SMITH BARNEY MONEY FUNDS, INC.
388 Greenwich Street
New York, New York 10013

STATEMENT OF ADDITIONAL INFORMATION

April 30, 1998

Smith Barney Money Funds, Inc. is a money market
fund that invests in high quality money market
instruments.  The Fund seeks to provide:

Daily Income 
Convenience
Daily Liquidity
Stability of Net Asset Value

Shares of the Fund are currently offered in three Portfolios:

Cash Portfolio
Government Portfolio
Retirement Portfolio

	This Statement of Additional information is not a Prospectus. 
 It is intended to provide more detailed information about Smith 
Barney Money Funds, Inc. (the "Fund") as well as matters already 
discussed in the Prospectus and therefore should be read in 
conjunction with the April 30, 1998 Prospectus which may be 
obtained from the Fund or a Smith Barney Financial Consultant.

TABLE OF CONTENTS


Statement of Additional Information	Page

Directors and Officers		 2
Investment Restrictions and Fundamental Policies		 4
Computation of Yield		 7
Valuation of Shares and Amortized Cost Valuation		 7
IRA and Other Prototype Retirement Plans		 8
Purchase of Shares		 9
The Management Agreement, Plan of Distribution and Other 
Services	 	 9
Voting Rights		11
Custodian, Transfer and Dividend Disbursing Agents		13
Independent Auditors		13
Financial Statements		13
Appendix - Securities Ratings		14


DIRECTORS AND OFFICERS

DONALD R. FOLEY, Director 
Retired; 3668 Freshwater Drive, Jupiter, Florida 33477.  Director 
of ten investment companies associated with Smith Barney.  
Formerly Vice President of Edwin Bird Wilson, Incorporated 
(advertising); 75. 
 
PAUL HARDIN, Director 
Professor of Law at University of North Carolina at Chapel Hill; 
12083 Morehead, Chapel Hill, North Carolina 27514; Director of 
twelve investment companies associated with Smith Barney; Director 
of The Summit Bancorporation; Formerly, Chancellor of the 
University of North Carolina at Chapel Hill, University of North 
Carolina; 66. 
  
*HEATH B. McLENDON, Chairman of the Board, President and Chief 
Executive Officer 
Managing Director of Smith Barney; Director of forty-two 
investment companies associated with Smith Barney; Director and 
President of Mutual Management Corp. ("MMC or the "Manager") 
(formerly known as Smith Barney Mutual Funds Management Inc.) and 
Travelers Investment Adviser, Inc. ("TIA"); Chairman of the Board 
of Smith Barney Strategy Advisors Inc.; Prior to July 1993, Senior 
Executive Vice President of Shearson Lehman Brothers Inc., Vice 
Chairman of Shearson Asset Management, Director of PanAgora Asset 
Management, Inc. and PanAgora Asset Management Limited; 64.  
 
RODERICK C. RASMUSSEN, Director 
Investment Counselor; 9 Cadence Court, Morristown, New Jersey 
07960.  Director of ten investment companies associated with Smith 
Barney.  Formerly Vice President of Dresdner and Company Inc. 
(investment counselors); 71. 

JOHN P. TOOLAN, Director 
Retired; 13 Chadwell Place, Morristown, New Jersey 07960.  
Director of ten investment companies associated with Smith Barney. 
 Formerly, Director and Chairman of Smith Barney Trust Company, 
Director of Smith Barney Holdings Inc. and the Manager and Senior 
Executive Vice President, Director and Member of the Executive 
Committee of Smith Barney; 67. 

LEWIS E. DAIDONE, Senior Vice President and Treasurer 
Managing Director of Smith Barney; Senior Vice President and 
Treasurer of forty-two investment companies associated with Smith 
Barney; Director and Senior Vice President of the Manager and TIA; 
40.

PHYLLIS M. ZAHORODNY, Vice President and Investment Officer
Managing Director of Smith Barney;  Prior to August, 1993, Managing 
Director and Portfolio Manager of Shearson Lehman Brothers Inc.; 
39.

MARTIN R. HANLEY, Investment Officer
Vice President of Smith Barney;  Prior to August, 1993, Vice 
President and Senior Trader of Shearson Lehman Brothers; 31.

__________________
* Designates a director who is an "interested person" of the Fund, 
as defined under the Investment Company Act of 1940. 

IRVING DAVID, Controller and Assistant Secretary
Vice President of Smith Barney and the Manager; Controller of 2 
investment companies associated with Smith Barney.  Prior to March, 
1994, Assistant Treasurer of First Investment Management Company; 
36.

CHRISTINA T. SYDOR, Secretary
Managing Director of Smith Barney; Secretary of forty-two 
investment companies associated with Smith Barney; Secretary and 
General Counsel of the Manager and TIA; 47.

	The business address of each of the officers of the Fund 
listed above is 388 Greenwich Street, New York, NY 10013.  Such 
persons are compensated by Smith Barney and are not separately 
compensated by the Fund.  On April 3, 1998, directors and officers 
owned in the aggregate less than 1% of the outstanding securities 
of each Portfolio. 

	The following table shows the compensation paid by the Fund 
to each director during the Fund's last fiscal year.  None of the 
officers of the Fund received any compensation from the Fund for 
such period. Officers and interested directors of the Fund are 
compensated by Smith Barney. 


