ALLIANCE BALANCED SHARES INC, 485BPOS, 1995-06-01

ALLIANCE BALANCED SHARES INC
485BPOS, 1995-06-01

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As filed with the Securities and Exchange
Commission on June 1, 1995

File No. 2-10988
811-134
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549
_______________________________________

FORM N-lA

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF l933 X

Pre-Effective Amendment No.

Post-Effective Amendment No. 82 X

and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF l940 X

Amendment No. 22 X

_______________________________________

Alliance Balanced Shares, Inc.
(Exact Name of Registrant as Specified in Charter)

Alliance Capital Management L.P.
1345 Avenue of the Americas, New York, New York l0105
(Address of Principal Executive Office) (Zip Code)

Registrant's Telephone Number, including Area Code: (800)221-5672

________________________________________________________________
EDMUND P. BERGAN, JR.
Alliance Capital Management L.P.
1345 Avenue of the Americas
New York, New York l0105
(Name and address of agent for service)

It is proposed that this filing will become effective (check
appropriate box)

X immediately upon filing pursuant to paragraph (b)
_____ on (date) pursuant to paragraph (b)
_____ 60 days after filing pursuant to paragraph (a)
_____ on (date) pursuant to paragraph (a)(i).
_____ 75 days after filing pursuant to paragraph (a)(ii)

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_____ on (date) pursuant to paragraph (a)(ii) of rule 485.

If appropriate, check the following box:

_____ this post-effective amendment designates a new
effective date for a previously filed post-effective amendment.

Registrant has registered an indefinite number of
shares of Common Stock pursuant to Rule 24f-2 under the
Investment Company Act of 1940. Registrant has filed a notice
pursuant to such Rule for its fiscal year ended July 31, 1994 on
September 23, 1994.

<PAGE>

CROSS REFERENCE SHEET
(as required by Rule 404(c))

N-lA Item No. Location in Prospectus (Caption)
_____________ ______________________

PART A

Item l. Cover Page Cover Page

Item 2. Synopsis Expense Information

Item 3. Condensed Financial Information Financial Highlights

Item 4. General Description of Registrant Description of the
Fund

Item 5. Management of the Fund Management of the
Fund;
General Information

Item 6. Capital Stock and Other Securities General Information;
Dividends,
Distributions and
Taxes

Item 7. Purchase of Securities
Being Offered Purchase and Sale of
Shares; General
Information

Item 8. Redemption or Repurchase Purchase and Sale of
Shares

Item 9. Pending Legal Proceedings Not Applicable

PART B Location in Statement of
Additional Information (Caption)
________________________

Item l0. Cover Page Cover Page

Item ll. Table of Contents Cover Page

Item l2. General Information and History Management of the
Fund; General
Information

Item l3. Investment Objectives and Policies Investment
Objective,
Policies and

<PAGE>

Restrictions

Item l4. Management of the Registrant Management of the
Fund

Item l5. Control Persons and Principal
Holders of Securities Management of the
Fund; General
Information

Item l6. Investment Advisory and
Other Services Management of the
Fund

Item l7. Brokerage Allocation and
Other Practices Allocation of
Portfolio Brokerage

Item l8. Capital Stock and Other Securities General Information

Item l9. Purchase, Redemption and Pricing Purchase and
Redemption of
Shares; Net Asset
Value

Item 20. Tax Status Investment
Objective,
Policies and
Restrictions;
Dividends,
Distributions and
Taxes

Item 21. Underwriters General Information

Item 22. Calculation of Performance Data Not Applicable

Item 23. Financial Statements Financial
Statements;
Report of
Independent
Accountants

<PAGE>

Alliance Capital [Logo] The Alliance Stock Funds
_________________________________________________________________

June [ ], 1995

Supplement to Prospectus dated February 1, 1995

This supplement sets forth unaudited per share income and
capital change information for the periods indicated for Alliance
All-Asia Investment Fund, Inc. ("All-Asia Fund"), pursuant to the
requirements of the Securities and Exchange Commission applicable
to registered investment companies in their first year of
operations and for Alliance International Fund ("International
Fund"), Alliance Worldwide Privatization Fund, Inc. ("Worldwide
Privatization Fund"), Alliance New Europe Fund, Inc. ("New Europe
Fund"), Alliance Global Small Cap Fund, Inc. ("Global Small Cap
Fund"), Strategic Balanced Fund and Alliance Balanced Shares,
Inc. ("Balanced Shares") (collectively, the "Funds"). Unaudited
financial statements and related notes as of the same dates for
the respective Funds have also been added to the Statement of
Additional Information for each Fund.

The following information supplements the information under
the heading "Financial Information" on pages 7 through 15 of the
Prospectus.

<PAGE>

Net Realized
and Net Increase
Net Asset Unrealized (Decrease) Dividends Distributions
Value Net Gain in Net Asset from Net from Net
Beginning Investment (Loss) on Value from Investment Realized
Fiscal Period of Period Income (Loss) Investments Operations Income Gains
_____________ _________ _____________ ___________ ____________ ___________ _____________

International Fund

Class A
Six months
ended 12/31/94.... $18.38 $(.05) $(.26) $(.31) $0.00 $(1.62)
Class B
Six months
ended 12/31/94.... $17.90 $(.06)(b) $(.31) $(.37) $0.00 $(1.62)
Class C
Six months
ended 12/31/94.... $17.91 $(.03) $(.34) $(.37) $0.00 $(1.62)

Worldwide
Privatization Fund

Class A
Six months
ended 12/31/94.... $9.75 $(.01) $.24 $.23 $0.00 $0.00
Class B
Six months
ended 12/31/94.... $9.74 $(.03) $.23 $.20 $0.00 $0.00

New Europe Fund

Class A
Six months
ended 1/31/95..... $12.66 $(.07) $.23 $.16 $(.09) $0.00
Class B
Six months
ended 1/31/95..... $12.41 $(.11) $.22 $.11 $(.09) $0.00
Class C
Six months
ended 1/31/95..... $12.42 $(.12) $.23 $.11 $(.09) $0.00

All Asia Fund

Class A
11/28/94**

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- 4/30/95......... $10.00 $.11(c) $.13 $.24 $0.00 $0.00
Class B
11/18/94**
- 4/30/95......... $10.00 $.09(c) $.13 $.22 $0.00 $0.00
Class C
11/28/94**
- 4/30/95......... $10.00 $.08(c) $.16 $.24 $0.00 $0.00

</TABLE>

<PAGE>

Total Net Assets Ratio of Net
Total Net Asset Investment At End of Ratio Of Investment
Dividends Value Return Based Period Expenses Income (Loss)
And End of On Net Asset (000's) To Average To Average Portfolio
Distributions Period Value (a) omitted) Net Assets Net Assets Turnover Rate
_____________ _________ _____________ ____________ ____________ ___________ _____________

$(1.62) $16.45 (1.57)% $176,845 1.77%* (.46)%* 57%

$(1.62) $15.91 (1.94)% $49,532 2.56%* (1.32)%* 57%

$(1.62) $15.92 (1.94)% $29,173 2.56%* (1.29)%* 57%

$0.00 $9.98 2.36% $14,226 2.30%* (.04)%* 16%

$0.00 $9.94 2.05% $81,181 2.99%* (.75)%* 16%

$(.09) $12.73 1.29% $76,095 2.04%* (.89)%* 39%

$(.09) $12.43 .91% $29,978 2.74%* (1.59)%* 39%

$(.09) $12.44 .91% $8,863 2.73%* (1.59)%* 39%

$0.00 $10.24 2.40% $1,917 .19%*(d) 3.44%* 51%

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$0.00 $10.22 2.20% $3,019 .90%*(d) 2.73%* 51%

$0.00 $10.24 2.40% $185 .71%*(d) 2.87%* 51%

</TABLE>

<PAGE>

Net Realized
and Net Increase
Net Asset Unrealized (Decrease) Dividends Distributions
Value Net Gain in Net Asset from Net from Net
Beginning Investment (Loss) on Value from Investment Realized
Fiscal Period of Period Income (Loss) Investments Operations Income Gains
_____________ _________ ____________ ____________ ____________ ___________ _____________
<S> <C> <C> <C> <C> <C> <C>

Global Small
Cap Fund

Class A
Six months
ended 1/31/95..... $11.08 $(.04)(b) $(.23) $(.27) $(2.11) $0.00
Class B
Six months
ended 1/31/95..... $10.78 $(.02) $(.28) $(.30) $(2.11) $0.00
Class C
Six months
ended 1/31/95..... $10.79 $(.09) $(.22) $(.31) $(2.11) $0.00

Strategic
Balanced Fund

Class A
Six months
ended 1/31/95..... $16.26 $.18(c) $(.47) $(.29) $(.22) $(.04)
Class B
Six months
ended 1/31/95..... $14.10 $.11(c) $(.40) $(.29) $(.12) $(.04)
Class C
Six months
ended 1/31/95..... $14.11 $.10(c) $(.39) $(.29) $(.12) $(.04)

Balanced Shares

Class A
Six months
ended 1/31/95..... $13.38 $.23 $(.23) $0.00 $(.20) $(.02)
Class B
Six months
ended 1/31/95..... $13.23 $.16 $(.21) $(.05) $(.16) $(.02)
Class C
Six months
ended 1/31/95..... $13.24 $.16 $(.21) $(.05) $(.16) $(.02)

</TABLE>

<PAGE>

$(2.11) $8.70 (2.26)% $53,830 2.52%* (1.24)%* 65%

$(2.11) $8.37 (2.61)% $4,574 3.24%* (2.00)%* 65%

$(2.11) $8.37 (2.73)% $1,131 3.21%* (1.96)%* 65%

$(.26) $15.71 (1.79)% $9,102 1.40%*(d) 2.14%* 34%

$(.16) $13.65 (2.07)% $39,008 2.10%*(d) 1.44%* 34%

$(.16) $13.66 (2.07)% $4,119 2.10%*(d) 1.45%* 34%

$(.22) $13.16 .09% $146,840 1.26%* 3.36%* 61%

$(.18) $13.00 (.32)% $13,350 2.04%* 2.58%* 61%

$(.18) $13.01 (.32)% $4,690 2.03%* 2.56%* 61%

___________________________________________
* Annualized
** Commencement of operations

<PAGE>

(a) Total investment return is calculated assuming an initial investment made at the net asset value at
the beginning of the period, reinvestment of all dividends and distributions at the net asset value
during the period, and a redemption on the last day of the period. Initial sales charge or
contingent deferred sales charge is not reflected in the calculation of total investment return.
Total investment returns calculated for periods of less than one year are not annualized.
(b) Based on average shares outstanding.
(c) Net of fee waived and expenses reimbursed by Alliance
(d) Net of expenses waived/reimbursed. If All-Asia Fund had borne all expenses, the expense ratios
would have been, with respect to Class A shares 11.71% (annualized), with respect to Class B shares
12.35% (annualized) and with respect to Class C shares 11.80% (annualized). If Strategic Balanced
Fund had borne all expenses, the expense ratios would have been, with respect to Class A shares
1.59% (annualized) and with respect to Class B and Class C shares 2.29% (annualized).
</TABLE>

Additionally, as of May 1, 1995, the portfolio manager of
Strategic Balanced Fund is Bruce W. Calvert. Mr. Calvert is a
Vice Chairman and the Chief Investment Officer of Alliance
Capital Management Corporation, the sole general partner of
Alliance Capital Management L.P., with which he has been
associated since prior to 1990.

8
00250157.AS5

<PAGE>

Prospectus for Alliance Balanced Shares, Inc. - Incorporated by
reference to Alliance Balanced Shares, Inc. Prospectus in Post-
Effective Amendment No. 81 of Registration Statement on Form N-1A
(File Nos. 2-10988 and 811-134), filed November 28, 1994.

00250157.AS5

<PAGE>

(Logo)(R)

ALLIANCE BALANCED SHARES

P.O. Box 1520, Secaucus, New Jersey 07096-1520
Toll Free (800) 221-5672
For Literature: Toll Free (800) 227-4618
_________________________________________________________________

STATEMENT OF ADDITIONAL INFORMATION

November 1, 1994 (amended June 1, 1995)

________________________________________________________________
This Statement of Additional Information is not a prospectus but
supplements and should be read in conjunction with the current
Prospectus. Copies of such Prospectus may be obtained by
contacting Alliance Fund Services, Inc. at the address or the
"Literature" telephone number shown above.

TABLE OF CONTENTS
Page

Description of the Fund............................. 3

Management of the Fund.............................. 8

Expenses of the Fund................................ 16

Purchase of Shares.................................. 19

Redemption and Repurchase of Shares................. 34

Shareholder Services ............................... 37

Net Asset Value..................................... 43

Dividends, Distributions and Taxes.................. 44

Portfolio Transactions.............................. 46

General Information................................. 48

Report of Independent Accountants and Financial
Statements.......................................... 52

Appendix A.......................................... A-1

<PAGE>

_________________________________________________________________

(R): This registered service mark used under license from the
owner, Alliance Capital Management L.P.

<PAGE>

_________________________________________________________________

DESCRIPTION OF THE FUND
_________________________________________________________________

Except as otherwise indicated, the investment policies of
Alliance Balanced Shares, Inc. (the "Fund') are not "fundamental
policies" within the meaning of the Investment Company Act of
1940, as amended (the "1940 Act"), and may, therefore, be changed
by the Board of Directors without a shareholder vote. However,
the Fund will not change its investment policies without
contemporaneous written notice to its shareholders. There can
be, of course, no assurance that the Fund will achieve its
investment objective.

Investment Objective

The investment objective of the Fund is to achieve a high
return through a combination of current income and capital
appreciation.

How the Fund Pursues its Objective

The Fund has adopted as a fundamental policy that it be a
"balanced fund"; this fundamental policy cannot be changed
without the approval of shareholders. As an investment policy,
the Fund will not purchase a security if as a result of such
purchase less than 25% of its total assets will be in fixed-
income senior securities (including short- and long-term debt
securities, preferred stocks, and convertible debt securities and
preferred stocks to the extent their values is attributable to
their fixed-income characteristics); this investment policy may
be changed by the Fund's Board of Directors but only with 60
days' prior shareholder notice and in accordance with the 1940
Act and the Securities and Exchange Commission (the
"Commission"). Subject to such restrictions, the percentage of
the Fund's assets invested in each type of security at any time
shall be in accordance with the judgment of the management.

Additional Investment Policies and Practices

The following additional investment policies supplement those
set forth above.

The Fund's assets are invested in U.S. Government and agency
obligations, bonds whether convertible or nonconvertible (except
that only that portion of the value of the convertible bonds
attributable to their fixed-income characteristics shall be used
for purposes of meeting the 25% fixed-income securities
requirement), senior debt securities (as listed above), and
preferred and common stocks in such proportions and of such type

<PAGE>

as are deemed best adapted to the current economic and market
outlooks. At July 31, 1994, the amount invested in common stocks
was approximately 41.8% of the total assets. The Fund engages
primarily in holding securities for investment and not for
trading purposes. Purchases and sales of portfolio securities
are made at such times and in such amounts as are deemed
advisable in the light of market, economic and other conditions,
irrespective of the volume of portfolio turnover.

Investment in Covered Call Options. Subject to market
conditions, the Fund may try to realize income by writing covered
call option contracts provided that the option is listed on a
domestic securities exchange and that no option will be written
if, as a result, more than 25% of the Fund's assets are subject
to call options. A covered call option is an option on a
security which the Fund owns or can acquire by converting a
convertible security it owns. The purchaser of the option
acquires the right to buy the security from the Fund at a fixed
exercise price at any time prior to the expiration of the option,
regardless of the market price of the security at that time. A
security on which an option has been written will be held in
escrow by the Fund's custodian until the option expires, is
exercised, or a closing purchase transaction is made.

The Fund thus forgoes the opportunity to profit from an
increase in the market price in the underlying security above the
exercise price, in return for the premium it receives from the
purchaser of the option. The Fund's management believes that
such premiums will increase the Fund's income without subjecting
it to substantial risks.

When a security is sold from the Fund's portfolio against
which a call option has been written, the Fund will effect a
closing purchase transaction so as to close out any existing call
option on that security. The Fund will realize a profit or loss
from a closing purchase transaction if the amount paid to
purchase a call option is less or more than the amount received
as a premium from the writing thereof. A closing purchase
transaction cannot be made if trading in the option has been
suspended.

The premium received by the Fund upon writing a call option
will increase the Fund's assets, and a corresponding liability
will be recorded and subsequently adjusted from day to day to the
current value of the option written. For example, if the current
value of the option exceeds the premium received, the excess
would be an unrealized loss and, conversely, if the premium
exceeds the current value, such excess would be an unrealized
gain. The current value of the option will be the last sales
price on the principal exchange on which the option is traded or,

<PAGE>

in the absence of any transactions, the mean between the closing
bid and asked price.

Except as stated above, the Fund may not purchase or sell put
or call options on securities or combinations of put and call
options on securities.

Foreign Securities. The Fund may invest up to 15% of the
value of its total assets in foreign equity and fixed income
securities eligible for purchase by the Fund under the investment
policies described above. Foreign securities investments are
affected by exchange control regulations as well as by changes in
governmental administration, economic or monetary policy (in the
United States and abroad) and changed circumstances in dealings
between nations. Currency exchange rate movements will increase
or reduce the U.S. dollar value of the Fund's net assets and
income attributable to foreign securities. Costs will be
incurred in connection with the conversion of currencies held by
the Fund. There may be less publicly available information about
foreign issuers than about domestic issuers, and foreign issuers
may not be subject to accounting, auditing and financial
reporting standards and requirements comparable to those of
domestic issuers. Securities of some foreign issuers are less
liquid and more volatile than securities of comparable domestic
issuers, and foreign brokerage commissions are generally higher
than in the United States. Foreign securities markets may also
be less liquid, more volatile, and less subject to governmental
supervision than in the United States. Investments in foreign
countries could be affected by other factors not present in the
United States, including expropriation, confiscatory taxation and
potential difficulties in enforcing contractual obligations.

Options on Foreign Currencies. For additional information on
the use, risks and costs of options on foreign currencies, see
Appendix A.

Forward Foreign Currency Exchange Contracts. The Fund may
purchase or sell forward foreign currency exchange contracts
("forward contracts"). While these contracts are not currently
regulated by the Commodity Futures Trading Commission ("CFTC"),
the CFTC may in the future assert authority to regulate forward
contracts. In such event the Fund's ability to utilize forward
contracts in the manner set forth in the Prospectus may be
restricted. Forward contracts will reduce the potential gain
from a positive change in the relationship between the U.S.
Dollar and the foreign currencies that are the subject of the
forward contracts. Unanticipated changes in currency prices may
result in poorer overall performance for the Fund than if it had
not entered into such contracts. The use of foreign currency
forward contracts will not eliminate fluctuations in the
underlying U.S. Dollar equivalent value of the proceeds of or

<PAGE>

rates of return on the Fund's foreign currency-denominated
portfolio securities and the use of such techniques will subject
the Fund to certain risks, as discussed below.

The matching of the increase in value of a forward contract
and the decline in the U.S. Dollar equivalent value of the
foreign-currency denominated asset that is the subject of the
hedge generally will not be precise. In addition, the Fund may
not always be able to enter into foreign currency forward
contracts at attractive prices and this will limit the Fund's
ability to use such contracts to hedge or cross-hedge its assets.
In addition, with regard to the Fund's use of cross-hedges, there
can be no assurance that historical correlations between the
movement of certain foreign currencies relative to the U.S.
Dollar will continue. Thus, at any time poor correlation may
exist between movements in the exchange rates of the foreign
currencies underlying the Fund's cross-hedges and the movements
in the exchange rates of the foreign currencies in which the
Fund's assets that are the subject of such cross-hedges are
denominated.

General. There can be no assurance that the Fund will
achieve its investment objective since market risks are inherent
in all securities to varying degrees, although Alliance Capital
Management L.P., the Fund's Adviser (the "Adviser") will try to
limit these risks.

Portfolio Turnover. Ordinarily, the annual portfolio
turnover rate will not exceed 200%. A portfolio turnover rate
approximating 200% involves correspondingly greater brokerage
commission expenses than would a lower rate, which must be borne
directly by the Fund and its shareholders. The annual portfolio
turnover rates of securities of the Fund for its 1993 and 1994
fiscal years were 188% and 116%, respectively.

Fundamental Investment Policies

The Fund is also subject to the following restrictions in
implementing its investment policies which cannot be changed
without the approval of the holders of a majority of the Fund's
outstanding voting securities. The Fund may not: (1) purchase
any security of any issuer (other than the United States
Government) if as a result more than 5% of the value of its total
assets would consist of the securities of such issuer or the Fund
would own more than 10% of the outstanding voting securities of
any issuer; (2) purchase the securities of any other investment
company except in a regular transaction in the open market;
(3) purchase the securities of any issuer the business of which
has been in continuous operation for less than three
years;(4) retain investments in the securities of any issuer if
directors or officers of the Fund or certain other interested

<PAGE>

persons own more than 5% of such securities; (5) invest in other
companies for the purpose of exercising control of management;
(6) purchase securities on margin, borrow money, or sell
securities short, except that the Fund may borrow in an amount up
to 10% of its total assets to meet redemption requests and for
the clearance of purchases and sales of portfolio securities
(this borrowing provision is not for investment leverage but
solely to facilitate management of the portfolio to enable the
Fund to meet redemption requests where the liquidation of
portfolio securities is deemed to be disadvantageous or
inconvenient and to obtain such short-term credits as may be
necessary for the clearance of purchases and sales of portfolio
securities; all borrowings at any time outstanding will be repaid
before any additional investments are made; the Fund will not
mortgage, pledge or hypothecate any assets in connection with any
such borrowing in excess of 15% of the Fund's total assets);
(7) make loans to other persons except certain call loans upon
collateral security (the Fund does not intend to make such loans;
the acquisition of publicly distributed bonds, debentures and
other debt securities is not considered a loan); (8) concentrate
its investments in any one industry by investment of more than
25% of the value of its total assets in such industry;
(9) underwrite securities issued by other persons; (10) purchase
any securities as to which it would be deemed a statutory
underwriter under the Securities Act of 1933, as amended;
(11) purchase or sell commodities or commodity contracts; or (12)
issue any securities senior to the capital stock offered hereby.

The Fund has not engaged in the investment practice described
in restriction (6) above during its last fiscal year and has no
current intention of doing so in the foreseeable future.

In addition, the Fund has undertaken with the securities
administrators of certain states where the Fund's shares are sold
not to invest any part of its total assets in interests in oil,
gas, or other mineral exploration or development programs; make
loans to any person or individual; purchase a security, if as a
result (unless the security is acquired pursuant to a plan of
reorganization or an offer of exchange) the Fund would own any
securities of an open-end investment company, or more than 3% of
the total outstanding voting stock of any closed-end investment
company or more than 5% of the value of the Fund's assets would
be invested in securities of any one or more closed-end
investment companies, or more than 10% of the value of the Fund's
total assets would be invested in securities of closed-end
investment companies in the aggregate; invest only in investment
grade fixed income securities; invest in warrants (other than
warrants acquired by the Fund as a part of a unit or attached to
securities at the time of purchase), if as a result such warrants
valued at the lower of cost or market, would exceed 5% of the
value of the Fund's assets at the time of purchase provided that

<PAGE>

not more than 2% of the Fund's net assets at the time of purchase
may be invested in warrants not listed on the New York Stock
Exchange or the American Stock Exchange; purchase or sell real
property (including limited partnership interests, but excluding
readily marketable interests in real estate investment trusts or
readily marketable securities of companies which invest in real
estate; limit its investments in illiquid securities together
with restricted securities (excluding 144A securities) to no more
than 15% of the Fund's average net assets.

_________________________________________________________________

MANAGEMENT OF THE FUND
_________________________________________________________________

Adviser

Alliance Capital Management L.P., the Adviser, a Delaware
limited partnership with principal offices at 1345 Avenue of the
Americas, New York, New York 10105, has been retained under an
investment advisory agreement (the "Advisory Agreement") as the
Fund's Adviser (see "Management of the Fund" in the Prospectus).

The Adviser is a leading international investment manager
supervising client accounts with assets as of December 31, 1994
of more than $121 billion (of which more than $36 billion
represented the assets of investment companies). The Adviser's
clients are primarily major corporate employee benefit funds,
public employee retirement systems, investment companies,
foundations and endowment funds and included, as of December 31,
1994, 29 of the FORTUNE 100 Companies. As of that date, the
Adviser and its subsidiaries employed approximately 1,450
employees who operated out of domestic offices and the overseas
offices of subsidiaries in Bombay, Istanbul, London, Sydney,
Tokyo, Toronto, Bahrain, Luxembourg and Singapore. The 51
registered investment companies comprising 103 separate
investment portfolios managed by the Adviser currently have more
than one million shareholders.

Alliance Capital Management Corporation, the sole general
partner of, and the owner of a 1% general partnership interest
in, the Adviser, is an indirect wholly-owned subsidiary of The
Equitable Life Assurance Society of the United States
("Equitable"), one of the largest life insurance companies in the
United States and a wholly-owned subsidiary of The Equitable
Companies Incorporated ("ECI"), a holding company controlled by
AXA, a French insurance holding company. As of December 31,
1994, ACMC, Inc. and Equitable Capital Management Corporation,
each a wholly-owned direct or indirect subsidiary of Equitable,
owned in the aggregate approximately 59% of the issued and

<PAGE>

outstanding units representing assignments of beneficial
ownership of limited partnership interests in the Adviser
("Units"). As of December 31, 1994, approximately 32% and 9% of
the Units were owned by the public and employees of the Adviser
and its subsidiaries, respectively, including employees of the
Adviser who serve as Directors of the Fund.

AXA owns approximately 60% of the outstanding voting shares
of common stock of ECI. AXA is the holding company for an
international group of insurance and related financial services
companies. AXA's insurance operations are comprised of
activities in life insurance, property and casualty insurance and
reinsurance. The insurance operations are diverse geographically
with activities in France, the United States, the United Kingdom,
Canada and other countries, principally in Europe. AXA is also
engaged in asset management, investment banking and brokerage,
real estate and other financial services activities in the United
States and Europe. Based on information provided by AXA, as of
January 1, 1995, 42.3% of the issued shares (representing 54.7%
of the voting power) of AXA were owned by Midi Participations, a
French corporation that is a holding company. The voting shares
of Midi Participations are in turn owned 60% by Finaxa, a French
corporation that is a holding company, and 40% by subsidiaries of
Assicurazioni Generali S.p.A., an Italian corporation
("Generali") (one of which, Belgica Insurance Holding S.A., a
Belgian corporation, owned 34.1%). As of January 1, 1995, 62.1%
of the issued shares (representing 75.7% of the voting power) of
Finaxa were owned by five French mutual insurance companies (the
"Mutuelles AXA") (one of which, AXA Assurances I.A.R.D. Mutuelle,
owned 31.8% of the issued shares) (representing 39.0% of the
voting power), and 26.5% of the issued shares (representing 16.6%
of the voting power) of Finaxa were owned by Banque Paribas, a
French bank ("Paribas"). Including the shares owned by Midi
Participations, as of January 1, 1995, the Mutuelles AXA directly
or indirectly owned 51.3% of the issued shares (representing
65.8% of the voting power) of AXA. In addition, certain
subsidiaries of AXA own 0.4% of the shares of AXA which are not
entitled to be voted. Acting as a group, the Mutuelles AXA
control AXA, Midi Participations and Finaxa.

