FRANKLIN NEW YORK TAX FREE TRUST, N-30D, 1996-08-28

FRANKLIN NEW YORK TAX FREE TRUST
N-30D, 1996-08-28

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MESSAGE FROM THE CHAIRMAN

Table of Contents
Page

Message from the Chairman 1

Fund Reports
Franklin New York Tax-Exempt
Money Fund 3

Franklin New York Insured
Tax-Free Income Fund 5

Franklin New York Intermediate-Term
Tax-Free Income Fund 11

Statement of Investments 15

Financial Statements 27

Notes to Financial Statements 30

August 15, 1996

Dear Shareholder:

It's a pleasure to bring you the Franklin New York Tax-Free Trust's semi-annual
report for the period ended June 30, 1996.

The economy was weak throughout most of 1995, and continued to lose momentum in
early 1996. In mid-February 1996, however, interest rates began to rise in
response to evidence of renewed economic strength. Uncertainty and confusion
followed a much stronger-than-expected employment report released in early
March. While well-known economists disagreed on the market's direction,
investors reacted to their mixed messages. Nervous investors, fearing inflation
might accelerate, caused a 3% decline in bond prices and a short-lived 120-point
drop in the Dow Jones Industrial Average(R) on March 8, 1996. Later reports
showed that the economy had actually grown slowly in the first quarter of 1996,
at an annualized rate of approximately 2.2%, with inflation coming in at the 2%
level. Economic growth accelerated slightly in the second quarter of 1996, with
annualized Gross Domestic Product (GDP) rising to approximately 4.2% -- which is
above the comfort level of the Federal Reserve Board.

We expect that the funds in the Franklin New York Tax-Free Trust should perform
well if the economy maintains its relatively slow growth pattern. Although the
economy appears stable at the moment, market uncertainties persist.

This uncertainty prompts us to continue to encourage individual investors to
maintain a long-term perspective. It is prudent to periodically consult with
your investment representative to make sure your investments match these goals.

This long-term orientation will help minimize undue concern caused by short-term
market volatility.

As a Franklin fund shareholder, you receive the benefits of diversification,
professional management, and dedicated service. Should you have any questions
concerning the funds in the Franklin New York Tax-Free Trust, we would certainly
welcome the opportunity to answer them.

We appreciate your support and look forward to serving your investment needs in
the years ahead.

Sincerely,

Charles B. Johnson
Chairman
Franklin New York Tax-Free Trust

FRANKLIN NEW YORK TAX-EXEMPT MONEY FUND

Your Fund's Objective:
Seeks to provide shareholders with a high level of current income exempt from
regular federal, New York state and New York City personal income taxes, along
with preservation of capital and liquidity, by investing in a portfolio of
short-term municipal debt securities issued in New York. The fund is managed to
maintain a $1.00 share price.*

*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.

During the six-month reporting period, short-term interest rates stayed within a
fairly narrow range, with the one-year Treasury bill yielding between 5.18% and
5.70% between December 1995 and June 1996. Economists are now looking at a
strengthening economy. Gross Domestic Product, which grew at an annualized rate
of only 0.5% in the fourth quarter of 1995, has accelerated and is estimated to
grow between 3.5% to 4% for the second quarter of 1996.

We moved the portfolio to a neutral position during the reporting period. By
June 30, 1996, the fund's average maturity was relatively short at 30 days, up
slightly from 37 days on December 31, 1995. By keeping the maturity short, we
were able to reinvest in securities offering higher rates, thereby increasing
the fund's yield. Additionally, we wanted to maintain the fund's liquidity due
to the somewhat volatile New York municipal market.

GRAPHIC MATERIAL 1 OMITTED - SEE APPENDIX AT END OF DOCUMENT

On June 30, 1996, the fund's seven-day effective yield, which assumes the
compounding of daily dividends, was 2.75%, and the fund's seven-day annualized
yield was 2.71%. This tax-free rate is generally higher than the after-tax
return on a comparable taxable investment. For example, an investor in the
maximum combined federal, New York state and New York City personal income tax
bracket of 46.6% would need to earn 5.07% from a taxable investment to match the
fund's tax-free yield. Likewise, an investor in the maximum combined federal and
New York state personal income tax bracket of 43.9% would need to earn 4.83%
from a taxable investment to match the fund's tax-free yield.

Liquidity and quality of investments drive our management approach. In keeping
with this, we purchased only the highest-quality securities available to money
market portfolios during the reporting period. We will continue to manage the
fund with an emphasis on high quality securities and liquidity, as we anticipate
relatively slow economic growth and subdued inflation.

Franklin New York Tax-Exempt Money Fund

Periods ended 6/30/96

Seven-day effective yield1 2.75%

Seven-day annualized yield 2.71%

Taxable equivalent yield2 5.07%

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

2. Taxable equivalent yield assumes the 1996 maximum combined federal, New York
state and New York City personal income tax bracket of 46.6%, based on the
federal income tax rate of 39.6%.

Annualized and effective yields are for the seven days ended June 30, 1996.
Yields reflect fluctuations in interest rates on portfolio investments, as well
as 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 is not predictive of
future results.

The fund's manager agreed in advance to waive a portion of the management fees,
which reduces operating expenses and increases yield to shareholders. Without
these reductions, the fund's annualized and effective yields for the period
would have been 2.46% and 2.49%, respectively. The fee waiver may be
discontinued at any time upon notice to the fund's Board of Trustees.

FRANKLIN NEW YORK INSURED TAX-FREE INCOME FUND

Your Fund's Objective:
Seeks to provide shareholders with a high level of current income exempt from
regular federal, New York state and New York City personal income taxes, and
preservation of capital, consistent with prudent investment management. The fund
invests primarily in a portfolio of insured New York municipal securities.*

*For investors subject to the federal alternative minimum tax, a small portion
of this income may be subject to such tax. Distributions of capital gains and of
ordinary income from accrued market discount, if any, are generally taxable.

Bond markets rallied through most of 1995, but declined somewhat in February and
March 1996 amid signs of economic growth. The stock market, however, continued
to attract significant amounts of money. Though this was a disappointment for
bonds and bond funds, it helped keep demand for fixed-income securities in line
with supply. At times bond yields fluctuated dramatically, often caused by
investors who over-reacted to anticipated actions by the Federal Reserve Board.
As soon as the market realized that these fluctuations resulted from imagined
concerns rather than real, the market settled back to a level that was a fair
value to buyers and sellers alike.

Over this reporting period, the market for New York municipal bonds has been on
a bit of a bumpy road. New York's municipal bond prices fluctuated as the New
York market reacted to the changes in interest rates at the national level.
These rates were noticeably impacted by the Fed's actions.

Nearly half of the bonds that came to market during the past twelve months were
insured by one of the four major municipal insurance companies. We feel that
increased competition within the insurance industry, rather than critic
concerns, has played a significant role in the increase of insured bonds
available for purchase. Because of the availability of insured, high-quality
bonds, we were able to concentrate more on managing the portfolios than
searching for suitable investments.

Throughout this reporting period, we reduced the amount of pre-refunded bonds
that were issued during the low interest-rate period of 1992 and 1993. As
indicated by the table to the right, pre-refunded bonds represented only 3.3% of
the portfolio's total long-term investments on June 30, 1996, compared to 4.9%
six months earlier. We used the proceeds of our pre-refund sales to purchase
bonds with higher current yields than were available earlier in the year. This
pro-active move should help bolster the fund's income and support our efforts to
maintain the dividend paid to our shareholders.

As we've stated before, we're not in the business of predicting what the market
will do tomorrow -- that's an inexact science. It's especially difficult to
predict what would cause the market to break out of its current trading range.
The obvious force would be inflation or the possibility of a dramatic shift of
investment preference from the stock market to fixed-income securities.

Franklin New York Insured
Tax-Free Income Fund
Portfolio Breakdown on 6/30/96
Based on Total Long-Term Investments

% of Total
Long-Term
Sector Investments

Utilities 35.7%

Education 17.0%

Transportation 16.1%

Hospitals 11.6%

General Obligations 8.3%

Health Care 4.5%

Pre-Refunded 3.3%

Other Revenue 1.9%

Industrial 1.2%

Certificates of Participation 0.4%

For a complete list of portfolio holdings, please see
page 18 of this report.

Performance Summary

Class I
The Franklin New York Insured Tax-Free Income Fund's Class I share price, as
measured by net asset value, declined 35 cents from $11.41 on December 31, 1995,
to $11.06 on June 30, 1996.

At the end of this reporting period, the distribution rate of Class I shares was
5.09%, based on an annualization of the current monthly dividend of 4.9 cents
($0.049) per share and the maximum offering price of $11.55 on June 30, 1996.
This tax-free rate is generally higher than the after-tax return on a comparable
taxable investment. For example, an investor in the maximum combined federal,
New York state and New York City personal income tax bracket of 46.6% would need
to earn 9.53% from a taxable investment to match the fund's tax-free
distribution rate. Likewise, an investor in the maximum combined federal and New
York state personal income tax bracket of 43.9% would need to earn 9.07% from a
taxable investment to match the fund's tax-free distribution rate.

Franklin New York Insured
Tax-Free Income Fund
Class I
Dividend Distributions 1/01/96 - 6/30/96+
Dividend
Month per Share

January 4.9 cents

February 4.9 cents

March 4.9 cents

April 4.9 cents

May 4.9 cents

June 4.9 cents

Total 29.4 cents

+Assumes shares were purchased and held for the entire accrual period. Since
dividends accrue daily, your actual distributions will vary depending on the day
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.

