File Nos. 33-46503
811-6606
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [ X ]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 8 [ X ]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [ X ]
Amendment No. 8 [ X ]
(Check appropriate box or boxes.)
Dreyfus BASIC U.S. Government Money Market Fund
(Exact Name of Registrant as Specified in Charter)
c/o The Dreyfus Corporation
200 Park Avenue, New York, New York 10166
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (212) 922-6000
Mark N. Jacobs, Esq.
200 Park Avenue
New York, New York 10166
(Name and Address of Agent for Service)
It is proposed that this filing will become effective (check appropriate box)
immediately upon filing pursuant to paragraph (b)
----
X on July 1, 1997 pursuant to paragraph (b)
----
60 days after filing pursuant to paragraph (a)(i)
----
on (date) pursuant to paragraph (a)(i)
----
75 days after filing pursuant to paragraph (a)(ii)
----
on (date) pursuant to paragraph (a)(ii) of Rule 485
----
If appropriate, check the following box:
this post-effective amendment designates a new effective date
for a previously filed post-effective amendment.
----
Registrant has registered an indefinite number of shares of its
benificial interest under the Securities Act of 1933 pursuant to
Section 24(f) of the Investment Company Act of 1940. Registrant's Rule 24f-2
Notice for the fiscal year ended February 28, 1997 was filed on or about
April 28, 1997.
Dreyfus BASIC U.S. Government Money Market Fund
Cross-Reference Sheet Pursuant to Rule 495(a)
Items in
Part A of
Form N-1A Caption Page
_________ _______ ____
1 Cover Page Cover
2 Synopsis 3
3 Condensed Financial Information 4
4 General Description of Registrant 5
5 Management of the Fund 7
5(a) Management's Discussion of Fund's Performance *
6 Capital Stock and Other Securities 15
7 Purchase of Securities Being Offered 8
8 Redemption or Repurchase 11
9 Pending Legal Proceedings *
Items in
Part B of
Form N-1A
- ---------
10 Cover Page Cover
11 Table of Contents Cover
12 General Information and History *
13 Investment Objectives and Policies B-2
14 Management of the Fund B-7
15 Control Persons and Principal B-11
Holders of Securities
16 Investment Advisory and Other B-12
Services
_____________________________________
NOTE: * Omitted since answer is negative or inapplicable.
Dreyfus BASIC U.S. Government Money Market Fund
Cross-Reference Sheet Pursuant to Rule 495(a) (continued)
Items in
Part B of
Form N-1A Caption Page
_________ _______ _____
17 Brokerage Allocation B-21
18 Capital Stock and Other Securities B-19
19 Purchase, Redemption and Pricing B-14, B-16,
of Securities Being Offered B-20
20 Tax Status *
21 Underwriters B-16
22 Calculations of Performance Data B-22
23 Financial Statements B-34
Items in
Part C of
Form N-1A
_________
24 Financial Statements and Exhibits C-1
25 Persons Controlled by or Under C-3
Common Control with Registrant
26 Number of Holders of Securities C-3
27 Indemnification C-3, C-4
28 Business and Other Connections of C-4
Investment Adviser
29 Principal Underwriters C-11
30 Location of Accounts and Records C-14
31 Management Services C-14
32 Undertakings C-14
_____________________________________
NOTE: * Omitted since answer is negative or inapplicable.
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COMBINED PROSPECTUS JULY 1, 1997
DREYFUS BASIC MONEY MARKET FUND, INC.
DREYFUS BASIC U.S. GOVERNMENT MONEY MARKET FUND
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DREYFUS BASIC MONEY MARKET FUND, INC. AND DREYFUS BASIC U.S.
GOVERNMENT MONEY MARKET FUND (EACH, A "FUND" AND COLLECTIVELY, THE "FUNDS")
ARE EACH OPEN-END, DIVERSIFIED, MANAGEMENT INVESTMENT COMPANIES KNOWN AS
MONEY MARKET MUTUAL FUNDS. EACH FUND'S INVESTMENT OBJECTIVE IS TO PROVIDE YOU
WITH AS HIGH A LEVEL OF CURRENT INCOME AS IS CONSISTENT WITH THE PRESERVATION
OF CAPITAL AND THE MAINTENANCE OF LIQUIDITY. EACH FUND SEEKS TO MAINTAIN A
STABLE NET ASSET VALUE OF $1.00 PER SHARE AND IS DESIGNED TO BENEFIT
INVESTORS WHO DO NOT ENGAGE IN FREQUENT TRANSACTIONS IN FUND SHARES.
YOU CAN PURCHASE OR REDEEM SHARES BY TELEPHONE USING DREYFUS
TELETRANSFER.
THE DREYFUS CORPORATION PROFESSIONALLY MANAGES EACH FUND'S PORTFOLIO.
AN INVESTMENT IN EACH FUND IS NEITHER INSURED NOR GUARANTEED BY THE
U.S. GOVERNMENT. THERE CAN BE NO ASSURANCE THAT EITHER FUND WILL BE ABLE TO
MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE.
DREYFUS BASIC MONEY MARKET FUND, INC. (THE "MONEY FUND") INVESTS IN
SHORT-TERM MONEY MARKET OBLIGATIONS INCLUDING U.S. GOVERNMENT SECURITIES,
CERTIFICATES OF DEPOSIT AND OTHER DOMESTIC AND FOREIGN BANK OBLIGATIONS,
REPURCHASE AGREEMENTS, COMMERCIAL PAPER, AND OTHER SHORT-TERM CORPORATE
OBLIGATIONS, AS MORE FULLY DESCRIBED HEREIN.
DREYFUS BASIC U.S. GOVERNMENT MONEY MARKET FUND (THE "GOVERNMENT MONEY FUND")
INVESTS IN U.S. GOVERNMENT SECURITIES AND REPURCHASE AGREEMENTS IN RESPECT OF
U.S. GOVERNMENT SECURITIES.
EACH FUND IS A SEPARATE ENTITY WITH A SEPARATE PORTFOLIO. THE
OPERATIONS AND RESULTS OF ONE FUND ARE UNRELATED TO THOSE OF THE OTHER FUND.
THIS COMBINED PROSPECTUS HAS BEEN PREPARED FOR YOUR CONVENIENCE TO PROVIDE
YOU THE OPPORTUNITY TO CONSIDER TWO INVESTMENT CHOICES IN ONE DOCUMENT.
THIS PROSPECTUS SETS FORTH CONCISELY INFORMATION ABOUT EACH FUND THAT
YOU SHOULD KNOW BEFORE INVESTING. IT SHOULD BE READ AND RETAINED FOR FUTURE
REFERENCE.
THE STATEMENT OF ADDITIONAL INFORMATION, DATED JULY 1, 1997, WHICH
MAY BE REVISED FROM TIME TO TIME, PROVIDES A FURTHER DISCUSSION OF CERTAIN
AREAS IN THIS PROSPECTUS AND OTHER MATTERS WHICH MAY BE OF INTEREST TO SOME
INVESTORS. IT HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION AND
IS INCORPORATED HEREIN BY REFERENCE. THE SECURITIES AND EXCHANGE COMMISSION
MAINTAINS A WEB SITE (HTTP://WWW.SEC.GOV) THAT CONTAINS THE STATEMENT OF
ADDITIONAL INFORMATION, MATERIAL INCORPORATED BY REFERENCE, AND OTHER
INFORMATION REGARDING THE FUND. FOR A FREE COPY OF THE STATEMENT OF
ADDITIONAL INFORMATION, WRITE TO THE FUND AT 144 GLENN CURTISS BOULEVARD,
UNIONDALE, NEW YORK 11556-0144, OR CALL 1-800-645-6561. WHEN TELEPHONING, ASK
FOR OPERATOR 144.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
OR ENDORSED BY, ANY BANK, AND ARE NOT FEDERALLY INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER
AGENCY.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
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TABLE OF CONTENTS
FEE TABLE......................................... 3
CONDENSED FINANCIAL INFORMATION................... 4
YIELD INFORMATION................................. 5
DESCRIPTION OF THE FUNDS.......................... 5
MANAGEMENT OF THE FUNDS........................... 7
HOW TO BUY SHARES................................. 8
SHAREHOLDER SERVICES.............................. 10
HOW TO REDEEM SHARES.............................. 11
SHAREHOLDER SERVICES PLAN......................... 13
DIVIDENDS, DISTRIBUTIONS AND TAXES................ 14
GENERAL INFORMATION............................... 15
APPENDIX.......................................... 17
Page 2
<TABLE>
<CAPTION>
FEE TABLE
GOVERNMENT
MONEY MONEY
SHAREHOLDER TRANSACTION EXPENSES FUND FUND
________ ___________
<S> <C> <C>
Exchange Fee............................................................. $5.00 $5.00
Account Closeout Fee..................................................... $5.00 $5.00
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average daily net assets)
Management Fees (after expense reimbursement)............................ .27% .30%
Other Expenses........................................................... .18% .15%
Total Fund Operating Expenses (after expense reimbursement).............. .45% .45%
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
EXAMPLE (applicable to each Fund) 1 YEAR 3 YEARS 5 YEARS 10 YEARS
You would pay the following expenses
on a $1,000 investment, assuming (1) 5%
annual return and (2) redemption at the
end of each time period.............. $10 $19 $30 $62
</TABLE>
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THE AMOUNTS LISTED IN THE EXAMPLE SHOULD NOT BE CONSIDERED AS
REPRESENTATIVE OF PAST OR FUTURE EXPENSES AND ACTUAL EXPENSES MAY BE GREATER
OR LESS THAN THOSE INDICATED. MOREOVER, WHILE THE EXAMPLE ASSUMES A 5% ANNUAL
RETURN, EACH FUND'S ACTUAL PERFORMANCE WILL VARY AND MAY RESULT IN AN ACTUAL
RETURN GREATER OR LESS THAN 5%.
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The purpose of the foregoing table is to assist you in understanding
the costs and expenses borne by each Fund and investors, the payment of which
will reduce investors' annual return. The Dreyfus Corporation has agreed,
with respect to each Fund, until such time as it gives investors at least 90
days' notice to the contrary, that if in any fiscal year of the Fund certain
Fund expenses, including the management fee, exceed .45 of 1% of the value of
the Fund's average net assets for the fiscal year, such Fund may deduct from
the payment to be made to The Dreyfus Corporation under the Management
Agreement, or The Dreyfus Corporation will bear, such excess expense. No
modification or termination of this agreement currently is contemplated by
The Dreyfus Corporation. The Management Fees noted above, without
reimbursement, would be .50% for each Fund, and Total Fund Operating Expenses
would be .68% for the MONEY FUND, and .65% for the GOVERNMENT MONEY FUND. In
addition, unlike certain other funds in The Dreyfus Family of Funds, each
Fund will charge your account $2.00 for each redemption check you write, and
you also will be charged $5.00 for each exchange made out of the Fund and for
each redemption you make by wire or pursuant to the Dreyfus TELETRANSFER
Privilege, or if you otherwise closeout your account. However, these charges
will be waived if the closing balance in the shareholder's account on the
business day immediately preceding the effective date of such transaction is
$50,000 or more. Such charges, when paid, are paid to the Fund's transfer
agent and will reduce the transfer agency charges otherwise payable by each
Fund. See "Shareholder Services" and "How to Redeem Shares." In addition,
certain securities dealers, banks or other financial institutions may charge
their clients direct fees for effecting transactions in shares; such fees are
not reflected in the foregoing table. See "Management of the Funds" and
"Shareholder Services Plan."
Page 3
CONDENSED FINANCIAL INFORMATION
The information in the following tables has been audited by Ernst &
Young LLP, each Fund's independent auditors, whose reports thereon appear in
the Statement of Additional Information. Further financial data and related
notes as to each Fund are included in the Statement of Additional
Information, available upon request.
FINANCIAL HIGHLIGHTS
MONEY FUND _ Contained below is per share operating performance data for a
share of common stock outstanding, total investment return, ratios to average
net assets and other supplemental data for each year indicated. This
information has been derived from the Fund's financial statements.
<TABLE>
<CAPTION>
FISCAL YEAR ENDED FEBRUARY 28/29,
____________________________________________________
PER SHARE DATA: 1993(1) 1994 1995 1996 1997
______ ______ ______ ______ ______
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year.......... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
______ ______ ______ ______ ______
INVESTMENT OPERATIONS:
Investment income_net ..................... .032 .033 .046 .058 .051
______ ______ ______ ______ ______
DISTRIBUTIONS:
Dividends from investment income-net........ (.032) (.033) (.046) (.058) (.051)
______ ______ ______ ______ ______
Net asset value, end of year................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
====== ====== ====== ====== ======
TOTAL INVESTMENT RETURN......................... 3.80%(2) 3.40% 4.73% 5.97% 5.19%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets .... ._ .10% .18% .31% .45%
Ratio of net investment income to average net assets 3.66%(2) 3.33% 4.70% 5.82% 5.08%
Decrease reflected in above expense ratios due to
undertakings by The Dreyfus Corporation... .71%(2) .55% .46% .31% .23%
Net Assets, end of year (000's omitted)..... $734,349 $1,217,032 $1,623,242 $2,098,292 $1,793,992
(1)From April 24, 1992 (commencement of operations) to February 28, 1993.
(2)Annualized.
</TABLE>
GOVERNMENT MONEY FUND _ Contained below is per share operating performance
data for a share of beneficial interest outstanding, total investment return,
ratios to average net assets and other supplemental data for each year
indicated. This information has been derived from the Fund's financial
statements.
<TABLE>
<CAPTION>
FISCAL YEAR ENDED FEBRUARY 28/29,
____________________________________________________
PER SHARE DATA: 1993(1) 1994 1995 1996 1997
______ ______ ______ ______ ______
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year.......... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
______ ______ ______ ______ ______
INVESTMENT OPERATIONS:
Investment income_net ..................... .031 .032 .046 .058 .051
______ ______ ______ ______ ______
DISTRIBUTIONS:
Dividends from investment income-net........ (.031) (.032) (.046) (.058) (.051)
______ ______ ______ ______ ______
Net asset value, end of year................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
====== ====== ====== ====== ======
TOTAL INVESTMENT RETURN......................... 3.69%(2) 3.30% 4.67% 5.94% 5.20%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets .... ._ .02% .17% .31% .45%
Ratio of net investment income to average net assets 3.58%(2) 3.24% 5.05% 5.79% 5.09%
Decrease reflected in above expense ratios due to
undertakings by The Dreyfus Corporation... .75%(2) .64% .44% .36% .20%
Net Assets, end of year (000's omitted)..... $116,696 $265,691 $1,041,722 $1,366,056 $1,459,949
(1) From April 24, 1992 (commencement of operations) to February 28, 1993.
(2) Annualized.
</TABLE>
Page 4
YIELD INFORMATION
From time to time, each Fund advertises its yield and effective
yield. Both yield figures are based on historical earnings and are not
intended to indicate future performance. It can be expected that each Fund's
yield will fluctuate substantially. A Fund's yield refers to the income
generated by an investment in such Fund over a seven-day period (which period
will be stated in the advertisement). This income is then annualized. That
is, the amount of income generated by the investment during that week is
assumed to be generated each week over a 52-week period and is shown as a
percentage of the investment. The effective yield is calculated similarly,
but, when annualized, the income earned by an investment in a Fund is assumed
to be reinvested. The effective yield will be slightly higher than the yield
because of the compounding effect of this assumed reinvestment. Each Fund's
yield and effective yield may reflect absorbed expenses pursuant to any
undertaking that may be in effect. See "Management of the Funds."
Yield information is useful in reviewing a Fund's performance, but
because yields will fluctuate, such information under certain conditions may
not provide a basis for comparison with domestic bank deposits, other
investments which pay a fixed yield for a stated period of time, or other
investment companies which may use a different method of computing yield.
Comparative performance information may be used from time to time in
advertising or marketing each Fund's shares, including data from Lipper
Analytical Services, Inc., Bank Rate Monitortrademark, N. Palm Beach, Florida
33408, IBC's Money Fund Reporttrademark, Morningstar, Inc. and other industry
publications.
DESCRIPTION OF THE FUNDS
INVESTMENT OBJECTIVE
Each Fund's investment objective is to provide you with as high a
level of current income as is consistent with the preservation of capital and
the maintenance of liquidity. It cannot be changed, as to a Fund, without
approval by the holders of a majority (as defined in the Investment Company
Act of 1940, as amended (the "1940 Act")) of such Fund's outstanding voting
shares. There can be no assurance that a Fund's investment objective will be
achieved. Each Fund pursues this objective in the manner described below.
Securities in which each Fund invests may not earn as high a level of current
income as long-term or lower quality securities which generally have less
liquidity, greater market risk and more fluctuation in market value.
MANAGEMENT POLICIES
Each Fund seeks to maintain a net asset value of $1.00 per share for
purchases and redemptions. To do so, each Fund uses the amortized cost method
of valuing its securities pursuant to Rule 2a-7 under the 1940 Act, which
Rule includes various maturity, quality and diversification requirements,
certain of which are summarized as follows. In accordance with Rule 2a-7,
each Fund is required to maintain a dollar-weighted average portfolio
maturity of 90 days or less, purchase only instruments having remaining
maturities of 13 months or less and invest only in U.S. dollar denominated
securities determined in accordance with procedures established by each
Fund's Board to present minimal credit risks and, with respect to the MONEY
FUND only, which are rated in one of the two highest rating categories for
debt obligations by at least two nationally recognized statistical rating
organizations (or one rating organization if the instrument was rated by only
one such organization), or, if unrated, are of comparable quality as
determined in accordance with procedures established by the MONEY FUND'S
Board. Moreover, the MONEY FUND will purchase only securities so rated in the
highest rating category or, if unrated, of comparable quality as determined
in accordance with such procedures. The nationally recognized statistical
rating organizations currently rating instruments of the type the MONEY FUND
may purchase are Moody's Investors Service, Inc., Standard & Poor's Ratings
Group, Duff & Phelps Credit Rating Co., Fitch Investors Service, L.P, IBCA
Limited and IBCA Inc., and Thomson BankWatch, Inc. and their rating criteria
are described in the "Appendix" to the Statement of Additional Information.
This discussion con-
Page 5
cerning investment ratings and rating organizations does not apply to the
GOVERNMENT MONEY FUND because it invests exclusively in U.S. Government
securities and repurchase agreements in respect thereof. For further
information regarding the amortized cost method of valuing securities, see
"Determination of Net Asset Value" in the Statement of Additional Information.
There can be no assurance that either Fund will be able to maintain a stable
net asset value of $1.00 per share.
MONEY FUND _ The Fund invests in short-term money market obligations,
including securities issued or guaranteed by the U.S. Government or its
agencies or instrumentalities, certificates of deposit, time deposits,
bankers' acceptances and other short-term obligations issued by domestic
banks, foreign subsidiaries or foreign branches of domestic banks, and
domestic and foreign branches of foreign banks, repurchase agreements,
asset-backed securities, and high grade domestic and foreign commercial paper
and other short-term corporate obligations, including those with floating or
variable rates of interest. The Fund may invest in U.S. dollar denominated
obligations issued or guaranteed by one or more foreign governments or any of
their political subdivisions, agencies or instrumentalities, including
obligations of supranational entities. See "Appendix _ Certain Portfolio
Securities." In addition, the Fund is permitted to lend portfolio securities
and enter into reverse repurchase agreements. See "Appendix _ Investment
Techniques." During normal market conditions, at least 25% of the Fund's
assets will be invested in bank obligations. See "Investment Considerations
and Risks" below.
GOVERNMENT MONEY FUND _ The Fund invests in securities issued or guaranteed
as to principal and interest by the U.S. Government or its agencies or
instrumentalities, and repurchase agreements in respect of such securities.
See "Appendix _ Certain Portfolio Securities."
INVESTMENT CONSIDERATIONS AND RISKS
GENERAL _ Each Fund is designed to benefit investors who do not engage in
frequent redemptions or exchanges of the Fund's shares. Because charges may
apply to redemptions and exchanges of Fund shares in accounts with a balance
of less than $50,000, neither Fund may be an appropriate investment for an
investor who does not maintain a $50,000 balance and intends to engage
frequently in such transactions.
Each Fund will attempt to increase yield by trading to take advantage
of short-term market variations. This policy is expected to result in high
portfolio turnover but should not adversely affect a Fund since neither Fund
usually pays brokerage commissions when it purchases portfolio securities.
The value of the portfolio securities held by each Fund will vary inversely
to changes in prevailing interest rates. Thus, if interest rates have
increased from the time a security was purchased, such security, if sold,
might be sold at a price less than its purchase cost. Similarly, if interest
rates have declined from the time a security was purchased, such security, if
sold, might be sold at a price greater than its purchase cost. In either
instance, if the security was purchased at face value and held to maturity,
no gain or loss would be realized.
Dividends and distributions attributable to interest from direct
obligations of the United States and paid by the GOVERNMENT MONEY FUND to
individuals currently are not subject to personal income tax in most states.
Dividends and distributions attributable to interest from other securities in
which the GOVERNMENT MONEY FUND may invest, such as repurchase agreements,
however, may be subject to state tax. See "Dividends, Distributions and
Taxes."
FOREIGN SECURITIES (MONEY FUND ONLY) _ Since the Fund's portfolio may
contain securities issued by foreign governments, or any of their political
subdivisions, agencies or instrumentalities, and by foreign subsidiaries and
foreign branches of domestic banks, domestic and foreign branches of foreign
banks, and commercial paper issued by foreign issuers, the Fund may be
subject to additional investment risks with respect to such securities that
are different in some respects from those incurred by a fund which invests
only in debt obligations of U.S. domestic issuers, although such obligations
may be higher yielding when compared to the securities of U.S. domestic
issuers. Such risks include possible political and economic developments,
imposition of
Page 6
foreign withholding taxes on interest income payable on the securities,
establishment of exchange controls or the adoption of other foreign
governmental restrictions which might adversely affect the payment of
principal and interest on these securities and the possible seizure or
nationalization of foreign deposits.
