<PAGE>


                   The Cash Management Trust of America/(R)/
                  The U.S. Treasury Money Fund of America/SM/
                    The Tax-Exempt Money Fund of America/SM/

                                   Prospectus

<TABLE>
<CAPTION>
         TABLE OF CONTENTS
-----------------------------------------------------
<S>      <S>
   1      Risk/Return Summary
-----------------------------------------------------
   6      Fees and Expenses of the Funds
-----------------------------------------------------
   8      Investment Objective, Strategies and Risks
-----------------------------------------------------
   9      Management and Organization
-----------------------------------------------------
  10      Shareholder Information
-----------------------------------------------------
  11      Choosing a Share Class
-----------------------------------------------------
  13      Purchase and Exchange of Shares
-----------------------------------------------------
  14      Sales Charges
-----------------------------------------------------
  15      Sales Charge Waivers
-----------------------------------------------------
  15      Plans of Distribution
-----------------------------------------------------
  16      How to Sell Shares
-----------------------------------------------------
  18      Distributions and Taxes
-----------------------------------------------------
  19      Financial Highlights
-----------------------------------------------------
</TABLE>

                                 MARCH 15, 2001


 THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED
 OR DISAPPROVED OF THESE SECURITIES. FURTHER, IT HAS NOT DETERMINED THAT THIS
 PROSPECTUS IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS
 A CRIMINAL OFFENSE.

<PAGE>



<PAGE>

 RISK/RETURN SUMMARY

 The funds provide you an opportunity to earn income on your cash reserves (free
 from federal income tax in the case of Tax-Exempt Money Fund) while preserving
 the value of your investment and maintaining liquidity.  The Cash Management
 Trust seeks to achieve this objective by investing primarily in high quality
 money market instruments such as commercial paper and commercial bank
 obligations; U.S. Treasury Money Fund by investing exclusively in U.S. Treasury
 securities; and Tax-Exempt Money Fund by investing primarily in securities that
 are exempt from regular federal income tax (the fund may, however, invest in
 securities that would subject you to alternative minimum taxes).

 Your investment in the funds is not a bank deposit and is not insured or
 guaranteed by the Federal Deposit Insurance Corporation or any other government
 agency, entity or person.

 ALTHOUGH THE FUNDS ATTEMPT TO MAINTAIN A CONSTANT NET ASSET VALUE OF $1.00 PER
 SHARE, THERE CAN BE NO GUARANTEE THAT THE FUNDS WILL BE ABLE TO DO SO, AND YOU
 MAY LOSE MONEY BY INVESTING IN THE FUNDS.


                                       1

                                                 MONEY MARKET FUNDS / PROSPECTUS

<PAGE>

 HISTORICAL INVESTMENT RESULTS

 The following information provides some indication of the risks of investing in
 the funds by showing changes in the funds' investment results from year to year
 and by showing how the funds' average annual returns for various periods
 compare with those of a broad measure of market performance. Past results are
 not an indication of future results.

                              CASH MANAGEMENT TRUST

                 CALENDAR YEAR TOTAL RETURNS FOR CLASS A SHARES

 [bar chart]
 1001   5.51%
 1992   3.14%
 1993   2.54%
 1994   3.66%
 1995   5.50%
 1996   4.93%
 1997   5.11%
 1998   5.05%
 1999   4.68%
 2000   5.92%
 [end bar chart]

    The fund's highest/lowest quarterly results during this time period were:

<TABLE>
<CAPTION>
        <S>                          <C>    <C>
        HIGHEST                      1.58%  (quarter ended March 31, 1991)
        LOWEST                       0.62%  (quarter ended June 30, 1993)
</TABLE>


                                       2

MONEY MARKET FUNDS / PROSPECTUS



<PAGE>

                            U.S. TREASURY MONEY FUND
                 CALENDAR YEAR TOTAL RETURNS FOR CLASS A SHARES
 [bar chart]
 1992   3.05%
 1993   2.48%
 1994   3.36%
 1995   5.03%
 1996   4.59%
 1997   4.75%
 1998   4.44%
 1999   4.11%
 2000   5.30%
 [end bar chart]


    The fund's highest/lowest quarterly results during this time period were:

<TABLE>
<CAPTION>
        <S>               <C>    <C>
        HIGHEST           1.38%  (quarter ended September 30, 2000)
        LOWEST            0.60%  (quarter ended June 30, 1993)
</TABLE>


                                       3

                                                 MONEY MARKET FUNDS / PROSPECTUS

<PAGE>

                              TAX-EXEMPT MONEY FUND
                 CALENDAR YEAR TOTAL RETURNS FOR CLASS A SHARES
 [bar chart]
 1991   4.17%
 1992   2.51%
 1993   1.83%
 1994   2.23%
 1995   3.21%
 1996   2.85%
 1997   3.00%
 1998   2.83%
 1999   2.60%
 2000   3.50%
 [end bar chart]

    The fund's highest/lowest quarterly results during this time period were:

<TABLE>
<CAPTION>
        <S>             <C>    <C>
        HIGHEST         1.14%  (quarter ended March 31, 1991)
        LOWEST          0.42%  (quarter ended March 31, 1994)
</TABLE>


                                       4

MONEY MARKET FUNDS / PROSPECTUS



<PAGE>



 All fund results in the table below reflect the reinvestment of dividend and
 capital gain distributions. Since Cash Management Trust's Class B shares began
 investment operations on March 15, 2000 and Class C and F shares began
 investment operations on March 15, 2001, comparable results are not available
 for the 2000 calendar year. U.S. Treasury Money Fund and Tax-Exempt Money Fund
 only offer Class A shares.

<TABLE>
<CAPTION>
 AVERAGE ANNUAL TOTAL RETURN FOR PERIODS ENDED DECEMBER 31, 2000:
                            ONE       FIVE      TEN                    7-DAY
                            YEAR     YEARS     YEARS     LIFETIME      YIELD
 <S>                      <C>       <C>       <C>       <C>          <C>
 CASH MANAGEMENT TRUST
 Class A - began 11/3/76
 (with no sales charge
 imposed)                  5.92%     5.14%     4.60%       7.28%       5.94%
 U.S. TREASURY MONEY
 FUND
 Class A - began 2/1/91
 (with no sales charge     5.30%     4.64%      N/A        4.22%       5.12%
 imposed)
 ------------------------------------------------------------------------------
 TAX-EXEMPT MONEY FUND
 Class A - began
 10/24/89
 (with no sales charge     3.50%     2.95%     2.87%       3.14%       3.69%
 imposed)
 ------------------------------------------------------------------------------
 For current yield information, please call American FundsLine at
 1-800-325-3590.
</TABLE>



                                       5

                                                 MONEY MARKET FUNDS / PROSPECTUS

<PAGE>

 FEES AND EXPENSES OF THE FUNDS

 SHAREHOLDER FEES (PAID DIRECTLY FROM YOUR INVESTMENT)

<TABLE>
<CAPTION>
                                                      CLASS A  CLASS B   CLASS C    CLASS F
 -------------------------------------------------------------------------------------------
 <S>                                                  <C>      <C>       <C>       <C>
 Maximum sales charge imposed on purchases (as a       none     none      none       none
 percentage of offering price)
 -------------------------------------------------------------------------------------------
 Maximum sales charge imposed on reinvested            none     none      none       none
 dividends
 -------------------------------------------------------------------------------------------
 Maximum deferred sales charge                         none     5.00%/1/  1.00%/2/   none
 -------------------------------------------------------------------------------------------
 Redemption or exchange fees                           none     none      none       none
 -------------------------------------------------------------------------------------------
</TABLE>
 1 Deferred sales charges are reduced after 12 months and eliminated after six
  years.
 2 Deferred sales charge is eliminated after 12 months.

<TABLE>
<CAPTION>
 ANNUAL FUND OPERATING EXPENSES (DEDUCTED FROM FUND ASSETS)
 ------------------------------------------------------------------------------
                                  CLASS A  CLASS B/1/  CLASS C/2/   CLASS F/2/
 ------------------------------------------------------------------------------
 <S>                              <C>      <C>         <C>         <C>
 CASH MANAGEMENT TRUST
 ------------------------------------------------------------------------------
 Management Fees                   0.28%     0.28%       0.28%        0.28%
 Distribution and/or Service
 (12b-1) Fees/3/                   0.08%     0.90%       1.00%        0.25%
 Other Expenses                    0.25%     0.25%       0.26%        0.24%
 Total Annual Fund Operating
 Expenses                          0.61%     1.43%       1.54%        0.77%
 U.S. TREASURY MONEY FUND


 ------------------------------------------------------------------------------
 Management Fees                   0.30%      N/A         N/A          N/A
 Distribution and/or Service
 (12b-1) Fees/3/                   0.10%      N/A         N/A          N/A
 Other Expenses                    0.22%      N/A         N/A          N/A
 Total Annual Fund Operating
 Expenses                          0.62%      N/A         N/A          N/A
 TAX-EXEMPT MONEY FUND


 ------------------------------------------------------------------------------
 Management Fees                   0.39%      N/A         N/A          N/A
 Distribution and/or Service
 (12b-1) Fees/3/                   0.04%      N/A         N/A          N/A
 Other Expenses                    0.21%      N/A         N/A          N/A
 Total Annual Fund Operating       0.64%      N/A         N/A          N/A
 Expenses
 ------------------------------------------------------------------------------
</TABLE>

 1 Annualized.
 2 Based on estimated amounts for the current fiscal year.
 3 Class A and F 12b-1 fees may not exceed 0.15% and 0.50%, respectively, of the
  class' average net assets annually.


                                       6

MONEY MARKET FUNDS / PROSPECTUS



<PAGE>

 EXAMPLE

 The examples below are intended to help you compare the cost of investing in
 the funds with the cost of investing in other mutual funds. The examples assume
 that you invest $10,000 in each fund for the time periods indicated, that your
 investment has a 5% return each year and that each fund's operating expenses
 remain the same as shown above.  The "Class A" example reflects the maximum
 initial sales charge in the first year. The "Class B- and Class C-assuming
 redemption" examples reflect applicable contingent deferred sales charges
 through six years and one year, respectively (after which times they are
 eliminated). The examples do not include fees charged by financial
 intermediaries, typically applicable mainly to Class F shares. Both Class B
 examples reflect Class A expenses for years 9 and 10 since Class B shares
 automatically convert to Class A after eight years. Although your actual costs
 may be higher or lower, based on these assumptions, your cumulative expenses
 would be:

<TABLE>
<CAPTION>
                             ONE YEAR          THREE YEARS          FIVE YEARS           TEN YEARS
 ------------------------------------------------------------------------------------------------------
 <S>                     <C>               <C>                  <C>                 <C>
 CASH MANAGEMENT TRUST
 ------------------------------------------------------------------------------------------------------
 Class A                       $ 62               $195                 $340               $  762
 ------------------------------------------------------------------------------------------------------
 Class B - assuming
 redemption                    $646               $852                 $982               $1,489
 Class B - assuming no         $146               $452                 $782               $1,489
 redemption
 ------------------------------------------------------------------------------------------------------
 Class C - assuming
 redemption                    $257               $486                 $839               $1,834
 Class C - assuming no         $157               $486                 $839               $1,834
 redemption
 ------------------------------------------------------------------------------------------------------
 Class F - excludes            $ 79               $246                 $428               $  954
 intermediary fees/*/
 ------------------------------------------------------------------------------------------------------
 U.S. TREASURY MONEY
 FUND
 ------------------------------------------------------------------------------------------------------
 Class A                       $ 63               $199                 $346               $  774
 ------------------------------------------------------------------------------------------------------
 TAX-EXEMPT MONEY FUND
 ------------------------------------------------------------------------------------------------------
 Class A                       $ 65               $205                 $357               $  798
 ------------------------------------------------------------------------------------------------------
 /* /Fees charged by financial intermediaries are independent of fund expenses and will increase the
  overall cost of your investment.  Intermediary fees typically range from 0.50% to 3.00% of assets
  annually depending on services offered.
</TABLE>




                                       7

                                                 MONEY MARKET FUNDS / PROSPECTUS

<PAGE>

 INVESTMENT OBJECTIVE, STRATEGIES AND RISKS

 The investment objective of each fund is to provide you with a way to earn
 income on your cash reserves (exempt from federal income tax in the case of
 Tax-Exempt Money Fund) while preserving capital and maintaining liquidity.

 CASH MANAGEMENT TRUST

 Normally, the fund invests substantially in high quality money market
 instruments such as commercial paper, commercial bank obligations, savings
 association obligations, U.S. or Canadian government securities, and short-term
 corporate bonds and notes. These securities may have credit and liquidity
 enhancements. Changes in the credit quality of banks and financial institutions
 providing these enhancements could cause the fund to experience a loss and may
 affect its share price. In addition, the fund may invest in securities issued
 by non-U.S. entities or in securities with credit and liquidity support
 features provided by non-U.S. entities. These securities may be affected by
 unfavorable political, economic, or governmental developments that could affect
 the repayment of principal or the payment of interest. Securities of U.S.
 issuers with substantial operations outside the U.S. may also be subject to
 similar risks.

 U.S. TREASURY MONEY FUND

 The fund's portfolio consists entirely of U.S. Treasury securities, which are
 guaranteed by the United States government. These securities are generally
 affected by changes in the level of interest rates. For example, the value of
 U.S. Treasury securities generally will decline when interest rates rise and
 vice versa. A security backed by the U.S. Treasury or the full faith and credit
 of the United States is guaranteed only as to the timely payment of interest
 and principal when held to maturity. Accordingly, the current market prices for
 such securities are not guaranteed and will fluctuate.

 TAX-EXEMPT MONEY FUND

 Normally, the fund invests substantially in high quality money market
 instruments that are issued by states, territories or possessions of the United
 States and the District of Columbia, and their political subdivisions, agencies
 and instrumentalities, that are exempt from regular federal income tax.
 However, the fund may purchase securities that would subject you to federal
 alternative minimum tax. The fund may also invest in municipal securities that
 are supported by credit and liquidity enhancements. Changes in the credit
 quality of banks and financial institutions providing these enhancements could
 cause the fund to experience a loss and may affect its share price. In
 addition, the fund may invest a substantial portion of its portfolio in taxable
 short-term debt securities in response to abnormal market conditions (which may
 detract from achievement of the fund's objective over the short term).




                                       8

MONEY MARKET FUNDS / PROSPECTUS



<PAGE>

 Each fund relies on the professional judgment of its investment adviser,
 Capital Research and Management Company, to make decisions about the fund's
 investments.

 MANAGEMENT AND ORGANIZATION

 INVESTMENT ADVISER

 Capital Research and Management Company, an experienced investment management
 organization founded in 1931, serves as investment adviser to the funds and
 other funds, including those in The American Funds Group. Capital Research and
 Management Company, a wholly owned subsidiary of The Capital Group Companies,
 Inc., is headquartered at 333 South Hope Street, Los Angeles, CA 90071. Capital
 Research and Management Company manages the investment portfolio and business
 affairs of the funds. The total management fee paid by the funds, as a
 percentage of average net assets, for the previous fiscal year appears earlier
 under "Fees and Expenses of the Funds."


                                       9

                                                 MONEY MARKET FUNDS / PROSPECTUS

<PAGE>

 SHAREHOLDER INFORMATION

 SHAREHOLDER SERVICES

 American Funds Service Company, the funds' transfer agent, offers you a wide
 range of services you can use to alter your investment program should your
 needs and circumstances change. These services may be terminated or modified at
 any time upon 60 days written notice. For your convenience, American Funds
 Service Company has four service centers across the country.

                  AMERICAN FUNDS SERVICE COMPANY SERVICE AREAS
                    Call toll-Free from anywhere in the U.S.
                               (8 a.m. to 8 p.m. ET):
                                   800/421-0180

                             [map of the United States]

<TABLE>
<CAPTION>
<S>                <C>                 <C>                    <C>
Western            Western Central     Eastern Central        Eastern
Service Center     Service Center      Service Center         Service Center
American Funds     American Funds      American Funds         American Funds
Service Company    Service Company     Service Company        Service Company
P.O. Box 2205      P.O. Box 659522     P.O. Box 6007          P.O. Box 2280
Brea, California   San Antonio, Texas  Indianapolis, Indiana  Norfolk, Virginia
92822-2205         78265-9522          46206-6007             23501-2280
Fax: 714/671-7080  Fax: 210/474-4050   Fax: 317/735-6620      Fax: 757/670-4773
</TABLE>



 A MORE DETAILED DESCRIPTION OF POLICIES AND SERVICES IS INCLUDED IN THE FUNDS'
 STATEMENT OF ADDITIONAL INFORMATION AND THE OWNER'S GUIDE SENT TO NEW AMERICAN
 FUNDS SHAREHOLDERS TITLED "WELCOME TO THE FAMILY." Both are available by
 writing or calling American Funds Service Company.


                                       10

MONEY MARKET FUNDS / PROSPECTUS



<PAGE>

 CHOOSING A SHARE CLASS

 Cash Management Trust offers four different classes of shares. (U.S. Treasury
 Money Fund and Tax-Exempt Money Fund only offer Class A shares).  Each share
 class represents investments in the same portfolio of securities, but each
 class has its own sales charge and expense structure, allowing you to choose
 the class that best meets your situation.

 Shares of each fund may be purchased through various investment programs or
 accounts, including many types of retirement plans.  The services or share
 classes available to you may vary depending upon how you wish to purchase
 shares of the fund.  However, Tax-Exempt Money Fund is not available for
 investment by retirement plans.

 Factors you should consider in choosing a class of shares include:

 . Class B and C shares of Cash Management Trust generally are not available to
  certain retirement plans, including employer-sponsored retirement plans such
  as 401(k) plans, employer-sponsored 403(b) plans, and money purchase pension
  and profit sharing plans.

 . Class B and C shares of Cash Management Trust may be acquired only by
  exchanging from Class B and C shares of other American Funds.  See "Purchase
  and Exchange of Shares."

 . Class F shares are generally only available to fee-based programs of
  investment firms and registered investment advisers that have special
  agreements with the fund's distributor.

 EACH INVESTOR'S FINANCIAL CONSIDERATIONS ARE DIFFERENT.  YOU SHOULD SPEAK WITH
 YOUR FINANCIAL ADVISER TO HELP YOU DECIDE WHICH SHARE CLASS IS BEST FOR YOU.


                                       11

                                                 MONEY MARKET FUNDS / PROSPECTUS

<PAGE>

 SUMMARY OF THE PRIMARY DIFFERENCES AMONG SHARE CLASSES
<TABLE>
<CAPTION>
  CLASS A SHARES
 ------------------------------------------------------------------------------
 <S>                          <S>
  Initial sales charge         none
  Contingent deferred sales    none
  charge
  12b-1 fees                   up to 0.15% annually
  Dividends                    higher than other classes due to lower annual
                               expenses
  Purchase maximum             none
  Conversion                   none
  CLASS B SHARES
 ------------------------------------------------------------------------------
  Initial sales charge         none
  Contingent deferred sales    starts at 5.00% and declines each year until it
  charge                       reaches 0% after six years
  12b-1 fees                   0.90% annually
  Dividends                    lower than Class A and F shares due to higher
                               distribution fees and other expenses
  Purchase maximum             direct purchases of Class B shares of Cash
                               Management Trust are not permitted
  Conversion                   automatic conversion to Class A shares after
                               eight years, reducing future annual expenses
  CLASS C SHARES
 ------------------------------------------------------------------------------
  Initial sales charge         none
  Contingent deferred sales    1.00% if shares are sold within one year after
  charge                       being purchased
  12b-1 fees                   1.00% annually
  Dividends                    lower than Class A and F shares due to higher
                               distribution fees and other expenses
  Purchase maximum             direct purchases of Class C shares of Cash
                               Management Trust are not permitted
  Conversion                   automatic conversion to Class F shares after ten
                               years, reducing future annual expenses
  CLASS F SHARES
 ------------------------------------------------------------------------------
  Initial sales charge         none
  Contingent deferred sales    none
  charge
  12b-1 fees                   currently 0.25% annually (may not exceed 0.50%
                               annually)
  Dividends                    higher than Class B and C shares due to lower
                               distribution fees, but typically lower than
                               Class A shares due to higher other expenses
  Purchase maximum             none
  Conversion                   none
 ------------------------------------------------------------------------------
</TABLE>




                                       12

MONEY MARKET FUNDS / PROSPECTUS



<PAGE>

 PURCHASE AND EXCHANGE OF SHARES

 PURCHASE OF CLASS A, B AND C SHARES

 Generally, you may open an account and purchase Class A shares by contacting
 any investment dealer (who may impose transaction charges in addition to those
 described in this prospectus) authorized to sell each fund's shares. You may
 purchase additional shares in various ways, including through your investment
 dealer and by mail, telephone, the Internet and bank wire.  Class B and C
 shares of Cash Management Trust may be acquired only by exchanging from Class B
 and C shares of other American Funds.  Direct purchases of Class B and C shares
 of Cash Management Trust are not permitted.

 PURCHASE OF CLASS F SHARES

 Generally, you may only open an account and purchase Class F shares of Cash
 Management Trust through fee-based programs of investment firms and registered
 investment advisers with special agreements with the fund's distributor. These
 firms and advisers typically charge ongoing fees for services they provide.

 EXCHANGE

 Generally, you may only exchange your shares into shares of the same class of
 other funds in The American Funds Group without a sales charge. However,
 exchanges from Class A shares of Cash Management Trust may be made to Class B
 and C shares for dollar cost averaging purposes.  For purposes of computing the
 contingent deferred sales charge on Class B and C shares, the length of time
 you have owned your shares will be measured from the date of original purchase
 and will not be affected by any exchange.

 Exchanges of shares from the money market funds initially purchased without a
 sales charge generally will be subject to the appropriate sales charge.
 Exchanges have the same tax consequences as ordinary sales and purchases. See
 "Transactions by Telephone..." for information regarding electronic exchanges.

 THE FUNDS AND AMERICAN FUNDS DISTRIBUTORS, EACH FUND'S DISTRIBUTOR, RESERVE THE
 RIGHT TO REJECT ANY PURCHASE ORDER FOR ANY REASON, INCLUDING PURCHASES WHICH
 ARE PART OF EXCHANGE ACTIVITY THAT COULD INVOLVE ACTUAL OR POTENTIAL HARM TO
 THE FUNDS.


<TABLE>
<CAPTION>
 PURCHASE MINIMUMS FOR ALL CLASSES OF SHARES
 <S>                                                           <C>
 To establish an account (including retirement plan accounts)   $  1,000
   For a retirement plan account through payroll deduction      $     25
 To add to an account                                           $     50
   For a retirement plan account through payroll deduction      $     25
 ------------------------------------------------------------------------
 PURCHASE MAXIMUM FOR CLASS B SHARES                            $100,000
 ------------------------------------------------------------------------
 PURCHASE MAXIMUM FOR CLASS C SHARES                            $500,000
 ------------------------------------------------------------------------
</TABLE>



                                       13

                                                 MONEY MARKET FUNDS / PROSPECTUS

<PAGE>

 SHARE PRICE

 Each fund calculates its share price, also called net asset value, as of
 approximately 4:00 p.m. New York time, which is the normal close of trading on
 the New York Stock Exchange, every day the Exchange is open. In calculating net
 asset value, market prices are used when available. Each fund has adopted
 procedures to make "fair value" determinations when reliable market prices for
 particular securities are not available.

 Your shares will be purchased at the net asset value (plus any applicable sales
 charge in the case of Class A shares), or sold at the net asset value next
 determined after American Funds Service Company receives and accepts your
 request. A contingent deferred sales charge may apply at the time you sell
 certain Class A, B and C shares.

 SALES CHARGES

 CLASS A

 Class A shares of the money market funds are sold without an initial sales
 charge.  However, if shares of any money market fund are exchanged for shares
 of another fund in The American Funds Group, the sales charge applicable to the
 other fund may apply.

 CLASS B AND C

 Class B and C shares are sold without any initial sales charge. For Class C
 shares, a contingent deferred sales charge of 1% applies if shares are sold
 within one year of purchase.  For Class B shares, a contingent deferred sales
 charge may be applied to shares you sell within six years of purchase, as shown
 in the table below.

<TABLE>
<CAPTION>
 <S>                               <C>  <C>  <C>  <C>  <C>  <C>
 CLASS B SHARES SOLD WITHIN YEAR   1    2    3    4    5     6
 ----------------------------------------------------------------
 CONTINGENT DEFERRED SALES CHARGE  5%   4%   4%   3%   2%    1%
</TABLE>

 Shares acquired through reinvestment of dividends or capital gain distributions
 are not subject to a contingent deferred sales charge.  In addition, the
 contingent deferred sales charge may be waived in certain circumstances.  See
 "Contingent Deferred Sales Charge Waivers for Class B and C Shares" below.  The
 contingent deferred sales charge is based on the original purchase cost or the
 current market value of the shares being sold, whichever is less.  For purposes
 of determining the contingent deferred sales charge, if you sell only some of
 your shares, shares that are not subject to any contingent deferred sales
 charge will be sold first and then shares that you have owned the longest.

 See "Plans of Distribution" below for ongoing compensation paid to your dealer
 or financial adviser for all share classes.


                                       14

MONEY MARKET FUNDS / PROSPECTUS



<PAGE>

 CONVERSION OF CLASS B AND C SHARES

 Class B shares automatically convert to Class A shares in the month of the
 eight-year anniversary of the purchase date.  Class C shares automatically
 convert to Class F shares in the month of the ten-year anniversary of the
 purchase date.  The Internal Revenue Service currently takes the position that
 these automatic conversions are not taxable. Should their position change,
 shareholders would still have the option of converting but may face certain tax
 consequences.

 SALES CHARGE WAIVERS

 You must let your investment dealer or American Funds Service Company know if
 you qualify for a waiver of your Class B or C contingent deferred sales charge.

 CONTINGENT DEFERRED SALES CHARGE WAIVERS FOR CLASS B AND C SHARES

 The contingent deferred sales charge on Class B and C shares may be waived in
 the following cases:

 . when receiving payments through systematic withdrawal plans (up to 12% of the
  value of each fund account);

 . when receiving required minimum distributions from retirement accounts upon
  reaching age 70 1/2; or

 . for redemptions due to death or post-purchase disability of the shareholder.

 PLANS OF DISTRIBUTION

 Each fund has Plans of Distribution or "12b-1 Plans" under which it may finance
 activities primarily intended to sell shares, provided the categories of
 expenses are approved in advance by each fund's board of trustees. The plans
 provide for annual expenses of up to 0.15% for Class A shares, and for Cash
 Management Trust only, 0.90% for Class B shares, 1.00% for Class B and C
 shares, and up to 0.50% for Class F shares. A portion (up to 0.15% for Class A
 and B shares and 0.25% for Class C and F shares) of these expenses may be used
 to pay service fees to qualified dealers for providing certain shareholder
 services.  The remaining expense for each share class may be used for
 distribution expenses.

 The 12b-1 fees paid by each fund, as a percentage of average net assets, for
 the previous fiscal year are indicated earlier under "Fees and Expenses of the
 Funds." Since these fees are paid out of each fund's assets or income on an
 ongoing basis, over time they will increase the cost and reduce the return of
 an investment. The higher fees for Class B and C shares may cost you more over
 time than paying the initial sales charge for Class A shares.

 OTHER COMPENSATION TO DEALERS

 American Funds Distributors may pay, or sponsor informational meetings for,
 dealers as described in the statement of additional information.


                                       15

                                                 MONEY MARKET FUNDS / PROSPECTUS

<PAGE>

 HOW TO SELL SHARES

 Once a sufficient period of time has passed to reasonably assure that checks or
 drafts (including certified or cashiers' checks) for shares purchased have
 cleared (normally 15 calendar days), you may sell (redeem) those shares in any
 of the following ways:

 THROUGH YOUR DEALER OR FINANCIAL ADVISER (CERTAIN CHARGES MAY APPLY)

 . Shares held for you in your dealer's name must be sold through the dealer.

 . Class F shares must be sold through your dealer or financial adviser.

 WRITING TO AMERICAN FUNDS SERVICE COMPANY

 . Requests must be signed by the registered shareholder(s).

 . A signature guarantee is required if the redemption is:

     -- Over $50,000;

     -- Made payable to someone other than the registered shareholder(s); or

     -- Sent to an address other than the address of record, or an address of
      record which has been changed within the last 10 days.

 . American Funds Service Company reserves the right to require signature
  guarantee(s) on any redemptions.

 . Additional documentation may be required for sales of shares held in
  corporate, partnership or fiduciary accounts.

 CHECK WRITING

 . Checks must be signed by the authorized number of registered shareholders
  exactly as indicated on your checking account signature card.

 . Check writing is not available for Class B, C and F shares of Cash Management
  Trust.

 TELEPHONING OR FAXING AMERICAN FUNDS SERVICE COMPANY, OR BY USING AMERICAN
 FUNDSLINE/(R)/ OR AMERICAN FUNDSLINE ONLINE/(R)/:

 . Redemptions by telephone, fax, or computer (including American FundsLine and
  American FundsLine OnLine) are limited to $50,000 per shareholder each day.

 . Checks must be made payable to the registered shareholder.

 . Checks must be mailed to an address of record that has been used with the
  account for at least 10 days.


