MERRILL LYNCH U.S.A. GOVERNMENT RESERVES
Supplement dated September 29, 1999 to Prospectus dated December 29, 1998
It is anticipated that dividend recapture will be effective on or
about October 1, 1999.
The first paragraph under the section headed "Dividends and Taxes" on
page 12 of the Prospectus is revised to read as follows:
"DIVIDENDS of ordinary income are declared and reinvested daily in
the form of additional shares at net asset value. Shareholders will receive
statements monthly or quarterly as to such reinvestments. Shareholders
redeeming their holdings will receive all dividends declared and reinvested
through the date of redemption, except where they request a transaction that
settles on a same-day basis. In that case, unless otherwise requested,
shareholders will receive all dividends declared and reinvested through the
date immediately preceding the date of redemption. Dividends of capital gains,
if any, will be paid to shareholders at least annually. It is expected that
income will comprise most of the Fund's distributions."
Code #10152-12-98ALL
