FUND FOR U S GOVERNMENT SECURITIES INC, 485BPOS, 1995-05-25

FUND FOR U S GOVERNMENT SECURITIES INC
485BPOS, 1995-05-25

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1933 Act File No. 2-33490
1940 Act File No. 811-1890

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. 63 X

and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X

Amendment No. 37 X

FUND FOR U.S. GOVERNMENT SECURITIES, INC.

(Exact Name of Registrant as Specified in Charter)

Federated Investors Tower, Pittsburgh, Pennsylvania 15222-3779
(Address of Principal Executive Offices)

(412) 288-1900
(Registrant's Telephone Number)

John W. McGonigle, Esquire,
Federated Investors Tower,
Pittsburgh, Pennsylvania 15222-3779
(Name and Address of Agent for Service)

It is proposed that this filing will become effective:

immediately upon filing pursuant to paragraph (b)
X on May 31, 1995 pursuant to paragraph (b)
60 days after filing pursuant to paragraph (a) (i)
on pursuant to paragraph (a) (i).
75 days after filing pursuant to paragraph (a)(ii)
on _________________ 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.

Registrant has filed with the Securities and Exchange Commission a
declaration pursuant to Rule 24f-2 under the Investment Company Act of
1940, and:

X filed the Notice required by that Rule on May 15, 1995 ; or
intends to file the Notice required by that Rule on or about
____________; or
during the most recent fiscal year did not sell any securities
pursuant to Rule 24f-2 under the Investment Company Act of 1940, and,
pursuant to Rule 24f-2(b)(2), need not file the Notice.

CROSS-REFERENCE SHEET

This Amendment to the Registration Statement of FUND FOR U.S.
GOVERNMENT SECURITIES, INC. , is comprised of three classes of shares,
(1) Class A Shares, (2) Class B Shares, and (3) Class C Shares and is
comprised of the following:

PART A. INFORMATION REQUIRED IN A PROSPECTUS.

Prospectus Heading
(Rule 404(c) Cross Reference)

Item 1. Cover Page Cover Page (1-3).
Item 2. Synopsis Summary of Fund Expenses (1-3).
Item 3. Condensed Financial
Information Financial Hightlights (1-3).
Item 4. General Description of
Registrant Synopsis; Liberty Family of Funds;
Investment Information; Investment
Objective; Investment Policies;
Investment Limitations; Performance
Information (1-3).
Item 5. Management of the Fund Fund Information; Management of the
Fund; Distribution of Shares;
Administration of the Fund;
Brokerage Transactions (1-3).
Item 6. Capital Stock and Other
Securities Account and Share Information;
Certificates and
Confirmations;Dividends; Capital
Gains;Shareholder Information;
Voting Rights; Tax Information;
Federal Income Tax; Pennsylvania
Personal Property Taxes(1-3).
Item 7. Purchase of Securities Being
Offered Net Asset Value; Investing in the
Fund; How to Purchase Shares;
Investing in Class A Shares (1);
Investing in Class B Shares (2);
Investing in Class C Shares (3);
Systematic Investment Program;
Reducing or Eliminating the Sales
Load (1); Exchange Privilege;
Requirements for Exchange; Tax
Consequences; Making an Exchange(1-
3).
Item 8. Redemption or Repurchase How to Redeem Shares; Special
Redemption Featues; Contingent
Deferred Sales Charge; Elimination
of Contingent Deferred Sales Charge;
Systematic Withdrawal Program;
Accounts With Low Balances(1-3).
Item 9. Pending Legal Proceedings None.
PART B. INFORMATION REQUIRED IN A STATEMENT OF ADDITIONAL INFORMATION.

Item 10. Cover Page Cover Page.
Item 11. Table of Contents Table of Contents.
Item 12. General Information and
History General Information About the Fund.
Item 13. Investment Objectives and
Policies Investment Objective and Policies.
Item 14. Management of the Fund Fund for U.S. Government Securities,
Inc. Management
Item 15. Control Persons and Principal
Holders of Securities Fund Ownership.
Item 16. Investment Advisory and Other
Services Investment Advisory Services.
Administrative Services.
Item 17. Brokerage Allocation Brokerage Transactions.
Item 18. Capital Stock and Other
Securities Not applicable.
Item 19. Purchase, Redemption and
Pricing of Securities Being
Offered Purchasing Shares; Determining Net
Asset Value; Redeeming Shares.
Item 20. Tax Status Tax Status.
Item 21. Underwriters Distribution of Shares.
Item 22. Calculation of Performance
Data Total Return; Yield; Performance
Comparisons.
Item 23. Financial Statements Financial Statements. [Incorporated
by reference to Annual Report of
Registrant dated March 31, 1995;
File Nos. 2-33490 and 811-1890.

FUND FOR U.S. GOVERNMENT SECURITIES, INC.
CLASS A SHARES
CLASS B SHARES
CLASS C SHARES
COMBINED PROSPECTUS

The shares of Fund for U.S. Government Securities, Inc. (the "Fund") represent
interests in an open-end, diversified management investment company (a mutual
fund) that seeks current income by investing in a professionally managed
diversified portfolio limited to U.S. government securities.

THE SHARES OFFERED BY THIS PROSPECTUS ARE NOT DEPOSITS OR OBLIGATIONS OF ANY
BANK, ARE NOT ENDORSED OR GUARANTEED BY ANY BANK, AND ARE NOT INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER
GOVERNMENT AGENCY. INVESTMENT IN THESE SHARES INVOLVES INVESTMENT RISKS,
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.

This prospectus contains the information you should read and know before you
invest in the Fund. Keep this prospectus for future reference.

The Fund has also filed a Combined Statement of Additional Information dated May
31, 1995, with the Securities and Exchange Commission. The information contained
in the Combined Statement of Additional Information is incorporated by reference
into this prospectus. You may request a copy of the Statement of Additional
Information free of charge by calling 1-800-235-4669. To obtain other
information or to make inquiries about the Fund, contact your financial
institution.

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.

Prospectus dated May 31, 1995

-------------------------------------- -------------------------------------

TABLE OF CONTENTS

Summary of Fund Expenses.......................................................1

Financial Highlights...........................................................4

Synopsis.......................................................................7

Liberty Family of Funds........................................................8

Federated LifeTrackTM Program (Class
A Shares and Class C Shares)..............................................9

Investment Information........................................................10
Investment Objective........................................................10
Investment Policies.........................................................10
Investment Limitations......................................................12

Net Asset Value...............................................................13

Investing in the Fund.........................................................14

How To Purchase Shares........................................................15
Investing In Class A Shares.................................................15
Investing In Class B Shares.................................................17
Investing In Class C Shares.................................................18
Special Purchase Features...................................................19

Exchange Privilege............................................................19
Requirements For Exchange...................................................20
Tax Consequences............................................................20
Making an Exchange..........................................................20
Telephone Instructions......................................................20

How To Redeem Shares..........................................................21
Special Redemption Features.................................................22
Contingent Deferred Sales Charge............................................23
Elimination of Contingent Deferred
Sales Charge.............................................................24

Account and Share Information.................................................25

Fund Information..............................................................26
Management of the Fund......................................................26
Distribution of Shares......................................................27
Administration of the Fund..................................................28

Shareholder Information.......................................................29
Voting Rights...............................................................29

Tax Information...............................................................30
Federal Income Tax..........................................................30
Pennsylvania Personal Property Taxes........................................30

Performance Information.......................................................30

-------------------------------------- ------------------------------------

SUMMARY OF FUND EXPENSES
FUND FOR U.S. GOVERNMENT SECURITIES, INC.

CLASS A SHARES

<TABLE>
<S> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load Imposed on Purchases (as a percentage of offering price)...................................... 4.50%
Maximum Sales Load Imposed on Reinvested Dividends (as a percentage of offering price)........................... None
Contingent Deferred Sales Charge (as a percentage of original
purchase price or redemption proceeds, as applicable) (1)...................................................... 0.00%
Redemption Fee (as a percentage of amount redeemed, if applicable)............................................... None
Exchange Fee..................................................................................................... None
ANNUAL CLASS A SHARES OPERATING EXPENSES
(As a percentage of average net assets)
Management Fee (after waiver) (2)................................................................................ 0.54%
12b-1 Fee........................................................................................................ None
Total Other Expenses............................................................................................. 0.41%
Shareholder Services Fee (after waiver) (3)....................................................... 0.15%
Total Class A Shares Operating Expenses (4)............................................................. 0.95%
</TABLE>

(1) Class A Shares purchased with the proceeds of a redemption of Shares of an
unaffiliated investment company purchased and redeemed with a sales load and
not distributed by Federated Securities Corp., may be charged a Contingent
Deferred Sales Charge of .50 of 1.00% for redemptions made within one full
year of purchase. See "Contingent Deferred Sales Charge."

(2) The management fee has been reduced to reflect the voluntary waiver of a
portion of the management fee. The adviser can terminate this voluntary
waiver at any time at its sole discretion. The maximum management fee is
.25% of the first $500 million in average daily net assets, .225% of the
second $500 million in average daily net assets, .20% of average daily net
assets in excess of $1 billion, plus 4.50% of the Fund's annual gross income
(excluding any capital gains or losses).

(3) The maximum shareholder services fee is 0.25%.

(4) The total Class A Shares operating expenses in the table above are based on
expenses expected during the fiscal year ending March 31, 1996. The total
Class A Shares operating expenses were 0.95% for the fiscal year ended March
31, 1995 and were 0.97% absent the voluntary waiver of a portion of the
management fee.

The purpose of this table is to assist an investor in understanding the
various costs and expenses that a shareholder of Class A Shares will bear,
either directly or indirectly. For more complete descriptions of the various
costs and expenses, see "Investing in Class A Shares" and "Fund Information".
Wire-transferred redemptions of less than $5,000 may be subject to additional
fees.

<TABLE>
<CAPTION>
EXAMPLE 1 year 3 years 5 years 10 years
<S> <C> <C> <C> <C>
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....................................................................... $59 $74 $95 $156
You would pay the following expenses on the same investment, assuming no
redemption................................................................... $54 $74 $95 $156
</TABLE>

THE ABOVE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.

-------------------------------------- -------------------------------------

SUMMARY OF FUND EXPENSES
FUND FOR U.S. GOVERNMENT SECURITIES, INC.
CLASS B SHARES

<TABLE>
<S> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load Imposed on Purchases (as a percentage of offering price)....................................... None
Maximum Sales Load Imposed on Reinvested Dividends (as a percentage of offering price)............................ None
Contingent Deferred Sales Charge (as a percentage of original
purchase price or redemption proceeds, as applicable) (1)....................................................... 5.50%
Redemption Fee (as a percentage of amount redeemed, if applicable)................................................ None
Exchange Fee...................................................................................................... None

ANNUAL CLASS B SHARES OPERATING EXPENSES
(As a percentage of average net assets)
Management Fee (after waiver) (2)................................................................................. 0.54%
12b-1 Fee......................................................................................................... 0.75%
Total Other Expenses.............................................................................................. 0.47%
Shareholder Services Fee (after waiver) (3)........................................................ 0.21%
Total Class B Shares Operating Expenses (4)(5)............................................................ 1.76%

</TABLE>

(1) The contingent deferred sales charge is 5.50% in the first year declining to
1.00% in the sixth year and 0.00% thereafter. (See "Contingent Deferred
Sales Charge").

(3) The maximum shareholder services fee is 0.25%.

(4) Class B Shares convert to Class A Shares (which pay lower ongoing expenses)
approximately eight years after purchase.

(5) The total Class B Shares operating expenses in the table above are based on
expenses expected during the fiscal year ending March 31, 1996. The total
Class B Shares operating expenses were 1.76% for the fiscal year ended March
31, 1995 and were 1.82% absent the voluntary waivers of a portion of the
management fee and a portion of the shareholder service fee.

The purpose of this table is to assist an investor in understanding the
various costs and expenses that a shareholder of Class B Shares will bear,
either directly or indirectly. For more complete descriptions of the various
costs and expenses, see "Investing in Class B Shares" and "Fund Information".
Wire-transferred redemptions of less than $5,000 may be subject to additional
fees.

Long-term shareholders may pay more than the economic equivalent of the
maximum front-end sales charges permitted under the rules of the National
Association of Securities Dealers, Inc.

<TABLE>
<CAPTION>
EXAMPLE 1 year 3 years
<S> <C> <C>
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............................................................ $75 $99
You would pay the following expenses on the same investment, assuming no redemption.................. $18 $55
</TABLE>

THE ABOVE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.

-------------------------------------- -------------------------------------

SUMMARY OF FUND EXPENSES
FUND FOR U.S. GOVERNMENT SECURITIES, INC.
CLASS C SHARES

<TABLE>
<S> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load Imposed on Purchases (as a percentage of offering price)....................................... None
Maximum Sales Load Imposed on Reinvested Dividends (as a percentage of offering price)............................ None
Contingent Deferred Sales Charge (as a percentage of original
purchase price or redemption proceeds, as applicable) (1)....................................................... 1.00%
Redemption Fee (as a percentage of amount redeemed, if applicable)................................................ None
Exchange Fee...................................................................................................... None

ANNUAL CLASS C SHARES OPERATING EXPENSES
(As a percentage of average net assets)
Management Fee (after waiver) (2)................................................................................. 0.54%
12b-1 Fee......................................................................................................... 0.75%
Total Other Expenses.............................................................................................. 0.49%
Shareholder Services Fee (after waiver) (3)........................................................ 0.23%
Total Class C Shares Operating Expenses (4)............................................................... 1.78%

</TABLE>

(1) The contingent deferred sales charge assessed is 1.00% of the lesser of the
original purchase price or the net asset value of Shares redeemed within one
year of their purchase date. For a more complete description, see
"Contingent Deferred Sales Charge."

(3) The maximum shareholder services fee is 0.25%.

(4) The total Class C Shares operating expenses in the table above are based on
expenses expected during the fiscal year ending March 31, 1996. The total
Class C Shares operating expenses were 1.79% for the fiscal year ended March
31, 1995 and were 1.81% absent the voluntary waiver of a portion of the
management fee.

The purpose of this table is to assist an investor in understanding the
various costs and expenses that a shareholder of Class C Shares will bear,
either directly or indirectly. For more complete descriptions of the various
costs and expenses, see "Investing in Class C Shares" and "Fund Information".
Wire-transferred redemptions of less than $5,000 may be subject to additional
fees.

Long-term shareholders may pay more than the economic equivalent of the
maximum front-end sales charges permitted under the rules of the National
Association of Securities Dealers, Inc.

<TABLE>
<CAPTION>
EXAMPLE 1 year 3 years 5 years 10 years
<S> <C> <C> <C> <C>
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.................. $28 $56 $96 $209
You would pay the following expenses on the same investment, assuming no
redemption....................................................................... $18 $56 $96 $209
</TABLE>

THE ABOVE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.

-------------------------------------- -------------------------------------

FINANCIAL HIGHLIGHTS--CLASS A SHARES
FUND FOR U.S. GOVERNMENT SECURITIES, INC.
--------------------------------------------------------------------------------

(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)

The following table has been audited by Deloitte & Touche LLP, the Fund's
independent auditors. Their report, dated May 15, 1995, on the Fund's financial
statements for the year ended March 31, 1995 and on the following table for the
period presented, is included in the Annual Report, which is incorporated by
reference. This table should be read in conjunction with the Fund's financial
tatements and notes thereto, which may be obtained from the Fund.

<TABLE>
<CAPTION>
PERIOD ENDED MARCH 31,
1995 1994 1993 1992 1991 1990 1989 1988 1987
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF
PERIOD $ 7.89 $ 8.50 $ 8.51 $ 8.41 $ 8.23 $ 8.01 $ 8.41 $ 8.56 $ 8.77
------------------------------
INCOME FROM INVESTMENT
OPERATIONS
------------------------------
Net investment income 0.57 0.63 0.71 0.75 0.77 0.78 0.76 0.78 0.80
------------------------------
Net realized and unrealized
gain (loss) on investments (0.23) (0.61) (0.03) 0.08 0.19 0.21 (0.40) (0.15) (0.21)
------------------------------ --------- --------- --------- --------- --------- --------- --------- --------- ---------
Total from investment
operations 0.34 0.02 0.68 0.83 0.96 0.99 0.36 0.63 0.59
------------------------------
LESS DISTRIBUTIONS
------------------------------
Distributions to shareholders
from net investment income (0.56) (0.63) (0.69) (0.73) (0.78) (0.77) (0.76) (0.78) (0.80)
------------------------------ --------- --------- --------- --------- --------- --------- --------- --------- ---------
NET ASSET VALUE, END OF PERIOD $ 7.67 $ 7.89 $ 8.50 $ 8.51 $ 8.41 $ 8.23 $ 8.01 $ 8.41 $ 8.56
------------------------------ --------- --------- --------- --------- --------- --------- --------- --------- ---------
TOTAL RETURN(A) 4.59% 0.13% 8.31% 10.20% 12.12% 12.59% 4.47% 7.66% 7.23%
------------------------------
RATIOS TO AVERAGE NET ASSETS
------------------------------
Expenses 0.95% 0.88% 0.83% 0.91% 0.97% 0.96% 0.96% 0.96% 0.95%
------------------------------
Net investment income 7.41% 7.50% 8.33% 8.69% 9.21% 9.32% 9.22% 9.31% 9.24%
------------------------------
Expense waiver/reimbursement
(b) 0.02% -- -- -- -- 0.04% -- 0.01% 0.05%
------------------------------
SUPPLEMENTAL DATA
------------------------------
Net assets,
end of period
(000 omitted) $1,367,710 $1,693,293 $1,844,712 $1,384,117 $1,133,017 $1,039,493 $1,054,055 $1,150,395 $1,193,389
------------------------------
Portfolio Turnover 154% 149% 52% 43% 27% 98% 83% 72% 135%
------------------------------

<CAPTION>
1986
<S> <C>
NET ASSET VALUE, BEGINNING OF
PERIOD $ 8.37
------------------------------
INCOME FROM INVESTMENT
OPERATIONS
------------------------------
Net investment income 0.93
------------------------------
Net realized and unrealized
gain (loss) on investments 0.46
------------------------------ ---------
Total from investment
operations 1.39
------------------------------
LESS DISTRIBUTIONS
------------------------------
Distributions to shareholders
from net investment income (0.99)
------------------------------ ---------
NET ASSET VALUE, END OF PERIOD $ 8.77
------------------------------ ---------
TOTAL RETURN(A) 17.42%
------------------------------
RATIOS TO AVERAGE NET ASSETS
------------------------------
Expenses 0.91%
------------------------------
Net investment income 10.51%
------------------------------
Expense waiver/reimbursement
(b) 0.13%
------------------------------
SUPPLEMENTAL DATA
------------------------------
Net assets,
end of period
(000 omitted) $761,290
------------------------------
Portfolio Turnover 179%
------------------------------
</TABLE>

(a) Based on net asset value, which does not reflect the sales load or
contingent deferred sales charge, if applicable.

(b) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.

Further information about the Fund's performance is contained in the Fund's
Annual Report, dated March 31, 1995 which can be obtained free of charge.

-------------------------------------- ------------------------------------

FINANCIAL HIGHLIGHTS--CLASS B SHARES
FUND FOR U.S. GOVERNMENT SECURITIES, INC.
--------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)

The following table has been audited by Deloitte & Touche LLP, the Fund's
independent auditors. Their report, dated May 15, 1995, on the Fund's financial
statements for the year ended March 31, 1995 and on the following table for the
period presented, is included in the Annual Report, which is incorporated by
reference. This table should be read in conjunction with the Fund's financial
statements and notes thereto, which may be obtained from the Fund.

<TABLE>
<CAPTION>
PERIOD ENDED
MARCH 31,
1995(A)
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 7.75
----------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
----------------------------------------------------------------------------------------------------
Net investment income 0.37
----------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments (0.06)
---------------------------------------------------------------------------------------------------- -------
Total from investment operations 0.31
---------------------------------------------------------------------------------------------------- -------
LESS DISTRIBUTIONS
----------------------------------------------------------------------------------------------------
Distributions to shareholders from net investment income (0.37)
----------------------------------------------------------------------------------------------------
Distributions in excess of net investment income (0.02)(b)
---------------------------------------------------------------------------------------------------- -------
Total distributions (0.39)
---------------------------------------------------------------------------------------------------- -------
NET ASSET VALUE, END OF PERIOD $ 7.67
---------------------------------------------------------------------------------------------------- -------
TOTAL RETURN(C) 4.13%
----------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
----------------------------------------------------------------------------------------------------
Expenses 1.76%(d)
----------------------------------------------------------------------------------------------------
Net investment income 7.02%(d)
----------------------------------------------------------------------------------------------------
Expense waiver/reimbursement(e) 0.06%(d)
----------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
----------------------------------------------------------------------------------------------------
Net assets, end of period (000 omitted) $ 34,276
----------------------------------------------------------------------------------------------------
Portfolio turnover 154%
----------------------------------------------------------------------------------------------------
</TABLE>

(a) Reflects operations for the period from July 25, 1994 (date of initial
public offering) to March 31, 1995.

(b) Distributions in excess of net investment income were a result of certain
book and tax timing differences. These distributions do not represent a
return of capital for federal income tax purposes.

(d) Computed on an annualized basis.

(e) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.

Further information about the Fund's performance is contained in the Fund's
Annual Report, dated March 31, 1995 which can be obtained free of charge.

-------------------------------------- ------------------------------------

FINANCIAL HIGHLIGHTS--CLASS C SHARES
FUND FOR U.S. GOVERNMENT SECURITIES, INC.
--------------------------------------------------------------------------------

(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)

The following table has been audited by Deloitte & Touche LLP, the Fund's
independent auditors. Their report dated May 15, 1995, on the Fund's financial
statements for the year ended March 31, 1995 and on the following table for the
period presented, is included in the Annual Report, which is incorporated by
reference. This table should be read in conjunction with the Fund's financial
statements and notes thereto, which may be obtained from the Fund.

<TABLE>
<CAPTION>
PERIOD ENDED
MARCH 31,
<S> <C> <C>
1995 1994(A)
NET ASSET VALUE, BEGINNING OF PERIOD $ 7.89 $ 8.54
-----------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
-----------------------------------------------------------------------------------------------
Net investment income 0.51 0.54
-----------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments (0.23) (0.63)
----------------------------------------------------------------------------------------------- --------- -----------
Total from investment operations 0.28 (0.09)
----------------------------------------------------------------------------------------------- --------- -----------
LESS DISTRIBUTIONS
-----------------------------------------------------------------------------------------------
Distributions to shareholders from net investment income (0.50) (0.54)
-----------------------------------------------------------------------------------------------
Distributions in excess of net investment income -- (0.02)(b)
----------------------------------------------------------------------------------------------- --------- -----------
Total distributions (0.50) (0.56)
----------------------------------------------------------------------------------------------- --------- -----------
NET ASSET VALUE, END OF PERIOD $ 7.67 $ 7.89
----------------------------------------------------------------------------------------------- --------- -----------
TOTAL RETURN(C) 3.72% (1.17%)
-----------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
-----------------------------------------------------------------------------------------------
Expenses 1.79% 1.81%(d)
-----------------------------------------------------------------------------------------------
Net investment income 6.56% 6.45%(d)
-----------------------------------------------------------------------------------------------
Expense waiver/reimbursement(e) 0.02% --
-----------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
-----------------------------------------------------------------------------------------------
Net assets, end of period (000 omitted) $80,519 $103,433
-----------------------------------------------------------------------------------------------
Portfolio Turnover 154% 149%
-----------------------------------------------------------------------------------------------
</TABLE>

(a) Reflects operations for the period from April 26, 1993 (date of initial
public offering) to March 31, 1994.]

(d) Computed on an annualized basis.

(e) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.

Further information about the Fund's performance is contained in the Fund's
Annual Report, dated March 31, 1995 which can be obtained free of charge.

------------------------------------------------------------------------------
SYNOPSIS

The Fund was incorporated under the laws of the State of Maryland on June 9,
1969. The Fund's address is Federated Investors Tower, Pittsburgh, Pennsylvania
15222-3779. The Articles of Incorporation permit the Fund to offer separate
series of shares representing interests in separate portfolios of securities. As
of the date of this prospectus, the Board of Directors ("Directors") has
established three classes of shares for the Fund, known as Class A Shares, Class
B Shares, and Class C Shares (individually and collectively as the context
requires, "Shares").

Shares of the Fund are designed for individuals and institutions seeking current
income through a professionally managed, diversified portfolio of securities
which are guaranteed as to the payment of principal and interest by the U.S.
government, its agencies or instrumentalities.

For information on how to purchase Shares of the Fund, please refer to "How to
Purchase Shares." The minimum initial investment for Class A Shares is $500. The
minimum initial investment for Class B Shares and Class C Shares is $1500.
However, the minimum initial investment for a retirement account in any class is
$50. Subsequent investments in any class must be in amounts of at least $100,
except for retirement plans which must be in amounts of at least $50.

Class A Shares are sold at net asset value plus an applicable sales load and are
redeemed at net asset value. However, a contingent deferred sales charge is
imposed under certain circumstances. For a more complete description, see "How
to Redeem Shares."

Class B Shares are sold at net asset value and are redeemed at net asset value.
However, a contingent deferred sales charge is imposed on certain Shares which
are redeemed within six full years of purchase. See "How to Redeem Shares."

Class C Shares are sold at net asset value. A contingent deferred sales charge
of 1.00% will be charged on assets redeemed within the first 12 months following
purchase. See "How to Redeem Shares."

In addition the Fund also pays a shareholder services fee at an annual rate not
to exceed 0.25% of average daily net assets.

Additionally, information regarding the exchange privilege offered with respect
to the Fund and certain other funds for which affiliates of Federated Investors
serve as principal underwriter ("Federated Funds") can be found under "Exchange
Privilege."

Federated Advisers is the investment adviser (the "Adviser") to the Fund and
receives compensation for its services. The Adviser's address is Federated
Investors Tower, Pittsburgh, Pennsylvania 15222-3779.

Investors should be aware of the following general observations. The Fund may
make certain investments and employ certain investment techniques that involve
risks, including entering into repurchase agreements, investing in when-issued
securities, and lending portfolio securities. These risks are described under
"Investment Policies."

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LIBERTY FAMILY OF FUNDS

This Fund is a member of a family of mutual funds, collectively known as the
Liberty Family of Funds. The other funds in the Liberty Family of Funds are:

American Leaders Fund, Inc., providing growth of capital and income through
high-quality stocks;

Capital Growth Fund, providing appreciation of capital primarily through equity
securities;

International Equity Fund, providing long-term capital growth and income
through international securities;

International Income Fund, providing a high level of current income consistent
with prudent investment risk through high-quality debt securities denominated
primarily in foreign currencies;

Liberty Equity Income Fund, Inc., providing above-average income and capital
appreciation through income producing equity securities;

Liberty High Income Bond Fund, Inc., providing high current income through
high-yielding, lower-rated corporate bonds;

Liberty Municipal Securities Fund, Inc., providing a high level of current
income exempt from federal regular income tax through municipal bonds;

Liberty U.S. Government Money Market Trust, providing current income consistent
with stability of principal through high-quality U.S. government securities;

Liberty Utility Fund, Inc., providing current income and long-term growth of
income, primarily through electric, gas, and communications utilities;

Limited Term Fund, providing a high level of current income consistent with
minimum fluctuation in principal value through investment grade securities;

Limited Term Municipal Fund, providing a high level of current income exempt
from federal regular income tax consistent with the preservation of principal,
primarily limited to municipal securities;

Michigan Intermediate Municipal Trust, providing current income exempt from
federal regular income tax and the personal income taxes imposed by the state
of Michigan and Michigan municipalities, primarily through Michigan municipal
securities;

Pennsylvania Municipal Income Fund, providing current income exempt from
federal regular income tax and the personal income taxes imposed by the
Commonwealth of Pennsylvania, primarily through Pennsylvania municipal
securities;

Strategic Income Fund, providing a high level of current income, primarily
through domestic and foreign corporate debt obligations;

Tax-Free Instruments Trust, providing current income consistent with stability
of principal and exempt from federal income tax, through high-quality,
short-term municipal securities; and

World Utility Fund, providing total return primarily through securities issued
by domestic and foreign companies in the utilities industries.

Prospectuses for these funds are available by writing to Federated Securities
Corp.

Each of the funds may also invest in certain other types of securities as
described in each fund's prospectus.

The Liberty Family of Funds provides flexibility and diversification for an
investor's long-term investment planning. It enables an investor to
meet the challenges of changing market conditions by offering convenient
exchange privileges which give access to various investment vehicles and by
providing the investment services of proven, professional investment advisers.

Shareholders of Class A Shares who have been designated as Liberty Life Members
are exempt from sales loads on future purchases in and exchanges between the
Class A Shares of any funds in the Liberty Family of Funds, as long as they
maintain a $500 balance in one of the Liberty Funds.

FEDERATED LIFETRACKTM PROGRAM (CLASS A SHARES AND CLASS C SHARES)

The Fund is also a member of the Federated LifeTrackTM Program sold through
financial representatives. The Federated LifeTrackTM Program is an integrated
program of investment options, plan recordkeeping, and consultation services for
401(k) and other participant-directed benefit and savings plans. Under the
Federated LifeTrackTM Program, employers or plan trustees may select a group of
investment options to be offered in a plan which also uses the Federated
LifeTrackTM Program for recordkeeping and administrative services. Additional
fees are charged to participating plans for these services. As part of the
Federated LifeTrackTM Program, exchanges may readily be made between investment
options selected by the employer or a plan trustee.

Other funds participating in the Federated LifeTrackTM Program are: American
Leaders Fund, Inc., Capital Growth Fund, Capital Preservation Fund,
International Equity Fund, International Income Fund, Liberty Equity Income
Fund, Inc., Liberty High Income Bond Fund, Inc., Liberty Utility Fund, Inc.,
Prime Cash Series, Stock and Bond Fund, Inc., and Strategic Income Fund.

With respect to Class A Shares, no sales load is imposed on purchases made by
qualified retirement plans with over $l million invested in funds participating
in the Federated LifeTrackTM Program.

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INVESTMENT INFORMATION

INVESTMENT OBJECTIVE

The investment objective of the Fund is to provide current income. While there
is no assurance that the Fund will achieve its investment objective, it
endeavors to do so by following the investment policies described in this
prospectus. The investment objective and the policies and limitations described
below cannot be changed without approval of shareholders.

INVESTMENT POLICIES

ACCEPTABLE INVESTMENTS

The Fund invests only in securities which are primary or direct obligations of
the U.S. government, its agencies or instrumentalities, or which are guaranteed
by the U.S. government, its agencies, or instrumentalities, and in certain
collateralized mortgage obligations ("CMOs") described below.

The U.S. government securities in which the Fund invests include:

direct obligations of the U.S. Treasury such as U.S. Treasury bills, notes, and
bonds; and

obligations of U.S. government agencies or instrumentalities such as: the Farm
Credit System, including the National Bank for Cooperatives, Farm Credit Banks,
and Banks for Cooperatives; Farmers Home Administration; Federal Home Loan
Banks; and Federal National Mortgage Association.

Some obligations issued or guaranteed by agencies or instrumentalities of the
U.S. government, such as Government National Mortgage Association participation
certificates, are backed by the full faith and credit of the U.S. Treasury. No
assurances can be given that the U.S. government will provide financial support
to other agencies or instrumentalities, since it is not obligated to do so.
These instrumentalities are supported by:

the issuer's right to borrow an amount limited to a specific line of credit
from the U.S. Treasury;

the discretionary authority of the U.S. government to purchase certain
obligations of an agency or instrumentality;

or the credit of the agency or instrumentality.

There is no limit to portfolio maturity. The prices of fixed-income government
securities fluctuate inversely in relation to the direction of interest rates.
The prices of longer term securities fluctuate more widely in response to market
interest rate changes.

Depending upon market conditions, the Fund, at times, will be primarily invested
in mortgage-backed securities, but at times will hold U.S. Treasuries.

COLLATERALIZED MORTGAGE OBLIGATIONS

Collateralized mortgage obligations are debt obligations collateralized by
mortgage loans or mortgage pass-through securities. Typically, CMOs are
collateralized by Government National Mortgage Association, Federal National
Mortgage Association, or Federal Home Loan Mortgage Corporation Participation
Certificates, but also may be collateralized by whole loans or Private
Pass-Throughs (such collateral collectively hereinafter referred to as "Mortgage
Assets"). Multiclass pass-through securities are equity interests in a trust
composed of Mortgage Assets. Unless the context indicates otherwise, all
references herein to CMOs include multiclass pass-through securities. Payments
of principal of and interest on the Mortgage Assets, and any reinvestment income
thereon, provide the funds to pay debt service on the CMOs or make scheduled
distributions on the multiclass pass-through securities. CMOs in which the Fund
invests are issued by agencies or instrumentalities of the U.S. government. The
issuer of a series of CMOs may elect to be treated as a Real Estate Mortgage
Investment Conduit (a "REMIC"), which has certain special tax attributes.

In a CMO, a series of bonds or certificates is issued in multiple classes. Each
class of CMOs, often referred to as a "tranche," is issued at a specific fixed
or floating coupon rate and has a stated maturity or final distribution date.
Principal prepayments on the Mortgage Assets may cause the CMOs to be retired
substantially earlier than their stated maturities or final distribution dates.
Interest is paid or accrues on all classes of the CMOs on a monthly, quarterly
or semi-annual basis. The principal of and interest on the Mortgage Assets may
be allocated among the several classes of a series of a CMO in innumerable ways.
In one structure, payments of principal, including any principal prepayments, on
the Mortgage Assets are applied to the classes of a CMO in the order of their
respective stated maturities or final distribution dates, so that no payment of
principal will be made on any class of CMOs until all other classes having an
earlier stated maturity or final distribution date have been paid in full.

CMOs that include a class bearing a floating rate of interest also may include a
class whose yield floats inversely against a specified index rate. These
"inverse floaters" are more volatile than conventional fixed or floating rate
classes of a CMO and the yield thereon, as well as the value thereof, will
fluctuate in inverse proportion to changes in the index on which interest rate
adjustments are based. As a result, the yield on an inverse floater class of a
CMO will generally increase when market yields (as reflected by the index)
decrease and decrease when market yields increase. The extent of the volatility
of inverse floaters depends on the extent of anticipated changes in market rates
of interest. Generally, inverse floaters provide for interest rate adjustments
based upon a multiple of the specified interest index, which further increases
their volatility. The degree of additional volatility will be directly
proportional to the size of the multiple used in determining interest rate
adjustments.

Because the mortgages underlying mortgage-backed securities often may be prepaid
without penalty or premium, mortgage-backed securities are generally subject to
higher prepayment risks than most other types of debt instruments. Prepayment
risks on mortgage securities tend to increase during periods of declining
mortgage interest rates because many borrowers refinance their mortgages to take
advantage of the more favorable rates. Depending upon market conditions, the
yield that the Fund receives from the reinvestment of such prepayments, or any
scheduled principal payments, may be lower than the yield on the original
mortgage security. As a consequence, mortgage securities may be a less effective
means of "locking in" interest rates than other types of debt securities having
the same stated maturity and may also have less potential for capital
appreciation. For certain types of asset pools, such as collateralized mortgage
obligations, prepayments may be allocated to one tranche of securities ahead of
other tranches, in order to reduce the risk of prepayment for the other
tranches.

Prepayments may result in a capital loss to the Fund to the extent that the
prepaid mortgage securities were purchased at a market premium over their stated
principal amount. Conversely, the prepayment of mortgage securities purchased at
a market discount from their stated principal amount will accelerate the
recognition of interest income by the Fund, which would be taxed as ordinary
income when distributed to the shareholders.

REPURCHASE AGREEMENTS

The U.S. government securities in which the Fund invests may be purchased
pursuant to repurchase agreements. Repurchase agreements are arrangements in
which banks, broker/dealers, and other recognized financial institutions sell
U.S. government or other securities to the Fund and agree at the time of sale to
repurchase them at a mutually agreed upon time and price.

As a matter of investment practice which can be changed without shareholder
approval, the Fund will not invest more than 10% of its total assets in
securities which are illiquid, including repurchase agreements providing for
settlement in more than seven days after notice.

WHEN-ISSUED AND DELAYED
DELIVERY TRANSACTIONS

The Fund may purchase securities on a when-issued or delayed delivery basis.
These transactions are arrangements in which the Fund purchases securities with
payment and delivery scheduled for a future time. The seller's failure to
complete these transactions may cause the Fund to miss a price or yield
considered to be advantageous. Settlement dates may be a month or more after
entering into these transactions and the market values of the securities
purchased may vary from purchase prices. Accordingly, the Fund may pay more or
less than the market value of the securities on the settlement date.

The Fund may dispose of a commitment prior to settlement if the Adviser deems it
appropriate to do so. In addition, the Fund may enter into transactions to sell
its purchase commitments to third parties at current market values and
simultaneously acquire other commitments to purchase similar securities at later
dates. The Fund may realize short-term profits or losses upon the sale of such
commitments.

LENDING OF PORTFOLIO SECURITIES

In order to generate additional income, the Fund may lend portfolio securities
on a short-term or a long-term basis, up to one-third of the value of its total
assets to broker/dealers, banks, or other institutional borrowers of securities.
The Fund will only enter into loan arrangements with broker/dealers, banks, or
other institutions which the Adviser has determined are creditworthy under
guidelines established by the Fund's Directors and will receive collateral equal
to at least 100% of the value of the securities loaned in the form of cash or
U.S. government securities.

There is the risk that when lending portfolio securities, the securities may not
be available to the Fund on a timely basis and the Fund may, therefore, lose the
opportunity to sell the securities at a desirable price. In addition, in the
event that a borrower of securities would file for bankruptcy or become
insolvent, disposition of the securities may be delayed pending court action.

PORTFOLIO TURNOVER

Securities in the Fund's portfolio will be sold whenever the Fund's Adviser
believes it is appropriate to do so in light of the Fund's investment objective,
without regard to the length of time a particular security may have been held.
The Adviser to the Fund does not anticipate that portfolio turnover will result
in adverse tax consequences. Any such trading will increase the Fund's portfolio
turnover rate and transaction costs.

INVESTMENT LIMITATIONS

The Fund will not borrow money except, under certain circumstances, the Fund may
borrow up to 10% of the value of its total assets.

The following limitation may be changed by the Directors without shareholder
approval.

Shareholders will be notified before any material change in this limitation
becomes effective.

The Fund will not own securities of open-end or closed-end investment companies,
except under certain circumstances and subject to certain limitations not
exceeding 10% of its net assets.

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NET ASSET VALUE

The Fund's net asset value per Share fluctuates. The net asset value for Shares
is determined by adding the interest of each class of Shares in the market value
of all securities and other assets of the Fund, subtracting the interest of each
class of Shares in the liabilities of the Fund and those attributable to each
class of Shares, and dividing the remainder by the total number of each class of
Shares outstanding. The net asset value for each class of Shares may differ due
to the variance in daily net income realized by each class. Such variance will
reflect only accrued net income to which the shareholders of a particular class
are entitled.

The net asset value of each class of Shares of the Fund is determined at 4:00
p.m. (Eastern time), Monday through Friday, except on: (i) days on which there
are not sufficient changes in the value of the Fund's portfolio securities that
it's net asset value might be materially affected; (ii) days during which no
Shares are tendered for redemption and no orders to purchase Shares are
received; or (iii) the following holidays: New Year's Day, President's Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day, and
Christmas Day.

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INVESTING IN THE FUND

The Fund offers investors three classes of Shares that carry sales loads and
contingent deferred sales charges in different forms and amounts and which bear
different levels of expenses.

CLASS A SHARES

An investor who purchases Class A Shares pays a maximum sales load of 4.50% at
the time of purchase. As a result, Class A Shares are not subject to any charges
when they are redeemed (except for special programs offered under "Purchases
with Proceeds From Redemptions of Unaffiliated Investment Companies.) Certain
purchases of Class A Shares qualify for reduced sales loads. See "Reducing or
Eliminating the Sales Load." Class A Shares have no conversion feature.

CLASS B SHARES

Class B Shares are sold without an initial sales load, but are subject to a
contingent deferred sales charge of up to 5.50% if redeemed within six full
years following purchase. Class B Shares also bear a higher 12b-1 fee than Class
A Shares. Class B Shares will automatically convert into Class A Shares, based
on relative net asset value, on or around the fifteenth of the month eight full
years after the purchase date. Class B Shares provide an investor the benefit of
putting all of the investor's dollars to work from the time the investment is
made, but (until conversion) will have a higher expense ratio and pay lower
dividends than Class A Shares due to the higher 12b-1 fee.

CLASS C SHARES

Class C Shares are sold without an initial sales load, but are subject to a
1.00% contingent deferred sales charge on assets redeemed within the first 12
months following purchase. Class C Shares provide an investor the benefit of
putting all of the investor's dollars to work from the time the investment is
made, but will have a higher expense ratio and pay lower dividends than Class A
Shares due to the higher 12b-1 fee. Class C Shares have no conversion feature.

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HOW TO PURCHASE SHARES

Shares of the Fund are sold on days on which the New York Stock Exchange is
open. Shares of the Fund may be purchased as described below, either through a
financial institution (such as a bank or broker/dealer which has a sales
agreement with the distributor) or by wire or by check directly to the Fund,
with a minimum initial investment of $500 for Class A Shares and $1,500 for
Class B Shares and Class C Shares. Additional investments can be made for as
little as $100. The minimum initial and subsequent investment for retirement
plans is only $50. (Financial institutions may impose different minimum
investment requirements on their customers.)

In connection with any sale, Federated Securities Corp. may from time to time
offer certain items of nominal value to any shareholder or investor. The Fund
reserves the right to reject any purchase request. An account must be
established at a financial institution or by completing, signing, and returning
the new account form available from the Fund before Shares can be purchased.

INVESTING IN CLASS A SHARES

Class A Shares are sold at their net asset value next determined after an order
is received, plus a sales load as follows:

<TABLE>
<S> <C> <C> <C>
DEALER
SALES LOAD SALES LOAD CONCESSION
AS A AS A AS A
PERCENTAGE PERCENTAGE PERCENTAGE
OF OF NET OF PUBLIC
AMOUNT OF OFFERING AMOUNT OFFERING
TRANSACTION PRICE INVESTED PRICE
Less than $100,000 4.50% 4.71% 4.00%
$100,000 but less
than $250,000 3.75% 3.90% 3.25%
$250,000 but less
than $500,000 2.50% 2.56% 2.25%
$500,000 but less
than $1 million 2.00% 2.04% 1.80%
$1 million or greater 0.00% 0.00% 0.25%*
</TABLE>

*See sub-section entitled "DEALER CONCESSION."

No sales load is imposed for Class A Shares purchased through bank trust
departments, investment advisers registered under the Investment Adviser Act of
1940, as amended, or retirement plans where the third party administrator has
entered into certain arrangements with Federated Securities Corp. or its
affiliates, or to shareholders designated as Liberty Life Members. However,
investors who purchase Shares through a trust department, investment adviser, or
retirement plan may be charged an additional service fee by the institution.
Additionally, no sales load is imposed for Class A Shares purchased through
"wrap accounts" or similar programs, under which clients pay a fee or fees for
services.

No sales load is imposed on purchases made by retirement plans with over $1
million invested in funds available through the Federated LifeTrackTM Program.

DEALER CONCESSION

For sales of Class A Shares, a dealer will normally receive up to 90% of the
applicable sales load. Any portion of the sales load which is not paid to a
dealer will be retained by the distributor. However, the distributor, may offer
to pay dealers up to 100% of the sales load retained by it. Such payments may
take the form of cash or promotional incentives, such as reimbursement of
certain expenses of qualified employees and their spouses to attend
informational meetings about the Fund or other special events at
recreational-type facilities, or items of material value. In some instances,
these incentives will be made available only to dealers whose employees have
sold or may sell a significant amount of Shares. On purchases of $1 million or
more, the investor pays no sales load; however, the distributor will make twelve
monthly payments to the dealer totaling 0.25% of the public offering price over
the first year following the purchase. Such payments are
based on the original purchase price of Shares outstanding at each month end.

The sales load for Shares sold other than through registered broker/dealers will
be retained by Federated Securities Corp. Federated Securities Corp. may pay
fees to banks out of the sales load in exchange for sales and/or administrative
services performed on behalf of the bank's customers in connection with the
initiation of customer accounts and purchases of Shares.

REDUCING OR ELIMINATING
THE SALES LOAD

The sales load can be reduced or eliminated on the purchase of Class A Shares
through:

quantity discounts and accumulated purchases;

concurrent purchases;

signing a 13-month letter of intent;

using the reinvestment privilege; or

purchases with proceeds from redemptions of unaffiliated investment company
shares.

QUANTITY DISCOUNTS AND
ACCUMULATED PURCHASES

As shown in the table above, larger purchases reduce the sales load paid. The
Fund will combine purchases of Class A Shares made on the same day by the
investor, the investor's spouse, and the investor's children under age 21 when
it calculates the sales load. In addition, the sales load, if applicable, is
reduced for purchases made at one time by a trustee or fiduciary for a single
trust estate or a single fiduciary account.

