CORTLAND TRUST INC, 497, 2000-04-07

CORTLAND TRUST INC
497, 2000-04-07

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Rule 497(e)
File No. 2-94935
Rule 497(c)
File No. 2-94935
- --------------------------------------------------------------------------------
CORTLAND TRUST, INC. 600 FIFTH AVENUE
NEW YORK, N.Y. 10020
(212) 830-5220
================================================================================

CORTLAND GENERAL MONEY MARKET FUND
U.S. GOVERNMENT FUND
MUNICIPAL MONEY MARKET FUND

PROSPECTUS
July 27, 1999
as revised
April 6, 2000

THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE
SECURITIES OR PASSED UPON THE ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
3 CORTLAND GENERAL MONEY MARKET FUND 12 MUNICIPAL MONEY MARKET FUND
3 Risk/Return Summary: Investments, Risks and 12 Risk/Return Summary: Investments, Risks and
Performance Performance
5 Fee Table 14 Fee Table
6 Investment Objectives, Principal Investment 15 Investment Objectives, Principal Investment
Strategies and Related Risks Strategies and Related Risks
8 U.S. GOVERNMENT FUND 16 Principal Investment Strategies For All Funds
8 Risk/Return Summary: Investments, Risks and 19 Management, Organization and Capital Structure
Performance
10 Fee Table 19 Shareholder Information
11 Investment Objectives, Principal Investment 25 Dividends and Taxes
Strategies and Related Risks
28 Financial Highlights
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
CORTLAND GENERAL MONEY MARKET FUND
("CORTLAND GENERAL FUND")

RISK/RETURN SUMMARY: INVESTMENTS, RISKS AND PERFORMANCE

INVESTMENT OBJECTIVE
- --------------------------------------------------------------------------------
The CORTLAND GENERAL FUND seeks to provide its investors with as high a
level of current income as is consistent with preservation of capital and
liquidity.

PRINCIPAL INVESTMENT STRATEGIES
- --------------------------------------------------------------------------------
The CORTLAND GENERAL FUND intends to achieve its investment objective by
investing at least 80% of its assets in marketable securities and instruments
issued or guaranteed by the U.S. Government or by its agencies or
instrumentalities ("U.S. Government Obligations"), in bank instruments (domestic
and foreign), in trust instruments, in corporate commercial instruments and in
other corporate instruments maturing in thirteen months or less (collectively,
"Money Market Obligations").

The CORTLAND GENERAL FUND is a money market fund and seeks to maintain an
investment portfolio with a dollar-weighted average maturity of 90 days or less,
to value its investment portfolio at amortized cost and to maintain a net asset
value of $1.00 per share.

PRINCIPAL RISKS
- --------------------------------------------------------------------------------

o Although the CORTLAND GENERAL FUND seeks to preserve the value of your
investment at $1.00 per share, it is possible to lose money by investing
in the CORTLAND GENERAL FUND. The value of the CORTLAND GENERAL FUND's
shares and the securities held by the CORTLAND GENERAL FUND can each
decline in value due to changes in interest rates. For example, rising
interest rates cause the prices of the CORTLAND GENERAL FUND's securities
to decrease.

o An investment in the CORTLAND GENERAL FUND is not a bank deposit and is
not insured or guaranteed by the FDIC or any other governmental agency.

o Payment of interest and preservation of capital are dependent upon the
continuing ability of issuers and/or obligators of state, municipal,
public authority, and corporate debt obligations to meet their payment
obligations. If such issuers fail to make timely payments of interest and
principal, the CORTLAND GENERAL FUND's investments would decline in value.

o The CORTLAND GENERAL FUND may invest in obligations from foreign issuers,
it is subject to risks involving a lack of liquidity, imposition of
foreign taxes, and other adverse results due to political and economic
developments.

RISK/RETURN BAR CHART
- --------------------------------------------------------------------------------
The following bar chart and table may assist you in your decision to invest
in the CORTLAND GENERAL FUND. The bar chart shows how the Cortland General
Fund's annual returns have changed over the last ten calendar years. The table
shows the CORTLAND GENERAL FUND's average annual returns for the last one, five
and ten year periods, and since inception. While analyzing this information,
please note that the CORTLAND GENERAL FUND's past performance is not an
indicator of how it will perform in the future. The CORTLAND GENERAL FUND's
current 7-day yield may be obtained by calling toll-free at 1-800-221-3079.

3
<PAGE>
<TABLE>
<CAPTION>
CORTLAND GENERAL FUND (1), (2)

[GRAPHIC OMITTED]

<S> <C>
CALENDAR YEAR END % TOTAL RETURN

1998 4.71%
1997 4.71%
1996 4.53%
1995 5.05%
1994 3.31%
1993 2.55%
1992 3.16%
1991 5.49%
1990 7.62%
1989 8.69%
</TABLE>

(1) The Cortland General Fund's highest quarterly return was 2.20% for the
quarter ended June 30, 1989; the lowest quarterly return was 0.63% for the
quarter ended June 30, 1993.

(2) Securities dealers may charge a fee to investors for purchasing and
redeeming shares. Therefore, the net return to such investors may be less
than if they had invested in the Cortland General Fund directly.

<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS -CORTLAND GENERAL FUND
FOR THE PERIODS ENDED DECEMBER 31, 1998
<S> <C>

One Year 4.71%
Five Years 4.46%
Ten Years 4.97%
Since Inception [May 9, 1985] 5.43%
</TABLE>

4
<PAGE>
FEE TABLE
- --------------------------------------------------------------------------------
This table describes the fees and expenses that you may pay if you buy and hold
shares of the CORTLAND GENERAL FUND.

ANNUAL FUND OPERATING EXPENSES
(EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
<TABLE>
<CAPTION>
CORTLAND GENERAL FUND

<S> <C>
Management Fees 0.77%
Distribution and Service (12b-1) Fees 0.25%
Other Expenses 0.01%
-----
Total Annual Fund Operating Expenses 1.03%*
======
</TABLE>
* The Distributor has voluntarily waived a portion of the Distribution
support and services fee with respect to the CORTLAND GENERAL FUND. After
such waivers, the distribution support and services fee was 0.22%. The
actual Total Fund Operating Expenses were 1.00%. This fee waiver may be
terminated at any time at the option of the Fund.

<TABLE>
<CAPTION>
EXAMPLE

This Example is intended to help you compare the cost of investing in the Fund
with the cost of investing in other money market funds.

Assume that you invest $10,000 in the Fund for the time periods indicated and
then redeem all of your shares at the end of those periods. Also assume that
your investment has a 5% return each year and that the Fund's operating expenses
remain the same. Although your actual costs may be higher or lower, based on
these assumptions your costs would be:

<S> <C> <C> <C> <C>
1 Year 3 Years 5 Years 10 Years

$105 $328 $569 $1,259
</TABLE>

5
<PAGE>
INVESTMENT OBJECTIVES, PRINCIPAL INVESTMENT STRATEGIES AND RELATED RISKS

PRINCIPAL INVESTMENT STRATEGIES
- --------------------------------------------------------------------------------
The CORTLAND GENERAL FUND seeks to achieve its objective by investing at
least 80% of its assets in U.S. Government Obligations, in bank instruments
(domestic and foreign), in trust instruments, in corporate commercial
instruments and in other corporate instruments maturing in thirteen months or
less (collectively, "Money Market Obligations").

The CORTLAND GENERAL FUND may invest in bank instruments, which consist
mainly of certificates of deposit, bankers' acceptances and time deposits. The
CORTLAND GENERAL FUND may also invest in corporate instruments supported by bank
letters of credit. The CORTLAND GENERAL FUND generally limits investments in
bank instruments to (a) those which are fully insured as to principal by the
FDIC or (b) those issued by banks which at the date of their latest public
reporting have total assets in excess of $1.5 billion. However, the total assets
of a bank will not be the sole factor determining the Fund's investment
decisions, and the Fund may invest in bank instruments issued by institutions
which the Board of Directors believes present minimal credit risk.

The CORTLAND GENERAL FUND may invest up to 100% of its assets in obligations
issued by banks, and up to 10% of its assets in obligations issued by any one
bank, subject to the provisions of Rule 2a-7 of the Investment Company Act of
1940 (the "1940 Act"). If the bank is a domestic bank, it must be a member of
the FDIC. The CORTLAND GENERAL FUND may invest in U.S. dollar-denominated
obligations issued by foreign branches of domestic banks or foreign branches of
foreign banks ("Eurodollar" obligations) and domestic branches of foreign banks
("Yankee dollar" obligations). The CORTLAND GENERAL FUND will limit its
aggregate investments in foreign bank obligations, including Eurodollar
obligations and Yankee dollar obligations, to 25% of its total assets at the
time of purchase, provided that there is no limitation upon the Cortland General
Fund investments in (a) Eurodollar obligations, if the domestic parent of the
foreign branch issuing the obligation is unconditionally liable in the event
that the foreign branch fails to pay on the Eurodollar obligation for any
reason; and (b) Yankee dollar obligations, if the U.S. branch of the foreign
bank is subject to the same regulation as U.S. banks. Eurodollar, Yankee dollar
and other foreign bank obligations include time deposits, which are
non-negotiable deposits maintained in a bank for a specified period of time at a
stated interest rate. The CORTLAND GENERAL FUND will limit its purchases of time
deposits to those which mature in seven days or less, and will limit its
purchases of time deposits maturing in two to seven days to 10% of such Fund's
total assets at the time of purchase.