BANK SECURITIES (MONEY FUND ONLY) _ To the extent the Fund's investments are
concentrated in the banking industry, the Fund will have correspondingly
greater exposure to the risk factors which are characteristic of such
investments. Sustained increases in interest rates can adversely affect the
availability or liquidity and cost of capital funds for a bank's lending
activities, and a deterioration in general economic conditions could increase
the exposure to credit losses. In addition, the value of the investment
return on the Fund's shares could be affected by economic or regulatory
developments in or related to the banking industry, and the effects of
competition within the banking industry as well as with other types of
financial institutions. The Fund, however, will seek to minimize its exposure
to such risks by investing only in debt securities which are determined to be
of the highest quality pursuant to procedures established by its Board.
SIMULTANEOUS INVESTMENTS _ Investment decisions for each Fund are made
independently from those of other investment companies advised by The Dreyfus
Corporation. If, however, such other investment companies desire to invest
in, or dispose of, the same securities as a Fund, available investments or
opportunities for sales will be allocated equitably to each investment
company. In some cases, this procedure may adversely affect the size of the
position obtained for or disposed of by a Fund or the price paid or received
by a Fund.
MANAGEMENT OF THE FUNDS
INVESTMENT ADVISER _ The Dreyfus Corporation, located at 200 Park Avenue,
New York, New York 10166, was formed in 1947 and serves as each Fund's
investment adviser. The Dreyfus Corporation is a wholly-owned subsidiary of
Mellon Bank, N.A., which is a wholly-owned subsidiary of Mellon Bank
Corporation ("Mellon"). As of March 31, 1997, The Dreyfus Corporation managed
or administered approximately $82 billion in assets for approximately 1.7
million investor accounts nationwide.
The Dreyfus Corporation supervises and assists in the overall
management of the affairs of each Fund under a separate Management Agreement
with each Fund, subject to the authority of the Fund's Board in accordance
with applicable law.
Mellon is a publicly owned multibank holding company incorporated
under Pennsylvania law in 1971 and registered under the Federal Bank Holding
Company Act of 1956, as amended. Mellon provides a comprehensive range of
financial products and services in domestic and selected international
markets. Mellon is among the twenty-five largest bank holding companies in
the United States based on total assets. Mellon's principal wholly-owned
subsidiaries are Mellon Bank, N.A., Mellon Bank (DE) National Association,
Mellon Bank (MD), The Boston Company, Inc., AFCO Credit Corporation and a
number of companies known as Mellon Financial Services Corporations. Through
its subsidiaries, including The Dreyfus Corporation, Mellon managed more than
$259 billion in assets as of March 31, 1997, including approximately $88
billion in proprietary mutual fund assets. As of March 31, 1997, Mellon,
through various subsidiaries, provided non-investment services, such as
custodial or administration services, for more than $1.061 trillion in
assets, including approximately $58 billion in mutual fund assets.
Under the terms of its respective Management Agreement, each Fund has
agreed to pay The Dreyfus Corporation a monthly fee at the annual rate of .50
of 1% of the value of the Fund's average daily net assets. For the fiscal
year ended February 28, 1997, the MONEY FUND and GOVERNMENT MONEY FUND paid
The Dreyfus Corporation a monthly management fee at the effective annual rate
of .27 of 1% and .30 of 1%, respectively, of the value of such Fund's average
daily net assets, pursuant to separate agreements by The Dreyfus Corporation
then in effect. From time to time, The Dreyfus Corporation may waive receipt
of its fees and/or voluntarily assume certain expenses of a Fund, which would
have the effect of lowering that Fund's expense ratio and increasing yield to
investors. Neither Fund will pay The Dreyfus Corporation at
Page 7
a later time for any amounts it may waive, nor will either Fund reimburse
The Dreyfus Corporation for any amounts it may assume.
The Dreyfus Corporation has agreed, with respect to each Fund, until
such time as The Dreyfus Corporation gives shareholders at least 90 days'
notice to the contrary, that if in any fiscal year of the Fund its aggregate
expenses, exclusive of taxes, brokerage, interest on borrowings and (with the
prior written consent of the necessary state securities commissions)
extraordinary expenses, but including the management fee, exceed .45 of 1% of
the value of its average daily net assets for the fiscal year, the Fund may
deduct from the payment to be made to The Dreyfus Corporation under its
Management Agreement, or The Dreyfus Corporation will bear, such excess
expense.
In allocating brokerage transactions, The Dreyfus Corporation seeks to
obtain the best execution of orders at the most favorable price. Subject to
this determination, The Dreyfus Corporation may consider, among other things,
the receipt of research services and/or the sale of shares of a Fund or other
funds managed, advised or administered by The Dreyfus Corporation as factors
in the selection of broker-dealers to execute portfolio transactions for each
Fund. See "Portfolio Transactions" in the Statement of Additional
Information.
The Dreyfus Corporation may pay the Fund's distributor for
shareholder services from The Dreyfus Corporation's own assets, including
past profits but not including the management fee paid by the Fund. The
Fund's distributor may use part or all of such payments to pay securities
dealers, banks or other financial institutions in respect of these services.
DISTRIBUTOR _ The Fund's distributor is Premier Mutual Fund Services, Inc.
(the "Distributor"), located at 60 State Street, Boston, Massachusetts 02109.
The Distributor's ultimate parent is Boston Institutional Group, Inc.
TRANSFER AND DIVIDEND DISBURSING AGENT AND CUSTODIAN _ Dreyfus Transfer,
Inc., a wholly-owned subsidiary of The Dreyfus Corporation, P.O. Box 9671,
Providence, Rhode Island 02940-9671, is the Transfer and Dividend Disbursing
Agent (the "Transfer Agent") for each Fund. The Transfer Agent will receive
the $5.00 exchange fee, the $5.00 account closeout fee, the $5.00 wire and
Dreyfus TELETRANSFER redemption fee, and the $2.00 checkwriting charge,
described below. A sufficient number of shares will be redeemed automatically
from an investor's account to pay these amounts. These payments will reduce
the transfer agency fee otherwise payable by each Fund. By purchasing shares
of a Fund, you are deemed to have consented to this procedure. The Bank of
New York, 90 Washington Street, New York, New York 10286, is the Custodian
for each Fund.
HOW TO BUY SHARES
Fund shares are sold without a sales charge. You may be charged a fee
if you effect transactions in Fund shares through a securities dealer, bank
or other financial institution. Share certificates are issued only upon your
written request. No certificates are issued for fractional shares. Each Fund
reserves the right to reject any purchase order.
The minimum initial investment in each Fund is $25,000. Subsequent
investments must be at least $1,000. The initial investment must be
accompanied by the Account Application.
You may purchase Fund shares by check or wire, or through the Dreyfus
TELETRANSFER Privilege described below. Checks should be made payable to "The
Dreyfus Family of Funds." Payments to open new accounts which are mailed
should be sent to The Dreyfus Family of Funds, P.O. Box 9387, Providence,
Rhode Island 02940-9387, together with your Account Application. For
subsequent investments, your Fund account number should appear on the check
and an investment slip should be enclosed and sent to The Dreyfus Family of
Funds, P.O. Box 105, Newark, New Jersey 07101-0105. Neither initial nor
subsequent investments should be made by third party check. Purchase orders
may be delivered in person only to a Dreyfus Financial Center. THESE ORDERS
WILL BE FORWARDED TO THE RELEVANT FUND AND
Page 8
WILL BE PROCESSED ONLY UPON RECEIPT THEREBY. For the location of the nearest
Dreyfus Financial Center, please call one of the telephone numbers listed
under "General Information."
Wire payments may be made if your bank account is in a commercial
bank that is a member of the Federal Reserve System or any other bank having
a correspondent bank in New York City. Immediately available funds may be
transmitted by wire to The Bank of New York, together with the applicable
Fund's DDA# as shown below, for purchase of Fund shares in your name: DDA
#8900204419/Dreyfus BASIC Money Market Fund, Inc., or DDA #8900204427/Dreyfus
BASIC U.S. Government Money Market Fund. The wire must include your Fund
account number (for new accounts, your Taxpayer Identification Number ("TIN")
should be included instead), account registration and dealer number, if
applicable. If your initial purchase of Fund shares is by wire, please call
1-800-645-6561 after completing your wire payment to obtain your Fund account
number. Please include your Fund account number on the Account Application
and promptly mail the Account Application to the Fund, as no redemptions will
be permitted until the Account Application is received. You may obtain
further information about remitting funds in this manner from your bank. All
payments should be made in U.S. dollars and, to avoid additional fees and
delays, should be drawn only on U.S. banks. A charge will be imposed if any
check used for investment in your account does not clear. Each Fund makes
available to certain large institutions the ability to issue purchase
instructions through compatible computer facilities.
Shares of each Fund also may be purchased through IRA accounts and
other kinds of retirement accounts, such as Keogh Plans and SEP-IRA's,
provided the opening balance is at least $5,000. Subsequent investments in
such retirement accounts must be at least $1,000. For details, please contact
Dreyfus Service Corporation by calling toll free 1-800-358-5566.
Subsequent investments also may be made by electronic transfer of
funds from an account maintained in a bank or other domestic financial
institution that is an Automated Clearing House member. You must direct the
institution to transmit immediately available funds through the Automated
Clearing House to The Bank of New York with instructions to credit your Fund
account. The instructions must specify your Fund account registration and
your Fund account number PRECEDED BY THE DIGITS "1111."
Shares of each Fund are sold on a continuous basis at the net asset
value per share next determined after an order in proper form is received by
the Transfer Agent or other agent or entity subject to the direction of such
agents. Net asset value per share is determined as of the close of trading on
the floor of the New York Stock Exchange (currently 4:00 p.m., New York time)
on each day the New York Stock Exchange or Transfer Agent, as to the MONEY
FUND, or the New York Stock Exchange, as to the Government Money Fund, is
open for business. Net asset value per share is computed by dividing the
value of the Fund's net assets (i.e., the value of its assets less
liabilities) by the total number of shares outstanding. See "Determination of
Net Asset Value" in the Statement of Additional Information.
Federal regulations require that you provide a certified TIN upon
opening or reopening an account. See "Dividends, Distributions and Taxes" and
the Account Application for further information concerning this requirement.
Failure to furnish a certified TIN to the Fund could subject you to a $50
penalty imposed by the Internal Revenue Service (the "IRS").
DREYFUS TELETRANSFER PRIVILEGE _ You may purchase shares (minimum $1,000,
maximum $150,000 per day) without charge by telephone if you have checked the
appropriate box and supplied the necessary information on the Account
Application or have filed a Shareholder Services Form with the Transfer
Agent. The proceeds will be transferred between the bank account designated
in one of these documents and your Fund account. Only a bank account
maintained in a domestic financial institution which is an Automated Clearing
House member may be so designated. The Fund may modify or terminate this
Privilege at any time. No fee is contemplated for purchases of Fund shares
pursuant to this Privilege.
Page 9
If you have selected the Dreyfus TELETRANSFER Privilege, you may
request a Dreyfus TELETRANSFER purchase of shares by calling 1-800-645-6561
or, if you are calling from overseas, call 516-794-5452.
SHAREHOLDER SERVICES
FUND EXCHANGES _ You may purchase, in exchange for shares of your Fund,
shares of certain other funds managed or administered by The Dreyfus
Corporation, to the extent such shares are offered for sale in your state of
residence. These funds have different investment objectives which may be of
interest to you. If you desire to use this service, please call
1-800-645-6561 to determine if it is available and whether any conditions are
imposed on its use. You will be charged a $5.00 fee for each exchange you
make out of your Fund. This fee will be deducted from your account and paid
to the Transfer Agent; however, each Fund will waive this fee if the closing
balance in the shareholder's account on the business day immediately
preceding the effective date of such transaction is $50,000 or more.
To request an exchange, you must give exchange instructions to the
Transfer Agent in writing or by telephone. Before an exchange, you must
obtain and should review a copy of the current prospectus of the fund into
which the exchange is being made. Prospectuses may be obtained by calling
1-800-645-6561. Except in the case of personal retirement plans, the shares
being exchanged must have a current value of at least $1,000; furthermore,
when establishing a new account by exchange, the shares being exchanged must
have a value of at least the minimum initial investment required for the fund
into which the exchange is being made. The ability to issue exchange
instructions by telephone is given to all Fund shareholders automatically,
unless you check the applicable "No" box on the Account Application,
indicating that you specifically refuse this privilege. The Telephone
Exchange Privilege may be established for an existing account by written
request signed by all shareholders on the account, by a separate signed
Shareholder Services Form, available by calling 1-800-645-6561, or by oral
request from any of the authorized signatories on the account by calling
1-800-645-6561. If you have established the Telephone Exchange Privilege, you
may telephone exchange instructions by calling 1-800-645-6561. If you are
calling from overseas, call 516-794-5452. See "How to Redeem Shares _
Procedures." Upon an exchange into a new account, the following shareholder
services and privileges, as applicable and where available, will be
automatically carried over to the fund into which the exchange is made:
Telephone Exchange Privilege, Check Redemption Privilege, Wire Redemption
Privilege, Telephone Redemption Privilege, Dreyfus TELETRANSFER Privilege and
the dividend/capital gain distribution option (except for Dreyfus Dividend
Sweep) selected by the investor.
Shares will be exchanged at the next determined net asset value;
however, a sales load may be charged with respect to exchanges into funds
sold with a sales load. If you are exchanging into a fund that charges a
sales load, you may qualify for share prices which do not include the sales
load or which reflect a reduced sales load, if the shares you are exchanging
were: (a) purchased with a sales load, (b) acquired by a previous exchange
from shares of the fund purchased with a sales load, or (c) acquired through
reinvestment of dividends or distributions paid with respect to the foregoing
categories of shares. To qualify, at the time of the exchange you must notify
the Transfer Agent. Any such qualification is subject to confirmation of your
holdings through a check of appropriate records. See "Shareholder Services"
in the Statement of Additional Information. Each Fund reserves the right to
reject any exchange request in whole or in part and will reject any request
to exchange out of one of the Funds in excess of four during any calendar
year. The availability of Fund Exchanges may be modified or terminated at any
time upon notice to shareholders. See "Dividends, Distributions and Taxes."
DREYFUS DIVIDEND SWEEP PRIVILEGE _ Dreyfus Dividend Sweep Privilege enables
you to invest automatically dividends or dividends and capital gain
distributions, if any, paid by the Fund in shares of another fund in the
Dreyfus Family of Funds of which you are a shareholder. Shares of the other
fund will be purchased at the then-current net asset value; however, a sales
load may be charged with respect to investments in shares of a fund sold with
a sales load. If you are investing in a fund that charges a sales load, you
Page 10
may qualify for share prices which do not include the sales load or which
reflect a reduced sales load. If you are investing in a fund that charges a
contingent deferred sales charge, the shares purchased will be subject to the
contingent deferred sales charge, if any, applicable to the purchased shares.
See "Shareholder Services" in the Statement of Additional Information. For
more information concerning this Privilege or to request a Dividend Options
Form, please call toll free 1-800-645-6561. You may cancel your participation
in this Privilege by mailing written notification to The Dreyfus Family of
Funds, P.O. Box 9671, Providence, Rhode Island 02940-9671. To select a new
fund after cancellation, you must submit a new Dividend Options Form.
Enrollment in or cancellation of this Privilege is effective three business
days following receipt. This Privilege is available only for existing
accounts and may not be used to open new accounts. Minimum subsequent
investments do not apply. Each Fund may modify or terminate this Privilege at
any time or charge a service fee. No such fee currently is contemplated.
HOW TO REDEEM SHARES
GENERAL
You may request redemption of your shares at any time. Redemption
requests should be transmitted to the Transfer Agent as described below. When
a request is received in proper form, your Fund will redeem the shares at the
next determined net asset value.
YOU WILL BE CHARGED $5.00 WHEN YOU REDEEM ALL SHARES IN YOUR ACCOUNT
OR YOUR ACCOUNT IS OTHERWISE CLOSED OUT. The fee will be deducted from your
redemption proceeds and paid to the Transfer Agent. The account closeout fee
does not apply to exchanges out of the Fund or to wire or Dreyfus TELETRANSFER
redemptions which close out an account, for each of which a $5.00 fee may
apply; however, each Fund will waive the account closeout fee if the closing
balance in the shareholder's account on the business day immediately
preceding the effective date of such transaction is $50,000 or more.
Securities dealers, banks and other financial institutions may charge their
clients a fee for effecting redemptions of Fund shares. Any certificates
representing Fund shares being redeemed must be submitted with the redemption
request. The value of the shares redeemed may be more or less than their
original cost, depending upon the Fund's then-current net asset value.
Each Fund ordinarily will make payment for all shares redeemed within
seven days after receipt by the Transfer Agent of a redemption request in
proper form, except as provided by the rules of the Securities and Exchange
Commission. HOWEVER, IF YOU HAVE PURCHASED FUND SHARES BY CHECK OR BY THE
DREYFUS TELETRANSFER PRIVILEGE AND SUBSEQUENTLY SUBMIT A WRITTEN REDEMPTION
REQUEST TO THE TRANSFER AGENT, THE REDEMPTION WILL BE EFFECTIVE AND THE
REDEMPTION PROCEEDS WILL BE TRANSMITTED TO YOU PROMPTLY UPON BANK CLEARANCE
OF YOUR PURCHASE CHECK OR DREYFUS TELETRANSFER PURCHASE ORDER, WHICH MAY TAKE
UP TO EIGHT BUSINESS DAYS OR MORE. IN ADDITION, THE FUND WILL NOT HONOR
REDEMPTION CHECKS UNDER THE CHECK REDEMPTION PRIVILEGE, AND WILL REJECT
REQUESTS TO REDEEM SHARES BY WIRE OR TELEPHONE OR PURSUANT TO THE DREYFUS
TELETRANSFER PRIVILEGE, FOR A PERIOD OF EIGHT BUSINESS DAYS AFTER RECEIPT BY
THE TRANSFER AGENT OF THE PURCHASE CHECK OR THE DREYFUS TELETRANSFER PURCHASE
ORDER AGAINST WHICH SUCH REDEMPTION IS REQUESTED. THESE PROCEDURES WILL NOT
APPLY IF YOUR SHARES WERE PURCHASED BY WIRE PAYMENT, OR IF YOU OTHERWISE HAVE
A SUFFICIENT COLLECTED BALANCE IN YOUR ACCOUNT TO COVER THE REDEMPTION
REQUEST. PRIOR TO THE TIME ANY REDEMPTION IS EFFECTIVE, DIVIDENDS ON SUCH
SHARES WILL ACCRUE AND BE PAYABLE, AND YOU WILL BE ENTITLED TO EXERCISE ALL
OTHER RIGHTS OF BENEFICIAL OWNERSHIP. Fund shares will not be redeemed until
the Transfer Agent has received your Account Application.
Each Fund reserves the right to redeem your account at its option
upon not less than 45 days' written notice if your account's net asset value
is $10,000 or less and remains so during the notice period. The $5.00 account
closeout fee would be charged in such case.
Page 11
PROCEDURES
You may redeem shares by using the regular redemption procedure
through the Transfer Agent, or through the Telephone Redemption Privilege,
which is granted automatically unless you specifically refuse it by checking
the applicable "No" box on the Account Application. The Telephone Redemption
Privilege may be established for an existing account by a separate signed
Shareholder Services Form or by oral request from any of the authorized
signatories on the account by calling 1-800-645-6561. You also may redeem
shares through the Check Redemption Privilege, the Wire Redemption Privilege,
or the Dreyfus TeleTransfer Privilege, if you have checked the appropriate
box and supplied the necessary information on the Account Application or have
filed a Shareholder Services Form with the Transfer Agent. The Fund makes
available to certain large institutions the ability to issue redemption
instructions through compatible computer facilities. Each Fund reserves the
right to refuse any request made by wire or telephone, including requests
made shortly after a change of address, and may limit the amount involved or
the number of such requests. Each Fund may modify or terminate any redemption
privilege at any time. Shares held under Keogh Plans, IRAs or other
retirement plans, and shares for which certificates have been issued, are not
eligible for the Check Redemption, Wire Redemption, Telephone Redemption or
Dreyfus TELETRANSFER Privilege.
The Telephone Redemption Privilege or Telephone Exchange Privilege
authorizes the Transfer Agent to act on telephone instructions from any
person representing himself or herself to be you and reasonably believed by
the Transfer Agent to be genuine. Each Fund will require the Transfer Agent
to employ reasonable procedures, such as requiring a form of personal
identification, to confirm that instructions are genuine and, if it does not
follow such procedures, the Fund or the Transfer Agent may be liable for any
losses due to unauthorized or fraudulent instructions. Neither the Fund nor
the Transfer Agent will be liable for following telephone instructions
reasonably believed to be genuine.
During times of drastic economic or market conditions, you may
experience difficulty in contacting the Transfer Agent by telephone to
request a redemption or exchange of Fund shares. In such cases, you should
consider using the other redemption procedures described herein. Use of these
other redemption procedures may result in your redemption request being
processed at a later time than it would have been if telephone redemption had
been used.
REGULAR REDEMPTION _ Under the regular redemption procedure, you may redeem
Fund shares by written request mailed to The Dreyfus Family of Funds, P.O.
Box 9671, Providence, Rhode Island 02940-9671. Redemption requests may be
delivered in person only to a Dreyfus Financial Center. THESE REQUESTS WILL
BE FORWARDED TO THE RELEVANT FUND AND WILL BE PROCESSED ONLY UPON RECEIPT
THEREBY. For the location of the nearest Dreyfus Financial Center, please
call one of the telephone numbers listed under "General Information."
Redemption requests must be signed by each shareholder, including each owner
of a joint account, and each signature must be guaranteed. The Transfer Agent
has adopted standards and procedures pursuant to which signature-guarantees
in proper form generally will be accepted from domestic banks, brokers,
dealers, credit unions, national securities exchanges, registered securities
associations, clearing agencies and savings associations, as well as from
participants in the New York Stock Exchange Medallion Signature Program, the
Securities Transfer Agents Medallion Program ("STAMP") and the Stock
Exchanges Medallion Program. If you have any questions with respect to
signature-guarantees, please call one of the telephone numbers listed under
"General Information."
Redemption proceeds of at least $5,000 will be wired to any member
bank of the Federal Reserve System in accordance with a written
signature-guaranteed request.
CHECK REDEMPTION PRIVILEGE _ You may write Redemption Checks drawn on your
Fund account. Redemption Checks may be made payable to the order of any
person in the amount of $1,000 or more.
