SMITH BARNEY MONEY FUNDS, INC.

DISTRIBUTION AGREEMENT



									October 8, 1998



CFBDS, Inc.
21 Milk Street
Boston, MA 02109

Dear Sirs:

	This is to confirm that, in consideration of the agreements 
hereinafter contained, the above-named investment company (the "Fund") 
has agreed that you shall be, for the period of this Agreement, the non-
exclusive principal underwriter and distributor of shares of the Fund and 
each Series of the Fund set forth on Exhibit A hereto, as such Exhibit 
may be revised from time to time (each, including any shares of the Fund 
not designated by series, a "Series").  For purposes of this Agreement, 
the term "Shares" shall mean shares of the each Series, or one or more 
Series, as the context may require.

	1.	Services as Principal Underwriter and Distributor

		1.1  You will act as agent for the distribution of Shares 
covered by, and in  accordance with, the registration statement, 
prospectus and statement of additional information then in effect under 
the Securities Act of 1933, as amended (the "1933 Act"), and the 
Investment Company Act of 1940, as amended (the "1940 Act"), and will 
transmit or cause to be transmitted promptly any orders received by you 
or those with whom you have sales or servicing agreements for purchase or 
redemption of Shares to the Transfer and Dividend Disbursing Agent for 
the Fund of which the Fund has notified you in writing.

		1.2  You agree to use your best efforts to solicit orders for 
the sale of Shares.  It is contemplated that you will enter into sales or 
servicing agreements with registered securities dealers and banks and 
into servicing agreements with financial institutions and other industry 
professionals, such as investment advisers, accountants and estate 
planning firms.  In entering into such agreements, you will act only on 
your own behalf as principal underwriter and distributor.  You will not 
be responsible for making any distribution plan or service fee payments 
pursuant to any plans the Fund may adopt or agreements it may enter into.

		1.3  You shall act as principal underwriter and distributor 
of Shares in compliance with all applicable laws, rules, and regulations, 
including, without limitation, all rules and regulations made or adopted 
from time to time by the Securities and Exchange Commission (the "SEC") 
pursuant to the 1933 Act or the 1940 Act or by any securities association 
registered under the Securities Exchange Act of 1934, as amended.

		1.4  Whenever in their judgment such action is warranted for 
any reason, including, without limitation, market, economic or political 
conditions, the Fund's officers may decline to accept any orders for, or 
make any sales of, any Shares until such time as those officers deem it 
advisable to accept such orders and to make such sales and the Fund shall 
advise you promptly of such determination.

2.	Duties of the Fund

2.1	The Fund agrees to pay all costs and expenses in 
connection with the registration of Shares under the 1933 Act, and all 
expenses in connection with maintaining facilities for the issue and 
transfer of Shares and for supplying information, prices and other data 
to be furnished by the Fund hereunder, and all expenses in connection 
with the preparation and printing of the Fund's prospectuses and 
statements of additional information for regulatory purposes and for 
distribution to shareholders; provided however, that nothing contained 
herein shall be deemed to require the Fund to pay any of the costs of 
advertising or marketing the sale of Shares.

		2.2  The Fund agrees to execute any and all documents and to 
furnish any and all information and otherwise to take any other actions 
that may be reasonably necessary in the discretion of the Fund's officers 
in connection with the qualification of Shares for sale in such states 
and other U.S. jurisdictions as the Fund may approve and designate to you 
from time to time, and the Fund agrees to pay all expenses that may be 
incurred in connection with such qualification.  You shall pay all 
expenses connected with your own qualification as a securities broker or 
dealer under state or Federal laws and, except as otherwise specifically 
provided in this Agreement, all other expenses incurred by you in 
connection with the sale of Shares as contemplated in this Agreement.

2.3  The Fund shall furnish you from time to time, for use in 
connection with the sale of Shares, such information reports with respect 
to the Fund or any relevant Series and the Shares as you may reasonably 
request, all of which shall be signed by one or more of the Fund's duly 
authorized officers; and the Fund warrants that the statements contained 
in any such reports, when so signed by the Fund's officers, shall be true 
and correct.  The Fund also shall furnish you upon request with (a) the 
reports of annual audits of the financial statements of the Fund for each 
Series made by independent certified public accountants retained by the 
Fund for such purpose; (b) semi-annual unaudited financial statements 
pertaining to each Series; (c) quarterly earnings statements prepared by 
the Fund; (d) a monthly itemized list of the securities in each Series' 
portfolio; (e) monthly balance sheets as soon as practicable after the 
end of each month; (f)  the current net asset value and  offering price 
per share for each Series on each day such net asset value is computed 
and (g) from time to time such additional information regarding the 
financial condition of each Series of the Fund as you may reasonably 
request.