The CORTLAND GENERAL FUND may invest in short-term corporate obligations and
instruments, including but not limited to corporate commercial paper, notes,
bonds and debentures. Corporate commercial instruments generally consist of
short-term unsecured promissory notes issued by corporations. The Cortland
General Fund may also purchase variable amount master demand notes, which are
unsecured demand notes that permit investment of fluctuating amounts of money at
variable rates of interest pursuant to arrangements with issuers who meet the
foregoing quality criteria. The interest rate on a variable amount master demand
note is periodically redetermined according to a prescribed formula. Although
there is no secondary market in master demand notes, the payee may demand
payment of the principal and interest upon notice not exceeding five business or
seven calendar days. The CORTLAND GENERAL FUND may also purchase participation
interests in loans extended by banks to companies, provided that both such banks
and such companies meet the quality standards set forth above. (See the
Statement of Additional Information for information with respect to corporate
commercial instruments and bond ratings.) The CORTLAND GENERAL FUND may also
invest in fixed or variable rate debt units representing an

6
<PAGE>
undivided interest in a trust's distributions of principal and interest that a
trust receives from an underlying portfolio of bonds issued by a highly rated
corporate or U.S. Government agency issuer and/or payments from re-characterized
distributions made possible by the swap of certain payments due on the
underlying bonds. The CORTLAND GENERAL FUND's investment will be limited solely
to the debt units and in each case, must meet the credit quality standards under
Rule 2a-7 of the 1940 Act. Debt units will be purchased by the CORTLAND GENERAL
FUND as an institutional accredited investor pursuant to a private placement
memorandum. Sale of debt units will be effected pursuant to Rule 144A or other
exemptions from registration under the Securities Act of 1933, subject to the
eligibility of the purchaser and compliance with trust agreement requirements.
The Manager will monitor the liquidity of the debt units under the supervision
of Cortland's Board of Directors.

PRINCIPAL RISKS
- --------------------------------------------------------------------------------
The CORTLAND GENERAL FUND complies with industry-standard requirements on
the quality, maturity and diversification of its investments which are designed
to help maintain a $1.00 share price.

However, the CORTLAND GENERAL FUND is still subject to risks involving
changes in interest rates and the credit risk surrounding the issuers of Money
Market Obligations.

Rising interest rates cause the prices of debt securities to decrease, which
would lead to a loss in the value of the CORTLAND GENERAL FUND's investment.
Moreover, changes in interest rates may be caused by various economic factors or
political events.

In addition, the CORTLAND GENERAL FUND is exposed to the credit risk of the
institutions that issue Money Market Obligations. Changes in the credit quality
of the issuers could affect their ability to meet their payment obligations of
interest or principal. Any failure to make such payments could adversely affect
the value of the security and your investment in the CORTLAND GENERAL FUND.

Investors should also note that the CORTLAND GENERAL FUND will invest in
Eurodollar and Yankee dollar obligations. Eurodollar, Yankee dollar and other
foreign obligations involve special investment risks, including the possibility
that liquidity could be impaired because of future political and economic
developments, that the obligations may be less marketable than comparable
domestic obligations of domestic issuers, that a foreign jurisdiction might
impose withholding taxes on interest income payable on those obligations, that
deposits may be seized or nationalized, that foreign governmental restrictions
such as exchange controls may be adopted which might adversely affect the
payment of principal of and interest on those obligations, that the selection of
foreign obligations may be more difficult because there may be less information
publicly available concerning foreign issuers, that there may be difficulties in
enforcing a judgment against a foreign issuer or that the accounting, auditing
and financial reporting standards, practices and requirements applicable to
foreign issuers may differ from those applicable to domestic issuers. In
addition, foreign banks are not subject to examination by United States
Government agencies or instrumentalities.

7
<PAGE>
U.S. GOVERNMENT FUND ("GOVERNMENT FUND")

RISK/RETURN SUMMARY: INVESTMENTS, RISKS AND PERFORMANCE

INVESTMENT OBJECTIVE
- --------------------------------------------------------------------------------
The GOVERNMENT FUND seeks to provide its investors with as high a level of
current income as is consistent with the preservation of capital and liquidity.

PRINCIPAL INVESTMENT STRATEGIES
- --------------------------------------------------------------------------------
The GOVERNMENT FUND intends to achieve its investment objective by investing
65% of its assets in short-term marketable securities and instruments issued or
guaranteed by the U.S. Government or by its agencies or instrumentalities (U.S.
Government Obligations").

The GOVERNMENT FUND is a money market GOVERNMENT FUND and seeks to maintain
an investment portfolio with a dollar-weighted average maturity of 90 days or
less, to value its investment portfolio at amortized cost and to maintain a net
asset value of $1.00 per share.

PRINCIPAL RISKS
- --------------------------------------------------------------------------------
o Although the GOVERNMENT FUND seeks to preserve the value of your
investment at $1.00 per share, it is possible to lose money by investing
in the GOVERNMENT FUND. The value of the GOVERNMENT FUND's shares and the
securities held by the GOVERNMENT FUND can each decline in value due to
changes in interest rates. For example, rising interest rates cause the
prices of the GOVERNMENT FUND's securities to decrease

o An investment in the GOVERNMENT FUND is not a bank deposit and is not
insured or guaranteed by the FDIC or any other governmental agency.

o The GOVERNMENT FUND is exposed to the credit risk of the institutions that
issue U.S. Government Obligations. Changes in the credit quality of the
issuers could affect their ability to meet their payment obligations of
interest or principal. Any failure to make such payments could adversely
affect the value of the security and your investment in the GOVERNMENT
FUND.

RISK/RETURN BAR CHART
- --------------------------------------------------------------------------------
The following bar chart and table may assist you in your decision to invest
in the GOVERNMENT FUND. The bar chart shows how the GOVERNMENT FUND's annual
returns have changed over the last ten calendar years. The table shows the
GOVERNMENT FUND's average annual returns for the last one, five and ten year
periods, and since inception. While analyzing this information, please note that
the GOVERNMENT FUND's past performance is not an indicator of how the Government
Fund will perform in the future. The GOVERNMENT FUND's current 7-day yield may
be obtained by calling toll-free at 1-800-221-3079.

8
<PAGE>
<TABLE>
<CAPTION>
GOVERNMENT FUND (1), (2)

[GRAPHIC OMITTED]

<S> <C>
CALENDAR YEAR END % TOTAL RETURN

1998 4.52%
1997 4.54%
1996 4.39%
1995 4.90%
1994 3.27%
1993 2.56%
1992 3.18%
1991 5.46%
1990 7.31%
1989 8.35%
</TABLE>

(1) The GOVERNMENT FUND's highest quarterly return was 2.11% for the quarter
ended June 30, 1989; the lowest quarterly return was 0.62% for the quarter
ended June 30, 1993.

(2) Securities dealers may charge a fee to investors for purchasing and
redeeming shares. Therefore, the net return to such investors may be less
than if they had invested in the GOVERNMENT FUND directly.

<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS - GOVERNMENT FUND
FOR THE PERIODS ENDED DECEMBER 31, 1998

<S> <C>
One Year 4.52%
Five Years 4.32%
Ten Years 4.83%
Since Inception [May 9, 1985] 5.17%

</TABLE>

9
<PAGE>
FEE TABLE

This table describes the fees and expenses that you may pay if you buy and hold
shares of the GOVERNMENT FUND.
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)

GOVERNMENT FUND

<S> <C>
Management Fees 0.77%
Distribution and Service (12b-1) Fees 0.25%
Other Expenses 0.02%
-----
Total Annual Fund Operating Expenses 1.04%*
======
</TABLE>

* The Distributor has voluntarily waived a portion of the Distribution
support and services fee with respect to the GOVERNMENT FUND. After such
waivers, the distribution support and services fee was 0.21%. The actual
Total Fund Operating Expenses were 1.00%. This fee waiver may be terminated
at any time at the option of the Fund.

<TABLE>
<CAPTION>
EXAMPLE

This Example is intended to help you compare the cost of investing in the
GOVERNMENT FUND with the cost of investing in other money market funds.

Assume that you invest $10,000 in the GOVERNMENT FUND for the time periods
indicated and then redeem all of your shares at the end of those periods. Also
assume that your investment has a 5% return each year and that the GOVERNMENT
FUND's operating expenses remain the same. Although your actual costs may be
higher or lower, based on these assumptions your costs would be:

<S> <C> <C> <C> <C>
1 Year 3 Years 5 Years 10 Years

$106 $331 $574 $1,271
</TABLE>

10
<PAGE>
INVESTMENT OBJECTIVES, PRINCIPAL INVESTMENT STRATEGIES AND RELATED RISKS

INVESTMENT OBJECTIVE
- --------------------------------------------------------------------------------
The GOVERNMENT FUND seeks to provide its investors with a high a level of
current income as is consistent with preservation of capital and liquidity.
There can be no assurance the GOVERNMENT FUND will achieve its investment
objective.