COMPENSATION TABLE

<TABLE>
<CAPTION>

										Total
										Number 
					Pension or				of Funds
					Retirement				for Which
					Benefits				Person
					Accrued as	   Total		Serves
		Aggregate		Part of	   Compensation 	Within
Name		Compensation	Fund's	   from Fund	Fund
of Person	From the Fund	Expenses	   Complex		Complex
<S>		<C>			<C>		   <C>		<C>

Joseph H. Fleiss**+	$32,984.00		$0	$54,900 	     10
Donald R. Foley**	 	33,084.00  		0	55,400 	     10
Paul Hardin 		33,084.00		0	73,000 	     12
Francis P. Martin**	32,784.00		0	53,000	     10
Heath B. McLendon*	      0		0	    0		     42
Roderick C. Rasmussen	33,084.00		0	55,400 	     10
John P. Toolan**		33,084.00		0	55,400	     10
</TABLE>

________________________________________
  * 	Designates a director who is an "interested person" of the 
Fund. 

**	Pursuant to a deferred compensation plan, the indicated persons 
elected to defer the following amounts of their compensation from 
the Fund: Joseph H. Fleiss: $15,642, Donald R. Foley: $15,642, 
Francis P. Martin: $32,784 and John P. Toolan: $33,084, and the 
following amounts of their total compensation from the Fund 
Complex: Joseph H. Fleiss: $21,000, Donald R. Foley: $21,000, 
Francis P. Martin: $53,000 and John P. Toolan: $55,400

+	Effective January 1, 1998, Mr. Fleiss became a Director Emeritus. 
Upon attainment of age 72 the Fund's current Directors may elect 
to change to emeritus status.  Any directors elected or appointed 
to the Board of Directors in the future will be required to 
change to emeritus status upon attainment of age 80.  Directors 
Emeritus are entitled to serve in emeritus status for a maximum 
of 10 years during which time they are paid 50% of the annual 
retainer fee and meeting fees otherwise applicable to the Fund's 
directors, together with reasonable out-of-pocket expenses for 
each meeting attended.  During the Fund's last fiscal year, 
aggregate compensation from the Fund to Emeritus Directors 
totaled $16,292. 



INVESTMENT RESTRICTIONS AND FUNDAMENTAL POLICIES

	The Portfolios are subject to following restrictions and 
policies that are "fundamental," which means that they cannot be 
changed without approval by a "vote of a majority of the 
outstanding voting securities" of a Portfolio affected by the 
change, as defined in the Investment Company Act of 1940 (the 
"Act") and in accordance with Rule 18f-2 thereunder (see "Voting 
Rights").  The Portfolios are subject to other restrictions and 
policies that are "non-fundamental" and which may be changed by 
the Fund's Board of Directors without shareholder approval, 
subject to any applicable disclosure requirements. 

Fundamental Policies - All Portfolios.  Without the approval of a 
majority of its outstanding voting securities, no Portfolio may: 

   
1.	invest in a manner that would cause it to fail to be a 
"diversified company" under the 1940 Act and the rules, 
regulations and orders thereunder. (However, since each of 
the Portfolios operates as money market fund under Rule 2a-7 
under the Act, compliance with Rule 2a-7 is deemed to 
satisfy the diversification requirements otherwise 
applicable to diversified investment companies under the 
1940 Act.) 
    

2.	issue "senior securities" as defined in the 1940 Act and the 
rules, regulations and orders thereunder, except as 
permitted under the 1940 Act and the rules, regulations and 
orders thereunder.
 
3.	borrow money, except that (a) the Portfolio may borrow from 
banks for temporary or emergency (not leveraging) purposes, 
including the meeting of redemption requests which might 
otherwise require the untimely disposition of securities, 
and (b) the Portfolio may, to the extent consistent with its 
investment policies, enter into reverse repurchase 
agreements, forward roll transactions and similar investment 
strategies and techniques. To the extent that it engages in 
transactions described in (a) and (b), the Portfolio will be 
limited so that no more than 33 -1/3% 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) valued at the time the borrowing is 
made, is derived from such transactions. 

4.	make loans. This restriction does not apply to: (a) the 
purchase of debt obligations in which the Portfolio may 
invest consistent with its investment objectives and 
policies; (b) repurchase agreements; and (c) loans of its 
portfolio securities, to the fullest extent permitted under 
the 1940 Act. 

   
5.	purchase or sell real estate, real estate mortgages, real 
estate investment trust securities, commodities or commodity 
contracts, but this restriction shall not prevent the Fund 
from (a) investing in securities of issuers engaged in the 
real estate business or the business of investing in real 
estate (including interests in limited partnerships owning 
or otherwise engaging in the real estate business or the 
business of investing in real estate) and securities which 
are secured by real estate or interests therein; (b) holding 
or selling real estate received in connection with 
securities it holds or held; or (c) trading in futures 
contracts and options on futures contracts (including 
options on currencies to the extent consistent with the 
Portfolio's investment objective and policies). 
    

Additional Fundamental Policies - Cash and Retirement Portfolios. 
 In addition to the fundamental policies stated above for all 
Portfolios:

1.	Neither the Cash Portfolio nor the Retirement Portfolio may 
invest less than 25% of its assets in bank obligations 
(including both domestic and foreign bank obligations) and 
reserves freedom of action to concentrate in securities 
issued or guaranteed as to principal and interest by the 
U.S. government, its agencies and instrumentalities. 

 
Nonfundamental Policies.  As a nonfundamental policy, no Portfolio 
may: 
 
1.	purchase any securities on margin (except for such short-
term credits as are necessary for the clearance of purchases 
and sales of portfolio securities) or sell any securities 
short (except "against the box"). For purposes of this 
restriction, the deposit or payment by the Portfolio of 
underlying securities and other assets in escrow and 
collateral agreements with respect to initial or maintenance 
margin in connection with futures contracts and related 
options and options on securities, indexes or similar items 
is not considered to be the purchase of a security on 
margin; 

2.	invest in securities of other investment companies except as 
may be acquired as part of a merger, consolidation, or 
acquisition of assets; 

3. purchase or otherwise acquire any security if, as a result, 
more than 10% of its net assets would be invested in 
securities that are illiquid;

4.	invest in oil and gas interests; 

5.	invest in any company for the purpose of exercising control;

6. write or purchase put or call options.

