PUTNAM MASTER INTERMEDIATE INCOME TRUST, DEF 14A, 1999-03-08

PUTNAM MASTER INTERMEDIATE INCOME TRUST
DEF 14A, 1999-03-08

Previous: LAB HOLDINGS INC, 8-K, 1999-03-08

Next: ACM GOVERNMENT SPECTRUM FUND INC /NY/, N-30D, 1999-03-08

-1-

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 MASTER INTERMEDIATE 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

(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:

IMPORTANT INFORMATION
FOR SHAREHOLDERS IN
PUTNAM MASTER INTERMEDIATE 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 5 AND 6 .

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

TABLE OF CONTENTS

A Message from the Chairman 1

Notice of Shareholder Meeting 2

Trustees' Recommendations 5

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.

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 your
fund's Trustees; (2) ratifying the selection of your fund's
independent auditors; (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

PUTNAM MASTER INTERMEDIATE 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 Master Intermediate Income Trust:

The Annual Meeting of Shareholders of your fund will be held on
June 3, 1999 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 8 .

2. RATIFYING THE SELECTION BY THE TRUSTEES OF THE INDEPENDENT
AUDITORS OF YOUR FUND FOR ITS CURRENT FISCAL YEAR. SEE
PAGE 24 .

3.A. APPROVING AN AMENDMENT TO THE FUND'S FUNDAMENTAL INVESTMENT
RESTRICTION WITH RESPECT TO DIVERSIFICATION. SEE PAGE
25 .

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 26 .

3.C. APPROVING AN AMENDMENT TO THE FUND'S FUNDAMENTAL INVESTMENT
RESTRICTION WITH RESPECT TO MAKING LOANS. SEE PAGE
28 .

3.D. APPROVING AN AMENDMENT TO THE FUND'S FUNDAMENTAL
INVESTMENT
RESTRICTION WITH RESPECT TO INVESTMENTS IN COMMODITIES.
SEE PAGE 29 .

3.E. APPROVING AN AMENDMENT TO THE FUND'S FUNDAMENTAL INVESTMENT
RESTRICTION WITH RESPECT TO INVESTMENTS IN REAL ESTATE. SEE
PAGE 31 .

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 32 .

4.B. APPROVING THE ELIMINATION OF THE FUND'S FUNDAMENTAL
INVESTMENT RESTRICTION WITH RESPECT TO MARGIN
TRANSACTIONS.
SEE PAGE 33 .

4.C. APPROVING THE ELIMINATION OF THE FUND'S FUNDAMENTAL
INVESTMENT RESTRICTION WITH RESPECT TO SHORT SALES. SEE
PAGE 34 .

4.D. APPROVING THE ELIMINATION OF THE FUND'S FUNDAMENTAL
INVESTMENT RESTRICTION WITH RESPECT TO PLEDGING ASSETS. SEE
PAGE 36 .

4.E. APPROVING THE ELIMINATION OF THE FUND'S FUNDAMENTAL
INVESTMENT RESTRICTION WITH RESPECT TO INVESTMENTS IN
RESTRICTED SECURITIES. SEE PAGE 37 .

4.F. APPROVING THE ELIMINATION OF THE FUND'S FUNDAMENTAL
INVESTMENT RESTRICTION WITH RESPECT TO INVESTMENTS IN OIL,
GAS AND MINERAL INTERESTS. SEE PAGE 38 .

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 39 .

5. TRANSACTING OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE
MEETING.

By the Trustees

George Putnam, Chairman
John A. Hill, Vice Chairman
William F. Pounds, Vice Chairman

Jameson A. Baxter Robert E. Patterson
Hans H. Estin 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
John H. Mullin, III

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.

March 5 , 1999

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 MASTER
INTERMEDIATE INCOME TRUST for use at the Annual Meeting of
Shareholders of the fund to be held on June 3, 1999, and, if your
fund's meeting is adjourned, at any later meetings, for the
purposes stated in the Notice of Annual Meeting (see previous
pages).

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 PRICEWATERHOUSECOOPERS 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 March 5, 1999
are entitled to be present and to vote at the meeting or any
adjourned meeting. The Notice of Annual Meeting, the proxy, and
the Proxy Statement are being mailed to shareholders of record on
or about March 12 , 1999.

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 Board Policy Committee of the Trustees recommends that
the number of Trustees be fixed at fifteen 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 Board Policy Committee of the Trustees of your fund
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 55, is the President of Baxter Associates, Inc.,
a management consulting and private investment 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; Chair of the Board of Governors of Good Shepherd
Hospital; and Vice Chair of the National Center for Nonprofit
Boards. Ms. Baxter is a graduate of Mount Holyoke College.

