SCHEDULE 14A INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
(Amendment No. 1 )
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Filed by the Registrant / X /
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Filed by a party other than the Registrant / /
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Check the appropriate box:
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/ X / Preliminary Proxy Statement
- ----
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/ / Confidential, for Use of the Commission Only (as
- ---- permitted by Rule 14a-6(e) (2))

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/ / Definitive Proxy Statement
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/ / Definitive Additional Materials
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/ / Soliciting Material Pursuant to Sec. 240.14a-11(c) or
- ---- Sec. 240.14a-12

PUTNAM CALIFORNIA INVESTMENT GRADE MUNICIPAL TRUST
PUTNAM INVESTMENT GRADE MUNICIPAL TRUST II
PUTNAM INVESTMENT GRADE MUNICIPAL TRUST III
PUTNAM NEW YORK INVESTMENT GRADE MUNICIPAL TRUST
(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement,
if other than Registrant)

Payment of Filing Fee (Check the appropriate box):

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/ X / No fee required
- ----
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/ / Fee computed on table below per Exchange Act Rule 14a
- ---- 6(i)(1) 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 or other underlying value of
transaction computed pursuant to Exchange Act Rule 0-11
(set forth the amount on which the filing fee is
calculated and state how it was determined):

(4) Proposed maximum aggregate value of transaction:

(5) Total fee paid:

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/ / Fee paid previously with preliminary materials.
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/ / 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, or the Form or Schedule and the date of its
filing.

(1) Amount Previously Paid:

(2) Form, Schedule or Registration Statement No.:

(3) Filing Party:

(4) Date Filed:

IMPORTANT INFORMATION
FOR SHAREHOLDERS IN
PUTNAM CALIFORNIA INVESTMENT GRADE MUNICIPAL TRUST
PUTNAM INVESTMENT GRADE MUNICIPAL TRUST II
PUTNAM INVESTMENT GRADE MUNICIPAL TRUST III
PUTNAM NEW YORK INVESTMENT GRADE MUNICIPAL TRUST

The document you hold in your hands contains your proxy statement
and proxy card. A proxy card is, in essence, a ballot. When you
vote your proxy, it tells us how to vote on your behalf on
important issues relating to your fund. If you complete and sign
the proxy, we'll vote it exactly as you tell us. If you simply
sign the proxy, we'll vote it in accordance with the Trustees'
recommendations on page 4.

We urge you to spend a couple of minutes with the proxy
statement, fill out your proxy card, and return it to us. When
shareholders don't return their proxies in sufficient numbers, we
have to incur the expense of follow-up solicitations, which can
cost your fund money.

We want to know how you would like to vote and welcome your
comments. Please take a few moments with these materials and
return your proxy to us.

(PUTNAM LOGO APPEARS HERE)
BOSTON * LONDON * TOKYO

Table of contents

A Message from the Chairman. . . . . . . . . . . . . . . . . . . . . . . .1

Notice of Shareholder Meeting. . . . . . . . . . . . . . . . . . . . . . .2

Trustees' Recommendations. . . . . . . . . . . . . . . . . . . . . . . . .4

Proxy card enclosed

If you have any questions, please contact us at the special toll-
free number we have set up for you (1-800-225-1581) or call your
financial adviser.

A Message from the Chairman

(Photograph of George Putnam appears here)

Dear Shareholder:

I am writing to you to ask for your vote on important questions
that affect your investment in your fund. While you are, of
course, welcome to join us at your fund's meeting, most
shareholders cast their vote by filling out and signing the
enclosed proxy. We are asking for your vote on the following
matters: (1) fixing the number of Trustees and electing your
fund's Trustees; (2) ratifying the selection of your fund's
independent auditors; (3) approving an amendment to your
fund's fundamental investment restriction with respect to making
loans ; and (4) approving an amendment to your fund's
fundamental policy concerning the purchase of bonds paying
interest subject to the federal Alternative Minimum Tax
("AMT") .

Although we would like very much to have each shareholder attend
his or her fund's meeting, we realize this is not possible.
Whether or not you plan to be present, we need your vote. We
urge you to complete, sign, and return the enclosed proxy card
promptly. A postage-paid envelope is enclosed.

I'm sure that you, like most people, lead a busy life and are
tempted to put this proxy aside for another day. Please don't.
When shareholders do not return their proxies, their fund may
have to incur the expense of follow-up solicitations. All
shareholders benefit from the speedy return of proxies.

Your vote is important to us. We appreciate the time and
consideration that I am sure you will give this important matter.
If you have questions about the proposals, contact your financial
adviser or call a Putnam customer service representative at
1-800-225-1581.

Sincerely yours,

(signature of George Putnam)
George Putnam, Chairman

PUTNAM CALIFORNIA INVESTMENT GRADE MUNICIPAL TRUST
PUTNAM INVESTMENT GRADE MUNICIPAL TRUST II
PUTNAM INVESTMENT GRADE MUNICIPAL TRUST III
PUTNAM NEW YORK INVESTMENT GRADE MUNICIPAL TRUST

Notice of Annual Meeting of Shareholders

This is the formal agenda for your fund's shareholder meeting.
It tells you what matters will be voted on and the time and place
of the meeting, if you can attend in person.

To the Shareholders of Putnam California Investment Grade
Municipal Trust, Putnam Investment Grade Municipal Trust
II,
Putnam Investment Grade Municipal Trust III and Putnam
New York Investment Grade Municipal Trust:

The Annual Meeting of Shareholders of your fund will be held on
October 1, 1998 at 2:00 p.m., Boston time, on the eighth floor of
One Post Office Square, Boston, Massachusetts, to consider the
following:

1. Fixing the number of Trustees and electing Trustees. See
page .

2. Ratifying the selection by the Trustees of the independent
auditors of your fund for its current fiscal year. See
page .

3. Approving an amendment to your fund's fundamental investment
restriction with respect to making loans. See page .

4. Approving an amendment to your fund's fundamental
policy concerning the purchase of bonds paying interest
subject to the federal Alternative Minimum Tax. See
page .

5 . Transacting other business as may properly come before
the meeting.

By the Trustees

George Putnam, Chairman
William F. Pounds, Vice Chairman

Jameson A. Baxter John H. Mullin, III
Hans H. Estin Robert E. Patterson
John A. Hill Donald S. Perkins
Ronald J. Jackson George Putnam, III
Paul L. Joskow A.J.C. Smith
Elizabeth T. Kennan W. Thomas Stephens
Lawrence J. Lasser W. Nicholas Thorndike

WE URGE YOU TO MARK, SIGN, DATE, AND MAIL THE ENCLOSED PROXY IN
THE POSTAGE-PAID ENVELOPE PROVIDED SO YOU WILL BE REPRESENTED AT
THE MEETING.

August , 1998
Proxy Statement

This document will give you the information you need to vote on
the matters listed on the previous page. Much of the information
in the proxy statement is required under rules of the Securities
and Exchange Commission ("SEC"); some of it is technical. If
there is anything you don't understand, please contact us at our
special toll-free number, 1-800-225-1581, or call your financial
adviser.

Who is asking for my vote?

The enclosed proxy is solicited by the Trustees of Putnam
California Investment Grade Municipal Trust, Putnam
Investment Grade Municipal Trust II, Putnam Investment Grade
Municipal Trust III and Putnam New York Investment Grade
Municipal Trust for use at the Annual Meeting of Shareholders of
each fund to be held on October 1, 1998, and, if your fund's
meeting is adjourned, at any later meetings, for the purposes
stated in the Notice of Annual Meeting (see previous page).

How do your fund's Trustees recommend that shareholders vote on
these proposals?

The Trustees recommend that you vote

1. For fixing the number of Trustees as proposed and the
election of all nominees;

2. For ratifying the selection of PricewaterhouseCoopers LLP
as the independent auditors of your fund ;

3. For amending your fund's fundamental investment restriction
with respect to making loans ; and

4. For amending your fund's fundamental policy with respect to
the purchase of bonds paying interest subject to the federal
Alternative Minimum Tax.

Who is eligible to vote?

Shareholders of record at the close of business on July 10, 1998
are entitled to be present and to vote at the meeting or any
adjourned meeting. The Notice of Annual Meeting, the proxy, and
the Proxy Statement are being mailed to shareholders of record on
or about August , 1998.

