FRANKLIN TEMPLETON INTERNATIONAL TRUST, N-30D, 1996-12-20

FRANKLIN TEMPLETON INTERNATIONAL TRUST
N-30D, 1996-12-20

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Table of Contents

Page

Message from the President 1
Fund Reports
Templeton Pacific Growth Fund 3
Templeton Foreign Smaller
Companies Fund 10
Schedule of Foreign
Tax Withholding 17
Statement of Investments 20
Financial Statements 33
Notes to Financial Statements 36
Report of Independent
Accountants 41

December 15, 1996

Dear Shareholder:

It's a pleasure to bring you the sixth annual report of the Franklin Templeton
International Trust, which covers the fiscal year ended October 31, 1996. The
Trust consists of the Templeton Pacific Growth Fund and the Templeton Foreign
Smaller Companies Fund, which formerly was named the Franklin International
Equity Fund.1

1. The Fund's name was changed on October 1, 1996.

During the reporting period, economic stability, moderate inflation and
relatively low interest rates characterized many economies around the world. As
a result, growing demand for equity securities led to higher stock prices across
a variety of markets in both developed and developing countries. Of course, some
equity markets did not perform as well as others. For instance, the Morgan
Stanley Capital International Europe, Australasia, Far East (MSCI EAFE) Index,
which tracks the equity markets of 18 nations, reported a total return of
+10.80% for the one-year period, while the MSCI Pacific Index, representative of
stock markets in six countries in the region, posted a total return of only
+3.50%.2 As always, it is important to remember that markets experience ups and
downs, and volatility is a normal part of investing. We, therefore, urge you to
focus on the achievement of your long-term investment goals, rather than
concentrating on short-term market cycles.

On the following pages, you will find detailed discussions about the Templeton
Pacific Growth Fund and the Templeton Foreign Smaller Companies Fund. Although
the Funds have different investment objectives and strategies, their managers
share a dedication to the principals of careful selection, broad
diversification, and constant professional supervision. For specific information
about the Funds, including the effects market conditions and management
strategies had upon their performance during the fiscal year, please refer to
the Funds' reports following this letter.

We thank you for your support, welcome your questions, and look forward to
serving your investment needs in the years to come.

Sincerely,

Rupert H. Johnson, Jr.
President
Franklin Templeton International Trust

2. Indices are unmanaged and include price appreciation and reinvestment of
dividends.

TEMPLETON PACIFIC GROWTH FUND

Your Fund's Objective:
The Templeton Pacific Growth Fund seeks to provide long-term growth of capital
by investing in equity securities of which at least 65% trade on markets in the
Pacific Rim.

The year under review was a period of vivid contrasts for Pacific Rim equity
markets. As measured in U.S. dollars, Hong Kong's stock market rose 31.53%,
Malaysia's 24.51%, and Australia's 15.70%. At the same time, Indonesia's equity
market gained 13.30% and Japan's 4.29%. However, China's declined 13.19% and
Thailand's suffered a loss of 28.09%. Within this environment, the Templeton
Pacific Growth Fund delivered a one-year cumulative total return of +11.27%, as
discussed in the Performance Summary on page 7, significantly outperforming the
Morgan Stanley Capital International (MSCI) Pacific Index, which posted a total
return of +3.50%.

As you can see in the chart on page 4, Hong Kong was the Fund's largest
geographic exposure (29.5% of total net assets) on October 31, 1996. During the
reporting period, the Hong Kong stock market rose substantially, posting large
gains in the financial and real estate sectors. Several of our largest
positions, including Cheung Kong Holdings Ltd., Sun Hung Kai Properties Ltd.,
and New World Development Co. Ltd., appreciated in value, and taking advantage
of rising stock prices, we sold our shares of Hong Kong Land Holdings Co. for a
profit.

At the end of the fiscal year, our exposure to Japan represented 20.3% of total
net assets. Although its equity market produced a positive return during the
period, Japan continued to experience problems with a questionable banking
system and, consequently, we remained underweighted there relative to the MSCI
Pacific Index, which had a Japanese weighting of 75.8%. During the fiscal year,
we took profits in Nintendo Co. Ltd., and initiated a position in Daito Trust
Construction Co. Ltd., a real estate company which, in our opinion, has strong
growth potential.

Due to a stronger currency and higher commodity prices, Australia's stock market
performed impressively during the year under review, and Brambles Industries
Ltd., the Fund's second-largest holding, benefited greatly. We participated in
Australia's initial public offering market by purchasing shares of Qantas
Airways Ltd., which, in our opinion, has the potential for strong long-term
growth.

Taking advantage of the considerable rise in Indonesian stock prices, we sold
some of our shares of PT Indosat. Due to improved economic fundamentals and
healthy corporate earnings, the Philippine equity market also rose appreciably,
and we took profits by eliminating our position in Philippine Long Distance
Telephone Co. We also sold some of our holdings of Filinvest Land Inc. for a
gain.

GRAPHIC MATERIAL 1 OMITTED - SEE APPENDIX AT END OF DOCUMENT

Singapore's economy, which is heavily dependent upon the electronics industry,
was weak throughout most of the fiscal year, as global demand for electronics
slowed. Consequently, Singapore's stock market rose only slightly. However, our
holdings of Development Bank of Singapore Ltd., City Developments Ltd., and
Parkway Holdings Ltd. benefited from low interest rates and rising real estate
prices. The Fund also profited when we sold our shares of Singapore Bus Service
Ltd. following strong performance of its stock.

The Chinese, Thai, Pakistani and Indian stock markets did not fare as well as
other Pacific Rim markets. We sought to take advantage of price declines in
China by purchasing shares of Guangshen Railway, which operates the only
railroad between Guangzhou and Shenzhen, the two largest cities in Guangchong
Province.

This discussion reflects the strategies we employed for the Fund during the 12
months under review, and includes our opinions as of the close of the period.
Since economic and market conditions are constantly changing, our strategies,
evaluations, conclusions and decisions regarding portfolio holdings may change
as new circumstances arise. Although past performance of a specific investment
or sector cannot guarantee future performance, such information can be useful in
analyzing securities we purchase or sell for the Fund.

Templeton Pacific Growth Fund
Top 10 Industries on October 31, 1996

Based on Total Net Assets

% of Total
Industry Net Assets
Transportation 14.0%
Multi-Industry 12.3%
Banking 11.6%
Real Estate 10.5%
Electrical & Electronics 6.9%
Telecommunications 5.3%
Forest Products & Paper 4.9%
Textiles & Apparel 4.3%
Construction & Housing 4.0%
Food & Household Products 3.9%

In our opinion, the Pacific Rim continues to offer a variety of investment
opportunities in industrialized nations such as Hong Kong, and in nations rich
with natural resources like Australia. There are, of course, special risks
involved with investing in a portfolio of securities concentrated in a single
geographic region that also contains developing markets. These risks include
currency fluctuations, market volatility, economic, social, and political
uncertainty, and in some cases the relatively small size and lesser liquidity of
these markets. While short-term volatility can be disconcerting, declines of as
much as 40% to 50% are not unusual in emerging markets. For example, Hong Kong's
market has increased 830% in the last 15 years, but has suffered five declines
of more than 20% during that time.*

Templeton Pacific Growth Fund
Top 10 Holdings on October 31, 1996

Based on Total Net Assets

Company % of Total
Industry, Country Net Assets

Cheung Kong Holdings Ltd. 3.3%
Multi-Industry, Hong Kong
New World Development Co. Ltd. 3.1%
Real Estate, Hong Kong
Brambles Industries Ltd. 3.0%
Transportation, Australia
Sun Hung Kai Properties Ltd. 3.0%
Real Estate, Hong Kong
Parkway Holdings Ltd., foreign 2.4%
Real Estate, Singapore
HSBC Holdings PLC 2.2%
Real Estate, Hong Kong
Jardine Strategic Holdings Ltd. 2.1%
Multi-Industry, Hong Kong
Development Bank of Singapore Ltd. 2.0%
Banking, Singapore
Sime Darby Bhd., foreign 1.9%
Multi-Industry, Malaysia
Australia Gas & Light Company 1.9%
Utilities-Electrical & Gas, Australia

For a complete list of portfolio holdings, please see

page 20 of this report.

*Source: Bloomberg. Based on quarterly percentage price change over the 15 years
ended September 30, 1996.

Performance Summary

The Templeton Pacific Growth Fund provided a cumulative total return of +11.27%
for the one-year period ended October 31, 1996. Cumulative total return
represents the change in value of an investment, assuming reinvestment of
dividends and capital gains, and does not include the Fund's initial sales
charge.

We have always maintained a long-term perspective when managing the Fund, and we
encourage shareholders to view their investments in a similar manner. As you can
see from the table on page 9, the Fund has delivered a cumulative total return
of more than 74% since its inception on September 20, 1991.

The Fund's share price, as measured by net asset value, increased 39 cents
($0.39), from $14.11 on October 31, 1995, to $14.50 on October 31, 1996. During
the reporting period, shareholders received distributions totaling $1.140 per
share, of which 21.3 cents ($0.213) represented distributions from net
investment income and 92.7 cents ($0.927)represented distributions from capital
gains, of which 88.5 cents ($0.885) represented long-term capital gains. Of
course, past performance is not predictive of future results, and distributions
will vary depending on income earned by the Fund and any profits realized from
the sale of securities in the portfolio.

The graph on the following page compares the performance of the Templeton
Pacific Growth Fund with the performance of the Morgan Stanley Capital
International (MSCI) Pacific Index since the Fund's inception on September 20,
1991. As you can see, the Fund significantly outperformed the index for most of
the period.

Of course, such unmanaged market indices have inherent performance differentials
in comparison with any fund. They do not pay management fees to cover salaries
of security analysts or portfolio managers, or pay commissions or market spreads
to buy and sell stocks. And, unlike unmanaged indices, mutual funds are
generally not 100% invested because of the need to have cash on hand to redeem
shares. In addition, the performance shown for the Fund includes the maximum
initial sales charge, all Fund expenses and account fees. If operating expenses
such as the Templeton Pacific Growth Fund's had been applied to this index, the
index's performance would have been lower. Please remember that an index is
simply a measure of performance, and one cannot invest directly in an index.
Past performance is not predictive of future results.