GRAPHIC MATERIAL 2 OMITTED - SEE APPENDIX AT END OF DOCUMENT

Franklin New York Insured Tax-Free Income Fund

Class I
Periods ended 6/30/96

Since
Inception
1-Year 5-Year (5/1/91)
Cumulative Total Return1 6.15% 44.91% 44.62%
Average Annual Total Return2 1.62% 6.78% 6.50%

Distribution Rate3 5.09%
Taxable Equivalent Distribution Rate4 9.53%
30-Day Standardized Yield5 4.84%
Taxable Equivalent Yield4 9.06%

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. See Note below.

2. Average annual total return represents the average annual change in value of
an investment over the periods indicated and includes the maximum 4.25% initial
sales charge. See Note below.

3. Based on an annualization of the current 4.9 cent per share monthly dividend
and the maximum offering price of $11.55 on June 30, 1996.

4. Taxable equivalent distribution rate and yield assume the 1996 maximum
combined federal, New York state and New York City personal income tax rate of
46.6%, based on the federal income tax rate of 39.6%.

5. Yield, calculated as required by the SEC, is based on the earnings of the
fund's portfolio for the 30 days ended June 30, 1996.

Note: Prior to July 1, 1994, fund shares were offered at a lower initial sales
charge with dividends reinvested at the 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 eliminated the sales
charge on reinvested dividends and implemented a plan of distribution under Rule
12b-1, which affects subsequent performance. All total return calculations
assume reinvestment of dividends and capital gains at net asset value, and 12b-1
fees from the date of the plan's implementation. Your 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.

The fund's manager agreed in advance to waive a portion of its management
expenses, which reduces operating expenses and increases yield, distribution
rate and total return to shareholders. Without these reductions, the fund's
distribution rate would have been lower, and yield for the period would have
been 4.79%. The fee waiver may be discontinued at any time upon notification to
the fund's Board of Trustees.

Class II

The Franklin New York Insured Tax-Free Income Fund's Class II share price, as
measured by net asset value, declined 34 cents from $11.46 on December 31, 1995,
to $11.12 on June 30, 1996.

At the end of this reporting period, the distribution rate of Class II shares
was 4.66%, based on an annualization of the current monthly dividend of 4.36
cents ($0.0436) per share and the offering price of $11.23 on June 30, 1996.
This tax-free rate is generally higher than the after-tax return on a comparable
taxable investment. For example, an investor in the maximum combined federal,
New York state and New York City personal income tax bracket of 46.6% would need
to earn 8.73% from a taxable investment to match the fund's tax-free
distribution rate. Likewise, an investor in the maximum combined federal and New
York state personal income tax bracket of 43.9% would need to earn 8.31% from a
taxable investment to match the fund's tax-free distribution rate.

Franklin New York Insured
Tax-Free Income Fund
Class II
Dividend Distributions 1/01/96 - 6/30/96+
Dividend
Month per Share

January 4.30 cents

February 4.35 cents

March 4.35 cents

April 4.36 cents

May 4.36 cents

June 4.36 cents

Total 26.08 cents

GRAPHIC MATERIAL 3 OMITTED - SEE APPENDIX AT END OF DOCUMENT

Franklin New York Insured Tax-Free Income Fund

Class II
Periods ended 6/30/96

Since
Inception
1-Year (5/1/95)
Cumulative Total Return1 5.75% 8.08%
Average Annual Total Return2 3.72% 5.11%

Distribution Rate3 4.66%
Taxable Equivalent Distribution Rate4 8.73%
30-Day Standardized Yield5 4.45%
Taxable Equivalent Yield4 8.33%

1. Cumulative total return measures the change in value of an investment over
the period indicated and does not include the 1.0% initial sales charge and 1.0%
contingent deferred sales charge (CDSC), applicable to shares redeemed within
the first 18 months of investment.

2. Average annual total return represents the average annual change in value of
an investment over the period indicated and includes the 1.0% initial sales
charge and 1.0% CDSC, applicable to shares redeemed within the first 18 months
of investment.

3. Based on an annualization of the 4.36 cent per share monthly dividend and the
offering price of $11.23 on June 30, 1996.

5. Yield, calculated as required by the SEC, is based on the earnings of the
fund's portfolio for the 30 days ended June 30, 1996.

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.

The fund's manager agreed in advance to waive a portion of its management
expenses, which reduces operating expenses and increases yield, distribution
rate and total return to shareholders. Without these reductions, the fund's
distribution rate would have been lower, and yield for the period would have
been 4.39%. The fee waiver may be discontinued at any time upon notification to
the fund's Board of Trustees.

FRANKLIN NEW YORK INTERMEDIATE-TERM TAX-FREE INCOME FUND

Your Fund's Objective:

Seeks to provide shareholders with a high level of current income exempt from
regular federal, New York state and New York City personal income taxes, along
with preservation of capital. The fund invests primarily in a portfolio of New
York municipal securities with an average weighted maturity (the time in which
debt must be repaid) between three and ten years.*

*For investors subject to the federal alternative minimum tax, a small portion
of these dividends may be subject to such tax. Distributions of capital gains
and of ordinary income from accrued market discount, if any, are generally
taxable.

Throughout this six-month reporting period, rising interest rates and a
volatile New York municipal market directly affected the securities in which
your fund invests. Using your fund's net asset value (NAV) share price as a
representation of the New York municipal market, we can trace the market's
erratic pattern through three distinct moves during this reporting period:

1) The fund's NAV price increased roughly 1% between December 31, 1995 ($10.40),
and February 13, 1996 ($10.50).

2) By April 8, the price had declined almost 5% to $9.99.

3) After that, the fund's NAV climbed back to $10.10 on June 30, 1996 -- roughly
a 3% net loss from December 31, 1995.

GRAPHIC MATERIAL 4 OMITTED - SEE APPENDIX AT END OF DOCUMENT

The market activity previously described illustrates how difficult it is to
guess the direction of short-term interest rates when making investment
decisions. That's why we don't attempt to invest based on guesses of short-term
moves. Rather, we try to react quickly and intelligently to changes as they
occur.

Over the reporting period, we continued to purchase higher-yielding, investment
grade, BBB-rated bonds. The percentage of BBB-rated securities held in the fund
increased to 74.3% on June 30, 1996, up from 69.2% six months prior. These
higher-yielding bonds should help to maintain the fund's income.

We continue to maintain our conservative management approach by purchasing
"essential service" bonds. Unlike other general obligation bonds, essential
service bonds are backed by revenue from hospitals, utilities, and
transportation projects, and tend to generate a more reliable income stream. As
always, we will purchase securities based on their credit quality and yield
potential.

Franklin New York Intermediate-Term
Tax-Free Income Fund
Portfolio Breakdown on 6/30/96
Based on Total Long-Term Investments

% of Total
Long-Term
Sector Investments

General Obligations 28.9%

Hospitals 17.0%

Other Revenue 10.7%

Certificates of Participation 9.9%

Transportation 9.4%

Education 9.0%

Utilities 7.2%

Housing 7.0%

Industrial 0.9%

For a complete list of portfolio holdings, please see
page 25 of this report.

Performance Summary

The Franklin New York Intermediate-Term Tax-Free Income Fund's share price, as
measured by net asset value, declined 30 cents from $10.40 on December 31, 1995,
to $10.10 on June 30, 1996.

At the end of this reporting period, the fund's distribution rate was 5.34%,
based on an annualization of the current monthly dividend of 4.6 cents ($0.046)
per share and the maximum offering price of $10.33 on June 30, 1996. This
tax-free rate is generally higher than the after-tax return on a comparable
taxable investment. For example, an investor in the maximum combined federal,
New York state and New York City personal income tax bracket of 46.6% would need
to earn 10.00% from a taxable investment to match the fund's tax-free
distribution rate. Likewise, an investor in the maximum combined federal and New
York state personal income tax bracket of 43.9% would need to earn 9.52% from a
taxable investment to match the fund's tax-free distribution rate.

Franklin New York Intermediate-Term
Tax-Free Income Fund
Dividend Distributions (1/01/96 - 6/30/96)+
Dividend
Month per Share

January 4.6 cents

February 4.6 cents

March 4.6 cents

April 4.6 cents

May 4.6 cents

June 4.6 cents

Total 27.6 cents

GRAPHIC MATERIAL 5 OMITTED - SEE APPENDIX AT END OF DOCUMENT

Franklin New York Intermediate-Term Tax-Free Income Fund

Periods ended 6/30/96

Since
Inception
1-Year 3-Year (9/23/92)
Cumulative Total Return1 5.92% 13.27% 21.55%
Average Annual Total Return2 3.56% 3.46% 4.68%

Distribution Rate3 5.34%
Taxable Equivalent Distribution Rate4 10.00%
30-Day Standardized Yield5 5.29%
Taxable Equivalent Yield4 9.91%

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. See Note below.

2. Average annual total return represents the average annual change in value of
an investment over the periods indicated and includes the maximum 2.25% initial
sales charge. See Note below.

3. Based on an annualization of the current 4.6 cent per share monthly dividend
and the maximum offering price of $10.33 on June 30, 1996.

4. Taxable equivalent distribution rate and yield assume the 1996 maximum
combined federal, New York state and New York City personal income tax bracket
46.6%, based on the federal income tax rate of 39.6%.

5. Yield, calculated as required by the SEC, is based on the earnings of the
fund's portfolio for the 30 days ended June 30, 1996.

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.

The fund's manager agreed in advance to waive a portion of the management fees,
which reduces operating expenses and increases distribution rate, yield and
total return to shareholders. Without this waiver, the fund's distribution rate
would have been lower, and yield for the period would have been 4.87%. The fee
waiver may be discontinued at any time upon notice to the fund's Board of
Trustees.

