FRANKLIN NEW YORK TAX FREE TRUST, N-30D, 1995-02-27

FRANKLIN NEW YORK TAX FREE TRUST
N-30D, 1995-02-27

Previous: PIONEER INTERMEDIATE TAX FREE FUND, NSAR-B, 1995-02-27

Next: UNIVERSAL HEALTH REALTY INCOME TRUST, SC 13G/A, 1995-02-27

TABLE OF CONTENTS

FRANKLIN NEW YORK
TAX-EXEMPT MONEY FUND..................... page 3

FRANKLIN NEW YORK INSURED
TAX-FREE INCOME FUND...................... page 5

FRANKLIN NEW YORK
INTERMEDIATE-TERM
TAX-FREE INCOME FUND...................... page 9

February 15, 1995

Dear Shareholder:

It's a pleasure to bring you the ninth annual report of the Franklin New York
Tax-Free Trust for the period ended December 31, 1994.

New York's economy remains diverse, with services and trade sectors accounting
for 31% and 20%, respectively, of all employment. Despite the recession's
negative effects on the state, its financial performance has shown signs of
improvement and management believes the outlook for New York municipal bonds is
positive. Additionally, economic reforms proposed by newly elected Governor
George Pataki should have a positive effect on the New York municipal market
throughout 1995.

We are pleased to report that all of the funds within this Trust continued to
provide high current monthly income. Nonetheless, volatility in the securities
markets proved unsettling to some investors in 1994. Although this is
understandable, in times like these it is important to

<PAGE>

remember that financial markets always have been -- and always will be --
subject to fluctuation. As a matter of fact, down-market cycles can often
provide the wise investor with outstanding buying opportunities. We therefore
urge you to exercise patience, consult with your investment representative and
concentrate not on short-term market cycles, but on your long-term investment
goals.

The following pages contain detailed discussions about each of the funds in the
Trust. While each fund has a distinct investment objective, all of our managers
are dedicated to providing shareholders with careful selection and constant
professional supervision.

We appreciate your continued support, welcome your comments and look forward to
serving your investment needs in the years to come.

Sincerely,

Charles B. Johnson
President

- - - - -------------------------------------------------------------------------------
ABOUT DERIVATIVES

There has been a great deal of negative media attention lately on derivatives
and their use in the marketplace. Various investment vehicles have been derived
from municipal securities in an attempt to increase yield to investors. Exotic
derivative issues such as inverse floaters and other customized contracts are
structured to the specifications of the issuer, and may exhibit extreme interest
rate sensitivity and/or market illiquidity. Many of these derivative securities
are fairly new to the marketplace and have no long-term performance records.

The managers of our municipal bond funds do not purchase and have never
purchased these types of derivatives or similar potentially volatile securities.
We will continue to manage our bond funds as "plain vanilla" investments that do
not take any undue risks to increase yield.
- - - - -------------------------------------------------------------------------------

<PAGE>

FRANKLIN NEW YORK TAX-FREE TRUST
FRANKLIN NEW YORK TAX-EXEMPT MONEY FUND

The Franklin New York Tax-Exempt Money Fund invests primarily in short-term debt
securities and is managed to maintain a constant net asset value of $1.00 per
share.*

During the period under review, the U.S. economy grew rapidly, with the Gross
Domestic Product (GDP) increasing at an annualized rate of 3.62% for the first
three quarters of 1994.+ In addition, the nation's unemployment rate declined to
5.8% and the national factory capacity utilization rate rose to over 84% by the
end of the reporting period.++ Although reported economic data did not show
significant increases in inflation, the Federal Reserve Board moved preemptively
to push up short-term interest rates in an effort to control the expected higher
inflation that normally accompanies economic recoveries. Beginning in early
February 1994, the Federal Reserve increased the federal funds rate -- the
interest rate banks charge each other for overnight loans -- six times in 1994,
to 5.5% from 3.0%.

After the first interest rate increase in February, we reduced the fund's
weighted average maturity from 47 days on February 3, 1994, to 36 days on May
31, 1994. The average maturity was further decreased to 19 days by the end of
the reporting period. Reducing the fund's average maturity in this manner
enabled us to reinvest more quickly in new securities offering higher rates.
This, in turn, helped increase the fund's seven-day effective yield, which
assumes the compounding of daily dividends, to 4.09% on December 31, 1994, from
2.21% on December 31, 1993. Additionally, the chart below illustrates that if
you are in the maximum 46.9% combined federal, New York state and New York City
income tax bracket, you would have to earn 7.55% from a taxable investment to
match your fund's tax-free annualized yield. Currently, there is not a security
available in the taxable short-term money market with a similar yield.

"GRAPHIC MATERIAL (1) OMITTED - SEE APPENDIX

*The fund will seek to comply with all federal and state regulations regarding
the payment of tax-exempt income dividends. Investors subject to the federal
alternative minimum tax may find a small portion of the income dividends subject
to such tax. Distributions of capital gains and ordinary income from accrued
market discount, if any, are generally taxable. An investment in the fund is
neither insured nor guaranteed by the U.S. government. There is no assurance
that the $1.00 per share price will be maintained.
+Source: U.S. Commerce Department
++Source: U.S. Labor Dept., U.S. Federal Reserve Board

<PAGE>

Looking forward, we believe that lower unemployment and higher corporate
earnings will translate into higher personal income and spending, which should
continue to fuel the economic recovery currently underway. Lower unemployment
rates and a stronger business climate should work together to keep business
moving forward. However, if economic growth continues to exceed the Federal
Reserve's long-term target of 2.5%, the Federal Reserve may continue to raise
short-term interest rates as it seeks to prevent inflation from getting out of
control. Because of its relatively short weighted average maturity, the Franklin
New York Tax-Exempt Money Fund is well-positioned to roll over its maturities
into higher-yielding instruments should interest rates continue to rise.

In the current rising interest-rate environment, your fund is performing exactly
as designed by allowing you to participate in the higher yields available
without committing your investment to a lengthy maturity. Liquidity with
opportunity options is a great feature of your investment.

The securities in which the fund invests are among the highest quality available
to money market portfolios. As the fund's objective is to provide shareholders
with a high-quality, conservative investment, we do not invest in derivatives or
other potentially volatile securities that we think involve significant risk.

In addition, as a shareholder in the Franklin New York Tax-Exempt Money Fund,
you continue to benefit from easy access to your money and high credit safety.
You also enjoy a variety of services, including free, unlimited check-writing
for amounts of $100 or more, unlimited service transactions, automatic dividend
reinvestment and daily dividend compounding.

We thank you for your continued support of the Franklin New York Tax-Exempt
Money Fund and look forward to serving your investment needs in the future.

- - - - -------------------------------------------------------------------------------
FRANKLIN NEW YORK TAX-EXEMPT MONEY FUND
Periods ended December 31, 1994

Seven-day annualized yield(1) 4.01%
Taxable equivalent yield(2) 7.55%
Seven-day effective yield(1) 4.09%

1. The seven-day effective yield assumes the compounding of daily dividends.

2. Taxable equivalent yield assumes the 1994 maximum 46.9% combined federal, New
York state and New York City income tax bracket, based on the maximum federal
income tax rate of 39.6%.

Annualized and effective yields are for the seven days ended December 31, 1994.
Yields reflect fluctuations in interest rates on portfolio investments, and fund
expenses. Yields should be viewed in terms of the current, low rate of inflation
- - - - -- just as high inflation usually results in higher yields, low inflation often
results in lower yields. Past performance does not guarantee future results.

Management fees have been voluntarily waived by the investment advisor, which
reduces expenses and increases yield. Without these reductions, the fund's
annualized and effective yields for the period would have been 3.76% and 3.83%,
respectively. Fee waivers and expense reimbursements may be discontinued at any
time unless otherwise specified in the current prospectus.

Please remember that an investment in the fund is neither insured nor guaranteed
by the U.S. government, and there can be no assurance that the fund will be able
to maintain a stable net asset value of $1.00 per share.

The risks involved in investing in a non-diversified fund, such as increased
susceptibility to adverse economic or regulatory developments, are described in
the fund's prospectus.
- - - - -------------------------------------------------------------------------------

<PAGE>

FRANKLIN NEW YORK TAX-FREE TRUST
FRANKLIN NEW YORK INSURED TAX-FREE INCOME FUND

The Franklin New York Insured Tax-Free Income Fund is managed to provide
shareholders with high current income exempt from regular federal, New York
state and New York City personal income taxes by investing primarily in
long-term municipal bonds privately insured as to the timely payment of interest
and principal.*

A historically sharp and rapid increase in interest rates was the primary factor
affecting fixed-income securities during the fund's fiscal year. Attempting to
maintain moderate economic growth while keeping potentially inflationary
pressures under control, the Federal Reserve Board raised the federal funds rate
- - - - -- the interest rate banks charge each other for overnight loans -- six times
during the reporting period, to 5.5% from 3.0%. Although the Federal Reserve
Board raised only short-term rates, long-term rates rose as well.

The first six months of 1994 were generally unfavorable to bond markets.
Uncertainty surrounding the weakness of the dollar, renewed fears of inflation,
and rising interest rates created significant price volatility across all bond
markets. As bond prices generally fall when interest rates rise, the recent
sharp downturn in bond prices was not unexpected.

"GRAPHIC MATERIAL (2) OMITTED - SEE APPENDIX"

The bonds in your fund's portfolio are insured by private municipal bond
insurance companies as to the scheduled payment of principal and interest.+ This
credit insurance feature has earned your fund an overall rating of "AAAf" from
Standard & Poor's. Such ratings, while not guaranteeing the fund's market value
or share

+Fund shares are neither insured nor guaranteed by any U.S. government agency.
Insurance relates only to the payment of principal and interest on the
portfolio's securities. It does not eliminate market risks to the fund's share
price or insure the value of the shares. Terms of the insurance are more fully
described in the prospectus, and no representation is made as to any insurer's
ability to meet its commitments.

<PAGE>

price, or signifying approval of the shares by national rating agencies, reflect
the credit quality of the portfolio as described in the fund's prospectus and
are subject to change.

Although each bond in the portfolio is insured, we continue to be selective
about our investments. We evaluate each issue on an individual basis, favoring
highly rated "essential service" bonds. These securities tend to have a more
reliable income stream, as they are usually backed by dependable revenue
generated from courthouses, jails, and water, power and sewer projects, to name
a few. As a result, these bonds tend to be less affected by budgetary and
political changes, and are believed to be very attractive in a municipal
cost-cutting environment. Please keep in mind, however, that the principal value
of the fund's holdings as well as the price of the fund's shares will fluctuate
with market conditions.

Our outlook for the fund is positive. The higher rates of return available in
1994 presented an opportunity to reverse the effects of lower-yielding coupons
in the previous two years. The effect will not be felt immediately, but the
investments made at higher rates will increase the likelihood that the fund's
managers will be able to stabilize and potentially increase dividends in the
future. Future rate moves by the Federal Reserve Board can be anticipated, but
determining the actual size of the increases and their timing is never exact. On
February 1, 1995, the Federal Reserve Board once again raised rates, to 6.0%
from 5.5%. We believe that this increase, as well as future increases, are
probably anticipated and thus, are already reflected in the long-term bond
market; therefore, the effects of these increases should not be disruptive.

<PAGE>

PERFORMANCE SUMMARY

The Franklin New York Insured Tax-Free Income Fund's share price, as measured by
net asset value, declined to $10.16 on December 31, 1994, from $11.68 on
December 31, 1993. As noted in the preceding discussion, this decline was
largely due to rising interest rates. Volatility in current market conditions
should be expected.

The fund continued to meet its investment objective of providing high current
income to shareholders. For the one-year period ended December 31, 1994, your
fund paid monthly income distributions totaling 58.8 cents ($0.588) per share.*
Dividends will vary based on the earnings of the fund's portfolio and past
distributions are not necessarily predictive of future results.

At the end of the reporting period, your fund's distribution rate was 5.54%,
based on an annualization of the fund's current monthly dividend of 4.9 cents
($0.049) per share and the maximum offering price of $10.61 on December 31,
1994. This tax-free rate is generally higher than the after-tax return on a
comparable taxable investment. The chart above illustrates that if you are in
the maximum 46.9% combined federal, New York state and New York City income tax
bracket, you would have to earn 10.43% from a taxable investment to match your
fund's tax-free distribution rate.

The fund's total return was -8.14% for the one-year period ended December 31,
1994. Total return measures the change in value of an investment during the
periods indicated, assuming reinvestment of dividends and capital gains at net
asset value. This calculation does not include the initial sales charge. Past
performance is not predictive of future results.

"GRAPHIC MATERIAL (2) OMITTED - SEE APPENDIX"

We have always maintained a long-term investment perspective, and we encourage
our shareholders to do the same. While the fund may experience some volatility
from time to time, we are confident that its performance will be rewarding for
the long-term investor.

