UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-CSRS

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number 811-3052
--------

Franklin Federal Money Fund
---------------------------
(Exact name of registrant as specified in charter)

One Franklin Parkway, San Mateo, CA 94403-1906
(Address of principal executive offices) (Zip code)

Murray L. Simpson, One Franklin Parkway, San Mateo, CA 94403-1906
-----------------------------------------------------------------
(Name and address of agent for service)

Registrant's telephone number, including area code: (650) 312-2000
--------------

Date of fiscal year end: 06/30
-----

Date of reporting period: 12/31/03
--------

Item 1. Reports to Stockholders.

DECEMBER 31, 2003

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SEMIANNUAL REPORT AND SHAREHOLDER LETTER

INCOME

FRANKLIN
FEDERAL MONEY FUND

[GRAPHIC OMITTED]

WANT TO RECEIVE THIS DOCUMNET FASTER VIA EMAIL?
Eligible shareholders can sign up for eDeliery at franklintempleton.com. See
inside for details.

[LOGO OMITTED]
FRANKLIN(R) TEMPLETON(R)
INVESTMENTS
FRANKLIN o Templeton o Mutual Series

Franklin Templeton Investments

GAIN FROM OUR PERSPECTIVE

Franklin Templeton's distinct multi-manager structure combines the specialized
expertise of three world-class investment management groups--Franklin, Templeton
and Mutual Series.

SPECIALIZED EXPERTISE

Each of our portfolio management groups operates autonomously, relying on its
own research and staying true to the unique investment disciplines that underlie
its success.

FRANKLIN. Founded in 1947, Franklin is a leader in tax-free investing and a
driving force in fixed income investing around the globe. They also bring
expertise in growth- and value-style U.S. equity investing.

TEMPLETON. Founded in 1940, Templeton pioneered international investing and, in
1954, launched what has become the industry's oldest global fund. Today, with
research offices in over 25 countries, they offer investors the broadest global
reach in the industry.

MUTUAL SERIES. Established in 1949, Mutual Series is dedicated to a unique style
of value investing, searching aggressively for opportunity among undervalued
stocks, arbitrage situations and distressed companies.

TRUE DIVERSIFICATION

Because our management groups work independently and adhere to distinctly
different investment approaches, Franklin, Templeton and Mutual Series funds
typically have a low overlap of securities. That's why our funds can be used to
build truly diversified portfolios covering every major asset class.

RELIABILITY YOU CAN TRUST

At Franklin Templeton Investments, we seek to consistently provide investors
with exceptional risk-adjusted returns over the long term, as well as the
reliable account services that have helped us become one of the most trusted
names in financial services.

MUTUAL FUNDS | RETIREMENT PLANS | 529 COLLEGE SAVINGS PLANS | SEPARATE ACCOUNTS

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Not part of the semiannual report

Contents
SHAREHOLDER LETTER ............................. 1

SEMIANNUAL REPORT

Franklin Federal Money Fund .................... 4

Performance Summary ............................ 5

Financial Highlights and
Statement of Investments ....................... 6

Financial Statements ........................... 8

Notes to Financial Statements .................. 11

Proxy Voting Policies and Procedures ........... 26

Regulatory Update

AS OF FEBRUARY 12, 2004

On February 4, 2004, the Securities Division of the Office of the Secretary of
the Commonwealth of Massachusetts filed an administrative complaint against
Franklin Resources, Inc. and certain of its subsidiaries (the "Company"),
alleging violations of the Massachusetts Uniform Securities Act. The complaint
arises from activity that occurred in 2001 during which time an officer of a
Company subsidiary was negotiating an agreement with an investor relating to
investments in a mutual fund and a hedge fund.

The Company, in addition to other entities within Franklin Templeton
Investments, including the Fund and other funds, has been named in shareholder
class actions related to the matter described above. The Company believes that
the claims made in the lawsuit are without merit and it intends to defend
vigorously against the allegations. It is anticipated that the Company may be
named in additional similar civil actions related to the matter described above.

In addition, as part of ongoing investigations by the U.S. Securities and
Exchange Commission (the "SEC"), the U.S. Attorney for the Northern District of
California, the New York Attorney General, the California Attorney General, the
U.S. Attorney for the District of Massachusetts, the Florida Department of
Financial Services, and the Commissioner of Securities and the Attorney General
of the State of West Virginia, relating to certain practices in the mutual fund
industry, including late trading, market timing and sales compensation
arrangements, the Company and its subsidiaries, as well as certain current or
former executives and employees of the Company, have received requests for
information and/or subpoenas to testify or produce documents. The Company and
its current employees are providing documents and information in response to
these requests and subpoenas. In addition, the Company has responded to requests
for similar kinds of information from regulatory authorities in some of the
foreign countries where the Company conducts its global asset management
business.

The Staff of the SEC has informed the Company that it intends to recommend that
the Commission authorize an action against the Fund's investment adviser and a
senior executive officer relating to the frequent trading issues that are the
subject of the SEC's investigation. These issues were previously disclosed as
being under investigation by government authorities and the subject of an
internal inquiry by the Company in its Annual Report on Form 10-K and on its
public website. The Company currently is in discussions with the SEC Staff in an
effort to resolve the issues raised in their investigation. Such discussions are
preliminary and the Company cannot predict the likelihood of whether those
discussions will result in a settlement and, if so, the terms of such
settlement. The impact, if any, of these matters on the Fund is uncertain at
this time. If it is found that the Company bears responsibility for any unlawful
or improper conduct, we have committed to making the funds or their shareholders
whole, as appropriate. Any further updates on these matters will be disclosed on
the Company's website at franklintempleton.com under "Statement on Current
Industry Issues."

Not part of the semiannual report | 3

Semiannual Report

Franklin Federal Money Fund

YOUR FUND'S GOAL AND PRIMARY INVESTMENTS: Franklin Federal Money Fund seeks to
provide as high a level of current income as is consistent with liquidity and
preservation of capital. The Fund invests all of its assets in the shares of The
U.S. Government Securities Money Market Portfolio (the Portfolio), which has the
same investment goal. At present, the Portfolio's policy is to limit investments
to U.S. Treasury bills, notes and bonds (including stripped securities), and to
repurchase agreements collateralized by such securities. The Fund attempts to
maintain a stable $1.00 share price. 1

This semiannual report for Franklin Federal Money Fund covers the period ended
December 31, 2003.

PERFORMANCE OVERVIEW

Relatively steady, low interest rates resulted in minimal changes for the Fund's
yields. In this environment, the Fund's seven-day effective yield fell from
0.21% on June 30, 2003, to 0.20% on December 31, 2003.

ECONOMIC AND MARKET OVERVIEW

During the six months ended December 31, 2003, many factors strongly impacted
the U.S. economy and markets. Uncertainty about economic recovery and
geopolitical events pushed U.S. interest rates to their lowest level in more
than four decades in June 2003. For consumers, historically low mortgage rates
enabled many homeowners to refinance their mortgages, and refinancing
applications reached their highest levels on record. The U.S. government
injected fiscal stimulus into the economy, approving another round of tax cuts
and rebates that included dividend and capital gains tax reductions. These tax
cuts, increased refinancing activity, rising home values and stabilizing equity
markets all improved consumers' net worths and allowed them to continue
spending, which helped to keep the economy moving forward.