Each share is entitled to one vote. Unless otherwise noted, the
holders of your fund's preferred shares and holders of your
fund's common shares will vote together as a single class.
Shares represented by duly executed proxies will be voted in
accordance with shareholders' instructions. If you sign the
proxy, but don't fill in a vote, your shares will be voted in
accordance with the Trustees' recommendations. If any other
business is brought before your fund's meeting, your shares will
be voted at the Trustees' discretion.

Shareholders of each fund vote separately with respect to each
proposal. Voting by one fund does not affect any other fund.

The Proposals

I. ELECTION OF TRUSTEES

Who are the nominees for Trustees?

The Nominating Committee of the Trustees of your fund recommends
that the number of Trustees be fixed at sixteen and that you vote
for the election of the nominees described below. Each nominee
is currently a Trustee of your fund and of the other Putnam
funds.

Pursuant to the bylaws of your fund and the Investment Company
Act of 1940, holders of the preferred shares of the fund are
entitled to elect two Trustees. The remaining Trustees for your
fund will be elected by the holders of its preferred shares and
common shares voting together as a single class. Therefore,
Messrs. Hill and Patterson have been nominated as Trustees to be
elected by the holders of the preferred shares of your fund,
while the other fourteen Trustees have been nominated to be
elected by the holders of the preferred shares and common shares
of your fund voting together as a single class.

The Nominating Committee of the Trustees consists solely of
Trustees who are not "interested persons" (as defined in the
Investment Company Act of 1940) of your fund or of Putnam
Investment Management, Inc., your fund's investment manager
("Putnam Management").

Jameson Adkins Baxter
[Insert Picture]

Ms. Baxter, age 54, is the President of Baxter Associates, Inc.,
a management and financial consulting firm which she founded in
1986. During that time, she was also a Vice President and
Principal of the Regency Group, Inc., and a Consultant to First
Boston Corporation, both of which are investment banking firms.
From 1965 to 1986, Ms. Baxter held various positions in
investment banking and corporate finance at First Boston.

Ms. Baxter currently also serves as a Director of Banta
Corporation, Avondale Financial Corp., and ASHTA Chemicals, Inc.
She is also the Chairman Emeritus of the Board of Trustees of
Mount Holyoke College, having previously served as Chairman for
five years and as a Board member for thirteen years; an Honorary
Trustee and past President of the Board of Trustees of the Emma
Willard School; and Chair of the Board of Governors of Good
Shepherd Hospital. Ms. Baxter is a graduate of Mount Holyoke
College.

Hans H. Estin
[Insert Picture]

Mr. Estin, age 69, is a Chartered Financial Analyst and the Vice
Chairman of North American Management Corp., a registered
investment adviser serving individual clients and their families.
Mr. Estin currently also serves as a Corporation Member of The
Schepens Eye Research Institute; and a Trustee of New England
Aquarium. He previously served as the Chairman of the Board of
Trustees of Boston University and is currently active in various
other civic associations, including the Boys & Girls Clubs of
Boston, Inc. Mr. Estin is a graduate of Harvard College and
holds honorary doctorates from Merrimack College and Boston
University.

John A. Hill
[Insert Picture]

Mr. Hill, age 56, is the Chairman and Managing Director of First
Reserve Corporation, a registered investment adviser investing in
companies in the world-wide energy industry on behalf of
institutional investors.

Prior to acquiring First Reserve in 1983, Mr. Hill held executive
positions with several investment advisory firms and held various
positions with the Federal government, including Associate
Director of the Office of Management and Budget and Deputy
Administrator of the Federal Energy Administration.

Mr. Hill currently also serves as a Director of Snyder Oil
Corporation, an exploration and production company which he
founded, TransMontaingne Oil Company, a refined oil product
pipeline and distribution company, Weatherford Enterra, Inc., an
oil field service company, various private companies controlled
by First Reserve Corporation, and various First Reserve Funds.
He is also a Member of the Board of Advisors of Fund Directions.
He is currently active in various business associations,
including the Economic Club of New York, and lectures on energy
issues in the United States and Europe. Mr. Hill is a graduate
of Southern Methodist University.

Ronald J. Jackson
[Insert Picture]

Mr. Jackson, age 54, was Chairman of the Board, President and
Chief Executive Officer of Fisher-Price, Inc., a major toy
manufacturer, from 1990 to 1993. He previously served as
President and Chief Executive Officer of Stride-Rite, Inc., a
manufacturer and distributor of footwear, from 1989 to 1990, and
as President and Chief Executive Officer of Kenner Parker Toys,
Inc., a major toy and game manufacturer, from 1985 to 1987.
Prior to that, he held various financial and marketing positions
at General Mills, Inc. from 1966 to 1985, including Vice
President, Controller and Vice President of Marketing for Parker
Brothers, a toy and game company, and President of Talbots, a
retailer and direct marketer of women's apparel.

Mr. Jackson currently serves as a Trustee of Salem Hospital and
the Peabody Essex Museum. Mr. Jackson is a graduate of Michigan
State University Business School.

Paul L. Joskow*
[Insert Picture]

Dr. Joskow, 51, is Elizabeth and James Killian Professor
of Economics and former Chairman of the Department of
Economics at the Massachusetts Institute of Technology .
He has published three books and numerous articles on topics
in industrial organization, government regulation of
industry, and competition policy. Dr. Joskow currently
serves as a Director of the New England Electric System, a public
utility holding company, State Farm Indemnity Corporation ,
an automobile insurance company, and the Whitehead Institute for
Biological Research, a non-profit research institution.
He has been President of the Yale University Councel since
1993. Dr. Joskow is active on industry restructuring,
environmental, energy, competition, and privatization policies
and has served as an advisor to governments and corporations
around the world. He has been a consultant to National Economic
Research Associates, Inc. since 1972 on these and related issues.

Dr. Joskow is a graduate of Cornell University and Yale
University. He is a Fellow of the Econometric Society and the
American Academy of Arts and Sciences.

Elizabeth T. Kennan
[Insert Picture]

Ms. Kennan, age 60, is President Emeritus and Professor of Mount
Holyoke College. From 1978 through June 1995, she was President
of Mount Holyoke College. From 1966 to 1978, she was on the
faculty of Catholic University, where she taught history and
published numerous articles.

Ms. Kennan currently also serves as a Director of Bell Atlantic,
a telecommunications company, Northeast Utilities, the Kentucky
Home Life Insurance Companies, and Talbots. She also serves as a
Member of The Folger Shakespeare Library Committee. She is
currently active in various educational and civic associations.
Ms. Kennan is a graduate of Mount Holyoke College, the University
of Washington and St. Hilda College at Oxford University and
holds several honorary doctorates.

Lawrence J. Lasser*
[Insert Picture]

Mr. Lasser, age 55, is a Vice President of your fund and each of
the other Putnam funds. He has been the President, Chief
Executive Officer and a Director of Putnam Investments, Inc. and
Putnam Management since 1985, having begun his career there in
1969.

Mr. Lasser currently also serves as a Director of Marsh &
McLennan Companies, Inc., the parent company of Putnam
Management, and the United Way of Massachusetts Bay. He is a
Member of the Board of Overseers of the Museum of Fine Arts in
Boston, The Council on Foreign Relations, and a Member of the
Board of Governors and Executive Committee at the Investment
Company Institute. He is also a Trustee of the Beth
Israel\Deaconess Medical Center in Boston and the Vineyard Open
Land Foundation. Mr. Lasser is a graduate of Antioch College and
Harvard Business School.

John H. Mullin, III
[Insert Picture]

Mr. Mullin, 57, is Chairman and CEO of Ridgeway Farm, a limited
liability company engaged in timber activities and farming.
Prior to establishing Ridgeway Farm, Mr. Mullin was a Managing
Director of Dillon, Read & Co. Inc., an investment banking firm.

Mr. Mullin currently serves as a Director of ACX Technologies,
Inc., a company engaged in the manufacture of industrial ceramics
and packaging products; Alex. Brown Realty, Inc., a real estate
investment company and The Liberty Corporation, a company engaged
in the life insurance and broadcasting industries. Mr. Mullin
previously served as a Director of Dillon, Read & Co. Inc.,
Adolph Coors Company, Crystal Brands, Inc., Fisher-Price, Inc.,
Mattel, Inc. and The Ryland Group, Inc. Mr. Mullin is a Trustee
Emeritus of Washington & Lee University where he served as
Chairman of the Investment Committee. Mr. Mullin is a graduate
of Washington & Lee University and The Wharton Graduate School at
the University of Pennsylvania.