PRINCIPAL INVESTMENT STRATEGIES
- --------------------------------------------------------------------------------
The GOVERNMENT FUND endeavors to achieve its objective by investing at least
65% of its assets in short-term "U.S. Government Obligations." U.S. Government
Obligations consist of marketable securities and instruments issued or
guaranteed by the U.S. Government or by its agencies or instrumentalities.
Direct obligations are issued by the U.S. Treasury and include bills,
certificates of indebtedness, notes and bonds. Obligations of U.S. Government
agencies and instrumentalities ("Agencies") are issued by government-sponsored
agencies and enterprises acting under authority of Congress. Although
obligations of federal agencies and instrumentalities are not debts of the U.S.
Treasury, in some cases payment of interest and principal on such obligations is
guaranteed by the U.S. Government, e.g., obligations of the Federal Housing
Administration, the Export-Import Bank of the United States, the Small Business
Administration, the Government National Mortgage Association, the General
Services Administration and the Maritime Administration; in other cases payment
of interest and principal is not guaranteed, e.g., obligations of the Federal
Home Loan Bank System and the Federal Farm Credit Bank. The GOVERNMENT FUND will
invest in Agencies which are not guaranteed or backed by the full faith and
credit of the U.S. Government only when the Fund's Board of Directors is
satisfied that the credit risk with respect to a particular agency or
instrumentality is minimal.

PRINCIPAL RISKS
- --------------------------------------------------------------------------------
The GOVERNMENT FUND complies with industry-standard requirements on the
quality, maturity and diversification of its investments which are designed to
help maintain a $1.00 share price.

However, the GOVERNMENT FUND is still subject to risks involving changes in
interest rates and the credit risk surrounding the issuers of U.S. Government
Obligations.

Rising interest rates cause the prices of debt securities to decrease, which
would lead to a loss in the value of the GOVERNMENT FUND's investment. Moreover,
changes in interest rates may be caused by various economic factors or political
events.

In addition, the GOVERNMENT FUND is exposed to the credit risk of the
institutions that issue U.S. Government Obligations. Changes in the credit
quality of the issuers could affect their ability to meet their payment
obligations of interest or principal. Any failure to make such payments could
adversely affect the value of the security and your investment in the GOVERNMENT
FUND.

11
<PAGE>
MUNICIPAL MONEY MARKET FUND ("MUNICIPAL FUND")

RISK/RETURN SUMMARY: INVESTMENTS, RISKS AND PERFORMANCE

INVESTMENT OBJECTIVE
- --------------------------------------------------------------------------------
The MUNICIPAL FUND seeks to provide its investors with as high a level of
current income exempt from federal income taxes as is consistent with the
preservation of capital and liquidity.

PRINCIPAL INVESTMENT STRATEGIES
- --------------------------------------------------------------------------------
The MUNICIPAL FUND intends to achieve its investment objective by investing
principally in short-term, high quality, debt obligations issued by states and
municipal governments and their authorities, agencies and political subdivisions
("Municipal Securities").

The MUNICIPAL FUND is a money market fund and seeks to maintain an
investment portfolio with a dollar-weighted average maturity of 90 days or less,
to value its investment portfolio at amortized cost and to maintain a net asset
value of $1.00 per share.

PRINCIPAL RISKS
- --------------------------------------------------------------------------------
o Although the MUNICIPAL FUND seeks to preserve the value of your investment
at $1.00 per share, it is possible to lose money by investing in the
MUNICIPAL FUND. The value of the MUNICIPAL FUND's shares and the
securities held by the MUNICIPAL FUND can each decline in value due to
changes in interest rates. For example, rising interest rates will cause
the prices of the MUNICIPAL FUND's securities to decrease.

o An investment in the MUNICIPAL FUND is not a bank deposit and is not
insured or guaranteed by the FDIC or any other governmental agency.

o Payment of interest and preservation of capital are dependent upon the
continuing ability of issuers and/or obligators of state, municipal and
public authority debt obligations to meet their payment obligations. If
such issuers fail to make timely payments of interest and principal, the
MUNICIPAL FUND's investments would decline in value.

RISK/RETURN BAR CHART
- --------------------------------------------------------------------------------
The following bar chart and table may assist you in your decision to invest
in the MUNICIPAL FUND. The bar chart shows how the MUNICIPAL FUND's annual
returns have changed over the last ten calendar years. The table shows the
MUNICIPAL FUND's average annual returns for the last one, five and ten year
periods, and since inception. While analyzing this information, please note that
the MUNICIPAL FUND's past performance is not an indicator of how it will perform
in the future. The MUNICIPAL FUND's current 7-day yield may be obtained by
calling toll-free at 1-800-221-3079.

12
<PAGE>
<TABLE>
<CAPTION>
MUNICIPAL FUND (1), (2)

[GRAPHIC OMITTED]

<S> <C>
CALENDAR YEAR END % TOTAL RETURN

1998 2.64%
1997 2.82%
1996 2.70%
1995 3.18%
1994 2.24%
1993 1.85%
1992 2.48%
1991 4.18%
1990 5.37%
1989 5.90%
</TABLE>

(1) The MUNICIPAL FUND's highest quarterly return was 1.54% for the quarter
ended June 30, 1989; the lowest quarterly return was 0.43% for the quarter
ended March 31, 1994.

(2) Securities dealers may charge a fee to investors for purchasing and
redeeming shares. Therefore, the net return to such investors may be less
than if they had invested in the Municipal Fund directly.

<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS - MUNICIPAL FUND
FOR THE PERIODS ENDED DECEMBER 31, 1998

<S> <C>
One Year 2.64%
Five Years 2.72%
Ten Years 3.33%
Since Inception [June 10, 1985] 3.58%

</TABLE>

13
<PAGE>
FEE TABLE
- --------------------------------------------------------------------------------
This table describes the fees and expenses that you may pay if you buy and hold
shares of the MUNICIPAL FUND.
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
MUNICIPAL FUND

<S> <C>
Management Fees 0.77%
Distribution and Service (12b-1) Fees 0.25%
Other Expenses 0.02%
-----
Total Annual Fund Operating Expenses 1.04%*
======
</TABLE>

* The Distributor has voluntarily waived a portion of the Distribution
support and services fee with respect to the MUNICIPAL FUND. After such
waivers, the distribution support and services fee was 0.21%. The actual
Total Fund Operating Expenses were 1.00%. This fee waiver may be terminated
at any time at the option of the Fund.

<TABLE>
<CAPTION>
EXAMPLE

This Example is intended to help you compare the cost of investing in the
MUNICIPAL FUND with the cost of investing in other money market funds.

Assume that you invest $10,000 in the MUNICIPAL FUND for the time periods
indicated and then redeem all of your shares at the end of those periods. Also
assume that your investment has a 5% return each year and that the MUNICIPAL
FUND's operating expenses remain the same. Although your actual costs may be
higher or lower, based on these assumptions your costs would be:

<S> <C> <C> <C> <C>
1 Year 3 Years 5 Years 10 Years

$106 $331 $574 $1,271

</TABLE>

14
<PAGE>
INVESTMENT OBJECTIVES, PRINCIPAL INVESTMENT STRATEGIES AND RELATED RISKS

INVESTMENT OBJECTIVE
- --------------------------------------------------------------------------------
The MUNICIPAL FUND's investment objective is to seek to provide its
investors with as high a level of current income exempt from federal income tax
as is consistent with the preservation of capital and liquidity.

PRINCIPAL INVESTMENT STRATEGIES
- --------------------------------------------------------------------------------
The MUNICIPAL FUND will invest primarily (i.e., at least 80%) in short-term,
high quality, tax-exempt, Municipal Securities.

The MUNICIPAL FUND will invest in Municipal Securities which include debt
obligations issued to obtain funds for various public purposes, including the
construction of a wide range of public facilities, the refunding of outstanding
obligations, the obtaining of funds for general operating expenses and lending
such funds to other public institutions and facilities. In addition, certain
types of private activity bonds or 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 facilities. Such
obligations are considered to be Municipal Securities provided that the interest
paid thereon generally qualifies as exempt from federal income tax in the
opinion of bond counsel. However, interest on Municipal Securities may give rise
to federal alternative minimum tax liability and may have other federal income
tax consequences.

The MUNICIPAL FUND also may purchase any Municipal Security which depends on
the credit of the U.S. Government and may invest in Municipal Securities which
are not rated if, in the opinion of Cortland's investment advisor, and in
accordance with procedures established by the Board of Directors, such
securities possess creditworthiness comparable to those rated obligations in
which the MUNICIPAL FUND may invest. The MUNICIPAL FUND may, from time to time,
on a temporary or defensive basis, invest in short-term, high quality U.S.
Government Obligations, Money Market Obligations and repurchase agreements.
Income from any such temporary investments would be taxable to shareholders as
ordinary income. It is the present policy of the MUNICIPAL FUND to invest only
in securities the interest on which is tax-exempt. Moreover, the MUNICIPAL FUND
will endeavor to be invested at all times in Municipal Securities. It is a
fundamental policy of the MUNICIPAL FUND that its assets will be invested so
that at least 80% of its income will be exempt from federal income taxes. The
MUNICIPAL FUND may from time to time hold cash reserves.