                                       16

MONEY MARKET FUNDS / PROSPECTUS



<PAGE>

 TRANSACTIONS BY TELEPHONE, FAX, AMERICAN FUNDSLINE OR FUNDSLINE ONLINE

 Generally, you are automatically eligible to use these services for redemptions
 and exchanges unless you notify us in writing that you do not want any or all
 of these services. You may reinstate these services at any time.

 Unless you decide not to have telephone, fax, or computer services on your
 account(s), you agree to hold each fund, American Funds Service Company, any of
 its affiliates or mutual funds managed by such affiliates, and each of their
 respective directors, trustees, officers, employees and agents harmless from
 any losses, expenses, costs or liabilities (including attorney fees) which may
 be incurred in connection with the exercise of these privileges, provided
 American Funds Service Company employs reasonable procedures to confirm that
 the instructions received from any person with appropriate account information
 are genuine. If reasonable procedures are not employed, it and/or each fund may
 be liable for losses due to unauthorized or fraudulent instructions.


                                       17

                                                 MONEY MARKET FUNDS / PROSPECTUS

<PAGE>

 DISTRIBUTIONS AND TAXES

 DIVIDENDS AND DISTRIBUTIONS

 Each fund declares dividends from net investment income daily and distributes
 the accrued dividends, which may fluctuate, to shareholders each month.
  Dividends begin accruing one day after payment for shares is received by the
 fund or American Funds Service Company.

 You may elect to reinvest dividends and/or capital gain distributions to
 purchase additional shares of these funds or any other American Fund, or you
 may elect to receive them in cash. Most shareholders do not elect to take
 capital gain distributions in cash because these distributions reduce principal
 value.

 TAXES ON DISTRIBUTIONS

 Distributions you receive from the funds may be subject to income tax and may
 also be subject to state or local taxes - unless you are exempt from taxation.

 For federal tax purposes, any taxable dividends and distributions of short-term
 capital gains are treated as ordinary income. The funds' distributions of net
 long-term capital gains are taxable to you as long-term capital gains. Any
 taxable distributions you receive from the funds will normally be taxable to
 you when made, regardless of whether you reinvest distributions or receive them
 in cash.

 Dividends distributed by U.S. Treasury Money Fund will be taxable for federal
 income tax purposes but will be tax-exempt for purposes of most states'
 personal income tax.  Dividends distributed by Tax-Exempt Money Fund generally
 will be exempt from federal income tax but generally will be subject to state
 income tax.  This favorable tax treatment may not apply to Tax-Exempt Money
 Fund shareholders who are "substantial users" (or "related persons") of
 facilities financed by securities held by Tax-Exempt Money Fund.  None of the
 funds generally realize or distribute capital gains; however, if they do, they
 will be subject to federal and state income tax.

 TAXES ON TRANSACTIONS

 Your redemptions, including exchanges, may result in a capital gain or loss for
 federal tax purposes. A capital gain or loss on your investment is the
 difference between the cost of your shares, including any sales charges, and
 the price you receive when you sell them.

 Please see your tax adviser for further information.


                                       18

MONEY MARKET FUNDS / PROSPECTUS



<PAGE>

FINANCIAL HIGHLIGHTS

The financial highlights table is intended to help you understand each fund's
results for the past five years and is currently only shown for Class A and B
shares.  A similar table will be shown for Class C and F shares beginning with
Cash Management Trust's 2001 fiscal year end. Certain information reflects
financial results for a single fund share. The total returns in the table
represent the rate that an investor would have earned or lost on an investment
in the funds (assuming reinvestment of all dividends and distributions). This
information has been audited by PricewaterhouseCoopers LLP, whose report, along
with each fund's financial statements, is included in the statement of
additional information, which is available upon request.

CASH MANAGEMENT TRUST/1/


<TABLE>
<CAPTION>
                                            Dividends                                              Ratio of     Ratio of net
              Net asset value,     Net      (from net    Net asset                  Net assets,   expenses to    income to
 Year ended     beginning of    investment  investment    value,                    end of year   average net   average net
September 30        year          income     income)    end of year  Total return  (in millions)    assets         assets
-----------------------------------------------------------------------------------------------------------------------------
<S>           <C>               <C>         <C>         <C>          <C>           <C>            <C>          <C>
  CLASS A:
    2000           $1.00          $.055/2/   $(.055)       $1.00        5.66%         $5,417          .61%         5.53%
    1999            1.00           .045       (.045)        1.00        4.59           5,863          .58          4.52
    1998            1.00           .050       (.050)        1.00        5.15           4,604          .58          5.02
    1997            1.00           .049       (.049)        1.00        5.03           3,527          .57          4.93
    1996            1.00           .050       (.050)        1.00        5.06           3,304          .60          4.95
  CLASS B:
    2000            1.00           .027/2/    (.027)        1.00        2.73               1         1.43/3/       5.21/3/
</TABLE>


1 The years 1996 through 2000 represent, for Class A shares, fiscal years ended
 September 30. The period ended 2000 represents, for Class B shares, the 199-day
 period ended September 30, 2000. Class B shares were not offered before March
 15, 2000. Total return for Class B is based on activity during the period and
 thus is not representative of a full year. Total returns exclude all sales
 charges, including contingent deferred sales charges.

2 Based on average shares outstanding.

3 Annualized.


                                       19

                                                 MONEY MARKET FUNDS / PROSPECTUS

<PAGE>

U.S. TREASURY MONEY FUND


<TABLE>
<CAPTION>
                                            Dividends                                              Ratio of     Ratio of net
              Net asset value,     Net      (from net    Net asset                  Net assets,   expenses to    income to
 Year ended     beginning of    investment  investment    value,                    end of year   average net   average net
September 30        year          income     income)    end of year  Total return  (in millions)    assets         assets
-----------------------------------------------------------------------------------------------------------------------------
<S>           <C>               <C>         <C>         <C>          <C>           <C>            <C>          <C>
CLASS A:/1/
    2000           $1.00          $.049/2/   $(.049)       $1.00        5.00%          $369          .62%          4.81%
    1999            1.00           .039       (.039)        1.00        4.00            467          .59           3.95
    1998            1.00           .045       (.045)        1.00        4.63            356          .59           4.49
    1997            1.00           .046       (.046)        1.00        4.71            279          .53           4.61
    1996            1.00           .046       (.046)        1.00        4.66            256          .65           4.53
</TABLE>


1 The fund offers Class A shares only.

2 Based on average shares outstanding.


                                       20

MONEY MARKET FUNDS / PROSPECTUS



<PAGE>

TAX-EXEMPT MONEY FUND


<TABLE>
<CAPTION>
                                                                                                     Ratio of         Ratio of
                                            Dividends                                               expenses to     expenses to
              Net asset value,     Net      (from net    Net asset                  Net assets,     average net     average net
 Year ended     beginning of    investment  investment    value,                    end of year   assets - before  assets - after
September 30        year          income     income)    end of year  Total return  (in millions)     fee waiver      fee waiver
-----------------------------------------------------------------------------------------------------------------------------------
<S>           <C>               <C>         <C>         <C>          <C>           <C>            <C>              <C>
CLASS A:/1/
    2000           $1.00          $.032/2/   $(.032)       $1.00        3.29%          $276            .64%             .64%
    1999            1.00           .025       (.025)        1.00        2.51            255            .68              .65
    1998            1.00           .029       (.029)        1.00        2.97            198            .71              .65
    1997            1.00           .029       (.029)        1.00        2.94            160            .74              .65
    1996            1.00           .029       (.029)        1.00        2.91            144            .77              .65
<CAPTION>

               Ratio of net
                income to
 Year ended    average net
September 30      assets
----------------------------
<S>           <C>
CLASS A:/1/
    2000          3.23%
    1999          2.33
    1998          2.94
    1997          2.94
    1996          2.88
</TABLE>


1 The fund offers Class A shares only.

2 Based on average shares outstanding.


                                       21

                                                 MONEY MARKET FUNDS / PROSPECTUS

<PAGE>


<TABLE>
<CAPTION>
 <S>                           <C>
 FOR SHAREHOLDER SERVICES                  American Funds Service Company
                                                             800/421-0180
 FOR RETIREMENT PLAN SERVICES    Call your employer or plan administrator
 FOR DEALER SERVICES                          American Funds Distributors
                                                     800/421-9900 Ext. 11
 FOR 24-HOUR INFORMATION                            American FundsLine(R)
                                                             800/325-3590
                                             American FundsLine OnLine(R)
                                             http://www.americanfunds.com

</TABLE>

            Telephone conversations may be recorded or monitored for
          verification, recordkeeping and quality assurance purposes.

                            *     *     *     *     *

 MULTIPLE TRANSLATIONS  This prospectus may be translated into other languages.
 If there is any inconsistency or ambiguity as to the meaning of any word or
 phrase in a translation, the English text will prevail.

 ANNUAL/SEMI-ANNUAL REPORT TO SHAREHOLDERS  Contains additional information
 about the funds including financial statements, investment results, portfolio
 holdings, a statement from portfolio management discussing market conditions
 and the funds' investment strategies, and the independent accountants' report
 (in the annual report).

 STATEMENT OF ADDITIONAL INFORMATION (SAI) AND CODES OF ETHICS The SAI contains
 more detailed information on all aspects of each fund, including each fund's
 financial statements and is incorporated by reference into this prospectus.
 The Codes of Ethics describe the personal investing policies adopted by each
 fund and the funds' investment adviser and its affiliated companies.

 The Codes of Ethics and current SAI have been filed with the Securities and
 Exchange Commission ("SEC"). These and other related materials about the funds
 are available for review or to be copied at the SEC's Public Reference Room in
 Washington, D.C. (202/942-8090) or on the EDGAR database on the SEC's Internet
 Web site at http://www.sec.gov, or, after payment of a duplicating fee, via
 e-mail request to publicinfo@sec.gov or by writing the SEC's Public Reference
 Section, Washington, D.C. 20549-0102.

 HOUSEHOLD MAILINGS  Each year you are automatically sent an updated
 prospectus, annual and semi-annual report for the funds. You may also
 occasionally receive proxy statements for the funds. In order to reduce the
 volume of mail you receive, when possible, only one copy of these documents
 will be sent to shareholders that are part of the same family and share the
 same residential address.

 If you would like to receive individual copies of these documents, or a free
 copy of the SAI or Codes of Ethics, please call American Funds Service Company
 at 800/421-0180 or write to the Secretary of the funds at 333 South Hope
 Street, Los Angeles, California 90071.
 Investment Company File No. 811-2380 (The Cash Management Trust of America)
 Investment Company File No. 811-6235 (The U.S. Treasury Money Fund of America)
 Investment Company File No. 811-5750 (The Tax-Exempt Money Fund of America)
                                                        Printed on Recyled Paper
                                                                MMF-010-0301/RRD

<PAGE>


                     THE CASH MANAGEMENT TRUST OF AMERICA
                   THE U.S. TREASURY MONEY FUND OF AMERICA
                     THE TAX-EXEMPT MONEY FUND OF AMERICA

                                     Part B
                      Statement of Additional Information

                                 March 15, 2001

This document is not a prospectus but should be read in conjunction with the
current prospectus of The Cash Management Trust of America ("CMTA"), The U.S.
Treasury Money Fund of America ("CTRS") and The Tax-Exempt Money Fund of America
("CTEX") dated March 15, 2001. The prospectus may be obtained from your
investment dealer or financial planner or by writing to the fund at the
following address:

                     The Cash Management Trust of America
                    The U.S. Treasury Money Fund of America
                      The Tax-Exempt Money Fund of America
                              Attention: Secretary
               333 South Hope StreetLos Angeles, California 90071
                                 (213) 486-9200

Shareholders who purchase shares at net asset value through eligible retirement
plans should note that not all of the services or features described below may
be available to them, and they should contact their employer for details.


                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
Item                                                                  Page No.
----                                                                  --------
<S>                                                                   <C>
Certain Investment Limitations and Guidelines . . . . . . . . . . .        2
Description of Certain Securities and Investment Techniques . . . .        3
Fundamental Policies and Investment Restrictions. . . . . . . . . .        8
Fund Organization and Voting Rights . . . . . . . . . . . . . . . .       13
Fund Trustees and Other Officers. . . . . . . . . . . . . . . . . .       14
Management. . . . . . . . . . . . . . . . . . . . . . . . . . . . .       18
Dividends, Distributions and Taxes  . . . . . . . . . . . . . . . .       22
Purchase of Shares. . . . . . . . . . . . . . . . . . . . . . . . .       25
Sales Charges . . . . . . . . . . . . . . . . . . . . . . . . . . .       27
Sales Charge Reductions and Waivers . . . . . . . . . . . . . . . .       30
Individual Retirement Account (IRA) Rollovers . . . . . . . . . . .       33
Price of Shares . . . . . . . . . . . . . . . . . . . . . . . . . .       33
Selling Shares. . . . . . . . . . . . . . . . . . . . . . . . . . .       34
Shareholder Account Services and Privileges . . . . . . . . . . . .       36
Execution of Portfolio Transactions . . . . . . . . . . . . . . . .       39
General Information . . . . . . . . . . . . . . . . . . . . . . . .       39
Investment Results and Related Statistics . . . . . . . . . . . . .       41
Appendix. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       44
Financial Statements
</TABLE>



                          Money Market Funds - Page 1

<PAGE>


                 CERTAIN INVESTMENT LIMITATIONS AND GUIDELINES

The following limitations and guidelines are considered at the time of purchase,
under normal market conditions, and are based on a percentage of the funds' net
assets unless otherwise noted. This summary is not intended to reflect all of
the funds' investment limitations.


CASH MANAGEMENT TRUST OF AMERICA

     DEBT SECURITIES

     .The fund will invest substantially all of its assets in securities
          rated in the highest short-term rating categories (i.e., Prime-1,
          A-1).

     MATURITY

     .The fund's dollar-weighted average portfolio maturity will be
          approximately 35 days or less.

U.S. TREASURY MONEY FUND

     U.S. TREASURY SECURITIES

     .The fund will invest substantially all of its assets in U.S. Treasury
          securities.

     MATURITY

     .The fund's dollar-weighted average portfolio maturity will be
          approximately 90 days or less.

TAX-EXEMPT MONEY FUND OF AMERICA

     TAX-EXEMPT SECURITIES

     .The fund will invest at least 80% of its assets in securities the
          interest on which is exempt from federal income tax.

     DEBT SECURITIES

     .The fund may invest up to 20% of its assets in securities that are
          subject to alternative minimum taxes.

     .The fund will invest substantially all of its assets in securities
          rated in the highest short-term rating categories (i.e., Prime-1,
          A-1).

     MATURITY

     .The fund's dollar-weighted average portfolio maturity will be
          approximately 60 days or less.

The funds may experience difficulty liquidating certain portfolio securities
during significant market declines or periods of heavy redemptions.


                          Money Market Funds - Page 2

<PAGE>


          DESCRIPTION OF CERTAIN SECURITIES AND INVESTMENT TECHNIQUES

The descriptions below are intended to supplement the material in the prospectus
under "Investment Objective, Strategies and Risks."


INVESTMENT POLICIES - CMTA and CTEX may invest in securities that are rated in
the two highest rating categories for debt obligations by at least two
nationally recognized statistical rating organizations (or one rating
organization if the instrument was rated by only one such organization) or, if
unrated, are of comparable quality as determined in accordance with procedures
established by the Board of Trustees ("eligible securities").  The nationally
recognized statistical rating organizations currently rating instruments of the
type each fund may purchase are Moody's Investors Service, Inc., Standard &
Poor's Corporation, Fitch Investors Service, Inc., and IBCA Limited and IBCA
Inc.  Subsequent to its purchase, an issue of securities may cease to be rated
or its rating may be reduced below the minimum rating required for its purchase.
 Neither event requires the elimination of such securities from a fund's
portfolio, but Capital Research and Management Company (the "Investment
Adviser") will consider such an event in its determination of whether the fund
should continue to hold the securities.  Investments in eligible securities not
rated in the highest category by at least two rating organizations (or one
rating organization if the instrument was rated by only one such organization),
and unrated eligible securities not determined by the Board of Trustees to be
comparable quality to those rated in the highest category, will be limited to 5%
of a fund's total assets, with the investment in any one such issuer being
limited to no more than the greater of 1% of a fund's total assets or
$1,000,000.  It is the current policy of CMTA and CTEX to invest only in
instruments rated in the highest short-term rating category by Moody's Investors
Service ("Moody's"), Inc. and Standard & Poor's Corporation ("S&P") or in
instruments that do not have short-term ratings by Moody's or S&P but determined
to be of comparable quality in accordance with U.S. Government, its agencies or
instrumentalities as to the payment of principal and interest.  CTRS invests
exclusively in U.S. Treasury securities, which are of the highest credit
quality.


THE CASH MANAGEMENT TRUST OF AMERICA
------------------------------------

CMTA may invest in the short-term securities described below:


COMMERCIAL PAPER: Short-term notes (usually maturing in 90 days or less) issued
by companies, governmental bodies, or bank/corporation sponsored conduits
(asset-backed commercial paper).


COMMERCIAL BANK OBLIGATIONS: Certificates of deposit (interest-bearing time
deposits), bank notes, bankers' acceptances (time drafts drawn on a commercial
bank where the bank accepts an irrevocable obligation to pay at maturity)
representing direct or contingent obligations of commercial banks with assets in
excess of $1 billion, based on latest published reports, or obligations issued
by commercial banks with assets of less than $1 billion if the principal amount
of such obligation is fully insured by the U. S. Government. Commercial banks
issuing obligations in which CMTA invests must be on an approved list that is
monitored on a regular basis; currently all approved banks have assets in excess
of $10 billion.


SAVINGS ASSOCIATION OBLIGATIONS: Bank notes and certificates of deposit
(interest-bearing time deposits) issued by savings banks or savings and loan
associations that have assets in excess of $1 billion, based on latest published
reports, or obligations issued by institutions with assets of less than $1
billion if the principal amount of such obligation is fully insured by the U.S.


                          Money Market Funds - Page 3

<PAGE>


Government. Savings associations issuing obligations in which CMTA invests must
be on an approved list that is monitored on a regular basis; currently all
approved savings associations have assets in excess of $10 billion.


U.S. GOVERNMENT SECURITIES - Securities guaranteed by the U.S. Government
include direct obligations of the U.S. Treasury, such as Treasury bills, notes
and bonds. For these securities, the payment of principal and interest is
unconditionally guaranteed by the U.S. Government, and thus they are of the
highest possible credit quality. Such securities are subject to variations in
market value due to fluctuations in interest rates, but, if held to maturity,
will be paid in full.


Certain securities issued by U.S. Government instrumentalities and certain
federal agencies are neither direct obligations of, nor guaranteed by, the
Treasury. However, they generally involve federal sponsorship in one way or
another; some are backed by specific types of collateral; some are supported by
the issuer's right to borrow from the Treasury; some are supported by the
discretionary authority of the Treasury to purchase certain obligations of the
issuer; and others are supported only by the credit of the issuing government
agency or instrumentality. These agencies and instrumentalities include, but are
not limited to: Federal Home Loan Bank, Federal Home Loan Mortgage Corporation,
Federal National Mortgage Association, Tennessee Valley Authority, and Federal
Farm Credit Bank System.


CORPORATE BONDS AND NOTES: Corporate obligations that mature, or may be redeemed
by CMTA, in 13 months or less. These obligations may originally have been issued
with maturities in excess of 13 months. CMTA may currently invest only in
corporate bonds or notes of issuers having outstanding short-term securities
rated in the top rating category by Standard & Poor's Corporation or by Moody's
Investors Service, Inc. See "Description of Ratings for Debt Securities" for a
description of high-quality ratings by Standard & Poor's Corporation and Moody's
Investors Service, Inc.


REPURCHASE AGREEMENTS - The funds may enter into repurchase agreements, under
which each fund buys a security and obtains a simultaneous commitment from the
seller to repurchase the security at a specified time and price. Repurchase
agreements permit the funds to maintain liquidity and earn income over periods
of time as short as overnight. The seller must maintain with the funds'
custodian collateral equal to at least 100% of the repurchase price, including
accrued interest, as monitored daily by the Investment Adviser. The funds will
only enter into repurchase agreements involving securities in which they could
otherwise invest and with selected banks and securities dealers whose financial
condition is monitored by the Investment Adviser. If the seller under the
repurchase agreement defaults, the funds may incur a loss if the value of the
collateral securing the repurchase agreement has declined and may incur
disposition costs in connection with liquidating the collateral. If bankruptcy
proceedings are commenced with respect to the seller, realization of the
collateral by the funds may be delayed or limited.


THE TAX-EXEMPT MONEY FUND OF AMERICA
------------------------------------

MUNICIPAL BONDS - Municipal bonds are debt obligations generally issued to
obtain funds for various public purposes, including the construction of public
facilities. Opinions relating to the validity of municipal bonds, their
exclusion from gross income for federal income tax purposes and, where
applicable, state and local income tax are rendered by bond counsel to the
issuing authorities at the time of issuance.


                          Money Market Funds - Page 4

<PAGE>


The two principal classifications of municipal bonds are general obligation
bonds and limited obligation or revenue bonds. General obligation bonds are
secured by the issuer's pledge of its full faith and credit including, if
available, its taxing power for the payment of principal and interest. Issuers
of general obligation bonds include states, counties, cities, towns and various
regional or special districts. The proceeds of these obligations are used to
fund a wide range of public facilities such as the construction or improvement
of schools, highways and roads, water and sewer systems and facilities for a
variety of other public purposes. Lease revenue bonds or certificates of
participation in leases are payable from annual lease rental payments from a
state or locality. Annual rental payments are payable to the extent such rental
payments are appropriated annually.


Typically, the only security for a limited obligation or revenue bond is the net
revenue derived from a particular facility or class of facilities financed
thereby or, in some cases, from the proceeds of a special tax or other special
revenues. Revenue bonds have been issued to fund a wide variety of
revenue-producing public capital projects including: electric, gas, water and
sewer systems; highways, bridges and tunnels; port and airport facilities;
colleges and universities; hospitals; and convention, recreational and housing
facilities. Although the security behind these bonds varies widely, many provide
additional security in the form of a debt service reserve fund which may also be
used to make principal and interest payments on the issuer's obligations. In
addition, some revenue obligations (as well as general obligations) are insured
by a bond insurance company or backed by a letter of credit issued by a banking
institution.


Revenue bonds also include, for example, pollution control, health care and
housing bonds, which, although nominally issued by municipal authorities, are
generally not secured by the taxing power of the municipality but by the
revenues of the authority derived from payments by the private entity which owns
or operates the facility financed with the proceeds of the bonds. Obligations of
housing finance authorities have a wide range of security features including
reserve funds and insured or subsidized mortgages, as well as the net revenues
from housing or other public projects. Most of these bonds do not generally
constitute the pledge of the credit of the issuer of such bonds. The credit
quality of such revenue bonds is usually directly related to the credit standing
of the user of the facility being financed or of an institution which provides a
guarantee, letter of credit, or other credit enhancement for the bond issue.


SECURITIES SUBJECT TO ALTERNATIVE MINIMUM TAX - The funds may invest in
tax-exempt securities believed to pay interest constituting an item of tax
preference subject to alternative minimum tax; therefore, while each fund's
distributions from tax-exempt securities are not subject to regular federal
income tax, a portion or all may be included in determining a shareholder's
federal alternative minimum tax.


TEMPORARY TAXABLE INVESTMENTS - A portion of CTEX's assets, which will normally
be less than 20%, may be invested in high-quality taxable short-term securities.
Such temporary investments may include: (1) obligations of the U.S. Treasury;
(2) obligations of agencies and instrumentalities of the U.S. Government; and
(3) money market instruments, such as certificates of deposit issued by domestic
banks, corporate commercial paper, and bankers' acceptances. These investments
may be made when deemed advisable for temporary defensive purposes or when the
Investment Adviser believes there is an unusual disparity between the after-tax
income available on taxable investments and the income available on tax-exempt
securities.


                          Money Market Funds - Page 5

<PAGE>


THE TAX-EXEMPT MONEY FUND OF AMERICA AND THE U.S. TREASURY MONEY FUND OF AMERICA
--------------------------------------------------------------------------------

LOANS OF PORTFOLIO SECURITIES - Each fund is authorized to lend portfolio
securities to selected securities dealers or other institutional investors whose
financial condition is monitored by the Investment Adviser. The borrower must
maintain with the fund's custodian collateral consisting of cash, cash
equivalents or U.S. Government securities equal to at least 100% of the value of
the borrowed securities, plus any accrued interest. The Investment Adviser will
monitor the adequacy of the collateral on a daily basis. Each fund may at any
time call a loan of its portfolio securities and obtain the return of the loaned
securities. Each fund will receive any interest paid on the loaned securities
and a fee or a portion of the interest earned on the collateral. The fund will
limit its loans of portfolio securities to an aggregate of 10% of the value of
its total assets, measured at the time any such loan is made.


REPURCHASE AGREEMENTS - Although CTEX or CTRS have no current intention of doing
so during the next 12 months, each fund is authorized to enter into repurchase
agreements, subject to the standards applicable to CMTA's repurchase agreement
transactions as described above.


THE CASH MANAGEMENT TRUST OF AMERICA, THE U.S. TREASURY MONEY FUND OF AMERICA
-----------------------------------------------------------------------------
AND THE TAX-EXEMPT MONEY FUND OF AMERICA
----------------------------------------

MONEY MARKET INSTRUMENTS - The funds invest in various high-quality money market
instruments that mature, or may be redeemed or resold, in 13 months or less (25
months or less in the case of U.S. Government securities). For CMTA they
include: (1) commercial paper (notes issued by corporations, governmental
bodies, or bank/corporation sponsored conduits (asset-backed commercial paper)),
(2) commercial bank obligations such as certificates of deposit, bank notes, and
bankers' acceptances (time drafts on a commercial bank where the bank accepts an
irrevocable obligation to pay at maturity), (3) savings association and savings
bank obligations, (4) securities of the U.S. Government, its agencies or
instrumentalities, and (5) corporate bonds and notes. CMTA may invest in
securities issued by non-U.S. entities or in securities with credit and
liquidity support features provided by non-U.S. entities. Since these securities
are issued by entities that may have substantial operations outside the U.S.
they may involve additional risks and considerations. These securities may be
affected by unfavorable political, economic, or governmental developments that
could affect the repayment of principal or payment of interest. Securities of
U.S. issuers with substantial operations outside the U.S. may also be subject to
similar risks.


CTRS may invest in instruments that include U.S. Treasury bills, notes, and
bonds. CTEX invests in money market instruments that are issued by states,
territories, or possessions of the United States and the District of Columbia
and their political subdivisions, agencies and instrumentalities
("municipalities") to obtain funds for various public purposes. CTEX may
purchase various types of municipal securities including tax, bond, revenue, and
grant anticipation notes, construction loan notes, municipal commercial paper,
general obligation bonds, revenue bonds and industrial development bonds. In
addition, CTEX may invest in municipal securities that are supported by credit
and liquidity enhancements, which include letters of credit from domestic and
non- U.S. banks and other financial institutions. Changes in the credit quality
of these institutions could cause the fund to experience a loss and may affect
its share price. To the extent that the credit quality of these institutions is
downgraded, investments in such securities could increase the level of
illiquidity of the fund's portfolio for the remaining maturity of the
instruments.


                          Money Market Funds - Page 6

<PAGE>


VARIABLE AND FLOATING RATE OBLIGATIONS - The interest rates payable on certain
securities in which the funds may invest may not be fixed but may fluctuate
based upon changes in market rates. Variable and floating rate obligations bear
coupon rates that are adjusted at designated intervals, based on the then
current market rates of interest. Variable and floating rate obligations permit
the funds to "lock in" the current interest rate for only the period until the
next scheduled rate adjustment, but the rate adjustment feature tends to limit
the extent to which the market value of the obligation will fluctuate.


"PUT" SECURITIES - CMTA and CTEX may purchase securities that provide for the
right to resell them to the issuer, a bank, or a broker-dealer typically at the
par value plus accrued interest within a specified period of time prior to
maturity. This right is commonly known as a "put" or a "demand feature." The
funds may pay a higher price for such securities than would otherwise be paid
for the same security without such a right. The funds will enter into these
transactions only with issuers, banks, or broker-dealers that are determined by
Capital Research and Management Company to present minimal credit risks. If an
issuer, bank, or broker-dealer should default on its obligation to repurchase,
the funds might be unable to recover all or a portion of any loss sustained.
There is no specific limit on the extent to which the funds may invest in such
securities.


MATURITY - Each fund determines its net asset value using the penny-rounding
method, according to rules of the Securities and Exchange Commission, which
permits it to maintain a constant net asset value of $1.00 per share under
normal conditions. In accordance with rule 2a-7, each fund is required to
maintain a dollar-weighted average portfolio maturity of 90 days or less and
purchase only instruments having remaining maturities of 13 months or less (25
months or less in the case of U.S. Government securities) determined in
accordance with procedures established by the Board of Trustees to present
minimal credit risks. For this purpose, certain variable and floating rate
obligations and "put" securities which may otherwise have stated maturities in
excess of 13 months (25 months in the case of U.S. Government securities) will
be deemed to have remaining maturities equal to the period remaining until the
next readjustment of the interest rate or until the fund is entitled to
repayment or repurchase of the security. CMTA, CTRS and CTEX currently intend to
maintain dollar-weighted average portfolio maturities of approximately 35 days
or less, 90 days or less and 60 days or less, respectively.


