<PAGE>
Alliance Capital Reserves
This is filed pursuant to Rule 497(e).
File Nos. 2-79807 and 811-03586.
<PAGE>
YIELDS
For current recorded yield information on the Funds, call toll-free
(800) 221-9513.
The Funds are open-end management investment companies with investment
objectives of safety, liquidity and maximum current income (in the case of
Alliance Municipal Trust-General, exempt from Federal income taxes and, in the
case of the California Portfolio, exempt from Federal and state income taxes)
to the extent consistent with the first two objectives. Alliance Capital
Reserves, Alliance Government Reserves, Alliance Treasury Reserves and the
General Portfolio of Alliance Municipal Trust are diversified. The California
Portfolio of Alliance Municipal Trust is non-diversified, and is offered only
to residents of California. This prospectus sets forth the information about
each Fund that a prospective investor should know before investing. Please
retain it for future reference.
AN INVESTMENT IN A FUND IS (I) NEITHER INSURED NOR GUARANTEED BY THE U.S.
GOVERNMENT; (II) NOT A DEPOSIT OR OBLIGATION OF, OR GUARANTEED OR ENDORSED BY,
ANY BANK; AND (III) NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY. THERE CAN BE NO
ASSURANCE THAT A FUND WILL BE ABLE TO MAINTAIN A STABLE NET ASSET VALUE OF
$1.00 PER SHARE.
A "Statement of Additional Information" for each Fund dated November 1, 1995,
which provides a further discussion of certain areas in this prospectus and
other matters which may be of interest to some investors, has been filed with
the Securities and Exchange Commission and is incorporated herein by reference.
A free copy may be obtained by contacting your Investment Executive.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
CONTENTS
<S> <C>
Expense Information.................... 2
Financial Highlights................... 3
Investment Objectives and Policies..... 6
Purchase and Redemption of Shares...... 9
Additional Information................. 10
</TABLE>
Miller & Scrhoeder
Financial, Inc.
Cash Management
Service
. Alliance Capital Reserves
. Alliance Government Reserves
. Alliance Treasury Reserves
. Alliance Municipal Trust
-- General Portfolio
. Alliance Municipal Trust
-- California Portfolio
Prospectus
November 1, 1995
[LOGO of Miller & Schroeder]
Miller & Schroeder Financial, Inc.
220 South Sixth Street
Minneapolis, Minnesota 55402
(612) 376-1500 . (800) 328-6122
<PAGE>
EXPENSE INFORMATION
SHAREHOLDER TRANSACTION EXPENSES
The Funds have no sales load on purchases or reinvested dividends, deferred
sales load, redemption fee or exchange fee.
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES (as a percentage
of average net assets, ACR AGR ATR AMT-GEN AMT-CA
after expense reimbursement) --- ---- ---- ------- ------
<S> <C> <C> <C> <C> <C>
Management Fees............................. .48% .48% .50% .50% .50%
12b-1 Fees.................................. .25 .23 .20 .25 .25
Other Expenses.............................. .27 .29 .30 .25 .25
---- ---- ---- ---- ----
Total Fund Operating Expenses............... 1.00% 1.00% 1.00% 1.00% 1.00%
</TABLE>
EXAMPLE
You would pay the following expenses on a $1,000 investment, assuming a 5%
annual return (cumulatively through the end of each time period):
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
ACR.......................................... $10 $32 $55 $122
AGR.......................................... $10 $32 $55 $122
ATR.......................................... $10 $32 $55 $122
AMT--General................................. $10 $32 $55 $122
AMT--California.............................. $10 $32 $55 $122
</TABLE>
The purpose of the foregoing table is to assist the investor in understand-
ing the various costs and expenses that an investor in the Fund will bear di-
rectly and indirectly. The expenses listed in the table for AGR and ATR are
net of the contractual reimbursement by the Adviser described in this prospec-
tus. The expenses of such Portfolios, before expense reimbursements, would be:
AGR: Management Fee--.48%, 12b-1 Fees--.25%, Other Expenses--.29% and Total
Operating Expenses--1.02%; and ATR: Management Fees--.50%, 12b-1 Fees--.25%,
Other Expenses--.30% and Total Operating Expenses--1.05%. THE EXAMPLE SHOULD
NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES; ACTUAL EXPENSES
MAY BE GREATER OR LESS THAN THOSE SHOWN.
2
<PAGE>
FINANCIAL HIGHLIGHTS . FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
(AUDITED)
The following tables have been audited by McGladrey & Pullen LLP, each of
the Fund's independent auditors, whose unqualified report thereon appears in
each Statement of Additional Information. This information should be read in
conjunction with the financial statements and notes thereto included in each
Fund's Statement of Additional Information. Further information about a Fund's
performance is contained in each Fund's annual report, which is available
without charge upon request.
