PUTNAM PREMIER INCOME TRUST, DEF 14A, 1998-04-21

PUTNAM PREMIER INCOME TRUST
DEF 14A, 1998-04-21

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SCHEDULE 14A INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
(Amendment No. )
----
Filed by the Registrant / X /
----
----
Filed by a party other than the Registrant / /
----
Check the appropriate box:
----
/ / Preliminary Proxy Statement
----
----
/ / Confidential, for Use of the Commission Only (as
---- permitted by Rule 14a -6(e) (2))

----
/ X / Definitive Proxy Statement
----
----
/ / Definitive Additional Materials
----
----
/ / Soliciting Material Pursuant to Sec. 240.14a -
11(c) or
---- Sec. 240.14a -12

PUTNAM PREMIER INCOME TRUST
(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement,
if other than Registrant)

Payment of Filing Fee (Check the appropriate box):

----
/ X / No fee required
----
----
/ / Fee computed on table below per Exchange Act Rule 14a
---- 6(i)(1) and 0 -11
<PAGE>
(1) Title of each class of securities to which
transaction applies:

(2) Aggregate number of securities to which transaction
applies:

(3) Per unit price or other underlying value of
transaction computed pursuant to Exchange Act Rule
0 -11 (set forth the amount on which the
filing fee is calculated and state how it was
determined):

(4) Proposed maximum aggregate value of transaction:

(5) Total fee paid:

----
/ / Fee paid previously with preliminary materials.
----

----
/ / Check box if any part of the fee is offset as provided
---- by Exchange Act Rule 0 -11(a)(2) and
identify the filing for which the
offsetting fee was paid previously.
Identify the previous filing by registration
statement number, or the Form or
Schedule and the date of its filing.

(1) Amount Previously Paid:

(2) Form, Schedule or Registration Statement No.:

(3) Filing Party:

(4) Date Filed:

<PAGE>
IMPORTANT INFORMATION
FOR SHAREHOLDERS IN
PUTNAM PREMIER INCOME TRUST

The document you hold in your hands contains your proxy statement
and proxy card. A proxy card is, in essence, a ballot.
When you vote your proxy, it tells us how to vote on your
behalf on important issues relating to your fund. If you
complete and sign the proxy, we'll vote it exactly as you
tell us. If you simply sign the proxy, we'll vote it in
accordance with the Trustees' recommendations on
pages .

We urge you to spend a couple of minutes with the proxy
statement, fill out your proxy card, and return it to us. When
shareholders don't return their proxies in sufficient
numbers, we have to incur the expense of follow -up
solicitations, which can cost your fund money.

We want to know how you would like to vote and welcome your
comments. Please take a few moments with these materials
and return your proxy to us.

(PUTNAM LOGO APPEARS HERE)
BOSTON * LONDON * TOKYO
<PAGE>
Table of contents

A Message from the Chairman. . . . . . . . . . . . . . . . . . . . . . . .

Notice of Shareholder Meeting. . . . . . . . . . . . . . . . . . . . . . .

Trustees' Recommendations . . . . . . . . . . . . . . . . . . . . .

Proxy card enclosed

If you have any questions, please contact us at the special toll-
free number we have set up for you (1 -800 -
225 -1581) or call your financial adviser.
<PAGE>
A Message from the Chairman

(Photograph of George Putnam appears here)

Dear Shareholder:

I am writing to you to ask for your vote on important questions
that affect your investment in your fund. While you are,
of course, welcome to join us at your fund's meeting,
most shareholders cast their vote by filling out and
signing the enclosed proxy. We are asking for your vote
on the following matters:

1. Fixing the number of Trustees and electing Trustees ;

2. Ratifying the selection by the Trustees of the independent
auditors of your fund for its current fiscal year;

3. Approving amendments to certain of your fund's fundamental
investment restrictions; and

4. Approving the elimination of certain of your fund's
fundamental investment restrictions.

Although we would like very much to have each shareholder attend
his or her fund's meeting, we realize this is not
possible. Whether or not you plan to be present, we need
your vote. We urge you to complete, sign, and return the
enclosed proxy card promptly. A postage -paid
envelope is enclosed.

I'm sure that you, like most people, lead a busy life and are
tempted to put this proxy aside for another day. Please
don't. When shareholders do not return their proxies,
their fund may have to incur the expense of
follow -up solicitations. All shareholders benefit
from the speedy return of proxies.

Your vote is important to us. We appreciate the time and
consideration that I am sure you will give this important matter.
If you have questions about the proposals, contact your
financial adviser or call a Putnam customer service
representative at
1 -800 -225 -1581.

Sincerely yours,

(signature of George Putnam)
George Putnam, Chairman

<PAGE>
PUTNAM PREMIER INCOME TRUST
Notice of Annual Meeting of Shareholders

This is the formal agenda for your fund's shareholder meeting.
It tells you what matters will be voted on and the time
and place of the meeting, if you can attend in person.

To the Shareholders of Putnam Premier Income Trust:

The Annual Meeting of Shareholders of your fund will be held on
July 9, 1998 at 2:00 p.m., Boston time, on the eighth
floor of One Post Office Square, Boston, Massachusetts,
to consider the following:

1. Fixing the number of Trustees and electing Trustees. See
page .

2. Ratifying the selection by the Trustees of the independent
auditors of your fund for its current fiscal year. See
page .

3.A. Approving an amendment to the fund's fundamental investment
restriction with respect to diversification .
See page .

3.B. Approving an amendment to the fund's fundamental investment
restriction with respect to investments in
the voting securities of a single issuer. See page .

3.C. Approving an amendment to the fund's fundamental investment
restriction with respect to making loans .
See page .

3.D. Approving an amendment to the fund's fundamental
investment restriction with respect to
investments in commodities. See page .

3.E. Approving an amendment the fund's fundamental investment
restriction with respect to investments in real estate. See
page .

4.A. Approving the elimination of the fund's fundamental
investment restriction with respect to investments in
securities of issuers in which management of the
fund or Putnam Investment Management, Inc. owns
securities. See page .

4.B. Approving the elimination of the fund's
fundamental investment restriction with
respect to margin transactions . See page
.

4.C. Approving the elimination of the fund's fundamental
investment restriction with respect to short sales. See
page .

4.D. Approving the elimination of the fund's fundamental
investment restriction with respect to pledging assets. See
page .

4.E. Approving the elimination of the fund's fundamental
investment restriction with respect to investments in
restricted securities. See page .

4.F. Approving the elimination of the fund's fundamental
investment restriction with respect to investments in oil,
gas and mineral interests. See page .

4.G. Approving the elimination of the fund's fundamental
investment restriction with respect to investing to gain
control of a company's management. See page .

5. Transacting other business as may properly come before the
meeting.

<PAGE>
By the Trustees

George Putnam, Chairman
William F. Pounds, Vice Chairman

Jameson A. Baxter John H. Mullin, III
Hans H. Estin Robert E. Patterson
John A. Hill Donald S. Perkins
Ronald J. Jackson George Putnam, III
Paul L. Joskow A.J.C. Smith
Elizabeth T. Kennan W. Thomas Stephens
Lawrence J. Lasser W. Nicholas Thorndike

WE URGE YOU TO MARK, SIGN, DATE, AND MAIL THE ENCLOSED PROXY IN
THE POSTAGE -PAID ENVELOPE PROVIDED SO YOU WILL BE
REPRESENTED AT THE MEETING.

April 20, 1998<PAGE>
Proxy Statement

This document will give you the information you need to vote on
the matters listed on the previous pages. Much of the
information in the proxy statement is required under
rules of the Securities and Exchange Commission ("SEC");
some of it is technical. If there is anything you don't
understand, please contact us at our special toll -
free number, 1 -800 -225 -1581, or call
your financial adviser.

Who is asking for my vote?

The enclosed proxy is solicited by the Trustees of Putnam Premier
Income Trust for use at the Annual Meeting of
Shareholders of the fund to be held on July 9, 1998, and,
if your fund's meeting is adjourned, at any later
meetings, for the purposes stated in the Notice of Annual
Meeting (see previous page).

How do your fund's Trustees recommend that shareholders vote on
these proposals?

The Trustees recommend that you vote

1. For fixing the number of Trustees as proposed and the
election of all nominees;

2. For ratifying the selection of Price Waterhouse LLP as the
independent auditors of your fund;

3.A. For amending the fund's fundamental investment restriction
with respect to diversification ;

3.B. For amending the fund's fundamental investment restriction
with respect to investments in the voting
securities of a single issuer;

3.C. For amending the fund's fundamental investment restriction
with respect to making loans;

3.D. For amending the fund's fundamental investment restriction
with respect to investments in commodities;

3.E. For amending the fund's fundamental investment restriction
with respect to investments in real estate;

4.A. For eliminating the fund's fundamental investment
restriction with respect to investments in securities of
issuers in which management of the fund or Putnam
Investment Management, Inc. owns securities;

4.B. For eliminating the fund's fundamental investment
restriction with respect to margin transactions;

4.C. For eliminating the fund's fundamental investment
restriction with respect to short sales;

4.D. For eliminating the fund's fundamental investment
restriction with respect to pledging assets;

4.E. For eliminating the fund's fundamental investment
restriction with respect to investments in restricted
securities;

4.F. For eliminating the fund's fundamental investment
restriction with respect to investments in oil, gas and
mineral interests; and

4.G. For eliminating the fund's fundamental investment
restriction with respect to investing to gain control of a
company's management.

