Supplement, dated March 25, 2009 to the
Statement of Additional Information, dated May 1, 2008, of
Seligman High Income Fund Series (the "Series"),
on behalf of each of
Seligman High-Yield Fund and Seligman U.S. Government Securities Fund
(each, a Fund and collectively, the "Funds")

Effective March 25, 2009, this supplement to the Series' Statement of
Additional Information ("SAI") supersedes and replaces the supplement to the
SAI dated November 25, 2008. Effective immediately, John G. McColley is a
portfolio manager of Seligman U.S. Government Securities Fund, and Jamie
Jackson no longer serves as a portfolio manager for that Fund. Other than
changes to the information under the caption "Portfolio Managers", the changes
set forth herein are substantially identical to those set forth in the
supplement dated November 25, 2008.

On November 7, 2008, RiverSource Investments, LLC ("RiverSource Investments"),
a wholly owned subsidiary of Ameriprise Financial, Inc., announced the closing
of its acquisition (the "Acquisition") of J. & W. Seligman & Co. Incorporated.
With the Acquisition completed and shareholders of the Fund having previously
approved (at a Special Meeting held on November 3, 2008) a new investment
management services agreement between the Series (on behalf of the Fund) and
RiverSource Investments, RiverSource Investments is the new investment manager
of the Fund effective November 7, 2008. In connection with the Acquisition,
each Fund's portfolio managers have been changed. This change also results in
modification to the investment process used for each Fund. The foregoing
changes are reflected in the Supplements, dated November 7, 2008, to each
Fund's respective prospectuses.

Effective November 7, 2008, the following changes are hereby made to the Fund's
SAI. Capitalized terms used but not defined in this Supplement shall have the
meanings given to such terms in the Fund's SAI.

The following information is added under the caption "Fund History":

As of November 7, 2008, the Series and the Funds are part of the RiverSource
complex of funds. The RiverSource complex of funds includes a comprehensive
array of funds managed by RiverSource Investments, LLC ("RiverSource
Investments"), including the Funds and the other Seligman Mutual Funds.
RiverSource Investments has also partnered with a number of professional
investment managers, including its affiliate, Threadneedle Investments
("Threadneedle"), to expand the array of funds offered in the RiverSource
complex. RiverSource funds, RiverSource Partners funds and Threadneedle funds
share the same Board of Directors/Trustees (the Board) and the same policies
and procedures. Although the Seligman funds share the same Board, they do not
currently have the same policies and procedures, as set forth in the Funds'
respective prospectuses, and may not be exchanged for shares of the RiverSource
funds, RiverSource Partners funds or Threadneedle funds.

The first two paragraphs under the caption "Description of the Fund and Its
Investments and Risks - Options and Other Derivatives " are hereby superseded
and replaced with the following:

Options and Other Derivatives. The Funds may invest in certain derivatives
instruments described below for hedging, cash management or investment
purposes. Generally, derivatives may be employed when the investment manager
believes they will provide an effective means of managing risk or portfolio
characteristics. These instruments are described below. To the extent the Funds
engage in the derivatives described below, there can be no assurance that such
derivatives will achieve their intended benefits, and the Funds may lose money
as a result of such use.

The information under the captions "Description of the Fund and Its Investments
and Risks - Investment Strategies and Risks - Interest Rate Futures", " -
Currency Futures" and " - Options on Interest Rate Futures and Currency
Futures" is hereby superseded and replaced with the following:

Futures Contracts. The Funds may utilize interest rate futures, currency
futures and the U.S. Government Securities Fund may also utilize treasury
futures. Futures contracts, which trade on a securities exchange, are
standardized as to quantity, delivery date and settlement conditions, including
specific securities acceptable for delivery against the futures contract. An
interest rate futures contract is an agreement to buy or sell a debt security
at a specific date in the future. A currency futures contract is a standardized
contract for the future delivery of a specified amount of a foreign currency at
a future date at a price set at the time of the contract. A treasury futures
contract is an agreement to buy or sell a specified amount of a specific
security issued by the U.S. Treasury for a specified price at a designated date
and time in the future. In the case of index futures, settlement is made in
cash based on the value of a specified underlying index. More commonly, futures
contracts are closed out prior to expiration by an offsetting purchase or sale.
Since the counterparty to every futures contact is a securities exchange,
offsetting transactions are netted to close out positions. The Funds may incur
a loss if the closing transaction occurs at an unfavorable price as compared
with that of the opening trade (including transaction costs). There can be no
assurance that the Funds will be able to enter into an offsetting transaction
with respect to a particular contract at a particular time. If the Funds are
not able to enter into an offsetting transaction, the Funds will continue to be
required to maintain the position, including the maintenance of margins, which
could result in the Funds incurring substantial losses.

