this Prospectus and, to the extent permitted by
applicable regulatory authority, may charge their clients direct fees. You
should consult your Service Agent in this regard.
[Page 16]
Fund shares are sold on a continuous basis at the net asset value per
share next determined after an order in proper form and Federal Funds (monies
of member banks within the Federal Reserve System which are held on deposit
at a Federal Reserve Bank) are received by the Transfer Agent or other entity
authorized to receive orders on behalf of the Fund in written or telegraphic
form. If you do not remit Federal Funds, your payment must be converted into
Federal Funds. This usually occurs within one business day of receipt of a
bank wire and within two business days of receipt of a check drawn on a
member bank of the Federal Reserve System. Checks drawn on banks which are
not members of the Federal Reserve System may take considerably longer to
convert into Federal Funds. Prior to receipt of Federal Funds, your money
will not be invested.
Net asset value per share of each Class is computed by dividing the
value of the Fund's net assets represented by such Class (i.e., the value of
its assets less liabilities) by the total number of shares of such Class
outstanding. See "Determination of Net Asset Value" in the Statement of
Additional Information.
Federal regulations require that you provide a certified TIN upon
opening or reopening an account. See "Dividends, Distributions and Taxes" and
the Account Application for further information concerning this requirement.
Failure to furnish a certified TIN to a Fund could subject you to a $50
penalty imposed by the Internal Revenue Service (the "IRS").
Government Money Fund and Money Fund _ Each of these Funds determines its net
asset value per share twice each day the New York Stock Exchange or the
Transfer Agent is open for business: as of 5:00 p.m., New York time, and as
of 8:00 p.m., New York time.
If your payments are received in or converted into Federal Funds by
12:00 Noon, New York time, by the Transfer Agent on a business day, you will
receive the dividend declared that day. If your payments are received in or
converted into Federal Funds after 12:00 Noon, New York time, by the Transfer
Agent, you will begin to accrue dividends on the following business day.
Qualified institutions may telephone orders for purchase of Fund
shares of each of these Funds. A telephone order placed with the Distributor
or its designee in New York will become effective at the price determined at
5:00 p.m., New York time, and the shares purchased will receive the dividend
on Fund shares declared on that day, if such order is placed with the
Distributor or its designee in New York by 5:00 p.m., New York time, and
Federal Funds are received by 6:00 p.m., New York time, on that day. A
telephone order placed with the Distributor or its designee in New York after
5:00 p.m., New York time, but by 8:00 p.m., New York time, on a given day
will become effective at the price determined at 8:00 p.m., New York time, on
that day, and the shares purchased will begin to accrue dividends on the next
business day, if Federal Funds are received by 11:00 a.m., New York time, on
the next business day.
The Distributor may pay dealers a fee of up to .5% of the amount
invested through such dealers in each Fund's shares by employees
participating in qualified or non-qualified employee benefit plans or other
programs where (i) the employers or affiliated employers maintaining such
plans or programs have a minimum of 250 employees eligible for participation
in such plans or programs, or (ii) such plan's or program's aggregate
investment in the Dreyfus Family of Funds or certain other products made
available by the Distributor to such plans or programs exceeds $1,000,000
("Eligible Benefit Plans"). Shares of funds in the Dreyfus Family of Funds
then held by Eligible Benefit Plans will be aggregated to determine the fee
payable. The Distributor reserves the right to cease paying these fees at any
time. The Distributor will pay such fees from its own funds, other than
amounts received from the Fund, including past profits or any other source
available to it.
[Page 17]
Municipal Funds _ Each Municipal Fund determines its net asset value per
share twice each day the New York Stock Exchange or the Transfer Agent is
open for business: as of 12:00 Noon, New York time, and as of 8:00 p.m., New
York time.
If your payments are received in or converted into Federal Funds by
12:00 Noon, New York time, on a business day, you will receive the dividend
declared that day. If your payments are received in or converted into Federal
Funds after 12:00 Noon, New York time, you will begin to accrue dividends on
the following business day.
Qualified institutions may telephone orders for purchase of shares of
each of these Funds. A telephone order placed with the Distributor or its
designee in New York will become effective at the price determined at 12:00
Noon, New York time, on a given day, and the shares purchased will receive
the dividend on Fund shares declared on that day, if the telephone order is
placed with the Distributor or its designee by 12:00 Noon, New York time, and
Federal Funds are received by 4:00 p.m., New York time, on that day. A
telephone order placed with the Distributor or its designee after 12:00 Noon,
New York time, but by 8:00 p.m., New York time, on a given day will become
effective at the price determined at 8:00 p.m., New York time, on that day,
and the shares purchased will begin to accrue dividends on the next business
day, if Federal Funds are received by 11:00 a.m., New York time, on the next
business day.
TeleTransfer Privilege (California Municipal Fund, Minnesota Municipal Fund
and New York Municipal Fund Only) _ You may purchase shares (minimum $500,
maximum $150,000 per day) by telephone if you have checked the appropriate
box and supplied the necessary information on the Account Application or have
filed a Shareholder Services Form with the Transfer Agent. The proceeds will
be transferred between the bank account designated in one of these documents
and your Fund account. Only a bank account maintained in a domestic financial
institution which is an Automated Clearing House member may be so designated.
Each of these Funds may modify or terminate this Privilege at any time or
charge a service fee upon notice to shareholders. No such fee currently is
contemplated.
If you have selected the TeleTransfer Privilege, you may request a
TeleTransfer purchase of shares by calling 1-800-645-6561 or, if you are
calling from overseas, call 516-794-5452.
SHAREHOLDER SERVICES
The services and privileges described under this heading may not be
available to clients of certain Service Agents and some Service Agents may
impose certain conditions on their clients which are different from those
described in this Prospectus. You should consult your Service Agent in this
regard. In addition, use of the privileges noted below may require that the
proper forms and information be filed with and processed by the Transfer
Agent.
Fund Exchanges _ Clients of certain Service Agents may purchase, in exchange
for shares of a Fund, shares of certain other funds managed or administered
by The Dreyfus Corporation, to the extent such shares are offered for sale in
the client's state of residence. These funds have different investment
objectives which may be of interest to you. If you desire to use this
service, you should consult your Service Agent or call 1-800-645-6561 to
determine if it is available and whether any conditions are imposed on its
use.
To request an exchange, you or your Service Agent acting on your
behalf must give exchange instructions to the Transfer Agent in writing or by
telephone. Before any exchange, you must obtain and should review a copy of
the current prospectus of the fund into which the exchange is being made.
[Page 18]
Prospectuses may be obtained by calling 1-800-645-6561. Except in the case of
personal retirement plans, the shares being exchanged must have a current
value of at least $500; furthermore, when establishing a new account by
exchange, the shares 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 ability to issue exchange instructions by telephone is given
to shareholders of each Fund automatically, unless you check the applicable
"No" box on the Account Application, indicating that you specifically refuse
this Privilege. The Telephone Exchange Privilege may be established for an
existing account by written request signed by all shareholders on the
account, by a separate signed Shareholder Services Form, available by calling
1-800-645-6561, or by oral request from any of the authorized signatories on
the account by calling 1-800-645-6561. If you have established the Telephone
Exchange Privilege, you may telephone exchange instructions (including over
The Dreyfus TouchRegistration Mark automated telephone system) by calling
1-800-645-6561. If you are calling from overseas, call 516-794-5452. See "How
to Redeem Shares_Procedures." Upon an exchange into a new account, the
following shareholder services and privileges, as applicable and where
available, will be automatically carried over to the fund into which the
exchange is made: Telephone Exchange Privilege, Check Redemption Privilege,
Wire Redemption Privilege, Telephone Redemption Privilege, TeleTransfer
Privilege, and the dividend/capital gain distribution option (except for
Dividend Sweep) selected by the investor.
Shares will be exchanged at the next determined net asset value;
however, a sales load may be charged with respect to exchanges into funds
sold with a sales load. If you are exchanging into a fund that charges a
sales load, you may qualify for share prices which do not include the sales
load or which reflect a reduced sales load, if the shares you are exchanging
were: (a) purchased with a sales load, (b) acquired by a previous exchange
from shares purchased with a sales load, or (c) acquired through reinvestment
of dividends or distributions paid with respect to the foregoing categories
of shares. To qualify, at the time of the exchange you must notify the
Transfer Agent or your Service Agent must notify the Distributor. Any such
qualification is subject to confirmation of your holdings through a check of
appropriate records. See "Shareholder Services" in the Statement of
Additional Information. No fees currently are charged shareholders directly
in connection with exchanges, although each Fund reserves the right, upon not
less than 60 days' written notice, to charge shareholders a nominal
administrative fee in accordance with rules promulgated by the Securities and
Exchange Commission. Each Fund reserves the right to reject any exchange
request in whole or in part. The availability of Fund Exchanges may be
modified or terminated at any time upon notice to shareholders. See
"Dividends, Distributions and Taxes."
Dreyfus Auto-Exchange Privilege _ Dreyfus Auto-Exchange Privilege enables you
to invest regularly (on a semi-monthly, monthly, quarterly or annual basis),
in exchange for shares of a Fund, in shares of certain other funds in the
Dreyfus Family of Funds of which you are a shareholder. The amount you
designate, which can be expressed either in terms of a specific dollar or
share amount ($100 minimum), will be exchanged automatically on the first
and/or fifteenth of the month according to the schedule you have selected.
Shares will be exchanged at the then-current net asset value; however, a
sales load may be charged with respect to exchanges into funds sold with a
sales load. See "Shareholder Services" in the Statement of Additional
Information. The right to exercise this Privilege may be modified or canceled
by the Fund or the Transfer Agent. You may modify or cancel your exercise of
this Privilege at any time by mailing written notification to The Dreyfus
Family of Funds, P.O. Box 9671, Providence, Rhode Island 02940-9671. Each
Fund may charge a service fee for the use of this Privilege. No such fee
currently is contemplated. For more information concerning this Privilege and
the funds in the Dreyfus
[Page 19]
Family of Funds eligible to participate in this Privilege, or to obtain an
Auto-Exchange Authorization Form, please call toll free 1-800-645-6561. See
"Dividends, Distributions and Taxes."
DREYFUS-AUTOMATIC ASSET BUILDERRegistration Mark _ Dreyfus-AUTOMATIC Asset
Builder permits you to purchase Fund shares (minimum of $100 and maximum of
$150,000 per transaction) at regular intervals selected by you. Fund shares
are purchased by transferring funds from the bank account designated by you.
Only an account maintained at a domestic financial institution which is an
Automated Clearing House member may be so designated. To establish a
Dreyfus-AUTOMATIC Asset Builder account, you must file an authorization form
with the Transfer Agent. You may obtain the necessary authorization form from
your Service Agent or by calling 1-800-645-6561. You may cancel your
participation in this Privilege or change the amount of your purchase at any
time by mailing written notification to The Dreyfus Family of Funds, P.O. Box
9671, Providence, Rhode Island 02940-9671, or, if for Dreyfus retirement plan
accounts, to The Dreyfus Trust Company, Custodian, P.O. Box 6427, Providence,
Rhode Island 02940-6427, and the notification will be effective three
business days following receipt. Each Fund may modify or terminate this
Privilege at any time or charge a service fee. No such fee currently is
contemplated.
Government Direct Deposit Privilege _ The Government Direct Deposit Privilege
enables you to purchase Fund shares (minimum of $100 and maximum of $50,000
per transaction) by having Federal salary, Social Security, or certain
veterans', military or other payments from the Federal government,
automatically deposited into your Fund account. You may deposit as much of
such payments as you elect. To enroll in Government Direct Deposit, you must
file with the Transfer Agent a completed Direct Deposit Sign-Up Form for each
type of payment that you desire to include in this Privilege. The appropriate
form may be obtained from your Service Agent or by calling 1-800-645-6561.
Death or legal incapacity will terminate your participation in this
Privilege. You may elect at any time to terminate your participation by
notifying in writing the appropriate Federal agency. Further, a Fund may
terminate your participation upon 30 days' notice to you.
Payroll Savings Plan _ The Payroll Savings Plan permits you to purchase Fund
shares (minimum of $100 per transaction) automatically on a regular basis.
Depending upon your employer's direct deposit program, you may have part or
all of your paycheck transferred to your existing Dreyfus account
electronically through the Automated Clearing House system at each pay
period. To establish a Payroll Savings Plan account, you must file an
authorization form with your employer's payroll department. Your employer
must complete the reverse side of the form and return it to The Dreyfus
Family of Funds, P.O. Box 9671, Providence, Rhode Island 02940-9671. You may
obtain the necessary authorization form by calling 1-800-645-6561. You may
change the amount of purchase or cancel the authorization only by written
notification to your employer. It is the sole responsibility of your
employer, not the Distributor, The Dreyfus Corporation, the Fund, the
Transfer Agent or any other person, to arrange for transactions under the
Payroll Savings Plan. Each Fund may modify or terminate this Privilege at any
time or charge a service fee. No such fee currently is contemplated.
Dividend Options _ Dividend Sweep enables you to invest automatically
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 you are a
shareholder. Shares of the other fund will be purchased at the then-current
net asset value; however, a sales load may be charged with respect to
investments in shares of a fund sold with a sales load. If you are investing
in a fund that charges a sales load, you may qualify for share prices which
do not include the sales load or which reflect a reduced sales load. If you
are investing in a
[Page 20]
fund that charges a contingent deferred sales charge, the shares purchased
will be subject to the contingent deferred sales charge, if any, applicable
to the purchased shares. See "Shareholder Services" in the Statement of
Additional Information. Dividend ACH permits you to transfer electronically
dividends or dividends and capital gain distributions, if any, from a Fund to
a designated bank account. Only an account maintained at a domestic financial
institution which is an Automated Clearing House member may be so designated.
Banks may charge a fee for this service.
For more information concerning these privileges or to request a
Dividend Options Form, please call toll free 1-800-645-6561. You may cancel
these privileges by mailing written notification to The Dreyfus Family of
Funds, P.O. Box 9671, Providence, Rhode Island 02940-9671. To select a new
fund after cancellation, you must submit a new Dividend Options Form.
Enrollment in or cancellation of these privileges is effective three business
days following receipt. These privileges are available only for existing
accounts and may not be used to open new accounts. Minimum subsequent
investments do not apply for Dividend Sweep. Each Fund may modify or
terminate these privileges at any time or charge a service fee. No such fee
currently is contemplated. Shares held under Keogh Plans or IRAs are not
eligible for Dividend Sweep.
Quarterly Distribution Plan _ The Quarterly Distribution Plan permits you to
receive quarterly payments from a Fund consisting of proceeds from the
redemption of shares purchased for your account through the automatic
reinvestment of dividends declared on your account during the preceding
calendar quarter. You may open a Quarterly Distribution Plan by submitting a
request to the Transfer Agent. The Quarterly Distribution Plan may be ended
at any time by you, the Fund or the Transfer Agent. Shares for which
certificates have been issued must be presented before redemption under the
Quarterly Distribution Plan.
Automatic Withdrawal Plan _ The Automatic Withdrawal Plan permits you to
request withdrawal of a specified dollar amount (minimum of $50) on either a
monthly or quarterly basis if you have a $5,000 minimum account. An Automatic
Withdrawal Plan may be established by filing an Automatic Withdrawal Plan
application with the Transfer Agent or by oral request from any of the
authorized signatories on the account by calling 1-800-645-6561. The
Automatic Withdrawal Plan may be ended at any time by you, the Fund or the
Transfer Agent. Shares for which certificates have been issued may not be
redeemed through the Automatic Withdrawal Plan.
Retirement Plans (Government Money Fund and Money Fund Only) _ Each of these
Funds offers a variety of 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. You 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 (except SEP-IRAs), please call 1-800-645-6561; or for SEP-IRAs, 401(k)
Salary Reduction Plans and 403(b)(7) Plans, please call 1-800-322-7880.
HOW TO REDEEM SHARES
GENERAL
You may request redemption of your shares at any time. Redemption
requests should be transmitted to the Transfer Agent as described below. When
a request is received in proper form by the Transfer Agent or other entity
authorized to receive orders on behalf of the Fund, your Fund will redeem the
shares at the next determined net asset value.
[Page 21]
None of the Funds imposes a charge when shares are redeemed. Service
Agents may charge their clients a fee for effecting redemptions of Fund
shares. Any certificates representing Fund shares being redeemed must be
submitted with the redemption request. The value of the shares redeemed may
be more or less than their original cost, depending upon the respective
Fund's then-current net asset value.
Each Fund ordinarily will make payment for all shares redeemed within
seven days after receipt by the Transfer Agent of a redemption request in
proper form, except as provided by the rules of the Securities and Exchange
Commission. However, if you have purchased Fund shares by check, by
TeleTransfer Privilege or through Dreyfus-AUTOMATIC Asset BuilderRegistration
Mark and subsequently submit a written redemption request to the Transfer
Agent, your redemption will be effective and the redemption proceeds will be
transmitted to you promptly upon bank clearance of your purchase check,
TeleTransfer purchase or Dreyfus-AUTOMATIC Asset Builder order, which may
take up to eight business days or more. In addition, each Fund will not honor
Redemption Checks under the Check Redemption Privilege, and will reject
requests to redeem shares by wire or telephone or pursuant to the TeleTransfer
Privilege, for a period of eight business days after receipt by the Transfer
Agent of the purchase check, the TeleTransfer purchase or the
Dreyfus-AUTOMATIC Asset Builder order against which such redemption is
requested. These procedures will not apply if your shares were purchased by
wire payment, or if you otherwise have a sufficient collected balance in your
account to cover the redemption request. Prior to the time any redemption is
effective, dividends on such shares will accrue and be payable, and you will
be entitled to exercise all other rights of beneficial ownership. Fund shares
will not be redeemed until the Transfer Agent has received your Account
Application.
Each Fund reserves the right to redeem your account at its option
upon not less than 45 days' written notice if your account's net asset value
is $500 or less and remains so during the notice period.
PROCEDURES
You may redeem Fund shares by using the regular redemption procedure
through the Transfer Agent, or through the Check Redemption Privilege or
Telephone Redemption Privilege, which are granted automatically unless you
specifically refuse them by checking the applicable "No" box on the Account
Application. The Check Redemption Privilege and Telephone Redemption
Privilege may be established for an existing account by a separate signed
Shareholder Services Form, or, with respect to the Telephone Redemption
Privilege, by oral request from any of the authorized signatories on the
account by calling 1-800-645-6561. You also may redeem shares through the
Wire Redemption Privilege or, with respect to the California Municipal Fund,
the Minnesota Municipal Fund and the New York Municipal Fund, the
TeleTransfer Privilege, if you have checked the appropriate box and supplied
the necessary information on the Account Application or have filed a
Shareholder Services Form with the Transfer Agent. If you are a client of a
Selected Dealer, you may redeem Fund shares through the Selected Dealer.
Other redemption procedures may be in effect for clients of certain Service
Agents. Each Fund makes available to certain large institutions the ability
to issue redemption instructions through compatible computer facilities. Each
Fund reserves the right to refuse any request made by wire or telephone,
including requests made shortly after a change of address, and may limit the
amount involved or the number of such requests. Each Fund may modify or
terminate any redemption privilege at any time or charge a service fee upon
notice to shareholders. No such fee currently is contemplated. Shares held
under Keogh Plans, IRAs or other retirement plans, and shares for which
certificates
[Page 22]
have been issued, are not eligible for the Check Redemption, Wire
Redemption, Telephone Redemption or TeleTransfer Privilege.
The Telephone Redemption Privilege or Telephone Exchange Privilege
authorizes the Transfer Agent to act on telephone instructions (including
over The Dreyfus TouchRegistration Mark automated telephone system) from any
person representing himself or herself to be you, or a representative of your
Service Agent, and reasonably believed by the Transfer Agent to be genuine.
Each Fund will require the Transfer Agent to employ reasonable procedures,
such as requiring a form of personal identification, to confirm that
instructions are genuine and, if it does not follow such procedures, the Fund
or the Transfer Agent may be liable for any losses due to unauthorized or
fraudulent instructions. Neither a Fund nor the Transfer Agent will be liable
for following telephone instructions reasonably believed to be genuine.
During times of drastic economic or market conditions, you may
experience difficulty in contacting the Transfer Agent by telephone to
request a redemption or exchange of Fund shares. In such cases, you should
consider using the other redemption procedures described herein. Use of these
other redemption procedures may result in your redemption request being
processed at a later time than it would have been if telephone redemption had
been used.
Regular Redemption _ Under the regular redemption procedure, you may redeem
shares by written request mailed to The Dreyfus Family of Funds, P.O. Box
9671, Providence, Rhode Island 02940-9671, or, if for Dreyfus retirement plan
accounts, to The Dreyfus Trust Company, Custodian, P.O. Box 6427, Providence,
Rhode Island 02940-6427. Redemption requests may be delivered in person only
to a Dreyfus Financial Center. For the location of the nearest Dreyfus
Financial Center, please call one of the telephone numbers listed under
"General Information." These requests will be forwarded to the Fund and will
be processed only upon receipt thereby. Redemption requests must be signed by
each shareholder, including each owner of a joint account, and each signature
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. If
you have questions with respect to signature-guarantees, please call one of
the telephone numbers listed under "General Information."
Redemption proceeds of at least $1,000 will be wired to any member
bank of the Federal Reserve System in accordance with a written
signature-guaranteed request.
Check Redemption Privilege _ You may write Redemption Checks drawn on your
Fund account. Redemption Checks may be made payable to the order of any
person in the amount of $500 or more. Redemption Checks should not be used to
close your account. Redemption Checks are free, but the Transfer Agent will
impose a fee for stopping payment of a Redemption Check upon your request or
if the Transfer Agent cannot honor a Redemption Check due to insufficient
funds or other valid reason. You should date your Redemption Checks with the
current date when you write them. Please do not postdate your Redemption
Checks. If you do, the Transfer Agent will honor, upon presentment, even if
presented before the date of the check, all postdated Redemption Checks which
are dated within six months of presentment for payment, if they are otherwise
in good order. If you hold shares in a Dreyfus-sponsored IRA account, you may
be permitted to make withdrawals from your IRA account using checks furnished
to you by The Dreyfus Trust Company. The Check Redemption Privilege is
granted automatically unless you refuse it.
[Page 23]
Wire Redemption Privilege _ You may request by wire, telephone or letter that
redemption proceeds (minimum $1,000) be wired to your account at a bank which
is a member of the Federal Reserve System, or a correspondent bank if your
bank is not a member. Holders of jointly registered Fund or bank accounts may
have redemption proceeds of not more than $250,000 wired within any 30-day
period. You may telephone redemption requests by calling 1-800-645-6561 or,
if you are calling from overseas, call 516-794-5452. The Statement of
Additional Information sets forth instructions for transmitting redemption
requests by wire.
Telephone Redemption Privilege _ You may request by telephone that redemption
proceeds (maximum $150,000 per day) be paid by check and mailed to your
address. You may telephone redemption instructions by calling 1-800-645-6561
or, if you are calling from overseas, call 516-794-5452. The Telephone
Redemption Privilege is granted automatically unless you refuse it.
TeleTransfer Privilege (California Municipal Fund, Minnesota Municipal Fund
and New York Municipal Fund Only) _ You may request by telephone that
redemption proceeds (minimum $500 per day) be transferred between your Fund
account and your bank account. Only a bank account maintained in a domestic
financial institution which is an Automated Clearing House member may be
designated. Redemption proceeds will be on deposit in your account at an
Automated Clearing House member bank ordinarily two days after receipt of the
redemption request. Holders of jointly registered Fund or bank accounts may
redeem through the TeleTransfer Privilege for transfer to their bank account
not more than $250,000 within any 30-day period.
If you have selected the TeleTransfer Privilege, you may request a
TeleTransfer redemption of shares by calling 1-800-645-6561 or, if you are
calling from overseas, call 516-794-5452.
Redemption Through a Selected Dealer _ If you are a customer of a Selected
Dealer, you may make redemption requests to your Selected Dealer. If the
Selected Dealer transmits the redemption request so that it is received by
the Transfer Agent or its designee by 12:00 Noon, New York time, with respect
to the Municipal Funds, or 5:00 p.m., New York time, with respect to the
Government Money Fund and the Money Fund on a business day, the proceeds of
the redemption ordinarily will be transmitted in Federal Funds on the same
day and the shares will not receive the dividend declared on that day. If a
redemption request is received after such time, but by 8:00 p.m., New York
time, the redemption request will be effective on that day, the shares will
receive the dividend declared on that day and the proceeds of redemption
ordinarily will be transmitted in Federal Funds on the next business day. If
a redemption request is received after 8:00 p.m., New York time, the
redemption request will be effective on the next business day. It is the
responsibility of the Selected Dealer to transmit a request so that it is
received in a timely manner. The proceeds of the redemption are credited to
your account with the Selected Dealer. See "How to Buy Shares" for a
discussion of additional conditions or fees that may be imposed upon
redemption.
SERVICE PLAN
(GOVERNMENT MONEY FUND AND MONEY FUND)
Class A shares of each of the Government Money Fund and the Money
Fund are subject to a Service Plan adopted pursuant to Rule 12b-1 under the
1940 Act. Under the Service Plan, the Fund directly bears the costs of
preparing, printing and distributing prospectuses and statements of
additional information and of implementing and operating the Service Plan. In
addition, each Fund reimburses (a) the Distributor for payments made for
distributing Class A shares and servicing shareholder accounts ("Servicing")
and (b) The Dreyfus Corporation, Dreyfus Service Corporation, a wholly-owned
subsidiary
[Page 24]
of The Dreyfus Corporation, and any affiliate of either of them
(collectively, "Dreyfus") for payments made for Servicing, at an aggregate
annual rate of up to .20 of 1% of the value of the Fund's average daily net
assets attributable to Class A. Each of the Distributor and Dreyfus may pay
one or more Service Agents a fee in respect of the respective Fund's Class A
shares owned by shareholders with whom the Service Agent has a Servicing
relationship or for whom the Service Agent is the dealer or holder of record.
The schedule of such fees and the basis upon which such fees will be paid
shall be determined from time to time by the Fund's Board. If a holder of
Class A shares ceases to be a client of a Service Agent, but continues to
hold Class A shares, Dreyfus will act as the Service Agent in respect of such
shareholder and receive payments under the Service Plan for Servicing. The
fees payable for Servicing are payable without regard to actual expenses
incurred.
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 an
amount not to exceed an annual rate of .25 of 1% of the value of the Fund's
average daily net assets attributable to Class A for certain allocated
expenses of providing personal services and/or maintaining shareholder
accounts. The services provided may include personal services relating to
shareholder accounts, such as answering shareholder inquiries regarding the
Fund and providing reports and other information, and services related to the
maintenance of shareholder accounts. As to each of the Government Money Fund
and the Money Fund, at no time will the amount paid under this Plan, together
with amounts otherwise paid with respect to Class A under the Fund's Service
Plan as a "service fee" as defined under the Conduct Rules of the National
Association of Securities Dealers, Inc., exceed the maximum amount permitted
to be paid under said Conduct Rules as a service fee.
DIVIDENDS, DISTRIBUTIONS AND TAXES
Each Fund ordinarily declares dividends from its net investment
income on each day the New York Stock Exchange or, for the Government Money
Fund and the Money Fund only, the Transfer Agent is open for business. The
Fund's earnings for Saturdays, Sundays and holidays are declared as dividends
on the preceding business day. Dividends usually are paid on the last
calendar day of each month and automatically are reinvested in additional
shares at net asset value or, at your option, paid in cash. If you redeem all
shares in your account at any time during the month, all dividends to which
you are entitled will be paid to you along with the proceeds of the
redemption. If you are an omnibus accountholder and indicate in a partial
redemption request that a portion of any accrued dividends to which such
account is entitled belongs to an underlying accountholder who has redeemed
all shares in his or her account, such portion of the accrued dividends will
be paid to you along with the proceeds of the redemption. Distributions from
net realized securities gains, if any, generally are declared and paid once a
year, but each Fund may make distributions on a more frequent basis to comply
with the distribution requirements of the Code, in all events in a manner cons
istent with the provisions of the 1940 Act. No Fund will make distributions
from net realized securities gains unless capital loss carryovers, if any,
have been utilized or have expired. You may choose whether to receive
distributions in cash or to reinvest in additional shares at net asset value.
If you elect to receive dividends and distributions in cash, and your
dividend or distribution check is returned to the Fund as undeliverable or
remains uncashed for six months, the Fund reserves the right to reinvest such
dividends or distributions and all future dividends and distributions payable
to you in additional Fund shares at net asset value. No interest will accrue
on
[Page 25]
amounts represented by uncashed distribution or redemption checks. All
expenses are accrued daily and deducted before declaration of dividends to
investors. Dividends paid by each Class will be calculated at the same time
and in the same manner and will be of the same amount, except that the
expenses attributable solely to a Class will be borne exclusively by such
Class.
Dividends paid by each Municipal Fund derived from Taxable
Investments, and dividends paid by each other Fund derived from interest,
together with distributions from any net realized short-term securities gains
and all or a portion of any gains realized from the sale or other disposition
of certain market discount bonds, are subject to Federal income tax as
ordinary income, whether received in cash or reinvested in additional Fund
shares. Distributions from net realized long-term securities gains, if any,
will be taxable as long-term capital gains for Federal income tax purposes if
you are a citizen or resident of the United States. The Code provides that an
individual generally will be taxed on his or her net capital gain at a
maximum rate of 28% with respect to capital gain from securities held for
more than one year but not more than 18 months and at a maximum rate of 20%
with respect to capital gain from securities held for more than 18 months.
Under the Code, interest on indebtedness incurred or continued to purchase or
carry Fund shares which is deemed to relate to exempt-interest dividends is
not deductible.
Except for dividends from Taxable Investments, it is anticipated that
substantially all dividends paid by each Municipal Fund will not be subject
to Federal income tax and, as to the California Municipal Fund, State of
California income taxes, as to the Minnesota Municipal Fund, State of
Minnesota income taxes, and as to the New York Municipal Fund, New York State
and New York City income taxes. Although all or a substantial portion of the
dividends paid by each Municipal Fund may be excluded by shareholders from
their gross income for Federal income tax purposes, each Municipal Fund may
purchase specified private activity bonds, the interest from which may be (i)
a preference item for purposes of the alternative minimum tax, or (ii) a
factor in determining the extent to which a shareholder's Social Security
benefits are taxable. If a Municipal Fund purchases such securities, the
portion of the Fund's dividends related thereto will not necessarily be tax
exempt to an investor who is subject to the alternative minimum tax and/or
tax on Social Security benefits and may cause an investor to be subject to
such taxes.
Dividends and distributions attributable to interest from direct
obligations of the United States and paid by the Government Money Fund and
the Money Fund to individuals currently are not subject to tax in most
states. Dividends and distributions attributable to interest from other
securities in which the Government Money Fund and the Money Fund may invest
may be subject to state tax. Each of these Funds intends to provide
shareholders with a statement which sets forth the percentage of dividends
and distributions paid by the Fund that is attributable to interest income
from direct obligations of the United States.
Taxable dividends derived from net investment income, together with
distributions from net realized short-term securities gains and all or a
portion of any gains realized from the sale or other disposition of certain
market discount bonds, paid by a Fund to a foreign investor generally are
subject to U.S. nonresident withholding taxes at the rate of 30%, unless the
foreign investor claims the benefit of a lower rate specified in a tax
treaty. Distributions from net realized long-term securities gains paid by a
Fund to a foreign investor generally will not be subject to U.S. nonresident
withholding tax. However, such distributions may be subject to backup
withholding, as described below, unless the foreign investor certifies his
non-U.S. residency status.
[Page 26]
Notice as to the tax status of your dividends and distributions will
be mailed to you annually. You also will receive periodic summaries of your
account which will include information as to dividends and distributions from
securities gains, if any, paid during the year. For each Municipal Fund,
these statements will set forth the dollar amount of income exempt from
Federal tax and, as to the California Municipal Fund, State of California
income taxes, as to the Minnesota Municipal Fund, State of Minnesota income
taxes, and as to the New York Municipal Fund, New York State and New York
City income taxes, and the dollar amount, if any, subject to such tax. These
dollar amounts will vary depending upon the size and length of time of the
investor's investment in the Fund. If a Municipal Fund pays dividends derived
from taxable income, it intends to designate as taxable the same percentage
of the day's dividend as the actual taxable income earned on that day bears
to total income earned on that day. Thus, the percentage of the dividend
designated as taxable, if any, may vary from day to day.
The exchange of shares of one fund for shares of another is treated
for Federal income tax purposes as a sale of the shares given in exchange by
the shareholder and, therefore, an exchanging shareholder may realize a
taxable gain or loss.
Federal regulations generally require each Fund to withhold ("backup
withholding") and remit to the U.S. Treasury 31% of dividends and
distributions from net realized securities gains of the Fund paid to a
shareholder if such shareholder fails to certify either that the TIN
furnished in connection with opening an account is correct, or that such
shareholder has not received notice from the IRS of being subject to backup
withholding as a result of a failure to properly report taxable dividend or
interest income on a Federal income tax return. Furthermore, the IRS may
notify a Fund to institute backup withholding if the IRS determines a
shareholder's TIN is incorrect or if a shareholder has failed to properly
report taxable dividend and interest income on a Federal income tax return.
A TIN is either the Social Security number, IRS individual taxpayer
identification number, or employer identification number of the record owner
of the account. Any tax withheld as a result of backup withholding does not
constitute an additional tax imposed on the record owner of the account, and
may be claimed as a credit on the record owner's Federal income tax return.
Management believes that each Fund (except the Minnesota Municipal
Fund, which has not completed its first fiscal year) has qualified for the
fiscal year ended November 30, 1997 as a "regulated investment company" under
the Code. Each Fund intends to continue to so qualify if such qualification
is in the best interests of its shareholders. It is expected that the
Minnesota Municipal Fund will qualify as a "regulated investment company"
under the Code so long as such qualification is in the best interests of its
shareholders. Qualification as a regulated investment company relieves the
Fund of any liability for Federal income tax to the extent its earnings are
distributed in accordance with applicable provisions of the Code. Each Fund
is subject to a non-deductible 4% excise tax, measured with respect to
certain undistributed amounts of taxable investment income and capital gains.
You should consult your tax adviser regarding specific questions as
to Federal, state and local taxes.
GENERAL INFORMATION
The Minnesota Municipal Fund and the National Municipal Fund are
separate series of the General Municipal Money Market Funds, Inc. (the
"Company"), an open-end, management investment company. Each other Fund is a
separate open-end, management investment company. The Government Money Fund,
the Company and the Money Fund were incorporated under Maryland law on April
8, 1982, April 8, 1982 and May 15, 1981, respectively, and commenced
operations on February 7, 1983, December 21, 1983 and February 8, 1982,
respectively. Before April 30, 1998, the
[Page 27]
Company's name was General Municipal Money Market Fund, Inc. and, before
October 6, 1990, its name was General Tax Exempt Money Market Fund, Inc. The
Government Money Fund, the Money Fund and the Company are authorized to issue
16 billion shares (15 billion Class A and 1 billion Class B), 25 billion
shares (15 billion Class A and 10 billion Class B), and 20 billion shares (15
billion Class A and 1 billion Class B allocated to the National Municipal
Fund, and 2 billion Class A and 2 billion Class B allocated to the Minnesota
Municipal Fund), respectively, par value $.01 per share.
The California Municipal Fund and the New York Municipal Fund were
organized as unincorporated business trusts under the laws of the
Commonwealth of Massachusetts pursuant to separate Agreements and
Declarations of Trust (each, a "Trust Agreement") and commenced operations on
March 10, 1987 and December 2, 1986, respectively. Before March 19, 1990, the
California Municipal Fund's name was General California Tax Exempt Money
Market Fund. Before January 29, 1990, the New York Municipal Fund's name was
General New York Tax Exempt Money Market Fund. Each of these Funds is
authorized to issue an unlimited number of shares of beneficial interest, par
value $.001 per share. Under Massachusetts law, shareholders could, under
certain circumstances, be held personally liable for the obligations of the
Fund. However, each Trust Agreement disclaims shareholder liability for acts
or obligations of the Fund and requires that notice of such disclaimer be
given in each agreement, obligation or instrument entered into or executed by
the Fund or its Trustees. Each Trust Agreement provides for indemnification
from the Fund's property for all losses and expenses of any shareholder held
personally liable for the obligations of the Fund. Thus, the risk of a
shareholder incurring financial loss on account of shareholder liability is
limited to circumstances in which the Fund itself would be unable to meet its
obligations, a possibility which management believes is remote. Upon payment
of any liability incurred by the Fund, the shareholder paying such liability
will be entitled to reimbursement from the general assets of the Fund. Each
of these Funds intends to conduct its operations in such a way so as to
avoid, as far as possible, ultimate liability of the shareholders for
liabilities of the Fund.
Each Fund's shares are classified into two classes_Class A and Class
B. Each share has one vote and shareholders will vote in the aggregate and
not by class except as otherwise required by law.
Unless otherwise required by the 1940 Act, ordinarily it will not be
necessary for any Fund to hold annual meetings of shareholders. As a result,
Fund shareholders may not consider each year the election of Board members or
the appointment of auditors. However, the holders of at least 10% of a Fund's
shares outstanding and entitled to vote may require such Fund to hold a
special meeting of shareholders for purposes of removing a Board member from
office. Fund shareholders may remove a Board member by the affirmative vote
of a majority, in the case of the Government Money Fund, the Company and the
Money Fund, or two-thirds, in the case of the California Municipal Fund and
the New York Municipal Fund, of the Fund's outstanding voting shares. In
addition, a Fund's Board will call a special meeting of shareholders for the
purpose of electing Board members if, at any time, less than a majority of
the Board members then holding office have been elected by shareholders.
The Transfer Agent maintains a record of your ownership and sends
confirmations and statements of account.
Shareholder inquiries may be made to your Service Agent or by writing
to a Fund at 144 Glenn Curtiss Boulevard, Uniondale, New York 11556-0144, or
by calling toll free 1-800-242-8671. In New York City, call 1-718-895-1396;
outside the U.S., call 516-794-5452.
[Page 28]
Although each Fund is offering only its own shares, it is possible
that a Fund might become liable for any misstatement in this Prospectus about
any other Fund. Each Fund's Board has considered this factor in approving the
use of this combined Prospectus.
General Municipal Money Market Funds, Inc. _ The Company is a series fund,
which is a mutual fund divided into separate portfolios, each of which is
treated as a separate entity for certain matters under the 1940 Act and for
other purposes. A shareholder of one portfolio is not deemed to be a
shareholder of any other portfolio. To date, the Company's Board has
authorized the creation of two series of shares_General Municipal Money Market
Fund and General Minnesota Municipal Money Market Fund. All consideration
received by the Company for shares of one of the portfolios and all assets in
which such consideration is invested will belong to that portfolio (subject
only to the rights of creditors of the Company) and will be subject to the
liabilities related thereto. The income attributable to, and the expenses of,
one portfolio are treated separately from those of the other portfolio.
Expenses attributable to a portfolio are charged against the assets of that
portfolio; other expenses of the Company are allocated among the Company's
portfolios on the basis determined by the Company's Board, including, but not
limited to, proportionately in relation to the net assets of each portfolio.
The Company has the ability to create, from time to time, new series without
shareholder approval.
[Page 29]
APPENDIX
INVESTMENT TECHNIQUES
Borrowing Money _ Each Fund may borrow money from banks for temporary or
emergency (not leveraging) purposes in an amount up to 15% of the value of
its total assets (including the amount borrowed) valued at 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 a Fund's
total assets, the Fund will not make any additional investments.
Forward Commitments (Municipal Funds) _ Each Municipal Fund may purchase
Municipal Obligations and other securities on a forward commitment or
when-issued basis, which means that delivery and payment take place a number
of days after the date of the commitment to purchase. The payment obligation
and the interest rate receivable on a forward commitment or when-issued
security are fixed when the Fund enters into the commitment, but the Fund
does not make payment until it receives delivery from the counterparty. The
Fund will commit to purchase such securities only with the intention of
actually acquiring the securities, but the Fund may sell these securities
before the settlement date if it is deemed advisable. The Fund will set aside
in a segregated account permissible liquid assets at least equal at all times
to the amount of the commitments.
CERTAIN PORTFOLIO SECURITIES
U.S. Government Securities (Government Money Fund and Money Fund) _ Each of
these Funds may invest in securities issued or guaranteed by the U.S.
Government or its agencies or instrumentalities, which include U.S. Treasury
securities that 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 Treasury;
others by discretionary 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 currently 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.
Repurchase Agreements (Government Money Fund and Money Fund) _ Each of these
Funds may enter into repurchase agreements with certain banks or non-bank
dealers. In a repurchase agreement, the Fund buys, and the seller agrees to
repurchase, a security at a mutually agreed upon time and price (usually
within seven days). The repurchase agreement thereby determines the yield
during the purchaser's holding period, while the seller's obligation to
repurchase is secured by the value of the underlying security. Repurchase
agreements could involve risks in the event of a default or insolvency of the
other party to the agreement, including possible delays or restrictions upon
the Fund's ability to dispose of the underlying securities.
Bank Obligations (Money Fund) _ The Fund may purchase certificates of
deposit, time deposits, bankers' acceptances and other short-term obligations
issued by domestic banks, foreign subsidiaries or foreign branches of
domestic banks, domestic and foreign branches of foreign banks, and thrift
institutions, savings and loan associations and other banking institutions.
With respect to such securities issued by foreign subsidiaries or foreign
branches of domestic banks, and domestic and foreign branches of foreign
banks, the Fund may be subject to additional investment risks that are
different in some respects
[Page 30]
from those incurred by a fund which invests only in debt obligations of U.S.
domestic issuers. See "Description of the Funds_Investment Considerations and
Risks_Foreign Securities."
Certificates of deposit are negotiable certificates evidencing 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.
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 the drawer to pay the face amount of the
instrument upon maturity. The other short-term obligations may include
uninsured, direct obligations bearing fixed, floating or variable interest
rates.
Commercial Paper (Money Fund) _ The Fund may purchase commercial paper
consisting of short-term, unsecured promissory notes issued to finance
short-term credit needs. The commercial paper purchased by the Fund will
consist only of direct obligations issued by domestic and foreign entities.
The other corporate obligations in which the Fund may invest consist of high
quality, U.S. dollar denominated short-term bonds and notes (including
variable amount master demand notes) issued by domestic and foreign
corporations, including banks.
Floating and Variable Rate Obligations (Money Fund) _ The Fund may purchase
floating and variable rate demand notes and bonds, which are 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. Variable rate demand notes include master demand notes which are
obligations that permit the Fund to invest fluctuating amounts, at varying
rates of interest, pursuant to direct arrangements between the Fund, as
lender, and the borrower. These obligations permit daily changes in the
amounts borrowed. Because these obligations are direct lending arrangements
between the lender and borrower, it is not contemplated that such instruments
generally will be traded, and there generally is no established secondary
market for these obligations, although they are redeemable at face value,
plus accrued interest. Accordingly, where these obligations are not secured
by letters of credit or other credit support arrangements, the Fund's right
to redeem is dependent on the ability of the borrower to pay principal and
interest on demand.
Participation Interests (Money Fund) _ The Fund may purchase from financial
institutions participation interests in securities in which the Fund may
invest. A participation interest gives the Fund an undivided interest in the
security in the proportion that the Fund's participation interest bears to
the total principal amount of the security. These instruments may have fixed,
floating or variable rates of interest, with remaining maturities of 13
months or less. If the participation interest is unrated, or has been given a
rating below that which is permissible for purchase by the Fund, the
participation interest will be backed by an irrevocable letter of credit or
guarantee of a bank, or the payment obligation otherwise will be
collateralized by U.S. Government securities, or, in the case of unrated
participation interests, The Dreyfus Corporation must have determined that
the instrument is of comparable quality to those instruments in which the
Fund may invest.
Asset-Backed Securities (Money Fund) _ The Fund may purchase asset-backed
securities, which are securities issued by special purpose entities whose
primary assets consist of a pool of mortgages, loans, receivables or other
assets. Payment of principal and interest may depend largely on the cash
flows generated by the assets backing the securities and, in certain cases,
supported by letters of credit,
[Page 31]
surety bonds or other forms of credit or liquidity enhancements. The value of
these asset-backed securities also may be affected by the creditworthiness of
the servicing agent for the pool of assets, the originator of the loans or
receivables or the financial institution providing the credit support.
Municipal Obligations (Municipal Funds) _ Each Municipal Fund purchases
Municipal Obligations. Municipal Obligations generally include debt
obligations issued to obtain funds for various public purposes as well as
certain industrial development bonds issued by or on behalf of public
authorities. Municipal Obligations are classified as general obligation
bonds, revenue bonds and notes. General obligation bonds are secured by the
issuer's pledge of its faith, credit and taxing power for the payment of
principal and interest. Revenue bonds are payable from the revenue derived
from a particular facility or class of facilities or, in some cases, from the
proceeds of a special excise or other specific revenue source, but not from
the general taxing power. Tax exempt industrial development bonds, in most
cases, are revenue bonds that generally do not carry the pledge of the credit
of the issuing municipality, but generally are guaranteed by the corporate
entity on whose behalf they are issued. Notes are short-term instruments
which are obligations of the issuing municipalities or agencies and are sold
in anticipation of a bond sale, collection of taxes or receipt of other
revenues. Municipal Obligations include municipal lease/purchase agreements
which are similar to installment purchase contracts for property or equipment
issued by municipalities.
Certain Tax Exempt Obligations (Municipal Funds) _ Each Municipal Fund may
purchase floating and variable rate demand notes and bonds, which 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. Variable rate demand notes include master demand
notes which are obligations that permit the Fund to invest fluctuating
amounts, at varying rates of interest, pursuant to direct arrangements
between the Fund, as lender, and the borrower. These obligations permit daily
changes in the amount borrowed. Frequently, such obligations are secured by
letters of credit or other credit support arrangements provided by banks.
Changes in the credit quality of banks and other financial institutions that
provide such credit or liquidity enhancements to the Fund's portfolio
securities could cause losses to the Fund and affect its share price. Because
these obligations are direct lending arrangements between the lender and
borrower, it is not contemplated that such instruments generally will be
traded, and there generally is no established secondary market for these
obligations, although they are redeemable at face value plus accrued
interest. Accordingly, where these obligations are not secured by letters of
credit or other credit support arrangements, the Fund's right to redeem is
dependent on the ability of the borrower to pay principal and interest on
demand. Each obligation purchased by the Fund will meet the quality criteria
established for the purchase of Municipal Obligations.
Tax Exempt Participation Interests (Municipal Funds) _ Each Municipal Fund
may purchase from financial institutions participation interests in Municipal
Obligations (such as industrial development bonds and municipal
lease/purchase agreements). A participation interest gives the Fund an
undivided interest in the Municipal Obligation in the proportion that the
Fund's participation interest bears to the total principal amount of the
Municipal Obligation. These instruments may have fixed, floating or variable
rates of interest, with remaining maturities of 13 months or less. If the
participation interest is unrated or has been given a rating below that which
otherwise is permissible for purchase by the Fund, it will be backed by an
irrevocable letter of credit or guarantee of a bank that the Fund's Board has
determined meets prescribed quality standards for banks, or the payment
obligation otherwise will be
[Page 32]
collateralized by U.S. Government securities. For certain participation
interests, the Fund will have the right to demand payment, on not more than
seven days' notice, for all or any part of the Fund's participation interest
in the Municipal Obligation, plus accrued interest. As to these instruments,
the Fund intends to exercise its right to demand payment only upon a default
under the terms of the Municipal Obligation, as needed to provide liquidity
to meet redemptions, or to maintain or improve the quality of its investment
portfolio.
Tender Option Bonds (Municipal Funds) _ Each Municipal Fund may purchase
tender option bonds. A tender option bond is a Municipal Obligation
(generally held pursuant to a custodial arrangement) having a relatively long
maturity and bearing interest at a fixed rate substantially higher than
prevailing short-term tax exempt rates, that has been coupled with the
agreement of a third party, such as a bank, broker-dealer or other financial
institution, pursuant to which such institution grants the security holders
the option, at periodic intervals, to tender their securities to the
institution and receive the face value thereof. As consideration for
providing the option, the financial institution receives periodic fees equal
to the difference between the Municipal Obligation's fixed coupon rate and
the rate, as determined by a remarketing or similar agent at or near the
commencement of such period, that would cause the securities, coupled with the
tender option, to trade at par on the date of such determination. Thus, after
payment of this fee, the security holder effectively holds a demand
obligation that bears interest at the prevailing short-term tax exempt rate.
The Dreyfus Corporation, on behalf of the Fund, will consider on an ongoing
basis the creditworthiness of the issuer of the underlying Municipal
Obligation, of any custodian and of the third party provider of the tender
option. In certain instances and for certain tender option bonds, the option
may be terminable in the event of a default in payment of principal or
interest on the underlying Municipal Obligations and for other reasons.
Stand-By Commitments (Municipal Funds) _ Each Municipal Fund may acquire
"stand-by commitments" with respect to Municipal Obligations held in its
portfolio. Under a stand-by commitment, the Fund obligates a broker, dealer
or bank to repurchase, at the Fund's option, specified securities at a
specified price and, in this respect, stand-by commitments are comparable to
put options. The exercise of a stand-by commitment, therefore, is subject to
the ability of the seller to make payment on demand. The Fund will acquire
stand-by commitments solely to facilitate portfolio liquidity and does not
intend to exercise its rights thereunder for trading purposes. The Fund may
pay for stand-by commitments if such action is deemed necessary, thus
increasing to a degree the cost of the underlying Municipal Obligation and
similarly decreasing such security's yield to investors. Gains realized in
connection with stand-by commitments will be taxable.