Who is eligible to vote?

Shareholders of record at the close of business on April 17,
1998, are entitled to be present and to vote at the
meeting or any adjourned meeting. The Notice of Meeting,
the proxy, and the Proxy Statement are being mailed to
shareholders of record on or about April 22, 1998.

Each share is entitled to one vote. Shares represented by duly
executed proxies will be voted in accordance with
shareholders' instructions. If you sign the proxy, but
don't fill in a vote, your shares will be voted in
accordance with the Trustees' recommendations. If any
other business is brought before the meeting, your shares
will be voted at the Trustees' discretion.

The Proposals

I. ELECTION OF TRUSTEES

Who are the nominees for Trustees?

The Nominating Committee of the Trustees recommend that the
number of Trustees be fixed at sixteen and that you vote
for the election of the nominees described below. Each
nominee is currently a Trustee of your fund and of the
other Putnam funds.

The Nominating Committee of the Trustees consists solely of
Trustees who are not "interested persons" (as defined in
the Investment Company Act of 1940) of your fund or of
Putnam Investment Management, Inc., your fund's
investment manager ("Putnam Management").

Jameson Adkins Baxter
[Insert Picture]

Ms. Baxter, age 54, is the President of Baxter Associates, Inc.,
a management and financial consulting firm which she
founded in 1986. During that time, she was also a Vice
President and Principal of the Regency Group, Inc., and a
Consultant to First Boston Corporation, both of which are
investment banking firms. From 1965 to 1986, Ms. Baxter
held various positions in investment banking and
corporate finance at First Boston.

Ms. Baxter currently also serves as a Director of Banta
Corporation, Avondale Financial Corp., and ASHTA Chemicals, Inc.
She is also the Chairman Emeritus of the Board of
Trustees of Mount Holyoke College, having previously
served as Chairman for five years and as a Board member
for thirteen years; an Honorary Trustee and past
President of the Board of Trustees of the Emma Willard
School; and Chair of the Board of Governors of Good
Shepherd Hospital. Ms. Baxter is a graduate of Mount Holyoke
College.

Hans H. Estin
[Insert Picture]

Mr. Estin, age 69, is a Chartered Financial Analyst and the Vice
Chairman of North American Management Corp., a registered
investment adviser serving individual clients and their
families. Mr. Estin currently also serves as a
Corporation Member of The Schepens Eye Research
Institute; and a Trustee of New England Aquarium. He
previously served as the Chairman of the Board of
Trustees of Boston University and is currently active in various
other civic associations, including the Boys & Girls
Clubs of Boston, Inc. Mr. Estin is a graduate of Harvard
College and holds honorary doctorates from Merrimack
College and Boston University.

John A. Hill
[Insert Picture]

Mr. Hill, age 56, is the Chairman and Managing Director of First
Reserve Corporation, a registered investment adviser
investing in companies in the world -wide energy
industry on behalf of institutional investors.

Prior to acquiring First Reserve in 1983, Mr. Hill held executive
positions with several investment advisory firms and held
various positions with the Federal government, including
Associate Director of the Office of Management and Budget
and Deputy Administrator of the Federal Energy
Administration.

Mr. Hill currently also serves as a Director of Snyder Oil
Corporation, an exploration and production company which
he founded, TransMontaingne Oil Company, a refined oil
product pipeline and distribution company, Weatherford
Enterra, Inc., an oil field service company, various
private companies controlled by First Reserve
Corporation, and various First Reserve Funds. He is also
a Member of the Board of Advisors of Fund Directions. He
is currently active in various business associations,
including the Economic Club of New York, and lectures on energy
issues in the United States and Europe. Mr. Hill is a
graduate of Southern Methodist University.

Ronald J. Jackson
[Insert Picture]

Mr. Jackson, age 54, was Chairman of the Board, President and
Chief Executive Officer of Fisher -Price, Inc., a
major toy manufacturer, from 1990 to 1993. He previously
served as President and Chief Executive Officer of
Stride -Rite, Inc., a manufacturer and distributor
of footwear, from 1989 to 1990, and as President and
Chief Executive Officer of Kenner Parker Toys, Inc., a
major toy and game manufacturer, from 1985 to 1987.
Prior to that, he held various financial and marketing positions
at General Mills, Inc. from 1966 to 1985, including Vice
President, Controller and Vice President of Marketing for
Parker Brothers, a toy and game company, and President of
Talbots, a retailer and direct marketer of women's
apparel.

Mr. Jackson currently serves as a Trustee of Salem Hospital and
the Peabody Essex Museum. Mr. Jackson is a graduate of
Michigan State University Business School.

Paul L. Joskow*
[Insert Picture]

Dr. Joskow, age 50, is Professor of Economics and Management and
Head of the Department of Economics at the Massachusetts
Institute of Technology where he has been on the faculty
since 1972. From 1979 to 1980 he was a Visiting
Professor at the Kennedy School of Government at Harvard
University and from 1985 to 1986 he was a Fellow at the
Center for Advanced Study in the Behavioral Sciences at
Stanford University. He has published three books and
numerous articles on topics dealing with industrial
organization, government regulation of industry, and
competition policy.

Dr. Joskow currently serves as a Director of the New England
Electric System, a public utility holding company, State
Farm Indemnity Company, an automobile insurance company,
and the Whitehead Institute for Biomedical Research, a
non -profit research institution. He has been
President of the Yale University Council since 1993.
From 1990 to 1994 he served as Chairman of the Research
Advisory Board of the Committee for Economic Development.
Dr. Joskow is active on industry restructuring,
environmental, energy, competition, and privatization
policies and has served as an advisor to governments and
corporations around the world. He has been a consultant
to National Economic Research Associates, Inc. since 1972
on these and related issues.

Dr. Joskow is a graduate of Cornell University and Yale
University. He is a Fellow of the Econometric Society and the
American Academy of Arts and Sciences.

Elizabeth T. Kennan
[Insert Picture]

Ms. Kennan, age 60, is President Emeritus and Professor of Mount
Holyoke College. From 1978 through June 1995, she was
President of Mount Holyoke College. From 1966 to 1978,
she was on the faculty of Catholic University, where she
taught history and published numerous articles.

Ms. Kennan currently also serves as a Director of Bell Atlantic,
a telecommunications company, Northeast Utilities, the
Kentucky Home Life Insurance Companies, and Talbots. She
also serves as a Member of The Folger Shakespeare Library
Committee. She is currently active in various
educational and civic associations. Ms. Kennan is a
graduate of Mount Holyoke College, the University of
Washington and St. Hilda College at Oxford University and
holds several honorary doctorates.

Lawrence J. Lasser*
[Insert Picture]

Mr. Lasser, age 55, is a Vice President of your fund and each of
the other Putnam funds. He has been the President, Chief
Executive Officer and a Director of Putnam Investments,
Inc. and Putnam Management since 1985, having begun his
career there in 1969.

Mr. Lasser currently also serves as a Director of Marsh &
McLennan Companies, Inc., the parent company of Putnam
Management, and the United Way of Massachusetts Bay. He is a
Member of the Board of Overseers of the Museum of Fine
Arts in Boston, The Council on Foreign Relations, and a
Member of the Board of Governors and Executive Committee
at the Investment Company Institute. He is also a
Trustee of the Beth Israel\Deaconess Medical Center in
Boston and the Vineyard Open

Land Foundation. Mr. Lasser is a graduate of Antioch College and
Harvard Business School.

John H. Mullin, III
[Insert Picture]

Mr. Mullin, age 56, is Chairman and CEO of Ridgeway Farm, a
limited liability company engaged in timber activities
and farming. Prior to establishing Ridgeway Farm, Mr.
Mullin was a Managing Director of Dillon, Read & Co.
Inc., an investment banking firm.

Mr. Mullin currently serves as a Director of ACX Technologies,
Inc., a company engaged in the manufacture of industrial
ceramics and packaging products; Alex. Brown Realty,
Inc., a real estate investment company and The Liberty
Corporation, a company engaged in the life insurance and
broadcasting industries. Mr. Mullin previously served as
a Director of Dillon, Read & Co. Inc., Adolph Coors
Company, Crystal Brands, Inc., Fisher -Price, Inc.,
Mattel Inc. and The Ryland Group, Inc. Mr. Mullin is a
Trustee Emeritus of Washington & Lee University where he
served as Chairman of the Investment Committee. Mr.
Mullin is a graduate of Washington & Lee University and
The Wharton Graduate School at the University of
Pennsylvania.

Robert E. Patterson
[Insert Picture]

Mr. Patterson, age 53, is the President and Trustee of Cabot
Industrial Trust, a publicly traded real estate
investment trust. Prior to February 1998 he was
Executive Vice President and Director of Acquisitions of
Cabot Partners Limited Partnership, a registered
investment adviser which managed real estate investments
for institutional investors. Prior to 1990, he was the
Executive Vice President of Cabot, Cabot & Forbes Realty
Advisors, Inc., the predecessor company of Cabot Partners. Prior
to that, he was a Senior Vice President of the Beal
Companies, a real estate management, investment and
development company. He has also worked as an attorney
and held various positions in state government, including
the founding Executive Director of the Massachusetts
Industrial Finance Agency.