	3.	Representations and Warranties

	The Fund represents to you that all registration statements, 
prospectuses and statements of additional information filed by the Fund 
with the SEC under the 1933 Act and the 1940 Act with respect to the 
Shares have been prepared in conformity with the requirements of said 
Acts and the rules and regulations of the SEC thereunder.  As used in 
this Agreement, the  terms "registration statement", "prospectus" and 
"statement of additional information" shall mean any registration 
statement, prospectus and statement of additional information filed by 
the Fund with the SEC and any amendments and supplements thereto filed by 
the Fund with the SEC.  The Fund represents and warrants to you that any 
registration statement, prospectus and statement of additional 
information, when such registration statement becomes effective and as 
such prospectus and statement of additional information are amended or 
supplemented, will include at the time of such effectiveness, amendment 
or supplement all statements required to be contained therein in 
conformance with the 1933 Act, the 1940 Act and the rules and regulations 
of the SEC; that all statements of material fact contained in any 
registration statement, prospectus or statement of additional information 
will be true and correct when such registration statement becomes 
effective; and that neither any registration statement nor any prospectus 
or statement of additional information when such registration statement 
becomes effective will include an untrue statement of a material fact or 
omit to state a material fact required to be stated therein or necessary 
to make the statements therein not misleading to a purchaser of the 
Fund's Shares.  The Fund may, but shall not be obligated to, propose from 
time to time such amendment or amendments to any registration statement 
and such supplement or supplements to any prospectus or statement of 
additional information as, in the light of future developments, may, in 
the opinion of the Fund, be necessary or advisable.  If the Fund shall 
not propose such amendment or amendments and/or supplement or supplements 
within fifteen days after receipt by the Fund of a written request from 
you to do so, you may, at your option, terminate this Agreement or 
decline to make offers of the Fund's Shares until such amendments are 
made.  The Fund shall not file any amendment to any registration 
statement or supplement to any prospectus or statement of additional 
information without giving you reasonable notice thereof in advance; 
provided, however, that nothing contained in this Agreement shall in any 
way limit the Fund's right to file at any time such amendments to any 
registration statement and/or supplements to any prospectus or statement 
of additional information, of whatever character, as the Fund may deem 
advisable, such right being in all respects absolute and unconditional.

	4.	Indemnification

		4.1  The Fund authorizes you to use any prospectus or 
statement of additional information furnished by the Fund from time to 
time, in connection with the sale of Shares.  The Fund agrees to 
indemnify, defend and hold you, your several officers and directors, and 
any person who controls you within the meaning of Section 15 of the 1933 
Act, free and harmless from and against any and all claims, demands, 
liabilities and expenses (including the cost of investigating or 
defending such claims, demands or liabilities and any such counsel fees 
incurred in connection therewith) which you, your officers and directors, 
or any such controlling person, may incur under the 1933 Act or under 
common law or otherwise, arising out of or based upon any untrue 
statement, or alleged untrue statement, of a material fact contained in 
any registration statement, any prospectus or any statement of additional 
information or arising out of or based upon any omission, or alleged 
omission, to state a material fact required to be stated in any 
registration statement, any prospectus or any statement of additional 
information or necessary to make the statements in any of them not 
misleading; provided, however, that the Fund's agreement to indemnify 
you, your officers or directors, and any such controlling person shall 
not be deemed to cover any claims, demands, liabilities or expenses 
arising out of any statements or representations made by you or your 
representatives or agents other than such statements and representations 
as are contained in any prospectus or statement of additional information 
and in such financial and other statements as are furnished to you 
pursuant to paragraph 2.3 of this Agreement; and further provided that 
the Fund's agreement to indemnify you and the Fund's representations and 
warranties herein before set forth in paragraph 3 of this Agreement shall 
not be deemed to cover any liability to the Fund or its shareholders to 
which you would otherwise be subject by reason of willful misfeasance, 
bad faith or gross negligence in the performance of your duties, or by 
reason of your reckless disregard of your obligations and duties under 
this Agreement.  The Fund's agreement to indemnify you, your officers and 
directors, and any such controlling person, as aforesaid, is expressly 
conditioned upon the Fund's being notified of any action brought against 
you, your officers or directors, or any such controlling person, such 
notification to be given by letter or by telegram addressed to the Fund 
at its principal office in New York, New York and sent to the Fund by the 
person against whom such action is brought, within ten days after the 
summons or other first legal process shall have been served.  The failure 
so to notify the Fund of any such action shall not relieve the Fund from 
any liability that the Fund may have to the person against whom such 
action is brought by reason of any such untrue, or alleged untrue, 
statement or omission, or alleged omission, otherwise than on account of 
the Fund's indemnity agreement contained in this paragraph 4.1.  The Fund 
will be entitled to assume the defense of any suit brought to enforce any 
such claim, demand or liability, but, in such case, such defense shall be 
conducted by counsel of good standing chosen by the Fund.  In the event 
the Fund elects to assume the defense of any such suit and retains 
counsel of good standing, the defendant or defendants in such suit shall 
bear the fees and expenses of any additional counsel retained by any of 
them; but if the Fund does not elect to assume the defense of any such 
suit, the Fund will reimburse you, your officers and directors, or the 
controlling person or persons named as defendant or defendants in such 
suit, for the fees and expenses of any counsel retained by you or them.  
The Fund's indemnification agreement contained in this paragraph 4.1 and 
the Fund's representations and warranties in this Agreement shall remain 
operative and in full force and effect regardless of any investigation 
made by or on behalf of you, your officers and directors, or any 
controlling person, and shall survive the delivery of any of the Fund's 
Shares.  This agreement of indemnity will inure exclusively to your 
benefit, to the benefit of your several officers and directors, and their 
respective estates, and to the benefit of the controlling persons and 
their successors.  The Fund agrees to notify you promptly of the 
commencement of any litigation or proceedings against the Fund or any of 
its officers or Board members in connection with the issuance and sale of 
any of the Fund's Shares.

