TAX-EXEMPT UNIT TRUST


PROSPECTUS
Part One
October 27, 1993


Note:  This Prospectus may be used only when accompanied by Part
Two.


See Part Two for the "Schedules of Investments," essential
information based thereon, and financial statements, including the
report of independent public accountants, relating to the Series of
the Trust offered hereby.

THE NUVEEN TAX-EXEMPT UNIT TRUST consists of a number of underlying
separate unit investment trusts, each of which contains a
diversified portfolio of interest-bearing obligations issued by or
on behalf of states and territories of the United States and
authorities and political subdivisions thereof, the interest on
which is, in the opinion of bond counsel to each issuer, exempt
from all Federal income tax under existing law and, in the case of
a State Trust, from certain State income taxes in the State for
which such State Trust is named.  All Bonds (as defined herein) in
each Traditional Trust (as defined herein) were rated in the
category A or better by either Standard & Poor's Corporation or
Moody's Investors Service, Inc., on the date each Series was
established (BBB or Baa, respectively, or better by such services
in the case of National Trust 76 and earlier National Trusts and
SP-1 or MIG 2 or better in the case of a Short Term Trust).  All
Bonds in each Insured Trust (as defines herein) are covered by
policies of insurance obtained from the Municipal Bond Insurance
Association or the Municipal Bond Investor Assurance Corporation
guaranteeing payment of principal and interest when due.  All such
policies of insurance remain effective so long as the obligations
are outstanding.  As a result of such insurance, the Bonds in each
portfolio of the Insured Trusts have received a rating of Aaa by
Moody's Investors Service, Inc. and the Bonds in the Insured Trusts
and the Units of each such Trust have received a rating of AAA by
Standard & Poor's Corporation. Insurance relates only to the Bonds
in the Insured Trusts and not to the Units offered or to their
market value.


THE OBJECTIVES of the Trusts are tax-exempt income and conservation
of capital through a diversified investment in tax-exempt Bonds
(discount Bonds in the case of the Discount Trusts).  (See "Tax
Status of Unitholders.")  The payment of interest and the
preservation of capital are, of course, dependent upon the
continuing ability of the issuers or obligors, or both, of Bonds to
meet their obligations thereunder.  There is no guarantee that the
Trusts' objectives will be achieved. The price received upon
redemption may be more or less than the amount paid by Unitholders,
depending upon the market value of the Bonds on the date of tender
for redemption.

INTEREST INCOME to each Trust in a Series of the Nuveen Tax-Exempt
Unit Trust and to the Unitholders thereof, in the opinion of
counsel, under existing law, is exempt from Federal income tax,
and, in the case of a State Trust, from State income taxes in the
State for which such State Trust is named.  Capital gains, if any,
are subject to tax per Unit for a particular Trust.


PUBLIC OFFERING PRICE. The Public Offering Price per Unit for a
particular Trust for "secondary market" sales is equal to a pro
rata share of the sum of bid prices per Unit of the Bonds in such
Trust plus the sales charges for the Bonds determined in accordance
with the table set forth herein under the caption "Public Offering
Price" based on the number of years remaining to the maturity of
each such Bond and adjusted for cash, if any, held or owed by the
Trust.  See the table on page 6 regarding reduced sales charges on
large transactions.  Units are offered at the Public Offering Price
plus interest accrued to, but not including, the date of
settlement.  (See "Public Offering Price.")  The minimum purchase
is either $5,000 or 50 Units, whichever is less. The bid prices of
the Bonds in a portfolio may represent a "market" discount from or
premium over the par value of the Bonds.

THE UNITS being offered by this Prospectus are issued and
outstanding Units that have been reacquired by John Nuveen & Co.
Incorporated either by purchase of Units tendered to the Trustee
for redemption or by purchase in the open market. The price paid in
each instance was not less than the Redemption Price determined as
provided herein under the caption "How Units May Be Redeemed
Without Charge."  Any profit or loss resulting from the sale of the
Units will accrue to John Nuveen & Co. Incorporated and no proceeds
from the sale will be received by the Trusts.

MARKET. A Unitholder may redeem Units at the office of the Trustee,
United States Trust Company of New York, at prices based upon the
bid prices of the Bonds in such Trust.  The Sponsor, although not
required to do so, intends to make a secondary market for the Units
at prices based upon the bid prices of the Bonds in each Trust.

Both parts of this Prospectus should be retained for future
reference.


THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS.  ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.




 
 

Page 1     


TABLE OF CONTENTS
 
 
 
Page No.
 
 
Accrued Interest
...................................................  7 Accrued
Interest Rate per Unit .....................................  7
Accumulation Plan
.................................................. 69 Bonds, How
Selected ................................................  8 Bonds,
Prohibition against Substitution ............................ 75
Bond Ratings
.......................................................  * Bonds,
Removal from Trusts ......................................... 75
Call Provisions of Portfolio Bonds
.................................  * Capital Gains Taxability
........................................... 53 Dealer Discount
.................................................... 72 Description
of Units of Trusts .....................................  3
Distributions to Unitholders
....................................... 68 Distribution Payment
Dates ......................................... 68 Distribution of
Units to the Public ................................ 72 Estimated
Long-Term Return and Estimated Current Return ............  7
Evaluation
......................................................... 72
Expenses to Trusts
................................................. 67 Financial
Statements ...............................................  *
Insurance on Bonds in the Insured Trusts
...........................  4 Insurance on Certain Bonds in the
Traditional Trusts ...............  5 Interest Income to Trusts
..........................................  * Investments,
Schedules of ..........................................  * Legality
of Units .................................................. 77
Limitations on Liabilities of Sponsor and Trustee
.................. 75 Market for Units
................................................... 73 Minimum
Transaction ................................................  *
Optional Distribution Plans
........................................ 69 Ownership and Transfer
of Units .................................... 73 Public Offering
Price of Units .....................................  6 Quantity
Purchases .................................................  6
Ratings, Description of
............................................ 77 Record Dates
....................................................... 68
Redemption of Units by Trustee
..................................... 74 Reports to Unitholders
............................................. 71 Repurchase of
Units by Sponsor ..................................... 75 Sales
Charge .......................................................  *
Selection of Bonds for Deposit in the Trusts
.......................  8 Sponsor, Information about
......................................... 76 State Tax Status
................................................... 55 Successor
Trustees and Sponsors .................................... 76 Tax
Status of Unitholders .......................................... 53
Trustee, Information about
......................................... 75 Trustee's Fees
..................................................... 67 Trust
Indenture, Amendment and Termination ......................... 77
Unit Issuance and Transfer
......................................... 73 Unit Value and
Evaluation .......................................... 72
______________


 
 
* Information on this item appears in Part Two.
 
 



 
 

Page 2


THE NUVEEN TAX-EXEMPT UNIT TRUST


THE NUVEEN TAX-EXEMPT UNIT TRUST - DESCRIPTION


Each Series of the Nuveen Tax-Exempt Unit Trust (the "Trust") is
one of a series of separate but similar investment companies
created by the Sponsor, each of which is designated by a different
Series number.  Each Series includes one or more underlying
separate unit investment trusts; the trusts in which few or none of
the Bonds are insured are sometimes referred to as the "Traditional
Trusts," the trusts in which all of the Bonds are insured as
described herein are sometimes referred to as the "Insured Trusts,"
and the state trusts (both Traditional and Insured) are sometimes
referred to as the "State Trusts."  The general term "Trust(s)"
should  be understood to refer collectively to both Traditional and
Insured Trusts. Each Trust includes only Bonds that are, in the
opinion of counsel, exempt from Federal income tax and, in the case
of a State Trust, from certain taxation in the State for which such
State Trust is named. Each Series was created under the laws of the
State of New York pursuant to a Trust Indenture and Agreement (the
"Indenture") between John Nuveen & Co. Incorporated (the "Sponsor")
and United States Trust Company of New York (the "Trustee").

The objectives of the Trusts are income exempt from Federal income
tax and, in the case of a State Trust, where applicable, from State
income and intangibles taxes, and conservation of capital through
an investment in obligations issued by or on behalf of states and
territories of the United States and authorities and political
subdivisions thereof, the interest on which is, in the opinion of
recognized bond counsel to the issuing governmental authorities,
exempt from Federal income tax under existing law.  Bonds in any
State Trust have been issued primarily by or on behalf of the State
for which such Trust is named and counties, municipalities,
authorities and political subdivisions thereof, the interest on
which is, in the opinion of bond counsel, exempt from Federal and
(except for certain Bonds in the Connecticut Trusts, which were
issued prior to the taxation by Connecticut of interest income of
resident individuals) certain State income tax and intangibles
taxes, if any, for purchasers who qualify as residents of that
State.  Insurance guaranteeing the timely payment, when due, of all
principal and interest on the Bonds in each Insured Trust has been
obtained by the Sponsor or by the issuers of such Bonds from the
Municipal Bond Insurance Association or Municipal Bond Investors
Assurance Corporation, and as a result of such insurance the
obligations in the Insured Trusts are rated Aaa by Moody's
Investors Service, Inc. ("Moody's") and AAA by Standard & Poor's
Corporation ("Standard & Poor's" or "S&P").  (See "Insurance on
Bonds in the Insured Trusts.")  All obligations in each Traditional
Trust were rated at the date the Trust was established in the
category A or better (BBB or Baa or better by such services in the
case of National Trust 76 and earlier National Trusts and SP-1 or
MIG 2 or better in the case of short-term obligations included in
a Short Term Traditional Trust) by Standard & Poor's or Moody's
(including provisional or conditional ratings).  (See "Description
of Bond Ratings.")  In addition, certain Bonds in certain
Traditional Trusts may be covered by insurance guaranteeing the
timely payment, when due, of all principal and interest.  The bid
prices of the Bonds in the portfolio of any Trust may represent a
deep "market" discount from the par value of the Bonds. At the time
each Discount Trust was established, the market value of the Bonds
in the portfolio was significantly below face value, and the
current bid prices of the Bonds in such Trusts may continue to
represent a deep "market" discount from the par value of the Bonds.

Gains realized on the sale, payment on maturity or redemption of
the Bonds by the Trustee or on the sale or redemption of Units by
a Unitholder are included in a Unitholder's gross income for
Federal income tax purposes as capital gains. (See "Tax Status of
Unitholders.")  The Sponsor has deposited with the Trustee the
interest-bearing obligations listed in the Schedules of Investments
in Part Two (the "Bonds"), which constitute the Trusts' underlying
securities. There is, of course, no guarantee that the Trusts'
objectives will be achieved. The State of Florida imposes no income
tax on individuals, and exemption from that State's intangibles tax
provides only a slight tax advantage to purchasers of a Florida
Trust.   The State of Texas currently  imposes no income tax on
individuals; accordingly, there is no State tax advantage to
purchasers of a Texas Trust. (See "Tax Status of Unitholders" for
a discussion of these matters.)

Payment of interest on the Bonds in each Insured Trust, and of
principal at maturity, is guaranteed under policies of insurance
obtained by the Sponsor or by the issuers of the Bonds. (See
"Insurance on Bonds in Insured Trusts.")

At the Date of Deposit, each National Trust, State Trust and
Discount Trust consisted of long-term (approximately 15 to 40 year
maturities) obligations; each Long Intermediate Trust consisted of
intermediate to long-term (approximately 11 to 19 year maturities)
obligations; each intermediate Trust and State Intermediate Trust
consisted of intermediate-term (approximately 5 to 15 year
maturities) obligations; each Short Intermediate Trust and State
Short Intermediate Trust consisted of short to intermediate-term
(approximately 3 to 7 year maturities) obligations; and each Short
Term Trust consisted of short-term (approximately 1 to 5 year
maturities) obligations.

Each Trust consists of municipal debt obligations.  Because of this
an investment in a Trust should be made with an understanding of
the risks which investment in debt obligations may entail,
including the risk that the value of the debt obligations, and
therefore of the Units, will decline with increases in market
interest rates.  In general, the longer the period until the
maturity of a Bond, the more sensitive its value will be to
fluctuations in interest rates.  During recent years there have
been substantial fluctuations in interest rates and, accordingly,
in the value of long-term debt obligations. The Sponsor cannot
predict whether such fluctuations will continue.


Each Unit of a Trust represents an undivided interest in such Trust
equal to every other Unit.  To the extent that any Units are
redeemed by the Trustee, the aggregate value of the Trust's assets
will decrease by the amount paid to the redeeming Unitholder, but
the fractional undivided interest of each unredeemed Unit in such
Trust will increase proportionately.  The Units offered hereby are
issued and outstanding Units which have been reacquired by the
Sponsor either by purchase of Units tendered to the Trustee for
redemption or by purchase in the open market.  No offering is being
made on behalf of the Trusts and any profit or loss realized on the
sale of Units will accrue to the Sponsor.



 
 

Page 3



INSURANCE ON BONDS IN INSURED TRUSTS

Insurance guaranteeing the timely payment, when due, of all
principal and interest on the Bonds in each Insured Trust has been
obtained by the Sponsor or by the issuers or underwriters of Bonds
from the Municipal Bond Insurance Association (the "Association")
(for Insured Series 1 through 107) or the Municipal Bond Investors
Assurance Corporation (the "Corporation") (for Insured Series 108
and all subsequent Series) (the Association and the Corporation are
referred to collectively as the "Insurers").  Each insurance policy
is an obligation only of the Insurer that issued it and not of the
other: policies issued by the Association are obligations of the
Association and not of the Corporation, and policies issued by the
Corporation are not obligations of the Association or its members. 
The appropriate Insurer has issued a policy or policies of
insurance covering each of the Bonds in the Insured Trusts, each
policy to remain in force until the payment in full of such Bonds
and whether or not the Bonds continue to be held by an Insured
Trust.  By the terms of each policy the appropriate Insurer will
unconditionally guarantee to the holders or owners of the Bonds the
payment, when due, required of the issuer of the Bonds of an amount
equal to the principal of and interest on the Bonds as such
payments shall become due but not be paid (except that in the event
of any acceleration of the due date of principal by reason of
mandatory or optional redemption, default or otherwise, the
payments guaranteed will be made in such amounts and at such times
as would have been due had there not been an acceleration).  The
appropriate Insurer will be responsible for such payments, less any
amounts received by the holders or owners of the Bonds from any
trustee for the Bond issuers or from any other sources other than
the Insurer. The Insurers' policies relating to small industrial
development bonds and pollution control revenue bonds also
guarantee the full and complete payments required to be made by or
on behalf of an issuer of Bonds pursuant to the terms of the Bonds
if there occurs an event which results in the loss of the tax-
exempt status of the interest on such Bonds, including principal,
interest or premium payments, if any, as and when thereby required. 
Each Insurer has indicated that the insurance policies do not
insure the payment of principal or interest on Bonds which are not
required to be paid by the issuer thereof because the Bonds were
not validly issued; as indicated under "Tax Status of Unitholders,"
the respective issuing authorities have received opinions of bond
counsel relating to the valid issuance of each of the Bonds in the
Insured Trusts.  The Insurers' policies also do not insure against
nonpayment of principal of or interest on the Bonds resulting from
the insolvency, negligence or any other act or omission of the
trustee or other paying agent for the Bonds. The policies are not
covered by the Property/Casualty Insurance Security Fund specified
in Article 76 of the New York Insurance Law. The policies are non-
cancelable and the insurance premiums have been fully paid on or
prior to the Date of Deposit, either by the Sponsor or, if a policy
has been obtained by a Bond issuer, by such issuer.
Upon notification from the trustee for any Bond issuer or any
holder or owner of the Bonds or coupons that such trustee or paying
agent has insufficient funds to pay any principal or interest in
full when due, the appropriate Insurer will be obligated to deposit
funds promptly with Citibank, N.A., New York, New York, as fiscal
agent for the Insurers, sufficient to fully cover the deficit.  If
notice of nonpayment is received on or after the due date, the
appropriate Insurer will provide for payment within one business
day following receipt of the notice.  Upon payment by an Insurer of
any Bonds, coupons, or interest payments, such Insurer shall
succeed to the rights of the owner of such Bonds, coupons or
interest payments with respect thereto.


The Association. Each insurance company comprising the Association
is severally and not jointly obligated under each policy issued by
the Association in the following respective percentages:  The AEtna
Casualty and Surety Company 33%;, Fireman's Fund Insurance Company,
30%; The Travelers Indemnity Company, 15%; CIGNA Property and
Casualty Company (formerly AEtna Insurance Company), 12%; and The
Continental Insurance Company, 10%.  As a several obligor, each
such insurance company will be obligated only to the extent of its
percentage of any claim under the policy and will not be obligated
to pay any unpaid obligation of any other member of the
Association.  Each insurance company's participation is backed by
all of its assets.  However, each insurance company is a multiline
issuer involved in several lines of insurance other than municipal
bond insurance, and the assets of each insurance company also
secure all of its other insurance policy and surety bond
obligations.


The following table sets forth financial information with respect
to the five insurance companies comprising the Association.  The
statistics have been furnished by the Association and are as
reported by the insurance companies to the New York State Insurance
Department and are determined in accordance with statutory
accounting principles.  No representation is made herein as to the
accuracy or adequacy of such information or as to the absence of
material adverse changes in such information subsequent to the date
thereof.  In addition, these numbers are subject to revision by the
New York State Insurance Department which, if revised, could either
increase or decrease the amounts.










 
 


 
 

Page 4


 
 



MUNICIPAL BOND INSURANCE ASSOCIATION
FIVE MEMBER COMPANIES, ASSETS AND POLICYHOLDERS' SURPLUS
AS OF MARCH 31, 1993
(Amounts in Thousands)



CIGNA
Property
AEtna            Fireman's         Travelers         and          
   Continental Casualty         Fund              Indemnity       
 Casualty         Insurance                                 
                                                    
Assets                 $  9,677,968      $  6,525,501      $ 
10,035,535    $  6,119,803   $  2,552,384 Liabilities             
 8,372,450         4,858,297          8,149,483       5,568,613   
  2,196,125 Policyholder's
Surplus                   1,305,518         1,667,204         
1,886,052         551,190        356,259





The Corporation. The Corporation is the principal operating
subsidiary of MBIA, Inc., a New York Stock Exchange listed company. 
MBIA, Inc. is not obligated to pay the debts of or claims against
the Corporation.  The Corporation is a limited liability
corporation rather than a several liability association.  The
Corporation is domiciled in the State of New York and licensed to
do business in all 50 states, the District of Columbia and the
Commonwealth of Puerto Rico.

As of March 31, 1993, the Corporation had admitted assets of $2.7
billion (unaudited), total liabilities of $1.8 billion (unaudited),
and total capital and surplus of $918 million (unaudited)
determined in accordance with statutory accounting practices
prescribed or permitted by insurance regulatory authorities. 
Copies of the Corporation's year-end financial statements prepared
in accordance with statutory accounting practices are available
from the Corporation.  The address of the Corporation is 113 King
Street, Armonk, New York 10504.

Moody's rates all bond issues insured by the Insurers Aaa and
short-term loans MIG 1, both designated to be of the highest
quality.


Standard & Poor's rates all issues insured by the Insurers AAA
Prime Grade.


The Moody's rating of the Insurers should be evaluated
independently of the Standard & Poor's rating of the Insurers. No
application has been made to any other rating agency in order to
obtain additional ratings on the Bonds.  The ratings reflect the
respective rating agency's current assessment of the
creditworthiness of the Insurers and their ability to pay claims on
their policies of insurance.  (See "Description of Ratings.")  Any
further explanation as to the significance of the above ratings may
be obtained only from the applicable rating agency.

The above ratings are not recommendations to buy, sell or hold the
Bonds, and such ratings may be subject to revision or withdrawal at
any time by the rating agencies.  Any downward revision or
withdrawal of either or both ratings may have an adverse affect on
the market price of the Bonds.

Because the insurance on the Bonds will be effective so long as the
Bonds are outstanding, such insurance will be taken into account in
determining the market value of the Bonds and therefore some value
attributable to such insurance will be included in the value of the
Units of the Insured Trusts. The insurance does not, however,
guarantee the market value of the Bonds or of the Units.

INSURANCE ON CERTAIN BONDS IN TRADITIONAL TRUSTS


Insurance guaranteeing the timely payment, when due, of all
principal and interest on certain Bonds in a Traditional Trust may
have been obtained by the Sponsor, issuer, or underwriter of the
particular Bonds involved or by another party.  Such insurance,
which provides coverage substantially the same as that obtained
with respect to Bonds in Insured Trusts as described above, is
effective so long as the insured Bond is outstanding and the
insurer remains in business.  Insurance relates only to the
particular Bond and not to the Units offered hereby or to their
market value. Insured Bonds have received a rating of AAA by
Standard & Poor's and Aaa by Moody's, in recognition of such
insurance.

If a Bond in a Traditional Trust is insured, the Schedule of
Investments will identify the insurer.  Such insurance will be
provided by Financial Guaranty Insurance Company, AMBAC Indemnity
Corporation, MBIA Corp. of Illinois, Capital Guaranty Insurance
Corporation ("CGIC"), Financial Security Assurance, Inc., the
Association, the Corporation or Connie Lee Insurance Company
("Connie Lee").  The Sponsor to date has purchased  and presently
intends to purchase insurance for Bonds in Traditional Trusts
exclusively from the Corporation (see the preceding disclosure
regarding the Corporation).  There can be no assurance that any
insurer listed herein will be able to satisfy its commitments in
the event claims are made in the future.  However, at the date
hereof, Standard & Poor's has rated the claims-paying ability of
each insurer AAA, and Moody's has rated all bonds insured by each
such insurer, except CGIC and Connie Lee Aaa. Moody's gives no
ratings for bonds insured by CGIC or Connie Lee.






 
 

Page 5


Because any such insurance will be effective so long as the insured
Bonds are outstanding, such insurance will be taken into account in
determining the market value of such Bonds and therefore some value
attributable to such insurance will be included in the value of the
Units of the Trust that includes such Bonds.  The insurance does
not, however, guarantee the market value of the Bonds or of the
Units.

PUBLIC OFFERING PRICE


The Sponsor will appraise or cause to be appraised daily the value
of the underlying Bonds in each Trust as of 4:00 p.m. eastern time
on each day on which the New York Stock Exchange (the "Exchange")
is normally open for trading, and will adjust the Public Offering
Price of the Units commensurate with such appraisal.  Such Public
Offering Price will be effective for all orders received by a
dealer or the Sponsor at or prior to 4:00 p.m. eastern time on each
such day.  Orders received after that time, or on a day when the
Exchange is closed for a scheduled holiday or weekend, will be held
until the next determination of price.

The Public Offering Price of the Units of each Trust for secondary
market purchases is determined by adding to the Trustee's
determination of the bid price of each Bond in the Trust the
appropriate sales charge determined in accordance with the table
set forth below based upon the number of years remaining to the
maturity of each such Bond, adjusting the total to reflect the
amount of any cash held in or advanced to the principal account of
the Trust, and dividing the result by the number of Units of such
Trust then outstanding. For purposes of this calculation, Bonds
will be deemed to mature on their stated maturity dates unless: 
(a) the Bonds have been called for redemption or funds or
securities have been placed in escrow to redeem them on an earlier
call date, in which case such call date shall be deemed to be the
date upon which they mature; or (b) such Bonds are subject to a
"mandatory put," in which case such mandatory put date shall be
deemed to be the date upon which they mature.

Pursuant to the terms of the Indenture, the Trustee may terminate
a Trust if the net asset value of such Trust, as shown by any semi-
annual evaluation, is less than 20% of the original principal
amount of the Trust.  In the course of regularly appraising the
value of Bonds in each Trust, the Sponsor will attempt to estimate
the date on which a Trust's value will fall below the 20% level
based on anticipated bond events over a five-year period, including
maturities, escrow calls and current calls or refundings, assuming
certain market rates. The Sponsor intends from time to time to
recommend that certain Trusts whose values have fallen or are
anticipated to fall below the 20% level be terminated based on
certain criteria which could adversely affect the Trust's
diversification.  Once the Sponsor has determined that a Trust's
value has fallen or may fall below the 20% level within a five-year
period, for purposes of computing the sales charge using the table
set forth below, the maturity of each bond in such Trust will be
deemed to be the earlier of the estimated termination date of the
Trust or the actual date used when pricing the bond under Municipal
Securities Rulemaking Board rules and interpretations issued
thereunder.

The effect of this method of sales charge calculation will be that
different sales charge rates will be applied to each of the various
Bonds in a Trust portfolio based upon the maturities of such Bonds,
in accordance with the following schedule.  As shown, the sales
charge on Bonds in each maturity range (and therefore the aggregate
sales charge on the purchase) is reduced with respect to purchases
of at least $100,000 or 1,000 Units:

 
 





Amount of Purchase*

Years to                   Under     $100,000 to   $250,000 to   
$500,000 to   $1,000,000 Maturity                 $100,000    
$249,999      $499,999       $999,999        or more
_________________________________________________________________
_________

                                                      
                    Less than 1                  0          
 0             0              0                 0 1 but less than
2         1.523%       1.369%        1.317%         1.215%        
 1.061% 2 but less than 3         2.041%       1.833%        1.729% 
       1.626%          1.420% 3 but less than 4         2.564%    
  2.302%        2.175%         2.041%          1.781% 4 but less
than 5         3.093%       2.828%        2.617%         2.459%   
      2.175% 5 but less than 7         3.627%       3.239%       
3.093%         2.881%          2.460% 7 but less than 10       
4.167%       3.734%        3.520%         3.239%          2.828% 10
but less than 13       4.712%       4.221%        4.004%        
3.788%          3.253% 13 but less than 16       5.263%      
4.712%        4.439%         4.167%          3.627% 16 or more    
           5.820%       5.263%        4.987%         4.603%       
  4.004% ----------------------------------



*Breakdown sales charges are computed both on a dollar basis and on
the basis of the                number of Units purchased, using
the equivalent of 1,000 Units to $100,000, 2,500 Units to         
      $250,000, etc., and will be applied on that basis which is
more favorable to the purchaser.


The secondary market sales charges above are expressed as a percent
of the net amount invested; expressed as a percent of the Public
Offering Price, the maximum sales charge on any Trust, including
one consisting entirely of Bonds with more than 16 years to
maturity, would be 5.50% (5.820% of the net amount invested).  For
purposes of illustration, the sales charge on a Trust consisting
entirely of Bonds maturing in 13 to 16 years would be 5% (5.263% of
the net amount invested); on a Trust consisting entirely of Bonds
maturing in 10 to 13 years, 4.5% (4.712% of the net amount
invested); on a Trust consisting entirely of Bonds maturing in 5 to
7 years, 3.5% (3.627% of the net amount invested); and on a Trust
consisting entirely of Bonds maturing in 3 to 4 years, 2.5% (2.564%
of the net amount invested).  The actual sales charge included in
the Public Offering Price of any particular Trust will depend on
the maturities of the Bonds in the portfolio of such Trust.  

Page 6



As more fully set forth under "Accrued Interest" below, accrued
interest from the preceding Record Date to, but not
including, the settlement date of the transaction (five business
days after purchase) will be added to the Public Offering Price to
determine the purchase price of Units.

The above graduated sales charge will apply on all purchases of
Nuveen unit trust and mutual fund securities on any one day by the
same purchaser in the amounts stated, and for this purpose
purchases of this Series will be aggregated with concurrent
purchases of Units of any other Series or of shares of any open-end
management investment company of which the Sponsor is principal
underwriter and with respect to the purchase of which a sales
charge is imposed.

Purchases by or for the account of an individual and his or her
spouse and children under 21 years of age will be aggregated to
determine the applicable sales charge.  The graduated sales charges
are also applicable to a trustee or other fiduciary purchasing
securities for a single trust estate or single fiduciary account.
Employees of the Sponsor and any of its subsidiaries may purchase
Units of this or any other Nuveen unit trust at the current Public
Offering Price, plus accrued interest, less the sales charge.

Cash, if any, made available to the Sponsor prior to the settlement
date for a purchase of Units may be available for use in the
Sponsor's business, and may be of benefit to the Sponsor.

Whether or not Units are being offered for sale, the Sponsor shall
also determine the aggregate value of each Trust as of 4:00 p.m.
eastern time: (i) on each June 30 or December 31 (or, if such date
is not a business day, the last business day prior thereto), (ii)
on each day on which any Unit is tendered for redemption (or the
next succeeding business day if the date of tender is a non-
business day), and (iii) at such other times as may be necessary. 
For this purpose, a "business day" shall be any day on which the
Exchange is normally open.  (See "Unit Value and Evaluation.")

ACCRUED INTEREST


Accrued interest is the accumulation of unpaid interest on a bond
from the last day on which interest thereon was paid. Interest on
Bonds in each Trust is accounted for daily on an accrual basis. 
For this reason, the purchase price of Units of each Trust will
include not only the Public Offering Price but also the
proportionate share of accrued interest to the date of settlement.
Interest accrues to the benefit of Unitholders commencing with the
settlement date of their purchase transaction.
Accrued Interest does not include accrual of original issue
discount on zero coupon bonds, stripped obligations or other
original issue discount bonds. (See "Selection of Bonds for Deposit
in the Trusts" and "Tax Status of Unitholders.") Since municipal
bond interest is accrued daily but generally paid only semi-
annually and because of the varying interest payment dates of the
Bonds comprising each Trust portfolio, the amount of accrued
interest at any point in time will be greater than the amount of
interest that the Trust will have actually received and distributed
to Unitholders.  Assuming each Trust retains the size and
composition shown in the accompanying Part Two, annual interest
collected and distributed in future periods will approximate the
estimated Net Annual Interest Income stated therein.  There will,
however, always remain an item of accrued interest that is included
in the purchase price and the redemption price of Units.


As Bonds mature, or are redeemed or sold, the accrued interest
applicable to such Bonds is collected and subsequently distributed
to Unitholders. Unitholders who sell or redeem all or a portion of
their Units will be paid their proportionate share of the remaining
accrued interest to, but not including, the fifth business day
following the date of sale or tender.


ESTIMATED LONG-TERM RETURN AND ESTIMATED CURRENT RETURN


The Estimated Long-Term Return for each Trust is a measure of the
return to the investor over the estimated life of the Trust.  The
Estimated Long-Term Return represents an average of the yields to
maturity (or call) of the Bonds in the Trust's portfolio calculated
in accordance with accepted bond practice and adjusted to reflect
expenses and sales charges.  Under accepted bond practice, tax-
exempt bonds are customarily offered to investors on a "yield
price" basis, which involves computation of yield to maturity or to
an earlier call date (whichever produces the lower yield), and
which takes into account not only the interest payable on the bonds
but also the amortization or accretion to a specified date of any
premium over or discount from the par (maturity) value in the
bond's purchase price.  In calculating Estimated Long-Term Return,
the average yield for the Trust's portfolio is derived by weighing
each Bond's yield by the market value of the Bond and by the amount
of time remaining to the date to which the Bond is priced.  Once
the average portfolio yield is computed, this figure is then
reduced to reflect estimated expenses and the effect of the maximum
sales charge paid by investors.  The Estimated Long-Term Return
calculation does not take into account the difference in the timing
of payments to Unitholders who choose the quarterly or semi-annual
plan of distribution, which will reduce the economic return
compared to those who choose the monthly plan of distribution.

Estimated Current Return is computed by dividing the Net Annual
Interest Income per Unit by the Public Offering Price.  In contrast
to Estimated Long-Term Return, Estimated Current Return does not
reflect the amortization of premium or accretion of discount, if
any, on the Bonds in the Trust's portfolio.  Net Annual Interest
Income per Unit is calculated by dividing the annual interest
income to the Trust, less estimated expenses, by the number of
Units outstanding.

Net Annual Interest Income per Unit, used to calculate Estimated
Current Return, will vary with changes in fees and expenses of the
Trustee and the Evaluator and with the redemption, maturity,
exchange or sale of Bonds.  A Trust may experience expenses and
portfolio changes different from those assumed in the calculation
of Estimated Long-Term Return. There thus can be no assurance that
the Estimated Current Returns or Estimated Long-Term Returns quoted
for a Trust will be realized in the future.  Since both Estimated
Current Return and Estimated Long-Term Return quoted on a given
business day are based on the market value of the underlying Bonds
on that day, subsequent calculations of these performance measures
will reflect the current market value of the underlying Bonds and
may be higher or lower.


 
 

Page 7


DETERMINATION OF THE PRICE OF BONDS AT DATE OF DEPOSIT


Except as indicated below, for Series 590 and all prior Trusts, the
prices at which the Bonds deposited in each Trust would have been
offered to the public on the business day prior to the Date of
Deposit were determined on the basis of an evaluation of the Bonds
by Standard & Poor's, a firm regularly engaged in the business of
evaluating, quoting and appraising comparable bonds.  For Series
591 and all subsequent Series, the prices at which the bonds
deposited in each Trust would have been offered to the public on
the business day prior to the Date of Deposit was determined on the
basis of an evaluation of the Bonds by Kenny S & P Evaluation
Services ("Kenny S & P"), a firm regularly engaged in the business
of evaluating, quoting and appraising comparable bonds. With
respect to Bonds in Insured Trusts and insured Bonds in Traditional
Trusts, either Standard & Poor's or Kenny S&P, as applicable,
evaluated the Bonds as so insured. For National Trust 4 through 22,
such prices were determined by the Trustee on the basis of
consultation with dealers in public bonds other than the Sponsor,
by reference to the Blue List of Current Municipal Offerings (a
daily publication containing the current public offering prices of
public bonds of all grades currently being offered by  dealers and
banks).

SELECTION OF BONDS FOR DEPOSIT IN THE TRUSTS


In selecting Bonds for the Trusts, the following factors, among
others, were considered: (i) the Standard & Poor's rating of the
Bonds or the Moody's rating of the Bonds (see page 1 for a
description of minimum rating standards), (ii) the prices of the
Bonds relative to other bonds of comparable quality and maturity
(in addition, in the case of Discount Trusts, the prices relative
to newly issued bonds of comparable quality, coupon, and maturity,
i.e., the existence of "market" discount), (iii) the
diversification of Bonds as to purpose of issue and location of
issuer, (iv) the maturity dates of the Bonds and (v) in the case of
Insured Trusts only, the availability of insurance on such Bonds.

In order for Bonds to be eligible for insurance by the Association
or the Corporation, they must have credit characteristics which, in
the opinion of the applicable Insurer, would qualify them as
"investment grade" obligations. Insurance is not a substitute for
the basic credit of an issuer, but rather supplements the existing
credit and provides additional security therefor. All Bonds insured
by either of the Insurers receive a rating of AAA by Standard &
Poor's or Aaa by Moody's, as the case may be. (See "Insurance on
Bonds in the Insured Trusts.")

Each Trust consists of such Bonds listed in the Schedules of
Investments in Part Two as may continue to be held from time to
time (including certain securities deposited in the Trust in
exchange or substitution for any of such Bonds or upon certain
refundings) together with accrued and undistributed interest
thereon and undistributed cash realized from the disposition of
Bonds. Neither the Sponsor nor the Trustee shall be liable in any
way for any default, failure or defect in any Bond.  Because
certain of the Bonds may from time to time under certain
circumstances be sold or redeemed or will mature in accordance with
their terms and the proceeds from such events will be used to pay
for Units redeemed or distributed to Unitholders, and not
reinvested, no assurance can be given that a Trust will retain for
any length of time its present size and composition.

A Trust portfolio may consist of Bonds priced at a deep "market"
discount from par value at maturity.  A primary reason for the
market values of the Bonds being less than their par values is that
the coupon interest rates on the Bonds are lower than the current
market interest rates for newly issued bonds of comparable rating
and type.  At the time of issuance the Bonds were for the most part
issued at then current coupon interest rates.  The current yields
(coupon interest income as a percentage of market price) of
discount bonds are lower than the current yields of comparably
rated bonds of similar type newly issued at current interest rates
because discount bonds tend to increase in market value as they
approach maturity and the full principal amount becomes payable. 
A discount bond held to maturity will have a larger portion of its
total return in the form of capital gain and less in the form of
tax-exempt interest income than a comparable bond newly issued at
current market rates. (See "Tax Status of Unitholders.")  Discount
bonds with a longer term to maturity tend to have a higher current
yield and a lower current market value than otherwise comparable
bonds with a shorter term to maturity.  If interest rates rise, the
market discount of discount bonds will increase and the value of
such bonds will decrease; and if interest rates decline, the market
discount of discount bonds will decrease and the value of the bonds
will increase. Market discount attributable to interest rate
changes does not necessarily indicate a lack of market confidence
in the issuer. Investors should also be aware that many of the
Bonds in each Trust portfolio are subject to special or
extraordinary redemption at par (in the case of original issue
discount bonds, such redemption is generally to be made at the
issue price plus the amount of original issue discount accredit to
redemption; such price is hereafter referred to as "Accredit
Value") under certain circumstances, including economic and other
defaults.  Under such circumstances the redemption price for such
Bonds would not include any premium over par or Accredit Value
which the investor may have paid for such Bonds.

As a number of the Trusts contain Bonds issued by school districts,
investors should be aware that litigation challenging the validity,
under state constitutions, of present systems of financing public
education has been initiated in a number of states.  Decisions have
been reached in some states holding such school financing in
violation of state constitutions.  In addition, legislation to
effect changes in public school financing has been introduced in a
number of states.  The Sponsor, however, does not believe that such
efforts, even if successful, will have a material adverse affect on
the ability of any of the issuers of Bonds contained in the Trusts'
portfolios to make principal and interest payments when due.


The Sponsor participated as either the sole underwriter or manager
or as a member of the syndicates which were the original
underwriters of a number of the Bonds in certain Trusts.  An
underwriter or underwriting syndicate purchases bonds from the
issuer on a negotiated or competitive bid basis as principal with
the intention of marketing such bonds to investors at a profit.







 
 

Page 8


All of the Bonds in each Trust are subject to being called or
redeemed in whole or in part prior to their stated maturities
pursuant to the optional redemption provisions described in the
"Schedules of Investments" in Part Two and in most cases pursuant
to sinking fund, special or extraordinary redemption provisions. 
A bond subject to optional call is one which is subject to
redemption or refunding prior to maturity at the option of the
issuer.  A refunding is a method by which a bond issue is redeemed,
at or before maturity, by the proceeds of a new bond issue.  A bond
subject to sinking fund redemption is one which is subject to
partial call from time to time without premium from a fund
accumulated for the scheduled retirement of a portion of an issue
prior to maturity.  Special or extraordinary redemption provisions
may provide for redemption of all or a portion of an issue upon the
occurrence of certain circumstances usually related to defaults or
unanticipated changes in circumstances.  Events that may permit or
require the special or extraordinary redemption of bonds include,
among others: substantial damage to or destruction of the project
for which the proceeds of the bonds were used; exercise by a local,
state or Federal governmental unit of its power of eminent domain
to take all or substantially all of the project for which the
proceeds of the bonds were used; a final determination that the
interest on the bonds is taxable; changes in the economic
availability of raw materials, operating supplies or facilities or
technological or other changes which render the operation of the
project for which the proceeds of the bonds were used uneconomical;
changes in law or an administrative or judicial decree which render
the performance of the agreement under which the proceeds of the
bonds were made available to finance the project impossible or
which create unreasonable burdens or which impose excessive
liabilities, such as taxes, not imposed on the date the bonds were
issued, on the issuer of the bonds or the user of the proceeds of
the bonds; an administrative or judicial decree which requires the
cessation of a substantial part of the operations of the project
financed with the proceeds of the bonds; an overestimate of the
costs of the project to be financed with the proceeds of the bonds
resulting in excess proceeds which may be applied to redeem bonds;
an underestimate of a source of funds securing the bonds resulting
in excess funds which may be applied to redeem bonds; or a default
in payment or failure to comply with the restrictions created as
part of the bond financing on the part of the operator or principal
user of a project financed by the bonds.  The Sponsor is unable to
predict all of the circumstances which may result in such
redemption of an issue of Bonds.  See the discussion of the various
types of bond issues, below, for certain information on the call
provisions of such bonds, particularly single family mortgage
revenue bonds.

The exercise of redemption or call provisions will (except to the
extent the proceeds of the called Bonds are used to pay for Unit
redemptions) result in the distribution of principal and may result
in a reduction in the amount of subsequent interest distributions;
it may also affect the current return on Units of the Trust
involved.  Redemption pursuant to optional call provisions is more
likely to occur, and redemption pursuant to sinking fund or special
or extraordinary redemption provisions may occur, when the Bonds
have an offering side evaluation which represents a premium over
par.  Redemption pursuant to optional call provisions may be, and
redemption pursuant to sinking fund or special or extraordinary
redemption provisions is likely to be, at a price equal to the par
value of the bonds without any premium (in the case of original
issue discount bonds, such redemption is generally to be made at
the Accredit Value).  Because Bonds may have been valued at prices
above or below par value or the then- current Accredit Value at the
time Units were purchased, Unitholders may realize gain or loss
upon the redemption of portfolio Bonds. (See "Estimated Long-Term
Return and Estimated Current Return" and the "Schedules of 
Investments" in Part Two.)

Certain of the Bonds in each Trust portfolio may be subject to
continuing requirements such as the actual use of Bond proceeds,
manner of operation of the project financed from Bond proceeds or
rebate of excess earnings on Bond proceeds that may affect the
exemption of interest on such Bonds from Federal income taxation. 
Although at the time of issuance of each of the Bonds in each Trust
an opinion of bond counsel was rendered as to the exemption of
interest on such obligations from Federal income taxation, and the
issuers covenanted to comply with all requirements necessary to
retain the tax-exempt status of the Bonds, there can be no
assurance that the respective issuers or other obligors on such
obligations will fulfill the various continuing requirements
established upon issuance of the Bonds.  A failure to comply with
such requirements may cause a determination that interest on such
obligations is subject to Federal income taxation, perhaps even
retroactively from the date of issuance of such Bonds, thereby
reducing the value of the Bonds and subjecting Unitholders to
unanticipated tax liabilities.

Certain Bonds may carry a "mandatory put" (also referred to as a
"mandatory tender" or "mandatory repurchase") feature pursuant to
which the holder of such a Bond will receive payment of the full
principal amount thereof on a stated date prior to the maturity
date unless such holder affirmatively acts to retain the Bond. 
Under the Indenture, the Trustee does not have the authority to act
to retain any Bonds with such features; accordingly, it will
receive payment of the full principal amount of any such Bonds on
the stated put date and such date is therefore treated as the
maturity date of such Bonds in selecting Bonds for the respective
Trust and for purposes of calculating the average maturity of the
Bonds in any Trust.


To the best knowledge of the Sponsor, there was no litigation
pending as of the Date of Deposit in respect of any Bonds which
might reasonably be expected to have a material adverse effect on
any of the Trusts.  It is possible that after the Date of Deposit,
litigation may be initiated with respect to Bonds in any Trust. 
Any such litigation may affect the validity of such Bonds or the
tax-exempt nature of the interest thereon, but while the outcome of
litigation of such nature can never be entirely predicted, the
opinions of bond counsel to the issuer of each Bond on the date of
issuance state that such Bonds were validly issued and that the
interest thereon is, to the extent indicated, exempt from Federal
income tax.


The following paragraphs discuss certain characteristics of the
Bonds in the Trusts and of certain types of issuers in whose
securities a Trust portfolio may be deemed to be "concentrated." 
These paragraphs discuss, among other things, certain circumstances
which may adversely affect the ability of such issuers to make
payment of principal and interest on Bonds held in the portfolio of
a Trust or which may adversely affect the ratings of such Bonds;
with respect to the Insured Trusts, however, because of the
insurance obtained by the Sponsor or by the Bond issuers, such
changes should not adversely affect any Insured Trust's receipt of
principal and interest, the Standard & Poor's AAA or Moody's Aaa
ratings of the Bonds in the portfolio, or the Standard & Poor's AAA
rating of the Units of each Insured Trust.  An investment in Units
of any Trust should be made with an understanding of the risks that
such an investment may entail, certain of which are described
below.

 
Page 9



Health Facility Obligations. Some of the Bonds in a Trust may be
obligations of issuers whose revenues are derived from services
provided by hospitals or other health care facilities, including
nursing homes.  Ratings of bonds issued for health care facilities
are sometimes based on feasibility studies that contain projections
of occupancy levels, revenues and expenses.  A facility's gross
receipts and net income available for debt service may be affected
by future events and conditions including, among other things,
demand for services, the ability of the facility to provide the
services required, an increasing shortage of qualified nurses or a
dramatic rise in nursing salaries, physicians' confidence in the
facility, management capabilities, economic developments in the
service area, competition from other similar providers, efforts by
insurers and governmental agencies to limit rates, legislation
establishing state rate-setting agencies, expenses, government
regulation, the cost and possible unavailability of malpractice
insurance, and the termination or restriction of governmental
financial assistance, including that associated with Medicare,
Medicaid and other similar third party payor  programs. Medicare
reimbursements are currently calculated on a prospective basis and
are not based on a provider's actual costs.  Such method of
reimbursement may adversely affect reimbursements to hospitals and
other facilities for services provided under the Medicare program
and thereby may have an adverse effect on the ability of such
institutions to satisfy debt service requirements.  In the event of
a default upon a bond secured by hospital facilities, the limited
alternative uses for such facilities may result in the recovery
upon such collateral not providing sufficient funds to repay fully
the bonds.


Certain hospital bonds provide for redemption at par at any time
upon the damage, destruction or condemnation of the hospital
facilities or in other special circumstances.

Housing Obligations. Some of the Bonds in a Trust may be
obligations of issuers whose revenues are primarily derived from
mortgage loans to housing projects for low to moderate income
families.  Such issues are generally characterized by mandatory
redemption at par or, in the case of original issue discount bonds,
Accredit Value in the event of economic defaults and in the event
of a failure of the operator of a project to comply with certain
covenants as to the operation of the project.  The failure of such
operator to comply with certain covenants related to the tax-exempt
status of interest on the Bonds, such as provisions requiring that
a specified percentage of units be rented or available for rental
to low or moderate income families, potentially could cause
interest on such bonds to be subject to Federal income taxation
from the date of issuance of the Bonds. The ability of such issuers
to make debt service payments will be affected by events and
conditions affecting financed projects, including, among other
things, the achievement and maintenance of sufficient occupancy
levels and adequate rental income, employment and income conditions
prevailing in local labor markets, increases in taxes, utility
costs and other operating expenses, the managerial ability of
project managers, changes in laws and governmental regulations, the
appropriation of subsidies and social and economic trends affecting
the localities in which the projects are located. Occupancy of such
housing projects may be adversely affected by rent levels and
income limitations imposed under Federal and state programs.

Single Family Mortgage Revenue Bonds. Some of the Bonds in a Trust
may be single family mortgage revenue bonds, which are issued for
the purpose of acquiring from originating financial institutions
notes secured by mortgages on residences located within the
issuer's boundaries and owned by persons of low or moderate income. 
Mortgage loans are generally partially or completely prepaid prior
to their final maturities as a result of events such as sale of the
mortgaged premises, default, condemnation or casualty loss. 
Because these bonds are subject to extraordinary mandatory
redemption in whole or in part from such prepayments of mortgage
loans, a substantial portion of such bonds will probably be
redeemed prior to their scheduled maturities or even prior to their
ordinary call dates. Extraordinary mandatory redemption without
premium could also result from the failure of the originating
financial institutions to make mortgage loans in sufficient amounts
within a specified time period.  The redemption price of such
issues may be more or less than the offering price of such bonds. 
Additionally, unusually high rates of default on the underlying
mortgage loans may reduce revenues available for the payment of
principal of or interest on such mortgage revenue bonds.  Single
family mortgage revenue bonds issued after December 31, 1980 were
issued under Section 103A of the Internal Revenue Code of 1954, as
amended, or Section 143 of the Internal Revenue Code of 1986, as
amended (the "Code"), which Sections contain certain requirements
relating to the use of the proceeds of such bonds in order for the
interest on such bonds to retain its tax-exempt status.  In each
case, the issuer of the bonds has covenanted to comply with
applicable requirements and bond counsel to such issuer has issued
an opinion that the interest on the bonds is exempt from Federal
income tax under existing laws and regulations.  There can be no
assurance that such continuing requirements will be satisfied; the
failure to meet such requirements could cause interest on the Bonds
to be subject to Federal income taxation, possibly from the date of
issuance of the Bonds.

Federally Enhanced Obligations.  Some of the mortgages which secure
the various health care or housing projects which underlie the
previously discussed Health Facility, Housing, and Single Family
Mortgage Revenue Obligations (the "Obligations") in a Trust may be
insured by the Federal Housing Administration ("FHA").  Under FHA
regulations, the maximum insurable mortgage amount cannot exceed
90% of the FHA's estimated value of the project. FHA mortgage
insurance does not constitute a guarantee of timely payment of the
principal of and interest on the Obligations.  Payment of mortgage
insurance benefits may be (1) less than the principal amount of
Obligations outstanding or (2) delayed if disputes arise as to the
amount of the payment or if certain notices are not given to the
FHA within prescribed time periods.  In addition, some of the
previously discussed Obligations may be secured by mortgage-backed
certificates guaranteed by the Government National Mortgage
Association ("GNMA"), a wholly owned corporate instrumentality of
the United States, or the Federal National Mortgage Association
("Fannie Mae"), a federally chartered and stockholder-owed
corporation, or both.  GNMA and Fannie Mae guarantee timely payment
of principal and interest on the mortgage-backed certificates, even
where the underlying mortgage payments are not made. While such
mortgage-backed certificates are often pledged to secure payment of
principal and interest on the Obligations, timely payment of
interest and principal on the Obligations is not insured or
guaranteed by the United States, GNMA, Fannie Mae or any other
governmental agency or instrumentality.  The GNMA mortgage-backed
certificates constitute a general obligation of the United States
backed by its full faith and credit.  The obligations of Fannie
Mae, including its obligations under the Fannie Mae mortgage-backed
securities, are obligations solely of Fannie Mae and are not backed
by, or entitled to, the full faith and credit of the United States.



 
 

Page 10



Industrial Revenue Obligations. Certain of the Bonds in a Trust may
be industrial revenue bonds ("IRBs"), including pollution control
revenue bonds, which are tax-exempt securities issued by states,
municipalities, public authorities or similar entities to finance
the cost of acquiring, constructing or improving various industrial
projects.  These projects are usually operated by corporate
entities.  Issuers are obligated only to pay amounts due on the
IRBs to the extent that funds are available from the unexpended
proceeds of the IRBs or receipts or revenues of the issuer under an
arrangement between the issuer and the corporate operator of a
project.  The arrangement may be in the form of a lease,
installment sale agreement, conditional sale agreement or loan
agreement, but in each case the payments to the issuer are designed
to be sufficient to meet the payments of amounts due on the IRBs. 
Regardless of the structure, payment of IRBs is solely dependent
upon the creditworthiness of the corporate operator of the project
and, if applicable, corporate guarantor. Corporate operators or
guarantors may be affected by many factors which may have an
adverse impact on the credit quality of the particular company or
industry.  These include cyclicality of revenues and earnings,
regulatory and environmental restrictions, litigation resulting
from accidents or environmentally-caused illnesses, extensive
competition and financial deterioration resulting from a corporate
restructuring pursuant to a leveraged buy-out, takeover or
otherwise.  Such a restructuring may result in the operator of a
project becoming highly leveraged which may have an effect on such
operator's creditworthiness which in turn would have an adverse
effect on the rating or market value, or both, of such Bonds. 
Further, the possibility of such a restructuring may have an
adverse effect on the market for and consequently the value of such
Bonds, even though no actual takeover or other action is ever
contemplated or effected.  The IRBs in a Trust may be subject to
special or extraordinary redemption provisions which may provide
for redemption at par or, in the case of original issue discount
bonds, Accredit Value.  The Sponsor cannot predict the causes or
likelihood of the redemption of IRBs in a Trust prior to the stated
maturity of such Bonds.


Electric Utility Obligations. Some of the Bonds in a Trust may be
obligations of issuers whose revenues are primarily derived from
the sale of electric energy.  The problems faced by such issuers
include the difficulty in obtaining approval for timely and
adequate rate increases from the applicable public utility
commissions, the difficulty of financing large construction
programs, increased competition, reduction in estimates of future
demand for electricity in certain areas of the country, the
limitations on operations and increased costs and delays
attributable to environmental considerations, the difficulty of the
capital market in absorbing utility debt, the difficulty in
obtaining fuel at reasonable prices and the effect of energy
conservation.  All of such issuers have been experiencing certain
of these problems in varying degrees. In addition, Federal, state
and municipal governmental authorities may from time to time review
existing, and impose additional, regulations governing the
licensing, construction and operation of nuclear power plants,
which may adversely affect the ability of the issuers of certain of
the Bonds in a Trust to make payments of principal or interest, or
both, on such Bonds.


Transportation Facility Revenue Bonds. Some of the Bonds in a Trust
may be obligations of issuers which are payable from and secured by
revenues derived from the ownership and operations of airports,
public transit systems and ports. The major portion of an airport's
gross operating income is generally derived from fees received from
airlines pursuant to use agreements which consist of annual
payments for airport use, occupancy of certain terminal space,
service fees and leases.  Airport operating income may therefore be
affected by the ability of the airlines to meet their obligations
under the use agreements.  The air transport industry is
experiencing significant variations in earnings and traffic, due to
increased competition, excess capacity, increased costs,
deregulation, traffic constraints and other factors, and several
airlines are experiencing severe financial difficulties.  In
particular, facilities with use agreements involving airlines
experiencing financial difficulty may  experience a reduction in
revenue due to the possible inability of these airlines to meet
their use agreement obligations because of such financial
difficulties and possible bankruptcy.  The Sponsor cannot predict
what effect these industry conditions may have on airport revenues
which are dependent for payment on the financial condition of the
airlines and their usage of the particular airport facility.  Bonds
that are secured primarily by the revenue collected by a public
transit system typically are additionally secured by a pledge of
sales tax receipts collected at the state or local level, or other
governmental financial assistance.  Transit system net revenues
will be affected by variations in utilization, which in turn may be
affected by the amount of local government subsidies, and by
increased costs, including costs resulting from previous deferrals
of maintenance.  Port authorities derive their revenues primarily
from fees imposed on ships using the facilities.  The rate of
utilization may fluctuate depending on the local economy and on
competition from competing forms of transportation such as air,
rail and trucks.

Water and/or Sewerage Obligations. Some of the Bonds in a Trust may
be obligations of issuers whose revenues are derived from the sale
of water and/or sewerage services.  Such Bonds are generally
payable from user fees.  The problems of such issuers include the
ability to obtain timely and adequate rate increases, population
decline resulting in decreased user fees, the difficulty of
financing large construction programs, the limitations on
operations and increased costs and delays attributable to
environmental considerations, the increasing difficulty of
obtaining or discovering new supplies of fresh water, the effect of
conservation programs and the effects of "no-growth" zoning
ordinances.  All of such issuers have been experiencing certain of
these problems in varying degrees.

University and College Revenue Obligations.  Some of the Bonds in
a Trust may be obligations of issuers which are, or which govern
the operation of, colleges and universities and whose revenues are
derived mainly from tuition, dormitory revenues, grants and
endowments.  General problems of such issuers include the prospect
of a declining percentage of the population consisting of "college
age" individuals, possible inability to raise tuitions and fees
sufficiently to cover increased operating costs, the uncertainty of
continued receipt of Federal grants and state funding, and
government legislation or regulations which may adversely affect
the revenues or costs of such issuers.  All of such issuers have
been experiencing certain of these problems in varying degrees.
Bridge Authority and Tollroad Obligations.  Some of the Bonds in a
Trust may be obligations of issuers which derive their payments
from bridge, road or tunnel toll revenues.  The revenues of such an
issuer could be adversely affected by competition from toll-free
vehicular bridges and roads and alternative modes of
transportation.  Such revenues could also be adversely affected by
a reduction in the availability of fuel to motorists or significant
increases in the costs thereof.  Specifically, governmental
regulations restricting the use of vehicles in the New York City
metropolitan area may adversely affect the revenues of the
Triborough Bridge and Tunnel Authority.