The MUNICIPAL FUND's investment manager considers the following factors when
buying and selling securities for the portfolio: (i) availability of cash, (ii)
redemption requests, (iii) yield management, and (iv) credit management.

In order to maintain a share price of $1.00, the MUNICIPAL FUND must comply
with certain industry regulations. Other requirements pertain to the maturity
and credit quality of the securities in which the MUNICIPAL FUND may invest. The
MUNICIPAL FUND will only invest in securities which have or are deemed to have a
remaining maturity of 397 days or less. Also, the average maturity for all
securities contained in the MUNICIPAL FUND, on a dollar-weighted basis, will be
90 days or less.

The MUNICIPAL FUND will only invest in either securities which have been
rated (or whose issuers have been rated) in the highest short-term rating
category by nationally recognized statistical rating organizations, or are
unrated securities but which have been determined by the MUNICIPAL FUND's Board
of Directors to be of comparable quality.

Subsequent to its purchase by the MUNICIPAL FUND, the quality of an
investment may cease to be rated or its rating may be reduced below the minimum
required for purchase by the MUNICIPAL FUND. If this occurs, the Board of
Directors of the MUNICIPAL FUND shall reassess the security's credit risks and
shall take such action as it determines is in the best interest of the Municipal
Fund and its shareholders. Reassessment is not required, however, if the
security is disposed of or matures

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within five business days of the Manager becoming aware of the new rating and
provided further that the Board of Directors is subsequently notified of the
Manager's actions.

Although the MUNICIPAL FUND will attempt to invest 100% of its total assets
in Municipal Securities, the MUNICIPAL FUND reserves the right to invest up to
20% of its total assets in taxable securities whose interest income is subject
to regular federal, state and local income tax, as well as the Federal
alternative minimum tax. The kinds of taxable securities in which the Municipal
Fund may invest are limited to specific types of short-term, fixed income
securities.

As a temporary defensive measure the MUNICIPAL FUND may, from time to time,
invest in securities that are inconsistent with its principal investment
strategies in an attempt to respond to adverse market, economic, political or
other conditions as determined by the Manager. Such a temporary defensive
position may prevent the MUNICIPAL FUND from achieving its investment objective.

PRINCIPAL RISKS
- --------------------------------------------------------------------------------
The MUNICIPAL FUND complies with industry-standard requirements on the
quality, maturity and diversification of its investments which are designed to
help maintain a $1.00 share price.

However, the MUNICIPAL FUND is still subject to risks involving changes in
interest rates and the credit risk surrounding the issuers of Municipal
Securities.

Rising interest rates cause the prices of debt securities to decrease, which
would lead to a loss in the value of the MUNICIPAL FUND's investment. Moreover,
changes in interest rates may be caused by various economic factors or political
events.

In addition, the MUNICIPAL FUND is exposed to the credit risk of the
institutions that issue Municipal Securities. Changes in the credit quality of
the issuers could affect their ability to meet their payment obligations of
interest or principal. Any failure to make such payments could adversely affect
the value of the security and your investment in the MUNICIPAL FUND.

PRINCIPAL INVESTMENT STRATEGIES FOR ALL FUNDS

The Cortland General Money Market Fund, U.S. GOVERNMENT FUND , and Municipal
Money Market Fund (each, a "Fund" collectively, the "Funds") will invest only in
U.S. dollar-denominated securities which are rated in one of the two highest
rating categories for debt obligations by at least two nationally recognized
statistical rating organizations ("NRSROs") (or one NRSRO 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 Board of
Directors. The NRSROs currently rating instruments of the type one or more of
the Funds may purchase are Moody's Investors Service, Inc., Standard & Poor's
Rating Services, a division of the McGraw-Hill Companies, Duff and Phelps, Inc.,
Fitch Investors Service, Inc., IBCA Limited and IBCA Inc.

Investments in rated securities not rated in the highest category by at
least two NRSROs (or one NRSRO if the instrument was rated by only one such
organization), and unrated securities not determined by the Board of Directors
to be comparable to those rated in the highest category, will be limited to 5%
of a Fund's total assets, with the investment in any such issuer being limited
to not more than the greater of 1% of a Fund's total assets or $1 million. A
Fund may invest in obligations issued or guaranteed by the U.S. Government
without any such limitation.

Each Fund invests in such high quality debt obligations with relatively
short maturities. Each Fund seeks to achieve its objective by investing in
different types of securities, as described below. Unless otherwise stated, the
investment policies and restrictions set forth below are not fundamental
policies, and may be changed by the Board of Directors, with notice to
shareholders.

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The securities in which the Funds invest may not yield as high a level of
current income as longer term or lower grade securities, which generally have
less liquidity and greater fluctuation in value. The values of the securities in
which the Funds invest fluctuate based upon interest rates, the financial
stability of the issuers and market factors.

Cortland may enter into the following arrangements with respect to all three
Funds. Repurchase Agreements: under a repurchase agreement, the purchaser (for
example, one of the Funds) acquires ownership of an obligation and the seller
agrees, at the time of the sale, to repurchase the obligation at a mutually
agreed upon time and price, thereby determining the yield during the purchaser's
holding period. This arrangement results in a fixed rate of return insulated
from market fluctuations during such period. Although the underlying collateral
for repurchase agreements may have maturities exceeding one year, a Fund will
not enter into a repurchase agreement if as a result of such investment more
than 10% of such Fund's total assets would be invested in illiquid securities,
including repurchase agreements which expire in more than seven days. A Fund
may, however, enter into "continuing contract" or "open" repurchase agreements
under which the seller is under a continuing obligation to repurchase the
underlying obligation from that Fund on demand and the effective interest rate
is negotiated on a daily basis.

In general, a Fund will enter into repurchase agreements only with domestic
banks with total assets of at least $1.5 billion or with primary dealers in U.S.
Government securities. However, the total assets of a bank will not be the sole
factor determining the Fund's investment decisions, and the Fund may enter into
repurchase agreements with other institutions which the Board of Directors
believes present minimal credit risk. Nevertheless, if the seller of a
repurchase agreement fails to repurchase the obligation in accordance with the
terms of the agreement, the Fund which entered into the repurchase agreement may
incur a loss to the extent that the proceeds it realized on the sale of the
underlying obligation are less than the repurchase price. Repurchase agreements
may be considered loans to the seller of the underlying security. Income with
respect to repurchase agreements is not tax-exempt.

Securities purchased pursuant to a repurchase agreement are held by the
Fund's custodian and (i) are recorded in the name of the Fund with the Federal
Reserve Book-Entry System, or (ii) the Fund receives daily written confirmation
of each purchase of a security and a receipt from the custodian. The Funds
purchase securities subject to a repurchase agreement only when the purchase
price of the security acquired is equal to or less than its market price at the
time of purchase.

A Fund may also enter into reverse repurchase agreements which involve the
sale by a Fund of a portfolio security at an agreed upon price, date and
interest payment. A Fund will enter into reverse repurchase agreements for
temporary or defensive purposes to facilitate the orderly sale of portfolio
securities, to accommodate abnormally heavy redemption requests should they
occur, or in some cases as a technique to enhance income. A Fund will use
reverse repurchase agreements when the interest income to be earned from the
investment of the proceeds of the transaction is greater than the interest
expense of the reverse repurchase transaction. A Fund will enter into reverse
repurchase agreements only in amounts up to 10% of the value of its total assets
at the time of entering into such agreements. Reverse repurchase agreements
involve the risk that the market value of securities retained by a Fund in lieu
of liquidation may decline below the repurchase price of the securities sold by
the Fund which it is obligated to repurchase. This risk, if encountered, could
cause a reduction in the net asset value of a Fund's shares. Reverse repurchase
agreements are considered to be borrowings under the 1940 Act. As such, they are
subject to limitations on the level of Fund assets that may be invested in such
instruments.

Delayed delivery agreements are commitments by any of the Funds to dealers
or issuers to acquire securities beyond the customary same-day settlement for
money market instruments. These commitments fix the payment price and interest

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<PAGE>
rate to be received on the investment. Delayed delivery agreements will not be
used as a speculative or leverage technique. Rather, from time to time, the
Funds' investment advisor can anticipate that cash for investment purposes will
result from scheduled maturities of existing portfolio instruments or from net
sales of shares of a Fund; therefore, to assure that a Fund will be as fully
invested as possible in instruments meeting that Fund's investment objective, a
Fund may enter into delayed delivery agreements, but only to the extent of
anticipated funds available for investment during a period of not more than five
business days.

Money Market Obligations and Municipal Securities are sometimes offered on a
"when-issued" basis, that is, the date for delivery of and payment for the
securities is not fixed at the date of purchase, but is set after the securities
are issued (normally within forty-five days after the date of the transaction).
The payment obligation and the interest rate that will be received on the
securities are fixed at the time the buyer enters into the commitment. A Fund
will only make commitments to purchase such Money Market Instruments or
Municipal Securities with the intention of actually acquiring such securities,
but a Fund may sell these securities before the settlement date if it is deemed
advisable.