Since its inception on May 1, 1991, the Franklin New York Insured Tax-Free
Income Fund's performance has exceeded the Consumer Price

*Assumes shares were purchased and held for the entire accrual period. Since
dividends accrue daily, your actual distributions will vary depending on the
date you purchased your shares and any account activity during the month. Income
distributions and total return calculations include all accrued income earned by
the fund during the reporting period, from December 31, 1993, to December 31,
1994.

<PAGE>
Index (CPI), keeping your purchasing power well ahead of inflation -- a primary
goal of any investment. The fund, however, has slightly underperformed the
unmanaged Lehman Brothers Municipal Bond Index as illustrated by the chart
below. The Lehman Index has some inherent performance differentials over any
fund, as the index has no cash in its portfolio and involves no sales charges or
management expenses. In addition, the index includes municipal securities from
across the country, while your fund is composed primarily of New York insured
municipal bonds. An investor cannot invest directly in an index.

"GRAPHIC MATERIAL (4) OMITTED - SEE APPENDIX"

*This performance graph assumes an initial $10,000 investment and includes the
maximum 4.25% initial sales charge, all fund expenses and account fees. It also
assumes that your dividends and capital gains were reinvested at net asset
value. The Lehman Brothers Municipal Bond Index includes price appreciation or
depreciation and distributions as a percentage of the original investment. Past
performance is not predictive of future results.

- - - - -------------------------------------------------------------------------------
FRANKLIN NEW YORK INSURED TAX-FREE INCOME FUND
Periods ended December 31, 1994
<TABLE>
<CAPTION>

SINCE
INCEPTION
1-YEAR 3-YEAR (05/01/91)
------- ------ ----------
<S> <C> <C> <C>
Cumulative
Total Return(1) -8.14% 14.82% 22.67%

Average Annual
Total Return(2) -12.05% 3.22% 4.49%

Distribution Rate(3) 5.54%
Taxable Equivalent Distribution Rate(4) 10.43%
30-Day Standardized Yield(5) 5.80%
Taxable Equivalent Yield(4) 10.92%

</TABLE>

1. Cumulative total return measures the change in value of an investment over
the periods indicated and does not include the maximum 4.25% initial sales
charge stated in the prospectus. See note below.

2. Average annual total return represents the average annual change in value of
an investment over the specified periods. The figures have been restated to
reflect the maximum 4.25% initial sales charge stated in the prospectus. See
note below.

3. Based on an annualization of the fund's current monthly 4.9 cent per share
monthly dividend and the maximum offering price of $10.61 on December 31, 1994.

4. Taxable equivalent distribution rate and yield assume the 1994 maximum 46.9%
combined federal, New York state and New York City income tax bracket, based on
the 39.6% federal income tax rate.

5. Yield, calculated as required by the SEC, is based on the earnings of the
fund's portfolio for the 30 days ended 12/31/94.

Note: Prior to July 1, 1994, fund shares were offered at a lower initial sales
charge, with dividends reinvested at the public offering price. Thus, actual
total returns for purchasers of shares during that period would have been
somewhat different than noted above. Effective May 1, 1994, the fund implemented
a plan of distribution under Rule 12b-1 and eliminated the sales charge on
reinvested dividends, which will affect future performance. All total return
calculations assume reinvestment of dividends and capital gains at net asset
value. Investment return and principal value will fluctuate with market
conditions, and you may have a gain or loss when you sell your shares. Past
performance is not predictive of future results.

Management fees have been voluntarily waived by the investment advisor, which
reduces operating expenses and increases yield, distribution rate and total
return. Without these reductions, the fund's distribution rate and total return
would have been lower, and yield for the period would have been 5.41%. Fee
waivers and expense reimbursements may be discontinued at any time unless
otherwise specified in the current prospectus.

The risks of investing in a non-diversified fund, such as increased
susceptibility to adverse or regulatory developments, are described in the
fund's prospectus.
- - - - -------------------------------------------------------------------------------

<PAGE>

FRANKLIN NEW YORK TAX-FREE TRUST
FRANKLIN NEW YORK INTERMEDIATE-TERM TAX-FREE INCOME FUND

The Franklin New York Intermediate-Term Tax-Free Income Fund seeks to provide
shareholders with high current income exempt from regular federal, New York
state and New York City income taxes consistent with the preservation of
capital. It works to accomplish this objective by investing in investment-grade
bonds with a dollar weighted average maturity (the time in which debt must be
repaid) between three and ten years.*

The fiscal year was difficult for most financial markets. As reported in the
fund's semi-annual report in June of this year, the strength of the U.S. economy
sparked concern that inflation was returning. The Federal Reserve Board raised
short-term interest rates in February in hopes of keeping inflation under
control. When leading economic indicators showed that the threat of inflation
continued to loom, the Federal Reserve Board again raised rates. By the end of
the reporting period, the federal funds rate -- the rate banks charge each other
for overnight loans -- had risen six times, to 5.5% from 3.0%.

Municipal bonds and other fixed-income securities did not perform well in 1994.
Rising interest rates usually cause bond prices to decline since previously
issued bonds, with their lower yields, become less attractive than newer issues
reflecting current higher rates. We took advantage of rising rates to sell the
lower coupon, lower yielding securities that we had purchased during stronger
markets, and moved into higher coupon bonds as they came to market. This action
should be significant in helping the fund increase its income-generating power.
For example, on December 31, 1993, the fund's average coupon was 5.39%, whereas
on December 31, 1994, it stood at 6.16%.

"GRAPHIC MATERIAL (5) OMITTED - SEE APPENDIX"

<PAGE>

During the first three quarters of the fund's fiscal year, yield spreads between
the highest quality bonds and the lower end "investment grade" bonds were
substantially wider than normal. We therefore sold the higher AAA and AA rated
bonds and purchased lower, but still investment grade, A and BBB rated bonds.
Yield spreads narrowed toward the end of the fiscal year, and the yield benefit
from holding BBB rated issues did not warrant the additional risk that comes
from owning these lower quality bonds. In light of this change, we took this
opportunity to sell the lower quality bonds, replacing them with high quality --
often insured -- bonds.

In seeking to provide our shareholders with a high quality, conservative
investment, we invest in intermediate-term bonds with average maturities of
three to ten years. On December 31, 1994, the average maturity of the securities
held in the portfolio was 9.3 years. Intermediate-term bonds are generally less
sensitive to interest rate changes than are long-term bonds, and typically offer
lower price volatility. However, price fluctuations are unavoidable and your
account's value will vary with market conditions. As such, you may have a gain
or loss when you sell your shares.

<PAGE>

PERFORMANCE SUMMARY

The Franklin New York Intermediate-Term Tax-Free Income Fund's share price, as
measured by net asset value, declined to $9.60 on December 31, 1994, from $10.68
on December 31, 1993. As noted in the preceding discussion, this decline was
largely due to rising interest rates.

The fund continued to meet its investment objective of providing high current
income to shareholders. For the one-year period ended December 31, 1994, your
fund paid monthly income distributions totaling 52.8 cents ($0.528) per share.*
Dividends will vary based on the earnings of the fund's portfolio and past
distributions are not necessarily predictive of future results.

At the end of the reporting period, your fund's distribution rate was 5.38%,
based on an annualization of the current monthly dividend of 4.4 cents ($0.044)
per share and the maximum offering price of $9.82 on December 31, 1994. This
tax-free rate is generally higher than the after-tax return on a comparable
taxable investment. The chart to the right illustrates that if you are in the
maximum combined 46.9% federal, New York state and New York City personal income
tax bracket, you would have to earn 10.13% from a taxable investment to match
your fund's tax-free distribution rate.

The Franklin New York Intermediate-Term Tax-Free Income Fund's total return was
- - - - -5.29% for the one-year period ended December 31, 1994. Total return measures
the change in value of an investment during the periods indicated, assuming
reinvestment of dividends and capital gains. This calculation does not include
the initial sales charge. Past performance is not predictive of future results.

"GRAPHIC MATERIAL (6) OMITTED - SEE APPENDIX"

We have always maintained a long-term investment perspective, and we encourage
shareholders to do the same. While the fund may experience some volatility from
time to time, we believe that its performance will be rewarding over the long
term.

<PAGE>

Your fund's performance has generally followed the same trends as the broad,
unmanaged Lehman Brothers 10-Year Municipal Bond Index. The index has some
inherent performance differentials over any fund as it holds no cash in its
portfolio and involves no sales charges or other expenses. Additionally, the
index is made up of over 5,000 municipal bond issues from across the nation
while your fund's investment concentration is primarily in New York
intermediate-term municipal securities. Please note, you cannot invest in an
index.

"GRAPHIC MATERIAL (7) OMITTED - SEE APPENDIX"

*This performance graph assumes an initial $10,000 investment and includes the
maximum 2.25% initial sales charge, all fund expenses and account fees. It also
assumes that your dividends and capital gains were reinvested at net asset
value. The Lehman Brothers 10-Year Municipal Bond Index includes price
appreciation or depreciation and distributions as a percentage of the original
investment. Past performance is not predictive of future results.

- - - - -------------------------------------------------------------------------------
FRANKLIN NEW YORK INTERMEDIATE-TERM
TAX-FREE INCOME FUND
<TABLE>
<CAPTION>

Periods ended December 31, 1994

SINCE
INCEPTION
1-YEAR (09/23/92)
------ ----------
<S> <C> <C>
Cumulative Total Return(1) -5.29% 6.55%
Average Annual Total Return(2) -7.45% 1.81%

Distribution Rate(3) 5.38%
Taxable Equivalent Distribution Rate(4) 10.13%
30-Day Standardized Yield(5) 6.11%
Taxable Equivalent Yield(4) 11.50%

1. Cumulative total return measures the change in value of an investment over
the periods indicated and does not include the maximum 2.25% initial sales
charge stated in the prospectus. See note below.

2. Average annual total return represents the average annual change in value of
an investment over the specified periods. The figures have been restated to
reflect the maximum 2.25% initial sales charge stated in the prospectus. See
note below.

3. Based on an annualization of the fund's current 4.4 cent per share monthly
dividend and the maximum offering price of $9.82 on December 31, 1994.

4. Taxable equivalent distribution rate and yield assume the 1994 maximum 46.9%
combined federal, New York state and New York City income tax bracket, based on
the 36.9% federal income tax rate.

5. Yield, calculated as required by the SEC, is based on the earnings of the
fund's portfolio for the 30 days ended December 31, 1994.

Note: All total return calculations assume reinvestment of dividends and capital
gains at net asset value. Investment return and principal value will fluctuate
with market conditions and you may have a gain or loss when you sell your
shares. Past performance is not predictive of future results.

Management fees have been voluntarily waived by the investment advisor, which
reduces operating expenses and increases yield, distribution rate and total
return. Without these reductions, the fund's distribution rate and total return
would have been lower, and yield for the period would have been 5.38%. Fee
waivers and expense reimbursements may be discontinued at any time unless
otherwise specified in the current prospectus.

