SMITH BARNEY MONEY FUNDS, INC. 
                                 CASH PORTFOLIO 
                              GOVERNMENT PORTFOLIO 
  
                            SMITH BARNEY FUNDS, INC. 
                 SHORT-TERM U.S. TREASURY SECURITIES PORTFOLIO 
  
               SUPPLEMENT DATED OCTOBER 7, 1996 TO PROSPECTUSES* 
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  The following supplements and, to the extent inconsistent therewith, 
supersedes the information contained in each Fund's Prospectus under 
"Purchase 
of Shares--Systematic Investment Plan": 
  
  For shareholders purchasing shares of the Fund through the Systematic 
Investment Plan on a monthly basis, the minimum initial investment 
requirement 
for Class A and Class C shares and the minimum subsequent investment 
requirement for all Classes is $25. For shareholders purchasing shares 
of the 
Fund through the Systematic Investment Plan on a quarterly basis, the 
minimum 
initial investment requirement for Class A and Class C shares and the 
minimum 
subsequent investment requirement for all Classes is $50. 
  
                            ---------------------- 
  The following information replaces in its entirety the disclosure in 
the 
Prospectus of each of the funds listed above (each a "Fund") under 
"Purchase of 
Shares--Smith Barney 401(k) Program:" 
  
SMITH BARNEY 401(k) AND EXECCHOICE(TM) PROGRAMS 
  
  Investors may be eligible to participate in the Smith Barney 401(k) 
Program 
or the Smith Barney ExecChoice(TM) Program. To the extent applicable, 
the same 
terms and conditions, which are outlined below, are offered to all plans 
participating ("Participating Plans") in these programs. 
  
  Each Fund offers to Participating Plans Class A shares as an 
investment 
choice under the Smith Barney 401(k) and ExecChoice(TM) Programs, 
provided the 
Participating Plan makes an initial investment of $1,000,000 or more of 
Class A 
shares of one or more funds of the Smith Barney Mutual Funds. Class A 
shares 
acquired through the Participating Plans are subject to the same service 
and/or 
distribution fees as the Class A shares acquired by other investors; 
however, 
they are not subject to any initial sales charge or contingent deferred 
sales 
charge ("CDSC"). 
  
  Existing 401(k) Plans Investing in Class C shares. Class C shares of 
the Fund 
are not available for purchase by Participating Plans opened on or after 
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June 21, 1996, but may continue to be purchased by any Participating 
Plan 
opened prior to such date and originally investing in such Class. Class 
C 
shares acquired are not subject to any sales charge or CDSC. 
  
  In any year after the date a Participating Plan enrolled in the Smith 
Barney 
401(k) Program, if its total Class C holdings in all non-money market 
Smith 
Barney Mutual Funds equal at least $500,000 as of the calendar year-end, 
the 
Participating Plan will be offered the opportunity to exchange all of 
its Class 
C shares for Class A shares of a Fund. Such Plans will be notified in 
writing 
within 30 days after the last business day of the calendar year and, 
unless the 
exchange offer has been rejected in writing, the exchange will occur on 
or 
about the last business day of the following March. 
  
  Any Participating Plan that has not previously qualified for an 
exchange into 
Class A shares will be offered the opportunity to exchange all of its 
Class C 
shares for Class A shares of a Fund, regardless of asset size, at the 
end of 
the eighth year after the date the Participating Plan enrolled in the 
Smith 
Barney 401(k) Program or the Smith Barney ExecChoiceTM Program. Such 
Participating Plans will be notified of the pending exchange in writing 
approximately 60 days before the eighth anniversary of the enrollment 
date and, 
unless the exchange has been rejected in writing, the exchange will 
occur on or 
about the eighth anniversary date. Once an exchange has occurred, a 
Participating Plan will not be eligible to acquire additional Class C 
shares of 
the Fund but instead may acquire Class A shares of the Fund. Any Class C 
shares 
not converted will continue to be subject to the distribution fee. 
  
  Participating Plans wishing to acquire shares of a Fund through the 
Smith 
Barney 401(k) Program or the Smith Barney ExecChoice(TM) Program must 
purchase 
such shares directly from the Transfer Agent. For further information 
regarding 
these Programs, investors should contact a Smith Barney Financial 
Consultant. 
  
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* Prospectuses dated: 
  
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<S>                               <C> 
Smith Barney Money Funds, Inc.-- 
    Cash Portfolio                February 16, 1996 
  Government Portfolio            February 16, 1996 
Smith Barney Funds, Inc.-- 
    Short-Term U.S. Treasury 
    Securities Portfolio          April 1, 1996 
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FD01213 10/96