Page 12
Redemption Checks should not be used to close your account. Your account will
be charged $2.00 for each Redemption Check you write; however, each Fund will
waive this fee if the closing balance in the shareholder's account on the
business day immediately preceding the effective date of such transaction is
$50,000 or more. The Transfer Agent also will impose a fee for stopping
payment of a Redemption Check upon your request or if the Transfer Agent
cannot honor the Redemption Check due to insufficient funds or other valid
reason. Such a fee is not subject to waiver based on account balance or other
factors. You should date your Redemption Checks with the current date when
you write them. Please do not postdate your Redemption Checks. If you do, the
Transfer Agent will honor, upon presentment, even if presented before the date
of the check, all postdated Redemption Checks which are dated within six
months of presentment for payment, if they are otherwise in good order. The
Fund may return an unpaid Redemption Check that would draw your account
balance below $5.00 and you may be subject to extra charges. If you hold
shares in a Dreyfus-sponsored IRA account, you may be permitted to make
withdrawals from your IRA account using checks furnished to you by The Dreyfus
Trust Company.
WIRE REDEMPTION PRIVILEGE _ You may request by wire or telephone that
redemption proceeds (minimum $5,000) be wired to your account at a bank which
is a member of the Federal Reserve System, or a correspondent bank if your
bank is not a member.You will be charged a $5.00 fee for each wire
redemption, which will be deducted from your account and paid to the Transfer
Agent; however, each Fund will waive this fee if the closing balance in the
shareholder's account on the business day immediately preceding the effective
date of such transaction is $50,000 or more. Holders of jointly registered
Fund or bank accounts may have redemption proceeds of not more than $250,000
wired within any 30-day period. You may telephone redemption requests by
calling 1-800-645-6561 or, if you are calling from overseas, call
516-794-5452. The Statement of Additional Information sets forth instructions
for transmitting redemption requests by wire.
TELEPHONE REDEMPTION PRIVILEGE _ You may request by telephone that
redemption proceeds (maximum $150,000 per day) be paid by check and mailed to
your address. You may telephone redemption instructions by calling
1-800-645-6561 or, if you are calling from overseas, call 516-794-5452. The
Telephone Redemption Privilege is granted automatically unless you refuse it.
DREYFUS TELETRANSFER PRIVILEGE _ You may request by telephone that
redemption proceeds (minimum $1,000 per day) be transferred between your Fund
account and your bank account . Only a bank account maintained in a domestic
financial institution which is an Automated Clearing House member may be
designated. Redemption proceeds will be on deposit in your account at an
Automated Clearing House member bank ordinarily two days after receipt of the
redemption request. Holders of jointly registered Fund or bank accounts may
redeem through the Dreyfus TELETRANSFER Privilege for transfer to their bank
account not more than $250,000 within any 30-day period. You will be charged
a $5.00 fee for each Dreyfus TELETRANSFER redemption, which will be deducted
from your account and paid to the Transfer Agent; however, each Fund will
waive this fee if the closing balance in the shareholder's account on the
business day immediately preceding the effective date of such transaction is
$50,000 or more.
If you have selected the Dreyfus TELETRANSFER Privilege, you may
request a Dreyfus TELETRANSFER redemption of shares by calling 1-800-645-6561
or, if you are calling from overseas, call 516-794-5452.
SHAREHOLDER SERVICES PLAN
Each Fund has adopted a Shareholder Services Plan pursuant to which the Fund
reimburses Dreyfus Service Corporation, a wholly-owned subsidiary of The
Dreyfus Corporation, an amount not to exceed an annual rate of .25 of 1% of
the value of the Fund's average daily net assets for certain allocated
expenses of providing personal services and/or maintaining shareholder
accounts. The services provided may include personal services relating to
shareholder accounts, such as answering shareholder inquiries regarding the
Fund and providing reports and other information, and services related to the
maintenance of shareholder accounts.
Page 13
DIVIDENDS, DISTRIBUTIONS AND TAXES
Ordinarily, dividends are declared from net investment income on each
day the New York Stock Exchange and Transfer Agent, as to the MONEY FUND, or
the New York Stock Exchange, as to the GOVERNMENT MONEY FUND, is open for
business. Each Fund's earnings for Saturdays, Sundays and holidays are
declared as dividends on the next business day. Dividends for each Fund
usually are paid on the last calendar day of each month, and are
automatically reinvested in additional Fund shares at net asset value or, at
your option, paid in cash. If you redeem all shares in your account at any
time during the month, all dividends to which you are entitled will be paid
to you along with the proceeds of the redemption. If you are an omnibus
accountholder and indicate in a partial redemption request that a portion of
any accrued dividends to which such account is entitled belongs to an
underlying accountholder who has redeemed all shares in his or her account,
such portion of the accrued dividends will be paid to you along with the
proceeds of the redemption, after the deduction of any fees. Distributions
from net realized securities gains, if any, generally are declared and paid
once a year, but either Fund may make distributions on a more frequent basis
to comply with the distribution requirements of the Internal Revenue Code of
1986, as amended (the "Code"), in all events in a manner consistent with the
provisions of the 1940 Act. Neither Fund will make distributions from net
realized securities gains unless capital loss carryovers, if any, have been
utilized or have expired. You may choose whether to receive distributions in
cash or to reinvest in additional Fund shares at net asset value. All
expenses are accrued daily and deducted before declaration of dividends to
investors.
Dividends derived from net investment income, together with
distributions from any net realized short-term securities gains and all or a
portion of any gains realized from the sale or other disposition of certain
market discount bonds, paid by the Fund will be taxable to U.S. shareholders
as ordinary income, whether received in cash or reinvested in additional Fund
shares. No dividend paid by a Fund will qualify for the dividends received
deduction allowable to certain U.S. corporations. Distributions from net
realized long-term securities gains of a Fund, if any, will be taxable to
U.S. shareholders as long-term capital gains for Federal income tax purposes
regardless of how long you have held your Fund shares and whether such
distributions are received in cash or reinvested in additional Fund shares.
The Code provides that the net capital gains of an individual generally will
not be subject to Federal income tax at a rate in excess of 28%. Dividends
and distributions may be subject to certain state and local taxes.
Dividends derived from net investment income, together with
distributions from net realized short-term securities gains and all or a
portion of any gains realized from the sale or other disposition of certain
market discount bonds, paid by the Fund to a foreign investor generally are
subject to U.S. nonresident withholding taxes at the rate of 30%, unless the
foreign investor claims the benefit of a lower rate specified in a tax
treaty. Distributions from net realized long-term securities gains paid by a
Fund to a foreign investor generally will not be subject to U.S. nonresident
withholding tax. However, such distributions may be subject to backup
withholding, as described below, unless the foreign investor certifies his
non-U.S. residency status.
Notice as to the tax status of your dividends and distributions will
be mailed to you annually. You also will receive periodic summaries of your
account which will include information as to dividends and distributions from
securities gains, if any, paid during the year. Dividends and distributions
attributable to interest from direct obligations of the United States and
paid by a Fund to individuals currently are not subject to tax in most
states. Dividends and distributions attributable to interest from other
securities in which each Fund may invest may be subject to state tax. The
GOVERNMENT MONEY FUND intends to provide shareholders with a statement which
sets forth the percentage of dividends and distributions paid by such Fund
that is attributable to interest income from direct obligations of the United
States.
Page 14
The exchange of shares of one fund for shares of another is treated
for Federal income tax purposes as a sale of the shares given in exchange by
the shareholder and, therefore, an exchanging shareholder may realize a
taxable gain or loss.
Federal regulations generally require each Fund to withhold ("backup
withholding") and remit to the U.S. Treasury 31% of dividends and
distributions from net realized securities gains paid to a shareholder if
such shareholder fails to certify either that the TIN furnished in connection
with opening an account is correct, or that such shareholder has not received
notice from the IRS of being subject to backup withholding as a result of a
failure to properly report taxable dividend or interest income on a Federal
income tax return. Furthermore, the IRS may notify a Fund to institute backup
withholding if the IRS determines a shareholder's TIN is incorrect or if a
shareholder has failed to properly report taxable dividend and interest
income on a Federal income tax return.
A TIN is either the Social Security number or employer identification
number of the record owner of the account. Any tax withheld as a result of
backup withholding does not constitute an additional tax imposed on the
record owner of the account, and may be claimed as a credit on the record
owner's Federal income tax return.
Management of each Fund believes that such Fund has qualified for the
fiscal year ended February 28, 1997 as a "regulated investment company" under
the Code. Each Fund intends to continue to so qualify as long as such
qualification is in the best interests of its shareholders. Such
qualification relieves a Fund of any liability for Federal income tax to the
extent its earnings are distributed in accordance with applicable provisions
of the Code. Each Fund is subject to a non-deductible 4% excise tax, measured
with respect to certain undistributed amounts of taxable investment income
and capital gains.
You should consult your tax adviser regarding specific questions as
to Federal, state or local taxes.
GENERAL INFORMATION
MONEY FUND _ The Fund was incorporated under Maryland law on March 17, 1992,
and commenced operations on April 24, 1992. The Fund is authorized to issue 3
billion shares of Common Stock, par value $.001 per share. Each share has one
vote.
Unless otherwise required by the 1940 Act, ordinarily it will not be
necessary for the Fund to hold annual meetings of shareholders. As a result,
Fund shareholders may not consider each year the election of Directors or the
appointment of auditors. However, pursuant to the Fund's By-Laws, the holders
of at least 10% of the shares outstanding and entitled to vote may require
the Fund to hold a special meeting of shareholders for purposes of removing a
Director from office and for any other purpose. Fund shareholders may remove
a Director by the affirmative vote of a majority of the Fund's outstanding
voting shares. In addition, the Board of Directors will call a meeting of
shareholders for the purpose of electing Directors if, at any time, less than
a majority of the Directors then holding office have been elected by
shareholders.
GOVERNMENT MONEY FUND _ The Fund was organized as an unincorporated business
trust under the laws of the Commonwealth of Massachusetts pursuant to an
Agreement and Declaration of Trust (the "Trust Agreement") dated September
12, 1990, and commenced operations on April 24, 1992. The Fund is authorized
to issue an unlimited number of shares of beneficial interest, par value
$.001 per share. Each share has one vote.
Under Massachusetts law, shareholders could, under certain
circumstances, be held personally liable for the obligations of the Fund.
However, the Trust Agreement disclaims shareholder liability for acts or
obligations of the Fund and requires that notice of such disclaimer be given
in each agreement, obligation or instrument entered into or executed by the
Fund or a Trustee. The Trust Agreement provides for indemnification from the
Fund's property for all losses and expenses of any shareholder held personally
liable for the obligations of the Fund. Thus, the risk of a shareholder
incurring financial loss on account of shareholder liability is limited to
cir-
Page 15
cumstances in which the Fund itself would be unable to meet its
obligations, a possibility which management believes is remote. Upon payment
of any liability incurred by the Fund, the shareholder paying such liability
will be entitled to reimbursement from the general assets of the Fund. The
Fund intends to conduct its operations in such a way as to avoid, as far as
possible, ultimate liability of the shareholders for liabilities of the Fund.
As discussed under "Management of the Funds" in the Statement of Additional
Information, the Fund ordinarily will not hold shareholder meetings; however,
shareholders under certain circumstances may have the right to call a meeting
of shareholders for the purpose of voting to remove Trustees.
BOTH FUNDS _ Although each Fund is offering only its own shares, it is
possible that one Fund might become liable for any misstatement in this
Prospectus about the other Fund. The respective Boards of the Funds have
considered this factor in approving the use of this single combined
Prospectus.
The Transfer Agent maintains a record of your ownership and will send
confirmations and statements of account. Each Fund sends an annual and
semi-annual financial report to all its shareholders.
Shareholder inquiries may be made by writing to your Fund at 144
Glenn Curtiss Boulevard, Uniondale, New York 11556-0144, or by calling toll
free 1-800-645-6561; in New York City, call 1-718-895-1206; outside the U.
S., call 516-794-5452.
Page 16
APPENDIX
INVESTMENT TECHNIQUES
BORROWING MONEY _ The MONEY FUND may borrow money, including in connection
with the entry into reverse repurchase agreements described below, provided
that it maintains continuous asset coverage (that is, total assets including
borrowings, less liabilities exclusive of borrowings) of 300% of the amount
borrowed. The GOVERNMENT MONEY FUND may borrow money, but only for temporary
or emergency (not leveraging) purposes, in an amount up to 15% of the value
of its total assets (including the amount borrowed) valued at the lesser of
cost or market, less liabilities (not including the amount borrowed) at the
time the borrowing is made. As to each Fund, while borrowings exceed 5% of
the Fund's total assets, the Fund will not make any additional investments.
REVERSE REPURCHASE AGREEMENTS (MONEY FUND ONLY) _ The Fund may enter into
reverse repurchase agreements with banks, brokers or dealers. Reverse
repurchase agreements involve the transfer by the Fund of an underlying debt
instrument in return for cash proceeds based on a percentage of the value of
the security. At an agreed upon future date, the Fund repurchases the
security, at principal, plus accrued interest. As a result of these
transactions, the Fund is exposed to greater potential fluctuations in the
value of its assets and its net asset value per share. These transactions
will be subject to interest costs which may or may not be recovered by
appreciation of the securities purchased; in certain cases, interest costs on
the money borrowed may exceed the return received on the securities purchased.
The Fund's Board has considered the risks to the Fund and its shareholders
which may result from the entry into reverse repurchase agreements and has
determined that the entry into such agreements is consistent with the Fund's
investment objective and management policies.
FORWARD COMMITMENTS (MONEY FUND ONLY) _ The Fund may purchase securities on
a forward commitment or when-issued basis, which means that delivery and
payment take place a number of days after the date of the commitment to
purchase. The payment obligation and the interest rate receivable on a
forward commitment or when-issued security are fixed when the Fund enters
into the commitment, but the Fund does not make payment until it receives
delivery from the counterparty. The Fund will commit to purchase such
securities only with the intention of actually acquiring the securities, but
the Fund may sell these securities before the settlement date if it is deemed
advisable. The Fund will not accrue income in respect of a security purchased
on a forward commitment basis prior to its stated delivery date. A segregated
account of the Fund consisting of permissible liquid assets at least equal at
all times to the amount of the forward commitments will be established and
maintained at the Fund's custodian bank.
LENDING PORTFOLIO SECURITIES (MONEY FUND ONLY) _ The Fund may lend
securities from its portfolio to brokers, dealers and other institutional
investors needing to borrow securities to complete certain transactions. The
Fund continues to be entitled to payments in amounts equal to the interest or
other distributions payable on the loaned securities which affords the Fund
an opportunity to earn interest on the amount of the loan and on the loaned
securities' collateral. Loans of portfolio securities may not exceed 33 1/3%
of the value of the Fund's total assets, and the Fund will receive collateral
consisting of cash, U.S. Government securities or irrevocable letters of
credit which will be maintained at all times in an amount equal to at least
100% of the current market value of the loaned securities. Such loans are
terminable at any time upon specified notice. The Fund might experience risk
of loss if the institution with which it has engaged in a portfolio loan
transaction breaches its agreement with the Fund.
PORTFOLIO SECURITIES
U.S. GOVERNMENT SECURITIES _ Each Fund may invest in U.S. Treasury
securities and other securities issued or guaranteed by the U.S. Government
or its agencies or instrumentalities. These securities differ in their
interest rates, maturities, and time of issuance. Some obligations issued or
guaranteed by U.S. Government agencies and instrumentalities are supported by
the full faith and credit of the U.S. Treasury;
Page 17
others by the right of the issuer to borrow from the Treasury; others by
discretionary authority of the U.S. Government to purchase certain obligations
of the agency or instrumentality; and others only by the credit of the agency
or instrumentality. These securities bear fixed, floating or variable rates of
interest. Interest may fluctuate based on generally recognized reference
rates or the relationship of rates. While the U.S. Government provides
financial support to such U.S. Government-sponsored agencies or
instrumentalities, no assurance can be given that it will always do so, since
it is not so obligated by law.
REPURCHASE AGREEMENTS _ Each Fund may enter into repurchase agreements with
certain banks or non-bank dealers. In a repurchase agreement, the Fund buys,
and the seller agrees to repurchase, a security at a mutually agreed upon
time and price (usually within seven days). The repurchase agreement thereby
determines the yield during the purchaser's holding period, while the
seller's obligation to repurchase is secured by the value of the underlying
security. Repurchase agreements could involve risks in the event of a default
or insolvency of the other party to the agreement, including the possible
delays or restrictions upon the Fund's ability to dispose of the underlying
securities.
BANK OBLIGATIONS (MONEY FUND ONLY) _ The Fund may purchase certificates of
deposit, time deposits, bankers' acceptances and other short-term obligations
issued by domestic banks, foreign subsidiaries or foreign branches of
domestic banks and domestic and foreign branches of foreign banks. With
respect to such securities issued by foreign subsidiaries or foreign branches
of domestic banks, and domestic and foreign branches of foreign banks, the
Fund may be subject to additional investment risks that are different in some
respects from those incurred by a fund which invests only in debt obligations
of U.S. domestic issuers. See "Description of the Funds _ Investment
Considerations and Risks _ Foreign Securities."
Certificates of deposit are negotiable certificates evidencing the
obligation of a bank to repay funds deposited with it for a specified period
of time.
Time deposits are non-negotiable deposits maintained in a banking
institution for a specified period of time (in no event longer than seven
days) at a stated interest rate.
Bankers' acceptances are credit instruments evidencing the obligation
of a bank to pay a draft drawn on it by a customer. These instruments reflect
the obligation both of the bank and of the drawer to pay the face amount of
the instrument upon maturity. The other short-term obligations may include
uninsured, direct obligations bearing fixed, floating or variable interest
rates.
COMMERCIAL PAPER (MONEY FUND ONLY) _ The Fund may purchase commercial paper
consisting of short-term, unsecured promissory notes issued to finance
short-term credit needs. The commercial paper purchased by the Fund will
consist only of direct obligations issued by domestic and foreign entities.
The other corporate obligations in which the Fund may invest consist of high
quality, U.S. dollar denominated short-term bonds and notes (including
variable amount master demand notes) issued by domestic and foreign
corporations, including banks.
FLOATING AND VARIABLE RATE OBLIGATIONS (MONEY FUND ONLY) _ The Fund may
purchase floating and variable rate demand notes and bonds, which are
obligations ordinarily having stated maturities in excess of 13 months, but
which permit the holder to demand payment of principal at any time, or at
specified intervals not exceeding 13 months, in each case upon not more than
30 days' notice. Variable rate demand notes include master demand notes which
are obligations that permit the Fund to invest fluctuating amounts, at
varying rates of interest, pursuant to direct arrangements between the Fund,
as lender, and the borrower. These obligations permit daily changes in the
amount borrowed. Because these obligations are direct lending arrangements
between the lender and borrower, it is not contemplated that such instruments
generally will be traded, and there generally is no established secondary
market for these obligations, although they are redeemable at face value,
plus accrued interest. Accordingly, where these obligations are not secured
by let-
Page 18
ters of credit or other credit support arrangements, the Fund's right
to redeem is dependent on the ability of the borrower to pay principal and
interest on demand.
PARTICIPATION INTERESTS (MONEY FUND ONLY) _ The Fund may purchase from
financial institutions participation interests in securities in which the
Fund may invest. A participation interest gives the Fund an undivided
interest in the security in the proportion that the Fund's participation
interest bears to the total principal amount of the security. These
instruments may have fixed, floating or variable rates of interest, with
remaining maturities of 13 months or less. If the participation interest is
unrated, or has been given a rating below that which is permissible for
purchase by the Fund, the participation interest will be backed by an
irrevocable letter of credit or guarantee of a bank, or the payment
obligation otherwise will be collateralized by U.S. Government securities,
or, in the case of unrated participation interests, The Dreyfus Corporation
must have determined that the instrument is of comparable quality to those
instruments in which the Fund may invest. For certain participation
interests, the Fund will have the right to demand payment, on not more than
seven days' notice, for all or any part of the Fund's participation interest
in the security, plus accrued interest. As to these instruments, the Fund
intends to exercise its right to demand payment only upon a default under the
terms of the security, as needed to provide liquidity to meet redemptions, or
to maintain or improve the quality of its investment portfolio.
ASSET-BACKED SECURITIES (MONEY FUND ONLY) _ The Fund may purchase
asset-backed securities, which are securities issued by special purpose
entities whose primary assets consist of a pool of mortgages, loans,
receivables or other assets. Payment of principal and interest may depend
largely on the cash flows generated by the assets backing the securities and,
in certain cases, supported by letters of credit, surety bonds or other forms
of credit or liquidity enhancements. The value of these asset-backed
securities also may be affected by the creditworthiness of the servicing
agent for the pool of assets, the originator of the loans or receivables or
the financial institution providing the credit support.
ILLIQUID SECURITIES (MONEY FUND ONLY) _ The Fund may invest up to 10% of
the value of its net assets in securities as to which a liquid trading market
does not exist, provided such investments are consistent with the Fund's
investment objective. Such securities may include securities that are not
readily marketable, such as certain securities that are subject to legal or
contractual restrictions on resale, and repurchase agreements providing for
settlement in more than seven days after notice. By investing in these
securities, the Fund is subject to a risk that should the Fund desire to sell
them when a ready buyer is not available at a price the Fund deems
representative of their value, the value of the Fund's net assets could be
adversely affected.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND IN EACH
FUND'S OFFICIAL SALES LITERATURE IN CONNECTION WITH THE OFFER OF SUCH FUND'S
SHARES, AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY A FUND. THIS PROSPECTUS DOES
NOT CONSTITUTE AN OFFER IN ANY STATE IN WHICH, OR TO ANY PERSON TO WHOM, SUCH
OFFERING MAY NOT LAWFULLY BE MADE.
Page 19
Combined
Prospectus for
BASIC Money Market Fund, Inc.
BASIC U.S. Government
Money Market
Fund
Registration Mark
Copy Rights1997 Dreyfus Service Corporation
123/124p070197
Page 20
DREYFUS BASIC MONEY MARKET FUND, INC.