Robert E. Patterson
[Insert Picture]

Mr. Patterson, age 53, is the President and a Trustee of Cabot
Industrial Trust, a publicly traded real estate investment trust.
Prior to February, 1998 he was Executive Vice President and
Director of Acquisitions of Cabot Partners Limited Partnership, a
registered investment adviser which managed real estate
investments for institutional investors. Prior to 1990, he was
the Executive Vice President of Cabot, Cabot & Forbes Realty
Advisors, Inc., the predecessor company of Cabot Partners. Prior
to that, he was a Senior Vice President of the Beal Companies, a
real estate management, investment and development company. He
has also worked as an attorney and held various positions in
state government, including the founding Executive Director of
the Massachusetts Industrial Finance Agency.

Mr. Patterson currently also serves as Chairman of the Joslin
Diabetes Center, a Trustee of SEA Education Association
and a Director of Brandywine Trust Company. Mr. Patterson is a
graduate of Harvard College and Harvard Law School.

Donald S. Perkins*
[Insert Picture]

Mr. Perkins, age 71, is the retired Chairman of the Board of
Jewel Companies, Inc., a diversified retailer, where among other
roles he served as President, Chief Executive Officer and
Chairman of the Board from 1965 to 1980. He currently also
serves as a Director of various other public corporations,
including AON Corp., an insurance company, Cummins Engine
Company, Inc., an engine and power generator equipment
manufacturer and assembler, Current Assets L.L.C., a corporation
providing financial staffing services, LaSalle Street Fund, Inc.
and LaSalle U.S. Realty Income and Growth Fund, Inc., real estate
investment trusts, Lucent Technologies Inc., Nanophase
Technologies Inc., a producer of nano crystaline materials,
Ryerson Tull, Inc., America's largest steel service corporation,
Springs Industries, Inc., a textile manufacturer, and Time
Warner, Inc., one of the nation's largest media conglomerates.
He previously served as a Director of several other major public
corporations, including Corning Glass Works, Eastman Kodak
Company, Firestone Tire & Rubber Company and Kmart Corporation.

Mr. Perkins currently also serves as a Trustee and Vice Chairman
of Northwestern University. He is currently active in various
civic and business associations, including the Business Council
and the Civic Committee of the Commercial Club of Chicago, of
which he is the founding Chairman. Mr. Perkins is a graduate of
Yale University and Harvard Business School and holds an honorary
doctorate from Loyola University of Chicago.

William F. Pounds
[Insert Picture]

Dr. Pounds, age 70, is the Vice Chairman of your fund and of the
other Putnam funds. He has been a Professor of Management at the
Alfred P. Sloan School of Management at the Massachusetts
Institute of Technology since 1961 and served as Dean of that
School from 1966 to 1980. He previously served as Senior Advisor
to the Rockefeller Family and Associates and was a past Chairman
of Rockefeller & Co., Inc., a registered investment adviser which
manages Rockefeller family assets, and Rockefeller Trust Company.

Dr. Pounds currently also serves as a Director of IDEXX
Laboratories, Inc., Management Sciences For Health, Inc. and Sun
Company, Inc. He is also a Trustee of the Museum of Fine Arts in
Boston; and a Fellow of The American Academy of Arts and
Sciences. He previously served as a Director of Fisher-Price,
Inc., General Mills, Inc., PerSeptive Biosystems, Inc., and an
Overseer of WGBH Educational Foundation. Dr. Pounds is a
graduate of Carnegie-Mellon University.

George Putnam*
[Insert Picture]

Mr. Putnam, age 71, is the Chairman and President of your fund
and each of the other Putnam funds. He is the Chairman and a
Director of Putnam Management and Putnam Mutual Funds Corp. and a
Director of Marsh & McLennan, their parent company. Mr. Putnam
is the son of the founder of the Putnam funds and Putnam
Management and has been employed in various capacities by Putnam
Management since 1951, including Chief Executive Officer from
1961 to 1973. He is a former Overseer and Treasurer of Harvard
University; a past Chairman of the Harvard Management Company;
and a Trustee Emeritus of Wellesley College and Bradford College.

Mr. Putnam currently also serves as a Director of Freeport Copper
and Gold, Inc., a mining and natural resources company and
Houghton Mifflin Company, a major publishing company. He is also
a Trustee of Massachusetts General Hospital, McLean Hospital,
Vincent Memorial Hospital, WGBH Educational Foundation and the
Museum of Fine Arts in Boston; the New England Aquarium; an
Overseer of the Museum of Science in Boston, Northeastern
University and College of the Atlantic; and a Fellow of The
American Academy of Arts and Sciences. Mr. Putnam is a graduate
of Harvard College and Harvard Business School and holds honorary
doctorates from Bates College and Harvard University.

George Putnam, III*
[Insert Picture]

Mr. Putnam, age 46, is the President of New Generation Research,
Inc., a publisher of financial advisory and other research
services relating to bankrupt and distressed companies, and New
Generation Advisers, Inc., a registered investment adviser which
provides advice to private funds specializing in investments in
such companies. Prior to founding New Generation in 1985, Mr.
Putnam was an attorney with the Philadelphia law firm Dechert
Price & Rhoads.

Mr. Putnam currently also serves as a Director of the
Massachusetts Audubon Society and The Boston Family Office,
L.L.C., a registered investment advisor that provides financial
advice to individuals and families. He is also a Trustee of the
Sea Education Association and St. Mark's School and an Overseer
of the New England Medical Center. Mr. Putnam is a graduate of
Harvard College, Harvard Business School and Harvard Law School.

A.J.C. Smith*
[Insert Picture]

Mr. Smith, age 64, is the Chairman and Chief Executive Officer of
Marsh & McLennan Companies, Inc. He has been employed by Marsh &
McLennan and related companies in various capacities since 1961.
Mr. Smith is a Director of the Trident Corp., and he also serves
as a Trustee of the Carnegie Hall Society, the Central Park
Conservancy, the Educational Broadcasting Corporation, the
Economic Club of New York, the U.S. Chamber of Commerce, and is a
Founder of the Museum of Scotland Society. He was educated in
Scotland and is a Fellow of the Faculty of Actuaries in
Edinburgh, a Fellow of the Canadian Institute of Actuaries, a
Fellow of the Conference of Actuaries, an Associate of the
Society of Actuaries, a Member of the American Academy of
Actuaries, the International Actuarial Association and the
International Association of Consulting Actuaries.

W. Thomas Stephens
[Insert Picture]

Mr. Stephens, age 55, is the President and Chief Executive
Officer of MacMillan Bloedel Ltd. Mr. Stephens retired in 1996
as Chairman of the Board of Directors, President and Chief
Executive Officer of Johns Manville Corporation, an insulation
and roofing systems company. He also served as Executive Vice
President and Chief Financial Officer of Manville and in total
had 27 years of experience with Manville and its predecessor
companies.

Mr. Stephens serves as a Director for Qwest Communications, a
fiber optics manufacturer and New Century Energies, a public
utility company. Mr. Stephens is a Member of the Colorado Forum
and Trustee of the Denver Art Museum and The University of
Arkansas Advisory Council. He is currently a Visiting Professor
at the Graduate School of Business at the University of Colorado.
Mr. Stephens is a graduate of the University of Arkansas.

W. Nicholas Thorndike**
[Insert Picture]

Mr. Thorndike, age 65, serves as a Director of various
corporations and charitable organizations, including Data General
Corporation, a computer and high technology company, Bradley Real
Estate, Inc., a real estate investment firm, Providence Journal
Co., a newspaper publisher, and Courier Corporation, a book
binding and printing company. He is also a Trustee of Cabot
Industrial Trust, Eastern Utilities Associates, Massachusetts
General Hospital, where he previously served as chairman and
president, and Northeastern University.

Prior to December 1988, he was the Chairman of the Board and
Managing Partner of Wellington Management Company/Thorndike,
Doran, Paine & Lewis, a registered investment adviser which
manages mutual funds and institutional assets. He also
previously served as a Trustee of the Wellington Group of Funds
(now The Vanguard Group) and was the Chairman and a Director of
Ivest Fund, Inc. Mr. Thorndike is a graduate of Harvard College.

