SCHEDULE 14A INFORMATION

Proxy statement pursuant to Section 14(a) of the Securities Exchange Act
of
1934

Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
________________________________________________________________________
___
___________

Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12

Municipal High Income Fund Inc.
(Name of Registrant as Specified In Its Charter)

Municipal High Income Fund Inc.
(Name of Person(s) Filing Proxy Statement)

Payment of Filing Fee (Check the appropriate box):

[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-
6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act
Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.

1) Title of each class of securities to which transaction
applies:

2) Aggregate number of securities to which transaction applies:

3) Per unit price of other underlying value of transaction
computed
pursuant to Exchange Act Rule 0-11:1

4) Proposed maximum aggregate value of transaction:

1 Set forth the amount on which the filing fee is calculated and
state
how it was determined.

[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number of the Form or Schedule and the date of its filing.

1) Amount Previously Paid:

2) Form, Schedule or Registration Statement No.:

3) Filing Party:

6 4) Date Filed:

MUNICIPAL HIGH INCOME FUND INC.

388 GREENWICH STREET
NEW YORK, NEW YORK 10013
------------------------------------------------------

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON FEBRUARY 16, 1995
------------------------------------------------------

To the Shareholders:

Notice is hereby given that the Annual Meeting of Shareholders of Municipal
High Income Fund Inc. (the "Fund"), will be held at 388 Greenwich Street, 22nd
Floor, New York, New York on February 16, 1995, commencing at 9:00 a.m.

The Annual Meeting is being held for the purposes of:

1. electing two (2) Directors of the Fund (Proposal 1);

2. ratifying the selection of KPMG Peat Marwick LLP as the independent
accountants for the Fund for the current fiscal year of the Fund (Proposal 2);
and

3. transacting such other business as may properly come before the Annual
Meeting and any adjournments thereof.

The close of business on December 19, 1994 has been fixed as the record
date for the determination of shareholders of the Fund entitled to notice of and
to vote at the Annual Meeting and any adjournments thereof.

By Order of the Directors,

CHRISTINA T. SYDOR
Secretary
December 30, 1994
New York, New York

SHAREHOLDERS WHO DO NOT EXPECT TO ATTEND THE ANNUAL MEETING ARE
REQUESTED TO
COMPLETE, SIGN, DATE AND RETURN THE PROXY CARD IN THE ENCLOSED ENVELOPE,
WHICH
NEEDS NO POSTAGE IF MAILED IN THE CONTINENTAL UNITED STATES. INSTRUCTIONS
FOR
THE PROPER EXECUTION OF PROXY CARDS ARE SET FORTH BELOW. IT IS IMPORTANT
THAT
PROXIES BE RETURNED PROMPTLY.

INSTRUCTIONS FOR SIGNING PROXY CARDS

The following general rules for signing proxy cards may be of assistance to
you and avoid the time and expense to the Fund involved in validating your vote
if you fail to sign your proxy card properly.

1. INDIVIDUAL ACCOUNTS: Sign your name exactly as it appears in the
registration on the proxy card.

2. JOINT ACCOUNTS: Either party may sign, but the name of the party
signing should conform exactly to the name shown in the registration on the
proxy card.

3. ALL OTHER ACCOUNTS: The capacity of the individual signing the proxy
card should be indicated unless it is reflected in the form of registration. For
example:

REGISTRATION VALID SIGNATURE
------------ ---------------

CORPORATE ACCOUNTS
------------------
(1) ABC Corp.................. ABC Corp.
(2) ABC Corp.................. John Doe, Treasurer
(3) ABC Corp.
c/o John Doe,
Treasurer.............. John Doe
(4) ABC Corp. Profit
Sharing Plan........... John Doe, Trustee

TRUST ACCOUNTS
--------------
(1) ABC Trust................. Jane B. Doe, Trustee
(2) Jane B. Doe, Trustee
u/t/d 12/28/78......... Jane B. Doe

CUSTODIAL OR ESTATE ACCOUNTS
----------------------------
(1) John B. Smith, Cust.
f/b/o John B. Smith,Jr.
UGMA................... John B. Smith
(2) Estate of John B. Smith... John B. Smith, Jr., Executor

ANNUAL MEETING OF SHAREHOLDERS

FEBRUARY 16, 1995
---------------------------------------------

MUNICIPAL HIGH INCOME FUND INC.

388 GREENWICH STREET
NEW YORK, NEW YORK 10013
---------------------------------------------

PROXY STATEMENT

INTRODUCTION

This proxy statement is being furnished in connection with the solicitation
of proxies by the Board of Directors of Municipal High Income Fund Inc. (the
"Fund") for use at the Annual Meeting of Shareholders of the Fund, to be held on
February 16, 1995, or any adjournment or adjournments thereof (collectively, the
"Meeting"). The Meeting will be held at 388 Greenwich Street, 22nd Floor, New
York, New York, at 9:00 a.m. This proxy statement and accompanying proxy card
are first being mailed on or about December 30, 1994. Proxy solicitations will
be made primarily by mail, but proxy solicitations also may be made by
telephone, telegraph or personal interviews conducted by officers and employees
of the Fund; Greenwich Street Advisors (the "Adviser"), the adviser for the
Fund; The Boston Company Advisors, Inc., the sub-administrator for the Fund
("Boston Advisors"); and/or The Shareholder Services Group, Inc. ("TSSG"), a
subsidiary of First Data Corporation, the transfer agent for the Fund. The costs
of proxy solicitation and expenses incurred in connection with the preparation
of this proxy statement and its enclosures will be paid by the Fund. The Fund
will also reimburse brokerage firms and others for their expenses in forwarding
solicitation material to the beneficial owners of Fund shares. The Annual Report
of the Fund, including audited financial statements for the fiscal year ended
October 31, 1994, is being furnished to all shareholders of the Fund herewith.