FORWARD COMMITMENTS - The funds may enter into commitments to purchase or sell
securities at a future date. When the funds agree to purchase such securities,
they assume the risk of any decline in value of the security beginning on the
date of the agreement. When the funds agree to sell such securities, they do not
participate in further gains or losses with respect to the securities beginning
on the date of the agreement. If the other party to such a transaction fails to
deliver or pay for the securities, the funds could miss a favorable price or
yield opportunity, or could experience a loss.


The funds will not use these transactions for the purpose of leveraging and will
segregate liquid assets which will be marked to market daily in an amount
sufficient to meet its payment obligations in these transactions. Although these
transactions will not be entered into for leveraging purposes, to the extent the
funds' aggregate commitments under these transactions exceed its segregated
assets, the fund temporarily could be in a leveraged position (because they may
have an amount greater than their net assets subject to market risk). Should
market values of the funds' portfolio securities decline while the funds are in
a leveraged position, greater depreciation of its net assets would likely occur
than were it not in such a position. The funds will not borrow money to settle
these transactions and therefore, will liquidate other


                          Money Market Funds - Page 7

<PAGE>


portfolio securities in advance of settlement if necessary to generate
additional cash to meet its obligations thereunder.


                FUNDAMENTAL POLICIES AND INVESTMENT RESTRICTIONS

FUNDAMENTAL POLICIES - Each fund has adopted the following fundamental policies
and investment restrictions which may not be changed without approval by holders
of a majority of its outstanding shares. Such majority is defined in the
Investment Company Act of 1940 ("1940 Act") as the vote of the lesser of (i) 67%
or more of the outstanding voting securities present at a meeting, if the
holders of more than 50% of the outstanding voting securities are present in
person or by proxy, or (ii) more than 50% of the outstanding voting securities.
All percentage limitations are considered at the time securities are purchased
and are based on the fund's net assets unless otherwise indicated. None of the
following investment restrictions involving a maximum percentage of assets will
be considered violated unless the excess occurs immediately after, and is caused
by, an acquisition by the fund.


CMTA may not:
         ---


1.   Invest its assets in issues, other than those of the U.S. Government, its
agencies or instrumentalities, obligations of commercial banks and savings
institutions with total assets in excess of $1 billion, commercial paper, and
investment-grade corporate obligations--all maturing in one year or less. CMTA
may, however, invest in obligations issued by commercial banks and savings
institutions with assets of less than $1 billion if the principal amounts of
such obligations are fully insured by the U. S. Government;

2.   Invest more than 5% of its total assets in the securities of any one
issuer, except the U.S. Government, its agencies and instrumentalities. With
respect to 25% of total assets, commercial banks are excluded from this 5%
limitation;

3.   Invest more than 25% of total assets in the securities of issuers in the
same industry. Electric, natural gas distribution, natural gas pipeline,
combined electric and natural gas, and telephone utilities are considered
separate industries for purposes of this restriction. Obligations of the U.S.
Government, its agencies and instrumentalities are not subject to this 25%
limitation on industry concentration. In addition, CMTA may, if deemed
advisable, invest more than 25% of its assets in the obligations of commercial
banks;

 4.  Enter into any repurchase agreement if, as a result, more than 10% of total
assets would be subject to repurchase agreements maturing in more than seven
days;

 5.  Make loans to others except for the purchase of debt securities or entering
into repurchase agreements as listed above;

6.   Borrow money, except from banks for temporary purposes and then in an
amount not in excess of 33-1/3% of total assets. This borrowing power is
reserved to facilitate the orderly sale of portfolio securities to accommodate
unusually heavy redemption requests, if they should occur; it is not included
for investment purposes;

7.   Pledge more than 15% of its assets and then only to secure temporary
borrowings from banks;


                          Money Market Funds - Page 8

<PAGE>


8.   Sell securities short;

9.   Invest in puts, calls, straddles, spreads or any combination thereof;

10.  Purchase or sell securities of other investment companies (except in
connection with a merger, consolidation, acquisition or reorganization), real
estate, or commodities;

11.  Engage in the underwriting of securities issued by others.

Notwithstanding Investment Restriction #9, the fund may invest in securities
with put and call features.


For purposes of Investment Restriction #1, CMTA currently invests only in high
quality obligations in accordance with rule 2a-7 under the 1940 Act, as
described in the prospectus. (CMTA will notify shareholders 180 days in advance
in the event it no longer is required to adhere to rule 2a-7 and it intends to
stop relying on the rule.) For purposes of Investment Restriction #2, the fund
may invest more than 5% of its total assets in the securities of any one issuer
only to the extent allowed under rule 2a-7 of the Investment Company Act of
1940. For purposes of Investment Restriction #3, CMTA will not invest 25% or
more of total assets in the securities of issuers in the same industry.
Additionally, for purposes of Investment Restriction #3, the Investment Adviser
currently interprets the term "commercial banks" to mean domestic branches of
U.S. banks. These policies are non-fundamental and may be changed by the Board
of Trustees without shareholder approval.


CTRS may not:
         ---


 1.  Purchase any security (other than securities issued or guaranteed by the
U.S. Government or its agencies or instrumentalities), if immediately after and
as a result of such investment (a) with respect to 75% of CTRS' total assets,
more than 5% of CTRS' total assets would be invested in securities of the
issuer, or (b) CTRS would hold more than 10% of any class of securities or of
the total securities of the issuer (for this purpose all indebtedness of an
issuer shall be deemed a single class).

 2.  Buy or sell real estate (including real estate limited partnerships) in the
ordinary course of its business; however, CTRS may invest in securities secured
by real estate or interests therein;

 3.  Acquire securities for which there is no readily available market or enter
into repurchase agreements or purchase time deposits maturing in more than seven
days, if, immediately after and as a result, the value of such securities would
exceed, in the aggregate, 10% of CTRS' total assets;

 4.  Make loans to others, except by the purchase of debt securities, entering
into repurchase agreements or making loans of portfolio securities;

 5.  Sell securities short;

 6.  Purchase securities on margin, except such short-term credits as may be
necessary for the clearance of purchases or sales of securities;


                          Money Market Funds - Page 9

<PAGE>


 7.  Borrow money, except from banks for temporary or emergency purposes, not in
excess of 5% of the value of CTRS' total assets, excluding the amount borrowed.
This borrowing provision is intended to facilitate the orderly sale of portfolio
securities to accommodate unusually heavy redemption requests, if they should
occur; it is not intended for investment purposes. In the event that the asset
coverage for CTRS' borrowings falls below 300%, CTRS will reduce within three
days (excluding Sundays and holidays), the amount of its borrowings in order to
provide for 300% asset coverage, and except that CTRS may enter into reverse
repurchase agreements, provided that reverse repurchase agreements and any other
transactions constituting borrowing by CTRS may not exceed one-third of CTRS'
total assets;

 8.  Mortgage, pledge, or hypothecate its assets, except in an amount up to 5%
of the value of its total assets, but only to secure borrowings for temporary or
emergency purposes;

 9.  Underwrite any issue of securities, except to the extent that the purchase
of securities directly from the issuer in accordance with CTRS' investment
objective, policies and restrictions, and later resale, may be deemed to be an
underwriting;

10.  Knowingly purchase securities of other managed investment companies, except
in connection with a merger, consolidation, acquisition, or reorganization;

11.  Buy or sell commodities or commodity contracts (including futures
contracts) or oil, gas or other mineral exploration or development programs;

12.   Write, purchase or sell puts, calls, straddles, spreads or any combination
thereof, except that this shall not prevent the purchase of securities which
have "put" or "stand-by commitment" features;

13.  Purchase or retain the securities of any issuer, if, to the knowledge of
CTRS, those individual officers and Board members of CTRS, its Investment
Adviser, or principal underwriter, each owning beneficially more than 1/2 of 1%
of the securities of such issuer, together own more than 5% of the securities of
such issuer;

14.  Invest more than 5% of the value of CTRS' total assets in securities of any
issuer with a record of less than three years continuous operation, including
predecessors;

15.  Invest 25% or more of total assets in the securities of issuers in the same
industry. Electric, natural gas distribution, natural gas pipeline, combined
electric and natural gas, and telephone utilities are considered separate
industries for purposes of this restriction. Obligations of the U.S. Government,
its agencies and instrumentalities, are not subject to this 25% or more
limitation on industry concentration. In addition, CTRS may, if deemed
advisable, invest 25% or more of its assets in the obligations of commercial
banks.

Notwithstanding Investment Restriction #10, the fund may invest in securities of
other investment companies if deemed advisable by its officers in connection
with the administration of a deferred compensation plan adopted by Trustees
pursuant to an exemptive order granted by the Securities and Exchange
Commission.


For purposes of Investment Restriction #11, the term "oil, gas or other mineral
exploration or development programs" includes oil, gas or other mineral
exploration or development leases. For purposes of Investment Restriction #15,
the Investment Adviser currently interprets the term


                          Money Market Funds - Page 10

<PAGE>


"commercial banks" to mean domestic branches of U.S. banks. Finally, CTRS will
not invest more than 5% of its net assets valued at market at the time of
purchase, in warrants including not more than 2% of such net assets in warrants
that are not listed on either the New York Stock Exchange or the American Stock
Exchange; however, warrants acquired in units or attached to securities may be
deemed to be without value for the purpose of this restriction. These policies
are not deemed fundamental and may be changed by the Board of Trustees without
shareholder approval.


CTEX may not:
         ---


 1.  Purchase any security (other than securities issued or guaranteed by the
U.S. government or its agencies or instrumentalities), if immediately after and
as a result of such investment (a) with respect to 75% of CTEX's total assets,
more than 5% of CTEX's total assets would be invested in securities of the
issuer, or (b) CTEX would hold more than 10% of any class of securities or of
the total securities of the issuer (for this purpose all indebtedness of an
issuer shall be deemed a single class).

 2.  Enter into any repurchase agreement if, as a result, more than 10% of the
value of CTEX's total assets would be subject to repurchase agreements maturing
in more than seven days;

 3.  Buy or sell real estate (including real estate limited partnerships) in the
ordinary course of its business; however, CTEX may invest in securities secured
by real estate or interests therein;

 4.  Acquire securities subject to restrictions on disposition or securities for
which there is no readily available market (including securities of foreign
issuers not listed on any recognized foreign or domestic exchange), or enter
into repurchase agreements or purchase time deposits maturing in more than seven
days, if, immediately after and as a result, the value of such securities would
exceed, in the aggregate, 10% of CTEX's total assets;

 5.  Make loans to others, except for the purchase of debt securities, entering
into repurchase agreements or making loans of portfolio securities;

 6.  Sell securities short, except to the extent that CTEX contemporaneously
owns or has the right to acquire at no additional cost securities identical to
those sold short;

 7.  Purchase securities on margin, except such short-term credits as may be
necessary for the clearance of purchases or sales of securities;

 8.  Borrow money, except from banks for temporary or emergency purposes, not in
excess of 5% of the value of CTEX's total assets, excluding the amount borrowed.
This borrowing provision is intended to facilitate the orderly sale of portfolio
securities to accommodate unusually heavy redemption requests, if they should
occur; it is not intended for investment purposes. In the event that the asset
coverage for CTEX's borrowings falls below 300%, CTEX will reduce within three
days (excluding Sundays and holidays), the amount of its borrowings in order to
provide for 300% asset coverage;

 9.  Mortgage, pledge, or hypothecate its assets, except in an amount up to 5%
of the value of its total assets, but only to secure borrowings for temporary or
emergency purposes;


                          Money Market Funds - Page 11

<PAGE>


10.  Underwrite any issue of securities, except to the extent that the purchase
of municipal securities directly from the issuer in accordance with CTEX's
investment objective, policies and restrictions, and later resale, may be deemed
to be an underwriting;

11.  Invest in companies for the purpose of exercising control or management;

12.  Knowingly purchase securities of other managed investment companies, except
in connection with a merger, consolidation, acquisition, or reorganization;

13.  Buy or sell commodities or commodity contracts or oil, gas or other mineral
exploration or development programs;

14.  Write, purchase or sell puts, calls, straddles, spreads or any combination
thereof, except that this shall not prevent the purchase of municipal securities
which have "put" or "stand-by commitment" features;

15.  Purchase or retain the securities of any issuer, if, to the knowledge of
CTEX, those individual officers and Board members of CTEX, its Investment
Adviser, or principal underwriter, each owning beneficially more than 1/2 of 1%
of the securities of such issuer, together own more than 5% of the securities of
such issuer;

16.  Invest more than 5% of the value of CTEX's total assets in securities of
any issuer with a record of less than three years continuous operation,
including predecessors;

17.  Invest 25% or more of the value of its total assets in the securities of
issuers conducting their principal business activities in the same industry.

For purposes of Investment Restriction #2, the fund will not enter into any
repurchase agreement if, as a result, more than 10% of net assets would be
subject to repurchase agreements maturing in more than seven days.


For the purpose of CTEX's investment restrictions, the identification of the
"issuer" of municipal securities that are not general obligation securities is
made by the Investment Adviser on the basis of the characteristics of the
securities as described, the most significant of which is the ultimate source of
funds for the payment of principal and interest on such securities. For purposes
of investment restriction #13 the term "commodities contract" includes futures
contracts.


Notwithstanding Investment Restriction #12, the fund may invest in securities of
other investment companies if deemed advisable by its officers in connection
with the administration of a deferred compensation plan adopted by Trustees
pursuant to an exemptive order granted by the Securities and Exchange
Commission.


For purposes of Investment Restriction #16, the fund may invest more than 5% of
its total assets in the securities of any one issuer only to the extent allowed
under rule 2a-7 of the Investment Company Act of 1940.


The following policies of CTEX are not deemed fundamental, and thus may be
changed by the Board of Trustees without shareholder approval: CTEX may not
invest 25% or more of its assets in municipal securities the issuers of which
are located in the same state, unless such securities


                          Money Market Funds - Page 12

<PAGE>


are guaranteed by the U.S. Government, or more than 25% of its total assets in
securities the interest on which is paid from revenues of similar type projects.
CTEX may invest no more than an aggregate of 20% of its total assets in
industrial development securities. There could be economic, business or
political developments which might affect all municipal securities of a similar
category or type or issued by issuers within any particular geographical area or
jurisdiction. Finally, CTEX will not invest more than 5% of its net assets
valued at market at the time of purchase, in warrants including not more than 2%
of such net assets in warrants that are not listed on either the New York Stock
Exchange or the American Stock Exchange; however, warrants acquired in units or
attached to securities may be deemed to be without value for the purpose of this
restriction.


                      FUND ORGANIZATION AND VOTING RIGHTS

Each fund, an open-end, diversified management investment company, was organized
as a Massachusetts business trust (Cash Management Trust on March 1, 1976,
Tax-Exempt Money Fund on December 5, 1988 and U.S. Treasury Money Fund on
December 19, 1990).


All fund operations are supervised by each fund's Board of Trustees which meets
periodically and performs duties required by applicable state and federal laws.
Members of the board who are not employed by Capital Research and Management
Company or its affiliates are paid certain fees for services rendered to the
fund as described in "Trustees and Trustee Compensation" below. They may elect
to defer all or a portion of these fees through a deferred compensation plan in
effect for each fund.


Cash Management Trust has four classes of shares - Class A, B, C and F. U.S.
Treasury Money Fund and Tax-Exempt Money Fund only offer Class A shares. The
shares of each class represent an interest in the same investment portfolio.
 Each class has equal rights as to voting, redemption, dividends and
liquidation, except that each class bears different distribution expenses and
may bear different transfer agent fees and other expenses properly attributable
to the particular class as approved by the Board of Trustees and set forth in
the fund's rule 18f-3 Plan. Class A, B, C and F shareholders have exclusive
voting rights with respect to the respective class' rule 12b-1 Plans adopted in
connection with the distribution of shares and on other matters in which the
interests of one class are different from interests in another class.  Shares of
all classes of the fund vote together on matters that affect all classes in
substantially the same manner. Each class votes as a class on matters that
affect that class alone.


The funds do not hold annual meetings of shareholders. However, significant
matters which require shareholder approval, such as certain elections of board
members or a change in a fundamental investment policy, will be presented to
shareholders at a meeting called for such purpose. Shareholders have one vote
per share owned. At the request of the holders of at least 10% of the shares,
the funds will hold a meeting at which any member of the board could be removed
by a majority vote.


                          Money Market Funds - Page 13

<PAGE>



                           FUND TRUSTEES AND OFFICERS

                       Trustees and Trustee Compensation


<TABLE>
<CAPTION>
                                                                                          AGGREGATE
                                                                                         COMPENSATION
                                                                                    (INCLUDING VOLUNTARILY
                                                                                           DEFERRED
                                                                                       COMPENSATION/1/)
                                                                                        FROM THE FUND
                                POSITION                                              DURING FISCAL YEAR
                                  WITH          PRINCIPAL OCCUPATION(S) DURING              ENDED
   NAME, ADDRESS AND AGE       REGISTRANT                PAST 5 YEARS                 SEPTEMBER 30, 2000
------------------------------------------------------------------------------------------------------------
<S>                           <C>            <C>                                    <C>
 Richard G. Capen, Jr.         Trustee        Corporate Director and author;            $  4,758/ /CMTA
 6077 San Elijo, Box 2494                     former United States Ambassador to        $2,244/3/ CTEX
 Rancho Santa Fe, CA 92067                    Spain; former Vice Chairman of the        $  2,395/ /CTRS
 Age: 66                                      Board, Knight-Ridder, Inc., former
                                              Chairman and Publisher, The Miami
                                                                      ---------
                                              Herald
                                              ------
------------------------------------------------------------------------------------------------------------
 H. Frederick Christie         Trustee        Private Investor.  Former President       $   5,568 CMTA
 P.O. Box 144                                 and Chief Executive Officer, The          $   2,188 CTEX
 Palos Verdes Estates, CA                     Mission Group (non-utility holding        $   2,688 CTRS
 90274                                        company, subsidiary of Southern
 Age: 67                                      California Edison Company)
------------------------------------------------------------------------------------------------------------
 +Don R. Conlan                Trustee        President (retired), The Capital            none/4/
 1630 Milan Avenue                            Group Companies, Inc.
 South Pasadena, CA 91030
 Age: 65
------------------------------------------------------------------------------------------------------------
 Diane C. Creel                Trustee        CEO and President, The Earth              $   4,400 CMTA
 100 W. Broadway                              Technology Corporation                    $   1,220 CTEX
 Suite 5000                                   (international consulting                 $   1,720 CTRS
 Long Beach, CA 90802                         engineering)
 Age: 52
------------------------------------------------------------------------------------------------------------
 Martin Fenton                 Trustee        Managing Director, Senior Resource        $5,210/3/ CMTA
 4660 La Jolla Village                        Group LLC (development and                $1,830/3/ CTEX
 Drive                                        management of senior living               $2,330/3// /CTRS
 Suite 725                                    communities)
 San Diego, CA 92122
 Age: 65
------------------------------------------------------------------------------------------------------------
 Leonard R. Fuller             Trustee        President, Fuller Consulting              $   5,641 CMTA
 4337 Marina City Drive                       (financial management consulting          $   2,261 CTEX
 Suite 841 ETN                                firm)                                     $   2,761 CTRS
 Marina del Rey, CA 90292
 Age: 54
------------------------------------------------------------------------------------------------------------
 +*Abner D. Goldstine          President,     Senior Vice President and Director,         none/4/
 Age: 71                       PEO            Capital Research and Management
                               and Trustee    Company
------------------------------------------------------------------------------------------------------------
 +**Paul G. Haaga, Jr.         Chairman of    Executive Vice President and                none/4/
 Age: 52                       the Board      Director, Capital Research and
                                              Management Company
------------------------------------------------------------------------------------------------------------
 Richard G. Newman             Trustee        Chairman and CEO, AECOM Technology        $5,241/3/ CMTA
 3250 Wilshire Boulevard                      Corporation (architectural                $1,861/3/ CTEX
 Los Angeles, CA 90010-1599                   engineering)                              $2,361/3/ CTRS
 Age: 66
------------------------------------------------------------------------------------------------------------
 Frank M. Sanchez              Trustee        President, The Sanchez Family             $4,383/3//,4// /CMTA
 5234 Via San Delarro, #1                     Corporation dba McDonald's                $1,670/3,//4/ CTEX
 Los Angeles, CA 90022                        Restaurants (McDonald's licensee)         $2,020/3//,4// /CTRS
 Age: 57
------------------------------------------------------------------------------------------------------------
<CAPTION>
                                   TOTAL COMPENSATION
                                 (INCLUDING VOLUNTARILY
                                        DEFERRED
                                  COMPENSATION/1/) FROM       TOTAL NUMBER
                                   ALL FUNDS MANAGED BY         OF FUND
                                  CAPITAL RESEARCH AND           BOARDS
                                   MANAGEMENT COMPANY           ON WHICH
                              OR ITS AFFILIATES/2/ FOR THE      TRUSTEE
   NAME, ADDRESS AND AGE      YEAR ENDED SEPTEMBER 30, 2000    SERVES/2/
---------------------------------------------------------------------------
<S>                           <C>                            <C>
 Richard G. Capen, Jr.                 $   94,623                  14
 6077 San Elijo, Box 2494
 Rancho Santa Fe, CA 92067
 Age: 66
---------------------------------------------------------------------------
 H. Frederick Christie                 $  211,373                  19
 P.O. Box 144
 Palos Verdes Estates, CA
 90274
 Age: 67
---------------------------------------------------------------------------
 +Don R. Conlan                           none/5/                  12
 1630 Milan Avenue
 South Pasadena, CA 91030
 Age: 65
---------------------------------------------------------------------------
 Diane C. Creel                        $   40,320                  12
 100 W. Broadway
 Suite 5000
 Long Beach, CA 90802
 Age: 52
---------------------------------------------------------------------------
 Martin Fenton                         $130,673/3/                 16
 4660 La Jolla Village
 Drive
 Suite 725
 San Diego, CA 92122
 Age: 65
---------------------------------------------------------------------------
 Leonard R. Fuller                     $   89,873                  13
 4337 Marina City Drive
 Suite 841 ETN
 Marina del Rey, CA 90292
 Age: 54
---------------------------------------------------------------------------
 +*Abner D. Goldstine                     none/4/                  12
 Age: 71

---------------------------------------------------------------------------
 +**Paul G. Haaga, Jr.                    none/4/                  15
 Age: 52

---------------------------------------------------------------------------
 Richard G. Newman                     $106,840/3/                 13
 3250 Wilshire Boulevard
 Los Angeles, CA 90010-1599
 Age: 66
---------------------------------------------------------------------------
 Frank M. Sanchez                      $47,903/3,//4/              12
 5234 Via San Delarro, #1
 Los Angeles, CA 90022
 Age: 57
---------------------------------------------------------------------------
</TABLE>




                          Money Market Funds - Page 14


<PAGE>

 [This page is deliberately left blank for this filing.]


                          Money Market Funds - Page 15


<PAGE>

+ "Interested persons" within the meaning of the 1940 Act on the basis of their
  affiliation with the funds' Investment Adviser, Capital Research and
  Management Company, or the parent company of the Investment Adviser, The
  Capital Group Companies, Inc.


* Address is 11100 Santa Monica Boulevard, Los Angeles, CA 90025
** Address is 333 South Hope Street, Los Angeles, CA 90071

1  Amounts may be deferred by eligible Trustees under a non-qualified deferred
  compensation plan adopted by the fund in 1993. Deferred amounts accumulate at
  an earnings rate determined by the total return of one or more funds in The
  American Funds Group as designated by the Trustees.

2 Capital Research and Management Company manages The American Funds Group
  consisting of 29 funds: AMCAP Fund, Inc., American Balanced Fund, Inc.,
  American High-Income Municipal Bond Fund, Inc., American High-Income Trust,
  American Mutual Fund, Inc., The Bond Fund of America, Inc., The Cash
  Management Trust of America, Capital Income Builder, Inc., Capital World
  Growth and Income Fund, Inc., Capital World Bond Fund, Inc., EuroPacific
  Growth Fund, Fundamental Investors, Inc., The Growth Fund of America, Inc.,
  The Income Fund of America, Inc., Intermediate Bond Fund of America, The
  Investment Company of America, Limited Term Tax-Exempt Bond Fund of America,
  The New Economy Fund, New Perspective Fund, Inc., New World Fund, Inc.,
  SMALLCAP World Fund, Inc., The Tax-Exempt Bond Fund of America, Inc., The
  Tax-Exempt Fund of California, The Tax-Exempt Fund of Maryland, The Tax-Exempt
  Fund of Virginia, The Tax-Exempt Money Fund of America, The U. S. Treasury
  Money Fund of America, U.S. Government Securities Fund and Washington Mutual
  Investors Fund, Inc. Capital Research and Management Company also manages
  American Variable Insurance Series and Anchor Pathway Fund, which serve as the
  underlying investment vehicle for certain variable insurance contracts; and
  Endowments, whose shareholders are limited to (i) any entity exempt from
  taxation under Section 501(c)(3) of the Internal Revenue Code of 1986, as
  amended ("501(c)(3) organization");      (ii) any trust, the present or future
  beneficiary of which is a 501(c)(3) organization, and (iii) any other entity
  formed for the primary purpose of benefiting a 501(c)(3) organization. An
  affiliate of Capital Research and Management Company, Capital International,
  Inc., manages Emerging Markets Growth Fund, Inc.

3 Since the deferred compensation plans' adoption, the total amount of deferred
  compensation accrued by each fund (plus earnings thereon) through the 2000
  fiscal year for participating Trustees is as follows: Richard G. Capen ($1,871
  - CTEX), Martin Fenton ($4,824 - CMTA; $446 - CTEX and $1,065 - CTRS), Richard
  G. Newman ($22,786 - CMTA; $9,769 - CTEX and $11,191 - CTRS) and Frank M.
  Sanchez ($1,397 - CMTA, $416 - CTEX and $313 - CTRS). Amounts deferred and
  accumulated earnings thereon are not funded and are general unsecured
  liabilities of the fund until paid to the Trustee. Amounts deferred and
  accumulated earnings thereon are not funded and are general unsecured
  liabilities of the fund until paid to the Trustees.

4 Don R. Conlan, Abner D. Goldstine, and Paul G. Haaga, Jr. are affiliated with
  the Investment Adviser and, accordingly, receive no compensation from the
  funds.


                          Money Market Funds - Page 16


<PAGE>



                                 OTHER OFFICERS


<TABLE>
<CAPTION>
                               POSITION(S)      PRINCIPAL OCCUPATION(S) DURING
   NAME AND ADDRESS     AGE  WITH REGISTRANT            PAST 5 YEARS#
-------------------------------------------------------------------------------
<S>                     <C>  <C>               <C>
Neil L. Langberg        47   Senior Vice       Vice President - Investment
11100 Santa Monica           President (CTEX)  Management Group, Capital
Blvd.                                          Research and Management Company
Los Angeles, CA 90025
-------------------------------------------------------------------------------
Teresa S. Cook          48   Vice President    Senior Vice President -
333 South Hope Street        (CMTA and CTRS    Investment Management Group,
Los Angeles, CA 90071        only)             Capital Research and Management
                                               Company
-------------------------------------------------------------------------------
Michael J. Downer       46   Vice President    Senior Vice President - Fund
333 South Hope Street                          Business Management Group,
Los Angeles, CA 90071                          Capital Research and Management
                                               Company
-------------------------------------------------------------------------------
Karen F. Hall           35   Assistant         Assistant Vice President -
333 South Hope Street        Vice President    Investment Management Group,
Los Angeles, CA 90071        (CMTA and CTRS    Capital Research and Management
                             only)             Company
-------------------------------------------------------------------------------
Julie F. Williams       52   Secretary         Vice President - Fund Business
333 South Hope Street                          Management Group, Capital
Los Angeles, CA 90071                          Research and Management Company
-------------------------------------------------------------------------------
Susi M. Silverman       31   Treasurer         Vice President - Fund Business
135 South State                                Management Group, Capital
College Blvd.                                  Research and Management Company
Brea, CA 92821
-------------------------------------------------------------------------------
Kimberly S. Verdick     36   Assistant         Assistant Vice President - Fund
333 South Hope Street        Secretary         Business Management Group,
Los Angeles, CA 90071                          Capital Research and Management
                                               Company
-------------------------------------------------------------------------------
</TABLE>


# Positions within the organizations listed may have changed during this period.

All of the officers listed are officers and/or directors/trustees of one or more
of the other funds for which Capital Research and Management Company serves as
Investment Adviser.


No compensation is paid by a fund to any officer or Trustee who is a director,
officer or employee of the Investment Adviser or affiliated companies.


The funds pay annual fees to Trustees who are not affiliated with the Investment
Adviser as follows:   CMTA - $4,000; CTEX - $400 and CTRS - $900.  In addition,
each fund pays $210 for each Board of Trustees meeting attended, and various
Trustees participate with directors and trustees of certain other funds in The
American Funds Group in joint meetings of Contracts Committees, Audit Committees
and Nominating Committees; total fees for attendance at these meetings, which
are prorated among the participants in proportion to the number of funds
represented, are $2,510 for each meeting of the Contracts Committee and $1,000
for each meeting of the Audit and Nominating Committees.