GRAPHIC MATERIAL 2 OMITTED - SEE APPENDIX AT END OF DOCUMENT

Templeton Pacific Growth Fund
Periods ended October 31, 1996
Since
Inception
1-Year 3-Year (9/20/91)
Cumulative Total Return1 11.27% 14.00% 74.31%
Average Annual Total Return2 6.27% 2.87% 10.48%
Value of $10,000 Investment3 $10,627 $10,887 $16,649

10/31/92 10/31/93 10/31/94 10/31/95 10/31/96
One-Year Total Return4 9.77% 38.46% 8.46% -5.54% 11.27%

1. Cumulative total return represents the change in value of an investment over
the indicated periods and does not include sales charges.

2. Average annual total return represents the average annual change in value of
an investment over the indicated periods and includes the maximum 4.5% initial
sales charge.

3. These figures represent the value of a hypothetical $10,000 investment in the
Fund over the specified periods and include the maximum 4.5% initial sales
charge.

4. One-year total return represents the change in value of an investment over
the one-year periods ended on the specified dates and does not include the
initial sales charge.

All calculations assume reinvestment of dividends and capital gains at net asset
value. Past expense reductions by the Fund's manager increased the Fund's total
returns. Investment return and principal value will fluctuate with market
conditions, currencies and the economic and political climates of countries
where investments are made, so that your shares, when redeemed, may be worth
more or less than their initial cost. Past performance is not predictive of
future results.

TEMPLETON FOREIGN SMALLER COMPANIESFUND

Your Fund's Objective:
The Templeton Foreign Smaller Companies Fund seeks to provide long-term growth
of capital by investing primarily in equity securities of small capitalization
companies -- those with a market capitalization of $1 billion or less at the
time of investment outside the United States.

We are pleased to bring you this annual report of the Templeton Foreign Smaller
Companies Fund, which covers the 12 months ended October 31, 1996. As discussed
in the Performance Summary on page 14, the Fund delivered a one-year cumulative
total return of +18.49%, significantly outperforming the Morgan Stanley Capital
International Europe, Australasia, Far East Index, which posted a total return
of +10.80%.

Although the Fund's name was changed from the Franklin International Equity Fund
to the Templeton Foreign Smaller Companies Fund, we will con-tinue to invest in
equity securities trading in foreign markets and issued by companies located
outside the United States. However, we have shifted our emphasis to small cap
companies (those with market capitalizations of $1 billion or less at the time
of purchase). We anticipate that by January 1, 1997, the Fund will have at least
65% of its portfolio invested in such securities.

Investing in foreign small cap stocks may help U.S. investors diversify their
portfolios by country and by company size. International diversification may
help to protect against risk of loss because one country's stock market may be
down when other countries' markets are up. Adding small cap stocks to a
portfolio may also help limit risk because their return characteristics differ
from those of other asset classes. Small cap equities may offer value investors
an additional benefit: although roughly 80% of the world's public companies are
small capitalization firms, many analysts continue to focus on the other 20%.
This lack of attention means that small cap stocks often languish at bargain
prices before being discovered.

During the reporting period, the Fund benefited greatly from its European
holdings. Due to declining interest rates and increased participation in
European equities by American investors, many European stocks performed well,
with most major European stock exchanges posting gains of more than 15%, as
measured in local currencies. On October 31, 1996, the Fund's largest European
weightings were the United Kingdom (13.6% of total net assets), Sweden (11.2%),
the Netherlands (10.0%), Spain (7.0%), and Switzerland (5.7%). The Fund profited
from its overweightings in Sweden, the Netherlands, and Spain.

The Fund's performance was also helped by its Asian exposure. In Hong Kong, we
saw strong corporate earnings coupled with cautiously higher stock market
valuations. Although there are investor concerns about China's takeover of Hong
Kong in 1997, we believe that the Chinese government is unlikely to interfere
with Hong Kong's capitalistic economy and that investors in this area should be
rewarded in the long term.

In contrast to Hong Kong, we had difficulty finding bargain-priced stocks in
Japan. On October 31, 1996, the price/earnings ratio of the Japanese stock
market was 104.1 In comparison, stocks in most other developed markets in the
world sold for approximately 12 to 20 times earnings at that time. Although the
Japanese stock market represented 29.6% of the world's market capitalization
outside the U.S., less than 1% of the Fund's total net assets were invested in
Japan at the end of the reporting period because of these high valuations.

GRAPHIC MATERIAL 3 OMITTED - SEE APPENDIX AT END OF DOCUMENT

We made few changes to the Fund's portfolio during the fiscal year. McBride
Plc., a U.K. company, is one example of small cap value we discovered. It is
Europe's largest manufacturer of private label household goods and personal care
products. Private label products have been winning market share in Europe, as
many large retailers have been expanding their private label product lines. In
our opinion, McBride may stand to benefit from this trend, yet we were able to
purchase its stock at what we believe could prove to be a very compelling
valuation.

Looking forward, we are optimistic about the potential for rising global
economic growth. Europe has been showing signs of economic recovery and
potentially higher stock market returns, and most Asian economies continue to
grow at rates in excess of what is anticipated in the U.S. or in Europe. Within
this environment, we will continue to search for foreign small cap stocks that
we believe have the potential to offer high returns for the Fund's shareholders.

Templeton Foreign Smaller Companies Fund
Top 10 Holdings on October 31, 1996

Based on Total Net Assets

Company % of Total
Industry, Country Net Assets

De Boer Winkelbedrijven NV 2.0%
Merchandising, Netherlands
Howden Group Plc. 1.7%
Machinery & Engineering, United Kingdom
Union Bank of Norway 1.6%
Banking, Norway
News Corporation 1.6%
Broadcasting & Publishing, Australia
Peregrine Investments Holdings Ltd. 1.6%
Financial Services, Hong Kong
PT Tambang Timah (Persero) 1.6%
Metals & Mining, Indonesia
Adecco SA 1.5%
Business & Public Services, Switzerland
Ace Limited 1.5%
Insurance, Bermuda
Lex Service Plc. 1.5%
Business & Public Services, United Kingdom
Hazlewood Foods Plc. 1.5%
Food & Household Products, United Kingdom

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

Of course, there are special risks associated with foreign investments in
smaller companies which are heightened in developing markets. These include
political, social and economic uncertainties, price volatility, illiquidity,
currency fluctuation and limited product lines, markets, or financial and
management resources. In addition, developing markets are relatively small and
less liquid. Although the short-term price volatility of smaller companies and
developing markets can be disconcerting, declines of as much as 40% to 50% are
not unusual in emerging markets. For example, the Hong Kong market has increased
830% in the last 15 years, but has suffered five declines of more than 20%
during that time.*

*Source: Bloomberg. Based on quarterly percentage price change over 15 years
ended September 30, 1996.

Templeton Foreign Smaller Companies Fund
Top 10 Industries on October 31, 1996

Based on Total Net Assets

% of Total
Industry Net Assets
Banking 9.8%
Merchandising 7.3%
Food & Household Products 6.7%
Multi-Industry 6.7%
Metals & Mining 6.3%
Broadcasting & Publishing 5.3%
Utilities-Electrical & Gas 4.5%
Forest Products & Paper 3.6%
Business & Public Services 3.5%
Insurance 3.5%

Performance Summary

The Templeton Foreign Smaller Companies Fund provided a cumulative total return
of +18.49% for the one-year period ended October 31, 1996. Cumulative total
return represents the change in value of an investment, assuming reinvestment of
dividends and capital gains, and does not include the Fund's initial sales
charge.

We have always maintained a long-term perspective when managing the Fund, and we
encourage shareholders to view their investments in a similar manner. As you can
see from the table on page 16, the Fund has delivered a cumulative total return
of more than 79% since its inception on September 20, 1991.

The Fund's share price, as measured by net asset value, increased 95 cents
($0.95), from $13.23 on October 31, 1995, to $14.18 on October 31, 1996. During
the reporting period, shareholders received distributions totaling $1.280 per
share, of which 25.4 cents ($0.254) represented distributions from net
investment income and $1.026 represented distributions from capital gains, of
which 96 cents ($0.96) represented long-term capital gains. Of course, past
performance is not predictive of future results, and distributions will vary
depending on income earned by the Fund and any profits realized from the sale of
securities in the portfolio.

The graph on the following page compares the performance of the Templeton
Foreign Smaller Companies Fund with the performance of the Morgan Stanley
Capital International Europe, Australasia, Far East (MSCI EAFE) Index since the
Fund's inception on September 20, 1991. As you can see, the Fund outperformed
the index during the past fiscal year.

Of course, such unmanaged market indices have inherent performance differentials
in comparison with any fund. They do not pay management fees to cover salaries
of security analysts or portfolio managers, or pay commissions or market spreads
to buy and sell stocks. And, unlike unmanaged indices, mutual funds generally
are not 100% invested because of the need to have cash on hand to redeem shares.
In addition, the performance shown for the fund includes the maximum initial
sales charge, all fund expenses and account fees. If operating expenses such as
the Templeton Foreign Smaller Companies Fund's had been applied to this index,
the index's performance would have been lower. Please remember that an index is
simply a measure of performance, and one cannot invest directly in an index.
Past performance is not predictive of future results.

GRAPHIC MATERIAL 4 OMITTED - SEE APPENDIX AT END OF DOCUMENT

Templeton Foreign Smaller Companies Fund

Periods Ended October 31, 1996
Since
Inception
1-Year 3-Year (9/20/91)
Cumulative Total Return1 18.49% 38.11% 79.59%
Average Annual Total Return2 13.18% 9.66% 11.13%
Value of $10,000 Investment3 $11,318 $13,188 $17,153

10/31/92 10/31/93 10/31/94 10/31/95 10/31/96
One-Year Total Return4 1.46% 27.40% 14.56% 1.75% 18.49%

1. Cumulative total return represents the change in value of an investment over
the indicated periods and does not include sales charges.

2. Average annual total return represents the average annual change in value of
an investment over the indicated periods and includes the maximum 4.5% initial
sales charge.

3. These figures represent the value of a hypothetical $10,000 investment in the
Fund over the indicated periods and include the maximum 4.5% initial sales
charge.

4. One-year total return represents the change in value of an investment
over the one-year periods ended on the specified dates and does not include the
initial sales charge.