If an additional purchase of Class A Shares is made, the Fund will consider the
previous purchases still invested in the Fund. For example, if a shareholder
already owns Class A Shares having a current value at the public offering price
of $90,000 and he purchases $10,000 more at the current public offering price,
the sales load on the additional purchase according to the schedule now in
effect would be 3.75%, not 4.50%.

To receive the sales load reduction, Federated Securities Corp. must be notified
by the shareholder in writing or by his financial institution at the time the
purchase is made that Class A Shares are already owned or that purchases are
being combined. The Fund will reduce the sales load after it confirms the
purchases.

CONCURRENT PURCHASES

For purposes of qualifying for a sales load reduction, a shareholder has the
privilege of combining concurrent purchases of two or more funds in the Liberty
Family of Funds, the purchase price of which includes a sales load. For example,
if a shareholder concurrently invested $30,000 in one of the other funds in the
Liberty Family of Funds with a sales load, and $70,000 in this Fund, the sales
load would be reduced.

To receive this sales load reduction, Federated Securities Corp. must be
notified by the shareholder in writing or by his financial institution at the
time the concurrent purchases are made. The Fund will reduce the sales load
after it confirms the purchases.

LETTER OF INTENT

If a shareholder intends to purchase at least $100,000 of shares of the funds in
the Liberty Family of Funds (excluding money market funds) over the next 13
months, the sales load may be reduced by signing a letter of intent to that
effect. This letter of intent includes a provision for a sales load adjustment
depending on the amount actually purchased within the 13-month period and a
provision for the custodian to hold up to 4.50% of the total amount intended
to be purchased in escrow (in Shares) until such purchase is completed.

The Shares held in escrow in the shareholder's account will be released upon
fulfillment of the letter of intent or the end of the 13-month period, whichever
comes first. If the amount specified in the letter of intent is not purchased,
an appropriate number of escrowed Shares may be redeemed in order to realize the
difference in the sales load.

While this letter of intent will not obligate the shareholder to purchase
Shares, each purchase during the period will be at the sales load applicable to
the total amount intended to be purchased. At the time a letter of intent is
established, current balances in accounts in any Class A Shares of any fund in
the Liberty Family of Funds, excluding money market accounts, will be aggregated
to provide a purchase credit towards fulfillment of the letter of intent. Prior
trade prices will not be adjusted.

REINVESTMENT PRIVILEGE

If Class A Shares in the Fund have been redeemed, the shareholder has the
privilege, within 120 days, to reinvest the redemption proceeds at the
next-determined net asset value without any sales load. Federated Securities
Corp. must be notified by the shareholder in writing or by his financial
institution of the reinvestment in order to eliminate a sales load. If the
shareholder redeems his Class A Shares in the Fund, there may be tax
consequences.

PURCHASES WITH PROCEEDS FROM
REDEMPTIONS OF UNAFFILIATED
INVESTMENT COMPANIES

Investors may purchase Class A Shares at net asset value, without a sales load,
with the proceeds from the redemption of Shares of an unaffiliated investment
company that were purchased or sold with a sales load or commission and were not
distributed by Federated Securities Corp. The purchase must be made within 60
days of the redemption, and Federated Securities Corp. must be notified by the
investor in writing, or by his financial institution, at the time the purchase
is made. From time to time, the Fund may offer dealers a payment of .50 of 1.00%
for Shares purchased under this program. If Shares are purchased in this manner,
fund purchases will be subject to a contingent deferred sales charge for one
year from the date of purchase. Shareholders will be notified prior to the
implementation of any special offering as described above.

INVESTING IN CLASS B SHARES

Class B Shares are sold at their net asset value next determined after an order
is received. While Class B Shares are sold without an initial sales load, under
certain circumstances described under "Contingent Deferred Sales Charge--Class B
Shares," a contingent deferred sales charge may be applied by the distributor at
the time Class B Shares are redeemed.

CONVERSION OF CLASS B SHARES

Class B Shares will automatically convert into Class A Shares on or around
the fifteenth of the month eight full years after the purchase date, except as
noted below, and will no longer be subject to a distribution services fee (see
"Distribution of Shares"). Such conversion will be on the basis of the relative
net asset values per share, without the imposition of any sales load, fee or
other charge. Class B Shares acquired by exchange from Class B Shares of another
fund in the Liberty Family of Funds will convert into Class A Shares based on
the time of the initial purchase. For purposes of conversion to Class A Shares,
Shares purchased through the reinvestment of dividends and distributions paid on
Class B Shares will be considered to be held in a separate sub-account. Each
time any Class B Shares in the shareholder's account (other than those in the
sub-account) convert to Class A Shares, an equal pro rata portion of the Class B
Shares in the sub-account will also convert to Class A Shares. The conversion of
Class B Shares to Class A Shares is subject to the continuing availability of a
ruling from the Internal Revenue Service or an opinion of counsel that such
conversions will not constitute taxable events for federal tax purposes. There
can be no assurance that such ruling or opinion will be available, and the
conversion of Class B Shares to Class A Shares will not occur if such ruling or
opinion is not available. In such event, Class B Shares would continue to be
subject to higher expenses than Class A Shares for an indefinite period.

Orders for $250,000 or more of Class B Shares will automatically be invested in
Class A Shares.

INVESTING IN CLASS C SHARES

Class C Shares are sold at net asset value next determined after an order is
received. A contingent deferred sales charge of 1.00% will be charged on assets
redeemed within the first full 12 months following purchase. For a complete
description of this charge see "Contingent Deferred Sales Charge--Class C
Shares."

PURCHASING SHARES THROUGH A FINANCIAL INSTITUTION

An investor may call his financial institution (such as a bank or an investment
dealer) to place an order to purchase Shares. Orders placed through a financial
institution are considered received when the Fund is notified of the purchase
order or when payment is converted into federal funds. Purchase orders through a
registered broker/dealer must be received by the broker before 4:00 p.m.
(Eastern time) and must be transmitted by the broker to the Fund before 5:00
p.m. (Eastern time) in order for Shares to be purchased at that day's price.
Purchase orders through other financial institutions must be received by the
financial institution and transmitted to the Fund before 4:00 p.m. (Eastern
time) in order for Shares to be purchased at that day's price. It is the
financial institution's responsibility to transmit orders promptly. Financial
institutions may charge additional fees for their services.

The financial institution which maintains investor accounts in Class B Shares or
Class C Shares with the Fund must do so on a fully disclosed basis unless it
accounts for share ownership periods used in calculating the contingent deferred
sales charge (see "Contingent Deferred Sales Charge"). In addition, advance
payments made to financial institutions may be subject to reclaim by the
distributor for accounts transferred to financial institutions which do not
maintain investor accounts on a fully disclosed basis and do not account for
share ownership periods.

PURCHASING SHARES BY WIRE

Once an account has been established, Shares may be purchased by wire by calling
the Fund. All information needed will be taken over the telephone, and the order
is considered received when State Street Bank receives payment by wire. Federal
funds should be wired as follows: State Street Bank and Trust Company, Boston,
MA; Atten; EDGEWIRE; For Credit to: (Fund Name) (Fund Class); (Fund Number);
Account Number; Trade Date and Order Number; Group Number or Dealer Number;
Nominee or Institution Name; and ABA Number 011000028. Shares cannot be
purchased by wire on holidays when wire transfers are restricted.

PURCHASING SHARES BY CHECK

Once an account has been established, Shares may be purchased by sending a check
made payable to the name of the Fund (designate class of Shares and account
number) to: Federated Services Company, P.O. Box 8600, Boston, MA 02266-8600.
Orders by mail are considered received when payment by check is converted
into federal funds (normally the business day after the check is received).

SPECIAL PURCHASE FEATURES

SYSTEMATIC INVESTMENT PROGRAM

Once a Fund account has been opened, shareholders may add to their investment on
a regular basis in a minimum amount of $100. Under this program, funds may be
automatically withdrawn periodically from the shareholder's checking account at
an Automated Clearing House ("ACH") member and invested in the Fund at the net
asset value next determined after an order is received by the Fund, plus the
sales load, if applicable. Shareholders should contact their financial
institution or the Fund to participate in this program.

RETIREMENT PLANS

Fund Shares can be purchased as an investment for retirement plans or IRA
accounts. For further details, contact the Fund and consult a tax adviser.

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EXCHANGE PRIVILEGE

CLASS A SHARES

Class A shareholders may exchange all or some of their Shares for Class A Shares
of other funds in the Liberty Family of Funds at net asset value. Neither the
Fund nor any of the funds in the Liberty Family of Funds imposes any additional
fees on exchanges. Participants in a retirement plan under the Federated
LifeTrackTM Program may exchange all or some of their Shares for Class A Shares
of other funds offered under the plan at net asset value.

CLASS B SHARES

Class B shareholders may exchange all or some of their Shares for Class B Shares
of other funds in the Liberty Family of Funds. (Not all funds in the Liberty
Family of Funds currently offer Class B Shares. Contact your financial
institution regarding the availability of other Class B Shares in the Liberty
Family of Funds). Exchanges are made at net asset value without being assessed a
contingent deferred sales charge on the exchanged Shares. To the extent that a
shareholder exchanges Shares for Class B Shares in other funds in the Liberty
Family of Funds, the time for which the exchanged-for Shares are to be held will
be added to the time for which exchanged-from Shares were held for purposes of
satisfying the applicable holding period.

CLASS C SHARES

Class C shareholders may exchange all or some of their Shares for Class C Shares
in other funds in the Liberty Family of Funds at net asset value without a
contingent deferred sales charge. (Not all funds in the Liberty Family of Funds
currently offer Class C Shares. Contact your financial institution regarding the
availability of other Class C Shares in the Liberty Family of Funds.)
Participants in a retirement plan under the Program may exchange some or all of
their Shares for Class C Shares of other funds offered under their plan at net
asset value without a contingent deferred sales charge. To the extent that a
shareholder exchanges Shares for Class C Shares in other funds in the Liberty
Family of Funds, the time for which the exchanged-for Shares are to be held will
be added to the time for which exchanged-from Shares were held for purposes of
satisfying the applicable holding period. For more information, see "Contingent
Deferred Sales Charge."

REQUIREMENTS FOR EXCHANGE

Shareholders using this privilege must exchange Shares having a net asset value
equal to the minimum investment requirements of the fund into which the exchange
is being made. Before the exchange, the shareholder must receive a prospectus of
the fund for which the exchange is being made.

This privilege is available to shareholders resident in any state in which the
Shares being acquired may be sold. Upon receipt of proper instructions and
required supporting documents, Shares submitted for exchange are redeemed and
proceeds invested in the same class of Shares of the other fund. The exchange
privilege may be modified or terminated at any time. Shareholders will be
notified of the modification or termination of the exchange privilege.

Further information on the exchange privilege and prospectuses for the Liberty
Family of Funds are available by contacting the Fund.

TAX CONSEQUENCES

An exercise of the exchange privilege is treated as a sale for federal income
tax purposes. Depending upon the circumstances, a capital gain or loss may be
realized.

MAKING AN EXCHANGE

Instructions for exchanges for the Liberty Family of Funds may be given in
writing or by telephone. Written instructions may require a signature guarantee.
Shareholders of the Fund may have difficulty in making exchanges by telephone
through brokers and other financial institutions during times of drastic
economic or market changes. If a shareholder cannot contact his broker or
financial institution by telephone, it is recommended that an exchange request
be made in writing and sent by overnight mail to Federated Services Company, 500
Victory Road--2nd Floor, Quincy, Massachusetts 02171.

Instructions for exchanges for retirement plans participating in the Federated
LifeTrackTM Program should be given to the plan administrator.

TELEPHONE INSTRUCTIONS

Telephone instructions made by the investor may be carried out only if a
telephone authorization form completed by the investor is on file with the Fund.
If the instructions are given by a broker, a telephone authorization form
completed by the broker must be on file with the Fund. If reasonable procedures
are not followed by the Fund, it may be liable for losses due to unauthorized or
fraudulent telephone instructions. Shares may be exchanged between two funds by
telephone only if the two funds have identical shareholder registrations.

Any Shares held in certificate form cannot be exchanged by telephone but
must be forwarded to Federated Services Company, P.O. Box 8600, Boston,
Massachusetts 02266-8600 and deposited to the shareholder's account before being
exchanged. Telephone exchange instructions are recorded and will be binding upon
the shareholder. Such instructions will be processed as of 4:00 p.m. (Eastern
time) and must be received by the Fund before that time for Shares to be
exchanged the same day. Shareholders exchanging into a Fund will begin receiving
dividends the following business day. This privilege may be modified or
terminated at any time.

------------------------------------------------------------------------------

HOW TO REDEEM SHARES

Shares are redeemed at their net asset value, less any applicable contingent
deferred sales charge, next determined after the Fund receives the redemption
request. Redemptions will be made on days on which the Fund computes its net
asset value. Redemption requests must be received in proper form and can be made
as described below. Redemptions of Shares held through retirement plans
participating in the Federated LifeTrackTM Program will be governed by the
requirements of the respective plans.

REDEEMING SHARES THROUGH A FINANCIAL INSTITUTION

Shares of the Fund may be redeemed by calling your financial institution to
request the redemption. Shares will be redeemed at the net asset value, less any
applicable contingent deferred sales charge next determined after the Fund
receives the redemption request from the financial institution. Redemption
requests through a registered broker/dealer must be received by the broker
before 4:00 p.m. (Eastern time) and must be transmitted by the broker to the
Fund before 5:00 p.m. (Eastern time) in order for Shares to be redeemed at that
day's net asset value. Redemption requests through other financial institutions
(such as banks) must be received by the financial institution and transmitted to
the Fund before 4:00 p.m. (Eastern time) in order for Shares to be redeemed at
that day's net asset value. The financial institution is responsible for
promptly submitting redemption requests and providing proper written redemption
instructions. Customary fees and commissions may be charged by the financial
institution for this service.

REDEEMING SHARES BY TELEPHONE

Shares may be redeemed in any amount by calling the Fund provided the Fund has a
properly completed authorization form. These forms can be obtained from
Federated Securities Corp. Proceeds will be mailed in the form of a check, to
the shareholder's address of record or by wire transfer to the shareholder's
account at a domestic commercial bank that is a member of the Federal Reserve
System. The minimum amount for a wire transfer is $1,000. Proceeds from redeemed
Shares purchased by check or through ACH will not be wired until that method of
payment has cleared.

Telephone instructions will be recorded. If reasonable procedures are not
followed by the Fund, it may be liable for losses due to unauthorized or
fraudulent telephone instructions. In the event of drastic economic or market
changes, a shareholder may experience difficulty in redeeming by telephone. If
this occurs, "Redeeming Shares By Mail" should be considered. If at any time the
Fund shall determine it necessary to terminate or modify the telephone
redemption privilege, shareholders would be promptly notified.

REDEEMING SHARES BY MAIL

Shares may be redeemed in any amount by mailing a written request to: Federated
Services Company, Fund Name, Fund Class, P.O. Box 8600, Boston, MA 02266-8600.

The written request should state: Fund Name and the Class designation; the
account name as registered with the Fund; the account number; and the number of
Shares to be redeemed or the dollar amount requested. All owners of the account
must sign the request exactly as the Shares are registered. It is recommended
that any share certificates be sent by registered or certified mail with the
written request.

If you are requesting a redemption of any amount to be sent to an address other
than that on record with the Fund, or a redemption payable to a third party,
then all signatures appearing on the written request must be guaranteed by a
bank which is a member of the Federal Deposit Insurance Corporation, a trust
company, a member firm of a domestic stock exchange, or any other "eligible
guarantor institution," as defined by the Securities and Exchange Act of 1934.
The Fund does not accept signatures guaranteed by a notary public.

The Fund and its transfer agent have adopted standards for accepting signature
guarantees from the above institutions. The Fund may elect in the future to
limit eligible signature guarantors to institutions that are members of a
signature guarantee program. The Fund and its transfer agent reserve the right
to amend these standards at any time without notice.

Normally, a check for the proceeds is mailed within one business day, but in no
event more than seven days, after receipt of a proper written redemption
request.

SPECIAL REDEMPTION FEATURES

SYSTEMATIC WITHDRAWAL PROGRAM

Shareholders who desire to receive payments of a predetermined amount not less
than $100 may take advantage of the Systematic Withdrawal Program. Under this
program, Shares are redeemed to provide for periodic withdrawal payments in an
amount directed by the shareholder.

Depending upon the amount of the withdrawal payments, the amount of
dividends paid and capital gains distributions with respect to Shares, and the
fluctuation of the net asset value of Shares redeemed under this program,
redemptions may reduce, and eventually deplete, the shareholder's investment in
the Fund. For this reason, payments under this program should not be considered
as yield or income on the shareholder's investment in the Fund. To be eligible
to participate in this program, a shareholder must have an account value of at
least $10,000. A shareholder may apply for participation in this program through
his financial institution. Due to the fact that Class A Shares are sold with a
sales load, it is not advisable for shareholders to continue to purchase Class A
Shares while participating in this program. A contingent deferred sales charge
may be imposed on Class B Shares and Class C Shares.

CONTINGENT DEFERRED SALES CHARGE

Shareholders may be subject to a contingent deferred sales charge upon
redemption of their Shares under the following circumstances:

CLASS A SHARES

Class A Shares purchased under a periodic special offering with the proceeds of
a redemption of Shares of an unaffiliated investment company purchased or sold
with a sales load and not distributed by Federated Securities Corp. may be
charged a contingent deferred sales charge of .50 of 1.00% for redemptions made
within one full year of purchase. Any applicable contingent deferred sales
charge will be imposed on the lesser of the net asset value of the redeemed
Shares at the time of purchase or the net asset value of the redeemed Shares at
the time of redemption.

CLASS B SHARES

Shareholders redeeming Class B Shares from their Fund accounts within six full
years of the purchase date of those Shares will be charged a contingent deferred
sales charge by the Fund's distributor. Any applicable contingent deferred sales
charge will be imposed on the lesser of the net asset value of the redeemed
Shares at the time of purchase or the net asset value of the redeemed Shares at
the time of redemption in accordance with the following schedule:

<TABLE>
<CAPTION>
CONTINGENT
YEAR OF REDEMPTION DEFERRED
AFTER PURCHASE SALES CHARGE
<S> <C>
First 5.50%
Second 4.75%
Third 4%
Fourth 3%
Fifth 2%
Sixth 1%
Seventh and thereafter 0%
</TABLE>

CLASS C SHARES

Shareholders redeeming Class C Shares from their Fund accounts within one full
year of the purchase date of those Shares will be charged a contingent deferred
sales charge by the Fund's distributor of 1.00%. Any applicable contingent
deferred sales charge will be imposed on the lesser of the net asset value of
the redeemed Shares at the time of purchase or the net asset value of the
redeemed Shares at the time of redemption. No contingent deferred sales charge
will be charged for redemptions of Class C Shares from the Federated LifeTrackTM
Program.

CLASS A SHARES, CLASS B SHARES,
AND CLASS C SHARES

The contingent deferred sales charge will be deducted from the redemption
proceeds otherwise payable to the shareholder and will be retained by the
distributor. The contingent deferred sales charge will not be imposed with
respect to: (1) Shares acquired through the reinvestment of dividends or
distributions of long-term capital gains; and (2) Shares held for more than six
full years from the date of purchase with respect to Class B Shares and one full
year from the date of purchase with respect to Class C Shares and applicable
Class A Shares. Redemptions will be processed in a manner intended to maximize
the amount of redemption which will not be subject to a contingent deferred
sales charge. In computing the amount of the applicable contingent deferred
sales charge, redemptions are deemed to have occurred in the following order:
(1) Shares acquired through the reinvestment of dividends and long-term capital
gains; (2) Shares held for more than six full years from the date of purchase
with respect to Class B Shares and one full year from the date of purchase with
respect to Class C Shares and applicable Class A Shares; (3) Shares held for
fewer than six years with respect to Class B Shares and one full year from the
date of purchase with respect to Class C Shares and applicable Class A Shares on
a first-in, first-out basis. A contingent deferred sales charge is not assessed
in connection with an exchange of Fund Shares for Shares of other funds in the
Liberty Family of Funds in the same class (see "Exchange Privilege"). Any
contingent deferred sales charge imposed at the time the exchanged for Shares
are redeemed is calculated as if the shareholder had held the Shares from the
date on which he became a shareholder of the exchanged-from Shares. Moreover,
the contingent deferred sales charge will be eliminated with respect to certain
redemptions (see "Elimination of Contingent Deferred Sales Charge").

ELIMINATION OF CONTINGENT DEFERRED SALES CHARGE

A contingent deferred sales charge will not be charged in connection with
exchanges of Shares for Class A Shares in other Liberty Family Funds or
Federated LifeTrackTM Program funds or redemptions from the Federated
LifeTrackTM Program.

The contingent deferred sales charge will be eliminated with respect to the
following redemptions: (1) redemptions following the death or disability, as
defined in Section 72(m)(7) of the Internal Revenue Code of 1986, of a
shareholder; (2) redemptions representing minimum required distributions from an
Individual Retirement Account or other retirement plan to a shareholder who has
attained the age of 70-1/2; and (3) involuntary redemptions by the Fund of
Shares in shareholder accounts that do not comply with the minimum balance
requirements. No contingent deferred sales charge will be imposed on redemptions
of Shares held by Directors, employees and sales representatives of the Fund,
the distributor, or affiliates of the Fund or distributor; employees of any
financial institution that sells Shares of the Fund pursuant to a sales
agreement with the distributor; and spouses and children under the age of 21 of
the aforementioned persons. Finally, no contingent deferred sales charge will be
imposed on the redemption of Shares originally purchased through a bank trust
department, an investment adviser registered under the Investment Advisers Act
of 1940, as amended, or retirement plans where the third party administrator has
entered into certain arrangements with Federated Securities Corp. or its
affiliates, or any other financial institution, to the extent that no payments
were advanced for purchases made through such entities. The Directors reserve
the right to discontinue elimination of the contingent deferred sales charge.
Shareholders will be notified of such elimination. Any Shares purchased prior to
the termination of such waiver would have the contingent deferred sales charge
eliminated as provided in the Fund's prospectus at the time of the purchase of
the Shares. If a shareholder making a redemption qualifies for an elimination of
the contingent deferred sales charge, the shareholder must notify Federated
Securities Corp. or the transfer agent in writing that he is entitled to such
elimination.

------------------------------------------------------------------------------

ACCOUNT AND SHARE
INFORMATION

CERTIFICATES AND CONFIRMATIONS

As transfer agent for the Fund, Federated Services Company maintains a share
account for each shareholder. Share certificates are not issued unless requested
in writing to Federated Services Company.

Detailed confirmations of each purchase and redemption are sent to each
shareholder. Monthly confirmations are sent to report dividends paid during that
month.

DIVIDENDS

Dividends are declared and paid monthly to all shareholders invested in the Fund
on the record date. Dividends and distributions are automatically reinvested in
additional Shares of the Fund on payment dates at the ex-dividend date net asset
value without a sales load, unless shareholders request cash payments on the new
account form or by contacting the transfer agent. All shareholders on the record
date are entitled to the dividend. If Shares are redeemed or exchanged prior to
the record date or purchased after the record date, those Shares are not
entitled to that month's dividend.

CAPITAL GAINS

Net long-term capital gains realized by the Fund, if any, will be distributed at
least once every twelve months.

ACCOUNTS WITH LOW BALANCES

Due to the high cost of maintaining accounts with low balances, the Fund may
redeem Shares in any account, except retirement plans, and pay the proceeds to
the shareholder if the account balance falls below the Class A Share required
minimum value of $500 or the required minimum value of $1,500 for Class B Shares
and Class C Shares. This requirement does not apply, however, if the balance
falls below the required minimum value because of changes in the net asset value
of the respective Share Class. Before Shares are redeemed to close an account,
the shareholder is notified in writing and allowed 30 days to purchase
additional Shares to meet the minimum requirement.

------------------------------------------------------------------------------
FUND INFORMATION

MANAGEMENT OF THE FUND

BOARD OF DIRECTORS

The Fund is managed by a Board of Directors. The Directors are responsible for
managing the Fund's business affairs and for exercising all the Fund's powers
except those reserved for the shareholders. An Executive Committee of the Board
of Directors handles the Board's responsibilities between meetings of the Board.

INVESTMENT ADVISER

Investment decisions for the Fund are made by Federated Advisers, the Fund's
investment adviser, subject to direction by the Directors. The Adviser
continually conducts investment research and supervision for the Fund and is
responsible for the purchase or sale of portfolio instruments, for which it
receives an annual fee from the Fund.

ADVISORY FEES
The Adviser receives an annual investment advisory fee based on the Fund's
average daily net assets as shown on the chart below, plus 4.5% of the Fund's
gross income (excluding any capital gains or losses).

<TABLE>
<CAPTION>
AVERAGE DAILY % OF AVERAGE
NET ASSETS DAILY NET ASSETS
<S> <C>
First $500 million .25 of 1%
Second $500 million .225 of 1%
Over $1 billion .20 of 1%
</TABLE>

The Adviser may voluntarily waive a portion of its fee or reimburse the Fund for
certain operating expenses. The Adviser can terminate this voluntary waiver at
any time at its sole discretion. The Adviser has also undertaken to reimburse
the Fund for operating expenses in excess of limitations established by certain
states.

ADVISER'S BACKGROUND

Federated Advisers, a Delaware business trust organized on April 11, 1989, is a
registered investment adviser under the Investment Advisers Act of 1940. It is a
subsidiary of Federated Investors. All of the Class A (voting) Shares of
Federated Investors are owned by a trust, the trustees of which are John F.
Donahue, Chairman and Trustee of Federated Investors, Mr. Donahue's wife, and
Mr. Donahue's son, J. Christopher Donahue, who is President and Trustee of
Federated Investors.

Federated Advisers and other subsidiaries of Federated Investors serve as
investment advisers to a number of investment companies and private accounts.
Certain other subsidiaries also provide administrative services to a number of
investment companies. With over $72 billion invested across more than 260 funds
under management and/or administration by its subsidiaries, as of December 31,
1994, Federated Investors is one of the largest mutual fund investment managers
in the United States. With more than 1,750 employees, Federated continues to be
led by the management who founded the company in 1955. Federated funds are
presently at work in and through 4,000 financial institutions nationwide. More
than 100,000 investment professionals have selected Federated funds for their
clients.

Kathleen M. Foody-Malus has been the Fund's portfolio manager since July, 1993.
Ms. Foody-Malus joined Federated Investors in 1983 and has been a Vice President
of the Fund's investment adviser since 1993. Ms. Foody-Malus served as an
Assistant Vice President of the investment adviser from 1990 until 1992, and
from 1986 until 1989 she acted as an investment analyst. Ms. Foody-Malus
received her M.B.A. in Accounting/Finance from the University of Pittsburgh.

James D. Roberge has been the Fund's portfolio manager since March 1, 1995. Mr.
Roberge joined Federated Investors in 1990 and has been a Vice President of the
Fund's investment adviser since October, 1994. Prior to this, Mr. Roberge served
as an Assistant Vice President of the Fund's investment adviser. From 1990 until
1992, Mr. Roberge acted as an investment analyst. Mr. Roberge is a Chartered
Financial Analyst and received his M.B.A. in Finance from Wharton Business
School in 1990.

DISTRIBUTION OF SHARES

Federated Securities Corp. is the principal distributor for Shares of the Fund.
Federated Securities Corp. is located at Federated Investors Tower, Pittsburgh,
Pennsylvania 15222-3779. It is a Pennsylvania corporation organized on November
14, 1969, and is the principal distributor for a number of investment companies.
Federated Securities Corp. is a subsidiary of Federated Investors.

The distributor may offer to pay financial institutions an amount equal to 1% of
the net asset value of Class C Shares purchased by their clients or customers at
the time of purchase (except for participants in the Federated LifeTrackTM
Program). These payments will be made directly by the distributor from its
assets, and will not be made from assets of the Fund. Financial institutions may
elect to waive the initial payment described above; such waiver will result in
the waiver by the Fund of the otherwise applicable contingent deferred sales
charge.

The distributor will pay dealers an amount equal to 5.5% of the net asset value
of Class B Shares purchased by their clients or customers. These payments will
be made directly by the distributor from its assets, and will not be made from
the assets of the Fund. Dealers may voluntarily waive receipt of all or any
portion of these payments. The distributor may pay a portion of the distribution
fee discussed below to financial institutions that waive all or any portion of
the advance payments.

DISTRIBUTION PLAN (CLASS B SHARES AND CLASS C SHARES ONLY) AND SHAREHOLDER
SERVICES PLANS

Under a distribution plan adopted in accordance with Investment Company Act Rule
12b-1 (the "Distribution Plan"), Class B Shares and Class C Shares will pay a
fee to the distributor in an amount computed at an annual rate of .75% of the
average daily net assets of each class of Shares to finance any activity which
is principally intended to result in the sale of Shares subject to the
Distribution Plan. For Class C Shares, the distributor may select financial
institutions such as banks, fiduciaries, custodians for public funds, investment
advisers, and broker/dealers to provide sales support services as agents for
their clients or customers. With respect to Class B Shares, because distribution
fees to be paid by the Fund to the distributor may not exceed an annual rate of
.75% of each class of Shares' average daily net assets, it will take the
distributor a number of years to recoup the expenses it has incurred for its
distribution and distribution-related services pursuant to the Plan.

The Distribution Plan is a compensation type plan. As such, the Fund makes no
payments to the distributor except as described above. Therefore, the Fund does
not pay for unreimbursed expenses of the distributor, including amounts expended
by the distributor in excess of amounts received by it from the Fund, interest,
carrying or other financing charges in connection with excess amounts expended,
or the distributor's overhead expenses. However, the distributor may be able to
recover such amounts or may earn a profit from future payments made by Shares
under the Plan.

In addition, the Fund has adopted a Shareholder Services Plan (the "Services
Plan") under which it may make payments up to 0.25 of 1% of the average daily
net asset value of Class A Shares, Class B Shares, and Class C Shares to obtain
certain personal services for shareholders and for the maintenance of
shareholder accounts ("Shareholder Services"). The Fund has entered into a
Shareholder Services Agreement with Federated Shareholder Services, a subsidiary
of Federated Investors, under which Federated Shareholder Services will either
perform shareholder services directly or will select financial institutions to
perform shareholder services. Financial institutions will receive fees based
upon Shares owned by their clients or customers. The schedules of such fees and
the basis upon which such fees will be paid will be determined from time to time
by the Fund and Federated Shareholder Services.

The Glass-Steagall Act prohibits a depository institution (such as a commercial
bank or savings and loan association) from being an underwriter or distributor
of most securities. In the event the Glass-Steagall Act is deemed to prohibit
depository institutions from acting in the capacities described above or should
Congress relax current restrictions on depository institutions, the Directors
will consider appropriate changes in the services.

State securities laws governing the ability of depository institutions to act as
underwriters or distributors of securities may differ from interpretations given
to the Glass-Steagall Act and, therefore, banks and financial institutions may
be required to register as dealers pursuant to state laws.

OTHER PAYMENTS TO
FINANCIAL INSTITUTIONS

Federated Securities Corp. will pay financial institutions, at the time of
purchase of Class A Shares, an amount equal to .50 of 1% of the net asset value
of Class A Shares purchased by their clients or customers under the Federated
LifeTrackTM Program or by certain qualified plans as approved by Federated
Securities Corp. (Such payments are subject to a reclaim from the financial
institution should the assets leave the program within 12 months after
purchase.)

Furthermore, with respect to Class A Shares, Class B Shares, and Class C Shares,
the distributor may offer to pay a fee from its own assets to financial
institutions as financial assistance for providing substantial marketing and
sales support. The support may include sponsoring sales, educational and
training seminars for their employees, providing sales literature, and
engineering computer software programs that emphasize the attributes of the
Fund. Such assistance will be predicated upon the amount of Shares the financial
institution sells or may sell, and/or upon the type and nature of sales or
marketing support furnished by the financial institution. Any payments made by
the distributor may be reimbursed by the Fund's investment adviser or its
affiliates.

ADMINISTRATION OF THE FUND

ADMINISTRATIVE SERVICES

Federated Administrative Services, a subsidiary of Federated Investors, provides
administrative personnel and services (including certain legal and financial
reporting services) necessary to operate the Fund. Federated Administrative
Services provides these at an annual rate which relates to the average aggregate
daily net assets of all Federated Funds as specified below:

<TABLE>
<CAPTION>
MAXIMUM AVERAGE AGGREGATE
ADMINISTRATIVE DAILY NET ASSETS
FEE OF THE FEDERATED FUNDS
<C> <S>
0.15 of 1% on the first $250 million
0.125 of 1% on the next $250 million
0.10 of 1% on the next $250 million
0.075 of 1% on assets in excess of
$750 million
</TABLE>

The administrative fee received during any fiscal year shall be at least
$125,000 per portfolio and $30,000 per each additional class of Shares.
Federated Administrative Services may choose voluntarily to waive a portion of
its fee.

CUSTODIAN

State Street Bank and Trust Company, P.O. Box 8600, Boston, Massachusetts
02266-8600, is custodian for the securities and cash of the Fund

TRANSFER AGENT AND DIVIDEND
DISBURSING AGENT

Federated Services Company, P.O. Box 8600, Boston, Massachusetts 02266-8600, is
transfer agent for the Shares of the Fund, and dividend disbursing agent for the
Fund.

INDEPENDENT AUDITORS

The independent auditors for the Fund are Deloitte & Touche LLP, 2500 One PPG
Place, Pittsburgh, PA 15222.

------------------------------------------------------------------------------
SHAREHOLDER INFORMATION

VOTING RIGHTS

Each share of the Fund gives the shareholder one vote in Director elections and
other matters submitted to shareholders for vote. All Shares of each portfolio
or class in the Fund have equal voting rights, except that in matters affecting
only a particular portfolio or class, only Shares of that portfolio or class are
entitled to vote.

As a Maryland corporation, the Fund is not required to hold annual shareholder
meetings. Shareholder approval will be sought only for certain changes in the
Fund's operation and for the election of Directors under certain circumstances.

Directors may be removed by a two-thirds vote of the number of Directors prior
to such removal or by a two-thirds vote of the shareholders at a special
meeting. A special meeting of shareholders shall be called by the Directors upon
the written request of shareholders owning at least 10% of the Fund's
outstanding Shares of all series entitled to vote.

------------------------------------------------------------------------------
TAX INFORMATION

FEDERAL INCOME TAX

The Fund will pay no federal income tax because it expects to meet requirements
of the Internal Revenue Code, as amended, applicable to regulated investment
companies and to receive the special tax treatment afforded to such companies.

Unless otherwise exempt, shareholders are required to pay federal income tax on
any dividends and other distributions, including capital gains distributions,
received. This applies whether dividends and distributions are received in cash
or as additional Shares. Distributions representing long-term capital gains, if
any, will be taxable to shareholders as long-term capital gains no matter how
long the shareholders have held the Shares. No federal income tax is due on any
dividends earned in an IRA or qualified retirement plan until distributed.

PENNSYLVANIA PERSONAL
PROPERTY TAXES

Shares are exempt from personal property taxes imposed by counties,
municipalities, and school districts in Pennsylvania.

Shareholders are urged to consult their own tax advisers regarding the status of
their accounts under state and local tax laws.

------------------------------------------------------------------------------
PERFORMANCE INFORMATION

From time to time the Fund advertises its total return and yield for each class
of Shares.

Total return represents the change, over a specific period of time, in the value
of an investment in each class of Shares after reinvesting all income and
capital gains distributions. It is calculated by dividing that change by the
initial investment and is expressed as a percentage.

The yield of each class of Shares is calculated by dividing the net investment
income per share (as defined by the Securities and Exchange Commission) earned
by each class of Shares over a thirty-day period by the maximum offering price
per share of each class on the last day of the period. This number is then
annualized using semi-annual compounding. The yield does not necessarily reflect
income actually earned by each class of Shares and, therefore, may not correlate
to the dividends or other distributions paid to shareholders.

The performance information reflects the effect of non-recurring charges, such
as the maximum sales load or contingent deferred sales charges, which, if
excluded, would increase the total return and yield.

Total return and yield will be calculated separately for Class A Shares, Class B
Shares and Class C Shares. Because Class B Shares and Class C Shares are subject
to Rule 12b-1 fees, and higher Shareholder Services fees, the yield for Class A
Shares, for the same period, may exceed that of Class B Shares and Class C
Shares.

Because Class A Shares are subject to a sales load, the total return for Class B
Shares and Class C Shares for the same period will exceed that of Class A
Shares. Depending on the dollar amount invested, and the time period for which
any particular class of Shares is held, the total return for any particular
class may exceed that of another.

From time to time, advertisements for Class A Shares, Class B Shares, and Class
C Shares of the Fund may refer to ratings rankings, and other information in
certain financial publications and/or compare the performance of Class A Shares,
Class B Shares, and Class C Shares to certain indices.

FUND FOR U.S. GOVERNMENT
SECURITIES, INC.
CLASS A SHARES
CLASS B SHARES
CLASS C SHARES
COMBINED PROSPECTUS

An Open-End, Diversified
Management Investment Company
May 31, 1995

FEDERATED SECURITIES CORP.
---------------------------------------------
Distributor
A subsidiary of FEDERATED INVESTORS

FEDERATED INVESTORS TOWER
PITTSBURGH, PENNSYLVANIA 15222-3779

360799100
360799407
360799209
G01095-01 (5/95)

Fund For U.S. Government Securities, Inc.
Class A Shares
Class B Shares
Class C Shares
Combined Statement of Additional Information

This Combined Statement of Additional Information should be read
with the combined prospectus for Fund for U.S. Government
Securities, Inc. (the "Fund") dated May 31, 1995. This Statement
is not a prospectus itself. To receive a copy of the prospectus,
write or call the Fund.

Liberty Center
Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779

Statement dated May 31, 1995

FEDERATED SECURITIES CORP.
Distributor
A subsidiary of
FEDERATED INVESTORS
General Information About the
Fund 1
Investment Objective and Policies 1
Types of Investments 1
Stripped Mortgage-Related
Securities 1
When-Issued and Delayed
Delivery Transactions 1
Repurchase Agreements 1
Lending of Portfolio Securities 1
Portfolio Turnover 2
Investment Limitations 2
Fund for U.S. Government
Securities, Inc.
Management 3
Fund Ownership 7
Directors Compensation 7
Investment Advisory Services 8
Adviser to the Fund 8
Advisory Fees 8
Administrative Services 8
Transfer Agent and Dividend
Disbursing Agent 9
Brokerage Transactions 9
Distribution Plan (Class B
Shares and
Class C Shares Only) and
Shareholder Services Plan 9
Conversion to Federal Funds 10
Purchases by Sales
Representatives,
Fund Directors, and Employees 10
Determining Net Asset Value 10
Determining Market Value of
Securities 10
Redeeming Shares 10
Tax Status 11
The Fund's Tax Status 11
Shareholders' Tax Status 11
Total Return 11
Yield 11
Performance Comparisons 12
About Federated Investors 13
Financial Statements 14
General Information About the Fund
The Fund was incorporated under the laws of the State of Maryland on
June 9, 1969. On April 28, 1992, the shareholders of the Fund voted to
permit the Fund to offer separate series and classes of shares. Shares
of the Fund are offered in three classes known as Class A Shares, Class
B Shares, and Class C Shares . This Statement of Additional Information
relates to all three classes shares.
Investment Objective and Policies
The Fund's investment objective is to provide current income. Current
income includes, in general, discount earned on U.S. Treasury bills and
agency discount notes, interest earned on all other U.S. government
securities, and short-term capital gains.
Types of Investments
The Fund invests only in U.S. government securities which are primary or
direct obligations of the U.S. government or its agencies or
instrumentalities or which are guaranteed by the U.S. government, its
agencies or instrumentalities and in certain collateralized mortgage
obligations ("CMOs"). This investment policy and the objective stated
above cannot be changed without approval of shareholders.
Stripped Mortgage-Related Securities
Some of the mortgage-related securities purchased by the Fund may
represent an interest solely in the principal repayments or solely in
the interest payments on mortgage-backed securities (stripped mortgage-
backed securities or "SMBSs"). Due to the possibility of prepayments on
the underlying mortgages, SMBSs may be more interest-rate sensitive than
other securities purchased by the Fund. If prevailing interest rates
fall below the level at which SMBSs were issued, there may be
substantial prepayments on the underlying mortgages, leading to the
relatively early prepayments of principal-only SMBSs and a reduction in
the amount of payments made to holders of interest-only SMBSs. It is
possible that the Fund might not recover its original investment on
interest-only SMBSs if there are substantial prepayments on the
underlying mortgages. Therefore, interest-only SMBSs generally increase
in value as interest rates rise and decrease in value as interest rates
fall, counter to changes in value experienced by most fixed income
securities. The Fund's adviser intends to use this characteristic of
interest-only SMBSs to reduce the effects of interest rate changes on
the value of the Fund's portfolio, while continuing to pursue current
income.
When-Issued and Delayed Delivery Transactions

These transactions are made to secure what is considered to be an
advantageous price or yield for the Fund. No fees or other expenses,
other than normal transaction costs, are incurred. However, liquid
assets of the Fund sufficient to make payment for the securities to be
purchased are segregated on the Fund's records at the trade date. These
assets are marked to market daily and are maintained until the
transaction has been settled. The Fund does not intend to engage in
when-issued and delayed delivery transactions to an extent that would
cause the segregation of more than 20% of the total value of its assets.

Repurchase Agreements
Repurchase agreements are arrangements in which banks, broker/dealers,
and other recognized financial institutions sell U.S. government
securities or certificates of deposit to the Fund and agree at the time
of sale to repurchase them at a mutually agreed upon time and price. The
Fund or its custodian will take possession of the securities subject to
repurchase agreements, and these securities will be marked to market
daily. To the extent that the original seller does not repurchase the
securities from the Fund, the Fund could receive less than the
repurchase price on any sale of such securities. In the event that such
a defaulting seller filed for bankruptcy or became insolvent,
disposition of such securities by the Fund might be delayed pending
court action. The Fund believes that under the regular procedures
normally in effect for custody of the Fund's portfolio securities
subject to repurchase agreements, a court of competent jurisdiction
would rule in favor of the Fund and allow retention or disposition of
such securities. The Fund will only enter into repurchase agreements
with banks and other recognized financial institutions such as
broker/dealers which are deemed by the Fund's investment adviser to be
creditworthy pursuant to guidelines established by the Directors.
Lending of Portfolio Securities
The collateral received when the Fund lends portfolio securities must be
valued daily and, should the market value of the loaned securities
increase, the borrower must furnish additional collateral to the Fund.
During the time portfolio securities are on loan, the borrower pays the
Fund any interest paid on such securities. Loans are subject to
termination at the option of the Fund or the borrower. The Fund may pay
reasonable administrative and custodial fees in connection with a loan.
Portfolio Turnover
The Fund's policy of managing its portfolio of U.S. government
securities, including the sale of securities held for a short period of
time, to achieve its investment objective of current income may result
in high portfolio turnover. The Fund will not attempt to set or meet a
portfolio turnover rate since any turnover would be incidental to
transactions undertaken in an attempt to achieve the Fund's investment
objective.
Investment Limitations
The Fund will not change any of the investment limitations described
below without approval of shareholders.
Selling Short and Buying on Margin
The Fund will not sell any securities short or purchase any
securities on margin but may obtain such short-term credits as may
be necessary for clearance of purchases and sales of securities.
The Fund may purchase and dispose of U.S. government securities
and CMOs before they are issued and may also purchase and dispose
of them on a delayed delivery basis.
Borrowing Money
In extraordinary or emergency situations, the Fund may borrow
amounts not in excess of 10% of its total assets taken at cost.
Pledging Assets
The Fund will not mortgage, pledge, or hypothecate its securities.
Investing in Commodities and Minerals
The Fund will not purchase or sell commodities or commodity
contracts.
Underwriting
The Fund will not underwrite any issue of securities.
Buying or Selling Real Estate
The Fund will not buy or sell real estate.
Lending Cash or Securities
The Fund will not lend any assets except portfolio securities.
This shall not prevent the purchase or holding of U.S. government
securities, repurchase agreements covering U.S. government
securities, or other transactions which are permitted by the
Fund's investment objective and policies or Charter.
The above investment limitations cannot be changed without shareholder
approval. The following limitations, however, may be changed by the
Board of Directors (the "Directors") without shareholder approval.
Shareholders will be notified before any material change in these
limitations become effective.
Investing in Securities of Other Investment Companies
The Fund will not own securities of open-end investment companies,
own more than 3% of the total outstanding voting stock of any
closed-end investment company, invest more than 5% of its total
assets in any closed-end investment company, or invest more than
10% of its total assets in closed-end investment companies in
general. The Fund will purchase securities of closed-end
investment companies only in openmarket transactions involving
only customary broker's commissions. However, these limitations
are not applicable if the securities are acquired in a merger,
consolidation, or acquisition of assets. The Fund will initially
bear its proportionate share of any fees and expenses paid by open-
end funds in addition to the fees and expenses payable directly by
the Fund.
Except with respect to borrowing money, if a percentage limitation
is adhered to at the time of investment, a later increase or
decrease in percentage resulting from any change in value or net
assets will not result in a violation of such restriction.
Investing in Issuers Whose Securities are Owned by Officers and
Directors of the Fund
The Fund will not purchase or retain the securities of any issuers
if the Officers and Directors of the Fund or its investment
adviser owning individually more than 1/2 of 1% of the issuer's
securities together own more than 5% of the issuer's securities.
In order to comply with certain state restrictions, the Fund will
not invest in real estate limited partnerships or oil, gas, or
mineral leases.
The Fund did not borrow money in excess of 5% of the value of its
net assets during the last fiscal year and has no present intent
to do so in the coming fiscal year. The Fund does not intend to
invest more than 5% of the value of its total assets in inverse
floaters or interest-only mortgage-related securities in the
coming fiscal year.
Fund for U.S. Government Securities, Inc. Management
Officers and Directors. Officers and Directors are listed with their
addresses, present positions with Fund for U.S. Government Securities,
Inc., and principal occupations, including those with Federated
Advisers, its affiliates, and the "Funds" described in the Statement of
Additional Information.

