PCS CASH FUND INC, 485B24E, 1995-10-25

PCS CASH FUND INC
485B24E, 1995-10-25

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As filed with the Securities and Exchange Commission on October 25, 1995
Registration No. 33-26417

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
POST-EFFECTIVE AMENDMENT NO. 7 [X]
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
AMENDMENT NO. 9 [X]

PCS CASH FUND, INC.

PCS Money Market Portfolio, PCS Tax-Free Money Market Portfolio,
and PCS Government Obligations Money Market Portfolio
(Exact Name of Registrant as Specified in Charter)

400 Bellevue Parkway Warren J. Olsen, Esq.
Wilmington, DE 19809 Morgan Stanley Asset Management Inc.
(Address of Principal Executive Offices) 1221 Avenue of the Americas
New York, NY 10020
Registrant's Telephone Number: (Name and Address of
(302) 791-1700 Agent for Service)

Copy to:

RICHARD W. GRANT, ESQUIRE
Morgan, Lewis & Bockius LLP
2000 One Logan Square
Philadelphia, Pennsylvania 19103

It is proposed that this filing will become effective (check appropriate box)
immediately upon filing pursuant to paragraph (b)
X on November 1, 1995 pursuant to paragraph (b)
____
____ 60 days after filing pursuant to paragraph (a)
____ on (date) pursuant to paragraph (a) of Rule 485

CALCULATION OF REGISTRATION FEE UNDER THE SECURITIES ACT OF 1933

Title of Securities Amount Being Proposed Maximum
Being Registered Registered Offering Price Per Unit
<S> <C> <C>

Shares of Common Stock
PCS Money Market Portfolio 34,017,915 shares $1 per share
PCS Government Obligations
Money Market Portfolio 218,434,303 shares $1 per share

</TABLE>

<TABLE>
<CAPTION>
Title of Securities Proposed Maximum Amount of
Being Registered Aggregate Offering Price(1) Registration Fee
<S> <C> <C>

Shares of Common Stock
PCS Money Market Portfolio - $100(1)
PCS Government Obligations
Money Market Portfolio - $100(1)

<FN>
(1) Registrant's PCS Money Market Portfolio had actual aggregate redemptions of
1,273,055,448 shares for its fiscal year ended June 30, 1995, has used
1,239,327,533 of available redemptions for reductions pursuant to Rule 24f- 2(c)
under the 1940 Act and has previously used no available redemptions for
reductions pursuant to Rule 24e-2(a) of the 1940 Act during the current year.
Registrant's PCS Government Money Market Portfolio had actual aggregate
redemptions of 2,061,500,115 shares for its fiscal year ended June 30, 1995, has
used 1,843,355,812 of available redemptions for reductions pursuant to Rule
24f-2(c) under the 1940 Act and has previously used no available redemptions for
reductions pursuant to Rule 24e-2(a) of the 1940 Act during the current year.
Registrant elects to use redemptions in the aggregate amount of 33,727,915
shares of its PCS Money Market Portfolio and 218,144,303 shares of its PCS
Government Money Market Portfolio for reductions in its current amendment.
</FN>
</TABLE>

Pursuant to Rule 24f-2 under the Investment Company Act of 1940, Registrant has
elected to maintain registration of an indefinite number of shares of common
stock in each of its three portfolios. Registrant's Rule 24f-2 Notice for the
fiscal year ended June 30, 1995 was filed with the Commission on August 23,
1995.

<PAGE>

PCS CASH FUND, INC.
November 1, 1995

CROSS REFERENCE SHEET

(relating to PCS Money Market Portfolio,
PCS Tax-Free Money Market Portfolio,
PCS Government Obligations Money Market
Portfolio)

Items Required by Form N-1A

Information Registration
Required in a Statement
Part A Prospectus Heading

Item 1. Cover Page Cover Page

Item 2. Synopsis Introduction; Expense
Table

Item 3. Condensed Financial Information Financial Highlights

Item 4. General Description of Registrant Cover Page; Financial
Highlights; Investment
Objectives and Policies;
Description of Shares

Item 5. Management of the Fund Management

Item 5A. Management's Discussion of Fund Performance *

Item 6. Capital Stock and Other Securites Cover Page; Dividends
and Distributions;
Description of Shares

Item 7. Purchase of Securities Being
Offered Purchase and Redemption
of Shares - Purchase
Procedures and Net Asset
Value

Item 8. Redemption or Repurchase Purchase and Redemption
of Shares - Redemption
of Shares and Net Asset
Value

Item 9. Legal Proceedings *

Item 10. Cover Page Cover Page

<PAGE>

Item 11. Table of Contents Contents

Item 12. General Information and History General; See Prospectus-
"The Fund"

Item 13. Investment Objectives and Policies Investment Objectives
and Policies

_______________

* Omitted since the answer is negative or the item is not applicable.

Information
Required in a
Statement of Registration
Additional Statement
Part B Information Heading

Item 14. Management of the Fund Directors and Officers;
Investment Advisory,
Distribution and
Servicing Arrangements
Item 15. Control Persons and Principal
Holders of Securities Miscellaneous

Item 16. Investment Advisory and Other
Services Investment Advisory,
Distribution and
Servicing Arrangements;
See Prospectus
-"Management"

Item 17. Brokerage Allocation and Other
Practices Portfolio Transactions

Item 18. Capital Stock and Other
Securities Additional Description
Concerning Fund Shares;
See Prospectus -
"Dividends and
Distributions" and
"Description of Shares"

<PAGE>

Item 19. Purchase, Redemption and Pricing of
Securities Being Offered Purchase and Redemption
Information; Valuation
of Shares; See
Prospectus -"Purchase
and Redemption of
Shares" and
"Distribution of
Shares"

Item 20. Tax Status Taxes; See Prospectus
-"Taxes"

Item 21. Underwriters Not Applicable

Item 22. Calculation of Yield Quotations of
Money Market Funds Valuation of Shares

Item 23. Financial Statements Financial Statements

Part C Other Information

Information required to be included in Part C is set forth under the
appropriate item, so numbered in Part C of this Registration Statement.

<PAGE>
PCS CASH FUND, INC.

--------------------------
PROSPECTUS
--------------------------

PCS Money Market Portfolio
--------------------------

PCS Tax-Free
Money Market Portfolio
--------------------------

PCS Government Obligations
Money Market Portfolio
--------------------------

November 1, 1995

<PAGE>

No person has been authorized to give any information or to make any
representations not contained in this Prospectus or in the Fund's Statement of
Additional Information incorporated herein by reference, in connection with the
offering made by this Prospectus and, if given or made, such information or
representations must not be relied upon as having been authorized by the Fund or
its Distributor. This Prospectus does not constitute an offering by the Fund or
by the Distributor in any jurisdiction in which such offering may not lawfully
be made.

- -------------------------------------------------------------------------------
CONTENTS
Page
------

Introduction ....................................................... 2
Financial Highlights ............................................... 4
Investment Objectives and Policies ................................. 6
Purchase and Redemption of Shares .................................. 15
Management ......................................................... 19
Distribution of Shares ............................................. 20
Dividends and Distributions ........................................ 21
Taxes .............................................................. 21
Performance Information ............................................ 22
Description of Shares .............................................. 23
Other Information .................................................. 23

INVESTMENT ADVISOR
Morgan Stanley Asset Management Inc.
New York, New York

DISTRIBUTOR
Morgan Stanley & Co. Incorporated
New York, New York

CUSTODIAN
PNC Bank
Philadelphia, Pennsylvania

ADMINISTRATOR/TRANSFER AGENT
PFPC, Inc.
Wilmington, Delaware

COUNSEL
Morgan, Lewis & Bockius LLP
Philadelphia, Pennsylvania

INDEPENDENT ACCOUNTANTS
Coopers & Lybrand L.L.P.
Philadelphia, Pennsylvania

<PAGE>
- -------------------------------------------------------------------------------
PROSPECTUS
- -------------------------------------------------------------------------------
PCS CASH FUND, INC.

PCS Cash Fund, Inc. (the "Fund") is a diversified open-end management
investment company authorized to offer shares in three Portfolios: a taxable
money market portfolio, a tax-free money market portfolio and a U.S. Government
obligations money market portfolio. The Fund is currently offering shares of the
PCS Money Market Portfolio and the PCS Government Obligations Money Market
Portfolio. Shares of the PCS Tax-Free Money Market Portfolio are not currently
available. The investment objectives of each investment portfolio described in
this Prospectus are as follows:

PCS MONEY MARKET PORTFOLIO -- to provide as high a level of current
interest income as is consistent with maintaining liquidity and stability
of principal. It seeks to achieve such objective by investing in high
quality, U.S. dollar-denominated money market instruments.

PCS TAX-FREE MONEY MARKET PORTFOLIO -- to provide as high a level of
current interest income exempt from federal income taxes as is consistent
with maintaining liquidity and stability of principal. It seeks to achieve
such objective by investing substantially all of its assets in a
diversified portfolio of high quality, short-term Municipal Obligations.
"Municipal Obligations" are obligations issued by or on behalf of states,
territories and possessions of the United States, the District of Columbia
and their political subdivisions, agencies, instrumentalities and
authorities. During periods of normal market conditions, at least 80% of
the net assets of the Portfolio will be invested in Municipal Obligations,
the interest on which is exempt from the regular federal income tax and is
not an item of tax preference for noncorporate shareholders for purposes of
the federal alternative minimum tax ("Tax-Exempt Interest").

PCS GOVERNMENT OBLIGATIONS MONEY MARKET PORTFOLIO -- to provide as
high a level of current interest income as is consistent with maintaining
liquidity and stability of principal. It seeks to achieve such objective by
investing in short-term U.S. Treasury bills, notes and other obligations
issued or guaranteed by the U.S. Government or its agencies or
instrumentalities, and repurchase agreements relating to such obligations.

Morgan Stanley & Co. Incorporated acts as sponsor and distributor for the
Fund and Morgan Stanley Asset Management Inc. serves as investment advisor for
the Fund. PNC Bank, National Association ("PNC Bank") serves as custodian for
the Fund and PFPC, Inc. ("PFPC") serves as administrator and transfer and
dividend disbursing agent for the Fund.

This Prospectus contains concise information that a prospective investor
needs to know before investing. Please keep it for future reference. A Statement
of Additional Information, dated November 1, 1995, has been filed with the
Securities and Exchange Commission and is incorporated by reference in this
Prospectus. It may be obtained upon request free of charge from the Fund's
transfer agent, PFPC, P.O. Box 8950, Wilmington, DE 19899.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

AN INVESTMENT IN THE FUND IS NEITHER INSURED NOR
GUARANTEED BY THE UNITED STATES GOVERNMENT. THERE
CAN BE NO ASSURANCE THAT ANY PORTFOLIO WILL BE
ABLE TO MAINTAIN A STABLE NET ASSET VALUE OF
$1.00 PER SHARE.

THE DATE OF THIS PROSPECTUS IS NOVEMBER 1, 1995

<PAGE>
INTRODUCTION

PCS Cash Fund, Inc. (the "Fund") is a diversified, open-end management
investment company authorized to offer shares in three separate investment
portfolios. The Fund's shares (collectively, the "Shares") described in this
Prospectus represent interests in one of the following of such investment
portfolios: the PCS Money Market Portfolio, the PCS Tax-Free Money Market
Portfolio and the PCS Government Obligations Money Market Portfolio.

The PCS Money Market Portfolio's investment objective is to provide as high
a level of current interest income as is consistent with maintaining liquidity
and stability of principal. It seeks to achieve such objective by investing in a
portfolio of high quality, U.S. dollar-denominated money market instruments. In
pursuing its investment objective, the PCS Money Market Portfolio invests in a
broad range of government, foreign and domestic bank obligations and commercial
obligations that may be available in the money markets.

Morgan Stanley & Co. Incorporated (the "Distributor") acts as distributor
of the Fund's Shares. The Fund's investment advisor is Morgan Stanley Asset
Management Inc. (the "Advisor"). PNC Bank serves as custodian to the Fund and
PFPC serves as administrator and transfer and dividend disbursing agent to the
Fund.

An investor may purchase and redeem Shares of any of the Portfolios through
an account maintained with his broker or by direct purchases or redemptions. See
"Purchase and Redemption of Shares."

An investment in any of the Portfolios is subject to certain risks, as set
forth in detail under "Investment Objectives and Policies." The Fund was created
in 1989 and is currently operating two Portfolios: The PCS Money Market
Portfolio and the PCS Government Obligations Money Market Portfolio. The PCS
Tax-Free Money Market Portfolio is not currently offering shares. Any or all of
the Portfolios, to the extent set forth under "Investment Objectives and
Policies," may engage in the following investment practices: the use of
repurchase agreements and reverse repurchase agreements, the purchase of
mortgage-related securities, the purchase of securities on a "when-issued" basis
and the purchase of securities on a "forward commitment" basis. All of these
transactions involve certain special risks, as set forth under "Investment
Objectives and Policies."

For more detailed information of how to purchase or redeem Shares, please
refer to the section of this Prospectus entitled "Purchase and Redemption of
Shares."

<PAGE>

<TABLE>
<CAPTION>
EXPENSE TABLE
Annual Fund Operating Expenses
(as a percentage of average net assets)
PCS GOVERNMENT
PCS MONEY PCS TAX-FREE OBLIGATIONS
MARKET MONEY MARKET MONEY MARKET
PORTFOLIO PORTFOLIO PORTFOLIO
---------- ------------ --------------
<S> <C> <C> <C>

Management fees (after fee waivers) ....................... .40% .14% .43%
12b-1 fees (after fee waivers)............................. .35 .35 .25
Other Expenses*............................................ .23 .46 .27
--- --- ---
Net Expenses (after fee waivers)........................... .98% .95% .95%

<FN>
- ---------
* The caption "Other Expenses" does not include extraordinary expenses as
determined by use of generally accepted accounting principles.
</FN>
</TABLE>

The Expense Table is designed to assist an investor in understanding the
various costs and expenses that an investor in the Fund will bear directly or
indirectly. (For more complete descriptions of the various costs and expenses,
see "Management--Investment Advisor," and "Distribution of Shares" below.) The
Advisor and the Distributor are voluntarily waiving a portion of their
respective fees until such time as they determine that the Fund's performance is
competitive with other comparable funds without such waivers. However, such fee
waivers are voluntary and may be terminated at any time. There can be no
assurance that any future waivers will not vary from the figures reflected in
the Expense Table. Absent fee waivers, Management fees would be .45% and 12b-1
fees would be .50% for each Portfolio and Total Operating Expenses would be
1.18% for the PCS Money Market Portfolio, 1.41% for the PCS Tax-Free Money
Market Portfolio and 1.22% for the PCS Government Obligations Money Market
Portfolio. The percentages shown above representing Annual Fund Operating
Expenses are based on net operating expenses for the PCS Money Market Portfolio
(.98%) for the fiscal year ended June 30, 1995 and have been restated
to reflect current fees for the PCS Government Obligations Money Market
Portfolio (.95%). The expenses for the PCS Tax-Free Money Market Portfolio,
which is not in operation, are estimates.

EXAMPLE

An investor would pay the following expenses on a $1,000 investment
assuming (1) 5% annual return and (2) redemption at the end of each time period.
The following example is based on total operating expenses of each Portfolio
after fee waivers.

<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
PCS Money Market Portfolio................................. $10 $31 $54 $120
PCS Tax-Free Money Market Portfolio........................ $10 $30 -- --
PCS Government Obligations Money
Market Portfolio...................................... $10 $30 $53 $117
</TABLE>

The Example assumes that all dividends and distributions are reinvested.
Long-term shareholders of the Fund may pay more than the equivalent of the
maximum front-end sales charges otherwise permitted by the Rules of Fair
Practice of the National Association of Securities Dealers, Inc. (the "NASD").
The foregoing table has not been audited by Coopers & Lybrand L.L.P., the Fund's
independent accountants. THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION
OF FUTURE EXPENSES AND ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.

<PAGE>

FINANCIAL HIGHLIGHTS

The Fund is a diversified, open-end management investment company
authorized to offer shares in three separate investment portfolios: the PCS
Money Market Portfolio, the PCS Tax-Free Money Market Portfolio or the PCS
Government Obligations Money Market Portfolio (collectively, the "Portfolios").
The PCS Money Market Portfolio and the PCS Government Obligations Money Market
Portfolio are currently in operation. The Fund was incorporated in Maryland on
January 5, 1989 and commenced operations of the PCS Money Market Portfolio on
August 4, 1989 and of the PCS Government Obligations Money Market Portfolio on
March 12, 1992. The financial highlights included in this table have been
derived from the Fund's financial statements for the PCS Money Market Portfolio
and the PCS Government Obligations Money Market Portfolio for the indicated
fiscal periods since operations commenced. These financial statements have been
audited by Coopers & Lybrand L.L.P., independent accountants, whose report
thereon accompanies the financial statements which appear in the Statement of
Additional Information. The financial highlights should be read in conjunction
with the financial statements and related notes included in the Statement of
Additional Information which can be obtained at no charge by calling the Fund at
(800) 533-7719.

PCS MONEY MARKET PORTFOLIO

<TABLE>
<CAPTION>
FOR THE PERIOD
AUGUST 4, 1989
FOR THE YEAR ENDED JUNE 30, (COMMENCEMENT
---------------------------------------------------------- OF OPERATIONS)
1995 1994 1993 1992 1991 TO JUNE 30, 1990
------- ------- -------- -------- -------- ----------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD . $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------- -------- -------- -------- ---------
Income from investment
operations:
Net investment income .0446 .0246 .0243 .0402 .0652 .0690
Net realized gains on
investments ...... .0001 -- .0001 -- -- --
Less dividends to
shareholders from:
Net investment income (.0446) (.0246) (.0243) (.0402) (.0652) (.0690)
Net realized gains .. (.0001) -- (.0001) -- -- --
------- ------- -------- -------- -------- ---------
NET ASSET VALUE,
END OF PERIOD ....... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======= ======= ======== ======== ======== =========
Total return ........... 4.55% 2.49% 2.47% 4.11% 6.72% 7.12%(c)
Ratio of expenses to
average net assets .. .98%(b) .98%(b) .98%(b) .98%(b) .98%(b) .98%(a)(b)
Ratio of net investment
income to average
net assets .......... 4.45%(b) 2.45%(b) 2.44%(b) 3.97%(b) 6.40%(b) 7.53%(a)(b)
Net assets at end of
period (000) ........ $171,515 $176,599 $156,310 $190,034 $140,594 $76,463

<FN>
- ------------
(a) Annualized.
(b) Without the voluntary waiver of advisory and distribution fees, the ratio
of expenses to average net assets would have been 1.18%, 1.19%, 1.20%,
1.27%, 1.27% and 1.48% (annualized), respectively. The ratio of net
investment income to average net assets would have been 4.25%, 2.24%,
2.22%, 3.68%, 6.11% and 7.03% (annualized), respectively. (c) Not
annualized. Total return, if on annualized basis, would have been 7.90%.

</FN>
</TABLE>

4
<PAGE>

PCS GOVERNMENT OBLIGATIONS MONEY MARKET PORTFOLIO

<TABLE>
<CAPTION>
FOR THE PERIOD
MARCH 12, 1992
FOR THE YEAR ENDED JUNE 30, (COMMENCEMENT
---------------------------------- OF OPERATIONS)
1995 1994 1993 TO JUNE 30, 1992
-------- -------- -------- -----------------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD .. $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- --------
Income from investment operations:
Net investment income .............. .0448 .0243 .0246 .0094
Net realized gains on investments .. -- .0011 .0002 --
Less dividends to shareholders from:
Net investment income .............. (.0448) (.0243) (.0246) (.0094)
Net realized gains ................. -- (.0011) (.0002) --
-------- -------- -------- --------
NET ASSET VALUE, END OF PERIOD ........ $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ========
Total return .......................... 4.58% 2.45% 2.51% 0.94%(c)
Ratio of expenses to average net assets .95%(b) .95%(b) .95%(b) .95%(a)(b)
Ratio of net investment income to
average net assets .................... 4.61%(b) 2.40%(b) 2.50%(b) 3.07%(a)(b)
Net assets at end of period (000) ..... $ 67,505 $102,551 $101,736 $269,627

<FN>
- --------

(a) Annualized.

(b) Without the voluntary waiver of advisory and distribution fees, the ratio
of expenses to average net assets would have been 1.12%, 1.22%, 1.19% and
1.29% annualized, and the ratio of net investment income to average net
assets would have been 4.44%, 2.13%, 2.26% and 2.73% annualized. (c) Not
annualized. Total return, if on annualized basis, would have been 3.16%.

</FN>
</TABLE>

5
<PAGE>

INVESTMENT OBJECTIVES AND POLICIES

PCS MONEY MARKET PORTFOLIO

The PCS Money Market Portfolio's investment objective is to provide as high
a level of current interest income as is consistent with maintaining liquidity
and stability of principal. Portfolio obligations held by the PCS Money Market
Portfolio have remaining maturities of 397 days or less (except that portfolio
securities which are subject to repurchase agreements may bear maturities
exceeding 397 days). In pursuing its investment objective, the PCS Money Market
Portfolio invests in a broad range of U.S. dollar-denominated instruments, such
as government, bank and commercial obligations, that may be available in the
money markets and that satisfy strict credit quality standards imposed by the
Portfolio in accordance with applicable law ("Money Market Instruments"). The
following descriptions illustrate the types of Money Market Instruments in which
the PCS Money Market Portfolio invests.

BANK OBLIGATIONS. The Portfolio may purchase bank obligations, such as
certificates of deposit, bankers' acceptances and time deposits, including U.S.
dollar-denominated instruments issued or supported by the credit of U.S. or
foreign banks or savings institutions having total assets at the time of
purchase in excess of $1 billion. The Portfolio may invest substantially in U.S.
dollar-denominated obligations of foreign banks or foreign branches of U.S.
banks where the Advisor deems the instrument to present minimal credit risks and
to otherwise satisfy applicable quality standards. Such investments may
nevertheless entail risks that are different from those of investments in
domestic obligations of U.S. banks due to differences in political, regulatory
and economic systems and conditions. These risks may include future unfavorable
political and economic developments, possible withholding taxes on interest
income, seizure or nationalization of foreign deposits, currency controls,
interest limitations, or other governmental restrictions which might affect the
payment of principal or interest on the securities held in a Portfolio.
Additionally, these institutions may be subject to less stringent reserve
requirements and to different accounting, auditing, reporting and recordkeeping
requirements than those applicable to domestic branches of U.S. banks. The
Portfolio may also make interest-bearing savings deposits in commercial and
savings banks in amounts not in excess of 5% of its total assets.

COMMERCIAL PAPER. The Portfolio may purchase commercial paper rated (at the
time of purchase) "A-1" by Standard & Poor's Ratings Group ("S&P") or "Prime-1"
by Moody's Investors Service, Inc. ("Moody's") or, when deemed advisable by the
Advisor and to the extent permitted under applicable regulations, limited
amounts of "high quality" issues rated "A-2" or "Prime-2" by S&P or Moody's,
respectively. The Portfolio may also purchase unrated commercial paper provided
that such paper is determined by the Advisor to be of comparable quality
pursuant to guidelines approved by the Fund's Board of Directors.

VARIABLE RATE DEMAND NOTES. The Portfolio may purchase variable rate demand
notes, which are unsecured instruments that permit the indebtedness thereunder
to vary and provide for periodic adjustment in the interest rate. Although the
notes are not normally traded and there may be no active secondary market in the
notes, the Portfolio will be able (at any time or during the specified periods
not exceeding 397 days, depending upon the note involved) to demand payment of
the principal of a note. The notes are not typically rated by credit rating
agencies, but issuers of variable rate demand notes must satisfy the same
criteria as set forth above for issuers of commercial paper. If an issuer of a
variable rate demand note defaulted on its payment obligation, the Portfolio
might be unable to dispose of the note because of the absence of an active
secondary market. For this or other reasons, the Portfolio might suffer a loss
to the extent of the default. The Portfolio invests in variable rate demand
notes only when the Advisor deems the investment to involve minimal credit risk
and to otherwise satisfy applicable quality standards. The Advisor also monitors
the continuing creditworthiness of issuers of such notes to determine whether
the Portfolio should continue to hold such notes.

6
<PAGE>

REPURCHASE AGREEMENTS. The Portfolio may agree to purchase Money Market
Instruments from financial institutions subject to the seller's agreement to
repurchase them at an agreed upon time and price ("repurchase agreements"). The
securities held subject to a repurchase agreement may have stated maturities
exceeding 397 days, provided the repurchase agreement itself matures in less
than 397 days. The financial institutions with whom the Portfolio may enter into
repurchase agreements will be banks that are the issuers of securities
acceptable for purchase by the Portfolio and non-bank dealers of U.S. Government
securities that are listed on the Federal Reserve Bank of New York's list of
reporting dealers. The Portfolio will enter into repurchase agreements with
sellers that the Advisor considers creditworthy under criteria approved by the
Board of Directors. The seller under a repurchase agreement will be required to
maintain the value of the securities subject to the agreement at not less than
the repurchase price. The Advisor will mark to market daily the value of the
securities, and will, if necessary, require the seller to maintain additional
securities, to ensure that the value is not less than the repurchase price.
Default by the seller would, however, expose the Portfolio to possible loss
because of adverse market action or delays in connection with the disposition of
the underlying obligations.

U.S. GOVERNMENT OBLIGATIONS. The Portfolio may purchase obligations issued
or guaranteed by the U.S. Government or its agencies and instrumentalities.
Obligations of certain agencies and instrumentalities of the U.S. Government are
backed by the full faith and credit of the United States. These securities
include U.S. Treasury Securities, obligations of the Government National
Mortgage Association ("GNMA"), the Farmers Home Administration, and the
Export-Import Bank. Others are backed by the right of the issuer to borrow from
the U.S. Treasury or are backed only by the credit of the agency or
instrumentality issuing the obligations; some examples of agencies or
instrumentalities issuing these obligations are the Federal Farm Credit System
and the Federal Home Loan Banks.

MORTGAGE-BACKED SECURITIES. Mortgage loans made by banks, savings and loan
institutions, and other lenders are often assembled into pools, the interests in
which are issued and guaranteed by an agency or instrumentality of the U.S.
Government, though not necessarily by the U.S. Government itself. Interests in
such pools are what this Prospectus calls "mortgage-backed securities."

One such type of mortgage-backed security in which the Portfolio may invest
is a Government National Mortgage Association ("GNMA") Certificate. GNMA
Certificates are backed as to the timely payment of principal and interest by
the full faith and credit of the U.S. Government. Another type is a Federal
National Mortgage Association ("FNMA") Certificate. Principal and interest
payments on FNMA Certificates are guaranteed only by FNMA itself, not by the
full faith and credit of the U.S. Government. A third type of mortgage-backed
security in which the Portfolio may invest is a Federal Home Loan Mortgage
Association ("FHLMC") Participation Certificate. This type of security is
guaranteed by FHLMC as to timely payment of principal and interest but, like a
FNMA security, it is not guaranteed by the full faith and credit of the U.S.
Government. For a further discussion of GNMA, FNMA and FHLMC, see
"Mortgage-Related Debt Securities" in the Statement of Additional Information.

Each of the mortgage-backed securities described above is characterized by
monthly payments to the security holder, reflecting the monthly payments made by
the mortgagors of the underlying mortgage loans. The payments to the security
holders (such as the Portfolio), like the payments on the underlying loans,
represent both principal and interest. Although the underlying mortgage loans
are for specified periods of time, such as twenty or thirty years, the borrowers
can, and typically do, repay them sooner. Thus, the security holders frequently
receive prepayments of principal, in addition to the principal which is part of
the regular monthly payments. A borrower is more likely to prepay a mortgage
which bears a relatively high rate of interest. This means that, in times of
declining interest rates, some of the Portfolio's higher yielding securities
might be repaid and thereby converted to cash and the Portfolio will be forced
to accept lower interest rates when that cash is used

7
<PAGE>

to purchase additional securities. The Portfolio normally will not distribute
principal payments (whether regular or prepaid) to its shareholders. Interest
received by the Portfolio will, however, be distributed to shareholders in the
form of dividends.

REVERSE REPURCHASE AGREEMENTS. The Portfolio may enter into reverse
repurchase agreements with respect to portfolio securities. At the time the
Portfolio enters into a reverse repurchase agreement, it will place in a
segregated custodial account liquid assets such as U.S. Government securities or
other liquid high grade debt securities having a value equal to or greater than
the repurchase price (including accrued interest) and will subsequently monitor
the account to ensure that such value is maintained. Reverse repurchase
agreements involve the risk that the market value of the securities sold by the
Portfolio may decline below the price of the securities the Portfolio is
obligated to repurchase. The Portfolio's investment of the proceeds of a reverse
repurchase agreement is the speculative factor known as leverage. The Portfolio
may enter into a reverse repurchase agreement only if the interest income from
the investment of the proceeds is greater than the interest expense of the
transaction and the proceeds are invested for a period no longer than the term
of the agreement. The Portfolio will enter into reverse repurchase agreements
with banks and broker dealers that the Advisor considers creditworthy under
criteria approved by the Board of Directors. Reverse repurchase agreements are
considered to be borrowings by the Portfolio under the Investment Company Act of
1940, as amended (the "1940 Act").

MUNICIPAL OBLIGATIONS. In addition, the Portfolio may, when deemed
appropriate by the Advisor in light of the Portfolio's investment objective,
invest without limitation in high quality, short-term Municipal Obligations
issued by state and local governmental issuers, the interest on which may be
taxable or tax-exempt for federal income tax purposes, provided that such
obligations carry yields that are competitive with those of other types of Money
Market Instruments of comparable quality. For a more complete discussion of
Municipal Obligations, see "Investment Objectives and Policies." In addition,
the Portfolio may acquire "stand-by commitments" with respect to Municipal
Obligations held in its portfolio. Under a stand-by commitment, a dealer would
agree to purchase at the Portfolio's option specified Municipal Obligations at a
specified price. The acquisition of a stand-by commitment may increase the cost,
and thereby reduce the yield, of the Municipal Obligation to which such
commitment relates. The Portfolio will acquire stand-by commitments solely to
facilitate portfolio liquidity and does not intend to exercise its rights
thereunder for trading purposes.

WHEN-ISSUED SECURITIES. The Portfolio may purchase portfolio securities on
a "when-issued" basis. When-issued securities are securities purchased for
delivery beyond the normal settlement date at a stated price and yield. The
Portfolio will generally not pay for such securities or start earning interest
on them until they are received. Securities purchased on a when-issued basis are
recorded as an asset at the time the commitment is entered into and are subject
to changes in value prior to delivery based upon changes in the general level of
interest rates. The Portfolio expects that commitments to purchase when-issued
securities will not exceed 25% of the value of its total assets absent unusual
market conditions. The Portfolio does not intend to purchase when-issued
securities for speculative purposes but only in furtherance of its investment
objective.

LENDING OF SECURITIES. The Portfolio may also lend its portfolio securities
to financial institutions in accordance with the investment restrictions
described below. Such loans would involve risks of delay in receiving additional
collateral in the event the value of the collateral decreased below the value of
the securities loaned or of delay in recovering the securities loaned or even
loss of rights in the collateral should the borrower of the securities fail
financially. However, loans will be made only to borrowers deemed by the Advisor
to be of good standing and only when, in the Advisor's judgment, the income to
be earned from the loans justifies the attendant risks.

The Portfolio will limit its purchase of illiquid obligations to 10% of the
value of the Portfolio's total assets. Illiquid obligations include any time
deposits with maturities longer than seven days, securities with restrictions

8
<PAGE>

on dispositions, repurchase agreements with maturities greater than seven days,
variable rate demand notes that cannot be disposed of promptly within seven
business days and in the usual course of business without taking a reduced price
and other securities the Advisor determines are illiquid.

The PCS Money Market Portfolio's investment objective and policies
described above are not fundamental and may be changed by the Fund's Board of
Directors without the affirmative vote of the holders of a majority of all
outstanding Shares representing interests in the Portfolio. Such changes may
result in investment objectives which differ from those described above. There
is no assurance that the investment objective of the PCS Money Market Portfolio
will be achieved. The Portfolio may not, however, change the investment
limitations summarized below without such a vote of shareholders. (A more
detailed description of the following investment limitations, together with
other investment limitations that cannot be changed without a vote of
shareholders, is contained in the Statement of Additional Information under
"Investment Objectives and Policies.")

The PCS Money Market Portfolio may not:

1. Purchase any securities other than Money Market Instruments but the
Portfolio may make interest-bearing savings deposits in amounts not in
excess of 5% of the value of the Portfolio's assets and may make time
deposits.

2. Borrow money, except that the Fund may (a) borrow from banks
for temporary purposes and in amounts not in excess of 10% of the value of
the Portfolio's assets at the time of such borrowing, and (b) invest in
reverse repurchase agreements, provided that no borrowing pursuant to (a)
and (b) is permitted unless, after such borrowing, there is asset coverage
of at least 300% for all borrowings of the Portfolio; or mortgage, pledge
or hypothecate any of its assets except in connection with any such
borrowing and in amounts not in excess of 10% of the value of the
Portfolio's assets at the time of such borrowing; or purchase portfolio
securities while borrowings in excess of 5% of the Portfolio's net assets
are outstanding. (With the exception of investments in reverse repurchase
agreements in certain instances, this borrowing provision is not for
investment leverage, but solely to facilitate management of the Portfolio's
securities by enabling the Portfolio to meet redemption requests where the
liquidation of portfolio securities is deemed to be disadvantageous or
inconvenient.)

4. Purchase any securities which would cause 25% or more of
the value of its total assets at the time of such purchase to be invested
in the securities of one or more issuers conducting their principal
business activities in the same industry, provided that there is no
limitation with respect to investments in securities issued or guaranteed
by the U.S. Government or its agencies and instrumentalities or in
obligations of U.S. banks or their domestic branches.

5. Purchase securities of any one issuer, other than securities
issued or guaranteed by the U.S. Government or its agencies and
instrumentalities, if immediately after and as a result of such purchase
more than 5% of the value of its total assets would be invested in the
securities of such issuer, or more than 10% of the outstanding voting
securities of such issuer would be owned by the Portfolio, except that up
to 25% of the value of the Portfolio's total assets may be invested without
regard to such 5% limitation. Under applicable regulations, however,
the Portfolio may invest more than 5% of its assets in any one issuer for
no more than three days.

9
<PAGE>

PCS TAX-FREE MONEY MARKET PORTFOLIO

The PCS Tax-Free Money Market Portfolio's investment objective is to
provide as high a level of current interest income exempt from federal income
taxes as is consistent with maintaining liquidity and relative stability of
principal. The PCS Tax-Free Money Market Portfolio invests substantially all of
its assets in a diversified portfolio of high quality, short-term Municipal
Obligations, the interest on which, in the opinion of bond counsel or counsel to
the issuer, as the case may be, is exempt from the regular federal income tax.
During periods of normal market conditions, at least 80% of the net assets of
the PCS Tax-Free Money Market Portfolio will be invested in short-term Municipal
Obligations, the interest on which is Tax-Exempt Interest. All portfolio
investments must satisfy strict credit quality standards imposed by the
Portfolio in accordance with applicable law.

MUNICIPAL OBLIGATIONS. The Portfolio invests in short-term Municipal
Obligations which are determined by the Advisor to present minimal credit risks
and to otherwise satisfy applicable quality standards pursuant to guidelines
established by the Fund's Board of Directors and which at the time of purchase
are considered to be of "high quality" -- e.g., rated "AA" or higher by S&P or
"Aa" or higher by Moody's in the case of bonds; rated "SP-1" by S&P or "MIG-1"
by Moody's in the case of notes; rated "VMIG-1" by Moody's in the case of
variable rate demand notes; or rated "A-1" by S&P or "Prime-1" by Moody's in the
case of tax-exempt commercial paper. In addition, the Portfolio may invest in
limited amounts of "high quality" notes and tax-exempt commercial paper rated
"MIG-2," "VMIG-2," or "Prime-2" by Moody's or "A-2" by S&P if deemed advisable
by the Advisor. The Portfolio may also purchase securities that are unrated at
the time of purchase provided that the securities are determined to be of
comparable quality by the Advisor pursuant to guidelines approved by the Fund's
Board of Directors. The applicable Municipal Obligations ratings are described
in the Appendix to the Statement of Additional Information.

The Portfolio may hold uninvested cash reserves pending investment during
temporary defensive periods or if, in the opinion of the Advisor, suitable
obligations bearing Tax-Exempt Interest are unavailable. There is no percentage
limitation on the amount of assets which may be held uninvested during temporary
defensive periods. Uninvested cash reserves will not earn income.

The two principal classifications of Municipal Obligations are "general
obligation" securities and "revenue" securities. General obligation securities
are secured by the issuer's pledge of its full faith, credit and taxing power
for the payment of principal and interest. Revenue securities are payable only
from the revenues derived from a particular facility or class of facilities or,
in some cases, from the proceeds of a special excise tax or other specific
excise tax or other specific revenue source such as the user of the facility
being financed. Revenue securities include private activity bonds which are not
payable from the unrestricted revenues of the issuer. Consequently, the credit
quality of private activity bonds is usually directly related to the credit
standing of the corporate user of the facility involved. Municipal Obligations
may also include "moral obligation" bonds, which are normally issued by special
purpose public authorities. If the issuer of moral obligation bonds is unable to
meet its debt service obligations from current revenues, it may draw on a
reserve fund, the restoration of which is a moral commitment but not a legal
obligation of the state or municipality which created the issuer.

Municipal Obligations may include variable rate demand notes. Such notes
are frequently not rated by credit rating agencies, but unrated notes purchased
by the Portfolio will have been determined by the Advisor to be of comparable
quality at the time of the purchase to rated instruments purchasable by the
Portfolio. Where necessary to ensure that a note is of "high quality," the
Portfolio will require that the issuer's obligation to pay the principal of the
note be backed by an unconditional bank letter or line of credit, guarantee or
commitment to lend. While there may be no active secondary market with respect
to a particular variable rate demand note purchased by a Portfolio, the
Portfolio may, upon the notice specified in the note, demand payment

10
<PAGE>

of the principal of the note at any time or during specified periods not
exceeding 397 days, depending upon the instrument involved. The absence of such
an active secondary market, however, could make it difficult for the Portfolio
to dispose of a variable rate demand note if the issuer defaulted on its payment
obligation or during the periods that the Portfolio is not entitled to exercise
its demand rights. The Portfolio could, for this or other reasons, suffer a loss
to the extent of the default. The Portfolio invests in variable rate demand
notes only when the Portfolio's Advisor deems the investment to involve minimal
credit risk and to otherwise satisfy applicable quality standards. The Advisor
also monitors the continuing creditworthiness of issuers of such notes to
determine whether the Portfolio should continue to hold such notes.

Current federal tax law limits the types and volume of bonds qualifying for
the federal income tax exemption of interest. Such limitations may have an
effect on the ability of the Portfolio to purchase sufficient amounts of
tax-exempt securities. In addition, interest on certain bonds, although exempt
from the regular federal income tax, may be subject to alternative minimum tax.
See the discussion below under "Taxes" and the Statement of Additional
Information.

Although the PCS Tax-Free Money Market Portfolio may invest more than 25%
of its net assets in (i) Municipal Obligations whose issuers are in the same
state, (ii) Municipal Obligations the interest on which is paid solely from
revenues of similar projects, and (iii) private activity bonds bearing
Tax-Exempt Interest, it does not currently intend to do so on a regular basis.
To the extent the PCS Tax-Free Money Market Portfolio's assets are concentrated
in Municipal Obligations that are payable from the revenues of similar projects
or are issued by issuers located in the same state, the Portfolio will be
subject to the peculiar risks presented by the laws and economic conditions
relating to such states or projects to a greater extent than it would be if its
assets were not so concentrated.

WHEN-ISSUED SECURITIES. The Portfolio may also purchase portfolio
securities on a "when-issued" basis. When-issued securities are securities
purchased for delivery beyond the normal settlement date at a stated price and
yield. The Portfolio will generally not pay for such securities or start earning
interest on them until they are received. Securities purchased on a when-issued
basis are recorded as an asset at the time the commitment is entered into and
are subject to changes in value prior to delivery based upon changes in the
general level of interest rates. The Portfolio expects that commitments to
purchase when-issued securities will not exceed 25% of the value of its total
assets absent unusual market conditions. The Portfolio does not intend to
purchase when-issued securities for speculative purposes but only in furtherance
of its investment objective.

STAND-BY COMMITMENTS. The Portfolio may acquire "stand-by commitments" with
respect to Municipal Obligations held in its portfolio. Under a stand-by
commitment, a dealer would agree to purchase at the Portfolio's option specified
Municipal Obligations at a specified price. The acquisition of a stand-by
commitment may increase the cost, and thereby reduce the yield, of the Municipal
Obligation to which such commitment relates. The Portfolio will acquire stand-by
commitments solely to facilitate portfolio liquidity and does not intend to
exercise its rights thereunder for trading purposes.

The Portfolio will not purchase securities with restrictions on disposition
or other securities which in the opinion of the Advisor are illiquid if, as a
result, more than 10% of the value of the Portfolio's total assets will be
illiquid. For this purpose, variable rate demand notes that can not be disposed
of promptly within seven business days and in the usual course of business
without taking a reduced price are considered illiquid.

The PCS Tax-Free Money Market Portfolio's investment objective and the
policies described above are not fundamental and may be changed by the Fund's
Board of Directors without the affirmative vote of the holders of a majority of
the PCS Tax-Free Money Market Portfolio's outstanding shares. Such changes may
result in investment objectives which differ from those described above. There
is no assurance that the investment objective of the PCS Tax-Free Money Market
Portfolio will be achieved. The PCS Tax-Free Money

11
<PAGE>

Market Portfolio may not, however, change the following investment limitations
without such a vote of shareholders. (A more detailed description of the
following investment limitations, together with other investment limitations
that cannot be changed without a vote of shareholders, is contained in the
Statement of Additional Information under "Investment Objectives and Policies.")

The PCS Tax-Free Money Market Portfolio may not:

1. Purchase the securities of any issuer, other than securities issued
or guaranteed by the U.S. Government or its agencies and instrumentalities,
if immediately after and as a result of such purchase more than 5% of the
value of the Portfolio's assets would be invested in the securities of such
issuer or more than 10% of the outstanding voting securities of such issuer
would be owned by the Portfolio, except that up to 25% of the value of the
Portfolio's assets may be invested without regard to this 5% limitation.
Under applicable regulations, however, the Portfolio may invest more than
5% of its assets in any one issuer for no more than three days.

2. Borrow money, except from banks for temporary purposes and then in
amounts not in excess of 10% of the value of the Portfolio's assets at the
time of such borrowing, and only if after such borrowing there is asset
coverage of at least 300% for all borrowings of the Portfolio; or mortgage,
pledge or hypothecate any of its assets except in connection with any such
borrowing and in amounts not in excess of 10% of the value of the
Portfolio's assets at the time of such borrowing; or purchase portfolio
securities while borrowings in excess of 5% of the Portfolio's net assets
are outstanding. (With the exception of reverse repurchase agreements in
certain instances, this borrowing provision is not for investment leverage,
but solely to facilitate management of the Portfolio's securities by
enabling the Portfolio to meet redemption requests where the liquidation of
portfolio securities is deemed to be disadvantageous or inconvenient.)

3. Purchase any securities which would cause, at the time of purchase,
more than 25% of the value of the total assets of the Portfolio to be
invested in the obligations of issuers in the same industry.

In addition, without the affirmative vote of the holders of a majority of
the Portfolio's outstanding shares, the Portfolio may not change its policy of
investing during normal market conditions at least 80% of its net assets in
obligations the interest on which is Tax-Exempt Interest.

PCS GOVERNMENT OBLIGATIONS MONEY MARKET PORTFOLIO

The PCS Government Obligations Money Market Portfolio's investment
objective is to provide as high a level of current interest income as is
consistent with maintaining liquidity and stability of principal. It seeks to
achieve such objective by investing in short-term U.S. Treasury bills, notes and
other obligations issued or guaranteed by the U.S. Government or it agencies or
instrumentalities, and entering into repurchase agreements relating to such
obligations. Purchases of portfolio securities must satisfy strict credit
quality standards imposed by the Portfolio in accordance with applicable law.
The types of U.S. Government obligations in which the Portfolio may invest
include a variety of U.S. Treasury obligations, which differ only in their
interest rates, maturities, and time of issuance, and obligations issued or
guaranteed by the U.S. Government or its agencies or instrumentalities,
including mortgage-related securities. Obligations of certain agencies and
instrumentalities of the U.S. Government, such as the Government National
Mortgage Association and the Export-Import Bank of the United States, are
supported by the full faith and credit of the U.S. Treasury; others, such as
those of the Federal National Mortgage Association, are supported by the right
of the issuer to borrow from the Treasury; others, such as those of the Student
Loan Marketing Association, are supported by the discretionary authority of the
U.S. Government to purchase the agency's obligations; still others, such as
those of the Federal Farm Credit

12
<PAGE>

Banks or the Federal Home Loan Mortgage Corporation, are supported only by
the credit of the instrumentality. No assurance can be given that the U.S.
Government would provide financial support to U.S. Government-sponsored agencies
or instrumentalities if it is not obligated to do so under law. The Portfolio
will invest in the obligations of such agencies or instrumentalities only when
the Advisor believes that the credit risk with respect thereto is minimal and
that applicable quality standards have been satisfied.

Securities issued or guaranteed by the U.S. Government, its agencies and
instrumentalities have historically involved little risk of loss of principal if
held to maturity. However, due to fluctuations in interest rates, the market
value of such securities may vary during the period a shareholder owns Shares
representing an interest in the Portfolio. Certain government securities held by
the Portfolio may have remaining maturities exceeding 397 days if such
securities provide for adjustments in their interest rates not less frequently
than annually and the adjustments are sufficient to cause the securities to have
market values, after adjustment, which approximate their par values.

REPURCHASE AGREEMENTS. The Portfolio may agree to purchase government
securities from financial institutions subject to the seller's agreement to
repurchase them at an agreed upon time and price ("repurchase agreements"). The
securities held subject to a repurchase agreement may have stated maturities
exceeding 397 days, provided the repurchase agreement itself matures in less
than 397 days. The financial institutions with whom the Portfolio may enter into
repurchase agreements will be banks that are the issuers of securities
acceptable for purchase by the Portfolio and non-bank dealers of U.S. Government
securities that are listed on the Federal Reserve Bank of New York's list of
reporting dealers. The Advisor will consider the creditworthiness of a seller in
determining whether to have the Portfolio enter into a repurchase agreement. The
seller under a repurchase agreement will be required to maintain the value of
the securities subject to the agreement at not less than the repurchase price.
The Advisor will mark to market daily the value of the securities, and will, if
necessary, require the seller to maintain additional securities, to ensure that
the value is not less than the repurchase price. Default by or bankruptcy of the
seller would, however, expose the Portfolio to possible loss because of adverse
market action or delay in connection with the disposition of the underlying
obligations.

REVERSE REPURCHASE AGREEMENTS. The Portfolio may enter into reverse
repurchase agreements with respect to portfolio securities. At the time the
Portfolio enters into a reverse repurchase agreement, it will place in a
segregated custodial account liquid assets such as U.S. Government securities or
other liquid high grade debt securities having a value equal to or greater than
the repurchase price (including accrued interest) and will subsequently monitor
the account to ensure that such value is maintained. Reverse repurchase
agreements involve the risk that the market value of the securities sold by the
Portfolio may decline below the price of the securities the Portfolio is
obligated to repurchase. The Portfolio's investment of the proceeds of a reverse
repurchase agreement is the speculative factor known as leverage. The Portfolio
may enter into a reverse repurchase agreement only if the interest income from
the investment of the proceeds is greater than the interest expense of the
transaction and the proceeds are invested for a period no longer than the term
of the agreement. The Portfolios will enter into reverse repurchase agreements
with banks and broker dealers that the Advisor considers creditworthy under
criteria approved by the Board of Directors. Reverse repurchase agreements are
considered to be borrowings by the Portfolio under the 1940 Act.

MORTGAGE-BACKED SECURITIES. Mortgage loans made by banks, savings and
loan institutions, and other lenders are often assembled into pools,
the interests in which are issued and guaranteed by an agency or
instrumentality of the U.S. Government, though not necessarily by the
U.S. Government itself. Interests in such pools are what this
Prospectus calls "mortgage-backed securities."

<PAGE>

Mortgage Association ("FNMA") Certificate. Principal and interest payments
on FNMA Certificates are guaranteed only by FNMA itself, not by the full faith
and credit of the U.S. Government. A third type of mortgage-backed security in
which the Portfolio may invest is a Federal Home Loan Mortgage Association
("FHLMC") Participation Certificate. This type of security is guaranteed by
FHLMC as to timely payment of principal and interest but, like FNMA security, it
is not guaranteed by the full faith and credit of the U.S. Government. For a
further discussion of GNMA, FNMA and FHLMC, see "Mortgage-Related Debt
Securities" in the Statement of Additional Information.

The Portfolio will limit its purchase of illiquid securities, including
repurchase agreements with maturities in excess of seven days, securities with
restrictions on disposition and other instruments in the Portfolio which are
considered illiquid, to 10% of the Portfolio's total assets.

The PCS Government Obligations Money Market Portfolio's investment
objective and policies described above are not fundamental and may be changed by
the Fund's Board of Directors without the affirmative vote of the holders of a
majority of the Portfolio's outstanding shares. Such changes may result in
investment objectives which differ from those described above. There is no
assurance that the investment objective of the PCS Government Obligations Money
Market Portfolio will be achieved. The investment limitations summarized below
may not be changed, however, without such a vote of shareholders. (A more
detailed description of the following investment limitations is contained in the
Statement of Additional Information under "Investment Objectives and Policies.")

The PCS Government Obligations Money Market Portfolio may not:

1. Purchase securities other than U.S. Treasury bills, notes and other
obligations issued or guaranteed by the U.S. Government, its agencies or
instrumentalities, and repurchase agreements relating to such obligations.

2. Borrow money, except from banks for temporary purposes, and except
for reverse repurchase agreements, and then in an amount not exceeding 10%
of the value of the Portfolio's total assets, and only if after such
borrowing there is asset coverage of at least 300% for all borrowings of
the Portfolio; or

14
<PAGE>

mortgage, pledge or hypothecate its assets except in connection with any
such borrowing and in amounts not in excess of 10% of the value of the
Portfolio's assets at the time of such borrowing; or purchase portfolio
securities while borrowings in excess of 5% of the Portfolio's net assets
are outstanding. (With the exception of investments in reverse repurchase
agreements in certain instances, this borrowing provision is not for
investment leverage, but solely to facilitate management of the Portfolio
by enabling the Portfolio to meet redemption requests where liquidation of
Portfolio securities is deemed to be inconvenient or disadvantageous.)