FRANKLIN TEMPLETON INTERNATIONAL TRUST

Schedule of Foreign Tax Withholding (unaudited)

At October 31, 1996, the two Funds in the Franklin Templeton International Trust
had invested more than 50% of their respective total assets in securities of
foreign corporations. In most instances, foreign taxes were withheld from
dividends paid to the funds on these investments. As in prior years, the Funds
intend to make an election under Section 853 of the Internal Revenue Code. This
election will allow shareholders to treat their proportionate share of foreign
taxes paid by the Funds as having been paid directly by them.

In January 1997, shareholders will receive form 1099-DIV which will include
his/her share of taxes withheld and foreign source income distributed during
calendar year 1996.

Templeton Pacific Growth Fund

a. The following table provides a breakdown by country of foreign source income
and foreign taxes paid to shareholders in December 1995:

Foreign Taxes Foreign Source
Country Withheld Per Share Income Per Share
-------------------------- ------------ -----------
Australia.......................... $0.0032 $0.0390
China.............................. -- 0.0040
Hong Kong ......................... -- 0.0480
Indonesia ......................... 0.0018 0.0041
Japan ............................. 0.0021 0.0139
Korea (South)...................... -- 0.0008
Malaysia .......................... 0.0001 0.0073
New Zealand ....................... 0.0002 0.0012
Philippines ....................... 0.0001 0.0003
Singapore ......................... 0.0004 0.0017
Thailand .......................... 0.0014 0.0083
------------ -----------
Total ............................. $0.0093 $0.1286
============ ===========
b. The following table provides a breakdown by country of foreign source income
and foreign taxes paid to shareholders in June 1996:

Foreign Taxes Foreign Source
Country Withheld Per Share Income Per Share
- -------------------------- ------------ -----------
Australia ......................... $0.0009 $0.0048
China.............................. -- 0.0010
Hong Kong ......................... -- 0.0089
India.............................. -- 0.0001
Indonesia ......................... 0.0008 0.0009
Japan ............................. 0.0010 0.0016
Korea (South)...................... 0.0002 0.0002
Malaysia .......................... 0.0008 0.0010
New Zealand ....................... 0.0003 0.0004
Pakistan........................... 0.0005 0.0008
Philippines ....................... 0.0001 0.0001
Singapore ......................... 0.0004 0.0004
Thailand .......................... 0.0006 0.0016
------------ -----------
Total ............................. $0.0056 $0.0218
============ ===========
Under Section 854(b)(2) of the Internal Revenue Code, the Templeton Pacific
Growth Fund has designated 1.98% of ordinary income dividends paid (including
short-term capital gain distributions) during the fiscal year, as income
qualifying for the dividends received deduction (DRD).

Templeton Foreign Smaller Companies Fund

a. The following table provides a breakdown by country of foreign source income
and foreign taxes paid to shareholders in December 1995:

Foreign Taxes Foreign Source
Country Withheld Per Share Income Per Share
- -------------------------- ------------ -----------
Argentina.......................... $-- $0.0009
Australia.......................... 0.0008 0.0097
Canada............................. 0.0004 0.0028
China.............................. -- 0.0011
Colombia........................... -- 0.0009
Finland............................ -- 0.0015
France............................. 0.0039 0.0054
Hong Kong.......................... -- 0.0214
Indonesia.......................... -- 0.0001
Italy.............................. 0.0001 0.0001
Mexico............................. 0.0004 0.0024
Netherlands........................ 0.0015 0.0153
New Zealand........................ 0.0002 0.0015
Spain.............................. 0.0013 0.0250
Sweden............................. -- 0.0006
Turkey............................. -- 0.0036
United Kingdom..................... 0.0022 0.0160
------------ -----------
Total ............................. $0.0108 $0.1083
============ ===========
b. The following table provides a breakdown by country of foreign source income
and foreign taxes paid to shareholders in June 1996:

Foreign Taxes Foreign Source
Country Withheld Per Share Income Per Share
- -------------------------- ------------ -----------
Argentina.......................... $-- $0.0011
Australia.......................... 0.0003 0.0045
Austria............................ -- 0.0002
Belgium............................ 0.0001 0.0006
Bermuda............................ -- 0.0006
Brazil............................. -- 0.0002
Canada............................. 0.0004 0.0019
China.............................. -- 0.0007
Colombia........................... -- 0.0004
Finland............................ 0.0006 0.0037
France............................. 0.0010 0.0068
Greece............................. -- 0.0024
Hong Kong.......................... -- 0.0072
India.............................. -- 0.0001
Italy.............................. 0.0004 0.0022
Korea (South)...................... 0.0001 0.0005
Mexico............................. -- 0.0008
Netherlands........................ 0.0015 0.0076
New Zealand........................ 0.0002 0.0011
Norway............................. 0.0005 0.0022

Foreign Taxes Foreign Source
Country Withheld Per Share Income Per Share
- -------------------------- ------------ -----------
Peru............................... -- 0.0002
Portugal........................... 0.0002 0.0008
Singapore.......................... -- 0.0017
Spain.............................. 0.0012 0.0079
Sweden............................. 0.0012 0.0119
Switzerland........................ 0.0004 0.0021
United Kingdom..................... 0.0021 0.0126
------------ -----------
Total.............................. $0.0102 $0.0820
============ ===========

The Funds hereby designate the total foreign taxes paid and foreign source
income received, on a per share basis as detailed above, as payments qualifying
under Section 853 of the Code. Shareholders are advised to check with their tax
advisors for information on the treatment of these amounts on their individual
income tax return.

FRANKLIN TEMPLETON INTERNATIONAL TRUST

Statement of Investments in Securities and Net Assets, October 31, 1996

Shares/ Value
Country* Warrants Templeton Pacific Growth Fund (Note 1)
Common Stocks & Warrants 100.4%