FRANKLIN NEW YORK TAX-FREE TRUST

Statement of Investments in Securities and Net Assets, June 30, 1996 (unaudited)
<TABLE>
<CAPTION>

Face Value
Amount Franklin New York Tax-Exempt Money Fund (Note 1)
Investments 96.6%

<C> <S> <C>
$ 200,000 aBabylon, Town of, IDA, IDR, General Microwave Corp. Facility, Series 1984,
Weekly VRDN and Put, 3.15%, 10/01/99 ............................................. $ 200,000
500,000 aBabylon, Town of, IDA, Resources Recovery Revenue, Equity Babylon Project,
Weekly VRDN and Put, 3.65%, 12/01/24 ............................................. 500,000
1,000,000 Erie County RAN, Series A, 4.25%, 04/17/97 ........................................ 1,005,014
1,500,000 aGreat Neck North, Water Authority System Revenue, Series A, FGIC Insured,
Weekly VRDN and Put, 2.85%, 01/01/20 ............................................. 1,500,000
600,000 Nassau IDA, Research Facility Revenue, Cold Spring Harbor Laboratory Project,
3.45%, 07/01/23 .................................................................. 600,000
aNew York City GO,
1,300,000 Series B, Subseries B-3, Daily VRDN and Put, 3.60%, 08/15/04 ................... 1,300,000
800,000 Series B, Subseries B-10, Weekly VRDN and Put, 3.15%, 08/15/24 ................. 800,000
700,000 Series B-4, Daily VRDN and Put, 3.60%, 08/15/23 ................................ 700,000
200,000 Series B-7, AMBAC Insured, Daily VRDN and Put, 3.60%, 08/15/18 ................. 200,000
200,000 Subseries B-4, Subordinated Lien, Daily VRDN and Put, 3.75%, 08/15/22 .......... 200,000
100,000 Subseries B-4, Subordinated Lien, Daily VRDN and Put, 3.75%, 08/15/23 .......... 100,000
aNew York City HDC, Mortgage Revenue, Weekly VRDN and Put,
3,000,000 Columbus Apartments, Series A, 3.10%, 03/15/25 ................................. 3,000,000
1,295,000 Parkgate Tower No. 1, 3.15%, 12/01/07 .......................................... 1,295,000
1,800,000 aNew York City IDA Revenue, Japan Arls Co., Daily VRDN and Put, 3.65%, 11/01/15 ... 1,800,000
500,000 aNew York City IDA, Various Civic Facilities, National Audobon Society, Daily VRDN and
Put, 3.45%, 12/01/14 ............................................................. 500,000
500,000 New York City Municipal Assistance Corp., 7.90%, 07/01/96 ......................... 510,108
1,000,000 New York City Municipal Water and Sewer Systems Revenue, TECP, 3.30%, 07/25/96 .... 1,000,000
aNew York City Municipal Water Finance Authority, Water and Sewer Systems Revenue,
FGIC Insured, Daily VRDN and Put,
400,000 Series C, 3.60%, 06/15/22 ...................................................... 400,000
600,000 Series C, 3.60%, 06/15/23 ...................................................... 600,000
1,250,000 Series G, 3.55%, 06/15/24 ...................................................... 1,250,000
aNew York City Tri-Cultural Resources Revenue,
1,200,000 American Museum of Natural History, Series B, MBIA Insured, Weekly VRDN and Put,
3.10%, 04/01/21 ............................................................... 1,200,000
900,000 Solomon R. Guggenheim, Series B, Daily VRDN and Put, 3.45%, 12/01/15 ........... 900,000
New York State Dormitory Authority Revenues,
300,000 aCornell University, Series B, Daily VRDN and Put, 3.45%, 07/01/25 ............. 300,000
500,000 Memorial Sloan Kettering, Series B, TECP, 3.55%, 10/16/96 ...................... 500,000
2,700,000 aMetropolitan Museum of Art, Series B, Weekly VRDN and Put, 3.00%, 07/01/23 .... 2,700,000
500,000 aNew York Public Library, Series B, Weekly VRDN and Put, 3.00%, 07/01/22 ....... 500,000
1,000,000 New York University, MBIA Insured, 6.625%, 07/01/96 ............................ 1,020,143
1,000,000 aOxford University Press, Inc., Daily VRDN and Put, 3.65%, 07/01/23 ............ 1,000,000
1,400,000 aOxford University Press, Inc., Weekly VRDN and Put, 3.15%, 07/01/25 ........... 1,400,000
aNew York State Energy Research and Development Authority, PCR,
$ 200,000 Central Hudson Gas & Electric Co. Project, Series A, Weekly VRDN and Put,
3.15%, 06/01/27 ............................................................... $ 200,000
100,000 Niagara Mohawk Power Corp., Series B, Daily VRDN and Put, 3.60%, 12/01/25 ...... 100,000
600,000 Refunding, New York State Electric & Gas, Series C, Daily VRDN and Put,
3.45%, 02/01/29 ............................................................... 600,000
1,000,000 Refunding, Orange and Rockland Project, Series A, FGIC Insured,
Weekly VRDN and Put, 3.10%, 10/01/14 .......................................... 1,000,000
1,350,000 Refunding, Orange and Rockland Utilities, Series A, AMBAC Insured,
Weekly VRDN and Put, 3.10%, 08/01/15 .......................................... 1,350,000
1,000,000 New York State Environmental Facility Corp., General Electric, TECP, 3.40%, 10/09/96
1,000,000
New York State GO, TECP
900,000 3.50%, 07/25/96 ................................................................ 900,000
2,500,000 3.15%, 08/12/96 ................................................................ 2,500,000
3,100,000 aNew York State HFA, Normandie Court I Project, Weekly VRDN and Put,
3.05%, 05/15/15 .................................................................. 3,100,000
aNew York State Local Government Assistance Corp., Weekly VRDN and Put,
2,300,000 Series A, 3.10%, 04/01/22 ...................................................... 2,300,000
700,000 Series G, 3.10%, 04/01/25 ...................................................... 700,000
2,500,000 aNew York State Medical Care Facilities, Finance Agency Revenue, Pooled Equipment
Loan Program II, Series A, Weekly VRDN and Put, 3.20%, 11/01/03 .................. 2,500,000
920,000 aNiagara County IDA, IDR, Pyron Corp. Project, Weekly VRDN and Put, 3.45%, 11/01/04 920,000
North Hempstead Solid Waste Management Authority Revenue, Refunding,
300,000 aSeries A, Weekly VRDN and Put, 3.05%, 02/01/12 ................................ 300,000
1,000,000 Series B, MBIA Insured, 3.70%, 02/01/97 ........................................ 1,000,000
800,000 aOnondaga Country IDA, IDR, FRN, Pass & Seymour, Inc., Series B,
Monthly VRDN and Weekly Put, 3.40%, 11/13/98 ..................................... 800,000
1,000,000 aPuerto Rico Commonwealth, Government Development Bank, Refunding,
Weekly VRDN and Put, 3.00%, 12/01/15 ............................................. 1,000,000
900,000 aSeneca County IDA, Civic Facility Revenue, New York Chiropractic College,
Weekly VRDN and Put, 3.15%, 10/01/21 ............................................. 900,000
1,600,000 aSt. Lawrence IDA, Environmental Impact Revenue, Reynolds Metals Co. Project,
Weekly VRDN and Put, 3.35%, 05/01/25 ............................................. 1,600,000
Suffolk County GO, TAN,
700,000 Series I, 4.00%, 08/15/96 ...................................................... 700,747
2,000,000 Series II, 4.50%, 09/12/96 ..................................................... 2,002,765
1,500,000 aSuffolk County GO, Water Authority, BAN, Weekly VRDN and Put, 3.25%, 02/08/01 .... 1,500,000
595,000 aSuffolk IDA, IDR, Refunding, Phototronics Corp. Facility, Daily VRDN and Weekly Put,
3.55%, 01/01/98 .................................................................. 595,000
400,000 aSyracuse IDA, Civic Facilities Revenue, Multi-Modal, Syracuse University Project,
Daily VRDN and Put, 3.45%, 03/01/23 .............................................. 400,000
$ 2,500,000 aTriborough Bridge and Tunnel Authority, Special Obligation, FGIC Insured,
Weekly VRDN and Put, 3.05%, 01/01/24 ............................................. $ 2,500,000
3,000,000 Westchester County GO, TAN, 3.75%, 12/11/96 ....................................... 3,008,601
-------------
Total Investments (Cost $60,457,378) 96.6%.............................. 60,457,378
Other Assets and Liabilities, Net 3.4% ................................. 2,161,535
-------------
Net Assets 100.0% ...................................................... $62,618,913
=============

</TABLE>

At June 30, 1996, there was no unrealized appreciation or depreciation for
financial statement or income tax purposes.

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
IDR - Industrial Development Revenue
MBIA - Municipal Bond Investors Assurance Corp.
PCR - Pollution Control Revenue
RAN - Revenue Anticipation Notes
TAN - Tax Anticipation Notes
TECP - Tax-Exempt Commercial Paper

aVariable rate demand notes (VRDNs) 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.

