DREYFUS BASIC MONEY MARKET FUND, INC.
- -----------------------------------------------------------------------------
LETTER TO SHAREHOLDERS
Dear Shareholder:
We are pleased to report the performance for Dreyfus BASIC Money Market Fund,
Inc. for the six-month period ended August 31, 1998. For the period, your Fund
produced an annualized yield of 5.25% and, after taking into account the effect
of compounding, the annualized effective yield was 5.38%.*
The Economy
Having consistently viewed inflation as the primary threat to our strong
growth, low unemployment economy, the Federal Reserve Board (the "Fed") now has
another factor to ponder in setting monetary policy: the risk of global
recession. The wave of economic uncertainty that shook stock markets and caused
currencies to devalue, which began in Thailand on July 2, 1997 (the onset of the
Asian financial crisis), has spread throughout Asia and around the world. This
financial tumult has underscored just how economically interrelated the world's
nations are. In fact, the fragility of global financial markets was a key factor
in the Fed's reluctance to raise interest rates in an economy now in its seventh
year of economic expansion. It feared that an increase in rates might threaten
the stability of other currencies.
There were additional economic factors that stayed the Fed's hand. Inflation
has remained tame, comfortably below 2% on the consumer level, and is minimal at
the production level of the economy as well. One reason for the low inflation
rate is the strong dollar, which keeps import prices down; domestic producers
are constrained from raising prices by competition from lower priced foreign
goods. This has all been good news for consumers, who account for two thirds of
all economic activity. Bolstered by solid wage gains and abundant jobs,
consumers have been a driving positive force in the economy. Whether it was
housing, automobiles, big ticket or small ticket items, their spending and their
overall economic optimism both were robust. By the end of the reporting period,
however, there were hints that this could change. The political and economic
instability in Russia jolted the U.S. stock market in August. The stock market
selloff could cause consumers to grow less confident and curtail spending, even
though the larger-scale economic fundamentals for consumers remain positive: low
inflation and plentiful jobs (unemployment remains near its 28-year low of
4.5%).
The wave of currency devaluations that began over a year ago in Southeast Asia
has become stronger. Collapsing currencies, the latest being the Russian ruble,
have triggered often violent reactions in foreign financial markets. The distant
financial turmoil has resulted in a reduced demand for U.S. exports, and has
begun to curtail domestic corporate profit growth. In the second quarter,
profits declined year-over-year for the first time in almost a decade. Mirroring
the slide in corporate profits, industrial production declined in June and July.
In addition to the profit pinch, second-quarter economic growth lessened to
1.6%, the slowest rate in three years and dramatically below the 5.5% rate
reported for the first quarter. We remain alert for additional signs of
the domestic effects of global financial problems.
The Market Environment
The economic forces described above drove down short-term interest rates in
late July and during August, finally pushing them below the narrow band that had
prevailed for many months.
The most notable result was that, toward the end of the six-month fiscal
period, the yield curve became inverted, with three-month Treasury bills
actually yielding more than longer money market maturities.
The inverted yield curve was caused by a flight to quality due to turmoil in
both foreign and domestic financial markets. It also reflected an expectation in
the market that the Fed's next move will be to reduce short-term rates, rather
than boost them as had been assumed for more than a year.
<PAGE>
Portfolio Focus
In this environment, we have continued to maintain average maturities somewhat
longer than the industry standard. This strategy provided very competitive
yields for investors over the reporting period. We will continue this approach
as long as warranted by the market outlook.
Sincerely,
[Patricia A. Larkin signature logo]
Patricia A. Larkin
Senior Portfolio Manager
September 17, 1998
New York, N.Y.
*Annualized effective yield is based upon dividends declared daily and
reinvested monthly.
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<CAPTION>
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DREYFUS BASIC MONEY MARKET FUND, INC.