If a Fund enters into a delayed delivery agreement or purchases a
when-issued security, that Fund will direct Cortland's custodian bank to place
cash or other high grade securities (including Money Market Obligations and
Municipal Securities) in a segregated account of such Fund in an amount equal to
its delayed delivery agreements or when-issued commitments. If the market value
of such securities declines, additional cash or securities will be placed in the
account on a daily basis so that the market value of the account will equal the
amount of such Fund's delayed delivery agreements and when-issued commitments.
To the extent that funds are in a segregated account, they will not be available
for new investment or to meet redemptions. Investment in securities on a
when-issued basis and use of delayed delivery agreements may increase a Fund's
exposure to market fluctuation; may increase the possibility that the Municipal
Fund will incur a short-term gain subject to federal taxation; or may increase
the possibility that a Fund will incur a short-term loss, if the Fund must
engage in portfolio transactions in order to honor a when-issued commitment or
accept delivery of a security under a delayed delivery agreement. The Funds will
employ techniques designed to minimize these risks.

No additional delayed delivery agreements or when-issued commitments will be
made if more than 25% of a Fund's net assets would become so committed. The
Funds will enter into when-issued and delayed delivery transactions only when
the time period between trade date and settlement date is at least 30 days and
not more than 120 days.

The MUNICIPAL FUND may attempt to improve its portfolio liquidity by
assuring same-day settlements on portfolio sales (and thus facilitate the
same-day payment of redemption proceeds) through the acquisition of "Stand-by
Commitments." A Stand-by Commitment is a right of the MUNICIPAL FUND, when it
purchases Municipal Securities for its portfolio from a broker, dealer or other
financial institution, to sell the same principal amount of such securities back
to the seller, at the MUNICIPAL FUND's option, at a specified price. Stand-by
Commitments are also sometimes known as "puts." The MUNICIPAL FUND will acquire
Stand-by Commitments solely to facilitate portfolio liquidity and does not
intend to exercise its rights thereunder for trading purposes. The acquisition
or exercisability of a Stand-by Commitment by the MUNICIPAL FUND will not affect
the valuation or the average weighted maturity of its underlying portfolio
securities. See "Investment Programs and Restrictions - Stand-by Commitments" in
the Statement of Additional Information for additional information with respect
to Stand-by Commitments.

Consistent with the objective of stability of principal, each Fund attempts
to maintain a constant net asset value per share of $1.00 and, to this end,
values its assets by the amortized cost method and rounds its per share net
asset value to the nearest whole cent in compliance with applicable rules and
regulations. Accordingly, the Funds invest in Money Market

18
<PAGE>
Obligations and Municipal Securities having remaining maturities of thirteen
months or less and maintain a weighted average maturity for each Fund of 90 days
or less. However, there can be no assurance that a Fund's net asset value per
share of $1.00 will be maintained.

YEAR 2000
- --------------------------------------------------------------------------------

As the year 2000 approaches, an issue has emerged regarding how existing
application software programs and operating systems can accommodate this date
value. Failure to adequately address this issue could have potentially serious
repercussions. The Manager is in the process of working with the Fund's service
providers to prepare for the year 2000. Based on information currently
available, the Manager does not expect that the Fund will incur material costs
to be year 2000 compliant. Although the Manager does not anticipate that the
year 2000 issue will have a material impact on the Fund's ability to provide
service at current levels, there can be no assurance that steps taken in
preparation for the year 2000 will be sufficient to avoid an adverse impact on
the Fund. The year 2000 Problem may also adversely affect issuers of the
securities contained in the Fund, to varying degrees based upon various factors,
and thus may have a corresponding adverse effect on the Fund's performance. The
Manager is unable to predict what effect, if any, the year 2000 Problem will
have on such issuers.

MANAGEMENT, ORGANIZATION AND CAPITAL STRUCTURE

The Funds' investment adviser is Reich & Tang Asset Management L.P. (the
"Manager"). The Manager's principal business office is located at 600 Fifth
Avenue, New York, NY 10020. As of June 30, 1999, the Manager was the investment
manager, advisor or supervisor with respect to assets aggregating in excess of
$13.6 billion. The Manager has been an investment adviser since 1970 and
currently is manager of eighteen other registered investment companies and also
advises pension trusts, profit-sharing trusts and endowments.

Pursuant to the Investment Management Contract, the Manager manages the
Fund's portfolio of securities and makes decisions with respect to the purchase
and sale of investments, subject to the general control of the Board of
Directors of the Fund.

The Funds pay the Manager an annual fee, calculated daily and paid monthly,
of .80% of the first $500 million of Cortland's average daily net assets, plus
.775% of the next $500 million of Cortland's average daily net assets, plus
.750% of the next $500 million of Cortland's average daily net assets, plus
.725% of Cortland's average daily net assets in excess of $1.5 billion.
Cortland's comprehensive fee is higher than most other money market mutual funds
which do not offer services that Cortland offers. However, most other funds bear
expenses that are being borne for Cortland by the Manager. During the fiscal
year ended March 31, 1999, Cortland paid the Manager fees which represented .77%
of the CORTLAND GENERAL FUND's average daily net assets, .77% of the Government
Fund's average daily net assets and .77% of the MUNICIPAL FUND's average daily
net assets, respectively, on an annualized basis. During such year, expenses
borne by each of the Funds, including fees paid to the Manager, amounted to
1.00% of the CORTLAND GENERAL FUND's average daily net assets, 1.00% of the
GOVERNMENT FUND's average daily net assets and 1.00% of the MUNICIPAL FUND's
average daily net assets, respectively, on an annualized basis.

SHAREHOLDER INFORMATION

Each Fund sells and redeems its shares on a continuing basis at their net
asset value and does not impose a charge for either sales or redemptions. All
transactions in Fund shares are effected through the Funds' transfer agent, who
accepts orders for purchases and redemptions from securities dealers and from
investors directly.

GENERAL INFORMATION ON PURCHASES

Shares of each Fund may be purchased from Cortland or through securities
dealers which have entered into dealer agreements with Reich & Tang
Distributors, Inc. (the "Distributor"), 600 Fifth

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<PAGE>
Avenue, New York, New York 10020, or by institutions which maintain accounts
with Cortland on behalf of their customers. Orders for purchase of shares are
accepted only on a "business day of Cortland" which means any day on which both
the New York Stock Exchange and Investors Fiduciary Trust Company (the
"Custodian"), Cortland's custodian, are open for business. It is expected that
the New York Stock Exchange and/or the Custodian will be closed on Saturdays and
Sundays, New Year's Day, Martin Luther King Jr. Day, Presidents' Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Columbus Day, Veterans' Day,
Thanksgiving Day and Christmas. The minimum initial purchase made directly
through Cortland may be as low as $1,000 and subsequent purchases will be
accepted in any amount. Participating brokers may impose different initial
and/or subsequent minimum investment requirements. For further information,
contact the Distributor or your participating broker.

An order to purchase Fund shares is effective only when it is received in
proper form and payment in the form of Federal funds (member bank deposits with
the Federal Reserve Bank) is received by Cortland for investment. Cortland
reserves the right to reject any order for the purchase of shares. Fund shares
are purchased or exchanged at the net asset value next determined after
acceptance of the order. Net asset value is normally determined at 12 noon
Eastern time on each business day of Cortland. Because Cortland uses the
amortized cost method of valuing the securities held by each Fund and rounds
each Fund's per share net asset value to the nearest whole cent, it is
anticipated that the net asset value of the shares of each Fund will remain
constant at $1.00 per share. However, Cortland makes no assurance that it can
maintain a $1.00 net asset value per share. In order to earn dividends the same
day, purchase orders must be received before 12 noon Eastern time; otherwise,
the purchase of shares will occur the following business day. Payments
transmitted by check are normally converted into federal funds within one
business day and are accepted subject to collection at full face amount.
Cortland will not issue share certificates but will record investor holdings on
the books of Cortland in noncertificate form and regularly advise the
shareholder of his ownership position.

There is no sales charge to the investor on purchases placed directly with
Cortland. However, the costs of distributing Fund shares are borne in part by
Cortland and in part by the Manager.

Purchases may be made by following the procedures specified below. If these
purchase procedures are not followed, the processing of orders may be delayed.

PURCHASES THROUGH SECURITIES DEALERS

Investors may submit their initial and subsequent investments directly
through participating securities dealers. For an initial investment, investors
should submit payment and, if required, a completed Investor Application to
their participating securities dealer, who will transmit such payment to
Cortland on behalf of the investor and supply Cortland with required account
information. Some securities dealers may charge a fee for this service. For
customers of securities dealers who offer the service, investors may have their
"free-credit" cash balances automatically invested in Cortland shares on a daily
basis depending upon which Fund has been designated by the investor as the
primary Fund for his account. Automatic purchases and redemptions of Cortland
shares are treated on the same basis as direct purchases and redemptions from
Cortland. "Free-credit" cash balances begin to earn dividends on the first day
following the date that the share purchase or exchange order is effected and
through the date that a redemption order is effected. For further information
and for details concerning the automatic purchase and redemption of Cortland
shares, contact your participating securities dealer or the Distributor.
Cortland is not responsible for any delay caused by securities dealers in
forwarding an order to Cortland. Securities dealers have a responsibility to
transmit orders promptly.