Under the Advisory Agreement, the Adviser furnishes advice
and recommendations with respect to the Fund's portfolio of
securities and investments and provides persons satisfactory to
the Board of Directors to act as officers and employees of the
Fund. Such officers and employees, as well as certain Directors
of the Fund may be employees of the Adviser or its affiliates.

The Adviser is, under the Advisory Agreement, responsible for
certain expenses incurred by the Fund, including, for example,
office space and certain other equipment, investment advisory and

<PAGE>

administrative services, and any expenses incurred in promoting
the sale of Fund shares (other than the portion of the
promotional expenses borne by the Fund in accordance with an
effective plan pursuant to Rule 12b-1 under the 1940 Act, and the
costs of printing Fund prospectuses and other reports to
shareholders and fees related to registration with the Securities
and Exchange Commission and with state regulatory authorities).

The Fund has, under the Advisory Agreement, assumed the
obligation for payment of all of its other expenses. As to the
obtaining of services other than those specifically provided to
the Fund by the Adviser, the Fund may utilize personnel employed
by the Adviser or by affiliates of the Adviser. The Fund may
employ its own personnel or contract for services to be performed
by third parties. The Advisory Agreement provides that the Board
of Directors may approve the payment of compensation to others
for consulting services, supplemental research and economic
analysis.

For the services rendered by the Adviser under the Advisory
Agreement, the Fund pays the Adviser at the annual rate of .625
of 1% of the first $200 million, .50% of the excess over $200
million up to $400 million and .45 of 1% of the excess over $400
million of the average daily value of the Fund's net assets. The
fee is accrued daily and paid monthly.

The Advisory Agreement provides that the Adviser will refund
to the Fund the amount by which net expenses (excluding interest,
taxes, brokerage, expenses pursuant to the Distribution Services
Agreement described below, and extraordinary expenses, all to the
extent permitted by applicable state securities laws and
regulations) which in any year exceed the limits prescribed by
any state in which the Fund's shares are qualified for sale. The
Fund may not qualify its shares for sale in every State. The
Fund believes that at present the most restrictive state expense
ratio limitation imposed by any state in which the Fund has
qualified its shares for sale is 2.5% of the first $30 million of
its average net assets, 2.0% of the next $70 million of its
average net assets and 1.5% of its average net assets in excess
of $100 million.

At their Regular Meeting held on July 19, 1994, the Board of
Directors, including a majority of the Directors who are not
"interested persons" as defined in the 1940 Act, voted
unanimously to a change in the fiscal year end from September 30
to July 31. In this regard, for the fiscal years ended
September 30, 1992 and 1993 and July 31, 1994, the Adviser
received from the Fund advisory fees of $961,835, $1,064,560 and
$958,914, respectively.

<PAGE>

The Advisory Agreement became effective on July 22, 1992. The
Advisory Agreement was approved by the unanimous vote, cast in
person, of the Fund's Directors including the Directors who are
not parties to the Advisory Agreement or interested persons, as
defined in the 1940 Act, of any such party at a meeting called
for the purpose and held on October 14, 1991. At a meeting held
on June 11, 1992, a majority of the outstanding voting securities
of the Fund approved the Advisory Agreement.

The Advisory Agreement continues in effect for successive
twelve-month periods (computed from each October 1) provided that
such continuance is specifically approved at least annually by
the Fund's Directors or by a majority vote of the holders of the
outstanding voting securities of the Fund and, in either case, by
a majority of the Directors who are not parties to the Advisory
Agreement, or interested persons, as defined in the 1940 Act, of
any such party, at a meeting in person called for the purpose of
voting on such matter. Most recently, continuance of the
Agreement was approved for the period ending September 30, 1995
by the Board of Directors, including a majority of the Directors
who are not "interested persons" as defined in the 1940 Act, at
their Regular Meeting held on July 19, 1994.

The Advisory Agreement may be terminated without penalty on
60 days' written notice by a vote of a majority of the
outstanding voting securities, by a vote of the majority of the
Directors, or by the Adviser on 60 days' written notice, and will
automatically terminate in the event of assignment. The Advisory
Agreement provides that the Adviser shall not be liable under the
Advisory Agreement for any mistake of judgment, or in any event
whatsoever, except for lack of good faith, provided that the
Adviser shall be liable to the Fund and security holders by
reason of willful misfeasance, bad faith or gross negligence or
of reckless disregard of its obligations and duties under the
Advisory Agreement.

Certain other clients of the Adviser may have investment
objectives and policies similar to those of the Fund. The
Adviser may, from time to time, make recommendations which result
in the purchase or sale of a particular security by its other
clients simultaneously with the Fund. If transactions on behalf
of more than one client during the same period increase the
demand for securities being purchased or the supply of securities
being sold, there may be an adverse effect on price or quantity.
It is the policy of the Adviser to allocate advisory
recommendations and the placing of orders in a manner which is
deemed equitable by the Adviser to the accounts involved,
including the Fund. When two or more of the clients of the
Adviser (including the Fund) are purchasing or selling the same
security on a given day from the same broker-dealer, such
transactions may be averaged as to price.

<PAGE>

The Adviser may act as an investment adviser to other
persons, firms or corporations, including investment companies,
and is investment adviser to ACM Institutional Reserves, Inc.,
AFD Exchange Reserves, The Alliance Fund, Inc., Alliance All-Asia
Investment Fund, Inc., Alliance Bond Fund, Inc., Alliance Capital
Reserves, Alliance Counterpoint Fund, Alliance Developing Markets
Fund, Inc., Alliance Global Dollar Government Fund, Inc.,
Alliance Global Small Cap Fund, Inc., Alliance Government
Reserves, Alliance Growth and Income Fund, Inc., Alliance Income
Builder Fund, Inc., Alliance International Fund, Alliance Money
Market Fund, Inc., Alliance Mortgage Securities Income Fund,
Inc., Alliance Mortgage Strategy Trust, Inc., Alliance Multi-
Market Strategy Trust, Inc., Alliance Municipal Income Fund,
Inc., Alliance Municipal Income Fund II, Alliance Municipal
Trust, Alliance New Europe Fund, Inc., Alliance North American
Government Income Trust, Inc., Alliance Premier Growth Fund,
Inc., Alliance Quasar Fund, Inc., Alliance Short-Term Multi-
Market Trust, Inc., Alliance Technology Fund, Inc., Alliance
Utility Income Fund, Inc., Alliance Variable Products Series
Fund, Inc., Alliance World Income Trust, Inc., Alliance Worldwide
Privatization Fund, Inc., The Alliance Portfolios, Fiduciary
Management Associates and The Hudson River Trust, all registered
open-end investment companies; and ACM Government Income Fund,
Inc., ACM Government Securities Fund, Inc., ACM Government
Spectrum Fund, Inc., ACM Government Opportunity Fund, Inc., ACM
Managed Dollar Income Fund, Inc., ACM Managed Income Fund, Inc.,
ACM Municipal Securities Income Fund, Inc., Alliance All-Market
Advantage Fund, Inc., Alliance Global Environment Fund, Inc.,
Alliance World Dollar Government Fund, Inc., Alliance World
Dollar Government Fund II, Inc., The Austria Fund, Inc., The
Global Privatization Fund, Inc., The Korean Investment Fund,
Inc., The Southern African Fund, Inc. and The Spain Fund, Inc.,
all registered closed-end investment companies.

Directors and Officers

The Directors and officers of the Fund, their ages and their
primary occupations during the past five years are set forth
below. Each such Director and officer is also a director,
trustee or officer of other registered investment companies
sponsored by the Adviser. Unless otherwise specified, the
address of each such person is 1345 Avenue of the Americas, New
York, New York 10105.

<PAGE>

Directors

JOHN D. CARIFA*, Chairman of the Board, [ ], is the
President and Chief Operating Officer, the Chief Financial
Officer and a Director of ACMC with which he has been associated
since prior to 1989.

DAVID H. DIEVLER, [ ], is a Senior Vice President of ACMC,
with which he has been associated since prior to 1989.

RUTH BLOCK, [ ], was formerly Executive Vice President and
the Chief Insurance Officer of The Equitable Life Assurance
Society of the United States ("Equitable"). She is a Director of
Ecolab Incorporated (specialty chemicals) and Amoco Corporation
(oil and gas). Her address is Box 4653, Stamford, Connecticut
06903.

JOHN H. DOBKIN, [ ], is the President of Historic Hudson
Valley (historic preservation) since 1990. Previously, he was
Director of the National Academy of Design. From 1987 to 1992,
he was a Director of ACMC. His address is 105 West 55th Street,
New York, New York 10019.

WILLIAM H. FOULK, JR., [ ], is a Senior Manager of Barrett
Associates, Inc., a registered investment advisory firm, with
which he has been associated since prior to 1989. He was
formerly President of Competrol (BVI) Limited and Cresent
Diversified Limited (private investments). His address is 521
Fifth Avenue, New York, New York 10175.

DR. JAMES M. HESTER, [ ], is President of the Harry Frank
Guggenheim Foundation and a Director of Union Carbide
Corporation. He was formerly President of New York University,
the New York Botanical Garden and Rector of the United Nations
University. His address is 45 East 89th Street, New York, New
York 10128.

CLIFFORD L. MICHEL, [ ], is a Partner in the law firm of
Cahill Gordon & Reindel with which he has been associated since
prior to 1989. He is Chief Executive Officer of Wenonah
Development Company (investments) and a Director of Placer Dome,
Inc. and Faber-Castell Corporation (writing products). His
address is 80 Pine Street, New York, New York 10005.

<PAGE>

ROBERT C. WHITE, [ ], is a Vice President and the Chief
Financial Officer of the Howard Hughes Medical Institute with
which he has been associated since prior to 1989. He is a
Director of MEDSTAT Systems, Inc. (healthcare information
systems) and a Trustee of St. Clair Fixed Income Fund, St. Clair
Tax-Free Fund and St. Clair Equity Fund, (registered investment
companies). He was formerly Assistant Treasurer of the Ford
Motor Company. His address is 8101 Connecticut Avenue, Apartment
S501, Chevy Chase, Maryland, 20815.

____________________

* An "interested person" of the Fund as defined in the 1940 Act.

Officers

DAVID H. DIEVLER, President, see Biography, above.

BRUCE W. CALVERT, Executive Vice President-Investments, [ ],
is Vice Chairman of the Board and Chief Investment Officer of
ACMC with which he has been associated since prior to 1989.

MIKE BALDWIN, Vice President, [ ], is a Vice President of
ACMC with which he has been associated since 1989.

DANIEL V. PANKER, Vice President, [ ], is a Senior Vice
President of ACMC with which he has been associated since prior
to 1989.

EDMUND P. BERGAN, JR., Secretary, [ ], is a Senior Vice
President and the General Counsel of Alliance Fund Distributors,
Inc. and Alliance Fund Services, Inc. and Vice President and
Assistant General Council of ACMC with which he has been
associated since prior to 1989.

GEORGE O. MARTINEZ, Assistant Secretary, [ ], is a Vice
President and the Associate General Counsel of Alliance Fund
Distributors, Inc. with which he has been associated since prior
to 1989. He was previously an attorney within the Division of
Investment Management.

MARK D. GERSTEN, Treasurer and Chief Financial Officer, [ ],
is a Senior Vice President of Alliance Fund Services, Inc. with
which he has been associated since prior to 1989.

PATRICK J. FARRELL, Controller, [ ], is a Vice President of
Alliance Fund Services, Inc. with which he has been associated
since prior to 1989.

<PAGE>

MELVIN OLIVER, Assistant Controller, [ ], is a Manager,
Mutual Funds, Alliance Fund Services, Inc. since prior to 1989.

JOSEPH J. MANTINEO, Assistant Controller, [ ], is a Vice
President of Alliance Fund Services, Inc. since July 1989. He
was previously Manager of Fixed Income Mutual Fund Accounting for
Alliance Fund Services, Inc. since prior to 1989.

The Fund does not pay any fees to, or reimburse expenses of,
its Directors who are considered "interested persons" of the
Fund. The aggregate compensation paid by the Fund to each of the
Directors during its fiscal period ended July 31, 1994, the
aggregate compensation paid to each of the Directors during
calendar year 1994 by all of the funds to which the Adviser
provides investment advisory services (collectively, the
"Alliance Fund Complex") and the total number of funds in the
Alliance Fund Complex with respect to which each of the Directors
serves as a director or trustee, are set forth below. Neither
the Fund nor any other fund in the Alliance Fund Complex provides
compensation in the form of pension or retirement benefits to any
of its directors or trustees.

<TABLE>
<CAPTION>
Total Total Number of Funds in
Compensation the Alliance Fund Complex,
Aggregate From the Alliance Including the Fund, as to
Name of Director Compensation Fund Complex, which the Director is
of the Fund from the Fund Including the Fund a Director or Trustee
________________ _____________ __________________ __________________________

<S> <C> <C> <C>
John D. Carifa $ 0 $ 0 42
Ruth Block $ [ ] $157,000 31
David H. Dievler $ 0 $ 0 49
John H. Dobkin $ [ ] $110,750 29
William H. Foulk, Jr. $ [ ] $141,500 30
Dr. James M. Hester $ [ ] $154,500 32
Clifford L. Michel $ [ ] $120,500 31
Robert C. White $ [ ] $133,500 36
</TABLE>

As of May [ ], 1995, the Directors and officers of the Fund as a
group owned less than 1% of the shares of the Fund.

<PAGE>

____________________________________________________________

EXPENSES OF THE FUND
____________________________________________________________

Distribution Services Agreement

The Fund has entered into a Distribution Services Agreement
(the "Agreement") with Alliance Fund Distributors, Inc., the
Fund's principal underwriter (the "Principal Underwriter"), to
permit the Fund directly or indirectly to pay expenses associated
with the distribution of its shares in accordance with a plan of
distribution which is included in the Agreement and has been duly
adopted and approved in accordance with Rule 12b-1 adopted by the
Securities and Exchange Commission under the 1940 Act.

Distribution services fees are accrued daily and paid monthly
and are charged as expenses of the Fund as accrued. The
distribution services fees attributable to the Class B shares and
Class C shares are designed to permit an investor to purchase
such shares through broker-dealers without the assessment of an
initial sales charge, and, in the case of Class C shares, without
the assessment of a contingent deferred sales charge, and at the
same time to permit the Principal Underwriter to compensate
broker-dealers in connection with the sale of such shares. In
this regard the purpose and function of the combined contingent
deferred sales charge and distribution services fee on the Class
B shares, and the distribution services fee on the Class C
shares, are the same as those of the initial sales charge and
distribution services fee with respect to the Class A shares in
that in each case the sales charge and/or distribution services
fee provide for the financing of the distribution of the Fund's
shares.

Under the Agreement, the Treasurer of the Fund reports the
amounts expended under the Rule 12b-1 Plan and the purposes for
which such expenditures were made to the Directors of the Fund
for their review on a quarterly basis. Also, the Agreement
provides that the selection and nomination of Directors who are
not "interested persons" of the Fund (as defined in the 1940
Act), are committed to the discretion of such disinterested
Directors then in office.

The Agreement became effective on July 22, 1992 and was
amended as of April 30, 1993 to permit distribution of an
additional class of Shares, Class C Shares. The amendment to the
Agreement was approved by the unanimous vote, cast in person, of
the disinterested Directors at a meeting called for that purpose
held on February 23, 1993, and by initial holder of Class C
shares of the Fund on April 30, 1993.

<PAGE>

The Adviser may from time to time and from its own funds or
such other resources as may be permitted by rules of the
Commission make payments for distribution services to the
Principal Underwriter; the latter may in turn pay part or all of
such compensation to brokers or other persons for their
distribution assistance.

During the Fund's fiscal year ended July 31, 1994, the Fund
paid distribution services fees for expenditures under the
Agreement, with respect to Class A shares, in amounts aggregating
$331,544, which constituted .24% of the average daily net assets
attributable to Class A shares during the period, and the
Adviser made payments from its own resources as described above
aggregating $142,962. Of the $474,506 paid by the Fund and the
Adviser under the Plan, 24,775 was spent on advertising, $11,329
on the printing and mailing of prospectuses for persons other
than current shareholders, $312,480 for compensation to
broker-dealers and other financial intermediaries (including
$99,700 to the Fund's Principal Underwriter), $10,412 for
compensation to sales personnel and $115,510 was spent on the
printing of sales literature, travel, entertainment, due
diligence and other promotional expenses.

During the Fund's fiscal year ended July 31, 1994, the Fund
paid distribution services fees for expenditures under the
Agreement, with respect to Class B shares, in amounts aggregating
$107,441 which constituted 1% of the average daily net assets
attributable to Class B shares during the period, and the Adviser
made payments from its own resources as described above
aggregating $247,811. Of the $355,252 paid by the Fund and the
Adviser under the Plan, $14,876 were spent on advertising, $4,588
on the printing and mailing of prospectuses for persons other
than current shareholders, $260,204 for compensation to
broker-dealers and other financial intermediaries (including,
$62,259 to the Fund's Principal Underwriter), $8,623 for
compensation to sales personnel and 66,961 was spent on the
printing of sales literature, travel, entertainment, due
diligence and other promotional expenses.

During the Fund's fiscal year ended July 31, 1994, the Fund
paid distribution services fees for expenditures under the
Agreement, with respect to Class C shares, in amounts aggregating
$49,268 which constituted 1%, annualized, of the average daily
net assets attributable to Class C shares during the period, and
the Adviser made payments from its own resources as described
above aggregating $180,500. Of the $229,768 paid by the Fund and
the Adviser under the Plan, with respect to Class C shares $9,881
was spent on advertising, $7,140 on the printing and mailing of
prospectuses for persons other than current shareholders,
$118,850 for compensation to broker-dealers and other financial
intermediaries (including $71,863 to the Fund's Principal

<PAGE>

Underwriter), $8,770 for compensation to sales personnel and
$85,127 was spent on the printing of sales literature, travel,
entertainment, due diligence and other promotional expenses.

The Agreement will continue in effect for successive
twelve-month periods (computed from each October 1), provided,
however, that such continuance is specifically approved at least
annually by the Directors of the Fund or by vote of the holders
of a majority of the outstanding voting securities (as defined in
the 1940 Act) of that class, and, in either case, by a majority
of the Directors of the Fund who are not parties to the Agreement
or interested persons, as defined in the 1940 Act, of any such
party (other than as directors of the Fund) and who have no
direct or indirect financial interest in the operation of the
Rule 12b-1 Plan or any agreement related thereto. Most recently
the continuance of the Agreement until September 30, 1995 was
approved by a vote, cast in person, of the Directors, including a
majority of the Directors who are not "interested persons", as
defined in the 1940 Act, at their meeting held on July 19, 1994.

In the event that the Agreement is terminated or not
continued with respect to the Class A shares, Class B shares or
Class C shares, (i) no distribution services fees (other than
current amounts accrued but not yet paid) would be owed by the
Fund to the Principal Underwriter with respect to that class, and
(ii) the Fund would not be obligated to pay the Principal
Underwriter for any amounts expended under the Agreement not
previously recovered by the Principal Underwriter from
distribution services fees in respect of shares of such class or
through deferred sales charges.

All material amendments to the Agreement must be approved by
a vote of the Directors or the holders of the Fund's outstanding
voting securities, voting separately by class, and in either
case, by a majority of the disinterested Directors, cast in
person at a meeting called for the purpose of voting on such
approval; and the Agreement may not be amended in order to
increase materially the costs that a particular class, may bear
pursuant to the Agreement without the approval of a majority of
the holders of the outstanding voting shares of the class
affected. The Agreement may be terminated (a) by the Fund
without penalty at any time by a majority vote of the holders of
the outstanding voting securities of the Fund, voting separately
by class or by a majority vote of the Directors who are not
"interested persons" as defined in the 1940 Act, or (b) by the
Principal Underwriter. To terminate the Agreement, any party
must give the other parties 60 days' written notice; to terminate
the Rule 12b-1 Plan only, the Fund need give no notice to the
Principal Underwriter. The Agreement will terminate
automatically in the event of its assignment.

<PAGE>

Transfer Agency Agreement

Alliance Fund Services, Inc., an indirect wholly-owned
subsidiary of the Adviser, receives a transfer agency fee per
account holder of each of the Class A shares, Class B shares and
Class C shares of the Fund, plus reimbursement for out-of-pocket
expenses. The transfer agency fee with respect to the Class B
shares is higher than the transfer agency costs attributable to
the Class A shares or the Class C shares reflecting the
additional costs associated with the Class B contingent deferred
sales charges. For the fiscal year ended July 31, 1994, the Fund
paid Alliance Fund Services, Inc. $177,479 for transfer agency
services.

_________________________________________________________________

PURCHASE OF SHARES
_________________________________________________________________

The following information supplements that set forth in the
Fund's Prospectus under the headings "Purchase and Sale of Shares
- - How to Buy Shares."

General

Shares of the Fund will be offered on a continuous basis at a
price equal to their net asset value plus an initial sales charge
at the time of purchase (the "initial sales charge alternative"),
with a contingent deferred sales charge (the "deferred sales
charge alternative"), or without any initial or contingent
deferred sales charge (the "asset-based sales charge
alternative"), as described below. Shares of the Fund are
offered on a continuous basis through (i) investment dealers that
are members of the National Association of Securities Dealers,
Inc. and have entered into selected dealer agreements with the
Principal Underwriter ("selected dealers"), (ii) depository
institutions and other financial intermediaries or their
affiliates, that have entered into selected agent agreements with
the Principal Underwriter ("selected agents"), or (iii) the
Principal Underwriter. The minimum for initial investments is
$250; subsequent investments (other than reinvestments of
dividends and capital gains distributions in shares) must be in
the minimum amount of $50. As described under "Shareholder
Services," the Fund offers an automatic investment program and a
403(b)(7) retirement plan which permit investments of $25 or
more. The subscriber may use the Subscription Application found
in the Prospectus for his or her initial investment. Sales
personnel of selected dealers and agents distributing the Fund's
shares may receive differing compensation for selling Class A,
Class B or Class C shares.

<PAGE>

Investors may purchase shares of the Fund in the United
States either through selected dealers or agents or directly
through the Principal Underwriter. Shares may also be sold in
foreign countries where permissible. The Fund may refuse any
order for the purchase of shares. The Fund reserves the right to
suspend the sale of its shares to the public in response to
conditions in the securities markets or for other reasons.

The public offering price of shares of the Fund is their net
asset value, plus, in the case of Class A shares, a sales charge
which will vary depending on the purchase alternative chosen by
the investor, as shown in the table below. On each Fund business
day on which a purchase or redemption order is received by the
Fund and trading in the types of securities in which the Fund
invests might materially affect the value of Fund shares, the per
share net asset value is computed as of the next close of regular
trading on the New York Stock Exchange (the "Exchange")
(currently 4:00 p.m. New York time) by dividing the value of the
Fund's total assets, less its liabilities, by the total number of
its shares then outstanding. The respective per share net asset
values of the Class A, Class B and Class C shares are expected to
be substantially the same. Under certain circumstances, however,
the per share net asset values of the Class B and Class C shares
may be lower than the per share net asset value of the Class A
shares as a result of the daily expense accruals of the
distribution and transfer agency fees applicable with respect to
the Class B and Class C shares. Even under those circumstances,
the per share net asset values of the three classes eventually
will tend to converge immediately after the payment of dividends,
which will differ by approximately the amount of the expense
accrual differential among the classes. A Fund business day is
any weekday, exclusive of national holidays on which the Exchange
is closed and Good Friday. For purposes of this computation, the
securities in the Fund's portfolio are valued at their current
market value determined on the basis of market quotations or, if
such quotations are not readily available, such other methods as
the Directors believe would accurately reflect fair market value.

The Fund will accept unconditional orders for its shares to
be executed at the public offering price equal to their net asset
value next determined (plus applicable Class A sales charges), as
described below. Orders received by the Principal Underwriter
prior to the close of regular trading on the Exchange on each day
the Exchange is open for trading are priced at the net asset
value computed as of the close of regular trading on the Exchange
on that day (plus applicable Class A sales charges). In the case
of orders for purchase of shares placed through selected dealers
or agents, the applicable public offering price will be the net
asset value as so determined, but only if the selected dealer or
agent receives the order prior to the close of regular trading on
the Exchange and transmits it to the Principal Underwriter prior

<PAGE>

to its close of business that same day (normally 5:00 p.m. New
York time). The selected dealer or agent is responsible for
transmitting such orders by 5:00 p.m. If the selected dealer or
agent fails to do so, the investor's right to that day's closing
price must be settled between the investor and the selected
dealer or agent. If the selected dealer or agent receives the
order after the close of regular trading on the Exchange, the
price will be based on the net asset value determined as of the
close of regular trading on the Exchange on the next day it is
open for trading.

Following the initial purchase of Fund shares, a shareholder
may place orders to purchase additional shares by telephone if
the shareholder has completed the appropriate portion of the
Subscription Application or an "Autobuy" application obtained by
calling the "Literature" telephone number shown on the cover of
this Statement of Additional Information. Payment for shares
purchased by telephone can be made only by Electronic Funds
Transfer from a bank account maintained by the shareholder at a
bank that is a member of the National Automated Clearing House
Association ("NACHA"). If a shareholder's telephone purchase
request is received before 3:00 p.m. New York time on a Fund
business day, the order to purchase shares is automatically
placed the following Fund business day, and the applicable public
offering price will be the public offering price determined as of
the close of business on such following business day. Full and
fractional shares are credited to a subscriber's account in the
amount of his or her subscription. As a convenience to the
subscriber, and to avoid unnecessary expense to the Fund, stock
certificates representing shares of the Fund are not issued
except upon written request to the Fund by the shareholder or his
or her authorized selected dealer or agent. This facilitates
later redemption and relieves the shareholder of the
responsibility for and inconvenience of lost or stolen
certificates. No certificates are issued for fractional shares,
although such shares remain in the shareholder's account on the
books of the Fund.

In addition to the discount or commission amount paid to
selected dealers or agents, the Principal Underwriter may from
time to time pay additional cash bonuses or other incentives to
selected dealers in connection with the sale of shares of the
Fund. On some occasions, such bonuses or incentives may be
conditioned upon the sale of a specified minimum dollar amount of
the shares of the Fund and/or other Alliance Mutual Funds, as
defined below, during a specific period of time. At the option
of the dealer such bonuses or other incentives may take the form
of payment for travel expenses, including lodging incurred in
connection with trips taken by persons associated with the dealer
and members of their families to places within or outside of the
United States.