<S> <C> <C> <C>
Australia 13.8%
AU 210,635 Australian Gas & Light Company......................................... $ 1,155,070
AU 110,000 Brambles Industries Ltd. .............................................. 1,821,841
AU 187,000 Coles Myer Ltd., A .................................................... 683,147
AU 277,869 GIO Austrailia Holdings Ltd. .......................................... 715,641
AU 872,017 Goodman Fielder Ltd. .................................................. 1,022,724
AU 170,000 Mayne Nickless Ltd., A ................................................ 1,128,924
AU 569,800 National Foods Ltd. ................................................... 699,884
AU 214,884 Pacific Dunlop Ltd. ................................................... 476,797
US 35,800b Qantas Airways Ltd., ADR .............................................. 523,575
AU 1 WMC Ltd. .............................................................. 6
-------------
8,227,609
-------------
China 4.1%
CN 1,784,000 Dongfang Electrical Machinery Co. Ltd., H.............................. 433,760
US 31,400a Guangshen Railway Co. Ltd., ADR........................................ 584,825
CN 600,000 Maanshan Iron & Steel Co. Ltd., H ..................................... 107,085
CN 59,500 Shandong Huaneng Power................................................. 542,938
CN 2,899,000 Shanghai Pechemical Co. Ltd., H........................................ 777,971
-------------
2,446,579
-------------
Hong Kong 29.5%
HK 630,000 Cathay Pacific Airways Ltd. ........................................... 985,877
HK 247,025 Cheung Kong Holdings Ltd. ............................................. 1,980,749
HK 651,795 Dairy Farm International Holdings Ltd. ................................ 394,336
HK 700,000 Gold Peak Industries (Holdings) Ltd. .................................. 434,546
HK 508,000 Grand Hotel Holdings Ltd. ............................................. 213,523
HK 2,430,000 Great Wall Electronic International Ltd. .............................. 273,415
HK 32,200a Hang Lung Development Co. Ltd., warrants............................... 5,789
HK 1,553,059 Hon Kwok Land Investment Co. Ltd. ..................................... 507,161
HK 130,000 Hong Kong Ferry Holdings Co. Ltd. ..................................... 242,104
HK 610,000 Hong Kong Telecommunications Ltd. ..................................... 1,076,860
HK 65,840 HSBC Holdings PLC...................................................... 1,341,119
HK 458,000 Hualing Holdings Ltd. ................................................. 45,017
HK 152,666a Hualing Holdings Ltd., rights.......................................... 197
HK 137,924 Jardine Matheson Holdings Ltd. ........................................ 779,271
HK 393,750 Jardine Strategic Holdings Ltd. ....................................... 1,271,813
HK 43,750a Jardine Strategic Holdings Ltd., warrants.............................. 12,687
HK 325,000 Johnson Electric Holdings Ltd. ........................................ 710,341
HK 85,000a Lai Sun Development Co. Ltd., warrants................................. 8,684
HK 100,000 LI & Fung Ltd. ........................................................ 91,177
HK 800,000 National Mutual Asia Ltd. ............................................. 672,512
Hong Kong (cont.)
HK 320,372 New World Development Co. Ltd. ........................................ $ 1,864,507
HK 100,000 Peregrine Investments Holdings Ltd. ................................... 161,015
HK 10,000a Peregrine Investments Holdings Ltd., warrants.......................... 1,875
HK 550,000 Shun Tak Holdings...................................................... 362,769
HK 107,400 Sing Tao Holdings Ltd. ................................................ 51,740
HK 798,000 South China Morning Post Ltd. ......................................... 681,152
HK 160,000 Sun Hung Kai Properties Ltd. .......................................... 1,820,957
HK 62,500 Swire Pacific Ltd., A ................................................. 551,670
HK 490,000 Wheelock & Co. Ltd. ................................................... 1,102,662
-------------
17,645,525
-------------
India. 2%
IN 24,100 Great Eastern Shipping Co. Ltd., GDR................................... 93,387
-------------
Indonesia 4.6%
ID 53,300a Asia Pacific Resources International, A................................ 293,150
ID 247,000 PT Bank Bali, foreign.................................................. 508,994
ID 200,000 PT Barito Pacific Timber, foreign...................................... 115,915
ID 203,851 PT Indorama Synthetics, foreign........................................ 581,981
US 16,300 PT Indosat, ADR........................................................ 491,038
ID 74,000 PT Inti Indorayon Utama, foreign....................................... 66,715
ID 227,062 PT Pabrik Kertas Tjiwi Kimia, foreign.................................. 233,953
ID 315,000 PT Panasia Indosyntec, foreign......................................... 81,140
ID 379,500 PT Panin Bank, foreign................................................. 378,799
-------------
2,751,685
-------------
Japan 20.3%
JP 149,000 Daicel Chemical Industries Ltd. ....................................... 754,298
JP 61,500 Daito Trust Construction Co. Ltd. ..................................... 778,344
JP 200 East Japan Railway..................................................... 919,318
JP 90,200 Hitachi Ltd. .......................................................... 800,686
JP 76,000 Hokuetsu Paper Mills Ltd. ............................................. 533,029
JP 49,000 Matsushita Electric Industrial Co. Ltd. ............................... 783,793
JP 132,000 Mitsubishi Heavy Industries Ltd. ...................................... 1,015,117
JP 3,000 Nintendo Co. Ltd. ..................................................... 189,840
JP 120 Nippon Telegraph & Telephone Corp. .................................... 838,460
JP 120,000 Nisshinbo Industries Inc. ............................................. 1,045,175
JP 105,000 Nittetsu Mining Co. Ltd. .............................................. 899,763
JP 110,000 Rengo Co. Ltd. ........................................................ 702,848
JP 8,900 Sony Corp. ............................................................ 534,250
JP 30,000 Tenma Corp. ........................................................... 532,607
Japan (cont.)
JP 58,000 Toda Corp. ............................................................ $ 459,290
JP 16,000 Tokyo Style Co. Ltd. .................................................. 243,276
JP 78,000 Toyo Engineering Corp. ................................................ 441,484
JP 53,000 Wacoal Corp. .......................................................... 633,503
-------------
12,105,081
-------------
Malaysia 5.8%
MY 118,000 Commerce Asset-Holding Bhd., foreign................................... 770,631
MY 153,000 Golden Hope Plantations Bhd, foreign................................... 260,400
MY 317,333 Malaysian International Shipping Corp. Bhd., foreign................... 948,294
MY 198,000 Public Finance Bhd., foreign........................................... 305,640
MY 327,600 Sime Darby Bhd., foreign............................................... 1,160,507
-------------
3,445,472
-------------
New Zealand 1.9%
NZ 400,900 Carter Holt Harvey Ltd. ............................................... 901,899
NZ 21,550 Fletcher Challenge Building Ltd. ...................................... 58,390
NZ 21,550 Fletcher Challenge Energy Ltd. ........................................ 61,439
NZ 12,231 Fletcher Challenge Ltd. Forestry Division.............................. 20,421
NZ 43,100 Fletcher Challenge Paper Ltd. ......................................... 78,057
-------------
1,120,206
-------------
Pakistan 2.7%
PK 267,100 Fauji Fertilizer Co. Ltd. ............................................. 523,139
PK 16,000a Hub Power Co. Ltd., GDR, reg. S........................................ 324,000
PK 940,000a Pakistan Telecom Corp. PTC............................................. 759,882
-------------
1,607,021
-------------
Philippines 2.8%
PH 1,930,000a Filinvest Land Inc. ................................................... 653,615
PH 90,460a Philippine National Bank............................................... 1,041,254
-------------
1,694,869
-------------
Singapore 6.3%
SG 140,200 City Developments Ltd., foreign........................................ 1,104,642
SG 100,000 Development Bank of Singapore Ltd., foreign............................ 1,199,602
SG 20,000 G.P. Batteries International Ltd. ..................................... 58,000
SG 380,000 Parkway Holdings Ltd., foreign......................................... 1,416,099
-------------
3,778,343
-------------
South Korea .9%
KR 31,500 Pacific Chemical Co. Ltd. ............................................. 564,236
-------------
Thailand 5.2%
TH 88,800 Bangkok Bank Public Co. Ltd., foreign.................................. $ 947,386
TH 151,500 Chareon Pokphand Feedmill Public Co. Ltd., foreign..................... 588,292
TH 203,833 Industrial Finance Corp. of Thailand, foreign.......................... 587,634
TH 11,350 Oriental Hotel Public Co. Ltd., foreign................................ 62,326
TH 37,140 Thai Farmers Bank Public Co. Ltd. ..................................... 205,403
TH 90,860 Thai Farmers Bank Public Co. Ltd., foreign............................. 694,948
TH 11,357a Thai Farmers Bank Public Co. Ltd., foreign., warrants.................. 17,262
-------------
3,103,251
-------------
United States 2.3%
US 35,000 APL Ltd. .............................................................. 770,000
US 13,600 Motorola Inc. ......................................................... 625,600
-------------
1,395,600
-------------
Total Common Stocks & Warrants (Cost $57,244,748)...................... 59,978,864
-------------
Preferred Stocks
US 6,000 Dairy Farm International Holdings Ltd., conv. pfd. .................... 4,072
US 13,000 Jardine Strategic Holdings Ltd., 7.50%, conv. pfd. .................... 14,235
-------------
Total Preferred Stocks (Cost $19,260).................................. 18,307
-------------
Total Common Stocks, Warrants & Preferred Stocks
(Cost $57,264,008).................................................... 59,997,171
-------------
Face
Amount
Convertible Bonds .1%
US 192,000d MDX Public Co. Ltd., 4.75%, conv., 9/17/03 (Cost $221,564)............. 72,000
-------------
Total Investments (Cost $57,485,572)100.5%............................. 60,069,171
Other Assets and Liabilities, Net(.5)%................................. (329,328)
-------------
Net Assets100.0%....................................................... $59,739,843
=============

At October 31, 1996, the unrealized appreciation based
on the cost of investments for income tax purposes of
$57,729,779 was as follows:
Aggregate gross unrealized appreciation for all investments in
which there was an excess of value over tax cost...................... $ 9,111,857
Aggregate gross unrealized depreciation for all investments in
which there was an excess of tax cost over value...................... (6,772,465)
-------------
Net unrealized appreciation............................................ $ 2,339,392
=============

</TABLE>
CURRENCY LEGEND:
AU - Australia
CN - China
HK - Hong Kong
ID - Indonesia
IN - India
JP - Japan
KR - South Korea
MY - Malaysia
NZ - New Zealand
PH - Philippine
PK - Pakistan
SG - Singapore
TH - Thailand
US - United States

*Securities traded in currency of country indicated and valued in U.S. dollars.
aNon-income producing.
bPurchased in a private placement transaction; resale may only be to qualified
institutional buyers.
dFace amount is stated in foreign currency.

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

FRANKLIN TEMPLETON INTERNATIONAL TRUST

Statement of Investments in Securities and Net Assets, October 31, 1996
<TABLE>
<CAPTION>

Shares/ Value
Country* Warrants Templeton Foreign Smaller Companies Fund (Note 1)
Common Stocks & Warrants 93.0%

<S> <C> <C> <C>
Argentina 1.2%
AR 52,763 aCiadea SA............................................................. $ 236,415
US 14,300 Transportadora de Gas del Sur SA, ADR B................................ 166,238
AR 4,000 YPF Sociedad Anonima................................................... 91,614
US 13,700 YPF Sociedad Anonima, ADR.............................................. 311,675
-------------
805,942
-------------
Australia 4.3%
AU 179,688 Email Ltd. ............................................................ 494,106
AU 88,944 GIO Australia Holdings Ltd. ........................................... 229,072
AU 106,600 National Foods Ltd. ................................................... 130,936
AU 248,311 News Corp. Ltd. ....................................................... 1,092,095
AU 155,477 Pacific Dunlop Ltd. ................................................... 344,981
AU 241,300 Pioneer International Ltd. ............................................ 642,493
-------------
2,933,683
-------------
Austria 1.7%
AT 10,600 Boehler Uddeholm AG.................................................... 793,295
US 3,390 bBoehler Uddeholm AG................................................... 253,705
AT 2,300 aMayr-Melnhof Karton AG................................................ 112,954
-------------
1,159,954
-------------
Belgium .4%
BE 400 Solvay SA.............................................................. 239,500
-------------
Bermuda 1.5%
US 19,100 ACE, Ltd. ............................................................. 1,045,725
-------------
Brazil 1.1%
BR 28,848,000 Bombril SA............................................................. 561,573
US 8,500 Companhia Siderurgica Nacional ADR..................................... 210,969
-------------
772,542
-------------
Canada 1.6%
CA 13,600 Bank of Montreal....................................................... 411,322
CA 21,500 Hudsons Bay Co. ....................................................... 362,409
CA 9,100 London Insurance Group Inc. ........................................... 230,088
CA 9,300 National Bank of Canada................................................ 90,173
-------------
1,093,992
-------------
China 1.5%
US 216,600 bGuangdong Electric Power Development Co Ltd., B....................... 149,868
US 440,000 bGuangdong Kelon Electrical Hldgs Ltd., H.............................. 182,096
CN 265,500 Inner Mongolia Erdos Cashmere Products, B.............................. 126,378
China (cont.)
CN 564,000 Maanshan Iron & Steel Co. Ltd., H ..................................... $ 100,660
US 16,500 Shandong Huaneng Power, ADR............................................ 150,563
CN 163,000 Shenzhen China Bicycles Co. (Holdings) Ltd., B......................... 40,897
CN 1,269,000 Yizheng Chemical Fibre Co. Ltd., H..................................... 293,773
-------------
1,044,235
-------------
Colombia .4%
US 14,100 Banco Ganadero SA, ADR C............................................... 278,475
-------------
Denmark .5%
DK 3,757 Det Danske Traelastkompagni AS......................................... 313,487
-------------
Ecuador .5%
US 200 La Cemento Nacional CA, GDR............................................ 41,400
US 1,400b La Cemento Nacional CA, GDR............................................ 289,800
-------------
331,200
-------------
Finland 2.1%
FI 9,000 Amer Group Ltd., A .................................................... 203,476
FI 84,700a Enso OY, R............................................................. 653,881
FI 6,800 Nokia AB, A............................................................ 314,225
FI 15,000 Outokumpu OY, A........................................................ 253,105
-------------
1,424,687
-------------
France 3.8%
FR 1,786 Alcatel Alsthom SA..................................................... 152,335
FR 3,476 Marine Wendel.......................................................... 313,617
FR 16,392 Pechiney SA, A......................................................... 703,877
FR 1,750a Sa des Galeries Lafayette.............................................. 630,948
FR 5,438 Societe Elf Aquitane SA................................................ 434,891
FR 5,857 Vallourec.............................................................. 327,009
-------------
2,562,677
-------------
Germany .1%
DD 1,600 Moebel Walther AG...................................................... 92,489
-------------
Greece 1.5%
US 10,047b Alpha Credit Bank...................................................... 642,013
GR 6,850 Ergo Bank SA........................................................... 402,170
-------------
1,044,183
-------------
Hong Kong 10.1%
HK 152,000 Baltrans Holdings Ltd. ................................................ 19,658
HK 2,465,400 C.P. Pokphand Co. Ltd. ................................................ 821,035
Hong Kong (cont.)
HK 53,000 Cheung Kong Holdings Ltd. ............................................. $ 424,976
HK 300,000 CNT Group Ltd. ........................................................ 33,755
HK 63,000 Consolidated Electric Power Asia Ltd. ................................. 146,659
HK 202,200 Dairy Farm International Holdings Ltd. ................................ 122,331
HK 88,000 Hang Lung Development Co. Ltd. ........................................ 174,129
HK 57,200 Jardine Matheson Holdings Ltd. ........................................ 323,180
HK 202,500 Jardine Strategic Holdings Ltd. ....................................... 660,150
HK 22,500a Jardine Strategic Holdings Ltd., warrants.............................. 6,525
HK 373,000 Kumagai Gumi Hong Kong Ltd. ........................................... 344,915
HK 502,000 LI & Fung Ltd. ........................................................ 457,709
HK 52,250 Melco International Development Ltd. .................................. 18,076
HK 67,000 Oriental Press Group Limited........................................... 35,527
HK 42,300a Oriental Press Group Ltd., warrants.................................... 3,392
HK 663,000 Peregrine Investments Holdings Ltd. ................................... 1,067,529
HK 66,300a Peregrine Investments Holdings Ltd., warrants.......................... 12,433
HK 1,045,000 Shun Tak Holdings...................................................... 689,260
HK 214,200 Sing Tao Holdings Ltd. ................................................ 103,191
HK 1,686,000 Sinocan Holdings Ltd. ................................................. 801,331
HK 1,978,000 Techtronic Industries Co. Ltd. ........................................ 278,837
HK 76,000 Wing Hang Bank......................................................... 305,683
-------------
6,850,281
-------------
Hungary .1%
US 6,945a,b Tiszai Vegyi Kombinat RT, GDR.......................................... 60,074
-------------
India .1%
US 7,800b Gujarat Narmada Valley Fertilizers Co. Ltd., GDR....................... 21,450
-------------
Indonesia 2.4%
ID 22,500 PT Barito Pacific Timber, foreign ..................................... 13,040
ID 584,500 PT Steady Safe, foreign................................................ 564,601
ID 709,000 PT Tambang Timah (Persero), foreign.................................... 1,065,342
-------------
1,642,983
-------------
Italy 1.3%
IT 23,300 Banco di Sardegna SPA, di Risp......................................... 184,351
IT 58,788 Cartiere Burgo SPA..................................................... 295,255
IT 63,700 Sirti SPA.............................................................. 383,020
IT 20,000 Unione Cementi Marchino Emiliane (Unicem), di Risp..................... 51,305
-------------
913,931
-------------