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<PAGE>
PURCHASES THROUGH CORTLAND

You may purchase shares of Cortland by wire and by mail. Cortland will only
accept direct orders from investors through the Distributor or through
securities dealers that have entered into dealer agreements with the Distributor
and are registered to sell securities in such state. The initial purchase must
be accompanied by a completed Investor Application available from the
Distributor.

INITIAL PURCHASE OF SHARES

MAIL

Investors may send a check made payable to "Cortland" along with a completed
subscription order form to:

Mutual Funds Group
P.O. Box 13232
Newark, NJ 07101-3232

Checks are accepted subject to collection at full value in United States
currency. Payment by a check drawn on any member bank of the Federal Reserve
System can normally be converted into Federal Funds within one business day
after receipt of the check. Checks drawn on a nonmember bank may take
substantially longer to convert into Federal Funds and to be invested in Fund
shares. An investor's subscription will not be accepted until the Fund receives
Federal Funds.

BANK WIRE

To purchase shares of the Fund using the wire system for transmittal of
money among banks, an investor should first obtain a new account number by
telephoning the Fund at either (212) 830-5280 (within New York State) or at
(800) 433-1918 (outside New York State) and then instruct a member commercial
bank to wire money immediately to:

Investors Fiduciary Trust Company
ABA# 101003621
Reich & Tang Services, Inc.
DDA# 890752-954-6

The investor should then promptly complete and mail the subscription order
form.

An investor planning to wire funds should instruct his bank to wire before
12 noon, New York City time, on the same day. There may be a charge by the
investor's bank for transmitting the money by bank wire, and there also may be a
charge for use of Federal Funds. The Fund does not charge investors in the Fund
for its receipt of wire transfers. Payment in the form of a "bank wire" received
prior to 12 noon, New York City time, on a Fund Business Day will be treated as
a Federal Funds payment received on that day.

PERSONAL DELIVERY

Deliver a check made payable to "Cortland" along with a completed
subscription order form to:

Reich & Tang Funds
600 Fifth Avenue - 9th Floor
New York, New York 10020

SUBSEQUENT PURCHASES OF SHARES

There is a $50 minimum for each subsequent purchase. All payments should
clearly indicate the shareholder's account number. Provided that the information
on the subscription order form on file with the Fund is still applicable, a
shareholder may reopen an account without filing a new subscription order form
at any time during the year the shareholder's account is closed or during the
following calendar year.

Subsequent purchases can be made either by bank wire or by personal
delivery, as indicated above or by mailing a check to the Fund's transfer agent
at:

Mutual Funds Group
P.O. Box 13232
Newark, New Jersey 07101-3232

ELECTRONIC FUNDS TRANSFERS (EFT)AND DIRECT DEPOSIT PRIVILEGE

You may purchase shares of Cortland (minimum of $50) by having salary,
dividend payments, interest payments or any other payments designated by you, or
by having federal salary, social security, or certain veteran's, military or
other payments from the federal government,

21
<PAGE>
automatically deposited into your Cortland account. You may deposit as much of
such payments as you elect. To enroll in this program, you must file with
Cortland a completed EFT Application and/or a Direct Deposit Sign-Up Form for
each type of payment that you desire to include in the privilege. The
appropriate form may be obtained from your broker or Cortland. You may elect at
any time to terminate your participation by notifying in writing the appropriate
depositing entity and/or federal agency. Death or legal incapacity will
terminate your participation in the privilege. Further, Cortland may terminate
your participation upon 30 days' notice to you.

HOW TO REDEEM SHARES

You may redeem your shares, in whole or in part, on any day on which the
Fund's net asset value is calculated. Shares are redeemed at the net asset value
next determined after receipt of proper notice of redemption. If you redeem all
of your shares, you will receive payment of all dividends declared but unpaid
through the date of redemption. If you redeem only a portion of the shares in
your account, the dividends declared but unpaid on the shares redeemed will not
be distributed to you until the next regular dividend payment date. If your
redemption order is received prior to 12 noon Eastern time, the redemption will
be effective on that day and Cortland will endeavor to transmit payment that
same business day. If the notice of redemption is received after 12 noon and
prior to 4:15 p.m. Eastern time, the redemption will be at the 4:15 p.m. net
asset value and payment will be made on the next business day.

Some of the redemption procedures described below may require you to
complete and file an authorization form in advance. If purchases are made by
check, redemption of those shares by wire, by check redemption or by telephone
are restricted for fifteen calendar days following the purchase of shares. Under
certain circumstances Cortland may redeem accounts of less than $500 or impose a
monthly service charge of not more than $10 on such accounts.

REDEMPTIONS THROUGH SECURITIES DEALERS

Shareholders may redeem shares by instructing their securities dealer to
effect their redemption transactions. The securities dealer will transmit the
required redemption information to Cortland and the proceeds from that
redemption will be transmitted to the securities dealer for the account of the
shareholder. Securities dealers, including participants in the plan of
distribution described under the heading "Distributor," may impose redemption
minimums, service fees or other requirements. Securities dealers have a
responsibility to transmit redemption requests promptly.

REDEMPTIONS BY CHECK

Shareholders may use checks to effect redemptions. The standard checking
allows checks to be drawn in any amount of $500 or more. Checks drawn in amounts
of less than $500 may be returned to the payee or a $15 fee will be imposed for
such checks paid.

Shareholders may elect to establish a Spectrum Account. A Spectrum Account
provides draft checking services which is part of a range of cash management
services provided by the Manager and/or its affiliates. The account entitles
shareholders to write checks in any amount that will clear through an agent
bank. SHAREHOLDERS WHO ARE INTERESTED IN PARTICIPATING IN THE SPECTRUM ACCOUNT
PROGRAM SHOULD CONSIDER THE INFORMATION AVAILABLE FROM THE DISTRIBUTOR WITH
RESPECT TO THE SPECTRUM ACCOUNT, INCLUDING THE FEES RELATED THERETO.

The payee of a check may cash or deposit it in the same way as an ordinary
bank check. When a check is presented to the agent bank for payment, the agent
bank will cause Cortland to redeem a sufficient number of shares to cover the
amount of the check. Shareholders are entitled to dividends on the shares
redeemed up until the day on which the check is presented to the agent bank for
payment. Checks drawn on insufficient funds will be returned to the payee and a
fee (currently $16) will be imposed. Additionally, a fee (currently $20) will be
imposed for stop payment orders.

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<PAGE>
PREAUTHORIZED REDEMPTIONS

Shareholders may make preauthorized redemptions by contacting Cortland by:

(a) calling (212) 830-5280 if calling from New Jersey, Alaska or Hawaii or

(b) calling toll free at (800) 433-1918 if calling from elsewhere in the
continental United States or

and have the proceeds mailed or wired only to a previously designated
broker or bank account if (a) shares were paid for in federal funds or were
purchased by check and have been on Cortland's books at least fifteen calendar
days and (b) a telephone redemption authorization included in the Investor
Application is on file with Cortland before the redemption request is placed.
This authorization requires designation of a brokerage or bank account to which
the redemption payment is to be sent. The proceeds will not be mailed or wired
to other than the designated account. Redemptions of $10,000 or more will be
sent by bank wire if requested. Smaller amounts will normally be mailed to the
designated account.

Cortland will employ procedures to confirm that telephone redemption
instructions are genuine, and will require that shareholders electing such
option provide a form of personal identification. The failure by Cortland to
employ such procedures may cause Cortland to be liable for any losses incurred
by investors due to telephone redemptions based upon unauthorized or fraudulent
instructions.

REDEMPTIONS BY LETTER OF INSTRUCTION

Shareholders may redeem shares by a letter of instruction sent directly to
Reich & Tang Funds, 600 Fifth Avenue, New York, New York 10020 containing:

(a) your Cortland account number

(b) your redemption Fund choice

(d) the dollar amount or number of shares to be redeemed or a statement that
all shares in the account are to be redeemed

(e) payment instructions (normally redemption proceeds will be mailed to the
shareholder's address as registered with Cortland)

(f) signature(s) of the registered shareholder(s)

(g) signature(s) guaranteed stamped under the signature and signed and
guaranteed by an eligible guarantor institution which includes a domestic
bank, a domestic savings and loan institution, a domestic credit union, a
member bank of the Federal Reserve System or a member firm of a national
securities exchange, pursuant to Cortland's standards and procedures.

The proceeds of redemption are sent to the shareholder's bank or the
shareholder's address as it appears in Cortland's records. In order to change
such designation, the shareholder must submit a written notification to Cortland
with the signature guarantee(s) described above.