<PAGE>

Alternative Purchase Arrangements

The Fund issues three classes of shares: Class A shares are
sold to investors choosing the initial sales charge alternative,
Class B shares are sold to investors choosing the deferred sales
charge alternative, and Class C shares are sold to investors
choosing the asset-based sales charge alternative. The three
classes of shares each represent an interest in the same
portfolio of investments of the Fund, have the same rights and
are identical in all respects, except that (i) Class A shares
bear the expense of the initial sales charge and Class B shares
bear the expense of the deferred sales charge, (ii) Class B
shares and Class C shares each bear the expense of a higher
distribution services fee, and in the case of Class B shares
transfer agency costs, (iii) each class has exclusive voting
rights with respect to provisions of the Rule 12b-1 Plan pursuant
to which its distribution services fee is paid which relates to a
specific class and other matters for which separate class voting
is appropriate under applicable law, provided that, if the Fund
submits to a vote of both the Class A shareholders and the Class
B shareholders an amendment to the Rule 12b-1 Plan that would
materially increase the amount to be paid thereunder with respect
to the Class A shares, the Class A shareholders and the Class B
shareholders will vote separately by Class, and (iv) only the
Class B shares are subject to a conversion feature. Each class
has different exchange privileges and certain different
shareholder service options available.

The alternative purchase arrangements permit an investor to
choose the method of purchasing shares that is most beneficial
given the amount of the purchase, the length of time the investor
expects to hold the shares, and other circumstances. Investors
should consider whether, during the anticipated life of their
investment in the Fund, the accumulated distribution services fee
and contingent deferred sales charges on Class B shares prior to
conversion, or the accumulated distribution services fee on Class
C shares, would be less than the initial sales charge and
accumulated distribution services fee on Class A shares purchased
at the same time, and to what extent such differential would be
offset by the higher return of Class A shares. Class A shares
will normally be more beneficial than Class B shares to the
investor who qualifies for reduced initial sales charges on Class
A shares, as described below. In this regard, the Principal
Underwriter will reject any order (except orders from certain
retirement plans) for more than $250,000 for Class B shares.
Class C shares will normally not be suitable for the investor who
qualifies to purchase Class A shares at net asset value. For
this reason, the Principal Underwriter will reject any order for
more than $5,000,000 for Class C shares.

<PAGE>

Class A shares are subject to a lower distribution services
fee and, accordingly, pay correspondingly higher dividends per
share than Class B shares or Class C shares. However, because
initial sales charges are deducted at the time of purchase,
investors purchasing Class A shares would not have all their
funds invested initially and, therefore, would initially own
fewer shares. Investors not qualifying for reduced initial sales
charges who expect to maintain their investment for an extended
period of time might consider purchasing Class A shares because
the accumulated continuing distribution charges on Class B shares
or Class C shares may exceed the initial sales charge on Class A
shares during the life of the investment. Again, however, such
investors must weigh this consideration against the fact that,
because of such initial sales charges, not all their funds will
be invested initially.

Other investors might determine, however, that it would be
more advantageous to purchase Class B shares or Class C shares in
order to have all their funds invested initially, although
remaining subject to higher continuing distribution charges and,
in the case of Class B shares, being subject to a contingent
deferred sales charge for a four-year period. For example, based
on current fees and expenses, an investor subject to the 4.25%
initial sales charge would have to hold his or her investment
approximately seven years for the Class C distribution services
fee, to exceed the initial sales charge plus the accumulated
distribution services fee of Class A shares. In this example, an
investor intending to maintain his or her investment for a longer
period might consider purchasing Class A shares. This example
does not take into account the time value of money, which further
reduces the impact of the Class C distribution services fees on
the investment, fluctuations in net asset value or the effect of
different performance assumptions.

Those investors who prefer to have all of their funds
invested initially but may not wish to retain Fund shares for the
four-year period during which Class B shares are subject to a
contingent deferred sales charge may find it more advantageous to
purchase Class C shares.

The Directors of the Fund have determined that currently no
conflict of interest exists between or among the Class A, Class B
and Class C shares. On an ongoing basis, the Directors of the
Fund, pursuant to their fiduciary duties under the 1940 Act and
state laws, will seek to ensure that no such conflict arises.

Initial Sales Charge Alternative--Class A Shares

The public offering price of Class A shares for purchasers
choosing the initial sales charge alternative is the net asset
value plus a sales charge, as set forth below.

<PAGE>

Initial Sales Charge
_____________________

Sales Discount or
Sales Charge Commission
Charge As % of to Dealers
As % of the or Agents
Net Public As % of
Amount of Amount Offering Offering
Purchase Invested Price Price
_________ ________ ____________ _________

Less than
$100,000. . . 4.44% 4.25% 4.00%
$100,000 but
less than
250,000. . . 3.36 3.25 3.00
250,000 but
less than
500,000. . . 2.30 2.25 2.00
500,000 but
less than
1,000,000. . . 1.78 1.75 1.50
1,000,000 but
less than
3,000,000. . . 1.27 1.25 1.00
3,000,000 but
less than
5,000,000. . . 0.76 0.75 0.50

____________________

There is no sales charge on transactions of $5,000,000 or more.

With respect to purchases of $5,000,000 or more made through
selected dealers or agents, the Adviser may, pursuant to the
Agreement described above, pay such dealers or agents from its
own resources a fee of up to .25 of 1% of the amount invested to
compensate such dealers or agents for their distribution
assistance in connection with such purchases.

Shares issued pursuant to the automatic reinvestment of
income dividends or capital gains distributions are not subject
to any sales charges. The Fund receives the entire net asset
value of its Class A shares sold to investors. The Principal
Underwriter's commission is the sales charge shown above less any
applicable discount or commission "reallowed" to selected dealers
and agents. The Principal Underwriter will reallow discounts to
selected dealers and agents in the amounts indicated in the table
above. In this regard, the Principal Underwriter may elect to
reallow the entire sales charge to selected dealers and agents

<PAGE>

for all sales with respect to which orders are placed with the
Principal Underwriter. A selected dealer who receives
reallowance in excess of 90% of such a sales charge may be deemed
to be an "underwriter" under the Securities Act of 1933, as
amended.

Set forth below is an example of the method of computing the
offering price of the Class A shares. The example assumes a
purchase of Class A shares of the Fund aggregating less than
$100,000 subject to the schedule of sales charges set forth above
at a price based upon the net asset value of Class A shares of
the Fund at January 31, 1995.

Net Asset Value per Class A share at
January 31, 1995 $13.16

Class A Per Share Sales Charge -
4.25% of offering price (4.44% of
net asset value per share) $ .58
______
Class A Per Share Offering Price
to the Public $13.74
______

During the Fund's fiscal years ended July 31, 1994 and
September 31, 1993 and 1992, the Principal Underwriter received
the amounts of 13,639, $30,435 and $40,980, respectively,
representing that portion of the sales charges paid on shares of
the Fund sold during the year which was not reallowed to selected
dealers (and was, accordingly, retained by the Principal
Underwriter). For the fiscal year ended July 31, 1994, the
Principal Underwriter received $33,317 in contingent deferred
sales charges with respect to Class B share redemptions.

Investors choosing the initial sales charge alternative may
under certain circumstances be entitled to pay reduced sales
charges. The circumstances under which such investors may pay
reduced sales charges are described below.

Combined Purchase Privilege. Certain persons may qualify for
the sales charge reductions indicated in the schedule of such
charges above by combining purchases of shares of the Fund into a
single "purchase," if the resulting "purchase" totals at least
$100,000. The term "purchase" refers to: (i) a single purchase by
an individual, or to concurrent purchases, which in the aggregate
are at least equal to the prescribed amounts, by an individual,
his or her spouse and their children under the age of 21 years
purchasing shares of the Fund for his, her or their own
account(s); (ii) a single purchase by a trustee or other

<PAGE>

fiduciary purchasing shares for a single trust, estate or single
fiduciary account although more than one beneficiary is involved;
or (iii) a single purchase for the employee benefit plans of a
single employer. The term "purchase" also includes purchases by
any "company," as the term is defined in the 1940 Act, but does
not include purchases by any such company which has not been in
existence for at least six months or which has no purpose other
than the purchase of shares of the Fund or shares of other
registered investment companies at a discount. The term
"purchase" does not include purchases by any group of individuals
whose sole organizational nexus is that the participants therein
are credit card holders of a company, policy holders of an
insurance company, customers of either a bank or broker-dealer or
clients of an investment adviser. A "purchase" may also include
shares, purchased at the same time through a single selected
dealer or agent, of any other "Alliance Mutual Fund." Currently,
the Alliance Mutual Funds include:

AFD Exchange Reserves
Alliance All-Asia Investment Fund
The Alliance Fund, Inc.
Alliance Balanced Shares, Inc.
Alliance Bond Fund, Inc.
-Corporate Bond Portfolio
-U.S. Government Portfolio
Alliance Counterpoint Fund
Alliance Developing Markets Fund, Inc.
Alliance Global Dollar Government Fund, Inc.
Alliance Global Small Cap Fund, Inc.
Alliance Growth and Income Fund, Inc.
Alliance Income Builder Fund, Inc.
Alliance International Fund
Alliance Mortgage Securities Income Fund, Inc.
Alliance Mortgage Strategy Trust, Inc.
Alliance Multi-Market Income Trust, Inc.
Alliance Multi-Market Strategy Trust, Inc.
Alliance Municipal Income Fund, Inc.
-California Portfolio
-Insured California Portfolio
-Insured National Portfolio
-National Portfolio
-New York Portfolio
Alliance Municipal Income Fund II
-Arizona Portfolio
-Florida Portfolio
-Massachusetts Portfolio
-Michigan Portfolio
-Minnesota Portfolio
-New Jersey Portfolio
-Ohio Portfolio
-Pennsylvania Portfolio

<PAGE>

-Virginia Portfolio
Alliance New Europe Fund, Inc.
Alliance North American Government Income Trust, Inc.
Alliance Premier Growth Fund, Inc.
Alliance Quasar Fund, Inc.
Alliance Short-Term Multi-Market Trust, Inc.
Alliance Technology Fund, Inc.
Alliance Utility Income Fund, Inc.
Alliance World Income Trust, Inc.
Alliance Worldwide Privatization Fund, Inc.
The Alliance Portfolios.
-The Alliance Growth Fund
-The Alliance Conservative Investors Fund
-The Alliance Growth Investors Fund
-The Alliance Balanced Fund
-The Alliance Short-Term U.S. Government Fund

Prospectuses for the Alliance Mutual Funds may be obtained
without charge by contacting Alliance Fund Services, Inc. at the
address or the "Literature" telephone number shown on the front
cover of this Statement of Additional Information.

Cumulative Quantity Discount (Right of Accumulation). An
investor's purchase of additional Class A shares of the Fund may
qualify for a Cumulative Quantity Discount. The applicable sales
charge will be based on the total of:

(i) the investor's current purchase;

(ii) the net asset value (at the close of business on the
previous day) of (a) all Class A, Class B and Class C
shares of the Fund held by the investor and (b) all
shares of any other Alliance Mutual Fund held by the
investor; and

(iii) the net asset value of all shares described in paragraph
(ii) owned by another shareholder eligible to combine
his or her purchase with that of the investor into a
single "purchase" (see above).

For example, if an investor owned shares of an Alliance
Mutual Fund worth $200,000 at their then current net asset value
and, subsequently, purchased Class A shares of the Fund worth an
additional $100,000, the sales charge for the $100,000 purchase
would be at the 2.25% rate applicable to a single $300,000
purchase of shares of the Fund, rather than the 3.25% rate.

To qualify for the Combined Purchase Privilege or to obtain
the Cumulative Quantity Discount on a purchase through a selected
dealer or agent, the investor or selected dealer or agent must
provide the Principal Underwriter with sufficient information to

<PAGE>

verify that each purchase qualifies for the privilege or
discount.

Statement of Intention. Class A investors may also obtain
the reduced sales charges shown in the table above by means of a
written Statement of Intention, which expresses the investor's
intention to invest not less than $100,000 within a period of 13
months in Class A shares (or Class A, Class B and/or Class C
shares) of the Fund or any other Alliance Mutual Fund. Each
purchase of shares under a Statement of Intention will be made at
the public offering price or prices applicable at the time of
such purchase to a single transaction of the dollar amount
indicated in the Statement of Intention. At the investor's
option, a Statement of Intention may include purchases of shares
of the Fund or any other Alliance Mutual Fund made not more than
90 days prior to the date that the investor signs a Statement of
Intention; however, the 13-month period during which the
Statement of Intention is in effect will begin on the date of the
earliest purchase to be included.

Investors qualifying for the Combined Purchase Privilege
described above may purchase shares of the Alliance Mutual Funds
under a single Statement of Intention. For example, if at the
time an investor signs a Statement of Intention to invest at
least $100,000 in Class A shares of the Fund, the investor and
the investor's spouse each purchase shares of the Fund worth
$20,000 (for a total of $40,000), it will only be necessary to
invest a total of $60,000 during the following 13 months in
shares of the Fund or any other Alliance Mutual Fund, to qualify
for the 3.25% sales charge on the total amount being invested
(the sales charge applicable to an investment of $100,000).

The Statement of Intention is not a binding obligation upon
the investor to purchase the full amount indicated. The minimum
initial investment under a Statement of Intention is 5% of such
amount. Shares purchased with the first 5% of such amount will
be held in escrow (while remaining registered in the name of the
investor) to secure payment of the higher sales charge applicable
to the shares actually purchased if the full amount indicated is
not purchased, and such escrowed shares will be involuntarily
redeemed to pay the additional sales charge, if necessary.
Dividends on escrowed shares, whether paid in cash or reinvested
in additional Fund shares, are not subject to escrow. When the
full amount indicated has been purchased, the escrow will be
released. To the extent that an investor purchases more than the
dollar amount indicated on the Statement of Intention and
qualifies for a further reduced sales charge, the sales charge
will be adjusted for the entire amount purchased at the end of
the 13-month period. The difference in sales charge will be used
to purchase additional shares of the Fund subject to the rate of

<PAGE>

sales charge applicable to the actual amount of the aggregate
purchases.

Investors wishing to enter into a Statement of Intention in
conjunction with their initial investment in Class A shares of
the Fund should complete the appropriate portion of the
Subscription Application found in the Prospectus while current
Class A shareholders desiring to do so can obtain a form of
Statement of Intention by contacting Alliance Fund Services, Inc.
at the address or telephone numbers shown on the cover of this
Statement of Additional Information.

Certain Retirement Plans. Multiple participant payroll
deduction retirement plans may also purchase shares of the Fund
or any other Alliance Mutual Fund at a reduced sales charge on a
monthly basis during the 13-month period following such a plan's
initial purchase. The sales charge applicable to such initial
purchase of shares of the Fund will be that normally
applicable,under the schedule of sales charges set forth in this
Statement of Additional Information, to an investment 13 times
larger than such initial purchase. The sales charge applicable
to each succeeding monthly purchase will be that normally
applicable, under such schedule, to an investment equal to the
sum of (i) the total purchase previously made during the 13-month
period, and (ii) the current month's purchase multiplied by the
number of months (including the current month) remaining in the
13-month period. Sales charges previously paid during such
period will not be retroactively adjusted on the basis of later
purchases.

Reinstatement Privilege. A Class A shareholder who has
caused any or all of his or her shares of the Fund to be redeemed
or repurchased may reinvest all or any portion of the redemption
or repurchase proceeds in Class A shares of the Fund at net asset
value without any sales charge, provided that such reinvestment
is made within 30 calendar days after the redemption or
repurchase date. Shares are sold to a reinvesting shareholder at
the net asset value next determined as described above. A
reinstatement pursuant to this privilege will not cancel the
redemption or repurchase transaction; therefore, any gain or loss
so realized will be recognized for Federal tax purposes except
that no loss will be recognized to the extent that the proceeds
are reinvested in shares of the Fund. The reinstatement
privilege may be used by the shareholder only once, irrespective
of the number of shares redeemed or repurchased, except that the
privilege may be used without limit in connection with
transactions whose sole purpose is to transfer a shareholder's
interest in the Fund to his or her individual retirement account
or other qualified retirement plan account. Investors may
exercise the reinstatement privilege by written request sent to

<PAGE>

the Fund at the address shown on the cover of this Statement of
Additional Information.

Sales at Net Asset Value. The Fund may sell its Class A
shares at net asset value, i.e., without any sales charge, to
certain categories of investors including: (i) investment
advisory clients of the Adviser or its affiliates; (ii) officers
and present or former Directors of the Fund; present or former
directors and trustees of other investment companies managed by
the Adviser; present or retired full-time employees of the
Adviser; officers, directors and present or retired full-time
employees of ACMC, the Principal Underwriter, Alliance Fund
Services, Inc. and their affiliates; officers, directors and
present and full-time employees of selected dealers or agents; or
the spouse, sibling, direct ancestor or direct descendant
(collectively "relatives") of any such person; or any trust,
individual retirement account or retirement plan account for the
benefit of any such person or relative; or the estate of any such
person or relative, if such shares are purchased for investment
purposes (such shares may not be resold except to the Fund);(iii)
certain employee benefit plans for employees of the Adviser, the
Principal Underwriter, Alliance Fund Services, Inc. and their
affiliates; (iv) persons who were shareholders of the Fund before
the commencement of sales of shares of the Fund subject to a
sales charge; and (v) persons participating in a fee-based
program, sponsored and maintained by a registered broker-dealer
and approved by the Principal Underwriter, pursuant to which such
persons pay an asset-based fee to such broker- dealer, or its
affiliate or agent, for service in the nature of investment
advisory or administrative services. These provisions are
intended to provide additional job-related incentives to persons
who serve the Fund or work for companies associated with the Fund
and selected dealers and agents of the Fund. Since these persons
are in a position to have a basic understanding of the nature of
an investment company as well as a general familiarity with the
Fund, sales to these persons, as compared to sales in the normal
channels of distribution, require substantially less sales
effort. Similarly, these provisions extend the privilege of
purchasing shares at net asset value to certain classes of
institutional investors who, because of their investment
sophistication, can be expected to require significantly less
than normal sales effort on the part of the Fund and the
Principal Underwriter.

Deferred Sales Charge Alternative--Class B Shares

Investors choosing the deferred sales charge alternative
purchase Class B shares at the public offering price equal to the
net asset value per share of the Class B shares on the date of
purchase without the imposition of a sales charge at the time of
purchase. The Class B shares are sold without an initial sales

<PAGE>

charge so that the Fund will receive the full amount of the
investor's purchase payment.

Proceeds from the contingent deferred sales charge are paid
to the Principal Underwriter and are used by the Principal
Underwriter to defray the expenses of the Principal Underwriter
related to providing distribution-related services to the Fund in
connection with the sale of the Class B shares, such as the
payment of compensation to selected dealers and agents for
selling Class B shares. The combination of the contingent
deferred sales charge and the distribution services fee enables
the Fund to sell the Class B shares without a sales charge being
deducted at the time of purchase. The higher distribution
services fee incurred by Class B shares will cause such shares to
have a higher expense ratio and to pay lower dividends than those
related to Class A shares.

Contingent Deferred Sales Charge. Class B shares which are
redeemed within four years of purchase will be subject to a
contingent deferred sales charge at the rates set forth below
charged as a percentage of the dollar amount subject thereto. The
charge will be assessed on an amount equal to the lesser of the
cost of the shares being redeemed or their net asset value at the
time of redemption. Accordingly, no sales charge will be imposed
on increases in net asset value above the initial purchase price.
In addition, no charge will be assessed on shares derived from
reinvestment of dividends or capital gains distributions.

The amount of the contingent deferred sales charge, if any,
will vary depending on the number of years from the time of
payment for the purchase of Class B shares until the time of
redemption of such shares.

Contingent Deferred Sales Charge as a %
of Dollar Amount Subject to Charge
_______________________________________

Shares purchased Shares purchased
Years before on or after
Since Purchase November 19, 1993 November 19,1993
______________ _________________ ________________

First 5.50% 4.00%
Second 4.50% 3.00%
Third 3.50% 2.00%
Fourth 2.50% 1.00%
Fifth 1.50% None
Sixth 0.50% None

<PAGE>

In determining the contingent deferred sales charge
applicable to a redemption, it will be assumed, in the case of
Class B shares purchased on or after November 19, 1993, that the
redemption is first of any Class A shares or Class C shares in
the shareholder's Fund account, second of Class B shares held for
over four years or Class B shares acquired pursuant to
reinvestment of dividends or distributions and third of Class B
shares held longest during the four-year period. When Class B
shares acquired in an exchange are redeemed, the applicable
contingent deferred sales charge and conversion schedules will be
the schedules that applied to Class B shares of the Alliance
Mutual Fund originally purchased by the shareholder at the time
of their purchase. The charge will not be applied to dollar
amounts representing an increase in the net asset value since the
time of purchase.

To illustrate, assume that on or after November 19, 1993 an
investor purchased 100 Class B shares at $10 per share (at a cost
of $1,000) and in the second year after purchase, the net asset
value per share is $12 and, during such time, the investor has
acquired 10 additional Class B shares upon dividend reinvestment.
If at such time the investor makes his or her first redemption of
50 Class B shares (proceeds of $600), 10 Class B shares will not
be subject to charge because of dividend reinvestment. With
respect to the remaining 40 Class B shares, the charge is applied
only to the original cost of $10 per share and not to the
increase in net asset value of $2 per share. Therefore, $400 of
the $600 redemption proceeds will be charged at a rate of 3.0%
(the applicable rate in the second year after purchase).

The contingent deferred sales charge is waived on redemptions
of shares (i) following the death or disability, as defined in
the Internal Revenue Code of 1986, as amended (the "Code"), of a
shareholder, (ii) to the extent that the redemption represents a
minimum required distribution from an individual retirement
account or other retirement plan to a shareholder who has
attained the age of 70-1/2 or (iii) that had been purchased by
present or former Directors of the Fund, by the relative of any
such person, by any trust, individual retirement account or
retirement plan account for the benefit of any such person or
relative, or by the estate of any such person or relative.

Conversion Feature. At the end of the period ending eight
years after the end of the calendar month in which the
shareholder's purchase order was accepted, Class B shares will
automatically convert to Class A shares and will no longer be
subject to a higher distribution services fee. Such conversion
will be on the basis of the relative net asset values of the two
classes, without the imposition of any sales load, fee or other
charge. The purpose of the conversion feature is to reduce the
distribution services fee paid by holders of Class B shares that

<PAGE>

have been outstanding long enough for the Principal Underwriter
to have been compensated for distribution expenses incurred in
the sale of such shares.

For purposes of conversion to Class A, Class B shares
purchased through the reinvestment of dividends and distributions
paid in respect of Class B shares in a shareholder's account 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, an equal pro-rata portion
of the Class B shares in the sub-account will also convert to
Class A.

The conversion of Class B shares to Class A shares is subject
to the continuing availability of an opinion of counsel to the
effect that (i) the assessment of the higher distribution
services fee and transfer agency costs with respect to Class B
shares does not result in the Fund's dividends or distributions
constituting "preferential dividends" under the Code, and (ii)
the conversion of Class B shares to Class A shares does not
constitute a taxable event under federal income tax law. The
conversion of Class B shares to Class A shares may be suspended
if such an opinion is no longer available at the time such
conversion is to occur. In that event, no further conversions of
Class B shares would occur, and shares might continue to be
subject to the higher distribution services fee for an indefinite
period which may extend beyond the period ending eight years
after the end of the calendar month in which the shareholder's
purchase order was accepted.

Asset-Based Sales Charge Alternative--Class C Shares

Investors choosing the asset-based sales charge alternative
purchase Class C shares at the public offering price equal to the
net asset value per share of the Class C shares on the date of
purchase without the imposition of a sales charge either at the
time of purchase or upon redemption. Class C shares are sold
without an initial sales charge so that the Fund will receive the
full amount of the investor's purchase payment and without a
contingent deferred sales charge so that the investor will
receive as proceeds upon redemption the entire net asset value of
his or her Class C shares. The Class C distribution services fee
enables the Fund to sell Class C shares without either an initial
or contingent deferred sales charge. Class C shares do not
convert to any other class of shares of the Fund and incur higher
distribution services fees than Class A shares, and will thus
have a higher expense ratio and pay correspondingly lower
dividends than Class A shares.

<PAGE>

_________________________________________________________________

REDEMPTION AND REPURCHASE OF SHARES
_________________________________________________________________

The following information supplements that set forth in the
Fund's Prospectus under the heading "Purchase and Sale of
Shares--How to Sell Shares."

Redemption

Subject only to the limitations described below, the Fund
redeems the shares tendered to it, as described below, at a
redemption price equal to their net asset value as next computed
following the receipt of shares tendered for redemption in proper
form. Except for any contingent deferred sales charge which may
be applicable to Class B shares, there is no redemption charge.
Payment of the redemption price will be made within seven days
after the Fund's receipt of such tender for redemption.

The right of redemption may not be suspended or the date of
payment upon redemption postponed for more than seven days after
shares are tendered for redemption, except for any period during
which the New York Stock Exchange (the "Exchange") is closed
(other than customary weekend and holiday closings) or during
which the Securities and Exchange Commission determines that
trading thereon is restricted, or for any period during which an
emergency (as determined by the Securities and Exchange
Commission) exists as a result of which disposal by the Fund of
securities owned by it is not reasonably practicable or as a
result of which it is not reasonably practicable for the Fund
fairly to determine the value of its net assets, or for such
other periods as the Securities and Exchange Commission may by
order permit for the protection of security holders of the Fund.

Payment of the redemption price may be made either in cash or
in portfolio securities (selected at the discretion of the
Directors of the Fund and taken at their value used in
determining the redemption price), or partly in cash and partly
in portfolio securities. However, payments will be made wholly
in cash unless the Directors believe that economic conditions
exist which would make such a practice detrimental to the best
interests of the Fund. The Fund has filed a formal election with
the Securities and Exchange Commission pursuant to which the Fund
will only effect a redemption in portfolio securities where the
particular shareholder of record is redeeming more than $250,000
or 1% of the Fund's total net assets, whichever is less, during
any 90-day period. In the opinion of the Fund's management,
however, the amount of a redemption request would have to be
significantly greater than $250,000 or 1% of total net assets
before a redemption wholly or partly in portfolio securities

<PAGE>

would be made. If payment for shares redeemed is made wholly or
partly in portfolio securities, brokerage costs may be incurred
by the investor in converting the securities to cash.

The value of a shareholder's shares on redemption or
repurchase may be more or less than the cost of such shares to
the shareholder, depending upon the market value of the Fund's
portfolio securities at the time of such redemption or
repurchase. Redemption proceeds on Class B shares will reflect
the deduction of the contingent deferred sales charge, if any.
Payment (either in cash or in portfolio securities) received by a
shareholder upon redemption or repurchase of his shares, assuming
the shares constitute capital assets in his hands, will result in
long-term or short-term capital gains (or loss) depending upon
the shareholder's holding period and basis in respect of the
shares redeemed.