<TABLE>
<CAPTION>
YEAR ENDED JUNE 30,
ALLIANCE CAPITAL RESERVES ---------------------------------------------------------------------------------
1995 1994 1993 1992 1991 1990 1989 1988 1987 1986
------ ------ ------ ------ ------ ------ ------ ------- ------- -------
<S> <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
------ ------ ------ ------ ------ ------ ------ ------- ------- -------
INCOME FROM INVESTMENT
OPERATIONS
Net investment income.... .0447 .0255 .0266 .0438 .0662 .0782 .0788 0.0625 0.0549 0.0685
Net realized gain on
investments............. -0- -0- .0003 .0013 -0- -0- -0- -0- -0- -0-
------ ------ ------ ------ ------ ------ ------ ------- ------- -------
Net increase in net
assets from operations.. .0447 .0255 .0269 .0451 .0662 .0782 .0788 0.0625 0.0549 0.0685
------ ------ ------ ------ ------ ------ ------ ------- ------- -------
LESS: DISTRIBUTIONS
Dividends from net
investment income....... (.0447) (.0255) (.0266) (.0438) (.0662) (.0782) (.0788) (0.0625) (0.0549) (0.0685)
Distributions from net
realized gains.......... -0- -0- (.0003) (.0013) -0- -0- -0- -0- -0- -0-
------ ------ ------ ------ ------ ------ ------ ------- ------- -------
Total dividends and
distributions........... (.0447) (.0255) (.0269) (.0451) (.0662) (.0782) (.0788) (0.0625) (0.0549) (0.0685)
------ ------ ------ ------ ------ ------ ------ ------- ------- -------
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
====== ====== ====== ====== ====== ====== ====== ======= ======= =======
TOTAL RETURNS
Total investment return
based on:
Net asset value(a)...... 4.57% 2.58% 2.73% 4.61% 6.84% 8.14% 8.20% 6.45% 5.64% 7.09%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year
(in millions)........... $3,024 $2,417 $2,112 $1,947 $1,937 $1,891 $1,536 $1,392 $1,458 $1,198
Ratio to average net
assets of:
Expenses, net of waivers
and reimbursements..... 1.00% 1.00% 1.00% 1.00% .97% .88% .95% .95% .99% 1.01%
Expenses, before waivers
and reimbursements..... 1.03% 1.03% 1.00% 1.00% .97% .98% 1.05% 1.05% 1.09% 1.11%
Net investment
income(b).............. 4.51% 2.57% 2.65% 4.37% 6.62% 7.82% 7.87% 6.26% 5.50% 6.85%
</TABLE>
- -------
(a) Total investment return is calculated assuming an initial investment made
at the net asset value at the beginning of the period, reinvestment of all
dividends and distributions at net asset value during the period, and
redemption on the last day of the period.
(b) Net of waivers and reimbursements.
<TABLE>
<CAPTION>
ALLIANCE GOVERNMENT YEAR ENDED JUNE 30,
RESERVES ----------------------------------------------------------------------------------------
1995 1994 1993 1992 1991 1990 1989 1988 1987 1986
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, begin-
ning of period......... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
INCOME FROM INVESTMENT
OPERATIONS
Net investment income... .0439 .0244 .0256 .0421 .0640 .0765 .0774 0.0612 0.0541 0.0659
Net realized gain on in-
vestments.............. -0- -0- .0001 -0- -0- .0001 -0- -0- -0- -0-
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Net increase in net
assets from operations. .0439 .0244 .0257 .0421 .0640 .0766 .0774 0.0612 0.0541 0.0659
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
LESS: DISTRIBUTIONS
Dividends from net in-
vestment income........ (.0439) (.0244) (.0256) (.0421) (.0640) (.0765) (.0774) (0.0612) (0.0541) (0.0659)
Distributions from net
realized gains......... -0- -0- (.0001) -0- -0- (.0001) -0- -0- -0- -0-
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Total dividends and dis-
tributions............. (.0439) (.0244) (.0257) (.0421) (.0640) (.0766) (.0774) (0.0612) (0.0541) (0.0659)
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
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
======= ======= ======= ======= ======= ======= ======= ======= ======= =======
TOTAL RETURNS
Total investment return
based on:
Net asset value(a)..... 4.48% 2.48% 2.60% 4.30% 6.61% 7.96% 8.04% 6.31% 5.56% 6.81%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year
(in millions).......... $2,514 $2,061 $1,783 $1,572 $1,070 $584 $522 $315 $260 $254
Ratio to average net as-
sets of:
Expenses, net of
waivers and
reimbursements........ 1.00% 1.00% 1.00% .95% .89% .88% .88% .80% .95% 1.00%
Expenses, before
waivers and
reimbursements........ 1.05% 1.04% 1.02% .97% .93% .98% .98% .90% 1.05% 1.10%
Net investment
income(b)............. 4.42% 2.46% 2.55% 4.17% 6.28% 7.65% 7.86% 6.13% 5.41% 6.58%
</TABLE>
- -------
(a) Total investment return is calculated assuming an initial investment made
at the net asset value at the beginning of the period, reinvestment of all
dividends and distributions at net asset value during the period, and
redemption on the last day of the period.
(b) Net of waivers and reimbursement.
3
<PAGE>
<TABLE>
<CAPTION>
SEPTEMBER 1, 1993(A)
YEAR ENDED THROUGH
JUNE 30, 1995 JUNE 30, 1994
ALLIANCE TREASURY RESERVES ------------- --------------------
<S> <C> <C>
Net asset value, beginning of period........ $ 1.00 $ 1.00
-------- -------
INCOME FROM INVESTMENT OPERATIONS
Net investment income....................... .0460 .0260
-------- -------
LESS: DISTRIBUTIONS
Dividends from net investment income........ (.0460) (.0260)
-------- -------
Net asset value, end of period.............. $ 1.00 $ 1.00
======== =======
TOTAL RETURNS
Total investment return based on:
Net asset value(b)......................... 4.71% 3.18%(c)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (in thousands)...... $493,702 $80,720
Ratio to average net assets of:
Expenses, net of waivers and reimburse-
ments..................................... .69% .28%(c)
Expenses, before waivers and reimburse-
ments..................................... 1.05% 1.28%(c)
Net investment income(d)................... 4.86% 3.24%(c)
</TABLE>
- -------
(a) Commencement of operations.