No pension or retirement benefits are accrued as part of fund expenses. The
Trustees may elect, on a voluntary basis, to defer all or a portion of their
fees through a deferred compensation plan in effect for the funds. The fund also
reimburse certain expenses of the Trustees who are not affiliated with the
Investment Adviser. As of February 15, 2001 the officers and Trustees of each


                          Money Market Funds - Page 17

<PAGE>


fund and their families, as a group, owned beneficially or of record less than
1% of the outstanding shares of each fund.


                                   MANAGEMENT

INVESTMENT ADVISER - The Investment Adviser, Capital Research and Management
Company, founded in 1931, maintains research facilities in the U.S. and abroad
(Los Angeles, San Francisco, New York, Washington, D.C., London, Geneva, Hong
Kong, Singapore and Tokyo), with a staff of professionals, many of whom have a
number of years of investment experience. The Investment Adviser is located at
333 South Hope Street, Los Angeles, CA 90071, and at 135 South State College
Boulevard, Brea, CA 92821. The Investment Adviser's research professionals
travel several million miles a year, making more than 5,000 research visits in
more than 50 countries around the world. The Investment Adviser believes that it
is able to attract and retain quality personnel. The Investment Adviser is a
wholly owned subsidiary of The Capital Group Companies, Inc.


The Investment Adviser is responsible for managing more than $300 billion of
stocks, bonds and money market instruments and serves over 11 million
shareholder accounts of all types throughout the world. These investors include
privately owned businesses and large corporations as well as schools, colleges,
foundations and other non-profit and tax-exempt organizations.


INVESTMENT ADVISORY AND SERVICE AGREEMENT - Each fund has an Investment Advisory
and Service Agreement (the "Agreement") with the Investment Adviser which
provides that the Investment Adviser shall determine which securities shall be
purchased or sold by each fund and provides certain services to each fund.


The CMTA Agreement will continue in effect until May 31, 2001, unless sooner
terminated. The CTEX Agreement will continue in effect until October 1, 2001,
unless sooner terminated, and the CTRS Agreement will continue in effect until

October 31, 2001, unless sooner terminated. Each Agreement   may be renewed from
year to year thereafter, provided that any such renewal has been specifically
approved at least annually by (i) the Board of Trustees, or by the vote of a
majority (as defined in the 1940 Act) of the outstanding voting securities of
the fund, and (ii) the vote of a majority of Trustees who are not parties to the
Agreements or interested persons (as defined in the 1940 Act) of any such party,
cast in person at a meeting called for the purpose of voting on such approval.
The Agreements provide that the Investment Adviser has no liability to the funds
for its acts or omissions in the performance of its obligations to the funds not
involving willful misconduct, bad faith, gross negligence or reckless disregard
of its obligations under the Agreements. The Agreements also provide that either
party has the right to terminate them, without penalty, upon 60 days' written
notice to the other party, and that the Agreements automatically terminate in
the event of their assignment (as defined in the 1940 Act).


The Investment Adviser, in addition to providing investment advisory services,
furnishes the services and pays the compensation and travel expenses of persons
to perform the executive, administrative, clerical and bookkeeping functions of
the funds, and provides suitable office space, necessary small office equipment
and utilities, general purpose accounting forms, supplies, and postage used at
the offices of the funds. The funds pay all expenses not assumed by the
Investment Adviser, including, but not limited to, custodian, stock transfer and
dividend disbursing fees and expenses; shareholder recordkeeping and
administrative services; costs of the designing, printing and mailing of
reports, prospectuses, proxy statements, and notices to its


                          Money Market Funds - Page 18

<PAGE>


shareholders; taxes; expenses of the issuance and redemption of shares of the
funds (including stock certificates, registration and qualification fees and
expenses); expenses pursuant to the fund's Plans of Distribution (described
below); legal and auditing expenses; compensation, fees, and expenses paid to
directors unaffiliated with the Investment Adviser; association dues; costs of
stationery and forms prepared exclusively for the funds; and costs of assembling
and storing shareholder account data.


Capital Research and Management Company manages the investment portfolios and
business affairs of the funds and receives an annual fee from each fund as
follows:


     Cash Management Trust:  0.32% on the first $1 billion of average net
     assets; plus 0.29% on average net assets between $1 billion and $2 billion;
     plus 0.27% on average net assets in excess of $2 billion;

     U.S. Treasury Money Fund: 0.30% on the first $800 million of average net
     assets; plus 0.285% on average net assets in excess of $800 million;

     Tax-Exempt Money Fund:  0.39% on the first $200 million of average net
     assets; plus 0.37% on average net assets between $200 million and $600
     million; plus 0.33% on the portion of average net assets between $600
     million and $1.2 billion; plus 0.29% on average net assets in excess of
     $1.2 billion.

The Investment Adviser has agreed to waive its fees by any amount necessary to
assure that such expenses do not exceed applicable expense limitations in any
state in which the funds' shares are being offered for sale.


CMTA The Agreement provides that the Investment Adviser will reimburse CMTA for
----
any expenses incurred by CMTA in any fiscal year, exclusive of interest, taxes,
brokerage costs and extraordinary items such as litigation and acquisitions, to
the extent such expenses exceed the lesser of 25% of gross income for the
preceding year or the sum of (a) 1-1/2% of the average daily net assets of the
preceding year up to and including $30 million, and (b) 1% of any excess of
average daily net assets of preceding year over $30 million.  The Investment
Advisory fee is included as an expense of CMTA and is subject to the expense
limitation described in the preceding sentence.


CTEX The Investment Adviser has agreed that in the event the expenses of the
----
fund (with the exclusion of interest, taxes, brokerage costs, extraordinary
expenses such as litigation and acquisitions or other expenses excludable under
applicable state securities laws or regulations) for any fiscal year ending ona
date on which the Agreement is in effect, exceed the expense limitations, if
any, applicable to the fund pursuant to state securities laws or any regulations
thereunder, it will reduce its fee by the extent of such excess and, if required
pursuant to any such laws or any regulations thereunder, will reimburse the fund
in the amount of such excess.


CTRS The Investment Adviser has agreed to bear any CTRS expenses (with the
----
exception of interest, taxes, brokerage costs and extraordinary expenses such as
litigation and acquisitions) in excess of 0.75% of CTRS's average net assets per
annum, subject to reimbursement by CTRS during a period which will terminate at
the earlier of (i) such time as no reimbursement has been required for a period
of 12 consecutive months, provided no advances are outstanding, or (ii) February
1, 2001.  Additionally, the Investment Adviser voluntarily agreed to waive its
fees to the extent necessary to ensure that fund expenses do not exceed 0.675%
of the average daily


                          Money Market Funds - Page 19

<PAGE>


net assets.  There can be no assurance that this voluntary fee waiver will
continue in the future.  Each month, to the extent CTRS owes money to the
Investment Adviser pursuant to this provision of the Agreement and CTRS'
annualized expense ratio for the month is below 0.75%, CTRS will reimburse the
Investment Adviser until CTRS' annualized expense ratio equals 0.75% or the debt
is repaid, whichever comes first.


Expenses which are not subject to these limitations are interest, taxes, and
extraordinary expenses. Expenditures, including costs incurred in connection
with the purchase or sale of portfolio securities, which are capitalized in
accordance with generally accepted accounting principles applicable to
investment companies are accounted for as capital items and not as expenses. To
the extent CMTA's management fee must be waived due to Class A share expense
ratios exceeding this limit, management fees will be reduced similarly for all
classes of shares of the fund or other Class A fees will be waived in lieu of
management fees.


For the fiscal years ended 2000, 1999, and 1998, the Investment Adviser received
advisory fees from CMTA of $16,005,000, $14,593,000, and $11,113,000,
respectively. For the fiscal years ended 2000, 1999, and 1998, the Investment
Adviser received advisory fees from CTRS of $1,296,000, $1,272,000, and
$875,000, respectively. For the fiscal years ended 2000, 1999, and 1998, the
Investment Adviser received advisory fees from CTEX of $1,055,000, $1,003,000,
and $800,000, respectively.


ADMINISTRATIVE SERVICES AGREEMENT - The Administrative Services Agreement (the
"Administrative Agreement") between CMTA and the Investment Adviser, relating to
CMTA's Class C and F shares, will continue in effect until May 31, 2002, unless
sooner terminated, and may be renewed from year to year thereafter, provided
that any such renewal has been specifically approved at least annually by the
vote of a majority of Trustees who are not parties to the Administrative
Agreement or interested persons (as defined in the 1940 Act) of any such party,
cast in person at a meeting called for the purpose of voting on such approval.
 The Administrative Agreement provides that CMTA may terminate the agreement at
any time by vote of a majority of Trustees who are not interested persons of
CMTA.  The Investment Adviser has the right to terminate the Administrative
Agreement upon 60 days' written notice to CMTA.  The Administrative Agreement
automatically terminates in the event of its assignment (as defined in the 1940
Act).


Under the Administrative Agreement, the Investment Adviser provides certain
transfer agent and administrative services for shareholders of CMTA's Class C
and F shares.  The Investment Adviser contracts with third parties, including
American Funds Service Company, CMTA's Transfer Agent, to provide these
services.  Services include, but are not limited to, shareholder account
maintenance, transaction processing, tax information reporting, and shareholder
and fund communications. In addition, the Investment Adviser monitors,
coordinates and oversees the activities performed by third parties.


As compensation for its services, the Investment Adviser receives transfer agent
fees for transfer agent services provided to CMTA's Class C and F shares.
 Transfer agent fees are paid monthly according to a fee schedule contained in a
Shareholder Services Agreement between CMTA and American Funds Service Company.
 CMTA's Class C and F shares pay only those transfer agent fees that are
attributed to accounts and activities generated by their respective share class.
 The Investment Adviser also receives an administrative services fee for
administrative services provided to CMTA's Class C and F shares.  Administrative
services fees are paid monthly,


                          Money Market Funds - Page 20

<PAGE>


accrued daily and calculated at the annual rate of 0.15% of the average net
assets of CMTA's Class C and F shares.


PRINCIPAL UNDERWRITER AND PLANS OF DISTRIBUTION - American Funds Distributors,
Inc. (the "Principal Underwriter") is the principal underwriter of the fund's
shares. The Principal Underwriter is located at 333 South Hope Street, Los
Angeles, CA 90071, 135 South State College Boulevard, Brea, CA 92821, 3500
Wiseman Boulevard, San Antonio, TX 78251, 8332 Woodfield Crossing Boulevard,
Indianapolis, IN 46240, and 5300 Robin Hood Road, Norfolk, VA 23513.


Each fund has adopted Plans of Distribution (the "Plans"), pursuant to rule
12b-1 under the 1940 Act. The Principal Underwriter receives amounts payable
pursuant to the Plans (see below). In addition, the Principal Underwriter
receives revenues from sales of the fund's shares. For Class B shares, the
Principal Underwriter sells the rights to Class B 12b-1 fees paid by CMTA for
distribution expenses to a third party and receives the revenue remaining after
compensating investment dealers for sales of Class B shares. CMTA also pays the
Principal Underwriter for advancing the immediate service fees paid to qualified
dealers of Class B shares. For Class C shares, the Principal Underwriter
receives any contingent deferred sales charges that apply to Class C shares
during the first year after purchase. CMTA pays the Principal Underwriter for
advancing the immediate service fees and commissions paid to qualified dealers
of Class C shares. For Class F shares, CMTA pays the Principal Underwriter for
advancing the immediate service fees paid to qualified dealers and advisers of
Class F shares.


As required by rule 12b-1 and the 1940 Act, the Plans (together with the
Principal Underwriting Agreement) have been approved by the full Boards of
Trustees and separately by a majority of the trustees who are not "interested
persons" of the funds and who have no direct or indirect financial interest in
the operation of the Plans or the Principal Underwriting Agreement. Potential
benefits of the Plans to the funds include shareholder services, savings to the
fund in transfer agency costs, savings to the funds in advisory fees and other
expenses, benefits to the investment process from growth or stability of assets
and maintenance of a financially healthy management organization. The selection
and nomination of trustees who are not "interested persons" of the fund are
committed to the discretion of the trustees who are not "interested persons"
during the existence of the Plans. The Plans may not be amended to increase
materially the amount spent for distribution without shareholder approval. Plan
expenses are reviewed quarterly and the Plans must be renewed annually by the
Boards of Trustees.


Under the Plans, each fund may expend up to 0.15% of net assets annually for
Class A shares and for Cash Management Trust only, 0.90% of net assets annually
for Class B shares,1.00% of net assets annually for Class C shares, and up to
0.50% of net assets annually for Class F shares, to finance any activity which
is primarily intended to result in the sale of fund shares, provided the fund's
Board of Trustees has approved the category of expenses for which payment is
being made. For Class A shares, up to 0.15% is reimbursed to the Principal
Underwriter for paying service-related expenses, including service fees paid to
qualified dealers. For Class B shares of Cash Management Trust only, (i) 0.15%
is paid to the Principal Underwriter for paying service-related expenses,
including service fees paid to qualified dealers, and (ii) 0.75% is paid to the
Principal Underwrtier for distribution-related expenses, including the financing
of commissions paid to qualified dealers. For Class C shares of Cash Management
Trust only, (i) 0.25% is paid to the Principal Underwriter for paying
service-related expenses, including service fees paid to qualified dealers, and
(ii) 0.75% is paid to the Principal Underwriter for paying distribution-related
expenses, including commissions paid to qualfied dealers. For Class F


                          Money Market Funds - Page 21

<PAGE>


shares of Cash Management Trust only, 0.25% is paid to the Principal Underwriter
for paying service-related expenses, including service fees paid to qualified
dealers or advisers.  Currently, no compensation is paid under the Cash
Management Trust's Class F Plan for distribution-related expenses.


During the 2000 fiscal year, CMTA, CTRS and CTEX paid $4,348,000, $431,000, and
$123,000, respectively, to the Principal Underwriter under the Plan for Class A
shares. During the 2000 fiscal year, distribution expenses under the CMTA Plan
of Distribution for Class were $2,000 (compensation to dealers). As of September
30, 2000, accrued and unpaid distribution expenses for Class A shares were
$296,000, $30,000 and $9,000 for CMTA, CTRS and CTEX, respectively; accrued and
unpaid distribution expenses for CMTA Class B shares were $1,000.


OTHER COMPENSATION TO DEALERS - The Principal Underwriter, at its expense (from
a designated percentage of its income), currently provides additional
compensation to dealers. Currently these payments are limited to the top 100
dealers who have sold shares of the fund or other funds in The American Funds
Group. These payments will be based principally on a pro rata share of a
qualifying dealer's sales. The Principal Underwriter will, on an annual basis,
determine the advisability of continuing these payments.


                       DIVIDENDS, DISTRIBUTIONS AND TAXES

DAILY INCOME DIVIDENDS - A dividend from net investment income is declared each
day on shares of each fund. This dividend is payable to everyone who was a
shareholder at the close of business the previous day. Accordingly, when shares
are purchased dividends begin to accrue on the day following receipt by the
Transfer Agent of payment for the shares; when shares are redeemed, the shares
are entitled to the dividend declared on the day the redemption request is
received by the Transfer Agent. Dividends are automatically reinvested in shares
of the same class, on the last business day of the month, at net asset value
(without sales charge), unless a shareholder otherwise instructs the Transfer
Agent in writing. Shareholders so requesting will be mailed checks in the amount
of the accumulated dividends.


Under the penny-rounding method of pricing (see "Purchase of Shares"), each fund
rounds its per share net asset value to the nearer cent to maintain a stable net
asset value of $1.00 per share. Accordingly its share price ordinarily would not
reflect realized or unrealized gains or losses unless such gains or losses were
to cause the net asset value to deviate from $1.00 by one half-cent or more.
Pursuant to Securities and Exchange Commission regulations, the Trustees have
undertaken, as a particular responsibility within their overall duty of care
owed to shareholders, to assure to the extent reasonably practicable that each
fund's net asset value per share, rounded to the nearer cent, will not deviate
from $1.00. Among the steps that could be taken to maintain the net asset value
at $1.00 when realized or unrealized gains or losses approached one half-cent
per share would be to reflect all or a portion of such gains or losses in the
daily dividends declared. This would cause the amount of the daily dividends to
fluctuate and to deviate from a fund's net investment income for those days, and
could cause the dividend for a particular day to be negative. In that event a
fund would offset any such amount against the dividends that had been accrued
but not yet paid for that month. Alternatively, each fund has reserved the right
to adjust its total number of shares outstanding, if deemed advisable by the
Trustees, in order to maintain the net asset value of its shares at $1.00. This
would be done either by regarding each shareholder as having contributed to the
capital of the fund the number of full and fractional shares that
proportionately represents the excess, thereby reducing the number of
outstanding shares, or by declaring a stock dividend and increasing the number
of


                          Money Market Funds - Page 22

<PAGE>


outstanding shares. Each shareholder will be deemed to have agreed to such
procedure by investing in a fund. Such action would not change a shareholder's
pro rata share of net assets, but would reflect the increase or decrease in the
value of the shareholder's holdings which resulted from the change in net asset
value.


The funds do not ordinarily realize short- or long-term capital gains or losses
on sales of securities. If a fund should realize gains or losses, it would
distribute to shareholders all of the excess of net long-term capital gain over
net short-term capital loss on sales of securities. Although each fund generally
maintains a stable net asset value of $1.00 per share, if the net asset value of
shares of a fund should, by reason of a distribution of realized capital gains,
be reduced below a shareholder's cost, such distribution would in effect be a
return of capital to that shareholder even though taxable to the shareholder,
and a sale of shares by a shareholder at net asset value at that time would
establish a capital loss for federal tax purposes. See also "Purchase of Shares"
below.


STATE TAXES - Information relating to the percentage of CTEX's income derived
from securities issued in a particular state is provided after year end.


Since all of CTRS' dividends are expected to be attributable to income on U.S.
Treasury securities, they are generally exempt from state personal income taxes.
Also, some states do not have personal income taxes. CTRS believes that, as of
the date of this publication, neither the District of Columbia nor any state
impose an income tax on dividends attributable to income on U.S. Treasury
securities paid by the fund to individuals. However, other taxes may apply to
dividends paid by CTRS to individual shareholders. Further, any distributions of
capital gains may not be exempt from income taxes. Because tax laws vary from
state to state and may change over time, you should consult your tax adviser or
state tax authorities regarding the tax status of distributions from CTRS.
Corporate shareholders may be subject to income tax or other types of tax on
dividends they receive, even in those states that do not impose an income tax on
distributions to individual shareholders of CTRS. Corporate shareholders should
therefore seek advice from their tax adviser regarding the tax treatment of
distributions from CTRS.

                    ADDITIONAL INFORMATION CONCERNING TAXES

The following is only a summary of certain additional federal, state and local
tax considerations generally affecting CTEX and its shareholders. No attempt is
made to present a detailed explanation of the tax treatment of CTEX or its
shareholders, and the discussion here and in the funds' prospectus is not
intended as a substitute for careful tax planning. Investors should consult
their own tax advisers for additional details as to their particular tax
situations.


CTEX

GENERAL - CTEX is not intended to constitute a balanced investment program and
is not designed for investors seeking capital appreciation or maximum tax-exempt
income irrespective of fluctuations in principal. Shares of CTEX would generally
not be suitable for tax-exempt institutions or tax-deferred retirement plans
(e.g., employer-sponsored plans and IRAs). Such retirement plans would not gain
any benefit from the tax-exempt nature of CTEX's dividends because such
dividends would be ultimately taxable to beneficiaries when distributed to them.


In addition, CTEX may not be an appropriate investment for entities which are
"substantial users" of facilities financed by private activity bonds or "related
persons" thereof. "Substantial user" is


                          Money Market Funds - Page 23

<PAGE>


defined under U.S. Treasury Regulations to include a non-exempt person who
regularly uses a part of such facilities in his trade or business and whose
gross revenues derived with respect to the facilities financed by the issuance
of bonds are more than 5% of the total revenues derived by all users of such
facilities, or who occupies more than 5% of the usable area of such facilities
or for whom such facilities or a part thereof were specifically constructed,
reconstructed or acquired. "Related persons" include certain related natural
persons, affiliated corporations, partnerships and their partners and S
Corporations and their shareholders.


The percentage of total dividends paid by CTEX with respect to any taxable year
which qualify for exclusion from gross income ("exempt-interest dividends") will
be the same for all shareholders receiving dividends during such year. In order
for CTEX to pay exempt-interest dividends during any taxable year, at the close
of each fiscal quarter at least 50% of the aggregate value of CTEX's assets must
consist of tax-exempt securities. Not later than 60 days after the close of its
taxable year, CTEX will notify each shareholder of the portion of the dividends
paid by CTEX to the shareholder with respect to such taxable year which
constitutes exempt-interest dividends. Shareholders are required by the Code to
report to the federal government all exempt-interest dividends received from the
fund. The aggregate amount of dividends so designated cannot, however, exceed
the excess of the amount of interest excludable from gross income from tax under
Section 103 of the Code received by CTEX during the taxable year over any
amounts disallowed as deductions under Sections 265 and 171(a)(2) of the Code.


Interest on indebtedness incurred by a shareholder to purchase or carry CTEX
shares is not deductible for federal income tax purposes if CTEX distributes
exempt-interest dividends during the shareholder's taxable year. Although CTEX
normally maintains a constant net asset value of $1.00 per share, in the event a
shareholder receives an exempt-interest dividend with respect to any share and
such share is held for six months or less, and is sold or exchanged at a loss,
such loss will be disallowed to the extent of the amount of such exempt-interest
dividend.


                          Money Market Funds - Page 24

<PAGE>


                               PURCHASE OF SHARES


<TABLE>
<CAPTION>
        METHOD            INITIAL INVESTMENT        ADDITIONAL INVESTMENTS
-------------------------------------------------------------------------------
<S>                     <C>                     <C>
                        See "Purchase           $50 minimum (except where a
                        Minimums" for initial   lower minimum is noted under
                        investment minimums.    "Purchase Minimums").
-------------------------------------------------------------------------------
By contacting           Visit any investment    Mail directly to your
your investment dealer  dealer who is           investment dealer's address
                        registered in the       printed on your account
                        state where the         statement.
                        purchase is made and
                        who has a sales
                        agreement with
                        American Funds
                        Distributors.
-------------------------------------------------------------------------------
By mail                 Make your check         Fill out the account additions
                        payable to the fund     form at the bottom of a recent
                        and mail to the         account statement, make your
                        address indicated on    check payable to the fund,
                        the account             write your account number on
                        application. Please     your check, and mail the check
                        indicate an investment  and form in the envelope
                        dealer on the account   provided with your account
                        application.            statement.
-------------------------------------------------------------------------------
By telephone            Please contact your     Complete the "Investments by
                        investment dealer to    Phone" section on the account
                        open account, then      application or American
                        follow the procedures   FundsLink Authorization Form.
                        for additional          Once you establish the
                        investments.            privilege, you, your financial
                                                advisor or any person with your
                                                account information can call
                                                American FundsLine(R) and make
                                                investments by telephone
                                                (subject to conditions noted in
                                                "Shareholder Account Services
                                                and Privileges - Telephone and
                                                Computer Purchases, Redemptions
                                                and Exchanges" below).
-------------------------------------------------------------------------------
By computer             Please contact your     Complete the American FundsLink
                        investment dealer to    Authorization Form. Once you
                        open account, then      established the privilege, you,
                        follow the procedures   your financial advisor or any
                        for additional          person with your account
                        investments.            information may access American
                                                FundsLine OnLine(R) on the
                                                Internet and make investments
                                                by computer (subject to
                                                conditions noted in
                                                "Shareholder Account Services
                                                and Privileges - Telephone and
                                                Computer Purchases, Redemptions
                                                and Exchanges" below).
-------------------------------------------------------------------------------
By wire                 Call 800/421-0180 to    Your bank should wire your
                        obtain your account     additional investments in the
                        number(s), if           same manner as described under
                        necessary. Please       "Initial Investment."
                        indicate an investment
                        dealer on the account.
                        Instruct your bank to
                        wire funds to:

                        Wells Fargo Bank
                        155 Fifth Street,
                        Sixth Floor
                        San Francisco, CA
                        94106
                        (ABA#121000248)

                        For credit to the
                        account of:
                        American Funds Service
                        Company a/c#
                        4600-076178
                        (fund name)
                        (your fund acct. no.)
-------------------------------------------------------------------------------
</TABLE>


The funds and the Principal Underwriter reserve the right to reject any purchase
order.  Generally, Class F shares may only be purchased through fee-based
programs of investment firms and registered investment advisers who have special
agreements with the fund's distributor.  Class B and C shares are generally not
available to certain employer-sponsored retirement plans, such as 401(k) plans,
employer-sponsored 403(b) plans, and money purchase


                          Money Market Funds - Page 25

<PAGE>


pension and profit sharing plans.  In addition, the state tax-exempt funds are
only offered in certain states and tax-exempt funds in general should not serve
as retirement plan investments.


PURCHASE MINIMUMS - The minimum initial investment for all funds in The American
Funds Group, except the money market funds and the state tax-exempt funds, is
$250.  The minimum initial investment for the money market funds (The Cash
Management Trust of America, The Tax-Exempt Money Fund of America, and The U.S.
Treasury Money Fund of America) and the state tax-exempt funds (The Tax-Exempt
Fund of California, The Tax-Exempt Fund of Maryland, and The Tax-Exempt Fund of
Virginia) is $1,000. Purchase minimums are reduced to $50 for purchases through
"Automatic Investment Plans" (except for the money market funds) or to $25 for
purchases by retirement plans through payroll deductions and may be reduced or
waived for shareholders of other funds in The American Funds Group. The minimum
is $50 for additional investments (except for retirement plan payroll deductions
as noted above).


PURCHASE MAXIMUM FOR CLASS B SHARES - The maximum purchase order for Class B
shares for all American Funds is $100,000. For investments above $100,000, Class
A shares are generally a less expensive option over time due to sales charge
reductions or waivers.


PURCHASE MAXIMUM FOR CLASS C SHARES - The maximum purchase order for Class C
shares for all American Funds is $500,000.


FUND NUMBERS - Here are the fund numbers for use with our automated phone line,
American FundsLine/(R)/ (see description below):

<TABLE>
<CAPTION>
                                                  FUND      FUND      FUND       FUND
                                                 NUMBER    NUMBER    NUMBER     NUMBER
FUND                                            CLASS A   CLASS B   CLASS C    CLASS F
----------------------------------------------------------------------------------------
<S>                                             <C>       <C>       <C>       <C>
STOCK AND STOCK/BOND FUNDS
AMCAP Fund/(R)/ . . . . . . . . . . . . . . .      02       202       302        402
American Balanced Fund/(R)/ . . . . . . . . .      11       211       311        411
American Mutual Fund/(R)/ . . . . . . . . . .      03       203       303        403
Capital Income Builder/(R)/ . . . . . . . . .      12       212       312        412
Capital World Growth and Income Fund/SM/  . .      33       233       333        433
EuroPacific Growth Fund/(R)/  . . . . . . . .      16       216       316        416
Fundamental Investors/SM/ . . . . . . . . . .      10       210       310        410
The Growth Fund of America/(R)/ . . . . . . .      05       205       305        405
The Income Fund of America/(R)/ . . . . . . .      06       206       306        406
The Investment Company of America/(R)/  . . .      04       204       304        404
The New Economy Fund/(R)/ . . . . . . . . . .      14       214       314        414
New Perspective Fund/(R)/ . . . . . . . . . .      07       207       307        407
New World Fund/SM/  . . . . . . . . . . . . .      36       236       336        436
SMALLCAP World Fund/(R)/  . . . . . . . . . .      35       235       335        435
Washington Mutual Investors Fund/SM/  . . . .      01       201       301        401
BOND FUNDS
American High-Income Municipal Bond Fund/(R)/      40       240       340        440
American High-Income Trust/SM/  . . . . . . .      21       221       321        421
The Bond Fund of America/SM/  . . . . . . . .      08       208       308        408
Capital World Bond Fund/(R)/  . . . . . . . .      31       231       331        431
Intermediate Bond Fund of America/SM/ . . . .      23       223       323        423
Limited Term Tax-Exempt Bond Fund of
America/SM/ . . . . . . . . . . . . . . . . .      43       243       343        443
The Tax-Exempt Bond Fund of America/(R)/  . .      19       219       319        419
The Tax-Exempt Fund of California/(R)/* . . .      20       220       320        420
The Tax-Exempt Fund of Maryland/(R)/* . . . .      24       224       324        424
The Tax-Exempt Fund of Virginia/(R)/* . . . .      25       225       325        425
U.S. Government Securities Fund/SM/ . . . . .      22       222       322        422
MONEY MARKET FUNDS
The Cash Management Trust of America/(R)/ . .      09       209       309        409
The Tax-Exempt Money Fund of America/SM/  . .      39       N/A       N/A        N/A
The U.S. Treasury Money Fund of America/SM/ .      49       N/A       N/A        N/A
___________
*Available only in certain states.
</TABLE>



                          Money Market Funds - Page 26

<PAGE>


                                 SALES CHARGES

CLASS A SALES CHARGES - The sales charges you pay when purchasing Class A shares
of stock, stock/bond, and bond funds of The American Funds Group are set forth
below. The money market funds of The American Funds Group are offered at net
asset value. (See "Fund Numbers" for a listing of the funds.)