EXCHANGES

Shares of each Fund may be exchanged at net asset value for shares of any of
the other Funds without charge by instructions to a shareholder's securities
dealer or by mail. The value of the shares being exchanged must meet the minimum
initial investment requirements of the Fund or the participating securities
dealer. Mail exchange orders should be addressed and sent as shown under the
heading "Redemptions by Letter of Instruction" and must contain:

o your Cortland account number

o your name and telephone number

o the amount of shares to be exchanged (or, if all shares are to be
exchanged, a statement to this effect)

o the Fund shares to be exchanged

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<PAGE>

o the Fund shares to be acquired

o any change in dividend election

RETIREMENT PLANS

The Fund has available a form of individual retirement account ("IRA") for
investment in the Fund's shares. In general, an individual can make an annual
contribution to an IRA in an amount equal to the lesser of $2000 or 100% of the
individual's earned income. In addition, in the case of a married couple filing
a joint return, annual IRA contributions of up to $2000 can generally be made
for each spouse, as long as the combined compensation of both spouses is at
least equal to the contributed amounts. IRA contributions can, in general, be
made to either traditional deductible IRAs, traditional non-deductible IRAs or
non-deductible Roth IRAs, a new type of IRA established by the Taxpayer Relief
Act of 1997. Contributions to a Roth IRA are not deductible, but qualified
distributions from a Roth IRA are not includable in income or subject to the
additional ten-percent tax on early withdrawals, if deemed a qualified
distribution. A "qualified distribution" is a distribution that is made after
the end of the five taxable year period beginning with the first taxable year in
which the individual made a contribution to a Roth IRA, and which is made on or
after the date in which the individual attains an age of 59 1/2, on or after the
death of the individual or is attributable to the disability of the individual,
or is a distribution for specified first-time home buyer expenses or certain
education expenses.

Contributions to traditional deductible IRAs and Roth IRAs may be limited
based on adjusted gross income levels. The ability of a person who is an active
participant in an employer sponsored retirement plan to make deductible
contributions to a regular IRA is phased out based on the individual's adjusted
gross incomes. For 1998, the phase out occurs over a range of adjusted gross
incomes from $50,000 to $60,000 on a joint return and $30,000 to $40,000 on a
single return. The phase out range for a married individual who is not an active
participant but whose spouse is an active participant is between $150,000 and
$160,000.

The maximum annual contribution that can be made to a Roth IRA is also
subject to phase out rules that apply to married individuals filing joint
returns when adjusted gross income is between $150,000 and $160,000 and to
single individuals when adjusted gross income is between $95,000 and $110,000.

For both traditional deductible IRAs and Roth IRAs, the phase out range for
married individuals filing separate returns is from $0 to $10,000. The minimum
investment required to open an IRA is $250. Generally, there are penalties for
premature distributions from an IRA before the attainment of age 59 1/2, except
in the case of the participant's death or disability and certain other
circumstances including first-time home buyer expenses and certain education
expenses.

Fund shares may also be a suitable investment for assets of other types of
qualified pension or profit-sharing plans, including cash or deferred or salary
reduction "Section 401(k) plans" which give participants the right to defer
portions of their compensation for investment on a tax-deferred basis until
distributions are made from the plans.

Persons desiring information concerning investments by IRAs and other
retirement plans should write or telephone the Fund.

DISTRIBUTOR

Each of the Funds has entered into a distribution agreement dated September
15, 1993 (the "Distribution Agreements") with Reich & Tang Distributors, Inc.
(the "Distributor"), 600 Fifth Avenue, New York, New York 10020. The
Distributor, which was organized on January 4, 1991, has the exclusive right to
enter into dealer agreements with securities dealers who sell shares of the
Funds, including sales where a securities dealer automatically "sweeps" free
credit balances into a fund at the end of each day ("Sweep Arrangement")
allowing the account holder to earn dividends otherwise unavailable in the
brokerage account, and with financial institutions which may

24
<PAGE>
furnish services to shareholders on behalf of Cortland. Pursuant to plans of
distribution (the "Plans") approved by the Funds' shareholders on July 31, 1989,
each of the Funds may make distribution related payments, under a sweep
arrangement or otherwise, in an amount not to exceed on an annualized basis .25%
of the value of the Fund's assets. Securities dealers and other financial
institutions may receive distribution payments directly or indirectly from the
Funds for services that may include payments for opening shareholder accounts,
processing investor purchase and redemption orders, responding to inquiries from
shareholders concerning the status of their accounts and operations of their
Fund and communications with Cortland on behalf of Fund shareholders.
Additionally, the Distributor may pay for advertisements, promotional materials,
sales literature and printing and mailing of prospectuses to other than Fund
shareholders and other services to support distribution pursuant to the Plans.
The Distributor may also make payments to securities dealers, under a sweep
arrangement or otherwise, and to financial institutions, such as banks, out of
the investment management fee the Manager receives from the Funds, out of its
past profits or from any other source available to the Distributor.

The Plans will only make payments for expenses actually incurred by the
Distributor. The Plans will not carry over expenses from year to year and if a
Plan is terminated in accordance with its terms, the obligations of a Fund to
make payments to the Distributor pursuant to the Plan will cease and the Fund
will not be required to make any payments past the date the Plan terminates.

As a result of 12b-1 fees, a long-term shareholder in a Fund may pay more
than the economic equivalent of the maximum front-end sales charges permitted by
the Rules of the National Association of Securities Dealers, Inc.

DIVIDENDS AND TAXES

DIVIDENDS

It is the policy of Cortland, with respect to each Fund, to declare
dividends from the net investment income earned by each Fund daily; such
dividends are generally reinvested in additional Fund shares on the subsequent
business day. A shareholder may, by letter to Cortland, elect to have dividends
paid by check. Any such election or revocation thereof must be made in writing
to Cortland Trust, Inc., 600 Fifth Avenue, New York, New York 10020.
Shareholders whose dividends are being reinvested will receive a summary of
their accounts at least quarterly indicating the reinvestment of dividends.
Dividends from net realized capital gain, offset by capital loss carryovers, if
any, are generally declared and paid when realized except to the extent that a
net realized capital gain is deemed necessary to offset future capital losses.

TAXES

Each Fund is treated as a separate entity for federal income tax purposes.
Each Fund intends to qualify as a regulated investment company by satisfying the
requirements under Subchapter M of the Internal Revenue Code of 1986, as amended
(the "Code"), including requirements with respect to diversification of assets,
distribution of income and sources of income. It is each Fund's policy to
distribute to shareholders all of its investment income (net of expenses) and
any capital gains (net of capital losses) in accordance with the timing
requirements imposed by the Code, so that each Fund will satisfy the
distribution requirement of Subchapter M and will not be subject to federal
income tax or the 4% excise tax.

If a Fund fails to satisfy any of the Code requirements for qualification as
a regulated investment company, it will be taxed at regular corporate tax rates
on all its taxable income (including capital gains) without any deduction for
distributions to shareholders, and distributions to shareholders will be taxable
as ordinary dividends (even if derived from the Fund's net long-term capital
gains) to the extent of the Fund's current and accumulated earnings and profits.

Distributions by the MUNICIPAL FUND of its tax-exempt interest income are
designated as exempt-interest dividends, which are excludable from gross income
for federal income tax purposes. However, shareholders are required to report
the receipt of

25
<PAGE>
exempt-interest dividends, together with other tax-exempt interest, on their
federal income tax returns. In addition, these exempt-interest dividends may be
subject to the federal alternative minimum tax ("AMT") and will be taken into
account in determining the portion, if any, of Social Security benefits received
which must be included in gross income for federal income tax purposes. Further,
interest or indebtedness incurred or continued to purchase or carry shares of
the MUNICIPAL FUND (which indebtedness likely need not be directly traceable to
the purchase or carrying of such shares) will not be deductible for federal
income tax purposes. Finally, a shareholder who is (or is related to) a
"substantial user" of a facility financed by industrial development bonds held
by the MUNICIPAL FUND likely will be subject to tax on dividends paid by such
Fund that are derived from interest on such bonds.

The MUNICIPAL FUND may invest in securities the interest on which is (and
the dividends paid by the Fund derived from such interest are) subject to
federal income tax, but such taxable securities will not exceed 20% of the value
of the MUNICIPAL FUND's total assets. The percentage of dividends which
constitute exempt-interest dividends, and the percentage thereof (if any) which
constitutes an item of tax preference, will be determined annually and will be
applied uniformly to all dividends of the MUNICIPAL FUND declared during that
year. These percentages may differ from the actual percentages for any
particular day.

Distributions by a Fund of its taxable net investment income and the
excess, if any, of its net short-term capital gain over its net long-term
capital loss are taxable to shareholders as ordinary income. Such distributions
are treated as dividends for federal income tax purposes but are not expected to
qualify for the 70% dividends-received deduction for corporate shareholders.
Distributions by a Fund of the excess, if any, of its net long-term capital gain
over its net short-term capital loss are designated as capital gain dividends
and are taxable to shareholders as long-term capital gains, regardless of the
length of time shareholders have held their shares.

Tax-exempt interest on specified private activity bonds issued after August
7, 1986, is treated as a tax preference item for purposes of the AMT. Thus,
corporate and individual shareholders of the MUNICIPAL FUND may incur an AMT
liability as a result of receiving exempt-interest dividends from the Fund to
the extent such dividends are attributable to interest from such private
activity bonds. In addition, because all exempt-interest dividends are included
in a corporate shareholder's adjusted current earnings (which is used in
computing a separate preference item for corporations), corporate shareholders
may incur an AMT liability as a result of receiving exempt-interest dividends
from the MUNICIPAL FUND.