HANS H. ESTIN
[INSERT PICTURE]

Mr. Estin, age 70, 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 57, is Vice Chairman of the Trustees . He 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 and various private companies
controlled by First Reserve Corporation. 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 55, retired as Chairman of the Board,
President and Chief Executive Officer of Fisher-Price, Inc., a
major toy manufacturer, in 1993, a position which he held
since 1990 . 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 is a graduate of Michigan State
University Business School.

PAUL L. JOSKOW*
[INSERT PICTURE]

Dr. Joskow, age 51, is Elizabeth and James Killian
Professor of Economics and former Chairman of the Department of
Economics at the Massachusetts Institute of Technology. He has
published three books and numerous articles on topics in
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.

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.

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]

Dr. Kennan, age 61, is President Emeritus 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, published numerous
articles, and directed the postdoctoral programs in Patristic and
Medieval Studies.

Dr. Kennan currently also serves as a Director of Bell Atlantic,
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. Dr. Kennan is a
graduate of Mount Holyoke College, the University of Washington,
and St. Hilda's College, Oxford University, and holds several
honorary doctorates.

LAWRENCE J. LASSER*
[INSERT PICTURE]

Mr. Lasser, age 56, is the 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 Trustees 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 57, 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 52, is the President and a 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.

WILLIAM F. POUNDS
[INSERT PICTURE]

Dr. Pounds, age 70, is the Vice Chairman of the Trustees .
He was a Professor of Management at the Massachusetts Institute
of Technology Alfred P. Sloan School of Management from 1961
through 1998, and is currently a Professor Emeritus.

Dr. Pounds currently also serves as a Director of IDEXX
Laboratories, Inc., North American Management Corp., Management
Sciences For Health, Inc. and Sun Company, Inc. He is also a
Vice President and Trustee of the Museum of Fine Arts, Boston;
and a Fellow of The American Academy of Arts and Sciences. He
previously served as Senior Advisor to the Rockefeller Family and
as President and Chief Executive Officer of Rockefeller Financial
Services, Inc. and as a Director of Fisher-Price, Inc., General
Mills, Inc., and an Overseer of WGBH Educational Foundation. Dr.
Pounds is a graduate of Carnegie-Mellon University.

GEORGE PUTNAM*
[INSERT PICTURE]

Mr. Putnam, age 72, is the Chairman of the Trustees 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 Companies,
Inc., 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., 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, the
Museum of Fine Arts, Boston, the New England Aquarium and College
of the Atlantic; an Overseer of the Museum of Science in Boston,
and Northeastern University; 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 47, 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. 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.; a Trustee of the
Carnegie Hall Society, the Central Park Conservancy, the
Educational Broadcasting Corporation, the Economic Club of New
York, and the U.S. Chamber of Commerce; a Member of the Board of
Overseers of the Joan and Sanford I. Weill Graduate School of
Medical Sciences of Cornell University; and 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 56, is the President and Chief Executive
Officer of MacMillan Bloedel Limited, a forest products and
building materials company.

In 1996, Mr. Stephens retired as Chairman of the Board of
Directors, President and Chief Executive Officer of Johns
Manville Corporation . He also served as Executive Vice
President and Chief Financial Officer of Manville. In total, Mr.
Stephens had 27 years of experience with Manville and its
predecessor companies.

Mr. Stephens serves as a Director for Qwest Communications, a
fiber optic and communication system supplier and New Century
Energies, a public utility company. 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 that
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. 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 prior consulting relationship with
National Economic Research Associates, Inc. a wholly-owned
subsidiary of Marsh & McLennan Companies, Inc., which was
terminated as of August 31, 1998. 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.

All the nominees were elected by the shareholders in December
1997. The 15 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 15 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 113 Putnam funds
based on their own investment needs. The Trustees' aggregate
investments in the Putnam funds total over $75 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.
SHARE OWNERSHIP BY TRUSTEES

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 1/31/99 AS OF 1/31/99 (1)
- --------------------------------------------------------------------------------
Jameson A. Baxter 1994 257 122,336
Hans H. Estin 1972 1,47534,494
John A. Hill 1985 196 187,531
Ronald J. Jackson 1996 391(2) 147,449
Paul L. Joskow 1997 10022,959
Elizabeth T. Kennan 1992 279(3)25,719
Lawrence J. Lasser 1992 196 509,341
John H. Mullin, III 1997 10039,388
Robert E. Patterson 1984 58770,671
Donald S. Perkins 1982 2,020 186,910
William F. Pounds 1971 979 337,409
George Putnam 1957 3,7061,965,898
George Putnam, III 1984 978521,258
A.J.C. Smith 1986 391(4)61,089
W. Thomas Stephens 1997 100 125,050
W. Nicholas Thorndike 1992 35181,178
- --------------------------------------------------------------------------------

(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) Dr . Kennan is the custodian of a trust which owns all of
these shares and in which she has no economic interest.
(4) Mr. Smith has shared investment power and shared voting power with respect
to such shares.