3. Make loans except that the Portfolio may purchase or hold debt
obligations in accordance with its investment objective, policies and
limitations, may enter into repurchase agreements for securities, and may
lend portfolio securities against collateral, consisting of cash or
securities which are consistent with the Portfolio's permitted investments,
which is equal at all times to at least 100% of the value of the securities
loaned. There is no investment restriction on the amount of securities that
may be loaned, except that payments received on such loans, including
amounts received during the loan on account of interest on the securities
loaned, may not (together with all non-qualifying income) exceed 10% of the
Portfolio's annual gross income (without offset for realized capital gains)
unless, in the opinion of counsel to the Fund, such amounts are qualifying
income under federal income tax provisions applicable to regulated
investment companies.

PURCHASE AND REDEMPTION OF SHARES

PURCHASE PROCEDURES

GENERAL. Shares are sold without a sales load on a continuous basis by the
Distributor. Investors may purchase Shares through an account maintained by the
investor with his brokerage firm (the "Account"). The minimum initial investment
is $5,000, and the minimum subsequent investment is $500. The Fund in its sole
discretion may accept or reject any order for purchases of Shares.

All payments for initial and subsequent investments should be in U.S.
dollars. Purchases will be effected at the net asset value next determined after
PFPC, the Fund's transfer agent, has received a purchase order in proper form
and the Fund's custodian has Federal Funds immediately available to it. In those
cases where payment is made by check, Federal Funds will generally become
available two Business Days after the check is received. Orders which are
accompanied by Federal Funds, or are converted into Federal Funds, by 12:00 noon
Eastern Time, will be executed as of 12:00 noon that Business Day. Orders which
are accompanied by Federal Funds, or are converted into Federal Funds, after
12:00 noon Eastern Time but prior to 4:00 p.m. Eastern Time on any Business Day
of the Fund, will be executed as of the close of the New York Stock Exchange
(the "NYSE") on that Business Day. Orders which are accompanied by Federal Funds
or are converted to Federal Funds after 4:00 p.m. Eastern Time on a Business Day
will be processed as of 12:00 noon Eastern Time on the following Business Day. A
"Business Day" is any day that both the NYSE and the Federal Reserve Bank of
Philadelphia (the "FRB") are open.

PURCHASES THROUGH AN ACCOUNT. Share purchases may be effected through an
investor's Account with his broker through procedures established in connection
with the requirements of Accounts at such broker. In such event, beneficial
ownership of Shares will be recorded by the broker and will be reflected in the
Account statements provided by the broker to such investors. A broker may impose
minimum investor Account requirements. Although a broker does not impose a sales
charge for purchases of Shares, depending on the terms of an investor's Account
with his broker, the broker may charge an investor's Account fees for automatic
investment and other services provided to the Account. Information concerning
Account requirements, services and charges should be obtained from an investor's
broker. This Prospectus should be read in conjunction with any information
received from a broker.

15
<PAGE>

A broker may offer investors maintaining Accounts the ability to purchase
Shares under an automatic purchase program (a "Purchase Program") established by
a participating broker. An investor who participates in a Purchase Program will
have his "free-credit" cash balances in his Account automatically invested in
Shares of the Portfolio which he has designated (the "Designated Portfolio")
under the Purchase Program. The frequency of investments and the minimum
investment requirement will be established by the broker and the Fund. In
addition, the broker may require a minimum amount of cash and/or securities to
be deposited in an Account for participants in its Purchase Program. The
description of the particular broker's Purchase Program should be read for
details, and any inquiries concerning an Account under a Purchase Program should
be directed to the broker. A participant in a Purchase Program may change the
designation of the Designated Portfolio at any time by so instructing his
broker.

If a broker makes special arrangements under which orders for Shares are
received by PFPC prior to 12:00 noon Eastern Time, and the broker guarantees
that payment for such Shares will be made in Federal Funds to the Fund's
custodian prior to 4:00 p.m. Eastern Time, on the same day, such purchase orders
will be effective and Shares will be purchased at the offering price in effect
as of 12:00 noon Eastern Time on the date the purchase order is received by
PFPC.

DIRECT PURCHASES. An investor may also make direct investments at any time
in any Portfolio he selects through any broker that has entered into a dealer
agreement with the Distributor (a "Dealer"). An investor may make an initial
investment in any of the Portfolios by mail by fully completing and signing an
application obtained from a Dealer (the "Application"), specifying the Portfolio
in which he wishes to invest, and mailing it, together with a check payable to
"PCS Cash Fund" c/o PFPC, P.O. Box 8950, Wilmington, Delaware 19899. The check
must specify the name of the Portfolio for which shares are being purchased. An
Application will be returned to the investor unless it contains the name of the
Dealer from whom it was obtained. Subsequent purchases may be made through a
Dealer or by forwarding payment to the Fund's transfer agent at the foregoing
address.

Provided that the investment is at least $2,500, an investor may also
purchase Shares in any of the Portfolios by having his bank or Dealer wire
Federal Funds to the Fund's custodian, PNC Bank. An investor's bank or Dealer
may impose a charge for this service. In order to ensure prompt receipt of an
investor's Federal Funds wire, for an initial investment, it is important that
an investor follow these steps:

A. Telephone the Fund's transfer agent, PFPC, toll-free (800) 533-7719
(in Delaware call collect (302) 791-1032), and provide it with your name,
address, telephone number, Social Security or Tax Identification Number,
the Portfolio selected, the amount being wired, and by which bank. PFPC
will then provide an investor with a Fund account number. (Investors with
existing accounts should also notify the Fund's transfer agent prior to
wiring funds.)

B. Instruct your bank or Dealer to wire the specified amount, together
with your assigned account number, to the custodian.

PNC Bank, Philadelphia, Pa.
ABA-0310-0005-3
FROM: (name of investor)
ACCOUNT NUMBER: (investor's account number with the Portfolio)
FOR PURCHASE OF: (name of the Portfolio)
AMOUNT: (amount to be invested)

C. Fully complete and sign the Application and mail it to the address
shown thereon. PFPC will not process redemptions until it receives a fully
completed and signed Application. For subsequent investments, an investor
should follow steps A and B above.

16
<PAGE>

RETIREMENT PLANS. Shares may be purchased in conjunction with individual
retirement accounts ("IRAs") and rollover IRAs where PNC Bank acts as custodian.
For further information as to applications and annual fees, contact the
Distributor or your broker. To determine whether the benefits of an IRA are
available and/or appropriate, a shareholder should consult with a tax advisor.

REDEMPTION PROCEDURES

Redemption orders are effected at the net asset value per share next
determined after receipt of the order in proper form by the Fund's transfer
agent, PFPC. Investors may redeem all or some of their Shares in accordance with
one of the procedures described below.

REDEMPTION OF SHARES IN AN ACCOUNT. An investor who beneficially owns
Shares may redeem such Shares in his Account in accordance with instructions and
limitations pertaining to his Account by contacting his broker. If such notice
is received by PFPC by 12:00 noon Eastern Time on any Business Day, the
redemption will be effective as of 12:00 noon Eastern Time on that day. Payment
of the redemption proceeds will be made after 12:00 noon Eastern Time on the day
the redemption is effected, provided that the Fund's custodian is open for
business. If the custodian is not open, payment will be made on the next bank
business day. If the redemption request is received after 12:00 noon but before
4:00 p.m. Eastern Time, the redemption will be effected as of 4:00 p.m. Eastern
Time on that day and payment will be made on the next bank business day
following receipt of the redemption request. Redemption requests received after
4:00 p.m. Eastern Time will be effected as of 12:00 noon Eastern Time on the
next Business Day and payment of the redemption proceeds will be made after
12:00 noon Eastern Time on the day the redemption is effected, provided that the
Fund's custodian is open for business. If the custodian is not open, payment
will be made on the next bank business day. If all Shares are redeemed, all
accrued but unpaid dividends on those Shares will be paid with the redemption
proceeds.

An investor's brokerage firm will also redeem each day a sufficient number
of Shares of the Designated Portfolio to cover debit balances created by
transactions in the Account or instructions for cash disbursements. Fund Shares
will be redeemed on the same day that a transaction occurs that results in such
a debit balance or charge.

Each brokerage firm reserves the right to waive or modify criteria for
participation in an Account or to terminate participation in an Account for any
reason.

REDEMPTION OF SHARES OWNED DIRECTLY. A direct investor may redeem any
number of Shares by sending a written request to "PCS Cash Fund" c/o PFPC, P.O.
Box 8950, Wilmington, Delaware 19899. Redemption requests must be signed by each
shareholder in the same manner as the Shares are registered. Redemption requests
for joint accounts require the signature of each joint owner. On redemption
requests of $5,000 or more, each signature must be guaranteed by a commercial
bank or trust company or by a member firm of a national securities exchange.
Guarantees must be signed by an authorized signatory of the bank, trust company
or member firm and "Signature Guaranteed" must appear with the signature.

Direct investors may redeem Shares without charge by telephone if they have
checked the appropriate box and supplied the necessary information on the
Application, or have filed a Telephone Authorization with the Fund's transfer
agent. An investor may obtain a Telephone Authorization from PFPC or by calling
Account Services at (800) 533-7719 (in Delaware call collect (302) 791-1032).
The proceeds will be mailed by check to an investor's registered address unless
he has designated in his Application or Telephone Authorization that such
proceeds are to be sent by wire transfer to a specified checking or savings
account. If proceeds are to be sent by wire transfer, a telephone redemption
request received prior to 4:00 p.m. will result in redemption proceeds being
wired to the investor's bank account on the next day that a wire transfer can be
effected. The minimum redemption for proceeds sent by wire transfer is $2,500.
There is no maximum for proceeds sent by wire transfer. There is no minimum
redemption for proceeds mailed by check; however, the maximum redemption for
proceeds mailed by check is $25,000. The Fund may modify this redemption service
at any time or charge a

17
<PAGE>

service fee upon prior notice to shareholders. No fee is currently contemplated.
The Fund and the Fund's transfer agent will employ reasonable procedures to
confirm that instructions communicated by telephone are genuine. These
procedures include requiring the investor to provide certain personal
identification information at the time an account is opened and prior to
effecting each transaction requested by telephone. In addition, all telephone
transaction requests will be recorded and investors may be required to provide
additional telecopied written instructions of transaction requests. The Fund or
the transfer agent may be liable for any losses due to unauthorized or
fraudulent telephone instructions if either of them does not employ these
procedures. Neither the Fund nor the transfer agent will be responsible for any
loss, liability, cost or expense for following instructions received by
telephone that either of them reasonably believes to be genuine. During periods
of extreme economic or market changes, shareholders may experience difficulty in
effecting telephone transactions. In such event, requests should be made by
regular or express mail.

REDEMPTION BY CHECK. Upon request, the Fund will provide any investor with
forms of drafts ("checks") payable through PNC Bank (the "Bank"). These checks
may be made payable to the order of anyone. The minimum amount of a check is
$500. An investor wishing to use this check writing redemption procedure should
complete specimen signature cards, and then forward such signature cards to his
broker or in accordance with the broker's instructions. Upon receipt, PFPC will
then arrange for the checks to be honored by the Bank. Investors who own Shares
through an Account should contact their brokers for signature cards. Investors
of joint accounts may elect to have checks honored with a single signature.
Check redemptions will be subject to the Bank's rules governing checks. An
investor will be able to stop payment on a check redemption. The Fund or
Provident may terminate this redemption service at any time, and neither shall
incur any liability for honoring checks, for effecting redemptions to pay
checks, or for returning checks which have not been accepted.

When a check is presented to the Bank for clearance, the Bank, as the
investor's agent, will cause the Fund to redeem a sufficient number of full and
fractional Shares owned by the investor to cover the amount of the check. This
procedure enables the investor to continue to receive dividends on those Shares
equalling the amount being redeemed by check until such time as the check is
presented to the Bank. Checks may not be presented for cash payment at the
offices of the Bank because, under 1940 Act rules, redemptions may be effected
only at the redemption price next determined after the redemption request is
presented to PFPC. This limitation does not affect checks used for the payment
of bills or to obtain cash at other banks.

ADDITIONAL REDEMPTION INFORMATION. The Fund ordinarily will make payment
for all Shares redeemed within seven days after receipt of a redemption request
in proper form. Shares purchased by check will not be redeemed, for a period of
up to ten days after their purchase, pending a determination that the check has
cleared. This procedure does not apply to shares purchased by wire payment.
During the period prior to the time shares are redeemed, dividends on such
shares will accrue and be payable.

The Fund imposes no charge when Shares are redeemed. The Fund reserves the
right to redeem any account in a Portfolio involuntarily, on thirty days'
notice, if such account has been reduced by the shareholder to less than $500
and during such 30-day period the amount invested in such account is not
increased to at least $500. Payment for Shares redeemed may be postponed or the
right of redemption suspended as provided by the rules of the Securities and
Exchange Commission.

NET ASSET VALUE

The net asset value per share of each of the Portfolios for the purpose of
pricing purchase and redemption orders is determined twice each day, once as of
12:00 noon Eastern Time and once as of the close of trading on the NYSE on each
weekday with the exception of those holidays on which either the NYSE or the FRB
is closed. Currently, the NYSE or the FRB, or both, are closed on the customary
national business holidays of New Year's Day, Martin Luther King, Jr.'s
Birthday, Presidents' Day, Good Friday, Memorial Day, Independence Day,
Labor Day, Columbus Day, Veterans' Day, Thanksgiving Day and Christmas
Day. Each Portfolio's net asset value per share is calculated by adding the
value of all securities and other assets of the Portfolio, subtracting its
liabilities and dividing the result by the number of its outstanding shares. The
net asset value per share of each Portfolio is determined independently of
any of the Fund's other investment portfolios.

18
<PAGE>

The Fund seeks to maintain for each of the Portfolios a net asset value of
$1.00 per share for purposes of purchases and redemptions and values its
portfolio securities on the basis of the amortized cost method of valuation
described in the Statement of Additional Information under the heading
"Valuation of Shares." There can be no assurance that any Portfolio will be able
to maintain a stable net asset value of $1.00 per share.

With the approval of the Board of Directors, a Portfolio may use a pricing
service, bank or broker-dealer experienced in such matters to value the
Portfolio's securities. A more detailed discussion of net asset value and
security valuation is contained in the Statement of Additional Information.

MANAGEMENT

BOARD OF DIRECTORS

The business and affairs of the Fund and each Portfolio are managed under
the direction of the Fund's Board of Directors.

INVESTMENT ADVISOR

Morgan Stanley Asset Management Inc.(the "Advisor") 1221 Avenue of the Americas,
New York, New York 10020, a wholly-owned subsidiary of Morgan Stanley Group
Inc., which at September 30, 1995 had approximately $52 billion in assets
under management as an investment manager or as a fiduciary advisor, acts
as investment advisor to the Fund and each of its Portfolios.

As investment advisor to the Portfolios, the Advisor manages such
Portfolios and is responsible for all purchases and sales of portfolio
securities. The Advisor also assists generally in supervising the operations of
the Portfolios. In entering into Portfolio transactions for a Portfolio with a
broker, the Advisor may take into account the sale by such broker of shares of
the Fund, subject to the requirements of best execution.

For the services provided to and expenses assumed by it for the benefit of
each Portfolio, the Advisor is entitled to receive from each Portfolio a fee,
computed daily and payable monthly, at an annual rate of .45% of the first $250
million of such Portfolio's average daily net assets, .40% of the next $250
million of such Portfolio's average daily net assets and .35% of the average
daily net assets of such Portfolio in excess of $500 million. The Advisor may in
its discretion from time to time agree to waive voluntarily all or any portion
of its advisory fee for any Portfolio. For the fiscal year ended June 30, 1995,
the Advisor received fees from the Fund which represented .40% (net of fee
waivers) of the PCS Money Market Portfolio's average net assets and .44% of the
PCS Government Obligations Money Market Portfolio's average net assets.

ADMINISTRATOR AND TRANSFER AND DIVIDEND DISBURSING AGENT

PFPC, an indirect wholly-owned subsidiary of PNC Financial Corp., a
multi-bank holding company, serves as the Fund's administrator and transfer and
dividend disbursing agent. PFPC's address is 400 Bellevue Parkway, Wilmington,
Delaware 19809.

The administrative services to be provided by PFPC include maintenance of
the Fund's books and records, preparation of regulatory filings and
stockholders' reports, and computation of net asset values and daily dividends.
For its services to the Fund as administrator, PFPC receives from each Portfolio
a fee, computed daily and payable monthly, at an annual rate of .10% of the
first $200 million of the Fund's average daily net assets, .075% on the next
$200 million of average daily net assets, .05% on the next $200 million of
average daily net assets, and .03% on average daily net assets over $600
million. For administrative services for the fiscal year ended June 30, 1995,
PFPC received fees from the Fund which represented .10% of the PCS Money Market
Portfolio's average net assets and .09% of the PCS Government Obligations Money
Market Portfolio's average net assets.

19
<PAGE>

CUSTODIAN

PNC Bank, 17th and Chestnut Streets, Philadelphia, Pennsylvania 19103
serves as the Fund's custodian. PNC Bank is a wholly-owned subsidiary of PNC
Financial Corp.

EXPENSES

The expenses of each Portfolio are deducted from the total income of such
Portfolio before dividends are paid. These expenses include, but are not limited
to, organizational costs, fees paid to the Advisor, fees and expenses of the
Fund's chairman and the officers and directors who are not affiliated with the
Portfolio's Advisor or Distributor, taxes, interest, legal fees, custodian fees,
auditing fees, brokerage fees and commissions, certain of the fees and expenses
of registering and qualifying the Portfolio and its shares for distribution
under federal and state securities laws, expenses of preparing prospectuses and
statements of additional information and of printing and distributing
prospectuses and statements of additional information annually to existing
shareholders, the expense of reports to shareholders, shareholders' meetings and
proxy solicitations, fidelity bond and directors and officers liability
insurance premiums, the expense of using independent pricing services and other
expenses which are not expressly assumed by the Advisor under its advisory
agreement with the Portfolio. For the fiscal year ended June 30, 1995, the PCS
Money Market Portfolio's total expenses (net of fee waivers) were .98% of its
average net assets and the PCS Government Obligations Money Market Portfolio's
total expenses (net of fee waivers) were .95% of its average net assets. Absent
fee waivers, the total operating expenses of such Portfolios would have been
1.18% and 1.12% of their respective average net assets.

The Advisor has agreed to reimburse each Portfolio for the amount, if any,
by which the total operating and management expenses of such Portfolio for any
fiscal year exceed the most restrictive state blue sky expense limitation in
effect from time to time, to the extent required by such limitation.

The Advisor may assume additional expenses of the Portfolios from time to
time, in its discretion, while retaining the ability to be reimbursed by the
Portfolios for such amounts prior to the end of a fiscal year. Assumption of
additional expenses will have the effect of lowering a Portfolio's overall
expense ratio and of increasing yield to investors or the converse at the time
such amounts are reimbursed.

DISTRIBUTION OF SHARES

The Distributor, with an address at 1251 Avenue of the Americas, New York,
NY 10020 acts as distributor of the Shares of each of the Portfolios of the Fund
pursuant to separate distribution contracts (collectively, the "Distribution
Contracts") with the Fund on behalf of each of the Portfolios. The Distributor
may make ongoing annual payments to broker/dealers based upon the aggregate
investment amounts maintained by customers of such broker/dealers in shareholder
accounts in each of the Portfolios of the Fund. The Distributor also pays for
the cost of printing and mailing to prospective investors prospectuses and other
materials relating to the Portfolios of the Fund as well as for related direct
mail and advertising expenses.

The Board of Directors of the Fund approved and adopted the Distribution
Contracts and separate Plans of Distribution for each of the Portfolios
(collectively, the "Plans") pursuant to Rule 12b-1 under the 1940 Act. Under
each of the Plans, the Distributor is entitled to receive from the relevant
Portfolio a distribution fee, which is accrued daily and paid monthly, of up to
.50% on an annualized basis of the average daily net assets of the relevant
Portfolio. The actual amount of such compensation is agreed upon by the Fund's
Board of Directors and by the Distributor. Under each of the Distribution
Contracts, the Distributor has agreed to accept compensation for its services
thereunder and under the relevant Plan in the amount of .50% on an annualized
basis in any year. In addition, the Distributor may, in its discretion,
voluntarily waive from time to time all or any portion of its distribution fee.
For the fiscal year ended June 30, 1995, the Distributor received fees (net of
fee waivers) from the PCS Money Market Portfolio and the PCS Government
Obligations Money Market Portfolio which represented .35% and .33% of their
respective average net assets.

20
<PAGE>

Each of the Plans obligates the relevant Portfolio, during the period it is
in effect, to accrue and pay to the Distributor the fee agreed to under the
relevant Distribution Contract. None of the Plans obligates a Portfolio to
reimburse the Distributor for the actual expenses the Distributor may incur in
fulfilling its obligations under a Plan. Thus, under each of the Plans, even if
the Distributor's actual expenses exceed the fee payable to the Distributor
thereunder at any given time, the relevant Portfolio will not be obligated to
pay more than that fee. If the Distributor's actual expenses are less than the
fee it receives, the Distributor will retain the full amount of the fee.

Under the terms of Rule 12b-1, each Plan will remain in effect only if
approved at least annually by the Fund's Board of Directors, including those
directors who are not "interested persons" of the Fund as that term is defined
in the 1940 Act and who have no direct or indirect financial interest in the
operation of the Plan or in any agreements related thereto ("12b-1 Directors").
Each of the Plans may be terminated at any time by vote of a majority of the
12b-1 Directors or by vote of a majority of the Fund's outstanding voting
securities of the relevant Portfolio. The fee set forth above will be paid by a
Portfolio to the Distributor unless and until the relevant Plan is terminated or
not renewed. The Fund intends to operate each of the Plans in accordance with
its terms and with the NASD Rules concerning sales charges.

DIVIDENDS AND DISTRIBUTIONS

Each Portfolio will distribute substantially all of its net investment
income and net capital gains, if any, to shareholders. All distributions are
reinvested in the form of additional full and fractional Shares unless a
shareholder elects otherwise. The net investment income (not including, for this
purpose, any net short-term capital gains) earned by each Portfolio will be
declared as a dividend on a daily basis and paid monthly. Dividends are payable
to shareholders of record immediately prior to the determination of net asset
value made as of the close of trading on the NYSE on days on which there is a
determination of net asset value, and as of 4:00 p.m. Eastern Time on days on
which there is no determination of net asset value. Net capital gains, if any,
will be distributed at least annually.

TAXES

The following summary of federal income tax consequences is based on
current tax laws and regulations, which may be changed by legislative, judicial,
or administrative action.

No attempt has been made to present a detailed explanation of the federal,
state, or local income tax treatment of a Portfolio or its shareholders.
Accordingly, shareholders are urged to consult their tax advisors regarding
specific questions as to federal, state and local income taxes. The Statement of
Additional Information sets forth further information regarding taxes.

Each Portfolio is treated as a separate entity for federal income tax
purposes and is not combined with the Fund's other Portfolios. Each Portfolio
will elect to be taxed as a regulated investment company under Subchapter M of
the Internal Revenue Code of 1986, as amended (the "Code"). So long as a
Portfolio satisfies the requirements of the Code for this tax treatment, such
Portfolio will be relieved of federal income tax on amounts distributed to
shareholders, but shareholders, unless otherwise exempt, will pay income or
capital gains taxes on amounts so distributed (except distributions that
constitute "exempt interest dividends" or that are treated as a return of
capital) regardless of whether such distributions are paid in cash or reinvested
in additional Shares. None of the Portfolios intends to make distributions that
will be eligible for the corporate dividends received deduction.

Distributions out of the "net capital gain" (the excess of net long-term
capital gain over net short-term capital loss), if any, of any Portfolio will be
taxed to shareholders as long-term capital gain regardless of the length of time
a shareholder has held Shares of the Portfolio, whether such gain was reflected
in the price paid for the

21
<PAGE>

Shares, or whether such gain was attributable to securities bearing tax-exempt
interest. All other distributions, to the extent they are taxable, are taxed to
shareholders as ordinary income.

The PCS Tax-Free Money Market Portfolio intends to qualify to pay "exempt
interest dividends" by satisfying the Code's requirement that at the close of
each quarter of its taxable year at least 50% of the value of its total assets
consists of securities the interest on which is exempt from federal income tax.
So long as this and certain other requirements are satisfied, the Portfolio's
"exempt interest dividends" will be exempt from regular federal income tax.
Investors in this Portfolio should note, however, that in certain circumstances
such amounts, while exempt from regular federal income tax, are subject to
alternative minimum tax. In addition, this Portfolio may not be an appropriate
investment for persons who are "substantial users" of facilities financed by
industrial development or private activity bonds. See the Statement of
Additional Information for a description of the application of the alternative
minimum tax and certain other collateral tax consequences.

Current federal income tax law limits the types and volume of bonds
qualifying for the federal income tax exemption of interest, which may affect
the ability of the PCS Tax-Free Money Market Portfolio to purchase sufficient
amounts of tax-exempt securities to qualify to pay "exempt interest dividends."
Investors should note that interest on indebtedness incurred or continued by
shareholders to purchase or carry Shares of the PCS Tax-Free Money Market
Portfolio will not be deductible for federal income tax purposes.

The PCS Tax-Free Money Market Portfolio will determine annually the
percentages of its net investment income which are exempt from the regular
federal income tax and will apply such percentages uniformly to all
distributions declared from net investment income during that year. These
percentages may differ significantly from the actual percentages for any
particular day.

The Fund will send written notices to shareholders annually regarding the
tax status of distributions made by each Portfolio. Dividends declared in
October, November or December of any year payable to shareholders of record on a
specified date in such month will be deemed to have been received by the
shareholders on December 31 of such year, provided such dividends are paid at
any time during January of the following year. Each Portfolio intends to make
sufficient distributions prior to the end of each calendar year to avoid
liability for federal excise tax.

Shareholders who are nonresident alien individuals, foreign trusts or
estates, foreign corporations or foreign partnerships may be subject to
different U.S. federal income tax treatment.

PERFORMANCE INFORMATION

From time to time a Portfolio advertises its "yield" and "effective yield."
Both yield figures are based on historical earnings and are not intended to
indicate future performance. The "yield" of a Portfolio refers to the income
generated by an investment in a Portfolio over a seven-day period (which period
will be stated in the advertisement). This income is then "annualized." That is,
the amount of income generated by the investment during that week is assumed to
be generated each week over a 52-week period and is shown as a percentage of the
investment. The "effective yield" is calculated similarly but, when annualized,
the income earned by an investment in a Portfolio is assumed to be reinvested.
The "effective yield" will be slightly higher than the "yield" because of the
compounding effect of this assumed reinvestment. The PCS Tax-Free Money Market
Portfolio's "tax-equivalent yield" may also be quoted from time to time, which
shows the level of taxable yield needed to produce an after-tax equivalent to
such Portfolio's tax-free yield. This is done by increasing such Portfolio's
yield (calculated as above) by the amount necessary to reflect the payment of
federal income tax at a stated tax rate.

The yield of any investment is generally a function of portfolio quality
and maturity, type of investment and operating expenses. The yield on Shares of
any of the Portfolios will fluctuate and is not necessarily representative of
future results. Any fees charged by broker/dealers directly to their customers
in connection with investments

22
<PAGE>

in the Portfolios are not reflected in the yields of the Portfolios, and such
fees, if charged, will reduce the actual return received by shareholders on
their investments.

In addition, from time to time, in advertisements or in reports to
shareholders, the yield of a Portfolio may be quoted and compared to those of
other mutual funds with similar investment objectives and to stock or other
relevant indices. For example, the yield of the PCS Money Market Portfolio may
be compared to the Donoghue's Money Fund Average, which is an average compiled
by IBC/DONOGHUE'S MONEY FUND REPORT, a widely recognized independent publication
that monitors the performance of money market funds, or to the data prepared by
Lipper Analytical Services, Inc., a widely-recognized independent service that
monitors the performance of mutual funds.

DESCRIPTION OF SHARES

The Fund has authorized capital of ten billion shares of Common Stock,
$.001 par value per share, of which three billion shares are currently
classified as follows: 1 billion shares are classified as Class A Common Stock
(PCS Money Market Portfolio), 1 billion shares are classified as Class B Common
Stock (PCS Tax-Free Money Market Portfolio), 1 billion shares are classified as
Class C Common Stock (PCS Government Obligations Money Market Portfolio). Under
the Fund's charter, the Board of Directors has the power to classify or
reclassify any unissued Shares of Common Stock and to increase authorized Shares
from time to time.

Each Share is entitled to one vote for the election of Directors and any
other matter submitted to a shareholder vote. Shares of the Fund do not have
preemptive or conversion rights. When issued for payment as described in this
Prospectus, Shares of the Fund will be fully paid and non-assessable.

The Fund currently does not intend to hold annual meetings of shareholders
except as required by the 1940 Act or other applicable law. The 1940 Act
requires initial shareholder approval of the investment advisory agreement and
the Rule 12b-1 Plan, election of Directors (although vacancies on the Board of
Directors may be filled by the Board under certain circumstances); and if the
Fund holds an annual meeting, ratification of the Board's selection of the
Fund's independent accountants. The law under certain circumstances provides
shareholders with the right to call for a meeting of shareholders to consider
the removal of one or more directors. To the extent required by law, the Fund
will assist in shareholder communication in such matters.

Shareholders of the Fund are entitled to one vote for each full Share held
(irrespective of portfolio) and fractional votes for fractional Shares held.
Voting rights are not cumulative and, accordingly, the holders of more than 50%
of the aggregate Shares of Common Stock of the Fund may elect all of the
directors.

The Fund will not normally issue share certificates for any of the Shares
of the Portfolios.

OTHER INFORMATION

REPORTS AND INQUIRIES

Shareholders will receive unaudited semi-annual reports describing the
Fund's investment operations and annual financial statements audited by
independent accountants. Shareholder inquiries should be addressed to PFPC, the
Fund's transfer agent, P.O. Box 8950, Wilmington, DE 19899.

<PAGE>

PCS CASH FUND, INC.
PCS Money Market Portfolio
PCS Tax-Free Money Market Portfolio
PCS Government Obligations Money Market Portfolio

This Statement of Additional Information provides supplementary information
pertaining to shares of the PCS Money Market Portfolio, the PCS Tax-Free Money
Market Portfolio and the PCS Government Obligations Money Market Portfolio of
the PCS Cash Fund, Inc. (the "Fund"). This Statement of Additional
Information is not a prospectus, and should be read only in conjunction with
the Prospectus of the Fund, dated November 1, 1995 (the "Prospectus"). A copy
of the Prospectus may be obtained by calling toll-free (800) 533-7719.

CONTENTS

Page

General ............................................................. 2
Investment Objectives and Policies .................................. 2
Directors and Officers .............................................. 10
Investment Advisory, Distribution and Servicing
Arrangements ...................................................... 17
Portfolio Transactions .............................................. 19
Purchase and Redemption Information ................................. 21
Valuation of Shares ................................................. 21
Taxes ............................................................... 23
Additional Information Concerning Fund Shares ....................... 26
Miscellaneous ....................................................... 26
Financial Statements ................................................ 27

No person has been authorized to give any information or to make any
representations not contained in this Statement of Additional Information in
connection with the offering made by the Prospectus and, if given or made,
such information or representations must not be relied upon as having been
authorized by the Fund or its distributor. The Prospectus does not constitute
an offering by the Fund or by the distributor in any jurisdiction in which
such offering may not lawfully be made.

This Statement of Additional Information is dated November 1, 1995.

<PAGE>

GENERAL

The PCS Cash Fund, Inc. (the "Fund") is a diversified, open-end management
investment company authorized to offer shares in three investment portfolios.
This Statement of Additional Information pertains to shares of the PCS Money
Market Portfolio, the PCS Tax-Free Money Market Portfolio and the PCS
Government Obligations Money Market Portfolio. The Fund was incorporated
under the laws of the State of Maryland on January 5, 1989 and commenced
operations of the PCS Money Market Portfolio on August 4, 1989, the PCS
Tax-Free Money Market Portfolio on January 9, 1990 and the PCS Government
Obligations Money Market Portfolio on March 12, 1992. Only the PCS Money
Market Portfolio and the PCS Government Obligations Money Market Portfolio are
currently in operation. The PCS Tax-Free Money Market Portfolio was liquidated
on January 3, 1991.

Capitalized terms used herein and not otherwise defined have the same
meanings as are given to them in the Prospectus.

INVESTMENT OBJECTIVES AND POLICIES

The following supplements the information contained in the Prospectus
concerning the investment objective and policies of the Portfolios. A
description of ratings of Municipal Obligations and commercial paper is set
forth in the Appendix hereto.

ADDITIONAL INFORMATION ON PORTFOLIO INVESTMENTS.

REVERSE REPURCHASE AGREEMENTS. Reverse repurchase agreements involve the
sale of securities held by the Portfolios pursuant to the Portfolios'
agreement to repurchase the securities at an agreed upon price, date and rate
of interest. Such agreements are considered to be borrowings under the
Investment Company Act of 1940, as amended (the "1940 Act"). While reverse
repurchase transactions are outstanding, the Portfolios will maintain in a
segregated account cash, U.S. Government securities or other liquid,
high-grade debt securities of an amount at least equal to the market value of
the securities, plus accrued interest, subject to the agreement.

VARIABLE RATE DEMAND INSTRUMENTS. Variable rate demand instruments held by
each Portfolio may have maturities of more than 397 days, provided: (i) the
Portfolio is entitled to the payment of principal at any time, or during
specified intervals not exceeding 397 days, upon giving the prescribed notice
(which may not exceed 30 days), and (ii) the rate of interest on such
instruments is adjusted at periodic intervals which may extend up to 397 days.
In determining the average weighted maturity of the Portfolio and whether a
variable rate demand instrument has a remaining maturity of 397 days or less,
each instrument will be deemed by the Portfolio to have a maturity equal to
the longer of the period remaining until its next interest rate adjustment or
the period remaining until the principal amount can be recovered through
demand. In determining whether an unrated variable rate demand instrument is
of comparable quality at the time of purchase to instruments rated "high
quality," the Advisor will follow guidelines adopted by the Fund's Board of
Directors.

FIRM COMMITMENTS. Firm commitments for securities include "when issued" and
delayed delivery securities purchased for delivery beyond the normal
settlement date at a stated price and yield. While a Portfolio has firm
commitments outstanding, the Portfolio will maintain in a segregated account
cash, U.S. government securities or other liquid, high grade debt securities
of an

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<PAGE>

amount at least equal to the purchase price of the securities to be
purchased. Normally, the custodian for a Portfolio will set aside portfolio
securities to satisfy a purchase commitment and, in such a case, a Portfolio
may be required subsequently to place additional assets in the separate
account in order to ensure that the value of the account remains equal to the
amount of such Portfolio's commitment. It may be expected that a Portfolio's
net assets will fluctuate to a greater degree when it sets aside portfolio
securities to cover such purchase commitments than when it sets aside cash.
Because a Portfolio's liquidity and ability to manage its portfolio might be
affected when it sets aside cash or portfolio securities to cover such
purchase commitments, it is expected that commitments to purchase "when
issued" securities will not exceed 25% of the value of a Portfolio's total
assets absent unusual market conditions. When a Portfolio engages in
when-issued transactions, it relies on the seller to consummate the trade.
Failure of the seller to do so may result in a Portfolio's incurring a loss or
missing an opportunity to obtain a price considered to be advantageous.

STAND-BY COMMITMENTS. A Portfolio may enter into stand-by commitments with
respect to obligations issued by or on behalf of states, territories, and
possessions of the United States, the District of Columbia, and their
political subdivisions, agencies, instrumentalities and authorities
(collectively, "Municipal Obligations") held in its portfolio. Under a
stand-by commitment, a dealer would agree to purchase at a Portfolio's option
a specified Municipal Obligation at its amortized cost value to the Portfolio
plus accrued interest, if any. Stand-by commitments may be exercisable by a
Portfolio at any time before the maturity of the underlying Municipal
Obligations and may be sold, transferred or assigned only with the instruments
involved.

The Portfolios expect that stand-by commitments will generally be available
without the payment of any direct or indirect consideration. However, if
necessary or advisable, a Portfolio may pay for a stand-by commitment either
separately in cash or by paying a higher price for portfolio securities which
are acquired subject to the commitment (thus reducing the yield to maturity
otherwise available for the same securities). The total amount paid in either
manner for outstanding stand-by commitments held by a Portfolio will not
exceed 1/2 of 1% of the value of that Portfolio's total assets calculated
immediately after each stand-by commitment is acquired.

The Portfolios intend to enter into stand-by commitments only with dealers,
banks and broker-dealers which, in the Advisor's opinion, present minimal
credit risks and otherwise satisfy applicable quality standards. The
Portfolios' reliance upon the credit of these dealers, banks and
broker-dealers will be secured by the value of the underlying Municipal
Obligations that are subject to the commitment.

The Portfolios will acquire stand-by commitments solely to facilitate
portfolio liquidity and do not intend to exercise their right thereunder for
trading purposes. The acquisition of a stand-by commitment will not affect
the valuation or assumed maturity of the underlying Municipal Obligation which
will continue to be valued in accordance with the amortized cost method. The
actual stand-by commitment will be valued at zero in determining net asset
value. Accordingly, where a Portfolio pays directly or indirectly for a
stand-by commitment, its cost will be reflected as an unrealized loss for the
period during which the commitment is held by that Portfolio and will be
reflected in realized gain or loss when the commitment is exercised or
expires.

OBLIGATIONS OF DOMESTIC BANKS, FOREIGN BANKS AND FOREIGN BRANCHES OF U.S.
BANKS. For purposes of the Portfolios' investment policies with respect to
bank obligations, the assets of a bank or savings institution will be deemed
to include the assets of its domestic and foreign branches. Investments in
bank obligations will include obligations of domestic branches of foreign
banks and foreign branches of domestic banks. Such investments may involve
risks that are different from investments in securities of domestic branches
of U.S. banks. These risks may include future
3
<PAGE>
unfavorable political and economic developments, possible withholding taxes
on interest income, seizure or nationalization of foreign deposits, currency
controls, interest limitations, or other governmental restrictions which
might affect the payment of principal or interest on the securities held in a
Portfolio. Additionally, these institutions may be subject to less stringent
reserve requirements and to different accounting, auditing, reporting and
recordkeeping requirements than those applicable to domestic branches of U.S.
banks. The Portfolios will invest in U.S. dollar-denominated obligations of
domestic branches of foreign banks and foreign branches of domestic banks
only when the Advisor believes that the risks associated with such investment
are minimal and that all applicable quality standards have been satisfied.

U.S. GOVERNMENT OBLIGATIONS. Examples of types of U.S. Government
obligations include U.S. Treasury Bills, Treasury Notes and Treasury Bonds and
the obligations of Federal Home Loan Banks, Federal Farm Credit Banks, Federal
Land Banks, the Federal Housing Administration, Farmers Home Administration,
Export-Import Bank of the United States, Small Business Administration,
Federal National Mortgage Association, Government National Mortgage
Association, General Services Administration, Student Loan Marketing
Association, Central Bank for Cooperatives, Federal Home Loan Mortgage
Corporation, Federal Intermediate Credit Banks, Maritime Administration,
International Bank for Reconstruction and Development (the "World Bank"), the
Asian-American Development Bank and the Inter-American Development Bank.

REPURCHASE AGREEMENTS. The repurchase price under the repurchase agreements
described in the Prospectus generally equals the price paid by a Portfolio
plus interest negotiated on the basis of current short-term rates (which may
be more or less than the rate on the securities underlying the repurchase
agreement). Securities subject to repurchase agreements will be held by the
Fund's custodian in the Federal Reserve/Treasury book-entry system or by
another authorized securities depository. Repurchase agreements are considered
to be loans by a Portfolio under the 1940 Act.

MORTGAGE-RELATED DEBT SECURITIES. Mortgage-related debt securities
represent ownership interests in individual pools of residential mortgage
loans. These securities are designed to provide monthly payments of interest
and principal to the investor. Each mortgagor's monthly payment to his
lending institution on his residential mortgage is "passed-through" to
investors. Mortgage pools consist of whole mortgage loans or participations
in loans. The terms and characteristics of the mortgage instruments are
generally uniform within a pool but may vary among pools. Lending
institutions which originate mortgages for the pools are subject to certain
standards, including credit and underwriting criteria for individual mortgages
included in the pools.

4
<PAGE>

The coupon rate of interest on mortgage-related securities is lower than the
interest rates paid on the mortgages included in the underlying pool, but only
by the amount of the fees paid to the mortgage pooler, issuer, and/or
guarantor of payment of the securities for the guarantee of the services of
passing through monthly payments to investors. Actual yield may vary from the
coupon rate, however, if mortgage-related securities are purchased at a
premium or discount, traded in the secondary market at a premium or discount,
or to the extent that mortgages in the underlying pool are prepaid as noted
above. In addition, interest on mortgage-related securities is earned
monthly, rather than semi-annually as is the case for traditional bonds, and
monthly compounding may tend to raise the effective yield earned on such
securities.

LENDING OF SECURITIES. With respect to loans by the Portfolios of portfolio
securities as described in the Prospectus, the Portfolios would continue to
accrue interest on loaned securities and would also earn income on loans. Any
cash collateral received by the Portfolios in connection with such loans would
be invested in short-term U.S. Government obligations.

INVESTMENT LIMITATIONS.

PCS MONEY MARKET PORTFOLIO.

The Portfolio may not:

(1) issue senior securities or borrow money, except for borrowing money
from banks for temporary purposes or for reverse repurchase agreements and
then in amounts not in excess of 10% of the value of the Portfolio's total
assets at the time of such borrowing, and only if after such borrowing there
is asset coverage of at least 300 percent for all borrowings of the Portfolio;
or mortgage, pledge, hypothecate or in any manner transfer as security for
indebtedness any securities owned or held by the Portfolio, any assets except
as may be necessary in connection with permitted borrowings and then, in
amounts not in excess of 10% of the value of the Portfolio's total assets at
the time of the borrowing; or purchase portfolio securities while borrowings
in excess of 5% of the Portfolio's net assets are outstanding. (This
borrowing provision is not for investment leverage, but solely to facilitate
management of the Portfolio's securities by enabling the Portfolio to meet
redemption requests where the liquidation of portfolio securities is deemed to
be disadvantageous or inconvenient.);

(2) purchase the securities of any one issuer, other than securities
issued or guaranteed by the U.S. Government or its agencies or
instrumentalities, if immediately after and as a result at the time of such
purchase more than 5% of the Portfolio's total assets would be invested in the
securities of such issuer, or more than 10% of the outstanding voting
securities of such issuer would be owned by the Portfolio, except that 25% of
the Portfolio's total assets may be invested without regard to this
limitation;

5
<PAGE>

(3) purchase securities on margin, except for short-term credit necessary
for clearance of portfolio transactions;

(4) underwrite securities of other issuers, except to the extent that, in
connection with the disposition of portfolio securities, the Portfolio may be
deemed an underwriter under federal securities laws and except to the extent
that the purchase of Municipal Obligations directly from the issuer thereof in
accordance with the Portfolio's investment objective, policies and limitations
may be deemed to be an underwriting;

(5) make short sales of securities or maintain a short position or write or
sell puts, calls, straddles, spreads or combinations thereof;

(6) purchase or sell real estate, provided that the Portfolio may invest
in securities secured by real estate or interests therein or issued by
companies which invest in real estate or interests therein;

(7) purchase or sell commodities or commodity contracts;

(8) invest in oil, gas or mineral exploration or development programs;

(9) make loans except that the Portfolio may purchase or hold debt
obligations in accordance with its investment objective, policies and
limitations and may enter into repurchase agreements for securities, and may
lend portfolio securities against collateral, consisting of cash or securities
which are consistent with the Portfolio's permitted investments, which is
equal at all times to at least 100% of the value of the securities loaned.
There is no investment restriction on the amount of securities that may be
loaned;

(10) invest in other investment companies except to the extent permitted
by the 1940 Act, provided that the Fund may invest only in investment
companies that are unaffiliated with the Fund;

(11) make investments for the purpose of exercising control or management;

(12) purchase any securities other than Money-Market Instruments, some of
which may be subject to repurchase agreements, but the Portfolio may make
interest-bearing savings deposits in amounts not in excess of 5% of the value
of the Portfolio's assets and may make time deposits;

(13) purchase any securities which would cause 25% or more of the value of
its total assets at the time of such purchase to be invested in the securities
of one or more issuers conducting their principal business activities in the
same industry, provided that there is no limitation with respect to
investments in securities issued or guaranteed by the U.S. Government or its
agencies and instrumentalities or in obligations of U.S. banks or their
domestic branches;

(14) invest more than 5% of its total assets (taken at the time of
purchase) in securities of issuers (including their predecessors) with less
than three years of continuous operations.

The foregoing investment limitations cannot be changed without the
affirmative vote of the lesser of (a) more than 50% of the outstanding shares
of the Portfolio or (b) 67% or more of the shares of the Portfolio present at
a shareholders' meeting if more than 50% of the outstanding shares of the
Portfolio are represented at the meeting in person or by proxy.

With respect to limitation (13) above concerning industry concentration, the
Portfolio will consider wholly-owned finance companies to be in the industries
of their parents if their activities are

6
<PAGE>

primarily related to financing the activities of the parents, and will divide
utility companies according to their services. For example, gas, gas
transmission, electric and gas, electric and telephone will each be
considered a separate industry. The policy and practices stated in this
paragraph may be changed without the affirmative vote of the holders of a
majority of the Portfolio's outstanding shares, but any such change may
require the approval of the Securities and Exchange Commission (the "SEC")
and would be disclosed in the Prospectus prior to being made.

In order to permit the sale of its shares in certain states, the Fund may
make commitments more restrictive than the investment limitations described
above. Should the Fund determine that any such commitment is no longer in its
best interest, it will revoke the commitment and terminate sales of its shares
in the state involved.

In addition, the Board of Directors has adopted the following non-
fundamental investment restrictions. The Portfolio will not:

(1) invest in real estate limited partnerships; or

(2) invest in oil, gas and mineral leases.

PCS TAX-FREE MONEY MARKET PORTFOLIO.

The Portfolio may not:

(1) issue senior securities or borrow money, except from banks for
temporary purposes and then in amounts not in excess of 10% of the value of
the Portfolio's total assets at the time of such borrowing, and only if after
such borrowing there is asset coverage of at least 300 percent for all
borrowings of the Portfolio; or mortgage, pledge, hypothecate or in any manner
transfer as security for indebtedness any securities owned or held by the
Portfolio, any assets except as may be necessary in connection with permitted
borrowings and then in amounts not in excess of the lesser of the dollar
amounts borrowed or 10% of the value of the Portfolio's total assets at the
time of the borrowing; or purchase portfolio securities while borrowings in
excess of 5% of the Portfolio's net assets are outstanding. (This borrowing
provision is not for investment leverage, but solely to facilitate management
of the Portfolio's securities by enabling the Portfolio to meet redemption
requests where the liquidation of portfolio securities is deemed to be
disadvantageous or inconvenient.);

(3) purchase securities on margin, except for short-term credit necessary
for clearance of portfolio transactions;

7
<PAGE>

(5) make short sales of securities or maintain a short position or write or
sell puts, calls, straddles, spreads or combinations thereof;

(7) purchase or sell commodities or commodity contracts;

(8) invest in oil, gas or mineral exploration or development programs;

(9) make loans except that the Portfolio may purchase or hold debt
obligations in accordance with its investment objective, policies and
limitations;

(10) invest more than 10% of the value of the Portfolio's assets in other
investment companies that are unaffiliated with the Fund and then no more than
5% of the Portfolio's assets may be invested in any one money market fund;

(11) make investments for the purpose of exercising control or management;

(12) under normal market conditions invest less than 80% of its net assets
in securities the interest on which is exempt from the regular federal income
tax and does not constitute an item of tax preference for purposes of the
federal alternative minimum tax ("Tax-Exempt Interest");

(13) invest in private activity bonds where the payment of principal and
interest are the responsibility of a company (including its predecessors) with
less than three years of continuous operations; or

(14) purchase any securities which would cause, at the time of purchase,
more than 25% of the value of the total assets of the Portfolio to be invested
in the obligations of the issuers in the same industry.

The foregoing investment limitations cannot be changed without the
affirmative vote of the lesser of (a) more than 50% of the outstanding shares
of the Portfolio or (b) 67% or more of the shares of the Portfolio present or
represented by proxy at a shareholders' meeting if more than 50% of the
outstanding shares of the Portfolio are represented at the meeting in person
or by proxy.

PCS GOVERNMENT OBLIGATIONS MONEY MARKET PORTFOLIO

The Portfolio may not:

(1) purchase securities other than U.S. Treasury bills, notes and other
obligations issued or guaranteed by the U.S. Government, its agencies or
instrumentalities, and repurchase

8
<PAGE>

agreements relating to such obligations. There is no limit on the amount of
the Portfolio's assets which may be invested in the securities of any one
issuer of obligations that the Portfolio is permitted to purchase;

(2) issue senior securities or borrow money, except from banks for
temporary purposes, and except for reverse repurchase agreements, and then in
an amount not exceeding 10% of the value of the Portfolio's total assets, and
only if after such borrowing there is asset coverage of at least 300 percent
for all borrowings of the Portfolio; or mortgage, pledge or hypothecate its
assets, except in connection with any such borrowing and in amounts not in
excess of 10% of the value of the Portfolio's assets at the time of such
borrowing; or purchase portfolio securities while borrowings in excess of 5%
of the Portfolio's net assets are outstanding. (This borrowing provision is
not for investment leverage, but solely to facilitate management of the
Portfolio by enabling the Portfolio to meet redemption requests where the
liquidation of portfolio securities is deemed to be inconvenient or
disadvantageous);

(3) invest more than 10% of the value of the Portfolio's assets in other
investment companies that are unaffiliated with the Fund and then no more than
5% of the Portfolio's assets may be invested in any one investment company;

(4) act as an underwriter;

(5) make loans except that the Portfolio may purchase or hold debt
obligations in accordance with its investment objective, policies and
limitations, may enter into repurchase agreements for securities, and may lend
portfolio securities against collateral, consisting of cash or securities
which are consistent with the Portfolio's permitted investments, which is
equal at all times to at least 100% of the value of the securities loaned.
There is no investment restriction on the amount of securities that may be
loaned;

(6) purchase securities on margin, except for short-term credit necessary
for clearance of portfolio transactions;

(7) make short sales of securities or maintain a short position or write or
sell puts, calls, straddles, spreads or combinations thereof;

(8) purchase or sell commodities or commodity contracts;

(9) purchase or sell real estate, provided that the Portfolio may invest
in securities secured by real estate or interests therein which are issued and
guaranteed by an agency or instrumentality of the U.S. Government, though not
necessarily by the U.S. Government itself;

(10) invest in oil, gas or mineral exploration or development programs;

(11) make investments for the purpose of exercising control or management; or

(12) purchase any securities which would cause, at the time of purchase,
more than 25% of the value of the total assets of the Portfolio to be invested
in the obligations of the issuers in the same industry.