To redeem shares of the Fund for which no stock certificates
have been issued, the registered owner or owners should forward a
letter to the Fund containing a request for redemption. The
signature or signatures on the letter must be guaranteed by an
institution that is an "eligible guarantor" as defined in Rule
17Ad-15 under the Securities Exchange Act of 1934, as amended.

Telephone Redemption By Electronic Funds Transfer. Requests
for redemption of shares for which no stock certificates have
been issued can also be made by telephone at (800) 221-5672 by a
shareholder who has completed the appropriate portion of the
Subscription Application or, in the case of an existing
shareholder, an "Autosell" application obtained from Alliance
Fund Services, Inc. A telephone redemption request must be for
at least $500 and may not exceed $100,000, and must be made
between 9:00 a.m. and 4:00 p.m. New York time on a Fund business
day as defined above. Proceeds of telephone redemptions will be
sent by Electronic Funds Transfer to a shareholder's designated
bank account at a bank selected by the shareholder that is a
member of the NACHA.

Telephone Redemption By Check. Except as noted below, each
Fund shareholder is eligible to request redemption, once in any
30-day period, of Fund shares by telephone at (800) 221-5672
before 4:00 p.m. New York time on a Fund business day in an
amount not exceeding $25,000. Proceeds of such redemptions are
remitted by check to the shareholder's address of record.
Telephone redemption by check is not available with respect to
shares (i) for which certificates have been issued, (ii) held in
nominee or "street name" accounts, (iii) purchased within 15
calendar days prior to the redemption request, (iv) held by a
shareholder who has changed his or her address of record within
the preceding 30 calendar days or (v) held in any retirement plan
account. A shareholder otherwise eligible for telephone

<PAGE>

redemption by check may cancel the privilege by written
instruction to Alliance Fund Services, Inc., or by checking the
appropriate box on the Subscription Application found in the
Prospectus.

General. During periods of drastic economic or market
developments, such as the market break of October 1987, it is
possible that shareholders would have difficulty in reaching
Alliance Fund Services, Inc. by telephone (although no such
difficulty was apparent at any time in connection with the 1987
market break). If a shareholder were to experience such
difficulty, the shareholder should issue written instructions to
Alliance Fund Services, Inc. at the address shown on the cover of
this Statement of Additional Information. The Fund reserves the
right to suspend or terminate its telephone redemption service at
any time without notice. Neither the Fund nor the Adviser, the
Principal Underwriter or Alliance Fund Services, Inc. will be
responsible for the authenticity of telephone requests for
redemptions that the Fund reasonably believes to be genuine. The
Fund will employ reasonable procedures in order to verify that
telephone requests for redemptions are genuine, including, among
others, recording such telephone instructions and causing written
confirmations of the resulting transactions to be sent to
shareholders. If the Fund did not employ such procedures, it
could be liable for losses arising from unauthorized or
fraudulent telephone instructions. Selected dealers or agents
may charge a commission for handling telephone requests for
redemptions.

To redeem shares of the Fund represented by stock
certificates, the investor should forward the appropriate stock
certificate or certificates, endorsed in blank or with blank
stock powers attached, to the Fund with the request that the
shares represented thereby, or a specified portion thereof, be
redeemed. The stock assignment form on the reverse side of each
stock certificate surrendered to the Fund for redemption must be
signed by the registered owner or owners exactly as the
registered name appears on the face of the certificate or,
alternatively, a stock power signed in the same manner may be
attached to the stock certificate or certificates or, where
tender is made by mail, separately mailed to the Fund. The
signature or signatures on the assignment form must be guaranteed
in the manner described above.

Repurchase

The Fund may repurchase shares through the Principal
Underwriter or selected dealers or agents. The repurchase price
will be the net asset value next determined after the Principal
Underwriter receives the request (less the contingent deferred
sales charge, if any, with respect to the Class B shares), except

<PAGE>

that requests placed through selected dealers or agents before
the close of regular trading on the Exchange on any day will be
executed at the net asset value determined as of such close of
regular trading on that day if received by the Principal
Underwriter prior to its close of business on that day (normally
5:00 p.m. New York time). The selected dealer or agent is
responsible for transmitting the request to the Principal
Underwriter by 5:00 p.m. If the selected dealer or agent fails
to do so, the shareholder's right to receive that day's closing
price must be settled between the shareholder and the dealer or
agent. A shareholder may offer shares of the Fund to the
Principal Underwriter either directly or through a selected
dealer or agent. Neither the Fund nor the Principal Underwriter
charges a fee or commission in connection with the repurchase of
shares (except for the contingent deferred sales charge, if any,
with respect to Class B shares). Normally, if shares of the Fund
are offered through a selected dealer or agent, the repurchase is
settled by the shareholder as an ordinary transaction with or
through the selected dealer or agent, who may charge the
shareholder for this service. The repurchase of shares of the
Fund as described above is a voluntary service of the Fund and
the Fund may suspend or terminate this practice at any time.

General

The Fund reserves the right to close out an account that
through redemption has remained below $200 for at least 60 days
after at least 30 days' written notice to the shareholder
subsequent to such period. No contingent deferred sales charge
will be deducted from the proceeds of this redemption. In the
case of a redemption or repurchase of shares of the Fund recently
purchased by check, redemption proceeds will not be made
available until the Fund is reasonably assured that the check has
cleared, normally up to 15 calendar days following the purchase
date.

_________________________________________________________________

SHAREHOLDER SERVICES
_________________________________________________________________

The following information supplements that set forth in the
Fund's Prospectus under the heading "Purchase and Sale of
Shares--Shareholder Services." The shareholder services set
forth below are applicable to all three classes of shares of the
Fund.

<PAGE>

Automatic Investment Program

Investors may purchase shares of the Fund through an
automatic investment program utilizing "pre-authorized check"
drafts drawn on the investor's own bank account. Under such a
program, pre-authorized monthly drafts for a fixed amount (at
least $25) are used to purchase shares through the selected
dealer or selected agent designated by the investor at the public
offering price next determined after the Principal Underwriter
receives the proceeds from the investor's bank. Drafts may be
made in paper form or, if the investor's bank is a member of the
NACHA, in electronic form. If made in paper form, the draft is
normally made on the 20th day of each month, or the next business
day thereafter. If made in electronic form, drafts can be made
on or about a date each month selected by the shareholder.
Investors wishing to establish an automatic investment program in
connection with their initial investment should complete the
appropriate portion of the Subscription Application found in the
Prospectus. Current shareholders should contact Alliance Fund
Services, Inc. at the address or telephone numbers shown on the
cover of this Statement of Additional Information to establish an
automatic investment program.

Exchange Privilege

Class A shareholders of the Fund can exchange their Class A
shares for Class A shares of the Alliance Mutual Funds without
the payment of any sales or service charges. Class A
shareholders may also exchange their Class A shares for shares of
any of the ten Alliance Cash Management Funds: Alliance Capital
Reserves, Alliance Money Reserves, Alliance Government Reserves,
Alliance Treasury Reserves and the General, California,
Connecticut, New Jersey and New York Portfolios of Alliance
Municipal Trust, all of which are money market funds, and
Alliance World Income Trust, Inc., a short-term global income
fund. Prospectuses for each Alliance Mutual Fund and Alliance
Cash Management Fund (each an "Alliance Fund"), may be obtained
by contacting Alliance Fund Services, Inc. at the address shown
on the cover of this Statement of Additional Information or by
telephone at (800) 227-4618 or, in Illinois, (800) 227-4170.

Class B shareholders of the Fund can exchange their Class B
shares ("original Class B shares") for Class B shares of any
other Alliance Mutual Fund that offers Class B shares ("new Class
B shares") without the payment of any contingent deferred sales
or service charges. For purposes of computing both the time
remaining before the new Class B shares convert to Class A shares
of that fund and the contingent deferred sales charge payable
upon disposition of the new Class B shares, the period of time
for which the original Class B shares have been held is added to
the period of time for which the new Class B shares have been

<PAGE>

held, and the original fund's contingent deferred sales charge
schedule is applied.

Class C shareholders of the Fund can exchange their Class C
shares for Class C shares of the other Alliance Mutual Funds.

All exchanges are subject to the minimum investment
requirements and any other applicable terms set forth in the
Prospectus for the Alliance Fund whose shares are being acquired.
An exchange is effected through the redemption of the shares
tendered for exchange and the purchase of shares being acquired
at their respective net asset values as next determined following
receipt by the Alliance Fund whose shares are being exchanged of
(i) proper instructions and all necessary supporting documents as
described in such fund's Prospectus, or (ii) a telephone request
for such exchange in accordance with the procedures set forth in
the following paragraph. Exchanges involving the redemption of
shares recently purchased by check will be permitted only after
the Alliance Fund whose shares have been tendered for exchange is
reasonably assured that the check has cleared, normally up to 15
calendar days following the purchase date. Exchanges of shares
of Alliance Mutual Funds will generally result in the realization
of a capital gain or loss for Federal income tax purposes.

Each Fund shareholder, and the shareholder's selected dealer
or agent, are authorized to make telephone requests for exchanges
unless Alliance Fund Services, Inc., receives written instruction
to the contrary from the shareholder, or the shareholder declines
the privilege by checking the appropriate box on the Subscription
Application found in the Prospectus. Such telephone requests
cannot be accepted with respect to shares then represented by
stock certificates. Shares acquired pursuant to a telephone
request for exchange will be held under the same account
registration as the shares redeemed through such exchange.

Eligible shareholders desiring to make an exchange should
telephone Alliance Fund Services, Inc. with their account number
and other details of the exchange, at (800) 221-5672 between 9:00
a.m. and 4:00 p.m., New York time, on a Fund business day as
defined above. Telephone requests for exchange received before
4:00 p.m. New York time on a Fund business day will be processed
as of the close of business on that day. During periods of
drastic economic or market developments, such as the market break
of October 1987, it is possible that shareholders would have
difficulty in reaching Alliance Fund Services, Inc. by telephone
(although no such difficulty was apparent at any time in
connection with the 1987 market break). If a shareholder were to
experience such difficulty, the shareholder should issue written
instructions to Alliance Fund Services, Inc. at the address shown
on the cover of this Statement of Additional Information.

<PAGE>

A shareholder may elect to initiate a monthly "Auto Exchange"
whereby a specified dollar amount's worth of his or her Fund
shares (minimum $25) is automatically exchanged for shares of
another Alliance Mutual Fund. Auto Exchange transactions
normally occur on the 12th day of each month, or the Fund
business day prior thereto. Auto Exchange is not currently
available between Alliance Cash Management Funds and Alliance
Mutual Funds.

Neither the Alliance Funds nor the Adviser, the Principal
Underwriter or Alliance Fund Services, Inc. will be responsible
for the authenticity of telephone requests for exchanges that the
Fund reasonably believes to be genuine. The Fund will employ
reasonable procedures in order to verify that telephone requests
for exchanges are genuine, including, among others, recording
such telephone instructions and causing written confirmations of
the resulting transactions to be sent to shareholders. If the
Fund did not employ such procedures, it could be liable for
losses arising from unauthorized or fraudulent telephone
instructions. Selected dealers or agents may charge a commission
for handling telephone requests for exchanges.

The exchange privilege is available only in states where
shares of the Alliance Mutual Funds being acquired may be legally
sold. Each Alliance Mutual Fund reserves the right, at any time
on 60 days' notice to its shareholders, to reject any order to
acquire its shares through exchange or otherwise to modify,
restrict or terminate the exchange privilege.

Retirement Plans

The Fund may be a suitable investment vehicle for part or all
of the assets held in various types of retirement plans, such as
those listed below. The Fund has available forms of such plans
pursuant to which investments can be made in the Fund and other
Alliance Mutual Funds. Persons desiring information concerning
these plans should contact Alliance Fund Services,Inc. at the
"Literature" telephone number on the cover of this Statement of
Additional Information, or write to:

Alliance Fund Services, Inc.
Retirement Plans
P.O. Box 1520
Secaucus, New Jersey 07096-1520

Individual Retirement Account ("IRA"). Individuals who
receive compensation, including earnings from self-employment,
are entitled to establish and make contributions to an IRA.
Taxation of the income and gains paid to an IRA by the Fund is
deferred until distribution from the IRA. An individual's
eligible contribution to an IRA will be deductible if neither the

<PAGE>

individual nor his or her spouse is an active participant in an
employer-sponsored retirement plan. If the individual or his or
her spouse is an active participant in an employer-sponsored
retirement plan, the individual's contributions to an IRA may be
deductible, in whole or in part, depending on the amount of the
adjusted gross income of the individual and his or her spouse.

Employer-Sponsored Qualified Retirement Plans. Sole
proprietors, partnerships and corporations may sponsor qualified
money purchase pension and profit-sharing plans, including
Section 401(k) plans ("qualified plans"), under which annual tax-
deductible contributions are made within prescribed limits based
on compensation paid to participating individuals.

If the aggregate net asset value of shares of the Alliance
Mutual Funds held by a qualified plan investing through the
Alliance Premier Retirement Program reaches $5 million on or
before December 15 in any year, all Class B or C shares of the
Fund held by such plan can be exchanged, without any sales
charge, for Class A shares of such Fund shortly before the end of
the calendar year in which the $5 million level is attained. The
Fund waives any contingent deferred sales charge applicable to
redemptions of Class B shares by qualified plans investing
through the Alliance Premier Retirement Program.

Simplified Employee Pension Plan ("SEP"). Sole proprietors,
partnerships and corporations may sponsor a SEP under which they
make annual tax-deductible contributions to an IRA established by
each eligible employee within prescribed limits based on employee
compensation.

403(b)(7) Retirement Plan. Certain tax-exempt organizations
and public educational institutions may sponsor retirements plans
under which an employee may agree that monies deducted from his
or her compensation (minimum $25 per pay period) may be
contributed by the employer to a custodial account established
for the employee under the plan.

The Alliance Plans Division of Frontier Trust Company, a
subsidiary of The Equitable Life Assurance Society of the United
States, which serves as custodian or trustee under the retirement
plan prototype forms available from the Fund, charges certain
nominal fees for establishing an account and for annual
maintenance. A portion of these fees is remitted to Alliance
Fund Services, Inc. as compensation for its services to the
retirement plan accounts maintained with the Fund.

Distributions from retirement plans are subject to certain
Code requirements in addition to normal redemption procedures.
For additional information please contact Alliance Fund Services,
Inc.

<PAGE>

Dividend Direction Plan

A shareholder who already maintains, in addition to his or
her Class A, Class B or Class C Fund account, a Class A, Class B
or Class C account(s) with one or more other Alliance Mutual
Funds may direct that income dividends and/or capital gains paid
on his or her Class A, Class B or Class C Fund shares be
automatically reinvested, in any amount, without the payment of
any sales or service charges, in shares of the same class of such
other Alliance Mutual Fund(s). Further information can be
obtained by contacting Alliance Fund Services, Inc. at the
address or the "Literature" telephone number shown on the cover
of this Statement of Additional Information. Investors wishing
to establish a dividend direction plan in connection with their
initial investment should complete the appropriate section of the
Subscription Application found in the Prospectus. Current
shareholders should contact Alliance Fund Services, Inc. to
establish a dividend direction plan.

Systematic Withdrawal Plan

Any shareholder who owns or purchases shares of the Fund
having a current net asset value of at least $4,000 (for
quarterly or less frequent payments), $5,000 (for bi-monthly
payments) or $10,000 (for monthly payments) may establish a
systematic withdrawal plan under which the shareholder will
periodically receive a payment in a stated amount of not less
than $50 on a selected date. Systematic withdrawal plan
participants must elect to have their dividends and distributions
from the Fund automatically reinvested in additional shares of
the Fund.

Shares of the Fund owned by a participant in the Fund's
systematic withdrawal plan will be redeemed as necessary to meet
withdrawal payments and such withdrawal payments will be subject
to any taxes applicable to redemptions. Shares acquired with
reinvested dividends and distributions will be liquidated first
to provide such withdrawal payments and thereafter other shares
will be liquidated to the extent necessary, and depending upon
the amount withdrawn, the investor's principal may be depleted. A
systematic withdrawal plan may be terminated at any time by the
shareholder or the Fund.

Withdrawal payments will not automatically end when a
shareholder's account reaches a certain minimum level. Therefore,
redemptions of shares under the plan may reduce or even liquidate
a shareholder's account and may subject the shareholder to the
Fund's involuntary redemption provisions. See "Redemption and
Repurchase of Shares -- General." Purchases of additional shares
concurrently with withdrawals are undesirable because of sales
charges when purchases are made. While an occasional lump-sum

<PAGE>

investment may be made by a shareholder of Class A shares who is
maintaining a systematic withdrawal plan, such investment should
normally be an amount equivalent to three times the annual
withdrawal or $5,000, whichever is less.

For Class A shareholders, Class B shareholders that purchased
their Class B shares under a retirement plan and Class C
shareholders, payments under a systematic withdrawal plan may be
made by check or electronically via the Automated Clearing House
("ACH") network. Investors wishing to establish a systematic
withdrawal plan in conjunction with their initial investment in
shares of the Fund should complete the appropriate portion of the
Subscription Application found in the Prospectus, while current
Fund shareholders desiring to do so can obtain an application
form by contacting Alliance Fund Services, Inc. at the address or
the "Literature" telephone number shown on the cover of this
Statement of Additional Information.

Statements and Reports

Each shareholder of the Fund receives semi-annual and annual
reports which include a portfolio of investments, financial
statements and, in the case of the annual report, the report of
the Fund's independent accountants, Price Waterhouse LLP, as well
as a confirmation of each purchase and redemption. By contacting
his or her broker or Alliance Fund Services, Inc., a shareholder
can arrange for copies of his or her account statements to be
sent to another person.

_________________________________________________________________

NET ASSET VALUE
_________________________________________________________________

The net asset value per share is computed in accordance with
the Fund's Articles of Incorporation and By-Laws, at the next
close of regular trading on the Exchange (currently 4:00 p.m. New
York time) following receipt of a purchase or redemption order
(and on such other days as the Directors of the Fund deem
necessary in order to comply with Rule 22c-1 under the 1940 Act.
The Fund's per share net asset value is calculated by dividing
the value of its total assets, less its liabilities, by the total
number of its shares then outstanding. The net asset value is
calculated at the close of business on each Fund business day.
For this purpose, a Fund's business day is any weekday exclusive
of national holidays on which the Exchange is closed and Good
Friday. Portfolio securities which are traded over-the-counter
and on a national securities exchange are valued in the market
which the Board of Directors determines is the broadest and most
representative. When securities are valued in the over-the-
counter market, valuations are at the mean of the closing bid and

<PAGE>

asked prices. When Exchange valuations are used, the valuation
is the last quoted sales price as of the close of the Exchange on
the day of valuation; if there have been no sales during the day,
the mean value of the closing bid and asked prices is used. If
no quotations are available, securities will be valued at fair
value as determined in good faith by the Board of Directors. The
Board of Directors has further determined that the value of
certain portfolio debt securities, other than temporary
investments in short-term securities, be determined by reference
to valuations obtained from a pricing service which takes into
account appropriate factors such as institution-size trading in
similar groups of securities, yield, quality, coupon rate,
maturity, type of issue, trading characteristics and other market
data in determining valuations of such securities, without
exclusive reliance upon quoted prices, since such valuations are
believed by the Board more accurately to reflect the fair value
of such securities. At the present time, the Fund is employing a
pricing service. Several pricing services are available, and the
Board of Directors may authorize the use of another such service.
In addition, the Board has directed the officers of the Fund
periodically to compare valuations obtained from the pricing
service with quotations from bond dealers. Temporary investments
in short-term securities having a maturity of 60 days or less are
valued at original cost which, when combined with amortized
discount or accrued interest receivable, approximates market.

The assets belonging to the Class A shares, the Class B
shares and the Class C shares will be invested together in a
single portfolio. The net asset value of each class will be
determined separately by subtracting the accrued expenses and
liabilities allocated to that class from the assets belonging to
that class pursuant to an order issued by the Securities and
Exchange Commission.

_________________________________________________________________

DIVIDENDS, DISTRIBUTIONS AND TAXES
_________________________________________________________________

The Fund intends to qualify as a regulated investment company
under the Internal Revenue Code for each taxable year.
Qualification as a regulated investment company under the
Internal Revenue Code requires, among other things, that (a) at
least 90% of the Fund's annual gross income, without offset for
losses from the sale or other disposition of securities, be
derived from interest, payments with respect to securities loans,
dividends and gains from the sale or other disposition of
securities or options thereon; (b) the Fund derive less than 30%
of its gross income from gains (without offset for losses) from
the sale or other disposition of securities or options thereon
held for less than three months; and (c) the Fund diversify its

<PAGE>

holdings so that, at the end of each quarter of the taxable year,
(i) at least 50% of the market value of the Fund's assets is
represented by cash, government securities and other securities
limited in respect of any one issuer to an amount not greater
than 5% of the Fund's assets and 10% of the outstanding voting
securities of such issuer, and (ii) not more than 25% of the
value of its assets is invested in the securities of any one
issuer (other than government securities). If the Fund qualifies
as a regulated investment company for any taxable year and makes
timely distributions to the Fund's shareholders of 90% or more of
its net investment income for that year (calculated without
regard to its net capital gain, i.e., the excess of its net
long-term capital gain over its net short-term capital loss) it
will not be subject to federal income tax on the portion of its
taxable income for the year (including any net capital gain) that
it distributes to its shareholders. The Fund will also avoid the
nondeductible 4% federal excise tax that would otherwise apply to
certain undistributed income for a given calendar year if it
makes timely distributions to its shareholders which meet certain
minimum distribution requirements. For this purpose, income or
gain retained by the Fund which is subject to corporate income
tax will be considered to have been distributed by year-end. In
addition, dividends declared in October, November or December
payable to shareholders of record as of a specified date during
such month and paid in the following January will be treated as
having been paid by the Fund and received by shareholders in
December.

Gains or losses on sales of securities by the Fund generally
will be long-term capital gains or losses if the securities have
been held by it for more than one year. Other gains or losses on
the sale of securities will be short-term capital gains or
losses. If an option written by the Fund lapses or is terminated
through a closing transaction, such as a repurchase by the Fund
of the option of its holder, the Fund may realize a short-term
capital gain or loss, depending on whether the premium income is
greater or less than the amount paid by the Fund in the closing
transaction. If securities are sold by the Fund pursuant to the
exercise of a call option written by it, the Fund will add the
premium received to the sale price of the securities delivered in
determining the amount of gain or loss on the sale. The
requirement that the Fund derive no more than 30% of its gross
income from gains from the sale of securities held for less than
three months may limit the Fund's ability to write options.

It is the present policy of the Fund to distribute to
shareholders all net investment income quarterly and to
distribute net realized capital gains, if any, annually. The
amount of any such distributions must necessarily depend upon the
realization by the Fund of income and capital gains from
investments.

<PAGE>

________________________________________________________________

PORTFOLIO TRANSACTIONS
_________________________________________________________________

Subject to the general supervision and control of the
Directors of the Fund, the Adviser makes the Fund's portfolio
decisions and determines the broker to be used in each specific
transaction with the objective of negotiating best price and
execution. When consistent with the objective of obtaining best
execution, brokerage may be directed to persons or firms
supplying investment information to the Adviser. There may be
occasions where the transaction cost charged by a broker may be
greater than that which another broker may charge if the Fund
determines in good faith that the amount of such transaction cost
is reasonable in relation to the value of the brokerage, research
and statistical services provided by the executing broker.
Consistent with the Rules of Fair Practice of the National
Association of Securities Dealers, Inc., and subject to seeking
best execution, the Fund may consider sales of shares of the Fund
as a factor in the selection of brokers to execute portfolio
transactions for the Fund.

Neither the Fund nor the Adviser has entered into agreements
or understandings with any brokers regarding the placement of
securities transactions because of research or statistical
services they provide. To the extent that such persons or firms
supply investment information to the Adviser for use in rendering
investment advice to the Fund, such information may be supplied
at no cost to the Adviser. While it is impossible to place an
actual dollar value on such investment information, its receipt
by the Adviser probably does not reduce the overall expenses of
the Adviser to any material extent.

The investment information provided to the Adviser is of the
type described in Section 28(e)(3) of the Securities Exchange Act
of 1934 and is designed to augment the Adviser's own internal
research and investment strategy capabilities. Research and
statistical services furnished by brokers through which the Fund
effects securities transactions are used by the Adviser in
carrying out its investment management responsibilities with
respect to all its client accounts but not all such services may
be used by the Adviser in connection with the Fund.

The Fund may deal in some instances in securities which are
not listed on a national stock exchange but are traded in the
over-the-counter market. The Fund may also purchase listed
securities through the third market, i.e., from a dealer which is
not a member of the exchange on which a security is listed.
Where transactions are executed in the over-the-counter market or
third market, the Fund will seek to deal with the primary market

<PAGE>

makers; but when necessary in order to obtain the best price and
execution, it will utilize the services of others. In all cases,
the Fund will attempt to negotiate best execution.

With respect to orders placed with Donaldson, Lufkin &
Jenrette Securities Corporation for execution on a national
securities exchange, commissions received must conform to Section
17(e)(2)(A) of the 1940 Act and Rule 17e-1 thereunder, which
permit an affiliated person of a registered investment company
(such as the Fund), or any affiliated person of such person, to
receive a brokerage commission from such registered investment
company provided that such commission is reasonable and fair
compared to the commissions received by other brokers in
connection with comparable transactions involving similar
securities during a comparable period of time.

During the fiscal year ended July 31, 1994, brokerage
commissions paid by the Fund on the purchase and sale of
portfolio securities were $294,990 for transactions totalling
$408,687,665. Of this amount, none was paid to brokers utilizing
the services of the Pershing Division of Donaldson, Lufkin &
Jenrette Securities Corporation, an affiliated broker-dealer.
Additionally, approximately 100% of this amount went to brokers
who rendered research services to the Fund. During the fiscal
year ended September 30, 1993, brokerage commissions paid by the
Fund on the purchase and sale of the portfolio securities were
$192,704 for transactions totalling $622,234,712. Of this
amount, none was paid to brokers utilizing the services of the
Pershing Division of Donaldson, Lufkin & Jenrette Securities
Corporation. Additionally, approximately 100% of this amount
went to brokers who rendered research services to the Fund.
During the fiscal year ended September 30, 1992, brokerage
commissions paid by the Fund on the purchase and sale of the
portfolio securities were $269,840 for transactions totalling
$599,450,954. Of this amount, none was paid to brokers utilizing
the services of the Pershing Division of Donaldson, Lufkin &
Jenrette Securities Corporation. Additionally, approximately 0%
of this amount went to brokers who rendered research services to
the Fund.

The annual portfolio turnover rates of securities of the Fund
for the fiscal years ended September 30, 1993 and July 31, 1994
were 188% and 116%, respectively.