- ----------------------------
* Nominees who are or may be deemed to be "interested persons"
(as defined in the Investment Company Act of 1940) of your
fund, Putnam Management, and Putnam Mutual Funds Corp.
("Putnam Mutual Funds"), the principal underwriter for all
the open-end Putnam funds and an affiliate of Putnam
Management. Messrs. Putnam, Lasser, and Smith are deemed
"interested persons" by virtue of their positions as
officers or shareholders of your fund, or directors of
Putnam Management, Putnam Mutual Funds, or Marsh & McLennan
Companies, Inc., the parent company of Putnam Management and
Putnam Mutual Funds. Mr. George Putnam, III, Mr. Putnam's
son, is also an "interested person" of your fund, Putnam
Management, and Putnam Mutual Funds. Mr. Perkins may be
deemed to be an "interested person" of your fund because of
his service as a director of a certain publicly held company
that includes registered broker-dealer firms among its
subsidiaries. Neither your fund nor any of the other Putnam
funds currently engages in any transactions with such firms
except that certain of such firms act as dealers in the
retail sale of shares of certain Putnam funds in the
ordinary course of their business. Mr. Joskow is not
currently an "interested person" of your fund but could be
deemed by the Securities and Exchange Commission to be an
"interested person" on account of his consulting
relationship with National Economic Research Associates,
Inc. which is a wholly-owned subsidiary of Marsh & McLennan
Companies, Inc. The balance of the nominees are not
"interested persons."

** In February 1994 Mr. Thorndike accepted appointment as a
successor trustee of certain private trusts in which he has
no beneficial interest. At that time he also became
Chairman of the Board of two privately owned corporations
controlled by such trusts, serving in that capacity until
October 1994. These corporations filed voluntary petitions
for relief under Chapter 11 of the U.S. Bankruptcy Code in
August 1994.

Except as indicated above, the principal occupations and business
experience of the nominees for the last five years have been with
the employers indicated, although in some cases they have held
different positions with those employers. Except for Messrs.
Joskow, Mullin and Stephens all the nominees were elected by the
shareholders in October 1997. Messrs. Joskow and Mullin were
elected by the Trustees in November 1997 and Mr. Stephens was
elected by the Trustees in September 1997. The 16 nominees for
election as Trustees at the shareholder meeting of your fund who
receive the greatest number of votes will be elected Trustees of
your fund. The Trustees serve until their successors are elected
and qualified. Each of the nominees has agreed to serve as a
Trustee if elected. If any of the nominees is unavailable for
election at the time of the meeting, which is not anticipated,
the Trustees may vote for other nominees at their discretion, or
the Trustees may fix the number of Trustees at less than 16 for
your fund.

What are the Trustees' responsibilities?

Your fund's Trustees are responsible for the general oversight of
your fund's business and for assuring that your fund is managed
in the best interests of its shareholders. The Trustees
periodically review your fund's investment performance as well as
the quality of other services provided to your fund and its
shareholders by Putnam Management and its affiliates, including
administration, custody, and investor servicing. At least
annually, the Trustees review the fees paid to Putnam Management
and its affiliates for these services and the overall level of
your fund's operating expenses. In carrying out these
responsibilities, the Trustees are assisted by an independent
administrative staff and by your fund's auditors and legal
counsel, which are selected by the Trustees and are independent
of Putnam Management and its affiliates.

Do the Trustees have a stake in your fund?

The Trustees believe it is important that each Trustee have a
significant investment in the Putnam funds. The Trustees
allocate their investments among the more than 101 Putnam funds
based on their own investment needs. The Trustees' aggregate
investments in the Putnam funds total over $75 million.
The table below lists each Trustee's current investments in the
fund and in the Putnam funds as a group based on beneficial
ownership. Except as otherwise noted, each Trustee has sole
voting power and sole investment power with respect to his or her
shares.

Share Ownership by Trustees

Year first
elected as Number of shares
Trustee of of all Putnam
the Putnam funds owned as
Trustees funds of 5/29/98(1)
- ----------------------------------------------------------------------

Jameson A. Baxter 1994
115,631
Hans H. Estin 1972 32,935
John A. Hill 1985 182,214
Ronald J. Jackson 1996 139,464
Paul L. Joskow 1997 22,176
Elizabeth T. Kennan 1992 25,723
Lawrence J. Lasser 1992 607,120
John H. Mullin, III 1997 37,316
Robert E. Patterson 1984 68,678
Donald S. Perkins 1982 153,350
William F. Pounds 1971 335,026
George Putnam 1957 2,100,342
George Putnam, III 1984 479,485
A.J.C. Smith 1986 59,126
W. Thomas Stephens 1997 145,590
W. Nicholas Thorndike 1992 83,546
- ----------------------------------------------------------------------

(1) These holdings do not include shares of Putnam money market
funds.

Share Ownership by Trustees

Number of shares owned as of May 29, 1998 of:

Putnam
California Investmment Putnam Investment
Grade Municipal Grade Municipal
Trustees Trust Trust II
-------------------------------------------------------------------
- ---
Jameson A. Baxter 126 1,317
Hans H. Estin 129 131
John A. Hill 100 100
Ronald J. Jackson 200 (1) 200 (1)
Paul L. Joskow (2) 100 100
Elizabeth T. Kennan 138 (3) 135 (3)
Lawrence J. Lasser 100 100
John H. Mullin, III (2) 100 100
Robert E. Patterson 100 100
Donald S. Perkins 184 952
William F. Pounds 335 335
George Putnam 942 963
George Putnam, III 500 500
A.J.C. Smith 200 (4) 200 (4)
W. Thomas Stephens (5) 100 100
W. Nicholas Thorndike 136 139
- ----------------------------------------------------------------------

(1) Mr. Jackson has shared investment power and shared voting power
with respect to such shares.
(2) Elected as a Trustee in November 1997.
(3) Mrs. Kennan is the custodian of a trust which owns all of these
shares and in which she has no economic interest.
(4) Mr. Smith has shared investment power and shared voting power with
respect to such shares.
(5) Elected as a Trustee in September 1997.

As of May 29, 1998, the Trustees and officers of Putnam California
Investment Grade Municipal Trust and Putnam Investment Grade
Municipal Trust II owned a total of 3,490 and
5,472 common shares, respectively, of each fund comprising less
than 1% of the outstanding common shares of such fund on that date.
None of the Trustees own any preferred shares of the funds.

Share Ownership by Trustees

Number of shares owned as of May 29, 1998 of:

Putnam New York
Putnam Investment Investment Grade

Grade Municipal Municipal
Trustees Trust III Trust
- ----------------------------------------------------------------------

Jameson A. Baxter 1,561 125
Hans H. Estin 118 128
John A. Hill 2,500 1,100
Ronald J. Jackson 200 (1) 200 (1)
Paul L. Joskow (2) 100 100
Elizabeth T. Kennan 120 (3) 131 (3)
Lawrence J. Lasser 100 100
John H. Mullin, III (2) 100 100
Robert E. Patterson 200 100
Donald S. Perkins 1,081 232
William F. Pounds 100 335
George Putnam 1,023 922
George Putnam, III 500 500
A.J.C. Smith 200 (4) 200 (4)
W. Thomas Stephens (5) 100 100
W. Nicholas Thorndike 120 135
- ----------------------------------------------------------------------

As of May 29, 1998, the Trustees and officers of Putnam Investment
Grade Municipal Trust III and Putnam New York Investment
Grade Municipal Trust owned a total of 8,123 and
4,507 common shares, respectively, of each fund comprising less
than 1% of the outstanding common shares of such fund on that date.
None of the Trustees own any preferred shares of the funds.

What are some of the ways in which the Trustees represent
shareholder interests?

The Trustees believe that, as substantial investors in the Putnam
funds, their interests are closely aligned with those of
individual shareholders. Among other ways, the Trustees seek to
represent shareholder interests:

by carefully reviewing your fund's investment performance on
an individual basis with your fund's managers;

by also carefully reviewing the quality of the various other
services provided to the funds and their shareholders by
Putnam Management and its affiliates;

by discussing with senior management of Putnam Management
steps being taken to address any performance deficiencies;

by reviewing the fees paid to Putnam Management to ensure
that such fees remain reasonable and competitive with those
of other mutual funds, while at the same time providing
Putnam Management sufficient resources to continue to
provide high quality services in the future;

by monitoring potential conflicts between the funds and
Putnam Management and its affiliates to ensure that the
funds continue to be managed in the best interests of their
shareholders; and

by also monitoring potential conflicts among funds to ensure
that shareholders continue to realize the benefits of
participation in a large and diverse family of funds.