Margin deposits must be made at the time a futures contract position is
acquired. The Funds are required to deposit in a segregated account, typically
with its custodian, in the name of the futures broker through whom the
transaction was effected, "initial margin" consisting of cash and/or other
appropriate liquid assets in an amount generally equal to 10% or less of the
contract value. Margin must also be deposited when writing a call or put option
on a futures contract, in accordance with applicable exchange rules. Initial
margin on futures contracts is returned to a Fund at the termination of the
transaction if all contractual obligations have been satisfied. Under certain
circumstances, such as periods of high volatility, the Funds may be required by
a securities exchange to increase the level of its initial margin payment, and
initial margin requirements might be increased generally in the future by
regulatory action.

Subsequent "variation margin" payments are made daily to and from the futures
broker as the value of the futures position varies, a process known as
"marking-to-market." When the Funds purchase or sell futures contracts, it is
subject to daily variation margin calls that could be substantial in the event
of adverse price movements. If the Funds have insufficient cash to meet daily
variation margin requirements, it might need to sell securities at a time when
such sales are disadvantageous. Purchasers and sellers of futures positions can
enter into offsetting closing transactions by selling or purchasing,
respectively, an instrument identical to the instrument held or written. Under
certain circumstances, exchanges upon which futures contracts trade may
establish daily limits on the amount that the price of a future contract can
vary from the previous day's settlement price; once that limit is reached, no
trades may be made that day at a price beyond the limit. Daily price limits do
not limit potential losses because prices could move to the daily limit for
several consecutive days with little or no trading, thereby preventing
liquidation of unfavorable positions.

If a Fund were unable to liquidate a futures contract position, it could incur
substantial losses. The Funds would continue to be subject to market risk with
respect to the position. In addition, the Funds would continue to be required
to make daily variation margin payments and might be required to maintain the
position being hedged by the futures contract or to designate liquid assets on
its books and records.

Certain characteristics of the futures markets might increase the risk that
movements in the prices of futures contracts might not correlate perfectly with
movements in the prices of the investments being hedged. For example, all
participants in the futures contracts markets are subject to daily variation
margin calls and might be compelled to liquidate futures contracts positions
whose prices are moving unfavorably to avoid being subject to further calls.
These liquidations could increase price volatility of the instruments and
distort the normal price relationship between the futures or options and the
investments being hedged. Also, since initial margin deposit requirements in
the futures markets are less onerous than margin requirements in the securities
markets, there might be increased participation by speculators in the futures
markets. This participation also might cause temporary price distortions. In
addition, activities of large traders in both the futures and securities
markets involving arbitrage, "program trading" and other investment strategies
might result in temporary price distortions.

Interest rate futures contracts (and options on such contracts) are traded in
an auction environment on the floors of several exchanges--principally, the
Chicago Board of Trade, the Chicago Mercantile Exchange and the New York
Futures Exchange. The Funds would deal only in standardized contracts on
recognized exchanges. Each exchange guarantees performance under contract
provisions through a clearing corporation, a nonprofit organization managed by
the exchange membership. The Funds may invest in futures contracts traded on US
and non-US exchanges.

At the maturity of a futures contract, the Funds may either accept or make
delivery of the currency or security specified in the contract or, prior to
maturity, enter into a closing transaction involving the purchase or sale of an
offsetting contract. A Fund will only enter into a futures contract if it is
expected that the Fund will readily be able to close out such contract. There
can, however, be no assurance that it will be able to do so in any particular
case, in which case the Funds may suffer losses in the event of adverse price
movements.

The Funds may, for example, use currency futures to hedge the currency exposure
of non-US dollar denominated debt instrument holdings, or for investment
purposes to take an interest rate view based on currency valuations.

Options on Futures. The Funds may utilize options on both interest rate futures
and currency futures, and the U.S. Government Securities Fund may also utilize
options on treasury futures (collectively, "options on futures"). Options on
futures are effectively options on the asset that underlies a futures contract.
A call option on a futures contract gives the holder the right to enter into a
long futures contract at a fixed futures price. A put option on a futures
contract gives the holder the right to enter into a short futures contract at a
fixed futures price.