Increases in business spending also helped economic growth. After having been
largely absent since the end of 2000, business spending improved in the latter
half

1. An investment in the Fund is not insured or guaranteed by the U.S. government
or any other entity or institution. Although the Fund seeks to preserve the
value of your investment at $1.00 per share, it is possible to lose money by
investing in the Fund.

THE DOLLAR VALUE, NUMBER OF SHARES OR PRINCIPAL AMOUNT, AND COMPLETE LEGAL
TITLES OF ALL PORTFOLIO HOLDINGS ARE LISTED IN THE FUND'S STATEMENT OF
INVESTMENTS (SOI). THE SOI BEGINS ON PAGE 7.

4 | Semiannual Report

of 2003. Nonresidential fixed investment increased 12.8% annualized in the third
quarter of 2003, the highest increase since the second quarter of 2000. Lower
interest rates during the past year allowed many businesses the opportunity to
refinance their old debt at more attractive levels. This helped enhance business
operating performance. Additionally, businesses continued to achieve
productivity gains by reducing their labor forces and taking advantage of recent
technology investments. Higher productivity levels helped dampen inflation. Core
inflation (excluding food and energy), as measured by the Consumer Price Index,
rose at a modest, seasonally adjusted, annualized rate of 0.6% for the six
months under review. Expectations for lower inflation contributed to the
historically lower overall interest rate environment during the period.

An area of concern, employment, made some gains during the period. The
unemployment rate began the period at 6.2% and declined to 5.7% by period-end.
With inflation expectations muted, the Federal Reserve Board maintained its
accommodative stance and kept the federal funds target rate at 1.00% through
period-end.

INVESTMENT STRATEGY

Consistent with our strategy, we invest, through the Portfolio, only in
marketable obligations issued or guaranteed by the U.S. government or with a
guarantee supported by the full faith and credit of the U.S. government,
repurchase agreements collateralized by these securities, and stripped
securities, which are separate income and principal components of a debt
security. 2 A repurchase agreement is an agreement to buy a security and then
sell it back after a short period of time (generally, less than seven days) at a
higher price. We maintain a dollar-weighted average portfolio maturity of 90
days or less. We seek to provide shareholders with a high-quality, conservative
investment vehicle; thus, we do not invest the Fund's cash in derivatives or
other relatively volatile securities that we believe involve undue risk. 1

MANAGER'S DISCUSSION

We continued to invest the Portfolio's assets only in U.S. Treasury obligations
and repurchase agreements backed by U.S. Treasury securities.

We appreciate your support, welcome new shareholders and look forward to serving
your investment needs in the years ahead.

THIS DISCUSSION REFLECTS OUR ANALYSIS, OPINIONS AND PORTFOLIO HOLDINGS AS OF
DECEMBER 31, 2003, THE END OF THE REPORTING PERIOD. THE WAY WE IMPLEMENT OUR
MAIN INVESTMENT STRATEGIES AND THE RESULTING PORTFOLIO HOLDINGS MAY CHANGE
DEPENDING ON FACTORS SUCH AS MARKET AND ECONOMIC CONDITIONS. THESE OPINIONS MAY
NOT BE RELIED UPON AS INVESTMENT ADVICE OR AN OFFER FOR A PARTICULAR SECURITY.
THE INFORMATION IS NOT A COMPLETE ANALYSIS OF EVERY ASPECT OF ANY MARKET,
COUNTRY, INDUSTRY, SECURITY OR THE FUND. STATEMENTS OF FACT ARE FROM SOURCES
CONSIDERED RELIABLE, BUT THE ADVISOR MAKES NO REPRESENTATION OR WARRANTY AS TO
THEIR COMPLETENESS OR ACCURACY. ALTHOUGH HISTORICAL PERFORMANCE IS NO GUARANTEE
OF FUTURE RESULTS, THESE INSIGHTS MAY HELP YOU UNDERSTAND OUR INVESTMENT
MANAGEMENT PHILOSOPHY.

2. Yield and share price are not guaranteed and will vary with market
conditions. U.S. government securities owned by the Portfolio or held under
repurchase agreement, but not shares of the Portfolio, are guaranteed by the
U.S. government, its agencies or instrumentalities.

[SIDEBAR]
PERFORMANCE SUMMARY
12/31/03

- -----------------------------------------------
Seven-day effective yield* 0.20%
- -----------------------------------------------
Seven-day annualized yield 0.20%
- -----------------------------------------------

*Seven-day effective yield assumes compounding of daily dividends.
Annualized and effective yields are for the seven-day period ended 12/31/03. The
Fund's average weighted maturity was 41 days. Yield reflects Fund expenses and
fluctuations in interest rates on portfolio investments.
Franklin Advisers, Inc., the Fund's administrator and the manager of the Fund's
underlying Portfolio, has agreed in advance to waive a portion of its fees. If
the manager had not taken this action, the Portfolio's annualized and effective
yields for the period would have been lower. The fee waiver may be discontinued
at any time upon notice to the Fund's Board of Trustees.
Past performance does not guarantee future results.

Semiannual Report | 5

Franklin Federal Money Fund

FINANCIAL HIGHLIGHTS

--------------------------------------------------------------------------
SIX MONTHS ENDED
DECEMBER 31, 2003 YEAR ENDED JUNE 30,
(UNAUDITED) 2003 2002 2001 2000 1999
--------------------------------------------------------------------------

PER SHARE OPERATING PERFORMANCE
(for a share outstanding throughout the period)
Net asset value, beginning of period ........... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
--------------------------------------------------------------------------
Income from net investment operations - net
investment income ............................. .001 .007 .018 .050 .048 .042
Less distributions from net investment income .. (.001) (.007) (.018) (.050) (.048) (.042)
--------------------------------------------------------------------------
Net asset value, end of period ................. $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
==========================================================================

Total return a ................................. 0.11% 0.70% 1.79% 5.08% 4.87% 4.32%

RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's) .............. $111,619 $125,130 $141,058 $132,916 $147,938 $144,387
Ratios to average net assets:
Expenses b .................................... .80% c .80% .77% .79% .76% .78%
Expenses excluding waiver and payments by
affiliate b .................................. .81% c .81% .78% .80% .77% .78%
Net investment income ......................... .22% c .70% 1.74% 5.01% 4.74% 4.23%

aTotal return is not annualized for periods less than one year.
bThe expense ratio includes the Fund's share of the Portfolio's allocated
expenses.
cAnnualized.

6 | See notes to financial statements. | Semiannual Report

Franklin Federal Money Fund

STATEMENT OF INVESTMENTS, DECEMBER 31, 2003 (UNAUDITED)

- --------------------------------------------------------------------------------------------------------------------------
SHARES VALUE
- --------------------------------------------------------------------------------------------------------------------------

MUTUAL FUNDS (COST $112,150,304) 100.5%
U.S. Government Securities Money Market Portfolio (Note 1) .............................. 112,150,304 $112,150,304
OTHER ASSETS, LESS LIABILITIES (.5)% .................................................... (531,184)
--------------
NET ASSETS 100.0% ....................................................................... $111,619,120
==============

Semiannual Report | See notes to financial statements. | 7

Franklin Federal Money Fund

FINANCIAL STATEMENTS

STATEMENT OF ASSETS AND LIABILITIES
December 31, 2003 (unaudited)

Assets:
Investments in securities, at value and cost .......... $112,150,304
Receivables from capital shares sold .................. 333,903
-------------
Total assets ..................................... 112,484,207
-------------
Liabilities:
Payables:
Capital shares redeemed .............................. 505,338
Affiliates ........................................... 69,115
Shareholders ......................................... 283,991
Other liabilities ..................................... 6,643
-------------
Total liabilities ................................ 865,087
-------------
Net assets, at value ................................... $111,619,120
=============
Shares outstanding ..................................... 111,619,120
=============
Net asset value per share a ............................ $1.00
=============

aRedemption price is equal to net asset value less any applicable contingent
deferred sales charge.