Luxembourg .4%
LU 2,200 Arbed SA............................................................... $ 258,160
-------------
Mexico .7%
US 7,800 Telmex-Telefonos de Mexico SA, L, ADR.................................. 237,900
MX 109,200 Vitro SA............................................................... 208,065
-------------
445,965
-------------
Netherlands 10.0%
NL 3,962 ABN AMRO NV............................................................ 223,958
NL 2,380 Akzo Nobel NV.......................................................... 299,929
NL 18,200 De Boer Winkelbedrijven NV............................................. 1,324,865
NL 5,800 DSM NV................................................................. 555,539
NL 11,200 Gamma Holdings NV...................................................... 544,635
NL 3,800 Hollandsche Beton Groep NV............................................. 705,326
NL 16,377 Ing Groep NV........................................................... 510,650
NL 11,900 Koninklijke Bijenkorf Beheer NV........................................ 831,187
NL 7,600a Nagron Nationaal Grondbezit NV......................................... 694,350
NL 23,520 NV Holdingsmij de Telegraaf............................................ 506,015
NL 13,200 Philips Electronics NV................................................. 465,274
NL 3,023 Schuttersveld Holding.................................................. 122,057
-------------
6,783,785
-------------
New Zealand 1.6%
NZ 31,112 Fisher & Paykel Ltd. .................................................. 113,792
NZ 329,000 Fletcher Challenge Ltd. Forestry Division.............................. 549,291
NZ 178,200 Tourism Holdings Ltd. ................................................. 378,202
US 3,445a Tranz Rail Holdings Ltd., ADR.......................................... 56,412
-------------
1,097,697
-------------
Norway 4.3%
NO 1,100 Elkem AS............................................................... 14,658
NO 13,500 Fokus Bank AS.......................................................... 78,732
NO 7,400b Fokus Bank AS.......................................................... 43,157
NO 43,132 Hafslund ASA, B........................................................ 317,813
NO 50,800 Helikopter Services Group ASA.......................................... 565,453
NO 43,132a Nycomed ASA, B......................................................... 588,293
NO 38,700 Union Bank of Norway, Primary Capital Certificate...................... 1,104,223
NO 17,000 Unitor AS.............................................................. 186,561
-------------
2,898,890
-------------
Peru .3%
PE 114,000 Telefonica del Peru SA, B.............................................. 241,022
-------------
Portugal .7%
PT 17,400 BPI Socieda de Gestora de Participacoes Socias SA...................... $ 207,140
US 15,000b Portucel Industrial Empresa Product Celulose, ADR...................... 92,421
PT 20,800 Sociedade Construcoes Soares da Costa SA............................... 174,772
-------------
474,333
-------------
South Korea .9%
KR 4,190 Byucksan Development Co. Ltd. ......................................... 79,109
KR 3,540 Daegu Bank Co. Ltd. ................................................... 44,986
KR 2,280 Daehan Synthetic Fiber Co. Ltd. ....................................... 247,799
KR 4,230 Pohang Iron & Steel Co. Ltd. .......................................... 268,896
-------------
640,790
-------------
Spain 7.0%
ES 6,550 Banco Bilbao Vizcaya................................................... 318,273
ES 2,500 Banco de Andalucia..................................................... 356,597
ES 9,966 Banco de Valencia SA................................................... 170,272
ES 4,367 Banco Pastor SA........................................................ 260,114
ES 850 Banco Popular Espanol SA............................................... 162,479
ES 60,600 Compania Sevillana de Electricidad..................................... 579,427
ES 215 Cubiertas y Mzov SA.................................................... 15,367
ES 6,000 Dragados y Construcciones SA........................................... 80,411
ES 13,300 Electricas Reunidas de Zaragoza........................................ 385,673
ES 56,135 Energia e Industrias Aragonesas Eia S.................................. 287,725
ES 16,000 Gesa-Gas y Electricidad SA............................................. 877,777
ES 46,800 Iberdrola SA........................................................... 496,994
ES 37,800 Telefonica de Espana SA................................................ 758,400
-------------
4,749,509
-------------
Sweden 11.2%
SE 26,800a Catena, A.............................................................. 269,183
SE 53,600a Celsius AB, B.......................................................... 697,428
SE 49,420a Dahl International AB.................................................. 928,834
SE 9,200 Electrolux AB, B ...................................................... 512,433
SE 39,600a Enator AB, B........................................................... 879,866
SE 13,100 Esselte AB, B ......................................................... 293,060
SE 2,765a Fastighets Naeckebro AB, A............................................. 43,341
SE 13,400 Foereningsbanken AB, A................................................. 55,060
SE 35,600 Marieberg Tidnings AB, A .............................................. 866,839
SE 15,000 Munksjo AB............................................................. 148,379
SE 5,400 SKF AG, A.............................................................. 117,927
SE 5,000 Stadshypotek AB, A..................................................... 131,259
Sweden (cont.)
SE 12,000b Stadsyhpotek AS, A..................................................... $ 315,021
SE 56,000 Stena Line AB, B free.................................................. 251,408
SE 44,500 Stora Kopparbergs Bergslags AB, B...................................... 572,249
SE 27,650 Svenska Handelsbanken, A............................................... 681,677
SE 50,600a Swedish Match AB....................................................... 150,930
SE 33,300 Volvo AB, B............................................................ 691,744
-------------
7,606,638
-------------
Switzerland 5.7%
CH 110 ABB AG, br. ........................................................... 136,073
CH 3,525a Adecco SA.............................................................. 998,523
CH 180 Baloise-Holding........................................................ 376,336
CH 740 Bucher Holding AG...................................................... 537,990
CH 200 Ciba-Geigy AG.......................................................... 246,614
CH 200 Kuoni Reisen Holding AG, B............................................. 450,622
CH 330 Sarna Kunststoff Holding AG............................................ 316,227
CH 400 SMH AG, br. ........................................................... 245,506
CH 1,100 Swisslog Holding AG.................................................... 295,320
CH 780 Zehnder Holding AG..................................................... 302,685
-------------
3,905,896
-------------
Thailand .2%
TH 14,600a Alphatec Electronics Pub. Co. Ltd., foreign............................ 115,678
TH 1,600 Chareon Pokphand Feedmill Public Co. Ltd., foreign..................... 6,213
-------------
121,891
-------------
Turkey .2%
TR 848,400a Tofas Turk Otomobil Fabrikasi AS, GDR.................................. 135,744
-------------
United Kingdom 13.6%
GB 693,111 Albert Fisher Group Plc. .............................................. 451,273
GB 91,700 Anglian Group Plc. .................................................... 352,256
GB 216,900 Apv Plc. .............................................................. 264,788
GB 469,200a Cordiant Plc. ......................................................... 778,996
GB 717,000 Hazlewood Foods Plc. .................................................. 1,003,679
GB 198,900 Hillsdown Holdings Plc. ............................................... 568,184
GB 880,000 Howden Group Plc. ..................................................... 1,153,070
GB 75,400 Kwik Save Group Plc. .................................................. 390,893
GB 173,000 Lex Service Plc. ...................................................... 1,023,594
GB 154,800 London Pacific Group Ltd. ............................................. 584,569
GB 314,100 McBride Plc. .......................................................... 774,565
GB 184,049 Meggitt Plc. .......................................................... 319,051
United Kingdom (cont.)
GB 18,969 National Westminster Bank Plc. ........................................ $ 216,595
GB 432,800a Raine Plc. ............................................................ 107,432
GB 78,932 Safeway Plc. .......................................................... 468,304
GB 31,300 Thames Water Group Plc. ............................................... 282,503
GB 172,000 Wace Group Plc. ....................................................... 194,576
GB 60,000a Wagon Industrial Holdings Plc. ........................................ 299,336
-------------
9,233,664
-------------
Total Common Stocks & Warrants (Cost $59,058,853) ..................... 63,225,474
-------------
Preferred Stocks 2.3%
NL 4,440 Ballast Nedam NV, ctf., conv., pfd. ................................... 209,628
BR 3,080,000 Cia Brasileira de Petroleo Ipiranga, pfd. ............................. 41,101
BR 1,806,000 Coteminas Cia Tecidos Norte de Minas, pfd. ............................ 606,453
US 10,000 Jardine Strategic Holdings Ltd., 7.50%, conv. pfd. .................... 10,950
BR 1,516,000 Weg SA, pfd. .......................................................... 694,993
-------------
Total Preferred Stocks (Cost $1,732,128)............................... 1,563,125
-------------
Total Common Stocks, Warrants & Preferred Stocks
(Cost $60,790,981).................................................... 64,788,599
-------------