The risks of investing in a non-diversified fund, such as increased
susceptibility to adverse economic or regulatory developments, are described in
the fund's prospectus.
- - - - -------------------------------------------------------------------------------

<PAGE>

FRANKLIN NEW YORK TAX-FREE TRUST
- - - - -------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS IN SECURITIES AND NET ASSETS, DECEMBER 31, 1994

</TABLE>
<TABLE>
<CAPTION>

FACE VALUE
AMOUNT FRANKLIN NEW YORK TAX-EXEMPT MONEY FUND (NOTE 1)
- - - - ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENTS 99.5%
$1,500,000 (a)Babylon IDA, Resources Recovery Revenue, Equity Babylon Project, Daily VRDN
and Put, 5.90%, 12/01/24 ..................................................................... $1,500,000
300,000 (a)Babylon, Town of, IDA, IDR, General Microwave Corp. Facility, Series 1984,
Weekly VRDN and Put, 5.25%, 10/01/99 ......................................................... 300,000
1,000,000 Broome County, BAN, 3.75%, 04/20/95 ........................................................... 1,001,603
2,000,000 Deer Park Union Free School District, TAN, 4.25%, 06/28/95 .................................... 2,004,727
1,300,000 (a)Erie County Water Authority Revenue, Series A, AMBAC Insured, Weekly VRDN
and Put, 4.75%, 12/01/16 ..................................................................... 1,300,000
600,000 (a)Erie County Water Authority Revenue, Series B, AMBAC Insured, Weekly VRDN
and Put, 4.75%, 12/01/16 ..................................................................... 600,000
1,500,000 (a)Great Neck North, Water Authority System Revenue, Series A, FGIC Insured,
Weekly VRDN and Put, 5.25%, 01/01/20 ......................................................... 1,500,000
450,000 (a)Monroe County IDAR, Refunding, Granite Building, Weekly VRDN and Put,
5.00%, 06/01/00 .............................................................................. 450,000
1,000,000 (a)Nassau County IDA, IDR, Refunding, Credit Place, Inc. Project, Series A,
Weekly VRDN and Put, 5.75%, 06/01/07 ......................................................... 1,000,000
1,000,000 (a)Nassau IDA, Research Facility Revenue, Cold Spring Harbor Laboratory Project,
Weekly VRDN and Put, 5.85%, 07/01/23 ......................................................... 1,000,000
(a)New York City GO,
600,000 Series B, FGIC Insured, Daily VRDN and Put, 4.80%, 10/01/20 .................................. 600,000
100,000 Series B, FGIC Insured, Daily VRDN and Put, 4.80%, 10/01/22 .................................. 100,000
300,000 Series B-2, Daily VRDN and Put, 4.80%, 08/15/19 .............................................. 300,000
500,000 Series B-5, MBIA Insured, Daily VRDN & Put, 6.75%, 08/15/22 .................................. 500,000
200,000 Series B-8, Weekly VRDN and Put, 5.35%, 08/15/24 ............................................. 200,000
100,000 Series C-4, Daily VRDN and Put, 6.50%, 08/01/96 .............................................. 100,000
300,000 Series D, Daily VRDN and Put, 6.10%, 08/01/95 ................................................ 300,000
100,000 Series E, Daily VRDN and Put, 6.50%, 05/15/97 ................................................ 100,000
1,450,000 (a)New York City HDC, Mortgage Revenue, Parkgate Tower No. 1, Weekly VRDN
and Put, 5.40%, 12/01/07 ..................................................................... 1,450,000
800,000 (a)New York City HDC, Mortgage Revenue, Residential East 17th Street, Series A,
Daily VRDN and Put, 5.35%, 01/01/23 .......................................................... 800,000
500,000 (a)New York City IDA, Various Civic Facilities, National Audobon Society, Daily VRDN
and Put, 5.75%, 12/01/14 ..................................................................... 500,000
1,000,000 (a)New York City IDA, IDR, Field Hotel Association Project, JFK Project, Weekly VRDN
and Put, 4.80%. 12/01/15 ..................................................................... 1,000,000
800,000 (a)New York City IDA, IDR, La Guardia Association Project, Weekly VRDN and Put,
4.80%, 12/01/15 .............................................................................. 800,000
800,000 New York City RAN, Series B, 4.75%, 06/30/95 .................................................. 802,344

</TABLE>

The accompanying notes are an integral part of these financial statements.

<PAGE>
FRANKLIN NEW YORK TAX-FREE TRUST
- - - - --------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS IN SECURITIES AND NET ASSETS, DECEMBER 31, 1994 (CONT.)

<TABLE>
<CAPTION>
FACE VALUE
AMOUNT FRANKLIN NEW YORK TAX-EXEMPT MONEY FUND (NOTE 1)
- - - - -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENTS (CONT.)
(a)New York City Tri-Cultural Resources Revenue,
$1,200,000 American National Museum, Series B, MBIA Insured, Weekly VRDN and Put,
4.70%, 04/01/21 ............................................................................ $1,200,000
1,600,000 Carnegie Hall, Weekly VRDN and Put, 5.00%, 12/01/15 ......................................... 1,600,000
1,900,000 Solomon R. Guggenheim, Series B, Daily VRDN and Put, 5.75%, 12/01/15 ........................ 1,900,000
400,000 The Jewish Museum, Weekly VRDN and Put, 5.50%, 12/01/21 ..................................... 400,000
(a)New York State Dormitory Authority Revenues,
2,700,000 Metropolitan Museum of Art, Series B, Weekly VRDN and Put, 5.20%, 07/01/23 .................. 2,700,000
3,300,000 Oxford University Press, Inc., Daily VRDN and Put, 6.75%, 07/01/23 .......................... 3,300,000
2,400,000 New York State Dormitory Authority, TECP, Memorial Sloan Kettering, Series C,
4.05%, 02/16/95 ............................................................................... 2,400,000
(a)New York State Energy Research and Development Authority, PCR,
1,100,000 Niagara Mohawk Power Corp., Series 1985-A, Daily VRDN and Put, 5.00%, 07/01/15 .............. 1,100,000
300,000 Niagara Mohawk Power Corp., Series 1985-B, Daily VRDN and Put, 5.30%, 12/01/25 .............. 300,000
200,000 Niagara Mohawk Power Corp., Series 1986-A, Daily VRDN and Put, 5.00%, 12/01/23 .............. 200,000
200,000 Niagara Mohawk Power Corp., Series 1986-A, Daily VRDN and Put, 5.65%, 12/01/26 .............. 200,000
1,000,000 Orange and Rockland Project, Series A, FGIC Insured, Weekly VRDN and Put,
4.70%, 10/01/14 ............................................................................ 1,000,000
2,500,000 New York State Energy Research and Development, TECP, 3.70%, 01/06/95 .......................... 2,500,000
1,000,000 New York State Environmental Facilities Corp., TECP, Solid Waste Disposal Revenue,
Refunding, General Electric Co. Project, 3.20%, 01/09/95 ...................................... 1,000,000
300,000 (a)New York State HFA, MFR, Series A, AMBAC Insured, Weekly VRDN and Put,
5.15%, 11/01/28 ............................................................................... 300,000
1,100,000 (a)New York State HFA, Normandie Court I Project, Weekly VRDN and Put,
5.50%, 05/15/15 ............................................................................... 1,100,000
(a)New York State Job Development Authority, State Guaranteed,
200,000 Series A-1 to A-21, Registered, Bond Purchase Agreement, Daily VRDN and Put,
6.80%, 03/01/03 ............................................................................ 200,000
1,395,000 Series A-1 to A-36, Daily VRDN and Put, 5.95%, 03/01/05 ..................................... 1,395,000
345,000 Series C-1 to C-30, Monthly VRDN and Put, 3.75%, 03/01/99 ................................... 345,000
215,000 Series G-1 to G-33, Monthly VRDN, Weekly Put, 3.75%, 03/01/99 ............................... 215,000
25,000 Series H-1 to H-11, Monthly VRDN, Weekly Put, 3.75%, 03/01/99 ............................... 25,000
1,200,000 Special Purposes, Series A-1 to A-25, Daily VRDN and Put, 6.15%, 03/01/07 ................... 1,200,000
(a)New York State Local Government Assistance Corp.,
2,300,000 Series A, Weekly VRDN and Put, 5.10%, 04/01/22 .............................................. 2,300,000
500,000 Series B, Weekly VRDN and Put, 5.20%, 04/01/23 .............................................. 500,000
1,000,000 New York State Medical Care Facilities, Finance Agency Revenue, 1985 Series B,
Columbia Presbyterian Hospital Project, 9.75%, 01/15/95 ....................................... 1,022,687
3,600,000 (a)New York State Metropolitan Transport Authority, Commuter Facilities Revenue,
Weekly VRDN and Put, 5.15%, 07/01/21 .......................................................... 3,600,000
</TABLE>

The accompanying notes are an integral part of these financial statements.

</TABLE>

At December 31, 1994, there was no unrealized appreciation or depreciation for
financial statement or income tax purposes.

The accompanying notes are an integral part of these financial statements.

<PAGE>

FRANKLIN NEW YORK TAX-FREE TRUST
STATEMENT OF INVESTMENTS IN SECURITIES AND NET ASSETS, DECEMBER 31, 1994 (CONT.)

FRANKLIN NEW YORK TAX-EXEMPT MONEY FUND

PORTFOLIO ABBREVIATIONS:
AMBAC - American Municipal Bond Assurance Corp.
BAN - Bond Anticipation Notes
FGIC - Financial Guaranty Insurance Co.
FRN - Floating Rate Notes
GO - General Obligation
HDC - Housing Development Corp.
HFA - Housing Finance Authority/Agency
IDA - Industrial Development Authority/Agency
IDAR - Industrial Development Authority/Agency Revenue
IDR - Industrial Development Revenue
MBIA - Municipal Bond Investors Assurance Corp.
MFR - Multi-Family Revenue
PCR - Pollution Control Revenue
RAN - Revenue Anticipation Notes
TAN - Tax Anticipation Notes
TECP - Tax-Exempt Commercial Paper

(a)Variable rate demand notes (VRDN's) are tax-exempt obligations which contain
a floating or variable interest rate adjustment formula and an unconditional
right of demand to receive payment of the principal balance plus accrued
interest upon short notice prior to specified dates. The interest rate may
change on specified dates in relationship with changes in a designated rate
(such as the prime interest rate or U.S. Treasury bills rate).

The accompanying notes are an integral part of these financial statements.

<PAGE>

FRANKLIN NEW YORK TAX-FREE TRUST
- - - - --------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS IN SECURITIES AND NET ASSETS, DECEMBER 31, 1994

FACE VALUE
AMOUNT FRANKLIN NEW YORK INSURED TAX-FREE INCOME FUND (NOTE 1)
- - - - -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
BONDS 97.1%
Albany Capital Improvement GO,
$ 500,000 MBIA Insured, 5.25%, 11/01/11............................................................... $ 429,280
780,000 MBIA Insured, 5.25%, 11/01/13 .............................................................. 655,574
Albany County GO,
1,000,000 FGIC Insured, 5.85%, 06/01/12 .............................................................. 917,210
1,275,000 FGIC Insured, 5.85%, 06/01/13 .............................................................. 1,160,008
2,505,000 Albany Municipal Water Finance Authority, Water and Sewer System Revenue,
Refunding, Series A, FGIC Insured, 5.95%, 12/01/12 ........................................... 2,352,746
Alden Central School District,
275,000 AMBAC Insured, 6.25%, 06/15/08 ............................................................. 272,278
275,000 AMBAC Insured, 6.25%, 06/15/09 ............................................................. 269,616
125,000 AMBAC Insured, 6.25%, 06/15/10 ............................................................. 121,858
200,000 Brookhaven GO, Series B, MBIA Insured, 7.00%, 05/01/09 ........................................ 209,960
1,000,000 Broome County COP, Public Safety Facilities, MBIA Insured, 5.25%, 04/01/22 .................... 828,070
495,000 Broome and Delaware Counties School District, AMBAC Insured, 6.35%, 06/15/10 .................. 484,976
225,000 Buffalo GO, Series A & C, AMBAC Insured, Pre-Refunded, 7.25%, 04/01/08 ........................ 244,969
Buffalo,
360,000 Series E, AMBAC Insured, 6.70%, 12/01/17.................................................... 357,052
385,000 Series E, AMBAC Insured, 6.70%, 12/01/18.................................................... 381,793
410,000 Series E, AMBAC Insured, 6.70%, 12/01/19.................................................... 406,527
700,000 Buffalo Sewer Authority System Revenue, Refunding, Series G, FGIC Insured,
5.25%, 07/01/08 .............................................................................. 615,909
100,000 Camden Central School District, AMBAC Insured, 7.10%, 06/15/07.................. 107,625
Canandaigua City School District,
625,000 AMBAC Insured, 6.40%, 06/01/08 ............................................................. 627,175
110,000 AMBAC Insured, 6.50%, 06/01/10 ............................................................. 110,415
550,000 AMBAC Insured, 6.50%, 06/01/11.............................................................. 549,400
Central Square School District,
900,000 FGIC Insured, 6.50%, 06/15/08 .............................................................. 915,282
900,000 FGIC Insured, 6.50%, 06/15/09 .............................................................. 907,497
70,000 Chateaugay Central School District, AMBAC Insured, 6.70%, 06/15/09 ............................ 71,889
Clifton Park Water Authority, Water System Revenue,
2,625,000 Series A, FGIC Insured, Pre-Refunded, 6.375%, 10/01/11...................................... 2,751,394
2,000,000 Series A, FGIC Insured, Pre-Refunded, 6.375%, 10/01/26 ..................................... 2,096,300
Eastport USD,
225,000 MBIA Insured, 6.45%, 12/01/06 .............................................................. 230,425
225,000 MBIA Insured, 6.45%, 12/01/07............................................................... 228,726
225,000 MBIA Insured, 6.45%, 12/01/08 .............................................................. 226,829
200,000 Erie County Water Authority Revenue, Refunding, Series B, AMBAC Insured,
ETM 12/01/09, 6.75%, 12/01/14 ................................................................ 204,394

</TABLE>

The accompanying notes are an integral part of these financial statements.