How often do the Trustees meet?

The Trustees meet each month (except August) over a two-day
period to review the operations of your fund and of the other
Putnam funds. A portion of these meetings is devoted to meetings
of various Committees of the board which focus on particular
matters. These currently include: the Committee of Independent
Trustees, which conducts an annual review of all contractual
arrangements with Putnam Management and its affiliates; the
Contract Committee, which reviews such matters on an interim
basis during the course of the year; the Communication and
Service Committee, which reviews the quality of services provided
by your fund's investor servicing agent and custodian; the
Pricing, Brokerage and Special Investments Committee, which
reviews matters relating to valuation of securities, best
execution, brokerage costs and allocations and new investment
techniques; the Audit Committee, which reviews accounting
policies and the adequacy of internal controls and supervises the
engagement of the funds' auditors; the Compensation, Legal,
Administrative Affairs Committee, which reviews the
compensation of the Trustees and their administrative staff and
supervises the engagement of the funds' independent counsel; the
Nominating Committee, which is responsible for selecting nominees
for election as Trustees and the Closed-end Fund Committee, which
is responsible for reviewing special issues applicable to closed-
end funds such as your fund.

Each Trustee generally attends at least two formal committee
meetings during each regular meeting of the Trustees. During
1997, the average Trustee participated in approximately 40
committee and board meetings. In addition, the Trustees meet in
small groups with Chief Investment Officers and Portfolio
Managers to review recent performance and the current investment
climate for selected funds. These meetings ensure that each
fund's performance is reviewed in detail at least twice a year.
The Committee of Independent Trustees and the Contract Committee
typically meet on several additional occasions during the year to
carry out their responsibilities. Other Committees, including an
Executive Committee, may also meet on special occasions as the
need arises.

What are the Trustees paid for their services?

Each Trustee receives a fee for his or her services. Each
Trustee also receives fees for serving as Trustee of the other
Putnam funds. The Trustees periodically review their fees to
assure that such fees continue to be appropriate in light of
their responsibilities as well as in relation to fees paid to
trustees of other mutual fund complexes. The Compensation
Committee, which consists solely of Trustees not affiliated with
Putnam Management, estimates that Committee and Trustee meeting
time together with the appropriate preparation requires the
equivalent of at least three business days per Trustee meeting.
The following table shows the fees paid to each Trustee by each
fund for its most recent fiscal year and the fees paid to each
Trustee by all of the Putnam funds during calendar year 1997:

PUTNAM CALIFORNIA INVESTMENT GRADE MUNICIPAL TRUST

COMPENSATION TABLE

Pension or Estimated Total
Aggregate retirement annual benefits compensation
compensation benefits accrued from all from all
from the as part of Putnam funds Putnam
Trustees fund(1) fund expenses upon retirement(2) funds(3)

Jameson A. Baxter $513 $111 $87,500 $176,000 (4)
Hans H. Estin 482 250 87,500 175,000
John A. Hill 476 93 87,500 175,000 (4)
Ronald J. Jackson 505 51 87,500 176,000 (4)
Paul L. Joskow (5) 235 3 87,500 25,500
Elizabeth T. Kennan 503 131 87,500 174,000
Lawrence J. Lasser 471 99 87,500 172,000
John H. Mullin, III (5) 235 5 87,500 25,500
Robert E. Patterson 479 75 87,500 176,000
Donald S. Perkins 482 271 87,500 176,000
William F. Pounds (6) 495 281 98,000 201,000
George Putnam 477 287 87,500 175,000
George Putnam, III 478 50 87,500 174,000
A.J.C. Smith 473 168 87,500 170,000
W. Thomas Stephens 240 5 87,500 53,000 (4)
W. Nicholas Thorndike 482 189 87,500 176,000

(1) Includes an annual retainer and an attendance fee for each meeting attended.
(2) Assumes that each Trustee retires at the normal retirement date. Estimated benefits for
each Trustee are based on Trustee fee rates in effect during calendar 1997.
(3) As of December 31, 1997, there were 101 funds in the Putnam family.
(4) Includes compensation deferred pursuant to a Trustee Compensation Deferral Plan.
(5) Elected as a Trustee in November 1997.
(6) Includes additional compensation for service as Vice Chairman of the Putnam funds.

PUTNAM INVESTMENT GRADE MUNICIPAL TRUST II

COMPENSATION TABLE

Jameson A. Baxter $617 $134 $87,500 $176,000 (4)
Hans H. Estin 580 302 87,500 175,000
John A. Hill 574 113 87,500 175,000 (4)
Ronald J. Jackson 608 63 87,500 176,000 (4)
Paul L. Joskow (5) 282 4 87,500 25,500
Elizabeth T. Kennan 606 160 87,500 174,000
Lawrence J. Lasser 568 119 87,500 172,000
John H. Mullin, III (5) 282 6 87,500 25,500
Robert E. Patterson 577 91 87,500 176,000
Donald S. Perkins 580 328 87,500 176,000
William F. Pounds (6) 621 340 98,000 201,000
George Putnam 575 346 87,500 175,000
George Putnam, III 576 60 87,500 174,000
A.J.C. Smith 571 205 87,500 170,000
W. Thomas Stephens 553 6 87,500 53,000 (4)
W. Nicholas Thorndike 580 228 87,500 176,000

PUTNAM INVESTMENT GRADE MUNICIPAL TRUST III

COMPENSATION TABLE

Jameson A. Baxter $512 $161 $87,500 $176,000 (4)
Hans H. Estin 508 501 87,500 175,000
John A. Hill 509 188 87,500 175,000 (4)
Ronald J. Jackson 512 35 87,500 176,000 (4)
Paul L. Joskow (5) -- -- 87,500 25,500
Elizabeth T. Kennan 507 315 87,500 174,000
Lawrence J. Lasser 502 236 87,500 172,000
John H. Mullin, III (5) -- -- 87,50025,500
Robert E. Patterson 512 150 87,500 176,000
Donald S. Perkins 512 545 87,500 176,000
William F. Pounds (6) 524 522 98,000 201,000
George Putnam 510 575 87,500 175,000
George Putnam, III 507 99 87,500 174,000
A.J.C. Smith 497 336 87,500 170,000
W. Thomas Stephens -- -- 87,500 53,000 (4)
W. Nicholas Thorndike 512 452 87,500 176,000

PUTNAM NEW YORK INVESTMENT GRADE MUNICIPAL TRUST

COMPENSATION TABLE

Jameson A. Baxter $492 $107 $87,500 $176,000 (4)
Hans H. Estin 462 241 87,500 175,000
John A. Hill 457 91 87,500 175,000 (4)
Ronald J. Jackson 484 50 87,500 176,000 (4)
Paul L. Joskow (5) 227 3 87,500 25,500
Elizabeth T. Kennan 483 127 87,500 174,000
Lawrence J. Lasser 452 95 87,500 172,000
John H. Mullin, III (5) 227 5 87,500 25,500
Robert E. Patterson 460 72 87,500 176,000
Donald S. Perkins 462 261 87,500 176,000
William F. Pounds (6) 470 271 98,000 201,000
George Putnam 458 276 87,500 175,000
George Putnam, III 459 48 87,500 174,000
A.J.C. Smith 455 162 87,500 170,000
W. Thomas Stephens 232 5 87,500 53,000 (4)
W. Nicholas Thorndike 462 182 87,500 176,000

Under a Retirement Plan for Trustees of the Putnam funds (the "Plan"),
each Trustee who retires with at least five years of service as a
Trustee of the funds is entitled to receive an annual retirement
benefit equal to one-half of the average annual compensation paid to
such Trustee for the last three years of service prior to retirement.
This retirement benefit is payable during a Trustee's lifetime,
beginning the year following retirement, for a number of years equal
to such Trustee's years of service. A death benefit is also available
under the Plan which assures that the Trustee and his or her
beneficiaries will receive benefit payments for the lesser of an
aggregate period of (i) ten years or (ii) such Trustee's total years
of service.