Distributions to shareholders will be treated in the same manner for federal
income tax purposes whether received in cash or reinvested in additional shares
of a Fund. In general, distributions by a Fund are taken into account by the
shareholders in the year in which they are made. However, certain distributions
made during January will be treated as having been paid by a Fund and received
by the shareholders on December 31 of the preceding year.

A shareholder will recognize gain or loss upon the sale or redemption of
shares of a Fund in an amount equal to the difference between the proceeds of
the sale or redemption and the shareholder's adjusted tax basis in the shares.
However, as long as a Fund's Net Asset Value per share does not deviate from
$1.00, there will be no gain or loss upon the sale or redemption of shares of a
Fund. Any loss realized upon a taxable disposition of shares within six months
from the date of their purchase will be treated as a long-term capital loss to
the extent of any capital gain dividends received on such shares. All or a
portion of any loss realized upon a taxable disposition of shares of a Fund may
be disallowed if other shares of the Fund are purchased within 30 days before or
after such disposition.

If a shareholder is a non-resident alien or foreign entity shareholder,
ordinary income dividends paid to such shareholder generally will be subject to
United States withholding tax at a rate of

26
<PAGE>
30% (or lower applicable treaty rate). We urge non-United States shareholders to
consult their own tax adviser concerning the applicability of the United States
withholding tax.

Under the backup withholding rules of the Code, certain shareholders may be
subject to 31% withholding of federal income tax on ordinary income dividends
paid by a Fund. In order to avoid this backup withholding, a shareholder must
provide the Fund with a correct taxpayer identification number (which for most
individuals is his or her Social Security number) or certify that it is a
corporation or otherwise exempt from or not subject to backup withholding.

The exclusion from gross income for federal income tax purposes of
exempt-interest dividends does not necessarily result in exclusion under the
income or other tax laws of any state or local taxing authority.

The foregoing discussion of federal income tax consequences is based on tax
laws and regulations in effect on the date of this Prospectus, and is subject to
change by legislative, judicial or administrative action. As the foregoing
discussion is for general information only, a prospective shareholder also
should review the more detailed discussion of federal income tax considerations
relevant to the Funds that is contained in the Statement of Additional
Information. In addition, each prospective shareholder should consult with his
own tax adviser as to the tax consequences of investments in the Funds,
including the application of state and local taxes which may differ from the
federal income tax consequences described above.

27
<PAGE>
VI. FINANCIAL HIGHLIGHTS

This financial highlights table is intended to help you understand the Fund's
financial performance for the past 5 years. Certain information reflects
financial results for a single Fund share. The total returns in the table
represent the rate that an investor would have earned [or lost] on an investment
in the Fund (assuming reinvestment of all dividends and distributions). This
information has been audited by Ernst & Young LLP, whose report, along with the
Fund's financial statements, is included in the annual report, which is
available upon request.

<TABLE>
<CAPTION>
Cortland General Money Market Fund
For the Year Ended March 31,
<S> <C> <C> <C> <C> <C>
1999 1998 1997 1996 1995
-------- --------- --------- -------- ---------
PER SHARE OPERATING PERFORMANCE:
(for a share outstanding
throughout the year)
Net asset value,
beginning of year........... $1.00 $1.00 $1.00 $1.00 $ 1.00
-------- --------- --------- -------- ---------
Income from investment operations:
Net investment income............ 0.045 0.047 0.044 0.049 0.038
Net realized and unrealized
gain/(loss) on investments..... 0.001 (0.001) 0.000 0.001 (0.003)+
---------- ----------- ---------- ---------- ------
Total from investment operations. 0.046 0.046 0.044 0.050 0.035
Less distributions:
Dividends from net
investment income.............. (0.045) (0.047) (0.044) (0.048) (0.038)
------------ --------- --------- --------- -----
Total distributions.............. (0.045) (0.047) (0.044) (0.048) (0.038)
------------ ---------- -------- ----------- -----
Net asset value, end of year..... $1.00 $1.00 $1.00 $1.00 $1.00
========== ========= ========= ============ ======
TOTAL RETURN..................... 4.56% 4.77% 4.52% 4.95% 3.91%+
RATIOS/SUPPLEMENTAL DATA:
Net assets,
end of year (000's omitted). $659,890 $505,442 $1,160,352 $1,159,173 $ 993,854
Ratios to average net assets:
Expenses......................... 1.00% 0.99% 1.02% 1.03% 1.03%
Net investment income............ 4.41% 4.67% 4.41% 4.86% 3.85%
Management and Distribution support
and service fees waived..... 0.03% 0.04% 0.00% 0.00% 0.02%

+ Includes the effect of a capital contribution from the Manager of $.004 per
share. Without a capital contribution the net realized and unrealized loss on
investments would have been $.007 per share and the total return would have
been 2.89%.
</TABLE>

28
<PAGE>
VI. FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
U.S. GOVERNMENT FUND
For the Year Ended March 31,
1999 1998 1997 1996 1995
-------- --------- --------- -------- ---------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
(for a share outstanding
throughout the year)
Net asset value,
beginning of year................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
---------- ---------- ---------- ---------- ----------
Income from investment operations:
Net investment income............ 0.042 0.046 0.043 0.047 0.038
Net realized and unrealized
gain/(loss) on investments...... 0.001 ( 0.001) ( 0.001) 0.000 ( 0.003)+
---------- ---------- ---------- ---------- ----------
Total from investment operations. 0.043 0.045 0.042 0.047 0.035
Less distributions:
Dividends from net
investment income............... ( 0.042) ( 0.045) ( 0.043) ( 0.047) ( 0.038)
---------- ---------- ---------- ---------- ----------
Total distributions................ ( 0.042) ( 0.045) ( 0.043) ( 0.047) ( 0.038)
---------- ---------- ---------- ---------- ----------
Net asset value, end of year....... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========== ========== ========== ========== ==========
TOTAL RETURN....................... 4.33% 4.61% 4.37% 4.80% 3.84%+
RATIOS/SUPPLEMENTAL DATA
Net assets,
end of year (000's omitted)...... $ 64,438 $ 48,069 $ 164,464 $ 255,222 $ 218,307
Ratios to average net assets:
Expenses......................... 1.00% 0.81% 1.01% 1.04% 1.04%
Net investment income............ 4.18% 4.58% 4.30% 4.72% 3.74%
Management and Distribution support
and service fees waived.......... 0.04% 0.25% 0.02% 0.00% 0.01%

+ Includes the effect of a capital contribution from the Manager of $.006 per
share. Without a capital contribution the net realized and unrealized loss
on investments would have been $.009 per share and the total return would
have been 2.81%.

</TABLE>

29
<PAGE>
VI. FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
Municipal Money Market
For the Year Ended March 31,
1999 1998 1997 1996 1995
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
(for a share outstanding
throughout the year)
Net asset value,
beginning of year............... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------- --------- --------- --------- ---------
Income from investment operations:
Net investment income........... 0.025 0.028 0.026 0.030 0.026
--------- --------- --------- --------- ---------
Total from investment operations... 0.025 0.028 0.026 0.030 0.026
Less distributions:
Dividends from net
investment income.............. ( 0.025) ( 0.028) ( 0.026) ( 0.030) ( 0.026)
--------- --------- --------- --------- ---------
Total distributions................ ( 0.025) ( 0.028) ( 0.026) ( 0.030) ( 0.026)
--------- --------- --------- --------- ---------
Net asset value, end of year....... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========= ========= ========= ========= =========
TOTAL RETURN....................... 2.56% 2.81% 2.68% 3.06% 2.58%
RATIOS/SUPPLEMENTAL DATA
Net assets,
end of year (000's omitted)..... $ 49,234 $ 47,780 $ 153,322 $ 216,456 $ 224,041
Ratios to average net assets:
Expenses........................ 1.00% 1.01% 1.02% 1.03% 0.99%
Net investment income........... 2.51% 2.81% 2.64% 3.02% 2.54%
Management and Distribution support
and service fees waived......... 0.04% 0.00% 0.00% 0.00% 0.06%
</TABLE>

<PAGE>
CORTLAND
TRUST, INC.

PROSPECTUS
July 27, 1999
as revised
April 6, 2000

Reich & Tang Distributors, Inc.
600 Fifth Avenue
New York, NY 10020
(212) 830-5220

A Statement of Additional Information (SAI) dated July 27, 1999, and the Funds'
Annual and Semi-Annual Reports include additional information about the Funds
and their investments and are incorporated by reference into this prospectus.
You may obtain the SAI and the Annual and Semi-Annual Reports and other material
incorporated by reference without charge by calling the Funds at 1-800-221-3079.
To request other information, please call your financial intermediary or the
Funds.

A current SAI has been filed with the Securities and Exchange Commission. You
may visit the Securities and Exchange Commission's Internet website
(www.sec.gov) to view the SAI, material incorporated by reference and other
information. These materials can also be reviewed and copied at the Commission's
Public Reference Room in Washington D.C. Information on the operation of the
Public Reference Room may be obtained by calling the Commission at
1-800-SEC-0330. In addition, copies of these materials may be obtained, upon
payment of a duplicating fee, by writing the Public Reference Section of the
Commission, Washington, D.C. 20549-6009.

811-4179