(b) Total investment return is calculated assuming an initial investment made
at the net asset value at the beginning of the period, reinvestment of all
dividends and distributions at net asset value during the period, and
redemption on the last day of the period.
(c) Annualized.
(d) Net of waivers and reimbursements.
<TABLE>
<CAPTION>
GENERAL PORTFOLIO
ALLIANCE MUNICIPAL TRUST ----------------------------------------------------------------------------------------------
SIX MONTHS
YEAR ENDED JUNE 30, ENDED YEAR ENDED DECEMBER 31,
------------------------------------------------- JUNE 30, ------------------------------
1995 1994 1993 1992 1991 1990 1989 1988 1987 1986 1985
------ ------ ------ ------ ------ ------ ---------- ------ ------ ------ ------
<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
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
INCOME FROM INVESTMENT
OPERATIONS
Net investment income... .028 .018 .020 .034 .046 .055 .030 .047 .041 .044 .049
Net realized and
unrealized loss on
investments............ (.003) -0- -0- -0- -0- -0- -0- -0- -0- -0- -0-
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Net increase in net
asset value from
operations............. .025 .018 .020 .034 .046 .055 .030 .047 .041 .044 .049
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
ADD: CAPITAL
CONTRIBUTIONS
Capital Contributed by
the Adviser............ .003 -0- -0- -0- -0- -0- -0- -0- -0- -0- -0-
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
LESS: DISTRIBUTIONS
Dividends from net
investment income...... (.028) (.018) (.020) (.034) (.046) (.055) (.030) (.047) (.041) (.044) (.049)
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
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 RETURNS
Total investment return
based on:
Net asset value(a)..... 2.83%(c) 1.81% 2.05% 3.48% 4.71% 5.65% 6.13%(b) 4.81% 4.18% 4.50% 5.04%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of
period (in millions)... $1,189 $1,134 $1,016 $914 $883 $798 $695 $633 $690 $794 $374
Ratio to average net
assets of:
Expense, net of waivers
and reimbursements.... .94% .92% .92% .92% .89% .83% .84%(b) .83% .80% .80% .85%
Expense, before waivers
and reimbursements.... .95% .94% .94% .95% .95% .93% .94%(b) .93% .90% .90% .95%
Net investment
income(d)............. 2.78% 1.80% 2.02% 3.40% 4.57% 5.50% 5.96%(b) 4.69% 4.08% 4.31% 4.87%
</TABLE>
- -------
(a) Total investment return is calculated assuming an initial investment made
at the net asset value at the beginning of the period, reinvestment of all
dividends and distributions at net asset value during the period, and
redemption on the last day of the period.
(b) Annualized.
(c) The capital contribution by the Adviser has no effect on total return.
(d) Net of expenses reimbursed or waived by the Adviser.
4
<PAGE>
<TABLE>
<CAPTION>
CALIFORNIA PORTFOLIO
-----------------------------------------------------------------------------------------
SIX MONTHS JUNE 2, 1988(A)
YEAR ENDED JUNE 30, ENDED THROUGH
---------------------------------------------------------- JUNE 30, DECEMBER 31,
1995 1994 1993 1992 1991 1990 1989 1988
-------- -------- -------- -------- -------- -------- ---------- ---------------
<S> <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
-------- -------- -------- -------- -------- -------- -------- --------
INCOME FROM INVESTMENT
OPERATIONS
Net investment income... .027 .018 .020 .032 .043 .050 .029 .030
-------- -------- -------- -------- -------- -------- -------- --------
LESS: DISTRIBUTIONS
Dividends from net
investment income...... (.027) (.018) (.020) (.032) (.043) (.050) (.029) (.030)
-------- -------- -------- -------- -------- -------- -------- --------
Net asset value, end of
period................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ======== ======== ======== ========
TOTAL RETURNS
Total investment return
based on:
Net asset value(b)..... 2.78% 1.83% 2.05% 3.26% 4.43% 5.17% 6.02%(c) 5.20%(c)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of
period (000's omitted). $236,479 $219,673 $156,200 $121,317 $111,957 $104,097 $242,124 $103,390
Ratio to average net
assets of:
Expenses, net of
waivers and
reimbursements........ .93% .93% .93% .95% 1.00% .99% .92%(c) .89%(c)
Expenses, before
waivers and
reimbursements........ 1.01% 1.02% 1.02% 1.05% 1.10% 1.09% 1.02%(c) 1.10%(c)
Net investment
income(d)............. 2.75% 1.82% 2.01% 3.18% 4.32% 5.03% 5.90%(c) 5.21%(c)
</TABLE>
- -------
(a) Commencement of operations.
(b) Total investment return is calculated assuming an initial investment made
at the net asset value at the beginning of the period, reinvestment of all
dividends and distributions at net asset value during the period, and
redemption on the last day of the period.
(c) Annualized.
(d) Net of expenses reimbursed or waived by the Adviser.
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. To calculate the "yield," the amount of dividends
paid on a share during a specified seven-day period is assumed to be paid each
week over a 52-week period and is shown as a percentage of the investment. To
calculate "effective yield," which will be higher than the "yield" because of
compounding, the dividends paid are assumed to be reinvested. For ACR
dividends for the seven days ended June 30, 1995 amounted to an annualized
yield of 5.12%, equivalent to an effective yield of 5.25%. For AGR dividends
for the seven days ended June 30, 1995, after expense reimbursement, amounted
to an annualized yield of 4.97%, equivalent to an effective yield of 5.10%.
