File Nos. 811-3456
2-77207
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
[X]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 23 [X]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 23 [X]
(Check appropriate box or boxes.)
GENERAL GOVERNMENT SECURITIES MONEY MARKET FUND, INC.
(Exact Name of Registrant as Specified in Charter)
c/o The Dreyfus Corporation
200 Park Avenue, New York, New York 10166
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (212) 922-6000
Mark, N. Jacobs, Esq.
200 Park Avenue
New York, New York 10166
(Name and Address of Agent for Service)
It is proposed that this filing will become effective (check appropriate
box)
immediately upon filing pursuant to paragraph (b)
----
X on December 1, 1997 pursuant to paragraph (b)
----
60 days after filing pursuant to paragraph (a)(i)
----
on (date) pursuant to paragraph (a)(i)
----
75 days after filing pursuant to paragraph (a)(ii)
----
on (date) pursuant to paragraph (a)(ii) of Rule 485
----
If appropriate, check the following box:
this post-effective amendment designates a new effective date
for a previously filed post-effective amendment.
----
Registrant has registered an indefinite number of shares of its common
stock under the Securities Act of 1933 pursuant to Section 24(f) of the
Investment Company Act of 1940. Registrant's Rule 24f-2 Notice for the
fiscal year ended January 31, 1997 was filed on March 27, 1997.
General Government Securities Money Market Fund, Inc.
Cross-Reference Sheet Pursuant to Rule 495(a)
Items in
Part A of
Form N-1A Caption Page
_________ _______ ____
1 Cover Page Cover
2 Synopsis 4
3 Condensed Financial Information 5
4 General Description of Registrant 8
5 Management of the Fund 12
5(a) Management's Discussion of Fund's Performance *
6 Capital Stock and Other Securities 24
7 Purchase of Securities Being Offered 13
8 Redemption or Repurchase 19
9 Pending Legal Proceedings *
Items in
Part B of
Form N-1A
- ---------
10 Cover Page Cover
11 Table of Contents B-2
12 General Information and History B-1, 39
13 Investment Objectives and Policies B-3
14 Management of the Fund B-16
15 Control Persons and Principal B-20
Holders of Securities
16 Investment Advisory and Other B-21
Services
_____________________________________
NOTE: * Omitted since answer is negative or inapplicable.
General Government Securities Money Market Fund, Inc.
Cross-Reference Sheet Pursuant to Rule 495(a) (continued)
Items in
Part B of
Form N-1A Caption Page
_________ _______ _____
17 Brokerage Allocation B-38
18 Capital Stock and Other Securities B-39
19 Purchase, Redemption and Pricing B-23, B-28, B-34
of Securities Being Offered
20 Tax Status B-35
21 Underwriters B-1, B-20
22 Calculations of Performance Data B-36
23 Financial Statements B-40
Items in
Part C of
Form N-1A
_________
24 Financial Statements and Exhibits C-1
25 Persons Controlled by or Under C-3
Common Control with Registrant
26 Number of Holders of Securities C-3
27 Indemnification C-4
28 Business and Other Connections of C-5
Investment Adviser
29 Principal Underwriters C-10
30 Location of Accounts and Records C-13
31 Management Services C-13
32 Undertakings C-13
_____________________________________
NOTE: *Omitted since answer is negative or inapplicable.
- ----------------------------------------------------------------------------
COMBINED PROSPECTUS December 1, 1997
GENERAL GOVERNMENT SECURITIES MONEY MARKET FUND, INC.
GENERAL MONEY MARKET FUND, INC.
GENERAL CALIFORNIA MUNICIPAL MONEY MARKET FUND
GENERAL MUNICIPAL MONEY MARKET FUND, INC.
GENERAL NEW YORK MUNICIPAL MONEY MARKET FUND
CLASS A SHARES
- ----------------------------------------------------------------------------
General Government Securities Money Market Fund, Inc. (the
"Government Money Fund"), General Money Market Fund, Inc. (the "Money Fund"),
General California Municipal Money Market Fund (the "California Municipal
Fund"), General Municipal Money Market Fund, Inc. (the "National Municipal
Fund") and General New York Municipal Money Market Fund (the "New York
Municipal Fund") are open-end management investment companies, known as money
market mutual funds. Each Fund seeks to provide you with as high a level of
current income as is consistent with the preservation of capital and the
maintenance of liquidity. In addition, each of the California Municipal Fund,
the National Municipal Fund and the New York Municipal Fund seeks to provide
current income exempt from Federal income tax and, in the case of the
California Municipal Fund, exempt from State of California income taxes, and,
in the case of the New York Municipal Fund, exempt from New York State and
New York City income taxes.
THE DREYFUS CORPORATION PROFESSIONALLY MANAGES EACH FUND'S PORTFOLIO.
AN INVESTMENT IN THE FUNDS IS NEITHER INSURED NOR GUARANTEED BY THE
U.S. GOVERNMENT. THERE CAN BE NO ASSURANCE THAT THE FUNDS WILL BE ABLE TO
MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE.
Since each of the California Municipal Fund and the New York
Municipal Fund may invest a significant portion of its assets in a single
issuer, an investment in these Funds may involve greater risk than
investments in certain other types of money market funds.
(cover page continued on next page)
THIS PROSPECTUS SETS FORTH CONCISELY INFORMATION ABOUT EACH FUND THAT
YOU SHOULD KNOW BEFORE INVESTING. IT SHOULD BE READ AND RETAINED FOR FUTURE
REFERENCE.
A STATEMENT OF ADDITIONAL INFORMATION, DATED DECEMBER 1, 1997, WHICH
MAY BE REVISED FROM TIME TO TIME, PROVIDES A FURTHER DISCUSSION OF CERTAIN
AREAS IN THIS PROSPECTUS AND OTHER MATTERS WHICH MAY BE OF INTEREST TO SOME
INVESTORS. IT HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION AND
IS INCORPORATED HEREIN BY REFERENCE. THE SECURITIES AND EXCHANGE COMMISSION
MAINTAINS A WEB SITE (HTTP://WWW.SEC.GOV) THAT CONTAINS THE STATEMENT OF
ADDITIONAL INFORMATION, MATERIAL INCORPORATED BY REFERENCE, AND OTHER
INFORMATION REGARDING THE FUNDS. FOR A FREE COPY OF THE STATEMENT OF
ADDITIONAL INFORMATION, WRITE TO A FUND AT 144 GLENN CURTISS BOULEVARD,
UNIONDALE, NEW YORK 11556-0144, OR CALL 1-800-645-6561. WHEN TELEPHONING, ASK
FOR OPERATOR 144.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
OR ENDORSED BY, ANY BANK, AND ARE NOT FEDERALLY INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER
AGENCY. MONEY MARKET MUTUAL FUND SHARES INVOLVE CERTAIN INVESTMENT RISKS,
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
- ----------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
- ----------------------------------------------------------------------------
(CONTINUED FROM COVER PAGE)
YOU CAN INVEST, REINVEST OR REDEEM SHARES AT ANY TIME WITHOUT CHARGE
OR PENALTY IMPOSED BY A FUND.
FUND SHARES MAY BE PURCHASED ONLY BY CLIENTS OF SERVICE AGENTS AS
DESCRIBED HEREIN. BY THIS PROSPECTUS, EACH FUND IS OFFERING CLASS A SHARES.
ANOTHER CLASS OF FUND SHARES - CLASS B SHARES - ARE OFFERED BY THE FUNDS
PURSUANT TO A SEPARATE PROSPECTUS AND ARE NOT OFFERED HEREBY. CLASS A AND
CLASS B SHARES ARE IDENTICAL, EXCEPT AS TO THE SERVICES OFFERED TO, AND THE
EXPENSES BORNE BY, EACH CLASS WHICH MAY AFFECT PERFORMANCE. IF YOU WOULD LIKE
TO OBTAIN INFORMATION ABOUT CLASS B SHARES, PLEASE WRITE TO THE ADDRESS OR
CALL THE NUMBER SET FORTH ON THE COVER PAGE.
EACH FUND IS A SEPARATE ENTITY WITH A SEPARATE PORTFOLIO. THE
OPERATIONS AND RESULTS OF ONE FUND ARE UNRELATED TO THOSE OF EACH OTHER FUND.
THIS COMBINED PROSPECTUS HAS BEEN PREPARED FOR YOUR CONVENIENCE TO PROVIDE
YOU THE OPPORTUNITY TO CONSIDER FIVE INVESTMENT CHOICES IN ONE DOCUMENT.
TABLE OF CONTENTS
Page
Annual Fund Operating Expenses........................... 4
Condensed Financial Information.......................... 5
Yield Information........................................ 7
Description of the Funds................................. 8
Management of the Funds.................................. 12
How to Buy Shares........................................ 13
Shareholder Services..................................... 16
How to Redeem Shares..................................... 19
Service Plan............................................. 22
Shareholder Services Plan................................ 22
Dividends, Distributions and Taxes....................... 22
General Information...................................... 24
Appendix................................................. 26
[Page 2]
[This Page Intentionally Left Blank]
[Page 3]
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average daily net assets)
GOVERNMENT
MONEY MONEY
FUND FUND
_________ _________
<S> <C> <C>
Management Fees.......................................................... .50% .50%
12b-1 Fees............................................................... .20% .20%
Other Expenses........................................................... .12% .14%
Total Fund Operating Expenses............................................ .82% .84%
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
EXAMPLE:
You would pay the following expenses on
a $1,000 investment, assuming (1) 5% annual
return and (2) redemption at the end of
each time period:
1 YEAR $ 8 $ 9
3 YEARS $ 26 $ 27
5 YEARS $ 46 $ 47
10 YEARS $101 $104
</TABLE>
<TABLE>
<CAPTION>
CALIFORNIA NATIONAL NEW YORK
MUNICIPAL MUNICIPAL MUNICIPAL
FUND FUND FUND
________ ________ ________
<S> <C> <C> <C>
Management Fees............................................ .50% .50% .50%
12b-1 Fees................................................... .None .None .None
Other Expenses............................................... .14% .16% ..18%
Total Fund Operating Expenses............................... .64% .66% ..68%
EXAMPLE:
You would pay the following expenses on
a $1,000 investment, assuming (1) 5% annual
return and (2) redemption at the end of
each time period:
1 YEAR $ 7 $ 7 $ 7
3 YEARS $20 $21 $22
5 YEARS $36 $37 $38
10 YEARS $80 $82 $85
</TABLE>
THE AMOUNTS LISTED IN THE EXAMPLE SHOULD NOT BE CONSIDERED AS
REPRESENTATIVE OF PAST OR FUTURE EXPENSES AND ACTUAL EXPENSES MAY BE GREATER
OR LESS THAN THOSE INDICATED. MOREOVER, WHILE THE EXAMPLE ASSUMES A 5% ANNUAL
RETURN, EACH FUND'S ACTUAL PERFORMANCE WILL VARY AND MAY RESULT IN AN ACTUAL
RETURN GREATER OR LESS THAN 5%.
The purpose of the foregoing tables is to assist you in understanding
the costs and expenses borne by each Fund, the payment of which will reduce
investors' annual return. The information in the foregoing tables does not
reflect any fee waivers or expense reimbursement arrangements that may be in
effect. Certain Service Agents (as defined below) may charge their clients
direct fees for effecting transactions in Fund shares; such fees are not
reflected in the foregoing table. See "Management of the Funds," "How to Buy
Shares," "Service Plan" and "Shareholder Services Plan."
[Page 4]
CONDENSED FINANCIAL INFORMATION
The information in the following tables has been audited (except
where noted) by Ernst & Young LLP, each Fund's independent auditors. Further
financial data, related notes and report of independent auditors for each
Fund accompany the Statement of Additional Information, available upon
request.
FINANCIAL HIGHLIGHTS
Government Money Fund _ Contained below is per share operating performance
data for a Class A share of Common Stock outstanding, total investment
return, ratios to average net assets and other supplemental data for each
period indicated. This information has been derived from the Government Money
Fund's financial statements.
<TABLE>
<CAPTION>
GOVERNMENT MONEY FUND
_______________________________________________________________________________________________________
SIX MONTHS
ENDED
FISCAL YEAR ENDED JULY 31,
JANUARY 31, (UNAUDITED)
_______________________________________________________________________________________________________
PER SHARE DATA: 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1997
_____ _____ _____ _____ _____ ______ _____ _____ ______ ______ ______
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
_____ _____ _____ _____ _____ ______ _____ _____ ______ ______ ______
INVESTMENT OPERATIONS:
Investment
income-net .058 .068 .082 .072 .053 .033 .027 .038 .052 .047 0.23
_____ _____ _____ _____ _____ ______ _____ _____ ______ ______ ______
DISTRIBUTIONS:
Dividends from
investment
income-net...... (.058) (.068) (.082) (.072) (.053) (.033) (.027) (.038) (.052) (.047) (0.23)
_____ _____ _____ _____ _____ ______ _____ _____ ______ ______ ______
Net asset value,
end of period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
===== ===== ====== ======== ======= ====== ======= ======= ======== ====== ======
TOTAL INVESTMENT
RETURN 5.96% 6.99% 8.56% 7.42% 5.46% 3.36% 2.69% 3.90% 5.35% 4.75% 4.76%*
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses
to average
net assets......... .83% .87% .87% .86% .82% .82% .81% .83% .84% .82% .83%*
Ratio of net
investment income
to average
net assets 5.80% 6.74% 8.23% 7.14% 5.27% 3.28% 2.66% 3.82% 5.22% 4.65% 4.71%*
Net Assets,
end of period
(000's omitted) $292,204 $263,130 $306,610 $408,817 $609,015 $725,419 $536,884 $513,345 $530,054 $519,861 $526,357
* Annualized.
</TABLE>
<TABLE>
<CAPTION>
Money Fund _ Contained below is per share operating performance data for a
Class A share of Common Stock outstanding, total
investment return, ratios to average net assets and other supplemental data
for each period indicated. This information has been derived from the Money
Fund's financial statements.
MONEY FUND
_______________________________________________________________________________________________________
SIX MONTHS
ENDED
FISCAL YEAR ENDED JULY 31,
JANUARY 31, (UNAUDITED)
________________________________________________________________________________________________________
PER SHARE DATA: 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1997
_____ _____ _____ _____ _____ ______ _____ _____ ______ ______ ______
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning
of period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
_____ _____ _____ _____ _____ ______ _____ _____ ______ ______ ______
Investment Operations:
Investment income_net .060 .069 .085 .074 .055 .032 .025 .037 .053 .047 .024
_____ _____ _____ _____ _____ ______ _____ _____ ______ ______ ______
Distributions:
Dividends from
investment
income_net.. (.060) (.069) (.085) (.074) (.055) (.032) (.025) (.037) (.053) (.047) (.024)
_____ _____ _____ _____ _____ ______ _____ _____ ______ ______ ______
Net asset value,
end of period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
===== ===== ====== ======== ======= ====== ======= ======= ======== ====== ======
TOTAL INVESTMENT
RETURN 6.15% 7.10% 8.80% 7.64% 5.61% 3.26% 2.56% 3.75% 5.42% 4.81% 4.90%*
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to
average net assets .95% .97% .93% .91% .92% .95% .94% .94% .86% .84% .86%*
Ratio of net investment
income to
average net assets 6.00% 6.84% 8.43% 7.39% 5.44% 3.22% 2.53% 3.68% 5.28% 4.71% 4.84%*
Decrease reflected in
above expense
ratios due to
undertakings
by The Dreyfus
Corporation __ __ __ __ __ __ .02% .04% .01% __ __
Net Assets, end
of period
(000's omitted). $763,441 $710,810 $915,548 $677,257 $845,690 $688,785 $616,072. $572,116 $654,581 $764,119 $759,013
* Annualized.
</TABLE>
[Page 5]
<TABLE>
<CAPTION>
CALIFORNIA MUNICIPAL FUND _ Contained below is per share operating performance
data for a Class A share of beneficial interest outstanding, total investment
return, ratios to average net assets and other supplemental data for each year
indicated. This information has been derived from the California Municipal
Fund's financial statements.
CALIFORNIA MUNICIPAL FUND
______________________________________________________________________________________________
FISCAL YEAR ENDED
JULY 31,,
______________________________________________________________________________________________
PER SHARE DATA: 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997
_____ _____ _____ _____ _____ ______ _____ _____ ______ ______
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value,
beginning of year $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $ 1.00 $1.00 $1.00
_____ _____ _____ _____ _____ ______ _____ _____ ______ ______
INVESTMENT OPERATIONS:
Investment income_net .045 .053 .058 .052 .036 .024 .023 .031 .029 .029
_____ _____ _____ _____ _____ ______ _____ _____ ______ ______
DISTRIBUTIONS:
Dividends from
investment
income_net..... (.045) (.053) (.058) (.052) (.036) (.024) (.023) (.031) (.029) (.029)
_____ _____ _____ _____ _____ ______ _____ _____ ______ ______
Net asset value,
end of year $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
===== ===== ====== ======== ======= ====== ======= ======= ======== ======
TOTAL INVESTMENT
RETURN....... 4.62% 5.46% 5.93% 5.29% 3.65% 2.46% 2.27% 3.14% 2.94% 2.95%
RATIOS / SUPPLEMENTAL DATA:
Ratio of expenses to
average net assets ..50% .76% .07% .02% .20% .33% .33% .52% .65% .64%
Ratio of net investment
income
to average
net assets 4.48% 5.29% 5.78% 5.08% 3.59% 2.43% 2.24% 3.07% 2.91% 2.91%
Decrease reflected
in above expense
ratios due to
undertakings by
The Dreyfus
Corporation .21% __ .65% .59% .41% .30% .28% .11% __ __
Net Assets,
end of year
(000's omitted) $109,037 $77,372 $281,909 $538,978 $549,383 $608,534 $699,105..$463,404 $390,155 $327,226
</TABLE>
<TABLE>
<CAPTION>
NATIONAL MUNICIPAL FUND _ Contained below is per share operating performance
data for a Class A share of Common Stock outstanding, total investment return,
ratios to average net assets and other supplemental data for each period
indicated. This information has been derived from the National Municipal Fund's
financial statements.
NATIONAL MUNICIPAL FUND
_______________________________________________________________________________________________________
SIX MONTHS
ENDED
FISCAL YEAR ENDED JULY 31,
NOVEMBER 30, (UNAUDITED)
________________________________________________________________________________________________________
PER SHARE DATA: 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997
_____ _____ _____ _____ _____ ______ _____ _____ ______ ______ ______
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value,
beginning
of period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
_____ _____ _____ _____ _____ ______ _____ _____ ______ ______ ______
INVESTMENT OPERATIONS:
Investment
income_net. .039 .046 .057 .054 .043 .027 .021 .023 .034 .029 .015
DISTRIBUTIONS:
Dividends from
investment
income _ net....... (.039) (.046) (.057) (.054) (.043) (.027) (.021) (.023) (.034) (.029) (.015)
_____ _____ _____ _____ _____ ______ _____ _____ ______ ______ ______
Net asset value,
end of period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
===== ===== ====== ======== ======= ====== ======= ======= ======== ====== =======
TOTAL INVESTMENT
RETURN.. 4.01% 4.68% 5.89% 5.51% 4.36% 2.74% 2.10% 2.27% 3.41% 2.97% 3.03%*
RATIOS / SUPPLEMENTAL
DATA:
Ratio of expenses to
average net assets . .59% .62% .64% .62% .62% .64% .63% .64% .66% .66% .65%*
Ratio of net
investment income
to average
net assets.. 3.92% 4.55% 5.74% 5.39% 4.30% 2.71% 2.08% 2.22% 3.35% 2.93% 3.01%*
Net Assets, end of period
(000's omitted). $526,063 $394,583 $343,917 $352,320 $342,595 $397,912 $352,147 $294,711 $294,379 $256,862 $240,814
* Annualized.
</TABLE>
<TABLE>
<CAPTION>
[Page 6]
New York Municipal Fund _ Contained below is per share operating performance
data for a Class A share of beneficial interest
outstanding, total investment return, ratios to average net assets and other
supplemental data for each period indicated. This information has been
derived from the New York Municipal Fund's financial statements.
NEW YORK MUNICIPAL FUND
_______________________________________________________________________________________________________
SIX MONTHS
ENDED
FISCAL YEAR ENDED MAY 31,
NOVEMBER 30, (UNAUDITED)
________________________________________________________________________________________________________
PER SHARE DATA: 1987(1) 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997
_____ _____ _____ _____ _____ ______ _____ _____ ______ ______ ______
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value,
beginning
of period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
_____ _____ _____ _____ _____ ______ _____ _____ ______ ______ ______
INVESTMENT OPERATIONS:
Investment income-net .042 .043 .052 .056 .044 .028 .020 .023 .032 .028 .014
_____ _____ _____ _____ _____ ______ _____ _____ ______ ______ ______
DISTRIBUTIONS:
Dividends from
investment
income-net....... (.042) (.043) (.052) (.056) (.044) (.028) (.020) (.023) (.032) (.028) (.014)
_____ _____ _____ _____ _____ ______ _____ _____ ______ ______ ______
Net asset value,
end of period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
===== ===== ====== ======== ======= ====== ======= ======= ======== ====== =======
TOTAL INVESTMENT
RETURN.. 4.28%(2 )4.34% 5.36% 5.76% 4.45% 2.78% 2.00% 2.34% 3.28% 2.84% 2.87%(2)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to
average net assets .11%(2) .50% .75% __ .09% .25% .32% .34% .58% .68% .68%(2)
Ratio of net
investment income
to average
net assets 4.28%(2) 4.22% 5.97% 5.58% 4.44% 2.99% 1.98% 2.33% 3.23% 2.80% 2.86%(2)
Decrease reflected
in above
expense ratios due
to undertakings
by The Dreyfus
Corporation .73%(2) .27% .15% .66% .55% .38% .35% .32% .05% __ __
Net Assets,
end of period
(000's omitted). $54,782 $62,140 $49,335 $500,947 $586,93 $630,899 $612,441. $689,918 $636,013 $507,537$ 494,778
(1) From December 2, 1986 (commencement of operations) to November 30, 1987.
(2) Annualized.
</TABLE>
YIELD INFORMATION
From time to time, each Fund advertises its yield and effective
yield. Both yield figures are based on historical earnings and are not
intended to indicate future performance. It can be expected that these yields
will fluctuate substantially. A Fund's yield refers to the income generated
by an investment in such Fund over a seven-day period (which period will be
stated in the advertisement). This income is then "annualized." That is, the
amount of income generated by the investment during that week is assumed to
be generated each week over a 52-week period and is shown as a percentage of
the investment. The effective yield is calculated similarly, but, when
annualized, the income earned by an investment in the Fund is assumed to be
reinvested. The effective yield will be slightly higher than the yield
because of the compounding effect of this assumed reinvestment. A Fund's
yield and effective yield may reflect absorbed expenses pursuant to any
undertaking that may be in effect. See "Management of the Funds."
As to the California Municipal Fund, the National Municipal Fund and
the New York Municipal Fund (collectively, the "Municipal Funds"), tax
equivalent yield is calculated by determining the pre-tax yield which, after
being taxed at a stated rate (in the case of the California Municipal Fund
and New York Municipal Fund typically the highest combined Federal and
California, or New York State and New York City, respectively, personal
income tax rates), would be equivalent to a stated yield or effective yield
calculated as described above.
Yield information is useful in reviewing a Fund's performance, but
because yields will fluctuate, under certain conditions such information may
not provide a basis for comparison with domestic bank deposits, other
investments which pay a fixed yield for a stated period of time, or other
investment companies which may use a different method of computing yield.
[Page 7]
Comparative performance information may be used from time to time in
advertising or marketing Fund shares, including data
from Lipper Analytical Services, Inc., Bank Rate Monitortrademark, N. Palm
Beach, Fla. 33408, IBC's Money Fund ReportTM, Morningstar, Inc. and other
industry publications.
DESCRIPTION OF THE FUNDS
INVESTMENT OBJECTIVE
The investment objective of the Government Money Fund and the Money
Fund is to provide you with as high a level of current income as is
consistent with the preservation of capital and, in the case of the
Government Money Fund, the maintenance of liquidity. The investment objective
of the Municipal Funds is to maximize current income exempt from Federal
income tax to the extent consistent with the preservation of capital and the
maintenance of liquidity and, in the case of the California Municipal Fund,
exempt from State of California income taxes, and, in the case of the New
York Municipal Fund, exempt from New York State and New York City income
taxes. Each Fund's investment objective cannot be changed without approval by
the holders of a majority (as defined in the Investment Company Act of 1940,
as amended (the "1940 Act")) of such Fund's outstanding voting shares. There
can be no assurance that a Fund's investment objective will be achieved. Each
Fund pursues its investment objective in the manner described below.
Securities in which a Fund invests may not earn as high a level of current
income as long-term or lower quality securities which generally have less
liquidity, greater market risk and more fluctuation in market value.
MANAGEMENT POLICIES
Each Fund seeks to maintain a net asset value of $1.00 per share for
purchases and redemptions. To do so, each Fund uses the amortized cost method
of valuing its securities pursuant to Rule 2a-7 under the 1940 Act, which
Rule includes various maturity, quality and diversification requirements,
certain of which are summarized as follows. In accordance with Rule 2a-7,
each Fund is required to maintain a dollar-weighted average portfolio
maturity of 90 days or less, purchase only instruments having remaining
maturities of 13 months or less and invest only in U.S. dollar denominated
securities determined in accordance with procedures established by the Fund's
Board to present minimal credit risks and, in the case of the Money Fund and
each Municipal Fund, which are rated in one of the two highest rating
categories for debt obligations by at least two nationally recognized
statistical rating organizations (or one rating organization if the
instrument was rated by only one such organization) or, if unrated, are of
comparable quality as determined in accordance with procedures established by
the Fund's Board. The nationally recognized statistical rating organizations
currently rating instruments of the type the Money Fund and each Municipal
Fund may purchase are Moody's Investors Service, Inc. ("Moody's"), Standard &
Poor's Ratings Group ("S&P"), Duff & Phelps Credit Rating Co., Fitch
Investors Service, L.P. ("Fitch"), IBCA Limited and IBCA Inc. and Thomson
BankWatch, Inc. and their rating criteria are described in the "Appendix" to
the Statement of Additional Information. This discussion concerning
investment ratings does not apply to the Government Money Fund because it
invests exclusively in U.S. Government securities and repurchase agreements
in respect thereof. For further information regarding the amortized cost
method of valuing securities, see "Determination of Net Asset Value" in the
Statement of Additional Information. There can be no assurance a Fund will be
able to maintain a stable net asset value of $1.00 per share.
Each of the Government Money Fund, the Money Fund and the National
Municipal Fund, is classified as a diversified investment company. Each of
the California Municipal Fund and the New York Municipal Fund is classified
as a non-diversified investment company.
GOVERNMENT MONEY FUND _ The Fund invests in securities issued or guaranteed
as to principal and interest by the U.S. Government or its agencies or
instrumentalities, and repurchase agreements in respect of such securities.
See "Appendix _ Certain Portfolio Securities."
[Page 8]
MONEY FUND _ The Fund invests in short-term money market obligations,
including securities issued or guaranteed by the U.S. Government or its
agencies or instrumentalities, time deposits, certificates of deposit,
bankers' acceptances and other short-term obligations issued by domestic
banks, foreign subsidiaries or foreign branches of domestic banks, domestic
and foreign branches of foreign banks and thrift institutions, repurchase
agreements, asset-backed securities, and high quality domestic and foreign
commercial paper and other short-term corporate obligations, including those
with floating or variable rates of interest. The Fund may invest in U.S.
dollar denominated obligations issued or guaranteed by one or more foreign
governments or any of their political subdivisions, agencies or
instrumentalities, including obligations of supranational entities. See
"Appendix _ Certain Portfolio Securities." During normal market conditions,
at least 25% of the value of the Fund's total assets will be invested in bank
obligations. See "Investment Considerations and Risks" below.
NATIONAL MUNICIPAL FUND _ The Fund will invest at least 80% of the value of
its net assets (except when maintaining a temporary defensive position) in
Municipal Obligations. Municipal Obligations are debt obligations issued by
states, territories and possessions of the United States and the District of
Columbia and their political subdivisions, agencies and instrumentalities, or
multistate agencies or authorities, the interest from which is, in the
opinion of bond counsel to the issuer, exempt from Federal income tax.
Municipal Obligations generally include debt obligations issued to obtain
funds for various public purposes as well as certain industrial development
bonds issued by or on behalf of public authorities. Municipal Obligations
bear fixed, floating or variable rates of interest. See "Appendix_Certain
Portfolio Securities."
From time to time, the Fund may invest more than 25% of the value of
its total assets in industrial development bonds which, although issued by
industrial development authorities, may be backed only by the assets and
revenues of the non-governmental users. Interest on Municipal Obligations
(including certain industrial development bonds) which are specified private
activity bonds, as defined in the Internal Revenue Code of 1986, as amended
(the "Code"), issued after August 7, 1986, while exempt from Federal income
tax, is a preference item for the purpose of the alternative minimum tax.
Where a regulated investment company receives such interest, a proportionate
share of any exempt-interest dividend paid by the investment company may be
treated as such a preference item to shareholders. The Fund may invest
without limitation in such Municipal Obligations if The Dreyfus Corporation
determines that their purchase is consistent with the Fund's investment
objective. See "Investment Considerations and Risks" below.
From time to time, on a temporary basis other than for temporary
purposes (but not to exceed 20% of the value of the Fund's net assets) or for
temporary defensive purposes, the Fund may invest in taxable money market
instruments ("Taxable Investments") of the quality described under "Appendix
_ Certain Portfolio Securities _ Taxable Investments."
CALIFORNIA MUNICIPAL FUND _ The Fund's management policies are identical to
those of the National Municipal Fund, except that, under normal
circumstances, at least 65% of the value of the Fund's net assets will be
invested in debt securities of the State of California, its political
subdivisions, authorities and corporations, the interest from which is, in
the opinion of bond counsel to the issuer, exempt from Federal and State of
California personal income taxes (collectively, "California Municipal
Obligations"). The remainder of the Fund's assets may be invested in
securities that are not California Municipal Obligations and therefore may be
subject to California income taxes. To the extent acceptable California
Municipal Obligations are at any time unavailable for investment by the Fund,
the Fund will invest temporarily in other Municipal Obligations which may be
subject to State of California income tax and in Taxable Investments. See
"Investment Considerations and Risks_Investing in California Municipal
Obligations" below, "Dividends, Distributions and Taxes" and "Appendix _
Certain Portfolio Securities."
NEW YORK MUNICIPAL FUND _ The Fund's management policies are identical to
those of the National Municipal Fund, except that, under normal
circumstances, at least 65% of the value of the Fund's net
[Page 9]
assets will be invested in debt securities of the State of New York, its
political subdivisions, authorities and corporations, the interest from which
is, in the opinion of bond counsel to the issuer, exempt from Federal, New
York State, and New York City income taxes (collectively, "New York Municipal
Obligations").The remainder of the Fund's assets may be invested in
securities that are not New York Municipal Obligations and therefore may be
subject to New York State and New York City income taxes. To the extent
acceptable New York Municipal Obligations are at any time unavailable for
investment by the Fund, the Fund will invest temporarily in other Municipal
Obligations which may be subject to New York State and New York City income
tax and in Taxable Investments. See "Investment Considerations and Risks _
Investing in New York Municipal Obligations" below, "Dividends, Distributions
and Taxes" and "Appendix _ Certain Portfolio Securities."
INVESTMENT CONSIDERATIONS AND RISKS
GENERAL _ Each Fund attempts to increase yields by trading to take advantage
of short-term market variations. This policy is expected to result in high
portfolio turnover but should not adversely affect a Fund since each Fund
usually does not pay brokerage commissions when it purchases short-term debt
obligations, including U.S. Government securities. The value of the portfolio
securities held by each Fund will vary inversely to changes in prevailing
interest rates. Thus, if interest rates have increased from the time a
security was purchased, such security, if sold, might be sold at a price less
than its cost. Similarly, if interest rates have declined from the time a
security was purchased, such security, if sold, might be sold at a price
greater than its purchase cost. In either instance, if the security was
purchased at face value and held to maturity, no gain or loss would be
realized.
FOREIGN SECURITIES (MONEY FUND ONLY) _ Since the Fund's portfolio may
contain securities issued by foreign governments, or any of their political
subdivisions, agencies or instrumentalities, and by foreign subsidiaries and
foreign branches of domestic banks, domestic and foreign branches of foreign
banks, and commercial paper issued by foreign issuers, the Fund may be
subject to additional investment risks with respect to those securities that
are different in some respects from those incurred by a fund which invests
only in debt obligations of U.S. domestic issuers, although such obligations
may be higher yielding when compared to the securities of U.S. domestic
issuers. Such risks include possible future political and economic
developments, seizure or nationalization of foreign deposits, imposition of
foreign withholding taxes on interest income payable on the securities,
establishment of exchange controls or adoption of other foreign governmental
restrictions which might adversely affect the payment of principal and
interest on these securities.
BANK SECURITIES (MONEY FUND ONLY) _ To the extent the Fund's investments are
concentrated in the banking industry, the Fund will have correspondingly
greater exposure to the risk factors which are characteristic of such
investments. Sustained increases in interest rates can adversely affect the
availability or liquidity and cost of capital funds for a bank's lending
activities, and a deterioration in general economic conditions could increase
the exposure to credit losses. In addition, the value of and the investment
return on the Fund's shares could be affected by economic or regulatory
developments in or related to the banking industry, which industry also is
subject to the effects of competition within the banking industry as well as
with other types of financial institutions. The Fund, however, will seek to
minimize its exposure to such risks by investing only in debt securities
which are determined to be of high quality.
INVESTING IN MUNICIPAL OBLIGATIONS (MUNICIPAL FUNDS) _ Each of the Municipal
Funds may invest more than 25% of the value of its total assets in Municipal
Obligations which are related in such a way that an economic, business or
political development or change affecting one such security also would affect
the other securities; for example, securities the interest upon which is paid
from revenues of similar types of projects. As a result, each of these Funds
may be subject to greater risk as compared to a fund that does not follow
this practice.
Certain municipal lease/purchase obligations in which each of the
Municipal Funds may invest may contain "non-appropriation" clauses which
provide that the municipality has no obligation to make
[Page 10]
lease payments in future years unless money is appropriated for such purpose
on a yearly basis. Although "non-appropriation" lease/purchase obligations
are secured by the leased property, disposition of the leased property in the
event of foreclosure might prove difficult. In evaluating the credit quality
of a municipal lease/purchase obligation that is unrated, The Dreyfus
Corporation will consider, on an ongoing basis, a number of factors including
the likelihood that the issuing municipality will discontinue appropriating
funding for the leased property.
Certain provisions in the Code relating to the issuance of Municipal
Obligations may reduce the volume of Municipal Obligations qualifying for
Federal tax exemption. One effect of these provisions could be to increase
the cost of the Municipal Obligations available for purchase by the Fund and
thus reduce available yield. Shareholders should consult their tax advisers
concerning the effect of these provisions on an investment in any of the
Municipal Funds. Proposals that may restrict or eliminate the income tax
exemption for interest on Municipal Obligations may be introduced in the
future. If any such proposal were enacted that would reduce the availability
of Municipal Obligations for investment by the Municipal Funds so as to
adversely affect Fund shareholders, each Fund would reevaluate its investment
objective and policies and submit possible changes in the Fund's structure to
shareholders for their consideration. If legislation were enacted that would
treat a type of Municipal Obligation as taxable, the Municipal Funds would
treat such security as a permissible Taxable Investment within the applicable
limits set forth herein.
INVESTING IN CALIFORNIA MUNICIPAL OBLIGATIONS (CALIFORNIA MUNICIPAL FUND
ONLY) _ Since the California Municipal Fund is concentrated in securities
issued by California or entities within California, an investment in the Fund
may involve greater risk than investments in certain other types of money
market funds. You should consider carefully the special risks inherent in
investing principally in California Municipal Obligations. These risks result
from certain amendments to the California Constitution and other statutes
that limit the taxing and spending authority of California governmental
entities, as well as from the general financial condition of the State of
California. A severe recession from 1990 through fiscal 1994 reduced revenues
and increased expenditures for social welfare programs, resulting in a period
of budget imbalance. During this period, expenditures exceeded revenues in
four out of six years, and the State accumulated and sustained a budget
deficit in its budget reserve, the Special Fund for Economic Uncertainties,
approaching $2.8 billion at its peak at June 30, 1993. By the 1993-94 fiscal
year, the accumulated budget deficit was so large that it was impractical to
budget to retire it in one year, so a two-year program was implemented, using
the issuance of revenue anticipation warrants to carry a portion of the
deficit over the end of the fiscal year. When the economy failed to recover
sufficiently, a second two-year plan was implemented in 1994-95, again using
cross-fiscal year revenue anticipation warrants to partly finance the deficit
into the 1995-96 fiscal year. As a consequence of the accumulated budget
deficits, the State's cash resources available to pay its ongoing obligations
were significantly reduced causing the State to rely increasingly on external
debt markets to meet its cash needs. Future budget problems or a
deterioration in California's general financial condition may have the effect
of impairing the ability of the issuers of California Municipal Obligations
to pay interest on, or repay the principal of, such California Municipal
Obligations. You should obtain and review a copy of the Statement of
Additional Information which more fully sets forth these and other risk
factors.
INVESTING IN NEW YORK MUNICIPAL OBLIGATIONS (NEW YORK MUNICIPAL FUND ONLY) _
Since the New York Municipal Fund is concentrated in securities issued by New
York or entities within New York, an investment in the Fund may involve
greater risk than investments in certain other types of money market funds.
You should consider carefully the special risks inherent in investing
principally in New York Municipal Obligations. These risks result from the
financial condition of New York State, certain of its public bodies and
municipalities, and New York City. Beginning in early 1975, New York State,
New York City and other New York State entities faced serious financial
difficulties which jeopardized the credit standing
[Page 11]
and impaired the borrowing abilities of such entities and contributed to high
interest rates on, and lower market prices for, debt obligations issued by
them. A recurrence of such financial difficulties or a failure of certain
financial recovery programs could result in defaults or declines in the
market values of various New York Municipal Obligations in which the Fund may
invest. If there should be a default or other financial crisis relating to
New York State, New York City, a State or City agency, or a State
municipality, the market value and marketability of outstanding New York
Municipal Obligations in the Fund's portfolio and the interest income to the
Fund could be adversely affected. Moreover, the national recession and the
significant slowdown in the New York and regional economies in the early
1990's added substantial uncertainty to estimates of the State's tax
revenues, which, in part, caused the State to incur cash-basis operating
deficits in the General Fund and issue deficit notes during the fiscal
periods 1989 through 1992. New York State's financial operations have
improved, however, during recent fiscal years. For its fiscal years 1993
through 1997, the State recorded balanced budgets on a cash basis, with
positive fund balances in the General Fund. New York State ended its 1996-97
fiscal year on March 31, 1997 in balance on a cash basis, with a cash surplus
in the General Fund of approximately $1.4 billion. There can be no assurance
that New York State will not face substantial potential budget gaps in future
years. You should obtain and review a copy of the Statement of Additional
Information which more fully sets forth these and other risk factors.
NON-DIVERSIFIED STATUS (CALIFORNIA MUNICIPAL FUND AND NEW YORK MUNICIPAL
FUND) _ The classification of each of these Funds as a "non-diversified"
investment company means that the proportion of the Fund's assets that may be
invested in the securities of a single issuer is not limited by the 1940 Act.
A "diversified" investment company is required by the 1940 Act generally,
with respect to 75% of its total assets, to invest not more than 5% of such
assets in the securities of a single issuer. Since a relatively high
percentage of each Fund's assets may be invested in the obligations of a
limited number of issuers, the Fund's portfolio may be more sensitive to
changes in the market value of a single issuer. However, to meet Federal tax
requirements, at the close of each quarter each Fund may not have more than
25% of its total assets invested in any one issuer and, with respect to 50%
of total assets, not more than 5% of its total assets invested in any one
issuer. These limitations do not apply to U.S. Government securities.
SIMULTANEOUS INVESTMENTS _ Investment decisions for each Fund are made
independently from those of other investment companies advised by The Dreyfus
Corporation. If, however, such other investment companies desire to invest
in, or dispose of, the same securities as a Fund, available investments or
opportunities for sales will be allocated equitably to each investment
company. In some cases, this procedure may adversely affect the size of the
position obtained for or disposed of by the Fund or the price paid or
received by the Fund.
MANAGEMENT OF THE FUNDS
INVESTMENT ADVISER _ The Dreyfus Corporation, located at 200 Park Avenue,
New York, New York 10166, was formed in 1947 and serves as each Fund's
investment adviser. The Dreyfus Corporation is a wholly-owned subsidiary of
Mellon Bank, N.A., which is a wholly-owned subsidiary of Mellon Bank
Corporation ("Mellon"). As of October 31, 1997, The Dreyfus Corporation
managed or administered approximately $93 billion in assets for approximately
1.7 million investor accounts nationwide.
The Dreyfus Corporation supervises and assists in the overall
management of each Fund's affairs under a separate Management Agreement with
the Fund, subject to the authority of the Fund's Board in accordance with
applicable State law.
Mellon is a publicly owned multibank holding company incorporated
under Pennsylvania law in 1971 and registered under the Federal Bank Holding
Company Act of 1956, as amended. Mellon provides a comprehensive range of
financial products and services in domestic and selected international
markets. Mellon is among the twenty-five largest bank holding companies in
the United States based on total assets. Mellon's principal wholly-owned
subsidiaries are Mellon Bank, N.A., Mellon Bank (DE) National
[Page 12]
Association, Mellon Bank (MD), The Boston Company, Inc., AFCO Credit
Corporation and a number of companies known as Mellon Financial Services
Corporations. Through its subsidiaries, including The Dreyfus Corporation,
Mellon managed more than $299 billion in assets as of September 30, 1997,
including approximately $102 billion in proprietary mutual fund assets. As of
September 30, 1997, Mellon, through various subsidiaries, provided
non-investment services, such as custodial or administration services, for
more than $1.488 trillion in assets, including approximately $60 billion in
mutual fund assets.
For each Fund's most recent fiscal year, each Fund paid The Dreyfus
Corporation a monthly management fee at the annual rate of .50 of 1% of the
value of such Fund's average daily net assets. From time to time, The Dreyfus
Corporation may waive receipt of its fees and/or voluntarily assume certain
expenses of a Fund, which would have the effect of lowering the expense ratio
of such Fund and increasing yield to investors. No Fund will pay The Dreyfus
Corporation at a later time for any amounts it may waive, nor will a Fund
reimburse The Dreyfus Corporation for any amounts it may assume.
In allocating brokerage transactions, The Dreyfus Corporation seeks
to obtain the best execution of orders at the most favorable net price.
Subject to this determination, The Dreyfus Corporation may consider, among
other things, the receipt of research services and/or the sale of shares of a
Fund or other funds managed, advised or administered by The Dreyfus
Corporation as factors in the selection of broker-dealers to execute
portfolio transactions for each Fund. See "Portfolio Transactions" in the Stat
ement of Additional Information.
The Dreyfus Corporation may pay the Funds' distributor for
shareholder services from The Dreyfus Corporation's own assets, including
past profits but not including the management fee paid by the Funds. The
Funds' distributor may use part or all of such payments to pay Service Agents
in respect of these services.
DISTRIBUTOR _ Each Fund's distributor is Premier Mutual Fund Services, Inc.
(the "Distributor"), located at 60 State Street, Boston, Massachusetts 02109.
The Distributor's ultimate parent is Boston Institutional Group, Inc.
TRANSFER AND DIVIDEND DISBURSING AGENT AND CUSTODIAN _ Dreyfus Transfer,
Inc., a wholly-owned subsidiary of The Dreyfus Corporation, P.O. Box 9671,
Providence, Rhode Island 02940-9671, is each Fund's Transfer and Dividend
Disbursing Agent (the "Transfer Agent"). The Bank of New York, 90 Washington
Street, New York, New York 10286, is each Fund's Custodian.
HOW TO BUY SHARES
Each Fund's shares may be purchased only by clients of certain
financial institutions (which may include banks), securities dealers
("Selected Dealers"), and other industry professionals such as investment
advisers, accountants and estate planning firms (collectively, "Service
Agents") that have entered into service agreements with the Distributor. For
shareholders who purchase Fund shares from the Distributor, the Distributor
will act as Service Agent. Stock certificates are issued only upon your writte
n request. No certificates are issued for fractional shares. It is not
recommended that the Municipal Funds be used as a vehicle for Keogh, IRA or
other qualified plans. Each Fund reserves the right to reject any purchase
order.
The minimum initial investment in each Fund is $2,500, or $1,000 if
you are a client of a Service Agent which maintains an omnibus account in the
relevant Fund and has made an aggregate minimum initial purchase in the Fund
for its customers of $2,500. Subsequent investments must be at least $100.
For the Government Money Fund and Money Fund only, however, the minimum
investment is $750 for Dreyfus-sponsored Keogh Plans, IRAs (including regular
IRAs, spousal IRAs for a non-working spouse, Roth IRAs, SEP-IRAs and rollover
IRAs) and 403(b)(7) Plans with only one participant and $500 for
Dreyfus-sponsored Education IRAs, with no minimum on subsequent purchases.
The initial investment must be accompanied by the Account Application. For
full-time or part-time employees of The Dreyfus
[Page 13]
Corporation or any of its affiliates or subsidiaries, directors of The
Dreyfus Corporation, Board members of a fund advised by The Dreyfus
Corporation, including members of each Fund's Board, or the spouse or minor
child of any of the foregoing, the minimum initial investment is $1,000. For
full-time or part-time employees of The Dreyfus Corporation or any of its
affiliates or subsidiaries who elect to have a portion of their pay directly
deposited into their Fund accounts, the minimum initial investment is $50.
The Government Money Fund and Money Fund reserve the right to offer Fund
shares without regard to minimum purchase requirements to employees
participating in certain qualified and non-qualified employee benefit plans
or other programs where contributions or account information can be
transmitted in a manner and form acceptable to such Fund. Each Fund reserves
the right to vary further the initial and subsequent investment minimum
requirements at any time.
You may purchase Fund shares by check or wire. Checks should be made
payable to "The Dreyfus Family of Funds" or, if for Dreyfus retirement plan
accounts with respect to the Government Money Fund and Money Fund, to "The
Dreyfus Trust Company, Custodian." Payments to open new accounts which are
mailed should be sent to The Dreyfus Family of Funds, P.O. Box 9387,
Providence, Rhode Island 02940-9387, together with your Account Application
indicating that Class A shares are being purchased. For subsequent
investments, your Fund account number should appear on the check and an
investment slip should be enclosed and sent to The Dreyfus Family of Funds,
P.O. Box 105, Newark, New Jersey 07101-0105. For Dreyfus retirement plan
accounts, both initial and subsequent investments should be sent to The
Dreyfus Trust Company, Custodian, P.O. Box 6427, Providence, Rhode Island
02940-6427. Neither initial nor subsequent investments should be made by
third party check. Purchase orders may be delivered in person only to a
Dreyfus Financial Center. THESE ORDERS WILL BE FORWARDED TO THE RELEVANT FUND
AND WILL BE PROCESSED ONLY UPON RECEIPT THEREBY. For the location of the
nearest Dreyfus Financial Center, please call one of the telephone numbers
listed under "General Information." Other purchase procedures may be in
effect for clients of certain Service Agents.
Wire payments may be made, if your bank account is in a commercial
bank that is a member of the Federal Reserve System or any other bank having
a correspondent bank in New York City. Immediately available funds may be
transmitted by wire to The Bank of New York together with the applicable
Fund's DDA# as shown below, for purchase of Fund shares in your name:
DDA # 8900052414/General Government Securities Money Market Fund,
Inc.
DDA # 8900051957/General Money Market Fund, Inc.
DDA # 8900052163/General California Municipal Money Market Fund
DDA # 8900052376/General Municipal Money Market Fund, Inc.
DDA # 8900052171/General New York Municipal Money Market Fund
The wire must include your Fund account number (for new accounts, your
Taxpayer Identification Number ("TIN") should be included instead), account
registration and dealer number, if applicable, and must indicate the Class of
shares being purchased. If your initial purchase of Fund shares is by wire,
please call 1-800-645-6561 after completing your wire payment to obtain your
Fund account number. Please include your Fund account number on the Account
Application and promptly mail the Account Application to the Fund, as no
redemptions will be permitted until the Account Application is received. You
may obtain further information about remitting funds in this manner from your
bank. All payments should be made in U.S. dollars and, to avoid fees and
delays, should be drawn only on U.S. banks. A charge will be imposed if any
check used for investment in your account does not clear. Each Fund makes
available to certain large institutions the ability to issue purchase
instructions through compatible computer facilities.
Fund shares also may be purchased through Dreyfus-AUTOMATIC Asset
BuilderRegistration Mark, the Government Direct Deposit Privilege or the
Payroll Savings Plan described under "Shareholder Services." These services
enable you to make regularly scheduled investments and may provide you with
a convenient way
[Page 14]
to invest for long-term financial goals. You should be aware, however, that
periodic investment plans do not guarantee a profit and will not protect an
investor against loss in a declining market.
Subsequent investments also may be made by electronic transfer of
funds from an account maintained in a bank or other domestic financial
institution that is an Automated Clearing House member. You must direct the
institution to transmit immediately available funds through the Automated
Clearing House to The Bank of New York with instructions to credit your Fund
account. The instructions must specify your Fund account registration and
your Fund account number preceded by the digits "1111."
Management understands that some Service Agents may impose certain
conditions on their clients which are different from those described in this
Prospectus and, to the extent permitted by applicable regulatory authority,
may charge their clients direct fees for Servicing (as defined under "Service
Plan"). Service Agents may receive different levels of compensation for
selling different Classes of shares. You should consult your Service Agent in
this regard.
Fund shares are sold on a continuous basis at the net asset value per
share next determined after an order in proper form and Federal Funds (monies
of member banks within the Federal Reserve System which are held on deposit
at a Federal Reserve Bank) are received by the Transfer Agent or other agent
or entity subject to the direction of such agents in written or telegraphic
form. If you do not remit Federal Funds, your payment must be converted into
Federal Funds. This usually occurs within one business day of receipt of a
bank wire and within two business days of receipt of a check drawn on a
member bank of the Federal Reserve System. Checks drawn on banks which are
not members of the Federal Reserve System may take considerably longer to
convert into Federal Funds. Prior to receipt of Federal Funds, your money
will not be invested.