Face
Amount
Convertible Bonds .4%
US 250,000d Amer Group Ltd., 6.25%, conv., 6/15/03 (Cost $246,252)................. 260,000
-------------
Total Investment before Repurchase Agreement
(Cost $61,037,233).................................................... 65,048,599
-------------
c Receivable from Repurchase Agreement 3.9%
US 2,733,600 Bank of America, 5.52%, 11/01/96 (Maturity Value $2,680,120)
(Cost $2,674,000)
Collateral: U.S. Treasury Note, 5.375%, 11/30/97...................... 2,674,000
-------------
Total Investments (Cost $63,711,233) 99.6%............................. 67,722,599
Other Assets and Liabilities, Net .4%.................................. 244,036
-------------
Net Assets 100.0%...................................................... $67,966,635
=============

At October 31, 1996, the unrealized appreciation based
on the cost of investments for income tax purposes of
$63,955,812 was as follows:
Aggregate gross unrealized appreciation for all investments in which
there was an excess of value over tax cost............................ $ 9,097,650
Aggregate gross unrealized depreciation for all investments in which
there was an excess of tax cost over value............................ (5,330,863)
-------------
Net unrealized appreciation............................................ $ 3,766,787
=============

</TABLE>
CURRENCY LEGEND:
AR - Argentina
AT - Austria
AU - Australia
BE - Belgium
BR - Brazil
CA - Canada
CH - Switzerland
CN - China
DD - Germany
DK - Denmark
ES - Spain
FI - Finland
FR - France
GB - United Kingdom
GR - Greece
HK - Hong Kong
ID - Indonesia
IT - Italy
KR - South Korea
LU - Luxembourg
MX - Mexico
MY - Malaysia
NL - Netherlands
NO - Norway
NZ - New Zealand
PE - Peru
PT - Portugal
SE - Sweden
TH - Thailand
TR - Turkey
US - United States

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

FRANKLIN TEMPLETON INTERNATIONAL TRUST

Financial Statements

Statements of Assets and Liabilities
October 31, 1996

Templeton Templeton
Pacific Foreign Smaller
Growth Fund Companies Fund
---------- -----------
Assets:
Investments in securities:
<S> <C> <C>
At identified cost.............................................................. $57,485,572 $61,037,233
========== ===========
At value........................................................................ 60,069,171 65,048,599
Receivables from repurchase agreements, at value and cost........................ -- 2,674,000
Cash............................................................................. -- 137,436
Receivables:
Dividends and interest.......................................................... 216,311 228,162
Capital shares sold............................................................. 1,276,691 212,822
Investments securities sold..................................................... 9,379 369,006
---------- -----------
Total assets..................................................................... 61,571,552 68,670,025
---------- -----------
Liabilities:
Payables:
Investment securities purchased................................................ 72,930 513,813
Capital shares repurchased..................................................... 75,932 48,769
Distribution fees.............................................................. 37,437 35,413
Management fees................................................................ 54,050 57,290
U.S. bank overdraft............................................................. 1,532,699 --
Accrued expenses and other liabilities.......................................... 58,661 48,105
---------- -----------
Total liabilities................................................................ 1,831,709 703,390
---------- -----------
Net assets, at value ............................................................ $59,739,843 $67,966,635
========== ===========
Net assets consist of:
Undistributed net investment income............................................. $ 34,376 $ 900,210
Unrealized appreciation on investments and translation of assets and
liabilities denominated in foreign currencies................................... 2,583,599 4,011,366
Accumulated net realized gain (loss) from investments and
foreign currency transactions................................................... (35,070) 3,430,123
Capital shares.................................................................. 57,156,938 59,624,936
---------- -----------
Net assets, at value ............................................................ $59,739,843 $67,966,635
========== ===========
Shares outstanding .............................................................. 4,120,190 4,792,931
========== ===========
Net asset value per share........................................................ $14.50 $14.18
========== ===========
Maximum offering price........................................................... $15.18 $14.85
========== ===========
Representative computation of net asset value and offering price per share:
Net asset value and redemption price per share (Pacific Growth)
($59,739,843 / 4,120,190) ...................................................... $14.50
==========
Maximum offering price (100/95.5 of $14.50 )..................................... $15.18
==========

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

FRANKLIN TEMPLETON INTERNATIONAL TRUST

Financial Statements (cont.)

Statements of Operations
for the year ended October 31, 1996

Templeton Templeton
Pacific Foreign Smaller
Growth Fund Companies Fund
--------- -----------
Investment Income:
<S> <C> <C>
Dividends, net of foreign taxes withheld of $92,096 and $189,266, respectively.. $1,438,346 $1,869,984
Interest........................................................................ 172,993 530,997
--------- -----------
Total income..................................................................... 1,611,339 2,400,981
--------- -----------
Expenses:
Management fees (Note 5)........................................................ 623,230 595,387
Distribution fees (Note 5)...................................................... 107,877 106,805
Shareholder servicing costs (Note 5)............................................ 91,500 85,000
Registration fees .............................................................. 21,125 25,300
Custodian fees.................................................................. 32,500 48,700
Reports to shareholders......................................................... 38,850 14,500
Professional fees............................................................... 25,900 25,900
Amortization of organization cost (Note 2)...................................... 5,779 5,779
Other........................................................................... 1,470 3,192
--------- -----------
Total expenses................................................................... 948,231 910,563
--------- -----------
Net investment income ........................................................... 663,108 1,490,418
--------- -----------
Realized and unrealized gain (loss) from investments and foreign currency:
Net realized gain (loss) from:
Investments.................................................................... (33,117) 4,954,207
Foreign currency transactions.................................................. (22,563) (31,483)
Net unrealized appreciation on:
Investments.................................................................... 5,378,013 3,514,247
--------- -----------
Net realized and unrealized gain on investments and foreign currency............ 5,322,333 8,436,971
--------- -----------
Net increase in net assets resulting from operations ........................... $5,985,441 $9,927,389
========= ===========

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

FRANKLIN TEMPLETON INTERNATIONAL TRUST

Financial Statements (cont.)

Statements of Changes in Net Assets
for the years ended October 31, 1996 and 1995

Templeton Pacific Templeton Foreign Smaller
Growth Fund Companies Fund
--------------------- ---------------------
1996 1995 1996 1995
---------- ---------- ---------- ----------
Increase (decrease) in net assets:
Operations:
<S> <C> <C> <C> <C>
Net investment income ............................. $ 663,108 $ 547,816 $ 1,490,418 $ 955,251
Net realized gain (loss) from investments and
foreign currency transactions...................... (55,680) 3,572,422 4,922,724 2,488,660
Net unrealized appreciation (depreciation) on
investments and translation of assets and
liabilities denominated in foreign currencies...... 5,378,013 (7,167,675) 3,514,247 (3,042,612)
---------- ---------- ---------- ----------
Net increase (decrease) in net assets
resulting from operations.......................... 5,985,441 (3,047,437) 9,927,389 401,299
Distributions to shareholders from:
Undistributed net investment income................ (809,330) (584,289) (991,682) (755,317)
Net realized capital gains......................... (3,513,636) (1,040,435) (4,004,586) (2,401,292)
Increase (decrease) in net assets from capital share
transactions (Note 3).............................. 7,830,484 (3,321,764) 12,088,092 (4,151,357)
---------- ---------- ---------- ----------
Net increase (decrease) in net assets............... 9,492,959 (7,993,925) 17,019,213 (6,906,667)
Net assets:.........................................
Beginning of year.................................. 50,246,884 58,240,809 50,947,422 57,854,089
---------- ---------- ---------- ----------
End of year........................................ $59,739,843 $50,246,884 $67,966,635 $50,947,422
========== ========== ========== ==========
Undistributed net investment income included
in net assets:.....................................
Beginning of year................................... $ 203,161 $ 231,385 $ 432,957 $ 239,703
========== ========== ========== ==========
End of year......................................... $ 34,376 $ 203,161 $ 900,210 $ 432,957
========== ========== ========== ==========

</TABLE>
The accompanying notes are an integral part of these financial statements.

FRANKLIN TEMPLETON INTERNATIONAL TRUST

Notes to Financial Statements

1. SIGNIFICANT ACCOUNTING POLICIES

Franklin Templeton International Trust (the Trust), formerly Franklin
International Trust, is an open-end management investment company (mutual fund)
registered under the Investment Company Act of 1940, as amended. The Trust
currently has two separate diversified Funds (the Funds) consisting of the
Templeton Pacific Growth Fund (the Pacific Fund), formerly Franklin Pacific
Growth Fund, and the Templeton Foreign Smaller Companies Fund (the International
Fund) formerly Franklin International Equity Fund. Each of the Funds issues a
separate series of shares and maintains a totally separate investment portfolio.