 
 

Page 11



Dedicated-Tax Supported Bonds.  Some of the Bonds in a Trust may be
obligations of issuers which are payable from and secured by tax
revenues from a designated source, which revenues are pledged to
secure the bonds.  The various types of Bonds described herein
differ in structure and with respect to the rights of the
bondholders to the underlying property.  Each type of dedicated-tax
supported Bond has distinct risks, only some of which are set forth
herein. One type of dedicated-tax supported Bond is secured by the
incremental tax received on either real property or on sales within
a specifically defined geographical area; such tax generally will
not provide bondholders with a lien on the underlying property or
revenues.  Another type of dedicated-tax supported Bond is secured
by a special tax levied on real property within a defined
geographical area in such a manner that the tax is levied on those
who benefit from the project; such bonds typically provide for a
statutory lien on the underlying property for unpaid taxes.  A
third type of dedicated-tax supported Bond may be secured by a tax
levied upon the manufacture, sale or consumption of commodities or
upon the license to pursue certain occupations or upon corporate
privileges within a taxing jurisdiction. As to any of these types
of Bonds, the ability of the designated revenues to satisfy the
interest and principal payments on such Bonds may be affected by
changes in the local economy, the financial success of the
enterprise responsible for the payment of the taxes, the value of
any property on which taxes may be assessed and the ability to
collect such taxes in a timely fashion.  Each of these factors will
have a different affect on each distinct type of dedicated-tax
supported bonds.


Municipal Lease Bonds.  Some of the Bonds in a Trust may be
obligations that are secured by lease payments of a governmental
entity.  Such payments are normally subject to annual budget
appropriations of the leasing governmental entity.  A governmental
entity that enters into such a lease agreement cannot obligate
future governments to appropriate for and make lease payments but
covenants to take such action as is necessary to include any lease
payments due in its budgets and to make the appropriations
therefor.  A governmental entity's failure to appropriate for and
to make payments under its lease obligation could result in
insufficient funds available for payment of the obligations secured
thereby.


Original Issue Discount Bonds and Stripped Obligations.  Certain of
the Bonds in a Trust may be original issue discount bonds.  These
Bonds were issued with nominal interest rates less than the rates
then offered by comparable securities and as a consequence were
originally sold at a discount from their face, or par, values. 
This original issue discount, the difference between the initial
purchase price and face value, is deemed under current law to
accrue on a daily basis and the accrued portion is treated as tax-
exempt interest income for Federal income tax purposes.  On sale or
redemption, gain, if any, realized in excess of the earned portion
of original issue discount will be taxable as capital gain. (See
"Tax Status of Unitholders.")  The current value of an original
issue discount bond reflects the present value of its face amount
at maturity.  In a stable interest rate environment, the market
value of an original issue discount bond would tend to increase
more slowly in early years and in greater increments as the bond
approached maturity.

Certain of the original issue discount bonds in a Trust may be zero
coupon bonds.  Zero coupon bonds do not provide for the payment of
any current interest; the buyer receives only the right to receive
a final payment of the face amount of the bond at its maturity. 
The effect of owning a zero coupon bond is that a fixed yield is
earned not only on the original investment but also, in effect, on
all discount earned during the life of the obligation. This
implicit reinvestment of earnings at the same rate eliminates the
risk of being unable to reinvest the income on such obligation at
a rate as high as the implicit yield, but at the same time
eliminates the holder's ability to reinvest at higher rates in the
future.  For this reason, zero coupon bonds are subject to
substantially greater price fluctuations during periods of changing
market interest rates than are securities of comparable quality
that pay interest currently.

Original issue discount bonds, including zero coupon bonds, may be
subject to redemption at the Accreted Value plus, if applicable,
some premium.  Pursuant to such call provisions an original issue
discount bond may be called prior to its maturity date at a price
less than its face value.  See the "Schedules of Investments" in
Part Two for call provisions of portfolio Bonds.


Certain of the Bonds in a Trust may be Stripped Obligations, which
represent evidences of ownership with respect to either the
principal amount of or a payment of interest on a tax-exempt
obligation.  An obligation is "stripped" by depositing it with a
custodian, which then effects a separation in ownership between the
bond principal and any interest payment which has not yet become
payable, and issues evidences of ownership with respect to such
constituent parts. A Stripped Obligation therefore has economic
characteristics similar to zero coupon bonds, as described above.


Each Stripped Obligation has been purchased at a discount from the
amount payable at maturity.  With respect to each Unitholder, the
Code treats as "original issue discount" that portion of the
discount which produces a yield to maturity (as of the date of
purchase of the Unitholder's Units) equal to the lower of the
coupon rate of interest on the underlying obligation or the yield
to maturity on the basis of the purchase price of the Unitholder's
Units which is allocable to each Stripped Obligation.  Original
issue discount which accrues with respect to a Stripped Obligation
will be exempt from Federal income taxation to the same extent as
interest on the underlying obligations. (See "Tax Status of
Unitholders.")


Unitholders should consult their own tax advisers with respect to
the state and local tax consequences of owning original issue
discount bonds or Stripped Obligations.  Under applicable
provisions governing determination of state and local taxes,
interest on original issue discount bonds may be deemed to be
received in the year of accrual even though there is no
corresponding cash payment.

The Sponsor believes the information summarized below describes
some of the more significant events relating to the various State
Trusts.  The sources of such information are official statements of
issuers in each state and other publicly available information,
generally as of a date on or before September 3, 1993, unless
otherwise indicated.  The Sponsor has not independently verified
this information and makes no representation regarding the accuracy
or completeness of the sources of information which have been
available to it, but believes them to be complete and has itself
relied upon them.





 
 

Page 12


Alabama Trusts - Economic Factors

The portfolio of each Alabama Trust consists primarily of
obligations issued by entities located in Alabama.

Alabama's economy has experienced a major trend toward
industrialization over the past two decades.  By 1990,
manufacturing accounted for 39.7% of Alabama's Real Gross State
Product (the total value of goods and services in Alabama). During
the 1960s and 1970s the State's industrial base became more
diversified and balanced, moving away from primary metals into pulp
and paper, lumber, furniture, electrical machinery, transportation
equipment, textiles (including apparel), chemicals, rubber and
plastics.  Since the early 1980's, modernization of existing
facilities and an increase in direct foreign investments in the
State has made the manufacturing sector more competitive in
domestic and international markets.

Pulp, paper and chemicals have been some of the leading
manufacturing industries.  In recent years Alabama has ranked as
the fifth largest producer of timber in the nation.  The State's
growing chemical industry has been the natural complement of its
production of wood pulp and paper.  Mining, oil and gas production
and services industries are also important to Alabama's economy.
Coal mining is by far the most important mining activity.

In recent years, the importance of service industries to the
State's economy has increased significantly.  Major service
industries that are deemed to have significant growth potential
include the research and medical training and general health care
industries, most notably represented by the University of Alabama
medical complex in Birmingham and the high technology research and
development industries concentrated in the Huntsville area.  The
financial insurance and real estate sectors have also shown strong
growth over the last several years.

The economy in the State of Alabama recovered quickly from the
recession of the early 1980's.  The State has recovered and moved
forward faster than the national average.  The Alabama Development
Office (ADO) reported as of December 31, 1992, that for the sixth
consecutive year more than two billion dollars was expended in
Alabama for new and expanding industries.  The State had new and
expanding capital investment of $2.2 billion in 1991 and $2.0
billion in 1992. These expenditures included 17,693 announced jobs
created by 845 separate companies for 1991 and 19,582 announced
jobs by 979 companies in 1992.  In the last five years, $13.2
billion has been invested in new or expanding industry in the
State.  Some of the largest investments during the period 1987-1991
include Alabama Pine Pulp Company ($700 million); Mead Corporation
($500 million); EXXON Company USA ($300 million); Gulf States Paper
($225 million) and United States Steel Corp. ($200 million). 
During 1992, three significant were announced by companies within
the State.  These projects are by the Scott Paper Company ($344
million); Russell Corporation ($147 million) and Courtaulds Fibers,
Inc. ($125 million).

During the recent recession, State revenues suffered along with the
rest of the Nation.  Growth in overall tax revenues was only about
3.4 percent from fiscal 1991 to 1992.  Corporate income tax
receipts declined slightly from 1991 to 1992.  However, State tax
collections are up by about 8.9% for the nine-month period ending
June 30, 1993, as compared to the same period for fiscal 1992,
indicating an economic recovery is in progress.  Individual income
tax receipts and sales tax receipts for the same nine-month period
increased 8.0 percent and 7.8 percent, respectively. (Source:
Department of Revenue Abstracts, unaudited)


Real Gross State Product.  Real Gross State Product ("RGSP") is a
comprehensive measure of economic performance for the State of
Alabama.  Alabama's RGSP is defined as the total value of all final
goods and services produced in the State in constant dollar terms. 
Hence, changes in RGSP reflect changes in final output.  From 1986
to 1992 RGSP originating in manufacturing increased by 2.5%, while
RGSP originating in all the non-manufacturing sectors grew by 2.1%.


Those non-manufacturing sectors exhibiting large percentage
increases in RGSP originating between 1986 and 1992 were Mining,
Transportation, Communication and Public Utilities, and Services. 
From 1986 to 1992 RGSP originating in Mining increased by 5.7% per
year; Transportation, Communication and Public Utilities grew by
5.2% per year; and Services grew by 3.8% per year.  The present
movement toward diversification of the State's manufacturing base
and a similar present trend toward enlargement and diversification
of the transportation, communication and public utilities and
service industries in the State are expected to lead to increased
economic stability.

Employment.  The recent national economic recession was felt
severely in the State.  The manufacturing growth described above
reached a peak in 1979, and was followed by a decrease in activity. 
The national economic recession was principally responsible for
this decline.  The State's industrial structure is particularly
sensitive to high interest rates and monetary policy, and the
resulting unemployment during 1981-1984 was acute. Unemployment
rates have improved as the impact of the national economic recovery
has benefitted the State.  The economic recovery experienced on the 
national level since 1982 has been experienced in Alabama as well,
but to a different degree and with a time lag.  The unemployment
rate for 1992, released by the Alabama Department of Industrial
Relations, was 7.3% with a national rate of 7.4%.  
 
Certain Risk Factors.  Among other risks, the State's economy
depends upon cyclical industries such as iron and steel, natural
resources, and timber and forest products.  As a result, economic
activity may be more cyclical than in certain other Southeastern
states.  The national economic recession in the early 1980s caused
a decline in manufacturing activity and natural resource
consumption, and Alabama's unemployment rate was 14.4% in 1982,
significantly higher than the national average.  Unemployment
remains high in certain rural areas of the State.  A trend towards
diversification of the State's economic base and an expansion of
service industries may lead to improved economic stability in the
future, although there is no assurance of this.





 
 

Page 13



Political subdivisions of the State have limited taxing authority. 
In addition, the Alabama Supreme Court has held that a governmental
unit may first use its taxes and other revenues to pay the expenses
of providing necessary governmental services before paying debt
service on its bonds, warrants or other indebtedness.  The State
has statutory budget provisions which result in a proration
procedure in the event estimated budget resources in a fiscal year
are insufficient to pay in full appropriations for that year. 
Proration has a materially adverse effect on public entities that
are dependent upon State funds subject to proration.

Deterioration of economic conditions could adversely affect both
tax and other governmental revenues, as well as revenues to be used
to service various revenue obligations, such as industrial
development obligations.  Such difficulties could adversely affect
the market value of the bonds held by the Alabama Trusts and
thereby adversely affect Unitholders.


The foregoing information constitutes only a brief summary of some
of the financial difficulties which may impact certain issuers of
Bonds and does not purport to be a complete or exhaustive
description of all adverse conditions to which the issuers in an
Alabama Trust are subject.  Additionally, many factors including
national economic, social and environmental policies and
conditions, which are not within the control of the issuers of
Bonds, could affect or could have an adverse impact on the
financial condition of the State and various agencies and political
subdivisions located in the State.  The Sponsor is unable to
predict whether or to what extent such factors or other factors may
affect the issuers of Bonds, the market value or marketability of
the Bonds or the ability of the respective issuers of the Bonds
acquired by an Alabama Trust to pay interest on or principal of the
Bonds.

Arizona Trusts - Economic Factors
 
 
Arizona is the nation's sixth largest state in terms of area and
ranks among the leading states in three economic indices of growth. 
The State's main economic/employment sectors include services,
tourism and manufacturing. Mining and agriculture are also
significant, although they tend to be more capital than labor
intensive.  Services is the single largest economic sector. Many of
these jobs are directly related to tourism.

According to Arizona economic indicators released as of June 1992,
unemployment figures show 7.2% of Arizona's population is
unemployed, compared to a national level of 7.5% unemployment at
the same time.  Maricopa County reported 6.1% unemployment and Pima
County reported 5.0% unemployment.  Significant employers in the
State include the government, the service industry and the trade
industry.  Building permits were down in all areas of the State
except for Pima County.  In addition, home sales were down
approximately 28% from the previous year, and retail sales were
down approximately 7% from the previous year.


On June 27, 1991, America West Airlines filed a Chapter 11
reorganization petition in bankruptcy court.  America West was at
one time the sixth largest employer in Maricopa County, employing
approximately 10,000 persons within the county, and 15,000
nationwide.  The airline now employs approximately 7,000 employees
nationwide.  The effect of the America West bankruptcy on the State
economy and, more particularly, the Phoenix economy, is uncertain.

Similarly, jobs will be lost by the anticipated closing of Williams
Air Force Base in Chandler in 1993.  Williams Air Force Base was
selected as one of the military installations to be closed as a
cost-cutting measure by the Defense Base Closure and Realignment
Commission, whose recommendations were subsequently approved by the
President and the United States House of Representatives.  Williams
Air Force Base injects approximately $340 million in the local
economy annually, and employs 1,851 civilians.


In 1986, the value of Arizona real estate began a steady decline,
reflecting a market which had been overbuilt in the previous decade
with a resulting surplus of completed inventory.  This decline
adversely affected both the construction industry and those Arizona
financial institutions which had aggressively pursued many facets
of real estate lending.  In the near future, Arizona's financial
institutions are likely to continue to experience problems until
the excess inventories of commercial and residential properties are
absorbed.  The problems of the financial institutions have
adversely affected employment and economic activity.  Longer-term
prospects are brighter, since population growth is still strong by
most standards, and Arizona's climate and tourist industry still
continue to stimulate the State's economy.  However, the previously
robust pace of growth by financial institutions is not likely to be
repeated over an extended period.
Budgetary Process.  Arizona operates on a fiscal year beginning
July 1 and ending June 30.  Fiscal year 1992 refers to the year
ending June 30, 1992.


Total General Fund revenues of $3.4 billion are expected during
fiscal year 1992.  Approximately 45.8% of this budgeted revenue
comes from sales and use taxes, 38.9% from income taxes (both
individual and corporate) and 5.2% from property taxes.  All taxes
total approximately $3.3 billion or 93% of the General Fund
revenues.  Non-tax revenue includes items such as income from the
state lottery, licenses, fees and permits, and interest.  Lottery
income totals approximately 34.6% of non-tax revenue.

For fiscal year 1992, the budget called for expenditures of $2.7
billion. These expenditures fell into the following major
categories: education (51.3%), health and welfare (29.3%),
protection and safety (9.8%), general government (7.6%) and
inspection and regulation, natural resources and transportation
(2.0%).  The State's general fund revenues for fiscal year 1993 are
budgeted at $3.6 billion and total general fund expenditures for
fiscal year 1993 are budgeted at $3.65 billion.  Fiscal year 1993's
proposed expenditures fall into the following major categories:
education (55.4%), health and welfare (27.8%), protection and
safety (9.0%), general government (6.2%) and inspection and
regulation and natural resources (1.6%).


 
 

Page 14



Most or all of the Bonds of the Arizona Trust are not obligations
of the State of Arizona, and are not supported by the
State's taxing powers.  The particular source of payment and
security for each of the Bonds is detailed in the instruments
themselves and in related offering materials.  There can be no
assurances, however, with respect to whether the market value or
marketability of any of the Bonds issued by an entity other than
the State of Arizona will be affected by the financial or other
condition of the State or of any entity located within the State. 
In addition, it should be noted that the State of Arizona, as well
as counties, municipalities, political subdivisions and other
public authorities of the State, are subject to limitations imposed
by Arizona's constitution with respect to ad valorem taxation,
bonded indebtness and other matters.  For example, the state
legislature cannot appropriate revenues in excess of 7% of the
total personal income of the State in any fiscal year.  These
limitations may affect the ability of the issuers to generate
revenues to satisfy their debt obligations.


Although most of the Bonds in the Arizona Trusts are revenue
obligations of local governments or authorities in the State, there
can be no assurance that the fiscal and economic conditions
referred to above will not affect the market value or marketability
of the Bonds or the ability of the respective obligors to pay
principal of and interest on the Bonds when due.


The State was recently sued by fifty-four school districts within
the State, claiming that the State's funding system for school
buildings and equipment is unconstitutional.  The lawsuit does not
seek damages, but requests that the court order the State to create
a new financing system that sets minimum standards for buildings
and furnishings that apply on a statewide basis.  A superior court
ruling has upheld the constitutionality of the State's school
funding system. This decision has been appealed and is currently in
the State Court of Appeals.  It is unclear, at this time, what
affect any judgement would have on state finances or school
budgets.  The U.S. Department of Education recently determined that
Arizona's educational funding system did not meet federal
requirements of equity.  This determination could mean a loss in
federal funds of approximately $50 million.

Certain other circumstances are relevant to the market value,
marketability and payment of any hospital and health care revenue
bonds in the Arizona Trusts. The Arizona Legislature attempted
unsuccessfully in its 1984 regular and special sessions to enact
legislation designed to control health care costs, ultimately
adopting three referenda measures placed on the November 1984
general election ballot which in various ways would have regulated
hospital and health care facility expansions, rates and revenues. 
At the same time, a coalition of Arizona employers proposed two
initiatives voted on in the November 1984 general election which
would have created a State agency with power to regulate hospital
and health care facility expansions and rates generally.  All of
these referenda and initiative propositions were rejected by the
voters in the November 1984 general election.  Pre-existing State
certificate-of-need laws regulating hospital and health care
facilities' expansions and services have expired, and a temporary
moratorium prohibiting hospital bed increases and new hospital
construction projects and a temporary freeze on hospital rates and
charges at June 1984 levels has also expired. Because of such
expirations and increasing health care costs, it is expected that
the Arizona Legislature will at future sessions continue to attempt
to adopt legislation concerning these matters.  The effect of any
such legislation or of the continued absence of any legislation
restricting hospital bed increases and limiting new hospital
construction on the ability of Arizona hospitals and other health
care providers to pay debt service on their revenue bonds cannot be
determined at this time. Arizona does not participate in the
federally administered Medicaid program.  Instead, the State
administers an alternative program, AHCCCS, which provides health
care to indigent persons meeting certain financial eligibility
requirements, through managed care programs.  In the fiscal year
1992, AHCCCS will be financed approximately 52.7% by federal funds,
33.1% by state funds, and 13.6% by county funds.

Under State law, hospitals retain the authority to raise rates with
notification and review by, but not approval from, the Department
of Health Services.  Hospitals in Arizona have experienced
profitability problems along with those in other states.  At least
two Phoenix based hospitals have defaulted on or reported
difficulties in meeting their bond obligations during the past
three years.

Insofar as tax-exempt Arizona public utility pollution control
revenue bonds are concerned, the issuance of such bonds and the
periodic rate increases needed to cover operating costs and debt
service are subject to regulation by the Arizona Corporation
Commission, the only significant exception being the Salt River
Project Agricultural Improvement and Power  District which, as a
Federal instrumentality, is exempt from rate regulation.

On July 15, 1991, several creditors of Tucson Electric Power
Company ("Tucson Power") filed involuntary petitions under Chapter
11 of the U.S. Bankruptcy Code to force Tucson Power to reorganize
under the supervision of the bankruptcy court.  On December 31,
1991, the Bankruptcy Court approved the utility's motion to dismiss
the July petition after five months of negotiations between Tucson
Power and its creditors to restructure the utility's debts and
other obligations.  In December 1992, Tucson Electric announced
that it had completed its financial restructuring.  In January
1993, Tucson Electric asked the Arizona Corporation Commission for
a 9.6% average rate increase.  Tucson Power serves approximately
270,000 customers, primarily in the Tucson area. Inability of any
regulated public utility to secure necessary rate increases could
adversely affect, to an indeterminable extent, its ability to pay
debt service on its pollution control revenue bonds.


California Trusts - Economic Factors


The portfolio of each California Trust consists primarily of
obligations issued by entities located in California.

Economic Overview.  California's economy is the largest among the
50 states and one of the largest in the world.  The State's
population of over 30 million represents 12.3% of the total United
States population and grew by 27% in the 1980s.  Total personal
income in the State, at an estimated $640 billion in 1992, accounts
for 13% of all personal income in the nation.  Total employment is
almost 14 million, the majority of which is in the service, trade
and manufacturing sectors.



 
 

Page 15



Reports issued by the State Department of Finance and the
Commission on State Finance (the "COSF") indicate that the State's
economy is suffering its worst recession since the 1930s, with
prospects for recovery slower for the nation as a whole.  After the
worst job losses in any postwar recession, employment is expected
to stabilize by late 1993 before net employment starts to increase
slowly.  The largest job losses have been in Southern California,
led by declines in the aerospace and construction industries. 
Weakness statewide occurred in manufacturing, construction,
services and trade.  Additional military base closures will have
further adverse effects on the State's economy later in the decade. 
Unemployment is expected to average over 9% through 1993 and 1994. 
The State's economy is only expected to pull out of the recession
slowly, once the national recovery has begun.  The Department and
the COSF project a stagnant economy in California until 1994. 
Delay in recovery will exacerbate shortfalls in State revenues.
Limitation on Taxes.  Certain of the Bonds in the California Trusts
may be obligations of issuers which rely in whole or in part,
directly or indirectly on ad valorem property taxes as a source of
revenue.  The taxing powers of California local governments and
districts are limited by Article XIIIA of the California
Constitution, enacted by the voters in 1978 and commonly known as
"Proposition 13." Briefly, Article XIIIA limits to 1% of full cash
value the rate of ad valorem property taxes on real property and
generally restricts the reassessment of property to 2% per year,
except upon new construction or change of ownership (subject to a
number of exemptions). Taxing entities may, however, raise ad
valorem taxes above the 1% limit to pay debt service on voter-
approved bonded indebtedness.

Under Article XIIIA, the basic 1% ad valorem tax levy is applied
against the assessed value of property as of the owner's date of
acquisition (or as of March 1, 1975, if acquired earlier), subject
to certain adjustments.  This system has resulted in widely varying
amounts of tax on similarly situated properties.  Several lawsuits
have been filed challenging the acquisition-based assessment system
of Proposition 13 and, on June 13, 1992, the U.S. Supreme Court
announced a decision upholding Proposition 13.


Article XIIIA prohibits local governments from raising revenues
through ad valorem property taxes above the 1% limit;
it also requires voters of any governmental unit to give 2/3
approval to levy any "special tax,"  however, Court decisions
allowed non-voter approved levy of "general taxes" which were not
dedicated to a specific use.  In response to these decisions, the
voters of the State in 1986 adopted an initiative statute which
imposed significant new limits on the ability of local entities to
raise or levy general taxes, except by receiving majority local
voter approval. Significant elements of this initiative,
"Proposition 62," have been overturned in recent court cases.  An
initiative proposed to re-enact the provisions of Proposition 62 as
a constitutional amendment was defeated by the voters in November
1990, but such a proposal may be renewed in the future.  
 
Appropriations Limits.  California and its local governments are
subject to an annual "appropriations limit" imposed by Article
XIIIB of the California Constitution, enacted by the voters in 1979
and significantly amended by Propositions 98 and 111 in 1988 and
1990, respectively.  Article XIIIB prohibits the State or any
covered local government from spending "appropriations subject to
limitation" in excess of the appropriations limit imposed. 
"Appropriations subject to limitation" are authorizations to spend
"proceeds of taxes," which consists of tax revenues and certain
other funds, including proceeds from regulatory licenses, user
charges or other fees to the extent that such proceeds exceed the
cost of providing the product or service, but "proceeds of taxes"
excludes most State subventions to local governments. No limit is
imposed on appropriations of funds which are not "proceeds of
taxes," such as reasonable user charges or fees, and certain other
non-tax funds, including bond proceeds.

Among the expenditures not included in the Article XIIIB
appropriations limit are (1) the debt service cost of bonds issued
or authorized prior to January 1, 1979, or subsequently authorized
by the voters, (2) appropriations arising from certain emergencies
declared by the Governor, (3) appropriations for certain capital
outlay projects, (4) appropriations by the State of post-1989
increases in gasoline taxes and vehicle weight fees, and (5)
appropriations made in certain cases of emergency.
The appropriations limit for each year is adjusted annually to
reflect changes in cost of living and population, and any transfers
of service responsibilities between government units.  The
definitions for such adjustments were liberalized in 1990 to more
closely follow growth in California's economy.


"Excess" revenues are measured over a two-year cycle.  Local
governments must return any excess to taxpayers by rate reduction. 
The State must refund 50% of any excess, with the other 50% paid to
schools and community colleges. With more liberal annual adjustment
factors since 1988, and depressed revenues since 1990 because of
the recession, few governments are currently operating near their
spending limits, but this condition may change over time.  Local
governments may by voter approval exceed their spending limits for
up to four years.  During fiscal year 1986-87, State receipts from
proceeds of taxes exceeded its appropriations limit by $1.1
billion, which was returned to taxpayers. Appropriations subject to
limitation were under the State limit by $1.2 billion, $259
million, $1.6 billion, $7.5 billion and $5.2 billion for the five
most recent fiscal years ending with 1991-92.  State appropriations
are expected to be $5.1 billion under the limit for fiscal year
1992-93.  
 
Because of the complex nature of Articles XIIIA and XIIIB of the
California Constitution, the ambiguities and possible
inconsistencies in their terms, and the impossibility of predicting
future appropriations or changes in population and cost of living,
and the probability of continuing legal challenges, it is not
currently possible to determine fully the impact of Article XIIIA
or Article XIIIB on California municipal obligations or on the
ability of California or local governments to pay debt service on
such California municipal obligations.  It is not presently
possible to predict the outcome of any pending litigation with
respect to the ultimate scope, impact or constitutionality of
either Article XIIIA or Article XIIIB, or the impact of any such
determinations upon State agencies or local governments, or upon
their ability to pay debt service on their obligations.  Future
initiative or legislative changes in laws or the California
Constitution may also affect the ability of the State or local
issuers to repay their obligations.



 
 

Page 16



Obligations of the State of California.  As of June 1, 1993,
California had approximately $17.7 billion of general obligation
bonds outstanding, and $7.2 billion remained authorized but
unissued.  In addition, at June 30, 1992, the State had lease-
purchase obligations, payable from the State's General Fund, of
approximately $2.9 billion.  Of the State's outstanding general
obligation debt, 24% is presently self-liquidating (for which
program revenues are anticipated to be sufficient to reimburse the
General Fund for debt service payments). Three general obligation
bond propositions, totalling $3.7 billion, were approved by voters
in November 1992. In fiscal year 1991-92, debt service on general
obligation bonds and lease-purchase debt was approximately 3.2% of
General Fund revenues.  The State has paid the principal of and
interest on its general obligation bonds, lease-purchase debt and
short-term obligations when due.

Recent Financial Results.  The principal sources of General Fund
revenues in 1991-92 were the California personal income tax (42% of
total revenues), the sales tax (39%), bank and corporation taxes
(11%), and the gross premium tax on insurance (3%).  California
maintains a Special Fund for Economic Uncertainties (the "Economic
Uncertainties Fund"), derived from General Fund revenues, as a
reserve to meet cash needs of the General Fund, but which is
required to be replenished as soon as sufficient revenues are
available.  Year-end balances in the Economic Uncertainties Fund
are included for financial reporting purposes in the General Fund
balance.  In most recent years, California has budgeted to maintain
the Economic Uncertainties Fund at around 3% of General Fund
expenditures, but essentially no reserve is budgeted in 1992-93.


General


Throughout the 1980's, State spending increased rapidly as the
State population and economy also grew rapidly, including increased
spending for many assistance programs to local governments, which
were constrained by Proposition 13 and other laws.  The largest
State program is assistance to local public school districts.  In
1988, an initiative (Proposition 98) was enacted which (subject to
suspension by a two-thirds vote of the Legislature and the
Governor) guarantees local school districts and community college
districts a minimum share of State General Fund revenues (currently
about 37%).  
 
Since the start of 1990-91 Fiscal Year, the State has faced adverse
economic, fiscal, and budget conditions.  The economic recession
seriously affected State tax revenues.  It also caused increased
expenditures for health and welfare programs.  The State is also
facing a structural imbalance in its budget with the largest
programs supported by the General Fund (education, health, welfare
and corrections) growing at rates higher than the growth rates for
the principal revenue sources of the General Fund.  As a result,
the State entered a period of budget imbalance, with expenditures
exceeding revenues for four of the five fiscal years ending in
1991-92; revenues and expenditures were about equal in 1992-93. 
Revenues declined in 1990-91 over 1989-90, the first time since the
1930s, and will decline in 1992-93 compared to 1991-92.  By June
30, 1993, the State's General Fund had an accumulated deficit, on
a budget basis, of approximately $2.2 billion.


As a consequence of the large budget imbalances built up over the
past three years, the State depleted its available cash resources. 
The State has had to rely increasingly on a series of external
borrowings to meet its cash flow requirements.

1992-93 Fiscal Year.  At the outset of the 1992-93 Fiscal Year, the
State estimated that approximately $7.9 billion of budget actions
would be required to end the fiscal year without a budget deficit. 
The difficulty of taking these actions delayed enactment of a
budget for more than two months past the start of the 1992-93
Fiscal Year.  With the failure to enact a budget by July 1, 1992,
the State had no legal authority to pay many of its vendors until
the budget was passed; nevertheless, certain obligations (such as
debt service, school apportionments, welfare payments, and employee
salaries) were payable because of continuing or special
appropriations, or court orders.  However, the State Controller did
not have enough cash to pay as they came due all of these ongoing
obligations, as well as valid obligations incurred in the prior
fiscal year.

Because of the delay in enacting the budget, the State could not
carry out its normal cash flow borrowing and, starting on July 1,
1992, the Controller was required to issue "registered warrants" in
lieu of normal warrants backed by cash to pay many State
obligations.  Available cash was used to pay constitutionally
mandated and priority obligations. Between July 1 and September 3,
1992, the Controller issued an aggregate of approximately $3.8
billion of registered warrants, all of which were called for
redemption by September 4, 1992 following enactment of the 1992-93
Budget Act and issuance by the State of $3.3 billion of Interim
Notes.

The Legislature enacted the 1992-93 Budget Bill on August 29, 1992,
and it was signed by the Governor on September 2, 1992.  The
1992-93 Budget Act provides for expenditures of $57.4 billion and
consists of General Fund expenditures of $40.8 billion and Special
Fund and Bond Fund expenditures of $16.6 billion. The Department of
Finance estimated there would be a balance in the Special Fund for
Economic Uncertainties of $28 million on June 30, 1993.


The $7.9 billion budget gap was closed through a combination of
increased revenues and transfers and expenditure cuts.  The
principle reductions were in health and welfare, K-12 schools and
community colleges, State aid to local governments, higher
education (partially offset by increased student fees), and various
other programs.  In addition, funds were transferred from special
funds, collections of State revenues were accelerated, and other
adjustments were made.


As in the prior year, the economic and fiscal assumptions on which
the 1992-93 Budget Act was based proved to be too optimistic.  As
the recession in the State entered its third year, with no real
upturn predicted until 1994, State revenues again lagged
projections.  The Department of Finance projects current-year
revenues will be about $2.4 billion below projections and
expenditures $300 million higher.  As a result, the Department
predicts the General Fund will end at June 30, 1993 with a fund
balance deficit of about $2.2 billion, almost unchanged from June
30, 1992.  The projected negative balance of the Special Fund for
Economic Uncertainties is $2.75 billion.




 
 

Page 17



1993-94 Budget.  The 1993-94 Budget represents the third
consecutive year of extremely difficult budget choices for the
State, in view of the continuing recession.  The Budget Act, signed
on June 30, 1993, provides for General Fund expenditures of $38.5
billion, a 6.3% decline from the prior year.  Revenues are
projected at $40.6 billion, about $400 million below the prior
year.  To bring the budget into balance, the Budget Act and related
legislation provided for transfer of $2.6 billion of local property
taxes to school districts, thus relieving State support
obligations; reductions in health and welfare expenditures;
reductions in support for higher education institutions; a two-year
suspension of the renters' tax credit; and miscellaneous cuts in
general government spending and certain one-time and accounting
adjustments. There were no general state tax increases, but a 0.5%
temporary state sales tax scheduled to expire on June 30 was
extended for six months, and dedicated to support local government
public safety costs.

As part of the 1993-94 Budget, the Governor implemented a plan to
repay the accumulated $2.75 billion deficit in the Special Fund for
Economic Uncertainties over 18 months, funding the deficit with
external borrowing maturing not later than December 31, 1994. 
About $1.6 billion of the deficit is scheduled to be repaid by June
30, 1994, with the balance paid by December 31, 1994.  Taking this
borrowing into account, the Department of Finance projects the
Special Fund for Economic Uncertainties would have a balance of
about $600 million at June 30, 1994, and about $100 million at June
30, 1995.  
 
The State's severe financial difficulties for the current budget
year will result in continued pressure upon almost all local
governments, particularly school districts and counties which
depend on State aid.  Despite efforts in recent years to increase
taxes and reduce governmental expenditures, there can be no
assurance that the State will not face budget gaps in the future.


Bond Rating.  State general obligation bonds are currently rated Aa
by Moody's and A+ by S&P.  Both of these ratings were reduced from
AAA levels which the State held until late 1991.  There can be no
assurance that such ratings will be maintained in the future.  It
should be noted that the creditworthiness of obligations issued by
local California issuers may be unrelated to the creditworthiness
of obligations issued by the State of California, and that there is
no obligation on the part of the State to make payment on such
local obligations in the event of default.

Legal Proceedings.  The State is involved in certain legal
proceedings (described in the State's recent financial statements)
that, if decided against the State, may require the State to make
significant future expenditures or may substantially impair
revenues.

Obligations of Other Issuers


Other Issuers of California Municipal Obligations.  There are a
number of state agencies, instrumentalities and political
subdivisions of the State that issue Municipal Obligations, some of
which may be conduit revenue obligations payable from payments from
private borrowers.  These entities are subject to various economic
risks and uncertainties, and the credit quality of the securities
issued by them may vary considerably from the credit quality of the
obligations backed by the full faith and credit of the State.


State Assistance.  Property tax revenues received by local
governments declined more than 50% following passage of Proposition
13.  Subsequently, the California Legislature enacted measures to
provide for the redistribution of the State's General Fund surplus
to local agencies, the reallocation of certain State revenues to
local agencies and the assumption of certain governmental functions
by the State to assist municipal issuers to raise revenues. 
Through 1990- 91, local assistance (including public schools)
accounted for around 75% of General Fund spending.  To reduce State
General Fund support for school districts, the 1992-93 Budget Act
caused local governments to transfer $1.3 billion of property tax
revenues to school districts, representing loss of almost half the
post-Proposition 13 "bailout" aid.  The 1993-94 Budget Act
transfers about $2.6 billion of local property taxes to school
districts, the largest share ($2 billion) coming from counties, and
the balance from cities ($288 million), special districts ($244
million) and redevelopment agencies ($65 million).  In order to
make up this shortfall to cities and counties, the Legislature has
dedicated 0.5% sales tax to local public safety purposes through
December 31, 1993.  Voters at a statewide election in November,
1993 will vote on a permanent extension of this sales tax for local
public safety. In addition, the Legislature has changed laws to
relieve local government of certain mandates, allowing them to
reduce costs.

To the extent the State should be constrained by its Article XIIIB
appropriations limit, or its obligation to conform to Proposition
98, or other fiscal considerations, the absolute level, or the rate
of growth, of State assistance to local governments may be reduced. 
Any such reductions in State aid could compound the serious fiscal
constraints already experienced by many local governments,
particularly counties.  At least one rural county (Butte) publicly
announced that it might enter bankruptcy proceedings in August
1990, although such plans were put off after the Governor approved
legislation to provide additional funds for the county.  Other
counties have also indicated that their budgetary condition is
extremely grave.  The Richmond Unified School District (Contra
Costa County) entered bankruptcy proceedings in May 1991 but the
proceedings have been dismissed.

Assessment Bonds.  California municipal obligations which are
assessment bonds may be adversely affected by a general decline in
real estate values or a slowdown in real estate sales activity.  In
many cases, such bonds are secured by land which is undeveloped at
the time of issuance but anticipated to be developed within a few
years after issuance.  In the event of such reduction or slowdown,
such development may nor occur or may be delayed, thereby
increasing the risk of a default on the bonds.  Because the special
assessments or taxes securing these bonds are not the personal
liability of the owners of the property assessed, the lien on the
property is the only security for the bonds. Moreover, in most
cases the issuer of these bonds is not required to make payments on
the bonds in the event of delinquency in the payment of assessments
or taxes, except from amounts, if any, in a reserve fund
established for the bonds.




 
 

Page 18



California Long-Term Lease Obligations.  Certain California long-
term lease obligations, though typically payable from
the general fund of the municipality, are subject to "abatement" in
the event the facility being leased is unavailable for beneficial
use and occupancy by the municipality during the term of the lease. 
Abatement is not a default, and there may be no remedies available
to the holders of the certificates evidencing the lease obligation
in the event abatement occurs.  The most common causes of abatement
are failure to complete construction of the facility before the end
of the period during which lease payments have been capitalized and
uninsured casualty losses to the facility (e.g.,  due to
earthquake).  In the event abatement occurs with respect to a lease
obligation, lease payments may be interrupted (if all available
insurance proceeds and reserves are exhausted) and the certificates
may not be paid when due.

Several years ago the Richmond Unified School District (the
"District") entered into a lease transaction in which certain
existing properties of the District were sold and leased back in
order to obtain funds to cover operating deficits. Following a
fiscal crisis in which the District's finances were taken over by
a State receiver (including a brief period under bankruptcy court
protection), the District failed to make rental payments on this
lease resulting in a lawsuit by the Trustee for the Certificate of
Participation holders, in which the State was named a defendant (on
the grounds that it controlled the District's finances).  One of
the defenses raised in answer to this lawsuit was the invalidity of
the original lease transaction.  The trial court has upheld the
validity of the District's lease, but further appeals may occur.
Any ultimate judgment against the Trustee may have adverse
implications for lease transactions of a similar nature by other
California entities.


Other Considerations.  The repayment of industrial development
securities secured by real property may be affected by California
laws limiting foreclosure rights of creditors.  Securities backed
by health care and hospital revenues may be affected by changes in
State regulations governing cost reimbursements to health care
providers under Medi-Cal (the State's Medicaid program), including
risks related to the policy of awarding exclusive contracts to
certain hospitals.

Limitations on ad valorem property taxes may particularly affect
"tax allocation" bonds issued by California redevelopment agencies. 
Such bonds are secured solely by the increase in assessed valuation
of a redevelopment project area after the start of redevelopment
activity.  In the event that assessed values in the redevelopment
project decline (e.g.,  because of a major natural disaster such as
an earthquake), the tax increment revenue may be insufficient to
make principal and interest payments on these bonds.  Both Moody's
and S&P suspended ratings on California tax allocation bonds after
the enactment of Articles XIIIA and XIIIB, and only resumed such
ratings on a selective basis.

Proposition 87, approved by California voters in 1988, requires
that all revenues produced by a tax rate increase go directly to
the taxing entity which increased such tax rate to repay that
entity's general obligation indebtedness. As a result,
redevelopment agencies (which, typically,  are the issuers of Tax
Allocation Securities) no longer receive an increase in tax 
increment when taxes on property in the project area are increased
to repay voter-approved bonded indebtedness.


The effect of these various constitutional and statutory changes
upon the ability of California municipal securities issuers to pay
interest and principal on their obligations remain unclear. 
Furthermore, other measures affecting the taxing or spending
authority of California or its political subdivisions may be
approved or enacted in the future. Legislation has been or may be
introduced which would modify existing taxes or other revenue-
raising measures or which either would further limit or,
alternatively, would increase the abilities of state and local
governments to impose new taxes or increase existing taxes.  It is
not presently possible to predict the extent to which any such
legislation will be enacted.  Nor is it presently possible to
determine the impact of any such legislation on California
municipal obligations in which the California Trusts may invest,
future allocations of State revenues to local governments or the
abilities of State or local governments to pay the interest on, or
repay the principal of, such California municipal obligations.  
 
Substantially all of California is within an active geologic region
subject to major seismic activity.  Any California municipal
obligation in a California Trust could be affected by an
interruption of revenues because of damaged facilities, or,
consequently, income tax deductions for casualty losses or property
tax assessment reductions. Compensatory financial  assistance could
be constrained by the inability of (i) an issuer to have obtained
earthquake insurance coverage at reasonable rates; (ii) an insurer
to perform on its contracts of insurance in the event of widespread
losses; or (iii) the Federal or State government to appropriate
sufficient funds within their respective budget limitations.


Colorado Trusts - Economic Factors


The portfolio of each Colorado Trust consists primarily of
obligations issued by entities located in Colorado.

Restrictions on Appropriations and Revenues.  The State
Constitution requires that expenditures for any fiscal year not
exceed revenues for such fiscal year. By statute, the amount of
General Fund revenues available for appropriation is based upon
revenue estimates which, together with other available resources,
must exceed annual appropriations by the amount of the
unappropriated reserve (the "Unappropriated Reserve").  The
Unappropriated Reserve requirement for fiscal years 1991, 1992 and
1993 was set at 3%.  For fiscal year 1992 and thereafter, General
Fund appropriations are also limited by statute to an amount equal
to the cost of performing certain required reappraisals of taxable
property plus an amount equal to the lesser of (i) five percent of
Colorado personal income or (ii) 106% of the total General Fund
appropriations for the previous fiscal year.  This restriction does
not apply to any General Fund appropriations which are required as
a result of a new federal law, a final state or federal court order
or moneys derived from the increase in the rate or amount of any
tax or fee approved by a majority of the registered electors of the
State voting at any general election.  In addition, the statutory
limit on the level of General Fund appropriations may be exceeded
for a given fiscal year upon the declaration of a State fiscal
emergency by the State General Assembly.





 
 

Page 19



The provisions of the Amendment are unclear and will probably
require judicial interpretation.  Among other provisions, beginning
November 4, 1992, the Amendment requires voter approval prior to
tax increases, creation of debt, or mill levy or valuation for
assessment ratio increases.  The Amendment also limits increases in
government spending and property tax revenues to specified
percentages.  The Amendment requires that District property tax
revenues yield no more than the prior year's revenues adjusted for
inflation, voter approved changes and (except with regard to school
districts) local growth in property values according to a formula
set forth in the Amendment.  School districts are allowed to adjust
tax levies for changes in student enrollment.  Pursuant to the
Amendment, local government spending is to be limited by the same
formula as the limitation for property tax revenues.  The Amendment
limits increases in expenditures from the State general fund and
program revenues (cash funds) to the growth in inflation plus the
percentage change in State population in the prior calendar year. 
The bases for initial spending and revenue limits are fiscal year
1992 spending and 1991 property taxes collected in 1992.  The bases
for spending and revenue limits for fiscal year 1994 and later
years will be the prior fiscal year's spending and property taxes
collected in the prior calendar year.  Debt service changes,
reductions and voter-approved revenue changes are excluded from the
calculation bases.  The Amendment also prohibits new or increased
real property transfer tax rates, new State real property taxes and
local District income taxes.

According to the Colorado Economic Perspective, Fourth Quarter, FY
1992-93, June 20, 1993 (the "Economic Report"), inflation  for 1992
was  3.7% and population grew at the rate of 2.7% in Colorado. 
Accordingly, under the Amendment, increases in State expenditures
during the 1994 fiscal year will be limited to 6.4% over
expenditures during the 1993 fiscal year.  The 1993 fiscal year is
the base year for calculating the limitation for the 1994 fiscal
year. For the 1993 fiscal year, the Office of State Planning and
Budgeting estimates that general fund revenues will total $3,341.7
million and that program revenues (cash funds) will total $1,753.4
million, or total estimated base revenues of $5,095.1 million. 
Expenditures for the 1994 fiscal year, therefore, cannot exceed
$5,421.2 million.  However, the 1994 fiscal year general fund and
program revenues (cash funds) are projected to be only $5,220.4
million, or $200.8 million less than expenditures allowed under the
spending limitation.

There is also a statutory restriction on the amount of annual
increases in taxes that the various taxing jurisdictions in
Colorado can levy without electoral approval.  This restriction
does not apply to taxes levied to pay general obligation debt.


State Finances.  As the State experienced revenue shortfalls in the
mid-1980s, it adopted various measures, including impoundment of
funds by the Governor, reduction of appropriations by the General
Assembly, a temporary increase in the sales tax, deferral of
certain tax reductions and inter-fund borrowings. On a GAAP basis,
the State had unrestricted General Fund balances at June 30 of
approximately $100.3 million in fiscal year 1988, $134.4 million in
fiscal year 1989, $116.6 million in fiscal year 1990, $16.3 million
in fiscal year 1991 and $133.3 million in fiscal year 1992.  The
fiscal year 1993 unrestricted general fund is currently estimated
to be $281.8 million.

For fiscal year 1992, the following tax categories generated the
following respective revenue percentages of the State's $2,995.8
million total gross receipts: individual income taxes represented
53.7% of gross fiscal year 1992 receipts; excise taxes represented
33.4% of gross fiscal year 1992 receipts; and corporate income
taxes represented 3.7% of gross fiscal year 1992 receipts. The
final budget for fiscal year 1993 projects general fund revenues of
approximately $3,341.7 million and appropriations of approximately
$3,046.7 million.  The percentages of general fund revenue
generated by type of tax for fiscal year 1993 are not expected to
be significantly different from fiscal year 1992 percentages.


State Debt.  Under its Constitution, the State of Colorado is not
permitted to issue general obligation bonds secured by the full
faith and credit of the State.  However, certain agencies and
instrumentalities of the State are authorized to issue bonds
secured by revenues from specific projects and activities.  The
State enters into certain lease transactions which are subject to
annual renewal at the option of the State.  In addition, the State
is authorized to issue short-term revenue anticipation notes. 
Local governmental units in the State are also authorized to incur
indebtness.  The major source of financing for such local
government indebtness is an ad valorem property tax.  In addition,
in order to finance public projects, local governments in the State
can issue revenue bonds payable from the revenues of a utility or
enterprise or from the proceeds of an excise tax, or assessment
bonds payable from special assessments.  Colorado local governments
can also finance public projects through leases which are subject
to annual appropriation at the option of the local government. 
Local governments in Colorado also issue tax anticipation notes. 
The Amendment requires prior voter approval for the creation of any
multiple fiscal year debt or other financial obligation whatsoever,
except for refundings at a lower rate or obligations of an
enterprise.

State Economy.  Based on data published by the State of Colorado,
Office of State Planning and Budgeting as presented in the Economic
Report, over 50% of non-agricultural employment in Colorado in 1992
was concentrated in the retail and wholesale trade and service
sectors, reflecting the importance of tourism to the State's
economy and of Denver as a regional economic and transportation
hub.  The government and manufacturing sectors followed as the
fourth and fifth largest employment sectors in the State,
representing approximately 18.3% and 11.5%, respectively, of non-
agricultural employment in the State in 1992.


According to the Economic Report, during the first quarter of 1993,
45,900 net new jobs were generated in the Colorado economy, an
increase of 24.4% over the first quarter of 1992.  However, the
unemployment rate rose from an average of 5.5% during the first
quarter of 1992 to 5.8% during the first quarter of 1993. Total
retail sales increased by 9.8% during the first quarter of 1993 as
compared to the same period in 1992.

Personal income rose 6.6% in Colorado during 1992 and 5.5% in 1991. 
In 1992, Colorado was the twelfth fastest growing state in terms of
personal income growth.  However, because of heavy migration into
the state and a large increase in low-paying retail sector jobs,
per capita personal income in Colorado increased by only 3.8% in
1992, 0.1% below the increase in per capita personal income for the
nation as a whole.


 
 

Page 20



Economic conditions in the State may have continuing effects on
other governmental units within the State (including issuers of the
Bonds in the Colorado Trusts), which, to varying degrees, have also
experienced reduced revenues as a result of recessionary conditions
and other factors.


Connecticut Trusts - Economic Factors


The portfolio of each Connecticut Trust primarily consists of
obligations issued by entities located in Connecticut.

Investors should be aware that manufacturing was historically the
most important economic activity within the State of Connecticut
but, in terms of number of persons employed, manufacturing has
declined in the last ten years while both trade and service-related
industries have become more important, and in 1992, manufacturing
accounted for only 20.1% of the total non-agricultural employment
in Connecticut.  Defense-related business represents a relatively
high proportion of the manufacturing sector; reductions in defense
spending have already had a substantial adverse effect on
Connecticut's economy, and the State's largest defence contractors
have announced substantial planned labor force reductions scheduled
to occur over the next four years. Connecticut is now in a
recession, the depth and duration of which are uncertain. 
Moreover, while unemployment in the State as a whole has generally
remained below the national level, as of May, 1993, the estimated
rate of unemployment in the State on a seasonally adjusted basis
reached 7.4%, compared to 6.9% for the United States as a whole and
certain geographic areas in the State have been affected by high
unemployment and poverty. The State derives over 70% of its
revenues from taxes imposed by it, the most important of which are
the sales and use taxes and the corporation business tax, each of
which is sensitive to changes in the level of economic activity in
the State, but the Connecticut Income Tax, enacted in 1991, is
expected to supercede each of them in importance.   There can be no
assurance that general economic difficulties or the financial
circumstances of the State or its towns and cities will not
adversely affect the market value of the Bonds in the Connecticut
Trusts or the ability of the obligors to pay debt service on such
Bonds.

The General Fund budget adopted by Connecticut for the 1986-1987
fiscal year contemplated both revenues and expenditures of $4.3
billion.  The General Fund ended the 1986-1987 fiscal year with a
surplus of $365 million.  The General Fund budget for the 1987-1988
fiscal year contemplated General Fund revenues and expenditures of
$4.9 billion.  However, the General Fund ended the 1987-1988 fiscal
year with a deficit of $115 million.  The General Fund budget
adopted for the 1988-1989 fiscal year anticipated that General Fund
expenditures of $5.5 billion and certain educational expenses of
$206 million not previously paid through the General Fund would be
funded in part from surpluses of prior years and in part from
higher tax revenues projected to result from tax laws in effect for
the 1987-1988 fiscal year and stricter enforcement thereof; a
substantial deficit was projected during the third quarter of the
1988-1989 fiscal year, but largely because of tax law changes that
took effect before the end of the fiscal year, the deficit was kept
to $28 million.  The General Fund budget adopted for the 1989-1990 
fiscal year anticipated expenditures of approximately $6.2 billion
and, by virtue of tax increase legislation enacted to take effect
generally at the beginning of the fiscal year, revenues slightly
exceeded such amount. However, largely because of tax revenue
shortfalls, the General Fund ended the 1989-90 fiscal year with a
deficit for the year of $259 million, wiping out reserves for such
events built up in prior years.  The General Fund budget adopted
for the 1990-1991 fiscal year anticipated expenditures of $6.4
billion but no significant new or increased taxes were enacted.
Primarily because of significant declines in tax revenues and
unanticipated expenditures reflective of economic adversity, the
General Fund ended the 1990-91 fiscal year alone with a further
deficit of $809 million.

A General Fund budget for the 1991-92 fiscal year was not enacted
until August 22, 1991.  This budget anticipated General Fund
expenditures of $7.0 billion and revenues of $7.4 billion. 
Projected decreases in revenues resulting from a 25% reduction in
the sales tax rate effective October 1, 1991, the repeal of the
taxes on the capital gains and interest and dividend income of
resident individuals for years starting after 1991, and the phase-
out of the corporation business tax surcharge over two years
commencing with taxable years starting after 1991 were expected to
be more than offset by a new general income tax imposed at
effective rates not to exceed 4.5% on the Connecticut taxable
income of resident and non-resident individuals, trusts and
estates.  The General Fund ended the 1991-92 fiscal year with an
operating surplus of $110 million.  The General Fund budget for the
1992-93 fiscal year anticipated General Fund expenditures of $7.3
billion and revenues of $7.3 billion, and the State's Comptroller
has projected a surplus of $10 million for the 1992-93 fiscal year.
Balanced General Fund budgets for the biennium ending June 30,
1995, have been adopted appropriating expenditures of $7.8 billion
for the 1993-94 fiscal year and $8.2 billion for the 1994-95 fiscal
year.  In addition, expenditures of federal, State, and local funds
in the ten years started July 1, 1984 for the repair of the State's
roads and bridges now projected at $8.6 billion are anticipated,
the State's share of which would be financed by bonds expected to
total $3.2 billion and by direct payments both of which would be
supported by a Special Transportation Fund first created by the
General Assembly for the 1984-85 fiscal year.

To fund operating cash requirements, prior to the 1991-92 fiscal
year the State borrowed up to $750 million pursuant to
authorization to issue commercial paper and on July 29, 1991, it
issued $200 million of General Obligation Temporary Notes, none of
which temporary borrowings are currently outstanding.  To fund the
cumulative General Fund deficit for the 1989-90 and 1990-91 fiscal
years, the legislation enacted August 22, 1991 authorized the State
Treasurer to issue Economic Recovery Notes up to the aggregate
amount of such deficit, which must be payable no later than June
30, 1996; at least $50 million of such Economic Recovery Notes, but
not more than a cap amount, is to be retired each fiscal year
commencing with the 1991-92 fiscal year, and any unappropriated
surplus up to $205 million in the General Fund at the end of each
of the three fiscal years commencing with the 1991-92 fiscal year
must be applied to retire such Economic Recovery Notes as may
remain outstanding at those times.  On September 25, 1991, and
October 24, 1991, the State issued $640 million and $325 million,
respectively, of such Economic Recovery Notes, of which $705
million was outstanding on July 1, 1993.



 
 

Page 21



As a result of the State's budget problems, the ratings of its
general obligation bonds were reduced by Standard &
Poor's from AA+ to AA on March 29, 1990, and by Moody's from Aa1 to
Aa on April 9, 1990.  Moreover, because of these problems, on
September 13, 1991, Standard & Poor's reduced its rating of the
State's general obligation bonds and certain other obligations that
depend in part on the creditworthiness of the State to AA-.  On
March 7, 1991, Moody's downgraded its ratings of the revenue bonds
of four Connecticut hospitals because of the effects of the State's
restrictive controlled reimbursement environment under which they
have been operating.

General obligation bonds issued by Connecticut municipalities are
payable primarily only from ad valorem taxes on property subject to
taxation by the municipality.  Certain Connecticut municipalities
have experienced severe fiscal difficulties and have reported
operating and accumulated deficits in recent years.  The most
notable of these is the City of Bridgeport, which filed a
bankruptcy petition on June 7, 1991.  The State opposed the
petition.  The United States Bankruptcy Court for the District of
Connecticut has held that Bridgeport has authority to file such a
petition, but that its petition should be dismissed on the grounds
that Bridgeport was not insolvent when the petition was filed.
Regional economic difficulties, reductions in revenues, and
increased expenses could lead to further fiscal problems for the
State and its political subdivisions, authorities and agencies. 
Difficulty in payment of debt service on borrowings could result in
declines, possibly severe, in the value of their outstanding
obligations and increases in their future borrowing costs.
Florida Trusts - Economic Factors


The portfolio of each Florida Trust consists primarily of
obligations issued by entities located in Florida.
Population.  In 1980, Florida was the seventh largest state in the
U.S. by population.  The State has grown dramatically since then
and as of April 1, 1992, ranks fourth with an estimated population
of 13.2 million.  Florida's attraction, as both a growth and
retirement state, has kept net migration fairly steady with an
average of 277,000 new residents a year from 1980 through 1990. 
The U.S. average population increase since 1980 is about 1%
annually, while Florida's average annual rate of increase is about
3%.  Florida continues to be the fastest growing of the eleven
largest states.  This strong population growth is one reason the
State's economy is performing better than the nation as a whole. 
In addition to attracting senior citizens to Florida as a place for
retirement, the State is also recognized as attracting a
significant number of working age individuals.  Since 1980, the
prime working age population (18-44) has grown at an average annual
rate of 3.6%.  The share of Florida's total working age population
(18-59) to total State population is approximately 53%.  This share
is not expected to change appreciably into the twenty-first
century.