9
<PAGE>

In addition, the Board of Directors has adopted the following non-
fundamental investment restrictions. The Portfolio will not:

(1) invest in real estate limited partnerships; or

(2) invest in oil, gas and mineral leases.

DIRECTORS AND OFFICERS

The Fund's officers, under the supervision of the Board of Directors, manage
the day to day operations of the Fund. Three Directors and all of the
officers of the Fund are directors, officers or employees of the Fund's
adviser, distributor or administrator. The other Directors have no
affiliation with the Fund's adviser, distributor or administrator. The
Directors are also directors of other open-end funds advised by Morgan Stanley
Asset Management Inc. (collectively with the Fund, the "Open-end Fund
Complex"). Officers of the Fund are also Officers of some or all of the other
investment companies managed, administered, advised or distributed by Morgan
Stanley Asset Management Inc. or its affiliates. The directors and executive
officers of the Fund, their business addresses and principal occupations
during the past five years are:

Name, Address Principal Occupation During
and Age Position with Fund Past Five Years

Barton M. Biggs* Chairman and Chairman and Director of Morgan
1221 Avenue of Director Stanley Asset Management Inc.and
the Americas Morgan Stanley Asset Management
New York, NY 10020 Limited; Managing Director of
(62) Morgan Stanley & Co., Inc.;
Director of Morgan Stanley Group
Inc.; Member of International
Advisory Counsel of the Thailand
Fund; Chairman and Director of
The Brazilian Investment Fund,
Inc., The Latin American
Discovery Fund, Inc., The
Malaysia Fund, Inc., Morgan
Stanley Africa Investment Fund,
Inc., Morgan Stanley Asia-
acific Fund, Inc., Morgan
Stanley Emerging Markets Debt
Fund, Inc., Morgan Stanley
Emerging Markets Fund, Inc.,
Morgan Stanley Fund Inc., Morgan
Stanley Global Opportunity Bond
Fund, Inc., Morgan Stanley High
Yield

10
<PAGE>
Fund, Inc., Morgan Stanley
India Investment Fund, Inc.,
Morgan Stanley Institutional
Fund, Inc., The Pakistan
Investment Fund, Inc., PCS
Cash Fund, Inc., The Thai Fund,
Inc. and The Turkish Investment
Fund, Inc.

Warren J. Olsen* Director and President Principal of Morgan Stanley &
1221 Avenue of the Co., Inc.; Principal of
Americas Morgan Stanley Asset Management
New York, NY 10020 Inc.; President and Director of
(39) The Brazilian Investment Fund,
Inc., The Latin American
Discovery Fund, Inc., The
Malaysia Fund, Inc., Morgan
Stanley Africa Investment Fund,
Inc., Morgan Stanley Asia-
Pacific Fund, Inc., Morgan
Stanley Emerging Markets Debt
Fund, Inc., Morgan Stanley
Emerging Markets Fund, Inc.,
Morgan Stanley Fund, Inc.,
Morgan Stanley Global
Opportunity Bond Fund, Inc.,
Morgan Stanley High Yield Fund,
Inc., Morgan Stanley India
Investment Fund, Inc., Morgan
Stanley Institutional Fund,
Inc., The Pakistan Investment
Fund, Inc., PCS Cash Fund,
Inc., The Thai Fund, Inc., and
The Turkish Investment Fund,
Inc.

John D. Barrett, II Director Chairman and Director of
521 Fifth Avenue Barrett Associates, Inc.
New York, NY 10135 (investment counseling);
(60) Director of the Ashforth
Company (real estate); Director
of the Morgan Stanley Fund,
Inc., Morgan Stanley
Institutional Fund, Inc. and
PCS Cash Fund, Inc.

Gerard E. Jones Director Partner in Richards & O'Neil
43 Arch Street L.L.P. (law firm); Director of
Greenwich, CT 06830 the Morgan Stanley Fund, Inc.,
(58) Morgan Stanley Institutional
Fund, Inc. and PCS Cash Fund,
Inc.

Andrew McNally IV Director Chairman and Chief Executive
8255 North Central Officer of Rand McNally
Park Avenue (publication); Director of
Skokie, IL 60076 Allendale Insurance Co.,
(54) Mercury Finance (consumer
finance); Zenith Electronics,
Hubbell, Inc. (industrial
electronics); Director of the
Morgan Stanley Fund, Inc.,
Morgan Stanley Institutional
Fund, Inc. and PCS Cash Fund,
Inc.; Director of the Morgan
Stanley Fund, Inc., Morgan
Stanley Institutional Fund,
Inc. and PCS Cash Fund, Inc.

11
<PAGE>

Samuel T. Reeves Director Chairman of the Board and CEO,
8211 North Pinacle L.L.C. (investment
Fresno Street firm); Director, Pacific Gas
Fresno, CA 93720 and Electric and PG&E
(61) Enterprises (utilities);
Director of the Morgan Stanley
Fund, Inc., Morgan Stanley
Institutional Fund, Inc. and
PCS Cash Fund, Inc.

Fergus Reid Director Chairman and Chief Executive
85 Charles Colman Blvd Officer of LumeLite Corporation
Pawling, NY 12564 (injection molding firm);
(63) Trustee and Director of Vista
Mutual Fund Group; Director of
the Morgan Stanley Fund, Inc.,
Morgan Stanley Institutional
Fund, Inc. and PCS Cash Fund,
Inc.

Frederick O. Robertshaw Director Chairman Of Counsel, Bryan,
2800 North Central Avenue Cave (law firm); Previously
Phoenix, AZ 85004 associated with Copple,
(61) Chamberlin & Boehm, P.C. and
Rake, Copple, Downey & Black,
P.C. (law firms); Director of
the Morgan Stanley Fund, Inc.,
Morgan Stanley Institutional
Fund,Inc. and PCS Cash Fund,
Inc.

Frederick B. Whittemore* Director Advisory Director of Morgan
1251 Avenue of the Stanley & Co., Inc.; Vice-
Americas, 30th Flr. Chairman and Director of The
New York, NY 10020 Brazilian Investment Fund,
(65) Inc., The Latin American
Discovery Fund, Inc., The
Malaysia Fund, Inc., Morgan
Stanley Africa Investment Fund,
Inc., Morgan Stanley Asia-
Pacific Fund, Inc., Morgan
Stanley Emerging Markets Debt
Fund, Inc., Morgan Stanley
Emerging Markets Fund, Inc.,
Morgan Stanley Fund, Inc.,
Morgan Stanley Global
Opportunity Bond Fund, Inc.,
Morgan Stanley High Yield
Fund, Inc., Morgan Stanley India
Investment Fund, Inc., Morgan
Stanley Institutional Fund,
Inc., The Pakistan Investment
Fund, Inc., PCS Cash Fund,
Inc., The Thai Fund, Inc. and
The Turkish Investment Fund,
Inc.

12
<PAGE>

James W. Grisham Vice President Principal of Morgan Stanley &
1221 Avenue of the Co., Inc.; Vice President of
Americas Morgan Stanley Asset Management
New York, NY 10020 Inc.; Vice President of The
(54) Brazilian Investment Fund,
Inc., The Latin American
Discovery Fund, Inc., The
Malaysia Fund, Inc., Morgan
Stanley Africa Investment Fund,
Inc., Morgan Stanley Asia-
Pacific Fund, Inc., Morgan
Stanley Emerging Markets Debt
Fund, Inc., Morgan Stanley
Emerging Markets Fund, Inc.,
Morgan Stanley Fund, Inc.,
Morgan Stanley Global
Opportunity Bond Fund, Inc.,
Morgan Stanley High Yield Fund,
Inc., Morgan Stanley India
Investment Fund, Inc., Morgan
Stanley Institutional Fund,
Inc., The Pakistan Investment
Fund, Inc., PCS Cash Fund,
Inc., The Thai Fund, Inc. and
The Turkish Investment Fund,
Inc.

Harold J. Schaaff, Jr. Vice President Principal of Morgan Stanley &
1221 Avenue of the Co.; Principal General Counsel
Americas and Secretary of Morgan Stanley
New York, NY 10020 Asset Management Inc.; Vice
(35) President of The Brazilian
Investment Fund, Inc., The
Latin American Discovery Fund,
Inc., The Malaysia Fund, Inc.,
Morgan Stanley Africa
Investment Fund, Inc., Morgan
Stanley Asia-Pacific Fund,
Inc., Morgan Stanley Emerging
Markets Debt Fund, Inc., Morgan
Stanley Emerging Markets Fund,
Inc., Morgan Stanley Fund,
Inc., Morgan Stanley Global
Opportunity Bond Fund, Inc.,
Morgan Stanley High Yield Fund,
Inc., Morgan Stanley India
Investment Fund, Inc., Morgan
Stanley Institutional Fund,
Inc., The Pakistan Investment
Fund, Inc., The PCS Cash Fund,
Inc., The Thai Fund, Inc. and
The Turkish Investment Fund,
Inc.

13
<PAGE>

Joseph P. Stadler Vice President Vice President of Morgan
1221 Avenue of the Stanley Asset Management Inc.;
Americas Previously with Price
New York, NY 10020 Waterhouse LLP (accounting); Vice
(41) President of The Brazilian
Investment Fund, Inc., The
Latin American Discovery Fund,
Inc., The Malaysia Fund, Inc.,
Morgan Stanley Africa
Investment Fund, Inc., Morgan
Stanley Asia-Pacific Fund,
Inc., Morgan Stanley Emerging
Markets Debt Fund, Inc., Morgan
Stanley Emerging Markets Fund,
Inc., Morgan Stanley Fund,
Inc., Morgan Stanley Global
Opportunity Bond Fund, Inc.,
Morgan Stanley High Yield Fund,
Inc., Morgan Stanley India
Investment Fund, Inc., Morgan
Stanley Institutional Fund,
Inc., The Pakistan Investment
Fund, Inc., PCS Cash Fund,
Inc., The Thai Fund, Inc. and
The Turkish Investment Fund,
Inc.

Valerie Y. Lewis Secretary Vice President of Morgan
1221 Avenue of the Stanley Asset Management Inc.;
Americas Previously with Citicorp
New York, NY 10020 (banking); Secretary of The
(39) Brazilian Investment Fund,
Inc., The Latin American
Discovery Fund, Inc., The
Malaysia Fund, Inc., Morgan
Stanley Africa Investment Fund,
Inc., Morgan Stanley Asia-
Pacific Fund, Inc., Morgan
Stanley Emerging Markets Debt
Fund, Inc., Morgan Stanley
Emerging Markets Fund, Inc.,
Morgan Stanley Fund, Inc.,
Morgan Stanley Global
Opportunity Bond Fund, Inc.,
Morgan Stanley High Yield Fund,
Inc., Morgan Stanley India
Investment Fund, Inc., Morgan
Stanley Institutional Fund,
Inc., The Pakistan Investment
Fund, Inc., PCS Cash Fund,
Inc., The Thai Fund, Inc. and
The Turkish Investment Fund,
Inc.

Karl O. Hartmann Assistant Secretary Senior Vice President,
73 Tremont Street Secretary and General Counsel
Boston, MA 02108-3913 of Chase Global Funds Services
(40) Company; Senior Vice President,
Secretary and General Counsel,
Leland, O'Brien, Rubinstein
Associates, Inc. (an investment
adviser) from November 1990 to
November 1991.

14
<PAGE>

Sharon A. Vandiver Assistant Secretary Assistant Vice President, PFPC
400 Bellevue Parkway Inc. and PNC Bank.
Wilmington, DE 19809
(36)

Stephen M. Wynne Treasurer Vice President, PFPC Inc. and
400 Bellevue Parkway PNC Institutional Management
Wilmington, DE 19809 Corporation.
(40)

Charles D. Curtis, Jr. Assistant Treasurer Vice President, PFPC Inc.
400 Bellevue Parkway Former Secretary and Treasurer,
Wilmington, DE 19809 Parkway Management Corporation.
(40)

___________________

* "Interested Person" within the meaning of the 1940 Act.

Effective June 28, 1995, the Open-end Fund Complex will pay each of the nine
Directors who is not an "interested person" an annual aggregate fee of
$55,000, plus out-of-pocket expenses. The Open-end Fund Complex will pay each
of the members of the Fund's Audit Committee, which consists of the Fund's
Directors who are not "interested persons," an additional annual aggregate fee
of $10,000 for serving on such a committee. The allocation of such fees will
be among the three funds in the Open-end Fund Complex in direct proportion to
their respective average net assets. For the fiscal year ended June 30, 1995
fees and expenses paid to the Directors of the Fund totalled $54,500. The
Fund currently has no employees, as substantially all of the services
necessary for the operation of the Fund are performed by Morgan Stanley Asset
Management Inc., the Fund's advisor, PNC Bank, National Association (successor
by merger to Provident National Bank) ("PNC Bank"), the Fund's custodian, PFPC
Inc. (formerly Provident Financial Processing Corporation) ("PFPC"), the
Fund's administrator and transfer and dividend disbursing agent, and Morgan
Stanley & Co., Incorporated (the "Distributor"), the Fund's distributor.
Except for fees paid to the Fund's Chairman, as discussed above, no officer,
director or employee of Morgan Stanley Asset Management, Inc., PNC Bank, PFPC
or the Distributor currently receives any compensation from the Fund.

The aggregate compensation paid by the Fund and the Fund Complex to each of
the Fund's Directors serving during the fiscal year ended June 30, 1995 is set
forth in the compensation table below.

15
<PAGE>

<TABLE>
<CAPTION>
COMPENSATION TABLE

(1) (2) (3) (4) (5)
Name of Aggregate Pension or Estimated Total
Person, Compensation Retirement Annual Compensation
Position From Benefits Accrued Benefits From Registrant
Registrant as Part of Fund Upon and Fund Complex
Expenses Retirement Paid to Directors
<S> <C> <C> <C> <C>

Barton M. Biggs,*
Director and Chairman of
the Board N/A* N/A*

John D. Barret II,*
Director N/A* N/A*

John P. Britton,***
Director $10,100 - - $26,600

George R. Bunn, Jr.,***
Director $13,650 - - $32,00

A. Macdonald Caputo,***
Director N/A N/A

Peter E. deSvastich,***
Director $10,100 - - $29,958

Gerard E. Jones,**
Director $10,100 - - $80,057

Warren J. Olsen,**
Director and President N/A N/A

Andrew McNally IV,*
Director N/A* N/A*

Samuel T. Reeves,*
Director N/A* N/A*

Fergus Reid,*
Director N/A* N/A*

Frederick O. Robertshaw,*
Director N/A* N/A*

Frederick B. Whittemore,**
Director (Chairman of
the Board until
June 28, 1995) $10,400 - - $57,400

<FN>
* Elected (Director) as of June 28, 1995.

** Reelected as of June 28, 1995.

*** Resigned as of June 28, 1995.

</FN>
</TABLE>

16
<PAGE>

INVESTMENT ADVISORY, DISTRIBUTION AND SERVICING ARRANGEMENTS

ADVISORY AGREEMENTS. The advisory services provided by Morgan Stanley Asset
Management Inc. (the "Advisor") and the fees received for such services are
described in the Prospectus. The Advisor renders advisory services to the
Portfolios pursuant to three separate Investment Advisory Agreements, each
dated as of July 3, 1989 (collectively, the "Advisory Agreements). For the
fiscal years ended June 30, 1995, June 30, 1994, and June 30, 1993 the Advisor
received from the Fund, out of the assets of the PCS Money Market Portfolio,
fees in the amount of $611,754, $686,138 and $652,763, respectively (net of
voluntary fee waivers of $87,105, $109,879 and $123,416, respectively). For
the fiscal years ended June 30, 1995, June 30, 1994 and June 30, 1993, the
Advisor received from the Fund, out of the assets of the PCS Government
Obligations Money Market Portfolio, fees in the amount of $897,867, $412,757
and $741,203, respectively (net of voluntary fee waivers of $0, $25,448 and
$20,059, respectively). The Advisor and the Distributor are voluntarily
waiving a portion of their respective fees until such time as they determine
that the Fund's performance is competitive with other comparable funds without
such waivers.

As required by various state regulations, the Advisor will reimburse the
Fund or a Portfolio (as applicable) if and to the extent that the aggregate
operating expenses of the Fund or the applicable Portfolio exceed applicable
state limits for the fiscal year, to the extent required by such state
regulations. Currently, the most restrictive of such applicable limits is
2.5% of the first $30 million of average daily net assets, 2.0% of the next
$70 million of average daily net assets and 1.5% of the remaining average
daily net assets. Certain expenses, such as brokerage commissions, taxes,
interest and extraordinary items, are excluded from this limitation. Whether
such expense limitations apply to the Fund as a whole or to a Portfolio on an
individual basis depends upon the particular regulations of such states. No
such reimbursements were required in any fiscal period since the Fund
commenced operations.

A Portfolio bears all of its own expenses not specifically assumed by the
Advisor. General expenses of the Fund not readily identifiable as belonging to
a portfolio are allocated among the portfolios by or under the direction of
the Fund's Board of Directors in such manner as the Board determines to be
fair and equitable. Expenses borne by a portfolio include, but are not
limited to, the following (or a portfolio's share of the following): (a) the
cost (including brokerage commissions) of securities purchased or sold by a
portfolio and any losses incurred in connection therewith; (b) fees payable to
and expenses incurred on behalf of a portfolio by the Advisor; (c) expenses of
organizing the Fund; (d) certain of the filing fees and expenses relating to
the registration and qualification of the Fund and a portfolio's shares under
federal and/or state securities laws and maintaining such registrations and
qualifications; (e) fees and salaries payable to the Fund's directors and
officers; (f) taxes (including any income or franchise taxes) and governmental
fees; (g) costs of any liability and other insurance or fidelity bonds; (h)
any costs, expenses or losses arising out of a liability of or claim for
damages or other relief asserted against the Fund or a portfolio for violation
of any law; (i) legal, accounting and auditing expenses, including legal fees
of special counsel for the independent directors; (j) charges of custodians
and other agents; (k) expenses of setting in type and printing prospectuses,
statements of additional information and supplements thereto for existing
shareholders, reports, statements, and confirmations to shareholders and proxy
material that are not attributable to a class; (l) costs of mailing
prospectuses, statements of additional information and supplements thereto to
existing shareholders, as well as reports to shareholders and proxy material;
(m) any extraordinary expenses; (n) fees, voluntary assessments and other
expenses incurred in connection with membership in investment company
organizations; (o) costs of mailing and tabulating proxies and costs of
shareholders' and directors' meetings; (p) costs of the Advisor's use of
independent pricing services to value a portfolio's securities; (q) the cost
of investment company literature and other publications provided by the Fund
to its directors and officers; (r) distribution expenses; (s) transfer agency
expenses; (t) expenses of preparation, printing and mailing

17
<PAGE>
prospectuses, statements of additional information, proxy statements
and reports to shareholders; and (u) organizational expenses and
registration fees.

Under the Advisory Agreement, the Advisor will not be liable for any error
of judgment or mistake of law or for any loss suffered by the Fund or a
Portfolio in connection with the performance of the Advisory Agreement, except
a loss resulting from willful misfeasance, bad faith or gross negligence on
the part of the Advisor in the performance of its duties or from reckless
disregard of its duties and obligations thereunder.

Each Advisory Agreement was approved by the Fund's initial shareholder on
June 30, 1989 and was most recently approved on June 28, 1995 by a vote of the
Fund's Board of Directors, including a majority of those directors who are not
parties to the Advisory Agreement or "interested persons" of such parties.
Each Advisory Agreement is terminable by vote of the Fund's Board of Directors
or by the holders of a majority of the outstanding voting securities of the
Portfolios, at any time without penalty, on 90 days' written notice to the
Advisor. Each Advisory Agreement may also be terminated by the Advisor on 60
days' written notice to the Fund. Each Advisory Agreement terminates
automatically in the event of its assignment.

ADMINISTRATION AGREEMENT. PFPC serves as Administrator of the Fund pursuant
to an Administration Agreement dated as of July 3, 1989. The services
provided and fees received by PFPC are described in the Fund's prospectus.
PFPC, may, on 30 days' notice to the Fund, assign its duties as Administrator
to any other affiliate of PNC Financial Corp. For administrative services for
the Fund for the fiscal years ended June 30, 1995, June 30, 1994 and June 30,
1993 the Fund paid the Administrator aggregate fees of $346,829 ($155,302 for
services to the PCS Money Market Portfolio and $191,527 for services to the
PCS Government Obligations Money Market Portfolio), $283,085 ($175,775 for
services to the PCS Money Market Portfolio and $107,310 for services to the
PCS Government Obligations Money Market Portfolio) and $339,279 ($171,956 for
services to the PCS Money Market Portfolio and $167,323 for services to the
PCS Government Obligations Money Market Portfolio), respectively.

CUSTODIAN AND TRANSFER AGENCY AGREEMENTS. PNC Bank is custodian of the
Fund's assets pursuant to a custodian agreement dated as of July 3, 1989 (the
"Custodian Agreement"). Under the Custodian Agreement, PNC Bank (a) maintains
a separate account or accounts in the name of the Portfolios (b) holds and
transfers portfolio securities on account of the Portfolios, (c) accepts
receipts and makes disbursements of money on behalf of the Portfolios, (d)
collects and receives all income and other payments and distributions on
account of the Portfolios' portfolio securities and (e) makes periodic reports
to the Fund's Board of Directors concerning the Portfolios' operations. PNC
Bank is authorized to select one or more banks or trust companies to serve as
sub-custodian on behalf of the Fund, provided that PNC Bank remains
responsible for the performance of all its duties under the Custodian
Agreement and holds the Fund harmless from the acts and omissions of any
sub-custodian.

PFPC serves as the transfer and dividend disbursing agent for the Fund
pursuant to a Transfer Agency Agreement dated as of July 3, 1989 (the
"Transfer Agency Agreement"), under which PFPC (a) issues and redeems shares
of the Portfolios, (b) addresses and mails all communications by the
Portfolios to record owners of shares, including reports to shareholders,
dividend and distribution notices and proxy materials for its meetings of
shareholders, (c) maintains shareholder accounts and, if requested,
sub-accounts and (d) makes periodic reports to the Fund's Board of Directors
concerning the operations of the Portfolios. PFPC may, on 30 days' notice to
the Fund, assign its duties as transfer and dividend disbursing agent to any
other affiliate of PNC Financial Corp.

DISTRIBUTION AGREEMENTS AND PLANS. Pursuant to the terms of separate
distribution contracts, dated as of July 3, 1989 (the "Distribution
Contracts") entered into by the Distributor and the

18
<PAGE>

Fund on behalf of the Portfolios, and a separate Plan of Distribution for each
Portfolio (the "Plans"), all of which were adopted by the Fund in the manner
prescribed by Rule 12b-1 under the 1940 Act, the Distributor will use its best
efforts to distribute shares of the Portfolios. As compensation for its
distribution services, the Distributor will receive, pursuant to the terms of
the Distribution Contracts, a distribution fee, to be calculated daily and
paid monthly, at the annual rate set forth in the Prospectus. The Distributor
currently proposes to re-allow up to all of its distribution payments to
broker/dealers for selling shares of the Portfolios based on a percentage of
the amounts invested by their customers. For the fiscal years ended June 30,
1995, June 30, 1994, and June 30, 1993 the Distributor received fees from the
Fund for distribution of the PCS Money Market Portfolio of $545,816, $619,125
and $603,695, respectively, (net of voluntary fee waivers of $230,695,
$265,339 and $258,726, respectively) and paid from the fees it received
$173,196, $161,796 and $219,161, respectively, to broker dealers as
compensation for selling shares of such Portfolio. For the fiscal years ended
June 30, 1995, June 30, 1994 and June 30, 1993, the Distributor received fees
from the Fund for distribution of the PCS Government Obligations Money Market
Portfolio of $661,194, $252,061 and $462,592, respectively (net of voluntary
fee waivers of $351,869, $234,833 and $390,097, respectively) and paid from
the fees it received $62,899, $122,228 and $163,790, respectively, to broker
dealers as compensation for selling shares of such Portfolio. The Advisor and
the Distributor are voluntarily waiving a portion of their respective fees
until such time as they determine that the Fund's performance is competitive
with other comparable funds without such waivers.

Each of the Distribution Contracts provides that it shall continue in effect
for a period of more than two years from the date of its execution only so
long as such continuance is specifically approved at least annually by the
Board of Directors or by the shareholders in the manner prescribed by the 1940
Act. Each Distribution Contract also provides, in substance, for its automatic
termination in the event of its assignment. The Distribution Contracts were
most recently approved by the Fund's Board of Directors on June 28, 1995.

The Plans with respect to the Portfolios were approved on June 7, 1989 and
most recently on June 28, 1995 by the Fund's Board of Directors, including the
directors who are not "interested persons" of the Fund and who have no direct
or indirect financial interest in the operation of the Plans or any agreements
related to the Plans ("12b-1 Directors"). The Plans with respect to the
Portfolios were also approved by the Fund's sole shareholder on June 30, 1989.

Among other things, the Plans provide that: (1) the Distributor shall be
required to submit quarterly reports to the directors of the Fund regarding
all amounts expended under the Plans and the purposes for which such
expenditures were made, including commissions, advertising, printing,
interest, carrying charges and any allocated overhead expenses; (2) the Plans
will continue in effect only so long as they are approved at least annually,
and any material amendment thereto is approved, by the Fund's directors,
including the 12b-1 Directors, acting in person at a meeting called for said
purpose; (3) the aggregate amount to be spent by the Fund on the distribution
of the Fund's shares of the Portfolios under the Plans shall not be materially
increased without the affirmative vote of the holders of a majority of the
Fund's shares in a Portfolio; and (4) while the Plans remain in effect, the
selection and nomination of the Fund's directors who are not "interested
persons" of the Fund (as defined in the 1940 Act) shall be committed to the
discretion of the directors who are not interested persons of the Fund.

PORTFOLIO TRANSACTIONS

The Portfolios intend to purchase securities with remaining maturities of
397 days or less, except for securities that are subject to repurchase
agreements (which in turn may have maturities of 397 days or less), and
variable rate securities with remaining maturities of 397 days or more so long

19
<PAGE>
as such securities comply with conditions established by the SEC under which
they may be considered to have remaining maturities of 397 days or less.
Because each Portfolio intends to purchase only securities with remaining
maturities of 397 days or less, its respective portfolio turnover rate will be
relatively high. However, because brokerage commissions will not normally be
paid with respect to investments made by a Portfolio, the turnover rate should
not adversely affect a Portfolio's net asset value or net income. The
Portfolios do not intend to seek profits through short term trading.

Purchases of portfolio securities by the Portfolios are made from dealers,
underwriters and issuers; sales are made to dealers and issuers. The
Portfolios do not currently expect to incur any brokerage commission expense
on such transactions because money market instruments are generally traded on
a "net" basis with dealers acting as principal for their own accounts without
a stated commission. The price of the security, however, usually includes a
profit to the dealer. Securities purchased in underwritten offerings include
a fixed amount of compensation to the underwriter, generally referred to as
the underwriter's concession or discount. When securities are purchased
directly from or sold directly to an issuer, no commissions or discounts are
paid. It is the policy of the Portfolios to give primary consideration to
obtaining the most favorable price and efficient execution of transactions.
In seeking to implement the policies of the Portfolios, the Advisor will
effect transactions with those dealers it believes provide the most favorable
prices and are capable of providing efficient executions. In no instance will
portfolio securities be purchased from or sold to the Distributor, the
Advisor, or any affiliated person (as defined in the 1940 Act) of the
foregoing entities except to the extent permitted by SEC exemptive order or by
applicable law.

The Advisor may seek to obtain an undertaking from issuers of commercial
paper or dealers selling commercial paper to consider the repurchase of such
securities from the Portfolios prior to their maturity at their original cost
plus interest (sometimes adjusted to reflect the actual maturity of the
securities), if it believes that the Portfolios' anticipated need for
liquidity makes such action desirable. Any such repurchase prior to maturity
reduces the possibility that a Portfolio would incur a capital loss in
liquidating commercial paper (for which there is no established market),
especially if interest rates have risen since acquisition of the particular
commercial paper.

Investment decisions for the Portfolios and for other investment accounts
managed by the Advisor are made independently of each other in the light of
differing conditions. However, the same investment decision may occasionally
be made for two or more of such accounts. In such cases, simultaneous
transactions are inevitable. Purchases or sales are then averaged as to price
and allocated as to amount according to a formula deemed equitable to each
such account. While in some cases this practice could have a detrimental
effect upon the price or value of the security as far as a Portfolio is
concerned, in other cases it is believed to be beneficial to a Portfolio. The
Portfolios will not purchase securities during the existence of any
underwriting or selling group relating to such security of which the
Distributor or any affiliated person (as defined in the 1940 Act) thereof is a
member except pursuant to procedures adopted by the Fund's Board of Directors
pursuant to Rule 10f-3 under the 1940 Act. Among other things, these
procedures, which will be reviewed by the Fund's directors annually, require
that the commission paid in connection with such a purchase be reasonable and
fair, that the purchase be at not more than the public offering price prior to
the end of the first business day after the date of the public offer, and that
the Advisor not participate in or benefit from the sale to the Portfolio. The
Fund paid no brokerage commissions in the fiscal years ended June 30, 1995,
June 30, 1994 and June 30, 1993.

The Fund is required to identify any securities of its "regular brokers or
dealers" (as such term is defined in the 1940 Act) which the Fund has acquired
during its most recent fiscal year. As of June 30, 1995, the PCS Money Market
Portfolio held a 6.05% repurchase agreement issued by Goldman, Sachs & Co.
valued at $35,380,000 and the PCS Government Obligations Money Market
Portfolio held a

20
<PAGE>

6.05% repurchase agreement issued by Goldman Sachs & Co. valued at
$11,930,000 Goldman Sachs & Co. is a "regular broker or dealer" of
the Fund.

PURCHASE AND REDEMPTION INFORMATION

The Fund reserves the right, if conditions exist which make cash payments
undesirable, to honor any request for redemption or repurchase of the
Portfolio's shares by making payment in whole or in part in securities chosen
by the Fund and valued in the same way as they would be valued for purposes of
computing each Portfolio's net asset value. If payment is made in securities,
a shareholder may incur transaction costs in converting these securities into
cash. The Fund has elected, however, to be governed by Rule 18f-1 under the
1940 Act so that a Portfolio is obligated to redeem its shares solely in cash
up to the lesser of $250,000 or 1% of its net asset value during any 90-day
period for any one shareholder of a Portfolio.

Under the 1940 Act, a Portfolio may suspend the right of redemption or
postpone the date of payment upon redemption for any period during which the
New York Stock Exchange (the "NYSE") is closed (other than customary weekend
and holiday closings), or during which trading on said Exchange is restricted,
or during which (as determined by the SEC by rule or regulation) an emergency
exists as a result of which disposal or valuation of portfolio securities is
not reasonably practicable, or for such other periods as the SEC may permit.
(A Portfolio may also suspend or postpone the recordation of the transfer of
its shares upon the occurrence of any of the foregoing conditions.)

VALUATION OF SHARES

The Fund intends to use its best efforts to maintain the net asset value of
each Portfolio at $1.00 per share. However, there is no assurance that each
Portfolio will maintain a stable net asset value of $1.00 per share. Net
asset value per share, the value of an individual share in a Portfolio, is
computed by dividing a Portfolio's net assets by the number of outstanding
shares of that Portfolio. A Portfolio's "net assets" equal the value of that
Portfolio's investments and other securities less its liabilities. The Fund's
net asset value per share is computed twice each day, as of 12:00 noon
(Eastern Time) and as of the close of trading on the NYSE, on each Business
Day. "Business Day" means each day, Monday through Friday, when the NYSE and
the Federal Reserve Bank of Philadelphia (the "FRB") are open. Currently, the
NYSE or the FRB, or both, are closed on New Year's Day, Martin Luther King,
Jr.'s Birthday, Presidents' Day, Good Friday, Memorial Day, Independence Day,
Labor Day, Columbus Day, Veteran's Day, Thanksgiving Day and Christmas Day.

The Fund calculates the value of the portfolio securities of the Portfolios
by using the amortized cost method of valuation. Under this method the market
value of an instrument is approximated by amortizing the difference between
the acquisition cost and value at maturity of the instrument on a
straight-line basis over the remaining life of the instrument. The effect of
changes in the market value of a security as a result of fluctuating interest
rates is not taken into account. The market value of debt securities usually
reflects yields generally available on securities of similar quality. When
such yields decline, market values can be expected to increase, and when
yields increase, market values can be expected to decline. In addition, if a
large number of redemptions take place at a time when interest rates have
increased, a Portfolio may have to sell portfolio securities prior to maturity
and at a price which might not be as desirable.

The amortized cost method of valuation may result in the value of a security
being higher or lower than its market price, the price a Portfolio would
receive if the security were sold prior to maturity. The Fund's Board of
Directors has established procedures for the purpose of maintaining a

21
<PAGE>

constant net asset value of $1.00 per share for the Portfolio, which include
a review of the extent of any deviation of net asset value per share, based on
available market quotations, from the $1.00 amortized cost per share. Should
that deviation exceed 1/2 of 1% for a Portfolio, the Board of Directors will
promptly consider whether any action should be initiated to eliminate or
reduce material dilution or other unfair results to shareholders. Such action
may include redeeming shares in kind, selling portfolio securities prior to
maturity, reducing or withholding dividends, and utilizing a net asset value
per share as determined by using available market quotations.

Each Portfolio will maintain a dollar-weighted average portfolio maturity of
90 days or less, will not purchase any instrument with a deemed maturity under
Rule 2a-7 of the 1940 Act ("Rule 2a-7") greater than 397 days and will limit
portfolio investments, including repurchase agreements (where permitted), to
those instruments contained on the Advisor's list of securities in which the
Portfolio may invest (the "Approved List"). All securities on the Approved
List must, as required by Rule 2a-7, be "Eligible Securities," present minimal
credit risks, be U.S. dollar denominated and have a remaining maturity of 397
days or less. (See the "Appendix" for the definition of "Eligible Security.")
The Board of Directors has adopted guidelines to be used by the Advisor in
making the foregoing determinations and the Advisor will comply with certain
reporting and recordkeeping procedures concerning such determinations. In the
event amortized cost ceases to represent fair value in the judgment of the
Fund's Board of Directors, the Board will take such actions as it deems
appropriate.

In determining the approximate market value of portfolio investments, the
Fund may employ outside organizations, which may use a matrix or formula
method that takes into consideration market indices, matrices, yield curves
and other specific adjustments. This may result in the securities being
valued at a price different from the price that would have been determined had
the matrix or formula method not been used. All cash, receivables and current
payables are carried on the Fund's books at their face value. Other assets,
if any, are valued at fair value as determined in good faith by the Fund's
Board of Directors.

PERFORMANCE INFORMATION. For the seven day period ended June 30, 1995, the
current yield for the PCS Money Market Portfolio and the PCS Government
Obligations Money Market Portfolio was 5.01% and 5.08%, respectively and the
effective yield for each Portfolio was 5.14% and 5.21%, respectively. The PCS
Tax-Free Money Market Portfolio was not in operation during that period.

Each Portfolio's current and effective yield are computed using standardized
methods required by the SEC. The annualized yield for a Portfolio is computed
by: (a) determining the net change in the value of a hypothetical account
having a balance of one share at the beginning of a seven-calendar day period;
(b) dividing the net change by the value of the account at the beginning of
the period to obtain the base period return; and (c) annualizing the results
(i.e., multiplying the base period return by 365/7). The net change in the
value of the account reflects the value of additional shares purchased with
dividends declared and all dividends declared on both the original share and
such additional shares, but does not include realized gains and losses or
unrealized appreciation and depreciation. Compound effective yields are
computed by adding 1 to the base period return (calculated as described
above), raising the sum to a power equal to 365/7 and subtracting 1. The PCS
Tax-Free Money Market Portfolio's tax-equivalent yield is also computed using
a standardized method required by the SEC. Such yield is determined by
dividing the tax-exempt portion of the Portfolio's effective yield for a
stated seven day period by one minus the investor's income tax rate and adding
the product to the portion of the yield for the same seven day period that is
not tax-exempt. The resulting yield is what the investor would need to earn
from a taxable investment in order to realize an after-tax benefit equal to
the tax-free yield provided by the Portfolio.

22
<PAGE>

Yield may fluctuate daily and does not provide a basis for determining
future yields. Because the yields of the Portfolios will fluctuate, it cannot
be compared with yields on savings account or other investment alternatives
that provide an agreed to or guaranteed fixed yield for a stated period of
time. However, yield information may be useful to an investor considering
temporary investments in money market instruments. In comparing the yield of
one money market fund to another, consideration should be given to each fund's
investment policies, including the types of investments made, lengths of
maturities of the portfolio securities, the method used by each fund to
compute the yield (methods may differ) and whether there are any special
account charges which may reduce the effective yield.

The yields on certain obligations, including the money market instruments in
which the Portfolios invest (such as commercial paper and bank obligations),
are dependent on a variety of factors, including general money market
conditions, conditions in the particular market for the obligation, the
financial condition of the issuer, the size of the offering, the maturity of
the obligation and the ratings of the issue. The ratings of Moody's Investors
Service and Standard & Poor's Corporation represent their respective opinions
as to the quality of the obligations they undertake to rate. Ratings,
however, are general and are not absolute standards of quality. Consequently,
obligations with the same rating, maturity and interest rate may have
different market prices. In addition, subsequent to its purchase by a
Portfolio, an issue may cease to be rated or may have its rating reduced below
the minimum required for purchase. In such an event, the Advisor will consider
whether a Portfolio should continue to hold the obligation.

TAXES

The following discussion of federal income tax consequences is based on the
Internal Revenue Code of 1986, as amended (the "Code") and the regulations
issued thereunder as in effect on the date of this Statement of Additional
Information. New legislation, as well as administrative changes or court
decisions, may significantly change the conclusions expressed herein, and may
have a retroactive effect with respect to the transactions contemplated
herein.

The following is only a summary of certain additional tax considerations
generally affecting each Portfolio and its shareholders that are not described
in the Fund's Prospectus. No attempt is made to present a detailed
explanation of the tax treatment of each Portfolio or its shareholders, and
the discussion here and in the Fund's Prospectus is not intended as a
substitute for careful tax planning. Investors are urged to consult their tax
advisers with specific reference to their own tax situations.

Each Portfolio will elect to be taxed as a regulated investment company
("RIC") under Subchapter M of the Code. As a RIC, each Portfolio is exempt
from federal income tax on its net investment income and its net realized
short-term and long-term capital gains which it distributes to shareholders,
provided that it distributes each year an amount equal to at least the sum of
(a) 90% of its investment company taxable income (including, for this purpose,
its net realizes short-term capital gains), if any, for the year and (b) 90%
of its net tax-exempt interest income, if any, for the year (the "Distribution
Requirement") and satisfies certain other requirements of the Code that are
described below to the extent that they relate to the investments contemplated
by the Portfolios. The Distribution Requirement for any year may be waived if
a RIC establishes to the satisfaction of the Internal Revenue Service that it
is unable to satisfy the Distribution Requirement by reason of distributions
previously made for the purpose of avoiding liability for federal excise tax
(discussed below).

In addition to satisfaction of the Distribution Requirement each Portfolio
generally must derive at least 90% of its gross income each taxable year from
dividends, interest, certain payments with

23
<PAGE>

respect to securities loans and gains from the sale or other disposition of
stock or securities, or from other income derived with respect to its
business of investing in such stock or securities (the "Income Requirement"),
and generally must derive less than 30% of its gross income each taxable
year from the sale or other disposition of stocks or securities held for
less than three months (the "Short-Short Gain Test").

In addition to the foregoing requirements, at the close of each quarter of
its taxable year, at least 50% of the market value of each Portfolio's assets
must consist of cash and cash items, U.S. Government securities, securities of
other RICs, and securities of other issuers (as to which such Portfolio has
not invested more than 5% of the value of its total assets in securities of
such issuer and as to which such Portfolio does not hold more than 10% of the
outstanding voting securities of such issuer), and no more than 25% of the
market value of each Portfolio's total assets may be invested in the
securities (other than U.S. Government securities and securities of other
RICs) of any one issuer, or of two or more issuers which a Portfolio controls
and which are engaged in the same, similar or related trades or businesses.

While the Portfolios do not expect to realize long-term capital gains, any
net long-term capital gain, in excess of net short-term capital loss ("net
capital gain"), such as gain from the sale of debt securities and Municipal
Obligations, will be distributed annually. A Portfolio will not have income
tax liability with respect to such gains, and the distributions will be
taxable to Portfolio shareholders as long-term capital gains, regardless of
how long a shareholder has held Portfolio shares.

If for any taxable year a Portfolio does not qualify as a RIC, all of its
taxable income will be subject to tax at regular corporate rates without any
deduction for distributions to shareholders, and all distributions will be
taxable to shareholders as ordinary dividends to the extent of that
Portfolio's current and accumulated earnings and profits. Such distributions
will be eligible for the dividends received deduction in the case of corporate
shareholders.

Shareholders will be advised annually as to the federal income tax status of
distributions made by the Portfolios during the year.

The Code imposes a non-deductible 4% federal excise tax on RICs that do not
distribute in each calendar year an amount equal to 98 percent of their
ordinary income for the calendar year plus 98 percent of their capital gain
net income (the excess of short and long-term capital gains over short and
long-term capital losses) for the 1-year period ending on October 31 of such
calendar year, plus certain other amounts. The balance of such income must be
distributed during the next calendar year. For the foregoing purposes, a
company is treated as having distributed any amount on which it is subject to
income tax for any taxable year ending in such calendar year. Because the
Portfolios intend to distribute all of their taxable income currently, the
Portfolios do not anticipate incurring any liability for this excise tax.

The Fund will be required in certain cases to withhold and remit to the
United States Treasury 31% of distributions paid to any shareholder (1) who
has provided either an incorrect tax identification number or no number at
all, (2) who is subject to backup withholding by the Internal Revenue Service
for failure to report the receipt of interest or dividend income properly, or
(3) who has failed to certify to the Fund that such taxpayer is not subject to
backup withholding.

Although each Portfolio expects to qualify as a RIC and to be relieved of
all or substantially all federal income taxes, depending upon the extent of
its activities in states and localities in which its offices are maintained,
in which its agents or independent contractors are located or in which it is
otherwise deemed to be conducting business, each Portfolio may be subject to
the tax laws of such states or localities.

24
<PAGE>

ADDITIONAL CONSIDERATIONS FOR THE PCS TAX-FREE MONEY MARKET PORTFOLIO

In order for the PCS Tax-Free Money Market Portfolio to pay exempt interest
dividends during any taxable year, at the close of each quarter of its taxable
year at least 50% of the value of the Portfolio's assets must consist of
certain tax-exempt obligations. Exempt-interest dividends distributed to
shareholders are not included in the shareholder's gross income for regular
federal income tax purposes. Exempt-interest dividends may, however, be
subject to the alternative minimum tax (the "AMT") imposed by Section 55 and,
in the case of corporate taxpayers, the Code or the environmental tax (the
"Environmental Tax") imposed by Section 59A of the Code. The AMT and the
Environmental Tax may be imposed in two circumstances. First, exempt-interest
dividends derived from certain "private activity bonds" issued after August 7,
1986, will generally be an item of tax preference (and therefore potentially
subject to the AMT and the Environmental Tax) for both corporate and
non-corporate taxpayers. Second, in the case of exempt-interest dividends
received by corporate shareholders, all exempt-interest dividends, regardless
of when the bonds from which they are derived were issued or whether they are
derived from private activity bonds, will be included in the corporation's
"adjusted current earnings," as defined in Section 56(g) of the Code, in
calculating the corporation's alternative minimum taxable income for purposes
of determining the AMT and the Environmental Tax.

The deduction otherwise allowable to property and casualty insurance
companies for "losses incurred" will be reduced by an amount equal to a
portion of exempt-interest dividends received or accrued during any taxable
year. Foreign corporations engaged in a trade or business in the United
States will be subject to a "branch profits tax" on their "dividend equivalent
amount" for the taxable year, which will include exempt-interest dividends.
Certain Subchapter S corporations may also be subject to taxes on their
"passive investment income," which could include exempt-interest dividends.
Up to 85% (depending on the taxpayer's income) of the Social Security benefits
or railroad retirement benefits received by an individual during any taxable
year will be included in the gross income of such individual depending upon
the individual's "modified adjusted gross income" (which includes
exempt-interest dividends).

The PCS Tax-Free Money Market Portfolio may not be an appropriate investment
for persons (including corporations and other business entities) who are
"substantial users" (or persons related to such users) of facilities financed
by industrial development or private activity bonds. A "substantial user" is
defined generally to include certain persons who regularly use such a facility
in their trade or business. Such entities or persons should consult their tax
advisors before purchasing Shares of this Portfolio.

Issuers of bonds purchased by the PCS Tax-Free Money Market Portfolio (or
the beneficiary of such bonds) may have made certain representations or
covenants in connection with the issuance of such bonds to satisfy certain
requirements of the Code that must be satisfied subsequent to the issuance of
such bonds. Investors should be aware that exempt-interest dividends derived
from such bonds may become subject to federal income taxation retroactively to
the date of issuance thereof if such representations are determined to have
been inaccurate or if the issuer of such bonds (or the beneficiary of such
bonds) fails to comply with such covenants.

Distributions of net investment income received by the PCS Tax-Free Money
Market Portfolio from investments in debt securities (other than interest on
tax-exempt Municipal Obligations) and any net short-term capital gains
distributed by the Portfolio will be taxable to shareholders as ordinary
income and will not be eligible for the dividends received deduction for
corporate shareholders. Although the PCS Tax-Free Money Market Portfolio
generally does not expect to receive net investment income other than
Tax-Exempt Interest, up to 20% of the net assets of the Portfolio may be
invested in Municipal Obligations that do not bear Tax-Exempt Interest, and
any taxable income recognized by the Portfolio will be distributed and taxed
to its shareholders.

25
<PAGE>

ADDITIONAL INFORMATION CONCERNING FUND SHARES

The Fund does not currently intend to hold annual meetings of shareholders
except as required by the 1940 Act or the Maryland General Corporation law.
Shareholders have the right to call for a special meeting of shareholders to
consider the removal of one or more directors upon the written request of
those shareholders entitled to cast at least 10 percent of all the votes
entitled to be cast at such a meeting. To the extent required by law, the
Fund will assist in shareholder communication in such matters.

Unless otherwise provided by federal or state law, or by the Fund's Articles
of Incorporation, the Fund may take or authorize any corporate action upon the
favorable vote of the holders of more than 50% of all of the outstanding
shares of Common Stock voting without regard to Portfolio.

MISCELLANEOUS

COUNSEL. The law firm of Morgan, Lewis & Bockius LLP serves as counsel to the
Fund.

INDEPENDENT ACCOUNTANTS. Coopers & Lybrand L.L.P. serves as the Fund's
independent accountants. The Fund's financial statements which appear in this
Statement of Additional Information have been audited by Coopers & Lybrand
L.L.P., as set forth in their report, which also appears in this Statement of
Additional Information. Coopers & Lybrand L.L.P. has offices at 2400 Eleven
Penn Center, Philadelphia, Pennsylvania 19103.

CONTROL PERSONS. The names and address of the holders of 5% or more of the
outstanding shares of the Fund's PCS Money Market Portfolio and PCS Government
Obligations Money Market Portfolio as of September 30, 1995, and the percentage
of outstanding shares of each such Portfolio owned by such shareholders as of
such date, to Fund Management's knowledge, are as follows:

PCS Money Market Portfolio. As of September 30, 1995, there was one
beneficial owner of 5% or more of the outstanding shares of the PCS Money
Market Portfolio.

26
<PAGE>

Amoco Sub Custodian Chase Manhattan, One Pierrepont Plaza, 10th Floor,
Brooklyn, New York 11201, owned 7% of such Portfolio's total outstanding
shares.

PCS Government Obligations Money Market Portfolio. As of September 30, 1995
there were four beneficial owners of 5% or more of the outstanding shares of
the PCS Government Obligations Money Market Portfolio: Zweig-Dimenna
Partnership L.P. c/o Prime Brokerage, Attn: Sheung Tam, One Pierrepont Plaza,
10th Floor, Brooklyn, New York 11021 owned 12% of such Portfolio's total
outstanding shares; Desantis Capital Management A/C Desantis Capital Partners,
One Busch Street, Suite 1800, San Francisco, California 94104, owned 23% of
such Portfolio's total outstanding shares; Zweig-Dimenna Special Opportunities,
L.P., Attn: Sheung Tam, One Pierrepont Plaza, 10th FLoor, Brooklyn, New York
11201, owned 7% of such Portfolio's total outstanding shares; and Boston Safe
Deposit & Trust Company As Trustee for the Kodak Retirement Income Plan c/o
Wyser-Pratte & Co., Inc., 63 Wall Street, 24th Floor, New York, New York 10005,
owned 6% of such Portfolio's total outstanding shares.

As of October 11, 1995, the directors and officers of the Fund owned,
beneficially or of record, an aggregate of less than 1% of the Fund's
outstanding shares of either Portfolio on such date.

LITIGATION. There is currently no material litigation affecting the Fund.

BANKING LAWS. Banking laws and regulations currently prohibit a bank
holding company registered under the Federal Bank Holding Company Act of 1956
or any bank or non-bank affiliate thereof from sponsoring, organizing,
controlling or distributing the shares of a registered, open-end investment
company continuously engaged in the issuance of its shares, and prohibit banks
generally from issuing, underwriting, selling or distributing securities, but
such banking laws and regulations do not prohibit such a holding company or
affiliate or banks generally from acting as investment advisor, transfer agent
or custodian to such an investment company, or from purchasing shares of such
a company as agent for and upon the order of such a customer. PNC Bank and
PFPC are subject to such banking laws and regulations.

FINANCIAL STATEMENTS

SEE NEXT PAGE.

27
<PAGE>

PCS CASH FUND, INC.

<TABLE>
<CAPTION>
MONEY MARKET PORTFOLIO
STATEMENT OF NET ASSETS

JUNE 30, 1995

FACE
AMOUNT
(000) VALUE
----------- ------------
<S> <C> <C>
AGENCY OBLIGATIONS (38.0%)

Federal Home Loan Mortgage Corporation Discount Notes
5.87%, 07/05/95 ................................... $ 9,104 $ 9,098,062
5.88%, 07/14/95 ................................... 5,000 4,989,383
5.85%, 07/21/95 ................................... 10,000 9,967,500
5.91%, 07/24/95 ................................... 5,000 4,981,121
Federal National Mortgage Association Discount Notes
5.87%, 07/05/95 ................................... 6,140 6,135,995
5.86%, 07/06/95 ................................... 5,000 4,995,931
5.87%, 07/07/95 ................................... 5,305 5,299,810
5.91%, 08/04/95 ................................... 5,000 4,972,092
5.70%, 09/07/95 ................................... 5,000 4,946,167
5.81%, 09/08/95 ................................... 5,000 4,944,321
5.88%, 11/14/95 ................................... 5,000 4,888,933
-----------
TOTAL AGENCY OBLIGATIONS (COST $65,219,315) ............ 65,219,315
-----------
COMMERCIAL PAPER (8.7%)
FINANCIAL (5.8%)
ABN - AMRO Bank , 5.86%, 10/16/95 ................. 5,000 4,912,914
UBS Financial Inc. , 6.13%, 07/05/95 .............. 5,000 4,996,597
-----------
TOTAL FINANCIAL ................................... 9,909,511
-----------
OIL & GAS (2.9%)
Koch Industries, Inc. , 6.20%, 07/05/95 ........... 5,000 4,996,555
-----------
TOTAL COMMERCIAL PAPER (COST $14,906,066) .............. 14,906,066
-----------
U.S. TREASURY OBLIGATIONS (2.9%)
U.S. TREASURY BILL
6.28%, 10/19/95 ................................... 5,000 4,904,056
-----------
TOTAL U.S. TREASURY OBLIGATIONS (COST $4,904,056) ...... 4,904,056
-----------
</TABLE>
See accompanying notes to financial statements

FS-1
<PAGE>

PCS CASH FUND, INC.