8 | See notes to financial statements. | Semiannual Report

Franklin Federal Money Fund

FINANCIAL STATEMENTS (CONTINUED)

STATEMENT OF OPERATIONS
for the six months ended December 31, 2003 (unaudited)

Investment income:
Dividends .......................................................... $544,550
---------
Expenses:
Administrative fees (Note 3) ....................................... 270,492
Transfer agent fees (Note 3) ....................................... 87,837
Reports to shareholders ............................................ 8,881
Registration and filing fees ....................................... 28,221
Professional fees .................................................. 6,410
Directors' fees and expenses ....................................... 3,277
Other .............................................................. 240
---------
Total expenses ................................................ 405,358
---------
Net investment income ........................................ 139,192
---------
Net increase (decrease) in net assets resulting from operations ..... $139,192
=========

Semiannual Report | See notes to financial statements. | 9

Franklin Federal Money Fund

FINANCIAL STATEMENTS (CONTINUED)

STATEMENTS OF CHANGES IN NET ASSETS for the six months ended December 31, 2003
(unaudited) and the year ended June 30, 2003

----------------------------------
SIX MONTHS ENDED YEAR ENDED
DECEMBER 31, 2003 JUNE 30, 2003
----------------------------------

Increase (decrease) in net assets:
Operations:
Net investment income ............................................ $ 139,192 $ 971,695
Distributions to shareholders from net investment income .......... (139,192) (971,695)
Capital share transactions (Note 2) ............................... (13,511,244) (15,927,674)
----------------------------------
Net increase (decrease) in net assets ........................ (13,511,244) (15,927,674)
Net assets (there is no undistributed net investment
income at beginning or end of period):
Beginning of period ............................................... 125,130,364 141,058,038
----------------------------------
End of period ..................................................... $111,619,120 $125,130,364
==================================

10 | See notes to financial statements. | Semiannual Report

Franklin Federal Money Fund

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

Franklin Federal Money Fund (the Fund) is registered under the Investment
Company Act of 1940 as a diversified, open-end investment company. The Fund
seeks high current income consistent with preservation of capital and liquidity.

The Fund invests substantially all of its assets in The U.S. Government
Securities Money Market Portfolio (the Portfolio), which is registered under the
Investment Company Act of 1940 as a diversified, open-end investment company
having the same investment objectives as the Fund. The financial statements of
the Portfolio, including the Statement of Investments, are included elsewhere in
this report and should be read in conjunction with the Fund's financial
statements.

The following summarizes the Fund's significant accounting policies.

A. SECURITY VALUATION

The Fund holds Portfolio shares that are valued at its proportionate interest in
the net asset value of the Portfolio. As of December 31, 2003, the Fund owns
60.66% of the Portfolio.

B. INCOME TAXES

No provision has been made for income taxes because the Fund's policy is to
qualify as a regulated investment company under the Internal Revenue Code and to
distribute substantially all of its taxable income.

C. SECURITY TRANSACTIONS, INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS

Security transactions are accounted for on trade date. Realized gains and losses
on security transactions are determined on a specific identification basis.
Income and estimated expenses are accrued daily. Dividends from net investment
income and capital gains or losses are normally declared daily and distributed
monthly.

D. ACCOUNTING ESTIMATES

The preparation of financial statements in accordance with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the amounts of income
and expense during the reporting period. Actual results could differ from those
estimates.

E. GUARANTEES AND INDEMNIFICATIONS

Under the Fund's organizational documents, its officers and directors are
indemnified against certain liability arising out of the performance of their
duties to the Funds. Additionally, in the normal course of business the Fund
enters into contracts with service providers that contain general
indemnification clauses. The Fund's maximum exposure under these arrangements is
unknown as this would involve future claims that may be made against the Fund
that have not yet occurred. However, based on experience, the Fund expects the
risk of loss to be remote.

Semiannual Report | 11

Franklin Federal Money Fund

NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

2. CAPITAL STOCK

At December 31, 2003, there were 5 billion shares authorized (no par value).
Transactions in the Fund's shares at $1.00 per share were as follows:

--------------------------------
SIX MONTHS YEAR
ENDED ENDED
DECEMBER 31, JUNE 30,
2003 2003
--------------------------------

Shares sold ........................................... $ 73,205,262 $ 186,971,407
Shares issued in reinvestment of distributions ........ 138,791 990,139
Shares redeemed ....................................... (86,855,297) (203,889,220)
--------------------------------
Net increase (decrease) ............................... $(13,511,244) $ (15,927,674)
================================

3. TRANSACTIONS WITH AFFILIATES

Certain officers and directors of the Fund are also officers and/or directors of
Franklin Advisers, Inc. (Advisers), Franklin/Templeton Distributors, Inc.
(Distributors), and Franklin/Templeton Investor Services, LLC (Investor
Services), the Fund's administrative manager, principal underwriter and transfer
agent, respectively, and of the Portfolio.

The Fund pays an administrative fee to Advisers based on the average daily net
assets of the Fund as follows:

- --------------------------------------------------------------------------------
ANNUALIZED FEE RATE NET ASSETS
- --------------------------------------------------------------------------------
.455% First $100 million
.330% Over $100 million, up to and including $250 million
.280% In excess of $250 million

Distributors received contingent deferred sales charges for the year of $4,488.

The Fund paid transfer agent fees of $87,837 of which $63,712 was paid to
Investor Services.

4. INCOME TAXES

At December 31, 2003, the cost of investments and undistributed ordinary income
for book and income tax purposes were the same.

12 | Semiannual Report

Franklin Federal Money Fund

NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

5. REGULATORY MATTERS

The Fund, in addition to other entities within Franklin Templeton Investments,
including the Company and other funds, has been named in shareholder class
actions related to the matter described above. The Fund's management believes
that the claims made in the lawsuit are without merit and it intends to defend
vigorously against the allegations. It is anticipated that the Fund may be named
in additional similar civil actions related to the matter described above.

The Staff of the SEC has informed the Company that it intends to recommend that
the Commission authorize an action against the Fund's investment adviser and a
senior executive officer relating to the frequent trading issues that are the
subject of the SEC's investigation. These issues were previously disclosed as
being under investigation by government authorities and the subject of an
internal inquiry by the Company in its Annual Report on Form 10-K and on its
public website. The Company currently is in discussions with the SEC Staff in an
effort to resolve the issues raised in their investigation. Such discussions are
preliminary and the Fund's management has been advised that the Company cannot
predict the likelihood of whether those discussions will result in a settlement
and, if so, the terms of such settlement. The impact, if any, of these matters
on the Fund is uncertain at this time. If the Company finds that it bears
responsibility for any unlawful or improper conduct, it has committed to making
the Fund or its shareholders whole, as appropriate.