John F. Donahue@*
Federated Investors Tower
Pittsburgh, PA

Birthdate: July 28, 1924

Chairman and Director
Chairman and Trustee, Federated Investors, Federated Advisers, Federated
Management, and Federated Research; Chairman and Director, Federated
Research Corp.; Chairman, Passport Research, Ltd.; Director, AEtna Life
and Casualty Company; Chief Executive Officer and Director, Trustee, or
Managing General Partner of the Funds. Mr. Donahue is the father of J.
Christopher Donahue, President and Director of the Company.

Thomas G. Bigley
28th Floor, One Oxford Centre
Pittsburgh, PA
Birthdate: February 3, 1934
Director
Director, Oberg Manufacturing Co.; Chairman of the Board, Children's
Hospital of Pittsburgh; Director, Trustee, or Managing General Partner
of the Funds; formerly, Senior Partner, Ernst & Young LLP.

John T. Conroy, Jr.
Wood/IPC Commercial Department
John R. Wood and Associates, Inc., Realtors
3255 Tamiami Trail North
Naples, FL

Birthdate: June 23, 1937

Director
President, Investment Properties Corporation; Senior Vice-President,
John R. Wood and Associates, Inc., Realtors; President, Northgate
Village Development Corporation; Partner or Trustee in private real
estate ventures in Southwest Florida; Director, Trustee, or Managing
General Partner of the Funds; formerly, President, Naples Property
Management, Inc.

William J. Copeland
One PNC Plaza - 23rd Floor
Pittsburgh, PA

Birthdate: July 4, 1918

Director
Director and Member of the Executive Committee, Michael Baker, Inc.;
Director, Trustee, or Managing General Partner of the Funds; formerly,
Vice Chairman and Director, PNC Bank, N.A., and PNC Bank Corp. and
Director, Ryan Homes, Inc.

J. Christopher Donahue *
Federated Investors Tower
Pittsburgh, PA

Birthdate: April 11, 1949

President and Director
President and Trustee, Federated Investors, Federated Advisers,
Federated Management, and Federated Research; President and Director,
Federated Research Corp.; President, Passport Research, Ltd.; Trustee,
Federated Administrative Services, Federated Services Company, and
Federated Shareholder Services; President or Vice President of the
Funds; Director, Trustee, or Managing General Partner of some of the
Funds. Mr. Donahue is the son of John F. Donahue, Chairman and Director
of the Company.

James E. Dowd
571 Hayward Mill Road
Concord, MA

Birthdate: May 18, 1922

Director
Attorney-at-law; Director, The Emerging Germany Fund, Inc.; Director,
Trustee, or Managing General Partner of the Funds; formerly, Director,
Blue Cross of Massachusetts, Inc.

Lawrence D. Ellis, M.D.*
3471 Fifth Avenue, Suite 1111
Pittsburgh, PA

Birthdate: October 11, 1932

Director
Professor of Medicine and Member, Board of Trustees, University of
Pittsburgh; Medical Director, University of Pittsburgh Medical Center -
Downtown; Member, Board of Directors, University of Pittsburgh Medical
Center; formerly, Hematologist, Oncologist, and Internist, Presbyterian
and Montefiore Hospitals; Director, Trustee, or Managing General Partner
of the Funds.

Edward L. Flaherty, Jr.@

Henny, Kochuba, Meyer and Flaherty
Two Gateway Center - Suite 674
Pittsburgh, PA
Birthdate: June 18, 1924
Director
Attorney-at-law; Partner, Henny, Kochuba, Meyer and Flaherty; Director,
Eat'N Park Restaurants, Inc., and Statewide Settlement Agency, Inc.;
Director, Trustee, or Managing General Partner of the Funds; formerly,
Counsel, Horizon Financial, F.A., Western Region.

Peter E. Madden
225 Franklin Street
Boston, MA

Birthdate: April 16, 1942

Director
Consultant; State Representative, Commonwealth of Massachusetts;
Director, Trustee, or Managing General Partner of the Funds; formerly,
President, State Street Bank and Trust Company and State Street Boston
Corporation and Trustee, Lahey Clinic Foundation, Inc.

Gregor F. Meyer

Henny, Kochuba, Meyer and Flaherty
Two Gateway Center - Suite 674
Pittsburgh, PA
Birthdate: October 6, 1926

Director
Attorney-at-law; Partner, Henny, Kochuba, Meyer and Flaherty; Chairman,
Meritcare, Inc.; Director, Eat'N Park Restaurants, Inc.; Director,
Trustee, or Managing General Partner of the Funds; formerly, Vice
Chairman, Horizon Financial, F.A.

John E. Murray, Jr., J.D., S.J.D.
President, Duquesne University
Pittsburgh, PA
Birthdate: December 20, 1932
Director
President, Law Professor, Duquesne University; Consulting Partner,
Mollica, Murray and Hogue; Director, Trustee or Managing General Partner
of the Funds.

Wesley W. Posvar
1202 Cathedral of Learning
University of Pittsburgh
Pittsburgh, PA

Birthdate: September 14, 1925

Director
Professor, Foreign Policy and Management Consultant; Trustee, Carnegie
Endowment for International Peace, RAND Corporation, Online Computer
Library Center, Inc., and U.S. Space Foundation; Chairman, Czecho Slovak
Management Center; Director, Trustee, or Managing General Partner of the
Funds; President Emeritus, University of Pittsburgh; formerly, Chairman,
National Advisory Council for Environmental Policy and Technology.

Marjorie P. Smuts
4905 Bayard Street
Pittsburgh, PA

Birthdate: July 21, 1935

Director
Public relations/marketing consultant; Director, Trustee, or Managing
General Partner of the Funds.

Richard B. Fisher
Federated Investors Tower
Pittsburgh, PA

Birthdate: May 17, 1923

Vice President
Executive Vice President and Trustee, Federated Investors; Director,
Federated Research Corp.; Chairman and Director, Federated Securities
Corp.; President or Vice President of some of the Funds; Director or
Trustee of some of the Funds.

Edward C. Gonzales
Federated Investors Tower
Pittsburgh, PA

Birthdate: October 22, 1930

Vice President and Treasurer
Vice President, Treasurer, and Trustee, Federated Investors; Vice
President and Treasurer, Federated Advisers, Federated Management,
Federated Research, Federated Research Corp., and Passport Research,
Ltd.; Executive Vice President, Treasurer, and Director, Federated
Securities Corp.; Trustee, Federated Services Company and Federated
Shareholder Services; Chairman, Treasurer, and Trustee, Federated
Administrative Services; Trustee or Director of some of the Funds; Vice
President and Treasurer of the Funds.

John W. McGonigle
Federated Investors Tower
Pittsburgh, PA

Birthdate: October 26, 1938

Vice President and Secretary
Vice President, Secretary, General Counsel, and Trustee, Federated
Investors; Vice President, Secretary, and Trustee, Federated Advisers,
Federated Management, and Federated Research; Vice President and
Secretary, Federated Research Corp. and Passport Research, Ltd.;
Trustee, Federated Services Company; Executive Vice President,
Secretary, and Trustee, Federated Administrative Services; Secretary and
Trustee, Federated Shareholder Services; Executive Vice President and
Director, Federated Securities Corp.; Vice President and Secretary of
the Funds.

* This Director is deemed to be an "interested person" as defined
in the Investment Company Act of 1940, as amended.
@ Member of the Executive Committee. The Executive Committee of
the Board of Directors handles the responsibilities of the
Board of Directors between meetings of the Board.
Officers and Directors own less than 1% of the Fund's outstanding
Shares.
"The Funds" and "Funds mean the following investment companies: American
Leaders Fund, Inc.; Annuity Management Series; Arrow Funds; Automated
Cash Management Trust; Automated Government Money Trust; California
Municipal Cash Trust; Cash Trust Series II; Cash Trust Series, Inc.; DG
Investor Series; Edward D. Jones & Co. Daily Passport Cash Trust;
Federated ARMs Fund; Federated Exchange Fund, Ltd.; Federated GNMA
Trust; Federated Government Trust; Federated Growth Trust; Federated
High Yield Trust; Federated Income Securities Trust; Federated Income
Trust; Federated Index Trust; Federated Institutional Trust; Federated
Intermediate Government Trust; Federated Master Trust; Federated
Municipal Trust; Federated Short-Intermediate Government Trust;
Federated Short-Term U.S. Government Trust; Federated Stock Trust;
Federated Tax-Free Trust; Federated U.S. Government Bond Fund; First
Priority Funds; Fixed Income Securities, Inc.; Fortress Adjustable Rate
U.S. Government Fund, Inc.; Fortress Municipal Income Fund, Inc.;
Fortress Utility Fund, Inc.; Fund for U.S. Government Securities, Inc.;
Government Income Securities, Inc.; High Yield Cash Trust; Insight
Institutional Series, Inc.; Insurance Management Series; Intermediate
Municipal Trust; International Series, Inc.; Investment Series Funds,
Inc.; Investment Series Trust; Liberty Equity Income Fund, Inc.; Liberty
High Income Bond Fund, Inc.; Liberty Municipal Securities Fund, Inc.;
Liberty U.S. Government Money Market Trust; Liberty Term Trust, Inc. -
1999; Liberty Utility Fund, Inc.; Liquid Cash Trust; Managed Series
Trust; Money Market Management, Inc.; Money Market Obligations Trust;
Money Market Trust; Municipal Securities Income Trust; Newpoint Funds;
New York Municipal Cash Trust; 111 Corcoran Funds; Peachtree Funds; The
Planters Funds; RIMCO Monument Funds; The Shawmut Funds; Short-Term
Municipal Trust; Star Funds; The Starburst Funds; The Starburst Funds
II; Stock and Bond Fund, Inc.; Sunburst Funds; Targeted Duration Trust;
Tax-Free Instruments Trust; Trademark Funds; Trust for Financial
Institutions; Trust For Government Cash Reserves; Trust for Short-Term
U.S. Government Securities; Trust for U.S. Treasury Obligations; The
Virtus Funds; World Investment Series, Inc.
Fund Ownership
As of May 5, 1995, there were no shareholders of record who owned 5% or
more of the outstanding Class A Shares of the Fund.
As of May 5, 1995, there were no shareholders of record who owned 5% or
more of the outstanding Class B Shares of the Fund.
Merrill Lynch Pierce Fenner & Smith (as record owner holding Class C
Shares for its clients), Jacksonville, Florida, owned approximately
4,304,264 Shares (41.14%) of the Fund as of May 5, 1995.

Directors Compensation

AGGREGATE
NAME , COMPENSATION
POSITION WITH FROM TOTAL COMPENSATION PAID
FUND FUND*# FROM FUND COMPLEX +

John F. Donahue $0 $0 for the Fund and
68 other investment companies in the Fund
Complex
Thomas G. Bigley $1,294 $20,688 for the Fund and
49 other investment companies in the Fund
Complex
John T. Conroy $2,977 $117,202 for the Fund and
64 other investment companies in the Fund
Complex
William J. Copeland $2,977 $117,202 for the Fund and
64 other investment companies in the Fund
Complex
James E. Dowd $2,977 $117,202 for the Fund and
64 other investment companies in the Fund
Complex
Lawrence D. Ellis, M.D. $2,698 $106,460 for the Fund and
64 other investment companies in the Fund
Complex
Edward L. Flaherty, Jr. $2,977 $117,202 for the Fund and
64 other investment companies in the Fund
Complex
Peter E. Madden $2,302 $90,563 for the Fund and
64 other investment companies in the Fund
Complex
Gregor F. Meyer $2,698 $106,460 for the Fund and
64 other investment companies in the Fund
Complex
John E. Murray, Jr. $0 $0 for the Fund and
64 other investment companies in the Fund
Complex
Wesley W. Posvar $2,698 $106,460 for the Fund and
64 other investment companies in the Fund
Complex
Marjorie P. Smuts $2,698 $106,460 for the Fund and
64 other investment companies in the Fund
Complex

*Information is furnished for the fiscal year ended March 31, 1995.
#The aggregate compensation is provided for the Fund which is comprised
of 1 portfolio.
+The information is provided for the last calendar year.

Investment Advisory Services
Adviser to the Fund
The Fund's investment adviser is Federated Advisers (the "Adviser"). It
is a subsidiary of Federated Investors. All of the Class A (voting)
Shares of Federated Investors are owned by a trust, the trustees of
which are John F. Donahue, his wife, and his son, J. Christopher
Donahue, who is President and Trustee of Federated Investors.
The Adviser shall not be liable to the Fund or any shareholder for any
losses that may be sustained in the purchase, holding, or sale of any
security or for anything done or omitted by it, except acts or omissions
involving willful misfeasance, bad faith, gross negligence, or reckless
disregard of the duties imposed upon it by its contract with the Fund.
Advisory Fees
For its advisory services, Federated Advisers receives an annual
investment advisory fee as described in the prospectus. During the
fiscal years ended March 31, 1995, 1994, and 1993, the Fund's Adviser
earned $9,463,243, of which $338,354 was voluntarily waived,
$11,548,068, and $10,204,383, respectively.
State Expense Limitations
The Adviser has undertaken to comply with the expense limitations
established by certain states for investment companies whose
shares are registered for sale in those states. If the Fund's
normal operating expenses (including the investment advisory fee,
but not including brokerage commissions, interest, taxes, and
extraordinary expenses) exceed 2-1/2% per year of the first $30
million of average net assets, 2% per year of the next $70 million
of average net assets, and 1-1/2% per year of the remaining
average net assets, the Adviser will reimburse the Fund for its
expenses over the limitation.
If the Fund's monthly projected operating expenses exceed this
limitation, the investment advisory fee paid will be reduced by
the amount of the excess, subject to an annual adjustment. If the
expense limitation is exceeded, the amount to be reimbursed by the
Adviser will be limited, in any single fiscal year, by the amount
of the investment advisory fee.
This arrangement is not part of the advisory contract and may be
amended or rescinded in the future.
Administrative Services
Federated Administrative Services, a subsidiary of Federated Investors,
provides administrative personnel and services to the Fund for a fee as
described in the prospectus. Prior to March 1, 1994, Federated
Administrative Services, Inc., also a subsidiary of Federated Investors,
served as the Fund's administrator. For the fiscal years ended March 31,
1995 and 1994, Federated Administrative Services earned $1,193,581 and
$1,358,170, respectively. For the fiscal year ended March 31, 1993,
Federated Administrative Services, Inc., earned $953,655.
Dr. Henry J. Gailliot, an officer of Federated Advisers, the adviser to
the Fund, holds approximately 20% of the outstanding common stock and
serves as a director of Commercial Date Services, Inc. a company which
provides computer processing services to Federated Administrative
Services, Inc., and Federated Administrative Services.
Transfer Agent and Dividend Disbursing Agent

Federated Services Company serves as transfer agent and dividend
disbursing agent for the Fund. The fee paid to the transfer agent is
based upon the size, type, and number of accounts and transactions made
by shareholders.
Federated Services Company also maintains the Fund's accounting records.
The fee paid for this service is based upon the level of the Fund's
average net assets for the period plus out-of-pocket expenses.

Brokerage Transactions
When selecting brokers and dealers to handle the purchase and sale of
portfolio instruments, the Adviser looks for prompt execution of the
order at a favorable price. In working with dealers, the Adviser will
generally utilize those who are recognized dealers in specific portfolio
instruments, except when a better price and execution of the order can
be obtained elsewhere. In selecting among firms believed to meet these
criteria, the Adviser may give consideration to those firms which have
sold or are selling Shares of the Fund and other funds distributed by
Federated Securities Corp. The Adviser makes decisions on portfolio
transactions and selects brokers and dealers subject to review by the
Board of Directors.
The Adviser may select brokers and dealers who offer brokerage and
research services. These services may be furnished directly to the Fund
or to the Adviser and may include:
- advice as to the advisability of investing in securities;
- security analysis and reports;
- economic studies;
- industry studies;
- receipt of quotations for portfolio evaluations; and
- similar services.
The Adviser and its affiliates exercise reasonable business judgment in
selecting brokers who offer brokerage and research services to execute
securities transactions. They determine in good faith that commissions
charged by such persons are reasonable in relation to the value of the
brokerage and research services provided.
Research services provided by brokers may be used by the adviser or by
affiliates of Federated Investors in advising Federated Funds and other
accounts. To the extent that receipt of these services may supplant
services for which the Adviser or its affiliates might otherwise have
paid, it would tend to reduce their expenses.
For the fiscal years ended March 31, 1995, 1994, and 1993, the Fund paid
no brokerage commissions on brokerage transactions.
Purchasing Shares
Except under certain circumstances described in the prospectus, shares
are sold at their net asset value (plus a sales load on Class A Shares
only) on days the New York Stock Exchange is open for business. The
procedure for purchasing shares is explained in the prospectus under
"How To Purchase Shares."
Distribution Plan (Class B Shares and Class C Shares Only) and
Shareholder Services Plan
These arrangements permit the payment of fees to financial institutions,
the distributor, and Federated Shareholder Services as appropriate, to
stimulate distribution activities and to cause services to be provided
to shareholders by a representative who has knowledge of the
shareholder's particular circumstances and goals. These activities and
services may include, but are not limited to, marketing efforts;
providing office space, equipment, telephone facilities, and various
clerical, supervisory, computer, and other personnel as necessary or
beneficial to establish and maintain shareholder accounts and records;
processing purchase and redemption transactions and automatic
investments of client account cash balances; answering routine client
inquiries; and assisting clients in changing dividend options, account
designations, and addresses.
By adopting the Distribution Plan (Class B Shares and Class C Shares
only), the Directors expect that the Class B Shares and Class C Shares
of the Fund will be able to achieve a more predictable flow of cash for
investment purposes and to meet redemptions. This will facilitate more
efficient portfolio management and assist the Fund in pursuing its
investment objectives. By identifying potential investors whose needs
are served by the Fund's objectives, and properly servicing these
accounts, it may be possible to curb sharp fluctuations in rates of
redemptions and sales.
Other benefits, which may be realized under either arrangement, may
include: (1) providing personal services to shareholders; (2) investing
shareholder assets with a minimum of delay and administrative detail;
and (3) enhancing shareholder recordkeeping systems; and (4) responding
promptly to shareholders' requests and inquiries concerning their
accounts.
For the fiscal year ended March 31, 1995, payment in the amount of
$768,291 was made pursuant to the Distribution Plan, all of which was
paid to the financial institutions. In addition, for the fiscal year
ended March 31, 1995, payment in the amount of $2,469,052, of which
$4,319 was voluntarily waived, was made pursuant to the Shareholder
Services Plan.
Conversion to Federal Funds
It is the Fund's policy to be as fully invested as possible so that
maximum interest may be earned. To this end, all payments from
shareholders must be in federal funds or be converted into federal funds
before shareholders begin to earn dividends. Federated Services Company
acts as the shareholder's agent in depositing checks and converting them
to federal funds.
Purchases by Sales Representatives, Fund Directors, and Employees
Directors, employees, and sales representatives of the Fund, Federated
Advisers, and Federated Securities Corp. or their affiliates, or any
investment dealer who has a sales agreement with Federated Securities
Corp. and their spouses and children under 21, may buy Class A shares at
net asset value without a sales load. Shares may also be sold without a
sales load to trusts or pension or profit-sharing plans for these
people.
These sales are made with the purchaser's written assurance that the
purchase is for investment purposes and that the securities will not be
resold except through redemption by the Fund.
Determining Net Asset Value
Net asset value generally changes each day. The days on which net asset
value is calculated by the Fund are described in the prospectus.
Determining Market Value of Securities
Market values of the Fund's portfolio securities are determined as
follows:
- according to the last sale price on a national securities
exchange, if available;
- in the absence of recorded sales for equity securities, according
to the mean between the last closing bid and asked prices and for
bonds and other fixed income securities, as determined by an
independent pricing service; or
- for short-term obligations according to the prices as furnished by
an independent pricing service or for short-term obligations with
remaining maturities of 60 days or less at the time of purchase at
amortized cost, or at fair value as determined in good faith by
the Directors.
Prices provided by independent pricing services may be determined
without relying exclusively on quoted prices and may consider yield,
quality, coupon rate, maturity, type of issue, trading characteristics,
and other market data.
Redeeming Shares
The Fund redeems shares at the next computed net asset value, less any
applicable contingent deferred sales charge, after the Fund receives the
redemption request. Redemption procedures are explained in the combined
prospectus under "How To Redeem Shares." Although the transfer agent
does not charge for telephone redemptions, it reserves the right to
charge a fee for the cost of wire-transferred redemptions of less than
$5,000.
Class B Shares redeemed within one to six years of purchase and Class C
Shares, redeemed within one year of purchase may be subject to a
contingent deferred sales charge. The amount of the contingent deferred
sales charge is based upon the amount of the administrative fee paid at
the time of purchase by the distributor to the financial institution for
services rendered, and the length of time the investor remains a
shareholder in the Fund. Should financial institutions elect to receive
an amount less than the administrative fee that is stated in the
prospectus for servicing a particular shareholder, the contingent
deferred sales charge and/or holding period for that particular
shareholder will be reduced accordingly.
Tax Status
The Fund's Tax Status
The Fund will pay no federal income tax because it expects to meet the
requirements of Subchapter M of the Internal Revenue Code applicable to
regulated investment companies and to receive the special tax treatment
afforded to such companies. To qualify for this treatment, the Fund
must, among other requirements:
- derive at least 90% of its gross income from dividends, interest,
and gains from the sale of securities;
- derive less than 30% of its gross income from the sale of
securities held less than three months;
- invest in securities within certain statutory limits; and
- distribute to its shareholders at least 90% of its net income
earned during the year.
At March 31, 1995, the Fund had a capital loss carryforward of
$190,448,348 for federal income tax purposes which will reduce the
Fund's taxable income arising from future net realized gain on
investments.
Shareholders' Tax Status
Shareholders are subject to federal income tax on dividends and capital
gains received as cash or additional shares. No portion of any income
dividend paid by the Fund is eligible for the dividends received
deduction available to corporations. These dividends, and any short-term
capital gains, are taxable as ordinary income.
Capital Gains
Shareholders will pay federal tax at capital gains rates on long-
term capital gains distributed to them regardless of how long they
have held Fund shares.
Total Return
The Fund's average annual total return for Class A Shares for the one-
year, five-year, and ten-year periods ended March 31, 1995, were -0.09%,
-6.00%, and 7.88%, respectively.
The Fund's cumulative total return for Class B Shares for the period
from July 25, 1994 (date of initial public offering) to March 31, 1995
was -1.54%.
The Fund's average annual total return for Class C Shares for the one-
year period ended March 31, 1995 and since inception (April 26, 1993,
date of initial public offering) to March 31, 1994 was 2.64% and 1.29%,
respectively.
The average annual total return for each class of shares of the Fund is
the average compounded rate of return for a given period that would
equate a $1,000 initial investment to the ending redeemable value of
that investment. The ending redeemable value is computed by multiplying
the number of shares owned at the end of the period by the net asset
value per share at the end of the period. The number of shares owned at
the end of the period is based on the number of shares purchased at the
beginning of the period with $1,000, less any applicable sales load
adjusted over the period by any additional shares, assuming the monthly
reinvestment of all dividends and distributions.
Any applicable contingent deferred sales charge is deducted from the
ending value of the investment based on the lesser of the original
purchase price or the net asset value of shares redeemed.
Cumulative total return reflects the Class B Shares' total performance
over a specific period of time. This total return assumes and is reduced
by the payment of the maximum contingent deferred sales charge. The
Class B Shares' total return is representative of only eight months of
investment activity since the start of performance.
Yield
The Fund's yields for Class A Shares, Class B Shares, and Class C
Shares were 6.98%, 6.49%, and 6.44%, respectively, for the thirty-day
period ended March 31, 1995.
The yield for each class of shares of the Fund is determined by dividing
the net investment income per share (as defined by the Securities and
Exchange Commission) earned by any class of shares over a thirty-day
period by the maximum offering price per share of the respective class
on the last day of the period. This value is annualized using semi-
annual compounding. This means that the amount of income generated
during the thirty-day period is assumed to be generated each month over
a 12-month period and is reinvested every six months. The yield does not
necessarily reflect income actually earned by the Fund because of
certain adjustments required by the Securities and Exchange Commission
and, therefore, may not correlate to the dividends or other
distributions paid to the shareholders.
To the extent that financial institutions and broker/dealers charge fees
in connection with services provided in conjunction with an investment
in any class of shares, the performance will be reduced for those
shareholders paying those fees.
Performance Comparisons
The performance of each of the classes of shares depends upon such
variables as:
- portfolio quality;
- average portfolio maturity;
- type of instruments in which the portfolio is invested;
- changes in interest rates and market value of portfolio
securities;
- changes in the Fund's or any class of Shares' expenses; and
- various other factors.
The Fund's performance fluctuates on a daily basis largely because net
earnings and offering price per share fluctuate daily. Both net earnings
and offering price per share are factors in the computation of yield and
total return.
Investors may use financial publications and/or indices to obtain a more
complete view of the Fund's performance. When comparing performance,
investors should consider all relevant factors such as the composition
of any index used, prevailing market conditions, portfolio compositions
of other funds, and methods used to value portfolio securities and
compute offering price. The financial publications and/or indices which
the Fund uses in advertising may include:
- Lehman Brothers Government (LT) Index is an index composed of
bonds issued by the U.S. government or its agencies which have at
least $1 million outstanding in principal and which have
maturities of ten years or longer. Index figures are total return
figures calculated monthly.
- Salomon Brothers 15 Year Mortgage Backed Securities Index includes
the average of all 15 year mortgage securities which include
Federal Home Loan Mortgage Corp., Federal National Mortgage
Association, and Government National Mortgage Association.
- Lipper Analytical Services, Inc. ranks funds in various fund
categories by making comparative calculations using total return.
Total return assumes the reinvestment of all capital gains
distributions and income dividends and takes into account any
change in net asset value over a specific period of time. From
time to time, the Fund will quote its Lipper ranking in the U.S.
mortgage funds category in advertising and sales literature.
- Lehman Brothers Government/Corporate Bond Index is comprised of
approximately 5,000 issues which include non-convertible bonds
publicly issued by the U.S. government or its agencies; corporate
bonds guaranteed by the U.S. government and quasi-federal
corporations; and publicly issued, fixed-rate, non-convertible
domestic bonds of companies in industry, public utilities, and
finance. Tracked by Lehman Brothers, the index has an average
maturity of nine years. It calculates total returns for one month,
three month, twelve month, and ten year periods, and year-to-date.
- Morningstar, Inc., an independent rating service, is the publisher
of the bi-weekly Mutual Fund Values. Mutual Fund Values rates more
than 1,000 NASDAQ-listed mutual funds of all types, according to
their risk-adjusted returns. The maximum rating is five stars, and
ratings are effective for two weeks.
Advertisements and other sales literature for any class of shares may
quote total returns which are calculated on non-standardized base
periods. These total returns also represent the historic change in the
value of an investment in any class of shares based on monthly
reinvestment of dividends over a specified period of time.
From time to time as it deems appropriate, the Fund may advertise the
performance of any class of shares using charts, graphs, and
descriptions, compared to federally insured bank products including
certificates of deposit and time deposits and to money market funds
using the Lipper Analytical Services money market instruments average.
In addition, advertising and sales literature for the Fund may use
charts and graphs to illustrate the principals of dollar-cost averaging
and may disclose the amount of dividends paid by the Fund over certain
periods of time.
Advertisements may quote performance information which does not reflect
the effect of the sales load on Class A Shares.
About Federated Investors

Federated is dedicated to meeting investor needs which is
reflected in its investment decision making structured,
straightforward, and consistent. This has resulted in a
history of competitive performance with a range of
competitive investment products that have gained the
confidence of thousands of clients and their customers.
The company's disciplined security selection process is
firmly rooted in sound methodologies backed by fundamental
and technical research. Investment decisions are made and
executed by teams of portfolio managers, analysts, and
traders dedicated to specific market sectors.
In the government sector, as of December 31, 1994,
Federated managed 9 mortgage-backed, 4 government/agency and
17 government money market mutual funds, with assets
approximating $8.5 billion, $1.6 billion and $17 billion,
respectively. Federated trades approximately $300 million
in U.S. government and mortgage-backed securities daily and
places approximately $13 billion in repurchase agreements
each day. Federated introduced the first U.S. government
fund to invest in U.S. government bonds securities in 1969.
Federated has been a major force in the short- and
intermediate-term government markets since 1982 and
currently manages nearly $10 billion in government funds
within these maturity ranges.
J. Thomas Madden, Executive Vice President, oversees
Federated's equity and high yield corporate bond management
while William D. Dawson, Executive Vice President, oversees
Federated's domestic fixed income management. Henry A.
Frantzen, Executive Vice President, oversees the management
of Federated's international portfolios.
Mutual Fund Market
Twenty-seven percent of American households are pursuing
their financial goals through mutual funds. These investors,
as well as businesses and institutions, have entrusted over
$2 trillion to the more than 5,500 funds available.*
Federated Investors, through its subsidiaries, distributes
mutual funds for a variety of investment applications.
Specific markets include:
Institutional
Federated meets the needs of more than 4,000 institutional
clients nationwide by managing and servicing separate
accounts and mutual funds for a variety of applications,
including defined benefit and defined contribution programs,
cash management, and asset/liability management.
Institutional clients include corporations, pension funds,
tax-exempt entities, foundations/endowments, insurance
companies, and investment and financial advisors. The
marketing effort to these institutional clients is headed
by John B. Fisher, President, Institutional Sales Division.
Trust Organizations
Other institutional clients include close relationships with
more than 1,500 banks and trust organizations. Virtually
all of the trust divisions of the top 100 bank holding
companies use Federated funds in their clients' portfolios.
The marketing effort to trust clients is headed by Mark R.
Gensheimer, Executive Vice President, Bank Marketing &
Sales.
Broker/dealers and bank broker/dealer subsidiaries
Federated mutual funds are available to consumers through
major brokerage firms nationwide--including 200 New York
Stock Exchange firms--supported by more wholesalers than any
other mutual fund distributor. The marketing effort to
these firms is headed by James F. Getz, President,
Broker/Dealer Division.

*source: Investment Company Institute

Financial Statements
The Financial Statements for the fiscal year ended March 31, 1995, are
incorporated herein by reference to the Annual Report of the Fund dated
March 31, 1995 (File Nos. 2-33490 and 811-1890). A copy of this report
may be obtained without charge by contacting the Fund.

360799100
360799407
360799209
8062807B (5/95)

PART C. OTHER INFORMATION

Item 24. Financial Statements and Exhibits:

(a) Financial Statements. [Incorporated by reference to the
Annual Report of Registrant dated March 3l, l995; File Nos.
2-33490 and 811-1890;
(b) Exhibits and Consents:
(1) Conformed copy of Articles of Incorporation of the
Registrant as amended+;
(2) (i) Conformed copy of By-Laws of the
Registrant as amended+;
(3) Not applicable;
(4) (i) Copy of Specimen Certificate for Class A Shares
of Capital Stock of the Registrant(12.);
(ii) Copy of Specimen Certificate for Class B Shares
of Capital Stock of the Registrant(12.);
(iii) Copy of Specimen Certificate for Class C Shares
of Capital Stock of the Registrant(12.);
(5) Conformed copy of Investment Advisory Contract of the
Registrant (8.);
(6) Conformed copy of Distributor's Contract of the
Registrant; (12.)
(i) Conformed copy of Exhibit D to Distributor's
Contract+;
(7) Not applicable;
(8) Conformed Copy of Custodian Agreement of the
Registrant+.;
(9) (i) Conformed copy of Transfer Agency and Service
Agreement+.;
(ii) Conformed Copy of Shareholder Services
Agreement +.;
(iii) Conformed Copy of Shareholder Services Sub-
contract +.
(iiii) Copy of proposed form of Shareholder Services
Agreement (11);
(10) Not applicable;
(11) Conformed Copy of Consent of Independent Public
Accountants +;
(12) Not applicable;

+ All exhibits have been filed electronically.

8. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 49 filed on July 28, 1989.(File No. 2-33490 and File No.
811-1890)
10. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 55 filed on July 23, 1992.(File No. 2-33490 and File No.
811-1890)
11. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 56 filed on February 17, 1993.(File No. 2-33490 and File
No. 811-1890)
12. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 60 filed on May 25, 1994 (File No. 2-33490 and File No.
811-1890)

(13) Conformed copy of Opinion as to Legality of
Shares Being Registered +;
(14) Copy of IRA Plan of the Registrant +.;
(15) (i) Conformed Copy of Rule 12b-1 Plan of the
Registrant +;
(ii) Conformed copy of Exhibit C to Rule 12b-1Plan
+;
(iii) Paper Copy of Dealer Agreement of the Registrant
(4);
(16) Copy of Schedule for Computation of Yield
Calculation +.;
(17) Financial Data Schedules +;
(18) Conformed Copy of Power of Attorney+;
(19) Not Appplicable;

Item 25. Persons Controlled by or Under Common Control with Registrant:

None.

Item 26. Number of Holders of Securities:

Number of Record Holders
Title of Class as of May 8, 1995 __

Shares of Capital Stock
($1.00 par value)
Class A Shares 97,512
Class B Shares 1,887
Class C Shares 3,061

Item 27. Indemnification: (10.)

Item 28. Business and Other Connections of Investment Adviser:

For a description of the other business of the investment adviser,
see the section entitled "Fund Information - Management of the
Fund" in Part A. The affiliations with the Registrant of four of
the Trustees and one of the Officers of the investment adviser are
included in Part A of this Registration Statement under
"Management of the Fund - Officers and Directors." The remaining
Trustee of the investment adviser, his positions with the
investment adviser, and, in parentheses, his principal occupation
is: Mark D. Olson, Partner, Wilson, Halbrook & Bayard, 107 W.
Market Street Georgetown, Delaware 19947.

+ All exhibits have been filed electronically.

4. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 40 filed on March 29, 1985.(File No. 2-33490 and File No.
811-1890)
11. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 56 filed on February 17, 1993.(File No. 2-33490 and File
No. 811-1890)
12. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 60 filed on May 25, 1994 (File No. 2-33490 and File No.
811-1890)

The remaining Officers of the investment adviser are: Mark L.
Mallon, William D. Dawson, III, and J. Thomas Madden, Executive
Vice Presidents; Henry J. Gailliot, Senior Vice President-
Economist; Peter R. Anderson, and J. Alan Minteer, Senior Vice
Presidents; Randall A. Bauer, David A. Briggs, Jonathan C. Conley,
Deborah A. Cunningham, Michael P. Donnelly, Mark Durbiano,
Kathleen Foody-Malus, Thomas M. Franks, Edward C. Gonzales, Jeff
A. Kozemchek, Marian R. Marinack, John W.McGonigle, Susan M.
Nason, Mary Jo Ochson, Robert J. Ostrowski, Frederick L. Plautz,
Jr., Charles A. Ritter, James D. Roberge, Sandra L. Weber,and
Christopher H. Wiles, Vice Presidents, Edward C. Gonzales,
Treasurer, and John W. McGonigle, Secretary. The business address
of each of the Officers of the investment adviser is Federated
Investors Tower, Pittsburgh, PA 15222-3779. These individuals are
also officers of a majority of the investment advisers to the
Funds listed in Part B of this Registration Statement.

Item 29. Principal Underwriters:

(a)Federated Securities Corp., the Distributor for shares of the
Registrant, also acts as principal underwriter for the
following open-end investment companies: Alexander Hamilton
Funds; American Leaders Fund, Inc.; Annuity Management
Series; Arrow Funds; Automated Cash Management Trust;
Automated Government Money Trust; BayFunds; The Biltmore
Funds; The Biltmore Municipal Funds; California Municipal
Cash Trust; Cash Trust Series, Inc.; Cash Trust Series II; DG
Investor Series; Edward D. Jones & Co. Daily Passport Cash
Trust; Federated ARMs Fund; Federated Exchange Fund, Ltd.;
Federated GNMA Trust; Federated Government Trust; Federated
Growth Trust; Federated High Yield Trust; Federated Income
Securities Trust; Federated Income Trust; Federated Index
Trust; Federated Institutional Trust; Federated Intermediate
Government Trust; Federated Master Trust; Federated Municipal
Trust; Federated Short-Intermediate Government Trust;
Federated Short-Term U.S. Government Trust; Federated Stock
Trust; Federated Tax-Free Trust; Federated U.S. Government
Bond Fund; First Priority Funds; First Union Funds; Fixed
Income Securities, Inc.; Fortress Adjustable Rate U.S.
Government Fund, Inc.; Fortress Municipal Income Fund, Inc.;
Fortress Utility Fund, Inc.; Fountain Square Funds; Fund for
U.S. Government Securities, Inc.; Government Income
Securities, Inc.; High Yield Cash Trust; Independence One
Mutual Funds; Insight Institutional Series, Inc.; Insurance
Management Series; Intermediate Municipal Trust;
International Series Inc.; Investment Series Funds, Inc.;
Investment Series Trust; Liberty Equity Income Fund, Inc.;
Liberty High Income Bond Fund, Inc.; Liberty Municipal
Securities Fund, Inc.; Liberty U.S. Government Money Market
Trust; Liberty Utility Fund, Inc.; Liquid Cash Trust; Managed
Series Trust; Marshall Funds, Inc.; Money Market Management,
Inc.; Money Market Obligations Trust; Money Market Trust; The
Monitor Funds; Municipal Securities Income Trust; Newpoint
Funds; New York Municipal Cash Trust; 111 Corcoran Funds;
Peachtree Funds; The Planters Funds; RIMCO Monument Funds;
The Shawmut Funds; Short-Term Municipal Trust; SouthTrust
Vulcan Funds; Star Funds; The Starburst Funds; The Starburst
Funds II; Stock and Bond Fund, Inc.; Sunburst Funds; Targeted
Duration Trust; Tax-Free Instruments Trust; Tower Mutual
Funds; Trademark Funds; Trust for Financial Institutions;
Trust for Government Cash Reserves; Trust for Short-Term U.S.
Government Securities; Trust for U.S. Treasury Obligations;
The Virtus Funds; Vision Fiduciary Funds, Inc.; Vision Group
of Funds, Inc.; and World Investment Series, Inc.

Federated Securities Corp. also acts as principal underwriter
for the following closed-end investment company: Liberty
Term Trust, Inc.- 1999.

(b)

(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Underwriter With Registrant

Richard B. Fisher Director, Chairman, Chief Vice President
Federated Investors Tower Executive Officer, Chief
Pittsburgh, PA 15222-3779 Operating Officer, and
Asst. Treasurer, Federated
Securities Corp.

Edward C. Gonzales Director, Executive Vice Vice President and
Federated Investors Tower President, and Treasurer, Treasurer
Pittsburgh, PA 15222-3779 Federated Securities
Corp.

John W. McGonigle Director, Executive Vice Vice President and
Federated Investors Tower President, and Assistant Secretary
Pittsburgh, PA 15222-3779 Secretary, Federated
Securities Corp.

John B. Fisher President-Institutional Sales, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

James F. Getz President-Broker/Dealer, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Mark R. Gensheimer Executive Vice President of --
Federated Investors Tower Bank/Trust
Pittsburgh, PA 15222-3779 Federated Securities Corp.

Mark W. Bloss Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Theodore Fadool, Jr. Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Bryant R. Fisher Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Christopher T. Fives Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

James S. Hamilton Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

James M. Heaton Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

H. Joseph Kennedy Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Keith Nixon Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Solon A. Person, IV Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Timothy C. Pillion Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Thomas E. Territ Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

John B. Bohnet Vice President,
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Richard W. Boyd Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Jane E. Broeren-Lambesis Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Mary J. Combs Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

R. Edmond Connell, Jr. Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Kevin J. Crenny Vice President,
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Daniel T. Culbertson Vice President,
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Laura M. Deger Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Jill Ehrenfeld Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Joseph L. Epstein Vice President,
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Mark D. Fisher Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Michael D. Fitzgerald Vice President,
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Joseph D. Gibbons Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

David C. Glabicki Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Craig S. Gonzales Vice President,
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Richard C. Gonzales Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Scott A. Hutton Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

William J. Kerns Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

William E. Kugler Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Dennis M. Laffey Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Stephen A. LaVersa Vice President,
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Francis J. Matten, Jr. Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Mark J. Miehl Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Richard C. Mihm Vice President,
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

J. Michael Miller Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

R. Jeffrey Niss Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Michael P. O'Brien Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Robert D. Oehlschlager Vice President,
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Robert F. Phillips Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Eugene B. Reed Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Paul V. Riordan Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Charles A. Robison Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

John C. Shelar, Jr. Vice President,
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

David W. Spears Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Jeffrey A. Stewart Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Jamie M. Teschner Vice President,
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

William C. Tustin Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Paul A. Uhlman Vice President,
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Richard B. Watts Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Michael P. Wolff Vice President,
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Philip C. Hetzel Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Charlene H. Jennings Assistant Vice President,
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Ernest L. Linane Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

S. Elliott Cohan Secretary, Assistant
Federated Investors Tower Federated Securities Corp. Secretary
Pittsburgh, PA 15222-3779

Item 30. Location of Accounts and Records:

All accounts and records required to be maintained by Section 31(a) of the
Investment Company Act of 1940 and Rules 31a-1 through 31a-3 promulgated
thereunder are maintained at one of the following locations:

Registrant Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779

Federated Services Company Federated Investors Tower
("Transfer Agent, Dividend Pittsburgh, Pennsylvania 15222-3779
Disbursing Agent and Portfolio
Recordkeeper")

Federated Administrative Services Federated Investors Tower
("Administrator") Pittsburgh, Pennsylvania 15222-3779

Federated Advisers Federated Investors Tower
("Adviser") Pittsburgh, Pennsylvania 15222-3779

State Street Bank and Trust Company P.O. Box 8600
("Custodian") Boston, Massachusetts 02266-8604

Item 31. Management Services: Not applicable.

Item 32. Undertakings:

Registrant hereby undertakes to furnish each person to whom a
prospectus is delivered with a copy of the Registrant's latest
annual report to shareholders, upon request and without charge.

Registrant hereby undertakes to comply with the provisions of
Section 16(c) of the 1940 Act with respect to the removal of
Directors and the calling of special shareholder meetings by
shareholders.
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant, FUND FOR U.S. GOVERNMENT
SECURITIES, INC., has duly caused this Amendment to its Registration
Statement to be signed on its behalf by the undersigned, thereto duly
authorized, in the City of Pittsburgh and Commonwealth of Pennsylvania,
on the 24st day of May, 1995.

FUND FOR U.S. GOVERNMENT SECURITIES, INC.

BY: /s/ Charles H. Field
Charles H. Filed, Assistant Secretary
Attorney in Fact for John F. Donahue
May 24, 1995

Pursuant to the requirements of the Securities Act of 1933, this
Amendment to its Registration Statement has been signed below by the
following person in the capacity and on the date indicated:

NAME TITLE DATE

By: /s/Charles H. Field
Charles H. Field Attorney In Fact May 24, 1995
ASSISTANT SECRETARY For the Persons
Listed Below

NAME TITLE

John F. Donahue* Chairman and Director
(Chief Executive Officer)

Glen R. Johnson* President

Edward C. Gonzales* Vice President and Treasurer
(Principal Financial and
Accounting Officer)

Thomas G. Bigley* Director

John T. Conroy, Jr.* Director

William J. Copeland* Director

James E. Dowd* Director

Lawrence D. Ellis, M.D.* Director

Edward L. Flaherty, Jr.* Director

Peter E. Madden* Director

Gregor F. Meyer* Director

John E. Murray* Director

Wesley W. Posvar* Director

Marjorie P. Smuts* Director

* By Power of Attorney

Exhibit (11) under N-1A
Exhibit 23 under 601/Reg SK

DELOITTE & TOUCHE

CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

We consent to the use in Post-Effective Amendment No. 63 of the
Registration Statement No. 2-33490 of our report dated MAY 15, 1995,
APPEARING IN THE ANNUAL REPORT TO SHAREHOLDERS FOR THE FUND FOR U.S.
GOVERNMENT SECURITIES, INC. for the year ended March 31, 1995, and to
the reference to us under the heading "Financial Highlights" in the
Combined Prospectus which is a part of such Registration Statement.