<PAGE>

____________________________________________________________

GENERAL INFORMATION
____________________________________________________________

Capitalization

The Fund's capital stock of the Fund currently consists of
60,000,000 shares of Class A Common Stock, 60,000,000 shares of
Class B Common Stock and 60,000,000 shares of Class C Common
Stock each having a par value $.01 per share. All shares of the
Fund, when issued, are fully paid and non-assessable. The
Directors are authorized to reclassify and issue any unissued
shares to any number of additional series without shareholder
approval. Accordingly, the Directors in the future, for reasons
such as the desire to establish one or more additional portfolios
with different investment objectives, policies or restrictions,
may create additional classes or series of shares. Any issuance
of shares of another class or series would be governed by the
1940 Act and the law of the State of Maryland. If shares of
another series were issued in connection with the creation of a
second portfolio, each share of either portfolio would normally
be entitled to one vote for all purposes. Generally, shares of
both portfolios would vote as a single series on matters, such as
the election of Directors, that affected both portfolios in
substantially the same manner. As to matters affecting each
portfolio differently, such as approval of the Advisory Agreement
and changes in investment policy, shares of each portfolio would
vote as a separate series.

Procedures for calling a shareholders' meeting for the
removal of Directors of the Fund, similar to those set forth in
Section 16(c) of the 1940 Act will be available to shareholders
of the Fund. The rights of the holders of shares of a series may
not be modified except by the vote of a majority of the
outstanding shares of such series. An order has been received
from the Securities and Exchange Commission permitting the
issuance and sale of three classes of shares representing
interests in the Fund. The issuance and sale of any additional
classes will require an additional order from the Securities and
Exchange Commission. There is no assurance that such exemptive
relief would be granted.

At [ ], 1995 there was [ ] shares of common
stock of the Fund outstanding including [ ] Class A
shares, [ ] Class B shares and [ ] Class C
shares. Set forth below is certain information as to all persons
who owned of record or beneficially 5% or more of either class of
the Fund's outstanding shares at [ ], 1995.

<PAGE>

No. of % of
Name and Address Shares Class
________________ ______ _____

Natwest Bancorp Savings 2,415,791 21.4- Class A
Attn: Jane Buonocore
60 Hempstead Ave
West Hempstead, NY 11552

Merrill Lynch 103,051 10.0- Class B
4800 Deer Lake Drive East
Jacksonville, FL 32246

102,671 28.6- Class C

Jean M. Lewis & Al Edwards 23,685 6.6- Class C
FBO The Aloette Cosmetics Inc.
401(k) Plan
1301 Wright's Lane East
West Chester, PA 19380

Custodian

State Street Bank and Trust Company, 225 Franklin Street,
Boston, Massachusetts 02110, acts as custodian for the securities
and cash of the Fund but plays no part in deciding the purchase
or sale of portfolio securities.

Principal Underwriter

Alliance Fund Distributors, Inc., 1345 Avenue of the
Americas, New York, New York 10105, serves as the Fund's
Principal Underwriter and as such may solicit orders from the
public to purchase shares of the Fund. Alliance Fund
Distributors, Inc. is not obligated to sell any specific amount
of shares and will purchase shares for resale only against orders
for shares. Under the Agreement between the Fund and the
Principal Underwriter, the Fund has agreed to indemnify the
Principal Underwriter, in the absence of its willful misfeasance,
bad faith, gross negligence or reckless disregard of its
obligations thereunder, against certain civil liabilities,
including liabilities under the Securities Act of 1933, as
amended.

Counsel

Legal matters in connection with the issuance of the common
stock offered hereby are passed upon by Messrs. Seward & Kissel,
One Battery Park Plaza, New York, New York 10004. Seward &

<PAGE>

Kissel has relied upon the opinion of Venable, Baetjer & Howard,
1800 Mercantile Bank & Trust Building, 2 Hopkins Plaza,
Baltimore, Maryland 21201, for matters relating to Maryland law.

Independent Accountants

Price Waterhouse LLP, 1177 Avenue of the Americas, New
York, New York 10036, has been appointed as independent
accountants for the Fund and has registered as a Registered
Limited Liability Partnership under the laws of the State of
Delaware. All references to Price Waterhouse in the Prospectus
and Statement of Additional Information are to Price Waterhouse
LLP.

Total Return Quotations

From time to time the Fund advertises its "total return."
Computed separately for each class the Fund's "total return" is
its average annual compounded total return for recent one, five
and ten year periods (or the period since the Fund's inception).
The Fund's total return for such a period is computed, through
the use of a formula prescribed by the Securities and Exchange
Commission, by finding the average annual compounded rate of
return over the period that would equate an assumed initial
amount invested to the value of such investment at the end of the
period. For purposes of computing total return, income dividends
and capital gains distributions paid on shares of the Fund are
assumed to have been reinvested when received and the maximum
sales charge applicable to purchases of Fund shares is assumed to
have been paid. The Fund will include performance data for
Class A, Class B and Class C shares in any advertisement or
information including performance data of the Fund.

The Fund's average annual compounded total return for Class A
shares for the year ended January 31, 1995 was <9.83%>; for the
five year period ended January 31, 1995 was 6.42%; and for the
ten year period ended January 31, 1995 was 9.92%. The Fund's
average annual compounded total return for Class B shares for the
year ended January 31, 1995 was <10.21%>; and for the period from
February 4, 1991 (commencement of distribution) through January
31, 1995 was 5.58%. The Fund's average annual compounded total
return for Class C shares for the year ended January 31, 1995 was
<6.56%>; and for the period from May 3, 1993 (commencement of
distribution) through January 31, 1995 was .94%.

The Fund's total return is not fixed and will fluctuate in
response to prevailing market conditions or as a function of the
type and quality of the securities in the Fund's portfolio and
the Fund's expenses. Total return information is useful in

<PAGE>

reviewing the Fund's performance but such information may not
provide a basis for comparison with bank deposits or other
investments which pay a fixed return for a stated period of time.
An investor's principal invested in the Fund is not fixed and
will fluctuate in response to prevailing market conditions.

Advertisements quoting performance ratings of the Fund as
measured by financial publications or by independent
organizations such as Lipper Analytical Services, Inc. and
advertisements presenting the historical record of payments of
income dividends by the Fund may also from time to time be sent
to investors or placed in newspapers and magazines such as The
New York Times, The Wall Street Journal, Barrons, Investor's
Daily, Money Magazine, Changing Times, Business Week and Forbes
or other media on behalf of the Fund.

Additional Information

Any shareholder inquiries may be directed to the
shareholder's broker or to Alliance Fund Services, Inc. at the
address or telephone numbers shown on the front cover of this
Statement of Additional Information. This Statement of
Additional Information does not contain all the information set
forth in the Registration Statement filed by the Fund with the
Securities and Exchange Commission under the Securities Act of
1933, as amended. Copies of the Registration Statement may be
obtained at a reasonable charge from the Securities and Exchange
Commission or may be examined, without charge, at the offices of
the Securities and Exchange Commission in Washington, D.C.

51
00250157.AS5

<PAGE>

PORTFOLIO OF INVESTMENTS
JANUARY 31, 1995 (UNAUDITED) ALLIANCE BALANCED SHARES

COMPANY SHARES VALUE

COMMON STOCKS-56.0%
CONSUMER PRODUCTS
& SERVICES-24.5%
AIRLINES-0.3%
Southwest Airlines Co. 25,000 $ 484,375
AUTO & RELATED-2.3%
Chrysler Corp. 35,000 1,575,000
General Motors Corp. 40,000 1,550,000
PACCAR, Inc. 15,000 641,250
3,766,250
BROADCASTING &
CABLE-0.9%
Comcast Corp.
Cl.A (SPL) 100,000 1,487,500
COSMETICS-1.1%
Gillette Co. 25,000 1,921,875
DRUGS, HOSPITAL
SUPPLIES & MEDICAL
Services-7.8%
AB Astra 30,000 759,942
Abbott Laboratories 70,000 2,476,250
Columbia HCA
Healthcare Corp. 35,000 1,404,375
Merck & Co., Inc. 100,000 4,025,000
Pfizer, Inc. (b) 15,000 1,226,250
United HealthCare Corp. 50,000 2,425,000
US Healthcare, Inc 10,000 456,250
12,773,067

ENTERTAINMENT &
LEISURE TIME-1.5%
Walt Disney Co. 50,000 2,543,750
FOOD & BEVERAGES-2.9%
Coca-Cola Co. 25,000 1,312,500
McDonald's Corp. 80,000 2,610,000
PepsiCo, Inc. 22,000 811,250
4,733,750

HOUSEHOLD PRODUCTS-0.6%
Colgate-Palmolive Co. 15,000 $ 943,125
PRINTING &
PUBLISHING-0.6%
Gannett Co., Inc. 20,000 1,017,500
RETAILING-4.3%
May Department Stores Co. 80,000 2,810,000
Toys 'R' Us, Inc.* 50,000 1,462,500
Wal-Mart Stores,Inc 120,000 2,760,000
7,032,500

TOBACCO-2.2%
Philip Morris Cos., Inc. 60,000 3,577,500
40,281,192
FINANCIAL SERVICES-8.8%
BANKING & CREDIT-3.6%
BankAmerica Corp. 50,000 2,156,250
Federal National Mortgage
Association 25,000 1,787,500
MBNA Corp. 40,000 1,020,000
NationsBank Corp. 20,000 930,000
5,893,750
BROKERAGE-0.5%
Morgan Stanley Group, Inc. 15,000 901,875
INSURANCE-4.7%
American International
Group, Inc. 25,000 2,603,125
General Re Corp. 10,000 1,291,250
NAC Re Corp. 40,000 1,310,000
Travelers, Inc 70,000 2,581,250
7,785,625
14,581,250

BASIC INDUSTRIES-7.0%
CHEMICALS-2.8%
Morton International, Inc.* 70,000 1,960,000
Rohm & Haas Co 50,000 2,712,500
4,672,500
5<PAGE>
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE BALANCED SHARES
COMPANY SHARES VALUE

SHARES OR
PRINCIPAL
AMOUNT
COMPANY (000) VALUE

ELECTRICAL EQUIPMENT-1.9%
General Electric Co. 60,000 $ 3,090,000
MACHINERY-0.7%
Coltec Industries, Inc.* 70,000 1,085,000
OTHER-1.6%
AlliedSignal, Inc. 75,000 2,681,250
11,528,750

SCIENCE & TECHNOLOGY-5.7%
COMMUNICATION
EQUIPMENT-0.6%
General Instrument Corp.* 40,000 1,090,000
COMPUTER HARDWARE-0.6%
Hewlett-Packard Co. 10,000 1,005,000
COMPUTER SOFTWARE-1.6%
General Motors Corp. Cl.E 50,000 1,931,250
Informix Corp.* 20,000 642,500
2,573,750
SEMI-CONDUCTORS &
RELATED-2.9%
Intel Corp. 30,000 2,077,500
Motorola, Inc. (b) 45,000 2,660,625
4,738,125
9,406,875

ENERGY-3.7%
DOMESTIC
PRODUCERS-0.5%
Snyder Oil Corp. 62,500 859,375
INTERNATIONAL
PRODUCERS-2.0%
Chevron Corp. 75,000 3,346,875
OIL & GAS
SERVICES-1.2%
Enron Corp. 50,000 1,456,250
Renaissance Energy, Ltd.* 30,000 529,518
1,985,768
6,192,018

PUBLIC UTILITIES-2.2%
TELEPHONE-2.2%
MCI Communications
Corp. 75,000 $ 1,373,438
Sprint Corp. 80,000 2,280,000
3,653,438

TRANSPORTATION-1.3%
RAILROAD-1.3%
Conrail, Inc. 40,000 2,140,000
OTHER-2.8%
France Growth
Fund, Inc. 130,000 1,202,500
G.T. Greater Europe Fund 130,000 1,592,500
Mexico Fund, Inc. 50,000 975,000
Scudder New Asia
Fund, Inc.* 50,000 837,500
4,607,500
Total Common Stocks
(cost $88,840,939) 92,391,023

CORPORATE BONDS-12.1%
FINANCIAL-3.0%
Goldman Sachs
Group, L.P.
6.375%, 2/23/98(a) $1,200 1,188,000
Lehman Brothers
Index Notes,
Floating Rate
8.00%, 2/10/96 3,800 3,800,000
4,988,000
INDUSTRIAL-5.0%
Paramount Communications, Inc.
8.25%, 8/01/22 3,250 2,748,623
Stone Container Corp.
9.875%, 2/01/01 3,000 2,812,500
Time Warner Entertainment
8.375%, 3/15/23 3,250 2,724,898
8,286,021
6<PAGE>
ALLIANCE BALANCED SHARES
PRINCIPAL
AMOUNT
COMPANY (000) VALUE
PUBLIC UTILITIES-4.1%
Abbey National, Plc.
6.375%, 3/10/99 $3,000 $ 2,983,500
Province of Ontario
5.812%, 8/17/99 3,700 3,683,720
6,667,220
Total Corporate Bonds
(cost $20,044,674) 19,941,241

MORTGAGE RELATED
SECURITIES-12.3%
Government National
Mortgage Association
7.00%, 6/15/23-6/15/24 15,819 14,439,230
7.50%, 10/15/23 - 12/15/23 6,182 5,834,262

Total Mortgage Related
Securities
(cost $20,978,136) 20,273,492

U.S. GOVERNMENT
OBLIGATIONS-11.3%
U.S. Treasury Bond
8.125%, 8/15/19 2,800 2,895,816
U.S. Treasury Notes
4.25%, 1/31/95 3,000 3,000,000
6.75%, 5/31/99 1,100 1,068,034
7.125%, 9/30/99 8,000 7,870,000
7.875%, 4/15/98 1,000 1,011,870
U.S. Treasury Strips
Zero coupon,
2/15/13 - 2/15/15 12,500 2,689,300

Total U.S. Government
Obligations
(cost $19,063,836) 18,535,020

CONTRACTS(c) OR
PRINCIPAL
AMOUNT
COMPANY (000) VALUE
COMMERCIAL PAPER-12.8%
Ford Motor Credit Co.
5.60%, 2/01/95 $6,880 $ 6,880,000
Merrill Lynch & Co.
5.85%, 2/01/95 8,000 8,000,000
Prudential Funding Corp.
5.75%, 2/02/95 6,281 6,279,997

Total Commercial Paper
(amortized cost $21,159,997) 21,159,997

TOTAL INVESTMENTS-104.5%
(cost $170,087,582) 172,300,773

OUTSTANDING CALL OPTIONS
WRITTEN-(0.0%)
Motorola, Inc.
expiring February '95
@ $55 50 (22,500)
Pfizer, Inc.
expiring February '95
@ $80 70 (11,813)
Total Outstanding Call Options Written
(Premiums received $31,827) (34,313)

TOTAL INVESTMENTS NET
OF OUTSTANDING CALL
OPTIONS WRITTEN-104.5% 172,266,460
Other assets less
liabilities-(4.5%) (7,386,432)

NET ASSETS-100% $164,880,028

* Non-income producing.
(a) Security exempt from Registration under Rule 144A of the Securities Act of
1933. This security may be resold in transactions exempt from registration,
normally to certain qualified buyers. At January 31, 1995 the aggregate market
value of this security amounted to $1,188,00 representing 0.7% of net assets.
(b) Security on which options are written (shares subject to call have an
aggregate market value of $3,886,875).
(c) One contract relates to 100 shares.
See notes to financial statements.

7<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
JANUARY 31, 1995 (UNAUDITED) ALLIANCE BALANCED SHARES

ASSETS
Investments in securities, at value (cost $170,087,582) $172,300,773
Cash 584,066
Dividends and interest receivable 1,065,509
Receivable for capital stock sold 76,639
Prepaid expenses and other assets 12,307
Total assets 174,039,294

LIABILITIES
Outstanding options written, at value (premiums received $31,827) 34,313
Payable for investment securities purchased 8,770,315
Payable for capital stock redeemed 94,636
Advisory fee payable 86,288
Distribution fee payable 44,652
Accrued expenses and other liabilities 129,062
Total liabilities 9,159,266

NET ASSETS $164,880,028

COMPOSITION OF NET ASSETS
Capital stock, at par $125,446
Additional paid-in capital 162,927,978
Undistributed net investment income 647,111
Accumulated net realized loss (1,031,212)
Net unrealized appreciation of investments and options 2,210,705
$164,880,028

CALCULATION OF MAXIMUM OFFERING PRICE
Class A Shares
Net asset value and redemption price per share ($146,839,785/11,157,284 shares
of capital stock issued and outstanding) $13.16
Sales charge-4.25% of public offering price 0.58
Maximum offering price $13.74

Class B Shares
Net asset value and offering price per share ($13,350,460/1,026,794 shares
of capital stock issued and outstanding) $13.00

Class C Shares
Net asset value, redemption and offering price per share
($4,689,783/360,566 shares of capital stock issued and outstanding) $13.01
See notes to financial statements.

8<PAGE>

STATEMENT OF OPERATIONS
SIX MONTHS ENDED JANUARY 31, 1995 (UNAUDITED) ALLIANCE BALANCED SHARES

INVESTMENT INCOME
Interest $2,740,657
Dividends 1,166,666 $ 3,907,323
EXPENSES
Advisory fee 528,991
Distribution fee-Class A 180,492
Distribution fee-Class B 68,311
Distribution fee-Class C 26,019
Transfer agency 138,308
Administrative 79,364
Registration 35,216
Custodian 25,304
Audit and legal 18,644
Printing 15,752
Directors' fees 10,980
Taxes 4,170
Miscellaneous 9,552
Total expenses 1,141,103
Net investment income 2,766,220
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized loss on security transactions (575,513)
Net realized gain on options transactions 113,966
Net change in unrealized appreciation of:
Securities (2,337,324)
Options (2,486)
Net loss on investments (2,801,357)
NET DECREASE IN NET ASSETS FROM OPERATIONS $ (35,137)

STATEMENT OF CHANGES IN NET ASSETS
SIX MONTHS ENDED OCTOBER 1, 1993
JANUARY 31,1995 THROUGH
(UNAUDITED) JULY 31, 1994
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS
Net investment income $ 2,766,220 $ 3,727,437
Net realized gain (loss) on investments (461,547) 1,521,330
Net change in unrealized appreciation of investments (2,339,810) (11,401,870)
Net decrease in net assets from operations (35,137) (6,153,103)
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM
Net investment income
Class A (2,287,057) (3,328,864)
Class B (166,027) (209,253)
Class C (62,691) (94,432)
Net realized gain on investments
Class A (264,823) (3,450,935)
Class B (24,748) (236,079)
Class C (8,499) (106,940)
CAPITAL STOCK TRANSACTIONS
Net increase (decrease) (10,510,111) 5,057,935
Total decrease (13,359,093) (8,521,671)
NET ASSETS
Beginning of period 178,239,121 186,760,792
End of period (including undistributed net investment income
of $647,111 and $396,666, respectively) $164,880,028 $178,239,121

Statement Of Changes In Net Assets

*The Fund changed its fiscal year end from September 30 to July 31.
See notes to financial statements.
9<PAGE>

NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 1995 (UNAUDITED) ALLIANCE BALANCED SHARES

NOTE A: SIGNIFICANT ACCOUNTING POLICIES
Alliance Balanced Shares, Inc. (the "Fund") is registered under the Investment
Company Act of 1940, as a diversified, open end management investment company.
The Fund offers Class A, Class B and Class C shares. Class A shares are sold
with a front end sales charge of up to 4.25%. Class B shares are sold with a
contingent deferred sales charge which declines from 4% to zero depending on
the period of time the shares are held. Class B shares will automatically
convert to Class A shares eight years after the end of the calendar month of
purchase. Class C shares are sold without an initial or contingent deferred
sales charge. All three classes of shares have identical voting, dividend,
liquidation and other rights, except that each class bears different
distribution expenses and has exclusive voting rights with respect to its
distribution plan. The following is a summary of significant accounting
policies followed by the Fund.

1. SECURITY VALUATION
Portfolio securities traded on national securities exchanges are valued at the
last sales price or, if no sale occurred, at the mean of the bid and asked
price at the regular close of the New York Stock Exchange. Securities traded
on the over the counter market are valued at the mean of the closing bid and
asked price. Securities for which current market quotations are not readily
available (including investments which are subject to limitations as to their
sale) are valued at their fair value as determined in good faith by the Board
of Directors. The Board of Directors has further determined that the value of
certain portfolio debt securities, other than temporary investments in short
term securities, be determined by reference to valuations obtained from a
pricing service. Securities which mature in 60 days or less are valued at
amortized cost, which approximates market value. The ability of issuers of
debt securities held by the Fund to meet their obligations may be affected by
economic developments in a specific industry or region.

2. OPTIONS TRANSACTIONS
For hedging purposes, the Fund purchases and writes (sells) put and call
options on U.S. securities that are traded on U.S. securities exchanges and
over-the-counter markets.
The risk associated with purchasing an option is that the Fund pays a premium
whether or not the option is exercised. Additionally, the Fund bears the risk
of loss of premium and change in market value should the counterparty not
perform under the contract. Put and call options purchased are accounted for in
the same manner as portfolio securities. The cost of securities acquired
through the exercise of call options is increased by premiums paid. The
proceeds from securities sold through the exercise of put options are decreased
by the premiums paid.
When the Fund writes an option, the premium received by the Fund is recorded as
a liability and is subsequently adjusted to the current market value of the
option written. Premiums received from writing options which expire unexercised
are recorded by the Fund on the expiration date as realized gains from option
transactions. The difference between the premium and the amount paid on
effecting a closing purchase transaction, including brokerage commissions, is
also treated as a realized gain, or if the premium is less than the amount paid
for the closing purchase transaction, as a realized loss. If a call option is
exercised, the premium is added to the proceeds from the sale of the underlying
security or currency in determining whether the Fund has realized a gain or
loss. If a put option is exercised, the premium reduces the cost basis of the
security or currency purchased by the Fund. In writing an option, the Fund
bears the market risk of an unfavorable change in the price of the security or
currency underlying the written option. Exercise of an option written by the
Fund could result in the Fund selling or buying a security or currency at a
price different from the current market value.
Transactions in options written for the six months ended January 31, 1995 were
as follows:
NUMBER OF
CONTRACTS PREMIUMS
Options outstanding at
beginning of period -0- $ -0-
Options written 670 114,812
Options terminated in closing
purchase transactions -0- -0-
Options expired (550) (82,985)
Options exercised -0- -0-
Options outstanding at
end of period 120 $ 31,827
10<PAGE>

ALLIANCE BALANCED SHARES
3. TAXES
It is the Fund's policy to meet the requirements of the Internal Revenue Code
applicable to regulated investment companies and to distribute all of its
investment company taxable income and net realized gains, if any, to
shareholders. Therefore, no provisions for federal income or excise taxes are
required.

4. INVESTMENT INCOME AND SECURITY TRANSACTIONS
Dividend income is recorded on the ex dividend date. Interest income is
accrued daily. Security transactions are accounted for on the date securities
are purchased or sold. Security gains and losses are determined on the
identified cost basis. The Fund accretes discounts as adjustments to interest
income.

5. DIVIDENDS AND DISTRIBUTIONS
Dividends and distributions to shareholders are recorded on the ex dividend
date. Income dividends and capital gain distributions are determined in
accordance with income tax regulations, which may differ from generally
accepted accounting principles.

6. CHANGE OF YEAR END
The Fund changed its fiscal year end from September 30, to July 31.
Accordingly, the statements of changes in net assets and per share data and
ratios reflect the period from October 1, 1993 to July 31, 1994.

7. CHANGES IN ACCOUNTING FOR DISTRIBUTION TO
SHAREHOLDERS
Effective July 31, 1994 the Fund adopted Statement of Position 93-2:
Determination, Disclosure and Financial Statement Presentation of Income,
Capital Gain and Return of Capital Distributions by Investment Companies. As a
result, the Fund changed the classification of distributions to shareholders to
better disclose the differences between financial statement amounts and
distributions determined in accordance with income tax regulations.

NOTE B: FEE AND OTHER TRANSACTIONS WITH
AFFILIATES ADVISORY
Under the terms of an investment advisory agreement, the Fund pays its Adviser,
Alliance Capital Management L.P., an advisory fee at an annual rate of .625% of
the first $200 million, .50% of the next $200 million and .45% of the excess
over $400 million of the average daily net assets of the Fund. Such fee is
accrued daily and paid monthly. The Adviser has agreed, under the terms of the
investment advisory agreement, to reimburse the Fund to the extent that its
aggregate expenses (exclusive of interest, taxes, brokerage, distribution fees
and extraordinary expenses) exceed the limits prescribed by any state in which
the Fund's shares are qualified for sale. The Adviser believes that the most
restrictive expense ratio limitation imposed by any state is 2.5% of the first
$30 million of its average daily net assets, 2% of the next $70 million of its
average daily net assets and 1.5% of its average daily net assets in excess of
$100 million. No reimbursement was required for the six months ended January
31, 1995.
Pursuant to the Advisory Agreement, the Fund reimburses the Adviser for the
cost of certain legal and accounting services provided to the Fund by the
Adviser. For the six months ended January 31, 1995, such reimbursement
amounted to $79,364.
The Fund compensates Alliance Fund Services, Inc. (a wholly-owned subsidiary of
the Adviser) in accordance with a Services Agreement for providing personnel
and facilities to perform transfer agency services for the Fund. Such
compensation amounted to $106,416 for the six months ended January 31, 1995.
Alliance Fund Distributors, Inc. (a wholly owned subsidiary of the Adviser)
serves as the Distributor of the Fund's shares. The Distributor received front
end sales charges of $2,044 from the sale of Class A shares and $39,271 in
contingent deferred sales charges imposed upon redemptions by shareholders of
Class B shares for the six months ended January 31, 1995.
Brokerage commissions paid on securities transactions for the six months ended
January 31, 1995 amounted to $126,752, none of which was paid to brokers
utilizing the services of the Pershing Division of Donaldson, Lufkin & Jenrette
Securities Corp. ("DLJ"), an affiliate of the Adviser, nor to DLJ directly.
11<PAGE>

NOTES TO FINANCIAL STATEMENTS (CONTINUED) ALLIANCE BALANCED SHARES

NOTE C: DISTRIBUTION SERVICES AGREEMENT
The Fund has adopted a Distribution Services Agreement (the "Agreement")
pursuant to Rule 12b 1 under the Investment Company Act of 1940. Under the
Agreement, the Fund pays a distribution fee to the Distributor at an annual
rate of up to .30% of the Fund's average daily net assets attributable to
the Class A shares and 1% of the average daily net assets attributable to
both Class B shares and Class C shares. The Agreement provides that the
Distributor will use such payments in their entirety for distribution
assistance and promotional activities. The Distributor has incurred expenses
in excess of the distribution costs reimbursed by the Fund in the amount of
$881,684 and $222,541, for Class B and C shares, respectively; such costs may
be recovered from the Fund in future periods. In accordance with the
Agreement, there is no provision for recovery of unreimbursed distribution
costs incurred by the Distributor, beyond the current fiscal year for Class A
shares. The Agreement also provides that the Adviser may use its own resources
to finance the distribution of the Fund's shares.