Net asset value per share of each Class is computed by dividing the
value of the Fund's net assets represented by such Class (i.e., the value of
its assets less liabilities) by the total number of shares of such Class
outstanding. See "Determination of Net Asset Value" in the Statement of
Additional Information.
Federal regulations require that you provide a certified TIN upon
opening or reopening an account. See "Dividends, Distributions and Taxes" and
the Account Application for further information concerning this requirement.
Failure to furnish a certified TIN to a Fund could subject you to a $50
penalty imposed by the Internal Revenue Service (the "IRS").
Government Money Fund and Money Fund _ Each of these Funds' net asset value
per share is determined twice each day the New York Stock Exchange or the
Funds' Transfer Agent is open for business: as of 5:00 p.m., New York time,
and as of 8:00 p.m., New York time.
If your payments are received in or converted into Federal Funds by
12:00 Noon, New York time, by the Transfer Agent on a business day, you will
receive the dividend declared that day. If your payments are received in or
converted into Federal Funds after 12:00 Noon, New York time, by the Transfer
Agent, you will begin to accrue dividends on the following business day.
Qualified institutions may telephone orders for purchase of Fund
shares of each of these Funds. A telephone order placed with the Distributor
or its designee in New York will become effective at the price determined at
5:00 p.m., New York time, and the shares purchased will receive the dividend
on Fund shares declared on that day, if such order is placed with the
Distributor or its designee in New York by 5:00 p.m., New York time, and
Federal Funds are received by 6:00 p.m., New York time, on that day. A
telephone order placed with the Distributor or its designee in New York after
5:00 p.m., New York time, but by 8:00 p.m., New York time, on a given day
will become effective at the price determined at 8:00 p.m., New York time, on
that day, and the shares purchased will begin to accrue dividends on the next
business day, if Federal Funds are received by 11:00 a.m., New York time, on
the next business day.
The Distributor may pay dealers a fee of up to .5% of the amount
invested through such dealers in each Fund's shares by employees
participating in qualified or non-qualified employee benefit plans or
[Page 15]
other programs where (i) the employers or affiliated employers maintaining
such plans or programs have a minimum of 250 employees eligible for
participation in such plans or programs, or (ii) such plan's or program's
aggregate investment in the Dreyfus Family of Funds or certain other products
made available by the Distributor to such plans or programs exceeds
$1,000,000 ("Eligible Benefit Plans"). Shares of funds in the Dreyfus Family
of Funds then held by Eligible Benefit Plans will be aggregated to determine
the fee payable. The Distributor reserves the right to cease paying these
fees at any time. The Distributor will pay such fees from its own funds,
other than amounts received from the Fund, including past profits or any
other source available to it.
Municipal Funds _ Each of the Municipal Funds' net asset value per share is
determined twice each day the New York Stock Exchange or the Funds' Transfer
Agent is open for business: as of 12:00 Noon, New York time, and as of 8:00
p.m., New York time.
If your payments are received in or converted into Federal Funds by
12:00 Noon, New York time, on a business day, you will receive the dividend
declared that day. If your payments are received in or converted into Federal
Funds after 12:00 Noon, New York time, you will begin to accrue dividends on
the following business day.
Qualified institutions may telephone orders for purchase of shares of
each of these Funds. A telephone order placed with the Distributor or its
designee in New York will become effective at the price determined at 12:00
Noon, New York time, on a given day, and the shares purchased will receive
the dividend on Fund shares declared on that day, if the telephone order is
placed with the Distributor or its designee by 12:00 Noon, New York time, and
Federal Funds are received by 4:00 p.m., New York time, on that day. A
telephone order placed with the Distributor or its designee after 12:00 Noon,
New York time, but by 8:00 p.m., New York time, on a given day will become
effective at the price determined at 8:00 p.m., New York time, on that day,
and the shares purchased will begin to accrue dividends on the next business
day, if Federal Funds are received by 11:00 a.m., New York time, on the next
business day.
TELETRANSFER PRIVILEGE (California Municipal Fund and New York Municipal Fund
only) _ You may purchase shares (minimum $500, maximum $150,000 per day) by
telephone if you have checked the appropriate box and supplied the necessary
information on the Account Application or have filed a Shareholder Services
Form with the Transfer Agent. The proceeds will be transferred between the
bank account designated in one of these documents and your Fund account. Only
a bank account maintained in a domestic financial institution which is an
Automated Clearing House member may be so designated. Each of these Funds may
modify or terminate this Privilege at any time or charge a service fee upon
notice to shareholders. No such fee currently is contemplated.
If you have selected the TELETRANSFER Privilege, you may request a TEL
ETRANSFER purchase of shares by calling 1-800-645-6561 or, if you are calling
from overseas, call 516-794-5452.
SHAREHOLDER SERVICES
The services and privileges described under this heading may not be
available to clients of certain Service Agents and some Service Agents may
impose certain conditions on their clients which are different from those
described in this Prospectus. You should consult your Service Agent in this
regard. In addition, use of the privileges noted below may require that the
proper forms and information be filed with and processed by the Transfer
Agent.
FUND EXCHANGES _ Clients of certain Service Agents may purchase, in exchange
for shares of a Fund, shares of certain other funds managed or administered
by The Dreyfus Corporation, to the extent such shares are offered for sale in
your state of residence. These funds have different investment objectives
which may be of interest to you. If you desire to use this service, you
should consult your Service Agent or call 1-800-645-6561 to determine if it
is available and whether any conditions are imposed on its use.
[Page 16]
To request an exchange, you or your Service Agent acting on your
behalf must give exchange instructions to the Transfer
Agent in writing or by telephone. Before any exchange, you must obtain and
should review a copy of the current prospectus of the fund into which the
exchange is being made. Prospectuses may be obtained by calling
1-800-645-6561. Except in the case of personal retirement plans, the shares
being exchanged must have a current value of at least $500; furthermore, when
establishing a new account by exchange, the shares being exchanged must have
a value of at least the minimum initial investment required for the fund into
which the exchange is being made. The ability to issue exchange instructions
by telephone is given to shareholders of each Fund automatically, unless you
check the applicable "No" box on the Account Application, indicating that you
specifically refuse this Privilege. The Telephone Exchange Privilege may be
established for an existing account by written request signed by all
shareholders on the account, by a separate signed Shareholder Services Form,
available by calling 1-800-645-6561, or by oral request from any of the
authorized signatories on the account by calling 1-800-645-6561. If you have
established the Telephone Exchange Privilege, you may telephone exchange
instructions (including over The Dreyfus TouchRegistration Mark automated
telephone system) by calling 1-800-645-6561. If you are calling from
overseas, call 516-794-5452. See "How to Redeem Shares _ Procedures." Upon an
exchange into a new account, the following shareholder services and
privileges, as applicable and where available, will be automatically carried
over to the fund into which the exchange is made: Telephone Exchange
Privilege, Check Redemption Privilege, Wire Redemption Privilege, Telephone
Redemption Privilege, TeleTransfer Privilege, and the dividend/capital gain
distribution option (except for Dividend Sweep) selected by the investor.
Shares will be exchanged at the next determined net asset value;
however, a sales load may be charged with respect to exchanges into funds
sold with a sales load. If you are exchanging into a fund that charges a
sales load, you may qualify for share prices which do not include the sales
load or which reflect a reduced sales load, if the shares you are exchanging
were: (a) purchased with a sales load, (b) acquired by a previous exchange
from shares purchased with a sales load, or (c) acquired through reinvestment
of dividends or distributions paid with respect to the foregoing categories
of shares. To qualify, at the time of the exchange you must notify the
Transfer Agent or your Service Agent must notify the Distributor. Any such
qualification is subject to confirmation of your holdings through a check of
appropriate records. See "Shareholder Services" in the Statement of
Additional Information. No fees currently are charged shareholders directly
in connection with exchanges, although each Fund reserves the right, upon not
less than 60 days' written notice, to charge shareholders a nominal
administrative fee in accordance with rules promulgated by the Securities and
Exchange Commission. Each Fund reserves the right to reject any exchange
request in whole or in part. The availability of Fund Exchanges may be
modified or terminated at any time upon notice to shareholders. See
"Dividends, Distributions and Taxes."
DREYFUS AUTO-EXCHANGE PRIVILEGE _ Dreyfus Auto-Exchange Privilege enables
you to invest regularly (on a semi-monthly, monthly, quarterly or annual
basis), in exchange for shares of a Fund, in shares of certain other funds in
the Dreyfus Family of Funds of which you are a shareholder. The amount you
designate, which can be expressed either in terms of a specific dollar or
share amount ($100 minimum), will be exchanged automatically on the first
and/or fifteenth of the month according to the schedule you have selected.
Shares will be exchanged at the then-current net asset value; however, a
sales load may be charged with respect to exchanges into funds sold with a
sales load. See "Shareholder Services" in the Statement of Additional
Information. The right to exercise this Privilege may be modified or canceled
by the Fund or the Transfer Agent. You may modify or cancel your exercise of
this Privilege at any time by mailing written notification to The Dreyfus
Family of Funds, P.O. Box 9671, Providence, Rhode Island 02940-9671. Each Fund
may charge a service fee for the use of this Privilege. No such fee
currently is contemplated. For more information concerning this Privilege and
the funds in the Dreyfus Family of Funds eligible to participate in this
Privilege, or to obtain an Auto-Exchange Authorization Form, please call toll
free 1-800-645-6561. See "Dividends, Distributions and Taxes."
[Page 17]
DREYFUS-AUTOMATIC ASSET BUILDERRegistration Mark _ Dreyfus-AUTOMATIC Asset
Builder permits you to purchase Fund shares (minimum of $100 and maximum of
$150,000 per transaction) at regular intervals selected by you. Fund shares
are purchased by transferring funds from the bank account designated by you.
At your option, the bank account designated by you will be debited in the
specified amount, and Fund shares will be purchased, once a month, on either
the first or fifteenth day, or twice a month, on both days. Only an account
maintained at a domestic financial institution which is an Automated Clearing
House member may be so designated. To establish a Dreyfus-AUTOMATIC Asset
Builder account, you must file an authorization form with the Transfer Agent.
You may obtain the necessary authorization form from your Service Agent or by
calling 1-800-645-6561. You may cancel your participation in this Privilege
or change the amount of your purchase at any time by mailing written
notification to The Dreyfus Family of Funds, P.O. Box 9671, Providence, Rhode
Island 02940-9671, or, if for Dreyfus retirement plan accounts, to The
Dreyfus Trust Company, Custodian, P.O. Box 6427, Providence, Rhode Island
02940-6427, and the notification will be effective three business days
following receipt. Each Fund may modify or terminate this Privilege at any
time or charge a service fee. No such fee currently is contemplated.
GOVERNMENT DIRECT DEPOSIT PRIVILEGE _ The Government Direct Deposit
Privilege enables you to purchase Fund shares (minimum of $100 and maximum of
$50,000 per transaction) by having Federal salary, Social Security, or
certain veterans', military or other payments from the Federal government,
automatically deposited into your Fund account. You may deposit as much of
such payments as you elect. To enroll in Government Direct Deposit, you must
file with the Transfer Agent a completed Direct Deposit Sign-Up Form for each
type of payment that you desire to include in this Privilege. The appropriate
form may be obtained from your Service Agent or by calling 1-800-645-6561.
Death or legal incapacity will terminate your participation in this
Privilege. You may elect at any time to terminate your participation by
notifying in writing the appropriate Federal agency. Further, a Fund may
terminate your participation upon 30 days' notice to you.
PAYROLL SAVINGS PLAN _ The Payroll Savings Plan permits you to purchase Fund
shares (minimum of $100 per transaction) automatically on a regular basis.
Depending upon your employer's direct deposit program, you may have part or
all of your paycheck transferred to your existing Dreyfus account
electronically through the Automated Clearing House system at each pay
period. To establish a Payroll Savings Plan account, you must file an
authorization form with your employer's payroll department. Your employer
must complete the reverse side of the form and return it to The Dreyfus
Family of Funds, P.O. Box 9671, Providence, Rhode Island 02940-9671. You may
obtain the necessary authorization form by calling 1-800-645-6561. You may
change the amount of purchase or cancel the authorization only by written
notification to your employer. It is the sole responsibility of your
employer, not the Distributor, The Dreyfus Corporation, the Fund, the
Transfer Agent or any other person, to arrange for transactions under the
Payroll Savings Plan. Each Fund may modify or terminate this Privilege at any
time or charge a service fee. No such fee currently is contemplated.
DIVIDEND OPTIONS _ Dividend Sweep enables you to invest automatically
dividends or dividends and capital gain distributions, if any, paid by a Fund
in shares of another fund in the Dreyfus Family of Funds of which you are a
shareholder. Shares of the other fund will be purchased at the then-current
net asset value; however, a sales load may be charged with respect to
investments in shares of a fund sold with a sales load. If you are investing
in a fund that charges a sales load, you may qualify for share prices which do
not include the sales load or which reflect a reduced sales load. If you are
investing in a fund that charges a contingent deferred sales charge, the
shares purchased will be subject to the contingent deferred sales charge, if
any, applicable to the purchased shares. See "Shareholder Services" in the
Statement of Additional Information. Dividend ACH permits you to transfer
electronically dividends or dividends and capital gain distributions, if any,
from a Fund to a designated bank account. Only an
[Page 18]
account maintained at a domestic financial institution which is an Automated
Clearing House member may be so designated. Banks may charge a fee for this
service.
For more information concerning these privileges or to request a
Dividend Options Form, please call toll free 1-800-645-6561. You may cancel
these privileges by mailing written notification to The Dreyfus Family of
Funds, P.O. Box 9671, Providence, Rhode Island 02940-9671. To select a new
fund after cancellation, you must submit a new Dividend Options Form.
Enrollment in or cancellation of these privileges is effective three business
days following receipt. These privileges are available only for existing
accounts and may not be used to open new accounts. Minimum subsequent
investments do not apply for Dividend Sweep. Each Fund may modify or
terminate these privileges at any time or charge a service fee. No such fee
currently is contemplated. Shares held under Keogh Plans or IRAs are not
eligible for Dividend Sweep.
QUARTERLY DISTRIBUTION PLAN _ The Quarterly Distribution Plan permits you to
receive quarterly payments from a Fund consisting of proceeds from the
redemption of shares purchased for your account through the automatic
reinvestment of dividends declared on your account during the preceding
calendar quarter. You may open a Quarterly Distribution Plan by submitting a
request to the Transfer Agent. The Quarterly Distribution Plan may be ended
at any time by you, the Fund or the Transfer Agent. Shares for which
certificates have been issued must be presented before redemption under the
Quarterly Distribution Plan.
AUTOMATIC WITHDRAWAL PLAN _ The Automatic Withdrawal Plan permits you to
request withdrawal of a specified dollar amount (minimum of $50) on either a
monthly or quarterly basis if you have a $5,000 minimum account. An Automatic
Withdrawal Plan may be established by filing an Automatic Withdrawal Plan
application with the Transfer Agent or by oral request from any of the
authorized signatories on the account by calling 1-800-645-6561. The
Automatic Withdrawal Plan may be ended at any time by you, the Fund or the
Transfer Agent. Shares for which certificates have been issued may not be
redeemed through the Automatic Withdrawal Plan.
RETIREMENT PLANS (GOVERNMENT MONEY FUND AND MONEY FUND ONLY) _ Each of these
Funds offers a variety of pension and profit-sharing plans, including Keogh
Plans, IRAs (including regular IRAs, spousal IRAs for a non-working spouse,
Roth IRAs, SEP-IRAs, rollover IRAs and Education IRAs), 401(k) Salary
Reduction Plans and 403(b)(7) Plans. Plan support services also are
available. You can obtain details on the various plans by calling the
following numbers toll free: for Keogh Plans, please call 1-800-358-5566; for
IRAs and IRA "Rollover Accounts," please call 1-800-645-6561; or for
SEP-IRAs, 401(k) Salary Reduction Plans and 403(b)(7) Plans, please call
1-800-322-7880.
HOW TO REDEEM SHARES
GENERAL
You may request redemption of your shares at any time. Redemption
requests should be transmitted to the Transfer Agent as described below. When
a request is received in proper form, your Fund will redeem the shares at the
next determined net asset value.
No Fund imposes a charge when shares are redeemed. Service Agents may
charge their clients a fee for effecting redemptions of Fund shares. Any
certificates representing Fund shares being redeemed must be submitted with
the redemption request. The value of the shares redeemed may be more or less
than their original cost, depending upon the respective Fund's then-current
net asset value.
Each Fund ordinarily will make payment for all shares redeemed within
seven days after receipt by the Transfer Agent of a redemption request in
proper form, except as provided by the rules of the Securities and Exchange
Commission. HOWEVER, IF YOU HAVE PURCHASED FUND SHARES BY CHECK, BY
TELETRANSFER PRIVILEGE OR THROUGH DREYFUS-AUTOMATIC ASSET BUILDERRegistration
Mark AND SUBSEQUENTLY SUBMIT A WRITTEN REDEMPTION REQUEST TO THE TRANSFER
AGENT, YOUR REDEMPTION WILL BE EFFECTIVE AND THE REDEMPTION PROCEEDS WILL BE
TRANSMITTED TO YOU PROMPTLY UPON BANK CLEARANCE OF YOUR
[Page 19]
PURCHASE CHECK, TELETRANSFER PURCHASE OR DREYFUS-AUTOMATIC ASSET BUILDER
ORDER, WHICH MAY TAKE UP TO EIGHT BUSINESS DAYS OR MORE. IN ADDITION, EACH
FUND WILL NOT HONOR REDEMPTION CHECKS UNDER THE CHECK REDEMPTION PRIVILEGE,
AND WILL REJECT REQUESTS TO REDEEM SHARES BY WIRE OR TELEPHONE OR PURSUANT TO
THE TELETRANSFER PRIVILEGE FOR A PERIOD OF EIGHT BUSINESS DAYS AFTER RECEIPT
BY THE TRANSFER AGENT OF THE PURCHASE CHECK, THE TELETRANSFER PURCHASE OR THE
DREYFUS-AUTOMATIC ASSET BUILDER ORDER AGAINST WHICH SUCH REDEMPTION IS
REQUESTED. THESE PROCEDURES WILL NOT APPLY IF YOUR SHARES WERE PURCHASED BY
WIRE PAYMENT, OR IF YOU OTHERWISE HAVE A SUFFICIENT COLLECTED BALANCE IN YOUR
ACCOUNT TO COVER THE REDEMPTION REQUEST. PRIOR TO THE TIME ANY REDEMPTION IS
EFFECTIVE, DIVIDENDS ON SUCH SHARES WILL ACCRUE AND BE PAYABLE, AND YOU WILL
BE ENTITLED TO EXERCISE ALL OTHER RIGHTS OF BENEFICIAL OWNERSHIP. Fund shares
will not be redeemed until the Transfer Agent has received your Account
Application.
Each Fund reserves the right to redeem your account at its option
upon not less than 45 days' written notice if your account's net asset value
is $500 or less and remains so during the notice period.
PROCEDURES
You may redeem Fund shares by using the regular redemption procedure
through the Transfer Agent, or through the Telephone Redemption Privilege or
Check Redemption Privilege, which are granted automatically unless you
specifically refuse them by checking the applicable "No" box on the Account
Application. The Telephone Redemption Privilege and Check Redemption
Privilege may be established for an existing account by a separate signed
Shareholder Services Form, or, with respect to the Telephone Redemption
Privilege, by oral request from any of the authorized signatories on the
account by calling 1-800-645-6561. You also may redeem shares through the
Wire Redemption Privilege or, with respect to the California Municipal Fund
and New York Municipal Fund, the TELETRANSFER Privilege, if you have checked
the appropriate box and supplied the necessary information on the Account
Application or have filed a Shareholder Services Form with the Transfer
Agent. If you are a client of a Selected Dealer, you may redeem Fund shares th
rough the Selected Dealer. Other redemption procedures may be in effect for
clients of certain Service Agents. Each Fund makes available to certain large
institutions the ability to issue redemption instructions through compatible
computer facilities. Each Fund reserves the right to refuse any request made
by wire or telephone, including requests made shortly after a change of
address, and may limit the amount involved or the number of such requests.
Each Fund may modify or terminate any redemption privilege at any time or
charge a service fee upon notice to shareholders. No such fee currently is
contemplated. Shares held under Keogh Plans, IRAs or other retirement plans,
and shares for which certificates have been issued, are not eligible for the
Check Redemption, Wire Redemption, Telephone Redemption or TELETRANSFER Privil
ege.
The Telephone Redemption Privilege or Telephone Exchange Privilege
authorizes the Transfer Agent to act on telephone instructions (including
over The Dreyfus TouchRegistration Mark automated telephone system) from any
person representing himself or herself to be you, or a representative of your
Service Agent, and reasonably believed by the Transfer Agent to be genuine.
Each Fund will require the Transfer Agent to employ reasonable procedures,
such as requiring a form of personal identification, to confirm that
instructions are genuine and, if it does not follow such procedures, the Fund
or the Transfer Agent may be liable for any losses due to unauthorized or
fraudulent instructions. Neither a Fund nor the Transfer Agent will be liable
for following telephone instructions reasonably believed to be genuine.
During times of drastic economic or market conditions, you may
experience difficulty in contacting the Transfer Agent by telephone to
request a redemption or exchange of Fund shares. In such cases, you should
consider using the other redemption procedures described herein. Use of these
other redemption procedures may result in your redemption request being
processed at a later time than it would have been if telephone redemption had
been used.
[Page 20]
REGULAR REDEMPTION _ Under the regular redemption procedure, you may redeem
shares by written request mailed to The Dreyfus Family of Funds, P.O. Box
9671, Providence, Rhode Island 02940-9671, or, if for Dreyfus retirement plan
accounts, to The Dreyfus Trust Company, Custodian, P.O. Box 6427, Providence,
Rhode Island 02940-6427. Redemption requests may be delivered in person only
to a Dreyfus Financial Center. For the location of the nearest Dreyfus
Financial Center, please call one of the telephone numbers listed under "Gener
al Information." THESE REQUESTS WILL BE FORWARDED TO THE FUND AND WILL BE
PROCESSED ONLY UPON RECEIPT THEREBY. Redemption requests must be signed by
each shareholder, including each owner of a joint account, and each signature
must be guaranteed. The Transfer Agent has adopted standards and procedures
pursuant to which signature-guarantees in proper form generally will be
accepted from domestic banks, brokers, dealers, credit unions, national
securities exchanges, registered securities associations, clearing agencies
and savings associations, as well as from participants in the New York Stock
Exchange Medallion Signature Program, the Securities Transfer Agents
Medallion Program ("STAMP"), and the Stock Exchanges Medallion Program. If
you have questions with respect to signature-guarantees, please call one of
the telephone numbers listed under "General Information."
Redemption proceeds of at least $1,000 will be wired to any member
bank of the Federal Reserve System in accordance with a written
signature-guaranteed request.
CHECK REDEMPTION PRIVILEGE _ You may write Redemption Checks drawn on your
Fund account. Redemption Checks may be made payable to the order of any
person in the amount of $500 or more. Redemption Checks should not be used to
close your account. Redemption Checks are free, but the Transfer Agent will
impose a fee for stopping payment of a Redemption Check upon your request or
if the Transfer Agent cannot honor a Redemption Check due to insufficient
funds or other valid reason. You should date your Redemption Checks with the
current date when you write them. Please do not postdate your Redemption
Checks. If you do, the Transfer Agent will honor, upon presentment, even if
presented before the date of the check, all postdated Redemption Checks which
are dated within six months of presentment for payment, if they are otherwise
in good order. If you hold shares in a Dreyfus-sponsored IRA account, you may
be permitted to make withdrawals from your IRA account using checks furnished
to you by The DreyfusTrust Company. The Check Redemption Privilege is granted
automatically unless you refuse it.
WIRE REDEMPTION PRIVILEGE _ You may request by wire, telephone or letter
that redemption proceeds (minimum $1,000) be wired to your account at a bank
which is a member of the Federal Reserve System, or a correspondent bank if
your bank is not a member. Holders of jointly registered Fund or bank
accounts may have redemption proceeds of not more than $250,000 wired within
any 30-day period. You may telephone redemption requests by calling
1-800-645-6561 or, if you are calling from overseas, call 516-794-5452. The
Statement of Additional Information sets forth instructions for transmitting
redemption requests by wire.
TELEPHONE REDEMPTION PRIVILEGE _ You may request by telephone that
redemption proceeds (maximum $150,000 per day) be paid by check and mailed to
your address. You may telephone redemption instructions by calling
1-800-645-6561 or, if you are calling from overseas, call 516-794-5452. The
Telephone Redemption Privilege is granted automatically unless you refuse it.
TELETRANSFER PRIVILEGE (CALIFORNIA MUNICIPAL FUND AND NEW YORK MUNICIPAL FUND
ONLY) _ You may request by telephone that redemption proceeds (minimum $500
per day) be transferred between your Fund account and your bank account. Only
a bank account maintained in a domestic financial institution which is an
Automated Clearing House member may be designated. Redemption proceeds will
be on deposit in your account at an Automated Clearing House member bank
ordinarily two days after receipt of the redemption request. Holders of
jointly registered Fund or bank accounts may redeem through the TELETRANSFER
Privilege for transfer to their bank account not more than $250,000 within
any 30-day period.
[Page 21]
If you have selected the TELETRANSFER Privilege, you may request a
TELETRANSFER redemption of shares by calling
1-800-645-6561 or, if you are calling from overseas, call 516-794-5452.
REDEMPTION THROUGH A SELECTED DEALER _ If you are a customer of a Selected
Dealer, you may make redemption requests to your Selected Dealer. If the
Selected Dealer transmits the redemption request so that it is received by
the Transfer Agent or its designee by 12:00 Noon, New York time, with respect
to the Municipal Funds, or 5:00 p.m., New York time, with respect to the
Government Money Fund and Money Fund on a business day, the proceeds of the
redemption ordinarily will be transmitted in Federal Funds on the same day
and the shares will not receive the dividend declared on that day. If a
redemption request is received after such time, but by 8:00 p.m., New York
time, the redemption request will be effective on that day, the shares will
receive the dividend declared on that day and the proceeds of redemption
ordinarily will be transmitted in Federal Funds on the next business day. If
a redemption request is received after 8:00 p.m., New York time, the
redemption request will be effective on the next business day. It is the
responsibility of the Selected Dealer to transmit a request so that it is
received in a timely manner. The proceeds of the redemption are credited to
your account with the Selected Dealer. See "How to Buy Shares" for a
discussion of additional conditions or fees that may be imposed upon
redemption.
SERVICE PLAN
(GOVERNMENT MONEY FUND AND MONEY FUND)
Class A shares of each of these Funds are subject to a separate
Service Plan adopted pursuant to Rule 12b-1 under the 1940 Act. Under each
Service Plan, the Fund directly bears the costs of preparing, printing and
distributing prospectuses and statements of additional information and of
implementing and operating the Service Plan. In addition, each Fund
reimburses (a) the Distributor for payments made for distributing Class A
shares and servicing shareholder accounts ("Servicing") and (b) The Dreyfus
Corporation, Dreyfus Service Corporation, a wholly-owned subsidiary of The
Dreyfus Corporation, and any affiliate of either of them (collectively,
"Dreyfus") for payments made for Servicing, at an aggregate annual rate of up
to .20 of 1% of the value of the Fund's average daily net assets attributable
to Class A. Each of the Distributor and Dreyfus may pay one or more Service
Agents a fee in respect of the respective Fund's Class A shares owned by
shareholders with whom the Service Agent has a Servicing relationship or for
whom the Service Agent is the dealer or holder of record. The schedule of
such fees and the basis upon which such fees will be paid shall be determined
from time to time by the Fund's Board. If a holder of Class A shares ceases
to be a client of a Service Agent, but continues to hold Class A shares,
Dreyfus will act as the Service Agent in respect of such shareholder and
receive payments under the Service Plan for Servicing. The fees payable for
Servicing are payable without regard to actual expenses incurred.
SHAREHOLDER SERVICES PLAN
Each Fund has adopted a separate Shareholder Services Plan with
respect to Class A pursuant to which the Fund reimburses Dreyfus Service
Corporation an amount not to exceed an annual rate of .25 of 1% of the value
of the Fund's average daily net assets attributable to Class A for certain
allocated expenses of providing personal services and/or maintaining
shareholder accounts. The services provided may include personal services
relating to shareholder accounts, such as answering shareholder inquiries rega
rding the Fund and providing reports and other information, and services
related to the maintenance of shareholder accounts. As to each of the
Government Money Fund and the Money Fund, at no time will the amount paid
under this Plan, together with amounts otherwise paid with respect to Class A
under the Fund's Service Plan as a "service fee" as defined in the NASD
Conduct Rules, exceed the maximum amount permitted to be paid under the NASD
Conduct Rules as a service fee.
DIVIDENDS, DISTRIBUTIONS AND TAXES
Each Fund ordinarily declares dividends from its net investment
income on each day the New York Stock Exchange or, for the Government Money
Fund and Money Fund only, the Transfer Agent is open
[Page 22]
for business. The Fund's earnings for Saturdays, Sundays and holidays are
declared as dividends on the preceding business day. Dividends usually are
paid on the last calendar day of each month and automatically are reinvested
in additional shares at net asset value or, at your option, paid in cash. If
you redeem all shares in your account at any time during the month, all
dividends to which you are entitled will be paid to you along with the
proceeds of the redemption. If you are an omnibus accountholder and indicate
in a partial redemption request that a portion of any accrued dividends to
which such account is entitled belongs to an underlying accountholder who has
redeemed all shares in his or her account, such portion of the accrued
dividends will be paid to you along with the proceeds of the redemption.
Distributions from net realized securities gains, if any, generally are
declared and paid once a year, but each Fund may make distributions on a more
frequent basis to comply with the distribution requirements of the Code, in
all events in a manner consistent with the provisions of the 1940 Act. No
Fund will make distributions from net realized securities gains unless
capital loss carryovers, if any, have been utilized or have expired. You may
choose whether to receive distributions in cash or to reinvest in additional
shares at net asset value. If you elect to receive dividends and
distributions in cash, and your dividend or distribution check is returned to
the Fund as undeliverable or remains uncashed for six months, the Fund
reserves the right to reinvest such dividends or distributions and all future
dividends and distributions payable to you in additional Fund shares at net
asset value. No interest will accrue on amounts represented by uncashed
distribution or redemption checks. All expenses are accrued daily and
deducted before declaration of dividends to investors. Dividends paid by each
Class will be calculated at the same time and in the same manner and will be
of the same amount, except that the expenses attributable solely to a Class
will be borne exclusively by such Class.
Dividends paid by each Municipal Fund derived from Taxable
Investments, and dividends paid by each other Fund derived from interest,
together with distributions from any net realized short-term securities gains
and all or a portion of any gains realized from the sale or other disposition
of certain market discount bonds, are subject to Federal income tax as
ordinary income, whether received in cash or reinvested in additional Fund
shares. Distributions from net realized long-term securities gains, if any,
will be taxable as long-term capital gains for Federal income tax purposes if
you are a citizen or resident of the United States. The Code provides that an
individual generally will be taxed on his or her net capital gain at a
maximum rate of 28% with respect to capital gain from securities held for
more than one year but not more than 18 months and at a maximum rate of 20%
with respect to capital gain from securities held for more than 18 months.
Under the Code, interest on indebtedness incurred or continued to purchase or
carry Fund shares which is deemed to relate to exempt-interest dividends is
not deductible.
Except for dividends from Taxable Investments, it is anticipated that
substantially all dividends paid by each Municipal Fund will not be subject
to Federal income tax and, as to the California Municipal Fund, State of
California income taxes, and as to the New York Municipal Fund, New York
State and New York City income taxes. Although all or a substantial portion
of the dividends paid by each Municipal Fund may be excluded by shareholders
from their gross income for Federal income tax purposes, each Municipal Fund
may purchase specified private activity bonds, the interest from which may be
(i) a preference item for purposes of the alternative minimum tax, or (ii) a
factor in determining the extent to which a shareholder's Social Security
benefits are taxable. If a Municipal Fund purchases such securities, the
portion of the Fund's dividends related thereto will not necessarily be tax
exempt to an investor who is subject to the alternative minimum tax and/or
tax on Social Security benefits and may cause an investor to be subject to
such taxes.
Dividends and distributions attributable to interest from direct
obligations of the United States and paid by the Government Money Fund and
Money Fund to individuals currently are not subject to tax in most states.
Dividends and distributions attributable to interest from other securities in
which the Government Money Fund and Money Fund may invest may be subject to
state tax. Each of these Funds intends to provide shareholders with a
statement which sets forth the percentage of dividends
[Page 23]
and distributions paid by the Fund that is attributable to interest income
from direct obligations of the United States.
Taxable dividends derived from net investment income, together with
distributions from net realized short-term securities gains and all or a
portion of any gains realized from the sale or other disposition of certain
market discount bonds, paid by a Fund to a foreign investor generally are
subject to U.S. nonresident withholding taxes at the rate of 30%, unless the
foreign investor claims the benefit of a lower rate specified in a tax
treaty. Distributions from net realized long-term securities gains paid by a
Fund to a foreign investor generally will not be subject to U.S. nonresident
withholding tax. However, such distributions may be subject to backup
withholding, as described below, unless the foreign investor certifies his
non-U.S. residency status.
Notice as to the tax status of your dividends and distributions will
be mailed to you annually. You also will receive periodic summaries of your
account which will include information as to dividends and distributions from
securities gains, if any, paid during the year. For each Municipal Fund,
these statements will set forth the dollar amount of income exempt from
Federal tax and, as to the California Municipal Fund, State of California
income taxes, and as to the New York Municipal Fund, New York State and New
York City income taxes, and the dollar amount, if any, subject to such tax.
These dollar amounts will vary depending upon the size and length of time of
the investor's investment in the Fund. If a Municipal Fund pays dividends
derived from taxable income, it intends to designate as taxable the same
percentage of the day's dividend as the actual taxable income earned on that
day bears to total income earned on that day. Thus, the percentage of the
dividend designated as taxable, if any, may vary from day to day.
The exchange of shares of one fund for shares of another is treated
for Federal income tax purposes as a sale of the shares given in exchange by
the shareholder and, therefore, an exchanging shareholder may realize a
taxable gain or loss.
Federal regulations generally require each Fund to withhold ("backup
withholding") and remit to the U.S. Treasury 31% of dividends and
distributions from net realized securities gains of the Fund paid to a
shareholder if such shareholder fails to certify either that the TIN
furnished in connection with opening an account is correct, or that such
shareholder has not received notice from the IRS of being subject to backup
withholding as a result of a failure to properly report taxable dividend or
interest income on a Federal income tax return. Furthermore, the IRS may
notify a Fund to institute backup withholding if the IRS determines a
shareholder's TIN is incorrect or if a shareholder has failed to properly
report taxable dividend and interest income on a Federal income tax return.
A TIN is either the Social Security number, IRS individual taxpayer
identification number, or employer identification number of the record owner
of the account. Any tax withheld as a result of backup withholding does not
constitute an additional tax imposed on the record owner of the account, and
may be claimed as a credit on the record owner's Federal income tax return.
Management believes that each Fund has qualified for its most recent
fiscal year as a "regulated investment company" under the Code. Each Fund
intends to continue to so qualify if such qualification is in the best
interests of its shareholders. Such qualification relieves the Fund of any
liability for Federal income tax to the extent its earnings are distributed
in accordance with applicable provisions of the Code. Each Fund is subject to
a non-deductible 4% excise tax, measured with respect to certain
undistributed amounts of taxable investment income and capital gains.
You should consult your tax adviser regarding specific questions as
to Federal, state and local taxes.
GENERAL INFORMATION
The Government Money Fund, National Municipal Fund and Money Fund
were incorporated under Maryland law on April 8, 1982, April 8, 1982 and May
15, 1981, respectively, and commenced operations on February 7, 1983,
December 21, 1983 and February 8, 1982, respectively. Prior to
[Page 24]
October 6, 1990, the National Municipal Fund's name was General Tax Exempt
Money Market Fund, Inc. Each of the Government Money Fund and the National
Municipal Fund is authorized to issue 15 billion shares of Class A Common
Stock and one billion shares of Class B Common Stock, par value $.01 per
share. The Money Fund is authorized to issue 15 billion shares of Class A
Common Stock and 10 billion shares of Class B Common Stock, par value $.01
per share. The California Municipal Fund and New York Municipal Fund were
organized as unincorporated business trusts under the laws of the
Commonwealth of Massachusetts pursuant to a separate Agreement and
Declaration of Trust dated September 19, 1986 and September 16, 1986,
respectively, and commenced operations on March 10, 1987 and December 2,
1986, respectively. Prior to March 19, 1990, the California Municipal Fund's
name was General California Tax Exempt Money Market Fund. Prior to January
29, 1990, the New York Municipal Fund's name was General New York Tax Exempt
Money Market Fund. Each of these Funds is authorized to issue an unlimited
number of shares of beneficial interest, par value $.001 per share. Each
Fund's shares are classified into two classes_Class A and Class B. Each share
has one vote and shareholders will vote in the aggregate and not by class
except as otherwise required by law.
Unless otherwise required by the 1940 Act, ordinarily it will not be
necessary for any Fund to hold annual meetings of shareholders. As a result,
Fund shareholders may not consider each year the election of Board members or
the appointment of auditors. However, the holders of at least 10% of a Fund's
shares outstanding and entitled to vote may require such Fund to hold a
special meeting of shareholders for purposes of removing a Board member from
office. Fund shareholders may remove a Board member by the affirmative vote
of a majority, in the case of the Government Money Fund, National Municipal
Fund and Money Fund, or two-thirds, in the case of the California Municipal
Fund and New York Municipal Fund, of the Fund's outstanding voting shares. In
addition, a Fund's Board will call a special meeting of shareholders for the
purpose of electing Board members if, at any time, less than a majority of
the Board members then holding office have been elected by shareholders.
The Transfer Agent maintains a record of your ownership and sends
confirmations and statements of account.
Shareholder inquiries may be made to your Service Agent or by writing
to a Fund at 144 Glenn Curtiss Boulevard, Uniondale, New York 11556-0144, or
by calling toll free 1-800-242-8671. In New York City, call 1-718-895-1396;
outside the U.S., call 516-794-5452.
Although each Fund is offering only its own shares, it is possible
that a Fund might become liable for any misstatement in this Prospectus about
any other Fund. Each Fund's Board has considered this factor in approving the
use of this combined Prospectus.
California Municipal Fund and New York Municipal Fund only _ Under
Massachusetts law, shareholders could, under certain circumstances, be held
personally liable for the obligations of the Fund. However, its Trust
Agreement disclaims shareholder liability for acts or obligations of the Fund
and requires that notice of such disclaimer be given in each agreement,
obligation or instrument entered into or executed by the Fund or a Trustee.
The Trust Agreement provides for indemnification from the Fund's property for
all losses and expenses of any shareholder held personally liable for the
obligations of the Fund. Thus, the risk of a shareholder incurring financial
loss on account of shareholder liability is limited to circumstances in which
the Fund itself would be unable to meet its obligations, a possibility which m
anagement believes is remote. Upon payment of any liability incurred by the
Fund, the shareholder paying such liability will be entitled to reimbursement
from the general assets of the Fund. The Fund intends to conduct its
operations in such a way so as to avoid, as far as possible, ultimate
liability of the shareholders for liabilities of the Fund.
[Page 25]
APPENDIX
INVESTMENT TECHNIQUES
BORROWING _ Each Fund may borrow money from banks for temporary or emergency
(not leveraging) purposes in an amount up to 15% of the value of its total
assets (including the amount borrowed) valued at the lesser of cost or
market, less liabilities (not including the amount borrowed) at the time the
borrowing is made. While borrowings exceed 5% of the value of a Fund's total
assets, such Fund will not make any additional investments.
FORWARD COMMITMENTS (Municipal Funds) _ Each Municipal Fund may purchase
Municipal Obligations and other securities on a forward commitment or
when-issued basis, which means that delivery and payment take place a number
of days after the date of the commitment to purchase. The payment obligation
and the interest rate receivable on a forward commitment or when-issued
security are fixed when the Fund enters into the commitment, but the Fund
does not make payment until it receives delivery from the counterparty. The
Fund will commit to purchase such securities only with the intention of
actually acquiring the securities, but the Fund may sell these securities
before the settlement date if it is deemed advisable. A segregated account of
the Fund consisting of permissible liquid assets at least equal at all times
to the amount of the commitments will be established and maintained at the
Fund's custodian bank.
CERTAIN PORTFOLIO SECURITIES
U.S. GOVERNMENT SECURITIES (GOVERNMENT MONEY FUND AND MONEY FUND) _
Securities issued or guaranteed by the U.S. Government or its agencies or
instrumentalities include U.S. Treasury securities, which differ in their
interest rates, maturities and times of issuance. Some obligations issued or
guaranteed by U.S. Government agencies and instrumentalities are supported by
the full faith and credit of the U.S. Treasury; others by the right of the
issuer to borrow from the Treasury; others by discretionary authority of the
U.S. Government to purchase certain obligations of the agency or
instrumentality; and others only by the credit of the agency or
instrumentality. These securities bear fixed, floating or variable rates of
interest. Interest may fluctuate based on generally recognized reference
rates or the relationship of rates. While the U.S. Government currently
provides financial support to such U.S. Government-sponsored agencies or
instrumentalities, no assurance can be given that it will always do so, since
it is not so obligated by law.
REPURCHASE AGREEMENTS (GOVERNMENT MONEY FUND AND MONEY FUND) _ Each of these
Funds may enter into repurchase agreements with certain banks or non-bank
dealers. In a repurchase agreement, a Fund buys, and the seller agrees to
repurchase, a security at a mutually agreed upon time and price (usually
within seven days). The repurchase agreement thereby determines the yield
during the purchaser's holding period, while the seller's obligation to
repurchase is secured by the value of the underlying security. Repurchase
agreements could involve risks in the event of a default or insolvency of the
other party to the agreement, including possible delays or restrictions upon
the Fund's ability to dispose of the underlying securities.
BANK OBLIGATIONS (MONEY FUND) _ The Fund may purchase certificates of
deposit, time deposits, bankers' acceptances and other short-term obligations
issued by domestic banks, foreign subsidiaries or foreign branches of
domestic banks, domestic and foreign branches of foreign banks, and thrift
institutions, savings and loan associations and other banking institutions.
With respect to such securities issued by foreign subsidiaries or foreign
branches of domestic banks, and domestic and foreign branches of foreign
banks, the Fund may be subject to additional investment risks that are
different in some respects from those incurred by a fund which invests only
in debt obligations of U.S. domestic issuers. See "Description of the Funds
_ Investment Considerations and Risks _ Foreign Securities."
Certificates of deposit are negotiable certificates evidencing the
obligation of a bank to repay funds deposited with it for a specified period
of time.
[Page 26]
Time deposits are non-negotiable deposits maintained in a banking
institution for a specified period of time (in no event
longer than seven days) at a stated interest rate.
Bankers' acceptances are credit instruments evidencing the obligation
of a bank to pay a draft drawn on it by a customer. These instruments reflect
the obligation both of the bank and the drawer to pay the face amount of the
instrument upon maturity. The other short-term obligations may include
uninsured, direct obligations bearing fixed, floating or variable interest
rates.
COMMERCIAL PAPER (MONEY FUND) _ Commercial paper consists of short-term,
unsecured promissory notes issued to finance short-term credit needs. The
commercial paper purchased by the Fund will consist only of direct
obligations issued by domestic and foreign entities. The other corporate
obligations in which the Fund may invest consist of high quality, U.S. dollar
denominated short-term bonds and notes (including variable amount master
demand notes) issued by domestic and foreign corporations, including banks.
FLOATING AND VARIABLE RATE OBLIGATIONS (MONEY FUND) _ The Fund may purchase
floating and variable rate demand notes and bonds, which are obligations
ordinarily having stated maturities in excess of 13 months, but which permit
the holder to demand payment of principal at any time, or at specified
intervals not exceeding 13 months, in each case upon not more than 30 days'
notice. Variable rate demand notes include master demand notes which are
obligations that permit the Fund to invest fluctuating amounts, at varying
rates of interest, pursuant to direct arrangements between the Fund, as
lender, and the borrower. These obligations permit daily changes in the
amounts borrowed. Because these obligations are direct lending arrangements
between the lender and borrower, it is not contemplated that such instruments
generally will be traded, and there generally is no established secondary
market for these obligations, although they are redeemable at face value,
plus accrued interest. Accordingly, where these obligations are not secured
by letters of credit or other credit support arrangements, the Fund's right
to redeem is dependent on the ability of the borrower to pay principal and
interest on demand.
PARTICIPATION INTERESTS (MONEY FUND) _ The Fund may purchase from financial
institutions participation interests in securities in which the Fund may
invest. A participation interest gives the Fund an undivided interest in the
security in the proportion that the Fund's participation interest bears to
the total principal amount of the security. These instruments may have fixed,
floating or variable rates of interest, with remaining maturities of 13
months or less. If the participation interest is unrated, or has been given a
rating below that which is permissible for purchase by the Fund, the
participation interest will be backed by an irrevocable letter of credit or
guarantee of a bank, or the payment obligation otherwise will be
collateralized by U.S. Government securities, or, in the case of unrated
participation interests, The Dreyfus Corporation must have determined that
the instrument is of comparable quality to those instruments in which the
Fund may invest.
ASSET-BACKED SECURITIES (MONEY FUND) _ The Fund may purchase asset-backed
securities, which are securities issued by special purpose entities whose
primary assets consist of a pool of mortgages, loans, receivables or other
assets. Payment of principal and interest may depend largely on the cash
flows generated by the assets backing the securities and, in certain cases,
supported by letters of credit, surety bonds or other forms of credit or
liquidity enhancements. The value of these asset-backed securities also may
be affected by the creditworthiness of the servicing agent for the pool of
assets, the originator of the loans or receivables or the financial
institution providing the credit support.
MUNICIPAL OBLIGATIONS (Municipal Funds) _ Municipal Obligations generally
include debt obligations issued to obtain funds for various public purposes
as well as certain industrial development bonds issued by or on behalf of
public authorities. Municipal Obligations are classified as general obligation
bonds, revenue bonds and notes. General obligation bonds are secured by the
issuer's pledge of its faith, credit and taxing power for the payment of
principal and interest. Revenue bonds are payable from the
[Page 27]
revenue derived from a particular facility or class of facilities or, in some
cases, from the proceeds of a special excise or other specific revenue
source, but not from the general taxing power. Tax exempt industrial
development bonds, in most cases, are revenue bonds that generally do not
carry the pledge of the credit of the issuing municipality, but generally are
guaranteed by the corporate entity on whose behalf they are issued. Notes are
short-term instruments which are obligations of the issuing municipalities or
agencies and are sold in anticipation of a bond sale, collection of taxes or
receipt of other revenues. Municipal Obligations include municipal
lease/purchase agreements which are similar to installment purchase contracts
for property or equipment issued by municipalities.
CERTAIN TAX EXEMPT OBLIGATIONS (Municipal Funds) _ Each Municipal Fund may
purchase floating and variable rate demand notes and bonds, which are tax
exempt obligations ordinarily having stated maturities in excess of 13
months, but which permit the holder to demand payment of principal at any
time or at specified intervals not exceeding 13 months, in each case upon not
more than 30 days' notice. Variable rate demand notes include master demand
notes which are obligations that permit the Fund to invest fluctuating
amounts, at varying rates of interest, pursuant to direct arrangements
between the Fund, as lender, and the borrower. These obligations permit daily
changes in the amount borrowed. Frequently, such obligations are secured by
letters of credit or other credit support arrangements provided by banks.
Changes in the credit quality of banks and other financial institutions that
provide such credit or liquidity enhancements to the Fund's portfolio securiti
es could cause losses to the Fund and affect its share price. Because these
obligations are direct lending arrangements between the lender and borrower,
it is not contemplated that such instruments generally will be traded, and
there generally is no established secondary market for these obligations,
although they are redeemable at face value plus accrued interest.
Accordingly, where these obligations are not secured by letters of credit or
other credit support arrangements, the Fund's right to redeem is dependent on
the ability of the borrower to pay principal and interest on demand. Each
obligation purchased by the Fund will meet the quality criteria established
for the purchase of Municipal Obligations.
TAX EXEMPT PARTICIPATION INTERESTS (Municipal Funds) _ Each Municipal Fund
may purchase from financial institutions participation interests in Municipal
Obligations (such as industrial development bonds and municipal
lease/purchase agreements). A participation interest gives the Fund an
undivided interest in the Municipal Obligation in the proportion that the
Fund's participation interest bears to the total principal amount of the
Municipal Obligation. These instruments may have fixed, floating or variable
rates of interest, with remaining maturities of 13 months or less. If the
participation interest is unrated or has been given a rating below that which
otherwise is permissible for purchase by the Fund, it will be backed by an
irrevocable letter of credit or guarantee of a bank that the Fund's Board has
determined meets prescribed quality standards for banks, or the payment
obligation otherwise will be collateralized by U.S. Government securities.
For certain participation interests, the Fund will have the right to demand
payment, on not more than seven days' notice, for all or any part of the
Fund's participation interest in the Municipal Obligation, plus accrued
interest. As to these instruments, the Fund intends to exercise its right to
demand payment only upon a default under the terms of the Municipal
Obligation, as needed to provide liquidity to meet redemptions, or to
maintain or improve the quality of its investment portfolio.