Semiannual Report | 13

The Money Market Portfolios

FINANCIAL HIGHLIGHTS

THE MONEY MARKET PORTFOLIO

------------------------------------------------------------------------------------
SIX MONTHS ENDED
DECEMBER 31, 2003 YEAR ENDED JUNE 30,
(UNAUDITED) 2003 2002 2001 2000 1999
------------------------------------------------------------------------------------

PER SHARE OPERATING PERFORMANCE
(for a share outstanding throughout
the period)
Net asset value, beginning of
period .................................. $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
------------------------------------------------------------------------------------
Income from investment operations -
net investment income ................... .005 .014 .026 .059 .056 .051
Less distributions from net investment
income .................................. (.005) (.014) (.026) (.059) (.056) (.051)
------------------------------------------------------------------------------------
Net asset value, end of period ........... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
====================================================================================

Total return a ........................... .47% 1.41% 2.63% 6.08% 5.75% 5.18%

RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's) ........ $5,518,199 $5,331,200 $4,734,196 $4,490,919 $4,144,043 $3,672,404
Ratios to average net assets:
Expenses ................................ .15% b .15% .15% .15% .15% .15%
Expenses excluding waiver by
affiliate .............................. .15% b .15% .16% .16% .16% .15%
Net investment income ................... .94% b 1.39% 2.56% 5.91% 5.65% 5.04%

aTotal return is not annualized for periods less than one year.
bAnnualized.

14 | See notes to financial statements. | Semiannual Report

The Money Market Portfolios

STATEMENT OF INVESTMENTS, DECEMBER 31, 2003 (UNAUDITED)

- ----------------------------------------------------------------------------------------------------------------------------
THE MONEY MARKET PORTFOLIO PRINCIPAL AMOUNT VALUE
- ----------------------------------------------------------------------------------------------------------------------------

CERTIFICATES OF DEPOSIT 39.9%
Australia & New Zealand Banking Group, New York Branch, 1.08% - 1.085%,
1/21/04 - 3/04/04 ................................................................. $ 50,000,000 $ 50,000,357
Bank of Montreal, Chicago Branch, 1.08% - 1.133%,
2/18/04 - 4/30/04 ................................................................. 150,000,000 150,001,490
Bank of Nova Scotia, Portland Branch, 1.08%, 1/21/04 - 2/20/04 ..................... 150,000,000 150,000,000
Banque Nationale De Paris, New York Branch, 1.08% - 1.35%,
1/14/04 - 4/13/04 ................................................................. 150,000,000 150,000,560
Barclays Bank PLC, New York Branch, 1.09% - 1.10%, 3/05/04 -
4/09/04 ........................................................................... 100,000,000 100,002,498
Bayerische Landesbank Girozen, New York Branch, 1.06% - 2.10%,
3/12/04 - 4/26/04 ................................................................. 160,000,000 160,120,682
Credit Agricole, New York Branch, 1.06% - 1.43%, 1/05/04 -
10/22/04 .......................................................................... 155,000,000 155,002,135
Dexia Bank, New York Branch, 1.508%, 12/07/04 ...................................... 50,000,000 50,003,495
Landesbank Hessen Thueringen Giro., New York Branch, 1.11%,
3/03/04 ........................................................................... 75,000,000 75,002,576
Lloyds Bank PLC, New York Branch, 1.06% - 1.07%, 2/17/04 - 2/19/04 ................. 150,000,000 150,000,000
Rabobank Nederland NV, New York Branch, 1.06%, 4/05/04 - 4/22/04 ................... 150,000,000 149,998,837
Royal Bank of Canada, New York Branch, 1.06% - 1.42%,
4/27/04 - 10/22/04 ................................................................ 125,000,000 125,005,272
Royal Bank of Scotland NY, New York Branch, 1.08%, 1/08/04 -
1/27/04 ........................................................................... 138,958,000 138,957,995
Svenska Handelsbanken, New York Branch, 1.08% - 1.09%,
1/13/04 - 2/23/04 ................................................................. 100,000,000 100,000,433
Toronto Dominion Bank, New York Branch, 1.075% - 1.085%,
1/16/04 - 2/04/04 ................................................................. 150,000,000 150,000,457
UBS AG, Stamford, CT Branch, 1.075% - 1.305%, 4/14/04 - 4/22/04 .................... 150,000,000 150,001,133
Wells Fargo Bank, San Francisco Branch, 1.05% - 1.07%,
1/07/04 - 2/25/04 ................................................................. 150,000,000 150,000,000
Westdeutsche Landesbank, New York Branch, 1.09% - 1.25%,
4/07/04 - 4/14/04 ................................................................. 50,000,000 50,007,495
----------------
TOTAL CERTIFICATES OF DEPOSIT (COST $2,204,105,415) ................................ 2,204,105,415
----------------
COMMERCIAL PAPER 45.5%
a Abbott Laboratories, 1.04%, 3/08/04 ................................................ 25,000,000 24,951,611
a American International Group I, 1.07% - 1.085%, 2/20/04 - 2/26/04 .................. 100,000,000 99,841,431
a ANZ (Delaware) Inc., 1.07% - 1.075%, 1/12/04 - 2/26/04 ............................. 108,400,000 108,319,627
a Citigroup Global Markets Holdings, 1.06% - 1.08%,
1/05/04 - 1/15/04 ................................................................. 150,000,000 149,968,035
a Commonwealth Bank of Australia, 1.05% - 1.08%, 2/17/04 - 4/02/04 ................... 150,000,000 149,652,083
a Den Danske Corp. Inc., 1.065% - 1.08%, 1/14/04 - 3/18/04 ........................... 150,000,000 149,743,642
a Dexia Bank, 1.07% - 1.08%, 3/09/04 - 3/17/04 ....................................... 100,000,000 99,790,528
a Dupont De Nemours Inc., 1.05% - 1.07%, 2/10/04 - 2/23/04 ........................... 83,538,000 83,416,619
a General Electric Capital Corp., 1.08% - 1.19%, 3/23/04 - 6/03/04 ................... 150,000,000 149,369,597
a Goldman Sachs Group Inc, 1.07%, 1/09/04 - 1/16/04 .................................. 150,000,000 149,945,756
a HBOS Treasury Services, 1.07% - 1.10%, 2/24/04 - 3/29/04 ........................... 146,600,000 146,256,749
a Internationale Ned. U.S. Funding Corp., 1.08% - 1.10%,
2/03/04 - 5/12/04 ................................................................. 145,000,000 144,740,080
a Merrill Lynch & Co Inc., 1.04%, 1/28/04 - 1/30/04 .................................. 150,000,000 149,878,667
a Nestle Capital Corp., 1.05%, 2/24/04 ............................................... 50,000,000 49,921,250
a Pfizer Inc., 1.05%, 1/06/04 - 1/07/04 .............................................. 72,000,000 71,988,462
a Procter & Gamble Co., 1.05%, 2/09/04 ............................................... 50,000,000 49,943,125
a Province of British Columbia, 1.11%, 4/19/04 ....................................... 12,000,000 11,959,670
a Shell Finance (UK) PLC, 1.06% - 1.07%, 2/09/04 - 3/09/04 ........................... 136,300,000 136,060,161
a Societe Generale NA Inc., 1.075%, 3/15/04 - 3/17/04 ................................ 150,000,000 149,664,063
a Svenska Handelsbanken Inc., 1.07%, 2/11/04 ......................................... 50,000,000 49,939,069
a Toyota Motor Credit Corp., 1.05%, 1/23/04 - 3/11/04 ................................ 134,600,000 134,464,219
a Westdeutsche Landesbank, 1.065% - 1.08%, 1/09/04 - 3/11/04 ......................... 100,000,000 99,929,750
a Westpac Capital Corp., 1.07% - 1.115%, 2/10/04 - 4/20/04 ........................... 150,000,000 149,599,862
----------------
TOTAL COMMERCIAL PAPER (COST $2,509,344,056) ....................................... 2,509,344,056
----------------