The Plan Administrator (a committee comprised of Trustees that are not
"interested persons" of the fund, as defined in the Investment Company
Act of 1940) may terminate or amend the Plan at any time, but no
termination or amendment will result in a reduction in the amount of
benefits (i) currently being paid to a Trustee at the time of such
termination or amendment, or (ii) to which a current Trustee would
have been entitled to receive had he or she retired immediately prior
to such termination or amendment.

For additional information about your fund, including further
information about its Trustees and officers, please see "Fund
information," on page .

Putnam Investments

Putnam Investment Management, Inc. and its affiliate, Putnam Fiduciary
Trust Company, your fund's investor servicing agent and custodian, are
owned by Putnam Investments, Inc., One Post Office Square, Boston,
Massachusetts 02109, a holding company that is, except for a minority
stake owned by employees, in turn owned by Marsh & McLennan Companies,
Inc., which has executive offices at 1166 Avenue of the Americas, New
York, New York 10036. Marsh & McLennan Companies, Inc. and its
operating subsidiaries are professional services firms with insurance
and reinsurance brokerage, consulting, and investment management
businesses.

2. RATIFICATION OF INDEPENDENT AUDITORS

PricewaterhouseCoopers LLP , One Post Office Square, Boston,
Massachusetts 02109, independent accountants, has been selected by the
Trustees as the independent auditors of your fund for its
current fiscal year .

Among the country's preeminent accounting firms, this firm
serves as the auditors for all of the other funds in the Putnam
family. It was selected primarily on the basis of its
expertise as auditors of investment companies, the quality of its
audit services, and the competitiveness of its fees.

A majority of the votes on the matter is necessary to ratify the
selection of auditors. Voting by one fund does not affect any other
fund. A representative of the independent auditors is expected to
be present at the meeting to make statements and to respond to
appropriate questions.

Effective July 1, 1998, Coopers & Lybrand L.L.P. and Price
Waterhouse LLP combined their businesses and practices and
began doing business as PricewaterhouseCoopers LLP.

3.
AMENDING YOUR FUND'S FUNDAMENTAL INVESTMENT RESTRICTION WITH
RESPECT TO MAKING LOANS

The Trustees are recommending that your fund's fundamental investment
restriction with respect to making loans be revised to
reflect the
standard restriction expected to be used by other Putnam funds and to
clarify that the fund is permitted to participate in a proposed
"interfund lending program". The current restriction of each fund
states that the fund may not:

"Make loans, except by purchase of debt obligations in which the
fund may invest consistent with its investment policies, by
entering into repurchase agreements, or by lending its portfolio
securities."

The proposed fundamental investment restriction for your fund is set
forth below.

"The fund may not ...

Make loans, except by purchase of debt obligations in which the
fund may invest consistent with its investment policies
(including without limitation debt obligations issued by other
Putnam funds), by entering into repurchase agreements, or by
lending its portfolio securities."

If the proposal is approved, your fund would be able to participate in

an interfund lending
program that would allow the fund, through a
master loan agreement, from time to time to lend available cash to
other Putnam funds to meet such funds' temporary or emergency
borrowing needs. By the terms of the program, a borrowing fund would
be obligated to repay a lending fund. As such, the lending fund could
be viewed in such a circumstance as effectively "purchasing" a debt
obligation of such a borrowing fund.
A fund would only make loans
under the program if it could receive an interest rate higher than
those available for repurchase agreements. There is a risk that a
fund could experience a delay in obtaining prompt repayment of a loan
and, unlike repurchase agreements, a fund would not necessarily have
received collateral for its loan. A delay in obtaining prompt payment
could cause a fund to miss an investment opportunity or to incur costs
to borrow money to replace the delayed
payment.

Since the Putnam funds may be considered affiliated parties, interfund
lending may be prohibited by the Investment Company Act of 1940 and
would be implemented only upon receipt of an exemptive order of the
Securities and Exchange Commission.

Required vote. Approval of this proposal requires the affirmative
vote of the lesser of (1) more than 50% of the outstanding Common
Shares and the outstanding Preferred Shares of the fund, each voting
as a separate class, or (2) 67% or more of the Common Shares and the
Preferred Shares of the fund, each voting as a separate class, present
at the meeting if more than 50% of the outstanding Common Shares and
the outstanding Preferred Shares, respectively, are present at the
meeting in person or by proxy. Voting by one fund does not affect
the other funds.

4. AMENDING YOUR FUND'S FUNDAMENTAL INVESTMENT POLICY WITH RESPECT
TO THE PURCHASE OF BONDS PAYING INTEREST SUBJECT TO THE FEDERAL
ALTERNATIVE MINIMUM TAX

The Trustees are recommending that shareholders approve an amendment
to the fund's fundamental policy on purchasing tax exempt securities
to eliminate a provision that limits bonds paying interest subject to
the federal Alternative Minimum Tax (the "AMT") to 20% of the fund.
At the same time the Trustees propose to adopt a non-fundamental
policy limiting AMT bonds to 40% of the fund. This new non-
fundamental policy could be changed by the Trustees without a
shareholder vote.

The Trustees are proposing the changes to increase the fund's ability
to diversify and pay an attractive level of dividends.

The fund currently has a fundamental investment policy of investing at
least 80% of its assets in "tax exempt" securities. Tax exempt
securities are those bonds on which the interest paid is excluded from
gross income for federal tax purposes. No change is proposed for this
core policy. Under federal tax law interest on certain bonds, while
excluded from gross income, is treated as a tax preference and
included in the AMT. Under the fund's current policy these bonds do
not qualify as tax exempt for the 80% test and are therefore limited
to 20% of the fund. The Trustees are recommending that shareholders
amend the policy to include AMT bonds as tax exempt for purposes of
the fundamental policy requiring the fund to invest at least 80% of
assets in tax exempt securities.

Putnam Management has advised the Trustees that AMT bonds are an
important component of certain sectors of the tax-exempt market such
as the housing, student loan and industrial development areas.
Permitting increased investment in these bonds will increase the
fund's choice of bonds in these areas and its ability to diversify its
portfolio. In addition, Putnam Management advises that AMT bonds,
under current market conditions, pay moderately higher interest rates
than non-AMT bonds of the same credit quality and duration. Based on
this advice the Trustees have concluded it would be in the best
interests of the fund to increase its ability to purchase AMT bonds.

Under federal tax law, to the extent the fund pays dividends derived
from interest on AMT Bonds shareholders subject to the AMT must
include the dividends in their AMT calculation. Thus, if the proposal
is passed shareholders subject to the AMT are likely to have increased
tax liability for fund dividends.

While the Trustees believe the changes are in the interests of the
fund and its shareholders they realize increased use of AMT bonds will
result in those shareholders subject to the AMT having to include a
greater percentage of the fund's investment income in their AMT
calculation. In order to limit the scope of the change, if the
proposal is approved, the Trustees will adopt a non-fundamental policy
of limiting AMT bonds to 40% of total assets. This policy may be
changed by the Trustees without shareholder approval in the future.

Further Information About Voting and the Meeting

Quorum and Methods of Tabulation. The shareholders of each fund vote
separately with respect to each proposal. In the case of each fund, a
majority of the shares entitled to vote -- present in person or
represented by proxy -- constitutes a quorum for the transaction of
business with respect to any proposal at the meeting (unless otherwise
noted in the proxy statement), except that where the preferred shares
or common shares shall vote as a separate class, then a majority of
the aggregate number of shares of that class shall be necessary to
constitute a quorum for the transaction of business by that class.
Shares represented by proxies that reflect abstentions and "broker
non-votes" (i.e., shares held by brokers or nominees as to which (i)
instructions have not been received from the beneficial owners or the
persons entitled to vote and (ii) the broker or nominee does not have
the discretionary voting power on a particular matter) will be counted
as shares that are present and entitled to vote on the matter for
purposes of determining the presence of a quorum. Votes cast by proxy
or in person at the meeting will be counted by persons appointed by
your fund as tellers for the meeting.