Absent such reimbursement, the annualized yield for such period would have
been 4.95%, equivalent to an effective yield of 5.08%. For ATR dividends for
the seven days ended June 30, 1995, after expense reimbursement, amounted to
an annualized yield of 4.97%, equivalent to an effective yield of 5.10%.
Absent such reimbursement, the annualized yield for such period would have
been 4.72%, equivalent to an effective yield of 4.85%. Dividends for AMT--
General for the seven days ended June 30, 1995 amounted to an annualized yield
of 3.25%, equivalent to an effective yield of 3.30%. Dividends for AMT--
California for the seven days ended June 30, 1995, after expense
reimbursement, amounted to an annualized yield of 3.18%, equivalent to an
effective yield of 3.23%. Absent expense reimbursement, the annualized yield
for this period would have been 3.13%, equivalent to an effective yield of
3.18%.
5
<PAGE>
INVESTMENT OBJECTIVES AND POLICIES
The investment objectives of each of the Funds are--in the following order
of priority--safety of principal, excellent liquidity and, to the extent con-
sistent with the first two objectives, maximum current income (exempt from in-
come taxes to the extent described below in the case of each portfolio of
Alliance Municipal Trust). As a matter of fundamental policy, each Fund pur-
sues its objectives by maintaining a portfolio of high-quality money market
securities all of which at the time of investment have remaining maturities of
one year (397 days with respect to ATR) or less, which maturities may extend
to 397 days. While the fundamental policies described above and the "other
fundamental investment policies" described below may not be changed without
shareholder approval, each Fund may upon notice to shareholders, but without
such approval, change nonfundamental investment policies or create additional
classes of shares in order to establish portfolios which may have different
investment objectives. There can be no assurance that any Fund's objectives
will be achieved.
The Funds will comply with Rule 2a-7 under the Investment Company Act of
1940 (the "1940 Act"), as amended from time to time, including the diversity,
quality and maturity limitations imposed by the Rule. The average maturity of
each Fund's portfolio cannot exceed 90 days. A more detailed description of
Rule 2a-7 is set forth in each Fund's Statement of Additional Information.
ALLIANCE CAPITAL RESERVES
The money market securities in which Alliance Capital Reserves ("ACR") in-
vests include: (1) marketable obligations of, or guaranteed by, the United
States Government, its agencies or instrumentalities (collectively, the "U.S.
Government"); (2) certificates of deposit, bankers' acceptances and interest
bearing savings deposits issued or guaranteed by banks or savings and loan as-
sociations having total assets of more than $1 billion and which are members
of the Federal Deposit Insurance Corporation and certificates of deposit and
bankers' acceptances denominated in U.S. dollars and issued by U.S. branches
of foreign banks having total assets of at least $1 billion that are believed
by the Adviser to be of quality equivalent to that of other such instruments
in which the Fund may invest; (3) commercial paper of prime quality [i.e.,
rated A-1+ or A-1 by Standard & Poor's Corporation ("Standard & Poor's") or
Prime-1 by Moody's Investors Service, Inc. ("Moody's") or, if not rated, is-
sued by companies having outstanding debt securities rated AAA or AA by Stan-
dard & Poor's, or Aaa or Aa by Moody's] and participation interests in loans
extended by banks to such companies; and (4) repurchase agreements that are
collateralized in full each day by liquid securities of the types listed
above. These agreements are entered into with "primary dealers" (as designated
by the Federal Reserve Bank of New York) in U.S. Government securities or
State Street Bank and Trust Company, ACR's Custodian, and would create a loss
to the Fund if, in the event of a dealer default, the proceeds from the sale
of the collateral were less than the repurchase price. ACR may also invest in
certificates of deposit issued by, and time deposits maintained at, foreign
branches of domestic banks described in (2) above and prime quality dollar-
denominated commercial paper issued by foreign companies meeting the criteria
specified in (3) above.
ACR may purchase restricted securities that are determined by the Adviser to
be liquid in accordance with procedures adopted by the Trustees of ACR. Re-
stricted securities are securities subject to contractual or legal restric-
tions on resale, such as those arising from an issuer's reliance upon certain
exemptions from registration under the Securities Act of 1933 (the "Securities
Act"). The Fund may purchase restricted securities eligible for resale under
Rule 144A under the Securities Act and commercial paper issued in reliance
upon the exemption from registration in Section 4(2) of the Securities Act
and, in each case, determined by the Adviser to be liquid in accordance with
procedures adopted by the Trustees of the Fund.
ACR may invest in asset-backed securities that meet its existing diversifi-
cation, quality and maturity criteria. Asset-backed securities are securities
issued by special purpose entities whose primary assets consist of a pool of
loans or accounts receivable. The securities may be in the form of a benefi-
cial interest in a special purpose trust, limited partnership interest, or
commercial paper or other debt securities issued by a special purpose corpora-
tion. Although the securities may have some form of credit or
6
<PAGE>
liquidity enhancement, payments on the securities depend predominately upon
collection of the loans and receivables held by the issuer. It is ACR's cur-
rent intention to limit its investment in such securities to not more than 5%
of its net assets.