TENDER OPTION BONDS (Municipal Funds) _ Each Municipal Fund may purchase
tender option bonds. A tender option bond is a Municipal Obligation
(generally held pursuant to a custodial arrangement) having a relatively long
maturity and bearing interest at a fixed rate substantially higher than prevai
ling short-term tax exempt rates, that has been coupled with the agreement of
a third party, such as a bank, broker-dealer or other financial institution,
pursuant to which such institution grants the security holders the option, at
periodic intervals, to tender their securities to the institution and receive
the face value thereof. As consideration for providing the option, the
financial institution receives periodic fees equal to the difference between
the Municipal Obligation's fixed coupon rate and the rate, as determined
[Page 28]
by a remarketing or similar agent at or near the commencement of such
period, that would cause the securities, coupled with the tender option, to
trade at par on the date of such determination. Thus, after payment of this
fee, the security holder effectively holds a demand obligation that bears
interest at the prevailing short-term tax exempt rate. The Dreyfus
Corporation, on behalf of the Fund, will consider on an ongoing basis the
creditworthiness of the issuer of the underlying Municipal Obligation, of any
custodian and of the third party provider of the tender option. In certain
instances and for certain tender option bonds, the option may be terminable
in the event of a default in payment of principal or interest on the
underlying Municipal Obligations and for other reasons.
STAND-BY COMMITMENTS (Municipal Funds) _ Each Municipal Fund may acquire
"stand-by commitments" with respect to Municipal Obligations held in its
portfolio. Under a stand-by commitment, the Fund obligates a broker, dealer
or bank to repurchase, at the Fund's option, specified securities at a specifi
ed price and, in this respect, stand-by commitments are comparable to put
options. The exercise of a stand-by commitment, therefore, is subject to the
ability of the seller to make payment on demand. The Fund will acquire
stand-by commitments solely to facilitate portfolio liquidity and does not
intend to exercise its rights thereunder for trading purposes. The Fund may
pay for stand-by commitments if such action is deemed necessary, thus
increasing to a degree the cost of the underlying Municipal Obligation and
similarly decreasing such security's yield to investors. Gains realized in
connection with stand-by commitments will be taxable.
TAXABLE INVESTMENTS (Municipal Funds) _ From time to time, on a temporary
basis other than for temporary defensive purposes (but not to exceed 20% of
the value of the Fund's net assets) or for temporary defensive purposes, each
Municipal Fund may invest in taxable short-term investments ("Taxable
Investments") consisting of: notes of issuers having, at the time of
purchase, a quality rating within the two highest grades of Moody's, S&P or
Fitch; obligations of the U.S. Government, its agencies or instrumentalities;
commercial paper rated not lower than P-2 by Moody's, A-2 by S&P or F-2 by
Fitch; certificates of deposit of U.S. domestic banks, including foreign
branches of domestic banks, with assets of one billion dollars or more; time
deposits; bankers' acceptances and other short-term bank obligations; and
repurchase agreements in respect of any of the foregoing. Dividends paid by
the Fund that are attributable to income earned by the Fund from Taxable
Investments will be taxable to investors. See "Dividends, Distributions and
Taxes." Except for temporary defensive purposes, at no time will more than
20% of the value of the Fund's net assets be invested in Taxable Investments.
If the Fund purchases Taxable Investments, it will value them using the
amortized cost method and comply with the provisions of Rule 2a-7 relating to
purchases of taxable instruments. When the California Municipal Fund or New
York Municipal Fund has adopted a temporary defensive position, including
when acceptable California or New York Municipal Obligations are unavailable
for investment by the relevant Fund, in excess of 35% of the Fund's net
assets may be invested in securities that are not exempt from California or
New York State and New York City income taxes, respectively. Under normal
market conditions, the Fund anticipates that not more than 5% of the value of
its total assets will be invested in any one category of Taxable Investments.
Taxable Investments are more fully described in the Statement of Additional
Information to which reference hereby is made.
ILLIQUID SECURITIES _ Each Fund may invest up to 10% of the value of its net
assets in securities as to which a liquid trading market does not exist,
provided such investments are consistent with the Fund's investment
objective. Such securities may include securities that are not readily
marketable, such as certain securities that are subject to legal or
contractual restrictions on resale, and repurchase agreements providing for
settlement in more than seven days after notice. As to these securities, the
Fund is subject to a risk that should the Fund desire to sell them when a
ready buyer is not available at a price the Fund deems representative of
their value, the value of the Fund's net assets could be adversely affected.
[Page 29]
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS AND IN THE FUND'S OFFICIAL SALES LITERATURE IN CONNECTION WITH THE
OFFER OF THE FUND'S SHARES, AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
FUND. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER IN ANY STATE IN WHICH, OR
TO ANY PERSON TO WHOM, SUCH OFFERING MAY NOT LAWFULLY BE MADE.
[Page 30]
[This Page Intentionally Left Blank]
[Page 31]
General Government Securities
Money Market Fund, Inc.
General Money Market Fund, Inc.
General California Municipal
Money Market Fund
General Municipal
Money Market Fund, Inc.
General New York Municipal
Money Market Fund
Combined Prospectus
[lion logo]
CLASS A SHARES
CopyRight 1997 Dreyfus Service Corporation
GEN/p1297A
[Page 32]
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COMBINED PROSPECTUS December 1, 1997
GENERAL GOVERNMENT SECURITIES MONEY MARKET FUND, INC.
GENERAL MONEY MARKET FUND, INC.
GENERAL CALIFORNIA MUNICIPAL MONEY MARKET FUND
GENERAL MUNICIPAL MONEY MARKET FUND, INC.
GENERAL NEW YORK MUNICIPAL MONEY MARKET FUND
CLASS B SHARES
- -----------------------------------------------------------------------------
General Government Securities Money Market Fund, Inc. (the
"Government Money Fund"), General Money Market Fund, Inc. (the "Money Fund"),
General California Municipal Money Market Fund (the "California Municipal
Fund"), General Municipal Money Market Fund, Inc. (the "National Municipal
Fund") and General New York Municipal Money Market Fund (the "New York
Municipal Fund") are open-end management investment companies, known as money
market mutual funds. Each Fund seeks to provide you with as high a level of
current income as is consistent with the preservation of capital and the
maintenance of liquidity. In addition, each of the California Municipal Fund,
the National Municipal Fund and the New York Municipal Fund seeks to provide
current income exempt from Federal income tax and, in the case of the
California Municipal Fund, exempt from State of California income taxes, and,
in the case of the New York Municipal Fund, exempt from New York State and
New York City income taxes.
THE DREYFUS CORPORATION PROFESSIONALLY MANAGES EACH FUND'S PORTFOLIO.
AN INVESTMENT IN THE FUNDS IS NEITHER INSURED NOR GUARANTEED BY THE
U.S. GOVERNMENT. THERE CAN BE NO ASSURANCE THAT THE FUNDS WILL BE ABLE TO
MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE.
Since each of the California Municipal Fund and the New York
Municipal Fund may invest a significant portion of its assets in a single
issuer, an investment in these Funds may involve greater risk than
investments in certain other types of money market funds.
(cover page continued on next page)
THIS PROSPECTUS SETS FORTH CONCISELY INFORMATION ABOUT EACH FUND THAT
YOU SHOULD KNOW BEFORE INVESTING. IT SHOULD BE READ AND RETAINED FOR FUTURE
REFERENCE.
A STATEMENT OF ADDITIONAL INFORMATION, DATED DECEMBER 1, 1997, WHICH
MAY BE REVISED FROM TIME TO TIME, PROVIDES A FURTHER DISCUSSION OF CERTAIN
AREAS IN THIS PROSPECTUS AND OTHER MATTERS WHICH MAY BE OF INTEREST TO SOME
INVESTORS. IT HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION AND
IS INCORPORATED HEREIN BY REFERENCE. THE SECURITIES AND EXCHANGE COMMISSION
MAINTAINS A WEB SITE (HTTP://WWW.SEC.GOV) THAT CONTAINS THE STATEMENT OF
ADDITIONAL INFORMATION, MATERIAL INCORPORATED BY REFERENCE, AND OTHER
INFORMATION REGARDING THE FUNDS. FOR A FREE COPY OF THE STATEMENT OF
ADDITIONAL INFORMATION, WRITE TO A FUND AT 144 GLENN CURTISS BOULEVARD,
UNIONDALE, NEW YORK 11556-0144, OR CALL 1-800-645-6561. WHEN TELEPHONING, ASK
FOR OPERATOR 144.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
OR ENDORSED BY, ANY BANK, AND ARE NOT FEDERALLY INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER
AGENCY. MONEY MARKET MUTUAL FUND SHARES INVOLVE CERTAIN INVESTMENT RISKS,
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
- -----------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
- -----------------------------------------------------------------------------
(CONTINUED FROM COVER PAGE)
YOU CAN INVEST, REINVEST OR REDEEM SHARES AT ANY TIME WITHOUT CHARGE
OR PENALTY IMPOSED BY A FUND.
FUND SHARES MAY BE PURCHASED ONLY BY CLIENTS OF SERVICE AGENTS AS
DESCRIBED HEREIN. BY THIS PROSPECTUS, EACH FUND IS OFFERING CLASS B SHARES.
ANOTHER CLASS OF FUND SHARES - CLASS A SHARES - ARE OFFERED BY THE FUNDS
PURSUANT TO A SEPARATE PROSPECTUS AND ARE NOT OFFERED HEREBY. CLASS A AND
CLASS B SHARES ARE IDENTICAL, EXCEPT AS TO THE SERVICES OFFERED TO, AND THE
EXPENSES BORNE BY, EACH CLASS WHICH MAY AFFECT PERFORMANCE. IF YOU WOULD LIKE
TO OBTAIN INFORMATION ABOUT CLASS A SHARES, PLEASE WRITE TO THE ADDRESS OR
CALL THE NUMBER SET FORTH ON THE COVER PAGE.
EACH FUND IS A SEPARATE ENTITY WITH A SEPARATE PORTFOLIO. THE
OPERATIONS AND RESULTS OF ONE FUND ARE UNRELATED TO THOSE OF EACH OTHER FUND.
THIS COMBINED PROSPECTUS HAS BEEN PREPARED FOR YOUR CONVENIENCE TO PROVIDE
YOU THE OPPORTUNITY TO CONSIDER FIVE INVESTMENT CHOICES IN ONE DOCUMENT.
TABLE OF CONTENTS
Page
Annual Fund Operating Expenses........................... 4
Condensed Financial Information.......................... 5
Yield Information........................................ 7
Description of the Funds................................. 8
Management of the Funds.................................. 12
How to Buy Shares........................................ 13
Shareholder Services..................................... 16
How to Redeem Shares..................................... 19
Distribution Plan........................................ 22
Shareholder Services Plan................................ 22
Dividends, Distributions and Taxes....................... 22
General Information...................................... 24
Appendix................................................. 26
[Page 2]
[This Page Intentionally Left Blank]
[Page 3]
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average daily net assets)
GOVERNMENT
MONEY MONEY
FUND FUND
________ ________
<S> <C> <C>
Management Fees.......................................................... .50% .50%
12b-1 Fees............................................................... .20% .20%
Other Expenses........................................................... .38% .37%
Total Fund Operating Expenses............................................ 1.08% 1.07%
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
EXAMPLE:
You would pay the following expenses on
a $1,000 investment, assuming (1) 5% annual
return and (2) redemption at the end of
each time period:
1 YEAR $ 11 $ 11
3 YEARS $ 34 $ 34
5 YEARS $ 60 $ 59
10 YEARS $132 $131
CALIFORNIA NATIONAL NEW YORK
MUNICIPAL MUNICIPAL MUNICIPAL
FUND FUND FUND
________ _________ ____________
Management Fees............................................ .50% .50% .50%
12b-1 Fees................................................... .20% .20% .20%
Other Expenses............................................... .37% .44% .41%
Total Fund Operating Expenses............................... 1.07% 1.14% 1.11%
EXAMPLE:
You would pay the following expenses on
a $1,000 investment, assuming (1) 5% annual
return and (2) redemption at the end of
each time period:
1 YEAR $ 11 $ 12 $ 11
3 YEARS $ 34 $ 36 $ 35
5 YEARS $ 59 $ 63 $ 61
10 YEARS $132 $139 $135
</TABLE>
- ----------------------------------------------------------------------------
THE AMOUNTS LISTED IN THE EXAMPLE SHOULD NOT BE CONSIDERED AS
REPRESENTATIVE OF PAST OR FUTURE EXPENSES AND ACTUAL EXPENSES MAY BE GREATER
OR LESS THAN THOSE INDICATED. MOREOVER, WHILE THE EXAMPLE ASSUMES A 5% ANNUAL
RETURN, EACH FUND'S ACTUAL PERFORMANCE WILL VARY AND MAY RESULT IN AN ACTUAL
RETURN GREATER OR LESS THAN 5%.
- ----------------------------------------------------------------------------
The purpose of the foregoing tables is to assist you in understanding
the costs and expenses borne by each Fund, the payment of which will reduce
investors' annual return. The information in the foregoing table does not
reflect any fee waivers or expense reimbursement arrangements that may be in
effect. Each Fund's Class B shares are charged directly for sub-accounting
services provided by Service Agents (as defined below) at the annual rate of
.05% of the value of the Fund's average daily net assets attributable to
Class B, which is reflected under "Other Expenses" in the foregoing table.
Certain Service Agents may charge their clients direct fees for effecting
transactions in Fund shares; such fees are not reflected in the foregoing
table. See "Management of the Funds," "How to Buy Shares," "Distribution
Plan" and "Shareholder Services Plan."
[Page 4]
CONDENSED FINANCIAL INFORMATION
The information in the following tables has been audited (except
where noted) by Ernst & Young LLP, each Fund's independent auditors. Further
financial data, related notes and report of independent auditors for each
Fund accompany the Statement of Additional Information, available upon
request.
FINANCIAL HIGHLIGHTS
Government Money Fund _ Contained below is per share operating performance
data for a Class B share of Common Stock outstanding, total investment
return, ratios to average net assets and other supplemental data for each
period indicated. This information has been derived from the Government Money
Fund's financial statements.
<TABLE>
<CAPTION>
Government Money Fund
______________________________________________________
FISCAL YEAR SIX MONTHS ENDED
ENDED JULY 31,
JANUARY 31, (UNAUDITED)
_________________________ _________________
PER SHARE DATA: 1996(1) 1997 1997
________ _______ ________
<S> <C> <C> <C>
Net asset value, beginning of period...................... $ 1.00 $ 1.00 $ 1.00
________ _______ ________
INVESTMENT OPERATIONS:
Investment income-net..................................... .042 .045 .023
________ _______ ________
DISTRIBUTIONS:
Dividends from investment income-net...................... (.042) (.045) (.023)
________ _______ ________
Net asset value, end of period............................ $ 1.00 $ 1.00 $ 1.00
========= ======= ========
TOTAL INVESTMENT RETURN................................... 5.04%(2) 4.58% 4.62%(2)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets................... 1.00%(2) 1.00% 1.00%(2)
Ratio of net investment income to average net assets...... 5.01%(2) 4.48% 4.54%(2)
Decrease reflected in above expense ratios due to undertakings by
The Dreyfus Corporation................................... .10%(2) .08% .09%(2)
Net Assets, end of period (000's omitted)................. $58 $90,175 $326,149
(1) From March 31, 1995 (commencement of initial offering) to January 31, 1996.
(2) Annualized.
</TABLE>
<TABLE>
<CAPTION>
Money Fund _ Contained below is per share operating performance data for a
Class B share of Common Stock outstanding, total
investment return, ratios to average net assets and other supplemental data
for each period indicated. This information has been derived from the Money
Fund's financial statements.
Money Fund
______________________________________________________
FISCAL YEAR SIX MONTHS ENDED
ENDED JULY 31,
JANUARY 31, (UNAUDITED)
_________________________ _________________
PER SHARE DATA: 1996(1) 1997 1997
________ _______ ________
<S> <C> <C> <C>
Net asset value, beginning of period...................... $ 1.00 $ 1.00 $ 1.00
________ _______ ________
INVESTMENT OPERATIONS:
Investment income-net .................................... .043 .046 .023
________ _______ ________
DISTRIBUTIONS:
Dividends from investment income-net...................... (.043) (.046) (.023)
________ _______ ________
Net asset value, end of period............................ $ 1.00 $ 1.00 $ 1.00
========= ======= ========
TOTAL INVESTMENT RETURN..................................... 5.18%(2) 4.65% 4.76%(2)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets .................. 1.00%((2) 1.00% 1.00%(2)
Ratio of net investment income to average net assets ..... 5.00%(2) 4.56% 4.70%(2)
Decrease reflected in above expense ratios due to
undertakings by The Dreyfus Corporation................... .07%(2) .07% .07%(2)
Net Assets, end of period (000's omitted)................. $50,446 $369,205 $1,033,105
(1) From March 31, 1995 (commencement of initial offering) to January 31, 1996.
(2) Annualized.
</TABLE>
[Page 5]
<TABLE>
<CAPTION>
CALIFORNIA MUNICIPAL FUND _ Contained below is per share operating performance
data for a Class B share of beneficial interest outstanding, total investment
return, ratios to average net assets and other supplemental data for each
period indicated. This information has been derived from the California
Municipal Fund's financial statements.
CALIFORNIA MUNICIPAL FUND
__________________________
FISCAL YEAR
ENDED
JULY 31,
__________________________
PER SHARE DATA: 1996(1) 1997
_________ _______
<S> <C> <C>
Net asset value, beginning of period............................. $ 1.00 $ 1.00
_________ _______
INVESTMENT OPERATIONS:
Investment income-net............................................ .025 .026
_________ _______
DISTRIBUTIONS:
Dividends from investment income - net........................... (.025) (.026)
_________ _______
Net asset value, end of period................................... $ 1.00 $ 1.00
========= =======
TOTAL INVESTMENT RETURN.......................................... 2.56% 2.61%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets.......................... .1.00% 1.00%
Ratio of net investment income to average net assets............. 2.45% 2.52%
Decrease reflected in above expense ratios due to
undertakings by The Dreyfus Corporation ......................... .08% .07%
Net Assets, end of period (000's omitted)........................ $5,475 $928
(1) From August 1, 1995 (commencement of initial offering) to July 31, 1996.
</TABLE>
<TABLE>
<CAPTION>
NATIONAL MUNICIPAL FUND _ Contained below is per share operating performance
data for a Class B share of Common Stock
outstanding, total investment return, ratios to average net assets and other
supplemental data for each period indicated. This information has been
derived from the National Municipal Fund's financial statements.
NATIONAL MUNICIPAL FUND
______________________________________________________
FISCAL YEAR SIX MONTHS ENDED
ENDED MAY 31,
NOVEMBER 30, (UNAUDITED)
_________________________ _________________
PER SHARE DATA: 1995(1) 1996 1997
________ _______ ________
<S> <C> <C> <C>
Net asset value, beginning of period...................... $ 1.00 $ 1.00 $ 1.00
________ _______ ________
INVESTMENT OPERATIONS:
Investment income-net..................................... .020 .027 .014
________ _______ ________
DISTRIBUTIONS:
Dividends from investment income - net.................... (.020) (.027) (.014)
________ _______ ________
Net asset value, end of period............................ $ 1.00 $ 1.00 $ 1.00
========= ======= ========
TOTAL INVESTMENT RETURN................................... 3.01%(2) 2.70% 2.83%(2)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets................... 1.10%(2) ..85% .89%(2)
Ratio of net investment income to average net assets...... 2.83%(2) 2.65% 3.00%(2)
Decrease reflected in above expense ratios due to
undertakings by The Dreyfus Corporation .................. .09%(2) .29% .32%(2)
Net Assets, end of period (000's omitted)............... $3,024 $17,491 $195,579
(1) From March 31, 1995 (commencement of initial offering) to November 30, 1995.
(2) Annualized.
</TABLE>
<TABLE>
<CAPTION>
[Page 6]
#
New York Municipal Fund _ Contained below is per share operating performance
data for a Class B share of beneficial interest outstanding, total investment
return, ratios to average net assets and other supplemental data for each
period indicated. This information has been derived from the New York
Municipal Fund's financial statements.
NEW YORK MUNICIPAL FUND
______________________________________________________
FISCAL YEAR SIX MONTHS ENDED
ENDED MAY 31,
NOVEMBER 30, (UNAUDITED)
_________________________ _________________
PER SHARE DATA: 1995(1) 1996 1997
________ _______ ________
<S> <C> <C> <C>
Net asset value, beginning of period...................... $ 1.00 $ 1.00 $ 1.00
________ _______ ________
INVESTMENT OPERATIONS:
Investment income-net..................................... . .006 .025 .013
________ _______ ________
DISTRIBUTIONS:
Dividends from investment income-net...................... (.006) (.025) (.013)
________ _______ ________
Net asset value, end of period............................ $ 1.00 $ 1.00 $ 1.00
========= ======= ========
TOTAL INVESTMENT RETURN..................................... 2.82%(2) 2.55% 2.61%(2)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets................... 1.04%(2) .95% .95%(2)
Ratio of net investment income to average net assets...... 3.64%(2) 2.47% 2.58%(2)
Decrease reflected in above expense ratios due to undertakings by
The Dreyfus Corporation................................... -- .16% .10%(2)
Net Assets, end of period (000's omitted)................. -- $36,199 $35,859
(1) From September 8, 1995 (commencement of initial offering) to
November 30, 1995.
(2) Annualized.
</TABLE>
YIELD INFORMATION
From time to time, each Fund advertises its yield and effective
yield. Both yield figures are based on historical earnings and are not
intended to indicate future performance. It can be expected that these yields
will fluctuate substantially. A Fund's yield refers to the income generated
by an investment in such Fund over a seven-day period (which period will be
stated in the advertisement). This income is then "annualized." That is, the
amount of income generated by the investment during that week is assumed to
be generated each week over a 52-week period and is shown as a percentage of
the investment. The effective yield is calculated similarly, but, when
annualized, the income earned by an investment in the Fund is assumed to be
reinvested. The effective yield will be slightly higher than the yield
because of the compounding effect of this assumed reinvestment. A Fund's
yield and effective yield may reflect absorbed expenses pursuant to any
undertaking that may be in effect. See "Management of the Funds."
As to the California Municipal Fund, the National Municipal Fund and
the New York Municipal Fund (collectively, the "Municipal Funds"), tax
equivalent yield is calculated by determining the pre-tax yield which, after
being taxed at a stated rate (in the case of the California Municipal Fund
and New York Municipal Fund typically the highest combined Federal and
California, or New York State and New York City, respectively, personal
income tax rates), would be equivalent to a stated yield or effective yield
calculated as described above.
Yield information is useful in reviewing a Fund's performance, but
because yields will fluctuate, under certain conditions such information may
not provide a basis for comparison with domestic bank deposits, other
investments which pay a fixed yield for a stated period of time, or other
investment companies which may use a different method of computing yield.
Comparative performance information may be used from time to time in
advertising or marketing Fund shares, including data from Lipper Analytical
Services, Inc., Bank Rate Monitortrademark, N. Palm Beach, Fla. 33408, IBC's
Money Fund ReportTM, Morningstar, Inc. and other industry publications.
[Page 7]
DESCRIPTION OF THE FUNDS
INVESTMENT OBJECTIVE
The investment objective of the Government Money Fund and the Money
Fund is to provide you with as high a level of current income as is
consistent with the preservation of capital and, in the case of the
Government Money Fund, the maintenance of liquidity. The investment objective
of the Municipal Funds is to maximize current income exempt from Federal
income tax to the extent consistent with the preservation of capital and the
maintenance of liquidity and, in the case of the California Municipal Fund,
exempt from State of California income taxes, and, in the case of the New
York Municipal Fund, exempt from New York State and New York City income
taxes. Each Fund's investment objective cannot be changed without approval by
the holders of a majority (as defined in the Investment Company Act of 1940,
as amended (the "1940 Act")) of such Fund's outstanding voting shares. There
can be no assurance that a Fund's investment objective will be achieved. Each
Fund pursues its investment objective in the manner described below.
Securities in which a Fund invests may not earn as high a level of current
income as long-term or lower quality securities which generally have less
liquidity, greater market risk and more fluctuation in market value.
MANAGEMENT POLICIES
Each Fund seeks to maintain a net asset value of $1.00 per share for
purchases and redemptions. To do so, each Fund uses the amortized cost method
of valuing its securities pursuant to Rule 2a-7 under the 1940 Act, which
Rule includes various maturity, quality and diversification requirements,
certain of which are summarized as follows. In accordance with Rule 2a-7,
each Fund is required to maintain a dollar-weighted average portfolio
maturity of 90 days or less, purchase only instruments having remaining
maturities of 13 months or less and invest only in U.S. dollar denominated
securities determined in accordance with procedures established by the Fund's
Board to present minimal credit risks and, in the case of the Money Fund and
each Municipal Fund, which are rated in one of the two highest rating
categories for debt obligations by at least two nationally recognized
statistical rating organizations (or one rating organization if the
instrument was rated by only one such organization) or, if unrated, are of
comparable quality as determined in accordance with procedures established by
the Fund's Board. The nationally recognized statistical rating organizations
currently rating instruments of the type the Money Fund and each Municipal
Fund may purchase are Moody's Investors Service, Inc. ("Moody's"), Standard &
Poor's Ratings Group ("S&P"), Duff & Phelps Credit Rating Co., Fitch
Investors Service, L.P. ("Fitch"), IBCA Limited and IBCA Inc. and Thomson
BankWatch, Inc. and their rating criteria are described in the "Appendix" to
the Statement of Additional Information. This discussion concerning
investment ratings does not apply to the Government Money Fund because it
invests exclusively in U.S. Government securities and repurchase agreements
in respect thereof. For further information regarding the amortized cost
method of valuing securities, see "Determination of Net Asset Value" in the
Statement of Additional Information. There can be no assurance a Fund will be
able to maintain a stable net asset value of $1.00 per share.
Each of the Government Money Fund, the Money Fund and the National
Municipal Fund is classified as a diversified investment company. Each of the
California Municipal Fund and the New York Municipal Fund is classified as a
non-diversified investment company.
GOVERNMENT MONEY FUND _ The Fund invests in securities issued or guaranteed
as to principal and interest by the U.S. Government or its agencies or
instrumentalities, and repurchase agreements in respect of such securities.
See "Appendix _ Certain Portfolio Securities."
MONEY FUND _ The Fund invests in short-term money market obligations,
including securities issued or guaranteed by the U.S. Government or its
agencies or instrumentalities, time deposits, certificates of deposit,
bankers' acceptances and other short-term obligations issued by domestic
banks, foreign
[Page 8]
subsidiaries or foreign branches of domestic banks, domestic and foreign
branches of foreign banks and thrift institutions, repurchase agreements,
asset-backed securities, and high quality domestic and foreign commercial
paper and other short-term corporate obligations, including those with
floating or variable rates of interest. The Fund may invest in U.S. dollar
denominated obligations issued or guaranteed by one or more foreign
governments or any of their political subdivisions, agencies or instrumentalit
ies, including obligations of supranational entities. See "Appendix _
Certain Portfolio Securities." During normal market conditions, at least 25%
of the value of the Fund's total assets will be invested in bank obligations.
See "Investment Considerations and Risks" below.
NATIONAL MUNICIPAL FUND _ The Fund will invest at least 80% of the value of
its net assets (except when maintaining a temporary defensive position) in
Municipal Obligations. Municipal Obligations are debt obligations issued by
states, territories and possessions of the United States and the District of
Columbia and their political subdivisions, agencies and instrumentalities, or
multistate agencies or authorities, the interest from which is, in the
opinion of bond counsel to the issuer, exempt from Federal income tax.
Municipal Obligations generally include debt obligations issued to obtain
funds for various public purposes as well as certain industrial development
bonds issued by or on behalf of public authorities. Municipal Obligations
bear fixed, floating or variable rates of interest. See "Appendix_Certain
Portfolio Securities."
From time to time, the Fund may invest more than 25% of the value of
its total assets in industrial development bonds which, although issued by
industrial development authorities, may be backed only by the assets and
revenues of the non-governmental users. Interest on Municipal Obligations
(including certain industrial development bonds) which are specified private
activity bonds, as defined in the Internal Revenue Code of 1986, as amended
(the "Code"), issued after August 7, 1986, while exempt from Federal income
tax, is a preference item for the purpose of the alternative minimum tax.
Where a regulated investment company receives such interest, a proportionate
share of any exempt-interest dividend paid by the investment company may be
treated as such a preference item to shareholders. The Fund may invest
without limitation in such Municipal Obligations if The Dreyfus Corporation
determines that their purchase is consistent with the Fund's investment
objective. See "Investment Considerations and Risks" below.
From time to time, on a temporary basis other than for temporary
purposes (but not to exceed 20% of the value of the Fund's net assets) or for
temporary defensive purposes, the Fund may invest in taxable money market
instruments ("Taxable Investments") of the quality described under "Appendix
_ Certain Portfolio Securities _ Taxable Investments."
CALIFORNIA MUNICIPAL FUND _ The Fund's management policies are identical to
those of the National Municipal Fund, except that, under normal
circumstances, at least 65% of the value of the Fund's net assets will be
invested in debt securities of the State of California, its political
subdivisions, authorities and corporations, the interest from which is, in
the opinion of bond counsel to the issuer, exempt from Federal and State of
California personal income taxes (collectively, "California Municipal
Obligations"). The remainder of the Fund's assets may be invested in
securities that are not California Municipal Obligations and therefore may be
subject to California income taxes. To the extent acceptable California
Municipal Obligations are at any time unavailable for investment by the Fund,
the Fund will invest temporarily in other Municipal Obligations which may be
subject to State of California income tax and in Taxable Investments. See
"Investment Considerations and Risks_Investing in California Municipal
Obligations" below, "Dividends, Distributions and Taxes" and "Appendix _
Certain Portfolio Securities."
NEW YORK MUNICIPAL FUND _ The Fund's management policies are identical to
those of the National Municipal Fund, except that, under normal
circumstances, at least 65% of the value of the Fund's net assets will be
invested in debt securities of the State of New York, its political
subdivisions, authorities and corporations, the interest from which is, in
the opinion of bond counsel to the issuer, exempt from Federal, New York
State, and New York City income taxes (collectively, "New York Municipal
[Page 9]
Obligations").The remainder of the Fund's assets may be invested in
securities that are not New York Municipal Obligations and therefore may be
subject to New York State and New York City income taxes. To the extent
acceptable New York Municipal Obligations are at any time unavailable for
investment by the Fund, the Fund will invest temporarily in other Municipal
Obligations which may be subject to New York State and New York City income
tax and in Taxable Investments. See "Investment Considerations and Risks _
Investing in New York Municipal Obligations" below, "Dividends, Distributions
and Taxes" and "Appendix _ Certain Portfolio Securities."
INVESTMENT CONSIDERATIONS AND RISKS
GENERAL _ Each Fund attempts to increase yields by trading to take advantage
of short-term market variations. This policy is expected to result in high
portfolio turnover but should not adversely affect a Fund since each Fund
usually does not pay brokerage commissions when it purchases short-term debt
obligations, including U.S. Government securities. The value of the portfolio
securities held by each Fund will vary inversely to changes in prevailing
interest rates. Thus, if interest rates have increased from the time a
security was purchased, such security, if sold, might be sold at a price less
than its cost. Similarly, if interest rates have declined from the time a
security was purchased, such security, if sold, might be sold at a price
greater than its purchase cost. In either instance, if the security was
purchased at face value and held to maturity, no gain or loss would be
realized.
FOREIGN SECURITIES (MONEY FUND ONLY) _ Since the Fund's portfolio may
contain securities issued by foreign governments, or any of their political
subdivisions, agencies or instrumentalities, and by foreign subsidiaries and
foreign branches of domestic banks, domestic and foreign branches of foreign
banks, and commercial paper issued by foreign issuers, the Fund may be
subject to additional investment risks with respect to those securities that
are different in some respects from those incurred by a fund which invests
only in debt obligations of U.S. domestic issuers, although such obligations
may be higher yielding when compared to the securities of U.S. domestic
issuers. Such risks include possible future political and economic
developments, seizure or nationalization of foreign deposits, imposition of
foreign withholding taxes on interest income payable on the securities,
establishment of exchange controls or adoption of other foreign governmental
restrictions which might adversely affect the payment of principal and
interest on these securities.
BANK SECURITIES (MONEY FUND ONLY) _ To the extent the Fund's investments are
concentrated in the banking industry, the Fund will have correspondingly
greater exposure to the risk factors which are characteristic of such
investments. Sustained increases in interest rates can adversely affect the
availability or liquidity and cost of capital funds for a bank's lending
activities, and a deterioration in general economic conditions could increase
the exposure to credit losses. In addition, the value of and the investment
return on the Fund's shares could be affected by economic or regulatory
developments in or related to the banking industry, which industry also is
subject to the effects of competition within the banking industry as well as
with other types of financial institutions. The Fund, however, will seek to
minimize its exposure to such risks by investing only in debt securities
which are determined to be of high quality.
INVESTING IN MUNICIPAL OBLIGATIONS (MUNICIPAL FUNDS) _ Each of the Municipal
Funds may invest more than 25% of the value of its total assets in Municipal
Obligations which are related in such a way that an economic, business or
political development or change affecting one such security also would affect
the other securities; for example, securities the interest upon which is paid
from revenues of similar types of projects. As a result, each of these Funds
may be subject to greater risk as compared to a fund that does not follow
this practice.
Certain municipal lease/purchase obligations in which each of the
Municipal Funds may invest may contain "non-appropriation" clauses which
provide that the municipality has no obligation to make lease payments in
future years unless money is appropriated for such purpose on a yearly basis.
Although "non-appropriation" lease/purchase obligations are secured by the
leased property, disposition of the leased property in the event of
foreclosure might prove difficult. In evaluating the credit quality of
[Page 10]
a municipal lease/purchase obligation that is unrated, The Dreyfus
Corporation will consider, on an ongoing basis, a number of factors including
the likelihood that the issuing municipality will discontinue appropriating
funding for the leased property.
Certain provisions in the Code relating to the issuance of Municipal
Obligations may reduce the volume of Municipal Obligations qualifying for
Federal tax exemption. One effect of these provisions could be to increase
the cost of the Municipal Obligations available for purchase by the Fund and
thus reduce available yield. Shareholders should consult their tax advisers
concerning the effect of these provisions on an investment in any of the
Municipal Funds. Proposals that may restrict or eliminate the income tax
exemption for interest on Municipal Obligations may be introduced in the
future. If any such proposal were enacted that would reduce the availability
of Municipal Obligations for investment by the Municipal Funds so as to
adversely affect Fund shareholders, each Fund would reevaluate its investment
objective and policies and submit possible changes in the Fund's structure to
shareholders for their consideration. If legislation were enacted that would
treat a type of Municipal Obligation as taxable, the Municipal Funds would
treat such security as a permissible Taxable Investment within the applicable
limits set forth herein.
INVESTING IN CALIFORNIA MUNICIPAL OBLIGATIONS (CALIFORNIA MUNICIPAL FUND
ONLY) _ Since the California Municipal Fund is concentrated in securities
issued by California or entities within California, an investment in the Fund
may involve greater risk than investments in certain other types of money
market funds. You should consider carefully the special risks inherent in
investing principally in California Municipal Obligations. These risks result
from certain amendments to the California Constitution and other statutes
that limit the taxing and spending authority of California governmental
entities, as well as from the general financial condition of the State of
California. A severe recession from 1990 through fiscal 1994 reduced revenues
and increased expenditures for social welfare programs, resulting in a period
of budget imbalance. During this period, expenditures exceeded revenues in
four out of six years, and the State accumulated and sustained a budget
deficit in its budget reserve, the Special Fund for Economic Uncertainties,
approaching $2.8 billion at its peak at June 30, 1993. By the 1993-94 fiscal
year, the accumulated budget deficit was so large that it was impractical to
budget to retire it in one year, so a two-year program was implemented, using
the issuance of revenue anticipation warrants to carry a portion of the
deficit over the end of the fiscal year. When the economy failed to recover
sufficiently, a second two-year plan was implemented in 1994-95, again using
cross-fiscal year revenue anticipation warrants to partly finance the deficit
into the 1995-96 fiscal year. As a consequence of the accumulated budget
deficits, the State's cash resources available to pay its ongoing obligations
were significantly reduced causing the State to rely increasingly on external
debt markets to meet its cash needs. Future budget problems or a
deterioration in California's general financial condition may have the effect
of impairing the ability of the issuers of California Municipal Obligations
to pay interest on, or repay the principal of, such California Municipal
Obligations. You should obtain and review a copy of the Statement of
Additional Information which more fully sets forth these and other risk
factors.
INVESTING IN NEW YORK MUNICIPAL OBLIGATIONS (NEW YORK MUNICIPAL FUND ONLY) _
Since the New York Municipal Fund is concentrated in securities issued by New
York or entities within New York, an investment in the Fund may involve
greater risk than investments in certain other types of money market funds.
You should consider carefully the special risks inherent in investing
principally in New York Municipal Obligations. These risks result from the
financial condition of New York State, certain of its public bodies and
municipalities, and New York City. Beginning in early 1975, New York State,
New York City and other New York State entities faced serious financial
difficulties which jeopardized the credit standing and impaired the borrowing
abilities of such entities and contributed to high interest rates on, and
lower market prices for, debt obligations issued by them. A recurrence of
such financial difficulties or a failure of certain financial recovery
programs could result in defaults or declines in the market values of various
New
[Page 11]
York Municipal Obligations in which the Fund may invest. If there should be a
default or other financial crisis relating to New York State, New York City,
a State or City agency, or a State municipality, the market value and
marketability of outstanding New York Municipal Obligations in the Fund's
portfolio and the interest income to the Fund could be adversely affected.
Moreover, the national recession and the significant slowdown in the New York
and regional economies in the early 1990's added substantial uncertainty to
estimates of the State's tax revenues, which, in part, caused the State to
incur cash-basis operating deficits in the General Fund and issue deficit
notes during the fiscal periods 1989 through 1992. New York State's financial
operations have improved, however, during recent fiscal years. For its fiscal
years 1993 through 1997, the State recorded balanced budgets on a cash basis,
with positive fund balances in the General Fund. New York State ended its
1996-97 fiscal year on March 31, 1997 in balance on a cash basis, with a cash
surplus in the General Fund of approximately $1.4 billion. There can be no
assurance that New York State will not face substantial potential budget gaps
in future years. You should obtain and review a copy of the Statement of
Additional Information which more fully sets forth these and other risk
factors.
NON-DIVERSIFIED STATUS (CALIFORNIA MUNICIPAL FUND AND NEW YORK MUNICIPAL
FUND) _ The classification of each of these Funds as a "non-diversified"
investment company means that the proportion of the Fund's assets that may be
invested in the securities of a single issuer is not limited by the 1940 Act.
A "diversified" investment company is required by the 1940 Act generally,
with respect to 75% of its total assets, to invest not more than 5% of such
assets in the securities of a single issuer. Since a relatively high
percentage of each Fund's assets may be invested in the obligations of a
limited number of issuers, the Fund's portfolio may be more sensitive to
changes in the market value of a single issuer. However, to meet Federal tax
requirements, at the close of each quarter each Fund may not have more than
25% of its total assets invested in any one issuer and, with respect to 50%
of total assets, not more than 5% of its total assets invested in any one
issuer. These limitations do not apply to U.S. Government securities.
SIMULTANEOUS INVESTMENTS _ Investment decisions for each Fund are made
independently from those of other investment companies advised by The Dreyfus
Corporation. If, however, such other investment companies desire to invest
in, or dispose of, the same securities as a Fund, available investments or
opportunities for sales will be allocated equitably to each investment
company. In some cases, this procedure may adversely affect the size of the
position obtained for or disposed of by the Fund or the price paid or
received by the Fund.
MANAGEMENT OF THE FUNDS
INVESTMENT ADVISER _ The Dreyfus Corporation, located at 200 Park Avenue,
New York, New York 10166, was formed in 1947 and serves as each Fund's
investment adviser. The Dreyfus Corporation is a wholly-owned subsidiary of
Mellon Bank, N.A., which is a wholly-owned subsidiary of Mellon Bank
Corporation ("Mellon"). As of October 31, 1997, The Dreyfus Corporation
managed or administered approximately $93 billion in assets for approximately
1.7 million investor accounts nationwide.
The Dreyfus Corporation supervises and assists in the overall
management of each Fund's affairs under a separate Management Agreement with
the Fund, subject to the authority of the Fund's Board in accordance with
applicable State law.
Mellon is a publicly owned multibank holding company incorporated
under Pennsylvania law in 1971 and registered under the Federal Bank Holding
Company Act of 1956, as amended. Mellon provides a comprehensive range of
financial products and services in domestic and selected international
markets. Mellon is among the twenty-five largest bank holding companies in
the United States based on total assets. Mellon's principal wholly-owned
subsidiaries are Mellon Bank, N.A., Mellon Bank (DE) National Association,
Mellon Bank (MD), The Boston Company, Inc., AFCO Credit Corporation and a
number of companies known as Mellon Financial Services Corporations. Through
its subsidiaries, including The Dreyfus Corporation, Mellon managed more than
$286 billion in assets as of September 30, 1997,
[Page 12]
including approximately $102 billion in proprietary mutual fund assets. As of
September 30, 1997, Mellon, through various subsidiaries, provided
non-investment services, such as custodial or administration services, for
more than $1.488 trillion in assets, including approximately $60 billion in
mutual fund assets.
For each Fund's most recent fiscal year, each Fund paid The Dreyfus
Corporation a monthly management fee at the annual rate of .50 of 1% of the
value of such Fund's average daily net assets. From time to time, The Dreyfus
Corporation may waive receipt of its fees and/or voluntarily assume certain
expenses of a Fund, which would have the effect of lowering the expense ratio
of such Fund and increasing yield to investors. No Fund will pay The Dreyfus
Corporation at a later time for any amounts it may waive, nor will a Fund
reimburse The Dreyfus Corporation for any amounts it may assume.
In allocating brokerage transactions, The Dreyfus Corporation seeks
to obtain the best execution of orders at the most favorable net price.
Subject to this determination, The Dreyfus Corporation may consider, among
other things, the receipt of research services and/or the sale of shares of a
Fund or other funds managed, advised or administered by The Dreyfus
Corporation as factors in the selection of broker-dealers to execute
portfolio transactions for each Fund. See "Portfolio Transactions" in the Stat
ement of Additional Information.
The Dreyfus Corporation may pay the Funds' distributor for
shareholder services from The Dreyfus Corporation's own assets, including
past profits but not including the management fee paid by the Funds. The
Funds' distributor may use part or all of such payments to pay Service Agents
in respect of these services.
DISTRIBUTOR _ Each Fund's distributor is Premier Mutual Fund Services, Inc.
(the "Distributor"), located at 60 State Street, Boston, Massachusetts 02109.
The Distributor's ultimate parent is Boston Institutional Group, Inc.
TRANSFER AND DIVIDEND DISBURSING AGENT AND CUSTODIAN _ Dreyfus Transfer,
Inc., a wholly-owned subsidiary of The Dreyfus Corporation, P.O. Box 9671,
Providence, Rhode Island 02940-9671, is each Fund's Transfer and Dividend
Disbursing Agent (the "Transfer Agent"). The Bank of New York, 90 Washington
Street, New York, New York 10286, is each Fund's Custodian.
HOW TO BUY SHARES
Each Fund's shares may be purchased only by clients of certain
financial institutions (which may include banks), securities dealers
("Selected Dealers"), and other industry professionals such as investment
advisers, accountants and estate planning firms (collectively, "Service
Agents") that have entered into service agreements with the Distributor. For
shareholders who purchase Fund shares from the Distributor, the Distributor
will act as Service Agent. Stock certificates are issued only upon your writte
n request. No certificates are issued for fractional shares. It is not
recommended that the Municipal Funds be used as a vehicle for Keogh, IRA or
other qualified plans. Each Fund reserves the right to reject any purchase
order.
The minimum initial investment in each Fund is $2,500, or $1,000 if
you are a client of a Service Agent which maintains an omnibus account in the
relevant Fund and has made an aggregate minimum initial purchase in the Fund
for its customers of $2,500. Subsequent investments must be at least $100.
For the Government Money Fund and Money Fund, however, the minimum initial
investment is $750 for Dreyfus-sponsored Keogh Plans, IRAs (including regular
IRAs, spousal IRAs for a non-working spouse, Roth IRAs, SEP-IRAs and rollover
IRAs) and 403(b)(7) Plans with only one participant and $500 for
Dreyfus-sponsored Education IRAs, with no minimum on subsequent purchases.
The initial investment must be accompanied by the Account Application. For
full-time or part-time employees of The Dreyfus Corporation or any of its
affiliates or subsidiaries, directors of The Dreyfus Corporation, Board
members of a fund advised by The Dreyfus Corporation, including members of
each Fund's Board, or the spouse or minor child of any of the foregoing, the
minimum initial investment is $1,000.
[Page 13]
For full-time or part-time employees of The Dreyfus Corporation or any of its
affiliates or subsidiaries who elect to have a portion of their pay directly
deposited into their Fund accounts, the minimum initial investment is $50.
The Government Money Fund and Money Fund reserve the right to offer Fund
shares without regard to minimum purchase requirements to employees
participating in certain qualified and non-qualified employee benefit plans
or other programs where contributions or account information can be
transmitted in a manner and form acceptable to such Fund. Each Fund reserves
the right to vary further the initial and subsequent investment minimum
requirements at any time.
You may purchase Fund shares by check or wire. Checks should be made
payable to "The Dreyfus Family of Funds" or, if for Dreyfus retirement plan
accounts with respect to the Government Money Fund and Money Fund, to "The
Dreyfus Trust Company, Custodian." Payments to open new accounts which are
mailed should be sent to The Dreyfus Family of Funds, P.O. Box 9387,
Providence, Rhode Island 02940-9387, together with your Account Application
indicating that Class B shares are being purchased. For subsequent
investments, your Fund account number should appear on the check and an
investment slip should be enclosed and sent to The Dreyfus Family of Funds,
P.O. Box 105, Newark, New Jersey 07101-0105. For Dreyfus retirement plan
accounts, both initial and subsequent investments should be sent to The
Dreyfus Trust Company, Custodian, P.O. Box 6427, Providence, Rhode Island
02940-6427. Neither initial nor subsequent investments should be made by
third party check. Purchase orders may be delivered in person only to a
Dreyfus Financial Center. THESE ORDERS WILL BE FORWARDED TO THE RELEVANT FUND
AND WILL BE PROCESSED ONLY UPON RECEIPT THEREBY. For the location of the
nearest Dreyfus Financial Center, please call one of the telephone numbers
listed under "General Information." Other purchase procedures may be in
effect for clients of certain Service Agents.
Wire payments may be made, if your bank account is in a commercial
bank that is a member of the Federal Reserve System or any other bank having
a correspondent bank in New York City. Immediately available funds may be
transmitted by wire to The Bank of New York together with the applicable
Fund's DDA# as shown below, for purchase of Fund shares in your name:
DDA # 8900052414/General Government Securities Money Market Fund,
Inc.
DDA # 8900051957/General Money Market Fund, Inc.
DDA # 8900052163/General California Municipal Money Market Fund
DDA # 8900052376/General Municipal Money Market Fund, Inc.
DDA # 8900052171/General New York Municipal Money Market Fund
The wire must include your Fund account number (for new accounts, your
Taxpayer Identification Number ("TIN") should be included instead), account
registration and dealer number, if applicable, and must indicate the Class of
shares being purchased. If your initial purchase of Fund shares is by wire,
please call 1-800-645-6561 after completing your wire payment to obtain your
Fund account number. Please include your Fund account number on the Account
Application and promptly mail the Account Application to the Fund, as no
redemptions will be permitted until the Account Application is received. You
may obtain further information about remitting funds in this manner from your
bank. All payments should be made in U.S. dollars and, to avoid fees and
delays, should be drawn only on U.S. banks. A charge will be imposed if any
check used for investment in your account does not clear. Each Fund makes
available to certain large institutions the ability to issue purchase
instructions through compatible computer facilities.
Fund shares also may be purchased through Dreyfus-AUTOMATIC Asset
BuilderRegistration Mark, the Government Direct Deposit Privilege or the
Payroll Savings Plan described under "Shareholder Services." These services
enable you to make regularly scheduled investments and may provide you with
a convenient way to invest for long-term financial goals. You should be
aware, however, that periodic investment plans do not guarantee a profit and
will not protect an investor against loss in a declining market.
[Page 14]
Subsequent investments also may be made by electronic transfer of
funds from an account maintained in a bank or other
domestic financial institution that is an Automated Clearing House member.
You must direct the institution to transmit immediately available funds
through the Automated Clearing House to The Bank of New York with
instructions to credit your Fund account. The instructions must specify your
Fund account registration and your Fund account number preceded by the digits
"1111."
Management understands that some Service Agents may impose certain
conditions on their clients which are different from those described in this
Prospectus and, to the extent permitted by applicable regulatory authority,
may charge their clients direct fees for Servicing (as defined under "Service
Plan"). Service Agents may receive different levels of compensation for
selling different Classes of shares. You should consult your Service Agent in
this regard.
Fund shares are sold on a continuous basis at the net asset value per
share next determined after an order in proper form and Federal Funds (monies
of member banks within the Federal Reserve System which are held on deposit
at a Federal Reserve Bank) are received by the Transfer Agent or other agent
or entity subject to the direction of such agents in written or telegraphic
form. If you do not remit Federal Funds, your payment must be converted into
Federal Funds. This usually occurs within one business day of receipt of a
bank wire and within two business days of receipt of a check drawn on a
member bank of the Federal Reserve System. Checks drawn on banks which are
not members of the Federal Reserve System may take considerably longer to
convert into Federal Funds. Prior to receipt of Federal Funds, your money
will not be invested.
Net asset value per share of each Class is computed by dividing the
value of the Fund's net assets represented by such Class (i.e., the value of
its assets less liabilities) by the total number of shares of such Class
outstanding. See "Determination of Net Asset Value" in the Statement of
Additional Information.
Federal regulations require that you provide a certified TIN upon
opening or reopening an account. See "Dividends, Distributions and Taxes" and
the Account Application for further information concerning this requirement.
Failure to furnish a certified TIN to a Fund could subject you to a $50
penalty imposed by the Internal Revenue Service (the "IRS").
Government Money Fund and Money Fund _ Each of these Funds' net asset value
per share is determined twice each day the New York Stock Exchange or the
Funds' Transfer Agent is open for business: as of 5:00 p.m., New York time,
and as of 8:00 p.m., New York time.