Taxable Investments (Municipal Funds) _ From time to time, on a temporary
basis other than for temporary defensive purposes (but not to exceed 20% of
the value of the Fund's net assets) or for temporary defensive purposes, each
Municipal Fund may invest in taxable short-term investments ("Taxable
Investments") consisting of: notes of issuers having, at the time of
purchase, a quality rating within the two highest grades of Moody's, S&P or
Fitch; obligations of the U.S. Government, its agencies or instrumentalities;
commercial paper rated not lower than P-2 by Moody's, A-2 by S&P or F-2 by
Fitch; certificates of deposit of U.S. domestic banks, including foreign
branches of domestic banks, with assets of one billion dollars or more; time
deposits; bankers' acceptances and other short-term bank obligations; and
repurchase agreements in respect of any of the foregoing. Dividends paid by
the Fund that are attributable to income earned by the Fund from Taxable
Investments will be taxable to investors. See "Dividends, Distributions and
Taxes." Except for temporary defensive purposes, at no
[Page 33]
time will more than 20% of the value of the Fund's net assets be invested in
Taxable Investments. If the Fund purchases Taxable Investments, it will value
them using the amortized cost method and comply with the provisions of Rule
2a-7 relating to purchases of taxable instruments. When the California
Municipal Fund, the Minnesota Municipal Fund or the New York Municipal Fund
has adopted a temporary defensive position, including when acceptable
California, Minnesota or New York Municipal Obligations are unavailable for
investment by the relevant Fund, in excess of 35% of the Fund's net assets
may be invested in securities that are not exempt from California, Minnesota
or New York State and New York City income taxes, respectively. Under normal
market conditions, none of these Funds anticipates that more than 5% of the
value of its total assets will be invested in any one category of Taxable
Investments. Taxable Investments are more fully described in the Statement of
Additional Information to which reference hereby is made.
Illiquid Securities _ Each Fund may invest up to 10% of the value of its net
assets in securities as to which a liquid trading market does not exist,
provided such investments are consistent with the Fund's investment
objective. Such securities may include securities that are not readily
marketable, such as certain securities that are subject to legal or
contractual restrictions on resale, and repurchase agreements providing for
settlement in more than seven days after notice. As to these securities, the
Fund is subject to a risk that should the Fund desire to sell them when a
ready buyer is not available at a price the Fund deems representative of
their value, the value of the Fund's net assets could be adversely affected.
No person has been authorized to give any information or to make any
representations other than those contained in this Prospectus and in the
Fund's official sales literature in connection with the offer of the Fund's
shares, and, if given or made, such other information or representations must
not be relied upon as having been authorized by the Fund. This Prospectus
does not constitute an offer in any State in which, or to any person to whom,
such offering may not lawfully be made.
[Page 34]
[This Page Intentionally Left Blank]
[Page 35]
General Government Securities
Money Market Fund
General Money Market Fund
General California Municipal
Money Market Fund
General Minnesota Municipal
Money Market Fund
General Municipal
Money Market Fund
General New York Municipal
Money Market Fund
Combined Prospectus
CLASS A SHARES
Copy Rights 1998 Dreyfus Service Corporation
GEN/p0598A
Dreyfus
[Page 36]
______________________________________________________________________________
COMBINED PROSPECTUS May 1, 1998
GENERAL MONEY MARKET FUNDS
CLASS B SHARES
______________________________________________________________________________
General Government Securities Money Market Fund (the "Government
Money Fund"), General Money Market Fund (the "Money Fund"), General
California Municipal Money Market Fund (the "California Municipal Fund"),
General Minnesota Municipal Money Market Fund (the "Minnesota Municipal
Fund"), General Municipal Money Market Fund (the "National Municipal Fund")
and General New York Municipal Money Market Fund (the "New York Municipal
Fund") are open-end management investment companies, known as money market
mutual funds (each, a "Fund"). Each Fund seeks to provide you with as high a
level of current income as is consistent with the preservation of capital and
the maintenance of liquidity. In addition, each of the California Municipal
Fund, the Minnesota Municipal Fund, the National Municipal Fund and the New
York Municipal Fund seeks to provide current income exempt from Federal
income tax and, in the case of the California Municipal Fund, exempt from
State of California income taxes, in the case of the Minnesota Municipal
Fund, exempt from State of Minnesota income taxes, and, in the case of the
New York Municipal Fund, exempt from New York State and New York City income
taxes.
The Dreyfus Corporation professionally manages each Fund's portfolio.
AN INVESTMENT IN THE FUNDS IS NEITHER INSURED NOR GUARANTEED BY THE
U.S. GOVERNMENT. THERE CAN BE NO ASSURANCE THAT THE FUNDS WILL BE ABLE TO
MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE.
SINCE EACH OF THE CALIFORNIA MUNICIPAL FUND, THE MINNESOTA MUNICIPAL
FUND AND THE NEW YORK MUNICIPAL FUND MAY INVEST A SIGNIFICANT PORTION OF ITS
ASSETS IN A SINGLE ISSUER, AN INVESTMENT IN THESE FUNDS MAY INVOLVE GREATER
RISK THAN INVESTMENTS IN CERTAIN OTHER TYPES OF MONEY MARKET FUNDS.
(cover page continued on next page)
This Prospectus sets forth concisely information about each Fund that
you should know before investing. It should be read and retained for future
reference.
The Statement of Additional Information, dated May 1, 1998, which
may be revised from time to time, provides a further discussion of certain
areas in this Prospectus and other matters which may be of interest to some
investors. It has been filed with the Securities and Exchange Commission and
is incorporated herein by reference. The Securities and Exchange Commission
maintains a web site (http://www.sec.gov) that contains the Statement of
Additional Information, material incorporated by reference, and other
information regarding the funds. For a free copy of the Statement of
Additional Information, write to a Fund at 144 Glenn Curtiss Boulevard,
Uniondale, New York 11556-0144, or call 1-800-645-6561. When telephoning, ask
for operator 144.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
OR ENDORSED BY, ANY BANK, AND ARE NOT FEDERALLY INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER
AGENCY. MONEY MARKET MUTUAL FUND SHARES INVOLVE CERTAIN INVESTMENT RISKS,
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
______________________________________________________________________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
______________________________________________________________________________
(CONTINUED FROM COVER PAGE)
You can invest, reinvest or redeem shares at any time without charge
or penalty imposed by a Fund.
Fund shares may be purchased only by clients of Service Agents as
described herein. By this Prospectus, each Fund is offering Class B shares.
Another class of Fund shares_Class A shares_are offered by the Funds pursuant
to a separate prospectus and are not offered hereby. Class A and Class B
shares are identical, except as to the services offered to, and the expenses
borne by, each Class which may affect performance. If you would like to
obtain information about Class A shares, please write to the address or call
the number set forth below.
Each Fund is a separate investment portfolio with operations and
results that are unrelated to those of each other Fund. This combined
Prospectus has been prepared for your convenience to provide you the
opportunity to consider six investment choices in one document.
TABLE OF CONTENTS
Page
Annual Fund Operating Expenses................. 4
Condensed Financial Information................ 5
Yield Information.............................. 7
Description of the Funds....................... 8
Management of the Funds........................ 14
How to Buy Shares.............................. 15
Shareholder Services........................... 18
How to Redeem Shares........................... 21
Distribution Plan.............................. 24
Shareholder Services Plan...................... 25
Dividends, Distributions and Taxes............. 25
General Information............................ 27
Appendix....................................... 30
[Page 2]
[This Page Intentionally Left Blank]
[Page 3]
<TABLE>
<CAPTION>
Annual Fund Operating Expenses
(as a percentage of average daily net assets)
GOVERNMENT
MONEY MONEY
FUND FUND
__________ ______
<S> <C> <C>
Management Fees.......................................................... .50% .50%
12b-1 Fees............................................................... .20% .20%
Other Expenses........................................................... .35% .35%
Total Fund Operating Expenses............................................ 1.05% 1.05%
EXAMPLE:
You would pay the following expenses on
a $1,000 investment, assuming (1) 5% annual
return and (2) redemption at the end of
each time period:
1 YEAR $ 11 $ 11
3 YEARS $ 33 $ 33
5 YEARS $ 58 $ 58
10 YEARS $128 $128
</TABLE>
<TABLE>
<CAPTION>
CALIFORNIA MINNESOTA NATIONAL NEW YORK
MUNICIPAL MUNICIPAL MUNICIPAL MUNICIPAL
FUND FUND FUND FUND
_____________ __________ __________ __________
<S> <C> <C> <C> <C>
Management Fees............................................ .50% .50% .50% .50%
12b-1 Fees................................................. .20% .20% .20% .20%
Other Expenses............................................. .43% .40% .41% .33%
Total Fund Operating Expenses.............................. 1.13% 1.10% 1.11% 1.03%
EXAMPLE:
You would pay the following expenses on
a $1,000 investment, assuming (1) 5% annual
return and (2) redemption at the end of
each time period:
1 YEAR $ 12 $ 11 $ 11 $ 11
3 YEARS $ 36 $ 35 $ 35 $ 33
5 YEARS $ 62 $ 61 $ 61 $ 57
10 YEARS $137 $134 $135 $126
</TABLE>
______________________________________________________________________________
THE AMOUNTS LISTED IN THE EXAMPLE SHOULD NOT BE CONSIDERED AS
REPRESENTATIVE OF PAST OR FUTURE EXPENSES AND ACTUAL EXPENSES MAY BE GREATER
OR LESS THAN THOSE INDICATED. MOREOVER, WHILE THE EXAMPLE ASSUMES A 5% ANNUAL
RETURN, EACH FUND'S ACTUAL PERFORMANCE WILL VARY AND MAY RESULT IN AN ACTUAL
RETURN GREATER OR LESS THAN 5%.
______________________________________________________________________________
The purpose of the foregoing tables is to assist you in understanding
the costs and expenses borne by each Fund, the payment of which will reduce
investors' annual return. The information in the foregoing tables does not
reflect any fee waivers or expense reimbursement arrangements that may be in
effect. Other Expenses for the Minnesota Municipal Fund are based on
estimated amounts for the current fiscal year. Each Fund's Class B shares are
charged directly for sub-accounting services provided by Service Agents (as
defined below) at the annual rate of .05% of the value of the Fund's average
daily net assets attributable to Class B, which is reflected under "Other
Expenses" in the foregoing table. Certain Service Agents may charge their
clients direct fees for effecting transactions in Fund shares; such fees are
not reflected in the foregoing table. For a further description of the
various costs and expenses incurred in the operation of the Funds, as well as
expense reimbursement or waiver arrangements, see "Management of the Funds,"
"How to Buy Shares," "Distribution Plan" and "Shareholder Services Plan."
[Page 4]
CONDENSED FINANCIAL INFORMATION
The information in the following tables has been audited by Ernst &
Young LLP, each Fund's independent auditors. Further financial data, related
notes and reports of independent auditors accompany the Statement of
Additional Information, available upon request.
FINANCIAL HIGHLIGHTS
Contained below for each Fund (except the Minnesota Municipal Fund,
which has not completed its first reporting period) is per share operating
performance data for a Class B share outstanding, total investment return,
ratios to average net assets and other supplemental data for each period
indicated. This information has been derived from the Fund's financial
statements.
<TABLE>
<CAPTION>
Government Money Fund
_______________________________________________________
FISCAL YEAR
ENDED TEN MONTHS ENDED
JANUARY 31, NOVEMBER 30,
___________________ __________________
PER SHARE DATA: 1996(1) 1997 1997(2)
_______ _____ _______
<S> <C> <C> <C>
Net asset value, beginning of period...................... $ 1.00 $ 1.00 $ 1.00
______ ______ ______
INVESTMENT OPERATIONS:
Investment income-net..................................... .042 .045 .038
______ ______ ______
DISTRIBUTIONS:
Dividends from investment income-net...................... (.042) (.045) (.038)
______ ______ ______
Net asset value, end of period............................ $ 1.00 $ 1.00 $ 1.00
====== ====== ======
TOTAL INVESTMENT RETURN................................... 5.04%(3) 4.58% 4.69%(3)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets................... 1.00%(3) 1.00% 1.00%(3)
Ratio of net investment income to average net assets...... 5.01%(3) 4.48% 4.60%(3)
Decrease reflected in above expense ratios due to undertakings by
The Dreyfus Corporation................................... .10%(3) .08% .05%(3)
Net Assets, end of period (000's omitted)................. $58 $90,175 $364,845
(1) From March 31, 1995 (commencement of initial offering) to January 31, 1996.
(2) Effective February 1, 1997, the Fund has changed its fiscal year end from
January 31 to November 30.
(3) Annualized.
</TABLE>
<TABLE>
<CAPTION>
Money Fund
_______________________________________________________
FISCAL YEAR
ENDED TEN MONTHS ENDED
JANUARY 31, NOVEMBER 30,
___________________ __________________
PER SHARE DATA: 1996(1) 1997 1997(2)
_______ _____ _______
<S> <C> <C> <C>
Net asset value, beginning of period...................... $ 1.00 $ 1.00 $ 1.00
______ ______ ______
INVESTMENT OPERATIONS:
Investment income-net .................................... .043 .046 .039
______ ______ ______
DISTRIBUTIONS:
Dividends from investment income-net...................... (.043) (.046) (.039)
______ ______ ______
Net asset value, end of period............................ $ 1.00 $ 1.00 $ 1.00
====== ====== ======
TOTAL INVESTMENT RETURN..................................... 5.18%(3) 4.65% 4.83%(3)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets .................. 1.00%(3) 1.00% 1.00%(3)
Ratio of net investment income to average net assets ..... 5.00%(3) 4.56% 4.78%(3)
Decrease reflected in above expense ratios due to
undertakings by The Dreyfus Corporation................... .07%(3) .07% .05%(3)
Net Assets, end of period (000's omitted)................. $50,446 $369,205 $1,231,132
(1) From March 31, 1995 (commencement of initial offering) to January 31, 1996.
(2) Effective February 1, 1997, the Fund changed its fiscal year end from
January 31 to November 30.
(3) Annualized.
</TABLE>
<TABLE>
<CAPTION>
[Page 5]
California Municipal Fund
_____________________________________________________
FISCAL YEAR FOUR MONTHS
ENDED ENDED
JULY 31, NOVEMBER 30,
_______________________ _______________
PER SHARE DATA: 1996(1) 1997 1997(2)
_______ _____ _______
<S> <C> <C> <C>
Net asset value, beginning of period...................... $ 1.00 $ 1.00 $ 1.00
______ ______ ______
INVESTMENT OPERATIONS:
Investment income-net..................................... .025 .026 .009
______ ______ ______
DISTRIBUTIONS:
Dividends from investment income - net.................... (.025) (.026) (.009)
______ ______ ______
Net asset value, end of period............................ $ 1.00 $ 1.00 $ 1.00
====== ====== ======
TOTAL INVESTMENT RETURN................................... 2.56% 2.61% 2.57%(3)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets................... 1.00% 1.00% 1.00%(3)
Ratio of net investment income to average net assets...... 2.45% 2.52% 2.62%(3)
Decrease reflected in above expense ratios due to
undertakings by The Dreyfus Corporation .................. .08% .07% .13%(3)
Net Assets, end of period (000's omitted)................. $5,475 $928 $2,669
(1) From August 1, 1995 (commencement of initial offering) to July 31, 1996.
(2) Effective August 1, 1997, the Fund changed its fiscal year end from July
31 to November 30.
(3) Annualized.
</TABLE>
<TABLE>
<CAPTION>
National Municipal Fund
______________________________________________
FISCAL YEAR ENDED NOVEMBER 30,
______________________________________________
1995(1) 1996 1997
_______ ________ ________
<S> <C> <C> <C>
PER SHARE DATA:
Net asset value, beginning of year.................................. $ 1.00 $ 1.00 $ 1.00
________ _______ _______
INVESTMENT OPERATIONS:
Investment income-net............................................... .020 .027 .028
________ _______ _______
DISTRIBUTIONS:
Dividends from investment income - net.............................. (.020) (.027) (.028)
________ _______ _______
Net asset value, end of year........................................ $ 1.00 $ 1.00 $ 1.00
======== ======= =======
TOTAL INVESTMENT RETURN............................................. 3.01%(2) 2.70% 2.86%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets............................. 1.10%(2) .85% .95%
Ratio of net investment income to average net assets................ 2.83%(2) 2.65% 2.87%
Decrease reflected in above expense ratios due to
undertakings by The Dreyfus Corporation ............................ .09%(2) .29% .16%
Net Assets, end of year (000's omitted)............................. $3,024 $17,491 $263,008
(1) From March 31, 1995 (commencement of initial offering) to November 30,
1995.
(2) Annualized.
</TABLE>
<TABLE>
<CAPTION>
[Page 6]
New York Municipal Fund
____________________________________________
FISCAL YEAR ENDED NOVEMBER 30,
_____________________________________________
1995(1) 1996 1997
________ _______ _______
<S> <C> <C> <C>
PER SHARE DATA:
Net asset value, beginning of year.................................. $ 1.00 $ 1.00 $ 1.00
________ _______ _______
INVESTMENT OPERATIONS:
Investment income-net............................................... .006 .025 .027
________ _______ _______
DISTRIBUTIONS:
Dividends from investment income-net................................ (.006) (.025) (.027)
________ _______ _______
Net asset value, end of year........................................ $ 1.00 $ 1.00 $ 1.00
======== ======= =======
TOTAL INVESTMENT RETURN............................................... 2.82%(2) 2.55% 2.68%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets............................. 1.04%(2) .95% .95%
Ratio of net investment income to average net assets................ 3.64%(2) 2.47% 2.64%
Decrease reflected in above expense ratios due to undertakings by
The Dreyfus Corporation............................................. __ .16% .08%
Net Assets, end of year(000's omitted).............................. __ $36,199 $42,169
(1) From September 8, 1995 (commencement of initial offering) to
November 30, 1995.
(2) Annualized.
</TABLE>
YIELD INFORMATION
From time to time, each Fund advertises its yield and effective
yield. Both yield figures are based on historical earnings and are not
intended to indicate future performance. It can be expected that these yields
will fluctuate substantially. A Fund's yield refers to the income generated
by an investment in such Fund over a seven-day period (which period will be
stated in the advertisement). This income is then "annualized." That is, the
amount of income generated by the investment during that week is assumed to
be generated each week over a 52-week period and is shown as a percentage of
the investment. The effective yield is calculated similarly, but, when
annualized, the income earned by an investment in the Fund is assumed to be
reinvested. The effective yield will be slightly higher than the yield
because of the compounding effect of this assumed reinvestment. A Fund's
yield and effective yield may reflect absorbed expenses pursuant to any
undertaking that may be in effect. See "Management of the Funds."
As to the California Municipal Fund, the Minnesota Municipal Fund,
the National Municipal Fund and the New York Municipal Fund (collectively,
the "Municipal Funds"), tax equivalent yield is calculated by determining the
pre-tax yield which, after being taxed at a stated rate (in the case of the
California Municipal Fund, the Minnesota Municipal Fund and the New York
Municipal Fund, typically the highest combined Federal and California,
Minnesota or New York State and New York City, respectively, personal income
tax rates), would be equivalent to a stated yield or effective yield
calculated as described above.
Yield information is useful in reviewing a Fund's performance, but
because yields will fluctuate, under certain conditions such information may
not provide a basis for comparison with domestic bank deposits, other
investments which pay a fixed yield for a stated period of time, or other
investment companies which may use a different method of computing yield.
Comparative performance information may be used from time to time in
advertising or marketing Fund shares, including data from Lipper Analytical
Services, Inc., Bank Rate Monitortrademark, N. Palm Beach, Fla. 33408, IBC's
Money Fund Reporttrademark, Morningstar, Inc. and other industry
publications.
[Page 7]
DESCRIPTION OF THE FUNDS
INVESTMENT OBJECTIVE
The investment objective of the Government Money Fund and the Money
Fund is to provide you with as high a level of current income as is
consistent with the preservation of capital and, in the case of the
Government Money Fund, the maintenance of liquidity. The investment objective
of the Municipal Funds is to maximize current income exempt from Federal
income tax to the extent consistent with the preservation of capital and the
maintenance of liquidity and, in the case of the California Municipal Fund,
exempt from State of California income taxes, in the case of the Minnesota
Municipal Fund, exempt from State of Minnesota income taxes, and, in the case
of the New York Municipal Fund, exempt from New York State and New York City
income taxes. Each Fund's investment objective cannot be changed without
approval by the holders of a majority (as defined in the Investment Company
Act of 1940, as amended (the "1940 Act")) of such Fund's outstanding voting
shares. There can be no assurance that a Fund's investment objective will be
achieved. Each Fund pursues its investment objective in the manner described
below. Securities in which a Fund invests may not earn as high a level of
current income as long-term or lower quality securities which generally have
less liquidity, greater market risk and more fluctuation in market value.
MANAGEMENT POLICIES
Each Fund seeks to maintain a net asset value of $1.00 per share for
purchases and redemptions. To do so, each Fund uses the amortized cost method
of valuing its securities pursuant to Rule 2a-7 under the 1940 Act, which
Rule includes various maturity, quality and diversification requirements,
certain of which are summarized as follows. In accordance with Rule 2a-7,
each Fund is required to maintain a dollar-weighted average portfolio
maturity of 90 days or less, purchase only instruments having remaining
maturities of 13 months or less and invest only in U.S. dollar denominated
securities determined in accordance with procedures established by the Fund's
Board to present minimal credit risks and, in the case of the Money Fund and
each Municipal Fund, which 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
instrument was rated by only one such organization) or, if unrated, are of
comparable quality as determined in accordance with procedures established by
the Fund's Board. The nationally recognized statistical rating organizations
currently rating instruments of the type the Money Fund and each Municipal
Fund may purchase are Moody's Investors Service, Inc. ("Moody's"), Standard &
Poor's Ratings Group ("S&P"), Duff & Phelps Credit Rating Co., Fitch IBCA,
Inc. ("Fitch") and Thomson BankWatch, Inc., and their rating criteria are
described in the "Appendix" to the Statement of Additional Information. This
discussion concerning investment ratings does not apply to the Government
Money Fund because it invests exclusively in U.S. Government securities and
repurchase agreements in respect thereof. For further information regarding
the amortized cost method of valuing securities, see "Determination of Net
Asset Value" in the Statement of Additional Information. There can be no
assurance a Fund will be able to maintain a stable net asset value of $1.00
per share.
Each of the Government Money Fund, the Money Fund and the National
Municipal Fund is classified as a diversified investment company. Each of the
California Municipal Fund, the Minnesota Municipal Fund and the New York
Municipal Fund is classified as a non-diversified investment company.
GOVERNMENT MONEY FUND - The Fund invests in securities issued or guaranteed
as to principal and interest by the U.S. Government or its agencies or
instrumentalities, and repurchase agreements in respect of such securities.
See "Appendix_Certain Portfolio Securities."
[Page 8]
Money Fund _ The Fund invests in short-term money market obligations,
including securities issued or guaranteed by the U.S. Government or its
agencies or instrumentalities, time deposits, certificates of deposit,
bankers' acceptances and other short-term obligations issued by domestic
banks, foreign subsidiaries or foreign branches of domestic banks, domestic
and foreign branches of foreign banks and thrift institutions, repurchase
agreements, asset-backed securities, and high quality domestic and foreign
commercial paper and other short-term corporate obligations, including those
with floating or variable rates of interest. The Fund may invest in U.S.
dollar denominated obligations issued or guaranteed by one or more foreign
governments or any of their political subdivisions, agencies or
instrumentalities, including obligations of supranational entities. See
"Appendix _ Certain Portfolio Securities." During normal market conditions,
at least 25% of the value of the Fund's total assets will be invested in bank
obligations. See "Investment Considerations and Risks" below.
NATIONAL MUNICIPAL FUND _ The Fund will invest at least 80% of the value of
its net assets (except when maintaining a temporary defensive position) in
Municipal Obligations. Municipal Obligations are debt obligations issued by
states, territories and possessions of the United States and the District of
Columbia and their political subdivisions, agencies and instrumentalities, or
multistate agencies or authorities, the interest from which is, in the
opinion of bond counsel to the issuer, exempt from Federal income tax.
Municipal Obligations generally include debt obligations issued to obtain
funds for various public purposes as well as certain industrial development
bonds issued by or on behalf of public authorities. Municipal Obligations
bear fixed, floating or variable rates of interest. See "Appendix _ Certain
Portfolio Securities."
From time to time, the Fund may invest more than 25% of the value of
its total assets in industrial development bonds which, although issued by
industrial development authorities, may be backed only by the assets and
revenues of the non-governmental users. Interest on Municipal Obligations
(including certain industrial development bonds) which are specified private
activity bonds, as defined in the Internal Revenue Code of 1986, as amended
(the "Code"), issued after August 7, 1986, while exempt from Federal income
tax, is a preference item for the purpose of the alternative minimum tax.
Where a regulated investment company receives such interest, a proportionate
share of any exempt-interest dividend paid by the investment company may be
treated as such a preference item to shareholders. The Fund may invest
without limitation in such Municipal Obligations if The Dreyfus Corporation
determines that their purchase is consistent with the Fund's investment
objective.
From time to time, on a temporary basis other than for temporary
defensive purposes (but not to exceed 20% of the value of the Fund's net
assets) or for temporary defensive purposes, the Fund may invest in taxable
money market instruments ("Taxable Investments") of the quality described
under "Appendix _ Certain Portfolio Securities _ Taxable Investments."
CALIFORNIA MUNICIPAL FUND _ The Fund's management policies are identical to
those of the National Municipal Fund, except that, under normal
circumstances, at least 65% of the value of the Fund's net assets will be
invested in debt securities of the State of California, its political
subdivisions, authorities and corporations, the interest from which is, in
the opinion of bond counsel to the issuer, exempt from Federal and State of
California personal income taxes (collectively, "California Municipal
Obligations"). The remainder of the Fund's assets may be invested in
securities that are not California Municipal Obligations and therefore may be
subject to California income taxes. To the extent acceptable California
Municipal Obligations are at any time unavailable for investment by the Fund,
the Fund will invest temporarily in other Municipal Obligations which may be
subject to State of California
[Page 9]
income tax and in Taxable Investments. See "Investment Considerations and
Risks _ Investing in California Municipal Obligations" below, "Dividends,
Distributions and Taxes" and "Appendix _ Certain Portfolio Securities."
MINNESOTA MUNICIPAL FUND _ The Fund's management policies are identical to
those of the National Municipal Fund, except that, under normal
circumstances, at least 65% of the value of the Fund's net assets will be
invested in debt securities of the State of Minnesota, its political
subdivisions, authorities and corporations, the interest from which is, in
the opinion of bond counsel to the issuer, exempt from Federal and State of
Minnesota personal income taxes (collectively, "Minnesota Municipal
Obligations"). The remainder of the Fund's assets may be invested in
securities that are not Minnesota Municipal Obligations and therefore may be
subject to Minnesota income taxes. To the extent acceptable Minnesota
Municipal Obligations are at any time unavailable for investment by the Fund,
the Fund will invest temporarily in other Municipal Obligations which may be
subject to State of Minnesota income tax and in Taxable Investments. See
"Investment Considerations and Risks _ Investing in Minnesota Municipal
Obligations" below, "Dividends, Distributions and Taxes" and "Appendix _
Certain Portfolio Securities."
NEW YORK MUNICIPAL FUND _ The Fund's management policies are identical to
those of the National Municipal Fund, except that, under normal
circumstances, at least 65% of the value of the Fund's net assets will be
invested in debt securities of the State of New York, its political
subdivisions, authorities and corporations, the interest from which is, in
the opinion of bond counsel to the issuer, exempt from Federal, New York
State and New York City income taxes (collectively, "New York Municipal
Obligations"). The remainder of the Fund's assets may be invested in
securities that are not New York Municipal Obligations and therefore may be
subject to New York State and New York City income taxes. To the extent
acceptable New York Municipal Obligations are at any time unavailable for
investment by the Fund, the Fund will invest temporarily in other Municipal
Obligations which may be subject to New York State and New York City income
taxes and in Taxable Investments. See "Investment Considerations and Risks _
Investing in New York Municipal Obligations" below, "Dividends, Distributions
and Taxes" and "Appendix _ Certain Portfolio Securities."
INVESTMENT CONSIDERATIONS AND RISKS
GENERAL _ Each Fund attempts to increase yields by trading to take advantage
of short-term market variations. This policy is expected to result in high
portfolio turnover but should not adversely affect a Fund since each Fund
usually does not pay brokerage commissions when it purchases short-term debt
obligations, including U.S. Government securities. The value of the portfolio
securities held by each Fund will vary inversely to changes in prevailing
interest rates. Thus, if interest rates have increased from the time a
security was purchased, such security, if sold, might be sold at a price less
than its cost. Similarly, if interest rates have declined from the time a
security was purchased, such security, if sold, might be sold at a price
greater than its purchase cost. In either instance, if the security was
purchased at face value and held to maturity, no gain or loss would be
realized.
BANK SECURITIES (MONEY FUND ONLY) _ To the extent the Fund's investments are
concentrated in the banking industry, the Fund will have correspondingly
greater exposure to the risk factors which are characteristic of such
investments. Sustained increases in interest rates can adversely affect the
availability or liquidity and cost of capital funds for a bank's lending
activities, and a deterioration in general economic conditions could increase
the exposure to credit losses. In addition, the value of and the investment
return on the Fund's shares could be affected by economic or regulatory
developments in or related to the banking
[Page 10]
industry, which industry also is subject to the effects of competition within
the banking industry as well as with other types of financial institutions.
The Fund, however, will seek to minimize its exposure to such risks by
investing only in debt securities which are determined to be of high quality.
FOREIGN SECURITIES (MONEY FUND ONLY) _ Since the Fund's portfolio may
contain securities issued by foreign governments, or any of their political
subdivisions, agencies or instrumentalities, and by foreign subsidiaries and
foreign branches of domestic banks, domestic and foreign branches of foreign
banks, and commercial paper issued by foreign issuers, the Fund may be
subject to additional investment risks with respect to those securities that
are different in some respects from those incurred by a fund which invests
only in debt obligations of U.S. domestic issuers, although such obligations
may be higher yielding when compared to the securities of U.S. domestic
issuers. Such risks include possible future political and economic
developments, seizure or nationalization of foreign deposits, imposition of
foreign withholding taxes on interest income payable on the securities,
establishment of exchange controls or adoption of other foreign governmental
restrictions which might adversely affect the payment of principal and
interest on these securities.
INVESTING IN MUNICIPAL OBLIGATIONS (MUNICIPAL FUNDS) _ Each of the Municipal
Funds may invest more than 25% of the value of its total assets in Municipal
Obligations which are related in such a way that an economic, business or
political development or change affecting one such security also would affect
the other securities; for example, securities the interest upon which is paid
from revenues of similar types of projects. As a result, each of these Funds
may be subject to greater risk as compared to a fund that does not follow
this practice.
Certain municipal lease/purchase obligations in which each of the
Municipal Funds may invest may contain "non-appropriation" clauses which
provide that the municipality has no obligation to make lease payments in
future years unless money is appropriated for such purpose on a yearly basis.
Although "non-appropriation" lease/purchase obligations are secured by the
leased property, disposition of the leased property in the event of
foreclosure might prove difficult. In evaluating the credit quality of a
municipal lease/purchase obligation that is unrated, The Dreyfus Corporation
will consider, on an ongoing basis, a number of factors including the
likelihood that the issuing municipality will discontinue appropriating
funding for the leased property.
Certain provisions in the Code relating to the issuance of Municipal
Obligations may reduce the volume of Municipal Obligations qualifying for
Federal tax exemption. One effect of these provisions could be to increase
the cost of the Municipal Obligations available for purchase by the Fund and
thus reduce available yield. Shareholders should consult their tax advisers
concerning the effect of these provisions on an investment in any of the
Municipal Funds. Proposals that may restrict or eliminate the income tax
exemption for interest on Municipal Obligations may be introduced in the
future. If any such proposal were enacted that would reduce the availability
of Municipal Obligations for investment by the Municipal Funds so as to
adversely affect Fund shareholders, each Municipal Fund would reevaluate its
investment objective and policies and submit possible changes in the Fund's
structure to shareholders for their consideration. If legislation were
enacted that would treat a type of Municipal Obligation as taxable, the
Municipal Funds would treat such security as a permissible Taxable Investment
within the applicable limits set forth herein.
INVESTING IN CALIFORNIA MUNICIPAL OBLIGATIONS (CALIFORNIA MUNICIPAL FUND
ONLY) _ Since the California Municipal Fund is concentrated in securities
issued by California or entities within California, an investment in the Fund
may involve greater risk than investments in certain other types
[Page 11]
of money market funds. You should consider carefully the special risks
inherent in investing principally in California Municipal Obligations. These
risks result from certain amendments to the California Constitution and other
statutes 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. You should obtain and review a copy of the
Statement of Additional Information which more fully sets forth these and
other risk factors.
INVESTING IN MINNESOTA MUNICIPAL OBLIGATIONS (MINNESOTA MUNICIPAL FUND ONLY)
_ Since the Minnesota Municipal Fund is concentrated in securities issued by
Minnesota or entities within Minnesota, an investment in the Fund may involve
greater risk than investments in certain other types of money market funds.
You should consider carefully the special risks inherent in investing
principally in Minnesota Municipal Obligations. These risks result from the
financial condition of the State of Minnesota and its municipalities. The
structure of Minnesota's economy parallels the structure of the United
States' economy as a whole when viewed at a highly aggregated level of
detail. Diversity and a significant natural resource base are two important
characteristics of the State's economy. However, the State of Minnesota
experienced financial difficulties in the early 1980s because of a downturn
in the State's economy resulting from the national recession. More recently,
real growth has been equal to or greater than national growth. There can be
no assurance that the financial problems referred to or similar future
problems will not affect the market value or marketability of Minnesota
Municipal Obligations or the ability of the issuer thereof to pay interest or
principal thereon. You should obtain and review a copy of the Statement of
Additional Information which more fully sets forth these and other risk
factors.
INVESTING IN NEW YORK MUNICIPAL OBLIGATIONS (NEW YORK MUNICIPAL FUND ONLY) _
Since the New York Municipal Fund is concentrated in securities issued by New
York or entities within New York, an investment in the Fund may involve
greater risk than investments in certain other types of money market funds.
You should consider carefully the special risks inherent in investing
principally in New York Municipal Obligations. 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
[Page 12]
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. You should obtain and review a copy of the Statement of Additional
Information which more fully sets forth these and other risk factors.
NON-DIVERSIFIED STATUS (CALIFORNIA MUNICIPAL FUND, MINNESOTA MUNICIPAL FUND
AND NEW YORK MUNICIPAL FUND) _ The classification of each of these Funds as
a "non-diversified" investment company means that the proportion of the
Fund's assets that may be invested in the securities of a single issuer is
not limited by the 1940 Act. A "diversified" investment company is required
by the 1940 Act generally, with respect to 75% of its total assets, to invest
not more than 5% of such assets in the securities of a single issuer. Since a
relatively high percentage of each of these Funds' assets may be invested in
the obligations of a limited number of issuers, the Fund's portfolio may be
more sensitive to changes in the market value of a single issuer. However, to
meet Federal tax requirements, at the close of each quarter each Fund may not
have more than 25% of its total assets invested in any one issuer and, with
respect to 50% of total assets, not more than 5% of its total assets invested
in any one issuer. These limitations do not apply to U.S. Government
securities.
SIMULTANEOUS INVESTMENTS _ Investment decisions for each Fund are made
independently from those of other investment companies advised by The Dreyfus
Corporation. If, however, such other investment companies desire to invest
in, or dispose of, the same securities as a Fund, available investments or
opportunities for sales will be allocated equitably to each investment
company. In some cases, this procedure may adversely affect the size of the
position obtained for or disposed of by the Fund or the price paid or
received by the Fund.
YEAR 2000 RISKS _ Like other mutual funds, financial and business
organizations and individuals around the world, each Fund could be adversely
affected if the computer systems used by The Dreyfus Corporation and the
Fund's other service providers do not properly process and calculate
date-related information and data from and after January 1, 2000. This is
commonly known as the "Year 2000 Problem." The Dreyfus Corporation is taking
steps to address the Year 2000 Problem with respect to the computer systems
that it uses and to obtain assurances that comparable steps are being taken
by the Funds' other major service providers. At this time, however, there can
be no assurance that these steps will be sufficient to avoid any adverse
impact on a Fund.
[Page 13]
MANAGEMENT OF THE FUNDS
INVESTMENT ADVISER _ The Dreyfus Corporation, located at 200 Park Avenue,
New York, New York 10166, was formed in 1947 and serves as each Fund's
investment adviser. The Dreyfus Corporation is a wholly-owned subsidiary of
Mellon Bank, N.A., which is a wholly-owned subsidiary of Mellon Bank
Corporation ("Mellon"). As of March 31, 1998, The Dreyfus Corporation managed
or administered approximately $100 billion in assets for approximately 1.7
million investor accounts nationwide.
The Dreyfus Corporation supervises and assists in the overall
management of each Fund's affairs under separate Management Agreements
related to each Fund, subject to the authority of the Board in accordance
with applicable law.
Mellon is a publicly owned multibank holding company incorporated
under Pennsylvania law in 1971 and registered under the Federal Bank Holding
Company Act of 1956, as amended. Mellon provides a comprehensive range of
financial products and services in domestic and selected international
markets. Mellon is among the twenty-five largest bank holding companies in
the United States based on total assets. Mellon's principal wholly-owned
subsidiaries are Mellon Bank, N.A., Mellon Bank (DE) National Association,
Mellon Bank (MD), The Boston Company, Inc., AFCO Credit Corporation and a
number of companies known as Mellon Financial Services Corporations. Through
its subsidiaries, including The Dreyfus Corporation, Mellon managed more than
$305 billion in assets as of December 31, 1997, including approximately $104
billion in proprietary mutual fund assets. As of December 31, 1997, Mellon,
through various subsidiaries, provided non-investment services, such as
custodial or administration services, for more than $1.532 trillion in
assets, including approximately $60 billion in mutual fund assets.
For the fiscal year ended November 30, 1997, each Fund (except the
Minnesota Municipal Fund, which has not completed its first fiscal year) paid
The Dreyfus Corporation a monthly management fee at the effective annual rate
of .50 of 1% of the value of the Fund's average daily net assets. From time
to time, The Dreyfus Corporation may waive receipt of its fees and/or
voluntarily assume certain expenses of a Fund, which would have the effect of
lowering the expense ratio of such Fund and increasing yield to investors. No
Fund will pay The Dreyfus Corporation at a later time for any amounts it may
waive, nor will a Fund reimburse The Dreyfus Corporation for any amounts it
may assume.
In allocating brokerage transactions, The Dreyfus Corporation seeks
to obtain the best execution of orders at the most favorable net price.
Subject to this determination, The Dreyfus Corporation may consider, among
other things, the receipt of research services and/or the sale of shares of a
Fund or other funds managed, advised or administered by The Dreyfus
Corporation as factors in the selection of broker-dealers to execute
portfolio transactions for each Fund. See "Portfolio Transactions" in the
Statement of Additional Information.
EXPENSES _ All expenses incurred in the operation of a Fund are borne by the
Fund, except to the extent specifically assumed by The Dreyfus Corporation.
The expenses borne by a Fund include: organizational costs, taxes, interest,
brokerage fees and commissions, if any, fees of Board members who are not
officers, directors, employees or holders of 5% of more of the outstanding
voting securities of The Dreyfus Corporation or any of its affiliates,
Securities and Exchange Commission fees, state Blue Sky qualification fees,
advisory fees, charges of registrars and custodians, transfer and dividend
disbursing agents' fees, outside auditing and legal expenses, costs of
maintaining the Fund's existence, costs attributable to investor services,
costs of preparing and printing prospectuses and statements of additional
information for regulatory purposes and for distribution to existing
shareholders, costs of shareholders' reports and meetings, and any
extraordinary expenses. See "General Information."
[Page 14]
The Dreyfus Corporation may pay the Funds' distributor for
shareholder services from The Dreyfus Corporation's own assets, including
past profits but not including the management fee paid by the Funds. The
Funds' distributor may use part or all of such payments to pay Service Agents
in respect of these services.
DISTRIBUTOR _ Each Fund's distributor is Premier Mutual Fund Services, Inc.
(the "Distributor"), located at 60 State Street, Boston, Massachusetts 02109.
The Distributor's ultimate parent is Boston Institutional Group, Inc.
TRANSFER AND DIVIDEND DISBURSING AGENT AND CUSTODIAN _ Dreyfus Transfer,
Inc., a wholly-owned subsidiary of The Dreyfus Corporation, P.O. Box 9671,
Providence, Rhode Island 02940-9671, is each Fund's Transfer and Dividend
Disbursing Agent (the "Transfer Agent"). The Bank of New York, 90 Washington
Street, New York, New York 10286, is each Fund's Custodian.
HOW TO BUY SHARES
Each Fund's shares may be purchased only by clients of certain
financial institutions (which may include banks), securities dealers
("Selected Dealers"), and other industry professionals such as investment
advisers, accountants and estate planning firms (collectively, "Service
Agents") that have entered into service agreements with the Distributor. For
shareholders who purchase Fund shares from the Distributor, the Distributor
will act as Service Agent. Stock certificates are issued only upon your
written request. No certificates are issued for fractional shares. It is not
recommended that the Municipal Funds be used as a vehicle for Keogh, IRA or
other qualified plans. Each Fund reserves the right to reject any purchase
order.
The minimum initial investment in each Fund is $2,500, or $1,000 if
you are a client of a Service Agent which maintains an omnibus account in the
relevant Fund and has made an aggregate minimum initial purchase in the Fund
for its customers of $2,500. Subsequent investments must be at least $100.
For the Government Money Fund and the Money Fund, however, the minimum
initial investment is $750 for Dreyfus-sponsored Keogh Plans, IRAs (including
regular IRAs, spousal IRAs for a non-working spouse, Roth IRAs, SEP-IRAs and
rollover IRAs) and 403(b)(7) Plans with only one participant and $500 for
Dreyfus-sponsored Education IRAs, with no minimum for subsequent purchases.
The initial investment must be accompanied by the Account Application. For
full-time or part-time employees of The Dreyfus Corporation or any of its
affiliates or subsidiaries, directors of The Dreyfus Corporation, Board
members of a fund advised by The Dreyfus Corporation, including members of
each Fund's Board, or the spouse or minor child of any of the foregoing, the
minimum initial investment is $1,000. For full-time or part-time employees of
The Dreyfus Corporation or any of its affiliates or subsidiaries who elect to
have a portion of their pay directly deposited into their Fund accounts, the
minimum initial investment is $50. The Government Money Fund and the Money
Fund reserve the right to offer Fund shares without regard to minimum
purchase requirements to employees participating in certain qualified and
non-qualified employee benefit plans or other programs where contributions or
account information can be transmitted in a manner and form acceptable to
such Fund. Each Fund reserves the right to vary further the initial and
subsequent investment minimum requirements at any time.
You may purchase Fund shares by check or wire. Checks should be made
payable to "The Dreyfus Family of Funds" or, if for Dreyfus retirement plan
accounts with respect to the Government Money Fund and the Money Fund, to
"The Dreyfus Trust Company, Custodian." Payments to open new accounts which
are mailed should be sent to The Dreyfus Family of Funds, P.O. Box 9387,
Providence, Rhode Island 02940-9387, together with your Account Application
indicating that Class B shares are
[Page 15
being purchased. For subsequent investments, your Fund account number
should appear on the check and an investment slip should be enclosed and sent
to The Dreyfus Family of Funds, P.O. Box 105, Newark, New Jersey 07101-0105.
For Dreyfus retirement plan accounts, both initial and subsequent investments
should be sent to The Dreyfus Trust Company, Custodian, P.O. Box 6427,
Providence, Rhode Island 02940-6427. Neither initial nor subsequent
investments should be made by third party check. Purchase orders may be
delivered in person only to a Dreyfus Financial Center. THESE ORDERS WILL BE
FORWARDED TO THE RELEVANT FUND AND WILL BE PROCESSED ONLY UPON RECEIPT
THEREBY. For the location of the nearest Dreyfus Financial Center, please
call one of the telephone numbers listed under "General Information." Other
purchase procedures may be in effect for clients of certain Service Agents.
Wire payments may be made if your bank account is in a commercial
bank that is a member of the Federal Reserve System or any other bank having
a correspondent bank in New York City. Immediately available funds may be
transmitted by wire to The Bank of New York together with the applicable
Fund's DDA# as shown below, for purchase of Fund shares in your name:
DDA # 8900052414/General Government Securities Money Market Fund, Inc.
DDA # 8900051957/General Money Market Fund, Inc.
DDA # 8900052163/General California Municipal Money Market Fund
DDA # 8900337451/General Minnesota Municipal Money Market Fund
DDA # 8900052376/General Municipal Money Market Fund
DDA # 8900052171/General New York Municipal Money Market Fund
The wire must include your Fund account number (for new accounts, your
Taxpayer Identification Number ("TIN") should be included instead), account
registration and dealer number, if applicable, and must indicate the Class of
shares being purchased. If your initial purchase of Fund shares is by wire,
please call 1-800-645-6561 after completing your wire payment to obtain your
Fund account number. Please include your Fund account number on the Account
Application and promptly mail the Account Application to the Fund, as no
redemptions will be permitted until the Account Application is received. You
may obtain further information about remitting funds in this manner from your
bank. All payments should be made in U.S. dollars and, to avoid fees and
delays, should be drawn only on U.S. banks. A charge will be imposed if any
check used for investment in your account does not clear. Each Fund makes
available to certain large institutions the ability to issue purchase
instructions through compatible computer facilities.
Fund shares also may be purchased through Dreyfus-AUTOMATIC Asset
BuilderRegistration Mark, the Government Direct Deposit Privilege or the
Payroll Savings Plan described under "Shareholder Services." These services
enable you to make regularly scheduled investments and may provide you with a
convenient way to invest for long-term financial goals. You should be aware,
however, that periodic investment plans do not guarantee a profit and will
not protect an investor against loss in a declining market.
Subsequent investments also may be made by electronic transfer of
funds from an account maintained in a bank or other domestic financial
institution that is an Automated Clearing House member. You must direct the
institution to transmit immediately available funds through the Automated
Clearing House to The Bank of New York with instructions to credit your Fund
account. The instructions must specify your Fund account registration and
your Fund account number PRECEDED BY THE DIGITS "1111."
Service Agents may receive different levels of compensation for
selling different Classes of shares. Management understands that some Service
Agents may impose certain conditions on their clients which
[Page 16]
are different from those described in this Prospectus and, to the
extent permitted by applicable regulatory authority, may charge their clients
direct fees. You should consult your Service Agent in this regard.
Fund shares are sold on a continuous basis at the net asset value per
share next determined after an order in proper form and Federal Funds (monies
of member banks within the Federal Reserve System which are held on deposit
at a Federal Reserve Bank) are received by the Transfer Agent or other entity
authorized to receive orders on behalf of the Fund in written or telegraphic
form. If you do not remit Federal Funds, your payment must be converted into
Federal Funds. This usually occurs within one business day of receipt of a
bank wire and within two business days of receipt of a check drawn on a
member bank of the Federal Reserve System. Checks drawn on banks which are
not members of the Federal Reserve System may take considerably longer to
convert into Federal Funds. Prior to receipt of Federal Funds, your money
will not be invested.
Net asset value per share of each Class is computed by dividing the
value of the Fund's net assets represented by such Class (i.e., the value of
its assets less liabilities) by the total number of shares of such Class
outstanding. See "Determination of Net Asset Value" in the Statement of
Additional Information.
Federal regulations require that you provide a certified TIN upon
opening or reopening an account. See "Dividends, Distributions and Taxes" and
the Account Application for further information concerning this requirement.
Failure to furnish a certified TIN to a Fund could subject you to a $50
penalty imposed by the Internal Revenue Service (the "IRS").
GOVERNMENT MONEY FUND AND MONEY FUND _ Each of these Funds determines its
net asset value per share twice each day the New York Stock Exchange or the
Transfer Agent is open for business: as of 5:00 p.m., New York time, and as
of 8:00 p.m., New York time.
If your payments are received in or converted into Federal Funds by
12:00 Noon, New York time, by the Transfer Agent on a business day, you will
receive the dividend declared that day. If your payments are received in or
converted into Federal Funds after 12:00 Noon, New York time, by the Transfer
Agent, you will begin to accrue dividends on the following business day.
Qualified institutions may telephone orders for purchase of Fund
shares of each of these Funds. A telephone order placed with the Distributor
or its designee in New York will become effective at the price determined at
5:00 p.m., New York time, and the shares purchased will receive the dividend
on Fund shares declared on that day, if such order is placed with the
Distributor or its designee in New York by 5:00 p.m., New York time, and
Federal Funds are received by 6:00 p.m., New York time, on that day. A
telephone order placed with the Distributor or its designee in New York after
5:00 p.m., New York time, but by 8:00 p.m., New York time, on a given day
will become effective at the price determined at 8:00 p.m., New York time, on
that day, and the shares purchased will begin to accrue dividends on the next
business day, if Federal Funds are received by 11:00 a.m., New York time, on
the next business day.
The Distributor may pay dealers a fee of up to .5% of the amount
invested through such dealers in each Fund's shares by employees
participating in qualified or non-qualified employee benefit plans or other
programs where (i) the employers or affiliated employers maintaining such
plans or programs have a minimum of 250 employees eligible for participation
in such plans or programs, or (ii) such plan's or program's aggregate
investment in the Dreyfus Family of Funds or certain other products made
available by the Distributor to such plans or programs exceeds $1,000,000
("Eligible Benefit Plans"). Shares of funds in the Dreyfus Family of Funds
then held by Eligible Benefit Plans will be aggregated to determine the fee
payable. The Distributor reserves the right to cease paying these fees at any
time. The
[Page 17]
Distributor will pay such fees from its own funds, other than amounts
received from the Fund, including past profits or any other source available
to it.