	All of the foregoing restrictions that are stated in terms 
of percentages will apply at the time an investment is made; a 
subsequent increase or decrease in the percentage that may result 
from changes in values or net assets will not result in a 
violation of the restriction.  Notwithstanding any of the 
foregoing investment restrictions, each of the Cash Portfolio, the 
Government Portfolio and the Retirement Portfolio may invest up to 
100% of its assets in U.S. Government Obligations.

Reverse Repurchase Agreements.  The Government Portfolio may 
invest 1/3 of its total assets in reverse repurchase agreements and 
to enter into reverse repurchase agreements with broker/dealers and 
other financial institutions including the Fund's custodian.  Such 
agreements involve the sale of portfolio securities with an 
agreement to repurchase the securities at an agreed-upon price, 
date and interest payment and have the characteristics of 
borrowing.  Since the proceeds of borrowings under reverse 
repurchase agreements are invested, this would introduce the 
speculative factor known as "leverage." Such transactions are only 
advantageous if the Government Portfolio has an opportunity to earn 
a greater rate of interest on the cash derived from the transaction 
than the interest cost of obtaining that cash.  Opportunities to 
realize earnings from the use of the proceeds equal to or greater 
than the interest required to be paid may not always be available, 
and the Fund intends to use the reverse repurchase technique only 
when the Manager believes it will be advantageous to the Government 
Portfolio.  The use of reverse repurchase agreements may exaggerate 
any interim increase or decrease in the value of the Government 
Portfolio's assets.  The Fund's custodian bank will maintain a 
separate account for the Government Portfolio with securities 
having a value equal to or greater than such commitments. 

   
Time Deposits.	 The Cash Portfolio and the Retirement 
Portfolio may invest in fixed time deposits with an ultimate 
maturity of not more than six months. In addition, each of these 
Portfolios currently intends to limit investment in fixed time 
deposits with a maturity of two business days or more, when 
combined with other illiquid assets of the Portfolio, to not more 
than 10% of its assets would be invested in all such instruments.  
Fixed time deposits, unlike negotiable certificates of deposit, 
generally do not have a market and may be subject to penalties for 
early withdrawal of funds. 
    

Asset-Backed Securities.  The Cash and Retirement Portfolios 
may invest in asset-backed securities arising through the grouping 
by governmental, government-related and private organization of 
loans, receivables and other assets originated by various lenders. 
 Interests in pools of these assets differ from other forms of debt 
securities, which normally provide for periodic payment of interest 
in fixed amounts with principal paid at maturity or specified call 
dates.  Instead, asset-backed securities provide periodic  payments 
which generally consist of both interest and principal payments.

The estimated life of an asset-backed security varies with 
the prepayment experience with respect to the underlying debt 
instruments.  The rate of such prepayments, and hence the life of 
an asset-backed security, will be primarily a function of current 
market interest rates, although other economic and demographic 
factors may be involved.  For example, falling interest rates 
generally result in an increase in the rate of prepayments of 
mortgage loans while rising interest rates generally decrease the 
rate of prepayments.  An acceleration in prepayments in response to 
sharply falling interest rates will shorten the security's average 
maturity and limit the potential appreciation in the security's 
value relative to a conventional debt security.  In periods of 
sharply rising rates, prepayments generally slow, increasing the 
security's average life and its potential for price depreciation.

Illiquid and Restricted Securities.  Each Portfolio may 
purchase securities that are not registered ("restricted 
securities") under the Securities Act of 1933, as amended (the 
"1933 Act"), but can be offered and sold to "qualified 
institutional buyers" under Rule 144A under the 1933 Act ("Rule 
144A").  Each Portfolio may also invest a portion of its assets in 
illiquid investments, which include repurchase agreements maturing 
in more than seven days.  The Board of Directors may determine, 
based upon a continuing review of the trading markets for the 
specific restricted security, that such restricted securities are 
liquid.  The Board of Directors has adopted guidelines and 
delegated to management the daily function of determining and 
monitoring liquidity of restricted securities available pursuant to 
Rule 144A.  The Board, however, retains sufficient oversight and is 
ultimately responsible for the determinations.  Since it is not 
possible to predict with assurance exactly how the market for Rule 
144A restricted securities will develop, the Board will monitor 
each Portfolio's investments in these securities, focusing on such 
important factors, among others, as valuation, liquidity and 
availability of information.  Investments in restricted securities 
could have the effect of increasing the level of illiquidity in a 
Portfolio to the extent that qualified institutional buyers become 
for a time uninterested in purchasing these restricted securities. 
 The Portfolios may also purchase restricted securities that are 
not registered under Rule 144A.

The Articles of Incorporation of the Fund permit the Board of 
Directors to establish additional Portfolios of the Fund from time 
to time.  The investment restrictions applicable to any such 
additional Portfolio would be established by the Board of Directors 
at the time such Portfolio were established and may differ from 
those set forth above.  In the event of the liquidation or 
dissolution of a Portfolio or of the Fund, shares of a Portfolio 
are entitled to receive the assets belonging to that Portfolio and 
a proportionate distribution of any general assets not belonging to 
any particular Portfolio that are available for distribution based 
upon the relative net assets of the respective Portfolios. 