Income.  The State's personal income has been growing strongly the
last several years and has generally outperformed both the U.S. as
a whole and the southeast in particular, according to the U.S.
Department of Commerce and the Florida Consensus Economic
Estimating Conference.  This is due to the fact that Florida's
population has been growing at a very strong pace and, since the
early 1970's the State's economy has diversified so as to provide
greater insulation from national economic downturns.  As a result,
Florida's real per capita personal income overtook the national
average in 1985 and has tracked above the southeast as a whole for
most of the 1980's.  From 1980 through 1990, the State's real per
capita personal income rose at an average of 7% per year, while the
national real per capita personal income increased at an average of
6.8% per year.

Because Florida has a proportionately greater retirement age
population, property income (dividends, interest, and rent) and
transfer payments (Social Security and pension benefits, among
other sources of income) are relatively more important sources of
income.  For example, Florida's total wages and salaries and other
labor income in 1989 was 55.3% of total personal income, while a
similar figure for the nation for 1990 was 65.0%.  Transfer
payments are typically less sensitive to the business cycle than
employment income and, therefore, act as stabilizing forces in weak
economic periods.


The State's per capita personal income in 1991 of $18,880 was
slightly below the national average of $19,082 and significantly
ahead of that for the southeast United States, which was $16,927. 
Real personal income in the State is estimated to have increased
0.7% in 1991-92 and to increase 5.1% in 1993-94. By the end of
1993-94, real personal income per capita in the State is expected
to average 3.6% higher than its 1991-92 level.

Employment.  Since 1980, the State's job creation rate is well over
twice the rate for the nation as a whole, and its growth rate in
new non-agricultural jobs is the fastest of the 11 most populous
states, second only to California in the absolute number of new
jobs created.  Contributing to the State's rapid rate of growth in
employment and income is international trade.  Since 1980, the
State's unemployment rate has generally been below that of the U.S. 
Only in the last two years has the State's unemployment rate moved
ahead of the national average.  The average rate in Florida since
1980 has been 7.0% while the national average is 7.2%.  According
to the U.S. Department of Commerce, the Florida Department of Labor
and Employment Security, and the Florida Consensus Economic
Estimating Conference (together, the "Organization"), the State's
unemployment rate was 7.3% during 1991.  As of January 1993, the
Organization estimates that the unemployment rate will be 7.4% for
1992-93 when final numbers are in, and drop to 6.4% for 1993-94.


The rate of job creation in Florida's manufacturing sector has
exceeded that of the U.S.  From the beginning of 1980 through 1990,
the State added over 78,700 new manufacturing jobs, a 17.7%
increase.  During the same period, national manufacturing
employment declined seven out of the eleven years, for a loss of
1,979,000 jobs.

Total non-farm employment in Florida is expected to increase 1.3%
in 1992-93 and rise 4.3% in 1993-94.  These figures, as well as the
figures for income above, include the post-Hurricane Andrew impact. 
Trade and services, the two largest sources of employment in the
State, account for more than half of the total non-farm employment.
Employment in the service sector should experience an increase of
3.6% in 1992-93, and 5.6% in 1993-94.  The service sector is now
the State's largest employment category comprising 30.7% of total
non-farm employment.

 
 

Page 22



Construction.  The State's economy has in the past been highly
dependent on the construction industry and construction-related
manufacturing.  This dependency has declined in recent years and
continues to do so as a result of continued diversification of the
State's economy.  For example, in 1980, total contract construction
employment as a share of total non-farm employment was just over 7%
and in 1990, the share had edged downward to 6%.  This trend is
expected to continue as the State's economy continues to diversify. 
The State nevertheless has a dynamic construction industry with
single and multi-family housing starts accounting for 9.5% of the
total U.S. housing starts in 1991 while the State's population is
5.3% of the U.S. total population. The State's housing starts since
1980 have represented an average of 11.5% of the U.S.'s total
annual starts, and except for the recession years 1980-82, and the
recession beginning in 1990, Florida housing starts have exceeded
160 thousand a year.

A driving force behind the State's construction industry has been
the State's rapid growth in population.  Although the State
currently is the fourth most populous state, its annual population
growth is now projected to decline as the number of people moving
into the State is expected to hover near the mid 200,000 range
annually well into the 1990's. This population trend should provide
plenty of fuel for business and home builders to keep construction
activity lively in the State for some time to come.  However, other
factors do influence the level of construction in the State.  For
example, Federal tax reform in 1986 and other changes to the Code
have eliminated tax deductions for owners of more than two
residential real estate properties and have lengthened depreciation
schedules on investment and commercial properties.  Economic growth
and existing supplies of commercial buildings and homes also
contribute to the level of construction activity in the State.


Hurricane Andrew left some parts of south Florida devastated. 
Post-Hurricane Andrew clean up and rebuilding have changed the
outlook for the State's economy.  Single and multi-family housing
starts in 1992-93 are projected to reach a combined level of
116,800, and to increase to 148,100 in 1993-94. Lingering
recessionary effects on consumers and tight credit are two of the
reasons for relatively slow core construction activity, as well as
lingering effects from the 1986 tax reform legislation discussed
above.  However, construction is one of the sectors most severely
affected by Hurricane Andrew. The construction figures above
include, over the two year period, more than 20,000 additional
housing starts as a result of destruction by Hurricane Andrew. 
Total construction expenditures are forecasted to increase 11.1%
this year and increase 23.7% next year.

Tourism.  Tourism if one of Florida's most important industries. 
Approximately 39.3 million tourists visited the State in 1991, as
reported by the Florida Department of Commerce.  In terms of
business activities and state tax revenues, tourists in Florida in
1991 represented an estimated 4.4 million additional residents. 
Visitors to the State tend to arrive equally by air and car.  The
State's tourism industry over the years has become more
sophisticated, attracting visitors year-round and, to a degree,
reducing its seasonality.  Tourist arrivals should be slightly
negatively impacted as a result of Hurricane Andrew, but should
recover and approximate in 1993-94 the number expected prior to the
storm.  When the final numbers are in, it is expected that by the
end of the State's current fiscal year, 41.9 million domestic and
international tourists will have visited the State, up 7.8% from
the 39 million tourists that visited Florida in 1991-92. In
1993-94, tourist arrivals should approximate 43.2 million.

Revenues and Expenses.  Estimated fiscal year 1992-93 General
Revenue plus Working Capital funds available to the State total
$12,285.9 million, a 9.2% increase over 1991-92.  This reflects a
transfer of $228.8 million, out of an estimated $233.5 million in
non-recurring revenue due to Hurricane Andrew, to a hurricane
relief trust fund.  Of the total General Revenue plus Working
Capital funds available to the State, $12,004.1 million of that is
Estimated Revenues (excluding the Hurricane Andrew Impact), which
represents an increase of 10.1% over the previous year's Estimated
Revenues.  With effective General Revenues plus Working Capital
Fund appropriations at $11,914.0 million, unencumbered reserves at
the end of the current fiscal year are estimated at $371.9 million.
Estimated fiscal year 1993-94 General Revenue plus Working Capital
Funds available total $13,490.1 million, a 9.8% increase over
1992-93. The $13,016.1 million in Estimated Revenues represent an
increase of 8.4% over the previous year's Estimated Revenues.  The
massive effort to rebuild and replace destroyed or damaged property
in the wake of Hurricane Andrew is responsible for the substantial
positive revenue impacts shown here. Most of the impact is in the
increase in the State's sales tax.


In fiscal year 1991-92, approximately 64.0% of the State's total
direct revenue to its three operating funds was derived from State
taxes, with Federal grants and other special revenue accounting for
the balance.  State sales and use tax, corporate income tax, and
beverage tax amounted to 68%, 7%, and 5%, respectively, of total
receipts by the General Revenue Fund during fiscal year 1991-92. 
In that same year, expenditures for education, health and welfare,
and public safety amounted to 53%, 30%, and 13.3%, respectively, of
total expenditures from the General Revenue Fund.

The State's sales and use tax (6%) currently accounts for the
State's single largest source of tax receipts.  Slightly less than
10% of the State's sales and use tax is designated for local
governments and is distributed to the respective counties in which
collected for such use by counties and the municipalities therein. 
In addition to this distribution, local governments may assess (by
referendum) a 0.5% or a 1.0% discretionary sales surtax within
their county. Proceeds from this local option sales tax are
earmarked for funding local infrastructure programs and acquiring
land for public recreation or conservation or protection of natural
resources as provided under State law. Certain charter counties
have other taxing powers in addition, and non-consolidated counties
with a population in excess of 800,000 may levy a local option
sales tax to fund indigent health care.  It alone cannot exceed
0.5% and when combined with the infrastructure surtax cannot exceed
1.0%.  For the fiscal year ended June 30, 1992, sales and use tax
receipts (exclusive of the tax on gasoline and special fuels)
totalled $8.3 billion, an increase of 2.7% over fiscal year 1990-
1991.


The second largest source of State tax receipts is the tax on motor
fuels. However, these revenues are almost entirely dedicated trust
funds for specific purposes and are not included in the State's
General Revenue Fund.




 
 

Page 23



The State imposes an alcoholic beverage wholesale tax (excise tax)
on beer, wine, and liquor.  This tax is one of the State's major
tax sources, with revenues totalling $435.2 million in fiscal year
ending June 30, 1992. Alcoholic beverage tax receipts declines from
the previous year's total.  The revenues collected from this tax
are deposited into the State's General Revenue Fund.

The State imposes a corporate income tax.  All receipts of the
corporate income tax are credited to the General Revenue Fund.  For
the fiscal year ended June 30, 1992, receipts from this source were
$801.3 million, an increase of 14.2% from fiscal year 1990-91.

The State also imposes a documentary stamp tax on deeds and other
documents relating to realty, corporate shares, bonds, certificates
of indebtness, promissory notes, wage assignments, and retail
charge accounts.  The documentary stamp tax collections totalled
$472.4 million during fiscal year 1991-92, a .05% increase from the
previous fiscal year. For the fiscal year 1991-92, 76.2% of the
documentary stamp tax revenues were deposited to the General
Revenue Fund.  Beginning in fiscal year 1992-93, 71.29% of these
taxes are to be deposited to the General Revenue Fund.

The State imposes an intangible personal property tax on stocks,
bonds, including bonds secured by liens in Florida real property,
notes, governmental leaseholds, and certain other intangibles not
secured by a lien on Florida real property.  The annual rate of tax
is 2 mils.  The State also imposes a non-recurring 2 mil tax on
mortgages and other obligations secured by liens on Florida real
property.  In fiscal year 1991-92, total intangible personal
property tax collections were $586.2 million, a 13.0% increase over
the prior year.  Of the tax proceeds, 66.5% is distributed to the
General Revenue Fund.


The State began its own lottery in 1988.  State law requires that
lottery revenues be distributed 50.0% to the public in prizes,
38.0% for use in enhancing education, and the balance, 12.0% for
costs of administering the lottery.  Fiscal year 1991-92 lottery
ticket sales totalled $2.19 billion, providing education with
approximately $835.4 million.

The State's severance tax applies to oil, gas, and sulphur
production, as well as the severance of phosphate rock and other
solid minerals.  Total collections from severance taxes total $67.2
million during fiscal year 1991-92, down 6.9% from the previous
year.  Beginning in fiscal year 1989-90, 60.0% of this amount was
transferred to the General Revenue Fund.  The 60.0% allocation is
expected to continue.

Debt-Balanced Budget Requirement.  At the end of fiscal 1992,
approximately $4.52 billion in principal amount of debt secured by
the full faith and credit of the State was outstanding.  In
addition, since July 1, 1992, the State issued about $274 million
in principal amount of full faith and credit bonds.


The State Constitution and statutes mandate that the State budget,
as a whole, and each separate fund within the State budget, be kept
in balance from currently available revenues each fiscal year.  If
the Governor or Comptroller believe a deficit will occur in any
State fund, by statute, he must certify his opinion to the
Administrative Commission, which then is authorized to reduce all
State agency budgets and releases by a sufficient amount to prevent
a deficit in any fund.  Additionally, the State Constitution
prohibits issuance of State obligations to fund State operations.

Litigation.  Currently under litigation are several issues relating
to State actions or State taxes that put at risk substantial
amounts of General Revenue Fund monies.  Accordingly, there is no
assurance that any of such matters, individually or in the
aggregate, will not have a material adverse affect on the State's
financial position.

In the wake of the U.S. Supreme Court decision holding that a
Hawaii law unfairly discriminated against out-of-state liquor
producers, suits have been filed in the State's courts contesting
a similar State law (in effect prior to 1985) that seek $384
million in tax refunds.  A trial court, in a ruling that was
subsequently upheld by the State Supreme Court, found the State law
in question to be unconstitutional, but made its ruling operate
prospectively, thereby denying any tax refunds.  The issue of
whether the unconstitutionality of the tax should be applied
retroactively was decided in favor of the taxpayers by the U.S.
Supreme Court on June 4, 1990.  On remand from the U.S. Supreme
Court, the Florida Supreme Court, on January 15, 1991, mandated
further proceedings to fashion a "clear and certain remedy"
consistent with constitutional restrictions and the opinion of the
U.S. Supreme Court.  The Florida Department of Revenue ("the
Department") has proposed to the Florida Supreme Court that the
Department be allowed to collect back tax from those who received
a tax preference under the prior law.  The Florida Supreme Court
remanded the matter to the Circuit Court for the 2nd Judicial
Circuit to hear arguments on the method chosen by the State to
provide a clear and certain remedy.  On October 15, 1992, the
Circuit Court trial judge orally stated that the method chosen by
the State is unconstitutional.  The Circuit Court has not issued a
written, final order, which the State is likely to appeal. Any
unfavorable outcome could result in the State having to refund over
$340 million.

State law provides preferential tax treatment to insurers who
maintain a home office in the State.  Certain insurers challenged
the constitutionality of this tax preference and sought a refund of
taxes paid.  Recently, the State Supreme Court ruled in favor of
the State.  This case and others, along with pending refund claims,
total about $200 million.

The State maintains a bond rating of Aa and AA from Moody's
Investor Service and S&P, respectively, on its general obligation
bonds, although the rating of a particular series of revenue bonds
relates primarily to the project, facility, or other revenue source
from which series derives funds for repayment.  While these ratings
and some of the information presented above indicate that the State
is in satisfactory economic health, there can be no assurance that
there will not be a decline in economic conditions or that
particular Bonds purchased by the Florida Trusts will not be
adversely affected by any such changes.





 
 

Page 24



Georgia Trusts - Economic Factors


The portfolio of each Georgia Trust consists primarily of
obligations issued by entities located in Georgia.

Constitutions Considerations.  The Georgia Constitution permits the
issuance by the State of general obligation debt and of certain
guaranteed revenue debt. The State may incur guaranteed revenue
debt by guaranteeing the payment of certain revenue obligations
issued by an instrumentality of the State.  The Georgia
Constitution prohibits the incurring of any general obligation debt
or guaranteed revenue debt if the highest aggregate annual debt
service requirement for the then current year or any subsequent
fiscal year for outstanding general obligation debt and guaranteed
revenue debt, including the proposed debt, exceed 10% of the total
revenue receipts, less refunds, of the State treasury in the fiscal
year immediately preceding the year in which any such debt is to be
incurred.

The Georgia Constitution also permits the State to incur public
debt to supply a temporary deficit in the State treasury in any
fiscal year created by a delay in collecting the taxes of that
year.  Such debt must not exceed, in the aggregate, 5% of the total
revenue receipts, less refunds, of the State treasury in the fiscal
year immediately preceding the year in which such debt is incurred. 
The debt incurred must be repaid on or before the last day of the
fiscal year in which it is to be incurred out of the taxes levied
for that fiscal year.  No such debt may be incurred in any fiscal
year if there is then outstanding unpaid debt from any previous
fiscal year which was incurred under this provision since the
inception of the constitutional authority referred to in this
paragraph.

Virtually all of the issues of long-term debt obligations issued by
or on behalf of the State of Georgia and counties, municipalities
and other political subdivisions and public authorities thereof are
required by law to be validated and confirmed in a judicial
proceeding prior to issuance.  The legal effect of an approved
validation in Georgia is to render incontestable the validity of
the pertinent bond issue and the security therefor.

The State and Its Economy.  The State operates on a fiscal year
beginning July 1 and ending June 30.  Thus, the 1993 fiscal year
ended June 30, 1993.  Based on data of the Georgia Department of
Revenue, estimated receipts of the State from income tax and sales
tax for the 1992 fiscal year comprised approximately 48.8% and
37.9%, respectively, of the total State tax revenues.  Such data
shows that total estimated State treasury receipts for the 1992
fiscal year increased by approximately 2.8% over such collections
in the 1991 fiscal year. The estimated 1993 fiscal year figures
indicate that receipts of the State from income tax and sales tax
for the 1993 fiscal year will comprise approximately 49.4% and
37.9%, respectively, of the total State tax revenues.  Total
estimated State tax revenue collections for the 1993 fiscal year
indicate an increase of approximately 8.4% over such collections in
the 1992 fiscal year.

Georgia experienced an economic slowdown in the late 1980s that
continued into 1992.  The 1991 fiscal year ended with a balanced
budget, but only because the State had borrowed approximately $90
million from surpluses maintained for special uses.  In light of
weaker than expected monthly revenue collections in May and June of
1991, Georgia lawmakers, in a special legislative session, cut
budgeted expenditures for the 1992 fiscal year by $415 million.
Georgia ended its 1992 fiscal year, however, with strong monthly
revenue collections.  For the last four months of fiscal year 1992,
Georgia's revenues were more than 6% over year-earlier levels.  By
year-end, revenue collections fell only 0.1% short of that expected
to cover 1992 expenditures.  This shortfall was made up from funds
allocated to but not used by state agencies.  The authorized 1993
fiscal year budget consists of an $8.3 billion spending plan and
approximately $750 million in new general obligation debt.  On
March 23, 1993, the Georgia General Assembly approved an $8.9
billion budget for the 1994 fiscal year which includes
authorization for $792 million of general obligation borrowing.   

The Georgia economy has performed relatively well during recent
years and generally has expanded at a rate greater than the
national average during that period.  However, growth in 1988
through 1992 has slowed somewhat and was modest compared to the
robust pace of the early 1980's.  Georgia's leading economic
indicators currently suggest that the rate of growth of the Georgia
economy will continue at the pace of 1988 and 1989 and more closely
match the national economy.  The 1992 annual average unemployment
rate for Georgia was 6.9% as compared to the 1992 national annual
average unemployment rate of 7.4%. Georgia's unemployment rates
(not seasonally adjusted) have consistently fallen throughout the
first five months of 1993.  The January unemployment rate stood at
6.8%, while the May rate stood at 5.2%.  These 1993 rates are, with
one exception, lower than both the corresponding 1993 national
employment rates, 7.9% and 6.7% for January and May, and the 1992
Georgia unemployment rates, 6.0% and 6.6% for January and May. 
Although many areas of the economy are expected to continue to
perform strongly, some areas such as the primary metals, carpet and
apparel industries are still experiencing periods of weakness, and
others, such as construction-related manufacturing activities
(e.g., lumber, furniture and stone/clay products), currently show
signs of weakening.  In addition, aircraft manufacturers located
within the State are in a tenuous position due to reductions in the
federal defense budget.  Presently, Georgia continues to lead the
nation in the production of pulp, pulpwood and paper.  Other
industries show potential for great expansion, but policy
considerations, tax reform laws, foreign competition, and other
factors may render these industries less productive.

Bond Ratings.  Currently, Moody's Investors Service, Inc. rates
Georgia general obligation bonds Aaa and Standard and Poor's
Corporation rates such bonds AA+.


Legal Proceedings.  Georgia is involved in certain legal
proceedings that, if decided against the State, may require the
State to make significant future expenditures or may substantially
impair revenues.  Several lawsuits have been filed against Georgia
asserting that the decision in Davis v. Michigan Department of
Treasury, 489 U.S. 803 (1989), invalidating Michigan's practice of
taxing retirement benefits paid by the federal government while
exempting state retirement benefits, also invalidates Georgia's tax
treatment of Federal Retirement Benefits for years prior to 1989.
Under Georgia's applicable 3 year statute of limitation the maximum
potential liability under these suits calculated to April 1, 1992
would appear to be no greater than $128 million.



 
 

Page 25



The plaintiffs in these suits, however, have requested refunds for
a period from 1980 which could result in a maximum potential
liability in the range of $591 million.  Any such liability would
be predicated on a holding by a Georgia court or the United States
Supreme Court that the Davis decision is applicable to Georgia's
prior method of taxing Federal Retirement Benefits, that the Davis
decision is to be given a retroactive effect, i.e., that the
decision affects prior tax years and that a refund remedy is
appropriate.  In Georgia's "test case", the Georgia Supreme Court
held that no refunds are due.  On June 28, 1993, however, the U.S.
Supreme Court vacated that holding and remanded the case for
further consideration in light of the U.S. Supreme Court decision
in Harper v. Virginia Department of Taxation (Decided June 18,
1993).  In Harper, the Court held that its decision in Davis
applied retroactively to federal retirees who were denied Virginia
personal income tax refunds.


Another suit filed against Georgia seeks a $31 million refund plus
interest of liquor taxes imposed under a Georgia Statute found
retroactively invalid by the U.S. Supreme Court.  The trial court's
decision that no refunds are due is currently being reviewed by the
Georgia Supreme Court.

Two additional suits have been filed with the State of Georgia by
foreign producers of alcoholic beverages seeking $96 million in
refunds of alcohol import taxes imposed under another statute. 
These claims constitute 99% of all such taxes paid during the
preceding three years.


In Board of Public Education for Savannah/Chatham County v. State
of Georgia, the local school board claimed that the State should
finance the major portion of the costs of its desegregation
program.  The Savannah Board originally requested restitution in
the amount of $30 million, but the Federal District Court set forth
a formula which would require a State payment in the amount of
approximately $6 million.  Both sides have moved for
reconsideration.  In a similar complaint, DeKalb County has
requested restitution in the amount of $90 million, and there are
approximately five other school districts which could file similar
claims.  It is not possible to quantify such potential claims at
this time.


Maryland Trusts - Economic Factors


The portfolio of each Maryland Trust consists primarily of
obligations issued by entities located in Maryland.

Some of the significant financial considerations relating to the
investments of the Maryland Trusts are summarized below.  This
information is derived principally from official statements and
preliminary official statements released on or before May 13, 1992,
relating to issues of Maryland obligations and does not purport to
be a complete description.

The State's total expenditures for the fiscal years ending June 30,
1990, June 30, 1991 and June 30, 1992 were $11.0, $11.3 and $11.6
billion, respectively. As of January 13, 1993, it was estimated
that total expenditures for fiscal 1993 would be $11.8 billion. 
The State's General Fund, representing approximately 55% of each
year's total budget, had a surplus on a budgetary basis of $57
million in fiscal year 1990, $55 thousand in fiscal 1991, and a
deficit of $56 million in fiscal 1992. The Governor of Maryland
reduced fiscal 1993 appropriations by $56 million to offset the
fiscal 1992 deficit.  The State Constitution mandates a balanced
budget.

The 1993 fiscal year budget was enacted in April 1992 which,
together with legislation enacted in 1992, involved the transfer of
certain funds, new fees and taxes, and alteration of certain
statutory State expenditure programs. When the 1993 budget was
enacted, it was estimated that the General Fund surplus at June 30,
1993 would be approximately $10 million on a budgetary basis. 
During the final months of fiscal year 1992 and the initial months
of fiscal year 1993, collections of State revenues were below the
levels estimated at the time of the adoption of the 1993 budget. 
The Governor proposed a cost containment plan to address this
revenue shortfall and to provide reserves to finance potential
deficiency appropriations.  On September 30, 1992, the Board of
Public Works approved the Governor's proposal to reduce General
Fund appropriations by $168 million.  The Board of Public Works
also approved the Governor's proposal to reduce the special fund
appropriations for the Department of Transportation by $30 million.
Legislation was introduced at the 1993 session of the General
Assembly to transfer this $30 million to the General Fund, as well
as $10 million from various other special funds.  In a special
session held in November 1992, the General Assembly enacted
legislation reducing State aid to local governments by $147
million.  In addition, other elements of the Governor's original
cost containment plan are in the process of being implemented or
revised.

The public indebtedness of Maryland and its instrumentalities is
divided into three basic types.  The State issues general
obligation bonds, to the payment of which the State ad valorem
property tax is exclusively pledged, for capital improvements and
for various State-sponsored projects.  The Department of
Transportation of Maryland issues limited, special obligation bonds
for transportation purposes payable primarily from specific, fixed-
rate excise taxes and other revenues related mainly to highway use. 
Certain authorities issue obligations payable solely from specific
non-tax, enterprise fund revenues and for which the State has no
liability and has given no moral obligation assurance.
General.  According to the most recent available ratings, general
obligation bonds of the State are rated Aaa by Moody's and AAA by
Standard & Poor's, as are those of Baltimore County, a separate
political entity surrounding Baltimore City, and Montgomery County
in the suburbs of Washington, D.C. General obligation bonds of
Prince George's County, the second largest metropolitan county,
which is also in the suburbs of Washington, D.C., are rated A1 by
Moody's and AA- by Standard & Poor's.  The general obligation bonds
of those other counties of the State, which are rated by Moody's,
carry an A rating or better, except for those of Allegheny County,
which are rated Baa. The most populous municipality in the State is
Baltimore City, the general obligation bonds of which are rated A1
by Moody's and A by Standard & Poor's. The majority of Maryland
Health and Higher Education Authority and State Department of
Transportation revenue bond issues have received an A rating or
better from Moody's.


 
 

Page 26



While these ratings and the other factors mentioned above indicate
that Maryland and its principal subdivisions and agencies are
addressing the effects of the economic recession and, overall, are
in satisfactory economic health, there can, of course, be no
assurance that this will continue or that particular bond issues
may not be adversely affected by changes in State or local economic
or political conditions.

Massachusetts Trusts - Economic Factors


The portfolio of each Massachusetts Trust consists primarily of
obligations issued by entities located in Massachusetts.

Since 1988, there has been a significant slowdown in the
Commonwealth's economy, as indicated by a rise in unemployment, a
slowing of its per capita income growth and declining state
revenues, and although fiscal 1992 revenues exceeded expenditures,
no assurance can be given that lower than expected tax revenues
will not resume and continue.  In fiscal 1991, the Commonwealth's
expenditures for state government programs exceeded current
revenues. Continuing a five-year trend of lower than expected tax
revenues in the face of growing state expenditures, actual fiscal
1991 revenues were less than estimated revenues.

1993 Fiscal Year Budget.  On July 20, 1992 the Governor signed the
Commonwealth's budget for fiscal 1993.  This budget is based on
estimated budgeted revenue and other sources of $14.641 billion,
including current tax revenue estimates of $9.940 billion.  Based
on December 31, 1992 tax collections, tax revenues for the fiscal
1993 budget were revised upwards on January 27, 1993 from the
original consensus tax estimate of $9.685 billion. Estimated tax
revenues for fiscal 1993 are approximately $456.4 million greater
than tax revenues for fiscal 1992.  As modified by legislation
enacted since July 20, 1992, the fiscal 1993 budget provides for
estimated budgeted expenditures and other uses of $14.976 billion,
which equals the sum of projected revenues and other sources plus
approximately $319.4 million of the estimated $549.4 million
positive budgetary fund balances existing as of the close of fiscal
1992.  The projected fiscal 1993 budgeted expenditures and other
uses represents an increase of 11.6% from fiscal 1992.  The fiscal
1993 budget remains subject to certain of the Governor's line-item
vetoes, which may be overridden by the legislature.


With regard to revenues, the fiscal 1993 budget depends on certain
non-tax revenue sources, the availability of which is subject to
certain contingencies. The fiscal 1993 budget assumes continued
federal reimbursements related to uncompensated care payments,
which is expected to be approximately $212.7 million in fiscal
1993.

The fiscal 1993 budget also assumes that the sale of certain assets
will generate approximately $45.0 million in non-tax revenues;
however, there are currently no agreements to sell such assets and
the market for some or all of such assets is unfavorable.  The
fiscal 1993 budget also assumes receipt of approximately $80.0
million from the Massachusetts Water Resource Authority ("MWRA")
under an agreement which would, among other things, relieve the
MWRA of certain comparable future financial commitments to the
Commonwealth.


1992 Fiscal Year.  The Commonwealth's budgeted expenditures and
other uses were approximately $13.420 billion in fiscal 1992, which
is $238.7 million or 1.7% lower than fiscal 1991 budgeted
expenditures.  Final fiscal 1992 budgeted expenditures were $300
million more than the initial July 1991 estimates of budgetary
expenditures, due in part to increases in certain human services
programs, including an increase of $268.7 million for the Medicaid
program and $50.0 million for mental retardation consent decree
requirements.  Budgeted revenues and other sources for fiscal 1992
totaled approximately $13.728 billion (including tax revenues of
$9.484 billion), reflecting an increase of approximately .70% from
fiscal 1991 to 1992 and an increase of 5.4% in tax revenues for the
same period.  Overall, fiscal 1992 is estimated to have ended with
an excess of revenues and other sources over expenditures and other
uses of $312.3 million.  After payment in full of the quarterly
distribution of local aid to the Commonwealth's cities and towns
("Local Aid") in the amount of $514.0 million due on June 30, 1992,
retirement of the Commonwealth's outstanding commercial paper
(except for approximately $50 million of bond anticipation notes)
and certain other short term borrowings, as of June 30, 1992, the
end of fiscal 1992, the Commonwealth showed a year-end position of
approximately $731 million, as compared with the Commonwealth's
cash balance of $182.3 million at the end of fiscal 1991.


1991 Fiscal Year.  Budgeted expenditures for fiscal 1991 totalled
approximately $13.6 billion, as against revenues and other sources
of approximately $13.6 billion.  The Commonwealth suffered an
operating loss of approximately $21.2 million.  Application of the
adjusted fiscal 1990 fund balances of $258.3 resulted in a fiscal
1991 budgetary surplus of $237.1 million.  State law requires that
approximately $59.1 million of the fiscal year ending balances of
$237.1 million be placed in the Stabilization Fund, a reserve from
which funds can be appropriated (i) to make up any difference
between actual state revenues in any fiscal in which actual
revenues fall below the allowable amount, (ii) to replace state and
local losses by federal funds or (iii) for any event, as determined
by the legislature, which threatens the health, safety or welfare
of the people or the fiscal stability of the Commonwealth or any of
its political subdivisions.

Upon taking office in January 1991, the new Governor proposed a
series of legislative and administrative actions, including
withholding of allotments under Section 9C of Chapter 29 of the
General Laws, intended to eliminate the projected deficits.  The
new Governor's review of the Commonwealth's budget indicated
projected spending of $14.1 billion with an estimated $850 million
in budget balancing measures that would be needed prior to the
close of fiscal 1991.  At that time, estimated tax revenues were
revised to $8.8 billion, $903 million less than was estimated at
the time the fiscal 1991 budget was adopted. The Legislature
adopted a number of the Governor's recommendations and the Governor
took certain administrative actions not requiring legislative
approval, including $65 million in savings from the adoption of a
state employee furlough program.  It is estimated by the
Commonwealth that spending reductions achieved through savings
initiatives and withholding of allotments total approximately
$484.3 million in aggregate for fiscal 1991.  However, these
savings and reductions may be affected by litigation pursued by
third parties concerning the Governor's actions under Section 9C of
Chapter 29 of the General Laws and with regard to the state
employee furlough program.


 
 

Page 27



In addition, the new administration in May 1991 filed an amendment
to its Medicaid state plan that enables it to claim 50% federal
reimbursement on uncompensated care payments for certain hospitals
in the Commonwealth.  As a result, in fiscal 1991, the Commonwealth
obtained additional non-tax revenues in the form of federal
reimbursements equal to approximately $513 million on account of
uncompensated care payments.  This reimbursement claim was based
upon recent amendments of federal law contained in the Omnibus
Budget Reconciliation Act of 1990 and, consequently, on relatively
undeveloped federal laws, regulations and guidelines.  At the
request of the federal Health Care Financing Administration, the
Office of Inspector General of the United States Department of
Health and Human Services has commenced an audit of the
reimbursement.  The administration, which had reviewed the matter
with the Health Care Financing Administration prior to claiming the
reimbursement, believes that the Commonwealth will prevail in the
audit.  If the Commonwealth does not prevail, the Commonwealth
would have the right to contest an appeal, but could be required to
repay all or part of Medicaid reimbursements with interest and to
have such amount deducted from future reimbursement payments.


1990, 1989 and 1988 Fiscal Years.  In July 1989, the former
Governor vetoed certain provisions included in the budget
legislation for fiscal 1990, including approximately $273 million
of the fiscal 1990 appropriations, including $100 million for local
aid to the Commonwealth's cities and towns ("Local Aid"). One of
the Governor's vetoes occasioned a default by the Commonwealth on
a September 1, 1989 payment of $2.5 million on a general obligation
contract with the Massachusetts Community Development Finance
Corporation to which its full faith and credit had been pledged,
which payment was made on September 17, 1990 after a supplemental
appropriation was proposed by the Governor and passed by the
legislature.  The legislature overrode the Governor's veto of $100
million of Local Aid and the Governor then indicated that he was
withholding the allotment for such expenditure. The Supreme
Judicial Court invalidated the Governor's withholding of $210
million of appropriated funds for certain Local Aid purposes in May
1990.  
 
The budget for fiscal 1991 was signed into law by the Governor on
August 1, 1990 and included estimated spending of $13.9 billion,
representing an increase of 3.3% or $448.3 million above fiscal
1990 spending.  Estimated tax revenues at the time of the budget's
enactment were $9.7 billion including $1.2 billion expected to
result from recently enacted tax legislation.  Actual revenues,
however, for the first two months of the fiscal 1991 were lower
than anticipated and revenue estimates for the remainder of the
fiscal year were subsequently revised downward twice during
September 1990.


Budgeted expenditures for fiscal 1988, 1989 and 1990 totalled
approximately $11.6 billion, $12.6 billion and $13.3 billion
respectively.  Budgeted revenues for fiscal 1988, 1989 and 1990
totalled approximately $11.3 billion, $12.0 billion and $12.0
billion, respectively.

Employment.  Reversing a trend of relatively low unemployment
during the early and mid 1980s, the Massachusetts unemployment rate
has increased significantly during the last three years to where
the Commonwealth's unemployment rate exceeds the national
unemployment rate.  In 1989, the average Massachusetts unemployment
rate was 4.0%, representing a 0.8% increase over the average 1987
unemployment rate, while the average United States unemployment
rate was 5.3%, representing a 0.9% decrease over the average 1987
United States unemployment rate.  During 1990, the Massachusetts
unemployment rate increased from 4.5% in January to 6.1% in July to
6.7% in August.  During 1991, the Massachusetts unemployment rate
averaged 9.0% while the average United States unemployment rate was
6.7%.  The Massachusetts unemployment rate in October 1992 was
8.4%, down from 8.6% for September 1992.  Other factors which may
significantly and adversely affect the employment rate in the
Commonwealth include the recently announced proposal by the Clinton
Administration to close United States military bases and reduce
federal government spending on defense-related industries.  Due to
this and other considerations, there can be no assurances that
unemployment in the Commonwealth will not  increase in the future.


Debt Ratings.  S&P currently rates the Commonwealth's uninsured
general obligation bonds at A, having upgraded the rating from BBB
on September 9, 1992.  At the same time, S&P upgraded the rating of
state and agency notes from SP2 to SP1.  In raising the ratings,
S&P cited the Commonwealth's improved financial status as key to
the upgrade. Prior to these actions by S&P, the Commonwealth had
experienced a steady decline in its S&P rating, with its most
recent decline beginning in May 1989, when S&P lowered its rating
on the Commonwealth's general obligation bonds and other
Commonwealth obligations from AA+ to AA and continuing a series of
further reductions until March 1992, when the rating was affirmed
at BBB.

Moody's currently rates the Commonwealth's uninsured general
obligation bonds at A, having upgraded the rating from Baa on
September 9, 1992.  Moody's in raising the rating on the bonds,
pointed to the Commonwealth's application of conservative revenue
assumptions and efforts to impose spending discipline as having
reduced the Commonwealth's financial vulnerability and restored
fiscal control.  Prior to this increase, the Commonwealth had
experienced a steady decline in its rating by Moody's since May
1989.  In May 1989, Moody's lowered its rating on the
Commonwealth's notes from MIG-1 to MIG-2, and its rating on the
Commonwealth's commercial paper from P-1 to P-2.  On June 21, 1989,
Moody's reduced the Commonwealth's general obligation rating from
Aa to A.  On November 15, 1989, Moody's reduced the rating on the
Commonwealth's general obligations from A to Baa1, citing the
Commonwealth's lowering of revenue estimates, its fiscal year 1990
deficit and to the legislature's apparent lack of consensus on how
to deal with it.  In March 9, 1990, Moody's reduced the rating of
the Commonwealth's general obligation bonds form Baa1 to Baa,
citing "extended inaction" in resolving the Commonwealth's growing
budget deficit.  There can be no assurance that these ratings will
continue.

In recent years, the Commonwealth and certain of its public bodies
and municipalities have faced serious financial difficulties which
have affected the credit standing and borrowing abilities of
Massachusetts and the respective entities and may have contributed
to higher interest rates on debt obligations. The continuation of,
or an increase in such financial difficulties, could result in
declines in the market values of, or default on, existing
obligations including Bonds deposited in any Massachusetts Trust.
Should there be during the term of a Massachusetts Trust a
financial crisis relating to Massachusetts, its public bodies or
municipalities, the market value and marketability of all
outstanding bonds issued by the Commonwealth and its public
authorities or municipalities, including the Bonds in such Trust,
and interest income to the Trust could be adversely affected.

 
 

Page 28



Total Bonds and Note Liabilities.  The total general obligation
bonded indebtedness of the Commonwealth as of
January 1, 1993, was approximately $7.9 billion. There were also
outstanding approximately $339 million in general obligation notes
and other short-term general obligation debt.  The total bond and
note liabilities of the Commonwealth as of January 1, 1993,
including guaranteed debt and contingent liabilities, was
approximately $12.4 billion.

Debt Service.  During the 1980's, capital expenditures were
increased substantially, which has had a short term impact on the
cash needs of the Commonwealth and also accounts for a significant
rise in debt service during that period. Payments for debt service
on Commonwealth general obligation bonds and notes have risen at an
average annual rate of 18.7% from $563.7 million in fiscal 1988 to
an estimated $942.3 million in fiscal 1991.  Debt service payments
in fiscal 1992 were $898.3 million.  Debt service payments for
fiscal 1992 reflect a $261 million one-time reduction achieved as
a result of the issuance of the refunding bonds in September and
October 1991.  Debt Service expenditures are projected to be $1.195
billion for fiscal 1993 and $1.311 billion for fiscal 1994.  The
amounts represented do not include debt service on notes issued to
finance the fiscal 1989 deficit and certain Medicaid related
liabilities, certain debt service contract assistance to the
Massachusetts Bay Transportation Authority, the Massachusetts
Convention Center Authority and the Massachusetts Government Land
Bank, as well as grants to municipalities under the school building
assistance program to defray a portion of the debt service costs on
local school bonds.

In January 1990, legislation was passed to impose a limit on debt
service beginning in fiscal 1991, providing that no more than 10%
of the total appropriations in any fiscal year may be expended for
payment of interest and principal on general obligation debt
(excluding the Fiscal Recovery Bonds). The percentage of total
appropriations estimated to be expended from the budgeted operating
funds for debt service (excluding debt service on Fiscal Recovery
Bonds) for fiscal 1992 is 4.9% which is projected to increase to
6.1% in fiscal 1993.

Certain Liabilities.  Among the material future liabilities of the
Commonwealth are significant unfunded general liabilities of its
retirement systems and a program to fund such liabilities; a
program whereby, starting in 1978, the Commonwealth began assuming
full financial responsibility for all costs of the administration
of justice within the Commonwealth; continuing demands to raise
aggregate aid to cities, towns, schools and other districts and
transit authorities above current levels; and Medicaid expenditures
which have increased each year since the program was initiated. 
The Commonwealth has signed consent decrees to continue improving
mental health care and programs for the mentally retarded in order
to meet Federal standards, including those governing receipt of
Federal reimbursements under various programs, and the parties in
those cases have worked cooperatively to resolve the disputed
issues.

As a result of comprehensive legislation approved in January 1988,
the Commonwealth is required, beginning in fiscal 1989, to fund
future pension liabilities currently and to amortize the
Commonwealth's unfunded liabilities over 40 years.  Total pension
costs increased at an average annual rate of 5.8% from $600.2
million in fiscal 1988 to $751.5 million in fiscal 1992.  The
projected pension costs (inclusive of current benefits and
reserves) for fiscal 1993 are $873.8 million, representing an
increase of 16.2% over the fiscal 1992 expenditures.
Litigation.  The Commonwealth is engaged in various lawsuits
involving environmental and related laws, including an action
brought on behalf of the U.S. Environmental Protection Agency
alleging violations of the Clean Water Act and seeking to enforce
the clean up of Boston Harbor.  The Massachusetts Water Resource
Authority ("MWRA"), successor in liability to the Metropolitan
District Commission, has assumed primary responsibility for
developing and implementing a court-approved plan for the
construction of the treatment facilities necessary to achieve
compliance with Federal requirements.  Under the Clean Water Act,
the Commonwealth may be liable for costs of compliance in these or
any other Clean Water cases if the MWRA or a municipality is
prevented from raising revenues necessary to comply with a
judgment.  The MWRA currently projects that the total cost of
construction of the treatment facilities required under the court's
order is approximately $3.5 billion in current dollars.

The Massachusetts Hospital Association has brought an action
challenging an element of the Medicaid rate-setting methodologies
for hospitals.  If the plaintiff hospitals are successful, the
Commonwealth may face additional liabilities on the order of $70
million to $100 million.  The parties have recently agreed to a
process of settlement and payment of fiscal 1988 through 1991
claims, with payment to be made in fiscal 1993.

There are also actions pending in which recipients of human
services benefits, such as welfare recipients, the mentally
retarded, the elderly, the handicapped, children, residents of
state hospitals and inmates of corrections institutions, seek
expanded levels of services and benefits and in which providers of
services to such recipients challenge the rates at which they are
reimbursed by the Commonwealth.  To the extent that such actions
result in judgments requiring the Commonwealth to provide expanded
services or benefits or pay increased rates, additional operating
and capital expenditures might be needed to implement such
judgments.

In December 1988, nine municipalities of the Commonwealth which
claim to own substantial interests in a nuclear power plant in
Seabrook, New Hampshire, filed suit against the Commonwealth, the
Governor, the Attorney General and other State officials claiming
damages arising from their opposition to licensure of the plant. 
The municipalities allege damages in the amount of $1 billion.  The
Commonwealth's motion to dismiss was allowed, but the plaintiffs in
that case have appealed and the case is under advisement in the
Appeals Court.

In addition there are several tax matters in litigation which could
result in significant refunds to taxpayers if decisions unfavorable
to the Commonwealth are rendered.  The amount of taxes and interest
at issue in those cases is approximately $195 million.




 
 

Page 29



A variety of other civil suits pending against the Commonwealth may
also affect its future liabilities.  These include challenges to
the Commonwealth's allocation of school aid and to the Governor's
authority to withhold or reduce allotments of appropriated funds
under section 9C of Chapter 29 of the General Laws and to adopt a
state employee furlough program.  No prediction is possible as to
the ultimate outcomes of these proceedings.

Many factors, in addition to those cited above, do or may have a
bearing upon the financial condition of the Commonwealth, including
social and economic conditions, many of which are not within the
control of the Commonwealth.


Expenditure and Tax Limitation Measures. Limits have been
established on State tax revenues by legislation approved by the
Governor on October 25, 1986 and by an initiative petition approved
by the voters on November 4, 1986. The Executive Office for
Administration and Finance currently estimates that State tax
revenues will not reach the limit imposed by either the initiative
petition or the legislative enactment in fiscal 1991.

Proposition 2-1/2, passed by the voters in 1980, led to large
reductions in property taxes, the major source of income for cities
and towns, and large increases in state aid to offset such revenue
losses.  According to Executive Office for Administration and
Finance, all of the 351 cities and towns have now achieved a
property tax level of no more than 2.5% of full property values.
Under the terms of Proposition 2-1/2, the property tax levy can now
be increased annually for all cities and towns, almost all by 2.5%
of the prior fiscal year's tax levy plus 2.5% of the value of new
properties and of significant improvements to property. 
Legislation has also been enacted providing for certain local
option taxes.  A voter initiative petition approved at the
statewide general election in November 1990 further regulates the
distribution of Local Aid and, among other matters, requires,
subject to appropriation, the distribution as Local Aid of no less
than 40% of collections from individual income taxes, sales and use
taxes, corporate excise taxes, and the balance of the state lottery
fund.  If implemented in accordance with its terms (including
appropriation of the necessary funds), the petition as approved
would shift several hundred million dollars to direct Local Aid.

Other Tax Matters.  To provide revenue to pay debt service on both
the deficit and Medicaid related borrowings and to fund certain
direct Medicaid expenditures, legislation was enacted imposing an
additional tax on certain types of personal income for 1989 and
1990 taxable years at rates of 0.375% and 0.75% respectively,
effectively raising the tax rate of 1989 from 5% to 5.375% and for
1990 from 5% to 5.75%.  Recent legislation has effectively further
increased tax rates to 5.95% for tax year 1990 to 6.25% for tax
year 1991 and returning to 5.95% for tax year 1992 and subsequent
tax years.  The tax is applicable to all personal income except
income derived from interest, dividends, capital gains,
unemployment compensation, alimony, rent, pensions, annuities and
IRA/Keogh distributions.  The income tax rate on other interest
(excluding interest on obligations of the United States and of the
Commonwealth and its subdivisions), dividends and net capital gains
(after a  50% reduction) was increased from 10% to 12% for the tax
year 1990 and subsequent years, by recently enacted legislation.

Other Issuers of Massachusetts Obligations.  There are a number of
state agencies, instrumentalities and political subdivisions of the
Commonwealth that issue Municipal Obligations, some of which may be
conduit revenue obligations payable from payments from private
borrowers.  These entities are subject to various economic risks
and uncertainties, and the credit quality of the securities issued
by them may vary considerably from the credit quality of
obligations backed by the full faith and credit of the
Commonwealth.  The brief summary above does not address, nor does
it attempt to address, any difficulties and the financial
situations of those other issuers of Massachusetts Obligations.


Michigan Trusts - Economic Factors


The portfolio of each Michigan Trust primarily consists of
obligations issued by entities located in Michigan.

Economy.  The principal sectors of the State's economy are
manufacturing of durable goods (including automobile and office
equipment manufacturing), tourism and agriculture.  As reflected in
historical employment figures, the State's economy has lessened its
dependence upon durable goods manufacturing. In 1960, employment in
such industry accounted for 33% of the State's workforce.  This
figure fell to 17.3% by 1991.  However, manufacturing (including
auto-related manufacturing) continues to be an important part of
the State's economy.  These industries are highly cyclical and in
the 1992-1993 period are expected to operate at substantially less
than full capacity.  This factor adversely affects the revenue
streams of the State and its political subdivisions because it
adversely affects tax sources, particularly sales taxes and single
business taxes.

Recently, as well as historically, the average monthly unemployment
rate in the State has been higher than the average figures for the
United States.  For example, for 1991 the average monthly
unemployment rate in the State was 9.2% as compared to a national
average of 6.7% in the United States.  For 1992, the average
monthly unemployment rate in the State was 8.8% as compared to a
national average of 7.4%.
Budget.  The budget of the State is a complete financial plan and
encompasses the revenues and expenditures, both operating and
capital outlay, of the General Fund and special revenue funds.  The
budget is prepared on a basis consistent with GAAP.  The State's
Fiscal Year begins on October 1 and ends September 30 of the
following year. Under State law, the executive budget
recommendations for any fund may not exceed the estimated revenue
thereof, and an itemized statement of estimated revenues in each
operating fund must be contained in an appropriation bill as passed
in the Legislature, the total of which may not be less than the
total of all appropriations made from the fund for that fiscal
year.  The State Constitution provides that proposed expenditures
from and revenues of any fund must be in balance and that any prior
year's surplus or deficit in any fund must be included in the
succeeding year's budget for that fund.


The State's Constitution limits the amount of total State revenues
that may be raised from taxes and other sources. State revenues
(excluding federal aid and revenues used for payment of principal
and interest on general obligation bonds) in any fiscal year are
limited to a specified percentage of State personal income in the
prior calendar year or average of the prior three calendar years,
whichever is greater.  The State may raise taxes in excess of the
limit in emergency situations.

 
Page 30



The State finances its operations through the State's General Fund
and special revenue funds.  The General Fund
receives revenues of the State that are not specifically required
to be included in the special revenue funds.  General Fund revenues
are obtained approximately 63 percent from the payment of State
taxes and 37 percent from federal and non-tax revenue sources.  The
majority of the revenues from the State taxes are from the State's
personal income tax, single business tax, use tax and sales tax. 
In addition the State levies various other taxes. Approximately
one-half of total General Fund expenditures are made by the State's
Department of Education and Department of Social Services. The
Department of Education provides general supervision over all
public education in the State, including general, adult and special
education.  The Department of Social Services administers economic,
social and medical programs in the State, including Medicare,
Medicaid and Aid to Families with Dependent Children.  Other
significant expenditures from the General Fund provide funds for
law enforcement, general State government, debt service and capital
outlays.

Despite modest surpluses in the three preceding fiscal years, the
State ended fiscal years 1989-90 and 1990-91 with negative balances
of $310.3 million and $169.4 million, respectively.  In February
1993 the State estimated that this negative balance had been
eliminated as of the end of fiscal year 1991-92 which ended
September 30, 1992.

The State budget for the 1992-93 fiscal year, which began on
October 1, 1992, was passed by the Legislature on July 28, 1992. 
This budget appropriated $8,017.7 million General Fund-General
Purpose monies (including $4.5 million in supplemental
appropriations passed by the Legislature in the fall of 1992).  In
July 1992, the Governor, using line item veto authority in the
State Constitution, vetoed $34.2 million of appropriations that
lapse to the General Fund. Including supplemental appropriations
passed by the Legislature in the fall of 1992, other anticipated
supplemental needs and lower revenue projections, in late January
1993 the State projected a cumulative deficit of approximately $373
million for the 1992-93 fiscal year; however the administration
reached agreement with the Legislature on a deficit reduction
package which the administration expects to be adopted and which
will eliminate the 1992-93 fiscal year deficit.  As noted above,
the State Constitution requires that any prior year's surplus or
deficit in any fund must be included in the succeeding year's
budget for that fund.  In February 1993 the State also projected
that fiscal year 1992-93 would end with a $242.4 million negative
cash balance for the combined General Fund and School Aid Fund
because certain accounting adjustment accruals will not occur on a
cash basis until the following fiscal year.

The State also maintains the Counter-Cyclical Budget and Economic
Stabilization Fund ("BSF") which accumulates balances during the
years of significant economic growth and which may be utilized
during periods of budgetary shortfalls.  The unreserved balance for
the BSF for the 1989-90 fiscal year end was $385.1 million, for the
1990-91 fiscal year end was $182.2 million and for the 1991-92
fiscal year end was $23.1 million.

Debt.  The State Constitution limits State general obligation debt
to (i) short-term debt for State operating purposes which must be
repaid in the same fiscal year in which it is issued amd which
cannot exceed 15% of the undedicated revenues received by the State
during the preceeding fiscal year, (ii) short and long term debt
unlimited in amount for the purpose of making loans to school
districts and (iii) long term debt for voter-approved purposes.

The State has issued and has outstanding general obligation full
faith and credit bonds for water resources, environmental
protection program and recreation program purposes totalling, as of
September 30, 1992, approximately $390 million.  In November 1988
the State's voters approved the issuance of $800 million of general
obligation bonds for environmental protection and recreational
purposes; of this amount approximately $453 million remains to be
issued.  On December 12, 1991 the State issued $700 million in
general obligation notes which matured on September 30, 1992.  The
State issued $900 million in general obligation notes in February
1993 which will mature on September 30, 1993.  The State issued
$34.6 million in general obligation school loan notes in April 1993
which will mature on October 29, 1993.


Other Issuers of Michigan Municipal Obligations.  There are a
number of state agencies, instrumentalities and political
subdivisions of the State that issue bonds, some of which may be
conduit revenue obligations payable from private borrowers.  These
entities are subject to various economic risks and uncertainties,
and the credit quality of the securities issued by them may vary
considerably from obligations backed by the full faith and credit
of the State.

Ratings.  Currently the State's general obligation bonds are rated
A1 by Moody's, AA by S&P and AA by Fitch Investors Service, Inc. 
On January 23, 1991, S&P placed the State's general obligation debt
on Credit Watch with negative implications for S&P's AA rating on
such debt.  On July 29, 1991 S&P removed the State's general
obligation bonds from Credit Watch and confirmed its AA rating on
such debt.

Litigation.  The State is a party to various legal proceedings
seeking damages or injunctive or other relief.  In addition to
routine litigation, certain of these proceedings could, if
unfavorably resolved from the point of view of the State,
substantially affect State programs or finances.  These lawsuits
involve programs generally in the areas of corrections, highway
maintenance, social services, tax collection, commerce and
budgetary reductions to school districts and governmental units and
court funding.  The ultimate disposition of these proceedings is
not determinable.

In 1991, the Michigan Court of Appeals in Caterpillar, Inc. v.
Michigan Department of Treasury upheld a lower court decision
finding the capital acquisition deduction ("CAD") provisions of the
Michigan Single Business Tax Act ("SBTA") unconstitutional.  On
July 31, 1992, the Michigan Supreme Court reversed the Court of
Appeals and upheld the constitutionality of the CAD as originally
enacted.  The Caterpillar plaintiffs then sought a writ of
certiorari from the United States Supreme Court, which was denied
by the Supreme Court on November 30, 1992.  However, in response to
the Court of Appeals' Caterpillar decision, the SBTA was amended by
1991 PA 77 ("Act 77") to (i) replace the previous CAD with an
apportioned CAD applicable to real and personal property purchases,
regardless of location; (ii) modify the SBTA apportionment formula
used to determine the applicable SBTA tax base from a three factor
(one-third property, one-third payroll and one-third sales) formula
to a double-weighted sales (one-quarter property, one-quarter
payroll and one-half sales) formula by 1993; and (iii) increase the
filing threshold to $60,000 in 1991 and $100,000 in 1992 and
beyond.  Act 77 made the new CAD formula retroactive to tax years
beginning after September 30, 1989.



 
 

Page 31


Because of this retroactivity, it contained a fallback provision
stating that if a court allowed an unapportioned CAD for 1990,
there would be no 1991 CAD. 1991 PA 128, effective October 25,
1991, modified the provisions of Act 77 to eliminate the reference
to a fallback provision and established a specific method for
calculating the CAD for 1991 regardless of the retroactivity
provisions of Act 77.  Lawsuits challenging the constitutionality
of Act 77 have been filed.


Property Tax.  At the present time the State does not levy any ad
valorem taxes on real or tangible personal property. In addition,
the State Constitution limits the extent to which municipalities or
political subdivisions may levy taxes upon real and personal
property through a process that regulates assessments.  On July 21,
1993, the Legislature passed Senate Bill 1, a measure that
significantly impacts financing of K-12 school operations beginning
with July 1, 1994 tax levies.  Senate Bill 1 was signed into law by
the Governor on August 19, 1993.