By: /s/ DELOITTE & TOUCHE LLP
Deloitte & Touche LLP
Certified Public Accountants

Pittsburgh, Pennsylvania
May 22, 1995

Exbibit 18 under Rule N-1A
Exhibit 24 under Item 601/Reg.S/K
POWER OF ATTORNEY

Each person whose signature appears below hereby constitutes and
appoints the Secretary and Assistant Secretary of Fund for U.S.
Government Securities, Inc. and the Assistant General Counsel of
Federated Investors, and each of them, their true and lawful attorneys-
in-fact and agents, with full power of substitution and resubstitution
for them and in their names, place and stead, in any and all capacities,
to sign any and all documents to be filed with the Securities and
Exchange Commission pursuant to the Securities Act of 1933, the
Securities Exchange Act of 1934 and the Investment Company Act of 1940,
by means of the EDGAR; and to file the same, with all exhibits thereto
and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorney-in-fact and agents, and
each of them, full power and authority to sign and perform each and
every act and thing requisite and necessary to be done in connection
therewith, as fully to all intents and purposes as each of them might or
could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agents, or any of them, or their or his substitute
or substitutes, may lawfully do or cause to be done by virtue thereof.

SIGNATURES TITLE DATE

/s/ John F. Donahue Chairman and Director April 28, 1995
John F. Donahue (Chief Executive Officer)

/s/ J. Christopher Donahue President and Director April 28, 1995
J. Christopher Donahue

/s/ Edward C. Gonzales Vice President and Treasurer April 28, 1995
Edward C. Gonzales (Principal Financial and
Accounting Officer)

/s/ Thomas G. Bigley Director April 28, 1995
April 28, 1995
Thomas G. Bigley

/s/ John T. Conroy Director April 28, 1995
John T. Conroy, Jr.

/s/ William J. Conroy Director April 28, 1995
William J. Copeland

SIGNATURES TITLE DATE

/s/ James E. Dowd Director April 28, 1995
James E. Dowd

/s/ Lawrence D. Ellis, M.D. Director April 28, 1995
Lawrence D. Ellis, M.D.

/s/ Edward L. Flaherty, Jr. Director April 28, 1995
Edward L. Flaherty, Jr.

/s/ Peter E. Madden Director April 28, 1995
Peter E. Madden

/s/ Gregor F. Meyer Director April 28, 1995
Gregor F. Meyer

/s/ John E. Murray, Jr. Director April 28, 1995
John E. Murray, Jr.

/s/ Wesley W. Posvar Director April 28, 1995
Wesley W. Posvar

/s/ Marjorie P. Smuts Director April 28, 1995
Marjorie P. Smuts

Sworn to and subscribed before me this 28th day of April, 1995

/s/ Marie M. Hamm
Notary Public
Notarial Seal
Marie M. Hamm, Notary Public
Plum Boro, Allegheny County
My Commission Expires Sept, 16, 1996
Member, Pennsylvania Associations of Notaries

Exhibit 1(i) under Form N-1A
Exhibit 3(a) under Item 601/Reg.S-K

ARTICLE OF INCORPORATION

MUTUAL FUND FOR INVESTING IN U.S. GOVERNMENT SECURITIES YIELDING AT
LEAST 6% TO MATURITY AND U.S. TREASURY BILLS, INC.

FIRST: We, the undersigned, Miriam Casley, Fred C. Houston,

Jr., and Thomas J. Donnelly, each of whose post office address is 1128

Union Trust Building, Pittsburgh, Pennsylvania 15219, each being at

least twenty-one years of age, do under and by virtue of the General

Laws of the State of Maryland authorizing the formation of corporations,

associate ourselves as incorporators with the intention of forming a

corporation.

SECOND: The name of the Corporation is:

MUTUAL FUND FOR INVESTING IN U.S. GOVERNMENT
SECURITIES YIELDING AT LEAST 6% TO MATURITY AND U.S.
TREASURY BILLS, INC.
THIRD: The purposes for which the Corporation is formed are:

1. To purchase or otherwise acquire, hold for investment or
otherwise, sell, exchange, or otherwise dispose of securities
which are obligations of the U.S. Government or its
instrumentalities whose net yield at the time of the investment is
at least 6% to maturity or U.S. Treasury Bills and generally to
deal in any such securities; and to exercise as owner or holder of
any securities, all rights, powers and privileges in respect
thereof.

2. To sell, exchange, issue, dispose of, purchase or
otherwise acquire, hold, resell, transfer, re-issue or cancel (all
without the vote or consent of the Stockholders of the
Corporation) shares of its capital stock in any manner and to the
extent now or hereafter permitted by the laws of the State of
Maryland and the Charter of the Corporation.

3. To have one or more offices and to carry on all or any
of its operations and business in any of the States, Districts,
Territories, and possessions of the United States and in any and
all foreign countries, subject, in each case, to the laws thereof.

4. To carry out all or any of the objects and purposes set
forth in this Article THIRD as principal or agent, or otherwise,
either or through or in conjunction with any corporation, joint
stock company, syndicate, association, firm, trust or person,
public or private, and in carrying on its business and for the
purpose of attaining or furthering any of its objects and
purposes, to exercise any powers suitable, convenient or proper
for the accompaniment of any of the objects and purposes herein
enumerated or incidental to the powers herein specified, or which
at any time may appear conductive to or expedient for the
accomplishment of any such objects and purposes.

5. Anything in this Article THIRD or elsewhere in the
Charter of the Corporation to the contrary notwithstanding the
Corporation may not and shall not:

(a) Invest in any securities other than securities
which are obligations of the U.S. Government or its
instrumentalities whose net yield is at least 6% to maturity
or in U.S. Treasury Bills.

(b) Borrow money except as a temporary measure for
extraordinary or emergency purposes and then only in amounts
not in excess of 10% of its total assets taken at cost.

(c) Purchase securities on margin, but it may obtain
such short-term credits as may be necessary for clearance of
purchase and sales of securities.

(d) Effect short sales of securities.

(e) Lend any of the assets of the Corporation to any
person for any purpose whatsoever provided, however, that
the purchase or holding bonds, debentures, notes,
certificates of indebtedness or other securities of the U.S.
Government or its instrumentalities acquired at original
issue, or otherwise, shall not be prohibited by this sub-
paragraph.

(f) Mortgage, pledge, or hypothecate securities.

The foregoing objects and purposes shall, except as otherwise

expressly provided, be in no way limited or restricted by reference to

or inference from the terms of any other clause or provision of the

Charter, and each shall be regarded as independent and construed as

powers as well as objects and purposes and the enumeration of specific

purposes, objects and powers shall not be construed to limit or restrict

in any manner the meaning of general terms or general powers of the

Corporation now or hereafter conferred by the laws of the State of

Maryland, nor shall the expression of one thing be deemed to exclude

another though it be of like nature, not expressed.

FOURTH: The post office address of the principal office and

the office of the resident agent of the Corporation in the State of

Maryland is First National Bank Building, Light and Redwood Streets,

Baltimore, Maryland 21202. The resident agent of the Corporation in the

State of Maryland is THE CORPORATION TRUST INCORPORATED, First National

Bank Building, Light and Redwood Streets, Baltimore, Maryland 21202,

which is a corporation organized and existing under the laws of the

State of Maryland.

FIFTH: The total number of shares of stock which the

Corporation shall have authority to issue is 5,000,000 shares, all of

one class, of the par value of $1.00 per share, and of the aggregate par

value of $5,000,000. The first issuance and sale of shares of the

capital stock of the Corporation shall be at such price, not less than

the par value thereof as shall be fixed by the Board of Directors.

Thereafter, upon the sale of each share of its capital stock, the

Corporation shall receive in cash or in corporate securities valued as

hereinafter provided, not less than the current net asset value thereof,

determined as provided in Article SEVENTH, and not less than the par

value thereof.

SIXTH: Each Stockholder of the Corporation shall be entitled

to one vote or fraction thereof for each shares of capital stock or

fraction thereof standing in his name on the books of the Corporation.

SEVENTH: 1. (a) Each Stockholder of the Corporation shall be

entitled to require the Corporation to redeem all or any part of the

shares of such Stockholder at the net asset value thereof (as

hereinafter defined in Section 2 of this Article SEVENTH) as determined

by or on behalf of the Board of Directors. Certificates representing

shares to be so redeemed shall be deposited at the office of the

Custodian, duly endorsed or accompanied by proper instruments of

transfer, together with a request that the Corporation redeem the shares

represented thereby. If the date of deposit is a day other than

Saturday upon which a determination of net asset value as of the close

of business is required by Section 2 of this Article SEVENTH to be made,

or is made, and if such shares are deposited prior to the close of

business of the New York Stock Exchange on that day, the redemption

price shall be the net asset value as of the close of business on such

day. If the day of deposit is not such a day, or such shares are

deposited after the close of business on the New York Stock Exchange,

then the redemption price shall be the net asset value as of the close

of business on the first day upon which a determination of the net asset

value is so made or required to be made next succeeding the date on

which such shares are so deposited. If the determination of the net

asset value is so made or required to be made next succeeding the date

on which such shares are so deposited. If the determination of the

redemption price is postponed beyond the date on which it would normally

occur by reason of a declaration by the Board of Directors suspending

determination of the net asset value pursuant to Section 3 of this

Article SEVENTH the right of the Stockholder to have his shares redeemed

by the Corporation shall be similarly suspended and he may withdraw his

certificate or certificates from deposit if he so elects; or is he does

not so elect the redemption price shall be the net asset value of the

shares deposited determined as of the close of business upon the first

day after the suspension upon which such a determination is made.

(b) Notwithstanding the foregoing, the Corporation

may, however, redeem shares of the Corporation by agreement with the

owner thereof (i) at a price not exceeding the net asset value per

share at the time the redemption or contract of redemption is made, or

(ii) at a price not exceeding the net asset value per share to become

effective at some later time.

2. The term, "net asset value" of the Corporation, shall mean the

amount by which the assets of the Corporation, at fair market values,

exceed its liabilities, all as determined by or under the direction of

the Board of Directors. Such value per share shall be determined as of

the close of business on the New York Stock Exchange on each day on

which said Exchange is open and the value so determined shall become

effective at such time as the Board of Directors may fix. Provided,

however, the Board of Directors may suspend said determination for not

more than six (6) business day on which no requests for redemption are

received by the Corporation. Such determination shall be made (a) by

valuing securities of the United States Government and its

instrumentalities in the portfolio of the Corporation at the over-the-

counter bid price if market quotations are available. If not available,

they will be appraised at fair value in the best judgment of the Board

of Directors, (b) by deducting from the total appraised value of the

assets any actual and accrued liabilities determined in accordance with

good accounting practice and (c) by dividing the net asset value of the

Corporation thus obtained by the number of shares of capital stock of

the Corporation then issued and outstanding. The Board of Directors may

delegate any of the powers and duties under this Section 2 with respect

to appraisal of assets and liabilities to an Officer or Officers of the

Corporation or to the Custodian of its securities or to such other

person or persons as may be deemed qualified in the judgment of the

Board of Directors. The Board of Directors may also determine or cause

to be determined the net asset value as of any particular time in

addition to the closing time of each day when the New York Stock

Exchange is open and fix the hour of that day when the net asset value

so determined shall become effective. Such additional or interim

determination may be made either by appraisal or by calculation or

estimate. Any such calculation or estimate shall be based on changes in

the market value of representative or selected securities or on changes

in recognized market averages since the last closing appraisal, and made

in a manner which in the opinion of the Board of Directors will fairly

reflect the changes in the net asset value. At any time when the New

York Stock Exchange is closed (other than customary week-end and holiday

closings), the Board of Directors may cause the net asset value to be

determined by appraising all securities at current bid prices in the

over-the-counter markets and all other assets at fair value in the best

judgment of the Board of Directors, and otherwise proceeding as above

stated, and the Board of Directors may fix the time when the net asset

value so determined shall become effective.

3. The Board of Directors may declare a suspension of the

determination of net asset value for the whole or any part of any period

(a) during which the New York Stock Exchange is closed other than

customary week-end and holiday closings, (b) during which trading on

the New York Stock Exchange is restricted, (c) during which an

emergency exists as a result of which disposal by the Corporation of

securities owned by it is not reasonable practicable, or it is not

reasonable practicable for the Corporation fairly to determine the value

of its net assets, or (d) during such other periods as the Securities

and Exchange Commission may be order permit for the protection of

security holders of the Corporation; provided, that applicable rules and

regulations of the Securities and Exchange Commission shall govern as to

whether the conditions prescribed in (b), (c) or (d) exist. Such

suspension shall take effect at such time as the Board of Directors

shall specify but not later than the close of business on the business

day next following the declaration , and thereafter there shall be no

determination of net asset value until the Board of Directors shall

declare the suspension at an end, except that the suspension shall

terminate in any event on the first day on which the New York Stock

Exchange shall have reopened or the period specific in (b) or (c) shall

have expired (as to which in the absence of an official ruling by the

Securities and Exchange Commission the determination of the Board of

Directors shall be conclusive).

EIGHTH: 1. The number of Directors of the Corporation shall

be three, or such other number as may be from time to time fixed in the

manner provided by the By-Laws of the Corporation but shall never be

less than three (3). The By-Laws of the Corporation shall also specify

the number of Directors which shall constitute a quorum; provided,

however, that in no case shall a quorum be less than one-third of the

total number of Directors, nor less than three (3) Directors. Unless

otherwise provided by the By-Laws of the Corporation, Directors need not

be Stockholders thereof.

2. Unless otherwise provided by the By-Laws of the

Corporation and except as otherwise provided by law, any vacancy

occurring in the Board of Directors for any cause other than by reason

of an increase in the number of the Board of Directors and any vacancy

occurring by reason of an increase in the number of the Board of

Directors may be filled by a majority of the entire Board of Directors.

3. The names of the Directors who shall act until

the first Annual Meeting or until their successors are duly chosen and

qualify are:

CLIFFORD E. BROWN

JOHN F. DONAHUE

THOMAS J. DONNELLY

NINTH: The following provisions are hereby adopted for the

purpose of defining, limiting and regulating the powers of the

Corporation and of the Directors and Stockholders:

1. No Stockholder of the Corporation shall have any pre-emptive
or preferential right of subscription to any shares of any class of the
stock of the Corporation whether now or hereafter authorized other than
such, if any, and at such price as the Board of Directors in its
discretion, from time to time, may determine and the Board of Directors
may issue shares of the capital stock of the Corporation without
offering the same either in whole or in part to the Stockholders.

2. Capital stock of the Corporation may be purchased, held and
disposed of by the Officers and Directors of the Corporation, by
partnerships of which any such Officer or Director may be a member and
by corporations of which any Officer or Directors of the Corporation may
be an officer or director. Except as above set forth the Officers and
Directors of the Corporation and partnerships or corporations with which
they are connected or identified may not deal with the Corporation as
principals in the purchase or sale of any securities or other property
unless authorized to do so by the Securities and Exchange Commission.

3. The Corporation may enter into exclusive or non-exclusive
underwriting contracts or contracts for the sale of its shares and may
also enter into contracts for investment advisory, management and
administrative services. The terms and conditions, methods of
authorization, renewal, amendment and termination of the aforesaid
contracts shall be as determined at the discretion of the Board of
Directors; subject, however, to the provisions of the Charter of the
Corporation, the By-Laws of the Corporation, applicable state law, and
the Investment Company Act of 1940, and the rules and regulations of the
Securities and Exchange Commission.

4. Except as otherwise provided by law or by the Charter of the
Corporation, no contract or other transaction between the Corporation
and any person, partnership or corporation and not act of the
Corporation shall in any way be affected or invalidated by the fact that
any Officer or Director of the Corporation is pecuniarily or otherwise
interested therein or is such person or a member, officer or director of
such partnership or other corporation, provided, that the fact of such
interest shall be know to the Board of Directors of the Corporation.
Specifically, but without limitation of the foregoing, the Corporation
may:

(a) Enter into a management contract or contract for
research and advisory services with Federated Research
Corp., or a subsidiary company of Federated Investors, Inc.,
or an underwriting contract or a contract for distribution
of its capital stock with Federated Investors, Inc., or
enter into such contracts or other contracts or otherwise do
business with any of such corporations, or any subsidiaries
thereof, or their respective successors, notwithstanding the
fact that one or more of the Directors of the Corporation
and some or all of its Officers are, have been, or may
become Directors, Officers, Employees or Stockholders of
Federated Research Corp., or Federated Investors, Inc., or
any of their subsidiaries or successors and in the absence
of actual fraud the Corporation may deal freely with
Federated Research Corp., and Federated Investors, Inc., or
any of their subsidiaries or successors, and neither such
management contract or contract for research and advisory
services nor such underwriting contract or contract for the
distribution of the capital stock of the Corporation not any
other contract or transaction between the Corporation and
Federated Research Corp. or Federated Investors, Inc., or
any of their subsidiaries or successors shall be invalidated
or in anywise affected thereby, nor shall any Director or
Officer of the Corporation be liable to the Corporation not
to any Stockholder or creditor of the Corporation or to any
other person for any loss incurred under or by reason of any
such contract or transaction. Notwithstanding the
foregoing, no officer or director of or investment adviser
of or principal underwriter for the Corporation shall be
protected against any liability to the Corporation or to its
security holders to which he 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;

(b) Employ any person, partnership or corporation as
counsel, registrar, transfer agent, dividend disbursing
agent or custodian, whether or not such person, partnership
or corporation is or has a member, officer, director or
stockholder who is an Officer or Director of the Corporation
so long as only customary fees shall be charged for the
services rendered to or for the benefit of the Corporation.

(c) Purchase or sell securities for or from the investment
portfolio of the Corporation from, to or through any person,
partnership or corporation which is or has a member,
officer, director or stockholder who is an Officer or
Director of the Corporation so long as such person,
partnership or corporation, unless otherwise authorized by
the Securities and Exchange Commission, shall act only as
agent or broker and not as principal and the commission or
other compensation paid by the Corporation shall not exceed
customary brokerage charges for such services.

5. No Officer or Director of the Corporation or of any
investment advisory company of management company, nor the Corporation
itself, nor such investment advisory or management company or
underwriter of the Corporation shall take long or short positions in
respect of any shares of the capital stock issued by the Corporation;
provided, however, that such prohibition shall not prevent:

(a) The Corporation or any underwriter from purchasing
from the Corporation shares of capital stock issued by the
Corporation, provided that orders to purchase from the
Corporation by the Corporation or such underwriter upon
receipt by it of purchase orders for shares of stock of the
Corporation, provided such purchases are not in excess of
purchase orders received by such Corporation or underwriter;

(b) The Corporation or any distributor or underwriter from
maintaining a market for shares of capital stock issued by
the Corporation in the capacity of agent for the
Corporation;

(c) The purchase from the Corporation of shares of capital
stock of the Corporation by the Officers or Directors of the
Corporation of any investment advisory, management company
or underwriter or distributor of the Corporation at the
prices available to the public at the moment of such
purchase or to the extent that any such person is a
Stockholder at the price available to Stockholders of the
Corporation generally at the moment of such purchase.

6. The Corporation shall at all times cause its securities to
be held by a Custodian, which shall be a Bank or Trust Company, having
an aggregate capital surplus and undivided profit (as shown in its last
published report) of at least Two Million ($2,000,000) Dollars. The
Custodian shall also receive all monies due to the Corporation and shall
deposit same in its banking department or elsewhere as the Board of
Directors may direct. The Board of Directors may, in its discretion,
enter into agreements with the Custodian authorizing it to act as agent
for the Corporation in the disbursement of dividends, purchase and sale
of securities, redemption of the Corporation's securities, delivery of
proxies, maintenance of books and accounts and the performance of such
other service as the Board may deem advisable. All agreements with the
Custodian shall be subject to applicable state law, the Charter and By-
Laws of the Corporation, and the Investment Company Act of 1940, as
amended, and the rules and regulations of the Securities and Exchange
Commission. In the event of the resignation, removal or inability of
the Custodian to serve, the Corporation hereabove mentioned shall be
delivered directly to such successor Custodian. In the event no such
successor Custodian can be found, the Board of Directors of the
Corporation shall call a Special Meeting of Stockholders to determine
whether the Corporation shall be liquidated or shall function without a
Custodian.

7. Each person who is or has been a Director or Officer (and
his heirs, executors and administrators) shall be indemnified by the
Corporation against reasonable costs and expenses incurred by him in
connection with any claim or in connection with any action, suit or
proceeding whether judicial, administrative or otherwise, to which he
may be a party by reason of his being or having been a Director or
Officer of the Corporation, except in relation to any action, suit or
proceeding, in which he has been adjudged liable because of willful
disregard of the duties involved in the conduct of his office. In the
absence of an adjudication which expressly absolves the Director or
Officer of liability to the Corporation or its stockholders for willful
misfeasance, bad faith, gross negligence and reckless disregard of the
duties involved in the conduct of his office, or in the event of a
settlement, each Director and Officer (and his heirs, executors and
administrators) shall be indemnified by the Corporation against payments
made, including reasonable costs and expenses, provided that such
indemnity shall be conditioned upon the prior determination by a
resolution of two-third of those members of the Board of Directors of
the Corporation who are not involved in the action, suit or proceeding
that the Director of Officer has no liability by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his office, and provided further that
if a majority of the members of the Board of Directors of the
Corporation are involved in the action, suit or proceeding, such
determination shall have been made by a written opinion of independent
counsel. Such a determination by the Board of Directors, or by
independent counsel, and the payments by the Corporation on the basis
thereof shall not prevent a Stockholder from challenging such
indemnification by appropriate legal proceedings on the grounds that the
person indemnified was liable to the Corporation or is security holders
by reason of willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of his office.
The foregoing rights and indemnification shall not be exclusive of any
other rights to which the Officers and Directors may be entitled
according to law.

8. Securities of other corporations entitling the holder
thereof to vote shall be voted by such Officer or Officers of the
Corporation as the Board of Directors shall designate for the purpose,
or by a proxy or proxies thereunto duly authorized by the Board of
Directors.

9. The Board of Directors shall subject to the laws of
Maryland, have power to determine, from time to time, whether and to
what extent and at what times and places and under what conditions and
regulations any accounts and books of the Corporation, or any of them,
shall be open to the inspection of Stockholders.

10. Notwithstanding any provision of law requiring a greater
proportion than a majority of the votes of all classes or of any class
of stock entitled to be cast, to take or authorize any action, the
Corporation may take or authorize any such action upon the concurrence
of a majority of the aggregate number of the votes entitled to be cast
thereon.

11. The Corporation reserves the right from time to time to make
any amendment of its Charter now or hereafter authorized by law
including any amendment which alters the contract rights, as expressly
set forth in its Charter of any outstanding capital stock.

12. In addition to the powers and authority conferred upon them
by the Charter of the Corporation or by law, the Board of Directors may
exercise all such powers and authority and do all such acts and things
as may be exercised or done by the Corporation, subject, nevertheless,
to provisions of applicable state law and the Charter and By-Laws of the
Corporation.

TENTH: The duration of the Corporation shall be perpetual.
IN WITNESS WHEREOF we have signed these Articles of Incorporation

of the 4th day of June, 1969.

/s/ Miriam Casley
Miriam Casley

/s/ Fred C. Houston, Jr.
Fred C. Houston, Jr.

/s/ Thomas J. Donnelly
Thomas J. Donnelly

STATE OF PENNSYLVANIA )
) SS:
COUNTY OF ALLEGHENY )

I hereby certify that on June 4, 1969, before me, the subscriber,

a Notary Public of the State of Pennsylvania, in and for the County of

Allegheny, personally appeared MIRIAM CASLEY, FRED C. HOUSTON, JR., and

THOMAS J. DONNELLY, and severally acknowledged the foregoing Articles of

Incorporation to be their act.

WITNESS my hand and notarial seal or stamp the day and year last

above written.

/s/ Helen B. Walters
Notary Public

My Commission Expires Feb. 5, 1971

Exhibit 1(ii) under Form N-1A
Exhibit 3(a)(i) under Item
601/Reg.S/K
MUTUAL FUND FOR INVESTING IN U.S. GOVERNMENT SECURITIES
YIELDING AT LEAST 6% TO MATURITY AND U.S. TREASURY BILLS, INC.

ARTICLES OF AMENDMENTS
(Under Sections 11-12)

MUTUAL FUND FOR INVESTING IN U.S. GOVERNMENT SECURITIES YIELDING

AT LEAST 6% TO MATURITY AND U.S. TREASURY BILLS, INC., a Maryland

Corporation having its principal office in Baltimore City, Maryland

(hereinafter called the "Corporation"), hereby certifies to the State

Department of Assessments and Taxation of Maryland that:

FIRST: The Charter of the Corporation is hereby amended:

1. by striking out Article SECOND and substituting

in its place the following:

"SECOND: The name of the Corporation is:

MUTUAL FUND FOR INVESTING IN U.S.
GOVERNMENT SECURITIES, INC."
SECOND: The Board of Directors of the Corporation on August

20, 1969, adopted a resolution in which was set forth the foregoing

amendment to the Charter declaring that the said amendment of the

Charter was advisable and directing that it be submitted for action

thereon at a Special Meeting of Stockholders of the Corporation to be

held on August 20, 1969, or at any adjournment or adjournments thereof.

THIRD: Notice setting forth the said amendment of the Charter

and stating that the purpose of the meeting of the stockholders would be

to take action thereon, was given, as required by law, to all

stockholders entitled to vote thereon; and like notice was given to all

stockholders of the Corporation not entitled to vote thereon, whose

contract rights as expressly set forth in the Charter would be altered

by the amendment.

FOURTH: The amendment of the Charter of the Corporation as

herein set forth was approved by the Stockholders of the Corporation at

the Special Meeting of Stockholders, held on August 20, 1969, by all the

votes entitled to be cast thereon as required by the Articles of

Incorporation.

FIFTH: The amendment of the Charter of the Corporation as

hereinabove set forth has been duly advised by the Board of Directors

and approved by the Stockholders of the Corporation.

IN WITNESS WHEREOF, Mutual Fund for Investing in U.S. Government

Securities Yielding at Least 6% to Maturity and U.S. Treasury Bills,

Inc., has caused these presents to be signed in its name and on its

behalf by its President or one of its Vice Presidents and its corporate

seal to be hereunto affixed and attested by its Secretary or one of its

Assistant Secretaries on August 20, 1969.

MUTUAL FUND FOR INVESTING IN U.S.
GOVERNMENT SECURITIES YIELDING AT LEAST 6% TO
MATURITY AND U.S. TREASURY BILLS, INC.

By: /s/Clifford E. Brown
Vice President

ATTEST:

/s/ John W. McGonigle
Secretary

CORPORATE SEAL

Exhibit 1(iii) under Item N-1A
Exhibit 3(a)(ii) under Item 601/Reg.
S/K

MUTUAL FUND FOR INVESTING
IN U.S. GOVERNMENT SECURITIES, INC.

ARTICLES OF AMENDMENT
(Under Sections 11-12)

MUTUAL FUND FOR INVESTING IN U.S. GOVERNMENT SECURITIES, INC., a

Maryland corporation having its principal office in Baltimore City,

Maryland (hereinafter called the "Corporation"), hereby certifies to the

State Department of Assessments and Taxation of Maryland that:

FIRST: The Charter of the Corporation is hereby amended as

follows:

1. By striking out Articles FIFTH and substituting in its

place the following:

"FIFTH: The total number of shares of stock which the
Corporation shall have authority to issue is 100,000,000
shares, all of one class, of the par value of $1.00 per
share, and of the aggregate par value of $100,000,000. The
first issuance and sale of shares of the capital stock of
the Corporation shall be at such price, not less than the
par value thereof as shall be fixed by the Board of
Directors. Thereafter, upon the sale of each share of its
capital stock, the Corporation shall receive in cash or in
corporate securities valued as hereinafter provided, not
less than the current net asset value thereof, determined as
provided in Article SEVENTH, and not less than the par value
thereof."

Prior to this amendment the total number of shares of stock

which the Corporation had authority to issue was 5,000,000 shares, all

of one class, of the par value of $1.00 per share, and of the aggregate

par value of $5,000,000.

SECOND: The Board of Directors of the Corporation at a meeting

duly convened and held on February 12, 1970, adopted a resolution in

which was set forth the foregoing amendment to the Charter declaring

that the said amendment of the Charter was advisable and directing that

it be submitted for action thereon at a Special Meeting of Stockholders

of the Corporation to be held on April 7, 1970, or at any adjournment or

adjournments thereof.

THIRD: Notice setting forth the said amendment of the Charter

and stating that the purpose of the meeting of the stockholders would be

to take action thereon, was given, as required by law, to all

stockholders entitled to vote thereon; and like notice was given to all

stockholders of the Corporation not entitled to vote thereon, whose

contract rights as expressly set forth in the Charter would be altered

by the amendment.

FOURTH: The amendment of the Charter of the Corporation as

herein set forth approved by the Stockholders of the Corporation at the

Special Meeting of the Stockholders, held on April 7, 1970, by all the

votes entitled to be cast thereon as required by the Articles of

Incorporation.

FIFTH: The amendment of the Charter of the Corporation as

hereinabove set forth has been duly advised by the Board of Directors

and approved by the Stockholders of the Corporation.

IN WITNESS WHEREOF, Mutual Fund for Investing in U.S. Government

Securities, Inc. has caused these presents to be signed in its name and

on its behalf by its President or one of its Vice Presidents and its

corporate seal to be hereunto affixed and attested by its Secretary or

one of its Assistant Secretaries on April 7, 1970.

MUTUAL FUND FOR INVESTING IN U.S.
GOVERNMENT SECURITIES, INC.

ATTEST:
/s/ John W. McGonigle /s/ John F. Donahue

Secretary President

CORPORATE SEAL

Exhibit 1(iiii) under Form N-
1A
Exhibit 3(a)(iii) under Item
601/Reg.S-K

Exhibit 1(e)

MUTUAL FUND FOR INVESTING IN
U.S. GOVERNMENT SECURITIES, INC.

ARTICLES OF AMENDMENT
(Under Sections 11-12)

MUTUAL FUND FOR INVESTING IN U.S. GOVERNMENT SECURITIES, INC., a

Maryland corporation having its principal office in Baltimore City,

Maryland (hereinafter called the "Corporation"), hereby certifies to the

State Department of Assessments and Taxation of Maryland that:

FIRST: The Charter of the Corporation is hereby amended:

1. By striking out Article SECOND and substituting in

its place the following:

"SECOND: The name of the Corporation is:

FUND FOR U.S. GOVERNMENT SECURITIES, INC."

SECOND: The Board of Directors of the Corporation on August

12, 1971, adopted a resolution in which was set forth the foregoing

amendment to the Charter declaring that the said amendment of the

Charter was advisable and directing that it be submitted for action

thereon at the Annual Meeting of Shareholders of the Corporation to be

held on September 30, 1971, or at any adjournment or adjournments

thereof.

THIRD: Notice setting forth the said amendment of the Charter

and stating that the purpose of the meeting of the shareholders would be

to take action thereon was given, as required by law, to all

shareholders entitled to vote thereon; and like notice was given to all

shareholders of the Corporation not entitled to vote thereon. whose

contract rights as expressly set forth in the Charter would be altered

by the amendment.

FOURTH: The amendment of the Charter of the Corporation as

herein set forth was approved by the Shareholders of the Corporation at

the Annual Meeting of the Shareholders, held on September 30, 1971, by a

majority of all the votes entitled to be cast thereon as required by the

Articles of Incorporation.

FIFTH: The amendment of the Charter of the Corporation as

hereinabove set forth has been duly advised by the Board of Directors

and approved by the Shareholders of the Corporation.

IN WITNESS WHEREOF, Mutual Fund for Investing in U.S. Government

Securities, Inc. has caused these presents to be signed in its name and

on its behalf by its President or one of its Vice Presidents and its

corporate seal to be hereunto affixed and attested by its Secretary or

one of its Assistant Secretaries on September 30, 1971.

MUTUAL FUND FOR INVESTING IN
U.S. GOVERNMENT SECURITIES, INC.

Attest: By:
Vice President

Secretary

Exbibit 1(iiiii) under Form N-1A
Exhibit 3(a)(iiii) under Item 601/Reg.S/K

Exhibit 1(c)

FUND FOR U.S. GOVERNMENT SECURITIES, INC.

ARTICLES OF AMENDMENT
(Under Sections 11-12)

Fund for U.S. GOVERNMENT SECURITIES, INC., Maryland Corporation,

having its principal office in Baltimore City, Maryland (hereinafter

called the "Corporation"), hereby certifies to the State Department of

Assessments and Taxation of Maryland that:

FIRST: The Charter of the Corporation is hereby amended as

follows:

1. By striking out subparagraph 5(c) of Article Third thereof

and substituting the following in place thereof:

"5 (c) The Corporation may not and shall not purchase

securities on margin but it may obtain such short-term

credits as may be necessary for clearance of purchase and

sales of securities. The Corporation may purchase and

dispose of U.S. Government securities before the issuance

thereof. The Corporation may also purchase U.S. Government

securities on a delayed delivery basis. The settlement

dates of these transactions shall be determined by the

mutual agreement of the parties."

2. By striking out subparagraph 5(e) of Article Third thereof

and substituting the following in the place thereof:

"The Corporation may not and shall not:

5(e) Lend any assets of the Corporation to any person for

any purpose whatsoever provided, however, that the purchase

or holding of bonds, debentures, notes, certificates of

indebtedness or other securities of the U.S. Government of

its instrumentalities acquired at original issue, or

otherwise, shall not be prohibited by this subparagraph.

The Corporation may also enter into repurchase agreements

covering U.S. Government Securities with banks or recognized

financial institutions."

SECOND: The Board of Directors of the Corporation on August 14,

1973, adopted a resolution in which was set forth the foregoing

amendments to the Charter declaring that the said amendments of the

Charter were advisable and directing that they be submitted for action

thereon at the Annual Meeting of Stockholders of the Corporation to be

held on January 10, 1974, or at any adjournment or adjournments thereof.

THIRD: Notice setting forth the said amendments of the Charter and

stating that the purpose of the meeting of the stockholders would be to

take action thereon, was given, as required by law, to all stockholders

entitled to vote thereon; and like notice was given to all stockholders

of the Corporation not entitled to vote thereon, whose contract rights

as expressly set forth in the Charter would be altered by the

amendments.

FOURTH: The amendments of the Charter of the Corporation as herein

set forth were approved by the Stockholders of the Corporation at the

Annual Meeting of Stockholders, held on January 10, 1974, by all the

votes entitled to be cast thereon as required by the Articles of

Incorporation.

FIFTH: The amendments of the Charter of the Corporation as herein

above set forth have been duly advised by the Board of Directors and

approved by the Stockholders of the Corporation.

IN WITNESS WHEREOF, Fund for U.S. Government Securities, Inc. has

caused these presents to be signed in its name and on its behalf by its

President or one of its Vice Presidents and its corporate scal to be

hereunto affixed and attested by its Secretary or one of its Assistant

Secretaries on January 11, 1974.

FUND FOR U.S. GOVERNMENT SECURITIES, INC.

By: /s/ Clifford E. Brown

Vice-President

ATTEST:

/s/ John W. McGonigle

Secretary

Exhibit 1(iiiiii) under Form N-1A
Exhibit 3(a)(iiiii) under Item 601/Reg.S-K

ARTICLES OF AMENDMENT
(Under Sections 11-12)

FUND FOR U.S. GOVERNMENT SECURITIES, INC., a Maryland corporation

having its principal office in Baltimore City, Maryland (hereinafter

called the "Corporation"), hereby certifies to the State Department of

Assessments and Taxation of Maryland that:

FIRST: The Charter of the Corporation is hereby amended as

follows:

1. By striking out Paragraph 1 of Article Third and

substituting the following in place thereof:

THIRD: The purpose for which the Corporation is formed are:

1. To purchase or otherwise acquire, hold for investment
or otherwise, sell, exchange, or otherwise dispose of
securities which are primary obligations of the U.S.
Government or its instrumentalities or securities which are
guaranteed as to payment of principal and interest by the
U.S. Government or its instrumentalities (hereinafter
referred to as "U.S. Government securities") and generally to
deal in any such securities; and to exercise as owner or
holder of any securities, all rights, powers and privileges
in respect thereof.

2. By striking out Subparagraphs 5(a), 5(c) and 5(e) of Article

THIRD and substituting the following in place thereof:

5. Anything in this Article THIRD or else where in the
Charter of the Corporation to the contrary notwithstanding
the Corporation may not and shall not:

(a) Invest in any securities other than U.S.
Government securities.

(c) The Corporation may not and shall not purchase
securities on margin but it may obtain such short-term
credits as may be necessary for clearance of purchase
and sale of securities. The Corporation may purchase
and dispose of U.S. Government securities before the
issuance thereof. The Corporation may also purchase
and sell U.S. Government securities on a delayed
delivery basis. The settlement dates of these
transactions shall be determined by the mutual
agreement of the parties.

(e) Lend any assets of the Corporation to any person
for the purpose whatsoever provided, however, that the
purchase of holding of bonds, debentures, notes,
certificates of indebtedness or other U.S. Government
securities acquired at original issue, or otherwise,
shall not be prohibited by this subparagraph. The
Corporation may also enter into repurchase agreements
covering U.S. Government securities with banks or
recognized financial institutions.

SECOND: The Board of Directors of the Corporation on November

18, 1976, adopted a resolution in which was set forth the foregoing

amendments to the Charter declaring that the said amendments of the

Charter was advisable and directing that they be submitted for action

thereon at the Annual Meeting of Stockholders of the Corporation to be

held on February 11, 1977, or at any adjournment or adjournments

thereof.

THIRD: Notice setting forth the said amendments of the

Charter and stating that the purpose of the meeting of the stockholders

would be to take action thereon, was given, as required by law, to all

stockholders entitled to vote thereon; and like notice was given to all

stockholders of the Corporation not entitled to vote thereon, whose

contract rights as expressly set forth in the Charter would be altered

by the amendments.

FOURTH: The amendments of the Charter of the Corporation as

herein set forth was approved by the stockholders of the Corporation at

the Annual Meeting of the Stockholders, held on February 11, 1977, by

all the votes entitled to be cast thereon as required by the Articles of

Incorporation.

FIFTH: The amendments of the Charter of the Corporation as

hereinabove set forth have been duly advised by the Board of Directors

and approved by the stockholders of the Corporation.

IN WITNESS WHEREOF, Fund for U.S. Government Securities, Inc. has

caused these presents to be signed in its name and on its behalf by its

President or one of its Vice Presidents and its corporate seal to be

hereunto affixed and attested by its Secretary or one of its Assistant

Secretaries on February 14, 1977.

FUND FOR U.S. GOVERNMENT

SECURITIES, INC.
ATTEST:

/s/ Eugene F. Maloney /s/ John W. McGongile
Eugene F. Maloney John W. McGongile
Assistant Secretary Vice President

Exhibit 1 (iiiiiii) under Form N-1A
Exhibit 3(a)(iiiiii) under Item
601/Reg.S/K

FUND FOR U.S. GOVERNMENT SECURITIES, INC.

ARTICLES OF AMENDMENT
(Under Sections 11-12)

FUND FOR U.S. GOVERNMENT SECURITIES, INC., a Maryland corporation

having its principal office in Baltimore City, Maryland (hereinafter

called the "Corporation"), hereby certifies to the State Department of

Assessments and Taxation of Maryland that:

FIRST: The Charter of the Corporation is hereby amended as

follows:

1. By striking out Section 2 of Article Seventh and

substituting the following in place thereof:

2. The term "net asset value" of the Corporation
shall mean the amount by which the assets of the
Corporation, taken at fair market values, exceed
its liabilities, all as determined by or under
the direction of the Board of Directors, in
accordance with the requirements of the
Investment Company Act of 1940 and in conformity
with generally accepted accounting practices and
principles. The net asset value of the
Corporation thus obtained divided by the number
of shares of capital stock of the Corporation
then issued and outstanding shall be the net
asset value per share. Such values will be
determined at least once on each business day
that the New York Stock Exchange is open. The
Board of Directors may delegate any of the
powers and duties under this Section 2 with
respect to appraisal of assets and liabilities
to the Executive Committee, to an Officer of
Officers of the Corporation, the Investment
Adviser, the administrative services agent or to
the Custodian of its securities, or to such
other person or persons as may be deemed
qualified in the judgment of the Board of
Directors.
SECOND: The Board of Directors of the Corporation on August

30, 1978, adopted a resolution in which was set forth the foregoing

amendment to the Charter declaring that the said amendment of the

Charter was advisable and directing that it be submitted for action

thereon at the Annual Meeting of Stockholders of the Corporation to be

held on October 23, 1978, or at any adjournment or adjournments thereof.

THIRD: Notice setting forth the said amendments of the

Charter and stating that the purpose of the meeting of the stockholders

would be to take action thereon, was given, as required by law, to all

stockholders entitled to vote thereon; and like notice was given to all

stockholders of the Corporation not entitled to vote thereon, whose

contract rights as expressly set forth in the Charter would be altered

by the amendments.

FOURTH: The amendment of the Charter of the Corporation as

herein set forth was approved by the stockholders of the Corporation at

the Annual Meeting of the Stockholders, held on October 23, 1978, by a

majority of votes present or represented by proxy as required by the

Articles of Incorporation.

FIFTH: The amendment of the Charter of the Corporation as

hereinabove set forth have been duly advised by the Board of Directors

and approved by the stockholders of the Corporation.

IN WITNESS WHEREOF, Fund for U.S. Government Securities, Inc. has

caused these presents to be signed in its name and on its behalf by its

President or one of its Vice Presidents and its corporate seal to be

hereunto affixed and attested by its Secretary or one of its Assistant

Secretaries on October 23, 1978.

FUND FOR U.S. GOVERNMENT

SECURITIES, INC.
ATTEST:

/s/ Eugene F. Maloney /s/ John W. McGonigle
Eugene F. Maloney John W. McGongile
Assistant Secretary Vice President

Exhibit 1(iiiiiiii) under Rule
N-1A
Exhibit 3(a)(iiiiiii) under Item
601/Reg.S/K

FUND FOR U.S. GOVERNMENT SECURITIES, INC.

ARTICLES OF AMENDMENT

FUND FOR U.S. GOVERNMENT SECURITIES, INC., a Maryland corporation

having its principal office in the City of Baltimore, Maryland

(hereinafter called the "Corporation"), hereby certifies to the State

Department of Assessments and Taxation of Maryland pursuant to Title 2,

Subtitle 6 of The Annotated Code of Maryland that:

FIRST: The Articles of Incorporation of the Corporation are

hereby amended as follows:

1. By adding as Section 4 of Article Seventh the following:

4. The Corporation shall have the right,
exercisable at the discretion of the Board of Directors, to redeem
shares of any shareholder for their then current net asset value
per share if at such time the shareholder owns shares having an
aggregate net asset value of less than $1,000.

SECOND: The Board of Directors of the Corporation on August

25, 1983, adopted a resolution in which was set forth the foregoing

amendment to the Articles of Incorporation declaring that the said

amendment of the Articles of Incorporation was advisable and directing

that it be submitted for action thereon at the Annual Meeting of

Stockholders of the Corporation to be held on November 3, 1983, or at

any adjournment or adjournments thereof.

THIRD: Notice setting forth the said amendment of the

Articles of Incorporation and stating that the purpose of the meeting of

the stockholders would be take action thereon, was given, as required by

law, to all stockholders entitled to vote thereon.

FOURTH: The amendment of the Articles of Incorporation of the

Corporation as herein set forth was approved by the stockholders of the

Corporation at the Annual Meeting of the Stockholders, held on

November 3, 1983, by a majority of votes present or represented by proxy

as required by the Articles of Incorporation.

FIFTH: The amendment of the Articles of Incorporation of the

Corporation as hereinabove set forth has been duly advised by the Board

of Directors and approved by the Stockholders of the Corporation.

IN WITNESS WHEREOF, Fund for U.S. Government Securities, Inc. has

caused these presents to be signed in its name and one its behalf by its

President or one of its Vice Presidents and its corporate seal to be

hereunto affixed and attested by its Secretary or one of its Assistant

Secretaries on November 11, 1983.

ATTEST: FUND FOR U.S. GOVERNMENT
SECURITIES, INC.

/s/ Thomas A. Early /s/ John W. McGongile
Thomas A. Early John W. McGongile
Assistant Secretary Vice President

Exhibit 1 (iiiiiiiii) under Form N-
1A
Exhibit 3(a)(iiiiiiii) under Item
601/Reg.S/K

FUND FOR U.S. GOVERNMENT SECURITIES, INC.

ARTICLES OF AMENDMENT

FUND FOR U.S. GOVERNMENT SECURITIES, INC., a Maryland corporation

having its principal office in the City of Pittsburgh, Pennsylvania,

(hereinafter called the "Corporation"), hereby certifies to the State

Department of Assessments and Taxation of Maryland pursuant to Title 2,

Subtitle 6 of The Annotated Code of Maryland that:

FIRST: The Articles of Incorporation of the Corporation are

hereby amended as follows:

1. By striking out Section 5, Subparagraph (e) of the

Article THIRD and inserting the following in its place:

"(d) Lend any assets except portfolio securities.
(This shall not prevent the purchase or holding of
U.S. Government securities, repurchase agreements
covering U.S. Government securities or other
transactions which are permitted by the Fund's
investment objective and policies.)"
SECOND: The Board of Directors of the Corporation on May 24,

1985, adopted a resolution in which was set forth the foregoing

amendments to the Charter declaring that the said amendments of the

Charter was advisable and directing that they be submitted for action

thereon at the Annual Meeting of Stockholders of the Corporation to be

held on January 8, 1986, or at any adjournment or adjournments thereof.

THIRD: Notice setting forth the said amendment of the

Articles of Incorporation and stating that the purpose of the meeting of

the stockholders would be to take action thereon, was given, as required

by law, to all stockholders entitled to vote thereon.