If your payments are received in or converted into Federal Funds by
12:00 Noon, New York time, by the Transfer Agent on a business day, you will
receive the dividend declared that day. If your payments are received in or
converted into Federal Funds after 12:00 Noon, New York time, by the Transfer
Agent, you will begin to accrue dividends on the following business day.
Qualified institutions may telephone orders for purchase of Fund
shares of each of these Funds. A telephone order placed with the Distributor
or its designee in New York will become effective at the price determined at
5:00 p.m., New York time, and the shares purchased will receive the dividend
on Fund shares declared on that day, if such order is placed with the
Distributor or its designee in New York by 5:00 p.m., New York time, and
Federal Funds are received by 6:00 p.m., New York time, on that day. A
telephone order placed with the Distributor or its designee in New York after
5:00 p.m., New York time, but by 8:00 p.m., New York time, on a given day
will become effective at the price determined at 8:00 p.m., New York time, on
that day, and the shares purchased will begin to accrue dividends on the next
business day, if Federal Funds are received by 11:00 a.m., New York time, on
the next business day.
The Distributor may pay dealers a fee of up to .5% of the amount
invested through such dealers in each Fund's shares by employees
participating in qualified or non-qualified employee benefit plans or other
programs where (i) the employers or affiliated employers maintaining such
plans or programs have a minimum of 250 employees eligible for participation
in such plans or programs, or (ii) such plan's or
[Page 15]
program's aggregate investment in the Dreyfus Family of Funds or certain
other products made available by the Distributor to such plans or programs
exceeds $1,000,000 ("Eligible Benefit Plans"). Shares of funds in the Dreyfus
Family of Funds then held by Eligible Benefit Plans will be aggregated to
determine the fee payable. The Distributor reserves the right to cease paying
these fees at any time. The Distributor will pay such fees from its own
funds, other than amounts received from the Fund, including past profits or
any other source available to it.
Municipal Funds _ Each of the Municipal Funds' net asset value per share is
determined twice each day the New York Stock Exchange or the Funds' Transfer
Agent is open for business: as of 12:00 Noon, New York time, and as of 8:00
p.m., New York time.
If your payments are received in or converted into Federal Funds by
12:00 Noon, New York time, on a business day, you will receive the dividend
declared that day. If your payments are received in or converted into Federal
Funds after 12:00 Noon, New York time, you will begin to accrue dividends on
the following business day.
Qualified institutions may telephone orders for purchase of shares of
each of these Funds. A telephone order placed with the Distributor or its
designee in New York will become effective at the price determined at 12:00
Noon, New York time, on a given day, and the shares purchased will receive
the dividend on Fund shares declared on that day, if the telephone order is
placed with the Distributor or its designee by 12:00 Noon, New York time, and
Federal Funds are received by 4:00 p.m., New York time, on that day. A
telephone order placed with the Distributor or its designee after 12:00 Noon,
New York time, but by 8:00 p.m., New York time, on a given day will become
effective at the price determined at 8:00 p.m., New York time, on that day,
and the shares purchased will begin to accrue dividends on the next business
day, if Federal Funds are received by 11:00 a.m., New York time, on the next
business day.
TELETRANSFER PRIVILEGE (California Municipal Fund and New York Municipal Fund
only) _ You may purchase shares (minimum $500, maximum $150,000 per day) by
telephone if you have checked the appropriate box and supplied the necessary
information on the Account Application or have filed a Shareholder Services
Form with the Transfer Agent. The proceeds will be transferred between the
bank account designated in one of these documents and your Fund account. Only
a bank account maintained in a domestic financial institution which is an
Automated Clearing House member may be so designated. Each of these Funds may
modify or terminate this Privilege at any time or charge a service fee upon
notice to shareholders. No such fee currently is contemplated.
If you have selected the TELETRANSFER Privilege, you may request a TEL
ETRANSFER purchase of shares by calling 1-800-645-6561 or, if you are calling
from overseas, call 516-794-5452.
SHAREHOLDER SERVICES
The services and privileges described under this heading may not be
available to clients of certain Service Agents and some Service Agents may
impose certain conditions on their clients which are different from those
described in this Prospectus. You should consult your Service Agent in this
regard. In addition, use of the privileges noted below may require that the
proper forms and information be filed with and processed by the Transfer
Agent.
FUND EXCHANGES _ Clients of certain Service Agents may purchase, in exchange
for shares of a Fund, shares of certain other funds managed or administered
by The Dreyfus Corporation, to the extent such shares are offered for sale in
your state of residence. These funds have different investment objectives
which may be of interest to you. If you desire to use this service, you
should consult your Service Agent or call 1-800-645-6561 to determine if it
is available and whether any conditions are imposed on its use.
To request an exchange, you or your Service Agent acting on your
behalf must give exchange instructions to the Transfer Agent in writing or by
telephone. Before any exchange, you must obtain and should
[Page 16]
review a copy of the current prospectus of the fund into which the exchange
is being made. Prospectuses may be obtained by calling 1-800-645-6561. Except
in the case of personal retirement plans, the shares being exchanged must
have a current value of at least $500; furthermore, when establishing a new
account by exchange, the shares being exchanged must have a value of at least
the minimum initial investment required for the fund into which the exchange
is being made. The ability to issue exchange instructions by telephone is
given to shareholders of each Fund automatically, unless you check the
applicable "No" box on the Account Application, indicating that you
specifically refuse this Privilege. The Telephone Exchange Privilege may be
established for an existing account by written request signed by all
shareholders on the account, by a separate signed Shareholder Services Form,
available by calling 1-800-645-6561, or by oral request from any of the
authorized signatories on the account by calling 1-800-645-6561. If you have
established the Telephone Exchange Privilege, you may telephone exchange
instructions (including over The Dreyfus TouchRegistration Mark automated
telephone system) by calling 1-800-645-6561. If you are calling from
overseas, call 516-794-5452. See "How to Redeem Shares _ Procedures." Upon an
exchange into a new account, the following shareholder services and
privileges, as applicable and where available, will be automatically carried
over to the fund into which the exchange is made: Telephone Exchange
Privilege, Check Redemption Privilege, Wire Redemption Privilege, Telephone
Redemption Privilege, TeleTransfer Privilege, and the dividend/capital gain
distribution option (except for Dividend Sweep) selected by the investor.
Shares will be exchanged at the next determined net asset value;
however, a sales load may be charged with respect to exchanges into funds
sold with a sales load. If you are exchanging into a fund that charges a
sales load, you may qualify for share prices which do not include the sales
load or which reflect a reduced sales load, if the shares you are exchanging
were: (a) purchased with a sales load, (b) acquired by a previous exchange
from shares purchased with a sales load, or (c) acquired through reinvestment
of dividends or distributions paid with respect to the foregoing categories
of shares. To qualify, at the time of the exchange you must notify the
Transfer Agent or your Service Agent must notify the Distributor. Any such
qualification is subject to confirmation of your holdings through a check of
appropriate records. See "Shareholder Services" in the Statement of
Additional Information. No fees currently are charged shareholders directly
in connection with exchanges, although each Fund reserves the right, upon not
less than 60 days' written notice, to charge shareholders a nominal
administrative fee in accordance with rules promulgated by the Securities and
Exchange Commission. Each Fund reserves the right to reject any exchange
request in whole or in part. The availability of Fund Exchanges may be
modified or terminated at any time upon notice to shareholders. See
"Dividends, Distributions and Taxes."
DREYFUS AUTO-EXCHANGE PRIVILEGE _ Dreyfus Auto-Exchange Privilege enables
you to invest regularly (on a semi-monthly, monthly, quarterly or annual
basis), in exchange for shares of a Fund, in shares of certain other funds in
the Dreyfus Family of Funds of which you are a shareholder. The amount you
designate, which can be expressed either in terms of a specific dollar or
share amount ($100 minimum), will be exchanged automatically on the first
and/or fifteenth of the month according to the schedule you have selected.
Shares will be exchanged at the then-current net asset value; however, a
sales load may be charged with respect to exchanges into funds sold with a
sales load. See "Shareholder Services" in the Statement of Additional
Information. The right to exercise this Privilege may be modified or canceled
by the Fund or the Transfer Agent. You may modify or cancel your exercise of
this Privilege at any time by mailing written notification to The Dreyfus
Family of Funds, P.O. Box 9671, Providence, Rhode Island 02940-9671. Each Fund
may charge a service fee for the use of this Privilege. No such fee
currently is contemplated. For more information concerning this Privilege and
the funds in the Dreyfus Family of Funds eligible to participate in this
Privilege, or to obtain an Auto-Exchange Authorization Form, please call toll
free 1-800-645-6561. See "Dividends, Distributions and Taxes."
DREYFUS-AUTOMATIC ASSET BUILDERRegistration Mark _ Dreyfus-AUTOMATIC Asset
Builder permits you to purchase Fund shares (minimum of $100 and maximum of
$150,000 per transaction) at regular intervals selected by you.
[Page 17]
Fund shares are purchased by transferring funds from the bank account
designated by you. At your option, the bank account designated by you will be
debited in the specified amount, and Fund shares will be purchased, once a
month, on either the first or fifteenth day, or twice a month, on both days.
Only an account maintained at a domestic financial institution which is an
Automated Clearing House member may be so designated. To establish a Dreyfus-A
UTOMATIC Asset Builder account, you must file an authorization form with the
Transfer Agent. You may obtain the necessary authorization form from your
Service Agent or by calling 1-800-645-6561. You may cancel your participation
in this Privilege or change the amount of your purchase at any time by
mailing written notification to The Dreyfus Family of Funds, P.O. Box 9671,
Providence, Rhode Island 02940-9671, or, if for Dreyfus retirement plan
accounts, to The Dreyfus Trust Company, Custodian, P.O. Box 6427, Providence,
Rhode Island 02940-6427, and the notification will be effective three
business days following receipt. Each Fund may modify or terminate this
Privilege at any time or charge a service fee. No such fee currently is
contemplated.
GOVERNMENT DIRECT DEPOSIT PRIVILEGE _ The Government Direct Deposit
Privilege enables you to purchase Fund shares (minimum of $100 and maximum of
$50,000 per transaction) by having Federal salary, Social Security, or
certain veterans', military or other payments from the Federal government,
automatically deposited into your Fund account. You may deposit as much of
such payments as you elect. To enroll in Government Direct Deposit, you must
file with the Transfer Agent a completed Direct Deposit Sign-Up Form for each
type of payment that you desire to include in this Privilege. The appropriate
form may be obtained from your Service Agent or by calling 1-800-645-6561.
Death or legal incapacity will terminate your participation in this
Privilege. You may elect at any time to terminate your participation by
notifying in writing the appropriate Federal agency. Further, a Fund may
terminate your participation upon 30 days' notice to you.
PAYROLL SAVINGS PLAN _ The Payroll Savings Plan permits you to purchase Fund
shares (minimum of $100 per transaction) automatically on a regular basis.
Depending upon your employer's direct deposit program, you may have part or
all of your paycheck transferred to your existing Dreyfus account
electronically through the Automated Clearing House system at each pay
period. To establish a Payroll Savings Plan account, you must file an
authorization form with your employer's payroll department. Your employer
must complete the reverse side of the form and return it to The Dreyfus
Family of Funds, P.O. Box 9671, Providence, Rhode Island 02940-9671. You may
obtain the necessary authorization form by calling 1-800-645-6561. You may
change the amount of purchase or cancel the authorization only by written
notification to your employer. It is the sole responsibility of your
employer, not the Distributor, The Dreyfus Corporation, the Fund, the
Transfer Agent or any other person, to arrange for transactions under the
Payroll Savings Plan. Each Fund may modify or terminate this Privilege at any
time or charge a service fee. No such fee currently is contemplated.
DIVIDEND OPTIONS _ Dividend Sweep enables you to invest automatically
dividends or dividends and capital gain distributions, if any, paid by a Fund
in shares of another fund in the Dreyfus Family of Funds of which you are a
shareholder. Shares of the other fund will be purchased at the then-current
net asset value; however, a sales load may be charged with respect to
investments in shares of a fund sold with a sales load. If you are investing
in a fund that charges a sales load, you may qualify for share prices which do
not include the sales load or which reflect a reduced sales load. If you are
investing in a fund that charges a contingent deferred sales charge, the
shares purchased will be subject to the contingent deferred sales charge, if
any, applicable to the purchased shares. See "Shareholder Services" in the
Statement of Additional Information. Dividend ACH permits you to transfer
electronically dividends or dividends and capital gain distributions, if any,
from a Fund to a designated bank account. Only an account maintained at a
domestic financial institution which is an Automated Clearing House member
may be so designated. Banks may charge a fee for this service.
[Page 18]
For more information concerning these privileges or to request a
Dividend Options Form, please call toll free
1-800-645-6561. You may cancel these privileges by mailing written
notification to The Dreyfus Family of Funds, P.O. Box 9671, Providence, Rhode
Island 02940-9671. To select a new fund after cancellation, you must submit a
new Dividend Options Form. Enrollment in or cancellation of these privileges
is effective three business days following receipt. These privileges are
available only for existing accounts and may not be used to open new
accounts. Minimum subsequent investments do not apply for Dividend Sweep.
Each Fund may modify or terminate these privileges at any time or charge a
service fee. No such fee currently is contemplated. Shares held under Keogh
Plans or IRAs are not eligible for Dividend Sweep.
QUARTERLY DISTRIBUTION PLAN _ The Quarterly Distribution Plan permits you to
receive quarterly payments from a Fund consisting of proceeds from the
redemption of shares purchased for your account through the automatic
reinvestment of dividends declared on your account during the preceding
calendar quarter. You may open a Quarterly Distribution Plan by submitting a
request to the Transfer Agent. The Quarterly Distribution Plan may be ended
at any time by you, the Fund or the Transfer Agent. Shares for which
certificates have been issued must be presented before redemption under the
Quarterly Distribution Plan.
AUTOMATIC WITHDRAWAL PLAN _ The Automatic Withdrawal Plan permits you to
request withdrawal of a specified dollar amount (minimum of $50) on either a
monthly or quarterly basis if you have a $5,000 minimum account. An Automatic
Withdrawal Plan may be established by filing an Automatic Withdrawal Plan
application with the Transfer Agent or by oral request from any of the
authorized signatories on the account by calling 1-800-645-6561. The
Automatic Withdrawal Plan may be ended at any time by you, the Fund or the
Transfer Agent. Shares for which certificates have been issued may not be
redeemed through the Automatic Withdrawal Plan.
RETIREMENT PLANS (GOVERNMENT MONEY FUND AND MONEY FUND ONLY) _ Each of these
Funds offers a variety of pension and profit-sharing plans, including Keogh
Plans, IRAs (including regular IRAs, spousal IRAs for a non-working spouse,
Roth IRAs, SEP-IRAs, rollover IRAs and Education IRAs), 401(k) Salary
Reduction Plans and 403(b)(7) Plans. Plan support services also are
available. You can obtain details on the various plans by calling the
following numbers toll free: for Keogh Plans, please call 1-800-358-5566; for
IRAs and IRA "Rollover Accounts," please call 1-800-645-6561; or for
SEP-IRAs, 401(k) Salary Reduction Plans and 403(b)(7) Plans, please call
1-800-322-7880.
HOW TO REDEEM SHARES
GENERAL
You may request redemption of your shares at any time. Redemption
requests should be transmitted to the Transfer Agent as described below. When
a request is received in proper form, your Fund will redeem the shares at the
next determined net asset value.
No Fund imposes a charge when shares are redeemed. Service Agents may
charge their clients a fee for effecting redemptions of Fund shares. Any
certificates representing Fund shares being redeemed must be submitted with
the redemption request. The value of the shares redeemed may be more or less
than their original cost, depending upon the respective Fund's then-current
net asset value.
Each Fund ordinarily will make payment for all shares redeemed within
seven days after receipt by the Transfer Agent of a redemption request in
proper form, except as provided by the rules of the Securities and Exchange
Commission. HOWEVER, IF YOU HAVE PURCHASED FUND SHARES BY CHECK, BY
TELETRANSFER PRIVILEGE OR THROUGH DREYFUS-AUTOMATIC ASSET BUILDERRegistration
Mark AND SUBSEQUENTLY SUBMIT A WRITTEN REDEMPTION REQUEST TO THE TRANSFER
AGENT, YOUR REDEMPTION WILL BE EFFECTIVE AND THE REDEMPTION PROCEEDS WILL BE
TRANSMITTED TO YOU PROMPTLY UPON BANK CLEARANCE OF YOUR PURCHASE CHECK,
TELETRANSFER PURCHASE OR DREYFUS-AUTOMATIC ASSET BUILDER ORDER, WHICH MAY
TAKE UP TO EIGHT BUSINESS DAYS OR MORE. IN ADDITION, EACH FUND WILL NOT HONOR
REDEMPTION
[Page 19]
CHECKS UNDER THE CHECK REDEMPTION PRIVILEGE, AND WILL REJECT REQUESTS TO
REDEEM SHARES BY WIRE OR TELEPHONE OR PURSUANT TO THE TELETRANSFER PRIVILEGE
FOR A PERIOD OF EIGHT BUSINESS DAYS AFTER RECEIPT BY THE TRANSFER AGENT OF
THE PURCHASE CHECK, THE TELETRANSFER PURCHASE OR THE DREYFUS-AUTOMATIC ASSET
BUILDER ORDER AGAINST WHICH SUCH REDEMPTION IS REQUESTED. THESE PROCEDURES
WILL NOT APPLY IF YOUR SHARES WERE PURCHASED BY WIRE PAYMENT, OR IF YOU
OTHERWISE HAVE A SUFFICIENT COLLECTED BALANCE IN YOUR ACCOUNT TO COVER THE
REDEMPTION REQUEST. PRIOR TO THE TIME ANY REDEMPTION IS EFFECTIVE, DIVIDENDS
ON SUCH SHARES WILL ACCRUE AND BE PAYABLE, AND YOU WILL BE ENTITLED TO
EXERCISE ALL OTHER RIGHTS OF BENEFICIAL OWNERSHIP. Fund shares will not be
redeemed until the Transfer Agent has received your Account Application.
Each Fund reserves the right to redeem your account at its option
upon not less than 45 days' written notice if your account's net asset value
is $500 or less and remains so during the notice period.
PROCEDURES
You may redeem Fund shares by using the regular redemption procedure
through the Transfer Agent, or through the Telephone Redemption Privilege or
Check Redemption Privilege, which are granted automatically unless you
specifically refuse them by checking the applicable "No" box on the Account
Application. The Telephone Redemption Privilege and Check Redemption
Privilege may be established for an existing account by a separate signed
Shareholder Services Form or, with respect to the Telephone Redemption
Privilege, by oral request from any of the authorized signatories on the
account by calling 1-800-645-6561. You also may redeem shares through the
Wire Redemption Privilege or, with respect to the California Municipal Fund
and New York Municipal Fund, the TELETRANSFER Privilege, if you have checked
the appropriate box and supplied the necessary information on the Account
Application or have filed a Shareholder Services Form with the Transfer
Agent. If you are a client of a Selected Dealer, you may redeem Fund shares th
rough the Selected Dealer. Other redemption procedures may be in effect for
clients of certain Service Agents. Each Fund makes available to certain large
institutions the ability to issue redemption instructions through compatible
computer facilities. Each Fund reserves the right to refuse any request made
by wire or telephone, including requests made shortly after a change of
address, and may limit the amount involved or the number of such requests.
Each Fund may modify or terminate any redemption privilege at any time or
charge a service fee upon notice to shareholders. No such fee currently is
contemplated. Shares held under Keogh Plans, IRAs or other retirement plans,
and shares for which certificates have been issued, are not eligible for the
Check Redemption, Wire Redemption, Telephone Redemption or TELETRANSFER
Privilege.
The Telephone Redemption Privilege or Telephone Exchange Privilege
authorizes the Transfer Agent to act on telephone instructions (including
over The Dreyfus TouchRegistration Mark automated telephone system) from any
person representing himself or herself to be you, or a representative of your
Service Agent, and reasonably believed by the Transfer Agent to be genuine.
Each Fund will require the Transfer Agent to employ reasonable procedures,
such as requiring a form of personal identification, to confirm that
instructions are genuine and, if it does not follow such procedures, the Fund
or the Transfer Agent may be liable for any losses due to unauthorized or
fraudulent instructions. Neither a Fund nor the Transfer Agent will be liable
for following telephone instructions reasonably believed to be genuine.
During times of drastic economic or market conditions, you may
experience difficulty in contacting the Transfer Agent by telephone to
request a redemption or exchange of Fund shares. In such cases, you should
consider using the other redemption procedures described herein. Use of these
other redemption procedures may result in your redemption request being
processed at a later time than it would have been if telephone redemption had
been used.
REGULAR REDEMPTION _ Under the regular redemption procedure, you may redeem
shares by written request mailed to The Dreyfus Family of Funds, P.O. Box
9671, Providence, Rhode Island 02940-9671, or, if for Dreyfus retirement plan
accounts, to The Dreyfus Trust Company, Custodian, P.O. Box 6427,
[Page 20]
Providence, Rhode Island 02940-6427. Redemption requests may be delivered in
person only to a Dreyfus Financial Center. For the location of the nearest
Dreyfus Financial Center, please call one of the telephone numbers listed
under "General Information." THESE REQUESTS WILL BE FORWARDED TO THE FUND AND
WILL BE PROCESSED ONLY UPON RECEIPT THEREBY. Redemption requests must be
signed by each shareholder, including each owner of a joint account, and each
signature must be guaranteed. The Transfer Agent has adopted standards and
procedures pursuant to which signature-guarantees in proper form generally
will be accepted from domestic banks, brokers, dealers, credit unions,
national securities exchanges, registered securities associations, clearing
agencies and savings associations, as well as from participants in the New
York Stock Exchange Medallion Signature Program, the Securities Transfer
Agents Medallion Program ("STAMP"), and the Stock Exchanges Medallion
Program. If you have questions with respect to signature-guarantees, please
call one of the telephone numbers listed under "General Information."
Redemption proceeds of at least $1,000 will be wired to any member
bank of the Federal Reserve System in accordance with a written
signature-guaranteed request.
CHECK REDEMPTION PRIVILEGE _ You may write Redemption Checks drawn on your
Fund account. Redemption Checks may be made payable to the order of any
person in the amount of $500 or more. Redemption Checks should not be used to
close your account. Redemption Checks are free, but the Transfer Agent will
impose a fee for stopping payment of a Redemption Check upon your request or
if the Transfer Agent cannot honor a Redemption Check due to insufficient
funds or other valid reason. You should date your Redemption Checks with the
current date when you write them. Please do not postdate your Redemption
Checks. If you do, the Transfer Agent will honor, upon presentment, even if
presented before the date of the check, all postdated Redemption Checks which
are dated within six months of presentment for payment, if they are otherwise
in good order. If you hold shares in a Dreyfus-sponsored IRA account, you may
be permitted to make withdrawals from your IRA account using checks furnished
to you by The DreyfusTrust Company. The Check Redemption Privilege is granted
automatically unless you refuse it.
WIRE REDEMPTION PRIVILEGE _ You may request by wire, telephone or letter
that redemption proceeds (minimum $1,000) be wired to your account at a bank
which is a member of the Federal Reserve System, or a correspondent bank if
your bank is not a member. Holders of jointly registered Fund or bank
accounts may have redemption proceeds of not more than $250,000 wired within
any 30-day period. You may telephone redemption requests by calling
1-800-645-6561 or, if you are calling from overseas, call 516-794-5452. The
Statement of Additional Information sets forth instructions for transmitting
redemption requests by wire.
TELEPHONE REDEMPTION PRIVILEGE _ You may request by telephone that
redemption proceeds (maximum $150,000 per day) be paid by check and mailed to
your address. You may telephone redemption instructions by calling
1-800-645-6561 or, if you are calling from overseas, call 516-794-5452. The
Telephone Redemption Privilege is granted automatically unless you refuse it.
TELETRANSFER PRIVILEGE (CALIFORNIA MUNICIPAL FUND AND NEW YORK MUNICIPAL FUND
ONLY) _ You may request by telephone that redemption proceeds (minimum $500
per day) be transferred between your Fund account and your bank account. Only
a bank account maintained in a domestic financial institution which is an
Automated Clearing House member may be designated. Redemption proceeds will
be on deposit in your account at an Automated Clearing House member bank
ordinarily two days after receipt of the redemption request. Holders of
jointly registered Fund or bank accounts may redeem through the TELETRANSFER
Privilege for transfer to their bank account not more than $250,000 within
any 30-day period.
If you have selected the TELETRANSFER Privilege, you may request a
TELETRANSFER redemption of shares by calling 1-800-645-6561 or, if you are
calling from overseas, call 516-794-5452.
[Page 21]
REDEMPTION THROUGH A SELECTED DEALER _ If you are a customer of a Selected
Dealer, you may make redemption requests to your Selected Dealer. If the
Selected Dealer transmits the redemption request so that it is received by
the Transfer Agent or its designee by 12:00 Noon, New York time, with respect
to the Municipal Funds, or 5:00 p.m., New York time, with respect to the
Government Money Fund and Money Fund on a business day, the proceeds of the
redemption ordinarily will be transmitted in Federal Funds on the same day
and the shares will not receive the dividend declared on that day. If a
redemption request is received after such time, but by 8:00 p.m., New York
time, the redemption request will be effective on that day, the shares will
receive the dividend declared on that day and the proceeds of redemption
ordinarily will be transmitted in Federal Funds on the next business day. If
a redemption request is received after 8:00 p.m., New York time, the
redemption request will be effective on the next business day. It is the
responsibility of the Selected Dealer to transmit a request so that it is
received in a timely manner. The proceeds of the redemption are credited to
your account with the Selected Dealer. See "How to Buy Shares" for a
discussion of additional conditions or fees that may be imposed upon
redemption.
DISTRIBUTION PLAN
Class B shares of each Fund are subject to a separate Distribution
Plan adopted pursuant to Rule 12b-1 under the 1940 Act. Under each
Distribution Plan, the Fund directly bears the costs of preparing, printing
and distributing prospectuses and statements of additional information and of
implementing and operating the Distribution Plan. In addition, each Fund
reimburses the Distributor for payments made to third parties for
distributing (within the meaning of Rule 12b-1) Class B shares at an
aggregate annual rate of up to .20 of 1% of the value of the Fund's average
daily net assets attributable to Class B.
SHAREHOLDER SERVICES PLAN
Each Fund has adopted a separate Shareholder Services Plan with
respect to Class B pursuant to which the Fund pays the Distributor for the
provision of certain services to the holders of Class B shares a fee at the
annual rate of .25 of 1% of the value of the Fund's average daily net assets
attributable to Class B. The services provided may include personal services
relating to shareholder accounts, such as answering shareholder inquiries
regarding the Fund and providing reports and other information, and services
related to the maintenance of shareholder accounts. Under each Fund's
Shareholder Services Plan, the Distributor may make payments to Service
Agents in respect of these services. The Distributor determines the amounts
to be paid to Service Agents.
DIVIDENDS, DISTRIBUTIONS AND TAXES
Each Fund ordinarily declares dividends from its net investment
income on each day the New York Stock Exchange or, for the Government Money
Fund and Money Fund only, the Transfer Agent is open for business. The Fund's
earnings for Saturdays, Sundays and holidays are declared as dividends on the
preceding business day. Dividends usually are paid on the last calendar day
of each month and automatically are reinvested in additional shares at net
asset value or, at your option, paid in cash. If you redeem all shares in
your account at any time during the month, all dividends to which you are
entitled will be paid to you along with the proceeds of the redemption. If
you are an omnibus accountholder and indicate in a partial redemption request
that a portion of any accrued dividends to which such account is entitled
belongs to an underlying accountholder who has redeemed all shares in his or
her account, such portion of the accrued dividends will be paid to you along
with the proceeds of the redemption. Distributions from net realized
securities gains, if any, generally are declared and paid once a year, but
each Fund may make distributions on a more frequent basis to comply with the
distribution requirements of the Code, in all events in a manner consistent
with the provisions of the 1940 Act. No Fund will make distributions from net
realized securities gains unless capital loss carryovers, if any, have been
utilized or have expired. You may choose whether to receive distributions in
cash or to reinvest in additional shares at net asset value. If you elect to
receive dividends
[Page 22]
and distributions in cash, and your dividend or distribution check is
returned to the Fund as undeliverable or remains uncashed for six months, the
Fund reserves the right to reinvest such dividends or distributions and all
future dividends and distributions payable to you in additional Fund shares
at net asset value. No interest will accrue on amounts represented by
uncashed distribution or redemption checks. All expenses are accrued daily
and deducted before declaration of dividends to investors. Dividends paid by
each Class will be calculated at the same time and in the same manner and
will be of the same amount, except that the expenses attributable solely to a
Class will be borne exclusively by such Class.
Dividends paid by each Municipal Fund derived from Taxable
Investments, and dividends paid by each other Fund derived from interest,
together with distributions from any net realized short-term securities gains
and all or a portion of any gains realized from the sale or other disposition
of certain market discount bonds, are subject to Federal income tax as
ordinary income, whether received in cash or reinvested in additional Fund
shares. Distributions from net realized long-term securities gains, if any,
will be taxable as long-term capital gains for Federal income tax purposes if
you are a citizen or resident of the United States. The Code provides that an
individual generally will be taxed on his or her net capital gain at a
maximum rate of 28% with respect to capital gain from securities held for
more than one year but not more than 18 months and at a maximum rate of 20%
with respect to capital gain from securities held for more than 18 months.
Under the Code, interest on indebtedness incurred or continued to purchase or
carry Fund shares which is deemed to relate to exempt-interest dividends is
not deductible.
Except for dividends from Taxable Investments, it is anticipated that
substantially all dividends paid by each Municipal Fund will not be subject
to Federal income tax and, as to the California Municipal Fund, State of
California income taxes, and as to the New York Municipal Fund, New York
State and New York City income taxes. Although all or a substantial portion
of the dividends paid by each Municipal Fund may be excluded by shareholders
from their gross income for Federal income tax purposes, each Municipal Fund
may purchase specified private activity bonds, the interest from which may be
(i) a preference item for purposes of the alternative minimum tax, or (ii) a
factor in determining the extent to which a shareholder's Social Security
benefits are taxable. If a Municipal Fund purchases such securities, the
portion of the Fund's dividends related thereto will not necessarily be tax
exempt to an investor who is subject to the alternative minimum tax and/or
tax on Social Security benefits and may cause an investor to be subject to
such taxes.
Dividends and distributions attributable to interest from direct
obligations of the United States and paid by the Government Money Fund and
Money Fund to individuals currently are not subject to tax in most states.
Dividends and distributions attributable to interest from other securities in
which the Government Money Fund and Money Fund may invest may be subject to
state tax. Each of these Funds intends to provide shareholders with a
statement which sets forth the percentage of dividends and distributions paid
by the Fund that is attributable to interest income from direct obligations
of the United States.
Taxable dividends derived from net investment income, together with
distributions from net realized short-term securities gains and all or a
portion of any gains realized from the sale or other disposition of certain
market discount bonds, paid by a Fund to a foreign investor generally are
subject to U.S. nonresident withholding taxes at the rate of 30%, unless the
foreign investor claims the benefit of a lower rate specified in a tax
treaty. Distributions from net realized long-term securities gains paid by a
Fund to a foreign investor generally will not be subject to U.S. nonresident
withholding tax. However, such distributions may be subject to backup
withholding, as described below, unless the foreign investor certifies his
non-U.S. residency status.
Notice as to the tax status of your dividends and distributions will
be mailed to you annually. You also will receive periodic summaries of your
account which will include information as to dividends and distributions from
securities gains, if any, paid during the year. For each Municipal Fund,
these statements
[Page 23]
will set forth the dollar amount of income exempt from Federal tax and,
as to the California Municipal Fund, State of California income taxes, and as
to the New York Municipal Fund, New York State and New York City income
taxes, and the dollar amount, if any, subject to such tax. These dollar
amounts will vary depending upon the size and length of time of the
investor's investment in the Fund. If a Municipal Fund pays dividends derived
from taxable income, it intends to designate as taxable the same percentage
of the day's dividend as the actual taxable income earned on that day bears
to total income earned on that day. Thus, the percentage of the dividend
designated as taxable, if any, may vary from day to day.
The exchange of shares of one fund for shares of another is treated
for Federal income tax purposes as a sale of the shares given in exchange by
the shareholder and, therefore, an exchanging shareholder may realize a
taxable gain or loss.
Federal regulations generally require each Fund to withhold ("backup
withholding") and remit to the U.S. Treasury 31% of dividends and
distributions from net realized securities gains of the Fund paid to a
shareholder if such shareholder fails to certify either that the TIN
furnished in connection with opening an account is correct, or that such
shareholder has not received notice from the IRS of being subject to backup
withholding as a result of a failure to properly report taxable dividend or
interest income on a Federal income tax return. Furthermore, the IRS may
notify a Fund to institute backup withholding if the IRS determines a
shareholder's TIN is incorrect or if a shareholder has failed to properly
report taxable dividend and interest income on a Federal income tax return.
A TIN is either the Social Security number, IRS individual taxpayer
identification number, or employer identification number of the record owner
of the account. Any tax withheld as a result of backup withholding does not
constitute an additional tax imposed on the record owner of the account, and
may be claimed as a credit on the record owner's Federal income tax return.
Management believes that each Fund has qualified for its most recent
fiscal year as a "regulated investment company" under the Code. Each Fund
intends to continue to so qualify if such qualification is in the best
interests of its shareholders. Such qualification relieves the Fund of any
liability for Federal income tax to the extent its earnings are distributed
in accordance with applicable provisions of the Code. Each Fund is subject to
a non-deductible 4% excise tax, measured with respect to certain
undistributed amounts of taxable investment income and capital gains.
You should consult your tax adviser regarding specific questions as
to Federal, state and local taxes.
GENERAL INFORMATION
The Government Money Fund, National Municipal Fund and Money Fund
were incorporated under Maryland law on April 8, 1982, April 8, 1982 and May
15, 1981, respectively, and commenced operations on February 7, 1983,
December 21, 1983 and February 8, 1982, respectively. Prior to October 6,
1990, the National Municipal Fund's name was General Tax Exempt Money Market
Fund, Inc. Each of the Government Money Fund and the National Municipal Fund
is authorized to issue 15 billion shares of Class A Common Stock and one
billion shares of Class B Common Stock, par value $.01 per share. The Money
Fund is authorized to issue 15 billion shares of Class A Common Stock and 10
billion shares of Class B Common Stock, par value $.01 per share. The
California Municipal Fund and New York Municipal Fund were organized as
unincorporated business trusts under the laws of the Commonwealth of
Massachusetts pursuant to a separate Agreement and Declaration of Trust dated
September 19, 1986 and September 16, 1986, respectively, and commenced
operations on March 10, 1987 and December 2, 1986, respectively. Prior to
March 19, 1990, the California Municipal Fund's name was General California
Tax Exempt Money Market Fund. Prior to January 29, 1990, the New York
Municipal Fund's name was General New York Tax Exempt Money Market Fund. Each
of these Funds is authorized to issue an unlimited number of shares of
beneficial interest, par value $.001 per
[Page 24]
share. Each Fund's shares are classified into two classes_Class A and Class
B. Each share has one vote and shareholders will vote in the aggregate and
not by class except as otherwise required by law.
Unless otherwise required by the 1940 Act, ordinarily it will not be
necessary for any Fund to hold annual meetings of shareholders. As a result,
Fund shareholders may not consider each year the election of Board members or
the appointment of auditors. However, the holders of at least 10% of a Fund's
shares outstanding and entitled to vote may require such Fund to hold a
special meeting of shareholders for purposes of removing a Board member from
office. Fund shareholders may remove a Board member by the affirmative vote
of a majority, in the case of the Government Money Fund, National Municipal
Fund and Money Fund, or two-thirds, in the case of the California Municipal
Fund and New York Municipal Fund, of the Fund's outstanding voting shares. In
addition, a Fund's Board will call a special meeting of shareholders for the
purpose of electing Board members if, at any time, less than a majority of
the Board members then holding office have been elected by shareholders.
The Transfer Agent maintains a record of your ownership and sends
confirmations and statements of account.
Shareholder inquiries may be made to your Service Agent or by writing
to a Fund at 144 Glenn Curtiss Boulevard, Uniondale, New York 11556-0144, or
by calling toll free 1-800-242-8671. In New York City, call 1-718-895-1396;
outside the U.S., call 516-794-5452.
Although each Fund is offering only its own shares, it is possible
that a Fund might become liable for any misstatement in this Prospectus about
any other Fund. Each Fund's Board has considered this factor in approving the
use of this combined Prospectus.
California Municipal Fund and New York Municipal Fund only _ Under
Massachusetts law, shareholders could, under certain circumstances, be held
personally liable for the obligations of the Fund. However, its Trust
Agreement disclaims shareholder liability for acts or obligations of the Fund
and requires that notice of such disclaimer be given in each agreement,
obligation or instrument entered into or executed by the Fund or a Trustee.
The Trust Agreement provides for indemnification from the Fund's property for
all losses and expenses of any shareholder held personally liable for the
obligations of the Fund. Thus, the risk of a shareholder incurring financial
loss on account of shareholder liability is limited to circumstances in which
the Fund itself would be unable to meet its obligations, a possibility which m
anagement believes is remote. Upon payment of any liability incurred by the
Fund, the shareholder paying such liability will be entitled to reimbursement
from the general assets of the Fund. The Fund intends to conduct its
operations in such a way so as to avoid, as far as possible, ultimate
liability of the shareholders for liabilities of the Fund.
[Page 25]
APPENDIX
INVESTMENT TECHNIQUES
BORROWING _ Each Fund may borrow money from banks for temporary or emergency
(not leveraging) purposes in an amount up to 15% of the value of its total
assets (including the amount borrowed) valued at the lesser of cost or
market, less liabilities (not including the amount borrowed) at the time the
borrowing is made. While borrowings exceed 5% of the value of a Fund's total
assets, such Fund will not make any additional investments.
FORWARD COMMITMENTS (Municipal Funds) _ Each Municipal Fund may purchase
Municipal Obligations and other securities on a forward commitment or
when-issued basis, which means that delivery and payment take place a number
of days after the date of the commitment to purchase. The payment obligation
and the interest rate receivable on a forward commitment or when-issued
security are fixed when the Fund enters into the commitment, but the Fund
does not make payment until it receives delivery from the counterparty. The
Fund will commit to purchase such securities only with the intention of
actually acquiring the securities, but the Fund may sell these securities
before the settlement date if it is deemed advisable. A segregated account of
the Fund consisting of permissible liquid assets at least equal at all times
to the amount of the commitments will be established and maintained at the
Fund's custodian bank.
CERTAIN PORTFOLIO SECURITIES
U.S. GOVERNMENT SECURITIES (GOVERNMENT MONEY FUND AND MONEY FUND) _
Securities issued or guaranteed by the U.S. Government or its agencies or
instrumentalities include U.S. Treasury securities, which differ in their
interest rates, maturities and times of issuance. Some obligations issued or
guaranteed by U.S. Government agencies and instrumentalities are supported by
the full faith and credit of the U.S. Treasury; others by the right of the
issuer to borrow from the Treasury; others by discretionary authority of the
U.S. Government to purchase certain obligations of the agency or
instrumentality; and others only by the credit of the agency or
instrumentality. These securities bear fixed, floating or variable rates of
interest. Interest may fluctuate based on generally recognized reference
rates or the relationship of rates. While the U.S. Government currently
provides financial support to such U.S. Government-sponsored agencies or
instrumentalities, no assurance can be given that it will always do so, since
it is not so obligated by law.
REPURCHASE AGREEMENTS (GOVERNMENT MONEY FUND AND MONEY FUND) _ Each of these
Funds may enter into repurchase agreements with certain banks or non-bank
dealers. In a repurchase agreement, a Fund buys, and the seller agrees to
repurchase, a security at a mutually agreed upon time and price (usually
within seven days). The repurchase agreement thereby determines the yield
during the purchaser's holding period, while the seller's obligation to
repurchase is secured by the value of the underlying security. Repurchase
agreements could involve risks in the event of a default or insolvency of the
other party to the agreement, including possible delays or restrictions upon
the Fund's ability to dispose of the underlying securities.
BANK OBLIGATIONS (MONEY FUND) _ The Fund may purchase certificates of
deposit, time deposits, bankers' acceptances and other short-term obligations
issued by domestic banks, foreign subsidiaries or foreign branches of
domestic banks, domestic and foreign branches of foreign banks, and thrift
institutions, savings and loan associations and other banking institutions.
With respect to such securities issued by foreign subsidiaries or foreign
branches of domestic banks, and domestic and foreign branches of foreign
banks, the Fund may be subject to additional investment risks that are
different in some respects from those incurred by a fund which invests only
in debt obligations of U.S. domestic issuers. See "Description of the Funds
_ Investment Considerations and Risks _ Foreign Securities."
Certificates of deposit are negotiable certificates evidencing the
obligation of a bank to repay funds deposited with it for a specified period
of time.
[Page 26]
Time deposits are non-negotiable deposits maintained in a banking
institution for a specified period of time (in no event
longer than seven days) at a stated interest rate.
Bankers' acceptances are credit instruments evidencing the obligation
of a bank to pay a draft drawn on it by a customer. These instruments reflect
the obligation both of the bank and the drawer to pay the face amount of the
instrument upon maturity. The other short-term obligations may include
uninsured, direct obligations bearing fixed, floating or variable interest
rates.
COMMERCIAL PAPER (MONEY FUND) _ Commercial paper consists of short-term,
unsecured promissory notes issued to finance short-term credit needs. The
commercial paper purchased by the Fund will consist only of direct
obligations issued by domestic and foreign entities. The other corporate
obligations in which the Fund may invest consist of high quality, U.S. dollar
denominated short-term bonds and notes (including variable amount master
demand notes) issued by domestic and foreign corporations, including banks.
FLOATING AND VARIABLE RATE OBLIGATIONS (MONEY FUND) _ The Fund may purchase
floating and variable rate demand notes and bonds, which are obligations
ordinarily having stated maturities in excess of 13 months, but which permit
the holder to demand payment of principal at any time, or at specified
intervals not exceeding 13 months, in each case upon not more than 30 days'
notice. Variable rate demand notes include master demand notes which are
obligations that permit the Fund to invest fluctuating amounts, at varying
rates of interest, pursuant to direct arrangements between the Fund, as
lender, and the borrower. These obligations permit daily changes in the
amounts borrowed. Because these obligations are direct lending arrangements
between the lender and borrower, it is not contemplated that such instruments
generally will be traded, and there generally is no established secondary
market for these obligations, although they are redeemable at face value,
plus accrued interest. Accordingly, where these obligations are not secured
by letters of credit or other credit support arrangements, the Fund's right
to redeem is dependent on the ability of the borrower to pay principal and
interest on demand.
PARTICIPATION INTERESTS (MONEY FUND) _ The Fund may purchase from financial
institutions participation interests in securities in which the Fund may
invest. A participation interest gives the Fund an undivided interest in the
security in the proportion that the Fund's participation interest bears to
the total principal amount of the security. These instruments may have fixed,
floating or variable rates of interest, with remaining maturities of 13
months or less. If the participation interest is unrated, or has been given a
rating below that which is permissible for purchase by the Fund, the
participation interest will be backed by an irrevocable letter of credit or
guarantee of a bank, or the payment obligation otherwise will be
collateralized by U.S. Government securities, or, in the case of unrated
participation interests, The Dreyfus Corporation must have determined that
the instrument is of comparable quality to those instruments in which the
Fund may invest.
ASSET-BACKED SECURITIES (MONEY FUND) _ The Fund may purchase asset-backed
securities, which are securities issued by special purpose entities whose
primary assets consist of a pool of mortgages, loans, receivables or other
assets. Payment of principal and interest may depend largely on the cash
flows generated by the assets backing the securities and, in certain cases,
supported by letters of credit, surety bonds or other forms of credit or
liquidity enhancements. The value of these asset-backed securities also may
be affected by the creditworthiness of the servicing agent for the pool of
assets, the originator of the loans or receivables or the financial
institution providing the credit support.
MUNICIPAL OBLIGATIONS (Municipal Funds) _ Municipal Obligations generally
include debt obligations issued to obtain funds for various public purposes
as well as certain industrial development bonds issued by or on behalf of
public authorities. Municipal Obligations are classified as general obligation
bonds, revenue bonds and notes. General obligation bonds are secured by the
issuer's pledge of its faith, credit and taxing power for the payment of
principal and interest. Revenue bonds are payable from the
[Page 27]
revenue derived from a particular facility or class of facilities or, in some
cases, from the proceeds of a special excise or other specific revenue
source, but not from the general taxing power. Tax exempt industrial
development bonds, in most cases, are revenue bonds that generally do not
carry the pledge of the credit of the issuing municipality, but generally are
guaranteed by the corporate entity on whose behalf they are issued. Notes are
short-term instruments which are obligations of the issuing municipalities or
agencies and are sold in anticipation of a bond sale, collection of taxes or
receipt of other revenues. Municipal Obligations include municipal
lease/purchase agreements which are similar to installment purchase contracts
for property or equipment issued by municipalities.
CERTAIN TAX EXEMPT OBLIGATIONS (Municipal Funds) _ Each Municipal Fund may
purchase floating and variable rate demand notes and bonds, which are tax
exempt obligations ordinarily having stated maturities in excess of 13
months, but which permit the holder to demand payment of principal at any
time or at specified intervals not exceeding 13 months, in each case upon not
more than 30 days' notice. Variable rate demand notes include master demand
notes which are obligations that permit the Fund to invest fluctuating
amounts, at varying rates of interest, pursuant to direct arrangements
between the Fund, as lender, and the borrower. These obligations permit daily
changes in the amount borrowed. Frequently, such obligations are secured by
letters of credit or other credit support arrangements provided by banks.
Changes in the credit quality of banks and other financial institutions that
provide such credit or liquidity enhancements to the Fund's portfolio securiti
es could cause losses to the Fund and affect its share price. Because these
obligations are direct lending arrangements between the lender and borrower,
it is not contemplated that such instruments generally will be traded, and
there generally is no established secondary market for these obligations,
although they are redeemable at face value plus accrued interest.
Accordingly, where these obligations are not secured by letters of credit or
other credit support arrangements, the Fund's right to redeem is dependent on
the ability of the borrower to pay principal and interest on demand. Each
obligation purchased by the Fund will meet the quality criteria established
for the purchase of Municipal Obligations.
TAX EXEMPT PARTICIPATION INTERESTS (Municipal Funds) _ Each Municipal Fund
may purchase from financial institutions participation interests in Municipal
Obligations (such as industrial development bonds and municipal
lease/purchase agreements). A participation interest gives the Fund an
undivided interest in the Municipal Obligation in the proportion that the
Fund's participation interest bears to the total principal amount of the
Municipal Obligation. These instruments may have fixed, floating or variable
rates of interest, with remaining maturities of 13 months or less. If the
participation interest is unrated or has been given a rating below that which
otherwise is permissible for purchase by the Fund, it will be backed by an
irrevocable letter of credit or guarantee of a bank that the Fund's Board has
determined meets prescribed quality standards for banks, or the payment
obligation otherwise will be collateralized by U.S. Government securities.
For certain participation interests, the Fund will have the right to demand
payment, on not more than seven days' notice, for all or any part of the
Fund's participation interest in the Municipal Obligation, plus accrued
interest. As to these instruments, the Fund intends to exercise its right to
demand payment only upon a default under the terms of the Municipal
Obligation, as needed to provide liquidity to meet redemptions, or to
maintain or improve the quality of its investment portfolio.
TENDER OPTION BONDS (Municipal Funds) _ Each Municipal Fund may purchase
tender option bonds. A tender option bond is a Municipal Obligation
(generally held pursuant to a custodial arrangement) having a relatively long
maturity and bearing interest at a fixed rate substantially higher than prevai
ling short-term tax exempt rates, that has been coupled with the agreement of
a third party, such as a bank, broker-dealer or other financial institution,
pursuant to which such institution grants the security holders the option, at
periodic intervals, to tender their securities to the institution and receive
the face value thereof. As consideration for providing the option, the
financial institution receives periodic fees equal to the difference between
the Municipal Obligation's fixed coupon rate and the rate, as determined
[Page 28]
by a remarketing or similar agent at or near the commencement of such
period, that would cause the securities, coupled with the tender option, to
trade at par on the date of such determination. Thus, after payment of this
fee, the security holder effectively holds a demand obligation that bears
interest at the prevailing short-term tax exempt rate. The Dreyfus
Corporation, on behalf of the Fund, will consider on an ongoing basis the
creditworthiness of the issuer of the underlying Municipal Obligation, of any
custodian and of the third party provider of the tender option. In certain
instances and for certain tender option bonds, the option may be terminable
in the event of a default in payment of principal or interest on the
underlying Municipal Obligations and for other reasons.
STAND-BY COMMITMENTS (Municipal Funds) _ Each Municipal Fund may acquire
"stand-by commitments" with respect to Municipal Obligations held in its
portfolio. Under a stand-by commitment, the Fund obligates a broker, dealer
or bank to repurchase, at the Fund's option, specified securities at a specifi
ed price and, in this respect, stand-by commitments are comparable to put
options. The exercise of a stand-by commitment, therefore, is subject to the
ability of the seller to make payment on demand. The Fund will acquire
stand-by commitments solely to facilitate portfolio liquidity and does not
intend to exercise its rights thereunder for trading purposes. The Fund may
pay for stand-by commitments if such action is deemed necessary, thus
increasing to a degree the cost of the underlying Municipal Obligation and
similarly decreasing such security's yield to investors. Gains realized in
connection with stand-by commitments will be taxable.
TAXABLE INVESTMENTS (Municipal Funds) _ From time to time, on a temporary
basis other than for temporary defensive purposes (but not to exceed 20% of
the value of the Fund's net assets) or for temporary defensive purposes, each
Municipal Fund may invest in taxable short-term investments ("Taxable
Investments") consisting of: notes of issuers having, at the time of
purchase, a quality rating within the two highest grades of Moody's, S&P or
Fitch; obligations of the U.S. Government, its agencies or instrumentalities;
commercial paper rated not lower than P-2 by Moody's, A-2 by S&P or F-2 by
Fitch; certificates of deposit of U.S. domestic banks, including foreign
branches of domestic banks, with assets of one billion dollars or more; time
deposits; bankers' acceptances and other short-term bank obligations; and
repurchase agreements in respect of any of the foregoing. Dividends paid by
the Fund that are attributable to income earned by the Fund from Taxable
Investments will be taxable to investors. See "Dividends, Distributions and
Taxes." Except for temporary defensive purposes, at no time will more than
20% of the value of the Fund's net assets be invested in Taxable Investments.