Purchasers and sellers of options on futures can enter into offsetting closing
transactions by selling or purchasing, respectively, an offsetting option on
the same futures contract. There is risk to that the Funds may have difficulty
in closing out positions in options on futures. Although the Funds intend to
close out any positions on a securities market, there can be no assurance that
such a market will exist for a particular contract at a particular time.

Under certain circumstances, exchanges upon which futures are traded may
establish daily limits on the amount that the price of an option on a futures
contract can vary from the previous day's settlement price. Once that limit is
reached, no trades may be made that day at a price beyond the limit. Daily
price limits do not limit potential losses because prices could move to the
daily limit for several consecutive days with little or no trading, thereby
preventing liquidation of unfavorable positions held by the Funds.

Options on futures held by the Funds, to the extent not exercised, will expire
and the Funds would experience a loss to the extent of any premium paid for the
option. If the Funds were unable to liquidate an option on a futures contract
position due to the absence of a liquid secondary market or the imposition of
price limits, it could incur substantial losses. The Funds would continue to be
subject to market risk with respect to the position.

Certain characteristics of the futures market might increase the risk that
movements in the prices of options on futures contracts might not correlate
perfectly with movements in the prices of any exposure being hedged. For
example, all participants in the options on futures markets are subject to
daily variation margin calls and might be compelled to liquidate options on
futures positions whose prices are moving unfavorably to avoid being subject to
further calls. These liquidations could increase price volatility of the
instruments and distort the normal price relationship between the futures or
options and the investments being hedged. Also, because initial margin deposit
requirements in the futures markets are less onerous than margin requirements
in the securities markets, there might be increased participation by
speculators in the futures markets. This participation also might cause
temporary price distortions. In addition, activities of traders in both the
futures and securities markets involving arbitrage, "program trading" and other
investment strategies might result in temporary price distortions.

The following information is hereby added under the caption "Description of the
Fund and Its Investments and Risks - Investment Strategies and Risks":

Funding Agreements. The High-Yield Fund may invest in funding agreements issued
by domestic insurance companies. Funding agreements are short-term, privately
placed, debt obligations of insurance companies that offer a fixed- or
floating-rate of interest. These investments are not readily marketable and
therefore are considered to be illiquid securities. The largest risks
associated with funding agreements include credit risk and liquidity risk.

The information under the caption "Management of the Fund - Management
Information" is hereby superseded and replaced with the following information:

Shareholders elect a Board that oversees the Funds' operations. The Board
appoints officers who are responsible for day-to-day business decisions based
on policies set by the Board.

On November 7, 2008, RiverSource Investments announced the closing of its
acquisition (the "Acquisition") of J. & W. Seligman & Co. Incorporated
("Seligman"), 100 Park Avenue, New York, New York 10017. With the Acquisition
completed and shareholders having previously elected (at a Special Meeting held
on November 3, 2008) ten new trustees (collectively, the "New Board Members"),
the New Board Members took office on November 7, 2008. The New Board Members
are: Kathleen Blatz, Arne H. Carlson, Pamela G. Carlton, Patricia M. Flynn,
Anne P. Jones,

Jeffrey Laikind, Stephen R. Lewis, Jr., Catherine James Paglia, Alison
Taunton-Rigby and William F. Truscott. Messrs. Leroy C. Richie and John F.
Maher, who were members of the Board prior to November 7, 2008, will continue
to serve on the Board after the Acquisition, which would result in an overall
increase from ten trustees to 12 trustees.

Information with respect to the members of the Board is shown below. Each
member oversees 163 portfolios in the fund complex managed by RiverSource
Investments, which includes 59 Seligman Funds and 104 RiverSource Funds. Board
members serve until the next regular shareholders' meeting or until he or she
reaches the mandatory retirement age established by the Board. Under the
current Board policy, members may serve until the end of the meeting following
their 75th birthday, or the fifteenth anniversary of the first Board meeting
they attended as members of the Board, whichever occurs first. This policy does
not apply to Ms. Jones who may retire after her 75th birthday.