Mr. Patterson currently also serves as Chairman of the Joslin
Diabetes Center, a Trustee of Sea Education Association
and a Director of Brandywine Trust Company. Mr.
Patterson is a graduate of Harvard College and Harvard
Law School.

<PAGE>
Donald S. Perkins*
[Insert Picture]

Mr. Perkins, age 71, is the retired Chairman of the Board of
Jewel Companies, Inc., a diversified retailer, where
among other roles he served as President, Chief Executive
Officer and Chairman of the Board from 1965 to 1980. He
currently also serves as a Director of various other
public corporations, including AON Corp., an insurance
company, Cummins Engine Company, Inc., an engine and
power generator equipment manufacturer and assembler,
Current Assets L.L.C., a corporation providing financial
staffing services, LaSalle Street Fund, Inc. and LaSalle
U.S. Realty Income and Growth Fund, Inc., real estate
investment trusts, Lucent Technologies Inc., Nanophase
Technologies Inc., a producer of nano crystaline materials,
Ryerson Tull, Inc., America's largest steel service
corporation, Springs Industries, Inc., a textile
manufacturer, and Time Warner, Inc., one of the nation's
largest media conglomerates. He previously served as a
Director of several other major public corporations,
including Corning Glass Works, Eastman Kodak Company,
Firestone Tire & Rubber Company and Kmart Corporation.

Mr. Perkins currently also serves as a Trustee and Vice Chairman
of Northwestern University and as a Trustee of the
Hospital Research and Education Trust. He is currently
active in various civic and business associations,
including the Business Council and the Civic Committee of
the Commercial Club of Chicago, of which he is the
founding Chairman. Mr. Perkins is a graduate of Yale
University and Harvard Business School and holds an honorary
doctorate from Loyola University of Chicago.

William F. Pounds
[Insert Picture]

Dr. Pounds, age 70, is the Vice Chairman of your fund and of the
other Putnam funds. He has been a Professor of
Management at the Alfred P. Sloan School of Management at
the Massachusetts Institute of Technology since 1961 and
served as Dean of that School from 1966 to 1980. He
previously served as Senior Advisor to the Rockefeller
Family and Associates and was a past Chairman of
Rockefeller & Co., Inc., a registered investment adviser which
manages Rockefeller family assets, and Rockefeller Trust
Company.

Dr. Pounds currently also serves as a Director of IDEXX
Laboratories, Inc., Management Sciences For Health, Inc. and Sun
Company, Inc. He is also a Trustee of the Museum of Fine
Arts in Boston and a Fellow of The American Academy of
Arts and Sciences. He previously served as a Director of
Fisher -Price, Inc. and General Mills, Inc.,
PerSeptive Biosystems, Inc., and an Overseer of WGBH Educational
Foundation. Dr. Pounds is a graduate of Carnegie -Mellon
University.

George Putnam*
[Insert Picture]

Mr. Putnam, age 71, is the Chairman and President of your fund
and each of the other Putnam funds. He is the Chairman
and a Director of Putnam Management and Putnam Mutual
Funds Corp. and a Director of Marsh & McLennan, their
parent company. Mr. Putnam is the son of the founder of
the Putnam funds and Putnam Management and has been
employed in various capacities by Putnam Management since
1951, including Chief Executive Officer from 1961 to
1973. He is a former Overseer and Treasurer of Harvard
University; a past Chairman of the Harvard Management Company;
and a Trustee Emeritus of Wellesley College and Bradford
College.

Mr. Putnam currently also serves as a Director of Freeport Copper
and Gold, Inc., McMoRan Oil and Gas, Inc., a mining and
natural resources company and Houghton Mifflin Company, a
major publishing company. He is also a Trustee of
Massachusetts General Hospital, McLean Hospital, Vincent
Memorial Hospital, WGBH Educational Foundation and the
Museum of Fine Arts in Boston; the New England Aquarium;
an Overseer of the Museum of Science in Boston,
Northeastern University and College of the
Atlantic; and a Fellow of The American Academy of Arts and
Sciences. Mr. Putnam is a graduate of Harvard College
and Harvard Business School and holds honorary doctorates
from Bates College and Harvard University.

George Putnam, III*
[Insert Picture]

Mr. Putnam, age 46, is the President of New Generation Research,
Inc., a publisher of financial advisory and other
research services relating to bankrupt and distressed
companies, and New Generation Advisers, Inc., a
registered investment adviser which provides advice to
private funds specializing in investments in such
companies. Prior to founding New Generation in 1985, Mr.
Putnam was an attorney with the Philadelphia law firm Dechert
Price & Rhoads.

Mr. Putnam currently also serves as a Director of the
Massachusetts Audubon Society and The Boston Family Office,
L.L.C., a registered investment advisor that provides
financial advice to individuals and families. He is also
a Trustee of the Sea Education Association and St. Mark's
School and an Overseer of the New England Medical Center.
Mr. Putnam is a graduate of Harvard College, Harvard
Business School and Harvard Law School.

A.J.C. Smith*
[Insert Picture]

Mr. Smith, age 64, is the Chairman and Chief Executive Officer of
Marsh & McLennan Companies, Inc. He has been employed by
Marsh & McLennan and related companies in various
capacities since 1961. Mr. Smith is a Director of the
Trident Corp., and he also serves as a Trustee of the
Carnegie Hall Society, the Central Park Conservancy, the
Educational Broadcasting Corporation, the Economic Club
of New York, the U.S. Chamber of Commerce, and is a
Founder of the Museum of Scotland Society. He was educated in
Scotland and is a Fellow of the Faculty of Actuaries in
Edinburgh, a Fellow of the Canadian Institute of
Actuaries, a Fellow of the Conference of Actuaries, an
Associate of the Society of Actuaries, a Member of the
American Academy of Actuaries, the International
Actuarial Association and the International Association
of Consulting Actuaries.

W. Thomas Stephens
[Insert Picture]

Mr. Stephens, age 55, is the President and Chief Executive
Officer of MacMillan Bloedel Ltd. Mr. Stephens retired
in 1996 as Chairman of the Board of Directors, President
and Chief Executive Officer of Johns Manville
Corporation, an insulation and roofing systems company.
He also served as Executive Vice President and Chief
Financial Officer of Manville and in total had 27 years
of experience with Manville and its predecessor
companies.

Mr. Stephens serves as a Director for Qwest Communications, a
fiber optics manufacturer and New Century Energies, a
public utility company. Mr. Stephens is a Member of the
Colorado Forum and Trustee of the Denver Art Museum and
The University of Arkansas Advisory Council. He is
currently a Visiting Professor at the Graduate School of
Business at the University of Colorado. Mr. Stephens is
a graduate of the University of Arkansas.

W. Nicholas Thorndike**
[Insert Picture]

Mr. Thorndike, age 65, serves as a Director of various
corporations and charitable organizations, including Data General
Corporation, a computer and high technology company,
Bradley Real Estate, Inc., a real estate investment firm,
Providence Journal Co., a newspaper publisher, and
Courier Corporation, a book binding and printing company.
He is also a Trustee of Cabot Industrial Trust, Eastern
Utilities Associates, Massachusetts General Hospital,
where he previously served as chairman and president, and
Northeastern University.

Prior to December 1988, he was the Chairman of the Board and
Managing Partner of Wellington Management
Company/Thorndike, Doran, Paine & Lewis, a registered
investment adviser which manages mutual funds and
institutional assets. He also previously served as a
Trustee of the Wellington Group of Funds (now The Vanguard
Group) and was the Chairman and a Director of Ivest Fund,
Inc. Mr. Thorndike is a graduate of Harvard College.

----------------------------

* Nominees who are or may be deemed to be "interested persons"
(as defined in the Investment Company Act of 1940) of
your fund, Putnam Management, and Putnam Mutual
Funds Corp. ("Putnam Mutual Funds"), the principal
underwriter for all the open -end Putnam funds
and an affiliate of Putnam Management. Messrs.
Putnam, Lasser, and Smith are deemed "interested
persons" by virtue of their positions as officers or
shareholders of your fund, or directors of Putnam
Management, Putnam Mutual Funds, or Marsh & McLennan
Companies, Inc., the parent company of Putnam Management and
Putnam Mutual Funds. Mr. George Putnam, III, Mr.
Putnam's son, is also an "interested person" of your
fund, Putnam Management, and Putnam Mutual Funds.
Mr. Perkins may be deemed to be an "interested
person" of your fund because of his service as a
director of a certain publicly held company that
includes registered broker -dealer firms among its
subsidiaries. Neither your fund nor any of the
other Putnam funds currently engages in any
transactions with such firms except that certain of
such firms act as dealers in the retail sale of
shares of certain Putnam funds in the ordinary
course of their business. Mr. Joskow is not
currently an "interested person" of your fund but could be
deemed by the Securities and Exchange Commission to
be an "interested person" on account of his
consulting relationship with National Economic
Research Associates, Inc. which is a wholly -
owned subsidiary of Marsh & McLennan Companies, Inc.
The balance of the nominees are not "interested
persons."

** In February 1994 Mr. Thorndike accepted appointment as a
successor trustee of certain private trusts in which
he has no beneficial interest. At that time he also
became Chairman of the Board of two privately owned
corporations controlled by such trusts, serving in
that capacity until October 1994. These
corporations filed voluntary petitions for relief
under Chapter 11 of the U.S. Bankruptcy Code in
August 1994.