FRANKLIN NEW YORK TAX-FREE TRUST

Statement of Investments in Securities and Net Assets, June 30, 1996 (unaudited)

Face Value
Amount Franklin New York Insured Tax-Free Income Fund (Note 1)
Long Term Investments 98.7%

<C> <S> <C>
$ 750,000 Akron Central School District GO, School Improvement, FSA Insured, 5.90%,
06/01/14 ...................................................................... $ 754,748
Albany County GO, FGIC Insured,
1,000,000 5.85%, 06/01/12 ............................................................. 1,014,960
1,275,000 5.85%, 06/01/13 ............................................................. 1,289,242
780,000 Albany GO, MBIA Insured, 5.25%, 11/01/13 ....................................... 741,608
Albany Municipal Water Finance Authority, Water and Sewer System Revenue,
Refunding, Series A, FGIC Insured,
2,505,000 5.95%, 12/01/12 ............................................................. 2,551,793
7,225,000 5.50%, 12/01/22 ............................................................. 6,821,773
Alden Central School District, AMBAC Insured,
275,000 6.25%, 06/15/08 ............................................................. 295,375
275,000 6.25%, 06/15/09 ............................................................. 292,603
125,000 6.25%, 06/15/10 ............................................................. 132,789
2,600,000 Amsterdam HDC, Mortgage Revenue, Refunding, MBIA Insured, 6.25%, 01/01/25 ...... 2,607,670
200,000 Brookhaven GO, Series B, MBIA Insured, 7.00%, 05/01/09 ......................... 228,322
1,000,000 Broome County COP, Public Safety Facilities, MBIA Insured, 5.25%, 04/01/22 ..... 919,340
Buffalo GO, AMBAC Insured,
225,000 Series A & C, Pre-Refunded, 7.25%, 04/01/08 ................................. 248,657
360,000 Series E, 6.70%, 12/01/17 ................................................... 393,318
385,000 Series E, 6.70%, 12/01/18 ................................................... 420,632
410,000 Series E, 6.70%, 12/01/19 ................................................... 447,946
Buffalo Municipal Water Finance Authority, Water System Revenue,
1,350,000 bFGIC Insured, 6.10%, 07/01/26 .............................................. 1,368,333
3,600,000 FSA Insured, 5.75%, 07/01/19 ................................................ 3,523,608
100,000 Camden Central School District, AMBAC Insured, 7.10%, 06/15/07 ................. 115,255
Canandaigua City School District, AMBAC Insured,
625,000 6.40%, 06/01/08 ............................................................. 679,344
110,000 6.50%, 06/01/10 ............................................................. 120,029
550,000 6.50%, 06/01/11 ............................................................. 599,561
Central Square School District, FGIC Insured,
900,000 6.50%, 06/15/08 ............................................................. 990,477
900,000 6.50%, 06/15/09 ............................................................. 982,548
70,000 Chateaugay Central School District, AMBAC Insured, 6.70%, 06/15/09 ............. 77,706
2,000,000 Clifton Park Water Authority, Water System Revenue, Series A, FGIC Insured,
Pre-Refunded, 6.375%, 10/01/26 ................................................ 2,192,100
495,000 Deposit Central School District GO, AMBAC Insured, 6.35%, 06/15/10 ............. 528,116

Eastport USD, MBIA Insured,
$ 225,000 6.45%, 12/01/06 ............................................................. $ 247,379
225,000 6.45%, 12/01/07 ............................................................. 246,929
225,000 6.45%, 12/01/08 ............................................................. 246,152
1,000,000 Erie County GO, Series B, FGIC Insured, 5.625%, 06/15/20 ....................... 971,160
200,000 Erie County Water Authority Revenue, Refunding, Series B, AMBAC Insured,
ETM, 6.75%, 12/01/14 .......................................................... 217,738
100,000 Evans-Brant Central School District, Series 1991, MBIA Insured, 6.85%, 06/15/08 112,642
Greece Central School District No.1, Series 1992, FGIC Insured,
950,000 6.00%, 06/15/16 ............................................................. 972,249
950,000 6.00%, 06/15/17 ............................................................. 967,043
950,000 6.00%, 06/15/18 ............................................................. 967,452
285,000 Hamburg Town Public Improvement, MBIA Insured, 6.30%, 11/15/10 ................. 303,035
Hempstead Town, AMBAC Insured,
125,000 Series B, 6.50%, 01/01/10 ................................................... 136,174
100,000 Series B, 6.50%, 01/01/11 ................................................... 108,853
100,000 Series B, 6.50%, 01/01/12 ................................................... 108,698
150,000 Series C, 6.50%, 02/15/10 ................................................... 163,479
150,000 Series C, 6.50%, 02/15/11 ................................................... 163,341
100,000 Series C, 6.50%, 02/15/12 ................................................... 108,734
1,340,000 Hempstead Town IDA, Civic Facilities Revenue, Hofstra University Project,
MBIA Insured, 5.80%, 07/01/15 ................................................. 1,343,430
Hermon de Kalb Etc., Central School District GO, Series 1992, MBIA Insured,
150,000 6.45%, 06/15/09 ............................................................. 161,627
150,000 6.45%, 06/15/10 ............................................................. 161,469
150,000 6.45%, 06/15/11 ............................................................. 161,999
2,000,000 Islip Resources Recovery Agency Revenue, Series B, AMBAC Insured,
6.125%, 07/01/12 .............................................................. 2,036,620
375,000 Lake George Central School District GO, MBIA Insured, 6.50%, 06/15/09 .......... 411,221
Lockport GO, Series B, MBIA Insured,
265,000 6.15%, 03/15/18 ............................................................. 270,793
280,000 6.15%, 03/15/19 ............................................................. 285,082
155,000 Mahopac Central School District, AMBAC Insured, 6.80%, 06/15/08 ................ 174,649
210,000 Middle Country Central School District, New York Centereach, AMBAC Insured,
6.90%, 12/15/06 ............................................................... 238,495
Monroe County GO, Public Improvement, AMBAC Insured,
985,000 6.15%, 06/01/18 ............................................................. 1,009,152
1,730,000 6.15%, 06/01/19 ............................................................. 1,772,420
2,000,000 Monroe County IDA Revenue, Civic Facilities, Nazareth College, MBIA Insured,
6.00%, 06/01/20 .............................................................. 2,011,000