DREYFUS BASIC U.S. GOVERNMENT MONEY MARKET FUND
COMBINED PART B
(STATEMENT OF ADDITIONAL INFORMATION)
JULY 1, 1997
This Statement of Additional Information, which is not a prospectus,
supplements and should be read in conjunction with the current combined
Prospectus of Dreyfus BASIC Money Market Fund, Inc. (the "Money Fund") and
Dreyfus BASIC U.S. Government Money Market Fund (the "Government Money
Fund")(collectively, the "Funds"), dated July 1, 1997, as it may be revised
from time to time. To obtain a copy of the Funds' Prospectus, please write
to the Funds at 144 Glenn Curtiss Boulevard, Uniondale, New York 11556-0144,
or call the following numbers:
Call Toll Free 1-800-645-6561
In New York City -- Call 1-718-895-1206
Outside the U.S. -- Call 516-794-5452
The Dreyfus Corporation (the "Manager") serves as each Fund's investment
adviser.
Premier Mutual Fund Services, Inc. (the "Distributor") is the
distributor of each Fund's shares.
Each Fund is a separate entity with a separate portfolio. The
operations and investment results of one Fund are unrelated to those of the
other Fund. This combined Statement of Additional Information has been
prepared for an investor's convenience to provide each investor the
opportunity to consider two investment choices in one document.
TABLE OF CONTENTS
Page
Investment Objective and Management Policies.................. B-2
Management of the Funds....................................... B-7
Management Agreements......................................... B-12
Purchase of Shares............................................ B-14
Shareholder Services Plan..................................... B-16
Redemption of Shares.......................................... B-16
Shareholder Services.......................................... B-18
Determination of Net Asset Value.............................. B-20
Portfolio Transactions........................................ B-21
Dividends, Distributions and Taxes............................ B-22
Yield Information............................................. B-22
Information About the Funds................................... B-23
Transfer and Dividend Disbursing Agent, Custodian,
Counsel and Independent Auditors............................ B-23
Appendix...................................................... B-24
Financial Statements
Money Fund.................................................. B-26
Government Money Fund....................................... B-34
Reports of Independent Auditors............................... B-42, B-43
INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES
The following information supplements and should be read in conjunction
with the sections in the Funds' Prospectus entitled "Description of the Funds"
and "Appendix."
Portfolio Securities
Repurchase Agreements. Each Fund's custodian or sub-custodian will have
custody of, and will hold in a segregated account, securities acquired by
such Fund under a repurchase agreement. Repurchase agreements are considered
by the staff of the Securities and Exchange Commission to be loans by the
Fund entering into them. In an attempt to reduce the risk of incurring a
loss on a repurchase agreement, the Funds will enter into repurchase
agreements only with domestic banks with total assets in excess of $1 billion
dollars, or primary government securities dealers reporting to the Federal
Reserve Bank of New York, with respect to securities of the type in which the
Fund may invest or government securities, and will require that additional
securities be deposited with it if the value of the securities purchased
should decrease below resale price.
The following applies only to the Money Fund.
Bank Obligations. Domestic commercial banks organized under Federal law
are supervised and examined by the Comptroller of the Currency and are required
to be members of the Federal Reserve System and to have their deposits
insured by the Federal Deposit Insurance Corporation (the "FDIC"). Domestic
banks organized under state law are supervised and examined by state banking
authorities but are members of the Federal Reserve System only if they elect
to join. In addition, state banks whose certificates of deposit ("CDs") may
be purchased by the Fund are insured by the FDIC (although such insurance may
not be of material benefit to the Fund, depending upon the principal amount
of the CDs of each bank held by the Fund) and are subject to Federal
examination and to a substantial body of Federal law and regulation. As a
result of Federal or state laws and regulations, domestic banks, among other
things, generally are required to maintain specified levels of reserves,
limited in the amounts which they can loan to a single borrower and subject
to other regulations designed to promote financial soundness. However, not
all of such laws and regulations apply to the foreign branches of domestic
banks.
Obligations of foreign subsidiaries or foreign branches of domestic banks,
and domestic and foreign branches of foreign banks, such as CDs and time
deposits ("TDs"), may be general obligations of the parent banks in addition
to the issuing branch, or may be limited by the terms of specific obligations
and governmental regulation. Such obligations are subject to different risks
than are those of domestic banks. These risks include foreign economic and
political developments, foreign governmental restrictions that may adversely
affect payment of principal and interest on the obligations, foreign exchange
controls and foreign withholding and other taxes on interest income. These
foreign branches and subsidiaries are not necessarily subject to the same or
similar regulatory requirements that apply to domestic banks, such as
mandatory reserve requirements, loan limitations, and accounting, auditing
and financial recordkeeping requirements. In addition, less information may
be publicly available about a foreign branch of a domestic bank or about a
foreign bank than about a domestic bank.
Obligations of United States branches of foreign banks may be general
obligations of the parent bank in addition to the issuing branch, or may be
limited by the terms of a specific obligation and by Federal or state
regulation as well as governmental action in the country in which the foreign
bank has its head office. A domestic branch of a foreign bank with assets in
excess of $1 billion may be subject to reserve requirements imposed by the
Federal Reserve System or by the state in which the branch is located if the
branch is licensed in that state.
In addition, Federal branches licensed by the Comptroller of the Currency
and branches licensed by certain states ("State Branches") may be required
to: (1) pledge to the regulator, by depositing assets with a designated bank
within the state, a certain percentage of their assets as fixed from time to
time by the appropriate regulatory authority; and (2) maintain assets within
the state in an amount equal to a specified percentage of the aggregate
amount of liabilities of the foreign bank payable at or through all of its
agencies or branches within the state. The deposits of Federal and State
Branches generally must be insured by the FDIC if such branches take deposits
of less than $100,000.
In view of the foregoing factors associated with the purchase of CDs and
TDs issued by foreign branches of domestic banks, or by foreign branches or
domestic branches of foreign banks, the Manager carefully evaluates such
investments on a case-by-case basis.
Foreign Government Obligations; Securities of Supranational Entities. The
Fund may invest in obligations issued or guaranteed by one or more foreign
governments or any of their political subdivisions, agencies or
instrumentalities that are determined by the Manager to be of comparable
quality to the other obligations in which the Fund may invest. Such
securities also include debt obligations of supranational entities.
Supranational entities include international organizations designated or
supported by governmental entities to promote economic reconstruction or
development and international banking institutions and related government
agencies. Examples include the International Bank for Reconstruction and
Development (the World Bank), the European Coal and Steel Community, the
Asian Development Bank and the InterAmerican Development Bank.
Illiquid Securities. Where a substantial market of qualified institutional
buyers develops for certain restricted securities purchased by the Fund
pursuant to Rule 144A under the Securities Act of 1933, as amended, the Fund
intends to treat such securities as liquid securities in accordance with
procedures approved by the Fund's Board. Because it is not possible to
predict with assurance how the market for restricted securities pursuant to
Rule 144A will develop, the Fund's Board has directed the Manager to monitor
carefully the Fund's investments in such securities with particular regard to
trading activity, availability of reliable price information and other
relevant information. To the extent that, for a period of time, qualified
institutional buyers cease purchasing such restricted securities pursuant to
Rule 144A, the Fund's investment in such securities may have the effect of
increasing the level of illiquidity in its portfolio during such period.
Management Policies
The following applies only to the Money Fund.
Reverse Repurchase Agreements. The Fund may enter into reverse repurchase
agreements. The Fund will maintain in a segregated custodial account
permissible liquid assets equal to the aggregate amount of its reverse
repurchase obligations, plus accrued interest, in certain cases, in
accordance with releases promulgated by the Securities and Exchange
Commission. The Securities and Exchange Commission views reverse repurchase
agreement transactions as collateralized borrowings by the Fund, and,
pursuant to the Investment Company Act of 1940, as amended (the "1940 Act"),
the Fund must maintain continuous asset coverage (that is, total assets
including borrowings, less liabilities exclusive of borrowings) of 300% of
the amount borrowed. If the 300% asset coverage should decline as a result
of market fluctuations or other reasons, the Fund may be required to sell
some of its portfolio holdings within three days to reduce the debt and
restore 300% asset coverage, even though it may be disadvantageous from an
investment standpoint to sell securities at that time.
Forward Commitments. Securities purchased on a forward commitment or when-
issued basis are subject to changes in value (generally changing in the same
way, i.e., appreciating when interest rates decline and depreciating when
interest rates rise) based upon the public's perception of the
creditworthiness of the issuer and changes, real or anticipated, in the level
of interest rates. Securities purchased on a forward commitment or when-
issued basis may expose the Fund to risks because they may experience such
fluctuations prior to their actual delivery. Purchasing securities on a when-
issued basis can involve the additional risk that the yield available in the
market when the delivery takes place actually may be higher than that
obtained in the transaction itself. Purchasing securities on a forward
commitment or when-issued basis when the Fund is fully or almost fully
invested may result in greater potential fluctuation in the value of the
Fund's net assets and its net asset value per share.
Lending Portfolio Securities. In connection with its securities lending
transactions, the Fund may return to the borrower and/or a third party which
is unaffiliated with the Fund, and which is acting as a "placing broker," a
part of the interest earned from the investment of collateral received for
securities loaned.
The Securities and Exchange Commission currently requires that the
following conditions must be met whenever portfolio securities are loaned by the
Fund: (1) the Fund must receive at least 100% cash collateral from the borrower;
(2) the borrower must increase such collateral whenever the market value of
the securities rises above the level of such collateral; (3) the Fund must be
able to terminate the loan at any time; (4) the Fund must receive reasonable
interest on the loan, as well as any interest or other distributions payable
on the loaned securities, and any increase in market value; and (5) the Fund
may pay only reasonable custodian fees in connection with the loan.
Investment Restrictions
Money Fund. The Fund has adopted investment restrictions numbered 1
through 7 as fundamental policies, which cannot be changed without approval by
the holders of a majority (as defined in the 1940 Act) of the Fund's outstanding
voting shares. Investment restrictions numbered 8 through 14 are not
fundamental policies and may be changed by vote of a majority of the Fund's
Board members at any time. The Fund may not:
1. Borrow money, except to the extent the Fund maintains continuous
asset coverage (that is, total borrowings, less liabilities exclusive of
borrowings) of 300% of the amount borrowed.
2. Purchase or sell real estate, real estate investment trust
securities, commodities or commodity contracts, or oil and gas interests, except
that the
Fund may purchase or sell futures contracts, including those relating to
indices, and options on futures contracts and indices.
3. Act as underwriter of securities of other issuers, except to the
extent the Fund may be deemed an underwriter under the Securities Act of 1933,
as amended, by virtue of disposing of portfolio securities.
4. Make loans to others, except through the purchase of debt obligations
or the entry into repurchase agreements. However, the Fund may lend its
portfolio securities in an amount not to exceed 33-1/3% of the value of its
total assets. Any loans of portfolio securities will be made according to
guidelines established by the Securities and Exchange Commission and the
Fund's Board.
5. Invest more than 5% of its assets in the obligations of any single
issuer, except that up to 25% of the value of the Fund's total assets may be
invested without regard to any such limitation.
6. Invest less than 25% of its total assets in securities issued by
banks or invest more than 25% of its assets in the securities of issuers in any
other industry, provided that there shall be no limitation on the purchase of
obligations issued or guaranteed by the U.S. Government, its agencies or
instrumentalities. Notwithstanding the foregoing, for temporary defensive
purposes the Fund may invest less than 25% of its assets in bank obligations.
7. Issue any senior security (as such term is defined in Section 18(f)
of the 1940 Act), except to the extent that the activities permitted in
Investment Restriction Nos. 1, 2 and 10 may be deemed to give rise to a
senior security.
8. Purchase common stocks, preferred stocks, warrants or other equity
securities, or purchase corporate bonds or debentures, state bonds, municipal
bonds or industrial revenue bonds (except through the purchase of debt
obligations referred to above and in the Prospectus).
9. Invest in securities of other investment companies, except as they
may be acquired as part of a merger, consolidation or acquisition of assets.
10. Pledge, hypothecate, mortgage or otherwise encumber its assets, except
to the extent necessary to secure permitted borrowings and to the extent
related to the deposit of assets in escrow in connection with portfolio
transactions, such as in connection with writing covered options and the
purchase of securities on a when-issued or forward commitment basis and
collateral and initial or variation margin arrangements with respect to
options, futures contracts, including those relating to indices, and options
on futures contracts or indices.
11. Sell securities short or purchase securities on margin.
12. Write or purchase put or call options or combinations thereof.
13. Enter into repurchase agreements providing for settlement in more
than seven days after notice or purchase securities which are illiquid, if, in
the aggregate, more than 10% of the value of its net assets would be so
invested.
14. Invest in companies for the purpose of exercising control.
* * *
Government Money Fund. The Fund has adopted investment restrictions
numbered 1 through 6 as fundamental policies, which cannot be changed without
approval by the holders of a majority (as defined in the 1940 Act) of the
Fund's outstanding voting shares. Investment restrictions numbered 7 through
12 are not fundamental policies and may be changed by vote of a majority of
the Fund's Board members at any time. The Fund may not:
1. Borrow money, except for temporary or emergency (not leveraging)
purposes in an amount up to 15% of the value of the Fund's total assets
(including the amount borrowed) based on the lesser of cost or market, less
liabilities (not including the amount borrowed) at the time the borrowing is
made. While borrowings exceed 5% of the value of the Fund's total assets,
the Fund will not make any additional investments.
2. Purchase or sell real estate, real estate investment trust securities,
commodities or commodity contracts, or oil and gas interests, except that the
Fund may purchase or sell futures contracts, including those relating to
indices, and options on futures contracts or indices.
3. Act as underwriter of securities of other issuers.
4. Make loans to others, except through the purchase of debt obligations
or the entry into repurchase agreements.
5. Invest more than 25% of its assets in the securities of issuers in any
single industry, provided that there shall be no limitation on the purchase
of obligations issued or guaranteed by the U.S. Government, its agencies or
instrumentalities.
6. Issue any senior security (as such term is defined in Section 18(f) of
the 1940 Act), except to the extent the activities permitted in Investment
Restriction Nos. 1, 2 and 9 may be deemed to give rise to a senior security.
7. Purchase common stocks, preferred stocks, warrants or other equity
securities, or purchase corporate bonds or debentures, state bonds, municipal
bonds or industrial revenue bonds.
8. Invest in securities of other investment companies, except as they may
be acquired as part of a merger, consolidation or acquisition of assets.
9. Pledge, hypothecate, mortgage or otherwise encumber its assets, except
to the extent necessary to secure permitted borrowings.
10. Sell securities short or purchase securities on margin.
11. Write or purchase put or call options or combinations thereof.
12. Enter into repurchase agreements providing for settlement in more than
seven days after notice or purchase securities which are illiquid, if, in the
aggregate, more than 10% of its net assets would be so invested.
* * *
With respect to each Fund, if a percentage restriction is adhered to at the
time of investment, a later increase or decrease in percentage resulting from
a change in values or assets will not constitute a violation of such
restriction.
Each Fund may make commitments more restrictive than the respective
restrictions listed above so as to permit the sale of such Fund's shares in
certain states. Should a Fund determine that a commitment is no longer in
the best interests of the Fund and its shareholders, such Fund reserves the
right to revoke the commitment by terminating the sale of its shares in the
state involved.
MANAGEMENT OF THE FUNDS
Board members and officers of each Fund, together with information as to
their principal business occupations during at least the last five years, are
shown below.
Board Members of each Fund
JOSEPH S. DiMARTINO, Chairman of the Board. Since January 1995, Chairman of
the Board of various funds in the Dreyfus Family of Funds. He is also
Chairman of the Board of Noel Group, Inc., a venture capital company;
and a director of the Muscular Dystrophy Association, HealthPlan
Services Corporation, Belding Heminway Company, Inc., a manufacturer and
marketer of industrial threads and buttons, Curtis Industries, Inc, a
national distributor of security products, chemicals, and automotive and
other hardware, and Staffing Resources, Inc. For more than five years
prior to January 1995, he was President, a director and, until August
1994, Chief Operating Officer of the Manager and Executive Vice
President and a director of Dreyfus Service Corporation, a wholly-owned
subsidiary of the Manager and, until August 24, 1994, the Fund's
distributor. From August 1994 until December 31, 1994, he was a
director of Mellon Bank Corporation. He is 53 years old and his address
is 200 Park Avenue, New York, New York 10166.
DAVID W. BURKE, Board Member. Chairman of the Broadcasting Board of
Governors, an independent board within the United States Information
Agency, since August 1995. From August 1994 through December 31, 1994,
Mr. Burke was a Consultant to the Manager and, from October 1990 to
August 1994, he was Vice President and Chief Administrative Officer of
the Manager. From 1977 to 1990, Mr. Burke was involved in the
management of national television news, as Vice President and Executive
Vice President of ABC News, and subsequently as President of CBS News.
He is 61 years old and his address is Box 654, Eastham, Massachusetts
02642.
DIANE DUNST, Board Member. Since January 1992, President of Diane Dunst
Promotion, Inc., a full service promotion agency. From January 1989 to
January 1992, Director of Promotion Services, Lear's Magazine. From
1985 to January 1989, she was Sales Promotion Manager of ELLE Magazine.
She is 57 years old and her address is 1172 Park Avenue, New York, New
York 10128.
ROSALIND GERSTEN JACOBS, Board Member. Director of Merchandise and Marketing
for Corporate Property Investors, a real estate investment company.
From 1974 to 1976, she was owner and manager of a merchandise and
marketing consulting firm. Prior to 1974, she was a Vice President of
Macy's, New York. She is 72 years old and her address is c/o Corporate
Property Investors, 305 East 47th Street, New York, New York 10017.
JAY I. MELTZER, Board Member. Physician engaged in private practice
specializing in internal medicine. He is also a member of the Advisory
Board of the Section of Society and Medicine, College of Physicians and
Surgeons, Columbia University and a Clinical Professor of Medicine,
Department of Medicine, Columbia University College of Physicians and
Surgeons. He is 68 years old and his address is 903 Park Avenue, New
York, New York 10021.
DANIEL ROSE, Board Member. President and Chief Executive Officer of Rose
Associates, Inc., a New York based real estate development and
management firm. In July 1994, Mr. Rose received a Presidential
appointment to serve as a Director of the Baltic-American Enterprise
Fund, which will make equity investments and loans, and provide
technical business assistance to new business concerns in the Baltic
States. He also is Chairman of the Housing Committee of The Real Estate
Board of New York, Inc., and a trustee of Corporate Property Investors,
a real estate investment company. He is 67 years old and his address is
c/o Rose Associates, Inc., 200 Madison Avenue, New York, New York 10016.
WARREN B. RUDMAN, Board Member. Since January 1993, Partner in the law firm
Paul, Weiss, Rifkind, Wharton & Garrison and since May 1995, a director
of Collins & Aikman Corporation. Also, since January 1993, Mr. Rudman
has served as a director of Chubb Corporation and of the Raytheon
Company, and as Vice Chairman of the President's Foreign Intelligence
Advisory Board. From January 1981 to January 1993, Mr. Rudman served as
a United States Senator from the State of New Hampshire. From January
1993 to December 1994, Mr. Rudman served as Chairman of the Federal
Reserve Bank of Boston. Since 1988, Mr. Rudman has served as a trustee
of Boston College and since 1986 as a member of the Senior Advisory
Board of the Institute of Politics of the Kennedy School of Government
at Harvard University. He is 67 years old and his address is c/o Paul,
Weiss, Rifkind, Wharton & Garrison, 1615 L Street, N.W., Suite 1300,
Washington D.C. 20036.
SANDER VANOCUR, Board Member. From May 1995 to June 1996, Mr. Vanocur was a
Professional in Residence at the Freedom Forum in Arlington, VA and from
January 1994 to May 1995, he served as a Visiting Professional Scholar
at the Freedom Forum First Amendment Center at Vanderbilt University.
Since January 1992, Mr. Vanocur has been President of Old Owl
Communications, a full-service communications firm. From November 1989
to November 1995, he was a Director of the Damon Runyon-Walter Winchell
Cancer Research Fund. From June 1986 to December 1991, he was a Senior
Correspondent of ABC News and, from October 1986 to December 1991, he
was Anchor of the ABC News program "Business World," a weekly business
program on the ABC television network. Mr. Vanocur joined ABC News in
1977. He is 69 years old and his address is 2928 P Street, N.W.,
Washington, D.C. 20007.
For so long as each Fund's plan described in the section captioned
"Shareholder Services Plan" remains in effect, the Board members of each Fund
who are not "interested persons" of such Fund, as defined in the 1940 Act,
will be selected and nominated by the Board members who are not "interested
persons" of such Fund.
Ordinarily, meetings of shareholders for the purpose of electing Board
members will not be held unless and until such time as less than a majority
of the Board members holding office have been elected by shareholders, at
which time the Board members then in office will call a shareholders' meeting
for the election of Board members. Under the 1940 Act, shareholders of record
of not less than two-thirds of the outstanding shares of the Fund may remove
a Board member through a declaration in writing or by vote cast in person or
by proxy at a meeting called for that purpose. Board members of each Fund
are required to call a meeting of shareholders for the purpose of voting upon
the question of removal of any such Board member when requested in writing to
do so by the shareholders of record of not less than 10% of such Fund's
outstanding shares.
Each Fund typically pays its Board members an annual retainer and a per
meeting fee and reimburses them for their expenses. The Chairman of the
Board receives an additional 25% of such compensation. Emeritus Board
members are entitled to receive an annual retainer and a per meeting fee of
one-half the amount paid to them as Board members. The aggregate amount of
fees and expenses paid to Board members by each Fund for the fiscal year
ended February 28, 1997, and by all other funds in the Dreyfus Family of
Funds for which such person is a Board member (the number of which is set
forth in parenthesis next to each Board member's total compensation) for the
year ended December 31, 1996, were as follows:
Total
Compensation from
Aggregate Fund and Fund
Name of Board Compensation from Complex Paid
Member Fund* to Board Member
Joseph S. DiMartino $517,075 (94)
Money Fund $3,438
Government Money Fund $3,438
David W. Burke $232,899 (52)
Money Fund $2,750
Government Money Fund $2,750
Diane Dunst $ 38,428 (10)
Money Fund $2,750
Government Money Fund $2,750
Rosalind Gersten Jacobs $ 93,900 (20)
Money Fund $2,750
Government Money Fund $2,750
Jay I. Meltzer $ 38,428 (10)
Money Fund $2,750
Government Money Fund $2,750
Daniel Rose $ 84,593 (22)
Money Fund $2,750
Government Money Fund $2,750
Warren B. Rudman $ 71,588 (18)
Money Fund $2,750
Government Money Fund $2,750
Sander Vanocur $ 77,093 (22)
Money Fund $2,750
Government Money Fund $2,750
_______________________________
* Amount does not include reimbursed expenses for attending Board
meetings, which amounted to $633 and $754 for all Board members of the
Money Fund and Government Money Fund, respectively, as a group.