Semiannual Report | 15

The Money Market Portfolios

STATEMENT OF INVESTMENTS, DECEMBER 31, 2003 (UNAUDITED) (CONTINUED)

U.S. GOVERNMENT AGENCY SECURITIES (COST $54,253,547) 1.0%
FHLB, 1.07%, 12/23/04 .............................................................. $ 54,280,000 $ 54,253,547
----------------
TOTAL INVESTMENTS BEFORE REPURCHASE AGREEMENTS
(COST $4,767,703,018) .............................................................. 4,767,703,018
----------------
REPURCHASE AGREEMENTS 17.1%
b ABN AMRO Bank, NV, New York Branch, .90%, 1/02/04,
(Maturity Value $365,018,250) ...................................................... 365,000,000 365,000,000
Collateralized by U.S. Government Agency Securities
b Deutsche Bank Securities Inc., .80%, 1/02/04 (Maturity Value
$107,954,798) ...................................................................... 107,950,000 107,950,000
Collateralized by U.S. Treasury Notes
b Morgan Stanley & Co. Inc., .81%, 1/02/04 (Maturity Value
$107,959,858) ...................................................................... 107,955,000 107,955,000
Collateralized by U.S. Treasury Notes
b UBS Securities LLC, .85%, 1/02/04 (Maturity Value $365,017,236) .................... 365,000,000 365,000,000
Collateralized by U.S. Government Agency Securities
----------------
TOTAL REPURCHASE AGREEMENTS (COST $945,905,000) .................................... 945,905,000
----------------
TOTAL INVESTMENTS (COST $5,713,608,018) 103.5% ..................................... 5,713,608,018
OTHER ASSETS, LESS LIABILITIES (3.5)% .............................................. (195,409,004)
----------------
NET ASSETS 100.0% .................................................................. $5,518,199,014
================

aSecurities are traded on a discount basis; the rates shown are the discount
rates at the time of purchase by the portfolio.
bSee Note 1(b) regarding repurchase agreements.

16 | See notes to financial statements. | Semiannual Report

The Money Market Portfolios

FINANCIAL HIGHLIGHTS

THE U.S. GOVERNMENT SECURITIES MONEY MARKET PORTFOLIO

---------------------------------------------------------------------------
SIX MONTHS ENDED
DECEMBER 31, 2003 YEAR ENDED JUNE 30,
(UNAUDITED) 2003 2002 2001 2000 1999
---------------------------------------------------------------------------

PER SHARE OPERATING PERFORMANCE
(for a share outstanding throughout the period)
Net asset value, beginning of period .............. $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
---------------------------------------------------------------------------
Income from investment operations - net
investment income ................................ .004 .013 .024 .056 .054 .049
Less distributions from net investment income ..... (.004) (.013) (.024) (.056) (.054) (.049)
---------------------------------------------------------------------------
Net asset value, end of period .................... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
===========================================================================

Total return a .................................... .44% 1.34% 2.43% 5.75% 5.48% 4.97%

RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's) ................. $184,898 $201,758 $226,676 $186,718 $221,993 $258,458
Ratios to average net assets:
Expenses ......................................... .15% b .15% .15% .15% .15% .15%
Expenses excluding waiver by affiliate ........... .16% b .16% .16% .16% .16% .15%
Net investment income ............................ .87% b 1.34% 2.33% 5.63% 5.36% 4.84%

aTotal return is not annualized for periods less than one year.
bAnnualized.

Semiannual Report | See notes to financial statements. | 17

The Money Market Portfolios

STATEMENT OF INVESTMENTS, DECEMBER 31, 2003 (UNAUDITED)

- ---------------------------------------------------------------------------------------------------------------------------
THE U.S. GOVERNMENT SECURITIES MONEY MARKET PORTFOLIO PRINCIPAL AMOUNT VALUE
- ---------------------------------------------------------------------------------------------------------------------------

GOVERNMENT SECURITIES 29.3%
U.S. Treasury Bill, 1/15/04 ........................................................... $ 5,000,000 $ 4,998,182
U.S. Treasury Bill, 4/22/04 ........................................................... 5,000,000 4,984,211
U.S. Treasury Bill, 5/06/04 ........................................................... 5,000,000 4,982,325
U.S. Treasury Bill, 5/13/04 ........................................................... 5,000,000 4,980,604
U.S. Treasury Bill, 5/27/04 ........................................................... 5,000,000 4,979,134
U.S. Treasury Note, 3.625%, 3/31/04 ................................................... 10,000,000 10,063,689
U.S. Treasury Note, 3.375%, 4/30/04 ................................................... 3,000,000 3,020,585
U.S. Treasury Note, 2.875%, 6/30/04 ................................................... 11,000,000 11,094,281
U.S. Treasury Note, 1.875%, 9/30/04 ................................................... 5,000,000 5,023,801
--------------
TOTAL GOVERNMENT SECURITIES (COST $54,126,812) ........................................ 54,126,812
--------------
REPURCHASE AGREEMENTS 70.6%
a ABN AMRO Bank, N.V., New York Branch, .85%, 1/02/04
(Maturity Value $8,000,378) .......................................................... 8,000,000 8,000,000
Collateralized by U.S. Treasury Bonds
a Banc of America Securities LLC, .77%, 1/02/04 (Maturity
Value $8,000,342) .................................................................... 8,000,000 8,000,000
Collateralized by U.S. Treasury Bonds
a Barclays Capital Inc., .83%, 1/02/04 (Maturity Value $8,000,369) ...................... 8,000,000 8,000,000
Collateralized by U.S. Treasury Notes
a Bear, Stearns & Co. Inc., .80%, 1/02/04 (Maturity Value $8,000,356) ................... 8,000,000 8,000,000
Collateralized by U.S. Treasury Notes
a Deutsche Bank Securities Inc., .80%, 1/02/04 (Maturity
Value $33,331,481) ................................................................... 33,330,000 33,330,000
Collateralized by U.S. Treasury Notes
a Dresdner Kleinwort Wasserstein Securities LLC, .83%, 1/02/04
(Maturity Value $8,000,369) .......................................................... 8,000,000 8,000,000
Collateralized by U.S. Treasury Bonds
a Goldman, Sachs, & Co., .80%, 1/02/04 (Maturity Value $8,000,356) ...................... 8,000,000 8,000,000
Collateralized by U.S. Treasury Notes
a Greenwich Capital Markets Inc., .83%, 1/02/04 (Maturity
Value $8,000,369) .................................................................... 8,000,000 8,000,000
Collateralized by U.S. Treasury Notes
a Morgan Stanley & Co. Inc., .81%, 1/02/04 (Maturity
Value $33,336,500) ................................................................... 33,335,000 33,335,000
Collateralized by U.S. Treasury Notes
a UBS Securities LLC, .83%, 1/02/04 (Maturity Value $8,000,369) ......................... 8,000,000 8,000,000
Collateralized by U.S. Treasury Notes
--------------
TOTAL REPURCHASE AGREEMENTS (COST $130,665,000) ....................................... 130,665,000
--------------
TOTAL INVESTMENTS (COST $184,791,812) 99.9% ........................................... 184,791,812
OTHER ASSETS, LESS LIABILITIES .1% .................................................... 106,245
--------------
NET ASSETS 100.0% ..................................................................... $184,898,057
==============

aSee Note 1(b) regarding repurchase agreements.