MUNICIPAL FUNDS _ Each Municipal Fund determines its net asset value per
share twice each day the New York Stock Exchange or the Transfer Agent is
open for business: as of 12:00 Noon, New York time, and as of 8:00 p.m., New
York time.
If your payments are received in or converted into Federal Funds by
12:00 Noon, New York time, on a business day, you will receive the dividend
declared that day. If your payments are received in or converted into Federal
Funds after 12:00 Noon, New York time, you will begin to accrue dividends on
the following business day.
Qualified institutions may telephone orders for purchase of shares of
each of these Funds. A telephone order placed with the Distributor or its
designee in New York will become effective at the price determined at 12:00
Noon, New York time, on a given day, and the shares purchased will receive
the dividend on Fund shares declared on that day, if the telephone order is
placed with the Distributor or its designee by 12:00 Noon, New York time, and
Federal Funds are received by 4:00 p.m., New York time, on that day. A
telephone order placed with the Distributor or its designee after 12:00 Noon,
New York time, but by 8:00 p.m., New York time, on a given day will become
effective at the price determined at 8:00 p.m., New York time, on that day,
and the shares purchased will begin to accrue dividends on the next business
day, if Federal Funds are received by 11:00 a.m., New York time, on the next
business day.
TELETRANSFER PRIVILEGE _ (CALIFORNIA MUNICIPAL FUND, MINNESOTA MUNICIPAL
FUND AND NEW YORK MUNICIPAL FUND ONLY) _ You may purchase shares (minimum
$500, maximum $150,000 per day) by telephone if you have checked the
appropriate box and supplied the necessary information on the Account
Application or have filed a Shareholder Services Form with the Transfer
Agent. The proceeds will be transferred between the bank account designated
in one of these documents and your Fund account. Only a bank account
maintained in a domestic financial institution which is an Automated Clearing
House member may be so designated. Each of these Funds may modify or
terminate this Privilege at any time or charge a service fee upon notice to
shareholders. No such fee currently is contemplated.
If you have selected the TELETRANSFER Privilege, you may request a
TELETRANSFER purchase of shares by calling 1-800-645-6561 or, if you are
calling from overseas, call 516-794-5452.
SHAREHOLDER SERVICES
The services and privileges described under this heading may not be
available to clients of certain Service Agents and some Service Agents may
impose certain conditions on their clients which are different from those
described in this Prospectus. You should consult your Service Agent in this
regard. In addition, use of the privileges noted below may require that the
proper forms and information be filed with and processed by the Transfer
Agent.
FUND EXCHANGES _ Clients of certain Service Agents may purchase, in exchange
for shares of a Fund, shares of certain other funds managed or administered
by The Dreyfus Corporation, to the extent such shares are offered for sale in
the client's state of residence. These funds have different investment
objectives which may be of interest to you. If you desire to use this
service, you should consult your Service Agent or call 1-800-645-6561 to
determine if it is available and whether any conditions are imposed on its
use.
To request an exchange, you or your Service Agent acting on your
behalf must give exchange instructions to the Transfer Agent in writing or by
telephone. Before any exchange, you must obtain and should review a copy of
the current prospectus of the fund into which the exchange is being made.
[Page 18]
Prospectuses may be obtained by calling 1-800-645-6561. Except in the
case of personal retirement plans, the shares being exchanged must have a
current value of at least $500; furthermore, when establishing a new account
by exchange, the shares 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 ability to issue exchange instructions by telephone is given
to shareholders of each Fund automatically, unless you check the applicable
"No" box on the Account Application, indicating that you specifically refuse
this Privilege. The Telephone Exchange Privilege may be established for an
existing account by written request signed by all shareholders on the
account, by a separate signed Shareholder Services Form, available by calling
1-800-645-6561, or by oral request from any of the authorized signatories on
the account by calling 1-800-645-6561. If you have established the Telephone
Exchange Privilege, you may telephone exchange instructions (including over
The Dreyfus TouchRegistration Mark automated telephone system) by calling
1-800-645-6561. If you are calling from overseas, call 516-794-5452. See "How
to Redeem Shares _ Procedures." Upon an exchange into a new account, the
following shareholder services and privileges, as applicable and where
available, will be automatically carried over to the fund into which the
exchange is made: Telephone Exchange Privilege, Check Redemption Privilege,
Wire Redemption Privilege, Telephone Redemption Privilege, TELETRANSFER
Privilege, and the dividend/capital gain distribution option (except for
Dividend Sweep) selected by the investor.
Shares will be exchanged at the next determined net asset value;
however, a sales load may be charged with respect to exchanges into funds
sold with a sales load. If you are exchanging into a fund that charges a
sales load, you may qualify for share prices which do not include the sales
load or which reflect a reduced sales load, if the shares you are exchanging
were: (a) purchased with a sales load, (b) acquired by a previous exchange
from shares purchased with a sales load, or (c) acquired through reinvestment
of dividends or distributions paid with respect to the foregoing categories
of shares. To qualify, at the time of the exchange you must notify the
Transfer Agent or your Service Agent must notify the Distributor. Any such
qualification is subject to confirmation of your holdings through a check of
appropriate records. See "Shareholder Services" in the Statement of
Additional Information. No fees currently are charged shareholders directly
in connection with exchanges, although each Fund reserves the right, upon not
less than 60 days' written notice, to charge shareholders a nominal
administrative fee in accordance with rules promulgated by the Securities and
Exchange Commission. Each Fund reserves the right to reject any exchange
request in whole or in part. The availability of Fund Exchanges may be
modified or terminated at any time upon notice to shareholders. See
"Dividends, Distributions and Taxes."
DREYFUS AUTO-EXCHANGE PRIVILEGE _ Dreyfus Auto-Exchange Privilege enables
you to invest regularly (on a semi-monthly, monthly, quarterly or annual
basis), in exchange for shares of a Fund, in shares of certain other funds in
the Dreyfus Family of Funds of which you are a shareholder. The amount you
designate, which can be expressed either in terms of a specific dollar or
share amount ($100 minimum), will be exchanged automatically on the first
and/or fifteenth of the month according to the schedule you have selected.
Shares will be exchanged at the then-current net asset value; however, a
sales load may be charged with respect to exchanges into funds sold with a
sales load. See "Shareholder Services" in the Statement of Additional
Information. The right to exercise this Privilege may be modified or canceled
by the Fund or the Transfer Agent. You may modify or cancel your exercise of
this Privilege at any time by mailing written notification to The Dreyfus
Family of Funds, P.O. Box 9671, Providence, Rhode Island 02940-9671. Each Fund
may charge a service fee
[Page 19]
for the use of this Privilege. No such fee currently is contemplated. For
more information concerning this Privilege and the funds in the Dreyfus
Family of Funds eligible to participate in this Privilege, or to obtain an
Auto-Exchange Authorization Form, please call toll free 1-800-645-6561. See
"Dividends, Distributions and Taxes."
DREYFUS-AUTOMATIC ASSET BUILDERRegistration Mark _ Dreyfus-Automatic Asset
Builder permits you to purchase Fund shares (minimum of $100 and maximum of
$150,000 per transaction) at regular intervals selected by you. Fund shares
are purchased by transferring funds from the bank account designated by you.
Only an account maintained at a domestic financial institution which is an
Automated Clearing House member may be so designated. To establish a
Dreyfus-Automatic Asset Builder account, you must file an authorization form
with the Transfer Agent. You may obtain the necessary authorization form from
your Service Agent or by calling 1-800-645-6561. You may cancel your
participation in this Privilege or change the amount of your purchase at any
time by mailing written notification to The Dreyfus Family of Funds, P.O. Box
9671, Providence, Rhode Island 02940-9671, or, if for Dreyfus retirement plan
accounts, to The Dreyfus Trust Company, Custodian, P.O. Box 6427, Providence,
Rhode Island 02940-6427, and the notification will be effective three
business days following receipt. Each Fund may modify or terminate this
Privilege at any time or charge a service fee. No such fee currently is
contemplated.
GOVERNMENT DIRECT DEPOSIT PRIVILEGE _ The Government Direct Deposit
Privilege enables you to purchase Fund shares (minimum of $100 and maximum of
$50,000 per transaction) by having Federal salary, Social Security, or
certain veterans', military or other payments from the Federal government,
automatically deposited into your Fund account. You may deposit as much of
such payments as you elect. To enroll in Government Direct Deposit, you must
file with the Transfer Agent a completed Direct Deposit Sign-Up Form for each
type of payment that you desire to include in this Privilege. The appropriate
form may be obtained from your Service Agent or by calling 1-800-645-6561.
Death or legal incapacity will terminate your participation in this
Privilege. You may elect at any time to terminate your participation by
notifying in writing the appropriate Federal agency. Further, a Fund may
terminate your participation upon 30 days' notice to you.
PAYROLL SAVINGS PLAN _ The Payroll Savings Plan permits you to purchase Fund
shares (minimum of $100 per transaction) automatically on a regular basis.
Depending upon your employer's direct deposit program, you may have part or
all of your paycheck transferred to your existing Dreyfus account
electronically through the Automated Clearing House system at each pay
period. To establish a Payroll Savings Plan account, you must file an
authorization form with your employer's payroll department. Your employer
must complete the reverse side of the form and return it to The Dreyfus
Family of Funds, P.O. Box 9671, Providence, Rhode Island 02940-9671. You may
obtain the necessary authorization form by calling 1-800-645-6561. You may
change the amount of purchase or cancel the authorization only by written
notification to your employer. It is the sole responsibility of your
employer, not the Distributor, The Dreyfus Corporation, the Fund, the
Transfer Agent or any other person, to arrange for transactions under the
Payroll Savings Plan. Each Fund may modify or terminate this Privilege at any
time or charge a service fee. No such fee currently is contemplated.
DIVIDEND OPTIONS _ Dividend Sweep enables you to invest automatically
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 you are a
shareholder. Shares of the other fund will be purchased at the then-current
net asset value; however, a sales load may be charged with respect to
investments in shares of a fund
[Page 20]
sold with a sales load. If you are investing in a fund that charges a sales
load, you may qualify for share prices which do not include the sales load or
which reflect a reduced sales load. If you are investing in a fund that
charges a contingent deferred sales charge, the shares purchased will be
subject to the contingent deferred sales charge, if any, applicable to the
purchased shares. See "Shareholder Services" in the Statement of Additional
Information. Dividend ACH permits you to transfer electronically dividends or
dividends and capital gain distributions, if any, from a Fund to a designated
bank account. Only an account maintained at a domestic financial institution
which is an Automated Clearing House member may be so designated. Banks may
charge a fee for this service.
For more information concerning these privileges or to request a
Dividend Options Form, please call toll free 1-800-645-6561. You may cancel
these privileges by mailing written notification to The Dreyfus Family of
Funds, P.O. Box 9671, Providence, Rhode Island 02940-9671. To select a new
fund after cancellation, you must submit a new Dividend Options Form.
Enrollment in or cancellation of these privileges is effective three business
days following receipt. These privileges are available only for existing
accounts and may not be used to open new accounts. Minimum subsequent
investments do not apply for Dividend Sweep. Each Fund may modify or
terminate these privileges at any time or charge a service fee. No such fee
currently is contemplated. Shares held under Keogh Plans or IRAs are not
eligible for Dividend Sweep.
QUARTERLY DISTRIBUTION PLAN _ The Quarterly Distribution Plan permits you to
receive quarterly payments from a Fund consisting of proceeds from the
redemption of shares purchased for your account through the automatic
reinvestment of dividends declared on your account during the preceding
calendar quarter. You may open a Quarterly Distribution Plan by submitting a
request to the Transfer Agent. The Quarterly Distribution Plan may be ended
at any time by you, the Fund or the Transfer Agent. Shares for which
certificates have been issued must be presented before redemption under the
Quarterly Distribution Plan.
AUTOMATIC WITHDRAWAL PLAN _ The Automatic Withdrawal Plan permits you to
request withdrawal of a specified dollar amount (minimum of $50) on either a
monthly or quarterly basis if you have a $5,000 minimum account. An Automatic
Withdrawal Plan may be established by filing an Automatic Withdrawal Plan
application with the Transfer Agent or by oral request from any of the
authorized signatories on the account by calling 1-800-645-6561. The
Automatic Withdrawal Plan may be ended at any time by you, the Fund or the
Transfer Agent. Shares for which certificates have been issued may not be
redeemed through the Automatic Withdrawal Plan.
RETIREMENT PLANS (GOVERNMENT MONEY FUND AND MONEY FUND ONLY) _ Each of these
Funds offers a variety of 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. You 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 (except SEP-IRAs), please call 1-800-645-6561; or for SEP-IRAs, 401(k)
Salary Reduction Plans and 403(b)(7) Plans, please call 1-800-322-7880.
HOW TO REDEEM SHARES
GENERAL
You may request redemption of your shares at any time. Redemption
requests should be transmitted to the Transfer Agent as described below. When
a request is received in proper form by the Transfer
[Page 21]
Agent or other entity authorized to receive orders on behalf of the
Fund, your Fund will redeem the shares at the next determined net asset
value.
None of the Funds imposes a charge when shares are redeemed. Service
Agents may charge their clients a fee for effecting redemptions of Fund
shares. Any certificates representing Fund shares being redeemed must be
submitted with the redemption request. The value of the shares redeemed may
be more or less than their original cost, depending upon the respective
Fund's then-current net asset value.
Each Fund ordinarily will make payment for all shares redeemed within
seven days after receipt by the Transfer Agent of a redemption request in
proper form, except as provided by the rules of the Securities and Exchange
Commission. HOWEVER, IF YOU HAVE PURCHASED FUND SHARES BY CHECK, BY
TELETRANSFER PRIVILEGE OR THROUGH DREYFUS-AUTOMATIC ASSET BUILDERRegistration
Mark AND SUBSEQUENTLY SUBMIT A WRITTEN REDEMPTION REQUEST TO THE TRANSFER
AGENT, YOUR REDEMPTION WILL BE EFFECTIVE AND THE REDEMPTION PROCEEDS WILL BE
TRANSMITTED TO YOU PROMPTLY UPON BANK CLEARANCE OF YOUR PURCHASE CHECK,
TELETRANSFER PURCHASE OR DREYFUS-AUTOMATIC ASSET BUILDER ORDER, WHICH MAY
TAKE UP TO EIGHT BUSINESS DAYS OR MORE. IN ADDITION, EACH FUND WILL NOT HONOR
REDEMPTION CHECKS UNDER THE CHECK REDEMPTION PRIVILEGE, AND WILL REJECT
REQUESTS TO REDEEM SHARES BY WIRE OR TELEPHONE OR PURSUANT TO THE TELETRANSFER
PRIVILEGE, FOR A PERIOD OF EIGHT BUSINESS DAYS AFTER RECEIPT BY THE TRANSFER
AGENT OF THE PURCHASE CHECK, THE TELETRANSFER PURCHASE OR THE
DREYFUS-AUTOMATIC ASSET BUILDER ORDER AGAINST WHICH SUCH REDEMPTION IS
REQUESTED. THESE PROCEDURES WILL NOT APPLY IF YOUR SHARES WERE PURCHASED BY
WIRE PAYMENT, OR IF YOU OTHERWISE HAVE A SUFFICIENT COLLECTED BALANCE IN YOUR
ACCOUNT TO COVER THE REDEMPTION REQUEST. PRIOR TO THE TIME ANY REDEMPTION IS
EFFECTIVE, DIVIDENDS ON SUCH SHARES WILL ACCRUE AND BE PAYABLE, AND YOU WILL
BE ENTITLED TO EXERCISE ALL OTHER RIGHTS OF BENEFICIAL OWNERSHIP. Fund shares
will not be redeemed until the Transfer Agent has received your Account
Application.
Each Fund reserves the right to redeem your account at its option
upon not less than 45 days' written notice if your account's net asset value
is $500 or less and remains so during the notice period.
PROCEDURES
You may redeem Fund shares by using the regular redemption procedure
through the Transfer Agent, or through the Check Redemption Privilege or
Telephone Redemption Privilege, which are granted automatically unless you
specifically refuse them by checking the applicable "No" box on the Account
Application. The Check Redemption Privilege and Telephone Redemption
Privilege may be established for an existing account by a separate signed
Shareholder Services Form, or, with respect to the Telephone Redemption
Privilege, by oral request from any of the authorized signatories on the
account by calling 1-800-645-6561. You also may redeem shares through the Wire
Redemption Privilege or, with respect to the California Municipal Fund, the
Minnesota Municipal Fund and the New York Municipal Fund, the TELETRANSFER
Privilege, if you have checked the appropriate box and supplied the necessary
information on the Account Application or have filed a Shareholder Services
Form with the Transfer Agent. If you are a client of a Selected Dealer, you
may redeem Fund shares through the Selected Dealer. Other redemption
procedures may be in effect for clients of certain Service Agents. Each Fund
makes available to certain large institutions the ability to issue redemption
instructions through compatible computer facilities. Each Fund reserves the
right to refuse any request made by wire or telephone, including requests
made shortly after a change of address, and may limit the amount involved or
the number of such requests. Each Fund may modify or terminate any redemption
privilege at any time or charge a service fee upon notice to shareholders.
[Page 22]
No such fee currently is contemplated. Shares held under
Keogh Plans, IRAs or other retirement plans, and shares for which
certificates have been issued, are not eligible for the Check Redemption,
Wire Redemption, Telephone Redemption or TELETRANSFER Privilege.
The Telephone Redemption Privilege or Telephone Exchange Privilege
authorizes the Transfer Agent to act on telephone instructions (including
over The Dreyfus TouchRegistration Mark automated telephone system) from any
person representing himself or herself to be you, or a representative of your
Service Agent, and reasonably believed by the Transfer Agent to be genuine.
Each Fund will require the Transfer Agent to employ reasonable procedures,
such as requiring a form of personal identification, to confirm that
instructions are genuine and, if it does not follow such procedures, the Fund
or the Transfer Agent may be liable for any losses due to unauthorized or
fraudulent instructions. Neither a Fund nor the Transfer Agent will be liable
for following telephone instructions reasonably believed to be genuine.
During times of drastic economic or market conditions, you may
experience difficulty in contacting the Transfer Agent by telephone to
request a redemption or exchange of Fund shares. In such cases, you should
consider using the other redemption procedures described herein. Use of these
other redemption procedures may result in your redemption request being
processed at a later time than it would have been if telephone redemption had
been used.
REGULAR REDEMPTION _ Under the regular redemption procedure, you may redeem
shares by written request mailed to The Dreyfus Family of Funds, P.O. Box
9671, Providence, Rhode Island 02940-9671, or, if for Dreyfus retirement plan
accounts, to The Dreyfus Trust Company, Custodian, P.O. Box 6427, Providence,
Rhode Island 02940-6427. Redemption requests may be delivered in person only
to a Dreyfus Financial Center. For the location of the nearest Dreyfus
Financial Center, please call one of the telephone numbers listed under
"General Information." THESE REQUESTS WILL BE FORWARDED TO THE FUND AND WILL
BE PROCESSED ONLY UPON RECEIPT THEREBY. Redemption requests must be signed by
each shareholder, including each owner of a joint account, and each signature
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. If
you have questions with respect to signature-guarantees, please call one of
the telephone numbers listed under "General Information."
Redemption proceeds of at least $1,000 will be wired to any member
bank of the Federal Reserve System in accordance with a written
signature-guaranteed request.
CHECK REDEMPTION PRIVILEGE _ You may write Redemption Checks drawn on your
Fund account. Redemption Checks may be made payable to the order of any
person in the amount of $500 or more. Redemption Checks should not be used to
close your account. Redemption Checks are free, but the Transfer Agent will
impose a fee for stopping payment of a Redemption Check upon your request or
if the Transfer Agent cannot honor a Redemption Check due to insufficient
funds or other valid reason. You should date your Redemption Checks with the
current date when you write them. Please do not postdate your Redemption
Checks. If you do, the Transfer Agent will honor, upon presentment, even if
presented before the date of the check, all postdated Redemption Checks which
are dated within six months of presentment for payment, if they are otherwise
in good order. If you hold shares in a Dreyfus-sponsored IRA account, you may
be permitted to make withdrawals from your IRA account using
[Page 23]
checks furnished to you by The Dreyfus Trust Company. The Check Redemption
Privilege is granted automatically unless you refuse it.
WIRE REDEMPTION PRIVILEGE _ You may request by wire, telephone or letter
that redemption proceeds (minimum $1,000) be wired to your account at a bank
which is a member of the Federal Reserve System, or a correspondent bank if
your bank is not a member. Holders of jointly registered Fund or bank
accounts may have redemption proceeds of not more than $250,000 wired within
any 30-day period. You may telephone redemption requests by calling
1-800-645-6561 or, if you are calling from overseas, call 516-794-5452. The
Statement of Additional Information sets forth instructions for transmitting
redemption requests by wire.
TELEPHONE REDEMPTION PRIVILEGE _ You may request by telephone that
redemption proceeds (maximum $150,000 per day) be paid by check and mailed to
your address. You may telephone redemption instructions by calling
1-800-645-6561 or, if you are calling from overseas, call 516-794-5452. The
Telephone Redemption Privilege is granted automatically unless you refuse it.
TELETRANSFER PRIVILEGE (CALIFORNIA MUNICIPAL FUND, MINNESOTA MUNICIPAL FUND
AND NEW YORK MUNICIPAL FUND ONLY) _ You may request by telephone that
redemption proceeds (minimum $500 per day) be transferred between your Fund
account and your bank account. Only a bank account maintained in a domestic
financial institution which is an Automated Clearing House member may be
designated. Redemption proceeds will be on deposit in your account at an
Automated Clearing House member bank ordinarily two days after receipt of the
redemption request. Holders of jointly registered Fund or bank accounts may
redeem through the TELETRANSFER Privilege for transfer to their bank account
not more than $250,000 within any 30-day period.
If you have selected the TELETRANSFER Privilege, you may request a
TELETRANSFER redemption of shares by calling 1-800-645-6561 or, if you are
calling from overseas, call 516-794-5452.
REDEMPTION THROUGH A SELECTED DEALER _ If you are a customer of a Selected
Dealer, you may make redemption requests to your Selected Dealer. If the
Selected Dealer transmits the redemption request so that it is received by
the Transfer Agent or its designee by 12:00 Noon, New York time, with respect
to the Municipal Funds, or 5:00 p.m., New York time, with respect to the
Government Money Fund and the Money Fund on a business day, the proceeds of
the redemption ordinarily will be transmitted in Federal Funds on the same
day and the shares will not receive the dividend declared on that day. If a
redemption request is received after such time, but by 8:00 p.m., New York
time, the redemption request will be effective on that day, the shares will
receive the dividend declared on that day and the proceeds of redemption
ordinarily will be transmitted in Federal Funds on the next business day. If
a redemption request is received after 8:00 p.m., New York time, the
redemption request will be effective on the next business day. It is the
responsibility of the Selected Dealer to transmit a request so that it is
received in a timely manner. The proceeds of the redemption are credited to
your account with the Selected Dealer. See "How to Buy Shares" for a
discussion of additional conditions or fees that may be imposed upon
redemption.
DISTRIBUTION PLAN
Class B shares of each Fund are subject to a Distribution Plan
adopted pursuant to Rule 12b-1 under the 1940 Act. Under each Distribution
Plan, the Fund directly bears the costs of preparing, printing and
distributing prospectuses and statements of additional information and of
implementing and operating the Distribution Plan. In addition, each Fund
reimburses the Distributor for payments made to third parties for
distributing (within the meaning of Rule 12b-1) Class B shares at an
aggregate annual rate of up to .20 of 1% of the value of the Fund's average
daily net assets attributable to Class B.
[Page 24]
SHAREHOLDER SERVICES PLAN
Each Fund 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 a fee at the annual rate of
.25 of 1% of the value of the Fund's average daily net assets attributable to
Class B. The services provided may include personal services relating to
shareholder accounts, such as answering shareholder inquiries regarding the
Fund and providing reports and other information, and services related to the
maintenance of shareholder accounts. Under each Fund's Shareholder Services
Plan, the Distributor may make payments to Service Agents in respect of these
services. The Distributor determines the amounts to be paid to Service
Agents.
DIVIDENDS, DISTRIBUTIONS AND TAXES
Each Fund ordinarily declares dividends from its net investment
income on each day the New York Stock Exchange or, for the Government Money
Fund and the Money Fund only, the Transfer Agent is open for business. The
Fund's earnings for Saturdays, Sundays and holidays are declared as dividends
on the preceding business day. Dividends usually are paid on the last
calendar day of each month and automatically are reinvested in additional
shares at net asset value or, at your option, paid in cash. If you redeem all
shares in your account at any time during the month, all dividends to which
you are entitled will be paid to you along with the proceeds of the
redemption. If you are an omnibus accountholder and indicate in a partial
redemption request that a portion of any accrued dividends to which such
account is entitled belongs to an underlying accountholder who has redeemed
all shares in his or her account, such portion of the accrued dividends will
be paid to you along with the proceeds of the redemption. Distributions from
net realized securities gains, if any, generally are declared and paid once a
year, but each Fund may make distributions on a more frequent basis to comply
with the distribution requirements of the Code, in all events in a manner
consistent with the provisions of the 1940 Act. No Fund will make
distributions from net realized securities gains unless capital loss
carryovers, if any, have been utilized or have expired. You may choose
whether to receive distributions in cash or to reinvest in additional shares
at net asset value. If you elect to receive dividends and distributions in
cash, and your dividend or distribution check is returned to the Fund as
undeliverable or remains uncashed for six months, the Fund reserves the right
to reinvest such dividends or distributions and all future dividends and
distributions payable to you in additional Fund shares at net asset value. No
interest will accrue on amounts represented by uncashed distribution or
redemption checks. All expenses are accrued daily and deducted before
declaration of dividends to investors. Dividends paid by each Class will be
calculated at the same time and in the same manner and will be of the same
amount, except that the expenses attributable solely to a Class will be borne
exclusively by such Class.
Dividends paid by each Municipal Fund derived from Taxable
Investments, and dividends paid by each other Fund derived from interest,
together with distributions from any net realized short-term securities gains
and all or a portion of any gains realized from the sale or other disposition
of certain market discount bonds, are subject to Federal income tax as
ordinary income, whether received in cash or reinvested in additional Fund
shares. Distributions from net realized long-term securities gains, if any,
will be taxable as long-term capital gains for Federal income tax purposes if
you are a citizen or resident of the United States. The Code provides that an
individual generally will be taxed on his or her net capital gain at a
maximum rate of 28% with respect to capital gain from securities held for
more than one year but not more than 18 months and at a maximum rate of 20%
with respect to capital gain from securities held for more
[Page 25]
than 18 months. Under the Code, interest on indebtedness incurred or
continued to purchase or carry Fund shares which is deemed to relate to
exempt-interest dividends is not deductible.
Except for dividends from Taxable Investments, it is anticipated that
substantially all dividends paid by each Municipal Fund will not be subject
to Federal income tax and, as to the California Municipal Fund, State of
California income taxes, as to the Minnesota Municipal Fund, State of
Minnesota income taxes, and as to the New York Municipal Fund, New York State
and New York City income taxes. Although all or a substantial portion of the
dividends paid by each Municipal Fund may be excluded by shareholders from
their gross income for Federal income tax purposes, each Municipal Fund may
purchase specified private activity bonds, the interest from which may be (i)
a preference item for purposes of the alternative minimum tax, or (ii) a
factor in determining the extent to which a shareholder's Social Security
benefits are taxable. If a Municipal Fund purchases such securities, the
portion of the Fund's dividends related thereto will not necessarily be tax
exempt to an investor who is subject to the alternative minimum tax and/or
tax on Social Security benefits and may cause an investor to be subject to
such taxes.
Dividends and distributions attributable to interest from direct
obligations of the United States and paid by the Government Money Fund and
the Money Fund to individuals currently are not subject to tax in most
states. Dividends and distributions attributable to interest from other
securities in which the Government Money Fund and the Money Fund may invest
may be subject to state tax. Each of these Funds intends to provide
shareholders with a statement which sets forth the percentage of dividends
and distributions paid by the Fund that is attributable to interest income
from direct obligations of the United States.
Taxable dividends derived from net investment income, together with
distributions from net realized short-term securities gains and all or a
portion of any gains realized from the sale or other disposition of certain
market discount bonds, paid by a Fund to a foreign investor generally are
subject to U.S. nonresident withholding taxes at the rate of 30%, unless the
foreign investor claims the benefit of a lower rate specified in a tax
treaty. Distributions from net realized long-term securities gains paid by a
Fund to a foreign investor generally will not be subject to U.S. nonresident
withholding tax. However, such distributions may be subject to backup
withholding, as described below, unless the foreign investor certifies his
non-U.S. residency status.
Notice as to the tax status of your dividends and distributions will
be mailed to you annually. You also will receive periodic summaries of your
account which will include information as to dividends and distributions from
securities gains, if any, paid during the year. For each Municipal Fund,
these statements will set forth the dollar amount of income exempt from
Federal tax and, as to the California Municipal Fund, State of California
income taxes, as to the Minnesota Municipal Fund, State of Minnesota income
taxes, and as to the New York Municipal Fund, New York State and New York
City income taxes, and the dollar amount, if any, subject to such tax. These
dollar amounts will vary depending upon the size and length of time of the
investor's investment in the Fund. If a Municipal Fund pays dividends derived
from taxable income, it intends to designate as taxable the same percentage
of the day's dividend as the actual taxable income earned on that day bears
to total income earned on that day. Thus, the percentage of the dividend
designated as taxable, if any, may vary from day to day.
The exchange of shares of one fund for shares of another is treated
for Federal income tax purposes as a sale of the shares given in exchange by
the shareholder and, therefore, an exchanging shareholder may realize a
taxable gain or loss.
[Page 26]
Federal regulations generally require each Fund to withhold ("backup
withholding") and remit to the U.S. Treasury 31% of dividends and
distributions from net realized securities gains of the Fund paid to a
shareholder if such shareholder fails to certify either that the TIN
furnished in connection with opening an account is correct, or that such
shareholder has not received notice from the IRS of being subject to backup
withholding as a result of a failure to properly report taxable dividend or
interest income on a Federal income tax return. Furthermore, the IRS may
notify a Fund to institute backup withholding if the IRS determines a
shareholder's TIN is incorrect or if a shareholder has failed to properly
report taxable dividend and interest income on a Federal income tax return.
A TIN is either the Social Security number, IRS individual taxpayer
identification number, or employer identification number of the record owner
of the account. Any tax withheld as a result of backup withholding does not
constitute an additional tax imposed on the record owner of the account, and
may be claimed as a credit on the record owner's Federal income tax return.
Management believes that each Fund (except the Minnesota Municipal
Fund, which has not completed its first fiscal year) has qualified for the
fiscal year ended November 30, 1997 as a "regulated investment company" under
the Code. Each Fund intends to continue to so qualify if such qualification
is in the best interests of its shareholders. It is expected that the
Minnesota Municipal Fund will qualify as a "regulated investment company"
under the Code so long as such qualification is in the best interests of its
shareholders. Qualification as a regulated investment company relieves the
Fund of any liability for Federal income tax to the extent its earnings are
distributed in accordance with applicable provisions of the Code. Each Fund
is subject to a non-deductible 4% excise tax, measured with respect to
certain undistributed amounts of taxable investment income and capital gains.
You should consult your tax adviser regarding specific questions as
to Federal, state and local taxes.
GENERAL INFORMATION
The Minnesota Municipal Fund and the National Municipal Fund are
separate series of the General Municipal Money Market Funds, Inc. (the
"Company"), an open-end, management investment company. Each other Fund is a
separate open-end, management investment company. The Government Money Fund,
the Company and the Money Fund were incorporated under Maryland law on April
8, 1982, April 8, 1982 and May 15, 1981, respectively, and commenced
operations on February 7, 1983, December 21, 1983 and February 8, 1982,
respectively. Before April 30, 1998, the Company's name was General Municipal
Money Market Fund, Inc. and, before October 6, 1990, its name was General Tax
Exempt Money Market Fund, Inc. The Government Money Fund, the Money Fund and
the Company are authorized to issue 16 billion shares (15 billion Class A and
1 billion Class B), 25 billion shares (15 billion Class A and 10 billion
Class B), and 20 billion shares (15 billion Class A and 1 billion Class B
allocated to the National Municipal Fund, and 2 billion Class A and 2 billion
Class B allocated to the Minnesota Municipal Fund), respectively, par value
$.01 per share.
The California Municipal Fund and the New York Municipal Fund were
organized as unincorporated business trusts under the laws of the
Commonwealth of Massachusetts pursuant to separate Agreements and
Declarations of Trust (each, a "Trust Agreement") and commenced operations on
March 10, 1987 and December 2, 1986, respectively. Before March 19, 1990, the
California Municipal Fund's name was General California Tax Exempt Money
Market Fund. Before January 29, 1990, the New York Municipal Fund's name was
General New York Tax Exempt Money Market Fund. Each of these Funds is
authorized to issue an unlimited number of shares of beneficial interest,
[Page 27]
par value $.001 per share. Under Massachusetts law, shareholders
could, under certain circumstances, be held personally liable for the
obligations of the Fund. However, each Trust Agreement disclaims shareholder
liability for acts or obligations of the Fund and requires that notice of
such disclaimer be given in each agreement, obligation or instrument entered
into or executed by the Fund or its Trustees. Each Trust Agreement provides
for indemnification from the Fund's property for all losses and expenses of
any shareholder held personally liable for the obligations of the Fund. Thus,
the risk of a shareholder incurring financial loss on account of shareholder
liability is limited to circumstances in which the Fund itself would be
unable to meet its obligations, a possibility which management believes is
remote. Upon payment of any liability incurred by the Fund, the shareholder
paying such liability will be entitled to reimbursement from the general
assets of the Fund. Each of these Funds intends to conduct its operations in
such a way so as to avoid, as far as possible, ultimate liability of the
shareholders for liabilities of the Fund.
Each Fund's shares are classified into two classes _ Class A and
Class B. Each share has one vote and shareholders will vote in the aggregate
and not by class except as otherwise required by law.
Unless otherwise required by the 1940 Act, ordinarily it will not be
necessary for any Fund to hold annual meetings of shareholders. As a result,
Fund shareholders may not consider each year the election of Board members or
the appointment of auditors. However, the holders of at least 10% of a Fund's
shares outstanding and entitled to vote may require such Fund to hold a
special meeting of shareholders for purposes of removing a Board member from
office. Fund shareholders may remove a Board member by the affirmative vote
of a majority, in the case of the Government Money Fund, the Company and the
Money Fund, or two-thirds, in the case of the California Municipal Fund and
the New York Municipal Fund, of the Fund's outstanding voting shares. In
addition, a Fund's Board will call a special meeting of shareholders for the
purpose of electing Board members if, at any time, less than a majority of
the Board members then holding office have been elected by shareholders.
The Transfer Agent maintains a record of your ownership and sends
confirmations and statements of account.
Shareholder inquiries may be made to your Service Agent or by writing
to a Fund at 144 Glenn Curtiss Boulevard, Uniondale, New York 11556-0144, or
by calling toll free 1-800-242-8671. In New York City, call 1-718-895-1396;
outside the U.S., call 516-794-5452.
Although each Fund is offering only its own shares, it is possible
that a Fund might become liable for any misstatement in this Prospectus about
any other Fund. Each Fund's Board has considered this factor in approving the
use of this combined Prospectus.
GENERAL MUNICIPAL MONEY MARKET FUNDS, INC. _ The Company is a series fund,
which is a mutual fund divided into separate portfolios, each of which is
treated as a separate entity for certain matters under the 1940 Act and for
other purposes. A shareholder of one portfolio is not deemed to be a
shareholder of any other portfolio. To date, the Company's Board has
authorized the creation of two series of shares _ General Municipal Money
Market Fund and General Minnesota Municipal Money Market Fund. All
consideration received by the Company for shares of one of the portfolios and
all assets in which such consideration is invested will belong to that
portfolio (subject only to the rights of creditors of the Company) and will be
subject to the liabilities related thereto. The income attributable to, and
the expenses of, one portfolio are treated separately from those of the other
portfolio. Expenses attributable
[Page 28]
to a portfolio are charged against the assets of that portfolio; other
expenses of the Company are allocated among the Company's portfolios on the
basis determined by the Company's Board, including, but not limited to,
proportionately in relation to the net assets of each portfolio. The Company
has the ability to create, from time to time, new series without shareholder
approval.
[Page 29]
APPENDIX
INVESTMENT TECHNIQUES
Borrowing Money _ Each Fund may borrow money from banks for temporary or
emergency (not leveraging) purposes in an amount up to 15% of the value of
its total assets (including the amount borrowed) valued at 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 a Fund's
total assets, the Fund will not make any additional investments.
FORWARD COMMITMENTS (MUNICIPAL FUNDS) _ Each Municipal Fund may purchase
Municipal Obligations and other securities on a forward commitment or
when-issued basis, which means that delivery and payment take place a number
of days after the date of the commitment to purchase. The payment obligation
and the interest rate receivable on a forward commitment or when-issued
security are fixed when the Fund enters into the commitment, but the Fund
does not make payment until it receives delivery from the counterparty. The
Fund will commit to purchase such securities only with the intention of
actually acquiring the securities, but the Fund may sell these securities
before the settlement date if it is deemed advisable. The Fund will set aside
in a segregated account permissible liquid assets at least equal at all times
to the amount of the commitments.
CERTAIN PORTFOLIO SECURITIES
U.S. GOVERNMENT SECURITIES (GOVERNMENT MONEY FUND AND MONEY FUND) _ Each of
these Funds may invest in securities issued or guaranteed by the U.S.
Government or its agencies or instrumentalities, which include U.S. Treasury
securities that 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 Treasury;
others by discretionary 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 currently 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.
REPURCHASE AGREEMENTS (GOVERNMENT MONEY FUND AND MONEY FUND) _ Each of these
Funds may enter into repurchase agreements with certain banks or non-bank
dealers. In a repurchase agreement, the Fund buys, and the seller agrees to
repurchase, a security at a mutually agreed upon time and price (usually
within seven days). The repurchase agreement thereby determines the yield
during the purchaser's holding period, while the seller's obligation to
repurchase is secured by the value of the underlying security. Repurchase
agreements could involve risks in the event of a default or insolvency of the
other party to the agreement, including possible delays or restrictions upon
the Fund's ability to dispose of the underlying securities.
BANK OBLIGATIONS (MONEY FUND) _ The Fund may purchase certificates of
deposit, time deposits, bankers' acceptances and other short-term obligations
issued by domestic banks, foreign subsidiaries or foreign branches of
domestic banks, domestic and foreign branches of foreign banks, and thrift
institutions, savings and loan associations and other banking institutions.
With respect to such securities issued by foreign subsidiaries or foreign
branches of domestic banks, and domestic and foreign branches of foreign
banks, the Fund may be subject to additional investment risks that are
different in some respects
[Page 30]
from those incurred by a fund which invests only in debt obligations of U.S.
domestic issuers. See "Description of the Funds _ Investment Considerations
and Risks _ Foreign Securities."
Certificates of deposit are negotiable certificates evidencing 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. 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 the drawer to
pay the face amount of the instrument upon maturity. The other short-term
obligations may include uninsured, direct obligations bearing fixed, floating
or variable interest rates.
COMMERCIAL PAPER (MONEY FUND) _ The Fund may purchase commercial paper
consisting of short-term, unsecured promissory notes issued to finance
short-term credit needs. The commercial paper purchased by the Fund will
consist only of direct obligations issued by domestic and foreign entities.
The other corporate obligations in which the Fund may invest consist of high
quality, U.S. dollar denominated short-term bonds and notes (including
variable amount master demand notes) issued by domestic and foreign
corporations, including banks.
FLOATING AND VARIABLE RATE OBLIGATIONS (MONEY FUND) _ The Fund may purchase
floating and variable rate demand notes and bonds, which are 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. Variable rate demand notes include master demand notes which are
obligations that permit the Fund to invest fluctuating amounts, at varying
rates of interest, pursuant to direct arrangements between the Fund, as
lender, and the borrower. These obligations permit daily changes in the
amounts borrowed. Because these obligations are direct lending arrangements
between the lender and borrower, it is not contemplated that such instruments
generally will be traded, and there generally is no established secondary
market for these obligations, although they are redeemable at face value,
plus accrued interest. Accordingly, where these obligations are not secured
by letters of credit or other credit support arrangements, the Fund's right
to redeem is dependent on the ability of the borrower to pay principal and
interest on demand.
PARTICIPATION INTERESTS (MONEY FUND) _ The Fund may purchase from financial
institutions participation interests in securities in which the Fund may
invest. A participation interest gives the Fund an undivided interest in the
security in the proportion that the Fund's participation interest bears to
the total principal amount of the security. These instruments may have fixed,
floating or variable rates of interest, with remaining maturities of 13
months or less. If the participation interest is unrated, or has been given a
rating below that which is permissible for purchase by the Fund, the
participation interest will be backed by an irrevocable letter of credit or
guarantee of a bank, or the payment obligation otherwise will be
collateralized by U.S. Government securities, or, in the case of unrated
participation interests, The Dreyfus Corporation must have determined that
the instrument is of comparable quality to those instruments in which the
Fund may invest.
ASSET-BACKED SECURITIES (MONEY FUND) _ The Fund may purchase asset-backed
securities, which are securities issued by special purpose entities whose
primary assets consist of a pool of mortgages, loans, receivables or other
assets. Payment of principal and interest may depend largely on the cash
[Page 31]
flows generated by the assets backing the securities and, in certain cases,
supported by letters of credit, surety bonds or other forms of credit or
liquidity enhancements. The value of these asset-backed securities also may
be affected by the creditworthiness of the servicing agent for the pool of
assets, the originator of the loans or receivables or the financial
institution providing the credit support.
MUNICIPAL OBLIGATIONS (MUNICIPAL FUNDS) _ Each Municipal Fund purchases
Municipal Obligations. Municipal Obligations generally include debt
obligations issued to obtain funds for various public purposes as well as
certain industrial development bonds issued by or on behalf of public
authorities. Municipal Obligations are classified as general obligation
bonds, revenue bonds and notes. General obligation bonds are secured by the
issuer's pledge of its faith, credit and taxing power for the payment of
principal and interest. Revenue bonds are payable from the revenue derived
from a particular facility or class of facilities or, in some cases, from the
proceeds of a special excise or other specific revenue source, but not from
the general taxing power. Tax exempt industrial development bonds, in most
cases, are revenue bonds that generally do not carry the pledge of the credit
of the issuing municipality, but generally are guaranteed by the corporate
entity on whose behalf they are issued. Notes are short-term instruments
which are obligations of the issuing municipalities or agencies and are sold
in anticipation of a bond sale, collection of taxes or receipt of other
revenues. Municipal Obligations include municipal lease/purchase agreements
which are similar to installment purchase contracts for property or equipment
issued by municipalities.
CERTAIN TAX EXEMPT OBLIGATIONS (MUNICIPAL FUNDS) _ Each Municipal Fund may
purchase floating and variable rate demand notes and bonds, which 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. Variable rate demand notes include master demand
notes which are obligations that permit the Fund to invest fluctuating
amounts, at varying rates of interest, pursuant to direct arrangements
between the Fund, as lender, and the borrower. These obligations permit daily
changes in the amount borrowed. Frequently, such obligations are secured by
letters of credit or other credit support arrangements provided by banks.
Changes in the credit quality of banks and other financial institutions that
provide such credit or liquidity enhancements to the Fund's portfolio
securities could cause losses to the Fund and affect its share price. Because
these obligations are direct lending arrangements between the lender and
borrower, it is not contemplated that such instruments generally will be
traded, and there generally is no established secondary market for these
obligations, although they are redeemable at face value plus accrued
interest. Accordingly, where these obligations are not secured by letters of
credit or other credit support arrangements, the Fund's right to redeem is
dependent on the ability of the borrower to pay principal and interest on
demand. Each obligation purchased by the Fund will meet the quality criteria
established for the purchase of Municipal Obligations.
TAX EXEMPT PARTICIPATION INTERESTS (MUNICIPAL FUNDS) _ Each Municipal Fund
may purchase from financial institutions participation interests in Municipal
Obligations (such as industrial development bonds and municipal
lease/purchase agreements). A participation interest gives the Fund an
undivided interest in the Municipal Obligation in the proportion that the
Fund's participation interest bears to the total principal amount of the
Municipal Obligation. These instruments may have fixed, floating or variable
rates of interest, with remaining maturities of 13 months or less. If the
participation interest is unrated or has been given a rating below that which
otherwise is permissible for purchase by the Fund, it will be backed by an
irrevocable letter of credit or guarantee of a bank that the Fund's Board has
[Page 32]
determined meets prescribed quality standards for banks, or the payment
obligation otherwise will be collateralized by U.S. Government securities.
For certain participation interests, the Fund will have the right to demand
payment, on not more than seven days' notice, for all or any part of the
Fund's participation interest in the Municipal Obligation, plus accrued
interest. As to these instruments, the Fund intends to exercise its right to
demand payment only upon a default under the terms of the Municipal
Obligation, as needed to provide liquidity to meet redemptions, or to
maintain or improve the quality of its investment portfolio.
TENDER OPTION BONDS (MUNICIPAL FUNDS) _ Each Municipal Fund may purchase
tender option bonds. A tender option bond is a Municipal Obligation
(generally held pursuant to a custodial arrangement) having a relatively long
maturity and bearing interest at a fixed rate substantially higher than
prevailing short-term tax exempt rates, that has been coupled with the
agreement of a third party, such as a bank, broker-dealer or other financial
institution, pursuant to which such institution grants the security holders
the option, at periodic intervals, to tender their securities to the
institution and receive the face value thereof. As consideration for providing
the option, the financial institution receives periodic fees equal to the
difference between the Municipal Obligation's fixed coupon rate and the rate,
as determined by a remarketing or similar agent at or near the commencement of
such period, that would cause the securities, coupled with the tender option,
to trade at par on the date of such determination. Thus, after payment of
this fee, the security holder effectively holds a demand obligation that bears
interest at the prevailing short-term tax exempt rate. The Dreyfus
Corporation, on behalf of the Fund, will consider on an ongoing basis the
creditworthiness of the issuer of the underlying Municipal Obligation, of any
custodian and of the third party provider of the tender option. In certain
instances and for certain tender option bonds, the option may be terminable
in the event of a default in payment of principal or interest on the
underlying Municipal Obligations and for other reasons.
STAND-BY COMMITMENTS (MUNICIPAL FUNDS) _ Each Municipal Fund may acquire
"stand-by commitments" with respect to Municipal Obligations held in its
portfolio. Under a stand-by commitment, the Fund obligates a broker, dealer
or bank to repurchase, at the Fund's option, specified securities at a
specified price and, in this respect, stand-by commitments are comparable to
put options. The exercise of a stand-by commitment, therefore, is subject to
the ability of the seller to make payment on demand. The Fund will acquire
stand-by commitments solely to facilitate portfolio liquidity and does not
intend to exercise its rights thereunder for trading purposes. The Fund may
pay for stand-by commitments if such action is deemed necessary, thus
increasing to a degree the cost of the underlying Municipal Obligation and
similarly decreasing such security's yield to investors. Gains realized in
connection with stand-by commitments will be taxable.
TAXABLE INVESTMENTS (MUNICIPAL FUNDS) _ From time to time, on a temporary
basis other than for temporary defensive purposes (but not to exceed 20% of
the value of the Fund's net assets) or for temporary defensive purposes, each
Municipal Fund may invest in taxable short-term investments ("Taxable
Investments") consisting of: notes of issuers having, at the time of
purchase, a quality rating within the two highest grades of Moody's, S&P or
Fitch; obligations of the U.S. Government, its agencies or instrumentalities;
commercial paper rated not lower than P-2 by Moody's, A-2 by S&P or F-2 by
Fitch; certificates of deposit of U.S. domestic banks, including foreign
branches of domestic banks, with assets of one billion dollars or more; time
deposits; bankers' acceptances and other short-term bank obligations; and
repurchase agreements in respect of any of the foregoing. Dividends paid by
the Fund
[Page 33]
that are attributable to income earned by the Fund from Taxable Investments
will be taxable to investors. See "Dividends, Distributions and Taxes."
Except for temporary defensive purposes, at no time will more than 20% of the
value of the Fund's net assets be invested in Taxable Investments. If the
Fund purchases Taxable Investments, it will value them using the amortized
cost method and comply with the provisions of Rule 2a-7 relating to purchases
of taxable instruments. When the California Municipal Fund, the Minnesota
Municipal Fund or the New York Municipal Fund has adopted a temporary
defensive position, including when acceptable California, Minnesota or New
York Municipal Obligations are unavailable for investment by the relevant
Fund, in excess of 35% of the Fund's net assets may be invested in securities
that are not exempt from California, Minnesota or New York State and New York
City income taxes, respectively. Under normal market conditions, none of
these Funds anticipates that more than 5% of the value of its total assets
will be invested in any one category of Taxable Investments. Taxable
Investments are more fully described in the Statement of Additional
Information to which reference hereby is made.
ILLIQUID SECURITIES _ Each Fund may invest up to 10% of the value of its net
assets in securities as to which a liquid trading market does not exist,
provided such investments are consistent with the Fund's investment
objective. Such securities may include securities that are not readily
marketable, such as certain securities that are subject to legal or
contractual restrictions on resale, and repurchase agreements providing for
settlement in more than seven days after notice. As to these securities, the
Fund is subject to a risk that should the Fund desire to sell them when a
ready buyer is not available at a price the Fund deems representative of
their value, the value of the Fund's net assets could be adversely affected.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND IN THE
FUND'S OFFICIAL SALES LITERATURE IN CONNECTION WITH THE OFFER OF THE FUND'S
SHARES, AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND. THIS PROSPECTUS
DOES NOT CONSTITUTE AN OFFER IN ANY STATE IN WHICH, OR TO ANY PERSON TO WHOM,
SUCH OFFERING MAY NOT LAWFULLY BE MADE.