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS AUGUST 31, 1998 (UNAUDITED)
Principal
Negotiable Bank Certificates of Deposit--26.9% Amount Value
- ------------------------------------------------------- _______________ _______________
<S> <C> <C>
Abbey National Treasury Service (Yankee)
5.70%-5.72%, 1/27/99-2/25/99 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 65,000,000 $ 65,000,000
Bankers Trust Co. (Yankee)
5.92%, 10/27/98. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,000,000 15,001,101
Barclays Bank PLC (Yankee)
5.75%, 1/25/99 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,000,000 25,000,000
Bayerische Landesbank (Yankee)
5.75%, 5/6/99. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,000,000 24,989,601
Credit Agricole Indosuez S.A. (Yankee)
5.50%-5.80%, 1/14/99-5/26/99 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75,000,000 74,976,150
Deutsche Bank AG (Yankee)
5.61%-5.73%, 2/26/99-3/9/99 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35,000,000 34,991,927
Instituto Bancario San Paolo DiTorino (Yankee)
5.75%, 7/20/99 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,000,000 24,987,336
Royal Bank of Canada (Yankee)
5.61%, 2/23/99 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50,000,000 49,984,873
Societe Generale (Yankee)
5.76%-5.84%, 4/6/99-5/28/99 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80,000,000 79,962,050
SwedBank (Yankee)
5.73%-5.79%, 3/26/99-6/14/99 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55,000,000 54,986,046
Swiss Bank Corp. (Yankee)
5.75%, 10/1/98 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30,700,000 30,701,285
Westdeutsche Landesbank Girozentrale (Yankee)
5.69%, 1/25/99 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,000,000 25,000,000
_______________
TOTAL NEGOTIABLE BANK CERTIFICATES OF DEPOSIT
(cost $505,580,369) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 505,580,369
===============
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<CAPTION>
Commercial Paper--36.5%
- -------------------------------------------------------
<S> <C> <C>
ABN-AMRO Bank N.V.
5.59%, 9/25/98 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 10,000,000 $ 9,963,767
BHF Finance (DE)
5.69%, 11/2/98 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50,000,000 49,523,806
Bankers Trust N.Y. Corp.
5.61%, 9/2/98. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,000,000 24,996,208
Bear Stearns Companies Inc.
5.62%-5.76%, 10/2/98-1/29/99 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50,000,000 49,310,334
Donaldson, Lufkin, Jenrette Inc.
5.76%, 11/17/98. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50,000,000 49,392,556
Finova Capital Corp.
5.61%-5.67%, 11/13/98-2/26/99 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81,000,000 79,281,055
General Electric Capital Corp.
5.66%, 2/22/99 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50,000,000 48,678,083
Heller Financial Inc.
5.73%-5.76%, 9/14/98-12/21/98 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50,000,000 49,517,326
<PAGE>
DREYFUS BASIC MONEY MARKET FUND, INC.
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED) AUGUST 31, 1998 (UNAUDITED)
Principal
Commercial Paper (continued) Amount Value
- ------------------------------------------------------- _______________ _______________
Lehman Brothers Holdings Inc.
5.66%-5.75%, 3/19/99-5/18/99 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 20,000,000 $ 19,304,761
Morgan Stanley Dean Witter & Co.
5.64%, 1/22/99 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60,000,000 58,692,941
Prudential Funding Corp.
5.80%, 9/1/98. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75,000,000 75,000,000
Sanwa Business Credit Corp.
5.78%-5.79%, 11/16/98-11/23/98 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90,000,000 88,892,459
Spintab AB
5.60%-5.68%, 11/13/98-12/21/98 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85,000,000 83,696,616
_______________
TOTAL COMMERCIAL PAPER
(cost $686,249,912) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 686,249,912
===============
</TABLE>
<TABLE>
<CAPTION>
Corporate Notes--21.2%
- -------------------------------------------------------
<S> <C> <C>
Abbey National PLC
5.68%, 12/22/98. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 13,000,000 $ 13,002,297
Bankers Trust N.Y. Corp.
5.62%, 4/9/99 (a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30,000,000 29,993,015
Bear Stearns Companies Inc.
5.60%, 4/16/99 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,000,000 25,000,000
CTN Trust Series 1
5.64%, 9/2/98 (b,c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50,000,000 50,000,476
Instituto Bancario San Paolo DiTorino
5.63%, 4/19/99 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50,000,000 49,986,290
Lehman Brothers Holdings Inc.
5.71%-5.80%, 1/13/99-3/22/99 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70,000,000 70,000,000
Merrill Lynch & Co. Inc.
5.62%-5.71%, 1/11/99-4/19/99 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30,000,000 30,000,000
PNC Bank N.A.
5.61%, 6/11/99 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80,000,000 79,956,581
Paine Webber Group Inc.
5.70%, 4/22/99 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,000,000 10,000,000
Salomon Smith Barney Holdings Inc.
5.61%, 4/19/99 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40,000,000 40,000,000
_______________
TOTAL CORPORATE NOTES
(cost $397,938,659) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 397,938,659
===============
</TABLE>
<TABLE>
<CAPTION>
Promissory Notes--4.3%
- -------------------------------------------------------
Goldman Sachs Group L.P.
5.68%-5.87%, 10/2/98-11/6/98 (b,c)
<S> <C> <C>
(cost $80,000,000). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 80,000,000 $ 80,000,000
===============
<PAGE>
DREYFUS BASIC MONEY MARKET FUND, INC.