Officers of each Fund
MARIE E. CONNOLLY, President and Treasurer. President, Chief Executive
Officer and a director of the Distributor and an officer of other
investment companies advised or administered by the Manager. From
December 1991 to July 1994, she was President and Chief Compliance
Officer of Funds Distributor, Inc., the ultimate parent of which is
Boston Institutional Group, Inc. She is 39 years old.
JOHN E. PELLETIER, Vice President and Secretary. Senior Vice President and
General Counsel of the Distributor and an officer of other investment
companies advised or administered by the Manager. From February 1992 to
July 1994, he served as Counsel for The Boston Company Advisors, Inc.
He is 33 years old.
ELIZABETH A. KEELEY, Vice President and Assistant Secretary. Assistant Vice
President of the Distributor since September 1995 and an officer of
other investment companies advised or administered by the Manager. She
is 27 years old.
MARK A. KARPE, Vice President and Assistant Secretary. Senior Paralegal of
the Distributor and an officer of other investment companies advised or
administered by the Manager. Prior to August 1993, he was employed as
an Associate Examiner at the National Association of Securities Dealers,
Inc. He is 27 years old.
JOSEPH F. TOWER, III, Vice President and Assistant Treasurer. Senior Vice
President, Treasurer and Chief Financial Officer of the Distributor and
an officer of other investment companies advised or administered by the
Manager. From July 1988 to August 1994, he was employed by The Boston
Company, Inc. where he held various management positions in the
Corporate Finance and Treasury areas. He is 35 years old.
DOUGLAS C. CONROY, Vice President and Assistant Treasurer. Supervisor of
Treasury Services and Administration of Funds Distributor, Inc. and an
officer of other investment companies advised or administered by the
Manager. From April 1993 to January 1995, he was a Senior Fund
Accountant for Investors Bank & Trust Company. From December 1991 to
March 1993, he was employed as a Fund Accountant at The Boston Company,
Inc. He is 27 years old.
RICHARD W. INGRAM, Vice President and Assistant Treasurer. Senior Vice
President and Director of Client Services and Treasury Operations of
Funds Distributor, Inc. and an officer of other investment companies
advised or administered by the Manager. From March 1994 to November
1995, he was Vice President and Division Manager for First Data Investor
Services Group. From 1989 to 1994, he was Vice President, Assistant
Treasurer and Tax Director - Mutual Funds at The Boston Company, Inc.
He is 41 years old.
MARY A. NELSON, Vice President and Assistant Treasurer. Vice President and
Manager of Treasury Services and Administration of Funds Distributor,
Inc. and an officer of other investment companies advised or
administered by the Manager. From September 1989 to July 1994, she was
an Assistant Vice President and Client Manager for The Boston Company,
Inc. She is 32 years old.
MICHAEL S. PETRUCELLI, Vice President and Assistant Treasurer. Director of
Strategic Client Initiatives for Funds Distributor, Inc. and an officer
of other investment companies advised or administered by the Manager.
From December 1989 through November 1996, he was employed by GE
Investments where he held various financial, business development and
compliance positions. He also served as Treasurer of the GE Funds and
as director of GE Investment Services. He is 35 years old.
The address of each officer of the Fund is 200 Park Avenue, New York,
New York 10166.
Board members and officers, as a group, owned less than 1% of each
Fund's shares outstanding on June 2, 1997.
MANAGEMENT AGREEMENTS
The following information supplements and should be read in conjunction
with the section in the Funds' Prospectus entitled "Management of the Funds."
The Manager provides management services pursuant to separate Management
Agreements (respectively, the "Agreement") with each Fund, each of which is
dated August 24, 1994. As to each Fund, the Agreement is subject to annual
approval by (i) such Fund's Board or (ii) vote of a majority (as defined in
the 1940 Act) of such Fund's outstanding voting securities, provided that in
either event the continuance also is approved by a majority of the Board
members who are not "interested persons" (as defined in the 1940 Act) of the
Fund or the Manager, by vote cast in person at a meeting called for the
purpose of voting on such approval. Each Fund's Agreement was approved by
such Fund's shareholders on August 3, 1994, and was last approved by the
Fund's Board, including a majority of such Fund's Board members who are not
"interested persons" (as defined in the 1940 Act) of the Fund or the Manager,
at a meeting held on February 5, 1997. As to each Fund, the Agreement is
terminable without penalty, on 60 days' notice, by such Fund's Board or by
vote of the holders of a majority of such Fund's shares, or, on not less than
90 days' notice, by the Manager. Each Agreement will terminate
automatically, as to the relevant Fund, in the event of its assignment (as
defined in the 1940 Act).
The following persons are officers and/or directors of the Manager: W.
Keith Smith, Chairman of the Board; Christopher M. Condron, President, Chief
Executive Officer, Chief Operating Officer and a director; Stephen E. Canter,
Vice Chairman, Chief Investment Officer and a director; Lawrence S. Kash,
Vice Chairman-Distribution and a director; William T. Sandalls, Jr., Senior
Vice President and Chief Financial Officer; Mark N. Jacobs, Vice President,
General Counsel and Secretary; Patrice M. Kozlowski, Vice President-Corporate
Communications; Mary Beth Leibig, Vice President-Human Resources; Jeffrey N.
Nachman, Vice President-Mutual Fund Accounting; Andrew S. Wasser, Vice
President-Information Systems; William V. Healey, Assistant Secretary; and
Mandell L. Berman, Burton C. Borgelt and Frank V. Cahouet, directors.
The Manager manages each Fund's portfolio of investments in accordance
with the stated policies of such Fund, subject to the approval of the Fund's
Board. The Manager is responsible for investment decisions, and provides
each Fund with portfolio managers who are authorized by its Board to execute
purchases and sales of securities. The portfolio managers of each Fund are
Patricia A. Larkin, Bernard Kiernan and Thomas Riordan. The Manager also
maintains a research department with a professional staff of portfolio
managers and securities analysts who provide research services for each Fund
as well as for other funds advised by the Manager. All purchases and sales
are reported for the respective Board's review at the meeting subsequent to
such transactions.
The Manager maintains office facilities on behalf of each Fund and
furnishes statistical and research data, clerical help, accounting, data
processing, bookkeeping and internal auditing and certain other required
services to each Fund. The Manager also may make such advertising and
promotional expenditures, using its own resources, as it from time to time
deems appropriate.
All expenses incurred in the operation of a Fund are borne by such Fund,
except to the extent specifically assumed by the Manager. The expenses borne
by each Fund include: organizational costs, taxes, interest, brokerage fees
and commissions, if any, fees of Board members who are not officers,
directors, employees or holders of 5% or more of the outstanding voting
securities of the Manager, Securities and Exchange Commission fees, state
Blue Sky qualification fees, advisory fees, charges of custodians, transfer
and dividend disbursing agents' fees, certain insurance premiums, industry
association fees, outside auditing and legal expenses, costs of maintaining
the Fund's existence, costs of independent pricing services, costs
attributable to investor services (including, without limitation, telephone
and personnel expenses), costs of shareholders' reports and corporate
meetings, costs of preparing and printing prospectuses and statements of
additional information for regulatory purposes and for distribution to
existing shareholders, and any extraordinary expenses.
As compensation for the Manager's services, each Fund has agreed to pay
the Manager a monthly management fee at the annual rate of .50 of 1% of the
value of such Fund's average daily net assets. All fees and expenses are
accrued daily and deducted before the declaration of dividends to
shareholders. For the fiscal years ended February 28(9), 1995, 1996 and 1997
the management fees payable by the Money Fund and the Government Money Fund
and the amounts waived by The Manager were as follows:
<TABLE>
<CAPTION>
Management Reduction
Name of Fund Fee Payable in Fee Net Fee Paid
1995 1996 1997 1995 1996 1997 1995 1996 1997
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Dreyfus BASIC Money $8,169,685 $9,747,085 $9,681,910 $7,482,518 $5,960,272 $4,495,473 $687,167 $3,786,813 $5,186,437
Market Fund, Inc.
Dreyfus BASIC U.S. $2,035,026 $6,266,897 $7,033,547 $1,789,390 $4,484,591 $2,809,559 $245,636 $1,782,306 $4,223,988
Government Money
Market Fund
</TABLE>
The Manager has agreed that if in any fiscal year a Fund's aggregate
expenses, exclusive of taxes, brokerage, interest on borrowings and (with the
prior written consent of the necessary state securities commissions)
extraordinary expenses, but including the management fee, exceed the expense
limitation of any state having jurisdiction over the Fund, such Fund may
deduct from the payment to be made to the Manager under its Agreement, or the
Manager will bear, such excess expense to the extent required by state law.
Such deduction or payment, if any, will be estimated daily, and reconciled
and effected or paid, as the case may be, on a monthly basis.
The aggregate of the fees payable to the Manager is not subject to
reduction as the value of the Funds' respective net assets increases.
PURCHASE OF SHARES
The following information supplements and should be read in conjunction
with the section in the Funds' Prospectus entitled "How to Buy Shares."
The Distributor. The Distributor serves as each Fund's distributor on a
best efforts basis pursuant to an agreement which is renewable annually. The
Distributor also acts as distributor for the other funds in the Dreyfus
Family of Funds and for certain other investment companies.
Using Federal Funds. Dreyfus Transfer, Inc., each Fund's transfer and
dividend disbursing agent (the "Transfer Agent"), or the investor's Fund may
attempt to notify the investor upon receipt of checks drawn on banks that are
not members of the Federal Reserve System as to the possible delay in
conversion into Federal Funds and may attempt to arrange for a better means
of transmitting the money. If the investor is a customer of a securities
dealer, bank or other financial institution and his order to purchase a
Fund's shares is paid for other than in Federal Funds, the securities dealer,
bank or other financial institution acting on behalf of its customer, will
complete the conversion into, or itself advance, Federal Funds generally on
the business day following receipt of the customer order. The order is
effective only when so converted and received by the Transfer Agent. An
order for the purchase of a Fund's shares placed by an investor with
sufficient Federal Funds or cash balance in his brokerage account with a
securities dealer, bank or other financial institution will become effective
on the day that the order, including Federal Funds, is received by the
Transfer Agent.
Transactions Through Securities Dealers. Each Fund's shares may be
purchased and redeemed through securities dealers which may charge a
transaction fee for such services. Some dealers will place the respective
Fund's shares in an account with their firm. Dealers also may require that
the customer not take physical delivery of stock certificates; the customer
not request redemption checks to be issued in the customer's name; fractional
shares not be purchased; monthly income distributions be taken in cash; or
other conditions.
No sales charge is imposed by either the Fund or the Distributor,
although investment dealers, banks and other institutions may make reasonable
charges to investors for their services. The services provided and the
applicable fees are established by each dealer or other institution acting
independently of the respective Fund. Each Fund has been given to understand
that these fees may be charged for customer services including, but not
limited to, same-day investment of client funds; same-day access to client
funds; advice to customers about the status of their accounts, yield
currently being paid or income earned to date; provision of periodic account
statements showing security and money market positions; other services
available from the dealer, bank or other institution; and assistance with
inquiries related to their investment. Any such fees will be deducted
monthly from the investor's account, which on smaller accounts could
constitute a substantial portion of distributions. Small, inactive, long-
term accounts involving monthly service charges may not be in the best
interest of investors. Investors should be aware that they may purchase
shares of either Fund directly from such Fund without imposition of any
maintenance or service charges, other than those already described herein.
Dreyfus TeleTransfer Privilege. Dreyfus TeleTransfer purchase orders
may be made at any time. Purchase orders received by 4:00 p.m., New York
time, on any business day that the Transfer Agent and the New York Stock
Exchange are open for business will be credited to the shareholder's Fund
account on the next bank business day following such purchase order.
Purchase orders made after 4:00 p.m., New York time, on any business day the
Transfer Agent and the New York Stock Exchange are open for business, or
orders made on Saturday, Sunday or any Fund holiday (e.g., when the New York
Stock Exchange is not open for business), will be credited to the
shareholder's Fund account on the second bank business day following such
purchase order. To qualify to use the Dreyfus TeleTransfer Privilege, the
initial payment for purchase of Fund shares must be drawn on, and redemption
proceeds paid to, the same bank and account as are designated on the Account
Application or Shareholder Services Form on file. If the proceeds of a
particular redemption are to be wired to an account at any other bank, the
request must be in writing and signature-guaranteed. See "Redemption of
Shares--Dreyfus TeleTransfer Privilege."
Reopening an Account. An investor may reopen an account with a minimum
investment of $10,000 without filing a new Account Application during the
calendar year the account is closed or during the following calendar year,
provided the information on the old Account Application is still applicable.
SHAREHOLDER SERVICES PLAN
The following information supplements and should be read in conjunction
with the section in the Funds' Prospectus entitled "Shareholder Services
Plan."
Each Fund has adopted a Shareholder Services Plan (the "Plan") pursuant
to which the Fund reimburses Dreyfus Service Corporation for certain
allocated expenses of providing personal services and/or maintaining
shareholder accounts. The services provided may include personal services
relating to shareholder accounts, such as answering shareholder inquiries
regarding the Fund and providing reports and other information, and services
related to the maintenance of shareholder accounts.
A quarterly report of the amounts expended under the Plan, and the
purposes for which such expenditures were incurred, must be made to the
Fund's Board for its review. In addition, the Plan provides that material
amendments of the Plan must be approved by the Fund's Board members who are
not "interested persons" (as defined in the 1940 Act) of the Fund and have no
direct or indirect financial interest in the operation of the Plan by vote
cast in person at a meeting called for the purpose of considering such
amendments. The Plan is subject to annual approval by such vote of the Board
members cast in person at a meeting called for the purpose of voting on the
Plan. The Plan was last so approved by each Fund's Board on May 20, 1997.
The Plan is terminable at any time by vote of a majority of the Board members
who are not "interested persons" and have no direct or indirect financial
interest in the operation of the Plan.
For the fiscal year ended February 28, 1997, $2,686,551 was charged to
the Money Fund and $1,420,118 was charged to the Government Money Fund under
the Plan.
REDEMPTION OF SHARES
The following information supplements and should be read in conjunction
with the section in the Funds' Prospectus entitled "How to Redeem Shares."
Check Redemption Privilege. An investor may indicate on the Account
Application, Shareholder Services Form or by later written request that the
investor's Fund provide Redemption Checks ("Checks"), drawn on the investor's
Fund account. Checks will be sent only to the registered owner(s) of the
account and only to the address of record. The Account Application,
Shareholder Services Form or later written request must be manually signed by
the registered owner(s). Checks may be made payable to the order of any
person in an amount of $1,000 or more. When a Check is presented to the
Transfer Agent for payment, the Transfer Agent, as the investor's agent, will
cause the Fund to redeem a sufficient number of shares in the investor's
account to cover the amount of the Check and the $2.00 charge. The fee will
be waived if the closing balance in the shareholder's account on the business
day immediately preceding the effective date of the transaction is $50,000 or
more. Dividends are earned until the Check clears. After clearance, a copy
of the Check will be returned to the investor. Investors generally will be
subject to the same rules and regulations that apply to checking accounts,
although election of this Privilege creates only a shareholder-transfer agent
relationship with the Transfer Agent.
If the amount of the Check, plus any applicable charges, is greater than
the value of the shares in an investor's account, the Check will be returned
marked insufficient funds. Checks should not be used to close an account.
Wire Redemption Privilege. By using this Privilege, the investor
authorizes the Transfer Agent to act on wire or telephone redemption
instructions from any person representing himself or herself to be the
investor, and reasonably believed by the Transfer Agent to be genuine. An
investor will be charged a $5.00 fee for each wire redemption from either
Fund, which will be deducted from the investor's account and paid to the
Transfer Agent. The fee will be waived if the closing balance in the
shareholder's account on the business day immediately preceding the effective
date of the transaction is $50,000 or more. Ordinarily, each Fund will
initiate payment for shares redeemed pursuant to this Privilege on the next
business day after receipt by the Transfer Agent of a redemption request in
proper form. Redemption proceeds ($5,000 minimum) will be transferred by
Federal Reserve wire only to the commercial bank account specified by the
investor on the Account Application or Shareholder Services Form, or to a
correspondent bank if the investor's bank is not a member of the Federal
Reserve System. Fees ordinarily are imposed by such bank and borne by the
investor. Immediate notification by the correspondent bank to the investor's
bank is necessary to avoid a delay in crediting the funds to the investor's
bank account.
Investors with access to telegraphic equipment may wire redemption
requests to the Transfer Agent by employing the following transmittal code
which may be used for domestic or overseas transmissions:
Transfer Agent's
Transmittal Code Answer Back Sign
144295 144295 TSSG PREP
Investors who do not have direct access to telegraphic equipment may
have the wire transmitted by contacting a TRT Cables operator at 1-800-654-
7171, toll free. Investors should advise the operator that the above
transmittal code must be used and should also inform the operator of the
Transfer Agent's answer back sign.
To change the commercial bank or account designated to receive wire
redemption proceeds, a written request must be sent to the Transfer Agent.
This request must be signed by each shareholder, with each signature
guaranteed as described below under "Share Certificates; Signatures."
Dreyfus TeleTransfer Privilege. Investors should be aware that if they
have also selected the Dreyfus TeleTransfer Privilege, any request for a wire
redemption will be effected as a Dreyfus TeleTransfer transaction through the
Automated Clearing House ("ACH") system unless more prompt transmittal
specifically is requested. Redemption proceeds will be on deposit in the
investor's account at an ACH member bank ordinarily two business days after
receipt of the redemption request. Investors will be charged a $5.00 fee for
each redemption made pursuant to this Privilege, which will be deducted from
the investor's account and paid to the Transfer Agent. The fee will be
waived if the closing balance in the shareholder's account on the business
day immediately preceding the effective date of the transaction is $50,000 or
more. See "Purchase of Shares--Dreyfus TeleTransfer Privilege."
Share Certificates; Signatures. Any certificates representing Fund
shares to be redeemed must be submitted with the redemption request. Written
redemption requests must be signed by each investor, including each owner of
a joint account, and each signature must be guaranteed. Signatures on
endorsed certificates submitted for redemption also must be guaranteed. The
Transfer Agent has adopted standards and procedures pursuant to which signature-
guarantees in proper form generally will be accepted from domestic
banks, brokers, dealers, credit unions, national securities exchanges,
registered securities associations, clearing agencies and savings
associations, as well as from participants in the New York Stock Exchange
Medallion Signature Program, the Securities Transfer Agents Medallion Program
("STAMP") and the Stock Exchanges Medallion Program. Guarantees must be
signed by an authorized signatory of the guarantor and "Signature-Guaranteed"
must appear with the signature. The Transfer Agent may request additional
documentation from corporations, executors, administrators, trustees or
guardians. For more information with respect to signature-guarantees, please
call one of the telephone numbers listed on the cover.
Redemption Commitment. Each Fund has committed itself to pay in cash
all redemption requests by any shareholder of record, limited in amount
during any 90-day period to the lesser of $250,000 or 1% of the value of such
Fund's net assets at the beginning of such period. Such commitment is
irrevocable without the prior approval of the Securities and Exchange
Commission. In the case of requests for redemption in excess of such amount,
each Fund's Board reserves the right to make payments in whole or in part in
securities (which may include non-marketable securities) or other assets in
case of an emergency or any time a cash distribution would impair the
liquidity of such Fund to the detriment of its existing shareholders. In
such event, the securities would be valued in the same manner as such Fund's
portfolio is valued. If the recipient sold such securities, brokerage
charges might be incurred.
Suspension of Redemptions. The right of redemption with respect to a
Fund may be suspended or the date of payment postponed (a) during any period
when the New York Stock Exchange is closed (other than customary weekend and
holiday closings), (b) when trading in the market such Fund ordinarily
utilizes is restricted, or when an emergency exists as determined by the
Securities and Exchange Commission so that disposal of such Fund's
investments or determination of its net asset value is not reasonably
practicable, or (c) for such other periods as the Securities and Exchange
Commission by order may permit to protect such Fund's shareholders.
SHAREHOLDER SERVICES
The following information supplements and should be read in conjunction
with the section in the Funds' Prospectus entitled "Shareholder Services."
Fund Exchanges. Shares of other funds purchased by exchange will be
purchased on the basis of relative net asset value per share as follows:
A. Exchanges for shares of funds that are offered without a sales
load will be made without a sales load.
B. Shares of funds purchased without a sales load may be
exchanged for shares of other funds sold with a sales load, and the
applicable sales load will be deducted.
C. Shares of funds purchased with a sales load may be exchanged
without a sales load for shares of other funds sold without a sales
load.
D. Shares of funds purchased with a sales load, shares of funds
acquired by a previous exchange from shares purchased with a sales
load and additional shares acquired through reinvestment of
dividends or distributions of any such funds (collectively referred
to herein as "Purchased Shares") may be exchanged for shares of
other funds sold with a sales load (referred to herein as "Offered
Shares"), provided that, if the sales load applicable to the
Offered Shares exceeds the maximum sales load that could have been
imposed in connection with the Purchased Shares (at the time the
Purchased Shares were acquired), without giving effect to any
reduced loads, the difference will be deducted.
To accomplish an exchange under item D above, shareholders must notify
the Transfer Agent of their prior ownership of fund shares and their account
number.