<TABLE>
<CAPTION>
                                                                                       DEALER
                                                               SALES CHARGE AS       CONCESSION
                                                              PERCENTAGE OF THE:    AS PERCENTAGE
                                                              ------------------       OF THE
AMOUNT OF PURCHASE
AT THE OFFERING PRICE                                        NET AMOUNT  OFFERING     OFFERING
                                                             -INVESTED-   PRICE         PRICE
------------------------------------------------------------- --------    -----         -----
<S>                                                          <C>         <C>       <C>
STOCK AND STOCK/BOND FUNDS
Less than $25,000  . . . . . . . . . . . . . . . . . . . .     6.10%      5.75%         5.00%
$25,000 but less than $50,000  . . . . . . . . . . . . . .     5.26       5.00          4.25
$50,000 but less than $100,000. .                              4.71       4.50          3.75
BOND FUNDS
Less than $100,000 . . . . . . . .                             3.90       3.75          3.00
STOCK, STOCK/BOND, AND BOND FUNDS
$100,000 but less than $250,000 .                              3.63       3.50          2.75
$250,000 but less than $500,000 .                              2.56       2.50          2.00
$500,000 but less than $750,000 .                              2.04       2.00          1.60
$750,000 but less than $1 million                              1.52       1.50          1.20
$1 million or more . . . . . . . . . .        none     none    (see below)
-----------------------------------------------------------------------------
</TABLE>


CLASS A PURCHASES NOT SUBJECT TO SALES CHARGES - Investments of $1 million or
more are sold with no initial sales charge.  HOWEVER, A 1% CONTINGENT DEFERRED
SALES CHARGE (CDSC) MAY BE


                          Money Market Funds - Page 27

<PAGE>


IMPOSED IF REDEMPTIONS ARE MADE WITHIN ONE YEAR OF PURCHASE. Employer-sponsored
defined contribution-type plans investing $1 million or more, or with 100 or
more eligible employees, and Individual Retirement Account rollovers from
retirement plans with assets invested in the American Funds may invest with no
sales charge and are not subject to a CDSC.  403(b) plans may be treated as
employer-sponsored plans for sales charge purposes if: (i) the American Funds
are principal investment options; (ii) the employer facilitates the enrollment
process by, for example, allowing for onsite group enrollment meetings held
during working hours; and (iii) there is only one dealer firm assigned to the
plans.  403(b) plans meeting these criteria may invest with no sales charge and
are not subject to a CDSC if investing $1 million or more or having 100 or more
eligible employees.


Investments made through accounts that purchased Class A shares of the fund
before March 15, 2001 and are part of certain qualified fee-based programs, and
retirement plans, endowments or foundations with $50 million or more in assets,
may also be made with no sales charge and are not subject to a CDSC.  A dealer
concession of up to 1% may be paid by the fund under its Class A Plan of
Distribution on investments made with no initial sales charge.


In addition, Class A shares of the stock, stock/bond and bond funds may be sold
at net asset value to:


(1)  current or retired directors, trustees, officers and advisory board members
of, and certain lawyers who provide services to, the funds managed by Capital
Research and Management Company, current or retired employees of Washington
Management Corporation, current or retired employees and partners of The Capital
Group Companies, Inc. and its affiliated companies, certain family members and
employees of the above persons, and trusts or plans primarily for such persons;

(2)  current registered representatives, retired registered representatives with
respect to accounts established while active, or full-time employees (and their
spouses, parents, and children) of dealers who have sales agreements with the
Principal Underwriter (or who clear transactions through such dealers) and plans
for such persons or the dealers;

(3)  companies exchanging securities with the fund through a merger, acquisition
or exchange offer;

(4)  insurance company separate accounts;

(5)  accounts managed by subsidiaries of The Capital Group Companies, Inc.;

(6)  The Capital Group Companies, Inc., its affiliated companies and Washington
Management Corporation; and

(7)	wholesalers and full-time employees directly supporting wholesalers
involved in the distribution of insurance company separate accounts whose
underlying investments are managed by any affiliate of The Capital Group
Companies, Inc.


Shares are offered at net asset value to these persons and organizations due to
anticipated economies in sales effort and expense.


                          Money Market Funds - Page 28

<PAGE>


CONTINGENT DEFERRED SALES CHARGE ON CLASS A AND C SHARES -  Except as described
above, a CDSC of 1% applies to redemptions of Class A shares of the American
Funds, other than the money market funds, made within 12 months following the
purchase of Class A shares of $1 million or more made without an initial sales
charge.  A CDSC of 1% also applies to redemptions of Class C shares of the
American Funds made within 12 months following the purchase of the Class C
shares. The charge is 1% of the lesser of the value of the shares redeemed
(exclusive of reinvested dividends and capital gain distributions) or the total
cost of such shares.  Shares held the longest are assumed to be redeemed first
for purposes of calculating this CDSC. The CDSC may be waived in certain
circumstances.  See "CDSC Waivers for Class A and C Shares" below.


CLASS B SALES CHARGES - Class B shares are sold without any initial sales
charge.  However, a CDSC may be applied to shares you sell within six years of
purchase, as shown in the table below:



<TABLE>
<CAPTION>
 CONTINGENT DEFERRED SALES CHARGE ON
       SHARES SOLD WITHIN YEAR               AS A % OF SHARES BEING SOLD
 ------------------------------------------------------------------------------
 <S>                                  <C>
                  1                                     5.00%
                  2                                     4.00%
                  3                                     4.00%
                  4                                     3.00%
                  5                                     2.00%
                  6                                     1.00%
</TABLE>



There is no CDSC on appreciation in share value above the initial purchase price
or on shares acquired through reinvestment of dividends or capital gain
distributions.  In addition, the CDSC may be waived in certain circumstances.
 See "CDSC Waivers for Class B shares" below.  The CDSC is based on the original
purchase cost or the current market value of the shares being sold, whichever is
less.  In processing redemptions of Class B shares, shares that are not subject
to any CDSC will be redeemed first followed by shares that you have owned the
longest during the six-year period.


CLASS F SALES CHARGE - Class F shares are sold with no initial or contingent
deferred sales charge.


DEALER COMMISSIONS AND COMPENSATION - For Class A shares, commissions (up to 1%)
are paid to dealers who initiate and are responsible for purchases of $1 million
or more, for purchases by any employer-sponsored defined contribution-type plan
investing $1 million or more or with 100 or more eligible employees, and for
purchases made at net asset value by certain retirement plans, endowments and
foundations with assets of $50 million or more.  Commissions on investments in
Class A shares are paid at the following rates: 1.00% on amounts of $1 million
to $4 million, 0.50% on amounts over $4 million to $10 million, and 0.25% on
amounts over $10 million. Commissions are based on cumulative investments and
are not annually reset.


For Class B shares, compensation equal to 4.00% of the amount invested is paid
by the Principal Underwriter to dealers who sell Class B shares.


                          Money Market Funds - Page 29

<PAGE>


For Class C shares, compensation equal to 1.00% of the amount invested is paid
by the Principal Underwriter to dealers who sell Class C shares.


CONVERSION OF CLASS B AND C SHARES - Class B shares automatically convert to
Class A shares in the month of the eight-year anniversary of the purchase date.
 Class C shares automatically convert to Class F shares in the month of the
ten-year anniversary of the purchase date. The conversion of shares is subject
to the Internal Revenue Service's continued position that the conversions are
not subject to federal income tax.  In the event the Internal Revenue Service no
longer takes this position, the automatic conversion feature may be suspended,
in which event no further conversions of Class B or C shares would occur while
such suspension remained in effect.  In that event, at your option, Class B
shares could be exchanged for Class A shares and Class C shares for Class F
shares on the basis of the relative net asset values of the two classes, without
the imposition of a sales charge or fee; however, such an exchange could
constitute a taxable event for you. Absent such an exchange, Class B and C
shares would continue to be subject to higher expenses for longer than eight
years and ten years, respectively.


                      SALES CHARGE REDUCTIONS AND WAIVERS

REDUCING YOUR CLASS A SALES CHARGE - You and your "immediate family" (your
spouse and your children under age 21) may combine investments to reduce your
costs. You must let your investment dealer or American Funds Service Company
(the "Transfer Agent") know if you qualify for a reduction in your sales charge
using one or any combination of the methods described below.


     STATEMENT OF INTENTION - You may enter into a non-binding commitment to
     purchase shares of a fund(s) over a 13-month period and receive the same
     sales charge as if all shares had been purchased at once. This includes
     purchases made during the previous 90 days, but does not include future
     appreciation of your investment or reinvested distributions. The reduced
     sales charges and offering prices set forth in the Prospectus apply to
     purchases of $25,000 or more for equity funds and $100,000 or more for bond
     funds made within a 13-month period subject to the following statement of
     intention (the "Statement"). The Statement is not a binding obligation to
     purchase the indicated amount.

     When a shareholder elects to use a Statement in order to qualify for a
     reduced sales charge, shares equal to 5% of the dollar amount specified
     in the Statement will be held in escrow in the shareholder's account
     out of the initial purchase (or subsequent purchases, if necessary)
     by the Transfer Agent. All dividends and any capital gain distributions
     on shares held in escrow will be credited to the shareholder's account
     in shares (or paid in cash, if requested). If the intended investment
     is not completed within the specified 13-month period, the purchaser
     will remit to the Principal Underwriter the difference between the
     sales charge actually paid and the sales charge which would have been
     paid if the total of such purchases had been made at a single time.
     The dealer assigned to the account at the end of the period will
     receive an appropriate commission adjustment. If the difference is not
     paid by the close of the Statement period, the appropriate number of
     shares held in escrow will be redeemed to pay such difference. If the
     proceeds from this redemption are inadequate, the purchaser will be
     liable to the Principal Underwriter for the balance still outstanding.

     The Statement may be revised upward at any time during the 13-month period,
     and such a revision will be treated as a new Statement, except that the
     13-month period during which the purchase must be made will remain
     unchanged. Accordingly, upon your


                          Money Market Funds - Page 30

<PAGE>


     request, the sales charge paid on investments made 90 days prior to the
     Statement revision will be adjusted to reflect the revised Statement.

     Existing holdings eligible for rights of accumulation (see below),
     including Class A shares held in a fee-based arrangement, other classes of
     shares of the American Funds, and any individual investments in American
     Legacy variable annuities and variable life insurance policies (American
     Legacy, American Legacy II and American Legacy III variable annuities,
     American Legacy Life, American Legacy Variable Life, and American Legacy
     Estate Builder) may be credited toward satisfying the Statement.

     During the Statement period reinvested dividends and capital gain
     distributions, investments in money market funds, and investments made
     under a right of reinstatement will not be credited toward satisfying the
     Statement. The Statement will be considered completed if the shareholder
     dies within the 13-month Statement period. Commissions will not be adjusted
     or paid on the difference between the Statement amount and the amount
     actually invested before the shareholder's death.

     When the trustees of certain retirement plans purchase shares by payroll
     deduction, the sales charge for the investments made during the 13-month
     period will be handled as follows: the regular monthly payroll deduction
     investment will be multiplied by 13 and then multiplied by 1.5. The current
     value of existing American Funds investments (other than money market fund
     investments) and any rollovers or transfers reasonably anticipated to be
     invested in non-money market American Funds during the 13-month period, and
     any individual investments in American Legacy variable annuities and
     variable life insurance policies are added to the figure determined above.
     The sum is the Statement amount and applicable breakpoint level. On the
     first investment and all other investments made pursuant to the Statement,
     a sales charge will be assessed according to the sales charge breakpoint
     thus determined. There will be no retroactive adjustments in sales charges
     on investments made during the 13-month period.

     Shareholders purchasing shares at a reduced sales charge under a Statement
     indicate their acceptance of these terms with their first purchase.

     AGGREGATION - Sales charge discounts are available for certain aggregated
     investments. Qualifying investments include those made by you and your
     immediate family (your spouse and your children under the age of 21), if
     all parties are purchasing shares for their own accounts and/or:

     .    individual-type employee benefit plan(s), such as an IRA, 403(b) plan
          (see exception below), or single-participant Keogh-type plan;

     .    business accounts solely controlled by you or your immediate family
          (for example, you own the entire business);

     .    trust accounts established by you or your immediate family.  However,
          if the person(s) who established the trust is deceased, the trust
          account may be aggregated with accounts of the person who is the
          primary beneficiary of the trust; or

     .    endowments or foundations established and controlled by you or your
          immediate family.


                          Money Market Funds - Page 31

<PAGE>


     Individual purchases by a trustee(s) or other fiduciary(ies) may also be
     aggregated if the investments are:

     .    for a single trust estate or fiduciary account, excluding
          individual-type employee benefit plans described above;

     .    made for two or more employee benefit plans of a single employer or of
          affiliated employers as defined in the 1940 Act, again excluding
          individual-type employee benefit plans described above;

     .    for a diversified common trust fund or other diversified pooled
          account not specifically formed for the purpose of accumulating fund
          shares;

     .    for non-profit, charitable or educational organizations (or any
          employer-sponsored retirement plan for such an endowment or
          foundation) or any endowments or foundations established and
          controlled by the organization; or

     .    for participant accounts of a 403(b) plan that is treated as an
          employer-sponsored plan (see "Class A Purchases Not Subject to Sales
          Charges" above), or made for two or more 403(b) plans that are treated
          as employer-sponsored plans of a single employer or affiliated
          employers as defined in the 1940 Act.

     Purchases made for nominee or street name accounts (securities held in the
     name of an investment dealer or another nominee such as a bank trust
     department instead of the customer) may not be aggregated with those made
     for other accounts and may not be aggregated with other nominee or street
     name accounts unless otherwise qualified as described above.

     CONCURRENT PURCHASES - You may combine purchases of all classes of shares
     of two or more funds in The American Funds Group, as well as individual
     holdings in American Legacy variable annuities and variable life insurance
     policies.  Shares of money market funds purchased through an exchange,
     reinvestment or cross-reinvestment from a fund having a sales charge also
     qualify. However, direct purchases of the money market funds are excluded.

     RIGHTS OF ACCUMULATION - You may take into account the current value (or if
     greater, the amount you invested less any withdrawals) of your existing
     holdings in all share classes of The American Funds Group, as well as your
     holdings in Endowments (shares of which may be owned only by tax-exempt
     organizations), to determine your sales charge on investments in accounts
     eligible to be aggregated, or when making a gift to an individual or
     charity. When determining your sales charge, you may also take into account
     the value of your individual holdings, as of the end of the week prior to
     your investment, in various American Legacy variable annuities and variable
     life insurance policies. Direct purchases of the money market funds are
     excluded.

CDSC WAIVERS FOR CLASS A AND C SHARES -  Any CDSC on Class A and C shares may be
waived in the following cases:


(1)  Exchanges (except if shares acquired by exchange are then redeemed within
12 months of the initial purchase).


                          Money Market Funds - Page 32

<PAGE>


(2)  Distributions from 403(b) plans or IRAs due to death, post-purchase
disability or attainment of age 59-1/2.

(3)  Tax-free returns of excess contributions to IRAs.

(4)  Redemptions through systematic withdrawal plans (see "Automatic
Withdrawals" below), not exceeding 12% each year of the lesser of the original
purchase cost or the current market value of the shares being sold that would
otherwise be subject to a CDSC.

CDSC WAIVERS FOR CLASS B SHARES - Any CDSC on Class B shares may be waived in
the following cases:


(1)  Redemptions through systematic withdrawal plans ("SWPs") (see "Automatic
Withdrawals" below) not exceeding 12% each year of the lesser of the original
purchase cost or the current market value of the shares being sold that would
otherwise be subject to a CDSC. Shares not subject to a CDSC (such as shares
representing reinvestment of distributions) will be redeemed first and will
count toward the 12% limitation.  If there are insufficient shares not subject
to a CDSC, shares subject to the lowest CDSC will be redeemed next until the 12%
limit is reached.
 <?r>
The 12% fee from CDSC limit is calculated on a pro rata basis at the time the
first payment is made and is recalculated thereafter on a pro rata basis at the
time of each SWP payment.  Shareholders who establish a SWP should be aware that
the amount of that payment not subject to a CDSC may vary over time depending on
fluctuations in net asset value of their account.  This privilege may be revised
or terminated at any time.


(2)  Required minimum distributions taken from retirement accounts upon the
attainment of age 70-1/2.

(3)  Distributions due to death or post-purchase disability of a shareholder. In
the case of joint tenant accounts, if one joint tenant dies, the surviving joint
tenant(s), at the time they notify the Transfer Agent of the decedent's death
and remove his/her name from the account, may redeem shares from the account
without incurring a CDSC. Redemptions subsequent to the notification to the
Transfer Agent of the death of one of the joint owners will be subject to a
CDSC.

                 INDIVIDUAL RETIREMENT ACCOUNT (IRA) ROLLOVERS

Assets from a retirement plan (plan assets) may be invested in any class of
shares of the American Funds (except as described below) through an IRA
rollover plan. All such rollover investments will be subject to the terms
and conditions for Class A, B, C and F shares contained in the fund's
current prospectus and statement of additional information. An IRA rollover
involving plan assets that offered an investment option managed by any
affiliate of The Capital Group Companies, Inc., including any of the
American Funds, may be invested in Class A shares at net asset value and
will not be subject to a contingent deferred sales charge.  Dealers who
initiate and are responsible for such investments will be compensated
pursuant to the schedule applicable to Class A share investments of
$1 million or more (see "Dealers Commissions and Compensation" above).



                                PRICE OF SHARES

Shares are purchased at the offering price next determined after the purchase
order is received and accepted by the fund or the Transfer Agent; this offering
price is effective for orders received prior to the time of determination of the
net asset value and, in the case of orders placed with dealers, accepted by the
Principal Underwriter, the Transfer Agent or either of their designees. In the
case of orders sent directly to the fund or the Transfer Agent, an investment
dealer MUST be indicated. The dealer is responsible for promptly transmitting
purchase orders to the Principal Underwriter.


                          Money Market Funds - Page 33

<PAGE>


Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving and Christmas Day.


The valuation of each fund's portfolio securities and calculation of its net
asset value are based upon the penny-rounding method of pricing pursuant to
Securities and Exchange Commission regulations.  Under the Securities and
Exchange Commission regulations permitting the use of the penny-rounding method
of pricing, each fund must maintain a dollar-weighted average portfolio maturity
of 90 days or less, purchase instruments having remaining maturities of 13
months or less only (25 months or less in the case of U.S. Government
securities), and invest only in securities determined by the Board of Trustees
to be of high quality with minimal credit risks.


1.   All securities with 60 days or less to maturity are amortized to maturity
based on their cost if acquired within 60 days of maturity, or if already held
on the 60th day, based on the value determined on the 61st day.  The maturities
of variable or floating rate instruments, with the right to resell them at an
agreed-upon price to the issuer or dealer, are deemed to be the time remaining
until the later of the next interest adjustment date or until they can be
resold.

Other securities with more than 60 days remaining to maturity are valued at
prices obtained from a pricing service selected by the Investment Adviser,
except that, where such prices re not available or where the Investment Adviser
has determined that such prices do not reflect current market value, they are
valued at the mean between current bid and ask quotations obtained from one or
more dealers in such securities.


Where market prices or market quotations are not readily available, securities
are valued at fair value as determined in good faith by the Board of Trustees or
a committee thereof.  The fair value of all other assets is added to the value
of securities to arrive at the total assets;


2.   There are deducted from the total assets, thus determined, the liabilities,
including proper accruals of expense items; and

3.   The net assets so obtained are then divided by the total number of shares
outstanding, and the result, rounded to the nearer cent, is the net asset value
per share.  The net asset value of each share will normally remain constant at
$1.00.

In case of orders sent directly to a fund or American Funds Service Company, an
investment dealer MUST be indicated.  Any purchase order may be rejected by the
Principal Underwriter or by the funds.


                                 SELLING SHARES

Shares are sold at the net asset value next determined after your request is
received in good order by the Transfer Agent. Sales of certain Class A, B and C
shares may be subject to a CDSC.  Generally, Class F shares may only be sold
through fee-based programs of investment firms and registered investment
advisers with special agreements with the fund's distributor.


                          Money Market Funds - Page 34

<PAGE>


You may sell (redeem) other classes of shares in your account in any of the
following ways:


     THROUGH YOUR DEALER (certain charges may apply)

     -     Shares held for you in your dealer's street name must be sold
           through the dealer.

     WRITING TO AMERICAN FUNDS SERVICE COMPANY

     -     Requests must be signed by the registered shareholder(s).

     -     A signature guarantee is required if the redemption is:

          -  Over $50,000;

          -  Made payable to someone other than the registered
             shareholder(s); or

          -  Sent to an address other than the address of record, or an address
            of record which has been changed within the last 10 days.

          Your signature may be guaranteed by a domestic stock exchange or the
          National Association of Securities Dealers, Inc., bank, savings
          association or credit union that is an eligible guarantor institution.
          The Transfer Agent reserves the right to require a signature guarantee
          on any redemptions.


     -    Additional documentation may be required for sales of shares held in
          corporate, partnership or fiduciary accounts.

     -    You must include any shares you wish to sell that are in
          certificate form.

     TELEPHONING OR FAXING AMERICAN FUNDS SERVICE COMPANY, OR BY USING AMERICAN
     FUNDSLINE/(R)/ OR AMERICAN FUNDSLINE ONLINE/(R)/

     -    Redemptions by telephone or fax (including American FundsLine/(R)/ and
          American FundsLine OnLine/(R)/) are limited to $50,000 per shareholder
          each day.

     -     Checks must be made payable to the registered shareholder(s).

     -    Checks must be mailed to an address of record that has been used with
          the account for at least 10 days.

     MONEY MARKET FUNDS

     -  You may have redemptions of $1,000 or more wired to your bank by
          writing American Funds Service Company.

     -  You may establish check writing privileges (use the money market funds
          application).

          -  If you request check writing privileges, you will be provided with
            checks that you may use to draw against your account. These checks
            may be made


                          Money Market Funds - Page 35

<PAGE>


            payable to anyone you designate and must be signed by the authorized
            number or registered shareholders exactly as indicated on your
            checking account signature card.

          -  Check writing is not available for Class B, C or F shares of The
            Cash Management Trust.

If you sell Class A, B or C shares and request a specific dollar amount to be
sold, we will sell sufficient shares so that the sale proceeds, after deducting
any applicable CDSC, equals the dollar amount requested.


Redemption proceeds will not be mailed until sufficient time has passed to
provide reasonable assurance that checks or drafts (including certified or
cashier's checks) for shares purchased have cleared (which may take up to 15
calendar days from the purchase date). Except for delays relating to clearance
of checks for share purchases or in extraordinary circumstances (and as
permissible under the 1940 Act), sale proceeds will be paid on or before the
seventh day following receipt and acceptance of an order. Interest will not
accrue or be paid on amounts that represent uncashed distribution or redemption
checks.


You may reinvest proceeds from a redemption or a dividend or capital gain
distribution of Class A, B, C or F shares without a sales charge in the Class A
shares of any fund in The American Funds Group within 90 days after the date of
the redemption or distribution (any CDSC on Class A or C shares will be credited
to your account). In addition, proceeds from a redemption or a dividend or
capital gain distribution of Class C shares may be reinvested in Class C shares.
Redemption proceeds of shares representing direct purchases in the money market
funds that are reinvested in non-money market funds will be subject to a sales
charge. Proceeds will be reinvested at the next calculated net asset value after
your request is received and accepted by the Transfer Agent.


                  SHAREHOLDER ACCOUNT SERVICES AND PRIVILEGES

The following services and privileges are generally available to all
shareholders.  However, certain services and privileges may not be available if
your account is held with an investment dealer.


AUTOMATIC INVESTMENT PLAN - An automatic investment plan enables you to make
monthly or quarterly investments in The American Funds through automatic debits
from your bank account. To set up a plan you must fill out an account
application and specify the amount you would like to invest ($50 minimum) and
the date on which you would like your investments to occur. The plan will begin
within 30 days after your account application is received. Your bank account
will be debited on the day or a few days before your investment is made,
depending on the bank's capabilities. The Transfer Agent will then invest your
money into the fund you specified on or around the date you specified.  For
example, if the date you specified falls on a weekend or holiday, your money
will be invested on the next business day.  If your bank account cannot be
debited due to insufficient funds, a stop-payment or the closing of the account,
the plan may be terminated and the related investment reversed. You may change
the amount of the investment or discontinue the plan at any time by writing to
the Transfer Agent.


AUTOMATIC REINVESTMENT - Dividends and capital gain distributions are reinvested
in additional shares of the same class and fund at net asset value unless you
indicate otherwise on the


                          Money Market Funds - Page 36

<PAGE>


account application. You also may elect to have dividends and/or capital gain
distributions paid in cash by informing the fund, the Transfer Agent or your
investment dealer.


If you have elected to receive dividends and/or capital gain distributions in
cash, and the postal or other delivery service is unable to deliver checks to
your address of record, or you do not respond to mailings from American Funds
Service Company with regard to uncashed distribution checks, your distribution
option will automatically be converted to having all dividends and other
distributions reinvested in additional shares.


CROSS-REINVESTMENT OF DIVIDENDS AND DISTRIBUTIONS - You may cross-reinvest
dividends and capital gains ("distributions") of the same share class into any
other fund in The American Funds Group at net asset value, subject to the
following conditions:


(a)  The aggregate value of your account(s) in the fund(s) paying distributions
equals or exceeds $5,000 (this is waived if the value of the account in the fund
receiving the distributions equals or exceeds that fund's minimum initial
investment requirement),

(b)  If the value of the account of the fund receiving distributions is below
the minimum initial investment requirement, distributions must be automatically
reinvested,

(c)  If you discontinue the cross-reinvestment of distributions, the value of
the account of the fund receiving distributions must equal or exceed the minimum
initial investment requirement. If you do not meet this requirement within 90
days of notification, the fund has the right to automatically redeem the
account.

EXCHANGE PRIVILEGE - You may only exchange shares into other funds in The
American Funds Group within the same class. However, exchanges from Class A
shares of The Cash Management Trust of America may be made to Class B or C
shares of any other American Fund for dollar cost averaging purposes. Exchange
purchases are subject to the minimum investment requirements of the fund
purchased and no sales charge generally applies. However, exchanges of shares
from the money market funds are subject to applicable sales charges on the fund
being purchased, unless the money market fund shares were acquired by an
exchange from a fund having a sales charge, or by reinvestment or
cross-reinvestment of dividends or capital gain distributions.


Exchanges of Class F shares generally may only be done through fee-based
programs of investment firms and registered investment advisers with special
agreements with the fund's distributor. You may exchange shares of other classes
by writing to the Transfer Agent (see "Selling Shares"), by contacting your
investment dealer, by using American FundsLine and American FundsLine OnLine
(see "American FundsLine and American FundsLine OnLine" below), or by
telephoning 800/421-0180 toll-free, faxing (see "American Funds Service Company
Service Areas" -- "Principal Underwriter and Transfer Agent" in the prospectus
for the appropriate fax numbers) or telegraphing the Transfer Agent. (See
"Telephone and Computer Purchases, Redemptions and Exchanges" below.) Shares
held in corporate-type retirement plans for which Capital Bank and Trust Company
serves as trustee may not be exchanged by telephone, computer, fax or telegraph.
Exchange redemptions and purchases are processed simultaneously at the share
prices next determined after the exchange order is received. (See "Purchase of
Shares"--"Price of Shares.") THESE TRANSACTIONS HAVE THE SAME TAX CONSEQUENCES
AS ORDINARY SALES AND PURCHASES.


                          Money Market Funds - Page 37

<PAGE>


AUTOMATIC EXCHANGES - You may automatically exchange shares of the same class in
amounts of $50 or more among any of the funds in The American Funds Group on any
day (or preceding business day if the day falls on a non-business day) of each
month you designate.


AUTOMATIC WITHDRAWALS - Withdrawal payments are not to be considered as
dividends, yield or income. Automatic investments may not be made into a
shareholder account from which there are automatic withdrawals. Withdrawals of
amounts exceeding reinvested dividends and distributions and increases in share
value would reduce the aggregate value of the shareholder's account. The
Transfer Agent arranges for the redemption by the fund of sufficient shares,
deposited by the shareholder with the Transfer Agent, to provide the withdrawal
payment specified.


ACCOUNT STATEMENTS - Your account is opened in accordance with your registration
instructions. Transactions in the account, such as additional investments will
be reflected on regular confirmation statements from the Transfer Agent.
Dividend and capital gain reinvestments, purchases through automatic investment
plans and certain retirement plans, as well as automatic exchanges and
withdrawals will be confirmed at least quarterly.


AMERICAN FUNDSLINE AND AMERICAN FUNDSLINE ONLINE - You may check your share
balance, the price of your shares, or your most recent account transaction,
redeem shares (up to $50,000 per shareholder each day) from non-retirement plan
accounts, or exchange shares around the clock with American FundsLine and
American FundsLine OnLine. To use these services, call 800/325-3590 from a
TouchTone(TM) telephone or access the American Funds Web site on the Internet at
www.americanfunds.com. Redemptions and exchanges through American FundsLine and
American FundsLine OnLine are subject to the conditions noted above and in
"Telephone and Computer Purchases, Redemptions and Exchanges" below. You will
need your fund number (see the list of funds in The American Funds Group under
"Purchase of Shares - Purchase Minimums" and "Purchase of Shares - Fund
Numbers"), personal identification number (generally the last four digits of
your Social Security number or other tax identification number associated with
your account) and account number.