FOURTH: The amendment of the Articles of Incorporation of the

Corporation as herein set forth was approved by the stockholders of the

Corporation at the Annual Meeting of the Stockholders, held on January

8, 1986, by all the votes entitled to be cast thereon as required by the

Articles of Incorporation.

FIFTH: The amendment of the Articles of Incorporation of the

Corporation as hereinabove set forth have been duly advised by the Board

of Directors and approved by the stockholders of the Corporation.

IN WITNESS WHEREOF, Fund for U.S. Government Securities, Inc. has

caused these presents to be signed in its name and on its behalf by its

President or one of its Vice Presidents and its corporate seal to be

hereunto affixed and attested by its Secretary or one of its Assistant

Secretaries on February 5, 1986.

FUND FOR U.S. GOVERNMENT

SECURITIES, INC.
ATTEST:

G. Andrew Bonnewell John W. McGongile
Assistant Secretary Vice President

COMMONWEALTH OF PENNSYLVANIA )
) SS:
COUNTY OF ALLEGHENY )

I hereby certify that on February 5, 1986, before me, the

subscriber, a Notary Public of the Commonwealth of Pennsylvania in and

for the County of Allegheny, personally appeared JOHN W. MCGONGILE and

G. ANDREW BONNEWELL, Vice President and Assistant Secretary,

respectively, of Fund for U.S. Government Securities, Inc., a Maryland

corporation, and in the same and on behalf of said Corporation

acknowledged the foregoing Articles of Amendment to be the corporate act

of said Corporation and that the matters and facts sets forth in said

Articles of Amendment are true to the best of their knowledge,

information and belief.

WITNESS may hand and notarial seal the day and year last above

written.

/s/ Linda L. Banas

Notary Public

Exhibit 1 (iiiiiiiiii) under Form N1-
A
Exhibit 3(a)(iiiiiiiii) under Item
601/Reg.S/K

FUND FOR U.S. GOVERNMENT SECURITIES, INC.

ARTICLES OF AMENDMENT

FUND FOR U.S. GOVERNMENT SECURITIES, INC., a Maryland corporation

having its principal office in the City of Pittsburgh, Pennsylvania

(hereinafter called the "Corporation"), hereby certifies to the State

Department of Assessments and Taxation of Maryland pursuant to Title 2,

Subtitle 6 of The Annotated Code of Maryland that:

FIRST: The Articles of Incorporation of the Corporation are

hereby amended as follows:

By striking Article FIFTH and inserting the following

in its place:

"FIFTH: The total number of shares of stock which the
Corporation shall have authority to issue is
2,000,000,000 shares, all of one class, of the par
value of $0.001 per share, and of the aggregate par
value of $2,000,000."

Prior to this amendment the total number of shares of stock which

the Corporation had authority to issue was 100,000,000 shares, all of

one class, of the par value of $1.00 per share, and of the aggregate par

value of $100,000,000.

SECOND: The Board of Directors of the Corporation on March 24,

1986, adopted a resolution in which was set forth the foregoing

amendment to the Article of Incorporation declaring that the said

amendment to the Articles of Incorporation was advisable and directing

that it be submitted for action thereon at a Special Meeting of

stockholders of the Corporation to be held on May 13, 1986, or at any

adjournment or adjournments thereof.

THIRD: Notice setting forth the said amendment to the

Articles of Incorporation and stating that the purpose of the meeting of

the stockholders would be to take action thereon, was given, as required

by law, to all stockholders entitled to vote.

FOURTH: The amendment to the Articles of Incorporation of the

Corporation as herein set forth was approved by the stockholders of the

Corporation at a Special Meeting of the Stockholders, held on May 13,

1986, by a majority of votes present or represented by proxy as required

by the Articles of Incorporation.

FIFTH: The amendment to the Articles of Incorporation of the

Corporation as hereinabove set forth has been duly advised by the Board

of Directors and approved by the stockholders of the Corporation.

IN WITNESS WHEREOF, Fund for U.S. Government Securities, Inc. has

caused these presents to be signed in its name and on its behalf by its

President or one of its Vice Presidents and its corporate seal to be

hereunto affixed and attested by its Secretary or one of its Assistant

Secretaries on May 13, 1986.

ATTEST: FUND FOR U.S. GOVERNMENT
SECURITIES, INC.

G. Andrew Bonnewell J. Christopher Donahue
Assistant Secretary President

The undersigned, President of Fund for U.S. Government Securities

Inc., who executed on behalf of said corporation the foregoing Articles

of Amendment, of which this certificate is made a part, hereby

acknowledges, in the name and on behalf of said corporation, the

foregoing Articles of Amendment to the corporate act of said corporation

and further certifies that, to the best of his knowledge, information or

belief the matters and facts set forth therein with respect to the

approval thereof are true in all material respects, under the penalties

of perjury.

By: /s/ J. Christopher Donahue
J. Christopher Donahue
President

Exhibit 1 (iiiiiiiiiii) under Form N-
1A
Exhibit 3(a)(iiiiiiiiii) under Item
601/Reg.S/K

FUND FOR U.S. GOVERNMENT SECURITIES, INC.

ARTICLES SUPPLEMENTARY

FUND FOR U.S. GOVERNMENT SECURITIES, INC., a Maryland corporation
having its principal offices in Baltimore, Maryland (hereinafter called
the "Corporation"), hereby certifies:

FIRST: The Board of Directors hereby reclassifies 400,000,000 of
the authorized but unissued shares of Select Shares of the
Corporation as 400,000,000 shares of Class B Shares.

SECOND: The shares of Common Stock reclassified hereby shall have
the preferences, conversion and other rights, voting powers,
restrictions, limitations as to dividends, qualifications, and
terms and conditions of redemption as set forth in Article FIFTH,
paragraph (b) of the Corporation's charter and shall be subject to
all provisions of the charter relating to stock of the Corporation
generally.

THIRD: The stock has been reclassified by the Board of Directors
under the authority contained in the charter of the Corporation.

IN WITNESS WHEREOF, Fund for U.S. Government Securities, Inc. has
caused these presents to be signed in its name and on its behalf by its
President and witnessed by its Assistant Secretary on June 10, 1994.

The undersigned, J. Christopher Donahue, President of the
Corporation, hereby acknowledges in the name and on behalf of the
Corporation the foregoing Articles Supplementary to be its corporate act
and further certifies to the best of his knowledge, information and
belief, that the matters and facts set forth herein with respect to the
authorization and approval hereof are true in all material respects and
that this statement is made under the penalties of perjury.

ATTEST: FUND FOR U.S. GOVERNMENT
SECURITIES, INC.

/s/ Charles H. Field By:/s/ J. Christopher Donahue
Charles H. Field J. Christopher Donahue
Assistant Secretary President

Exhibit 2(i) under Form N-1A
Exhibit 3(b) under Item 601/reg.S-K

BY-LAWS

MUTUAL FUND FOR INVESTING IN U.S. GOVERNMENT SECURITIES
YIELDING AT LEAST 6% TO MATURITY AND U.S. TREASURY BILLS, INC.

ARTICLE I

MEETING OF STOCKHOLDERS

Section 1. ANNUAL MEETINGS. The Annual Meeting of the
Stockholders of the Corporation shall be held on the first Monday of
October in each year unless such day is a legal holiday in which case
the meeting shall be held at the same time on the next succeeding
business day which is not a legal holiday. The business to be
transacted at the Annual Meeting shall include the election of
Directors, consideration and action upon the reports of Officers and
Directors, and other business within the power of the Corporation.

Section 2. SPECIAL MEETINGS. Special Meetings of Stockholders
may be called by the President or by the Board of Directors; and shall
be called by the President, Secretary of any Director at the request in
writing of the holders of not less than 25% of the outstanding voting
shares of the Corporation. Any such requests shall state the purposes
of the proposed meeting.

Section 3. PLACE OF MEETINGS. All meetings of the Stockholders
shall be held at the office of the Corporation in Pittsburgh,
Pennsylvania, or at such other places within or without the State of
Maryland as may be fixed by the party or parties making the call as
stated in the notice thereof.

Section 4. NOTICE. Not less than ten or more than ninety days
before the date of every Annual or Special Meeting of Stockholders the
Secretary or an Assistant Secretary shall give to each Stockholder of
record notice of such meeting by mail, telegraph, cable or radio. Such
notice shall be deemed to have been given when deposited in the mail or
with a telegraph or cable office or radio station for transmission to
the Stockholder at his address appearing on the books of the
Corporation. It shall not be necessary to set forth the business
proposed to be transacted in the notice of any Annual Meeting except
than any proposal to amend the Charter of the Corporation shall be set
forth in such notice. Notice of a Special Meeting shall state the
purpose or proposes for which it is called.

Section 5. QUORUM. At all meetings of the Stockholders the
presence in person or by proxy of Stockholders entitled to cast a
majority in number of votes shall be necessary to constitute a quorum
for the transaction of business. In the absence of a quorum for the
transaction of business. In the absence of a quorum at any meeting a
majority of those Stockholders present in person or by proxy may adjourn
the meeting from time to time to be held at the same place without
further notice than by announcement to be given at the meeting until a
quorum, as above defined, shall be present, whereupon any business may
be transacted which might have been transacted at the meeting originally
called had the same been held at the time so called.

Section 6. VOTING. At all meeting of Stockholders each
Stockholder of the Corporation shall be entitled to one vote for each
share of voting stock standing in his name on the books of the
Corporation on the date for the determination of Stockholders entitled
to vote at such meeting.

Section 7. PROXIES. Any Stockholder entitled to vote at any
meeting of Stockholders may vote either in person or by proxy, but no
proxy which is dated more than eleven months before the meeting name
therein shall be accepted. Every proxy shall be in writing subscribed
by the Stockholder or his duly authorized attorney and dated, but need
not be sealed, witnessed or acknowledged. All proxies shall be filed
with the verified by the Secretary, or an Assistant Secretary of the
Corporation or if the meeting shall so decide, by the Secretary of the
Meeting.

Section 8. INFORMAL ACTION BY STOCKHOLDERS. Any action required
or permitted to be taken at any meeting of Stockholders may be taken
without a meeting, if a consent in writing, setting forth such action,
is signed by all Stockholder entitled to vote on the subject matter
thereof, and such consent is filed with the records of the Corporation.

ARTICLE II

BOARD OF DIRECTORS

Section 1. POWERS. The Board of Directors shall have control and
management of the affairs, business and properties of the Corporation.
They shall have and exercise in the name of the Corporation and on
behalf of the Corporation all the rights and privileges legally
exercisable by the Corporation except as otherwise provided by law, the
Charter, or these By-Laws.

Section 2. NUMBER, QUALIFICATIONS, MANNER OF ELECTION AND TERM OF
OFFICE. The number of Directors of the Corporation shall be as fixed
from time to time by a majority of the entire Board of Directors but
shall be no less than three nor more than twenty. Directors need not be
Stockholders. The Board of Directors may from time to time by a
majority of the entire Board increase or decrease the number of
Directors to such number as they deem expedient not to be less than
three nor more than twenty, however, and fill the vacancies so created.
The term of office of Directors made by the Board pursuant to the
foregoing authorization. Until the first Annual Meeting of Stockholders
or until successors are duly elected and qualify, the Board of Directors
shall consist of the persons named as such in the Charter. The Members
of the Board of Directors shall be elected by the Stockholders at the
Annual Meeting of Stockholders. Each Director shall hold office until
the Annual Meeting next held after his election and until the election
and qualification of his successor.

Section 3. PLACE OF MEETINGS. The Board of Directors may hold
its meeting at such place or places within or without the State of
Maryland as the Board may from time to time determine.

Section 4. ANNUAL MEETINGS. The Board of Directors shall meet
for the election of Officers and any other business as promptly as may
conveniently be done after the adjournment of the Annual Meeting of
Stockholders.

Section 5. REGULAR MEETINGS. Regular meetings of the Board of
Directors shall be held at such intervals and on such dates as the Board
may from time to time designate.

Section 6. SPECIAL MEETINGS. Special meetings of the Board of
Directors may be held at such times and at such places as may be
designated at the call of such meeting. Special meetings shall be
called by the Secretary or Assistant Secretary at the request of the
President or any Director.

Section 7. NOTICE. The Secretary of Assistant Secretary shall
give, at least two days before the meeting, notice of each meeting of
the Board of Directors, whether Annual, Regular or Special, to each
member of the Board by mail, telegram or telephone to his last know
address. It shall not be necessary to state the purpose or business to
be transacted in the notice of any Annual or Regular meeting. The
notice of a Special meeting shall state the purpose or purposes for
which it is called. Personal attendance at any meeting by a Director
other than to protest the validity of said meeting shall constitute a
waiver of the foregoing requirement of notice.

Section 8. CONDUCT OF MEETINGS AND BUSINESS. The Board of
Directors may adopted such rules and regulations for the conduct of
their meetings and the management of the affairs of the Corporation as
they may deem proper and not inconsistent with applicable law, the
Charter of the Corporation of these By-Laws.

Section 9. QUORUM. A majority of the total membership of the
Board of Directors shall constitute a quorum at any meeting of the Board
of Directors. The action of a majority of Directors present at any
meeting at which a quorum is present shall be the action of the Board of
Directors unless the concurrence of a greater proportion is required for
such action by statute, the Charter of the Corporation, or these By-
Laws. In the absence of a quorum at any meeting a majority of Directors
present may adjourn the meeting from day to day or for such longer
periods as they may designate without notice other than by announcement
at the meeting.

Section 10. RESIGNATIONS. Any Director of the Corporation may
resign at any time by mailing or delivering, or transmitting by radio,
telegraph or cable, written notice to the President or to the Secretary
of the Corporation. The resignation of any Director shall take effect
at the time specified therein, and, unless otherwise specified therein,
the acceptance of such resignation shall not be necessary to make it
effective.

Section 11. REMOVAL. At any meeting of Stockholders duly called
for the purpose any Director may be the vote of a majority of all of the
shares of stock outstanding and entitled to vote be removed from office.
At the same meeting the vacancy in the Board of Directors may be filled
by the election of a Director to serve for the remainder of the term and
until the election and qualification of his successor.

Section 12. VACANCIES. Except as otherwise provided by law, any
vacancy occurring in the Board of Directors for any cause other than by
reason of an increase in the number 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; and any vacancy occurring by reason
of an increase in the number of Directors may be filled by action of a
majority of the entire Board of Directors. A Director elected by the
Board of Directors to fill a vacancy shall be elected to hold office
until the next Annual Meeting of Stockholders or until his successor is
duly elected and qualifies. Notwithstanding the foregoing, the
Stockholders may, at any time during the term of such Director elected
to fill a vacancy, elect some other person to fill said vacancy and
thereupon the election by the Board shall be superseded and such
election by the Stockholders shall be deemed a filling of the vacancy
and not a removal and may be made at any meeting called for such
purpose.

Section 13. COMPENSATION OF DIRECTORS. The Directors shall not
receive any stated salary for their services as Directors, but by
Resolution of the Board of Directors a fixed fee and expenses of
attendance may be allowed for attendance at each Meeting. Nothing
herein contained shall be construed to preclude any Director from
serving the Corporation in any other capacity, as an Officer, Agent or
otherwise, and receiving compensation therefor.

Section 14. INFORMAL ACTION BY DIRECTORS. Any action required or
permitted to be taken at any Annual, Regular or Special Meeting of the
Board of Directors may be taken without a meeting if a written consent
to such action is signed by all members of the Board and such written
consent is filed with the members of the Board and such written consent
is filed with the minutes of proceedings of the Board.

ARTICLE III

EXECUTIVE AND OTHER COMMITTEES

Section 1. APPOINTMENT AND TERM OF OFFICE OF EXECUTIVE COMMITTEE.
The Board of Directors, by resolution passed by a vote of at least a
majority of the entire Board, may appoint an Executive Committee, which
shall include the President who shall, ex officio, be a member thereof,
to serve at the pleasure of the Board.

Section 2. VACANCIES IN EXECUTIVE COMMITTEE. Vacancies occurring
the Executive Committee from any cause shall be filled by the Board of
Directors at any Meeting thereof by a vote of the majority of the entire
Board.

Section 3. EXECUTIVE COMMITTEE TO REPORT TO BOARD. All action by
the Executive Committee shall be reported to the Board of Directors at
its Meeting next succeeding such action.

Section 4. PROCEDURE OF EXECUTIVE COMMITTEE. The Executive
Committee shall fix its own rules of procedure not inconsistent with
these By-Laws or with any directions of the Board of Directors. It
shall meet at such times and places and upon such notice as shall be
provided by such rules or be resolution of the Board of Directors. The
presence of a majority shall constitute a quorum for the transaction of
business, and in every case an affirmative vote of a majority of all the
members of the Committee present shall be necessary for the taking of
any action.

Section 5. POWERS OF EXECUTIVE COMMITTEE. During the intervals
between the Meetings of the Board of Directors the Executive Committee,
except as limited by the By-Laws of the Corporation or by specific
directions of the Board of Directors, shall possess and may exercise all
the powers of the Board of Directors in the management and direction of
the business and conduct of the affairs of the Corporation in such
manner as the Executive Committee shall deem for the best interests of
the Corporation, and shall have power to authorize the Seal of the
Corporation to be affixed to all instruments and documents requiring
same. Notwithstanding the foregoing, the Executive Committee shall not
have the power to elect Directors, increase or decrease the number of
Directors, elect or remove any Officer, declare dividends, issue stock
or recommend to Stockholders any action requiring Stockholder approval.

Section 6. OTHER COMMITTEES. From time to time the Board of
Directors may appoint any other Committee or Committees for any purpose
or purposes to the extent lawful, which shall have such powers as shall
be specified in the resolution of appointment.

Section 7. COMPENSATION. The members of any duly appointed
Committee shall receive such compensation and/or fees as from time to
time may be fixed by the Board of Directors.

Section 8. INFORMAL ACTION BY EXECUTIVE COMMITTEE OR OTHER
COMMITTEES. Any action required or permitted to be taken at any meeting
of the Executive Committee or any other duly appointed Committee may be
taken without a meeting if written consent to such action is signed by
all Members of such Committee and such written consent is filed with the
minutes of the proceedings of such Committee.

Section 9. ADVISORY BOARD. The Directors may appoint an Advisory
Board to consist in the first instance of not less than three (3)
members. Members of such Advisory Board shall not be Directors of
Officers and need not be Stockholders. Members of this Board shall hold
office for such period as the Directors may be resolution provide. Any
Member of such Board may resign therefrom by written instrument signed
by him which shall take effect upon delivery to the Directors. The
Advisory Board shall have no legal powers and shall have no legal powers
and shall not perform functions of Directors in any manner, said Board
being intended to act merely at such times and upon such notice as the
Board of Directors may be resolution provide. The compensation of the
Members of the Advisory Board, if any, shall be as determined by the
Board of Directors.

ARTICLE IV

OFFICERS

Section 1. GENERAL PROVISIONS. The Officers of the Corporation
shall be a President, one or more Vice Presidents, a Treasurer and a
Secretary. The Board of Directors may elect a Chairman of the Board of
Directors and elect or appoint such other Officers or agents as the
business of the Corporation may require including one or more Assistant
Vice Presidents, one or more Assistants Secretaries and one or more
Assistant Treasurers. The same person may hold any two offices except
those of President and Vice President.

Section 2. ELECTION, TERM OF OFFICE AND QUALIFICATIONS. The
Officers shall be elected annually by the Board of Directors at its
Annual Meeting following the Annual Meeting of Stockholders. Each
Officer shall hold office until the Annual Meeting in the next year and
until the election and qualification of his successor. Any vacancy in
any of the offices may be filled for the unexpired portion of the term
by the Board of Directors at any Regular or Special Meeting of the
Board. The Chairman of the Board of Directors, if there be a Chairman,
and the President shall be chosen from among the Directors. The Board
of Directors may elect or appoint additional Officers or agents at any
Regular of Special Meeting of the Board.

Section 3. REMOVAL. Any Officer elected by the Board of
Directors may be removed with or without cause at any time upon a vote
of the majority of the entire Board of Directors. Any other employee of
the Corporation may be removed or dismissed at any time by the
President.

Section 4. RESIGNATIONS. Any Officer may resign at any time
by giving written notice to the Board of Directors. Any such
resignation shall take effect at the date of receipt of each notice or
at any later time specified therein, and unless otherwise specified
therein, the acceptance of such resignation shall not be necessary to
make it effective.

Section 5. VACANCIES. A vacancy in any Office because of death,
resignation, removal, disqualification or any other cause shall be
filled for the unexpired portion of the term in the manner prescribed in
these By-Laws for regular election or appointment to such Office.

Section 6. CHAIRMAN OF THE BOARD OF DIRECTORS. The Chairman of
the Board of Directors, if there be a Chairman, shall preside at the
meetings of Stockholders and of the Board of Directors. He shall
receive such information and reports as he may request from the Officers
of the Corporation. He shall counsel and advise the President on
matters of major importance.

Section 7. PRESIDENT. The President shall be the chief executive
officer of the Corporation. He shall, unless other provisions are made
therefore by the Board of Executive Committee, employ and define the
duties of all employees of the Corporation, shall have the power to
discharge any such employees, shall exercise general supervision over
the affairs of the Corporation and shall perform such other duties as
may be assigned to him from time to time by the Board of Directors. In
the absence of the Chairman of the Board of Directors the President
shall preside at all meetings of Stockholders and of the Board of
Directors.

Section 8. VICE PRESIDENTS. The Vice President )or if more than
one, the senior Vice President) in the absence of the President shall
perform all duties and may exercise any of the powers of the President
subject to the control of the Board. Each Vice President shall perform
such other duties as may be assigned to him from time to time by the
Board of Directors or the Executive Committee.

Section 9. SECRETARY. The Secretary shall keep or cause to be
kept in books provided for the purpose the Minutes of the Meeting of the
Stockholders, and of the Board of Directors; shall see that all Notices
are duly given in accordance with the provisions of these By-Laws and as
required by Law; shall be custodian of the records and of the Seal of
the Corporation and see that the Seal is affixed to all Documents the
execution of which on behalf of the Corporation under its Seal is duly
authorized; shall keep directly or through a transfer agent a register
of the post office address of each Stockholder, and make all proper
changes in such register, retaining and filing his authority for such
entries; shall see that the books, reports, statements, certificates and
all other documents and records required by law and properly kept and
filed; and in general shall perform all duties incident to the office of
Secretary and such other duties incident to the office of Secretary and
such other duties as may, from time to time, be assigned to him by the
Board of Directors or the Executive Committee.

Section 10. TREASURER. The Treasurer shall have supervision of
the custody of the funds and securities of the Corporation, subject to
the Charter of the Corporation and applicable law. He shall submit to
the Annual Meeting of Stockholders a statement of the financial
condition of the Corporation and whenever required by the Board of
Directors shall make and render a statement of the accounts of the
Corporation and such other statements as may be required. He shall
cause to be kept in books of the Corporation a full and accurate account
of all monies received and paid out for the account of the Corporation.
He shall perform such other duties as may be from time to time assigned
to him by the Board of Directors shall make and render a statement of
the accounts of the Corporation and such other statements as may be
required. He shall cause to be kept in books of the Corporation a full
and accurate account of all monies received and paid out for the account
of the Corporation. He shall perform such other duties as may be from
time to time assigned to him by the Board of Directors or by the
Executive Committee.

Section 11. ASSISTANT VICE PRESIDENT. The Assistant Vice
President or Vice Presidents of the Corporation shall have such
authority and perform such duties as may be assigned to them by the
Board of Directors, the Executive Committee, or the President of the
Corporation.

Section 12. ASSISTANT SECRETARIES AND ASSISTANT TREASURERS. The
Assistant Secretary or Secretaries and the Assistant Treasurer or
Treasurers shall perform the duties of the Secretary and of the
Treasurer respectively, in the absence of those Officers and shall have
such further powers and perform such other duties as may be assigned to
them respectively by the Board of Directors or the Executive Committee
or by the President.

Section 13. SALARIES. The salaries of the Officers shall be
fixed from time to time by the Board of Directors. No Officer shall be
prevented from receiving such salary by reason of the fact that he is
also a Director of the Corporation.

ARTICLE V

SHARES AND THEIR TRANSFER

Section 1. CERTIFICATES. All certificates of stock shall be
signed by the President or any Vice President and by the Treasurer or
Secretary or any Assistant Treasurer or Assistant Secretary or any
Assistant Treasurer or Assistant Secretary and seal with the Seal of the
Corporation. The signatures may be either manual or facsimile
signatures and the Seal may be either manual or facsimile signatures and
the Seal may be facsimile or any other form of Seal. Certificates for
shares for which the Corporation has appointed an independent Transfer
Agent and Registrar shall not be valid unless countersigned by such
Transfer Agent and registered by such Registrar. In case any Officer
who has signed any certificate ceases to be an Officer of the
Corporation before the certificate is issued, the certificate may
nevertheless 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
issuance. Stock certificates shall be in such form not inconsistent
with law or the Charter or these By-Laws as may be determined by the
Board of Directors.

Section 2. TRANSFER OF SHARES. Shares of stock shall be
transferable on the books of the Corporation by the holder thereof in
person or by duly authorized attorney upon surrender of the certificate
representing the shares to be transferred properly endorsed.

Section 3. CLOSING OF TRANSFER BOOKS AND FIXING RECORD DATE.
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 Stockholder or Stockholder to receive payment of any
dividend. Such date shall in any case not be more than 40 days and in
the case of a Meeting of Stockholders not less than 10 days prior to the
date on which the particular action requiring such determination of
Stockholders is to be taken. In lieu of fixing a record date the Board
of Directors may provide that the stock transfer books of the
Corporation shall be closed for a stated period not to exceed in any
case 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.

Section 4. LOST, DESTROYED OR MUTILATED CERTIFICATES. In
case any certificate of stock is lost, mutilated or destroyed the Board
of Directors may issue a new certificate in place there of upon
indemnity to the Corporation against loss and upon such other terms and
conditions as the Board may deem advisable.

Section 5. TRANSFER AGENT AND REGISTRAR: REGULATIONS. The
Board of Directors shall have power and authority to make all such rules
and regulations as they may deem expedient concerning the issuance,
transfer registration of certificates of stock and may appoint a
Transfer Agent and/or Registrar of certificates of stock, and may
require all such stock certificates to bear the signature of such
Transfer Agent and/or such Registrar.

ARTICLE VI

AGREEMENTS, CHECKS, DRAFTS, ENDORSEMENTS, ECT.

Section 1. AGREEMENTS, ECT. The Board of Directors or the
Executive Committee may authorize any Officer or Officers, or Agent or
Agents of the Corporation to enter into any Agreement or execute and
deliver any instrument in the name of and on behalf of the Corporation,
and such authority may be general or confined to specific instances;
and, unless so authorized by the Board of Directors or by the Executive
Committee or by these By-Laws, no Officer, Agent or Employee shall have
any power or authority to bind the Corporation by any Agreement or
engagement or to pledge its credit or to render it liable pecuniarily
for any purpose or to any amount.

Section 2. CHECKS, DRAFTS, ECT. All checks, drafts or orders
for the payments of money, notes and other evidences of indebtedness
shall be signed by such Officer of Officers, Employee or Employees, or
Agent or Agents as shall be from time to time designated by the Board of
Directors or the Executive Committee, or as may be specified in or
pursuant to the agreement between the Corporation and the Bank or Trust
Company appointed as custodian, pursuant to the provisions of the
Charter of the Corporation.

Section 3. ENDORSEMENTS, ASSIGNMENTS AND TRANSFER OF SECURITIES.
All endorsements, assignments, stock powers or other instruments of
transfer of securities standing in the name of the Corporation or its
nominee or directions for the transfer of securities belonging to the
Corporation shall be made by such Officer or Officers, Employee or
Employees, or Agent or Agents as may be authorized by the Board of
Directors or the Executive Committee.

Section 4. EVIDENCE OF AUTHORITY. Anyone dealing with the
Corporation shall be fully justified in relying on a copy of a
resolution of the Board of Directors or of any Committee thereof
empowered to act in the premises which is certified as true by the
Secretary or an Assistant Secretary under the seal of the Corporation.

ARTICLE VII

BOOKS AND RECORDS

Section 1. LOCATION. The books and records of the Corporation,
including the stock ledger or ledgers, may be kept in or outside the
State of Maryland at such office or agency of the Corporation as may be
from time to time determined by the Board of Directors.

ARTICLE VIII

MISCELLANEOUS

Section 1. SEAL. The Seal of the Corporation shall be a disk
inscribed with the words - M. F. F. I .U. S. G. S. Y. A. L.
6% T. M. A. U. S. T. B., Inc.
Maryland - 1969

Section 2. FISCAL YEAR. The Fiscal year of the Corporation
shall end on the last day of June in each year.

Section 3. WAIVER OF NOTICE. Whenever under the provisions of
these By-Laws or of any law, the Stockholders or Directors of Members of
the Executive Committee or other Committee are authorized to hold any
meeting after notice or after the lapse of any prescribed period of
time, such meeting may be held without notice signed by every person
entitled to notice, or if every person entitled to notice shall be
present at such meeting.

ARTICLE IX

AMENDMENTS

Section 1. The Board of Directors shall have the power, at any
Regular or Special Meeting, if notice thereof be included in the notice
of such Special Meeting, to alter, amend or repeal any By-Laws of the
Corporation and to make new By-Laws.

Section 2. The Stockholders shall have the power, at any Annual
Meeting or at any Special Meeting if notice thereof be included in the
notice of such Special Meeting, to alter, amend or repeal any By-Laws of
the Corporation or to make new By-Laws.

Exhibit 2 (ii) under Form N-1A
Exhibit 3 (b)(i) under Item
601/Reg.S/K

MUTUAL FUND FOR INVESTING IN U.S. GOVERNMENT SECURITIES, INC.

AMENDMENT TO BY-LAWS

(Effective August 20, 1969)

ARTICLE VIII

MISCELLANEOUS

- - - - - - -

"Section 1. SEAL. The Seal of the Corporation shall be a
disk inscribed with the words - M.F.F.I.I.U.S.G.S.Inc.
Maryland - 1969

Exhibit 2 (iii) under Form N-
1A
Exbibit 3(b) (ii) under Item
601/Reg.S/K

Exhibit 2(c)

MUTUAL FUND FOR INVESTING IN
U.S. GOVERNMENT SECURITIES, INC.

AMENDMENT TO BY-LAWS
(Effective September 30, 1971)

_____________

ARTICLE VIII

MISCELLANEOUS

Section 1. SEAL. The Seal of the Corporation shall be a disk
inscribed with the words - FUND FOR U.S. GOVERNMENT SECURITIES, INC.
Maryland - 1969.

Exhibit 6 (i) under Rule N1-A
Exhibit 10(i) under Item 601/Reg.S/K
Exhibit D
to the
Distributor's Contract

FUND FOR U.S. GOVERNMENT SECURITIES, INC.

Class B Shares

The following provisions are hereby incorporated and made part of
the Distributor's Contract dated the 1st day of March, 1993, between
Fund for U.S. Government Securities, Inc. and Federated Securities Corp.
with respect to Classes of the Funds set forth above.

1. The Corporation hereby appoints FSC to engage in activities
principally intended to result in the sale of shares of the above-listed
Classes ("Shares"). Pursuant to this appointment, FSC is authorized to
select a group of brokers ("Brokers") to sell Shares at the current
offering price thereof as described and set forth in the respective
prospectuses of the Corporation, and to render administrative support
services to the Corporation and its shareholders. In addition, FSC is
authorized to select a group of administrators ("Administrators") to
render administrative support services to the Corporation and its
shareholders.

2. Administrative support services may include, but are not
limited to, the following functions: 1) account openings: the Broker
or Administrator communicates account openings via computer terminals
located on the Broker's or Administrator's premises; 2) account
closings: the Broker or Administrator communicates account closings via
computer terminals; 3) enter purchase transactions: purchase
transactions are entered through the Broker's or Administrator's own
personal computer or through the use of a toll-free telephone number; 4)
enter redemption transactions: Broker or Administrator enters
redemption transactions in the same manner as purchases; 5) account
maintenance: Broker or Administrator provides or arranges to provide
accounting support for all transactions. Broker or Administrator also
wires funds and receives funds for Corporation share purchases and
redemptions, confirms and reconciles all transactions, reviews the
activity in the Corporation's accounts, and provides training and
supervision of its personnel; 6) interest posting: Broker or
Administrator posts and reinvests dividends to the Corporation's
accounts; 7) prospectus and shareholder reports: Broker or
Administrator maintains and distributes current copies of prospectuses
and shareholder reports; 8) advertisements: the Broker or Administrator
continuously advertises the availability of its services and products;
9) customer lists: the Broker or Administrator continuously provides
names of potential customers; 10) design services: the Broker or
Administrator continuously designs material to send to customers and
develops methods of making such materials accessible to customers; and
11) consultation services: the Broker or Administrator continuously
provides information about the product needs of customers.

3. During the term of this Agreement, the Corporation will pay
FSC for services pursuant to this Agreement, a monthly fee computed at
the annual rate of .75 of 1% of the average aggregate net asset value
of the shares of the Class B Shares held during the month. For the
month in which this Agreement becomes effective or terminates, there
shall be an appropriate proration of any fee payable on the basis of the
number of days that the Agreement is in effect during the month.

4. FSC may from time-to-time and for such periods as it deems
appropriate reduce its compensation to the extent any Classes' expenses
exceed such lower expense limitation as FSC may, by notice to the
Corporation, voluntarily declare to be effective.

5. FSC will enter into separate written agreements with various
firms to provide certain of the services set forth in Paragraph 1
herein. FSC, in its sole discretion, may pay Brokers and Administrators
a periodic fee in respect of Shares owned from time to time by their
clients or customers. The schedules of such fees and the basis upon
which such fees will be paid shall be determined from time to time by
FSC in its sole discretion.

6. FSC will prepare reports to the Board of Directors of the
Corporation on a quarterly basis showing amounts expended hereunder
including amounts paid to Brokers and Administrators and the purpose for
such payments.

In consideration of the mutual covenants set forth in the
Distributor's Contract dated March 1, 1993, between Fund for U.S.
Government Securities, Inc. and Federated Securities Corp., Fund for
U.S. Government Securities, Inc. executes and delivers this Exhibit on
behalf of the Funds, and with respect to the separate Classes of Shares
thereof, first set forth in this Exhibit.

Witness the due execution hereof this 1st day of June, 1994.

ATTEST: FUND FOR U.S. GOVERNMENT
SECURITIES, INC.

/s/John W. McGonigle By: /s/ J. Christopher Donahue
Secretary President
(SEAL)

ATTEST: FEDERATED SECURITIES CORP.

/s/ S. Elliott Cohan By: /s/ John A. Staley
Secretary Executive Vice President
(SEAL)

Exhibit 8 under Form N-1A
Exhibit 10 under Item 601/Reg.S-K

CUSTODIAN
CONTRACT
Between
FEDERATED INVESTMENT COMPANIES
and
STATE STREET BANK AND TRUST COMPANY
and
FEDERATED SERVICES COMPANY

TABLE OF CONTENTS
Page
1. Employment of Custodian and Property to be Held by It 1
2. Duties of the Custodian With Respect to Property of the
Funds Held by the Custodian 2
2.1 Holding Securities 2
2.2 Delivery of Securities 2
2.3 Registration of Securities 5
2.4 Bank Accounts 6
2.5 Payments for Shares 7
2.6 Availability of Federal Funds 7
2.7 Collection of Income 7
2.8 Payment of Fund Moneys 8
2.9 Liability for Payment in Advance of Receipt of
Securities Purchased. 9
2.10 Payments for Repurchases or Redemptions of Shares of a
Fund 9
2.11 Appointment of Agents 10
2.12 Deposit of Fund Assets in Securities System 10
2.13 Segregated Account 12
2.14 Joint Repurchase Agreements 13
2.15 Ownership Certificates for Tax Purposes 13
2.16 Proxies 13
2.17 Communications Relating to Fund Portfolio Securities 13
2.18 Proper Instructions 14
2.19 Actions Permitted Without Express Authority 14
2.20 Evidence of Authority 15
2.21 Notice to Trust by Custodian Regarding Cash Movement. 15
3. Duties of Custodian With Respect to the Books of Account and
Calculation of Net Asset Value and Net Income 15
4. Records 16
5. Opinion of Funds' Independent Public Accountants/Auditors 16
6. Reports to Trust by Independent Public Accountants/Auditors 17
7. Compensation of Custodian 17
8. Responsibility of Custodian 17
9. Effective Period, Termination and Amendment 19
10. Successor Custodian 20
11. Interpretive and Additional Provisions 21
12. Massachusetts Law to Apply 22
13. Notices 22
14. Counterparts 22
15. Limitations of Liability 22

CUSTODIAN CONTRACT

This Contract between those INVESTMENT COMPANIES listed on Exhibit 1, as
it may be amended from time to time, (the "Trust"), which may be
Massachusetts business trusts or Maryland corporations or have such
other form of organization as may be indicated, on behalf of the
portfolios (hereinafter collectively called the "Funds" and individually
referred to as a "Fund") of the Trust, having its principal place of
business at Federated Investors Tower, Pittsburgh, Pennsylvania, 15222-
3779, and STATE STREET BANK AND TRUST COMPANY, a Massachusetts trust
company, having its principal place of business at 225 Franklin Street,
Boston, Massachusetts, 02110, hereinafter called the "Custodian", and
FEDERATED SERVICES COMPANY, a Delaware business trust company, having
its principal place of business at Federated Investors Tower,
Pittsburgh, Pennsylvania, 15222-3779, hereinafter called ("Company").