COMPUTATION OF YIELD

For the seven-day period ended December 31, 1997, the yield 
for the Cash Portfolio was 5.09% (the effective yield was 5.22%) 
for Class A shares, 5.15% (the effective yield was 5.28%) for Class 
C shares, and 5.30% (the effective yield was 5.45%) for Class Y 
shares, with an average dollar-weighted portfolio maturity of 73 
days; the yield for the Government Portfolio was 5.08% (the 
effective yield was 5.20%) for the Class A and Class C shares and 
5.19% (the effective yield was 5.33%) for the Class Y shares with 
an average dollar-weighted maturity of 68 days; and the yield for 
the Retirement Portfolio was 5.04% (the effective yield was 5.17%) 
with an average dollar-weighted portfolio maturity of 65 days.  The 
Fund quotes current yield of each Portfolio and class by dividing 
the net change in the value of a hypothetical pre-existing account 
having a balance of one share at the beginning of a recent seven-
day base period by the value of the account at the beginning of the 
base period and multiplying this base period return by 365/7.  (Net 
change in account value being the value of additional shares 
purchased with dividends from original shares and dividends 
declared on both original shares and any additional shares, but 
does not include any changes in unrealized appreciation or 
depreciation.)  In addition, for each Portfolio and class the Fund 
may from time to time quote effective yield figures assuming the 
compounding of dividends.  The effective yield will be slightly 
higher than the yield because of the compounding effect.  The Fund 
also quotes for each Portfolio and class the average dollar-
weighted portfolio maturity for the corresponding seven-day period.

Although principal is not insured and there can be no 
assurance that a $1.00 per share net asset value will be 
maintained, it is not expected that the net asset value of any 
Portfolio's shares will fluctuate because the Fund uses the 
amortized cost method of valuation.  (See "Valuation of Shares" 
below.) Investors should bear in mind that yield is a function of 
the type, quality and maturity of the instruments in a Portfolio, 
and the Portfolio's operating expenses.  While current yield 
information may be useful, investors should realize that each 
Portfolio's current yield will fluctuate, is not necessarily 
representative of future results and may not provide a basis for 
comparison with bank deposits or other investments that pay a fixed 
yield for a stated period of time.

VALUATION OF SHARES AND AMORTIZED COST VALUATION

The Prospectus states that net asset value will be determined 
on any day the New York Stock Exchange is open and that the net 
asset value may be determined on any day that the settlement of 
securities otherwise occurs.  The New York Stock Exchange is closed 
on the following holidays: New Year's Day, President's Day, Good 
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day 
and Christmas Day.

The Fund uses the "amortized cost method" for valuing 
portfolio securities pursuant to Rule 2a-7 under the Act.  The 
amortized cost method of valuation of the Fund's portfolio 
securities involves valuing a security at its cost at the time of 
purchase and thereafter assuming a constant amortization to 
maturity of any discount from or premium to the stated principal 
amount of the security, regardless of the impact of fluctuating 
interest rates its market value.  The market value of portfolio 
securities will fluctuate on the basis of the creditworthiness of 
the issuers of such securities and with changes in interest rates 
generally.  While the amortized cost 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 
Portfolio would receive if it sold the instrument.  During such 
periods the yields to investors in the Fund may differ somewhat 
from that obtained in a similar company that uses mark-to-market 
values for all its portfolio securities.  For example, if the use 
of amortized cost resulted in a lower (higher) aggregate portfolio 
value on a particular day, a prospective investor in the Fund would 
be able to obtain a somewhat higher (lower) yield than would result 
from investment in such similar company, and existing investors 
would receive less (more) investment income.

The purpose of this method of valuation is to attempt to 
maintain a constant net asset value per share, and it is expected 
that the price of the Fund's shares will remain at $1.00; however, 
shareholders should be aware that despite procedures that will be 
followed to have a stabilized price, including maintaining a 
maximum dollar-weighted average portfolio maturity of 90 days and 
investing in securities with remaining maturities of only 13 months 
or less, there is no assurance that at some future date there will 
not be a rapid change in prevailing interest rates, a default by an 
issuer or some other event that could cause the Fund's price per 
share to change from $1.00.


IRA AND OTHER PROTOTYPE RETIREMENT PLANS

	Copies of the following plans with custody or trust 
agreements have been approved by the Internal Revenue Service and 
are available from the Fund or Smith Barney; investors should 
consult with their own tax or retirement planning advisors prior to 
the establishment of a plan. 

IRA, Rollover IRA and Simplified Employee Pension - IRA

	The Small Business Job Protection Act of 1996 changed the 
eligibility requirements for participants in Individual Retirement 
Accounts ("IRAs").  Under these new provisions, if you or your 
spouse have earned income, each of you may establish an IRA and 
make maximum annual contributions equal to the lesser of earned 
income or $2,000.  As a result of this legislation, married couples 
where one spouse is non-working may now contribute a total of 
$4,000 annually to their IRAs.

   
	The Taxpayer Relief Act of 1997 has changed the requirements 
for determining whether or not you are eligible to make a 
deductible IRA contribution.  Under the new rules effective January 
1, 1998, if you are considered an active participant in an 
employer-sponsored retirement plan, you may still be eligible for a 
full or partial deduction depending upon your combined adjusted 
gross income ("AGI").  For married couples filing jointly, a full 
deduction is permitted if your combined AGI is $50,000 or less 
($30,000 for unmarried individuals); a partial deduction will be 
allowed when AGI is between $50,000-$60,000 ($30,000-$40,000 for an 
unmarried individual); and no deduction when AGI is $60,000 or more 
($40,000 for an unmarried individual).  However, if you are married 
and your spouse is covered by a employer-sponsored retirement plan, 
but you are not, you will be eligible for a full deduction if your 
combined AGI is $150,000 or less.  A partial deduction is permitted 
if your combined AGI is between $150,000-$160,000 and no deduction 
is permitted after $160,000. 
    
	A Rollover IRA is available to defer taxes on lump sum 
payments and other qualifying rollover amounts (no maximum) 
received from another retirement plan. 