Senate Bill 1 also exempts all property in Michigan from millage
levied for local school and intermediate school district operating
purposes, other than millage levied for community colleges.  It
does not affect millage levied for voter-approved general
obligation debt.  It also changes the date for determining property
valuations, basically resulting in a one year freeze in current
assessments.  The bill does not contain a method for replacing
revenues lost by these exemptions or provide for other means of
financing public education.  However, the State has indicated an
intention to address these issues prior to January 1, 1994.

Senate Bill 1 is the latest development in a long-term effort by
the State to modify the local ad valorem property tax system.  Two
previous proposed constitutional amendments that would have reduced
rates or capped assessment increases were rejected by the voters at
the November 1992 general election, and a third proposal was
rejected at a special election held June 2, 1993. Current law bases
1993 ad valorem property tax levies upon equalized assessments as
of December 31, 1992, representing an increase for the first time
since December 31, 1990.

The ultimate nature, extent and impact of any property tax or
public education finance reform measure cannot currently be
predicted.  Both Senate Bill 1 and the continuing consideration by
the State of proposals that will impact taxation in the State may
substantially change the State's method of conducting and financing
K-12 public education.
Minnesota Trusts - Economic Factors


The portfolio of each Minnesota Trust consists primarily of
obligations issued by entities located in Minnesota.

In the early 1980s, the State of Minnesota experienced financial
difficulties due to a downturn in the State's economy resulting
from the national recession. As a consequence, the State's revenues
were significantly lower than anticipated in the July 1, 1979 to
June 30, 1981 biennium and the July 1, 1981 to June 30, 1983
biennium.

In response to revenue shortfalls, the legislature broadened and
increased the State sales tax, increased income taxes (by
increasing rates and eliminating deductions) and reduced
appropriations and deferred payment of State aid, including
appropriations for and aids to local governmental units. The
State's fiscal problems affected other governmental units within
the State, such as local governments, school districts and State
agencies, which, in varying degrees, also faced cash flow
difficulties.  In certain cases, revenues of local governmental
units and agencies were reduced by the recession.


Because of the State's fiscal problems, Standard & Poor's reduced
its rating on the State's outstanding general obligation bonds from
AAA to AA+ in August 1981 and to AA in March 1982.  Moody's lowered
its rating on the State's outstanding general obligation bonds from
Aaa to Aa in April 1982.

The State's economy recovered in the July 1, 1983 to June 30, 1985
biennium, and substantial reductions in the individual income tax
were enacted in 1984 and 1985.  Standard & Poor's raised its rating
on the State's outstanding general obligation bonds to AA+ in
January 1985.  In 1986, 1987 and 1991, legislation was required to
eliminate projected budget deficits by raising additional revenue,
reducing expenditures, including aid to political subdivisions and
higher education, and making other budgetary adjustments.  A budget
forecast released by the Minnesota Department of Finance on
February 27, 1992 projected a $569 million shortfall, primarily
attributable to reduced income tax receipts, for the biennium
ending June 30, 1993.  Planning estimates for the 1994-95 biennium
projected a budget shortfall of $1.75 billion (less a $400 million
reserve).  The State responded by enacted legislation that made
substantial accounting changes, reduced the budget reserve (cash
flow account) by $160 million to $240 million, reduced
appropriations for state agencies and higher education, imposed a
sales tax on purchases by local governmental units, and adopted
other tax spending changes.

A budget forecast released by the Department of Finance on March 3,
1993 projects a $434 million General Fund surplus at the end of the
current biennium June 30, 1993, plus a $240 million cash flow
account, against a total budget for the biennium of approximately
$14.6 billion.  The forecast for the biennium ending June 30, 1995
projects a General Fund deficit of $163 million at the end of the
biennium, after applying the surplus from June 30, 1993 and after
reserving $240 million for the cash flow account.

State grants and aids represent a large percentage of the total
revenue of cities, towns, counties and school districts in the
State.  Even with respect to Bonds that are revenue obligations of
this issuer and not general obligations of the state, there can be
no assurance that the fiscal problems referred to above will not
adversely affect the market value or marketability of the Bonds or
the ability of the respective obligors to pay interest on and
principal of the Bonds.

Missouri Trusts - Economic Factors


The portfolio of each Missouri Trust consists primarily of
obligations issued by entities located in Missouri (the "State"). 
Bonds in a Missouri Trust may include obligations issued by or
obligations not issued by the State of Missouri.



 
 

Page 32



Each Missouri Trust, therefore, is susceptible to political,
economic or regulatory factors affecting issuers of Bonds. The
following information provides only a brief summary of some of the
complex factors affecting the financial situation in the State and
is derived from sources that are generally available to investors
and is believed to be accurate.  It is based in part on information
obtained from various State and local agencies in Missouri.  No
independent verification has been made of the accuracy or
completeness of any of the following information.

There can be no assurance that current or future statewide or
regional economic difficulties, and the resulting impact on issuers
of Bonds and the obligors thereon, will not adversely affect the
market value of Missouri Municipal Obligations held in the
portfolio of the Trust or the ability of particular obligors to
make timely payments of debt service on (or relating to) those
obligations.  Because all or most of the Bonds in the Trust are
revenue or general obligations of local governments, rather than
general obligations of the State itself, ratings on the Bonds may
be different from those given to general obligations of the State. 
Prospective investors should study with care the portfolios of
Bonds in the Trust and should consult with their own investment
advisors as to the merits of particular issues in the portfolio.

Economic Condition and Outlook for the State of Missouri.  As noted
in the Comprehensive Annual Financial Report for the fiscal year
ended June 30, 1992 which was prepared and issued by the State
Office of Administration and audited by the State Auditor's Office,
significant reductions were made in the State's 1992 budget due to
the national recession.  Over $290 million was withheld from
appropriated or planned spending to balance the budget.  Further,
courts mandated allocation of expenditures in specific areas, which
had the effect of limiting resources for other portions of the
budget.  Federal court-ordered payments for the St. Louis and
Kansas City school desegregation plans were $296.5 million in
fiscal year 1992, which is about 7% of the State's general revenue
budget.

A large portion of the State has experienced severe flood
conditions in the past several weeks.  The flood conditions have
begun to recede, and the evaluation of the extent of damage to the
State and municipal infrastructure, including bridges, roads,
railways, water treatment plans, sewage treatment plants, drainage
systems, levees, as well as damage to private property and
commerce, including homes, farms, particularly ruined crops,
commercial buildings, business operations has begun; the full
extent of damage is not yet determinable but is expected to be
extensive.  The cost of flood damage may be partially offset by
federal disaster aid, and initial federal aid payments have begun,
but the full nature and extent of further federal disaster aid  is
not yet known.  It is not yet possible to predict whether such
flood conditions will have a materially adverse effect on the Bonds
held in the Trust, or the obligors thereon.

Missouri's manufacturing, financial and agricultural base, and in
turn its economic health, is tied closely to that of the nation. 
Missouri's personal income, which directly impacts the individual
income tax and sales tax, rose at a 2.7% rate during calendar year
1991.  General revenue collections in fiscal year 1992 were $4.26
million, 2.6% above fiscal year 1991 collections. However, economic
statistics included in the Comprehensive Annual Fiscal Report for
the State of Missouri for fiscal year 1992, as published by the
Missouri Department of Economic Development, indicate a slowing in
certain key economic growth indicators, such as new investment, new
jobs, and new manufacturers, from levels attained in the mid and
late 1980's.   State unemployment rates have followed a similar
course as the unemployment rate for the nation. However, over the
last ten years there have been at least four years during which the
State of Missouri's unemployment rate exceeded that of the national
average.

Since 1989 industrial growth in the State has taken a downturn. 
From 1987 to 1989, the number of new manufacturers in the State
grew from 93 to 118 and the number of expansions in existing
manufacturers also grew from 130 in 1987 to 223 in 1989.  The
number of new manufacturers and the number of expansions in
existing manufacturers peaked in 1989, reaching a nine-year high,
as reported in the 1992 Missouri Comprehensive Annual Financial
Report.  However, from 1989 to 1991, the number of new
manufacturers in the State declined from 118 in 1989 to 79 in 1991,
and the number of expansions  in existing manufacturers also
decreased, from 223 in 1989 to 149 in 1991.  Correspondingly,
investment in industrial growth in the State has declined in the
past few years from $966.02 million in 1988 to $293.62 million in
1991, which figure represents the lowest investment totals for the
State in nine years.

The State's largest private employers represent a wide spectrum of
industries. These industries engage in manufacturing, defense-
related contracts, retail and wholesale, health-related services,
education and communications, among others. Based on data from the
Missouri Department of Economic Development for 1992, the ten
largest private employers in the State in descending number of
employees are: McDonnell Douglas Corporation, Wal-Mart Stores,
Inc., Southwestern Bell Telephone Company, Trans World Airlines,
Inc., Washington University, Schnuck Markets, Inc., SSM Health
Care, Brown Group, Inc., Hallmark Cards, Incorporated, and the Ford
Motor Company.  At the end of fiscal year 1992, these employers'
labor forces ranged in size from 30,000 to 40,000 employees for
McDonnell Douglas Corporation to 6,000 to 7,000 employees for Ford
Motor Company.  Since the compilation of the foregoing data on
these private employers, some of the foregoing listed employers
have announced and are implementing reductions in their labor
forces.  Flooding in certain areas of the State has caused
businesses, including manufacturers and distributors, to cease
operations, at least temporarily, and some business, with
significant concentrations of employees for particular
municipalities or regions within the State, have announced that
they will not re-open their operations due to the extensive nature
of the flood damage.

Defense-related business plays an important role in Missouri's
economy. Historically a large number of civilians have been
employed at various military installations and training bases in
the State.  Aircraft and other related defense contractors in the
State of Missouri have historically been the recipients of sizable
defense contract awards.  Both defense-related businesses and the
airline industry, both as manufacturers and as providers of
transportation services, are under pressure in the State of
Missouri, as Congress makes significant reductions in defense
spending, and the airline industry continues to feel the impact of
deregulation and the economic slow-down.  Further reductions in the
labor force in these industries have a materially adverse effect on
the economy of the State.



 
 

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Based upon data obtained from the U.S. Department of Commerce-
Bureau of the Census, the State has for the last 20 years faced
declining increases in population.  Percentage increase in
population has systematically declined since 1970 measured at 10-
year intervals.  For the last 20 years, the percentage of
population living in urban and rural areas has stabilized, stemming
the prior growth in urban populations.

Major Initiatives.  Balancing Missouri's budget in fiscal year 1992
required extensive withholdings and downsizing. Despite budget
limitations, State agencies were able to implement Congressionally
approved Medicaid programs that expanded access to health care. 
Federal reimbursements were used to help offset the rising cost of
medical care for individuals, hospitals and nursing homes, and
scarce State resources were channelled to vital public services. 
In addition, in fiscal year 1992, Missouri invested a total of $80
million in its capital assets with appropriations for maintenance
and construction projects throughout the State.

Budgetary Control.  The State maintains budgetary controls to
ensure compliance with legal provisions embodied in the annual
appropriated budget passed by the State legislature and approved by
the Governor prior to the beginning of the fiscal year.  If
appropriations are not sufficient for a fiscal year, supplemental
amounts are requested during the next legislative session by the
same process that original appropriations are requested.  Budgetary
control is maintained by the individual departments.  Expenditures
cannot exceed the appropriation amounts at the departmental
appropriation level.  Also, the Governor has the authority to
reduce the allotments or appropriations in any fund if it appears
that revenues for the fiscal year will fall below the estimated
revenues.  Encumbrance accounting under which purchase orders,
contracts and other commitments for the expenditure of moneys are
recorded in order to reserve part of the appropriation, is employed
for purposes of budgetary control and contract compliance.

Appropriation hearings are expected on issues of flood disaster
relief.  The preliminary estimates orally provided by the State
Emergency Management Agency indicate that as of August 26, 1993,
damage to agricultural lands approximates $1.79 billion dollars,
while damage to private homes, businesses and public infrastructure
approximates $1.25 billion dollars.  The Agency further indicated
that 28,500 Missouri residents have requested disaster relief aid
which consists of federal and state aid.  The foregoing figures
concerning the number of disaster aid applications are preliminary
and do not address applications which may be rejected or the extent
of offset by homeowner's, flood, or other private insurance.  There
are no definite estimates on the total aid that will be sought, or
paid, and  the underlying damages sustained, related to flood
conditions; these conditions continue to be evaluated, and, to an
extent, estimates of damages sustained may worsen, as waters in
flooded areas begin to recede, allowing for more complete
projections and evaluations.


General Government Functions.  Revenues for general government
functions (General, Special Revenue, Debt Service and Capital
Projects funds) totaled $8.5 billion in fiscal year 1992, an
increase of 15.4% over fiscal year 1991. Taxes produced 55.6% of
general revenues compared to 62.1% for the prior year. Increases in
contributions and intergovernmental revenues were the primary
factor in the increase of general government revenues.  Because of
additional federal mandates for Medicaid programs, State
expenditures increased and matching revenues from the federal
government also increased.


Expenditures for general government functions (General, Special
Revenue, Debt Service and Capital Projects Funds) totaled $8.0
billion in fiscal year 1992, an increase of 12.0% over fiscal year
1991.  The majority of the expenditure increase is attributed to
increases in human services due to additional federal mandates for
Medicaid programs.

Fund Balance.  The State ended fiscal year 1992 with an unreserved
fund balance (surplus) of $475.1 million for the governmental
funds.  The unreserved fund balance of the General Fund improved
due to increases in revenues and withholdings of appropriations to
control expenditures.  Following is a table representing a
comparison of the 1992 and 1991 fiscal year unreserved fund
balances (in thousands of dollars) for the funds comprising these
figures.


INCREASE
FUND                                      1992         1991      
(DECREASE) General         . . . . . . . . . . . . $76,786   
$(93,030)      $169,816 Special Revenue . . . . . . . . . . . .
325,361      303,943        21,418 Capital Projects. . . . . . . .
. . . . .72,911      127,361      (54,450)



Total Fund Balance. . . . . . . . . . .$475,058     $338,274     
$136,784


Pension Funds.  The State has two retirement systems, the Missouri
State Employees' Retirement Systems (MOSERS) and the Highway
Employees' and Highway Patrol Retirement System (HEHPRS). 
Retirement benefits for members of the judiciary are included below
within MOSERS.

MOSERS          HEHPRS


Pension benefit obligation                        $2,059,595     
$835,865 Net Assets, available at cost                     
1,946,133       575,957 Unfunded pension benefit obligations      
       $  113,462      $259,908


The unfunded pension benefit obligations of MOSERS increased during
the fiscal years 1991 and 1992, by .43% and 1.08%, respectively. 
(This figure represents the unfunded pension benefit obligation as
a percentage of the State's annual covered payroll.)  The increases
were due to funding less than the actuarially determined rate,
changes in actuarial assumptions, and plan amendments.  On the
other hand, the unfunded pension benefit obligations of HEHPRS
decreased during both the fiscal year 1991 and the fiscal year
1992, by 12.5% and .3%, respectively.

 
 

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Tax Limitation.  Article X of Missouri's Constitution imposes
various restrictions on taxation and spending by the State and by
local governments. Section 16 of Article X generally requires that
property and other local taxes and state taxation and spending may
not be increased above the limitations set forth in Missouri's
Constitution without direct voter approval.  Section 22 of Article
X limits the amount of taxes, licenses or other fees that may be
levied absent approval of a majority of the qualified voters. 
Section 18 of Article X imposes a limit (the "Limit") on the amount
of taxes which may be imposed by the State in any fiscal year.  The
Limit is tied to total State revenues for fiscal year 1980-81, as
defined, adjusted annually in accordance with a formula which is
tied to increases in the average personal income of Missouri for
certain designated periods.  If the Limit is exceeded in any fiscal
year, a refund of the excess revenues (through a pro rata credit on
the state income tax return) may be required.  The Limit can be
exceeded by a constitutional amendment, duly adopted by the people,
or if the State's General Assembly approves by a two-thirds vote of
each house an emergency declaration by the Governor.

Debt Administration.  Article III, Section 37 of the Constitution
of the State of Missouri restricts the power of the State to create
debt without voter approval except to refund outstanding bonds and
to incur limited temporary liabilities and by reason of unforeseen
emergencies or deficiencies in revenue. Article VI, Section
26(a)-26(g) of Missouri's Constitution imposes limitations on the
ability of local governments to incur certain indebtness without
voter approval.

The amount of general obligation debt that can be issued by the
State is limited to the amount approved by citizen vote plus the
amount of $1 million. According to the Director of Division of
Accounting for the State of Missouri, in his letter dated December
11, 1992 directed to the then Governor of the State, the State's
debt limit at June 30, 1992 was $1,226,000,000, of which
$316,505,760 was unissued.

During fiscal year 1992, $23,000,000 of bonds were retired,
$145,725,000 of the bonds were refunded and $192,835,000 of new
bonds were issued.  At year end, the total general obligation debt
outstanding was $804,225,000 and the interest rate range was
.05-9.7%, provided, however, no assurance can be given that the
bonds or other ultimate obligations which may be a part of this
Trust will bear rates of interest in the foregoing range.

General obligations of the State are currently rated AAA and Aaa by
Standard & Poor's Corporation and Moody's Investors Service, Inc.,
respectively.  No assurance can be given, however, that the
economic and other factors on which these ratings are based will
continue or that particular bond issues may not be adversely
affected by changes in economic, political or other conditions.
Because some or all of the bonds that may be included in the Trust
are revenue or general obligations of local governments or
authorities, rather than general obligations of the State itself,
ratings on such bonds may be different from those given to general
obligations of the State.

Public School Desegregation Plans.  Litigation has been pending in
Missouri federal courts since the 1970's alleging that St. Louis
and Kansas City, Missouri, schools are racially segregated in
violation of the United States Constitution. A desegregation plan
for St. Louis was approved in 1980 and remains in effect.  With
regard to Kansas City, a desegregation plan was implemented in
1985, and on April 16, 1993, the United States District Court for
the Western District of Missouri ordered a two-year extension of
the desegregation plan.  Under the plans, the State of Missouri has
incurred and continues to incur substantial costs.

The Kansas City, Missouri School District ("KCMSD") has already
budgeted $517 million for capital improvements to effect the
desegregation plan; however, these costs are expected to escalate,
and the scope of the total capital improvements program is unknown. 
The State of Missouri is jointly and severally liable for the
KCMSD's share of the desegregation costs.  The KCMSD has
accumulated debt of $87 million, and an additional approximately
$130 million is expected to be incurred in fiscal years 1993 and
1994.  KCMSD operates at a substantial deficit, which is projected
to accumulate to as much as $300 million by the end of the decade. 
Accordingly, no predictions can be made about the future financial
viability of the KCMSD or the effect of the possible insolvency of
KCMSD on the State of Missouri.


On May 14, 1993, the Missouri General Assembly approved a package
(the "Outstanding Schools Act") providing new procedures for
funding of public education.  The Outstanding Schools Act was
signed into law on May 27, 1993, by Governor Mel Carnahan.  The
revenue sources for the plan include a cap of the State deduction
for federal taxes paid by individuals at $5,000 on single returns
and $10,000 on joint returns.  Previously, there was no limit on
the amount of federal taxes that could be deducted.  A further
revenue source for the new plan is limiting the State deduction for
federal taxes paid by corporations at 50% and an increase in the
corporate income tax from 5% to 6.25%.  According to projections
developed by the State Office of Administration, Division of Budget
and Planning, the amount and sources of funding for fiscal year
1994 are $76.4 million from the limitation of the federal income
tax deductions for individuals, and $29.3 million from the combined
effect of increased State corporate income tax rate and the 50% cap
of the State deduction for federal corporate income taxes.  The
projections are based upon assumptions of a growth factor of 6% in
1994.  The State has used growth factors of 5% in fiscal years 1995
and thereafter to project the impact of the plan through fiscal
year 1997 at $215.2 million from individuals and $95.2 million from
corporations. Finally, as a minimum, each school district must have
a property tax levy at $2.75, up from the $2.00 property tax levy
in use before the effective date of the plan.  The maximum State
equalized tax levy was set at $4.60.  The additional taxes imposed
by the Outstanding Schools Act will be subject to a Statewide
referendum if the State supreme court rules that the State has not
violated the State Constitution in the manner and amounts of
funding for public education.

No assurance can be given that the ultimate costs of the current
plans, new legislation or additional measures that are expected to
be implemented or ordered, which cannot currently be quantified,
will not adversely affect the finances of the State of Missouri,
the State's ability to pay the debt service on any of its
Obligations that may be held in the portfolio of the Trust, or the
market for Bonds held in the portfolio of the Trust or the Common
Shares of the Trust.



 
 

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Litigation.  The State is a party to numerous legal proceedings
pertaining to matters incidental to the performance of routine
governmental operations.  Such litigation includes, but is not
limited to, claims asserted against the State arising from alleged
torts, alleged breaches of contracts, condemnation proceedings and
other alleged violations of state and federal laws.  Adverse
judgements in these or other matters could have the potential for
either a significant loss of revenue or a significant unanticipated
expenditure by the State.  In addition to the school desegregation
cases discussed above, the State is also subject to pending
litigation naming the State as a defendant on child welfare
payments.  The plaintiffs in the welfare case allege that the State
did not follow federal regulations in assessing non-custodial
parents for child welfare payments.  A United States District Court
Judge ruled that the State was liable for assessments in excess of
the amounts allowed by federal regulations.  The judgement was
appealed to the 8th United States Circuit Court which upheld the
lower court's decision.  The case has been remanded by the 8th
United States Circuit Court for further proceedings in the District
Court.  The Office of Administration made a note specifically for
this case in the State's June 30, 1992 Financial Statement, and
declined to determine the potential impact on such financial
statement.

Other Issuers of Bonds.  There are a number of state agencies,
instrumentalities and political subdivisions of the State that
issue Municipal Obligations, some of which may be conduit revenue
obligations payable from payments from private borrowers.  These
entities are subject to various economic risks and uncertainties,
and the credit quality of the securities issued by them may vary
considerably from the credit quality of obligations backed by the
full faith and credit of the State.


New Jersey Trusts -  Economic Factors


The portfolio of each New Jersey Trust consists primarily of
obligations issued by entities located in New Jersey.

New Jersey is the ninth largest state in population and the fifth
smallest in land area.  With an average of 1,050 people per square
mile, it is the most densely populated of all the states.  The
State's economic base is diversified, consisting of a variety of
manufacturing, construction and service industries, supplemented by
rural areas with selective commercial agriculture. Historically,
New Jersey's average per capita income has been well above the
national average, and in 1991 the State ranked second among the
states in per capita personal income ($25,666).
The New Jersey Economic Policy Council, a statutory arm of the New
Jersey Department of Commerce and Economic Development, has
reported in New Jersey Economic Indicators, a monthly publication
of the New Jersey Department of Labor, Division of Labor Market and
Demographic Research, that in 1988 and 1989 employment in New
Jersey's manufacturing sector failed to benefit from the export
boom experienced by many Midwest states and the State's service
sectors, which had fueled the State's prosperity since 1982, lost
momentum.  In the meantime, the prolonged fast growth in the State
in the mid-1980s resulted in a tight labor market situation, which
has led to relatively high wages and housing prices.  This means
that, while the incomes of New Jersey residents are relatively
high, the State's business sector has become more vulnerable to
competitive pressures.

The onset of the national recession (which officially began in July
1990 according to the National Bureau of Economic Research) caused
an acceleration of New Jersey's job losses in construction and
manufacturing.  In addition, the national recession caused an
employment downturn in such previously growing sectors as wholesale
trade, retail trade, finance, utilities and trucking and
warehousing.  Reflecting the downturn, the rate of unemployment in
the State rose from a low of 3.6% during the first quarter of 1989
to an estimated 6.9% in July 1992, which is slightly higher than
the national average of 6.8% in July 1993.  Economic recovery is
likely to be slow and uneven in New Jersey, with unemployment
receding at a correspondingly slow pace, due to the fact that some
sectors may lag due to continued excess capacity.  In addition,
employers even in rebounding sectors can be expected to remain
cautious about hiring until they become convinced that improved
business will be sustained.  Also, certain firms will continue to
merge or downsize to increase profitability.


Debt Service.  The primary method for State financing of capital
projects is through the sale of the general obligation bonds of the
State. These bonds are backed by the full faith and credit of the
State tax revenues and certain other fees are pledged to meet the
principal and interest payments and if provided, redemption premium
payments, if any, required to repay the bonds.  As of December 31,
1992, there was a total authorized bond indebtness of approximately
$8.98 billion, of which $3.6 billion was issued and outstanding,
$4.0 billion was retired (including bonds from which provision for
payment has been made through the sale and issuance of refunding
bonds) and $1.38 billion was unissued.  The debt service obligation
for such outstanding indebtness is $444.3 million for Fiscal Year
1993.

New Jersey's Budget and Appropriation System.  The State operates
on a fiscal year beginning July 1 and ending June 30.  At the end
of Fiscal Year 1989, there was a surplus in the State's general
fund (the fund into which all State revenues not otherwise
restricted by statute are deposited and from which appropriations
are made ) of $411.2 million. At the end of Fiscal Year 1990, there
was a surplus in the general fund of $1 million.  At the end of
Fiscal Year 1991, there was a surplus in the general fund of $1.4
million.  New Jersey closed its Fiscal Year 1992 with a surplus of
$760.8 million.  It is estimated that New Jersey closed its Fiscal
Year 1993 with a surplus of $385.8 million.

In order to provide additional revenues to balance future budgets,
to redistribute school aid and to contain real property taxes, on
June 27, 1990, and July 12, 1990, Governor Florio signed into law
legislation which was estimated to raise approximately $2.8 billion
in additional taxes (consisting of $1.5 billion in sales and use
taxes and $1.3 billion in income taxes), the biggest tax hike in
New Jersey history.  There can be no assurance that receipts and
collections of such taxes will meet such estimates.







 
 

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The first part of the tax hike took effect on July 1, 1990, with
the increase in the State's sales and use tax rate from
6% to 7% and the elimination of exemptions for certain products and
services not previously subject to the tax, such as telephone
calls, paper products (which has since been reinstated), soaps and
detergents, janitorial services, alcoholic beverages and
cigarettes.  At the time of enactment, it was projected that these
taxes would raise approximately $1.5 billion in additional revenue.
Projections and estimates of receipts from sales and use taxes,
however, have been subject to variance in recent fiscal years.


The second part of the tax hike took effect on January 1, 1991, in
the form of an increased state income tax on individuals.  At the
time of enactment, it was projected that this increase would raise
approximately $1.3 billion in additional income taxes to fund a new
school aid formula, a new homestead rebate program and state
assumption of welfare and social services costs. Projections and
estimates of receipts from income taxes, however, have also been
subject to variance in recent fiscal years.  Under the legislation,
income tax rates increased from their previous range of 2% to 3.5%
to a new range of 2% to 7%, with the higher rates applying to
married couples with incomes exceeding $70,000 who file joint
returns, and to individuals filing single returns with more that
$35,000.

The Florio administration has contended that the income tax package
will help reduce local property tax increases by providing more
state aid to municipalities.  Under the income tax legislation, the
State will assume approximately $289 million in social services
costs that previously were paid by counties and municipalities and
funded by property taxes. In addition, under the new formula for
funding school aid, an extra $1.1 billion is proposed to be sent by
the State to school districts beginning in 1991, thus reducing the
need for property tax increases to support education programs.

Effective July 1, 1992, the State's sales and use tax rate
decreased from 7% to 6%.

On June 29, 1993 Governor Florio signed the New Jersey
Legislature's $15.9 billion budget for Fiscal Year 1994.  The
balanced budget does not rely on any new taxes, college tuition
increases or any commuter fare increases, while providing a surplus
of more than $400 million.  Whether the State can achieve a
balanced budget depends on its ability to enact and implement
expenditure reductions and to collect estimated tax revenues.
Litigation.  The State is a party in numerous legal proceedings
pertaining to matters incidental to the performance of routine
governmental operations.  Such litigation includes, but is not
limited to, claims asserted against the State arising from alleged
torts, alleged breaches of contracts, condemnation proceedings and
other alleged violations of State and Federal laws.  Included in
the State's outstanding litigation are cases challenging the
following: the formula relating to State aid to public schools, the
method by which the State shares with its counties maintenance
recoveries and costs for residents in State institutions,
unreasonably low Medicaid payment rates for long-term facilities in
New Jersey, the obligation of counties to maintain Medicaid or
Medicare eligible residents of institutions and facilities for the
developmentally disabled, taxes paid into the Spill Compensation
Fund (a fund established to provide money for use by the State to
remediate hazardous waste sites and to compensate other persons for
damages incurred as a result of hazardous waste discharge) based on
Federal preemption, various provisions, and the constitutionality,
of the Fair Automobile Insurance Reform Act of 1990, the State's
method of funding the judicial system, certain provisions of New
Jersey's hospital rate-setting system and recently enacted
legislation calling for a revaluation of several New Jersey public
employee pension funds in order to provide additional revenues for
the State's general fund.  Adverse judgements in these and other
matters could have the potential for either a significant loss of
revenue or a significant loss of revenue or a significant
unanticipated expenditure by the State.

At any given time, there are various numbers of claims and cases
pending against the State, State agencies and employees seeking
recovery of monetary damages that are primarily paid out of the
fund created pursuant to the New Jersey Tort Claims Act.  In
addition, at any given time, there are various numbers of contract
claims against the State and State agencies seeking recovery of
monetary damages.  The State is unable to estimate its exposure for
these claims.


Debt Ratings.  For many years prior to 1991, both Moody's and
Standard and Poor's have rated New Jersey general obligation bonds
Aaa and AAA, respectively.  On July 3, 1991, however, Standard and
Poor's downgraded New Jersey general obligation bonds to AA+.  On
June 4, 1992, Standard and Poor's placed New Jersey general
obligation bonds on Credit Watch with negative implications, citing
as its principal reason for its caution the unexpected denial by
the Federal Government of New Jersey's request for $450 million in
retroactive Medicaid payments for psychiatric hospitals.  These
funds were critical to closing a $1 billion gap in the State's $15
billion budget for fiscal year 1992 which ended on June 30, 1992. 
Under New Jersey state law, the gap in the current budget must be
closed before the new budget year begins on July 1, 1992.  Standard
and Poor's suggested the State could close fiscal 1992's budget gap
and help fill fiscal 1993's hole by a reversion of $700 million of
pension contributions to its general fund under a proposal to
change the way the State calculates its pension liability.  On July
6, 1992, Standard and Poor's reaffirmed its AA+ rating for New
Jersey general obligation bonds and removed the debt from its
Credit Watch list, although it stated that New Jersey's long-term
financial outlook is negative.  Standard and Poor's was concerned
that the State was entering the 1993 fiscal year that began July 1,
1992, with a slim $26 million surplus and remained concerned about
whether the sagging State economy will recover quickly enough to
meet lawmakers' revenue projections.  It also remained concerned
about the recent federal ruling leaving in doubt how much the State
is due in retroactive Medicaid reimbursements and a ruling by a
federal judge, now on appeal, of the State's method for paying for
uninsured hospital patients.


On August 24, 1992, Moody's Investors Service, Inc. downgraded New
Jersey general obligation bonds to Aa1, stating that the reduction
reflected a developing pattern of reliance on nonrecurring measures
to achieve budgetary balance, four years of financial operations
marked by revenue shortfalls and operating deficits, and the
likelihood that serious financial pressures would persist.

Although New Jersey recently received $412 million in settlement of
its $450 million dispute with the federal government for
retroactive Medicaid reimbursements, neither Moody's Investors
Service, Inc. nor Standard and Poor's Corporation has revised its
rating for New Jersey general obligation bonds.

 
 

Page 37



New York Trusts - Economic Factors


The portfolio of each New York Trust includes primarily obligations
issued by New York State (the "State"), by its various public
bodies (the "Agencies"), and/or by other entities located within
the State, including the City of New York (the "City").

Some of the more significant events relating to the financial
situation in New York are summarized below.  This section provides
only a brief summary of the complex factors affecting the financial
situation in New York and is based in part on official statements
issued by, and on other information reported by, the State, the
City and the Agencies in connection with the issuance of their
respective securities.

There can be no assurance that future statewide or regional
economic difficulties, and the resulting impact on State or local
government finances generally, will not adversely affect the market
value of New York Municipal Obligations held in the portfolio of
the Trusts or the ability of particular obligors to make timely
payments of debt service on (or relating to) those obligations.

(1) The State:  The State has historically been one of the
wealthiest states in the nation.  For decades, however, the State
economy has grown more slowly than that of the nation as a whole,
gradually eroding the State's relative economic affluence. 
Statewide, urban centers have experienced significant changes
involving migration of the more affluent to the suburbs and an
influx of generally less affluent residents.  Regionally, the older
northeast cities have suffered because of the relative success that
the South and the West have had in attracting people and business. 
The City has also had to face greater competition as other major
cities have developed financial and business capabilities which
make them less dependent on the specialized services traditionally
available almost exclusively in the City.

The State has for many years had a very high state and local tax
burden relative to other states.  The burden of State and local
taxation, in combination with the many other causes of regional
economic dislocation, has contributed to the decisions of some
businesses and individuals to relocate outside, or not locate
within, the State.

Slowdown of Regional Economy.  A national recession commenced in
mid-1990.  The downturn continued throughout the State's 1990-91
fiscal year and was followed by a period of weak economic growth
during the 1991 calendar year. For calendar year 1992, the national
economy continued to recover, although at a rate below all post-war
recoveries. For calendar year 1993, the economy is expected to grow
faster than in 1992, but still at a very moderate rate, as compared
to other recoveries.  The national recession has been more severe
in the State because of factors such as a significant retrenchment
in the financial services industry, cutbacks in defense spending,
and an overbuilt real estate market.


1993-94 Fiscal Year.  On April 5, 1998, the State Legislature
approved a $32.08 billion budget.  Following enactment of the
budget the 1993-94 State Financial Plan was formulated on April 16,
1993.  This Plan projects General Fund receipts and transfers from
other funds at $32.4 billion and disbursements and transfers to
other funds at $32.3 billion. In comparison to the Governor's
recommended Executive Budget for the 1993-94 fiscal year, as
revised on February 18, 1993, the 1993-94 State Financial Plan
reflects increases in both receipts and disbursements in the
General Fund of $811 million.


While a portion of the increased receipts was the result of a $487
million increase in the State's 1992-93 positive year- end margin
at March 31, 1993 to $671 million, the balance of such increased
receipts is based upon (i) a projected $269 million increase in
receipts resulting from improved 1992-93 results and the
expectation of an improving economy, (ii) projected additional
payments of $200 million from the Federal government as
reimbursements for indigent medical care, (iii) the early payment
of $50 million of personal tax returns in 1992-93 which otherwise
would have been paid in 1993-94; offset by (iv) the State's
Legislature's failure to enact $195 million of additional revenue-
raising recommendations proposed by the Governor.  There can be no
assurance that all of the projected receipts referred to above will
be received.

Despite the $811 million increase in disbursements included in the
1993-94 State Financial Plan, a reduction in aid to some local
government units can be expected.  To offset a portion of such
reductions, the 1993-94 State Financial Plan contains a package of
mandate relief, cost containment and other proposals to reduce the
costs of many programs for which local governments provide funding. 
There can be no assurance, however, that localities that suffer
cuts will not be adversely affected, leading to further requests
for State financial assistance.

There can be no assurance that the State will not face substantial
potential budget gaps in the future resulting from a significant
disparity between tax revenues projected from a lower recurring
receipts base and the spending required to maintain State programs
at current levels.  To address any potential budgetary imbalance,
the State may need to take significant actions to align recurring
receipts and disbursements.

1992-93 Fiscal Year.  Before giving effect to a 1992-93 year-end
deposit to the refund reserve account of $671 million, General Fund
receipts in 1992-93 would have been $716 million higher than
originally projected.  This year-end deposit effectively reduced
1992-93 receipts by $671 million and made those receipts available
for 1993-94.

The State's favorable performance primarily resulted from income
tax collections that were $700 million higher than projected which
reflected both stronger economic activity and tax-induced one-time
acceleration of income into 1992. In other areas larger than
projected business tax collections and unbudgeted receipts offset
the loss of $200 million of anticipated Federal reimbursement and
losses of, or shortfalls in, other projected revenue sources.

For 1992-93 disbursements and transfers to other funds (including
the deposit to the refund reserve account discussed above) totalled
$30.8 billion, an increase of $45 million above projections in
April 1992.

 
 

Page 38



Fiscal year 1992-93 was the first time in four years that the State
did not incur a cash-basis operating deficit in the

General Fund requiring the issuance of deficit notes or other
bonds, spending cuts or other revenue raising measures.

Indebtness.  As of March 31, 1993, the total amount of long-term
State general obligation debt authorized but unissued stood at $2.4
billion.  As of the same date, the State had approximately $5.4
billion in general obligation bonds. The State issued $850 million
in tax and revenue anticipation notes ("TRANS") on June 21, 1991,
$531 million in 1992 Deficit Notes on March 30, 1992 and $2.3
billion in TRANS on April 28, 1992.

The State projects that its borrowings for capital purposes during
the State's 1993-94 fiscal year will consist of $460 million in
general obligation bonds and $140 million in new commercial paper
issuances.  In addition, the State expects to issue $140 million in
bonds for the purpose of redeeming outstanding bond anticipation
notes.  The Legislature has authorized the issuance of up to $65
million in certificates of participation during the State's 1993-94
fiscal year for personal and real property acquisitions.  The
projection of the State regarding its borrowings for the 1993-94
fiscal year may change if actual receipts fall short of State
projections or if other circumstances require.

In June 1990, legislation was enacted creating the New York Local
Government Assistance Corporation ("LGAC"), a public benefit
corporation empowered to issue long-term obligations to fund
certain payments to local governments traditionally funded through
the State's annual seasonal borrowing.  To date, LGAC has issued
bonds to provide net proceeds of $3.28 billion.  LGAC has been
authorized to issue additional bonds to provide net proceeds of
$703 million during the State's 1993-94 fiscal years.

Ratings.  The $850 million in TRANS issued by the State in April
1993 were rated SP-1 Plus by S&P on April 26, 1993, and MIG-1 by
Moody's on April 26, 1993 which represents the highest ratings
given by such agencies and the first time the State's TRANS have
received these ratings since its May 1989 TRANS issuance.  Both
agencies cited the State's improved fiscal position as a
significant factor in the upgrading of the April 1993 TRANS.

Moody's rating of the State's general obligation bonds stood at A
on April 26, 1993, and S&P's rating stood at A- with a stable
outlook, an improvement from S&P's negative outlook prior to April
1993.  Previously, Moody's lowered its rating to A on June 6, 1990,
its rating having been A1 since May 27, 1986.  S&P lowered its
rating from  A to A- on January 13, 1992.  S&P's previous ratings
were A from March 1990 to January 1992, AA- from August 1987 to
March 1990 and A+ from November 1982 to August 1987.

Moody's, in confirming its rating of the State's general obligation
bonds, and S&P, in improving its outlook on such bonds from
negative to stable, noted the State's improved fiscal condition and
reasonable revenue assumptions contained in the 1993-94 State
budget.

(2) The City and the Municipal Assistance Corporation ("MAC"):  The
City accounts for approximately 41% of the State's population and
personal income, and the City's financial health affects the State
in numerous ways.

In response to the City's fiscal crisis in 1975, the State took a
number of steps to assist the City in returning to fiscal
stability.  Among other actions, the State Legislature (i) created
MAC to assist with long-term financing for the City's short-term
debt and other cash requirements and (ii) created the State
Financial Control Board (the "Control Board") to review and approve
the City's budgets and City four-year financial plans (the
financial plans also apply to certain City- related pubic agencies
(the "Covered Organizations")).

In February 1975, the New York State Urban Development Corporation
("UDC"), which had approximately $1 billion of outstanding debt,
defaulted on certain of its short-term notes.  Shortly after the
UDC default, the City entered a period of financial crisis.  Both
the State Legislature and the United States Congress enacted
legislation in response to this crisis.  During 1975, the State
Legislature (i) created MAC to assist with long-term financing for
the City's short- term debt and other cash requirements and (ii)
created the State Financial Control Board (the "Control Board") to
review and approve the City's budgets and City four-year financial
plans (the financial plan also applies to certain City-related
public agencies (the "Covered Organizations").)


Over the past three years, the rate of economic growth in the City
has slowed substantially, and the City's economy is currently in
recession.  The Mayor is responsible for preparing the City's four-
year financial plan, including the City's current financial plan. 
The City Comptroller has issued reports concluding that the
recession of the City's economy will be more severe and last longer
than is assumed in the financial plan.

Fiscal Year 1993 and 1993-96 Financial Plan.  The City's 1993
fiscal year results are projected to be balanced in accordance with
generally accepted accounting principles ("GAAP").  The City was
required to close substantial budget gaps in its 1990, 1991 and
1992 fiscal years in order to maintain balanced operating results.

The City's modified Financial Plan dated February 9, 1993 covering
fiscal years 1993-1996 projects budget gaps for 1994 through 1996. 
The Office of the State Deputy Controller for the City of New York
has estimated that under the modified Financial Plan budget gaps
will be $102 million for fiscal year 1994, $196 million for fiscal
year 1995 and $354 million for fiscal year 1996, primarily due to
anticipated higher spending on labor costs.

However, the City's modified Plan is dependent upon a gap-closing
program, certain elements of which the staff of Control Board
identified on March 25, 1993 to be at risk due to projected levels
of State and federal aid and revenue and expenditures estimates
which may not be achievable.  The Control Board indicated that the
City's modified Financial Plan does not make progress towards
establishing a balanced budget process.  The Control Board's report
identified budget gap risks of $1.0 billion, $1.9 billion, $2.3
billion and $2.6 billion in fiscal years 1994 through 1997,
respectively.




 
 

Page 39


On June 3, 1993, the Mayor announced that State and federal aid for
Fiscal Year 1993-1994 would be $280 million less than projected and
that in order to balance the City's budget $176 million of
previously announced contingent budget cuts would be imposed.  The
Mayor indicated that further savings would entail serious
reductions in services. The State Comptroller on June 14, 1993
criticized efforts by the Mayor and City Council to balance the
City's budget which rely primarily on one-shot revenues.  The
Comptroller added that the City's budget should be based on
"recurring revenues that fund recurring expenditures."  Given the
foregoing factors, there can be no assurance that the City will
continue to maintain a balanced budget, or that it can maintain a
balanced budget without additional tax or other revenue increases
or reductions in City services, which could adversely affect the
City's economic base.

Pursuant to State Law, the City prepares a four-year annual
financial plan, which is reviewed and revised on a quarterly basis
and which includes the City's capital, revenue and expense
projections.  The City is required to submit its financial plans to
review bodies, including the Control Board.  If the City were to
experience certain adverse financial circumstances, including the
occurrence or the substantial likelihood and imminence of the
occurrence of an annual operating deficit of more than $100 million
or the loss of access to the public credit markets to satisfy the
City's capital and seasonal financial requirements, the Control
Board would be required by State law to exercise certain powers,
including prior approval of City financial plans, proposed
borrowings and certain contracts.

The City depends on the State for State aid both to enable the City
to balance its budget and to meet its cash requirements.  If the
State experiences revenue shortfalls or spending increases beyond
its projections during its 1993 fiscal year or subsequent years,
such developments could result in reductions in projected State aid
to the City.  In addition, there can be no assurance that State
budgets in future fiscal years will be adopted by the April 1
statutory deadline and that there will not be adverse effects on
the City's cash flow and additional City expenditures as a result
of such delays.


The City's projections set forth in its financial plan are based on
various assumptions and contingencies which are uncertain and which
may not materialize.  Changes in major assumptions could
significantly affect the City's ability to balance its budget as
required by State law and to meet its annual cash flow and
financing requirements.  Such assumptions and contingencies include
the timing of any regional and local economic recovery, the absence
of wage increases in excess of the increases assumed in its
financial plan, employment growth, provision of State and federal
aid and mandate relief, State legislative approval of further State
budgets, levels of education expenditures as may be required by
State law, adoption of future budgets by the New York City Council,
and approval by the Governor or the State Legislature and the
cooperation of MAC with respect to various other actions proposed
in such financial plan.

The City's ability to maintain a balanced operating budget is
dependent on whether it can implement necessary service and
personal reduction programs successfully.  As discussed above, the
City must identify additional expenditure reductions and revenue
sources to achieve balanced operating budgets for fiscal years 1994
and thereafter.  Any such proposed expenditure reductions will be
difficult to implement because of their size and the substantial
expenditure reductions already imposed on City operations in the
past two years.

Attaining a balanced budget is also dependent upon the City's
ability to market its securities successfully in the public credit
markets.  The City's financing program for fiscal years 1993
through 1996 contemplates issuance of $15.7 billion of general
obligation bonds primarily to reconstruct and rehabilitate the
City's infrastructure and physical assets and to make capital
investments. A significant portion of such bond financing is used
to reimburse the City's general fund for capital expenditures
already incurred.  In addition, the City issues revenue and tax
anticipation notes to finance its seasonal working capital
requirements.  The terms and success of projected public sales of
City general obligation bonds and notes will be subject to
prevailing market conditions at the time of the sale, and no
assurance can be given that the credit markets will absorb the
projected amounts of public bond and note sales. In addition,
future developments concerning the City and public discussion of
such developments, the City's future financial needs and other
issues may affect the market for outstanding City general
obligation bonds and notes.  If the City were unable to sell its
general obligation bonds and notes, it would be prevented from
meeting its planned operating and capital expenditures.


Fiscal Year 1992.  The City achieved balanced operating results as
reported in accordance with GAAP for the 1992 fiscal year.  During
the 1990 and 1991 fiscal years, the City implemented various
actions to offset a projected budget deficit of $3.2 billion for
the 1991 fiscal year, which resulted from declines in City revenue
sources and increased public assistance needs due to the recession. 
Such actions included $822 million of tax increases and substantial
expenditure reductions.

The City is a defendant in a significant number of lawsuits.  Such
litigation includes, but is not limited to, actions commenced and
claims asserted against the City arising out of alleged
constitutional violations, torts, breaches of contracts,  and other
violations of law and condemnation proceedings.  While the ultimate
outcome and fiscal impact, if any, of the proceedings and claims
are not currently predictable, adverse determinations in certain of
them might have a material adverse effect upon the City's ability
to carry out the Financial Plan.  As of June 30, 1992, legal claims
in excess of $341 billion were outstanding against the City for
which the City estimated its potential future liability to be $2.3
billion.


Ratings.  As of the date hereof, Moody's rating of the City's
general obligation bonds stood at Baal and S&P's rating stood at A-
.  On February 11, 1991, Moody's lowered its rating from A.

On March 30, 1993, in confirming the Baa1 rating, Moody's noted
that:


The financial plan for fiscal year 1994 and beyond shows an ongoing
imbalance between the City's expenditures and revenues.  The key
indication of this structural imbalance is not necessarily the
presence of sizable out-year budget gaps, but the recurring use of
one-shot actions to close gaps.  One-shots constitute a significant
share of the proposed gap-closing program for fiscal year 1994, and
they represent an even larger share of those measures which the
City seems reasonably certain to attain.  Several major elements of
the program, including certain state actions, federal counter
cyclical aid, and part of the City's tax package, remain uncertain. 
However, the gap-closing plan may be substantially altered when the
executive budget is offered later this spring.

 
Page 40



On March 30, 1993, S&P affirmed its A- rating with a negative
outlook, stating that:

The City's key credit factors are marked by a high and growing debt
burden, and taxation levels that are relatively high, but stable. 
The City's economy is broad-based and diverse, but currently is in
prolonged recession, with slow growth prospects for the foreseeable
future.

The rating outlook is negative, reflecting the continued fiscal
pressure facing the City, driven by continued weakness in the local
economy, rising spending pressures for education and labor costs of
city employees, and increasing costs associated with rising debt
for capital construction and repair.

The current financial plan for the City assumes substantial
increases in aid from national and state governments. Maintenance
of the current rating, and stabilization of the rating outlook,
will depend on the City's success in realizing budgetary aid from
these governments, or replacing those revenues with ongoing
revenue-raising measures or spending reductions under the City's
control.  However, increased reliance on non-recurring budget
balancing measures that would support current spending, but defer
budgetary gaps to future years, would be viewed by S&P as
detrimental to New York City's single A- rating.
Previously, Moody's had raised its rating to A in May, 1988, to
Baal in December, 1985, to Baa in November, 1983 and to Bal in
November, 1981.  S&P had raised its rating to A- in November, 1987,
to BBB+ in July 1985 and to BBB in March, 1981.

On May 9, 1990, Moody's revised downward its rating on outstanding
City revenue anticipation notes from MIG-1 to MIG-2 and rated the
$900 million Notes then being sold MIG-2.  On April 30, 1991
Moody's confirmed its MIG-2 rating for the outstanding revenue
anticipation notes and for the $1.25 billion in notes then being
sold.  On April 29, 1991, S&P revised downward its rating on City
revenue anticipation notes from SP-1 to SP-2.

As of December 31, 1992, the City and MAC had, respectively, $20.3
billion and $4.7 billion of outstanding net long- term indebtness.


(3) The State Agencies: Certain Agencies of the State have faced
substantial financial difficulties which could adversely affect the
ability of such Agencies to make payments of interest on, and
principal amounts of, their respective bonds. The difficulties have
in certain instances caused the State (under so-called "moral
obligation" provisions, which are non-binding statutory provisions
for State appropriations to maintain various debt service reserve
funds) to appropriate funds on behalf of the Agencies. Moreover, it
is expected that the problems faced by these Agencies will continue
and will require increasing amounts of State assistance in future
years. Failure of the State to appropriate necessary amounts or to
take other action to permit those Agencies having financial
difficulties to meet their obligations could result in a default by
one or more of the Agencies. Such default, if it were to occur,
would be likely to have a significant adverse effect on investor
confidence in, and therefore the market price of, obligations of
the defaulting Agencies.  In addition, any default in payment on
any general obligation of any Agency whose bonds contain a moral
obligation provision could constitute a failure of certain
conditions that must be satisfied in connection with Federal
guarantees of City and MAC obligations and could thus jeopardize
the City's long-term financing plans.

As of September 30, 1992, the State reported that there were
eighteen Agencies that each had outstanding debt of $100 million or
more.  These eighteen Agencies had an aggregate of $62.2 billion of
outstanding debt, including refunding bonds, of which the State was
obligated under lease-purchase, contractual obligation or moral
obligation provisions of $25.3 billion.


(4) State Litigation: The State is a defendant in numerous legal
proceedings pertaining to matters incidental to the performance of
routine governmental operations.  Such litigation includes, but is
not limited to, claims asserted against the State arising from
alleged torts, alleged breaches of contracts, condemnation
proceedings and other alleged violations of State and Federal laws. 
Included in the State's outstanding litigation are a number of
cases challenging the constitutionality or the adequacy and
effectiveness of a variety of significant social welfare programs
primarily involving the State's mental hygiene programs.  Adverse
judgments in these matters generally could result in injunctive
relief coupled with prospective changes in patient care which could
require substantial increased financing of the litigated programs
in the future.

The State is also engaged in a variety of claims wherein
significant monetary damages are sought.  Actions commenced by
several Indian nations claim that significant amounts of land were
unconstitutionally taken from the Indians in violation of various
treaties and agreements during the eighteenth and nineteenth
centuries.  The claimants seek recovery of approximately six
million acres of land as well as compensatory and punitive damages.

The U.S. Supreme Court on March 30, 1993, referred to a Special
Master for determination of damages an action by the State of
Delaware to recover certain unclaimed dividends, interest and other
distributions made by issuers of securities held by New York based-
brokers incorporated in Delaware.  (State of Delaware v. State of
New York.)  The State had taken such unclaimed property under its
Abandoned Property Law.  The State expects that it may pay a
significant amount in damages during fiscal year 1993-94 but it has
indicated that it has sufficient funds on hand to pay any such
award, including funds held in contingency reserves.  The State's
1993-94 Financial Plan includes the establishment of a $100 million
contingency reserve fund which would be available to fund such an
award which some reports have estimated at $100-$800 million.




 
 

Page 41



In Schulz v. State of New York, commenced May 24, 1993 ("Schulz
1993"), petitioners have challenged the
constitutionality of mass transportation bonding programs of the
New York State Thruway Authority and the Metropolitan
Transportation Authority.  On May 24, 1993, the Supreme Court,
Albany County, temporarily enjoined the State from implementing
those bonding programs.  In previous actions Mr. Schulz and others
have challenged on similar grounds bonding programs for the New
York State Urban Development Corporation and the New York Local
Government Assistance Corporation.  While there have been no
decisions on the merits in such previous actions, by an opinion
dated May 11, 1993. the New York Court of Appeals held in a
proceeding commenced on April 29, 1991 in the Supreme Court, Albany
County (Schulz V. State of New York), that petitioners had standing
as voters under the State Constitution to bring such action.


Petitioners in Schulz 1993 have asserted that issuance of bonds by
the two Authorities is subject to approval by statewide referendum. 
At this time there can be no forecast of the likelihood of success
on the merits by the petitioners, but a decision upholding this
constitutional challenge could restrict and limit the ability of
the State and its instrumentalities to borrow funds in the future. 
The State has not indicated that the temporary injunction issued by
the Supreme Court in this action will have any immediate impact on
its financial condition or interfere with projects requiring
immediate action.


Adverse development in the foregoing proceedings or new proceedings
could adversely affect the financial condition of the State in the
future.


(5) Other Municipalities:  Certain localities in addition to New
York City could have financial problems leading to requests for
additional State assistance.  The potential impact in the State of
such actions by localities is not included in projections of State
revenues and expenditures in the State's 1993-94 fiscal year.

Fiscal difficulties experienced by the City of Yonkers ("Yonkers")
resulted in the creation of the Financial Control Board for the
City of Yonkers (the "Yonkers Board") by the State in 1984.  The
Yonkers Board is charged with oversight of the fiscal affairs of
Yonkers.  Future actions taken by the Governor or the State
Legislature to assist Yonkers could result in allocation of State
resources in amounts that cannot yet be determined.

Municipalities and school districts have engaged in substantial
short-term and long-term borrowings.  In 1991, the total indebtness
of all localities in the State was approximately $31.6 billion, of
which $16.8 billion was debt of New York City (excluding $6.7
billion in MAC debt).  State law requires the Comptroller to review
and make recommendations concerning the budgets of those local
government units other than New York City authorized by State law
to issue debt to finance deficits during the period that such
deficit financing is outstanding.  Fifteen localities had
outstanding indebtness for State financing at the close of their
fiscal year ending 1991.  In 1992, an unusually large number of
local government units requested authorization for deficit
financings.  According to the Comptroller, ten local government
units have been authorized to issue deficit financing in the
aggregate amount of $131.1 million.

Certain proposed Federal expenditure reductions could reduce, or in
some cases eliminate, Federal funding of some local programs and
accordingly might impose substantial increased expenditure
requirements on affected localities.  If the State, New York City
or any of the Agencies were to suffer serious financial
difficulties jeopardizing their respective access to the public
credit markets, the marketability of notes and bonds issued by
localities within the State, including notes or bonds in the New
York Trusts, could be adversely affected. Localities also face
anticipated and potential problems resulting from certain pending
litigation, judicial decisions, and long-range economic trends. 
The longer-range potential problems of declining urban population,
increasing expenditures, and other economic trends could adversely
affect localities and require increasing State assistance in the
future.

North Carolina Trusts - Economic Factors


The economic profile of North Carolina consists primarily of
manufacturing, agriculture, tourism and mining.  The North Carolina
Employment Security Commission's preliminary figures indicate that
non-agriculture payroll employment accounted for approximately
147,800 jobs in December 1992, the largest segment of which was the
approximately 838,200 in manufacturing. During the period 1985 to
1990, per capita income in North Carolina grew from $11,669 to
approximately $16,266, an increase of 39.4%.

Agriculture is a basic element in the economy of North Carolina. 
Gross agricultural income in 1991 was $4.9 billion, which placed
North Carolina tenth in cash receipts in commodities.  A strong
agribusiness sector also supports farmers with farm inputs
(fertilizer, insecticide, pesticide and farm machinery) and
processing of commodities produced by farmers (vegetable canning
and cigarette manufacturing).