NOTE D: Investment Transactions
Purchases and sales of investment securities (excluding short term investments)
aggregated $97,143,537 and $99,073,267, respectively, for the six months ended
January 31, 1995. There were purchases of $34,678,537 and sales of $26,647,248
of U.S. Government and government agency obligations for the six months ended
January 31, 1995. At January 31, 1995, the cost of securities for federal
income tax purposes was $170,123,301. Accordingly gross unrealized appreciation
of investments was $9,029,055 and gross unrealized depreciation of investments
was $6,851,583 resulting in net unrealized appreciation of $2,177,472.

NOTE E: Capital Stock
There are 180,000,000 shares of $.01 par value capital stock authorized,
divided into three classes, designated Class A, Class B and Class C shares.
Each class consists of 60,000,000 authorized shares. Prior to February 23,
1993 there were 60,000,000 shares of $1.00 par value capital stock authorized,
divided into two classes designated Class A and Class B shares. Transactions
in capital stock were as follows:
12<PAGE>

ALLIANCE BALANCED SHARES
SHARES AMOUNT
------------------------- -------------------------
SIX MONTHS OCT. 1,1993 SIX MONTHS OCT. 1,1993
ENDED ENDED
JAN. 31,1995 THROUGH JANUARY 31,1995 THROUGH
(UNAUDITED) JULY 31,1994* (UNAUDITED) JULY 31,1994*
Class A
Shares sold 435,940 876,506 $5,719,460 $12,195,964
Shares issued in reinvestment
of dividends 159,735 407,717 2,071,908 5,628,682
Shares redeemed (1,216,453) (1,481,275) (16,078,113) (20,511,243)
Net decrease (620,778) (197,052) $(8,286,745) $(2,686,597)
Class B
Shares sold 125,459 564,263 $ 1,635,777 $ 7,799,514
Shares issued in reinvestment
of dividends 12,428 27,387 159,326 374,239
Shares redeemed (195,416) (403,295) (2,549,580) (5,657,858)
Net increase (decrease) (57,529) 188,355 $ (754,477) $ 2,515,895
Class C
Shares sold 58,107 481,248 $ 758,476 $ 6,765,099
Shares issued in reinvestment
of dividends 3,870 11,554 49,713 157,982
Shares redeemed (173,946) (124,424) (2,277,078) (1,694,444)
Net increase (decrease) (111,969) 368,378 $(1,468,889) $5,228,637

NOTE F: Taxes
Pursuant to Federal income tax regulations, net capital loss of approximately
$5,813,000 realized by the Alliance Balanced Shares, between November 1, 1993
and July 31, 1994 have been deferred to fiscal year 1995. This capital loss is
available in fiscal 1995 to offset capital gains and reduce amounts
distributable to shareholders.
* The Fund changed its fiscal year end from September 30 to July 31.
13<PAGE>

FINANCIAL HIGHLIGHTS ALLIANCE BALANCED SHARES
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
CLASS A
-------------------------------------------------------
SIX MONTHS
ENDED OCT.1,93 YEAR ENDED SEPTEMBER 30,
JAN.31,95 THROUGH ----------------------------------
(UNAUDITED) JULY.31,94* 1993 1992 1991 1990
Net asset value, beginning
of period $13.38 $14.40 $13.20 $12.64 $10.41 $14.13
Income From Investment Operations
Net investment income .23 .29 .34 .44 .46 .45
Net realized and unrealized gain
(loss) on investments (.23) (.74) 1.29 .57 2.17 (2.14)
Net increase (decrease) in net asset
value from operations -0- (.45) 1.63 1.01 2.63 (1.69)
Less: Distributions
Dividends from net
investment income (.20) (.28) (.43) (.45) (.40) (.40)
Distributions from net
realized gains (.02) (.29) -0- -0- -0- (1.63)
Total dividends and
distributions (.22) (.57) (.43) (.45) (.40) (2.03)
Net asset value,
end of period $13.16 $13.38 $14.40 $13.20 $12.64 $10.41
Total Return
Total investment return based on net
asset value (b) .09% (3.21)% 12.52% 8.14% 25.52% (13.12)%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) $146,840 $157,637 $172,484 $143,883 $154,230 $140,913
Ratio of expenses to average
net assets 1.26%(c) 1.27%(c) 1.35% 1.40% 1.44% 1.36%
Ratio of net investment income to
average net assets 3.36%(c) 2.50%(c) 2.50% 3.26% 3.75% 4.01%
Portfolio turnover rate 61% 116% 188% 204% 70% 169%

See footnote summary on page 16.
14<PAGE>

ALLIANCE BALANCED SHARES
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
CLASS B
---------------------------------------------
SIX MONTHS OCT.1,93
ENDED THROUGH YEAR ENDED SEPTEMBER 30,
JAN.31,95 JULY 31,--------------------------
(UNAUDITED) 1994* 1993 1992 1991(A)
Net asset value, beginning of period $13.23 $14.27 $13.13 $12.61 $11.84
INCOME FROM INVESTMENT OPERATIONS
Net investment income .16 .22 .29 .37 .25
Net realized and unrealized gain (loss) on
investments (.21) (.75) 1.22 .54 .80
Net increase (decrease) in net asset value
from operations (.05) (.53) 1.51 .91 1.05

LESS: DISTRIBUTIONS
Dividends from net investment income (.16) (.22) (.37) (.39) (.28)
Distribution from net realized gains (.02) (.29) -0- -0- -0-
Total dividends and distributions (.18) (.51) (.37) (.39) (.28)
Net asset value, end of period $13.00 $13.23 $14.27 $13.13 $12.61

TOTAL RETURN
Total investment return based on
net asset value (b) (.32)% (3.80)% 11.65% 7.32% 8.96%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $13,350 $14,347 $12,789 $6,499 $1,830
Ratio of expenses to average
net assets 2.04%(c) 2.05%(c) 2.13% 2.16% 2.13%(c)
Ratio of net investment income
to average net assets 2.58%(c) 1.73%(c) 1.72% 2.46% 3.19%(c)
Portfolio turnover rate 61% 116% 188% 204% 70%
See footnote summary on page 16.
15<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED) ALLIANCE BALANCED SHARES
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
CLASS C
----------------------------------------
SIX MONTHS ENDED OCT.1,93 AUG.2,93(D)
JAN. 31,95 TO TO APR.30,
(UNAUDITED) JULY 31,94* 1994
Net asset value, beginning of period $13.24 $14.28 $13.63
INCOME FROM INVESTMENT OPERATIONS
Net investment income .16 .24 .11
Net realized and unrealized gain (loss) on
investments (.21) (.77) .71
Net increase (decrease) in net asset value
from operations (.05) (.53) .82

LESS: DISTRIBUTIONS
Dividends from net investment income (.16) (.22) (.17)
Distributions from net realized gains (.02) (.29) -0-
Total dividends and distributions (.18) (.51) (.17)
Net asset value, end of period $13.01 $13.24 $14.28

TOTAL RETURN
Total investment return based
on net asset value (b) (.32)% (3.80)% 6.01%

RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $4,690 $6,254 $1,487
Ratios of expenses to average net assets 2.03%(c) 2.03%(c) 2.29%(c)
Ratios of net investment income
to average net assets 2.56%(c) 1.81%(c) 1.47%(c)
Portfolio turnover rate 61% .116% .188%
* The Fund changed its fiscal year end from September 30 to July 31.
(a) For the period February 4, 1991 (commencement of distribution) to September
30, 1991.
(b) Total investment return is calculated assuming an initial investment made
at the net asset value at the beginning of the period, reinvestment of all
dividends and distributions at net asset value during the period, and
redemption on the last day of the period. Initial sales charges or contingent
deferred sales charges are not reflected in the calculation of total investment
return. Total investment return calculated for a period of less than one year
is not annualized.
(c) Annualized.
(d) Commencement of distribution.
16<PAGE>

<PAGE>

PORTFOLIO OF INVESTMENTS
July 31, 1994 Alliance Balanced Shares

Company Shares Value

COMMON & PREFERRED
STOCKS--47.5%
CONSUMER PRODUCTS
& SERVICES--19.4%
AIRLINES--0.8%
Southwest Airlines Co.. 50,000 $ 1,356,250
-----------
AUTO & RELATED--2.5%
Chrysler Corp.......... 50,000 2,406,250
General Motors Corp.... 40,000 2,055,000
-----------
4,461,250
-----------
BROADCASTING &
CABLE--0.8%
Comcast Corp.
Cl.A (SPL)......... 90,000 1,496,250
-----------
BUILDING &
RELATED--0.4%
Shaw Industries, Inc... 40,000 615,000
-----------
COSMETICS--1.0%
Gillette Co............ 25,000 1,737,500
-----------
DRUGS, HOSPITAL
SUPPLIES & MEDICAL
SERVICES--4.6%
Abbott Laboratories.... 90,000 2,531,250
Columbia HCA
Healthcare Corp.... 30,000 1,215,000
Healthsource, Inc.*.... 20,000 565,000
Merck & Co., Inc....... 70,000 2,073,750
Pfizer, Inc............ 10,000 620,000
United HealthCare Corp. 25,000 1,137,500
-----------
8,142,500
-----------
ENTERTAINMENT &
LEISURE TIME--2.8%
Eastman Kodak Co....... 30,000 1,451,250
Time Warner, Inc....... 40,000 1,485,000
Walt Disney Co......... 50,000 2,125,000
-----------
5,061,250
-----------

FOOD & BEVERAGES--1.8%
Coca-Cola Co........... 20,000 $ 887,500
McDonald's Corp........ 60,000 1,627,500
Wendy's International, Inc. 50,000 768,750
-----------
3,283,750
-----------
HOUSEHOLD PRODUCTS--0.7%
Colgate-Palmolive Co... 25,000 1,334,375
RETAILING-3.1%
AutoZone, Inc.*........ 40,000 960,000
Dillard Department Stores,
Inc. Cl.A.......... 60,000 2,010,000
Toys 'R' Us, Inc.*..... 30,000 1,031,250
Wal-Mart Stores, Inc... 60,000 1,500,000
-----------
5,501,250
-----------
TOBACCO--0.9%
Philip Morris Cos., Inc. 30,000 1,650,000
-----------
34,639,375
-----------
FINANCIAL SERVICES--9.5%
BANKING & CREDIT--2.7%
BankAmerica Corp....... 15,000 723,750
Federal National Mortgage
Association........ 10,000 867,500
NationsBank Corp....... 25,000 1,393,750
Santander Financial,
Inc. pfd. callable
at 7.375%, 12/31/98 90,000 1,811,250
-----------
4,796,250
-----------
BROKERAGE--0.9%
Morgan Stanley Group, Inc. 25,000 1,515,625
-----------
INSURANCE--4.5%
American International
Group, Inc......... 40,000 3,770,000
General Re Corp........ 12,000 1,387,500
NAC Re Corp............ 20,000 560,000
Travelers, Inc......... 70,000 2,318,750
-----------
8,036,250
-----------
<PAGE>
OTHER--1.4%
MGIC Investment Corp... 70,000 $ 1,968,750
Student Loan
Marketing Assn..... 20,200 704,475
-----------
2,673,225
-----------
17,021,350
-----------
BASIC INDUSTRIES--5.8%
CHEMICALS--1.6%
Morton International, Inc.* 18,000 1,512,000
Rohm & Haas Co......... 20,000 1,295,000
-----------
2,807,000
-----------
ELECTRICAL EQUIPMENT--2.8%
General Electric Co.... 90,000 4,533,750
Reliance Electric Co.
Cl.A*.............. 25,000 496,875
-----------
5,030,625
-----------
MACHINERY--0.3%
Coltec Industries, Inc.* 31,000 585,125
-----------
OTHER-1.1%
Allied Signal, Inc..... 50,000 1,912,500
-----------
10,335,250
-----------
SCIENCE & TECHNOLOGY--4.4%
COMMUNICATION
EQUIPMENT--1.4%
General Instrument Corp.* 40,000 2,425,000
-----------
COMPUTER SOFTWARE--0.5%
General Motors Corp. Cl.E 25,000 881,250
-----------
SEMI-CONDUCTORS &
RELATED--2.5%
Intel Corp............. 40,000 2,370,000
Motorola, Inc.......... 40,000 2,120,000
-----------
4,490,000
-----------
7,796,250
-----------
ENERGY--3.4%
DOMESTIC
PRODUCERS-1.0%
Seagull Energy Corp.*.. 25,000 $ 615,625
Snyder Oil Corp........ 62,500 1,109,375
-----------
1,725,000
-----------
INTERNATIONAL
PRODUCERS--1.5%
Chevron Corp........... 60,000 2,662,500
-----------
OIL & GAS
SERVICES--0.9%
Enron Corp............. 50,000 1,618,750
-----------
6,006,250
-----------
PUBLIC UTILITIES--3.3%
TELEPHONE--3.3%
MCI Communications
Corp............... 110,000 2,502,500
Sprint Corp............ 90,000 3,296,250
-----------
5,798,750
-----------
OTHER--1.7%
France Growth
Fund, Inc.......... 92,400 1,016,400
Mexico Fund, Inc....... 50,000 1,587,500
Scudder New Asia
Fund, Inc.*........ 22,000 514,250
-----------
3,118,150
-----------
Total Common & Preferred
Stocks
(cost $80,425,242). 84,715,375
-----------
<PAGE>

CORPORATE BONDS--21.5%
BRADY--1.9%
Mexican Pars, Series B
6.25%, 12/31/19.... $5,000 $3,300,000
-----------
FINANCIAL--9.8%
Citicorp
6.75%, 8/15/05..... 3,000 2,750,199
Floating Rate
4.75%, 8/14/11..... 2,900 2,642,625
Ford Motor Credit Co.
5.00%, 7/15/01..... 3,860 3,833,366
General Motors
Acceptance Corp.
7.125%, 6/01/99.... 3,500 3,452,925
Goldman Sachs
Group, L.P.
5.00%, 2/27/98..... 1,200 1,188,000
Lehman Brothers
Index Notes
Floating Rate
4.00%, 2/10/96..... 3,800 3,632,420
-----------
17,499,535
-----------
INDUSTRIAL--3.3%
Empresas la Moderna,
S.A. de C.V.
10.25%, 11/12/97... 2,000 2,035,000
News America
Holdings, Inc.
9.25%, 2/01/13..... 1,250 1,269,967
Paramount Communications, Inc.
8.25%, 8/01/22..... 3,250 2,686,372
-----------
5,991,339
-----------
SOVEREIGN-1.2%
Republic of Argentina
8.375%, 12/20/03... 2,500 2,093,750
-----------

TRANSPORTATION--1.0%
Transportacion Maritima
S.A. de C.V.
8.50%, 10/15/00.... $2,000 $1,738,560
-----------
PUBLIC UTILITIES--4.3%
Abbey National, Plc.
4.50%, 3/10/99..... 4,000 3,970,400
Province of Ontario
4.812%, 8/17/99.... 3,700 3,683,720
-----------
7,654,120
-----------
Total Corporate Bonds
(cost $38,686,730). 38,277,304
-----------
MORTGAGE RELATED
SECURITIES--10.7%
Government National
Mortgage Association
7.00%, 6/15/23-5/15/24 10,544 9,908,360
7.50%, 2/15/23 - 12/15/23 9,403 9,132,713
-----------
Total Mortgage Related
Securities
(cost $19,497,337). 19,041,073
-----------
U.S. GOVERNMENT
OBLIGATIONS--7.8%
U.S. Treasury Bond
7.125%, 2/15/23.... 2,300 2,220,937
U.S. Treasury Notes
4.75%, 2/15/97..... 2,000 1,934,060
5.50%, 7/31/97..... 3,050 2,983,754
5.625%, 8/31/97.... 1,000 979,690
7.875%, 4/15/98.... 700 730,625
U.S. Treasury Strips
Zero coupon,
2/15/13 - 2/15/15.. 23,125 4,991,237
-----------
Total U.S. Government
Obligations
(cost $12,714,231). 13,840,303
-----------
<PAGE>

COMMERCIAL PAPER--14.7%
American Express Co.
4.20%, 8/01/94..... $5,000 $5,000,000
Exxon Asset
Management Corp.
4.00%, 8/01/94..... 8,074 8,074,000
Ford Motor Credit Co.
4.25%, 8/05/94..... 5,500 5,497,403
Merrill Lynch & Co.
4.15%, 8/02/94..... 3,673 3,672,577
4.20%, 8/03/94..... 4,005 4,004,065
-----------
Total Commercial Paper
(amortized cost $26,248,045) 26,248,045
-----------

TOTAL INVESTMENTS--102.2%
(cost $177,571,585) $182,122,100
Other assets less
liabilities--(2.2%). (3,882,979)
-----------
NET ASSETS--100% $178,239,121
============
*Non-income producing.
See notes to financial statements.
<PAGE>

STATEMENT OF ASSETS AND LIABILITIES
July 31, 1994 Alliance Balanced Shares

ASSETS
Investments in securities,
at value (cost $177,571,585) ............... $ 182,122,100
Cash ......................................... 642
Receivable for investment
securities sold ............................ 14,333,128
Dividends and interest receivable ............ 1,197,834
Receivable for capital stock sold ............ 464,513
Other assets ................................. 6,022
------------
Total assets ................................. 198,124,239
------------
LIABILITIES
Payable for investment securities purchased .. 19,336,101
Payable for capital stock redeemed ........... 163,252
Advisory fee payable ......................... 93,654
Distribution fee payable ..................... 49,113
Accrued expenses ............................. 242,998
------------
Total liabilities ............................ 19,885,118
------------

NET ASSETS ......................................... $ 178,239,121
============
COMPOSITION OF NET ASSETS
Capital stock, at par ........................ $ 133,349
Additional paid-in capital ................... 173,430,186
Undistributed net investment income .......... 396,666
Accumulated net realized loss ................ (271,595)
Net unrealized appreciation of investments ... 4,550,515
------------
$ 178,239,121
============
CALCULATION OF MAXIMUM OFFERING PRICE
CLASS A SHARES
Net asset value and redemption
price per share ($157,637,136/11,778,062
shares of capital stock issued
and outstanding) ........................... $13.38
Sales charge-4.25% of public offering price .. .59
-----
Maximum offering price ....................... $13.97
=====
CLASS B SHARES
Net asset value and offering price
per share ($14,347,566/1,084,323 shares
of capital stock issued and outstanding) ... $13.23
=====
CLASS C SHARES
Net asset value, redemption and
offering price per share
($6,254,419/472,535 shares
of capital stock issued and outstanding) ... $13.24
=====
See notes to financial statements.
<PAGE>
STATEMENT OF OPERATIONS
October 1, 1993 Through July 31, 1994* Alliance Balanced Shares

INVESTMENT INCOME
Interest ................................ $ 3,991,750
Dividends ............................... 1,796,422 $ 5,788,172
---------
EXPENSES
Advisory fee ............................ 958,914
Distribution fee-Class A ................ 331,544
Distribution fee-Class B ................ 107,441
Distribution fee-Class C ................ 45,387
Transfer agency ......................... 235,629
Administrative .......................... 117,603
Registration ............................ 78,441
Audit and legal ......................... 51,322
Printing ................................ 43,766
Custodian ............................... 39,128
Directors' fees ......................... 21,318
Taxes ................................... 12,825
Miscellaneous ........................... 17,417
---------
Total expenses .......................... 2,060,735
------------
Net investment income ................... 3,727,437
------------
REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS
Net realized gain on investments ........ 1,521,330
Net change in unrealized
appreciation of investments (11,401,870)
------------
Net loss on investments ................. (9,880,540)
------------
NET DECREASE IN NET ASSETS
FROM OPERATIONS ............... $ (6,153,103)
============

STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
October 1, 1993 Year Ended
Through September 30,
July 31, 1994* 1993
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS
Net investment income........................................... $ 3,727,437 $ 4,179,656
Net realized gain on investments................................ 1,521,330 6,106,319
Net change in unrealized appreciation of investments............ (11,401,870) 9,785,983
------------ ------------
Net increase (decrease) in net assets from operations........... (6,153,103) 20,071,958
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM
Net investment income
Class A....................................................... (3,328,864) (4,932,817)
Class B....................................................... (209,253) (261,799)
Class C....................................................... (94,432) (9,321)
Net realized gain on investments
Class A....................................................... (3,450,935) -0-
Class B....................................................... (236,079) -0-
Class C....................................................... (106,940) -0-
CAPITAL STOCK TRANSACTIONS
Net increase ................................................... 5,057,935 21,510,621
------------ ------------
Total increase (decrease)....................................... (8,521,671) 36,378,642
NET ASSETS
Beginning of year............................................... 186,760,792 150,382,150
------------ ------------
End of period (including undistributed net investment income
of $396,666 and $498,962, respectively)....................... $178,239,121 $186,760,792
============ ============
</TABLE>
*The Fund changed its fiscal year end from September 30 to July 31.
See notes to financial statements.
<PAGE>

NOTES TO FINANCIAL STATEMENTS
July 31, 1994 Alliance Balanced Shares

NOTE A: Significant Accounting Policies

Alliance Balanced Shares, Inc. (the "Fund") is registered under the Investment
Company Act of 1940, as a diversified, open end management investment company.
On February 23, 1993, the creation of a third class of shares, Class C shares,
was approved by the Board of Directors. The Fund offers Class A, Class B and
Class C shares. Class A shares are sold with a front end sales charge of up to
4.25%. Class B shares are sold with a contingent deferred sales charge which
declines from 4% to zero depending on the period of time the shares are held.
Class B shares will automatically convert to Class A shares eight years after
the end of the calendar month of purchase. Class C shares are sold without an
initial or contingent deferred sales charge. All three classes of shares have
identical voting, dividend, liquidation and other rights, except that each class
bears different distribution expenses and has exclusive voting rights with
respect to its distribution plan. Distribution of Class C shares commenced on
May 3, 1993. The following is a summary of significant accounting policies
followed by the Fund.

1. Security Valuation

Portfolio securities traded on national securities exchanges are valued at the
last sales price or, if no sale occurred, at the mean of the bid and asked price
at the regular close of the New York Stock Exchange. Securities traded on the
over the counter market are valued at the mean of the closing bid and asked
price. Securities for which current market quotations are not readily available
(including investments which are subject to limitations as to their sale) are
valued at their fair value as determined in good faith by the Board of
Directors. The Board of Directors has further determined that the value of
certain portfolio debt securities, other than temporary investments in short
term securities, be determined by reference to valuations obtained from a
pricing service. Securities which mature in 60 days or less are valued at
amortized cost, which approximates market value. The ability of issuers of debt
securities held by the Fund to meet their obligations may be affected by
economic developments in a specific industry or region.

2. Option Writing

When the Fund writes an option, an amount equal to the premium received by
the Fund is recorded as a liability and is subsequently adjusted to the
current market value of the option written. Premiums received from writing
options which expire unexercised are treated by the Fund on the expiration
date as realized gains. The difference between the premium and the amount
paid on effecting a closing purchase transaction, including brokerage
commissions, is also treated as a realized gain, or if the premium is less
than the amount paid for the closing purchase transaction, as a realized
loss. If a call option is exercised, the premium is added to the proceeds
from the sale in determining whether the Fund has realized a gain or loss.
As a writer of options, the Fund bears the risk of unfavorable changes in the
price of the financial instruments underlying the options.

3. Taxes

It is the Fund's policy to meet the requirements of the Internal Revenue Code
applicable to regulated investment companies and to distribute all of its
investment company taxable income and net realized gains, if any, to
shareholders. Therefore, no provisions for federal income or excise taxes
are required.

4. Investment Income And Security Transactions

Dividend income is recorded on the ex dividend date. Interest income is accrued
daily. Security transactions are accounted for on the date securities are
purchased or sold. Security gains and losses are determined on the identified
cost basis. The Fund accretes discounts as adjustments to interest income.

5. Dividends And Distributions

Dividends and distributions to shareholders are recorded on the ex dividend
date. Income dividends and capital gain distributions are determined in
accordance with income tax regulations, which may differ from generally accepted
accounting principles.

6. Change Of Year End

The Fund changed its fiscal year end from September 30, to July 31. Accordingly,
the statements of operations, changes in net assets and per share data and
ratios reflect

<PAGE>

the period from October 1, 1993 to July 31, 1994.

7. Change In Accounting For Distribution To
Shareholders

During the year ended July 31, 1994 the Alliance Balanced Shares Fund adopted
Statement of Position 93-2: Determination, Disclosure and Financial Statement
Presentation of Income, Capital Gain and Return of Capital Distributions by
Investment Companies. Accordingly, permanent book and tax basis differences
relating to shareholder distribution have been reclassified to paid-in-capital.
As of the beginning of the current period, the cumulative effect of such
differences totalling $(197,184) and $(30,827) were reclassified from
undistributed net investment income and undistributed net realized gains,
respectively, to additional paid-in-capital. Net investment income, net realized
gains and net assets were not affected by this change.

NOTE B: Advisory Fee And Other Transactions With
Affiliates

Under the terms of an investment advisory agreement, the Fund pays its Adviser,
Alliance Capital Management L.P., an advisory fee at an annual rate of .625% of
the first $200 million, .50% of the next $200 million and .45% of the excess
over $400 million of the average daily net assets of the Fund. Such fee is
accrued daily and paid monthly. The Adviser has agreed, under the terms of the
investment advisory agreement, to reimburse the Fund to the extent that its
aggregate expenses (exclusive of interest, taxes, brokerage, distribution fees
and extraordinary expenses) exceed the limits prescribed by any state in which
the Fund's shares are qualified for sale. The Adviser believes that the most
restrictive expense ratio limitation imposed by any state is 2.5% of the first
$30 million of its average daily net assets, 2% of the next $70 million of its
average daily net assets and 1.5% of its average daily net assets in excess of
$100 million. No reimbursement was required for the period ended July 31, 1994.

Pursuant to the Advisory Agreement, the Fund reimburses the Adviser for the cost
of certain legal and accounting services provided to the Fund by the Adviser.
For the period ended July 31, 1994, such reimbursement amounted to $117,603.

The Fund compensates Alliance Fund Services, Inc. (a wholly-owned subsidiary of
the Adviser) in accordance with a Services Agreement for providing personnel and
facilities to perform transfer agency services for the Fund. Such compensation
amounted to $177,479 for the period ended July 31, 1994.

Alliance Fund Distributors, Inc. (a wholly owned subsidiary of the Adviser)
serves as the Distributor of the Fund's shares. The Distributor received front
end sales charges of $13,639 from the sale of Class A shares and $33,317 in
contingent deferred sales charges imposed upon redemptions by shareholders of
Class B shares for the period ended July 31, 1994.

Brokerage commissions paid on securities transactions for the period ended July
31, 1994 amounted to $294,990, none of which was paid to brokers utilizing the
services of the Pershing Division of Donaldson, Lufkin & Jenrette Securities
Corp. ("DLJ"), an affiliate of the Adviser, nor to DLJ directly.