   
	An employer who has established a Simplified Employee Pension 
- IRA ("SEP-IRA") on behalf of eligible employees may make a 
maximum annual contribution to each participant's account of 15% 
(up to $24,000) of each participant's compensation.  Compensation 
is capped at $160,000 for 1998.
    


Paired Defined Contribution Prototype

	Corporations (including Subchapter S corporations) and non-
corporate entities may purchase shares of the Fund through the 
Smith Barney Prototype Paired Defined Contribution Plan (the 
"Prototype").  The Prototype permits adoption of profit-sharing 
provisions, money purchase pension provisions, or both, to provide 
benefits for eligible employees and their beneficiaries.  The 
Prototype provides for a maximum annual tax deductible contribution 
on behalf of each Participant of up to 25% of compensation, but not 
to exceed $30,000 (provided that a money purchase pension plan or 
both a profit-sharing plan and a money purchase pension plan are 
adopted thereunder). 


PURCHASE OF SHARES

	Letter of Intent - Class Y Shares.  A Letter of Intent may 
be used as a way for investors to meet the minimum investment 
requirement for Class Y shares.  Such investors must make an 
initial minimum purchase of $5,000,000 in Class Y shares of the 
Fund and agree to purchase a total of $15,000,000 of Class Y 
Shares of the Fund within 13 months from the date of the Letter.  
If a total investment of $15,000,000 is not made within the 13-
month period, all Class Y shares purchased during such period will 
be transferred to Class A shares, where they will be subject to 
all fees (including a service fee of 0.25%) and expenses 
applicable to the Fund's Class A shares, which may include a CDSC 
of 1.00%.  Please contact a Smith Barney Financial Consultant or 
the Transfer Agent for further information.


THE MANAGEMENT AGREEMENT, PLAN OF DISTRIBUTION AND OTHER SERVICES

Manager

MMC manages the day to day operations of each Portfolio 
pursuant to management agreements entered into by the Fund on 
behalf of each Portfolio.  Under the management agreements, the 
Manager offers each Portfolio advice and assistance with respect to 
the acquisition, holding or disposal of securities and 
recommendations with respect to other aspects of the business and 
affairs of each Portfolio.  It also furnishes each Portfolio with 
executive and other personnel; management, bookkeeping, accounting 
and administrative services; office space and equipment; and the 
services of the officers and employees of the Fund.  MMC is a 
subsidiary of Salomon Smith Barney Holdings, Inc., which is a 
subsidiary of Travelers Group Inc. ("Travelers"), a publicly owned 
financial services company.

For the years 1995, 1996 and 1997, the management fee for the 
Cash Portfolio was $85,620,015, $103,013,084 and $117,380,871, 
respectively; the management fee for the Government Portfolio was 
$17,222,206, $18,688,740 and $19,475,520, respectively, and for the 
Retirement Portfolio was $5,043,576, $5,588,496 and $5,982,179, 
respectively.

The respective Portfolios' management agreements, which were 
approved by their shareholders on September 16, 1994 and became 
effective on November 21, 1994, provide for daily compensation of 
the Manager at the following annual rates: (1) Cash Portfolio - 
0.45% on the first $6 billion of the Portfolio's net assets, 0.425% 
on the next $6 billion, 0.40% on the next $6 billion and 0.35% on 
net assets in excess of $18 billion; (2) Government Portfolio - 
0.45% on the first $2.5 billion of the Portfolio's net assets, 
0.40% on the next $2.5 billion and 0.35% on net assets in excess of 
$5 billion; and (c) Retirement Portfolio - 0.45% on the first $1 
billion of the Portfolio's net assets, 0.40% on the next $1 billion 
and 0.35% on net assets in excess of $2 billion. 

   
Each Portfolio's management agreement further provides that 
all other expenses not specifically assumed by the Manager under 
the agreement are borne by the Fund.  Expenses payable by the Fund 
include, but are not limited to, all charges of custodians 
(including sums as custodian and sums for keeping books, performing 
portfolio valuations, and for rendering other services to the Fund) 
and shareholder servicing agents, filing fees and expenses relating 
to the registration and qualification of the Fund's shares under 
Federal or state securities laws and maintaining such registrations 
and qualifications (including the printing of the Fund's 
registration statements and prospectuses), expenses of preparing, 
printing and distributing all proxy material, reports and notices 
to shareholders, out-of-pocket expenses of directors and fees of 
directors who are not "interested persons" as defined in the Act, 
fees of auditors and legal counsel, interest, taxes, fees and 
commissions of every kind, expenses of issue, repurchase or 
redemption of shares, and all other costs incident to the Fund's 
corporate existence and extraordinary expenses such as litigation 
and indemnification expenses.  Direct expenses are charged to the 
relevant Portfolio; general corporate expenses of the Fund are 
allocated among all the Portfolios on the basis of relative net 
assets.  No sales or promotion expenses are incurred by the Fund, 
but expenses incurred in complying with laws regulating the issue 
or sale of the Fund's shares are not deemed sales or promotion 
expenses. 
    

The Manager has agreed that if in any fiscal year the total 
expenses of any Portfolio, exclusive of taxes, brokerage, interest 
and extraordinary expenses, exceed 0.70% of the average daily net 
assets for that fiscal year of the Portfolio, the Manager will 
reduce its fee to the extent of such excess, or reimburse any such 
excess amount to the relevant Portfolio.  The 0.70% voluntary 
expense limitation shall be in effect until it is terminated by 14 
days' written notice to shareholders and by supplement to the then 
current prospectus. 

Each Portfolio's management agreement will continue in effect 
if specifically approved annually by a majority of the directors of 
the Fund, including a majority of the directors who are not parties 
to such contract or "interested persons" of any such party.  Each 
agreement may be terminated without penalty by either of the 
parties on 60 days' written notice and must terminate in the event 
of its assignment.  It may be amended or modified only if approved 
by vote of the holders of "a majority of the outstanding voting 
securities" of such Portfolio as defined in the Act and Rules 
thereunder which is discussed below under "Voting Rights."