If the Fund purchases Taxable Investments, it will value them using the
amortized cost method and comply with the provisions of Rule 2a-7 relating to
purchases of taxable instruments. When the California Municipal Fund or New
York Municipal Fund has adopted a temporary defensive position, including
when acceptable California or New York Municipal Obligations are unavailable
for investment by the relevant Fund, in excess of 35% of the Fund's net
assets may be invested in securities that are not exempt from California or
New York State and New York City income taxes, respectively. Under normal
market conditions, the Fund anticipates that not more than 5% of the value of
its total assets will be invested in any one category of Taxable Investments.
Taxable Investments are more fully described in the Statement of Additional
Information to which reference hereby is made.
ILLIQUID SECURITIES _ Each Fund may invest up to 10% of the value of its net
assets in securities as to which a liquid trading market does not exist,
provided such investments are consistent with the Fund's investment
objective. Such securities may include securities that are not readily
marketable, such as certain securities that are subject to legal or
contractual restrictions on resale, and repurchase agreements providing for
settlement in more than seven days after notice. As to these securities, the
Fund is subject to a risk that should the Fund desire to sell them when a
ready buyer is not available at a price the Fund deems representative of
their value, the value of the Fund's net assets could be adversely affected.
[Page 29]
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS AND IN THE FUND'S OFFICIAL SALES LITERATURE IN CONNECTION WITH THE
OFFER OF THE FUND'S SHARES, AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
FUND. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER IN ANY STATE IN WHICH, OR
TO ANY PERSON TO WHOM, SUCH OFFERING MAY NOT LAWFULLY BE MADE.
[Page 30]
[This Page Intentionally Left Blank]
[Page 31]
General Government Securities
Money Market Fund, Inc.
General Money Market Fund, Inc.
General California Municipal
Money Market Fund
General Municipal
Money Market Fund, Inc.
General New York Municipal
Money Market Fund
Combined Prospectus
[LION LOGO]
CLASS B SHARES
Dreyfus
CopyRight 1997 Dreyfus Service Corporation
GEN/p1297B
[Page 32]
GENERAL GOVERNMENT SECURITIES MONEY MARKET FUND, INC.
GENERAL MONEY MARKET FUND, INC.
GENERAL CALIFORNIA MUNICIPAL MONEY MARKET FUND
GENERAL MUNICIPAL MONEY MARKET FUND, INC.
GENERAL NEW YORK MUNICIPAL MONEY MARKET FUND
COMBINED PART B
(STATEMENT OF ADDITIONAL INFORMATION)
DECEMBER 1, 1997
CLASS A AND CLASS B SHARES
This Statement of Additional Information, which is not a prospectus,
supplements and should be read in conjunction with the current combined
Prospectus for Class A or Class B shares of General Government Securities
Money Market Fund, Inc. (the "Government Money Fund"), General Money Market
Fund, Inc. (the "Money Fund"), General California Municipal Money Market
Fund (the "California Municipal Fund"), General Municipal Money Market Fund,
Inc. (the "National Municipal Fund") and General New York Municipal Money
Market Fund (the "New York Municipal Fund") (each a "Fund" and collectively
the "Funds"), dated December 1, 1997, as it may be revised from time to
time. To obtain a copy of the Prospectus for Class A or Class B shares of a
Fund, please write to a Fund at 144 Glenn Curtiss Boulevard, Uniondale, New
York 11556-0144, or call the following numbers:
Call Toll Free 1-800-645-6561
In New York City -- Call 1-718-895-1396
Outside the U.S. -- Call 516-794-5452
The Dreyfus Corporation (the "Manager") serves as each Fund's
investment adviser.
Premier Mutual Fund Services, Inc. (the "Distributor") is the
distributor of each Fund's shares.
Each Fund is a separate entity with a separate portfolio. The
operations and investment results of one Fund are unrelated to those of each
other Fund. This combined Statement of Additional Information has been
provided for your convenience to provide you with the opportunity to
consider five investment choices in one document.
TABLE OF CONTENTS
Page
Investment Objective and Management Policies B-3
Management of the Funds B-16
Management Agreements B-21
Purchase of Shares B-23
Service Plan and Distribution Plan B-24
Shareholder Services Plans B-27
Redemption of Shares B-28
Shareholder Services B-31
Determination of Net Asset Value B-34
Dividends, Distributions and Taxes B-35
Yield Information B-36
Portfolio Transactions B-38
Information About the Funds B-39
Transfer and Dividend Disbursing Agent, Custodian,
Counsel and Independent Auditors B-39
Financial Statements and Reports of Independent Auditors B-40
Appendix A B-41
Appendix B B-44
Appendix C B-48
Appendix D B-61
Appendix E B-74
INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES
The following information supplements and should be read in conjunction
with the sections of each Fund Prospectus entitled "Description of the
Funds" and "Appendix."
Portfolio Securities
Repurchase Agreements. (All Funds) Each Fund's custodian or sub-
custodian will have custody of, and will hold in a segregated account,
securities acquired by the Fund under a repurchase agreement. Repurchase
agreements are considered by the staff of the Securities and Exchange
Commission to be loans by each Fund. In an attempt to reduce the risk of
incurring a loss on a repurchase agreement, each Fund will enter into
repurchase agreements only with domestic banks with total assets in excess
of $1 billion, or primary government securities dealers reporting to the
Federal Reserve Bank of New York, with respect to securities of the type in
which the Fund may invest, and will require that additional securities be
deposited with it if the value of the securities purchased should decrease
below the resale price.
Illiquid Securities. (All Funds) Where a substantial market of
qualified institutional buyers develops for certain restricted securities
purchased by a Fund pursuant to Rule 144A under the Securities Act of 1933,
as amended, the Fund intends to treat such securities as liquid securities
in accordance with procedures approved by the Fund's Board. Because it is
not possible to predict with assurance how the market for restricted
securities pursuant to Rule 144A will develop, each Fund's Board has
directed the Manager to monitor carefully the Fund's investments in such
securities with particular regard to trading activity, availability of
reliable price information and other relevant information. To the extent
that, for a period of time, qualified institutional buyers cease purchasing
restricted securities pursuant to Rule 144A, a Fund's investing in such
securities may have the effect of increasing the level of illiquidity in the
Fund's portfolio during such period.
Bank Obligations. (Money Fund) As a result of Federal and state laws
and regulations, domestic banks whose certificates of deposit ("CDs") may be
purchased by the Money Fund are, among other things, generally required to
maintain specified levels of reserves, and are subject to other supervision
and regulation designed to promote financial soundness. However, not all of
such laws and regulations apply to the foreign branches of domestic banks.
Domestic commercial banks organized under Federal law are supervised and
examined by the Comptroller of the Currency and are required to be members
of the Federal Reserve System and to have their deposits insured by the
Federal Deposit Insurance Corporation (the "FDIC"). Domestic banks organized
under state law are supervised and examined by state banking authorities but
are members of the Federal Reserve System only if they elect to join. In
addition, state banks whose CDs may be purchased by the Money Fund are
insured by the Bank Insurance Fund administered by the FDIC (although such
insurance may not be of material benefit to the Money Fund, depending upon
the principal amount of the CDs of each bank held by the Money Fund) and are
subject to Federal examination and to a substantial body of Federal law and
regulation.
Obligations of foreign branches of domestic banks, foreign subsidiaries
of domestic banks and domestic and foreign branches of foreign banks, such
as CDs and time deposits ("TDs"), may be general obligations of the parent
banks in addition to the issuing branch, or may be limited by the terms of a
specific obligation and governmental regulation. Such obligations are
subject to different risks than are those of domestic banks. These risks
include foreign economic and political developments, foreign governmental
restrictions that may adversely affect payment of principal and interest on
the obligations, foreign exchange controls and foreign withholding and other
taxes on interest income. These foreign branches and subsidiaries are not
necessarily subject to the same or similar regulatory requirements as apply
to domestic banks, such as mandatory reserve requirements, loan limitations,
and accounting, auditing and financial recordkeeping requirements. In
addition, less information may be publicly available about a foreign branch
of a domestic bank or about a foreign bank than about a domestic bank.
Obligations of United States branches of foreign banks may be general
obligations of the parent bank in addition to the issuing branch, or may be
limited by the terms of a specific obligation or by Federal and state
regulation as well as governmental action in the country in which the
foreign bank has its head office. A domestic branch of a foreign bank with
assets in excess of one billion dollars may be subject to reserve
requirements imposed by the Federal Reserve System or by the state in which
the branch is located if the branch is licensed in that state.
In addition, Federal branches licensed by the Comptroller of the
Currency and branches licensed by certain states ("State Branches") may
required to: (1) pledge to the regulator, by depositing assets with a
designated bank within the state, a certain percentage of their assets as
fixed from time to time by the appropriate regulatory authority; and (2)
maintain assets within the state in an amount equal to a specified
percentage of the aggregate amount of liabilities of the foreign bank
payable at or through all of its agencies or branches within the state. The
deposits of Federal or State Branches generally must be insured by the FDIC
if such branches take deposits of less than $100,000.
In view of the foregoing factors associated with the purchase of CDs
and TDs issued by foreign branches of domestic banks, by foreign
subsidiaries of domestic banks, by foreign branches of foreign banks or by
domestic branches of foreign banks, the Manager carefully evaluates such
investments on a case-by-case basis.
The Money Fund may purchase CDs issued by banks, savings and loan
associations and similar thrift institutions with less than one billion
dollars in assets, the deposits of which are insured by the FDIC, provided
the Money Fund purchases any such CD in a principal amount of no more than
$100,000, which amount would be fully insured by the Bank Insurance Fund or
the Savings Association Insurance Fund administered by the FDIC. Interest
payments on such a CD are not insured by the FDIC. The Money Fund will not
own more than one such CD per such issuer.
Municipal Obligations. (California Municipal Fund, National Municipal
Fund and New York Municipal Fund (the "Municipal Funds")) The average
distribution of investments (at value) in Municipal Obligations (including
notes) by ratings as of the date indicated, computed on a monthly basis, was
as follows:
<TABLE>
<CAPTION>
Percentage of Value
California National New York
Municipal Municipal Municipal
Fitch Investors or Moody's Investors or Standard Fund Fund Fund
Services, L.P. Service, Inc. & Poor's Ratings Group July 31 November 30, November 30,
("Fitch") ("Moody's") ("S&P") 1997 1996 1996
<S> <C> <C> <C> <C> <C>
F1+/F1 VMIG1/MIG1,P1 SP1+/SP1,A1+/A1 92.1% 94.4% 95.7%
AAA/AA Aaa/Aa AAA/AA 4.9% 3.6% 1.0%
Not Rated Not Rated Not Rated 3.0%* 2.0%* 3.3%*
100.0% 100.0% 100.0%
</TABLE>
_______________________________
* Included in the Not Rated category are securities which, while not
rated, have been determined by the Manager to be of comparable quality
to securities in the VMIG1/MIG1 or SP-1+/SP-1 rating categories.
The term "Municipal Obligations" generally includes debt obligations
issued to obtain funds for various public purposes, including the
construction of a wide range of public facilities such as airports, bridges,
highways, housing, hospitals, mass transportation, schools, streets and
water and sewer works. Other public purposes for which Municipal
Obligations may be issued include refunding outstanding obligations,
obtaining funds for general operating expenses and lending such funds to
other public institutions and facilities. In addition, certain types of
industrial development bonds are issued by or on behalf of public
authorities to obtain funds to provide for the construction, equipment,
repair or improvement of privately operated housing facilities, sports
facilities, convention or trade show facilities, airport, mass transit,
industrial, port or parking facilities, air or water pollution control
facilities and certain local facilities for water supply, gas, electricity
or sewage or solid waste disposal; the interest paid on such obligations may
be exempt from Federal income tax, although current tax laws place
substantial limitations on the size of such issues. Such obligations are
considered to be Municipal Obligations if the interest paid thereon
qualifies as exempt from Federal income tax in the opinion of bond counsel
to the issuer. There are, of course, variations in the security of
Municipal Obligations, both within a particular classification and between
classifications.
Floating and variable rate demand obligations are tax exempt
obligations ordinarily having stated maturities in excess of 13 months, but
which permit the holder to demand payment of principal at any time, or at
specified intervals not exceeding 13 months, in each
case upon not more than 30 days' notice. The issuer of such obligations
ordinarily has a corresponding right, after a given period, to prepay in its
discretion the outstanding principal amount of the obligations plus accrued
interest upon a specified number of days' notice to the holders thereof.
The interest rate on a floating rate demand obligation is based on a known
lending rate, such as a bank's prime rate, and is adjusted automatically
each time such rate is adjusted. The interest rate on a variable rate
demand obligation is adjusted automatically at specified intervals.
For the purpose of diversification under the Investment Company Act of
1940, as amended (the "1940 Act"), with respect to the National Municipal
Fund, the identification of the issuer of Municipal Obligations depends on
the terms and conditions of the security. When the assets and revenues of
an agency, authority, instrumentality or other political subdivision are
separate from those of the government creating the subdivision and the
security is backed only by the assets and revenues of the subdivision, such
subdivision would be deemed to be the sole issuer. Similarly, in the case
of an industrial development bond, if that bond is backed only by the assets
and revenues of the non-governmental user, then such non-governmental user
would be deemed to be the sole issuer. If, however, in either case, the
creating government or some other entity guarantees a security, such a
guaranty would be considered a separate security and will be treated as an
issue of such government or other entity.
The yields on Municipal Obligations are dependent on a variety of
factors, including general economic and monetary conditions, money market
factors, conditions in the Municipal Obligations market, size of a
particular offering, maturity of the obligation and rating of the issue.
The imposition of a Fund's management fee, as well as other operating
expenses, including fees paid under a Fund's Service Plan and/or
Distribution Plan, will have the effect of reducing the yield to investors.
Municipal lease obligations or installment purchase contract
obligations (collectively, "lease obligations") have special risks not
ordinarily associated with Municipal Obligations. Although lease
obligations do not constitute general obligations of the municipality for
which the municipality's taxing power is pledged, a lease obligation
ordinarily is backed by the municipality's covenant to budget for,
appropriate and make the payments due under the lease obligation. However,
certain lease obligations contain "non-appropriation" clauses which provide
that the municipality has no obligation to make lease or installment
purchase payments in future years unless money is appropriated for such
purpose on a yearly basis. Although "non-appropriation" lease obligations
are secured by the leased property, disposition of the property in the event
of foreclosure might prove difficult. Each Municipal Fund will seek to
minimize these risks by investing only in those lease obligations that
(1) are rated in one of the two highest rating categories for debt
obligations by at least two nationally recognized statistical rating
organizations (or one rating organization if the lease obligation was rated
only by one such organization) or (2) if unrated, are purchased principally
from the issuer or domestic banks or other responsible third parties, in
each case only if the seller shall have entered into an agreement with the
Fund providing that the seller or other responsible third party will either
remarket or repurchase the lease obligation within a short period after
demand by the Fund. The staff of the Securities and Exchange Commission
currently considers certain lease obligations to be illiquid. Accordingly,
not more than 10% of the value of a Fund's net assets will be invested in
lease obligations that are illiquid and in other illiquid securities.
A Municipal Fund will not purchase tender option bonds unless (a) the
demand feature applicable thereto is exercisable by the Fund within 13
months of the date of such purchase upon no more than 30 days' notice and
thereafter is exercisable by the Fund no less frequently than annually upon
no more than 30 days' notice and (b) at the time of such purchase, the
Manager reasonably expects (i) based upon its assessment of current and
historical interest rate trends, that prevailing short-term tax exempt rates
will not exceed the stated interest rate on the underlying Municipal
Obligations at the time of the next tender fee adjustment and (ii) that the
circumstances which might entitle the grantor of a tender option to
terminate the tender option would not occur prior to the time of the next
tender opportunity. At the time of each tender opportunity, the Fund will
exercise the tender option with respect to any tender option bonds unless
the Manager reasonably expects, (x) based upon its assessment of current and
historical interest rate trends, that prevailing short-term tax exempt rates
will not exceed the stated interest rate on the underlying Municipal
Obligations at the time of the next tender fee adjustment, and (y) that the
circumstances which might entitle the grantor of a tender option to
terminate the tender option would not occur prior to the time of the next
tender opportunity. The Fund will exercise the tender feature with respect
to tender option bonds, or otherwise dispose of its tender option bonds,
prior to the time the tender option is scheduled to expire pursuant to the
terms of the agreement under which the tender option is granted. The Fund
otherwise will comply with the provisions of Rule 2a-7 in connection with
the purchase of tender option bonds, including, without limitation, the
requisite determination by the Fund's Board that the tender option bonds in
question meet the quality standards described in Rule 2a-7, which, in the
case of a tender option bond subject to a conditional demand feature, would
include a determination that the security has received both the required
short-term and long-term quality rating or is determined to be of comparable
quality. In the event of a default of the Municipal Obligation underlying a
tender option bond, or the termination of the tender option agreement, the
Fund would look to the maturity date of the underlying security for purposes
of compliance with Rule 2a-7 and, if its remaining maturity was greater than
13 months, the Fund would sell the security as soon as would be practicable.
The Fund will purchase tender option bonds only when it is satisfied that
the custodial and tender option arrangements, including the fee payment
arrangements, will not adversely affect the tax exempt status of the
underlying Municipal Obligations and that payment of any tender fees will
not have the effect of creating taxable income for the Fund. Based on the
tender option bond agreement, the Fund expects to be able to value the
tender option bond at par; however, the value of the instrument will be
monitored to assure that it is valued at fair value.
Ratings of Municipal Obligations. (Municipal Funds) If, subsequent to
its purchase by a Municipal Fund, (a) an issue of rated Municipal
Obligations ceases to be rated in the highest rating category by at least
two rating organizations (or one rating organization if the instrument was
rated by only one such organization) or the Fund's Board determines that it
is no longer of comparable quality or (b) the Manager becomes aware that any
portfolio security not so highly rated or any unrated security has been
given a rating by any rating organization below the rating organization's
second highest rating category, the Fund's Board will reassess promptly
whether such security presents minimal credit risk and will cause the Fund
to take such action as it determines is in the best interest of the Fund and
its shareholders; provided
that the reassessment required by clause (b) is not required if the
portfolio security is disposed of or matures within five business days of
the Manager becoming aware of the new rating and the Fund's Board is
subsequently notified of the Manager's actions.
To the extent that the ratings given by Moody's, S&P or Fitch for
Municipal Obligations may change as a result of changes in such
organizations or their rating systems, each Fund will attempt to use
comparable ratings as standards for its investments in accordance with its
stated investment policies contained in the Fund's Prospectus and this
Statement of Additional Information. The ratings of Moody's, S&P and Fitch
represent their opinions as to the quality of the Municipal Obligations
which they undertake to rate. It should be emphasized, however, that
ratings are relative and subjective and are not absolute standards of
quality. Although these ratings may be an initial criterion for selection
of portfolio investments, the Manager also will evaluate these securities
and the creditworthiness of the issuers of such securities.
Taxable Investments. (Municipal Funds) The taxable investments in
which Municipal Funds may invest include U.S. Government securities,
commercial paper, certificates of deposit, time deposits, bankers'
acceptances, and repurchase agreements. See also "Repurchase Agreements"
above.
Securities issued or guaranteed by the U.S. Government or its agencies
or instrumentalities include U.S. Treasury securities, which differ in their
interest rates, maturities and times of issuance. Some obligations issued
or guaranteed by U.S. Government agencies and instrumentalities are
supported by the full faith and credit of the U.S. Treasury; others by the
right of the issuer to borrow from the U.S. Treasury; others by discretion
ary authority of the U.S. Government to purchase certain obligations of the
agency or instrumentality; and others only by the credit of the agency or
instrumentality. These securities bear fixed, floating or variable rates of
interest. Interest may fluctuate based on generally recognized reference
rates or the relationship of rates. While the U.S. Government provides
financial support to such U.S. Government-sponsored agencies or
instrumentalities, no assurance can be given that it will always do so,
since it is not so obligated by law.
Commercial paper consists of short-term, unsecured promissory notes
issued to finance short-term credit needs.
Certificates of deposit are negotiable certificates representing the
obligation of a bank to repay funds deposited with it for a specified period
of time.
Time deposits are non-negotiable deposits maintained in a banking
institution for a specified period of time (in no event longer than seven
days) at a stated interest rate. Investments in time deposits generally are
limited to London branches of domestic banks that have total assets in
excess of one billion dollars. Time deposits which may be held by the Fund
will not benefit from insurance from the Bank Insurance Fund or the Savings
Association Insurance Fund administered by the Federal Deposit Insurance
Corporation.
Bankers' acceptances are credit instruments evidencing the obligation
of a bank to pay a draft drawn on it by a customer. These instruments
reflect the obligation both of the bank and of the drawer to pay the face
amount of the instrument upon maturity. Other short-term bank obligations
may include uninsured direct obligations bearing fixed, floating or variable
rates of interest.
Management Policies
Forward Commitments. (Municipal Funds) Municipal Obligations and other
securities purchased on a forward commitment or when-issued basis are
subject to changes in value (generally changing in the same way, i.e.,
appreciating when interest rates decline and depreciating when interest
rates rise) based upon the public's perception of the creditworthiness of
the issuer and changes, real or anticipated, in the level of interest rates.
Securities purchased on a forward commitment or when-issued basis may expose
a Fund to risks because they may experience such fluctuations prior to their
actual delivery. Purchasing securities on a when-issued basis can involve
the additional risk that the yield available in the market when the delivery
takes place actually may be higher than that obtained in the transaction
itself. Purchasing securities on a forward commitment or when-issued basis
when a Fund is fully or almost fully invested may result in greater
potential fluctuation in the value of the Fund's net assets and its net
asset value per share.
Investment Considerations and Risks
Investing in California Municipal Obligations. (California Municipal Fund)
Investors should consider carefully the special risks inherent in the Fund's
investment in California Municipal Obligations. These risks result from
certain amendments to the California Constitution and other statues that
limit the taxing and spending authority of California governmental entities,
as well as from the general financial condition of the State of California.
A severe recession from 1990 through fiscal 1994 reduced revenues and
increased expenditures for social welfare programs, resulting in a period of
budget imbalance. During this period, expenditures exceeded revenues in
four out of six years, and the State accumulated and sustained a budget
deficit in its budget reserve, the Special Fund for Economic Uncertainties,
approaching $2.8 billion at its peak at June 30, 1993. By the 1993-94
fiscal year, the accumulated budget deficit was so large that it was
impractical to budget to retire it in one year, so a two-year program was
implemented, using the issuance of revenue anticipation warrants to carry a
portion of the deficit over the end of the fiscal year. When the economy
failed to recover sufficiently, a second two-year plan was implemented in
1994-95, again using cross-fiscal year revenue anticipation warrants to
partly finance the deficit into the 1995-96 fiscal year. As a consequence
of the accumulated budget deficits, the State's cash resources available to
pay its ongoing obligations were significantly reduced causing the State to
rely increasingly on external debt markets to meet its cash needs. Future
budget problems or a deterioration in California's general financial
condition may have the effect of impairing the ability of the issuers of
California Municipal Obligations to pay interest on, or repay the principal
of, such California Municipal Obligations. These and other factors may have
the effect of impairing the ability of the issuers of California Municipal
Obligations to pay interest on, or repay principal of, such California
Municipal Obligations. Investors should review "Appendix C" which sets
forth additional information relating to investing in California Municipal
Obligations.
Investing in New York Municipal Obligations. (New York Municipal Fund) Each
investor should consider carefully the special risks inherent in the
investment in New York Municipal Obligations by the Fund. These risks
result from the financial condition of New York State, certain of its public
bodies and municipalities, and New York City. Beginning in early 1975, New
York State, New York City and other New York State entities faced serious
financial difficulties which jeopardized the credit standing and impaired
the borrowing abilities of such entities and contributed to high interest
rates on, and lower market prices for, debt obligations issued by them. A
recurrence of such financial difficulties or a failure of certain financial
recovery programs could result in defaults or declines in the market values
of various New York Municipal Obligations in which the Fund may invest. If
there should be a default or other financial crisis relating to New York
State, New York City, a State or City agency, or a State municipality, the
market value and marketability of outstanding New York Municipal Obligations
in the Fund's portfolio and the interest income to the Fund could be
adversely affected. Moreover, the national recession and the significant
slowdown in the New York and regional economies in the early 1990's added
substantial uncertainty to estimates of the State's tax revenues, which, in
part, caused the State to incur cash-basis operating deficits in the General
Fund and issue deficit notes during the fiscal periods 1989 through 1992.
New York State's financial operations have improved, however, during recent
fiscal years. For its fiscal years 1993 through 1997, the State recorded
balanced budgets on a cash basis, with positive fund balances in the General
Fund. New York State ended its 1996-97 fiscal year on March 31, 1997 in
balance on a cash basis, with a cash surplus in the General Fund of
approximately $1.4 billion. There can be no assurance that New York State
will not face substantial potential budget gaps in future years. Investors
should review "Appendix D" which sets forth additional information relating
to investing in New York Municipal Obligations.
Investment Restrictions
Government Money Fund. The Government Money Fund has adopted
investment restrictions numbered 1 through 10 as fundamental policies, which
cannot be changed without approval by the holders of a majority (as defined
in the 1940 Act) of the Fund's outstanding voting shares. Investment
restrictions numbered 11 and 12 are not fundamental policies and may be
changed by vote of a majority of the Government Money Fund's Board members
at any time. The Government Money Fund may not:
1. Purchase common stocks, preferred stocks, warrants or other equity
securities, or purchase corporate bonds or debentures, state bonds,
municipal bonds or industrial revenue bonds.
2. Borrow money, except from banks for temporary or emergency (not
leveraging) purposes in an amount up to 15% of the value of the Fund's total
assets (including the amount borrowed) based on the lesser of cost or
market, less liabilities (not including the amount borrowed) at the time the
borrowing is made. While borrowings exceed 5% of the value of the Fund's
total assets, the Fund will not make any additional investments.
3. Sell securities short or purchase securities on margin.
4. Write or purchase put or call options.
5. Underwrite the securities of other issuers.
6. Purchase or sell real estate, real estate investment trust
securities, commodities, or oil and gas interests.
7. Make loans to others (except through the purchase of debt
obligations referred to under "Description of the Funds" in the Prospectus).
8. Invest in companies for the purpose of exercising control.
9. Invest in securities of other investment companies, except as they
may be acquired as part of a merger, consolidation or acquisition of assets.
10. Invest more than 25% of its assets in the securities of issuers in
any industry, provided that there shall be no limitation on investments in
obligations issued or guaranteed as to principal and interest by the U.S.
Government.
11. Pledge, mortgage, hypothecate or otherwise encumber its assets,
except to the extent necessary to secure permitted borrowings.
12. Enter into repurchase agreements providing for settlement in more
than seven days after notice or purchase securities which are illiquid, if,
in the aggregate, more than 10% of the value of the Fund's net assets would
be so invested.
* * * * *
Money Fund. The Money Fund has adopted investment restrictions
numbered 1 through 12 as fundamental policies, which cannot be changed
without approval by the holders of a majority (as defined in the 1940 Act)
of the Fund's outstanding voting shares. Investment restriction number 13
is not a fundamental policy and may be changed by vote of a majority of the
Money Fund's Board members at any time. The Money Fund may not:
1. Purchase common stocks, preferred stocks, warrants or other equity
securities, or purchase corporate bonds or debentures, state bonds,
municipal bonds or industrial revenue bonds (except through the purchase of
debt obligations referred to under "Description of the Funds" in the
Prospectus and under "Investment Objective and Management Policies" in this
Statement of Additional Information).
2. Borrow money, except from banks for temporary or emergency (not
leveraging) purposes in an amount up to 15% of the value of the Fund's total
assets (including the amount borrowed) based on the lesser of cost or
market, less liabilities (not including the amount borrowed) at the time the
borrowing is made. While borrowings exceed 5% of the value of the Fund's
total assets, the Fund will not make any additional investments.
3. Pledge its assets, except in an amount up to 15% of the value of
its total assets but only to secure borrowings for temporary or emergency
purposes.
4. Sell securities short.
5. Write or purchase put or call options.
6. Underwrite the securities of other issuers.
7. Purchase or sell real estate investment trust securities,
commodities, or oil and gas interests.
8. Make loans to others (except through the purchase of debt
obligations referred to under "Description of the Funds" in the Prospectus
and under "Investment Objective and Management Policies" in this Statement
of Additional Information).
9. Invest more than 15% of its assets in the obligations of any one
bank, or invest more than 5% of its assets in the commercial paper of any
one issuer. Notwithstanding the foregoing, to the extent required by the
rules of the Securities and Exchange Commission, the Fund will not invest
more than 5% of its assets in the obligations of any one bank.
10. Invest less than 25% of its assets in securities issued by banks
or invest more than 25% of its assets in the securities of issuers in any
other industry, provided that there shall be no limitation on the purchase
of obligations issued or guaranteed by the U.S. Government, its agencies or
instrumentalities.
11. Invest in companies for the purpose of exercising control.
12. Invest in securities of other investment companies, except as they
may be acquired as part of a merger, consolidation or acquisition of assets.
13. Enter into repurchase agreements providing for settlement in more
than seven days after notice or purchase securities which are illiquid, if,
in the aggregate, more than 10% of the value of the Fund's net assets would
be so invested.
* * * * *
California Municipal Fund. The California Municipal Fund has adopted
investment restrictions numbered 1 through 9 as fundamental policies, which
cannot be changed without approval by the holders of a majority (as defined
in the 1940 Act) of the Fund's outstanding voting shares. Investment
restrictions numbered 10 and 11 are not fundamental policies and may be
changed by vote of a majority of the California Municipal Fund's Board
members at any time. The California Municipal Fund may not:
1. Purchase securities other than Municipal Obligations and Taxable
Investments as those terms are defined above and in the Prospectus.
2. Borrow money, except from banks for temporary or emergency (not
leveraging) purposes in an amount up to 15% of the value of the Fund's total
assets (including the amount borrowed) based on the lesser of cost or
market, less liabilities (not including the amount borrowed) at the time the
borrowing is made. While borrowings exceed 5% of the value of the Fund's
total assets, the Fund will not make any additional investments.
3. Sell securities short or purchase securities on margin.
4. Underwrite the securities of other issuers, except that the Fund
may bid separately or as part of a group for the purchase of Municipal
Obligations directly from an issuer for its own portfolio to take advantage
of the lower purchase price available.
5. Purchase or sell real estate, real estate investment trust
securities, commodities or commodity contracts, or oil and gas interests,
but this shall not prevent the Fund from investing in Municipal Obligations
secured by real estate or interests therein.
6. Make loans to others except through the purchase of qualified debt
obligations and the entry into repurchase agreements referred to above and
in the Fund's Prospectus.
7. Invest more than 25% of its total assets in the securities of
issuers in any single industry; provided that there shall be no such
limitation on the purchase of Municipal Obligations and, for temporary
defensive purposes, securities issued by domestic banks and obligations
issued or guaranteed by the U.S. Government, its agencies or
instrumentalities.
8. Invest in companies for the purpose of exercising control.
9. Invest in securities of other investment companies, except as they
may be acquired as part of a merger, consolidation or acquisition of assets.
10. Pledge, hypothecate, mortgage or otherwise encumber its assets,
except to the extent necessary to secure permitted borrowings.
11. Enter into repurchase agreements providing for settlement in more
than seven days after notice or purchase securities which are illiquid if,
in the aggregate, more than 10% of the value of the Fund's net assets would
be so invested.
* * * * *
National Municipal Fund. The National Municipal Fund has adopted
investment restrictions numbered 1 through 11 as fundamental policies which
cannot be changed without approval by the holders of a majority (as defined
in the 1940 Act) of the Fund's outstanding voting shares. Investment
restriction number 12 is not a fundamental policy and may be changed by vote
of a majority of the National Municipal Fund's Board members at any time.
The National Municipal Fund may not:
1. Purchase securities other than Municipal Obligations and Taxable
Investments as those terms are defined above and in the Prospectus.
2. Borrow money, except from banks for temporary or emergency (not
leveraging) purposes in an amount up to 15% of the value of the Fund's total
assets (including the amount borrowed) based on the lesser of cost or
market, less liabilities (not including the amount borrowed) at the time the
borrowing is made. While borrowings exceed 5% of the value of the Fund's
total assets, the Fund will not make any additional investments.
3. Pledge, hypothecate, mortgage or otherwise encumber its assets,
except to secure borrowings for temporary or emergency purposes.
4. Sell securities short or purchase securities on margin.
5. Underwrite the securities of other issuers, except that the Fund
may bid separately or as part of a group for the purchase of Municipal
Obligations directly from an issuer for its own portfolio to take advantage
of the lower purchase price available.
6. Purchase or sell real estate, real estate investment trust
securities, commodities or commodity contracts, or oil and gas interests,
but this shall not prevent the Fund from investing in Municipal Obligations
secured by real estate or interests therein.
7. Make loans to others except through the purchase of qualified debt
obligations and the entry into repurchase agreements referred to above and
in the Prospectus.
8. Invest more than 15% of its assets in the obligations of any one
bank, or invest more than 5% of its assets in the obligations of any other
issuer, except that up to 25% of the value of the Fund's total assets may be
invested, and securities issued or guaranteed by the U.S. Government or its
agencies or instrumentalities may be purchased, without regard to any such
limitations. Notwithstanding the foregoing, to the extent required by the
rules of the Securities and Exchange Commission, the Fund will not invest
more than 5% of its assets in the obligations of any one bank, except that
up to 25% of the value of the Fund's total assets may be invested without
regard to such limitation.
9. Invest more than 25% of its assets in the securities of issuers in
any single industry; provided that there shall be no limitation on the
purchase of Municipal Obligations and, for defensive purposes, securities
issued by banks and obligations issued or guaranteed by the U.S. Government,
its agencies or instrumentalities.
10. Purchase more than 10% of the voting securities of any issuer or
invest in companies for the purpose of exercising control.
11. Invest in securities of other investment companies, except as they
may be acquired as part of a merger, consolidation or acquisition of assets
and except for the purchase, to the extent permitted by Section 12 of the
1940 Act, of shares of registered unit investment trusts whose assets
consist substantially of Municipal Obligations.
12. Enter into repurchase agreements providing for settlement in more
than seven days after notice or purchase securities which are illiquid, if,
in the aggregate, more than 10% of the value of the Fund's net assets would
be so invested.
* * * * *
New York Municipal Fund. The New York Municipal Fund has adopted
investment restrictions numbered 1 through 9 as fundamental policies, which
cannot be changed without approval by the holders of a majority (as defined
in the 1940 Act) of the Fund's outstanding voting shares. Investment
restrictions numbered 10 and 11 are not fundamental policies and may be
changed by vote of a majority of the New York Municipal Fund's Board members
at any time. The New York Municipal Fund may not:
1. Purchase securities other than Municipal Obligations and Taxable
Investments as those terms are defined above and in the Prospectus.
2. Borrow money, except from banks for temporary or emergency (not
leveraging) purposes in an amount up to 15% of the value of the Fund's total
assets (including the amount borrowed) based on the lesser of cost or
market, less liabilities (not including the amount borrowed) at the time the
borrowing is made. While borrowings exceed 5% of the value of the Fund's
total assets, the Fund will not make any additional investments.
3. Sell securities short or purchase securities on margin.
4. Underwrite the securities of other issuers, except that the Fund
may bid separately or as part of a group for the purchase of Municipal
Obligations directly from an issuer for its own portfolio to take advantage
of the lower purchase price available.
5. Purchase or sell real estate, real estate investment trust
securities, commodities or commodity contracts, or oil and gas interests,
but this shall not prevent the Fund from investing in Municipal Obligations
secured by real estate or interests therein.
6. Make loans to others, except through the purchase of qualified
debt obligations and the entry into repurchase agreements referred to above
and in the Fund's Prospectus.
7. Invest more than 25% of its total assets in the securities of
issuers in any single industry; provided that there shall be no such
limitation on the purchase of Municipal Obligations and, for temporary
defensive purposes, securities issued by domestic banks and obligations
issued or guaranteed by the U.S. Government, its agencies or
instrumentalities.
8. Invest in companies for the purpose of exercising control.
9. Invest in securities of other investment companies, except as they
may be acquired as part of a merger, consolidation or acquisition of assets.
10. Pledge, hypothecate, mortgage or otherwise encumber its assets,
except to the extent necessary to secure permitted borrowings.
11. Enter into repurchase agreements providing for settlement in more
than seven days after notice or purchase securities which are illiquid, if,
in the aggregate, more than 10% of the value of the Fund's net assets would
be so invested.
* * * * *
Municipal Funds. For purposes of Investment Restriction No. 7 for the
California Municipal Fund and the New York Municipal Fund and Investment
Restriction No. 9 for the National Municipal Fund, industrial development
bonds, where the payment of principal and interest is the ultimate
responsibility of companies within the same industry, are grouped together
as an industry.
All Funds. If a percentage restriction is adhered to at the time of
investment, a later increase or decrease in percentage resulting from a
change in values or assets will not constitute a violation of such
restriction.
Each Fund may make commitments more restrictive than the restrictions
listed above so as to permit the sale of Fund shares in certain states.
Should a Fund determine that a commitment is no longer in the best interest
of the Fund and its shareholders, the Fund reserves the right to revoke the
commitment by terminating the sale of Fund shares in the state involved.
MANAGEMENT OF THE FUNDS
Board members and officers of each Fund, together with information as
to their principal business occupations during at least the last five years,
are shown below.
Board Members of the Funds
CLIFFORD L. ALEXANDER, JR., Board Member. President of Alexander &
Associates, Inc., a management consulting firm. From 1977 to 1981, Mr.
Alexander served as Secretary of the Army and Chairman of the Board of
the Panama Canal Company, and from 1975 to 1977, he was a member of the
Washington, D.C. law firm of Verner, Liipfert, Bernhard, McPherson and
Alexander. He is a director of American Home Products Corporation,
Cognizant Corporation, a service provider of marketing information and
information technology, The Dun & Bradstreet Corporation, MCI
Communications Corporation, Mutual of America Life Insurance Company
and TLC Beatrice International Holdings, Inc. He is 63 years old and
his address is 400 C Street, N.E., Washington, D.C. 20002.
PEGGY C. DAVIS, Board Member. Shad Professor of Law, New York
University School of Law. Professor Davis has been a member of
the New York University law faculty since 1983. Prior to that
time, she served for three years as a judge in the courts of New
York State; was engaged for eight years in the practice of law,
working in both corporate and non-profit sectors; and served for
two years as a criminal justice administrator in the government of
the City of New York. She writes and teaches in the fields of
evidence, constitutional theory, family law, social sciences and
the law, legal process and professional methodology and training.
She is 54 years old and her address is c/o New York University
School of Law, 249 Sullivan Street, New York, New York 10011.
JOSEPH S. DiMARTINO, Chairman of the Board. Since January 1995, Chairman of
the Board of various funds in the Dreyfus Family of Funds. He is also
Chairman of the Board of Directors of The Noel Group, Inc., a venture
capital company, and Staffing Resources, Inc., a temporary placement
agency; and a director of The Muscular Dystrophy Association,
HealthPlan Services Corporation, a provider of marketing,
administrative and risk management services to health and other benefit
programs, Carlyle Industries, Inc. (formerly, Belding Heminway Company,
Inc.), a button packager and distributor, and Curtis Industries, Inc.,
a national distributor of security products, chemicals, and automotive
and other hardware. For more than five years prior to January 1995, he
was President, a director and, until August 1994, Chief Operating
Officer of the Manager and Executive Vice President and a director of
Dreyfus Service Corporation, a wholly-owned subsidiary of the Manager
and, until August 24, 1994, the Funds' distributor. From August 1994
until December 31, 1994, he was a director of Mellon Bank Corporation.
He is 53 years old and his address is 200 Park Avenue, New York, New
York 10166.
ERNEST KAFKA, Board Member. A physician engaged in private practice
specializing in the psychoanalysis of adults and adolescents. Since
1981, he has served as an Instructor at the New York Psychoanalytic
Institute and, prior thereto, held other teaching positions. He is
Associate Clinical Professor of Psychiatry at Cornell Medical School.
For more than the past five years, Dr. Kafka has held numerous
administrative positions and has published many articles on subjects in
the field of psychoanalysis. He is 64 years old and his address is 23
East 92nd Street, New York, New York 10128.
SAUL B. KLAMAN, Board Member. Chairman and Chief Executive Officer of SBK
Associates, which provides research and consulting services to
financial institutions. Dr. Klaman was President of the National
Association of Mutual Savings Banks until November 1983, President of
the National Council of Savings Institutions until June 1985, Vice
Chairman of Golembe Associates and BEI Golembe, Inc. until 1989 and
Chairman Emeritus of BEI Golembe, Inc. until November 1992. He also
served as an Economist to the Board of Governors of the Federal Reserve
System and on several Presidential Commissions, and has held numerous
consulting and advisory positions in the fields of economics and
housing finance. He is 77 years old and his address is 431-B Dedham
Street, The Gables, Newton Center, Massachusetts 02159.
NATHAN LEVENTHAL, Board Member. President of Lincoln Center for the
Performing Arts, Inc. Mr. Leventhal was Deputy Mayor for Operations of
New York City from September 1979 until March 1984 and Commissioner of
the Department of Housing Preservation and Development of New York City
from February 1978 to September 1979. Mr. Leventhal was an associate
and then a member of the New York law firm of Poletti Freidin Prashker
Feldman and Gartner from 1974 to 1978. He was Commissioner of Rent and
Housing Maintenance for New York City from 1972 to 1973. Mr. Leventhal
served as Chairman of Citizens Union, an organization which strives to
reform and modernize city and state government from June 1994 until
June 1997. He is 54 years old and his address is 70 Lincoln Center
Plaza, New York, New York 10023-6583.
For so long as a Fund's plan described in the sections captioned
"Service Plan and Distribution Plan" and "Shareholder Services Plans" remain
in effect, the Board members of the Fund who are not "interested persons" of
the Fund, as defined in the 1940 Act, will be selected and nominated by the
Board members who are not "interested persons" of the Fund.
Each Fund typically pays its Board members an annual retainer and a per
meeting fee and reimburses them for their expenses. The Chairman of the
Board receives an additional 25% of such compensation. Emeritus Board
members are entitled to receive an annual retainer and per meeting fee of
one-half the amount paid to them as Board members. The aggregate amounts of
compensation paid to each Board member by each Fund for its most recent
fiscal year, and by all other funds in the Dreyfus Family of Funds for which
such person is a Board member (the number of which is set forth in
parenthesis next to each Board member's total compensation) for the year
ended December 31, 1996, are set forth below.
Total Compensation
Aggregate From Funds and
Compensation Fund Complex Paid
Name of Board Member from the Fund* to Board Member
CLIFFORD L. ALEXANDER, JR. $ 82,436 (17)
Government Money Fund 1 $5,000
Money Fund 1 $5,000
California Municipal Fund 2 $3,750
National Municipal Fund 3 $5,000
New York Municipal Fund 3 $3,750
PEGGY C. DAVIS $ 73,084 (15)
Government Money Fund $5,500
Money Fund $5,500
California Municipal Fund $3,750
National Municipal Fund $5,500
New York Municipal Fund $4,000
JOSEPH S. DIMARTINO $517,075 (94)
Government Money Fund $6,875
Money Fund $6,875
California Municipal Fund $4,688
National Municipal Fund $6,875
New York Municipal Fund $5,000
ERNEST KAFKA $ 69,584 (15)
Government Money Fund $5,000
Money Fund $5,000
California Municipal Fund $3,750
National Municipal Fund $5,000
New York Municipal Fund $3,750
SAUL B. KLAMAN $ 73,584 (15)
Government Money Fund $5,500
Money Fund $5,500
California Municipal Fund $3,750
National Municipal Fund $5,500
New York Municipal Fund $4,000
NATHAN LEVENTHAL $ 71,084 (15)
Government Money Fund $5,500
Money Fund $5,500
California Municipal Fund $3,750
National Municipal Fund $5,500
New York Municipal Fund $4,000
_____________________________________
* Amount does not include reimbursed expenses for attending Board
meetings, which amounted to $1,015 for the Government Money Fund, $597
for the Money Fund, $687 for the California Municipal Fund, $1,199 for
the National Municipal Fund and $2,510 for the New York Municipal Fund,
for all Board members as a group.
1. The Fund's most recent fiscal year end was January 31, 1997
2. The Fund's most recent fiscal year end was July 31, 1997
3. The Fund's most recent fiscal year end was November 30, 1996
Officers of the Funds
MARIE E. CONNOLLY, President and Treasurer. President, Chief Executive
Officer, Chief Compliance Officer and a director of the Distributor and
Funds Distributor, Inc., the ultimate parent of which is Boston
Institutional Group, Inc., and an officer of other investment companies
advised or administered by the Manager. She is 40 years old.
DOUGLAS C. CONROY, Vice President and Assistant Secretary. Assistant Vice
President of Funds Distributor, Inc., and an officer of other
investment companies advised or administered by the Manager. From
April 1993 to January 1995, he was a Senior Fund Accountant for
Investors Bank & Trust Company. From December 1991 to March 1993, he
was employed as a Fund Accountant at The Boston Company, Inc. He is 28
years old.
ELIZABETH A. KEELEY, Vice President and Assistant Secretary. Vice President
of the Distributor and Funds Distributor, Inc., and an officer of other
investment companies advised or administered by the Manager. She has
been employed by the Distributor since September 1995. She is 27 years
old.
MARY A. NELSON, Vice President and Assistant Treasurer. Vice President of
the Distributor and Funds Distributor, Inc., and an officer of other
investment companies advised or administered by the Manager. From
September 1989 to July 1994, she was an Assistant Vice President and
Client Manager for The Boston Company, Inc. She is 33 years old.
MICHAEL S. PETRUCELLI, Vice President and Assistant Treasurer. Senior Vice
President of Funds Distributor, Inc., and an officer of other
investment companies advised or administered by the Manager. From
December 1989 through November 1996, he was employed by GE Investments
where he held various financial, business development and compliance
positions. He also served as Treasurer of the GE Funds and as Director
of GE Investment Services. He is 36 years old.
JOSEPH F. TOWER, III, Vice President and Assistant Treasurer. Senior Vice
President, Treasurer, Chief Financial Officer and a director of the
Distributor and Funds Distributor, Inc., and an officer of other
investment companies advised or administered by the Manager. From July
1988 to August 1994, he was employed by The Boston Company, Inc., where
he held various management positions in the Corporate Finance and
Treasury areas. He is 35 years old.
RICHARD W. INGRAM, Vice President and Assistant Treasurer. Executive Vice
President of the Distributor and Funds Distributor, Inc., and an
officer of other investment companies advised or administered by the
Manager. From March 1994 to November 1995, he was Vice President and
Division Manager for First Data Investor Services Group. From 1989 to
1994, he was Vice President, Assistant Treasurer and Tax Director -
Mutual Funds of The Boston Company, Inc. He is 41 years old.
The address of each officer of the Funds is 200 Park Avenue, New York,
New York 10166.
Each Fund's Board members and officers, as a group, owned less than 1%
of the Fund's shares outstanding on November 7, 1997.
Set forth in "Appendix E" to this Statement of Additional Information
are the shareholders known by each Fund (as indicated) to own of record 5%
or more of such Fund's Class A and Class B shares outstanding on November 7,
1997. A shareholder who beneficially owns, directly or indirectly, more
than 25% of the Fund's voting securities may be deemed a "control person"
(as defined in the 1940 Act) of the Fund.
MANAGEMENT AGREEMENTS
The following information supplements and should be read in conjunction
with the section of each Fund Prospectus entitled "Management of the Funds."
The Manager provides management services pursuant to separate
Management Agreements (respectively, the "Agreement") dated August 24, 1994
with each Fund. As to each Fund, the Agreement is subject to annual
approval by (i) the Fund's Board or (ii) vote of a majority (as defined in
the 1940 Act) of the Fund's outstanding voting securities, provided that in
either event the continuance also is approved by a majority of the Fund's
Board members who are not "interested persons" (as defined in the 1940 Act)
of the Fund or the Manager, by vote cast in person at a meeting called for
the purpose of voting on such approval. Each Fund's Agreement was approved
by shareholders on August 3, 1994 and was last approved by the Fund's Board,
including a majority of the Board members who are not "interested persons"
of any party to the Agreement, at a meeting held on September 17, 1997. As
to each Fund, the Agreement is terminable without penalty, on 60 days'
notice, by the Fund's Board or by vote of the holders of a majority of the
Fund's shares or, upon not less than 90 days' notice, by the Manager. Each
Agreement will terminate automatically, as to the relevant Fund, in the
event of its assignment (as defined in the 1940 Act).
The following persons are officers and/or directors of the Manager: W.
Keith Smith, Chairman of the Board; Christopher M. Condron, President, Chief
Executive Officer, Chief Operating Officer and a director; Stephen E.
Canter, Vice Chairman, Chief Investment Officer and a director; Lawrence S.
Kash, Vice Chairman-Distribution and a director; William T. Sandalls, Jr.,
Senior Vice President and Chief Financial Officer; Mark N. Jacobs, Vice
President, General Counsel and Secretary; Patrice M. Kozlowski, Vice
President-Corporate Communications; Mary Beth Leibig, Vice President-Human
Resources; Jeffrey N. Nachman, Vice President-Mutual Fund Accounting; Andrew
S. Wasser, Vice President-Information Systems; William V. Healey, Assistant
Secretary; and Mandell L. Berman, Burton C. Borgelt, Frank V. Cahouet and
Richard F. Syron, directors.
The Manager manages each Fund's portfolio of investments in accordance
with the stated policies of the Fund, subject to the approval of the Fund's
Board. The Manager is responsible for investment decisions and provides
each Fund with portfolio managers who are authorized by the Board to execute
purchases and sales of securities. The portfolio managers of the Government
Money Fund and the Money Fund are Bernard W. Kiernan, Patricia A. Larkin and
Thomas Riordan. The portfolio managers of the Municipal Funds are Joseph P.