18 | See notes to financial statements. | Semiannual Report

The Money Market Portfolios

FINANCIAL STATEMENTS

STATEMENTS OF ASSETS AND LIABILITIES
December 31, 2003 (unaudited)

------------------------------
THE U.S.
GOVERNMENT
THE SECURITIES
MONEY MARKET MONEY MARKET
PORTFOLIO PORTFOLIO
------------------------------
Assets:

Investments in securities, at value and cost ...... $4,767,703,018 $ 54,126,812
Repurchase agreements, at value and cost .......... 945,905,000 130,665,000
Cash .............................................. 7,568 1,953
Interest receivable ............................... 4,959,814 136,991
------------------------------
Total assets ................................. 5,718,575,400 184,930,756
------------------------------
Liabilities:
Payables:
Investment securities purchased .................. 199,737,643 --
Affiliates ....................................... 604,940 20,339
Professional fees ................................ 28,952 12,194
Other liabilities ................................. 4,851 166
------------------------------
Total liabilities ............................ 200,376,386 32,699
------------------------------
Net assets, at value ............................... $5,518,199,014 $184,898,057
==============================
Shares outstanding ................................. 5,518,199,014 184,898,057
==============================
Net asset value per share .......................... $1.00 $1.00
==============================

Semiannual Report | See notes to financial statements. | 19

The Money Market Portfolios

FINANCIAL STATEMENTS (CONTINUED)

STATEMENTS OF OPERATIONS
for the six months ended December 31, 2003 (unaudited)

-----------------------------
THE U.S.
GOVERNMENT
THE SECURITIES
MONEY MARKET MONEY MARKET
PORTFOLIO PORTFOLIO
-----------------------------
Investment income:

Interest ................................................................. $28,081,749 $1,001,989
-----------------------------
Expenses:
Management fees (Note 3) ................................................. 3,870,224 146,362
Custodian fees ........................................................... 26,180 1,114
Professional fees ........................................................ 25,843 10,414
Other .................................................................... 56,137 1,517
-----------------------------
Total expenses ...................................................... 3,978,384 159,407
Expenses waived by affiliate (Note 3) ............................... (108,026) (10,891)
-----------------------------
Net expenses ....................................................... 3,870,358 148,516
-----------------------------
Net investment income ............................................. 24,211,391 853,473
-----------------------------
Net realized gain (loss) from investments ................................. -- 5,742
-----------------------------
Net increase (decrease) in net assets resulting from operations ........... $24,211,391 $ 859,215
=============================

20 | See notes to financial statements. | Semiannual Report

The Money Market Portfolios

FINANCIAL STATEMENTS (CONTINUED)

STATEMENTS OF CHANGES IN NET ASSETS for the six months ended December 31, 2003
(unaudited) and the year ended June 30, 2003

---------------------------------------------------------------------
THE U.S. GOVERNMENT SECURITIES
THE MONEY MARKET PORTFOLIO MONEY MARKET PORTFOLIO
---------------------------------------------------------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
DECEMBER 31, 2003 JUNE 30, 2003 DECEMBER 31, 2003 JUNE 30, 2003
---------------------------------------------------------------------

Increase (decrease) in net assets:
Operations:
Net investment income ................... $ 24,211,391 $ 73,176,506 $ 853,473 $ 2,883,855
Net realized gain (loss)
from investments ....................... -- 19,063 5,742 --
---------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations .......... 24,211,391 73,195,569 859,215 2,883,855
Distributions to shareholders from net
investment income ........................ (24,211,391) (73,195,569) a (859,215) b (2,883,855)
Capital share transactions
(Note 2) ................................ 186,999,301 597,003,871 (16,859,972) (24,918,467)
---------------------------------------------------------------------
Net increase (decrease) in
net assets ......................... 186,999,301 597,003,871 (16,859,972) (24,918,467)
Net assets (there is no undistributed net
investment income at beginning or end
of period):
Beginning of period ..................... 5,331,199,713 4,734,195,842 201,758,029 226,676,496
---------------------------------------------------------------------
End of period ........................... $5,518,199,014 $5,331,199,713 $184,898,057 $201,758,029
=====================================================================

aDistributions were increased by a net realized gain from investments of
$19,063.
bDistributions were increased by a net realized gain from investmentsof $5,742.

Semiannual Report | See notes to financial statements. | 21

The Money Market Portfolios

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

The Money Market Portfolios (the Trust) is registered under the Investment
Company Act of 1940 as a diversified, open-end investment company, consisting of
two separate portfolios (the Portfolios). The shares of the Trust are issued in
private placements and are exempt from registration under the Securities Act of
1933. The Portfolios seek to provide high current income consistent with
preservation of capital and liquidity.

The following summarizes the Portfolios' significant accounting policies.

A. SECURITY VALUATION

Securities are valued at amortized cost which approximates value.

B. REPURCHASE AGREEMENTS

The Portfolios may enter into repurchase agreements, which are accounted for as
a loan by the Portfolios to the seller, collateralized by securities which are
delivered to the Portfolios' custodian. The market value, including accrued
interest, of the initial collateralization is required to be at least 102% of
the dollar amount invested by the Portfolios, with the value of the underlying
securities marked to market daily to maintain coverage of at least 100%. At
December 31, 2003, all outstanding repurchase agreements held by the Portfolios
had been entered into on that date.

C. INCOME TAXES

No provision has been made for income taxes because each portfolio's policy is
to qualify as a regulated investment company under the Internal Revenue Code and
to distribute substantially all of its taxable income.

D. SECURITY TRANSACTIONS, INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS

Security transactions are accounted for on trade date. Realized gains and losses
on security transactions are determined on a specific identification basis.
Interest income and estimated expenses are accrued daily. Discounts and premiums
on securities purchased are amortized over the lives of the respective
securities. Dividends from net investment income and capital gains or losses are
normally declared daily. Such distributions are reinvested in additional shares
of the Portfolios.

Common expenses incurred by the Trust are allocated among the Portfolios based
on the ratio of net assets of each portfolio to the combined net assets. Other
expenses are charged to each portfolio on a specific identification basis.