The North Carolina Department of Economic and Community
Development, Travel and Tourism Division has reported that in 1992
approximately $7.3 billion was spent on tourism in the State (up
12.3% from 1989).  The Department also estimated that approximately
252,000 people as of 1992 were employed in tourism-related jobs.

The North Carolina Employment Security Commission estimated the
North Carolina unemployment rate in December 1992 to be 5.3% of the
labor force (not seasonally adjusted) and 5.5% (seasonally
adjusted), as compared with an unemployment rate nationwide of 7.0%
(not seasonally adjusted) and 7.3% (seasonally adjusted).
General obligations of the State are currently rated AAA and Aaa by
Standard & Poor's and Moody's, respectively. There can be no
assurance that the economic condition on which these ratings, or
the ratings of the Bonds in a North Carolina Trust, are based will
continue or that particular bond issues may not be adversely
affected by changes in economic or political conditions, by
uncertainties peculiar to the issuers thereof or the revenue
sources from which they are to be paid.  The factual information
provided above was derived from publications of various State
departments or agencies and has not been independently verified. 
Investors are encouraged to consult the Schedule of Investments in
Part Two for the appropriate North Carolina Trust and their own
investment advisers regarding the merits of particular Bonds in the
portfolio of such Trust.

 
 

Page 42



Ohio Trusts - Economic Factors
Each Ohio Trust is susceptible to general or particular political,
economic or regulatory factors that may affect issuers of Ohio
Obligations.  The following information constitutes only a brief
summary of some of the many complex factors that may affect the
financial situation of issuers in Ohio, and is not applicable to
"conduit" obligations on which the public issuer itself has no
financial responsibility.  This information is derived from
official statements of certain Ohio issuers published in connection
with their issuance of securities and from other publicly available
documents, and is believed to be accurate.  No independent
verification has been made of any of the following information.

The creditworthiness of Ohio Obligations of local issuers is
generally unrelated to that of obligations issued by the State
itself, and the State has no responsibility to make payments on
those local obligations.  There may be specific factors that at
particular times apply in connection with investment in particular
Ohio Obligations or in those obligations of particular Ohio
issuers. It is possible that the investment may be in particular
Ohio Obligations or in those of particular issuers as to which
those factors apply. However, the information below is intended
only as a general summary, and is not intended as a discussion of
any specific factors that may affect any particular obligation or
issuer.


When the timely payment of principal of an interest on Ohio
obligations has been guaranteed by bond insurance purchased by the
issuers, the Trust or other parties, the timely payment of debt
service on Ohio Obligations so insured may not be subject to the
factors referred to in this section of the Prospectus.

Ohio is the seventh most populous state. Its 1990 census count of
10,847,000 indicates a 0.5% population increase from 1980.


While diversifying more into the service and other non-
manufacturing areas, the Ohio economy continues to rely in part on
durable goods manufacturing largely concentrated in motor vehicles
and equipment, steel, rubber products and household appliances.  As
a result, general economic activity, as in many other industrially-
developed states, tends to be more cyclical than in some other
states and in the nation as a whole.  Agriculture is an important
segment of the economy, with over half the State's area devoted to
farming and approximately 20% of total employment in agribusiness.


In prior years, the State's overall unemployment rate was commonly
somewhat higher that the national figure.  For example, the
reported 1990 average monthly State rate was 5.7%, compared to the
national figure of 5.5%. However, for both 1991 and 1992 the State
rates (6.4% and 7.2%) were below the national rates (6.7% and
7.4%).  The unemployment rate, and its effects, vary among
particular geographic areas of the State.

There can be no assurance that future national, regional or state-
wide economic difficulties, and the resulting impact on State or
local government finances generally, will not adversely affect the
market value of Ohio Obligations held in the portfolio of the
Trusts or the ability of particular obligors to make timely
payments of debt service on (or lease payments relating to) those
obligations.

The State operates on the basis of a fiscal biennium for its
appropriations and expenditures, and is precluded by law from
ending its July 1 to June 30 fiscal year ("FY") or fiscal biennium
in a deficit position.  Most State operations are financed through
the General Revenue Fund ("GRF"), for which personal income and
sales-use taxes are the major sources.  Growth and depletion of GRF
ending fund balances show a consistent pattern related to national
economic conditions, with the ending FY balance reduced during less
favorable and increased during more favorable economic periods. 
The State has well-established procedures for, and has timely
taken, necessary actions to ensure resource/expenditure balances
during less favorable economic periods. These procedures include
general and selected reductions in appropriations spending.

Key biennium-ending fund balances at June 30, 1989 were $475.1
million in the GRF and $353 million in the Budget Stabilization
Fund ("BSF", a cash and budgetary management fund).  In FY's
1990-91 necessary corrective steps were taken to respond to lower
receipts and higher expenditures in certain categories than earlier
estimated.  Those steps included selected reductions in
appropriations spending and the transfer of $64 million from the
BSF to the GRF.  The State reported June 30, 1991 ending fund
balances of $135.3 million (GRF) and $300 million (BSF).

To allow time to resolve certain Senate and House budget
differences for the latest complete biennium (that began July 1,
1991), an interim appropriations act was enacted effective July 1,
1991; it included State debt service and lease rental GRF
appropriations for the entire 1992-93 biennium, while continuing
most other appropriations for a month. The general appropriations
act for the entire biennium was passed on July 11, 1991 and signed
by the Governor. Pursuant to it, $200 million was transferred from
the BSF to the GRF 1992.

Based on the updated FY financial results and economic forecast in
the course of FY 1992, both in light of the continuing uncertain
nationwide economic situation, there was projected, and timely
addressed a FY 1992 imbalance in GRF resources and expenditures. 
GRF receipts significantly below original forecasts resulted
primarily from lower collections of certain taxes, particularly
sales and use taxes.  Higher expenditure levels resulted from
higher spending in certain areas, particularly human services,
including Medicaid.  As an initial action, the Governor ordered
most State agencies to reduce GRF spending in the last six months
of FY 1992 by a total of approximately $184 million.  As authorized
by the General Assembly, the $100.4 million BSF balance, and
additional amounts from certain other funds, GRF, and adjustments
in the timing of certain tax payments made.  Other administrative
revenue and spending actions resolved the remaining GRF imbalance.


A significant GRF shortfall (approximately $520 million) was then
projected for FY 1993.  It was addressed by appropriate legislative
and administrative actions.  As a first step the Governor ordered,
effective July 1, 1992, $300 million in selected GRF spending
reductions.  Executive and legislative action in December 1992, a
combination of tax revisions and additional appropriations spending
reductions, resulted in a balance of GRF resources and expenditures
in the 1992-93 biennium.  OBM has reported an ending GRF cash
balance at June 30, 1993 of approximately $111 million.


 
 

Page 43


No spending reductions were applied to appropriations needed for
debt service or lease rentals on any State obligations.

The GRF appropriations act for the current 1994-95 biennium was
passed and signed by the Governor on July 1, 1993. It includes all
necessary GRF appropriations for biennial State debt service and
lease rental payments.

The State's incurrence or assumption of debt without a vote of the
people is, with limited exceptions, prohibited by current
provisions.  The State may incur debt limited in amount to $750,000
to cover casual deficits or failures in revenues or to meet
expenses not otherwise provided for.  The Constitution expressly
precludes the State from assuming the debts of any local government
or corporation.  An exception is made in both cases for any debt
incurred to repel invasion, suppress insurrection, or defend the
State in war.

By 12 constitutional amendments, the last adopted in 1987, Ohio
voters have authorized the incurrence of State debt to the payment
of which taxes or excises were pledged.  At July 1, 1993, $521
million (excluding certain highway bonds payable primarily from
highway use charges) of this debt was outstanding. The only such
State debt then still authorized to be incurred were portions of
the highway bonds, and the following: (a) up to $100 million of
obligations for coal research and development may be outstanding at
any time ($51 million outstanding); and (b) of $1.2 billion of
obligations for local infrastructure improvements, no more than
$120 million may be issued in any calendar year ($432.5 million
outstanding, $720 million remaining to be issued).

The Constitution also authorizes the issuance of State obligations
for certain purposes, the owners of which do not have the right to
have excises or taxes levied to pay debt service.  Those special
obligations include obligations issued by the Ohio Public
Facilities Commission and the Ohio Building Authority $3.95 billion
of which were outstanding at July 1, 1993.


A 1990 constitutional amendment authorizes greater State and
political subdivision participation including financing in the
provision of housing.  The General Assembly may for that purpose
authorize the issuance of State obligations secured by a pledge of
all or such portion as it authorizes of State revenues or receipts
(but not by a pledge of the State's full faith and credit).

The General Assembly has placed on the November 1993 ballot a
proposed constitutional amendment authorizing $200 million in State
general obligation bonds to be outstanding for parks and
recreational purposes (no more than $50 million to be issued in any
one year).

State and local agencies issue revenue obligations that are payable
from revenues from or relating to certain facilities (but not from
taxes).  By judicial interpretation, these obligations are not
"debt" within constitutional provisions.  In general, payment
obligations under lease-purchase agreements of Ohio public agencies
(in which certificates of participation may be issued) are limited
in duration to the agency's fiscal period, and are renewable only
upon appropriations being made available for the subsequent fiscal
period.

Local school districts in Ohio receive a major portion (on a state-
wide basis, recently approximately 46%) of their operating moneys
from State subsidies, but are dependent on local property taxes,
and in 96 districts from voter authorized income taxes, for
significant portions of their budgets. Litigation, similar to that
in other states, is pending questioning the constitutionality of
Ohio's system of school funding.  A small number of the State's 612
local school districts have in any year required special assistance
to avoid year-end deficits.  A current program provides for school
district cash need borrowing directly from commercial lenders, with
diversion of State subsidy distributions to repayment if needed; in
FY 1991 under this program, 26 districts borrowed a total of $41.8
million (including over $27 million by one district), and in FY
1992 borrowings totalled $68.6 million (including $46.6 million for
one district). FY 1993 loan approvals totalled $109 million for 77
districts (including $75 million for one district); not all loans
approved are actually taken down.

Ohio's 943 incorporated cities and villages rely primarily on
property and municipal income taxes for their operations, and, with
other local governments, receive local government support and
property tax relief moneys distributed by the State.  For those few
municipalities that on occasion have faced significant financial
problems, there are statutory procedures for a joint State/local
commission to monitor the municipality's fiscal affairs, and for
development of a financial plan to eliminate deficits and cure any
defaults. Since inception in 1979, these procedures have been
applied to 22 cities and villages, for 16 of them the fiscal
situation was resolved and the procedures terminated.

At present the State itself does not levy any ad valorem taxes on
real or tangible personal property.  Those taxes are levied by
political subdivisions and other local taxing districts.  The
Constitution has since 1934 limited the amount of the aggregate
levy (including a levy for unvoted general obligations) of property
taxes by all overlapping subdivisions, without a vote of the
electors or a municipal charter provision, to 1% of true value in
money, and statutes limit the amount of the aggregate levy to 10
mills per $1 of assessed valuation that are (commonly referred to
as the "ten-mill limitation").  Voted general obligations of
subdivisions are payable from property taxes that are unlimited as
to amount or rate.
 
 
Oregon Trusts - Economic Factors


The portfolio of each Oregon Trust consists primarily of
obligations issued by entities located in Oregon.

Article IX, Section 2 of the Constitution of Oregon provides that
"The Legislative Assembly shall provide  for raising revenues
sufficiently to defray the expenses of the State for each fiscal
year, and also a sufficient sum to pay the interest on the State
debt, if there be any."   Article IX, Section 6 of the Constitution
of Oregon further provides that "whenever the expense, of any
fiscal year, shall exceed the income, the Legislative Assembly
shall provide for levying a tax, for the ensuing fiscal year,
sufficient, with other sources of income, to pay the deficiency, as
well as the estimated expenses of the ensuing fiscal year."  These
balanced budget constraints limit the State from operating with a
deficiency.  Despite the passage of a properly tax limitation
measure and the State's continuing transition from dependence on
the declining

 
 

Page 44

forest products industry, currently the State of Oregon does not
have a deficit.  The State's budgetary estimates are updated
quarterly by the Executive Department.  In the event the
forecasting process  predicts a shortfall of revenue, there are a
number of legislative and executive mechanisms for preventing an
overall deficit from occurring or continuing.


Pennsylvania Trusts - Economic Factors


Risk Factors.  Prospective investors should consider the financial
difficulties and pressures which the Commonwealth of Pennsylvania
and certain of its municipal subdivisions have undergone.  Both the
Commonwealth and the City of Philadelphia are experiencing
significant revenue shortfalls.  There can be no assurance that the
Commonwealth will not experience a further decline in economic
conditions or that portions of the Pennsylvania Obligations
purchased by the Pennsylvania Trusts will not be affected by such
a decline.  Without intending to be complete, the following briefly
summarizes some of these difficulties and the current financial
situation, as well as some of the complex factors affecting the
financial situation in the Commonwealth.  It is derived from
sources that are generally available to investors and is based in
part on information obtained from various agencies in Pennsylvania. 
No independent verification has been made of the following
information.


State Economy.  Pennsylvania has been historically identified as a
heavy industry state although that reputation has changed recently
as the industrial composition of the Commonwealth diversified when
the coal, steel and railroad industries began to decline.  The
major new sources of growth in Pennsylvania are in the service
sector, including trade, medical and health services, education and
financial institutions.  Pennsylvania's agricultural industries are
also an important component of the Commonwealth's economic
structure, accounting for more than $3.6 billion in crop and
livestock products annually while agribusiness and food related
industries support $38 billion in economic activity annually.


Non-agricultural employment within the Commonwealth has increased
steadily from 1984 to its 1992 level of 81.3 percent of total
employment.  The growth in employment experienced in Pennsylvania
is comparable to the nationwide growth in employment which has
occurred during this period.  In 1992, manufacturing employment
represented 18.7 percent of all non-agricultural employment in
Pennsylvania while the services sector accounted for 29.3 percent
and the trade sector accounted for 22.7 percent.

The Commonwealth is currently facing a slowdown in its economy. 
Moreover, economic strengths and weaknesses vary in  different
parts of the Commonwealth. In general, heavy industry and
manufacturing have been facing increasing competition from foreign
producers.  During 1992, the annual average unemployment rate in
Pennsylvania was 7.5% compared to 7.4% for the United States.  For
June 1993 the unadjusted unemployment rate was 6.8% in Pennsylvania
and 7.1% in the United States, while the seasonally adjusted
unemployment rate for the Commonwealth was 6.9% compared to 7.0%
for the United States.

State Budget.  The Commonwealth operates under an annual budget
which is formulated and submitted for legislative approval by the
Governor each February.  The Pennsylvania Constitution requires
that the Governor's budget proposal consist of three parts: (i) a
balanced operating budget setting forth proposed expenditures and
estimated revenues from all sources and, if estimated revenues and
available surplus are less than proposed expenditures, recommending
specific additional sources of revenue sufficient to pay the
deficiency; (ii) a capital budget setting forth proposed
expenditures to be financed from the proceeds of obligations of the
Commonwealth or its agencies or from operating funds; and (iii) a
financial plan for not less than the succeeding five fiscal years,
which includes for each year projected operating expenditures and
estimated revenues and projected expenditures for capital projects. 
The General Assembly may add, change or delete any items in the
budget prepared by the Governor, but the Governor retains veto
power over the individual appropriations passed by the legislature.
The Commonwealth's fiscal year begins on July 1 and ends on June
30.


All funds received by the Commonwealth are subject to appropriation
in specific amounts by the General Assembly or by executive
authorization by the Governor. Total appropriations enacted by the
General Assembly may not exceed the ensuing year's estimated
revenues, plus (less) the unappropriated fund balance (deficit) of
the preceding year, except for constitutionally authorized debt
service payments.  Appropriations from the principal operating
funds of the Commonwealth (the General Fund, the Motor License Fund
and the State Lottery Fund) are generally made for one fiscal year
and are returned to the unappropriated surplus of the fund if not
spent or encumbered by the end of the fiscal year.  The
Constitution specifies that a surplus of operating funds at the end
of a fiscal year must be appropriated for the ensuing year.


Pennsylvania uses the "fund" method of accounting for receipts and
disbursements.  For purposes of government accounting, a "fund" is
an independent fiscal and accounting entity with a self-balancing
set of accounts, recording cash and/or other resources together
with all related liabilities and equities.  In the Commonwealth,
over 120 funds have been  established by legislative enactment or
in certain cases by administrative action for the purpose of
recording the receipts and disbursement of moneys received by the
Commonwealth.  Annual budgets are adopted each fiscal year for the
principal operating funds of the Commonwealth and several other
special revenue funds. Expenditures and encumbrances against these
funds may only be made pursuant to appropriation measures enacted
by the General Assembly and approved by the Governor.  The General
Fund, the Commonwealth's largest fund, receives all tax revenues,
non-tax revenues and federal grants and entitlements that are not
specified by law to be deposited elsewhere. The majority of the
Commonwealth's operating and administrative expenses are payable
from the General Fund.  Debt service on all bond indebtedness of
the  Commonwealth, except that issued for highway purposes or for
the benefit of other special revenue funds, is payable from the
General Fund.

Financial information for the principal operating funds of the
Commonwealth are maintained on a budgetary basis of accounting,
which is used for the purpose of insuring compliance with the
enacted operating budget.  The Commonwealth also prepares annual
financial statements in accordance with generally accepted
accounting principles ("GAAP").  Budgetary basis financial reports
are based on a modified cash basis of accounting as opposed to a
modified accrual basis of accounting prescribed by GAAP.
 
Page 45



Financial information as adjusted at fiscal year-end to reflect
appropriate accruals for financial reporting in conformity
with GAAP.


Recent Financial Results.  At the end of fiscal 1990 and fiscal
1991, the unreserved-undesignated fund balance was a negative
$205.8 million and a negative $1.2 billion, respectively, a drop of
$579.6 million and $983.4 million, respectively, from the year-
earlier amounts.  The decline in the fiscal 1990 unreserved-
undesignated fund balance for government fund types was largely the
result of a $718.2  million operating deficit in the General Fund,
which caused the total fund balance of the General Fund to fall to
a negative $119.8 million at June 30, 1990. The decline in the
fiscal 1991 unreserved-undesignated fund balance was principally
the result of operating deficits of $1.1 billion and $66.2 million,
respectively, in the General Fund and the State Lottery Fund.

Rising demands on state programs caused by the economic recession,
particularly for medical assistance and cash assistance programs,
and the increased costs of special education programs and
correction facilities and programs, contributed to increased
expenditures in fiscal 1991, while tax revenues for the 1991 fiscal
year were severely affected by the economic recession.  Total
corporation tax receipts and sales and use tax receipts during
fiscal 1991 were, respectively, 7.3 percent and 0.9 percent below
amounts collected during fiscal 1990. Personal income tax receipts
also were affected by the recession, but not to the extent of the
other major General Fund taxes, increasing only 2.0 percent over
fiscal 1990 collections.


The Commonwealth experienced a $454 million general fund deficit as
of the end of its 1991 fiscal year.  The deficit reflected below-
estimate economic activity and growth rates of economic indicators
and total tax revenue shortfalls of $817 million (4.1 percent)
below those assumed in the enacted budget.  Economic conditions
also affected expenditure trends during the 1991 fiscal year, with
expenditures for medical assistance costs and other human service
programs running $512 million above estimates assumed in the 1991
budget.  In January 1991, the Commonwealth initiated a number of
cost-saving measures, including the firing of 2,000 state
employees, deferral of paychecks and reduction of funds to state
universities, which resulted in approximately $871 million cost
savings.  In addition, the Commonwealth issued $1.4 billion of tax
anticipation notes for the account of General Fund for fiscal 1991.

Total general fund revenues for fiscal 1992 were $14.5 billion,
which is approximately 22 percent higher than fiscal 1991 revenues
of $11.9 billion due in large part to tax increases.  The increased
revenues funded substantial increases in education, social services
and corrections programs.  As a result of the tax increases and
certain appropriation lapses, fiscal 1992 ended with an $8.8
million surplus after having started the year with an
unappropriated balance deficit of $453.6 million.


Fiscal 1993 Budget.  On June 30, 1992, the Pennsylvania legislature
presented the Governor with a $14.1 billion general fund budget for
the 1993 fiscal year, which began on July 1, 1992.  Before signing
the budget, the Governor deleted approximately $73 million in
certain state expenditures such as aid to county courts and
district justices.  As a result, the budget for the 1993 fiscal
year is approximately $14.1 billion, which is approximately $105
million more than the fiscal 1992 budget.  On February 9, 1993, the
Governor announced that he anticipated that the 1993 budget would
be in balance at the end of the fiscal year.

Fiscal 1994 Budget.  On May 28, 1993, the Governor signed a $14.9
billion general fund budget, an increase of approximately five
percent from the fiscal 1993 budget.  A substantial amount of the
increase is targeted for medical assistance programs and prisons.

Debt Limits and Outstanding Debt.  The Constitution of Pennsylvania
permits the issuance of the following types of debt: (i) debt to
suppress insurrection or rehabilitate areas affected by disaster;
(ii) electorate approved debt; (iii) debt for capital projects
subject to an aggregate debt limit of 1.75 times the annual average
tax revenues of the preceding five fiscal years; and (iv) tax
anticipation notes payable in the fiscal year of issuance.

Under the Pennsylvania Fiscal Code, the Auditor General is required
annually to certify to the Governor and the General Assembly
certain information regarding the Commonwealth's indebtness. 
According to the most recent Auditor General certificate, the
average annual tax revenues deposited in all funds in the five
fiscal years ended June 30, 1992 was $14.5 billion, and therefore,
the net debt limitation for the 1993 fiscal year was $25.3 billion.
Outstanding net debt totaled $4.1 billion at June 30, 1992, a
decrease of $.08 million from June 30, 1991.  At February 28, 1993,
the amount of debt authorized by law to be issued, but not yet
incurred, was $14.6 billion.

Debt Ratings.  All outstanding general obligation bonds of the
Commonwealth are rated AA- by S&P and A1 by Moody's.


City of Philadelphia.  The City of Philadelphia experienced a
series of general fund deficits for fiscal years 1988 through 1991
which have culminated in the City's present serious financial
difficulties.  In its 1992 Comprehensive Annual Financial Report,
Philadelphia reported a cumulative general fund deficit of $71.4
million for fiscal year 1992.


In June 1991, the Pennsylvania legislature established the
Pennsylvania Intergovernmental Cooperation Authority ("PICA"), a
five-member board which will oversee the fiscal affairs of the City
of Philadelphia.  The Legislation empowers PICA to issue notes and
bonds on behalf of Philadelphia, and also authorizes Philadelphia
to levy a one- percent sales tax the proceeds of which would be
used to pay off the bonds.  In return for PICA's fiscal assistance,
Philadelphia was required, among other things, to establish a five-
year financial plan that includes balanced annual budgets.  Under
the legislation, if Philadelphia does not comply, PICA may withhold
bond revenues and certain state funding.


In May, 1992, the city counsel of Philadelphia approved the Mayor's
five-year plan and adopted a fiscal 1993 budget. On June 5, 1992,
the authority sold approximately $480 million in bonds at yields
ranging from 5.25 percent to 6.88 percent.


 
 

Page 46



The proceeds of the bonds will be used to cover shortfalls
accumulated over the last four fiscal years, projected deficits
for fiscal year 1992 and fiscal year 1993, construction projects
and other capital expenditures.  In accordance with the enabling
legislation, the authority has been guaranteed a percentage of the
wage tax revenue expected to be collected from Philadelphia
residents to permit repayment of the bonds.  S&P has assigned an A-
rating to PICA's bonds and Moody's rated the bonds at Baa. In
connection with PICA's issuance of the bonds, S&P raised the rating
on Philadelphia's general obligation to B.  Moody's rating is
currently Ba.

In January 1993, Philadelphia anticipated a cumulative general fund
budget deficit of $57 million for the 1993 fiscal year.  In
response to the anticipated deficit, the Mayor unveiled a financial
plan eliminating the budget deficit for the 1993 budget year
through significant service cuts that included a plan to privatize
certain city provided services. Philadelphia currently anticipates
a balanced general fund budget for the 1993 budget year due to an
upsurge in tax receipts, cost-cutting and privatization of city
provided services and additional PICA borrowings.

Litigation.  The Commonwealth is a party to numerous lawsuits in
which an adverse final decision could materially affect the
Commonwealth's governmental operations and consequently its ability
to pay debt service on its obligations. The Commonwealth also faces
tort claims made possible by the limited waiver of sovereign
immunity effected by Act 152, approved September 28, 1978.


Tennessee Trusts - Economic Factors


The following brief summary regarding the economy of Tennessee is
based upon information drawn from publicly available sources and is
included for the purpose of providing the information about general
economic conditions that may or may not affect issuers of the
Tennessee obligations.  The Sponsor has not independently verified
any of the information contained in such publicly available
documents.

The State Constitution of Tennessee requires a balanced budget.  No
legal authority exists for deficit spending for operating purposes
beyond the end of a fiscal year.  Tennessee law permits tax
anticipation borrowing but any amount borrowed must be repaid
during the fiscal year for which the borrowing was done. Tennessee
has not issued any debt for operating purposes during recent years
with the exception of some advances which were made from the
Federal Unemployment Trust Fund in 1984.  No such advances are now
outstanding nor is borrowing of any type for operating purposes
contemplated.


The State Constitution of Tennessee forbids the expenditure of the
proceeds of any debt obligation for a purpose other than the
purpose for which it was authorized by statute.  Under State law,
the term of bonds authorized  and issued cannot exceed the expected
life of the projects being financed. Furthermore, the amount of a
debt obligation cannot exceed the amount authorized by the General
Assembly.

The State and Its Economy.  As required by law, the legislature
enacted a balanced budget for fiscal year 1991-92. Through
December, 1991, general fund tax revenues were undercollected by
$19.9 million.  The revenue estimates on which the budget as
adopted was based were revised to reflect actual collections. 
Subsequently, revenue collections improved and the original budget
estimates for the year were achieved.

In a special session in January of fiscal year 1992-93, the General
Assembly failed to enact the Governor's proposals for tax reform
and education reform. In the regular session the legislature
enacted education reform, adopted a one-half percent sales tax
increase (effective April 1, 1992 through June 30, 1993) and raised
other taxes and fees effective beginning fiscal year ending June
30, 1992 for a total revenue increase of $275 million.  A new 6.75%
tax on services was enacted which enables the State to continue
funding the Medicaid program and avoid major reductions in provider
payments.


The revised estimate of general sales tax collections for the
fiscal year ending June 30, 1992 assumes 3% growth over the
previous fiscal year; a 3% growth has been estimated for fiscal
year 1992-93.  Collections grew 5.49% through April 1992.  The
revised estimates for franchise and excise tax collections assume
a 2.06% decline for the fiscal year ending June 30, 1992, without
certain one-time revenue collections; the assumption for the fiscal
year 1992-93 is 4.3% growth.  Excluding one-time collections of
nearly $40 million, franchise and excise tax collections increased
by 0.6% through April, 1992.

The Tennessee economy generally tends to rise and fall in a roughly
parallel manner with the U.S. economy, although in recent years
Tennessee has experienced less economic growth than the U.S.
average.  The Tennessee economy entered a recession in the last
half of 1990 as the Tennessee index of leading economic indicators
fell throughout the period.  Tennessee nominal gross State product
rose at a lower rate for 1990 and 1991 than the average annual
rates for the five year period 1985-89.


Tennessee's population increased 6.2% from 1980 to 1990, less than
the national increase of 10.2% for the same period.  Throughout
1990, seasonally adjusted unemployment rates were at or slightly
below the national average. Beginning in the fourth quarter of that
year, however, initial unemployment claims showed substantial
monthly increases.  In December, unemployment stood at 6.3%,
slightly above the national rate of 6.1%.  In February 1991, the
unemployment rate rose to 6.8%.  By November 1992, Tennessee
unemployment had decreased to 5.7%, as compared to the national
rate of 7.3% and has remained below the national rate throughout
the first quarter of 1993.  The unemployment rate for December 1992
stood at 6.1% while the national rate was 7.3%.  The rates for
January, February and March of 1993 stood at 6.6%, 5.9% and 6.2%,
respectively, as compared to the national rates of 7.1%, 7.0% and
7.0%.  A decline in manufacturing employment has been partly offset
by moderate growth in service sector employment.





 
 

Page 47



Historically, the Tennessee economy has been characterized by a
greater concentration in manufacturing employment than the U.S. as
a whole.  While in recent years Tennessee has followed the national
shift away from manufacturing toward service sector employment,
manufacturing continues to be the largest source of non-
agricultural employment in the state, and the state continues to
attract new manufacturing facilities.  In addition to the General
Motors Saturn project and a major Nissan facility built in
Tennessee in the 1980's, in January 1991, Nissan announced plans to
develop a $600 million engine and component parts manufacturing
facility in Decherd, Tennessee.  However, total planned investment
in Tennessee's manufacturing and service sectors has declined in
recent years.

Non-agricultural employment in Tennessee is relatively uniformly
diversified, with approximately 24% in the manufacturing sector,
approximately 19.4% in the wholesale and retail trade sector,
approximately 16.8% in the service sector and approximately 12% in
government.

Bond Ratings.  Tennessee's general obligation bonds are rated Aaa
by Moody's and AA+ by Standard & Poor's. There can be no assurance
that the economic conditions on which these ratings are based will
continue or that particular obligations contained in the Portfolio
of a Tennessee Trust may not be adversely affected by changes in
economic or political conditions.


Legal Proceedings.  Tennessee is involved in certain legal
proceedings, which, if decided against the State, may require the
State to make significant future expenditures or may substantially
impair revenues.  The Tennessee Supreme Court currently is
reviewing a case in which the lower court found the Tennessee
Department of Revenue improperly defined non-business earnings for
tax purposes.  Although this case involves only $925,000, its
outcome could affect at least five other cases and could have a
detrimental impact to Tennessee's revenue base.  If the case is
affirmed, Tennessee could lose an estimated $80 million to $100
million a year in corporate income taxes.  The Tennessee Supreme
Court also may hear a similar case in which the lower court found
the taxpayer's partial sale of business holdings resulted in
taxable business income.  A ruling in favor of the taxpayer could
result in a $10 million tax refund.

Two other tax related cases could also affect the State's financial
condition. A recently filed class-action suit seeks damages in
excess of $25 million for the allegedly illegal collection of sales
taxes paid on extended warranty contracts on motor vehicles.  In
addition, a coalition of more than a dozen hospitals is considering
a class-action suit to challenge the legality of Tennessee's
Medicaid service tax.  Tennessee's hospitals currently pay
approximately $504 million dollars in special taxes.


The foregoing information does not purport to be a complete or
exhaustive description of all conditions to which the issuers of
Bonds in a Tennessee Trust are subject.  Many factors including
national economic, social and environmental policies and
conditions, which are not within the control of the issuers of
Bonds, could affect or could have an adverse impact on the
financial condition of the State and various agencies and political
subdivisions located in the State. Since certain Bonds in the
Tennessee Trusts (other than general obligation bonds issued by the
State) are payable from revenue derived from a specific source or
authority, the impact of a pronounced decline in the national
economy or difficulties in significant industries within the State
could result in a decrease in the amount of revenues realized from
such source or by such authority and thus adversely affect the
ability of the respective issuers of the Bonds in the Tennessee
Trusts to pay the debt service requirements on the Bonds. 
Similarly, such adverse economic developments could result in a
decrease in tax revenues realized by the State and thus could
adversely affect the ability of the State to pay the debt service
requirements of any Tennessee general obligation bonds in the
Tennessee Trusts.  The Sponsor is unable to predict whether or to
what extent such factors or other factors may affect the issuers of
Bonds, the market value or marketability of the Bonds or the
ability of the respective issuers of the Bonds acquired by the
Tennessee Trusts to pay interest on or  principal of the Bonds.

Texas Trusts - Economic Factors


The following information constitutes only a brief summary of some
of the particular conditions unusual to Texas which may impact
certain issuers of Texas Municipal Obligations, and does not
purport to be a complete or exhaustive description of all adverse
conditions to which the issuers of Municipal Obligations in
general, or of Texas Municipal Obligations in particular, are
subject.  It is not possible to predict whether or to what extent
the factors discussed herein, or other factors, may affect the
market value or marketability of Texas Municipal Obligations or the
ability of the respective issuers of Texas Municipal Obligations to
pay the principal of, or the interest and premium on, Texas
Municipal Obligations.  Further, in its first called 1991 session,
the Texas legislature adopted, and the Governor recently signed
into law, certain substantial amendments to the State corporate
franchise tax, the effect of which may be to subject to taxation
all or a portion of any gains realized by a Unitholder on the sale,
exchange or other disposition of his or her Units or of Bonds held
in the trust.  The amendments are applicable to the taxable periods
commencing January, 1991, and to each taxable period thereafter. 
Because no authoritative judicial, legislative or administrative
interpretation of these amendments has issued, and there remain
many unresolved questions regarding its potential effect on
corporate franchise taxpayers, each corporation which is subject to
the State franchise tax and which is considering the purchase of
Units should consult its tax advisor regarding the effect of these
amendments.

The following discussion is based on information from various state
and local agencies in the State, including information provided by
the Comptroller of Public Accounts for use in official statements
of Texas state bond issues. While that information is believed to
be generally accurate, the information has not been independently
verified for accuracy or completeness.  Historical data on
political, economic, or regulatory factors in the State are
presented for background information only, and should not be relied
upon to suggest future conditions in the State.

Economic and Demographic Information. The State is the second
largest by size among the states of the United States, covering
approximately 266,807 square miles.  Based upon the 1990 census
undertaken by the United States Census Bureau, the State has a
population of approximately 16,986,510, making it the third largest
by population of the states.

 
 

Page 48



The largest cities in the State, by population, include Houston
(1,630,553), Dallas (1,006,877), San Antonio (935,933),
El Paso (515,342), and Fort Worth (447,619).  Over one-half of the
State's population resides in the Consolidated Metropolitan
Statistical Area that includes the cities of Dallas and Fort Worth
(3,885,415), the Consolidated Metropolitan Statistical Area that
includes the city of Houston (3,711,043), or the Primary
Metropolitan Statistical Area that includes the city of San Antonio
(1,302,099).  The average annual population growth rate for the
State between 1980 and 1990 was approximately 1.8%.

The State's output accounts for more than 7% of the total output of
the United States.  Long identified with the gas and oil industry,
these businesses today account for only approximately 15% of the
State's economy.  The service-producing sectors (e.g.,
transportation, public utilities, finance, insurance, real estate,
trade, services and government) are the major sources of job growth
in the State.  Further, manufacturing job growth is anticipated by
the Comptroller of Public Accounts to average nearly two percent
each year to the year 2000.

Employment in the State has increased steadily through the 1970's
and the early 1980's.  The precipitous decline in oil prices in
early 1986 caused dramatic declines in oil and gas related
employment, which resulted in a weaker Texas economy in general. 
However, by early 1987 the State's economy had moved through a
period of recovery; economic expansion has continued since 1988.
Based upon information gathered by the Texas Employment Commission
and the U.S. Bureau of Labor Statistics, Texas nonfarm employment
reached an all-time high of 7.1 million jobs in 1991.  At the same
time, the jobless rate has fallen from a peak of approximately 10%
in the summer of 1986 to a current rate of approximately 6.5%.

The total value of taxable property in the State amounted to
approximately $641 billion in 1990, according to records maintained
by the State Property Tax Board derived from school district data
in the State.  Preliminary 1990 property tax values rose 1.6% from
the levels posted for 1989.  The State does not levy any property
tax for general revenue purposes; however, such taxes are an
important source of revenue for local political subdivisions of the
State. The total property tax levied by all taxing jurisdictions
(counties, cities, school districts and special districts) reached
approximately $11.3 billion in 1989, including approximately $2.2
billion levied by cities, $1.7 billion levied by counties,
approximately $6.1 billion levied by school districts and
approximately $1.3 billion levied by special districts.

Budgetary Process and Budget.  The State operates on a fiscal year
basis which begins on September 1 of each year; however, the
State's accounting and budgetary period is a biennium which begins
on September 1 of each odd-numbered year.  The State is by law
required to maintain its accounting and reporting on a cash basis,
under which revenues are recorded when received and expenditures
are recognized as disbursements are made.  However, each state
agency maintains its own accounting system on a modified accrual
basis in accordance with generally accepted accounting principles
("GAAP").


Primary responsibility for the auditing of state books and records
lies with the State Auditor, who is appointed (with the approval of
the Senate) by a committee composed of the Lieutenant Governor, the
Speaker of the House of Representatives, the chairmen of the House
Appropriations Committee and the House Ways and Means Committee and
the chairmen of the Senate Finance Committee and the Senate State
Affairs Committee.  The State Auditor does not audit the
constitutional "cash basis" financial statements of the State
prepared by the Comptroller, but rather issues a statewide annual
financial report which conforms to GAAP for state governments.  The
most recent such report was issued on February 19, 1991, and covers
the fiscal year ending August 31, 1990.

The Constitution of the State (the "Constitution") requires an
appropriation for any funds to be drawn out of the State Treasury. 
Such appropriations are in some instances made by the Constitution,
but more generally are made by a bill passed by the Legislature and
approved by the Governor (or passed by the Legislature over a veto
by the Governor). Legislative appropriations are limited by the
Constitution to a two-year period, and generally are made by the
Legislature separately for each fiscal year of the biennium.  The
Constitution also prohibits the Legislature from sending any
appropriations bill to the Governor for consideration until the
Comptroller of Public Accounts has certified that the amounts
appropriated are within the amounts estimated to be available in
the affected funds.

Payments from the State Treasury are made only against warrants
presented for payment to the Treasurer.  Such a warrant must be
approved by the state agency making the expenditure, signed by the
Comptroller of Public Accounts (after determining that an
appropriation covering the requested payment has been made and (if
the warrant is to be paid other than out of the General Revenue
Fund (discussed below) that there are adequate funds in the account
from which such payment is to be made) and by the Treasurer.

In the event of temporary cash deficiencies in the General Revenue
Fund caused by timing differences between cash receipts and cash
expenditures, several statutory remedies are available.  First, the
Comptroller of Public Accounts is authorized, with the consent of
the Treasurer, to make interfund transfers of surplus cash from
other funds in the Treasury to the General Revenue Fund.  Any cash
so transferred must be restored to the fund from which it was taken
as soon as possible or by the end of the fiscal year.  Second, the
Treasurer is authorized to issue tax and revenue anticipation notes
on behalf of the State solely to coordinate the State's cash flow
within a fiscal year.  Such notes must mature and be paid in full
during the biennium in which they were issued. Before such notes
can be issued, the Treasurer must prepare a cash flow shortfall
forecast for the General Revenue Fund, based on the most recent
estimates prepared by the Comptroller of Public Accounts, and must
submit that forecast for approval by a committee composed of the
Governor, the Lieutenant Governor, the Treasurer and the
Comptroller of Public Accounts (with the Speaker of the House as a
non-voting member).  Under no circumstances may the amount of notes
outstanding exceed 25% of the forecasted taxes and revenues to be
credited to the General Revenue Fund (reduced by the total
outstanding liability of such fund for interfund borrowings
described above).  Since the statute authorizing the issuances of
tax and revenue anticipation notes was first enacted in 1986, the
State annually has issued and retired such notes in varying
amounts. In August 1990, the State issued $550 million of such
notes; it is anticipated that the Treasury will continue to use
short term borrowings for cash management purposes whenever
appropriate.

 
 

Page 49



Funds of the State presently are being drawn out pursuant to the
general appropriations bill passed and approved in
1989 for the 1990-1991 biennium.  The Legislature adjourned the
1991 regular session without adopting a general appropriations
bill; however, such legislation was adopted by the Legislature in
its recently-concluded special session.

State Revenues and Expenditures.  The Treasury is comprised of
several hundred different funds.  Approximately 55% of the state
revenue receipts in fiscal year 1990 were deposited into the
General Revenue Fund, from which financing for a large number of
the programs of the State is drawn.  In addition, approximately 35%
of the state revenue receipts were deposited into various special
revenue funds out of which identified programs (chiefly dealing
with human services, transportation or education) are funded. 
Finally, the remaining approximately 10% of the state revenue
receipts, such as state sales tax receipts required to be paid over
to municipalities, were deposited into various suspense or trust
funds within the Treasury.
 
 
Historically, the primary sources of the State's revenues have been
sales taxes, mineral severance taxes and federal grants.  Due to
the collapse of oil and gas prices and the resulting enactment by
recent Legislatures of new tax measures, including those increasing
the rates of existing taxes and expanding the tax base for certain
taxes, there has been a reordering in the relative importance of
the State's taxes in terms of their contribution to the State's
revenue in any year.  Sales taxes remain the State's main revenue
source, accounting for 32.6% of state revenues during fiscal year
1990, the highest percentage since the sales tax was imposed in
1962.  Federal grants remained the State's second largest revenue
source, accounting for approximately 25.5% of total revenue during
fiscal year 1990.  Licenses, fees and permits, the State's third
largest revenue source, accounted for approximately 6.8% of the
total revenue, while the motor fuels tax accounted for
approximately 6.5% of the total revenue during fiscal year 1990. 
The State also imposed motor vehicle, corporate franchise, oil and
gas severance and other taxes.

The State is constitutionally barred from levying ad valorem taxes
on property for general revenue purposes, and may not impose a rate
of such taxes for other purposes which is in excess of $0.35/$100
of valuation.  The State further is constitutionally limited from
increasing appropriations from tax revenues (other than those
appropriated under the Constitution, and other than in the event of
a legislatively determined emergency) at a rate of growth in excess
of that estimated for the State's economy.  Finally, the State does
not currently impose any personal or corporate income tax
(although, as noted above, it does impose a corporate franchise
tax; also, the Legislature in its current special session is
considering adopting legislation to expand the franchise tax to
include a provision to tax the earned surplus of businesses, and to
apply the expanded tax to other types of business entities or
proprietorships).

Heavy reliance on the energy and agricultural sectors for jobs and
income resulted in a general downturn in the State's economy
beginning in 1982 as those industries suffered significantly.  As
a result of these problems, the General Revenue Fund had a $230
million cash deficit at the beginning of the 1987 fiscal year, and
ended that fiscal year with a $744 million cash deficit. However,
in 1987 the Texas economy began to move toward a period of
recovery. The expansion continued in 1988 and 1989.  In each of the
past three fiscal years the State has ended the year with a cash
surplus in the General Revenue Fund; at the end of fiscal year
1988, that surplus was $114 million; at the end of fiscal year
1989, that surplus was $298 million; and at the end of the most
recent fiscal year, 1990, that surplus was $768 million.


In connection with the appropriations process, as directed by the
Constitution, the Comptroller of Public Accounts has prepared his
estimates of revenues for fiscal years 1991 through 1993.  Those
estimates were based upon an econometric model of the State's
economy created by the Comptroller utilizing extensive data bases
relating to state and local economic conditions and demographic
statistics.  The revenue estimate for 1991 shows the State's
economy in expansion.  Sales taxes (both general and motor
vehicle), which have become the workhorse of the State's tax
system, would continue to grow with the economy. Current trends
indicate that the revenue estimates for this biennium are still on
target.  There can be no assurance, however, that the assumptions
about the State's economy made by the Comptroller of Public
Accounts will prove accurate or that the State will able to realize
its projected revenues.  Nor is it possible to predict what effect
a failure to achieve projected budget figures would have on the
State's ability to meet its general debt obligations.


State Indebtness.  Except as specifically authorized, the
Constitution generally prohibits the creation of debt by or on
behalf of the State; further, the Constitution prohibits the
lending or pledging of the credit of the State in any manner to or
in support of the payment of liabilities of any person (including
municipalities).  For purposes of this limitation, "debt" generally
comprises obligations which are payable over a period extending
beyond the end of the current budget period and out of monies other
than funds available or expected to become available during that
budget period. However, "debt" does not include revenue bonds,
since the Texas courts (like the courts of many states) have held
that certain obligations issued by or on behalf of the State which
are not payable from tax sources (or the payment of debt service on
which is subject to appropriations) do not create a "debt" within
the meaning of the Constitution.

At various times, the voters of the State, by the adoption of
constitutional amendments, have authorized the issuance of debt of
the State, including general obligation indebtness for which the
full faith and credit and the taxing power of the State may be
pledged.  The total amount of such debt which has been authorized
is in excess of $6.3 billion, including $2.75 billion of general
obligation bonds that may be issued by the Veterans' Land Board to
finance the purchase of land and housing by veterans and the
financing of farm property under a farm and ranch loan program;
$2.3 billion of general obligation bonds that may be issued by the
Water Development Board to finance, or to make funds available to
municipalities or other governmental units for, the conservation
and development of water resources, storage facilities and systems
for filtration, treatment and transportation of water; $500 million
of general obligation bonds that may be issued by the Texas
National Research Laboratory Commission for eligible undertakings
related to the construction and operation of the proposed
"superconducting super collider" high energy physics project; and
$500 million of general obligation bonds that may be issued by the
Texas Finance Authority to finance the acquisition, construction
and equipping of facilities, corrections institutions and mental
health and mental retardation institutions.  In addition, the Water
Development Board is authorized to incur general obligation
contractual obligations to the United States for water storage
facilities in reservoirs constructed by the United States, and the
governing bodies of various state institutions of higher education
are authorized to issue bonds payable from existing trust funds.

 
 

Page 50



As of December 15, 1990, there was outstanding (or committed to
issuance) general obligation indebtness of the State aggregating
approximately $2.8 billion.  Of this amount, approximately $1.3
billion had been issued by the Veterans' Land Board, all of which
was issued to fund programs which are expected to produce revenues
sufficient to pay all debt service on such bonds, and approximately
$126.4 million had been issued by the Water Development Board, all
of which was issued to fund loans to political subdivisions, the
repayment of which is expected to produce revenues sufficient to
pay all debt service on those bonds.

In addition to the issuance of general obligation indebtness,
certain state agencies have the authority to issue revenue bonds
indirectly payable from funds appropriated from the General Revenue
Fund.  Thus, the Texas Public Finance Authority has the authority
to issue revenue bonds the debt service on which is payable from
rental payments made by the State under leases covering the
facilities finances with the proceeds of the obligations. 
Similarly, the Texas National Research Laboratory Commission has
been authorized to issue up to $500 million in revenue bonds to pay
for activities related to a superconducting super collider research
facility, the funds for the repayment of which, if issued, would
come from biennial general appropriations.


Further, additional state programs may be financed with revenue
bonds or similar obligations payable from revenues generated by the
specific programs authorized, and not from the general revenues of
the State or its taxing power. Among the State agencies authorized
to issue revenue bonds are the Veterans' Land Board, the Texas
Water Development Board, the Texas Water Resources Finance
Authority, the Texas Agricultural Finance Authority, the Texas
Housing Agency, the Texas Department of Commerce, the Texas
Turnpike Authority, and Texas colleges and universities.


Litigation. The State is a party to various legal proceedings
relating to its operations and governmental functions; the Texas
Attorney General has rendered opinions with respect to recent state
bond issues that, except for Edgewood v. Anderson, discussed below,
none of such proceedings, if decided adversely to the State, would
have a material adverse effect on the financial condition of the
State.

In 1986, a group of school districts in the State with relatively
low ad valorem tax bases filed suit challenging the
constitutionality of the State's system of financing public
education.  On June 1, 1987, a final judgement was entered by the
250th District Court of Travis County, Texas, styled Edgewood
Independent School District, et al. v. William N. Kirby, et al.,
holding the Texas school financing system unconstitutional and
unenforceable under the Constitution and laws of the State for
failure to insure that each school district has the same ability to
obtain funds for educational expenditures such that each student
would have the same opportunity to educational facilities as every
other student in the State.  A series of appeals followed, with the
Texas Supreme Court handing down a unanimous decision that the
system violated the state constitutional requirement that the State
Legislature "establish and make suitable provision for the support
and maintenance of an efficient system of public free schools."

The Legislature passed a school finance bill ("SB351") which was
signed by the Governor on June 7, 1990; on July 9, 1990, a hearing
was held before the trial court on the constitutionality of the
school finance system described in that bill.  On September 24,
1990, the trial court entered a judgement declaring that the Texas
school financing system remains unconstitutional.  However, it also
held that its decision would not adversely affect the validity,
incontestability, obligation of payment or source of payment of any
bonds issued by Texas school districts for authorized purposes
prior to September 1, 1991, the distribution to school districts of
State and federal funds before September 1, 1991, in accordance
with present procedures and laws, or the assessment and collection
after September 1, 1991 of any taxes or other revenues levied or
imposed for or pledged to the payment of any bonds issued or debt
incurred prior to September 1, 1991.


On January 22, 1991, the Texas Supreme Court held that the Texas
public school finance system remained unconstitutional; on April
15, 1991, the trial judge ruled that the school finance bill, as
passed by the Legislature, would be presumed constitutional until
challenged.  He retained indefinite jurisdiction in the matter in
case either of the parties decides to challenge the education
funding system in the future and, in fact, two "property rich"
school districts have challenged the constitutionality of the 1990
legislation.

While there will not be any material effect on the financial
condition of the State during fiscal year 1991, it is estimated
that funding of schools under the 1990 legislation will cost the
State an additional $1.8 billion over the coming biennium.

Local Municipalities and Political Subdivisions.  The same economic
and other factors affecting the State and its agencies also have
affected cities, counties, school districts and other issuers of
bonds located throughout the State. Declining revenues caused by
the downturn in the State's economy have forced these various other
issuers to raise taxes and cut services to achieve the balanced
budgets mandated by their respective charters or applicable state
law requirements.  S&P and Moody's assign separate ratings to each
issue of bonds sold by these other issuers.  Such ratings may be
significantly lower than the ratings assigned by such rating
agencies to State general obligation bonds.

A wide variety of Texas laws, rules and regulations affect,
directly or indirectly, the payment of interest on, or the
repayment of the principal of, Texas Municipal Obligations.  The
impact of such laws and regulations on particular Texas Municipal
Obligations may vary depending upon numerous factors including,
among others, the particular type of Texas Municipal Obligations
involved, the public purpose funded by the Texas Municipal
Obligations and the nature and extent of insurance or other
security for payment of principal and interest on the Texas
Municipal Obligations.  For example, Texas Municipal Obligations
which are payable only from the revenues derived from a particular
facility may be adversely affected by Texas laws or regulations
which make it more difficult for the particular facility to
generate revenues sufficient to pay such interest and principal,
including, among others, laws and regulations which limit the
amount of fees, rates or other charges which may be imposed for use
of the facility or which increase competition among facilities of
that type or which limit or otherwise have the effect of reducing
the use of such facilities generally, thereby reducing the revenues
generated by the particular facility.  Texas Municipal Obligations,
the payment of interest and principal on which is payable


 
 

Page 51



from annual appropriations, may be adversely affected by local laws
or regulations that restrict the availability of monies with which
to make such appropriations.  Similarly, Texas Municipal
Obligations, the payment of interest and principal on which is
secured, in whole or in part, by an interest in real property may
be adversely affected by declines in real estate values and by
Texas laws that limit the availability of remedies or the scope of
remedies available in the event of a default on such Texas
Municipal Obligations.  Because of the diverse nature of such laws
and regulations and the impossibility of predicting the nature or
extent of future changes in existing laws or regulations or the
future enactment or adoption of additional laws or regulations, it
is not presently possible to determine the impact of such laws and
regulations on the Texas Municipal Obligations in which the Fund
invests.

Debt Ratings.  General Obligation bonds issued by the State have
been rated by Moody's continuously since July, 1987 at Aa and by
S&P at AA.  
 
Virginia Trusts - Economic Factors


Virginia's financial condition is supported by a broad-based
economy, including manufacturing, tourism, agriculture, ports,
mining and fisheries. Manufacturing continues to be a major source
of employment, ranking behind only services, wholesale and retail
trade, and government (federal, state and local).  The federal
government is a major employer in Virginia, due to the heavy
concentration of federal employees in the metropolitan Washington,
D.C. segment of Northern Virginia and the military employment in
the Hampton Roads area, which houses the nation's largest 
concentration of military installations.  However, the expected
retrenchment of the military sector as a consequence of the end of
the Cold War remains a cloud on the economic horizon.

In recent years per capita personal income in Virginia has
consistently been above the national average.  However, while total
personal income has continued to rise during the current recession,
it has not always kept pace with both inflation and the population,
either nationally or in Virginia.  Real personal income in Virginia
fell for seven consecutive quarters, ending with the last quarter
of 1991, with a slow recovery being evidenced in 1992.  The
annualized rate of growth in real personal income in Virginia for
the second quarter of 1992 was 0.5 percent compared to a national
rate of 0.3 percent.  Virginia's real per capita income has
exceeded that for both the nation and the southeast region since
the early 1980's, although the differentials have decreased since
1989.  Virginia's nonagricultural employment figures mirror the
national economy although the recent recession has hit Virginia
harder than the nation as a whole with employment declining at an
average annual rate of 1.6 percent since 1990 in Virginia, compared
to 0.7 percent nationally.  With respect to unemployment,
Virginia's unemployment rate has consistently been below that of
the nation.  For the decade of 1980 to 1990, the differential has
been two percentage points, although it decreased to below one
percentage point in 1991 and the first six months of 1992.

Employment trends in Virginia have varied from sector to sector and
from region to region.  For example, manufacturing and trade
sectors in 1980 each employed more workers than the service sector. 
The service sector is now the largest employer in Virginia and
mining and manufacturing are at lower levels than in 1980.  The
highest rates of unemployment are concentrated in southwest
Virginia where mining jobs have been lost; the lowest unemployment
rates are seen in Northern Virginia where much federally related
employment is concentrated.  Not surprisingly, there is great
overlap between areas of lowest unemployment and those of highest
per capita income.  Economic recovery from the recent recession is
expected to be long and slow in Virginia, although, in the long
term, a growing and more diversified export sector holds promise
that should mitigate current concerns.

The Commonwealth of Virginia has historically operated on a
fiscally conservative basis and is required by its Constitution to
have a balanced biennial budget.  At the end of the June 30, 1992,
fiscal year, the General Fund had an ending fund balance computed
on a budgetary cash basis of $195.2 million, of which $15 million
was in required reserve; $142.3 million thereof was designated for
expenditure during the fiscal year, leaving an undesignated,
unreserved fund balance of $52.8 million, the first such
undesignated fund balance since 1988.  Computed on a modified
accrual basis in accordance with generally accepted accounting
principles, the General Fund balance at the end of the fiscal year
ended June 30, 1992, was minus $121.8 million, compared with a
General Fund balance  of minus $265.1 million at the end of the
fiscal year ended June 30, 1991.  Contributing to the reduction
were $256.4 million in deferred credits, representing estimated tax
refunds associated with income taxes withheld for the period
January through June 1992, and an accrual for estimated medical
claims of $155.8 million.

As of June 30, 1992, total debt for the Commonwealth aggregated
$7.3 billion. Of that amount, $1.5 billion was tax- supported. 
Outstanding general obligation debt backed by the full faith and
credit of the Commonwealth was $582.7 million at June 30, 1992.  Of
that amount, $544.4 million was also secured by revenue producing
capital projects. Debt service on the balance equaled 0.2% of total
General Fund expenditures in fiscal year 1992.

The Virginia Constitution contains limits on the amount of general
obligation bonds which the Commonwealth can issue.  These limits
are substantially in excess of current levels of outstanding bonds,
and at June 30, 1992 would permit an additional total of
approximately $5.0 billion of bonds secured by revenue-producing
projects and approximately $5.5 billion of unsecured general
obligation bonds, with not more than approximately $1.39 billion of
the latter to be issued in any four-year period.  Bonds which are
not secured by revenue-producing projects must be approved in a
State-wide election.