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED) AUGUST 31, 1998 (UNAUDITED)
Principal
Short-Term Bank Notes--2.9% Amount Value
- -------------------------------------------------------
_______________ _______________
Abbey National PLC
5.80%, 6/11/99 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 5,000,000 $ 4,997,030
Bank Boston N.A.
5.64%, 4/16/99 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,000,000 24,997,328
SouthTrust Bank N.A.
5.61%, 7/6/99 (a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,000,000 24,987,643
_______________
TOTAL SHORT-TERM BANK NOTES
(cost $54,982,001). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 54,982,001
===============
</TABLE>
<TABLE>
<CAPTION>
Time Deposits--6.0%
- -------------------------------------------------------
Fleet Bank of Massachusetts (Grand Cayman)
<S> <C> <C>
5.81%, 9/1/98. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 60,000,000 $ 60,000,000
Westdeutsche Landesbank Girozentrale (Grand Cayman)
5.94%, 9/1/98. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52,755,000 52,755,000
_______________
TOTAL TIME DEPOSITS
(cost $112,755,000) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 112,755,000
===============
TOTAL INVESTMENTS
(cost $1,837,505,941) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97.8% $1,837,505,941
======= ===============
CASH AND RECEIVABLES (NET) . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2% $ 40,873,525
======= ===============
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100.0% $1,878,379,466
======= ===============
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 10/2/97-6/8/98 at a cost of $50,000,000 for CTN Trust Series 1 and
$80,000,000 for Goldman Sachs Group L.P. At August 31,1998, the aggregate
value of these securities is $130 million representing approximately 6.9%
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>
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<TABLE>
<CAPTION>
DREYFUS BASIC MONEY MARKET FUND, INC.
- -----------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES AUGUST 31, 1998 (UNAUDITED)
Cost Value
_______________ _______________
<S> <C> <C> <C>
ASSETS: Investments in securities--See Statement of Investments . . $1,837,505,941 $1,837,505,941
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . 22,985,895
Interest receivable . . . . . . . . . . . . . . . . . . . 18,928,455
_______________
1,879,420,291
_______________
LIABILITIES: Due to The Dreyfus Corporation and affiliates . . . . . . 581,871
Accrued expenses . . . . . . . . . . . . . . . . . . . . 458,954
_______________
1,040,825
_______________
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,878,379,466
===============
REPRESENTED BY: Paid-in capital . . . . . . . . . . . . . . . . . . . . . $1,878,964,535
Accumulated net realized gain (loss) on investments . . . (585,069)
_______________
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,878,379,466
===============
SHARES OUTSTANDING
(3 BILLION SHARES OF $.001 PAR VALUE COMMON STOCK AUTHORIZED). . . . . . . . . . . . . . . 1,878,964,535
NET ASSET VALUE, offering and redemption price per share . . . . . . . . . . . . . . . . . $ 1.00
=======
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
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<TABLE>
<CAPTION>
DREYFUS BASIC MONEY MARKET FUND, INC.
- -----------------------------------------------------------------------------
STATEMENT OF OPERATIONS SIX MONTHS ENDED AUGUST 31, 1998 (UNAUDITED)
INVESTMENT INCOME
<S> <C> <C> <C>
INCOME Interest Income . . . . . . . . . . . . . . . . . . . . . $50,043,460
EXPENSES: Management fee--Note 2(a) . . . . . . . . . . . . . . . . $ 4,383,227
Shareholder servicing costs--Note 2(b) . . . . . . . . . 342,391
Registration fees . . . . . . . . . . . . . . . . . . . . 81,051
Custodian fees . . . . . . . . . . . . . . . . . . . . . 78,732
Prospectus and shareholders' reports . . . . . . . . . . 29,617
Professional fees . . . . . . . . . . . . . . . . . . . . 24,353
Directors' fees and expenses--Note 2(c) . . . . . . . . . 12,683
Miscellaneous . . . . . . . . . . . . . . . . . . . . . . 10,016
____________
Total Expenses . . . . . . . . . . . . . . . . . . 4,962,070
Less--reduction in management fee due to
undertaking--Note 2(a) . . . . . . . . . . . . . . . . (1,021,166)
____________
Net Expenses . . . . . . . . . . . . . . . . . . . 3,940,904
____________
INVESTMENT INCOME--NET . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46,102,556
NET REALIZED GAIN (LOSS) ON INVESTMENTS--Note 1(b) . . . . . . . . . . . . . . . . . . . . (19,129)
____________
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS . . . . . . . . . . . . . . . . . . . $46,083,427
============
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
DREYFUS BASIC MONEY MARKET FUND, INC.