$ 1,055,000 Mount Sinai Union Free School District, Refunding, AMBAC Insured, 6.20%,
02/15/13 ...................................................................... $ 1,122,805
1,150,000 Nassau County IDA, Civic Facilities Revenue, Hofstra University Project, AMBAC
Insured, 6.75%, 08/01/11 ...................................................... 1,245,232
New Rochelle GO, Series C, MBIA Insured,
195,000 6.25%, 03/15/21 ............................................................. 200,690
390,000 6.25%, 03/15/22 ............................................................. 401,380
530,000 6.25%, 03/15/23 ............................................................. 545,465
555,000 6.25%, 03/15/24 ............................................................. 571,195
100,000 New York City Educational Construction Fund Revenue, Series A, MBIA Insured,
Pre-Refunded, 7.125%, 04/01/13 ................................................ 109,289
New York City Municipal Water Finance Authority, Water and Sewer System Revenue,
1,000,000 Series A, FGIC Insured, 6.75%, 06/15/16 ..................................... 1,066,940
20,300,000 Series C, AMBAC Insured, 6.20%, 06/15/21 .................................... 21,075,054
3,830,000 Series C, AMBAC Insured, 6.50%, 06/15/21 .................................... 3,911,885
New York City Trust, Cultural Resource Revenue, Refunding, Museum of Modern Art,
Series A, AMBAC Insured,
250,000 6.625%, 01/01/11 ............................................................ 270,733
2,805,000 6.625%, 01/01/19 ............................................................ 2,971,954
New York State Dormitory Authority Revenues,
140,000 Associated Children's, Inc., MBIA Insured, 7.60%, 07/01/18 .................. 149,475
2,460,000 Brooklyn Law School, CGIC Insured, 6.40%, 07/01/11 .......................... 2,614,144
275,000 City University System, Series C, FGIC Insured, Pre-Refunded, 7.00%, 07/01/14 303,419
600,000 Colgate University, Series A, MBIA Insured, Pre-Refunded, 6.70%, 07/01/11 ... 662,382
2,445,000 Comsewogue Public Library, MBIA Insured, 6.05%, 07/01/24 .................... 2,470,404
750,000 Founding Charitable Corp., MBIA Insured, 6.50%, 07/01/12 .................... 769,823
1,000,000 Hamilton College, MBIA Insured, 6.50%, 07/01/21 ............................. 1,036,290
1,000,000 Hartwick College, MBIA Insured, 6.25%, 07/01/12 ............................. 1,038,810
2,780,000 Judicial Lease Facilities, Series B, Suffolk County, MBIA Insured,
7.00%, 04/15/16 ............................................................ 3,010,545
1,890,000 Leake and Watts Services, Inc., MBIA Insured, 6.00%, 07/01/23 ............... 1,901,264
1,500,000 Maimonides Medical Center, Series A, MBIA Insured, 5.75%, 08/01/24 .......... 1,455,225
1,000,000 New York University, FGIC Insured, 6.25%, 07/01/09 .......................... 1,047,190
1,195,000 Oceanside Library, AMBAC Insured, 6.00%, 07/01/25 ........................... 1,196,888
1,500,000 Refunding, Ithaca College, MBIA Insured, 6.25%, 07/01/21 .................... 1,536,615
1,000,000 Refunding, Marist College, MBIA Insured, 6.00%, 07/01/22 .................... 1,001,880
2,500,000 Refunding, Sinai School of Medicine, MBIA Insured, 6.75%, 07/01/15 .......... 2,680,925
1,505,000 Refunding, Wildwood Programs, Inc., MBIA Insured, 5.875%, 07/01/15 .......... 1,499,025
1,000,000 St. John's University, AMBAC Insured, 6.875%, 07/01/11 ...................... 1,085,090
5,000,000 St. Vincent's Hospital and Medical Center, AMBAC Insured, 6.00%, 08/01/28 ... 5,023,800
$ 1,220,000 University of Rochester, MBIA Insured, 6.50%, 07/01/09 ...................... $ 1,259,077
2,355,000 University of Rochester, Strong Health Facilities, MBIA Insured, 5.90%, 07/01/17 2,358,509
New York State Energy Research and Development Authority, Electric Facilities
Revenue, Consolidated Edison Co. of New York, Inc. Project,
4,500,000 Refunding, Series A, AMBAC Insured, 6.10%, 08/15/20 ......................... 4,546,620
4,000,000 Refunding, Series B, MBIA Insured, 5.25%, 08/15/20 .......................... 3,643,560
4,950,000 Series A, MBIA Insured, 6.75%, 01/15/27 ..................................... 5,242,001
210,000 Series C, MBIA Insured, 7.25%, 11/01/24 ..................................... 222,016
New York State Energy Research and Development Authority, Gas Facilities Revenue,
Brooklyn Union Gas, MBIA Insured,
3,050,000 Series II, 7.00%, 12/01/20 .................................................. 3,136,620
2,240,000 Series A, 6.75%, 02/01/24 ................................................... 2,396,957
New York State Energy Research and Development Authority, PCR,
4,000,000 Electric and Gas Project, Series A, MBIAInsured, 6.15%, 07/01/26 ............ 4,025,360
1,500,000 Refunding, Niagara Mohawk Power Corp., Series A, FGIC Insured, 6.625%,
10/01/13 ................................................................... 1,592,190
5,000,000 Refunding, Niagara Mohawk Power Corp., Series A, FGIC Insured, 7.20%,
07/01/29 ................................................................... 5,584,500
1,150,000 Refunding, Rochester Gas and Electric Project, Series A, MBIA Insured, 6.35%,
05/15/32 ................................................................... 1,182,085
1,000,000 Refunding, Rochester Gas and Electric Project, Series B, MBIA Insured, 6.50%,
05/15/32 ................................................................... 1,027,740
New York State Environmental Facilities Corp., Water Facilities Revenue, Refunding,
Spring Valley Water Co., Inc. Project, AMBAC Insured,
2,000,000 Series A, 6.30%, 08/01/24 ................................................... 2,037,180
3,000,000 Series B, 6.15%, 08/01/24 ................................................... 3,022,200
New York State Medical Care Facilities Finance Agency Revenue,
6,735,000 Long-Term Health Care, Series A, CGIC Insured, 6.80%, 11/01/14 .............. 7,114,181
5,355,000 Long-Term Health Care, Series B, CGIC Insured, 6.45%, 11/01/14 .............. 5,567,540
4,245,000 Long-Term Health Care, Series C, CGIC Insured, 6.40%, 11/01/14 .............. 4,400,282
1,000,000 Our Lady of Victory Hospital, Series A, AMBAC Insured, 6.625%, 11/01/16 ..... 1,047,970
5,000,000 Presbyterian Hospital, Series A, MBIA Insured, 5.375%, 02/15/25 ............. 4,626,000
1,000,000 Refunding, Hospital and Nursing Home Mortgage, Series C, MBIA Insured,
6.25%, 08/15/12 ............................................................ 1,031,330
1,495,000 Refunding, St. Mary's Hospital Project, Series A, AMBAC Insured, 6.20%,
11/01/14 ................................................................... 1,547,250
700,000 Sisters of Charity Hospital, Series A, AMBAC Insured, 6.60%, 11/01/10 ....... 756,700
$ 1,500,000 Sisters of Charity Hospital, Series A, AMBAC Insured, 6.625%, 11/01/18 ...... $ 1,571,955
1,500,000 St. Luke's-Roosevelt Facility, Mortgage, Series A, MBIA Insured, 5.625%,
08/15/18 ................................................................... 1,443,915
New York State Power Authority Revenue and General Purpose,
2,000,000 Refunding, Series Z, FGIC Insured, 6.50%, 01/01/19 .......................... 2,086,560
3,000,000 Series AA, MBIA Insured, 6.25%, 01/01/23 .................................... 3,082,920
3,255,000 Series Y, AMBAC Insured, 6.50%, 01/01/11 .................................... 3,443,399
New York State Tollway Authority, General Revenue, FGIC Insured,
1,000,000 Series A, 5.75%, 01/01/19 ................................................... 991,270
13,975,000 Series C, 6.00%, 01/01/25 ................................................... 14,061,366
7,500,000 Niagara Falls Bridge Commission Toll Revenue, Refunding, Series B, FGIC Insured,
5.25%, 10/01/21 ............................................................... 6,881,775
Niagara Falls Public Improvement, MBIA Insured,
1,000,000 6.85%, 03/01/19 ............................................................. 1,109,190
500,000 6.90%, 03/01/20 ............................................................. 554,480
500,000 6.90%, 03/01/21 ............................................................. 554,480
1,200,000 Niagara Falls Water Treatment Plant, MBIA Insured, 7.00%, 11/01/12 ............. 1,293,156
Niagara Frontier Transportation Authority, Airport Revenue, Greater Buffalo
International Airport, AMBAC Insured,
1,000,000 Series A, 6.25%, 04/01/24 ................................................... 1,018,130
1,440,000 Series C, 6.00%, 04/01/24 ................................................... 1,457,842
North Hempstead GO, Refunding, FGIC Insured,
210,000 Series A, 6.40%, 02/01/11 ................................................... 228,329
1,065,000 Series B, 6.40%, 04/01/15 ................................................... 1,153,917
1,060,000 Series B, 6.40%, 04/01/16 ................................................... 1,144,503
500,000 North Hempstead Solid Waste Management Revenue, Refunding, Series B,
MBIA Insured, 5.00%, 02/01/12 ................................................. 457,870
100,000 Onondaga Central School District, MBIA Insured, 6.80%, 06/15/10 ................ 112,543
75,000 Ontario County GO, Series A, FGIC Insured, 6.50%, 05/15/11 ..................... 82,142
375,000 Oyster Bay GO, Public Improvement, Series A, FGIC Insured, 5.60%, 04/15/13 ..... 370,946
Port Authority of New York and New Jersey,
1,000,000 Consolidated 71st Series, AMBAC Insured, 6.50%, 01/15/26 .................... 1,047,020
1,600,000 Consolidated 71st Series, MBIA Insured, 6.50%, 01/15/26 ..................... 1,675,232
4,230,000 Consolidated 76th Series, AMBAC Insured, 6.50%, 11/01/26 .................... 4,452,329
2,000,000 Puerto Rico Commonwealth Electric Power Authority Revenue, Water Resources,
Series R, CGIC Insured, 6.25%, 07/01/17 ....................................... 2,055,620
810,000 Rensselear County GO, AMBAC Insured, 6.70%, 02/15/11 ........................... 898,063
Riverhead GO, Series B, AMBAC Insured,
$ 140,000 5.00%, 06/15/10 ............................................................. $ 131,292
130,000 5.00%, 06/15/11 ............................................................. 120,921
130,000 5.00%, 06/15/12 ............................................................. 119,904
125,000 Royalton Water Improvement, MBIA Insured, 6.40%, 02/15/12 ...................... 133,959
Schenevus Central School District, Series 1991, AMBAC Insured,
330,000 6.45%, 06/15/08 ............................................................. 358,690
330,000 6.45%, 06/15/09 ............................................................. 357,162
330,000 Schodack Central School District, AMBAC Insured, 6.875%, 12/15/10 .............. 373,049
100,000 Schuylerville Central School District, MBIA Insured, 6.875%, 06/15/07 .......... 113,399
100,000 South Glens Falls Central School District, Series A, MBIA Insured, 6.85%, 06/15/10 112,505
Suffolk County GO, Public Improvement, FGIC Insured,
500,000 Refunding, Series B, 6.20%, 05/01/11 ........................................ 518,110
500,000 Refunding, Series B, 6.20%, 05/01/13 ........................................ 514,925
365,000 Series 1989, Pre-Refunded, 6.50%, 07/15/13 .................................. 381,907
1,000,000 Suffolk County Water Authority, Waterworks Revenue, Refunding, AMBAC Insured,
Pre-Refunded, 7.10%, 06/01/10 ................................................. 1,090,580
Sullivan County GO, Public Improvement, MBIA Insured,
505,000 5.20%, 03/15/14 ............................................................. 475,963
520,000 5.20%, 03/15/15 ............................................................. 489,143
510,000 5.20%, 03/15/16 ............................................................. 475,998
500,000 5.20%, 03/15/17 ............................................................. 465,774
Triborough Bridge and Tunnel Authority Revenue,
1,500,000 Series Q, AMBAC Insured, 6.00%, 01/01/13 .................................... 1,511,700
740,000 Series S, Secured by U.S. Government Securities, Pre-Refunded, 7.00%,
01/01/21 ................................................................... 815,657
1,900,000 Series T, AMBAC Insured, Pre-Refunded, 6.00%, 01/01/22 ...................... 1,995,094
1,100,000 Series T, MBIA Insured, Pre-Refunded, 7.00%, 01/01/20 ....................... 1,216,918
4,475,000 Series X, AMBAC Insured, 6.50%, 01/01/19 .................................... 4,701,926
2,750,000 Series X, MBIA Insured, 6.50%, 01/01/19 ..................................... 2,889,452
Warrensburg Central School District, Series II, AMBAC Insured,
250,000 6.25%, 06/15/08 ............................................................. 268,522
250,000 6.25%, 06/15/09 ............................................................. 267,194
250,000 6.25%, 06/15/10 ............................................................. 265,577
440,000 Washington County Public Improvement, FGIC Insured, 6.375%, 10/15/10 ........... 470,935
1,000,000 Western Nassau County Water Authority, Water System Revenue, AMBAC Insured,
5.50%, 05/01/16 ............................................................... 967,120
-------------
Total Long Term Investments (Cost $244,807,003) .......................... 252,592,880
-------------
aShort Term Investments
$ 100,000 New York State Energy Research and Development Authority Revenue, PCR,
Refunding, New York Electric and Gas, Series B, Daily VRDN and Put, 3.45%,
02/01/29 (Cost $100,000)....................................................... $ 100,000
-------------
Total Investments (Cost $244,907,003) 98.7% ......................... 252,692,880
Other Assets and Liabilities, Net 1.3% .............................. 3,319,954
-------------
Net Assets 100.0% ................................................... $256,012,834
=============
At June 30, 1996, the net unrealized appreciation based on the
cost of investments for income tax purposes of $ 244,907,003
was as follows:
Aggregate gross unrealized appreciation for all investments in which there
was an excess of value over tax cost .......................................... $ 9,276,450
Aggregate gross unrealized depreciation for all investments in which there
was an excess of tax cost over value .......................................... (1,490,573)
-------------
Net unrealized appreciation................................................... $ 7,785,877
=============

</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 Co.
FSA - Financial Security Assistance
GO - General Obligation
HDC - Housing Development Corp.
IDA - Industrial Development Authority/Agency
MBIA - Municipal Bond Investors Assurance Corp.
PCR - Pollution Control Revenue
USD - Unified School District

bSee Note 1(g) regarding securities purchased on a when-issued basis.