Except as indicated above, the principal occupations and business
experience of the nominees for the last five years have
been with the employers indicated, although in some cases
they have held different positions with those employers.
Except for Messrs. Joskow, Mullin and Stephens, all the
nominees were elected by the shareholders in July 1997.
Mr. Stephens was elected by the other Trustees in
September 1997 and Messrs. Joskow and Mullin were elected
by the other Trustees in November 1997. The 16 nominees
for election as Trustees at the shareholder meeting of your fund
who receive the greatest number of votes will be elected
Trustees of your fund. The Trustees serve until their
successors are elected and qualified. Each of the
nominees has agreed to serve as a Trustee if elected. If
any of the nominees is unavailable for election at the
time of the meeting, which is not anticipated, the
Trustees may vote for other nominees at their discretion,
or the Trustees may fix the number of Trustees at less
than 16 for your fund.

What are the Trustees' responsibilities?

Your fund's Trustees are responsible for the general oversight of
your fund's business and for assuring that your fund is
managed in the best interests of its shareholders. The
Trustees periodically review your fund's investment
performance as well as the quality of other services
provided to your fund and its shareholders by Putnam
Management and its affiliates, including administration,
custody and investor servicing. At least
annually, the Trustees review the fees paid to Putnam
Management and its affiliates for these services and the overall
level of your fund's operating expenses. In carrying out
these responsibilities, the Trustees are assisted by an
independent administrative staff and by your fund's
auditors and legal counsel, which are selected by the
Trustees and are independent of Putnam Management and its
affiliates.

Do the Trustees have a stake in your fund?

The Trustees believe it is important that each Trustee have a
significant investment in the Putnam funds. The Trustees
allocate their investments among the more than 101 Putnam
funds based on their own investment needs. The Trustees'
aggregate investments in the Putnam funds total over
$68 million. The table below lists each
Trustee's current investments in the fund and in the
Putnam funds as a group based on beneficial ownership.
Except as otherwise noted, each Trustee has sole voting power and
sole investment power with respect to his or her shares.
<PAGE>
Share Ownership by Trustees
<TABLE> <CAPTION>
<S> <C> <C> <C>
Year first Number of
elected as Number of shares of
Trustee of shares of the all Putnam
the Putnam fund owned funds owned
Trustees funds as of 2/13/98 as of 2/13/98 (1)
-----------------------------------------------------------------------------------
Jameson A. Baxter 1994 134 114,841
Hans H. Estin 1972 741 31,963
John A. Hill 1985 100 151,223
Ronald J. Jackson 1996 200 (2) 135,443
Paul L. Joskow(3) 1997 100 19,760
Elizabeth T. Kennan 1992 133 (4) 24,181
Lawrence J. Lasser 1992 100 608,433
John H. Mullin, III(3) 1997 100 30,905
Robert E. Patterson 1984 500 67,608
Donald S. Perkins 1982 2,760 193,389
William F. Pounds 1971 500 338,534
George Putnam 1957 2,607 1,973,846
George Putnam, III 1984 500 379,012
A.J.C. Smith 1986 200 (5) 58,643
W. Thomas Stephens(6) 1997 100 172,773
W. Nicholas Thorndike 1992 169 83,408
-----------------------------------------------------------------------------------
- -------
(1) These holdings do not include shares of Putnam money market funds.
(2) Mr. Jackson has shared investment power and shared voting power with respect to such
shares.
(3) Elected as a Trustee in November 1997.
(4) Mrs. Kennan is the custodian of a trust which owns all of these shares and in which
she has no economic interest.
(5) Mr. Smith has shared investment power and shared voting power with respect to such
shares.
(6) Elected as a Trustee in September 1997.
</TABLE>
As of February 13, 1998, the Trustees and officers of the fund owned a total
of 8,944 shares of the fund, comprising less than 1% of its
outstanding shares on that date.
What are some of the ways in which the Trustees represent
shareholder interests?

The Trustees believe that, as substantial investors in the Putnam
funds, their interests are closely aligned with those of
individual shareholders. Among other ways, the Trustees
seek to represent shareholder interests:

by carefully reviewing your fund's investment
performance on an individual basis with your fund's
managers;

by also carefully reviewing the quality of the various
other services provided to the funds and their
shareholders by Putnam Management and its
affiliates;

by discussing with senior management of Putnam
Management steps being taken to address any performance
deficiencies;

by reviewing the fees paid to Putnam Management to
ensure that such fees remain reasonable and
competitive with those of other mutual funds,
while at the same time providing Putnam
Management sufficient resources to continue to
provide high quality services in the future;

by monitoring potential conflicts between the funds and
Putnam Management and its affiliates to ensure
that the funds continue to be managed in the
best interests of their shareholders; and

by also monitoring potential conflicts among funds to
ensure that shareholders continue to realize
the benefits of participation in a large and
diverse family of funds.

How often do the Trustees meet?

The Trustees meet each month (except August) over a two -
day period to review the operations of your fund and of
the other Putnam funds. A portion of these meetings is
devoted to meetings of various Committees of the board
which focus on particular matters. These currently
include: the Committee of Independent Trustees, which
conducts an annual review of all contractual arrangements
with Putnam Management and its affiliates; the Contract
Committee, which reviews such matters on an interim basis
during the course of the year; the Communication and
Service Committee, which reviews the quality of services provided
by your fund's investor servicing agent, and custodian
; the Pricing, Brokerage and Special Investments
Committee, which reviews matters relating to valuation of
securities, best execution, brokerage costs and allocations and
new investment techniques; the Audit Committee, which
reviews accounting policies and the adequacy of internal
controls and supervises the engagement of the funds'
auditors; the Compensation, Administration and Legal
Affairs Committee, which reviews the compensation of the
Trustees and their administrative staff and supervises
the engagement of the funds' independent counsel; the
Nominating Committee, which is responsible for selecting
nominees for election as Trustees and the Closed -end
Fund Committee, which is responsible for reviewing
special issues applicable to closed -end funds such
as your fund.

Each Trustee generally attends at least two formal committee
meetings during each regular meeting of the Trustees.
During 1997, the average Trustee participated in
approximately 40 committee and board meetings. In
addition, the Trustees meet in small groups with Chief
Investment Officers and Portfolio Managers to review
recent performance and the current investment climate for
selected funds. These meetings ensure that each fund's
performance is reviewed in detail at least twice a year.
The Committee of Independent Trustees and the Contract Committee
typically meet on several additional occasions during the
year to carry out their responsibilities. Other
Committees, including an Executive Committee, may also
meet on special occasions as the need arises.

What are the Trustees paid for their services?

Each Trustee receives a fee for his or her services. Each
Trustee also receives fees for serving as Trustee of the
other Putnam funds. The Trustees periodically review
their fees to assure that such fees continue to be
appropriate in light of their responsibilities as well as
in relation to fees paid to trustees of other mutual fund
complexes. The Compensation Committee, which consists
solely of Trustees not affiliated with Putnam Management,
estimates that Committee and Trustee meeting time
together with the appropriate preparation requires the
equivalent of at least three business days per Trustee meeting.
The following table shows the fees paid to each Trustee
by the fund for fiscal 1997 and the fees paid to each
Trustee by all of the Putnam funds during calendar year
1997:<PAGE>
COMPENSATION TABLE
<TABLE> <CAPTION>
<S> <C> <C> <C> <C>
Pension or Estimated Total
Aggregate retirement annual benefits compensation
compensation benefits accrued from all from all
from the as part of Putnam funds Putnam
Trustees fund(1) fund expenses upon retirement(2) funds(3)

Jameson A. Baxter $1,890 $ 521 $87,500 $176,000(4)
Hans H. Estin 1,873 1,743 87,500 175,000
John A. Hill(4) 1,882 651 87,500 175,000
Ronald J. Jackson(4) 1,890 73 87,500 176,000
Paul L. Joskow (5) -- -- 87,500 25,500
Elizabeth T. Kennan 1,874 1,148 87,500 174,000
Lawrence J. Lasser 1,859 861 87,500 172,000
John H. Mullin, III (5) -- -- 87,500 25,500
Robert E. Patterson 1,909 522 87,500 176,000
Donald S. Perkins 1,890 1,897 87,500 176,000
William F. Pounds (6) 2,120 1,773 98,000 201,000
George Putnam 1,882 2,000 87,500 175,000
George Putnam, III 1,875 343 87,500 174,000
A.J.C. Smith 1,841 1,166 87,500 170,000
W. Thomas Stephens(7) -- -- 87,500 53,000(4)
W. Nicholas Thorndike 1,904 1,649 87,500 176,000

(1) Includes an annual retainer and an attendance fee for each meeting attended.
(2) Assumes that each Trustee retires at the normal retirement date. Estimated benefits for
each Trustee are based on Trustee fee rates in effect during calendar 1997.
(3) As of December 31, 1997, there were 101 funds in the Putnam family.
(4) Includes compensation deferred pursuant to a Trustee Compensation Deferral Plan.
(5) Elected as a Trustee in November 1997. The total amounts of deferred compensation payable
by the fund to Mr. Hill and Mr. Jackson as of July 31, 1997 were $6,710 and $2,662,
respectively, including income earned on such amounts.
(6) Includes additional compensation for service as Vice Chairman of the Putnam funds.
(7) Elected as a Trustee in September 1997.
</TABLE>
Under a Retirement Plan for Trustees of the Putnam funds (the
"Plan"), each Trustee who retires with at least five years
of service as a Trustee of the funds is entitled to
receive an annual retirement benefit equal to one -
half of the average annual compensation paid to such
Trustee for the last three years of service prior to
retirement. This retirement benefit is payable during a
Trustee's lifetime, beginning the year following
retirement, for a number of years equal to such Trustee's years
of service. A death benefit is also available under the
Plan which assures that the Trustee and his or her
beneficiaries will receive benefit payments for the
lesser of an aggregate period of (i) ten years or (ii)
such Trustee's total years of service.