If the enclosed proxy is properly executed and returned in time to be voted
at the Meeting, the shares represented thereby will be voted in accordance with
the instructions marked thereon. Unless instructions to the contrary are marked
thereon, a proxy will be voted FOR each of the nominees for director and FOR the
other matters listed in the accompanying Notice of Annual Meeting of
Shareholders. For purposes of determining the presence of a quorum for
transacting business at the Meeting, abstentions and broker "non-votes"(that is,
proxies from brokers or nominees indicating that such persons have not received
instructions from the beneficial owner or other persons entitled to vote shares
on a particular matter with respect to which the brokers or nominees do not have
discretionary power) will be treated as shares that are present but which have

not been voted. Approval of Proposals 1 and 2 require the affirmative vote of a
plurality of shares voted. Because abstentions and broker non-votes are not
treated as shares voted, abstentions and broker non-votes would have no impact
on such Proposals. Any shareholder who has given a proxy has the right to revoke
it at any time prior to its exercise either by attending the Meeting and voting
his or her shares in person or by submitting a letter of revocation or a
later-dated proxy to the Fund at the above address prior to the date of the
Meeting.

In the event that a quorum is not present at a Meeting, or in the event
that a quorum is present but sufficient votes to approve any of the proposals
are not received, the persons named as proxies may propose one or more
adjournments of the Meeting to permit further solicitation of proxies. In
determining whether to adjourn the Meeting, the following factors may be
considered: the nature of the proposals that are the subject of the Meeting, the
percentage of votes actually cast, the percentage of negative votes actually
cast, the nature of any further solicitation and the information to be provided
to shareholders with respect to the reasons for the solicitation. Any
adjournment will require the affirmative vote of a majority of those shares
represented at the Meeting in person or by proxy. A shareholder vote may be
taken on any one of the proposals in this proxy statement prior to any
adjournment if sufficient votes have been received for approval. Under the
By-laws of the Fund, as applicable, a quorum is constituted by the presence in
person or by proxy of the holders of a majority of the outstanding shares
entitled to vote on the particular matter at the Meeting.

The Board has fixed the close of business on December 19, 1994 as the
record date (the "Record Date") for the determination of shareholders of the
Fund entitled to notice of and to vote at the Meeting. The Fund has one class of
common stock, which has a par value of $.01 per share. At the close of business
on the Record Date there were 19,642,696.209 shares of common stock outstanding
(the "Shares"). Each shareholder is entitled to one vote for each Share held and
a proportionate fraction of a vote for any fractional Share held.

As of the Record Date, to the knowledge of the Fund and its Board, no
single shareholder or "group" (as that term is used in Section 13(d) of the
Securities Exchange Act of 1934 (the "Exchange Act")), except as set forth
below, beneficially owned more than 5% of the outstanding Shares of the Fund. As
of the Record Date, Cede & Co., a nominee partnership of the Depository Trust
Company, held 16,641,192 Shares, or 85% of the Fund's Shares. Of the Shares held
by Cede & Co., Smith Barney Inc. ("Smith Barney") held 9,369,694 Shares, or 48%
of the Fund's Shares, for which it has discretionary and non-discretionary
authority. As of the Record Date, the officers and Board Members of the Fund as
a group beneficially owned less than 1% of the Shares of the Fund.

In order that a shareholder's Shares may be represented at the Meeting,
shareholders are required to allow sufficient time for their proxies to be
received on or before 9:00 a.m. on February 16, 1995.

The following table shows certain information about the executive officers
of the Fund, other than Heath B. McLendon, for whom comparable information is
provided in the discussion of Proposal 1 below. Each officer of the Fund serves
at the discretion of the Board.

AMOUNT (AND
PERCENTAGE) OF
OUTSTANDING
SHARES OF
COMMON STOCK
BENEFICIALLY PRINCIPAL OCCUPATION
OFFICE OWNED* AS OF DURING THE PAST FIVE
NAME (AGE) AND ADDRESS HELD THE RECORD DATE YEARS
- ---------------------- ------ --------------- --------------------

Stephen J. Treadway (46) President None Executive Vice
1345 Avenue of the Americas President and Director
New York, NY 10105 of Smith Barney;
Director and President
of Smith Barney Mutual
Funds Management Inc.
("SBMFM") and other
investment companies
associated with Smith
Barney; and Trustee of
Corporate Realty Income
Trust I

Lewis E. Daidone (37) Senior Vice None Managing Director and
1345 Avenue of the Americas President Chief Financial Officer
New York, NY 10105 and of Smith Barney;
Treasurer Director and Senior
Vice President of
SBMFM; prior to January
1990, Senior Vice
President and Chief
Financial Officer of
Cortland Financial
Group, Inc.