TELEPHONE AND COMPUTER PURCHASES, REDEMPTIONS AND EXCHANGES - By using the
telephone (including American FundsLine) or computer (including American
FundsLine OnLine), fax or telegraph purchase, redemption and/or exchange
options, you agree to hold the fund, the Transfer Agent, any of its affiliates
or mutual funds managed by such affiliates, and each of their respective
directors, trustees, officers, employees and agents harmless from any losses,
expenses, costs or liability (including attorney fees) which may be incurred in
connection with the exercise of these privileges. Generally, all shareholders
are automatically eligible to use these options. However, you may elect to opt
out of these options by writing the Transfer Agent (you may also reinstate them
at any time by writing the Transfer Agent). If the Transfer Agent does not
employ reasonable procedures to confirm that the instructions received from any
person with appropriate account information are genuine, it and/or the fund may
be liable for losses due to unauthorized or fraudulent instructions. In the
event that shareholders are unable to reach the fund by telephone because of
technical difficulties, market conditions, or a natural disaster, redemption and
exchange requests may be made in writing only.


REDEMPTION OF SHARES - The funds' Declaration of Trust permits the funds to
direct the Transfer Agent to redeem the shares of any shareholder for their then
current net asset value per share if at such time the shareholder of record owns
shares having an aggregate net asset value of less than the minimum initial
investment amount required of new shareholders as set forth in the


                          Money Market Funds - Page 38

<PAGE>


fund's current registration statement under the 1940 Act, and subject to such
further terms and conditions as the Board of Trustees of the fund may from time
to time adopt.


CHECK WRITING -- When the checks you write are presented to The Chase Manhattan
Bank for payment, the bank will instruct the Transfer Agent to withdraw the
appropriate number of shares from your account (provided payment for the shares
has been collected).  The bank's rules and regulations governing such checking
accounts include the right of the bank not to honor checks in amounts exceeding
the value of the account at the time the check is presented for payment.  Each
month canceled checks will be returned to you.  Generally, you pay no fee for
this check writing service; however, reasonable service charges for "regular or
frequent use" of this service may be assessed in the future.  Besides being
convenient, this procedure enables you to continue earning daily income
dividends on your money until your checks actually clear.


                      EXECUTION OF PORTFOLIO TRANSACTIONS

The Investment Adviser places orders for the funds' portfolio securities
transactions. The Investment Adviser strives to obtain the best available prices
in its portfolio transactions taking into account the costs and quality of
executions. When, in the opinion of the Investment Adviser, two or more brokers
(either directly or through their correspondent clearing agents) are in a
position to obtain the best price and execution, preference may be given to
brokers who have provided investment research, statistical, or other related
services to the Investment Adviser. The funds do not consider that they have an
obligation to obtain the lowest available commission rate to the exclusion of
price, service and qualitative considerations.


There are occasions on which portfolio transactions for the funds may be
executed as part of concurrent authorizations to purchase or sell the same
security for other funds served by the Investment Adviser, or for trusts or
other accounts served by affiliated companies of the Investment Adviser.
Although such concurrent authorizations potentially could be either advantageous
or disadvantageous to the funds, they are effected only when the Investment
Adviser believes that to do so is in the interest of the funds. When such
concurrent authorizations occur, the objective is to allocate the executions in
an equitable manner. The funds will not pay a mark-up for research in principal
transactions.


                              GENERAL INFORMATION

CUSTODIAN OF ASSETS - Securities and cash owned by the funds, including proceeds
from the sale of shares of the funds and of securities in each fund's portfolio,
are held by The Chase Manhattan Bank, One Chase Manhattan Plaza, New York, NY
 10081, as Custodian.If the fund holds non-U.S. securities, the Custodian may
hold these securities pursuant to sub-custodial arrangements in non-U.S. banks
or non-U.S. branches of U.S. banks.


TRANSFER AGENT - American Funds Service Company, a wholly owned subsidiary of
the Investment Adviser, maintains the records of each shareholder's account,
processes purchases and redemptions of the funds' shares, acts as dividend and
capital gain distribution disbursing agent, and performs other related
shareholder service functions. American Funds Service Company was paid a fee of
$9,914,000, $623,000, and $191,000, by CMTA, CTRS and CTEX,  for Class A shares,
respectively, and no fee was paid for CMTA Class B shares for the 2000 fiscal
year.


                          Money Market Funds - Page 39

<PAGE>


INDEPENDENT ACCOUNTANTS - PricewaterhouseCoopers LLP, 350 South Grand Avenue,
Los Angeles, CA 90071, serves as each fund's independent accountants providing
audit services, preparation of tax returns and review of certain documents to be
filed with the Securities and Exchange Commission. The financial statements
included in this Statement of Additional Information from the Annual Report have
been so included in reliance on the report of PricewaterhouseCoopers LLP,
independent accountants, given on the authority of said firm as experts in
accounting and auditing. The selection of the funds' independent accountants is
reviewed and determined annually by the Board of Trustees.


PROSPECTUSES, REPORTS TO SHAREHOLDERS AND PROXY STATEMENTS - The funds' fiscal
year ends on September 30. Shareholders are provided updated prospectuses
annually and at least semiannually with reports showing the investment
portfolio, financial statements and other information. The funds' annual
financial statements are audited by the funds' independent accountants,
PricewaterhouseCoopers LLP. In addition, shareholders may also receive proxy
statements for the fund. In an effort to reduce the volume of mail shareholders
receive from the fund when a household owns more than one account, the Transfer
Agent has taken steps to eliminate duplicate mailings of prospectuses,
shareholder reports and proxy statements. To receive additional copies of a
prospectus, report or proxy statement, shareholders should contact the Transfer
Agent.


PERSONAL INVESTING POLICY - The funds, Capital Research and Management Company
and its affiliated companies, including the funds' principal underwriter, have
adopted codes of ethics which allow for personal investments, including
securities in which the funds may invest from time to time. This policy
includes: a ban on acquisitions of securities pursuant to an initial public
offering; restrictions on acquisitions of private placement securities;
pre-clearance and reporting requirements; review of duplicate confirmation
statements; annual recertification of compliance with codes of ethics; blackout
periods on personal investing for certain investment personnel; ban on
short-term trading profits for investment personnel; limitations on service as a
director of publicly traded companies; and disclosure of personal securities
transactions.


SHAREHOLDER AND TRUSTEE RESPONSIBILITY - Under the laws of certain states,
including Massachusetts where each fund was organized and California where each
fund's principal office is located, shareholders of a Massachusetts business
trust may, under certain circumstances, be held personally liable as partners
for the obligations of the fund. However, the risk of a shareholder incurring
any financial loss on account of shareholder liability is limited to
circumstances in which a fund itself would be unable to meet its obligations.
The Declaration of Trust contains an express disclaimer of shareholder liability
for acts, omissions, obligations or affairs of the fund and provides that notice
of the disclaimer may be given in each agreement, obligation, or instrument
which is entered into or executed by the fund or Trustees. The Declaration of
Trust provides for indemnification out of fund property of any shareholder held
personally liable for the obligations of each fund and also provides for each
fund to reimburse such shareholder for all legal and other expenses reasonably
incurred in connection with any such claim or liability.


Under the Declaration of Trust, the Trustees, officers, employees or agents of
each fund are not liable for actions or failure to act; however, they are not
protected from liability by reason of their willful misfeasance, bad faith,
gross negligence, or reckless disregard of the duties involved in the conduct of
their office.


                          Money Market Funds - Page 40

<PAGE>


                   INVESTMENT RESULTS AND RELATED STATISTICS

Each fund may from time to time provide yield information (including CTEX
tax-equivalent yield information) or comparisons of the fund's yield to various
averages in advertisements or in reports furnished to current or prospective
shareholders. Yield will be calculated on a seven-day, tax-equivalent and
effective basis, as appropriate, pursuant to formulas prescribed by the
Securities and Exchange Commission:


     Seven-day yield = (net change in account value x /365/7/)

     Tax-equivalent yield = tax-exempt portion of seven-day yield/(1-stated
     income tax rate) + taxable portion of seven day yield

     Effective yield* = ([1 + (net change in account value)/1/7/]/365/) - 1

     *The effective yield will assume a year's compounding of the seven-day
     yield.

CMTA Class A
------------

     The seven-day current and effective yields for the period ended September
30, 2000 are calculated as follows:

ASSUMPTIONS:

     Value of hypothetical pre-existing account with exactly one share at the
     beginning of the period:  $1.0000000

     Value of same account* (excluding capital changes) at the end of the
     seven-day period ending September 30, 2000:  $1.0011629

     *Value includes additional shares acquired with dividends paid on the
     original share.

CALCULATION:

          Ending account value:               $1.0011629

          Less beginning account value:  $1.0000000

          Net change in account value:    $0.0011629

     Seven-day yield  =  (0.0011629 X 365/7)            =   6.06%

     Effective yield     =   ([1 + (0.0011629) /1/7/]/365/) - 1  =  6.25%


                          Money Market Funds - Page 41

<PAGE>


CTRS
----

     The seven-day current and effective yields for the period ended September
30, 2000 are calculated as follows:

ASSUMPTIONS:


     Value of hypothetical pre-existing account with exactly one share at the
     beginning of the period:  $1.0000000

     Value of same account* (excluding capital changes) at the end of the
     seven-day period ending September 30, 2000:  $1.0010816

     *Value includes additional shares acquired with dividends paid on the
     original share.

CALCULATION:

          Ending account value:               $1.0010816

          Less beginning account value:  $1.00000000

          Net change in account value:    $0.0010816

     Seven-day yield  =  (0.0010816 X 365/7)            =   5.64%

     Effective yield      =  ([1 + (0.0010816)/1/7/]/365/) - 1      =
       5.80%

CTEX
----

     The seven-day current, effective and tax-equivalent yields for the period
ended September 30, 2000 are calculated as follows:

ASSUMPTIONS:


     Value of hypothetical pre-existing account with exactly one share at the
     beginning of the period:  $1.0000000

     Value of same account* (excluding capital changes) at the end of the
     seven-day period ending September 30, 2000:  $1.0007345

     *Value includes additional shares acquired with dividends paid on the
     original share.

CALCULATION:

          Ending account value:                     $1.0007345

          Less beginning account value:        $1.0000000

          Net change in account value:          $0.0007345


                          Money Market Funds - Page 42

<PAGE>


          Tax-exempt portion of net change:  $0.0007345

          Taxable portion of net change:        $ -0-

     Seven-day yield                          =  ($0.0007345 X 365/7)
                    =  3.83%

     Seven-day tax equivalent yield   =  ($0.0007345 X 365/7/(1-0.396)) =  6.34%

     Effective yield                             =  [1 + ($0.0007345)
     1/7]/365/-1        =  3.90%

Each fund's investment results may also be calculated for longer periods in
accordance with the following method: by subtracting (a) the net asset value of
one share at the beginning of the period, from (b) the net asset value of all
shares an investor would own at the end of the period for the share held at the
beginning of the period (assuming reinvestment of all dividends and
distributions) and dividing by (c) the net asset value per share at the
beginning of the period. The resulting percentage indicates the positive or
negative rate of return that an investor would have earned from reinvested
dividends and distributions and any changes in share price during the period.
Based on the foregoing formula, the lifetime return of CMTA was 438.2% (for the
period 11/3/76 through 9/30/00), the lifetime return of CTEX was 40.0% (for the
period 10/24/89 through 9/30/00), and the lifetime return of CTRS was 48.6% (for
the period 2/1/91 through 9/30/00).


Each fund's investment results will vary from time to time depending upon market
conditions, the composition of the fund's portfolio and operating expenses of
the fund, so that any yield figure should not be considered representative of
what an investment in a fund may earn in any future period. These factors and
possible differences in calculation methods should be considered when comparing
each fund's investment results with those published for other investment
companies, other investment vehicles and averages. Investment results also
should be considered relative to the risks associated with the investment
objective and policies.


                          Money Market Funds - Page 43

<PAGE>




                                    APPENDIX
                    Description of Commercial Paper Ratings

MOODY'S employs the designations "Prime-1," "Prime-2" and "Prime-3" to indicate
-------
commercial paper having the highest capacity for timely repayment. Issuers rated
Prime-1 have a superior capacity for repayment of short-term promissory
obligations. Prime-1 repayment capacity 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 moderate reliance on debt and ample asset protection; broad
margins in earnings coverage of fixed financial charges and high internal cash
generation; and well-established access to a range of financial markets and
assured sources of alternate liquidity.


Issues rated Prime-2 have a 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 ratios, 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.


S&P ratings of commercial paper are graded into four categories ranging from "A"
---
for the highest quality obligations to "D" for the lowest.


A - Issues assigned its highest rating are regarded as having the greatest
capacity for timely payment. Issues in this category are delineated with numbers
1, 2, and 3 to indicate the relative degree of safety.


A-1 - This designation indicates that the degree of safety regarding timely
payment is either overwhelming or very strong. Those issues determined to
possess overwhelming safety characteristics will be denoted with a plus (+) sign
designation.


A-2 - Capacity for timely payments on issues with this designation is strong;
however, the relative degree of safety is not as high as for issues designated
"A-1."

                          Description of Bond Ratings

BOND RATINGS - The ratings of Moody's Investors Service, Inc. (Moody's) and
Standard & Poor's Corporation (S&P) represent their opinions as to the quality
of the municipal bonds which they undertake to rate.  It should be emphasized,
however, that ratings are general and are not absolute standards of quality.
 Consequently, municipal bonds with the same maturity, coupon and rating may
have different yields, while municipal bonds of the same maturity and coupon
with different ratings may have the same yield.


Moody's rates the long-term debt securities issued by various entities from
-------
"Aaa" to "C."  Moody's applies the numerical modifiers 1, 2, and 3 in each
generic rating classification from Aa through B in its corporate bond rating
system.  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.  Ratings are described as follows:


                          Money Market Funds - Page 44

<PAGE>


"Bonds which 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 edge.'
 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."


"Bonds which 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 which make the long-term risks appear somewhat larger than the Aaa
securities."


"Bonds which are rated A possess many favorable investment attributes and are to
be considered as upper medium grade obligations.  Factors giving security to
principal and interest are considered adequate, but elements may be present
which suggest a susceptibility to impairment sometime in the future."


"Bonds which are rated Baa are considered as medium grade obligations, i.e.,
they are neither highly protected nor poorly secured.  Interest payments and
principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time.  Such bonds lack outstanding investment characteristics and, in
fact, have speculative characteristics as well."


"Bonds which are rated Ba are judged to have speculative elements; their future
cannot be considered as well assured.  Often the protection of interest and
principal payments may be very moderate and thereby not well safeguarded during
both good and bad times over the future.  Uncertainty of position characterizes
bonds in this class."


"Bonds which are rated B generally lack characteristics of the desirable
investment.  Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small."


"Bonds which are rated Caa are of poor standing.  Such issues may be in default
or there may be present elements of danger with respect to principal or
interest."


"Bonds which are rated Ca represent obligations which are speculative in a high
degree.  Such issues are often in default or have other marked shortcomings."


"Bonds which are rated C are the lowest rated class of bonds, and issues so
rated can be regarded as having extremely poor prospects of ever attaining any
real investment standing."


S & P rates the long-term securities debt of various entities in categories
-----
ranging from "AAA" to "D" according to quality.  The ratings from "AA" to "CCC"
may be modified by the addition of a plus (+) or minus (-) sign to show relative
standing within the major rating categories.  Ratings are described as follows:


"Debt rated 'AAA' has the highest rating assigned by S & P.  Capacity to pay
interest and repay principal is extremely strong."


                          Money Market Funds - Page 45

<PAGE>


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


"Debt rated 'A' has a strong capacity to pay interest and repay principal
although it is somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than debt in higher rated categories."


"Debt rated 'BBB' is regarded as having an adequate capacity to pay interest and
repay principal.  Whereas it normally exhibits adequate protection parameters,
adverse economic conditions or changing circumstances are more likely to lead to
a weakened capacity to pay interest and repay principal for debt in this
category than in higher rated categories."


"Debt rated 'BB' has less near-term vulnerability to default than other
speculative issues.  However, it faces major ongoing uncertainties or exposure
to adverse business, financial, or economic conditions which could lead to
inadequate capacity to meet timely interest and principal payments.  The 'BB'
rating category is also used for debt subordinated to senior debt that is
assigned an actual or implied 'BBB-' rating.


"Debt rated 'B' has a greater vulnerability to default but currently has the
capacity to meet interest payments and principal repayments.  Adverse business,
financial, or economic conditions will likely impair capacity or willingness to
pay interest and repay principal.  The 'B' rating category is also used for debt
subordinated to senior debt that is assigned an actual or implied 'BB' or 'BB-'
rating."


"The rating 'CC' is typically applied to debt subordinated to senior debt that
is assigned an actual or implied 'CCC' rating."


"The rating 'C' is typically applied to debt subordinated to senior debt which
is assigned an actual or implied 'CCC-' debt rating.  The 'C' rating may be used
to cover a situation where a bankruptcy petition has been filed, but debt
service payments are continued."


"The rating 'C1' is reserved for income bonds on which no interest is being
paid."


"Debt rated 'D' is in payment default.  The 'D' rating category is used when
interest payments or principal payments are not made on the date due even if the
applicable grace period has not expired, unless S&P believes that such payments
will be made during such grace period.  The 'D' rating also will be used upon
the filing of a bankruptcy petition if debt service payments are jeopardized."

                                  Note Ratings

STANDARD & POOR'S CORPORATION: "SP-1" and "SP-2" are the two highest note rating
categories, and are described as follows:


"SP-1 Very strong or strong capacity to pay principal and interest. Those issues
determined to possess overwhelming safety characteristics will be given a plus
(+) designation."

"SP-2 Satisfactory capacity to pay principal and interest."


                          Money Market Funds - Page 46

<PAGE>


MOODY'S INVESTORS SERVICE, INC.: "MIG-1" and "MIG-2" are the two highest note
rating categories, and are described as follows:


"MIG 1: This designation denotes best quality. There is present strong
protection by established cash flows, superior liquidity support or demonstrated
broad based access to the market for refinancing."

"MIG 2: This designation denotes high quality. Margins of protection are ample
although not as large as in the preceding group."


                          Money Market Funds - Page 47

<TABLE>
The Cash Management Trust of America
Investment Portfolio
September 30, 2000


                                                                                          Principal           Market
                                                                              Yield at       Amount            Value
                                                                           Acquisition         (000)            (000)
                                                                              --------     --------         --------
<S>                                                                      <C>           <C>          <C>

Certificates of Deposit  -  0.46%
National Westminster Bank PLC
  October 25, 2000                                                               6.52%    $  25,000     $     25,000
                                                                                                         ----------
Total Certificates of Deposit                                                                                 25,000
                                                                                                         ----------


Commercial Paper  -  71.64%
ABN AMRO North America Finance Inc.
  October 10, 2000                                                                 6.54      50,000           49,910
A.I. Credit Corp.
  October 20, 2000                                                                 6.54      50,000           49,820
Alcoa Inc.
  October 4, 2000                                                                  6.52      45,000           44,968
  October 24, 2000                                                                 6.53      50,000           49,784
American Express Credit Corp.
  October 19, 2000                                                                 6.54      50,000           49,828
  November 16, 2000                                                                6.54      25,000           24,788
American General Finance Corp.
  October 27, 2000                                                                 6.53      50,000           49,756
American Honda Finance Corp.
  October 12, 2000                                                                 6.53      50,000           49,892
  October 27, 2000                                                                 6.53      25,000           24,878
Anheuser-Busch Cos., Inc.
  November 3, 2000                                                                 6.52      37,000           36,774
  November 9, 2000                                                                 6.52      15,000           14,892
ANZ (Delaware) Inc.
  October 16, 2000                                                                 6.51      50,000           49,856
Asset Securitization Cooperative Corp.
  October 19, 2000 (1)                                                             6.54      50,000           49,828
  November 16, 2000 (1)                                                            6.55      25,000           24,788
AT&T Corp.
  October 30, 2000                                                                 6.53      30,000           29,838
  November 15, 2000                                                                6.54      45,000           44,627
Avon Capital Corp.
  October 11, 2000 (1)                                                             6.51      25,000           24,950
Bank of Nova Scotia
  October 3, 2000                                                                  6.57      25,000           24,986
  November 17, 2000                                                                6.53      25,000           24,784
Barclays U.S. Funding Corp.
  October 6, 2000                                                                  6.53      50,000           49,946
Bayerische Hypo-Und Vereinsbank AG
  October 4, 2000                                                                  6.56      25,000           24,982
  October 10, 2000                                                                 6.54      25,000           24,955
BellSouth Telecommunications, Inc.
  October 10, 2000                                                                 6.54      50,000           49,910
BMW US Capital Corp.
  October 11, 2000                                                                 6.54      30,000           29,940
  October 12, 2000                                                                 6.55      25,000           24,946
Campbell Soup Co.
  October 24, 2000                                                                 6.52      50,000           49,784
CDC Commercial Paper Corp.
  October 18, 2000 (1)                                                             6.52      25,000           24,919
Chevron USA Inc.
  October 25, 2000                                                                 6.52      50,000           49,775
Ciesco LP
  November 2, 2000                                                                 6.54      50,000           49,703
CIT Group, Inc.
  November 1, 2000                                                                 6.54      50,000           49,711
  November 6, 2000                                                                 6.56      50,000           49,666
Coca-Cola Co.
  October 19, 2000                                                                 6.53      50,000           49,829
  November 3, 2000                                                                 6.51      50,000           49,695
Colgate-Palmolive Co.
  November 13, 2000 (1)                                                            6.54      32,000           31,747
Den Danske Corp. Inc.
  October 12, 2000                                                                 6.51      25,000           24,946
  October 16, 2000                                                                 6.53      25,000           24,928
  October 18, 2000                                                                 6.51      25,000           24,919
Deutsche Bank Financial Inc.
  October 23, 2000                                                                 6.52      50,000           49,793
Dresdner U.S. Finance Inc.
  October 16, 2000                                                                 6.53      50,000           49,856
Duke Energy Corp.
  October 3, 2000                                                                  6.56      40,000           39,978
E.I. Du Pont de Nemours and Co.
  October 13, 2000                                                                 6.52      25,000           24,941
  October 24, 2000                                                                 6.51      25,000           24,892
Eksportfinans ASA
  October 10, 2000                                                                 6.53      50,000           49,910
Emerson Electric Co.
  November 17, 2000 (1)                                                            6.53      50,000           49,568
Equilon Enterprises LLC
  October 3, 2000                                                                  6.53      21,000           20,989
  November 6, 2000                                                                 6.54      25,000           24,833
Exxon Imperial U.S. Inc.
  October 26, 2000 (1)                                                             6.52      25,000           24,883
Ford Motor Credit Co.
  October 6, 2000                                                                  6.57      25,000           24,973
  October 12, 2000                                                                 6.55      50,000           49,891
Gannett Co., Inc.
  October 13, 2000 (1)                                                             6.55      50,000           49,882
  October 16, 2000 (1)                                                             6.52      50,000           49,856
General Electric Capital Corp.
  October 16, 2000                                                                 6.54      25,000           24,928
  October 19, 2000                                                                 6.53      25,000           24,914
  October 30, 2000                                                                 6.54      25,000           24,865
General Motors Acceptance Corp.
  October 6, 2000                                                                  6.55      50,000           49,946
  October 18, 2000                                                                 6.53      50,000           49,838
Gillette Co.
  October 5, 2000 (1)                                                              6.56      25,000           24,977
Halifax PLC
  October 11, 2000                                                                 6.51      50,000           49,901
Hewlett-Packard Co.
  October 16, 2000                                                                 6.50      25,000           24,928
Household Finance Corp.
  October 26, 2000                                                                 6.53     100,000           99,531
IBM Credit Corp.
  October 3, 2000                                                                  6.58      50,000           49,973
  October 11, 2000                                                                 6.54      50,000           49,901
International Lease Finance Corp.
  October 2, 2000                                                                  6.57      40,000           39,986
  October 6, 2000                                                                  6.54      25,000           24,973
John Hancock Capital Corp.
  October 2, 2000 (1)                                                              6.50      10,000            9,996
  October 6, 2000 (1)                                                              6.50      20,000           19,978
Johnson & Johnson
  October 20, 2000 (1)                                                             6.50      25,000           24,910
Kellogg Co.
  November 14, 2000                                                                6.53      50,000           49,596
Kimberly-Clark Corp.
  October 27, 2000 (1)                                                             6.53      45,000           44,781
Lucent Technologies Inc.
  October 5, 2000                                                                  6.53      35,000           34,968
Merck & Co., Inc.
  October 23, 2000                                                                 6.51      50,000           49,793
Minnesota Mining & Manufacturing Co.
  October 20, 2000                                                                 6.49      25,000           24,910
Monte Rosa Capital Corp.
  October 17, 2000 (1)                                                             6.56      50,000           49,846
Motiva Enterprises LLC
  October 27, 2000                                                                 6.53      25,000           24,878
  November 13, 2000                                                                6.54      20,000           19,842
Motorola Credit Corp.
  October 6, 2000                                                                  6.55      25,000           24,973
  October 26, 2000                                                                 6.51      25,000           24,883
Panasonic Finance America Inc.
  October 2, 2000 (1)                                                              6.58      25,000           24,991
  October 11, 2000 (1)                                                             6.53      25,000           24,950
Park Avenue Receivables Corp.
  October 3, 2000 (1)                                                              6.56      25,000           24,986
  October 6, 2000 (1)                                                              6.54      25,000           24,973
  October 11, 2000 (1)                                                             6.55      50,000           49,900
Pharmacia Corp.
  October 2, 2000                                                                  6.59      25,000           24,991
  October 4, 2000                                                                  6.51      20,000           19,986
  October 17, 2000                                                                 6.53      30,000           29,908
Preferred Receivables Funding Corp.
  October 13, 2000 (1)                                                             6.54      35,000           34,918
  October 18, 2000 (1)                                                             6.55      45,010           44,863
  October 26, 2000 (1)                                                             6.55      20,000           19,906
Rio Tinto America, Inc.
  November 1, 2000 (1)                                                             6.55      25,000           24,856
  November 20, 2000 (1)                                                            6.55      15,000           14,862
Royal Bank of Canada
  October 12, 2000                                                                 6.52      50,000           49,892
SBC Communications Inc.
  October 18, 2000 (1)                                                             6.54      48,000           47,844
  November 16, 2000 (1)                                                            6.54      25,000           24,789
Sony Capital Corp.
  October 2, 2000 (1)                                                              6.54      50,000           49,982
Svenska Handelsbanken Inc.
  October 23, 2000                                                                 6.53      50,000           49,792
Texaco Inc.
  October 10, 2000                                                                 6.54      50,000           49,910
Total Fina Elf SA
  November 8, 2000 (1)                                                             6.54      40,000           39,719
Toyota Motor Credit Corp.
  October 13, 2000 (1)                                                             6.52      45,000           44,894
Tribune Co.
  November 2, 2000 (1)                                                             6.53      50,000           49,698
United Technologies Corp.
  October 23, 2000 (1)                                                             6.53      25,000           24,896
USAA Capital Corp.
  October 12, 2000                                                                 6.51      20,000           19,957
  November 9, 2000                                                                 6.54      15,000           14,892
  November 15, 2000                                                                6.53      20,000           19,835
Verizon Network Funding Co.
  October 4, 2000                                                                  6.54      50,000           49,964
Wal-Mart Stores, Inc.
  October 3, 2000 (1)                                                              6.54      27,000           26,985
  October 23, 2000 (1)                                                             6.51      25,000           24,897
Wells Fargo & Co.
  October 20, 2000                                                                 6.52      25,000           24,910
  October 27, 2000                                                                 6.53      25,000           24,878
                                                                                                         ----------
Total Commercial Paper                                                                                     3,881,332
                                                                                                         ----------

Federal Agency Discount Notes  -  27.41%
Fannie Mae
  October 5, 2000                                                                  6.56      50,000           49,955
  October 20, 2000                                                                 6.60      10,000            9,964
  October 25, 2000                                                                 6.57      50,000           49,777
Federal Home Loan Banks
  October 4, 2000                                                                  6.55      50,000           49,964
  October 18, 2000                                                                 6.54      50,000           49,840
  October 20, 2000                                                                 6.58     100,000           99,643
  October 25, 2000                                                                 6.58      50,000           49,777
  November 17, 2000                                                                6.56      30,000           29,744
  November 22, 2000                                                                6.57     105,000          103,997
  December 1, 2000                                                                 6.58      65,500           64,766
Freddie Mac
  October 3, 2000                                                                  6.56      85,000           84,955
  October 5, 2000                                                                  6.57      60,800           60,746
  October 10, 2000                                                                 6.59      75,000           74,866
  October 13, 2000                                                                 6.60      84,500           84,303
  October 17, 2000                                                                 6.59     165,500          164,997
  October 24, 2000                                                                 6.55      40,000           39,829
  October 31, 2000                                                                 6.58      50,000           49,724
  November 7, 2000                                                                 6.57     100,000           99,324
  November 14, 2000                                                                6.56      50,000           49,600
  November 21, 2000                                                                6.57      95,000           94,109
Sallie Mae
  December 21, 2000 (2)                                                            6.71      25,000           24,997
  January 18, 2001 (2)                                                             6.63      50,000           49,992
  February 15, 2001 (2)                                                            6.53      50,000           49,981
                                                                                                         ----------
Total Federal Agency Discount Notes                                                                        1,484,850
                                                                                                         ----------
Total Investment Securities   (cost:$5,391,232,000)                                                        5,391,182
Excess of cash and receivables over payables                                                                  26,816
                                                                                                         ----------
NET ASSETS                                                                                                $5,417,998
                                                                                                         ----------

(1) Restricted securities that can be resold only
 to institutional investors.
In practice, these securities are as liquid as
 unrestricted securities in the portfolio.
(2) Coupon rate changes weekly; description of issue
 and yield at  acquisition reflect current coupon rate.