[Page 34]
[This Page Intentionally Left Blank]
[Page 35]
General Government Securities
Money Market Fund
General Money Market Fund
General California Municipal
Money Market Fund
General Minnesota Municipal
Money Market Fund
General Municipal
Money Market Fund
General New York Municipal
Money Market Fund
Combined Prospectus
CLASS B SHARES
Copy Rights 1998 Dreyfus Service Corporation
GEN/p0598B
Dreyfus
[Page 36]
______________________________________________________________________________
COMBINED PROSPECTUS May 1, 1998
GENERAL GOVERNMENT SECURITIES MONEY MARKET FUND
GENERAL MONEY MARKET FUND
GENERAL MUNICIPAL MONEY MARKET FUND
CLASS A SHARES
______________________________________________________________________________
General Government Securities Money Market Fund (the "Government
Money Fund"), General Money Market Fund (the "Money Fund") and General
Municipal Money Market Fund (the "National Municipal Fund") are open-end
management investment companies, known as money market mutual funds (each, a
"Fund"). Each Fund seeks to provide you with as high a level of current
income as is consistent with the preservation of capital and the maintenance
of liquidity and, in the case of the National Municipal Fund, which is exempt
from Federal income tax.
The Dreyfus Corporation professionally manages each Fund's
portfolio.
An investment in the Funds is neither insured nor guaranteed by the
U.S. Government. There can be no assurance that the Funds will be able to
maintain a stable net asset value of $1.00 per share.
You can invest, reinvest or redeem shares at any time without charge
or penalty imposed by a Fund.
Fund shares may be purchased only by clients of Service Agents as
described herein. By this Prospectus, each Fund is offering Class A shares.
Another class of Fund shares_Class B shares_are offered by the Funds pursuant
to a separate prospectus and are not offered hereby. Class A and Class B
shares are identical, except as to the services offered to, and the expenses
borne by, each Class which may affect performance. If you would like to
obtain information about Class B shares, please write to the address or call
the number set forth below.
Each Fund is a separate investment portfolio with operations and
results that are unrelated to those of each other Fund. This combined
Prospectus has been prepared for your convenience to provide you the
opportunity to consider three investment choices in one document.
This Prospectus sets forth concisely information about each Fund that
you should know before investing. It should be read and retained for future
reference.
The Statement of Additional Information, dated May 1, 1998, which may
be revised from time to time, provides a further discussion of certain areas
in this Prospectus and other matters which may be of interest to some
investors. It has been filed with the Securities and Exchange Commission and
is incorporated herein by reference. The Securities and Exchange Commission
maintains a web site (http://www.sec.gov) that contains the Statement of
Additional Information, material incorporated by reference, and other
information regarding the Funds. For a free copy of the Statement of
Additional Information, write to a Fund at 144 Glenn Curtiss Boulevard,
Uniondale, New York 11556-0144, or call 1-800-645-6561. When telephoning, ask
for operator 144.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
OR ENDORSED BY, ANY BANK, AND ARE NOT FEDERALLY INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER
AGENCY. MONEY MARKET MUTUAL FUND SHARES INVOLVE CERTAIN INVESTMENT RISKS,
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
______________________________________________________________________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
______________________________________________________________________________
TABLE OF CONTENTS
Page
Annual Fund Operating Expenses........................... 3
Condensed Financial Information.......................... 4
Yield Information........................................ 5
Description of the Funds................................. 5
Management of the Funds.................................. 8
How to Buy Shares........................................ 9
Shareholder Services..................................... 12
How to Redeem Shares..................................... 15
Service Plan............................................. 18
Shareholder Services Plan................................ 18
Dividends, Distributions and Taxes....................... 18
General Information...................................... 20
Appendix................................................. 22
<TABLE>
<CAPTION>
[Page 2]
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average daily net assets)
NATIONAL
GOVERNMENT MONEY MONEY MUNICIPAL
FUND FUND FUND
_________________ _____ ________
<S> <C> <C>
Management Fees............................................ .50% .50% .50%
12b-1 Fees................................................... .20% .20% None
Other Expenses............................................... .12% .18% .12%
Total Fund Operating Expenses............................... .82% .88% .62%
EXAMPLE:
You would pay the following expenses on
a $1,000 investment, assuming (1) 5% annual
return and (2) redemption at the end of
each time period:
1 YEAR $ 8 $ 9 $ 6
3 Years $ 26 $ 28 $ 20
5 Years $ 46 $ 49 $ 35
10 Years $101 $108 $ 77
</TABLE>
______________________________________________________________________________
THE AMOUNTS LISTED IN THE EXAMPLE SHOULD NOT BE CONSIDERED AS
REPRESENTATIVE OF PAST OR FUTURE EXPENSES AND ACTUAL EXPENSES MAY BE GREATER
OR LESS THAN THOSE INDICATED. MOREOVER, WHILE THE EXAMPLE ASSUMES A 5% ANNUAL
RETURN, EACH FUND'S ACTUAL PERFORMANCE WILL VARY AND MAY RESULT IN AN ACTUAL
RETURN GREATER OR LESS THAN 5%.
______________________________________________________________________________
The purpose of the foregoing tables is to assist you in understanding
the costs and expenses borne by each Fund, the payment of which will reduce
investors' annual return. The information in the foregoing tables does not
reflect any fee waivers or expense reimbursement arrangements that may be in
effect. Certain Service Agents (as defined below) may charge their clients
direct fees for effecting transactions in Fund shares; such fees are not
reflected in the foregoing table. For a further description of the various
costs and expenses incurred in the operation of the Funds, as well as expense
reimbursement or waiver arrangements, see "Management of the Funds," "How to
Buy Shares," "Service Plan" and "Shareholder Services Plan."
[Page 3]
CONDENSED FINANCIAL INFORMATION
The information in the following tables has been audited by Ernst
&Young LLP, each Fund's independent auditors. Further financial data, related
notes and report of independent auditors for each Fund accompany the
Statement of Additional Information, available upon request.
FINANCIAL HIGHLIGHTS
Contained below for each Fund is per share operating performance data for a
Class A share outstanding, total investment return, ratios to average net
assets and other supplemental data for each period indicated. This
information has been derived from the Fund's financial statements.
<TABLE>
<CAPTION>
GOVERNMENT MONEY FUND
__________________________________________________________________________________________________________
TEN MONTHS
FISCAL YEAR ENDED ENDED
JANUARY 31, NOVEMBER 30,
__________________________________________________________________________________________________________
PER SHARE DATA: 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1997(1)
______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of
period... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______
INVESTMENT OPERATIONS:
Investment
income-net.... .058 .068 .082 .072 .053 .033 .027 .038 .052 .047 .040
______ _____- _____- _____- _____- ______ ______ ______ ______ ______ ______
DISTRIBUTIONS:
Dividends from
investment
income-net..... (.058) (.068) (.082) (.072) (.053) (.033) (.027) (.038) (.052) (.047) (.040)
______ _____- _____- _____- _____- ______ ______ ______ ______ ______ ______
Net asset value,
end of period.. $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ======
TOTAL INVESTMENT
RETURN... 5.96% 6.99% 8.56% 7.42% 5.46% 3.36% 2.69% 3.90% 5.35% 4.75% 4.84%(2)
RATIOS/SUPPLEMENTAL
DATA:
Ratio of expenses
to average
net assets... .83% .87% .87% .86% .82% .82% .81% .83% .84% .82% .82%(2)
Ratio of net
investment income
to average net
assets... 5.80% 6.74% 8.23% 7.14% 5.27% 3.28% 2.66% 3.82% 5.22% 4.65% 4.78%(2)
Net Assets, end
of period (000's
omitted)..... $292,204 $263,130 $306,610 $408,817 $609,015 $725,419 $536,884 $513,345 $530,054 $519,861 $510,289
(1) Effective February 1, 1997, the Fund has changed its fiscal year end from
January 31 to November 30.
(2) Annualized.
</TABLE>
<TABLE>
<CAPTION>
MONEY FUND
__________________________________________________________________________________________________________
TEN MONTHS
FISCAL YEAR ENDED ENDED
JANUARY 31, NOVEMBER 30,
__________________________________________________________________________________________________________
PER SHARE DATA: 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1997(1)
______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of
period... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______
Investment Operations:
Investment
income_net.. .060 .069 .085 .074 .055 .032 .025 .037 .053 .047 .041
______ _____- _____- _____- _____- ______ ______ ______ ______ ______ ______
Distributions:
Dividends from
investment
income_net... (.060) (.069) (.085) (.074) (.055) (.032) (.025) (.037) (.053) (.047) (.041)
______ _____- _____- _____- _____- ______ ______ ______ ______ ______ ______
Net asset value,
end of period.. $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ======
TOTAL INVESTMENT
RETURN.. 6.15% 7.10% 8.80% 7.64% 5.61% 3.26% 2.56% 3.75% 5.42% 4.81% 4.99%(2)
RATIOS/SUPPLEMENTAL
DATA:
Ratio of expenses
to average net
assets... .95% .97% .93% .91% .92% .95% .94% .94% .86% .84% .88%(2)
Ratio of net
investment income
to average net
assets... 6.00% 6.84% 8.43% 7.39% 5.44% 3.22% 2.53% 3.68% 5.28% 4.71% 4.89%(2)
Decrease reflected
in above expense
ratios due to
undertakings by
The Dreyfus
Corporation.. __ __ __ __ __ __ .02% .04% .01% __ __
Net Assets, end of
period (000's
omitted).. $763,441 $710,810 $915,548 $677,257 $845,690 $688,785 $616,072 $572,116 $654,581 $764,119 $903,313
(1) Effective February 1, 1997, the Fund has changed its fiscal year end
from January 31 to November 30.
(2) Annualized.
</TABLE>
<TABLE>
<CAPTION>
[Page 4]
NATIONAL MUNICIPAL FUND
________________________________________________________________________________________________
FISCAL YEAR ENDED
NOVEMBER 30,
________________________________________________________________________________________________
PER SHARE DATA: 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997
______ ______ ______ ______ ______ ______ ______ ______ ______ ______
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of year...... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
______ ______ ______ ______ ______ ______ ______ ______ ______ ______
INVESTMENT OPERATIONS:
Investment income_net.... .046 .057 .054 .043 .027 .021 .023 .034 .029 .031
DISTRIBUTIONS:
Dividends from investment
income _ net...... (.046) (.057) (.054) (.043) (.027) (.021) (.023) (.034) (.029) (.031)
______ _____- _____- _____- _____- ______ ______ ______ ______ ______
Net asset value, end of
year....... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
====== ====== ====== ====== ====== ====== ====== ====== ====== ======
TOTAL INVESTMENT RETURN... 4.68% 5.89% 5.51% 4.36% 2.74% 2.10% 2.27% 3.41% 2.97% 3.14%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to
average net assets ... .62% .64% .62% .62% .64% .63% .64% .66% .66% .62%
Ratio of net investment
income to average net
assets....... 4.55% 5.74% 5.39% 4.30% 2.71% 2.08% 2.22% 3.35% 2.93% 3.09%
Net Assets, end of year
(000's omitted)..... $394,583 $343,917 $352,320 $342,595 $397,912 $352,147 $294,711 $294,379 $256,862 $273,058
</TABLE>
YIELD INFORMATION
From time to time, each Fund advertises its yield and effective
yield. Both yield figures are based on historical earnings and are not
intended to indicate future performance. It can be expected that these yields
will fluctuate substantially. A Fund's yield refers to the income generated
by an investment in the Fund over a seven-day period (which period will be
stated in the advertisement). This income is then "annualized." That is, the
amount of income generated by the investment during that week is assumed to
be generated each week over a 52-week period and is shown as a percentage of
the investment. The effective yield is calculated similarly, but, when
annualized, the income earned by an investment in the Fund is assumed to be
reinvested. The effective yield will be slightly higher than the yield
because of the compounding effect of this assumed reinvestment. A Fund's
yield and effective yield may reflect absorbed expenses pursuant to any
undertaking that may be in effect. See "Management of the Funds."
As to the National Municipal Fund, tax equivalent yield is calculated
by determining the pre-tax yield which, after being taxed at a stated rate,
would be equivalent to a stated yield or effective yield calculated as
described above.
Yield information is useful in reviewing a Fund's performance, but
because yields will fluctuate, under certain conditions such information may
not provide a basis for comparison with domestic bank deposits, other
investments which pay a fixed yield for a stated period of time, or other
investment companies which may use a different method of computing yield.
Comparative performance information may be used from time to time in
advertising or marketing Fund shares, including data from Lipper Analytical
Services, Inc., Bank Rate Monitortrademark, N. Palm Beach, Fla. 33408, IBC's
Money Fund Reporttrademark, Morningstar, Inc. and other industry
publications.
DESCRIPTION OF THE FUNDS
INVESTMENT OBJECTIVE
The investment objective of the Government Money Fund and the Money
Fund is to provide you with as high a level of current income as is
consistent with the preservation of capital and, in the case of the
Government Money Fund, the maintenance of liquidity. The investment objective
of the National Municipal Fund is to maximize current income exempt from
Federal income tax to the extent consistent with the preservation of capital
and the maintenance of liquidity. Each Fund's investment objective cannot be
changed without approval by the holders of a majority (as defined in the
Investment Company Act of 1940, as amended (the "1940 Act")) of such Fund's
outstanding voting shares. There
[Page 5]
can be no assurance that a Fund's investment objective will be achieved. Each
Fund pursues its investment objective in the manner described below.
Securities in which a Fund invests may not earn as high a level of current
income as long-term or lower quality securities which generally have less
liquidity, greater market risk and more fluctuation in market value.
MANAGEMENT POLICIES
Each Fund seeks to maintain a net asset value of $1.00 per share for
purchases and redemptions. To do so, each Fund uses the amortized cost method
of valuing its securities pursuant to Rule 2a-7 under the 1940 Act, which
Rule includes various maturity, quality and diversification requirements,
certain of which are summarized as follows. In accordance with Rule 2a-7,
each Fund is required to maintain a dollar-weighted average portfolio
maturity of 90 days or less, purchase only instruments having remaining
maturities of 13 months or less and invest only in U.S. dollar denominated
securities determined in accordance with procedures established by the Fund's
Board to present minimal credit risks and, in the case of the Money Fund and
the National Municipal Fund, which 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
instrument was rated by only one such organization) or, if unrated, are of
comparable quality as determined in accordance with procedures established by
the Fund's Board. The nationally recognized statistical rating organizations
currently rating instruments of the type the Money Fund and the National
Municipal Fund may purchase are Moody's Investors Service, Inc. ("Moody's"),
Standard & Poor's Ratings Group ("S&P"), Duff & Phelps Credit Rating Co.,
Fitch IBCA, Inc. ("Fitch") and Thomson BankWatch, Inc., and their rating
criteria are described in the "Appendix" to the Statement of Additional
Information. This discussion concerning investment ratings does not apply to
the Government Money Fund because it invests exclusively in U.S. Government
securities and repurchase agreements in respect thereof. For further
information regarding the amortized cost method of valuing securities, see
"Determination of Net Asset Value" in the Statement of Additional
Information. There can be no assurance a Fund will be able to maintain a
stable net asset value of $1.00 per share.
Each Fund is classified as a diversified investment company.
Government Money Fund_The Fund invests in securities issued or guaranteed as
to principal and interest by the U.S. Government or its agencies or
instrumentalities, and repurchase agreements in respect of such securities.
See "Appendix_Certain Portfolio Securities."
Money Fund_The Fund invests in short-term money market obligations, including
securities issued or guaranteed by the U.S. Government or its agencies or
instrumentalities, time deposits, certificates of deposit, bankers'
acceptances and other short-term obligations issued by domestic banks,
foreign subsidiaries or foreign branches of domestic banks, domestic and
foreign branches of foreign banks and thrift institutions, repurchase
agreements, asset-backed securities, and high quality domestic and foreign
commercial paper and other short-term corporate obligations, including those
with floating or variable rates of interest. The Fund may invest in U.S.
dollar denominated obligations issued or guaranteed by one or more foreign
governments or any of their political subdivisions, agencies or
instrumentalities, including obligations of supranational entities. See
"Appendix_Certain Portfolio Securities." During normal market conditions, at
least 25% of the value of the Fund's total assets will be invested in bank
obligations. See "Investment Considerations and Risks" below.
National Municipal Fund_The Fund will invest at least 80% of the value of its
net assets (except when maintaining a temporary defensive position) in
Municipal Obligations. Municipal Obligations are debt obligations issued by
states, territories and possessions of the United States and the District of
Columbia and their political subdivisions, agencies and instrumentalities, or
multistate agencies or authorities, the interest from which is, in the
opinion of bond counsel to the issuer, exempt from Federal income tax.
Municipal Obligations generally include debt obligations issued to obtain
funds for various
[Page 6]
public purposes as well as certain industrial development bonds issued by or
on behalf of public authorities. Municipal Obligations bear fixed, floating
or variable rates of interest. See "Appendix_Certain Portfolio Securities."
From time to time, the Fund may invest more than 25% of the value of
its total assets in industrial development bonds which, although issued by
industrial development authorities, may be backed only by the assets and
revenues of the non-governmental users. Interest on Municipal Obligations
(including certain industrial development bonds) which are specified private
activity bonds, as defined in the Internal Revenue Code of 1986, as amended
(the "Code"), issued after August 7, 1986, while exempt from Federal income
tax, is a preference item for the purpose of the alternative minimum tax.
Where a regulated investment company receives such interest, a proportionate
share of any exempt-interest dividend paid by the investment company may be
treated as such a preference item to shareholders. The Fund may invest
without limitation in such Municipal Obligations if The Dreyfus Corporation
determines that their purchase is consistent with the Fund's investment
objective.
From time to time, on a temporary basis other than for temporary
defensive purposes (but not to exceed 20% of the value of the Fund's net
assets) or for temporary defensive purposes, the Fund may invest in taxable
money market instruments ("Taxable Investments") of the quality described
under "Appendix_Certain Portfolio Securities_Taxable Investments."
INVESTMENT CONSIDERATIONS AND RISKS
General_Each Fund attempts to increase yields by trading to take advantage of
short-term market variations. This policy is expected to result in high
portfolio turnover but should not adversely affect a Fund since each Fund
usually does not pay brokerage commissions when it purchases short-term debt
obligations, including U.S. Government securities. The value of the portfolio
securities held by each Fund will vary inversely to changes in prevailing
interest rates. Thus, if interest rates have increased from the time a
security was purchased, such security, if sold, might be sold at a price less
than its cost. Similarly, if interest rates have declined from the time a
security was purchased, such security, if sold, might be sold at a price
greater than its purchase cost. In either instance, if the security was
purchased at face value and held to maturity, no gain or loss would be
realized.
Bank Securities (Money Fund Only)_To the extent the Fund's investments are
concentrated in the banking industry, the Fund will have correspondingly
greater exposure to the risk factors which are characteristic of such
investments. Sustained increases in interest rates can adversely affect the
availability or liquidity and cost of capital funds for a bank's lending
activities, and a deterioration in general economic conditions could increase
the exposure to credit losses. In addition, the value of and the investment
return on the Fund's shares could be affected by economic or regulatory
developments in or related to the banking industry, which industry also is
subject to the effects of competition within the banking industry as well as
with other types of financial institutions. The Fund, however, will seek to
minimize its exposure to such risks by investing only in debt securities
which are determined to be of high quality.
Foreign Securities (Money Fund Only)_Since the Fund's portfolio may contain
securities issued by foreign governments, or any of their political
subdivisions, agencies or instrumentalities, and by foreign subsidiaries and
foreign branches of domestic banks, domestic and foreign branches of foreign
banks, and commercial paper issued by foreign issuers, the Fund may be
subject to additional investment risks with respect to those securities that
are different in some respects from those incurred by a fund which invests
only in debt obligations of U.S. domestic issuers, although such obligations
may be higher yielding when compared to the securities of U.S. domestic
issuers. Such risks include possible future political and economic
developments, seizure or nationalization of foreign deposits, imposition of
foreign withholding taxes on interest income payable on the securities,
establishment of exchange controls or adoption of other foreign governmental
restrictions which might adversely affect the payment of principal and
interest on these securities.
[Page 7]
Investing in Municipal Obligations (National Municipal Fund)_The National
Municipal Fund may invest more than 25% of the value of its total assets in
Municipal Obligations which are related in such a way that an economic,
business or political development or change affecting one such security also
would affect the other securities; for example, securities the interest upon
which is paid from revenues of similar types of projects. As a result, the
Fund may be subject to greater risk as compared to a fund that does not
follow this practice.
Certain municipal lease/purchase obligations in which the National
Municipal Fund may invest may contain "non-appropriation" clauses which
provide that the municipality has no obligation to make lease payments in
future years unless money is appropriated for such purpose on a yearly basis.
Although "non-appropriation" lease/purchase obligations are secured by the
leased property, disposition of the leased property in the event of
foreclosure might prove difficult. In evaluating the credit quality of a
municipal lease/purchase obligation that is unrated, The Dreyfus Corporation
will consider, on an ongoing basis, a number of factors including the
likelihood that the issuing municipality will discontinue appropriating
funding for the leased property.
Certain provisions in the Code relating to the issuance of Municipal
Obligations may reduce the volume of Municipal Obligations qualifying for
Federal tax exemption. One effect of these provisions could be to increase
the cost of the Municipal Obligations available for purchase by the Fund and
thus reduce available yield. Shareholders should consult their tax advisers
concerning the effect of these provisions on an investment in the National
Municipal Fund. Proposals that may restrict or eliminate the income tax
exemption for interest on Municipal Obligations may be introduced in the
future. If any such proposal were enacted that would reduce the availability
of Municipal Obligations for investment by the National Municipal Fund so as
to adversely affect Fund shareholders, the National Municipal Fund would
reevaluate its investment objective and policies and submit possible changes
in the Fund's structure to shareholders for their consideration. If
legislation were enacted that would treat a type of Municipal Obligation as
taxable, the National Municipal Fund would treat such security as a
permissible Taxable Investment within the applicable limits set forth herein.
Simultaneous Investments_Investment decisions for each Fund are made
independently from those of other investment companies advised by The Dreyfus
Corporation. If, however, such other investment companies desire to invest
in, or dispose of, the same securities as a Fund, available investments or
opportunities for sales will be allocated equitably to each investment
company. In some cases, this procedure may adversely affect the size of the
position obtained for or disposed of by the Fund or the price paid or
received by the Fund.
Year 2000 Risks_Like other mutual funds, financial and business organizations
and individuals around the world, each Fund could be adversely affected if
the computer systems used by The Dreyfus Corporation and the Fund's other
service providers do not properly process and calculate date-related
information and data from and after January 1, 2000. This is commonly known
as the "Year 2000 Problem." The Dreyfus Corporation is taking steps to
address the Year 2000 Problem with respect to the computer systems that it
uses and to obtain assurances that comparable steps are being taken by the
Funds' other major service providers. At this time, however, there can be no
assurance that these steps will be sufficient to avoid any adverse impact on
a Fund.
MANAGEMENT OF THE FUNDS
Investment Adviser_The Dreyfus Corporation, located at 200 Park Avenue, New
York, New York 10166, was formed in 1947 and serves as each Fund's investment
adviser. The Dreyfus Corporation is a wholly-owned subsidiary of Mellon Bank,
N.A., which is a wholly-owned subsidiary of Mellon Bank Corporation
("Mellon"). As of March 31, 1998, The Dreyfus Corporation managed or
administered approximately $100 billion in assets for approximately 1.7
million investor accounts nationwide.
[Page 8]
The Dreyfus Corporation supervises and assists in the overall
management of each Fund's affairs under separate Management Agreements
related to each Fund, subject to the authority of the Board in
accordance with applicable law.
Mellon is a publicly owned multibank holding company incorporated
under Pennsylvania law in 1971 and registered under the Federal Bank Holding
Company Act of 1956, as amended. Mellon provides a comprehensive range of
financial products and services in domestic and selected international
markets. Mellon is among the twenty-five largest bank holding companies in
the United States based on total assets. Mellon's principal wholly-owned
subsidiaries are Mellon Bank, N.A., Mellon Bank (DE) National Association,
Mellon Bank (MD), The Boston Company, Inc., AFCO Credit Corporation and a
number of companies known as Mellon Financial Services Corporations. Through
its subsidiaries, including The Dreyfus Corporation, Mellon managed more than
$305 billion in assets as of December 31, 1997, including approximately $104
billion in proprietary mutual fund assets. As of December 31, 1997, Mellon,
through various subsidiaries, provided non-investment services, such as
custodial or administration services, for more than $1.532 trillion in
assets, including approximately $60 billion in mutual fund assets.
For the fiscal year ended November 30, 1997, each Fund paid The
Dreyfus Corporation a monthly management fee at the effective annual rate of
.50 of 1% of the value of the Fund's average daily net assets. From time to
time, The Dreyfus Corporation may waive receipt of its fees and/or voluntarily
assume certain expenses of a Fund, which would have the effect of lowering
the expense ratio of such Fund and increasing yield to investors. No Fund
will pay The Dreyfus Corporation at a later time for any amounts it may
waive, nor will a Fund reimburse The Dreyfus Corporation for any amounts it
may assume.
In allocating brokerage transactions, The Dreyfus Corporation seeks
to obtain the best execution of orders at the most favorable net price.
Subject to this determination, The Dreyfus Corporation may consider, among
other things, the receipt of research services and/or the sale of shares of a
Fund or other funds managed, advised or administered by The Dreyfus
Corporation as factors in the selection of broker-dealers to execute
portfolio transactions for each Fund. See "Portfolio Transactions" in the
Statement of Additional Information.
The Dreyfus Corporation may pay the Funds' distributor for
shareholder services from The Dreyfus Corporation's own assets, including
past profits but not including the management fee paid by the Funds. The
Funds' distributor may use part or all of such payments to pay Service Agents
in respect of these services.
Distributor_Each Fund's distributor is Premier Mutual Fund Services, Inc.
(the "Distributor"), located at 60 State Street, Boston, Massachusetts 02109.
The Distributor's ultimate parent is Boston Institutional Group, Inc.
Transfer and Dividend Disbursing Agent and Custodian_Dreyfus Transfer, Inc.,
a wholly-owned subsidiary of The Dreyfus Corporation, P.O. Box 9671,
Providence, Rhode Island 02940-9671, is each Fund's Transfer and Dividend
Disbursing Agent (the "Transfer Agent"). The Bank of New York, 90 Washington
Street, New York, New York 10286, is each Fund's Custodian.
HOW TO BUY SHARES
Each Fund's shares may be purchased only by clients of certain
financial institutions (which may include banks), securities dealers
("Selected Dealers"), and other industry professionals such as investment
advisers, accountants and estate planning firms (collectively, "Service
Agents") that have entered into service agreements with the Distributor. For
shareholders who purchase Fund shares from the Distributor, the Distributor
will act as Service Agent. Stock certificates are issued only upon your
written request. No certificates are issued for fractional shares. It is not
recommended that the National Municipal Fund be used as a vehicle for Keogh,
IRA or other qualified plans. Each Fund reserves the right to reject any
purchase order.
[Page 9]
The minimum initial investment in each Fund is $2,500, or $1,000 if
you are a client of a Service Agent which maintains
an omnibus account in the relevant Fund and has made an aggregate minimum
initial purchase in the Fund for its customers of $2,500. Subsequent
investments must be at least $100. For the Government Money Fund and the
Money Fund, however, the minimum initial investment is $750 for
Dreyfus-sponsored Keogh Plans, IRAs (including regular IRAs, spousal IRAs for
a non-working spouse, Roth IRAs, SEP-IRAs and rollover IRAs) and 403(b)(7)
Plans with only one participant and $500 for Dreyfus-sponsored Education
IRAs, with no minimum for subsequent purchases. The initial investment must
be accompanied by the Account Application. For full-time or part-time
employees of The Dreyfus Corporation or any of its affiliates or
subsidiaries, directors of The Dreyfus Corporation, Board members of a fund
advised by The Dreyfus Corporation, including members of each Fund's Board,
or the spouse or minor child of any of the foregoing, the minimum initial
investment is $1,000. For full-time or part-time employees of The Dreyfus
Corporation or any of its affiliates or subsidiaries who elect to have a
portion of their pay directly deposited into their Fund accounts, the minimum
initial investment is $50. The Government Money Fund and the Money Fund
reserve the right to offer Fund shares without regard to minimum purchase
requirements to employees participating in certain qualified and
non-qualified employee benefit plans or other programs where contributions or
account information can be transmitted in a manner and form acceptable to
such Fund. Each Fund reserves the right to vary further the initial and
subsequent investment minimum requirements at any time.
You may purchase Fund shares by check or wire. Checks should be made
payable to "The Dreyfus Family of Funds" or, if for Dreyfus retirement plan
accounts with respect to the Government Money Fund and the Money Fund, to
"The Dreyfus Trust Company, Custodian." Payments to open new accounts which
are mailed should be sent to The Dreyfus Family of Funds, P.O. Box 9387,
Providence, Rhode Island 02940-9387, together with your Account Application
indicating that Class A shares are being purchased. For subsequent
investments, your Fund account number should appear on the check and an
investment slip should be enclosed and sent to The Dreyfus Family of Funds,
P.O. Box 105, Newark, New Jersey 07101-0105. For Dreyfus retirement plan
accounts, both initial and subsequent investments should be sent to The
Dreyfus Trust Company, Custodian, P.O. Box 6427, Providence, Rhode Island
02940-6427. Neither initial nor subsequent investments should be made by
third party check. Purchase orders may be delivered in person only to a
Dreyfus Financial Center. These orders will be forwarded to the relevant Fund
and will be processed only upon receipt thereby. For the location of the
nearest Dreyfus Financial Center, please call one of the telephone numbers
listed under "General Information." Other purchase procedures may be in
effect for clients of certain Service Agents.
Wire payments may be made if your bank account is in a commercial
bank that is a member of the Federal Reserve System or any other bank having
a correspondent bank in New York City. Immediately available funds may be
transmitted by wire to The Bank of New York together with the applicable
Fund's DDA# as shown below, for purchase of Fund shares in your name:
DDA # 8900052414/General Government Securities Money Market Fund,
Inc.
DDA # 8900051957/General Money Market Fund, Inc.
DDA # 8900052376/General Municipal Money Market Fund
The wire must include your Fund account number (for new accounts, your
Taxpayer Identification Number ("TIN") should be included instead), account
registration and dealer number, if applicable, and must indicate the Class of
shares being purchased. If your initial purchase of Fund shares is by wire,
please call 1-800-645-6561 after completing your wire payment to obtain your
Fund account number. Please include your Fund account number on the Account
Application and promptly mail the Account Application to the Fund, as no
redemptions will be permitted until the Account Application is received. You
may obtain further information about remitting funds in this manner from your
bank. All payments
[Page 10]
should be made in U.S. dollars and, to avoid fees and delays, should be drawn
only on U.S. banks. A charge will be imposed if any check used for investment
in your account does not clear. Each Fund makes available to certain large
institutions the ability to issue purchase instructions through compatible
computer facilities.
Fund shares also may be purchased through Dreyfus-AUTOMATIC Asset
BuilderRegistration Mark, the Government Direct Deposit Privilege or the
Payroll Savings Plan described under "Shareholder Services." These services
enable you to make regularly scheduled investments and may provide you with a
convenient way to invest for long-term financial goals. You should be aware,
however, that periodic investment plans do not guarantee a profit and will
not protect an investor against loss in a declining market.
Subsequent investments also may be made by electronic transfer of
funds from an account maintained in a bank or other domestic financial
institution that is an Automated Clearing House member. You must direct the
institution to transmit immediately available funds through the Automated
Clearing House to The Bank of New York with instructions to credit your Fund
account. The instructions must specify your Fund account registration and
your Fund account number preceded by the digits "1111."
Service Agents may receive different levels of compensation for
selling different Classes of shares. Management understands that some Service
Agents may impose certain conditions on their clients which are different
from those described in this Prospectus and, to the extent permitted by
applicable regulatory authority, may charge their clients direct fees. You
should consult your Service Agent in this regard.
Fund shares are sold on a continuous basis at the net asset value per
share next determined after an order in proper form and Federal Funds (monies
of member banks within the Federal Reserve System which are held on deposit
at a Federal Reserve Bank) are received by the Transfer Agent or other entity
authorized to receive orders on behalf of the Fund in written or telegraphic
form. If you do not remit Federal Funds, your payment must be converted into
Federal Funds. This usually occurs within one business day of receipt of a
bank wire and within two business days of receipt of a check drawn on a
member bank of the Federal Reserve System. Checks drawn on banks which are
not members of the Federal Reserve System may take considerably longer to
convert into Federal Funds. Prior to receipt of Federal Funds, your money
will not be invested.
Net asset value per share of each Class is computed by dividing the
value of the Fund's net assets represented by such Class (i.e., the value of
its assets less liabilities) by the total number of shares of such Class
outstanding. See "Determination of Net Asset Value" in the Statement of
Additional Information.
Federal regulations require that you provide a certified TIN upon
opening or reopening an account. See "Dividends, Distributions and Taxes" and
the Account Application for further information concerning this requirement.
Failure to furnish a certified TIN to a Fund could subject you to a $50
penalty imposed by the Internal Revenue Service (the "IRS").
Government Money Fund and Money Fund_Each of these Funds determines its net
asset value per share twice each day the New York Stock Exchange or the
Transfer Agent is open for business: as of 5:00 p.m., New York time, and as
of 8:00 p.m., New York time.
If your payments are received in or converted into Federal Funds by
12:00 Noon, New York time, by the Transfer Agent on a business day, you will
receive the dividend declared that day. If your payments are received in or
converted into Federal Funds after 12:00 Noon, New York time, by the Transfer
Agent, you will begin to accrue dividends on the following business day.
Qualified institutions may telephone orders for purchase of Fund
shares of each of these Funds. A telephone order placed with the Distributor
or its designee in New York will become effective at the price determined at
5:00 p.m., New York time, and the shares purchased will receive the dividend
on Fund shares declared on that day, if such order is placed with the
Distributor or its designee in New
[Page 11]
York by 5:00 p.m., New York time, and Federal Funds are received by 6:00
p.m., New York time, on that day. A telephone order placed with the
Distributor or its designee in New York after 5:00 p.m., New York time, but
by 8:00 p.m., New York time, on a given day will become effective at the
price determined at 8:00 p.m., New York time, on that day, and the shares
purchased will begin to accrue dividends on the next business day, if Federal
Funds are received by 11:00 a.m., New York time, on the next business day.
The Distributor may pay dealers a fee of up to .5% of the amount
invested through such dealers in each Fund's shares by employees
participating in qualified or non-qualified employee benefit plans or other
programs where (i) the employers or affiliated employers maintaining such
plans or programs have a minimum of 250 employees eligible for participation
in such plans or programs, or (ii) such plan's or program's aggregate
investment in the Dreyfus Family of Funds or certain other products made
available by the Distributor to such plans or programs exceeds $1,000,000
("Eligible Benefit Plans"). Shares of funds in the Dreyfus Family of Funds
then held by Eligible Benefit Plans will be aggregated to determine the fee
payable. The Distributor reserves the right to cease paying these fees at any
time. The Distributor will pay such fees from its own funds, other than
amounts received from the Fund, including past profits or any other source
available to it.
National Municipal Fund_The National Municipal Fund determines its net asset
value per share twice each day the New York Stock Exchange or the Transfer
Agent is open for business: as of 12:00 Noon, New York time, and as of 8:00
p.m., New York time.
If your payments are received in or converted into Federal Funds by
12:00 Noon, New York time, on a business day, you will receive the dividend
declared that day. If your payments are received in or converted into Federal
Funds after 12:00 Noon, New York time, you will begin to accrue dividends on
the following business day.
Qualified institutions may telephone orders for purchase of shares of
the National Municipal Fund. A telephone order placed with the Distributor or
its designee in New York will become effective at the price determined at
12:00 Noon, New York time, on a given day, and the shares purchased will
receive the dividend on Fund shares declared on that day, if the telephone
order is placed with the Distributor or its designee by 12:00 Noon, New York
time, and Federal Funds are received by 4:00 p.m., New York time, on that
day. A telephone order placed with the Distributor or its designee after
12:00 Noon, New York time, but by 8:00 p.m., New York time, on a given day
will become effective at the price determined at 8:00 p.m., New York time, on
that day, and the shares purchased will begin to accrue dividends on the next
business day, if Federal Funds are received by 11:00 a.m., New York time, on
the next business day.
SHAREHOLDER SERVICES
The services and privileges described under this heading may not be
available to clients of certain Service Agents and some Service Agents may
impose certain conditions on their clients which are different from those
described in this Prospectus. You should consult your Service Agent in this
regard. In addition, use of the privileges noted below may require that the
proper forms and information be filed with and processed by the Transfer
Agent.
Fund Exchanges_Clients of certain Service Agents may purchase, in exchange
for shares of a Fund, shares of certain other funds managed or administered
by The Dreyfus Corporation, to the extent such shares are offered for sale in
the client's state of residence. These funds have different investment
objectives which may be of interest to you. If you desire to use this
service, you should consult your Service Agent or call 1-800-645-6561 to
determine if it is available and whether any conditions are imposed on its
use.
To request an exchange, you or your Service Agent acting on your
behalf must give exchange instructions to the Transfer Agent in writing or by
telephone. Before any exchange, you must obtain and
[Page 12]
should review a copy of the current prospectus of the fund into which the
exchange is being made. Prospectuses may be obtained by calling
1-800-645-6561. Except in the case of personal retirement plans, the shares
being exchanged must have a current value of at least $500; furthermore, when
establishing a new account by exchange, the shares 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 ability to issue exchange instructions
by telephone is given to shareholders of each Fund automatically, unless you
check the applicable "No" box on the Account Application, indicating that you
specifically refuse this Privilege. The Telephone Exchange Privilege may be
established for an existing account by written request signed by all
shareholders on the account, by a separate signed Shareholder Services Form,
available by calling 1-800-645-6561, or by oral request from any of the
authorized signatories on the account by calling 1-800-645-6561. If you have
established the Telephone Exchange Privilege, you may telephone exchange
instructions (including over The Dreyfus TouchRegistration Mark automated
telephone system) by calling 1-800-645-6561. If you are calling from
overseas, call 516-794-5452. See "How to Redeem Shares_Procedures." Upon an
exchange into a new account, the following shareholder services and
privileges, as applicable and where available, will be automatically carried
over to the fund into which the exchange is made: Telephone Exchange
Privilege, Check Redemption Privilege, Wire Redemption Privilege, Telephone
Redemption Privilege, and the dividend/capital gain distribution option
(except for Dividend Sweep) selected by the investor.
Shares will be exchanged at the next determined net asset value;
however, a sales load may be charged with respect to exchanges into funds
sold with a sales load. If you are exchanging into a fund that charges a
sales load, you may qualify for share prices which do not include the sales
load or which reflect a reduced sales load, if the shares you are exchanging
were: (a) purchased with a sales load, (b) acquired by a previous exchange
from shares purchased with a sales load, or (c) acquired through reinvestment
of dividends or distributions paid with respect to the foregoing categories
of shares. To qualify, at the time of the exchange you must notify the
Transfer Agent or your Service Agent must notify the Distributor. Any such
qualification is subject to confirmation of your holdings through a check of
appropriate records. See "Shareholder Services" in the Statement of
Additional Information. No fees currently are charged shareholders directly
in connection with exchanges, although each Fund reserves the right, upon not
less than 60 days' written notice, to charge shareholders a nominal
administrative fee in accordance with rules promulgated by the Securities and
Exchange Commission. Each Fund reserves the right to reject any exchange
request in whole or in part. The availability of Fund Exchanges may be
modified or terminated at any time upon notice to shareholders. See
"Dividends, Distributions and Taxes."
Dreyfus Auto-Exchange Privilege_Dreyfus Auto-Exchange Privilege enables you
to invest regularly (on a semi-monthly, monthly, quarterly or annual basis),
in exchange for shares of a Fund, in shares of certain other funds in the
Dreyfus Family of Funds of which you are a shareholder. The amount you
designate, which can be expressed either in terms of a specific dollar or
share amount ($100 minimum), will be exchanged automatically on the first
and/or fifteenth of the month according to the schedule you have selected.
Shares will be exchanged at the then-current net asset value; however, a
sales load may be charged with respect to exchanges into funds sold with a
sales load. See "Shareholder Services" in the Statement of Additional
Information. The right to exercise this Privilege may be modified or canceled
by the Fund or the Transfer Agent. You may modify or cancel your exercise of
this Privilege at any time by mailing written notification to The Dreyfus
Family of Funds, P.O. Box 9671, Providence, Rhode Island 02940-9671. Each
Fund may charge a service fee for the use of this Privilege. No such fee
currently is contemplated. For more information concerning this Privilege and
the funds in the Dreyfus Family of Funds eligible to participate in this
Privilege, or to obtain an Auto-Exchange Authorization Form, please call toll
free 1-800-645-6561. See "Dividends, Distributions and Taxes."
[Page 13]
Dreyfus-AUTOMATIC Asset BuilderRegistration Mark_Dreyfus-AUTOMATIC Asset
Builder permits you to purchase Fund shares (minimum of $100 and maximum of
$150,000 per transaction) at regular intervals selected by you. Fund shares
are purchased by transferring funds from the bank account designated by you.
Only an account maintained at a domestic financial institution which is an
Automated Clearing House member may be so designated. To establish a
Dreyfus-AUTOMATIC Asset Builder account, you must file an authorization form
with the Transfer Agent. You may obtain the necessary authorization form from
your Service Agent or by calling 1-800-645-6561. You may cancel your
participation in this Privilege or change the amount of your purchase at any
time by mailing written notification to The Dreyfus Family of Funds, P.O.
Box 9671, Providence, Rhode Island 02940-9671, or, if for Dreyfus retirement
plan accounts, to The Dreyfus Trust Company, Custodian, P.O. Box 6427,
Providence, Rhode Island 02940-6427, and the notification will be effective
three business days following receipt. Each Fund may modify or terminate this
Privilege at any time or charge a service fee. No such fee currently is
contemplated.
Government Direct Deposit Privilege_The Government Direct Deposit Privilege
enables you to purchase Fund shares (minimum of $100 and maximum of $50,000
per transaction) by having Federal salary, Social Security, or certain
veterans', military or other payments from the Federal government,
automatically deposited into your Fund account. You may deposit as much of
such payments as you elect. To enroll in Government Direct Deposit, you must
file with the Transfer Agent a completed Direct Deposit Sign-Up Form for each
type of payment that you desire to include in this Privilege. The appropriate
form may be obtained from your Service Agent or by calling 1-800-645-6561.
Death or legal incapacity will terminate your participation in this
Privilege. You may elect at any time to terminate your participation by
notifying in writing the appropriate Federal agency. Further, a Fund may
terminate your participation upon 30 days' notice to you.
Payroll Savings Plan_The Payroll Savings Plan permits you to purchase Fund
shares (minimum of $100 per transaction) automatically on a regular basis.
Depending upon your employer's direct deposit program, you may have part or
all of your paycheck transferred to your existing Dreyfus account
electronically through the Automated Clearing House system at each pay
period. To establish a Payroll Savings Plan account, you must file an
authorization form with your employer's payroll department. Your employer
must complete the reverse side of the form and return it to The Dreyfus
Family of Funds, P.O. Box 9671, Providence, Rhode Island 02940-9671. You may
obtain the necessary authorization form by calling 1-800-645-6561. You may
change the amount of purchase or cancel the authorization only by written
notification to your employer. It is the sole responsibility of your
employer, not the Distributor, The Dreyfus Corporation, the Fund, the
Transfer Agent or any other person, to arrange for transactions under the
Payroll Savings Plan. Each Fund may modify or terminate this Privilege at any
time or charge a service fee. No such fee currently is contemplated.
Dividend Options_Dividend Sweep enables you to invest automatically 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 you are a
shareholder. Shares of the other fund will be purchased at the then-current
net asset value; however, a sales load may be charged with respect to
investments in shares of a fund sold with a sales load. If you are investing
in a fund that charges a sales load, you may qualify for share prices which
do not include the sales load or which reflect a reduced sales load. If you
are investing in a fund that charges a contingent deferred sales charge, the
shares purchased will be subject to the contingent deferred sales charge, if
any, applicable to the purchased shares. See "Shareholder Services" in the
Statement of Additional Information. Dividend ACH permits you to transfer
electronically dividends or dividends and capital gain distributions, if any,
from a Fund to a designated bank account. Only an account maintained at a
domestic financial institution which is an Automated Clearing House member
may be so designated. Banks may charge a fee for this service.
[Page 14]
For more information concerning these privileges or to request a
Dividend Options Form, please call toll free 1-800-645-6561. You may cancel
these privileges by mailing written notification to The Dreyfus Family of
Funds, P.O. Box 9671, Providence, Rhode Island 02940-9671. To select a new
fund after cancellation, you must submit a new Dividend Options Form.
Enrollment in or cancellation of these privileges is effective three business
days following receipt. These privileges are available only for existing
accounts and may not be used to open new accounts. Minimum subsequent
investments do not apply for Dividend Sweep. Each Fund may modify or terminate
these privileges at any time or charge a service fee. No such fee currently is
contemplated. Shares held under Keogh Plans or IRAs are not eligible for
Dividend Sweep.
Quarterly Distribution Plan_The Quarterly Distribution Plan permits you to
receive quarterly payments from a Fund consisting of proceeds from the
redemption of shares purchased for your account through the automatic
reinvestment of dividends declared on your account during the preceding
calendar quarter. You may open a Quarterly Distribution Plan by submitting a
request to the Transfer Agent. The Quarterly Distribution Plan may be ended
at any time by you, the Fund or the Transfer Agent. Shares for which
certificates have been issued must be presented before redemption under the
Quarterly Distribution Plan.
Automatic Withdrawal Plan_The Automatic Withdrawal Plan permits you to
request withdrawal of a specified dollar amount (minimum of $50) on either a
monthly or quarterly basis if you have a $5,000 minimum account. An Automatic
Withdrawal Plan may be established by filing an Automatic Withdrawal Plan
application with the Transfer Agent or by oral request from any of the
authorized signatories on the account by calling 1-800-645-6561. The
Automatic Withdrawal Plan may be ended at any time by you, the Fund or the
Transfer Agent. Shares for which certificates have been issued may not be
redeemed through the Automatic Withdrawal Plan.
Retirement Plans (Government Money Fund and Money Fund Only)_Each of these
Funds offers a variety of 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. You 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 (except SEP-IRAs), please call 1-800-645-6561; or for SEP-IRAs, 401(k)
Salary Reduction Plans and 403(b)(7) Plans, please call 1-800-322-7880.
HOW TO REDEEM SHARES
GENERAL
You may request redemption of your shares at any time. Redemption
requests should be transmitted to the Transfer Agent as described below. When
a request is received in proper form by the Transfer Agent or other entity
authorized to receive orders on behalf of the Fund, your Fund will redeem the
shares at the next determined net asset value.
None of the Funds imposes a charge when shares are redeemed. Service
Agents may charge their clients a fee for effecting redemptions of Fund
shares. Any certificates representing Fund shares being redeemed must be
submitted with the redemption request. The value of the shares redeemed may
be more or less than their original cost, depending upon the respective
Fund's then-current net asset value.
Each Fund ordinarily will make payment for all shares redeemed within
seven days after receipt by the Transfer Agent of a redemption request in
proper form, except as provided by the rules of the Securities and Exchange
Commission. However, if you have purchased Fund shares by check or through
Dreyfus-AUTOMATIC Asset BuilderRegistration Mark and subsequently submit a
written redemption request to the Transfer Agent, your redemption will be
effective and the redemption proceeds will be transmitted to you promptly
upon bank clearance of your purchase check or
[Page 15]
Dreyfus-AUTOMATIC Asset Builder order, which may take up to eight business
days or more. In addition, each Fund will not honor Redemption Checks under
the Check Redemption Privilege, and will reject requests to redeem shares by
wire or telephone, for a period of eight business days after receipt by the
Transfer Agent of the purchase check or the Dreyfus-AUTOMATIC Asset Builder
order against which such redemption is requested. These procedures will not
apply if your shares were purchased by wire payment, or if you otherwise have
a sufficient collected balance in your account to cover the redemption
request. Prior to the time any redemption is effective, dividends on such
shares will accrue and be payable, and you will be entitled to exercise all
other rights of beneficial ownership. Fund shares will not be redeemed until
the Transfer Agent has received your Account Application.
Each Fund reserves the right to redeem your account at its option
upon not less than 45 days' written notice if your account's net asset value
is $500 or less and remains so during the notice period.
PROCEDURES
You may redeem Fund shares by using the regular redemption procedure
through the Transfer Agent, or through the Check Redemption Privilege or
Telephone Redemption Privilege, which are granted automatically unless you
specifically refuse them by checking the applicable "No" box on the Account
Application. The Check Redemption Privilege and Telephone Redemption
Privilege may be established for an existing account by a separate signed
Shareholder Services Form, or, with respect to the Telephone Redemption
Privilege, by oral request from any of the authorized signatories on the
account by calling 1-800-645-6561. You also may redeem shares through the
Wire Redemption Privilege if you have checked the appropriate box and
supplied the necessary information on the Account Application or have filed a
Shareholder Services Form with the Transfer Agent. If you are a client of a
Selected Dealer, you may redeem Fund shares through the Selected Dealer.