The Commonwealth maintains ratings of AAA by Standard & Poor's
Corporation and Aaa by Moody's on its general obligation
indebtedness, reflecting in part its sound fiscal management,
diversified economic base, and low debt ratios. There can be no
assurances that these conditions will continue.  Nor are these same
conditions necessarily applicable to securities which are not
general obligations of the Commonwealth.  Securities issued by
specific municipalities, governmental authorities or similar
issuers may be subject to economic risks or uncertainties peculiar
to the issuers of such securities or the sources from which they
are to be paid.

 
 

Page 52



TAX STATUS OF UNITHOLDERS

At the respective times of issuance of Bonds (and at the time of
issuance of the tax-exempt bonds underlying Stripped Obligations),
opinions relating to the validity thereof and to the exemption of
interest thereon from Federal income tax were rendered by bond
counsel to the respective issuing authorities.  In addition, with
respect to State Trusts, where applicable, bond counsel to the
issuing authorities rendered opinions as to the exemption of
interest on such Bonds, when held by residents of the State in
which issuers of such Bonds are located, from State income taxes
and certain State or local intangibles and local income taxes. 
Neither the Sponsor nor its counsel have made any special review
for the Trusts of the proceedings relating to the issuance of the
Bonds or of the bases for the opinions rendered in connection
therewith.


Taxpayers must disclose to the Internal Revenue Service the amount
of tax-exempt interest earned during the year. Federally tax-exempt
income, including income on Units of the Trusts, will be taken into
consideration in computing the portion, if any, of social security
benefits received that will be included in a taxpayer's gross
income subject to the Federal income tax.  It should be noted that
under recently enacted legislation, the proportion of Social
Security benefits subject to inclusion in taxable income has been
increased for tax years beginning after December 31, 1993.

Gain realized on the sale or redemption of the Bonds by the Trustee
or of a Unit by a Unitholder is includable in gross income for
Federal income tax purposes, and may be includable in gross income
for State tax purposes, as capital gain. (Such gain does not
include any amounts received in respect of accrued interest or
accrued original issue discount, if any).


It should be noted that under recently enacted legislation
described below that subjects accretion of market discount on tax-
exempt bonds to taxation as ordinary income, gain realized on the
sale or redemption of Bonds by the Trustee or of Units by a
Unitholder that would have been treated as capital gain under prior
law is treated as ordinary income to the extent it is attributable
to accretion of market discount.  Market discount can arise based
on the price the Trust pays for the Bonds or the price a Unitholder
pays for his or her Units.
Certain Bonds in the Connecticut Trusts were issued prior to the
enactment of a Connecticut State tax on interest income; therefore
bond counsel to the issuers of such Bonds did not opine as to the
exemption of the interest on such Bonds from such tax.  However,
the Sponsor and special counsel to the Trusts for Connecticut tax
matters believe that such interest is so exempt.   The States of
Florida and Texas currently impose no income tax on individuals. 
Neither the Sponsor nor its counsel has made any special review for
the Trusts of the proceedings relating to the issuance of the Bonds
or of the bases for the opinions rendered in connection therewith.

At the time of the Closing for each Trust, Chapman and Cutler,
Counsel to the Sponsor, rendered an opinion, under the existing
law, substantially to the effect that:

(1)  the Trusts are not associations taxable as corporations for
Federal income tax purposes.  Tax-exempt interest received by each
of the Trusts on Bonds deposited therein will retain its status as
tax-exempt interest, for Federal income tax purposes, when received
by the Trusts and when distributed to the Unitholders, except that
the alternative minimum tax and the environmental tax (the
"Superfund Tax") applicable to corporate Unitholders may, in
certain circumstances, include in the amount on which such taxes
are calculated a portion of the interest income received by the
Trust.  See "Certain Tax Matters Applicable to Corporate
Unitholders," below;

(2)  each Unitholder of a Trust is considered to be the owner of a
pro rata portion of such Trust under Subpart E, subchapter J of
Chapter 1 of the Code and will have a taxable event when the Trust
disposes of a Bond or when the Unitholder redeems or sells Units. 
Unitholders must reduce the tax basis of their Units for their
share of accrued interest received by the Trust, if any, on Bonds
delivered after the date the Unitholders pay for their Units and,
consequently, such Unitholders may have an increase in taxable gain
or reduction in capital loss upon the disposition of such Units.
Gain or loss upon the sale or redemption of Units is measured by
comparing the proceeds of such sale or redemption with the adjusted
basis of the Units.  If the Trustee disposes of Bonds (whether by
sale, payment at maturity, redemption or otherwise), gain or loss
is recognized to the Unitholder.  The  amount of any such gain or
loss is measured by comparing the Unitholder's pro rata share of
the total proceeds from such disposition with the Unitholder's
basis for his or her fractional interest in the asset disposed of. 
In the case of a Unitholder who purchases Units, such basis (before
adjustment for earned original issue discount and amortized bond
premium, if any) is determined by apportioning the cost of the
Units among each of the Trust assets ratably according to value as
of the date of acquisition of the Units. The tax cost reduction
requirements of the Code relating to amortization of bond premium
may, under some circumstances, result in the Unitholder realizing
a taxable gain when his or her Units are sold or redeemed for an
amount equal to their original cost; and

(3)  any amounts paid on defaulted Bonds held by the Trustee under
policies of insurance issued with respect to such Bonds will be
excludable from Federal gross income if, and to the same extent as,
such interest would have been so excludable if paid by the
respective issuer.  Paragraph (2) above would accordingly be
applicable to policy proceeds representing maturing interest.


All statements in the Prospectus concerning exemption from Federal,
state or other taxes are the opinion of Counsel and are to be so
construed.


The redemption of Units in a Trust by a Unitholder would result in
each of the remaining Unitholders of said Trust owning a greater
proportionate interest in the remaining assets of said Trust. 
Although present law does not directly address this matter, it
would appear reasonable that a remaining Unitholder's tax basis in
his Units would include his proportionate share of any proceeds
received by the Trust on the sale of bonds which were not
distributed to him but were instead used by the Trust to redeem
Units and that his tax basis in the remaining assets of the Trust
would accordingly be increased by such share of any proceeds, based
on the relative fair market value of the remaining assets of the
Trust as of the date of such redemption.


 
 

Page 53



Sections 1288 and 1272 of the Code provide a complex set of rules
governing the accrual of original issue discount. 
These rules provide that original issue discount accrues either on
the basis of a constant compound interest rate or ratably over the
term of the Bond, depending on the date the Bond was issued.  In
addition, special rules apply if the purchase price of a Bond
exceeds the original issue price plus the amount of original issue
discount which accrued to prior owners.  The application of these
rules will also vary depending on the value of the Bond on the date
a Unitholder acquires his Units, and the price the Unitholder pays
for his Units. The accrual of tax-exempt original issue discount on
zero coupon bonds and other original issue discount bonds will
result in an increase in the Unitholder's basis in such obligations
and, accordingly, in his basis in his Units.

The Revenue Reconciliation Act of 1993 (the "Tax Act") was recently
enacted. The Tax Act subjects tax-exempt bonds to the market
discount rules of the Code effective for bonds purchased after
April 30, 1993.  In general, market discount is the amount (if any)
by which the stated redemption price at maturity exceeds an
investor's purchase price (except to the extent that such
difference, if any, is attributable to original issue discount not
yet accrued).  Under the Tax Act, accretion of market discount is
taxable as ordinary income; under prior law, the accretion had been
treated as capital gain.  Market discount that accretes while the
Trust holds a Bonds would be recognized as ordinary income by the
Unitholders when principal payments are received on the Bond, upon
sale or at redemption (including early redemption), or upon the
sale or redemption of his or her Units, unless a Unitholder elects
to include market discount in taxable income as it accrues.  The
market discount rules are complex and Unitholders should consult
their tax advisors regarding these rules and their application.

Original issue discount which accrues with respect to a Stripped
Obligation will be treated as tax-exempt original issue discount
only to the extent the amount of such discount produces a yield to
maturity as of the purchase date of a Unitholder's Units equal to
the lower of the coupon rate of interest on the underlying Bond
(the "coupon rate") or the yield to maturity  (the "yield to
maturity") of the Stripped Obligation.  The amount of original
issue discount on a Stripped Obligation in excess of the amount
based upon the coupon rate will be treated as taxable original
issue discount.  Such taxable original issue discount, if any,
would be taxable as ordinary income to a Unitholder as such income
accrues (in the manner set forth in Section 1286 of the Code),
prior to the receipt of payment by the Unitholder with respect to 
such Obligation.  Both accrued tax-exempt and taxable original
issue discount will increase a Unitholder's basis in a Stripped
Obligation and his Units.


The Code provides that interest on indebtedness incurred or
continued to purchase or carry obligations, the interest on which
is wholly exempt from Federal income taxes, is not deductible. 
Because each Unitholder is treated for Federal income tax purposes
as the owner of a pro rata share of the Bonds owned by the
applicable Trust, interest on borrowed funds used to purchase or
carry Units of such Trust will not be deductible for Federal income
tax purposes.  Under rules used by the Internal Revenue Service for
determining when borrowed funds are considered used for the purpose
of purchasing or carrying particular assets, the purchase of Units
may be considered to have been made with borrowed funds even though
the borrowed funds are not directly traceable to the purchase of
Units (however, these  rules generally do not apply to interest
paid on indebtedness incurred to purchase or improve a personal
residence).  Similar rules are generally applicable for state tax
purposes.  Special rules apply in the case of certain financial
institutions that acquire Units.  Investors with questions
regarding these issues should consult with their tax advisers.

In general, each issue of Bonds in the Trusts issued after August
15, 1986 is subject to certain post-issuance requirements which
must be met in order for the interest on the Bonds to be and remain
exempt from Federal income taxation. Bond counsel to each issuer of
such Bonds opined that, assuming continuing compliance by such
issuers with certain covenants, interest on such Bonds will
continue to be exempt from Federal income taxation (other than with
respect to the application to corporate Unitholders of the
alternative minimum tax or the Superfund Tax, as discussed below).


For purposes of computing the alternative minimum tax for
individuals and corporations, interest on certain specified tax-
exempt private activity bonds is included as a preference item. 
The Trusts do not include any such bonds.

For taxpayers other than corporations, net capital gains are
subject to a maximum tax rate of 28 percent.

Taxable equivalent yields


The following tables show the approximate taxable estimated current
returns for individuals that are equivalent to tax-exempt estimated
current returns under published 1993 marginal Federal tax rates. 
The tables illustrate what you would have to earn on taxable
investments to equal the tax-exempt estimated current return for
your income tax bracket. A taxpayer's marginal tax rate is affected
by both his taxable income and his adjusted gross income.  Locate
your adjusted gross income and your taxable income (which is your
adjusted gross income reduced by any deductions and exemptions),
then locate your tax bracket based on joint or single tax filing. 
Read across to the equivalent taxable estimated current return you
would need to match the tax-free income.









 
 

Page 54



 


1993 Tax Year
MARGINAL FEDERAL TAX RATES FOR JOINT TAXPAYERS WITH FOUR PERSONAL
EXEMPTIONS Federal
Federal       Adjusted                  
Taxable       Gross             Federal
Income        Income            Tax                 Tax-Exempt
Estimated Current Return      (1,000's)     (1,000's)         Rate* 
 5.00%     5.25%     5.50%    5.75%     6.00%     6.25%      6.50% 
  6.75%                                             
                                         $     
0-36.9  $    0-108.5         15.0%     5.88     6.18       6.47   
 6.76     7.06      7.35       7.65     7.94 36.9- 89.2      
0-108.5         28.0      6.94     7.29       7.64     7.99    
8.33      8.68       9.03     9.38 108.5-162.7         29.0     
7.04     7.39       7.75     8.10     8.45      8.80       9.15   
 9.51 89.2-140.0       0-108.5         31.0      7.25     7.61    
  7.97     8.33     8.70      9.06       9.42     9.78 108.5-162.7 
       32.0      7.35     7.72       8.09     8.46     8.82     
9.19       9.56     9.93 162.7-285.2         34.5      7.63    
8.02       8.40     8.78     9.16      9.54       9.92    10.31
140.0-250.0   108.5-162.7         37.0      7.94     8.33      
8.73     9.13     9.52      9.92      10.32    10.71 162.7-285.2  
      40.0      8.33     8.75       9.17     9.58    10.00    
10.42      10.83    11.25 Over 285.2         37.02     7.94    
8.33       8.73     9.13     9.52      9.92      10.32    10.71
Over 250.0   162.7-285.2         44.0      8.93     9.38       9.82 
  10.27    10.71     11.16      11.61    12.05 Over 285.2        
41.03     8.47     8.90       9.32     9.75    10.17     10.59    
 11.02    11.44

COMBINED MARGINAL FEDERAL TAX RATES FOR SINGLE TAXPAYERS WITH ONE
PERSONAL EXEMPTION Federal
Federal       Adjusted          
Taxable       Gross             Federal
Income        Income            Tax                 Tax-Exempt
Estimated Current Return   (1,000's)     (1,000's)         Rate*  
 5.00%    5.25%      5.50%    5.75%    6.00%     6.25%      6.50% 
  6.75%                                             
                                         $ 
0-22.1     $ 0-108.5         15.0%     5.88     6.18       6.47   
 6.76     7.06      7.35       7.65     7.94 22.1-53.5      
0-108.5         28.0      6.94     7.29       7.64     7.99    
8.33      8.68       9.03     9.38 53.5-115.0       0-108.5       
 31.0      7.25     7.61       7.97     8.33     8.70      9.06   
   9.42     9.78 108.5-231.0         32.5      7.41     7.78      
8.15     8.52     8.89      9.26       9.63    10.00 115.0-250.0  
108.5-231.0         38.0      8.06     8.47       8.87     9.27   
 9.68     10.08      10.48    10.89 Over 231.0         37.02    
7.94     8.33       8.73     9.13     9.52      9.92      10.32   
10.71 Over 250.0    Over 231.0         41.03     8.47     8.90    
  9.32     9.75    10.17     10.59      11.02    11.44



1   The table reflects the effect of the limitations on itemized
deductions and the deduction for personal exemptions. They were
designed to phase out certain benefits of these deductions for
higher income taxpayers. These limitations, in effect, raise the
marginal Federal tax rate to approximately 44% for taxpayers filing
a joint return and entitled to four personal exemptions and to
approximately 41% for taxpayers filing a single return entitled to
only one personal exemption.  These limitations are subject to
certain maximums, which depend on the number of exemptions claimed
and the total amount of the taxpayer's itemized deductions. For
example, the limitation on itemized deductions will not cause a
taxpayer to lose more than 80% of his allowable itemized
deductions, with certain exceptions.

2   Federal tax rate reverts to 36% after the 80% cap on the
limitation on itemized deductions has been met. The above table
reflects only the effect of exemption from Federal income taxes. 
Unitholders of State Trusts, which are exempt from both Federal and
state taxes, would need a somewhat higher taxable yield than shown
in the table to equal the tax-exempt yield of such Trusts. There
can be no assurance that state tax rates will remain unchanged.

3  Federal tax rate reverts to 39.6% after the 80% cap on the
limitation on itemized deductions has been made.

A comparison of tax-free and equivalent taxable estimated current
returns with the returns on various taxable investments is one
element to consider in making an investment decision. The Sponsor
may from time to time in its advertising and sales materials
compare the then current estimated returns on a Trust and returns
over specified periods on other similar Nuveen Trusts with returns
on taxable investments such as corporate or U.S. Government bonds,
bank CDs and money market accounts or money market funds, each of
which has investment characteristics that may differ from those of
the Trust.  U.S. Government bonds, for example, are backed by the
full faith and credit of the U.S. Government and bank CDs and money
market accounts are insured by an agency of the Federal government.
Money market accounts and money market funds provide stability of
principal, but pay interest at rates that vary with the condition
of the short-term debt market.  The investment characteristics of
the Trusts are described more fully elsewhere in this Prospectus.


Certain Tax Matters Applicable to Corporate Unitholders. In the
case of certain corporations, the alternative minimum tax and the
Superfund Tax depend upon the corporation's alternative minimum
taxable income ("AMTI"), which is the corporation's taxable income
with certain adjustments.  One of the adjustment items used in
computing AMTI and the Superfund Tax of a corporation (other than
an S Corporation, Regulated Investment Company, Real Estate
Investment Trust, or REMIC) is an amount equal to 75% of the excess
of such corporation's "adjusted current earnings" over an amount
equal to its AMTI (before such adjustment item and the alternative
tax net operation loss deduction). Although tax-exempt interest
received by each of the Trusts on Bonds deposited therein will not
be included in the gross income of corporations for Federal income
tax purposes, "adjusted current earnings" includes all tax-exempt
interest, including interest on all Bonds in the Trust and tax-
exempt original issue discount.

Corporate Unitholders are urged to consult their own tax advisers
with respect to the particular tax consequences to them resulting
under Federal tax law, including the corporate alternative minimum
tax, the Superfund Tax, and the branch profits tax imposed by
Section 884 of the Code.

Except as noted above, the exemption of interest on state and local
obligations for Federal income tax purposes does not necessarily
result in exemption under the income or other tax laws of any state
or city.  The laws of the several states vary with respect to the
taxation of such obligations.

Alabama Trusts - Tax Matters


At the time of closing for each Alabama Trust, Balch & Bingham,
special counsel for the Trusts for Alabama tax matters,

 
Page 55



rendered an opinion under  then-existing law substantially to the
effect that:


Under the income tax laws of Alabama, the Alabama Trust is not
taxable as a corporation or otherwise.

Income of the Alabama Trust, to the extent it is taxable, will be
taxable to the Unitholders, not to the Alabama Trust.

Each Unitholder's distributive share of the Alabama Trusts' net
income will be treated as the income of the Unitholder for Alabama
income tax  purposes.


Interest on obligations of the State and subdivisions thereof and
the Possessions of the United States held by the Alabama Trust
which is exempt from the Alabama income tax will retain its tax-
exempt character when the distributive share thereof is distributed
or deemed distributed to each Unitholder.

Each Unitholder will, for purposes of the Alabama income tax, treat
his distributive share of gains realized upon the sale or other
disposition of the Bonds held by the Alabama Trust as though the
Bonds were sold or disposed of directly by the Unitholders.


Gains realized on the sale or redemption of Units by Unitholders
who are subject to the Alabama income tax will be includable in the
Alabama income of such Unitholders.

Arizona Trusts - Tax Matters


Snell & Wilmer acted as special Arizona counsel to Arizona
Traditional Trust 192 and all prior Arizona Traditional Trusts. 
Chapman and Cutler, Counsel for the Sponsor, acted as special
Arizona counsel to Arizona Traditional Trust 193 and all subsequent
Arizona Trusts, including all Arizona Insured Trusts.  At the time
of the closing for each Arizona Trust, the respective counsel to
the Trusts rendered an opinion under then existing law
substantially to the effect that:

For Arizona income tax purposes, each Unitholder will be treated as
the owner of a pro rata portion of the related Arizona Trust, and
the income of the Arizona Trust therefore will be treated as the
income of the Unitholder under State law.

For Arizona income tax purposes, interest on the Bonds which is
excludable from Federal gross income and which is exempt from
Arizona income taxes when received by the Arizona Trust, and which
would be excludable from Federal gross income and exempt from
Arizona income taxes if received directly by a Unitholder, will
retain its status as tax-exempt interest when received by the
Arizona Trust and distributed to the Unitholders.

To the extent that interest derived from an Arizona Trust by a
Unitholder with respect to the Bonds is excludable from Federal
gross income, such  interest will not be subject to Arizona income
taxes.

Each Unitholder will receive taxable gain or loss for Arizona
income tax purposes when Bonds held in the Arizona Trust are sold,
exchanged, redeemed or paid at maturity, or when the Unitholder
redeems or sells Units, at a price that differs from original cost
as adjusted for amortization of Bond discount or premium and other
basis adjustments, including any basis reduction that may be
required to reflect a Unitholder's share of interest, if any,
accruing on Bonds during the interval between the Unitholder's
settlement date and the date such Bonds are delivered to the
Arizona Trust, if later.


Amounts paid by an insurer under an insurance policy or policies
issued to the Trust, if any, with respect to the Bonds in the Trust
which represent maturing interest on defaulted obligations held by
the Trustee will be exempt from State income taxes if, and to the
same extent as, such interest would  have been so exempt if paid by
the issuer of the defaulted obligations.
Arizona law does not permit a deduction for interest paid or
incurred on indebtedness incurred or continued to purchase or carry
Units in the Arizona Trust, the interest on which is exempt from
Arizona income taxes.

Neither the Bonds nor the Units will be subject to Arizona property
taxes, sales tax or use tax.

California Trusts - Tax Matters


Jones, Day, Reavis & Pogue acted as special California counsel to
California Traditional Trust 206 and all prior California
Traditional Trusts and to California Insured Trust 77 and all prior
California Insured Trusts.  Wyman, Bautzer, Kuchel & Silbert acted
as special California counsel to California Traditional Trust 207
through California Traditional Trust 239 and California Insured
Trust 78 through California Insured Trust 107.  Orrick, Herrington
& Sutcliffe acted as special California counsel to California
Traditional Trust 240 and all subsequent California Traditional
Trusts and to California Insured Trust 108 and to all subsequent
California Insured Trusts and to California Intermediate Insured
Trust 1 and all subsequent California Intermediate Insured Trusts. 
At the time of the closing for each California Trust, the
respective counsel to the Trusts rendered an opinion under then
existing California income and property tax law applicable to
individuals who are California residents substantially to the
effect that:

The California Trust is not an association taxable as a corporation
and the income of the California Trust will be treated as the
income of the Unitholders thereof under the income tax laws of
California.

Interest on the underlying securities (which may include bonds or
other obligations issued by the governments of Puerto Rico, the
Virgin Islands, Guam or the Northern Mariana Islands) which is
exempt from tax under California personal income tax and property
tax laws when received by the California Trust will, under such
laws, retain its status as tax-exempt interest when distributed to
Unitholders. However, interest on the underlying securities
attributed to a Unitholder which is a corporation subject to the
California franchise tax laws may be includable in its gross income
for purposes of determining its California franchise tax.

 
 

Page 56


Under California income tax law, each Unitholder in the California
Trust will have a taxable event when the California Trust disposes
of a security (whether by sale, exchange, redemption or payment at
maturity) or when the Unitholder redeems or sells Units.  Because
of the requirement that tax cost basis be reduced to reflect
amortization of bond premium, under some circumstances a Unitholder
may realize taxable gain when Units are sold or redeemed for an
amount equal to, or less than, their original cost.  The total tax
cost of each Unit to a Unitholder is allocated among each of the
bond issues held in the California Trust (in accordance with the
proportion of the California Trust comprised by each bond issue) in
order to determine his per unit tax cost for each bond issue; and
the tax cost reduction requirements relating to amortization of
bond premium will apply separately to the per unit cost of each
bond issue.  Unitholders' bases in their Units, and the bases for
their fractional interest in each California Trust asset, may have
to be adjusted for the their pro rata share of accrued interest
received, if any, on securities delivered after the Unitholders'
respective settlement dates.


Under the California personal property tax laws, bonds (including
the bonds in the California Trust as well as "regular-way" and
"when-issued" contracts for the purchase of bonds) or any interest
therein are exempt from such tax.

Any proceeds paid under an insurance policy, if any, issued to the
Trustee with respect to the bonds in a California Trust as well as
"regular-way" and "when-issued" contracts for the purchase of bonds
which represent maturing interest on defaulted obligations held by
the Trustee will be exempt from California personal income tax if,
and to the same extent as, such interest would have been so exempt
if paid by the issuer of the defaulted obligations.

Under Section 17280(b)(2) of the California Revenue and Taxation
Code, interest on indebtedness incurred or continued to purchase or
carry Units of the Trust is not deductible for the purposes of the
California personal income tax. While there presently is no
California authority interpreting this provision, Section
17280(b)(2) directs the California Franchise Tax Board to prescribe
regulations determining the proper allocation and apportionment of
interest costs for this purpose.  The Franchise Tax Board has not
yet proposed or prescribed such regulations.  In interpreting the
generally similar Federal provision, the Internal Revenue Service
has taken the position that such indebtedness need not be directly
traceable to the purchase or carrying of Units (although the
Service has not contended that a deduction for interest on
indebtedness incurred to purchase or improve a personal residence
or to purchase goods or services for personal consumption will be
disallowed). In the absence of conflicting regulations or other
California authority, the California Franchise Tax Board generally
has interpreted California statutory tax provisions in accord with
Internal Revenue Service interpretations of similar Federal
provisions.

Colorado Trusts - Tax Matters


At the time of the closing for each Colorado Trust, Sherman &
Howard, special Colorado counsel to the Trusts, rendered an opinion
under then existing law substantially to the effect that:

Each Colorado Trust consists of obligations which were issued by
the State of Colorado or its political subdivisions or by the
United States or possessions of the United States, including Puerto
Rico, the Virgin Islands and Guam ("Bonds").

Because Colorado income tax law is based upon the Federal law and
in light of the opinion of Chapman and Cutler, the Colorado Trust
is not an association taxable as a corporation for purposes of
Colorado income taxation.

With respect to Colorado Trust Unitholders, in view of the
relationship between Federal and Colorado tax computations
described above and the opinion of Chapman and Cutler referred to
above:

Each Colorado Trust Unitholder will be treated as owning a share of
each asset of the Colorado Trust for Colorado income tax purposes,
in the proportion that the number of Units of such Colorado Trust
held by him bears to the total number of outstanding Units of such
Colorado Trusts, and the income of such Colorado Trust will
therefore be treated as the income of the Colorado Unitholders
under Colorado law in the proportion described.

Interest on Bonds that would not be subject to Colorado income tax
or Colorado alternative minimum tax when paid directly to a
Colorado Unitholder will not be subject to Colorado income tax or
Colorado alternative minimum tax when received by the related
Colorado Trust and attributed to such Colorado Unitholder and when
distributed to such Colorado Unitholder.


Any proceeds paid under an insurance policy issued to the issuer of
the Bonds involved, to the Depositor prior to deposit of the Bonds
in the Colorado Trust, or to the Colorado Trust, which proceeds
represent maturing interest on defaulted Bonds and which proceeds
would not be subject to Colorado income tax or alternative minimum
tax when paid directly to a Colorado Unitholder will not be subject
to Colorado income and alternative minimum tax when received by the
Colorado Trust and attributed to such Colorado Unitholder and when
distributed to such Colorado Unitholder.


Each Colorado Unitholder will realize gain or loss taxable in
Colorado when the related Colorado Trust disposes of a Bond
(whether by sale, exchange, redemption or payment at maturity) or
when the Colorado Unitholder redeems or sells Units at a price that
differs from original cost as adjusted for amortization of bond
discount or premium and other basis adjustments (including any
basis reduction that may be required to reflect a Colorado
Unitholder's share of interest, if any, accruing on Bonds during
the interval between the Colorado Unitholder's settlement date and
the date such Bonds are delivered to the Colorado Trust, if later).

Tax cost reduction requirements relating to amortization of bond
premium may, under some circumstances, result in Colorado
Unitholders realizing gain taxable in Colorado when their Units are
sold or redeemed for an amount equal to or less than their original
cost.

If interest on indebtedness incurred or continued by a Colorado
Unitholder to purchase Units in a Colorado Trust is not deductible
for Federal income tax purposes, it will not be deductible for
Colorado income tax purposes.

 
 

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Connecticut Trusts - Tax Matters

The assets of each Connecticut Trust consist of obligations issued
by or on behalf of the State of Connecticut or its political
subdivisions or public instrumentalities, State or local
authorities, districts, or similar public entities created under
the laws of the State of Connecticut or on behalf of a United
States territory or possession the interest on the obligations of
which Federal law would prohibit Connecticut from taking of
received directly by a Unitholder (the "Bonds"). Certain Bonds in
the Connecticut Trust that were issued by the State of Connecticut
or governmental authorities located in Connecticut were issued
prior to the enactment of a Connecticut tax on the interest income
of individuals; therefore, bond counsel to the issuers of such
Bonds did not opine as to the exemption of the interest on such
Bonds from such tax.  However, the Sponsor and special counsel to
the Trusts for Connecticut tax matters believe that such interest
will be so exempt. Interest on Bonds in the Connecticut Trusts
issued by other issuers, if any, is, in the opinion of bond counsel
to such issuers, exempt from state taxation.

At the time of the closing for each Connecticut Trust, Day, Berry
& Howard, special counsel to the Trusts for Connecticut tax
matters, rendered an opinion which relied explicitly on the opinion
of Chapman and Cutler, rendered at such time, regarding Federal
income tax matters, under then existing Connecticut law,
substantially to the effect that:

The Connecticut Trust is not subject to the Connecticut corporation
business tax or any other tax on or measured by net income imposed
by the State of Connecticut.

Interest income from Bonds held by the Connecticut Trust that would
not be taxable under the Connecticut tax on the interest and
dividend income of resident individuals if received directly by the
Unitholder from the issuer of the Bond is not taxable under such
tax when such interest is received by the Connecticut Trust or
distributed by it to such a Unitholder.


Gains and losses recognized by a Unitholder for Federal income tax
purposes upon the maturity, redemption or other disposition by the
Connecticut Traditional Trust of a Bond held by the Connecticut
Trust or upon the redemption, sale or disposition of a Unit of a
Connecticut Trust held by a Unitholder are taken into account as
gains or losses, respectively, for purposes of the Connecticut
Income Tax, except that such gains and losses recognized upon the
sale or exchange of a Bond issued by or on behalf of the State of
Connecticut, any political subdivision thereof, or public
instrumentality, state or local authority, district, or similar
public entity created under the laws of the State of Connecticut (a
"Connecticut Bond") held by the Connecticut Trust are excluded from
gains and losses taken into account for purposes of such tax, and
no opinion is expressed as to the treatment for purposes of such
tax of gains and losses recognized upon the maturity or redemption
of a Connecticut Bond held by the Connecticut Trust or, to the
extent attributable to Connecticut Bonds, or gains and losses
recognized upon the redemption, sale, or other disposition by a
Unitholder of a Unit of the Connecticut Trust held by him.

The portion of any interest income or capital gain of the
Connecticut Trust that is allocable to a Unitholder that is subject
to the Connecticut corporation business tax is includable in the
gross income of such Unitholder for purposes of such tax.


An interest in a Unit of the Connecticut Trust that is owned by or
attributable to a Connecticut resident at the time of his death is
includable in his gross estate for purposes of the Connecticut
succession tax and the Connecticut estate tax.


Florida Trusts - Tax Matters


The assets of each Florida Trust will consist solely of interest-
bearing obligations issued by or on behalf of the State of Florida,
its political subdivisions and authorities or by the Commonwealth
of Puerto Rico, Guam, the Virgin Islands, American Samoa, or the
Northern Mariana Islands (the "Bonds").


At the time of the closing for each Florida Trust, Carlton, Fields,
Ward, Emmanuel, Smith & Cutler, P.A., special counsel to the Trusts
for Florida tax matters, rendered an opinion under then existing
law substantially to the effect that:


For Florida State income tax purposes, the Florida Trust will not
be subject to the Florida income tax imposed by the Florida Code so
long as the Trust has no income subject to Federal taxation.   In
addition, political subdivisions of Florida do not impose any
income taxes.

Because Florida does not impose an income tax on individuals,
noncorporate Unitholders will not be subject to any Florida income
tax on income realized by the Trust.  Each corporate Unitholder
will be subject to Florida income taxation on its share of the
income realized by the Trust notwithstanding the tax-exempt status
of the interest received from any bonds under Section 103(a) of the
Internal Revenue Code of 1986 or any other Federal law, unless the
interest income constitutes Nonbusiness Income. Nevertheless, any
corporate Unitholder that has its commercial domicile in Florida
will be taxable under the Florida Code on its share of the Florida
Trust income which constitutes Nonbusiness Income.

Florida Trust Units will be subject to Florida estate tax only if
owned by Florida residents, certain natural persons not domiciled
in Florida, or certain natural persons not residents of the United
States.  However, the Florida estate tax is limited to the amount
of the credit allowable under the applicable Federal Revenue Act
(currently Section 2011 (and in some cases 2102) of the Internal
Revenue Code of 1986, as amended) for death taxes actually paid to
the several states.


Neither the Bonds nor the Units will be subject to the Florida ad
valorem property tax or Florida sales or use tax.

Because Bonds issued by the State of Florida or its political
subdivisions or by the Commonwealth of Puerto Rico, Guam, the
Virgin Islands, American Samoa and the Northern Mariana Islands are
exempt from Florida intangible personal property taxation under
Chapter 199, Florida Statutes, as amended, the Florida Trust will
not be subject to Florida intangible personal property tax.  In
addition, the Unitholders will not be subject to Florida intangible
personal property tax on the Units.

 
 

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Georgia Trusts - Tax Matters

Smith, Gambrell & Russell acted as special Georgia counsel to
Georgia Trust 188 and all prior Georgia Trusts. Chapman and Cutler,
Counsel for the Sponsor, acted as special Georgia Counsel to
Georgia Trust 189 and all subsequent Georgia Trusts, including all
Georgia Insured Trusts.  At the time of the closing for each
Georgia Trust, the respective counsel to the Trusts rendered an
opinion under then existing law substantially to the effect that:

For Georgia income tax purposes, the Georgia Trust is not an
association taxable as a corporation, and the income of the Georgia
Trust will be treated as the income of the Unitholders.  Interest
on the Bonds which is exempt from Georgia income tax when received
by the Georgia Trust, and which would be exempt from Georgia income
tax if received directly by a Unitholder, will retain its status as
tax-exempt interest when distributed by the Georgia Trust and
received by the Unitholders.


If the Trustee disposes of a Bond (whether by sale, exchange,
payment on maturity, retirement or otherwise) or if a Unitholder
redeems or sells his Units, the Unitholder will recognize gain or
loss for Georgia income tax purposes to the same extent that gain
or loss would be recognized for Federal income tax purposes (except
in the case of Georgia Bonds issued before March 11, 1987 issued
with original issue discount owned by the Georgia Trust, in which
case gain or loss for Georgia income tax purposes would be
determined by accruing said original issue discount on a ratable
basis).  Due to the amortization of bond premium and other basis
adjustments required by the Code, a Unitholder, under some
circumstances, may realize taxable gain when his or her Units are
sold or redeemed for an amount equal to their original cost.    
Because obligations or evidences of debt of Georgia, its political
subdivisions and public institutions and bonds issued by the
Government of Puerto Rico are exempt from the Georgia intangible
personal property tax, the Trust will not be subject to such tax as
the result of holding such obligations, evidences of debt or bonds. 
Although there currently is no  published administrative
interpretation or opinion of the Attorney General of Georgia
dealing with the status of bonds issued by a political subdivision
of Puerto Rico, counsel has been advised orally by representatives
of the Georgia Department of Revenue that such bonds would also be
considered exempt from such tax.  Based on that advice, and in the
absence of a published administrative interpretation to the
contrary, counsel is of the opinion that the Trust would not be
subject to such tax as the result of holding bonds issued by a
political subdivision of Puerto Rico.

Amounts paid by an insurer under an insurance policy or policies
issued to the Georgia Trust, if any, with respect to the bonds, in
the Trust which represent maturing interest on defaulted
obligations held by the Trustee will be exempt from Georgia income
taxes if, and to the extent as, such interest would have been so
exempt if paid by the issuer of the defaulted obligations.


Counsel have expressed no opinion regarding whether a Unitholder's
ownership of an interest in the Trust is subject to the Georgia
intangible personal property tax.  Although the application of the
Georgia intangible personal property tax to the ownership of the
Units by the Unitholders is not clear, representatives of the
Georgia Department of Revenue have in the past advised counsel
orally that, for purposes of the intangible property tax, the
Department considers a Unitholder's ownership of an interest in the
Trust as a whole to be taxable intangible property separate from
any ownership interest  in the underlying tax-exempt Bonds.

Neither the Bonds nor the Units will be subject to Georgia sales or
use tax.


Maryland Trusts - Tax Matters


The assets of each Maryland Trust will consist of interest-bearing
obligations issued by or on behalf of the State of Maryland, its
political subdivisions and authorities and, provided the interest
thereon is exempt from State income taxes by the laws or treaties
of the United States, obligations issued by or on behalf of the
United States' territories or possessions, including Puerto Rico,
Guam and the Virgin Islands, their political subdivisions and
authorities (the "Bonds").

At the time of the closing for each Maryland Trust, Venable,
Baetjer and Howard, special counsel for the Trusts for Maryland tax
matters, rendered an opinion under then existing law substantially
to the effect that:

For Maryland State and local income tax purposes, the Maryland
Trust will not be recognized as an association, and the income of
the Maryland Trust will be treated as the income of the
Unitholders.

For Maryland State and local tax purposes, interest on the Bonds
which is exempt from Maryland State and local income tax when
received by the Maryland Trust, and which would be exempt from
Maryland State and local income tax if received directly by a
Unitholder, will retain its status as tax-exempt interest when
received by the Maryland Trust and distributed to the Unitholders.
Interest derived from the Maryland Trust by a Unitholder with
respect to the Bonds will not be subject to Maryland State or local
income taxes; provided that interest derived from the Maryland
Trust by a financial institution, as defined in Section 8-101(c) of
the Tax-General Article of the Annotated Code of Maryland, will be
subject to the Maryland state franchise tax on financial
institutions, except to the extent such interest is expressly
exempt from the Maryland state franchise tax by the statutes which
authorize the issuance of such Bonds (see Section 8-204 of the Tax-
General Article of the Annotated Code of Maryland).





 
 

Page 59



A Unitholder will not be subject to Maryland state or local income
tax with respect to gain realized when Bonds held in the Maryland
Trust are sold, redeemed, or paid at maturity, except with respect
to gain realized upon a sale, redemption or payment at maturity of
such bonds as are issued by or on behalf of United States
territories or possessions, their political subdivisions and
authorities; such gain will equal the proceeds of sale, redemption
or payment, less the tax bases of the Bonds (adjusted to reflect
(a) the amortization of Bond premium or discount, and (b) the
deposit in the Maryland Trust after the Unitholder's settlement
date of Bonds with accrued interest).
Although the matter is not free from doubt, gain realized by a
Unitholder from the redemption, sale or other disposition of a
Maryland Trust Unit (i) will be subject to Maryland state income
tax except in the case of individual Unitholders who are not
Maryland residents, and (ii) will be subject to Maryland local
income tax in the case of individual Unitholders who are Maryland
residents.

If interest on indebtedness incurred or continued by a Unitholder
to purchase Units in the Maryland Trust is not deductible for
Federal income tax purposes, it will also be nondeductible for
Maryland state income tax purposes and, if applicable, local income
tax purposes.

Maryland Trust Units will be subject to Maryland inheritance and
estate tax only if held by Maryland residents. Neither the Bonds
nor the Maryland Trust Units will be subject to Maryland personal
property tax, sales tax or use tax.

Massachusetts Trusts - Tax Matters


Peabody & Arnold acted as special Massachusetts counsel to
Massachusetts Traditional Trust 182 and all prior Massachusetts
Traditional Trusts and to Massachusetts Insured Trust 44 and all
prior Massachusetts Insured Trusts. Edwards & Angell acted as
special Massachusetts counsel to Massachusetts Traditional Trust
183 and all subsequent Massachusetts Traditional Trusts and to
Massachusetts Insured Trust 45 and all subsequent Massachusetts
Insured Trusts.  At the time of the closing for each Massachusetts
Trust, the respective counsel to the Trusts rendered an opinion,
based on rulings by the Commissioner of Revenue and under then
existing law, substantially to the effect that:
For Massachusetts income tax purposes, the Massachusetts Trust will
be treated as a corporate trust under Section 8 of Chapter 62 of
the Massachusetts General Laws ("M.G.L.") and not as a grantor
trust under Section 10(e) of M.G.L. Chapter 62.
The Massachusetts Trust will not be held to be engaging in business
in Massachusetts within the meaning of said Section 8 and will,
therefore, not be subject to Massachusetts income tax.

Unitholders who are subject to Massachusetts income taxation under
M.G.L. Chapter 62 will not be required to include their respective
shares of the earnings of or distributions from the Massachusetts
Trust in their Massachusetts gross income to the extent that such
earnings or distributions represent tax-exempt interest excludable
from gross income for Federal income tax purposes received by the
Massachusetts Trust on obligations issued by Massachusetts, its
counties, municipalities, authorities, political subdivisions or
instrumentalities, or by Puerto Rico, the Virgin Islands, Guam, the
Northern Mariana Islands or other possessions of the United States
within the meaning of Section 103(c) of the Code ("Obligations").


In the case of a Massachusetts Insured Trust, Unitholders who are
subject to Massachusetts income taxation under M.G.L. Chapter 62
will not be required to include their respective shares of the
earnings of or distributions from such Trust in their Massachusetts
gross income to the extent that such earnings of or distributions
are derived from the proceeds of insurance obtained by the Sponsor
of such Trust or by the issuer or underwriter of an obligation held
by such Trust that represent maturing interest on defaulted
obligations held by the Trustee, if and to the same extent that
such earnings or distributions would have been excludable from the
gross income of such Unitholders if derived from interest paid by
the issuer of the defaulted obligation.  
 
Unitholders which are corporations subject to taxation under M.G.L.
Chapter 63 will be required to include their respective shares of
the earnings of or distributions from the Trust in their
Massachusetts gross income to the extent that such earnings or
distributions represent interest from bonds, notes or indebtedness
of any state, including Massachusetts, except for interest which is
specifically exempted from such tax by the acts authorizing
issuance of said Obligations.

The Massachusetts Trust's capital gains or capital losses, or both,
which are includable in the Federal gross income of Unitholders who
are subject to Massachusetts income taxation under M.G.L. Chapter
62, or Unitholders which are corporations subject to Massachusetts
income taxation under M.G.L. Chapter 63 will be included as capital
gains or losses, or both, in the Unitholders' Massachusetts gross
income, except for capital gain, which is specifically exempted
from income taxation under such Chapters by the acts authorizing
issuance of said Obligations.
Unitholders which are corporations subject to tax under M.G.L.
Chapter 63 and which are tangible property corporations will not be
required to include the Units when determining the value of their
tangible property. Unitholders which are intangible property
corporations will be required to include the Units when determining
their net worth.


Gains or losses realized on sale or redemption of Units by
Unitholders who are subject to Massachusetts income taxation under
M.G.L.  Chapter 62, or Unitholders which are corporations subject
to Massachusetts income taxation under M.G.L. Chapter 63, will be
includable in their Massachusetts gross incomes.  In determining
such gain or loss Unitholders will, to the same extent required as
for Federal tax purposes, have to adjust their tax bases for their
Units for accrued interest received, if any, on Obligations
delivered to the Trustee after the Unitholders pay for their Units,
for amortization of premiums, if any, on Obligations held by the
Massachusetts Trust, and for accrued original issue discount with
respect to each Obligation which, at the time the Obligation was
issued, had original issue discount.

 
 

Page 60




The Units of the Trust are not subject to any property tax levied
by Massachusetts or any political subdivision thereof,
nor to any income tax levied by any such political subdivision. 
They are includable in the gross estate of a deceased holder who is
a resident of Massachusetts for purposes of the Massachusetts
Estate Tax. Michigan Trusts - Tax Matters


At the time of the closing for each Michigan Trust, Dickinson,
Wright, Moon, Van Dusen & Freeman, special Michigan counsel to the
Trusts, rendered an opinion under then-existing law substantially
to the effect that:

The assets of a Michigan Trust will consist of interest-bearing
obligations issued by or on behalf of the State of Michigan, and
counties, municipalities, authorities and political subdivisions
thereof, and, in limited instances, bonds issued by Puerto Rico,
the Virgin Islands, Guam, the Northern Mariana Islands or
possessions of the United States (the "Bonds").
 
 
Under the Michigan income tax act, the Michigan single business tax
act, the Michigan intangibles tax act, the Michigan city income tax
act (which authorizes the only income tax ordinance that may be
adopted by cities in Michigan), and under the law which authorizes
a "first class" school district to levy an excise tax upon income,
the Michigan Trust is not subject to tax. The income of the
Michigan Trust will be treated as the income of the Unitholders
thereof and be deemed to have been received by them when received
by the Michigan Trust.
Interest on the Bonds in the Michigan Trust which is exempt from
Federal income tax is exempt from Michigan state and local income
taxes and from the Michigan single business tax.  Further, any
amounts paid under an insurance policy representing maturing
interest on defaulted obligations held by the Trustee will be
excludable from Michigan state and local income taxes and from the
Michigan single business tax if, and to the same extent as, such
interest would have been excludable if paid by the respective
issuer.

For purposes of the foregoing Michigan tax laws (corporations and
financial institutions are not subject to the Michigan income tax),
each Unitholder will be considered to have received his pro rata
share of Bond interest when it is received by the Michigan Trust,
and each Unitholder will have a taxable event when the Michigan
Trust disposes of a Bond (whether by sale, exchange, redemption or
payment at maturity) or when the Unitholder redeems or sells Units. 
Due to the requirement that tax cost be reduced to reflect
amortization of bond premium, under some circumstances a Unitholder 
may realize taxable gain when Units are sold or redeemed for an
amount equal to, or less than, their original cost.  The tax cost
of each Unit to a Unitholder will be allocated for purposes of
these Michigan tax laws in the same manner as the cost is allocated
for Federal income tax purposes.

Pursuant to the position of the Michigan Department of Treasury in
a bulletin dated December 19, 1986, reaffirmed in a bulletin dated
March 31, 1989, the portion of a Michigan Trust represented by the
Bonds will be exempt from the Michigan Intangibles Tax.  The
Department of Treasury has not indicated a position with respect to
treatment of amounts paid under a policy of insurance with respect
to maturing interest on defaulted obligations (which amounts would
have been excludable if paid by the respective issuer) for purposes
of determining the income base for the Michigan Intangibles Tax.


If a Unitholder is subject to the Michigan single business tax
(i.e., is engaged in a "business activity" as defined in the
Michigan single business tax act), and has a taxable event for
Federal income tax purposes when the Michigan Trust sells or
exchanges Bonds or the Unitholder sells or exchanges units, such
event may affect the adjusted tax base upon which the single
business tax is computed.  Any capital gain or loss realized from
such taxable event which was included in the computation of the
Unitholder's Federal taxable income, plus the portion, if any, of
such capital gain excluded in such computation and minus the
portion, if any, of such capital loss not deducted in such
computation for the year the loss occurred, will be included in the
adjusted tax base.  The adjusted tax base of any person other than
a corporation is affected by any gain or loss realized from the
taxable event only to the extent that the resulting Federal taxable
income is derived from "business activity."


Minnesota Trusts - Tax Matters


At the time of the closing for each Minnesota Trust, Dorsey &
Whitney, special Minnesota counsel for the Trusts, rendered an
opinion under then-existing law substantially to the effect that:

Counsel understands that the Minnesota Trust will have no income
other than (i) interest income on bonds issued by the State of
Minnesota and its political and governmental subdivisions,
municipalities and governmental agencies and instrumentalities and
on bonds issued by Puerto Rico, the Virgin Islands, the Northern
Mariana Islands or Guam which would be exempt from Federal and
Minnesota income taxation when paid directly to an individual,
trust or estate (and the term "Bonds" as used herein refers only to
such bonds), (ii) gain on the disposition of such Bonds, and (iii)
proceeds paid under certain insurance policies issued to the
Trustee or to the issuers of the Bonds which represent maturing
interest or principal payments on defaulted Bonds held by the
Trustee.

"Taxable income" for Minnesota income tax purposes is the same as
"taxable income" for Federal income tax purposes with certain
modifications that (with one exception) do not apply to the present
circumstances.  The exception is that corporations must add to
Federal taxable income the amount of any interest received on the
obligations of states and their agencies and instrumentalities,
political and governmental subdivisions, and municipalities.  The
terms "trust" and "corporation" have the same meanings for
Minnesota income tax purposes, as relevant to the Minnesota tax
status of the Minnesota Trust, as for Federal income tax purposes.




 
 

Page 61



In view of the relationship between Federal and Minnesota law
described in the preceding paragraph and the opinion of Chapman and
Cutler with respect to the Federal tax treatment of the Minnesota
Trust and its Unitholders, (1) the Minnesota Trust will be treated
as a trust rather than a corporation for Minnesota income tax
purposes and will not be deemed the recipient of any Minnesota
taxable income; (2) each Unitholder of the Minnesota Trust will be
treated as the owner of a pro rata portion of the Minnesota Trust
for Minnesota income tax purposes and the income of the Minnesota
Trust will therefore be treated as the income of the Unitholders
under Minnesota law; (3) interest on the Bonds will be exempt from
Minnesota income taxation of Unitholders who are individuals,
trusts and estates, when received by the  Minnesota Trust and
attributed to such Unitholders and when distributed to such
Unitholders (except as hereinafter provided with respect to
"industrial development bonds" and "private activity bonds" held by
"substantial users"); (4) interest on the Bonds will be includable
in the Minnesota taxable income (subject to allocation and
apportionment) of Unitholders that are corporations; (5) each
Unitholder will realize taxable gain or loss when the Minnesota
Trust disposes of a Bond (whether by sale, exchange, redemption or
payment at maturity) or when the Unitholder redeems or sells Units
at a price  which differs from original cost as adjusted for
amortization of bond discount or premium and other basis
adjustments (including any basis reduction that may be required to
reflect a Unitholder's share of interest, if any, accruing on Bonds
during the interval between the Unitholder's settlement date and
the date such Bonds are delivered to the Minnesota Trust, if
later); (6) tax cost reduction requirements relating to
amortization of bond premium may, under some  circumstances, result
in Unitholders' realizing taxable gain when their Units are sold or
redeemed for an amount equal to or less than their original cost;
(7) any proceeds paid under an insurance policy issued to the
Trustee with respect to the Bonds which represent maturing interest
on defaulted obligations held by the Trustee will be excludable
from Minnesota gross income if, and to the same extent as, such
interest would have been so excludable if paid by the issuer of the
defaulted obligation; (8) any proceeds paid under individual
insurance policies obtained by issuers of Bonds which  represent
maturing interest on defaulted obligations held by the Trustee will
be excludable from Minnesota gross income if, and to the same
extent as, such interest would have been so excludable if paid in
the normal course by the issuer of the defaulted obligations; (9)
net capital gains of Unitholders attributable to the Bonds will be
fully includable in the Minnesota taxable income of Unitholders
(subject to allocation and apportionment in the case of corporate
Unitholders);  and (10) interest on bonds includable in the
computation of "alternative minimum taxable income" for Federal
income tax  purposes will also be includable in the computation of
"alternative minimum taxable income" for Minnesota income tax
purposes.

Interest income attributable to Bonds that are "industrial
development bonds" or "private activity bonds" as those terms are
defined in the Internal Revenue Code, will be taxable under
Minnesota law to a Unitholder who is a "substantial user" of the
facilities financed by the proceeds of such Bonds (or a "related
person" to such a "substantial user") to the same extent as if such
Bonds were held directly by such Unitholder.

Missouri Trusts - Tax Matters


At the time of the closing for each Missouri Trust, Watson, Ess,
Marshall & Enggas, special counsel to the Trusts for Missouri tax
matters, rendered an opinion under then-existing Missouri income
tax law (not including any Missouri law imposing a franchise tax)
applicable to corporations with Missouri taxable income and to
individuals who are Missouri residents for Missouri income tax
purposes substantially to the effect that:

The Missouri Trust will not be an association taxable as a
corporation for purposes of Missouri income taxation.

Each Missouri Unitholder will be treated as owning a pro rata share
of each asset of the Missouri Trust for Missouri income tax
purposes in the proportion that the number of Units of such Trust
held by the Unitholder bears to the total number of outstanding
Units of the Missouri Trust, and the income of the Missouri Trust
will therefore be treated as the income of each Missouri Unitholder
under Missouri law in the proportion described.

Interest on Bonds that would not be includable in Missouri adjusted
gross income when paid directly to a Missouri Unitholder will not
be includable in Missouri adjusted gross income when received by
the Missouri Trust and attributed to such Missouri Unitholder or
when distributed to such Missouri Unitholder.
Each Missouri Unitholder will realize taxable gain or loss when the
Missouri Trust disposes of a Bond (whether by sale, exchange,
redemption, or payment at maturity) at a gain or loss or when the
Missouri Unitholder redeems or sells Units at a price that differs
from the adjusted basis.  Gain or loss and the adjusted basis will
be computed in the same manner as for Federal income tax treatment. 
Due to the amortization of bond premium and other basis adjustments
required by the Internal Revenue Code, a Missouri Unitholder, under
some circumstances, may realize taxable gain when his or her Units
are sold or redeemed for an amount equal to or less than their
original cost.

If interest on indebtedness incurred or continued by a Missouri
Unitholder to purchase Units in the Missouri Trust is not
deductible for Federal income tax purposes, it also will be
nondeductible for Missouri income tax purposes.

Obligations issued by U.S. Possessions will not be subject to a
Missouri intangibles tax or a personal property tax.
New Jersey Trusts - Tax Matters
 
 
The assets for each New Jersey Trust will consist of interest-
bearing obligations issued by or on behalf of the State of New
Jersey and counties, municipalities, authorities and other
political subdivisions thereof, and certain territories of the
United States, including Puerto Rico, Guam, the Virgin Islands and
the Northern Mariana Islands (the "Bonds").

At the time of the closing for each New Jersey Trust, Pitney,
Hardin, Kipp & Szuch, special counsel to the Trusts for New Jersey
tax matters, rendered an opinion under then-existing law
substantially to the effect that:


 
 

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The New Jersey Trust will be recognized as a trust and not an
association taxable as a corporation.  The New Jersey Trust will
not be subject to the New Jersey Corporation Business Tax or the
New Jersey Corporation Income Tax.

With respect to the non-corporate Unitholders who are residents of
New Jersey, the income of the New Jersey Trust will be treated as
the income of such Unitholders under the New Jersey Gross Income
Tax.  Interest on the underlying Bonds which is exempt from tax
under the New Jersey Gross Income Tax Law when received by the New
Jersey Trust will retain its status as tax-exempt interest when
distributed to Unitholders.
A non-corporate Unitholder will not be subject to the New Jersey
Gross Income Tax on any gain realized either when a New Jersey
Trust disposes of a Bond (whether by sale, exchange, redemption, or
payment at maturity) or when the Unitholder redeems or sells his
Units.  Any loss realized on such disposition may not be utilized
to offset gains realized by such Unitholder on the disposition of
assets the gain on which is subject to the New Jersey Gross Income
Tax.
 
 
Units of the New Jersey Trust may be taxable on the death of a
Unitholder under the New Jersey Transfer Inheritance Tax Law or the
New Jersey Estate Tax Law.


If a Unitholder is a corporation subject to the New Jersey
Corporation Business Tax or New Jersey Corporation Income Tax,
interest from the Bonds in the New Jersey Trust which is allocable
to such corporation will be includable in its entire net income for
purposes of the New Jersey Corporation Business Tax or New Jersey
Corporation Income Tax, less any interest expense incurred to carry
such investment to the extent such interest expense has not been
deducted in computing Federal taxable income.  Net gains derived by
such corporation on the disposition of the Bonds by the New Jersey
Trust or on the disposition of its Units will be included in its
entire net income for purposes of the New Jersey Corporation
Business Tax or New Jersey Corporation Income Tax.

New York Trusts - Tax Matters
 
 
In the opinion of Edwards & Angell, special counsel to the Trusts
for New York tax matters, under existing law:

Interest on obligations issued by New York State, a political
subdivision thereof, Puerto Rico, the Virgin Islands, Guam, the
Northern Mariana Islands, or other possessions of the United States
within the meaning of Section 103(c) of the Code ("New York
Obligations"), which would be exempt from New York State or New
York City personal income tax if directly received by the
Unitholder will retain its status as tax-exempt interest when
received by the New York Trust and distributed to such Unitholder.

Interest (less amortizable premium, if any) derived from the New
York Trust by a resident of New York State (or New York City) in
respect of bonds issued by states other than New York (or their
political subdivisions) will be subject to New York State (or New
York City) personal income tax.