<TABLE>
<CAPTION>
FACE VALUE
AMOUNT FRANKLIN NEW YORK INSURED TAX-FREE INCOME FUND (NOTE 1)
- - - - -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
BONDS (CONT.)
Evans-Brant Central School District,
$ 100,000 Series 1991, MBIA Insured, 6.85%, 06/15/08 ................................................. $ 104,837
55,000 Series 1991, MBIA Insured, 6.85%, 06/15/09 ................................................. 57,253
Fallsburg Public Improvement, GO,
330,000 Refunding, Series B, AMBAC Insured, 5.25%, 04/01/13 ........................................ 278,190
145,000 Refunding, Series B, AMBAC Insured, 5.25%, 04/01/14......................................... 121,614
330,000 Series B, AMBAC Insured, 5.50%, 04/01/08.................................................... 302,072
345,000 Series B, AMBAC Insured, 5.50%, 04/01/10.................................................... 308,547
Greece Central School District No. 1,
950,000 Series 1992, FGIC Insured, 6.00%, 06/15/16 ................................................. 873,848
950,000 Series 1992, FGIC Insured, 6.00%, 06/15/17.................................................. 867,170
950,000 Series 1992, FGIC Insured, 6.00%, 06/15/18 ................................................. 865,631
285,000 Hamburg Town Public Improvement, MBIA Insured, 6.30%, 11/15/10 ................................ 277,733
Hempstead Town,
125,000 Series B, AMBAC Insured, 6.50%, 01/01/10.................................................... 124,879
100,000 Series B, AMBAC Insured, 6.50%, 01/01/11.................................................... 99,899
100,000 Series B, AMBAC Insured, 6.50%, 01/01/12.................................................... 99,388
150,000 Series C, AMBAC Insured, 6.50%, 02/15/10.................................................... 149,844
150,000 Series C, AMBAC Insured, 6.50%, 02/15/11.................................................... 149,838
100,000 Series C, AMBAC Insured, 6.50%, 02/15/12.................................................... 99,380
Hermon de Kalb, Etc., Central School District,
150,000 Series 1992, MBIA Insured, 6.45%, 06/15/09 ................................................. 149,156
150,000 Series 1992, MBIA Insured, 6.45%, 06/15/10 ................................................. 148,404
150,000 Series 1992, MBIA Insured, 6.45%, 06/15/11 ................................................. 148,346
2,000,000 Islip Resources Recovery Agency Revenue, Series B, AMBAC Insured,
6.125%, 07/01/12 ............................................................................. 1,878,640
375,000 Lake George Central School District, MBIA Insured, 6.50%, 06/15/09............................. 376,369
Lockport GO,
265,000 Series B, MBIA Insured, 6.15%, 03/15/18..................................................... 246,174
280,000 Series B, MBIA Insured, 6.15%, 03/15/19..................................................... 259,762
430,000 Lockport Town, Public Improvement, MBIA Insured, 5.40%, 03/01/10 .............................. 382,532
155,000 Mahopac Central School District, AMBAC Insured, 6.80%, 06/15/08 ............................... 161,800
210,000 Middle Country Central School District, New York Centereach, AMBAC Insured,
6.90%, 12/15/06 .............................................................................. 222,982
Monroe County, Public Improvement,
985,000 AMBAC Insured, 6.15%, 06/01/18.............................................................. 923,566
1,730,000 AMBAC Insured, 6.15%, 06/01/19.............................................................. 1,620,214
1,055,000 Mount Sinai Union Free School District, Refunding, AMBAC Insured, 6.20%, 02/15/13 1,009,635
Nassau County GO, Refunding,
210,000 Series C, FGIC Insured, 5.875%, 08/01/16.................................................... 188,395
300,000 Series D, FGIC Insured, 5.875%, 05/15/16.................................................... 266,178

</TABLE>

The accompanying notes are an integral part of these financial statements.

<PAGE>

FRANKLIN NEW YORK TAX-FREE TRUST
- - - - --------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS IN SECURITIES AND NET ASSETS, DECEMBER 31, 1994 (CONT.)

FACE VALUE
AMOUNT FRANKLIN NEW YORK INSURED TAX-FREE INCOME FUND (NOTE 1)
- - - - -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
BONDS (CONT.)
$ 1,150,000 Nassau County IDA, Civic Facilities Revenue, Hofstra University Project, AMBAC
Insured, 6.75%, 08/01/11 ..................................................................... $1,164,824
370,000 Nassau County Sewer District, Refunding, Series E, MBIA Insured, 5.45%, 05/01/15............... 315,751
New Rochelle,
195,000 Series C, MBIA Insured, 6.25%, 03/15/21 ..................................................... 182,390
390,000 Series C, MBIA Insured, 6.25%, 03/15/22 ..................................................... 364,439
530,000 Series C, MBIA Insured, 6.25%, 03/15/23 ..................................................... 494,829
555,000 Series C, MBIA Insured, 6.25%, 03/15/24 ..................................................... 517,743
275,000 Series G, MBIA Insured, 5.40%, 01/15/11 ..................................................... 240,449
100,000 New York City Educational Construction Fund Revenue, Series A, MBIA Insured,
7.125%, 04/01/13 ............................................................................. 107,833
New York City GO,
300,000 FGIC Insured, 7.25%, 02/01/06 ............................................................... 313,524
50,000 Series C-1, MBIA Insured, 6.625%, 08/01/12 .................................................. 49,766
New York City Municipal Water Finance Authority, Water and Sewer System Revenue,
1,000,000 Series A, FGIC Insured, 6.75%, 06/15/16 ..................................................... 1,005,140
465,000 Series A, FGIC Insured, 6.00%, 06/15/20 ..................................................... 424,950
17,420,000 Series C, AMBAC Insured, 6.20%, 06/15/21..................................................... 16,224,814
1,830,000 Series C, AMBAC Insured, 6.50%, 06/15/21..................................................... 1,793,693
495,000 Series C, FGIC Insured, Pre-Refunded, 7.00%, 06/15/16 ....................................... 534,397
New York City Trust, Cultural Resource Revenue, Refunding, Museum of Modern Art,
250,000 Series A, AMBAC Insured, 6.625%, 01/01/11.................................................... 251,588
2,805,000 Series A, AMBAC Insured, 6.625%, 01/01/19.................................................... 2,813,387
New York State Dormitory Authority Revenues,
140,000 Associated Children's, Inc., MBIA Insured, 7.60%, 07/01/18 .................................. 146,919
2,460,000 Brooklin Law School, CGIC Insured, 6.40%, 07/01/11........................................... 2,420,640
275,000 City University System, Series C, FGIC Insured, 7.00%, 07/01/14.............................. 281,402
500,000 Colgate University, FGIC Insured, 5.625%, 07/01/13........................................... 445,445
600,000 Colgate University, Series A, MBIA Insured, 6.70%, 07/01/11.................................. 605,382
3,000,000 Fordham University, FGIC Insured, 5.75%, 07/01/15............................................ 2,697,180
2,000,000 Fordham University, FGIC Insured, 5.50%, 07/01/23............................................ 1,683,300
750,000 Founding Charitable Corp., MBIA Insured, 6.50%, 07/01/12 .................................... 741,503
1,000,000 Hamilton College, MBIA Insured, 6.50%, 07/01/21.............................................. 968,130
1,000,000 Hartwick College, MBIA Insured, 6.25%, 07/01/12 ............................................. 970,030
1,500,000 Ithica College, MBIA Insured, 6.25%, 07/01/21................................................ 1,406,265
2,780,000 Judicial Lease Facilities, Series B, MBIA Insured, 7.00%, 04/15/16 .......................... 2,847,804
1,500,000 March of Dimes, AMBAC Insured, 5.60%, 07/01/12 .............................................. 1,337,190
2,580,000 Marist College, MBIA Insured, 6.00%, 07/01/12 ............................................... 2,405,618
2,500,000 New York University, FGIC Insured, 6.25%, 07/01/09 .......................................... 2,467,200
625,000 Refunding, Culinary Institute of America, Connie Lee Insured, 6.00%, 07/01/22 ............... 558,205
2,500,000 Refunding, Sinai School of Medicine, MBIA Insured, 6.75%, 07/01/15 .......................... 2,514,325

</TABLE>

The accompanying notes are an integral part of these financial statements.

<PAGE>

FACE VALUE
AMOUNT FRANKLIN NEW YORK INSURED TAX-FREE INCOME FUND (NOTE 1)
- - - - --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
BONDS (CONT.)
New York State Dormitory Authority Revenues, (cont.)
$ 1,000,000 St. John's University, AMBAC Insured, 6.875%, 07/01/11.......................................... $ 1,024,770
2,500,000 State University Educational Facilities, Series A, FGIC Insured, 6.00%, 05/15/22 2,284,525
1,220,000 University of Rochester, MBIA Insured, 6.50%, 07/01/09 ......................................... 1,222,513
875,000 New York State Dormitory Authority Revenue, Leake and Watts Services, Inc.,
MBIA Insured, 6.00%, 07/01/23 ................................................................... 791,420
New York State Energy Research and Development Authority, Electric Facilities
Revenue, Consolidated Edison Co. of New York, Inc. Project,
4,000,000 Refunding, Series B, MBIA Insured, 5.25%, 08/15/20 ............................................ 3,112,720
3,300,000 Series 1993, MBIA Insured, 6.00%, 03/15/28 .................................................... 2,842,521
4,950,000 Series A, MBIA Insured, 6.75%, 01/15/27........................................................ 4,798,778
210,000 Series C, MBIA Insured, 7.25%, 11/01/24 ....................................................... 214,040
New York State Energy Research and Development Authority, Gas Facilities
Revenue, Brooklyn Union Gas,
3,050,000 Series II, MBIA Insured, 7.00%, 12/01/20 ...................................................... 3,078,914
2,240,000 Series A, MBIA Insured, 6.75%, 02/01/24 ....................................................... 2,186,979
2,215,000 Series C, MBIA Insured, 5.60%, 06/01/25 ....................................................... 1,840,909
New York State Energy Research and Development Authority, PCR, Refunding,
1,500,000 Niagara Mohawk Power Corp., Series A, FGIC Insured, 6.625%, 10/01/13 ......................... 1,473,780
5,000,000 Niagara Mohawk Power Corp., Series A, FGIC Insured, 7.20%, 07/01/29 ........................... 5,157,450
1,150,000 Rochester Gas and Electric Project, Series A, MBIA Insured, 6.35%, 05/15/32 ................... 1,052,664
1,000,000 Rochester Gas and Electric Project, Series B, MBIA Insured, 6.50%, 05/15/32 ................... 921,610
New York State Environmental Facilities Corp., Water Facilities Revenue, Spring Valley
Water Co., Inc. Project,
3,000,000 Series A, AMBAC Insured, 5.65%, 11/01/23....................................................... 2,536,410
2,000,000 Series A, AMBAC Insured, 6.30%, 08/01/24....................................................... 1,839,980
3,000,000 Series B, AMBAC Insured, 6.15%, 08/01/24....................................................... 2,721,120
New York State Medical Care Facilities Finance Agency Revenue,
5,735,000 Long-Term Health Care, Series A, CGIC Insured, 6.80%, 11/01/14 ................................ 5,769,525
5,750,000 Long-Term Health Care, Series B, CGIC Insured, 6.45%, 11/01/14 ................................ 5,586,700
4,550,000 Long-Term Health Care, Series C, CGIC Insured, 6.40%, 11/01/14................................. 4,396,074
1,000,000 Our Lady of Victory Hospital, Series A, AMBAC Insured, 6.625%, 11/01/16........................ 990,200
1,000,000 Refunding, Hospital and Nursing Home Mortgage, Series C, MBIA Insured,
6.25%, 08/15/12 .............................................................................. 957,780
1,495,000 Refunding, St. Mary's Hospital Project, Series A, AMBAC Insured, 6.20%, 11/01/14............... 1,427,650
700,000 Sisters of Charity Hospital, Series A, AMBAC Insured, 6.60%, 11/01/10 ......................... 701,756
1,500,000 Sisters of Charity Hospital, Series A, AMBAC Insured, 6.625%, 11/01/18 ........................ 1,484,745
New York State Power Authority Revenue and General Purpose,
5,000,000 Refunding, Series C, FGIC Insured, 5.25%, 01/01/18 ............................................ 4,070,550
3,255,000 Series Y, AMBAC Insured, 6.50%, 01/01/11 ...................................................... 3,273,000
1,000,000 New York State Thruway Authority, Highway and Bridge Trust Fund, Series B,
FGIC Insured, 6.00%, 04/01/14 ................................................................... 928,890

</TABLE>

The accompanying notes are an integral part of these financial statements.