To request an exchange, an investor must give exchange instructions to
the Transfer Agent in writing, by wire or by telephone. The ability to issue
exchange instructions by telephone is given to all Fund shareholders
automatically, unless the investor checks the applicable "No" box on the
Account Application, indicating that the investor specifically refuses this
Privilege. By using the Telephone Exchange Privilege, the investor
authorizes the Transfer Agent to act on telephonic instructions from any
person representing himself or herself to be the investor, and reasonably
believed by the Transfer Agent to be genuine. Telephone exchanges may be
subject to limitations as to the amount involved or the number of telephone
exchanges permitted. Shares issued in certificate form are not eligible for
telephone exchange.
To establish a personal retirement plan by exchange, shares of the fund
being exchanged must have a value of at least the minimum initial investment
required for the fund into which the exchange is being made. For Dreyfus-
sponsored Keogh Plans, IRAs and IRAs set up under a Simplified Employee
Pension Plan ("SEP-IRAs") with only one participant, the minimum initial
investment is $750. To exchange shares held in corporate plans, 403(b)(7)
Plans and SEP-IRAs with more than one participant, the minimum initial
investment is $100 if the plan has at least $2,500 invested among the funds
in the Dreyfus Family of Funds. To exchange shares held in personal
retirement plans, the shares exchanged must have a current value of at least
$100.
The Fund Exchanges service is available to shareholders resident in any
state in which shares of the fund being acquired may legally be sold. Shares
may be exchanged only between accounts having identical names and other
identifying designations.
Shareholder Services Forms and prospectuses of the other funds may be
obtained by calling toll free 1-800-645-6561. Each Fund reserves the right
to reject any exchange request in whole or in part. The Fund Exchanges
service may be modified or terminated at any time upon notice to
shareholders.
Dreyfus Dividend Sweep. Dreyfus Dividend Sweep allows investors to
invest automatically their dividends or dividends and capital gain
distributions, if any, from a Fund in shares of another fund in the Dreyfus
Family of Funds of which the investor is a shareholder. Shares of other
funds purchased pursuant to this privilege will be purchased on the basis of
relative net asset value per share as follows:
A. Dividends and distributions paid by a fund may be
invested without imposition of a sales load in shares of
other funds that are offered without a sales load.
B. Dividends and distributions paid by a fund which
does not charge a sales load may be invested in shares of
other funds sold with a sales load, and the applicable
sales load will be deducted.
C. Dividends and distributions paid by a fund which
charges a sales load may be invested in shares of other
funds sold with a sales load (referred to herein as
"Offered Shares"), provided that, if the sales load
applicable to the Offered Shares exceeds the maximum
sales load charged by the fund from which dividends or
distributions are being swept, without giving effect to
any reduced loads, the difference will be deducted.
D. Dividends and distributions paid by a fund may be
invested in shares of other funds that impose a
contingent deferred sales charge ("CDSC") and the
applicable CDSC, if any, will be imposed upon redemption
of such shares.
DETERMINATION OF NET ASSET VALUE
The following information supplements and should be read in conjunction
with the section in the Funds' Prospectus entitled "How to Buy Shares."
Amortized Cost Pricing. The valuation of each Fund's portfolio
securities is based upon their amortized cost which does not take into
account unrealized capital gains or losses. This involves valuing an
instrument at its cost and thereafter assuming a constant amortization to
maturity of any discount or premium, regardless of the impact of fluctuating
interest rates on the market value of the instrument. While this method
provides certainty in valuation, it may result in periods during which value,
as determined by amortized cost, is higher or lower than the price the
respective Fund would receive if it sold the instrument.
Each Fund's Board has established, as a particular responsibility within
the overall duty of care owed to its Fund's investors, procedures reasonably
designed to stabilize such Fund's price per share as computed for purposes of
purchases and redemptions at $1.00. Such procedures include review of the
relevant Fund's portfolio holdings at such intervals as deemed appropriate,
to determine whether such Fund's net asset value calculated by using
available market quotations or market equivalents deviates from $1.00 per
share based on amortized cost. In such review, investments for which market
quotations are readily available will be valued at the most recent bid price
or yield equivalent for such securities or for securities of comparable
maturity, quality and type, as obtained from one or more of the major market
makers for the securities to be valued. Other investments and assets will be
valued at fair value as determined in good faith by the relevant Board.
The extent of any deviation between a Fund's net asset value based upon
available market quotations or market equivalents and $1.00 per share based
on amortized cost will be examined by its Board. If such deviation exceeds
1/2 of 1%, the Board will consider what actions, if any, will be initiated.
In the event the Board determines that a deviation exists which may result in
material dilution or other unfair results to investors or existing
shareholders, it has agreed to take such corrective action as it regards as
necessary and appropriate, including: selling portfolio instruments prior to
maturity to realize capital gains or losses or to shorten average portfolio
maturity; withholding dividends or paying distributions from capital or
capital gains; redeeming shares in kind; or establishing a net asset value
per share by using available market quotations or market equivalents.
New York Stock Exchange Closings. The holidays (as observed) on which
the New York Stock Exchange is closed currently are: New Year's Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving and Christmas.
PORTFOLIO TRANSACTIONS
Portfolio securities ordinarily are purchased directly from the issuer
or an underwriter or a market maker for the securities. Ordinarily, no
brokerage commissions are paid by a Fund for such purchases. Purchases from
underwriters of portfolio securities include a concession paid by the issuer
to the underwriter and the purchase price paid to market makers for
securities may include the spread between the bid and asked price. Neither
Fund has paid brokerage commissions to date.
Transactions are allocated to various dealers by the respective Fund's
portfolio managers in their best judgment. The primary consideration is
prompt and effective execution of orders at the most favorable price.
Subject to that primary consideration, dealers may be selected for research,
statistical or other services to enable the Manager to supplement its own
research and analysis with the views and information of other securities
firms.
Research services furnished by brokers through which a Fund effects
securities transactions may be used by the Manager in advising other funds it
advises and, conversely, research services furnished to the Manager by
brokers in connection with other funds the Manager advises may be used by the
Manager in advising such Fund. Although it is not possible to place a dollar
value on these services, it is the opinion of the Manager that the receipt
and study of such services should not reduce the overall expenses of its
research department.
DIVIDENDS, DISTRIBUTIONS AND TAXES
The following information supplements and should be read in conjunction
with the section in the Funds' Prospectus entitled "Dividends, Distributions
and Taxes."
Ordinarily, gains and losses from portfolio transactions will be treated
as capital gain or loss. However, all or a portion of any gain realized from
the sale or other disposition of certain market discount bonds will be
treated as ordinary income under Section 1276 of the Internal Revenue Code of
1986, as amended.
Any fee imposed by the Fund and paid by an investor in connection with
an exchange or redemption of Fund shares may result in a capital loss to such
investor. In general, such loss will be treated as a short-term capital loss
if the shares were held for one year or less, or a long-term capital loss if
the shares were held for more than one year.
YIELD INFORMATION
The following information supplements and should be read in conjunction
with the section in the Funds' Prospectus entitled "Yield Information."
For the seven-day period ended February 28, 1997, the yield of the Money
Fund was 5.10% and its effective yield was 5.23%. For the same seven-day
period, the yield of the Government Money Fund was 5.08% and its effective
yield was 5.21%. Each Fund's yield and effective yield reflect the waiver of
a portion of the management fee by the Manager without which the yield and
effective yield for the seven-day period ended February 28, 1997 would have
been, for the Money Fund, 4.87% and 4.99%, respectively, and, for the
Government Money Fund, 4.88% and 5.00%, respectively. Yield is computed in
accordance with a standardized method which involves determining the net
change in the value of a hypothetical pre-existing Fund account having a
balance of one share at the beginning of a seven calendar day period for
which yield is to be quoted, dividing the net change by the value of the
account at the beginning of the period to obtain the base period return, and
annualizing the results (i.e., multiplying the base period return by 365/7).
The net change in the value of the account reflects the value of additional
shares purchased with dividends declared on the original share and any such
additional shares and fees that may be charged to shareholder accounts, in
proportion to the length of the base period and the Fund's average account
size, but does not include realized gains and losses or unrealized
appreciation and depreciation. Effective yield is computed by adding 1 to
the base period return (calculated as described above), raising that sum to a
power equal to 365 divided by 7, and subtracting 1 from the result.
Yields fluctuate and are not necessarily representative of future
results. Investors should remember that yield is a function of the type and
quality of the instruments in the portfolio, portfolio maturity and operating
expenses. An investor's principal in a Fund is not guaranteed. See
"Determination of Net Asset Value" for a discussion of the manner in which
each Fund's respective price per share is determined.
From time to time, advertising material for the Funds may include
biographical information relating to their portfolio managers and may refer
to, or include commentary by a portfolio manager relating to investment
strategy, asset growth, current or past business, political, economic or
financial conditions and other matters of general interest to investors.
INFORMATION ABOUT THE FUNDS
The following information supplements and should be read in conjunction
with the section in the Funds' Prospectus entitled "General Information."
Each Fund share has one vote and, when issued and paid for in accordance
with the terms of the offering, is fully paid and non-assessable. Fund
shares are of one class and have equal rights as to dividends and in
liquidation. Shares have no preemptive, subscription or conversion rights
and are freely transferable.
Each Fund sends annual and semi-annual financial statements to
shareholders.
TRANSFER AND DIVIDEND DISBURSING AGENT, CUSTODIAN, COUNSEL
AND INDEPENDENT AUDITORS
Dreyfus Transfer, Inc., a wholly-owned subsidiary of the Manager, P.O.
Box 9671, Providence, Rhode Island 02940-9671, serves as the transfer and
dividend disbursing agent for each Fund. Under a separate transfer agency
agreement with each Fund, the Transfer Agent arranges for the maintenance of
shareholder account records for the Fund, the handling of certain
communications between shareholders and the Fund and the payment of dividends
and distributions payable by the Fund. For these services, the Transfer
Agent receives a monthly fee computed on the basis of the number of
shareholder accounts it maintains for the Fund during the month, and is
reimbursed for certain out-of-pocket expenses. For the fiscal year ended
February 28, 1997, the Money Fund and Government Money Fund paid the Transfer
Agent $239,959 and $123,395, respectively. The Bank of New York, 90
Washington Street, New York, New York 10286, is each Fund's custodian.
Neither the Transfer Agent nor The Bank of New York has any part in
determining the investment policies of either Fund or which securities are to
be purchased or sold by a Fund.
Stroock & Stroock & Lavan LLP, 180 Maiden Lane, New York, New York 10038-
4982, as counsel for each Fund, has rendered its opinion as to certain legal
matters regarding the due authorization and valid issuance of the shares of
being sold pursuant to the Funds' Prospectus.
Ernst & Young LLP, 787 Seventh Avenue, New York, New York 10019,
independent auditors, have been selected as auditors of each Fund.
APPENDIX
This Appendix is applicable only to eligible investments of the Money
Fund.
Description of the highest commercial paper, bond and other short- and
long-term rating categories assigned by Standard & Poor's Ratings Group
("S&P"), Moody's Investors Service, Inc. ("Moody's"), Fitch Investors
Service, L.P. ("Fitch"), Duff & Phelps Credit Rating Co. ("Duff"), IBCA
Limited and IBCA Inc. ("IBCA") and Thomson BankWatch, Inc. ("BankWatch").
Commercial Paper and Short-Term Ratings
The designation A-1 by S&P indicates that the degree of safety regarding
timely payment is either overwhelming or very strong. Those issues
determined to possess overwhelming safety characteristics are denoted with a
plus sign (+) designation.
The rating Prime-1 (P-1) is the highest commercial paper rating assigned
by Moody's. Issuers of P-1 paper must have a superior capacity for repayment
of short-term promissory obligations, and ordinarily will be evidenced by
leading market positions in well established industries, high rates of return
on funds employed, conservative capitalization structures with moderate
reliance on debt and ample asset protection, broad margins in earnings
coverage of fixed financial charges and high internal cash generation, and
well established access to a range of financial markets and assured sources
of alternate liquidity.
The rating Fitch-1 (Highest Grade) is the highest commercial paper
rating assigned by Fitch. Paper rated Fitch-1 is regarded as having the
strongest degree of assurance for timely payment.
The rating Duff-1 is the highest commercial paper rating assigned by
Duff. Paper rated Duff-1 is regarded as having very high certainty of timely
payment with excellent liquidity factors which are supported by ample asset
protection. Risk factors are minor.
The designation A1 by IBCA indicates that the obligation is supported by
a very strong capacity for timely repayment. Those obligations rated A1+ are
supported by the highest capacity for timely repayment.
The rating TBW-1 is the highest short-term obligation rating assigned by
BankWatch. Obligations rated TBW-1 are regarded as having the strongest
capacity for timely repayment.
Bond and Long-Term Ratings
Bonds rated AAA by S&P are considered by S&P to be the highest grade
obligations and possess an extremely strong capacity to pay principal and
interest.
Bonds rated Aaa by Moody's are judged by Moody's to be of the best
quality. Bonds rated Aa by Moody's are judged by Moody's to be of high
quality by all standards and, together with the Aaa group, they comprise what
are generally known as high-grade bonds.
Bonds rated AAA by Fitch are judged by Fitch to be strictly high-grade,
broadly marketable, suitable for investment by trustees and fiduciary
institutions and liable to but slight market fluctuation other than through
changes in the money rate. The prime feature of an AAA bond is a showing of
earnings several times or many times interest requirements, with such
stability of applicable earnings that safety is beyond reasonable question
whatever changes occur in conditions.
Bonds rated AAA by Duff are considered by Duff to be of the highest
credit quality. The risk factors are negligible, being only slightly more
than U.S. Treasury debt.
Obligations rated AAA by IBCA have the lowest expectation of investment
risk. Capacity for timely repayment of principal and interest is
substantial, such that adverse changes in business, economic or financial
conditions are unlikely to increase investment risk significantly.
IBCA also assigns a rating to certain international and U.S. banks. An
IBCA bank rating represents IBCA's current assessment of the strength of the
bank and whether such bank would receive support should it experience
difficulties. In its assessment of a bank, IBCA uses a dual rating system
comprised of Legal Ratings and Individual Ratings. In addition, IBCA assigns
banks Long- and Short-Term Ratings as used in the corporate ratings discussed
above. Legal Ratings, which range in gradation from 1 through 5, address the
question of whether the bank would receive support provided by central banks
or shareholders if it experienced difficulties, and such ratings are
considered by IBCA to be a prime factor in its assessment of credit risk.
Individual Ratings, which range in gradations from A through E, represent
IBCA's assessment of a bank's economic merits and address the question of how
the bank would be viewed if it were entirely independent and could not rely
on support from state authorities or its owners.
In addition to its ratings of short-term obligations, BankWatch assigns
a rating to each issuer it rates, in gradations of A through E. BankWatch
examines all segments of the organization, including, where applicable, the
holding company, member banks or associations, and other subsidiaries. In
those instances where financial disclosure is incomplete or untimely, a
qualified rating (QR) is assigned to the institution. BankWatch also
assigns, in the case of foreign banks, a country rating which represents an
assessment of the overall political and economic stability of the country in
which the bank is domiciled.
<TABLE>
<CAPTION>
DREYFUS BASIC MONEY MARKET FUND, INC.
STATEMENT OF INVESTMENTS FEBRUARY 28, 1997
Principal
Negotiable Bank Certificates of Deposit_34.9% Amount Value
____________ __________
<S> <C> <C>
Banc One Wisconsin
5.33%, 3/25/97............................................................ $ 35,000,000 $ 34,999,982
Bankers Trust Co.
5.43%, 2/19/98............................................................ 50,000,000 49,962,380
Bank of Tokyo-Mitsubishi (Yankee)
5.60%-6.00%, 4/15/97-10/3/97.............................................. 32,000,000 32,000,146
Barclays Bank PLC (Yankee)
5.42%, 2/20/98............................................................ 50,000,000 49,976,421
Bayerische Hypothenken-und Wechsel-Bank AG (London)
5.78%, 1/9/98............................................................. 25,000,000 25,005,415
Chase Manhattan Bank (USA)
5.50%, 7/9/97............................................................. 25,000,000 25,000,000
Dai-Ichi Kangyo Bank Ltd. (Yankee)
5.65%-5.70%, 3/31/97-7/23/97.............................................. 35,000,000 35,000,781
Fuji Bank Ltd. (Yankee)
5.45%-5.64%, 3/17/97-4/23/97.............................................. 85,000,000 85,000,954
Industrial Bank of Japan Ltd. (Yankee)
5.55%, 4/7/97............................................................. 10,000,000 9,999,983
Morgan Guaranty Trust Co.
5.51%, 9/18/97............................................................ 25,000,000 25,045,991
Sanwa Bank Ltd. (London)
5.44%, 4/7/97............................................................. 30,000,000 30,003,289
Sanwa Bank Ltd. (Yankee)
5.49%-5.70%, 3/31/97-5/19/97.............................................. 15,000,000 15,000,474
Societe Generale (Yankee)
5.57%-6.03%, 7/21/97-10/7/97.............................................. 90,000,000 90,010,820
Sumitomo Bank Ltd. (Yankee)
5.56%-5.82%, 4/14/97-10/31/97............................................. 55,000,000 55,000,000
SwedBank (Yankee)
5.61%-5.65%, 10/9/97-11/14/97............................................. 65,000,000 65,000,000
______________
TOTAL NEGOTIABLE BANK CERTIFICATES OF DEPOSIT
(cost $627,006,636)....................................................... $ 627,006,636
===============
Bankers' Acceptances_3.5%
Bank of Tokyo-Mitsubishi (Yankee)
5.70%, 3/10/97............................................................ $ 7,250,000 $ 7,239,941
Industrial Bank of Japan Ltd. (Yankee)
5.71%, 3/19/97............................................................ 55,000,000 54,847,100
______________
TOTAL BANKERS' ACCEPTANCES
(cost $62,087,041)........................................................ $ 62,087,041
===============
DREYFUS BASIC MONEY MARKET FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) FEBRUARY 28, 1997
Principal
Commercial Paper_13.9% Amount Value
____________ ____________
Bankers Trust New York Corp.
5.44%-5.67%, 8/12/97-10/27/97............................................. $ 35,000,000 $ 33,851,889
Lehman Brothers Holdings Inc.
5.51%-5.78%, 4/28/97-10/3/97.............................................. 70,000,000 68,397,067
Merrill Lynch & Co. Inc.
5.50%, 8/4/97-10/14/97.................................................... 60,000,000 58,353,097
Morgan Stanley Group Inc.
5.41%, 4/25/97............................................................ 30,000,000 29,755,250
Salomon Inc.
5.78%, 8/4/97............................................................. 14,000,000 13,659,053
Sanwa Business Credit Corp.
5.44%, 5/19/97............................................................ 20,000,000 19,764,756
Spintab AB
5.40%, 5/7/97............................................................. 25,000,000 24,752,007
______________
TOTAL COMMERCIAL PAPER
(cost $248,533,119)....................................................... $ 248,533,119
===============
Corporate Notes_13.2%
Abbey National PLC
5.22%, 3/17/97............................................................ $ 50,000,000 $ 49,997,679
Abbey National Treasury Services PLC
5.60%, 11/21/97........................................................... 35,000,000 34,974,346
Bear Stearns Companies Inc.
5.51%-5.52%, 6/27/97-7/8/97(a)............................................ 75,000,000 75,000,000
General Motors Acceptance Corp.
5.28%-5.64%, 3/13/97-4/15/97.............................................. 46,210,000 46,302,578
Lehman Brothers Holdings Inc.
5.81%, 6/15/97............................................................ 10,000,000 10,045,020
Merrill Lynch & Co. Inc.
5.47%, 5/13/97............................................................ 20,000,000 19,999,227
______________
TOTAL CORPORATE NOTES
(cost $236,318,850)....................................................... $ 236,318,850
===============
Promissory Notes_4.6%
Goldman Sachs Group L.P.
5.43%-5.85%, 3/17/97-10/10/97(b,c)
(cost $83,000,000)........................................................ $ 83,000,000 $ 83,000,000
=============
Short-Term Bank Notes_7.1%
Bank of America Illinois
5.54%-5.58%, 9/30/97-11/19/97............................................. $ 36,900,000 $ 36,936,898
DREYFUS BASIC MONEY MARKET FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) FEBRUARY 28, 1997
Principal
Short-Term Bank Notes (continued) Amount Value
___________ ___________
First National Bank of Boston
5.44%-5.50%, 3/17/97-4/11/97.............................................. $ 90,000,000 $ 90,000,000
______________
TOTAL SHORT-TERM BANK NOTES
(cost $126,936,898)....................................................... $ 126,936,898
=============
U.S. Government Agencies_11.1%
Federal National Mortgage Association ,
Floating Rate Notes(a)
5.36%-5.46%, 6/20/97-1/21/98
(cost $199,929,475)....................................................... $ 200,000,000 $ 199,929,475
==============
Time Deposits_10.6%
Berliner Handels-und Frankforter Bank AG
5.42%, 3/3/97............................................................. $ 69,887,000 $ 69,887,000
First Union National Bank (Nassau)
5.38%, 3/3/97............................................................. 60,000,000 60,000,000
Westdeutsche Landesbank Girozentrale (Cayman)
5.38%, 3/3/97............................................................. 60,000,000 60,000,000
______________
TOTAL TIME DEPOSITS
(cost $189,887,000)....................................................... $ 189,887,000
===============
TOTAL INVESTMENTS
(cost $1,773,699,019)........................................... 98.9% $1,773,699,019
======== ================
CASH AND RECEIVABLES (NET)........................................ 1.1% $ 20,293,026
======== ================
NET ASSETS........................................................ 100.0% $1,793,992,045
======== ================
Notes to Statement of Investments:
(a) Variable interest rate-subject to periodic change.
(b) Securities restricted as to public resale. These securities were
acquired from 11/18/96-2/14/97 at a cost of par value. At February 28,
1997, the aggregate value of these securities is $83 million representing
approximately 4.6% of net assets and are valued at amortized cost.