Other redemption procedures may be in effect for clients of certain Service
Agents. Each Fund makes available to certain large institutions the ability
to issue redemption instructions through compatible computer facilities. Each
Fund reserves the right to refuse any request made by wire or telephone,
including requests made shortly after a change of address, and may limit the
amount involved or the number of such requests. Each Fund may modify or
terminate any redemption privilege at any time or charge a service fee upon
notice to shareholders. No such fee currently is contemplated. Shares held
under Keogh Plans, IRAs or other retirement plans, and shares for which
certificates have been issued, are not eligible for the Check Redemption,
Wire Redemption or Telephone Redemption Privilege.
The Telephone Redemption Privilege or Telephone Exchange Privilege
authorizes the Transfer Agent to act on telephone instructions (including
over The Dreyfus TouchRegistration Mark automated telephone system) from any
person representing himself or herself to be you, or a representative of your
Service Agent, and reasonably believed by the Transfer Agent to be genuine.
Each Fund will require the Transfer Agent to employ reasonable procedures,
such as requiring a form of personal identification, to confirm that
instructions are genuine and, if it does not follow such procedures, the Fund
or the Transfer Agent may be liable for any losses due to unauthorized or
fraudulent instructions. Neither a Fund nor the Transfer Agent will be liable
for following telephone instructions reasonably believed to be genuine.
During times of drastic economic or market conditions, you may
experience difficulty in contacting the Transfer Agent by telephone to
request a redemption or exchange of Fund shares. In such cases, you should
consider using the other redemption procedures described herein. Use of these
other redemption procedures may result in your redemption request being
processed at a later time than it would have been if telephone redemption had
been used.
Regular Redemption_Under the regular redemption procedure, you may redeem
shares by written request mailed to The Dreyfus Family of Funds, P.O. Box
9671, Providence, Rhode Island 02940-9671,
[Page 16]
or, if for Dreyfus retirement plan accounts, to The Dreyfus Trust
Company, Custodian, P.O. Box 6427, Providence, Rhode Island 02940-6427.
Redemption requests may be delivered in person only to a Dreyfus Financial
Center. For the location of the nearest Dreyfus Financial Center, please call
one of the telephone numbers listed under "General Information." These
requests will be forwarded to the Fund and will be processed only upon
receipt thereby. Redemption requests must be signed by each shareholder,
including each owner of a joint account, and each signature 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. If you have questions
with respect to signature-guarantees, please call one of the telephone
numbers listed under "General Information."
Redemption proceeds of at least $1,000 will be wired to any member
bank of the Federal Reserve System in accordance with a written
signature-guaranteed request.
Check Redemption Privilege_You may write Redemption Checks drawn on your Fund
account. Redemption Checks may be made payable to the order of any person in
the amount of $500 or more. Redemption Checks should not be used to close
your account. Redemption Checks are free, but the Transfer Agent will impose
a fee for stopping payment of a Redemption Check upon your request or if the
Transfer Agent cannot honor a Redemption Check due to insufficient funds or
other valid reason. You should date your Redemption Checks with the current
date when you write them. Please do not postdate your Redemption Checks. If
you do, the Transfer Agent will honor, upon presentment, even if presented
before the date of the check, all postdated Redemption Checks which are dated
within six months of presentment for payment, if they are otherwise in good
order. If you hold shares in a Dreyfus-sponsored IRA account, you may be
permitted to make withdrawals from your IRA account using checks furnished to
you by The Dreyfus Trust Company. The Check Redemption Privilege is granted
automatically unless you refuse it.
Wire Redemption Privilege_You may request by wire, telephone or letter that
redemption proceeds (minimum $1,000) be wired to your account at a bank which
is a member of the Federal Reserve System, or a correspondent bank if your
bank is not a member. Holders of jointly registered Fund or bank accounts may
have redemption proceeds of not more than $250,000 wired within any 30-day
period. You may telephone redemption requests by calling 1-800-645-6561 or,
if you are calling from overseas, call 516-794-5452. The Statement of
Additional Information sets forth instructions for transmitting redemption
requests by wire.
Telephone Redemption Privilege_You may request by telephone that redemption
proceeds (maximum $150,000 per day) be paid by check and mailed to your
address. You may telephone redemption instructions by calling 1-800-645-6561
or, if you are calling from overseas, call 516-794-5452. The Telephone
Redemption Privilege is granted automatically unless you refuse it.
Redemption Through a Selected Dealer_If you are a customer of a Selected
Dealer, you may make redemption requests to your Selected Dealer. If the
Selected Dealer transmits the redemption request so that it is received by
the Transfer Agent or its designee by 12:00 Noon, New York time, with respect
to the National Municipal Fund, or 5:00 p.m., New York time, with respect to
the Government Money Fund and the Money Fund on a business day, the proceeds
of the redemption ordinarily will be transmitted in Federal Funds on the same
day and the shares will not receive the dividend declared on that day. If a
redemption request is received after such time, but by 8:00 p.m., New York
time, the redemption request will be effective on that day, the shares will
receive the dividend declared on that day and the proceeds of redemption
ordinarily will be transmitted in Federal Funds on the next business day. If
[Page 17]
a redemption request is received after 8:00 p.m., New York time, the
redemption request will be effective on the next business day. It is the
responsibility of the Selected Dealer to transmit a request so that it is
received in a timely manner. The proceeds of the redemption are credited to
your account with the Selected Dealer. See "How to Buy Shares" for a
discussion of additional conditions or fees that may be imposed upon
redemption.
SERVICE PLAN
(GOVERNMENT MONEY FUND AND MONEY FUND)
Class A shares of each of the Government Money Fund and the Money
Fund are subject to a Service Plan adopted pursuant to Rule 12b-1 under the
1940 Act. Under the Service Plan, the Fund directly bears the costs of
preparing, printing and distributing prospectuses and statements of
additional information and of implementing and operating the Service Plan. In
addition, each Fund reimburses (a) the Distributor for payments made for
distributing Class A shares and servicing shareholder accounts ("Servicing")
and (b) The Dreyfus Corporation, Dreyfus Service Corporation, a wholly-owned
subsidiary of The Dreyfus Corporation, and any affiliate of either of them
(collectively, "Dreyfus") for payments made for Servicing, at an aggregate
annual rate of up to .20 of 1% of the value of the Fund's average daily net
assets attributable to Class A. Each of the Distributor and Dreyfus may pay
one or more Service Agents a fee in respect of the respective Fund's Class A
shares owned by shareholders with whom the Service Agent has a Servicing
relationship or for whom the Service Agent is the dealer or holder of record.
The schedule of such fees and the basis upon which such fees will be paid
shall be determined from time to time by the Fund's Board. If a holder of
Class A shares ceases to be a client of a Service Agent, but continues to
hold Class A shares, Dreyfus will act as the Service Agent in respect of such
shareholder and receive payments under the Service Plan for Servicing. The
fees payable for Servicing are payable without regard to actual expenses
incurred.
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 an
amount not to exceed an annual rate of .25 of 1% of the value of the Fund's
average daily net assets attributable to Class A for certain allocated
expenses of providing personal services and/or maintaining shareholder
accounts. The services provided may include personal services relating to
shareholder accounts, such as answering shareholder inquiries regarding the
Fund and providing reports and other information, and services related to the
maintenance of shareholder accounts. As to each of the Government Money Fund
and the Money Fund, at no time will the amount paid under this Plan, together
with amounts otherwise paid with respect to Class A under the Fund's Service
Plan as a "service fee" as defined under the Conduct Rules of the National
Association of Securities Dealers, Inc., exceed the maximum amount permitted
to be paid under said Conduct Rules as a service fee.
DIVIDENDS, DISTRIBUTIONS AND TAXES
Each Fund ordinarily declares dividends from its net investment
income on each day the New York Stock Exchange or, for the Government Money
Fund and the Money Fund only, the Transfer Agent is open for business. The
Fund's earnings for Saturdays, Sundays and holidays are declared as dividends
on the preceding business day. Dividends usually are paid on the last
calendar day of each month and automatically are reinvested in additional
shares at net asset value or, at your option, paid in cash. If you redeem all
shares in your account at any time during the month, all dividends to which
you are entitled will be paid to you along with the proceeds of the
redemption. If you are an omnibus accountholder and indicate in a partial
redemption request that a portion of any accrued dividends to which such
account is entitled belongs to an underlying accountholder who has redeemed
all shares in his or her account, such
[Page 18]
portion of the accrued dividends will be paid to you along with the proceeds
of the redemption. Distributions from net realized securities gains, if any,
generally are declared and paid once a year, but each Fund may make
distributions on a more frequent basis to comply with the distribution
requirements of the Code, in all events in a manner consistent with the
provisions of the 1940 Act. No Fund will make distributions from net realized
securities gains unless capital loss carryovers, if any, have been utilized
or have expired. You may choose whether to receive distributions in cash or
to reinvest in additional shares at net asset value. If you elect to receive
dividends and distributions in cash, and your dividend or distribution check
is returned to the Fund as undeliverable or remains uncashed for six months,
the Fund reserves the right to reinvest such dividends or distributions and
all future dividends and distributions payable to you in additional Fund
shares at net asset value. No interest will accrue on amounts represented by
uncashed distribution or redemption checks. All expenses are accrued daily
and deducted before declaration of dividends to investors. Dividends paid by
each Class will be calculated at the same time and in the same manner and
will be of the same amount, except that the expenses attributable solely to a
Class will be borne exclusively by such Class.
Dividends paid by the National Municipal Fund derived from Taxable
Investments, and dividends paid by each other Fund derived from interest,
together with distributions from any net realized short-term securities gains
and all or a portion of any gains realized from the sale or other disposition
of certain market discount bonds, are subject to Federal income tax as
ordinary income, whether received in cash or reinvested in additional Fund
shares. Distributions from net realized long-term securities gains, if any,
will be taxable as long-term capital gains for Federal income tax purposes if
you are a citizen or resident of the United States. The Code provides that an
individual generally will be taxed on his or her net capital gain at a
maximum rate of 28% with respect to capital gain from securities held for
more than one year but not more than 18 months and at a maximum rate of 20%
with respect to capital gain from securities held for more than 18 months.
Under the Code, interest on indebtedness incurred or continued to purchase or
carry Fund shares which is deemed to relate to exempt-interest dividends is
not deductible.
Except for dividends from Taxable Investments, it is anticipated that
substantially all dividends paid by the National Municipal Fund will not be
subject to Federal income tax. Although all or a substantial portion of the
dividends paid by the National Municipal Fund may be excluded by shareholders
from their gross income for Federal income tax purposes, the National
Municipal Fund may purchase specified private activity bonds, the interest
from which may be (i) a preference item for purposes of the alternative
minimum tax, or (ii) a factor in determining the extent to which a
shareholder's Social Security benefits are taxable. If the National Municipal
Fund purchases such securities, the portion of the Fund's dividends related
thereto will not necessarily be tax exempt to an investor who is subject to
the alternative minimum tax and/or tax on Social Security benefits and may
cause an investor to be subject to such taxes.
Dividends and distributions attributable to interest from direct
obligations of the United States and paid by the Government Money Fund and
the Money Fund to individuals currently are not subject to tax in most
states. Dividends and distributions attributable to interest from other
securities in which the Government Money Fund and the Money Fund may invest
may be subject to state tax. Each of these Funds intends to provide
shareholders with a statement which sets forth the percentage of dividends
and distributions paid by the Fund that is attributable to interest income
from direct obligations of the United States.
Taxable dividends derived from net investment income, together with
distributions from net realized short-term securities gains and all or a
portion of any gains realized from the sale or other disposition of certain
market discount bonds, paid by a Fund to a foreign investor generally are
subject to U.S. nonresident withholding taxes at the rate of 30%, unless the
foreign investor claims the benefit of a lower rate specified in a tax
treaty. Distributions from net realized long-term securities gains paid by a
[Page 19]
Fund to a foreign investor generally will not be subject to U.S. nonresident
withholding tax. However, such distributions may be subject to backup
withholding, as described below, unless the foreign investor certifies his
non-U.S. residency status.
Notice as to the tax status of your dividends and distributions will
be mailed to you annually. You also will receive periodic summaries of your
account which will include information as to dividends and distributions from
securities gains, if any, paid during the year. For the National Municipal
Fund, these statements will set forth the dollar amount of income exempt from
Federal tax and the dollar amount, if any, subject to such tax. These dollar
amounts will vary depending upon the size and length of time of the
investor's investment in the Fund. If the National Municipal Fund pays
dividends derived from taxable income, it intends to designate as taxable the
same percentage of the day's dividend as the actual taxable income earned on
that day bears to total income earned on that day. Thus, the percentage of
the dividend designated as taxable, if any, may vary from day to day.
The exchange of shares of one fund for shares of another is treated
for Federal income tax purposes as a sale of the shares given in exchange by
the shareholder and, therefore, an exchanging shareholder may realize a
taxable gain or loss.
Federal regulations generally require each Fund to withhold ("backup
withholding") and remit to the U.S. Treasury 31% of dividends and
distributions from net realized securities gains of the Fund paid to a
shareholder if such shareholder fails to certify either that the TIN
furnished in connection with opening an account is correct, or that such
shareholder has not received notice from the IRS of being subject to backup
withholding as a result of a failure to properly report taxable dividend or
interest income on a Federal income tax return. Furthermore, the IRS may
notify a Fund to institute backup withholding if the IRS determines a
shareholder's TIN is incorrect or if a shareholder has failed to properly
report taxable dividend and interest income on a Federal income tax return.
A TIN is either the Social Security number, IRS individual taxpayer
identification number, or employer identification number of the record owner
of the account. Any tax withheld as a result of backup withholding does not
constitute an additional tax imposed on the record owner of the account, and
may be claimed as a credit on the record owner's Federal income tax return.
Management believes that each Fund has qualified for the fiscal year
ended November 30, 1997 as a "regulated investment company" under the Code.
Each Fund intends to continue to so qualify if such qualification is in the
best interests of its shareholders. Qualification as a regulated investment
company relieves the Fund of any liability for Federal income tax to the
extent its earnings are distributed in accordance with applicable provisions
of the Code. Each Fund is subject to a non-deductible 4% excise tax, measured
with respect to certain undistributed amounts of taxable investment income
and capital gains.
You should consult your tax adviser regarding specific questions as
to Federal, state and local taxes.
GENERAL INFORMATION
The National Municipal Fund is a series of General Municipal Money
Market Funds, Inc. (the "Company"), an open-end, management investment
company. Each other Fund is a separate open-end, management investment
company. The Government Money Fund, the Company and the Money Fund were
incorporated under Maryland law on April 8, 1982, April 8, 1982 and May 15,
1981, respectively, and commenced operations on February 7, 1983, December
21, 1983 and February 8, 1982, respectively. Before April 30, 1998, the Compan
y's name was General Municipal Money Market Fund, Inc. and, before October 6,
1990, its name was General Tax Exempt Money Market Fund, Inc. The Government
Money Fund, the Money Fund and the Company are authorized to issue 16 billion
shares (15 billion Class A and 1 billion Class B), 25 billion shares (15
billion Class A and 10 billion Class B), and 20 billion shares (15 billion
Class A and 1 billion Class B allocated to the National Municipal Fund),
respectively, par value $.01 per share.
[Page 20]
Each Fund's shares are classified into two classes_Class A and Class
B. Each share has one vote and shareholders will vote in the aggregate and
not by class except as otherwise required by law.
Unless otherwise required by the 1940 Act, ordinarily it will not be
necessary for any Fund to hold annual meetings of shareholders. As a result,
Fund shareholders may not consider each year the election of Board members or
the appointment of auditors. However, the holders of at least 10% of a Fund's
shares outstanding and entitled to vote may require such Fund to hold a
special meeting of shareholders for purposes of removing a Board member from
office. Fund shareholders may remove a Board member by the affirmative vote
of a majority of the Fund's outstanding voting shares. In addition, a Fund's
Board will call a special meeting of shareholders for the purpose of electing
Board members if, at any time, less than a majority of the Board members then
holding office have been elected by shareholders.
The Transfer Agent maintains a record of your ownership and sends
confirmations and statements of account.
Shareholder inquiries may be made to your Service Agent or by writing
to a Fund at 144 Glenn Curtiss Boulevard, Uniondale, New York 11556-0144, or
by calling toll free 1-800-242-8671. In New York City, call 1-718-895-1396;
outside the U.S., call 516-794-5452.
Although each Fund is offering only its own shares, it is possible
that a Fund might become liable for any misstatement in this Prospectus about
any other Fund. Each Fund's Board has considered this factor in approving the
use of this combined Prospectus.
General Municipal Money Market Funds, Inc._The Company is a series fund,
which is a mutual fund divided into separate portfolios, each of which is
treated as a separate entity for certain matters under the 1940 Act and for
other purposes. A shareholder of one portfolio is not deemed to be a
shareholder of any other portfolio. To date, the Company's Board has
authorized the creation of two series of shares. By this Prospectus, shares
of the National Municipal Fund only are being offered. All consideration
received by the Company for shares of one of the portfolios and all assets in
which such consideration is invested will belong to that portfolio (subject
only to the rights of creditors of the Company) and will be subject to the
liabilities related thereto. The income attributable to, and the expenses of,
one portfolio are treated separately from those of the other portfolio.
Expenses attributable to a portfolio are charged against the assets of that
portfolio; other expenses of the Company are allocated among the Company's
portfolios on the basis determined by the Company's Board, including, but not
limited to, proportionately in relation to the net assets of each portfolio.
The Company has the ability to create, from time to time, new series without
shareholder approval.
[Page 21]
APPENDIX
INVESTMENT TECHNIQUES
Borrowing Money_Each Fund may borrow money from banks for temporary or
emergency (not leveraging) purposes in an amount up to 15% of the value of
its total assets (including the amount borrowed) valued at 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 a Fund's
total assets, the Fund will not make any additional investments.
Forward Commitments (National Municipal Fund)_The National Municipal Fund may
purchase Municipal Obligations and other securities on a forward commitment
or when-issued basis, which means that delivery and payment take place a
number of days after the date of the commitment to purchase. The payment
obligation and the interest rate receivable on a forward commitment or
when-issued security are fixed when the Fund enters into the commitment, but
the Fund does not make payment until it receives delivery from the
counterparty. The Fund will commit to purchase such securities only with the
intention of actually acquiring the securities, but the Fund may sell these
securities before the settlement date if it is deemed advisable. The Fund
will set aside in a segregated account permissible liquid assets at least
equal at all times to the amount of the commitments.
CERTAIN PORTFOLIO SECURITIES
U.S. Government Securities (Government Money Fund and Money Fund)_Each of
these Funds may invest in securities issued or guaranteed by the U.S.
Government or its agencies or instrumentalities, which include U.S. Treasury
securities that 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 Treasury;
others by discretionary 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 currently 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.
Repurchase Agreements (Government Money Fund and Money Fund)_Each of these
Funds may enter into repurchase agreements with certain banks or non-bank
dealers. In a repurchase agreement, the Fund buys, and the seller agrees to
repurchase, a security at a mutually agreed upon time and price (usually
within seven days). The repurchase agreement thereby determines the yield
during the purchaser's holding period, while the seller's obligation to
repurchase is secured by the value of the underlying security. Repurchase
agreements could involve risks in the event of a default or insolvency of the
other party to the agreement, including possible delays or restrictions upon
the Fund's ability to dispose of the underlying securities.
Bank Obligations (Money Fund)_The Fund may purchase certificates of deposit,
time deposits, bankers' acceptances and other short-term obligations issued
by domestic banks, foreign subsidiaries or foreign branches of domestic
banks, domestic and foreign branches of foreign banks, and thrift
institutions, savings and loan associations and other banking institutions.
With respect to such securities issued by foreign subsidiaries or foreign
branches of domestic banks, and domestic and foreign branches of foreign
banks, the Fund may be subject to additional investment risks that are
different in some respects from those incurred by a fund which invests only
in debt obligations of U.S. domestic issuers. See "Description of the
Funds_Investment Considerations and Risks_Foreign Securities."
Certificates of deposit are negotiable certificates evidencing the
obligation of a bank to repay funds deposited with it for a specified period
of time.
[Page 22]
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.
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 the drawer to pay the face amount of the
instrument upon maturity. The other short-term obligations may include
uninsured, direct obligations bearing fixed, floating or variable interest
rates.
Commercial Paper (Money Fund)_-The Fund may purchase commercial paper
consisting of short-term, unsecured promissory notes issued to finance
short-term credit needs. The commercial paper purchased by the Fund will
consist only of direct obligations issued by domestic and foreign entities.
The other corporate obligations in which the Fund may invest consist of high
quality, U.S. dollar denominated short-term bonds and notes (including
variable amount master demand notes) issued by domestic and foreign
corporations, including banks.
Floating and Variable Rate Obligations (Money Fund)_The Fund may purchase
floating and variable rate demand notes and bonds, which are 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. Variable rate demand notes include master demand notes which are
obligations that permit the Fund to invest fluctuating amounts, at varying
rates of interest, pursuant to direct arrangements between the Fund, as
lender, and the borrower. These obligations permit daily changes in the
amounts borrowed. Because these obligations are direct lending arrangements
between the lender and borrower, it is not contemplated that such instruments
generally will be traded, and there generally is no established secondary
market for these obligations, although they are redeemable at face value,
plus accrued interest. Accordingly, where these obligations are not secured
by letters of credit or other credit support arrangements, the Fund's right
to redeem is dependent on the ability of the borrower to pay principal and
interest on demand.
Participation Interests (Money Fund)_The Fund may purchase from financial
institutions participation interests in securities in which the Fund may
invest. A participation interest gives the Fund an undivided interest in the
security in the proportion that the Fund's participation interest bears to
the total principal amount of the security. These instruments may have fixed,
floating or variable rates of interest, with remaining maturities of 13
months or less. If the participation interest is unrated, or has been given a
rating below that which is permissible for purchase by the Fund, the
participation interest will be backed by an irrevocable letter of credit or
guarantee of a bank, or the payment obligation otherwise will be
collateralized by U.S. Government securities, or, in the case of unrated
participation interests, The Dreyfus Corporation must have determined that
the instrument is of comparable quality to those instruments in which the
Fund may invest.
Asset-Backed Securities (Money Fund)_The Fund may purchase asset-backed
securities, which are securities issued by special purpose entities whose
primary assets consist of a pool of mortgages, loans, receivables or other
assets. Payment of principal and interest may depend largely on the cash
flows generated by the assets backing the securities and, in certain cases,
supported by letters of credit, surety bonds or other forms of credit or
liquidity enhancements. The value of these asset-backed securities also may
be affected by the creditworthiness of the servicing agent for the pool of
assets, the originator of the loans or receivables or the financial
institution providing the credit support.
Municipal Obligations (National Municipal Fund)_The National Municipal Fund
purchases Municipal Obligations. Municipal Obligations generally include debt
obligations issued to obtain funds for various public purposes as well as
certain industrial development bonds issued by or on behalf of public authorit
ies. Municipal Obligations are classified as general obligation bonds,
revenue bonds and notes. General obligation bonds are secured by the issuer's
pledge of its faith, credit and taxing power
[Page 23]
for the payment of principal and interest. Revenue bonds are payable from the
revenue derived from a particular facility or class of facilities or, in some
cases, from the proceeds of a special excise or other specific revenue
source, but not from the general taxing power. Tax exempt industrial
development bonds, in most cases, are revenue bonds that generally do not
carry the pledge of the credit of the issuing municipality, but generally are
guaranteed by the corporate entity on whose behalf they are issued. Notes are
short-term instruments which are obligations of the issuing municipalities or
agencies and are sold in anticipation of a bond sale, collection of taxes or
receipt of other revenues. Municipal Obligations include municipal
lease/purchase agreements which are similar to installment purchase contracts
for property or equipment issued by municipalities.
Certain Tax Exempt Obligations (National Municipal Fund)_The National
Municipal Fund may purchase floating and variable rate demand notes and
bonds, which 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. Variable rate demand notes
include master demand notes which are obligations that permit the Fund to
invest fluctuating amounts, at varying rates of interest, pursuant to direct
arrangements between the Fund, as lender, and the borrower. These obligations
permit daily changes in the amount borrowed. Frequently, such obligations are
secured by letters of credit or other credit support arrangements provided by
banks. Changes in the credit quality of banks and other financial
institutions that provide such credit or liquidity enhancements to the Fund's
portfolio securities could cause losses to the Fund and affect its share
price. Because these obligations are direct lending arrangements between the
lender and borrower, it is not contemplated that such instruments generally
will be traded, and there generally is no established secondary market for
these obligations, although they are redeemable at face value plus accrued
interest. Accordingly, where these obligations are not secured by letters of
credit or other credit support arrangements, the Fund's right to redeem is
dependent on the ability of the borrower to pay principal and interest on
demand. Each obligation purchased by the Fund will meet the quality criteria
established for the purchase of Municipal Obligations.
Tax Exempt Participation Interests (National Municipal Fund)_The National
Municipal Fund may purchase from financial institutions participation
interests in Municipal Obligations (such as industrial development bonds and
municipal lease/purchase agreements). A participation interest gives the Fund
an undivided interest in the Municipal Obligation in the proportion that the
Fund's participation interest bears to the total principal amount of the
Municipal Obligation. These instruments may have fixed, floating or variable
rates of interest, with remaining maturities of 13 months or less. If the
participation interest is unrated or has been given a rating below that which
otherwise is permissible for purchase by the Fund, it will be backed by an
irrevocable letter of credit or guarantee of a bank that the Fund's Board has
determined meets prescribed quality standards for banks, or the payment
obligation otherwise will be collateralized by U.S. Government securities.
For certain participation interests, the Fund will have the right to demand
payment, on not more than seven days' notice, for all or any part of the
Fund's participation interest in the Municipal Obligation, plus accrued
interest. As to these instruments, the Fund intends to exercise its right to
demand payment only upon a default under the terms of the Municipal
Obligation, as needed to provide liquidity to meet redemptions, or to
maintain or improve the quality of its investment portfolio.
Tender Option Bonds (National Municipal Fund)_The National Municipal Fund may
purchase tender option bonds. A tender option bond is a Municipal Obligation
(generally held pursuant to a custodial arrangement) having a relatively long
maturity and bearing interest at a fixed rate substantially higher than
prevailing short-term tax exempt rates, that has been coupled with the
agreement of a third party, such as a bank, broker-dealer or other financial
institution, pursuant to which such institution grants the security holders
the option, at periodic intervals, to tender their securities to the
institution
[Page 24]
and receive the face value thereof. As consideration for providing the
option, the financial institution receives periodic fees equal to the
difference between the Municipal Obligation's fixed coupon rate and the rate,
as determined by a remarketing or similar agent at or near the commencement
of such period, that would cause the securities, coupled with the tender
option, to trade at par on the date of such determination. Thus, after
payment of this fee, the security holder effectively holds a demand obligation
that bears interest at the prevailing short-term tax exempt rate. The
Dreyfus Corporation, on behalf of the Fund, will consider on an ongoing basis
the creditworthiness of the issuer of the underlying Municipal Obligation, of
any custodian and of the third party provider of the tender option. In
certain instances and for certain tender option bonds, the option may be
terminable in the event of a default in payment of principal or interest on
the underlying Municipal Obligations and for other reasons.
Stand-By Commitments (National Municipal Fund)_The National Municipal Fund
may acquire "stand-by commitments" with respect to Municipal Obligations held
in its portfolio. Under a stand-by commitment, the Fund obligates a broker,
dealer or bank to repurchase, at the Fund's option, specified securities at a
specified price and, in this respect, stand-by commitments are comparable to
put options. The exercise of a stand-by commitment, therefore, is subject to
the ability of the seller to make payment on demand. The Fund will acquire
stand-by commitments solely to facilitate portfolio liquidity and does not
intend to exercise its rights thereunder for trading purposes. The Fund may
pay for stand-by commitments if such action is deemed necessary, thus
increasing to a degree the cost of the underlying Municipal Obligation and
similarly decreasing such security's yield to investors. Gains realized in
connection with stand-by commitments will be taxable.
Taxable Investments (National Municipal Fund)_From time to time, on a
temporary basis other than for temporary defensive purposes (but not to
exceed 20% of the value of the Fund's net assets) or for temporary defensive
purposes, the National Municipal Fund may invest in taxable short-term
investments ("Taxable Investments") consisting of: notes of issuers having,
at the time of purchase, a quality rating within the two highest grades of
Moody's, S&P or Fitch; obligations of the U.S. Government, its agencies or
instrumentalities; commercial paper rated not lower than P-2 by Moody's, A-2
by S&P or F-2 by Fitch; certificates of deposit of U.S. domestic banks,
including foreign branches of domestic banks, with assets of one billion
dollars or more; time deposits; bankers' acceptances and other short-term
bank obligations; and repurchase agreements in respect of any of the
foregoing. Dividends paid by the Fund that are attributable to income earned
by the Fund from Taxable Investments will be taxable to investors. See
"Dividends, Distributions and Taxes." Except for temporary defensive
purposes, at no time will more than 20% of the value of the Fund's net assets
be invested in Taxable Investments. If the Fund purchases Taxable
Investments, it will value them using the amortized cost method and comply
with the provisions of Rule 2a-7 relating to purchases of taxable
instruments. Under normal market conditions, the Fund anticipates that not
more than 5% of the value of its total assets will be invested in any one
category of Taxable Investments. Taxable Investments are more fully described
in the Statement of Additional Information to which reference hereby is made.
Illiquid Securities_Each Fund may invest up to 10% of the value of its net
assets in securities as to which a liquid trading market does not exist,
provided such investments are consistent with the Fund's investment
objective. Such securities may include securities that are not readily
marketable, such as certain securities that are subject to legal or
contractual restrictions on resale, and repurchase agreements providing for
settlement in more than seven days after notice. As to these securities, the
Fund is subject to a risk that should the Fund desire to sell them when a
ready buyer is not available at a price the Fund deems representative of
their value, the value of the Fund's net assets could be adversely affected.
[Page 25]
No person has been authorized to give any information or to make any
representations other than those contained in this Prospectus and in the
Fund's official sales literature in connection with the offer of the Fund's
shares, and, if given or made, such other information or representations must
not be relied upon as having been authorized by the Fund. This Prospectus does
not constitute an offer in any State in which, or
to any person to whom, such offering may not lawfully be made.
[Page 26]
[This Page Intentionally Left Blank]
[Page 27]
General Government Securities
Money Market Fund
General Money Market Fund
General Municipal
Money Market Fund
Combined Prospectus
CLASS A SHARES
Copy Rights 1998 Dreyfus Service Corporation
GMM/p0598A
Dreyfus
[Page 28]
______________________________________________________________________________
COMBINED PROSPECTUS May 1, 1998
GENERAL GOVERNMENT SECURITIES MONEY MARKET FUND
GENERAL MONEY MARKET FUND
GENERAL MUNICIPAL MONEY MARKET FUND
CLASS B SHARES
______________________________________________________________________________
General Government Securities Money Market Fund (the "Government
Money Fund"), General Money Market Fund (the "Money Fund") and General
Municipal Money Market Fund (the "National Municipal Fund") are open-end
management investment companies, known as money market mutual funds (each, a
"Fund"). Each Fund seeks to provide you with as high a level of current
income as is consistent with the preservation of capital and the maintenance
of liquidity and, in the case of the National Municipal Fund, which is exempt
from Federal income tax.
The Dreyfus Corporation professionally manages each Fund's portfolio.
An investment in the Funds is neither insured nor guaranteed by the
U.S. Government. There can be no assurance that the Funds will be able to
maintain a stable net asset value of $1.00 per share.
You can invest, reinvest or redeem shares at any time without charge
or penalty imposed by a Fund.
Fund shares may be purchased only by clients of Service Agents as
described herein. By this Prospectus, each Fund is offering Class B shares.
Another class of Fund shares _ Class A shares _ are offered by the Funds
pursuant to a separate prospectus and are not offered hereby. Class A and
Class B shares are identical, except as to the services offered to, and the
expenses borne by, each Class which may affect performance. If you would like
to obtain information about Class A shares, please write to the address or
call the number set forth below.
Each Fund is a separate investment portfolio with operations and
results that are unrelated to those of each other Fund. This combined
Prospectus has been prepared for your convenience to provide you the
opportunity to consider three investment choices in one document.
This Prospectus sets forth concisely information about each Fund that
you should know before investing. It should be read and retained for future
reference.
The Statement of Additional Information, dated May 1, 1998, which may
be revised from time to time, provides a further discussion of certain areas
in this Prospectus and other matters which may be of interest to some
investors. It has been filed with the Securities and Exchange Commission and
is incorporated herein by reference. The Securities and Exchange Commission
maintains a web site (http://www.sec.gov) that contains the Statement of
Additional Information, material incorporated by reference, and other
information regarding the Funds. For a free copy of the Statement of
Additional Information, write to a Fund at 144 Glenn Curtiss Boulevard,
Uniondale, New York 11556-0144, or call 1-800-645-6561. When telephoning, ask
for operator 144.
Mutual fund shares are not deposits or obligations of, or guaranteed
or endorsed by, any bank, and are not federally insured by the Federal
Deposit Insurance Corporation, the Federal Reserve Board, or any other
agency. Money market mutual fund shares involve certain investment risks,
including the possible loss of principal.
______________________________________________________________________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
______________________________________________________________________________
TABLE OF CONTENTS
Page
Annual Fund Operating Expenses........................... 3
Condensed Financial Information.......................... 4
Yield Information........................................ 5
Description of the Funds................................. 5
Management of the Funds.................................. 9
How to Buy Shares........................................ 10
Shareholder Services..................................... 12
How to Redeem Shares..................................... 15
Distribution Plan........................................ 18
Shareholder Services Plan................................ 18
Dividends, Distributions and Taxes....................... 18
General Information...................................... 20
Appendix................................................. 22
[Page 2]
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average daily net assets)
NATIONAL
GOVERNMENT MONEY MONEY MUNICIPAL
FUND FUND FUND
_________________ ________ ___________
<S> <C> <C>
Management Fees............................................ .50% .50% .50%
12b-1 Fees................................................... .20% .20% .20%
Other Expenses............................................... .35% .35% .41%
Total Fund Operating Expenses............................... 1.05% 1.05% 1.11%
EXAMPLE:
You would pay the following expenses on
a $1,000 investment, assuming (1) 5% annual
return and (2) redemption at the end of
each time period:
1 YEAR $ 11 $ 11 $ 11
3 Years $ 33 $ 33 $ 35
5 Years $ 58 $ 58 $ 61
10 Years $128 $128 $135
</TABLE>
______________________________________________________________________________
THE AMOUNTS LISTED IN THE EXAMPLE SHOULD NOT BE CONSIDERED AS
REPRESENTATIVE OF PAST OR FUTURE EXPENSES AND ACTUAL EXPENSES MAY BE GREATER
OR LESS THAN THOSE INDICATED. MOREOVER, WHILE THE EXAMPLE ASSUMES A 5% ANNUAL
RETURN, EACH FUND'S ACTUAL PERFORMANCE WILL VARY AND MAY RESULT IN AN ACTUAL
RETURN GREATER OR LESS THAN 5%.
______________________________________________________________________________
The purpose of the foregoing table is to assist you in understanding
the costs and expenses borne by each Fund, the payment of which will reduce
investors' annual return. The information in the foregoing table does not
reflect any fee waivers or expense reimbursement arrangements that may be in
effect. Each Fund's Class B shares are charged directly for sub-accounting
services provided by Service Agents (as defined below) at the annual rate of
.05% of the value of the Fund's average daily net assets attributable to
Class B, which is reflected under "Other Expenses" in the foregoing table.
Certain Service Agents may charge their clients direct fees for effecting
transactions in Fund shares; such fees are not reflected in the foregoing
table. For a further description of the various costs and expenses incurred
in the operation of the Funds, as well as expense reimbursement or waiver
arrangements, see "Management of the Funds," "How to Buy Shares,"
"Distribution Plan" and "Shareholder Services Plan."
[Page 3]
CONDENSED FINANCIAL INFORMATION
The information in the following tables has been audited by Ernst
&Young LLP, each Fund's independent auditors. Further financial data, related
notes and reports of independent auditors accompany the Statement of
Additional Information, available upon request.
FINANCIAL HIGHLIGHTS
Contained below for each Fund is per share operating performance data
for a Class B share outstanding, total investment return, ratios to average
net assets and other supplemental data for each period indicated. This
information has been derived from the Fund's financial statements.
<TABLE>
<CAPTION>
Government Money Fund
_______________________________________________________
FISCAL YEAR
ENDED TEN MONTHS ENDED
JANUARY 31, NOVEMBER 30,
_______________________ ___________________
PER SHARE DATA: 1996(1) 1997 1997(2)
________ ______ _______
<S> <C> <C> <C>
Net asset value, beginning of period...................... $ 1.00 $ 1.00 $ 1.00
______ ______ ______
INVESTMENT OPERATIONS:
Investment income-net..................................... .042 .045 .038
______ _____- ______
DISTRIBUTIONS:
Dividends from investment income-net...................... (.042) (.045) (.038)
______ _____- ______
Net asset value, end of period............................ $ 1.00 $ 1.00 $ 1.00
====== ====== ======
TOTAL INVESTMENT RETURN................................... 5.04%(3) 4.58% 4.69%(3)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets................... 1.00%(3) 1.00% 1.00%(3)
Ratio of net investment income to average net assets...... 5.01%(3) 4.48% 4.60%(3)
Decrease reflected in above expense ratios due to undertakings by
The Dreyfus Corporation................................... .10%(3) .08% .05%(3)
Net Assets, end of period (000's omitted)................. $58 $90,175 $364,845
(1) From March 31, 1995 (commencement of initial offering) to January 31, 1996.
(2) Effective February 1, 1997, the Fund has changed its fiscal year end from
January 31 to November 30.
(3) Annualized.
</TABLE>
<TABLE>
<CAPTION>
Money Fund
_______________________________________________________
FISCAL YEAR
ENDED TEN MONTHS ENDED
JANUARY 31, NOVEMBER 30,
_______________________ ___________________
PER SHARE DATA: 1996(1) 1997 1997(2)
________ ______ _______
<S> <C> <C> <C>
Net asset value, beginning of period...................... $ 1.00 $ 1.00 $ 1.00
______ ______ ______
INVESTMENT OPERATIONS:
Investment income-net .................................... .043 .046 .039
______ ______ ______
DISTRIBUTIONS:
Dividends from investment income-net...................... (.043) (.046) (.039)
______ ______ ______
Net asset value, end of period............................ $ 1.00 $ 1.00 $ 1.00
====== ====== ======
TOTAL INVESTMENT RETURN..................................... 5.18%(3) 4.65% 4.83%(3)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets .................. 1.00%(3) 1.00% 1.00%(3)
Ratio of net investment income to average net assets ..... 5.00%(3) 4.56% 4.78%(3)
Decrease reflected in above expense ratios due to
undertakings by The Dreyfus Corporation................... .07%(3) .07% .05%(3)
Net Assets, end of period (000's omitted)................. $50,446 $369,205 $1,231,132
(1) From March 31, 1995 (commencement of initial offering) to January 31, 1996.
(2) Effective February 1, 1997, the Fund changed its fiscal year end from
January 31 to November 30.
(3) Annualized.
</TABLE>
<TABLE>
<CAPTION>
[Page 4]
National Municipal Fund
____________________________________________
FISCAL YEAR ENDED NOVEMBER 30,
____________________________________________
1995(1) 1996 1997
________ ______ ______
<S> <C> <C> <C>
PER SHARE DATA:
Net asset value, beginning of year.................................. $ 1.00 $ 1.00 $ 1.00
_______ _______ _______
INVESTMENT OPERATIONS:
Investment income-net............................................... .020 .027 .028
___-___ _______ _______
DISTRIBUTIONS:
Dividends from investment income - net.............................. (.020) (.027) (.028)
___-___ _______ _______
Net asset value, end of year........................................ $ 1.00 $ 1.00 $ 1.00
======= ======= =======
TOTAL INVESTMENT RETURN............................................. 3.01%(2) 2.70% 2.86%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets............................. 1.10%(2) .85% .95%
Ratio of net investment income to average net assets................ 2.83%(2) 2.65% 2.87%
Decrease reflected in above expense ratios due to
undertakings by The Dreyfus Corporation ............................ .09%(2) .29% .16%
Net Assets, end of year (000's omitted)............................. $3,024 $17,491 $263,008
(1) From March 31, 1995 (commencement of initial offering) to November 30,
1995.
(2) Annualized.
</TABLE>
YIELD INFORMATION
From time to time, each Fund advertises its yield and effective
yield. Both yield figures are based on historical earnings and are not
intended to indicate future performance. It can be expected that these yields
will fluctuate substantially. A Fund's yield refers to the income generated
by an investment in such Fund over a seven-day period (which period will be
stated in the advertisement). This income is then "annualized." That is, the
amount of income generated by the investment during that week is assumed to
be generated each week over a 52-week period and is shown as a percentage of
the investment. The effective yield is calculated similarly, but, when
annualized, the income earned by an investment in the Fund is assumed to be
reinvested. The effective yield will be slightly higher than the yield
because of the compounding effect of this assumed reinvestment. A Fund's
yield and effective yield may reflect absorbed expenses pursuant to any
undertaking that may be in effect. See "Management of the Funds."
As to the National Municipal Fund, tax equivalent yield is calculated
by determining the pre-tax yield which, after being taxed at a stated rate,
would be equivalent to a stated yield or effective yield calculated as
described above.
Yield information is useful in reviewing a Fund's performance, but
because yields will fluctuate, under certain conditions such information may
not provide a basis for comparison with domestic bank deposits, other
investments which pay a fixed yield for a stated period of time, or other
investment companies which may use a different method of computing yield.
Comparative performance information may be used from time to time in
advertising or marketing Fund shares, including data from Lipper Analytical
Services, Inc., Bank Rate Monitortrademark, N. Palm Beach, Fla. 33408, IBC's
Money Fund Reporttrademark, Morningstar, Inc. and other industry
publications.
DESCRIPTION OF THE FUNDS
INVESTMENT OBJECTIVE
The investment objective of the Government Money Fund and the Money
Fund is to provide you with as high a level of current income as is
consistent with the preservation of capital and, in the case of the
Government Money Fund, the maintenance of liquidity. The investment objective
of the National Municipal Fund is to maximize current income exempt from
Federal income tax to the extent consistent
[Page 5]
with the preservation of capital and the maintenance of liquidity. Each
Fund's investment objective cannot be changed without approval by the holders
of a majority (as defined in the Investment Company Act of 1940, as amended
(the "1940 Act")) of such Fund's outstanding voting shares. There can be no
assurance that a Fund's investment objective will be achieved. Each Fund
pursues its investment objective in the manner described below. Securities in
which a Fund invests may not earn as high a level of current income as
long-term or lower quality securities which generally have less liquidity,
greater market risk and more fluctuation in market value.
MANAGEMENT POLICIES
Each Fund seeks to maintain a net asset value of $1.00 per share for
purchases and redemptions. To do so, each Fund uses the amortized cost method
of valuing its securities pursuant to Rule 2a-7 under the 1940 Act, which
Rule includes various maturity, quality and diversification requirements,
certain of which are summarized as follows. In accordance with Rule 2a-7,
each Fund is required to maintain a dollar-weighted average portfolio
maturity of 90 days or less, purchase only instruments having remaining
maturities of 13 months or less and invest only in U.S. dollar denominated
securities determined in accordance with procedures established by the Fund's
Board to present minimal credit risks and, in the case of the Money Fund and
the National Municipal Fund, which 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
instrument was rated by only one such organization) or, if unrated, are of
comparable quality as determined in accordance with procedures established by
the Fund's Board. The nationally recognized statistical rating organizations
currently rating instruments of the type the Money Fund and the National
Municipal Fund may purchase are Moody's Investors Service, Inc. ("Moody's"),
Standard & Poor's Ratings Group ("S&P"), Duff & Phelps Credit Rating Co.,
Fitch IBCA, Inc. ("Fitch") and Thomson BankWatch, Inc., and their rating
criteria are described in the "Appendix" to the Statement of Additional
Information. This discussion concerning investment ratings does not apply to
the Government Money Fund because it invests exclusively in U.S. Government
securities and repurchase agreements in respect thereof. For further
information regarding the amortized cost method of valuing securities, see
"Determination of Net Asset Value" in the Statement of Additional
Information. There can be no assurance a Fund will be able to maintain a
stable net asset value of $1.00 per share.
Each Fund is classified as a diversified investment company.
Government Money Fund _ The Fund invests in securities issued or guaranteed
as to principal and interest by the U.S. Government or its agencies or
instrumentalities, and repurchase agreements in respect of such securities.
See "Appendix _ Certain Portfolio Securities."
Money Fund _ The Fund invests in short-term money market obligations,
including securities issued or guaranteed by the U.S. Government or its
agencies or instrumentalities, time deposits, certificates of deposit,
bankers' acceptances and other short-term obligations issued by domestic
banks, foreign subsidiaries or foreign branches of domestic banks, domestic
and foreign branches of foreign banks and thrift institutions, repurchase
agreements, asset-backed securities, and high quality domestic and foreign
commercial paper and other short-term corporate obligations, including those
with floating or variable rates of interest. The Fund may invest in U.S.
dollar denominated obligations issued or guaranteed by one or more foreign
governments or any of their political subdivisions, agencies or
instrumentalities, including obligations of supranational entities. See
"Appendix _ Certain Portfolio Securities." During normal market conditions,
at least 25% of the value of the Fund's total assets will be invested in bank
obligations. See "Investment Considerations and Risks" below.
National Municipal Fund _ The Fund will invest at least 80% of the value of
its net assets (except when maintaining a temporary defensive position) in
Municipal Obligations. Municipal Obligations are debt obligations issued by
states, territories and possessions of the United States and the District of
[Page 6]
Columbia and their political subdivisions, agencies and instrumentalities, or
multistate agencies or authorities, the interest from which is, in the
opinion of bond counsel to the issuer, exempt from Federal income tax.
Municipal Obligations generally include debt obligations issued to obtain
funds for various public purposes as well as certain industrial development
bonds issued by or on behalf of public authorities. Municipal Obligations
bear fixed, floating or variable rates of interest. See "Appendix _ Certain
Portfolio Securities."
From time to time, the Fund may invest more than 25% of the value of
its total assets in industrial development bonds which, although issued by
industrial development authorities, may be backed only by the assets and
revenues of the non-governmental users. Interest on Municipal Obligations
(including certain industrial development bonds) which are specified private
activity bonds, as defined in the Internal Revenue Code of 1986, as amended
(the "Code"), issued after August 7, 1986, while exempt from Federal income
tax, is a preference item for the purpose of the alternative minimum tax.
Where a regulated investment company receives such interest, a proportionate
share of any exempt-interest dividend paid by the investment company may be
treated as such a preference item to shareholders. The Fund may invest
without limitation in such Municipal Obligations if The Dreyfus Corporation
determines that their purchase is consistent with the Fund's investment
objective.
From time to time, on a temporary basis other than for temporary
defensive purposes (but not to exceed 20% of the value of the Fund's net
assets) or for temporary defensive purposes, the Fund may invest in taxable
money market instruments ("Taxable Investments") of the quality described
under "Appendix _ Certain Portfolio Securities _ Taxable Investments."
INVESTMENT CONSIDERATIONS AND RISKS
General _ Each Fund attempts to increase yields by trading to take advantage
of short-term market variations. This policy is expected to result in high
portfolio turnover but should not adversely affect a Fund since each Fund
usually does not pay brokerage commissions when it purchases short-term debt
obligations, including U.S. Government securities. The value of the portfolio
securities held by each Fund will vary inversely to changes in prevailing
interest rates. Thus, if interest rates have increased from the time a
security was purchased, such security, if sold, might be sold at a price less
than its cost. Similarly, if interest rates have declined from the time a
security was purchased, such security, if sold, might be sold at a price
greater than its purchase cost. In either instance, if the security was
purchased at face value and held to maturity, no gain or loss would be
realized.
Bank Securities (Money Fund Only) _ To the extent the Fund's investments are
concentrated in the banking industry, the Fund will have correspondingly
greater exposure to the risk factors which are characteristic of such
investments. Sustained increases in interest rates can adversely affect the
availability or liquidity and cost of capital funds for a bank's lending
activities, and a deterioration in general economic conditions could increase
the exposure to credit losses. In addition, the value of and the investment
return on the Fund's shares could be affected by economic or regulatory
developments in or related to the banking industry, which industry also is
subject to the effects of competition within the banking industry as well as
with other types of financial institutions. The Fund, however, will seek to
minimize its exposure to such risks by investing only in debt securities
which are determined to be of high quality.
Foreign Securities (Money Fund Only) _ Since the Fund's portfolio may contain
securities issued by foreign governments, or any of their political
subdivisions, agencies or instrumentalities, and by foreign subsidiaries and
foreign branches of domestic banks, domestic and foreign branches of foreign
banks, and commercial paper issued by foreign issuers, the Fund may be
subject to additional investment risks with respect to those securities that
are different in some respects from those incurred by a fund which invests
only in debt obligations of U.S. domestic issuers, although such obligations
may be higher yielding when compared to the securities of U.S. domestic
issuers. Such risks include possible
[Page 7]
future political and economic developments, seizure or nationalization of
foreign deposits, imposition of foreign withholding taxes on interest income
payable on the securities, establishment of exchange controls or adoption of
other foreign governmental restrictions which might adversely affect the
payment of principal and interest on these securities.
Investing in Municipal Obligations (National Municipal Fund) _ The National
Municipal Fund may invest more than 25% of the value of its total assets in
Municipal Obligations which are related in such a way that an economic,
business or political development or change affecting one such security also
would affect the other securities; for example, securities the interest upon
which is paid from revenues of similar types of projects. As a result, the
Fund may be subject to greater risk as compared to a fund that does not
follow this practice.
Certain municipal lease/purchase obligations in which the National
Municipal Fund may invest may contain "non-appropriation" clauses which
provide that the municipality has no obligation to make lease payments in
future years unless money is appropriated for such purpose on a yearly basis.