As of January 31, 1999, the Trustees and officers of the fund owned a total of
12,106 shares of the fund, comprising less than 1% of the outstanding
shares of the fund 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 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 Contract
Committee, which reviews all contractual arrangements with
Putnam Management and its affiliates ; the Communication,
Service and Marketing Committee, which reviews the quality of
services provided by your fund's investor servicing agent and
distributor ; the Brokerage and Custody Committee, which
reviews matters relating to custody of securities, best
execution, brokerage costs and allocations and new investment
techniques; the Audit and Pricing Committee, which reviews
procedures for the valuation of securities, the funds '
accounting policies and the adequacy of internal controls and
supervises the engagement of the funds' auditors; the Board
Policy Committee, which reviews the compensation of the
Trustees and their administrative staff and supervises the
engagement of the funds' independent counsel and which is
responsible for selecting nominees for election as
Trustees , and the Closed-end Funds and Variable Trust
Committee, which is responsible for reviewing special issues
applicable to closed-end funds such as your fund and funds
sold through variable annuity products .

Each Trustee generally attends at least two formal committee
meetings during each regular meeting of the Trustees. During
1998, 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 Contract Committee typically meets on several
additional occasions during the year to carry out its
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 its most recent fiscal year and the fees paid to each
Trustee by all of the Putnam funds during calendar year 1998:
<TABLE><CAPTION>
COMPENSATION TABLE
<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 $1,394 $376 $ 95,000 $207,000(4)
Hans H. Estin 1,258 742 95,000 182,500
John A. Hill(4)(5) 1,246 278 115,000 200,500
Ronald J. Jackson(4) 1,358 197 95,000 200,500
Paul L. Joskow (4) 1,117 26 95,000 180,500
Elizabeth T. Kennan 1,358 401 95,000 200,500
Lawrence J. Lasser 1,232 299 95,000 178,500
John H. Mullin, III(4) 1,117 39 95,000 180,500
Robert E. Patterson 1,252 223 95,000 181,500
Donald S. Perkins 1,258 803 95,000 182,500
William F. Pounds (5) 1,372 835 115,000 215,000
George Putnam 1,241 849 95,000 179,500
George Putnam, III 1,252 147 95,000 181,500
A.J.C. Smith 1,225 500 95,000 176,500
W. Thomas Stephens(4) 1,191 37 95,000 181,500
W. Nicholas Thorndike 1,258 574 95,000 182,500

(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 1998.
(3) As of December 31, 1998, there were 113 funds in the Putnam family.
(4) Includes compensation deferred pursuant to a Trustee Compensation Deferral Plan.
The total amounts of deferred compensation payable by the fund to Mr. Hill, Mr.
Jackson, Mr. Joskow, Mr. Mullin, and Mr. Stephens as of September 30, 1998 was
$4,721, $2,530, $632, $629 and $775, respectively, including income earned on
such amounts.
(5) Includes additional compensation for service as Vice Chairman of the Putnam
funds.
</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 44 .

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,
except for a minority stake owned by employees, in turn 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. is a leading professional services firm
with risk and insurance services, investment management and
consulting businesses.

2. RATIFICATION OF INDEPENDENT AUDITORS

PRICEWATERHOUSECOOPERS LLP , 160 Federal Street, Boston,
Massachusetts 02110, independent accountants, has been selected
by the Trustees as the independent auditors of your fund for the
current fiscal year. Among the country's preeminent accounting
firms, this firm also serves as the auditor for 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.

A majority of the votes on the matter is necessary to ratify the
selection of auditors. A representative of the independent
auditors is expected to be present at the meeting to make
statements and to respond to appropriate questions.

Effective July 1, 1998, Coopers & Lybrand L.L.P. and Price
Waterhouse LLP combined their businesses and practices and began
doing business as PricewaterhouseCoopers LLP.

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 by the Investment Company Act of
1940, as amended (the "1940 Act"). Under the 1940 Act, the fund,
as a diversified fund, generally may not, with respect to 75% of
its total assets, invest more than 5% of its total assets in the
securities of any one issuer (except U.S. government securities).
The remaining 25% of the fund's total assets is not subject to
this restriction.

The fund's current restriction is more restrictive, and 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 or, with respect to 25% of the
Fund's total assets, to securities 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 75% 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 be able to invest up
to 25% of its total assets in the securities of any one
issuer , including securities issued by, or backed by the
credit of, any foreign government or its agencies or
instrumentalities, to the extent consistent with the Investment
Company Act of 1940 (the "1940 Act") . 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 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.