Darcy, A. Paul Disdier, Douglas J. Gaylor, Karen M. Hand, Stephen C. Kris,
Richard J. Moynihan, W. Michael Petty, Jill C. Shaffro, Samuel J. Weinstock
and Monica S. Wieboldt. The Manager also maintains a research department
with a professional staff of portfolio managers and securities analysts who
provide research services for each Fund and for other funds advised by the
Manager.
The Manager maintains office facilities on behalf of each Fund, and
furnishes statistical and research data, clerical help, accounting, data
processing, bookkeeping and internal auditing and certain other required
services to the Funds. The Manager also may make such advertising and
promotional expenditures using its own resources, as it from time to time
deems appropriate.
All expenses incurred in the operation of a Fund are borne by such
Fund, except to the extent specifically assumed by the Manager. The
expenses borne by each Fund include: taxes, interest, brokerage fees and
commissions, if any, fees of Board members who are not officers, directors,
employees or holders of 5% or more of the outstanding voting securities of
the Manager, Securities and Exchange Commission fees, state Blue Sky
qualification fees, charges of custodians, transfer and dividend disbursing
agents' fees, certain insurance premiums, industry association fees, outside
auditing and legal expenses, costs of maintaining the Fund's existence,
investor services (including, without limitation, telephone and personnel
expenses), costs of shareholder reports and meetings, costs of preparing and
printing prospectuses and statements of additional information for
regulatory purposes and for distribution to existing shareholders, and any
extraordinary expenses. Each Fund bears certain expenses in accordance with
separate written plans and also bears certain costs associated with
implementing and operating such plans. See "Service Plan and Distribution
Plan" and "Shareholder Services Plans."
As compensation for the Manager's services under the Agreement, each
Fund has agreed to pay the Manager a monthly management fee at the annual
rate of .50 of 1% of the value of such Fund's average daily net assets. All
fees and expenses are accrued daily and deducted before declaration of
dividends to investors. Set forth below are the total amounts paid by each
Fund to the Manager for each Fund's last three fiscal years:
Fiscal Year Ended January 31,
1997 1996 1995
Government Money Fund $3,002,777 $2,622,700 $2,624,643
Money Fund $5,285,812 $3,172,667 $2,850,622
Fiscal Year Ended July 31,
1997 1996 1995
California Municipal Fund $1,836,034 $2,195,288 $2,105,653
Fiscal Year Ended November 30,
1996 1995 1994
National Municipal Fund $1,566,276 $1,447,734 $1,620,876
New York Municipal Fund $2,945,172 $2,936,785 $1,156,870
As to each Fund, the Manager has agreed that if in any fiscal year the
aggregate expenses of the Fund, exclusive of taxes, brokerage, interest and
(with the prior written consent of the necessary state securities
commissions) extraordinary expenses, but including the management fee,
exceed 1-1/2% of the average market value of the net assets of such Fund for
that fiscal year, the Fund may deduct from the payment to be made to the
Manager under the Agreement, or the Manager will bear, such excess expense.
Such deduction or payment, if any, will be estimated daily and reconciled
and effected or paid, as the case may be, on a monthly basis. As to each
Fund, no such deduction or payment was required for the most recent fiscal
year end.
As to each Fund, the aggregate of the fees payable to the Manager is
not subject to reduction as the value of the Fund's net assets increases.
PURCHASE OF SHARES
The following information supplements and should be read in conjunction
with the section of each Fund Prospectus entitled "How to Buy Shares."
The Distributor. The Distributor serves as each Fund's distributor on
a best efforts basis pursuant to an agreement which is renewable annually.
The Distributor also acts as distributor for the funds in the Dreyfus Family
of Funds and for certain other investment companies.
Using Federal Funds. Dreyfus Transfer, Inc., each Fund's transfer and
dividend disbursing agent (the "Transfer Agent"), or the Fund may attempt to
notify the investor upon receipt of checks drawn on banks that are not
members of the Federal Reserve System as to the possible delay in conversion
into Federal Funds and may attempt to arrange for a better means of
transmitting the money. If the investor is a customer of a securities
dealer ("Selected Dealer") and his order to purchase Fund shares is paid for
other than in Federal Funds, the Selected Dealer, acting on behalf of its
customer, will complete the conversion into, or itself advance, Federal
Funds, generally on the business day following receipt of the customer
order. The order is effective only when so converted and received by the
Transfer Agent. An order for the purchase of Fund shares placed by an
investor with sufficient Federal Funds or a cash balance in his brokerage
account with a Selected Dealer will become effective on the day that the
order, including Federal Funds, is received by the Transfer Agent.
TeleTransfer Privilege. (California Municipal Fund and New York
Municipal
Fund only) TeleTransfer purchase orders may be made at any time. Purchase
orders received by 4:00 p.m., New York time, on any business day that the
Transfer Agent and the New York Stock Exchange are open for business will be
credited to the shareholder's Fund account on the next bank business day
following such purchase order. Purchase orders made after 4:00 p.m., New
York time, on any business day the Transfer Agent and the New York Stock
Exchange are open for business, or orders made on Saturday, Sunday or any
Fund holiday (e.g., when the New York Stock Exchange is not open for
business), will be credited to the shareholder's Fund account on the second
bank business day following such purchase order. To qualify to use the
TeleTransfer Privilege, the initial payment for purchase of Fund shares must
be drawn on, and redemption proceeds paid to, the same bank and account as
are designated on the Account Application or Shareholder Services Form on
file. If the proceeds of a particular redemption are to be wired to an
account at any other bank, the request must be in writing and signature-
guaranteed. See "Redemption of Shares--TeleTransfer Privilege."
Reopening an Account. An investor may reopen an account with a minimum
investment of $100 without filing a new Account Application during the
calendar year the account is closed or during the following calendar year,
provided the information on the old Account Application is still applicable.
SERVICE PLAN AND DISTRIBUTION PLAN
The following information supplements and should be read in conjunction
with the section of each Fund Prospectus relating to Class A shares entitled
"Service Plan" and in conjunction with the section of each Fund Prospectus
relating to Class B shares entitled "Distribution Plan."
Rule 12b-1 (the "Rule") adopted by the Securities and Exchange
Commission under the 1940 Act provides, among other things, that an
investment company may bear expenses of distributing its shares only
pursuant to a plan adopted in accordance with the Rule. The Board of each
of the Government Money Fund and the Money Fund has adopted separate plans
with respect to Class A and Class B of such Funds and the Board of each of
the Municipal Funds has adopted a plan with respect to Class B of such Funds
(each, a "Plan"). Under each Plan, the respective Fund bears directly the
costs of preparing, printing and distributing prospectuses and statements of
additional information and of implementing and operating the Plan. Under
each Plan adopted with respect to Class A of the Government Money Fund and
Money Fund (the "Service Plan"), the Fund reimburses (a) the Distributor for
payments made for distributing Class A shares and servicing shareholder
accounts ("Servicing") and (b) the Manager, Dreyfus Service Corporation and
any affiliate of either of them (collectively, "Dreyfus") for payments made
for Servicing. Under each Service Plan, each of the Distributor and Dreyfus
may pay one or more financial institutions, Selected Dealers or other
industry professionals (collectively, "Service Agents") a fee in respect of
Class A shares of the Fund owned by shareholders with whom the Service Agent
has a Servicing relationship or for whom the Service Agent is the dealer or
holder of record. Under each Fund's Plan adopted with respect to Class B
(the "Distribution Plan"), the Fund reimburses the Distributor for payments
made to third parties for distributing (within the meaning of the Rule)
Class B shares. Each Fund's Board believes that there is a reasonable
likelihood that each Plan will benefit the Fund and holders of the relevant
Class of shares.
A quarterly report of the amounts expended under each Plan, and the
purposes for which such expenditures were incurred, must be made to the
Fund's Board for its review. In addition, each Plan provides that it may
not be amended to increase materially the costs which the Fund may bear for
distribution pursuant to the Plan without shareholder approval of the
affected Class and that other material amendments of the Plan must be
approved by the Board, and by the Fund's Board members who are not
"interested persons" (as defined in the 1940 Act) of the Fund or the Manager
and have no direct or indirect financial interest in the operation of the
Plan or in any related agreements entered into in connection with such Plan,
by vote cast in person at a meeting called for the purpose of considering
such amendments. Each Plan is subject to annual approval by such vote of
the Board members cast in person at a meeting called for the purpose of
voting on the Plan. Each Plan was last so approved on September 17, 1997.
Each Plan is terminable at any time by vote of a majority of the Fund's
Board members who are not "interested persons" and have no direct or
indirect financial interest in the operation of the Plan or in any of the
related agreements or by vote of a majority of the relevant Class of shares.
Set forth below are the total amounts paid by each of the Government
Money Fund and the Money Fund pursuant to its Service Plan with respect to
Class A (i) to the Distributor ("Distributor Payments") as reimbursement for
distributing Class A shares and Servicing, (ii) to Dreyfus for payments made
for Servicing ("Dreyfus Payments"), and (iii) for costs of preparing,
printing and distributing prospectuses and statement of additional
information and of implementing and operating the Service Plan ("Printing
and Implementation") for the Fund's most recent fiscal year ended January
31, 1997.
Total Amount
Paid Pursuant Distributor Printing and
Name of Fund to Service Plan Payments Dreyfus Payments Implementation
Government
Money Fund
- Class A $1,937,170 $ 881,905 $1,047,607 $ 7,658
Money Fund
- Class A $2,627,518 $1,160,113 $1,454,173 $ 13,232
Set forth below are the total amounts paid by each Fund to the
Distributor pursuant to its Distribution Plan with respect to Class B for
the Fund's most recent fiscal year:
Total Amount
Paid Pursuant to
Name of Fund Distribution Plan
Fiscal Year Ended
January 31, 1997
Government
Money Fund
- Class B $ 153,504
Money Fund
- Class B $ 660,152
Fiscal Year Ended
July 31, 1997
California
Municipal Fund
- - Class B $ 7,812
Fiscal Year Ended
November 30, 1996
National
Municipal Fund $ 29,002
- - Class B
New York
Municipal Fund
- - Class B $ 50,576
SHAREHOLDER SERVICES PLANS
The following information supplements and should be read in conjunction
with the section of each Fund Prospectus entitled "Shareholder Services
Plan."
Each Fund has adopted a Shareholder Services Plan with respect to Class
A pursuant to which the Fund reimburses Dreyfus Service Corporation for
certain allocated expenses of providing personal services and/or maintaining
shareholder accounts. Each Fund also has adopted a Shareholder Services
Plan with respect to Class B pursuant to which the Fund pays the Distributor
for the provision of certain services to the holders of Class B shares.
Under each Shareholder Services Plan, the services provided may include
personal services relating to shareholder accounts, such as answering
shareholder inquiries regarding the Fund and providing reports and other
information, and services related to the maintenance of shareholder
accounts. As to each Fund, under the Shareholders Services Plan for Class
B, the Distributor may make payments to Service Agents in respect of their
services.
A quarterly report of the amounts expended under each Shareholder
Services Plan, and the purposes for which such expenditures were incurred,
must be made to the Fund's Board for its review. In addition, each
Shareholder Services Plan provides that material amendments to the
Shareholder Services Plan must be approved by the Fund's Board, and by the
Board members who are not "interested persons" (as defined in the 1940 Act)
of the Fund and have no direct or indirect financial interest in the
operation of the Shareholder Services Plan, by vote cast in person at a
meeting called for the purpose of considering such amendments. Each
Shareholder Services Plan is subject to annual approval by such vote of its
Board members cast in person at a meeting called for the purpose of voting
on the Shareholder Services Plan. Each Shareholder Services Plan was last
so approved on September 17, 1997. Each Shareholder Services Plan is
terminable at any time by vote of a majority of the Board members who are
not "interested persons" and have no direct or indirect financial interest
in the operation of the Shareholder Services Plan.
Set forth below are the total amounts payable by each Fund pursuant to
its separate Shareholder Services Plans for Class A and Class B, the amounts
reimbursed to the Fund by the Manager pursuant to undertakings in effect, if
any, and the net amount paid by the Fund for the Fund's most recent fiscal
year:
Total Amount
Payable Pursuant to Amount Reimbursed
Name of Fund Shareholder Services Pursuant to Net Amount Paid by
and Class Plan Undertaking Fund
Fiscal Year Ended Fiscal Year Ended Fiscal Year Ended
January 31, 1997 January 31, 1997 January 31, 1997
Government
Money Fund
- - Class A $ 215,006 $ - $215,006
- - Class B $ 191,880 $ 62,817 $129,061
Fiscal Year Ended Fiscal Year Ended Fiscal Year Ended
January 31, 1997 January 31, 1997 January 31, 1997
Money Fund
- - Class A $ 363,543 $ - $ 363,543
- - Class B $ 825,189 $ 243,136 $ 582,053
Fiscal YearEnded Fiscal Year Ended Fiscal Year Ended
July 31, 1997 July 31, 1997 July 31, 1997
California
Municipal
Fund
- - Class A $ 217,509 $ - $ 217,509
- - Class B $ 11,719 $ 2,734 $ 8,985
Fiscal Year Ended Fiscal Year Ended Fiscal Year Ended
November 30, 1996 November 30, 1996 November 30, 1996
National
Municipal
Fund
- - Class A $ 82,464 $ - $ 82,464
- - Class B $ 43,503 $ 41,481 $ 2,022
Fiscal Year Ended Fiscal Year Ended Fiscal Year Ended
November 30, 1996 November 30, 1996 November 30, 1996
New York
Municipal
Fund
-Class A $ 476,762 $ - $ 476,762
-Class B $ 75,863 $ 40,347 $ 35,516
REDEMPTION OF SHARES
The following information supplements and should be read in conjunction
with the section of each Fund Prospectus entitled "How to Redeem Shares."
Check Redemption Privilege. Each Fund provides Redemption Checks
("Checks") automatically upon opening an account, unless the investor
specifically refuses the Check Redemption Privilege by checking the
applicable "No" box on the Account Application. The Check Redemption
Privilege may be established for an existing account by a separate signed
Shareholder Services Form. Checks will be sent only to the registered
owner(s) of the account and only to the address of record. The Account
Application or Shareholder Services Form must be manually signed by the
registered owner(s). Checks are drawn on the investor's Fund account and
may be made payable to the order of any person in an amount of $500 or more.
When a Check is presented to the Transfer Agent for payment, the Transfer
Agent, as the investor's agent, will cause the Fund to redeem a sufficient
number of full or fractional shares in the investor's account to cover the
amount of the Check. Dividends are earned until the Check clears. After
clearance, a copy of the Check will be returned to the investor. Investors
generally will be subject to the same rules and regulations that apply to
checking accounts, although the election of this Privilege creates only a
shareholder-transfer agent relationship with the Transfer Agent.
If the amount of the Check is greater than the value of the shares in
an investor's account, the Check will be returned marked insufficient funds.
Checks should not be used to close an account.
Wire Redemption Privilege. By using this Privilege, the investor
authorizes the Transfer Agent to act on wire, telephone or letter redemption
instructions from any person representing himself or herself to be the
investor, or a representative of the investor's Service Agent, and
reasonably believed by the Transfer Agent to be genuine. Ordinarily, each
Fund will initiate payment for shares redeemed pursuant to this Privilege on
the same business day if the Transfer Agent receives the redemption request
in proper form prior to 5:00 p.m., New York time, on such day; otherwise the
Fund will initiate payment on the next business day. Redemption proceeds
($1,000 minimum) will be transferred by Federal Reserve wire only to the
commercial bank account specified by the investor on the Account Application
or the Shareholder Services Form, or to a correspondent bank if the
investor's bank is not a member of the Federal Reserve System. Fees
ordinarily are imposed by such bank and borne by the investor. Immediate
notification by the correspondent bank to the investor's bank is necessary
to avoid a delay in crediting the funds to the investor's bank account.
Investors with access to telegraphic equipment may wire redemption
requests to the Transfer Agent by employing the following transmittal code
which may be used for domestic or overseas transmissions:
Transfer Agent's
Transmittal Code Answer Back Sign
144295 144295 TSSG PREP
Investors who do not have direct access to telegraphic equipment may
have the wire transmitted by contacting a TRT Cables operator at
1-800-654-7171, toll free. Investors also should advise the operator that
the above transmittal code must be used and also inform the operator of the
Transfer Agent's answer back sign.
To change the commercial bank or account designated to receive
redemption proceeds, a written request must be sent to the Transfer Agent.
This request must be signed by each shareholder, with each signature
guaranteed as described below under "Stock Certificates; Signatures."
TeleTransfer Privilege. (California Municipal Fund and New York
Municipal
Fund only) Investors should be aware that if they have selected the
TeleTransfer privilege, any request for a wire redemption will be effected
as a TeleTransfer transaction through the Automated Clearing House (ACH)
system unless more prompt transmittal specifically is requested. Redemption
proceeds will be on deposit in the investor's account at an ACH member bank
ordinarily two business days after receipt of the redemption request. See
"Purchase of Shares -- TeleTransfer Privilege."
Stock Certificates; Signatures. Any certificates representing Fund
shares to be redeemed must be submitted with the redemption request.
Written redemption requests must be signed by each shareholder, including
each holder of a joint account, and each signature must be guaranteed.
Signatures on endorsed certificates submitted for redemption also must be
guaranteed. The Transfer Agent has adopted standards and procedures
pursuant to which signature-guarantees in proper form generally will be
accepted from domestic banks, brokers, dealers, credit unions, national
securities exchanges, registered securities associations, clearing agencies
and savings associations, as well as from participants in the New York Stock
Exchange Medallion Signature Program, the Securities Transfer Agents
Medallion Program ("STAMP"), and the Stock Exchanges Medallion Program.
Guarantees must be signed by an authorized signatory of the guarantor and
"Signature-Guaranteed" must appear with the signature. The Transfer Agent
may request additional documentation from corporations, executors,
administrators, trustees or guardians, and may accept other suitable
verification arrangements from foreign investors, such as consular
verification. For more information with respect to signature-guarantees,
please call one of the telephone numbers listed on the cover.
Redemption Commitment. Each Fund has committed itself to pay in cash
all redemption requests by any shareholder of record, limited in amount
during any 90-day period to the lesser of $250,000 or 1% of the value of the
Fund's net assets at the beginning of such period. Such commitment is
irrevocable without the prior approval of the Securities and Exchange
Commission. In the case of requests for redemption in excess of such
amount, each Fund's Board reserves the right to make payments in whole or in
part in securities or other assets of the Fund in case of an emergency or
any time a cash distribution would impair the liquidity of the Fund to the
detriment of the existing shareholders. In such event, the securities would
be valued in the same manner as the Fund's portfolio is valued. If the
recipient sold such securities, brokerage charges might be incurred.
Suspension of Redemptions. The right of redemption may be suspended or
the date of payment postponed (a) during any period when the New York Stock
Exchange is closed (other than customary weekend and holiday closings), (b)
when trading in the markets a Fund ordinarily utilizes is restricted, or
when an emergency exists as determined by the Securities and Exchange
Commission so that disposal of a Fund's investments or determination of its
net asset value is not reasonably practicable, or (c) for such other periods
as the Securities and Exchange Commission by order may permit to protect a
Fund's shareholders.
SHAREHOLDER SERVICES
The following information supplements and should be read in conjunction
with the section of each Fund Prospectus entitled "Shareholder Services."
Fund Exchanges. Shares of other funds purchased by exchange will be
purchased on the basis of relative net asset value per share as follows:
A. Exchanges for shares of funds that are offered without a
sales load will be made without a sales load.
B. Shares of funds purchased without a sales load may be exchanged for
shares of other funds sold with a sales load, and
the applicable sales load will be deducted.
C. Shares of funds purchased with a sales load may be exchanged for
shares of other funds sold without a sales load.
D. Shares of funds purchased with a sales load, shares of funds
acquired by a previous exchange from shares purchased with a sales
load, and additional shares acquired through reinvestment of
dividends or distributions of any such funds (collectively
referred to herein as "Purchased Shares") may be exchanged for
shares of other funds sold with a sales load (referred to herein
as "Offered Shares"), provided that, if the sales load applicable
to the Offered Shares exceeds the maximum sales load that could
have been imposed in connection with the Purchased Shares (at the
time the Purchased Shares were acquired), without giving effect to
any reduced loads, the difference will be deducted.
To accomplish an exchange under item D above, shareholders must notify
the Transfer Agent of their prior ownership of fund shares and their account
number.
To request an exchange, an investor, or an investor's Service Agent
acting on the investor's behalf, must give exchange instructions to the
Transfer Agent in writing or by telephone. The ability to issue exchange
instructions by telephone is given to all Fund shareholders automatically,
unless the investor checks the applicable "No" box on the Account
Application, indicating that the investor specifically refuses this
Privilege. By using the Telephone Exchange Privilege, the investor
authorizes the Transfer Agent to act on telephonic instructions (including
over The Dreyfus Touch automated telephone system) from any person
representing himself or herself to be the investor or a representative of
the investor's Service Agent, and reasonably believed by the Transfer Agent
to be genuine. Telephone exchanges may be subject to limitations as to the
amount involved or the number of telephone exchanges permitted. Shares
issued in certificate form are not eligible for telephone exchanges.
To establish a personal retirement plan by exchange, shares of the fund
being exchanged must have a value of at least the minimum initial investment
required for the fund into which the exchange is being made. The minimum
initial investment is $750 for Dreyfus-sponsored Keogh Plans, IRAs
(including regular IRAs, spousal IRAs for a non-working spouse, Roth IRAs,
IRAs set up under a Simplified Employee Pension Plan ("SEP-IRAs"), and
rollover IRAs) and 403(b)(7) Plans with only one participant, and $500 for
Dreyfus-sponsored education IRAs. To exchange shares held in corporate
plans, 403(b)(7) Plans and SEP-IRAs with more than one participant, the
minimum initial investment is $100 if the plan has at least $2,500 invested
among the funds in the Dreyfus Family of Funds. To exchange shares held in
personal retirement plans, the shares exchanged must have a current value of
at least $100.
Auto-Exchange Privilege. The Auto-Exchange Privilege permits an
investor to purchase, in exchange for shares of a Fund, shares of certain
other funds in the Dreyfus Family of Funds. This Privilege is available
only for existing accounts. Shares will be exchanged on the basis of
relative net asset value as described above under "Fund Exchanges."
Enrollment in or modification or cancellation of this Privilege is effective
three business days following notification by the investor. An investor
will be notified if his account falls below the amount designated to be
exchanged under this Privilege. In this case, an investor's account will
fall to zero unless additional investments are made in excess of the
designated amount prior to the next Auto-Exchange transaction. Shares held
under IRA and other retirement plans are eligible for this Privilege.
Exchanges of IRA shares may be made between IRA accounts and from regular
accounts to IRA accounts, but not from IRA accounts to regular accounts.
With respect to all other retirement accounts, exchanges may be made only
among those accounts.
Fund Exchanges and the Auto-Exchange Privilege are available to
shareholders resident in any state in which shares of the fund being
acquired legally may be sold. Shares may be exchanged only between accounts
having identical names and other identifying designations.
Shareholder Services Forms and prospectuses of the other funds may be
obtained by calling 1-800-645-6561. Each Fund reserves the right to reject
any exchange request in whole or in part. The Fund Exchanges service or the
Auto-Exchange Privilege may be modified or terminated at any time upon
notice to shareholders.
Automatic Withdrawal Plan. The Automatic Withdrawal Plan permits an
investor with a $5,000 minimum account to request withdrawal of a specified
dollar amount (minimum of $50) on either a monthly or quarterly basis.
Withdrawal payments are the proceeds from sales of Fund shares, not the
yield on the shares. If withdrawal payments exceed reinvested dividends and
distributions, the investor's shares will be reduced and eventually may be
depleted. Automatic Withdrawal may be terminated at any time by the
investor, the Fund or the Transfer Agent. Shares for which certificates
have been issued may not be redeemed through the Automatic Withdrawal Plan.
Dividend Sweep. Dividend Sweep allows investors to invest
automatically their dividends or dividends and capital gain distributions,
if any, paid by a Fund in shares of another fund in the Dreyfus Family of
Funds of which the investor is a shareholder. Shares of other funds
purchased pursuant to this privilege will be purchased on the basis of
relative net asset value per share as follows:
A. Dividends and distributions paid by a fund may be
invested without imposition of a sales load in shares of
other funds that are offered without a sales load.
B. Dividends and distributions paid by a fund which
does not charge a sales load may be invested in shares
of other funds sold with a sales load, and the
applicable sales load will be deducted.
C. Dividends and distributions paid by a fund which
charges a sales load may be invested in shares of other
funds sold with a sales load (referred to herein as
"Offered Shares"), provided that, if the sales load
applicable to the Offered Shares exceeds the maximum
sales load charged by the fund from which dividends or
distributions are being swept, without giving effect to
any reduced loads, the difference will be deducted.
D. Dividends and distributions paid by a fund may be
invested in shares of other funds that impose a
contingent deferred sales charge ("CDSC") and the
applicable CDSC, if any, will be imposed upon redemption
of such shares.
Corporate Pension/Profit-Sharing and Personal Retirement Plans.
(Government Money Fund and Money Fund) Each of the Government Money Fund and
the Money Fund makes available to corporations a variety of prototype
pension and profit-sharing plans, including Keogh Plans, IRAs (including
regular IRAs, spousal IRAs for a non-working spouse, Roth IRAs, SEP-IRAs,
rollover IRAs and Education IRAs), 401(k) Salary Reduction Plans and
403(b)(7) Plans. Plan support services also are available. Investors can
obtain details on the various plans by calling the following numbers toll
free: for Keogh Plans, please call 1-800-358-5566; for IRAs and IRA
"Rollover Accounts," please call 1-800-645-6561; or for SEP-IRAs, 401(k)
Salary Reduction Plan, and 403(b)(7) Plans, please call 1-800-322-7880.
Investors who wish to purchase Fund shares in conjunction with a Keogh
Plan, a 403(b)(7) Plan or an IRA, including a SEP-IRA, may request from the
Distributor forms for adoption of such plans.
The entity acting as custodian for Keogh Plans, 403(b)(7) Plans or IRAs
may charge a fee, payment of which could require the liquidation of shares.
All fees charged are described in the appropriate form.
Shares may be purchased in connection with these plans only by direct
remittance to the entity which acts as custodian. Such purchases will be
effective when payments received by the Transfer Agent are converted into
Federal Funds. Purchases for these plans may not be made in advance of
receipt of funds.
The minimum initial investment for corporate plans, salary reduction
plans, 403(b)(7) Plans and SEP-IRAs, with more than one participant, is
$2,500, with no minimum on subsequent purchases. The minimum initial
investment for Dreyfus-sponsored Keogh Plans, IRAs, SEP-IRAs and 403(b)(7)
Plans, with only one participant, is normally $750, with no minimum on
subsequent purchases. Individuals who open an IRA also may open a
non-working spousal IRA with a minimum investment of $250.
The investor should read the prototype retirement plans and the
applicable form of custodial agreement for further details as to
eligibility, service fees and tax implications, and should consult a tax
adviser.
DETERMINATION OF NET ASSET VALUE
The following information supplements and should be read in conjunction
with the section of each Fund Prospectus entitled "How to Buy Shares."
Amortized Cost Pricing. The valuation of each Fund's portfolio
securities is based upon their amortized cost, which does not take into
account unrealized capital gains or losses. This involves valuing an
instrument at its cost and thereafter assuming a constant amortization to
maturity of any discount or premium, regardless of the impact of fluctuating
interest rates on the market value of the instrument. While this method
provides certainty in valuation, it may result in periods during which
value, as determined by amortized cost, is higher or lower than the price
the Fund would receive if it sold the instrument.
Each Fund's Board has established, as a particular responsibility
within the overall duty of care owed to the Fund's shareholders, procedures
reasonably designed to stabilize the Fund's price per share as computed for
the purpose of purchases and redemptions at $1.00. Such procedures include
review of the Fund's portfolio holdings by the Board, at such intervals as
it may deem appropriate, to determine whether the Fund's net asset value
calculated by using available market quotations or market equivalents
deviates from $1.00 per share based on amortized cost. In such review,
investments for which market quotations are readily available will be valued
at the most recent bid price or yield equivalent for such securities or for
securities of comparable maturity, quality and type, as obtained from one or
more of the major market makers for the securities to be valued. Other
investments and assets, to the extent a Fund is permitted to invest in such
instruments, will be valued at fair value as determined in good faith by the
Board. With respect to the Municipal Funds, market quotations and market
equivalents used in the Board's review are obtained from an independent
pricing service (the "Service") approved by the Board. The Service values
these Funds' investments based on methods which include considerations of:
yields or prices of municipal obligations of comparable quality, coupon,
maturity and type; indications of values from dealers; and general market
conditions. The Service also may employ electronic data processing
techniques and/or a matrix system to determine valuations.
The extent of any deviation between a Fund's net asset value based upon
available market quotations or market equivalents and $1.00 per share based
on amortized cost will be examined by the Fund's Board. If such deviation
exceeds 1/2 of 1%, the Board promptly will consider what action, if any,
will be initiated. In the event a Fund's Board determines that a deviation
exists which may result in material dilution or other unfair results to
investors or existing shareholders, it has agreed to take such corrective
action as it regards as necessary and appropriate, including: selling
portfolio instruments prior to maturity to realize capital gains or losses
or to shorten average portfolio maturity; withholding dividends or paying
distributions from capital or capital gains; redeeming shares in kind; or
establishing a net asset value per share by using available market
quotations or market equivalents.
New York Stock Exchange and Transfer Agent Closings. The holidays (as
observed) on which both the New York Stock Exchange and the Transfer Agent
are closed currently are: New Year's Day, Martin Luther King, Jr. Day,
Presidents' Day, Memorial Day, Independence Day, Labor Day, Thanksgiving and
Christmas.
DIVIDENDS, DISTRIBUTIONS AND TAXES
The following information supplements and should be read in conjunction
with the section of each Fund Prospectus entitled "Dividends, Distributions
and Taxes."
Management believes that each Fund has qualified as a "regulated
investment company" under the Internal Revenue Code of 1986, as amended (the
"Code"), for it most recent fiscal year and each Fund intends to continue to
so qualify, if such qualification is in the best interests of its
shareholders. The term "regulated investment company" does not imply the
supervision of management or investment practices or policies by any
government agency.
Ordinarily, gains and losses realized from portfolio transactions will
be treated as capital gain or loss. However, all or a portion of any gain
realized from the sale or other disposition of certain market discount bonds
will be treated as ordinary income under Section 1276 of the Code.
With respect to the California Municipal Fund, if, at the close of each
quarter of its taxable year, at least 50% of the value of the Fund's total
assets consists of Federal tax exempt obligations, then the Fund may
designate and pay Federal exempt-interest dividends from interest earned on
all such tax exempt obligations. Such exempt-interest dividends may be
excluded by shareholders of the Fund from their gross income for Federal
income tax purposes. Dividends derived from Taxable Investments, together
with distributions from any net realized short-term securities gains,
generally are taxable as ordinary income for Federal income tax purposes
whether or not reinvested. Distributions from net realized long-term
securities gains generally are taxable as long-term capital gains to a
shareholder who is a citizen or resident of the United States, whether or
not reinvested and regardless of the length of time the shareholder has held
his shares.
With respect to the California Municipal Fund, if, at the close of each
quarter of its taxable year, at least 50% of the value of the Fund's total
assets consists of obligations which, when held by an individual, the
interest therefrom is exempt from California personal income tax, and if the
Fund qualifies as a management company under the California Revenue and
Taxation Code, then the Fund will be qualified to pay dividends to its
shareholders that are exempt from California personal income tax (but not
from California franchise tax) ("California exempt-interest dividends").
However, the total amount of California exempt-interest dividends paid by
the Fund to a non-corporate shareholder with respect to any taxable year
cannot exceed such shareholder's pro rata share of interest received by the
Fund during such year that is exempt from California taxation less any
expenses and expenditures deemed to have been paid from such interest.
For shareholders subject to the California personal income tax, exempt-
interest dividends derived from California Municipal Obligations will not be
subject to the California personal income tax. Distributions from net
realized short-term capital gains to California resident shareholders will
be subject to the California personal income tax distributed by the Fund as
ordinary income. Distributions from net realized long-term capital gains
may constitute long-term capital gains for individual California resident
shareholders. Unlike under Federal tax law, the California Municipal Fund's
shareholders will not be subject to California personal income tax, or
receive a credit for California taxes paid by the Fund, on undistributed
capital gains. In addition, California tax law does not consider any
portion of the exempt-interest dividends paid an item of tax preference for
the purpose of computing the California alternative minimum tax.
YIELD INFORMATION
The following information supplements and should be read in conjunction
with the section of each Fund Prospectus entitled "Yield Information."
For the seven-day period ended July 31, 1997, the yield and effective
yield for Class A and Class B shares of each Fund were as follows:
Name of Fund and Class Yield Effective Yield
Government Money Fund
Class A 4.83% 4.95%
Class B 4.68% / 4.61%* 4.79% / 4.72%*
Money Fund
Class A 4.97% 5.09%
Class B 4.83% / 4.79%* 4.95% / 4.90%*
California Municipal Fund
Class A 2.94% 2.98%
Class B 2.59% / 2.52%* 2.62% / 2.55%*
National Municipal Fund
Class A 3.20% 3.25%
Class B 2.86% / 2.76%* 2.90% / 2.80%*
New York Municipal Fund
Class A 3.08% 3.13%
Class B 2.70% / 2.60%* 2.74% / 2.63%*
________________
* Net of absorbed expenses.
Yield is computed in accordance with a standardized method which involves
determining the net change in the value of a hypothetical pre-existing Fund
account having a balance of one share at the beginning of a seven calendar
day period for which yield is to be quoted, dividing the net change by the
value of the account at the beginning of the period to obtain the base
period return, and annualizing the results (i.e., multiplying the base
period return by 365/7). The net change in the value of the account
reflects the value of additional shares purchased with dividends declared on
the original share and any such additional shares and fees that may be
charged to shareholder accounts, in proportion to the length of the base
period and the Fund's average account size, but does not include realized
gains and losses or unrealized appreciation and depreciation. Effective
yield is computed by adding 1 to the base period return (calculated as
described above), raising that sum to a power equal to 365 divided by 7, and
subtracting 1 from the result. Both yield figures take into account any
applicable distribution and service fees. As a result, at any given time,
the performance of Class B shares should be expected to be lower than that
of Class A shares.
As to the Municipal Funds, tax equivalent yield is computed by dividing
that portion of the yield or effective yield (calculated as described above)
which is tax exempt by 1 minus a stated tax rate and adding the quotient to
that portion, if any, of the yield of the Fund that is not tax exempt.
Based upon a 1997 Federal and State of California income tax rate of 45.22%,
the tax equivalent yield for the 7-day period ended July 31, 1997 for Class
A and Class B shares of the California Municipal Fund was as follows:
Name of Fund and Class Tax Equivalent Yield
California Municipal Fund
Class A 5.37%
Class B 4.73% / 4.60%*
Based upon a 1997 Federal tax rate of 39.60%, the tax equivalent yield
for the seven-day period ended July 31, 1997 for the Class A and Class B
shares of National Municipal Fund was as follows:
Name of Fund and Class Tax Equivalent Yield
National Municipal Fund
Class A 5.30%
Class B 4.74% / 4.57%*
Based upon a combined 1997 Federal, New York State and New York City
personal income tax rate of 46.43%, the tax equivalent yield for the seven-
day period ended July 31, 1997 for Class A and Class B shares of the New
York Municipal Fund was as follows:
Name of Fund and Class Tax Equivalent Yield
New York Municipal Fund
Class A 5.75%
Class B 5.04% / 4.85%*
______________
* Net of absorbed expenses.
The tax equivalent yields noted above for the National Municipal Fund
represent the application of the highest Federal marginal personal income
tax rate currently in effect. The taxes equivalent figures, however, do not
include the potential effect of any state or local (including, but not
limited to, county, district or city) taxes, including applicable
surcharges. The tax equivalent yield noted above for the California
Municipal Fund represents the application of the highest Federal and State
of California marginal personal income tax rates presently in effect. The
tax equivalent yields noted above for the New York Municipal Fund represent
the application of the highest Federal, New York State, and New York City
marginal personal income tax rates presently in effect. For Federal
personal income tax purposes a 39.60% tax rate has been used, for California
Sate income tax purposes the rate of 9.30% has been used, and for New York
State and New York City personal income tax purposes, the rates of 6.85% and
4.46%, respectively, have been used. In addition, there may be pending
legislation which could affect such stated tax rates or yields. Each
investor should consult its tax adviser, and consider its own factual
circumstances and applicable tax laws, in order to ascertain the relevant
tax equivalent yield.
Yields will fluctuate and are not necessarily representative of future
results. The investor should remember that yield is a function of the type
and quality of the instruments in the portfolio, portfolio maturity and
operating expenses. An investor's principal in a Fund is not guaranteed.
See "Determination of Net Asset Value" for a discussion of the manner in
which a Fund's price per share is determined.
From time to time, each Municipal Fund may use hypothetical tax
equivalent yields or charts in its advertising. These hypothetical yields
or charts will be used for illustrative purposes only and not as being
representative of the Fund's past or future performance.
From time to time, advertising materials for a Fund may refer to or
discuss then-current or past economic conditions, developments and/or
events, or actual or proposed tax legislation. From time to time,
advertising materials for a Fund may also refer to statistical or other
information concerning trends relating to investment companies, as compiled
by industry associations such as the Investment Company Institute.
PORTFOLIO TRANSACTIONS
Portfolio securities ordinarily are purchased directly from the issuer
or from an underwriter or a market maker for the securities. Usually no
brokerage commissions, as such, are paid by a Fund for such purchases.
Purchases from underwriters of portfolio securities include a concession
paid by the issuer to the underwriter and the purchase price paid to, and
sales price received from, market makers for the securities may include the
spread between the bid and asked price. No brokerage commissions have been
paid by any Fund to date.
Transactions are allocated to various dealers by the portfolio managers
of a Fund in their best judgment. The primary consideration is prompt and
effective execution of orders at the most favorable price. Subject to that
primary consideration, dealers may be selected for research, statistical or
other services to enable the Manager to supplement its own research and
analysis with the views and information of other securities firms and may be
selected based upon their sales of Fund shares.
Research services furnished by brokers through which a Fund effects
securities transactions may be used by the Manager in advising other funds
it advises and, conversely, research services furnished to the Manager by
brokers in connection with other funds the Manager advises may be used by
the Manager in advising the Fund. Although it is not possible to place a
dollar value on these services, it is the opinion of the Manager that the
receipt and study of such services should not reduce the overall expenses of
its research department.
INFORMATION ABOUT THE FUNDS
The following information supplements and should be read in conjunction
with the section of each Fund Prospectus entitled "General Information."
Each Fund share has one vote and, when issued and paid for in
accordance with the terms of the offering, is fully paid and non-assessable.
Fund shares have equal rights as to dividends and in liquidation. Shares
have no preemptive, subscription or conversion rights and are freely
transferable.
Each Fund sends annual and semi-annual financial statements to all its
share-
holders.
TRANSFER AND DIVIDEND DISBURSING AGENT, CUSTODIAN,
COUNSEL AND INDEPENDENT AUDITORS
Dreyfus Transfer, Inc., a wholly-owned subsidiary of the Manager, P.O.
Box 9671, Providence, Rhode Island 02940-9671, is each Fund's transfer and
dividend disbursing agent. Under a separate Transfer Agency Agreement with
each Fund, the Transfer Agent arranges for the maintenance of shareholder
account records for the Fund, the handling of certain communications between
shareholders and the Fund and the payment of dividends and distributions
payable by the Fund. For these services, the Transfer Agent receives a
monthly fee from each Fund computed on the basis of the number of
shareholder accounts it maintains for such Fund during the month, and is
reimbursed for certain out-of-pocket expenses. The fee paid the Transfer
Agent by each Fund for the Fund's most recent fiscal year was as follows:
Government Money Fund $ 58,897
Money Fund $213,208
California Municipal Fund $114,834
National Municipal Fund $ 64,987
New York Municipal Fund $172,569
The Bank of New York, 90 Washington Street, New York, New York 10286,
is each Fund's custodian.
Stroock & Stroock & Lavan LLP, 180 Maiden Lane, New York, New York
10038-4982, as counsel for each Fund, has rendered its opinion as to certain
legal matters regarding the due authorization and valid issuance of the
shares being sold pursuant to the each Fund Prospectus.
Ernst & Young LLP, 787 Seventh Avenue, New York, New York 10019,
independent auditors, have been selected as auditors of each Fund.
FINANCIAL STATEMENTS AND REPORTS OF INDEPENDENT AUDITOR
The Annual and Semi-Annual Reports to Shareholders of the Funds are
separate documents and the financial statements, accompanying notes and,
with respect to the Annual Reports, reports of independent auditors
appearing therein are incorporated by reference into this Statement of
Additional Information. When requesting a copy of this Statement of
Additional Information, you will receive the annual report(s) for the
Fund(s) in which you are a shareholder.
NAME OF FUND ANNUAL & SEMI-ANNUAL REPORTS
General Government Securities January 31, 1997 - Annual
Money Market Fund, Inc. July 31, 1997 - Semi-Annual
General Money Market Fund, Inc. January 31, 1997 -Annual
July 31, 1997 - Semi-Annual
General California Municipal July 31, 1997 - Annual
Money Market Fund
General Municipal Money Market November 30, 1996 - Annual
Fund, Inc. May 31, 1997 - Semi-Annual
General New York Municipal November 30, 1996 - Annual
Money Market Fund May 31, 1997 - Semi-Annual
APPENDIX A
(MONEY FUND ONLY)
Description of the two highest commercial paper, bond and other short-
and long-term rating categories assigned by Standard & Poor's Ratings Group
("S&P"), Moody's Investors Service, Inc. ("Moody's"), Fitch Investors
Service, L.P. ("Fitch"), Duff & Phelps Credit Rating Co. ("Duff"), IBCA
Limited and IBCA Inc. ("IBCA") and Thomson BankWatch, Inc. ("BankWatch"):
Commercial Paper and Short-Term Ratings
The designation A-1 by S&P indicates that the degree of safety
regarding timely payment is either overwhelming or very strong. Those
issues determined to possess overwhelming safety characteristics are denoted
with a plus sign (+) designation. Capacity for timely payment on issues
with an A-2 designation is strong. However, the relative degree of safety
is not as high as for issues designated A-1.
The rating Prime-1 (P-1) is the highest commercial paper rating
assigned by Moody's. Issuers of P-1 paper must have a superior capacity for
repayment of short-term promissory obligations and ordinarily will be
evidenced by leading market positions in well established industries, high
rates of return of funds employed, conservative capitalization structures
with moderate reliance on debt and ample asset protection, broad margins in
earnings coverage of fixed financial charges and high internal cash
generation, and well established access to a range of financial markets and
assured sources of alternate liquidity. Issues rated Prime-2
(P-2) have a strong capacity for repayment of short-term promissory
obligations. This ordinarily will be evidenced by many of the
characteristics cited above but to a lesser degree. Earnings trends and
coverage ratios, while sound, will be more subject to variation.
Capitalization characteristics, while still appropriate, may be more
affected by external conditions. Ample alternate liquidity is maintained.
The rating Fitch-1 (Highest Grade) is the highest commercial paper
rating assigned by Fitch. Paper rated Fitch-1 is regarded as having the
strongest degree of assurance for timely payment. The rating Fitch-2 (Very
Good Grade) is the second highest commercial paper rating assigned by Fitch
which reflects an assurance of timely payment only slightly less in degree
than the strongest issues.
The rating Duff-1 is the highest commercial paper rating assigned by
Duff. Paper rated Duff-1 is regarded as having very high certainty of
timely payment with excellent liquidity factors which are supported by ample
asset protection. Risk factors are minor. Paper rated Duff-2 is regarded
as having good certainty of timely payment, good access to capital markets
and sound liquidity factors and company fundamentals. Risk factors are
small.
The designation A1 by IBCA indicates that the obligation is supported
by a very strong capacity for timely repayment. Those obligations rated A1+
are supported by the highest capacity for timely repayment. Obligations
rated A2 are supported by a strong capacity for timely repayment, although
such capacity may be susceptible to adverse changes in business, economic,
or financial conditions.
The rating TBW-1 is the highest short-term obligation rating assigned
by BankWatch. Obligations rated TBW-1 are regarded as having the strongest
capacity for timely repayment. Obligations rated TBW-2 are supported by a
strong capacity for timely repayment, although the degree of safety is not
as high as for issues rated TBW-1.
Bond and Long-Term Ratings
Bonds rated AAA are considered by S&P to be the highest grade
obligations and possess an extremely strong capacity to pay principal and
interest. Bonds rated AA by S&P are judged by S&P to have a very strong
capacity to pay principal and interest and, in the majority of instances,
differ only in small degrees from issues rated AAA. The rating AA may be
modified by the addition of a plus or minus sign to show relative standing
within the rating category.
Bonds rated Aaa by Moody's are judged to be of the best quality. Bonds
rated Aa by Moody's are judged by Moody's to be of high quality by all
standards and, together with the Aaa group they comprise what are generally
known as high-grade bonds. Bonds rated Aa are rated lower than Aaa bonds
because margins of protection may not be as large or fluctuations of
protective elements may be of greater amplitude or there may be other
elements present which make the long-term risks appear somewhat larger.
Moody's applies numerical modifiers 1, 2 and 3 in the Aa rating category.
The modifier 1 indicates a ranking for the security in the higher end of
this rating category, the modifier 2 indicates a mid-range ranking, and the
modifier 3 indicates a ranking in the lower end of the rating category.
Bonds rated AAA by Fitch are judged by Fitch to be strictly high grade,
broadly marketable, suitable for investment by trustees and fiduciary
institutions and liable to slight market fluctuation other than through
changes in the money rate. The prime feature of an AAA bond is a showing of
earnings several times or many times interest requirements, with such
stability of applicable earnings that safety is beyond reasonable question
whatever changes occur in conditions. Bonds rated AA by Fitch are judged by
Fitch to be of safety virtually beyond question and are readily salable,
whose merits are not unlike those of the AAA class, but whose margin of
safety is less strikingly broad. The issue may be the obligation of a small
company, strongly secured but influenced as to rating by the lesser
financial power of the enterprise and more local type of market.
Bonds rated AAA by Duff are considered to be of the highest credit
quality. The risk factors are negligible, being only slightly more than
U.S. Treasury debt. Bonds rated AA are considered by Duff to be of high
credit quality with strong protection factors. Risk is modest but may vary
slightly from time to time because of economic conditions.
Obligations rated AAA by IBCA have the lowest expectation of investment
risk. Capacity for timely repayment of principal and interest is
substantial, such that adverse changes in business, economic or financial
conditions are unlikely to increase investment risk significantly.
Obligations rated AA by IBCA have a very low expectation of investment risk.
Capacity for timely repayment of principal and interest is substantial.
Adverse changes in business, economic or financial conditions may increase
investment risk albeit not very significantly.
IBCA also assigns a rating to certain international and U.S. banks. An
IBCA bank rating represents IBCA's current assessment of the strength of the
bank and whether such bank would receive support should it experience
difficulties. In its assessment of a bank, IBCA uses a dual rating system
comprised of Legal Ratings and Individual Ratings. In addition, IBCA
assigns banks Long- and Short-Term Ratings as used in the corporate ratings
discussed above. Legal Ratings, which range in gradation from 1 through 5,
address the question of whether the bank would receive support from central
banks or shareholders if it experienced difficulties, and such ratings are
considered by IBCA to be a prime factor in its assessment of credit risk.
Individual Ratings, which range in gradations from A through E, represent
IBCA's assessment of a bank's economic merits and address the question of
how the bank would be viewed if it were entirely independent and could not
rely on support from state authorities or its owners.
In addition to ratings of short-term obligations, BankWatch assigns a
rating to each issuer it rates, in gradations of A through E. BankWatch
examines all segments of the organization including, where applicable, the
holding company, member banks or associations, and other subsidiaries. In
those instances where financial disclosure is incomplete or untimely, a
qualified rating (QR) is assigned to the institution. BankWatch also
assigns, in the case of foreign banks, a country rating which represents an
assessment of the overall political and economic stability of the country in
which the bank is domiciled.
APPENDIX B
(MUNICIPAL FUNDS)
Description of S&P, Moody's and Fitch ratings:
S&P
Municipal Bond Ratings
An S&P municipal bond rating is a current assessment of the
creditworthiness of an obligor with respect to a specific obligation.
The ratings are based on current information furnished by the issuer or
obtained by S&P from other sources it considers reliable, and will include:
(1) likelihood of default-capacity and willingness of the obligor as to the
timely payment of interest and repayment of principal in accordance with the
terms of the obligation; (2) nature of and provisions of the obligation; and
(3) protection afforded by, and relative position of, the obligation in the
event of bankruptcy, reorganization or other arrangement under the laws of
bankruptcy and other laws affecting creditors' rights.
AAA
Debt rated AAA has the highest rating assigned by S&P. Capacity to pay
interest and repay principal is extremely strong.
AA
Debt rated AA has a very strong capacity to pay interest and repay
principal and differs from the highest rated issues only in a small degree.
Municipal Note Ratings
SP-1
The issuers of these municipal notes exhibit very strong or strong
capacity to pay principal and interest. Those issues determined to possess
overwhelming safety characteristics are given a plus (+) designation.
Commercial Paper Ratings
The rating A is the highest rating and is assigned by S&P to issues
that are regarded as having the greatest capacity for timely payment.
Issues in this category are delineated with the numbers 1, 2 and 3 to
indicate the relative degree of safety. Paper rated A-1 indicates that the
degree of safety regarding timely payment is either overwhelming or very
strong. Those issues determined to possess overwhelming safety
characteristics are denoted with a plus sign (+) designation.
Moody's
Municipal Bond Ratings
Aaa
Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to
as "gilt edge." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized
are most unlikely to impair the fundamentally strong position of such
issues.