The Plan Administrator (a committee comprised of Trustees that
are not "interested persons" of the fund, as defined in
the Investment Company Act of 1940) may terminate or
amend the Plan at any time, but no termination or
amendment will result in a reduction in the amount of
benefits (i) currently being paid to a Trustee at the
time of such termination or amendment, or (ii) to which a
current Trustee would have been entitled to receive had
he or she retired immediately prior to such termination or
amendment.

For additional information about your fund, including further
information about its Trustees and officers, please see
"Fund Information," on page .

Putnam Investments

Putnam Investment Management, Inc. and its affiliate, Putnam
Fiduciary Trust Company, your fund's investor servicing
agent and custodian, are owned by Putnam Investments,
Inc., One Post Office Square, Boston, Massachusetts
02109, a holding company that is in turn wholly owned by
Marsh & McLennan Companies, Inc., which has executive
offices at 1166 Avenue of the Americas, New York, New
York 10036. Marsh & McLennan Companies, Inc. and its operating
subsidiaries are professional services firms with
insurance and reinsurance brokerage, consulting, and
investment management businesses.

2. RATIFICATION OF INDEPENDENT AUDITORS

Price Waterhouse LLP, 160 Federal Street, Boston, Massachusetts,
independent accountants, has been selected by the
Trustees as the independent auditor of your fund for the
current fiscal year. Among the country's preeminent
accounting firms, this firm also serves as the auditor
for approximately half of the other funds in the Putnam
family. It was selected primarily on the basis of its
expertise as auditors of investment companies, the quality of
its audit services, and the competitiveness of its fees.

In November 1997 the partners of Coopers & Lybrand L.L.P. and
Price Waterhouse LLP voted to approve the merger of their
practices worldwide. Coopers & Lybrand L.L.P. and Price
Waterhouse expect the merger, which is subject to
approval by the regulators, to become effective in mid
1998.

PROPOSALS 3 AND 4

As described in the following proposals, the Trustees are
recommending that shareholders approve a number of changes to
your fund's fundamental investment restrictions,
including the elimination of certain restrictions. The
purpose of these proposed changes is to standardize the
investment restrictions of all of the Putnam funds,
including your fund where appropriate, and in certain
cases to increase the fund's investment flexibility. By
having standard investment restrictions for all Putnam
funds, Putnam Management will be able to more easily
monitor each fund's compliance with its investment policies.
Many of these changes will have little practical effect
on the way the fund is managed given the fund's current
investment objective and policies.

The adoption of any of these proposals is not contingent on the
adoption of any other proposal.

3.A. AMENDING THE FUND'S FUNDAMENTAL INVESTMENT RESTRICTION WITH
RESPECT TO DIVERSIFICATION

The Trustees are recommending that the fund's fundamental
investment restriction with respect to the diversification of its
investments be revised to reflect the standard
restriction used by other Putnam funds and to grant the fund the
maximum investment flexibility permitted under
applicable Internal Revenue Code of 1986 (the "Code")
rules. The fund's current investment restriction states that the
fund may not:

"Invest in securities of any issuer if, immediately after
such investment, more than 5% of the total assets of the
fund (taken at current value) would be invested in the
securities of such issuer; provided that this limitation
does not apply to securities of the U.S. government or its
agencies or instrumentalities, and provided further that,
with respect to 50% of the fund's total assets, the fund may
invest up to 25% of its total assets in debt obligations
issued by, or backed by the credit of, any foreign
government, its agencies and instrumentalities."

The proposed amended fundamental investment restriction is set
forth below.

"The fund may not ...

With respect to 50% of its total assets, invest in the
securities of any issuer if, immediately after such
investment, more than 5% of the total assets of the fund
(taken at current value) would be invested in the securities
of such issuer; provided that this limitation does not apply
to obligations issued or guaranteed as to interest or
principal by the U.S. government or its agencies or
instrumentalities."

If the proposal is approved, the fund will, with respect to 50%
of its assets, be able to invest in any number of issuers subject
only to the Code provision generally restricting investment by
the fund to not more than 25% of its total assets in any one
issuer (other than U.S. government securities or the securities
of other regulated investment companies). The amended
restriction would continue to exclude from its limitations U.S.
government securities, and would clarify, consistent with the
definitions under the Code and the Investment Company Act of 1940
(the "1940 Act"), that U.S. government securities include
obligations issued or guaranteed as to interest or principal by
the U.S. government or its agencies or instrumentalities. The
fund will continue to be able to invest up to 25% of its assets
in debt obligations issued by, or backed by the credit of, any
foreign government or its agencies or instrumentalities, to the
extent consistent with the Code requirements.

Putnam Management believes that this enhanced investment
flexibility could assist the fund in achieving its investment
objective. However, during times when Putnam Management invests
a higher percentage of the fund s assets in one or more issuers,
the value of the fund s shares may fluctuate more widely than the
value of shares of a portfolio investing in a larger number of
issuers.

Required vote. Approval of this proposal requires the
affirmative vote of the lesser of (1) more than 50% of the
outstanding shares of the fund, or (2) 67% or more of the shares
of the fund present at the meeting if more than 50% of the
outstanding shares of the fund are present at the meeting in
person or by proxy.

3.B. AMENDING THE FUND'S FUNDAMENTAL INVESTMENT RESTRICTION WITH
RESPECT TO INVESTMENTS IN THE VOTING SECURITIES OF A SINGLE
ISSUER

The Trustees are recommending that the fund's fundamental
investment restriction with respect to investments in the voting
securities of a single issuer be revised to reflect the standard
restriction used by other Putnam funds and to grant the fund the
maximum flexibility permitted under the Code. Under the Code, a
nondiversified fund such as the fund may
not invest, with respect to 50% of its total assets, in
the securities of an issuer if as a result it would own
more than 10% of the outstanding voting securities of that
issuer. The remaining 50% of the fund's total assets is
not subject to this limitation. The fund's current
investment restriction, which is more restrictive than
applicable tax rules, states that the fund may not:

"Acquire more than 10% of the voting securities of any
issuer."

The proposed amended fundamental investment restriction is set
forth below.

"The fund may not ...

With respect to 50% of its total assets, acquire more than
10% of the outstanding voting securities of any
issuer."

The amendment enables the fund to purchase more than 10% of the
voting securities of an issuer with respect to 50% of the
fund's total assets. Since the fund invests primarily in
fixed -income securities, which are not typically
voting securities, this proposal will have little
practical effect on the fund. Nevertheless, Putnam
Management believes it would be in the best interest of
the fund to conform the policy to provide the fund with
maximum flexibility should circumstances change.

To the extent the fund individually or with other funds and
accounts managed by Putnam Management or its affiliates
were to own all or a major portion of the outstanding
voting securities of a particular issuer, under adverse
market or economic conditions or in the event of adverse
changes in the financial condition of the issuer the fund
could find it more difficult to sell these voting
securities when Putnam Management believes it advisable
to do so, or may be able to sell the securities only at
prices significantly lower than if they were more widely held.

Required vote. Approval of this proposal requires the
affirmative vote of the lesser of (1) more than 50% of the
outstanding shares of the fund, or (2) 67% or more of the
shares of the fund present at the meeting if more than
50% of the outstanding shares of the fund are present at
the meeting in person or by proxy.

3.C. AMENDING THE FUND'S FUNDAMENTAL INVESTMENT RESTRICTION WITH
RESPECT TO MAKING LOANS

The Trustees are recommending that the fund's fundamental
investment restriction with respect to making loans be revised to

reflect the standard restriction expected to be used by
other Putnam funds and to clarify that the fund is
permitted to participate in a proposed "interfund
lending program ." The current restriction states
that the fund may not:

"Make loans, except by purchase of debt obligations in which
the fund may invest consistent with its
investment policies, by entering into repurchase
agreements with respect to not more than 25% of its
total assets (taken at current value), or through
the lending of its portfolio securities with respect
to not more than 25% of its total assets."

The proposed amended fundamental investment restriction is set
forth below.

"The fund may not ...

Make loans, except by purchase of debt obligations in which
the fund may invest consistent with its investment
policies (including without limitation debt
obligations issued by other Putnam funds), by
entering into repurchase agreements, or by lending
its portfolio securities."