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

FRANKLIN NEW YORK TAX-FREE TRUST

Statement of Investments in Securities and Net Assets, June 30, 1996 (unaudited)

Face Value
Amount Franklin New York Intermediate-Term Tax-Free Income Fund (Note 1)
Investments 98.3%

<C> <S> <C>
$ 100,000 Cortland County IDA Revenue, Civic Facility Revenue, Cortland Memorial Hospital,
Inc. Project, 6.15%, 07/01/02 .................................................... $ 100,745
75,000 Franklin County IDA, Lease Revenue, Correctional Facility Project, 6.375%, 11/01/02 78,216
260,000 Guam Airport Authority Revenue, Refunding, Series A, 6.00%, 10/01/03 .............. 264,241
1,300,000 Guam Power Authority Revenue, Series A, 6.00%, 10/01/04 ........................... 1,321,814
New York City GO,
5,200,000 Refunding, Series A, 6.375%, 08/01/05 .......................................... 5,299,736
1,000,000 Refunding, Series B, 6.20%, 08/15/06 ........................................... 1,002,140
1,000,000 Refunding, Series H, 5.875%, 03/15/11 .......................................... 950,350
3,500,000 Series H, 7.00%, 02/01/06 ...................................................... 3,672,515
New York City IDA, Civic Facility Revenue,
360,000 New York Blood Center, Inc. Project, ETM, 6.80%, 05/01/02 ...................... 377,186
1,875,000 USTA National Tennis Center Project, FSA Insured, 6.00%, 11/15/03 .............. 1,998,731
1,675,000 USTA National Tennis Center Project, FSA Insured, 6.10%, 11/15/04 .............. 1,797,225
4,010,000 New York State COP, Commissioner of General Services Department, 6.50%, 03/01/00 .. 4,199,072
New York State Dormitory Authority Revenues,
690,000 Department of Health, 6.25%, 07/01/04 .......................................... 718,580
735,000 Department of Health, 6.30%, 07/01/05 .......................................... 763,077
100,000 Refunding, City University, Series U, 6.25%, 07/01/02 .......................... 104,719
1,720,000 Refunding, City University, Series U, 6.35%, 07/01/04 .......................... 1,811,263
2,000,000 Refunding, Nyack Hospital, 6.00%, 07/01/06 ..................................... 1,989,600
3,045,000 New York State HFA Revenue, Refunding, Health Facilities, Series A, 6.00%, 11/01/08
3,000,452
New York State Medical Care Facilities, Finance Agency Revenue,
1,500,000 Hospital and Nursing Home, FHA Insured, 5.70%, 02/15/05 ........................ 1,558,845
675,000 Refunding, Huntington Hospital Mortgage Project, Series A, 5.90%, 11/01/04 ..... 682,452
400,000 Secured Hospital, Series A, 5.70%, 02/15/04 .................................... 397,776
500,000 Secured Hospital, Series A, 5.70%, 08/15/04 .................................... 497,080
1,900,000 New York State Tollway Authority, General Revenue, Series A, 5.80%, 01/01/06 ...... 1,959,299
Northern Mariana Islands Commonwealth Ports Authority, Seaport Revenue, Series A,
410,000 5.85%, 10/01/03 ................................................................ 407,807
430,000 5.95%, 10/01/04 ................................................................ 427,467
460,000 6.05%, 10/01/05 ................................................................ 457,056
485,000 6.15%, 10/01/06 ................................................................ 481,673
125,000 Oneida-Herkimer Solid Waste Management, Solid Waste Authority Systems Revenue,
Refunding, 6.65%, 04/01/05 ....................................................... 130,105
1,500,000 Puerto Rico Commonwealth Electric Power Authority Revenue, Water Resources,
Series T, 6.00%, 07/01/04 ........................................................ 1,597,845
1,000,000 Puerto Rico Commonwealth GO, 6.00%, 07/01/05 ...................................... 1,053,210

$ 2,000,000 Puerto Rico Industrial, Tourist, Educational, Medical and Environmental Control
Facilities Financing Authority, Hospital Revenue, Mennonite General Hospital Project,
Series A, 6.375%, 07/01/06 ........................................................ $ 2,006,580
Puerto Rico Municipal Finance Agency, Series A,
300,000 5.875%, 07/01/06 ............................................................... 307,002
300,000 FSA Insured, 5.60%, 07/01/05 ................................................... 310,710
Suffolk County IDA, Civic Facilities Revenue, Dowling College Facilities,
100,000 6.10%, 06/01/03 ................................................................ 99,993
180,000 6.20%, 06/01/04 ................................................................ 179,431
225,000 bRefunding, 6.40%, 12/01/05 .................................................... 224,982
350,000 United Nations Development Corp. Revenue, Refunding, Series A, 5.70%, 07/01/02 .... 362,186
-------------
Total Investments (Cost $41,300,434) 98.3%.............................. 42,591,161
Others Assets and Liabilities, Net 1.7%................................. 714,627
-------------
Net Assets 100.0% ...................................................... $43,305,788
=============

At June 30, 1996, the net unrealized appreciation based on the
cost of investments for income tax purposes of $41,300,434 was as
follows:
Aggregate gross unrealized appreciation for all investments in which there
was an excess of value over tax cost ............................................. $ 1,330,738
Aggregate gross unrealized depreciation for all investments in which there
was an excess of tax cost over value ............................................. (40,011)
-------------
Net unrealized appreciation...................................................... $ 1,290,727
=============

</TABLE>
PORTFOLIO ABBREVIATIONS:
COP - Certificate of Participation
ETM - Escrow to Maturity
FHA - Federal Housing Authority/Agency
FSA - Financial Security Assistance
GO - General Obligation
HFA - Housing Finance Authority/Agency
IDA - Industrial Development Authority/Agency
USTA - United States Tennis Association

bSee Note 1(g) regarding securities purchased on a when-issued basis.

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

Financial Statements

Statements of Assets and Liabilities
June 30, 1996 (unaudited)
<TABLE>
<CAPTION>

Franklin New YorkFranklin New York Franklin New York
Tax-Exempt Insured Tax-Free Intermediate-Term
Money Fund Income Fund Tax-Free Income Fund
----------- ----------- --------------
Assets:
Investments in securities:
<S> <C> <C> <C>
At identified cost .................................. $60,457,378 $244,907,003 $41,300,434
=========== =========== ==============
At value ............................................ 60,457,378 252,692,880 42,591,161
Cash ................................................. 5,950,142 64,459 24,428
Receivables:
Interest ............................................ 547,706 4,600,959 901,889
Capital shares sold ................................. -- 539,254 108,174
Prepaid expenses...................................... 3,636 -- --
----------- ----------- --------------
Total assets .................................... 66,958,862 257,897,552 43,625,652
----------- ----------- --------------
Liabilities:
Payables:
Investment securities purchased:
Regular Delivery ................................... 4,306,302 -- --
When-issued basis (Note 1) ......................... -- 1,353,889 226,280
Distributions to shareholders ....................... 4,606 273,824 54,146
Capital shares repurchased .......................... -- -- 20,763
Distribution fees ................................... -- 50,634 9,412
Shareholder servicing costs ......................... 6,573 6,158 293
Management fees ..................................... 22,468 103,825 6,011
Accrued expenses and other liabilities ............... -- 96,388 2,959
----------- ----------- --------------
Total liabilities ............................... 4,339,949 1,884,718 319,864
----------- ----------- --------------
Net assets, at value .................................. $62,618,913 $256,012,834 $43,305,788
=========== =========== ==============
Net assets consist of:
Undistributed net investment income .................. $-- $ 158,627 $ 182,703
Net unrealized appreciation on investments ........... -- 7,785,877 1,290,727
Net realized loss .................................... -- (3,535,988) (3,048,458)
Class I capital shares ............................... 62,618,913 248,640,280 44,880,816
Class II capital shares .............................. -- 2,964,038 --
----------- ----------- --------------
Net assets, at value .................................. $62,618,913 $256,012,834 $43,305,788
=========== =========== ==============
Class I shares:
Net assets, at value ................................. $62,618,913 $253,069,187 $43,305,788
=========== =========== ==============
Shares outstanding ................................... 62,618,913 22,886,729 4,286,390
=========== =========== ==============
Net asset value per share* ........................... $1.00 $11.06 $10.10
=========== =========== ==============
Class II shares:
Net assets, at value ................................. -- $ 2,943,647 --
=========== =========== ==============
Shares outstanding ................................... -- 264,681 --
=========== =========== ==============
Net asset value per share* ........................... -- $11.12 --
=========== =========== ==============
</TABLE>

*Redemption price per share is equal to net asset value less any applicable
contingent deferred sales charge.