<PAGE>

FACE VALUE
AMOUNT FRANKLIN NEW YORK INSURED TAX-FREE INCOME FUND (NOTE 1)
- - - - ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
BONDS (CONT.)
$12,500,000 New York State Tollway Authority General Revenue, Series A, FGIC Insured,
5.50%, 01/01/23 ............................................................................... $10,532,500
7,500,000 Niagara Falls Bridge Commission Toll Revenue, Refunding, Series B, FGIC Insured,
5.25%, 10/01/21 ............................................................................... 6,075,825
Niagara Falls Public Improvement,
1,000,000 MBIA Insured, 6.85%, 03/01/19 .............................................................. 1,002,190
500,000 MBIA Insured, 6.90%, 03/01/20 .............................................................. 501,090
500,000 MBIA Insured, 6.90%, 03/01/21 .............................................................. 501,090
1,200,000 Niagara Falls Water Treatment Plant, MBIA Insured, 7.00%, 11/01/12.............................. 1,217,160
Niagara Frontier Transportation Authority, Airport Revenue, Greater Buffalo
International Airport,
1,000,000 Series A, AMBAC Insured, 6.25%, 04/01/24.................................................... 920,970
500,000 Series C, AMBAC Insured, 6.00%, 04/01/24.................................................... 452,360
North Hempstead GO, Refunding,
210,000 Series A, FGIC Insured, 6.40%, 02/01/11..................................................... 206,478
1,065,000 Series B, FGIC Insured, 6.40%, 04/01/15..................................................... 1,038,939
1,060,000 Series B, FGIC Insured, 6.40%, 04/01/16..................................................... 1,027,606
North Hempstead Public Improvement, GO,
195,000 Series A, MBIA Insured, 5.375%, 05/15/14.................................................... 166,815
470,000 Series A, MBIA Insured, 5.375%, 05/15/15.................................................... 400,393
500,000 North Hempstead Solid Waste Management Revenue, Refunding, Series B,
MBIA Insured, 5.00%, 02/01/12 ................................................................. 412,110
1,125,000 Oneonta HDC, Mortgage Revenue, Refunding, Oneonta SF, Series A, MBIA Insured,
5.45%, 07/01/22 ............................................................................... 912,319
100,000 Onondaga Central School District, MBIA Insured, 6.80%, 06/15/10................................. 103,284
75,000 Ontario County GO, Series A, FGIC Insured, 6.50%, 05/15/11...................................... 75,292
Oyster Bay Public Improvement, GO,
550,000 Series A, FGIC Insured, 5.60%, 04/15/11..................................................... 490,045
500,000 Series A, FGIC Insured, 5.60%, 04/15/12..................................................... 443,690
375,000 Series A, FGIC Insured, 5.60%, 04/15/13..................................................... 331,500
300,000 Series A, FGIC Insured, 5.60%, 04/15/14..................................................... 262,785
300,000 Series A, FGIC Insured, 5.60%, 04/15/15..................................................... 260,379
175,000 Series A, FGIC Insured, 5.60%, 04/15/16..................................................... 151,370
175,000 Series A, FGIC Insured, 5.60%, 04/15/17..................................................... 149,994
175,000 Series A, FGIC Insured, 5.60%, 04/15/18..................................................... 149,527
175,000 Series A, FGIC Insured, 5.60%, 04/15/19..................................................... 149,090
Port Authority of New York and New Jersey,
1,000,000 Consolidated 71st Series, AMBAC Insured, 6.50%, 01/15/26 ................................... 973,990
1,600,000 Consolidated 71st Series, MBIA Insured, 6.50%, 01/15/26 .................................... 1,558,384
4,230,000 Consolidated 76th Series, AMBAC Insured, 6.50%, 11/01/26 ................................... 4,038,677
1,885,000 Consolidated 84th Series, MBIA Insured, 5.875%, 07/15/19 ................................... 1,668,111

</TABLE>

The accompanying notes are an integral part of these financial statements.

<PAGE>

FACE VALUE
AMOUNT FRANKLIN NEW YORK INSURED TAX-FREE INCOME FUND (NOTE 1)
- - - - ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
BONDS (CONT.)
$2,000,000 Puerto Rico Commonwealth Electric Power Authority Revenue, Water Resources,
Series R, CGIC Insured, 6.25%, 07/01/17........................................................... $1,909,540
Puerto Rico HFC, SFMR,
850,000 Portfolio 1-D, GNMA/MBS, 6.75%, 10/15/14........................................................ 852,660
525,000 Portfolio 1-D, GNMA/MBS, 6.85%, 10/15/24........................................................ 526,633
5,000,000 Puerto Rico PBA Guaranteed, Public Education Health Facilities, Refunding,
Series M, CGIC Insured, 5.75%, 07/01/15........................................................... 4,505,600
810,000 Rensselear County GO, AMBAC Insured, 6.70%, 02/15/11 .............................................. 825,139
Riverhead GO,
140,000 Series B, AMBAC Insured, 5.00%, 06/15/10........................................................ 117,793
130,000 Series B, AMBAC Insured, 5.00%, 06/15/11........................................................ 108,063
130,000 Series B, AMBAC Insured, 5.00%, 06/15/12........................................................ 107,348
40,000 Rome GO, AMBAC Insured , 6.375%, 03/01/05 ......................................................... 40,940
125,000 Royalton Water Improvement, MBIA Insured, 6.40%, 02/15/12 ......................................... 122,324
Schenevus Central School District,
330,000 Series 1991, AMBAC Insured, 6.45%, 06/15/08 .................................................... 331,155
330,000 Series 1991, AMBAC Insured, 6.45%, 06/15/09 .................................................... 329,672
330,000 Schodack Central School District, AMBAC Insured, 6.875%, 12/15/10 ................................. 343,481
100,000 Schuylerville Central School District, MBIA Insured, 6.875%, 06/15/07.............................. 105,696
100,000 South Glens Falls Central School District, Series A, MBIA Insured, 6.85%, 06/15/10................. 103,767
Suffolk County GO, Public Improvement,
590,000 Refunding, Series B, FGIC Insured, 6.20%, 05/01/11.............................................. 568,849
570,000 Refunding, Series B, FGIC Insured, 6.20%, 05/01/13 ............................................. 545,319
365,000 Series 1989, FGIC Insured, Pre-Refunded, 6.50%, 07/15/13 ....................................... 382,469
Suffolk County Water Authority Waterworks Revenue, Refunding,
1,000,000 AMBAC Insured, Pre-Refunded, 7.10%, 06/01/10 ................................................... 1,077,380
3,000,000 Series B, AMBAC Insured, 5.625%, 06/01/16 ...................................................... 2,617,530
Sullivan County GO, Public Improvement,
505,000 MBIA Insured, 5.20%, 03/15/14 .................................................................. 416,251
520,000 MBIA Insured, 5.20%, 03/15/15 .................................................................. 426,364
510,000 MBIA Insured, 5.20%, 03/15/16 .................................................................. 413,666
500,000 MBIA Insured, 5.20%, 03/15/17 .................................................................. 403,630
Triborough Bridge and Tunnel Authority Revenue,
1,500,000 Series Q, AMBAC Insured, 6.00%, 01/01/13 ....................................................... 1,386,750
740,000 Series S, FGIC Insured, Pre-Refunded, 7.00%, 01/01/21........................................... 796,070
175,000 Series T, AMBAC Insured, Pre-Refunded, 7.00%, 01/01/20.......................................... 188,886
1,900,000 Series T, AMBAC Insured, Pre-Refunded, 6.00%, 01/01/22.......................................... 1,923,693
1,100,000 Series T, MBIA Insured, Pre-Refunded, 7.00%, 01/01/20........................................... 1,187,285
4,475,000 Series X, AMBAC Insured, 6.50%, 01/01/19........................................................ 4,353,235
2,750,000 Series X, MBIA Insured, 6.50%, 01/01/19......................................................... 2,675,173

</TABLE>

The accompanying notes are an integral part of these financial statements.

<PAGE>

FACE VALUE
AMOUNT FRANKLIN NEW YORK INSURED TAX-FREE INCOME FUND (NOTE 1)
- - - - ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
BONDS (CONT.)
Warrensburg Central School District,
$ 250,000 Series II, AMBAC Insured, 6.25%, 06/15/08 ..................................................... $ 245,318
250,000 Series II, AMBAC Insured, 6.25%, 06/15/09 ..................................................... 243,960
250,000 Series II, AMBAC Insured, 6.25%, 06/15/10 ..................................................... 242,533
440,000 Washington County Public Improvement, FGIC Insured, 6.375%, 10/15/10.............................. 432,018
65,000 Williamsville Central School District, MBIA Insured, 6.50%, 12/01/10 ............................. 64,930
-----------
TOTAL BONDS (COST $231,929,592)........................................................... 218,576,564
-----------
(a)SHORT TERM INVESTMENTS 1.0%
400,000 New York City GO, Fiscal 1994 Series A-4, Daily VRDN and Put, 6.05%, 08/01/21..................... 400,000
600,000 New York City, Series B, Sub-series B-6, MBIA Insured, Daily VRDN and Put,
6.75%, 08/15/05 ................................................................................. 600,000
1,200,000 New York City Municipal Water Finance Authority, Water and Sewer System Revenue,
Series G, FGIC Insured, Daily VRDN and Put, 6.15%, 06/15/24...................................... 1,200,000
-------------
TOTAL SHORT TERM INVESTMENTS (COST $2,200,000)............................................. 2,200,000
-------------
TOTAL INVESTMENTS (COST $234,129,592) 98.1% ......................................... 220,776,564
OTHER ASSETS AND LIABILITIES, NET 1.9% .............................................. 4,284,380
-------------
NET ASSETS 100.0% ................................................................... $ 225,060,944
=============
At December 31, 1994, the net unrealized depreciation based on the cost of
Investments for income tax purposes of $234,130,871 was as follows:
Aggregate gross unrealized appreciation for all investments in which there was an
excess of value over tax cost ................................................................ $ 1,089,706
Aggregate gross unrealized depreciation for all investments in which there was an
excess of tax cost over value ................................................................ (14,444,013)
-------------
Net unrealized depreciation ................................................................... $ (13,354,307)
=============

</TABLE>

PORTFOLIO ABBREVIATIONS:

AMBAC - American Municipal Bond Assurance Corp.
CGIC - Capital Guaranty Insurance Co.
COP - Certificate of Participation
ETM - Escrow to Maturity
FGIC - Financial Guaranty Insurance Corp.
GNMA - Government National Mortgage Association
GO - General Obligation
HDC - Housing Development Corp.
HFC - Housing Financial Corp.
IDA - Industrial Development Authority/Agency
MBIA - Municipal Bond Investors Assurance Corp.
MBS - Mortgage-Backed Securities
PBA - Public Building Authority
PCR - Pollution Control Revenue
SF - Single Family
USD - Unified School District

The accompanying notes are an integral part of these financial statements.

<PAGE>

FRANKLIN NEW YORK TAX-FREE TRUST
- - - - --------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS IN SECURITIES AND NET ASSETS, DECEMBER 31, 1994

FACE VALUE
AMOUNT FRANKLIN NEW YORK INTERMEDIATE-TERM TAX-FREE INCOME FUND (NOTE 1)
- - - - -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
BONDS 97.4%
Buffalo General Improvement,
$ 555,000 Series D, AMBAC Insured, 5.80%, 12/01/03 ....................................................... $ 550,782
555,000 Series D, AMBAC Insured, 5.90%, 12/01/04 ....................................................... 550,044
590,000 Series D, AMBAC Insured, 6.00%, 12/01/05 ....................................................... 584,383
100,000 Cortland County IDA, Civic Facility Revenue, Cortland Memorial Hospital, Inc. Project,
6.15%, 07/01/02 ................................................................................... 95,673
85,000 Franklin County IDA, Lease Revenue, Correctional Facility Project, 6.375%, 11/01/02................. 83,432
260,000 Guam Airport Authority Revenue, Refunding, Series A, 6.00%, 10/01/03 ............................... 252,756
1,900,000 Guam Power Authority Revenue, Series A, 6.00%, 10/01/04 ............................................ 1,866,902
Metropolitan Transportation Authority Service,
935,000 Contract Commuter Facilities, Series O, 5.375%, 07/01/02 ....................................... 879,255
575,000 Contract Transport Facilities, Series O, 5.25%, 07/01/01 ....................................... 543,570
New York City GO,
5,200,000 Refunding, Series A, 6.375%, 08/01/05............................................................ 5,046,444
3,500,000 Series H, 7.00%, 02/01/06 ....................................................................... 3,556,000
New York City IDA, Civic Facility Revenue,
525,000 New York Blood Center, Inc. Project, 6.80%, 05/01/02 ............................................ 526,722
1,875,000 USTA National Tennis Center Project, FSA Insured, 6.00%, 11/15/03................................ 1,883,756
1,675,000 USTA National Tennis Center Project, FSA Insured, 6.10%, 11/15/04................................ 1,683,442
4,010,000 New York State COP, Commissioner General Services Department, 6.50%, 03/01/00 ...................... 4,098,982
New York State Dormitory Authority Revenues,
1,175,000 Department of Health, 5.65%, 07/01/04 ........................................................... 1,096,452
100,000 Refunding, City University, Series U, 6.25%, 07/01/02............................................ 100,352
1,720,000 Refunding, City University, Series U, 6.35%, 07/01/04............................................ 1,709,095
New York State Medical Care Facilities, Finance Agency Revenue,
675,000 Refunding, Huntington Hospital Mortgage Project, Series A, 5.90%, 11/01/04 ...................... 633,312
935,000 Secured Hospital, Series A, 5.70%, 02/15/04...................................................... 864,183
960,000 Secured Hospital, Series A, 5.70%, 08/15/04...................................................... 884,448
140,000 New York State, Refunding, 7.50%, 11/15/01.......................................................... 153,364
1,900,000 New York State Tollway Authority General Revenue, Series A, 5.80%, 01/01/06 ........................ 1,819,687
125,000 Oneida-Herkimer Solid Waste Management, Solid Waste Authority Systems Revenue,
Refunding, 6.65%, 04/01/05 ........................................................................ 120,239
Puerto Rico Commonwealth Electric Power Authority Revenue,
100,000 Refunding, Series Q, 5.90%, 07/01/01 ............................................................ 99,362
1,500,000 Water Resources, Series T, 6.00%, 05/01/05 ...................................................... 1,466,130
1,000,000 Puerto Rico Commonwealth GO, Improvement, 6.00%, 07/01/05 .......................................... 965,640
Puerto Rico Municipal Finance Agency,
300,000 Series A, 5.875%, 07/01/06....................................................................... 284,757
1,650,000 Series A, FSA Insured, 5.60%, 07/01/05........................................................... 1,597,926

</TABLE>

The accompanying notes are an integral part of these financial statements.