<TABLE>
<CAPTION>
MONEY MARKET PORTFOLIO
STATEMENT OF NET ASSETS (CONTINUED)

JUNE 30, 1995

FACE
AMOUNT
(000) VALUE
----------- ------------
<S> <C> <C>
VARIABLE RATE OBLIGATIONS (29.7%)
Federal National Mortgage Association Floating Rate Notes
5.97%, 07/03/95** ..................................... $ 5,000 $ 4,999,708
5.58%, 07/05/95** ..................................... 5,000 5,000,000
5.58%, 07/05/95** ..................................... 6,000 6,000,000
6.02%, 07/07/95** ..................................... 15,000 15,000,000
General Electric Capital Corporation Floating Rate Note
6.35%, 07/03/95** ..................................... 5,000 5,000,000
Student Loan Marketing Association Floating Rate Note
5.86%, 07/05/95** ..................................... 15,000 15,014,549
-----------
TOTAL VARIABLE RATE OBLIGATIONS (COST $51,014,257) ......... 51,014,257
-----------
REPURCHASE AGREEMENT (20.6%)
Goldman Sachs & Co. 6.05%, 07/02/95, (Agreement
dated 06/30/95, to be repurchased at $35,397,837
collateralized by $24,640,000, U.S. Treasury Bonds
10.625%, due 08/15/15. The total market value
and accrued interest of the collateral is $37,100,710)
(cost $35,380,000) .................................... 35,380 35,380,000
------------
TOTAL INVESTMENTS (COST $171,423,694*) .............. 99.9% 171,423,694
OTHER ASSETS ........................................ 0.3% 484,534
LIABILITIES ......................................... (0.2%) (393,661)
----- ------------
NET ASSETS (BASED ON 171,526,234 SHARES, HAVING A PAR
VALUE OF $.001 PER SHARE) ........................ 100.0% $171,514,567
===== ============
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER
SHARE ($171,514,567 / 171,526,234 SHARES
OUTSTANDING) ..................................... $1.00
=====

- ----------------
<FN>
* Also cost for Federal income tax purposes.

** Variable Rate Obligations -- the interest rate shown is the rate as of June
30, 1995 and the maturity date is the shorter of the next interest readjustment
date or the date the principal amount can be recovered through demand.
</FN>
</TABLE>

See accompanying notes to financial statements.

FS-2
<PAGE>

PCS CASH FUND, INC.

<TABLE>
<CAPTION>
GOVERNMENT OBLIGATIONS MONEY MARKET PORTFOLIO
STATEMENT OF NET ASSETS

JUNE 30, 1995

FACE
AMOUNT
(000) VALUE
----------- ------------
<S> <C> <C>
AGENCY OBLIGATIONS (36.8%)

Federal Home Loan Mortgage Corporation Discount Note
5.88%, 07/14/95 ....................................... $ 5,000 $ 4,989,383
Federal National Mortgage Association Discount Notes
5.86%, 07/06/95 ....................................... 10,000 9,991,861
5.70%, 09/07/95 ....................................... 5,000 4,946,167
5.81%, 09/08/95 ....................................... 5,000 4,944,321
-----------
TOTAL AGENCY OBLIGATIONS (COST $24,871,732) ................ 24,871,732
-----------
U.S. TREASURY OBLIGATIONS (21.8%)
U.S. TREASURY BILL
6.28%, 10/19/95 ....................................... 15,000 14,712,167
-----------
TOTAL U.S. TREASURY OBLIGATIONS (COST $14,712,167) ......... 14,712,167
-----------
VARIABLE RATE OBLIGATIONS (23.7%)
Federal National Mortgage Association Floating Rate Notes
5.97%, 07/03/95** ..................................... 5,000 4,999,708
5.58%, 07/05/95** ..................................... 5,000 5,000,000
5.58%, 07/05/95** ..................................... 6,000 6,000,000
-----------
TOTAL VARIABLE RATE OBLIGATIONS (COST $15,999,708) ......... 15,999,708
-----------
REPURCHASE AGREEMENT (17.7%)
Goldman Sachs & Co. 6.05%, 07/02/95, (Agreement dated
06/30/95, to be repurchased at $11,936,015 collateralized
by $8,310,000, U.S. Treasury Bonds 10.625%, due 08/15/15.
The total market value and accrued interest of the
collateral is $12,512,455)
(cost $11,930,000) ....................................... 11,930 11,930,000
-----------
</TABLE>
See accompanying notes to financial statements

FS-3
<PAGE>

PCS CASH FUND, INC.

<TABLE>
<CAPTION>
GOVERNMENT OBLIGATIONS MONEY MARKET PORTFOLIO
STATEMENT OF NET ASSETS (CONTINUED)

JUNE 30, 1995

VALUE
------------
<S> <C> <C>
TOTAL INVESTMENTS (COST $67,513,607*) ............... 100.0% $67,513,607
OTHER ASSETS ........................................ 0.3% 202,430
LIABILITIES ......................................... (0.3%) (211,479)
===== ===========
NET ASSETS (BASED ON 67,492,623 SHARES, HAVING A PAR
VALUE OF $.001 PER SHARE) ...................... 100.0% $67,504,558
===== ===========
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER
SHARE ($67,504,558 / 67,492,623 SHARES ......... $1.00
=====

- ---------------
<FN>
* Also cost for Federal income tax purposes.

** Variable Rate Obligations -- the interest rate shown is the rate as of June
30, 1995 and the maturity date is the shorter of the next interest
readjustment date or the date the principal amount can be recovered through
demand.
</FN>
</TABLE>

See accompanying notes to financial statements.

FS-4
<PAGE>

PCS CASH FUND, INC.

<TABLE>
<CAPTION>
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED JUNE 30, 1995

GOVERNMENT OBLIGATIONS
MONEY MARKET MONEY MARKET
PORTFOLIO PORTFOLIO
-------------- ----------------
<S> <C> <C>
INVESTMENT INCOME
Interest ......................................................................... $ 8,439,619 $ 11,276,200
----------- ------------
EXPENSES
Distribution fees (Note 2) ....................................................... 776,511 1,013,063
Investment advisory fees (Note 2) ................................................ 698,859 897,867
Administration fees (Note 2) ..................................................... 155,302 191,527
Transfer agent fees (Note 2) ..................................................... 41,708 11,331
Custodian fees (Note 2) .......................................................... 36,275 45,350
Registration fees ................................................................ 34,094 29,291
Directors' fees .................................................................. 27,250 27,250
Insurance expense ................................................................ 20,262 13,509
Audit fees ....................................................................... 19,500 19,500
Legal fees ....................................................................... 13,250 13,250
Printing fees .................................................................... 10,000 10,000
Miscellaneous expense ............................................................ 6,750 4,750
----------- ------------
1,839,761 2,276,688
LESS FEES VOLUNTARILY WAIVED (NOTE 2) ............................................... (317,800) (351,869)
----------- ------------
Total Expenses ................................................................... 1,521,961 1,924,819
----------- ------------
NET INVESTMENT INCOME ............................................................... 6,917,658 9,351,381
NET REALIZED GAIN (LOSS) ON INVESTMENTS ............................................. (11,667) 11,936
----------- ------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ................................ $ 6,905,991 $ 9,363,317
=========== ============
</TABLE>

See accompanying notes to financial statements

FS-5
<PAGE>

PCS CASH FUND, INC.

<TABLE>
<CAPTION>
MONEY MARKET PORTFOLIO
STATEMENTS OF CHANGES IN NET ASSETS

FOR THE YEAR FOR THE YEAR
ENDED ENDED
JUNE 30, 1995 JUNE 30, 1994
--------------- ---------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income ........................................................ $ 6,917,658 $ 4,332,323
Net realized gain (loss) on investments ...................................... (11,667) 7,945
------------- -------------
Net increase in net assets resulting from operations ......................... 6,905,991 4,340,268
------------- -------------
Dividends to shareholders from:
Net investment income ($.0446 and $.0246 per share, respectively) ............ (6,917,658) (4,332,323)
Net realized gains ($.0001 and $.0000 per share, respectively) ............... (7,700) --
------------- -------------
Total dividends to shareholders ................................................. (6,925,358) (4,332,323)
------------- -------------
Increase (decrease) in net assets derived
from capital share transactions (Note 3) ...................................... (5,064,947) 20,280,942
------------- -------------
Total increase (decrease) in net assets ......................................... (5,084,314) 20,288,887
NET ASSETS:
Beginning of year ............................................................... 176,598,881 156,309,994
------------- -------------
End of year ..................................................................... $ 171,514,567 $ 176,598,881
============= =============
</TABLE>

See accompanying notes to financial statements

FS-6
<PAGE>

PCS CASH FUND, INC.

<TABLE>
<CAPTION>
GOVERNMENT OBLIGATIONS MONEY MARKET PORTFOLIO
STATEMENTS OF CHANGES IN NET ASSETS

FOR THE YEAR FOR THE YEAR
ENDED ENDED
JUNE 30, 1995 JUNE 30, 1994
--------------- ---------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income ................................................................. $ 9,351,381 $ 2,341,763
Net realized gain on investments ...................................................... 11,936 112,478
------------- -------------
Net increase in net assets resulting from operations .................................. 9,363,317 2,454,241
------------- -------------
Dividends to shareholders from:
Net investment income ($.0448 and $.0243 per share, respectively) (9,351,381) (2,341,763)
Net realized gains ($.0000 and $.0011 per share, respectively) ........................ (572) (108,656)
------------- -------------
Total dividends to shareholders .......................................................... (9,351,953) (2,450,419)
------------- -------------
Increase (decrease) in net assets derived
from capital share transactions (Note 3) ............................................... (35,057,979) 811,251
------------- -------------
Total increase (decrease) in net assets .................................................. (35,046,615) 815,073

NET ASSETS:
Beginning of year ........................................................................ 102,551,173 101,736,100
------------- -------------
End of year .............................................................................. $ 67,504,558 $ 102,551,173
============= =============
</TABLE>
See accompanying notes to financial statements

FS-7
<PAGE>

PCS CASH FUND, INC.

<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGH EACH PERIOD)

MONEY MARKET PORTFOLIO

FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR
ENDED ENDED ENDED ENDED ENDED
JUNE 30, 1995 JUNE 30, 1994 JUNE 30, 1993 JUNE 30, 1992 JUNE 30, 1991
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD ..... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
---------- ---------- ---------- ---------- ----------
Income from investment operations:
Net investment income ................. 0.0446 0.0246 0.0243 0.0402 0.0652
Net realized gains on investments ..... 0.0001 -- 0.0001 -- --
Less dividends to shareholders from:
Net investment income ................. (0.0446) (0.0246) (0.0243) (0.0402) (0.0652)
Net realized gains .................... (0.0001) -- (0.0001) -- --
---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF PERIOD ........... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========== ========== ========== ========== ==========
Total return ............................. 4.55% 2.49% 2.47% 4.11% 6.72%
Ratios of expenses to average net assets . 0.98%(b) 0.98%(b) 0.98%(b) 0.98%(b) 0.98%(b)
Ratios of net investment income to average
net assets ............................ 4.45%(b) 2.45%(b) 2.44%(b) 3.97%(b) 6.40%(b)
Net assets at end of period (000) ........ $ 171,515 $ 176,599 $ 156,310 $ 190,034 $ 140,594

</TABLE>

<TABLE>
<CAPTION>
GOVERNMENT OBLIGATIONS MONEY MARKET PORTFOLIO

FOR THE PERIOD
MARCH 12,1992
FOR THE YEAR FOR THE YEAR FOR THE YEAR (COMMENCEMENT
ENDED ENDED ENDED OF OPERATIONS)
JUNE 30, 1995 JUNE 30, 1994 JUNE 30,1993 TO JUNE 30, 1992
------------- ------------- ------------ -----------------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD ............... $ 1.00 $ 1.00 $ 1.00 $ 1.00
---------- ---------- ---------- ----------
Income from investment operations:
Net investment income ........................... 0.0448 0.0243 0.0246 0.0094
Net realized gains on investments ............... -- 0.0011 0.0002 --
Less dividends to shareholders from:
Net investment income ........................... (0.0448) (0.0243) (0.0246) (0.0094)
Net realized gains .............................. -- (0.0011) (0.0002) --
--------- ---------- ---------- ----------
Net asset value, end of period ..................... $ 1.00 $ 1.00 $ 1.00 $ 1.00
========= ========== ========== ==========
Total return ....................................... 4.58% 2.45% 2.51% 0.94%(c)
Ratio of expenses to average net assets ............ 0.95%(b) 0.95%(b) 0.95%(b) 0.95%(a)(b)
Ratio of net investment income to average net assets 4.61%(b) 2.40%(b) 2.50%(b) 3.07%(a)(b)
Net assets at end of period (000) .................. $ 67,505 $ 102,551 $ 101,736 $ 269,627

- ---------------
<FN>
(a) Annualized.

(b) Without the voluntary waiver of advisory and distribution fees, the ratios
of expenses to average net assets would have been 1.18%, 1.19%, 1.20%, 1.27%
and 1.27% annualized, for the Money Market Portfolio and 1.12%, 1.22%, 1.19%
and 1.29% annualized for the Government Obligations Money Market Portfolio.
The ratios of net investment income to average net assets would have been
4.25%, 2.24%, 2.22%, 3.68% and 6.11% annualized, for the Money Market
Portfolio and 4.44%, 2.13%, 2.26% and 2.73% annualized for the Government
Obligations Money Market Portfolio.

(c) Not annualized. Total return, if on annualized basis, would have been 3.16%
for the Government Obligations Money Market Portfolio.
</FN>
</TABLE>

See accompanying notes to financial statements.

FS-8
<PAGE>

PCS CASH FUND, INC.

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1995

NOTE 1-- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PCS Cash Fund, Inc. (the "Fund"), an open-end, diversified management
investment company, was incorporated in Maryland on January 5, 1989, and is
registered with the Securities and Exchange Commission under the Investment
Company Act of 1940.

The Fund is authorized to issue 10 billion shares, $.001 par value per
share, of which 1 billion are classified in each of the following three
portfolios: PCS Money Market Portfolio, PCS Tax-Free Money Market Portfolio, and
PCS Government Obligations Money Market Portfolio. There are currently no shares
outstanding in the Tax-Free Money Market Portfolio.

A) SECURITY VALUATION--Portfolio securities are valued under the
amortized cost method, which approximates current market value. Under this
method, securities are valued at cost when purchased and, thereafter, a
constant proportionate amortization of any discount or premium is recorded
until maturity of the security. Regular review and monitoring of the
valuation is performed in an attempt to avoid dilution or other unfair
results to shareholders. The Fund seeks to maintain net asset value per
share at $1.00. INVESTMENT IN SHARES OF THE FUND IS NEITHER INSURED NOR
GUARANTEED BY THE U.S. GOVERNMENT. THERE IS NO ASSURANCE THAT THE FUND WILL
MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE.

B) SECURITY TRANSACTIONS AND INVESTMENT INCOME--Security transactions
are accounted for on the trade date. The cost of investments sold is
determined by use of the specific identification method for both financial
reporting and income tax purposes. Interest income is recorded on the
accrual basis.

C) DIVIDENDS TO SHAREHOLDERS--Dividends from net investment income are
declared daily and paid monthly. Any net realized capital gains will be
distributed at least annually.

D) FEDERAL INCOME TAXES--The Fund intends to continue to qualify for
the tax treatment applicable to regulated investment companies under the
Internal Revenue Code and make the requisite distributions to its
shareholders which will be sufficient to relieve it from Federal income and
Federal excise taxes. Therefore, no provision has been recorded for Federal
income or Federal excise taxes.

E) REPURCHASE AGREEMENTS--The Fund may purchase money market
instruments from financial institutions, such as banks and non-bank
dealers, subject to the seller's agreement to repurchase them at an agreed
upon date and price (repurchase agreements). Collateral for repurchase
agreements may have longer maturities than the maximum permissible
remaining maturity of portfolio investments. The seller will be required on
a daily basis to maintain the value of the securities subject to the
agreement at not less than the repurchase price, marked-to-market daily.
The agreements are conditioned upon the collateral being deposited under
the Federal Reserve book-entry system or with the Fund's custodian or a
third party sub-custodian.

FS-9
<PAGE>

PCS CASH FUND, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
JUNE 30, 1995 NOTE

2--TRANSACTIONS WITH AFFILIATES AND OTHERS

The Fund has entered into an investment advisory agreement with Morgan
Stanley Asset Management Inc. (the "Advisor"), a wholly owned subsidiary of
Morgan Stanley Group Inc. The Fund has also entered into an Administration and
Accounting Services Agreement with PFPC Inc., a wholly owned subsidiary of PNC
Bank Corp., and a distribution agreement with Morgan Stanley & Co. Inc. PNC Bank
Corp. serves as custodian for each of the Fund's portfolios. PFPC Inc. also
serves as the Fund's transfer agent.

For the advisory services provided and expenses assumed by it, the Advisor
is entitled to receive from each Portfolio a fee, computed daily and payable
monthly, at an annual rate of .45% of the first $250 million of the Portfolio's
daily net assets, .40% of the next $250 million of the Portfolio's daily net
assets and .35% of the Portfolio's daily net assets in excess of $500 million.
The Advisor may, at its discretion from time to time, waive voluntarily all or
any portion of its advisory fee or reimburse the Portfolio for a portion of the
expenses of its operations. For the year ended June 30, 1995, advisory fees,
(net of voluntary fee waivers), for the Money Market Portfolio were $611,754 and
$897,867 for the Government Obligations Money Market Portfolio.

As required by various state regulations in which the Fund is registered to
sell shares, the Advisor will reimburse each Portfolio if and to the extent that
the aggregate operating expenses of the Portfolio exceed applicable state limits
for the fiscal year. Currently, the most restrictive of such applicable limits
is 2.5% of the first $30 million of average annual net assets, 2.0% of the next
$70 million of average annual net assets, and 1.5% of the remaining average
annual net assets. Certain expenses such as brokerage commissions, taxes,
interest, and extraordinary items are excluded from this limitation. No such
reimbursements were required for the year ended June 30, 1995.

For administration services provided, PFPC Inc. is entitled to receive from
each Portfolio a fee, computed daily and payable monthly, at an annual rate of
.10% of the first $200 million daily net assets, .075% of the next $200 million
of daily net assets, .05% of the next $200 million of daily net assets and .03%
of the daily assets in excess of $600 million.

The Fund has adopted a Plan of Distribution and pursuant thereto has
entered into an agreement under which the distributor, Morgan Stanley & Co.
Inc., (the "Distributor") is entitled to receive from each Portfolio
compensation of its distribution costs at an annual rate of up to .50% of daily
net assets. The Distributor may at its discretion from time to time, waive
voluntarily all or any portion of its distribution fee. For the year ended June
30, 1995, distribution fees, net of voluntary fee waivers, were $545,816 for the
Money Market Portfolio and $661,194 for the Government Obligations Money Market
Portfolio.

FS-10
<PAGE>

PCS CASH FUND, INC.
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
JUNE 30, 1995

NOTE 3 -- CAPITAL STOCK

Transactions in capital stock for each Portfolio were as follows:

<TABLE>
<CAPTION>
MONEY MARKET PORTFOLIO

For the Year For the Year
Ended Ended
June 30, 1995 June 30, 1994
----------------------------------- -----------------------------------
Shares Value Shares Value
------ ----- ------ -----
<S> <C> <C> <C> <C>
Shares sold ................................ 1,261,410,987 $ 1,261,410,987 1,735,883,817 $ 1,735,883,817
Shares issued in reinvestment of dividends . 6,579,514 6,579,514 4,016,368 4,016,368
Shares redeemed ............................ (1,273,055,448) (1,273,055,448) (1,719,619,243) (1,719,619,243)
--------------- --------------- --------------- ---------------
Net increase (decrease) .................... (5,064,947) $ (5,064,947) 20,280,942 $ 20,280,942
=============== =============== =============== ===============
</TABLE>

<TABLE>
<CAPTION>
GOVERNMENT OBLIGATIONS MONEY MARKET PORTFOLIO

For the Year For the Year
Ended Ended
June 30, 1995 June 30, 1994
---------------------------------- ----------------------------------
Shares Value Shares Value
------ ----- ------ -----
<S> <C> <C> <C> <C>
Shares sold ................................ 2,017,389,099 $ 2,017,389,099 1,209,126,057 $ 1,209,126,057
Shares issued in reinvestment of dividends . 9,053,037 9,053,037 2,244,969 2,244,969
Shares redeemed ............................ (2,061,500,115) (2,061,500,115) (1,210,559,775) (1,210,559,775)
--------------- --------------- --------------- ---------------
Net increase (decrease) .................... (35,057,979) $ (35,057,979) 811,251 $ 811,251
=============== =============== =============== ===============
</TABLE>

NOTE 4 -- NET ASSETS

At June 30, 1995, net assets consisted of the following:

<TABLE>
<CAPTION>
Money Market Government Obligations
Portfolio Money Market Portfolio
------------------ ------------------------
<S> <C> <C>
Capital Paid-in............................................ $171,526,234 $67,492,622
Accumulated Net Realized Gain (Loss) on Investments........ (11,667) 11,936
------------ -----------
$171,514,567 $67,504,558
============ ===========
</TABLE>

FS-11
<PAGE>

REPORT OF INDEPENDENT ACCOUNTANTS

To the Shareholders and Board of Directors
of The PCS Cash Fund, Inc.:

We have audited the accompanying statements of net assets of the PCS Cash Fund,
Inc. (Money Market and Government Obligations Money Market Portfolios), as of
June 30, 1995 and the related statements of operations for the year then ended,
the statements of changes in net assets for each of the periods in the two years
then ended, and the financial highlights for each of the periods presented.
These financial statements and financial highlights are the responsiblity of the
Fund's management. Our responsiblity is to express an opinion on these financial
statements and financial highlights based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of investments held by the
custodian as of June 30, 1995. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
PCS Cash Fund, Inc. (Money Market and Government Obligations Money Market
Portfolios) as of June 30, 1995 and the results of their operations for the year
then ended, the changes in their net assets for each of the periods in the two
years then ended and the financial highlights for each of the periods presented,
in conformity with generally accepted accounting principles.

Coopers & Lybrand L.L.P.

2400 Eleven Penn Center
Philadelphia, Pennsylvania
July 28, 1995

FS-12

<PAGE>

APPENDIX

Investments in portfolio securities may be precluded unless a particular
instrument is an "Eligible Security" as defined in Rule 2a-7 under the 1940
Act. (See "Valuation of Shares.") Rule 2a-7 defines "Eligible Security" as
follows:

(i) a security with a remaining maturity of 397 days or less that is rated
(or that has been issued by an issuer that is rated with respect to a class of
Short-term debt obligations, or any security within that class, that is
comparable in priority and security with the security) by the Requisite
NRSROs (1) in one of the two highest rating categories for Short-term debt
obligations (within which there may be sub-categories or gradations indicating
relative standing); or

(ii) a security:

(A) that at the time of issuance was a Long-term security but that has a
remaining maturity of 397 calendar days or less, and

(B) whose issuer has received from the Requisite NRSROs a rating, with
respect to a class of Short-term debt obligations (or any security within that
class) that is now comparable in priority and security with the security, in
one of the two highest rating categories for Short-term debt obligations
(within which there may be sub-categories or gradations indicating relative
standing); or

(iii) an Unrated Security that is of comparable quality to a security
meeting the requirements of paragraphs (i) or (ii) above, as determined by the
money market fund's board of directors; provided, however, that:

(A) the board of directors may base its determination that a Standby
Commitment is an Eligible Security upon a finding that the issuer of the
commitment presents a minimal risk of default; and

(B) a security that at the time of issuance was a Long-term security but
that has a remaining maturity of 397 calendar days or less and that is an
Unrated Security (2) is not an Eligible Security if the security has a
Long-term rating from any NRSRO that is not within the NRSRO's two highest
categories (within which there may be sub-categories or gradations
indicating relative standing).

_______________
(1) "Requisite NRSRO" shall mean (a) any two nationally recognized statistical
rating organizations that have issued a rating with respect to a security or
class of debt obligations of an issuer, or (b) if only one NRSRO has issued a
rating with respect to such security or issuer at security, that NRSRO. At
present the NRSROs are: Standard & Poor's Corp., Moody's Investors Service,
Inc., Duff and Phelps, Inc., Fitch Investors Services, Inc. and, with respect
to certain types of securities, IBCA Limited and its affiliates, IBCA Inc.
Subcategories or gradations in ratings (such as a "+" or "-") do not count as
rating categories.

(2) An "Unrated Security" is a security (i) issued by an issuer that does not
have a current short-term rating from any NRSRO, either as to the particular
security or as to any other short-term obligations of comparable priority and
security; (ii) that was a long-term security at the time of issuance and whose
issuer has not received from any NRSRO a rating with respect to a class of
short-term debt obligations now comparable in priority and security; or (iii)
a security that is rated but which is the subject of an external credit
support agreement not in effect when the security was assigned its rating,
provided that a security is not an unrated security if any short-term debt
obligation issued by the issuer and comparable in priority and security is
rated by any NRSRO.

A-1

<PAGE>

DESCRIPTION OF BOND RATINGS

The following summarizes the highest two ratings used by Standard & Poor's
Corporation for bonds:

AAA-Debt rated AAA has the highest rating assigned by Standard & Poor's.
Capacity to pay interest and repay principal is extremely strong.

AA-Debt rated AA has a very strong capacity to pay interest and repay
principal and differs from AAA issues only in small degree. The "AA" rating
may be modified by the addition of a plus or minus sign to show relative
standing within the AA rating category.

The following summarizes the highest two ratings used by Moody's Investors
Service, Inc. for bonds:

Aaa-Bonds that are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt edged." Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements
are likely to change, such changes as can be visualized are most unlikely to
impair the fundamentally strong position of such issues.

Aa-Bonds that are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known
as high-grade bonds. They are rated lower than the best bonds because margins
of protection may not be as large as in Aaa securities or fluctuation of
protective elements may be of greater amplitude or there may be other elements
present which make the long-term risks appear somewhat larger than in Aaa
securities. Moody's applies numerical modifiers (1, 2 and 3) with respect to
bonds rated Aa. The modifier 1 indicates that the bond being rated ranks in
the higher end of its generic rating category; the modifier 2 indicates a
mid-range ranking; and the modifier 3 indicates that the bond ranks in the
lower end of its generic rating category.

The rating SP-1 is the highest rating assigned by Standard & Poor's to
municipal notes and indicates very strong or strong capacity to pay principal
and interest. Those issues determined to possess overwhelming safety
characteristics are given a plus designation.

The following summarizes the two highest ratings used by Moody's for
short-term notes and variable rate demand obligations:

MIG-1/VMIG-1. Obligations bearing these designations are of the best
quality, enjoying strong protection by established cash flows, superior
liquidity support or demonstrated broad-based access to the market for
refinancing.

MIG-2/VMIG-2. Obligations bearing these designations are of high quality
with margins of protection ample although not as large as in the preceding
group.

DESCRIPTION OF COMMERCIAL PAPER RATINGS

Commercial paper rated A-1 by Standard & Poor's indicates that the degree of
safety regarding timely payment is strong. Those issues determined to possess
overwhelming safety characteristics are denoted in A-1+. Capacity for timely
payment on commercial paper rated A-2 is satisfactory, but the relative degree
of safety is not as high as for issues designated A-1.

A-2
<PAGE>

The rating Prime-1 is the highest commercial paper rating assigned by
Moody's. Issuers rated Prime-1 (or related supporting institutions) are
considered to have a superior capacity for repayment of short-term promissory
obligations. Issuers rated Prime-2 (or related supporting institutions) are
considered to have strong capacity for repayment of short-term promissory
obligations. This will normally be evidenced by many of the characteristics
of issuers rated Prime-1 but to a lesser degree. Earnings trends and coverage
ratios, while sound, will be more subject to variation. Capitalization
characteristics, while still appropriate, may be more affected by external
conditions. Ample alternate liquidity is maintained.

A-3

<PAGE>
PART C
PCS CASH FUND, INC.
OTHER INFORMATION

Item 24. Financial Statements and Exhibits

List all financial statements and exhibits filed as part of the
Registration Statement.

a) Financial Statements:
(1) Included in Parts A and B of the Registration Statement:

- Statements of Net Assets for the PCS Money Market Portfolio and the PCS
Government Obligations Money Market Portfolio as of June 30, 1995.

- Statements of Operations for the PCS Money Market Portfolio and for the
PCS Government Obligations Money Market Portfolio for the fiscal year
ended June 30, 1995.

- Statements of Changes in Net Assets for the PCS Money Market Portfolio
and the PCS Government Obligations Money Market Portfolio for the fiscal
years ended June 30, 1995 and June 30, 1994.

- Financial Highlights for the PCS Money Market Portfolio for the fiscal
years ended June 30, 1995, June 30, 1994, June 30, 1993, June 30, 1992
and June 30, 1991 and for the period from August 4, 1989 (commencement of
operations) to June 30, 1990; Financial Highlights for the PCS Government
Obligations Money Market Portfolio for the fiscal years ended June 30,
1995, June 30, 1994 and June 30, 1993 and for the period March 12, 1992
(commencement of operations) to June 30, 1992.

- Notes to the Financial Statements.

- Report of Independent Accountants

(2) All required financial statements relating to registrant are
included in Parts A and B hereof. All other financial statements and
schedules are inapplicable.

b) Exhibits

(1) (1) (a) Articles of Incorporation of Registrant.

<PAGE>

(1) (b) Articles of Amendment to Articles of Incorporation of
Registrant.

(1) (2) By-Laws of Registrant.

(3) None.

(2) (4) (a) PCS Money Market Portfolio Specimen Security.

(b) PCS Tax-Free Money Market Portfolio Specimen Security.

(1) (5) (a) Investment Advisory Agreement (PCS Money Market Portfolio)
between Registrant and Morgan Stanley Asset Management Inc.

(b) Investment Advisory Agreement (PCS Tax-Free Money Market
Portfolio) between Registrant and Morgan Stanley Asset
Management Inc.

(c) Investment Advisory Agreement (PCS Government Obligations
Money Market Portfolio) between Registrant and Morgan Stanley
Asset Management Inc.

(1) (6) (a) Distribution Agreement (PCS Money Market Portfolio) dated July
3, 1989 between Registrant and Morgan Stanley & Co.
Incorporated.

(b) Distribution Agreement (PCS Tax-Free Money Market Portfolio)
dated July 3, 1989 between Registrant and Morgan Stanley & Co.
Incorporated.

(c) Distribution Agreement (PCS Government Obligations Money
Market Portfolio) dated July 3, 1989 between Registrant and
Morgan Stanley & Co. Incorporated.

(1) (d) Form of Dealer Agreement.

(7) None.

(1) (8) Custodian Agreement dated July 3, 1989 between Registrant
and PNC Bank.

(1) (9) (a) Transfer Agency Agreement.

(b) Administration Agreement.
(1) (10) Opinion of Counsel.
(1) (11) Consent of Independent Accountants.
(12) None.
(1) (13) Form of Purchase Agreement.
(14) None.

2
<PAGE>

(1) (15) (a) Plan of Distribution (PCS Money Market Portfolio).

(b) Plan of Distribution (PCS Tax-Free Money Market Portfolio).

(1) (16) Schedule of Computation of Performance Quotations.

(1) (24) Powers of Attorney.

(1) (27) Financial Data Schedules.

Item 25. Persons Controlled by or under Common Control with Registrant.

Furnish a list or diagram of all persons directly or indirectly controlled by
or under common control with the Registrant and as to each such person
indicate (1) if a company, the state or other sovereign power under the
laws of which it is organized, and (2) the percentage of voting securities
owned or other basis of control by the person, if any, immediately controlling
it.

None.

Item 26. Number of Holders of Securities.

State in substantially the tabular form indicated, as of a specified date
within 90 days prior to the date of filing, the number of record holders of
each class of securities of the Registrant.

The following information is given as of September 30, 1995:

_________________

(1) Filed herewith.

(2) Incorporated herein by Reference to Pre-Effective Amendment No. 2 to
Registrant's Registration Statement on Form N-1A (No. 33-26417) filed with the
SEC on July 5, 1989.

3
<PAGE>

Number of
Title of Class Record Holders

PCS Money Market Portfolio 3164

PCS Government Obligations
Money Market Portfolio 305

PCS Tax-Free Money Market
Portfolio 0

Item 27. Indemnification

State the general effect of any contract, arrangements or statute under
which any director, officer, underwriter or affiliated person of the
Registrant is insured or indemnified in any manner against any liability which
may be incurred in such capacity, other than insurance provided by any
director, officer, affiliated person or underwriter for their own protection.

Sections 1, 2, 3, and 4 of Article VIII of Registrant's Articles of
Incorporation, as amended, incorporated herein by reference as Exhibits 1(a)
and 1(b), provides as follows;

Section 1. To the fullest extent that limitations on the liability of
directors and officers are permitted by the Maryland General Corporation Law,
no director or officer of the Corporation shall have any liability to the
Corporation or its shareholders for damages. This limitation on liability
applies to events occurring at the time a person serves as a director or
officer of the Corporation whether or not such person is a director or officer
at the time of any proceeding in which liability is asserted.

Section 2. The Corporation shall indemnify and advance expenses to its
currently acting and its former directors to the fullest extent that
indemnification of directors is permitted by the Maryland General Corporation
Law. The Corporation shall indemnify and advance expenses to its officers to
the same extent as its directors and to such further extent as is consistent
with law. The Board of Directors may by By-Law, resolution or agreement make
further provision for indemnification of directors, officers, employees and
agents to the fullest extent permitted by the Maryland General Corporation
Law.

Section 3. No provision of this Article shall be effective to protect or
purport to protect any director or officer of the Corporation against any
liability to the Corporation or its security holders to which he would
otherwise by subject by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of his
office.

Section 4. References to the Maryland General Corporation Law in this Article
are to the law as from time to time amended. No further amendment to the
Articles of Incorporation of the Corporation shall decrease, but may expand,
any right of any person under this Article based on any event, omission or
proceeding prior to such amendment.

Insofar as indemnification for liability arising under the Securities Act
of 1933 may be permitted to Directors, officers and controlling persons of the
registrant, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a

4
<PAGE>

director, officer or controlling person of the registrant in the successful
defense of any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the
final adjudication of such issue.

Item 28. Business and Other Connections of Investment Adviser.

Reference is made to the caption "Management of the Fund--Investment
Adviser" in the Prospectus constituting Part A of this Registration Statement
and "Management of the Fund" in Part B of this Registration Statement.

Listed below are the officers and Directors of Morgan Stanley Asset Management
Inc. ("MSAM"). The information as to any other business, profession,
vocation, or employment of substantial nature engaged in by the Chairman,
President and Directors during the past two fiscal years, is incorporated by
reference to Schedules A and D of Form ADV filed by MSAM pursuant to the
Advisers Act (SEC File No. 801-15757).

Barton M. Biggs, Chairman and Director
Peter A. Nadosy, President, Director and Managing Director
James M. Allwin, Chief Operating Officer and Managing Director
F. Dominic Caldecott, Managing Director (MSAM) - UK
A. Macdonald Caputo, Managing Director
Ean Wah Chin, Managing Director (MSAM) and Vice President - Singapore
Garry B. Crowder, Managing Director and Vice President
Michael A. Crowe, Managing Director and Vice President
Madhav Dhar, Vice President and Managing Director
Kurt A. Feuerman, Managing Director
Gordon S. Gray, Vice President, Managing Director and Director
Gary D. Latainer, Managing Director
Dennis G. Sherva, Vice President, Managing Director and Director
Richard G. Woolworth, Jr., Vice President and Managing Director
Richard B. Fisher, Director
Donald H. McAllister, Director
Robert E. Angevine, Vice President and Principal
Gerald P. Barth, Vice President and Principal
Josephine M. Glass, Vice President
Richard S. Brody, Vice President
Terence P. Carmichael, Vice President and Principal
Mary T. Coughlin, Vice President
Eileen F. Cresham, Vice President and Principal
Pierre J. deVegh, Vice President
Abigail J. Feder, Vice President
Robert P. Follert, Vice President
George W. Gardner, Vice President
Geoffrey C. Getman, Vice President

5
<PAGE>

James W. Grisham, Vice President and Principal
Perry E. Hall, II, Vice President and Principal
Bruce S. Ives, Vice President and Principal
Margaret A. Kinsley, Vice President and Principal
John D. Knox, Vice President
Christopher A. H. Lewis, Vice President
Marianne J. Lippmann, Vice President and Principal
Gary J. Mangino, Vice President and Principal
Winslow M. Marston, Vice President
Walter Maynard, Jr., Vice President and Principal
Amr M. Nosseir, Vice President
Warren J. Olsen, Vice President and Principal
Anthony J. Pesce, Vice President
Christopher G. Petrow, Vice President and Principal
Robin H. Prince, Vice President
Gail H. Reeke, Vice President and Principal
Thomas A. Rorro, Vice President
Bruce R. Sandberg, Vice President and Principal
Vinod R. Sethi, Vice President and Principal
Steven C. Sexauer, Vice President and Principal
Kim I. Spellman, Vice President
Joseph P. Stadler, Vice President
Kenneth E. Tanaka, Vice President
Susan I. Tuomi, Vice President
Philip W. Warner, Vice President and Principal
Philip W. Winters, Vice President and Principal
Alford E. Zick, Jr., Vice President and Principal
Marshall T. Bassett, Vice President
Jeffrey G. Boudy, Vice President
L. Kenneth Brooks, Vice President
Andrew C. Brown, Vice President (MSAM) - UK
Frances Campion, Vice President (MSAM) - UK
Carl Kuo-Wei Chien, Vice President (MSAM) - Hong Kong
Lori A. Cohane, Vice President
James Colmenares, Vice President
Kate Cornish-Bowden, Vice President (MSAM) - UK
Bertrand Le PanDe Ligny, Vice President (MSAM) - UK
Christine H. du Bois, Vice President
Raye L. Dube, Vice President
Maureen A. Grover, Vice President
Kenneth R. Holley, Vice President
Nan B. Levy, Vice President
Valerie Y. Lewis, Vice President
Gordon W. Loery, Vice President
Yvonne Longley, Vice President (MSAM) - UK
Jeffrey Margolis, Vice President
Paula J. Morgan, Vice President (MSAM) - UK
Clare K. Mutone, Vice President
Martin O. Pearce, Vice President (MSAM) - UK
Alexander A. Pena, Vice President
David J. Polansky, Vice President

6
<PAGE>

Denise Saber, Vice President (MSAM) - UK
Michael James Smith, Vice President (MSAM) - UK
Christian K. Stadlinger, Vice President
Catherine Steinhardt, Vice President
Kunihiko Sugio, Vice President (MSAM) - Tokyo
Joseph Y.S. Tern, Vice President (MSAM) - Singapore
Ann D. Thivierge, Vice President
Richard Boon Hwee Toh, Vice President (MSAM) - Singapore
K.N. Vaidyanathan, Vice President (MSAM) - Bombay
Kevin V. Wasp, Vice President
Warren Ackerman, III, Principal
John R. Alkire, Principal (MSAM) - Tokyo
Francine J. Bovich, Principal
Stuart J.M. Breslow, Principal
Arthur Certosimo, Principal
James K.K. Cheng, Principal (MSAM) - Singapore
Stephen C. Cordy, Principal
Jacqueline A. Day, Principal (MSAM) - UK
Paul B. Ghaffari, Principal
Marianne Laing Hay, Principal (MSAM) - UK
Kathryn Jonas Kasanoff, Principal
Debra A.F. Kushma, Principal
M. Paul Martin, Principal
Robert L. Meyer, Principal
Margaret P. Naylor, Principal (MSAM) - UK
Russell C. Platt, Principal
Christine T. Reilly, Principal
Robert A. Sargent, Principal (MSAM) - UK
Harold J. Schaaff, Jr., Secretary, Principal and General Counsel
Kiat Seng Seah, Principal (MSAM) - Singapore
Robert M. Smith, Principal
Charles B. Hintz, Treasurer
Madeline D. Barkhorn, Assistant Secretary
Charlene R. Herzer, Assistant Secretary

In addition, MSAM acts as investment adviser to the following registered
investment companies: American Advantage International Equity Fund; The
Brazilian Investment Fund, Inc.; The Enterprise Group of Funds, Inc. - Tax-
Exempt Income Portfolio; Fortis Series Fund, Inc. - Global Asset Allocation
Series; Fountain Square International Equity Fund; General American Capital
Company; The Latin American Discovery Fund, Inc.; certain portfolios of The
Legends Fund, Inc.; The Malaysia Fund, Inc.; Morgan Stanley Africa Investment
Fund, Inc.; Morgan Stanley Asia-Pacific Fund, Inc.; Morgan Stanley Emerging
Markets Debt Fund, Inc.; Morgan Stanley Emerging Markets Fund, Inc.; all funds
of the Morgan Stanley Fund, Inc.; Morgan Stanley Global Opportunity Bond Fund,
Inc.; The Morgan Stanley High Yield Fund, Inc.; Morgan Stanley India Investment
Fund, Inc.; Morgan Stanley Institutional Fund, Inc.; The Pakistan Investment
Fund, Inc.; PCS Cash Fund, Inc.; Principal Aggressive Growth Fund, Inc.;
Principal Asset Allocation Fund, Inc.; certain portfolios of Sun America Series
Trust; SEI Institutional Managed Trust - Balanced Portfolio; The Thai Fund,
Inc. and The Turkish Investment Fund, Inc.

Item 29. Principal Underwriters

Morgan Stanley & Co. Incorporated ("MS&Co.") is distributor for Morgan
Stanley Institutional Fund, Inc., Morgan Stanley Fund, Inc., and PCS Cash
Fund, Inc. The information required by this Item

7
<PAGE>

29 with respect to each Director and officer of MS&Co. is incorporated by
reference to Schedule A of Form BD filed by MS&Co. pursuant to the Securities
and Exchange Act of 1934 (SEC File No. 8-15869).

Item 30. Location of Accounts and Records

With respect to each account, book or other document required to be
maintained by Section 31(a) of the 1940 Act [15 U.S.C. 80a-30(a)] and the Rule
[17 CFR 270.31a-1 to 31a-3] promulgated thereunder, furnish the name and
address of each person maintaining physical possession of each such account,
book or other document.

(1) PNC Bank, Broad and Chestnut Street, Philadelphia, PA 19101
(records relating to its functions as custodian).

(2) Morgan Stanley & Co. Incorporated. 1251 Avenue of the Americas,
New York, NY 10020 (records relating to its functions as distributor).

(3) Morgan Stanley Asset Management Inc., 1221 Avenue of the
Americas, New York, NY 10020 (records relating to its functions as investment
adviser).

(4) PFPC, Inc., 400 Bellevue Parkway, Wilmington, Delaware 19809
(records relating to its functions as administrator and transfer and dividend
disbursing agent).

(5) Morgan, Lewis & Bockius LLP, 2000 One Logan Square, Philadelphia, PA
19103 -(Registrant's Articles of Incorporation, By-Laws and Minute
Books).

Item 31. Management Services

Furnish a summary of the substantive provisions of any management-related
service contract not discussed in Part A or Part B of this Form (because the
contract was not believed to be of interest to a purchaser of securities of
the Registrant) under which services are provided to the Registrant,
indicating the parties to the contract, the total dollars paid and by whom,
for the last three fiscal years.

None.

Item 32. Undertakings

Furnish the following undertakings in substantially the following form in
all initial Registration Statements filed under the 1933 Act:

a) Not Applicable.
b) Not Applicable.
c) Not Applicable.

8
<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all of
the requirements for effectiveness of this Registration Statement pursuant to
Rule 485(b) under the Securities Act of 1933 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of New York and State of New York, on
October 25, 1995.

PCS CASH FUND, INC.
By: /s/ Warren J. Olsen
Warren J. Olsen
President and Director

Pursuant to the requirements of the Securities Act of 1933, this Amendment to
the Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.

Signature Title Date
/s/ Warren J. Olsen Director, October 25, 1995
Warren J. Olsen President(Principal
Executive Officer)

*/s/ Barton M. Biggs Director (Chairman) October 25, 1995
Barton M. Biggs

*/s/ Fergus Reid Director October 25, 1995
Fergus Reid

* /s/ Frederick O. Robertshaw Director October 25, 1995
Frederick O. Robertshaw

* /s/ Andrew McNally IV Director October 25, 1995
Andrew McNally IV

* /s/ John D. Barrett II Director October 25, 1995
John D. Barrett II

* /s/ Gerard E. Jones Director October 25, 1995
Gerard E. Jones

* /s/ Samuel T. Reeves Director October 25, 1995
Samuel T. Reeves

* /s/ Frederick B. Whittemore Director October 25, 1995
Frederick B. Whittemore

* /s/ Stephen M. Wynne Treasurer (Principal October 25, 1995
Stephen M. Wynne Accounting Officer)

*By /s/ Warren J. Olsen
Warren J. Olsen
Attorney-In-Fact

9
<PAGE>
EXHIBIT INDEX

EDGAR Exhibit
Number Number Description

EX-99.B 1 (a) Registrant's Articles of Incorporation,
filed herewith.

EX-99.B (b) Registrant's Articles of Amendment to
Articles of Incorporation, filed
herewith.

EX-99.B 2 Registrant's By-Laws, filed herewith.

4 (a) PCS Money Market Portfolio Specimen
Security is incorporated herein by
reference to Exhibit 4(a) of Pre-
Effective Amendment No. 2 to
Registrant's Registration Statement on
Form N-1A (No. 33-26417) filed on July
5, 1989.

(b) PCS Tax-Free Money Market Portfolio
Specimen Security is incorporated
herein by reference to Exhibit 4(b) of
Pre-Effective Amendment No. 2 to
Registrant's Registration Statement on
Form N-1A (No. 33-26417) filed on July
5, 1989.

(c) PCS Government Obligations Money Market
Portfolio Specimen Security is
incorporated herein by reference to
Exhibit 4(c) of Pre-Effective Amendment
No. 2 to Registrant's Registration
Statement on Form N-1A (No. 33-26417)
filed on July 5, 1989.

EX-99.B 5 (a) Registrant's Investment Advisory
Agreement (PCS Money Market Portfolio),
filed herewith.

EX-99.B (b) Registrant's Investment Advisory
Agreement (PCS Tax-Free Money Market
Portfolio), filed herewith.

EX-99.B (c) Registrant's Investment Advisory
Agreement (PCS Government Obligations
Money Market Portfolio), filed
herewith.

EX-99.B 6 (a) Registrant's Distribution Agreement
(PCS Money Market Portfolio), filed
herewith.

EX-99.B (b) Registrant's Distribution Agreement
(PCS Tax-Free Money Market Portfolio),
filed herewith.

EX-99.B (c) Registrant's Distribution Agreement
(PCS Government Obligations Money
Market Portfolio), filed herewith.

EX-99.B (d) Registrant's Form of Dealer Agreement,
filed herewith.

<PAGE>

EX-99.B 8 Registrant's Custodian Agreement, filed
herewith.

EX-99.B 9 (a) Registrant's Transfer Agency Agreement,
filed herewith.

EX-99.B (b) Registrant's Administration Agreement,
filed herewith.

EX-99.B 10 Opinion of Counsel, filed herewith.

EX-99.B 11 Consent of Independent Accountants,
filed herewith.

EX-99.B 13 Registrant's Form of Purchase
Agreement, filed herewith.

EX-99.B 15 (a) Registrant's Form of Plan of
Distribution (PCS Money Market
Portfolio), filed herewith.

EX-99.B (b) Registrant's Form of Plan of
Distribution (PCS Tax-Free Money Market
Portfolio), filed herewith.

EX-99.B (c) Registrant's Form of Plan of
Distribution (PCS Government
Obligations Money Market Portfolio),
filed herewith.

EX-99.B 16 Schedule for Computation of
Performance, filed herewith.

EX-99.B 24 Powers of Attorney, filed herewith.

EX-99.B 27 Financial Data Schedules.

Exhibit 1(A)

ARTICLES OF INCORPORATION

MORGAN STANLEY CASH FUND, INC.

ARTICLE I.

THE UNDERSIGNED, Stephen Brent Wells, whose post office
address is 1221 Avenue of the Americas, New York, New York 10020,
being at least eighteen years of age, does hereby act as an
incorporator, under and by virtue of the General Laws of the
State of Maryland authorizing the formation of corporations and
with the intention of forming a corporation.

ARTICLE II.

The name of the Corporation is:

MORGAN STANLEY CASH FUND, INC.

ARTICLE III.

The purpose for which the Corporation is formed is to
act as an open-end management investment company under the
Investment Company Act of 1940, as amended, (the "1940 Act") and
to exercise and generally to enjoy all of the powers, rights and
privileges granted to, or conferred upon, corporations by the
general laws of the State of Maryland now or hereafter in force.

ARTICLE IV.

The Corporation is expressly empowered as follows:

(1) To hold, invest and reinvest its assets in
securities and other investments including assets in cash.

(2) To issue and sell shares of its capital stock in
such amounts and on such terms and conditions and for such
purposes and for such amount or kind of consideration as may now
or hereafter be permitted by law.

1
<PAGE>

(3) To redeem, purchase or otherwise acquire, hold,
dispose of, resell, transfer, reissue or cancel (all without the
vote or consent of the shareholders of the Corporation) shares of
its capital stock, in any manner and to the extent now or
hereafter permitted by law and by these Articles of Incorporation
of the Corporation.

(4) To enter into a written contract or contracts with
any person or persons providing for a delegation of the
management of all or part of this Corporation's securities
portfolio(s) and also for the delegation of the performance of
various administrative or corporate functions, subject to the
direction of the Board of Directors. Any such contract or
contracts may be made with any person even though such person may
be an officer, other employee, Director or shareholder of this
Corporation or a corporation, partnership, trust or association
in which any such officer, other employee, Director or
shareholder may be interested.