WITNESSETH: That in consideration of the mutual covenants and
agreements hereinafter contained, the parties hereto agree as follows:
1. Employment of Custodian and Property to be Held by It
The Trust hereby employs the Custodian as the custodian of the
assets of each of the Funds of the Trust. Except as otherwise
expressly provided herein, the securities and other assets of each
of the Funds shall be segregated from the assets of each of the
other Funds and from all other persons and entities. The Trust
will deliver to the Custodian all securities and cash owned by the
Funds and all payments of income, payments of principal or capital
distributions received by them with respect to all securities
owned by the Funds from time to time, and the cash consideration
received by them for shares ("Shares") of beneficial
interest/capital stock of the Funds as may be issued or sold from
time to time. The Custodian shall not be responsible for any
property of the Funds held or received by the Funds and not
delivered to the Custodian.
Upon receipt of "Proper Instructions" (within the meaning of
Section 2.18), the Custodian shall from time to time employ one or
more sub-custodians upon the terms specified in the Proper
Instructions, provided that the Custodian shall have no more or
less responsibility or liability to the Trust or any of the Funds
on account of any actions or omissions of any sub-custodian so
employed than any such sub-custodian has to the Custodian.
2. Duties of the Custodian With Respect to Property of the Funds Held
by the Custodian
2.1 Holding Securities. The Custodian shall hold and physically
segregate for the account of each Fund all non-cash
property, including all securities owned by each Fund, other
than securities which are maintained pursuant to Section
2.12 in a clearing agency which acts as a securities
depository or in a book-entry system authorized by the U.S.
Department of the Treasury, collectively referred to herein
as "Securities System", or securities which are subject to a
joint repurchase agreement with affiliated funds pursuant to
Section 2.14. The Custodian shall maintain records of all
receipts, deliveries and locations of such securities,
together with a current inventory thereof, and shall conduct
periodic physical inspections of certificates representing
stocks, bonds and other securities held by it under this
Contract in such manner as the Custodian shall determine
from time to time to be advisable in order to verify the
accuracy of such inventory. With respect to securities held
by any agent appointed pursuant to Section 2.11 hereof, and
with respect to securities held by any sub-custodian
appointed pursuant to Section 1 hereof, the Custodian may
rely upon certificates from such agent as to the holdings of
such agent and from such sub-custodian as to the holdings of
such sub-custodian, it being understood that such reliance
in no way relieves the Custodian of its responsibilities
under this Contract. The Custodian will promptly report to
the Trust the results of such inspections, indicating any
shortages or discrepancies uncovered thereby, and take
appropriate action to remedy any such shortages or
discrepancies.
2.2 Delivery of Securities. The Custodian shall release and
deliver securities owned by a Fund held by the Custodian or
in a Securities System account of the Custodian only upon
receipt of Proper Instructions, which may be continuing
instructions when deemed appropriate by the parties, and
only in the following cases:
(1) Upon sale of such securities for the account of a Fund
and receipt of payment therefor;
(2) Upon the receipt of payment in connection with any
repurchase agreement related to such securities entered
into by the Trust;
(3) In the case of a sale effected through a Securities
System, in accordance with the provisions of Section
2.12 hereof;
(4) To the depository agent in connection with tender or
other similar offers for portfolio securities of a
Fund, in accordance with the provisions of Section 2.17
hereof;
(5) To the issuer thereof or its agent when such securities
are called, redeemed, retired or otherwise become
payable; provided that, in any such case, the cash or
other consideration is to be delivered to the
Custodian;
(6) To the issuer thereof, or its agent, for transfer into
the name of a Fund or into the name of any nominee or
nominees of the Custodian or into the name or nominee
name of any agent appointed pursuant to Section 2.11 or
into the name or nominee name of any sub-custodian
appointed pursuant to Section 1; or for exchange for a
different number of bonds, certificates or other
evidence representing the same aggregate face amount or
number of units; provided that, in any such case, the
new securities are to be delivered to the Custodian;
(7) Upon the sale of such securities for the account of a
Fund, to the broker or its clearing agent, against a
receipt, for examination in accordance with "street
delivery custom"; provided that in any such case, the
Custodian shall have no responsibility or liability for
any loss arising from the delivery of such securities
prior to receiving payment for such securities except
as may arise from the Custodian's own failure to act in
accordance with the standard of reasonable care or any
higher standard of care imposed upon the Custodian by
any applicable law or regulation if such above-stated
standard of reasonable care were not part of this
Contract;
(8) For exchange or conversion pursuant to any plan of
merger, consolidation, recapitalization, reorganization
or readjustment of the securities of the issuer of such
securities, or pursuant to provisions for conversion
contained in such securities, or pursuant to any
deposit agreement; provided that, in any such case, the
new securities and cash, if any, are to be delivered to
the Custodian;
(9) In the case of warrants, rights or similar securities,
the surrender thereof in the exercise of such warrants,
rights or similar securities or the surrender of
interim receipts or temporary securities for definitive
securities; provided that, in any such case, the new
securities and cash, if any, are to be delivered to the
Custodian;
(10)For delivery in connection with any loans of portfolio
securities of a Fund, but only against receipt of
adequate collateral in the form of (a) cash, in an
amount specified by the Trust, (b) certificated
securities of a description specified by the Trust,
registered in the name of the Fund or in the name of a
nominee of the Custodian referred to in Section 2.3
hereof or in proper form for transfer, or (c)
securities of a description specified by the Trust,
transferred through a Securities System in accordance
with Section 2.12 hereof;
(11)For delivery as security in connection with any
borrowings requiring a pledge of assets by a Fund, but
only against receipt of amounts borrowed, except that
in cases where additional collateral is required to
secure a borrowing already made, further securities may
be released for the purpose;
(12)For delivery in accordance with the provisions of any
agreement among the Trust or a Fund, the Custodian and
a broker-dealer registered under the Securities
Exchange Act of 1934, as amended, (the "Exchange Act")
and a member of The National Association of Securities
Dealers, Inc. ("NASD"), relating to compliance with the
rules of The Options Clearing Corporation and of any
registered national securities exchange, or of any
similar organization or organizations, regarding escrow
or other arrangements in connection with transactions
for a Fund;
(13)For delivery in accordance with the provisions of any
agreement among the Trust or a Fund, the Custodian, and
a Futures Commission Merchant registered under the
Commodity Exchange Act, relating to compliance with the
rules of the Commodity Futures Trading Commission
and/or any Contract Market, or any similar organization
or organizations, regarding account deposits in
connection with transaction for a Fund;
(14)Upon receipt of instructions from the transfer agent
("Transfer Agent") for a Fund, for delivery to such
Transfer Agent or to the holders of shares in
connection with distributions in kind, in satisfaction
of requests by holders of Shares for repurchase or
redemption; and
(15)For any other proper corporate purpose, but only upon
receipt of, in addition to Proper Instructions, a
certified copy of a resolution of the Executive
Committee of the Trust on behalf of a Fund signed by an
officer of the Trust and certified by its Secretary or
an Assistant Secretary, specifying the securities to be
delivered, setting forth the purpose for which such
delivery is to be made, declaring such purpose to be a
proper corporate purpose, and naming the person or
persons to whom delivery of such securities shall be
made.
2.3 Registration of Securities. Securities held by the
Custodian (other than bearer securities) shall be registered
in the name of a particular Fund or in the name of any
nominee of the Fund or of any nominee of the Custodian which
nominee shall be assigned exclusively to the Fund, unless
the Trust has authorized in writing the appointment of a
nominee to be used in common with other registered
investment companies affiliated with the Fund, or in the
name or nominee name of any agent appointed pursuant to
Section 2.11 or in the name or nominee name of any sub-
custodian appointed pursuant to Section 1. All securities
accepted by the Custodian on behalf of a Fund under the
terms of this Contract shall be in "street name" or other
good delivery form.
2.4 Bank Accounts. The Custodian shall open and maintain a
separate bank account or accounts in the name of each Fund,
subject only to draft or order by the Custodian acting
pursuant to the terms of this Contract, and shall hold in
such account or accounts, subject to the provisions hereof,
all cash received by it from or for the account of each
Fund, other than cash maintained in a joint repurchase
account with other affiliated funds pursuant to Section 2.14
of this Contract or by a particular Fund in a bank account
established and used in accordance with Rule 17f-3 under the
Investment Company Act of 1940, as amended, (the "1940
Act"). Funds held by the Custodian for a Fund may be
deposited by it to its credit as Custodian in the Banking
Department of the Custodian or in such other banks or trust
companies as it may in its discretion deem necessary or
desirable; provided, however, that every such bank or trust
company shall be qualified to act as a custodian under the
1940 Act and that each such bank or trust company and the
funds to be deposited with each such bank or trust company
shall be approved by vote of a majority of the Board of
Trustees/Directors ("Board") of the Trust. Such funds shall
be deposited by the Custodian in its capacity as Custodian
for the Fund and shall be withdrawable by the Custodian only
in that capacity. If requested by the Trust, the Custodian
shall furnish the Trust, not later than twenty (20) days
after the last business day of each month, an internal
reconciliation of the closing balance as of that day in all
accounts described in this section to the balance shown on
the daily cash report for that day rendered to the Trust.
2.5 Payments for Shares. The Custodian shall make such
arrangements with the Transfer Agent of each Fund, as will
enable the Custodian to receive the cash consideration due
to each Fund and will deposit into each Fund's account such
payments as are received from the Transfer Agent. The
Custodian will provide timely notification to the Trust and
the Transfer Agent of any receipt by it of payments for
Shares of the respective Fund.
2.6 Availability of Federal Funds. Upon mutual agreement
between the Trust and the Custodian, the Custodian shall
make federal funds available to the Funds as of specified
times agreed upon from time to time by the Trust and the
Custodian in the amount of checks, clearing house funds, and
other non-federal funds received in payment for Shares of
the Funds which are deposited into the Funds' accounts.
2.7 Collection of Income.
(1) The Custodian shall collect on a timely basis all
income and other payments with respect to registered
securities held hereunder to which each Fund shall be
entitled either by law or pursuant to custom in the
securities business, and shall collect on a timely
basis all income and other payments with respect to
bearer securities if, on the date of payment by the
issuer, such securities are held by the Custodian or
its agent thereof and shall credit such income, as
collected, to each Fund's custodian account. Without
limiting the generality of the foregoing, the Custodian
shall detach and present for payment all coupons and
other income items requiring presentation as and when
they become due and shall collect interest when due on
securities held hereunder. The collection of income
due the Funds on securities loaned pursuant to the
provisions of Section 2.2 (10) shall be the
responsibility of the Trust. The Custodian will have
no duty or responsibility in connection therewith,
other than to provide the Trust with such information
or data as may be necessary to assist the Trust in
arranging for the timely delivery to the Custodian of
the income to which each Fund is properly entitled.
(2) The Custodian shall promptly notify the Trust whenever
income due on securities is not collected in due course
and will provide the Trust with monthly reports of the
status of past due income unless the parties otherwise
agree.
2.8 Payment of Fund Moneys. Upon receipt of Proper
Instructions, which may be continuing instructions when
deemed appropriate by the parties, the Custodian shall pay
out moneys of each Fund in the following cases only:
(1) Upon the purchase of securities, futures contracts or
options on futures contracts for the account of a Fund
but only (a) against the delivery of such securities,
or evidence of title to futures contracts, to the
Custodian (or any bank, banking firm or trust company
doing business in the United States or abroad which is
qualified under the 1940 Act to act as a custodian and
has been designated by the Custodian as its agent for
this purpose) registered in the name of the Fund or in
the name of a nominee of the Custodian referred to in
Section 2.3 hereof or in proper form for transfer, (b)
in the case of a purchase effected through a Securities
System, in accordance with the conditions set forth in
Section 2.12 hereof or (c) in the case of repurchase
agreements entered into between the Trust and any other
party, (i) against delivery of the securities either in
certificate form or through an entry crediting the
Custodian's account at the Federal Reserve Bank with
such securities or (ii) against delivery of the receipt
evidencing purchase for the account of the Fund of
securities owned by the Custodian along with written
evidence of the agreement by the Custodian to
repurchase such securities from the Fund;
(2) In connection with conversion, exchange or surrender of
securities owned by a Fund as set forth in Section 2.2
hereof;
(3) For the redemption or repurchase of Shares of a Fund
issued by the Trust as set forth in Section 2.10
hereof;
(4) For the payment of any expense or liability incurred by
a Fund, including but not limited to the following
payments for the account of the Fund: interest; taxes;
management, accounting, transfer agent and legal fees;
and operating expenses of the Fund, whether or not such
expenses are to be in whole or part capitalized or
treated as deferred expenses;
(5) For the payment of any dividends on Shares of a Fund
declared pursuant to the governing documents of the
Trust;
(6) For payment of the amount of dividends received in
respect of securities sold short;
(7) For any other proper purpose, but only upon receipt of,
in addition to Proper Instructions, a certified copy of
a resolution of the Executive Committee of the Trust on
behalf of a Fund signed by an officer of the Trust and
certified by its Secretary or an Assistant Secretary,
specifying the amount of such payment, setting forth
the purpose for which such payment is to be made,
declaring such purpose to be a proper purpose, and
naming the person or persons to whom such payment is to
be made.
2.9 Liability for Payment in Advance of Receipt of Securities
Purchased. In any and every case where payment for purchase
of securities for the account of a Fund is made by the
Custodian in advance of receipt of the securities purchased,
in the absence of specific written instructions from the
Trust to so pay in advance, the Custodian shall be
absolutely liable to the Fund for such securities to the
same extent as if the securities had been received by the
Custodian.
2.10Payments for Repurchases or Redemptions of Shares of a Fund.
From such funds as may be available for the purpose of
repurchasing or redeeming Shares of a Fund, but subject to
the limitations of the Declaration of Trust/Articles of
Incorporation and any applicable votes of the Board of the
Trust pursuant thereto, the Custodian shall, upon receipt of
instructions from the Transfer Agent, make funds available
for payment to holders of shares of such Fund who have
delivered to the Transfer Agent a request for redemption or
repurchase of their shares including without limitation
through bank drafts, automated clearinghouse facilities, or
by other means. In connection with the redemption or
repurchase of Shares of the Funds, the Custodian is
authorized upon receipt of instructions from the Transfer
Agent to wire funds to or through a commercial bank
designated by the redeeming shareholders.
2.11Appointment of Agents. The Custodian may at any time or
times in its discretion appoint (and may at any time remove)
any other bank or trust company which is itself qualified
under the 1940 Act and any applicable state law or
regulation, to act as a custodian, as its agent to carry out
such of the provisions of this Section 2 as the Custodian
may from time to time direct; provided, however, that the
appointment of any agent shall not relieve the Custodian of
its responsibilities or liabilities hereunder.
2.12Deposit of Fund Assets in Securities System. The Custodian
may deposit and/or maintain securities owned by the Funds in
a clearing agency registered with the Securities and
Exchange Commission ("SEC") under Section 17A of the
Exchange Act, which acts as a securities depository, or in
the book-entry system authorized by the U.S. Department of
the Treasury and certain federal agencies, collectively
referred to herein as "Securities System" in accordance with
applicable Federal Reserve Board and SEC rules and
regulations, if any, and subject to the following
provisions:
(1) The Custodian may keep securities of each Fund in a
Securities System provided that such securities are
represented in an account ("Account") of the Custodian
in the Securities System which shall not include any
assets of the Custodian other than assets held as a
fiduciary, custodian or otherwise for customers;
(2) The records of the Custodian with respect to securities
of the Funds which are maintained in a Securities
System shall identify by book-entry those securities
belonging to each Fund;
(3) The Custodian shall pay for securities purchased for
the account of each Fund upon (i) receipt of advice
from the Securities System that such securities have
been transferred to the Account, and (ii) the making of
an entry on the records of the Custodian to reflect
such payment and transfer for the account of the Fund.
The Custodian shall transfer securities sold for the
account of a Fund upon (i) receipt of advice from the
Securities System that payment for such securities has
been transferred to the Account, and (ii) the making of
an entry on the records of the Custodian to reflect
such transfer and payment for the account of the Fund.
Copies of all advices from the Securities System of
transfers of securities for the account of a Fund shall
identify the Fund, be maintained for the Fund by the
Custodian and be provided to the Trust at its request.
Upon request, the Custodian shall furnish the Trust
confirmation of each transfer to or from the account of
a Fund in the form of a written advice or notice and
shall furnish to the Trust copies of daily transaction
sheets reflecting each day's transactions in the
Securities System for the account of a Fund.
(4) The Custodian shall provide the Trust with any report
obtained by the Custodian on the Securities System's
accounting system, internal accounting control and
procedures for safeguarding securities deposited in the
Securities System;
(5) The Custodian shall have received the initial
certificate, required by Section 9 hereof;
(6) Anything to the contrary in this Contract
notwithstanding, the Custodian shall be liable to the
Trust for any loss or damage to a Fund resulting from
use of the Securities System by reason of any
negligence, misfeasance or misconduct of the Custodian
or any of its agents or of any of its or their
employees or from failure of the Custodian or any such
agent to enforce effectively such rights as it may have
against the Securities System; at the election of the
Trust, it shall be entitled to be subrogated to the
rights of the Custodian with respect to any claim
against the Securities System or any other person which
the Custodian may have as a consequence of any such
loss or damage if and to the extent that a Fund has not
been made whole for any such loss or damage.
(7) The authorization contained in this Section 2.12 shall
not relieve the Custodian from using reasonable care
and diligence in making use of any Securities System.
2.13Segregated Account. The Custodian shall upon receipt of
Proper Instructions establish and maintain a segregated
account or accounts for and on behalf of each Fund, into
which account or accounts may be transferred cash and/or
securities, including securities maintained in an account by
the Custodian pursuant to Section 2.12 hereof, (i) in
accordance with the provisions of any agreement among the
Trust, the Custodian and a broker-dealer registered under
the Exchange Act and a member of the NASD (or any futures
commission merchant registered under the Commodity Exchange
Act), relating to compliance with the rules of The Options
Clearing Corporation and of any registered national
securities exchange (or the Commodity Futures Trading
Commission or any registered contract market), or of any
similar organization or organizations, regarding escrow or
other arrangements in connection with transactions for a
Fund, (ii) for purpose of segregating cash or government
securities in connection with options purchased, sold or
written for a Fund or commodity futures contracts or options
thereon purchased or sold for a Fund, (iii) for the purpose
of compliance by the Trust or a Fund with the procedures
required by any release or releases of the SEC relating to
the maintenance of segregated accounts by registered
investment companies and (iv) for other proper corporate
purposes, but only, in the case of clause (iv), upon receipt
of, in addition to Proper Instructions, a certified copy of
a resolution of the Board or of the Executive Committee
signed by an officer of the Trust and certified by the
Secretary or an Assistant Secretary, setting forth the
purpose or purposes of such segregated account and declaring
such purposes to be proper corporate purposes.
2.14Joint Repurchase Agreements. Upon the receipt of Proper
Instructions, the Custodian shall deposit and/or maintain
any assets of a Fund and any affiliated funds which are
subject to joint repurchase transactions in an account
established solely for such transactions for the Fund and
its affiliated funds. For purposes of this Section 2.14,
"affiliated funds" shall include all investment companies
and their portfolios for which subsidiaries or affiliates of
Federated Investors serve as investment advisers,
distributors or administrators in accordance with applicable
exemptive orders from the SEC. The requirements of
segregation set forth in Section 2.1 shall be deemed to be
waived with respect to such assets.
2.15Ownership Certificates for Tax Purposes. The Custodian
shall execute ownership and other certificates and
affidavits for all federal and state tax purposes in
connection with receipt of income or other payments with
respect to securities of a Fund held by it and in connection
with transfers of securities.
2.16Proxies. The Custodian shall, with respect to the
securities held hereunder, cause to be promptly executed by
the registered holder of such securities, if the securities
are registered otherwise than in the name of a Fund or a
nominee of a Fund, all proxies, without indication of the
manner in which such proxies are to be voted, and shall
promptly deliver to the Trust such proxies, all proxy
soliciting materials and all notices relating to such
securities.
2.17Communications Relating to Fund Portfolio Securities. The
Custodian shall transmit promptly to the Trust all written
information (including, without limitation, pendency of
calls and maturities of securities and expirations of rights
in connection therewith and notices of exercise of call and
put options written by the Fund and the maturity of futures
contracts purchased or sold by the Fund) received by the
Custodian from issuers of the securities being held for the
Fund. With respect to tender or exchange offers, the
Custodian shall transmit promptly to the Trust all written
information received by the Custodian from issuers of the
securities whose tender or exchange is sought and from the
party (or his agents) making the tender or exchange offer.
If the Trust desires to take action with respect to any
tender offer, exchange offer or any other similar
transaction, the Trust shall notify the Custodian in writing
at least three business days prior to the date on which the
Custodian is to take such action. However, the Custodian
shall nevertheless exercise its best efforts to take such
action in the event that notification is received three
business days or less prior to the date on which action is
required.
2.18Proper Instructions. Proper Instructions as used throughout
this Section 2 means a writing signed or initialed by one or
more person or persons as the Board shall have from time to
time authorized. Each such writing shall set forth the
specific transaction or type of transaction involved. Oral
instructions will be deemed to be Proper Instructions if (a)
the Custodian reasonably believes them to have been given by
a person previously authorized in Proper Instructions to
give such instructions with respect to the transaction
involved, and (b) the Trust promptly causes such oral
instructions to be confirmed in writing. Upon receipt of a
certificate of the Secretary or an Assistant Secretary as to
the authorization by the Board of the Trust accompanied by a
detailed description of procedures approved by the Board,
Proper Instructions may include communications effected
directly between electro-mechanical or electronic devices
provided that the Board and the Custodian are satisfied that
such procedures afford adequate safeguards for a Fund's
assets.
2.19Actions Permitted Without Express Authority. The Custodian
may in its discretion, without express authority from the
Trust:
(1) make payments to itself or others for minor expenses of
handling securities or other similar items relating to
its duties under this Contract, provided that all such
payments shall be accounted for to the Trust in such
form that it may be allocated to the affected Fund;
(2) surrender securities in temporary form for securities
in definitive form;
(3) endorse for collection, in the name of a Fund, checks,
drafts and other negotiable instruments; and
(4) in general, attend to all non-discretionary details in
connection with the sale, exchange, substitution,
purchase, transfer and other dealings with the
securities and property of each Fund except as
otherwise directed by the Trust.
2.20Evidence of Authority. The Custodian shall be protected in
acting upon any instructions, notice, request, consent,
certificate or other instrument or paper reasonably believed
by it to be genuine and to have been properly executed on
behalf of a Fund. The Custodian may receive and accept a
certified copy of a vote of the Board of the Trust as
conclusive evidence (a) of the authority of any person to
act in accordance with such vote or (b) of any determination
of or any action by the Board pursuant to the Declaration of
Trust/Articles of Incorporation as described in such vote,
and such vote may be considered as in full force and effect
until receipt by the Custodian of written notice to the
contrary.
2.21Notice to Trust by Custodian Regarding Cash Movement. The
Custodian will provide timely notification to the Trust of
any receipt of cash, income or payments to the Trust and the
release of cash or payment by the Trust.
3. Duties of Custodian With Respect to the Books of Account and
Calculation of Net Asset Value and Net Income.
The Custodian shall cooperate with and supply necessary
information to the entity or entities appointed by the Board of
the Trust to keep the books of account of each Fund and/or compute
the net asset value per share of the outstanding Shares of each
Fund or, if directed in writing to do so by the Trust, shall
itself keep such books of account and/or compute such net asset
value per share. If so directed, the Custodian shall also
calculate daily the net income of a Fund as described in the
Fund's currently effective prospectus and Statement of Additional
Information ("Prospectus") and shall advise the Trust and the
Transfer Agent daily of the total amounts of such net income and,
if instructed in writing by an officer of the Trust to do so,
shall advise the Transfer Agent periodically of the division of
such net income among its various components. The calculations of
the net asset value per share and the daily income of a Fund shall
be made at the time or times described from time to time in the
Fund's currently effective Prospectus.
4. Records.
The Custodian shall create and maintain all records relating to
its activities and obligations under this Contract in such manner
as will meet the obligations of the Trust and the Funds under the
1940 Act, with particular attention to Section 31 thereof and
Rules 31a-1 and 31a-2 thereunder, and specifically including
identified cost records used for tax purposes. All such records
shall be the property of the Trust and shall at all times during
the regular business hours of the Custodian be open for inspection
by duly authorized officers, employees or agents of the Trust and
employees and agents of the SEC. In the event of termination of
this Contract, the Custodian will deliver all such records to the
Trust, to a successor Custodian, or to such other person as the
Trust may direct. The Custodian shall supply daily to the Trust a
tabulation of securities owned by a Fund and held by the Custodian
and shall, when requested to do so by the Trust and for such
compensation as shall be agreed upon between the Trust and the
Custodian, include certificate numbers in such tabulations.
5. Opinion of Funds' Independent Public Accountants/Auditors.
The Custodian shall take all reasonable action, as the Trust may
from time to time request, to obtain from year to year favorable
opinions from each Fund's independent public accountants/auditors
with respect to its activities hereunder in connection with the
preparation of the Fund's registration statement, periodic
reports, or any other reports to the SEC and with respect to any
other requirements of such Commission.
6. Reports to Trust by Independent Public Accountants/Auditors.
The Custodian shall provide the Trust, at such times as the Trust
may reasonably require, with reports by independent public
accountants/auditors for each Fund on the accounting system,
internal accounting control and procedures for safeguarding
securities, futures contracts and options on futures contracts,
including securities deposited and/or maintained in a Securities
System, relating to the services provided by the Custodian for the
Fund under this Contract; such reports shall be of sufficient
scope and in sufficient detail, as may reasonably be required by
the Trust, to provide reasonable assurance that any material
inadequacies would be disclosed by such examination and, if there
are no such inadequacies, the reports shall so state.
7. Compensation of Custodian.
The Custodian shall be entitled to reasonable compensation for its
services and expenses as Custodian, as agreed upon from time to
time between Company and the Custodian.
8. Responsibility of Custodian.
The Custodian shall be held to a standard of reasonable care in
carrying out the provisions of this Contract; provided, however,
that the Custodian shall be held to any higher standard of care
which would be imposed upon the Custodian by any applicable law or
regulation if such above stated standard of reasonable care was
not part of this Contract. The Custodian shall be entitled to
rely on and may act upon advice of counsel (who may be counsel for
the Trust) on all matters, and shall be without liability for any
action reasonably taken or omitted pursuant to such advice,
provided that such action is not in violation of applicable
federal or state laws or regulations, and is in good faith and
without negligence. Subject to the limitations set forth in
Section 15 hereof, the Custodian shall be kept indemnified by the
Trust but only from the assets of the Fund involved in the issue
at hand and be without liability for any action taken or thing
done by it in carrying out the terms and provisions of this
Contract in accordance with the above standards.
In order that the indemnification provisions contained in this
Section 8 shall apply, however, it is understood that if in any
case the Trust may be asked to indemnify or save the Custodian
harmless, the Trust shall be fully and promptly advised of all
pertinent facts concerning the situation in question, and it is
further understood that the Custodian will use all reasonable care
to identify and notify the Trust promptly concerning any situation
which presents or appears likely to present the probability of
such a claim for indemnification. The Trust shall have the option
to defend the Custodian against any claim which may be the subject
of this indemnification, and in the event that the Trust so elects
it will so notify the Custodian and thereupon the Trust shall take
over complete defense of the claim, and the Custodian shall in
such situation initiate no further legal or other expenses for
which it shall seek indemnification under this Section. The
Custodian shall in no case confess any claim or make any
compromise in any case in which the Trust will be asked to
indemnify the Custodian except with the Trust's prior written
consent.
Notwithstanding the foregoing, the responsibility of the Custodian
with respect to redemptions effected by check shall be in
accordance with a separate Agreement entered into between the
Custodian and the Trust.
If the Trust requires the Custodian to take any action with
respect to securities, which action involves the payment of money
or which action may, in the reasonable opinion of the Custodian,
result in the Custodian or its nominee assigned to a Fund being
liable for the payment of money or incurring liability of some
other form, the Custodian may request the Trust, as a prerequisite
to requiring the Custodian to take such action, to provide
indemnity to the Custodian in an amount and form satisfactory to
the Custodian.
Subject to the limitations set forth in Section 15 hereof, the
Trust agrees to indemnify and hold harmless the Custodian and its
nominee from and against all taxes, charges, expenses,
assessments, claims and liabilities (including counsel fees)
(referred to herein as authorized charges) incurred or assessed
against it or its nominee in connection with the performance of
this Contract, except such as may arise from it or its nominee's
own failure to act in accordance with the standard of reasonable
care or any higher standard of care which would be imposed upon
the Custodian by any applicable law or regulation if such above-
stated standard of reasonable care were not part of this Contract.
To secure any authorized charges and any advances of cash or
securities made by the Custodian to or for the benefit of a Fund
for any purpose which results in the Fund incurring an overdraft
at the end of any business day or for extraordinary or emergency
purposes during any business day, the Trust hereby grants to the
Custodian a security interest in and pledges to the Custodian
securities held for the Fund by the Custodian, in an amount not to
exceed 10 percent of the Fund's gross assets, the specific
securities to be designated in writing from time to time by the
Trust or the Fund's investment adviser. Should the Trust fail to
make such designation, or should it instruct the Custodian to make
advances exceeding the percentage amount set forth above and
should the Custodian do so, the Trust hereby agrees that the
Custodian shall have a security interest in all securities or
other property purchased for a Fund with the advances by the
Custodian, which securities or property shall be deemed to be
pledged to the Custodian, and the written instructions of the
Trust instructing their purchase shall be considered the requisite
description and designation of the property so pledged for
purposes of the requirements of the Uniform Commercial Code.
Should the Trust fail to cause a Fund to repay promptly any
authorized charges or advances of cash or securities, subject to
the provision of the second paragraph of this Section 8 regarding
indemnification, the Custodian shall be entitled to use available
cash and to dispose of pledged securities and property as is
necessary to repay any such advances.
9. Effective Period, Termination and Amendment.
This Contract shall become effective as of its execution, shall
continue in full force and effect until terminated as hereinafter
provided, may be amended at any time by mutual agreement of the
parties hereto and may be terminated by either party by an
instrument in writing delivered or mailed, postage prepaid to the
other party, such termination to take effect not sooner than sixty
(60) days after the date of such delivery or mailing; provided,
however that the Custodian shall not act under Section 2.12 hereof
in the absence of receipt of an initial certificate of the
Secretary or an Assistant Secretary that the Board of the Trust
has approved the initial use of a particular Securities System as
required in each case by Rule 17f-4 under the 1940 Act; provided
further, however, that the Trust shall not amend or terminate this
Contract in contravention of any applicable federal or state
regulations, or any provision of the Declaration of Trust/Articles
of Incorporation, and further provided, that the Trust may at any
time by action of its Board (i) substitute another bank or trust
company for the Custodian by giving notice as described above to
the Custodian, or (ii) immediately terminate this Contract in the
event of the appointment of a conservator or receiver for the
Custodian by the appropriate banking regulatory agency or upon the
happening of a like event at the direction of an appropriate
regulatory agency or court of competent jurisdiction.
Upon termination of the Contract, the Trust shall pay to the
Custodian such compensation as may be due as of the date of such
termination and shall likewise reimburse the Custodian for its
costs, expenses and disbursements.
10. Successor Custodian.
If a successor custodian shall be appointed by the Board of the
Trust, the Custodian shall, upon termination, deliver to such
successor custodian at the office of the Custodian, duly endorsed
and in the form for transfer, all securities then held by it
hereunder for each Fund and shall transfer to separate accounts of
the successor custodian all of each Fund's securities held in a
Securities System.
If no such successor custodian shall be appointed, the Custodian
shall, in like manner, upon receipt of a certified copy of a vote
of the Board of the Trust, deliver at the office of the Custodian
and transfer such securities, funds and other properties in
accordance with such vote.
In the event that no written order designating a successor
custodian or certified copy of a vote of the Board shall have been
delivered to the Custodian on or before the date when such
termination shall become effective, then the Custodian shall have
the right to deliver to a bank or trust company, which is a "bank"
as defined in the 1940 Act, (delete "doing business ...
Massachusetts" unless SSBT is the Custodian) doing business in
Boston, Massachusetts, of its own selection, having an aggregate
capital, surplus, and undivided profits, as shown by its last
published report, of not less than $100,000,000, all securities,
funds and other properties held by the Custodian and all
instruments held by the Custodian relative thereto and all other
property held by it under this Contract for each Fund and to
transfer to separate accounts of such successor custodian all of
each Fund's securities held in any Securities System. Thereafter,
such bank or trust company shall be the successor of the Custodian
under this Contract.
In the event that securities, funds and other properties remain in
the possession of the Custodian after the date of termination
hereof owing to failure of the Trust to procure the certified copy
of the vote referred to or of the Board to appoint a successor
custodian, the Custodian shall be entitled to fair compensation
for its services during such period as the Custodian retains
possession of such securities, funds and other properties and the
provisions of this Contract relating to the duties and obligations
of the Custodian shall remain in full force and effect.
11. Interpretive and Additional Provisions.
In connection with the operation of this Contract, the Custodian
and the Trust may from time to time agree on such provisions
interpretive of or in addition to the provisions of this Contract
as may in their joint opinion be consistent with the general tenor
of this Contract. Any such interpretive or additional provisions
shall be in a writing signed by both parties and shall be annexed
hereto, provided that no such interpretive or additional
provisions shall contravene any applicable federal or state
regulations or any provision of the Declaration of Trust/Articles
of Incorporation. No interpretive or additional provisions made
as provided in the preceding sentence shall be deemed to be an
amendment of this Contract.
12. Massachusetts Law to Apply.
This Contract shall be construed and the provisions thereof
interpreted under and in accordance with laws of The Commonwealth
of Massachusetts.
13. Notices.
Except as otherwise specifically provided herein, Notices and
other writings delivered or mailed postage prepaid to the Trust at
Federated Investors Tower, Pittsburgh, Pennsylvania, 15222-3779,
or to the Custodian at address for SSBT only: 225 Franklin
Street, Boston, Massachusetts, 02110, or to such other address as
the Trust or the Custodian may hereafter specify, shall be deemed
to have been properly delivered or given hereunder to the
respective address.
14. Counterparts.
This Contract may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original.
15. Limitations of Liability.
The Custodian is expressly put on notice of the limitation of
liability as set forth in Article XI of the Declaration of Trust
of those Trusts which are business trusts and agrees that the
obligations and liabilities assumed by the Trust and any Fund
pursuant to this Contract, including, without limitation, any
obligation or liability to indemnify the Custodian pursuant to
Section 8 hereof, shall be limited in any case to the relevant
Fund and its assets and that the Custodian shall not seek
satisfaction of any such obligation from the shareholders of the
relevant Fund, from any other Fund or its shareholders or from the
Trustees, Officers, employees or agents of the Trust, or any of
them. In addition, in connection with the discharge and
satisfaction of any claim made by the Custodian against the Trust,
for whatever reasons, involving more than one Fund, the Trust
shall have the exclusive right to determine the appropriate
allocations of liability for any such claim between or among the
Funds.

IN WITNESS WHEREOF, each of the parties has caused this instrument to be
executed in its name and behalf by its duly authorized representative
and its seal to be hereunder affixed effective as of the 1st day of
December, 1994.

ATTEST: INVESTMENT COMPANIES

/s/John G. McGonigle_________ By /s/John G. Donahue_____________
John G. McGonigle John F. Donahue
Secretary Chairman

ATTEST: STATE STREET BANK AND TRUST
COMPANY

/s/ Ed McKenzie______________ By /s/ F. J. Sidoti,
Jr._________________
(Assistant) Secretary Typed Name: Frank J. Sidoti, Jr.
Typed Name: Ed McKenzie Title: Vice President

ATTEST: FEDERATED SERVICES COMPANY

/s/ Jeannette Fisher-Garber______ By /s/ James J. Dolan________________
Jeannette Fisher-Garber James J. Dolan
Secretary President