See Notes to Financial Statements
</TABLE>

<TABLE>
THE CASH MANAGEMENT TRUST OF AMERICA
FINANCIAL STATEMENTS

STATEMENT OF ASSETS AND LIABILITIES
at September 30, 2000                                                                 (dollars in          thousands)
<S>                                                                               <C>             <C>
Assets:
Investment securities at market
 (cost:  $5,391,232)                                                                                       $5,391,182
Receivables for--
 Sales of fund's shares                                                                   $71,299
 Accrued interest                                                                           1,566
 Other                                                                                          4              72,869

                                                                                                            5,464,051
Liabilities:
Payables for--
 Repurchases of fund's shares                                                              41,919
 Dividends on fund's shares                                                                 1,749
 Management services                                                                        1,264
 Other expenses                                                                             1,121              46,053

Net Assets at September 30, 2000 (unlimited shares authorized)                                             $5,417,998

Class A shares
 Equivalent to $1.00 per share
 Net assets                                                                                                $5,417,201
 Shares outstanding                                                                                     5,417,179,577
Class B shares
 Equivalent to $1.00 per share
 Net assets                                                                                                      $797
 Shares outstanding                                                                                           796,991



STATEMENT OF OPERATIONS
for the year ended September 30, 2000                                                 (dollars in          thousands)

Investment Income:
Income:
 Interest                                                                                                    $345,505

Expenses:
 Management services fee                                                                  $16,005
 Distribution expenses- Class A                                                             4,348
 Distribution expenses- Class B                                                                 2
 Transfer agent fee- Class A                                                                9,914
 Transfer agent fee- Class B                                                                  -
 Reports to shareholders                                                                      356
 Registration statement and prospectus                                                      1,030
 Postage, stationery and supplies                                                           2,251
 Trustees' fees                                                                                47
 Auditing and legal fees                                                                       49
 Custodian fee                                                                                363
 Taxes other than federal income tax                                                           74              34,439
 Net investment income                                                                                        311,066

Change from Unrealized Appreciation to
 Unrealized Depreciation on Investments:
Net unrealized appreciation (depreciation)
 on investments:
 Beginning of year                                                                             32
 End of year                                                                                  (50)
  Net change from unrealized appreciation to unrealized
   depreciation on investments                                                                                    (82)

Net Increase in Net Assets
 Resulting from Operations                                                                                   $310,984




STATEMENT OF CHANGES IN NET ASSETS                                                    (dollars in          thousands)

                                                                                       Year Ended        September 30

                                                                                             2000                1999

Operations:
Net investment income                                                                    $311,066            $231,655
Net unrealized appreciation (depreciation)
 on investments                                                                               (82)                 16
 Net increase in net assets
  resulting from operations                                                               310,984             231,671

Dividends Paid to Shareholders:
Class A                                                                                  (310,985)           (231,656)
Class B                                                                                       (10)                  0
 Total dividends paid to shareholders                                                    (310,995)           (231,656)

Capital Share Transactions:
 Proceeds from shares sold                                                             15,732,691          14,382,799
 Proceeds from shares issued in reinvestment
  of net investment income dividends                                                      285,391             215,273
 Cost of shares repurchased                                                           (16,463,123)        (13,338,942)
 Net (decrease) increase in net assets resulting
  from capital share transactions                                                        (445,041)          1,259,130

Total (Decrease) Increase in Net Assets                                                  (445,052)          1,259,145

Net Assets:
Beginning of year                                                                       5,863,050           4,603,905

End of year                                                                            $5,417,998          $5,863,050





See Notes to Financial Statements

</TABLE>

 Notes to Financial Statements

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION  - The Cash Management Trust of America (the "fund") is registered
under the Investment Company Act of 1940 as an open-end, diversified management
investment company. The fund seeks to provide income on cash reserves, while
preserving capital and maintaing liquidity, through investments in high-quality
short-term money market instruments.  The fund offers Class A and Class B
shares. Class B shares are sold without an initial sales charge but are subject
to a contingent deferred sales charge paid upon redemption. This charge
declines from 5% to zero over a period of six years. Class B shares have higher
distribution expenses and transfer agent fees than Class A shares. Class B
shares are automatically converted to Class A shares eight years after the date
of purchase. Holders of both classes of shares have equal pro rata rights to
assets and identical voting, dividend, liquidation and other rights, except
that each class bears different distribution and transfer agent expenses, and
each class shall have exclusive rights to vote on matters affecting only their
class.

SIGNIFICANT ACCOUNTING POLICIES - The financial statements have been prepared
in conformity with accounting principles generally accepted in the United
States which require management to make estimates and assumptions that affect
the reported amounts and disclosures in the financial statements.  Actual
results could differ from those estimates. The following is a summary of the
significant accounting policies consistently followed by the fund in the
preparation of its financial statements:

NET ASSET VALUE - The fund uses the penny-rounding method of valuing its
shares, in accordance with Securities and Exchange Commission (SEC) rules. This
method permits the fund to maintain a constant net asset value of $1.00 per
share, provided the market value of the fund's shares does not deviate from
$1.00 by more than one-half of 1% and the fund complies with other restrictions
set forth in the SEC rules.

SECURITY VALUATION - Fixed-income securities are valued at prices obtained from
a pricing service, when such prices are available; however, in circumstances
where the investment adviser deems it appropriate to do so, such securities
will be valued at the mean quoted bid and asked prices or at prices for
securities of comparable maturity, quality and type. Short-term securities
maturing within 60 days are valued at amortized cost, which approximates market
value. Securities and assets for which representative market quotations are not
readily available are valued at fair value as determined in good faith by a
committee appointed by the Board of Trustees. The ability of the issuers of the
fixed-income securities held by the fund to meet their obligations may be
affected by economic developments in a specific industry, state or region.

SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME -
Security transactions are accounted for as of the trade date. Interest income
is recognized on an accrual basis. Market discounts, premiums, and original
issue discounts on fixed-income securities are amortized daily over the
expected life of the security.

DIVIDENDS TO SHAREHOLDERS - Dividends to shareholders are declared daily after
the determination of the fund's net investment income and are paid to
shareholders monthly.

ALLOCATIONS - Income, expenses (other than class-specific expenses) and
realized and unrealized gains and losses are allocated daily between Class A
and Class B based on their relative net asset values. Distribution expenses,
transfer agent fees and any other class-specific expenses are accrued daily and
charged to the applicable share class.

2. FEDERAL INCOME TAXATION

The fund complies with the requirements of the Internal Revenue Code applicable
to regulated investment companies and intends to distribute all of its net
taxable income for the fiscal year. As a regulated investment company, the fund
is not subject to income taxes if such distributions are made. Required
distributions are determined on a tax basis and may differ from net investment
income for financial reporting purposes. In addition, the fiscal year in which
amounts are distributed may differ from the year in which the net investment
income is recorded by the fund.

 As of September 30, 2000, net unrealized depreciation on investments for book
and federal income tax purposes aggregated $50,000, of which all related to
depreciated securities. The cost of portfolio securites for book and federal
income tax purposes was $5,391,232,000 at September 30, 2000.

3. FEES AND TRANSACTIONS WITH RELATED PARTIES

INVESTMENT ADVISORY FEE -  The fee of $16,005,000 for management services was
incurred pursuant to an agreement with Capital Research and Management Company
(CRMC), with which certain officers and Trustees of the fund are affiliated.
The Investment Advisory and Service Agreement provides for monthly fees accrued
daily, based on the following rates and net asset levels:

<TABLE>
<CAPTION>
                           NET ASSET LEVEL

Rate                       In                         Up to
                           Excess
                           of

<S>                        <C>                        <C>
0.32%                      $0                         $1 billion
0.29                        1 billion                 2 billion
0.27                        2 billion
</TABLE>

DISTRIBUTION EXPENSES - The fund has adopted plans of distribution with
American Funds Distributors, Inc. (AFD) under which it may finance activities
primarily intended to sell fund shares, provided the categories of expenses are
approved in advance by the fund's Board of Trustees. The plans provide for
aggregate annual expense limits of 0.15% of net assets for Class A shares, and
0.90% of net assets for Class B shares.

 For Class A shares, approved categories of expense include dealer service fees
of up to 0.15% of net assets. For the year ended September 30, 2000, aggregate
distribution expenses were $4,348,000, or 0.08% of net assets attributable to
Class A shares.

For Class B shares, approved categories of expense include fees of 0.75% per
annum payable to AFD. AFD sells the rights to receive such payments (as well as
any contingent deferred sales charges payable in respect of shares sold during
the period) in order to finance the payment of dealer commissions. Also
included are service fees of 0.15% per annum.  These fees are paid to AFD to
compensate AFD for paying service fees to qualified dealers.  For the year
ended September 30, 2000, aggregate distribution expenses were $2,000, or 0.90%
of net assets attributable to Class B shares.

As of September 30, 2000, accrued and unpaid distribution expenses payable to
AFD for Class A and Class B shares were $296,000 and $1,000, respectively.

TRANSFER AGENT FEE - A fee of $9,914,000 was incurred during the year ended
September 30, 2000 pursuant to an agreement with American Funds Service Company
(AFS), the transfer agent for the fund.

DEFERRED TRUSTEES' FEES - Trustees who are unaffiliated with CRMC may elect to
defer part or all of the fees earned for services as members of the Board.
Amounts deferred are not funded and are general unsecured liabilities of the
fund. As of September 30, 2000, aggregate deferred amounts and earnings thereon
since the deferred compensation plan's adoption (1993), net of any payments to
Trustees, were $29,000.

AFFILIATED TRUSTEES AND OFFICERS - CRMC is owned by The Capital Group
Companies, Inc. AFS and AFD are both wholly owned subsidiaries of CRMC.
Officers of the fund and certain Trustees are or may be considered to be
affiliated with CRMC, AFS and AFD. No such persons received any remuneration
directly from the fund.

 4. INVESTMENT TRANSACTIONS AND OTHER DISCLOSURES

The fund made purchases and sales of investment securities, including
maturities, of $47,067,597,000 and $47,903,032,000, repectively, during the
year ended September 30, 2000.

 Pursuant to the custodian agreement, the fund receives credits against its
custodian fee for imputed interest on certain balances with the custodian bank.
During the year ended September 30, 2000, the custodian fee of $363,000
includes $18,000 that was paid by these credits rather than in cash.

Net assets consisted of the following:
<TABLE>
<S>                                                              <C>
                                                                 dollars in thousands
Capital paid in on shares of beneficial interest                                $5,417,976
Undistributed net Investment Income                                                      72
Net unrealized depreciation                                                           (50)
Net Assets                                                                      $5,417,998

</TABLE>

Capital share transactions in the fund were as follows:
<TABLE>
                                         Year Ended                                    Year ended
                                         September 30, 2000                            September 30, 1999
                                         Amount (000)                Shares            Amount (000)                Shares
<S>                                      <C>                   <C>                     <C>                   <C>
Class A Shares:
  Sold                                     $15,730,750          15,730,750,102        $ 14,382,799        14,382,799,048
  Reinvestment of dividends                    285,383          285,383,370             215,273           215,272,362
  Repurchased                             (16,461,971)         (16,461,971,145)        (13,338,942)      (13,338,941,818)
   Net (decrease) increase in Class A        (445,838)         (445,837,673)            1,259,130         1,259,129,592
Class B Shares*:
  Sold                                          1,941           1,940,764                   -                     -
  Reinvestment of dividends                         8           8,464                       -                     -
  Repurchased                                  (1,152)          (1,152,237)                 -                     -
   Net increase in Class B                        797            796,991                    -                     -
Total net (decrease) increase in fund     $   (445,041)         (445,040,682)          $ 1,259,130         1,259,129,592

* Class B shares were not offered before March 15, 2000.
</TABLE>

<TABLE>
PER-SHARE DATA AND RATIOS (1)
<S>                                                      <C>          <C>          <C>

                                                           Net asset                      Dividends
                                                               value,         Net        (from net
                                                            beginning   investment       investment
Year ended                                                    of year       income          income)
Class A:
2000                                                             $1.00   $.055 (2)           $(.055)
1999                                                              1.00         .045           (.045)
1998                                                              1.00         .050           (.050)
1997                                                              1.00         .049           (.049)
1996                                                              1.00         .050           (.050)

Class B:
2000                                                              1.00    .027 (2)            (.027)



                                                          Net asset                   Net assets,
                                                          value, end     Total        end of year
Year ended                                                  of year      return      (in millions)
Class A:
2000                                                         $1.00        5.66%         $5,417
1999                                                          1.00        4.59          5,863
1998                                                          1.00        5.15          4,604
1997                                                          1.00        5.03          3,527
1996                                                          1.00        5.06          3,304

Class B:
2000                                                          1.00        2.73            1


                                                           Ratio of     Ratio of
                                                           expenses    net income
                                                          to average   to average
Year ended                                                net assets   net assets
Class A:
2000                                                         .61%         5.53%
1999                                                          .58         4.52
1998                                                          .58         5.02
1997                                                          .57         4.93
1996                                                          .60         4.95

Class B:
2000                                                       1.43 (3)     5.21 (3)



(1) The years 1996 through 2000 represent,
for Class A shares, fiscal years ended
September 30. The period ended 2000
represents, for Class B shares, the
199-day period ended September 30,
2000. Class B shares were not
offered before March 15, 2000. Total
return for Class B is based on activity
during the period and
thus is not representative of a full year.
  Total returns exclude all sales charges,
 including
contingent deferred sales charges.
(2) Based on average shares outstanding.
(3) Annualized.

</TABLE>

Report of Independent Accountants

To the Board of Trustees and Shareholders of The Cash Management Trust of
America:

In our opinion, the accompanying statement of assets and liabilities, including
the investment portfolio, and the related statements of operations and of
changes in net assets and the per-share data and ratios present fairly, in all
material respects, the financial position of The Cash Management Trust of
America (the "Fund") at September 30, 2000, the results of its operations, the
changes in its net assets and the per-share data and ratios for the years
indicated, in conformity with accounting principles generally accepted in the
United States of America. These financial statements and per-share data and
ratios (hereafter referred to as "financial statements") are the responsibility
of the Fund's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
financial statements in accordance with auditing standards generally accepted
in the United Sates of America, which require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits, which included confirmation of securities at September
30, 2000 by correspondence with the custodian, provide a reasonable basis for
our opinion.

PRICEWATERHOUSECOOPERS LLP
Los Angeles, California
October 31, 2000


2000 Tax Information (unaudited)

We are required to advise you within 60 days of the fund's fiscal year-end
regarding the federal tax status of distributions received by shareholders
during such fiscal year.

Certain states may exempt from income taxation that portion of the dividends
paid from net investment income that was derived from direct U.S. Treasury
obligations. For purposes of computing this exclusion, none of the dividends
paid by the fund from net investment income were derived from interest on
direct U.S. Treasury obligations.

Dividends received by retirement plans such as IRAs, Keogh-type plans and
403(b) plans need not be reported as taxable income. However, many retirement
plan trusts may need this information for their annual information reporting.

SINCE THE INFORMATION ABOVE IS REPORTED FOR THE FUND'S FISCAL YEAR AND NOT THE
CALENDAR YEAR, SHAREHOLDERS SHOULD REFER TO THEIR FORM 1099-DIV OR OTHER TAX
INFORMATION WHICH WILL BE MAILED IN JANUARY 2001 TO DETERMINE THE CALENDAR YEAR
AMOUNTS TO BE INCLUDED ON THEIR 2000 TAX RETURNS. SHAREHOLDERS SHOULD CONSULT
THEIR TAX ADVISERS.



<TABLE>
The U.S. Treasury Money Fund of America
Investment Portfolio
September 30, 2000
<S>                                                             <C>              <C>         <C>
                                                                                   Principal           Market
                                                                        Yield at      Amount            Value
                                                                     Acquisition       (000)            (000)
                                                                   -------------     -------    -------------
U.S. Treasury Securities - 101.95%

U.S. Treasury bills 10/5/00                                        6.02% - 6.20%     $16,635         $ 16,622
U.S. Treasury bills 10/12/00                                       5.98% - 6.18%      45,400           45,312
U.S. Treasury bills 10/19/00                                               6.16%      20,000           19,939
U.S. Treasury bills 10/26/00                                               6.18%       8,920            8,883
U.S. Treasury bills 11/2/00                                        6.05% - 6.25%      37,910           37,707
U.S. Treasury bills 11/9/00                                        6.11% - 6.27%      55,990           55,631
U.S. Treasury bills 11/16/00                                               6.09%      23,900           23,714
U.S. Treasury bills 11/24/00                                       6.11% - 6.32%      47,215           46,805
U.S. Treasury bills 11/30/00                                       6.08% - 6.14%      17,050           16,883
U.S. Treasury bills 12/7/00                                        6.10% - 6.16%      65,720           64,994
U.S. Treasury bills 12/14/00                                       6.13% - 6.16%      33,530           33,122
U.S. Treasury bills 12/21/00                                       6.17% - 6.18%       7,050            6,955
                                                                                                -------------
Total Investment Securities (cost: $376,483,000)                                                      376,567
Excess of payables over cash and receivables                                                           (7,194)
                                                                                                -------------
Net Assets                                                                                           $369,373
                                                                                                =============

See Notes to Financial Statements

</TABLE>

<TABLE>
The U.S. Treasury Money Fund of America
FINANCIAL STATEMENTS

STATEMENT OF ASSETS AND LIABILITIES
at September 30, 2000
(dollars in thousands)
<S>                                                         <C>          <C>
Assets:
Investment securities at market
 (cost: $376,483)                                                               $376,567
Receivables for --
 Sales of fund's shares                                                            1,821

                                                                                 378,388
Liabilities:
Payables for --
 Bank overdraft                                                   $6,125
 Repurchases of fund's shares                                      2,626
 Dividends on fund's shares                                           85
 Management services                                                  91
 Other expenses                                                       88           9,015

Net Assets at September 30, 2000 --
 Equivalent to $1.00 per share on
 369,287,127 shares of beneficial
 interest issued and outstanding;
 unlimited shares authorized                                                    $369,373


STATEMENT OF OPERATIONS
for the year ended September 30, 2000
(dollars in thousands)
Investment Income:
Income:
 Interest                                                                        $23,590

Expenses:
 Management services fee                                          $1,296
 Distribution expenses                                               431
 Transfer agent fee                                                  623
 Reports to shareholders                                              13
 Registration statement and prospectus                               113
 Postage, stationery and supplies                                    140
 Trustees' fees                                                       17
 Auditing and legal fees                                              33
 Custodian fee                                                        37
 Taxes other than federal income tax                                   7           2,710
 Net investment income                                                            20,880

Increase in Unrealized Appreciation
 on Investments:
Net unrealized appreciation on investments:
 Beginning of year                                                    79
 End of year                                                          85

  Net increase in unrealized appreciation
    on investments                                                                     6

Net Increase in Net Assets Resulting
from Operations                                                                  $20,886


STATEMENT OF CHANGES IN NET ASSETS
(dollars in thousands)
                                                              Year ended    September 30

                                                                    2000            1999
Operations:
Net investment income                                            $20,880         $16,664
Net unrealized appreciation (depreciation)
 on investments                                                        6            (140)
 Net increase in net assets
  resulting from operations                                       20,886          16,524

Dividends Paid to Shareholders                                   (20,879)        (16,664)

Capital Share Transactions:
Proceeds from shares sold                                        840,272         774,656
Proceeds from shares issued in
 reinvestment of net investment income
 dividends                                                        19,527          15,677
 Cost of shares repurchased                                     (957,128)       (679,108)

 Net (decrease) increase net assets resulting
  from capital share transactions                                (97,329)        111,225

Total (Decrease) Increase Net Assets                             (97,322)        111,085

Net Assets:
Beginning of year                                                466,695         355,610

End of year                                                     $369,373        $466,695



See Notes to Financial Statements
</TABLE>

 Notes to Financial Statements

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION - The U.S. Treasury Money Fund of America (the "fund") is
registered under the Investment Company Act of 1940 as an open-end, diversified
management investment company.  The fund seeks to provide income on cash
reserves, while preserving capital and maintaining liquidity, through
investments in U.S. Treasury securities maturing in one year or less.

SIGNIFICANT ACCOUNTING POLICIES - The financial statements have been prepared
in conformity with accounting principles generally accepted in the United
States which require management to make estimates and assumptions that affect
the reported amounts and disclosures in the financial statements.  Actual
results could differ from those estimates. The following is a summary of the
significant accounting policies consistently followed by the fund in the
preparation of its financial statements:

NET ASSET VALUE - The fund uses the penny-rounding method of valuing its
shares, in accordance with Securities and Exchange Commission (SEC) rules.
This method permits the fund to maintain a constant net asset value of $1.00
per share, provided the market value of the fund's shares does not deviate from
$1.00 by more than one-half of 1% and the fund complies with other restrictions
set forth in the SEC rules.

SECURITY VALUATION - Fixed-income securities are valued at prices obtained from
a pricing service, when such prices are available; however, in circumstances
where the investment adviser deems it appropriate to do so, such securities
will be valued at the mean quoted bid and asked prices or at prices for
securities of comparable maturity, quality and type. Short-term securities
maturing within 60 days are valued at amortized cost, which approximates market
value.

Securities and assets for which representative market quotations are not
readily available are valued at fair value as determined in good faith by a
committee appointed by the Board of Trustees. The ability of the issuers of the
fixed-income securities held by the fund to meet their obligations may be
affected by economic developments in a specific industry, state or region.

SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME - Security transactions are
accounted for as of the trade date.  Interest income is recognized on an
accrual basis.  Market discounts, premiums, and original issue discounts on
fixed-income securities are amortized daily over the expected life of the
security.

DIVIDENDS TO SHAREHOLDERS - Dividends to shareholders are declared daily after
the determination of the fund's net investment income and are paid to
shareholders monthly.

2. FEDERAL INCOME TAXATION

The fund complies with the requirements of the Internal Revenue Code applicable
to regulated investment companies and intends to distribute all of its net
taxable income for the fiscal year.  As a regulated investment company, the
fund is not subject to income taxes if such distributions are made.  Required
distributions are determined on a tax basis and may differ from net investment
income for financial reporting purposes.  In addition, the fiscal year in which
amounts are distributed may differ from the year in which the net investment
income is recorded by the fund.

  As of September 30, 2000, net unrealized appreciation on investments for book
and federal income tax purposes aggregated $85,000 of which all related to
appreciated securities. The cost of portfolio securities for book and federal
income tax purposes was $376,483,000 at September 30, 2000.

3. FEES AND TRANSACTIONS WITH RELATED PARTIES

INVESTMENT ADVISORY FEE - The fee of $1,296,000 for management services was
incurred pursuant to an agreement with Capital Research and Management Company
(CRMC), with which certain officers and Trustees of the fund are affiliated.
The Investment Advisory and Service Agreement provides for monthly fees accrued
daily, based on the following rates and net asset levels:

<TABLE>
<CAPTION>
                           Net Asset Level

Rate                       In Excess of               Up to

<S>                        <C>                        <C>
0.300%                     $  0                       $800 million

0.285%                      800 million

</TABLE>

DISTRIBUTION EXPENSES - Pursuant to a Plan of Distribution with American Funds
Distributors, Inc. (AFD), the fund may expend up to 0.15% of net assets
annually for any activities primarily intended to sell fund shares, provided
the categories of expense are approved in advance by the fund's Board of
Trustees. Fund expenses under the Plan include payments to dealers to
compensate them for their selling and servicing efforts. For the year ended
September 30, 2000, aggregate distribution expenses under the Plan were
$431,000 or .10% of net assets. As of September 30, 2000, accrued and unpaid
distribution expenses payable to AFD were $30,000.

TRANSFER AGENT FEE - A fee of $623,000 was incurred during the year ended
September 30, 2000 pursuant to an agreement with American Funds Service Company
(AFS), the transfer agent for the fund.

DEFERRED TRUSTEES' FEES -   Trustees who are unaffiliated with CRMC may elect
to defer part or all of the fees earned for services as members of the Board.
Amounts deferred are not funded and are general unsecured liabilities of the
fund. As of September 30, 2000, aggregate deferred amounts and earnings thereon
since the deferred compensation plan's adoption (1993), net of any payments to
Trustees, were $13,000.

AFFILIATED TRUSTEES AND OFFICERS - CRMC is owned by The Capital Group
Companies, Inc. AFS and AFD are both wholly owned subsidiaries of CRMC.
Officers of the fund and certain Trustees are or may be considered to be
affiliated with CRMC, AFS and AFD. No such persons received any remuneration
directly from the fund.

4. INVESTMENT TRANSACTIONS AND OTHER DISCLOSURES
The fund made purchases and sales of investment securities, including
maturities, of $2,268,973,000 and $2,382,639,000, respectively, during the year
ended September 30, 2000.

  Pursuant to the custodian agreement, the fund receives credits against its
custodian fee for imputed interest on certain balances with the custodian bank.
During the year ended September 30, 2000, the custodian fee of $37,000 includes
$2,000 that was paid by these credits rather than in cash.

Net assets consisted of the following:
<TABLE>
<S>                                                              <C>
                                                                 dollars in thousands
Capital paid in on shares of beneficial interest                                  $369,287
Undistributed net Investment Income                                                       1
Net unrealized appreciation                                                              85
Net Assets                                                                        $369,373

</TABLE>

Capital share transactions in the fund were as follows:
<TABLE>
<S>                                              <C>                                   <C>
                                                     Year ended September 30, 2000
                                                 Amount (000)                                Shares

  Sold                                                                       $ 840,272   840,272,661
  Reinvestment of dividends                                            19,527             19,526,770
  Repurchased                                                        (957,128)          (957,128,378)
Total Net (Decrease) Increase in Fund                                       $  (97,329)  (97,328,947)


                                                     Year ended September 30, 1999
                                                 Amount (000)                                Shares

  Sold                                                                       $ 774,656   774,656,722
  Reinvestment of dividends                                            15,677             15,676,872
  Repurchased                                                        (679,108)          (679,107,911)
Total Net (Decrease) Increase in Fund                                        $ 111,225   111,225,683

</TABLE>

<TABLE>
The U. S. Treasury Fund of America
PER-SHARE DATA AND RATIOS
<S>                                                  <C>          <C>          <C>
                                                       Net asset                      Dividends
                                                           value,         Net        (from net
                                                        beginning   investment       investment
Year ended                                                of year       income          income)
Class A : (1)
2000                                                     $   1.00     $.049(2)          $(.049)
1999                                                          1.00        .039            (.039)
1998                                                          1.00        .045            (.045)
1997                                                          1.00        .046            (.046)
1996                                                          1.00        .046            (.046)


                                                      Net asset                   Net assets,
                                                      value, end     Total        end of year
Year ended                                              of year      return      (in millions)
Class A : (1)
2000                                                   $   1.00          5.00%             $369
1999                                                     1.00             4.00              467
1998                                                     1.00             4.63              356
1997                                                     1.00             4.71              279
1996                                                     1.00             4.66              256

                                                       Ratio of     Ratio of
                                                       expenses    net income
                                                      to average   to average
Year ended                                            net assets   net assets
Class A : (1)
2000                                                     .62%            4.81%
1999                                                      .59             3.95
1998                                                      .59             4.49
1997                                                      .53             4.61
1996                                                      .65             4.53




(1) The fund offers Class A shares only.
(2) Based on average shares outstanding
</TABLE>

Report of Independent Accountants

To the Board of Trustees and Shareholders of The U.S. Treasury Money Fund of
America:

In our opinion, the accompanying statement of assets and liabilities, including
the investment portfolio, and the related statements of operations and of
changes in net assets and the per-share data and ratios present fairly, in all
material respects, the financial position of The U.S. Treasury Money Fund of
America (the "Fund") at September 30, 2000, the results of its operations, the
changes in its net assets and the per-share data and ratios for the years
indicated, in conformity with accounting principles generally accepted in the
United States of America. These financial statements and per-share data and
ratios (hereafter referred to as "financial statements") are the responsibility
of the Fund's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
financial statements in accordance with auditing standards generally accepted
in the United Sates of America, which require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits, which included confirmation of securities at September
30, 2000 by correspondence with the custodian, provide a reasonable basis for
our opinion.