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 1940 Act. The 1940 Act
prohibits a diversified fund such as the fund from investing,
with respect to 75% 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 fund's current
investment restriction, which is more restrictive than the 1940
Act, 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 75% 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 25% 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.

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.

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 or 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.

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.

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.

Putnam Management does not believe that eliminating this
restriction involves any material risk to shareholders. Any
potential conflicts of interest would be addressed by codes of
ethics which are applicable to the Trustees and officers of the
fund and officers and directors of Putnam Management.

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."

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.

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.

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 15% of the value of
the Fund's net assets, excluding restricted securities that
have been determined by the Trustees of the Fund (or the
person designated by them to make such determinations) to be
readily marketable."

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.

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.

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. Since the fund invests primarily in fixed-income
securities, this proposal will have little practical effect on
the fund. However, to the extent the fund makes investments in
oil, gas and other mineral leases, rights or royalty contracts,
and in securities which derive their value in part from such
instruments, the fund will be exposed to 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.

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. A majority 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.

SIMULTANEOUS MEETINGS. The meeting of shareholders of your fund
is called to be held at the same time as the meetings of
shareholders of certain of the other Putnam funds. It is
anticipated that all meetings will be held simultaneously. If
any shareholder at the meeting objects to the holding of a
simultaneous meeting and moves for an adjournment of the meeting
to a time promptly after the simultaneous meetings, the persons
named as proxies will vote in favor of such adjournment.

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 voting instructions recorded by telephone. The
telephone 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
$5,500 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 currently anticipated that your fund's
next annual meeting of shareholders will be held in June 2000.
Shareholder proposals to be included in the proxy statement for
that meeting must be received by your fund before November
14, 1999. Shareholders who wish to make a proposal at the
2000 annual meeting-other than one that will be included in the
fund's proxy materials-should notify the fund no later than
January 28, 2000. If a shareholder who wishes to present a
proposal fails to notify the fund by this date, the proxies
solicited for the meeting will have discretionary authority to
vote on the shareholder's proposal if it is properly brought
before the meeting. If a shareholder makes a timely
notification, the proxies may still exercise discretionary voting
authority under circumstances consistent with the SEC's proxy
rules.

ADJOURNMENT. If sufficient votes in favor of any of the
proposals set forth in the Notice of 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 that 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 PRICING AND BOARD POLICY COMMITTEES. The voting
members of the Audit and Pricing 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 and Pricing Committee currently consists
of Messrs. Estin, Joskow, Putnam, III (Chairman and without
vote), Smith (without vote), Stephens and Ms. Kennan. The Board
Policy Committee consists only of Trustees who are not
"interested persons" of your fund or Putnam Management. The
Board Policy Committee currently consists of Ms. Kennan
(Chairperson), Messrs. Hill, Patterson, Pounds and Thorndike.

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 (60) Executive Vice President 1989
Patricia C. Flaherty (52) Senior Vice President 1993
John D. Hughes (64) Senior Vice President
& Treasurer 1988
Gordon H. Silver (51) Vice President 1990
Ian C. Ferguson (41) Vice President 1997
Brett C. Browchuk (36) Vice President 1998
Stephen Oristaglio (43) Vice President 1998
Edward H. D'Alelio (46) Vice President 1998
Jennifer E. Leichter* (38) Vice President 1990
David Waldman* (32) Vice President 1998
D. William Kohli* (38) Vice President 1994
Richard A. Monaghan**(44) Vice President 1998
John R. Verani (59) Vice President 1988
Beverly Marcus (54) Clerk 1988
- -----------------------------------------------------------------
* One of the fund's portfolio managers
** 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,
custodian fees, and investor servicing fees paid or allowed by
the fund.

ASSETS AND SHARES OUTSTANDING OF YOUR FUND
AS OF FEBRUARY 26, 1999

NET ASSETS: $791,744,375

SHARES OUTSTANDING AND AUTHORIZED
TO VOTE: 100,095,474 shares

5% BENEFICIAL OWNERSHIP OF YOUR FUND
AS OF FEBRUARY 26, 1999:

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

PUTNAMINVESTMENTS

The Putnam Funds
One Post Office Square
Boston, Massachusetts 02109
Toll-free 1-800-225-1581

50574 3/99
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!

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?

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

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 June 3, 1999
for PUTNAM MASTER INTERMEDIATE 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 Master Intermediate Income Trust onJune 3,
1999, 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

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, 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 / / / / / /
PRICEWATERHOUSECOOPERS 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.