Other Fundamental Investment Policies. To maintain portfolio diversification
and reduce investment risk, ACR may not: (1) invest more than 25% of its as-
sets in the securities of issuers conducting their principal business activi-
ties in any one industry although there is no such limitation with respect to
U.S. Government securities or certificates of deposit, bankers' acceptances
and interest bearing savings deposits; (2) invest more than 5% of its assets
in securities of any one issuer (except the U.S. Government) although with re-
spect to one-quarter of its total assets it may invest without regard to such
limitation; (3) invest more than 5% of its assets in the securities of any is-
suer (except the U.S. Government) having less than three years of continuous
operation or purchase more than 10% of any class of the outstanding securities
of any issuer (except the U.S. Government); (4) borrow money except from banks
on a temporary basis or via entering into reverse repurchase agreements in ag-
gregate amounts not exceeding 15% of its assets and to facilitate the orderly
maturation and sale of portfolio securities during any periods of abnormally
heavy redemption requests; or (5) mortgage, pledge or hypothecate its assets
except to secure such borrowings.
As a matter of operating policy, fundamental policy number (2) would give
ACR the ability to invest, with respect to 25% of its assets, more than 5% of
its assets in any one issuer only in the event Rule 2a-7 is amended in the fu-
ture.
ALLIANCE GOVERNMENT RESERVES
The securities in which Alliance Government Reserves ("AGR") invests are:
(1) marketable obligations of, or guaranteed by, the United States Government,
its agencies or instrumentalities (collectively, the "U.S. Government"), in-
cluding issues of the United States Treasury, such as bills, certificates of
indebtedness, notes and bonds, and issues of agencies and instrumentalities
established under the authority of an act of Congress; and (2) repurchase
agreements that are collateralized in full each day by the types of securities
listed above. These agreements are entered into with "primary dealers" (as
designated by the Federal Reserve Bank of New York) in U.S. Government securi-
ties or State Street Bank and Trust Company, the Fund's Custodian, and would
create a loss to the Fund if, in the event of a dealer default, the proceeds
from the sale of the collateral were less than the repurchase price. The Fund
may commit up to 15% of its net assets to the purchase of when-issued U.S.
Government securities, whose value may fluctuate prior to their settlement,
thereby creating an unrealized gain or loss to the Fund.
Other Fundamental Investment Policies. To maintain portfolio diversification
and reduce investment risk, AGR may not: (1) borrow money except from banks on
a temporary basis or via entering into reverse repurchase agreements in aggre-
gate amounts not exceeding 10% of its assets and to be used exclusively to fa-
cilitate the orderly maturation and sale of portfolio securities during any
periods of abnormally heavy redemption requests, if they should occur; such
borrowings may not be used to purchase investments and it will not purchase
any investment while any such borrowings exist; or (2) pledge, hypothecate or
in any manner transfer, as security for indebtedness, its assets except to se-
cure such borrowings.
ALLIANCE TREASURY RESERVES
The securities in which Alliance Treasury Reserves ("ATR") invests are: (1)
issues of the U.S. Treasury, such as bills, certificates of indebtedness,
notes and bonds; and (2) repurchase agreements that are collateralized in full
each day by the types of securities listed above. These agreements are entered
into with "primary dealers" (as designated by the Federal Reserve Bank of New
York) in U.S. Government securities or State Street Bank and Trust Company,
ATR's Custodian. For each repurchase agreement, ATR requires continual mainte-
nance of the market value of the underlying collateral in amounts equal to, or
in excess of, the agreement amount. In the event of a dealer default, ATR
might suffer a loss to the extent that the proceeds from the sale of the col-
lateral were less than the repurchase price. ATR may commit up to 15% of its
net assets to the purchase of when-issued U.S. Treasury securities. Delivery
and payment for when-issued securities takes place after the transaction date.
The payment amount and the interest rate that will be received on the securi-
ties are fixed on the transaction date. The value of such securities may fluc-
tuate prior to their settlement, thereby creating an unrealized gain or loss
to ATR.
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Other Fundamental Investment Policies. To maintain portfolio diversification
and reduce investment risk, ATR may not: (1) borrow money except from banks on
a temporary basis or via entering into reverse repurchase agreements in aggre-
gate amounts not exceeding 10% of its assets and to be used exclusively to fa-
cilitate the orderly maturation and sale of portfolio securities during any
periods of abnormally heavy redemption requests, if they should occur; such
borrowings may not be used to purchase investments and it will not purchase
any investment while any such borrowings exist; or (2) pledge, hypothecate or
in any manner transfer, as security for indebtedness, its assets except to se-
cure such borrowings.
ALLIANCE MUNICIPAL TRUST
The investment objectives of each Portfolio are safety of principal, liquid-
ity and, to the extent consistent with these objectives, maximum current in-
come that is exempt from income taxation to the extent described below. Except
when a Portfolio assumes a temporary defensive position, as a matter of funda-
mental policy, at least 80% of each Portfolio's total assets will be invested
in municipal securities (as opposed to the taxable investments described be-
low). Normally, substantially all of each Portfolio's income will be tax-ex-
empt as described below (e.g., for 1994, 100% of the income of each Portfolio
was exempt from Federal income taxes).
AMT-General seeks maximum current income that is exempt from Federal income
taxes by investing principally in a diversified portfolio of high quality
municipal securities. Such income may be subject to state or local income
taxes.
AMT-California seeks maximum current income that is exempt from Federal and
California state personal income taxes by investing, as a matter of
fundamental policy, not less than 65% of its total assets in a portfolio of
high quality municipal securities issued by the State of California or its
political subdivisions.