		4.2  You agree to indemnify, defend and hold the Fund, its 
several officers and Board members, and any person who controls the Fund 
within the meaning of Section 15 of the 1933 Act, free and harmless from 
and against any and all claims, demands, liabilities and expenses 
(including the costs of investigating or defending such claims, demands 
or liabilities and any counsel fees incurred in connection therewith) 
that the Fund, its officers or Board members or any such controlling 
person may incur under the 1933 Act, or under common law or otherwise, 
but only to the extent that such liability or expense incurred by the 
Fund, its officers or Board members, or such controlling person resulting 
from such claims or demands shall arise out of or be based upon (a) any 
unauthorized sales literature, advertisements, information, statements or 
representations or (b) any untrue, or alleged untrue, statement of a 
material fact contained in information furnished in writing by you to the 
Fund and used in the answers to any of the items of the registration 
statement or in the corresponding statements made in the prospectus or 
statement of additional information, or shall arise out of or be based 
upon any omission, or alleged omission, to state a material fact in 
connection with such information furnished in writing by you to the Fund 
and required to be stated in such answers or necessary to make such 
information not misleading.  Your agreement to indemnify the Fund, its 
officers or Board members, and any such controlling person, as aforesaid, 
is expressly conditioned upon your being notified of any action brought 
against the Fund, its officers or Board members, or any such controlling 
person, such notification to be given by letter or telegram addressed to 
you at your principal office in Boston, Massachusetts and sent to you by 
the person against whom such action is brought, within ten days after the 
summons or other first legal process shall have been served.  You shall 
have the right to control the defense of such action, with counsel of 
your own choosing, satisfactory to the Fund, if such action is based 
solely upon such alleged misstatement or omission on your part or with 
the Fund's consent, and in any event the Fund, its officers or Board 
members or such controlling person shall each have the right to 
participate in the defense or preparation of the defense of any such 
action with counsel of its own choosing reasonably acceptable to you but 
shall not have the right to settle any such action without your consent, 
which will not be unreasonably withheld.  The failure to so notify you of 
any such action shall not relieve you from any liability that you may 
have to the Fund, its officers or Board members, or to such controlling 
person by reason of any such untrue, or alleged untrue, statement or 
omission, or alleged omission, otherwise than on account of your 
indemnity agreement contained in this paragraph 4.2.  You agree to notify 
the Fund promptly of the commencement of any litigation or proceedings 
against you or any of your officers or directors in connection with the 
issuance and sale of any of the Fund's Shares.
		
	5.	Effectiveness of Registration

	No Shares shall be offered by either you or the Fund under any of 
the provisions of this Agreement and no orders for the purchase or sale 
of such Shares under this Agreement shall be accepted by the Fund if and 
so long as the effectiveness of the registration statement then in effect 
or any necessary amendments thereto shall be suspended under any of the 
provisions of the 1933 Act, or if and so long as a current prospectus as 
required by Section 5(b) (2) of the 1933 Act is not on file with the SEC; 
provided, however, that nothing contained in this paragraph 5 shall in 
any way restrict or have an application to or bearing upon the Fund's 
obligation to repurchase its Shares from any shareholder in accordance 
with the provisions of the Fund's prospectus, statement of additional 
information or charter documents, as amended from time to time.