(5) To enter into a written contract or contracts
appointing one or more underwriters, distributors or agents for
the sale of the shares of the Corporation on such terms and
conditions as the Board of Directors of this Corporation may deem
reasonable and proper, and to allow such person or persons a
commission on the sale of such shares. Any such contract or
contracts may be made with any person even though such person may
be an officer, other employee, Director or shareholder of this
Corporation or a corporation, partnership, trust or association
in which any such officer, other employee, Director or
shareholder may be interested.

(6) To enter into a written contract or contracts
employing such custodian or custodians for the safekeeping of the
property of the Corporation and of its shares, such dividend
disbursing agent or agents, and such transfer agent or agents and
registrar or registrars for its shares, and such agent or agents
for accounting and other administrative services on such terms
and conditions as the Board of Directors of this Corporation may
deem reasonable and proper for the conduct of the affairs of the
Corporation, and to pay the fees and disbursements of such
custodians, dividend disbursing agents, transfer agents,
registrars and accounting and administrative services agents out
of the income and/or any other property of the Corporation.
Notwithstanding any other provisions of the Articles of
Incorporation or the By-Laws of the Corporation, the Board of
Directors may cause any or all of the property of the Corporation
to be transferred to, or to be acquired and held in the name of,
a custodian so appointed or any nominee or nominees of this
Corporation or nominee or nominees of such custodian satisfactory
to the Board of Directors.

(7) To employ the same person, partnership (general or

2
<PAGE>

limited), association, trust or corporation in any multiple
capacity under Sections (4), (5) and (6) of this Article, who may
receive compensation from the Corporation in as many capacities
in which such person, partnership (general or limited),
association, trust or corporation shall serve the Corporation.

(8) To do any and all such further acts or things and
to exercise any and all such further powers or rights as may be
necessary, incidental, relative, conducive, appropriate or
desirable for the accomplishment, carrying out or attainment of
the purposes stated in Article III hereof.

The Corporation shall be authorized to exercise and
enjoy all of the powers, rights and privileges granted to, or
conferred upon, corporations by the General Laws of the State of
Maryland now or hereafter in force, and the enumeration of the
foregoing shall not be deemed to exclude any powers, rights or
privileges so granted or conferred.

ARTICLE V.

The post office address of the principal office of the
Corporation in the State of Maryland is 32 South Street,
Baltimore, Maryland 21201. The name of the resident agent of the
Corporation in this State is The Corporation Trust Incorporated,
a citizen of this State, who resides there and the post office
address of the resident agent is 32 South Street, Baltimore,
Maryland 21202.

ARTICLE VI.

(1) The total number of shares of capital stock which
the Corporation shall have the authority to issue is Ten Billion
(10,000,000,000) shares, of the par value of 1 mil ($.001) per
share and of the aggregate par value of Ten Million Dollars
($10,000,000.00), all of which shares are designated Common
Stock. The number of shares of stock of each class is such
number, if any, of shares of unissued stock as is classified or
reclassified into such class by the Corporation's Board of
Directors pursuant to the authority contained in Section 2-105 of
the Maryland General Corporation Law (or any successor
provision). Initially the shares of stock will be classified as
follows: Class A Common Stock (MS Money Market Portfolio), one
billion (1,000,000,000) shares; Class B Common Stock (MS Tax-Free
Money Market Portfolio), one billion (1,000,000,000) shares; and
Class C Common Stock (MS Government Obligations Money Market
Portfolio), with the remaining shares as a single unnamed, class,
unless and until the Corporation's Board of Directors classifies

3
<PAGE>

unclassified stock into one or more classes which are in addition
to classes, or after the Board has reclassified issued stock of
one or more classes. Unless otherwise prohibited by law, so long
as the Corporation is registered as an open-end investment
company under the 1940 Act, the Board of Directors shall have the
power and authority, without the approval of the holders of any
outstanding shares, to increase or decrease the number of shares
of capital stock, or the number of shares of capital stock of any
class or series, that the Corporation has authority to issue.

(2) Any fractional share shall carry proportionately
all the rights of a whole share, excepting any right to receive a
certificate evidencing such fractional share, but including,
without limitation, the right to vote and the right to receive
dividends.

(3) All persons who shall acquire stock in the
Corporation shall acquire the same subject to the provisions of
the Articles of Incorporation and the By-Laws of the Corporation.
All shares issued pursuant to these Articles of Incorporation for
which the price or consideration fixed thereon shall have been
paid shall be deemed to be fully paid and non-assessable.

(4) The Board of Directors shall have authority to
classify and reclassify any authorized but unissued shares of
capital stock from time to time by setting or changing in any one
or more respects the preferences, conversion or other rights,
voting powers, restrictions, limitations as to dividends,
qualifications or terms or conditions of redemption of the
capital stock; provided that the Board of Directors shall not
classify or reclassify any of such shares into any class or
series of stock which is prior to any class or series of capital
stock then outstanding with respect to rights upon the
liquidation, dissolution or winding up of the affairs of, or upon
any distribution of the general assets of, the Corporation,
except that there may be variations so fixed and determined among
different series and classes as to investment objectives,
purchase price, right of redemption, special rights as to
dividends, and in liquidation, with respect to assets belonging
to a particular series or class, voting powers and conversion
rights. Subject to the provisions of Section 6 of this Article
VI and applicable law, the power of the Board of Directors to
classify or reclassify any of the shares of capital stock shall
include, without limitation, authority to classify or reclassify
any such stock into a class or classes of capital stock and to
divide and classify shares of any class into one or more series
of such class, by determining, fixing or altering one or more of
the following:

(a) The distinctive designation of such class or
series and the number of shares to constitute such class or
series; provided that, unless otherwise prohibited by the terms

4
<PAGE>

of such class or series, the number of shares of any class or
series may be decreased by the Board of Directors in connection
with any classification or reclassification of unissued shares
and the number of shares of such class or series may be increased
by the Board of Directors in connection with any such
classification or reclassification, and any shares of any class
or series which have been redeemed, purchased or otherwise
acquired by the Corporation shall remain part of the authorized
capital stock and be subject to classification and
reclassification as provided herein.

(b) Whether or not and, if so, the rates, amounts
and times at which, and the conditions under which, dividends
shall be payable on shares of such class or series.

(c) Whether or not shares of such class or series
shall have voting rights in addition to any general voting rights
provided by law and the Articles of Incorporation of the
Corporation and, if so, the terms of such additional voting
rights.

(d) The rights of the holders of shares of such
class or series upon the liquidation, dissolution or winding up
of the affairs of, or upon any distribution of the assets of, the
Corporation.

(e) Any other rights, restrictions, including
restrictions on transferability, and qualifications of shares of
such class or series, not inconsistent with law and the Articles
of Incorporation of the Corporation.

(5) The Board of Directors shall have authority to
issue from time to time shares of capital stock, whether now or
hereafter authorized, for such consideration as the Board of
Directors may deem advisable, subject to such limitations as may
be set forth in the Articles of Incorporation or the By-Laws of
the Corporation or in the Maryland General Corporation Law.

(6) Shares of Common Stock of the Corporation shall
have the following preferences, conversion and other rights,
voting powers, restrictions, limitations as to dividends,
qualifications and terms and conditions of redemption:

(a) Assets Belonging to a Class. All
consideration received by the Corporation for the issue or sale
of stock of any class of Common Stock, together with all assets
in which such consideration is invested and reinvested, income,
earnings, profits and proceeds thereof, including any proceeds
derived from the sale, exchange or liquidation thereof, and any
funds or payments derived from any reinvestment of such proceeds
in whatever form the same may be, shall irrevocably belong to the
class of shares of Common Stock with respect to which such

5
<PAGE>

assets, payments or funds were received by the Corporation for
all purposes, subject only to the rights of creditors, and shall
be so handled upon the books of account of the Corporation. Such
consideration, assets, income, earnings, profits and proceeds
thereof, including any proceeds derived from the sale, exchange
or liquidation thereof, and any assets derived from any
reinvestment of such proceeds in whatever form, are herein
referred to as "assets belonging to" such class. Any assets,
income, earnings, profits, and proceeds thereof, funds or
payments which are not readily attributable to any particular
class shall be allowable among any one or more of the classes in
such manner and on such basis as the Board of Directors, in its
sole discretion, shall deem fair and equitable.

(b) Liabilities Belonging to a Class. The assets
belonging to any class of Common Stock shall be charged with the
liabilities in respect of such class, and shall also be charged
with such class' share of the general liabilities of the
Corporation determined as hereinafter provided. The
determination of the Board of Directors shall be conclusive as to
the amount of such liabilities, including the amount of accrued
expenses and reserves; as to any allocation of the same to a
given class; and as to whether the same are allocable to one or
more classes. The liabilities so allocated to a class are herein
referred to as "liabilities belonging to" such class. Any
liabilities which are not readily attributable to any particular
class shall be allocable among any one or more of the classes in
such manner and on such basis as the Board of Directors, in its
sole discretion, shall deem fair and equitable.

(c) Dividends and Distributions. Shares of each
class of Common Stock shall be entitled to such dividends and
distributions, in stock or in cash or both, as may be declared
from time to time by the Board of Directors, acting in its sole
discretion, with respect to such class, provided, however, that
dividends and distributions on shares of a class of Common Stock
shall be paid only out of the lawfully available "assets
belonging to such class" as such phrase is defined in Section
6(A) of this Article VI.

(d) Liquidating Dividends and Distributions. In
the event of the liquidation or dissolution of the Corporation,
shareholders of each class of Common Stock shall be entitled to
receive, as a class, out of the assets of the Corporation
available for distribution to shareholders, but other than
general assets not belonging to any particular class of stock,
the assets belonging to such class; and the assets so
distributable to the shareholders of any class of Common Stock
shall be distributed among such shareholders in proportion to the
number of shares of such class held by them and recorded on the
books of the Corporation. In the event that there are any
general assets not belonging to any particular class of stock and

6
<PAGE>

available for distribution, such distribution shall be made to
the holders of stock of all classes of Common Stock in proportion
to the asset value of the respective classes of Common Stock
determined as hereinafter provided.

(e) Voting. Each shareholder of each class of
Common Stock shall be entitled to one vote for each share of
Common Stock, irrespective of the class, then standing in his
name on the books of the Corporation or as otherwise provided by
the By-Laws, and on any matter submitted to a vote of
shareholders, all shares of Common Stock then issued and
outstanding and entitled to vote shall be voted in the aggregate
and not by class except that: (i) when expressly required by law,
shares of Common Stock shall be voted by individual class and
(ii) only shares of Common Stock of the respective class or
classes affected by a matter shall be entitled to vote on such
matter. At all meetings of the shareholders, the holders of one-
third of the shares of stock of the Corporation entitled to vote
at the meeting, present in person or by proxy, shall constitute a
quorum for the transaction of any business, except as otherwise
provided by statute or by the Articles of Incorporation. In the
absence of a quorum no business may be transacted, except that
the holders of a majority of the shares of stock present in
person or by proxy and entitled to vote may adjourn the meeting
from time to time, without notice other than announcement at the
meeting except as otherwise required by the By-Laws, until the
holders of the requisite amount of shares of stock shall be so
present. At any such adjourned meeting at which a quorum may be
present any business may be transacted which might have been
transacted at the meeting as originally called. When a quorum is
present, each matter voted upon shall be decided by the vote of
the holders of a majority of the votes entitled to be cast on
such matter, except as otherwise provided by statute or by the
Articles of Incorporation. The absence from any meeting, in
person or by proxy, of holders of the number of shares of stock
of the Corporation in excess of a majority thereof which may be
required by the laws of the State of Maryland, the 1940 Act, or
other applicable statute, the Articles of Incorporation, or the
By-Laws, for action upon any given matter shall not prevent
action at such meeting upon any other matter or matters which may
properly come before the meeting, if there shall be present at
the meeting, in person or by proxy, holders of the number of
shares of stock of the Corporation required for action in respect
of such other matter or matters.

(f) Redemption. To the extent the Corporation has
funds or other property legally available therefor, each holder
of shares of Common Stock of the Corporation shall be entitled to
require the Corporation to redeem all or any part of the shares
of Common Stock of the Corporation standing in the name of such
holder on the books of the Corporation, and all shares of Common
Stock issued by the Corporation shall be subject to redemption by

7
<PAGE>

the Corporation, at the redemption price of such shares as in
effect from time to time as may be determined by the Board of
Directors of the Corporation in accordance with the provisions
hereof, subject to the right of the Board of Directors of the
Corporation to suspend the right of redemption of shares of
Common Stock of the Corporation or postpone the date of payment
of such redemption price in accordance with provisions of
applicable law. Without limiting the generality of the
foregoing, the Corporation shall, to the extent permitted by
applicable law, have the right at any time to redeem the shares
owned by any holder of Common Stock of the Corporation (i) if
such redemption is, in the opinion of the Board of Directors of
the Corporation, desirable in order to prevent the Corporation
from being deemed a "personal holding company" within the meaning
of the Internal Revenue Code of 1986, as amended, (ii) if the
value of such shares in the account maintained by the Corporation
or its transfer agent for any class of Common Stock is less than
$500.00 (Five Hundred Dollars) provided, however, that each
shareholder shall be notified that the value of his account is
less than $500.00 and allowed thirty (30) days to make additional
purchases of shares before such redemption is processed by the
Corporation, or (iii) if the net income with respect to any
particular class of Common Stock should be negative or it should
otherwise be appropriate to carry out the Corporation's
responsibilities under the 1940 Act, in each case subject to such
further terms and conditions as the Board of Directors of the
Corporation may from time to time adopt. The redemption price of
shares of Common Stock of the Corporation shall, except as
otherwise provided in this Section 6(F), be the net asset value
thereof as determined by the Board of Directors of the
Corporation from time to time in accordance with the provisions
of applicable law, less such redemption fee or other charge, if
any, as may be the fixed by resolution of the Board of Directors
of Corporation. Payment of the redemption price shall be made in
cash by the Corporation at such time and in such manner as may be
determined from time to time by the Board of Directors of the
Corporation unless, in the opinion of the Board of Directors,
which shall be conclusive, conditions exist which make payment
wholly in cash unwise or undesirable; in such event the
Corporation may make payment wholly or partly by securities or
other property included in the assets belonging or allocable to
the class of the shares redemption of which is being sought, the
value of which shall be determined as provided herein.

(g) Conversion of Exchange. Each holder of any
class of Common Stock of the Corporation, who surrenders his
share certificate in good delivery form to the Corporation or, if
the shares in question are not represented by certificates, who
delivers to the Corporation a written request in good order
signed by the shareholder, shall, subject to such procedures as
may be established by the Board of Directors, be entitled to
convert or exchange the shares in question on the basis

8
<PAGE>

hereinafter set forth, into shares of stock of any other class of
the Corporation. The Corporation shall determine the net asset
value, as provided herein, of the shares to be converted and may
deduct therefrom a conversion or exchange cost, in an amount
determined within the discretion of the Board of Directors.
Within five (5) business days after such surrender and payment of
any conversion or exchange cost, the Corporation shall issue to
the shareholder such number of shares of stock of the class
desired as, taken at the net asset value thereof determined as
provided herein in the same manner and at the same time as that
of the shares surrendered, shall equal the net asset value of the
shares surrendered, less any conversion or exchange cost as
aforesaid. Any amount representing a fraction of a share may be
paid in cash at the option of the Corporation. Any conversion or
exchange cost may be paid and/or assigned by the Corporation to
the underwriter and/or to any other agency, as it may elect.

(h) Restrictions on Transferability. If, in the
opinion of the Board of Directors of the Corporation,
concentration in the ownership of shares of Common Stock might
cause the Corporation to be deemed a personal holding company
within the meaning of the Internal Revenue Code, as now or
hereafter in force, the Corporation may at any time and from time
to time refuse to give effect on the books of the Corporation to
any transfer or transfers of any share or shares of Common Stock
in an effort to prevent such personal holding company status.

ARTICLE VII.

(1) The number of Directors of the Corporation shall
be five (5), which number may be increased or decreased pursuant
to the By-Laws of the Corporation but shall never be less than
three (3) except for any period during which shares of the
Corporation are held by fewer than three shareholders. The name
of the Director who shall act until the Directors are elected by
the Corporation's shareholder or until his successor is duly
elected and qualifies is:

Stephen Brent Wells

(2) No holder of stock of the Corporation shall, as
such holder, have any preemptive right to purchase or subscribe
for any shares of the capital stock of the Corporation or any
other security of the Corporation which it may issue or sell
(whether out of the number of shares authorized by the Articles
of Incorporation, or out of any shares of the capital stock of
the Corporation acquired by it after the issue thereof, or
otherwise) other than such right, if any, as the Board of
Directors, in its discretion, may determine.

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<PAGE>

ARTICLE VIII.

Section 1. To the fullest extent that limitations on
the liability of directors and officers are permitted by the
Maryland General Corporation Law, no director of officer of the
Corporation shall have any liability to the Corporation or its
shareholders for damages. This limitation on liability applies
to events occurring at the time a person serves as a director or
officer of the Corporation whether or not such person is a
director or officer at the time of any proceeding in which
liability is asserted.

Section 2. The Corporation shall indemnify and advance
expenses to its currently acting and its former directors to the
fullest extent that indemnification of directors is permitted by
the Maryland General Corporation Law. The Corporation shall
indemnify and advance expenses to its officers to the same extent
as its directors and to such further extent as is consistent with
law. The Board of Directors may by By-law, resolution or
agreement make further provision for indemnification of
directors, officers, employees and agents to the fullest extent
permitted by the Maryland General Corporation Law.

Section 3. No provision of this Article shall be
effective to protect or purport to protect any director of
officer of the Corporation against any liability to the
corporation or its security holders to which he would otherwise
be subject by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the
conduct of his office.

Section 4. References to the Maryland General
Corporation Law in this Article are to the law as from time to
time amended. No incorporation of the Corporation shall
decrease, but may expand, any right of any person under this
Article based on any event, omission or proceeding prior to such
amendment.

ARTICLE IX.

Any determination made in good faith, so far as
accounting matters are involved, in accordance with accepted
accounting practices by or pursuant to the direction of the Board
of Directors, as to the amount of assets, obligations or
liabilities of the Corporation, as to the amount of net income of
the Corporation from dividends and interest for any period or
amounts at any time legally available for the payment of
dividends, as to the amount of any reserves or charges set up and
the propriety thereof, as to the time of or purpose for creating
reserves or as to the use, alteration or cancellation of any

10
<PAGE>

reserves or charges (whether or not any obligation or liability
for which such reserves or charges shall have been created shall
have been paid or discharged or shall be then or thereafter
required to be paid or discharged), as to the value of any
security owned by the Corporation or as to any other matters
relating to the issuance, sale, redemption or other acquisition
or disposition of securities or shares of capital stock of the
Corporation, and any reasonable determination made in good faith
by the Board of Directors as to whether any transaction
constitutes a purchase of securities on "margin", a sale of
securities "short", or an underwriting of the sale of, or a
participation in any underwriting or selling group in connection
with the public distribution of, any securities, shall be final
and conclusive, and shall be binding upon the Corporation and all
holders of its capital stock, past, present and future, and
shares of the capital stock of the Corporation are issued and
sold on the condition and understanding, evidenced by the
purchase of shares of capital stock or acceptance of share
certificates, that any and all such determinations shall be
binding as aforesaid. No provision of the Articles of
Incorporation of the Corporation shall be effective to (i)
require a waiver of compliance with any provision of the
Securities Act of 1933, as amended, or the 1940 Act, or of any
valid rule, regulation or order of the Securities and Exchange
Commission thereunder or (ii) protect or purport to protect any
Director or officer of the Corporation against any liability to
the Corporation or its security holders to which he would
otherwise be subject by reason of willful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in
the conduct of his office.

ARTICLE X.

The duration of this Corporation shall be perpetual.

ARTICLE XI.

(1) The Corporation reserves the right from time to
time to make any amendments to its Articles of Incorporation
which may now or hereafter be authorized by law, including any
amendments changing the terms or contract rights, as expressly
set forth in its Articles of Incorporation, of any of its
outstanding stock by classification, reclassification or
otherwise, but no such amendment which changes such terms or
contract rights of any of its outstanding stock shall be valid
unless such amendment shall have been authorized by not less than
a majority of the aggregate number of the votes entitled to be

11
<PAGE>

cast thereon by a vote at a meeting or by the unanimous written
consent as provided in the Corporation's By-Laws.

(2) Notwithstanding any provision of the General Laws
of the State of Maryland requiring any action to be taken or
authorized by the affirmative vote of a greater proportion than
the majority of the total number of shares of any class of stock
of the Corporation, such action shall be effective and valid if
taken or authorized by the affirmative vote of the holders of a
majority of the total number of shares outstanding of that class
of stock entitled to vote thereon, except as otherwise provided
in the Articles of Incorporation.

(3) So long as permitted by Maryland law, the books of
the Corporation may be kept outside of the State of Maryland at
such place or places as may be designated from time to time by
the Board of Directors or in the By-Laws of the Corporation.

(4) In furtherance, and not in limitation, of the
powers conferred by the laws of the State of Maryland, the Board
of Directors is expressly authorized:

(a) To make, alter or repeal the By-Laws of the
Corporation, except where such power is reserved by the By-Laws
to the shareholders, and except as otherwise required by the 1940
Act.

(b) From time to time to determine whether and to
what extent and at what times and places and under what
conditions and regulations the books and accounts of the
Corporation, or any of them other than the stock ledger, shall be
open to the inspection of the shareholders, and no shareholder
shall have any right to inspect any account or book or document
of the Corporation, except as conferred by law or authorized by
resolution of the Board of Directors or of the shareholders.

(c) Without the assent or vote of the
shareholders, to authorize the issuance from time to time of
shares of the stock of any class of the Corporation, whether now
or hereafter authorized, for such consideration, as the Board of
Directors may deem advisable.

(d) Without the assent or vote of the
shareholders, to authorize and issue obligations of the
Corporation, secured and unsecured, as the Board of Directors may
determine, and to authorize and cause to be executed mortgages
and liens upon the property of the Corporation, real and
personal.

(e) Notwithstanding anything in these Articles of
Incorporation to the contrary, to establish in its absolute
discretion the basis or method for determining the value of the

12
<PAGE>

assets belonging to any class, and the net asset value of each
share of any class of the Corporation for purposes of sales,
redemptions, repurchases of shares or otherwise.

(f) To determine in accordance with generally
accepted accounting principles and practices what constitutes net
profits, earnings, surplus or net assets in excess of capital,
and to determine what accounting periods shall be used by the
Corporation for any purpose, whether annual or any other period,
including daily; to set apart out of any funds of the Corporation
such reserves for such purposes as it shall determine and to
abolish the same; to declare and pay any dividends and
distributions in cash, securities or other property from surplus
or any funds legally available therefor, at such intervals (which
may be as frequently as daily) or on such other periodic basis,
as it shall determine; to declare such dividends or distributions
by means of a formula or other method of determination, at
meetings held less frequently than the frequency of the
effectiveness of such declarations; to establish payment dates
for dividends or any other distributions on any basis, including
dates occurring less frequently than the effectiveness of
declarations thereof; and to provide for the payment of declared
dividends on a date earlier or later than the specified payment
date in the case of shareholders of the Corporation redeeming
their entire ownership of shares of any class of the Corporation.

(g) In addition to the powers and authorities
granted herein and by statute expressly conferred upon it, the
Board of Directors is authorized to exercise all such powers and
do all such acts and things as may be exercised or done by the
Corporation, subject, nevertheless, to the provisions of Maryland
law, these Articles of Incorporation and the By-Laws of the
Corporation.

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<PAGE>

IN WITNESS WHEREOF, the undersigned Incorporator of
Morgan Stanley Cash Fund, Inc. thereby executes the foregoing
Articles of Incorporation and acknowledges the same to be his act
on the 4th day of January, 1989.

/s/ Stephen Brent Wells
Stephen Brent Wells
Incorporator

WITNESS:

/s/ Warren J. Olsen
Warren J. Olsen

Exhibit 1(B)

MORGAN STANLEY CASH FUND, INC.

ARTICLES OF AMENDMENT

Morgan Stanley Cash Fund, Inc., a Maryland corporation

having its principal business office at 32 South Street,

Baltimore, Maryland 21201 (hereinafter called the "Corporation"),

hereby certifies to the State Department of Assessments and

Taxation of Maryland that:

FIRST: The Articles of Incorporation of the

Corporation are hereby amended as follows:

Article II of the Articles of Incorporation is
amended and restated to read in full as follows:

ARTICLE II

The name of the Corporation is: PCS
Cash Fund, Inc.

SECOND: The Articles of Incorporation of the

Corporation are hereby further amended as follows:

Paragraph (1) of Article VI of the Articles of
Incorporation is amended and restated to read in full
as follows:

ARTICLE VI

(1) The total number of shares of capital stock which
the Corporation shall have the authority to issue is Ten
Billion (10,000,000,000) shares, of the par value of 1 mil
($.001) per share and of the aggregate par value of Ten
Million Dollars ($10,000,000.00), all of which shares are
designated Common Stock. The number of shares of stock of
each class is such number, if any, of shares of unissued
stock as is classified or reclassified into such class by
the Corporation's Board of Directors pursuant to the
authority contained in Section 2-105 of the Maryland General
Corporation Law (or any successor provision). Initially the
shares of stock will be classified as follows: Class A
Common Stock (PCS Money Market Portfolio), one billion
1 <PAGE>

(1,000,000,000) shares; Class B Common Stock (PCS Tax-Free
Money Market Portfolio), one billion (1,000,000,000) shares;
and Class C Common Stock (PCS Government Obligations Money
Market Portfolio), with the remaining shares as a single
unnamed class, unless and until the Corporation's Board of
Directors classifies unclassified stock into one or more
classes which are in addition to classes, or after the Board
has reclassified issued stock of one or more classes.
Unless otherwise prohibited by law, so long as the
Corporation is registered as an open-end investment company
under the 1940 Act, the Board of Directors shall have the
power and authority, without the approval of the holders of
any outstanding shares, to increase or decrease the number
of shares of capital stock, or the number of shares of
capital stock of any class or series, that the Corporation
has authority to issue.

THIRD: The sole director of the Corporation, by

consent pursuant to Section 2-408(c) of the Maryland General

Corporation Law, on April 1, 1989, duly adopted resolutions in

which was set forth the foregoing amendments to the Articles of

Incorporation, approving the said amendments to the Articles of

Incorporation.

FOURTH: No stock entitled to vote on the foregoing

amendments to the Articles of Incorporation was subscribed for at

the time of the aforementioned approval.

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<PAGE>

IN WITNESS WHEREOF, the Corporation has caused these

presents to be signed in its name and on its behalf by its

President and attested by its Assistant Secretary on April 1,

1989.

{SEAL} MORGAN STANLEY CASH FUND, INC.

Attest:/s/ Kathryn McKenna By/s/ Warren J. Olsen
Kathryn McKenna Warren J. Olsen
Assistant Secretary President

The undersigned, President of Morgan Stanley Cash Fund,

Inc., who executed on behalf of said Corporation the foregoing

Articles of Amendment, of which this certificate is made a part,

hereby acknowledges, in the name and on behalf of said

Corporation, the foregoing Articles of Amendment to be the

corporate act of said Corporation and further certifies that, to

the best of his knowledge, information and belief, the matters

and facts set forth herein with respect to the approval thereof

are true in all material respects, under the penalties of

perjury.

/s/ Warren J. Olsen
Warren J. Olsen
President

Exhibit 2

BY-LAWS

MORGAN STANLEY CASH FUND, INC.

ARTICLE I

Offices

Section 1. Principal Office. The principal office of
the Corporation shall be in the City of Baltimore, State of
Maryland.

Section 2. Principal Executive Office. The principal
executive office of the Corporation shall be in the City of New
York, State of New York.

Section 3. Other Offices. The Corporation may have
such other offices in such places as the Board of Directors may
from time to time determine.

ARTICLE II

Meetings of Shareholders

Section 1. Shareholder Meetings. The Corporation may,
but shall not be required to, hold a regular meeting of
shareholders or of one or more classes of shareholders in any
year in which the Corporation is not required, under the
Investment Company Act of 1940, as amended, (the "1940 Act") to
submit for shareholder approval (i) the election of Director(s),
(ii) any contract with an investment adviser or principal
underwriter (as such terms are defined in the 1940 Act) that the
Corporation enters into or any renewal or amendment thereof, or
(iii) the selection of the Corporation's independent public
accountants. If shareholder approval is required for any of the
purposes in (i) through (iii) above, a regular meeting shall be
held, at which shareholders shall vote on the proposal
necessitating such meeting and shall transact any other business
as may properly be brought before the meeting. Regular meetings
of shareholders, if any, shall be held on such day during the
month of April and at such time as shall be designated by the
Board of Directors and stated in the notice of the meeting.

1
<PAGE>

Section 2. Special Meetings. Special meetings of the
shareholders, unless otherwise provided by law or by the Articles
of Incorporation may be called for any purpose or purposes by a
majority of the Board of Directors or the President, and shall be
called by the President or Secretary on the written request of
the shareholders as provided by the Maryland General Corporation
Law. Such request shall state the purpose or purposes of the
proposed meeting and the matters proposed to be acted on at it;
provided, however, that unless requested by shareholders entitled
to cast a majority of all the votes entitled to be cast at the
meeting, a special meeting need not be called to consider any
matter which is substantially the same as a matter voted on at
any special meeting of the shareholders held during the preceding
twelve (12) months.

Section 3. Place of Meetings. The regular meeting, if
any, and any special meeting of the shareholders shall be held at
such place within the United States as the Board of Directors may
from time to time determine.

Section 4. Notice of Meetings; Waiver of Notice;
Shareholder List. (a) Notice of the place, date and time of the
holding of each regular and special meeting of the shareholders
and the purpose or purposes of the meeting shall be given
personally or by mail, not less than ten nor more than ninety
days before the date of such meeting, to each shareholder
entitled to vote at such meeting and to each other shareholder
entitled to notice of the meeting. Notice by mail shall be
deemed to be duly given when deposited in the United States mail
addressed to the shareholder at his address as it appears on the
records of the Corporation, with postage thereon prepaid. The
notice of every meeting of shareholders may be accompanied by a
form of proxy approved by the Board of Directors in favor of such
actions or persons as the Board of Directors may select.

(b) Notice of any meeting of shareholders shall
be deemed waived by any shareholder who shall attend such meeting
in person or by proxy, or who shall, either before or after the
meeting, submit a signed waiver of notice which is filed with the
records of the meeting. A meeting of shareholders convened on
the date for which it was called may be adjourned from time to
time without further notice to a date not more than 120 days
after the original record date.

(c) At least five (5) days prior to each meeting
of shareholders, the officer or agent having charge of the share
transfer books of the Corporation shall make a complete list of
shareholders entitled to vote at such meeting, in alphabetical
order with the address of and the number of shares held by each
shareholder.

2
<PAGE>

Section 5. Organization. At each meeting of the
shareholders, the Chairman of the Board (if one has been
designated by the Board), or in his absence or inability to act,
the President, or in the absence or inability to act of the
Chairman of the Board and the President, a Vice President, or in
the absence or the inability to act of the Chairman of the Board,
the President and all the Vice Presidents, a chairman chosen by
the shareholders shall act as chairman of the meeting. The
Secretary, or in his absence or inability to act, any person
appointed by the chairman of the meeting, shall act as secretary
of the meeting and keep the minutes thereof.

Section 6. Voting. (a) Except as otherwise provided
by statute or the Articles of Incorporation, each holder of
record of shares of the Corporation having voting power shall be
entitled at each meeting of the shareholders to one vote for
every share standing in his name on the record of shareholders of
the Corporation as of the record date determined pursuant to
Section 5 of Article VI hereof or if such record date shall not
have been so fixed, then at the later of (i) the close of
business on the day on which notice of the meeting is mailed or
(ii) the thirtieth (30th) day before the meeting. In all
elections for Directors, each share may be voted for as many
individuals as there are Directors to be elected and for whose
election the share is entitled to be voted.

(b) Each shareholder entitled to vote at any
meeting of shareholders may authorize another person or persons
to act for him by a proxy signed by such shareholder or his
attorney-in-fact. No proxy shall be valid after the expiration
of eleven months from the date thereof, unless otherwise provided
in the proxy. Every proxy shall be revocable at the pleasure of
the shareholder executing it, except in those cases where such
proxy states that it is irrevocable and where an irrevocable
proxy is permitted by law. Except as otherwise provided by
statute, the Articles of Incorporation or these By-Laws, any
corporate action to be taken by vote of the shareholders shall be
authorized by a majority of the total votes cast at a meeting of
shareholders at which a quorum is present by the holders of
shares present in person or represented by proxy and entitled to
vote on such action, except that a plurality of all the votes
cast at a meeting at which a quorum is present is sufficient to
elect a Director.

(c) If a vote shall be taken on any question
other than the election of Directors which shall be by written
ballot, then unless required by statute or these By-Laws or
determined by the chairman of the meeting to be advisable, any
such vote need not be by ballot. On a vote by ballot, each
ballot shall be signed by the shareholder voting, or by his
proxy, if there be such proxy, and shall state the number of
shares voted.

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<PAGE>

Section 7. Inspectors. The Board may, in advance of
any meeting of shareholders, appoint one or more inspectors to
act at such meeting or any adjournment thereof. If the
inspectors shall not be so appointed or if any of them shall fail
to appear or act, the chairman of the meeting may, and on the
request of any shareholder entitled to vote at the meeting shall,
appoint inspectors. Each inspector, before entering upon the
discharge of his duties, shall take and sign an oath to execute
faithfully the duties of inspector at such meeting with strict
impartiality and according to the best of his ability. The
inspectors shall determine the number of shares outstanding and
the voting power of each, the number of shares represented at the
meeting, the existence of a quorum, the validity and effect of
proxies, and shall receive votes, ballots or consents, hear and
determine all challenges and questions arising in connection with
the right to vote, count and tabulate all votes, ballots or
consents, determine the result, and do such acts as are proper to
conduct the election or vote with fairness to all shareholders.
On request of the chairman of the meeting or any shareholder
entitled to vote at it, the inspectors shall make a report in
writing of any challenge, request or matter determined by them
and shall execute a certificate of any fact found by them. No
Director or candidate for the office of Director shall act as
inspector of an election of Directors. Inspectors need not be
shareholders.

Section 8. Consent of Shareholders in Lieu of Meeting.
Except as otherwise provided by statute, any action required to
be taken at any regular or special meeting of shareholders or any
action which may be taken at any annual or special meeting of
shareholders, may be taken without a meeting, without prior
notice and without a vote, if the following are filed with the
records of shareholders' meetings: (i) a unanimous written
consent which sets forth the action and is signed by each
shareholder entitled to vote on the matter and (ii) a written
waiver of any right to dissent signed by each shareholder
entitled to notice of the meeting but not entitled to vote at it.

ARTICLE III

Board of Directors

Section 1. General Powers. Except as otherwise
provided in the Articles of Incorporation, the business and
affairs of the Corporation shall be managed under the direction
of the Board of Directors. All powers of the Corporation may be
exercised by or under authority of the Board of Directors except
as conferred on or reserved to the shareholders by law or by the
Articles of Incorporation or these By-Laws.

4
<PAGE>

Section 2. Number of Directors. The number of
Directors shall be fixed from time to time by resolution of the
Board of Directors adopted by a majority of the Directors then in
office; provided, however, that the number of Directors shall in
no event be less than three (except for any period during which
shares of the Corporation are held by fewer than three
shareholders) nor more than fifteen. Any vacancy created by an
increase in Directors may be filled in accordance with Section 6
of this Article III. No reduction in the number of Directors
shall have the effect of removing any Director from office prior
to the expiration of his term unless such Director is
specifically removed pursuant to Section 5 of this Article III at
the time of such decrease. Directors need not be shareholders.

Section 3. Election and Term of Directors. Directors
shall be elected by majority vote of a quorum cast by written
ballot at the regular meeting of shareholders, if any, or at a
special meeting held for that purpose. The term of office of
each Director shall be from the time of his election and
qualification and until his successor shall have been elected and
shall have qualified, or until his death, or until he shall have
resigned, or have been removed as hereinafter provided in these
By-Laws, or as otherwise provided by statute or the Articles of
Incorporation.

Section 4. Resignation. A Director of the Corporation
may resign at any time by giving written notice of his
resignation to the Board or the Chairman of the Board or the
President or the Secretary. Any such resignation shall take
effect at the time specified therein or, if the time when it
shall become effective shall not be specified therein,
immediately upon its receipt; and, unless otherwise specified
therein, the acceptance of such resignation shall not be
necessary to make it effective.

Section 5. Removal of Directors. Any Director of the
Corporation may be removed by the shareholders by a vote of a
majority of the votes entitled to be cast for the election of
Directors.

Section 6. Vacancies. The shareholders may elect a
successor to fill a vacancy on the Board of Directors which
results from the removal of a Director. A majority of the
remaining Directors, whether or not sufficient to constitute a
quorum, may fill a vacancy on the Board of Directors which
results from any cause except an increase in the number of
Directors, and a majority of the entire Board of Directors may
fill a vacancy which results from an increase in the number of
Directors. A Director elected by the Board of Directors to fill
a vacancy serves until the next annual meeting of shareholders
and until his successor is elected and qualifies. A Director
elected by the shareholders to fill a vacancy which results from

5
<PAGE>

the removal of a Director serves for the balance of the term of
the removed Director.

Section 7. Regular Meetings. Regular meetings of the
Board may be held with notice at such times and places as may be
determined by the Board of Directors.

Section 8. Special Meetings. Special meetings of the
Board may be called by the Chairman of the Board, the President,
or by a majority of the Directors either in writing or by vote at
a meeting, and may be held at any place in or out of the State of
Maryland as the Board may from time to time determine.

Section 9. Notice of Special Meetings. Notice of each
special meeting of the Board shall be given by the Secretary as
hereinafter provided, in which notice shall be stated the time
and place of the meeting. Notice of each such meeting shall be
delivered to each Director, either personally or by telephone,
telegraph, cable or wireless, at least twenty-four hours before
the time at which such meeting is to be held, or by first-class
mail, postage prepaid, or by commercial delivery services
addressed to him at his residence or usual place of business, at
least three days before the day on which such meeting is to be
held.

Section 10. Waiver of Notice of Special Meetings.
Notice of any special meeting need not be given to any Director
who shall, either before or after the meeting, sign a written
waiver of notice which is filed with the records of the meeting
or who shall attend such meeting. Except as otherwise
specifically required by these By-Laws, a notice or waiver of
notice of any meeting need not state the purposes of such
meeting.

Section 11. Quorum and Voting. A majority of the
members of the entire Board shall be present in person at any
meeting of the Board in order to constitute a quorum for the
transaction of business at such meeting, and except as otherwise
expressly required by statute, the Articles of Incorporation,
these By-Laws, the 1940 Act or other applicable statute, the act
of a majority of the Directors present at any meeting at which a
quorum is present shall be the act of the Board; provided,
however, that the approval of any contract with an investment
adviser or principal underwriter, as such terms are defined in
the 1940 Act, which the Corporation enters into or any renewal or
amendment thereof, the approval of the fidelity bond required by
the 1940 Act, and the selection of the Corporation's independent
public accountants shall each require the affirmative vote of a
majority of the Directors who are not interested persons, as
defined in the 1940 Act, of the Corporation. In the absence of a
quorum at any meeting of the Board, a majority of the Directors
present thereat may adjourn the meeting from time to time, but

6
<PAGE>

not for a period greater than thirty (30) days at any one time,
to another time and place until a quorum shall attend. Notice of
the time and place of any adjourned meeting shall be given to the
Directors who were not present at the time of the adjournment
and, unless such time and place were announced at the meeting at
which the adjournment was taken, to the other Directors. At any
adjourned meeting at which a quorum is present, any business may
be transacted which might have been transacted at the meeting as
originally called.

Section 12. Chairman. The Board of Directors may at
any time appoint one of its members as Chairman of the Board who
shall serve at the pleasure of the Board and who shall perform
and execute such duties and powers as may be conferred upon or
assigned to him by the Board or these By-Laws, but who shall not
by reason of performing and executing these duties and powers be
deemed an officer or employee of the Corporation.

Section 13. Organization. The Chairman of the Board,
if one has been selected and is present, shall preside at every
meeting of the Board of Directors. In the absence or inability
of the Chairman of the Board to preside at a meeting, the
President, or, in his absence or inability to act, another
Director chosen by a majority of the Directors present, shall act
as chairman of the meeting and preside at it. The Secretary (or,
in his absence or inability to act, any person appointed by the
Chairman) shall act as secretary of the meeting and keep the
minutes thereof.

Section 14. Written Consent of Directors in Lieu of a
Meeting. Any action required or permitted to be taken at any
meeting of the Board of Directors or of any committee thereof,
except actions with respect to which a vote in person is required
by law, may be taken without a meeting if all members of the
Board or committee, as the case may be, consent thereto in
writing, and the writing or writings are filed with the minutes
of the proceedings of the Board or committee.

Section 15. Meeting by Conference Telephone. Members
of the Board of Directors may participate in a meeting by means
of a conference telephone or similar communications equipment if
all persons participating in the meeting can hear each other at
the same time, except that in such a meeting the Board cannot
perform any action with respect to which a vote in person is
required by law.

Section 16. Compensation. Any Director, whether or
not he is a salaried officer, employee or agent of the
Corporation, may be compensated for his services as Director or
as a member of a committee, or as Chairman of the Board or
chairman of a committee, and in addition may be reimbursed for

7
<PAGE>

transportation and other expenses, all in such manner and amounts
as the Directors may from time to time determine.

Section 17. Investment Policies. It shall be the duty
of the Board of Directors to ensure that the purchase, sale,
retention and disposal of portfolio securities and the other
investment practices of the Corporation are at all times
consistent with the investment policies and restrictions with
respect to securities investments and otherwise of the
Corporation, as recited in the current Prospectus of the
Corporation filed from time to time with the Securities and
Exchange Commission and as required by the 1940 Act. The Board,
however, may delegate the duty of management of the assets and
the administration of its day-to-day operations to an individual
or corporate management company or investment adviser pursuant to
a written contract or contracts which have obtained the requisite
approvals, including the requisite approvals of renewals thereof,
of the Board of Directors or the shareholders of the Corporation
in accordance with the provisions of the 1940 Act.

ARTICLE IV

Committees

Section 1. Committees of the Board. The Board may, by
resolution adopted by a majority of the entire Board, designate
an Executive Committee, Compensation Committee, Audit Committee
and Nomination Committee, each of which shall consist of two or
more of the Directors of the Corporation, which committee shall
have and may exercise all the powers and authority of the Board
with respect to all matters other than as set forth in Section 3
of this Article.

Section 2. Other Committees of the Board. The Board
of Directors may from time to time, by resolution adopted by a
majority of the whole Board, designate one or more other
committees of the Board, each such committee to consist of two or
more Directors and to have such powers and duties as the Board of
Directors may, by resolution, prescribe.

Section 3. Limitation of Committee Powers. No
committee of the Board shall have power or authority to:

(a) recommend to shareholders any action
requiring authorization of shareholders pursuant to statute or
the Articles of Incorporation;

(b) approve or terminate any contract with an
investment adviser or principal underwriter, as such terms are

8
<PAGE>

defined in the 1940 Act, or take any other action required to be
taken by the Board of Directors by the 1940 Act;

(d) declare dividends or other distributions or
issue capital shares of the Corporation; and

(e) approve any merger or share exchange which
does not require shareholder approval.

Section 4. General. One-third, but not less than two
members, of the members of any committee shall be present in
person at any meeting of such committee in order to constitute a
quorum for the transaction of business at such meeting, and the
act of a majority present shall be the act of such committee.
The Board may designate a chairman of any committee and such
chairman or any two members of any committee may fix the time and
place of its meetings unless the Board shall otherwise provide.
In the absence of disqualification of any member or any
committee, the member or members thereof present at any meeting
and not disqualified from voting, whether or not he or they
constitute a quorum, may unanimously appoint another member of
the Board of Directors to act at the meeting in the place of any
such absent or disqualified member. The Board shall have the
power at any time to change the membership of any committee, to
fill all vacancies, to designate alternate members, to replace
any absent or disqualified member, or to dissolve any such
committee.

All committees shall keep written minutes of their
proceedings and shall report such minutes to the Board. All such
proceedings shall be subject to revision or alteration by the
Board; provided, however, that third parties shall not be
prejudiced by such revision or alteration.

ARTICLE V

Officers, Agents and Employees

Section 1. Number and Qualifications. The officers of
the Corporation shall be a President, a Secretary and a
Treasurer, each of whom shall be elected by the Board of
Directors. The Board of Directors may elect or appoint one or
more Vice Presidents and may also appoint such other officers,
agents and employees as it may deem necessary or proper. Any two
or more offices may be held by the same person, except the
offices of President and Vice President, but no officer shall
execute, acknowledge or verify any instrument in more than one

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<PAGE>

capacity. The Board may from time to time elect or appoint, or
delegate to the President the power to appoint, such other
officers (including one or more Assistant Vice Presidents, one or
more Assistant Treasurers and one or more Assistant Secretaries)
and such agents, as may be necessary or desirable for the
business of the Corporation. Such other officers and agents
shall have such duties and shall hold their offices for such
terms as may be prescribed by the Board or by the appointing
authority.

Section 2. Resignations. Any officer of the
Corporation may resign at any time by giving written notice of
his resignation to the Board, the Chairman of the Board, the
President or the Secretary. Any such resignation shall take
effect at the time specified therein or, if the time when it
shall become effective shall not be specified therein,
immediately upon its receipt; and, unless otherwise specified
therein, the acceptance of such resignation shall not be
necessary to make it effective.

Section 3. Removal of Officer, Agent or Employee. Any
officer, agent or employee of the Corporation may be removed by
the Board of Directors with or without cause at any time, and the
Board may delegate such power of removal as to agents and
employees not elected or appointed by the Board of Directors.
Such removal shall be without prejudice to such person's contract
rights, if any, but the appointment of any person as an officer,
agent or employee of the Corporation shall not of itself create
contract rights.

Section 4. Vacancies. A vacancy in any office,
whether arising from death, resignation, removal or any other
cause, may be filled for the unexpired portion of the term of the
office which shall be vacant, in the manner prescribed in these
By-Laws for the regular election or appointment to such office.

Section 5. Compensation. The compensation of the
officers of the Corporation shall be fixed by the Board of
Directors, but this power may be delegated to any committee or to
any officer in respect of other officers under his control. No
officer shall be precluded from receiving such compensation by
reason of the fact that he is also a Director of the Corporation.

Section 6. Bonds or other Security. If required by the
Board, any officer, agent or employee of the Corporation shall
give a bond or other security for the faithful performance of his
duties, in such amount and with such surety or sureties as the
Board may require.

Section 7. President. The President shall be the
chief executive officer of the Corporation. In the absence of
the Chairman of the Board (or if there be none), the President

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<PAGE>

shall preside at all meetings of the shareholders and of the
Board of Directors. He shall have, subject to the control of the
Board of Directors, general charge of the business and affairs of
the Corporation. He may employ and discharge employees and
agents of the Corporation, except such as shall be appointed by
the Board, and he may delegate these powers.

Section 8. The Vice Presidents. In the absence or
disability of the President, or when so directed by the
President, any Vice President designated by the Board of
Directors may perform any or all of the duties of the President,
and, when so acting, shall have all the powers of, and be subject
to all the restrictions upon, the President; provided, however,
that no Vice President shall act as a member of or as chairman of
any committee of which the President is a member or chairman by
designation of ex officio, except when designated by the Board.
Each Vice President shall perform such other duties as from time
to time may be conferred upon or assigned to him by the Board or
the President.

Section 9. Treasurer. The Treasurer shall:

(a) have charge and custody of, and be
responsible for, all the funds and securities of the Corporation,
except those which the Corporation has placed in the custody of a
bank or trust company or member of a national securities exchange
(as that term is defined in the Securities Exchange Act of 1934)
pursuant to a written agreement designating such bank or trust
company or member of a national securities exchange as custodian
of the property of the Corporation;

(b) keep full and accurate accounts of receipts
and disbursements in books belonging to the Corporation;

(d) receive, and give receipts for, moneys due
and payable to the Corporation from any source whatsoever;

(e) disburse the funds of the Corporation and
supervise the investment of its funds as ordered or authorized by
the Board, taking proper vouchers therefor; and

(f) in general, perform all the duties incident
to the office of Treasurer and such other duties as from time to
time may be assigned to him by the Board or the President.

Section 10. Assistant Treasurers. In the absence or
disability of the Treasurer, or when so directed by the
Treasurer, any Assistant Treasurer may perform any or all of the
duties of the Treasurer, and, when so acting, shall have all the

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<PAGE>

powers of, and be subject to all the restrictions upon, the
Treasurer. Each Assistant Treasurer shall perform all such other
duties as from time to time may be conferred upon or assigned to
him by the Board of Directors, the President or the Treasurer.

Section 11. Secretary. The Secretary shall:

(a) keep or cause to be kept in one or more books
provided for the purpose, the minutes of all meetings of the
Board, the committees of the Board and the shareholders;

(b) see that all notices are duly given in
accordance with the provisions of these By-Laws and as required
by law;

(c) be custodian of the records and the seal of
the Corporation and affix and attest the seal to all share
certificates of the Corporation (unless the seal of the
Corporation on such certificates shall be a facsimile, as
hereinafter provided) and affix and attest the seal to all other
documents to be executed on behalf of the Corporation under its
seal;

(d) see that the books, reports, statements,
certificates and other documents and records required by law to
be kept and filed are properly kept and filed; and

(e) in general, perform all the duties incident
to the office of Secretary and such other duties as from time to
time may be assigned to him by the Board or the President.

Section 12. Assistant Secretaries. In the absence or
disability of the Secretary, or when so directed by the
Secretary, any Assistant Secretary may perform any or all of the
duties of the Secretary, and, when so acting, shall have all the
powers of, and be subject to all restrictions upon, the
Secretary. Each Assistant Secretary shall perform such other
duties as from time to time may be conferred upon or assigned to
him by the Board of Directors, the President or the Secretary.

Section 13. Delegation of Duties. In case of the
absence of any officer of the Corporation, or for any other
reason that the Board may deem sufficient, the Board may confer
for the time being the powers or duties, or any of them, of such
officer upon any other officer or upon any Director.

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<PAGE>

ARTICLE VI

Capital Stock

Section 1. Stock Certificates. The Board may
authorize the issuance of some or all of the shares of any or all
classes or series of the common stock of the Corporation with or
without certificates. The rights of holders of each class or
series of common stock of the Corporation to receive or not to
receive certificates shall be set forth in articles
supplementary. With respect to shares whose issuance the Board
has authorized with certificates, the Board shall determine the
conditions under which a holder of such shares shall be entitled
to have a certificate or certificates. A shareholder's
certificate or certificates shall be in such form as shall be
approved by the Board, and shall represent the number of such
shares of the Corporation owned by him, provided, however, that
certificates for fractional shares will not be delivered in any
case. The certificates representing shares shall be signed by
the President, a Vice President, or the Chairman of the Board,
and countersigned by the Secretary or an Assistant Secretary or
the Treasurer or an Assistant Treasurer and sealed with the seal
of the Corporation. Any or all of the signatures or the seal on
the certificate may be a facsimile. In case any officer,
transfer agent or registrar who has signed or whose facsimile
signature has been placed upon a certificate shall have ceased to
be such officer, transfer agent or registrar before such
certificate shall be issued, it may be issued by the Corporation
with the same effect as if such officer, transfer agent or
registrar were still in office at the date of issue.