Christina T. Sydor (43) Secretary None Managing Director of
1345 Avenue of the Americas Smith Barney and
New York, NY 10105 General Counsel and
Secretary of SBMFM

Lawrence T. McDermott (45) Vice 431-(0.1%) Managing Director of
388 Greenwich Street President SBMFM; prior to July,
New York, New York 10013 and 1993, Managing Director
Investment of Shearson Lehman
Officer Advisors

Karen Mahoney-Malcomson (36) Vice None Senior Vice President
388 Greenwich Street President of SBMFM; prior to
New York, New York 10013 and July, 1993, Senior Vice
Investment President of Shearson
Officer Lehman Advisors; prior
to March, 1991, Vice
President of Shearson
Lehman Advisors

Michael J. Maher (34) Investment None Vice President of
388 Greenwich Street Officer SBMFM; prior to July,
New York, New York 10013 1993, Vice President of
Shearson Lehman
Advisors
<FN>
- ---------------

* For this purpose "beneficial ownership" is defined under Section 13(d) of the
Exchange Act. The information as to beneficial ownership is based solely upon
information furnished to the Fund by the officers.

PROPOSAL 1: TO ELECT TWO (2) DIRECTORS OF THE FUND

The first proposal to be considered at the Meeting is the election of two
(2) Directors of the Fund.

The Board of Directors of the Fund is divided into three classes with the
terms of office of one class expiring each year. At the forthcoming Meeting, it
is proposed that Robert A. Frankel and Heath B. McLendon be elected for a term
of three years (until the Annual Meeting in 1998) or until their respective
successors are duly elected and qualified. Messrs. Frankel and McLendon have
previously been elected by the shareholders and are currently serving as Class
II Directors.

Messrs. Frankel and McLendon have consented to serve as Directors if
elected at the Meeting. If a designated nominee declines or otherwise becomes
unavailable for election, however, the proxy confers discretionary power on the
persons named therein to vote in favor of a substitute nominee or nominees.

Section 16(a) of the Exchange Act requires the Fund's officers and
Directors, and persons who beneficially own more than ten percent of a
registered class of the Fund's equity securities, to file reports of ownership
with the Securities and Exchange Commission (the "SEC"), the New York Stock
Exchange, Inc. and the Fund. Based solely upon its review of the copies of such
forms received by it and written representations from such persons, the Fund
believes that, during fiscal year 1994, all filing requirements applicable to
such persons were complied with.

Each Director who is not an "interested person" (as that term is defined in
the Investment Company Act of 1940, as amended (the "1940 Act")) of the Fund (an
"Independent Board Member") receives a fee of $5,000 per annum plus $500 per
meeting attended, and reimbursement for travel and out-of-pocket expenses. The
aggregate remuneration paid to Directors by the Fund for the fiscal year ended
October 31, 1993 amounted to $43,790 (including reimbursement for travel and
out-of-pocket expenses). The Board of Directors held eight meetings during the
fiscal year ended October 31, 1994, four of which were regular meetings.

The Board has an Audit Committee consisting of all Independent Board
Members. The Audit Committee reviews the scope and results of the Fund's annual
audit with the Fund's independent accountants and recommends the engagement of
accountants. The Audit Committee met twice during the fiscal year ended October
31, 1994. Each incumbent Director attended at least 75% of the meetings of the
Board and committees of which he is a member that were held in the last fiscal
year.

Each of the nominees for Director of the Fund currently serves as a
Director of the Fund. Any Director may resign and any Director may be removed at
any meeting of shareholders called for that purpose by a vote of a majority of
the votes entitled to be cast for election of Directors. In case a vacancy shall
exist for any reason, the remaining Directors may fill the vacancy by appointing
another Director. If at any time less than a majority of the Directors holding
office have been elected by shareholders, the Directors then in office will call
a shareholder's meeting for the purpose of electing Directors.

Set forth in the following table are the existing Directors and nominees
for election to the Board of Directors of the Fund, together with certain other
information:

AMOUNT (AND
PERCENTAGE) OF
OUTSTANDING
SHARES OF PRINCIPAL
COMMON STOCK OCCUPATION
BENEFICIALLY AND OTHER
BOARD MEMBER OWNED** DIRECTORSHIPS***
OF FUND AS OF THE DURING THE
NAME (AGE) AND ADDRESS SINCE RECORD DATE PAST FIVE YEARS
- ---------------------- ------------ ----------- ---------------

DIRECTOR TO SERVE UNTIL
THE 1998 MEETING OF
SHAREHOLDERS:

Robert A. Frankel (67) 1994 None Consultant; formerly Corporate Vice
102 Grand Street President of the Readers Digest
Croton-on-Hudson, NY
10520

Heath B. McLendon* (60) 1988 8,823- Managing Director of Smith Barney;
Two World Trade Center (.05%) Chairman of the Board of Smith
New York, NY 10048 Barney Strategy Advisers Inc.;
prior to July 1993, Senior
Executive Vice President of
Shearson Lehman Brothers; Vice
Chairman of Shearson Asset
Management; Director of PanAgora
Asset Management, Inc. and PanAgora
Asset Management Limited,
investment advisory affiliates of
Shearson Lehman Brothers
NOMINEES TO SERVE UNTIL
THE 1997 MEETING OF
SHAREHOLDERS:

Martin Brody (71) 1988 None Vice Chairman of the Board of
Three ADP Boulevard Directors of Restaurant Associates
Roseland, NJ 07068 Corp.; Director of Jaclyn, Inc., an
apparel manufacturer

Allan J. Bloostein (63) 1992 None Consultant; formerly Vice Chairman
27 West 67th Street, of the Board of May Department
Apt. 5FW Stores Company; Director of Crystal
New York, NY 10023 Brands, Inc., Melville Corp., R.G.
Barry Corp. and Hechinger Co.
DIRECTORS TO SERVE UNTIL
THE 1996 MEETING OF
SHAREHOLDERS:

Dwight B. Crane (55) 1988 None Professor, Graduate School of
Harvard Business School Business Administration, Harvard
Soldiers Field Road University; Director of Peer Review
Boston, MA 02163 Analysis, Inc.