If the proposal is approved, your fund would be able to
participate in an interfund lending
program that would allow the fund, through a
master loan agreement, from time to time to lend available cash
to other Putnam funds to meet such funds' temporary or
emergency borrowing needs. By the terms of the program, a
borrowing fund would be obligated to repay a lending fund. As
such, the lending fund could be viewed in such a circumstance as
effectively "purchasing" a debt obligation of such a borrowing
fund. The fund would only make loans under the
program if it could receive an interest rate higher than those
available for repurchase agreements. There is a risk
that the fund could experience a delay in obtaining
prompt repayment of a loan and, unlike repurchase
agreements, the fund would not necessarily have received
collateral for its loan. A delay in obtaining prompt
payment could cause the fund to miss an investment
opportunity or to incur costs to borrow money to replace
the delayed payment.

Since the Putnam funds may be considered affiliated parties,
interfund lending may be prohibited by the 1940 Act and
would be implemented only upon receipt of an exemptive
order of the Securities and Exchange Commission.

Required vote. Approval of this proposal requires the
affirmative vote of the lesser of (1) more than 50% of the
outstanding shares of the fund, or (2) 67% or more of the
shares of the fund present at the meeting if more than
50% of the outstanding shares of the fund are present at
the meeting in person or by proxy.

3.D. AMENDING THE FUND'S FUNDAMENTAL INVESTMENT RESTRICTION WITH
RESPECT TO INVESTMENTS IN COMMODITIES

The Trustees are recommending that the fund's fundamental
investment restriction with respect to investments in commodities
be revised to reflect the standard restriction used by
other Putnam funds. The current restriction states that
the fund may not:

"Purchase or sell commodities or commodity contracts, except
that it may purchase and sell financial
futures contracts and related options, and futures,
forward contracts and options on foreign
currencies."

The proposed amended fundamental restriction is set forth below:

"The fund may not ...

Purchase or sell commodities or commodity contracts, except
that the fund may purchase and sell
financial futures contracts and options and may
enter into foreign exchange contracts and other
financial transactions not involving physical
commodities."

Under the revised restriction, the fund will continue to be able
to engage in a variety of transactions involving the use
of financial futures and options, as well as various
other financial transactions to the extent consistent
with its investment objective and policies. Although the
fund may already engage in many of these activities,
Putnam Management believes that the revised language more
clearly sets forth the fund's policy. The addition of
financial transactions not involving physical commodities
is intended to give the fund maximum flexibility to
invest in a variety of financial instruments that could
technically be considered commodities, but which do not involve
the direct purchase or sale of physical commodities,
which is the intended focus of the restriction.

Foreign exchange transactions are subject to many of the risks
associated with futures and options. However, given the
fund's investment policies, Putnam Management currently
has no present intention of engaging in such transactions
on behalf of the fund.

Required vote. Approval of this proposal requires the
affirmative vote of the lesser of (1) more than 50% of the
outstanding shares of the fund, or (2) 67% or more of the
shares of the fund present at the meeting if more than
50% of the outstanding shares of the fund are present at
the meeting in person or by proxy.

3.E. AMENDING THE FUND'S FUNDAMENTAL INVESTMENT RESTRICTION WITH
RESPECT TO INVESTMENTS IN REAL ESTATE

The Trustees are recommending that the fund's
fundamental investment restriction with respect to
investments in real estate be revised to reflect the
standard restriction used by other Putnam funds and to
grant the fund greater flexibility. The current
restriction states that the fund may not:

"Purchase or sell real estate, although it may purchase
securities of issuers which deal in real estate,
securities which are secured by interests in real
estate and securities representing interests in real
estate."

The proposed amended fundamental investment restriction is set
forth below.

"The fund may not ...

Purchase or sell real estate, although it may purchase
securities of issuers which deal in real
estate, securities which are secured by
interests in real estate, and securities which
represent interests in real estate, and it may
acquire and dispose of real estate or interests
in real estate acquired through the exercise of
its rights as a holder of debt obligations
secured by real estate or interests therein."

If the proposal is approved, the fund would be able to own real
estate directly as a result of the exercise of its rights
in connection with debt obligations it owns. In such
cases, the ability to acquire and dispose of real estate
may serve to protect the fund during times where an
issuer of debt securities is unable to meet its
obligations. Putnam Management believes that this
enhanced flexibility could assist the fund in achieving
its investment objective.

To the extent the fund holds real estate -related
securities, it will be subject to the risks associated
with the real estate market. These risks may include
declines in the value of real estate, changes in general
or local economic conditions, overbuilding, difficulty in
completing construction, increased competition, changes
in zoning laws, increases in property taxes and operating
expenses, and variations in rental income. Generally,
increases in interest rates will increase the costs of
obtaining financing, which may result in a decrease in the value
of such investments.

In addition, in order to enforce its rights in the event of a
default of an issuer of these securities, the fund may be
required to participate in various legal proceedings or
take possession of and manage assets securing the
issuer's obligations. This could increase the fund's
operating expenses and adversely affect the fund's net
asset value.

Required vote. Approval of this proposal requires the
affirmative vote of the lesser of (1) more than 50% of the
outstanding shares of the fund, or (2) 67% or more of the
shares of the fund present at the meeting if more than
50% of the outstanding shares of the fund are present at
the meeting in person or by proxy.

4.A. ELIMINATING THE FUND'S FUNDAMENTAL INVESTMENT RESTRICTION
WITH RESPECT TO INVESTMENTS IN SECURITIES OF ISSUERS
IN WHICH MANAGEMENT OF THE FUND OR PUTNAM INVESTMENT
MANAGEMENT, INC. OWNS SECURITIES

The Trustees are recommending eliminating the fund's fundamental
investment restriction which prevents the fund from
investing in the securities of issuers in which
management of the fund or Putnam Management owns a
certain percentage of securities. The restriction states
that the fund may not:

"Invest in securities of any issuer, if, to the knowledge of
the Fund, officers and Trustees of the fund
and officers and directors of Putnam who
beneficially own more than 0.5% of the securities of
that issuer together own more than 5% of such
securities."

The fund originally adopted this restriction to comply with state
securities law requirements which are no longer
applicable to the fund. Since the 1940 Act does not
require the fund to have such a restriction, Putnam
Management recommended that this restriction be
eliminated.

If this proposal is approved, the fund may invest in the
securities of any issuer without regard to ownership in such
issuer by management of the fund or Putnam Management,
except to the extent prohibited by the fund's investment
policies or the 1940 Act. Putnam Management believes
that this enhanced flexibility could assist the fund in
meeting its investment objective.
Required vote. Approval of this proposal requires the
affirmative vote of the lesser of (1) more than 50% of the
outstanding shares of the fund, or (2) 67% or more of the
shares of the fund present at the meeting if more than
50% of the outstanding shares of the fund are present at
the meeting in person or by proxy.

<PAGE>

4.B. ELIMINATING THE FUND'S FUNDAMENTAL INVESTMENT RESTRICTION
WITH RESPECT TO MARGIN TRANSACTIONS

The Trustees are recommending that the fund's fundamental
investment restriction with respect to margin
transactions be eliminated. "Margin transactions" involve the
purchase of securities with money borrowed from a broker, with
cash or eligible securities being used as collateral against the
loan. The current restriction states that the fund may not:

"Purchase securities on margin, except such short term
credits as may be necessary for the clearance of purchases
and sales of securities, and except that it may make margin
payments in connection with transactions in futures
contracts and options."

The fund originally adopted this restriction to comply with state
securities law requirements which are no longer applicable to the
fund. Since the 1940 Act does not require the fund to have such
a restriction, Putnam Management recommended that this
restriction be eliminated.

If this proposal is approved, the fund would have no formal
restriction with respect to engaging in margin transactions.
However, the fund's potential use of margin transactions beyond
transactions in financial futures and options and for the
clearance of purchases and sales of securities, including the use
of margin in ordinary securities transactions, is currently
limited by SEC guidelines which prohibit margin transactions
because they create senior securities. The fund's ability to
engage in margin transactions is also limited by its investment
policies, which generally permit the fund to borrow money only in
limited circumstances.

4.C. ELIMINATING THE FUND'S FUNDAMENTAL INVESTMENT RESTRICTION
WITH RESPECT TO SHORT SALES

The Trustees are recommending that the fund's fundamental
investment restriction with respect to short sales be eliminated.
The current restriction states that the fund may not:

"Make short sales of securities or maintain a short position
for the account of the fund unless at all
times when a short position is open it owns an equal
amount of such securities or owns securities which,
without payment of any further consideration, are
convertible into or exchangeable for securities of
the same issue as, and in equal amount to, the
securities sold short."

If this proposal is approved, the fund would be able to engage in
short sales other than those "against the box" (in which
the fund owns or has the right to acquire at no added
cost securities identical to those sold short). However,
Putnam Management does not currently intend to engage in
short sales on behalf of the fund.

In a typical short sale, the fund would borrow securities from a
broker that it anticipates will decline in value in order
to sell to a third party. The fund becomes obligated to
return securities of the same issue and quantity at some
future date, and it realizes a loss to the extent the
securities increase in value and a profit to the extent
the securities decline in value (after including any
associated costs). Since the value of a particular
security can increase without limit, the fund could
potentially realize losses with respect to short sales which are
not "against the box" that are significantly greater than
the value of the securities at the time they are sold
short.

Required vote. Approval of this proposal requires the
affirmative vote of the lesser of (1) more than 50% of the
outstanding shares of the fund, or (2) 67% or more of the
shares of the fund present at the meeting if more than
50% of the outstanding shares of the fund are present at
the meeting in person or by proxy.