- -----------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
August 31, 1998 Year Ended
(Unaudited) February 28, 1998
_______________ _________________
<S> <C> <C>
OPERATIONS:
Investment income--net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 46,102,556 $ 93,230,366
Net realized gain (loss) on investments . . . . . . . . . . . . . . . . . . . . . . . (19,129) (74,821)
_______________ _______________
Net Increase (Decrease) in Net Assets Resulting from Operations . . . . . . . . . . 46,083,427 93,155,545
_______________ _______________
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income--net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (46,351,407) (92,981,515)
_______________ _______________
CAPITAL STOCK TRANSACTIONS ($1.00 per share):
Net proceeds from shares sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . 996,698,338 2,048,718,827
Dividends reinvested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43,897,107 87,421,489
Cost of shares redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (886,918,915) (2,205,335,475)
_______________ _______________
Increase (Decrease) in Net Assets from Capital Stock Transactions . . . . . . . . . 153,676,530 (69,195,159)
_______________ _______________
Total Increase (Decrease) in Net Assets . . . . . . . . . . . . . . . . . . . . . 153,408,550 (69,021,129)
NET ASSETS:
Beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,724,970,916 1,793,992,045
_______________ _______________
End of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,878,379,466 $1,724,970,916
=============== ===============
UNDISTRIBUTED INVESTMENT INCOME--NET . . . . . . . . . . . . . . . . . . . . . . . . . . -- $ 248,851
_______________ _______________
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
<PAGE>
DREYFUS BASIC MONEY MARKET FUND, INC.
- -----------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
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 period indicated. This information has been
derived from the Fund's financial statements.
Six Months Ended
August 31, 1998 Fiscal Year Ended February,
___________________________________________________________
PER SHARE DATA: (Unaudited) 1998 1997 1996 1995 1994
__________ ______ ______ ______ ______ ______
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period . . $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
_______ ______ ______ ______ ______ ______
Investment Operations:
Investment income--net . . . . . . . . . .027 .053 .051 .058 .046 .033
_______ ______ ______ ______ ______ ______
Distributions:
Dividends from investment
income--net . . . . . . . . . . . . . (.027) (.053) (.051) (.058) (.046) (.033)
_______ ______ ______ ______ ______ ______
Net asset value, end of period . . . . . $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======= ======= ======= ======= ======= =======
TOTAL INVESTMENT RETURN. . . . . . . . . . . 5.34%* 5.38% 5.19% 5.97% 4.73% 3.40%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average
net assets . . . . . . . . . . . . . .45%* .45% .45% .31% .18% .10%
Ratio of net investment income
to average net assets . . . . . . . . 5.26%* 5.28% 5.08% 5.82% 4.70% 3.33%
Decrease reflected in above expense
ratios due to undertakings by
the Manager . . . . . . . . . . . . .. .12%* .24% .23% .31% .46% .55%
Net Assets, end of period
(000's Omitted) . . . . . . . . . . . $1,878,379 $1,724,971 $1,793,992 $2,098,292 $1,623,242 $1,217,032
- -----------------------------
* Annualized.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<PAGE>
DREYFUS BASIC MONEY MARKET FUND, INC.
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES:
Dreyfus BASIC Money Market Fund, Inc. (the "Fund") is registered under the
Investment Company Act of 1940, as amended (the "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 (the "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 in securities 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.
Under the terms of the custodian agreement, the Fund receives net earnings
credits based on available cash balances left on deposit.
(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 of 1986, as
amended (the "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 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 $566,000
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to February 28, 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, $209,000 expires in fiscal 2005 and
$84,000 expires in fiscal 2006.
At August 31, 1998, 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 annual 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 $1,021,166 during
the period ended August 31, 1998.
<PAGE>
DREYFUS BASIC MONEY MARKET FUND, INC.
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NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
(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
August 31, 1998, the Fund was charged $112,018 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. During the period
ended August 31, 1998, the Fund was charged $145,814 pursuant to the transfer
agency agreement.
(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.
<PAGE>
Dreyfus lion "d" logo (reg.tm)
Dreyfus logo (reg.tm)
DREYFUS BASIC
MONEY MARKET FUND, INC.
200 Park Avenue
New York, NY 10166
MANAGER
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
CUSTODIAN
The Bank of New York
90 Washington Street
New York, NY 10286
TRANSFER AGENT &
DIVIDEND DISBURSING AGENT
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Printed in U.S.A. 123SA988
BASIC
Money Market
Fund, Inc.
Semi-Annual
Report
August 31, 1998
<PAGE>