Charles Barber (75) 1989 1,427- Consultant; formerly Chairman of
66 Glenwood Drive (.01%) the Board, ASARCO Incorporated
Greenwich, CT 06830

AMOUNT (AND
PERCENTAGE) OF
OUTSTANDING
SHARES OF PRINCIPAL
COMMON STOCK OCCUPATION
BENEFICIALLY AND OTHER
BOARD MEMBER OWNED** DIRECTORSHIPS***
OF FUND AS OF THE DURING THE
NAME (AGE) AND ADDRESS SINCE RECORD DATE PAST FIVE YEARS
---------------------- ------------ -------------- ----------------

All directors and officers 10,681-
as a group (12 persons (.06%)
including the foregoing)
<FN>
- ---------------
* "Interested person" of the Fund, as defined in the 1940 Act, by virtue of
his position as an officer or director of the Adviser or one of its
affiliates.

** For this purpose "beneficial ownership" is defined under Section 13(d) of
the Exchange Act. The information as to beneficial ownership is based solely
upon information furnished to the Fund by the nominees/directors.

*** Directorships, general partnerships or trusteeships of companies that are
required to report to the SEC, other than open-end registered investment
companies.

REQUIRED VOTE

Election of the listed nominees for Director will require the affirmative
vote of a plurality of the votes cast at the Meeting in person or by proxy.

THE BOARD OF THE FUND, INCLUDING ALL THE INDEPENDENT BOARD MEMBERS,
RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" THE ELECTION OF NOMINEES TO
THE
BOARD.

PROPOSAL 2: TO RATIFY THE SELECTION OF KPMG PEAT MARWICK LLP AS THE
INDEPENDENT
ACCOUNTANTS FOR THE FUND FOR THE CURRENT FISCAL YEAR

The second proposal to be considered at the Meeting is the ratification of
the selection of KPMG Peat Marwick LLP as the independent public accountants for
the Fund.

KPMG Peat Marwick LLP, 345 Park Avenue, New York, New York 10154, has been
selected to serve as independent accountants for the Fund for the Fund's current
fiscal year by at least a majority of the Independent Board Members. KPMG Peat
Marwick LLP has informed the Fund that it has no direct or indirect financial
interest in the Fund, Smith Barney, or any of their affiliates.

Coopers & Lybrand L.L.P. served as the Fund's independent accountants for
the fiscal year ending October 31, 1994. On October 20, 1994, based upon the
recommendation of the Audit Committee of the Fund's Board of Directors, and in
accordance with Section 32 of the 1940 Act, and the rules thereunder, the Board
of Directors of the Fund determined to appoint KPMG Peat Marwick LLP as the
Fund's independent accountants for the fiscal year ending October 31, 1995.

During the Fund's two most recent fiscal years ending October 31, 1994,
Coopers & Lybrand's reports on the Fund's financial statements contained no

adverse opinion or disclaimer of opinion, nor were they qualified or modified as
to uncertainty, audit scope, or accounting principles. During the same period,
there were no disagreements with Coopers & Lybrand on any matter of accounting
principles or practices, financial statement disclosure, or auditing scope or
procedure, which disagreements, if not resolved to the satisfaction of Coopers &
Lybrand, would have caused it to make reference to the subject matter of the
disagreement in connection with its report. During this period, there have been
no "reportable events" as such term is described in Item 304(a)(1)(v) of
Regulation S-K with respect to Coopers & Lybrand.

During the Fund's two most recent years through October 31, 1994, the Fund
has not consulted with KPMG Peat Marwick LLP on items which (i) concerned the
application of accounting principles to a specified transaction, either
completed or proposed, or the type of audit opinion that might be rendered on
the Fund's financial statements or (ii) concerned the subject matter of a
disagreement or reportable event with Coopers & Lybrand.

The Fund has requested Coopers & Lybrand to furnish it with a letter
addressed to the Securities and Exchange Commission stating whether Coopers &
Lybrand agrees with the statements contained in the paragraphs above. A copy of
the letter from Coopers & Lybrand is on file with the Securities and Exchange
Commission. Representatives of both Coopers & Lybrand and KPMG Peat Marwick LLP
will be available via telephone for the Meeting to make a statement if they so
desire and will respond to appropriate questions.

REQUIRED VOTE

Ratification of the selection of KPMG Peat Marwick LLP as independent
accountants for the Fund requires the affirmative vote of the holders of a
plurality of the votes cast at the Meeting in person or by proxy.

THE BOARD OF THE FUND, INCLUDING ALL OF THE INDEPENDENT BOARD MEMBERS,
RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" RATIFICATION OF THE
SELECTION OF
KPMG PEAT MARWICK LLP.