EXHIBIT 1
<TABLE>
<S> <C>
CONTRACT
DATE INVESTMENT COMPANY

12/01/94 Fund for U.S. Government Securities, Inc.
</TABLE>

Exhibit 9(i) under Form N-1A
Exhibit 10 under Item 601/Reg. S-K

AGREEMENT
for
FUND ACCOUNTING,
SHAREHOLDER RECORDKEEPING,
and
CUSTODY SERVICES PROCUREMENT

AGREEMENT made as of December 1, 1994, by and between those
investment companies listed on Exhibit 1 as may be amended from time
to time, having their principal office and place of business at
Federated Investors Tower, Pittsburgh, PA 15222-3779 (the "Trust"), on
behalf of the portfolios (individually referred to herein as a "Fund"
and collectively as "Funds") of the Trust, and FEDERATED SERVICES
COMPANY, a Delaware business trust, having its principal office and
place of business at Federated Investors Tower, Pittsburgh,
Pennsylvania 15222-3779 (the "Company").
WHEREAS, the Trust is registered as an open-end management
investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"), with authorized and issued shares of capital
stock or beneficial interest ("Shares"); and
WHEREAS, the Trust may desire to retain the Company to provide
certain pricing, accounting and recordkeeping services for each of the
Funds, including any classes of shares issued by any Fund ("Classes")
if so indicated on Exhibit 1, and the Company is willing to furnish
such services; and
WHEREAS, the Trust may desire to appoint the Company as its
transfer agent, dividend disbursing agent if so indicated on Exhibit
1, and agent in connection with certain other activities, and the
Company desires to accept such appointment; and
WHEREAS, the Trust may desire to appoint the Company as its agent
to select, negotiate and subcontract for custodian services from an
approved list of qualified banks if so indicated on Exhibit 1, and the
Company desires to accept such appointment; and
WHEREAS, from time to time the Trust may desire and may instruct
the Company to subcontract for the performance of certain of its
duties and responsibilities hereunder to State Street Bank and Trust
Company or another agent (the "Agent"); and
WHEREAS, the words Trust and Fund may be used interchangeably for
those investment companies consisting of only one portfolio;
NOW THEREFORE, in consideration of the premises and mutual
covenants herein contained, and intending to be legally bound hereby,
the parties hereto agree as follows:
SECTION ONE: Fund Accounting.
Article 1. Appointment.
The Trust hereby appoints the Company to provide certain pricing
and accounting services to the Funds, and/or the Classes, for the
period and on the terms set forth in this Agreement. The Company
accepts such appointment and agrees to furnish the services herein set
forth in return for the compensation as provided in Article 3 of this
Section.
Article 2. The Company's Duties.
Subject to the supervision and control of the Trust's Board of
Trustees or Directors ("Board"), the Company will assist the Trust
with regard to fund accounting for the Trust, and/or the Funds, and/or
the Classes, and in connection therewith undertakes to perform the
following specific services;
A. Value the assets of the Funds using: primarily, market
quotations, including the use of matrix pricing, supplied by
the independent pricing services selected by the Company in
consultation with the adviser, or sources selected by the
adviser, and reviewed by the board; secondarily, if a
designated pricing service does not provide a price for a
security which the Company believes should be available by
market quotation, the Company may obtain a price by calling
brokers designated by the investment adviser of the fund
holding the security, or if the adviser does not supply the
names of such brokers, the Company will attempt on its own
to find brokers to price those securities; thirdly, for
securities for which no market price is available, the
Pricing Committee of the Board will determine a fair value
in good faith. Consistent with Rule 2a-4 of the 40 Act,
estimates may be used where necessary or appropriate. The
Company's obligations with regard to the prices received
from outside pricing services and designated brokers or
other outside sources, is to exercise reasonable care in the
supervision of the pricing agent. The Company is not the
guarantor of the securities prices received from such agents
and the Company is not liable to the Fund for potential
errors in valuing a Fund's assets or calculating the net
asset value per share of such Fund or Class when the
calculations are based upon such prices. All of the above
sources of prices used as described are deemed by the
Company to be authorized sources of security prices. The
Company provides daily to the adviser the securities prices
used in calculating the net asset value of the fund, for its
use in preparing exception reports for those prices on which
the adviser has comment. Further, upon receipt of the
exception reports generated by the adviser, the Company
diligently pursues communication regarding exception reports
with the designated pricing agents.
B. Determine the net asset value per share of each Fund and/or
Class, at the time and in the manner from time to time
determined by the Board and as set forth in the Prospectus
and Statement of Additional Information ("Prospectus") of
each Fund;
C. Calculate the net income of each of the Funds, if any;
D. Calculate capital gains or losses of each of the Funds
resulting from sale or disposition of assets, if any;
E. Maintain the general ledger and other accounts, books and
financial records of the Trust, including for each Fund,
and/or Class, as required under Section 31(a) of the 1940
Act and the Rules thereunder in connection with the services
provided by the Company;
F. Preserve for the periods prescribed by Rule 31a-2 under the
1940 Act the records to be maintained by Rule 31a-1 under
the 1940 Act in connection with the services provided by the
Company. The Company further agrees that all such records it
maintains for the Trust are the property of the Trust and
further agrees to surrender promptly to the Trust such
records upon the Trust's request;
G. At the request of the Trust, prepare various reports or
other financial documents required by federal, state and
other applicable laws and regulations; and
H. Such other similar services as may be reasonably requested
by the Trust.
Article 3. Compensation and Allocation of Expenses.
A. The Funds will compensate the Company for its services
rendered pursuant to Section One of this Agreement in
accordance with the fees agreed upon from time to time
between the parties hereto. Such fees do not include out-of-
pocket disbursements of the Company for which the Funds
shall reimburse the Company upon receipt of a separate
invoice. Out-of-pocket disbursements shall include, but
shall not be limited to, the items agreed upon between the
parties from time to time.
B. The Fund and/or the Class, and not the Company, shall bear
the cost of: custodial expenses; membership dues in the
Investment Company Institute or any similar organization;
transfer agency expenses; investment advisory expenses;
costs of printing and mailing stock certificates,
Prospectuses, reports and notices; administrative expenses;
interest on borrowed money; brokerage commissions; taxes and
fees payable to federal, state and other governmental
agencies; fees of Trustees or Directors of the Trust;
independent auditors expenses; Federated Administrative
Services and/or Federated Administrative Services, Inc.
legal and audit department expenses billed to Federated
Services Company for work performed related to the Trust,
the Funds, or the Classes; law firm expenses; or other
expenses not specified in this Article 3 which may be
properly payable by the Funds and/or classes.
C. The compensation and out-of-pocket expenses shall be accrued
by the Fund and shall be paid to the Company no less
frequently than monthly, and shall be paid daily upon
request of the Company. The Company will maintain detailed
information about the compensation and out-of-pocket
expenses by Fund and Class.
D. Any schedule of compensation agreed to hereunder, as may be
adjusted from time to time, shall be dated and signed by a
duly authorized officer of the Trust and/or the Funds and a
duly authorized officer of the Company.
E. The fee for the period from the effective date of this
Agreement with respect to a Fund or a Class to the end of
the initial month shall be prorated according to the
proportion that such period bears to the full month period.
Upon any termination of this Agreement before the end of any
month, the fee for such period shall be prorated according
to the proportion which such period bears to the full month
period. For purposes of determining fees payable to the
Company, the value of the Fund's net assets shall be
computed at the time and in the manner specified in the
Fund's Prospectus.
F. The Company, in its sole discretion, may from time to time
subcontract to, employ or associate with itself such person
or persons as the Company may believe to be particularly
suited to assist it in performing services under this
Section One. Such person or persons may be third-party
service providers, or they may be officers and employees who
are employed by both the Company and the Funds. The
compensation of such person or persons shall be paid by the
Company and no obligation shall be incurred on behalf of the
Trust, the Funds, or the Classes in such respect.
SECTION TWO: Shareholder Recordkeeping.
Article 4. Terms of Appointment.
Subject to the terms and conditions set forth in this Agreement,
the Trust hereby appoints the Company to act as, and the Company
agrees to act as, transfer agent and dividend disbursing agent for
each Fund's Shares, and agent in connection with any accumulation,
open-account or similar plans provided to the shareholders of any Fund
("Shareholder(s)"), including without limitation any periodic
investment plan or periodic withdrawal program.
As used throughout this Agreement, a "Proper Instruction" means a
writing signed or initialed by one or more person or persons as the
Board shall have from time to time authorized. Each such writing shall
set forth the specific transaction or type of transaction involved.
Oral instructions will be deemed to be Proper Instructions if (a) the
Company reasonably believes them to have been given by a person
previously authorized in Proper Instructions to give such instructions
with respect to the transaction involved, and (b) the Trust, or the
Fund, and the Company promptly cause such oral instructions to be
confirmed in writing. Proper Instructions may include communications
effected directly between electro-mechanical or electronic devices
provided that the Trust, or the Fund, and the Company are satisfied
that such procedures afford adequate safeguards for the Fund's assets.
Proper Instructions may only be amended in writing.
Article 5. Duties of the Company.
The Company shall perform the following services in accordance with
Proper Instructions as may be provided from time to time by the Trust
as to any Fund:
A. Purchases
(1) The Company shall receive orders and payment for the
purchase of shares and promptly deliver payment and
appropriate documentation therefore to the custodian of
the relevant Fund, (the "Custodian"). The Company shall
notify the Fund and the Custodian on a daily basis of
the total amount of orders and payments so delivered.
(2) Pursuant to purchase orders and in accordance with the
Fund's current Prospectus, the Company shall compute
and issue the appropriate number of Shares of each Fund
and/or Class and hold such Shares in the appropriate
Shareholder accounts.
(3) For certificated Funds and/or Classes, if a Shareholder
or its agent requests a certificate, the Company, as
Transfer Agent, shall countersign and mail by first
class mail, a certificate to the Shareholder at its
address as set forth on the transfer books of the
Funds, and/or Classes, subject to any Proper
Instructions regarding the delivery of certificates.
(4) In the event that any check or other order for the
purchase of Shares of the Fund and/or Class is returned
unpaid for any reason, the Company shall debit the
Share account of the Shareholder by the number of
Shares that had been credited to its account upon
receipt of the check or other order, promptly mail a
debit advice to the Shareholder, and notify the Fund
and/or Class of its action. In the event that the
amount paid for such Shares exceeds proceeds of the
redemption of such Shares plus the amount of any
dividends paid with respect to such Shares, the Fund
and/the Class or its distributor will reimburse the
Company on the amount of such excess.
B. Distribution
(1) Upon notification by the Funds of the declaration of
any distribution to Shareholders, the Company shall act
as Dividend Disbursing Agent for the Funds in
accordance with the provisions of its governing
document and the then-current Prospectus of the Fund.
The Company shall prepare and mail or credit income,
capital gain, or any other payments to Shareholders. As
the Dividend Disbursing Agent, the Company shall, on or
before the payment date of any such distribution,
notify the Custodian of the estimated amount required
to pay any portion of said distribution which is
payable in cash and request the Custodian to make
available sufficient funds for the cash amount to be
paid out. The Company shall reconcile the amounts so
requested and the amounts actually received with the
Custodian on a daily basis. If a Shareholder is
entitled to receive additional Shares by virtue of any
such distribution or dividend, appropriate credits
shall be made to the Shareholder's account, for
certificated Funds and/or Classes, delivered where
requested; and
(2) The Company shall maintain records of account for each
Fund and Class and advise the Trust, each Fund and
Class and its Shareholders as to the foregoing.
C. Redemptions and Transfers
(1) The Company shall receive redemption requests and
redemption directions and, if such redemption requests
comply with the procedures as may be described in the
Fund Prospectus or set forth in Proper Instructions,
deliver the appropriate instructions therefor to the
Custodian. The Company shall notify the Funds on a
daily basis of the total amount of redemption requests
processed and monies paid to the Company by the
Custodian for redemptions.
(2) At the appropriate time upon receiving redemption
proceeds from the Custodian with respect to any
redemption, the Company shall pay or cause to be paid
the redemption proceeds in the manner instructed by the
redeeming Shareholders, pursuant to procedures
described in the then-current Prospectus of the Fund.
(3) If any certificate returned for redemption or other
request for redemption does not comply with the
procedures for redemption approved by the Fund, the
Company shall promptly notify the Shareholder of such
fact, together with the reason therefor, and shall
effect such redemption at the price applicable to the
date and time of receipt of documents complying with
said procedures.
(4) The Company shall effect transfers of Shares by the
registered owners thereof.
(5) The Company shall identify and process abandoned
accounts and uncashed checks for state escheat
requirements on an annual basis and report such actions
to the Fund.
D. Recordkeeping
(1) The Company shall record the issuance of Shares of each
Fund, and/or Class, and maintain pursuant to applicable
rules of the Securities and Exchange Commission ("SEC")
a record of the total number of Shares of the Fund
and/or Class which are authorized, based upon data
provided to it by the Fund, and issued and outstanding.
The Company shall also provide the Fund on a regular
basis or upon reasonable request with the total number
of Shares which are authorized and issued and
outstanding, but shall have no obligation when
recording the issuance of Shares, except as otherwise
set forth herein, to monitor the issuance of such
Shares or to take cognizance of any laws relating to
the issue or sale of such Shares, which functions shall
be the sole responsibility of the Funds.
(2) The Company shall establish and maintain records
pursuant to applicable rules of the SEC relating to the
services to be performed hereunder in the form and
manner as agreed to by the Trust or the Fund to include
a record for each Shareholder's account of the
following:
(a) Name, address and tax identification number (and
whether such number has been certified);
(b) Number of Shares held;
(c) Historical information regarding the account,
including dividends paid and date and price for all
transactions;
(d) Any stop or restraining order placed against the
account;
(e) Information with respect to withholding in the case
of a foreign account or an account for which
withholding is required by the Internal Revenue
Code;
(f) Any dividend reinvestment order, plan application,
dividend address and correspondence relating to the
current maintenance of the account;
(g) Certificate numbers and denominations for any
Shareholder holding certificates;
(h) Any information required in order for the Company
to perform the calculations contemplated or
required by this Agreement.
(3) The Company shall preserve any such records required to
be maintained pursuant to the rules of the SEC for the
periods prescribed in said rules as specifically noted
below. Such record retention shall be at the expense of
the Company, and such records may be inspected by the
Fund at reasonable times. The Company may, at its
option at any time, and shall forthwith upon the Fund's
demand, turn over to the Fund and cease to retain in
the Company's files, records and documents created and
maintained by the Company pursuant to this Agreement,
which are no longer needed by the Company in
performance of its services or for its protection. If
not so turned over to the Fund, such records and
documents will be retained by the Company for six years
from the year of creation, during the first two of
which such documents will be in readily accessible
form. At the end of the six year period, such records
and documents will either be turned over to the Fund or
destroyed in accordance with Proper Instructions.
E. Confirmations/Reports
(1) The Company shall furnish to the Fund periodically the
following information:
(a) A copy of the transaction register;
(b) Dividend and reinvestment blotters;
(c) The total number of Shares issued and outstanding
in each state for "blue sky" purposes as determined
according to Proper Instructions delivered from
time to time by the Fund to the Company;
(d) Shareholder lists and statistical information;
(e) Payments to third parties relating to distribution
agreements, allocations of sales loads, redemption
fees, or other transaction- or sales-related
payments;
(f) Such other information as may be agreed upon from
time to time.
(2) The Company shall prepare in the appropriate form, file
with the Internal Revenue Service and appropriate state
agencies, and, if required, mail to Shareholders, such
notices for reporting dividends and distributions paid
as are required to be so filed and mailed and shall
withhold such sums as are required to be withheld under
applicable federal and state income tax laws, rules and
regulations.
(3) In addition to and not in lieu of the services set
forth above, the Company shall:
(a) Perform all of the customary services of a transfer
agent, dividend disbursing agent and, as relevant,
agent in connection with accumulation, open-account
or similar plans (including without limitation any
periodic investment plan or periodic withdrawal
program), including but not limited to: maintaining
all Shareholder accounts, mailing Shareholder
reports and Prospectuses to current Shareholders,
withholding taxes on accounts subject to back-up or
other withholding (including non-resident alien
accounts), preparing and filing reports on U.S.
Treasury Department Form 1099 and other appropriate
forms required with respect to dividends and
distributions by federal authorities for all
Shareholders, preparing and mailing confirmation
forms and statements of account to Shareholders for
all purchases and redemptions of Shares and other
conformable transactions in Shareholder accounts,
preparing and mailing activity statements for
Shareholders, and providing Shareholder account
information; and
(b) provide a system which will enable the Fund to
monitor the total number of Shares of each Fund
and/or Class sold in each state ("blue sky
reporting"). The Fund shall by Proper Instructions
(i) identify to the Company those transactions and
assets to be treated as exempt from the blue sky
reporting for each state and (ii) verify the
classification of transactions for each state on
the system prior to activation and thereafter
monitor the daily activity for each state. The
responsibility of the Company for each Fund's
and/or Class's state blue sky registration status
is limited solely to the recording of the initial
classification of transactions or accounts with
regard to blue sky compliance and the reporting of
such transactions and accounts to the Fund as
provided above.
F. Other Duties
(1) The Company shall answer correspondence from
Shareholders relating to their Share accounts and such
other correspondence as may from time to time be
addressed to the Company;
(2) The Company shall prepare Shareholder meeting lists,
mail proxy cards and other material supplied to it by
the Fund in connection with Shareholder Meetings of
each Fund; receive, examine and tabulate returned
proxies, and certify the vote of the Shareholders;
(3) The Company shall establish and maintain facilities and
procedures for safekeeping of stock certificates, check
forms and facsimile signature imprinting devices, if
any; and for the preparation or use, and for keeping
account of, such certificates, forms and devices.
Article 6. Duties of the Trust.
A. Compliance
The Trust or Fund assume full responsibility for the
preparation, contents and distribution of their own and/or
their classes' Prospectus and for complying with all applicable
requirements of the Securities Act of 1933, as amended (the
"1933 Act"), the 1940 Act and any laws, rules and regulations
of government authorities having jurisdiction.
B. Share Certificates
The Trust shall supply the Company with a sufficient supply of
blank Share certificates and from time to time shall renew such
supply upon request of the Company. Such blank Share
certificates shall be properly signed, manually or by
facsimile, if authorized by the Trust and shall bear the seal
of the Trust or facsimile thereof; and notwithstanding the
death, resignation or removal of any officer of the Trust
authorized to sign certificates, the Company may continue to
countersign certificates which bear the manual or facsimile
signature of such officer until otherwise directed by the
Trust.
C. Distributions
The Fund shall promptly inform the Company of the declaration
of any dividend or distribution on account of any Fund's
shares.
Article 7. Compensation and Expenses.
A. Annual Fee
For performance by the Company pursuant to Section Two of this
Agreement, the Trust and/or the Fund agree to pay the Company
an annual maintenance fee for each Shareholder account as
agreed upon between the parties and as may be added to or
amended from time to time. Such fees may be changed from time
to time subject to written agreement between the Trust and the
Company. Pursuant to information in the Fund Prospectus or
other information or instructions from the Fund, the Company
may sub-divide any Fund into Classes or other sub-components
for recordkeeping purposes. The Company will charge the Fund
the same fees for each such Class or sub-component the same as
if each were a Fund.
B. Reimbursements
In addition to the fee paid under Article 7A above, the Trust
and/or Fund agree to reimburse the Company for out-of-pocket
expenses or advances incurred by the Company for the items
agreed upon between the parties, as may be added to or amended
from time to time. In addition, any other expenses incurred by
the Company at the request or with the consent of the Trust
and/or the Fund, will be reimbursed by the appropriate Fund.
C. Payment
The compensation and out-of-pocket expenses shall be accrued
by the Fund and shall be paid to the Company no less
frequently than monthly, and shall be paid daily upon
request of the Company. The Company will maintain detailed
information about the compensation and out-of-pocket
expenses by Fund and Class.
D. Any schedule of compensation agreed to hereunder, as may be
adjusted from time to time, shall be dated and signed by a
duly authorized officer of the Trust and/or the Funds and a
duly authorized officer of the Company.
Article 8. Assignment of Shareholder Recordkeeping.
Except as provided below, no right or obligation under this Section
Two may be assigned by either party without the written consent of the
other party.
A. This Agreement shall inure to the benefit of and be binding
upon the parties and their respective permitted successors
and assigns.
B. The Company may without further consent on the part of the
Trust subcontract for the performance hereof with (A) State
Street Bank and its subsidiary, Boston Financial Data
Services, Inc., a Massachusetts Trust ("BFDS"), which is
duly registered as a transfer agent pursuant to
Section 17A(c)(1) of the Securities Exchange Act of 1934, as
amended, or any succeeding statute ("Section 17A(c)(1)"), or
(B) a BFDS subsidiary duly registered as a transfer agent
pursuant to Section 17A(c)(1), or (C) a BFDS affiliate, or
(D) such other provider of services duly registered as a
transfer agent under Section 17A(c)(1) as Company shall
select; provided, however, that the Company shall be as
fully responsible to the Trust for the acts and omissions of
any subcontractor as it is for its own acts and omissions;
or
C. The Company shall upon instruction from the Trust
subcontract for the performance hereof with an Agent
selected by the Trust, other than BFDS or a provider of
services selected by Company, as described in (2) above;
provided, however, that the Company shall in no way be
responsible to the Trust for the acts and omissions of the
Agent.
SECTION THREE: Custody Services Procurement.
Article 9. Appointment.
The Trust hereby appoints Company as its agent to evaluate and
obtain custody services from a financial institution that (i) meets
the criteria established in Section 17(f) of the 1940 Act and (ii) has
been approved by the Board as eligible for selection by the Company as
a custodian (the "Eligible Custodian"). The Company accepts such
appointment.
Article 10. The Company and Its Duties.
Subject to the review, supervision and control of the Board, the
Company shall:
A. evaluate the nature and the quality of the custodial
services provided by the Eligible Custodian;
B. employ the Eligible Custodian to serve on behalf of the
Trust as Custodian of the Trust's assets substantially on
the terms set forth as the form of agreement in Exhibit 2;
C. negotiate and enter into agreements with the Custodians for
the benefit of the Trust, with the Trust as a party to each
such agreement. The Company shall not be a party to any
agreement with any such Custodian;
D. establish procedures to monitor the nature and the quality
of the services provided by the Custodians;
E. continuously monitor the nature and the quality of services
provided by the Custodians; and
F. periodically provide to the Trust (i) written reports on the
activities and services of the Custodians; (ii) the nature
and amount of disbursement made on account of the Trust with
respect to each custodial agreement; and (iii) such other
information as the Board shall reasonably request to enable
it to fulfill its duties and obligations under Sections
17(f) and 36(b) of the 1940 Act and other duties and
obligations thereof.
Article 11. Fees and Expenses.
A. Annual Fee
For the performance by the Company pursuant to Section Three
of this Agreement, the Trust and/or the Fund agree to pay
the Company an annual fee as agreed upon between the
parties.
B. Reimbursements
In addition to the fee paid under Section 11A above, the Trust
and/or Fund agree to reimburse the Company for out-of-pocket
expenses or advances incurred by the Company for the items
agreed upon between the parties, as may be added to or amended
from time to time. In addition, any other expenses incurred by
the Company at the request or with the consent of the Trust
and/or the Fund, will be reimbursed by the appropriate Fund.
C. Payment
The compensation and out-of-pocket expenses shall be accrued
by the Fund and shall be paid to the Company no less
frequently than monthly, and shall be paid daily upon
request of the Company. The Company will maintain detailed
information about the compensation and out-of-pocket
expenses by Fund.
D. Any schedule of compensation agreed to hereunder, as may be
adjusted from time to time, shall be dated and signed by a
duly authorized officer of the Trust and/or the Funds and a
duly authorized officer of the Company.
Article 12. Representations.
The Company represents and warrants that it has obtained all
required approvals from all government or regulatory authorities
necessary to enter into this arrangement and to provide the services
contemplated in Section Three of this Agreement.
SECTION FOUR: General Provisions.
Article 13. Documents.
A. In connection with the appointment of the Company under this
Agreement, the Trust shall file with the Company the
following documents:
(1) A copy of the Charter and By-Laws of the Trust and all
amendments thereto;
(2) A copy of the resolution of the Board of the Trust
authorizing this Agreement;
(3) Specimens of all forms of outstanding Share
certificates of the Trust or the Funds in the forms
approved by the Board of the Trust with a certificate
of the Secretary of the Trust as to such approval;
(4) All account application forms and other documents
relating to Shareholders accounts; and
(5) A copy of the current Prospectus for each Fund.
B. The Fund will also furnish from time to time the following
documents:
(1) Each resolution of the Board of the Trust authorizing
the original issuance of each Fund's, and/or Class's
Shares;
(2) Each Registration Statement filed with the SEC and
amendments thereof and orders relating thereto in
effect with respect to the sale of Shares of any Fund,
and/or Class;
(3) A certified copy of each amendment to the governing
document and the By-Laws of the Trust;
(4) Certified copies of each vote of the Board authorizing
officers to give Proper Instructions to the Custodian
and agents for fund accountant, custody services
procurement, and shareholder recordkeeping or transfer
agency services;
(5) Specimens of all new Share certificates representing
Shares of any Fund, accompanied by Board resolutions
approving such forms;
(6) Such other certificates, documents or opinions which
the Company may, in its discretion, deem necessary or
appropriate in the proper performance of its duties;
and
(7) Revisions to the Prospectus of each Fund.
Article 14. Representations and Warranties.
A. Representations and Warranties of the Company
The Company represents and warrants to the Trust that:
(1) It is a business trust duly organized and existing and
in good standing under the laws of the State of
Delaware.
(2) It is duly qualified to carry on its business in the
State of Delaware.
(3) It is empowered under applicable laws and by its
charter and by-laws to enter into and perform this
Agreement.
(4) All requisite corporate proceedings have been taken to
authorize it to enter into and perform its obligations
under this Agreement.
(5) It has and will continue to have access to the
necessary facilities, equipment and personnel to
perform its duties and obligations under this
Agreement.
(6) It is in compliance with federal securities law
requirements and in good standing as a transfer agent.
B. Representations and Warranties of the Trust
The Trust represents and warrants to the Company that:
(1) It is an investment company duly organized and existing
and in good standing under the laws of its state of
organization;
(2) It is empowered under applicable laws and by its
Charter and By-Laws to enter into and perform its
obligations under this Agreement;
(3) All corporate proceedings required by said Charter and
By-Laws have been taken to authorize it to enter into
and perform its obligations under this Agreement;
(4) The Trust is an open-end investment company registered
under the 1940 Act; and
(5) A registration statement under the 1933 Act will be
effective, and appropriate state securities law filings
have been made and will continue to be made, with
respect to all Shares of each Fund being offered for
sale.
Article 15. Standard of Care and Indemnification.
A. Standard of Care
The Company shall be held to a standard of reasonable care in
carrying out the provisions of this Contract. The Company shall
be entitled to rely on and may act upon advice of counsel (who
may be counsel for the Trust) on all matters, and shall be
without liability for any action reasonably taken or omitted
pursuant to such advice, provided that such action is not in
violation of applicable federal or state laws or regulations,
and is in good faith and without negligence.
B. Indemnification by Trust
The Company shall not be responsible for and the Trust or Fund
shall indemnify and hold the Company, including its officers,
directors, shareholders and their agents employees and
affiliates, harmless against any and all losses, damages,
costs, charges, counsel fees, payments, expenses and
liabilities arising out of or attributable to:
(1) The acts or omissions of any Custodian, Adviser, Sub-
adviser or other party contracted by or approved by the
Trust or Fund,
(2) The reliance on or use by the Company or its agents or
subcontractors of information, records and documents in
proper form which
(a) are received by the Company or its agents or
subcontractors and furnished to it by or on behalf
of the Fund, its Shareholders or investors
regarding the purchase, redemption or transfer of
Shares and Shareholder account information;
(b) are received by the Company from independent
pricing services or sources for use in valuing the
assets of the Funds; or
(c) are received by the Company or its agents or
subcontractors from Advisers, Sub-advisers or other
third parties contracted by or approved by the
Trust of Fund for use in the performance of
services under this Agreement;
(d) have been prepared and/or maintained by the Fund or
its affiliates or any other person or firm on
behalf of the Trust.
(3) The reliance on, or the carrying out by the Company or
its agents or subcontractors of Proper Instructions of
the Trust or the Fund.
(4) The offer or sale of Shares in violation of any
requirement under the federal securities laws or
regulations or the securities laws or regulations of
any state that such Shares be registered in such state
or in violation of any stop order or other
determination or ruling by any federal agency or any
state with respect to the offer or sale of such Shares
in such state.
Provided, however, that the Company shall not be
protected by this Article 15.A. from liability for any
act or omission resulting from the Company's willful
misfeasance, bad faith, negligence or reckless disregard
of its duties of failure to meet the standard of care set
forth in 15.A. above.
C. Reliance
At any time the Company may apply to any officer of the Trust
or Fund for instructions, and may consult with legal counsel
with respect to any matter arising in connection with the
services to be performed by the Company under this Agreement,
and the Company and its agents or subcontractors shall not be
liable and shall be indemnified by the Trust or the appropriate
Fund for any action reasonably taken or omitted by it in
reliance upon such instructions or upon the opinion of such
counsel provided such action is not in violation of applicable
federal or state laws or regulations. The Company, its agents
and subcontractors shall be protected and indemnified in
recognizing stock certificates which are reasonably believed to
bear the proper manual or facsimile signatures of the officers
of the Trust or the Fund, and the proper countersignature of
any former transfer agent or registrar, or of a co-transfer
agent or co-registrar.
D. Notification
In order that the indemnification provisions contained in this
Article 15 shall apply, upon the assertion of a claim for which
either party may be required to indemnify the other, the party
seeking indemnification shall promptly notify the other party
of such assertion, and shall keep the other party advised with
respect to all developments concerning such claim. The party
who may be required to indemnify shall have the option to
participate with the party seeking indemnification in the
defense of such claim. The party seeking indemnification shall
in no case confess any claim or make any compromise in any case
in which the other party may be required to indemnify it except
with the other party's prior written consent.
Article 16. Termination of Agreement.
This Agreement may be terminated by either party upon one hundred
twenty (120) days written notice to the other. Should the Trust
exercise its rights to terminate, all out-of-pocket expenses
associated with the movement of records and materials will be borne by
the Trust or the appropriate Fund. Additionally, the Company reserves
the right to charge for any other reasonable expenses associated with
such termination. The provisions of Article 15 shall survive the
termination of this Agreement.
Article 17. Amendment.
This Agreement may be amended or modified by a written agreement
executed by both parties.
Article 18. Interpretive and Additional Provisions.
In connection with the operation of this Agreement, the Company and
the Trust may from time to time agree on such provisions interpretive
of or in addition to the provisions of this Agreement as may in their
joint opinion be consistent with the general tenor of this Agreement.
Any such interpretive or additional provisions shall be in a writing
signed by both parties and shall be annexed hereto, provided that no
such interpretive or additional provisions shall contravene any
applicable federal or state regulations or any provision of the
Charter. No interpretive or additional provisions made as provided in
the preceding sentence shall be deemed to be an amendment of this
Agreement.
Article 19. Governing Law.
This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the Commonwealth
of Massachusetts
Article 20. Notices.
Except as otherwise specifically provided herein, Notices and other
writings delivered or mailed postage prepaid to the Trust at Federated
Investors Tower, Pittsburgh, Pennsylvania, 15222-3779, or to the
Company at Federated Investors Tower, Pittsburgh, Pennsylvania, 15222-
3779, or to such other address as the Trust or the Company may
hereafter specify, shall be deemed to have been properly delivered or
given hereunder to the respective address.
Article 21. Counterparts.
This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original.
Article 22. Limitations of Liability of Trustees and Shareholders of
the Trust.
The execution and delivery of this Agreement have been authorized
by the Trustees of the Trust and signed by an authorized officer of
the Trust, acting as such, and neither such authorization by such
Trustees nor such execution and delivery by such officer shall be
deemed to have been made by any of them individually or to impose any
liability on any of them personally, and the obligations of this
Agreement are not binding upon any of the Trustees or Shareholders of
the Trust, but bind only the appropriate property of the Fund, or
Class, as provided in the Declaration of Trust.
Article 23. Limitations of Liability of Trustees and Shareholders of
the Company.
The execution and delivery of this Agreement have been authorized
by the Trustees of the Company and signed by an authorized officer of
the Company, acting as such, and neither such authorization by such
Trustees nor such execution and delivery by such officer shall be
deemed to have been made by any of them individually or to impose any
liability on any of them personally, and the obligations of this
Agreement are not binding upon any of the Trustees or Shareholders of
the Company, but bind only the property of the Company as provided in
the Declaration of Trust.
Article 24. Assignment.
This Agreement and the rights and duties hereunder shall not be
assignable with respect to the Trust or the Funds by either of the
parties hereto except by the specific written consent of the other
party.
Article 25. Merger of Agreement.
This Agreement constitutes the entire agreement between the parties
hereto and supersedes any prior agreement with respect to the subject
hereof whether oral or written.
Article 26. Successor Agent.
If a successor agent for the Trust shall be appointed by the Trust,
the Company shall upon termination of this Agreement deliver to such
successor agent at the office of the Company all properties of the
Trust held by it hereunder. If no such successor agent shall be
appointed, the Company shall at its office upon receipt of Proper
Instructions deliver such properties in accordance with such
instructions.
In the event that no written order designating a successor agent or
Proper Instructions shall have been delivered to the Company on or
before the date when such termination shall become effective, then the
Company shall have the right to deliver to a bank or trust company,
which is a "bank" as defined in the 1940 Act, of its own selection,
having an aggregate capital, surplus, and undivided profits, as shown
by its last published report, of not less than $2,000,000, all
properties held by the Company under this Agreement. Thereafter, such
bank or trust company shall be the successor of the Company under this
Agreement.
Article 27. Force Majeure.
The Company shall have no liability for cessation of services
hereunder or any damages resulting therefrom to the Fund as a result
of work stoppage, power or other mechanical failure, natural disaster,
governmental action, communication disruption or other impossibility
of performance.
Article 28. Assignment; Successors.
This Agreement shall not be assigned by either party without the
prior written consent of the other party, except that either party may
assign to a successor all of or a substantial portion of its business,
or to a party controlling, controlled by, or under common control with
such party. Nothing in this Article 28 shall prevent the Company from
delegating its responsibilities to another entity to the extent
provided herein.
Article 29. Severability.
In the event any provision of this Agreement is held illegal, void
or unenforceable, the balance shall remain in effect.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed in their names and on their behalf under their seals by
and through their duly authorized officers, as of the day and year
first above written.

ATTEST: INVESTMENT COMPANIES
(listed on Exhibit 1)

/s/ John W. McGonigle_______ By:__/s/ John F. Donahue___
John W. McGonigle John F. Donahue
Secretary Chairman

ATTEST: FEDERATED SERVICES COMPANY

/s/ Jeannette Fisher-Garber By:_/s/ James J. Dolan_____
Jeannette Fisher-Garber James J. Dolan
Secretary President

EXHIBIT 1
<TABLE>
<S> <C>
CONTRACT
DATE INVESTMENT COMPANY
Portfolios
Classes

12/01/94 FUND FOR U.S. GOVERNMENT SECURITIES, INC.

FEDERATED SERVICES COMPANY provides the following services:
Fund Accounting
Shareholder Recordkeeping
Custody Services Procurement

</TABLE>

Exhibit 9 (ii) under Rule N-1A
Exhibit 10 (ii) under Item 601/Reg.S-K

SHAREHOLDER SERVICES AGREEMENT

AGREEMENT made as of the first day of March, 1994, by and between
those investment companies listed on Exhibit 1, as may be amended from
time to time, having their principal office and place of business at
Federated Investors Tower, Pittsburgh, PA 15222-3779 and who have
approved a Shareholder Services Plan (the "Plan") and this form of
Agreement (individually referred to herein as a "Fund" and collectively
as "Funds") and Federated Shareholder Services, a Delaware business
trust, having its principal office and place of business at Federated
Investors Tower, Pittsburgh, Pennsylvania 15222-3779 ("FSS").

1. The Funds hereby appoint FSS to render or cause to be
rendered personal services to shareholders of the Funds and/or the
maintenance of accounts of shareholders of the Funds ("Services"). In
addition to providing Services directly to shareholders of the Funds,
FSS is hereby appointed the Funds' agent to select, negotiate and
subcontract for the performance of Services. FSS hereby accepts such
appointments. FSS agrees to provide or cause to be provided Services
which, in its best judgment (subject to supervision and control of the
Funds' Boards of Trustees or Directors, as applicable), are necessary or
desirable for shareholders of the Funds. FSS further agrees to provide
the Funds, upon request, a written description of the Services which FSS
is providing hereunder.

2. During the term of this Agreement, each Fund will pay FSS
and FSS agrees to accept as full compensation for its services rendered
hereunder a fee at an annual rate, calculated daily and payable monthly,
up to 0.25% of 1% of average net assets of each Fund.

For the payment period in which this Agreement becomes effective
or terminates with respect to any Fund, there shall be an appropriate
proration of the monthly fee on the basis of the number of days that
this Agreement is in effect with respect to such Fund during the month.
To enable the Funds to comply with an applicable exemptive order, FSS
represents that the fees received pursuant to this Agreement will be
disclosed to and authorized by any person or entity receiving Services,
and will not result in an excessive fee to FSS.

3. This Agreement shall continue in effect for one year from
the date of its execution, and thereafter for successive periods of one
year only if the form of this Agreement is approved at least annually by
the Board of each Fund, including a majority of the members of the Board
of the Fund who are not interested persons of the Fund and have no
direct or indirect financial interest in the operation of the Funds'
Plan or in any related documents to the Plan ("Independent Board
Members") cast in person at a meeting called for that purpose.

4. Notwithstanding paragraph 3, this Agreement may be
terminated as follows:

(a) at any time, without the payment of any penalty, by
the vote of a majority of the Independent Board Members of any
Fund or by a vote of a majority of the outstanding voting
securities of any Fund as defined in the Investment Company Act
of 1940 on sixty (60) days' written notice to the parties to
this Agreement;

(b) automatically in the event of the Agreement's
assignment as defined in the Investment Company Act of 1940; and

(c) by any party to the Agreement without cause by
giving the other party at least sixty (60) days' written notice
of its intention to terminate.

5. FSS agrees to obtain any taxpayer identification number
certification from each shareholder of the Funds to which it provides
Services that is required under Section 3406 of the Internal Revenue
Code, and any applicable Treasury regulations, and to provide each Fund
or its designee with timely written notice of any failure to obtain such
taxpayer identification number certification in order to enable the
implementation of any required backup withholding.

6. FSS shall not be liable for any error of judgment or mistake
of law or for any loss suffered by any Fund in connection with the
matters to which this Agreement relates, except a loss resulting from
willful misfeasance, bad faith or gross negligence on its part in the
performance of its duties or from reckless disregard by it of its
obligations and duties under this Agreement. FSS shall be entitled to
rely on and may act upon advice of counsel (who may be counsel for such
Fund) on all matters, and shall be without liability for any action
reasonably taken or omitted pursuant to such advice. Any person, even
though also an officer, trustee, partner, employee or agent of FSS, who
may be or become a member of such Fund's Board, officer, employee or
agent of any Fund, shall be deemed, when rendering services to such Fund
or acting on any business of such Fund (other than services or business
in connection with the duties of FSS hereunder) to be rendering such
services to or acting solely for such Fund and not as an officer,
trustee, partner, employee or agent or one under the control or
direction of FSS even though paid by FSS.

This Section 6 shall survive termination of this Agreement.

7. No provision of this Agreement may be changed, waived,
discharged or terminated orally, but only by an instrument in writing
signed by the party against which an enforcement of the change, waiver,
discharge or termination is sought.

8. FSS is expressly put on notice of the limitation of
liability as set forth in the Declaration of Trust of each Fund that is
a Massachusetts business trust and agrees that the obligations assumed
by each such Fund pursuant to this Agreement shall be limited in any
case to such Fund and its assets and that FSS shall not seek
satisfaction of any such obligations from the shareholders of such Fund,
the Trustees, Officers, Employees or Agents of such Fund, or any of
them.

9. The execution and delivery of this Agreement have been
authorized by the Trustees of FSS and signed by an authorized officer of
FSS, acting as such, and neither such authorization by such Trustees nor
such execution and delivery by such officer shall be deemed to have been
made by any of them individually or to impose any liability on any of
them personally, and the obligations of this Agreement are not binding
upon any of the Trustees or shareholders of FSS, but bind only the trust
property of FSS as provided in the Declaration of Trust of FSS.

10. Notices of any kind to be given hereunder shall be in
writing (including facsimile communication) and shall be duly given if
delivered to any Fund and to such Fund at the following address:
Federated Investors Tower, Pittsburgh, PA 15222-3779, Attention:
President and if delivered to FSS at Federated Investors Tower,
Pittsburgh, PA 15222-3779, Attention: President.

11. This Agreement constitutes the entire agreement between the
parties hereto and supersedes any prior agreement with respect to the
subject hereof whether oral or written. If any provision of this
Agreement shall be held or made invalid by a court or regulatory agency
decision, statute, rule or otherwise, the remainder of this Agreement
shall not be affected thereby. Subject to the provisions of Sections 3
and 4, hereof, this Agreement shall be binding upon and shall inure to
the benefit of the parties hereto and their respective successors and
shall be governed by Pennsylvania law; provided, however, that nothing
herein shall be construed in a manner inconsistent with the Investment
Company Act of 1940 or any rule or regulation promulgated by the
Securities and Exchange Commission thereunder.

12. This Agreement may be executed by different parties on
separate counterparts, each of which, when so executed and delivered,
shall be an original, and all such counterparts shall together
constitute one and the same instrument.

13. This Agreement shall not be assigned by any party without
the prior written consent of FSS in the case of assignment by any Fund,
or of the Funds in the case of assignment by FSS, except that any party
may assign to a successor all of or a substantial portion of its
business to a party controlling, controlled by, or under common control
with such party. Nothing in this Section 14 shall prevent FSS from
delegating its responsibilities to another entity to the extent provided
herein.

IN WITNESS WHEREOF, the parties hereto have caused this instrument
to be executed by their officers designated below as of the day and year
first above written.

Investment Companies (listed
on Exhibit 1)

By: /s/ John F. Donahue
John F. Donahue
Chairman

Attest: /s/ John W. McGonigle
John W. McGonigle

Federated Shareholder Services

By: /s/ James J. Dolan

Title: President

Attest: /s/ John W. McGonigle
John W. McGonigle
Exhibit 1

Fund for U.S. Government Securities

Exhibit 9(ii) under Form N-1A
Exhibit 10 (ii) under Item 609/Reg.S-
K

SHAREHOLDER SERVICES PLAN

This Shareholder Services Plan ("Plan") is adopted as of this 1st
day of March, 1994, by the Boards of Directors or Trustees, as
applicable (the "Boards"), of those investment companies listed on
Exhibit 1 hereto as may be amended from time to time, having their
principal office and place of business at Federated Investors Tower,
Pittsburgh, PA 15222-3779 (individually referred to herein as a "Fund"
and collectively as "Funds").

1. This Plan is adopted to allow the Funds to make payments as
contemplated herein to obtain certain personal services for shareholders
and/or the maintenance of shareholder accounts ("Services").

2. This Plan is designed to compensate Federated Shareholder
Services ("FSS") for providing personal services and/or the maintenance
of shareholder accounts to the Funds and their shareholders. In
compensation for the services provided pursuant to this Plan, FSS may be
paid a monthly fee computed at the annual rate not to exceed .25 of 1%
of the average aggregate net asset value of the shares of each Fund held
during the month.

3. Any payments made by the Funds to FSS pursuant to this Plan
will be made pursuant to a "Shareholder Services Agreement" between FSS
and each of the Funds.

4. Quarterly in each year that this Plan remains in effect, FSS
shall prepare and furnish to the Boards of the Funds, and the Boards
shall review, a written report of the amounts expended under the Plan.

5. This Plan shall become effective with regard to each Fund
(i) after approval by majority votes of: (a) such Fund's Board; and (b)
the members of the Board of such Fund who are not interested persons of
such Fund and have no direct or indirect financial interest in the
operation of such Fund's Plan or in any related documents to the Plan
("Independent Trustees or Directors"), cast in person at a meeting
called for the purpose of voting on the Plan.

6. This Plan shall remain in effect with respect to each Fund
presently set forth on an exhibit and any subsequent Fund added pursuant
to an exhibit during the initial year of this Plan for the period of one
year from the date set forth above and may be continued thereafter if
this Plan is approved with respect to each Fund at least annually by a
majority of the relevant Fund's Board and a majority of the Independent
Trustees or

Directors, of such Fund as applicable, cast in person at a meeting
called for the purpose of voting on the renewal of such Plan. If this
Plan is adopted with respect to a fund after the first annual approval
by the Trustees or Directors as described above, this Plan will be
effective as to that Fund at such time as Exhibit 1 hereto is amended to
add such Fund and will continue in effect until the next annual approval
of this Plan by the Funds' Boards and thereafter for successive periods
of one year subject to approval as described above.

7. All material amendments to this Plan must be approved by a
vote of the Board of each Fund and of the Independent Directors or
Trustees of such Fund, cast in person at a meeting called for such
purpose.

8. This Plan may be terminated as follows:

(b) by any party to the Agreement without cause by
giving the other party at least sixty (60) days' written notice
of its intention to terminate.

9. While this Plan shall be in effect, the selection and
nomination of Independent Directors or Trustees of each Fund shall be
committed to the discretion of the Independent Directors or Trustees
then in office.

10. All agreements with any person relating to the
implementation of this Plan shall be in writing and any agreement
related to this Plan shall be subject to termination, without penalty,
pursuant to the provisions of Paragraph 8 herein.

11. This Plan shall be construed in accordance with and governed
by the laws of the Commonwealth of Pennsylvania.

Witness the due execution hereof this as of the date set forth
above.

Investment Companies (listed
on Exhibit 1)

By: /s/ John F. Donahue
John F. Donahue
Chairman

Attest: /s/ John W. McGonigle
John W. McGonigle

Federated Shareholder Services

By: /s/ James J. Dolan

Title: President

Attest: /s/ John W. McGonigle
John W. McGonigle

Exhibit 9 (iii) under Rule N-1A
Exhibit 10 (iii) under Item 609/Reg.S-K

SHAREHOLDER SERVICES SUB-CONTRACT

This Agreement is made between the Financial Institution executing
this Agreement ("Provider") and Federated Shareholder Services ("FSS")
on behalf of the investment companies listed in Exhibit A hereto (the
"Funds"), for whom FSS administers the Shareholder Services Plan
("Plan") and who have approved this form of Agreement. In consideration
of the mutual covenants hereinafter contained, it is hereby agreed by
and between the parties hereto as follows:

1. FSS hereby appoints Provider to render or cause to be
rendered personal services to shareholders of the Funds and/or the
maintenance of accounts of shareholders of the Funds ("Services").
Provider agrees to provide Services which, in its best judgment, are
necessary or desirable for its customers who are investors in the Funds.
Provider further agrees to provide FSS, upon request, a written
description of the Services which Provider is providing hereunder.

2. During the term of this Agreement, the Funds will pay the
Provider fees as set forth in a written schedule delivered to the
Provider pursuant to this Agreement. The fee schedule for Provider may
be changed by FSS sending a new fee schedule to Provider pursuant to
Paragraph 9 of this Agreement. For the payment period in which this
Agreement becomes effective or terminates, there shall be an appropriate
proration of the fee on the basis of the number of days that this
Agreement is in effect during the quarter. To enable the Funds to
comply with an applicable exemptive order, Provider represents that the
fees received pursuant to this Agreement will be disclosed to its
customers, will be authorized by its customers, and will not result in
an excessive fee to the Provider.

3. The Provider understands that the Department of Labor views
ERISA as prohibiting fiduciaries of discretionary ERISA assets from
receiving shareholder service fees or other compensation from funds in
which the fiduciary's discretionary ERISA assets are invested. To date,
the Department of Labor has not issued any exemptive order or advisory
opinion that would exempt fiduciaries from this interpretation. Without
specific authorization from the Department of Labor, fiduciaries should
carefully avoid investing discretionary assets in any fund pursuant to
an arrangement where the fiduciary is to be compensated by the fund for
such investment. Receipt of such compensation could violate ERISA
provisions against fiduciary self-dealing and conflict of interest and
could subject the fiduciary to substantial penalties.

4. The Provider agrees not to solicit or cause to be solicited
directly, or indirectly at any time in the future, any proxies from the
shareholders of a Fund in opposition to proxies solicited by management
of the Fund, unless a court of competent jurisdiction shall have
determined that the conduct of a majority of the Board of Trustees or
Directors of the Fund constitutes willful misfeasance, bad faith, gross
negligence or reckless disregard of their duties. This paragraph 4 will
survive the term of this Agreement.

5. This Agreement shall continue in effect for one year from
the date of its execution, and thereafter for successive periods of one
year if the form of this Agreement is approved at least annually by the
Board of each Fund, including a majority of the members of the Board of
the Fund who are not interested persons of the Fund and have no direct
or indirect financial interest in the operation of the Fund's Plan or in
any related documents to the Plan ("Disinterested Board Members") cast
in person at a meeting called for that purpose.

6. Notwithstanding paragraph 5, this Agreement may be
terminated as follows:

(a) at any time, without the payment of any penalty, by
the vote of a majority of the Disinterested Board Members of the
Fund or by a vote of a majority of the outstanding voting
securities of the Fund as defined in the Investment Company Act
of 1940 on not more than sixty (60) days' written notice to the
parties to this Agreement;

(b) automatically in the event of the Agreement's
assignment as defined in the Investment Company Act of 1940; and

(c) by either party to the Agreement without cause by
giving the other party at least sixty (60) days' written notice
of its intention to terminate.

7. The Provider agrees to obtain any taxpayer identification
number certification from its customers required under Section 3406 of
the Internal Revenue Code, and any applicable Treasury regulations, and
to provide the Fund or its designee with timely written notice of any
failure to obtain such taxpayer identification number certification in
order to enable the implementation of any required backup withholding.

8. The execution and delivery of this Agreement have been
authorized by the Trustees of FSS and signed by an authorized officer of
FSS, acting as such, and neither such authorization by such Trustees nor
such execution and delivery by such officer shall be deemed to have been
made by any of them individually or to impose any liability on any of
them personally, and the obligations of this Agreement are not binding
upon any of the Trustees or shareholders of FSS, but bind only the trust
property of FSS as provided in the Declaration of Trust of FSS.

9. Notices of any kind to be given hereunder shall be in
writing (including facsimile communication) and shall be duly given if
delivered to Provider at the address set forth below and if delivered to
FSS at Federated Investors Tower, Pittsburgh, PA 15222-3779, Attention:
President.

10. This Agreement constitutes the entire agreement between the
parties hereto and supersedes any prior agreement with respect to the
subject hereof whether oral or written. If any provision of this
Agreement shall be held or made invalid by a court or regulatory agency
decision, statute, rule or otherwise, the remainder of this Agreement
shall not be affected thereby. Subject to the provisions of Sections 5
and 6, hereof, this Agreement shall be binding upon and shall inure to
the benefit of the parties hereto and their respective successors and
shall be governed by Pennsylvania law; provided, however, that nothing
herein shall be construed in a manner inconsistent with the Investment
Company Act of 1940 or any rule or regulation promulgated by the
Securities and Exchange Commission thereunder.

11. This Agreement may be executed by different parties on
separate counterparts, each of which, when so executed and delivered,
shall be an original, and all such counterparts shall together
constitute one and the same instrument.

12. This Agreement shall not be assigned by any party without
the prior written consent of FSS in the case of assignment by Provider,
or of Provider in the case of assignment by FSS, except that any party
may assign to a successor all of or a substantial portion of its
business to a party controlling, controlled by, or under common control
with such party.

13. This Agreement may be amended by FSS from time to time by
the following procedure. FSS will mail a copy of the amendment to the
Provider's address, as shown below. If the Provider does not object to
the amendment within thirty (30) days after its receipt, the amendment
will become part of the Agreement. The Provider's objection must be in
writing and be received by FSS within such thirty days.

14. This Agreement may be terminated with regard to a
particular Fund or Class at any time, without the payment of any
penalty, by FSS or by the vote of a majority of the Disinterested
Trustees or Directors, as applicable, or by a majority of the
outstanding voting securities of the particular Fund or Class on not
more than sixty (60) days' written notice to the Provider. This
Agreement may be terminated by Provider on sixty (60) days' written
notice to FSS.

15. The Provider acknowledges and agrees that FSS has entered
into this Agreement solely in the capacity of agent for the Funds and
administrator of the Plan. The Provider agrees not to claim that FSS is
liable for any responsibilities or amounts due by the Funds hereunder.

[Provider]

Address

City State Zip Code

Dated: By:
Authoried Signature

Title

Print Name of Authorized Signature

FEDERATED SHAREHOLDER SERVICES
Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779

By:
Vice President

EXHIBIT A to Shareholder Services Sub-Contract with

Funds covered by this Agreement:

Shareholder Service Fees

1. During the term of this Agreement, FSS will pay Provider a
quarterly fee. This fee will be computed at the annual rate of ______
of the average net asset value of shares of the Funds held during the
quarter in accounts for which the Provider provides Services under this
Agreement, so long as the average net asset value of Shares in the Funds
during the quarter equals or exceeds such minimum amount as FSS shall
from time to time determine and communicate in writing to the Provider.

2. For the quarterly period in which the Agreement becomes
effective or terminates, there shall be an appropriate proration of any
fee payable on the basis of the number of days that the Agreement is in
effect during the quarter.

Exhibit 13 under Form N-1A
Exhibit 5 under Item 601/Reg.S-K

HOUSTON, HOUSTON & DONNELLY
ATTORNEYS AT LAW
UNION TRUST BUILDING
FRED CHALMERS HOUSTON PITTSBURGH, PA. 15219
WILLIAM MC C. HOUSTON
FRED CHALMERS HOUSTON, JR. TELEPHONE
471-5828
THOMAS J. DONNELLY July 23, 1969 Area Code 412

Mutual Fund For Investing In U.S.
Government Securities Yielding At
Least 6% To Maturity And U.S.
Treasury Bills, Inc.
701 William Penn Place
Pittsburgh, Pennsylvania 15230

Gentlemen:

Mutual Fund For Investing In U.S. Government Securities
Yielding At Least 6% To Maturity And U.S. Treasury Bills, Inc.
("Corporation") proposes to offer and sell shares of its capital stock
in the manner and on the terms set forth in its Registration Statement
filed with the Securities and Exchange Commission on June 16, 1969, and
as amended by Amendment No. 1.

As counsel, we have participated in the organization of the
Corporation and its registration under the Investment Company Act of
1940. We have examined and are familiar with the Charter of the
Corporation, By-Laws and all other corporate records and documents
deemed relevant.

On the basis of the foregoing it is our opinion that:

1. The Corporation has been duly organized and it is
legally existing under the laws of the State of Maryland;

2. The Corporation is authorized to issue 5,000,000
shares of capital stock of a par value of $1.00 each
including the one share now issued and outstanding;

3. Subject to the effectiveness of the above mentioned
Registration Statement, the authorized and unissued capital
stock of the Corporation, when issued in the manner
described in the prospectus included in said Registration
Statement, for consideration equal to or exceeding its par
value and not less than its net asset value as required

Mutual Fund For Investing In U.S.
Government Securities Yielding At
Least 6% To Maturity And U.S.
Treasury Bills, Inc.
701 William Penn Place
Pittsburgh, Pennsylvania 15230 July 23, 1969

by the Charter of the Corporation will be legally issued and
outstanding capital stock of the Corporation and will be
fully-paid and non-assessable.

We hereby consent to the filing of this opinion as a
part of the Corporation's Registration Statement filed with the
Securities and Exchange Commission and as apart of any application or
registration statement filed under the securities laws of any of the
States of the United States.

We further consent to the reference to this opinion
and the reference to us as "counsel for the Fund" in the prospectus,
registration statements and applications.

Very truly yours,

HOUSTON, HOUSTON & DONNELLY

BY:/s/ Thomas J. Donnelly

TJD:mc

MUTUAL FUND FOR INVESTING IN U.S. GOVERNMENT SECURITIES
YIELDING AT LEAST 6% TO MATURITY AND U.S. TREASURY BILLS, INC.

ARTICLES OF AMENDMENT
(Under Sections 11-12)

MUTUAL FUND FOR INVESTING IN U.S. GOVERNMENT SECURITIES YIELDING
AT LEAST 6% TO MATURITY AND U.S. TREASURY BILLS, INC.

ARTICLES OF AMENDMENT
(Under Sections 11-12)

MUTUAL FUND FOR INVESTING IN U.S. GOVERNMENT SECURITIES YIELDING

AT LEAST 6% TO MATURITY AND U.S. TREASURY BILLS, INC., a Maryland

Corporation having its principal office in Baltimore City, Maryland

(hereinafter called the "Corporation"), hereby certifies to the State

Department of Assessments and Taxation of Maryland that:

FIRST: The Charter of the Corporation is hereby amended:

1. by striking out Section 2 of Article SEVENTH and

substituting in its place the following:

"2. The term, "net asset value" of the Corporation

shall mean the amount by which the assets of the Corporation, at fair

market values, exceed its liabilities, all as determined by or under the

direction of the Board of Directors. Such value per share shall be

determined as of the close of business on the New York Stock Exchange on

each day on which said Exchange is open and the value so determined

shall become effective at such time as the Board of Directors may fix.

Provided, however, the Board of Directors may suspend said determination

for not more than six (6) business days on which no requests for

redemption are received by the Corporation. Such determination shall be

made (a) by valuing United States Government Securities and securities

of its instrumentalities (other than U.S. Treasury Bills) in the

portfolio of the Corporation at the mean between the over-the-counter

bid and ask price if market quotations are available; if not available,

then at fair value in the best judgment of the Board of Directors; (b)

by valuing Treasury Bills at the cost thereof; (c) by accruing daily

interest on portfolio securities; (d) by deducting from the accrued

liabilities determined in accordance with good accounting practice and

(e) by dividing the net asset value of the Corporation thus obtained by

the number of shares of capital stock of the Corporation then issued and

outstanding. The Board of Directors may delegate any of the powers and

duties under this Section 2 with respect to appraisal of assets and

liabilities to an Officer of Officers of the Corporation or to the

Custodian of its securities or to such other person or persons as may be

deemed qualified in the judgment of the Board of Directors. The Board

of Directors may also determine or cause to be determined the net asset

value as of any particular time in addition to the closing time of each

day when the New York Stock Exchange is open and fix the hour of that

day when the net asset value so determined shall become effective. Such

additional or interim determination may be made either appraisal or by

calculation or estimate. Any such calculation or estimate shall be

based on changes in the market value of representative market value of

representative or selected securities or on changes in recognized market

averages since the last closing appraisal, and made in a manner which in

the opinion of the Board of Directors will fairly reflect the changes in

the net asset value. At any time when the New York Stock Exchange is

closed (other than customary week-end and holiday closings), the Board

of Directors may cause the net asset value to be determined by

appraising all securities (except U.S. Treasury Bills) at the mean

between current bid and ask prices in the over-the-counter markets,

appraising Treasury Bills at cost and all other assets at fair value in

the best judgment of the Board of Directors, and otherwise proceeding as

above stated, and the Board of Directors may fix the time when the net

asset value so determined shall become effective."

SECOND: The Board of Directors of the Corporation on July 22,

1969, adopted a resolution in which was set forth the foregoing

amendments to the Charter declaring that the said amendments of the

Charter were advisable and directing that they be submitted for action

thereon at a Special Meeting of Stockholders of the Corporation to be

held on July 22, 1969, or at any adjournment or adjournments thereof.

THIRD: Notice setting forth the said amendments of the

Charter and stating that the purpose of the meeting of the stockholders

would be to take action thereon, was given, as required by law, to all

stockholders entitled to vote thereon; and like notice was given to all

stockholders of the Corporation not entitled to vote thereon, whose

contract rights as expressly set forth in the Charter would be altered

by the amendments.

FOURTH: The amendments of the Charter of the Corporation as

herein set forth were approved by the Stockholders of the Corporation at

the Special Meeting of Stockholders, held on July 22, 1969, by all the

votes entitled to be cast thereon as required by the Articles of

Incorporation.

FIFTH: The amendments of the Charter of the Corporation as

hereinabove set forth have been duly advised by the Board of Directors

and approved by Stockholders of the Corporation.

IN WITNESS WHEREOF, Mutual Fund for Investing in U.S. Government

Securities Yielding at Least 6% to Maturity and U.S. Treasury Bills,

Inc., has caused these presents to be signed in its name and on its

behalf by its President or one of its Vice Presidents and its corporate

seal to be hereunto affixed and attested by its Secretary or one of its

Assistant Secretaries on July 23, 1969.

ATTEST: MUTUAL FUND FOR INVESTING IN
U.S. GOVERNMENT SECURITIES YIELDING AT LEAST 6% TO
MATURITY AND U.S. TREASURY BILLS, INC.

/s/ John W. McGonigle
John W. McGonigle, Secretary

By: /s/Clifford E. Brown
Clifford E. Brown, Vice President

CORPORATE SEAL
COMMONWEALTH OF PENNSYLVANIA )
) SS:
COUNTY OF ALLEGHENY )

I hereby certify that on July 22, 1969, before me, the subscriber,

a Notary Public of the Commonwealth of Pennsylvania, in and for the

County of Allegheny, personally appeared CLIFFORD E. BROWN, Vice

President of MUTUAL FUND FOR INVESTING IN U.S. GOVERNMENT SECURITIES

YIELDING AT LEAST 6% TO MATURITY AND U.S. TREASURY BILLS, INC., a

Maryland corporation, and in the name and on behalf of said Corporation

acknowledged the foregoing Articles of Amendment to be the corporate act

of said Corporation; and at the same time personally appeared JOHN W.

McGONIGLE, and made oath in due form of law that he was Secretary of the

meeting of the stockholders of said Corporation at which the amendments

of the Charter of Corporation therein set forth were approved, and that

the matters and facts set forth in said Articles of Amendment are true

to the best of his knowledge, information and belief.