The Pacific Fund seeks to provide long-term growth of capital by investing in
equity securities of which at least 65% trade on markets in the Pacific Rim. The
Foreign Smaller Companies Fund seeks to provide long-term growth of capital by
investing in an internationally diversified portfolio of equity securities, of
which at least 65% trade on markets in countries other than the United States.

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

a. Securities Valuations:

Portfolio securities listed on a securities exchange or on the NASDAQ National
Market System for which market quotations are readily available are valued at
the last quoted sale price of the day or, if there is no such reported sale,
within the range of the most recent quoted bid and ask prices. Other securities
for which market quotations are readily available are valued at current market
values, obtained from pricing services, which are based on a variety of factors,
including recent trades, institutional size trading in similar types of
securities (considering yield, risk and maturity) and/or developments related to
specific securities. Portfolio securities which are traded both on the
over-the-counter market and on a securities exchange are valued according to the
broadest and most representative market as determined by the investment adviser.
Other securities for which market quotations are not available, if any, are
valued in accordance with procedures established by the Board of Trustees.

The value of a foreign security is determined as of the close of trading on the
foreign exchange on which it is traded or as of the close of trading on the New
York Stock Exchange, if that is earlier, and that value is then converted into
its U.S. dollar equivalent at the foreign exchange rate in effect at noon, New
York time, on the day the value of the foreign security is determined. If no
sale is reported at that time, the mean between the current bid and asked price
is used. Occasionally, events which affect the values of foreign securities and
foreign exchange rates may occur between the times at which they are determined
and the close of the exchange and will, therefore, not be reflected in the
computation of the Fund's net asset value, unless material. If events which
materially affect the value of these foreign securities occur during such
period, then these securities will be valued in accordance with procedures
established by the Board of Trustees.

b. Income Taxes:

The Trust intends to continue to qualify for the tax treatment applicable to
regulated investment companies under the Internal Revenue Code and to make the
requisite distributions to its shareholders which will be sufficient to relieve
it from federal income and excise taxes. Each Fund is treated as a separate
entity in the determination of compliance with the Internal Revenue Code.

c. Security Transactions:

Security transactions are accounted for on the date the securities are purchased
or sold (trade date). Realized gains and losses on security transactions are
determined on the basis of specific identification.

1. SIGNIFICANT ACCOUNTING POLICIES (cont.)

d. Investment Income, Expenses and Distributions:

Dividend income and distributions to shareholders are recorded on the
ex-dividend date. Interest income and estimated expenses are accrued daily. Bond
discount, if any, is amortized as required by the Internal Revenue Code.

Net investment income differs for financial statement and tax purposes primarily
due to differing treatments of foreign currency transactions.

e. Expense Allocation:

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

f. Foreign Currency Translation:

The accounting records of the Trust are maintained in U.S. dollars. All assets
and liabilities denominated in foreign currencies are translated into U.S.
dollars at the rate of exchange of such currencies against U.S. dollars on the
date of the valuation. Purchases and sales of securities, income and expenses
are translated at the rate of exchange quoted on the respective date that such
transactions are recorded. Differences between income and expense amounts
recorded and collected or paid are recognized when reported by the custodian
bank.

The Trust does not isolate that portion of the results of operations resulting
from changes in foreign exchange rates on investments from fluctuations arising
from changes in market prices of securities held. Such fluctuations are included
with the net realized and unrealized gain or loss from investments.

Reported net realized foreign exchange gains or losses arise from sales and
maturities of short-term securities, sales of foreign currencies, currency gains
or losses realized between the trade date and settlement dates on securities
transactions, the difference between the amounts of dividends, interest, and
foreign withholding taxes recorded on the Trust's books, and the U.S. dollar
equivalent of the amounts actually received or paid. Net unrealized appreciation
(depreciation) on translation of assets and liabilities denominated in foreign
currencies, if material, arise from changes in the value of assets and
liabilities other than investments in securities at the end of the period,
resulting from changes in exchange rates.

g. Repurchase Agreements:

The Trust, through its custodians, receives delivery of the underlying
securities, whose market is required to be at least 102% of the resale price at
the time of purchase. The Trust's investment advisor, Franklin Advisers, Inc.,
is responsible for determining that the value of these underlying securities
remains at least equal to the resale price.

h. Accounting Estimates:

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

2. UNAMORTIZED ORGANIZATION COSTS

The organization costs of each Fund are amortized on a straight-line basis over
a period of five years.

3. TRUST SHARES

At October 31, 1996, there were an unlimited number of $.01 par value shares of
beneficial interest authorized. Transactions in each of the Fund's shares for
the years ended October 31, 1996 and 1995 were as follows:
<TABLE>
<CAPTION>

Templeton Pacific Templeton Foreign
Growth Fund Smaller Companies Fund
--------------------- ---------------------
Shares Amount Shares Amount
-------- ---------- --------- -----------
Year ended October 31, 1996
<S> <C> <C> <C> <C>
Shares sold........................................... 6,244,033 $91,529,496 2,851,402 $38,019,671
Shares issued in reinvestment of distributions........ 273,824 3,846,596 362,506 4,445,701
Shares redeemed....................................... (5,957,749) (87,545,608) (2,273,240) (30,377,280)
-------- ---------- --------- -----------
Net increase........................................... 560,108 $ 7,830,484 940,668 $12,088,092
======== ========== ========= ===========
Year ended October 31, 1995
Shares sold........................................... 4,017,142 $56,565,202 1,733,195 $22,333,889
Shares issued in reinvestment of distributions........ 102,552 1,423,427 221,229 2,728,090
Shares redeemed....................................... (4,341,319) (61,310,393) (2,284,213) (29,213,336)
-------- ---------- --------- -----------
Net decrease........................................... (221,625) $ (3,321,764) (329,789) $ (4,151,357)
======== ========== ========= ===========

</TABLE>
4. PURCHASES AND SALES OF SECURITIES

Aggregate purchases and sales of securities (excluding purchases and sales of
short-term securities) for the year ended October 31, 1996 were as follows:

Templeton
Templeton Pacific Foreign Smaller
Growth Fund Companies Fund
----------- -----------
Purchases.................................. $16,346,308 $31,542,734
Sales...................................... $ 7,976,034 $20,319,655

5. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES

Under the terms of a management agreement, Franklin Advisers, Inc. (Advisers),
provides investment advice, office space and facilities to each Fund and
receives fees computed monthly on the average daily net assets of each Fund at
an annualized rate of 1% of the first $100 million of net assets; 9/10 of 1% of
net assets in excess of $100 million up to and including $250 million; 8/10 of
1% of net assets in excess of $250 million up to and including $500 million; and
3/4 of 1% of net assets in excess of $500 million. Under a subadvisory
agreement, Templeton Investment Counsel, Inc. (TICI), an indirect subsidiary of
Templeton Worldwide, Inc., (Worldwide) which is a direct, wholly-owned
subsidiary of Franklin Resources, Inc. (Resources) receives from the Advisers a
fee equal to an annual rate of 1/2 of 1% of the value of each Fund's net assets
up to and including $100 million; 2/5 of 1% of net assets in excess of $100
million up to and including $250 million; 3/10 of 1% of net assets in excess of
$250 million up to and including $500 million; and 1/4 of 1% of net assets in
excess of $500 million. The terms of these agreements provide that aggregate
annual expenses of the Funds be limited to the extent necessary to comply with
the limitations set forth in the laws, regulations, and administrative
interpretations of the states in which the Funds' shares are registered. For the
year ended October 31, 1996, the Funds' expenses did not exceed these
limitations.

5. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES (cont.)

Pursuant to a shareholder service agreement with Franklin Templeton Investor
Services, Inc. (Investor Services), the Funds pay costs on a per shareholder
account basis. Such costs incurred for the year ended October 31, 1996
aggregated $176,500.

Under the terms of distribution plans pursuant to Rule 12b-1 of the Investment
Company Act of 1940 (the Plans), the Funds will reimburse Distributors, in an
amount up to 0.25% per annum of the Funds' average daily net assets for cost
incurred in the promotion, offering, and marketing of the Funds' shares. Fees
incurred by the Pacific Growth Fund and Foreign Smaller Companies Fund under the
Plan aggregated $107,877 and $106,805, respectively, for the year ended October
31, 1996.

In its capacity as underwriter for the shares of the Trust, Franklin Templeton
Distributors, Inc. (Distributors) receives commissions on sales of the Trust's
shares. Commissions are deducted from the gross proceeds received from the sale
of the shares of the Trust and as such are not expenses of the Funds.
Commissions received by Franklin Templeton Distributors, Inc. and the amounts
which were subsequently paid to other dealers for the year ended October 31,
1996 were as follows:

Templeton
Templeton Pacific Foreign Smaller
Growth Fund Companies Fund
----------- -----------
Total commissions received................. $412,861 $336,526
=========== ===========
Paid to other dealers...................... $366,701 $298,099
=========== ===========

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

6. DISTRIBUTIONS AND CAPITAL LOSS CARRYOVERS

At October 31, 1996, for tax purposes, the Funds had capital loss carryovers as
follows:

Templeton
Templeton Pacific Foreign Smaller
Growth Fund Companies Fund
----------- -----------
Capital loss carryovers expiring in:
2004...................................... $33,117 --

7. FINANCIAL HIGHLIGHTS

Select data for each share of beneficial interest outstanding throughout each
period, by Fund, are as follows:

Per Share Operating Performance Ratios/Supplemental Data
------------------------------------------------ ----------------------------
Net Net Ratio of Ratio
Asset Realized & Distri- Distri- Net Net Expenses of Net
Value at Net Unrealized butions butions Asset Assets to Investment Average
Year Begin- Invest- Gain Total From From Net From Total Value at End Average Income Portfolio Com-
Ended ning of ment (Loss) onInvestmentInvestment Capital Distri- at End Total of Year Net to Average Turnover mission
Oct. 31 Year IncomeSecuritiesOperations Income Gains butions of Year Return+ (in 000's) Assets Net Assets Rate Rate