Statements of Operations
for the six months ended June 30, 1996 (unaudited)
<TABLE>
<CAPTION>

Franklin New YorkFranklin New York Franklin New York
Tax-Exempt Insured Tax-Free Intermediate-Term
Money Fund Income Fund Tax-Free Income Fund
----------- ----------- --------------
Investment income:
<S> <C> <C> <C>
Interest (Note 1) .................................... $1,028,015 $7,571,322 $1,289,031
----------- ----------- --------------
Expenses:
Management fees (Note 5) ............................. 193,258 702,027 138,928
Distribution fees - Class I (Note 5) ................. -- 102,537 23,737
Distribution fees - Class II (Note 5) ................ -- 5,748 --
Shareholder servicing costs (Note 5) ................. 37,034 27,064 5,482
Reports to shareholders .............................. 21,359 18,756 3,964
Registration and filing fees ......................... 3,205 10,002 2,182
Professional fees .................................... 3,091 12,288 1,373
Custodian fees ....................................... 958 3,935 960
Trustees' fees and expenses .......................... 694 2,881 242
Insurance ............................................ -- 3,036 --
Other ................................................ 1,854 74,893 386
Management fees waived by manager (Note 5) ........... (75,701) (47,960) (97,939)
----------- ----------- --------------
Total expenses .................................. 185,752 915,207 79,315
----------- ----------- --------------
Net investment income .......................... 842,263 6,656,115 1,209,716
----------- ----------- --------------
Realized and unrealized gain (loss) on investments:
Net realized gain (loss) ............................. -- 289,561 (250,817)
Net unrealized depreciation .......................... -- (8,262,129) (1,109,571)
----------- ----------- --------------
Net realized and unrealized loss on investments ....... -- (7,972,568) (1,360,388)
----------- ----------- --------------
Net increase (decrease) in net assets resulting from
operations ........................................... $ 842,263 $(1,316,453) $ (150,672)
=========== =========== ==============

</TABLE>

Statements of Changes in Net Assets for the six months ended June 30, 1996
(unaudited) and the year ended December 31, 1995
<TABLE>
<CAPTION>

Franklin New York
Franklin New York Franklin New York Insured Intermediate-Term
Tax-Exempt Money Fund Tax-Free Income Fund Tax-Free Income Fund
------------------- --------------------- -------------------
1996 1995 1996 1995 1996 1995
--------- --------- ---------- ---------- --------- ---------
Increase (decrease) in net assets:
Operations:
<S> <C> <C> <C> <C> <C> <C>
Net investment income .... $ 842,263 $ 1,884,587 $ 6,656,115 $ 13,066,230 $ 1,209,716 $ 2,162,631
Net realized gain (loss) from
security transactions .... -- -- 289,561 (1,681,960) (250,817) 13,479
Net unrealized appreciation
(depreciation) on
investments .............. -- -- (8,262,129) 29,401,034 (1,109,571) 2,971,907
--------- --------- ---------- ---------- --------- ---------
Net increase (decrease)
in net assets resulting
from operations ........... 842,263 1,884,587 (1,316,453) 40,785,304 (150,672) 5,148,017
Distributions to shareholders
from undistributed net invest-
ment income:
Class I ................. (842,263) (1,884,587) (6,689,704) (13,009,932) (1,201,669) (2,115,155)
Class II ............... -- -- (41,496) (9,004) -- --
Increase (decrease) in net
assets from capital share
transactions (Note 2) ..... 1,540,235 (3,756,270) 7,193,499 4,039,676 1,429,057 5,030,289
--------- --------- ---------- ---------- --------- ---------
Net increase (decrease)
in net assets ............. 1,540,235 (3,756,270) (854,154) 31,806,044 76,716 8,063,151
Net assets:
Beginning of period ....... 61,078,678 64,834,948 256,866,988 225,060,944 43,229,072 35,165,921
--------- --------- ---------- ---------- --------- ---------
End of period ............. $62,618,913 $61,078,678 $256,012,834 $256,866,988 $43,305,788 $43,229,072
========= ========= ========== ========== ========= =========
Undistributed net investment
income included in net assets:
Beginning of period ..... -- -- $ 233,712 $ 186,418 $ 174,656 $ 127,180
========= ========= ========== ========== ========= =========
End of period ........... -- -- $ 158,627 $ 233,712 $ 182,703 $ 174,656
========= ========= ========== ========== ========= =========
</TABLE>

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

Notes to Financial Statements (unaudited)

1. SIGNIFICANT ACCOUNTING POLICIES

Franklin New York Tax-Free Trust (the Trust) is an open-end management
investment company (mutual fund) registered under the Investment Company Act of
1940, as amended. The Trust has three separate non-diversified funds (the
Funds), consisting of the 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 and distinct investment portfolio. Each Fund seeks
to provide as high a level of income exempt from federal and New York state and
New York City personal income taxes as is consistent with prudent investment
management, while seeking preservation of shareholders' capital. The Money Fund
also seeks liquidity in its investments.

The Insured Fund offers two classes of shares, Class I and Class II. Class I
shares are sold with a higher front-end sales charge than Class II shares. Each
class of shares may be subject to a contingent deferred sales charge and has the
same rights, except with respect to the effect of the respective sales charges,
the distribution fees borne by each class, voting rights on matters affecting a
single class and the exchange privilege of each class.

The offering of Class II shares began May 1, 1995, at which time all previously
outstanding shares became Class I shares.

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

a. Security Valuation:

Tax-free bonds generally trade in the over-the-counter market rather than on a
national securities exchange. In the absence of a 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 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 (the Board). Securities for which
market quotations are not available are valued in accordance with procedures
established by the Board.

The securities in the Money Fund 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 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 Board has established procedures designed to stabilize, to the
extent reasonably possible, the 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 Funds have 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 to maturity of the Fund's portfolio, municipal
bonds and notes as to which the Fund holds a put will be deemed to mature on the
last day on which the put may be exercisable.

c. Income Taxes:
The Funds intend 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 shareholders which will be sufficient to relieve the
Funds from income and excise taxes. Each Fund is treated as a separate entity in
the determination of compliance with the Internal Revenue Code.

d. 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.

e. Investment Income, Expenses and Distributions:
For the Insured Fund and the Intermediate-Term Fund, distributions to
shareholders are recorded on the ex-dividend date. Interest income and estimated
expenses are accrued daily. Original issue discount and premium 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 day following the receipt of an
investor's funds. Dividends are normally declared each day the New York Stock
Exchange is open for business and are equal to an amount per day set from time
to time by the Board, 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.

Realized and unrealized gains or losses and net investment income, other than
class specific expenses, are allocated daily to each class of shares based upon
the relative proportion of net assets of each class.

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 estimated expenses which are accrued daily. The total available for
distributions is computed daily and includes the net investment income, plus or
minus any gains or losses on security transactions and any changes in unrealized
portfolio appreciation or depreciation. Distributions are normally declared each
day the New York Stock Exchange is open for business, equal to the total
available for distributions (as defined above), and are payable to shareholders
of record as of the close of business the preceding day. Such distributions are
automatically reinvested daily in additional shares of the Fund at net asset
value.

f. 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.

g. Securities Purchased on a When-Issued or Delayed Delivery Basis:
The Funds may trade securities on a when-issued or delayed delivery basis, with
payment and delivery scheduled for a future date. These transactions are subject
to market fluctuations and are subject to the risk that the value at delivery
may be more or less than the trade date purchase price. Although the Funds will
generally purchase these securities with the intention of holding the
securities, they may sell the securities before the settlement date. These
securities are identified on the accompanying Statement of Investments in
Securities and Net Assets. The Funds have set aside sufficient investment
securities as collateral for these purchase commitments.

h. 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 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 Fund)
will reduce the current income of the portfolio by the amount thereof. Premiums
paid by the 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 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 Fund and are not considered an
expense of the Fund.

i. Accounting Estimates:
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities at the date of the
financial statements and the amounts of income and expense during the reporting
period. Actual results could differ from those estimates.

2. TRUST SHARES
At June 30, 1996, there was an unlimited number of no par value shares of
beneficial interest authorized. Transactions in each of the Fund's shares for
the periods ended June 30, 1996 and December 31, 1995 were as follows:

Money Fund Insured Fund Intermediate-Term Fund
---------- ------------------- ------------------
Amount Shares Amount Shares Amount
---------- -------- ---------- ------- ---------
Class I Shares:
Six Months Ended June 30, 1996
<S> <C> <C> <C> <C> <C>
Shares sold ................................. $31,309,617 1,713,172 $19,167,996 766,073 $ 7,905,524
Shares issued in reinvestment of
distributions ............................... 843,527 343,086 3,826,629 68,866 701,735
Shares redeemed ............................. (30,612,909) (1,624,340) (18,091,080) (704,267) (7,178,202)
---------- -------- ---------- ------- ---------
Net increase ........................... $ 1,540,235 431,918 $ 4,903,545 130,672 $ 1,429,057
========== ======== ========== ======= =========
Year Ended December 31, 1995
Shares sold ................................. $51,047,828 2,666,848 $29,243,579 1,174,610 $11,892,800
Shares issued in reinvestment of
distributions ............................... 1,884,485 660,709 7,245,577 126,128 1,274,728
Shares redeemed ............................. (56,688,583) (3,028,976) (33,123,564) (806,339) (8,137,239)
---------- -------- ---------- ------- ---------
Net increase (decrease) ................ $ (3,756,270) 298,581 $ 3,365,592 494,399 $ 5,030,289
========== ======== ========== ======= =========

Insured Fund
----------------
Shares Amount
------- ---------
Class II Shares:
Six Months Ended June 30, 1996
<S> <C> <C>
Shares sold ............................................................................. 207,875 $2,333,844
Shares issued in reinvestment of distributions .......................................... 2,420 26,981
Shares redeemed ......................................................................... (6,285) (70,871)
------- ---------
Net increase ....................................................................... 204,010 $2,289,954
======= =========
For the period May 1, 1995 to December 31, 1995
Shares sold ............................................................................. 60,638 $ 673,641
Shares issued in reinvestment of distributions .......................................... 394 4,433
Shares redeemed ......................................................................... (361) (3,990)
------- ---------
Net increase ....................................................................... 60,671 $ 674,084
======= =========
</TABLE>

3. DISTRIBUTIONS AND CAPITAL LOSS CARRYOVERS

At December 31, 1995, for tax purposes, the Funds had capital loss carryovers as
follows:

Intermediate-
Insured Fund Term Fund
-------- -------
Capital loss carryovers expiring in:
1999........................................ $ 5,995 $--
2000........................................ 64,646 --
2001........................................ 70,510 94,629
2002........................................ 2,001,159 2,703,012
2003........................................ 1,681,960 --
-------- -------
$3,824,270 $2,797,641
======== =======

For income tax purposes, the aggregate cost of securities and unrealized
appreciation of the Funds are the same as for financial reporting purposes at
June 30, 1996.