ADDITIONAL INFORMATION

INVESTMENT ADVISER

Greenwich Street Advisors (the "Adviser"), located at 388 Greenwich Street,
New York, New York 10013, has served as the investment adviser to the Fund since
July 31, 1993 pursuant to an investment advisory agreement dated July 31, 1993
(the "Advisory Agreement"). The Adviser (through its predecessors) has been in
the investment counseling business since 1934 and is a division of SBMFM which
was incorporated in 1968. The Adviser renders investment advice to investment
companies that had assets under management

as of November 30, 1994 in excess of $46 billion. SBMFM is a wholly owned
subsidiary of Smith Barney Inc. ("Smith Barney") which in turn is a wholly owned
subsidiary of The Travelers Inc. ("Travelers"). The principal executive offices
of Smith Barney and Travelers are 388 Greenwich Street, New York, New York
10013, and 65 East 55th Street, New York, New York 10022, respectively.

Prior to July 31, 1993, Shearson Lehman Advisors, a member of the
investment management group of the SLB Asset Management Division of Shearson
Lehman Brothers Inc., served as investment adviser to the Fund. As of the close
of business on July 30, 1993, Travelers (which at the time was known as
Primerica Corporation) and Smith Barney, Harris Upham & Co. Incorporated
completed the acquisition of substantially all of the domestic retail brokerage
and asset management businesses of Shearson Lehman Brothers Inc. and Smith
Barney, Harris Upham & Co. Incorporated was renamed Smith Barney Shearson Inc.
On June 1, 1994, Smith Barney Shearson Inc. was renamed Smith Barney Inc. As of
the close of business on July 30, 1993, the Adviser succeeded Shearson Lehman
Advisors as the Fund's investment adviser. The new investment advisory agreement
with the Adviser contains terms and conditions substantially similar to the
investment advisory agreement with the predecessor investment adviser and
provides for payment of fees at the same rate as was paid to such predecessor
investment adviser.

As of the Record Date, the Directors and/or executive officers of the Fund
beneficially owned (or were deemed to beneficially own pursuant to the rules of
the SEC) less than 1% of the shares of common stock of Travelers. The name,
principal occupation and address of each director and principal executive
officer of the Adviser are set forth in Exhibit A hereto. An audited
Consolidated Statement of Financial Condition for Smith, Barney Advisers, Inc.
as of December 31, 1993 is set forth as Exhibit B hereto. Prior to November 7,
1994, SBMFM was known as Smith, Barney Advisers, Inc.

THE ADVISORY AGREEMENT

The Advisory Agreement was most recently approved by the Fund's Board of
Directors, including a majority of the Independent Board Members, on September
7, 1994, and by the Fund's shareholders on June 9, 1993. Under the terms of the
Agreement, the Adviser is required, subject to the supervision and approval of
the Board of the Fund, to manage the Fund's investments in accordance with the
investment objectives and policies as stated in the Fund's Prospectus. The
Adviser is responsible for making investment decisions, supplying investment
research and Fund management services and placing orders to purchase and sell
securities on behalf of the Fund.

In consideration of services rendered by the Adviser pursuant to the
Advisory Agreement, the Fund pays a monthly fee at the annual rate of .40% of
the Fund's average monthly net assets. Pursuant to the Advisory Agreement, the

Fund paid a total of $731,864 in advisory fees for the fiscal year ended October
31, 1994.

The Adviser bears all expenses in connection with the performance of its
services under the Advisory Agreement. Other expenses incurred in the operation
of the Fund are borne by the Fund, including taxes, interest, brokerage fees and
commissions, if any; fees of the Board Members who are not officers, directors,
shareholders or employees of the Adviser, the Fund's administrator and its
affiliates; SEC fees and state blue sky qualification fees; charges of custodian
and transfer and dividend disbursing agents; certain insurance premiums; outside
auditing and legal expenses; cost of investor services (including allocable
telephone and personnel expenses); costs of preparation and printing of
shareholders' reports; costs incurred in connection with meetings of the Board
and of the shareholders of the Fund; listing fees; and any extraordinary
expenses.

If in any fiscal year the aggregate expenses of the Fund (including fees
pursuant to the Advisory Agreement (and the administration agreement) but
excluding interest, taxes, brokerage and, if permitted by state securities
commissions, extraordinary expenses) exceed the expense limitation of any state
having jurisdiction over the Fund, the Adviser will reduce its advisory fees to
the Fund for the excess expense to the extent required by state law in the same
proportion as its advisory fee bears to the Fund's aggregate fees for investment
advice and administration. Proportionate reductions would also be made by the
Fund's administrator. This expense reimbursement, if any, will be estimated,
reconciled and paid on a monthly basis.

The Advisory Agreement provides that in the absence of willful misfeasance,
bad faith, gross negligence or reckless disregard of its obligations thereunder,
the Adviser shall not be liable for any act or omission in the course of, or in
connection with, the rendering of its services thereunder.

Pursuant to its terms, the Advisory Agreement will remain in effect for an
initial two-year term and will continue in effect for successive periods if and
so long as such continuance is specifically approved annually by (a) the Fund's
Board or (b) a Majority Vote of the Fund's shareholders, provided that in either
event, the continuance also is approved by a majority of the Independent Board
Members by vote cast in person at a meeting called for the purpose of voting on
approval. The Advisory Agreement is terminable, without penalty, on 60 days'
written notice by the Board of the Fund or by a Majority Vote of the Fund's
shareholders, or on 90 days' written notice by the Adviser. The Advisory
Agreement will terminate automatically in the event of its assignment (as
defined in the 1940 Act).