E. ACCOUNTING ESTIMATES

22 | Semiannual Report

The Money Market Portfolios

NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

F. GUARANTEES AND INDEMNIFICATIONS

Under the Trust's organizational documents, its officers and trustees are
indemnified against certain liability arising out of the performance of their
duties to the Trust. Additionally, in the normal course of business, the Trust
enters into contracts with service providers that contain general
indemnification clauses. The Trust's maximum exposure under these arrangements
is unknown as this would involve future claims that may be made against the
Trust that have not yet occurred. However, based on experience, the Trust
expects the risk of loss to be remote.

2. SHARES OF BENEFICIAL INTEREST

At December 31, 2003, there were an unlimited number of shares authorized ($.01
par value). Transactions in the Portfolios' shares at $1.00 per share were as
follows:

-------------------------------------
THE U.S.
GOVERNMENT
THE SECURITIES
MONEY MARKET MONEY MARKET
PORTFOLIO PORTFOLIO
-------------------------------------

Six months ended December 31, 2003
Shares sold ...................................................... $ 2,857,333,193 $ 80,579,932
Shares issued in reinvestment of distributions ................... 24,213,385 858,973
Shares redeemed .................................................. (2,694,547,277) (98,298,877)
-------------------------------------
Net increase (decrease) .......................................... $ 186,999,301 $ (16,859,972)
=====================================
Year ended June 30, 2003
Shares sold ...................................................... $ 6,279,565,500 $ 309,427,987
Shares issued in reinvestment of distributions ................... 73,193,516 2,884,175
Shares redeemed .................................................. (5,755,755,145) (337,230,629)
-------------------------------------
Net increase (decrease) .......................................... $ 597,003,871 $ (24,918,467)
=====================================

Semiannual Report | 23

The Money Market Portfolios

NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

3. TRANSACTIONS WITH AFFILIATES

Certain officers and trustees of the Trust are also officers and/or directors of
Franklin Advisers Inc. (Advisers) and Franklin/Templeton Investor Services LLC
(Investor Services), the Portfolios' investment manager and transfer agent,
respectively, and of the Franklin Money Fund, the Institutional Fiduciary Trust,
the Franklin Templeton Money Fund Trust, and the Franklin Federal Money Fund.

The Portfolios pay an investment management fee to Advisers of .15% per year of
the average daily net assets of each portfolio. Advisers agreed in advance to
waive management fees as noted in the Statements of Operations.

At December 31, 2003, the shares of The Money Market Portfolio were owned by the
following funds:

------------------------------------
PERCENTAGE OF
SHARES OUTSTANDING SHARES
------------------------------------

Institutional Fiduciary Trust - Money Market Portfolio .............................. 3,464,130,196 62.78%
Franklin Money Fund ................................................................. 1,720,139,543 31.17%
Institutional Fiduciary Trust - Franklin Cash Reserves Fund ......................... 213,907,784 3.88%
Franklin Templeton Money Fund Trust - Franklin Templeton
Money Fund ......................................................................... 120,021,491 2.17%

At December 31, 2003, the shares of The U.S. Government Securities Money Market
Portfolio were owned by the following funds:

------------------------------------
PERCENTAGE OF
SHARES OUTSTANDING SHARES
------------------------------------

Franklin Federal Money Fund ......................................................... 112,150,304 60.66%
Institutional Fiduciary Trust - Franklin U.S. Government Securities
Money Market Portfolio ............................................................. 72,747,753 39.34%

4. INCOME TAXES

At December 31, 2003, the cost of investments for book and income tax purposes
were the same.

24 | Semiannual Report

The Money Market Portfolios

NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

5. REGULATORY MATTERS

The Company, in addition to other entities within Franklin Templeton
Investments, has been named in shareholder class actions related to the matter
described above. The Company believes that the claims made in the lawsuit are
without merit and it intends to defend vigorously against the allegations. The
Company and the funds may be named in similar civil actions related to the
matter described above.

The Staff of the SEC has informed the Company that it intends to recommend that
the Commission authorize an action against the funds' investment adviser and a
senior executive officer relating to the frequent trading issues that are the
subject of the SEC's investigation. These issues were previously disclosed as
being under investigation by government authorities and the subject of an
internal inquiry by the Company in its Annual Report on Form 10-K and on its
public website. The Company currently is in discussions with the SEC Staff in an
effort to resolve the issues raised in their investigation. Such discussions are
preliminary and the funds' management has been advised that the Company cannot
predict the likelihood of whether those discussions will result in a settlement
and, if so, the terms of such settlement. The impact, if any, of these matters
on the funds is uncertain at this time. If the Company finds that it bears
responsibility for any unlawful or improper conduct, it has committed to making
the funds or their shareholders whole, as appropriate.

Semiannual Report | 25

Franklin Federal Money Fund

PROXY VOTING POLICIES AND PROCEDURES

The Fund has established Proxy Voting Policies and Procedures ("Policies") that
the Fund uses to determine how to vote proxies relating to portfolio securities.
Shareholders may view the Fund's complete Policies online at
franklintempleton.com. Alternatively, shareholders may request copies of the
Policies free of charge by calling the Proxy Group collect at 1-954/847-2268 or
by sending a written request to: Franklin Templeton Companies, LLC, 500 East
Broward Boulevard, Suite 1500, Fort Lauderdale, FL 33394, Attention: Proxy
Group.

26 | Semiannual Report

This page intentionally left blank.

Literature Request

For a brochure and prospectus, which contains more complete information,
including charges and expenses, call Franklin Templeton Investments at
1-800/DIAL BEN(R) (1-800/342-5236). Please read the prospectus carefully before
investing or sending money. To ensure the highest quality of service, we may
monitor, record and access telephone calls to or from our service departments.
These calls can be identified by the presence of a regular beeping tone.

FRANKLIN TEMPLETON INVESTMENTS

INTERNATIONAL
Mutual European Fund
Templeton China World Fund
Templeton Developing Markets Trust
Templeton Foreign Fund
Templeton Foreign Smaller Companies Fund
Templeton International (Ex EM) Fund

GLOBAL
Franklin Global Aggressive Growth Fund
Franklin Global Growth Fund
Mutual Discovery Fund
Templeton Capital Accumulator Fund
Templeton Global Long-Short Fund
Templeton Global Opportunities Trust
Templeton Global Smaller Companies Fund
Templeton Growth Fund
Templeton World Fund

GROWTH
Franklin Aggressive Growth Fund
Franklin Capital Growth Fund
Franklin Flex Cap Growth Fund
Franklin Small-Mid Cap Growth Fund
Franklin Small Cap Growth Fund II 1

VALUE
Franklin Balance Sheet Investment Fund 2
Franklin Equity Income Fund
Franklin Large Cap Value Fund
Franklin MicroCap Value Fund 3
Franklin Small Cap Value Fund
Mutual Beacon Fund
Mutual Qualified Fund
Mutual Recovery Fund 4
Mutual Shares Fund

BLEND
Franklin Blue Chip Fund
Franklin Convertible Securities Fund
Franklin Growth Fund
Franklin Rising Dividends Fund
Franklin U.S. Long-Short Fund 5

SECTOR
Franklin Biotechnology Discovery Fund
Franklin DynaTech Fund
Franklin Global Communications Fund
Franklin Global Health Care Fund
Franklin Gold and Precious Metals Fund
Franklin Natural Resources Fund
Franklin Real Estate Securities Fund
Franklin Utilities Fund
Franklin Technology Fund
Mutual Financial Services Fund