Aa
Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what generally are
known as high grade bonds. They are rated lower than the best bonds because
margins of protection may not be as large as in Aaa securities or
fluctuation of protective elements may be of greater amplitude or there may
be other elements present which make the long-term risks appear somewhat
larger than in Aaa securities. Bonds in the Aa category which Moody's
believes possess the strongest investment attributes are designated by the
symbol Aa1.
Commercial Paper Ratings
The rating Prime-1 (P-1) is the highest commercial paper rating
assigned by Moody's. Issuers of P-1 paper must have a superior capacity for
repayment of short-term promissory obligations, and ordinarily will be
evidenced by leading market positions in well established industries, high
rates of return on funds employed, conservative capitalization structures
with moderate reliance on debt and ample asset protection, broad margins in
earnings coverage of fixed financial charges and high internal cash
generation, and well established access to a range of financial markets and
assured sources of alternate liquidity. Issuers rated Prime-2
(P-2) have a strong ability for repayment of senior short-term debt
obligations. Capitalization characteristics, while still appropriate, may
be more affected by external conditions. Ample alternate liquidity is
maintained.
Municipal Note Ratings
Moody's ratings for state and municipal notes and other short-term
loans are designated Moody's Investment Grade (MIG). Such ratings recognize
the difference between short-term credit risk and long-term risk. Factors
affecting the liquidity of the borrower and short-term cyclical elements are
critical in short-term ratings, while other factors of major importance in
bond risk, long-term secular trends for example, may be less important over
the short run.
A short-term rating may also be assigned on an issue having a demand
feature. Such ratings will be designated as VMIG or, if the demand feature
is not rated, as NR. Short-term ratings on issues with demand features are
differentiated by the use of the VMIG symbol to reflect such characteristics
as payment upon periodic demand rather than fixed maturity dates and payment
relying on external liquidity. Additionally, investors should be alert to
the fact that the source of payment may be limited to the external liquidity
with no or limited legal recourse to the issuer in the event the demand is
not met.
Moody's short-term ratings are designated Moody's Investment Grade as
MIG 1 or VMIG 1 through MIG 4 or VMIG 4. As the name implies, when Moody's
assigns a MIG or VMIG rating, all categories define an investment grade
situation.
MIG 1/VMIG 1
This designation denotes best quality. There is present strong
protection by established cash flows, superior liquidity support or
demonstrated broad-based access to the market for refinancing.
MIG 2/VMIG 2
This designation denotes high quality. Margins of protection are ample
although not so large as in the preceding group.
Fitch
Municipal Bond Ratings
The ratings represent Fitch's assessment of the issuer's ability to
meet the obligations of a specific debt issue or class of debt. The ratings
take into consideration special features of the issue, its relationship to
other obligations of the issuer, the current financial condition and
operating performance of the issuer and of any guarantor, as well as the
political and economic environment that might affect the issuer's future
financial strength and credit quality.
AAA
Bonds rated AAA are considered to be investment grade and of the
highest credit quality. The obligor has an exceptionally strong ability to
pay interest and repay principal, which is unlikely to be affected by
reasonably foreseeable events.
AA
Bonds rated AA are considered to be investment grade and of very high
credit quality. The obligor's ability to pay interest and repay principal
is very strong, although not quite as strong as bonds rated AAA. Because
bonds rated in the AAA and AA categories are not significantly vulnerable to
foreseeable future developments, short-term debt of these issuers is
generally rated F-1+.
Plus (+) and minus (-) signs are used with a rating symbol to indicate
the relative position of a credit within the rating category.
Short-Term Ratings
Fitch's short-term ratings apply to debt obligations that are payable
on demand or have original maturities of up to three years, including
commercial paper, certificates of deposit, medium-term notes, and municipal
and investment notes.
Although the credit analysis is similar to Fitch's bond ratings
analysis, the short-term rating places greater emphasis than bond ratings on
the existence of liquidity necessary to meet the issuer's obligations in a
timely manner.
F-1+
Exceptionally Strong Credit Quality. Issues assigned this rating are
regarded as having the strongest degree of assurance for timely payment.
F-1
Very Strong Credit Quality. Issues assigned this rating reflect an
assurance of timely payment only slightly less in degree than issues rated F-
1+.
F-2
Good Credit Quality. Issues carrying this rating have a satisfactory
degree of assurance for timely payments, but the margin of safety is not as
great as the F-1+ and F-1 categories.
APPENDIX C
INVESTING IN CALIFORNIA MUNICIPAL OBLIGATIONS
RISK FACTORS--INVESTING IN CALIFORNIA MUNICIPAL OBLIGATIONS
Certain California (the "State") constitutional amendments,
legislative measures, executive orders, civil actions and voter
initiatives, as well as the general financial condition of the
State, could adversely affect the ability of issuers of
California Municipal Obligations to pay interest and principal on
such obligations. The following information constitutes only a
brief summary, does not purport to be a complete description, and
is based on information drawn from official statements relating
to securities offerings of the State of California and various
local agencies, available as of the date of this Statement of
Additional Information. While the Fund has not independently
verified such information, it has no reason to believe that such
information is not correct in all material respects.
Recent Developments. From mid-1990 to late 1993, the State
suffered a recession with the worst economic, fiscal and budget
conditions since the 1930s. Construction, manufacturing
(especially aerospace), exports and financial services, among
others, were all severely affected. Job losses have been the
worst of any post-war recession. Unemployment reached 10.1% in
January 1994, but fell sharply to 7.7% in October and November
1994. According to the State's Department of Finance, recovery
from the recession in California began in 1994.
The recession seriously affected State tax revenues, which
basically mirror economic conditions. It also has caused
increased expenditures for health and welfare programs. The
State also has been facing a structural imbalance in its budget
with the largest programs supported by the General Fund (K-12
schools and community colleges, health and welfare, and
corrections) growing at rates higher than the growth rates for
the principal revenue sources of the General Fund. As a result,
the State experienced recurring budget deficits in the late 1980s
and early 1990s. The State Controller reported that expenditures
exceeded revenues for four of the five years ending with 1991-92.
However, at June 30, 1996, according to the Department of
Finance, the State's Special Fund for Economic Uncertainties
("SFEU") had a small negative balance of approximately $87
million, all but eliminating the accumulated budget deficit from
early 1990's.
The accumulated budget deficits over the past several years,
together with expenditures for school funding which have not been
reflected in the budget, and reduction of available internal
borrowable funds, have combined to significantly deplete the
State's cash resources to pay its ongoing expenses. In order to
meet its cash needs, the State has had to rely for several years
on a series of external borrowings, including borrowings past the
end of a fiscal year. Such borrowings are expected to continue
in future fiscal years. To meet its cash flow needs in the 1994-
95 fiscal year the State issued, in July and August 1994, $4.0
billion of revenue anticipation warrants which mature on April
25, 1996, and $3.0 billion of revenue anticipation notes which
matured on June 28, 1995.
The State issued $3.0 billion of revenue anticipation notes
for 1996-97 fiscal year end on August 7, 1996, which matured on
June 30, 1997.
As a result of the deterioration in the State's budget and
cash situation, the rating agencies reduced the State's credit
ratings. Between October 1991 and July 1994, the rating on the
State's general obligation bonds was reduced by S&P from "AAA" to
"A," by Moody's from "Aaa" to "A1" and by Fitch from "AAA" to
"A."
The 1996-97 Fiscal Year Budget projects $47.6 billion of
General Fund revenues and transfers and $47.3 billion of budgeted
expenditures.
It projects $50.7 billion of General Fund revenues and
transfers and $50.3 billion of budgeted expenditures and projects
a balance in the SEFU of $552 million on June 30, 1998.
The 1997-98 Fiscal Year Budget was released by the Governor
on January 9, 1997.
On December 6, 1994, Orange County, California (the
"County"), together with its pooled investment funds (the "County
Funds") filed for protection under Chapter 9 of the Federal
Bankruptcy Code, after reports that the County Funds had suffered
significant market losses in their investments, causing a
liquidity crisis for the County Funds and the County. More than
200 other public entities, most of which, but not all, are
located in the County, were also depositors in the Funds. As of
mid-January 1995, following a restructuring of most of the Funds'
assets to increase their liquidity and reduce their exposure to
interest rate increases, the County estimated the County Funds'
loss at about $1.69 billion, or about 23% of their initial
deposits of approximately $7.5 billion. Many of the entities
which deposited monies in the Funds, including the County, are
facing cash flow difficulties because of the bankruptcy filing
and may be required to reduce programs or capital projects. This
may also effect their ability to meet there outstanding
obligations.
The State has no existing obligation with respect to any
outstanding obligations or securities of the County or any of the
other participating entities. However, in the event the County
is unable to maintain county administered State programs because
of insufficient resources, it may be necessary for the State to
intervene, but the State cannot presently predict what, if any,
action may occur.
State Finances. State moneys are segregated into the
General Fund and approximately 800 Special Funds including, Bond,
Trust and Pension Funds. The General Fund consists of the
revenues received into the State Treasury and earnings from State
investments, which are not required by law to be credited to any
other fund. The General Fund is the principal operating fund for
the majority of governmental activities and is the depository of
most major State revenue sources.
The SFEU is funded with General Fund revenues and was
established to protect the State from unforeseen reduced levels
of revenues and/or unanticipated expenditure increases. Amounts
in the SFEU may be transferred by the Controller as necessary to
meet cash needs of the General Fund. The Controller is required
to return moneys so transferred without payment of interest as
soon as there are sufficient moneys in the General Fund. For
budgeting and accounting purposes, any appropriation made from
the SFEU is deemed an appropriation from the General Fund. For
year-end reporting purposes, the Controller is required to add
the balance in the SFEU to the balance in the General Fund so as
to show the total monies then available for General Fund
purposes.
Inter-fund borrowing has been used for many years to meet
temporary imbalances of receipts and disbursements in the General
Fund. As of June 30, 1996, the General Fund had outstanding
loans from the SFEU and Special Funds in the amount of $1.5
billion.
Articles XIIIA and XIIIB. XIIC and XIIID to the State
Constitution and Other Revenue Law Changes. Prior to 1977,
revenues of the State government experienced significant growth
primarily as a result of inflation and continuous expansion of
the tax base of the State. In 1978, State voters approved an
amendment to the State Constitution known as Proposition 13,
which added Article XIIIA to the State Constitution, reducing ad
valorem local property taxes by more than 50%. In addition,
Article XIIIA provides that additional taxes may be levied by
cities, counties and special districts only upon approval of not
less than a two-thirds vote of the "qualified electors" of such
district, and requires not less than a two-thirds vote of each of
the two houses of the State Legislature to enact any changes in
State taxes for the purpose of increasing revenues, whether by
increased rate or changes in methods of computation.
Primarily as a result of the reductions in local property
tax revenues received by local governments following the passage
of Proposition 13, the Legislature undertook to provide
assistance to such governments by substantially increasing
expenditures from the General Fund for that purpose beginning in
the 1978-79 fiscal year. In recent years, in addition to such
increased expenditures, the indexing of personal income tax rates
(to adjust such rates for the effects of inflation), the
elimination of certain inheritance and gift taxes and the
increase of exemption levels for certain other such taxes had a
moderating impact on the growth in State revenues. In addition,
the State has increased expenditures by providing a variety of
tax credits, including renters' and senior citizens' credits and
energy credits.
The State is subject to an annual "appropriations limit"
imposed by Article XIIIB of the State Constitution adopted in
1979. Article XIIIB prohibits the State from spending
"appropriations subject to limitation" in excess of the
appropriations limit imposed. "Appropriations subject to
limitations" are authorizations to spend "proceeds of taxes,"
which consist of tax revenues, and certain other funds, including
proceeds from regulatory licenses, user charges or other fees to
the extent that such proceeds exceed "the cost reasonably borne
by such entity in providing the regulation, product or service."
One of the exclusions from these limitations is "debt service"
(defined as "appropriations required to pay the cost of interest
and redemption charges, including the funding of any reserve or
sinking fund required in connection therewith, on indebtedness
existing or legally authorized as of January 1, 1979 or on bonded
indebtedness thereafter approved" by the voters). In addition,
appropriations required to comply with mandates of courts or the
Federal government and, pursuant to Proposition 111 enacted in
June 1990, appropriations for qualified capital outlay projects
and appropriations of revenues derived from any increase in
gasoline taxes and motor vehicle weight fees above January 1,
1990 levels are not included as appropriations subject to
limitation. In addition, a number of recent initiatives were
structured or proposed to create new tax revenues dedicated to
certain specific uses, with such new taxes expressly exempted
from the Article XIIIB limits (e.g., increased cigarette and
tobacco taxes enacted by Proposition 99 in 1988). The
appropriations limit also may be exceeded in cases of emergency.
However, unless the emergency arises from civil disturbance or
natural disaster declared by the Governor, and the appropriations
are approved by two-thirds of the Legislature, the appropriations
limit for the next three years must be reduced by the amount of
the excess.
The State's appropriations limit in each year is based on
the limit for the prior year, adjusted annually for changes in
California per capita personal income and changes in population,
and adjusted, when applicable, for any transfer of financial
responsibility of providing services to or from another unit of
government. The measurement of change in population is a blended
average of statewide overall population growth, and change in
attendance at local school and community college ("K-14")
districts. As amended by Proposition 111, the appropriations
limit is tested over consecutive two-year periods. Any excess of
the aggregate "proceeds of taxes" received over such two-year
periods above the combined appropriations limits for those two
years is divided equally between transfers to
K-14 districts and refunds to taxpayers.
As originally enacted in 1979, the State's appropriations
limit was based on its 1978-79 fiscal year authorizations to
expend proceeds of taxes and was adjusted annually to reflect
changes in cost of living and population (using different
definitions, which were modified by Proposition 111). Commencing
with the 1991-92 fiscal year, the State's appropriations limit is
adjusted annually based on the actual 1986-87 limit, and as if
Proposition 111 had been in effect. The State Legislature has
enacted legislation to implement Article XIIIB which defines
certain terms used in Article XIIIB and sets forth the methods
for determining the State's appropriations limit. Government
Code Section 7912 requires an estimate of the State's
appropriations limit to be included in the Governor's Budget, and
thereafter to be subject to the budget process and established in
the Budget Act.
For the 1993-94 fiscal year, the State appropriations limit
was $36.60 billion, and appropriations subject to limitation were
$6.55 billion under the limit. The limit for the 1994-95 fiscal
year was $37.55 billion, and appropriations subject to
limitations were $5.93 billion under the limit. The limit for
the 1992 fiscal year was $39.31 billion, and the appropriations
subject to limitation were estimated to be $5.12 billion under
the limit. The limit for the 1996-97 fiscal year was $42
billion, and the appropriations subject to limitation were
estimated to be $7.12 billion under the limit.
In November 1988, State voters approved Proposition 98,
which changed State funding of public education below the
university level and the operation of the State's appropriations
limit, primarily by guaranteeing K-14 schools a minimum share of
General Fund revenues. Under Proposition 98 (as modified by
Proposition 111, which was enacted in June 1990), K-14 schools
are guaranteed the greater of (a) 40.3% of General Fund revenues
("Test 1"), (b) the amount appropriated to K-14 schools in the
prior year, adjusted for changes in the cost of living (measured
as in Article XIIIB by reference to California per capita
personal income) and enrollment ("Test 2"), or (c) a third test,
which would replace the second test in any year when the
percentage growth in per capita General Fund revenues from the
prior year plus .5% is less than the percentage growth in
California per capita personal income ("Test 3"). Under "Test
3," schools would receive the amount appropriated in the prior
year adjusted for changes in enrollment and per capita General
Fund revenues, plus an additional small adjustment factor. If
"Test 3" is used in any year, the difference between "Test 3" and
"Test 2" would become a "credit" to schools which would be the
basis of payments in future years when per capita General Fund
revenue growth exceeds per capita personal income growth.
Proposition 98 permits the Legislature by two-thirds vote of
both houses, with the Governor's concurrence, to suspend the K-14
schools' minimum funding formula for a one-year period. In the
fall of 1989, the Legislature and the Governor utilized this
provision to avoid having 40.3% of revenues generated by a
special supplemental sales tax enacted for earthquake relief go
to K-14 schools. Proposition 98 also contains provisions
transferring certain State tax revenues in excess of the Article
XIIIB limit to K-14 schools.
The 1991-92 Budget Act, applying "Test 2" of Proposition 98,
appropriated approximately $18.4 billion for K-14 schools
pursuant to Proposition 98. During the course of the fiscal
year, revenues proved to be substantially below expectations. By
the time the Governor's Budget was introduced in January 1992, it
became clear that per capita growth in General Fund revenues for
1991-92 would be far smaller than the growth in California per
capita personal income and the Governor's Budget therefore
reflected a reduction in Proposition 98 funding in 1991-92 by
applying "Test 3" rather than "Test 2."
In response to the changing revenue situation and to fully
fund the Proposition 98 guarantee in both the 1991-92 and 1992-93
fiscal years without exceeding it, the Legislature enacted
several bills as part of the 1992-93 budget package which
responded to the fiscal crisis in education funding. Fiscal year
1991-92 Proposition 98 appropriations for K-14 schools were
reduced by $1.083 billion. In order to not adversely impact cash
received by school districts, however, a short-term loan was
appropriated from the non-Proposition 98 State General Fund. The
Legislature then appropriated $16.6 billion to K-14 schools for
1992-93 (the minimum guaranteed by Proposition 98), but
designated $1.083 billion of this amount to "repay" the prior
year loan, thereby reducing cash outlays in 1992-93 by that
amount. In addition to reducing the 1991-92 fiscal year
appropriations for K-14 schools by $1.083 billion and converting
the amount to a loan (the "inter-year adjustment"), Chapter 703,
Statutes of 1992 also made an adjustment to "Test 1," based on
the additional $1.2 billion of local property taxes that were
shifted to schools and community colleges. The "Test 1"
percentage changed from 40% to 37%. Additionally, Chapter 703
contained a provision that if an appellate court should determine
that the "Test 1" recalculation or the inter-year adjustment is
unconstitutional, unenforceable or invalid, Proposition 98 would
be suspended for the 1992-93 fiscal year, with the result that K-
14 schools would receive the amount intended by the 1992-93
Budget Act compromise.
The State Controller stated in October 1992 that, because of
a drafting error in Chapter 703, he could not implement the
$1.083 billion reduction of the 1991-92 school funding
appropriation, which was part of the inter-year adjustment. The
Legislature untimely enacted corrective legislation as part of
the 1993-94 Budget package to implement the $1.083 billion inter-
year adjustment as originally intended.
In the 1992-93 Budget Act, a new loan of $732 million was
made to K-12 schools in order to maintain per-average daily
attendance ("ADA") funding at the same level as 1991-92, at
$4,187. An additional loan of $241 million was made to community
college districts. These loans are to be repaid from future
Proposition 98 entitlements. (The teachers' organization lawsuit
also seeks to declare invalid the provision making the $732
million a loan "repayable" from future years' Proposition 98
funds. Including both State and local funds, and adjusting for
the loans and repayments, on a cash basis, total Proposition 98 K-
12 funding in 1992-93 increased to $21.5 billion, 2.4% more than
the amount in 1992-93 ($21.0 billion).
Based on revised State tax revenues and estimated decreased
reported pupil enrollment, the 1993-94 Budget Act projected that
the 1992-93 Proposition 98 Budget Act appropriations of $16.6
billion exceeded a revised minimum guarantee by $313 million. As
a result, the 1993-94 Budget Act reverted $25 million in 1992-93
appropriations to the General Fund. Limiting the reversion to
this amount ensures that per ADA funding for general purposes
will remain at the prior year level of $4,217 per pupil. The
1993-94 Governor's Budget subsequently proposed deficiency
funding of $121 million for school apportionments and special
education, increasing funding per pupil in 1992-93 to $4,244.
The 1993-94 Budget Act also designated $98 million in 1992-93
appropriations toward satisfying prior years' guarantee levels,
an obligation that resulted primarily from updating State tax
revenues for 1991-92, and designates $190 million as a loan
repayable from 1993-94 funding.
The 1993-94 Budget Act projected the Proposition 98 minimum
funding level at $13.5 billion based on the "Test 3" calculation
where the guarantee is determined by the change in per capita
growth in General Fund revenues, which are projected to decrease
on a year-over-year basis. This amount also takes into account
increased property taxes transferred to school districts from
other local governments.
Legislation accompanying the 1993-94 Budget Act (Chapter
66/93) provided a new loan of $609 million to K-12 schools in
order to maintain per ADA funding at $4,217 and a loan of $178
million to community colleges. These loans have been combined
with the K-14 1992-93 loans into one loan totalling $1.760
billion. Repayment of this loan would be from future years'
Proposition 98 entitlements, and would be conditioned on
maintaining current funding levels per pupil for K-12 schools.
Chapter 66 also reduced the "Test 1" percentage to 35% to reflect
the property tax shift among local government agencies.
The 1994-95 Budget Act appropriated $14.4 billion of
Proposition 98 funds for K14 schools based on Test 2. This
exceeds the minimum Proposition 98 guarantee by $8 million to
maintain K-12 funding per pupil at $4,217. Based upon updated
State revenues, growth rates and inflation factors, the 1994-95
Budget Act appropriated an additional $286 million within
Proposition 98 for the 1993-94 fiscal year, to reflect a need in
appropriations for school districts and county offices of
education, as well as an anticipated deficiency in special
education fundings. These and other minor appropriation
adjustments increase the 1993-94 Proposition 98 guarantee to
$13.8 billion, which exceeds the minimum guarantee in that year
by $272 million and provides per pupil funding of $4,225.
The 1995-96 Governor's Budget adjusts the 1993-94 minimum
guarantee to reflect changes in enrollment and inflation, and
1993-94 Proposition 98 appropriations were increased to $14.1
billion, primarily to reflect changes in the statutory continuous
appropriation for apportionments. The revised appropriations now
exceed the minimum guarantee by $32 million. This appropriation
level still provides per-pupil funding of $4,225.
The 1994-95 Proposition 98 minimum guarantee also has been
adjusted for changes in factors described above, and is now
calculated to be $14.9 billion. Within the minimum guarantee,
the dollars per pupil have been maintained at the prior year's
level; consequently, the 1994-95 minimum guarantee now includes a
loan repayment of $135 million, and the per-pupil funding
increases to $4,231.
The 1995-96 Governor's Budget proposes to appropriate $15.9
billion of Proposition 98 funds to K-14 to meet the guarantee
level. Included within the guarantee is a loan repayment of $379
million for the combined outstanding loans of $1.76 billion.
Funding per pupil is estimated to increase by $61 over 1994-95 to
$4,292.
In November 1996, State voters approved Proposition 218,
which added Articles XIIIC and XIIID to the State Constitution
generally requiring voter approval of most tax or fee increases
by local governments and curtailing local governments' use of
benefit assessments to fund certain property-related services to
finance infrastructure. The amendments extend to all local
government entities the requirement that all taxes for general
purposes be approved by a majority vote and that all taxes for
special purposes be approved by a two-thirds majority vote
(including the ratification of those taxes that have been imposed
since January 1, 1995 up to the effective date of the
amendments). Proposition 218 also limits the use of special
assessments or "property-related" fees to services or
infrastructure that confer a "special benefit" to specific
property; police, fire and other services are now deemed to
benefit the public at large and, therefore, could not be funded
by special assessments. Finally, the amendments enable the
voters to use their initiative power to repeal previously-
authorized taxes, assessments, fees and charges. It remains to
be seen what impact these Articles will have on existing and
future California debt obligations.
Sources of Tax Revenue. The California personal income tax,
which in 1994-95 contributed about 43% of General Fund revenues,
is closely modeled after the Federal income tax law. It is
imposed on net taxable income (gross income less exclusions and
deductions). The tax is progressive with rates ranging from 1%
to 9.3%. Personal, dependent, and other credits are allowed
against the gross tax liability. In addition, taxpayers may be
subject to an alternative minimum tax ("AMT") which is much like
the Federal AMT. This is designed to ensure that excessive use
of tax preferences does not reduce taxpayers' liabilities below
some minimum level. Legislation enacted in July 1991 added two
new marginal tax rates, at 10% and 11%, effective for tax years
1991 through 1995. After 1995, the maximum personal income tax
rate returned to 9.3%, and the AMT rate dropped from 8.5% to 7%.
The personal income tax is adjusted annually by the change
in the consumer price index to prevent taxpayers from being
pushed into higher tax brackets without a real increase in
income.
The sales tax is imposed upon retailers for the privilege of
selling tangible personal property in California. Most retail
sales and leases are subject to the tax. However, exemptions
have been provided for certain essentials such as food for home
consumption, prescription drugs, gas, electricity and water.
Sales tax accounted for about 34% of General Fund revenue in 1994-
95. Bank and corporation tax revenues comprised about 13% of
General Fund revenue in 1994-95. In 1989, Proposition 99 added a
25 cents per pack excise tax on cigarettes, and a new equivalent
excise tax on other tobacco products. Legislation enacted in
1993 added an additional 2 cents per pack for the purpose of
funding breast cancer research.
General Financial Condition of the State. In the years
following enactment of the Federal Tax Reform Act of 1986, and
conforming changes to the State's tax laws, taxpayer behavior
became more difficult to predict, and the State experienced a
series of fiscal years in which revenue came in significantly
higher or lower than original estimates. The 1989-90 fiscal year
ended with revenues below estimates and the SFEU was fully
depleted by June 30, 1990. This date essentially coincided with
the date of the most recent recession, and the State subsequently
accumulated a budget deficit in the SFEU approaching $2.8 billion
at its peak. The State's budget problems in recent years also
have been caused by a structural imbalance which has been
identified by the current and previous Administrations. The
largest General Fund programs -- K-14 education, health, welfare
and corrections -- were increasing faster than the revenue base,
driven by the State's rapid population increases.
Starting in the 1990-91 fiscal year, each budget required
multibillion dollar actions to bring projected revenues and
expenditures into balance and to close large "budget gaps" which
were identified. The Legislature and Governor eventually agreed
on significant cuts in program expenditures, some transfers of
program responsibilities and funding from the State to local
governments, revenue increases (particularly in the 1991-92
fiscal year budget), and various one-time adjustments and
accounting changes. However, as the recession took hold and
deepened after the summer of 1990, revenues dropped sharply and
expenditures for health and welfare programs increased as job
losses mounted, so that the State ended each of the 1990-91 and
1991-92 fiscal years with an unanticipated deficit in the budget
reserve, the SFEU, as compared to projected positive balances.
As a result of the revenue shortfalls accumulating for the
previous two fiscal years, the Controller in April 1992 indicated
that cash resources (including borrowing from Special Funds)
would not be sufficient to meet all General Fund obligations due
on June 30 and July 1, 1992. On June 25, 1992, the Controller
issued $475 million of 1992 Revenue Anticipation Warrants (the
"1992 Warrants") in order to provide funds to cover all necessary
payments from the General Fund at the end of the 1991-92 fiscal
year and on July 1, 1992. The 1992 Warrants were paid on July 24,
1992. In addition to the 1992 Warrants, the Controller reported
that as of June 30, 1992, the General Fund had borrowed $1.336
billion from the SFEU and $4.699 billion from other Special
Funds, using all but about $183 million of borrowable cash
resources.
To balance the 1992-93 Governor's Budget, program reductions
totalling $4.365 billion and a revenue and transfer increase of
$872 million were proposed for the 1991-92 and 1992-93 fiscal
years. Economic performance in the State continued to be
sluggish after the 1992-93 Governor's Budget was prepared. By
the time of the "May Revision," issued on May 20, 1992, the
Administration estimated that the 1992-93 Budget needed to
address a gap of about $7.9 billion, much of which was needed to
repay the accumulated budget deficits of the previous two years.
The severity of the budget actions needed led to a long
delay in adopting the budget. With the failure to enact a budget
by July 1, 1992, the State had no legal authority to pay many of
its vendors until the budget was passed. Starting on July 1,
1992, the Controller was required to issue "registered warrants"
in lieu of normal warrants backed by cash to pay many State
obligations. Available cash was used to pay constitutionally
mandated and priority obligations, such as debt service on bonds
and revenue anticipation warrants. Between July 1 and September
4, 1992, the Controller issued an aggregate of approximately $3.8
billion of registered warrants payable from the General Fund, all
of which were called for redemption by September 4, 1992
following enactment of the 1992-93 Budget Act and issuance by the
State of $3.3 billion of interim notes.
The Legislature enacted the 1992-93 Budget Bill on August
29, 1992, and it was signed by the Governor on September 2, 1992.
The 1992-93 Budget Act provided for expenditures of $57.4 billion
and consisted of General Fund expenditures of $40.8 billion and
Special Fund and Bond Fund expenditures of $16.6 billion. The
Department of Finance estimated a balance in the SFEU of $28
million on June 30, 1993.
The $7.9 billion budget gap was closed primarily through
cuts in the program expenditures (principally for health and
welfare programs, aid to schools and support for higher
education), together with some increases in revenues from
accelerated collections and changes in tax laws to confirm to
Federal law changes, and a variety of on-time inter-fund
transfers and deferrals. The other major component of the budget
compromise was a law requiring local governments to transfer a
total of $1.3 billion to K-12 school and community college
districts, thereby reducing by that amount General Fund support
for those districts under Proposition 98.
In May 1993, the Department of Finance projected that the
General Fund would end the fiscal year on June 30, 1993 with an
accumulated budget deficit of about $2.8 billion, and a negative
fund balance of about $2.2 billion (the difference being certain
reserves for encumbrances and school funding costs). As a
result, the State issued $5 billion of revenue anticipation notes
and warrants.
The Governor's 1993-94 Budget, introduced on January 8,
1993, proposed General Fund expenditures of $37.3 billion, with
projected revenues of $39.9 billion. It also proposed Special
Fund expenditures of $12.4 billion and Special Fund revenues of
$12.1 billion. The 1993-94 fiscal year represented the third
consecutive year the Governor and the Legislature were faced with
a very difficult budget environment, requiring revenue actions
and expenditure cuts totaling billions of dollars to produce a
balanced budget. To balance the budget in the face of declining
revenues, the Governor proposed a series of revenue shifts from
local government, reliance on increased Federal aid and
reductions in state spending.
The "May Revision" of the Governor's Budget, released on May
20, 1993, indicated that the revenue projections of the January
Budget Proposal were tracking well, with the full year 1992-93
about $80 million higher than the January projection. Personal
income tax revenue was higher than projected, sales tax was close
to target, and bank and corporation taxes were lagging behind
projections. The May Revision projected the State would have an
accumulated deficit of about $2.75 billion by June 30, 1993. The
Governor proposed to eliminate this deficit over an 18-month
period. He also agreed to retain the 0.5% sales tax scheduled to
expire June 30 for a six-month period, dedicated to local public
safety purposes, with a November election to determine a
permanent extension. Unlike previous years, the Governor's
Budget and May Revision did not calculate a "gap" to be closed,
but rather set forth revenue and expenditure forecasts and
proposals designed to produce a balanced budget.
The 1993-94 Budget Act was signed by the Governor on June
30, 1993, along with implementing legislation. The Governor
vetoed about $71 million in spending. With enactment of the
Budget Act, the State carried out its regular cash flow borrowing
program for the fiscal year, which included the issuance of
approximately $2 billion of revenue anticipation notes that
matured on June 28, 1994.
The 1993-94 Budget Act was predicated on General Fund
revenues and transfers estimated at $40.6 billion, about $700
million higher than the January Governor's Budget, but still
about $400 million below 1992-93 (and the second consecutive year
of actual decline). The principal reasons for declining revenues
were the continued weak economy and the expiration (or repeal) of
three fiscal steps taken in 1991--a half cent temporary sales
tax, a deferral of operating loss carry forwards, and repeal by
initiative of a sales tax on candy and snack foods.
The 1993-94 Budget Act also assumed Special Fund revenues of
$11.9 billion, an increase of 2.9% over 1992-93.
The 1993-94 Budget Act included General Fund expenditures of
$38.5 billion (a 6.3% reduction from projected 1992-93
expenditures of $41.1 billion), in order to keep a balanced
budget within the available revenues. The Budget also included
Special Fund expenditures of $12.1 billion, a 4.2% increase.
The 1993-94 Budget Act contained no General Fund tax/revenue
increases other than a two year suspension of the renters' tax
credit.
Administration reports during the course of the 1993-94
fiscal year indicated that while economic recovery appeared to
have started in the second half of the fiscal year, recessionary
conditions continued longer than had been anticipated when the
1993-94 Budget Act was adopted. Overall, revenues for the 1993-
94 fiscal year were about $800 million lower than original
projections, and expenditures were about $780 million higher,
primarily because of higher health and welfare caseloads, lower
property taxes which require greater State support for K-14
education to make up to shortfall, and lower than anticipated
Federal government payments for immigration-related costs. The
reports in May and June 1994, indicated that revenues in the
second half of the 1993-94 fiscal year were very close to the
projections made in the Governor's Budget of January 10, 1994,
which was consistent with a slow turn around in the economy.
The Department of Finance's July 1994 Bulletin, which
included final June receipts, reported that June revenues were
$114 million (2.5%) above projection, with final end-of-year
results at $377 million (about 1%) above the May Revision
projections. Part of this result was due to the end-of-year
adjustments and reconciliations. Personal income tax and sales
tax continued to track projections. The largest factor in the
higher than anticipated revenues was from bank and corporation
taxes, which were $140 million (18.4%) above projection in June.
During the 1993-94 fiscal year, the State implemented the
Deficit Retirement Plan, which was part of the 1993-94 Budget
Act, by issuing $1.2 billion of revenue anticipation warrants in
February 1994 that matured December 21, 1994. This borrowing
reduced the cash deficit at the end of the 1993-94 fiscal year.
Nevertheless, because of the $1.5 billion variance from the
original 1993-94 Budget Act assumptions, the General Fund ended
the fiscal year at June 30, 1994 carrying forward an accumulated
deficit of approximately $1.8 billion.
Because of the revenue shortfall and the State's reduced
internal borrowable cash resources, in addition to the $1.2
billion of revenue anticipation warrants issued as part of the
Deficit Retirement Plan, the State issued an additional $2.0
billion of revenue anticipation warrants that matured July 26,
1994, which were needed to fund the State's obligations and
expenses through the end of the 1993-94 fiscal year.
The 1994-95 fiscal year represented the fourth consecutive
year the Governor and Legislature were faced with a very
difficult budget environment to produce a balanced budget. Many
program cost and budgetary adjustments had already been made in
the last three years. The Governor's Budget Proposal, as updated
in May and June 1994, proposed a two-year solution to pass the
accumulated deficit. The budget proposal set forth revenue and
expenditure forecasts and revenue and expenditure proposals which
estimated operating surpluses for the budget for both 1994-95 and
1995-96, and lead to the elimination of the accumulated budget
deficit, estimated at about $1.8 billion at June 30, 1994, by
June 30, 1996.
The 1994-95 Budget Act, signed by the Governor on July 8,
1994, projected revenues and transfers of $41.9 billion, $2.1
billion higher than revenues in 1993-94. This reflected the
Administration's forecast of an improving economy. Also included
in this figure was the projected receipt of about $360 million
from the Federal government to reimburse the State's cost of
incarcerating undocumented immigrants, most of which eventually
was not received.
The 1994-95 Budget Act projected Special Fund revenues of
$12.1 billion, a decrease of 2.4% from 1993-94 estimated
revenues.
The 1994-95 Budget Act projected General Fund expenditures
of $40.9 billion, an increase of $1.6 billion over the 1993-94
fiscal year. The 1994-95 Budget Act also projected Special Fund
expenditures of $13.7 billion, a 5.4% increase over 1993-94
fiscal year estimated expenditures.
The 1994-95 Budget Act contained no tax increases. Under
legislation enacted for the 1993-94 Budget Act, the renters' tax
credit was suspended for two years (1993 and 1994). A ballot
proposition to permanently restore the renters' tax credit after
1995 failed at the June 1994 election. The Legislature enacted a
further one-year suspension of the renters' tax credit, for 1995,
saving about $390 million in the 1995-96 fiscal year.
The 1995-96 Budget Act was signed by the Governor on August
3, 1995, 34 days after the start of the fiscal year. The Budget
Act projected General Fund revenues and transfers of $44.1
billion, a 3.5% increase from the prior year. Expenditures were
budgeted at $43.4 billion, a 4% increase. The Budget Act also
projected Special Fund revenues of $12.7 billion and appropriated
Special Fund expenditures of $13.0 billion.
Final data for the 1995-96 Fiscal Year showed revenues and
transfers of $46.1 billion, some $2 billion over the original
fiscal year estimate, which was attributed to the strong economic
recovery. Expenditures also increased, to an estimated $45.4
billion, as a result of the requirement to expend revenues for
schools under Proposition 98, and among other things, failure of
the federal government to enact welfare reform during the fiscal
year and to budget new aid for illegal immigrant costs, both of
which had been counted on to allow reductions in State costs.
Available internal borrowable resources (available cash, after
payment of all obligations due) on June 30, 1996 was
approximately $3.8 billion, representing a significant
improvement in the State's cash position, and ending the need for
deficit borrowing over the end of the fiscal year. The State's
improved cash position allowed it to repay the $4.0 billion
Revenue Anticipation Warrant issue on April 25, 1996, and to
issue only $2.0 billion in revenue anticipation notes during the
fiscal year, which matured on June 28, 1996.
The 1996-97 Budget Act was signed by the Governor on July
15, 1996, along with various implementing bills. The Governor
vetoed about $82 million of appropriations (both General Fund and
Special Fund). With the signing of the Budget Act, the State
implemented its regular cash flow borrowing program with the
issuance of $3.0 billion of Revenue Anticipation Notes to mature
on June 30, 1997. The Budget Act appropriated a modest budget
reserve in the SFEU of $305 million, as of June 30, 1997. The
Department of Finance projected that, on June 30, 1997, the
State's available internal borrowable (cash) resources will be
$2.9 billion, and after payment of all obligations due by that
date, so that no cross-fiscal year borrowing will be needed.
The Legislature rejected the Governor's proposed 15% cut in
personal income taxes (to be phased in over three years), and did
not approve a 5% cut in bank and corporation taxes, which was to
be effective for income years starting on January 1, 1997. As a
result, revenues for the fiscal year were estimated to total
$47.64 billion, a 3.3% increase over the final estimated 1995-96
revenues. Special Fund revenues were estimated to be $13.3
billion.
The Budget Act contained General Fund appropriations
totaling $47.25 billion, a 4.0% increase over the final estimated
1995-96 expenditures. Special Fund expenditures were budgeted at
$12.6 billion.
With the continued strong economic recovery in the State,
the Department of Finance has estimated, in connection with the
release of the Governor's 1997-98 Budget Proposal, that revenues
for the 1996-97 fiscal year will exceed initial projections by
about $760 million. This increase will be offset by higher
expenditures for K-14 school aid (pursuant to Proposition 98) and
for health and welfare costs, because Federal law changes and
other Federal actions did not provide as much assistance to the
State as was initially planned in the Budget Act. The
Department's updated projections show a balance in the SFEU of
$197 million, slightly lower than projected in July 1996. The
Department also projects the State's cash position will be
stronger than originally estimated, with unused internal
borrowable resources at June 30, 1997 of approximately $4.3
billion.
APPENDIX D
INVESTING IN NEW YORK MUNICIPAL OBLIGATIONS
RISK FACTORS--INVESTING IN NEW YORK MUNICIPAL OBLIGATIONS
The financial condition of New York State (the "State") and certain of
its public bodies (the "Agencies") and municipalities, particularly New York
City (the "City"), could affect the market values and marketability of New
York Municipal Obligations which may be held by the Fund. The following
information constitutes only a brief summary, does not purport to be a
complete description, and is based on information drawn from official
statements relating to securities offerings of the State, the City and the
Municipal Assistance Corporation for the City of New York ("MAC") available
as of the date of this Statement of Additional Information. While the Fund
has not independently verified such information, it has no reason to believe
that such information is not correct in all material respects.
A national recession commenced in mid-1990. The downturn continued
through the remainder of the 1990-91 fiscal year, and was followed by a
period of weak economic growth during the remainder of the 1991 calendar
year. For the calendar year 1992, the national economy continued to
recover, although at a rate below all post-war recoveries. The recession
was more severe in the State than in other parts of the nation, owing to a
significant retrenchment in the financial services industry, cutbacks in
defense spending, and an overbuilt real estate market. The State economy
remained in recession until 1993, when employment growth resumed. Since
early 1993, the State has gained approximately 100,000 jobs. The State's
economy expanded modestly during 1995. Although industries that export
goods and services abroad are expected to benefit from the lower dollar,
growth will be slowed by government cutbacks at all levels. On an average
annual basis, employment growth in 1995 was estimated to be about the same
as 1994. Both personal income and wages were estimated to have recorded
moderate gains in 1995. Employment growth is expected to slow significantly
in 1996 as the pace of national economic growth slackens, entire industries
experience consolidations, and governmental employment continues to shrink.
Personal income is estimated to have increased by approximately 5.0% in
1996.
The State's budget for the 1996-97 fiscal year was enacted by the
Legislature on July 13, 1996, more than three months after the start of the
fiscal year. Prior to adoption of the budget, the Legislature enacted
appropriations for disbursements considered to be necessary for State
operations and other purposes, including all necessary appropriations for
debt service. The State Financial Plan for the 1996-97 fiscal year was
formulated on July 25, 1996 and is based on the State's budget as enacted by
the Legislature and signed into law by the Governor, as well as actual
results for the first quarter of the 1996-97 fiscal year.
After adjustments for comparability between fiscal years, the adopted
1996-97 budget projects a year-over-year increase in General Fund
disbursements of 0.2%. Adjusted State Funds (excluding Federal grants)
disbursements are projected to increase by 1.6% from the prior fiscal year.
All Governmental Funds projected disbursements increase by 4.1% over the
prior fiscal year, after adjustments for comparability.
The 1996-97 State Financial Plan is projected to be balanced on a cash
basis. As compared to the Governor's proposed budget as revised on March
20, 1996, the State's adopted budget for 1996-97 increases General Fund
spending by $842 million, primarily from increases for education, special
education and higher education ($563 million). The balance represents
funding increases to a variety of other programs, including community
projects and increased assistance to fiscally distressed cities. Resources
used to fund these additional expenditures include $540 million in increased
revenues projected for 1996-97 based on higher-than-projected tax
collections during the first half of calendar 1996, $110 million in
projected receipts from a new State tax amnesty program, and other resources
including certain non-recurring resources. The total amount of non-
recurring resources included in the 1996-97 State budget is projected to be
$1.3 billion, or 3.9% of total General Fund receipts.
The State revised the cash-basis 1996-97 State Financial Plan on
January 14, 1997, in conjunction with the release of the Executive Budget
for the 1997-98 fiscal year. The 1996-97 General Fund Financial Plan
continues to be balanced. The Division of the Budget projects that, prior
to taking the actions described below, the General Fund Financial Plan would
have shown an operating surplus of approximately $1.3 billion. These
actions include implementing reduced personal income tax withholding to
reflect the impact of tax reduction actions which took effect on January 1,
1997. The Financial Plan assumes the use of $250 million for this purpose.
In addition, $943 million is projected to be used to pay tax refunds during
the 1996-97 fiscal year or reserved to pay refunds during the 1997-98 fiscal
year, which produces a benefit for the 1997-98 Financial Plan. Finally, $65
million is projected to be deposited into the Tax Stabilization Reserve Fund
("TSRF") (in addition to the required deposit of $15 million), increasing
the cash balance in that fund to $317 million by the end of 1996-97.
The projected surplus results primarily from growth in the underlying
forecast for projected receipts. As compared to the enacted budget,
revenues are expected to increase by more than $1 billion, while
disbursements are expected to fall by $228 million. These changes from
original Financial Plan projections reflect actual results through December
1996 as well as modified economic and social services caseload projections
for the balance of the fiscal year. The General Funds closing balance is
expected to be $358 million at the end of 1996-97.
The 1997-98 Financial Plan projects balance on a cash basis in the
General Fund. It reflects a continuing strategy of substantially reduced
State spending, including program restructurings, reductions in social
welfare spending, and efficiency and productivity initiatives. Total
General Fund receipts and transfers from other funds are projected to be
$32.88 billion, a decrease of $88 million from total receipts projected in
the current fiscal year. Total General Fund disbursements and transfers to
other funds are projected to be
$32.84 billion, a decrease of $56 million from spending totals projected for
the current fiscal year.
The State Financial Plan was based upon forecasts of national and State
economic activity. Economic forecasts have frequently failed to predict
accurately the timing and magnitude of changes in the national and the State
economies. Many uncertainties exist in forecasts of both the national and
State economies, including consumer attitudes toward spending, Federal
financial and monetary policies, the availability of credit and the
condition of the world economy, which could have an adverse effect on the
State. There can be no assurance that the State economy will not experience
worse-than-predicted results, with corresponding material and adverse
effects on the State's projections of receipts and disbursements.
There can be no assurance that the State will not face substantial
potential budget gaps in future years resulting from a significant disparity
between tax revenues projected from a lower recurring receipts base and the
spending required to maintain State programs at current levels. To address
any potential budgetary imbalance, the State may need to take significant
actions to align recurring receipts and disbursements in future fiscal
years.
On June 6, 1990, Moody's changed its ratings on all the State's
outstanding general obligation bonds from A1 to A. On March 26, 1990 and
January 13, 1992, S&P changed its ratings on all of the State's outstanding
general obligation bonds from AA- to A and from A to A-, respectively. In
February 1991, Moody's lowered its rating on the City's general obligation
bonds from A to Baa1 and in July 1995, S&P lowered its rating on such bonds
from A- to BBB+. Ratings reflect only the respective views of such
organizations, and their concerns about the financial condition of New York
State and City, the debt load of the State and City and any economic
uncertainties about the region. There is no assurance that a particular
rating will continue for any given period of time or that any such rating
will not be revised downward or withdrawn entirely if, in the judgment of
the agency originally establishing the rating, circumstances so warrant.
(1) The State, Agencies and Other Municipalities. During the mid-
1970s, some of the Agencies and municipalities (in particular, the City)
faced extraordinary financial difficulties, which affected the State's own
financial condition. These events, including a default on short-term notes
issued by the New York State Urban Development Corporation ("UDC") in
February 1975, which default was cured shortly thereafter, and a
continuation of the financial difficulties of the City, created substantial
investor resistance to securities issued by the State and by some of its
municipalities and Agencies. For a time, in late 1975 and early 1976, these
difficulties resulted in a virtual closing of public credit markets for
State and many State related securities.
In response to the financial problems confronting it, the State
developed and implemented programs for its 1977 fiscal year that included
the adoption of a balanced budget on a cash basis (a deficit of $92 million
that actually resulted was financed by issuing notes that were paid during
the first quarter of the State's 1978 fiscal year). In addition,
legislation was enacted limiting the occurrence of additional so-called
"moral obligation" and certain other Agency debt, which legislation does
not, however, apply to MAC debt.
GAAP-Basis Projected Results--1996-97 Fiscal Year. For the 1996-97 fiscal
year, the General Fund GAAP Financial Plan is projected to show total
revenues of $33.04 billion, total expenditures of $32.92 billion, and net
other financing sources and uses of $771 million. The surplus of $886
million primarily reflects an increase in projected revenues.
GAAP-Basis Results--1995-96 Fiscal Year. The State completed its 1995-96
fiscal year with a combined Governmental Funds operating surplus of $432
million, which included an operating surplus in the General Fund of $380
million, in the Capital Projects Funds of $276 million and in the Debt
Service Funds of $185 million. There was an operating deficit of $409
million in the Special Revenue Funds. The State's Combined Balance Sheet as
of March 31, 1996 showed an accumulated deficit in its combined Governmental
Funds of $1.23 billion, reflecting liabilities of $14.59 billion and assets
of $13.35 billion. This accumulated Governmental Funds deficit includes a
$2.93 billion accumulated deficit in the General Fund and an accumulated
deficit of $712 million in the Capital Projects Fund type as partially
offset by accumulated surpluses of $468 million and $1.94 billion in the
Special Revenue and Debt Service Fund types, respectively.
GAAP-Basis Results--1994-95 Fiscal Year. The State's Combined Balance Sheet
as of March 31, 1995 showed an accumulated deficit in its combined
Governmental Funds of $1.666 billion reflecting liabilities of $14.778
billion and assets of $13.112 billion. This accumulated Governmental Funds
deficit includes a $3.308 billion accumulated deficit in the General Fund,
as well as accumulated surpluses in the special Revenue and Debt Service
Fund types of $877 million and $1.753 billion, respectively, and a $988
million accumulated deficit in the Capital Projects Fund type.
The State completed its 1994-95 fiscal year with a combined
Governmental Funds operating deficit of $1.791 billion, which included
operating deficits in the General Fund of $1.426 billion, in the Capital
Projects Funds of $366 million, and in the Debt Service Funds of $38
million. There was an operating surplus in the Special Revenue Funds of $39
million.
GAAP-Basis Results--1993-94 Fiscal Year. The State reported a General Fund
operating surplus of $914 million for the 1993-94 fiscal year, as compared
to an operating surplus of $2.065 billion for the prior fiscal year. The
1993-94 fiscal year surplus reflects several major factors, including the
cash basis surplus recorded in 1993-94, the use of $671 million of the 1992-
93 surplus to fund operating expenses in 1993-94, net proceeds of $575
million in bonds issued by the New York Local Government Assistance
Corporation ("LGAC") and the accumulation of a $265 million balance in the
Contingency Reserve Fund ("CRF"). Revenues increased $543 million (1.7%)
over prior fiscal year revenues with the largest increase occurring in
personal income taxes. Expenditures increased $1.659 billion (5.6%) over
the prior fiscal year, with the largest increase occurring in State aid for
social services programs.
The Special Revenue Fund and Debt Service Fund ended 1993-94 with
operating surpluses of $149 million and $23 million, respectively. The
Capital Projects Fund ended with an operating deficit of $35 million.
GAAP-Basis Results--1992-93 Fiscal Year. The State completed its 1992-93
fiscal year with a GAAP-basis operating surplus of $2.065 billion in the
General Fund and an accumulated deficit of $2.551 billion. The Combined
Statement of Revenues, Expenditures and Changes in Fund Balances reported
total revenues of $31.085 billion, total expenditures of $29.337 billion,
and net other financing sources and uses of $317 million. The surplus
primarily reflects the 1992-93 cash-basis surplus and the net proceeds of
$881 million in bonds issued by LGAC.