6. Offering Price

Shares of any class of any Series of the Fund offered for sale by 
you shall be offered for sale at a price per share (the "offering 
price") equal to (a) their net asset value (determined in the manner set 
forth in the Fund's charter documents and the then-current prospectus and 
statement of additional information) plus (b) a sales charge, if 
applicable, which shall be the percentage of the offering price of such 
Shares as set forth in the Fund's then-current prospectus relating to 
such Series.  In addition to or in lieu of any sales charge applicable at 
the time of sale, Shares of any class of any Series of the Fund offered 
for sale by you may be subject to a contingent deferred sales charge as 
set forth in the Fund's then-current prospectus and statement of 
additional information.  You shall be entitled to receive any sales 
charge levied at the time of sale in respect of the Shares without 
remitting any portion to the Fund.  Any payments to a broker or dealer 
through whom you sell Shares shall be governed by a separate agreement 
between you and such broker or dealer and the Fund's then-current 
prospectus and statement of additional information 

	
7.	Notice to You

	The Fund agrees to advise you immediately in writing:

		(a)  of any request by the SEC for 
amendments to the registration statement, 
prospectus or statement of additional 
information then in effect or for additional 
information;

		(b)  in the event of the issuance by the 
SEC of any stop order suspending the 
effectiveness of the registration statement, 
prospectus or statement of additional 
information then in effect or the initiation 
of any proceeding for that purpose;

		(c)  of the happening of any event that 
makes untrue any statement of a material fact 
made in the registration statement, prospectus 
or statement of additional information then in 
effect or that requires the making of a change 
in such registration statement, prospectus or 
statement of additional 
	information in order to make the statements 
therein not misleading; and
		
		(d)  of all actions of the SEC with 
respect to any amendment to the registration 
statement, or any supplement to the prospectus 
or statement of additional information which 
may from time to time be filed with the SEC.

	8.	Term of the Agreement

	This Agreement shall become effective on the date hereof, shall 
have an initial term of one year from the date hereof, and shall continue 
for successive annual periods thereafter so long as such continuance is 
specifically approved at least annually by (a) the Fund's Board or (b) by 
a vote of a majority (as defined in the 1940 Act) of the Fund's 
outstanding voting securities, provided that in either event the 
continuance is also approved by a majority of the Board members of the 
Fund who are not interested persons (as defined in the 1940 Act) of any 
party to this Agreement, by vote cast in person at a meeting called for 
the purpose of voting on such approval.  This Agreement is terminable, 
without penalty, on 30 days' notice by the Fund's Board or by vote of 
holders of a majority of the relevant Series outstanding voting 
securities, or on 90 days' notice by you.  This Agreement will also 
terminate automatically, as to the relevant Series, in the event of its 
assignment (as defined in the 1940 Act and the rules and regulations 
thereunder).

9. Arbitration

Any claim, controversy, dispute or deadlock arising under 
this Agreement (collectively, a "Dispute") shall be settled by 
arbitration administered under the rules of the American Arbitration 
Association ("AAA") in New York, New York.  Any arbitration and award 
of the arbitrators, or a majority of them, shall be final and the 
judgment upon the award rendered may be entered in any state or federal 
court having jurisdiction.  No punitive damages are to be awarded.

10.	Miscellaneous

	So long as you act as a principal underwriter and distributor of 
Shares, you shall not perform any services for any entity other than 
investment companies advised or administered by Citigroup Inc. or its 
subsidiaries.  The Fund recognizes that the persons employed by you to 
assist in the performance of your duties under this Agreement may not 
devote their full time to such service and nothing contained in this 
Agreement shall be deemed to limit or restrict your or any of your 
affiliates right to engage in and devote time and attention to other 
businesses or to render services of whatever kind or nature.   This 
Agreement and the terms and conditions set forth herein shall be governed 
by, and construed in accordance with, the laws of the State of New York.

	11.	Limitation of Liability  (Massachusetts business trusts only)

	The Fund and you agree that the obligations of the Fund under this 
Agreement shall not be binding upon any of the Trustees, shareholders, 
nominees, officers, employees or agents, whether past, present or future, 
of the Fund, individually, but are binding only upon the assets and 
property of the Fund, as provided in the Master Trust Agreement.  The 
execution and delivery of this Agreement have been authorized by the 
Trustees and signed by an authorized officer of the Fund, acting as such, 
and neither such authorization by such Trustees nor such execution and 
delivery by such officer shall be deemed to have been made by any of them 
individually or to impose any liability on any of them personally, but 
shall bind only the trust property of the Fund as provided in its Master 
Trust Agreement.

	If the foregoing is in accordance with your understanding, kindly 
indicate your acceptance of this Agreement by signing and returning to us 
the enclosed copy, whereupon this Agreement will become binding on you.

						Very truly yours,
SMITH BARNEY MONEY FUNDS, INC.


						By:  _____________________
						       Authorized Officer

Accepted:

CFBDS, INC.


By:  __________________________
       Authorized Officer

U:\legal\general\forms\dist12b1\SBMoneyFund

EXHIBIT A




Smith Barney Money Funds, Inc.

Cash Portfolio
Government Portfolio
Retirement Portfolio

Page: 3
 
7