Each agreement provides that the Manager is not liable for 
any act or omission in the course of or in connection with 
rendering services under the agreement in the absence of willful 
misfeasance, bad faith, gross negligence or reckless disregard of 
its obligations or duties. 

   
On April 6, 1998, Travelers announced that it had entered into 
a Merger Agreement with Citicorp.  The transaction, which is 
expected to be completed during the third quarter of 1998, is 
subject to various regulatory approvals, including approval by the 
Federal Reserve Board.  The transaction is also subject to approval 
by the stockholders of each of Travelers and Citicorp.  Upon 
consummation of the merger, the surviving corporation would be a 
bank holding company subject to regulation under the Bank Holding 
Company Act of 1956 (the "BHCA"), the requirements of the Glass-
Steagall Act and certain other laws and regulations.  Although the 
effects of the merger of Travelers and Citicorp and compliance with 
the requirements of the BHCA and the Glass-Steagall Act are still 
under review, MMC does not believe that its compliance with 
applicable law following the merger of Travelers and Citicorp will 
have a material adverse effect on its ability to continue to 
provide the Fund with the same level of investment advisory 
services that it currently receives.
    

Plan of Distribution

The Fund has adopted for each Portfolio a plan of 
distribution pursuant to Rule 12b-1 under the Act (the "Plan") 
under which a service fee is paid by each of Class A and Class C to 
Smith Barney for shares of the Portfolios attributable to Smith 
Barney at an annual rate of 0.10% of such Class A shares' average 
daily net assets.  See "Distributor" in the Prospectus.  In 
addition, the Plan provides for a service fee to be paid to PFS 
Distributors, Inc. by each Class A share held in accounts 
attributable to PFS Distributors, Inc. at an annual rate of 0.10% 
of such Class A shares average daily net assets.

Brokerage

The Manager places orders for the purchase and sale of 
securities for the Portfolios of the Fund.  All of the Fund's 
portfolio transactions have been principal transactions with major 
dealers in money market instruments, on which no brokerage 
commissions are paid.  Purchases from or sales to dealers serving 
as market-makers include the spread between the bid and asked 
prices.  No portfolio transactions are handled by Smith Barney.


VOTING RIGHTS

As permitted by Maryland law, there will normally be no 
meetings of shareholders for the purpose of electing directors 
unless and until such time as less than a majority of the directors 
holding office have been elected by shareholders.  At that time, 
the directors then in office will call  a shareholders' meeting for 
the election of directors.  The directors must call a meeting of 
shareholders for the purpose of voting upon the question of removal 
of any director when requested in writing to do so by the record 
holders of not less than 10% of the outstanding shares of the fund. 
 At such a meeting, a director may be removed after the holders of 
record of not less than a majority of the outstanding shares of the 
Fund have declared that the director be removed either by 
declaration in writing or by votes cast in person or by proxy.  
Except as set forth above, the directors shall continue to hold 
office and may appoint successor directors. 

Rule 18f-2 under the Act provides that any matter required to 
be submitted by the provisions of the Act or applicable state law, 
or otherwise, to the holders of the outstanding voting securities 
of an investment company shall not be deemed to have been 
effectively acted upon unless approved by "vote of a majority of 
the outstanding voting securities" (as defined below) of each 
Portfolio or class affected by the matter.  Rule 18f-2 further 
provides that a Portfolio or class shall be deemed to be affected 
by a matter unless it is clear that the interests of each Portfolio 
or class in a matter are identical or that the matter does not 
affect any interest of the Portfolio or class.  Under the Rule the 
approval of a management agreement or any change in a fundamental 
investment policy would be effectively acted upon with respect to a 
Portfolio only if approved by a majority of the outstanding voting 
securities of the Portfolio affected by the matter.  The Rule, 
however, also provides that the ratification of independent public 
accountants, the election of directors, and the approval of a 
distribution agreement that is submitted to shareholders are not 
subject to the separate voting requirements and may be effectively 
acted upon by a vote of the holders of a majority of all Fund 
shares voting without regard to Portfolio. 

As used in the Prospectus and this Statement of Additional 
Information, a "vote of a majority of the outstanding voting 
securities" means the affirmative vote of the lesser of (a) more 
than 50% of the outstanding shares of the Fund (or the affected 
Portfolio or class) or (b) 67% or more of such shares present at a 
meeting if more than 50% of the outstanding shares of the Fund (or 
the affected Portfolio or class) are represented at the meeting in 
person or by proxy. 

   
Following are the names, addresses and percent of ownership 
of each person who owns of record or is known by the Fund to own of 
record of beneficially 5% or more of any Class of a Portfolio as of 
April 3, 1998:  
    