Section 2. Rights of Inspection. There shall be kept
at the principal executive office, which shall be available for
inspection during usual business hours in accordance with the
General Laws of the State of Maryland, the following corporate
documents: (a) By-Laws, (b) minutes of proceedings of the
shareholders, (c) annual statements of affairs, and (d) voting
trust agreements, if any. One or more persons who together are
and for at least six months have been shareholders of record of
at least five percent of the outstanding shares of any class may
inspect and copy during usual business hours the Corporation's
books of account and share ledger in accordance with the General
Laws of the State of Maryland.

Section 3. Transfer of Shares. Transfers of shares of
the Corporation shall be made on the share records of the
Corporation at the direction of the person named on the
Corporation's books or named in the certificate or certificates
for such shares (if issued) only by the registered holder
thereof, or by his attorney authorized by power of attorney duly

13
<PAGE>

executed and filed with the Secretary or with a transfer agent or
transfer clerk, and on surrender of the certificate or
certificates, if issued, for such shares properly endorsed or
accompanied by a duly executed share transfer power and the
payment of all taxes thereon. Except as otherwise provided by
law, the Corporation shall be entitled to recognize the exclusive
right of a person in whose name any share or shares stand on the
record of shareholders as the owner of such share or shares for
all purposes, including, without limitation, the rights to
receive dividends or other distributions, and to vote as such
owner, and the Corporation shall not be bound to recognize any
equitable or legal claim to or interest in any such share or
shares on the part of any other person.

Section 4. Transfer Agents and Registrars. The
Corporation may have one or more Transfer Agents and one or more
Registrars of its shares, whose respective duties the Board of
Directors may, from time to time, define. No certificate of
share shall be valid until countersigned by a Transfer Agent, if
the Corporation shall have a Transfer Agent or until registered
by a Registrar, if the Corporation shall have a Registrar. The
duties of Transfer Agent and Registrar may be combined.

Section 5. Record Date and Closing of Transfer Books.
The Board of Directors may set a record date for the purpose of
making any proper determination with respect to shareholders,
including which shareholders are entitled to notice of a meeting,
vote at a meeting (or any adjournment thereof), receive a
dividend, or be allotted or exercise other rights. The record
date may not be more than ninety (90) days before the date on
which the action requiring the determination will be taken; and,
in the case of a meeting of shareholders, the record date shall
be at least ten (10) days before the date of the meeting. The
Board of Directors shall not close the books of the Corporation
against transfers of shares during the whole or any part of such
period.

Section 6. Regulations. The Board may make such
additional rules and regulations, not inconsistent with these By-
Laws, as it may deem expedient concerning the issue, transfer and
registration of certificates for shares of the Corporation.

Section 7. Lost, Stolen, Destroyed or Mutilated
Certificates. The holder of any certificate representing shares
of the Corporation shall immediately notify the Corporation of
any loss, theft, destruction or mutilation of such certificate,
and the Corporation may issue a new certificate of share in the
place of any certificate theretofore issued by it which the owner
thereof shall allege to have been lost, stolen or destroyed or
which shall have been mutilated, and the Board may, in its
discretion, require such owner or his legal representatives to
give to the Corporation a bond in such sum, limited or unlimited,

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<PAGE>

and in such form and with such surety or sureties, as the Board
in its absolute discretion shall determine, to indemnify the
Corporation against any claim that may be made against it on
account of the alleged loss or destruction of any such
certificate, or issuance of a new certificate. Anything herein
to the contrary notwithstanding, the Board, in its absolute
discretion, may refuse to issue any such new certificate, except
pursuant to legal proceedings under the laws of the State of
Maryland.

Section 8. Stock Ledgers. The Corporation shall not
be required to keep original or duplicate share ledgers at its
principal office in the City of Baltimore, Maryland, but share
ledgers shall be kept at the respective offices of the Transfer
Agents of the Corporation's capital shares.

ARTICLE VII

Seal

The Board of Directors shall provide a suitable seal,
bearing the name of the Corporation, which shall be in the charge
of the Secretary. The Board of Directors may authorize one or
more duplicate seals and provide for the custody thereof. If the
Corporation is required to place its corporate seal on a
document, it is sufficient to meet any requirement of any law,
rule, or regulation relating to a corporate seal to place the
word "Seal" adjacent to the signature of the person authorized to
sign the document on behalf of the Corporation.

ARTICLE VIII

Fiscal Year

The fiscal year of the Corporation shall be determined
by resolution of the Board of Directors.

ARTICLE IX

Depositories and Custodians

Section 1. Depositories. The funds of the Corporation
shall be deposited with such banks or other depositories as the
Board of Directors of the Corporation may from time to time
determine.

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<PAGE>

Section 2. Custodians. All securities and other
investments shall be deposited in the safekeeping of such banks
or other companies as the Board of Directors of the Corporation
may from time to time determine. Every arrangement entered into
with any bank or other company for the safekeeping of the
securities and investments of the Corporation shall contain
provisions complying with the 1940 Act, and the general rules and
regulations thereunder.

ARTICLE X

Execution of Instruments

Section 1. Checks, Notes, Drafts, etc. Checks, notes,
drafts, acceptances, bills of exchange and other orders or
obligations for the payment of money shall be signed by such
officer or officers or person or persons as the Board of
Directors by resolution shall from time to time designate.

Section 2. Sale or Transfer of Securities. Money
market instruments, bonds or other securities at any time owned
by the Corporation may be held on behalf of the Corporation or
sold, transferred or otherwise disposed of subject to any limits
imposed by these By-Laws, and pursuant to authorization by the
Board and, when so authorized to be held on behalf of the
Corporation or sold, transferred or otherwise disposed of, may be
transferred from the name of the Corporation by the signature of
the President or a Vice President or the Treasurer or pursuant to
any procedure approved by the Board of Directors, subject to
applicable law.

ARTICLE XI

Independent Public Accountants

The firm of independent public accountants which shall
sign or certify the financial statements of the Corporation which
are filed with the Securities and Exchange Commission shall be
selected annually by the Board of Directors and ratified by the
Board of Directors or the shareholders in accordance with the
provisions of the 1940 Act.

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<PAGE>

ARTICLE XII

Annual Statements

The books of account of the Corporation shall be
examined by an independent firm of public accountants at the
close of each annual period of the Corporation and at such other
times as may be directed by the Board. A report to the
shareholders based upon each such examination shall be mailed to
each shareholder of the Corporation of record on such date with
respect to each report as may be determined by the Board, at his
address as the same appears on the books of the Corporation.
Such annual statement shall also be placed on file at the
Corporation's principal office in the State of Maryland. Each
such report shall show the assets and liabilities of the
Corporation as of the close of the annual or semiannual period
covered by the report and the securities in which the funds of
the Corporation were then invested. Such report shall also show
the Corporation's income and expenses for the period from the end
of the Corporation's preceding fiscal year to the close of the
annual or semiannual period covered by the report and any other
information required by the 1940 Act, and shall set forth such
other matters as the Board or such firm of independent public
accountants shall determine.

ARTICLE XIII

Indemnification of Directors and Officers

Section 1. Indemnification. The Corporation shall
indemnify its directors to the fullest extent that
indemnification of directors is permitted by the Maryland General
Corporation Law. The Corporation shall indemnify its officers to
the same extent as its directors and to such further extent as is
consistent with law. The Corporation shall indemnify its
directors and officers who while serving as directors or officers
also serve at the request of the Corporation as a director,
officer, partner, trustee, employee, agent or fiduciary of
another corporation, partnership, joint venture, trust, other
enterprise or employee benefit plan to the fullest extent
consistent with law. This Section shall not protect any such
person against any liability to the Corporation or any
shareholder thereof to which such person would otherwise be
subject by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the
conduct of his office.

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<PAGE>

Section 2. Advances. Any current or former director
or officer of the Corporation claiming indemnification within the
scope of this Article XIII shall be entitled to advances from the
Corporation for payment of the reasonable expenses incurred by
him in connection with proceedings to which he is a party in the
manner and to the full extent permissible under the Maryland
General Corporation Law, the Securities Act of 1933 (the "1933
Act") and the 1940 Act, as such statutes are now or hereafter in
force.

Section 3. Procedure. On the request of any current
or former director or officer requesting indemnification or an
advance under this Article XIII, the Board of Directors shall
determine, or cause to be determined, in a manner consistent with
the Maryland General Corporation Law, the 1933 Act and the 1940
Act, as such statutes are now or hereafter in force, whether the
standards required by this Article XIII have been met.

Section 4. Other Rights. The indemnification provided
by this Article XIII shall not be deemed exclusive of any other
right, in respect of indemnification or otherwise, to which those
seeking such indemnification may be entitled under any insurance
or other agreement, vote of shareholders or disinterested
directors or otherwise, both as to action by a director or
officer of the Corporation in his official capacity and as to
action by such person in another capacity while holding such
office or position, and shall continue as to a person who has
ceased to be a director or officer and shall inure to the benefit
of the heirs, executors and administrators of such a person.

ARTICLE XIV

Amendments

These By-Laws or any of them may be amended, altered or
repealed at any annual meeting of the shareholders or at any
special meeting of the shareholders at which a quorum is present
or represented, provided that notice of the proposed amendment,
alteration or repeal be contained in the notice of such special
meeting. These By-Laws may also be amended, altered or repealed
by the affirmative vote of a majority of the Board of Directors
at any regular or special meeting of the Board of Directors.

Exhibit 5(A)

INVESTMENT ADVISORY AGREEMENT

AGREEMENT made this 3rd day of July, 1989 by and between PCS
Cash Fund, Inc., a Maryland corporation (the "Fund") and Morgan
Stanley Asset Management Inc., a Delaware corporation (the
"Adviser").

1. Duties of Adviser. The Fund hereby appoints the
Adviser to act as investment adviser to the Fund's PCS Money
Market Portfolio, (the "Portfolio"), for the period and on such
terms set forth in this Agreement. The Fund employs the Adviser
to manage the investment and reinvestment of the assets of the
Portfolio, to continuously review, supervise and administer the
investment program of the Portfolio, to determine in its
discretion the securities to be purchased or sold and the portion
of such Portfolio's assets to be held uninvested, to provide the
Fund with records concerning the Adviser's activities which the
Fund is required to maintain, and to render regular reports to
the Fund's officers and Board of Directors concerning the
Adviser's charge of the foregoing responsibilities. The Adviser
shall discharge the foregoing responsibilities subject to the
control of the officers and the Board of Directors of the Fund,
and in compliance with the objectives, policies and limitations
set forth in the Fund's prospectus and applicable laws and
regulations. The Adviser accepts such employment and agrees to
render the services and to provide, at its own expense, the
office space, furnishings and equipment and the personnel
required by it to perform the services on the terms and for the
compensation provided herein.

2. Portfolio Transactions. The Adviser is authorized to
select the brokers or dealers that will execute the purchases and
sales of securities for the Portfolio and is directed to use its
best efforts to obtain the best available price and most
favorable execution, except as prescribed herein. Unless and
until otherwise directed by the Board of Directors of the Fund,
the Adviser may also be authorized to effect individual
securities transactions at commission rates in excess of the
minimum commission rates available, if the Adviser determines in
good faith that such amount of commission is reasonable in
relation to the value of the brokerage or research services
provided by such broker or dealer, viewed in terms of either that
particular transaction or the Adviser's overall responsibilities
with respect to the Portfolio. The execution of such
transactions shall not be deemed to represent an unlawful act or
breach of any duty created by this Agreement or otherwise. The
Adviser will promptly communicate to the officers and Directors
of the Fund such information relating to portfolio transactions
as they may reasonably request.

3. Expenses. If the expenses borne by the Portfolio in
any fiscal year exceed the most restrictive applicable expense

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<PAGE>

limitations imposed by the securities regulations of any state in
which the Shares of the Portfolio are registered or qualified for
sale to the public, the Investment Adviser shall reimburse the
Portfolio for any excess up to the amount of the fees payable by
the Portfolio to it during such fiscal year pursuant to Paragraph
4 hereof; provided, however, that notwithstanding the foregoing,
the Investment Adviser shall reimburse the Portfolio for such
excess expenses regardless of the amount of such fees payable to
it during such fiscal year to the extent that the securities
regulations of any state in which the Shares are registered or
qualified for sale so require.

4. Compensation of the Adviser. For the services to be
rendered by the Adviser as provided in Section 1 of this
Agreement, the Fund shall pay to the Adviser out of the assets of
the Portfolio an advisory fee computed daily and payable monthly
at the annual rate of .45% of the first $250 million of the
Portfolio's average daily net assets, .40% of the next $250
million of the Portfolio's average daily net assets, and .35% of
the Portfolio's average daily net assets in excess of $500
million.

5. Other Services. At the request of the Fund, the
Adviser, in its discretion may make available to the Fund office
facilities, equipment, personnel and other services. Such office
facilities, equipment, personnel and services shall be provided
for or rendered by the Adviser and billed to the Fund at the
Adviser's cost.

6. Reports. The Fund and the Adviser agree to furnish to
each other current prospectuses, proxy statements, reports to
shareholders, certified copies of their financial statements, and
such other information with regard to the affairs as each may
reasonably request.

7. Status of Adviser. The services of the Adviser to the
Fund are not to be deemed exclusive, and the Adviser shall be
free to render similar services to others.

8. Liability of Adviser. In the absence of (i) willful
misfeasance, bad faith or gross negligence on the part of the
Adviser in performance of its obligations and duties hereunder,
(ii) reckless disregard by the Adviser of its obligations and
duties hereunder, or (iii) a breach of fiduciary duty with
respect to the receipt of compensation for services (in which
case any award of damages shall be limited to the period and the
amount set forth in section 36(b)(3) of the Investment Company
Act of 1940 ("1940 Act"), the Adviser shall not be subject to any
liability whatsoever to the Fund, or to any shareholder of the
fund, for any error or judgment, mistake of law or any other act
or omission in the course of, or connected with rendering
services hereunder including, without limitation, for the losses

2
<PAGE>

that may be sustained in connection with the purchase, holding,
redemption or sale of any security on behalf of any Portfolio of
the fund.

9. Permissible Interest. Subject to and in accordance
with the Articles of Incorporation of the fund and the Articles
of Incorporation of the Adviser, Directors, officers, agents and
shareholders of the Fund are or may be interest in the Adviser
(or any successor thereof) as Directors, officers, agents,
shareholders or otherwise; Directors, officers, agents and
shareholders of the Adviser are or may be interested in the Fund
as Directors, officers, shareholders or otherwise; and the
Adviser (or any successor) is or may be interested in the Fund as
a shareholder or otherwise; and that the effect of any such
interrelationships shall be governed by said Articles of
Incorporation and the provisions of the 1940 Act.

10. Duration and Termination. This Agreement, unless
sooner terminated as provided herein, shall continue until the
earlier of July 3, 1991 or the date of the first annual or
special meeting of the shareholders of the Portfolio and, if
approved by a majority of the outstanding voting securities of
the Portfolio, thereafter shall continue for periods of one year
so long as such continuance is specifically approved at least
annually (a) by the vote of a majority of those members of the
Board of Directors of the Fund who are not parties to this
Agreement or interested persons of any such party, cast in person
at a meeting called for the purpose of voting on such approval,
and (b) by the Board of Directors of the Fund or by vote of a
majority of the outstanding voting securities of the Portfolio;
provided however, that if the shareholders of the Portfolio fail
to approve the Agreement as provided herein, the Adviser may
continue to serve in such capacity in the manner and to the
extent permitted by the 1940 Act and Rules thereunder. This
Agreement may be terminated by the Portfolio at any time, without
the payment of any penalty, by vote of a majority of the
outstanding voting securities of the Portfolio on 60 days'
written notice to the Adviser. This Agreement may be terminated
by the Adviser at any time, without the payment of any penalty,
upon 90 days' written notice to the Fund. This agreement will
automatically and immediately terminate in the event of its
assignment, provided that an assignment to a corporate successor
which does not result in a change of actual management or control
of the Adviser's business shall not be deemed to be an assignment
for the purposes of this Agreement. Any notice under this
Agreement shall be given in writing, addressed and delivered or
mailed postpaid, to the other party at any office of such party
and shall be deemed given when received by the addressee.

As used in this Section 10, the terms "assignment"
"interested persons", and "a vote of a majority of the
outstanding voting securities" shall have the respective meanings

3
<PAGE>

set forth in Section 2(a)(4), Section 2(a)(19) and Section
2(a)(42) of the 1940 Act.

11. Amendment of Agreement. This Agreement may be amended
by mutual consent, but the consent of the Fund must be approved
(a) by vote of a majority of those members of the Board of
Directors of the Fund who are not parties to this Agreement or
interested persons of any such party, cast in person at a meeting
called for the purpose of voting on such amendment, and (b) by
vote of a majority of the outstanding voting securities of the
Portfolio.

12. Severability. If the provisions of this Agreement
shall be held or made invalid by a court decision, statute, rule
or otherwise, the remainder of this Agreement shall not be
affected thereby.

13. Applicable Law. This Agreement shall be construed in
accordance with the laws of the State of New York, provided,
however, that nothing herein shall be construed as being
inconsistent with the 1940 Act.

14. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an
original.

IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their officers thereunto duly
authorized as of the day and year first written above.

MORGAN STANLEY ASSET PCS CASH FUND, INC.
MANAGEMENT INC.

By: /s/ Peter A. Nadosy /s/ Warren J. Olsen
Peter A. Nadosy Warren J. Olsen

Exhibit 5(B)

INVESTMENT ADVISORY AGREEMENT

AGREEMENT made this 3rd day of July, 1989 by and
between PCS Cash Fund, Inc., a Maryland corporation (the "Fund")
and Morgan Stanley Asset Management Inc., a Delaware corporation
(the "Adviser").

1. Duties of Adviser. The Fund hereby appoints the
Adviser to act as investment adviser to the Fund's PCS Tax-Free
Money Market Portfolio, (the "Portfolio"), for the period and on
such terms set forth in this Agreement. The Fund employs the
Adviser to manage the investment and reinvestment of the assets
of the Portfolio, to continuously review, supervise and
administer the investment program of the Portfolio, to determine
in its discretion the securities to be purchased or sold and the
portion of such Portfolio's assets to be held uninvested, to
provide the Fund with records concerning the Adviser's activities
which the Fund is required to maintain, and to render regular
reports to the Fund's officers and Board of Directors concerning
the Adviser's charge of the foregoing responsibilities. The
Adviser shall discharge the foregoing responsibilities subject to
the control of the officers and the Board of Directors of the
Fund, and in compliance with the objectives, policies and
limitations set forth in the Fund's prospectus and applicable
laws and regulations. The Adviser accepts such employment and
agrees to render the services and to provide, at its own expense,
the office space, furnishings and equipment and the personnel
required by it to perform the services on the terms and for the
compensation provided herein.

2. Portfolio Transactions. The Adviser is authorized
to select the brokers or dealers that will execute the purchases
and sales of securities for the Portfolio and is directed to use
its best efforts to obtain the best available price and most
favorable execution, except as prescribed herein. Unless and
until otherwise directed by the Board of Directors of the Fund,
the Adviser may also be authorized to effect individual
securities transactions at commission rates in excess of the
minimum commission rates available, if the Adviser determines in
good faith that such amount of commission is reasonable in
relation to the value of the brokerage or research services
provided by such broker or dealer, viewed in terms of either that
particular transaction or the Adviser's overall responsibilities
with respect to the Portfolio. The execution of such
transactions shall not be deemed to represent an unlawful act or
breach of any duty created by this Agreement or otherwise. The
Adviser will promptly communicate to the officers and Directors
of the Fund such information relating to portfolio transactions
as they may reasonably request.

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<PAGE>

3. Expenses. If the expenses borne by the Portfolio
in any fiscal year exceed the most restrictive applicable expense
limitations imposed by the securities regulations of any state in
which the Shares of the Portfolio are registered or qualified for
sale to the public, the Investment Adviser shall reimburse the
Portfolio for any excess up to the amount of the fees payable by
the Portfolio to it during such fiscal year pursuant to Paragraph
4 hereof; provided, however, that notwithstanding the foregoing,
the Investment Adviser shall reimburse the Portfolio for such
excess expenses regardless of the amount of such fees payable to
it during such fiscal year to the extent that the securities
regulations of any state in which the Shares are registered or
qualified for sale so require.

4. Compensation of the Adviser. For the services to
be rendered by the Adviser as provided in Section 1 of this
Agreement, the Fund shall pay to the Adviser out of the assets of
the Portfolio an advisory fee computed daily and payable monthly
at the annual rate of .45% of the first $250 million of the
Portfolio's average daily net assets, .40% of the next $250
million of the Portfolio's average daily net assets, and .35% of
the Portfolio's average daily net assets in excess of $500
million.

6. Reports. The Fund and the Adviser agree to
furnish to each other current prospectuses, proxy statements,
reports to shareholders, certified copies of their financial
statements, and such other information with regard to the affairs
as each may reasonably request.

7. Status of Adviser. The services of the Adviser to
the Fund are not to be deemed exclusive, and the Adviser shall be
free to render similar services to others.

8. Liability of Adviser. In the absence of (i)
willful misfeasance, bad faith or gross negligence on the part of
the Adviser in performance of its obligations and duties
hereunder, (ii) reckless disregard by the Adviser of its
obligations and duties hereunder, or (iii) a breach of fiduciary
duty with respect to the receipt of compensation for services (in
which case any award of damages shall be limited to the period
and the amount set forth in Section 36(b)(3) of the Investment
Company Act of 1940 ("1940 Act"), the Adviser shall not: be
subject to any liability whatsoever to the Fund, or to any
shareholder of the fund, for any error or judgment, mistake of

2
<PAGE>

law or any other act or omission in the course of, or connected
with rendering services hereunder including, without limitation,
for the losses that may be sustained in connection with the
purchase, holding, redemption or sale of any security on behalf
of any Portfolio of the fund.

9. Permissible Interest. Subject to and in
accordance with the Articles of Incorporation of the fund and the
Articles of Incorporation of the Adviser, Directors, officers,
agents and shareholders of the Fund are or may be interest in the
Adviser (or any successor thereof) as Directors, officers,
agents, shareholders or otherwise; Directors, officers, agents
and shareholders of the Adviser are or may be interested in the
Fund as Directors, officers, shareholders or otherwise; and the
Adviser (or any successor) is or may be interested in the Fund as
a shareholder or otherwise; and that the effect of any such
interrelationships shall be governed by said Articles of
Incorporation and the provisions of the 1940 Act.

10. Duration and Termination. This Agreement, unless
sooner terminated as provided herein, shall continue until the
earlier of July 3, 1991 or the date of the first annual or
special meeting of the shareholders of the Portfolio and, if
approved by a majority of the outstanding voting securities of
the Portfolio, thereafter shall continue for periods of one year
so long as such continuance is specifically approved at least
annually (a) by the vote of a majority of those members of the
Board of Directors of the fund who are not parties to this
Agreement or interested persons of any such party, cast in person
at a meeting called for the purpose of voting on such approval,
and (b) by the Board of Directors of the Fund or by vote of a
majority of the outstanding voting securities of the Portfolio;
provided however, that if the shareholders of the Portfolio fail
to approve the Agreement as provided herein, the Adviser may
continue to serve in such capacity in the manner and to the
extent permitted by the 1940 Act and Rules thereunder. This
Agreement may be terminated by the Portfolio at any time, without
the payment of any penalty, by vote of a majority of the entire
Board of Directors of the Fund or by vote of a majority of the
outstanding voting securities of the Portfolio on 60 days'
written notice to the Adviser. This Agreement may be terminated
by the Adviser at any time, without the payment of any penalty,
upon 90 days' written notice to the Fund. This agreement will
automatically and immediately terminate in the event of its
assignment, provided that an assignment to a corporate successor
to all or substantially all of the Adviser's business or to a
wholly-owned subsidiary of such corporate successor which does
not result in a change of actual management or control of the
Adviser's business shall not be deemed to be an assignment for
the purposes of this Agreement. Any notice under this Agreement
shall be given in writing, addressed and delivered or mailed

3
<PAGE>

postpaid, to the other party at any office of such party and
shall be deemed given when received by the addressee.

As used in this Section 10, the terms "assignment,"
"interested persons", and "a vote of a majority of the
outstanding voting securities" shall have the respective meanings
set forth in Section 2(a)(4), Section 2(a)(19) and Section
2(a)(42) of the 1940 Act.

11. Amendment of Agreement. This Agreement may be
amended by mutual consent, but the consent of the Fund must be
approved (a) by vote of a majority of those members of the Board
of Directors of the Fund who are not parties to this Agreement or
interested persons of any such party, cast in person at a meeting
called for the purpose of voting on such amendment, and (b) by
vote of a majority of the outstanding voting securities of the
Portfolio.

12. Severability. If any provisions of this Agreement
shall be held or made invalid by a court decision, statute, rule
or otherwise, the remainder of this Agreement shall not be
affected thereby.

13. Applicable Law. This Agreement shall be construed
in accordance with the laws of the State of New York, provided,
however, that nothing herein shall be construed as being incon-
sistent with the 1940 Act.

14. Counterparts. This Agreement may be executed in
one or more counterparts, each of which shall be deemed to be an
original.

IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their officers thereunto duly
authorized as of the day and year first written above.

MORGAN STANLEY ASSET PCS CASH FUND, INC.
MANAGEMENT INC.

By: /s/ Peter A. Nadosy By: /s/ Warren J. Olsen
Peter A. Nadosy Warren J. Olsen

Exhibit 5(C)

INVESTMENT ADVISORY AGREEMENT

AGREEMENT made this 3rd day of July, 1989 by and
between PCS Cash Fund, Inc., a Maryland corporation (the "Fund")
and Morgan Stanley Asset Management Inc., a Delaware corporation
(the "Adviser").

1. Duties of Adviser. The Fund hereby appoints the
Adviser to act as investment adviser to the Fund's PCS Government
Obligations Money Market Portfolio, (the "Portfolio"), for the
period and on such terms set forth in this Agreement. The Fund
employs the Adviser to manage the investment and reinvestment of
the assets of the Portfolio, to continuously review, supervise
and administer the investment program of the Portfolio, to
determine in its discretion the securities to be purchased or
sold and the portion of such Portfolio's assets to be held
uninvested, to provide the Fund with records concerning the
Adviser's activities which the Fund is required to maintain, and
to render regular reports to the Fund's officers and Board of
Directors concerning the Adviser's charge of the foregoing
responsibilities. The Adviser shall discharge the foregoing
responsibilities subject to the control of the officers and the
Board of Directors of the Fund, and in compliance with the
objectives, policies and limitations set forth in the Fund's
prospectus and applicable laws and regulations. The Adviser
accepts such employment and agrees to render the services and to
provide, at its own expense, the office space, furnishings and
equipment and the personnel required by it to perform the
services on the terms and for the compensation provided herein.

2. Portfolio Transactions. The Adviser is authorized
to select the brokers or dealers that will execute the purchases
and sales of securities for the Portfolio and is directed to use
its best efforts to obtain the best available price and most
favorable execution, except as prescribed herein. Unless and
until otherwise directed by the Board of Directors of the Fund,
the Adviser may also be authorized to effect individual
securities transactions at commission rates in excess of the
minimum commission rates available, if the Adviser determines in
good faith that such amount of commission is reasonable in
relation to the value of the brokerage or research services
provided by such broker or dealer, viewed in terms of either that
particular transaction or the Adviser's overall responsibilities
with respect to the Portfolio. The execution of such
transactions shall not be deemed to represent an unlawful act or
breach of any duty created by this Agreement or otherwise. The
Adviser will promptly communicate to the officers and Directors
of the Fund such information relating to portfolio transactions
as they may reasonably request.

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<PAGE>

4. Compensation of the Adviser. For the services to
be rendered by the Adviser as provided in Section 1 of this
Agreement, the Fund shall pay to the Adviser out of the assets of
the Portfolio an advisory fee computed daily and payable monthly
at the annual rate of .45% of the first $250 million of the
Portfolio's average daily net assets, .40% of the next $250
million of the Portfolio's average daily net assets, and .35% of
the Portfolio's average daily net assets in excess of $500
million.

6. Reports. The Fund and the Adviser agree to
furnish to each other current prospectuses, proxy statements,
reports to shareholders, certified copies of their financial
statements, and such other information with regard to the affairs
as each may reasonably request.

7. Status of Adviser. The services of the Adviser to
the Fund are not to be deemed exclusive, and the Adviser shall be
free to render similar services to others.

8. Liability of Adviser. In the absence of (i)
willful misfeasance, bad faith or gross negligence on the part of
the Adviser in performance of its obligations and duties
hereunder, (ii) reckless disregard by the Adviser of its
obligations and duties hereunder, or (iii) a breach of fiduciary
duty with respect to the receipt of compensation for services (in
which case any award of damages shall be limited to the period
and the amount set forth in Section 36(b)(3) of the Investment
Company Act of 1940 ("1940 Act"), the Adviser shall not be
subject to any liability whatsoever to the Fund, or to any
shareholder of the fund, for any error or judgment, mistake of

2
<PAGE>

9. Permissible Interest. Subject to and in
accordance with the Articles of Incorporation of the fund and the
Articles of Incorporation of the Adviser, Directors, officers,
agents and shareholders of the Fund are or may be interest in the
Adviser (or any successor thereof) as Directors, officers,
agents, shareholders or otherwise; Directors, officers, agents
and shareholders of the Adviser are or may be interested in the
Fund as Directors, officers, shareholders or otherwise; and the
Adviser (or any successor) is or may be interested in the Fund as
a shareholder or otherwise; and that the effect of any such
interrelationships shall be governed by said Articles of
Incorporation and the provisions of the 1940 Act.

10. Duration and Termination. This Agreement, unless
sooner terminated as provided herein, shall continue until the
earlier of July 3, 1991 or the date of the first annual or
special meeting of the shareholders of the Portfolio and, if
approved by a majority of the outstanding voting securities of
the Portfolio, thereafter shall continue for periods of one year
so long as such continuance is specifically approved at least
annually (a) by the vote of a majority of those members of the
Board of Directors of the fund who are not parties to this
Agreement or interested persons of any such party, cast in person
at a meeting called for the purpose of voting on such approval,
and (b) by the Board of Directors of the Fund or by vote of a
majority of the outstanding voting securities of the Portfolio;
provided however, that if the shareholders of the Portfolio fail
to approve the Agreement as provided herein, the Adviser may
continue to serve in such capacity in the manner and to the
extent permitted by the 1940 Act and Rules thereunder. This
Agreement may be terminated by the Portfolio at any time, without
the payment of any penalty, by vote of a majority of the entire
Board of Directors of the Fund or by vote of a majority of the
outstanding voting securities of the Portfolio on 60 days'
written notice to the Adviser. This Agreement may be terminated
by the Adviser at any time, without the payment of any penalty,
upon 90 days' written notice to the Fund. This agreement will
automatically and immediately terminate in the event of its
assignment, provided that an assignment to a corporate successor
to all or substantially all of the Adviser's business or to a
wholly-owned subsidiary of such corporate successor which does
not result in a change of actual management or control of the
Adviser's business shall not be deemed to be an assignment for
the purposes of this Agreement. Any notice under this Agreement
shall be given in writing, addressed and delivered or mailed

3
<PAGE>

postpaid, to the other party at any office of such party and
shall be deemed given when received by the addressee.

As used in this Section 10, the terms "assignment",
"interested persons", and "a vote of a majority of the
outstanding voting securities" shall have the respective meanings
set forth in Section 2(a)(4), Section 2(a)(19) and Section
2(a)(42) of the 1940 Act.

11. Amendment of Agreement. This Agreement may be
amended by mutual consent, but the consent of the Fund must be
approved (a) by vote of a majority of those members of the Board
of Directors of the Fund who are not parties to this Agreement or
interested persons of any such party, cast in person at a meeting
called for the purpose of voting on such amendment, and (b) by
vote of a majority of the outstanding voting securities of the
Portfolio.

12. Severability. If any provisions of this Agreement
shall be held or made invalid by a court decision, statute, rule
or otherwise, the remainder of this Agreement shall not be
affected thereby.

13. Applicable Law. This Agreement shall be construed
in accordance with the laws of the State of New York, provided,
however, that nothing herein shall be construed as being
inconsistent with the 1940 Act.

14. Counterparts. This Agreement may be executed in
one or more counterparts, each of which shall be deemed to be an
original.

IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their officers thereunto duly
authorized as of the day and year first written above.

MORGAN STANLEY ASSET PCS CASH FUND, INC.
MANAGEMENT INC.

By: /s/ Peter A. Nadosy By: /s/ Warren J. Olsen
Peter A. Nadosy Warren J. Olsen

Exhibit 6(A)

DISTRIBUTION AGREEMENT

AGREEMENT made this 3rd day of July, 1989, between PCS
CASH FUND, INC. a Maryland Corporation (the "Fund"), and MORGAN
STANLEY & CO. INCORPORATED, a Delaware corporation (the
"Distributor").

W I T N E S S E T H

WHEREAS, the Fund is registered under the Investment
Company Act of 1940, as amended (the "1940 Act"), as a
diversified open-end management investment company and it is in
the interest of the Fund to offer the shares of its PCS Money
Market Portfolio (the "Portfolio") for sale continuously and to
appoint a principal underwriter for the purpose of facilitating
such offers and sales;

WHEREAS, the Fund and the Distributor wish to enter
into an agreement with each other with respect to the continuous
offering of the Portfolio's shares of common stock ("Shares"), to
commence after the effectiveness of its initial registration
statement filed pursuant to the Securities Act of 1933, as
amended (the "1933 Act"), and the 1940 Act.

NOW, THEREFORE, the parties agree as follows:

Section 1. Appointment of the Distributor.

The Fund hereby appoints the Distributor its exclusive
underwriter in connection with the offering and sale of the
Shares on the terms set forth in this Agreement and the
Distributor hereby accepts such appointment and agrees to act
hereunder.

Section 2. Services and Duties of the Distributor.

(a) The Distributor agrees to sell, as agent for
the Fund, from time to time during the term of this Agreement,
Shares upon the terms described in the Prospectus. As used in
this Agreement, the term "Prospectus" shall mean the prospectus
pertaining to the Portfolio included as part of the Fund's
Registration Statement, as such prospectus may be amended or
supplemented from time to time, and the term "Registration
Statement" shall mean the Registration Statement most recently
filed from time to time by the Fund with the Securities and
Exchange Commission and effective under the 1933 Act and the 1940
Act, as such Registration Statement is amended by any amendments
thereto at the time in effect.

(b) Upon commencement of the Portfolio's
operations, the Distributor will hold itself available to receive

1
<PAGE>

orders, satisfactory to the Distributor, for the purchase of
Shares and will accept such orders on behalf of the Fund and will
transmit such orders as are so accepted to the fund's transfer
and shareholder servicing agent as promptly as practicable. The
Distributor shall promptly forward to the Fund's Custodian funds
received in respect of purchases of Shares in accordance with the
instructions of the Fund's Administrator. Purchase orders shall
be deemed effective at the time and in the manner set forth in
the Prospectus.

(c) The offering price of the Shares shall be the
net asset value per Share determined as set forth in the
Prospectus. The Fund shall furnish the Distributor, with all
possible promptness, an advice of each computation of net asset
value.

(d) The Distributor shall not be obligated to
sell any certain number of Shares and nothing herein contained
shall prevent the Distributor from entering into like
distribution arrangements with other investment companies.

Section 3. Duties of the Fund.

(a) The Fund agrees to sell Shares so long as it
has Shares available for sale and to cause the Fund's transfer
and shareholder servicing agent to record on its books the
ownership of (or delivery certificates, if any, for) such Shares
registered in such names and amounts as the Distributor has
requested in writing or other means of data transmission, as
promptly as practicable after receipt by the Fund of the net
asset value thereof and written request of the Distributor
therefor.

(b) The Fund shall keep the Distributor fully
informed with regard to its affairs as they pertain to the
Portfolio and shall furnish to the Distributor copies of all
information, financial statements and other papers which the
Distributor may reasonably request for use in connection with the
distribution of Shares of the Fund, and this shall include one
certified copy, upon request by the Distributor, of all financial
statements prepared for the Fund by independent accountants and
such reasonable number of copies of its most current Prospectus
and annual and interim reports as the Distributor may request and
shall cooperate fully in the efforts of the Distributor to sell
and arrange for the sale of the Shares and in the performance of
the Distributor under this Agreement.

(c) The Fund shall take, from time to time, such
steps, including payment of the related filing fee, as may be
necessary to register the Shares under the 1933 Act to the end
that there will be available for sale such number of Shares as
the Distributor may be expected to sell. The Fund agrees to file

2
<PAGE>

from time to time such amendments, reports and other documents as
may be necessary in order that there may be no untrue statement
of a material fact in a Registration Statement or Prospectus, or
necessary in order that there may be no omission to state a
material fact in the Registration Statement or Prospectus which
omission would make the Statements therein misleading.

(d) The Fund shall use its best efforts to
qualify and maintain the qualification of an appropriate number
of the Shares for sale under the securities laws of such states
as the Distributor and the Fund may approve, and, if necessary or
appropriate in connection therewith, to qualify and maintain the
qualification of the Fund as a broker or dealer in such states;
provided that the Fund shall not be required to amend its
Articles of Incorporation or By-Laws to comply with the laws of
any state, to maintain an office in any state, to change the
terms of the offering of the Shares in any state from the terms
set forth in its Registration Statement and Prospectus, to
qualify as a foreign corporation in any state or to consent to
service of process in any state other than with respect to claims
arising out of the offering of the Shares. The Distributor shall
furnish such information and other material relating to its
affairs and activities as may be required by the Fund in
connection with such qualifications.

Section 4. Expenses.

(a) The Fund shall bear all costs and expenses of
the continuous offering of the Shares in connection with: (i)
fees and disbursements of its counsel and independent
accountants, (ii) the preparation, filing and printing of any
registration statements and/or prospectuses required to be filed
by and under the federal and state securities laws, (iii) the
preparation and mailing of annual and interim reports,
prospectuses and proxy materials to shareholders and (iv) the
qualifications of Shares for sale and of the Fund as a broker or
dealer under the securities laws of such states or other
jurisdictions as shall be selected by the Fund and the
Distributor pursuant to Section 3(d) hereof and the cost and
expenses payable to each such state for continuing qualification
therein.

(b) The Distributor shall bear (i) the costs and
expenses of preparing, printing and distributing any materials
not prepared by the Fund and other materials used by the
Distributor in connection with its offering of the Shares for
sale to the public, including the additional cost of printing
copies, at printer's over-run cost, of the Prospectus and of
annual and interim reports to shareholders other than copies
thereof required for distribution to shareholders or for filing
with any federal and state securities authorities, (ii) any
expenses of advertising incurred by the Distributor in connection

3
<PAGE>

with such offering and (iii) the expenses of registration or
qualification of the Distributor as a dealer or broker under
federal or state laws and the expenses of continuing such
registration or qualification.

Section 5. Indemnification. The Fund agrees to
indemnify, defend and hold the Distributor, its officers and
Directors and any person who controls the Distributor within the
meaning of Section 15 of the 1933 Act, free and harmless from and
against any and all claims, demand, liabilities and expenses
(including the cost of investigating or defending such claims,
demands or liabilities and any counsel fees incurred in
connection therewith) which the Distributor, its officers,
directors or any such controlling person may incur under the 1933
Act, or under common law or otherwise, arising out of or based
upon any untrue statement of a material fact contained in the
Registration Statement or Prospectus or arising out of or based
upon any alleged omission to state a material fact required to be
stated in either thereof or necessary to make the statements in
either thereof not misleading, except insofar as such claims,
demands, liabilities or expenses arise out of or are biased upon
any such untrue statement or omission or alleged untrue statement
or omission made in reliance upon and in conformity with
information furnished in writing by the Distributor to the Fund
for use in the Registration Statement or Prospectus; provided,
however, that this indemnity agreement, to the extent that it
might require indemnity of any person who is also an officer or
Director of the Fund or who controls the Fund within the meaning
of Section 15 of the 1933 Act, shall not inure to the benefit of
such officer, Director or controlling person unless a court of
competent jurisdiction shall determine, or it shall have been
determined by controlling precedent, that such result would not
be against public policy as expressed in the 1933 Act; and
further provided, that in no event shall anything contained
herein be so construed as to protect the Distributor against any
liability to the Fund or to its security holders to which the
Distributor would otherwise be subject by reason of willful
misfeasance, bad faith, or gross negligence in the performance of
its duties, or by reason of its reckless disregard of its
obligations under this Agreement. Any such indemnification shall
be payable only from the assets of the Portfolio or other assets
lawfully available for such purpose. The Fund's agreement to
indemnify the Distributor, its officers and Directors and any
such controlling person as aforesaid is expressly conditioned
upon the Fund's being promptly notified of any action brought
against the Distributor, its officers or Directors, or any such
controlling person, such notification to be given to the Fund at
its principal business office. The Fund agrees promptly to
notify the Distributor of the commencement of any litigation or
proceedings against it or any of its officers or Directors in
connection with the issue and sale of any Shares.

4
<PAGE>

The Distributor agrees to indemnify, defend and hold
the Fund, its Directors and officers and any person who controls
the Fund, if any, within the meaning of Section 15 of the 1933
Act, free and harmless from and against any and all claims,
demands, liabilities and expenses (including the cost of
investigating or defending against such claims, demands or
liabilities and any counsel fees incurred in connection
therewith) which the Fund, its Directors or officers or any such
controlling person may incur under the 1933 Act or under common
law or otherwise, but only to the extent that such liability or
expense incurred by the Fund, its Directors or officers; or such
controlling person resulting from such claims or demands shall
arise out of or be based upon any alleged untrue statement of a
material fact contained in information furnished in writing by
the Distributor to the Fund for use in the preparation of the
Registration Statement or Prospectus or shall arise out of or be
based upon any alleged omission to state a material fact in such
information or a fact necessary to make such information not
misleading, it being understood that the Fund will rely upon the
information provided by the Distributor for use in the
preparation of the Registration Statement and Prospectus. The
Distributor's agreement to indemnify the Fund, its Directors and
officers, and any such controlling person as aforesaid is
expressly conditioned upon the Distributor's being promptly
notified of any action brought against the Fund, its Directors or
officers or any such controlling person, such notification to be
given to the Distributor at its principal business office.

Section 6. Compliance with Securities Laws. The Fund
represents that it is registered as a diversified open-end
management investment company under the 1940 Act, and agrees that
it will comply with the provisions of the 1940 Act and of the
rules and regulations thereunder. The Fund and the Distributor
each agree to comply with the applicable terms and provisions of
the 1940 Act, the 1933 Act and, subject to the provisions of
Section 3(d), applicable state "Blue Sky" laws. The Distributor
agrees to comply with the applicable terms and provisions of the
Securities Exchange Act of 1934.

Section 7. Term of Agreement; Termination. This
Agreement shall commence on the date first set forth above. This
Agreement shall continue in effect for a period more than two
years from the date hereof only so long as such continuance is
specifically approved at least annually in conformity with the
requirements of the 1940 Act.

This Agreement shall terminate automatically in the
event of its assignment (as defined by the 1940 Act). In
addition, this Agreement may be terminated by either party at any
time, without penalty, on not more than sixty days' nor less than
thirty days' written notice to the other party.

5
<PAGE>

Section 8. Compensation. As compensation for the
services rendered by the Distributor during the term of this
Agreement, the Fund shall pay to the Distributor such fees as
shall be agreed upon from time to time in writing by the
Distributor and the Fund.

Section 9. Notices. Any notice required to be given
pursuant to this Agreement shall be deemed duly given if
delivered or mailed by registered mail, postage prepaid, (1) to
the Distributor at Morgan Stanley & Co. Incorporated, 1221 Avenue
of the Americas, 21st Floor, New York, N.Y. 10020 Attention:
Warren J. Olsen, or (2) to the Fund at PCS Cash Fund, Inc., 1221
Avenue of the Americas, 21st Floor, New York, N.Y. 10020,
Attention: Secretary.

Section 10. Governing Law. This Agreement shall be
governed and construed in accordance with the laws of the State
of New York.

IN WITNESS WHEREOF, the parties hereto have executed
this Agreement on the day and year first above written.

MORGAN STANLEY & CO. INCORPORATED

By /s/ Barton M. Biggs
Barton M. Biggs

PCS CASH FUND, INC.

By /s/ Warren J. Olsen
Warren J. Olsen
President and Director

Exhibit 6(B)

DISTRIBUTION AGREEMENT

AGREEMENT made this 3rd day of July, 1989, between PCS
CASH FUND, INC. a Maryland Corporation (the "Fund"), and MORGAN
STANLEY & CO. INCORPORATED, a Delaware corporation (the
"Distributor").

W I T N E S S E T H

WHEREAS, the Fund is registered under the Investment
Company Act of 1940, as amended (the "1940 Act"), as a
diversified open-end management investment company and it is in
the interest of the Fund to offer the shares of its PCS Tax-Free
Money Market Portfolio (the "Portfolio") for sale continuously
and to appoint a principal underwriter for the purpose of
facilitating such offers and sales;

NOW, THEREFORE, the parties agree as follows:

Section 1. Appointment of the Distributor.

Section 2. Services and Duties of the Distributor.

(b) Upon commencement of the Portfolios
operations, the Distributor will hold itself available to receive

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(c) The offering price of the Shares shall be
the net asset value per Share determined as set forth in the
Prospectus. The Fund shall furnish the Distributor, with all
possible promptness, an advice of each computation of net asset
value.

Section 3. Duties of the Fund.

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<PAGE>

(d) The Fund shall use its best efforts to
qualify and maintain the qualification of an appropriate number
of the Shares for sale under the securities laws of such states
as the Distributor and the Fund may approve, and, if necessary or
appropriate in connection therewith, to qualify and maintain the
qualification of the Fund as a broker or dealer in such states;
provided that the Fund shall not be required to amend its
Articles of Incorporation or By-Laws to comply with the laws of
any state, to maintain an office in any state, to change the
terms of the offering of the Shares in any state from the terms
set forth in its Registration Statement and Prospectus, to
qualify as a foreign corporation in any state or to consent to
service of process in any state other than with respect to claims
arising out of the offering of the Shares. The Distributor shall
furnish such information and other material relating to, its
affairs and activities as may be required by the Fund in
connection with such qualifications.

Section 4. Expenses.

(a) The Fund shall bear all costs and expenses
of the continuous offering of the Shares in connection with: (i)
fees and disbursements of its counsel and independent
accountants, (ii) the preparation, filing and printing of any
registration statements and/or prospectuses required to be filed
by and under the federal and state securities laws, (iii) the
preparation and mailing of annual and interim reports,
prospectuses and proxy materials to shareholders and (iv) the
qualifications of Shares for sale and of the Fund as a broker or
dealer under the securities laws of such states or other
jurisdictions as shall be selected by the Fund and the
Distributor pursuant to Section 3(d) hereof and the cost and
expenses payable to each such state for continuing qualification
therein.

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<PAGE>

Section 5. Indemnification. The Fund agrees to
indemnify, defend and hold the Distributor, its officers and
Directors and any person who controls the Distributor within the
meaning of Section 15 of the 1933 Act, free and harmless from and
against any and all claims, demand, liabilities and expenses
(including the cost of investigating or defending such claims,
demands or liabilities and any counsel fees incurred in
connection therewith) which the Distributor, its officers,
directors or any such controlling person may incur under the 1933
Act, or under common law or otherwise, arising out of or based
upon any untrue statement of a material fact contained in the
Registration Statement or Prospectus or arising out of or based
upon any alleged omission to state a material fact required to be
stated in either thereof or necessary to make the statements in
either thereof not misleading, except insofar as such claims,
demands, liabilities or expenses arise out of or are based upon
any such untrue statement or omission or alleged untrue.
statement or omission made in reliance upon and in conformity
with information furnished in writing by the Distributor to the
Fund for use in the Registration Statement or Prospectus;
provided, however, that this indemnity agreement, to the extent
that it might require indemnity of any person who is also an
officer or Director of the Fund or who controls the Fund within
the meaning of Section 15 of the 1933 Act, shall not inure to the
benefit of such officer, Director or controlling person unless a
court of competent jurisdiction shall determine, or it shall have
been determined by controlling precedent, that such result would
not be against public policy as expressed in the 1933 Act; and
further provided, that in no event shall anything contained
herein be so construed and to protect the Distributor against any
liability to the Fund or to its security holders to which the
Distributor would otherwise be subject by reason of willful
misfeasance, bad faith, or gross negligence in the performance of
its duties, or by reason of its reckless disregard of its
obligations under this Agreement. Any such indemnification shall
be payable only from the assets of the Portfolio or other assets
lawfully available for such purpose. The Fund's agreement to
indemnify the Distributor, its officers and Directors and any
such controlling person as aforesaid is expressly conditioned
upon the Fund's being promptly notified of any action brought
against the Distributor, its officers or Directors, or any such
controlling person, such notification to be given to the Fund at
its principal business office. The Fund agrees promptly to
notify the Distributor of the commencement of any litigation or
proceedings against it or any of its officers or Directors in
connection with the issue and sale of any Shares.

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<PAGE>

The Distributor agrees to indemnify, defend and hold
the Fund, its Directors and officers and any person who controls
the Fund, if any, within the meaning of Section 15 of the 1933
Act, free and harmless from and against any and all claims,
demands, liabilities and expenses (including the cost of
investigating or defending against such claims, demands or
liabilities and any counsel fees incurred in connection
therewith) which the Fund, its Directors or officers or any such
controlling person may incur under the 1933 Act or under common
law or otherwise, but only to the extent that such liability or
expense incurred by the Fund, its Directors or officers or such
controlling person resulting from such claims or demands shall
arise out of or be based upon any alleged untrue statement of a
material fact contained in information furnished in writing by
the Distributor to the Fund for use in the preparation of the
Registration Statement or Prospectus or shall arise out of or be
based upon any alleged omission to state a material fact in such
information or a fact necessary to make such information not
misleading, it being understood that the Fund will rely upon the
information provided by the Distributor for use in the
preparation of the Registration Statement and Prospectus. The
Distributor's agreement to indemnify the Fund, its Directors and
officers, and any such controlling person as aforesaid is
expressly conditioned upon the Distributor's being promptly
notified of any action brought against the Fund, its Directors or
officers or any such controlling person, such notification to be
given to the Distributor at its principal business office.

Section 7. Term of Agreement: Termination. This
Agreement shall commence on the date first set forth above. This
Agreement shall continue in effect for a period more than two
years from the date hereof only so long as such continuance is
specifically approved at least annually in conformity with the
requirements of the 1940 Act.