ASSET ALLOCATION
Franklin Templeton Corefolio Allocation Fund
Franklin Templeton Founding Funds Allocation Fund

TARGET FUNDS
Franklin Templeton Conservative Target Fund
Franklin Templeton Growth Target Fund
Franklin Templeton Moderate Target Fund

INCOME
Franklin Adjustable U.S. Government Securities Fund 6
Franklin's AGE High Income Fund
Franklin Federal Money Fund 6, 7
Franklin Floating Rate Daily Access Fund
Franklin Floating Rate Trust 4
Franklin Income Fund
Franklin Money Fund 6, 7
Franklin Short-Intermediate U.S. Government Securities Fund 6
Franklin Strategic Income Fund
Franklin Strategic Mortgage Portfolio 6
Franklin Templeton Hard Currency Fund
Franklin Total Return Fund
Franklin U.S. Government Securities Fund 6
Templeton Global Bond Fund

TAX-FREE INCOME 8
NATIONAL FUNDS
Double Tax-Free Income Fund
Federal Tax-Free Income Fund
High Yield Tax-Free Income Fund
Insured Tax-Free Income Fund 9
Tax-Exempt Money Fund 6, 7

LIMITED-TERM FUNDS
California Limited-Term Tax-Free Income Fund
Federal Limited-Term Tax-Free Income Fund
New York Limited-Term Tax-Free Income Fund

INTERMEDIATE-TERM FUNDS
California Intermediate-Term Tax-Free Income Fund
Federal Intermediate-Term Tax-Free Income Fund
New York Intermediate-Term Tax-Free Income Fund

STATE-SPECIFIC 8
Alabama
Arizona
California 10
Colorado
Connecticut
Florida 10
Georgia
Kentucky
Louisiana
Maryland
Massachusetts 9
Michigan 9
Minnesota 9
Missouri
New Jersey
New York 10
North Carolina
Ohio 9
Oregon
Pennsylvania
Tennessee
Virginia

INSURANCE FUNDS
Franklin Templeton Variable Insurance Products Trust 11

1. The fund is closed to new investors. Existing shareholders can continue
adding to their accounts.

2. The fund is only open to existing shareholders as well as select retirement
plans.

3. Effective June 30, 2003, the fund reopened to all new investors.

4. The fund is a continuously offered, closed-end fund. Shares may be purchased
daily; there is no daily redemption. However, each quarter, pending board
approval, the fund will authorize the repurchase of 5%-25% of the outstanding
number of shares. Investors may tender all or a portion of their shares during
the tender period.

5. Upon reaching approximately $350 million in assets, the fund intends to close
to all investors.

6. An investment in the fund is neither insured nor guaranteed by the U.S.
government or by any other entity or institution.

7. No assurance exists that the fund's $1.00 per share price will be maintained.
It is possible to lose money by investing in the fund.

8. For investors subject to the alternative minimum tax, a small portion of
these dividends may be taxable. Distributions of capital gains are generally
taxable.

9. Portfolio of insured municipal securities.

10. These funds are available in two or more variations, including long-term
portfolios, portfolios of insured securities, a high-yield portfolio (CA) and
money market portfolios (CA and NY).

11. The funds of the Franklin Templeton Variable Insurance Products Trust are
generally available only through insurance company variable contracts.

11/03 Not part of the annual report

[LOGO OMITTED]
FRANKLIN(R) TEMPLETON(R)
INVESTMENTS
One Franklin Parkway
San Mateo, CA 94403-1906

WANT TO RECEIVE THIS DOCUMENT FASTER VIA EMAIL?
Eligible shareholders can sign up for eDelivery at franklintempleton.com. See
inside for details.

SEMIANNUAL REPORT AND SHAREHOLDER LETTER
FRANKLIN FEDERAL MONEY FUND

INVESTMENT MANAGER
Franklin Advisers, Inc.

DISTRIBUTOR
Franklin Templeton Distributors, Inc.
1-800/DIAL BEN(R)
franklintempleton.com

SHAREHOLDER SERVICES
1-800/632-2301

This report must be preceded or accompanied by the current Franklin Federal
Money Fund prospectus, which contains more complete information, including
charges, expenses and risks.

To ensure the highest quality of service, telephone calls to or from our service
departments may be monitored, recorded and accessed. These calls can be
identified by the presence of a regular beeping tone.

113 S2003 02/04

Item 2. Code of Ethics.

(a) The Registrant has adopted a code of ethics that applies to its principal
executive officers and principal financial and accounting officer.

(d) N/A

(f) Pursuant to Item 10(a), the Registrant is attaching as an exhibit a copy of
its code of ethics that applies to its principal executive officers financial
and accounting officer.

Item 3. Audit Committee Financial Expert.

(a)(1) The registrant has an audit committee financial expert serving on its
audit committee.

(2) The audit committee financial expert is Frank W.T. LaHaye, and he is
"independent" as defined under the relevant Securities and Exchange Commission
Rules and Releases.

Item 4. Principal Accountant Fees and Services. N/A
Item 5. Audit Committee of Listed Registrants. N/A
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies. N/A

Item 9. Controls and Procedures.
(a) Evaluation of Disclosure Controls and Procedures. The Registrant maintains
disclosure controls and procedures that are designed to ensure that information
required to be disclosed in the Registrant's filings under the Securities
Exchange Act of 1934 and the Investment Company Act of 1940 is recorded,
processed, summarized and reported within the periods specified in the rules and
forms of the Securities and Exchange Commission. Such information is accumulated
and communicated to the Registrant's management, including its principal
executive officer and principal financial officer, as appropriate, to allow
timely decisions regarding required disclosure. The Registrant's management,
including the principal executive officer and the principal financial officer,
recognizes that any set of controls and procedures, no matter how well designed
and operated, can provide only reasonable assurance of achieving the desired
control objectives.

Within 90 days prior to the filing date of this Shareholder Report on Form
N-CSR, the Registrant had carried out an evaluation, under the supervision and
with the participation of the Registrant's management, including the
Registrant's principal executive officer and the Registrant's principal
financial officer, of the effectiveness of the design and operation of the
Registrant's disclosure controls and procedures. Based on such evaluation, the
Registrant's principal executive officer and principal financial officer
concluded that the Registrant's disclosure controls and procedures are
effective.

(b) Changes in Internal Controls. There have been no significant changes in the
Registrant's internal controls or in other factors that could significantly
affect the internal controls subsequent to the date of their evaluation in
connection with the preparation of this Shareholder Report on Form N-CSR.

Item 10. Exhibits.

(A) Code of Ethics for Principal Executive and Senior Financial Officers.

(B)(1) Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
of Jimmy D. Gambill, Chief Executive Officer - Finance and Administration, and
Kimberley H. Monasterio, Chief Financial Officer

(B)(2) Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
of Jimmy D. Gambill, Chief Executive Officer - Finance and Administration, and
Kimberley H. Monasterio, Chief Financial Officer

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.

FRANKLIN FEDERAL MONEY FUND

By /s/Jimmy D. Gambill
Chief Executive Officer - Finance and Administration
Date February 27, 2004

Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.

By /s/Jimmy D. Gambill
Chief Executive Officer - Finance and Administration
Date February 27, 2004

By /s/Kimberley H. Monasterio
Chief Financial Officer
Date February 27, 2004