NOTE C: Distribution Services Agreement

The Fund has adopted a Distribution Services Agreement (the "Agreement")
pursuant to Rule 12b 1 under the Investment Company Act of 1940. Under the
Agreement, the Fund pays a distribution fee to the Distributor at an annual rate
of up to .30% of the Fund's average daily net assets attributable to the Class A
shares and 1% of the average daily net assets attributable to both Class B
shares and Class C shares. The Agreement provides that the Distributor will use
such payments in their entirety for distribution assistance and promotional
activities. The Distributor has incurred expenses in excess of the distribution
costs reimbursed by the Fund in the amount of $844,835 and $180,501, for Class B
and C shares, respec-

<PAGE>

tively; such costs may be recovered from the Fund in future periods. In
accordance with the Agreement, there is no provision for recovery of
unreimbursed distribution costs incurred by the Distributor, beyond the current
fiscal year for Class A shares. The Agreement also provides that the Adviser may
use its own resources to finance the distribution of the Fund's shares.

NOTE D: Investment Transactions

Purchases and sales of investment securities (excluding short term investments)
aggregated $199,522,885 and $209,164,780, respectively, for the period ended
July 31, 1994. There were purchases of $33,815,505 and sales of $36,772,399 of
U.S. Government and government agency obligations for the period ended July 31,
1994. At July 31, 1994, the cost of securities for federal income tax purposes
was $177,774,142. Accordingly gross unrealized appreciation of investments was
$9,032,817 and gross unrealized depreciation of investments was $4,684,859
resulting in net unrealized appreciation of $4,347,958.

NOTE E: Capital Stock

There are 180,000,000 shares of $.01 par value capital stock authorized, divided
into three classes, designated Class A, Class B and Class C shares. Each class
consists of 60,000,000 authorized shares. Prior to February 23, 1993 there were
60,000,000 shares of $1.00 par value capital stock authorized, divided into two
classes designated Class A and Class B shares. Transactions in capital stock
were as follows:
<TABLE>
<CAPTION>
SHARES AMOUNT
------ ------
October 1, 1993 Year Ended October 1, 1993 Year Ended
through September 30, through September 30,
July 31, 1994** 1993 July 31, 1994** 1993
--------------- ------------- ---------------- -------------
<S> <C> <C> <C> <C>
Class A
Shares sold............................. 876,506 2,895,426 $12,195,964 $ 39,563,044
Shares issued in reinvestment
of dividends...................... 407,717 277,871 5,628,682 3,854,316
Shares redeemed......................... (1,481,275) (2,098,159) (20,511,243) (28,887,385)
---------- ---------- ----------- -----------
Net increase (decrease)................. (197,052) 1,075,138 $(2,686,597) $ 14,529,975
========== ========== =========== ===========
Class B
Shares sold............................. 564,263 519,493 $7,799,514 $ 7,138,353
Shares issued in reinvestment
of dividends...................... 27,387 17,098 374,239 235,738
Shares redeemed......................... (403,295) (135,611) (5,657,858) (1,857,863)
---------- ---------- ----------- -----------
Net increase............................ 188,355 400,980 $ 2,515,895 $ 5,516,228
========== ========== =========== ===========

October 1, 1993 May 3, 1993* October 1, 1993 May 3, 1993*
through to September 30, through to September 30,
July 31, 1994** 1993 July 31, 1994** 1994
Class C
Shares sold............................. 481,248 115,402 $ 6,765,099 $ 1,622,070
Shares issued in reinvestment
of dividends...................... 11,554 368 157,982 5,164
Shares redeemed......................... (124,424) (11,613) (1,694,444) (162,816)
---------- ---------- ----------- -----------
Net increase............................ 368,378 104,157 $ 5,228,637 $ 1,464,418
========== ========== =========== ===========
</TABLE>
* Commencement of distribution.
** The Fund changed its fiscal year end from September 30 to July 31.
<PAGE>

NOTE F:

Pursuant to Federal income tax regulations, net capital loss of approximately
$5,813,000 realized by the Alliance Balanced Shares, between November 1, 1993
and July 31, 1994 have been deferred to fiscal year 1995. This capital loss is
available in fiscal 1995 to offset capital gains and reduce amounts
distributable to shareholders.

<PAGE>

FINANCIAL HIGHLIGHTS Alliance Balanced Shares

Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
<TABLE>
<CAPTION>
CLASS A
October 1, 1993
through Year Ended September 30,
July 31, 1994** 1993 1992 1991 1990
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year........... $14.40 $13.20 $12.64 $10.41 $14.13
------ ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS
Net investment income........................ .29 .34 .44 .46 .45
Net realized and unrealized gain (loss)
on investments........................... (.74) 1.29 .57 2.17 (2.14)
------ ------ ------ ------ ------
Net increase (decrease) in net asset value
from operations.......................... (.45) 1.63 1.01 2.63 (1.69)
------ ------ ------ ------ ------
LESS: DISTRIBUTIONS
Dividends from net
investment income........................ (.28) (.43) (.45) (.40) (.40)
Distributions from net
realized gains........................... (.29) -0- -0- -0- (1.63)
------ ------ ------ ------ ------
Total dividends and
distributions............................ (.57) (.43) (.45) (.40) (2.03)
------ ------ ------ ------ ------
Net asset value,
end of period............................ $13.38 $14.40 $13.20 $12.64 $10.41
====== ====== ====== ====== ======
TOTAL RETURN
Total investment return based on net
asset value (b)..................... (3.21)% 12.52% 8.14% 25.52% (13.12)%
====== ====== ====== ====== ======
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted)..................... $157,637 $172,484 $143,883 $154,230 $140,913
Ratio of expenses to average net assets...... 1.27%(c) 1.35% 1.40% 1.44% 1.36%
Ratio of net investment income to
average net assets....................... 2.50%(c) 2.50% 3.26% 3.75% 4.01%
Portfolio turnover rate...................... 116% 188% 204% 70% 169%
</TABLE>
See footnote summary on page 18.
<PAGE>

Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
<TABLE>
<CAPTION>
Class B Class C
October 1, 1993 October 1, 1993 August 2, 1993(D)
through Year Ended September 30, through to April 30,
July 31, 1994** 1993 1992 1991(a) July 31, 1994** 1994
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 14.27 $ 13.13 $ 12.61 $ 11.84 $ 14.28 $ 13.63
-------- -------- ------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS
Net investment income ............ .22 .29 .37 .25 .24 .11
Net realized and unrealized
gain (loss) on
investments................. (.75) 1.22 .54 .80 (.77) .71
-------- -------- ------- ------- ------- -------
Net increase (decrease) in net asset value
from operations............. (.53) 1.51 .91 1.05 (.53) .82
-------- -------- ------- ------- ------- -------
LESS: DISTRIBUTIONS
Dividends from net
investment income........... (.22) (.37) (.39) (.28) (.22) (.17)
Distribution from net
realized gains.............. (.29) -0- -0- -0- (.29) -0-
-------- -------- ------- ------- ------- -------
Total dividends and
distributions............... (.51) (.37) (.39) (.28) (.51) (.17)
-------- -------- ------- ------- ------- -------
Net asset value,
end of period............... $ 13.23 $ 14.27 $ 13.13 $ 12.61 $ 13.24 $ 14.28
======== ======== ======= ======= ======= =======
TOTAL RETURN
Total investment return based on net
asset value (b)............. ( 3.80)% 11.65% 7.32% 8.96% (3.80)% 6.01%
======== ======== ======= ======= ======= =======
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted)............. $ 14,347 $ 12,789 $ 6,499 $ 1,830 $ 6,254 $ 1,487
Ratio of expenses to average
net assets.................. 2.05%(c) 2.13% 2.16% 2.13%(c) 2.03%(c) 2.29%(c)
Ratio of net investment
income to average net assets 1.73%(c) 1.72% 2.46% 3.19%(c) 1.81%(c) 1.47%(c)
Portfolio turnover rate........... 116% 188% 204% 70% 116% 188%
</TABLE>

* The Fund changed its fiscal year end from September 30 to July 31.

(a) For the period February 4, 1991 (commencement of distribution) to September
30, 1991.

(b) Total investment return is calculated assuming an initial investment made
at the net asset value at the beginning of the period, reinvestment of all
dividends and distributions at net asset value during the period, and
redemption on the last day of the period. Initial sales charges or
contingent deferred sales charges are not reflected in the calculation of
total investment return. Total investment return calculated for a period of
less than one year is not annualized.

(d) Commencement of distribution.

<PAGE>

REPORT OF INDEPENDENT ACCOUNTANTS Alliance Balanced Shares

To The Board Of Directors And
Shareholders Of Alliance Balanced Shares

In our opinion, the accompanying statement of assets and liabilities, including
the portfolio of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Alliance Balanced Shares at July
31, 1994, the results of its operations for the period October 1, 1993 through
July 31, 1994, the changes in its net assets for the period October 1, 1993
through July 31, 1994 and for the year ended September 30, 1993 and the
financial highlights for each of the periods presented, in conformity with
generally accepted accounting principles. These financial statements and
financial highlights (hereafter referred to as "financial statements") are the
responsibility of the Fund's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at July 31, 1994 by
correspondence with the custodian and brokers and the application of alternative
auditing procedures where confirmations from brokers were not received, provide
a reasonable basis for the opinion expressed above.

PRICE WATERHOUSE LLP
New York, New York
September 20, 1994

<PAGE>

APPENDIX A: FUTURES CONTRACTS, OPTIONS ON FUTURES CONTRACTS
AND OPTIONS ON FOREIGN CURRENCIES

Futures Contracts.

The Fund may enter into contracts for the purchase or sale
for future delivery of foreign currencies. U.S. futures
contracts have been designed by exchanges which have been
designated "contracts markets" by the Commodity Futures Trading
Commission ("CFTC"), and must be executed through a futures
commission merchant, or brokerage firm, which is a member of the
relevant contract market. Futures contracts trade on a number of
exchange markets, and, through their clearing corporations, the
exchanges guarantee performance of the contracts as between the
clearing members of the exchange.

At the same time a futures contract is purchased or sold, the
Fund must allocate cash or securities as a deposit payment
("initial deposit"). It is expected that the initial deposit
would be approximately 1 1/2% to 5% of a contract's face value.
Daily thereafter, the futures contract is valued and the payment
of "variation margin" may be required, since each day the Fund
would provide or receive cash that reflects any decline or
increase in the contract's value.

At the time of delivery of securities pursuant to such a
contract, adjustments are made to recognize differences in value
arising from the delivery of securities with a different price or
interest rate from that specified in the contract. In some (but
not many) cases, securities called for by a futures contract may
not have been issued when the contract was written.

Although futures contracts by their terms call for the actual
delivery or acquisition of securities, in most cases the
contractual obligation is fulfilled before the date of the
contract without having to make or take delivery of the
securities. The offsetting of a contractual obligation is
accomplished by buying (or selling, as the case may be) on a
commodities exchange an identical futures contract calling for
delivery in the same month. Such a transaction, which is
effected through a member of an exchange, cancels the obligation
to make or take delivery of the securities. Since all
transactions in the futures market are made, offset or fulfilled
through a clearinghouse associated with the exchange on which the
contracts are traded, the Fund will incur brokerage fees when it
purchases or sells futures contracts.

A-1

<PAGE>

Options on Futures Contracts

The Fund intends to purchase and write options on futures
contracts for hedging purposes. The Fund is not a commodity pool
and all transactions in futures contracts and options on futures
contracts engaged in by the Fund must constitute bona fide
hedging or other permissible transactions in accordance with the
rules and regulations promulgated by the CFTC. The purchase of a
call option on a futures contract is similar in some respects to
the purchase of a call option on an individual foreign currency.
Depending on the pricing of the option compared to either the
price of the futures contract upon which it is based or the price
of the underlying debt securities, it may or may not be less
risky than ownership of the futures contract or underlying debt
securities. As with the purchase of futures contracts, when the
Fund is not fully invested it may purchase a call option on a
futures contract to hedge against adverse market conditions.

The writing of a call option on a futures contract
constitutes a partial hedge against declining prices of the
foreign currency which is deliverable upon exercise of the
futures contract. If the futures price at expiration of the
option is below the exercise price, the Fund will retain the full
amount of the option premium which provides a partial hedge
against any decline that may have occurred in the Fund's
portfolio holdings. The writing of a put option on a futures
contract constitutes a partial hedge against increasing prices of
the foreign currency which is deliverable upon exercise of the
futures contract. If the futures price at expiration of the
option is higher than the exercise price, the Fund will retain
the full amount of the option premium which provides a partial
hedge against any increase in the price of a foreign currency
which the Fund intends to purchase. If a put or call option the
Fund has written is exercised, the Fund will incur a loss which
will be reduced by the amount of the premium it receives.
Depending on the degree of correlation between changes in the
value of its portfolio securities and changes in the value of its
futures positions, the Fund's losses from existing options on
futures may to some extent be reduced or increased by changes in
the value of portfolio securities.

The purchase of a put option on a futures contract is similar
in some respects to the purchase of protective put options on
portfolio securities. For example, the Fund may purchase a put
option on a futures contract to hedge the Fund's portfolio
against the risk of rising interest rates.

The amount of risk the Fund assumes when it purchases an
option on a futures contract is the premium paid for the option
plus related transaction costs. In addition to the correlation
risks discussed above, the purchase of an option also entails the

A-2

<PAGE>

risk that changes in the value of the underlying futures contract
will not be fully reflected in the value of the option purchased.

Options on Foreign Currencies

The Fund may purchase and write options on foreign currencies
for hedging purposes in a manner similar to that in which futures
contracts on foreign currencies, or forward contracts, will be
utilized. For example, a decline in the dollar value of a
foreign currency in which portfolio securities are denominated
will reduce the dollar value of such securities, even if their
value in the foreign currency remains constant. In order to
protect against such diminutions in the value of portfolio
securities, the Fund may purchase put options on the foreign
currency. If the value of the currency does decline, the Fund
will have the right to sell such currency for a fixed amount in
dollars and will thereby offset, in whole or in part, the adverse
effect on its portfolio which otherwise would have resulted.

Conversely, where a rise in the dollar value of a currency in
which securities to be acquired are denominated is projected,
thereby increasing the cost of such securities, the Fund may
purchase call options thereon. The purchase of such options
could offset, at least partially, the effects of the adverse
movements in exchange rates. As in the case of other types of
options, however, the benefit to the Fund deriving from purchases
of foreign currency options will be reduced by the amount of the
premium and related transaction costs. In addition, where
currency exchange rate do not move in the direction or to the
extent anticipated, the Fund could sustain losses on transactions
in foreign currency options which would require it to forego a
portion or all of the benefits of advantageous changes in such
rates.

The Fund may write options on foreign currencies for the same
types of hedging purposes. For example, where the Fund
anticipates a decline in the dollar value of foreign currency
denominated securities due to adverse fluctuations in exchange
rates it could, instead of purchasing a put option, write a call
option on the relevant currency. If the expected decline occurs,
the option will most likely not be exercised, and the diminution
in value of portfolio securities will be offset by the amount of
the premium received.

Similarly, instead of purchasing a call option to hedge
against an anticipated increase in the dollar cost of securities
to be acquired, the Fund could write a put option on the relevant
currency which, if rates move in the manner projected, will
expire unexercised and allow the Fund to hedge such increased
cost up to the amount of the premium. As in the case of other
types of options, however, the writing of a foreign currency

A-3

<PAGE>

option will constitute only a partial hedge up to the amount of
the premium, and only if rates move in the expected direction. If
this does not occur, the option may be exercised and the Fund
would be required to purchase or sell the underlying currency at
a loss which may not be offset by the amount of the premium.
Through the writing of options on foreign currencies, the Fund
also may be required to forego all or a portion of the benefits
which might otherwise have been obtained from favorable movements
in exchange rates.

The Fund intends to write covered call options on foreign
currencies. A call option written on a foreign currency by the
Fund is "covered" if the Fund owns the underlying foreign
currency covered by the call or has an absolute and immediate
right to acquire that foreign currency without additional cash
consideration (or for additional cash consideration held in a
segregated account by its Custodian) upon conversation or
exchange of other foreign currency held in its portfolio. A call
option is also covered if the Fund has a call on the same foreign
currency and in the same principal amount as the call written
where the exercise price of the call held (a) is equal to or less
than the exercise price of the call written or (b) is greater
than the exercise price of the call written if the difference is
maintained by the Fund in cash, U.S. Government Securities and
other high-grade liquid debt securities in a segregated account
with its Custodian.

The Fund also intends to write call options on foreign
currencies for cross-hedging purposes. An option that is
cross-hedged is not covered, but is designed to provide a hedge
against a decline in the U.S. dollar value of a security which
the Fund owns or has the right to acquire and which is
denominated in the currency underlying the option due to an
adverse change in the exchange rate. In such circumstances, the
Fund collateralizes the option by maintaining in a segregated
account with the Fund's Custodian, cash or U.S. Government
Securities or other high- grade liquid debt securities in an
amount not less than the value of the underlying foreign currency
in U.S. dollars marked to market daily.

Additional Risks of Options on Futures Contracts, Forward
Contracts and Options on Foreign Currencies

Unlike transactions entered into by the Fund in futures
contracts, options on foreign currencies and forward contracts
are not traded on contract markets regulated by the CFTC or (with
the exception of certain foreign currency options) by the SEC.
To the contrary, such instruments are traded through financial
institutions acting as market-makers, although foreign currency
options are also traded on certain national securities exchanges,
such as the Philadelphia Stock Exchange and the Chicago Board

A-4

<PAGE>

Options Exchange, subject to SEC regulation. Similarly, options
on securities may be traded over-the-counter. In an over-the-
counter trading environment, many of the protections afforded to
exchange participants will not be available. For example, there
are no daily price fluctuation limits, and adverse market
movements could therefore continue to an unlimited extent over a
period of time. Although the purchaser of an option cannot lose
more than the amount of the premium plus related transaction
costs, this entire amount could be lost. Moreover, the option
writer and a trader of forward contracts could lose amounts
substantially in excess of their initial investments, due to the
margin and collateral requirements associated with such
positions.

Options on foreign currencies traded on national securities
exchanges are within the jurisdiction of the SEC, as are other
securities traded on such exchanges. As a result, many of the
protections provided to traders on organized exchanges will be
available with respect to such transactions. In particular, all
foreign currency option positions entered into on a national
securities exchange are cleared and guaranteed by the Options
Clearing Corporation ("OCC"), thereby reducing the risk of
counterparty default. Further, a liquid secondary market in
options traded on a national securities exchange may be more
readily available than in the over-the-counter market,
potentially permitting the Fund to liquidate open positions at a
profit prior to exercise or expiration, or to limit losses in the
event of adverse market movements.

The purchase and sale of exchange-traded foreign currency
options, however, is subject to the risks of the availability of
a liquid secondary market described above, as well as the risks
regarding adverse market movements, margining of options written,
the nature of the foreign currency market, possible intervention
by governmental authorities and the effects of other political
and economic events. In addition, exchange-traded options on
foreign currencies involve certain risks not presented by the
over-the-counter market. For example, exercise and settlement of
such options must be made exclusively through the OCC, which has
established banking relationships in applicable foreign countries
for this purpose. As a result, the OCC may, if it determines
that foreign governmental restrictions or taxes would prevent the
orderly settlement of foreign currency option exercise, or would
result in undue burdens on the OCC or its clearing member, impose
special procedures on exercise and settlement, such as technical
changes in the mechanics of delivery of currency, the fixing of
dollar settlement prices or prohibitions on exercise.

In addition, futures contracts, options on futures contracts,
forward contracts and options on foreign currencies may be traded
on foreign exchanges. Such transactions are subject to the risk

A-5

<PAGE>

of governmental actions affecting trading in or the prices of
foreign currencies or securities. The value of such positions
also could be adversely affected by (i) other complex foreign
political and economic factors, (ii) lesser availability than in
the United States of data on which to make trading decisions,
(iii) delays in the Fund's ability to act upon economic events
occurring in foreign markets during nonbusiness hours in the
United States, (iv) the imposition of different exercise and
settlement terms and procedures and margin requirements than in
the United States, and (v) lesser trading volume.

A-6
00250157.AS5

<PAGE>

PART C
OTHER INFORMATION

Item 24. Financial Statements and Exhibits

(a) Financial Statements

Included in the Prospectus:

Financial Highlights

Included in the Statement of Additional Information:

Portfolio of Investments, July 31, 1994

Statement of Assets and Liabilities, July 31, 1994

Statement of Operations, year ended July 31, 1994

Statement of Changes in Net Assets, years ended
September 30, 1993 and July 31, 1994

Notes to Financial Statements, July 31, 1994

Supplementary Information for each of the four
periods ended September 30, 1993 and the period
ended July 31, 1994

Report of Independent Accountants

Portfolio of Investments, January 31, 1995
(unaudited)

Statement of Assets and Liabilities, January 31,
1995 (unaudited)

Statement of Operations, January 31, 1995
(unaudited)

Statement of Changes in Net Assets, years ended
September 30, 1990 through September 30, 1993,
period ended July 31, 1994 and six months ended
January 31, 1995 (unaudited)

Notes to Financial Statements, January 31, 1995
(unaudited)

Financial Highlights, years ended September 30,
1990 through September 30, 1993, period ended
July 31, 1994 and six months ended January 31,
1995 (unaudited)

C-1

<PAGE>

All other schedules are omitted as the required
information is inapplicable

(b) Exhibits

(1) Articles of Restatement of Articles of
Incorporation as now in effect - Incorporated by
reference to Exhibit 1 to Post-Effective Amendment
No. 75 of Registrant's Registration Statement on
Form N-1A, filed November 30, 1992 (File No. 2-
10988).

(2) By-Laws Amended July 18, 1989 - Incorporated by
reference to Exhibit 2 to Post-Effective Amendment
No. 70 of Registrant's Registration Statement on
Form N-1A, filed January 26, 1990 (File No. 2-
10988).

(3) Not applicable.

(4) (a) Specimen of Share Certificate for Class A shares -
Incorporated by reference to Exhibit 4(a) to Post-
Effective Amendment No. 72 of Registrant's
Registration Statement on Form N-1A, filed
January 7, 1992(File No. 2-10988).

(b) Specimen of Share Certificate for Class B shares -
Incorporated by reference to Exhibit 4(b) to Post-
Effective Amendment No 72 of Registrant's
Registration Statement on Form N-1A, filed
January 7, 1992 (file No. 2-10988).

(c) Specimen of Share Certificate for Class C shares -
Incorporated by reference to Exhibit 4(c) to Post-
Effective Amendment No 81 of Registrant's
Registration Statement on Form N-1A, filed
November 28, 1994 (file No. 2-10988).

(5) Investment Advisory Agreement between the
Registrant and Alliance Capital Management L.P. -
Incorporated by reference to Exhibit 5 to Post-
Effective Amendment No. 75 of Registrant's
Registration Statement on Form N-1A, filed
November 30, 1992 (File No. 2-10988).

(6) (a) Distribution Services Agreement between the
Registrant and Alliance Fund Distributors, Inc. -
Incorporated by reference to Exhibit 6(a) to Post-
Effective Amendment No 81 of Registrant's

C-2

<PAGE>

Registration Statement on Form N-1A, filed
November 28, 1994 (file No. 2-10988).

(b) Selected Dealer Agreement between Alliance Fund
Distributors, Inc. and selected dealers offering
shares of Registrant - Incorporated by reference to
Exhibit 6 (b) to Post-Effective Amendment No. 76 of
Registrant's Registration Statement on Form N-1A,
filed March 1, 1993 (File No. 2-10988).

(c) Selected Agent Agreement between Alliance Fund
Distributors, Inc. and selected agents making
available shares of Registrant - Incorporated by
reference to Exhibit 6 (c) to Post-Effective
Amendment No. 76 of Registrant's Registration
Statement on Form N-1A, filed March 1, 1993 (File
No. 2-10988).

(7) Not applicable.

(8) Custodian Contract between the Registrant and State
Street Bank and Trust Company - Incorporated by
reference to Exhibit 8 to Post-Effective Amendment
No. 67 of Registrant's Registration Statement on
Form N-1A, filed February 1, 1988 (File No. 2-
10988).

(9) Transfer Agency Agreement between the Registrant
and Alliance Fund Services, Inc. - Incorporated by
reference to Exhibit 9 to Post-Effective Amendment
No. 68 of Registrant's Registration Statement on
Form N-1A, filed January 30, 1989 (File No. 2-
10988).

(10) Not applicable.

(11) Consent of Independent Accountants - filed
herewith.

(12) Not applicable.

(13) Not applicable.

(14) Not applicable.

(15) Rule 12b-1 Plan - Incorporated by reference to
Exhibit 15 Post-Effective Amendment No. 81 to
Registrant's Registration Statement on Form N-1A,
filed November 28, 1994.

C-3

<PAGE>

(16) Schedule for Computation of Total Return
Performance - Incorporated by reference to Exhibit
16 to Post-Effective Amendment No. 71 of
Registrant's Statement of Form N-1A, filed
November 29, 1991 (File No. - 2-10988).

(27) Financial Data Schedule - filed herewith.

Other Exhibits:
Power of Attorney of: Ruth Block, John D. Carifa,
David H. Dievler, William H. Foulk, Jr., James M.
Hester, Clifford L. Michel and Robert C. White -
Incorporated by reference to Other Exhibits to
Post-Effective Amendment No. 76 of Registrant's
Registration Statement on Form N-1A, filed
November 30, 1992 (File No. 2-10988).

Power of Attorney of: John H. Dobkin - Incorporated
by reference to Exhibit 6 (c) to Post-Effective
Amendment No. 76 of Registrant's Registration
Statement on Form N-1A, filed March 1, 1993 (File
No. 2-10988).

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 24, 1995)
______________ ________________________

Shares of Class A
Common Stock par value $.01 9,507
Shares of Class B
Common Stock par value $.01 1,305
Shares of Class C
Common Stock par value $.01 366
______

Total 11,178

ITEM 27. Indemnification

It is the Registrant's policy to indemnify its directors and
officers, employees and other agents to the maximum extent
permitted by Section 2-418 of the General Corporation Law of
the State of Maryland and as set forth in Article SEVENTH of
Registrant's Articles of Restatement of Articles of

C-4

<PAGE>

Incorporation, filed as Exhibit 1, Section 11 of the
Registrant's Amended By-laws filed as Exhibit 2 and Section
10 of the Distribution Services Agreement filed as Exhibit
6(a), all as set forth below. The liability of the
Registrant's directors and officers is dealt with in Article
SEVENTH of Registrant's Articles of Restatement of Articles
of Incorporation, and Section 11 of the Registrant's Amended
By-laws, as set forth below. The Adviser's liability for any
loss suffered by the Registrant or its shareholders is set
forth in Section 4 of the Investment Advisory Agreement filed
as Exhibit 5 in response to Item 24, as set forth below.

Section 2-418 of the Maryland General Corporation Law
reads as follows:

"2-418 INDEMNIFICATION OF DIRECTORS, OFFICERS,
EMPLOYEES AND AGENTS.--(a) In this section the
following words have the meaning indicated.