Special Rule for Proportionate Voting. In accordance with New York
Stock Exchange rules, brokerage firms may vote for or against a
proposal, on behalf of their clients who beneficially own remarketed
preferred shares and from whom they have not received voting
instructions, in the same proportion as votes for and against such
proposal have been received from holders of preferred shares if (i)
the holders of a minimum of 30% of the outstanding preferred shares
have been voted by the holders of preferred shares, (ii) holders of
less than 10% of the outstanding preferred shares have voted against
such proposal, and (iii) the holders of the common shares have
approved such proposal.

The tellers will count the total number of votes cast "for" approval
of the proposals for purposes of determining whether sufficient
affirmative votes have been cast. With respect to the election of
Trustees and selection of auditors, neither abstentions nor broker
non-votes have any effect on the outcome of the proposal. With
respect to the proposal to amend the fund's fundamental investment
restriction with respect to making loans, abstentions and broker non-
votes have the effect of a negative vote on the proposal.

Other business. The Trustees know of no other business to be brought
before the meeting. However, if any other matters properly come
before the meeting, it is their intention that proxies that do not
contain specific restrictions to the contrary will be voted on such
matters in accordance with the judgment of the persons named as
proxies in the enclosed form of proxy.

Simultaneous meetings. The meeting of shareholders of your fund is
called to be held at the same time as the meetings of shareholders of
certain of the other Putnam funds. It is anticipated that all
meetings will be held simultaneously. If any shareholder at the
meeting objects to the holding of a simultaneous meeting and moves for
an adjournment of the meeting to a time promptly after the
simultaneous meetings, the persons named as proxies will vote in favor
of such adjournment.

Solicitation of proxies. In addition to soliciting proxies by mail,
Trustees of your fund and employees of Putnam Management, Putnam
Fiduciary Trust Company, and Putnam Mutual Funds may solicit proxies
in person or by telephone. Your fund may also arrange to have votes
recorded by telephone. The telephone voting procedure is designed to
authenticate shareholders' identities, to allow shareholders to
authorize the voting of their shares in accordance with their
instructions and to confirm that their instructions have been properly
recorded. Your fund has been advised by counsel that these procedures
are consistent with the requirements of applicable law. If these
procedures were subject to a successful legal challenge, such votes
would not be counted at the meeting. Your fund is unaware of any such
challenge at this time. Shareholders would be called at the phone
number Putnam Investments has in its records for their accounts, and
would be asked for their Social Security number or other identifying
information. The shareholders would then be given an opportunity to
authorize proxies to vote their shares at the meeting in accordance
with their instructions. To ensure that the shareholders'
instructions have been recorded correctly, they will also receive a
confirmation of their instructions in the mail. A special toll-free
number will be available in case the information contained in the
confirmation is incorrect.

Your fund's Trustees have adopted a general policy of maintaining
confidentiality in the voting of proxies. Consistent with this
policy, your fund may solicit proxies from shareholders who have not
voted their shares or who have abstained from voting.

Persons holding shares as nominees will upon request be reimbursed for
their reasonable expenses in soliciting instructions from their
principals. Each fund has retained at its expense D. F. King & Co.,
Inc., 77 Water Street, New York, New York 10005, to aid in the
solicitation of instructions for registered and nominee accounts, for
the fee listed below, plus reasonable out-of-pocket expenses for
mailing and phone costs.

Putnam California Investment Grade Municipal Trust $2,500
Putnam Investment Grade Municipal Trust II $3,000
Putnam Investment Grade Municipal Trust III $2,500
Putnam New York Investment Grade Municipal
Trust $2,500

Revocation of proxies. Proxies, including proxies given by telephone,
may be revoked at any time before they are voted by a written
revocation received by the Clerk of your fund, by properly executing a
later-dated proxy or by attending the meeting and voting in person.

Date for receipt of shareholders' proposals for the next annual
meeting. It is anticipated that each fund's next annual meeting of
shareholders will be held in October 1999. Shareholder proposals must
be received by your fund before March 22, 1999, to be included in your
fund's proxy statement for the next annual meeting.

Adjournment. If sufficient votes in favor of any of the proposals set
forth in the Notice of the Meeting are not received by the time
scheduled for the meeting, the persons named as proxies may propose
adjournments of the meeting for a period or periods of not more than
60 days in the aggregate to permit further solicitation of proxies
with respect to those proposals. Any adjournment will require the
affirmative vote of a majority of the votes cast on the question in
person or by proxy at the session of the meeting to be adjourned. The
persons named as proxies will vote in favor of adjournment those
proxies which they are entitled to vote in favor of such proposals.
They will vote against adjournment those proxies required to be voted
against such proposals. Your fund pays the costs of any additional
solicitation and of any adjourned session. Any proposals for which
sufficient favorable votes have been received by the time of the
meeting may be acted upon and considered final regardless of whether
the meeting is adjourned to permit additional solicitation with
respect to any other proposal.

Financial information. Your fund will furnish to you upon request,
without charge, a copy of the fund's annual report for its most recent
fiscal year, and a copy of its semiannual report for any subsequent
semiannual period. Such requests may be directed to Putnam Investor
Services, P.O. Box 41203, Providence, RI 02940-1203 or 1-800-225-1581.

Fund Information

Limitation of Trustee liability. The Agreement and Declaration of
Trust of each fund provides that the fund will indemnify its Trustees
and officers against liabilities and expenses incurred in connection
with litigation in which they may be involved because of their offices
with the fund, except if it is determined in the manner specified in
the Agreement and Declaration of Trust that they have not acted in
good faith in the reasonable belief that their actions were in the
best interests of the fund or that such indemnification would relieve
any officer or Trustee of any liability to the fund or its
shareholders arising by reason of willful misfeasance, bad faith,
gross negligence or reckless disregard of his or her duties. Your
fund, at its expense, provides liability insurance for the benefit of
its Trustees and officers.

Audit and Nominating Committees. The voting members of the Audit
Committee of your fund include only Trustees who are not "interested
persons" of the fund by reason of any affiliation with Putnam
Investments and its affiliates. The Audit Committee currently
consists of Messrs. Estin (Chairman), Jackson, Perkins (without vote),
Putnam, III (without vote), Smith (without vote), and Ms. Kennan. The
Nominating Committee consists only of Trustees who are not "interested
persons" of your fund or Putnam Management. The Nominating Committee
currently consists of Dr. Pounds and Ms. Kennan (Co-chairpersons), Ms.
Baxter, and Messrs. Estin, Hill, Jackson, Joskow, Mullin, Patterson,
Perkins, Stephens and Thorndike.

Officers and other information. In addition to George Putnam and
Lawrence J. Lasser, the officers of each fund are as follows:

Putnam California Investment Grade Municipal Trust
Year first
elected to
Name (age) Office office
- -------------------------------------------------------------------
Charles E. Porter (59) Executive Vice President 1989
Patricia C. Flaherty (51) Senior Vice President 1993
John D. Hughes (63) Senior Vice President
& Treasurer 1989
Gordon H. Silver (51) Vice President 1990
Ian C. Ferguson (41) Vice President 1997
William J. Curtin (38) Vice President 1996
Jerome J. Jacobs (39) Vice President 1996
William H. Reeves* (54) Vice President 1995
William N. Shiebler** (56) Vice President 1991
John R. Verani (59) Vice President 1989
Beverly Marcus (54) Clerk 1989
- -------------------------------------------------------------------
* The fund's portfolio manager
** President of Putnam Mutual Funds

Putnam Investment Grade Municipal Trust II

Year first
elected to
Name (age) Office office
- -------------------------------------------------------------------
Charles E. Porter (59) Executive Vice President 1989
Patricia C. Flaherty (51) Senior Vice President 1993
John D. Hughes (63) Senior Vice President
& Treasurer 1989
Gordon H. Silver (51) Vice President 1990
Ian C. Ferguson (41) Vice President 1997
William J. Curtin (38) Vice President 1996
Jerome J. Jacobs (39) Vice President 1996
Richard P. Wyke* (42) Vice
President 1996
William N. Shiebler** (56) Vice President 1991
John R. Verani (59) Vice President 1989
Beverly Marcus (54) Clerk 1989
- -------------------------------------------------------------------
* The fund's portfolio manager
** President of Putnam Mutual Funds