Although "non-appropriation" lease/purchase obligations are secured by the
leased property, disposition of the leased property in the event of
foreclosure might prove difficult. In evaluating the credit quality of a
municipal lease/purchase obligation that is unrated, The Dreyfus Corporation
will consider, on an ongoing basis, a number of factors including the
likelihood that the issuing municipality will discontinue appropriating
funding for the leased property.
Certain provisions in the Code relating to the issuance of Municipal
Obligations may reduce the volume of Municipal Obligations qualifying for
Federal tax exemption. One effect of these provisions could be to increase
the cost of the Municipal Obligations available for purchase by the Fund and
thus reduce available yield. Shareholders should consult their tax advisers
concerning the effect of these provisions on an investment in the National
Municipal Fund. Proposals that may restrict or eliminate the income tax
exemption for interest on Municipal Obligations may be introduced in the
future. If any such proposal were enacted that would reduce the availability
of Municipal Obligations for investment by the National Municipal Fund so as
to adversely affect Fund shareholders, the National Municipal Fund would
reevaluate its investment objective and policies and submit possible changes
in the Fund's structure to shareholders for their consideration. If
legislation were enacted that would treat a type of Municipal Obligation as
taxable, the National Municipal Fund would treat such security as a
permissible Taxable Investment within the applicable limits set forth herein.
Simultaneous Investments _ Investment decisions for each Fund are made
independently from those of other investment companies advised by The Dreyfus
Corporation. If, however, such other investment companies desire to invest
in, or dispose of, the same securities as a Fund, available investments or
opportunities for sales will be allocated equitably to each investment
company. In some cases, this procedure may adversely affect the size of the
position obtained for or disposed of by the Fund or the price paid or
received by the Fund.
Year 2000 Risks _ Like other mutual funds, financial and business
organizations and individuals around the world, each Fund could be adversely
affected if the computer systems used by The Dreyfus Corporation and the
Fund's other service providers do not properly process and calculate
date-related information and data from and after January 1, 2000. This is
commonly known as the "Year 2000 Problem." The Dreyfus Corporation is taking
steps to address the Year 2000 Problem with respect to the computer systems
that it uses and to obtain assurances that comparable steps are being taken
by the Funds' other major service providers. At this time, however, there can
be no assurance that these steps will be sufficient to avoid any adverse
impact on a Fund.
[Page 8]
MANAGEMENT OF THE FUNDS
Investment Adviser _ The Dreyfus Corporation, located at 200 Park Avenue, New
York, New York 10166, was formed in 1947 and serves as each Fund's investment
adviser. The Dreyfus Corporation is a wholly-owned subsidiary of Mellon Bank,
N.A., which is a wholly-owned subsidiary of Mellon Bank Corporation
("Mellon"). As of March 31, 1998, The Dreyfus Corporation managed or
administered approximately $100 billion in assets for approximately 1.7
million investor accounts nationwide.
The Dreyfus Corporation supervises and assists in the overall
management of each Fund's affairs under separate Management Agreements
related to each Fund, subject to the authority of the Board in accordance
with applicable law.
Mellon is a publicly owned multibank holding company incorporated
under Pennsylvania law in 1971 and registered under the Federal Bank Holding
Company Act of 1956, as amended. Mellon provides a comprehensive range of
financial products and services in domestic and selected international
markets. Mellon is among the twenty-five largest bank holding companies in
the United States based on total assets. Mellon's principal wholly-owned
subsidiaries are Mellon Bank, N.A., Mellon Bank (DE) National Association,
Mellon Bank (MD), The Boston Company, Inc., AFCO Credit Corporation and a
number of companies known as Mellon Financial Services Corporations. Through
its subsidiaries, including The Dreyfus Corporation, Mellon managed more than
$305 billion in assets as of December 31, 1997, including approximately $104
billion in proprietary mutual fund assets. As of December 31, 1997, Mellon,
through various subsidiaries, provided non-investment services, such as
custodial or administration services, for more than $1.532 trillion in
assets, including approximately $60 billion in mutual fund assets.
For the fiscal year ended November 30, 1997, each Fund paid The
Dreyfus Corporation a monthly management fee at the effective annual rate of
.50 of 1% of the value of the Fund's average daily net assets. From time to
time, The Dreyfus Corporation may waive receipt of its fees and/or voluntarily
assume certain expenses of a Fund, which would have the effect of lowering
the expense ratio of such Fund and increasing yield to investors. No Fund
will pay The Dreyfus Corporation at a later time for any amounts it may
waive, nor will a Fund reimburse The Dreyfus Corporation for any amounts it
may assume.
In allocating brokerage transactions, The Dreyfus Corporation seeks
to obtain the best execution of orders at the most favorable net price.
Subject to this determination, The Dreyfus Corporation may consider, among
other things, the receipt of research services and/or the sale of shares of a
Fund or other funds managed, advised or administered by The Dreyfus
Corporation as factors in the selection of broker-dealers to execute
portfolio transactions for each Fund. See "Portfolio Transactions" in the
Statement of Additional Information.
The Dreyfus Corporation may pay the Funds' distributor for
shareholder services from The Dreyfus Corporation's own assets, including
past profits but not including the management fee paid by the Funds. The
Funds' distributor may use part or all of such payments to pay Service Agents
in respect of these services.
Distributor _ Each Fund's distributor is Premier Mutual Fund Services, Inc.
(the "Distributor"), located at 60 State Street, Boston, Massachusetts 02109.
The Distributor's ultimate parent is Boston Institutional Group, Inc.
Transfer and Dividend Disbursing Agent And Custodian _ Dreyfus Transfer,
Inc., a wholly-owned subsidiary of The Dreyfus Corporation, P.O. Box 9671,
Providence, Rhode Island 02940-9671, is each Fund's Transfer and Dividend
Disbursing Agent (the "Transfer Agent"). The Bank of New York, 90 Washington
Street, New York, New York 10286, is each Fund's Custodian.
[Page 9]
HOW TO BUY SHARES
Each Fund's shares may be purchased only by clients of certain
financial institutions (which may include banks), securities dealers
("Selected Dealers"), and other industry professionals such as investment
advisers, accountants and estate planning firms (collectively, "Service
Agents") that have entered into service agreements with the Distributor. For
shareholders who purchase Fund shares from the Distributor, the Distributor
will act as Service Agent. Stock certificates are issued only upon your
written request. No certificates are issued for fractional shares. It is not
recommended that the National Municipal Fund be used as a vehicle for Keogh,
IRA or other qualified plans. Each Fund reserves the right to reject any
purchase order.
The minimum initial investment in each Fund is $2,500, or $1,000 if
you are a client of a Service Agent which maintains an omnibus account in the
relevant Fund and has made an aggregate minimum initial purchase in the Fund
for its customers of $2,500. Subsequent investments must be at least $100.
For the Government Money Fund and the Money Fund, however, the minimum
initial investment is $750 for Dreyfus-sponsored Keogh Plans, IRAs (including
regular IRAs, spousal IRAs for a non-working spouse, Roth IRAs, SEP-IRAs and
rollover IRAs) and 403(b)(7) Plans with only one participant and $500 for
Dreyfus-sponsored Education IRAs, with no minimum for subsequent purchases.
The initial investment must be accompanied by the Account Application. For
full-time or part-time employees of The Dreyfus Corporation or any of its
affiliates or subsidiaries, directors of The Dreyfus Corporation, Board
members of a fund advised by The Dreyfus Corporation, including members of
each Fund's Board, or the spouse or minor child of any of the foregoing, the
minimum initial investment is $1,000. For full-time or part-time employees of
The Dreyfus Corporation or any of its affiliates or subsidiaries who elect to
have a portion of their pay directly deposited into their Fund accounts, the
minimum initial investment is $50. The Government Money Fund and the Money
Fund reserve the right to offer Fund shares without regard to minimum
purchase requirements to employees participating in certain qualified and
non-qualified employee benefit plans or other programs where contributions or
account information can be transmitted in a manner and form acceptable to
such Fund. Each Fund reserves the right to vary further the initial and
subsequent investment minimum requirements at any time.
You may purchase Fund shares by check or wire. Checks should be made
payable to "The Dreyfus Family of Funds" or, if for Dreyfus retirement plan
accounts with respect to the Government Money Fund and the Money Fund, to
"The Dreyfus Trust Company, Custodian." Payments to open new accounts which
are mailed should be sent to The Dreyfus Family of Funds, P.O. Box 9387,
Providence, Rhode Island 02940-9387, together with your Account Application
indicating that Class B shares are being purchased. For subsequent
investments, your Fund account number should appear on the check and an
investment slip should be enclosed and sent to The Dreyfus Family of Funds,
P.O. Box 105, Newark, New Jersey 07101-0105. For Dreyfus retirement plan
accounts, both initial and subsequent investments should be sent to The
Dreyfus Trust Company, Custodian, P.O. Box 6427, Providence, Rhode Island
02940-6427. Neither initial nor subsequent investments should be made by
third party check. Purchase orders may be delivered in person only to a
Dreyfus Financial Center. These orders will be forwarded to the relevant Fund
and will be processed only upon receipt thereby. For the location of the
nearest Dreyfus Financial Center, please call one of the telephone numbers
listed under "General Information." Other purchase procedures may be in
effect for clients of certain Service Agents.
Wire payments may be made if your bank account is in a commercial
bank that is a member of the Federal Reserve System or any other bank having
a correspondent bank in New York City. Immediately available funds may be
transmitted by wire to The Bank of New York together with the applicable
Fund's DDA# as shown below, for purchase of Fund shares in your name:
[Page 10]
DDA # 8900052414/General Government Securities Money Market
Fund, Inc.
DDA # 8900051957/General Money Market Fund, Inc.
DDA # 8900052376/General Municipal Money Market Fund
The wire must include your Fund account number (for new accounts, your
Taxpayer Identification Number ("TIN") should be included instead), account
registration and dealer number, if applicable, and must indicate the Class of
shares being purchased. If your initial purchase of Fund shares is by wire,
please call 1-800-645-6561 after completing your wire payment to obtain your
Fund account number. Please include your Fund account number on the Account
Application and promptly mail the Account Application to the Fund, as no
redemptions will be permitted until the Account Application is received. You
may obtain further information about remitting funds in this manner from your
bank. All payments should be made in U.S. dollars and, to avoid fees and
delays, should be drawn only on U.S. banks. A charge will be imposed if any
check used for investment in your account does not clear. Each Fund makes
available to certain large institutions the ability to issue purchase
instructions through compatible computer facilities.
Fund shares also may be purchased through Dreyfus-AUTOMATIC Asset
BuilderRegistration Mark, the Government Direct Deposit Privilege or the
Payroll Savings Plan described under "Shareholder Services." These services
enable you to make regularly scheduled investments and may provide you with a
convenient way to invest for long-term financial goals. You should be aware,
however, that periodic investment plans do not guarantee a profit and will
not protect an investor against loss in a declining market.
Subsequent investments also may be made by electronic transfer of
funds from an account maintained in a bank or other domestic financial
institution that is an Automated Clearing House member. You must direct the
institution to transmit immediately available funds through the Automated
Clearing House to The Bank of New York with instructions to credit your Fund
account. The instructions must specify your Fund account registration and
your Fund account number preceded by the digits "1111."
Service Agents may receive different levels of compensation for
selling different Classes of shares. Management understands that some Service
Agents may impose certain conditions on their clients which are different
from those described in this Prospectus and, to the extent permitted by
applicable regulatory authority, may charge their clients direct fees. You
should consult your Service Agent in this regard.
Fund shares are sold on a continuous basis at the net asset value per
share next determined after an order in proper form and Federal Funds (monies
of member banks within the Federal Reserve System which are held on deposit
at a Federal Reserve Bank) are received by the Transfer Agent or other entity
authorized to receive orders on behalf of the Fund in written or telegraphic
form. If you do not remit Federal Funds, your payment must be converted into
Federal Funds. This usually occurs within one business day of receipt of a
bank wire and within two business days of receipt of a check drawn on a
member bank of the Federal Reserve System. Checks drawn on banks which are
not members of the Federal Reserve System may take considerably longer to
convert into Federal Funds. Prior to receipt of Federal Funds, your money
will not be invested.
Net asset value per share of each Class is computed by dividing the
value of the Fund's net assets represented by such Class (i.e., the value of
its assets less liabilities) by the total number of shares of such Class
outstanding. See "Determination of Net Asset Value" in the Statement of
Additional Information.
Federal regulations require that you provide a certified TIN upon
opening or reopening an account. See "Dividends, Distributions and Taxes" and
the Account Application for further information concerning this requirement.
Failure to furnish a certified TIN to a Fund could subject you to a $50
penalty imposed by the Internal Revenue Service (the "IRS").
[Page 11]
Government Money Fund and Money Fund _ Each of these Funds determines its net
asset value per share twice each day the New York Stock Exchange or the
Transfer Agent is open for business: as of 5:00 p.m., New York time, and as
of 8:00 p.m., New York time.
If your payments are received in or converted into Federal Funds by
12:00 Noon, New York time, by the Transfer Agent on a business day, you will
receive the dividend declared that day. If your payments are received in or
converted into Federal Funds after 12:00 Noon, New York time, by the Transfer
Agent, you will begin to accrue dividends on the following business day.
Qualified institutions may telephone orders for purchase of Fund
shares of each of these Funds. A telephone order placed with the Distributor
or its designee in New York will become effective at the price determined at
5:00 p.m., New York time, and the shares purchased will receive the dividend
on Fund shares declared on that day, if such order is placed with the
Distributor or its designee in New York by 5:00 p.m., New York time, and
Federal Funds are received by 6:00 p.m., New York time, on that day. A
telephone order placed with the Distributor or its designee in New York after
5:00 p.m., New York time, but by 8:00 p.m., New York time, on a given day
will become effective at the price determined at 8:00 p.m., New York time, on
that day, and the shares purchased will begin to accrue dividends on the next
business day, if Federal Funds are received by 11:00 a.m., New York time, on
the next business day.
The Distributor may pay dealers a fee of up to .5% of the amount
invested through such dealers in each Fund's shares by employees
participating in qualified or non-qualified employee benefit plans or other
programs where (i) the employers or affiliated employers maintaining such
plans or programs have a minimum of 250 employees eligible for participation
in such plans or programs, or (ii) such plan's or program's aggregate
investment in the Dreyfus Family of Funds or certain other products made
available by the Distributor to such plans or programs exceeds $1,000,000
("Eligible Benefit Plans"). Shares of funds in the Dreyfus Family of Funds
then held by Eligible Benefit Plans will be aggregated to determine the fee
payable. The Distributor reserves the right to cease paying these fees at any
time. The Distributor will pay such fees from its own funds, other than
amounts received from the Fund, including past profits or any other source
available to it.
National Municipal Fund _ The National Municipal Fund determines its net
asset value per share twice each day the New York Stock Exchange or the
Transfer Agent is open for business: as of 12:00 Noon, New York time, and as
of 8:00 p.m., New York time.
If your payments are received in or converted into Federal Funds by
12:00 Noon, New York time, on a business day, you will receive the dividend
declared that day. If your payments are received in or converted into Federal
Funds after 12:00 Noon, New York time, you will begin to accrue dividends on
the following business day.
Qualified institutions may telephone orders for purchase of shares of
the National Municipal Fund. A telephone order placed with the Distributor or
its designee in New York will become effective at the price determined at
12:00 Noon, New York time, on a given day, and the shares purchased will
receive the dividend on Fund shares declared on that day, if the telephone
order is placed with the Distributor or its designee by 12:00 Noon, New York
time, and Federal Funds are received by 4:00 p.m., New York time, on that
day. A telephone order placed with the Distributor or its designee after
12:00 Noon, New York time, but by 8:00 p.m., New York time, on a given day
will become effective at the price determined at 8:00 p.m., New York time, on
that day, and the shares purchased will begin to accrue dividends on the next
business day, if Federal Funds are received by 11:00 a.m., New York time, on
the next business day.
SHAREHOLDER SERVICES
The services and privileges described under this heading may not be
available to clients of certain Service Agents and some Service Agents may
impose certain conditions on their clients which are different from those
described in this Prospectus. You should consult your Service Agent in this
regard. In
[Page 12]
addition, use of the privileges noted below may require that the proper forms
and information be filed with and processed by the Transfer Agent.
Fund Exchanges _ Clients of certain Service Agents may purchase, in exchange
for shares of a Fund, shares of certain other funds managed or administered
by The Dreyfus Corporation, to the extent such shares are offered for sale in
the client's state of residence. These funds have different investment
objectives which may be of interest to you. If you desire to use this
service, you should consult your Service Agent or call 1-800-645-6561 to
determine if it is available and whether any conditions are imposed on its
use.
To request an exchange, you or your Service Agent acting on your
behalf must give exchange instructions to the Transfer Agent in writing or by
telephone. Before any exchange, you must obtain and should review a copy of
the current prospectus of the fund into which the exchange is being made.
Prospectuses may be obtained by calling 1-800-645-6561. Except in the case of
personal retirement plans, the shares being exchanged must have a current
value of at least $500; furthermore, when establishing a new account by
exchange, the shares 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 ability to issue exchange instructions by telephone is given
to shareholders of each Fund automatically, unless you check the applicable
"No" box on the Account Application, indicating that you specifically refuse
this Privilege. The Telephone Exchange Privilege may be established for an
existing account by written request signed by all shareholders on the
account, by a separate signed Shareholder Services Form, available by calling
1-800-645-6561, or by oral request from any of the authorized signatories on
the account by calling 1-800-645-6561. If you have established the Telephone
Exchange Privilege, you may telephone exchange instructions (including over
The Dreyfus TouchRegistration Mark automated telephone system) by calling
1-800-645-6561. If you are calling from overseas, call 516-794-5452. See "How
to Redeem Shares _ Procedures." Upon an exchange into a new account, the
following shareholder services and privileges, as applicable and where
available, will be automatically carried over to the fund into which the
exchange is made: Telephone Exchange Privilege, Check Redemption Privilege,
Wire Redemption Privilege, Telephone Redemption Privilege, and the
dividend/capital gain distribution option (except for Dividend Sweep)
selected by the investor.
Shares will be exchanged at the next determined net asset value;
however, a sales load may be charged with respect to exchanges into funds
sold with a sales load. If you are exchanging into a fund that charges a
sales load, you may qualify for share prices which do not include the sales
load or which reflect a reduced sales load, if the shares you are exchanging
were: (a) purchased with a sales load, (b) acquired by a previous exchange
from shares purchased with a sales load, or (c) acquired through reinvestment
of dividends or distributions paid with respect to the foregoing categories
of shares. To qualify, at the time of the exchange you must notify the
Transfer Agent or your Service Agent must notify the Distributor. Any such
qualification is subject to confirmation of your holdings through a check of
appropriate records. See "Shareholder Services" in the Statement of
Additional Information. No fees currently are charged shareholders directly
in connection with exchanges, although each Fund reserves the right, upon not
less than 60 days' written notice, to charge shareholders a nominal
administrative fee in accordance with rules promulgated by the Securities and
Exchange Commission. Each Fund reserves the right to reject any exchange
request in whole or in part. The availability of Fund Exchanges may be
modified or terminated at any time upon notice to shareholders. See
"Dividends, Distributions and Taxes."
Dreyfus Auto-Exchange Privilege _ Dreyfus Auto-Exchange Privilege enables you
to invest regularly (on a semi-monthly, monthly, quarterly or annual basis),
in exchange for shares of a Fund, in shares of certain other funds in the
Dreyfus Family of Funds of which you are a shareholder. The amount you
designate, which can be expressed either in terms of a specific dollar or
share amount ($100 minimum), will be exchanged automatically on the first
and/or fifteenth of the month according to the schedule you
[Page 13]
have selected. Shares will be exchanged at the then-current net asset value;
however, a sales load may be charged with respect to exchanges into funds
sold with a sales load. See "Shareholder Services" in the Statement of
Additional Information. The right to exercise this Privilege may be modified
or canceled by the Fund or the Transfer Agent. You may modify or cancel your
exercise of this Privilege at any time by mailing written notification to The
Dreyfus Family of Funds, P.O. Box 9671, Providence, Rhode Island 02940-9671.
Each Fund may charge a service fee for the use of this Privilege. No such fee
currently is contemplated. For more information concerning this Privilege and
the funds in the Dreyfus Family of Funds eligible to participate in this
Privilege, or to obtain an Auto-Exchange Authorization Form, please call toll
free 1-800-645-6561. See "Dividends, Distributions and Taxes."
Dreyfus-AUTOMATIC Asset BuilderRegistration Mark _ Dreyfus-AUTOMATIC Asset
Builder permits you to purchase Fund shares (minimum of $100 and maximum of
$150,000 per transaction) at regular intervals selected by you. Fund shares
are purchased by transferring funds from the bank account designated by you.
Only an account maintained at a domestic financial institution which is an
Automated Clearing House member may be so designated. To establish a
Dreyfus-AUTOMATIC Asset Builder account, you must file an authorization form
with the Transfer Agent. You may obtain the necessary authorization form from
your Service Agent or by calling 1-800-645-6561. You may cancel your
participation in this Privilege or change the amount of your purchase at any
time by mailing written notification to The Dreyfus Family of Funds, P.O. Box
9671, Providence, Rhode Island 02940-9671, or, if for Dreyfus retirement plan
accounts, to The Dreyfus Trust Company, Custodian, P.O. Box 6427, Providence,
Rhode Island 02940-6427, and the notification will be effective three
business days following receipt. Each Fund may modify or terminate this
Privilege at any time or charge a service fee. No such fee currently is
contemplated.
Government Direct Deposit Privilege _ The Government Direct Deposit Privilege
enables you to purchase Fund shares (minimum of $100 and maximum of $50,000
per transaction) by having Federal salary, Social Security, or certain
veterans', military or other payments from the Federal government,
automatically deposited into your Fund account. You may deposit as much of
such payments as you elect. To enroll in Government Direct Deposit, you must
file with the Transfer Agent a completed Direct Deposit Sign-Up Form for each
type of payment that you desire to include in this Privilege. The appropriate
form may be obtained from your Service Agent or by calling 1-800-645-6561.
Death or legal incapacity will terminate your participation in this
Privilege. You may elect at any time to terminate your participation by
notifying in writing the appropriate Federal agency. Further, a Fund may
terminate your participation upon 30 days' notice to you.
Payroll Savings Plan _ The Payroll Savings Plan permits you to purchase Fund
shares (minimum of $100 per transaction) automatically on a regular basis.
Depending upon your employer's direct deposit program, you may have part or
all of your paycheck transferred to your existing Dreyfus account
electronically through the Automated Clearing House system at each pay
period. To establish a Payroll Savings Plan account, you must file an
authorization form with your employer's payroll department. Your employer
must complete the reverse side of the form and return it to The Dreyfus
Family of Funds, P.O. Box 9671, Providence, Rhode Island 02940-9671. You may
obtain the necessary authorization form by calling 1-800-645-6561. You may
change the amount of purchase or cancel the authorization only by written
notification to your employer. It is the sole responsibility of your
employer, not the Distributor, The Dreyfus Corporation, the Fund, the
Transfer Agent or any other person, to arrange for transactions under the
Payroll Savings Plan. Each Fund may modify or terminate this Privilege at any
time or charge a service fee. No such fee currently is contemplated.
Dividend Options _ Dividend Sweep enables you to invest automatically
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 you are a
shareholder. Shares of the other fund will be purchased at the then-current
net asset value; however, a sales load may be charged with respect to
investments in shares of a fund
[Page 14]
sold with a sales load. If you are investing in a fund that charges a sales
load, you may qualify for share prices which do not include the sales load or
which reflect a reduced sales load. If you are investing in a fund that
charges a contingent deferred sales charge, the shares purchased will be
subject to the contingent deferred sales charge, if any, applicable to the
purchased shares. See "Shareholder Services" in the Statement of Additional
Information. Dividend ACH permits you to transfer electronically dividends or
dividends and capital gain distributions, if any, from a Fund to a designated
bank account. Only an account maintained at a domestic financial institution
which is an Automated Clearing House member may be so designated. Banks may
charge a fee for this service.
For more information concerning these privileges or to request a
Dividend Options Form, please call toll free 1-800-645-6561. You may cancel
these privileges by mailing written notification to The Dreyfus Family of
Funds, P.O. Box 9671, Providence, Rhode Island 02940-9671. To select a new
fund after cancellation, you must submit a new Dividend Options Form.
Enrollment in or cancellation of these privileges is effective three business
days following receipt. These privileges are available only for existing
accounts and may not be used to open new accounts. Minimum subsequent
investments do not apply for Dividend Sweep. Each Fund may modify or
terminate these privileges at any time or charge a service fee. No such fee
currently is contemplated. Shares held under Keogh Plans or IRAs are not
eligible for Dividend Sweep.
Quarterly Distribution Plan _ The Quarterly Distribution Plan permits you to
receive quarterly payments from a Fund consisting of proceeds from the
redemption of shares purchased for your account through the automatic
reinvestment of dividends declared on your account during the preceding
calendar quarter. You may open a Quarterly Distribution Plan by submitting a
request to the Transfer Agent. The Quarterly Distribution Plan may be ended
at any time by you, the Fund or the Transfer Agent. Shares for which
certificates have been issued must be presented before redemption under the
Quarterly Distribution Plan.
Automatic Withdrawal Plan _ The Automatic Withdrawal Plan permits you to
request withdrawal of a specified dollar amount (minimum of $50) on either a
monthly or quarterly basis if you have a $5,000 minimum account. An Automatic
Withdrawal Plan may be established by filing an Automatic Withdrawal Plan
application with the Transfer Agent or by oral request from any of the
authorized signatories on the account by calling 1-800-645-6561. The
Automatic Withdrawal Plan may be ended at any time by you, the Fund or the
Transfer Agent. Shares for which certificates have been issued may not be
redeemed through the Automatic Withdrawal Plan.
Retirement Plans (Government Money Fund and Money Fund Only) _ Each of these
Funds offers a variety of 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. You 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 (except SEP-IRAs), please call 1-800-645-6561; or for SEP-IRAs, 401(k)
Salary Reduction Plans and 403(b)(7) Plans, please call 1-800-322-7880.
HOW TO REDEEM SHARES
GENERAL
You may request redemption of your shares at any time. Redemption
requests should be transmitted to the Transfer Agent as described below. When
a request is received in proper form by the Transfer Agent or other entity
authorized to receive orders on behalf of the Fund, your Fund will redeem the
shares at the next determined net asset value.
None of the Funds imposes a charge when shares are redeemed. Service
Agents may charge their clients a fee for effecting redemptions of Fund
shares. Any certificates representing Fund shares being
[Page 15]
redeemed must be submitted with the redemption request. The value of the
shares redeemed may be more or less than their original cost, depending upon
the respective Fund's then-current net asset value.
Each Fund ordinarily will make payment for all shares redeemed within
seven days after receipt by the Transfer Agent of a redemption request in
proper form, except as provided by the rules of the Securities and Exchange
Commission. However, if you have purchased Fund shares by check or through
Dreyfus-Automatic Asset BuilderRegistration Mark and subsequently submit a
written redemption request to the Transfer Agent, your redemption will be
effective and the redemption proceeds will be transmitted to you promptly
upon bank clearance of your purchase check or Dreyfus-Automatic Asset Builder
order, which may take up to eight business days or more. In addition, each
Fund will not honor Redemption Checks under the Check Redemption Privilege,
and will reject requests to redeem shares by wire or telephone, for a period
of eight business days after receipt by the Transfer Agent of the purchase
check or the Dreyfus-Automatic Asset Builder order against which such
redemption is requested. These procedures will not apply if your shares were
purchased by wire payment, or if you otherwise have a sufficient collected
balance in your account to cover the redemption request. Prior to the time
any redemption is effective, dividends on such shares will accrue and be
payable, and you will be entitled to exercise all other rights of beneficial
ownership. Fund shares will not be redeemed until the Transfer Agent has
received your Account Application.
Each Fund reserves the right to redeem your account at its option
upon not less than 45 days' written notice if your account's net asset value
is $500 or less and remains so during the notice period.
PROCEDURES
You may redeem Fund shares by using the regular redemption procedure
through the Transfer Agent, or through the Check Redemption Privilege or
Telephone Redemption Privilege, which are granted automatically unless you
specifically refuse them by checking the applicable "No" box on the Account
Application. The Check Redemption Privilege and Telephone Redemption
Privilege may be established for an existing account by a separate signed
Shareholder Services Form, or, with respect to the Telephone Redemption
Privilege, by oral request from any of the authorized signatories on the
account by calling 1-800-645-6561. You also may redeem shares through the
Wire Redemption Privilege if you have checked the appropriate box and
supplied the necessary information on the Account Application or have filed a
Shareholder Services Form with the Transfer Agent. If you are a client of a
Selected Dealer, you may redeem Fund shares through the Selected Dealer.
Other redemption procedures may be in effect for clients of certain Service
Agents. Each Fund makes available to certain large institutions the ability
to issue redemption instructions through compatible computer facilities. Each
Fund reserves the right to refuse any request made by wire or telephone,
including requests made shortly after a change of address, and may limit the
amount involved or the number of such requests. Each Fund may modify or
terminate any redemption privilege at any time or charge a service fee upon
notice to shareholders. No such fee currently is contemplated. Shares held
under Keogh Plans, IRAs or other retirement plans, and shares for which
certificates have been issued, are not eligible for the Check Redemption,
Wire Redemption or Telephone Redemption Privilege.
The Telephone Redemption Privilege or Telephone Exchange Privilege
authorizes the Transfer Agent to act on telephone instructions (including
over The Dreyfus TouchRegistration Mark automated telephone system) from any
person representing himself or herself to be you, or a representative of your
Service Agent, and reasonably believed by the Transfer Agent to be genuine.
Each Fund will require the Transfer Agent to employ reasonable procedures,
such as requiring a form of personal identification, to confirm that instructi
ons are genuine and, if it does not follow such procedures, the Fund or the
Transfer Agent may be liable for any losses due to unauthorized or fraudulent
instructions. Neither a Fund nor the Transfer Agent will be liable for
following telephone instructions reasonably believed to be genuine.
[Page 16]
During times of drastic economic or market conditions, you may
experience difficulty in contacting the Transfer Agent by
telephone to request a redemption or exchange of Fund shares. In such cases,
you should consider using the other redemption procedures described herein.
Use of these other redemption procedures may result in your redemption
request being processed at a later time than it would have been if telephone
redemption had been used.
Regular Redemption _ Under the regular redemption procedure, you may redeem
shares by written request mailed to The Dreyfus Family of Funds, P.O. Box
9671, Providence, Rhode Island 02940-9671, or, if for Dreyfus retirement plan
accounts, to The Dreyfus Trust Company, Custodian, P.O. Box 6427, Providence,
Rhode Island 02940-6427. Redemption requests may be delivered in person only
to a Dreyfus Financial Center. For the location of the nearest Dreyfus
Financial Center, please call one of the telephone numbers listed under
"General Information." These requests will be forwarded to the Fund and will
be processed only upon receipt thereby. Redemption requests must be signed by
each shareholder, including each owner of a joint account, and each signature
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. If
you have questions with respect to signature-guarantees, please call one of
the telephone numbers listed under "General Information."
Redemption proceeds of at least $1,000 will be wired to any member
bank of the Federal Reserve System in accordance with a written
signature-guaranteed request.
Check Redemption Privilege _ You may write Redemption Checks drawn on your
Fund account. Redemption Checks may be made payable to the order of any
person in the amount of $500 or more. Redemption Checks should not be used to
close your account. Redemption Checks are free, but the Transfer Agent will
impose a fee for stopping payment of a Redemption Check upon your request or
if the Transfer Agent cannot honor a Redemption Check due to insufficient
funds or other valid reason. You should date your Redemption Checks with the
current date when you write them. Please do not postdate your Redemption
Checks. If you do, the Transfer Agent will honor, upon presentment, even if
presented before the date of the check, all postdated Redemption Checks which
are dated within six months of presentment for payment, if they are otherwise
in good order. If you hold shares in a Dreyfus-sponsored IRA account, you may
be permitted to make withdrawals from your IRA account using checks furnished
to you by The Dreyfus Trust Company. The Check Redemption Privilege is
granted automatically unless you refuse it.
Wire Redemption Privilege _ You may request by wire, telephone or letter that
redemption proceeds (minimum $1,000) be wired to your account at a bank which
is a member of the Federal Reserve System, or a correspondent bank if your
bank is not a member. Holders of jointly registered Fund or bank accounts may
have redemption proceeds of not more than $250,000 wired within any 30-day
period. You may telephone redemption requests by calling 1-800-645-6561 or,
if you are calling from overseas, call 516-794-5452. The Statement of
Additional Information sets forth instructions for transmitting redemption
requests by wire.
Telephone Redemption Privilege _ You may request by telephone that redemption
proceeds (maximum $150,000 per day) be paid by check and mailed to your
address. You may telephone redemption instructions by calling 1-800-645-6561
or, if you are calling from overseas, call 516-794-5452. The Telephone
Redemption Privilege is granted automatically unless you refuse it.
Redemption Through a Selected Dealer _ If you are a customer of a Selected
Dealer, you may make redemption requests to your Selected Dealer. If the
Selected Dealer transmits the redemption
[Page 17]
request so that it is received by the Transfer Agent or its designee by 12:00
Noon, New York time, with respect to the National Municipal Fund, or 5:00
p.m., New York time, with respect to the Government Money Fund and the Money
Fund on a business day, the proceeds of the redemption ordinarily will be
transmitted in Federal Funds on the same day and the shares will not receive
the dividend declared on that day. If a redemption request is received after
such time, but by 8:00 p.m., New York time, the redemption request will be
effective on that day, the shares will receive the dividend declared on that
day and the proceeds of redemption ordinarily will be transmitted in Federal
Funds on the next business day. If a redemption request is received after 8:00
p.m., New York time, the redemption request will be effective on the next
business day. It is the responsibility of the Selected Dealer to transmit a
request so that it is received in a timely manner. The proceeds of the
redemption are credited to your account with the Selected Dealer. See "How to
Buy Shares" for a discussion of additional conditions or fees that may be
imposed upon redemption.
DISTRIBUTION PLAN
Class B shares of each Fund are subject to a Distribution Plan
adopted pursuant to Rule 12b-1 under the 1940 Act. Under each Distribution
Plan, the Fund directly bears the costs of preparing, printing and
distributing prospectuses and statements of additional information and of
implementing and operating the Distribution Plan. In addition, each Fund
reimburses the Distributor for payments made to third parties for
distributing (within the meaning of Rule 12b-1) Class B shares at an
aggregate annual rate of up to .20 of 1% of the value of the Fund's average
daily net assets attributable to Class B.
SHAREHOLDER SERVICES PLAN
Each Fund 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 a fee at the annual rate of
.25 of 1% of the value of the Fund's average daily net assets attributable to
Class B. The services provided may include personal services relating to
shareholder accounts, such as answering shareholder inquiries regarding the
Fund and providing reports and other information, and services related to the
maintenance of shareholder accounts. Under each Fund's Shareholder Services
Plan, the Distributor may make payments to Service Agents in respect of these
services. The Distributor determines the amounts to be paid to Service
Agents.
DIVIDENDS, DISTRIBUTIONS AND TAXES
Each Fund ordinarily declares dividends from its net investment
income on each day the New York Stock Exchange or, for the Government Money
Fund and the Money Fund only, the Transfer Agent is open for business. The
Fund's earnings for Saturdays, Sundays and holidays are declared as dividends
on the preceding business day. Dividends usually are paid on the last
calendar day of each month and automatically are reinvested in additional
shares at net asset value or, at your option, paid in cash. If you redeem all
shares in your account at any time during the month, all dividends to which
you are entitled will be paid to you along with the proceeds of the
redemption. If you are an omnibus accountholder and indicate in a partial
redemption request that a portion of any accrued dividends to which such
account is entitled belongs to an underlying accountholder who has redeemed
all shares in his or her account, such portion of the accrued dividends will
be paid to you along with the proceeds of the redemption. Distributions from
net realized securities gains, if any, generally are declared and paid once a
year, but each Fund may make distributions on a more frequent basis to comply
with the distribution requirements of the Code, in all events in a manner
consistent with the provisions of the 1940 Act. No Fund will make
distributions from net realized securities gains unless capital loss
carryovers, if any, have been utilized or have expired. You may choose whether
to receive distributions in cash or to reinvest in additional shares at net
asset value. If you elect to receive dividends and distributions in cash, and
your dividend or distribution check is returned to the Fund as undeliverable
or remains uncashed for six months,
[Page 18]
the Fund reserves the right to reinvest such dividends or distributions and
all future dividends and distributions payable to you in additional Fund
shares at net asset value. No interest will accrue on amounts represented by
uncashed distribution or redemption checks. All expenses are accrued daily
and deducted before declaration of dividends to investors. Dividends paid by
each Class will be calculated at the same time and in the same manner and
will be of the same amount, except that the expenses attributable solely to a
Class will be borne exclusively by such Class.
Dividends paid by the National Municipal Fund derived from Taxable
Investments, and dividends paid by each other Fund derived from interest,
together with distributions from any net realized short-term securities gains
and all or a portion of any gains realized from the sale or other disposition
of certain market discount bonds, are subject to Federal income tax as
ordinary income, whether received in cash or reinvested in additional Fund
shares. Distributions from net realized long-term securities gains, if any,
will be taxable as long-term capital gains for Federal income tax purposes if
you are a citizen or resident of the United States. The Code provides that an
individual generally will be taxed on his or her net capital gain at a
maximum rate of 28% with respect to capital gain from securities held for
more than one year but not more than 18 months and at a maximum rate of 20%
with respect to capital gain from securities held for more than 18 months.
Under the Code, interest on indebtedness incurred or continued to purchase or
carry Fund shares which is deemed to relate to exempt-interest dividends is
not deductible.
Except for dividends from Taxable Investments, it is anticipated that
substantially all dividends paid by the National Municipal Fund will not be
subject to Federal income tax. Although all or a substantial portion of the
dividends paid by the National Municipal Fund may be excluded by shareholders
from their gross income for Federal income tax purposes, the National
Municipal Fund may purchase specified private activity bonds, the interest
from which may be (i) a preference item for purposes of the alternative
minimum tax, or (ii) a factor in determining the extent to which a
shareholder's Social Security benefits are taxable. If the National Municipal
Fund purchases such securities, the portion of the Fund's dividends related
thereto will not necessarily be tax exempt to an investor who is subject to
the alternative minimum tax and/or tax on Social Security benefits and may
cause an investor to be subject to such taxes.
Dividends and distributions attributable to interest from direct
obligations of the United States and paid by the Government Money Fund and
the Money Fund to individuals currently are not subject to tax in most
states. Dividends and distributions attributable to interest from other
securities in which the Government Money Fund and the Money Fund may invest
may be subject to state tax. Each of these Funds intends to provide
shareholders with a statement which sets forth the percentage of dividends
and distributions paid by the Fund that is attributable to interest income
from direct obligations of the United States.
Taxable dividends derived from net investment income, together with
distributions from net realized short-term securities gains and all or a
portion of any gains realized from the sale or other disposition of certain
market discount bonds, paid by a Fund to a foreign investor generally are
subject to U.S. nonresident withholding taxes at the rate of 30%, unless the
foreign investor claims the benefit of a lower rate specified in a tax
treaty. Distributions from net realized long-term securities gains paid by a
Fund to a foreign investor generally will not be subject to U.S. nonresident
withholding tax. However, such distributions may be subject to backup
withholding, as described below, unless the foreign investor certifies his
non-U.S. residency status.
Notice as to the tax status of your dividends and distributions will
be mailed to you annually. You also will receive periodic summaries of your
account which will include information as to dividends and distributions from
securities gains, if any, paid during the year. For the National Municipal
Fund, these statements will set forth the dollar amount of income exempt from
Federal tax and the dollar amount, if any, subject to such tax. These dollar
amounts will vary depending upon the size and length of time of
[Page 19]
the investor's investment in the Fund. If the National Municipal Fund pays
dividends derived from taxable income, it intends to designate as taxable the
same percentage of the day's dividend as the actual taxable income earned on
that day bears to total income earned on that day. Thus, the percentage of
the dividend designated as taxable, if any, may vary from day to day.
The exchange of shares of one fund for shares of another is treated
for Federal income tax purposes as a sale of the shares given in exchange by
the shareholder and, therefore, an exchanging shareholder may realize a
taxable gain or loss.
Federal regulations generally require each Fund to withhold ("backup
withholding") and remit to the U.S. Treasury 31% of dividends and
distributions from net realized securities gains of the Fund paid to a
shareholder if such shareholder fails to certify either that the TIN
furnished in connection with opening an account is correct, or that such
shareholder has not received notice from the IRS of being subject to backup
withholding as a result of a failure to properly report taxable dividend or
interest income on a Federal income tax return. Furthermore, the IRS may
notify a Fund to institute backup withholding if the IRS determines a
shareholder's TIN is incorrect or if a shareholder has failed to properly
report taxable dividend and interest income on a Federal income tax return.
A TIN is either the Social Security number, IRS individual taxpayer
identification number, or employer identification number of the record owner
of the account. Any tax withheld as a result of backup withholding does not
constitute an additional tax imposed on the record owner of the account, and
may be claimed as a credit on the record owner's Federal income tax return.
Management believes that each Fund has qualified for the fiscal year
ended November 30, 1997 as a "regulated investment company" under the Code.
Each Fund intends to continue to so qualify if such qualification is in the
best interests of its shareholders. Qualification as a regulated investment
company relieves the Fund of any liability for Federal income tax to the
extent its earnings are distributed in accordance with applicable provisions
of the Code. Each Fund is subject to a non-deductible 4% excise tax, measured
with respect to certain undistributed amounts of taxable investment income
and capital gains.
You should consult your tax adviser regarding specific questions as
to Federal, state and local taxes.
GENERAL INFORMATION
The National Municipal Fund is a series of General Municipal Money
Market Funds, Inc. (the "Company"), an open-end, management investment
company. Each other Fund is a separate open-end, management investment
company. The Government Money Fund, the Company and the Money Fund were
incorporated under Maryland law on April 8, 1982, April 8, 1982 and May 15,
1981, respectively, and commenced operations on February 7, 1983, December
21, 1983 and February 8, 1982, respectively. Before April 30, 1998, the
Company's name was General Municipal Money Market Fund, Inc. and, before
October 6, 1990, its name was General Tax Exempt Money Market Fund, Inc. The
Government Money Fund, the Money Fund and the Company are authorized to issue
16 billion shares (15 billion Class A and 1 billion Class B), 25 billion
shares (15 billion Class A and 10 billion Class B), and 20 billion shares
(15 billion Class A and 1 billion Class B allocated to the National Municipal
Fund), respectively, par value $.01 per share.
Each Fund's shares are classified into two classes _ Class A and
Class B. Each share has one vote and shareholders will vote in the aggregate
and not by class except as otherwise required by law.
Unless otherwise required by the 1940 Act, ordinarily it will not be
necessary for any Fund to hold annual meetings of shareholders. As a result,
Fund shareholders may not consider each year the election of Board members or
the appointment of auditors. However, the holders of at least 10% of a Fund's
shares outstanding and entitled to vote may require such Fund to hold a
special meeting of shareholders for purposes of removing a Board member from
office. Fund shareholders may remove a Board member by the affirmative vote
of a majority of the Fund's outstanding voting shares. In addition, a Fund's
[Page 20]
Board will call a special meeting of shareholders for the purpose of electing
Board members if, at any time, less than a majority of the Board members then
holding office have been elected by shareholders.
The Transfer Agent maintains a record of your ownership and sends
confirmations and statements of account.
Shareholder inquiries may be made to your Service Agent or by writing
to a Fund at 144 Glenn Curtiss Boulevard, Uniondale, New York 11556-0144, or
by calling toll free 1-800-242-8671. In New York City, call 1-718-895-1396;
outside the U.S., call 516-794-5452.
Although each Fund is offering only its own shares, it is possible
that a Fund might become liable for any misstatement in this Prospectus about
any other Fund. Each Fund's Board has considered this factor in approving the
use of this combined Prospectus.
General Municipal Money Market Funds, Inc. _ The Company is a series fund,
which is a mutual fund divided into separate portfolios, each of which is
treated as a separate entity for certain matters under the 1940 Act and for
other purposes. A shareholder of one portfolio is not deemed to be a
shareholder of any other portfolio. To date, the Company's Board has
authorized the creation of two series of shares. By this Prospectus, shares
of the National Municipal Fund only are being offered. All consideration
received by the Company for shares of one of the portfolios and all assets in
which such consideration is invested will belong to that portfolio (subject
only to the rights of creditors of the Company) and will be subject to the
liabilities related thereto. The income attributable to, and the expenses of,
one portfolio are treated separately from those of the other portfolio.
Expenses attributable to a portfolio are charged against the assets of that
portfolio; other expenses of the Company are allocated among the Company's
portfolios on the basis determined by the Company's Board, including, but not
limited to, proportionately in relation to the net assets of each portfolio.
The Company has the ability to create, from time to time, new series without
shareholder approval.
[Page 21]
APPENDIX
INVESTMENT TECHNIQUES
Borrowing Money _ Each Fund may borrow money from banks for temporary or
emergency (not leveraging) purposes in an amount up to 15% of the value of
its total assets (including the amount borrowed) valued at 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 a Fund's
total assets, the Fund will not make any additional investments.
Forward Commitments (National Municipal Fund) _ The National Municipal Fund
may purchase Municipal Obligations and other securities on a forward
commitment or when-issued basis, which means that delivery and payment take
place a number of days after the date of the commitment to purchase. The
payment obligation and the interest rate receivable on a forward commitment
or when-issued security are fixed when the Fund enters into the commitment,
but the Fund does not make payment until it receives delivery from the
counterparty. The Fund will commit to purchase such securities only with the
intention of actually acquiring the securities, but the Fund may sell these
securities before the settlement date if it is deemed advisable. The Fund
will set aside in a segregated account permissible liquid assets at least
equal at all times to the amount of the commitments.
CERTAIN PORTFOLIO SECURITIES
U.S. Government Securities (Government Money Fund and Money Fund) _ Each of
these Funds may invest in securities issued or guaranteed by the U.S.
Government or its agencies or instrumentalities, which include U.S. Treasury
securities that 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 Treasury;
others by discretionary 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 currently 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.
Repurchase Agreements (Government Money Fund and Money Fund) _ Each of these
Funds may enter into repurchase agreements with certain banks or non-bank
dealers. In a repurchase agreement, the Fund buys, and the seller agrees to
repurchase, a security at a mutually agreed upon time and price (usually
within seven days). The repurchase agreement thereby determines the yield
during the purchaser's holding period, while the seller's obligation to
repurchase is secured by the value of the underlying security. Repurchase
agreements could involve risks in the event of a default or insolvency of the
other party to the agreement, including possible delays or restrictions upon
the Fund's ability to dispose of the underlying securities.
Bank Obligations (Money Fund) _ The Fund may purchase certificates of
deposit, time deposits, bankers' acceptances and other short-term obligations
issued by domestic banks, foreign subsidiaries or foreign branches of
domestic banks, domestic and foreign branches of foreign banks, and thrift
institutions, savings and loan associations and other banking institutions.
With respect to such securities issued by foreign subsidiaries or foreign
branches of domestic banks, and domestic and foreign branches of foreign
banks, the Fund may be subject to additional investment risks that are
different in some respects from those incurred by a fund which invests only
in debt obligations of U.S. domestic issuers. See "Description of the Funds _
Investment Considerations and Risks _ Foreign Securities."
Certificates of deposit are negotiable certificates evidencing the
obligation of a bank to repay funds deposited with it for a specified period
of time.
[Page 22]
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. 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 the drawer to pay the face amount of the instrument upon maturity.
The other short-term obligations may include uninsured, direct obligations
bearing fixed, floating or variable interest rates.
Commercial Paper (Money Fund) _ The Fund may purchase commercial paper
consisting of short-term, unsecured promissory notes issued to finance
short-term credit needs. The commercial paper purchased by the Fund will
consist only of direct obligations issued by domestic and foreign entities.
The other corporate obligations in which the Fund may invest consist of high
quality, U.S. dollar denominated short-term bonds and notes (including
variable amount master demand notes) issued by domestic and foreign
corporations, including banks.
Floating and Variable Rate Obligations (Money Fund) _ The Fund may purchase
floating and variable rate demand notes and bonds, which are 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. Variable rate demand notes include master demand notes which are
obligations that permit the Fund to invest fluctuating amounts, at varying
rates of interest, pursuant to direct arrangements between the Fund, as
lender, and the borrower. These obligations permit daily changes in the
amounts borrowed. Because these obligations are direct lending arrangements
between the lender and borrower, it is not contemplated that such instruments
generally will be traded, and there generally is no established secondary
market for these obligations, although they are redeemable at face value,
plus accrued interest. Accordingly, where these obligations are not secured
by letters of credit or other credit support arrangements, the Fund's right
to redeem is dependent on the ability of the borrower to pay principal and
interest on demand.
Participation Interests (Money Fund) _ The Fund may purchase from financial
institutions participation interests in securities in which the Fund may
invest. A participation interest gives the Fund an undivided interest in the
security in the proportion that the Fund's participation interest bears to
the total principal amount of the security. These instruments may have fixed,
floating or variable rates of interest, with remaining maturities of 13
months or less. If the participation interest is unrated, or has been given a
rating below that which is permissible for purchase by the Fund, the
participation interest will be backed by an irrevocable letter of credit or
guarantee of a bank, or the payment obligation otherwise will be
collateralized by U.S. Government securities, or, in the case of unrated
participation interests, The Dreyfus Corporation must have determined that
the instrument is of comparable quality to those instruments in which the
Fund may invest.