<PAGE>

FACE VALUE
AMOUNT FRANKLIN NEW YORK INTERMEDIATE-TERM TAX-FREE INCOME FUND (NOTE 1)
- - - - -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
BONDS (CONT.)
Suffolk County IDA, Civic Facilities Revenue,
$100,000 Dowling College Facilities, 6.10%, 06/01/03....................................................... $ 96,496
180,000 Dowling College Facilities, 6.20%, 06/01/04....................................................... 173,178
------------
TOTAL BONDS (COST $34,838,373) ................................................................. 34,266,764
------------

(a)SHORT TERM INVESTMENTS 1.2%
400,000 New York City Municipal Water Finance Authority, Water and Sewer System Revenue,
Series C, FGIC Insured, Daily VRDN and Put, 6.00%, 06/15/23 (COST $400,000) ........................ 400,000
------------
TOTAL INVESTMENTS (COST $35,238,373) 98.6%.............................................. 34,666,764
OTHER ASSETS AND LIABILITIES, NET 1.4% .................................................. 499,157
------------
NET ASSETS 100.0%...................................................................... $ 35,165,921
============
At December 31, 1994, the net unrealized depreciation based on the cost of investments
for income tax purposes of $35,238,373 was as follows:
Aggregate gross unrealized appreciation for all investments in which there was an
excess of value over tax cost..................................................................... $ 196,105
Aggregate gross unrealized depreciation for all investments in which there was an
excess of tax cost over value..................................................................... (767,714)
------------
Net unrealized depreciation........................................................................ $ (571,609)
============
</TABLE>

PORTFOLIO ABBREVIATIONS:

AMBAC - American Municipal Bond Assurance Corp.
COP - Certificate of Participation
FGIC - Financial Guaranty Insurance Co.
FSA - Financial Security Assistance
GO - General Obligation
IDA - Industrial Development Authority/Agency

The accompanying notes are an integral part of these financial statements.

<PAGE>

FRANKLIN NEW YORK TAX-FREE TRUST
- - - - --------------------------------------------------------------------------------
FINANCIAL STATEMENTS

STATEMENTS OF ASSETS AND LIABILITIES
DECEMBER 31, 1994

FRANKLIN NEW YORK FRANKLIN NEW YORK FRANKLIN NEW YORK
TAX-EXEMPT INSURED TAX-FREE INTERMEDIATE-TERM
MONEY FUND INCOME FUND TAX-FREE INCOME FUND
----------------- ----------------- --------------------
<S> <C> <C> <C>

Assets:
Investment in securities:
At identified cost ................................... $64,504,904 $234,129,592 $35,238,373
=========== ============ ===========
At value ............................................. 64,504,904 220,776,564 34,666,764
Cash .................................................. 96,811 955,808 44,201
Receivables:
Interest ............................................. 385,763 4,274,956 741,198
Investment securities sold ........................... -- 5,000 --
Capital shares sold .................................. 309,458 176,527 71,242
Unamortized organization costs (Note 2) ............... -- 2,761 --
Prepaid expenses ...................................... -- -- 951
----------- ----------- -----------
Total assets ..................................... 65,296,936 226,191,616 35,524,356
----------- ----------- -----------
Liabilities:
Payables:
Capital shares repurchased ........................... 436,921 693,466 289,179
Distribution fees .................................... -- 29,635 18,688
Dividends to shareholders ............................ 5,770 270,281 50,568
Management fees ...................................... 5,687 104,135 --
Shareholder servicing costs .......................... 6,300 3,500 --
Accrued expenses and other liabilities ................ 7,310 29,655 --
----------- ------------ -----------
Total liabilities ................................ 461,988 1,130,672 358,435
----------- ------------ -----------
Net assets, at value ................................... $64,834,948 $225,060,944 $35,165,921
=========== ============ ===========
Net assets consist of:
Undistributed net investment income ................... -- $ 186,418 $ 127,180
Unrealized depreciation on investments ................ -- (13,353,028) (571,609)
Accumulated net realized loss ......................... -- (2,143,589) (2,811,120)
Capital shares ........................................ 64,834,948 240,371,143 38,421,470
----------- ------------ -----------
Net assets, at value ................................... $64,834,948 $225,060,944 $35,165,921
=========== ============ ===========
Shares outstanding ..................................... 64,834,948 22,156,230 3,661,319
=========== ============ ===========
Net asset value and redemption price per share ......... $1.00 $10.16 $9.60
=========== ============ ===========
Maximum offering price per share (100/100, 100/95.75 and
100/97.75 of net asset value per share, respectively) . $1.00 $10.61 $9.82
=========== ============ ===========

The accompanying notes are an integral part of these financial statements.

</TABLE>

<PAGE>

FRANKLIN NEW YORK TAX-FREE TRUST
- - - - --------------------------------------------------------------------------------
FINANCIAL STATEMENTS (CONT.)

STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1994

FRANKLIN NEW YORK
FRANKLIN NEW YORK FRANKLIN NEW YORK INTERMEDIATE-TERM
TAX-EXEMPT INSURED TAX-FREE TAX-FREE
MONEY FUND INCOME FUND INCOME FUND
----------------- ----------------- -----------------
<S> <C> <C> <C>
Investment income:
Interest (Note 1) ................................. $1,603,841 $ 14,893,456 $ 2,077,690
---------- ------------ -----------
Expenses:
Management fees, net (Note 6) .................... 171,416 992,613 --
Distribution fees (Note 6) ....................... -- 117,222 18,688
Shareholder servicing costs (Note 6) ............. 74,268 41,094 --
Reports to shareholders .......................... 72,548 99,753 --
Registration and filing fees ..................... 16,269 42,792 --
Custodian fees ................................... 6,023 25,339 --
Professional fees ................................ 6,875 24,670 --
Trustees' fees and expenses ...................... 1,500 6,428 --
Insurance ........................................ -- 4,651 --
Amortization of organization costs ( Note 2) ..... -- 2,071 --
Other ............................................ 4,546 36,009 --
---------- ------------ -----------
Total expenses ............................... 353,445 1,392,642 18,688
---------- ------------ -----------
Net investment income ....................... 1,250,396 13,500,814 2,059,002
---------- ------------ -----------
Realized and unrealized loss on investments:
Net realized loss ................................. -- (2,000,409) (2,703,012)
Net unrealized depreciation during the year ....... -- (33,236,184) (1,406,329)
---------- ------------ -----------
Net realized and unrealized loss on investments .... -- (35,236,593) (4,109,341)
---------- ------------ -----------
Net increase (decrease) in net assets resulting from
operations ........................................ $1,250,396 $(21,735,779) $(2,050,339)
========== ============ ===========

</TABLE>

The accompanying notes are an integral part of these financial statements.

<PAGE>

FRANKLIN NEW YORK TAX-FREE TRUST
- - - - --------------------------------------------------------------------------------
FINANCIAL STATEMENTS (CONT.)

STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1994 AND 1993

FRANKLIN NEW YORK
FRANKLIN NEW YORK FRANKLIN NEW YORK INSURED INTERMEDIATE-TERM
TAX-EXEMPT MONEY FUND TAX-FREE INCOME FUND TAX-FREE INCOME FUND
---------------------------- ------------------------------ ----------------------------
1994 1993 1994 1993 1994 1993
------------ ------------ ------------- ------------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net
assets:
Operations:
Net investment income .... $ 1,250,396 $ 860,235 $ 13,500,814 $ 10,952,568 $ 2,059,002 $ 796,668
Net realized loss from
security transactions ... -- -- (2,000,409) (70,510) (2,703,012) (103,619)
Net unrealized appre-
ciation (depreciation)
during the year ......... -- -- (33,236,184) 15,811,373 (1,406,329) 796,984
------------ ------------ ------------- ------------- ------------ ------------
Net increase
(decrease) in net
assets resulting
from operations ...... 1,250,396 860,235 (21,735,779) 26,693,431 (2,050,339) 1,490,033
Distributions to shareholders
from undistributed net
investment income .......... (1,250,396) (860,235) (13,359,615) (10,908,110) (1,950,786) (802,460)
Increase (decrease) in net
assets from capital share
transactions (Note 4) ...... 14,517,973 (3,804,860) (3,490,386) 98,807,790 8,005,349 27,014,821
------------ ------------ ------------- ------------- ------------ ------------
Net increase
(decrease) in net
assets ............... 14,517,973 (3,804,860) (38,585,780) 114,593,111 4,004,224 27,702,394
Net assets:

Beginning of year .......... 50,316,975 54,121,835 263,646,724 149,053,613 31,161,697 3,459,303
------------ ------------ ------------- ------------- ------------ ------------
End of year ................ $ 64,834,948 $ 50,316,975 $ 225,060,944 $ 263,646,724 $ 35,165,921 $ 31,161,697
============ ============ ============= ============= ============ ============

Undistributed net investment
income included in net
assets:
Beginning of year ......... -- -- $ 45,219 $ 761 $ 18,964 $ 24,756
============ ============ ============= ============= ============ ============
End of year ............... -- -- $ 186,418 $ 45,219 $ 127,180 $ 18,964
============ ============ ============= ============= ============ ============

</TABLE>

The accompanying notes are an integral part of these financial statements.

<PAGE>

FRANKLIN NEW YORK TAX-FREE TRUST
NOTES TO FINANCIAL STATEMENTS

1. SIGNIFICANT ACCOUNTING POLICIES

Franklin New York Tax-Free Trust ("the Trust") is a non-diversified, open-end
management investment company (mutual fund), registered under the Investment
Company Act of 1940 as amended. The Trust currently consists of three separate
funds (the Funds): Franklin New York Tax-Exempt Money Fund (the "Money Fund"),
Franklin New York Insured Tax-Free Income Fund (the "Insured Fund"), and
Franklin New York Intermediate-Term Tax-Free Income Fund (the "Intermediate-Term
Fund"). Each of the funds issues a separate series of the Trust's shares and
maintains a totally separate investment portfolio.

The following is a summary of significant accounting policies consistently
followed by the Trust in the preparation of its financial statements. The
policies are in conformity with generally accepted accounting principles for
investment companies.

a. SECURITY VALUATIONS: Tax-free bonds generally trade in the over-the-counter
market rather than on a national securities exchange. Often there are no
transactions in a particular security on any given day. In the absence of a
recorded sale or reported bid and asked prices, information with respect to bond
and note transactions, quotations from bond dealers, market transactions in
comparable securities, and various relationships between securities are used to
determine the value of the security. The Trust may also utilize a pricing
service, bank, or broker/dealer experienced in such matters to perform any of
the pricing functions, under procedures approved by the Board of Trustees.