PORTFOLIO TRANSACTIONS

Decisions to buy and sell securities for the Fund are made by the Adviser,
subject to the overall review of the Fund's Board. Although investment decisions
for the Fund are made independently from those of the other accounts managed by
the Adviser, investments of the type the Fund may make also may be made by those
other accounts. When the Fund and one or more other accounts managed by the
Adviser are prepared to invest in, or desire to dispose of, the same security,
available investments or opportunities for sales will be allocated in a manner
believed by the Adviser to be equitable to each. In some cases, this procedure
may adversely affect the price paid or received by the Fund or the size of the
position obtained or disposed of by the Fund.

Transactions on U.S. stock exchanges and many foreign stock exchanges
involve the payment of negotiated brokerage commissions. On exchanges on which
commissions are negotiated, the cost of transactions may vary among different
brokers. No stated commission is generally applicable to securities traded in
U.S. over-the-counter markets, but the prices of those securities include
undisclosed commissions or mark-ups. The cost of securities purchased from
underwriters includes an underwriting commission or concession and the prices at
which securities are repurchased from and sold to dealers include a dealer's
mark-up or mark-down. U.S. government securities are generally purchased from
underwriters or dealers, although certain newly-issued U.S. government
securities may be purchased directly from the United States Treasury or from the
issuing agency or instrumentality.

In selecting brokers or dealers to execute Fund transactions on behalf of
the Fund, the Adviser seeks the best overall terms available. In assessing the
best overall terms available for any transaction, the Adviser will consider the
factors it deems relevant, including the breadth of the market in the security,
the price of the security, the financial condition and execution capability of
the broker or dealer and the reasonableness of the commission, if any, for the
specific transaction and on a continuing basis. In addition, the Adviser is
authorized, in selecting brokers or dealers to execute a particular transaction
and in evaluating the best overall terms available, to consider the brokerage
and research services (as those terms are defined in Section 28(e) of the
Exchange Act) provided to the Fund and/or other accounts over which the Adviser
or its affiliates exercise investment discretion. The fees under an Agreement
are not reduced by reason of the Fund's or the Adviser's receiving brokerage and
research services. Research and investment services are those which brokerage
houses customarily provide to institutional investors and include statistical
and economic data and research reports on particular issues and industries.
These services are used by the Adviser in connection with all of its investment
activities, and some of the services obtained in connection with the execution
of transactions for the Fund may be used in managing other investment accounts.
Conversely, brokers

furnishing these services may be selected for the execution of transactions for
these other accounts, whose aggregate assets may exceed those of the Fund, and
the services furnished by the brokers may be used by the Adviser in providing
investment management for the Fund. During the last fiscal year of the Fund,
neither the Fund nor its Adviser, pursuant to any agreement or understanding
with a broker or otherwise through an internal allocation procedure, directed
the Fund's brokerage transactions to a broker or brokers because of research
services provided. The Board of the Fund periodically will review the
commissions paid by the Fund to determine if the commissions paid over
representative periods of time were reasonable in relation to the benefits
inuring to the Fund. Over-the-counter purchases and sales by the Fund are
transacted directly with principal market makers except in those cases in which
better prices and executions may be obtained elsewhere.

To the extent consistent with applicable provisions of the 1940 Act and the
rules and exemptions adopted by the SEC under the 1940 Act, subject to the
approval of the Board of the Fund, transactions for the Fund may be executed
through Smith Barney and other affiliated broker-dealers if, in the judgment of
the Adviser, the use of an affiliated broker-dealer is likely to result in price
and execution at least as favorable as those of other qualified broker-dealers.

The Fund will not purchase any security, including U.S. government
securities, during the existence of any underwriting or selling group relating
to the security of which Smith Barney is a member, except to the extent
permitted by the SEC.

For the fiscal year ended October 31, 1994, the Fund did not incur any
brokerage commissions.

SUBMISSION OF SHAREHOLDER PROPOSALS

Shareholders wishing to submit proposals for inclusion in a proxy statement
for the 1996 annual meeting of shareholders must submit their proposals for
inclusion in the proxy materials relating to the next annual meeting in writing
to the Secretary of the Fund, c/o Smith Barney Inc., 388 Greenwich Street, New
York, New York 10013, no later than September 1, 1995.

SHAREHOLDERS' REQUEST FOR SPECIAL MEETING

Shareholders entitled to cast at least 25% of all votes entitled to be cast
at a meeting may require the calling of a meeting of shareholders for the
purpose of voting on the removal of any Board Member of the Fund. Meetings of
shareholders for any other purpose also shall be called by the Secretary of the
Fund when requested in writing by shareholders entitled to cast at least 25% of
all votes entitled to be cast at a meeting.

OTHER MATTERS TO COME BEFORE THE MEETING

The Fund does not intend to present any other business at the Meeting, nor
is it aware that any shareholder intends to do so. If, however, any other
matters are properly brought before the Meeting, the persons named in the
accompanying proxy card(s) will vote thereon in accordance with their judgment.