Each Portfolio of the Fund may invest without limitation in tax-exempt mu-
nicipal securities subject to the alternative minimum tax (the "AMT").
Under current Federal income tax law, (1) interest on tax-exempt municipal
securities issued after August 7, 1986 which are "specified private activity
bonds," and the proportionate share of any exempt-interest dividends paid by a
regulated investment company which receives interest from such specified pri-
vate activity bonds, will be treated as an item of tax preference for purposes
of the AMT imposed on individuals and corporations, though for regular Federal
income tax purposes such interest will remain fully tax-exempt, and (2) inter-
est on all tax-exempt obligations will be included in "adjusted current earn-
ings" of corporations for AMT purposes. Such bonds have provided, and may con-
tinue to provide, somewhat higher yields than other comparable municipal secu-
rities. See below, "Daily Dividends, Other Distributions, Taxes."
There can be no assurance that AMT-California will achieve its investment
objectives. Potential investors in AMT-California should consider the greater
risk of the concentration of such Portfolio versus the safety that comes with
less concentrated investments and should compare yields available on portfo-
lios of the relevant state's issues with those of more diversified portfolios,
including other states' issues, before making an investment decision. The Ad-
viser believes that by maintaining AMT-California's investments in liquid,
short-term, high quality investments, the Portfolio is largely insulated from
the credit risks that exist on longterm municipal securities of the relevant
state. See the Statement of Additional Information for a more detailed discus-
sion of the financial condition of California.
Municipal Securities. The municipal securities in which each Portfolio in-
vests include municipal notes and short-term municipal bonds. Municipal notes
are generally used to provide for short-term capital needs and generally have
maturities of one year or less. Examples include tax anticipation and revenue
anticipation notes, which are generally issued in anticipation of various sea-
sonal revenues, bond anticipation notes, and tax-exempt commercial paper.
Short-term municipal bonds may include general obligation bonds, which are se-
cured by the issuer's pledge of its faith, credit and taxing power for payment
of principal and interest, and revenue bonds, which are generally paid from
the revenues of a particular facility or a specific excise or other source.
A Portfolio may invest in variable rate obligations whose interest rates are
adjusted either at predesignated periodic intervals or whenever there is a
change in the market rate to which the security's interest rate is tied. Such
adjustments minimize changes in the market value
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<PAGE>
of the obligation and, accordingly, enhance the ability of the Portfolio to
maintain a stable net asset value. Variable rate securities purchased may in-
clude participation interests in industrial development bonds backed by let-
ters of credit of Federal Deposit Insurance Corporation member banks having
total assets of more than $1 billion. The letters of credit of any single bank
in respect of all variable rate obligations will not cover more than 10% of a
Portfolio's total assets.
Each Portfolios' municipal securities at the time of purchase are rated
within the two highest quality ratings of Moody's Investors Service, Inc. (Aaa
and Aa, MIG 1 and MIG 2, or VMIG 1 and VMIG 2) or Standard & Poor's Corpora-
tion (AAA and AA or SP-1 and SP-2), or judged by the Adviser to be of compara-
ble quality. Securities must also meet credit standards applied by the
Adviser.
A Portfolio also may invest in stand-by commitments, which may involve cer-
tain expenses and risks, but such commitments are not expected to comprise
more than 5% of any Portfolio's net assets. A Portfolio may commit up to 15%
of its net assets to the purchase of when-issued securities. The Fund's custo-
dian will maintain, in a separate account of the respective Portfolio, liquid
high-grade debt securities having value equal to, or greater than, such when-
issued securities. The price of when-issued securities, which is generally ex-
pressed in yield terms, is fixed at the time the commitment to purchase is
made, but delivery and payment for such securities takes place at a later
time. Normally the settlement date occurs from within ten days to one month
after the purchase of the issue. The value of when-issued securities may fluc-
tuate prior to their settlement, thereby creating an unrealized gain or loss
to a Portfolio.
Taxable Investments. The taxable investments in which each Portfolio may
invest include obligations of the U.S. Government and its agencies, high
quality certificates of deposit and bankers' acceptances, prime commercial
paper, and repurchase agreements.
Other Fundamental Investment Policies. To reduce investment risk, AMT-Gen-
eral may not invest more than 25% of its total assets in municipal securities
whose issuers are located in the same state, and no Portfolio may invest more
than 25% of its total assets in municipal securities the interest upon which
is paid from revenues of similar-type projects; a Portfolio may not invest
more than 5% of its total assets in the securities of any one issuer except
the U.S. Government, although (i) with respect to 25% of its total assets AMT-
General may invest up to 10% per issuer, and (ii) AMT-California may invest
50% of its respective total assets in as few as four issuers (but no more than
25% of total assets in any one issuer); and a Portfolio may not purchase more
than 10% of any class of the voting securities of any one issuer except those
of the U.S. Government.
PURCHASE AND REDEMPTION OF SHARES
OPENING ACCOUNTS
Instruct your Investment Executive to use ACR, AGR, ATR, AMT-General or AMT-
California in conjunction with your brokerage account. There is a $1,000
minimum initial investment.
SUBSEQUENT INVESTMENTS
A. BY CHECK THROUGH MILLER & SCHROEDER FINANCIAL, INC.
Mail or deliver your check or negotiable draft payable to Miller & Schroeder
Financial, Inc., ("Miller & Schroeder") which will deposit it into the
Fund(s). Please indicate your Miller & Schroeder brokerage account number on
the check or draft.