Cash Portfolio Class C Shares

Frontier Trust Company as TTEE, Laser Technologies Employees 
401K Plan, PO Box 190, Exton, PA, 19341 owned of record 57,691.74 
shares (12.60%);  Frontier Trust Company as TTEE, Mens Apparel 
Guild in California, Attn.: Joe Loggia, 6200 Canoga Avenue, Suite 
303, Woodland Hills, CA 91367, owned of record 57,292.37 shares 
(12.51%);  Frontier Trust Company as TTEE, Greenhill & Co. 401K 
Plan, 31 West 52nd Street, New York, NY 10101 owned of record 
49,140.04 shares (10.73%);  Frontier Trust Company as TTEE, Sioux 
City Tent & Awning Co. Inc., DBA Mullin Awning & Siding 401k Plan, 
811 Steuben Street, Sioux City, IA 51101 owned of record 33,120.24 
shares (7.23%);  Health Partners of Philadelphia Inc., Zubair M. 
Ali, 23 Sumac Court, Newark, DE 19702 owned of record 32,902.68 
shares (7.19%);  Frontier Trust Company as TTEE, Northstar 
Sportswear Company 401K Plan, PO Box 569, Kingston, WA 98346 owned 
of record 32,176.58 shares (7.03%);  Frontier Trust Company as 
TTEE, Peer Bearing Company Union Employees Money Purchase Plan, 241 
W Palatine Road, Wheeling, IL 60090 owned of record 28,031.47 
shares (6.12%); Tanco Engineering Inc. C/O Leggette & Co., Attn.: 
Mary V. Boggs, 4131 N. Central Expressway, Suite 1100, Dallas, TX 
owned of record 27,214.94 shares (5.94%); Frontier Trust Company as 
TTEE, Medford Electrical Contracting Corp., Attn.: John B. 
Giacalone, 1011 Fellsway, Medford, MA  02155 owned of record 
23,701.39 shares (5.18%). 

Cash Portfolio Class Y Shares

Cogen Tech Financial Ser. LP, Attn.: Dick Lydecker, 711 
Louisiana Street, 33rd Floor, Houston, TX 77002 owned of record 
10,000,000.00 shares (20.35%);  Jay Norton Zidell TTEE, FBO Jay 
Norton Zidell Trust, U/A/D 11/01/91, 6900 SE Riverside Drive #27, 
Vancouver, WA 98664 owned of record 8,521,301.07 shares (17.33%); 
Cynthia L. Ulstron, 5141 N. Alto Lane, Oak Harbor, WA  98277 owned 
of record 4,694,705.79 shares (9.55%); Rooke Corp., D/B/A Aviation 
Equipment Inc., Attn.: Jim Shaw V.P./CFO, 7230 Fulton Avenue, North 
Hollywood, CA 91605 owned of record 4,396,561.06 shares (8.94%);  
Patricia E. Rodeheaver TTEE, FBO Patricia E. Rodeheaver U/A/D 
5/11/90, 1 Lakeridge Lane, Warrentown, MO 63383 owned of record 
4,282,787.74 (8.71%); Edward W. Machala, PO Box 568, Exeter, RI 
02822 owned of record 3,013,131.84 (6.13%); QAD Inc., Attn.: 
Treasury, 6450 Via Real, Carpinteria, CA 93013 owned of record 
2,946,028.55 shares (5.99%).

Cash Portfolio Class Z Shares

Citibank NA TTEE, Travelers Group Inc. Master TR, 401K 
Savings Plan, Attn.: Nancy Kronenberg, 111 Wall Street, New York, 
NY 10005 owned of record 2,787,477.55 shares (99.79%).
   
    
Government Portfolio Class C Shares

Jerry L. Calkins, Smith Barney Inc. Rollover Custodian, 8694 
W. 101 Street, Overland Park, KS 66212 owned of record 61,745.47 
shares (25.56%);  Frontier Trust Company as TTEE, Southern Floral 
Company, PO Box 1313, Houston, TX  77251 owned of record 37,261.43 
shares (15.43%);  H. Walker Harris MD, Smith Barney Inc. Rollover 
Custodian, 2860 Cromwell Drive, Columbus, GA 31906 owned of record 
25,138.11 shares (10.41%); Terry Donofrio, Smith Barney Inc. IRA 
Custodian, 21 Glenair Avenue, Waldwick, NJ 07463 owned of record 
22,507.03 shares (9.32%);  Henry N. Hand, 18 Chestnut Oak Drive, 
Cape May Court House, NJ 08210 owned of record 18,074.92 shares 
(7.48%);  James F. Burgess Jr., M. Kathleen Burgess JTWROS, 5901 
Lakeshore Drive, Columbia, SC 29206 owned of record 17,451.50 
shares (7.22%); Ward G. Pennebaker, Smith Barney Inc. Sep. 
Custodian. 7510 Inwood, Houston, TX  77063 owned of record 
16,199.88 shares (6.70%).

Government Portfolio Class Y Shares

Rodney A. Hanes Jr., 364 Laurel Road, New Canaan Court 06840 
owned or record 8,078,970.19 shares (50.95%);  William M. Haber, 54 
Wilton Road, Westport, CT  06880 owned of record 5,453,177.94 
shares (34.39%);  James E. Smith and Jeralyn K. Talcott JTWROS, 
Main Court, 2525 Trumble Creek Road, Kalispell, MT  59901 owned of 
record 1,110,389.27 shares (7.00%).


CUSTODIAN, TRANSFER AND DIVIDEND DISBURSING AGENTS

PNC Bank, National Association, a national banking 
association with offices at 17th and Chestnut Streets, 
Philadelphia, Pennsylvania (the "Custodian") serves as custodian of 
the Fund's investments. First Data Investor Services Group, Inc., 
Exchange Place, Boston, Massachusetts 02109 serves as the Fund's 
dividend disbursing and transfer agent.


INDEPENDENT AUDITORS

KPMG Peat Marwick LLP, 345 Park Avenue, New York, New York 
10154, has been selected as independent auditors for the Fund for 
its fiscal year ending December 31, 1998 to examine and report on 
their examination of the financial statements and financial 
highlights of the Fund.


FINANCIAL STATEMENTS

The following financial information is hereby incorporated by 
reference to the Fund's 1997 Annual Report to Shareholders, a copy 
of which is furnished with this Statement of Additional 
information:


		Pages in
		Annual Report
		
Statements of Assets and Liabilities	
	17 
Statements of Operations  			18
Statement of Changes in Net Assets 	
	19-21
Notes to Financial Statements	
	22-26
Financial Highlights 			27-29
Independent Auditors' Report 	
	30



APPENDIX - SECURITIES RATINGS

BOND (AND NOTES) RATINGS

Moody's Investors Service, Inc.