PRICEWATERHOUSECOOPERS LLP
Los Angeles, California
October 31, 2000


2000 Tax Information (unaudited)

We are required to advise you within 60 days of the fund's fiscal year-end
regarding the federal tax status of distributions received by shareholders
during such fiscal year.

Certain states may exempt from income taxation that portion of the dividends
paid from net investment income that was derived from direct U.S. Treasury
obligations. For purposes of computing this exclusion, all of the dividends
paid by the fund from net investment income were derived from interest on
direct U.S. Treasury obligations.

Dividends received by retirement plans such as IRAs, Keogh-type plans and
403(b) plans need not be reported as taxable income. However, many retirement
plan trusts may need this information for their annual information reporting.

SINCE THE INFORMATION ABOVE IS REPORTED FOR THE FUND'S FISCAL YEAR AND NOT THE
CALENDAR YEAR, SHAREHOLDERS SHOULD REFER TO THEIR FORM 1099-DIV OR OTHER TAX
INFORMATION WHICH WILL BE MAILED IN JANUARY 2001 TO DETERMINE THE CALENDAR YEAR
AMOUNTS TO BE INCLUDED ON THEIR 2000 TAX RETURNS. SHAREHOLDERS SHOULD CONSULT
THEIR TAX ADVISERS.




<TABLE>
The Tax-Exempt Money Fund of America
Investment Portfolio, September 30, 2000





                                                                                                 Principal       Market
                                                                                    Yield at        Amount        Value
Municipal Securities                                                             Acquisition         (000)        (000)
--------------------------------------------                                        --------      --------     --------
<S>                                                                           <C>              <C>           <C>
Alabama  -  1.27%
Industrial Development Board of the City of Montgomery
, Pollution Control and Solid Waste Disposal Revenue
Refunding Bonds (General Electric Company Project),                                     4.20%         $3,500    $   3,500
 Series 1990, 4.20% 10/2/00

Alaska  -  1.96%
City of Valdez:
Marine Terminal Revenue Refunding Bonds (ARCO
Transportation Alaska, Inc. Project), TECP:
1994 Series A, 4.15% 10/3/00                                                              4.15        1,700        1,700
1994 Series C, 4.25% 10/6/00                                                              4.25        1,000        1,000
Variable Rate Marine Terminal Revenue Refunding Bonds:
(Exxon Pipeline Company Project), 1993 Series C,                                          5.50        1,000        1,000
 5.50% 10/2/00*
(Mobil Alaska Pipeline Co. Project), 1993 Series A,                                       5.40        1,700        1,700
 5.40% 10/6/00*
Arizona  -  3.67%
Salt River Project Agricultural Improvement and Power
District, Promissory Notes, TECP:
Series A:
4.20% 10/4/00                                                                             4.20        1,500        1,500
4.10% 10/5/00                                                                             4.10        1,100        1,100
4.20% 11/1/00                                                                             4.20        2,500        2,500
Series B:
4.10% 10/4/00                                                                             4.11        2,000        2,000
4.10% 11/9/00                                                                             4.10        2,000        2,000
County of Apache, Industrial Development Revenue Bonds
(Tuscon Electric Power Co. Springerville
Project), 1983 Series A, 5.55% 10/06/00*                                                  5.55        1,000        1,000

Colorado  -  1.82%
General Fund Tax and Revenue Anticipation Notes,                                          4.29        5,000        5,023
Series 2000A, 5.00% 6/27/01

Delaware  -  1.09%
Economic Development Authority, Industrial Development
Revenue Bonds (Delaware Clean Power Project),
Series 1997D AMT, 5.85% 10/6/00*                                                          5.85        3,000        3,000

District of Columbia  -  3.48%
Multimodal Revenue Bonds (American National Red Cross                                     4.15        2,100        2,100
Issue), Series 2000, 4.15% 11/7/00
Variable Rate Revenue Bonds (National Academy of
Sciences Project), Series 1999 B, TECP:
4.25% 10/19/00                                                                            4.25        2,500        2,500
4.35% 10/23/00                                                                            4.35        2,500        2,500
4.20% 11/15/00                                                                            4.20        2,500        2,500

Florida  -  1.56%
City of Gainesville, Utilities System, Commercial                                         4.20        2,300        2,300
Paper Notes, Series C, TECP, 4.20% 10/16/00
University of South Florida Foundation, Inc.,                                             5.45        2,000        2,000
Certificates of Participation, Series 1999, 5.45% 10/6/00*

Georgia  -  0.91%
Municipal Electric Authority of Georgia Commercial
 Paper Program, Project One Bond Anticipation Notes,
Series 1985 A, TECP:
4.25% 10/13/00                                                                            4.25        1,500        1,500
4.10% 11/8/00                                                                             4.10        1,000        1,000

Illinois  -  1.09%
Illinois Development Finance Authority, Variable Rate
Demand Revenue Bonds, Series 1999 (Metropolitan
Family Services Project), 5.70% 10/6/00*                                                  5.70        3,000        3,000

Kentucky  -  3.34%
Pendleton County, Multi-County Lease Revenue Bonds
(Kentucky Association of Counties Leasing Trust
Program), Series 1989, Money Market Municipal, TECP:
4.20% 11/6/00                                                                             4.20        4,200        4,200
4.10% 11/7/00                                                                             4.10        3,000        3,000
4.05% 11/9/00                                                                             4.05        2,000        1,999

Louisiana  -  0.40%
South Louisiana Port Commission, Port Facility Revenue                                    5.65        1,100        1,100
Bonds (Holnam Inc. Project), Series 1997, AMT,
 5.65% 10/6/00*

Maryland  -  10.81%
Health and Higher Education Facilities Authority, Pooled
 Loan Program Revenue Notes (The Johns Hopkins Hospital),
 Series C, TECP:
4.05% 10/6/00                                                                             4.05        1,800        1,800
4.20% 10/6/00                                                                             4.20        1,000        1,000
4.20% 10/12/00                                                                            4.20        3,500        3,500
4.15% 10/13/00                                                                            4.15        1,500        1,500
4.15% 11/3/00                                                                             4.15        3,300        3,300
Anne Arundel County, Economic Development Revenue Bonds
(Baltimore Gas and Electric Co. Project), TECP:
Series 1985, 4.30% 10/3/00                                                                4.30        4,000        4,000
Series 1988, AMT:
4.25% 10/5/00                                                                             4.25        2,500        2,500
4.25% 11/3/00                                                                             4.25        1,300        1,300
4.20% 11/8/00                                                                             4.20        2,900        2,900
Baltimore County, Economic Development Revenue Bonds                                      4.20        1,100        1,100
(Baltimore Gas and Electric Co. Project), Series 1985,
 TECP, 4.20% 10/4/00
Montgomery County, Consolidated Commercial Paper Bond
Anticipation Notes, Series 1995, TECP:
4.20% 10/2/00                                                                             4.20        3,000        3,000
4.25% 10/12/00                                                                            4.25        3,900        3,900

Massachusetts  -  3.35%
General Obligation Bond Anticipation Notes, 2000                                          4.36        3,000        3,017
 Series A, 5.00% 9/6/01
Development Finance Agency, First Mortgage Revenue                                        5.45        4,500        4,500
Variable Rate Bonds (Lassell Village Project), Series
1998C, 5.45% 10/6/00*
Water Resources Authority, Series 1994, TECP,                                             4.20        1,700        1,700
4.20% 11/6/00

Michigan  -  0.73%
Municipal Bond Authority, Revenue Notes, Series                                           4.35        2,000        2,010
 2000C-2, 5.00% 8/23/01

Minnesota  -  2.91%
General Obligation State Various Purpose Bonds,                                           4.27        1,500        1,517
5.70% 8/1/01
City of Rochester, Health Care Facilities Revenue Bonds
(Mayo Foundation/Mayo Medical Center), Adjustable
Tender, TECP:
Series 1992A, 4.25% 11/2/00                                                               4.25        1,900        1,900
Series 1992B, 4.15% 10/11/00                                                              4.15        3,000        3,000
Series 1992C, 4.00% 11/1/00                                                               4.00        1,600        1,600

Missouri  -  2.54%
Higher Education Loan Authority, Adjustable Rate Demand                                   5.50        3,600        3,600
Student Loan Revenue Bonds, AMT, 5.50% 10/6/00*
City of Columbia, Special Obligation Insurance Reserve                                    5.55        3,400        3,400
 Bonds, Series 1998A, 5.55% 10/6/00*

New Mexico  -  1.46%
Tax and Revenue Anticipation Notes, Series 2000-2001,                                     4.31        4,000        4,018
 5.00% 6/29/01

New York  -  1.65%
State Housing Finance Agency, Revenue Bonds (Saxony                                       5.55        1,500        1,500
Housing), 1997 Series A, AMT, 5.55% 10/6/00*
Municipal Assistance Corporation For the City of New York:
Series 1997H, 5.00% 7/1/01                                                                4.28        1,860        1,870
Series 1999N, 5.00% 7/1/01                                                                4.28        1,160        1,166

North Carolina  -  2.29%
Educational Facilities Finance Agency, Revenue Bonds                                      5.50        2,800        2,800
(Duke University Project), Series 1992A, 5.50% 10/6/00*
Medical Care Commission Variable Rate Hospital
 Revenue Bonds
(Pooled Financing Project), Series 1996A, 5.55% 10/02/00*                                 5.55        1,005        1,005
Board of Governors of the University of North Carolina
at Chapel Hill, Athletic Facilities Revenue Bonds,
Series 1998, 5.70% 10/6/00*                                                               5.70        2,500        2,500

Ohio  -  4.32%
City of Cleveland, Subordinated Income Tax Variable Rate                                  5.40        4,420        4,420
Refunding Bonds, Series 1994, 5.40% 10/6/00*
County of Hamilton, Hospital Revenue Bonds (Bethesda                                      5.50        2,000        2,000
Hospital, Inc.), Series 1995, 5.50% 10/6/00*
Ohio State University, Revenue Bonds:
Series 1997, 5.40% 10/6/00*                                                               5.40        3,180        3,180
Series 1999B, 5.40% 10/6/00*                                                              5.40        2,300        2,300

Pennsylvania  -  6.03%
Higher Education Assistance Agency, Student Loan                                          5.70        2,000        2,000
Adjustable Rate Revenue Bonds, 1997 Series A, AMT,
 5.70% 10/6/00*
Delaware County Industrial Development Authority:
Pollution Control Revenue Refunding Bonds (Philadelphia                                   4.10        4,600        4,600
Electric Co. Project), 1998 Series A, FGIC Insured,
TECP, 4.10% 10/6/00
Solid Waste Revenue Bonds (Scott Paper Co. Project),                                      5.60        1,000        1,000
Series 1998C, 5.60% 10/6/00*
City of Philadelphia, Gas Works Revenue Notes, CP                                         4.20        2,000        2,000
Series C, 4.20% 10/3/00
Venango Industrial Development Authority, Resource
Recovery Revenue Bonds (Scrubgrass Project), Series
1990A, TECP, AMT:
4.50% 10/20/00                                                                            4.50        2,000        2,000
4.50% 10/24/00                                                                            4.50        3,500        3,500
4.30% 10/25/00                                                                            4.30        1,500        1,500

South Carolina  -  5.48%
Public Service Authority (Santee Cooper Hydroelectric
Project), TECP, Series 1983:
4.10% 10/3/00                                                                             4.10        4,000        4,000
4.10% 10/10/00                                                                            4.10        2,000        2,000
4.20% 11/1/00                                                                             4.20        2,000        2,000
4.25% 11/8/00                                                                             4.25        3,100        3,100
York County, Pollution Control Facilities Revenue                                         4.30        4,000        4,000
Refunding Bonds (Duke Power Co. Project), Series
1990, 4.30% 11/14/00

Tennessee  -  1.78%
General Obligation Bond Anticipation Notes, Series A,                                     4.20        1,100        1,100
4.20% 11/20/00
Public Building Authority of the County of Montgomery,
Adjustable Rate Pooled Financing Revenue Bonds
(Tennesse County Loan Pool), Series 1997, 5.70% 10/6/00*                                  5.70        3,800        3,800

Texas  -  19.54%
Tax and Revenue Anticipation Notes, Series 2000,                                          4.30        3,700        3,729
5.25% 8/31/01
Brazos Higher Education Authority Inc., Student Loan                                      5.50        1,000        1,000
Revenue Bonds, Series 1993 B-1, AMT, 5.50% 10/6/00*
Brazos River Authority, Collateralized Pollution
Control Revenue Refunding Bonds
Series 1994, TECP, AMT, 4.25% 11/7/00                                                     4.25        3,800        3,800
Series D, MBIA Insured,  AMT, 5.70% 10/6/00*                                              5.70        3,000        3,000
City of Brownsville Utility System, Series A, TECP:
4.05% 10/5/00                                                                             4.05        3,500        3,500
4.20% 10/11/00                                                                            4.20        1,900        1,900
4.20% 10/11/00                                                                            4.20        2,000        2,000
4.20% 11/2/00                                                                             4.20        2,000        2,000
4.10% 11/8/00                                                                             4.10        1,000        1,000
Harris County General Obligation Notes, TECP:
Series A, 4.20% 11/2/00                                                                   4.20        1,800        1,800
Series C, 4.25% 11/13/00                                                                  4.25        3,000        3,000
Series D:
4.20% 10/10/00                                                                            4.20        1,854        1,854
4.15% 10/12/00                                                                            4.15        2,204        2,204
4.10% 11/13/00                                                                            4.10        2,650        2,649
City of Houston, General Obligation Commercial Paper
Notes, TECP, Series A:
4.25% 10/10/00                                                                            4.25        4,500        4,500
4.20% 11/3/00                                                                             4.20        1,600        1,600
4.10% 11/10/00                                                                            4.10        1,500        1,500
City of Midlothian Industrial Development Corp.,
Variable Rate Demand Pollution Control Revenue Bonds
(Box-Crow Cement Co. Project), 5.55% 10/6/00*                                             5.55        4,300        4,300
South Texas Higher Education Authority, Inc. Student
Loan Revenue Bonds, Series 1997, MBIA Insured, AMT:
5.50% 10/6/00*                                                                            5.50        4,900        4,900
5.50% 10/6/00*                                                                            5.50        3,600        3,600

Utah  -  1.60%
Intermountain Power Agency Variable Rate Power Supply
Revenue Bonds, 1985 Series F, AMBAC Insured, TECP:
4.25% 12/04/00                                                                            4.25        2,400        2,399
4.25% 12/05/00                                                                            4.25        2,000        2,000

Virginia  -  0.54%
City of Norfolk, Industrial Development Authority,
Hospital Revenue Bonds (Sentara Hospitals -
Norfolk Project)
Series 1990A, TECP, 4.20% 10/2/00                                                         4.20        1,500        1,500

Washington  -  5.18%
Public Power Supply System, Project No. 1 Refunding
Electric Revenue Bonds:
Series 1991A, 6.875% 7/1/17 (Prerefunded 7/1/01)                                          4.31        3,000        3,113
Series 1993-1A, 5.45% 10/6/00*                                                            5.45        2,240        2,240
Port of Seattle:
Variable Rate General Obligation Bonds, Series                                            5.55        2,500        2,500
1985, 5.55% 10/6/00*
Subordinate Lien Revenue Notes, Series A, TECP:
4.20% 10/4/00                                                                             4.20        4,330        4,330
4.25% 10/13/00                                                                            4.25        2,100        2,100

West Virginia  -  2.36%
The County Commission of Marion County, Solid Waste
Disposal Facility Revenue Bonds,
1990 Series A (Grant Town Cogeneration Project),                                          5.65        1,500        1,500
AMT, 5.65% 10/6/00*
The County Commission of Putnam County, Solid Waste
Disposal Revenue Bonds (Toyota Motor Manufacturing
Project),
2000 Series A, AMT, 5.60% 10/6/00*                                                        5.60        5,000        5,000

Wisconsin  -  3.56%
General Obligation Bonds, TECP:
Series 1997A:
4.20% 11/6/00                                                                             4.20        3,423        3,423
4.10% 11/9/00                                                                             4.10        2,000        2,000
Series 1998A, 4.10% 11/10/00                                                              4.10        2,189        2,189
Series 1998B, 4.25% 11/3/00                                                               4.25        1,212        1,212
Transportation Revenue Commercial Paper Notes of 1997,                                    4.10        1,000        1,000
Series A, TECP, 4.10% 11/2/00

Wyoming  -  1.09%
Tax and Revenue Anticipation Notes, Series 2000A,                                         4.35        3,000        3,013
5.00% 6/27/01
                                                                                                                -------
Total Municipal Securities   (cost: $269,505,000)                                                                269,480
Excess of cash and receivables over payables                                                                       6,022
                                                                                                                -------
Net Assets                                                                                                       $275,502
                                                                                                                -------
*Coupon rate may change periodically; "yield at
acquisition" reflects current coupon rate.

See Notes to Financial Statements
</TABLE>

<TABLE>
The Tax-Exempt Money Fund of America
FINANCIAL STATEMENTS
<S>                                                      <C>                          <C>
STATEMENT OF ASSETS AND LIABILITIES
at September 30, 2000                                          (dollars in thousands)

Assets:
Investment securities at market
 (cost: $269,505)                                                                            $269,480
Cash                                                                                              742
Receivables for--
 Sales of fund's shares                                                        $4,955
 Accrued interest                                                               1,248           6,203

                                                                                              276,425
Liabilities:
Payables for--
 Repurchases of fund's shares                                                     634
 Dividends on fund's shares                                                        62
 Management services                                                               88
 Other expenses                                                                   139             923

Net Assets at September 30, 2000 --
 Equivalent to $1.00 per share on
 275,597,809 shares of beneficial
 interest issued and outstanding;
 unlimited shares authorized                                                                 $275,502

STATEMENT OF OPERATIONS
for the year ended September 30, 2000                          (dollars in thousands)

Investment Income:
Income:
 Interest                                                                                     $10,613

Expenses:
 Management services fee                                                       $1,055
 Distribution expenses                                                            123
 Transfer agent fee                                                               191
 Reports to shareholders                                                           13
 Registration statement and prospectus                                            122
 Postage, stationery and supplies                                                 112
 Trustees' fees                                                                    14
 Auditing and legal fees                                                           53
 Custodian fee                                                                     56
 Taxes other than federal income tax                                                8           1,747

 Net investment income                                                                          8,866

Change in Unrealized Depreciation
 on Investments:
Net unrealized depreciation
 on investments:
 Beginning of year                                                                (13)
 End of year                                                                      (24)

  Net change in unrealized
   depreciation on investments                                                                    (11)

Net Increase in Net Assets Resulting
 from Operations                                                                               $8,855


STATEMENT OF CHANGES IN NET ASSETS                             (dollars in thousands)


                                                                           Year ended    September 30
                                                                                 2000            1999
Operations:
Net investment income                                                        $  8,866        $  5,659
Net unrealized
 depreciation on investments                                                      (11)            (59)

 Net increase in net assets
  resulting from operations                                                     8,855           5,600

Dividends Paid to Shareholders                                                 (8,875)         (5,698)

Capital Share Transactions:
Proceeds from shares sold                                                     516,723         475,332
Proceeds from shares issued in
 reinvestment of net investment
 income dividends                                                               8,239           5,249
Cost of shares repurchased                                                   (504,880)       (423,237)

 Net increase in net assets
  resulting from capital share
  transactions                                                                 20,082          57,344

Total Increase in Net Assets                                                   20,062          57,246

Net Assets:
Beginning of year                                                             255,440         198,194


End of year                                                                  $275,502        $255,440




See Notes to Financial Statements

</TABLE>

 Notes to Financial Statements

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION - The Tax-Exempt Money Fund of America(the"fund") is registered
under the Investment Company Act of 1940 as an open-end, diversified management
investment company. The fund seeks to provide income free from federal taxes,
while preserving capital and maintaining liquidity, through investments in
high-quality municipal securities with effective maturities of one year or
less.

SIGNIFICANT ACCOUNTING POLICIES - The financial statements have been prepared
in conformity with accounting principles generally accepted in the United
States which require management to make estimates and assumptions that affect
the reported amounts and disclosures in the financial statements.  Actual
results could differ from those estimates. The following is a summary of the
significant accounting policies consistently followed by the fund  in the
preparation of its financial statements:

NET ASSET VALUE - The fund uses the penny-rounding method of valuing its
shares, in accordance with Securities and Exchange Commission (SEC) rules.
This method permits the fund to maintain a constant net asset value of $1.00
per share, provided the market value of the fund's shares does not deviate from
$1.00 by more than one-half of 1% and the fund complies with other restrictions
set forth in the SEC rules.

SECURITY VALUATION - Fixed-income securities are valued at prices obtained from
a pricing service, when such prices are available; however, in circumstances
where the investment adviser deems it appropriate to do so, such securities
will be valued at the mean quoted bid and asked prices or at prices for
securities of comparable maturity, quality and type. Short-term securities
maturing within 60 days are valued at amortized cost, which approximates market
value.

 Securities and assets for which representative market quotations are not
readily available are valued at fair value as determined in good faith by a
committee appointed by the Board of Trustees. The ability of the issuers of the
fixed-income securities held by the fund to meet their obligations may be
affected by economic developments in a specific industry, state or region.

 SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME - Security transactions
are accounted for as of the trade date. Interest income is recognized on the
accrual basis. Market discounts, premiums, and original issue discounts on
fixed-income securities are amortized daily over the expected life of the
security.

DIVIDENDS TO SHAREHOLDERS - Dividends to shareholders are declared daily after
the determination of the fund's net investment income and are paid to
shareholders monthly.

2. FEDERAL INCOME TAXATION

The fund complies with the requirements of the Internal Revenue Code applicable
to regulated investment companies and intends to distribute all of its net
taxable income for the fiscal year. As a regulated investment company, the fund
is not subject to income taxes if such distributions are made. Required
distributions are determined on a tax basis and may differ from net investment
income for financial reporting purposes. In addition, the fiscal year in which
amounts are distributed may differ from the year in which the net investment
income is recorded by the fund.

 As of September 30, 2000, net unrealized depreciation on investments for book
and federal income tax purposes aggregated $24,000; $1,000 related to
appreciated securities and $25,000 related to depreciated securites. The cost
of portfolio securities for book and federal income tax purposes was
$269,505,000 at September 30, 2000.

3. FEES AND TRANSACTIONS WITH RELATED PARTIES

INVESTMENT ADVISORY FEE - The fee of $1,055,000 for management services was
incurred pursuant to an agreement with Capital Research and Management Company
(CRMC), with which certain officers and Trustees of the fund are affiliated.
The Investment Advisory and Service Agreement provides for monthly fees accrued
daily, based on the following rates and net asset levels:

<TABLE>
<CAPTION>
                           Net Asset Level

Rate                       In Excess of               Up to

<S>                        <C>                        <C>
 .39%                       $  0                       $200 million

 .37%                        200 million                600 million

 .33%                        600 million                1.2 billion

 .29%                        1.2 billion

</TABLE>

DISTRIBUTION EXPENSES - Pursuant to a Plan of Distribution with American Funds
Distributors, Inc. (AFD), the fund may expend up to 0.15% of net assets
annually for any activities primarily intended to sell fund shares, provided
the categories of expense are approved in advance by the fund's Board of
Trustees. Fund expenses under the Plan include payments to dealers to
compensate them for their selling and servicing efforts. For the year ended
September 30, 2000, aggregate distribution expenses under the plan were
$123,000 or .04% of net assets. As of September 30, 2000, accrued and unpaid
distribution expenses payable to AFD were $9,000.

TRANSFER AGENT FEE - A fee of $191,000 was incurred during the year ended
September 30, 2000 pursuant to an agreement with American Funds Service Company
(AFS), the transfer agent for the fund.

DEFERRED TRUSTEES' FEES - Trustees who are unaffiliated with CRMC may elect to
defer part or all of the fees earned for services as members of the Board.
Amounts deferred are not funded and are general unsecured liabilities of the
fund. As of September 30, 2000, aggregate deferred amounts and earnings thereon
since the deferred compensation plan's adoption (1993), net of any payments to
Trustees, were $13,000.

AFFILIATED TRUSTEES AND OFFICERS - CRMC is owned by The Capital Group
Companies, Inc. AFS and AFD are both wholly owned subsidiaries of CRMC.
Officers of the fund and certain Trustees are or may be considered to be
affiliated with CRMC, AFS and AFD. No such persons received any remuneration
directly from the fund.

4. INVESTMENT TRANSACTIONS AND OTHER DISCLOSURES

The fund made purchases and sales of investment securities, including
maturities, of $1,331,835,000 and $1,318,742,000, respectively, during the year
ended September 30, 2000.

  Pursuant to the custodian agreement, the fund receives credits against its
custodian fee for imputed interest on certain balances with the custodian bank.
During the year ended September 30, 2000, the custodian fee of $56,000 includes
$1,000 that was paid by these credits rather than in cash.

Net assets consisted of the following:
<TABLE>
<S>                                                              <C>
                                                                 dollars in thousands
Capital paid in on shares of beneficial interest                                  $275,598
Distributions in excess of net investment income                                      (72)
Net unrealized depreciation                                                           (24)
Net Assets                                                                        $275,502

</TABLE>

Capital share transactions in the fund were as follows:

<TABLE>
<S>                                 <C>                     <C>
                                                 Year ended
                                         September 30, 2000
                                               Amount (000)            Shares

  Sold                                            $ 516,723       516,723,462
  Reinvestment of dividends                           8,239         8,238,698
  Repurchased                                      (504,880)     (504,879,768)
Total Net Increase in Fund                       $   20,082        20,082,392

                                                 Year ended
                                         September 30, 1999
                                               Amount (000)            Shares

  Sold                                            $ 475,332       475,331,901
  Reinvestment of dividends                           5,249         5,248,578
  Repurchased                                      (423,237)     (423,236,513)
Total Net Increase in Fund                       $   57,344        57,343,966

</TABLE>

<TABLE>
The Tax-Exempt Money fund of America
PER-SHARE DATA AND RATIOS
<S>                                                  <C>           <C>           <C>


                                                        Net asset                       Dividends
                                                            value,          Net        (from net
                                                         beginning    investment       investment
Year ended                                                 of year        income          income)
Class A:(1)
2000                                                         $1.00     $.032 (2)          $(.032)
1999                                                           1.00         .025            (.025)
1998                                                           1.00         .029            (.029)
1997                                                           1.00         .029            (.029)
1996                                                           1.00         .029            (.029)




                                                       Net asset                    Net assets,
                                                       value, end      Total        end of year
Year ended                                              of year        return      (in millions)
Class A:(1)
2000                                                     $1.00         3.29%           $276
1999                                                      1.00         2.51            255
1998                                                      1.00         2.97            198
1997                                                      1.00         2.94            160
1996                                                      1.00         2.91            144

                                                       Ratio of      Ratio of
                                                     expenses to   expenses to
                                                      average net   average net      Ratio of
                                                       assets -      assets -         income
                                                      before fee     after fee      to average
Year ended                                               waiver        waiver       net assets
Class A:(1)
2000                                                      .64%          .64%                3.23%
1999                                                      .68           .65                  2.33
1998                                                      .71           .65                  2.94
1997                                                      .74           .65                  2.94
1996                                                      .77           .65                  2.88



(1) The fund offers Class A shares only.
(2) Based on average shares outstanding.

</TABLE>

To the Board of Trustees and Shareholders of The Tax-Exempt Money Fund of
America:

In our opinion, the accompanying statement of assets and liabilities, including
the investment portfolio, and the related statements of operations and of
changes in net assets and the per-share data and ratios present fairly, in all
material respects, the financial position of The Tax-Exempt Money Fund of
America (the "Fund") at September 30, 2000, the results of its operations, the
changes in its net assets and the per-share data and ratios for the years
indicated, in conformity with accounting principles generally accepted in the
United States of America. These financial statements and per-share data and
ratios (hereafter referred to as "financial statements") are the responsibility
of the Fund's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
financial statements in accordance with auditing standards generally accepted
in the United Sates of America, which require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits, which included confirmation of securities at September
30, 2000 by correspondence with the custodian, provide a reasonable basis for
our opinion.

PRICEWATERHOUSECOOPERS LLP

Los Angeles, California
October 31, 2000


2000 Tax Information (unaudited)

We are required to advise you within 60 days of the fund's fiscal year-end
regarding the federal tax status of distributions received by shareholders
during such fiscal year.

Shareholders may exclude from federal taxable income any exempt-interest
dividends paid from net investment income. All of the dividends paid from net
investment income qualify as exempt-interest dividends.

Dividends received by retirement plans such as IRAs, Keogh-type plans and
403(b) plans need not be reported as taxable income. However, many retirement
plan trusts may need this information for their annual information reporting.

SINCE THE INFORMATION ABOVE IS REPORTED FOR THE FUND'S FISCAL YEAR AND NOT THE
CALENDAR YEAR, SHAREHOLDERS SHOULD REFER TO THEIR FORM 1099-DIV OR OTHER TAX
INFORMATION WHICH WILL BE MAILED IN JANUARY 2001 TO DETERMINE THE CALENDAR YEAR
AMOUNTS TO BE INCLUDED ON THEIR 2000 TAX RETURNS. SHAREHOLDERS SHOULD CONSULT
THEIR TAX ADVISERS.