December 30, 1994

IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. SHAREHOLDERS WHO DO NOT
EXPECT TO ATTEND THE MEETING ARE THEREFORE URGED TO COMPLETE, SIGN, DATE
AND
RETURN THE PROXY AS SOON AS POSSIBLE IN THE ENCLOSED POSTAGE-PAID ENVELOPE.

EXHIBIT LIST

EXHIBIT A Name, Position with, Principal Occupation and Address of
each Director and Principal Executive Officer of the
Adviser.
EXHIBIT B Audited balance sheet of Smith, Barney Advisers, Inc.

EXHIBIT A

NAME, OCCUPATION AND ADDRESS OF
EXECUTIVE OFFICERS OF
GREENWICH STREET ADVISORS

The name, position with Greenwich Street Advisors and principal occupation
of each executive officer and director of Greenwich Street Advisors are set
forth in the following table. The business address of each such person is 388
Greenwich Street, New York, New York 10013.

POSITION WITH GREENWICH
NAME STREET ADVISORS PRINCIPAL OCCUPATION
- ---- ----------------------- --------------------

Thomas B. Stiles II Chairman and Chief Executive Vice President
Executive Officer of Smith Barney

John C. Bianchi Managing Director Same

Robert Brady Managing Director Same

Ellen S. Cammer Managing Director Same

Peter M. Coffey Managing Director Same

James Conroy Managing Director Same

Joseph P. Deane Managing Director Same

Kenneth Egan Managing Director Same

Jay Gerken Managing Director Same

Jack Levande Managing Director Same

Lawrence T. McDermott Managing Director Same

George Novello Managing Director Same

Ronald Perry Managing Director Same

Kevin Reed Managing Director Same

Patrick Sheehan Managing Director Same

Phyllis M. Zahorodny Managing Director Same

A-1

EXHIBIT B

INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholder of
Smith, Barney Advisers, Inc.:

We have audited the accompanying consolidated statement of financial
condition of Smith, Barney Advisers, Inc. (a wholly-owned subsidiary of Smith
Barney Shearson Holdings Inc.) and its subsidiaries as of December 31, 1993.
This consolidated statement of financial condition is the responsibility of the
Company's management. Our responsibility is to express an opinion on this
consolidated statement of financial condition based on our audit.

We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the consolidated statement of financial
condition is free of material misstatement. An audit of a consolidated statement
of financial condition includes examining, on a test basis, evidence supporting
the amounts and disclosures in the consolidated statement of financial
condition. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
consolidated statement of financial condition presentation. We believe that our
audit of the consolidated statement of financial condition provides a reasonable
basis for our opinion.

In our opinion, the consolidated statement of financial condition referred
to above presents fairly, in all material respects, the financial position of
Smith, Barney Advisers, Inc. and its subsidiaries as of December 31, 1993 in
conformity with generally accepted accounting principles.

KPMG Peat Marwick LLP

New York, New York
May 16, 1994

B-1

SMITH, BARNEY ADVISERS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF FINANCIAL CONDITION
DECEMBER 31, 1993

ASSETS

Cash...................................... $ 527,407
Furniture and fixtures, net of accumulated
depreciation and amortization of
$94,080................................. 24,547
Investment advisory contracts, net of
accumulated amortization of
$6,138,960.............................. 93,578,582
Investment in affiliated mutual fund, at
market value............................ 1,130,748
Receivable from affiliates................ 1,985,502
Other assets.............................. 3,434,058
------------
$100,680,844
============
LIABILITIES AND STOCKHOLDER'S EQUITY
Note Payable to Parent.................... $ 69,749,900
Payable to Parent......................... 9,409,231
Other liabilities......................... 622,246
------------
79,781,377
Stockholder's equity:
Common stock, $1 par value; 100 shares
authorized, issued and outstanding... $ 100
Additional paid-in capital.............. 16,791,389
Retained earnings....................... 4,107,978
-----------
$ 20,899,467
------------
$100,680,844
============

SMITH, BARNEY ADVISERS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED STATEMENT OF
FINANCIAL CONDITION
DECEMBER 31, 1993

(1) Organization -- Smith, Barney Advisers, Inc. ("SBA"), a wholly-owned
subsidiary of Smith Barney Shearson Holdings Inc. ("Parent") (formerly Smith
Barney Holdings, Inc.), is a registered investment adviser and acts pursuant
to management agreements as investment manager to forty-five investment
company portfolios. SBA provides each investment company with personnel,
investment advice, office space and administrative services at fees based on
the net assets of each fund. The consolidated statement of financial
condition includes the accounts of Smith Barney Shearson Strategy Advisers
Inc. ("SBSSA") (a wholly-owned subsidiary of SBA) and its

(Continued)

B-2

SMITH, BARNEY ADVISERS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED STATEMENT OF
FINANCIAL CONDITION (CONTINUED)
DECEMBER 31, 1993

wholly-owned subsidiary. Significant intercompany balances have been
eliminated in consolidation.

(2) Shearson Acquisition -- On July 31, 1993, Smith Barney, Harris Upham & Co.
Incorporated ("SBHU"), together with certain of its affiliates (including
SBA) and The Travelers Inc. (formerly Primerica Corporation), acquired the
domestic retail brokerage and asset management business ("Shearson") of
Shearson Lehman Brothers Holdings Inc. and its subsidiaries, a subsidiary of
American Express Company. Shearson was combined with the operations of SBHU
and its affiliates, and SBHU was renamed Smith Barney Shearson Inc. ("SBS").
The asset management business acquired by SBA included SBSSA (and its
wholly-owned subsidiary), as well as the contracts to manage fifteen of
Shearson's investment company management contracts.