WITNESS my hand and Notarial Seal the day and year last above

written.

Notary Public
My Commission Expires

Exhibit 14 under Rrule N-1A
Exhibit 99(i) under Item 609/Reg.S-K

THE LIBERTY ACCOUNT

Federated Securities Corp., Distributor, 421 Seventh Avenue, Pittsburgh,
Pennsylvania 15219

Dear Investor:

Thank you for considering The Liberty Account IRA. We hope that
after you've reviewed the enclosed information kit you requested, you'll
share our enthusiasm about this exciting, new investment opportunity.

No doubt, you already know the benefits of an IRA in general-- the
security and the tax savings. But, when you make your IRA investment in
the Liberty Account funds, you enjoy all these benefits, too: high
current yields . . professional management . . . diversification . . .
an experienced Shareholder Services staff. With the Liberty Account
IRA, you're eligible for all of these plus something extra -- A Free
Exchange Privilege.

As your investment goals change, this Exchange Privilege gives you
the opportunity to switch all or part of your investment from one fund
to another -- quickly by phone -- and at no extra cost to you. The
Exchange Privilege is only part of this exciting new IRA, however.

What else makes this package so attractive? Well, first, the
three funds available to you are well-established -- all with proven
track records. (The funds and The Liberty Account are brought to you be
Federated Securities Corp. exclusively and not by AARP.) And second,
each Liberty Account IRA fund is designed with a specific objective in
mind, to meet your many investment needs. Take a look:

*** AARP U.S. Government Money Market Trust -- for high current
yields from U.S. Government securities and instruments
backed by them;

*** Fund for U.S. Government Securities, Inc. -- for high
current income from high-quality securities with payment of
both principal and interest assured by the U.S. Government
or its instrumentalities; and

*** American Leaders Fund, Inc. -- for growth of capital and
income, from investing in high-quality stocks.

The choice is yours, because now you can invest in one or all of these
funds -- another advantage of The Liberty Account IRA.

You'll find details in the enclosed Liberty Account IRA Start-Up
Kit. I urge you to examine the kit carefully. We've also enclosed
everything you'll need -- application, prospectuses, postage--paid reply
envelope -- to invest in The Liberty Account IRA today!

If you still have questions, please don't hesitate to call us toll-
free: 1/800-245-4770. Our courteous Shareholder Services staff is
always available to help you.

Sincerely,

J. Christopher Donahue

P.S. Please not, the deadline for all 1984 contributors is April 15,
1985 -- regardless of when you file you 1984 tax return. If you
haven't made you 1984 IRA investment yet, I suggest you do it now.

______________________________
______________________________
______________________________
______________________________

Your IRA Mutual Fund
Investment Options
This booklet includes directed, we will distributions at any
important information automatically reinvest time after you reach
about the mutual fund all dividends in mutual age 59 1/2, or
investments we offer fund shares. Capital earlier of you
for your IRA. Please gains, if any, are become disabled.
read it before you distributed every 12 Premature
decide how to invest months and will also be distributions from
your IRA funds. reinvested in mutual your IRA will result
fund shares unless you in penalty taxes.
The three mutual funds authorize us otherwise. See Your Guide to
we offer are: _______________________ IRAs for details.
Contributions
- AARP U.S. Government You must begin
Money Market Trust, a Minimum Contributions. receiving
$3 billion money market The minimum initial distributions by
fund offering current contribution in each April 1 of the
income from U.S. mutual fund is $50. calendar year
Government Securities You may make additional following the later
and instruments backed contributions in any of the calendar year
by U.S. Government amount, as long as you in which you reach
Securities. don't exceed your age 70 1/2 or
maximum contribution retire.
- Fund for U.S. limit for each year.
Government Securities, See your Guide to IRAs ____________________
Inc., a $50 million for details. Investment Advisers
portfolio of long-term for the Funds
government bonds Choice of Investment.
offering current income You may invest in one, AARP U.S. Government
by investing two, or all three of Money Market Trust
exclusively in U.S. these Liberty Account is advised by
Government Securities. funds, as long as you Institutional
don't exceed your Research Corp., as
-American Leaders Fund, maximum contribution affiliate of
Inc., a $50 million limit. You may also Federated Investors,
portfolio of high move your funds from Inc. Fund for U.S.
quality common stocks one fund to another as Government
selected from the often as you choose. Securities, and
"Leaders List" of 100 If we add a new mutual American Leaders
blue chip corporations fund to out program, Fund, Inc. are
offering income and you may invest in that advised by the
capital growth. fund as well. Federated Research
_______________________ Division of The
Making Contributions. Standard Five
Dividends Dividends Your contributions can Insurance Company,
for the three funds are be made by check or also an affiliate of
declared and paid as electronic fund Federated Investors,
follows: transfer. Checks Inc. have
-AARP U.S. Government should be made payable approximately $30
Money Market Trust: to State Street Bank billion in net
declared daily and paid and Trust Company, and assets.
monthly/ mailed to: State
Street Bank and Trust
-Fund for U.S. Company, P.O. Box 1723,
Government Securities: Boston, MA 02105.
declared and paid
monthly. To invest by wire, call
Federated Securities
-American Leaders Fund, Corp. at 1-800-245-
Inc.: declared and 4770.
paid quarterly.
Distributions You
Unless otherwise may begin receiving
Keep this with your IRA records ___________________________
You will need it later to request ___________________________
distributions from your account. ___________________________

IRA Distribution
Instructions

IRA Distribution Instructions

Investor Name
Information Street Address
City State Zip code
Social Security no. Birth date

Distribution Type of distribution
Information __ Transfer to:

__ Removal of excess contribution for tax year 19__
__ Regular distribution. Investor is:
__ at least 59 1/2 years old.
__ deceased.
__ disabled or declared mentally incompetent by a
court.
__ Other. Describe:

Amount and frequency of payments

__ Distribute the entire balance in one payment.
__ Distribute $__________ in one payment, to be followed
by
installment payments.
__ Distribute the balance in equal payments to be made:
__ monthly.
__ quarterly.
__ annually.

Duration of installment payments
__ Over the life of the investor.
__ Over a period of _____ years not to exceed the
investor's life
expectancy.
__ Over the joint life and last survivor lives of the
investor and spouse. (As of January 1, 1985, payments
may be made over a period equal to the joint and last
survivor lives of the investor and any beneficiary.)

__ A period of _____ years not to exceed the joint life
and last survivor expectancy of the depositor and
spouse. (Beginning January 1, 1985, payments may be
made over a period not more than the joint life survivor
expectancy of the investor and any beneficiary.)

Withholding Unless you instruct us not to, we will withhold
federal taxes
Tax Instructions equal to 10% of each distribution. If you do instruct
us not to withhold taxes, you may be required to make
estimated income tax payments throughout the year.

__ Do not deduct withholding tax from distributions.

Signature By signing, below, you certify, under penalties of
perjury, that the social security number you have
given us is correct.

Signature Date

Signature guarantee
(if required by custodian)

Use this form to open your IRA
For Spousal IRAs, two applica-
tions are needed.
IRA Application

Request for Transfer of IRA

Investor Name
Information Street Address
City State Zip code
Social Security no. Birth date

Previous Name
Trustee/ Street Address
Custodian City State Zip code
Information Name on account Account no.
Type of IRA: __ Individual __ Spousal __ Rollover

Transfer IRA Check one:
Instructions __ This will be a new account. A completed
application is attached.
__ The proceeds of this transfer are to be deposited
in my existing Liberty Account IRA.

Allocation for transfer:

Mutual Fund Account No. %

Investor's To Resigning Trustee/Custodian:
Signature I have appointed
State Street Bank and Trust Company
P.O. Box 1723
Boston, MA 02105

as the custodian of my IRA and authorize you to
transfer my IRA to the new custodian. Please sent the
new custodian any documents or records needed to
complete the transfer.

Signature Date

Signature guarantee
(if required by resigning trustee/custodian)

_______________________________________
_______________________________________
_______________________________________
Your Guide to IRAs

_____________________________________

In this booklet, you and your refer to
the investor opening an Individual
Retirement Account (IRA). We, us
and our refer to State Street Bank and
Trust Company, the custodian of your
Individual Retirement Account.

This IRA Guide includes:

- a summary of your Individual Retire-
ment Custodial Account Agreement
with us as custodian of your IRA; and

- a summary of the Disclosure State-
ment describing your IRA.

A copy of the Custodial Agreement is
provided separately in this package. A
copy of the Disclosure Statement is
also provided as required by federal
law. Refer to the Custodial Agreement
and Disclosure Statement for details
of rules governing your IRA. In case
of ambiguity, the Disclosure State-
ment and Custodial Agreement
govern.

Read this IRA Guide carefully. It
summarizes your rights and resposi-
bilities as an IRA depositor and ours
as custodian of your IRA. If you es-
tablish IRAs for yourself and your
spouse, these terms apply to both of
you.
Right to Cancel includes:

You may revoke this IRA on or - wages and salaries'
before seven days after it's - professional fees;
opened. You may revoke it in - commissions;
writing by delivering your notice - bonuses;
of revocation to us or mailing it - tips; and
to us (first class, certified or - other amounts received for
registered mail) at the address personal services
shown below.
It doesn't include:
If you write, be sure:
- interest and dividends
- your letter is in an envelope - rent; or
and is properly addressed and - retirement benefits.
stamped with first class postage;
and Your IRA contribution can be
deducted on your federal income
- the postmark and certification tax return for the year in which
or registration date are not you make the contribution, even
later than seven days after the if you don't itemize deductions.
date you opened the account. Your contributions and earned
interest won't be subject to
If you revoke your IRA, we'll federal income taxes until you
refund your full deposit, without begin to receive distributions.
adjustment for any expenses or
charges State income tax treatment of
your IRA may differ. Details are
_________________________________ available from your state tax
Custodian's Address authority or your own tax
adviser.
State Street Bank and Trust
Company You can choose to invest your IRA
P.O. Box 1723 contributions in any mutual fund
Boston, MA 02105 we offer for IRAs. See Your IRA
Mutual Fund Investment Options
_________________________________ for details on the mutual fund
How an IRA Works investments offered with this
program.
Your IRA has been designed to:
The money you deposit in your IRA
- reduce your tax burden during can't be forfeited for any
your earning years; reason. Your IRA funds will not
be commingled with any other
- provide for your retirement; depositor's property nor will
and they be invested in life
insurance or collectibles.
- provide for your beneficiaries _________________________________
in the event of your death. Making Contributions

Because an IRA is a retirement Except for rollover
plan, there are certain contributions, all contributions
restrictions on the types of to an IRA must be made by check
investments you can make and on or electronic funds transfer.
your rights to withdraw your You may not deposit securities or
money before retirement. property. Assets invested in an
existing IRA may be transferred.
Until the tax year in which you See page 11 of this Guide for
reach age 70 1/2, you may make details.
contributions to your IRA for any
tax year in which you earn We must receive your contribution
compensation. Compensation for any given tax year by the
time you are required to file Amount of contributions. You may
your federal income tax return make annual contributions to your
for that year. For contributions spousal IRAs of up to $2,250 or
made after December 31, 1984, 100% of your earned compensation,
extensions you are granted for whichever is less. You may
filing your federal income tax divide the contributions between
return will not apply to your IRA the accounts however you choose
contributions. as long as no more than $2,000 is
deposited in either account.
For contributions made after
December 31, 1984, you must tell In the event of divorce. If a
us the tax year to which your spousal IRA was set up for you as
contribution applies. We're not a nonworking spouse and you are
required to decide if a divorced or receive a separate
contributions you make is maintenance decree, you may
deductible if it brings your contribute to the account as you
contributions for that year over would to an individual IRA if you
your deductible limit. Our have earned compensation after
accepting a contribution doesn't the divorce. For tax years
mean it's tax-deductible; you beginning after December 31,
must keep track of your 1984, alimony will be considered
contributions. earned compensation.

_________________________________ There are special rules governing
Personal IRAs contributions from alimony
received before December 31,
If you set up an IRA for 1984. Refer to your Disclosure
yourself, you may deposit up to Statement and consult your tax
$2,000 or 100% of your earned adviser.
compensation annual, whichever is
less. _________________________________
Excess Contributions
If you have more than one IRA,
this limit applies to the total Contributions above your
of all your IRAs. If you make deductible limit are excess
any voluntary tax-deductible contributions. If you contribute
contributions to your employer's less than you're allowed in any
tax-qualified retirement plan, one year, you're not allowed to
you must deduct those make excess contributions the
contributions from your allowed next year to make up for it.
IRA contribution. Excess contributions aren't tax-
deductible and you'll be taxed on
_________________________________ interest they earn.
Working Family IRAs
_________________________________
If your spouse has earned Excise Tax on Excess
compensation, you may each set up Contributions
an IRA and take the full amount
of the deduction allowed for There is also a nondeductible
individual IRAs. It doesn't excise tax of 6% of the excess
matter whether you file your contribution each year until it
income tax return jointly or not. is applied as a contribution in a
subsequent year or is returned to
_________________________________ you. The excise tax is payable
Spousal IRAs with your federal income tax
return.
If your spouse doesn't have any _________________________________
earned compensation and you filed Distributions
a joint federal income tax
return, you may set up spousal You may begin receiving
IRAs for the two of you. distributions from your IRA
without penalty:
and any beneficiary.
- after you reach age 59 1/2; or
- payments over a specific
- sooner if you become disabled. number of years not to exceed the
joint life and last survivor
Your IRA may also be distributed expectancy of you and your
to your beneficiary if you die spouse. Beginning January 1,
before you begin to receive 1985, payments may be made over a
distributions. You may designate period not more than the joint
primary and secondary life and last survivor expectancy
beneficiaries to receive the of you and any beneficiary.
proceeds of your IRA and you may
change the beneficiary as often If you choose installment
as you wish. payments over a specified period,
you may still receive the balance
If you are requesting of your IRA in a single payment
distributions and have not at any time. You have to give us
reached age 59 1/2 and are not written notice requesting the
disabled, your distributions may payment. You may also choose to
be subject to a 10% penalty tax. have a portion of your balance
You must tell us how you plan to paid to you in a single large
dispose of the distribution. See payment followed by installment
"Premature Distributions" for payments.
details.
If you don't choose a
You must begin receiving distribution plan by the time
distributions by the end of the you're 70 1/2, we'll distribute
year in which you reach age 70 your IRA to you in a single
1/2. For years beginning after payment by the end of that tax
December 31, 1984, you must begin year. For years beginning after
receiving distributions by April December 31, 1984, you must begin
1 of the calendar year following receiving distributions by April
the later of the calendar year in 1 of the calendar year following
which you turn 70 1/2 or retire. the later of the calendar year in
which you turn 70 1/2 or retire.
_________________________________
Methods of Distribution _________________________________
Minimum Distribution
Single or periodic payments.
Once you reach age 59 1/2, you Once you begin receiving
may choose to have your entire distributions, you're required to
balance distributed to you in a receive a certain minimum
single payment or in distribution from your IRA each
substantially equal monthly, year. Methods for calculating
quarterly, or annual minimum distributions are
installments. described in your Disclosure
Statement.
If you select installment
payments, you can choose. Penalties for distribution less
than the minimum. If you don't
- payments over your lifetime. receive your minimum
distribution, you will be subject
- payments over a specific to a penalty tax equal to 50% of
number of years not to exceed the difference between the
your life expectancy. minimum distribution and the
amount you actually received.
- payments over the joint and You may not deduct this penalty
last survivor lives of you and on your federal income tax
your spouse. Beginning January return.
1, 1985, payments may be made
over a period equal to the joint _________________________________
and last survivor lives of you How Distributions Are Taxed

Amounts distributed are taxable
as ordinary income for the tax
year in which you receive them.
You may use three-year income
averaging when figuring your
income taxes, but you can't use
capital gains or 10-year income
averaging provisions for IRA
distributions.

Withholding taxes. Distributions
from your IRA are subject to a
10% federal withholding tax. You
may:

- instruct us to withhold the
tax before making the
distribution to you; or

- pay the withholding tax
yourself.
file your tax return for the year
Gift taxes. Designating a you made the excess
beneficiary to receive contributions;
distributions is not a transfer
for federal gift tax purposes. - payments to your beneficiaries
after your death; and
_________________________________
In the Event of Your Death - payments rolled over to
another IRA (see "IRA
If you die before receiving all Rollovers").
the money in your IRA, the
balance of your account must _________________________________
normally be distributed to your IRA Rollovers
beneficiary within five years of
your death. If distributions are You may defer taxes on a
being made to your surviving distribution from a qualified
spouse and your spouse dies, then plan by rolling it over into an
the balance must normally be IRA. Rollovers aren't subject to
distributed to your spouse's the annual contribution limits
beneficiary within five years. that apply to personal IRAs and
are permitted only once a year.
However, if distributions are
being made in substantially equal You must roll the funds over
payments over a specific period within 60 days after receiving a
based on your life expectancy or distribution from a qualified
your and your spouse's joint life retirement plan. Any part of you
and last survivor expectancy, distribution that you don't roll
these payments may be continued over into an IRA within 60 days
and the requirement that the will be treated as a premature
account be distributed within distribution.
five years will not apply.
Always check with you attorney or
After your death, your tax adviser about the tax
beneficiary may receive payments consequences of making a rollover
but may not contribute to your contributions.
IRA unless your beneficiary is
your spouse. Your surviving
spouse may treat your IRA as his
or her own.

_________________________________
Premature Distributions

Payments you receive from your
IRA before you reach age 59 1/2
may be considered premature
distributions. Premature
distributions are subject to a
10% penalty tax and to ordinary
income tax.

These transactions are not
considered premature
distributions:

- payments made because you are
disabled.

- withdrawals to correct excess
contributions, if made before you
IRA Transfers _________________________________
Tax Information
You may transfer you IRA from one
custodian to another with no Filing Requirements
adverse tax consequences as long Your IRA contributions and
as you don't actually take distributions must be reported on
possession of your IRA assets. your federal income tax return
You'll have to check with both (Form 1040 or 1040A). You (or
the old and the new custodian for your beneficiary after your
specific IRA transfer procedures. death) must also filed Form 5329
if any excise or penalty tax for
If you transfer your IRA to premature distributions or excess
another custodian, our contributions is imposed.
responsibility ends. We will do
an accounting and give the new _________________________________
custodian all your IRA property IRS Approval
held by us. We will also provide
any account records, within The form of this plan has been
reason. Any expenses will be approved by the Internal Revenue
charged to your account. Service. IRS approval does not
mean that the IRS has endorsed
_________________________________ the merits of the investments
Prohibited Transactions allowed under this plan.

As long as you simply make _________________________________
contributions to and withdrawals Reports and Statements
from your IRA, you probably won't
enter into prohibited We'll provide you and the IRS
transactions that would with any reports or statements
jeopardize your account's that IRA custodians are required
favorable tax status. Prohibited to provide.
transactions include:
You must provide us with any
- using all or part of your IRA information we need to prepare
as collateral for a loan; reports required to file any
income tax form for you.
- borrowing from the account;
_________________________________
- assigning, pledging, or Our Responsibilities
transferring this account in any
way; and As custodian of your IRA, we can
invest your money only as you
- selling property to or buying direct in writing. We give no
property from the account. investment advice. We'll place
your money in any mutual funds
If any portion of your IRA is offered under this plan.
used in a prohibited transaction,
your account loses its tax We will act on any instructions
exemption and will be considered that we believe are genuine and
distributed to you. The value of signed or presented by the proper
your entire account will be people. We are not required to
includable in your gross income investigate any statements made
and will be subject to ordinary in instructions to us.
income tax. If you are under age
59 1/2, you would also be subject We cannot guarantee your balance
to the 10% penalty tax on early against loss or depreciation. In
distributions. We're not particular, growth in the value
required to decide whether or not of your IRA cannot be guaranteed
you have engaged in prohibited or projected, due to the nature
transaction. of this IRA program.

We may resign as custodian of
your IRA by giving you 30 days'
written notice. You may also
close your IRA with us by giving
us 30 days' written notice. Your
IRA balance will be distributed
to the new custodian or trustee
of your choice.

_________________________________
Fees and Charges

Certain fees and charges apply to
this IRA. These fees include a
$5.00 charge for opening the
account and an annual maintenance
fee of $10.00. These fees are
described in more detail on page
7 of the Disclosure Statement.

_________________________________
Change of Address

We'll send any statements or
notice of change in these terms
to the address you have given us.
You should notify us in writing
if you change your address.
__________________________________
__________________________________
__________________________________
__________________________________
Individual Retirement Account
Disclosure Statement

The following information is being pro-
vided to you in accordance with the
requirements of the Internal Revenue Ser-
vice and should be read together with the
Individual Retirement Custodial Account
Agreement (hereinafter referred to as
"IRA") and any prospectuses for the
securities selected by you for the invest-
ment of your contributions to your IRA.
The Employee Retirement Income Secu-
rity Act of 1974 (and the Economic
Recovery Tax Act of 1981 and the Tax
Equity and Fiscal Responsibility Act of
1982) provided an entirely new program
that may enable you to plan for your
retirement with federally tax-deductible
dollars. Individuals eligible to make tax
deductible contributions are those who
have compensation income and are under
age 70 1/2 and certain divorced individuals.
This federal income tax deduction is avail-
able even if you do not other wise itemize
your deductions. In addition, any earnings
on the assets held in your IRA will not be
subject to federal income tax until you
actually begin to receive distributions
from your IRA. The state income tax
treatment of your IRA may differ and
details should be available from your
state taxing authority or your own tax
adviser.

You have the right to revoke your IRA
and receive the entire amount of your
contribution by notifying State Street
Bank and Trust Company, the Custodian
of your IRA, in writing within seven (7)
days of the earlier of the date of purchase
or establishment of your IRA. If you
should decide to revoke your IRA, the
notice should be delivered or mailed to:

State Street Bank and Trust Company
P.O. Box 1723
Boston, MA 02105.

Exhibit 15 under Form N-1A
Exhibit 1 under Item 601/Reg. S-K

FUND FOR U.S. GOVERNMENT SECURITIES, INC.
RULE 12b-1 PLAN

This Plan ("Plan") is adopted as of this 4th day of May, 1993, by
the Board of Directors of Fund for U.S. Government Securities, Inc. (the
"Corporation"), a Maryland corporation with respect to certain classes
of shares ("Classes") of the portfolios of the Corporation (the "Funds")
set forth in exhibits hereto.

1. This Plan is adopted pursuant to Rule 12b-1 under the
Investment Company Act of 1940, as amended ("Act"), so as to allow the
Corporation to make payments as contemplated herein, in conjunction with
the distribution of Classes of the Funds ("Shares").

2. This Plan is designed to finance activities of Federated
Securities Corp. ("FSC") principally intended to result in the sale of
Shares to include: (a) providing incentives to financial institutions
("Institutions") to sell Shares; (b) advertising and marketing of Shares
to include preparing, printing and distributing prospectuses and sales
literature to prospective shareholders and with Institutions; and (c)
implementing and operating the Plan. In compensation for services
provided pursuant to this Plan, FSC will be paid a fee in respect of the
following Classes set forth on the applicable exhibit.

3. Any payment to FSC in accordance with this Plan will be made
pursuant to the "Distributor's Contract" entered into by the Corporation
and FSC. Any payments made by FSC to Institutions with funds received
as compensation under this Plan will be made pursuant to the "Rule 12b-1
Agreement" entered into by FSC and the Institution.

4. FSC has the right (i) to select, in its sole discretion, the
Institutions to participate in the Plan and (ii) to terminate without
cause and in its sole discretion any Rule 12b-1 Agreement.

5. Quarterly in each year that this Plan remains in effect, FSC
shall prepare and furnish to the Board of Directors of the Corporation,
and the Board of Directors shall review, a written report of the amounts
expended under the Plan and the purpose for which such expenditures were
made.

6. This Plan shall become effective with respect to each Class
(i) after approval by majority votes of: (a) the Corporation's Board of
Directors; (b) the members of the Board of the Corporation who are not
interested persons of the Corporation and have no direct or indirect
financial interest in the operation of the Corporation's Plan or in any
related documents to the Plan ("Disinterested Directors"), cast in
person at a meeting called for the purpose of voting on the Plan; and
(c) the outstanding voting securities of the particular Class, as
defined in Section 2(a)(42) of the Act and (ii) upon execution of an
exhibit adopting this Plan with respect to such Class.

7. This Plan shall remain in effect with respect to each Class
presently set forth on an exhibit and any subsequent Classes added
pursuant to an exhibit during the initial year of this Plan for the
period of one year from the date set forth above and may be continued
thereafter if this Plan is approved with respect to each Class at least
annually by a majority of the Corporation's Board of Directors and a
majority of the Disinterested Directors, cast in person at a meeting
called for the purpose of voting on such Plan. If this Plan is adopted
with respect to a Class after the first annual approval by the Directors
as described above, this Plan will be effective as to that Class upon
execution of the applicable exhibit pursuant to the provisions of
paragraph 6(ii) above and will continue in effect until the next annual
approval of this Plan by the Directors and thereafter for successive
periods of one year subject to approval as described above.

8. All material amendments to this Plan must be approved by a
vote of the Board of Directors of the Corporation and of the
Disinterested Directors, cast in person at a meeting called for the
purpose of voting on it.

9. This Plan may not be amended in order to increase materially
the costs which the Classes may bear for distribution pursuant to the
Plan without being approved by a majority vote of the outstanding voting
securities of the Classes as defined in Section 2(a)(42) of the Act.

10. This Plan may be terminated with respect to a particular
Class at any time by: (a) a majority vote of the Disinterested
Directors; or (b) a vote of a majority of the outstanding voting
securities of the particular Class as defined in Section 2(a)(42) of the
Act; or (c) by FSC on 60 days' notice to the Corporation.

11. While this Plan shall be in effect, the selection and
nomination of Disinterested Directors of the Corporation shall be
committed to the discretion of the Disinterested Directors then in
office.

12. All agreements with any person relating to the
implementation of this Plan shall be in writing and any agreement
related to this Plan shall be subject to termination, without penalty,
pursuant to the provisions of Paragraph 10 herein.

13. This Plan shall be construed in accordance with and governed
by the laws of the Commonwealth of Pennsylvania.
EXHIBIT A
to the
12b-1 Plan

FUND FOR U.S. GOVERNMENT SECURITIES, INC.

Class C Shares

This Plan is adopted by Fund for U.S. Government Securities, Inc.
with respect to the Class of Shares of the Fund of the Corporation set
forth above.

In compensation for the services provided pursuant to this Plan,
FSC will be paid a monthly fee computed at the annual rate of .75 of 1%
of the average aggregate net asset value of the Class C Shares of Fund
for U.S. Government Securities, Inc. held during the month.

Witness the due execution hereof this 4th day of May, 1993.

FUND FOR U.S. GOVERNMENT
SECURITIES, INC.

By:/s/ J. Christopher Donahue
President

Exhibit 15 (ii) under
Form N-1A
Exhibit 10 under Item
609/Reg.S/K

EXHIBIT C
to the
12b-1 Plan

FUND FOR U.S. GOVERNMENT SECURITIES, INC.

Class B Shares

This Plan is adopted by Fund for U.S. Government Securities, Inc.
with respect to the Class of Shares of the Fund of the Corporation set
forth above.

In compensation for the services provided pursuant to this Plan,
FSC will be paid a monthly fee computed at the annual rate of .75 of 1%
of the average aggregate net asset value of the Class B Shares of Fund
for U.S. Government Securities, Inc. held during the month.

Witness the due execution hereof this 1st day of June, 1994.

FUND FOR U.S. GOVERNMENT
SECURITIES, INC.

By: /s/J. Christopher Donahue
President

Exhibit 16 under Rule N-1A
Exhibit 99 under Iten 609/Reg. S-K
<TABLE>
<CAPTION>
DECLARED: MONTHLY Schedule for Computation FUND: FUND FOR U.S. GOVERNMENT SECURITIES, INC.
PAID; MONTHLY of Fund Performance Data Performance ONE YEAR ending 3-31-88
------------------------ FYE: MARCH 31
Average Total Return
------------------------

ONE YEAR Ending 3-31-88
Initial Investment of: $1,000.00 on 3-31-78
Offering Price/Shares = $9.85
NAV = $9.41

<S> <C> <C> <C> <C> <C> <C> <C>
BEGINNING REINVESTMENT ENDING TOTAL
REINVESTMENT PERIOD DIVIDEND CAPITAL GAIN PRICE PERIOD PERIOD END INVESTMENT
DATES SHARE BASE PER SHARE PER SHARE PER SHARE SHARE BASE PRICE VALUE
---------------------- -------- ------------ ------------ ---------- ----------
3-31-78 101.523 0.000000000 0.00000 $9.41 101.523 $9.41 $955.33
4-19-78 101.523 0.057000000 0.00000 $9.39 102.139 $9.39 $959.09
5-17-78 102.139 0.057000000 0.00000 $9.33 102.763 $9.33 $958.78
6-21-78 102.763 0.057000000 0.00000 $9.17 103.402 $9.17 $948.20
7-19-78 103.402 0.057000000 0.00000 $9.16 104.045 $9.16 $953.06
8-16-78 104.045 0.057000000 0.00000 $9.21 104.689 $9.21 $964.19
9-20-78 104.689 0.058000000 0.00000 $9.24 105.346 $9.24 $973.40
10-18-78 105.346 0.058000000 0.00000 $9.19 106.011 $9.19 $974.24
11-15-78 106.011 0.058000000 0.00000 $9.13 106.685 $9.13 $974.03
12-20-78 106.685 0.060000000 0.00000 $8.99 107.397 $8.99 $965.50
1-17-79 107.397 0.060000000 0.00000 $8.94 108.118 $8.94 $966.57
2-21-79 108.118 0.060000000 0.00000 $9.02 108.837 $9.02 $981.71
3-21-79 108.837 0.060000000 0.00000 $9.02 109.561 $9.02 $988.24
4-18-79 109.561 0.060000000 0.00000 $8.98 110.293 $8.98 $990.43
5-16-79 110.293 0.060000000 0.00000 $8.81 111.044 $8.81 $978.30
6-20-79 111.044 0.060000000 0.00000 $9.06 111.779 $9.06 $1012.72
7-18-79 111.779 0.060000000 0.00000 $9.06 112.519 $9.06 $1019.43
8-15-79 112.519 0.060000000 0.00000 $9.03 113.267 $9.03 $1022.80
9-19-79 113.267 0.060000000 0.00000 $8.78 114.041 $8.78 $1001.28
10-17-79 114.041 0.060000000 0.00000 $8.29 114.867 $8.29 $952.24
11-21-79 114.867 0.060000000 0.00000 $8.13 115.714 $8.13 $940.76
12-19-79 115.714 0.060000000 0.00000 $8.29 116.552 $8.29 $966.21
1-16-80 116.552 0.060000000 0.00000 $8.04 117.422 $8.04 $944.07
2-20-80 117.422 0.060000000 0.00000 $7.22 118.397 $7.22 $854.83
3-19-80 118.397 0.060000000 0.00000 $7.30 119.370 $7.30 $871.40
4-16-80 119.370 0.060000000 0.00000 $7.82 120.286 $7.82 $940.64
5-21-80 120.286 0.060000000 0.00000 $8.47 121.138 $8.47 $1026.04
6-18-80 121.138 0.060000000 0.00000 $8.90 121.955 $8.90 $1085.40
7-16-80 121.955 0.060000000 0.00000 $8.39 122.827 $8.39 $1030.52
8-20-80 122.827 0.060000000 0.00000 $7.88 123.763 $7.88 $975.25
9-17-80 123.763 0.060000000 0.00000 $7.78 124.717 $7.78 $970.30
10-15-80 124.717 0.060000000 0.00000 $7.83 125.673 $7.83 $984.02
11-19-80 125.673 0.060000000 0.00000 $7.29 126.707 $7.29 $923.69
12-17-80 126.707 0.060000000 0.00000 $7.07 127.782 $7.07 $903.42
1-21-81 127.782 0.060000000 0.00000 $7.40 128.818 $7.40 $953.26
2-18-81 128.818 0.060000000 0.00000 $7.16 129.898 $7.16 $930.07

3-18-81 129.898 0.060000000 0.00000 $7.33 130.961 $7.33 $959.95
4-15-81 130.961 0.060000000 0.00000 $6.99 132.085 $6.99 $923.28
5-20-81 132.085 0.060000000 0.00000 $6.70 133.268 $6.70 $892.90
6-17-81 133.268 0.060000000 0.00000 $7.11 134.393 $7.11 $955.53
7-15-81 134.393 0.060000000 0.00000 $6.76 135.586 $6.76 $916.56
8-19-81 135.586 0.060000000 0.00000 $6.49 136.839 $6.49 $888.09
9-16-81 136.839 0.060000000 0.00000 $6.17 138.214 $6.17 $852.78
10-21-81 138.214 0.062000000 0.00000 $6.23 139.590 $6.23 $869.64
11-18-81 139.590 0.062000000 0.00000 $6.99 140.828 $6.99 $984.39
12-16-81 140.828 0.062000000 0.00000 $6.80 142.112 $6.80 $966.36
1-20-82 142.112 0.062000000 0.00000 $6.40 143.488 $6.40 $918.33
2-17-82 143.488 0.062000000 0.00000 $6.48 144.861 $6.48 $$938.70
3-17-82 144.861 0.062000000 0.00000 $6.87 146.169 $6.87 $1004.18
4-21-82 146.169 0.062000000 0.00000 $7.00 147.463 $7.00 $1032.24
5-19-82 147.463 0.062000000 0.00000 $6.95 148.779 $6.95 $1034.01
6-16-82 148.779 0.063000000 0.00000 $6.86 150.145 $6.86 $1030.00
7-21-82 150.145 0.063000000 0.00000 $7.08 151.481 $7.08 $1072.49
8-18-82 151.481 0.063000000 0.00000 $7.68 152.724 $7.68 $1172.92
9-15-82 152.724 0.063000000 0.00000 $7.66 153.980 $7.66 $1179.49
10-20-82 153.980 0.063000000 0.00000 $8.28 155.152 $8.28 $1284.65
11-17-82 155.152 0.063000000 0.00000 $8.27 156.333 $8.27 $1292.88
12-15-82 156.333 0.063000000 0.00000 $8.24 157.529 $8.24 $1298.04
1-21-83 157.529 0.063000000 0.00000 $8.41 158.709 $8.41 $1334.74
2-18-83 158.709 0.063000000 0.00000 $8.42 159.896 $8.42 $1346.33
3-18-83 159.896 0.063000000 0.00000 $8.56 161.073 $8.56 $1378.79
4-15-83 161.073 0.063000000 0.00000 $8.65 162.246 $8.65 $1403.43
5-20-83 162.246 0.063000000 0.00000 $8.63 163.431 $8.63 $1410.41
6-17-83 163.431 0.070000000 0.00000 $8.54 164.770 $8.54 $1407.14
7-15-83 164.770 0.070000000 0.00000 $8.21 166.175 $8.21 $1364.30
8-19-83 166.175 0.070000000 0.00000 $8.14 167.604 $8.14 $1364.30
9-16-83 167.604 0.070000000 0.00000 $8.16 169.042 $8.16 $1379.38
10-21-83 169.042 0.070000000 0.00000 $8.37 170.456 $8.37 $1426.71
11-18-83 170.456 0.070000000 0.00000 $8.37 171.881 $8.37 $1438.65
12-16-83 171.881 0.080000000 0.00000 $8.31 173.536 $8.31 $1442.08
1-20-84 173.536 0.080000000 0.00000 $8.50 175.169 $8.50 $1448.94
2-17-84 175.169 0.080000000 0.00000 $8.44 176.829 $8.44 $1492.44
3-16-84 176.829 0.080000000 0.00000 $8.32 178.530 $8.32 $1485.37
4-19-84 178.530 0.080000000 0.00000 $8.14 180.284 $8.14 $1467.51
5-19-84 180.284 0.080000000 0.00000 $7.89 182.112 $7.89 $1436.87
6-15-84 182.112 0.080000000 0.00000 $7.86 183.966 $7.86 $1445.97
7-20-84 183.966 0.082500000 0.00000 $7.86 185.897 $7.86 $1461.15
8-17-84 185.897 0.082500000 0.00000 $7.99 187.816 $7.99 $1500.65
9-21-84 187.816 0.082500000 0.00000 $8.18 189.711 $8.18 $1551.83
10-19-84 189.711 0.082500000 0.00000 $8.30 191.596 $8.30 $1590.25
11-16-84 191.596 0.084000000 0.00000 $8.33 193.528 $8.33 $1612.09
12-21-84 193.528 0.084000000 0.00000 $8.45 195.452 $8.45 $1651.57
1-18-85 195.452 0.084000000 0.00000 $8.42 197.402 $8.42 $1662.12
2-15-85 197.402 0.084000000 0.00000 $8.41 199.374 $8.41 $1676.73
3-15-85 199.374 0.084000000 0.00000 $8.27 201.399 $8.27 $1665.57
4-19-85 201.399 0.084000000 0.00000 $8.45 203.401 $8.45 $1718.74
5-17-85 203.401 0.084000000 0.00000 $8.51 205.409 $8.51 $1748.03
6-21-85 205.409 0.084000000 0.00000 $8.61 207.413 $8.61 $1785.82
7-19-85 207.413 0.084000000 0.00000 $8.72 209.411 $8.72 $1826.06
8-16-85 209.411 0.084000000 0.00000 $8.65 211.444 $8.65 $1828.99
9-30-85 211.444 0.082000000 0.00000 $8.71 213.435 $8.71 $1859.02
10-31-85 213.435 0.082000000 0.00000 $8.75 215.435 $8.75 $1885.06
11-30-85 215.435 0.082000000 0.00000 $8.82 217.438 $8.82 $1917.80
12-31-85 217.438 0.082000000 0.00000 $8.77 219.471 $8.77 $1924.76
1-31-86 219.471 0.082000000 0.00000 $8.75 221.528 $8.75 $1938.37
2-28-86 221.528 0.082000000 0.00000 $8.73 223.608 $8.73 $1952.10
3-31-86 223.608 0.082000000 0.00000 $8.77 225.699 $8.77 $1979.38
4-30-86 225.699 0.077500000 0.00000 $8.71 227.707 $8.71 $1983.33
5-31-86 227.707 0.077500000 0.00000 $8.61 229.757 $8.61 $1978.21
6-30-86 229.757 0.070000000 0.00000 $8.56 231.636 $8.56 $1982.80
7-31-86 231.636 0.070000000 0.00000 $8.62 233.517 $8.62 $2012.92
8-31-86 233.517 0.065000000 0.00000 $8.60 235.282 $8.60 $2023.42
9-30-86 235.282 0.065000000 0.00000 $8.61 237.058 $8.61 $2041.07
10-31-86 237.058 0.065000000 0.00000 $8.60 238.850 $8.60 $2054.11
11-30-86 238.058 0.062500000 0.00000 $8.59 240.588 $8.59 $2066.65
12-31-86 240.588 0.062500000 0.00000 $8.62 242.332 $8.62 $2088.90
1-31-87 242.332 0.062500000 0.00000 $8.60 244.093 $8.60 $2099.20
2-28-87 244.093 0.062500000 0.00000 $8.61 245.865 $8.61 $2116.90
3-31-87 245.865 0.062500000 0.00000 $8.57 247.658 $8.57 $2122.43
4-30-87 247.658 0.062500000 0.00000 $8.41 249.499 $8.41 $2098.28
5-31-87 249.499 0.650000000 0.00000 $8.37 251.436 $8.37 $2104.52
6-30-87 251.436 0.650000000 0.00000 $8.44 253.373 $8.44 $2138.47
7-31-87 253.373 0.650000000 0.00000 $8.41 255.331 $8.41 $2147.33
8-31-87 255.331 0.650000000 0.00000 $8.38 257.311 $8.38 $2156.27
9-30-87 257.311 0.650000000 0.00000 $8.16 259.361 $8.16 $2116.39
10-31-87 259.361 0.650000000 0.00000 $8.23 261.410 $8.23 $2151.40
11-30-87 261.410 0.650000000 0.00000 $8.28 263.462 $8.28 $2181.46
12-23-87 263.462 0.650000000 0.00000 $8.27 265.532 $8.27 $2195.95
1-31-88 265.532 0.650000000 0.00000 $8.47 267.570 $8.47 $2266.32
2-29-88 267.570 0.650000000 0.00000 $8.49 269.619 $8.49 $2289.06
3-31-88 269.619 0.650000000 0.00000 $8.41 271.702 $8.41 $2285.50

$1,000 (1+T) = Ending Redeemable Value
T = 128.55%

(1+T) = Average Annual Total Return (A)
A = 8.62%
</TABLE>

<S> <C>

<ARTICLE> 6
<SERIES>
<NUMBER> 1
<NAME> Fund for U.S. Government Securities,
Inc.
Class A Shares

<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> Mar-31-1995
<PERIOD-END> Mar-31-1995
<INVESTMENTS-AT-COST> 1,751,488,987
<INVESTMENTS-AT-VALUE> 1,742,188,571
<RECEIVABLES> 87,097,783
<ASSETS-OTHER> 3,175
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1,829,289,529
<PAYABLE-FOR-SECURITIES> 57,998,194
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 288,786,209
<TOTAL-LIABILITIES> 346,784,403
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1,691,107,720
<SHARES-COMMON-STOCK> 178,322,326
<SHARES-COMMON-PRIOR> 214,485,582
<ACCUMULATED-NII-CURRENT> 11,523,255
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (210,825,433)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (9,300,416)
<NET-ASSETS> 1,367,710,086
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 131,884,840
<OTHER-INCOME> 0
<EXPENSES-NET> 15,877,841
<NET-INVESTMENT-INCOME> 116,006,999
<REALIZED-GAINS-CURRENT> (94,672,552)
<APPREC-INCREASE-CURRENT> 42,533,141
<NET-CHANGE-FROM-OPS> 63,867,588
<EQUALIZATION> (2,842,296)
<DISTRIBUTIONS-OF-INCOME> 106,507,664
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 11,722,674
<NUMBER-OF-SHARES-REDEEMED> 56,859,738
<SHARES-REINVESTED> 8,973,807
<NET-CHANGE-IN-ASSETS> (315,972,723)
<ACCUMULATED-NII-PRIOR> 11,644,224
<ACCUMULATED-GAINS-PRIOR> (135,730,309)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 9,463,243
<INTEREST-EXPENSE> 9,860,251
<GROSS-EXPENSE> 16,220,514
<AVERAGE-NET-ASSETS> 1,578,580,664
<PER-SHARE-NAV-BEGIN> 0.000
<PER-SHARE-NII> 0.000
<PER-SHARE-GAIN-APPREC> 0.000
<PER-SHARE-DIVIDEND> 0.000
<PER-SHARE-DISTRIBUTIONS> 0.000
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 0.000
<EXPENSE-RATIO> 95
<AVG-DEBT-OUTSTANDING> 216,873,177
<AVG-DEBT-PER-SHARE> 1.065

</TABLE>

<S> <C>

<ARTICLE> 6
<SERIES>
<NUMBER> 2
<NAME> Fund for U.S. Government Securities,
Inc.
Class B, C and Select Shares

<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> Mar-31-1995
<PERIOD-END> Mar-31-1995
<INVESTMENTS-AT-COST> 1,751,488,987
<INVESTMENTS-AT-VALUE> 1,742,188,571
<RECEIVABLES> 87,097,783
<ASSETS-OTHER> 3,175
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1,829,289,529
<PAYABLE-FOR-SECURITIES> 57,998,194
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 288,786,209
<TOTAL-LIABILITIES> 346,784,403
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1,691,107,720
<SHARES-COMMON-STOCK> 14,963,932
<SHARES-COMMON-PRIOR> 13,328,980
<ACCUMULATED-NII-CURRENT> 11,523,255
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (210,825,433)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (9,300,416)
<NET-ASSETS> 114,795,040
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 131,884,840
<OTHER-INCOME> 0
<EXPENSES-NET> 15,877,841
<NET-INVESTMENT-INCOME> 116,006,999
<REALIZED-GAINS-CURRENT> (94,672,552)
<APPREC-INCREASE-CURRENT> 42,533,141
<NET-CHANGE-FROM-OPS> 63,867,588
<EQUALIZATION> (2,842,296)
<DISTRIBUTIONS-OF-INCOME> 6,778,008
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 7,253,212
<NUMBER-OF-SHARES-REDEEMED> 5,983,062
<SHARES-REINVESTED> 364,802
<NET-CHANGE-IN-ASSETS> (315,972,723)
<ACCUMULATED-NII-PRIOR> 11,644,224
<ACCUMULATED-GAINS-PRIOR> (135,730,309)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 9,463,243
<INTEREST-EXPENSE> 9,860,251
<GROSS-EXPENSE> 16,220,514
<AVERAGE-NET-ASSETS> 1,578,580,664
<PER-SHARE-NAV-BEGIN> 0.000
<PER-SHARE-NII> 0.000
<PER-SHARE-GAIN-APPREC> 0.000
<PER-SHARE-DIVIDEND> 0.000
<PER-SHARE-DISTRIBUTIONS> 0.000
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 0.000
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 216,873,177
<AVG-DEBT-PER-SHARE> 1.065

</TABLE>