Short-term investments are valued at amortized cost, which approximates value.
The Money Fund must maintain a dollar weighted average maturity of 90 days or
less and only purchase instruments having remaining maturities of 397 days or
less. If the Money Fund's portfolio has a remaining weighted average maturity of
greater than 90 days, the portfolio will be stated at value based on recorded
closing sales on a national securities exchange or, in the absence of a recorded
sale, within the range of the most recent quoted bid and asked prices. The
Trustees have established procedures designed to stabilize, to the extent
reasonably possible, the Money Fund's price per share as computed for the
purpose of sales and redemptions at $1.00.

b. MUNICIPAL BONDS OR NOTES WITH "PUTS": The Trust has purchased municipal bonds
or notes with the right to resell the bonds or notes to the seller at an agreed
upon price or yield on a specified date or within a specified period (which will
be prior to the maturity date of the bonds or notes). Such a right to resell is
commonly known as a "put". In determining the weighted average maturity of the
Fund's portfolio, municipal bonds and notes as to which the Fund holds a put are
deemed to mature on the first day on which the put may be exercisable.

c. VARIABLE RATE DEMAND NOTES: The Trust has invested in certain variable
interest rate demand notes with maturities greater than 397 days but which are
redeemable at specified intervals upon demand. The maturity of these instruments
for the purposes of calculating the Fund's weighted average maturity is
considered to be the lesser of the period until the interest rate is adjusted or
until the principal can be recovered by demand.

d. INCOME TAXES: The Trust intends to continue to qualify for the tax treatment
applicable to regulated investment companies under the Internal Revenue Code and
to make the requisite distributions to its shareholders which will be sufficient
to relieve it from income and excise taxes. Therefore, no income tax provision
is required. Each Fund is treated as a separate entity in the determination of
compliance with the Internal Revenue Code.

e. SECURITY TRANSACTIONS: Security transactions are accounted for on the date
the securities are purchased or sold (trade date). Realized gains and losses on
security transactions are determined on the basis of specific identification for
both financial statement and income tax purposes.

<PAGE>
FRANKLIN NEW YORK TAX-FREE TRUST
NOTES TO FINANCIAL STATEMENTS (CONT.)

1. SIGNIFICANT ACCOUNTING POLICIES (CONT.)

f. INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS: Distributions to shareholders
are recorded on the ex-dividend date. Interest income and estimated expenses are
accrued daily. Bond discount and premium, if any, are amortized as required by
the Internal Revenue Code. The Funds normally declare dividends from their net
investment income daily and distribute monthly. Daily allocations of net
investment income will commence on the date of receipt of an investor's funds.
Dividends are normally declared each day the New York Stock Exchange is open for
business equal to an amount per day set from time to time by the Board of
Trustees, and are payable to shareholders of record at the beginning of business
on the ex-date. Once each month, dividends are reinvested in additional shares
of the Funds, or paid in cash as requested by the shareholders.

For the Money Fund, net investment income includes income, calculated on an
accrual basis, amortization of original issue and market discount or premium (if
any), and expenses as incurred on an accrual basis. The total available for
dividends is computed daily and includes the net investment income, plus or
minus any gains or losses on security transactions and changes in unrealized
portfolio appreciation or depreciation, (if any).

g. INSURANCE: Each long-term municipal security in the Insured Fund is insured
as to the scheduled payments of interest and principal by either a mutual fund
Portfolio Insurance Policy, a Secondary Market Insurance Policy, a New Issue
Insurance Policy or collateral guaranteed by an agency of the U.S. government.
The providers of secondary market and new issue insurance are rated "AAA" by
Standard & Poor's.

Premiums for a mutual fund Portfolio Insurance Policy or a Secondary Market
Insurance Policy are paid from the Insured Fund's assets. Premiums for a mutual
fund Portfolio Insurance Policy (effective only so long as the Insured Fund is
in existence, Financial Guaranty (the insurer) remains in business and the
municipal security insured under the policy continues to be held by the Insured
Fund) will reduce the current income on the portfolio by the amount thereof.
Premiums paid by the Insured Fund for a Secondary Market Insurance Policy
(effective so long as the security so insured is outstanding and the insurer
remains in business) are added to the cost basis of the municipal security
insured and are not considered an expense of the Insured Fund. Premiums for a
New Issue Insurance Policy (effective so long as the security so insured is
outstanding and the insurer remains in business) are paid in advance by the
insured security issuer or by another third party prior to acquisition of the
security by the Insured Fund and are not considered an expense of the Insured
Fund.

h. EXPENSE ALLOCATION: Common expenses incurred by the Trust are allocated among
the Funds based on the ratio of net assets of each Fund to the combined net
assets. In all other respects, expenses are charged to each Fund as incurred on
a specific identification basis.

2. UNAMORTIZED ORGANIZATION COSTS

The organization costs of the Insured Fund are amortized on a straight-line
basis over a period of five years from May 1, 1991 (the effective date of
registration under the Securities Act of 1933). In the event Franklin Resources,
Inc. (which was the sole shareholder prior to May 1, 1991) redeems its shares
within the five-year period, the pro-rata share of the then-unamortized deferred
organization costs will be deducted from the redemption price paid to Franklin
Resources, Inc. New investors purchasing shares of the Insured Fund subsequent
to that date bear such costs during the amortization period only as such charges
are accrued daily against investment income.

<PAGE>
FRANKLIN NEW YORK TAX-FREE TRUST
NOTES TO FINANCIAL STATEMENTS (CONT.)

3. DISTRIBUTIONS AND CAPITAL LOSS CARRYOVERS
At December 31, 1994, for tax purposes, the Trust had capital loss carryovers as
follows:
<TABLE>
<CAPTION>

FRANKLIN NEW YORK FRANKLIN NEW YORK
INSURED TAX-FREE INTERMEDIATE-TERM
INCOME FUND TAX-FREE INCOME FUND
----------------- --------------------

Capital loss carryovers expiring in:
<S> <C> <C>
1999 .............................. $ 5,995 $ --
2000 .............................. 64,646 4,489
2001 .............................. 70,510 103,619
2002 .............................. 2,001,159 2,703,012
---------- ----------
$2,142,310 $2,811,120
========== ==========

</TABLE>

For income tax purposes, the aggregate cost of securities is higher (and
unrealized depreciation is higher) than for financial reporting purposes at
December 31, 1994 by $1,279 in the Insured Fund.

4. TRUST SHARES

At December 31, 1994, there were an unlimited number of no par value shares of
beneficial interest authorized. Transactions in each of the Funds' shares for
the years ended December 31, 1994 and 1993 were as follows:

FRANKLIN NEW YORK
FRANKLIN NEW YORK FRANKLIN NEW YORK INSURED INTERMEDIATE-TERM
TAX-EXEMPT MONEY FUND TAX-FREE INCOME FUND TAX-FREE INCOME FUND
-------------------------- ----------------------------- --------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
------------ ------------ ----------- -------------- --------- ------------
<S> <C> <C> <C> <C> <C> <C>
1994
Shares sold ................. 38,939,892 $ 38,939,892 3,127,880 $ 34,361,316 1,267,735 $ 13,094,484
Shares issued in reinvestment
of distributions ........... 1,251,287 1,251,287 647,592 6,924,569 116,416 1,170,687
Shares redeemed ............. (45,837,955) (45,837,955) (3,750,439) (39,940,981) (778,367) (7,709,591)
Changes from exercise of
exchange privilege:
Shares sold ............... 41,909,526 41,909,526 884,949 9,428,345 792,323 8,057,615
Shares redeemed ........... (21,744,777) (21,744,777) (1,325,530) (14,263,635) (653,877) (6,607,846)
----------- ------------ ---------- ------------- --------- ------------
Net increase (decrease) . 14,517,973 $ 14,517,973 (415,548) $ (3,490,386) 744,230 $ 8,005,349
=========== ============ ========== ============= ========= ============
1993
Shares sold ................. 31,686,602 $ 31,686,602 9,310,382 $ 104,892,410 2,435,065 $ 25,498,196
Shares issued in reinvestment
of distributions ........... 851,209 851,209 411,491 4,657,586 46,169 485,841
Shares redeemed ............. (40,671,919) (40,671,919) (1,191,829) (13,509,248) (180,531) (1,890,152)
Changes from exercise of
exchange privilege:
Shares sold ............... 10,440,098 10,440,098 914,557 10,401,562 409,483 4,310,057
Shares redeemed ........... (6,110,850) (6,110,850) (675,619) (7,634,520) (131,804) (1,389,121)
---------- ------------ ---------- ------------- --------- ------------
Net increase (decrease) . (3,804,860) $ (3,804,860) 8,768,982 $ 98,807,790 2,578,382 $ 27,014,821
========== ============ ========== ============= ========= ============

</TABLE>
31

<PAGE>
FRANKLIN NEW YORK TAX-FREE TRUST
NOTES TO FINANCIAL STATEMENTS (CONT.)

5. PURCHASES AND SALES OF SECURITIES

Aggregate purchases and sales of securities (excluding purchases and sales of
short-term securities) for the year ended December 31, 1994 were as follows:

<TABLE>
<CAPTION>
FRANKLIN NEW YORK FRANKLIN NEW YORK
FRANKLIN NEW YORK INSURED TAX-FREE INTERMEDIATE-TERM
TAX-EXEMPT MONEY FUND INCOME FUND TAX-FREE INCOME FUND
--------------------- ----------------- --------------------
<S> <C> <C> <C>
Purchases............... -- $62,422,145 $77,092,143
===================== ================= ====================
Sales................... -- $66,767,366 $69,220,931
===================== ================= ====================
</TABLE>

6. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES

Franklin Advisers, Inc., under the terms of an agreement, provides investment
advice, administrative services, office space and facilities to each Fund, and
receives fees computed monthly on the net assets of the Insured Fund and the
Intermediate-Term Fund at the last day of the month and computed daily on the
net assets of the Money Fund as follows:

<TABLE>
<CAPTION>
ANNUALIZED FEE RATE NET ASSETS
------------------- ---------------------------------------------------
<S> <C>
.625 of 1% First $100 million
.500 of 1% over $100 million, up to and including $250 million
.450 of 1% over $250 million
</TABLE>

The terms of the management agreement provide that aggregate annual expenses of
the Funds be limited to the extent necessary to comply with the limitations set
forth in the laws, regulations and administrative interpretations of the states
in which the Funds' shares are registered. The Funds' expenses did not exceed
these limitations; however, for the year ended December 31, 1994, Franklin
Advisers, Inc. agreed in advance to waive a portion or all of the management
fees for the Money Fund, the Insured Fund, and the Intermediate-Term Fund of
$197,607, $356,644, and $234,273, respectively. In addition, Franklin Advisers,
Inc. made payments of $41,814 for other expenses for the Intermediate-Term Fund
which are not shown on the Statement of Operations.

In its capacity as underwriter for the shares of the Funds, Franklin/Templeton
Distributors, Inc. received commissions on sales of the Funds' shares.
Commissions received by Franklin/Templeton Distributors, Inc. and the amounts
which were subsequently paid to other dealers for the year ended December 31,
1994 were as follows:

<TABLE>
<CAPTION>
FRANKLIN NEW YORK FRANKLIN NEW YORK
INSURED TAX-FREE INTERMEDIATE-TERM
INCOME FUND TAX-FREE INCOME FUND
----------------- --------------------
<S> <C> <C>
Total commissions received................. $1,248,174 $206,123
========== ========
Paid to other dealers...................... $1,191,416 $180,608
========== ========
</TABLE>

Commissions are deducted from the gross proceeds received from the sale of the
Trust's shares, and as such are not expenses of the Funds.

Under the terms of a shareholder services agreement with Franklin/Templeton
Investor Services, Inc., the Trust pays costs on a per shareholder account
basis. Shareholder servicing costs incurred for the year ended December 31, 1994
aggregated $121,531, of which $111,641 was paid to Franklin/Templeton Investor
Services, Inc. and $6,169 was waived under advance agreement by
Franklin/Templeton Investor Services, Inc.

<PAGE>
FRANKLIN NEW YORK TAX-FREE TRUST
NOTES TO FINANCIAL STATEMENTS (CONT.)

Under the terms of a Distribution Agreement pursuant to Rule 12b-1 of the
Investment Company Act of 1940, the Insured Fund and the Intermediate-Term Fund
will reimburse Franklin/Templeton Distributors, Inc., in an amount up to 0.10%
per annum of each Fund's average daily net assets for costs incurred in the
promotion, offering and marketing of the Fund's shares. Fees incurred by the
Insured Fund and the Intermediate-Term Fund under the agreement totaled $117,222
and $18,688, respectively for the year ended December 31, 1994. The Insured Fund
implemented the plan of distribution on May 1, 1994.

Certain officers and trustees of the Trust are also officers and/or directors of
Franklin/Templeton Distributors, Inc., Franklin Advisers, Inc., and
Franklin/Templeton Investor Services, Inc., all wholly-owned subsidiaries of
Franklin Resources, Inc.

7. CREDIT RISKS

Although each of the Funds has a diversified investment portfolio, all of their
investments are in the securities of issuers in the state of New York, Guam and
Puerto Rico, which may subject the Funds to economic and fiscal changes
occurring within those areas.