The Special Revenue, Debt Service and Capital Projects Fund types ended
the 1992-93 fiscal year with GAAP-basis operating surpluses of $131 million,
$381 million, and $57 million, respectively.
State Financial Plan--Cash-Basis Results--General Fund. The General
Fund is the principal operating fund of the State and is used to account for
all financial transactions, except those required to be accounted for in
another fund. It is the State's largest fund and receives almost all State
taxes and other resources not dedicated to particular purposes. General
Fund moneys are also transferred to other funds, primarily to support
certain capital projects and debt service payments in other fund types.
In the State's 1996-97 fiscal year, the General Fund is expected to
account for approximately 47% of total Governmental Funds disbursements and
71% of total State Funds disbursements. The General Fund is projected to be
balanced on a cash basis for the 1996-97 fiscal year. Total receipts and
transfers from other funds are projected to be $33.17 billion, an increase
of $365 million from the prior fiscal year. Total General Fund
disbursements and transfers to other funds are projected to be $33.12
billion, an increase of $444 million from the total in the prior fiscal
year.
New York State's financial operations have improved during recent
fiscal years. During the period 1989-90 through 1991-92, the State incurred
General Fund operating deficits that were closed with receipts from the
issuance of tax and revenue anticipation notes ("TRANs"). First, the
national recession, and then the lingering economic slowdown in the New York
and regional economy, resulted in repeated shortfalls in receipts and three
budget deficits. During its last four fiscal years, however, the State
recorded balanced budgets on a cash basis, with positive fund balances as
described below.
The State ended its 1995-96 fiscal year on March 31, 1996 with a
General Fund cash surplus. The Division of the Budget reported that
revenues exceeded projections by $270 million, while spending for social
service programs was lower than forecast by $120 million and all other
spending was lower by $55 million. From the resulting benefit of $445
million, a $65 million voluntary deposit was made into the TSRF, and $380
million was used to reduce 1996-97 Financial Plan liabilities by
accelerating 1996-97 payments, deferring 1995-96 revenues, and making a
deposit to the tax refund reserve account.
The General Fund closing fund balance was $287 million, an increase of
$129 million from 1994-95 levels. The $129 million change in fund balance
is attributable to the $65 million voluntary deposit to the TSRF, a $15
million required deposit to the TSRF, a $40 million deposit to the CRF, and
a $9 million deposit to the Revenue Accumulation Fund. The closing fund
balance includes $237 million on deposit in the TSRF, to be used in the
event of any future General Fund deficit as provided under the State
Constitution and State Finance Law. In addition, $41 million is on deposit
in the CRF. The CRF was established in State fiscal year 1993-94 to assist
the State in financing the costs of extraordinary litigation. The remaining
$9 million reflects amounts on deposit in the Revenue Accumulation Fund.
This fund was created to hold certain tax receipts temporarily before their
deposit to other accounts. In addition, $678 million was on deposit in the
tax refund reserve account, of which $521 million was necessary to complete
the restructuring of the State's cash flow under the LGAC program.
General Fund receipts totaled $32.81 billion, a decrease of 1.1% from
1994-95 levels. This decrease reflects the impact of tax reductions enacted
and effective in both 1994 and 1995. General Fund disbursements totaled
$32.68 billion for the 1995-96 fiscal year, a decrease of 2.2% from 1994-95
levels.
The State ended its 1994-95 fiscal year with the General Fund in
balance. The $241 million decline in the fund balance reflects the planned
use of $264 million from the CRF, partially offset by the required deposit
of $23 million to the TSRF. In addition, $278 million was on deposit in the
tax refund reserve account, $250 million of which was deposited to continue
the process of restructuring the State's cash flow as part of the LGAC
program. The closing fund balance of $158 million reflects $157 million in
the TSRF and $1 million in the CRF.
General Fund receipts totaled $33.16 billion, an increase of 2.9% from
1993-94 levels. General Fund disbursements totaled $33.40 billion for the
1994-95 fiscal year, an increase of 4.7% from the previous fiscal year. The
increase in disbursements was primarily the result of one-time litigation
costs for the State, funded by the use of the CRF, offset by $188 million in
spending reductions initiated in January 1995 to avert a potential gap in
the 1994-95 State Financial Plan. These actions included savings from a
hiring freeze, halting the development of certain services, and the
suspension of non-essential capital projects.
The State ended its 1993-94 fiscal year with a General Fund cash
surplus, primarily the result of an improving national economy, State
employment growth, tax collections that exceeded earlier projections and
disbursements that were below expectations. A deposit of $268 million was
made to the CRF, with a withdrawal during the year of $3 million, and a
deposit of $67 million was made to the TSRF. These three transactions
resulted in the change in fund balance of $332 million. In addition, a
deposit of $1.14 billion was made to the tax refund reserve account, of
which $1.03 billion was available for budgetary purposes in the 1994-95
fiscal year. The remaining $114 million was redeposited in the tax refund
reserve account at the end of the State's 1994-95 fiscal year to continue
the process of restructuring the State's cash flow as part of the LGAC
program. The General Fund closing balance was $399 million, of which $265
million was on deposit in the CRF and $134 million in the TSRF. The CRF was
initially funded with a transfer of $100 million attributable to a positive
margin recorded in the 1992-93 fiscal year.
General Fund receipts totaled $32.23 billion, an increase of 2.6% from
1992-93 levels. General Fund disbursements totaled $31.90 billion for the
1993-94 fiscal year, 3.5% higher than the previous fiscal year. Receipts
were higher in part due to improved tax collections from renewed State
economic growth, although the State continued to lag behind the national
economic recovery. Disbursements were higher due in part to increased local
assistance costs for school aid and social services, accelerated payment of
certain Medicaid expenses, and the cost of an additional payroll for State
employees.
Cash-Basis Results--Other Governmental Funds. Activity in the three other
governmental funds has remained relatively stable over the last three fiscal
years, with Federally-funded programs comprising approximately two-thirds of
these funds. The most significant change in the structure of these funds
has been the redirection, beginning in the 1993-94 fiscal year, of a portion
of transportation-related revenues from the General Fund to two new
dedicated funds in the Special Revenue and Capital Projects Fund types.
These revenues are used to support the capital programs of the Department of
Transportation and the Metropolitan Transportation Authority ("MTA").
The Special Revenue Funds account for State receipts from specific
sources that are legally restricted in use to specified purposes and include
all moneys received from the Federal government. Revenues in Special
Revenue Funds in the State's 1995-96 fiscal year increased $1.45 billion
over the prior fiscal year as a result of increases in federal grants and
lottery revenues. Disbursements from Special Revenue Funds in the State's
1995-96 fiscal year increased $1.21 billion over the prior fiscal year as a
result of increased costs for social services programs and an increase in
the distribution of lottery proceeds to school districts.
The Capital Projects Funds are used to finance the acquisition and
construction of major capital facilities and to aid local government units
and Agencies in financing capital construction. Revenues in the Capital
Projects Funds in the State's 1995-96 fiscal year increased $260 million
primarily because a larger share of the petroleum business tax was shifted
from the General Fund to the Dedicated Highway and Bridge Trust Fund and by
an increase in federal grant revenues. Expenditures increased $194 million
because of increased expenditures for education and health and environmental
projects.
The Debt Service Funds serve to fulfill State debt service on long-term
general obligation State debt and other State lease/purchase and contractual
obligation financing commitments. Revenues in the Debt Service Funds in the
State's 1995-96 fiscal year increased $10 million because of increases in
both dedicated taxes and mental hygiene patient fees. Expenditures
increased $201 million.
State Borrowing Plan. The State anticipates that its capital programs
will be financed, in part, through borrowings by the State and public
authorities in the 1996-97 fiscal year. The State expects to issue $411
million in general obligation bonds (including $153.6 million for purposes
of redeeming outstanding BANs) and $154 million in general obligation
commercial paper. The Legislature has also authorized the issuance of up to
$101 million in COPs during the State's 1996-97 fiscal year for equipment
purchases. The projection of the State regarding its borrowings for the
1996-97 fiscal year may change if circumstances require.
State Agencies. The fiscal stability of the State is related, at least
in part, to the fiscal stability of its localities and various of its
Agencies. Various Agencies have issued bonds secured, in part, by
non-binding statutory provisions for State appropriations to maintain
various debt service reserve funds established for such bonds (commonly
referred to as "moral obligation" provisions).
At September 30, 1995, there were 17 Agencies that had outstanding debt
of $100 million or more. The aggregate outstanding debt, including
refunding bonds, of these 17 Agencies was $73.45 billion as of September 30,
1995. As of March 31, 1995, aggregate Agency debt outstanding as State-
supported debt was $27.9 billion and as State-related was $36.1 billion.
Debt service on the outstanding Agency obligations normally is paid out of
revenues generated by the Agencies' projects or programs, but in recent
years the State has provided special financial assistance, in some cases on
a recurring basis, to certain Agencies for operating and other expenses and
for debt service pursuant to moral obligation indebtedness provisions or
otherwise. Additional assistance is expected to continue to be required in
future years.
Several Agencies have experienced financial difficulties in the past.
Certain Agencies continue to experience financial difficulties requiring
financial assistance from the State. Failure of the State to appropriate
necessary amounts or to take other action to permit certain Agencies to meet
their obligations could result in a default by one or more of such Agencies.
If a default were to occur, it would likely have a significant effect on the
marketability of obligations of the State and the Agencies. These Agencies
are discussed below.
The New York State Housing Finance Agency ("HFA") provides financing
for multifamily housing, State University construction, hospital and nursing
home development, and other programs. In general, HFA depends upon
mortgagors in the housing programs it finances to generate sufficient funds
from rental income, subsidies and other payments to meet their respective
mortgage repayment obligations to HFA, which provide the principal source of
funds for the payment of debt service on HFA bonds, as well as to meet
operating and maintenance costs of the projects financed. From January 1,
1976 through March 31, 1987, the State was called upon to appropriate a
total of $162.8 million to make up deficiencies in the debt service reserve
funds of HFA pursuant to moral obligation provisions. The State has not
been called upon to make such payments since the 1986-87 fiscal year.
UDC has experienced, and expects to continue to experience, financial
difficulties with the housing programs it had undertaken prior to 1975,
because a substantial number of these housing program mortgagors are unable
to make full payments on their mortgage loans. Through a subsidiary, UDC is
currently attempting to increase its rate of collection by accelerating its
program of foreclosures and by entering into settlement agreements. UDC has
been, and will remain, dependent upon the State for appropriations to meet
its operating expenses. The State also has appropriated money to assist in
the curing of a default by UDC on notes which did not contain the State's
moral obligation provision.
The MTA oversees New York City's subway and bus lines by its
affiliates, the New York City Transit Authority and the Manhattan and Bronx
Surface Transit Operating Authority (collectively, the "TA"). Through MTA's
subsidiaries, the Long Island Rail Road Company, the Metro-North Commuter
Railroad Company and the Metropolitan Suburban Bus Authority, the MTA
operates certain commuter rail and bus lines in the New York metropolitan
area. In addition, the Staten Island Rapid Transit Authority, an MTA
subsidiary, operates a rapid transit line on Staten Island. Through its
affiliated agency, the Triborough Bridge and Tunnel Authority (the "TBTA"),
the MTA operates certain toll bridges and tunnels. Because fare revenues
are not sufficient to finance the mass transit portion of these operations,
the MTA has depended and will continue to depend for operating support upon
a system of State, local government and TBTA support and, to the extent
available, Federal operating assistance, including loans, grants and
subsidies. If current revenue projections are not realized and/or operating
expenses exceed current projections, the TA or commuter railroads may be
required to seek additional State assistance, raise fares or take other
actions.
Over the past several years the State has enacted several
taxes--including a surcharge on the profits of banks, insurance corporations
and general business corporations doing business in the 12-county region
(the "Metropolitan Transportation Region") served by the MTA and a special
.25% regional sales and use tax--that provide additional revenues for mass
transit purposes, including assistance to the MTA. In addition, since 1987,
State law has required that the proceeds of .25% mortgage recording tax paid
on certain mortgages in the Metropolitan Transportation Region be deposited
in a special MTA fund for operating or capital expenses. Further, in 1993,
the State dedicated a portion of certain additional State petroleum business
tax receipts to fund operating or capital assistance to the MTA. For the
1996-97 State fiscal year, total State assistance to the MTA is estimated at
approximately $1.09 billion.
In 1981, the State Legislature authorized procedures for the adoption,
approval and amendment of a five-year plan for the capital program designed
to upgrade the performance of the MTA's transportation systems and to
supplement, replace and rehabilitate facilities and equipment, and also
granted certain additional bonding authorization therefor.
State legislation accompanying the 1996-97 adopted State budget
authorized the MTA, TBTA and TA to issue an aggregate of $6.5 billion in
bonds to finance a portion of a new $11.98 billion MTA capital plan for the
1995 through 1999 calendar years (the "1995-99 Capital Program"), and
authorized the MTA to submit the 1995-99 Capital Program to the Capital
Program Review Board for approval. This plan supersedes the overlapping
portion of the MTA's 1992-96 Capital Program. This is the fourth capital
plan since the Legislature authorized procedures for the adoption, approval
and amendment of MTA capital programs and is designed to upgrade the
performance of the MTA's transportation systems by investing in new rolling
stock, maintaining replacement schedules for existing assets and bringing
the MTA system into a state of good repair. The 1995-99 Capital Program
assumes the issuance of an estimated $5.1 billion in bonds under this $6.5
billion aggregate bonding authority. The remainder of the plan is projected
to be financed through assistance from the State, the Federal government,
and the City of New York, and from various other revenues generated from
actions taken by the MTA.
There can be no assurance that such governmental actions will be taken,
that sources currently identified will not be decreased or eliminated, or
that the 1995-1999 Capital Program will not be delayed or reduced. If the
MTA capital program is delayed or reduced because of funding shortfalls or
other factors, ridership and fare revenues may decline, which could, among
other things, impair the MTA's ability to meet its operating expenses
without additional State assistance.
The cities, towns, villages and school districts of the State are
political subdivisions of the State with the powers granted by the State
Constitution and statutes. As the sovereign, the State retains broad powers
and responsibilities with respect to the government, finances and welfare of
these political subdivisions, especially in education and social services.
In recent years the State has been called upon to provide added financial
assistance to certain localities.
Other Localities. Certain localities in addition to the City could
have financial problems leading to requests for additional State assistance
during the last several State fiscal years. The potential impact on the
State of such actions by localities is not included in the projections of
the State receipts and disbursements in the State's 1996-97 fiscal year.
Fiscal difficulties experienced by the City of Yonkers resulted in the
re-establishment of the Financial Control Board for the City of Yonkers by
the State in 1984. That Board is charged with oversight of the fiscal
affairs of Yonkers. Future actions taken by the State to assist Yonkers
could result in increased State expenditures for extraordinary local
assistance.
Beginning in 1990, the City of Troy experienced a series of budgetary
deficits that resulted in the establishment of a Supervisory Board for the
City of Troy in 1994. The Supervisory Board's powers were increased in
1995, when Troy MAC was created to help Troy avoid default on certain
obligations. The legislation creating Troy MAC prohibits the City of Troy
from seeking federal bankruptcy protection while Troy MAC bonds are
outstanding.
Seventeen municipalities received extraordinary assistance during the
1996 legislative session through $50 million in special appropriations
targeted for distressed cities.
Municipalities and school districts have engaged in substantial
short-term and long-term borrowings. In 1994, the total indebtedness of all
localities in the State, other than the City, was approximately $17.7
billion. A small portion (approximately $82.9 million) of this indebtedness
represented borrowing to finance budgetary deficits and was issued pursuant
to enabling State legislation. State law requires the Comptroller to review
and make recommendations concerning the budgets of those local government
units other than the City authorized by State law to issue debt to finance
deficits during the period that such deficit financing is outstanding.
Seventeen localities had outstanding indebtedness for deficit financing at
the close of their fiscal year ending in 1994.
From time to time, Federal expenditure reductions could reduce, or in
some cases eliminate, Federal funding of some local programs and accordingly
might impose substantial increased expenditure requirements on affected
localities to increase local revenues to sustain those expenditures. If the
State, the City or any of the Agencies were to suffer serious financial
difficulties jeopardizing their respective access to the public credit
markets, the marketability of notes and bonds issued by localities within
the State could be adversely affected. Localities also face anticipated and
potential problems resulting from certain pending litigation, judicial
decisions and long-range economic trends. The longer-range, potential
problems of declining city population, increasing expenditures and other
economic trends could adversely affect localities and require increasing
State assistance in the future.
Certain litigation pending against the State or its officers or
employees could have a substantial or long-term adverse effect on State
finances. Among the more significant of these litigations are those that
involve: (i) the validity and fairness of agreements and treaties by which
various Indian tribes transferred title to the State of approximately six
million acres of land in central New York; (ii) certain aspects of the
State's Medicaid rates and regulations, including reimbursements to
providers of mandatory and optional Medicaid services; (iii) contamination
in the Love Canal area of Niagara Falls; (iv) a challenge to the State's
practice of reimbursing certain Office of Mental Health patient-care
expenses with clients' Social Security benefits; (v) a challenge to the
methods by which the State reimburses localities for the administrative
costs of food stamp programs; (vi) a challenge to the State's possession of
certain funds taken pursuant to the State's Abandoned Property law; (vii)
alleged responsibility of State officials to assist in remedying racial
segregation in the City of Yonkers; (viii) an action, in which the State is
a third party defendant, for injunctive or other appropriate relief,
concerning liability for the maintenance of stone groins constructed along
certain areas of Long Island's shoreline; (ix) actions challenging the
constitutionality of legislation enacted during the 1990 legislative session
which changed the actuarial funding methods for determining contributions to
State employee retirement systems; (x) an action against State and City
officials alleging that the present level of shelter allowance for public
assistance recipients is inadequate under statutory standards to maintain
proper housing; (xi) an action challenging legislation enacted in 1990 which
had the effect of deferring certain employer contributions to the State
Teachers' Retirement System and reducing State aid to school districts by a
like amount; (xii) a challenge to the constitutionality of financing
programs of the Thruway Authority authorized by Chapters 166 and 410 of the
Laws of 1991 (described below in this Part); (xiii) a challenge to the
constitutionality of financing programs of the Metropolitan Transportation
Authority and the Thruway Authority authorized by Chapter 56 of the Laws of
1993 (described below in this Part); (xiv) challenges to the delay by the
State Department of Social Services in making two one-week Medicaid payments
to the service providers; (xv) challenges by commercial insurers, employee
welfare benefit plans, and health maintenance organizations to provisions of
Section 2807-c of the Public Health Law which impose 13%, 11% and 9%
surcharges on inpatient hospital bills and a bad debt and charity care
allowance on all hospital bills paid by such entities; (xvi) challenges to
the promulgation of the State's proposed procedure to determine the
eligibility for and nature of home care services for Medicaid recipients;
(xvii) a challenge to State implementation of a program which reduces
Medicaid benefits to certain home-relief recipients; and (xviii) challenges
to the rationality and retroactive application of State regulations
recelebrating nursing home Medicaid rates.
(2) New York City. In the mid-1970s, the City had large accumulated
past deficits and until recently was not able to generate sufficient tax and
other ongoing revenues to cover expenses in each fiscal year. However, the
City has achieved balanced operating results for each of its fiscal years
since 1981 as reported in accordance with the then-applicable GAAP
standards. The City's ability to maintain balanced operating results in
future years is subject to numerous contingencies and future developments.
In 1975, the City became unable to market its securities and entered a
period of extraordinary financial difficulties. In response to this crisis,
the State created MAC to provide financing assistance to the City and also
enacted the New York State Financial Emergency Act for the City of New York
(the "Emergency Act") which, among other things, created the Financial
Control Board (the "Control Board") to oversee the City's financial affairs
and facilitate its return to the public credit markets. The State also
established the Office of the State Deputy Comptroller ("OSDC") to assist
the Control Board in exercising its powers and responsibilities. On June
30, 1986, the Control Board's powers of approval over the City Financial
Plan were suspended pursuant to the Emergency Act. However, the Control
Board, MAC and OSDC continue to exercise various monitoring functions
relating to the City's financial condition. The City prepares and operates
under a four-year financial plan which is submitted annually to the Control
Board for review and which the City periodically updates.
The City's independently audited operating results for each of its
fiscal years from 1981 through 1995 show a General Fund surplus reported in
accordance with GAAP. The City has eliminated the cumulative deficit in its
net General Fund position.
During the 1990 and 1991 fiscal years, as a result of a slowing
economy, the City has experienced significant shortfalls in almost all of
its major tax sources and increases in social services costs, and was
required to take actions to close substantial budget gaps in order to
maintain balanced budgets in accordance with the Financial Plan.
According to a recent OSDC economic report, the City's economy was slow
to recover from the recession and was expected to have experienced a weak
employment situation, and moderate wage and income growth, during the 1995-
96 period. Also, Financial Plan reports of OSDC, the Control Board, and the
City Comptroller have variously indicated that many of the City's balanced
budgets have been accomplished, in part, through the use of non-recurring
resource, tax and fee increases, personnel reductions and additional State
assistance; that the City has not yet brought its long-term expenditures in
line with recurring revenues; that the City's proposed gap-closing programs,
if implemented, would narrow future budget gaps; that these programs tend to
rely heavily on actions outside the direct control of the City; and that the
City is therefore likely to continue to face futures projected budget gaps
requiring the City to reduce expenditures and/or increase revenues.
According to the most recent staff reports of OSDC, the Control Board and
the City Comptroller during the four-year period covered by the current
Financial Plan, the City is relying on obtaining substantial resources from
initiatives needing approval and cooperation of its municipal labor unions,
Covered Organizations, and City Council, as well as the State and Federal
governments, among others, and there can be no assurance that such approval
can be obtained.
The City requires certain amounts of financing for seasonal and capital
spending purposes. The City issued $1.75 billion of notes for seasonal
financing purposes during the 1994 fiscal year. The City's capital
financing program projects long-term financing requirements of approximately
$17 billion for the City's fiscal years 1995 through 1998 for the
construction and rehabilitation of the City's infrastructure and other fixed
assets. The major capital requirement include expenditures for the City's
water supply system, and waste disposal systems, roads, bridges, mass
transit, schools and housing. In addition, the City and the Municipal Water
Finance Authority issued about $1.8 billion in refunding bonds in the 1994
fiscal year.
State Economic Trends. The State historically has been one of the
wealthiest states in the nation. For decades, however, the State has grown
more slowly than the nation as a whole, gradually eroding its relative
economic position. Statewide, urban centers have experienced significant
changes involving migration of the more affluent to the suburbs and an
influx of generally less affluent residents. Regionally, the older
Northeast cities have suffered because of the relative success that the
South and the West have had in attracting people and business. The City has
also had to face greater competition as other major cities have developed
financial and business capabilities which make them less dependent on the
specialized services traditionally available almost exclusively in the City.
During the 1982-83 recession, overall economic activity in the State
declined less than that of the nation as a whole. However, in the calendar
years 1984 through 1991, the State's rate of economic expansion was somewhat
slower than that of the nation. In the 1990-91 recession, the economy of
the State, and that of the rest of the Northeast, was more heavily damaged
than that of the nation as a whole and has been slower to recover. The
total employment growth rate in the State has been below the national
average since 1984. The unemployment rate in the State dipped below the
national rate in the second half of 1981 and remained lower until 1991;
since then, it has been higher. According to data published by the U.S.
Bureau of Economic Analysis, during the past ten years, total personal
income in the State rose slightly faster than the national average only from
1986 through 1988.
APPENDIX E
Set forth below, as to each share Class of each Fund, as applicable,
are those shareholders of record known by the Fund to own 5% or more of a
Class of shares of the Fund as of November 7, 1997.
Government Money Fund
Class A: Compass Bank, Attn: Sharon Weaver, P.O. Box 10566, Birmingham, AL
35296 - owned of record 5.1%
Class B: Robert W. Baird & Co., Omnibus Account for the Exclusive Benefit
of Customers, P.O. Box 672, Milwaukee, WI 53201-0672 - owned of
record 59.2%;
First Albany Corporation, P.O. Box 22024, Albany, NY 12201-2024 -
owned of record 23.3%;
NationsBanc Montgomery Securities, Money Market Funds
Omnibus, 600 Montgomery Street, Suite 4, San Francisco, CA 9411-
2702 - owned of record 6.3%;
George K. Baum & Company, Attn: Ron Frazier, 120 West 12th Street,
Kansas City, MO 64105-1917 - owned of record 5.4%.
Money Fund
Class A: NationsBanc Montgomery Securities, Money Market Funds Omnibus, 600
Montgomery Street, Suite 4, San Francisco, CA 9411-2702 - owned of
record 13.8%
Class B: Robert W. Baird & Co., Omnibus Account for the Exclusive Benefit
of Customers, P.O. Box 672, Milwaukee, WI 53201-0672 - owned of
record 48.6%;
First Albany Corporation, P.O. Box 22024, Albany, NY 12201-2024 -
owned of record 34%;
George K. Baum & Company, Attn: Ron Frazier, 120 West 12th Street,
Kansas City, MO 64105-1917 - owned of record 7.1%.
California Municipal Fund
Class A: NationsBanc Montgomery Securities, Money Market Funds Omnibus, 600
Montgomery Street, Suite 4, San Francisco, CA 9411-2702 - owned of
record 15%
Class B: Robert W. Baird & Co., Omnibus Account for the Exclusive Benefit
of Customers, P.O. Box 672, Milwaukee, WI 53201-0672 - owned of
record 45.9%;
NationsBanc Montgomery Securities, Money Market Funds
Omnibus, 600 Montgomery Street, Suite 4, San Francisco, CA 9411-
2702 - owned of record 43.6%;
First Albany Corporation, P.O. Box 22024, Albany, NY 12201-2024 -
owned of record 10.5%
National Municipal Fund
Class A: NationsBanc Montgomery Securities, Money Market Funds Omnibus, 600
Montgomery Street, Suite 4, San Francisco, CA 9411-2702 - owned of
record 22.3%
Class B: Robert W. Baird & Co., Omnibus Account for the Exclusive Benefit
of Customers, P.O. Box 672, Milwaukee, WI 53201-0672 - owned of
record 80.8%;
George K. Baum & Company, Attn: Ron Frazier, 120 West 12th Street,
Kansas City, MO 64105-1917 - owned of record 11.2%.;
First Albany Corporation, P.O. Box 22024, Albany, NY 12201-2024 -
owned of record 5.5%
New York Municipal Fund
Class A:
Class B: First Albany Corporation, P.O. Box 22024, Albany, NY 12201-2024 -
owned of record 90.4%;
Robert W. Baird & Co., Omnibus Account for the Exclusive Benefit of
Customers, P.O. Box 672, Milwaukee, WI 53201-0672 -
owned of record 6.1%
General Government Securities Money Market Fund, Inc.
PART C. OTHER INFORMATION
_________________________
Item 24. Financial Statements and Exhibits. - List
_______ _________________________________________
(a) Financial Statements:
Included in Part A of the Registration Statement:
Condensed Financial Information for the ten years ended
January 31, 1997, and for the six months ended July 31,
1997 for Class A and for the period from March 31, 1995
(commencement of initial offering)
through January 31, 1996 and for the one year ended
January 31, 1997, and for the six months ended July 31,
for Class B.
Included in Part B of the Registration Statement:
Statement of Investments--January 31, 1997, and for the
six months ended July 31, 1997.*
Statement of Assets and Liabilities--January 31, 1997,
and for the six months ended July 31, 1997.*
Statement of Operations--year ended
January 31, 1997, and for the six months ended July 31,
1997.*
Statement of changes in Net Assets--for each of the
years ended January 31, 1996 and 1997, and for the six
months ended July 31, 1997.*
Notes to Financial Statements.*
Report of Ernst & Young LLP, Independent Auditors, dated
March 3, 1997.*
___________
* Items are incorporated by reference to the Fund's Annual and Semi-Annual
Reports on Forms N-30D, filed on March 26, 1997 and September 30, 1997,
respectively.
All Schedules and other financial statement information, for which provision
is made in the applicable accounting regulations of the Securities and
Exchange Commission, are either omitted because they are not required under
the related instructions, they are inapplicable, or the required information
is presented in the financial statements or notes thereto which are included
in Part B of the Registration Statement.
Item 24. Financial Statements and Exhibits. - List (continued)
_______ _____________________________________________________
(b) Exhibits:
(1)(a) Registrant's Articles of Incorporation are incorporated by
reference to Exhibit (1)(a) of Post-Effective Amendment No. 18 to
the Registration Statement on Form N-1A, filed on March 29, 1995.
(1)(b) Registrant's Articles of Amendment are incorporated by reference to
Exhibit (1)(b) of Post-Effective Amendment No. 18 to the
Registration Statement on Form N-1A, filed on March 29, 1995.
(1)(c) Registrant's Articles Supplementary are incorporated by reference
to Exhibit (1)(c) of Post-Effective Amendment No. 18 to the
Registration Statement on Form N-1A, filed on March 29, 1995.
(2) Registrant's By-Laws, as amended are incorporated by
reference to Exhibit (2) of Post-Effective Amendment No. 18 to the
Registration Statement on Form N-1A, filed on March 29, 1995.
(5) Management Agreement is incorporated by reference to Exhibit (5) of
Post-Effective Amendment No. 18 to the Registration Statement on
Form N-1A, filed on March 29, 1995.
(6)(a) Distribution Agreement is incorporated by reference to Exhibit
(6)(a) of Post-Effective Amendment No. 18 to the Registration
Statement on Form N-1A, filed on March 29, 1995.
(6)(b) Forms of Service Agreement are incorporated by reference to Exhibit
(6)(b) of Post-Effective Amendment No. 18 to the Registration
Statement on Form N-1A, filed on March 29, 1995.
(8)(a) Amended and Restated Custody Agreement is incorporated
by reference to Exhibit (8)(a) of Post-Effective Amendment No. 18
to the Registration Statement on Form N-1A, filed on March 29,
1995.
(9)(a) Shareholder Services Plan (Class A) is incorporated by reference to
Exhibit 8(b) of Post-Effective Amendment No. 17 to
the Registration Statement on Form N-1A, filed on January 30,
1995.
(9)(b) Shareholder Services Plan (Class B) is incorporated by reference to
Exhibit 9(b) of Post-Effective Amendment No. 17 to
the Registration Statement on Form N-1A, filed on January 30,
1995.
(10) Opinion and Consent of Registrant's counsel is incorporated
by reference to Exhibit (10) of Post-Effective Amendment No. 18 to
the Registration Statement on Form N-1A, filed on March 29, 1995.
(11) Consent of Independent Auditors.
Item 24. Financial Statements and Exhibits. - List (continued)
_______ _____________________________________________________
(15)(a) Service Plan (Class A) is incorporated by reference to Exhibit
(15)(a) of Post-Effective Amendment No. 17 to the Registration
Statement on Form N-1A, filed on January 30, 1995.
(15)(b) Distribution Plan (Class B) is incorporated by reference to Exhibit
(15)(b) of Post-Effective Amendment No. 17 to the Registration
Statement on Form N-1A, filed on January 30, 1995.
(16) Schedules of Computation of Performance Data is incorporated by
reference to Exhibit (16) of Post-Effective Amendment No. 16 to the
Registration Statement on Form N-1A, filed on May 18, 1994.
(17) Financial Data Schedule.
(18) Rule 18f-3 is incorporated by reference to Exhibit (18) of Post-
Effective Amendment No. 20 to the Registration Statement on Form N-
1A, filed on February 20, 1996.
Item 24. Financial Statements and Exhibits. - List (continued)
_______ _____________________________________________________
Other Exhibits
______________
(a) Powers of Attorney of the Directors and Officers are
incorporated by reference to Other Exhibits (a) of Post-
Effective Amendment No. 22 to the Registration Statement
on Form N-1A, filed on May 30, 1997.
(b) Certificate of Secretary is incorporated by reference to
Other Exhibits (b) of Post-Effective Amendment No. 22 to
the Registration Statement on Form N-1A, filed on May 30,
1997.
Item 25. Persons Controlled by or under Common Control with Registrant.
_______ ______________________________________________________________
Not Applicable
Item 26. Number of Holders of Securities.
_______ ________________________________
(1) (2)
Number of Record
Title of Class Holders as of November 7, 1997
______________ __________________________
Common Stock
(Par value $.01)
Class A 3,344
Class B 40
Item 27. Indemnification
_______ _______________
Reference is made to Article SEVENTH of the Registrant's Articles of
Incorporation which is incorporated by reference to Exhibit (1)(a) to Post-
Effective Amendment No. 18 to the Fund Registration Statement on Form 1-1A,
filed March 29, 1995, and to Section 2-418 of the Maryland General
Corporation Law. The application of these provisions is limited by Article
VIII of the Registrant's By-Laws, as amended, which are incorporated by
reference to Exhibit (2) to Post-Effective Amendment No. 18 to the Fund's
Registration Statement on Form N-1A filed March 29, 1995 and by the
following undertaking set forth in the rules promulgated by the Securities
and Exchange Commission:
Insofar as indemnification for liabilities
arising under the Securities Act of 1933 may be
permitted to, directors, officers and controlling
persons of the registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and
Exchange Commission such indemnification is against
public policy as expressed in such Act and is,
therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other
than the payment by the registrant of expenses
incurred or paid by a director, officer or
controlling person of the registrant in the
successful defense of any action, suit or
proceeding) is asserted by such director, officer or
controlling person in connection with the securities
being registered, the registrant will, unless in the
opinion of its counsel the matter has been settled
by controlling precedent, submit to a court of
appropriate jurisdiction the questions whether such
indemnification by it is against public policy as
expressed in such Act and will be governed by the
final adjudication of such issue.
Reference is also made to the Distribution Agreement which is
incorporated by reference to Exhibit (6)(a) of Post Effective
Amendment No. 18 to the Registration Statement on Form N-1A,
filed on March 29, 1995.
Item 28. Business and Other Connections of Investment Adviser.
_______ ____________________________________________________
The Dreyfus Corporation ("Dreyfus") and subsidiary companies
comprise a financial service organization whose business
consists primarily of providing investment management services
as the investment adviser and manager for sponsored investment
companies registered under the Investment Company Act of 1940
and as an investment adviser to institutional and individual
accounts. Dreyfus also serves as sub-investment adviser to
and/or administrator of other investment companies. Dreyfus
Service Corporation, a wholly-owned subsidiary of Dreyfus,
serves primarily as a registered broker-dealer of shares of
investment companies sponsored by Dreyfus and of other
investment companies for which Dreyfus acts as investment
adviser, sub-investment adviser or administrator. Dreyfus
Management, Inc., another wholly-owned subsidiary, provides
investment management services to various pension plans,
institutions and individuals.
Item 28. Business and Other Connections of Investment Adviser (continued)
________ ________________________________________________________________
Officers and Directors of Investment Adviser
____________________________________________
Name and Position
with Dreyfus Other Businesses
_________________ ________________
MANDELL L. BERMAN Real estate consultant and private investor
Director 29100 Northwestern Highway, Suite 370
Southfield, Michigan 48034;
Past Chairman of the Board of Trustees:
Skillman Foundation;
Member of The Board of Vintners Intl.
BURTON C. BORGELT Chairman Emeritus of the Board and
Director Past Chairman, Chief Executive Officer and
Director:
Dentsply International, Inc.
570 West College Avenue
York, Pennsylvania 17405;
Director:
DeVlieg-Bullard, Inc.
1 Gorham Island
Westport, Connecticut 06880
Mellon Bank Corporation***;
Mellon Bank, N.A.***
FRANK V. CAHOUET Chairman of the Board, President and
Director Chief Executive Officer:
Mellon Bank Corporation***;
Mellon Bank, N.A.***;
Director:
Avery Dennison Corporation
150 North Orange Grove Boulevard
Pasadena, California 91103;
Saint-Gobain Corporation
750 East Swedesford Road
Valley Forge, Pennsylvania 19482;
Teledyne, Inc.
1901 Avenue of the Stars
Los Angeles, California 90067
W. KEITH SMITH Chairman and Chief Executive Officer:
Chairman of the Board The Boston Company****;
Vice Chairman of the Board:
Mellon Bank Corporation***;
Mellon Bank, N.A.***;
Director:
Dentsply International, Inc.
570 West College Avenue
York, Pennsylvania 17405
CHRISTOPHER M. CONDRON Vice Chairman:
President, Chief Mellon Bank Corporation***;
Executive Officer, The Boston Company****;
Chief Operating Deputy Director:
Officer and a Mellon Trust***;
Director Chief Executive Officer:
The Boston Company Asset Management,
Inc.****;
President:
Boston Safe Deposit and Trust Company****
STEPHEN E. CANTER Director:
Vice Chairman and The Dreyfus Trust Company++;
Chief Investment Officer, Formerly, Chairman and Chief Executive
Officer:
and a Director Kleinwort Benson Investment Management
Americas Inc.*
LAWRENCE S. KASH Chairman, President and Chief
Vice Chairman-Distribution Executive Officer:
and a Director The Boston Company Advisors, Inc.
53 State Street
Exchange Place
Boston, Massachusetts 02109;
Executive Vice President and Director:
Dreyfus Service Organization, Inc.**;
Director:
Dreyfus America Fund+++;
The Dreyfus Consumer Credit Corporation*;
The Dreyfus Trust Company++;
Dreyfus Service Corporation*;
World Balanced Fund++++;
President:
The Boston Company****;
Laurel Capital Advisors***;
Boston Group Holdings, Inc.;
Executive Vice President:
Mellon Bank, N.A.***;
Boston Safe Deposit and Trust
Company****
RICHARD F. SYRON Chairman of the Board and
Director Chief Executive Officer:
American Stock Exchange
86 Trinity Place
New York, New York 10006;
Director:
John Hancock Mutual Life Insurance Company
John Hancock Place, Box 111
Boston, Massachusetts 02117;
Thermo Electron Corporation
81 Wyman Street, Box 9046
Waltham, Massachusetts 02254-9046;
American Business Conference
1730 K Street, NW, Suite 120
Washington, D.C. 20006;
Trustee:
Boston College - Board of Trustees
140 Commonwealth Ave.
Chestnut Hill, Massachusetts 02167-3934
WILLIAM T. SANDALLS, JR. Director:
Senior Vice President and Dreyfus Partnership Management, Inc.*;
Chief Financial Officer Seven Six Seven Agency, Inc.*;
President and Director:
Lion Management, Inc.*;
Executive Vice President and Director:
Dreyfus Service Organization, Inc.*;
Vice President, Chief Financial Officer and
Director:
Dreyfus America Fund+++;
World Balanced Fund++++;
Vice President and Director:
The Dreyfus Consumer Credit Corporation*;
The Truepenny Corporation*;
Treasurer, Financial Officer and Director:
The Dreyfus Trust Company++;
Treasurer and Director:
Dreyfus Management, Inc.*;
Dreyfus Service Corporation*;
Formerly, President and Director:
Sandalls & Co., Inc.
MARK N. JACOBS Vice President, Secretary and Director:
Vice President, Lion Management, Inc.*;
General Counsel Secretary:
and Secretary The Dreyfus Consumer Credit Corporation*;
Dreyfus Management, Inc.*;
Assistant Secretary:
Dreyfus Service Organization, Inc.**;
Major Trading Corporation*;
The Truepenny Corporation*
PATRICE M. KOZLOWSKI None
Vice President-
Corporate Communications
MARY BETH LEIBIG None
Vice President-
Human Resources
JEFFREY N. NACHMAN President and Director:
Vice President-Mutual Fund Dreyfus Transfer, Inc.
Accounting One American Express Plaza
Providence, Rhode Island 02903
ANDREW S. WASSER Vice President:
Vice President-Information Mellon Bank Corporation***
Services
WILLIAM V. HEALEY President:
Assistant Secretary The Truepenny Corporation*;
Vice President and Director:
The Dreyfus Consumer Credit Corporation*;
Secretary and Director:
Dreyfus Partnership Management Inc.*;
Director:
The Dreyfus Trust Company++;
Assistant Secretary:
Dreyfus Service Corporation*;
Dreyfus Investment Advisors, Inc.*;
Assistant Clerk:
Dreyfus Insurance Agency of Massachusetts,
Inc.+++++
______________________________________
* The address of the business so indicated is 200 Park Avenue, New
York, New York 10166.
** The address of the business so indicated is 131 Second Street,
Lewes, Delaware 19958.
*** The address of the business so indicated is One Mellon Bank Center,
Pittsburgh, Pennsylvania 15258.
**** The address of the business so indicated is One Boston Place,
Boston, Massachusetts 02108.
+ The address of the business so indicated is Atrium Building,
80 Route 4 East, Paramus, New Jersey 07652.
++ The address of the business so indicated is 144 Glenn Curtiss
Boulevard, Uniondale, New York 11556-0144.
+++ The address of the business so indicated is 69, Route `d'Esch, L-
1470 Luxembourg.
++++ The address of the business so indicated is 69, Route `d'Esch, L-
2953 Luxembourg.
+++++ The address of the business so indicated is 53 State Street, Boston,
Massachusetts 02103.
Item 29. Principal Underwriters
________ ______________________
(a) Other investment companies for which Registrant's principal
underwriter (exclusive distributor) acts as principal underwriter or
exclusive distributor:
1) Comstock Partners Funds, Inc.
2) Dreyfus A Bonds Plus, Inc.
3) Dreyfus Appreciation Fund, Inc.
4) Dreyfus Asset Allocation Fund, Inc.
5) Dreyfus Balanced Fund, Inc.
6) Dreyfus BASIC GNMA Fund
7) Dreyfus BASIC Money Market Fund, Inc.
8) Dreyfus BASIC Municipal Fund, Inc.
9) Dreyfus BASIC U.S. Government Money Market Fund
10) Dreyfus California Intermediate Municipal Bond Fund
11) Dreyfus California Tax Exempt Bond Fund, Inc.
12) Dreyfus California Tax Exempt Money Market Fund
13) Dreyfus Cash Management
14) Dreyfus Cash Management Plus, Inc.
15) Dreyfus Connecticut Intermediate Municipal Bond Fund
16) Dreyfus Connecticut Municipal Money Market Fund, Inc.
17) Dreyfus Florida Intermediate Municipal Bond Fund
18) Dreyfus Florida Municipal Money Market Fund
19) The Dreyfus Fund Incorporated
20) Dreyfus Global Bond Fund, Inc.
21) Dreyfus Global Growth Fund
22) Dreyfus GNMA Fund, Inc.
23) Dreyfus Government Cash Management
24) Dreyfus Growth and Income Fund, Inc.
25) Dreyfus Growth and Value Funds, Inc.
26) Dreyfus Growth Opportunity Fund, Inc.
27) Dreyfus Income Funds
28) Dreyfus Institutional Money Market Fund
29) Dreyfus Institutional Short Term Treasury Fund
30) Dreyfus Insured Municipal Bond Fund, Inc.
31) Dreyfus Intermediate Municipal Bond Fund, Inc.
32) Dreyfus International Funds, Inc.
33) Dreyfus Investment Grade Bond Funds, Inc.
34) The Dreyfus/Laurel Funds, Inc.
35) The Dreyfus/Laurel Funds Trust
36) The Dreyfus/Laurel Tax-Free Municipal Funds
37) Dreyfus LifeTime Portfolios, Inc.
38) Dreyfus Liquid Assets, Inc.
39) Dreyfus Massachusetts Intermediate Municipal Bond Fund
40) Dreyfus Massachusetts Municipal Money Market Fund
41) Dreyfus Massachusetts Tax Exempt Bond Fund
42) Dreyfus MidCap Index Fund
43) Dreyfus Money Market Instruments, Inc.
44) Dreyfus Municipal Bond Fund, Inc.
45) Dreyfus Municipal Cash Management Plus
46) Dreyfus Municipal Money Market Fund, Inc.
47) Dreyfus New Jersey Intermediate Municipal Bond Fund
48) Dreyfus New Jersey Municipal Bond Fund, Inc.
49) Dreyfus New Jersey Municipal Money Market Fund, Inc.
50) Dreyfus New Leaders Fund, Inc.
51) Dreyfus New York Insured Tax Exempt Bond Fund
52) Dreyfus New York Municipal Cash Management
53) Dreyfus New York Tax Exempt Bond Fund, Inc.
54) Dreyfus New York Tax Exempt Intermediate Bond Fund
55) Dreyfus New York Tax Exempt Money Market Fund
56) Dreyfus 100% U.S. Treasury Intermediate Term Fund
57) Dreyfus 100% U.S. Treasury Long Term Fund
58) Dreyfus 100% U.S. Treasury Money Market Fund
59) Dreyfus 100% U.S. Treasury Short Term Fund
60) Dreyfus Pennsylvania Intermediate Municipal Bond Fund
61) Dreyfus Pennsylvania Municipal Money Market Fund
62) Dreyfus Premier California Municipal Bond Fund
63) Dreyfus Premier Equity Funds, Inc.
64) Dreyfus Premier International Growth Fund, Inc.
65) Dreyfus Premier GNMA Fund
66) Dreyfus Premier Worldwide Growth Fund, Inc.
67) Dreyfus Premier Insured Municipal Bond Fund
68) Dreyfus Premier Municipal Bond Fund
69) Dreyfus Premier New York Municipal Bond Fund
70) Dreyfus Premier State Municipal Bond Fund
71) Dreyfus Premier Value Fund
72) Dreyfus S&P 500 Index Fund
73) Dreyfus Short-Intermediate Government Fund
74) Dreyfus Short-Intermediate Municipal Bond Fund
75) The Dreyfus Socially Responsible Growth Fund, Inc.
76) Dreyfus Stock Index Fund, Inc.
77) Dreyfus Tax Exempt Cash Management
78) The Dreyfus Third Century Fund, Inc.
79) Dreyfus Treasury Cash Management
80) Dreyfus Treasury Prime Cash Management
81) Dreyfus Variable Investment Fund
82) Dreyfus Worldwide Dollar Money Market Fund, Inc.
83) General California Municipal Bond Fund, Inc.
84) General California Municipal Money Market Fund
85) General Government Securities Money Market Fund, Inc.
86) General Money Market Fund, Inc.
87) General Municipal Bond Fund, Inc.
88) General Municipal Money Market Fund, Inc.
89) General New York Municipal Bond Fund, Inc.
90) General New York Municipal Money Market Fund
(b)
Positions and
Name and principal Positions and offices with offices with
business address the Distributor Registrant
__________________ ___________________________ _____________
Marie E. Connolly+ Director, President, Chief President and
Executive Officer and Compliance Treasurer
Officer
Joseph F. Tower, III+ Director, Senior Vice President, Vice President
Tresurer and Chief Financial Officer and Assistant
Treasurer
Richard W. Ingram Executive Vice President Vice President
and Assistant
Treasurer
Elizabeth A. Keeley++ Vice President Vice President
and Assistant
Secretary
Mary A. Nelson+ Vice President Vice President
and Assistant
Treasurer
Paul Prescott+ Vice President None
Jean M. O'Leary+ Assistant Secretary and None
Assistant Clerk
John W. Gomez+ Director None
William J. Nutt+ Director None
________________________________
+ Principal business address is 60 State Street, Boston, Massachusetts
02109.
++ Principal business address is 200 Park Avenue, New York, New York
10166.
Item 30. Location of Accounts and Records
________________________________
1. First Data Investor Services Group, Inc.,
a subsidiary of First Data Corporation
P.O. Box 9671
Providence, Rhode Island 02940-9671
2. The Bank of New York
90 Washington Street
New York, New York 10286
3. Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, Rhode Island 02940-9671
4. The Dreyfus Corporation
200 Park Avenue
New York, New York 10166
Item 31. Management Services
_______ ___________________
Not Applicable
Item 32. Undertakings
________ ____________
(1) To call a meeting of shareholders for the purpose of voting upon
the question of removal of a Board member or Board members when
requested in writing to do so by the holders of at least 10% of
the Registrant's outstanding shares and in connection with such
meeting to comply with the provisions of Section 16(c) of the
Investment Company Act of 1940 relating to shareholder
communications.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all
of the requirements for effectiveness of this Amendment to the Registration
Statement pursuant to Rule 485(b) under the Securities Act of 1933 and has
duly caused this Amendment to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of New
York, and State of New York on the 25th day of November, 1997.
GENERAL GOVERNMENT SECURITIES MONEY MARKET FUND, INC.
BY: /s/Marie E. Connolly*
----------------------------
MARIE E. CONNOLLY, PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this
Amendment to the Registration Statement has been signed below by the
following persons in the capacities and on the dates indicated.
Signatures Title Date
__________________________ ________________________ ________
/s/Marie E. Connolly* President and Treasurer (Principal 11/25/97
- --------------------------- Executive Officer)
Marie E. Connolly
/s/Joseph F. Tower, III* Assistant Treasurer (Principal 11/25/97
- --------------------------- Financial and Accounting Officer)
Joseph F. Tower, III
/s/Joseph S. DiMartino* Chairman of the Board of 11/25/97
- --------------------------- Directors
Joseph S. DiMartino
11/25/97
/s/Clifford L. Alexander, Jr.* Director
- ---------------------------
Clifford L. Alexander, Jr.
/s/Peggy C. Davis* Director 11/25/97
- ---------------------------
Peggy C. Davis
/s/Ernest Kafka* Director 11/25/97
- ---------------------------
Ernest Kafka
/s/Saul B. Klaman* Director 11/25/97
- ---------------------------
Saul B. Klaman
/s/Nathan Leventhal* Director 11/25/97
- ---------------------------
Nathan Leventhal
*BY: /s/Elizabeth A. Keeley
---------------------------
Elizabeth A. Keeley
Attorney-in-Fact
GENERAL GOVERNMENT SECURITIES MONEY MARKET FUND, INC.
INDEX OF EXHIBITS
(11) Consent of Independent Auditors
(17) Financial Data Schedules
EXHIBIT (11)
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the captions "Condensed
Financial Information" and "Transfer and Dividend Disbursing Agent,
Custodian, Counsel and Independent Auditors" and to the incorporation by
reference of our report dated March 3, 1997, which is incorporated by
reference, in this Registration Statement (Form N-1A 2-77207) of General
Government Securities Money Market Fund, Inc.
ERNST & YOUNG LLP
New York, New York
November 21, 1997
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