4.D. ELIMINATING THE FUND'S FUNDAMENTAL INVESTMENT RESTRICTION
WITH RESPECT TO PLEDGING ASSETS

The Trustees are recommending that the fund's fundamental
investment restriction which limits the fund's ability to pledge
its assets be eliminated. The current restriction states
that the fund may not:

"Pledge, hypothecate, mortgage or otherwise encumber its
assets in excess of 15% of its total assets (taken
at current value) and then only to secure borrowings
permitted by restriction 1 above. Collateral
arrangements with respect to margin for futures
contracts and options are not deemed to be pledges
or other encumbrances for purposes of this
restriction." [Restriction 1 allows the fund
to borrow money in amounts of up to 15% of the value
of its total assets for temporary or emergency
purposes.]

This proposal would remove all restrictions on the fund's ability
to pledge assets. Putnam Management recommended the
proposal to the Trustees because it believes that the
fund's current limits on pledging may conflict with the
fund's ability to borrow money for temporary or emergency
purposes. This conflict arises because lenders may
require borrowers such as the fund to pledge assets in
order to collateralize the amount borrowed. Often, these
collateral requirements are for amounts larger than the
principal amount of the loan. If the fund needed to borrow the
maximum amount permitted by it policies (currently 15% of
its total assets), it might be possible that a bank would
require collateral in excess of 15% of the fund's total
assets. Therefore, the limit on pledging assets may have
the effect of reducing the amount that the fund may
borrow in these situations.

Pledging assets does entail certain risks. To the extent that
the fund pledges its assets, the fund may have less
flexibility in liquidating its assets. If a large
portion of the fund's assets were involved, the fund's
ability to meet other obligations could be delayed.

Required vote. Approval of this proposal requires the
affirmative vote of the lesser of (1) more than 50% of the
outstanding shares of the fund, or (2) 67% or more of the
shares of the fund present at the meeting if more than
50% of the outstanding shares of the fund are present at
the meeting in person or by proxy.

4.E. ELIMINATING THE FUND'S FUNDAMENTAL INVESTMENT RESTRICTION
WITH RESPECT TO INVESTMENTS IN RESTRICTED SECURITIES

The Trustees are recommending that the fund's fundamental
investment restriction which limits the fund's investments in
securities subject to restrictions on resale, which are
known as "restricted securities," be eliminated. The
current fundamental investment restriction states that
the fund may not:

"Purchase securities restricted as to resale if, as a
result, such investments would exceed 10% of the
value of the fund's net assets."

Putnam Management recommended that this restriction be eliminated
because it is unnecessary in light of current regulatory
requirements; the 1940 Act does not require the fund to
have such a restriction. Current regulatory
requirements relating to "restricted securities" prohibit
the fund from investing more than 15% of its net assets
in any combination of (a) securities which are not
readily marketable, (b) securities restricted as to
resale (excluding securities determined by the Trustees
of the fund (or the person designated by the Trustees of
the fund to make such determinations) to be readily
marketable), and (c) repurchase agreements maturing in
more than seven days.

To the extent the fund invests in restricted securities, the fund
may encounter difficulty in determining the fair value of
such securities. The fund also may be unable to sell
such securities at a time when it may otherwise be
desirable to do so or may have to sell them at less than
fair market value.

Required vote. Approval of this proposal requires the
affirmative vote of the lesser of (1) more than 50% of the
outstanding shares of the fund, or (2) 67% or more of the
shares of the fund present at the meeting if more than
50% of the outstanding shares of the fund are present at
the meeting in person or by proxy.

4.F. ELIMINATING THE FUND'S FUNDAMENTAL INVESTMENT RESTRICTION
WITH RESPECT TO INVESTMENTS IN OIL, GAS AND MINERAL
INTERESTS

The Trustees are recommending that the fund's fundamental
investment restriction relating to investments in oil, gas and
mineral interests be eliminated. The current restriction
states that the fund may not:

"Buy or sell oil, gas, or other mineral leases, rights or
royalty contracts, although it may purchase
securities of issuers which deal in, represent
interests in or are secured by interests in such
leases, rights or contracts."

If this proposal is approved, the fund would be able to invest
directly in oil, gas and mineral interests, and in a
variety of securities the value of which is dependent
upon the value of such interests. Investments in
oil, gas and other mineral leases, rights or royalty
contracts, and in securities which derive their value in
part from such instruments, entail certain risks. The prices of
these investments are subject to substantial
fluctuations, and may be affected by unpredictable
economic and political circumstances such as social,
political, or military disturbances, the taxation and
regulatory policies of various governments, the
activities and policies of OPEC (an organization of major
oil producing countries), the existence of cartels in
such industries, the discovery of new reserves and the
development of new techniques for producing, refining and
transporting such materials and related products, the development
of new technology, energy conservation practices, and the
development of alternative energy sources and alternative
uses for such materials and related products. In
addition, in order to enforce its rights in the event of
a default of an issuer of these securities, the fund may
be required to participate in various legal proceedings
or take possession of and manage assets securing the
issuer's obligations. This could increase the fund's
operating expenses and adversely affect the yield on its
shares.
Required vote. Approval of this proposal requires the
affirmative vote of the lesser of (1) more than 50% of the
outstanding shares of the fund, or (2) 67% or more of the
shares of the fund present at the meeting if more than
50% of the outstanding shares of the fund are present at
the meeting in person or by proxy.

4.G. ELIMINATING THE FUND'S FUNDAMENTAL INVESTMENT RESTRICTION
WITH RESPECT TO INVESTING TO GAIN CONTROL OF A COMPANY'S
MANAGEMENT

The Trustees are recommending that the fund's fundamental
investment restriction which states that the fund may not "[m]ake
investments for the purpose of gaining control of a company's
management" be eliminated. Eliminating the restriction would
make it clear that the fund can freely exercise its rights as a
shareholder of the various companies in which it may invest,
which activities could at times fall under the technical
definition of control under the securities laws. These rights
may include the right to actively oppose or support the
management of such companies.

Since the fund invests primarily in fixed-income securities, this
proposal will not impact the majority of the fund's investments.
Nevertheless, Putnam Management believes it would be in the best
interest of the fund to eliminate the restriction.

Further Information About Voting and the Meeting

Quorum and Methods of Tabulation. Thirty percent of the shares
entitled to vote -- present in person or
represented by proxy -- constitutes a quorum for the
transaction of business with respect to any proposal at
the meeting (unless otherwise noted in the proxy
statement). Shares represented by proxies that reflect
abstentions and "broker non -votes" (i.e., shares held by
brokers or nominees as to which (i) instructions have not
been received from the beneficial owners or the persons
entitled to vote and (ii) the broker or nominee does not
have the discretionary voting power on a particular
matter) will be counted as shares that are present and
entitled to vote on the matter for purposes of
determining the presence of a quorum. Votes cast by proxy or in
person at the meeting will be counted by persons
appointed by your fund as tellers for the meeting.

The tellers will count the total number of votes cast "for"
approval of the proposals for purposes of determining
whether sufficient affirmative votes have been cast.
With respect to the election of Trustees and selection of
auditors, neither abstentions nor broker non -votes
have any effect on the outcome of the proposal. With
respect to any other proposals, abstentions and broker
non -votes have the effect of a negative vote on
the proposal.

Other business. The Trustees know of no other business to be
brought before the meeting. However, if any other
matters properly come before the meeting, it is their
intention that proxies that do not contain specific
restrictions to the contrary will be voted on such
matters in accordance with the judgment of the persons
named as proxies in the enclosed form of proxy.

Solicitation of proxies. In addition to soliciting proxies by
mail, Trustees of your fund and employees of Putnam
Management, Putnam Fiduciary Trust Company, and Putnam
Mutual Funds may solicit proxies in person or by
telephone. Your fund may also arrange to have votes
recorded by telephone. The telephone voting procedure is
designed to authenticate shareholders' identities, to
allow shareholders to authorize the voting of their
shares in accordance with their instructions and to confirm
that their instructions have been properly recorded.
Your fund has been advised by counsel that these
procedures are consistent with the requirements of
applicable law. If these procedures were subject to a
successful legal challenge, such votes would not be
counted at the meeting. Your fund is unaware of any such
challenge at this time. Shareholders would be called at the
phone number Putnam Investments has in its records for
their accounts, and would be asked for their Social
Security number or other identifying information. The
shareholders would then be given an opportunity to
authorize proxies to vote their shares at the meeting in
accordance with their instructions. To ensure that the
shareholders' instructions have been recorded correctly,
they will also receive a confirmation of their instructions in
the mail. A special toll -free number will be
available in case the information contained in the
confirmation is incorrect.

Your fund's Trustees have adopted a general policy of maintaining
confidentiality in the voting of proxies. Consistent
with this policy, your fund may solicit proxies from
shareholders who have not voted their shares or who have
abstained from voting.

Persons holding shares as nominees will upon request be
reimbursed for their reasonable expenses in soliciting
instructions from their principals. Your fund has retained at
its expense D.F. King & Co., Inc., 77 Water Street, New
York, New York 10005, to aid in the solicitation of
instructions for registered and nominee accounts, for a
fee not to exceed $10,000 plus reasonable out -
of -pocket expenses for mailing and phone costs.