Asset-Backed Securities (Money Fund) _ The Fund may purchase asset-backed
securities, which are securities issued by special purpose entities whose
primary assets consist of a pool of mortgages, loans, receivables or other
assets. Payment of principal and interest may depend largely on the cash
flows generated by the assets backing the securities and, in certain cases,
supported by letters of credit, surety bonds or other forms of credit or
liquidity enhancements. The value of these asset-backed securities also may
be affected by the creditworthiness of the servicing agent for the pool of
assets, the originator of the loans or receivables or the financial
institution providing the credit support.
Municipal Obligations (National Municipal Fund) _ The National Municipal Fund
purchases Municipal Obligations. Municipal Obligations generally include debt
obligations issued to obtain funds for various public purposes as well as
certain industrial development bonds issued by or on behalf of public
authorities. Municipal Obligations are classified as general obligation bonds,
revenue bonds and
[Page 23]
notes. General obligation bonds are secured by the issuer's pledge of its
faith, credit and taxing power for the payment of principal and interest.
Revenue bonds are payable from the revenue derived from a particular facility
or class of facilities or, in some cases, from the proceeds of a special
excise or other specific revenue source, but not from the general taxing
power. Tax exempt industrial development bonds, in most cases, are revenue
bonds that generally do not carry the pledge of the credit of the issuing
municipality, but generally are guaranteed by the corporate entity on whose
behalf they are issued. Notes are short-term instruments which are
obligations of the issuing municipalities or agencies and are sold in
anticipation of a bond sale, collection of taxes or receipt of other
revenues. Municipal Obligations include municipal lease/purchase agreements
which are similar to installment purchase contracts for property or equipment
issued by municipalities.
Certain Tax Exempt Obligations (National Municipal Fund) _ The National
Municipal Fund may purchase floating and variable rate demand notes and
bonds, which 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. Variable rate demand notes
include master demand notes which are obligations that permit the Fund to
invest fluctuating amounts, at varying rates of interest, pursuant to direct
arrangements between the Fund, as lender, and the borrower. These obligations
permit daily changes in the amount borrowed. Frequently, such obligations are
secured by letters of credit or other credit support arrangements provided by
banks. Changes in the credit quality of banks and other financial
institutions that provide such credit or liquidity enhancements to the Fund's
portfolio securities could cause losses to the Fund and affect its share
price. Because these obligations are direct lending arrangements between the
lender and borrower, it is not contemplated that such instruments generally
will be traded, and there generally is no established secondary market for
these obligations, although they are redeemable at face value plus accrued
interest. Accordingly, where these obligations are not secured by letters of
credit or other credit support arrangements, the Fund's right to redeem is
dependent on the ability of the borrower to pay principal and interest on
demand. Each obligation purchased by the Fund will meet the quality criteria
established for the purchase of Municipal Obligations.
Tax Exempt Participation Interests (National Municipal Fund) _ The National
Municipal Fund may purchase from financial institutions participation
interests in Municipal Obligations (such as industrial development bonds and
municipal lease/purchase agreements). A participation interest gives the Fund
an undivided interest in the Municipal Obligation in the proportion that the
Fund's participation interest bears to the total principal amount of the
Municipal Obligation. These instruments may have fixed, floating or variable
rates of interest, with remaining maturities of 13 months or less. If the
participation interest is unrated or has been given a rating below that which
otherwise is permissible for purchase by the Fund, it will be backed by an
irrevocable letter of credit or guarantee of a bank that the Fund's Board has
determined meets prescribed quality standards for banks, or the payment
obligation otherwise will be collateralized by U.S. Government securities.
For certain participation interests, the Fund will have the right to demand
payment, on not more than seven days' notice, for all or any part of the
Fund's participation interest in the Municipal Obligation, plus accrued
interest. As to these instruments, the Fund intends to exercise its right to
demand payment only upon a default under the terms of the Municipal
Obligation, as needed to provide liquidity to meet redemptions, or to
maintain or improve the quality of its investment portfolio.
Tender Option Bonds (National Municipal Fund) _ The National Municipal Fund
may purchase tender option bonds. A tender option bond is a Municipal
Obligation (generally held pursuant to a custodial arrangement) having a
relatively long maturity and bearing interest at a fixed rate substantially
higher than prevailing short-term tax exempt rates, that has been coupled
with the agreement of a third party, such as a bank, broker-dealer or other
financial institution, pursuant to which such institution
[Page 24]
grants the security holders the option, at periodic intervals, to tender
their securities to the institution and receive the face value thereof. As
consideration for providing the option, the financial institution receives
periodic fees equal to the difference between the Municipal Obligation's
fixed coupon rate and the rate, as determined by a remarketing or similar
agent at or near the commencement of such period, that would cause the
securities, coupled with the tender option, to trade at par on the date of
such determination. Thus, after payment of this fee, the security holder
effectively holds a demand obligation that bears interest at the prevailing
short-term tax exempt rate. The Dreyfus Corporation, on behalf of the Fund,
will consider on an ongoing basis the creditworthiness of the issuer of the
underlying Municipal Obligation, of any custodian and of the third party
provider of the tender option. In certain instances and for certain tender
option bonds, the option may be terminable in the event of a default in
payment of principal or interest on the underlying Municipal Obligations and
for other reasons.
Stand-By Commitments (National Municipal Fund) _ The National Municipal Fund
may acquire "stand-by commitments" with respect to Municipal Obligations held
in its portfolio. Under a stand-by commitment, the Fund obligates a broker,
dealer or bank to repurchase, at the Fund's option, specified securities at a
specified price and, in this respect, stand-by commitments are comparable to
put options. The exercise of a stand-by commitment, therefore, is subject to
the ability of the seller to make payment on demand. The Fund will acquire
stand-by commitments solely to facilitate portfolio liquidity and does not
intend to exercise its rights thereunder for trading purposes. The Fund may
pay for stand-by commitments if such action is deemed necessary, thus
increasing to a degree the cost of the underlying Municipal Obligation and
similarly decreasing such security's yield to investors. Gains realized in
connection with stand-by commitments will be taxable.
Taxable Investments (National Municipal Fund) _ From time to time, on a
temporary basis other than for temporary defensive purposes (but not to
exceed 20% of the value of the Fund's net assets) or for temporary defensive
purposes, the National Municipal Fund may invest in taxable short-term
investments ("Taxable Investments") consisting of: notes of issuers having,
at the time of purchase, a quality rating within the two highest grades of
Moody's, S&P or Fitch; obligations of the U.S. Government, its agencies or
instrumentalities; commercial paper rated not lower than P-2 by Moody's, A-2
by S&P or F-2 by Fitch; certificates of deposit of U.S. domestic banks,
including foreign branches of domestic banks, with assets of one billion
dollars or more; time deposits; bankers' acceptances and other short-term
bank obligations; and repurchase agreements in respect of any of the
foregoing. Dividends paid by the Fund that are attributable to income earned
by the Fund from Taxable Investments will be taxable to investors. See
"Dividends, Distributions and Taxes." Except for temporary defensive
purposes, at no time will more than 20% of the value of the Fund's net assets
be invested in Taxable Investments. If the Fund purchases Taxable
Investments, it will value them using the amortized cost method and comply
with the provisions of Rule 2a-7 relating to purchases of taxable
instruments. Under normal market conditions, the Fund anticipates that not
more than 5% of the value of its total assets will be invested in any one
category of Taxable Investments. Taxable Investments are more fully described
in the Statement of Additional Information to which reference hereby is made.
Illiquid Securities _ Each Fund may invest up to 10% of the value of its net
assets in securities as to which a liquid trading market does not exist,
provided such investments are consistent with the Fund's investment
objective. Such securities may include securities that are not readily
marketable, such as certain securities that are subject to legal or
contractual restrictions on resale, and repurchase agreements providing for
settlement in more than seven days after notice. As to these securities, the
Fund is subject to a risk that should the Fund desire to sell them when a
ready buyer is not available at a price the Fund deems representative of
their value, the value of the Fund's net assets could be adversely affected.
[Page 25]
No person has been authorized to give any information or to make any
representations other than those contained in this Prospectus and in the
Fund's official sales literature in connection with the
offer of the Fund's shares, and, if given or made, such other information or
representations must not be relied upon as having been authorized by the
Fund. This Prospectus does not constitute an offer in any State in which, or
to any person to whom, such offering may not lawfully be made.
[Page 26]
[This Page Intentionally Left Blank]
[Page 27]
General Government Securities
Money Market Fund
General Money Market Fund
General Municipal
Money Market Fund
Combined Prospectus
CLASS B SHARES
Copy Rights 1998 Dreyfus Service Corporation
GMM/p0598B
Dreyfus
[Page 28]
GENERAL GOVERNMENT SECURITIES MONEY MARKET FUND, INC.
GENERAL MONEY MARKET FUND, INC.
GENERAL CALIFORNIA MUNICIPAL MONEY MARKET FUND
GENERAL MINNESOTA MUNICIPAL MONEY MARKET FUND
GENERAL MUNICIPAL MONEY MARKET FUND
GENERAL NEW YORK MUNICIPAL MONEY MARKET FUND
COMBINED PART B
(STATEMENT OF ADDITIONAL INFORMATION)
May 1, 1998
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 Minnesota Municipal Money Market Fund (the
"Minnesota Municipal Fund"), General Municipal Money Market Fund (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 May 1,
1998, 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 investment portfolio with operations and
results that 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 six investment choices in
one document.
TABLE OF CONTENTS
Page
Investment Objective and Management Policies............... B-3
Management of the Funds.................................... B-19
Management Agreements...................................... B-24
Purchase of Shares......................................... B-27
Service Plan and Distribution Plan......................... B-28
Shareholder Services Plans................................. B-30
Redemption of Shares....................................... B-32
Shareholder Services....................................... B-35
Determination of Net Asset Value........................... B-38
Dividends, Distributions and Taxes......................... B-39
Yield Information.......................................... B-41
Portfolio Transactions..................................... B-43
Information About the Funds................................ B-44
Transfer and Dividend Disbursing Agent, Custodian,
Counsel and Independent Auditors......................... B-45
Financial Statements and Reports of Independent Auditors... B-46
Appendix A................................................. B-47
Appendix B................................................. B-50
Appendix C................................................. B-54
Appendix D................................................. B-67
Appendix E................................................. B-74
Appendix F................................................. B-87
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 the Fund
entering into them. 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 $1 billion 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, Minnesota 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 fiscal year ended
November 30, 1997, computed on a monthly basis, was as follows:
<TABLE>
<CAPTION>
Percentage of Value
Moody's Investors Standard California National New York
Fitch IBCA, Service, Inc. & Poor's Ratings Group Municipal Municipal Municipal
Inc.("Fitch") or ("Moody's") or ("S&P") Fund Fund Fund
<S> <C> <C> <C> <C> <C>
F1+/F1 VMIG1/MIG1,P1 SP1+/SP1,A1+/A1 92.9% 93.4% 88.3%
AAA/AA Aaa/Aa AAA/AA 2.7% 3.1% 1.4%
Not Rated Not Rated Not Rated 4.4%* 3.5%* 10.3%*
-------- ------- -------
100.0% 100.0% 100.0%
======== ======= =======
</TABLE>
_______________________________
* 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.
The Minnesota Municipal Fund has not completed its first fiscal year and,
therefore, no such ratings information has been provided for such Fund.
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.
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 discretionary 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 $1
billion. 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 Minnesota Municipal Obligations. (Minnesota Municipal
Fund) Investors should consider carefully the special risks inherent in the
Fund's investment in Minnesota Municipal Obligations. These risks result from
the financial condition of the State of Minnesota and its municipalities. The
structure of Minnesota's economy parallels the structure of the United States'
economy as a whole when viewed at a highly aggregated level of detail.
Diversity and a significant natural resource base are two important
characteristics of the State's economy. However, the State of Minnesota
experienced financial difficulties in the early 1980s because of a downturn in
the State's economy resulting from the national recession. More recently, real
growth has been equal to or greater than national growth. There can be no
assurance that the financial problems referred to or similar future problems
will not affect the market value or marketability of the Minnesota Municipal
Obligations or the ability of the issuer thereof to pay interest or principal
thereon. Investors should review "Appendix D" which sets forth additional
information relating to investing in Minnesota Municipal Obligations.
Investing in New York Municipal Obligations. (New York Municipal Fund)
Investors should consider carefully the special risks inherent in the Fund's
investment in New York Municipal Obligations. 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 E" 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 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
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).
2. Borrow money, except from banks for temporary or emergency (not
leveraging) purposes in an amount up to 15% of the value of the Fund's total
assets (including the amount borrowed) based on the lesser of cost or
market, less liabilities (not including the amount borrowed) at the time the
borrowing is made. While borrowings exceed 5% of the value of the Fund's total
assets, the Fund will not make any additional investments.
3. Pledge its assets, except in an amount up to 15% of the value of its
total assets but only to secure borrowings for temporary or emergency purposes.
4. Sell securities short.
5. Write or purchase put or call options.
6. Underwrite the securities of other issuers.
7. Purchase or sell real estate investment trust securities, commodities,
or oil and gas interests.
8. Make loans to others (except through the purchase of debt obligations
referred to under "Description of the 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 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.
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. 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.
* * * * *
Minnesota Municipal Fund. The Minnesota Municipal Fund has adopted
investment restrictions numbered 1 through 7 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 8 through 13 are not fundamental policies and may be changed by vote of
a majority of the Fund's Board members at any time. The Minnesota Municipal
Fund may not:
1. Borrow money, except to the extent permitted under the 1940 Act (which
currently limits borrowing to no more than 33-1/3% of the value of
the Fund's total assets).
2. Make loans to others, except through the purchase of debt obligations
and the entry into repurchase agreements. However, the Fund may lend its
portfolio securities in an amount not to exceed 33-1/3% of the
value of its total assets. Any loans of portfolio securities will be made
according to guidelines established by the Securities and Exchange
Commission and the Fund's Board.
3. Underwrite the securities of other issuers, except to the extent 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, and except to the extent
the Fund may be deemed an underwriter under the Securities Act of 1933, as
amended, by virtue of disposing of portfolio securities.
4. Purchase or sell real estate, 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.
5. Issue any senior security (as such term is defined in Section
18(f) of the 1940 Act).
6. Purchase securities on margin.
7. 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 temporary defensive purposes, securities issued
by banks and obligations issued or guaranteed by the U.S. Government, its
agencies or instrumentalities.
8. Sell securities short.
9. Invest in companies for the purpose of exercising control.
10. Purchase securities of other investment companies, except to the
extent permitted under the 1940 Act.
11. Pledge, mortgage or hypothecate its assets, except to the extent
necessary to secure permitted borrowings.
12. Purchase securities other than Municipal Obligations and Taxable
Investments as those terms are defined above and in the Fund's Prospectus.
13. Enter into repurchase agreements provided 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 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.
2. Borrow money, except from banks for temporary or emergency (not
leveraging) purposes in an amount up to 15% of the value of the Fund's total
assets (including the amount borrowed) based on the lesser of cost or
market, less liabilities (not including the amount borrowed) at the time the
borrowing is made. While borrowings exceed 5% of the value of the Fund's total
assets, the Fund will not make any additional investments.
3. Pledge, 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.
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.
* * * * *
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 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.
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. 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.
* * * * *
Municipal Funds. For purposes of Investment Restriction No. 7 for the
California Municipal Fund, the Minnesota 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 64 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 55 years old and
her address is c/o New York University School of Law, 40 Washington Square
South, New York, New York 10012.
JOSEPH S. DiMARTINO, Chairman of the Board. Since January 1995, Chairman of the
Board of various funds in the Dreyfus Family of Funds. He also is a
director of Noel Group, Inc., a venture capital company (for which, from
February 1995 until November 1997 he was Chairman of the Board), The
Muscular Dystrophy Association, HealthPlan Services Corporation, a provider
of marketing, administrative and risk management services to health and
other benefit programs, Carlyle Industries, Inc. (formerly, Belding
Heminway Company, Inc.), a button packager and distributor, Century
Business Services, Inc., a provider of various outsourcing functions for
small and medium sized companies, and Staffing Resources, a temporary
placement firm. 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 54 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 65 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 78 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 55 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" remains 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 amount of compensation paid
to each Board member by each Fund for the fiscal year ended November 30, 1997,
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, 1997, are set forth
below.
Total Compensation
Aggregate From Funds and
Compensation Fund Complex Paid
Name of Board Member and Fund from the Fund* to Board Member
CLIFFORD L. ALEXANDER, JR. $ 88, 305 (17)
Government Money Fund $4,500
Money Fund $4,500
California Municipal Fund $3,500
National/Minnesota $5,000
Municipal Fund** $3,750
New York Municipal Fund
PEGGY C. DAVIS $ 78,750 (15)
Government Money Fund $5,000
Money Fund $5,000
California Municipal Fund $3,500
National/Minnesota Municipal $5,500
Fund** $4,000
New York Municipal Fund
JOSEPH S. DiMARTINO $ 597, 128 (94)
Government Money Fund $6,250
Money Fund $6,250
California Municipal Fund $4,375
National/Minnesota Municipal $6,875
Fund** $5,000
New York Municipal Fund
ERNEST KAFKA $ 77,500 (15)
Government Money Fund $5,000
Money Fund $5,000
California Municipal Fund $3,500
National/Minnesota Municipal $5,500
Fund** $4,000
New York Municipal Fund
SAUL B. KLAMAN $ 78,750 (15)
Government Money Fund $5,000
Money Fund $5,000
California Municipal Fund $3,500
National/Minnesota Municipal $5,500
Fund** $4,000
New York Municipal Fund
NATHAN LEVENTHAL $ 78,750 (15)
Government Money Fund $5,000
Money Fund $5,000
California Municipal Fund $3,500
National/Minnesota Municipal $5,500
Fund** $4,000
New York Municipal Fund
_____________________________________
* Amount does not include reimbursed expenses for attending Board meetings,
which amounted to $803 for the Government Money Fund, $1,388 for the Money
Fund, $97 for the California Municipal Fund, $413 for the
National/Minnesota Municipal Fund and $387 for the New York Municipal Fund,
for all Board members as a group.
** The National Municipal Fund and the Minnesota Municipal Fund are separate
portfolios of General Municipal Money Market Funds, Inc.
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.
MICHAEL S. PETRUCELLI, Vice President, Assistant Treasurer and Assistant
Secretary. 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 a Director of GE Investment Services. He is 36 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.
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.
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. He is 28 years old.
CHRISTOPHER J. KELLEY, Vice President and Assistant Secretary. Vice President
and Senior Associate General Counsel of Funds Distributor, Inc., and an
officer of other investment companies advised or adminstered by the
Manager. From April 1994 to July 1996, he was Assistant Counsel at Forum
Financial Group. From October 1992 to March 1994, he was employed by
Putnam Investments in legal and compliance capacities. He is 33 years old.
KATHLEEN K. MORRISEY, Vice President and Assistant Secretary. Manager of
Treasury Services Administration of Funds Distributor, Inc., and an officer
of other investment companies advised or administered by the Manager. From
July 1994 to November 1995, she was a Fund Accountant
for Investors Bank & Trust Company. She is 25 years old.
ELBA VASQUEZ, 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
March 1990 to May 1996, she was employed by the U.S. Trust Company of New
York, where she held various sales and marketing positions. She is 36
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 April 14, 1998.
Set forth in "Appendix F" 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 April 14, 1998.
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
respect to 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 Agreement, other than for the Minnesota Municipal Fund, 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.
With respect to the Minnesota Municipal Fund, the Agreement was approved by the
Fund's initial shareholder on April 8, 1998 and 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 April 8, 1998. 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; Ronald P. O'Hanley III, Vice Chairman;
J. David Officer, Vice Chairman; 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, other than
the Minnesota Municipal Fund, to the Manager for each Fund's last three fiscal
years, including for the Government Money Fund, the Money Fund and the
California Municipal Fund, which changed their fiscal year end to November 30,
the period ended November 30, 1997:
Ten-Month Period
Ended Fiscal Year Ended January 31,
November 30, 1997 1997 1996 1995
Government Money Fund $3,330,297 $3,002,777 $2,622,700 $2,624,643
Money Fund $7,091,891 $5,285,812 $3,172,667 $2,850,622
Four-Month Period
Ended Fiscal Year Ended July 31,
November 30, 1997 1997 1996 1995
California Municipal Fund $ 620,429 $1,836,034 $2,195,288 $2,105,653
Fiscal Year Ended
November 30,
1997 1996 1995
National Municipal Fund $2,127,041 $1,566,276 $1,447,734
New York Municipal Fund $2,599,539 $2,945,172 $2,936,785
The Minnesota Municipal Fund has not completed its first fiscal year.
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, Minnesota
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. The Plan was last so
approved on September 17, 1997 with respect to each Fund, except the Minnesota
Municipal Fund, which so approved the Plan on April 8, 1998. 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 fiscal year ended January 31, 1997, and, because each of these Funds
changed its fiscal year end to November 30, the ten-month period ended November
30, 1997:
<TABLE>
<CAPTION>
Total Amount
Name of Fund Paid Pursuant to Serivce Printing and
Plan Distributor Payments Dreyfus Payments Implementation
- ------------ ------------------------ -------------------- ---------------- --------------
Ten-Month Ten-Month Ten-Month Ten-Month
Period Fiscal Year Period Fiscal Year Period Fiscal Year Period Fiscal Year
Ended Ended Ended Ended Ended Ended Ended Ended
November January 31, November January 31, November January 31, November January 31,
30, 1997 1997 30, 1997 1997 30, 1997 1997 30, 1997 1997
----------------------- ----------------------- ----------------------- -----------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Government
Money Fund
- Class A $2,554,860 $1,937,170 $1,687,230 $ 881,905 $ 867,630 $1,047,607 - $ 7,658
Money Fund
- Class $3,936,117 $2,627,518 $2,602,009 $1,160,113 $1,325,410 $1,454,173 $ 8,698 $ 13,232
</TABLE>
Set forth below are the total amounts paid by each Fund, other than the
Minnesota Municipal Fund, to the Distributor pursuant to its Distribution Plan
with respect to Class B for the Fund's last fiscal year, including for the
Government Money Fund, the Money Fund and the California Municipal Fund, which
changed their fiscal year end to November 30, the period ended
November 30, 1997:
Total Amount Paid
Name of Fund Pursuant to Distribution Plan
Ten-Month Period Fiscal Year
Ended November Ended January
30, 1997 31, 1997
Government
Money Fund
- Class B $464,489 $153,504
Money Fund
- Class B $1,511,346 $660,152
Four-Month Period Fiscal Year
Ended November Ended July 31,
30, 1997 1997
California
Municipal Fund
- Class B $1,747 $7,812
Fiscal Year
Ended
November 30,
1997
National
Municipal Fund
- Class B $335,438
New York
Municipal Fund
- Class B $80,288
The Minnesota Municipal Fund has not completed its first fiscal year.
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. The Shareholder Services
Plan was last so approved on September 17, 1997 with respect to each Fund,
except the Minnesota Municipal Fund, which so approved the Shareholder Services
Plan on April 8, 1998. 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, other than
Minnesota Municipal 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 last fiscal year, including for the Government Money Fund, the
Money Fund and the California Municipal Fund, which changed their fiscal year
end to November 30, the period ended November 30, 1997:
<TABLE>
<CAPTION>
Total Amount
Name of Fund Payable Pursuant to Amount Reimbursed Pursuant to
and Class Shareholder Services Plan Undertaking Net Amount Paid by Fund
- ------------ ------------------------- ----------------------------- ------------------------
Ten-Month Period Ten-Month Period Ten-Month Period
Ended Fiscal Year Ended Ended Fiscal Year Ended Ended Fiscal Year Ended
November 30, 1997 January 31, 1997 November 30, 1997 January 31, 1997 November 30, 1997 January 31, 1997
----------------- ----------------- ----------------- ----------------- ----------------- -----------------
<S> <C> <C> <C> <C> <C> <C>
Government
Money Fund
- - Class A $ 228,811 $215,006 $ -0- $ - 0 - $ 228,811 $215,006
- - Class B $ 580,611 $191,880 $112,572 $ 62,819 $ 468,039 $129,061
Money Fund
- - Class A $ 331,353 $363,543 $ -0- $ -0- $ 331,353 $363,543
- - Class B $1,899,183 $825,189 $401,679 $243,136 $1,487,504 $582,053
Total Amount
Name of Fund Payable Pursuant to Amount Reimbursed Pursuant to
and Class Shareholder Services Plan Undertaking Net Amount Paid by Fund
- ------------ ------------------------- ----------------------------- ------------------------
Four-Month Period Four-Month Period Four-Month Period
Ended Fiscal Year Ended Ended Fiscal Year Ended Ended Fiscal Year Ended
November 30, 1997 July 31, 1997 November 30, 1997 November 30, 1997 November 30, 1997 July 31, 1997
----------------- ----------------- ----------------- ----------------- ----------------- -----------------
California
Municipal Fund
- - Class A $149,000 $217,509 $ -0- $ -0- $149,000 $217,509
- - Class B $ 2,620 $ 11,719 $ 1,139 $2,734 $ 1,481 $ 8,985
Fiscal Fiscal Fiscal
Year Year Year
Ended Ended Ended
November November November
30, 1997 30, 1997 30, 1997
National
Municipal Fund
- - Class A $ 74,764 $ -0- $ 74,764
- - Class B $419,335 $261,396 $157,939
New York
Municipal Fund
- - Class A $429,622 $ -0- $429,622
- - Class B $100,360 $ 33,165 $ 67,195
The Minnesota Municipal Fund has not completed its first fiscal
year.
</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,
Minnesota 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 Touchr 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.
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, IRAs set up
under a Simplified Employee Pension Plan ("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 (except SEP-IRAs), 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 for subsequent purchases.
The minimum initial investment is $750 for Dreyfus-sponsored
Keogh Plans, IRAs (including regular IRAs, spousal IRAs for a non-
working spouse, Roth IRAs, SEP-IRAs and rollover IRAs) and
403(b)(7) Plans with only one participant and $500 for Education
IRAs, with no minimum for subsequent purchases.
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 (other than the Minnesota
Municipal Fund which has not completed its first fiscal year) has
qualified as a "regulated investment company" under the Internal
Revenue Code of 1986, as amended (the "Code"), for the fiscal
year ended November 30, 1997, 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.
With respect to the Minnesota Municipal Fund, dividends paid
by the Fund to a Minnesota resident are not subject to the
Minnesota personal income tax to the extent that the dividends
are attributable to income received by the Fund as interest from
Minnesota Municipal Obligations, provided such attributable
dividends represent 95% or more of the exempt-interest dividends
that are paid by the Fund. Moreover, dividends paid by the Fund
to a Minnesota resident are not subject to the Minnesota personal
income tax to the extent that the dividends are attributable to
income received by the Fund as interest from the Fund's
investment in direct U.S. Government obligations. Dividends and
distributions by the Fund to a Minnesota resident that are
attributable to most other sources are subject to the Minnesota
personal income tax. Dividends and distributions from the Fund
will be included in the determination of taxable net income of
corporate shareholders who are subject to Minnesota income
(franchise) taxes. In addition, dividends attributable to
interest received by the Fund that is a preference item for
Federal income tax purposes, whether or not such interest is from
a Minnesota Municipal Obligation, may be subject to the Minnesota
alternative minimum tax. The shares of the Fund are not subject
to property taxation by Minnesota or its political subdivisions.
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 November 30, 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 4.84% 4.96%
Class B 4.65% / 4.76% /
4.59%* 4.69%*
Money Fund
Class A 4.94% 5.06%
Class B 4.78% / 4.89% /
4.72%* 4.83%*
California Municipal
Fund 3.17% 3.22%
Class A 2.83% / 2.76%* 2.87% / 2.80%*
Class B
National Municipal Fund
Class A 3.33% 3.38%
Class B 2.98% / 2.87%* 3.02% / 2.91%*
New York Municipal Fund
Class A 3.13% 3.18%
Class B 2.86% / 2.75%* 2.90% / 2.79%*
________________
* 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 November 30,
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 5.79%
Class B 5.17% / 5.04%*
Based upon a 1997 Federal tax rate of 39.60%, the tax
equivalent yield for the seven-day period ended November 30, 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 5.51%
Class B 4.93% / 4.75%*
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 November 30, 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 5.84%
Class B 5.34% / 5.13%*
______________
* 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.
The Minnesota Municipal Fund has not completed its first
fiscal year, therefore, no yield data have been provided for the
Fund.
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, and may 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.
The Minnesota Municipal Fund and the National Municipal Fund
are separate series of General Municipal Money Market Funds, Inc.
(the "Company"). Rule 18f-2 under the 1940 Act provides that any
matter required to be submitted under the provisions of the 1940
Act or applicable state law or otherwise to the holders of the
outstanding voting securities of an investment company, such as
the Company, will not be deemed to have been effectively acted
upon unless approved by the holders of a majority of the
outstanding shares of each series affected by such matter. Rule
18f-2 further provides that a series shall be deemed to be
affected by a matter unless it is clear that the interests of
each series in the matter are identical or that the matter does
not affect any interest of such series. The Rule exempts the
selection of independent accountants and the election of Board
members from the separate voting requirements of the Rule.
Each Fund sends annual and semi-annual financial statements
to all its shareholders.
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 its last fiscal year, including for the Government Money
Fund, the Money Fund and the California Municipal Fund, which
changed their fiscal year end to November 30, the period ended
November 30, 1997, was as follows:
Ten-Month Period Fiscal Year
Ended November 30, Ended January
1997 31, 1997
Government Money Fund $ 50,005 $ 58,897
Money Fund $156,866 $213,208
Four-Month Period Fiscal Year
Ended November 30, Ended July 31,
1997 1997
California Municipal Fund $ 33,644 $114,834
Fiscal Year
Ended November 30,
1997
National Municipal Fund $161,750
New York Municipal Fund $176,157
The Minnesota Municipal Fund has not completed its first
fiscal year.
The Bank of New York, 90 Washington Street, New York, New
York 10286, is each Fund's custodian. The Bank of New York has
no part in determining the investment policies of each Fund or
which securities are to be purchased or sold by the Fund.
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, 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 report(s) for
the Fund(s) in which you are a shareholder.
The Minnesota Municipal Fund has not completed its first
fiscal year.
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 IBCA, Inc. ("Fitch"), Duff & Phelps Credit
Rating Co. ("Duff"), 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 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.
Fitch also assigns a rating to certain international and
U.S. banks. A Fitch bank rating represents Fitch'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, Fitch uses a dual rating system comprised
of Legal Ratings and Individual Ratings. In addition, Fitch
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
Fitch to be a prime factor in its assessment of credit risk.
Individual Ratings, which range in gradations from A through E,
represent Fitch'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 certain 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.
AA
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.
Aa
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.
AA
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 Bank-ruptcy 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 MINNESOTA MUNICIPAL OBLIGATIONS
RISK FACTORS -- INVESTING IN MINNESOTA MUNICIPAL OBLIGATIONS
State Government. The State of Minnesota was formally
organized as a territory in 1849 and was admitted to the Union in
1858 as the 32nd state. Bordered by Canada on the north, Lake
Superior and Wisconsin on the east, Iowa on the south, and North
and South Dakota on the west, it is the 12th largest and 20th
most populous state in the Union.
The Minnesota Constitution organizes State government into
three branches: Executive, Legislative and Judicial. The
Legislative Branch is composed of a Senate and a House of
Representatives. Fiscal administration is performed by the
Department of Finance under the control and supervision of the
Commissioner of Finance.
State and State-Related Indebtedness. The Minnesota
Constitution authorizes public debt to be incurred for the
acquisition and betterment of public land, buildings and other
improvements of a capital nature or for appropriations or loans
to Minnesota state agencies or political subdivisions for this
purpose, as the Legislature by the three-fifths vote of each
House may direct, and to finance the development of agricultural
resources of the State by extending credit on real estate
security, as the Legislature may direct. All such debt is
evidenced by the issuance of State of Minnesota bonds maturing
within 20 years of their date of issue, for which the full faith
and credit and taxing powers of the State are irrevocably
pledged. There is no limitation as to the amount or interest
rate of such general obligation issues.
As of August 1, 1997, the outstanding principal amount of
all Minnesota general obligation bonds was approximately $2.2
billion.
The Minnesota Constitution limits Minnesota general
obligation debt to (i) short-term debt for Minnesota operating
purposes, (ii) short-term debt for making loans to school
districts and (iii) voter-approved long-term debt.
Short-term debt for operating purposes is limited to an
amount not in excess of 15 percent of undedicated revenues
received during the preceding fiscal year and must be issued only
to meeting obligations incurred pursuant to appropriation and
repaid during the fiscal year in which incurred. The May, 1995,
end of the first special session cash flow analysis for
Minnesota's Statutory General Fund indicates that Minnesota will
have a positive cash flow balance during the Current Biennium
which began on July 1, 1995 and ends June 30, 1997. Minnesota
has no short-term debt outstanding and, therefore, Minnesota does
not expect to do any short-term borrowing for cash flow purposes
during the Current Biennium. A more recent cash flow analysis is
not available. The Department of Finance is in the process of
developing a new cash flow forecasting model and expects to do
its next cash flow analysis in connection with the November, 1996
revenue and expenditure forecast.
There are also various Minnesota authorities and special
purpose agencies created by the state which issue bonds secured
by specific revenues. Such debt is not a general obligation of
the State of Minnesota.
Constitutional and Statutory Provisions Relating to
Minnesota and Local Funding. Minnesota revenues in Minnesota are
generated primarily from individual income taxes, corporate
franchise taxes, sales and use taxes, insurance gross earnings
taxes, estate taxes, motor vehicle excise taxes, excise taxes on
liquor and tobacco, mortgage taxes, deed taxes, legalized
gambling taxes, rental motor vehicle taxes, 900 telephone service
taxes, taconite and iron ore taxes, and health care provider
taxes. In addition to the major taxes described above, other
sources of non-dedicated revenue include minor taxes, 60% of
Minnesota's lottery net proceeds, unrestricted grants, fees and
charges of Minnesota state agencies and departments, and
investment income. County, municipal and certain special purpose
districts (such as water, flood or mosquito control districts)
are authorized to levy property taxes within specified
legislative limits. A portion of Minnesota's revenues is
allocated from state government to other governmental units
within Minnesota such as municipal and county governments, school
districts and state agencies through a complex series of
appropriations and financial aid formulas. This financial
interdependency of the Minnesota state government with other
units of government, subject all levels of government, in varying
degrees, to fluctuations in Minnesota's overall economy.
Minnesota's constitutional prescribed fiscal period is a
biennium, and Minnesota operates on a biennial budget basis with
revenues created in the period in which they are collected and
expenditures debited in the period in which the corresponding
liabilities are incurred. The biennium begins on July 1st of the
odd numbered year and runs through June 30th of the next odd
numbered year.
Minnesota's ability to appropriate funds is limited by the
Minnesota Constitution, which directs that Minnesota government
shall not in any biennium appropriate funds in excess of
projected tax revenues from all sources. Minnesota is authorized
to levy additional taxes to resolve any inadvertent shortfalls.
Appropriations for each biennium are enacted during the
final legislative session of the immediately preceding biennium.
A revenue forecast is prepared during the legislative session to
provide the legislature with updated information for the
appropriations process. During each biennium, regular forecasts
of revenues and expenditures are prepared.
Minnesota's biennial appropriation process relies on revenue
forecasting as the basis for establishing aggregate expenditure
levels. Risks are inherent in the revenue and expenditure
forecasts. Assumptions about U.S. economic activity and federal
tax and expenditure policies underlie these forecasts. Any
federal law changes that increase federal income taxes or reduce
federal spending programs may adversely affect these forecasts.
Finally, even if economic and federal tax assumptions are
correct, revenue forecasts are still subject to some normal level
of error. The correctness of revenue forecasts and the strength
of Minnesota's overall economy may restrict future aid or
appropriations from Minnesota government to other units of
government.
Prior to the Current Biennium, Minnesota law established a
Budget Reserve and Cash Flow Account in the Accounting General
Fund which served two functions. However, in 1995 the Minnesota
Legislature departed the Budget Reserve and Cash Flow Account
into two separate accounts: the Cash Flow Account and the Budget
Reserve Account, each having a different function. The Cash Flow
Account was established in the General Accounting Fund for the
purpose of providing sufficient cash balances to cover monthly
revenue and expenditure imbalances. The use of funds from the
Cash Flow Account is governed by statute. The Cash Flow Account
balance is set for the Current Biennium at $350 million. No
provision has been made for increasing the balance of the Cash
Flow Account from increases in forecast revenues over forecast
expenditures. The Budget Reserve Account was established in the
Accounting General Fund for the purpose of reserving funds to
cushion the State from an economic downturn. The use of funds
from the Budget Reserve Account and the allocation of surplus
forecast balances to the Budget Reserve Account are governed by
statute. The Budget Reserve Account balance is set for the
Current Biennium at $270 million.
For the fiscal year ended June 30, 1995, net revenues
received were $8.984 billion. After total expenditures and net
transfers of $8.894 billion, Fiscal Year 1995 ended with an
Unrestricted Accounting General Fund balance of $445 million and
an Unreserved Accounting General Fund balance of $1.021 million.
For the fiscal year ended June 30, 1996, total revenues are
estimated to be approximately $9.237 billion. Total expenditures
and transfers are estimated at $9.363 billion and after deducting
a Cash Flow Account appropriations carry forward of $350 million
and a Budget Reserve Account carry forward of $220 million, it is
estimated that an Unrestricted Accounting General Fund balance of
$324 million will remain.
For the fiscal year ended June 30, 1997, total revenues are
estimated to have been approximately $9.215 billion. Total
expenditures and transfers are estimated at $9.488 billion and
after deducting a Cash Flow Account appropriations carry forward
of $350 million and a Budget Reserve Account carry forward of
$270 million, it is estimated that an Unrestricted Accounting
General Fund balance of $1.025 million will remain.
As of February 1997 total revenues for the next biennium,
which begins on July 1, 1997 and ends on June 30, 1999, are
estimated to be approximately $10.163 billion for fiscal year
1998 and $10.589 billion for fiscal year 1999. Further revenue
estimates for the next biennium will be available in the middle
part of June 1997.
In 1992 the Minnesota Legislature established the
MinnesotaCarer program to provide subsidized health care
insurance for long-term uninsured Minnesotans, reform individual
and small group health insurance regulations, create a health
care analysis unit to collect condition-specific data about
health care practices in order to develop practice parameters for
health care providers, implement certain cost containment
measures into the system, and establish an office of rural health
to ensure the health care needs of all Minnesotans are being met.
The program is not part of the Accounting General Fund. A
separate account, called the Health Care Access Fund, has been
established in Minnesota's Special Reserve Fund to account for
revenues and expenditures for the MinnesotaCarer program.
Program expenditures are limited to revenues received in the
Health Care Access Fund. Program revenues are derived from
dedication of insurance premiums paid by individuals, five cents
of the state cigarette tax through December 31, 1993, and
permanent taxes including a 2% gross revenue tax on hospitals,
health care providers and wholesale drug distributors, a 2% use
tax on prescription drugs and a 1% gross premium tax on nonprofit
health service plans and HMOs. A previously required transfer
from the Health Care Access Fund to the Accounting General Fund
was eliminated after Fiscal year 1995. The purpose of the
transfer was to pay for increased costs in the generally funded
Medicaid (MA) and General Assistance Medical Care (GAMC)
programs, due to applicants found ineligible for MinnesotaCarer,
but qualifying for MA or GAMC.
The 1993 Legislature adopted legislation establishing a
school district credit enhancement program. The legislation
authorizes and directs the Commissioner of Finance, under certain
circumstances and subject to the availability of funds, to issue
a warrant and authorize the Commissioner of Children, Families
and Learning to pay debt service coming due on school district
tax and state-aid anticipation certificates of indebtedness and
school district general obligation bonds in the event that the
school district notifies the Commissioner of Children, Families
and Learning that it does not have sufficient money in its debt
service fund for that purpose, or the paying agent informs the
Commissioner of Children, Families and Learning that it has not
received from the school district timely payment of moneys to be
used to pay debt service. The legislation appropriates annually
from the Accounting General Fund to the Commissioner of Children,
Families and Learning the amount needed to pay any warrants which
are issued. The amounts paid on behalf of any school district
are required to be repaid by it with interest, either through a
reduction of subsequent state-aid payments or by the levy of an
ad valorem tax which may be made with the approval of the
Commissioner of Children, Families and Learning. As of October
l, 1996, there were approximately $190 million of certificates of
indebtedness enrolled in the program, all of which will mature
before the end of the 1997 calendar year. The State has not had
to make any debt service payments on behalf of school districts
under the program and does not expect to make any payments in the
future. The state expects that school districts will issue
certificates of indebtedness in 1998 and will enroll these
certificates in the program in about the same amount of principle
as 1997.
School districts may issue certificates of indebtedness or
capital notes to purchase certain equipment. The certificates or
notes may be issued by resolution of the Board, are general
obligations of the school district and must be payable in not
more than five years. As of October 1, 1996 there are
approximately $12 million principal amount of certificates and
notes enrolled in the program.
School districts are authorized to issue general obligation
bonds only when authorized by school district electors or special
law, and only after levying a direct, irrevocable ad valorem tax
on all taxable property in the school district for the years and
in amounts sufficient to produce sums not less than 5% in excess
of the principal of an interest on the bonds when due. As of
October 1, 1996, the total amount of principal on certificates
and capital notes issued for equipment and bonds, plus the
interest on these obligations, through the year 2026, is
approximately $3.5 billion.
The amount of revenue generated by Minnesota's tax
structure, because of the dependence on the income and sales
taxes, is sensitive to the status of the national and local
economy. There can be no assurance that the financial problems
referred to or similar future problems will not affect the market
value or marketability of the Minnesota Municipal Obligations or
the ability of the issuers thereof to pay the interest or
principal of such obligations.
Minnesota general obligation bonds are rated Aaa by Moody's
and AA+ by S&P and AAA by Fitch.
Selected Economic and Demographic Factors. Diversity and a
significant natural resource base are two important
characteristics of Minnesota's economy. Minnesota's economy is
being lifted by strong earnings growth in the service industry,
rising housing construction, and job gains which are slowly
firming up to labor market.
When viewed in 1995 at a highly aggregative level of detail,
the structure of Minnesota's economy parallels the structure of
the U.S. economy as a whole. Minnesota employment in ten major
industrial sectors was distributed in approximately the same
proportions as national employment. In all sectors, the share of
total Minnesota employment was within two percentage points of
national employment share.
Minnesota's employment in the durable goods industries
continues to be highly concentrated in industries specializing in
the manufacturing of industrial machinery, fabricated metal and
instruments. This emphasis is partially explained by the
location in Minnesota of computer-related equipment
manufacturers. Further, manufacturers of food products, wood
products, and printed and published materials joined the high
technology manufacturing group which has lead to significant
business expansion in Minnesota in this decade.
The importance of Minnesota's rich natural resource base for
overall employment is apparent in the employment mix in
non-durable goods industries. In 1995, approximately 29.0% of
Minnesota's non-durable goods employment was concentrated in food
and kindred industries, and approximately 18.8% in paper and
allied industries. This compares to approximately 21.7% and
8.9%, respectively, for comparable sectors in the national
economy. Both of these industries rely heavily on renewable
resources in Minnesota. Over half of Minnesota's acreage is
devoted to agricultural purposes and nearly one-third to
forestry. Printing and publishing are also relatively more
important in Minnesota than in the U.S.
Mining is currently a less significant factor in the
Minnesota economy than formerly. Mining employment, primarily in
the iron ore or taconite industry, dropped from 17.3 per thousand
in 1979 to 7.9 per thousand in 1995. It is not expected that
mining employment will soon return to 1979 levels. However,
Minnesota retains vast quantities of taconite as well as copper,
nickel, cobalt and peat which may be utilized in the future.
While Minnesota's involvement in the defense industry is
limited, as military procurement cuts continue, Minnesota
employers may face challenges in maintaining employment and
sales. More importantly, Minnesota firms producing electronic
components, communication equipment, electrical equipment,
chemicals, plastics, computers and software may face additional
competition from companies converting from military to civilian
production.
Job expansion and business start-ups improved remarkably in
this decade with an average rate for new businesses at 2%, while
business dissolutions were on the decline.
Finally, despite a state economy that is outperforming the
national economy, the future economic outlook is guarded
primarily because the growth of the health care industry has
slowed significantly and the mainframe computer and airline
industries face continued softness.
Minnesota resident population grew from 4,085,000 in 1980 to
4,387 in 1990 or, at an average annual compound rate of .7%. In
comparison, U.S. population grew at an annual compound rate of
.9% during this period. Minnesota population is currently
forecast by the U.S. Department of Commerce to grow at an annual
compound rate of .8% through 2005.
Employment and Income Growth in Minnesota. In the period
1980 to 1990, overall employment growth in Minnesota lagged
behind national growth. However, manufacturing has been a strong
sector, with Minnesota employment outperforming its U.S.
counterpart in both the 1980-1990 and 1990-1995 periods.
In spite of the strong manufacturing sector, during the 1980
to 1990 period, total employment in Minnesota increased 17.9% as
compared to 20.1% nationally. Most of Minnesota's slower growth
can be associated with declining agricultural employment and two
recessions in the U.S. economy in the early 1980's which were
more severe in Minnesota than nationwide. Minnesota non-farm
employment growth generally kept pace with the nation in the
period after the 1981-82 recession ended in late 1982. In the
period 1990 to 1995, non-farm employment growth in Minnesota
exceeded national growth. Minnesota's non-farm employment grew
11.5% compared to 6.6% nationwide.
Since 1980, Minnesota per capita personal income has been
within three percentage points of national per capita personal
income. The state's per capita income, which is computed by
dividing personal income by total resident population, has
generally remained above the national average in spite of the
early 1980's recessions and some difficult years in agriculture.
In 1994, Minnesota per capita personal income was 103.0% of its
U.S. counterpart.
Another measure of the vitality of Minnesota's economy is
its unemployment rate. During 1994 and 1995, respectively,
Minnesota's monthly unemployment rate was generally less than the
national unemployment rate, averaging 3.6% in 1995, as compared
to the national average of 5.2%.
APPENDIX E
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 F
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 April 14,
1998.
Government Money Fund
Class A: Boston Safe Deposit & Trust Co. TTEE as Agent-Omnibus
Account, 1 Cabot Road, Medford, MA 02155-5141;
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 51.5%;
First Albany Corporation, P.O. Box 22024, Albany, NY
12201-2024 - owned of record 19.9%;
George K. Baum & Company, Attn: Ron Frazier, 120 West
12th Street, Kansas City, MO 64105-1917 - owned of
record 5.2%; and
NationsBanc Montgomery Securities, Money Market Funds
Omnibus, 600 Montgomery Street, Suite 4, San Francisco,
CA 94111-2702 - owned of record 5.2%.
Money Fund
Class A: NationsBanc Montgomery Securities, Money Market Funds
Omnibus, 600 Montgomery Street, Suite 4, San Francisco,
CA 94111-2702 - owned of record 11.6%; and
The Dart Foundation, Attn: Richard Winter, P.O. Box
31363, Seven Mile Beach, Grand Cayman, BWI-owned of
record 6.0%.
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 51.8%;
First Albany Corporation, P.O. Box 22024, Albany, NY
12201-2024 - owned of record 31.7%; and
George K. Baum & Company, Attn: Ron Frazier, 120 West
12th Street, Kansas City, MO 64105-1917 - owned of
record 6.4%.
California Municipal Fund
Class A: NationsBanc Montgomery Securities, Money Market Funds
Omnibus, 600 Montgomery Street, Suite 4, San Francisco,
CA 94111-2702 - owned of record 14.7%;
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 47.6%;
NationsBanc Montgomery Securities, Money Market Funds
Omnibus, 600 Montgomery Street, Suite 4, San Francisco,
CA 94111-2702 - owned of record 30.7%; and
First Albany Corporation, P.O. Box 22024, Albany, NY
12201-2024 - owned of record 20.0%.
National Municipal Fund
Class A: NationsBanc Montgomery Securities, Money Market Funds
Omnibus, 600 Montgomery Street, Suite 4, San Francisco,
CA 94111-2702 - owned of record 29.0%.
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 81.9%; and
George K. Baum & Company, Attn: Ron Frazier, 120 West
12th Street, Kansas City, MO 64105-1917 - owned of
record 10.2%.
New York Municipal Fund
Class B: First Albany Corporation, P.O. Box 22024, Albany, NY
12201-2024 - owned of record 88.5%; and
Robert W. Baird & Co., Omnibus Account for the
Exclusive Benefit of Customers, P.O. Box 672,
Milwaukee, WI 53201-0672 - owned of record 8.6%.
GENERAL MONEY MARKET FUND, INC.
PART C. OTHER INFORMATION
_________________________
Item 24. Financial Statements and Exhibits. - List
_______ _________________________________________
(a) Financial Statements:
Included in Part A of the Registration Statement:
Condensed Financial Information for the ten years ended
January 31, 1997, and for the ten months ended November
30, 1997 for Class A and for the period from March 31,
1995 (commencement of initial offering) through January
31, 1996 and for the one year ended January 31, 1997, and
for the ten months ended November 30, 1997, for Class B.
Included in Part B of the Registration Statement:
Statement of Investments--November 30, 1997.*
Statement of Assets and Liabilities--November 30, 1997.*
Statement of Operations--year ended January 31, 1997, and
for the ten months ended November 30, 1997.*
Statement of changes in Net Assets--for each of the
years ended January 31, 1996 and 1997, and for the ten
months ended November 30, 1997.*
Financial Highlights for each period indicated therein.*
Notes to Financial Statements.*
Report of Ernst & Young LLP, Independent Auditors, dated
January 12, 1998.*
___________
* Items are incorporated by reference to the Fund's Annual Report on Form N-
30D, filed on February 4, 1998.