B. INVESTMENTS MADE BY CHECK
Money transmitted by a check drawn on a member of the Federal Reserve System
is converted to Federal funds in one business day following receipt and, thus,
is then invested in the Fund(s). Checks drawn on banks which are not members
of the Federal Reserve System may take longer to be converted and invested.
All payments must be in United States dollars.
Proceeds from any subsequent redemption by you of Fund shares that were
purchased by check will not be forwarded to you until the Fund is reasonably
assured that your check has cleared, up to fifteen days following the purchase
date. If the redemption request during such period is in the form of a Fund
check, the check will be
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<PAGE>
marked "insufficient funds" and be returned unpaid to the presenting bank.
C. BY SWEEP
Miller & Schroeder has available an automatic "sweep" to the Fund(s) for its
customers' brokerage accounts. Proceeds from sale transactions, as well as
other credit balances in your Miller & Schroeder brokerage account, will be
swept into your money market fund not less than weekly.
REDEMPTIONS
A. BY CONTACTING YOUR INVESTMENT EXECUTIVE
Instruct your Investment Executive to order a withdrawal from your fund
account and forward payment to you or your designee with a Miller & Schroeder
check.
B. BY SWEEP
Miller & Schroeder's sweep arrangement moves money from your money market
account to cover purchases in your Miller & Schroeder brokerage account.
C. BY CHECK-WRITING
With this service, you may write checks made payable to any payee in the
amount of $100 or more. Checks cannot be written for more than the principal
balance (not including any accrued dividends) in your account. First you must
fill out the Signature Card which you can obtain from your Investment
Executive. There is no separate charge for the check-writing service. The
check-writing service enables you to receive the daily dividends declared on
the shares to be redeemed until the day that your check is presented for
payment. All check ordering must be handled through Miller & Schroeder.
ADDITIONAL INFORMATION
SHARE PRICE. Shares are sold and redeemed on a continuous basis without
sales or redemption charges at their net asset value which is expected to be
constant at $1.00 per share, although this price is not guaranteed. The net
asset value of each Fund's shares is determined each business day at 12:00
Noon and 4:00 p.m. (New York time). The net asset value per share of a Fund is
calculated by taking the sum of the value of that Fund's investments (amor-
tized cost value is used for this purpose) and any cash or other assets, sub-
tracting liabilities, and dividing by the total number of shares of outstand-
ing. All expenses, including the fees payable to the Adviser, are accrued dai-
ly.
TIMING OF INVESTMENTS AND REDEMPTIONS. The Funds have two transaction times
each business day, 12:00 Noon and 4:00 p.m. (New York time). New investments
represented by Federal funds or bank wire monies received by State Street Bank
at any time during a day prior to 4:00 p.m. are entitled to the full dividend
to be paid to shareholders for that day. Shares do not earn dividends on the
day a redemption is effected regardless of whether the redemption order is re-
ceived before or after 12:00 Noon.
During periods of drastic economic or market developments, such as the mar-
ket break of October 1987, it is possible that shareholders would have diffi-
culty in reaching Alliance Fund Services, Inc. by telephone (although no such
difficulty was apparent at any time in connection with the 1987 market break).
If a shareholder were to experience such difficulty, the shareholder should
issue written instructions to Alliance Fund Services, Inc. at the address
shown on page 11 of this prospectus. The Funds reserve the right to suspend or
terminate their telephone redemption service at any time without notice. Nei-
ther the Funds nor the Adviser, or Alliance Fund Services, Inc. will be re-
sponsible for the authenticity of telephone requests for redemptions that the
Funds reasonably believe to be genuine. The Funds will employ reasonable pro-
cedures in order to verify that telephone requests for redemptions are genu-
ine, including among others, recording such telephone instructions and causing
written confirmations of the resulting transactions to be sent to sharehold-
ers. If the Funds did not employ such procedures, they could be liable for
losses arising from unauthorized or fraudulent telephone instructions. Se-
lected dealers or agents may charge a commission for handling telephone re-
quests for redemptions.
Redemption proceeds are normally wired or mailed either the same or the next
business day, but in no event later than seven days, unless redemptions have
been suspended or postponed due to the determination of an
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<PAGE>
"emergency" by the Securities and Exchange Commission or to certain other unu-
sual conditions.
SMALL ACCOUNT CHARGE. The Funds impose service charges upon financial inter-
mediaries to reflect the relatively higher costs of small transactions; these
intermediaries may in turn pass on such charges to affected accounts.
DAILY DIVIDENDS, OTHER DISTRIBUTIONS, TAXES. All net income of each Fund is
determined each business day at 4:00 p.m. (New York time) and is paid immedi-
ately thereafter pro rata to shareholders of that Fund of record via automatic
investment in additional full and fractional shares of that Fund in each
shareholder's account. As such additional shares are entitled to dividends on
following days, a compounding growth of income occurs.
Net income consists of all accrued interest income on Fund assets less the
Fund's expenses applicable to that dividend period. Realized gains and losses
of a Fund are reflected in its net asset value and are not included in net in-
come.