This Agreement shall terminate automatically in the
event of its assignment (as defined by the 1940 Act). In.
addition, this Agreement may be terminated by either party at any
time, without penalty, on not more than sixty days' nor less than
thirty days' written notice to the other party.

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<PAGE>

Section 10. Governing Law. This Agreement shall be
governed and construed in accordance with the laws of the State
of New York.

IN WITNESS WHEREOF, the parties hereto have executed
this Agreement on the day and year first above written.

MORGAN STANLEY & CO. INCORPORATED

By /s/ Barton M. Biggs
Barton M. Biggs

PCS CASH FUND, INC.

By /s/ Warren J. Olsen
Warren J. Olsen
President and Director

Exhibit 6(C)

DISTRIBUTION AGREEMENT

AGREEMENT made this 3rd day of July, 1989, between
PCS CASH FUND, INC. a Maryland Corporation (the "Fund"), and
MORGAN STANLEY & CO. INCORPORATED, a Delaware corporation (the
"Distributor").

W I T N E S S E T H

WHEREAS, the Fund is registered under the Investment
Company Act of 1940, as amended (the "1940 Act"), as a
diversified open-end management investment company and it is in
the interest of the Fund to offer the shares of its PCS
Government Obligations Money Market Portfolio (the "Portfolio")
for sale continuously and to appoint a principal underwriter for
the purpose of facilitating such offers and sales;

NOW, THEREFORE, the parties agree as follows:

Section 1. Appointment of the Distributor.

Section 2. Services and Duties of the Distributor.

(b) Upon commencement of the Portfolio's
operations, the Distributor will hold itself available to receive

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Section 3. Duties of the Fund.

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<PAGE>

file from time to time such amendments, reports and other
documents as may be necessary in order that there may be no
untrue statement of a material fact in a Registration Statement
or Prospectus, or necessary in order that there may be no
omission to state a material fact in the Registration Statement
or Prospectus which omission would make the Statements therein
misleading.

Section 4. Expenses.

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<PAGE>

expenses of advertising incurred by the Distributor in connection
with such offering and (iii) the expenses of registration or
qualification of the Distributor as a dealer or broker under
federal or state laws and the expenses of continuing such
registration or qualification.

Section 5. Indemnification. The Fund agrees to
indemnify, defend and hold the Distributor, its officer and
Directors and any person who controls the Distributor within the
meaning of Section 15 of the 1933 Act, free and harmless from and
against any and all claims, demand, liabilities and expenses
(including the cost of investigating or defending such claims,
demands or liabilities and any counsel fees incurred in
connection therewith) which the Distributor, its officers,
directors or any such controlling person may incur under the 1933
Act, or under common law or otherwise, arising out of or based
upon any untrue statement of a material fact contained in the
Registration Statement, or Prospectus or arising out of or based
upon any alleged omission to state a material fact required to be
stated in either thereof or necessary to make the statements in
either thereof not misleading, except insofar as such claims,
demands, liabilities or expenses arise out of or are based upon
any such untrue statement or omission or alleged untrue statement
or omission made in reliance upon and in conformity with
information furnished in writing by the Distributor to the Fund
for use in the Registration Statement or Prospectus; provided,
however, that this indemnity agreement, to the extent that it
might require indemnity of any person who is also an officer or
Director of the Fund or who controls the Fund within the meaning
of Section 15 of the 1933 Act, shall not inure to the benefit of
such officer, Director or controlling person unless a court of
competent jurisdiction shall determine, or it shall have been
determined by controlling precedent, that such result would not
be against public policy as expressed in the 1933 Act; and
further provided, that in no event shall anything contained
herein be so construed as to protect the Distributor against any
liability to the Fund or to its security holders to which the
Distributor would otherwise be subject by reason of willful
misfeasance, bad faith, or gross negligence in the performance of
its duties, or by reason of its reckless disregard of its
obligations under this Agreement. Any such indemnification shall
be payable only from the assets of the Portfolio or other assets
lawfully available for such purpose. The Fund's agreement to
indemnify the Distributor, its officers and Directors and any
such controlling person as aforesaid is expressly conditioned
upon the Fund's being promptly notified of any action brought
against the Distributor, its officers or Directors, or any such
controlling person, such notification to be given to the Fund at
its principal business office. The Fund agrees promptly to
notify the Distributor of the commencement of any litigation or
proceedings against it or any of its officers or Directors in
connection with the issue and sale of any Shares.

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<PAGE>

5
<PAGE>

Section 10. Governing Law. This Agreement shall be
governed and construed in accordance with the laws of the State
of New York.

IN WITNESS WHEREOF, the parties hereto have executed
this Agreement on the day and year first above written.

MORGAN STANLEY & CO. INCORPORATED

By /s/ Barton M. Biggs
Barton M. Biggs

PCS CASH FUND, INC.

By /s/ Warren J. Olsen
Warren J. Olsen
President and Director

Exhibit 6(D)

DEALER AGREEMENT

Relating to Morgan Stanley Cash Fund, Inc.

Gentlemen:

We serve as distributor of the shares ("Shares") which
comprise the classes of Common Stock, par value $.001 (each such
class hereinafter individually referred to as the "Class" and
collectively the "Classes") of Morgan Stanley Cash Fund, Inc., a
Maryland corporation (the "Fund") as listed on Schedule A
attached hereto. The Fund is an open-end, diversified investment
company registered under the Investment Company Act of 1940, as
amended (the "1940 Act"). The Fund offers Shares to the public
in accordance with the terms and conditions contained in the
Prospectus and Statement of Additional Information relating to
the respective Classes of such Shares. The terms
"Prospectus(es)" and "SAI(s)" as used herein refer to the
prospectus(es) and statement(s) of additional information on file
with the Securities and Exchange Commission ("SEC") with respect
to the Shares which are part of the most recent registration
statement effective from time to time under the Securities Act of
1933, as amended (the "1933 Act").

In connection with the offering of Shares to the
public, you agree to assist in the distribution of Shares on the
following terms and conditions:

1. You are hereby authorized to identify potential
purchasers of each Class of Shares checked on Schedule A attached
hereto and made a part hereof as such Schedule shall be amended
from time to time consistent with the provisions of Paragraph 11
hereof, to distribute to such persons, subject to Paragraph 2
hereof, the promotional and sales materials, Prospectuses, SAIs
(upon request of a purchaser of Shares), shareholder reports and
account opening forms relating to a particular Class, to provide,
if any, the other services checked on Schedule B attached hereto
and made a part hereof and to otherwise use your best efforts to

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<PAGE>

distribute such Shares, in each case subject to the terms,
conditions and procedures set forth in the relevant Prospectus
and SAI, including, without limitation, the public offering price
then in effect. You hereby agree that you shall place orders
immediately upon their receipt and shall not withhold any order
so as to profit therefrom. You hereby agree to pay all direct
and indirect expenses or costs we may incur under the
Distribution Agreement between us and the Fund arising in
connection with any promotional or sales literature (including
Prospectuses and SAIs) furnished to you in any such offering as
well as expenses of advertising and all legal expenses in
connection with the matters covered by this sentence.

2. No person is authorized to make any representation
concerning the Fund or the Shares of any Class in respect of
which you have committed to provide the services noted in
Paragraph 1 except those contained in the Prospectuses and SAIs
and in such printed information as we may subsequently prepare.
No person is authorized to distribute any sales material relating
to the Fund without our prior written approval.

3. Applicable fees (including without limitation fees
paid to us under a Plan of Distribution with respect to a Class
pursuant to Rule 12b-1 of the 1940 Act and reallocated to you) to
which you are entitled for the provision of the services to be
rendered under Paragraph 1 are those specified on attached
Schedule A hereto and in the current Prospectus of the Fund as
such Schedule and Prospectus shall be amended from time to time.
Such fees are subject to change without notice by us and will
comply with any changes in regulatory requirements. In
determining the amounts payable to you hereunder, we reserve the
right to exclude any sales which we reasonably determine are not
made in accordance with the terms of the relevant Prospectus and
provisions of this Agreement.

4. You agree to comply with the provisions contained
in the 1933 Act governing the distribution of Prospectuses to
persons to whom you offer Shares hereunder. You further agree to
deliver, upon our request, copies of any amended Prospectus to
purchasers, if any, whose Shares you are holding as record owner
and to deliver to such customers copies of the annual and interim
reports and proxy solicitation materials of the Fund. We agree
to furnish to you as many copies of the Prospectus, SAI, annual
and interim financial reports and proxy solicitation materials as
you may reasonably request.

5. You hereby represent and warrant that (a) you are
a corporation, partnership or other entity duly organized and
validly existing in good standing under the laws of the
jurisdiction in which you were organized; (b) your acceptance of
this Agreement and the performance of the transactions

2
<PAGE>

contemplated hereby have been duly authorized by all necessary
action and all other authorizations and approvals (if any)
required for your lawful acceptance of this Agreement and your
performance hereunder have been obtained; and (c) upon acceptance
by you, and assuming due and valid execution and delivery by us,
this Agreement will constitute a valid and binding agreement,
enforceable against you in accordance with its terms. You
further represent that you are registered as a broker-dealer
under Section 15 of the Securities Exchange Act of 1934 (the
"1934 Act"), as amended, and are a member in good standing of the
National Association of Securities Dealers, Inc. ("NASD"). You
agree to notify us immediately in the event of your expulsion or
suspension from the NASD. Your expulsion or suspension from the
NASD will automatically terminate this Agreement on the effective
date of such expulsion or suspension. You agree that you will
not offer Shares of any Class to persons in any jurisdiction in
which you may not lawfully make such offer due to the fact that
you have not registered under, or are not exempt from, the
applicable registration or licensing requirements of such
jurisdiction.

6. For all purposes of this Agreement you will be
deemed to be an independent contractor and will have no authority
to act as agent for us or the Fund in any manner or in any
respect. By your written acceptance of this Agreement, you agree
to and do release, indemnify and hold us, the Fund and its
transfer agent and our and their respective officers, directors,
agents, employees and affiliates harmless from and against any
and all direct or indirect liabilities, losses, claims, demands
and expenses (including, without limitation reasonable attorneys'
fees) resulting from requests, directions, actions, or inactions
of or by you or your officers, employees, or agents regarding
your responsibilities hereunder or the purchase, redemption,
transfer or registration of Shares by or on behalf of customers.
The indemnification provided hereunder shall survive the
termination of this Agreement. You and your employees will, upon
request, be available during normal business hours to consult
with us or our designees concerning the performance of your
responsibilities under this Agreement.

7. The Fund has registered an indefinite number of
Shares of each Class under the 1933 Act. Upon application to us,
we will inform you as to the states or other jurisdictions in
which we believe the Shares of a particular Class have been
qualified for sale under, or are exempt from the requirements of,
the respective securities laws of such states, but we assume no
responsibility or obligation as to your right to sell Shares of
any Class in any jurisdiction. You shall not make offers or
sales of Shares in any state or jurisdiction where the particular
Shares are not qualified for sale under or exempt from the
requirements of the securities laws of the state or other
jurisdictions where the proposed offer or sale is to be made.

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<PAGE>

8. The Fund shall have full authority to take such
action as it deems advisable in respect of all matters pertaining
to the offering of the Shares, including the right in its
discretion, to reject an order for Shares and, without notice, to
suspend sales or withdraw the offering of Shares of any and all
Classes entirely.

9. You will (i) maintain all records required by law
(including records detailing the services you provide in return
for the fees to which you are entitled under this Agreement)
relating to transactions in Shares covered by this Agreement and,
upon request by the Fund or us, promptly make such of these
records available to the Fund or us, as the case may be, as the
Fund or we may reasonably request in connection with its
operations; and (ii) promptly notify the Fund and us if you
experience any difficulty in maintaining the records described in
the foregoing clauses in an accurate and complete manner.

10. The Fund shall be under no liability to you and we
shall be under no liability to you except for lack of good faith
and for obligations expressly assumed by us hereunder. In
carrying out your obligations, you agree to act in good faith and
without negligence. Nothing contained in this Agreement is
intended to operate as a waiver by us or you of compliance with
any provision of the 1940 Act, the 1933 Act, the 1934 Act, or the
rules and regulations promulgated by the SEC.

11. This Agreement shall become effective only when
accepted and signed by you and may be amended only by a written
instrument signed by both of the parties hereto. In addition to
the termination provision specified in Paragraph 5 hereof, this
Agreement may be terminated by either party, without penalty,
upon ten days' notice to the other party and shall automatically
terminate in the event of its assignment, as defined in the 1940
Act and shall automatically terminate with respect to a Class in
the event the Distribution Agreement applicable to such Class
between the Fund and us terminates. This Agreement may also be
terminated at any time without penalty by the vote of a majority
of the members of the Board of Directors of the Fund who are not
"interested persons" (as such phrase is defined in the 1940 Act)
and have no direct or indirect financial interest in the
operation of the Distribution Agreement between the Fund and us
or any related agreement, or, in respect of a particular Class of
Shares, by the vote of a majority the outstanding Shares of such
Class.

12. All communications to us should be sent to:

Morgan Stanley & Co. Incorporated
1251 Avenue of the Americas
New York, New York 10020

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<PAGE>

Any notice to you shall be duly given if mailed or
telegraphed to you at the address specified by you below.

13. This Agreement constitutes the entire agreement
between the parties hereto relating to the subject matter hereof
and supersedes any and all agreements between the parties
relating to said subject matter. This Agreement and all the
rights and obligations of the parties hereunder shall be governed
by and construed under the laws of the Commonwealth of
Pennsylvania.

Very truly yours,

MORGAN STANLEY & CO. INCORPORATED

Date: By:

Authorized Officer

Accepted and Agreed to:

Name of Broker-Dealer (Please Print or Type)

Address

Date:

Authorized Officer

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<PAGE>

SCHEDULE A

You will assist in the distribution of the classes of
shares of Common Stock, par value $.OO1 of the Fund checked
below:

Class A Shares (M.S. Money Market
Portfolio)

Class B Shares (M.S. Tax-Free Money
Market Portfolio)

Class C Shares (M.S. Government
Obligations Money Market Portfolio)

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SCHEDULE B

You will provide the services checked below:

{ } Aggregating and processing purchase and redemption
requests for the Shares from your clients and placing net
purchase and redemption orders with the Fund's transfer agent,
Provident Financial Processing Corporation.

{ } Providing your clients with a service that invests
the assets of their accounts in the Shares pursuant to specific
or pre-authorized instructions.

{ } Processing dividend payments from the Fund on
behalf of your clients.

{ } Providing information periodically to your clients
showing their positions in the Shares.

{ } Arranging for bank wires.

{ } Responding to client inquiries relating to the
services performed by you.

{ } Providing subaccounting with respect to Shares
beneficially owned by your clients or the information to the Fund
necessary for subaccounting.

Exhibit 8

CUSTODIAN AGREEMENT

THIS AGREEMENT is made as of July 3, 1989 by and between PCS

Cash Fund, Inc., a Maryland corporation (the "Fund"), and

PROVIDENT NATIONAL BANK, a national banking association

("Provident").

W I T N E S S E T H

WHEREAS, the Fund is registered as an open-end, diversified

management investment company under the Investment Fund Act of

1940, as amended (the "1940 Act"); and

WHEREAS, the Fund desires to retain Provident to serve as

the Fund's custodian and Provident is willing to serve as the

Fund's custodian;

NOW, THEREFORE, in consideration of the premises and mutual

covenants herein contained, it is agreed between the parties

hereto as follows:

1. Appointment. The Fund hereby appoints Provident

to act as custodian of its portfolio securities with respect to

the Fund's three investment portfolios: M.S. Money Market

Portfolio, M.S. Tax-Free Money Market Portfolio and M.S.

Government Obligations Money Market Portfolio (collectively, the

"Portfolios"), cash and other property belonging to the Fund for

the period and on the terms set forth in this Agreement.

Provident accepts such appointment and agrees to furnish the

services herein set forth in return for the compensation as

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<PAGE>

provided in Paragraph 21 of this Agreement. The Fund may from

time to time issue separate series, classes or classify and

reclassify shares of such series or class. Provident shall

identify to each such series or class property belonging to such

series or class and in such reports, confirmations and notices to

the Fund called for under this Agreement shall identify the

series or class to which such report, confirmation or notice

pertains.

2. Delivery of Documents. The Fund has furnished

Provident with copies properly certified or authenticated of each

of the following:

(a) Resolutions of the Fund's Board of Directors

authorizing the appointment of Provident as custodian of the

portfolio securities, cash and other property belonging to the

Fund and approving this Agreement;

(b) Appendix A identifying and containing the

signatures of the Fund's officers and/or other persons authorized

to issue Oral Instructions and to sign Written Instructions, as

hereinafter defined, on behalf of the Fund;

with the Maryland Department of Assessments and Taxation on

January 6, 1989 and all amendments thereto (such Articles of

Incorporation, as presently in effect and as they shall from time

to time be amended, are herein called the "Charter");

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<PAGE>

(d) The Fund's By-Laws and all amendments thereto

(such By-Laws, as presently in effect and as they shall from time

to time be amended, are herein called the "By-Laws");

(e) The Investment Advisory Agreement between

Morgan Stanley Asset Management Inc. (the "Advisor") and the Fund

dated as of July 3, 1989 (the "Advisory Agreement");

(f) The Distribution Agreement between the Fund

and Morgan Stanley & Co. Incorporated dated July 3, 1989 (the

"Distribution Agreement");

(g) The Transfer Agency Agreement between

Provident Financial Processing Corporation (the "Transfer Agent")

and the Fund dated as of July 3, 1989 (the "Transfer Agency

Agreement");

(h) The Administration and Accounting Services

Agreement between Provident Financial Processing Corporation (the

"Administrator") and the Fund dated as of July 3, 1989 (the

"Administration Agreement");

(i) The Fund's Notification of Registration filed

pursuant to Section 8(a) of the 1940 Act on Form N-8A under the

1940 Act as filed with the Securities and Exchange Commission

("SEC") on January 5, 1989;

(j) The Fund's most recent Registration,

Statement on Form N-1A under the Securities Act of 1933, as

amended (the "1933 Act") (File No. 33-26417) and under the 1940

Act as filed with the SEC on April 7, 1989 relating to shares of

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<PAGE>

the Fund's Common Stock, $.001 per value ("Shares"), and all

amendments thereto; and

(k) The Fund's most recent prospectus or

prospectuses relating to Shares (such prospectus or prospectuses,

as presently in affect and all amendments and supplements thereto

are herein called the "Prospectus"); and

(l) Before the Fund engages in any transactions

regulated by the Commodity Futures Trading Commission ("CFTC"), a

copy of either (i) a filed notice of eligibility to claim the

exclusion from the definition of "commodity pool operator"

contained in Section 2(a)(1)(A) of the Commodity Exchange Act

("CEA") that is provided in Rule 4.5 under the CEA, together with

all supplements as are required by the CFTC, or (ii) a letter

which has been granted the Fund by the CFTC which states that the

Fund will not be treated as a "pool" as defined in Section

4.10(d) of the CFTC's General Regulations, or (iii) a letter

which has been granted the Fund by the CFTC which states that the

CFTC will not take any enforcement action if the Fund does not

The Fund will furnish Provident from time to time with

copies, properly certified or authenticated, of all amendments of

or supplements to the foregoing, if any.

3. Definitions.

(a) "Authorized Person". As used in this

Agreement, the term "Authorized Person" means any of the officers

of the Fund and any other person, whether or not any such person

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<PAGE>

is an officer or employee of the Fund, duly authorized by the

Board of Directors of the Fund to give Oral and Written

Instructions on behalf of the Fund and listed on the Certificate

annexed hereto as Appendix A or any amendment thereto as may be

received by Provident from time to time.

(b) "Book-Entry System". As used in this

Agreement, the term "Book-Entry System" means the Federal Reserve

Treasury book-entry system for United States and federal agency

securities, its successor or successors and its nominee or

nominees and any book-entry system maintained by a clearing

agency registered with the SEC under Section 17A of the

Securities Exchange Act of 1934 (the "1934 Act").

Agreement, the term "Oral Instructions" means oral instructions

actually received by Provident from an Authorized Person or from

a person reasonably believed by Provident to be an Authorized

Person. The Fund agrees to deliver to Provident, at the time and

in the manner specified in Paragraph 8(b) of this Agreement,

Written Instructions confirming Oral Instructions.

(d) "Property". The term "Property", as used in

this Agreement, means:

(i) any and all securities and other

property which the Fund may from time to time deposit, or

cause to be deposited, with Provident or which Provident may

from time to time hold for the Fund;

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<PAGE>

(ii) all income in respect of any of such

securities or other property;

(iii) all proceeds of the sale of any of such

securities or other property; and

(iv) all proceeds of the sale of securities

issued by the Fund, which are received by Provident from

time to time from or on behalf of the Fund.

(e) "Written Instructions". As used in this

Agreement, the term "Written Instructions" means written

instructions delivered by hand, mail, tested telegram, cable,

telex or facsimile sending device, and received by Provident and

signed by an Authorized Person.

4. Delivery and Registration of the Property. The

Fund will deliver or cause to be delivered to Provident all

securities and all moneys owned by it, including cash received

for the issuance of its Shares, at any time during the period of

this Agreement. Provident will not be responsible for such

securities and such moneys until actually received by it. All

securities delivered to Provident (other than in bearer form)

shall be registered in the name of the Fund or in the name of a

nominee of the Fund or in the name of any nominee of Provident

(with or without indication of fiduciary status), or in the name

of any sub-custodian or any nominee of any such custodian

appointed pursuant to Paragraph 6 hereof or shall be properly

endorsed and in form for transfer satisfactory to Provident.

6
<PAGE>

5. Receipt and Disbursement of Money.

(a) Provident shall open and maintain a separate

custodial account or accounts in the name of the Fund, subject

only to draft or order by Provident acting pursuant to the terms

of this Agreement, and shall hold in such account or accounts,

subject to the provisions hereof, all cash received by it from or

for the account of the Fund. Provident shall make payments of

cash to, or for the account of, the Fund from such cash only (i)

for the purchase of securities for the Fund's portfolio as

provided in Paragraph 13 hereof; (ii) upon receipt of Written

Instructions, for the payment of interest, dividends, taxes,

administration, distribution, advisory fees or expenses which are

to be borne by the Fund under the terms of this Agreement, the

Advisory Agreement, the Administration Agreement, the Transfer

Agency Agreement and the Distribution Agreement; (iii) upon

receipt of Written Instructions, for payments in connection with

the conversion, exchange or surrender of securities owned or

subscribed to by the Fund and held by or to be delivered to

Provident; (iv) to a sub-custodian pursuant to Paragraph 6

hereof; (v) for the redemption of Fund Shares; (vi) for payment

of the amount of dividends received in respect of securities sold

short; or (vii) upon receipt of Written Instructions, for other

proper Fund purposes. No payment pursuant to (i) above shall be

made unless Provident has received a copy of the broker's or

dealer's confirmation or the payee's invoice, as appropriate.

7
<PAGE>

(b) Provident is hereby authorized to endorse and

collect all checks, drafts or other orders for the payment of

money received as custodian for the account of the Fund.

6. Receipt of Securities.

(a) Except as provided by Paragraph 7 hereof,

Provident shall hold and physically segregate in a separate

account, identifiable at all times from those of any other

persons, firms, or corporations, all securities and non-cash

property received by it for the account of the Fund. All such

securities and non-cash property are to be held or disposed of by

Provident for the Fund pursuant to the terms of this Agreement.

In the absence of Written Instructions accompanied by a certified

resolution of the Fund's Board of Directors authorizing the

transaction, Provident shall have no power or authority to

withdraw, deliver, assign, hypothecate, pledge or otherwise

dispose of any such securities and investments except in

accordance with the express terms provided for in this Agreement.

In no case may any Director, officer, employee or agent, of the

Fund withdraw any securities. In connection with its duties

under this Paragraph 6, Provident may at its own expense, enter

into sub-custodian agreements with other banks or trust companies

for the receipt of certain securities and cash to be held by

Provident for the account of the Fund pursuant to this Agreement;

provided that each such bank or trust company has an aggregate

capital, surplus and undivided profits, as shown by its last

published report, of not less than one million dollars

8
<PAGE>

($1,000,000) for a Provident subsidiary or affiliate, or of not

less than twenty million dollars ($20,000,000) if such bank or

trust company is not a Provident subsidiary or affiliate and that

in either case such bank or trust company agrees with Provident

to comply with all relevant provisions of the 1940 Act and

applicable rules and regulations thereunder. Provident shall

remain responsible for the performance of all of its duties under

this Agreement and shall hold the Fund harmless from the acts and

omissions, under the standards of care provided for herein, of

any bank or trust company that it might choose pursuant to this

Paragraph 6.

(b) Where securities are transferred to an

account of the Fund established pursuant to Paragraph 7 hereof,

Provident shall also by book-entry or otherwise identify as

belonging to the Fund the quantity of securities in a fungible

bulk of securities registered in the name of Provident (or its

nominee) or shown in Provident's account on the books of the

Book-Entry System. At least monthly and from time to time,

Provident shall furnish the Fund with a detailed statement of the

Property held for the Fund under this Agreement.

7. Use of Book-Entry System. The Fund shall deliver

to Provident certified resolutions of the Board of Directors of

the Fund approving, authorizing and instructing Provident on a

continuous and on-going basis until instructed to the contrary by

Oral or Written Instructions actually received by Provident (a)

to deposit in the Book-Entry System all securities belonging to

9
<PAGE>

the Fund eligible for deposit therein and (b) to utilize the

Book-Entry System to the extent possible in connection with

settlements of purchases and sales of securities by the Fund, and

deliveries and returns of securities loaned, subject to

repurchase agreements or used as collateral in connection with

borrowings. Without limiting the generality of such use, it is

agreed that the following provisions shall apply thereto:

(a) Securities and any cash of the Fund deposited

in the Book-Entry System will at all times be segregated from any

assets and cash controlled by Provident in other than a fiduciary

or custodian capacity but may be commingled with other assets

held in such capacities. Provident and its sub-custodian, if

any, will pay out money only upon receipt of securities and will

deliver securities only upon the receipt of money.

(b) All books and records maintained by Provident

which relate to the Fund's participation in the Book-Entry System

will at all times during Provident's regular business hours be

open to the inspection of the Fund's duly authorized employees or

agents, and the Fund will be furnished with all information in

respect of the services rendered to it as it may require.

of any report obtained by Provident on the system of internal

accounting control of the Book-Entry System promptly after

receipt of such a report by Provident. Provident will also

provide the Fund with such reports on its own system of internal

control as the Fund may reasonably request from time to time.

10
<PAGE>

8. Instructions Consistent with Charter, etc:.

(a) Unless otherwise provided in this Agreement,

Provident shall act only upon Oral and Written Instructions.

Although Provident may know of the provisions of the Charter and

By-Laws of the Fund, Provident may assume that any Oral or

Written Instructions received hereunder are not in any way

inconsistent with any provisions of such Charter or By-laws or

any vote, resolution or proceeding of the Shareholders, or of the

Board of Directors, or of any committee thereof.

(b) Provident shall be entitled to rely upon any

Oral Instructions and any Written Instructions actually received

by Provident pursuant to this Agreement. The Fund agrees to

forward to Provident Written Instructions confirming Oral

Instructions in such manner that the Written Instructions are

received by Provident by the close of business of the same day

that such Oral Instructions are given to Provident. The Fund

agrees that the fact that such confirming Written Instructions

are not received by Provident shall in no way affect the validity

of the transactions or enforceability of the transactions

authorized by the Fund by giving Oral Instructions. The Fund

agrees that Provident shall incur no liability to the Fund in

acting upon Oral Instructions given to Provident hereunder

concerning such transactions provided such instructions

reasonably appear to have been received from an Authorized

Person.

11
<PAGE>

9. Transactions Not Requiring Instructions. In the

absence of contrary Written Instructions, Provident is authorized

to take the following actions:

(a) Collection of Income and Other Payments.

Provident shall:

(i) collect and receive for the account of

the Fund, all income and other payments and distributions,

including (without limitation) stock dividends, rights, bond

coupons, option premiums and similar items, included or to

be included in the Property, and promptly advise the Fund of

such receipt and shall credit such income, as collected, to

the Fund's custodian account;

(ii) endorse and deposit for collection, in

the name of the Fund, checks, drafts, negotiable instruments

or other orders for the payment of money on the same day as

received;

(iii) receive and hold for the account of the

Fund all securities received as a distribution on the Fund's

portfolio securities as a result of a stock dividend, share

split-up or reorganization, recapitalization, readjustment

or other rearrangement or distribution of rights or similar

securities issued with respect to any portfolio securities

belonging to the Fund held by Provident hereunder;

(iv) present for payment and collect the

amount payable upon all securities which may mature or be

12
<PAGE>

called, redeemed, or retired, or otherwise become payable on

the date such securities become payable; and

(v) take any action which may be necessary

and proper in connection with the collection and receipt of

such income and other payments and the endorsement for

collection of checks, drafts, and other negotiable

instruments as described in Paragraph 24 of this Agreement.

(b) Miscellaneous Transactions. Provident is

authorized to deliver or cause to be delivered Property against

payment or other consideration or written receipt therefor in the

following cases:

(i) for examination by a broker selling for

the account of the Fund in accordance with street delivery

custom;

(ii) for the exchange of interim receipts or

temporary securities for definitive securities; and

the Fund or Provident or nominee of either, or for exchange of

securities for a different number of bonds, certificates, or

other evidence, representing the same aggregate face amount or

number of units bearing the same interest rate, maturity date and

call provisions, if any; provided that, in any such case, the new

securities are to be delivered to Provident.

10. Transactions Requiring Instructions. Upon receipt

of Oral or Written Instructions and not otherwise, Provident,

directly or through the use of the Book-Entry System, shall:

13
<PAGE>

(a) execute and deliver to such persons as may be

designated in such Oral or Written Instructions, proxies,

consents, authorizations, and any other instruments whereby the

authority of the Fund as owner of any securities may be

exercised;

(b) deliver any securities held for the Fund

against receipt of other securities or cash issued or paid in

connection with the liquidation, reorganization, refinancing,

tender offer, merger, consolidation or recapitalization of any

corporation, or the exercise of any conversion privilege;

any protective committee, reorganization committee or other

person in connection with the reorganization, refinancing,

merger, consolidation, recapitalization or sale of assets of any

corporation, and receive and hold under the terms of this

Agreement such certificates of deposit, interim receipts or other

instruments or documents as may be issued to it to evidence such

delivery;

(d) make such transfers or exchanges of the

assets of the Fund and take such other steps as shall be stated

in said Oral or Written Instructions to be for the purpose of

effectuating any duly authorized plan of liquidation,

reorganization, merger, consolidation or recapitalization of the

Fund;

(e) release securities belonging to the Fund to

any bank or trust company for the purpose of pledge or

14
<PAGE>

hypothecation to secure any loan incurred by the Fund; provided,

however, that securities shall be released only upon payment to

Provident of the monies borrowed, except that in cases where

additional collateral is required to secure a borrowing already

made, subject to proper prior authorization, further securities

may be released for that purpose; and repay such loan upon

redelivery to it of the securities pledged or hypothecated

therefor and upon surrender of the note or notes evidencing the

loan;

(f) release and deliver securities owned by the

Fund in connection with any repurchase agreement entered into on

behalf of the Fund, but only on receipt of payment therefor; and

pay out moneys of the Fund in connection with such repurchase

agreements, but only upon the delivery of the securities; and

(g) otherwise transfer, exchange or deliver

securities in accordance with Oral or Written Instructions.

11. Segregated Accounts.

(a) Provident shall upon receipt of Written or

Oral Instructions establish and maintain a segregated account or

accounts on its records for and on behalf of the Fund, into which

account or accounts may be transferred cash and/or securities,

including securities in the Book-Entry System (i) for the

purposes of compliance by the Fund with the procedures required

by a securities or option exchange, providing such procedures

comply with the 1940 Act and Release No. 10666 or any subsequent

release or releases of the SEC relating to the maintenance of

15
<PAGE>

segregated accounts by registered investment companies, and (ii)

for other proper corporate purposes, but only, in the case of

clause (ii), upon receipt of Written Instructions.

(b) Provident may enter into separate custodial

agreements with various futures commission merchants ("FCMs")

that the Fund uses (each an "FCM Agreement"), pursuant to which

the Fund's margin deposits in any transactions involving futures

contracts and options on futures contracts will be held by

Provident in accounts (each an "FCM Account") subject to the

disposition by the FCM involved in such contracts in accordance

with the customer contract between FCM and the Fund ("FCM

Contract"), SEC rules governing such segregated accounts, CFTC

rules and the rules of the applicable commodities exchange. Such

FCM Agreements shall only be entered into upon receipt of Written

Instructions from the Fund which state that (i) a customer

agreement between the FCM and the Fund has been entered into; and

(ii) the Fund is in compliance with all the rules and regulations

of the CFTC. Transfers of initial margin shall be made into an

FCM Account only upon Written Instructions; transfers of premium

and variation margin may be made into an FCM Account pursuant to

Oral Instructions. Transfers of funds from an FCM Account to the

FCM for which Provident holds such an account may only occur upon

certification by the FCM to Provident that pursuant to the FCM

Agreement and the FCM Contract, all conditions precedent to its

right to give Provident such instruction have been satisfied.

16
<PAGE>

12. Dividends and Distributions. The Fund shall

furnish Provident with appropriate evidence of action by the

Fund's Board of Directors declaring and authorizing the payment

of any dividends and distributions. Upon receipt by Provident of

Written Instructions with respect to dividends and distributions

declared by the Fund's Board of Directors and payable to

Shareholders who have elected in the proper manner to receive

their distributions or dividends in cash, and in conformance with

procedures mutually agreed upon by Provident, the Fund, and the

Fund's Transfer Agent, Provident shall pay to the Fund's Transfer

Agent, as agent for the Shareholders, an amount equal to the

amount indicated in said Written Instructions as payable by the

Fund to such Shareholders for distribution in cash by the

Transfer Agent to such Shareholders. In lieu of paying the

Fund's Transfer Agent cash dividends and distributions, Provident

may arrange for the direct payment of cash dividends and

distributions to Shareholders by Provident in accordance with

such procedures and controls as are mutually agreed upon from

time to time by and among the Fund, Provident and the Fund's

Transfer Agent.

In accordance with the Prospectus, the Internal Revenue

Code and regulations promulgated thereunder, and with such

procedures and controls as are mutually agreed upon from time to

time by and among the Fund, Provident and the Fund's Transfer

Agent, Provident shall arrange for the establishment of IRA

17
<PAGE>

custodian accounts for such Shareholders holding Shares through

IRA accounts.

13. Purchases of Securities. Promptly after each

decision to purchase securities by the Advisor, the Fund, through

the Advisor, shall deliver to Provident Oral Instructions

specifying with respect to each such purchase: (a) the name of

the issuer and the title of the securities, (b) the number of

shares or the principal amount purchased and accrued interest, if

any, (c) the date of purchase and settlement, (d) the purchase

price per unit, (e) the total amount payable upon such purchase

and (f) the name of the person from whom or the broker through

whom the purchase was made. Provident shall upon receipt of

securities purchased by or for the Fund pay out of the moneys

held for the account of the Fund the total amount payable to the

person from whom or the broker through whom the purchase was

made, provided that the same conforms to the total amount payable

as set forth in such Oral Instructions.

14. Sales of Securities. Promptly after each decision

to sell securities by the Advisor or exercise of an option

written by the Fund, the Fund, through the Advisor, shall deliver

to Provident Oral Instructions, specifying with respect to each

such sale: (a) the name of the issuer and the title of the

security, (b) the number of shares or principal amount sold, and

accrued interest, if any, (c) the date of sale, (d) the sale

price per unit, (e) the total amount payable to the Fund upon

such sale, and (f) the name of the broker through whom or the

18
<PAGE>

person to whom the sale was made. Provident shall deliver the

securities upon receipt of the total amount payable to the Fund

upon such sale, provided that the same conforms to the total

amount payable and set forth in such Oral Instructions. Subject

to the foregoing, Provident may accept payment in such form as

shall be satisfactory to it, and may deliver securities and

arrange for payment in accordance with the customs prevailing

among dealers in securities.

15. Records. The books and records pertaining to the

Fund which are in the possession of Provident shall be the

property of the Fund. Such books and records shall be prepared

and maintained as required by the 1940 Act and other applicable

securities laws and regulations. The Fund, or the Fund's

authorized representatives, shall have access to such books and

records at all times during Provident's normal business hours.

Upon the reasonable request of the Fund, copies of any such books

and records shall be provided by Provident to the Fund or the

Fund's authorized representative at the Fund's expense.

16. Reports.

(a) Provident shall furnish the Fund the

following reports:

(1) such periodic and special reports

as the Fund may reasonably request;

(2) a monthly statement summarizing all

transactions and entries for the account of the Fund,

listing the portfolio securities belonging to the Fund

19
<PAGE>

with the adjusted average cost of each issue and the

market value at the end of such month, and stating the

cash account of the Fund including disbursements;

(3) the reports to be furnished to the

Fund pursuant to Rule 17f-4; and

(4) such other information as may be

agreed upon from time to time between the Fund and

Provident.

(b) Provident shall transmit promptly to the Fund

any proxy statement, proxy materials, notice of a call or

conversion or similar communications received by it as Custodian

of the Property.

17. Cooperation with Accountants. Provident shall

cooperate with the Fund's independent public accountants and

shall take all reasonable action in the performance of its

obligations under this Agreement to assure that the necessary

information is made available to such accountants for the

expression of their opinion, as such may be required from time to

time by the Fund.

18. Confidentiality. Provident agrees on behalf of

itself and its employees to treat confidentially all records and

other information relative to the Fund and its prior, present, or

potential Shareholders, except, after prior notification to and

approval in writing by the Fund, which approval shall not be

unreasonably withheld and may not be withheld where Provident may

be exposed to civil or criminal contempt proceedings for failure

20
<PAGE>

to comply, when requested to divulge such information by duly

constituted authorities, or when so requested by the Fund.

19. Right to Receive Advice.

(a) Advice of Fund. If Provident shall be in

doubt as to any action to be taken or omitted by it, it may

request, and shall receive, from the Fund directions or, advice,

including Oral or Written Instructions where appropriate.

(b) Advice of Counsel. If Provident shall be in

doubt as to any question of law involved in any action to be

taken or omitted by Provident, it may request advice at its own

cost from counsel of its own choosing (who may be counsel for the

Advisor, the Fund or Provident, at the option of Provident).

between directions, advice or Oral or Written Instructions

received by Provident pursuant to subparagraph (a) of this

paragraph and advice received by Provident pursuant to

subparagraph (b) of this paragraph, Provident shall be entitled

to rely on and follow the advice received pursuant to the latter

provision alone.

(d) Protection of Provident. Provident shall be

protected in any action or inaction which it takes in reliance on

any directions, advice or Oral or Written Instructions, received

pursuant to subparagraphs (a) or (b) of this paragraph which

Provident, after receipt of any such directions, advice or Oral

or Written Instructions, in good faith believes to be consistent

with such directions, advice or Oral or Written Instructions, as

21
<PAGE>

the case may be. However, nothing in this paragraph shall be

construed as imposing upon Provident any obligation (i) to seek

such directions, advice or Oral or Written Instructions, or (ii)

to act in accordance with such directions, advice or Oral or

Written Instructions when received, unless, under the terms of

another provision of this Agreement, the same is a condition to

Provident's properly taking or omitting to take such action.

Nothing in this subsection shall excuse Provident when an action

or omission on the part of Provident constitutes willful

misfeasance, bad faith, gross negligence or reckless disregard by

Provident of any duties or obligations under this Agreement.

20. Compliance with Governmental Rules and

Regulations. Provident undertakes to comply with all applicable

requirements of the 1933 Act, the 1934 Act, the 1940 Act, the

CEA, and any laws, rules and regulations of governmental

authorities having jurisdiction with respect to the duties to be

performed by Provident hereunder.

21. Compensation. As compensation for the services

rendered by Provident during the term of this Agreement, the Fund

will pay to Provident monthly fees that shall be agreed upon from

time to time in writing by Provident and the Fund.

22. Indemnification. The Fund, as sole owner of the

Property, agrees to indemnify and hold harmless Provident and its

nominees from all taxes, charges, expenses, assessments, claims

and liabilities (including, without limitation, liabilities

arising under the 1933 Act, the 1934 Act, the 1940 Act, the CEA,

22
<PAGE>

and any state and foreign securities and blue sky laws, all as or

to be amended from time to time) and expenses, including

attorneys' fees and disbursements as long as such attorney has

been retained with the consent of the Fund, which consent shall

not be unreasonably withheld, arising directly or indirectly (a)

from the fact that securities included in the Property are

registered in the name of any such nominee or (b) without

limiting the generality of the foregoing clause (a) from any

action or thing which Provident takes or does or omits to take or

do (i) at the request or on the direction of or in reliance on

the advice of the Fund or (ii) upon Oral or Written Instructions,

provided, that neither Provident nor any of its nominees shall be

indemnified against any liability to the Fund or to its

Shareholders (or any expenses incident to such liability) arising

out of Provident's or such nominee's own willful misfeasance, bad

faith, negligence or reckless disregard of its duties or

responsibilities specifically described in this Agreement. In

order that the indemnification provision contained in this

Paragraph 22 shall apply, it is understood that if in any case

the Fund may be asked to indemnify or save Provident harmless,

the Fund shall be fully and promptly advised of all pertinent

facts concerning the situation in question, and it is further

understood that Provident will use all reasonable care to

identify and notify the Fund promptly concerning any situation

which presents or appears likely to present the probability of

such a claim for indemnification against the Fund. The Fund

23
<PAGE>

shall have the option to defend Provident against any claim which

may be the subject of this indemnification and, in the event that

the Fund so elects, it will so notify Provident and thereupon the

Fund shall take over complete defense for the claim, and

Provident shall in such situation incur no further legal, or

other expenses for which it shall seek indemnification under this

Paragraph 22. Provident shall in no case confess any claim or

make any compromise or settlement in any case in which the Fund

will be asked to indemnify Provident, except with the Fund's

prior written consent.

In the event of any advance of cash for any purpose

made by Provident resulting from Oral or Written Instructions of

the Fund, or in the event that Provident or its nominee shall

incur or be assessed any taxes, charges, expenses, assessments,

claims or liabilities in connection with the performance of this

Agreement, except such as may arise from its or its nominee's own

negligent action, negligent failure to act or willful misconduct,

any Property at any time held for the account of the Fund shall

be security therefor.

23. Responsibility of Provident. Provident shall be

under no duty to take any action on behalf of the Fund except as

specifically set forth herein or as may be specifically, agreed

to by Provident in writing. In the performance of its duties

hereunder, Provident shall be obligated to exercise care and

diligence and to act in good faith and to use its best efforts

within reasonable limits to insure the accuracy and completeness

24
<PAGE>

of all services performed under this Agreement. Provident shall

be responsible for and shall hold the Fund harmless from all

loss, cost, damage and expense, including reasonable attorney

fees (as long as such attorney has been retained with the consent

of Provident, which consent shall not be unreasonably withheld),

incurred by it resulting from any claim, demand, action or suit

arising out of Provident's own negligent failure to perform its

duties under this Agreement. In order that the indemnification

provision contained in this Paragraph 23 shall apply, it is

understood that if in any case Provident may be asked to

indemnify or save the Fund harmless, Provident shall be fully and

promptly advised of all pertinent facts concerning the situation

in question, and it is further understood that the Fund will use

all reasonable care to identify and notify Provident promptly

concerning any situation which presents or appears likely to

present the probability of such a claim for indemnification

against Provident. Provident shall have the option to defend the

Fund against any claim which may be the subject of this

indemnification and, in the event that Provident elects, it will

so notify the Fund and thereupon Provident shall take over

complete defense for the claim, and the Fund shall in such

situation incur no further legal or other expense for which it

shall seek indemnification under this Paragraph 23. The Fund

shall in no case confess any claim or make any compromise or

settlement in any case in which Provident will be asked to

25
<PAGE>

indemnify the Fund, except with Provident's prior written

consent.

To the extent that duties, obligations and

responsibilities are not expressly set forth in this Agreement,

however, Provident shall not be liable for any act or omission

which does not constitute willful misfeasance, bad faith or gross

negligence on the part of Provident or reckless disregard of such

duties, obligations and responsibilities. Without limiting the

generality of the foregoing or of any other provision of this

Agreement, Provident in connection with its duties under this

Agreement shall not be under any duty or obligation to inquire

into and shall not be liable for or in respect of (a) the

validity or invalidity or authority or lack thereof of any Oral

or Written Instruction, notice or other instrument which conforms

to the applicable requirements of this Agreement, if any, and

which Provident reasonably believes to be genuine; (b) the

validity or invalidity of the issuance of any securities included

or to be included in the Property, the legality or illegality of

the purchase of such securities, or the propriety or impropriety

of the amount paid therefor; (c) the legality or illegality of

the sale (or exchange) of any Property or the propriety or

impropriety of the amount for which such Property is sold (or

exchanged); or (d) delays or errors or loss of data occurring by

reason of circumstances beyond Provident's control, including

acts of civil or military authority, national emergencies, labor

difficulties, fire, mechanical breakdown, flood or catastrophe,

26
<PAGE>

acts of God, insurrection, war, riots or failure of the mails,

transportation, communication or power supply, nor shall

Provident be under any duty or obligation to ascertain whether

any Property at any time delivered to or held by Provident may

properly be held by or for the Fund. Notwithstanding the

foregoing, Provident shall use its best efforts to mitigate the

effects of the events in clause (d) above, although such efforts

shall not impute any liability thereto. Provident expressly

disclaims all responsibility for consequential damages, including

but not limited to any that may result from performance or non-

performance of any duty or obligation whether express or implied

in this Agreement, and also expressly disclaims any express or

implied warranty of products or services provided in connection

with this Agreement.

24. Collections. All collections of monies or other

property in respect, or which are to become part, of the Property

(but not the safekeeping thereof upon receipt by Provident) shall

be at the sole risk of the Fund. In any case in which Provident

does not receive any payment due the Fund within a reasonable

time after Provident has made proper demands for the same, it

shall so notify the Fund in writing, including copies of all

demand letters, any written responses thereto, and memoranda of

all oral responses thereto and to telephonic demands, and await

instructions from the Fund. Provident shall not be obliged to

take legal action for collection unless and until reasonably

indemnified to its satisfaction. Provident shall also notify the

27
<PAGE>

Fund as soon as reasonably practicable whenever income due on

securities is not collected in due course.

25. Duration and Termination. This Agreement shall

continue until termination by the Fund or by Provident in either

case on sixty (60) days written notice. Upon any termination of

this Agreement, pending appointment of a successor to Provident

or vote of the Shareholders of the Fund to dissolve or to

function without a custodian of its cash, securities or other

property, Provident shall not deliver cash, securities or other

property of the Fund to the Fund, but may deliver them to a bank

or trust company of its own selection, having an aggregate

capital, surplus and undivided profits, as shown by its last

published report, of not less than twenty million dollars

($20,000,000) as a custodian for the Fund to be held under terms

similar to those of this Agreement, provided, however, that

Provident shall not be required to make any such delivery or

payment until full payment shall have been made by the Fund of

all liabilities constituting a charge on or against the

properties of the Fund then held by Provident or on or against

Provident and until full payment shall have been made to

Provident of all of its fees, compensation, costs and expenses.

26. Notices. All notices and other communications,

including Written Instructions (collectively referred to as

"Notice" or "Notices" in this paragraph), hereunder shall be in

writing or by confirming telegram, cable, telex or facsimile

sending device. Notices shall be addressed (a) if to Provident

28
<PAGE>

at Provident's address, Airport Business Center, International

Court 2, 200 Stevens Drive, Philadelphia, Pennsylvania 19113,

marked for the attention of the Custodian Services Department (or

its successor); (b) if to the Fund, at the address of the Fund;

or (c) if to neither of the foregoing, at such other address as

shall have been notified to the sender of any such Notice or

other communication. If the location of the sender of a Notice

and the address of the addressee thereof are, at the time of

sending, more than 100 miles apart, the Notice may be sent by

first-class mail, in which case it shall be deemed to have been

given five days after it is sent, or if sent by confirming

telegram, cable, telex or facsimile sending device, it shall be

deemed to have been given immediately, and, if the location of

the sender of a Notice and the address of the addressee thereof

are, at the time of sending, not more than 100 miles apart, the

Notice may be sent by first-class mail, in which case it shall be

deemed to have been given three days after it is sent, or if sent

by messenger, it shall be deemed to have been given on the day it

is delivered, or if sent by confirming telegram, cable, telex or

facsimile sending device, it shall be deemed to have been given

immediately. All postage, cable, telegram, telex and facsimile

sending device charges arising from the sending of a Notice

hereunder shall be paid by the sender.

27. Further Actions. Each party agrees to perform

such further acts and execute such further documents as are

necessary to effectuate the purposes hereof.

29
<PAGE>

28. Amendments. This Agreement or any part hereof may

be changed or waived only by an instrument in writing signed by

the party against which enforcement of such change or waiver is

sought.

29. Delegation. On thirty (30) days prior written

notice to the Fund, Provident may assign its rights and delegate

its duties hereunder to any wholly-owned direct or indirect

subsidiary of Provident National Bank or PNC Financial Corp,

provided that (i) the delegate agrees with Provident to comply

with all relevant provisions of the 1940 Act; (ii) Provident and

such delegate shall promptly provide such information as the Fund

may request, and respond to such questions as the Fund may ask,

relative to the delegation, including (without limitation) the

capabilities of the delegate; (iii) the delegation of such duties

shall not relieve Provident of any of its duties hereunder; and

(iv) if the Fund notifies Provident within such thirty (30) day

period of its objection to such delegation and Provident,

notwithstanding such notification of objection, assigns its

rights and delegates, its duties thereunder, then the Fund may

terminate this Agreement immediately or upon such notice as the

Fund, in its sole discretion determines, without complying with

the sixty (60) day notice prescribed by Paragraph 25 hereof.

30. Counterparts. This Agreement may be executed in

two or more counterparts, each of which shall be deemed an

original, but all of which together shall constitute one and the

same instrument.

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<PAGE>

31. Miscellaneous. This Agreement embodies the entire

agreement and understanding between the parties hereto, and

supersedes all prior agreements and understandings relating to

the subject matter hereof, provided that the parties hereto may

embody in one or more separate documents their agreement, if any,

with respect to delegated and/or Oral Instructions. The captions

in this Agreement are included for convenience of reference only

and in no way define or delimit any of the provisions hereof or

otherwise affect their construction or effect. This Agreement

shall be deemed to be a contract made in Pennsylvania and

governed by Pennsylvania law. If any provision of this Agreement

shall be held or made invalid by a court decision, statute, rule

or otherwise, the remainder of this Agreement shall not be

affected thereby. This Agreement shall be binding and shall

inure to the benefit of the parties hereto and their respective

successors.