(3) Related Party Transactions -- SBS provides SBA with executive and
administrative services (e.g., accounting, legal, personnel, facilities,
mail and other support services) and order processing support on a basis
mutually agreed upon. Receivable from affiliates are non-interest bearing.
In 1993, SBA transferred a deferred tax liability, resulting from the
adoption of Statement of Financial Accounting Standard No. 109. The
resulting Payable to Parent is pursuant to a tax sharing agreement, and is
non-interest bearing. Substantially all cash collected by SBA relating to
management fees is remitted to the Parent in the form of intercompany
dividends. Investment in affiliated mutual fund represents shares of an
investment company owned by SBSSA. Such investment is carried at market
value.

(4) Income Taxes -- Under an income tax allocation arrangement with the Parent
and The Travelers Inc., SBA's Federal, state and local income taxes are
provided on a separate return basis without regard to timing items, and are
subject to the utilization of tax attributes in The Travelers Inc.
consolidated income tax provision. Under the tax sharing agreement, SBA
remits taxes to the Parent.

(5) Investment Advisory Contracts -- Investment advisory contracts include
$68,296,775 of value ascribed to the acquired Shearson investment company
advisory contracts purchased by SBA (see note 2). The cost of these
contracts is being amortized over twenty years on a straight-line basis.

(Continued)

B-3

SMITH, BARNEY ADVISERS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED STATEMENT OF
FINANCIAL CONDITION (CONTINUED)
DECEMBER 31, 1993

In addition, the balance also includes the amortized cost assigned to
certain investment advisory contracts in connection with the acquisition of
the Parent by Commercial Credit Group, Inc. in December 1988. The combined
successor firm subsequently changed its name to Primerica Corporation (now
The Travelers Inc.). The cost of these contracts is being amortized over
thirty years on a straight-line basis.

(6) Notes Payable -- At December 31, 1993 note payable represents a demand note
payable to Parent at a rate of LIBOR plus .75%. The note was issued for the
financing of investment advisory contracts purchased by SBA on July 31, 1993
(see note 2).

(7) Commitments and Contingency -- SBSSA is required to own at least 1% of an
affiliated investment company's outstanding shares. At December 31, 1993
SBSSA's ownership interest meets this requirement.

B-4
VOTE THIS VOTING INSTRUCTION CARD TODAY!
YOUR PROMPT RESPONSE WILL SAVE
THE EXPENSE OF ADDITIONAL MAILINGS

(Please Detach at Perforation Before Mailing)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . .

Please indicate your vote by an "X" in the appropriate box below.
This proxy, if properly executed, will be voted in the manner directed by the
undersigned shareholder.
IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR ELECTION OF NOMINEES AS
DIRECTORS AND PROPOSAL 2.
Please refer to the Proxy Statement for a discussion of the Proposals.

1. ELECTION OF DIRECTORS FOR both nominees listed
WITHHOLD AUTHORITY
(except as marked to the
to vote for both nominees
Robert A. Frankel and contrary below)
Heath B. McLendon

(Instruction: To withhold authority for any nominee, write his name on the
line provided below.)

___________________________________________________________________________

2. To ratify the selection of KPMG Peat FOR AGAINST
ABSTAIN
Marwick LLP as independent accountants
for the Fund
PLEASE SIGN,
DATE AND RETURN
PROMPTLY IN
THE ENCLOSED ENVELOPE

Note: Please sign exactly as your name appears on this
Proxy. If joint owners, EITHER may sign this Proxy.
When signing as attorney, executor, administrator,
trustee, guardian or corporate officer, please give your
full title.

DATE: _________________________________________
_______________________________________________
_______________________________________________
Signature(s)
(Title(s), if applicable)

VOTE THIS VOTING INSTRUCTION CARD TODAY!
YOUR PROMPT RESPONSE WILL SAVE
THE EXPENSE OF ADDITIONAL MAILINGS

(Please Detach at Perforation Before Mailing)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . .

MUNICIPAL HIGH INCOME FUND INC. PROXY SOLICITED
BY THE BOARD OF DIRECTORS
The undersigned holder of shares of Municipal High Income Fund Inc. (the
"Fund"), a Maryland corporation, hereby appoints Heath B. McLendon,
Christina T. Sydor and Lee D. Augsburger attorneys and proxies for the
undersigned with full powers of substitution and revocation, to
represent the undersigned and to vote on behalf of the undersigned all
shares of the Fund that the undersigned is entitled to vote at the
Annual Meeting of Shareholders of Municipal High Income Fund Inc. to be
held at the offices of the Fund, 388 Greenwich Street, New York, New
York on February 16, 1995 at 9:00 a.m., and any adjournment or
adjournments thereof. The undersigned hereby acknowledges receipt of
the Notice of Meeting and Proxy Statement dated December 30, 1994 and
hereby instructs said attorneys and proxies to vote said shares as
indicated herein. In their discretion, the proxies are authorized to
vote upon such other business as may properly come before the Meeting.
A majority of the proxies present and acting at the Meeting in person or
by substitute (or, if only one shall be so present, then that one) shall
have and may exercise all of the power and authority of said proxies
hereunder. The undersigned hereby revokes any proxy previously given.