(1) "Director" means any person who is or was
a director of a corporation and any person who,
while a director of a corporation, is or was
serving at the request of the corporation as a
director, officer, partner, trustee, employee, or
agent of another foreign or domestic corporation,
partnership, joint venture, trust, other
enterprise, or employee benefit plan.

(2) "Corporation" includes any domestic or
foreign predecessor entity of a corporation in a
merger, consolidation, or other transaction in
which the predecessor's existence ceased upon
consummation of the transaction.

(3) "Expenses" include attorney's fees.

(4) "Official capacity" means the following:

(i) When used with respect to a
director, the office of director in the
corporation; and

(ii) When used with respect to a person
other than a director as contemplated in subsection
(j), the elective or appointive office in the
corporation held by the officer, or the employment
or agency relationship undertaken by the employee
or agent in behalf of the corporation.

(iii) "Official capacity" does not
include service for any other foreign or domestic

C-5

<PAGE>

corporation or any partnership, joint venture,
trust, other enterprise, or employee benefit plan.

(5) "Party" includes a person who was, is, or
is threatened to be made a named defendant or
respondent in a proceeding.

(6) "Proceeding" means any threatened,
pending or completed action, suit or proceeding,
whether civil, criminal, administrative, or
investigative.

(b)(1) A corporation may indemnify any
director made a party to any proceeding by reason
of service in that capacity unless it is
established that:

(i) The act or omission of the director
was material to the matter giving rise to the
proceeding; and

1. Was committed in bad faith; or

2. Was the result of active and deliberate
dishonesty; or

(ii) The director actually received an
improper personal benefit in money, property, or
services; or

(iii) In the case of any criminal
proceeding, the director had reasonable cause to
believe that the act or omission was unlawful.

(2) (i) Indemnification may be against
judgments, penalties, fines, settlements, and
reasonable expenses actually incurred by the
director in connection with the proceeding.

(ii) However, if the proceeding was one
by or in the right of the corporation,
indemnification may not be made in respect of any
proceeding in which the director shall have been
adjudged to be liable to the corporation.

(3) (i) The termination of any proceeding
by judgment, order or settlement does not create a
presumption that the director did not meet the
requisite standard of conduct set forth in this
subsection.

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<PAGE>

(ii) The termination of any proceeding
by conviction, or a plea of nolo contendere or its
equivalent, or an entry of an order of probation
prior to judgment, creates a rebuttable presumption
that the director did not meet that standard of
conduct.

(c) A director may not be indemnified under
subsection (b) of this section in respect of any
proceeding charging improper personal benefit to
the director, whether or not involving action in
the director's official capacity, in which the
director was adjudged to be liable on the basis
that personal benefit was improperly received.

(d) Unless limited by the charter:

(1) A director who has been successful, on
the merits or otherwise, in the defense of any
proceeding referred to in subsection (b) of this
section shall be indemnified against reasonable
expenses incurred by the director in connection
with the proceeding.

(2) A court of appropriate jurisdiction upon
application of a director and such notice as the
court shall require, may order indemnification in
the following circumstances:

(i) If it determines a director is
entitled to reimbursement under paragraph (1) of
this subsection, the court shall order
indemnification, in which case the director shall
be entitled to recover the expenses of securing
such reimbursement; or

(ii) If it determines that the director
is fairly and reasonably entitled to
indemnification in view of all the relevant
circumstances, whether or not the director has met
the standards of conduct set forth in subsection
(b) of this section or has been adjudged liable
under the circumstances described in subsection (c)
of this section, the court may order such
indemnification as the court shall deem proper.
However, indemnification with respect to any
proceeding by or in the right of the corporation or
in which liability shall have been adjudged in the
circumstances described in subsection (c) shall be
limited to expenses.

C-7

<PAGE>

(3) A court of appropriate jurisdiction may
be the same court in which the proceeding involving
the director's liability took place.

(e)(1) Indemnification under subsection (b)
of this section may not be made by the corporation
unless authorized for a specific proceeding after a
determination has been made that indemnification of
the director is permissible in the circumstances
because the director has met the standard of
conduct set forth in subsection (b) of this
section.

(2) Such determination shall be made:

(i) By the board of directors by a
majority vote of a quorum consisting of directors
not, at the time, parties to the proceeding, or, if
such a quorum cannot be obtained, then by a
majority vote of a committee of the board
consisting solely of two or more directors not, at
the time, parties to such proceeding and who were
duly designated to act in the matter by a majority
vote of the full board in which the designated
directors who are parties may participate;

(ii) By special legal counsel selected
by the board or a committee of the board by vote as
set forth in subparagraph (1) of this paragraph,
or, if the requisite quorum of the full board
cannot be obtained therefor and the committee
cannot be established, by a majority vote of the
full board in which director who are parties may
participate; or

(iii) By the stockholders.

(3) Authorization of indemnification and
determination as to reasonableness of expenses
shall be made in the same manner as the
determination that indemnification is permissible.
However, if the determination that indemnification
is permissible is made by special legal counsel,
authorization of indemnification and determination
as to reasonableness of expenses shall be made in
the manner specified in subparagraph (ii) of
paragraph (2) of this subsection for selection of
such counsel.

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<PAGE>

(4) Shares held by directors who are parties
to the proceeding may not be voted on the subject
matter under this subsection.

(f)(1) Reasonable expenses incurred by a
director who is a party to a proceeding may be paid
or reimbursed by the corporation in advance of the
final disposition of the proceeding, upon receipt
by the corporation of:

(i) A written affirmation by the
director of the director's good faith belief that
the standard of conduct necessary for
indemnification by the corporation as authorized in
this section has been met; and

(ii) A written undertaking by or on
behalf of the director to repay the amount if it
shall ultimately be determined that the standard of
conduct has not been met.

(2) The undertaking required by subparagraph
(ii) of paragraph (1) of this subsection shall be
an unlimited general obligation of the director but
need not be secured and may be accepted without
reference to financial ability to make the
repayment.

(3) Payments under this subsection shall be
made as provided by the charter, bylaws, or
contract or as specified in subsection (e) of this
section.

(g) The indemnification and advancement of
expenses provided or authorized by this section may
not be deemed exclusive of any other rights, by
indemnification or otherwise, to which a director
may be entitled under the charter, the bylaws, a
resolution of stockholders or directors, an
agreement or otherwise, both as to action in an
official capacity and as to action in another
capacity while holding such office.

(h) This section does not limit the
corporation's power to pay or reimburse expenses
incurred by a director in connection with an
appearance as a witness in a proceeding at a time
when the director has not been made a named
defendant or respondent in the proceeding.

(i) For purposes of this section:

C-9

<PAGE>

(1) The corporation shall be deemed to have
requested a director to serve an employee benefit
plan where the performance of the director's duties
to the corporation also imposes duties on, or
otherwise involves services by, the director to the
plan or participants or beneficiaries of the plan:

(2) Excise taxes assessed on a director with
respect to an employee benefit plan pursuant to
applicable law shall be deemed fines; and

(3) Action taken or omitted by the director
with respect to an employee benefit plan in the
performance of the director's duties for a purpose
reasonably believed by the director to be in the
interest of the participants and beneficiaries of
the plan shall be deemed to be for a purpose which
is not opposed to the best interests of the
corporation.

(j) Unless limited by the charter:

(1) An officer of the corporation shall be
indemnified as and to the extent provided in
subsection (d) of this section for a director and
shall be entitled, to the same extent as a
director, to seek indemnification pursuant to the
provisions of subsection (d);

(2) A corporation may indemnify and advance
expenses to an officer, employee, or agent of the
corporation to the same extent that it may
indemnify directors under this section; and

(3) A corporation, in addition, may indemnify
and advance expenses to an officer, employee, or
agent who is not a director to such further extent,
consistent with law, as may be provided by its
charter, bylaws, general or specific action of its
board of directors or contract.

(k)(1) A corporation may purchase and
maintain insurance on behalf of any person who is
or was a director, officer, employee, or agent of
the corporation, or who, while a director, officer,
employee, or agent of the corporation, is or was
serving at the request, of the corporation as a
director, officer, partner, trustee, employee, or
agent of another foreign or domestic corporation,
partnership, joint venture, trust, other
enterprise, or employee benefit plan against any

C-10

<PAGE>

liability asserted against and incurred by such
person in any such capacity or arising out of such
person's position, whether or not the corporation
would have the power to indemnify against liability
under the provisions of this section.

(2) A corporation may provide similar
protection, including a trust fund, letter of
credit, or surety bond, not inconsistent with this
section.

(3) The insurance or similar protection may
be provided by a subsidiary or an affiliate of the
corporation.

(l) Any indemnification of, or advance of
expenses to, a director in accordance with this
section, if arising out of a proceeding by or in
the right of the corporation, shall be reported in
writing to the stockholders with the notice of the
next stockholders' meeting or prior to the
meeting."

Article SEVENTH of the Registrant's Articles of
Restatement of Articles of Incorporation reads as
follows:

"(8)(d) Nothing in this section (8) shall be
deemed to protect or purport to protect any
director or officer of the Corporation against any
liability to the Corporation or its securityholders
to which such director, officer or employee would
otherwise be subject by reason of wilful
misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the
conduct of his office.

"(11) A director or officer of the
Corporation shall not be liable to the Corporation
or its stockholders for monetary damages for breach
of fiduciary duty as a director or officer, except
to the extent such exemption from liability or
limitation thereof is not permitted by law
(including the Investment Company Act of 1940) as
currently in effect or as the same may hereafter be
amended. No amendment, modification or repeal of
this Article SEVENTH shall adversely affect any
right or protection of a director or officer that
exists at the time of such amendment, modification
or repeal."

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<PAGE>

The Investment Advisory Agreement between Registrant and
Alliance Capital Management L.P. provides that Alliance
Capital Management L.P. will not be liable under such
agreements for any mistake of judgment or in any event
whatsoever except for lack of good faith and that nothing
therein will be deemed to protect, or purport to protect,
Alliance Capital Management L.P. against any liability to
Registrant or its security holders to which it would
otherwise be subject by reason of wilful misfeasance, bad
faith or gross negligence in the performance of its duties
thereunder, or by reason of reckless disregard of its
obligations and duties thereunder.

The Distribution Services Agreement between the Registrant
and Alliance Fund Distributors, Inc. provides that the
Registrant will indemnify, defend and hold Alliance Fund
Distributors, Inc., and any person who controls it within the
meaning of Section 15 of the Investment Company Act of 1940,
free and harmless from and against any and all claims,
demands, liabilities and expenses which Alliance Fund
Distributors, Inc. or any controlling person may incur
arising out of or based upon any alleged untrue statement of
a material fact contained in Registrant's Registration
Statement, Prospectus or Statement of Additional Information
or arising out of, or based upon any alleged omission to
state a material fact required to be stated in any one of the
foregoing or necessary to make the statements in any one of
the foregoing not misleading provided that in no event will
anything therein contained by so construed as to protect
Alliance Fund Distributors, Inc. against any liability to the
Registrant or its security holders to which it would
otherwise be subject by reason of willful misfeasance, bad
faith or gross negligence in the performance of its duties or
by reason of reckless disregard of its obligations and duties
thereunder.

The foregoing summaries are qualified by the entire text of
Registrant's Articles of Restatement of Articles of
Incorporation, the Investment Advisory Agreement between
Registrant and Alliance Capital Management L.P. and the
Distribution Services Agreement between Registrant and
Alliance Fund Distributors, Inc.

Insofar as indemnification for liabilities arising under the
Securities Act of 1933 (the ("Securities Act") may be
permitted to directors, officer and controlling persons of
the Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that, in the
opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the

C-12

<PAGE>

event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of
expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful
defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection
with the securities being registered, the Registrant will,
unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of
appropriate jurisdiction the question of whether such
indemnification by it is against public policy as expressed
in the Securities Act and will be governed by the final
adjudication of such issue.

In accordance with Release No. IC-11330 (September 2, 1980),
the Registrant will indemnify its directors, officers,
investment manager and principal underwriters only if (1) a
final decision on the merits was issued by the court or other
body before whom the proceeding was brought that the person
to be indemnified (the "indemnitee") was not liable by reason
or willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of
his office ("disabling conduct") or (2) a reasonable
determination is made, based upon a review of the facts, that
the indemnitee was not liable by reason of disabling conduct,
by (a) the vote of a majority of a quorum of the directors
who are neither "interested persons" of the Registrant as
defined in section 2(a)(19) of the Investment Company Act of
1940 nor parties to the proceeding ("disinterested, non-party
directors"), or (b) an independent legal counsel in a written
opinion. The Registrant will advance attorneys fees or other
expenses incurred by its directors, officers, investment
adviser or principal underwriters in defending a proceeding,
upon the undertaking by or on behalf of the indemnitee to
repay the advance unless it is ultimately determined that he
is entitled to indemnification and, as a condition to the
advance, (1) the indemnitee shall provide a security for his
undertaking, (2) the Registrant shall be insured against
losses arising by reason of any lawful advances, or (3) a
majority of a quorum of disinterested, non-party directors of
the Registrant, or an independent legal counsel in a written
opinion, shall determine, based on a review of readily
available facts (as opposed to a full trial-type inquiry),
that there is reason to believe that the indemnitee
ultimately will be found entitled to indemnification.

Section 11 of the Registrant's Amended By-laws reads as follows:

"Section 11. Indemnification of Directors and Officers.
The Corporation shall indemnify to the fullest extent
permitted by law (including the Investment Company Act

C-13

<PAGE>

of 1940) as currently in effect or as the same may
hereafter be amended, any person made or threatened to
be made a party to any action, suit or proceeding,
whether criminal, civil, administrative or
investigative, by reason of the fact that such person or
such person's testator or intestate is or was a director
or officer of the Corporation or serves or served at the
request of the Corporation any other enterprise as a
director or officer. To the fullest extent permitted by
law (including the Investment Company Act of 1940) as
currently in effect or as the same may hereafter be
amended, expenses incurred by any such person in
defending any such action, suit or proceeding shall be
paid or reimbursed by the Corporation promptly upon
receipt by it of an undertaking of such person to repay
such expenses if it shall ultimately be determined that
such person is not entitled to be indemnified by the
Corporation. The rights provided to any person by this
Section 11, shall be enforceable against the Corporation
by such person who shall be presumed to have relied upon
it in serving or continuing to serve as a director or
officer as provided above. No amendment of this Section
11 shall impair the rights of any person arising at any
time with respect to events occurring prior to such
amendment. For purposes of this Section 11, the term
"Corporation" shall include any predecessor of the
Corporation and any constituent corporation (including
any constituent of a constituent) absorbed by the
Corporation in a consolidation or merger; the term
"other enterprise" shall include any corporation,
partnership, joint venture, trust or employee benefit
plan; service "at the request of the Corporation" shall
include service as a director or officer of the
Corporation which imposes duties on, or involves
services by, such director or officer with respect to an
employee benefit plan, its participants or
beneficiaries; any excise taxes assessed on a person
with respect to an employee benefit plan shall be deemed
to be indemnifiable expenses; and action by a person
with respect to any employee benefit plan which such
person reasonably believes to be in the interest of the
participants and beneficiaries of such plan shall be
deemed to be action not opposed to the best interests of
the Corporation."

The Registrant participates in a joint directors and
officers liability insurance policy issued by the ICI
Mutual Insurance Company. Coverage under this policy
has been extended to directors, trustees and officers
of the investment companies managed by Alliance Capital
Management L.P. Under this policy, outside trustees and

C-14

<PAGE>

directors are covered up to the limits specified for any
claim against them for acts committed in their
capacities as trustee or director. A pro rata share of
the premium for this coverage is charged to each
investment company and to the Adviser.

ITEM 28. Business and Other Connections of Adviser.

The descriptions of Alliance Capital Management L.P.
under the captions "Management of the Fund" in the
Prospectus and in the Statement of Additional
Information constituting Parts A and B, respectively, of
this Registration Statement are incorporated by
reference herein.

The information as to the directors and executive
officers of Alliance Capital Management L.P., set forth
in Alliance Capital Management L.P.'s Form ADV filed
with the Securities and Exchange Commission on April 21,
1988 (File No. 801-32361) and amended through the date
hereof, is incorporated by reference.

ITEM 29. Principal Underwriters

(a) Alliance Fund Distributors, Inc. the Registrant's Principal
Underwriter in connection with the sale of shares of the
Registrant, also acts as Principal Underwriter or Distributor
for the following investment companies:

ACM Institutional Reserves, Inc.
AFD Exchange Reserves, Inc.
The Alliance Fund, Inc.
Alliance All-Asia Investment Fund, Inc.
Alliance Balanced Shares, Inc.
Alliance Bond Fund, Inc.
Alliance Capital Reserves
Alliance Counterpoint Fund
Alliance Developing Markets Fund, Inc.
Alliance Global Fund
Alliance Global Small Cap Fund, Inc.
Alliance Government Reserves
Alliance Growth and Income Fund, Inc.
Alliance Income Builder Fund, Inc.
Alliance International Fund
Alliance Mortgage Securities Income Fund, Inc.
Alliance Mortgage Strategy Trust, Inc.
Alliance Multi-Market Income Trust, Inc.
Alliance Multi-Market Strategy Trust, Inc.
Alliance Municipal Income Fund, Inc.
Alliance Municipal Income Fund, II
Alliance Municipal Trust

C-15

<PAGE>

Alliance New Europe Fund
Alliance North American Government Income Trust, Inc.
Alliance Premier Growth Fund, Inc.
Alliance Quasar Fund, Inc.
Alliance Short-Term Multi-Market Trust, Inc.
Alliance Technology Fund, Inc.
Alliance Utility Income Fund, Inc.
Alliance Variable Products Series Fund, Inc.
Alliance World Income Trust, Inc.
Alliance Worldwide Privatization Fund, Inc.
Fiduciary Management Associates
The Hudson River Trust, Inc.
The Alliance Portfolios

(b) The following are the Directors and Officers of Alliance Fund
Distributors, Inc., the principal place of business of which
is 1345 Avenue of the Americas, New York, New York, 10105.

C-16

<PAGE>

Positions and Positions and
Offices With Offices With
Name Underwriter Registrant
____ ____________ _____________

Michael J. Laughlin Chairman

Robert L. Errico President

Kimberly A. Baumgardner Senior Vice President

Daniel J. Dart Senior Vice President

Byron M. Davis Senior Vice President

Geoffrey L. Hyde Senior Vice President

Barbara J. Krumsiek Senior Vice President

William F. O'Grady Senior Vice President

Dusty W. Paschall Senior Vice President

Antonios G. Poleonadkis Senior Vice President

Richard K. Saccullo Senior Vice President

Gregory K. Shannahan Senior Vice President

Peter J. Szabo Senior Vice President

Richard A. Winge Senior Vice President

Jim A. Yockey Senior Vice President

Edmund P. Bergan, Jr. Senior Vice President, Secretary
Secretary and General Counsel

Robert H. Joseph Vice President & Controller

Stacia D. Petrou Vice President & Treasurer

Michael T. Anderson Vice President

Kenneth F. Barkoff Vice President

William P. Beanblossom Vice President

Kevin T. Cannon Vice President

Mark J. Dunbar Vice President

C-17

<PAGE>

Deirdre E. Duffy Vice President

Linda A. Finnerty Vice President

Sheila M. Flynn Vice President

Robert M. Frank Vice President

Gerard J. Friscia Vice President

Andrew Gangolf Vice President Assistant
Secretary

Mark D. Gersten Vice President Treasurer
and Chief
Financial
Officer

Troy L. Glawe Vice President

James E. Gunter Vice President

Alan Halfenger Vice President

Steven P. Hecht Vice President

George R. Hrabovsky Vice President

Valerie J. Hugo Vice President

Mark H. Huston Vice President

Marek E. Lakotko Vice President

Sheila F. Lamb Vice President

Stephen R. Laut Vice President

Thomas Leavitt, III Vice President

Christopher J. MacDonald Vice President

John A. McClain Vice President

Gregory T. McCombs Vice President

Daniel D. McGinley Vice President

Matthew P. Mintzer Vice President

Nicole M. Nolan Vice President

C-18

<PAGE>

Robert T. Pigozzi Vice President

Domenick Pugliese Vice President

Bruce W. Reitz Vice President

Joseph F. Sumanski Vice President

Nicholas K. Willett Vice President

Richard D. Allen Assistant Vice President

Warren W. Babcock III Assistant Vice President

Benji A. Baer Assistant Vice President

Casimir F. Bolanowski Assistant Vice President

Maria L. Carreras Assistant Vice President

Leo H. Cook Assistant Vice President

John W. Cronin Assistant Vice President

Richard W. Dabney Assistant Vice President

Gerard P. DiSalvo Assistant Vice President

Sohaila S. Farsheed Assistant Vice President

Leon M. Fern Assistant Vice President

William C. Fisher Assistant Vice President

Joseph W. Gibson Assistant Vice President

James E. Gunter Assistant Vice President

William B. Hanigan Assistant Vice President

Alan C. Hanson Assistant Vice President

Vicky M. Hayes Assistant Vice President

Daniel M. Hazard Assistant Vice President

John C. Hershock Assistant Vice President

Kenneth R. Hill Assistant Vice President

William C. Howard Assistant Vice President

C-19

<PAGE>

Thomas K. Intoccia Assistant Vice President

Edward W. Kelly Assistant Vice President

Donna M. Lamback Assistant Vice President

David P. Lambert Assistant Vice President

Nicholas J. Lapi Assistant Vice President

Michael F. Mahoney Assistant Vice President

Renate S. Mars Assistant Vice President

Daniel G. McCabe Assistant Vice President

Shawn P. McClain Assistant Vice President

Maura A. McGrath Assistant Vice President

Paul J. McIntyre Assistant Vice President

Kevin M. McLoughlin Assistant Vice President

Charles R. Mechler Assistant Vice President

Thomas F. Monnerat Assistant Vice President

Mark A. Moore Assistant Vice President

Joanna D. Murray Assistant Vice President

Jeanette M. Nardella Assistant Vice President

William E. Noe Assistant Vice President

Marilyn I. Noonan Assistant Vice President

Robert E. Powers Assistant Vice President

Patrick J. Pung Assistant Vice President

Carol H. Rappa Assistant Vice President

Karen C. Satterberg Assistant Vice President

Raymond S. Scalfani Assistant Vice President

Rodney J. Schull Assistant Vice President

Robert M. Smith Assistant Vice President

C-20

<PAGE>

William J. Strott Assistant Vice President

Joseph T. Tocyloski Assistant Vice President

Neil B. Wood Assistant Vice President

Mark R. Manley Assistant Secretary

ITEM 30. Location of Accounts and Records.

The majority of the accounts, books and other documents
required to be maintained by Section 31(a) of the
Investment Company Act of 1940 and the Rules thereunder
are maintained as follows: journals, ledgers,
securities records and other original records are
maintained principally at the offices of Alliance Fund
Services, Inc., 500 Plaza Drive, Secaucus, New Jersey
07094-1520 and at the offices of State Street Bank and
Trust Company, the Registrant's Custodian, 225 Franklin
Street, Boston, Massachusetts 02110. All other records
so required to be maintained are maintained at the
offices of Alliance Capital Management L.P., 1345 Avenue
of the Americas, New York, New York, 10105.

ITEM 31. Management Services.

Not applicable.

ITEM 32. Undertakings

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

C-21

<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of
1933, as amended, and the Investment Company Act of 1940, as
amended, the Registrant certifies that it meets all of the
requirements for effectiveness of this Amendment to its
Registration Statement pursuant to Rule 485(b) under the
Securities Act of 1933 and has duly caused this Amendment to its
Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in The City of New York
and the State of New York, on the 1st day of June, 1995.

ALLIANCE BALANCED SHARES, INC.

By /s/ John D. Carifa
___________________________
John D. Carifa
Chairman and President

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

Signature Title Date
_________ _____ ____

(1) Principal Executive
Officer

/s/ John D. Carifa Chairman June 1, 1995
___________________________
John D. Carifa

(2) Principal Financial and
Accounting Officer

/s/ Mark D. Gersten Treasurer June 1, 1995
____________________________
Mark D. Gersten

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<PAGE>

(3) All of the Directors
____________________________
Ruth Block
John D. Carifa
David H. Dievler
John H. Dobkin
William H. Foulk, Jr.
James M. Hester
Clifford L. Michel
Robert C. White

by /s/ Edmund P. Bergan, Jr. June 1, 1995
__________________________
(Attorney-in-fact)
Edmund P. Bergan, Jr.

C-23

<PAGE>

Index to Exhibits
__________________

Page
____

(11) Consent of Independent Auditors

(27) Financial Data Schedule

C-24
00250157.AS5

WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.

ALLIANCE BALANCED SHARES
ENDING JANUARY 31,1995
<ARTICLE> 6

<S> <C>
<PERIOD-TYPE> SEMI

<FISCAL-YEAR-END> JUL-31-1995
<PERIOD-END> JAN-31-1995
<INVESTMENTS-AT-COST> 170087582
<INVESTMENTS-AT-VALUE> 172300773
<RECEIVABLES> 1142148
<ASSETS-OTHER> 596373
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 174039294
<PAYABLE-FOR-SECURITIES> 8770315
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 388951
<TOTAL-LIABILITIES> 9159266
<SENIOR-EQUITY> 125446
<PAID-IN-CAPITAL-COMMON> 162927978
<SHARES-COMMON-STOCK> 164880028
<SHARES-COMMON-PRIOR> 178239121
<ACCUMULATED-NII-CURRENT> 647111
<OVERDISTRIBUTION-NII> 0
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<DIVIDEND-INCOME> 1166666
<INTEREST-INCOME> 2740657
<OTHER-INCOME> 0
<EXPENSES-NET> 1141103
<NET-INVESTMENT-INCOME> 2766220
<REALIZED-GAINS-CURRENT> (461547)
<APPREC-INCREASE-CURRENT> (2339810)
<NET-CHANGE-FROM-OPS> (35137)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 2515775
<DISTRIBUTIONS-OF-GAINS> 298070
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 8113713
<NUMBER-OF-SHARES-REDEEMED> 20904771
<SHARES-REINVESTED> 2280947
<NET-CHANGE-IN-ASSETS> (13359093)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> (271595)

<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 528991
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1141103
<AVERAGE-NET-ASSETS> 167897039
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0

00250157.AX2

</TABLE>

<PAGE>

Consent of Independent Accountants

We hereby consent to the use in the Statement of Additional
Information constituting part of this Post-Effective Amendment
No. 82 to the registration statement on Form N-1A (the
"Registration Statement") of our report dated September 20, 1994,
relating to the financial statements and financial highlights of
Alliance Balanced Shares, which appears in such Statement of
Additional Information, and to the incorporation by reference of
our report into the Prospectus which constitutes part of this
Registration Statement. We also consent to the references to us
under the headings "Statements and Reports" and "Independent
Accountants" in such Statement of Additional Information and to
the references to us under the heading "Financial Highlights" in
such Prospectus.

/s/ Price Waterhouse LLP

PRICE WATERHOUSE LLP
1177 Avenue of the Americas
New York, New York
May 31, 1995

00250157.AY5