4. PURCHASES AND SALES OF SECURITIES

Aggregate purchases and sales of securities (excluding purchases and sales of
short-term securities) for the six months ended June 30, 1996 were as follows:

Intermediate-
Money Fund Insured Fund Term Fund
-------- --------- ---------
Purchases...................... -- $29,142,243 $12,212,730
Sales.......................... -- $21,076,923 $ 8,584,574

5. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES

a. Management Agreement

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

Annualized Fee Rate Net Assets
- ------------- ----------------------------------
0.625% First $100 million
0.50% Over $100 million, up to and including $250 million
0.45% In excess of $250 million

The terms of the management agreement provide that annual aggregate expenses of
each Fund 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 each Fund's shares are registered. For the six months ended June 30,
1996, the Funds' expenses did not exceed these limitations. However, Advisers
agreed in advance to waive a portion of its management fees for the Funds,
aggregating $221,600.

b. Distribution Plans and Underwriting Agreement
Under the terms of distribution plans pursuant to Rule 12b-1 of the Investment
Company Act of 1940 (the Plans), the Insured Fund reimburses Franklin/Templeton
Distributors, Inc. (Distributors), in an amount up to a maximum of 0.10% per
annum for Class I and 0.65% per annum for Class II, of the average daily net
assets of such class, and the Intermediate-Term Fund reimburses Distributors up
to a maximum of 0.10% per annum of the Fund's average daily net assets, for
costs incurred in the promotion, offering and marketing of the Fund's shares.
The Plans do not permit nor require payments of excess costs after termination.
Fees incurred by the Funds under the Plans aggregated $132,022 for the six
months ended June 30, 1996.

In its capacity as underwriter for the shares of the Insured Fund and the
Intermediate-Term Fund, Distributors receives commissions on sales of the Funds'
shares of beneficial interest. Commissions are deducted from the gross proceeds
received from the sale of the shares of the Fund, and as such are not expenses
of the Funds. Distributors may also make payments, out of its own resources, to
the dealers for certain sales of the Funds' shares. Commissions received by
Distributors, the amounts paid to other dealers, and any applicable contingent
deferred sales charges for the six months ended June 30, 1996 were as follows:

Intermediate-
Insured Fund Term Fund
-------- --------
Total commissions received ............................ $504,298 $96,222
Paid to other dealers ................................. $541,885 $93,249
Contingent deferred sales charges ..................... $ 587 --

c. Shareholder Services Agreement
Under the terms of a shareholder services agreement with Franklin/Templeton
Investor Services, Inc. (Investor Services), the Funds pay costs on a per
shareholder account basis. Shareholder servicing costs incurred for the six
months ended June 30, 1996 aggregated $69,580, all of which was paid to Investor
Services.

d. Other Affiliates and Related Party Transactions
Certain officers and trustees of the Trust are also officers and/or directors of
Distributors, Advisers, and Investor Services, all wholly-owned subsidiaries of
Franklin Resources, Inc.

6. CREDIT RISK

All of the Funds' investments are in the securities of issuers within their
respective states and U.S. territories and possessions. Such concentration may
subject the Funds more significantly to economic changes occuring within those
states and territories.

7. FINANCIAL HIGHLIGHTS

Selected data for a share of beneficial interest outstanding throughout the
period by Fund are as follows:
<TABLE>
<CAPTION>

Per Share Operating Performance Ratios/Supplemental Data
-------------------------------------------- -------------------------
Ratio of Net
Net Asset Net Realized Total Distributions Net Asset Net Assets Ratio of Investment
Year Value at Net & Unrealized From From Net Value at at End Expenses Income Portfolio
Ended Beginning Investment Gain (Loss) Investment Investment End of Total of Period to Average to Average Turnover
Dec. 31, of Period Income on SecuritiesOperations Income Period Return+ (in 000's) Net Assets++ Net Assets Rate

Money Fund
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1991 $1.00 $.036 $ -- $ .036 $(.036) $ 1.00 3.63% $ 70,503 .69% 3.52% --%
1992 1.00 .021 -- .021 (.021) 1.00 2.10 54,122 .65 2.12 --
1993 1.00 .017 -- .017 (.017) 1.00 1.67 50,317 .63 1.68 --
1994 1.00 .021 -- .021 (.021) 1.00 2.11 64,835 .60 2.12 --
1995 1.00 .031 -- .031 (.031) 1.00 3.11 61,079 .60 3.06 --
1996** 1.00 .014 -- .014 (.014) 1.00 1.37 62,619 .60* 2.72* --
Insured Fund
Class I Shares:
19911 10.00 .247 .433 .680 (.220) 10.46 6.75* 37,904 .12* 5.695* 21.12
1992 10.46 .620 .369 .989 (.649) 10.80 9.49 149,054 .33 5.80 3.39
1993 10.80 .600 .880 1.480 (.600) 11.68 13.79 263,647 .50 5.28 5.38
1994 11.68 .590 (1.525) (.935) (.585) 10.16 (8.19) 225,061 .56 5.48 25.66
1995 10.16 .590 1.248 1.838 (.588) 11.41 18.46 256,171 .65 5.38 22.99
1996** 11.41 .290 (.346) (.056) (.294) 11.06 (0.48) 253,069 .71* 5.19* 8.26
Class II Shares:
19953 10.85 .357 .596 .953 (.343) 11.46 8.92 696 1.23* 4.74* 22.99
1996** 11.46 .180 (.260) (.080) (.260) 11.12 (0.69) 2,944 1.25* 4.52* 8.26
Intermediate-Term Fund
19922 10.00 .090 .135 .225 (.015) 10.21 2.25* 3,459 -- 4.41* 20.80
1993 10.21 .480 .536 1.016 (.546) 10.68 10.18 31,162 -- 4.96 30.95
1994 10.68 .550 (1.104) (.554) (.526) 9.60 (5.42) 35,166 .05 5.57 188.38
1995 9.60 .550 .795 1.345 (.545) 10.40 14.31 43,229 .33 5.51 24.68
1996** 10.40 .280 (.304) (.024) (.276) 10.10 (0.22) 43,306 .36* 5.46* 20.00
</TABLE>

*Annualized

**For the six months ended June 30, 1996.

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

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

3For the period May 1, 1995 (effective date) to December 31, 1995.

+Total return measures the change in value of an investment over the periods
indicated. It is not annualized except where indicated. It does not include the
maximum front-end sales charge or contingent deferred sales charge, and assumes
reinvestment of dividends and capital gains at net asset value. Prior to May 1,
1994, dividends were reinvested at the maximum 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 for Class I shares
of the Insured Fund, as discussed in Note 5, the sales charge on reinvested
dividends was eliminated.

7. FINANCIAL HIGHLIGHTS (cont.)

++During the periods indicated, Advisers agreed in advance to waive a portion of
its management fees and to make 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:

Ratio of Expenses to
Average Net Assets
Money Fund:
1991.............. .84%
1992.............. .89
1993.............. .97
1994.............. .93
1995.............. .85
1996**............ .84*

Ratio of Expenses to
Average Net Assets
Insured Income Fund:
Class I:
19911............. .84%*
1992.............. .74
1993.............. .65
1994.............. .71
1995.............. .73
1996**............ .75*
Class II:
19953............. 1.304*
1996**............ 1.28*

Ratio of Expenses to
Average Net Assets
Intermediate-Term
Income Fund:
19922............. 1.76%*
1993.............. .73
1994.............. .80
1995.............. .83
1996**............ .80*

Franklin New York Tax-Free Trust Semi-Annual Report 6/30/96.

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 2.71%,the taxable equivalent yield of 4.83% (maximum combined rate for
federal and New York state), and the taxable equivalent yield of 5.07% (maximum
combined rate for federal, New York state and New York City).

GRAPHIC MATERIAL (2)

This bar chart shows the comparison between the fund's distribution rate of
5.09%, the taxable equivalent distribution rate of 9.07% (maximum combined rate
for federal and New York state), and the taxable equivalent distribution rate of
9.53% (maximum combined rate for federal, New York state, and New York City),
for Class I Shares.

GRAPHIC MATERIAL (3)

This bar chart shows the comparison between the fund's distribution rate of
4.66%, the taxable equivalent distribution rate of 8.31% (maximum combined rate
for federal and New York state), and the taxable equivalent distribution rate of
8.73% (maximum combined rate for federal, New York state and New York City), for
Class II Shares.

GRAPHIC MATERIAL (4)

This chart shows in pie chart format the fund'securities breakdown by sector as
a percentage of the fund's total net assets.

Quality Breakdown on 6/30/96
AAA 13.3%
A 12.4%
BBB 74.3%

GRAPHIC MATERIAL (5)

This bar chart shows the comparison between the fund's distribution rate of
.34%, the taxable equivalent distribution rate of 9.52% (maximum combined rate
for federal and New York state), and the taxable equivalent distribution rate of
10.00% (maximum combined rate for federal, New York state, and New York City).