Distributions to you out of tax-exempt interest income earned by AMT-General
and AMT-CA are not subject to Federal income tax (other than the AMT), but, in
the case of AMT-General, may be subject to state or local income taxes. Any
exempt-interest dividends derived from interest on municipal securities sub-
ject to the AMT will be a specific preference item for purposes of the Federal
individual and corporate AMT. Distributions to residents of California out of
income earned by the California Portfolio from California municipal securities
are exempt from California personal income taxes. Distributions out of taxable
interest income, other investment income, and short-term capital gains are
taxable to you as ordinary income and distributions of long-term capital
gains, if any, are taxable as long-term capital gains irrespective of the
length of time you may have held your shares. Distributions of short and long-
term capital gains, if any, are normally made near year-end. Each year shortly
after December 31, the Funds will send you tax information stating the amount
and type of all its distributions for the year just ended.
MINIMUMS. Each Fund has minimums of $1,000 for initial investments and $500
for actual balances.
THE ADVISER. Each Fund retains Alliance Capital Management L.P., 1345 Avenue
of the Americas, New York, NY 10105 under separate Advisory Agreements to pro-
vide investment advice and, in general, to supervise its management and in-
vestment program, subject to the general control of the Trustees of each Fund.
For the fiscal year ended June 30, 1995, ACR, AGR, ATR, AMT-General and AMT-CA
each paid the Adviser an advisory fee at an annual rate of .46, .46, .38, .50
and .50 of 1%, respectively, of the average daily value of the respective
Portfolio's net assets.
Under a Distribution Services Agreement (the "Agreement"), each Fund pays
the Adviser at a maximum annual rate of .25 of 1% of the Fund's aggregate av-
erage daily net assets. For the fiscal year ended June 30, 1995, ACR, AGR,
AMT-General and AMT-CA each paid the Adviser a distribution services fee at an
annual rate of .25, .23, .24 and .17 of 1%, respectively, of the average daily
value of the net assets of each Portfolio. For the period June 30, 1995, the
Adviser waived the distribution fee for ATR. Substantially all such monies
(together with significant amounts from the Adviser's own resources) are paid
by the Adviser to broker-dealers and other financial intermediaries for their
distribution assistance and to banks and other depository institutions for ad-
ministrative and accounting services provided to the Funds, with any remaining
amounts being used to partially defray other expenses incurred by the Adviser
in distributing the Funds' shares. The Funds believe that the administrative
services provided by depository institutions are permissible activities under
present banking laws and regulations and will take appropriate actions (which
should not adversely affect the Funds or their shareholders) in the future to
maintain such legal conformity should any changes in, or interpretations of,
such laws or regulations occur.
The Adviser will reimburse each Fund to the extent that aggregate operating
expenses of that Fund (including the Adviser's fee and expenses incurred under
the Agreement) exceed 1% of its average daily net assets for any fiscal year.
CUSTODIAN, TRANSFER AGENT AND DISTRIBUTOR. State Street Bank and Trust Com-
pany, P.O. Box 1912, Boston, MA 02105, is the Funds' Custodian. Alliance Fund
Services, Inc., P.O. Box 1520, Secaucus, NJ 07096-1520 and Alliance Fund Dis-
tributors, Inc., 1345 Avenue of the Americas, New York, NY 10105, are the
Funds' Transfer Agent and Distributor, respectively.
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<PAGE>
FUND ORGANIZATION. AGR and ATR are series of Alliance Government Reserves
which is a diversified open-end management investment company registered under
the 1940 Act. The Fund was reorganized as a Massachusetts business trust in
October 1984, having previously been a Maryland corporation since its forma-
tion in December 1978. ACR and AMR (not offered by this prospectus) are series
of Alliance Capital Reserves, a diversified open-end management investment
company registered under the 1940 Act. The Fund was reorganized as a Massachu-
setts business trust in October 1984, having previously been a Maryland corpo-
ration since its formation in April 1978. AMT-General is a diversified, and
AMT-CA is a non-diversified series of Alliance Municipal Trust, which is also
an open-end management investment company registered under the 1940 Act con-
sisting of AMT-General and AMT-CA and five other series not offered by this
prospectus. The Fund was reorganized as a Massachusetts business trust in
April 1985, having previously been a Maryland corporation since its formation
in January 1983. Each such investment company is organized as a Massachusetts
business trust. Each Fund's activities are supervised by its Trustees. Normal-
ly, shares of each series of Alliance Municipal Trust, Alliance Government Re-
serves and Alliance Capital Reserves are entitled to one vote per share, and
vote as a single series, on matters that affect each series in substantially
the same manner. Massachusetts law does not require annual meetings of share-
holders and it is anticipated that shareholder meetings will be held only when
required by Federal law. Shareholders have available certain procedures for
the removal of Trustees.
MANAGED ASSETS PLAN ("MAP"). The Funds offer their customers MAP, which is a
special cash management service linked to the Funds. Among various features of
MAP, the shareholder has direct access to his Fund balance (1) with a Visa
Gold Card that is accepted worldwide by participating merchants, banks and au-
tomated teller machines and (2) by MAP checks which can be written for any
amount up to the balance in the account, with no restriction on the number of
checks. Details of MAP, including its annual fee, are available by contacting
your Account Executive.
REPORTS. You receive semi-annual and annual reports for your Fund as well as
a monthly summary of your account. You can arrange for a copy of each of your
account statements to be sent to other parties.
Since this prospectus sets forth information about all the Funds, it is the-
oretically possible that a Fund might be liable for any materially inaccurate
or incomplete disclosure in this prospectus concerning another Fund. Based on
the advice of counsel, however, the Funds believe that the potential liability
of each Fund with respect to the disclosure in this prospectus extends only to
the disclosure relating to that Fund.
12