Revocation of proxies. Proxies, including proxies given by
telephone, may be revoked at any time before they are
voted by a written revocation received by the Clerk of
your fund, by properly executing a later-dated proxy or
by attending the meeting and voting in person.

Date for receipt of shareholders' proposals for the next annual
meeting. It is anticipated that your fund's next annual
meeting of shareholders will be held in July,
1999. Shareholder proposals must be received by your
fund before December 23, 1998, to be included in
your fund's proxy statement for the next annual meeting.

Adjournment. If sufficient votes in favor of any of the
proposals set forth in the Notice of the Meeting are not received
by the time scheduled for the meeting, the persons named
as proxies may propose adjournments of the meeting for a
period or periods of not more than 60 days in the
aggregate to permit further solicitation of proxies with
respect to those proposals. Any adjournment will require
the affirmative vote of a majority of the votes cast on
the question in person or by proxy at the session of the
meeting to be adjourned. The persons named as proxies
will vote in favor of adjournment those proxies which
they are entitled to vote in favor of such proposals. They will
vote against adjournment those proxies required to be
voted against such proposals. Your fund pays the costs
of any additional solicitation and of any adjourned
session. Any proposals for which sufficient favorable
votes have been received by the time of the meeting may
be acted upon and considered final regardless of whether
the meeting is adjourned to permit additional
solicitation with respect to any other proposal.

Financial information. Your fund will furnish to you upon
request, without charge, a copy of the fund's annual
report for its most recent fiscal year, and a copy of its
semiannual report for any subsequent semiannual period.
Such requests may be directed to Putnam Investor
Services, P.O. Box 41203, Providence, RI 02940 -
1203 or 1 -800 -225 -1581.

Fund Information

Limitation of Trustee liability. The Agreement and Declaration
of Trust of your fund provides that the fund will
indemnify its Trustees and officers against liabilities
and expenses incurred in connection with litigation in
which they may be involved because of their offices with
the fund, except if it is determined in the manner
specified in the Agreement and Declaration of Trust that
they have not acted in good faith in the reasonable
belief that their actions were in the best interests of
the fund or that such indemnification would relieve any
officer or Trustee of any liability to the fund or its
shareholders arising by reason of willful misfeasance, bad faith,
gross negligence or reckless disregard of his or her
duties. Your fund, at its expense, provides liability
insurance for the benefit of its Trustees and officers.

Audit and Nominating Committees. The voting members of the Audit
Committee of your fund include only Trustees who are not
"interested persons" of the fund by reason of any
affiliation with Putnam Investments and its affiliates.
The Audit Committee currently consists of Messrs. Estin
(Chairman), Jackson, Perkins (without vote), Putnam, III
(without vote), Smith (without vote), and Ms. Kennan.
The Nominating Committee consists only of Trustees who
are not "interested persons" of your fund or Putnam
Management. The Nominating Committee currently consists of Dr.
Pounds and Ms. Kennan (Co -chairpersons), Ms.
Baxter, and Messrs. Estin, Hill, Jackson, Joskow, Mullin,
Patterson, Stephens and Thorndike.

<PAGE>
Officers and other information. In addition to George Putnam and
Lawrence J. Lasser, the officers of your fund are as
follows:

Year first
elected to
Name (age) Office office
----------------------------------------------------------
- -------
Charles E. Porter (59) Executive Vice President 1989
Patricia C. Flaherty (51) Senior Vice President 1993
John D. Hughes (63) Senior Vice President
& Treasurer 1988
Gordon H. Silver (50) Vice President 1990
Ian C. Ferguson (40) Vice President 1998
William J. Curtin (38) Vice President 1997
David L. Waldman (32) Vice President 1997
Jennifer E. Leichter (37)Vice President
1998
Robert M. Paine (33) Vice President 1998
D. William Kohli (37) Vice President 1994
Gail S. Attridge (36) Vice President 1997
William N. Shiebler** (56)Vice President 1991
John R. Verani (58) Vice President 1988
Beverly Marcus (53) Clerk 1988
----------------------------------------------------------
* Portfolio manager
** President of Putnam Mutual Funds

All of the officers of your fund are employees of Putnam
Management or its affiliates. Because of their positions with
Putnam Management or its affiliates or their ownership of
stock of Marsh & McLennan Companies, Inc., Messrs.
Putnam, Putnam, III, Lasser and Smith (nominees for
Trustees of your fund), as well as the officers of your
fund, will benefit from the management fees, distribution
fees, underwriting commissions, custodian fees, and
investor servicing fees paid or allowed by the fund.

Assets and shares outstanding of your fund
as of April 10, 1998

Net assets $1,255,163,492

Common shares outstanding
and authorized to vote 140,248,960 shares

5% beneficial ownership of your fund as of March 31, 1998

Persons beneficially owning more than 5%
of the fund's shares NONE

<PAGE>
PUTNAMINVESTMENTS
The Putnam Funds

One Post Office Square
Boston, Massachusetts 02109
Toll -free 1 -800 -225 -1581
<PAGE>

PUTNAMINVESTMENTS Logo

This is your PROXY CARD.

Please vote this proxy, sign it below, and return it promptly in
the envelope provided. Your vote is important.

Proxy for a meeting of shareholders to be held on July 9, 1998
for Putnam Premier Income Trust.

This proxy is solicited on behalf of the Trustees of the fund.

The undersigned shareholder hereby appoints George Putnam, Hans
H. Estin, and Robert E. Patterson, and each of them
separately, Proxies, with power of substitution, and
hereby authorizes them to represent and to vote, as
designated below, at the meeting of shareholders of
Putnam Premier Income Trust on July 9, 1998, at 2:00
p.m., Boston time, and at any adjournments thereof, all of
the shares of the fund that the undersigned shareholder
would be entitled to vote if personally present.

PLEASE BE SURE TO SIGN AND DATE THIS PROXY.

Please sign your name exactly as it appears on this card. If you
are a joint owner, each owner should sign. When signing
as executor, administrator, attorney, trustee, or
guardian, or as custodian for a minor, please give your
full title as such. If you are signing for a
corporation, please sign the full corporate name and
indicate the signer's office. If you are a partner, sign
in the partnership name.

----------------------------------------------------------
- -------
Shareholder sign here Date

----------------------------------------------------------
- -------
Co-owner sign here Date

<PAGE>
HAS YOUR ADDRESS CHANGED?
Please use this form to notify us of any change in address or
telephone number or to provide us with your comments.
Detach this form from the proxy ballot and return it with
your signed proxy in the enclosed envelope.

Street
----------------------------------------------------------
- -------

City State Zip
----------------------------------------------------------
- -------

Telephone
----------------------------------------------------------
- -------

DO YOU HAVE ANY COMMENTS?

----------------------------------------------------------
- -------

DEAR SHAREHOLDER:

Your vote is important. Please help us to eliminate the expense
of follow-up mailings by signing and returning this proxy
as soon as possible. A postage-paid envelope is enclosed
for your convenience.

THANK YOU!

<PAGE>
If you complete and sign the proxy, we'll vote it exactly as you
tell us. If you simply sign the proxy, it will be voted
FOR fixing the number of Trustees and electing Trustees
as set forth in Proposal 1 and FOR each of the other
Proposals. In their discretion, the Proxies will also be
authorized to vote upon such other matters that may
properly come before the meeting.

THE TRUSTEES RECOMMEND A VOTE FOR FIXING THE NUMBER OF TRUSTEES
AND ELECTING ALL OF THE NOMINEES FOR TRUSTEES AND FOR THE
OTHER PROPOSALS LISTED BELOW:

Please vote by filling in the appropriate boxes below.

PROPOSAL TO:

1. Fix the number of and elect Trustees.
The nominees for Trustees are: J.A. Baxter, H.H. Estin, J.A.
Hill, R.J. Jackson, P.L. Joskow, E.T. Kennan, L.J.
Lasser, J.H. Mullin, R.E. Patterson, D.S. Perkins,
W.F. Pounds, G. Putnam, G. Putnam, III, A.J.C.
Smith, W.T. Stephens and W.N. Thorndike.

/ / FOR fixing the number of Trustees and electing all the
nominees (except as marked to the contrary below.)

To withhold authority to vote for one or more of the
nominees, write the names of the nominee(s) names below:

-----------------------------------------------------
-------

/ / WITHHOLD authority to vote for all nominees

2. Ratify FOR AGAINST ABSTAIN
the selection of / / / / / /
Price Waterhouse LLP
as the independent auditors
of your fund.

3. Amend the fund's fundamental investment
restriction with respect to:

3.A. Diversification. / / / / / /

3.B. Investments in the voting/ / / /
/ /
securities of a single
issuer.

3.C. Making loans. / / / / / /

3.D. Investments in / / / /
/ /
commodities.

3.E. Investments in / / / /
/ /
real estate.

4. Eliminate the fund's fundamental
investment restriction with
respect to:

4.A. Investments in securities / / / / / /
of issuers in which
management of the fund or
Putnam Investment Management, Inc.
owns securities.

4.B. Margin transactions. / / / / / /

4.C. Short sales. / / / / / /

4.D. Pledging assets. / / / / / /

4.E. Investments in restricted / / / / / /
securities.

4.F. Investments in oil, / / / / / /
gas and mineral interests.

4.G. Investing to gain control / / / / / /
of a company's management.

Note: If you have questions on any of the Proposals, please
call 1 -800 -225 -1581.