A resident of New York State (or New York City) will be subject to
New York State (or New York City) personal income tax with respect
to gains realized when New York Obligations held in the New York
Trust are sold, redeemed or paid at maturity or when his Units are
sold or redeemed; such gain will equal the proceeds of sale,
redemption or payment less the tax basis of the New York Obligation
or Unit (adjusted to reflect (a) the amortization of premium or
discount, if any, on New York Obligations held in the Trust, (b)
accrued original issue discount, with respect to each New York
Obligation which, at the time the New York Obligation was issued,
had original issue discount, and (c) the deposit of New York
Obligations with accrued interest in the Trust after the
Unitholder's settlement date).

Interest or gain from the New York Trust derived by a Unitholder
who is not a resident of New York State (or New York City) will not
be subject to New York State (or New York City) personal income
tax, unless the Units are property employed in a business, trade,
profession or occupation carried on in New York State (or New York
City).
Amounts paid on defaulted New York Obligations held by the Trustee
under policies of insurance issued with respect to such New York
Obligations will be excludable from income for New York State and
New York City income tax purposes, if and to the same extent as,
such interest would have been excludable if paid by the respective
issuer.

For purposes of the New York State and New York City franchise tax
on corporations, Unitholders which are subject to such tax will be
required to include in their entire net income any interest or
gains distributed to them even though distributed in respect of New
York Obligations.


If borrowed funds are used to purchase Units in the Trust, all (or
part) of the interest on such indebtedness will not be deductible
for New York State and New York City tax purposes.  The purchase of
Units may be considered to have been made with borrowed funds even
though such funds are not directly traceable to the purchase of
Units in any New York Trust.


North Carolina Trusts - Tax Matters


The assets of the Trust will consist of interest-bearing
obligations issued by or on behalf of the State of North Carolina,
its political subdivisions and authorities and, provided the
interest thereon is exempt from North Carolina income taxes by the
laws or treaties of the United States, by or on behalf of the
United States territories or possessions (including Puerto Rico,
the Virgin Islands, Guam and the Northern Mariana Islands), their
political subdivisions and authorities (the "North Carolina
Bonds").


The North Carolina Trust is not an association taxable as a
corporation for North Carolina income tax purposes. Interest on the
North Carolina Bonds which is exempt from North Carolina income tax
when received by the North Carolina Trust will retain its status as
tax-exempt interest when distributed to Unitholders.

 
 

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For North Carolina income tax purposes, each Unitholder will have
a taxable event when, upon redemption or sale of his Units, he
receives cash or other property. Gain or loss will be determined by
computing the difference between the proceeds of such a redemption
or sale and the Unitholder's adjusted basis for the Units.

For North Carolina income tax purposes, each Unitholder will have
a taxable event when the North Carolina Trust disposes of one of
the North Carolina Bonds (whether by sale, payment at maturity,
retirement or otherwise); provided that when any of the North
Carolina Bonds held by the North Carolina Trust have been issued
under an act of the General Assembly of North Carolina that
provides that all income from such Bond, including a profit made
from the sale thereof, shall be free from all taxation by the State
of North Carolina, any such profit received by the North Carolina
Trust will retain its tax-exempt status in the hands of each
Unitholder.

Ownership of the Units representing a pro rata ownership of the
North Carolina Bonds is exempt from the North Carolina tax on
intangible personal property so long as the corpus of the Trust is
composed entirely of North Carolina obligations or is composed
entirely of obligations of the United States and its possessions
and North Carolina and at least eighty percent (80%) of the fair
market value of such obligations represents North Carolina
obligations; provided that for this exemption to apply, the Trustee
must periodically provide to the North Carolina Department of
Revenue such information about the North Carolina Trust as required
by applicable law.

Interest on indebtedness paid or incurred by a Unitholder in
connection with ownership of Units in the North Carolina Trust will
not be deductible by the Unitholder for North Carolina state income
tax purposes.
Amortization of North Carolina Bond premiums is mandatory for North
Carolina state income tax purposes for all North Carolina resident
Unitholders. Amortization for the taxable year is accomplished by
lowering the basis or adjusted basis of the Units, with no
deduction against gross income for the year.

Trust Units will be subject to North Carolina inheritance and
estate tax if owned by a North Carolina resident on the date of his
death.   Neither the North Carolina Bonds nor the Units will be
subject to the North Carolina sales tax or use tax.


Ohio Trusts - Tax Matters


Each Ohio Trust is comprised primarily of interest-bearing
obligations issued by or on behalf of the State of Ohio, political
subdivisions thereof, or agencies or instrumentalities thereof (the
"Ohio Obligations"), or by the governments of Puerto Rico, the
Virgin Islands, the Northern Mariana Islands or Guam ("Territorial
Obligations") (collectively, "Obligations").


At the time of the closing for each Ohio Trust, Squire, Sanders &
Dempsey, special Ohio counsel to the Trusts, rendered an opinion
under then-existing law substantially to the effect that:

The Ohio Trust is not taxable as a corporation or otherwise for
purposes of the Ohio income tax, Ohio school district income taxes,
the Ohio corporation franchise tax or the Ohio dealers in
intangibles tax.

Income of the Ohio Trust will be treated as the income of the
Unitholders for purposes of the Ohio income tax, Ohio school
district income taxes, Ohio municipal income taxes and the Ohio
corporation franchise tax in proportion to the respective interest
therein of each Unitholder.


Interest on Obligations held by the Ohio Trust is exempt from the
Ohio personal income tax, Ohio municipal income taxes and Ohio
school district income taxes and is excluded from the net income
base of the Ohio corporation franchise tax when distributed or
deemed distributed to Unitholders.

Proceeds paid under insurance policies, if any, to the Trustee of
the Ohio Trust, representing maturing interest on defaulted
obligations held by the Ohio Trust will be exempt from the Ohio
personal income tax, Ohio school district income taxes, Ohio
municipal income taxes and the net income base of the Ohio
corporation franchise tax if, and to the same extent as, such
interest would be exempt from such taxes if paid directly by the
issuer of such obligations.

Gains and losses realized on the sale, exchange or other
disposition by the Ohio Trust of Ohio Obligations are excluded in
determining adjusted gross and taxable income for purposes of the
Ohio personal income tax, Ohio municipal income taxes and Ohio
school district income taxes and are excluded from the net income
base of the Ohio corporation franchise tax when distributed or
deemed distributed to Unitholders.

Oregon Trusts - Tax Matters


At the time of the closing for each Oregon Trust, Schwabe,
Williamson, Wyatt, Moore & Roberts, special counsel to the Trusts
for Oregon tax matters, who relied on the opinion of Chapman and
Cutler, rendered at such time, rendered an opinion under then-
existing Oregon law applicable to individuals who are Oregon
residents for Oregon tax purposes substantially to the effect that:


The Oregon Trust is not an association taxable as a corporation for
Oregon income tax or corporate excise tax purposes.


Each Unitholder of the Oregon Trust will be considered the owner of
an aliquot portion of the Oregon Trust for purposes of Oregon
personal income taxes.


An item of Oregon Trust income which would be exempt from income
tax under Oregon law if directly received by a Unitholder and which
is exempt from income tax under Oregon law when received by the
Oregon Trust will retain its status as tax-exempt when distributed
by such Oregon Trust and received by the Unitholders.


 
 

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A Unitholder of the Oregon Trust will have a taxable event when the
Oregon Trust disposes of a trust asset (whether by sale, payment on
maturity, retirement or otherwise) or when the Unitholder redeems
or sells his Units. Because of the requirement that tax cost basis
be reduced to reflect amortization of bond premiums, if any, on
obligations held by the Oregon Trust, a Unitholder may realize
taxable gains when his Units are sold or redeemed for an amount
equal to or less than his original cost.


To the extent that the assets of the Oregon Trust consist of
intangible personal property, such assets and any interest thereon
are exempt from property tax under Oregon law.

Pennsylvania Trusts - Tax Matters


At the time of the closing for each Pennsylvania Trust, Dechert
Price & Rhoads, special Pennsylvania counsel to the Trusts,
rendered an opinion under then existing law substantially to the
effect that:

Units evidencing fractional undivided interests in the Pennsylvania
Trusts are not subject to any of the personal property taxes
presently in effect in Pennsylvania to the extent of that
proportion of the Trusts represented by Bonds issued by the
Commonwealth of Pennsylvania, its agencies and instrumentalities,
or by any county, city, borough, town, township, school district,
municipality and local housing or parking authority in the
Commonwealth of Pennsylvania or issued by Puerto Rico, the Virgin
Islands, Guam, or the Northern Mariana Islands ("Pennsylvania
Bonds").  The taxes referred to above include the County Personal
Property Tax, the additional personal property taxes imposed on
Pittsburgh residents by the School District of Pittsburgh and by
the City of Pittsburgh. Pennsylvania Trust Units may be taxable
under the Pennsylvania inheritance and estate taxes.

The proportion of interest income representing interest income from
Pennsylvania Bonds distributed to Unitholders of a Pennsylvania
Trust is not taxable under the Pennsylvania Personal Income Tax or
under the Corporate Net Income Tax imposed on corporations by
Article IV of the Tax Reform Code.  Nor will such interest be
taxable under the Philadelphia School District Investment Income
Tax imposed on Philadelphia resident individuals.

The disposition by a Pennsylvania Trust of a Pennsylvania Bond
(whether by sale, exchange, redemption or payment at maturity) will
not constitute a taxable event to a Unitholder under the
Pennsylvania Personal Income Tax. Further, although there is no
published authority on the subject, counsel is of the opinion that
(i) a Unitholder of a Pennsylvania Trust will not have a taxable
event under the Pennsylvania State and local income taxes referred
to in the preceding paragraph (other than the Corporate Net Income
Tax) upon the redemption or sale of his Unit to the extent that the
Pennsylvania Trust is then comprised of Pennsylvania Bonds and (ii)
the disposition by a Pennsylvania Trust of a Pennsylvania Bond
(whether by sale, exchange, redemption or payment at maturity) will
not constitute a taxable event to a Unitholder under the
Corporation Net Income Tax or the Philadelphia School District
Investment Income Tax. (The School District tax has no application
to gain on the disposition of property held by the taxpayer for
more than six months.)


Tennessee Trusts - Tax Matters


At the time of the closing for each Tennessee Trust, Chapman and
Cutler, special counsel for the Trusts for Tennessee tax matters,
rendered an opinion under then-existing law substantially to the
effect that:

The assets of the Trust will consist of bonds issued by the State
of Tennessee (the "State"), or any county or any municipality or
political subdivision thereof, including any agency, board,
authority or commission, the interest on which is exempt from the
Hall Income Tax imposed by the State of Tennessee ("Tennessee
Bonds"), or by the Commonwealth of Puerto Rico or its political
subdivisions (the "Puerto Rico Bonds") (collectively, the "Bonds").

Under the recently amended provisions of Tennessee law, a unit
investment trust taxable as a grantor trust for Federal income tax
purposes is entitled to special Tennessee State tax treatment (as
more fully described below) with respect to its proportionate share
of interest income received or accrued with respect to Tennessee
Bonds.  The recent amendments also provide an exemption for
distributions made be a unit investment trust or mutual fund that
are attributable to "bonds or securities of the United States
government or instrumentality thereof" ("U.S. Government, Agency or
Instrumentality Bonds"). If it were determined that the Trust held
assets other than Tennessee Bonds or U.S. Government, Agency, or
Instrumentality Bonds, a proportionate share of distributions from
the Trust would be taxable to Unitholders for Tennessee Income Tax
purposes.  Further, because the Legislation only provides an
exemption for distributions that relate to interest income,
distributions by the Trust that relate to capital gains realized
from the sale or redemptions of Tennessee Bonds or U.S. Government,
Agency, or Instrumentality Bonds are likely to be treated as
taxable dividends for purposes of the Hall Income Tax. However,
capital gains realized directly by a Unitholder when the Unitholder
sells or redeems, his Unit will not be subject to the Hall Income
Tax.  The opinion set forth below assumes that the interest on the
Tennessee Bonds, if received directly by a Unitholder, would be
exempt from the Hall Income Tax under State law.  This opinion does
not address the taxation of persons other than full-time residents
of the State of Tennessee.


Because the recent amendments only provide an exemption for
distributions attributable to interest on Tennessee Bonds or U.S.
Government, Agency or Instrumentality Bonds, it must be determined
whether bonds issued by the Government of Puerto Rico qualify as
U.S. Government, Agency or Instrumentality Bonds.  For Hall Income
Tax purposes, there is currently no published administrative
interpretation or opinion of the Attorney General of Tennessee
dealing with the status of distributions made by unit investment
trusts such as the Tennessee Trust that are attributable to
interest paid on bonds issued by the Government of Puerto Rico. 
However, in a letter dated August 14, 1992 (the "Commissioner's
Letter"), the Commissioner of the State of Tennessee Department of
Revenue advised that Puerto Rico would be an "Instrumentality" of
the U.S. Government and treated bonds issued by the Government of
Puerto Rico as U.S. Government, Agency or Instrumentality Bonds.

 
 

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Based on this conclusion, the Commissioner advised that
distributions from a mutual fund attributable to investments in
Puerto Rico Bonds are exempt from the Hall Income Tax.  Both the
Sponsor and Chapman and Cutler, for purposes of its opinion (as set
forth below), have assumed, based on the Commissioner's Letter,
that bonds issued by the Government of Puerto Rico are U.S.
Government, Agency or Instrumentality Bonds.  However, it should be
noted that the position of the Commissioner is not binding, and is
subject to change, even on a retroactive basis.

The Sponsor cannot predict whether new legislation will be enacted
into law affecting the tax status of Tennessee Trusts.  The
occurrence of such an event could cause distributions of interest
income from the Trust to be subject to the Hall Income Tax. 
Additional information regarding such proposals is currently
unavailable.  Investors should consult their own tax advisors in
this regard.
In the opinion of Chapman and Cutler, Special Counsel to the Trust
for Tennessee tax matters, under existing law as of the date
hereof:


For purposes of the Hall Income Tax, the Tennessee Excise Tax
imposed by Section 67-4-806 (the "State Corporate Income Tax"), and
the Tennessee Franchise Tax imposed by Section 67-4-903, the Trust
will not be subject to such taxes.


For Hall Income Tax purposes, a proportionate share of such
distributions from the Trust to Unitholders, to the extent
attributable to interest on the Tennessee Bonds (based on the
relative proportion of interest received or accrued attributable to
Tennessee Bonds), will be exempt from the Hall Income Tax when
distributed to such Unitholders. Based on the Commissioner's
Letter, distributions from the Trust to Unitholders, to the extent
attributable to interest on the Puerto Rico Bonds (based on the
relative proportion of interest received or accrued attributable to
the Puerto Rico Bonds), will be exempt from the Hall Income Tax
when distributed to such Unitholders.  A proportionate share of
distributions from the Tennessee Trust attributable to assets other
than the Bonds, would not, under current law, be exempt from the
Hall Income Tax when distributed to Unitholders.

For State Corporate Income Tax purposes, Tennessee law does not
provide an exemption for interest on Tennessee Bonds and requires
that all interest excludable from Federal gross income must be
included in calculating "net earnings" subject to the State
Corporate Income Tax.  No opinion is expressed regarding whether
such tax would be imposed on the earnings or distributions of the
Trust (including interest on the Bonds or gain realized upon the
disposition of the Bonds by the Trust) attributable to Unitholders
subject to the State Corporate Income Tax.  However, based upon
prior written advice from the Tennessee Department of Revenue,
earnings and distributions from the Trust (including interest on
the Bonds or gain realized upon the disposition of the Bonds by the
Trust) attributable to the Unitholders should be exempt  from the
State Corporate Income Tax.  The position of the Tennessee
Department of Revenue is not binding, and is subject to change,
even on a retroactive basis.

Each Unitholder will realize taxable gain or loss for State
Corporate Income Tax purposes when the Unitholder redeems or sells
his Units at a price that differs from original cost as adjusted
for accretion or any discount or amortization of any premium and
other basis adjustments, including any basis reduction that may be
required to reflect a Unitholder's share of interest, if any,
accruing on Bonds during the interval between the Unitholder's
settlement date and the date such Bonds are delivered to the Trust,
if later.  Tax basis reduction requirements relating to
amortization of bond premium may, under some circumstances, result
in Unitholders realizing taxable gain when the Units are sold or
redeemed for an amount equal to or less than their original cost.


For purposes of the Tennessee Property Tax, the Trust will be
exempt from taxation with respect to the Bonds it holds. As for the
taxation of the Units held by the Unitholders, although intangible
personal property is not presently subject to Tennessee taxation,
no opinion is expressed with regard to potential property taxation
of the Unitholders with respect to the Units because the
determination of whether property is exempt from such tax is made
on a county by county basis.


The Bonds and the Units held by the Unitholder will not be subject
to Tennessee sales and use taxes.

No opinion is expressed as to the exemption from State income taxes
of the interest on the Bonds if received directly by a Unitholder.


Texas Trusts - Tax Matters


The State of Texas currently imposes no income tax.  However,
several proposals have been introduced in the Texas Legislature
that would, among other things, impose a Texas income tax on
individuals, trusts and businesses.  It is impossible to predict
whether any such proposals will be enacted, and whether, if
enacted, any such law would exempt interest on Texas Bonds (or out
of state Bonds) from the Texas income tax, or if so whether income
distributed by a Texas Trust would retain its tax-exempt status
when received by unitholders. While no opinion is rendered as to
whether income distributions from any Texas Trust will be exempt
from any income tax that may be imposed on residents of Texas in
the future, at the time of the closing for each Texas Trust,
Johnson & Gibbs, P.C., special Texas counsel to the Texas Trusts,
rendered an opinion pursuant to then existing Texas law applicable
to individuals who are residents of Texas for Texas tax purposes
substantially to the effect that:

Neither the State nor any political subdivision of the State
currently imposes an income tax.  Therefore, no portion of any
distribution received by a Unitholder of a Texas Trust in respect
of his Units is subject to income taxation by the State or any
political subdivision of the State;



 
 

Page 66




Except in the case of certain transportation businesses, savings
and loan associations and insurance companies, no Unit of the Fund
is taxable under any property tax levied in the State;

The "inheritance tax" of the State, imposed upon certain transfers
of property of a deceased resident individual Unitholder, may be
measured in part upon the value of Units of a Texas Trust included
in the estate of such Unitholder; and


With respect to any Unitholder which is subject to the State
corporate franchise tax, Units in a Texas Trust held by such
Unitholder, and distributions received thereon, will be taken into
account in computing the taxable capital of the Unitholder
allocated to the State, upon which such franchise tax is measured.

Virginia Trusts - Tax Matters


At the time of the closing for each Virginia Trust, Christian,
Barton, Epps, Brent & Chappell, special counsel for the Trusts for
Virginia tax matters, rendered an opinion under then existing law
substantially to the effect that:

The assets of each Virginia Trust will consist of interest-bearing
obligations issued by or on behalf of the Commonwealth of Virginia,
its counties, municipalities, authorities or political subdivisions
and, provided the interest thereon is exempt from Virginia income
taxes by the laws or treaties of the United States, by or on behalf
of the United States' territories or possessions, including Puerto
Rico, Guam, the Virgin Islands and the Northern Mariana Islands,
and their political subdivisions and authorities (the "Virginia
Bonds").

The Virginia Trust will be treated as a trust for Virginia income
tax purposes and not as an association taxable as a corporation. 
As a result, income of the Virginia Trust will be treated as the
income of the Unitholders.

The calculation of Virginia taxable income begins with Federal
adjusted gross income in the case of an individual or Federal
taxable income in the case of a corporation, estate or trust. 
Certain modifications are specified, but no such modification
requires the addition of interest on obligations such as the
Virginia Bonds in the Virginia Trusts. Accordingly, amounts
representing tax-exempt interest for Federal income tax purposes
received or accrued by the Virginia Trusts with respect to the
Virginia Bonds, will not be taxed to the Virginia Trusts or to the
Unitholders for Virginia income tax purposes.


In this respect, to the extent that interest on obligations of the
Commonwealth or any political subdivision or instrumentality
thereof is included in Federal adjusted gross income, Virginia law
provides that the income should be subtracted in arriving at
Virginia taxable income.  In addition, Virginia income tax
exemption is independently provided for interest on certain
obligations, including those issued by industrial development
authorities created pursuant to the Virginia Industrial Development
and Revenue Bond Act, by the Virginia Housing Development
Authority, by the Virginia Resources Authority and by the Virginia
Education Loan Authority.  Where such an independent exemption is
provided, interest on such obligations is exempt from Virginia
income taxation without regard to any exemption from Federal income
taxes, including interest which may be subject to Federal income
tax in the hands of a recipient who is, or is a related person to,
a substantial user of facilities financed with the proceeds of
obligations upon which such interest is paid.

As a general rule, to the extent that gain (whether as a result of
the sale of Bonds by the Virginia Trust or as a result of the sale
of a Unit by the Unitholder) is subject to Federal income taxation,
such gain will be included in the Unitholder's Virginia taxable
income.  Under the language of certain enabling legislation,
however, such as the Virginia Industrial Development and Revenue
Bond Act and the Virginia Housing Development Authority Act, profit
made on the sale of obligations issued by authorities created
thereunder is expressly exempt from Virginia income taxation.  Such
enabling legislation does not appear to require a disallowance in
the calculation of Virginia taxes of any loss that may be
deductible for Federal income tax purposes with respect to such
obligations, although the Virginia Department of Taxation has taken
a contrary view.

No income tax is imposed by any political subdivision of the
Commonwealth of Virginia. The Commonwealth of Virginia does not
impose a gift tax.  The Virginia estate tax is equal to the maximum
state death tax credit allowable against the Federal estate tax
payable by the estate.

COUNSEL FOR TRUSTEE


At the time of the closing for each Trust, Carter, Ledyard &
Milburn, counsel for the Trustee and, in the absence of a New York
Trust from a Series, special counsel for such Series for New York
tax matters, rendered an opinion under then existing law
substantially to the effect that:

Under the income tax laws of the State and City of New York, each
Trust is not an association taxable as a corporation and the income
of each Trust will be treated as the income of the Unitholders.

OPERATING EXPENSES


No annual advisory fee is charged the Trusts by the Sponsor.  The
Sponsor does, however, receive a fee of $0.17 per annum per $1,000
principal amount of the underlying Bonds in each Trust for
regularly evaluating the Bonds and for maintaining surveillance
over the portfolio. (See "Unit Value and Evaluation.") Except as
provided below, for Traditional Trusts, the Trustee receives for
ordinary recurring services an annual fee computed at $1.08 per
$1,000 principal amount of underlying Bonds in the Trusts for those
portions of each Trust under the monthly plan of distribution and
$0.76 and $0.57 per $1,000 principal amount of underlying Bonds,
respectively, for those portions of each Trust representing
quarterly and semi-annual distribution plans; for Insured Trusts,
the Trustee receives for ordinary recurring services, except as
stated below, an annual fee computed at $1.12 per $1,000 principal
amount of underlying Bonds in the Trusts for that portion of each
Trust under the monthly distribution plan and $0.80 and $0.61 per
$1,000 principal amount of underlying Bonds, respectively, for
those portions of each Trust representing quarterly and semi-annual
distribution plans.
 
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For the following Traditional  Trusts, the Trustee receives for
ordinary recurring services an annual fee computed at
$1.02 per $1,000 principal amount of underlying Bonds for those
portions of each such Trust under the monthly plan of distribution
and $0.72 and $0.54 per $1,000 principal amount of underlying
Bonds, respectively, for those portions of each such Trust
representing quarterly and semi-annual distribution plans: National
Trusts 347-380, Short Intermediate Trusts 8-17, Intermediate Trusts
47-60, Long Intermediate Trusts 2-7, Intermediate California Trusts
1-3, Intermediate New York Trusts 1 & 2, Arizona Trusts  182-191,
California Trusts 189-203, Colorado Trusts 180-186, Connecticut
Trusts 184-198, Georgia Trusts 180-187, Massachusetts Trusts
186-198, Maryland Trusts 187-199, Michigan Trusts 184-196,
Minnesota Trusts 181-185, Missouri  Trusts 3-8, North Carolina
Trusts 182-194, New Jersey Trusts 185-195, New York Trusts 189-203,
Ohio Trusts 181-186, Pennsylvania Trusts 183-193, Virginia Trusts
186-197, Short Term Trusts 4-11.  For the following Insured Trusts,
the Trustee receives for ordinary recurring services an annual fee
computed at $1.06 per $1,000 principal amount of underlying Bonds
for those portions of each such Trust under the monthly plan of
distribution and $0.76 and $0.58 per $1,000 principal amount of
underlying Bonds, respectively, for those portions of each Trust
representing quarterly and semi-annual distribution plan:  National
Trusts 61-84, Short Intermediate Trusts 3-9, Intermediate Trusts
22-32, Long Intermediate Trusts 6-11, California Trusts 59-74,
Colorado Trusts 1-3, Florida Trusts 51-67, New Jersey Trust 47-61,
New York Trust 50-62, Ohio Trusts 6-14, Pennsylvania Trusts 48-62. 
The Trustee's fee may be adjusted provided that all adjustments
upward will not exceed the cumulative percentage increases of the
United States Department of Labor's Consumer Price Index entitled
"All Services Less Rent" since the establishment of the Trusts. 
The Trustee has the use of funds, if any, being held in the
Interest and Principal Accounts of each Trust for future
distributions, payment of expenses and redemptions. These Accounts
are non-interest bearing to Unitholders.  Pursuant to normal
banking procedures, the Trustee benefits from the use of funds held
therein. Part of the Trustee's compensation for its services to the
Trusts is expected to result from such use of these funds.


Premiums for the policies of insurance obtained by the Sponsor or
by the Bond issuers with respect to Bonds in Insured Trusts have
been paid in full prior to the deposit of the Bonds in the Trusts,
and the value of such insurance has been included in the evaluation
of the Bonds in each Trust and accordingly in the Public Offering
Price of Units of each Trust.  There are no annual or continuing
premiums for such insurance.

The Sponsor has borne all costs of creating and establishing the
Trusts.  The following are expenses of the Trusts and, when paid by
or owed to the Trustee, are secured by a lien on the assets of the
Trust or Trusts to which such expenses are allocable:  (1) the
expenses and costs of any action undertaken by the Trustee to
protect the Trusts and the rights and interests of the Unitholders;
(2) all taxes and other governmental charges upon the Bonds or any
part of the Trust (no such taxes or charges are being levied or
made or, to the knowledge of the Sponsor, contemplated); (3)
amounts payable  to the Trustee as fees for ordinary recurring
services and for extraordinary non-recurring services rendered
pursuant to the Indenture, all disbursements and expenses including
counsel fees (including fees of bond counsel which the Trustee may
retain) sustained or incurred by the Trustee in connection
therewith; and (4) any losses or liabilities accruing to the
Trustee without negligence, bad faith or willful misconduct on its
part.  The Trustee is empowered to sell Bonds in order to pay these
amounts if funds are not otherwise available in the Interest and
Principal Accounts of the appropriate Trust.


The Indenture for certain Series requires each Trust to be audited
on an annual basis at the expense of the Trust by independent
public accountants selected by the Sponsor.  The Trustee shall not
be required, however, to cause such an audit to be performed if its
cost to a Trust shall exceed $.05 per Unit on an annual basis. 
Unitholders of a Trust covered by an audit may obtain a copy of the
audited financial statements upon request.

DISTRIBUTIONS TO UNITHOLDERS


Interest received by the Trustee on the Bonds in each Trust,
including that part of the proceeds of any disposition of Bonds
which represents accrued interest and including any insurance
proceeds representing interest due on defaulted Bonds, shall be
credited to the "Interest Account" of the appropriate Trust and all
other moneys received by the Trustee shall be credited to the
"Principal Account" of the appropriate Trust.

National Traditional Trusts 4 through 39 - Semi-Annual
Distributions.


The pro rata share of the Interest Account and the pro rata share
of the cash in the Principal Account for each Unit will be computed
by the Trustee semi-annually each year on the Record Dates (stated
in Part Two).  Shortly after such computations, distributions will
be made to the Unitholders as of the Record Date.  Proceeds
received from the disposition of any of the Bonds after a Record
Date and prior to the following Distribution Date will be held in
the Principal Account and either used to pay for Units redeemed or
distributed on the Distribution Date following the next Record
Date.  The Trustee is not required to make a distribution from the
Principal Account unless the amount available for distribution
shall equal at least ten cents per Unit.  Persons who purchase
Units after a Record Date and prior to the following Distribution
Date will receive their first distribution on the second
Distribution Date after their purchase of Units.


As of each Record Date the Trustee will deduct from the Interest
Account or, to the extent funds are not sufficient therein, from
the Principal Account, amounts needed for payment of the expenses
of the Trust.  The Trustee also may withdraw from said accounts
such amount, if any, as it deems necessary to establish a reserve
for any governmental charges payable out of the Trust. Amounts so
withdrawn shall not be considered a part of the Trust's assets
until such time as the Trustee shall return all or part of such
amount to the appropriate account.






 
 

Page 68




National Traditional Trust 40 and subsequent National Traditional
Trusts;  All Other Trusts - Optional Distributions.


The pro rata share of cash in the Principal Account in each Trust
will be computed as of each semi-annual Record Date and
distributions to the Unitholders as of such Record Date will be
made on or shortly after the fifteenth day of the month.  Proceeds
received from the disposition, including sale, call or maturity, of
any of the Bonds and all amounts paid  with respect to zero coupon
bonds and Stripped Obligations will be held in the Principal
Account and either used to pay for Units redeemed or distributed on
the Distribution Date following the next semi-annual Record Date. 
The Trustee is not required to make a distribution from the
Principal Account of any Trust unless the amount available for
distribution in such account equals at least ten cents per Unit.

The pro rata share of the Interest Account in each Trust will be
computed by the Trustee each month as of the Record Date.  For
National Traditional Trusts 40 through 51, distributions will be
made on or shortly after the fifteenth day of each month to
Unitholders as of the Record Date.  For National Traditional Trust
52 and subsequent National Traditional Trusts, State Traditional
Trust and subsequent State Traditional Trusts and all other Trusts,
Unitholders have the option of receiving distributions monthly,
quarterly or semi-annually. Record Dates are the first day of each
month for Unitholders under the monthly plan of distribution, the
first day of March, June, September and December for quarterly
distributions, and the first day of June and December for semi-
annual distributions (for National Traditional Trust 140 and
subsequent National Traditional Trusts and all other Trusts,
quarterly Record Dates are the first day of February, May, August
and November and for semi-annual distributions the Record Dates are
the first day of May and November). Distributions will be made on
or shortly after the 15th day of the month to Unitholders of such
Trust as of the Record Date who are entitled to distributions at
that time under the plan of distribution in effect. Persons who
purchase Units between a Record Date and a Distribution Date will
receive their first distribution on the Distribution Date following
the next Record Date under the applicable plan of distribution.

Unitholders purchasing Units of a Trust in the secondary market
will initially receive distributions in accordance with the
election of the prior owner. Unitholders of Trusts having more than
one available plan of distribution who desire to change their plan
of distribution may do so by sending a written notice requesting
the change, together with any Certificate(s), to the Trustee. The
notice and any Certificate(s) must be received by the Trustee not
later than the semi-annual Record Date to be effective as of the
semi-annual distribution following the subsequent semi-annual
Record Date.  Unitholders are requested to make any such changes
within 45 days prior to the applicable Record Date. Certificates
should only be sent by registered or certified mail, return receipt
requested, to minimize the possibility of their being lost or
stolen.  If no notice is received by the Trustee in proper form the
Unitholder will be deemed to have elected to continue the same
plan.


As of the first day of each month the Trustee will deduct from the
Interest Account of a Trust or, to the extent funds are not
sufficient therein, from the Principal Account of a Trust, amounts
needed for payment of expenses of such Trust.  The Trustee also may
withdraw from said accounts such amount, if any, as it deems
necessary to establish a reserve for any  governmental charges
payable out of such Trust.  Amounts so withdrawn shall not be
considered a part of the Trust's assets until such time as the
Trustee shall return all or any part of such amounts to the
appropriate account.


For the purpose of minimizing fluctuations in the distributions
from the Interest Account of a Trust, the Trustee is authorized to
advance such amounts as may be necessary to provide for interest
distributions of approximately equal amounts.  The Trustee shall be
reimbursed, without interest, for any such advances from funds in
the Interest Account of such Trust.  It is expected that
collections of interest will be in such amounts that it will not be
necessary for advancements to be made by the Trustee.


The Trustee shall withdraw from the Interest Account and the
Principal Account of a Trust such amounts as may be necessary to
cover redemptions of Units of such Trust by the Trustee.  (See "How
Units May Be Redeemed Without Charge.")


Funds which are available for future distributions, redemptions and
payments of expenses are held in accounts which are non-interest
bearing to Unitholders and are available for use by the Trustee
pursuant to normal banking procedures. ACCUMULATION  PLAN


The Sponsor is also the principal underwriter of the Nuveen
Municipal Bond Fund, Inc. (the "Bond Fund"), Nuveen Tax-Free
Reserves, Inc. ("Tax-Free Reserves"), Nuveen California Tax-Free
Fund, Inc. (the "California Fund"), Nuveen Tax-Free Bond Fund, Inc.
("Tax-Free Bond Fund"), Nuveen Insured Tax-Free Bond Fund, Inc.
(the "Insured Bond Fund"), Nuveen Tax-Free Money Market Fund, Inc.
(the "Money Market Fund") and Nuveen Multistate Tax-Free Trust (the
"Multistate Trust").  Each of these funds (together, the
"Accumulation Funds") is an open-end, diversified management
investment company into which Unitholders may choose to reinvest
their distributions automatically, without any sales charge. 
(Reinvestment in the California Fund is available only to
Unitholders who are California residents.  Reinvestment in the
state portfolios of the Tax-Free Bond Fund, the Insured Bond Fund,
the Money Market Fund and the Multistate Trust is available only to
Unitholders who are residents of the states for which such
portfolios are named.) Unitholders may reinvest both interest and
principal distributions or principal distributions only.  Each
Accumulation Fund has investment objectives which differ in certain
respects from those of the Trusts and may invest in securities
which would not be eligible for deposit in the Trusts.  The
investment adviser to each Accumulation Fund is Nuveen Advisory
Corp., a wholly owned subsidiary of the Sponsor. The following is
a general description of the investment objectives and policies of
each Accumulation Fund.  For a more detailed description,
Unitholders should read the Prospectus of the Accumulation Fund in
which they are interested.





 
 

Page 69



The Bond Fund

The Bond Fund has the objective of providing, through investment in
a professionally managed portfolio of long-term municipal bonds, as
high a level of current interest income exempt from Federal income
tax as is consistent with preservation of capital.  The Bond Fund
may include in its portfolio tax-exempt bonds rated Baa or BBB or
better by Moody's or Standard & Poor's, unrated bonds which, in the
opinion of the investment adviser, have credit characteristics
equivalent to bonds rated Baa or BBB or better, and certain
temporary investments, including securities the interest income
from which may be subject to Federal income tax.

Tax-Free Reserves


Tax-Free Reserves is a "money market" fund that includes in its
portfolio only obligations maturing within one year from the date
of acquisition, maintains an average maturity of all investments of
120 days or less, and values its portfolio at amortized cost and
seeks to maintain a net asset value of $1.00 per share.  Tax-Free
Reserves provides for check writing and expedited wire redemption
privileges.  Tax-Free Reserves has the objective of providing,
through investment in a professionally managed portfolio of high
quality short-term municipal obligations, as high a level of
current interest income exempt from Federal income tax as is
consistent with preservation of capital and the maintenance of
liquidity.  Tax-Free Reserves may include in its portfolio
municipal obligations rated Aaa, Aa, MIG 1, VMIG 1 or Prime-1 by
Moody's, or AAA, AA, SP-1 or A-1 by Standard & Poor's, unrated
municipal obligations that, in the opinion of the investment
adviser, have credit characteristics equivalent to obligations
rated as above, tax-exempt obligations backed by the U.S.
Government, and temporary investments that may be subject to
Federal income tax.

The California Fund


The California Fund has the objective of providing, through
investment in professionally managed portfolios of California
municipal obligations, as high a level of current interest income
exempt from both Federal and California income taxes as is
consistent with the investment policies of each of the portfolios
of the California Fund and with preservation of capital.  Each
portfolio of the California Fund may include temporary investments
that may be subject to tax.  California Unitholders may reinvest in
one of three portfolios of the California Fund:  the Nuveen
California Tax-Free Value Fund, the Nuveen California Insured Tax-
Free Value Fund and the Nuveen California Tax-Free Money Market
Fund.

The Nuveen California Tax-Free Value Fund invests primarily in
long-term investment grade California tax-exempt bonds (i.e., bonds
rated in the four highest categories by Moody's or Standard &
Poor's or, if unrated, that have equivalent credit
characteristics). The Nuveen California Insured Tax-Free Value Fund
invests primarily in the same type of investments as the Nuveen
California Tax-Free Value Fund, each of which is covered by
insurance guaranteeing the timely payment of principal and interest
or is backed by a deposit of U.S. Government securities.

The Nuveen California Tax-Free Money Market Fund invests primarily
in high-quality short-term California tax-exempt money market
instruments (i.e., obligations rated in the two highest categories
by Moody's or Standard & Poor's or, if unrated, that have
equivalent credit characteristics).  This portfolio will include
only obligations maturing within one year from the date of
acquisition, will  maintain an average maturity of all investments
of 120 days or less, will value its portfolio at amortized cost and
will seek to maintain a net asset value of $1.00 per share.  The
Nuveen California Tax-Free Money Market Fund provides for an
expedited wire redemption privilege.

The Tax-Free Bond Fund


The Tax-Free Bond Fund consists of the Massachusetts Tax-Free Value
Fund, the New York Tax-Free Value Fund, the Ohio Tax-Free Value
Fund, and the Nuveen New Jersey Tax-Free Value Fund, which are each
available for reinvestment to Unitholders who are residents of the
state for which such portfolio is named. The Tax-Free Bond Fund has
the objective of providing, through investment in a professionally
managed portfolio of municipal bonds, as high a level of current
interest income exempt both from Federal income tax and from the
income tax imposed by each portfolio's designated state as is
consistent with preservation of capital.  The Tax-Free Bond Fund
may include  in each of its portfolios tax-exempt bonds rated Baa
or BBB or better, unrated bonds which, in the opinion of the
investment adviser, have credit characteristics equivalent to bonds
rated Baa or BBB or better, and certain temporary investments,
including securities the interest income from which may be subject
to Federal and state income tax.
The Insured Bond Fund


The Insured Bond Fund consists of the Nuveen Insured Municipal Bond
Fund, the Nuveen Massachusetts Insured Tax- Free Value Fund and the
Nuveen New York Insured Tax-Free Value Fund, which are each
available for reinvestment to Unitholders.  (The Massachusetts and
New York portfolios are available only to those Unitholders who are
residents of the state for which the portfolio is named).  The
Insured Bond Fund has the objective of providing, through
investment in professionally managed portfolios of municipal bonds,
as high a level of current interest income exempt from both Federal
income tax and, in the case of designated state portfolios, from
the income tax imposed by each portfolio's designated state, as is
consistent with preservation of capital. The Insured Bond Fund may
include in each of its portfolios the same type of investments as
the Tax-Free Bond Fund, each of which is covered by insurance
guaranteeing the timely payment of principal and interest or is
backed by a deposit of U.S. Government securities.

The Money Market Fund


The Money Market Fund consists of the Nuveen Massachusetts Tax-Free
Money Market Fund and the Nuveen New York Tax-Free Money Market
Fund, which are each available for reinvestment to Unitholders who
are residents of the state for which such portfolio is named.  

Page 70



The Money Market Fund includes in its portfolios only obligations
maturing within one year from the date of acquisition, maintains an
average maturity of 120 days or less, values its portfolios at
amortized cost and seeks to maintain a net asset value of $1.00 per
share.  The Money Market Fund has the objective of providing,
through investment in professionally managed portfolios of high
quality short-term municipal obligations, as high a level of
current interest income exempt both from Federal income tax and
from the income tax imposed by each portfolio's designated state as
is consistent with stability of principal and the maintenance of
liquidity.  The Money Market Fund may include in each of its
portfolios municipal obligations rated Aaa, Aa, MIG-1, MIG-2,
VMIG-1, VMIG-2, Prime 1 or Prime 2 by Moody's or AAA, AA, SP-1,
SP-2, A-1 or A-2 by Standard & Poor's, unrated municipal
obligations which, in the opinion of the investment adviser, have
credit characteristics equivalent to obligations rated as above,
and temporary investments that may be subject to Federal and state
income tax.

The Multistate Trust


The Multistate Trust consists of the Nuveen Arizona Tax-Free Value
Fund, the Nuveen Florida Tax-Free Value Fund, the Nuveen Maryland
Tax-Free Value Fund, the Nuveen Michigan Tax-Free Value Fund, the
Nuveen New Jersey Tax- Free Value Fund, the Nuveen Pennsylvania
Tax-Free Value Fund and the Nuveen Virginia Tax-Free Value Fund,
which are each available for reinvestment to Unitholders who are
residents of the state for which such portfolio is named.  The
Multistate Trust has the objective of providing, through investment
in a professionally managed portfolio of municipal bonds, as high
a level of current interest income exempt from both regular Federal
income tax and the applicable state personal income tax as is
consistent with preservation of capital.  The Multistate Trust may
include in each of its portfolios tax-exempt bonds rated Baa or BBB
or better, unrated bonds which, in the opinion of the investment
advisor, have credit characteristics equivalent to bonds rated Baa
or BBB or better, limited to no more than 20% of the Multistate
Trust's assets, and certain temporary investments that may be
subject to Federal and state income tax.

Each person who purchases Units of a Trust may become a participant
in the Accumulation Plan and elect to have his or her distributions
on Units of the Trust invested directly in shares of one of the
Accumulation Funds. Reinvesting Unitholders may select any interest
distribution plan.  Thereafter, each distribution of interest
income or principal on the participant's Units (principal only in
the case of a Unitholder who has chosen to reinvest only principal
distributions) will, on the applicable distribution date or the
next day on which the Exchange is normally open ("business day") if
the distribution date is not a business day, automatically be
received by Shareholder Services Inc., transfer agent for each of
the Accumulation Funds, on behalf of such participant and applied
on that date to purchase shares (or fractions thereof) of the
Accumulation Fund chosen at the net asset value computed as of 4:00
p.m. eastern time on each such date.  All distributions will be
reinvested in the Accumulation Fund chosen and no part thereof will
be retained in a separate account.  These purchases will be made
without a sales charge.

Shareholder Services Inc. will mail to each participant in the
Accumulation Plan a quarterly statement containing a record of all
transactions involving purchases of Accumulation Fund shares (or
fractions thereof) with Trust interest distributions or as a result
of reinvestment of Accumulation Fund dividends.  Any distribution
of principal used to purchase shares of an Accumulation Fund will
be separately confirmed by Shareholder Services Inc. Unitholders
will also receive distribution statements from the Trustee
detailing the amounts transferred to their Accumulation Fund
accounts.


Participants may at any time, by so notifying the Trustee in
writing, elect to change the Accumulation Fund into which their
distributions are being reinvested to change from principal-only
reinvestment to reinvestment of both principal and interest or vice
versa, or to terminate their participation in the Accumulation Plan
altogether and receive future distributions on their Units in cash. 
There will be no charge or other penalty for such change of
election or termination.


The character of Trust distributions for income tax purposes will
remain unchanged even if they are reinvested in an Accumulation
Fund.


DETAILED REPORTS TO UNITHOLDERS


The Trustee shall furnish Unitholders of a Trust, in connection
with each distribution, a statement of the amount of interest and,
if any, the amount of other receipts (received since the preceding
distribution) being distributed, expressed in each case as a dollar
amount representing the pro rata share of each Unit of a Trust
outstanding and a year-to-date summary of all distributions paid on
said Units.  Within a reasonable period of time after the end of
each calendar year, the Trustee will furnish to each person who at
any time during the calendar year was a registered Unitholder of a
Trust a statement with respect to such Trust (i) as to the Interest
Account: interest received (including amounts representing interest
received upon any disposition of Bonds), and the percentage of such
interest with respect to Trusts other than State Trusts by states
in which the issuers of the Bonds are located, deductions for fees
and expenses of such Trust, redemption of Units and the balance
remaining after such distributions and deductions, expressed in
each case both as a total dollar amount and as a dollar amount
representing the pro rata share of each Unit outstanding on the
last business day of such calendar year; (ii) as to the Principal
Account: the dates of disposition of any Bonds and the net proceeds
received therefrom (excluding any portion representing accrued
interest), the amount paid for purchase of Replacement Bonds, the
amount paid upon redemption of Units, deductions for payment of
applicable taxes and fees and expenses of the Trustee, and the
balance remaining after such distributions and deductions 
expressed both as a total dollar amount and as a dollar amount
representing the pro rata share of each Unit outstanding on the
last business day of such calendar year; (iii) a list of the Bonds
held and the number of Units outstanding on the last business day
of such calendar year; (iv) the Unit Value based upon the last
computation thereof made during such calendar year; and (v) amounts
actually distributed during such calendar year from the Interest
Account and from the Principal Account, separately stated,
expressed both as total dollar amounts and as dollar amounts
representing the pro rata share of each Unit outstanding.


Each annual statement will reflect pertinent information with
respect to all plans of distribution so that Unitholders may be
informed regarding the results of other plans of distribution.

 
 

Page 71



UNIT VALUE AND EVALUATION


The value of each Trust is determined by the Sponsor on the basis
of (1) the cash on hand in the Trust or moneys in the process of
being collected, (2) the value of the Bonds in the Trust based on
the bid prices of the Bonds and (3) interest accrued thereon not
subject to collection, less (1) amounts representing taxes or
governmental charges payable out of the Trust and (2) the accrued
expenses of the Trust.  The result of such computation is divided
by the number of Units of such Trust outstanding as of the date
thereof to determine the per Unit value ("Unit Value") of such
Trust. The Sponsor may determine the value of the Bonds in each
Trust (1) on the basis of current bid prices of the Bonds obtained
from dealers or brokers who customarily deal in bonds comparable to
those held by the Trust, (2) if bid prices are not available for
any of the Bonds, on the basis of bid prices for comparable bonds,
(3) by causing the value of the Bonds to be determined by others
engaged in the practice of evaluating, quoting or appraising
comparable bonds or (4) by any combination of the above.

Because the insurance obtained by the Sponsor or by the issuers of
Bonds with respect to the Bonds in the Insured Trusts and with
respect to insured Bonds in Traditional Trusts is effective so long
as such Bonds are outstanding, such insurance will be taken into
account in determining the bid and offering prices of such Bonds
and therefore some value attributable to such insurance will be
included in the value of Units of Trusts that include such Bonds.

DISTRIBUTION OF UNITS TO THE PUBLIC


The Sponsor currently intends to maintain a secondary market for
Units of each Trust.  (See "Market for Units" below). The amount of
the dealer concession on secondary market purchases of Trust Units
through the Sponsor will be computed based upon the value of the
Bonds in the Trust portfolio, including the sales charge computed
as described in "Public Offering Price," and adjusted to reflect
the cash position of the Trust principal account, and will vary
with the size of the purchase as shown in the following table:

 
 




Amount of Purchase*

Years to                     Under       $100,000     $250,000    
$500,000    $1,000,000 Maturity                     $100,000   -
$249,999    -$499,999    -$999,999       or more
_________________________________________________________________
_____                                                 
                Less than 1                      0         
0            0             0            0 1 but less than  2      
   1.00%       .85%         .80%          .70%         .55% 2 but
less than  3          1.30%      1.10%        1.00%           .90% 
      .70% 3 but less than  4          1.60%      1.35%       
1.25%         1.10%         .90% 4 but less than  5          2.00% 
    1.75%        1.55%         1.40%        1.25% 5 but less than 
7          2.30%      1.95%        1.80%         1.65%        1.50%
7 but less than 10          2.60%      2.25%        2.10%        
1.95%        1.70% 10 but less than 13          3.00%      2.60%  
     2.45%         2.30%        2.00% 13 but less than 16         
3.25%      3.00%        2.75%         2.50%        2.15% 16 or more 
                 3.50%      3.50%        3.35%         3.00%      
 2.50% __________________________________________________




*Breakpoint sales charges and related dealer concessions are
computed both on a dollar basis and on the basis of the number of
Units purchased, using the equivalent of 1,000 Units to $100,000,
2,500 Units to $250,000, etc., and will be applied on that basis
which is more favorable to the purchaser.

The Sponsor reserves the right to change the foregoing dealer
concessions from time to time.

Certain commercial banks are making Units of the Trusts available
to their customers on an agency basis.  A portion of the sales
charge paid by these customers is retained by or remitted to the
banks in the amount shown in the above table.  The Glass-Steagall
Act prohibits banks from underwriting Trust Units; the Act does,
however, permit certain agency transactions and banking regulators
have not indicated that these particular agency transactions are
not permitted under the Act.  In Texas and in certain other states,
any bank making Units available must be registered as broker-dealer
under state law.


To facilitate the handling of transactions, sales of Units shall be
limited to transactions involving a minimum of either of $5,000 or
50 Units, whichever is less.  The Sponsor reserves the right to
reject, in whole or in part, any order for the purchase of Units.














 
 

Page 72



OWNERSHIP AND TRANSFER OF UNITS


Ownership of Units is evidenced either by Certificates executed by
the Trustee or by book-entry positions recorded on the books and
records of the Trustee in accordance with whichever option is
available to the dealer through whom the purchase was made.  The
Trustee is authorized to treat as the owner of Units that person
who at the time is registered as such on the books of the Trustee.
Any Unitholder who holds a Certificate may change to book-entry
ownership by submitting to the Trustee the Certificate along with
a written request that the Units represented by such Certificate be
held in book-entry form.  Likewise, a Unitholder who holds Units in
book-entry form may obtain a Certificate for such Units by written
request to the Trustee.  Units may be held in denominations of one
Unit or any multiple or fraction thereof.  Fractions of Units are
computed to three decimal places.  Any Certificates issued will be
numbered serially for identification, and are issued in fully
registered form, transferable only on the books of the Trustee. 
Book-Entry Unitholders will receive a Book-Entry Position
Confirmation reflecting their ownership.

For series allowing optional plans of distribution, Certificates
for Units bear an appropriate notation on their face indicating
which plan of distribution has been selected.  When a holder of
certificated Units changes his plan of distribution, the existing
Certificate must be surrendered to the Trustee and a new
Certificate issued to reflect the currently effective plan of
distribution. There will be no charge for this service.  Holders of
book-entry Units can change their plan of distribution by making a
written request to the Trustee, which will issue a new Book-Entry
Position Confirmation to reflect the change.


Units are transferable by making a written request to the Trustee
and, in the case of Units evidenced by Certificate(s), by
presenting and surrendering such Certificate(s) to the Trustee, at
its corporate trust office in New York City, properly endorsed or
accompanied by a written instrument or instruments of transfer. 
The Certificate(s) should be sent registered or certified mail for
the protection of the Unitholders.  Each Unitholder must sign such
written request, and such Certificate(s) or transfer instrument,
exactly as his name appears on (a) the face of the Certificate(s)
representing the Units to be transferred, or (b) the Book-Entry
Position Confirmation(s) relating to the Units to be transferred. 
Such signature(s) must be guaranteed by a member of an approved
Medallion Guarantee Program or in such other manner as may be
acceptable to the Trustee.  In certain instances the Trustee may
require additional documents such as, but not limited to, trust
instruments, certificates of death, appointments as executor or
administrator or certificates of corporate authority.  Mutilated
Certificates must be surrendered to the Trustee in order for a
replacement Certificate to be issued.

Although at the date hereof no charge is made and none is
contemplated, a Unitholder may be required to pay $2.00 to the
Trustee for each Certificate reissued or transfer of Units
requested and to pay any governmental charge which may be imposed
in connection therewith.


The process of registration and delivery to the Unitholder of
Certificates or Book-Entry Position Confirmations may take up to 30
days.  Purchasers of Units will be unable to exercise any right to
transfer or redemption until they have received their
Certificate(s) or Book-Entry Position Confirmation(s). (See "How
Units May Be Redeemed Without Charge.")


Replacement of Lost, Stolen or Destroyed Certificates


To obtain a new Certificate replacing one that has been lost,
stolen, or destroyed, the Unitholder must furnish the Trustee with
sufficient indemnification and pay such expenses as the Trustee may
incur.

The indemnification protects the Trustee, Sponsor, and Trust from
risk if the original Certificate is presented for transfer or
redemption by a person who purchased it in good faith, for value,
and without notice of any fraud or irregularity.

This indemnification must be in the form of an Open Penalty Bond of
Indemnification.  The premium for such an indemnity bond may vary
from time to time, but currently amounts to 1.5% of the market
value of the Units represented by the Certificate.  In the case,
however, of a Trust as to which notice of termination has been
given, the premium currently amounts to 1% of the market value of
the Units represented by such Certificate.

MARKET FOR UNITS


Although it is not obligated to do so, the Sponsor intends to
maintain a secondary market for outstanding Units of each Trust at
its own expense and continuously to offer to purchase Units of each
Trust at prices, subject to change at any time, which are based
upon the bid prices of Bonds in the respective portfolios of the
Trusts.  If the supply of Units of any of the Trusts exceeds the
demand, or for some other business reason, the Sponsor may
discontinue purchases of Units of such Trust at such prices.
Unitholders who wish to dispose of Units should inquire of the
Trustee or their brokers as to current market prices.

In connection with its secondary marketmaking activities, the
Sponsor may from time to time enter into secondary market joint
account agreements with other brokers and dealers.  Pursuant to
such an agreement the Sponsor will purchase Units from the broker
or dealer at the bid price into a joint account managed by the
Sponsor; sales from the account will be made in accordance with the
then current prospectus and the Sponsor and the broker or dealer
will share profits and losses in the joint account in accordance
with the terms of their joint account agreement.








 
 

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HOW UNITS MAY BE REDEEMED WITHOUT CHARGE


Unitholders may redeem all or a portion of their Units by (1)
making a written request for such redemption (book-entry
Unitholders may use the redemption form on the reverse side of
their Book-Entry Position Confirmation) to the Trustee at its
corporate trust office in New York City (redemptions of 1,000 Units
or more will require a signature guarantee), (2) in the case of
Units evidenced by a Certificate, by also tendering such
Certificate to the Trustee, duly endorsed or accompanied by proper
instruments of transfer with signatures guaranteed as explained
under "Ownership and Transfer of Units" above, and (3) payment of
applicable governmental charges, if any.  Certificates should be
sent only by registered or certified mail to minimize the
possibility of their being lost or stolen.  In order to effect a
redemption of Units evidenced by a Certificate, Unitholders must
tender their Certificate to the Trustee or provide satisfactory
indemnity required in connection with lost, stolen or destroyed
Certificates.  (See "Ownership and Transfer of Units.") No
redemption fee will be charged.

A Unitholder may authorize the Trustee to honor telephone
instructions for the redemption of Units held in book-entry form. 
Units represented by Certificates may not be redeemed by telephone. 
The proceeds of Units redeemed by telephone will be sent by check
either to the Unitholder at the address specified on his account or
to a financial institution specified by the Unitholder for credit
to the account of the Unitholder.  A Unitholder wishing to use this
method of redemption must complete a Telephone Redemption
Authorization Form and furnish the Form to the Trustee.  Telephone
Redemption Authorization Forms can be obtained from a Unitholder's
registered representative or by calling the Trustee.  Once the
completed Form is on file, the Trustee will honor telephone
redemption requests by any person.  If the telephone redemption
request is received prior to 4:00 p.m. eastern time, the Unitholder
will be entitled to receive for each Unit tendered the Redemption
Price as determined above.  A telephone redemption request received
after 4:00 p.m. eastern time will be treated as having been
received the following business day.  The redemption proceeds will
be mailed within seven calendar days following the telephone
redemption request.  Telephone redemptions are limited to 1,000
Units or less. Only Units held in the name of individuals may be
redeemed by telephone; accounts registered in broker name, or
accounts of corporations or fiduciaries (including, among others,
trustees, guardians, executors and administrators) may not use the
telephone redemption privilege.