(c) These notes were acquired for investment, not with the intent to
distribute or sell.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS BASIC MONEY MARKET FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES FEBRUARY 28, 1997
Cost Value
_______________ _______________
<S> <C> <C> <C>
ASSETS: Investments in securities_See Statement of Investments $1,773,699,019 $1,773,699,019
Cash....................................... 3,788,903
Interest receivable........................ 16,930,087
Prepaid expenses........................... 76,703
_______________
1,794,494,712
_______________
LIABILITIES: Due to The Dreyfus Corporation and affiliates 365,429
Accrued expenses and other liabilities..... 137,238
_______________
502,667
_______________
NET ASSETS.................................................................. $1,793,992,045
=================
REPRESENTED BY: Paid-in capital............................ $1,794,483,164
Accumulated net realized gain (loss) on investments (491,119)
_______________
NET ASSETS ................................................................. $1,793,992,045
=================
SHARES OUTSTANDING
(3 BILLION SHARES OF $.001 PAR VALUE COMMON STOCK AUTHORIZED)............... 1,794,483,164
NET ASSET VALUE, offering and redemption price per share ................... $1.00
=======
STATEMENT OF OPERATIONS YEAR ENDED FEBRUARY 28, 1997
INVESTMENT INCOME
INCOME Interest Income............................ $ 107,002,405
EXPENSES: Management fee_Note 2(a)................... $ 9,681,910
Shareholder servicing costs_Note 2(b)...... 3,138,758
Custodian fees............................. 137,496
Professional fees.......................... 73,355
Registration fees.......................... 43,913
Prospectus and shareholders' reports....... 41,877
Directors' fees and expenses_Note 2(c)..... 25,556
Miscellaneous.............................. 46,125
____________
Total Expenses....................... 13,188,990
Less_reduction in management fee due to
undertaking_Note 2(a).................. (4,495,473)
____________
Net Expenses......................... 8,693,517
_____________
INVESTMENT INCOME_NET....................................................... 98,308,888
NET REALIZED GAIN (LOSS) ON INVESTMENTS_Note 1(b)........................... (143,799)
_____________
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $ 98,165,089
==============
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS BASIC MONEY MARKET FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
Year Ended Year Ended
February 28, 1997 February 29, 1996
___________________ ___________________
OPERATIONS:
Investment income_net............................................... $ 98,308,888 $ 113,449,165
Net realized gain (loss) on investments............................. (143,799) (131,085)
_______________ _______________
Net Increase (Decrease) in Net Assets Resulting from Operations... 98,165,089 113,318,080
_______________ _______________
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income_net............................................... (98,308,888) (113,449,165)
_______________ _______________
CAPITAL STOCK TRANSACTIONS ($1.00 per share):
Net proceeds from shares sold....................................... 1,753,786,198 2,618,953,833
Dividends reinvested................................................ 92,292,687 106,821,314
Cost of shares redeemed............................................. (2,150,235,405) (2,250,593,463)
_______________ _______________
Increase (Decrease) in Net Assets from Capital Stock Transactions. (304,156,520) 475,181,684
_______________ _______________
Total Increase (Decrease) in Net Assets......................... (304,300,319) 475,050,599
NET ASSETS:
Beginning of Period................................................. 2,098,292,364 1,623,241,765
_______________ _______________
End of Period....................................................... $ 1,793,992,045 $ 2,098,292,364
================ =================
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
DREYFUS BASIC MONEY MARKET FUND, INC.
FINANCIAL HIGHLIGHTS
Reference is made to page 4 of the Funds Prospectus dated July 1, 1997.
DREYFUS BASIC MONEY MARKET FUND, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 1_SIGNIFICANT ACCOUNTING POLICIES:
Dreyfus BASIC Money Market Fund, Inc. (the "Fund") is registered under
the Investment Company Act of 1940 ("Act") as a diversified open-end
management investment company. The Fund's investment objective is to provide
investors with as high a level of current income as is consistent with the
preservation of capital and the maintenance of liquidity. The Dreyfus
Corporation ("Manager") serves as the Fund's investment adviser. The Manager
is a direct subsidiary of Mellon Bank, N.A. Premier Mutual Fund Services,
Inc. is the distributor of the Fund's shares, which are sold to the public
without a sales charge.
It is the Fund's policy to maintain a continuous net asset value per
share of $1.00; the Fund has adopted certain investment, portfolio valuation
and dividend and distribution policies to enable it to do so. There is no
assurance, however, that the Fund will be able to maintain a stable net asset
value per share of $1.00.
The Fund's financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management
estimates and assumptions. Actual results could differ from those estimates.
(A) PORTFOLIO VALUATION: Investments are valued at amortized cost, which
has been determined by the Fund's Board of Directors to represent the fair
value of the Fund's investments.
(B) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities
transactions are recorded on a trade date basis. Realized gain and loss from
securities transactions are recorded on the identified cost basis. Interest
income is recognized on the accrual basis. Cost of investments represents
amortized cost.
(C) DIVIDENDS TO SHAREHOLDERS: It is the policy of the Fund to declare
dividends daily from investment income-net. Such dividends are paid monthly.
Dividends from net realized capital gain, if any, are normally declared and
paid annually, but the Fund may make distributions on a more frequent basis
to comply with the distribution requirements of the Internal Revenue Code. To
the extent that net realized capital gain can be offset by capital loss
carryovers, it is the policy of the Fund not to distribute such gain.
(D) FEDERAL INCOME TAXES: It is the policy of the Fund to continue to
qualify as a regulated investment company, if such qualification is in the
best interests of its shareholders, by complying with the applicable
provisions of the Internal Revenue Code, and to make distributions of taxable
income sufficient to relieve it from substantially all Federal income and
excise taxes.
The Fund has an unused capital loss carryover of approximately $482,000
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to February 28, 1997. The
carryover does not include net realized securities losses from November 1,
1996 through February 28, 1997, which are treated, for Federal income tax
purposes, as arising in fiscal 1998. If not applied, $90,000 of the carryover
expires in fiscal 2002, $126,000 expires in fiscal 2003, $57,000 expires in
fiscal 2004 and $209,000 expires in fiscal 2005.
At February 28, 1997, the cost of investments for Federal income tax
purposes was substantially the same as the cost for financial reporting
purposes (see the Statement of Investments).
NOTE 2_MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES:
(A) Pursuant to a management agreement with the Manager, the management
fee is computed at the annual rate of .50 of 1% of the value of the Fund's
average daily net assets and is payable monthly. The Manager has undertaken,
until such time as it gives shareholders at least 90 days' notice to the
contrary, to reduce the management fee paid by the Fund, to
DREYFUS BASIC MONEY MARKET FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
the extent that the Fund's aggregate expenses, exclusive of taxes, brokerage,
interest on borrowings and extraordinary expenses exceed an annual rate of
.45 of 1% of the value of the Fund's average daily net assets. The reduction
in management fee, pursuant to the undertaking, amounted to $4,495,473 during
the period ended February 28, 1997.
(B) Under the Shareholder Services Plan, the Fund reimburses Dreyfus
Service Corporation, a wholly-owned subsidiary of the Manager, an amount not
to exceed an annual rate of .25 of 1% of the value of the Fund's average
daily net assets for certain allocated expenses of providing personal
services and/or maintaining shareholder accounts. The services provided may
include personal services relating to shareholder accounts, such as answering
shareholder inquiries regarding the Fund and providing reports and other
information, and services related to the maintenance of shareholder accounts.
During the period ended February 28, 1997, the Fund was charged an aggregate
of $2,686,551 pursuant to the Shareholder Services Plan.
The Fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of
the Manager, under a transfer agency agreement for providing personnel and
facilities to perform transfer agency services for the Fund. Such
compensation amounted to $239,959 during the period ended February 28, 1997.
(C) Each director who is not an "affiliated person" as defined in the Act
receives from the Fund an annual fee of $1,500 and an attendance fee of $250
per meeting. The Chairman of the Board receives an additional 25% of such
compensation.
<TABLE>
<CAPTION>
DREYFUS BASIC U.S. GOVERNMENT MONEY MARKET FUND
STATEMENT OF INVESTMENTS FEBRUARY 28, 1997
Annualized
Yield on
Date of Principal
U.S. Treasury Bills_7.4% Purchase Amount Value
_________ ___________ ____________
<S> <C> <C> <C>
5/29/97.................................................... 5.81% $ 50,000,000 $ 49,320,139
9/18/97.................................................... 5.77 40,000,000 38,781,577
2/5/98..................................................... 5.45 20,000,000 19,021,519
____________
TOTAL U.S. TREASURY BILLS (cost $107,123,235).................. $ 107,123,235
===============
U.S. Government Agencies_90.6%
Federal Farm Credit Banks, Consolidated Systemwide Discount Notes
1/21/98.................................................... 5.64% $ 30,000,000 $ 28,549,300
Federal Farm Credit Banks, Consolidated Systemwide Medium Term Notes
5/23/97.................................................... 5.40 (a) 24,000,000 24,017,939
6/13/97.................................................... 5.39 (a) 19,500,000 19,496,384
7/25/97.................................................... 5.33 (a) 50,000,000 49,992,356
8/14/97.................................................... 5.35 (a) 75,000,000 74,994,678
9/15/97.................................................... 5.38 (a) 20,000,000 19,994,924
1/30/98.................................................... 5.34 (a) 50,000,000 49,974,064
6/8/98..................................................... 5.50 (a) 50,000,000 50,000,000
Federal Home Loan Banks, Discount Notes
3/14/97.................................................... 5.65 13,900,000 13,873,096
Federal Home Loan Banks, Notes
3/6/97..................................................... 5.22 25,000,000 24,999,919
11/6/97.................................................... 5.77 18,000,000 18,000,000
11/18/97................................................... 5.70 24,220,000 24,220,000
12/9/97.................................................... 5.57 50,000,000 49,990,308
1/22/98.................................................... 5.86 50,000,000 49,961,790
2/12/98.................................................... 5.80 25,000,000 25,000,000
Federal Home Loan Mortgage Corp., Discount Notes
3/3/97..................................................... 5.30 22,810,000 22,803,398
4/1/97..................................................... 5.42 4,109,000 4,090,318
Federal Home Loan Mortgage Corp., Floating Rate Notes
6/30/98.................................................... 5.78 (a) 10,000,000 9,978,243
Federal Home Loan Mortgage Corp., Notes
6/6/97..................................................... 5.89 50,000,000 49,964,013
Federal National Mortgage Association, Discount Notes
3/6/97..................................................... 5.60 10,000,000 9,992,431
3/17/97.................................................... 5.49 10,000,000 9,976,222
6/9/97..................................................... 5.89 50,000,000 49,226,389
6/13/97.................................................... 5.90 23,945,000 23,559,698
7/22/97.................................................... 5.95 15,000,000 14,665,142
9/8/97..................................................... 5.40 4,265,000 4,148,012
10/24/97................................................... 5.41 25,000,000 24,152,396
11/6/97.................................................... 5.52 25,000,000 24,092,014
11/24/97................................................... 5.39 15,000,000 14,428,267
1/16/98.................................................... 5.51 15,000,000 14,299,150
DREYFUS BASIC U.S. GOVERNMENT MONEY MARKET FUND
STATEMENT OF INVESTMENTS (CONTINUED) FEBRUARY 28, 1997
Annualized
Yield on
Date of Principal
U.S. Government Agencies (continued) Purchase Amount Value
____________ _____________ ____________
________
Federal National Mortgage Association, Floating Rate Notes
3/27/97.................................................... 5.30% (a) $ 5,000,000 $ 5,000,000
4/11/97.................................................... 5.30 (a) 20,000,000 19,998,923
6/20/97.................................................... 5.43 (a) 70,000,000 70,002,478
7/24/97.................................................... 5.36 (a) 25,000,000 25,000,000
6/19/98.................................................... 5.45 (a) 100,000,000 99,976,164
6/29/98.................................................... 5.47 (a) 100,000,000 99,975,950
Student Loan Marketing Association, Discount Notes
3/3/97..................................................... 5.30 185,000,000 184,945,530
Student Loan Marketing Association, Floating Rate Notes
1/27/98.................................................... 5.82 (a) 20,000,000 19,936,091
_________________
TOTAL U.S. GOVERNMENT AGENCIES (cost $1,323,275,587)........... $1,323,275,587
=================
Repurchase Agreements_.9%
SBC Capital Corp.
dated 2/28/97, due 3/3/97 in the amount of
$13,708,995 (fully collateralized by
$14,351,000 U.S. Treasury Bills due
8/28/97, value $13,977,966)
(cost $13,703,000)......................................... 5.25 % $ 13,703,000 $ 13,703,000
=================
TOTAL INVESTMENTS (cost $1,444,101,822).............. 98.9% $1,444,101,822
======== =================
CASH AND RECEIVABLES (NET)........................... 1.1% $ 15,847,575
======== =================
NET ASSETS........................................... 100.0% $1,459,949,397
======== =================
Notes to Statement of Investments:
(a) Variable interest-rate subject to periodic change.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS BASIC U.S. GOVERNMENT MONEY MARKET FUND
STATEMENT OF ASSETS AND LIABILITIES FEBRUARY 28, 1997
Cost Value
_______________ _______________
<S> <C> <C> <C>
ASSETS: Investments in securities_See Statement of
Investments_Note 1(b) $1,444,101,822 $1,444,101,822
Cash....................................... 7,638,440
Interest receivable........................ 8,745,319
Prepaid expenses and other assets.......... 73,865
_______________
1,460,559,446
_______________
LIABILITIES: Due to The Dreyfus Corporation and affiliates 439,438
Accrued expenses and other liabilities..... 170,611
_______________
610,049
_______________
NET ASSETS.................................................................. $1,459,949,397
=================
REPRESENTED BY: Paid-in capital............................ $1,460,476,773
Accumulated net realized gain (loss) on investments (527,376)
_______________
NET ASSETS.................................................................. $1,459,949,397
=================
SHARES OUTSTANDING
(UNLIMITED NUMBER OF $.001 PAR VALUE SHARES OF BENEFICIAL INTEREST
AUTHORIZED) ........................................... 1,460,476,773
NET ASSET VALUE, offering and redemption price per share.................... $1.00
========
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS BASIC U.S. GOVERNMENT MONEY MARKET FUND
STATEMENT OF OPERATIONS YEAR ENDED FEBRUARY 28, 1997
INVESTMENT INCOME
INCOME Interest Income................................ $77,943,222
EXPENSES: Management fee_Note 2(a)....................... $ 7,033,547
Shareholder servicing costs_Note 2(b).......... 1,719,785
Registration fees.............................. 120,831
Custodian fees................................. 110,425
Professional fees.............................. 59,658
Prospectus and shareholders' reports........... 28,491
Trustees' fees and expenses_Note 2(c).......... 25,629
Miscellaneous.................................. 34,664
_____________
Total Expenses 9,133,030
Less_reduction in management fee due to
undertaking_Note 2(a) (2,809,559)
_____________
Net Expenses 6,323,471
_____________
INVESTMENT INCOME_NET....................................................... 71,619,751
NET REALIZED GAIN (LOSS) ON INVESTMENTS_Note 1(b)........................... (527,166)
_____________
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $71,092,585
==============
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS BASIC U.S. GOVERNMENT MONEY MARKET FUND
STATEMENT OF CHANGES IN NET ASSETS
Year Ended Year Ended
February 28, 1997 February 29, 1996
__________________ ____________________
<S> <C> <C>
OPERATIONS:
Investment income_net............................................. $ 71,619,751 $ 72,622,855
Net realized gain (loss) on investments........................... (527,166) 100,431
__________________ ____________________
Net Increase (Decrease) in Net Assets Resulting from Operations. 71,092,585 72,723,286
__________________ ____________________
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income_net............................................. (71,619,751) (72,622,855)
__________________ ____________________
BENEFICIAL INTEREST TRANSACTIONS ($1.00 per share):
Net proceeds from shares sold..................................... 1,673,931,454 1,786,037,880
Dividends reinvested.............................................. 67,642,692 68,115,281
Cost of shares redeemed........................................... (1,647,153,837) (1,529,919,393)
__________________ ____________________
Increase (Decrease) in Net Assets from Beneficial Interest Transactions 94,420,309 324,233,768
__________________ ____________________
Total Increase (Decrease) in Net Assets..................... 93,893,143 324,334,199
NET ASSETS:
Beginning of Period............................................... 1,366,056,254 1,041,722,055
__________________ ____________________
End of Period..................................................... $ 1,459,949,397 $ 1,366,056,254
================ =================
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
DREYFUS BASIC U.S. GOVERNMENT MONEY MARKET FUND
FINANCIAL HIGHLIGHTS
Reference is made to page 4 of the Fund's Prospectus
dated July 1, 1997.
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS BASIC U.S. GOVERNMENT MONEY MARKET FUND
NOTES TO FINANCIAL STATEMENTS
NOTE 1_SIGNIFICANT ACCOUNTING POLICIES:
Dreyfus BASIC U.S. Government Money Market Fund (the "Fund") is
registered under the Investment Company Act of 1940 ("Act") as a diversified
open-end management investment company. The Fund's investment objective is to
provide investors with as high a level of current income as is consistent
with the preservation of capital and the maintenance of liquidity. The
Dreyfus Corporation ("Manager") serves as the Fund's investment adviser. The
Manager is a direct subsidiary of Mellon Bank, N.A. Premier Mutual Fund
Services, Inc. is the distributor of the Fund's shares, which are sold to the
public without a sales charge.
It is the Fund's policy to maintain a continuous net asset value per
share of $1.00; the Fund has adopted certain investment, portfolio valuation
and dividend and distribution policies to enable it to do so. There is no
assurance, however, that the Fund will be able to maintain a stable net asset
value per share of $1.00.
The Fund's financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management
estimates and assumptions. Actual results could differ from those estimates.
(a) Portfolio valuation: Investments are valued at amortized cost, which
has been determined by the Fund's Board of Trustees to represent the fair
value of the Fund's investments.
(b) Securities transactions and investment income: Securities
transactions are recorded on a trade date basis. Realized gain and loss from
securities transactions are recorded on the identified cost basis. Interest
income is recognized on the accrual basis. Cost of investments represents
amortized cost.
The Fund may enter into repurchase agreements with financial
institutions, deemed to be creditworthy by the Fund's Manager, subject to the
seller's agreement to repurchase and the Fund's agreement to resell such
securities at a mutually agreed upon price. Securities purchased subject to
repurchase agreements are deposited with the Fund's custodian and, pursuant
to the terms of the repurchase agreement, must have an aggregate market value
greater than or equal to the repurchase price plus accrued interest at all
times. If the value of the underlying securities falls below the value of the
repurchase price plus accrued interest, the Fund will require the seller to
deposit additional collateral by the next business day. If the request for
additional collateral is not met, or the seller defaults on its repurchase
obligation, the Fund maintains the right to sell the underlying securities at
market value and may claim any resulting loss against the seller.
(c) Dividends to shareholders: It is the policy of the Fund to declare
dividends daily from investment income-net. Such dividends are paid monthly.
Dividends from net realized capital gain are normally declared and paid
annually, but the Fund may make distributions on a more frequent basis to
comply with the distribution requirements of the Internal Revenue Code. To
the extent that net realized capital gain can be offset by capital loss
carryovers, it is the policy of the Fund not to distribute such gain.
(d) Federal income taxes: It is the policy of the Fund to continue to
qualify as a regulated investment company, if such qualification is in the
best interests of its shareholders, by complying with the applicable
provisions of the Internal Revenue Code, and to make distributions of taxable
income sufficient to relieve it from substantially all Federal income and
excise taxes.
The Fund has an unused capital loss carryover of approximately $523,200
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to February 28, 1997. The
carryover does not include net realized securities losses from November 1,
1996 through February 28, 1997 which are treated, for Federal income tax
purposes, as arising in fiscal 1998. If not applied, $200 of the carryover
expires in fiscal 2003 and $523,000 expires in fiscal 2005.
DREYFUS BASIC U.S. GOVERNMENT MONEY MARKET FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
At February 28, 1997, the cost of investments for Federal income tax
purposes was substantially the same as the cost for
financial reporting purposes (see the Statement of Investments).
NOTE 2_MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES:
(a) Pursuant to a management agreement with the Manager, the management
fee is computed at the annual rate of .50 of 1% of the value of the Fund's
average daily net assets and is payable monthly. The Manager has undertaken,
until such time as it gives shareholders at least 90 days' notice to the
contrary, to reduce the management fee paid by the Fund, to the extent that
the Fund's aggregate expenses, exclusive of taxes, brokerage, interest on
borrowings and extraordinary expenses, exceed an annual rate of .45 of 1% of
the value of the Fund's average daily net assets. The reduction in management
fee, pursuant to the undertaking, amounted to $2,809,559 during the period
ended February 28, 1997.
(b) Under the Shareholder Services Plan, the Fund reimburses Dreyfus
Service Corporation, a wholly-owned subsidiary of the Manager, an amount not
to exceed an annual rate of .25 of 1% of the value of the Fund's average
daily net assets for certain allocated expenses of providing personal
services and/or maintaining shareholder accounts. The services provided may
include personal services relating to shareholder accounts, such as answering
shareholder inquiries regarding the Fund and providing reports and other
information, and services related to the maintenance of shareholder accounts.
During the period ended February 28, 1997, the Fund was charged an aggregate
of $1,420,118 pursuant to the Shareholder Services Plan.
The Fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of
the Manager, under a transfer agency agreement for providing personnel and
facilities to perform transfer agency services for the Fund. Such
compensation amounted to $123,395 during the period ended February 28, 1997.
(c) Each trustee who is not an "affiliated person" as defined in the Act
receives from the Fund an annual fee of $1,500 and an attendance fee of $250
per meeting. The Chairman of the Board receives an additional 25% of such
compensation.
New York, New York
March 31, 1997
DREYFUS BASIC MONEY MARKET FUND, INC.
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
SHAREHOLDERS AND BOARD OF DIRECTORS
DREYFUS BASIC MONEY MARKET FUND, INC.
We have audited the accompanying statement of assets and liabilities of
Dreyfus BASIC Money Market Fund, Inc., including the statement of
investments, as of February 28, 1997, and the related statement of operations
for the year then ended, the statement of changes in net assets for each of
the two years in the period then ended, and financial highlights for each of
the years indicated therein. These financial statements and financial
highlights are the responsibility of the Fund'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 and financial highlights. Our procedures included
confirmation of securities owned as of February 28, 1997 by correspondence
with the custodian. 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 Dreyfus BASIC Money Market Fund, Inc. at February 28, 1997, the
results of its operations for the year then ended, the changes in its net
assets for each of the two years in the period then ended, and the financial
highlights for each of the indicated years, in conformity with generally
accepted accounting principles.