Templeton Pacific Growth Fund
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1992 $10.07 $.14 $ .836 $ .976 $(.146) $-- $(.146) $10.90 9.77% $ 5,724 .29%* 1.80% 62.96%
1993 10.90 .19 3.825 4.015 (.193) (.282) (.475) 14.44 38.46 22,619 0.50* 2.03 47.52
1994 14.44 .21 1.008 1.218 (.198) (.060) (.258) 15.40 8.46 58,241 1.22* 1.54 9.16
1995 15.40 .15 (1.013) (.863) (.156) (.271) (.427) 14.11 (5.54) 50,247 1.72 1.04 36.21
1996 14.11 .12 1.410 1.530 (.213) (.927) (1.140) 14.50 11.27 59,740 1.52 1.06 13.48 $.0092
Templeton Foreign Smaller Companies Fund
1992 10.07 .19 (.038) .152 (.202) -- (.202) 10.02 1.46 6,944 0.29* 2.36 48.78
1993 10.02 .42 2.253 2.673 (.413) -- (.413) 12.28 27.40 19,217 0.50* 4.22 52.99
1994 12.28 .23 1.540 1.770 (.220) -- (.220) 13.83 14.56 57,854 1.22* 1.99 21.80
1995 13.83 .25 (.077) .173 (.190) (.588) (.778) 13.23 1.75 50,947 1.63 1.86 9.12
1996 13.23 .35 1.880 2.230 (.254) (1.026) (1.280) 14.18 18.49 67,967 1.53 2.50 40.46 $.0026

</TABLE>
+Total return measures the changes in value of an investment over the periods
indicated. It does not include the maximum initial sales charge and assumes
reinvestment of dividends and capital gains, if any, at net asset value.
*During the periods indicated below, Franklin Advisers, Inc., the investment
manager, agreed to waive in advance a portion of its management fees. Had such
action not been taken, ratios of expenses to average net assets would have been
as follows:

Ratio of expenses to
average net assets
-------------------
Templeton Pacific Growth Fund
1992 .................................. 2.50%
1993 .................................. 2.31
1994 .................................. 1.72

Ratio of expenses to
average net assets
-------------------
Templeton Foreign Smaller Companies Fund
1992 .................................. 2.50%
1993 .................................. 2.27
1994 .................................. 1.76

FRANKLIN TEMPLETON INTERNATIONAL TRUST

Report of Independent Accountants

To the Shareholders and Board of Trustees
of Franklin Templeton International Trust:

We have audited the accompanying statement of assets and liabilities of the
funds comprising of the Franklin Templeton International Trust, including each
fund's statement of investments in securities and net assets, as of October 31,
1996, and the related statements of operations for the year then ended, the
statements of changes in net assets for each of the two years in the period then
ended, and the financial highlights for the periods presented. These financial
statements and financial highlights are the responsibility of the Trust's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
October 31, 1996, by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the funds comprising the Franklin Templeton International Trust as of October
31, 1996, the results of their operations for the year then ended, the changes
in their net assets for each of the two years in the period then ended and their
financial highlights for the periods presented, in conformity with generally
accepted accounting principles.

COOPERS & LYBRAND L.L.P.

Ft. Lauderdale, Florida

November 27, 1996
Franklin Templeton International Trust Annual Report 10/31/96.

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

GRAPHIC MATERIAL (1)

This chart shows in pie format the geographic distribution of the fund's
portfolio on 10/31/96, based on total net assets.

Geographic Distribution on 10/31/96

Hong Kong 29.5%
Japan 20.3%
Australia 13.8%
Singapore 6.3%
Malaysia 5.8%
Thailand 5.2%
Indonesia 4.6%
China 4.1%
Philippines 2.8%
Pakistan 2.7%
Other Countries 4.9%

GRAPHIC MATERIAL (2)

The following line graph hypothetically compares the performance of the fund
with the MSCI Pacific Index, based on a $10,000 investment from 9/20/91 to
10/31/96.

Period Ending Fund Index

9/20/91 $ 9,552 $ 10,000
9/30/91 $ 9,571 $ 10,235
10/31/91 $ 9,609 $ 10,672
11/30/91 $ 9,552 $ 9,988
12/31/91 $ 9,899 $ 10,297
1/31/92 $ 9,947 $ 9,899
2/29/92 $10,149 $ 9,207
3/31/92 $ 9,947 $ 8,333
4/30/92 $10,101 $ 7,953
5/31/92 $10,592 $ 8,575
6/30/92 $10,964 $ 7,903
7/31/92 $10,296 $ 7,795
8/31/92 $10,025 $ 8,864
9/30/92 $10,064 $ 8,663
10/31/92 $10,548 $ 8,359
11/30/92 $10,451 $ 8,519
12/31/92 $10,260 $ 8,423
1/31/93 $10,430 $ 8,409
2/28/93 $10,861 $ 8,818
3/31/93 $10,861 $ 9,885
4/30/93 $11,612 $ 11,462
5/31/93 $12,172 $ 11,798
6/30/93 $11,914 $ 11,607
7/31/93 $12,167 $ 12,295
8/31/93 $12,895 $ 12,660
9/30/93 $13,037 $ 12,188
10/31/93 $14,604 $ 12,461
11/30/93 $14,534 $ 10,705
12/31/93 $16,511 $ 11,454
1/31/94 $16,685 $ 12,781
2/28/94 $16,154 $ 13,112
3/31/94 $14,889 $ 12,390
4/30/94 $15,103 $ 12,927
5/31/94 $15,807 $ 13,236
6/30/94 $15,316 $ 13,672
7/31/94 $15,727 $ 13,381
8/31/94 $16,427 $ 13,615
9/30/94 $15,737 $ 13,276
10/31/94 $15,840 $ 13,613
11/30/94 $14,657 $ 12,855
12/31/94 $14,748 $ 12,943
1/31/95 $13,473 $ 12,128
2/28/95 $14,084 $ 11,830
3/31/95 $14,484 $ 12,741
4/30/95 $14,663 $ 13,285
5/31/95 $15,222 $ 12,756
6/30/95 $14,941 $ 12,218
7/31/95 $15,545 $ 13,101
8/31/95 $15,355 $ 12,610
9/30/95 $15,588 $ 12,728
10/31/95 $14,973 $ 12,111
11/30/95 $14,983 $ 12,708
12/31/95 $15,610 $ 13,331
1/31/96 $16,811 $ 13,356
2/29/96 $16,743 $ 13,208
3/31/96 $16,653 $ 13,614
4/30/96 $17,360 $ 14,310
5/31/96 $17,383 $ 13,690
6/30/96 $17,143 $ 13,696
7/31/96 $16,247 $ 13,069
8/31/96 $16,569 $ 12,726
9/30/96 $16,959 $ 13,144
10/31/96 $16,649 $ 12,535

GRAPHIC MATERIAL (3)

This chart shows in pie format the geographic breakdown of the fund's
securities on 10/31/96, based on total net assets.

Geographic Distribution on 10/31/96

Europe 64.8%
Asia 15.4%
Australia & New Zealand 5.9%
North America 5.4%
Latin America 4.2%
Short-Term Obligations & 4.3%
Other Net Assets

GRAPHIC MATERIAL (4)

The following line graph hypothetically compares the performance of the fund
with the MSCI EAFE Index, based on a $10,000 investment from 9/20/91 to
10/31/96.

Period Ending Fund Index

9/20/91 $ 9,552 $ 10,000
9/30/91 $ 9,571 $ 10,189
10/31/91 $ 9,609 $ 10,336
11/30/91 $ 9,523 $ 9,856
12/31/91 $ 9,904 $ 10,369
1/31/92 $ 10,019 $ 10,150
2/29/92 $ 10,115 $ 9,790
3/31/92 $ 9,721 $ 9,146
4/30/92 $ 9,942 $ 9,192
5/31/92 $ 10,471 $ 9,810
6/30/92 $ 10,274 $ 9,348
7/31/92 $ 10,041 $ 9,111
8/31/92 $ 10,099 $ 9,686
9/30/92 $ 9,934 $ 9,498
10/31/92 $ 9,749 $ 9,002
11/30/92 $ 9,905 $ 9,090
12/31/92 $ 9,992 $ 9,140
1/31/93 $ 9,845 $ 9,142
2/28/93 $ 10,021 $ 9,420
3/31/93 $ 10,256 $ 10,245
4/30/93 $ 10,637 $ 11,220
5/31/93 $ 10,969 $ 11,460
6/30/93 $ 10,620 $ 11,284
7/31/93 $ 10,802 $ 11,681
8/31/93 $ 11,490 $ 12,314
9/30/93 $ 11,449 $ 12,039
10/31/93 $ 12,420 $ 12,413
11/30/93 $ 12,066 $ 11,330
12/31/93 $ 13,291 $ 12,151
1/31/94 $ 14,287 $ 13,181
2/28/94 $ 14,053 $ 13,147
3/31/94 $ 13,555 $ 12,583
4/30/94 $ 13,657 $ 13,120
5/31/94 $ 13,708 $ 13,048
6/30/94 $ 13,323 $ 13,234
7/31/94 $ 13,878 $ 13,365
8/31/94 $ 14,300 $ 13,685
9/30/94 $ 13,971 $ 13,256
10/31/94 $ 14,228 $ 13,701
11/30/94 $ 13,518 $ 13,046
12/31/94 $ 13,276 $ 13,130
1/31/95 $ 12,951 $ 12,629
2/28/95 $ 13,157 $ 12,596
3/31/95 $ 13,113 $ 13,386
4/30/95 $ 13,720 $ 13,893
5/31/95 $ 13,991 $ 13,732
6/30/95 $ 14,345 $ 13,494
7/31/95 $ 15,024 $ 14,338
8/31/95 $ 14,586 $ 13,794
9/30/95 $ 14,947 $ 14,068
10/31/95 $ 14,477 $ 13,693
11/30/95 $ 14,542 $ 14,078
12/31/95 $ 14,698 $ 14,648
1/31/96 $ 15,225 $ 14,711
2/29/96 $ 15,644 $ 14,764
3/31/96 $ 15,884 $ 15,082
4/30/96 $ 16,363 $ 15,524
5/31/96 $ 16,602 $ 15,241
6/30/96 $ 16,657 $ 15,331
7/31/96 $ 16,125 $ 14,886
8/31/96 $ 16,524 $ 14,922
9/30/96 $ 16,730 $ 15,322
10/31/96 $ 17,153 $ 15,169