On the seventh calendar day following the date of tender, or if the
seventh calendar day is not a business day, on the first business
day prior thereto, the Unitholder will be entitled to receive in
cash for each Unit tendered an amount equal to the Unit Value of
such Trust determined by the Trustee (see "Unit Value and
Evaluation"), as of 4:00 p.m. eastern time on the date of tender as
defined hereafter, plus accrued interest to, but not including, the
fifth business day after the date of tender ("Redemption Price"). 
The Redemption Price may be more or less than the amount paid by
the Unitholder depending on the value of the Bonds in the Trust on
the date of tender.  Such value will vary with market and credit
conditions, including changes in interest rate levels.  Unitholders
should check with the Trustee or their broker to determine the
Redemption Price before tendering Units.

While the Trustee has the power to determine the Redemption Price
when Units are tendered for redemption, the authority has by
practice been delegated by the Trustee to The Sponsor, which
determines the Redemption Price on a daily basis.

The "date of tender" is deemed to be the date on which the request
for redemption of Units is received in proper form by the Trustee,
except that as regards redemption requests received after 4:00 p.m.
eastern time or on any day on which the Exchange is normally
closed, the date of tender is the next day on which the Exchange is
normally open for trading and such request will be deemed to have
been made on such day and the redemption will be effected at the
Redemption Price computed on that day.

Accrued interest paid on redemption will be withdrawn from the
Interest Account of a Trust or, if the balance therein is
insufficient, from the Principal Account of such Trust.  All other
amounts paid on redemption will be withdrawn from the Principal
Account of the Trust.  The Trustee is empowered to sell underlying
Bonds of a Trust in order to make funds available for redemption.
(See "How Bonds May Be Removed from a Trust.")  Units so redeemed
will be canceled.

To the extent that Bonds are sold, the size and diversity of a
Trust will be reduced.  Such sales may be required at a time when
Bonds would not otherwise be sold and could result in lower prices
than might otherwise be realized.

The Redemption Price will be determined on the basis of the current
bid prices of the Bonds in each Trust.

The right of redemption may be suspended and payment postponed for
any period during which the Securities and Exchange Commission
determines that trading in the municipal bond market is restricted
or an emergency exists, as a result of which disposal or evaluation
of the Bonds is not reasonably practicable, or for such other
periods as the Securities and Exchange Commission may by order
permit.

Under regulations issued by the Internal Revenue Service, the
Trustee will be required to withhold 31% of the principal amount of
a Unit redemption if the Trustee has not been furnished the
redeeming Unitholder's tax identification number in the manner
required by such regulations.  Any amount so withheld is
transmitted to the Internal Revenue Service and may be recovered by
the Unitholder only when filing his or her tax return.  Under
normal circumstances the Trustee obtains the Unitholder's tax
identification number from the selling broker at the time
Certificates or Book- Entry Position Confirmation is issued, and
this number  is printed on the Certificate or Book-Entry Position
Confirmation and on distribution statements.  If a Unitholder's tax
identification number does not appear as noted above, or if it is
incorrect, the Unitholder should contact the Trustee before
redeeming Units to determine what action, if any, is required to
avoid this "backup withholding."






 
 

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HOW UNITS MAY BE PURCHASED BY THE SPONSOR

The Trustee will notify the Sponsor of any tender of Units for
redemption.  If the Sponsor's bid in the secondary market at that
time equals or exceeds the Redemption Price it may purchase such
Units by notifying the Trustee before the close of business on the
second succeeding business day and by making payment therefor to
the Unitholder not later than the day on which payment would
otherwise have been made by the Trustee.  (See "How Units May Be
Redeemed Without Charge.")  The Sponsor's current practice is to
bid at the Redemption Price in the secondary market.  Units held by
the Sponsor may be tendered to the Trustee for redemption as any
other Units.

The Public Offering Price upon resale of any Units thus acquired by
the Sponsor will be calculated in accordance with the procedure
described in the then currently effective prospectus relating to
such Units.  (See "Public Offering Price.") Any profit resulting
from the resale of such Units will belong to the Sponsor, which
likewise will bear any loss resulting from a lower Public Offering
Price or Redemption Price subsequent to its acquisition of such
Units.

HOW BONDS MAY BE REMOVED FROM THE TRUSTS


Bonds will be removed from a Trust as they mature or are redeemed
by the issuers thereof.  See the "Schedule of Investments" in Part
Two and "Selection of Bonds for Deposit in the Trusts" herein for
a discussion of call provisions of Bonds in the Trusts.

The Indenture also empowers the Trustee to sell Bonds for the
purpose of redeeming Units tendered by any Unitholders, and for the
payment of expenses for which income may not be available.  Under
the Indenture the Sponsor is obligated to provide the Trustee with
a current list of Bonds to be sold in such circumstances.  In
deciding which Bonds should be sold, the Sponsor intends to
consider, among other things, such factors as: (1) market
conditions; (2) market prices of the Bonds; (3) the effect on
income distributions to Unitholders of the sale of various Bonds;
(4) the effect on principal amount of underlying Bonds per Unit on
the sale of various Bonds; (5) the financial condition of the
issuers; and (6) the effect of the sale of various Bonds on the
investment character of the Trust.  Such sales, if required, could
result in the sale of Bonds by the Trustee at prices less than
original cost to the Trust.  To the extent Bonds are sold, the size
and diversity of the Trust will be reduced.

In addition, the Sponsor is empowered to direct the Trustee to
liquidate Bonds upon the happening of certain other events, such as
default in the payment of principal and/or interest, an action of
the issuer that will adversely affect its ability to continue
payment of the principal of and interest on its Bonds, or an
adverse change in market, revenue or credit factors affecting the
investment character of the Bonds.  If a default in the payment of
the principal of and/or interest on any of the Bonds occurs, and if
the Sponsor fails to instruct the Trustee whether to sell or
continue to hold such Bonds within 30 days after notification by
the Trustee to the Sponsor of such default, the Indenture provides
that the Trustee shall liquidate said Bonds forthwith and shall not
be liable for any loss so incurred.

In connection with its determination as to the sale or liquidation
of any Bonds, the Sponsor will consider the Bond's then current
rating, but because such ratings are the opinions of the rating
agencies as to the quality of Bonds they undertake to rate and not
absolute standards of quality, the Sponsor will exercise its
independent judgment as to Bond creditworthiness.


The Sponsor may also direct the Trustee to liquidate Bonds in a
Trust if the Bonds in the Trust are the subject of an advanced
refunding, generally considered to be when refunding bonds are
issued and the proceeds thereof are deposited in irrevocable trust
to retire the refunded bonds on their redemption date.

Except for refunding securities that may be exchanged for Bonds
under certain conditions specified in the Indenture, the Indenture
does not permit either the Sponsor or the Trustee to acquire or
deposit bonds either in addition to, or in substitution for, any of
the Bonds initially deposited in the Trust.

INFORMATION ABOUT THE TRUSTEE


The Trustee is United States Trust Company of New York, with its
principal place of business at 114 West 47th Street, New York, New
York 10036 and its corporate trust office at 770 Broadway, New
York, New York 10003.  United States Trust Company of New York,
established in 1853, has, since its organization, engaged primarily
in the management of trust and agency accounts for individuals and
corporations.  The Trustee is a member of the New York Clearing
House Association and is subject to supervision and examination by
the Superintendent of Banks of the State of New York, the Federal
Deposit Insurance Corporation and the Board of Governors of the
Federal Reserve System. In connection with the storage and handling
of certain Bonds deposited in the Trusts, the Trustee may use the
services of The Depository Trust Company. These services would
include safekeeping of the Bonds and coupon-clipping, computer
book-entry transfer and institutional delivery services.  The
Depository Trust Company is a limited purpose trust company
organized under the Banking Law of the State of New York, a member
of the Federal Reserve System and a clearing agency registered
under the Securities Exchange Act of 1934, as amended.

LIMITATIONS ON LIABILITIES OF SPONSOR AND TRUSTEE


The Sponsor and the Trustee shall be under no liability to
Unitholders for taking any action or for refraining from any action
in good faith pursuant to the Indenture, or for errors in judgment,
but shall be liable only for their own negligence, lack of good
faith or willful misconduct.  The Trustee shall not be liable for
depreciation or loss incurred by reason of the sale by the Trustee
of any of the Bonds.  In the event of the failure of the Sponsor to
act under the Indenture, the Trustee may act thereunder and shall
not be liable for any action taken by it in good faith under the
Indenture.



 
 

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The Trustee shall not be liable for any taxes or other governmental
charges imposed upon or in respect of the Bonds or upon the
interest thereon or upon it as Trustee under the Indenture or upon
or in respect of any Trust which the Trustee may be required to pay
under any present or future law of the United States of America or
of any other taxing authority having jurisdiction.  In addition,
the Indenture contains other customary provisions limiting the
liability of the Trustee.


SUCCESSOR TRUSTEES AND SPONSORS


The Trustee or any successor trustee may resign by executing an
instrument of resignation in writing and filing same with the
Sponsor and mailing a copy of a notice of resignation to all
Unitholders then of record.  Upon receiving such notice, the
Sponsor is required promptly to appoint a successor trustee.  If
the Trustee becomes incapable of acting or is adjudged a bankrupt
or insolvent, or a receiver or other public officer shall take
charge of its property or affairs, the Sponsor may remove the
Trustee and appoint a successor by written instrument.  The
resignation or removal of a trustee and the appointment of a
successor trustee shall become effective only when the successor
trustee accepts its appointment as such.  Any successor trustee
shall be a corporation authorized to exercise corporate trust
powers, having capital, surplus and undivided profits of not less
than $5,000,000.  Any corporation into which a trustee may be
merged or with which it may be consolidated, or any corporation
resulting from any merger or consolidation to which a trustee shall
be a party, shall be the successor trustee.

If upon resignation of a trustee no successor has been appointed
and has accepted the appointment within 30 days after notification,
the retiring trustee may apply to a court of competent jurisdiction
for the appointment of a successor.

If the Sponsor fails to undertake any of its duties under the
Indenture, and no express provision is made for action by the
Trustee in such event, the Trustee may, in addition to its other
powers under the Indenture, (1) appoint a successor sponsor, or (2)
terminate the Indenture and liquidate the Trusts.


INFORMATION ABOUT THE SPONSOR


John Nuveen & Co. Incorporated, the Sponsor and Underwriter, was
founded in 1898 and is the oldest and largest investment banking
firm specializing in the underwriting and distribution of tax-
exempt securities and maintains the largest research department in
the investment banking community devoted exclusively to the
analysis of municipal securities.  In 1961, the Sponsor began
sponsoring the Nuveen Tax-Exempt Unit Trust, and since that time,
it has issued more than $30 billion in tax-exempt unit trusts,
including over $8 billion in insured trusts.  The Sponsor is also
principal underwriter of the Nuveen Municipal Bond Fund, Inc., the
Nuveen Tax-Exempt Money Market Fund, Inc., Nuveen Tax-Free
Reserves, Inc., Nuveen California Tax-Free Fund, Inc., Nuveen Tax-
Free Bond Fund, Inc., Nuveen Insured Tax-Free Bond Fund, Inc. and
Nuveen Tax-Free Money Market Fund, Inc., all registered open-end
management investment companies, and acted as co-managing
underwriter of Nuveen Municipal Value Fund, Inc., Nuveen California
Municipal Value Fund, Inc., Nuveen New York Municipal Value Fund,
Inc., Nuveen Municipal Income Fund, Inc., Nuveen California
Municipal Income Fund, Inc., Nuveen New York Municipal Income Fund,
Inc., Nuveen Premium Income Municipal Fund, Inc., Nuveen
Performance Plus Municipal Fund, Inc., Nuveen California
Performance Plus Municipal Fund, Inc., Nuveen New York Performance
Plus Municipal Fund, Inc., Nuveen Municipal Advantage Fund, Inc.,
Nuveen Municipal Market Opportunity Fund, Inc., Nuveen California
Municipal Market Opportunity Fund, Inc., Nuveen New York Municipal
Market Opportunity Fund, Inc., Nuveen Investment Quality Municipal
Fund, Inc., Nuveen California Investment Quality Municipal Fund,
Inc., Nuveen New York Investment Quality Municipal Fund, Inc.,
Nuveen Insured Quality Municipal Fund, Inc., Nuveen Florida
Investment Quality Municipal Fund, Nuveen Pennsylvania Investment
Quality Municipal Fund, Nuveen New Jersey Investment Quality
Municipal Fund, Inc., Nuveen Select Quality Municipal Fund, Inc.,
Nuveen California Select Quality Fund, Inc., Nuveen New York Select
Quality Municipal Fund, Inc., Nuveen Quality Income Municipal Fund,
Inc., Nuveen Insured Municipal Opportunity Fund, Inc., Nuveen
Florida Quality Income Municipal Fund, Nuveen Michigan Quality
Income Municipal Fund, Inc., Nuveen New Jersey Quality Income
Municipal Fund, Inc., Nuveen Ohio Quality Income Municipal Fund,
Inc., Nuveen Pennsylvania Quality Income Municipal Fund, Nuveen
Texas Quality Income Municipal Fund, Nuveen California Quality
Income Municipal Fund, Inc., Nuveen New York Quality Income
Municipal Fund, Inc., Nuveen Premier Municipal Income Fund, Inc.,
Nuveen Premier Insured Municipal Income Fund, Inc., Nuveen Premium
Income Municipal Fund 2, Inc., Nuveen California Premium Income
Municipal Fund, Inc., Nuveen New York Premium Income Municipal
Fund, Inc., Nuveen Premium Income Municipal Fund 3, Inc., Nuveen
Select Maturities Municipal Fund, Nuveen Select Maturities
Municipal Fund 2,  Nuveen Select Maturities Municipal Fund 3,
Nuveen Florida Premium Income Municipal Fund, Nuveen Michigan
Premium Income Municipal Fund, Inc., Nuveen New Jersey Premium
Income Municipal Fund, Inc., Nuveen Ohio Premium Income Municipal
Fund, Inc., Nuveen Pennsylvania Premium Income Municipal Fund,
Nuveen Texas Premium Income Municipal Fund, Nuveen Insured Premium
Income Municipal Fund, Inc., Nuveen Select Tax-Free Income
Portfolio, Nuveen Select Tax-Free Income Portfolio 2, Nuveen Select
Tax-Free Income Portfolio 3, Nuveen Insured California Select Tax-
Free Income Portfolio, Nuveen Insured New York Select Tax-Free
Income Portfolio, Nuveen Select Tax-Free Income Portfolio 4 and
Nuveen Select Tax-Free Income Portfolio 5, all registered closed-
end management investment companies. These registered open-end and
closed-end investment companies currently have approximately $17
billion in tax-exempt securities under management. Nationwide, more
than 1,000,000 individual investors have purchased Nuveen's tax-
exempt trusts and funds. The present corporation was organized in
1967 as a wholly owned subsidiary of Nuveen Corporation, successor
to the original John Nuveen & Co. founded in 1898 as a sole
proprietorship and incorporated in 1953.  In 1974, the Sponsor
became a wholly-owned subsidiary of The St. Paul Companies, Inc.
("St. Paul"), a financial services management company located in
St. Paul, Minnesota. On May 19, 1992, common shares comprising a
minority interest in The John Nuveen Company ("JNC"), a newly
organized corporation which holds all of the shares of the Sponsor,
were sold to the public in an initial public offering.  St. Paul
retains a controlling interest in JNC with over 70% of JNC's
shares.  The Sponsor is a member of the National Association of
Securities Dealers, Inc., and the Securities Industry Association
and has its principal offices located in Chicago (333 W. Wacker
Drive) and New York (Swiss Bank Tower, 10 East 50th Street).  It
maintains 14 regional offices.


 
 

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AMENDMENT AND TERMINATION OF INDENTURE


The Indenture may be amended by the Trustee and the Sponsor without
the consent of any of the Unitholders (1) to cure any ambiguity or
to correct or supplement any provision thereof which may be
defective or inconsistent, or (2) to make such other provisions as
shall not adversely affect the Unitholders, provided, however, that
the Indenture may not be amended to increase the number of Units in
a Trust or to permit the deposit or acquisition of bonds either in
addition to, or in substitution for, any of the Bonds initially
deposited in a Trust except the substitution of refunding bonds
under certain circumstances.  The Trustee shall advise the
Unitholders of any amendment promptly after execution thereof.

A Trust may be liquidated at any time by the written consent of
100% of the Unitholders of such Trust or by the Trustee when the
value of such Trust, as shown by any semi-annual evaluation, is
less than 20% of the original principal amount of the Trust and
will be liquidated by the Trustee in the event that Units not yet
sold aggregating more than 60% of the Units originally created are
tendered for redemption by the Sponsor thereby reducing the net
worth of the Trust to less than 40% of the principal amount of the
Bonds originally deposited in the portfolio.  The sale of Bonds
from the Trusts upon termination may result in realization of a
lesser amount than might otherwise be realized if such sale were
not required at such time.  For this reason, among others, the
amount realized by a Unitholder upon termination may be less than
the principal amount of Bonds originally represented by the Units
held by such Unitholder.  The Indenture with respect to any Trust
will terminate upon the redemption, sale or other disposition of
the last Bond held thereunder, but in no event shall it continue
beyond the end of the calendar year preceding the fiftieth
anniversary of its execution for National, State and Discount
Trusts, beyond the end of the calendar year preceding the twentieth
anniversary of its execution for Long Intermediate, State
Intermediate, Intermediate and Compound Interest Trusts or beyond
the end of the calendar year preceding the tenth anniversary of its
execution for Short Intermediate and Short Term Trusts.


Written notice of any termination specifying the time or times at
which Unitholders may surrender their Certificates, if any, for
cancellation shall be given by the Trustee to each Unitholder at
the address appearing on the registration books of the Trust
maintained by the Trustee.  Within a reasonable time thereafter the
Trustee will liquidate any Bonds in the Trust then held and shall
deduct from the assets of the Trust any accrued costs, expenses or
indemnities provided by the Indenture which are allocable to such
Trust, including estimated compensation of the Trustee and costs of
liquidation and any amounts required as a reserve to provide for
payment of any applicable taxes or other governmental charges.  The
Trustee shall then distribute to Unitholders of such Trust their
pro rata share of the balance of the Interest and Principal
Accounts.  With such distribution the Unitholders shall be
furnished a final distribution statement, in substantially the same
form as the annual distribution statement, of the amount
distributable.  At such time as the Trustee in its sole discretion
shall determine that any amounts held in reserve are no longer
necessary, it shall make distribution thereof to Unitholders in the
same manner.

LEGAL OPINION


The legality of the Units offered hereby has been passed upon by
Chapman and Cutler, 111 West Monroe Street, Chicago, Illinois
60603.  Special counsel for the Trusts for respective state matters
are named in "Tax Status of Unitholders" herein.  Carter, Ledyard
& Milburn, 2 Wall Street, New York, New York 10005, act as counsel
for the Trustee with respect to the Trusts and as special New York
tax counsel for the Trusts.

AUDITORS


The Statement of Condition and the Schedule of Investments for each
Trust in a Series and the related Statement of Operations and
Statement of Changes in Condition and changes in the Trust Units
have been audited by Arthur Andersen & Co., independent public
accountants, as indicated in their report in Part Two of this
Prospectus with information pertaining to the specific Trusts in
the Series to which such report relates, and are set forth in
reliance upon the authority of said firm as experts in giving said
report.

DESCRIPTION OF RATINGS (as published by the rating companies)


Standard & Poor's Corporation. A description of the applicable
Standard & Poor's Corporation rating symbols and their meanings
follows:


A Standard & Poor's rating is a current assessment of the
creditworthiness of an obligor with respect to a specific
obligation.  This assessment may take into consideration obligors
such as guarantors, insurers or lessees.

The rating is not a recommendation to purchase, sell or hold a
security, inasmuch as it does not comment as to market price or
suitability for a particular investor.

The ratings are based on current information furnished by the
issuer or obtained by Standard & Poor's from other sources it
considers reliable. Standard & Poor's does not perform an audit in
connection with any rating and may, on occasion, rely on unaudited
financial information.  The ratings may be changed, suspended or
withdrawn as a result of changes in, or unavailability of, such
information, or for other circumstances.
The ratings are based, in varying degrees, on the following
considerations:


I.   Likelihood of default - capacity and willingness of the
obligor as to the timely payment of interest and repayment of     
 principal in accordance with the terms of the obligation;

II.  Nature of and provisions of the obligation;



 
 

Page 77




III. Protection afforded by, and relative position of, the
obligation in the event of bankruptcy, reorganization or other    
arrangement under the laws of bankruptcy and other laws affecting
creditors' rights.

AAA - This is the highest rating assigned by Standard & Poor's to
a debt obligation.  Capacity to pay interest and repay principal is
extremely strong.


AA - Bonds rated AA have a very strong capacity to pay interest and
repay principal, and differ from the highest rated issues only in
small degree.


A - Bonds rated A have a strong capacity to pay interest and repay
principal, although they are somewhat more susceptible to the
adverse effect of changes in circumstances and economic conditions
than bonds in higher rated categories.


BBB - Bonds rated BBB are regarded as having an adequate capacity
to pay interest and repay principal.  Whereas they normally exhibit
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 bonds in this
category than for bonds in the higher rated categories.

BB, B, CCC, CC - Bonds rated BB, B, CCC and CC are regarded as
having predominantly speculative characteristics with respect to
capacity to pay interest and repay principal.  BB indicates the
least degree of speculation and CC the highest.  While such debt
will likely have some quality and protective characteristics, these
are outweighed by large uncertainties or major risk exposures to
adverse conditions.

Plus (+) or Minus (-): 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.

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

Note Ratings: A Standard & Poor's note rating reflects the
liquidity concerns and market access risks unique to notes. Notes
due in three years or less will likely receive a note rating. 
Notes maturing beyond three years will most likely receive a long-
term debt rating.


Note rating symbols are 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.


CreditWatch.  CreditWatch highlights potential changes in ratings
of bonds and other fixed income securities.  It focuses on events
and trends which place companies and government units under special
surveillance by Standard & Poor's analytical staff.  These may
include mergers, voter referendums, actions by regulatory
authorities, or developments gleaned from analytical review. 
Unless otherwise noted, a rating decision will be made within 90
days. Issues appear on CreditWatch where an event, situation, or
deviation from trends occurred and needs to be evaluated. A
listing, however, does not mean a rating change is inevitable. 
Since Standard & Poor's continuously monitors all of its ratings,
CreditWatch is not intended to include all issues under review.
Thus, rating changes will occur without issues appearing on
CreditWatch.


Ratings of Insured Trust Units.  A Standard & Poor's Corporation
rating on the units of an insured investment trust (hereinafter
referred to collectively as "units" and "trusts") is a current
assessment of creditworthiness with respect to the investments held
by such trust.  This assessment takes into consideration the
financial capacity of the issuers and of any guarantors, insurers,
lessees or mortgagors with respect to such investments.  The
assessment, however, does not take into account the extent to which
trust expenses or portfolio asset sales for less than the trust
purchase price will reduce payment to the unitholder of the
interest and principal required to be paid on the portfolio assets. 
In addition, the rating is not a recommendation to purchase, sell
or hold units, inasmuch as the rating does not comment as to market
price of the units or suitability for a particular investor.

Units rated AAA are composed exclusively of assets that are rated
AAA by Standard & Poor's or certain short-term investments, or
both.  Standard & Poor's defines its AAA rating for such assets as
the highest rating assigned by Standard & Poor's to a debt
obligation. Capacity to pay interest and repay principal is very
strong.  However, unit ratings may be subject to revision or
withdrawal at any time by Standard & Poor's and each rating should
be evaluated independently of any other rating.

Moody's Investors Service, Inc.  A brief description of the
applicable Moody's Investors Service, Inc. rating symbols and their
meanings follow:





 
 

 
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Aaa - Bonds which are rated Aaa are judged to be 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.  Their safety is so
absolute that, with the occasional exception of oversupply in a few
specific instances, characteristically, their market value is
affected solely by money market fluctuations.

Aa - 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 fluctuations 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 in Aaa securities.
Their market value is virtually immune to all but money market
influences, with the occasional exception of oversupply in a few
specific instances.

A - 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. The market
value of A-rated bonds may be influenced to some degree by economic
performance during a sustained period of depressed business
conditions, but, during periods of normalcy, A-rated bonds
frequently move in parallel with Aaa and Aa obligations, with the
occasional exception of oversupply in a few specific instances.

Moody's bond rating symbols may contain numerical modifiers of a
generic rating classification.  The modifier 1 indicates that the
bond ranks at the high end of its 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.

Baa - 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.  The market value of Baa-
rated bonds is more sensitive to changes in economic circumstances,
and aside from occasional speculative factors applying to some
bonds of this class, Baa market valuations move in parallel with
Aaa, Aa and A obligations during periods of economic normalcy,
except in instances of oversupply.


Ba - 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.

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

Con. (-) - Bonds for which the security depends upon the completion
of some act or the fulfillment of some condition are rated
conditionally.  These are bonds secured by (a) earnings of projects
under construction, (b) earnings of projects unseasoned in
operation experience, (c) rentals which begin when facilities are
completed, or (d) payments to which some other limiting condition
attaches.  Parenthetical rating denotes probable credit stature
upon completion of construction or elimination of basis of
condition.


Note Ratings:


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 so large as in the preceding
group.












 
 








 
 

 
Page 79



                                           Prospectus Part One must
be accompanied by Part Two


Sponsor                            John Nuveen & Co. Incorporated
333 West Wacker Drive
Chicago, Illinois  60606-1286
312/917-7700


Swiss Bank Tower
10 East 50th Street
New York, New York 10022
212/207-2000


Trustee                            United States Trust Company of
New York 770 Broadway
New York, New York  10003
800/257-8787


Legal Counsel                      Chapman and Cutler
to Sponsor                        111 West Monroe Street
Chicago, Illinois 60603


Legal Counsel                      Carter, Ledyard & Milburn to
Trustee                        2 Wall Street
New York, New York  10005


Independent                        Arthur Andersen & Co.
Public Accountants                 33 West Monroe Street
for the Trust                      Chicago, Illinois  60603


- -----------------
Except as to statements made herein furnished by the Trustee, the
Trustee has assumed no responsibility for the accuracy, adequacy
and completeness of the information contained in this Prospectus.

This Prospectus does not contain all of the information set forth
in the registration statement and exhibits relating thereto, filed
with the Securities and Exchange Commission, Washington, D.C.,
under the Securities Act of 1933, as amended, and to which
reference is made.

No person is authorized to give any information or to make any
representations not contained in this Prospectus or in
supplementary sales literature prepared by the Sponsor; and any
information or representation not contained herein must not be
relied upon as having been authorized by either the Trusts, the
Trustee or the Sponsor.  This Prospectus does not constitute an
offer to sell, or a solicitation of an offer to buy, securities in
any State to any person to whom it is not lawful to make such offer
in such state.  The Trusts are registered as a Unit Investment
Trust under the Investment Company Act of 1940, as amended.  Such
registration does not imply that the Trusts or any of their Units
has been guaranteed, sponsored, recommended or approved by the
United States or any State or agency or officer thereof.


 
 


 
 

 
 
                                   SEC FILE NO.  2-69694
                                 40 ACT FILE NO.  811-2271
 
 
                    SECURITIES AND EXCHANGE COMMISSION
                          WASHINGTON, D.C.  20549
 
 
                              POST-EFFECTIVE
                              AMENDMENT NO. 12
                                     TO
                                  FORM S-6
 
 
For registration under the Securities Act of 1933 of Securities of Unit
Investment Trusts registered on Form N-8B-2
 
            Nuveen Tax-Exempt Unit Trust, Series 169
 
 
 
                         JOHN NUVEEN & CO. INCORPORATED
                               (Name of Depositor)
 
 
                            333 West Wacker Drive
                            Chicago, Illinois  60606
             (Complete address of Depositor's Principal Executive Offices)
 
 
John Nuveen & Co., Incorporated          Chapman & Cutler
 Attention:  James J. Wesolowski          Attention:  Daniel C. Bird Jr.
 333 West Wacker Drive                    111 West Monroe Street
 Chicago, Illinois  60606                 Chicago, Illinois  60603
            (Name and complete address of Agents for Service)
 
 
 
 
An indefinite number of Units has been registered pursuant to Rule 24F-2
promulgated under the Investment Company Act of 1940, as amended.  On February
28, 1990, a Rule 24F-2 Notice with respect to this Series was filed with the
Securities and Exchange Commission.
 
It is proposed that this filing will become effective (check appropriate box)
 
 
(     )  Immediately upon filing pursuant to paragraph (B)
 (  X  )  On March  1, 1994 pursuant to paragraph (B) of Rule 485
 (     )  60 days after filing pursuant to paragraph (A)
 (     )  On (date) pursuant to paragraph (A) of Rule (485 or 486)
 
 
(     )  Check box if it is proposed that this filing will become
          effective on (date) at (time) pursuant to Rule 487.
 
 
 
 
 
 
          Contents of Post-Effective Amendment
                of Registration Statement
 
 
     This Post-Effective Amendment of Registration Statement comprises the
following papers and documents:
 
                 The Facing Sheet
 
 
                 The Prospectus
 
 
                 The Signatures
 
 
                 The Consent of Independent Accounts
 
 
Part One of the Registrant's Prospectus, filed separately, is incorporated by
this Reference hereto.
 
 
      PAGE   2
 
 
Tax-Exempt Unit Trust
 
 
Series 169
 
 
National Traditional Trust 169                        337,478.617 Units
 
Prospectus
 Part Two
 Revision  Date  March  1, 1994

Note: This Prospectus Part Two may not be distributed unless accompanied by
Part One.
 
Currently Offered at Public Offering Price plus interest accrued to the date
of settlement.  Minimum purchase - either $5,000 or 50 Units, whichever is
less.
 
THE UNITS of fractional undivided interest in the Nuveen Tax-Exempt Unit
Trust being offered hereby are issued and outstanding Units that have been
reacquired by John Nuveen & Co.  Incorporated either by purchase of Units
tendered to the Trustee for redemption or by purchase in the open market.  The
price paid in each instance was not less than the Redemption Price determined
as provided in Part One under the caption "How Units May Be Redeemed Without
Charge."  The Units are being offered at the Public Offering Price computed in
the manner described in Part One under the caption "Public Offering Price."
Any profit or loss resulting from the sale of Units will accrue to John Nuveen
& Co.  Incorporated and no proceeds from the sale will be received by the
Trust.
 
 
THE NUVEEN TAX-EXEMPT UNIT TRUST consists of a number of underlying separate
unit investment trusts, each of which contains a diversified portfolio of
interest-bearing obligations issued by or on behalf of the states (or in the
case of State Trusts, primarily by or on behalf of the State for which such
State Trust is named) and counties, municipalities, authorities and political
subdivisions thereof, the interest on which is, in the opinion of bond counsel
to each issuer, exempt from all Federal income tax and, in the case of a State
Trust, from State income taxes in the State for which such State Trust is
named.  All Bonds in each Trust were rated in the category "A" or better by
Standard & Poor's Corporation or Moody's Investors Service, Inc. on the Date
of Deposit ("BBB" or "Baa", respectively, or better by such services in the
case of National Traditional Trust 76 and earlier National Traditional
Trusts). Current ratings, if any, on Bonds in a Trust are set forth in the
Schedule of Investments for such trust herein.
 
 
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS.  ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
 
 
      PAGE   3


 
 
                                 ESSENTIAL INFORMATION REGARDING THE TRUST(S)
                                           As Of December 31, 1993
                          Sponsor and Evaluator.......John Nuveen & Co. Incorporated
                          Trustee............United States Trust Company of New York
The income, expense and distribution data set forth below have been calculated for Unitholders electing to receive monthly
distributions.  Unitholders choosing distributions quarterly or semi-annually will receive a slightly higher net annual interest
income because of the lower Trustee's fees and expenses under such plans.
 

                                                                                                 National
                                                                                            Traditional Trust
                                                                                                   169
- -----------------------------------------------------------------------------------------  ------------------
                                                                                         

Principal Amount of Bonds in Trust.......................................................   $    4,960,000
Number of Units..........................................................................      333,483.037
Fractional Undivided Interest in Trust Per Unit..........................................   1/ 333,483.037
Public Offering Price --- Less then 1,000 Units
    Aggregate Bid Price of Bonds in Trust................................................   $    7,051,081
    Plus Sales Charge ...............................................................   $      357,564
      Total..............................................................................   $    7,408,645
    Divided by Number of Units...........................................................   $     22.22
    Plus Cash Per Unit ..............................................................   $      0.66
    Public Offering Price Per Unit ..................................................   $     22.88
Redemption Price Per Unit (exclusive of accrued interest)................................   $     21.81
Sponsor's Repurchase Price Per Unit (exclusive of accrued interest)......................   $     21.81
Excess of Public Offering Price Per Unit over Redemption Price Per Unit..................   $      1.07
Excess of Public Offering Price per Unit over Sponsor's Repurchase price Per Unit........   $      1.07
    Par Value Per Unit ..............................................................   $     15.54
Calculation of Net Annual Interest Income Per Unit
    Annual Interest Income...............................................................   $      1.5265
    Less Estimated Annual Expense........................................................   $      0.0212
    Net Annual Interest Income...........................................................   $      1.5053
Daily Rate of Accrual Per Unit...........................................................   $      0.00418
Estimated Current Return ............................................................          6.58%
Estimated Long Term Return ..........................................................          5.10%
Record Dates ................................................  See "Distributions to Unitholders" in Part One
Distribution Dates ..........................................  See "Distributions to Unitholders" in Part One
Minimum Principal Distribution .............................................................  $0.10 per Unit.
Date Trust Established ...................................................................  December 23, 1980
Mandatory Termination Date ........................  See "Amendment and Termination of Indenture" in Part One
Minimum Value of Trust ............................  See "Amendment and Termination of Indenture" in Part One
Trustee's Annual Fee ..................................................  See "Operation Expenses" in Part One
Sponsor's Annual Evaluation Fee .................................  $0.170 per $1000 principal amount of Bonds
Evaluations for purpose of sale, purchase or redemption of Units are made as of the close of trading on the New York Stock Exchange
next following receipt by John Nuveen & Co. Incorporated of an order for a sale or purchase of units or receipt by United States
Trust Company of New York of units tendered for redemption.
 
- -------------------------------------------------------------------------------------------------------------

(1)      See "Public Offering Price" in Part One for the method by which the
sales charge is calculated.

(2)   This amount represents cash held by the Trust (or an advancement of
cash to the Trust by the Trustee) which may amount to less than $.01 per Unit
and is added to (or deducted from) the Public Offering Price.

(3)   Units are offered at the Public Offering Price plus accrued interest to
the date of settlement (five business days after purchase).  On the above date
there was added to the Public Offering Price of the National Traditional Trust
169, $22.88, accrued interest to the settlement date of $.19, for a total
price of $23.07.

(4)   Par value per Unit is each Unit's pro rata share of aggregate principal
amount of Bonds in the Trust adjusted to reflect cash, if any, held in or
advanced to the Principal Account.

(5)   Estimated Long Term Return for each Trust represents the average of the
yields to maturity (or call) of the Bonds in the Trust's portfolio calculated
in accordance with accepted bond practices and adjusted to reflect expenses
and sales charges.  Estimated Current Return is computed by dividing the Net
Annual Interest Income per Unit by the Public Offering Price, and in contrast
to Estimated Long Term Return does not reflect the amortization of premium or
accretion of discount, if any.  The Estimated Current Return and Estimated
Long Term Return will vary with changes in the Public Offering Price and there
is no assurance that either such figures on the date hereof will be applicable
on a subsequent date of purchase. (See "Estimated Current Return to
Unitholders" in, and the Supplement to, Part One.) The Estimated Current
Returns and Estimated Long Term Returns are higher for transactions entitled
to a reduced sales charge. (See "Public Offering Price", Part One.)
 

 
 
      PAGE   4

 

 
                           NUVEEN TAX-EXEMPT UNIT TRUST
                          NATIONAL TRADITIONAL TRUST 169
                                   (Series 169)
 
                             Statement of Net Assets
                                 October 31, 1993
 
                                                                
Assets:
     Investments in municipal securities,
       at market value (Cost $4,811,644) (Note 1) ............... $   7,402,916
     Accrued interest receivable ................................       180,900
                                                                  --------------
 
               Total assets ..................................... $   7,583,816
                                                                  --------------
 
Liabilities:
     Advance from Trustee ....................................... $      11,318
     Payable to unitholders for units redeemed ..................         2,191
     Accrued trustee and evaluator fees .........................         8,156
                                                                  --------------
 
               Total liabilities ................................ $      21,665
                                                                  --------------
 
               Net assets, applicable to 337,479 units of
                 fractional undivided interest outstanding ...... $   7,562,151
                                                                  ==============
 
Net assets, represented by:
     Cost to original investors of 500,000 units sold ........... $  51,302,839
       Less initial underwriting commission (Note 1) ............  (  2,308,608)
                                                                  --------------
                                                                  $  48,994,231
     Less cost of 162,521 units redeemed ........................  (  9,606,044)
                                                                  --------------
                                                                  $  39,388,187
     Undistributed net investment income ........................       165,333
     Unrealized appreciation (depreciation) of investments ......     2,591,272
     Accumulated net realized gain (loss) from
       investment transactions ..................................  (  1,604,461)
     Principal distributions to unitholders of proceeds
       from investment transactions .............................  ( 32,978,180)
                                                                  --------------
                                                                  $   7,562,151
                                                                  ==============
 
Net asset value per unit:
                                                          Net Asset Value Per Unit
                                                    Before
             Type of                 Units         Accrued        Accrued
        Income Distribution       Outstanding      Interest       Interest         Total
     Monthly..................     165,933        $   21.92     $    .27        $  22.19
     Quarterly................      90,285            21.92          .52           22.44
     Semi-Annual..............      81,261            21.92          .91           22.83
                                ---------------  ============  ==============  ===========
                                   337,479
                                ===============
 
 
 
See accompanying notes to financial statements.
 

 
 
      PAGE   5

 
 

                                        NUVEEN TAX-EXEMPT UNIT TRUST
                                       NATIONAL TRADITIONAL TRUST 169
                                                (Series 169)
 
                             Statements of Operations and Changes in Net Assets
 
 
                                                                      Year Ended October 31,
                                                       ----------------------------------------------------
                                                             1993              1992              1991
                                                       ----------------  ----------------  ----------------
Statement of Operations
 
                                                                                  

Investment income (Note 1):
  Interest income ...................................  $       543,099   $       575,866   $     1,091,370
                                                       ----------------  ----------------  ----------------
 
  Expenses (Note 3):
    Trustee fees and expenses .......................  $        16,447   $        12,345   $        23,289
    Evaluator fees ..................................              935               993             1,833
                                                       ----------------  ----------------  ----------------
 
        Total expenses ..............................  $        17,382   $        13,338   $        25,122
                                                       ----------------  ----------------  ----------------
 
            Net investment income ...................  $       525,717   $       562,528   $     1,066,248
                                                       ----------------  ----------------  ----------------
 
Realized and unrealized gain (loss) on investments
  (Note 1):
    Net realized gain (loss) from investment
      transactions ..................................  $        78,532   $        92,883   $       770,078
    Net change in unrealized appreciation or
      depreciation of investments ...................          357,154               459    (      497,795)
                                                       ----------------  ----------------  ----------------
 
            Net gain (loss) on investments ..........  $       435,686   $        93,342   $       272,283
                                                       ----------------  ----------------  ----------------
 
Net increase (decrease) in net assets
    from operations .................................  $       961,403   $       655,870   $     1,338,531
                                                       ================  ================  ================
 
 
Statement of Changes in Net Assets
Operations:
  Net investment income .............................  $       525,717   $       562,528   $     1,066,248
  Net realized gain (loss) from investment
    transactions (Note 1) ...........................           78,532            92,883           770,078
  Net change in unrealized appreciation or
    depreciation of investments .....................          357,154               459    (      497,795)
                                                       ----------------  ----------------  ----------------
 
      Net increase (decrease) in net assets
        from operations .............................  $       961,403   $       655,870   $     1,338,531
                                                       ----------------  ----------------  ----------------
 
Distributions to unitholders from:
  Net investment income .............................  $(      546,314)  $(      619,448)  $(    1,709,825)
  Proceeds from investment transactions .............                0    (       49,163)   (   21,721,376)
                                                       ----------------  ----------------  ----------------
 
      Total distributions to unitholders ............  $(      546,314)  $(      668,611)  $(   23,431,201)
                                                       ----------------  ----------------  ----------------
 
Redemption of 14,082, 22,850 and
    40,229 units, respectively ......................  $(      302,572)  $(      471,247)  $(    1,161,779)
                                                       ----------------  ----------------  ----------------
 
Total increase (decrease) in net assets .............  $       112,517   $(      483,988)  $(   23,254,449)
 
Net assets at beginning of year .....................        7,449,634         7,933,622        31,188,071
                                                       ----------------  ----------------  ----------------
Net assets at end of year (including
  undistributed net investment income of
 $165,333,$185,930 and $242,850,respectively) .......  $     7,562,151   $     7,449,634   $     7,933,622
                                                       ================  ================  ================
 
 
See accompanying notes to financial statements.

 
 
      PAGE   6


 
 
                                                    NUVEEN TAX-EXEMPT UNIT TRUST
                                                   NATIONAL TRADITIONAL TRUST 169
                                                            (Series 169)
 
                                                      Schedule of Investments
                                                          October 31, 1993
 

                                                                                              Ratings(2)          Carrying
                                                                           Optional           ----------            Value
                                                                          Redemption      Standard                at Market
Principal                     Name of Issuer and Title of Issue          Provisions(1)    & Poor's   Moody's    (Bid Prices)
- ------------        ---------------------------------------------------  -------------    ---------- ---------- ------------
                                                                                                 
 
$  2,285,000        State of Indiana, Indiana Toll Road Commission,                          AAA        Aaa     $
                     East-West Toll Road Revenue Bonds, 1980 Series,
                     140M-10.000% Due 1/1/2000, (Escrow Secured To       1998 at 100                                 167,880
                     Optional Redemption Date.)
                     2,145M-9.000% Due 1/1/2015. (Original issue         No Optional Call                          2,972,820
                     discount bonds delivered on or about September 25,
                     1980 at a price of 86.114% of principal amount.)
                     (Escrow Secured.)
 
   1,865,000        Boston Water and Sewer Commission (A Public          No Optional Call    AAA        Aaa
                     Instrumentality of the Commonwealth of
                     Massachusetts), System Revenue Bonds, 1980 Series
                     A,
                     1,820M-10.875% Due 1/1/2009, (Escrow Secured.)                                                2,645,315
                     45M-9.250% Due 1/1/2011. (Escrow Secured.)                                                       60,905
 
     245,000        Minnesota Housing Finance Agency, Residential        1994 at 103          AA         Aa          251,149
                     Mortgage Bonds, 1980 Series A, 8.750% Due
                     7/1/2012.
 
     725,000        North Carolina Municipal Power Agency Number 1,      No Optional Call    AAA        Aaa        1,057,587
                     Catawba Electric Revenue Bonds, Series 1980,
                     10.500% Due 1/1/2010. (Escrow Secured.)
 
     240,000        Wisconsin Housing Finance Authority, Housing         1994 at 101.5        A          A1          247,260
                     Revenue Bonds, 1980 Series A, 10.000% Due
                     11/1/2010.
 
- ------------                                                                                                    ------------
$  5,360,000                                                                                                    $  7,402,916
============                                                                                                    ============
 
- ------------------------------------------------------------------------------------------------------------------------------------
 
See accompanying notes to Financial Statements and notes to Schedule of Investments.
 
All of the issues are payable as to principal and interest from the income of
a specific project or authority and are not supported by the issuers' power to
levy taxes.  Payment of principal and interest on three Bond(s) in the Trust
is secured by funds or securities deposited in escrow.  The sources of payment
for the remaining issues in the Trust are divided as follows: Multi-Family
Housing Revenue,  1; Single Family Housing Revenue,  1.  To the extent that
the legal obligor on any Bond held in the Trust fails to pay interest and
principal thereon, the interest income to the Trust would be reduced and the
aggregate principal amount payable to the Trust upon maturity of such Bond
would not be received by the Trust and, therefore, would not be available for
distribution to Unitholders.
 
 
 
      PAGE   7

 
 
                                                    NUVEEN TAX-EXEMPT UNIT TRUST
                                                   NATIONAL TRADITIONAL TRUST 169
                                                            (Series 169)
 
Schedule of Investments
                                                          October 31, 1993
 
 
 
- ------------------------------------------------------------------------------------------------------------------------------------
Approximately 5% of the aggregate principal amount of Bonds in the Trust
consist of obligations of issuers whose revenues are derived from the sale or
service of Single Family Housing Revenue.
 
For a discussion of the characteristics of bonds issued by various types of
issuers and of the risks associated with an investment therein, see "Selection
of Bonds for Deposit in the Trusts" in Part One.
 
Approximately 40% of the principal amount of the Bonds in the Trust are
original issue discount bonds.  These Bonds were issued with nominal interest
rates less than the rates then offered by comparable securities and as a
consequence were originally sold at a discount from their face, or par values.
The original issue discount, the difference between the initial purchase price
and face value, is deemed under current law to accrue on a daily basis and the
accrued portion is treated as tax-exempt interest income for federal income
tax purposes.  On sale or redemption, gain, if any, realized in excess of the
earned portion of original issue discount will be taxable as capital gain. See
"Tax Status of Unitholders" in Part One.  The current value of an original
issue discount bond reflects the present value of its face amount at maturity.
In a stable interest rate environment, the market value of an original issue
discount bond would tend to increase more slowly in early years and in greater
increments as the bond approached maturity.  All original issue discount bonds
may be subject to redemption at prices based on the issue price plus the
amount of original issue discount accreted to redemption plus, if applicable,
some premium.  Pursuant to such call provisions an original issue discount
bond may be called prior to its maturity date at a price less than its face
value.
 
Five issues in the Trust were rated by Standard & Poor's Corporation as
follows: 3--AAA, 1--AA, 1--A.  Five issues were rated by Moody's Investors
Service, Inc. as follows: 3--Aaa, 1--Aa, 1--A1.  43%  of the Bonds comprise
issues of entities located in the state of Indiana. The Bond Portfolio
consists of 5 obligations issued by entities located in 5 states.

 
 
      PAGE   8
 
 
Notes To Financial Statements
 
1.  Summary of Significant Accounting Policies:
     The Trustee is responsible for maintaining the books and records of the
Trust on a cash basis and for safekeeping securities owned by the Trust.  The
Sponsor is responsible for preparation of the financial statements in
accordance with generally accepted accounting principles based upon the books
and records provided by the Trustee.  The following is a summary of the
significant accounting policies followed by each Trust.
 
    Security Valuation - Tax-Exempt Bonds are reflected at market value in the
accompanying statement of net assets.  The Sponsor determines the market price
of the Bonds in each Trust (1) on the basis of current bid prices of the Bonds
obtained from dealers or brokers (including the Sponsor) who customarily deal
in bonds comparable to those held by the Trust, (2) if bid prices are not
available for any of the Bonds, on the basis of bid prices for comparable
bonds, (3) by causing the value of the Bonds to be determined by others
engaged in the practice of evaluating, quoting or appraising comparable bonds,
or (4) by any combination of the above.
     Unit Valuation - On the Date of Deposit, the Public Offering Price of
Units was determined by adding a sales charge to the Trustee's determination
of the offering price of the Bonds.  The value of Units offered in the
secondary market maintained by the Sponsor is based upon the pro rata share of
the bid price of the Bonds, plus a sales charge determined in accordance with
the table set forth in Part One under the caption "Public Offering Price"
based on the number of years remaining to the maturity of each Bond and
adjusted for cash, if any, held or owed by such Trust.
     The initial underwriting commission and investors' original cost of
Units, as shown on the statement of net assets, are based upon the assumption
that the maximum sales commission was charged for each initial purchase of
Units.
     Income and Expenses - Income and expenses are recognized on the accrual
basis of accounting.  Gains and losses from Bond transactions are determined
on a specific identification basis.
 
2.  Income Tax Status:
     Each Trust is not an association taxable as a corporation for Federal
income tax purposes, and, therefore, has recorded no provision for Federal
income taxes.  Each unitholder is considered to be the owner of a pro rata
portion of the Trust under Subpart E, subchapter J of Chapter 1 of the
Internal Revenue Code of 1986 and will have a taxable event each time the
Trust disposes of a bond.
 
3.  Operating Expenses:
     See "Operating Expenses" in Part One of this Prospectus for information
with respect to trustee and evaluator fees and expenses.
 
 
 
 
 
Notes To Schedule(s) Of Investments
 
1.  The Bonds are first subject to optional redemption in the years, and at
the prices shown.  Unless otherwise indicated, the Bonds, except for Bonds
issued at a substantial original issue discount, are redeemable at declining
prices (but not below par value) in subsequent years.  Original issue discount
bonds are generally redeemable at prices based on the issue price plus the
amount of original issue discount accreted to redemption plus, if applicable,
some premium, the amount of which will decline in subsequent years.  The Bonds
may also be subject to sinking fund redemption without premium prior to the
dates shown.
     Certain Bonds may be subject to redemption without premium prior to the
date shown pursuant to special or mandatory call provisions; for example, if
bond proceeds are not able to be used as contemplated, the project is
condemned or sold, or the project is destroyed and insurance proceeds are used
to redeem the bonds.  Single family mortgage revenue bonds and housing
authority bonds are most likely to be called subject to such provisions, but
other bonds may have similar call features.  (See Part One, "Selection of
Bonds for Deposit in the Trust.")
     The Trustee's determination of the offering price of Bonds in the Trust
may be greater or less than the amounts that may be received upon redemption
or maturity of such Bonds. Subject to rules concerning amortization of bond
premium and of original issue discount, gain or loss realized by the Trustee
on disposition of any Bonds will be recognized as taxable capital gain or loss
by Unitholders.  (See Part One, "Tax Status of Unitholders.")
 
2.  The ratings shown are those assigned as of the date of the Schedule of
Investments. Any Bonds insured by MBIA, are rated AAA by Standard & Poor's
Corporation and Aaa by Moody's Investors Service, Inc. (See Part One,
"Insurance on Bonds.").
 
 
      PAGE   9
 
 
                REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
 
 
 
To the Board of Directors of John Nuveen & Co. Incorporated and Unitholders of
Nuveen Tax-Exempt Unit Trust,  Series 169:
 
 
We have audited the accompanying statements of net assets and schedules of
investments of Nuveen Tax-Exempt Unit Trust, Series 169 (comprising, National
Traditional Trust 169), as of October 31, 1993 and the related statements of
operations and changes in net assets for the periods indicated on the face of
the financial statements.  These financial statements are the responsibility
of the Sponsor (See Note 1).  Our responsibility is to express an opinion on
these financial statements based on our audits.
 
We conducted our audits in accordance with generally accepted auditing
standards.  Those standards 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. An audit
also includes assessing the accounting principles used and significant
estimates made by the Sponsor, as well as evaluating the overall financial
statement presentation.  In addition, securities owned as of October 31, 1993
were confirmed by direct correspondence with the Trustee.  We believe that our
audits provide a reasonable basis for our opinion.
 
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the trusts constituting the
Nuveen Tax-Exempt Unit Trust, Series 169, as of October 31, 1993, the results
of their operations and changes in their net assets for the periods indicated
on the face of the financial statements,  in conformity with generally
accepted accounting principles.
 
                       ARTHUR ANDERSEN & CO.
 
 
 
Chicago, Illinois,
February 15, 1994.
 
 
      PAGE  10
 
 
Prospectus 

Part Two must be accompanied by Part One
 
 
Sponsor                      John Nuveen & Co. Incorporated
                              333 West Wacker Drive
                              Chicago, Illinois 60606
                              312.917.7700
 
 
                             140 Broadway
                              New York, New York 10005
                              212.208.2300
 
 
Trustee                      United States Trust Company of New York
                              770 Broadway
                              New York, New York  10003
                              800.257.8787
 
 
Legal Counsel                Chapman and Cutler
 to Sponsor                   111 West Monroe Street
                              Chicago, Illinois  60603
 
 
Legal Counsel                Carter, Ledyard & Milburn
 to Trustee                   2 Wall Street
                              New York, New York  10005
 
 
Independent                  Arthur Andersen & Co.
 Public Accountants           33 West Monroe Street
 for the Trust                Chicago, Illinois  60603
 
 
 
Except as to the statements made herein furnished by the Trustee, the Trustee
has assumed no responsibility for the accuracy, adequacy and completeness of
the information contained in this Prospectus.
 
This Prospectus does not contain all of the information set forth in the
registration statement and exhibits relating thereto, filed with the
Securities and Exchange Commission, Washington, D.C., under the Securities Act
of 1933, and to which reference is made.
 
No person is authorized to give any information or to make any representations
not contained in this Prospectus; and any information or representation not
contained herein must not be relied upon as having been authorized by the
Trust, the Trustee or the Sponsor.  This Prospectus does not constitute an
offer to sell, or a solicitation of an offer to buy, securities in any State
to any person to whom it is not lawful to make such offer in such state.  The
Trust is registered as a Unit Investment Trust under the Investment Company
Act of 1940.  Such registration does not imply that the Trust or any of its
Units has been guaranteed, sponsored, recommended or approved by the United
States or any State or agency or officer thereof.
 
 
      PAGE  11
 
 
Statement of differences between electronic filing and printed document.
Pursuant to Rule 499(C)  (7) under the Securities Act of 1933 and Rule 0-11
under the Investment Company Act of 1940, Registrant hereby identifies those
differences in the foregoing document between the electronic format in which
it is filed and the printed form in which it will be circulated:      (1) The
printed and distributed Prospectus may be paged differently because the
printed document may contain a different amount of information on each page
from that contained in the electronic transmission.      (2) In the printed
document, footnote symbols may include a "Dagger" or multiple "Dagger".  The
"Dagger" symbol is represented as # in the electronic document.
 
                              Signatures
 
 
     Pursuant to the requirements of the Securities Act of 1933, the
undersigned Registrant certifies that it meets all of the requirements for
effectiveness of this post-effective amendment of its Registration Statement
pursuant to Rule 485(B) under the Securities Act of 1933 and has duly caused
this post-effective amendment of its Registration Statement to be signed on
its behalf by the undersigned thereunto duly authorized, all in the city of
Chicago and state of Illinois on this February 18, 1994.
 
                                      Nuveen Tax-Exempt Unit Trust
                                       Series 169
 
                                      By/S/Larry W. Martin
                                            Vice President
 
 
 
 
                                      By/S/Gifford R. Zimmerman
                                            Assistant Secretary
                                                    or
By/S/Katherine Erwin
                                            Assistant Secretary
 
 
     Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment of Registration Statement has been signed below by
the following persons in the capacities and on the date indicated:
 
         Signatures                                     *Title        Date
 
 
Richard J. Franke            Chairman, Board of Directors and Chief
                              Executive Officer
 
 
Donald E. Sveen              President, Chief Operating Officer and Director
 
 
Anthony T. Dean              Executive Vice President and Director
 
 
Timothy R. Schwertfeger      Executive Vice President and Director
 
 
O. Walter Renfftlen          Vice President and Controller (Principal
                              Accounting Officer)
 
 
                                                    ________________________
                                                     /s/ Larry W. Martin
                                                     Attorney-in-Fact**
 
 
     *The titles of the persons named herein represent their capacity in and
relationship to John Nuveen & Co. Incorporated, The Sponsor.
 
    **An executed copy of each of the related Powers of Attorney has been
filed with the Securities and Exchange Commission with the Amendment to the
Registration Statement on Form S-6 of the Nuveen Tax-Exempt Unit Trust, Series
671 (File No. 33-49175).  The aforesaid Powers of Attorney are incorporated
herein by this reference.
 
 
 
 
 
 
 
 
 
                       Consent of Independent Public Accountants
 
 
     As Independent Public Accountants, we hereby consent to the use of our
Report and to all references to our firm included in this Post-Effective
Amendment of Registration Statement.
 
                        *Arthur Andersen & Co.
 
 
Chicago, Illinois
 February 18, 1994