[Ernst & Young LLP signature logo]
New York, New York
April 2, 1997
DREYFUS BASIC U.S. GOVERNMENT MONEY MARKET FUND
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
Shareholders and Board of Trustees
Dreyfus BASIC U.S. Government Money Market Fund
We have audited the accompanying statement of assets and liabilities of
Dreyfus BASIC U.S. Government Money Market Fund, including the statement of
investments, as of February 28, 1997, and the related statement of operations
for the year then ended, the statement of changes in net assets for each of
the two years in the period then ended, and financial highlights for each of
the years indicated therein. These financial statements and financial
highlights are the responsibility of the Fund'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 and financial highlights. Our procedures included
confirmation of securities owned as of February 28, 1997 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 Dreyfus BASIC U.S. Government Money Market Fund at February 28,
1997, the results of its operations for the year then ended, the changes in
its net assets for each of the two years in the period then ended, and the
financial highlights for each of the indicated years, in conformity with
generally accepted accounting principles.
[Ernst & Young LLP signature logo]
DREYFUS BASIC U.S. GOVERNMENT MONEY MARKET FUND
PART C. OTHER INFORMATION
_________________________
Item 24. Financial Statements and Exhibits. - List
_______ _________________________________________
(a) Financial Statements:
Included in Part A of the Registration Statement
Condensed Financial Information for the period from April
24, 1992 (commencement of operations) to February 28,
1993 and for the four fiscal years ended February 28,
1994, February 28, 1995, February 29, 1996 and February
28, 1997.
Included in Part B of the Registration Statement:
Statement of Investments--February 28, 1997.
Statement of Assets and Liabilities--February 28, 1997.
Statement of Operations--year ended February 28, 1997.
Statement of Changes in Net Assets--for each of the
fiscal years ended February 29, 1996 and February 28,
1997.
Notes to Financial Statements.
Report of Ernst & Young LLP, Independent Auditors, dated
March 31, 1997.
All Schedules and financial information, for which provision is made in the
applicable accounting regulations of the Securities and Exchange Commission,
are either omitted because they are not required under the related
instructions, they are inapplicable, or the required information is presented
in the financial statements or notes thereto which are included in Part B of
the Registration Statement.
Item 24. Financial Statements and Exhibits. - List (continued)
_______ _____________________________________________________
(b) Exhibits:
(1) Amended and Restated Agreement and Declaration of Trust is
incorporated by reference to Exhibit (1)(b) of Post-Effective
Amendment No. 5 to the Registration Statement on Form N-1A, filed
on May 20, 1994.
(2) Fund's By-Laws, as amended, are incorporated by reference to
Exhibit (2) of Post-Effective Amendment No. 5 to the Registration
Statement on Form N-1A, filed on May 20, 1994.
(4) Fund's Specimen Share certificate - Incorporated by reference to
Exhibit (4) of Pre-Effective Amendment No. 1 to the Fund's
Registration Statement on Form N-1A, filed on May 4, 1992.
(5) Management Agreement is incorporated by reference to Exhibit (5) of
Post-Effective Amendment No. 6 to the Registration Statement on
Form N-1A, filed on June 21, 1995.
(6)(a) Distribution Agreement is incorporated by reference to Exhibit
(6)(a) of Post-Effective Amendment No. 6 to the Registration
Statement on Form N-1A, filed on June 21, 1995.
(6)(b) Forms of Service Agreement are incorporated by reference to Exhibit
(6)(b) of Post-Effective Amendment No. 5 to the Registration
Statement on Form N-1A, filed on May 20, 1994.
(8) Custody Agreement is incorporated by reference to Exhibit (8)(a) of
Post-Effective Amendment No. 5 to the Registration Statement on
Form N-1A, filed on May 20, 1994.
(9) Shareholder Services Plan is incorporated by reference to Exhibit
(9) of Post-Effective Amendment No. 6 to the Registration on Form
N-1A, filed on June 21, 1995.
(10) Opinion and consent of Registrant's counsel is incorporated by
reference to Exhibit (10) of Post-Effective Amendment No. 1 to the
Registration Statement on Form N-1A, filed on May 4, 1992.
(11) Consent of Ernst & Young LLP, Independent Auditors.
(16) Schedule of Computation of Performance Data is incorporated by
reference to Exhibit (16) of Post-Effective Amendment No. 5 to the
Registration Statement on Form N-1A, filed on May 20, 1994.
(17) Financial Data Schedule.
Item 24. Financial Statements and Exhibits. - List (continued)
_______ _____________________________________________________
Other Exhibits
______________
(a) Powers of Attorney.
(b) Certificate of Secretary.
Item 25. Persons Controlled by or under Common Control with Registrant.
_______ ______________________________________________________________
Not Applicable
Item 26. Number of Holders of Securities.
_______ ________________________________
(1) (2)
Number of Record
Title of Class Holders as of June 2, 1997
______________ _____________________________
Shares of Beneficial Interest 12,298
(Par Value $.001)
Item 27. Indemnification
_______ _______________
Reference is made to Article EIGHTH Amended and Restated Declaration
of Trust of the Fund, filed as Exhibit 1 to the Fund's Registration
Statement filed under the Securities Act of 1933 on May 4, 1992. The
application of these provisions is limited by Article VIII of the
Fund's By-Laws which were filed as Exhibit 2 to the Fund's Post-
Effective Amendment No. 5 filed on May 20, 1994, and by the following
undertaking set forth in the rules promulgated by the Securities and
Exchange Commission.
Item 27. Indemnification (continued)
_______ _______________
Insofar as indemnification for liabilities
arising under the Securities Act of 1933 may be
permitted to trustees, officers and controlling
persons of the Registrant pursuant to the foregoing
provisions, or otherwise, the Registrant has been
advised that in the opinion of the Securities and
Exchange Commission such indemnification is against
public policy as expressed in such Act and is,
therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other
than the payment by the Registrant of expenses
incurred or paid by a trustee, officer or controlling
person of the Registrant in the successful defense of
any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection
with the securities being registered, the Registrant
will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to
a court of appropriate jurisdiction the question
whether such indemnification by it is against public
policy as expressed in such Act and will be governed
by the final adjudication of such issue.
Reference is also made to the Distribution Agreement attached as
Exhibit (6) hereto.
Item 28. Business and Other Connections of Investment Adviser.
_______ ____________________________________________________
The Dreyfus Corporation ("Dreyfus") and subsidiary companies
comprise a financial service organization whose business
consists primarily of providing investment management services
as the investment adviser, manager and distributor for sponsored
investment companies registered under the Investment Company Act
of 1940 and as an investment adviser to institutional and
individual accounts. Dreyfus also serves as sub-investment
adviser to and/or administrator of other investment companies.
Dreyfus Service Corporation, a wholly-owned subsidiary of
Dreyfus, serves primarily as a registered broker-dealer of
shares of investment companies sponsored by Dreyfus and of other
investment companies for which Dreyfus acts as investment
adviser, sub-investment adviser or administrator. Dreyfus
Management, Inc., another wholly-owned subsidiary, provides
investment management services to various pension plans,
institutions and individuals.
Item 28. Business and Other Connections of Investment Adviser (continued)
________ ________________________________________________________________
Officers and Directors of Investment Adviser
____________________________________________
Name and Position
with Dreyfus Other Businesses
_________________ ________________
MANDELL L. BERMAN Real estate consultant and private investor
Director 29100 Northwestern Highway, Suite 370
Southfield, Michigan 48034;
Past Chairman of the Board of Trustees:
Skillman Foundation;
Member of The Board of Vintners Intl.
BURTON C. BORGELT Chairman Emeritus of the Board and
Director Past Chairman, Chief Executive Officer and
Director:
Dentsply International, Inc.
570 West College Avenue
York, Pennsylvania 17405;
Director:
DeVlieg-Bullard, Inc.
1 Gorham Island
Westport, Connecticut 06880
Mellon Bank Corporation***;
Mellon Bank, N.A.***
FRANK V. CAHOUET Chairman of the Board, President and
Director Chief Executive Officer:
Mellon Bank Corporation***;
Mellon Bank, N.A.***;
Director:
Avery Dennison Corporation
150 North Orange Grove Boulevard
Pasadena, California 91103;
Saint-Gobain Corporation
750 East Swedesford Road
Valley Forge, Pennsylvania 19482;
Teledyne, Inc.
1901 Avenue of the Stars
Los Angeles, California 90067
W. KEITH SMITH Chairman and Chief Executive Officer:
Chairman of the Board The Boston Company****;
Vice Chairman of the Board:
Mellon Bank Corporation***;
Mellon Bank, N.A.***;
Director:
Dentsply International, Inc.
570 West College Avenue
York, Pennsylvania 17405
CHRISTOPHER M. CONDRON Vice Chairman:
President, Chief Mellon Bank Corporation***;
Executive Officer, The Boston Company****;
Chief Operating Deputy Director:
Officer and a Mellon Trust***;
Director Chief Executive Officer:
The Boston Company Asset Management,
Inc.****;
President:
Boston Safe Deposit and Trust Company****
STEPHEN E. CANTER Director:
Vice Chairman and The Dreyfus Trust Company++;
Chief Investment Officer, Formerly, Chairman and Chief Executive Officer:
and a Director Kleinwort Benson Investment Management
Americas Inc.*
LAWRENCE S. KASH Chairman, President and Chief
Vice Chairman-Distribution Executive Officer:
and a Director The Boston Company Advisors, Inc.
53 State Street
Exchange Place
Boston, Massachusetts 02109;
Executive Vice President and Director:
Dreyfus Service Organization, Inc.**;
Director:
Dreyfus America Fund+++;
The Dreyfus Consumer Credit Corporation*;
The Dreyfus Trust Company++;
Dreyfus Service Corporation*;
World Balanced Fund++++;
President:
The Boston Company****;
Laurel Capital Advisors***;
Boston Group Holdings, Inc.;
Executive Vice President:
Mellon Bank, N.A.***;
Boston Safe Deposit and Trust
Company****
WILLIAM T. SANDALLS, JR. Director:
Senior Vice President and Dreyfus Partnership Management, Inc.*;
Chief Financial Officer Seven Six Seven Agency, Inc.*;
President and Director:
Lion Management, Inc.*;
Executive Vice President and Director:
Dreyfus Service Organization, Inc.*;
Vice President, Chief Financial Officer and
Director:
Dreyfus America Fund+++;
World Balanced Fund++++;
Vice President and Director:
The Dreyfus Consumer Credit Corporation*;
The Truepenny Corporation*;
Treasurer, Financial Officer and Director:
The Dreyfus Trust Company++;
Treasurer and Director:
Dreyfus Management, Inc.*;
Dreyfus Service Corporation*;
Formerly, President and Director:
Sandalls & Co., Inc.
MARK N. JACOBS Vice President, Secretary and Director:
Vice President, Secretary:
General Counsel The Dreyfus Consumer Credit Corporation*;
and Secretary Dreyfus Management, Inc.*;
Assistant Secretary:
Dreyfus Service Organization, Inc.**;
Major Trading Corporation*;
The Truepenny Corporation*
PATRICE M. KOZLOWSKI None
Vice President-
Corporate Communications
MARY BETH LEIBIG None
Vice President-
Human Resources
JEFFREY N. NACHMAN President and Director:
Vice President-Mutual Fund Dreyfus Transfer, Inc.
Accounting One American Express Plaza
Providence, Rhode Island 02903
ANDREW S. WASSER Vice President:
Vice President-Information Mellon Bank Corporation***
Services
WILLIAM V. HEALEY
Assistant Secretary
President:
The Truepenny Corporation
Vice President and Director:
The Dreyfus Consumer Credit Corporation
Secretary and Director:
Dreyfus Partnership Management Inc.
Director:
The Dreyfus Trust Company
Assistant Secretary:
Dreyfus Service Corporation
Dreyfus Investment Advisors, Inc.
Assistant Clerk:
Dreyfus Insurance Agency of Massachusetts,
Inc.
______________________________________
* The address of the business so indicated is 200 Park Avenue, New
York, New York 10166.
** The address of the business so indicated is 131 Second Street, Lewes,
Delaware 19958.
*** The address of the business so indicated is One Mellon Bank Center,
Pittsburgh, Pennsylvania 15258.
**** The address of the business so indicated is One Boston Place, Boston,
Massachusetts 02108.
+ The address of the business so indicated is Atrium Building, 80 Route
4 East, Paramus, New Jersey 07652.
++ The address of the business so indicated is 144 Glenn Curtiss
Boulevard, Uniondale, New York 11556-0144.
+++ The address of the business so indicated is 69, Route 'd'Esch,
L-1470 Luxembourg.
++++ The address of the business so indicated is 69, Route 'd'Esch,
L-2953 Luxembourg.
Item 29. Principal Underwriters
________ ______________________
(a) Other investment companies for which Registrant's principal
underwriter (exclusive distributor) acts as principal underwriter or
exclusive distributor:
1) Comstock Partners Funds, Inc.
2) Dreyfus A Bonds Plus, Inc.
3) Dreyfus Appreciation Fund, Inc.
4) Dreyfus Asset Allocation Fund, Inc.
5) Dreyfus Balanced Fund, Inc.
6) Dreyfus BASIC GNMA Fund
7) Dreyfus BASIC Money Market Fund, Inc.
8) Dreyfus BASIC Municipal Fund, Inc.
9) Dreyfus BASIC U.S. Government Money Market Fund
10) Dreyfus California Intermediate Municipal Bond Fund
11) Dreyfus California Tax Exempt Bond Fund, Inc.
12) Dreyfus California Tax Exempt Money Market Fund
13) Dreyfus Cash Management
14) Dreyfus Cash Management Plus, Inc.
15) Dreyfus Connecticut Intermediate Municipal Bond Fund
16) Dreyfus Connecticut Municipal Money Market Fund, Inc.
17) Dreyfus Florida Intermediate Municipal Bond Fund
18) Dreyfus Florida Municipal Money Market Fund
19) The Dreyfus Fund Incorporated
20) Dreyfus Global Bond Fund, Inc.
21) Dreyfus Global Growth Fund
22) Dreyfus GNMA Fund, Inc.
23) Dreyfus Government Cash Management
24) Dreyfus Growth and Income Fund, Inc.
25) Dreyfus Growth and Value Funds, Inc.
26) Dreyfus Growth Opportunity Fund, Inc.
27) Dreyfus Income Funds
28) Dreyfus Institutional Money Market Fund
29) Dreyfus Institutional Short Term Treasury Fund
30) Dreyfus Insured Municipal Bond Fund, Inc.
31) Dreyfus Intermediate Municipal Bond Fund, Inc.
32) Dreyfus International Funds, Inc.
33) Dreyfus Investment Grade Bond Funds, Inc.
34) The Dreyfus/Laurel Funds, Inc.
35) The Dreyfus/Laurel Funds Trust
36) The Dreyfus/Laurel Tax-Free Municipal Funds
37) Dreyfus LifeTime Portfolios, Inc.
38) Dreyfus Liquid Assets, Inc.
39) Dreyfus Massachusetts Intermediate Municipal Bond Fund
40) Dreyfus Massachusetts Municipal Money Market Fund
41) Dreyfus Massachusetts Tax Exempt Bond Fund
42) Dreyfus MidCap Index Fund
43) Dreyfus Money Market Instruments, Inc.
44) Dreyfus Municipal Bond Fund, Inc.
45) Dreyfus Municipal Cash Management Plus
46) Dreyfus Municipal Money Market Fund, Inc.
47) Dreyfus New Jersey Intermediate Municipal Bond Fund
48) Dreyfus New Jersey Municipal Bond Fund, Inc.
49) Dreyfus New Jersey Municipal Money Market Fund, Inc.
50) Dreyfus New Leaders Fund, Inc.
51) Dreyfus New York Insured Tax Exempt Bond Fund
52) Dreyfus New York Municipal Cash Management
53) Dreyfus New York Tax Exempt Bond Fund, Inc.
54) Dreyfus New York Tax Exempt Intermediate Bond Fund
55) Dreyfus New York Tax Exempt Money Market Fund
56) Dreyfus 100% U.S. Treasury Intermediate Term Fund
57) Dreyfus 100% U.S. Treasury Long Term Fund
58) Dreyfus 100% U.S. Treasury Money Market Fund
59) Dreyfus 100% U.S. Treasury Short Term Fund
60) Dreyfus Pennsylvania Intermediate Municipal Bond Fund
61) Dreyfus Pennsylvania Municipal Money Market Fund
62) Dreyfus Premier California Municipal Bond Fund
63) Dreyfus Premier Equity Funds, Inc.
64) Dreyfus Premier Global Investing, Inc.
65) Dreyfus Premier GNMA Fund
66) Dreyfus Premier Worldwide Growth Fund, Inc.
67) Dreyfus Premier Insured Municipal Bond Fund
68) Dreyfus Premier Municipal Bond Fund
69) Dreyfus Premier New York Municipal Bond Fund
70) Dreyfus Premier State Municipal Bond Fund
71) Dreyfus Premier Value Fund
72) Dreyfus S&P 500 Index Fund
73) Dreyfus Short-Intermediate Government Fund
74) Dreyfus Short-Intermediate Municipal Bond Fund
75) The Dreyfus Socially Responsible Growth Fund, Inc.
76) Dreyfus Stock Index Fund, Inc.
77) Dreyfus Tax Exempt Cash Management
78) The Dreyfus Third Century Fund, Inc.
79) Dreyfus Treasury Cash Management
80) Dreyfus Treasury Prime Cash Management
81) Dreyfus Variable Investment Fund
82) Dreyfus Worldwide Dollar Money Market Fund, Inc.
83) General California Municipal Bond Fund, Inc.
84) General California Municipal Money Market Fund
85) General Government Securities Money Market Fund, Inc.
86) General Money Market Fund, Inc.
87) General Municipal Bond Fund, Inc.
88) General Municipal Money Market Fund, Inc.
89) General New York Municipal Bond Fund, Inc.
90) General New York Municipal Money Market Fund
(b)
Positions and
Name and principal Positions and offices with offices with
business address the Distributor Registrant
__________________ ___________________________ _____________
Marie E. Connolly+ Director, President, Chief President and
Executive Officer and Compliance Treasurer
Officer
Joseph F. Tower, III+ Senior Vice President, Treasurer Vice President
and Chief Financial Officer and Assistant
Treasurer
John E. Pelletier+ Senior Vice President, General Vice President
Counsel, Secretary and Clerk and Secretary
Roy M. Moura+ First Vice President None
Dale F. Lampe+ Vice President None
Mary A. Nelson+ Vice President Vice President
and Assistant
Treasurer
Paul Prescott+ Vice President None
Elizabeth A. Keeley++ Assistant Vice President Vice President
and Assistant
Secretary
Jean M. O'Leary+ Assistant Secretary and None
Assistant Clerk
John W. Gomez+ Director None
William J. Nutt+ Director None
________________________________
+ Principal business address is One Exchange Place, Boston, Massachusetts
02109.
++ Principal business address is 200 Park Avenue, New York, New York 10166.
Item 30. Location of Accounts and Records
________________________________
1. First Data Investor Services Group, Inc.,
a subsidiary of First Data Corporation
P.O. Box 9671
Providence, Rhode Island 02940-9671
2. The Bank of New York
90 Washington Street
New York, New York 10286
3. Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, Rhode Island 02940-9671
4. The Dreyfus Corporation
200 Park Avenue
New York, New York 10166
Item 31. Management Services
_______ ___________________
Not Applicable
Item 32. Undertakings
________ ____________
(1) To call a meeting of shareholders for the purpose of voting upon
the question of removal of a Board member or Board members when
requested in writing to do so by the holders of at least 10% of
the Registrant's outstanding shares and in connection with such
meeting to comply with the provisions of Section 16(c) of the
Investment Company Act of 1940 relating to shareholder
communications.
(2) To furnish each person to whom a prospectus is delivered with a
copy of the Fund's latest Annual Report to Shareholders, upon
request and without charge.
SIGNATURES
---------------
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all of
the requirements for effectiveness of this Amendment to the Registration
Statement pursuant to Rule 485(b) under the Securities Act of 1933 and has
duly caused this Amendment to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of New
York, and State of New York on the 16th day of June, 1997.
DREYFUS BASIC U.S. GOVERNMENT MONEY MARKET FUND
BY: /s/Marie E. Connolly*
___________________________________________
MARIE E. CONNOLLY, PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this
Amendment to the Registration Statement has been signed below by the
following persons in the capacities and on the dates indicated.
Signatures Title Date
______________________________ _____________________________ _________
/s/Marie E. Connolly* President and Treasurer 06/16/97
______________________________ (Principal Executive,
Marie E. Connolly Financial and Accounting Officer)
/s/David W. Burke* Trustee 06/16/97
______________________________
David W. Burke
/s/Joseph S. DiMartino* Trustee 06/16/97
______________________________
Joseph S. DiMartino
/s/Diane Dunst* Trustee 06/16/97
______________________________
Diane Dunst
/s/Rosalind Gersten Jacobs* Trustee 06/16/97
______________________________
Rosalind Gersten Jacobs
/s/Jay I. Meltzer* Trustee 06/16/97
______________________________
Jay I. Meltzer
/s/Daniel Rose* Trustee 06/16/97
______________________________
Daniel Rose
/s/Warren B. Rudman* Trustee 06/16/97
______________________________
Warren B. Rudman
/s/Sander Vanocur* Trustee 06/16/97
______________________________
Sander Vanocur
*BY: ______________________
Elizabeth A. Keeley,
Attorney-in-Fact
Dreyfus BASIC U.S. Government Money Market Fund, Inc.
EXHIBIT INDEX
Exhibit No.
(17) Financial Data Schedule
24(b)(11) Consent of Ernst & Young LLP
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the captions "Condensed
Financial Information" and "Transfer and Dividend Disbursing Agent, Custodian,
Counsel and Independent Auditors" and to the use of our report dated March 31,
1997, in this Registration Statement (Form N-1A 33-46503) of Dreyfus BASIC U.S.
Government Money Market Fund.
ERNST & YOUNG LLP
New York, New York
June 13, 1997
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