IN WITNESS WHEREOF, the parties hereto have caused this

Agreement to be executed by their officers designated below on

the day and year first above written.

{SEAL} PCS CASH FUND, INC.

Attest: By /s/ Warren J. Olsen
Warren J. Olsen

{SEAL} PROVIDENT NATIONAL BANK

Attest: /s/ Susan Alridge By /s/ A. Plambeck
Susan Alridge A. Plambeck

Exhibit 9(A)

TRANSFER AGENCY AGREEMENT

THIS AGREEMENT is made as of the _____ day of

__________, 1989 between MORGAN STANLEY CASH FUND, INC. a

Maryland corporation (the "Fund"), and PROVIDENT FINANCIAL

PROCESSING CORPORATION, a Delaware corporation which is an

indirect, wholly-owned subsidiary of PNC Financial Corp. (the

"Transfer Agent").

R E C I T A L

WHEREAS, the Fund is registered as an open-end,

diversified management investment company under the Investment

Fund Act of 1940, as amended (the "1940 Act"); and

WHEREAS, the Fund desires to retain the Transfer Agent

to serve as the Fund's transfer agent, registrar, and dividend

disbursing agent, and the Transfer Agent is willing to furnish

such services;

NOW, THEREFORE, in consideration of the premises and

mutual covenants herein contained, it is agreed between the

parties hereto as follows:

1. Appointment. The Fund hereby appoints the

Transfer Agent to serve as transfer agent, registrar and dividend

disbursing agent for the Fund with respect to shares of Common

Stock ("Shares") of the Fund's three investment portfolios: M.S.

Money Market Portfolio, M.S. Tax-Free Money Market Portfolio and

M.S. Government Obligations Money Market Portfolio (collectively,

the "Portfolios"), for the period and on the terms set forth in

1
<PAGE>

this Agreement. The Fund may from time to time issue separate

series or classes or classify and reclassify Shares of such

series or class. The Transfer Agent shall identify to each such

series or class property belonging to such series or class and in

such reports, confirmations and notices to the Fund called for

under this Agreement shall identify the series or class to which

such report, confirmation or notice pertains. The Transfer Agent

accepts such appointment and agrees to furnish the services

herein set forth in return for the compensation as provided in

Paragraph 16 of this Agreement.

2. Delivery of Documents. The Fund has furnished the

Transfer Agent with copies properly certified or authenticated of

each of the following:

(a) Resolutions of the Fund's Board of Directors

authorizing the appointment of the Transfer Agent as transfer

agent and registrar and dividend disbursing agent for the Fund

and approving this Agreement;

(b) Appendix A identifying and containing the

signatures of the Fund's officers and other persons authorized to

issue Oral Instructions and to sign Written Instructions, as

hereinafter defined, on behalf of the Fund and to execute stock

certificates representing Shares;

with the Department of Assessments and Taxation of the State of

Maryland on _____, 1989 and all amendments thereto (such Articles

2
<PAGE>

of Incorporation, as presently in effect and as they shall from

time to time be amended, are herein called the Charter");

(d) The Fund's By-Laws and all amendments

thereto (such By-Laws as presently in effect and as they shall

from time to time be amended, are herein called the "By-Laws");

(e) Copies of all documents relating to any

voluntary investor service plans sponsored by the Fund, including

periodic investment plans such as Individual Retirement Accounts;

(f) The Investment Advisory Agreement between

Morgan Stanley Asset Management Inc. (the "Advisor") and the Fund

dated as of ______, 1989 (the "Advisory Agreement");

(g) The Custodian Agreement between Provident

National Bank and the Fund dated as of _______ 1989 (the

"Custodian Agreement");

(h) The Administration and Accounting Services

Agreement between the Transfer Agent and the Fund dated as of

_________, 1989 (the "Administration Agreement");

(i) The Distribution Agreement between the Fund

and Morgan Stanley & Co. Incorporated (the "Distributor") dated

as of _________, 1989 (the "Distribution Agreement");

(j) The Fund's Notification of Registration filed

pursuant to Section 8(a) of the 1940 Act on Form N-8A under the

1940 Act with the Securities and Exchange Commission ("SEC") on

or about __________, 1989;

(k) The Fund's most recent Registration Statement

on Form N-1A under the Securities Act of 1933, as amended (the

3
<PAGE>

"1933 Act") (File No.______) and under the 1940 Act as filed with

the SEC on ________, 1989 relating to Shares, and all amendments

thereto;

(l) The Fund's most recent prospectus or

prospectuses relating to Shares (such prospectus, or

prospectuses, as presently in effect and all amendments and

supplements thereto are herein called the "Prospectus"); and

(m) Before the Fund engages in any transaction regulated

by the Commodity Futures Trading Commission ("CFTC"), a copy of either

(i) a filed notice of eligibility to claim the exclusion from the

definition of "commodity pool operator" contained in Section

2(a)(1)(A) of the Commodity Exchange Act ("CEA") that is provided

in Rule 4.5 under the CEA, together with all supplements as are

required by the CFTC, or (ii) a letter which has been granted the

Fund by the CFTC which states that the Fund will not be treated

as a "pool" as defined in Section 4.10(d) of the CFTC's General

Regulations, or (iii) a letter which has been granted the Fund by

the CFTC which states that the CFTC will not take any enforcement

action if the Fund does not register as a "commodity pool

operator."

The Fund will furnish the Transfer Agent from time to

time with copies, properly certified or authenticated, of all

amendments of or supplements to the foregoing, if any.

3. Definitions

(a) "Authorized Person". As used in this

Agreement, the term "Authorized Person" means any officer of the

4
<PAGE>

Fund and any other person, whether or not any such person is an

officer or employee of the Fund, duly authorized by the Board of

Directors of the Fund to give Oral and Written Instructions on

behalf of the Fund and listed on the Certificate annexed hereto

as Appendix A or any amendment thereto as may be received by the

Transfer Agent from time to time.

(b) "Oral Instructions". As used in this

Agreement, the term "Oral Instructions" means oral instructions

actually received by the Transfer Agent from an Authorized Person

or from a person reasonably believed by the Transfer Agent to be

an Authorized Person. The Fund agrees to deliver to the Transfer

Agent, at the time and in the manner specified in Paragraph 4(b)

of this Agreement, Written Instructions confirming Oral

Instructions.

Agreement, the term "Written Instructions" means written

instructions delivered by hand, mail, tested telegram, cable,

telex or facsimile sending device, and received by the Transfer

Agent and signed by an Authorized Person.

4. Instructions Consistent with Charter, etc.

(a) Unless otherwise provided in this Agreement,

the Transfer Agent shall act only upon Oral or Written

Instructions. Although the Transfer Agent may know provisions of

the Charter and By-Laws of the Fund, the Transfer Agent may

assume that any Oral or Written Instructions received hereunder

are not in any way inconsistent with any provisions of such

5
<PAGE>

Charter or By-Laws or any vote, resolution or proceeding of the

Shareholders, or of the Board of Directors, or of any committee

thereof.

(b) The Transfer Agent shall be entitled to rely

upon any Oral Instructions and any Written Instructions actually

received by the Transfer Agent pursuant to this Agreement. The

Fund agrees to forward to the Transfer Agent Written Instructions

confirming Oral Instructions in such manner that the Written

Instructions are received by the Transfer Agent by the close of

business of the same day that such Oral Instructions are given to

the Transfer Agent. The Fund agrees that the fact that such

confirming Written Instructions are not received by the Transfer

Agent shall in no way affect the validity of the transactions or

enforceability of the transactions authorized by the Fund by

giving Oral Instructions. The Fund agrees that the Transfer

Agent shall incur no liability to the Fund in acting upon Oral

Instructions given to the Transfer Agent hereunder concerning

such transactions, provided such instructions reasonably appear

to have been received from an Authorized Person.

5. Transactions Not Requiring Instructions. In the

absence of contrary Written Instructions, the Transfer Agent is

authorized to take the following actions:

(a) Issuance of Shares. Upon receipt of a

purchase order from the Distributor for the purchase of Shares

and sufficient information to enable the Transfer Agent to

establish a Shareholder account, and after confirmations of

6
<PAGE>

receipt or crediting of Federal funds for such order from the

Fund's Custodian, the Transfer Agent shall issue and credit the

account of the investor or other record holder with Shares in the

manner described in the Prospectus.

(b) Transfer of Shares: Uncertificated

Securities. Where a Shareholder does not hold a certificate

representing the number of Shares in his account and does provide

the Transfer Agent with instructions for the transfer of such

Shares which include a signature guaranteed by a national bank or

registered broker/dealer and such other appropriate documentation

to permit a transfer, then the Transfer Agent shall register such

Shares and shall deliver them pursuant to instructions received

from the transferor, pursuant to the rules and regulations of the

SEC, and the law of the Commonwealth of Massachusetts relating to

the transfer of shares of beneficial interest.

issues share certificates, the following provisions will apply:

(i) The Fund will supply the Transfer Agent

with a sufficient supply of share certificates

representing Shares, in the form approved from time to

time by the Board of Directors of the Fund, and, from

time to time, shall replenish such supply upon request

of the Transfer Agent. Such share certificates shall

be properly signed, manually or by facsimile signature,

by the duly authorized officers of the Fund, whose

names and positions shall be set forth on Appendix A,

7
<PAGE>

and shall bear the corporate seal or facsimile thereof

of the Fund, and notwithstanding the death, resignation

or removal of any officer of the Fund, such executed

certificates bearing the manual or facsimile signature

of such officer shall remain valid and may be issued to

Shareholders until the Transfer Agent is otherwise

directed by Written Instructions.

(ii) In the case of the loss or destruction of

any certificate representing Shares, no new certificate

shall be issued in lieu thereof, unless there shall

first have been furnished an appropriate bond of

indemnity issued by the surety company approved by the

Transfer Agent.

(iii) Upon receipt of signed share certificates,

which shall be in proper form for transfer, and upon

cancellation or destruction thereof, the Transfer Agent

shall countersign, register and issue new certificates

for the same number of Shares and shall deliver them

Pursuant to instructions received from the transferor,

the rules and regulations of the SEC, and the law of

the Commonwealth of Massachusetts relating to the

transfer of shares of beneficial interest.

(iv) Upon receipt of the share certificates,

which shall be in proper form for transfer, together

with the Shareholder's instructions to hold such share

certificates for safekeeping, the Transfer Agent shall

8
<PAGE>

reduce such Shares to uncertificated status, while

retaining the appropriate registration in the name of

the Shareholder upon the transfer books.

(v) Upon receipt of written instructions from a

Shareholder of uncertificated securities for a

certificate in the number of shares in his account, the

Transfer Agent will issue such share certificates and

deliver them to the Shareholder.

(d) Redemption of Shares. Upon receipt of a

redemption order from the Distributor, the Transfer Agent shall

redeem the number of Shares indicated thereon from the redeeming

Shareholder's account and receive from the Fund's Custodian and

disburse to the redeeming Shareholder the redemption proceeds

therefor, or arrange for direct payment of redemption proceeds to

such Shareholders by the Fund's Custodian, in accordance with

such procedures and controls as are mutually agreed upon from

time to time by and among the Fund, the Transfer Agent and the

Fund's Custodian.

6. Authorized Shares. The Fund's authorized capital

stock consists of ten billion (10,000,000,000) shares of Common

Stock. The Transfer Agent shall record issues of all Shares and

shall notify the Fund in case any proposed issue of Shares by the

Fund shall result in an over-issue as defined by Section B-104(2)

of Article 8 of the Maryland Uniform Commercial Code. In case

any issue of Shares would result in such an over-issue, the

Transfer Agent shall refuse to issue said Shares and shall not

9
<PAGE>

countersign and issue certificates for such Shares. The Fund

agrees to notify the Transfer Agent promptly of any change in the

number of Shares registered under the 1933 Act.

7. Dividends and Distributions. The Fund shall

furnish the Transfer Agent with appropriate evidence of action by

the Fund's Board of Directors authorizing the declaration and

payment of dividends and distributions as described in the

Prospectus. After deducting any amount required to be withheld

by any applicable tax laws, rules and regulations or other

applicable laws, rules and regulations, the Transfer Agent shall,

in accordance with the instructions in proper form from a

Shareholder and the provisions of the Fund's Declaration and

Prospectus, issue and credit the account of the Shareholder with

Shares, or, if the Shareholder so elects, pay such dividends or

distribution in cash or pay such dividends to the Shareholders in

the manner described in the Prospectus. In lieu of receiving

from the Fund's Custodian and paying to Shareholders cash

dividends or distributions, the Transfer Agent may arrange for

the direct payment of cash dividends and distributions to

Shareholders by the Fund's Custodian, in accordance with such

procedures and controls as are mutually agreed upon from time to

time by and among the Fund, the Transfer Agent and the Fund's

Custodian.

The Transfer Agent shall prepare, file with the

Internal Revenue Service and other appropriate taxing

authorities, and address and mail to Shareholders such returns

10
<PAGE>

and information relating to dividends and distributions paid by

the Fund as are required to be so prepared, filed and mailed by

applicable laws, rules and regulations, or such substitute form

of notice as may from time to time be permitted or required by

the Internal Revenue Service. On behalf of the Fund, the

Transfer Agent shall mail certain requests for Shareholders'

certifications under penalties of perjury and pay on a timely

basis to the appropriate Federal authorities any taxes to be

withheld on dividends and distributions paid by the Fund, all as

required by applicable Federal tax laws and regulations.

In accordance with the Prospectus and such procedures

and controls as are mutually agreed upon from time to time by and

among the Fund, the Transfer Agent and the Fund's Custodian, the

Transfer Agent shall (a) arrange for issuance of Shares obtained

through (1) transfers of funds from Shareholders' accounts at

financial institutions, (2) the Pre-Authorized Check Plan, if any

and (3) the Right of Accumulation, if any; (b) arrange for the

exchange of Shares for shares of such other funds designated by

the Fund from time to time; and (c) arrange for systematic

withdrawals from the account of a Shareholder participating in

the Systematic Withdrawal Plan, if any.

8. Communications with Shareholders.

(a) Communications to Shareholders. The Transfer

Agent will address and mail all communications by the Fund to its

Shareholders. including reports to Shareholders, confirmations of

purchases and sales of Fund Shares, monthly statements, dividend

11
<PAGE>

and distribution notices and proxy material for its meetings of

Shareholders. The Transfer Agent will receive and tabulate the

proxy cards for the meetings of the Fund's Shareholders.

(b) Correspondence. The Transfer Agent will

answer such correspondence from Shareholders, securities brokers

and others relating to its duties hereunder and such other

correspondence as may from time to time be mutually agreed upon

between the Transfer Agent and the Fund.

9. Records. The Transfer Agent shall maintain records

of the accounts for each Shareholder showing the following

information:

(a) name, address and United States Tax

Identification or Social Security number;

(b) number and class of Shares held and number

and class of Shares for which certificates, if any, have been

issued, including certificate numbers and denominations;

of each Shareholder, including dividends and distributions paid

and the date and price for all transactions on a Shareholder's

account;

(d) any stop or restraining order placed against

a Shareholder's account;

(e) any correspondence relating to the current

maintenance of a Shareholder's account;

(f) information with respect to withholdings;

and,

12
<PAGE>

(g) any information required in order for the

Transfer Agent to perform any calculations contemplated or

required by this Agreement.

The books and records pertaining to the Fund which are

in the possession of the Transfer Agent shall be the property of

the Fund. Such books and records shall be prepared and

maintained as required by the 1940 Act and other applicable

securities laws and rules and regulations. The Fund, or the

Fund's authorized representatives. shall have access to such

books and records at all times during the Transfer Agent's normal

business hours. Upon the reasonable request of the Fund, copies

of any such books and records shall be provided by the Transfer

Agent to the Fund or the Fund's authorized representative at the

Fund's expense.

10. Ongoing Functions. The Transfer Agent will

perform the following functions on an ongoing basis:

(a) furnish state-by-state registration reports

to the Fund;

(b) calculate Account Executive load or

compensation payment and provide such information to the Fund,

if any;

(d) provide toll-free lines for direct

Shareholder use, plus customer liaison staff with on-line

inquiry capacity;

13
<PAGE>

(e) mail duplicate confirmations to dealers of

their clients' activity, whether executed through the dealer or

directly with the Transfer Agent, if any;

(f) provide detail for underwriter or broker

confirmations and other participating dealer Shareholder

accounting, in accordance with such procedures as may be agreed

upon between the Fund and the Transfer Agent, if any;

(g) provide Shareholder lists and statistical

information concerning accounts to the Fund; and

(h) provide timely notification of Fund activity

and such other information as may be agreed upon from time to

time between the Transfer Agent and the Custodian, to the Fund or

the Custodian.

11. Cooperation with Accountants. The Transfer Agent

shall cooperate with the Fund's independent public accountants

and shall take all reasonable action in the performance of its

obligations under this Agreement to assure that the necessary

information is made available to such accountants for the

expression of their opinion as such may be required by the Fund

from time to time.

12. Confidentiality. The Transfer Agent agrees on

behalf of itself and its employees to treat confidentially all

records and other information relative to the Fund and its prior,

present or potential Shareholders, except, after prior

notification to and approval in writing by the Fund, which

approval shall not be unreasonably withheld and may not be

14
<PAGE>

withheld where the Transfer Agent may be exposed to civil or

criminal contempt proceedings for failure to comply, when

requested to divulge such information by duly constituted

authorities, or when so requested by the Fund.

13. Equipment Failures. In the event of equipment

failures beyond the Transfer Agent's control, the Transfer Agent

shall, at no additional expense to the Fund, take reasonable

steps to minimize service interruptions but shall have no

liability with respect thereto. The foregoing obligation shall

not extend to computer terminals located outside of premises

maintained by the Transfer Agent. The Transfer Agent shall enter

into and shall maintain in effect with appropriate parties one or

more agreements making reasonable provision for emergency use of

electronic data processing equipment to the extent appropriate

equipment is available.

14. Right to Receive Advice.

(a) Advice of Fund. If the Transfer Agent shall

be in doubt as to any action to be taken or omitted by it, it may

request, and shall receive, from the Fund directions or advice,

including Oral or Written Instructions where appropriate.

(b) Advice of Counsel. If the Transfer Agent

shall be in doubt as to any question of law involved in any

action to be taken or omitted by the Transfer Agent, it may

request advice at its own cost from counsel of its own choosing

(who may be counsel for the Advisor, the Fund or the Transfer

Agent at the option of the Transfer Agent).

15
<PAGE>

between directions, advice or Oral or Written Instructions

received by the Transfer Agent pursuant to subparagraph (a) of

this Paragraph and advice received by the Transfer Agent pursuant

to subparagraph (b) of this Paragraph, the Transfer Agent shall

be entitled to rely on and follow the advice received pursuant to

the latter provision alone.

(d) Protection of the Transfer Agent. The

Transfer Agent shall be protected in any action or inaction which

it takes in reliance on any directions, advice or Oral or Written

Instructions received pursuant to subparagraphs (a) or (b) of

this Paragraph which the Transfer Agent, after receipt of any

such directions, advice or Oral or Written Instructions, in good

faith believes to be consistent with such directions, advice or

Oral or Written Instructions, as the case may be. However,

nothing in this Paragraph shall be construed as imposing upon the

Transfer Agent any obligation (i) to seek such directions, advice

or Oral or Written Instructions, or (ii) to act in accordance

with such directions, advice or Oral or Written Instructions when

received, unless, under the terms of another provision of this

Agreement, the same is a condition to the Transfer Agent's

properly taking or omitting to take such action. Nothing in this

subparagraph shall excuse the Transfer Agent when an action or

omission on the part of the Transfer Agent constitutes willful

misfeasance, bad faith, gross negligence or reckless disregard by

16
<PAGE>

the Transfer Agent of its duties and obligations under this

Agreement.

15. Compliance with Governmental Rules and

Regulations. The Transfer Agent undertakes to comply, with all

applicable requirements of the 1933 Act, the 1934 Act, the 1940

Act, the CEA, and any laws, rules and regulations of governmental

authorities having jurisdiction with respect to the duties to be

performed by the Transfer Agent hereunder.

16. Compensation. As compensation for the services

rendered by the Transfer Agent during the term of this Agreement,

the Fund will pay to the Transfer Agent monthly fees that shall

be agreed to from time to time by the Fund and the Transfer

Agent, for each account open at any time during the month for

which payment is being made, plus certain of the Transfer Agent's

expenses relating to such services, as shall be agreed to from

time to time by the Fund and the Transfer Agent.

17. Indemnification. The Fund agrees to indemnify and

hold harmless the Transfer Agent and its nominees and sub-

contractors from all taxes, charges, expenses, assessments,

claims and liabilities (including, without limitation,

liabilities arising under the 1933 Act, the 1934 Act, the 1940

Act, the CEA, and any state and foreign securities and blue sky

laws, all as or to be amended from time to time) and expenses,

including attorneys' fees and disbursements (as long as such

attorney has been retained with the consent of the Fund, which

consent shall not be unreasonably withheld), arising directly or

17
<PAGE>

indirectly from any action or thing which the Transfer Agent

takes or does or omits to take or do (i) at the request or on the

direction of or in reliance on the advice of the Fund or (ii)

upon Oral or Written Instructions, provided, that neither the

Transfer Agent nor any of its nominees or subcontractors shall be

indemnified against any liability to the Fund or to its

Shareholders (or any expenses incident to such liability) arising

out of the Transfer Agent's or such nominee's or such sub-

contractor's own willful misfeasance, bad faith or negligence or

reckless disregard of its duties in connection with the

performance of its duties and obligations specifically described

in this Agreement. In order that the indemnification provision

contained in this Paragraph 17 shall apply, it is understood that

if in any case the Fund may be asked to indemnify or save the

Transfer Agent harmless, the Fund shall be fully and promptly

advised of all pertinent facts concerning the situation in

question, and it is further understood that the Transfer Agent

will use all reasonable care to identify and notify the Fund

promptly concerning any situation which presents or appears

likely to present the probability of such a claim for

indemnification against the Fund. The Fund shall have the option

to defend the Transfer Agent against any claim which may, be the

subject of this indemnification and, in the event that the Fund

so elects, it will so notify the Transfer Agent and thereupon the

Fund shall take over complete defense for the claim, and the

Transfer Agent shall in such situation incur no further legal or

18
<PAGE>

other expenses for which it shall seek indemnification under this

Paragraph 17. The Transfer Agent shall in no case confess any

claim or make any compromise or settlement in any case in which

the Fund will be asked to indemnify the Transfer Agent, except

with the Fund's prior written consent.

18. Responsibility of the Transfer Agent. The

Transfer Agent shall be under no duty to take any action on

behalf of the Fund except as specifically set forth herein or as

may be specifically agreed to by the Transfer Agent in writing.

In the performance of its duties hereunder, the Transfer Agent

shall be obligated to exercise care and diligence and to act in

good faith and to use its best efforts within reasonable limits

to insure the accuracy and completeness of all services performed

under this Agreement. The Transfer Agent shall be responsible

for and shall hold the Fund harmless from all loss, cost, damage

and expense, including reasonable attorney fees (as long as such

attorney has been retained with the consent of the Transfer

Agent, which consent shall not be unreasonably withheld),

incurred by it resulting from any claim, demand, action or suit

arising out of the Transfer Agent's own negligent failure to

perform its duties under this Agreement. In order that the

indemnification provision contained in this Paragraph 18 shall

apply, it is understood that if in any case the Transfer Agent

may be asked to indemnify or save the Fund harmless, the Transfer

Agent shall be fully and promptly advised of all pertinent facts

concerning the situation in question, and it is further

19
<PAGE>

understood that the Fund will use all reasonable care to

indemnify and notify the Transfer Agent promptly concerning any

situation which presents or appears likely to present the

probability of such a claim for indemnification against the

Transfer Agent. The Transfer Agent shall have the option to

defend the Fund against any claim which may be subject to this

indemnification and, in the event that the Transfer Agent so

elects, it will so notify the Fund and thereupon the Transfer

Agent shall take over complete defense for the claim, and the

Fund shall in such situation incur no further legal or other

expenses for which it shall seek indemnification under this

Paragraph 18. The Fund shall in no case confess any claim or

make any compromise or settlement in any case in which the

Transfer Agent will be asked to indemnify the Fund except with

the Transfer Agent's prior written consent.

To the extent that duties, obligations and

responsibilities are not expressly set forth in this Agreement,

however, the Transfer Agent shall not be liable for any act or

omission which does not constitute willful misfeasance, bad faith

or gross negligence on the part of the Transfer Agent or reckless

disregard of such duties, obligations and responsibilities.

Without limiting the generality of the foregoing or of

any other provision of this Agreement, the Transfer Agent in

connection with its duties under this Agreement shall not be

liable for or in respect of (a) the validity or invalidity or

authority or lack thereof of any Oral or Written Instruction,

20
<PAGE>

notice or other instrument which conforms to the applicable

requirements of this Agreement, if any, and which the Transfer

Agent reasonably believes to be genuine, or (b) delays or errors

or loss of data occurring by reason of circumstances beyond the

Transfer Agent's control, including acts of civil or military

authority, national emergencies, labor difficulties, fire,

mechanical breakdown (except as provided in Paragraph 13), flood

or catastrophe, acts of God, insurrection, war, riots or failure

of the mails, transportation, communication or power supply.

Notwithstanding the foregoing, the Transfer Agent shall use its

best efforts to mitigate the effects of the events set forth in

clause (b) above, although such efforts shall not impute any

liability thereto. The Transfer Agent expressly disclaims all

responsibility for consequential damages, including but not

limited to any that may result from performance or non-

performance of any duty or obligation whether express or implied

in this Agreement, and also expressly disclaim any express or

implied warranty of products or services provided in connection

with this Agreement.

19. Duration and Termination. This Agreement shall

continue until termination by the Fund or by the Transfer Agent

on sixty (60) days written notice.

20. Registration as a Transfer Agent. The Transfer

Agent represents that it is currently registered with the

appropriate Federal agency for the registration of transfer

agents, and that it will remain so registered for the duration of

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this Agreement. The Transfer Agent agrees that it will promptly

notify the Fund in the event of any material change in its status

as a registered transfer agent. Should the Transfer Agent fail

to be registered with the appropriate federal agency as a

transfer agent at any time during this Agreement, the Fund may,

on written notice to the Transfer Agent, immediately terminate

this Agreement.

21. Notices. All notices and other communications,

including Written Instructions (collectively referred to as

"Notice" or "Notices" in this Paragraph), hereunder shall be in

writing or by confirming telegram, cable, telex or facsimile

sending device. Notices shall be addressed (a) if to the

Transfer Agent at Provident Financial Processing Corporation,

P.O. Box 8950, Wilmington, Delaware 19899; (b) if to the Fund, at

the address of the Fund; or (c) if to neither of the foregoing,

at such other address as shall have been notified to the sender

of any such Notice or other communication. If the location of

the sender of a Notice and the address of the addressee thereof

are, at the time of sending, more than 100 miles apart, the

Notice may be sent by first-class mail, in which case it shall be

deemed to have been given five days after it is sent, or if sent

by confirming telegram, cable, telex or facsimile sending device,

it shall be deemed to have been given immediately, and, if the

location of the sender of a Notice and the address of the

addressee thereof are, at the time of sending, not more than 100

miles apart, the Notice may be sent by first-class mail, in which

22
<PAGE>

case it shall be deemed to have been given three days after it is

sent, or if sent by messenger, it shall be deemed to have been

given on the day it is delivered, or if sent by confirming

telegram, cable, telex or facsimile sending device, it shall be

deemed to have been given immediately. All postage, cable,

telegram, telex and facsimile sending device charges arising from

the sending of a Notice hereunder shall be paid by the sender.

22. Further Actions. Each party agrees to perform

such further acts and execute such further documents as are

necessary to effectuate the purposes hereof.

23. Amendments. This Agreement or any part hereof may

be changed or waived only by an instrument in writing signed by

the party against which enforcement of such change or waiver is

sought.

24. Delegation of Duties. On thirty (30) days prior

written notice to the Fund, the Transfer Agent may assign its

rights and delegate its duties hereunder to any wholly-owned

direct or indirect subsidiary of Provident National Bank or PNC

Financial Corp, provided that (i) the delegate agrees with the

Transfer Agent to comply with all relevant provisions of the 1940

Act; and (ii) the Transfer Agent and such delegate shall promptly

provide such information as the Fund may request, and respond to

such question as the Fund may ask, relative to the delegation,

including (without limitation) the capabilities of the delegate.

25. Counterparts. This Agreement may be executed in

two or more counterparts, each of which shall be deemed an

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<PAGE>

original, but all of which together shall constitute one and the

same instrument.

26. Miscellaneous. This Agreement embodies the entire

agreement and understanding between the parties hereto, and

supersedes all prior agreements and understandings relating to

the subject matter hereof, provided that the parties hereto may

embody in one or more separate documents their agreement, if any,

with respect to Oral Instructions. The captions in this

Agreement are included for convenience of reference only and in

no way define or delimit any of the provisions hereof or

otherwise affect their construction or effect. This Agreement

shall be deemed to be a contract made in Delaware and governed by

Delaware law. If any provision of this Agreement shall be held

or made invalid by a court decision, statute, rule or otherwise,

the remainder of this Agreement shall not be affected thereby.

This Agreement shall be binding and shall inure to the benefit of

the parties hereto and their respective successors.

IN WITNESS WHEREOF, the parties hereto have caused this

Agreement to be executed by their officers designated below on

the day and year first above written.

{SEAL} MORGAN STANLEY CASH FUND, INC.

Attest: _____________________ By:

{SEAL} PROVIDENT FINANCIAL
PROCESSING CORPORATION

Attest: ______________________ By:

Exhibit 9(B)

ADMINISTRATION AND ACCOUNTING SERVICES AGREEMENT

THIS AGREEMENT is made as of the 3rd day of July, 1989

by and between PCS CASH FUND, INC., a Maryland Corporation (the

"Fund"), and PROVIDENT FINANCIAL PROCESSING CORPORATION ("PFPC"),

a Delaware corporation which is an indirect wholly-owned

subsidiary of PNC Financial Corp.

W I T N E S S E T H

WHEREAS, the Fund is registered as an open-end,

diversified management investment company under the Investment

Company Act of 1940, as amended (the "1940 Act"); and

WHEREAS, the Fund wishes to retain PFPC to provide

certain administration and accounting services with respect to

shares of the Fund's three investment portfolios PCS Money Market

Portfolio, PCS Tax-Free Money Market Portfolio, and PCS

Government Obligations Money Market Portfolio, and PFPC: is

willing to furnish such services;

NOW, THEREFORE, in consideration of the premises and

mutual covenants herein contained, it is agreed between the

parties hereto as follows:

1. Appointment. The Fund hereby appoints PFPC to

provide certain administration and accounting services to the

Fund for the period and on the terms set forth in this Agreement.

PFPC accepts such appointment and agrees to furnish the services

herein set forth in return for the compensation as provided in

Paragraph 12 of this Agreement. PFPC agrees to comply with all

1
<PAGE>

relevant provisions of the 1940 Act and applicable rules and

regulations thereunder. The Fund may from time to time issue

separate series or classes or classify and reclassify shares of

such series or class. PFPC shall identify to each such series or

class property belonging to such series or class and in such

reports, confirmations and notices to the Fund called for under

this Agreement shall identify the series or class to which such

report, confirmation or notice pertains.

2. Delivery of Documents. The Fund has furnished

PFPC with copies properly certified or authenticated of each of

the following:

(a) Resolutions of the Fund's Board of Directors

authorizing the appointment of PFPC to provide certain

administration and accounting services to the Fund and approving

this Agreement;

(b) Appendix A identifying and containing the

signatures of the Fund's officers and other persons authorized to

issue Oral Instructions and to sign Written Instructions, as

hereinafter defined, on behalf of the Fund;

with the Department of Assessments and Taxation of the state of

Maryland on January 5, 1989 and all amendments thereto (such

Articles of Incorporation, as presently in effect and as they

shall from time to time be amended, are herein called the

"Charter");

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<PAGE>

(d) The Fund's By-Laws and all amendments thereto

(such By-Laws, as presently in effect and as they shall from time

to time be amended, are herein called "By-Laws");

(e) The Investment Advisory Agreement between

Morgan Stanley Asset Management Inc. (the "Advisor") and the Fund

dated as of July 3, 1989 (the "Advisory Agreement");

(f) The Distribution Agreement between the Fund

and Morgan Stanley & Co. Incorporated (the "Distributor") dated

as of July 3, 1989 (the "Distribution Agreement");

(g) The Custodian Agreement between Provident

National Bank ("Provident") and the Fund dated as of July 3, 1989

(the "Custodian Agreement");

(h) The Transfer Agency Agreement between

Provident Financial Processing Corporation and the Fund dated as

of July 3, 1989 (the "Transfer Agency Agreement");

(i) The Fund's Notification of Registration filed

pursuant to Section 8(a) of the 1940 Act on Form N-8A under the

1940 Act as filed with the Securities and Exchange Commission

("SEC") on January _, 1989;

(j) The Fund's most recent Registration Statement

on Form N-1A under the Securities Act of 1933 (the "1933 Act")

(File No. 33-26417) and under the 1940 Act, as filed with the SEC

on January _, 1989 relating to shares of the Fund's Common Stock

(hereinafter "Shares"), $.001 par value, and all amendments

thereto;

3
<PAGE>

(k) The Fund's most recent prospectus or

prospectuses relating to Shares (such prospectus, or

prospectuses, and all amendments and supplements thereto are

herein called the "Prospectus"); and

(l) Before the Fund engages in any transactions

regulated by the Commodity Futures Trading Commission ("CFTC"), a

copy of either (i) a filed notice of eligibility to claim the

exclusion from the definition of "commodity pool operator"

contained in Section 2(a)(1)(A) of the Commodity Exchange Act

("CEA") that is provided in Rule 4.5 under the CEA, together with

all supplements as are required by the CFTC, or (ii) a letter

which has been granted the Fund by the CFTC which states that the

Fund will not be treated as a "pool" as defined in Section

4.10(d) of the CFTC's General Regulations, or (iii) a letter

which has been granted the Fund by the CFTC which states that the

CFTC will not take any enforcement action if the Fund does not

The Fund will furnish PFPC from time to time with

copies, properly certified or authenticated, of all amendments of

or supplements to the foregoing, if any.

3. Definitions.

(a) "Authorized Person". As used in this

Agreement, the term "Authorized Person" means any officer of the

Fund and any other person, whether or not any such person is an

officer or employee of the Fund, duly authorized by the Board of

Directors of the Fund to give Oral and Written Instructions on

4
<PAGE>

behalf of the Fund and listed on Appendix A listing persons duly

authorized to give Oral and Written Instructions on behalf of the

Fund as may be received by PFPC from time to time.

(b) "Oral Instructions". As used in this

Agreement, the term "Oral Instructions" means oral instructions

actually received by PFPC from an Authorized Person or from a

person reasonably believed by PFPC to be an Authorized Person.

The Fund agrees to deliver to PFPC, at the time and in the manner

specified in Paragraph 4(b) of this Agreement, Written

Instructions confirming Oral Instructions.

Agreement, the term "Written Instructions" means written

instructions delivered by hand, mail, tested telegram, cable,

telex or facsimile sending device, and received by PFPC, signed

by two Authorized Persons.

4. Instructions Consistent with Charter, etc.

(a) Unless otherwise provided in this Agreement,

PFPC shall act only upon Oral and Written Instructions. Although

PFPC may know of the provisions of the Charter and By-Laws of the

Fund, PFPC may assume that any Oral or Written Instructions

received hereunder are not in any way inconsistent with any

provisions of such Charter or By-Laws or any vote, resolution or

proceeding of the Shareholders, or of the Board of Directors, or

of any committee thereof.

(b) PFPC shall be entitled to rely upon any Oral

Instructions and any Written Instructions actually received by

5
<PAGE>

PFPC pursuant to this Agreement. The Fund agrees to forward to

PFPC Written Instructions confirming Oral Instructions in such

manner that the Written Instructions are received by PFPC,

whether by hand delivery, telex, facsimile sending device or

otherwise, by the close of business of the same day that such

Oral Instructions are given to PFPC. The Fund agrees that the

fact that such confirming Written Instructions are not received

by PFPC shall in no way affect the validity of the transactions

or enforceability of the transactions authorized by the Fund by

giving Oral Instructions. The Fund agrees that PFPC shall incur

no liability to the Fund in acting upon Oral Instructions given

to PFPC hereunder concerning such transactions, provided such

instructions reasonably appear to have been received from an

Authorized Person.

5. Services on a Continuing Basis.

(a) PFPC will perform the following accounting

functions on a daily basis:

(1) Journalize the Fund's investment,

capital share and income and expense activities;

(2) Verify investment buy/sell trade

tickets when received from the Advisor and transmit trades

to the Fund's custodian for proper settlement;

(3) Maintain individual ledgers for

investment securities;

(4) Maintain historical tax lots for each

security;

6
<PAGE>

(5) Reconcile cash and investment balances

of the Fund with the custodian, and provide the Advisor with

the beginning cash balance available for investment

purposes;

(6) Update the cash availability throughout

the day as required by the Advisor;

(7) Post to and prepare the Fund; Statement

of Assets and Liabilities and the Statement of Operations;

(8) Calculate various contractual expenses

(e.g., advisory and custody fees);

(9) Develop expense budgets, monitor the

expense accruals and notify Fund management of any proposed

adjustments;

(10) Control all disbursements from the Fund

and authorize such disbursements upon Written Instructions;

(11) Calculate capital gains and losses;

(12) Determine the Fund's net income;

(13) Obtain security market quotes from

independent pricing services, or if such quotes are

unavailable, then obtain such prices from the Advisor, and

in either case calculate the market value of the Fund's

investments;

(14) Transmit or mail a copy of the daily

portfolio valuation to the Advisor;

7
<PAGE>

(15) Determine the Fund's daily distributable

income according to procedures described in the Prospectus

and Statement of Additional Information;

(16) Compute the net asset value of the Fund;

and

(17) Compute the Fund's yields, total return,

expense ratios, portfolio turnover rate and portfolio

average dollar weighted maturity.

(b) In addition to the accounting services

described in the foregoing Paragraph 5(a), PFPC will:

(1) Prepare monthly financial statements,

which will include the following items:

Schedule of Investments

Statement of Assets and Liabilities

Statement of Operations

Statement of Changes in Net Assets

Cash Statement

Schedule of Capital Gains and Losses;

(2) Prepare quarterly broker security

transactions summaries;

(3) Prepare monthly security transaction

listings;

(4) Supply various fund statistical data as

requested on an ongoing basis;

8
<PAGE>

(5) Prepare for execution and file the

Fund's Federal and state income tax returns and Federal

excise tax returns;

(6) Prepare and file the Fund's Semi-Annual

Reports with the SEC on Form N-SAR;

(7) Prepare and file with the SEC the Fund's

annual, semi-annual, and quarterly Shareholder reports;

(8) Assist in the filing of the registration

statements on Form N-1A;

(9) Prepare and file Form 24F-2 Notices

required to be filed with the SEC relating to the

registration of Shares;

(10) After the initial state registration of

the Fund's Shares:

(i) make all of the filings and take

all appropriate actions necessary to maintain and renew

state registration of the Fund's Shares;

(ii) monitor the Fund's compliance with

the amounts and the conditions of each state's

registration of the Fund's Shares;

(11) Prepare and file annual sales reports

with state agencies responsible for enforcement of blue sky

laws in such jurisdictions as requested by the Fund, and

file such other materials with such agencies as requested by

the Fund;

9
<PAGE>

(12) Monitor the Fund's status as a regulated

investment company under Sub-chapter M of the Internal

Revenue Code of 1986, as amended;

(13) Maintain the Fund's fidelity bond as

required by the 1940 Act and obtain a directors and officers

liability policy; and

(14) Determine annual ordinary income and

capital gain distributions to Shareholders to avoid federal

excise tax to the extent possible based on information given

PFPC.

6. Records. PFPC shall keep the following records:

(a) all books and records with respect to the

Fund's books of account; and

(b) records of the Fund's securities

transactions.

The books and records pertaining to the Fund which are

in the possession of PFPC shall be the property of the Fund.

Such books and records shall be prepared and maintained as

required by the 1940 Act and other applicable securities laws and

rules and regulations. The Fund, or the Fund's authorized

representatives, shall have access to such books and records at

all times during PFPC's normal business hours. Upon the

reasonable request of the Fund, copies of any such books and

records shall be provided by PFPC to the Fund or the Fund's

authorized representative at the Fund's expense.

10
<PAGE>

7. Liaison With Accountants. PFPC shall act as

liaison with the Fund's independent public accountants and shall

provide account analyses, fiscal year summaries, and other audit

related schedules. PFPC shall take all reasonable action in the

performance of its obligations under this Agreement to assure

that the necessary information is made available to such

accountants for the expression of their opinion, as such may be

required by the Fund from time to time.

8. Confidentiality. PFPC agrees on behalf of itself

and its employees to treat confidentially all records and other

information relative to the Fund and its prior, present or

potential Shareholders and relative to the Advisor and its prior,

present or potential customers, except, after prior notification

to and approval in writing by the Fund, which approval shall not

be unreasonably withheld and may not be withheld where PFPC may

be exposed to civil or criminal contempt proceedings for failure

to comply, when requested to divulge such information by duly

constituted authorities, or when so requested by the Fund.

9. Equipment Failures. In the event of equipment

failures beyond PFPC's control, PFPC shall, at no additional

expense to the Fund, take reasonable steps to minimize service

interruptions but shall have no liability with respect thereto.

PFPC shall enter into and shall maintain in effect with

appropriate parties one or more agreements making reasonable

provision for emergency use of electronic data processing

equipment to the extent appropriate equipment is available.

11
<PAGE>

10. Right to Receive Advice.

(a) Advice of Fund. If PFPC shall be in doubt as

to any action to be taken or omitted by it, it may request, and

shall receive, from the Fund directions or advice, including Oral

or Written Instructions where appropriate.

(b) Advice of Counsel. If PFPC shall tie in

doubt as to any question of law involved in any action to be

taken or omitted by PFPC, it may request advice at its own cost

from counsel of its own choosing (who may be counsel for the

Advisor, the Fund or PFPC, at the option of PFPC).

between directions, advice or Oral or Written Instructions

received by PFPC pursuant to subsection (a) of this paragraph and

advice received by PFPC pursuant to subsection (b) of this

paragraph, PFPC shall be entitled to rely on and follow the

advice received pursuant to the latter provision alone.

(d) Protection of PFPC. PFPC shall be protected

in any action or inaction which it takes in reliance on any

directions, advice or Oral or Written Instructions received

pursuant to subsections (a) or (b) of this paragraph which PFPC,

after receipt of any such directions, advice or Oral or Written

Instructions, in good faith believes to be consistent with such

directions, advice or Oral or Written Instructions, as the case

may be. However, nothing in this paragraph shall be construed as

imposing upon PFPC any obligation (i) to seek such directions,

advice or Oral or Written Instructions, or (ii) to act in

12
<PAGE>

accordance with such directions, advice or Oral or Written

Instructions when received, unless, under the terms of another

provision of this Agreement, the same is a condition to PFPC's

properly taking or omitting to take such action. Nothing in this

subsection shall excuse PFPC when an action or omission on the

part of PFPC constitutes willful misfeasance, bad faith, gross

negligence or reckless disregard by PFPC of its duties under this

Agreement.

11. Compliance with Governmental Rules and

Regulations. PFPC undertakes to comply with all applicable

requirements of the 1933 Act, the 1934 Act, the 1940 Act, the

CEA, and any laws, rules and regulations of governmental

authorities having jurisdiction with respect to the duties to be

performed by PFPC hereunder.

12. Compensation. As compensation for the services

rendered by PFPC during the term of this Agreement, the Fund will

pay to PFPC an annual fee calculated daily and payable monthly,

as may be agreed to in writing from time to time by the Fund and

PFPC.

13. Indemnification. The Fund agrees to indemnify and

hold harmless PFPC and its nominees from all taxes, charges,

expenses, assessments, claims and liabilities (including, without

limitation, liabilities arising under the 1933 Act, the

Securities Exchange Act of 1934, the 1940 Act, the CEA, and any

state and foreign securities and blue sky laws, all as or to be

amended from time to time) and expenses, including attorneys'

13
<PAGE>

fees and disbursements (as long as such attorney has been

retained with the consent of the Fund, which consent shall not

unreasonably be withheld), arising directly or indirectly from

any action or thing which PFPC takes or does or omits to take or

do (i) at the request or on the direction of or in reliance on

the advice of the Fund or (ii) upon Oral or Written Instructions,

provided, that neither PFPC nor any of its nominees shall be

indemnified against any liability to the Fund or to its

Shareholders (or any expenses incident to such liability) arising

out of PFPC's own willful misfeasance, bad faith, negligence or

reckless disregard of its duties and obligations under this

Agreement. In order that the indemnification provision contained

in this Paragraph 13 shall apply, it is understood that if in any

case the Fund may be asked to indemnify or save PFPC harmless,

the Fund shall be fully and promptly advised of all pertinent

facts concerning the situation in question, and it is further

understood that PFPC will use all reasonable care to identify and

notify the Fund promptly concerning any situation which presents

or appears likely to present the probability of such a claim for

indemnification against the Fund. The Fund shall have the option

to defend PFPC against any claim which may be subject to this

indemnification and, in the event that the Fund so elects, it

will so notify PFPC and thereupon the Fund shall take over

complete defense for the claim, and PFPC shall in such situation

incur no further legal or other expenses for which it shall seek

indemnification under this Paragraph 13. PFPC shall in no case

14
<PAGE>

confess any claim or make any compromise or settlement in any

case in which the Fund will be asked to indemnify PFPC, except

with the Fund's prior written consent.

14. Responsibility of PFPC. PFPC shall be under no

duty to take any action on behalf of the Fund except as

specifically set forth herein or as may be specifically agreed to

by PFPC in writing. In the performance of its duties hereunder,

PFPC shall be obligated to exercise care and diligence and to act

in good faith and to use its best efforts within reasonable

limits in performing services provided for under this Agreement,

but PFPC shall not be responsible for any act or omission which

does not constitute willful misfeasance, bad faith or gross

negligence on the part of PFPC or reckless disregard by PFPC of

such duties under this Agreement. PFPC shall be responsible for

and shall hold the Fund harmless from all loss, cost, damage and

expense, including reasonable attorney fees (as long as such

attorney has been retained with the consent of PFPC, which shall

not be unreasonably withheld), incurred by it resulting from any

claim, demand, action or suit arising out of PFPC's own grossly

negligent failure to perform its duties under this Agreement. In

order that the indemnification provision contained in this

Paragraph 14 shall apply, it is understood that if in any case

PFPC may be asked to indemnify or save the Fund harmless, PFPC

shall be fully and promptly advised of all pertinent concerning

the situation in question, and it is further understood that the

Fund will use all reasonable care to identify and notify PFPC

15
<PAGE>

promptly concerning any situation which presents or appears

likely to present the probability of such a claim for

indemnification against PFPC. PFPC shall have the option to

defend the Fund against any claim which may be the subject of

this indemnification and, in the event that PFPC so elects, it

will so notify the Fund and thereupon PFPC shall take over

complete defense for the claim, and the Fund shall in such

situation incur no further legal or other expenses for which it

shall seek indemnification under this Paragraph 14. The Fund

shall in no case confess any claim or make any compromise or

settlement in any case in which PFPC will be asked to indemnify

the Fund except with PFPC's prior written consent.

Without limiting the generality of the foregoing or of

any other provision of this Agreement, PFPC in connection with

its duties under this Agreement shall not be under any duty or

obligation to inquire into and shall not be liable for or in

respect of (a) the validity or invalidity or authority or lack

thereof of any Oral or Written Instruction, notice or other

instrument which conforms to the applicable requirements of this

Agreement, and which PFPC reasonably believes to be genuine; or

(b) delays or errors or loss of data occurring by reason of

circumstances beyond PFPC's control, including acts of civil or

military authority, national emergencies, labor difficulties,

fire, mechanical breakdown (except as provided in Paragraph 9),

flood or catastrophe, acts of God, insurrection, war, riots or

failure of the mails, transportation, communication or power

16
<PAGE>

supply. PFPC expressly disclaims all responsibility for

consequential damages, including but not limited to any that may

result from the performance or non-performance of any duty or

obligation whether express or implied in this Agreement, and also

expressly disclaims any express or implied warranty of products

or services provided in connection with this Agreement.

15. Duration and Termination. This Agreement shall

continue until terminated by the Fund or PFPC on 60 days written

notice.

16. Notices. All notices and other communications,

including Written Instructions (collectively referred to as

"Notice" or "Notices" in this paragraph), hereunder shall be in

writing or by confirming telegram, cable, telex or facsimile

sending device. Notices shall be addressed (a) if to PFPC at

PFPC's address, Bedford Building, 3531 Silverside Road,

Wilmington, Delaware 19810; (b) if to the Fund, at Morgan Stanley

Asset Management, Inc., 1221 Avenue of the Americas, New York,

New York, 10020; or (c) if to neither of the foregoing, at such

other address as shall have been notified to the sender of any

such Notice or other communication. If the location of the

sender of a Notice and the address of the addressee thereof are,

at the time of sending, more than 100 miles apart, the Notice may

be mailed, in which case it shall be deemed to have been given

three days after it is sent, or if sent by confirming telegram,

cable, telex or facsimile sending device, it shall be deemed to

have been given immediately, and, if the location of the sender

17
<PAGE>

of a notice and the address of the addressee thereof are, at the

time of sending, not more than 100 miles apart, the Notice may be

sent by first-class mail, in which case it shall be deemed to

have been given two days after it is sent, or if sent by

messenger, it shall be deemed to have been given on the day it is

delivered, or if sent by confirming telegram, cable, telex and

facsimile sending device it shall be deemed to have been given

immediately. All postage, cable, telex, or facsimile sending

device charges arising from the sending of a Notice hereunder

shall be paid by the sender.

17. Further Actions. Each party agrees to perform

such further acts and execute such further documents as are

necessary to effectuate the purposes hereof.

18. Amendments. This Agreement or any part hereof may

be changed or waived only by an instrument in writing signed by

the party against which enforcement of such change or waiver is

sought.

19. Delegation. On thirty (30) days prior written

notice to the Fund, PFPC may assign its rights and delegate its

duties hereunder to any wholly-owned direct or indirect

subsidiary of Provident National Bank or PNC Financial Corp,

provided that (i) the delegate agrees with PFPC to comply with

all relevant provisions of the 1940 Act; and (ii) PFPC and such

delegate shall promptly provide such information as the Fund may

request, and respond to such questions as the Fund may ask,

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<PAGE>

relative to the delegation, including (without limitation) the

capabilities of the delegate.

20. Counterparts. This Agreement may be executed in

two or more counterparts, each of which shall be deemed an

original, but all of which together shall constitute once and the

same instrument.

21. Miscellaneous. This Agreement embodies the entire

agreement and understanding between the parties thereto, and

supersedes all prior agreements and understandings, relating to