8. FINANCIAL HIGHLIGHTS

Selected data for each share outstanding throughout each year, by Fund, are as
follows:

<TABLE>
<CAPTION>
PER SHARE OPERATING PERFORMANCE
- - - - ---------------------------------------------------------------------------------------------
NET ASSET NET REALIZED TOTAL DISTRIBUTIONS
YEAR VALUE NET & UNREALIZED FROM FROM NET NET ASSET
ENDED BEGINNING INVESTMENT GAIN (LOSS) INVESTMENT INVESTMENT VALUE AT
DEC. 31 OF YEAR INCOME ON SECURITIES OPERATIONS INCOME END OF YEAR
- - - - ---------------------------------------------------------------------------------------------
FRANKLIN NEW YORK TAX-EXEMPT MONEY FUND:
<S> <C> <C> <C> <C> <C> <C>
1990 $ 1.00 $.050 -- $ .050 $ (.050) $ 1.00
1991 1.00 .036 -- .036 (.036) 1.00
1992 1.00 .021 -- .021 (.021) 1.00
1993 1.00 .017 -- .017 (.017) 1.00
1994 1.00 .021 -- .021 (.021) 1.00
<CAPTION>
FRANKLIN NEW YORK INSURED TAX-FREE INCOME FUND:
<S> <C> <C> <C> <C> <C> <C>
1991(1) 10.00 .247 .433 .680 (.220) 10.46
1992 10.46 .620 .369 .989 (.649) 10.80
1993 10.80 .600 .880 1.480 (.600) 11.68
1994 11.68 .590 (1.525) (.935) (.585) 10.16
<CAPTION>
FRANKLIN NEW YORK INTERMEDIATE-TERM TAX-FREE INCOME FUND:
<S> <C> <C> <C> <C> <C> <C>
1992(2) 10.00 .090 .135 .225 (.015) 10.21
1993 10.21 .480 .536 1.016 (.546) 10.68
1994 10.68 .550 (1.104) (.554) (.526) 9.60
</TABLE>

<TABLE>
<CAPTION>
RATIOS/SUPPLEMENTAL DATA
--------------------------------------------------
RATIO OF NET
NET ASSETS RATIO OF INVESTMENT
YEAR AT END EXPENSES INCOME PORTFOLIO
ENDED TOTAL OF YEAR TO AVERAGE TO AVERAGE TURNOVER
DEC. 31 RETURN++ (IN 000'S) NET ASSETS+ NET ASSETS RATE
- - - - ------------------------------------------------------------------------
FRANKLIN NEW YORK TAX-EXEMPT MONEY FUND:
<S> <C> <C> <C> <C> <C>
1990 5.13% $ 92,277 .59% 5.02% --%
1991 3.63 70,503 .69 3.52 --
1992 2.10 54,122 .65 2.12 --
1993 1.67 50,317 .63 1.68 --
1994 2.11 64,835 .60 2.12 --
<CAPTION>
FRANKLIN NEW YORK INSURED TAX-FREE INCOME FUND:
<S> <C> <C> <C> <C> <C>
1991(1) 6.75 37,904 .12* 5.69* 21.12
1992 9.49 149,054 .33 5.80 3.39
1993 13.79 263,647 .50 5.28 5.38
1994 (8.19) 225,061 .56 5.48 25.66
<CAPTION>
FRANKLIN NEW YORK INTERMEDIATE-TERM TAX-FREE INCOME FUND:
<S> <C> <C> <C> <C> <C>
1992(2) 2.25 3,459 -- 4.41* 20.80
1993 10.18 31,162 -- 4.96 30.95
1994 (5.42) 35,166 .05 5.57 188.38
</TABLE>

*Annualized

(1)For the period May 1, 1991 (effective date of registration) to December 31,
1991.

(2)For the period September 21, 1992 (effective date of registration) to
December 31, 1992.

++Total return measures the change in value of an investment over the periods
indicated. It does not include the maximum initial sales charge, and assumes
reinvestment of dividends and capital gains, if any, at net asset value for the
Intermediate-Term Fund and the Money Fund, and assumes reinvestment of dividends
at the offering price and capital gains, if any, at net asset value for the
Insured fund. Effective May 1, 1994, with the implementation of the Rule 12b-1
distribution plan as discussed in Note 6, the existing sales charge on
reinvested income dividends has been eliminated for the Insured Fund.

+During the periods indicated below, Franklin Advisers, Inc., the investment
manager, agreed to waive in advance a portion of its management fees and made
payments of other expenses incurred by the Funds. Had such action not been
taken, the ratio of operating expenses to average net assets would have been as
follows:

<PAGE>
FRANKLIN NEW YORK TAX-FREE TRUST
NOTES TO FINANCIAL STATEMENTS (CONT.)

RATIO OF EXPENSES TO
AVERAGE NET ASSETS
--------------------

FRANKLIN NEW YORK TAX-EXEMPT
MONEY FUND:
1990................................ .79%
1991................................ .84
1992................................ .89
1993................................ .97
1994................................ .93

FRANKLIN NEW YORK INSURED TAX-FREE
INCOME FUND:

1991(1)............................. .84%*
1992................................ .74
1993................................ .65
1994................................ .71

FRANKLIN NEW YORK INTERMEDIATE-TERM
TAX-FREE INCOME FUND:

1992(2)............................. 1.76*
1993................................ .73
1994................................ .80

During this fiscal year, each Fund paid distributions from undistributed net
investment income in the amounts shown in the Statement of Changes in Net
Assets. Each Fund hereby designates the total amount of these distributions as
exempt-interest dividends under Section 852(b)(5) of the Internal Revenue Code.

<PAGE>
FRANKLIN NEW YORK TAX-FREE TRUST
REPORT OF INDEPENDENT AUDITORS

To the Shareholders and Board of Trustees
of Franklin New York Tax-Free Trust:

We have audited the accompanying statements of assets and liabilities of the
various funds comprising Franklin New York Tax-Free Trust, including each Fund's
statement of investments in securities and net assets, as of December 31, 1994,
and the related statements of operations for the year then ended, the statements
of changes in net assets for each of the two years in the period then ended, and
the financial highlights for the periods indicated in Note 8. These financial
statements and financial highlights are the responsibility of the Trusts'
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
December 31, 1994, by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
various funds comprising Franklin New York Tax-Free Trust as of December 31,
1994, the results of their operations for the year then ended, the changes in
their net assets for each of the two years in the period then ended, and the
financial highlights for the periods indicated in Note 8 in conformity with
generally accepted accounting principles.

COOPERS & LYBRAND L.L.P.

San Francisco, California
February 1, 1995

<PAGE>

APPENDIX
DESCRIPTION OF GRAPHIC MATERIAL OMITTED FROM EDGAR FILING
(PURSUANT TO ITEM 304 (a) of REGULATION S-T)

GRAPHIC MATERIAL (1)

This bar chart shows the comparison between the
fund's seven-day annualized yield of 4.01% and the
taxable equivalent annualized rate of 7.55%.

GRAPHIC MATERIAL (2)

This chart shows in pie chart format the fund's
securities breakdown by sector as a percentage of
the fund's total net assets.
<TABLE>
<CAPTION>
Portfolio Breakdown on 12/31/94
<S> <C>
Housing 1.0%
Other Revenue 2.6%
Health Care 3.3%
Industrial 3.8%
Pre-refunded Bonds 5.2%
Hospitals 7.1%
Utilities 25.6%
General Obligations Bonds 15.6%
Transportation 16.3%
Education 19.5%
</TABLE>

GRAPHIC MATERIAL (3)

This bar chart shows the comparison between the
fund's distribution rate of 5.54% and the taxable
equivalent rate of 10.43%.

GRAPHIC MATERIAL (4)

The following line graph hypothetically compares
the performance of the Franklin New York Insured
Tax-Free Income Fund to that of the Lehman Brothers
Municipal Bond Index and the Consumer Price Index
(CPI), based on a $10,000 investment from 5/1/91 to
12/31/94.
<TABLE>
<CAPTION>
Period Ending NY Insured TF Inc.CPI LB Muni. Index
<S> <C> <C> <C>
05/01/91 $9,579 $10,000 $10,000
05/31/91 $9,588 $10,030 $10,089
06/30/91 $9,559 $10,059 $10,079
07/31/91 $9,722 $10,074 $10,202
08/31/91 $9,866 $10,104 $10,336
09/30/91 $9,976 $10,148 $10,471
10/31/91 $10,058 $10,192 $10,594
12/31/91 $10,234 $10,200 $10,822
01/31/92 $10,307 $10,214 $10,846
02/29/92 $10,322 $10,251 $10,850
03/31/92 $10,348 $10,303 $10,854
04/30/92 $10,439 $10,318 $10,950
05/31/92 $10,591 $10,333 $11,079
06/30/92 $10,744 $10,370 $11,265
07/31/92 $11,149 $10,392 $11,603
08/31/92 $10,969 $10,422 $11,490
09/30/92 $10,981 $10,451 $11,565
10/31/92 $10,768 $10,488 $11,451
11/30/92 $11,058 $10,503 $11,656
12/31/92 $11,216 $10,496 $11,775
01/31/93 $11,363 $10,547 $11,912
02/28/93 $11,699 $10,584 $12,343
03/31/93 $11,701 $10,621 $12,212
04/30/93 $11,787 $10,651 $12,335
05/31/93 $11,829 $10,666 $12,405
06/30/93 $12,030 $10,680 $12,612
07/31/93 $12,061 $10,680 $12,628
08/31/93 $12,285 $10,710 $12,891
09/30/93 $12,532 $10,732 $13,038
10/31/93 $12,584 $10,777 $13,062
11/30/93 $12,496 $10,784 $12,948
12/31/93 $12,790 $10,784 $13,221
01/31/94 $12,921 $10,813 $13,371
02/28/94 $12,534 $10,850 $13,025
03/31/94 $11,913 $10,887 $12,495
04/30/94 $12,012 $10,902 $12,601
05/31/94 $12,156 $10,910 $12,711
06/30/94 $12,008 $10,947 $12,633
07/31/94 $12,255 $10,976 $12,864
08/31/94 $12,265 $11,020 $12,910
09/30/94 $12,037 $11,050 $12,720
10/31/94 $11,738 $11,058 $12,493
11/30/94 $11,383 $11,073 $12,267
12/31/94 $11,750 $11,073 $12,537
</TABLE>

GRAPHIC MATERIAL (5)

This chart shows in pie chart format the fund's
securities breakdown by sector as a percentage of
the fund's total net assets.
<TABLE>
<CAPTION>
Portfolio Breakdown on 12/31/94
<S> <C>
Industrial 1.6%
Education 6.0%
Transportation 10.4%
General Obligations 33.0%
Hospitals 10.6%
Utilities 10.6%
Certificates of Participation 12.2%
Other Revenue 15.6%
</TABLE>

GRAPHIC MATERIAL (6)

This bar chart shows the comparison between the fund's
distribution rate of 5.38% and the taxable equivalent
rate of 10.13%.

GRAPHIC MATERIAL (7)

The following line graph hypothetically compares the
performance of Franklin Intermediate-Term Tax-Free
Income Fund to that of the Lehman Brothers 10-Year
Municipal Bond Index and the Consumer Price Index
(CPI), based on a $10,000 investment from 10/1/92
to 12/31/94.
<TABLE>
<CAPTION>
Period Ending NY Inter. TF Inc. CPI LB 10Yr Muni. Index
<S> <C> <C> <C>
10/1/92 $9,775 $10,000 $10,000
10/31/92 $9,756 $10,035 $9,898
11/30/92 $9,883 $10,050 $10,079
12/31/92 $9,971 $10,042 $10,196
01/31/93 $10,045 $10,092 $10,368
02/28/93 $10,306 $10,127 $10,748
03/31/93 $10,302 $10,163 $10,591
04/30/93 $10,367 $10,191 $10,692
05/31/93 $10,403 $10,205 $10,729
06/30/93 $10,479 $10,219 $10,940
07/31/93 $10,495 $10,219 $10,968
08/31/93 $10,673 $10,248 $11,195
09/30/93 $10,790 $10,269 $11,332
10/31/93 $10,834 $10,311 $11,351
11/30/93 $10,685 $10,318 $11,257
12/31/93 $10,986 $10,318 $11,497
01/31/94 $11,125 $10,346 $11,639
02/28/94 $10,891 $10,382 $11,320
03/31/94 $10,448 $10,417 $10,887
04/30/94 $10,546 $10,431 $11,007
05/31/94 $10,655 $10,439 $11,095
06/30/94 $10,637 $10,474 $11,047
07/31/94 $10,811 $10,503 $11,233
08/31/94 $10,847 $10,545 $11,277
09/30/94 $10,649 $10,573 $11,125
10/31/94 $10,417 $10,580 $10,962
11/30/94 $10,217 $10,595 $10,755
12/31/94 $10,405 $10,595 $10,949
</TABLE>