Putnam Investment Grade Municipal Trust III

Year first
elected to
Name (age) Office office
- -------------------------------------------------------------------
Charles E. Porter (59) Executive Vice President 1989
Patricia C. Flaherty (51) Senior Vice President 1993
John D. Hughes (63) Senior Vice President
& Treasurer 1989
Gordon H. Silver (51) Vice President 1990
Ian C. Ferguson (41) Vice President 1997
William J. Curtin (38) Vice President 1996
Jerome J. Jacobs (39) Vice President 1996
Richard P. Wyke* (42) Vice President 1996
William N. Shiebler** (56) Vice President 1991
John R. Verani (59) Vice President 1989
Beverly Marcus (54) Clerk 1989
- -------------------------------------------------------------------
* The fund's portfolio manager
** President of Putnam Mutual Funds

Putnam New York Investment Grade Municipal Trust

Year first
elected to
Name (age) Office office
- -------------------------------------------------------------------
Charles E. Porter (59) Executive Vice President 1989
Patricia C. Flaherty (51) Senior Vice President 1993
John D. Hughes (63) Senior Vice President
& Treasurer 1989
Gordon H. Silver (51) Vice President 1990
Ian C. Ferguson (41) Vice President 1997
William J. Curtin (38) Vice President 1996
Jerome J. Jacobs (39) Vice President 1996
William N. Shiebler** (56) Vice
President 1991
John R. Verani (59) Vice President 1989
Beverly Marcus (54) Clerk 1989
- -------------------------------------------------------------------
* The fund's portfolio manager
** President of Putnam Mutual Funds

All of the officers of your fund are employees of Putnam Management or
its affiliates. Because of their positions with Putnam Management or
its affiliates or their ownership of stock of Marsh & McLennan
Companies, Inc., Messrs. Putnam, Putnam, III, Lasser and Smith
(nominees for Trustees of your fund), as well as the officers of your
fund, will benefit from the management fees, custodian fees, and
investor servicing fees paid or allowed by the fund.
Assets and shares outstanding of your fund
as of July 3, 1998

Net assets:

Putnam California Investment Grade $
Municipal Trust
Putnam Investment Grade Municipal Trust II $
Putnam Investment Grade Municipal Trust III $
Putnam New York Investment Grade $
Municipal Trust

Common shares outstanding and authorized
to vote:

Putnam California Investment Grade $
Municipal Trust
Putnam Investment Grade Municipal Trust II $
Putnam Investment Grade Municipal Trust III $
Putnam New York Investment Grade $
Municipal Trust

Preferred shares outstanding and authorized
to vote:

Putnam California Investment Grade $
Municipal Trust
Putnam Investment Grade Municipal Trust II $
Putnam Investment Grade Municipal Trust III $
Putnam New York Investment Grade $
Municipal Trust

5% beneficial ownership as of June 30, 1998 (Common shares):

Putnam California Investment Grade None
Municipal Trust
Putnam Investment Grade Municipal Trust II None
Putnam Investment Grade Municipal Trust III None
Putnam New York Investment Grade None
Municipal Trust

5% beneficial ownership as of June 30, 1998 (Preferred shares):

PUTNAMINVESTMENTS

The Putnam Funds
One Post Office Square
Boston, Massachusetts 02109
Toll-free 1-800-225-1581

PUTNAMINVESTMENTS Logo

This is your PROXY CARD.

Please vote this proxy, sign it below, and return it promptly in the
envelope provided. Your vote is important.

PUTNAM CALIFORNIA INVESTMENT GRADE MUNICIPAL TRUST

Proxy for a meeting of shareholders to be held on October 1, 1998 for
Putnam California Investment Grade Municipal Trust (Common Shares).

This proxy is solicited on behalf of the Trustees of the fund.

The undersigned shareholder hereby appoints George Putnam, Hans H.
Estin, and Robert E. Patterson, and each of them separately, Proxies,
with power of substitution, and hereby authorizes them to represent
and to vote, as designated below, at the meeting of shareholders of
Putnam California Investment Grade Municipal Trust on October 1, 1998,
at 2:00 p.m., Boston time, and at any adjournments thereof, all of the
shares of the fund that the undersigned shareholder would be entitled
to vote if personally present.

If you complete and sign the proxy, we'll vote it exactly as you tell
us. If you simply sign the proxy, it will be voted FOR fixing the
number of Trustees and electing Trustees as set forth in Proposal 1
and FOR each of the other Proposals. In their discretion, the Proxies
will also be authorized to vote upon such other matters that may
properly come before the meeting.

Note: If you have questions on any of the Proposals, please
call 1-800-225-1581.

PLEASE BE SURE TO SIGN AND DATE THIS PROXY.

Please sign your name exactly as it appears on this card. If you are
a joint owner, each owner should sign. When signing as executor,
administrator, attorney, trustee, or guardian, or as custodian for a
minor, please give your full title as such. If you are signing for a
corporation, please sign the full corporate name and indicate the
signer's office. If you are a partner, sign in the partnership name.

DEAR SHAREHOLDER:

Your vote is important. Please help us to eliminate the expense of
follow-up mailings by signing and returning this proxy as soon as
possible. A postage-paid envelope is enclosed for your convenience.

THANK YOU!

THE TRUSTEES RECOMMEND A VOTE FOR FIXING THE NUMBER OF TRUSTEES AND
ELECTING ALL OF THE NOMINEES FOR TRUSTEES AND FOR THE OTHER PROPOSALS
LISTED BELOW:

Please vote by filling in the appropriate boxes below.

1. Proposal to elect Trustees
The nominees for Trustees are: J.A. Baxter, H.H. Estin, R.J.
Jackson, P.L. Joskow, E.T. Kennan, L.J. Lasser, J.H. Mullin, D.S.
Perkins, W.F. Pounds, G. Putnam, G. Putnam, III, A.J.C. Smith,
W.T. Stephens and W.N. Thorndike.

/ / FOR fixing the number of Trustees and electing all the nominees
(except as marked to the contrary below)

To withhold authority to vote for one or more of the nominees,
write the names of the nominee(s) below:

------------------------------------------------------------

/ / WITHHOLD authority to vote for all nominees

FOR AGAINST ABSTAIN

2. Proposal to ratify / / / / / /
the selection of
PricewaterhouseCoopers LLP
as the independent
auditors of your fund.

3. Approve an amendment / / / / / /
to the fund's funda-
mental investment
restriction with
respect to making loans.

4. Approve an amendment / / / / / /
to the fund's funda-
mental policy concerning
the purchase of bonds
paying interest subject
to the federal Alternative
Minimum Tax.

- -----------------------------------------------------------------
Shareholder sign here Date

- -----------------------------------------------------------------
Co-owner sign here Date

HAS YOUR ADDRESS CHANGED?
Please use this form to notify us of any change in address or
telephone number or to provide us with your comments. Detach this
form from the proxy ballot and return it with your signed proxy in the
enclosed envelope.

Street
- -----------------------------------------------------------------

City State Zip
- -----------------------------------------------------------------

Telephone
- -----------------------------------------------------------------

DO YOU HAVE ANY COMMENTS?

- -----------------------------------------------------------------

PUTNAMINVESTMENTS Logo

This is your PROXY CARD.

Please vote this proxy, sign it below, and return it promptly in the
envelope provided. Your vote is important.

PUTNAM CALIFORNIA INVESTMENT GRADE MUNICIPAL TRUST

Proxy for a meeting of shareholders to be held on October 1, 1998 for
Putnam California Investment Grade Municipal Trust (Preferred Shares).

This proxy is solicited on behalf of the Trustees of the fund.

Note: If you have questions on any of the Proposals, please
call 1-800-225-1581.

PLEASE BE SURE TO SIGN AND DATE THIS PROXY.

DEAR SHAREHOLDER:

THANK YOU!

THE TRUSTEES RECOMMEND A VOTE FOR FIXING THE NUMBER OF TRUSTEES AND
ELECTING ALL OF THE NOMINEES FOR TRUSTEES AND FOR THE OTHER PROPOSALS
LISTED BELOW:

Please vote by filling in the appropriate boxes below.

1. Proposal to elect Trustees
The nominees for Trustees are: J.A. Baxter, H.H. Estin, J.A.
Hill, R.J. Jackson, P.L. Joskow, E.T. Kennan, L.J. Lasser, J.H.
Mullin, R.E. Patterson, D.S. Perkins, W.F. Pounds, G. Putnam, G.
Putnam, III, A.J.C. Smith, W.T. Stephens and W.N. Thorndike.