All Schedules and other financial statement information, for which provision
is made in the applicable accounting regulations of the Securities and
Exchange Commission, are either omitted because they are not required under
the related instructions, they are inapplicable, or the required information
is presented in the financial statements or notes thereto which are included
in Part B of the Registration Statement.
Item 24. Financial Statements and Exhibits. - List (continued)
_______ _____________________________________________________
(b) Exhibits:
(1)(a) Registrant's Articles of Incorporation are incorporated by
reference to Exhibit (1)(a) of Post-Effective Amendment No. 19 to
the Registration Statement on Form N-1A, filed on March 29, 1995.
(1)(b) Registrant's Articles of Amendment are incorporated by reference to
Exhibit (1)(b) of Post-Effective Amendment No. 19 to the
Registration Statement on Form N-1A, filed on March 29, 1995.
(1)(c) Registrant's Articles Supplementary are incorporated by reference
to Exhibit (1)(c) of Post-Effective Amendment No. 19 to the
Registration Statement on Form N-1A, filed on March 29, 1995.
(2) Registrant's By-Laws.
(5) Management Agreement is incorporated by reference to Exhibit (5) of
Post-Effective Amendment No. 19 to the Registration Statement on
Form N-1A, filed on March 29, 1995.
(6)(a) Distribution Agreement is incorporated by reference to Exhibit
(6)(a) of Post-Effective Amendment No. 19 to the Registration
Statement on Form N-1A, filed on March 29, 1995.
(6)(b) Forms of Service Agreement are incorporated by reference to Exhibit
(6)(b) of Post-Effective Amendment No. 19 to the Registration
Statement on Form N-1A, filed on March 29, 1995.
(6)(c) Forms of Shareholder Services Plan Agreements are incorporated by
reference to Exhibit (6)(c) of Post-Effective Amendment No. 22 to
the Registration Statement on Form N-1A, filed on May 30, 1996.
(6)(d) Distribution Plan Agreements are incorporated by reference to
Exhibit (6)(d) of Post-Effective Amendment No. 22 to the
Registration Statement on Form N-1A, filed on May 30, 1996.
(8)(a) Amended and Restated Custody Agreement is incorporated
by reference to Exhibit (8)(a) of Post-Effective Amendment No. 19
to the Registration Statement on Form N-1A, filed on March 29,
1995.
(9)(a) Shareholder Services Plan (Class A) is incorporated by reference to
Exhibit (9)(a) of Post-Effective Amendment No. 18 to the
Registration Statement on Form N-1A, filed on January 30,
1995.
(9)(b) Shareholder Services Plan (Class B) is incorporated by reference to
Exhibit (9)(b) of Post-Effective Amendment No. 18 to the
Registration Statement on Form N-1A, filed on January 30,
1995.
Item 24. Financial Statements and Exhibits. - List (continued)
_______ _____________________________________________________
(10) Opinion and consent of Registrant's counsel is incorporated
by reference to Exhibit (10) of Post-Effective Amendment No. 19 to
the Registration Statement on Form N-1A, filed on March 29, 1995.
(11) Consent of Independent Auditors.
(15)(a) Service Plan (Class A) is incorporated by reference to Exhibit
(15)(a) of Post-Effective Amendment No. 18 to the Registration
Statement on Form N-1A, filed on January 30, 1995.
(15)(b) Distribution Plan (Class B) is incorporated by reference to Exhibit
(15)(b) of Post-Effective Amendment No. 18 to the Registration
Statement on Form N-1A, filed on January 30, 1995.
(16) Schedules of Computation of Performance Data are incorporated by
reference to Exhibit (16) of Post-Effective Amendment No. 18 to the
Registration Statement on Form N-1A, filed on January 30,
1995.
(17) Financial Data Schedule.
(18) Rule 18f-3 Plan.
Other Exhibits
______________
(a) Powers of Attorney of the Directors and Officers.
(b) Certificate of Secretary.
Item 25. Persons Controlled by or under Common Control with Registrant.
_______ ______________________________________________________________
Not Applicable
Item 26. Number of Holders of Securities.
_______ ________________________________
(1) (2)
Number of Record
Title of Class Holders as of April 14, 1998
______________ _____________________________
Common Stock
(Par value $.01)
Class A 8,746
Class B 583
Item 27. Indemnification
_______ _______________
Reference is made to Article SEVENTH of the Registrant's
Articles of Incorporation which is incorporated by reference to
Exhibit (1)(a) of Post-Effective Amendment No. 19 to the Fund's
Registration Statement on Form N-1A, filed on March 29, 1995 and to
Section 2-418 of the Maryland General Corporation Law. The
application of these provisions is limited by Article VIII of the
Registrant's By-Laws, as amended, which are included herein as
Exhibit (2), and by the following undertaking set forth in the
rules promulgated by the Securities and Exchange Commission:
Insofar as indemnification for liabilities arising under
the Securities Act of 1933 may be permitted to directors,
officers and controlling persons of the registrant pursuant to
the foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in such Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the
registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
such Act and will be governed by the final adjudication of such
issue.
Reference is also made to the Distribution Agreement which is
incorporated by reference to Exhibit (6)(a) of Post-Effective
Amendment No. 19 to the Registration Statement on Form N-1A filed
on March 29, 1995.
Item 28. Business and Other Connections of Investment Adviser.
_______ ____________________________________________________
The Dreyfus Corporation ("Dreyfus") and subsidiary companies
comprise a financial service organization whose business consists primarily
of providing investment management services as the investment adviser and
manager for sponsored investment companies registered under the Investment
Company Act of 1940 and as an investment adviser to institutional and
individual accounts. Dreyfus also serves as sub-investment adviser to
and/or administrator of other investment companies. Dreyfus Service
Corporation, a wholly-owned subsidiary of Dreyfus, serves primarily as a
registered broker-dealer of shares of investment companies sponsored by
Dreyfus and of other investment companies for which Dreyfus acts as
investment adviser, sub-investment adviser or administrator. Dreyfus
Management, Inc., another wholly-owned subsidiary, provides investment
management services to various pension plans, institutions and individuals.
Item 28. Business and Other Connections of Investment Adviser (continued)
________ ________________________________________________________________
Officers and Directors of Investment Adviser
____________________________________________
Name and Position
with Dreyfus Other Businesses
_________________ ________________
MANDELL L. BERMAN Real estate consultant and private investor
Director 29100 Northwestern Highway, Suite 370
Southfield, Michigan 48034;
Past Chairman of the Board of Trustees:
Skillman Foundation;
Member of The Board of Vintners Intl.
BURTON C. BORGELT Chairman Emeritus of the Board and
Director Past Chairman, Chief Executive Officer and
Director:
Dentsply International, Inc.
570 West College Avenue
York, Pennsylvania 17405;
Director:
DeVlieg-Bullard, Inc.
1 Gorham Island
Westport, Connecticut 06880
Mellon Bank Corporation***;
Mellon Bank, N.A.***
FRANK V. CAHOUET Chairman of the Board, President and
Director Chief Executive Officer:
Mellon Bank Corporation***;
Mellon Bank, N.A.***;
Director:
Avery Dennison Corporation
150 North Orange Grove Boulevard
Pasadena, California 91103;
Saint-Gobain Corporation
750 East Swedesford Road
Valley Forge, Pennsylvania 19482;
Teledyne, Inc.
1901 Avenue of the Stars
Los Angeles, California 90067
W. KEITH SMITH Chairman and Chief Executive Officer:
Chairman of the Board The Boston Company****;
Vice Chairman of the Board:
Mellon Bank Corporation***;
Mellon Bank, N.A.***;
Director:
Dentsply International, Inc.
570 West College Avenue
York, Pennsylvania 17405
CHRISTOPHER M. CONDRON Vice Chairman:
President, Chief Mellon Bank Corporation***;
Executive Officer, The Boston Company****;
Chief Operating Deputy Director:
Officer and a Mellon Trust***;
Director Chief Executive Officer:
The Boston Company Asset Management,
Inc.****;
President:
Boston Safe Deposit and Trust Company****
STEPHEN E. CANTER Director:
Vice Chairman and The Dreyfus Trust Company++;
Chief Investment Officer, Formerly, Chairman and Chief Executive Officer:
and a Director Kleinwort Benson Investment Management
Americas Inc.*
LAWRENCE S. KASH Chairman, President and Chief
Vice Chairman-Distribution Executive Officer:
and a Director The Boston Company Advisors, Inc.
53 State Street
Exchange Place
Boston, Massachusetts 02109;
Executive Vice President and Director:
Dreyfus Service Organization, Inc.**;
Director:
Dreyfus America Fund+++;
The Dreyfus Consumer Credit Corporation*;
The Dreyfus Trust Company++;
Dreyfus Service Corporation*;
President:
The Boston Company****;
Laurel Capital Advisors***;
Boston Group Holdings, Inc.;
Executive Vice President:
Mellon Bank, N.A.***;
Boston Safe Deposit and Trust
Company****
RICHARD F. SYRON Chairman of the Board and
Director Chief Executive Officer:
American Stock Exchange
86 Trinity Place
New York, New York 10006;
Director:
John Hancock Mutual Life Insurance Company
John Hancock Place, Box 111
Boston, Massachusetts 02117;
Thermo Electron Corporation
81 Wyman Street, Box 9046
Waltham, Massachusetts 02254-9046;
American Business Conference
1730 K Street, NW, Suite 120
Washington, D.C. 20006;
Trustee:
Boston College - Board of Trustees
140 Commonwealth Ave.
Chestnut Hill, Massachusetts 02167-3934
J. DAVID OFFICER Vice Chairman:
Vice Chairman The Dreyfus Corporation*;
Director:
Dreyfus Financial Services Corporation*****;
Dreyfus Investment Services Corporation*****;
Mellon Trust of Florida
2875 Northeast 191st Street
North Miami Beach, Florida 33180;
Mellon Preferred Capital Corporation****;
Boston Group Holdings, Inc.****;
Mellon Trust of New York
1301 Avenue of the Americas - 41st Floor
New York, New York 10019;
Mellon Trust of California
400 South Hope Street
Los Angeles, California 90071-2806;
Executive Vice President:
Mellon Bank, N.A.***;
Vice Chairman and Director:
The Boston Company, Inc.****;
President and Director:
RECO, Inc.****;
The Boston Company Financial Services,
Inc.****;
Boston Safe Deposit and Trust Company****;
RONALD P. O'HANLEY Vice Chairman:
Vice Chairman The Dreyfus Corporation*;
Director:
The Boston Company Asset Management, LLC****;
TBCAM Holding, Inc.****;
Franklin Portfolio Holdings, Inc.
Two International Place - 22nd Floor
Boston, Massachusetts 02110;
Mellon Capital Management Corporation
595 Market Street, Suite #3000
San Francisco, California 94105;
Certus Asset Advisors Corporation
One Bush Street, Suite 450
San Francisco, California 94104;
Mellon-France Corporation***;
Chairman and Director:
Boston Safe Advisors, Inc.****;
Partner Representative:
Pareto Partners
271 Regent Street
London, England W1R 8PP;
Chairman and Trustee:
Mellon Bond Associates, LLP***;
Mellon Equity Associates, LLP***;
Trustee:
Laurel Capital Advisors, LLP***;
Chairman, President and Chief Executive Officer:
Mellon Global Investing Corp.***;
Partner:
McKinsey & Company, Inc.
Boston, Massachusetts
WILLIAM T. SANDALLS, JR. Director:
Senior Vice President and Dreyfus Partnership Management, Inc.*;
Chief Financial Officer Seven Six Seven Agency, Inc.*;
Chairman and Director:
Dreyfus Transfer, Inc.
One American Express Plaza
Providence, Rhode Island 02903;
President and Director:
Lion Management, Inc.*;
Executive Vice President and Director:
Dreyfus Service Organization, Inc.*;
Vice President, Chief Financial Officer and
Director:
Dreyfus America Fund+++;
Vice President and Director:
The Dreyfus Consumer Credit Corporation*;
The Truepenny Corporation*;
Treasurer, Financial Officer and Director:
The Dreyfus Trust Company++;
Treasurer and Director:
Dreyfus Management, Inc.*;
Dreyfus Service Corporation*;
Formerly, President and Director:
Sandalls & Co., Inc.
MARK N. JACOBS Vice President, Secretary and Director:
Vice President, Lion Management, Inc.*;
General Counsel Secretary:
and Secretary The Dreyfus Consumer Credit Corporation*;
Dreyfus Management, Inc.*;
Assistant Secretary:
Dreyfus Service Organization, Inc.**;
Major Trading Corporation*;
The Truepenny Corporation*
PATRICE M. KOZLOWSKI None
Vice President-
Corporate Communications
MARY BETH LEIBIG None
Vice President-
Human Resources
JEFFREY N. NACHMAN President and Director:
Vice President-Mutual Dreyfus Transfer, Inc.
Fund Accounting One American Express Plaza
Providence, Rhode Island 02903
ANDREW S. WASSER Vice President:
Vice President-Information Mellon Bank Corporation***
Services
WILLIAM V. HEALEY President:
Assistant Secretary The Truepenny Corporation*;
Vice President and Director:
The Dreyfus Consumer Credit Corporation*;
Secretary and Director:
Dreyfus Partnership Management Inc.*;
Director:
The Dreyfus Trust Company++;
Assistant Secretary:
Dreyfus Service Corporation*;
Dreyfus Investment Advisors, Inc.*;
Assistant Clerk:
Dreyfus Insurance Agency of Massachusetts,
Inc.+++++
______________________________________
* The address of the business so indicated is 200 Park Avenue, New York,
New York 10166.
** The address of the business so indicated is 131 Second Street,
Lewes, Delaware 19958.
*** The address of the business so indicated is One Mellon Bank Center,
Pittsburgh, Pennsylvania 15258.
**** The address of the business so indicated is One Boston Place,
Boston, Massachusetts 02108.
***** The address of the business so indicated is Union Trust Building,
501 Grant Street, Room 179, Pittsburgh, Pennsylvania 15259;
+ The address of the business so indicated is Atrium Building,
80 Route 4 East, Paramus, New Jersey 07652.
++ The address of the business so indicated is 144 Glenn Curtiss Boulevard,
Uniondale, New York 11556-0144.
+++ The address of the business so indicated is 69, Route `d'Esch, L-
1470 Luxembourg.
++++ The address of the business so indicated is 69, Route `d'Esch, L-
2953 Luxembourg.
+++++ The address of the business so indicated is 53 State Street, Boston,
Massachusetts 02103.
(b)
Positions and
Name and principal Positions and offices with offices with
business address the Distributor Registrant
__________________ ___________________________ _____________
Marie E. Connolly+ Director, President, Chief President and
Executive Officer and Compliance Treasurer
Officer
Joseph F. Tower, III+ Director, Senior Vice President, Vice President
Treasurer and Chief Financial and Assistant
Officer Treasurer
Richard W. Ingram Executive Vice President Vice President
and Assistant
Treasurer
Mary A. Nelson+ Vice President Vice President
and Assistant
Treasurer
Paul Prescott+ Vice President None
Jean M. O'Leary+ Assistant Secretary and None
Assistant Clerk
John W. Gomez+ Director None
William J. Nutt+ Director None
________________________________
+ Principal business address is 60 State Street, Boston, Massachusetts
02109.
++ Principal business address is 200 Park Avenue, New York, New York 10166.
Item 30. Location of Accounts and Records
________________________________
1. The Bank of New York
90 Washington Street
New York, New York 10286
2. Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, Rhode Island 02940-9671
3. The Dreyfus Corporation
200 Park Avenue
New York, New York 10166
Item 31. Management Services
_______ ___________________
Not Applicable
Item 32. Undertakings
________ ____________
(1) To call a meeting of shareholders for the purpose of voting upon
the question of removal of a Board member or Board members when
requested in writing to do so by the holders of at least 10% of
the Registrant's outstanding shares and in connection with such
meeting to comply with the provisions of Section 16(c) of the
Investment Company Act of 1940 relating to shareholder
communications.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it has duly
caused this Amendment to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of New
York, and State of New York on the 28th day of April, 1998.
GENERAL MONEY MARKET FUND, INC.
BY: /s/Marie E. Connolly*
__________________________________________
Marie E. Connolly, PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this
Amendment to the Registration Statement has been signed below by the
following persons in the capacities and on the dates indicated.
Signatures Title Date
__________________________ _______________________________ ________
/s/Marie E. Connolly* President and Treasurer 4/28/98
- --------------------------- Principal Executive Officer)
Marie E. Connolly
/s/Joseph F. Tower, III* Assistant Treasurer (Principal 4/28/98
_____________________________ Financial and Accounting Officer)
Joseph F. Tower, III
/s/Joseph S. DiMartino* Chairman of the Board of 4/28/98
______________________________ Directors
Joseph S. DiMartino
/s/Clifford L. Alexander, Jr.* Director 4/28/98
_____________________________
Clifford L. Alexander, Jr.
/s/Peggy C. Davis* Director 4/28/98
_____________________________
Peggy C. Davis
/s/Ernest Kafka* Director 4/28/98
_____________________________
Ernest Kafka
/s/Saul B. Klaman* Director 4/28/98
_____________________________
Saul B. Klaman
/s/Nathan Leventhal* Director 4/28/98
_____________________________
Nathan Leventhal
*BY: /s/ Michael Petrucelli
__________________________
Michael Petrucelli,
Attorney-in-Fact
GENERAL MONEY MARKET FUND, INC.
INDEX OF EXHIBITS
(2) Registrant's By-Laws
(11) Consent of Independent Auditors
(17) Financial Data Schedules
(18) Rule 18f-3 Plan
Other Exhibits
(a) Powers of Attorney of the Directors and Officers
(b) Certificate of Secretary
ITEM 24. (b)
Exhibit (2)
BY-LAWS
OF
GENERAL MONEY MARKET FUND, INC.
(A Maryland Corporation)
___________
ARTICLE I
STOCKHOLDERS
1. CERTIFICATES REPRESENTING STOCK. Certificates representing
shares of stock shall set forth thereon the statements prescribed by
Section 2-211 of the Maryland General Corporation Law ("General Corporation
Law") and by any other applicable provision of law and shall be signed by the
Chairman of the Board or the President or a Vice President and countersigned
by the Secretary or an Assistant Secretary or the Treasurer or an Assistant
Treasurer and may be sealed with the corporate seal. The signatures of any
such officers may be either manual or facsimile signatures and the corporate
seal may be either facsimile or any other form of seal. In case any such
officer who has signed manually or by facsimile any such certificate ceases
to be such officer before the certificate is issued, it nevertheless may be
issued by the corporation with the same effect as if the officer had not
ceased to be such officer as of the date of its issue.
No certificate representing shares of stock shall be issued for any
share of stock until such share is fully paid, except as otherwise authorized
in Section 2-206 of the General Corporation Law.
The corporation may issue a new certificate of stock in place of
any certificate theretofore issued by it, alleged to have been lost, stolen
or destroyed, and the Board of Directors may require, in its discretion, the
owner of any such certificate or the owner's legal representative to give
bond, with sufficient surety, to the corporation to indemnify it against any
loss or claim that may arise by reason of the issuance of a new certificate.
2. SHARE TRANSFERS. Upon compliance with provisions restricting
the transferability of shares of stock, if any, transfers of shares of stock
of the corporation shall be made only on the stock transfer books of the
corporation by the record holder thereof or by his attorney thereunto
authorized by power of attorney duly executed and filed with the Secretary of
the corporation or with a transfer agent or a registrar, if any, and on
surrender of the certificate or certificates for such shares of stock
properly endorsed and the payment of all taxes due thereon.
3. RECORD DATE FOR STOCKHOLDERS. The Board of Directors may fix,
in advance, a date as the record date for the purpose of determining
stockholders entitled to notice of, or to vote at, any meeting of
stockholders, or stockholders entitled to receive payment of any dividend or
the allotment of any rights or in order to make a determination of
stockholders for any other proper purpose. Such date, in any case, shall be
not more than 90 days, and in case of a meeting of stockholders not less than
10 days, prior to the date on which the meeting or particular action
requiring such determination of stockholders is to be held or taken. In lieu
of fixing a record date, the Board of Directors may provide that the stock
transfer books shall be closed for a stated period but not to exceed 20 days.
If the stock transfer books are closed for the purpose of determining
stockholders entitled to notice of, or to vote at, a meeting of stockholders,
such books shall be closed for at least 10 days immediately preceding such
meeting. If no record date is fixed and the stock transfer books are not
closed for the determination of stockholders: (1) The record date for the
determination of stockholders entitled to notice of, or to vote at, a meeting
of stockholders shall be at the close of business on the day on which the
notice of meeting is mailed or the day 30 days before the meeting, whichever
is the closer date to the meeting; and (2) The record date for the
determination of stockholders entitled to receive payment of a dividend or an
allotment of any rights shall be at the close of business on the day on which
the resolution of the Board of Directors declaring the dividend or allotment
of rights is adopted, provided that the payment or allotment date shall not
be more than 60 days after the date on which the resolution is adopted.
4. MEANING OF CERTAIN TERMS. As used herein in respect of the
right to notice of a meeting of stockholders or a waiver thereof or to
participate or vote thereat or to consent or dissent in writing in lieu of a
meeting, as the case may be, the term "share of stock" or "shares of stock"
or "stockholder" or "stockholders" refers to an outstanding share or shares
of stock and to a holder or holders of record of outstanding shares of stock
when the corporation is authorized to issue only one class of shares of stock
and said reference also is intended to include any outstanding share or
shares of stock and any holder or holders of record of outstanding shares of
stock of any class or series upon which or upon whom the Charter confers such
rights where there are two or more classes or series of shares or upon which
or upon whom the General Corporation Law confers such rights notwithstanding
that the Charter may provide for more than one class or series of shares of
stock, one or more of which are limited or denied such rights thereunder.
5. STOCKHOLDER MEETINGS.
ANNUAL MEETINGS. If a meeting of the stockholders of the
corporation is required by the Investment Company Act of 1940, as amended, to
elect the directors, then there shall be submitted to the stockholders at
such meeting the question of the election of directors, and a meeting called
for that purpose shall be designated the annual meeting of stockholders for
that year. In other years in which no action by stockholders is required for
the aforesaid election of directors, no annual meeting need be held.
SPECIAL MEETINGS. Special stockholder meetings for any
purpose may be called by the Board of Directors or the President and shall be
called by the Secretary for the purpose of removing a Director whenever the
holders of shares entitled to at least ten percent of all the votes entitled
to be cast at such meeting shall make a duly authorized request that such
meeting be called.
The Secretary shall call a special meeting of stockholders for
all other purposes whenever the holders of shares entitled to at least a
majority of all the votes entitled to be cast at such meeting shall make a
duly authorized request that such meeting be called. Such request shall
state the purpose of such meeting and the matters proposed to be acted on
thereat, and no other business shall be transacted at any such special
meeting.
The Secretary shall inform such stockholders of the reasonably estimated
costs of preparing and mailing the notice of the meeting, and upon payment to
the corporation of such costs, the Secretary shall give notice in the manner
provided for below.
PLACE AND TIME. Stockholder meetings shall be held at such
place, either within the State of Maryland or at such other place within the
United States, and at such date or dates as the directors from time to time
may fix.
NOTICE OR ACTUAL OR CONSTRUCTIVE WAIVER OF NOTICE. Written or
printed notice of all meetings shall be given by the Secretary and shall
state the time and place of the meeting. The notice of a special meeting
shall state in all instances the purpose or purposes for which the meeting is
called. Written or printed notice of any meeting shall be given to each
stockholder either by mail or by presenting it to the stockholder personally
or by leaving it at his or her residence or usual place of business not less
than 10 days and not more than 90 days before the date of the meeting, unless
any provisions of the General Corporation Law shall prescribe a different
elapsed period of time, to each stockholder at his or her address appearing
on the books of the corporation or the address supplied by the stockholder
for the purpose of notice. If mailed, notice shall be deemed to be given
when deposited in the United States mail addressed to the stockholder at his
or her post office address as it appears on the records of the corporation
with postage thereon prepaid. Whenever any notice of the time, place or
purpose of any meeting of stockholders is required to be given under the
provisions of these by-laws or of the General Corporation Law, a waiver
thereof in writing, signed by the stockholder and filed with the records of
the meeting, whether before or after the holding thereof, or actual
attendance or representation at the meeting shall be deemed equivalent to the
giving of such notice to such stockholder. The foregoing requirements of
notice also shall apply, whenever the corporation shall have any class of
stock which is not entitled to vote, to holders of stock who are not entitled
to vote at the meeting, but who are entitled to notice thereof and to dissent
from any action taken thereat.
STATEMENT OF AFFAIRS. The President of the corporation or, if
the Board of Directors shall determine otherwise, some other executive
officer thereof, shall prepare or cause to be prepared annually a full and
correct statement of the affairs of the corporation, including a balance
sheet and a financial statement of operations for the preceding fiscal year,
which shall be filed at the principal office of the corporation in the State
of Maryland.
QUORUM. At any meeting of stockholders, the presence in
person or by proxy of stockholders entitled to cast one-third of the votes
thereat shall constitute a quorum. In the absence of a quorum, the
stockholders present in person or by proxy, by majority vote and without
notice other than by announcement, may adjourn the meeting from time to time,
but not for a period exceeding 120 days after the original record date until
a quorum shall attend.
ADJOURNED MEETINGS. A meeting of stockholders convened on the
date for which it was called (including one adjourned to achieve a quorum as
provided in the paragraph above) may be adjourned from time to time without
further notice to a date not more than 120 days after the original record
date, and any business may be transacted at any adjourned meeting which could
have been transacted at the meeting as originally called.
CONDUCT OF MEETING. Meetings of the stockholders shall be
presided over by one of the following officers in the order of seniority and
if present and acting: the President, a Vice President or, if none of the
foregoing is in office and present and acting, by a chairman to be chosen by
the stockholders. The Secretary of the corporation or, in his or her
absence, an Assistant Secretary, shall act as secretary of every meeting, but
if neither the Secretary nor an Assistant Secretary is present the chairman
of the meeting shall appoint a secretary of the meeting.
PROXY REPRESENTATION. Every stockholder may authorize another
person or persons to act for him by proxy in all matters in which a
stockholder is entitled to participate, whether for the purposes of
determining the stockholder's presence at a meeting, or whether by waiving
notice of any meeting, voting or participating at a meeting, expressing
consent or dissent without a meeting or otherwise. Every proxy shall be
executed in writing by the stockholder or by his or her duly authorized
attorney-in-fact or be in such other form as may be permitted by the Maryland
General Corporation Law, including documents conveyed by electronic
transmission and filed with the Secretary of the corporation. A copy,
facsimile transmission or other reproduction of the writing or transmission
may be substituted for the original writing or transmission for any purpose
for which the original transmission could be used. No unrevoked proxy shall
be valid after 11 months from the date of its execution, unless a longer time
is expressly provided therein. The placing of a stockholder's name on a
proxy pursuant to telephonic or electronically transmitted instructions
obtained pursuant to procedures reasonably designed to verify that such
instructions have been authorized by such stockholder shall constitute
execution of such proxy by or on behalf of such stockholder.
INSPECTORS OF ELECTION. The directors, in advance of any
meeting, may, but need not, appoint one or more inspectors to act at the
meeting or any adjournment thereof. If an inspector or inspectors are not
appointed, the person presiding at the meeting may, but need not, appoint one
or more inspectors. In case any person who may be appointed as an inspector
fails to appear or act, the vacancy may be filled by appointment made by the
directors in advance of the meeting or at the meeting by the person presiding
thereat. Each inspector, if any, before entering upon the discharge of his
duties, shall take and sign an oath to execute faithfully the duties of
inspector at such meeting with strict impartiality and according to the best
of his ability. The inspectors, if any, shall determine the number of shares
outstanding and the voting power of each, the shares represented at the
meeting, the existence of a quorum and the validity and effect of proxies,
and shall receive votes, ballots or consents, hear and determine all
challenges and questions arising in connection with the right to vote, count
and tabulate all votes, ballots or consents, determine the result and do such
acts as are proper to conduct the election or vote with fairness to all
stockholders. On request of the person presiding at the meeting or any
stockholder, the inspector or inspectors, if any, shall make a report in
writing of any challenge, question or matter determined by him or them and
execute a certificate of any fact found by him or them.
VOTING. Each share of stock shall entitle the holder thereof
to one vote, except in the election of directors, at which each said vote may
be cast for as many persons as there are directors to be elected. Except for
election of directors, a majority of the votes cast at a meeting of
stockholders, duly called and at which a quorum is present, shall be
sufficient to take or authorize action upon any matter which may come before
a meeting, unless more than a majority of votes cast is required by the
corporation's Articles of Incorporation. A plurality of all the votes cast
at a meeting at which a quorum is present shall be sufficient to elect a
director.
6. INFORMAL ACTION. Any action required or permitted to be taken
at a meeting of stockholders may be taken without a meeting if a consent in
writing, setting forth such action, is signed by all the stockholders
entitled to vote on the subject matter thereof and any other stockholders
entitled to notice of a meeting of stockholders (but not to vote thereat)
have waived in writing any rights which they may have to dissent from such
action and such consent and waiver are filed with the records of the
corporation.
For Funds offered exclusively to insurance products and retirement
plans:
7. LIMITATION ON THE SALE OF SHARES OF STOCK IN THE CORPORATION.
Shares of stock in the corporation shall not be sold to individuals and
entities other than Participating Insurance Companies, as defined by the
Board of Directors, pursuant to variable annuity and variable life insurance
contracts, and Eligible Plans, as defined by the Board of Directors. Sales
of shares of stock in the corporation to individuals or entities other than
Participating Insurance Companies or Eligible Plans are unauthorized and
shall be deemed invalid and void ab ibnitio.
ARTICLE II
BOARD OF DIRECTORS
1. FUNCTIONS AND DEFINITION. The business and affairs of the
corporation shall be managed under the direction of a Board of Directors.
The use of the phrase "entire board" herein refers to the total number of
directors which the corporation would have if there were no vacancies.
2. QUALIFICATIONS AND NUMBER. Each director shall be a natural
person of full age. A director need not be a stockholder, a citizen of the
United States or a resident of the State of Maryland. The initial Board of
Directors shall consist of one person. Thereafter, the number of directors
constituting the entire board shall never be less than three or the number of
stockholders, whichever is less. At any regular meeting or at any special
meeting called for that purpose, a majority of the entire Board of Directors
may increase or decrease the number of directors, provided that the number
thereof shall never be less than three or the number of stockholders,
whichever is less, nor more than twelve and further provided that the tenure
of office of a director shall not be affected by any decrease in the number
of directors.
3. ELECTION AND TERM. The first Board of Directors shall consist
of the director named in the Articles of Incorporation and shall hold office
until the first meeting of stockholders or until his or her successor has
been elected and qualified. Thereafter, directors who are elected at a
meeting of stockholders, and directors who are elected in the interim to fill
vacancies and newly created directorships, shall hold office until their
successors have been elected and qualified, as amended. Newly created
directorships and any vacancies in the Board of Directors, other than
vacancies resulting from the removal of directors by the stockholders, may be
filled by the Board of Directors, subject to the provisions of the Investment
Company Act of 1940, as amended. Newly created directorships filled by the
Board of Directors shall be by action of a majority of the entire Board of
Directors then in office. All vacancies to be filled by the Board of
Directors may be filled by a majority of the remaining members of the Board
of Directors, although such majority is less than a quorum thereof.
4. MEETINGS.
TIME. Meetings shall be held at such time as the Board of
Directors shall fix, except that the first meeting of a newly elected Board
of Directors shall be held as soon after its election as the directors
conveniently may assemble.
PLACE. Meetings shall be held at such place within or without
the State of Maryland as shall be fixed by the Board.
CALL. No call shall be required for regular meetings for
which the time and place have been fixed. Special meetings may be called by
or at the direction of the President or of a majority of the directors in
office.
NOTICE OR ACTUAL OR CONSTRUCTIVE WAIVER. Whenever any notice
of the time, place or purpose of any meeting of directors or any committee
thereof is required to be given under the provisions of the General
Corporation Law or of these by-laws, a waiver thereof in writing, signed by
the director or committee member entitled to such notice and filed with the
records of the meeting, whether before or after the holding thereof, or
actual attendance at the meeting shall be deemed equivalent to the giving of
such notice to such director or such committee member.
QUORUM AND ACTION. A majority of the entire Board of
Directors shall constitute a quorum except when a vacancy or vacancies
prevents such majority, whereupon a majority of the directors in office shall
constitute a quorum, provided such majority shall constitute at least one-
third of the entire Board and, in no event, less than two directors. A
majority of the directors present, whether or not a quorum is present, may
adjourn a meeting to another time and place. Except as otherwise
specifically provided by the Articles of Incorporation, the General
Corporation Law or these by-laws, the action of a majority of the directors
present at a meeting at which a quorum is present shall be the action of the
Board of Directors.
CHAIRMAN OF THE MEETING. The Chairman of the Board, if any
and if present and acting, or the President or any other director chosen by
the Board, shall preside at all meetings.
5. REMOVAL OF DIRECTORS. Any or all of the directors may be
removed for cause or without cause by the stockholders, who may elect a
successor or successors to fill any resulting vacancy or vacancies for the
unexpired term of the removed director or directors.
6. COMMITTEES. The Board of Directors may appoint from among its
members an Executive Committee and other committees composed of one or more
directors and may delegate to such committee or committees, in the intervals
between meetings of the Board of Directors, any or all of the powers of the
Board of Directors in the management of the business and affairs of the
corporation, except the power to amend the by-laws, to approve any merger or
share exchange which does not require stockholder approval, to authorize
dividends, to issue stock (except to the extent permitted by law) or to
recommend to stockholders any action requiring the stockholders' approval.
In the absence of any member of any such committee, the members thereof
present at any meeting, whether or not they constitute a quorum, may appoint
a member of the Board of Directors to act in the place of such absent member.
7. INFORMAL ACTION. Any action required or permitted to be taken
at any meeting of the Board of Directors or of any committee thereof may be
taken without a meeting, if a written consent to such action is signed by all
members of the Board of Directors or any such committee, as the case may be,
and such written consent is filed with the minutes of the proceedings of the
Board or any such committee.
Members of the Board of Directors or any committee designated
thereby may participate in a meeting of such Board or committee by means of a
conference telephone or similar communications equipment by means of which
all persons participating in the meeting can hear each other at the same
time. Participation by such means shall constitute presence in person at a
meeting.
ARTICLE III
OFFICERS
The corporation may have a Chairman of the Board and shall have a
President, a Secretary and a Treasurer, who shall be elected by the Board of
Directors, and may have such other officers, assistant officers and agents as
the Board of Directors shall authorize from time to time. Any two or more
offices, except those of President and Vice President, may be held by the
same person, but no person shall execute, acknowledge or verify any
instrument in more than one capacity, if such instrument is required by law
to be executed, acknowledged or verified by two or more officers.
Any officer or agent may be removed by the Board of Directors
whenever, in its judgment, the best interests of the corporation will be
served thereby.
ARTICLE IV
PRINCIPAL OFFICE - RESIDENT AGENT - STOCK LEDGER
The address of the principal office of the corporation in the State
of Maryland prescribed by the General Corporation Law is 300 East Lombard
Street, c/o The Corporation Trust Incorporated, Baltimore, Maryland 21202.
The name and address of the resident agent in the State of Maryland
prescribed by the General Corporation Law are: The Corporation Trust
Incorporated, 300 East Lombard Street, Baltimore, Maryland 21202.
The corporation shall maintain, at its principal office in the
State of Maryland prescribed by the General Corporation Law or at the
business office or an agency of the corporation, an original or duplicate
stock ledger containing the names and addresses of all stockholders and the
number of shares of each class held by each stockholder. Such stock ledger
may be in written form or any other form capable of being converted into
written form within a reasonable time for visual inspection.
The corporation shall keep at said principal office in the State of
Maryland the original or a certified copy of the by-laws, including all
amendments thereto, and shall duly file thereat the annual statement of
affairs of the corporation prescribed by Section 2-313 of the General
Corporation Law.
ARTICLE V
CORPORATE SEAL
The corporate seal shall have inscribed thereon the name of the
corporation and shall be in such form and contain such other words and/or
figures as the Board of Directors shall determine or the law require.
ARTICLE VI
FISCAL YEAR
The fiscal year of the corporation or any series thereof shall be
fixed, and shall be subject to change, by the Board of Directors.
ARTICLE VII
CONTROL OVER BY-LAWS
The power to make, alter, amend and repeal the by-laws is vested
exclusively in the Board of Directors of the corporation.
ARTICLE VIII
INDEMNIFICATION
1. INDEMNIFICATION OF DIRECTORS AND OFFICERS. The corporation
shall indemnify its directors to the fullest extent that indemnification of
directors is permitted by the law. The corporation shall indemnify its
officers to the same extent as its directors and to such further extent as is
consistent with law. The corporation shall indemnify its directors and
officers who while serving as directors or officers also serve at the request
of the corporation as a director, officer, partner, trustee, employee, agent
or fiduciary of another corporation, partnership, joint venture, trust, other
enterprise or employee benefit plan to the same extent as its directors and,
in the case of officers, to such further extent as is consistent with law.
The indemnifi-cation and other rights provided by this Article shall continue
as to a person who has ceased to be a director or officer and shall inure to
the benefit of the heirs, executors and administrators of such a person.
This Article shall not protect any such person against any liability to the
corporation or any stockholder thereof to which such person would otherwise
be subject by reason of willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of his office
("disabling conduct").
2. ADVANCES. Any current or former director or officer of the
corporation seeking indemnification within the scope of this Article shall be
entitled to advances from the corporation for payment of the reasonable
expenses incurred by him in connection with the matter as to which he is
seeking indemnification in the manner and to the fullest extent permissible
under the General Corporation Law. The person seeking indemnification shall
provide to the corporation a written affirmation of his good faith belief
that the standard of conduct necessary for indemnification by the corporation
has been met and a written undertaking to repay any such advance if it should
ultimately be determined that the standard of conduct has not been met. In
addition, at least one of the following additional conditions shall be met:
(a) the person seeking indemnification shall provide a security in form and
amount acceptable to the corporation for his or her undertaking; (b) the
corporation is insured against losses arising by reason of the advance; or
(c) a majority of a quorum of directors of the corporation who are neither
"interested persons" as defined in Section 2(a)(19) of the Investment Company
Act of 1940, as amended, nor parties to the proceeding ("disinterested non-
party directors"), or independent legal counsel, in a written opinion, shall
have determined, based on a review of facts readily available to the
corporation at the time the advance is proposed to be made, that there is
reason to believe that the person seeking indemnification will ultimately be
found to be entitled to indemnification.
3. PROCEDURE. At the request of any person claiming
indemnification under this Article, the Board of Directors shall determine,
or cause to be determined, in a manner consistent with the General
Corporation Law, whether the standards required by this Article have been
met. Indemnification shall be made only following: (a) a final decision on
the merits by a court or other body before whom the proceeding was brought
that the person to be indemnified was not liable by reason of disabling
conduct or (b) in the absence of such a decision, a reasonable determination,
based upon a review of the facts, that the person to be indemnified was not
liable by reason of disabling conduct by (i) the vote of a majority of a
quorum of disinterested non-party directors or (ii) an independent legal
counsel in a written opinion.
4. INDEMNIFICATION OF EMPLOYEES AND AGENTS. Employees and agents
who are not officers or directors of the corporation may be indemnified, and
reasonable expenses may be advanced to such employees or agents, as may be
provided by action of the Board of Directors or by contract, subject to any
limitations imposed by the Investment Company Act of 1940, as amended.
5. OTHER RIGHTS. The Board of Directors may make further
provision consistent with law for indemnification and advance of expenses to
directors, officers, employees and agents by resolution, agreement or
otherwise. The indemnification provided by this Article shall not be deemed
exclusive of any other right, with respect to indemnification or otherwise,
to which those seeking indemnification may be entitled under any insurance or
other agreement or resolution of stockholders or disinterested non-party
directors or otherwise.
6. AMENDMENTS. References in this Article are to the General
Corporation Law and to the Investment Company Act of 1940 as from time to
time amended. No amendment of the by-laws shall affect any right of any
person under this Article based on any event, omission or proceeding prior to
the amendment.
Dated: April 8, 1998
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the captions "Condensed
Financial Information" and "Transfer and Dividend Disbursing Agent,
Custodian, Counsel and Independent Auditors" and to the incorporation by
reference of our report dated January 12, 1998, which is incorporated by
reference, in this Registration Statement (Form N-1A 2-72836) of General Money
Market Fund, Inc.
ERNST & YOUNG LLP
New York, New York
April 27, 1998
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000353560
<NAME> GENERAL MONEY MARKET FUND, INC.
<SERIES>
<NUMBER> 001
<NAME> CLASS A
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 10-MOS
<FISCAL-YEAR-END> NOV-30-1997
<PERIOD-END> NOV-30-1997
<INVESTMENTS-AT-COST> 2161712
<INVESTMENTS-AT-VALUE> 2161712
<RECEIVABLES> 18235
<ASSETS-OTHER> 5662
<OTHER-ITEMS-ASSETS> 193
<TOTAL-ASSETS> 2185802
<PAYABLE-FOR-SECURITIES> 50000
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1357
<TOTAL-LIABILITIES> 51357
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 2134550
<SHARES-COMMON-STOCK> 903371
<SHARES-COMMON-PRIOR> 764142
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (105)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 903313
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 81674
<OTHER-INCOME> 0
<EXPENSES-NET> 13148
<NET-INVESTMENT-INCOME> 68526
<REALIZED-GAINS-CURRENT> (78)
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 68448
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (32427)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 5481589
<NUMBER-OF-SHARES-REDEEMED> (5373866)
<SHARES-REINVESTED> 31507
<NET-CHANGE-IN-ASSETS> 1001199
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (27)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 7092
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 13550
<AVERAGE-NET-ASSETS> 798308
<PER-SHARE-NAV-BEGIN> 1
<PER-SHARE-NII> .041
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> (.041)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1
<EXPENSE-RATIO> .008
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000353560
<NAME> GENERAL MONEY MARKET FUND, INC.
<SERIES>
<NUMBER> 002
<NAME> CLASS B
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 10-MOS
<FISCAL-YEAR-END> NOV-30-1997
<PERIOD-END> NOV-30-1997
<INVESTMENTS-AT-COST> 2161712
<INVESTMENTS-AT-VALUE> 2161712
<RECEIVABLES> 18235
<ASSETS-OTHER> 5662
<OTHER-ITEMS-ASSETS> 193
<TOTAL-ASSETS> 2185802
<PAYABLE-FOR-SECURITIES> 50000
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1357
<TOTAL-LIABILITIES> 51357
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 2134550
<SHARES-COMMON-STOCK> 1231179
<SHARES-COMMON-PRIOR> 369209
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (105)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 1231132
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 81674
<OTHER-INCOME> 0
<EXPENSES-NET> 13148
<NET-INVESTMENT-INCOME> 68526
<REALIZED-GAINS-CURRENT> (78)
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 68448
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (36099)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 3353368
<NUMBER-OF-SHARES-REDEEMED> (2526588)
<SHARES-REINVESTED> 35189
<NET-CHANGE-IN-ASSETS> 1001199
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (27)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 7092
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 13550
<AVERAGE-NET-ASSETS> 910299
<PER-SHARE-NAV-BEGIN> 1
<PER-SHARE-NII> .039
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> (.039)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1
<EXPENSE-RATIO> .010
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
ITEM 24. (b) Exhibit (18)
THE DREYFUS FAMILYOF FUNDS
(General Family ofFunds)
Rule 18f-3 Plan
Rule 18f-3 under the Investment Company Act of 1940, as amended
(the "1940 Act"), requires that the Board of an investment company desiring
to offer multiple classes pursuant to said Rule adopt a plan setting forth
the separate arrangement and expense allocation of each class, and any
related conversion features or exchange privileges.
The Board, including a majority of the non-interested Board
members, of each of the investment companies, or series thereof, listed on
Schedule A attached hereto (each, a "Fund") which desires to offer multiple
classes has determined that the following plan is in the best interests of
each class individually and the Fund as a whole:
1. Class Designation: Fund shares shall be divided into Class A
and Class B.
2. Differences in Services: The services offered to
shareholders of each Class shall be substantially the same, except for
certain services provided to each Class pursuant to separate plans adopted
by the Fund's Board.
3. Differences in Distribution Arrangements: Shares of each
Class shall be offered at net asset value. Neither class shall be subject
to any front-end or contingent deferred sales charges.
Class A shares of each Fund listed on Schedule B attached hereto
shall be subject to annual payments for distributing Class A shares and
servicing shareholder accounts at the rate of up to .20% of the value of the
average daily net assets of Class A pursuant to a Service Plan adopted in
accordance with Rule 12b-1 under the 1940 Act.
Class B shares of each Fund shall be subject to annual payments
for distributing Class B shares at the rate of up to .20% of the value of
the average daily net assets of Class B pursuant to a Distribution Plan
adopted in accordance with Rule 12b-1 under the 1940 Act. Class B shares
shall be charged directly for sub-accounting services at the annual rate of
.05% of the value of the average daily net assets of Class B.
Each Class of shares shall be subject to a separate Shareholder
Services Plan. Under the respective Shareholder Services Plan, Class A
shares shall be subject to payments in an amount not to exceed an annual
rate of .25% of the value of the average daily net assets of Class A and
Class B shares shall be subject to an annual service fee at the rate of .25%
of the value of the average daily net assets of Class B.
4. Expense Allocation: The following expenses shall be
allocated, to the extent practicable, on a Class-by-Class basis: (a) fees
under the Service Plan, if any, Distribution Plan and Shareholder Services
Plans; (b) printing and postage expenses related to preparing and
distributing materials, such as shareholder reports, prospectuses and
proxies, to current shareholders of a specific Class; (c) Securities and
Exchange Commission and Blue Sky registration fees incurred by a specific
Class; (d) the expense of administrative personnel and services as required
to support the shareholders of a specific Class; (e) litigation or other
legal expenses relating solely to a specific Class; (f) transfer agent fees
identified by the Fund's transfer agent as being attributable to a specific
Class; and (g) Board members' fees incurred as a result of issues relating
to a specific Class.
5. Exchange Privileges: Shares of a Class shall be exchangeable
only for shares of certain other investment companies specified from time to
time.
Dated: July 19, 1995
Revised: April 8, 1998
SCHEDULE A
General California Municipal Money Market Fund
General Government Securities Money Market Fund, Inc.
General Money Market Fund, Inc.
General Municipal Money Market Funds, Inc.
--General Minnesota Municipal Money Market Fund
--General Municipal Money Market Fund
General New York Municipal Money Market Fund
SCHEDULE B
General Government Securities Money Market Fund, Inc.
General Money Market Fund, Inc.
Item 24.(b)
Other Exhibits (a)
POWER OF ATTORNEY
The undersigned hereby constitute and appoint Marie E. Connolly,
Richard W. Ingram, Christopher J. Kelley, Kathleen K. Morrisey, Michael S.
Petrucelli and Elba Vasquez and each of them, with full power to act without
the other, his or her true and lawful attorney-in-fact and agent, with full
power of substitution and resubstitution, for him or her and in his or her
name, place and stead, in any and all capacities (until revoked in writing)
to sign any and all amendments to the Registration Statement of General
Money Market Fund, Inc.(including post-effective amendments and amendments
thereto), and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of
them, full power and authority to do and perform each and every act and
thing ratifying and confirming all that said attorneys-in-fact and agents or
any of them, or their or his or her substitute or substitutes, may lawfully
do or cause to be done by virtue hereof.
/s/Clifford L. Alexander, Jr. April 8, 1998
- --------------------------------
Clifford L. Alexander, Jr.
/s/Peggy C. Davis April 8, 1998
- --------------------------------
Peggy C. Davis
/s/Joseph S. DiMartino April 8, 1998
- --------------------------------
Joseph S. DiMartino
/s/Ernst Kafka April 8, 1998
- --------------------------------
Ernst Kafka
/s/Saul B. Klaman April 8, 1998
- --------------------------------
Saul B. Klaman
/s/Nathan Leventhal April 8, 1998
- --------------------------------
Nathan Leventhal
ITEM 24.(b)
OTHER EXHIBIT (b)
GENERAL MONEY MARKET FUND, INC.
Certificate of Assistant Secretary
The undersigned, Elba Vasquez, Vice President and Assistant Secretary
of General Money Market Fund, Inc. (the "Fund"), hereby certifies that set
forth below is a copy of the resolution adopted by the Fund's Board
authorizing the signing by Marie E. Connolly, Richard W. Ingram, Christopher
J. Kelley, Kathleen K. Morrisey, Michael S. Petrucelli and Elba Vasquez on
behalf of the proper officers of the Fund pursuant to a power of attorney:
RESOLVED, that the Registration Statement and any
and all amendments and supplements thereto, may be
signed by any one of Marie E. Connolly, Richard W.
Ingram, Christopher J. Kelley, Kathleen K. Morrisey,
Michael S. Petrucelli and Elba Vasquez as the attorney-
in-fact for the proper officers of the Fund, with full
power of substitution and resubstitution; and that the
appointment of each of such persons as such attorney-in-
fact hereby is authorized and approved; and that such
attorneys-in-fact, and each of them, shall have full
power and authority to do and perform each and every act
and thing requisite and necessary to be done in
connection with such Registration Statement and any and
all amendments and supplements thereto, as fully to all
intents and purposes as the officer, for whom he or she
is acting as attorney-in-fact, might or could do in
person.
IN WITNESS WHEREOF, I have hereunto signed my name and affixed the
seal of the Fund on April 14, 1998.
/s/ Elba Vasquez
-----------------------
Elba Vasquez
Vice President and
Assistant Secretary