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

 	Aa - Bonds that are rated "Aa" are judged to be of high 
quality by all standards.  Together with the "Aaa" group they 
comprise what are generally known as high grade bonds.  They 
are rated lower than the best bonds because margins of 
protection may not be as large as in "Aaa" securities or 
fluctuation of protective elements may be of greater 
amplitude or there may be other elements present that make 
the long term risks appear somewhat larger than in "Aaa" 
securities.

	Note: The modifier 1 indicates that the security ranks 
in the higher end of its generic rating category; the 
modifier 2 indicates a mid-range ranking; and the modifier 3 
indicates that the issue ranks in the lower end of its 
generic rating category.

Standard & Poor's Rating Group

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

	AA - Debt rated "AA" has a very strong capacity to pay 
interest and repay principal and differs from the highest 
rated issues only in small degree.

	Plus (+) or Minus (-): The rating of "AA" may be 
modified by the addition of a plus or minus sign to show 
relative standing within the major rating categories.

	Provisional Ratings: The letter "p" indicates that the 
rating is provisional.  A provisional rating assumes the 
successful completion of the project being financed by the 
debt being rated and indicates that payment of debt service 
requirements is largely or entirely dependent upon the 
successful and timely completion of the project.  This 
rating, however, while addressing credit quality subsequent 
to completion of the project, makes no comment on the 
likelihood of, or the risk of default upon failure of, such 
completion.  The investor should exercise judgment with 
respect to such likelihood and risk.

	L - The letter "L" indicates that the rating pertains 
to the principal amount of those bonds where the underlying 
deposit collateral is fully insured by the Federal Savings & 
Loan Insurance Corp. or the Federal Deposit Insurance Corp.

	 - Continuance of the rating is contingent upon S&P's 
receipt of closing documentation confirming investments and 
cash flow.

	* - Continuance of the rating is contingent upon S&P's 
receipt of an executed copy of the escrow agreement.

Fitch IBCA, Inc. 

	AAA - Bonds rated AAA by Fitch have the lowest 
expectation of credit risk.  The obligor has an exceptionally 
strong capacity for timely payment of financial commitments 
which is highly unlikely to be adversely affected by 
foreseeable events.
	AA - Bonds rated AA by Fitch have a very low 
expectation of credit risk.  They indicate very strong 
capacity for timely payment of financial commitments.  This 
capacity is not significantly vulnerable to foreseeable 
events.

	Plus (+) Minus (-): Plus and minus signs are used with 
a rating symbol to indicate the relative position of a credit 
within the rating category.  Plus and minus signs, however, 
are not used in the "AAA" category.

COMMERCIAL PAPER RATINGS

Moody's Investors Service, Inc.

	Issuers rated "Prime-1" (or related supporting 
institutions) have a superior capacity for repayment of 
short-term promissory obligations.  Prime-1 repayment will 
normally be evidenced by the following characteristics: 
leading market positions in well-established industries; high 
rates of return on funds employed; conservative 
capitalization structures with moderated reliance on debt and 
ample asset protection; broad margins in earnings coverage of 
fixed financial changes and high internal cash generation; 
well-established access to a range of financial markets and 
assured sources of alternate liquidity.
	
	Issuers rated "Prime-2" (or related supporting 
institutions) have strong capacity for repayment of short-
term promissory obligations.  This will normally be evidenced 
by many of the characteristics cited above but to a lesser 
degree.  Earnings trends and coverage rations, while sound, 
will be more subject to variation.  Capitalization 
characteristics, while still appropriate, may be more 
affected by external conditions.  Ample alternate liquidity 
is maintained.

Standard & Poor's Ratings Group

	A-1 - This designation indicates that the degree of 
safety regarding timely payment is either overwhelming or 
very strong.  Those issuers determined to possess 
overwhelming safety characteristics will be denoted with a 
plus (+) sign designation.
	A-2 - Capacity for timely payment on issues with this 
designation is strong.  However, the relative degree of 
safety is not as high as for issues designated A-1.

Fitch IBCA, Inc.
	
	Fitch's short-term ratings apply to debt obligations 
that are payable on demand or have original maturities of 
generally up to three years, including commercial paper, 
certificates of deposit, medium-term notes, and municipal and 
investment notes.

	The short-term rating places greater emphasis than a 
long-term rating on the existence of liquidity necessary to 
meet financial commitment in a timely manner.
	
	Fitch's short-term ratings are as follows:

	F1+ - Issues assigned this rating are regarded as 
having the strongest capacity for timely payments of 
financial commitments.  The "+" denotes an exceptionally 
strong credit feature.

	F1 - Issues assigned this rating are regarded as having 
the strongest capacity for timely payment of financial 
commitments.

	F2 - Issues assigned this rating have a satisfactory 
capacity for timely payment of financial commitments, but the 
margin of safety is not as great as in the case of the higher 
ratings.

Duff & Phelps Inc.

	Duff 1+ - Indicates the highest certainty of timely 
payment: short-term liquidity is clearly outstanding, and 
safety is just below risk-free United States Treasury short-
term obligations.
	
	Duff 1 -  Indicates a high certainty of timely payment.

	Duff 2 - Indicates a good certainty of timely payment: 
 liquidity factors and company fundamentals are sound.

The Thompson BankWatch ("TBW")

	TBW-1 - Indicates a very high degree of 
likelihood that principal and interest will be paid on 
a timely basis.

	TBW-2 - while the degree of safety regarding 
timely repayment of principal and interest is strong, 
the relative degree of safety is not as high as for 
issues rated TBW-1.

 

 
 
u:\legal\funds\smfi\1998\secdocs\sai98.doc	20