Independent Board Members

Position with Fund and Principal Occupation
Name, Address, Age Length of Time Served During Last Five Years Other Directorships Committee Memberships
- ------------------ ---------------------- ------------------------- ------------------------- ----------------------

Kathleen Blatz Board member since Attorney; Chief Justice, None Board Governance,
901 S. Marquette Ave. November 7, 2008 Minnesota Supreme Compliance,
Minneapolis, MN 55402 Court, 1998-2006 Investment Review,
Age 54 Joint Audit

Arne H. Carlson Board member since Chair, RiverSource None Board Governance,
901 S. Marquette Ave. November 7, 2008 Funds, 1999-2006; Compliance,
Minneapolis, MN 55402 former Governor of Contracts, Executive,
Age 73 Minnesota Investment Review

Pamela G. Carlton Board member since President, Springboard- None Distribution,
901 S. Marquette Ave. November 7, 2008 Partners in Cross Investment Review,
Minneapolis, MN 55402 Cultural Leadership Joint Audit
Age 53 (consulting
company)

Patricia M. Flynn Board member since Trustee Professor of None Board Governance,
901 S. Marquette Ave. November 7, 2008 Economics and Contracts, Investment
Minneapolis, MN 55402 Management, Bentley Review
Age 57 College; Former Dean,
McCallum Graduate
School of Business,
Bentley College

Anne P. Jones Board member since Attorney and None Board Governance,
901 S. Marquette Ave. November 7, 2008 Consultant Compliance,
Minneapolis, MN 55402 Executive, Investment
Age 73 Review, Joint Audit

Jeffrey Laikind, CFA Board member since Former Managing American Progressive Distribution,
901 S. Marquette Ave. November 7, 2008 Director, Shikiar Asset Insurance Investment Review,
Minneapolis, MN 55402 Management Joint Audit
Age 72

Stephen R. Lewis, Jr. Board member since President Emeritus and Valmont Industries, Inc. Board Governance,
901 S. Marquette Ave. November 7, 2008 Professor of (manufactures irrigation Compliance,
Minneapolis, MN 55402 Economics, Carleton systems) Contracts, Executive,
Age 69 College Investment Review

Independent Board Members

John F. Maher Board member since Retired President and None Distribution, Investment
901 S. Marquette Ave. 2006 Chief Executive Officer Review, Joint Audit
Minneapolis, MN 55402 and former Director,
Age 64 Great Western Financial
Corporation (bank
holding company) and
its principal subsidiary,
Great Western Bank
(federal savings bank)

Catherine James Paglia Board member since Director, Enterprise None Compliance,
901 S. Marquette Ave. November 7, 2008 Asset Management, Inc. Contracts,
Minneapolis, MN 55402 (private real estate and Distribution,
Age 55 asset management Executive, Investment
company) Review

Leroy C. Richie Board member since Counsel, Lewis & Lead Outside Director, Contracts, Distribution,
901 S. Marquette Ave. 2000 Munday, P.C. (law Digital Ally, Inc. Investment Review
Minneapolis, MN 55402 firm); Director, (digital imaging); and
Age 66 Vibration Control Infinity, Inc. (oil and
Technologies, LLC gas exploration and
(auto vibration production); Director,
technology); Director OGE Energy Corp.
and Chairman, (energy and energy
Highland Park services provider
Michigan Economic offering physical
Development Corp; and delivery and related
Chairman, Detroit services for both
Public Schools electricity and natural
Foundation. Formerly, gas).
Chairman and Chief
Executive Officer, Q
Standards Worldwide,
Inc. (library of technical
standards); Director,
Kerr-McGee
Corporation (diversified
energy and chemical
company); Trustee,
New York University
Law Center Foundation;
Vice Chairman, Detroit
Medical Center and
Detroit Economic
Growth Corp.

Alison Taunton-Rigby Board member since Chief Executive Officer Idera Pharmaceuticals, Contracts,
901 S. Marquette Ave. November 7, 2008 and Director, Inc. (biotechnology); Distribution,
Minneapolis, MN 55402 RiboNovix, Inc. since Healthways, Inc. (health Executive, Investment
Age 64 2003 (biotechnology); management programs) Review
former President,
Forester Biotech

Board Member Affiliated With RiverSource Investments*

William F. Truscott Board member and President - U.S. Asset None Investment Review
53600 Ameriprise Vice President since Management and Chief
Financial Center 2008 Investment Officer,
Minneapolis, MN 55474 Ameriprise Financial,
Age 47 Inc. and President,
Chairman of the Board
and Chief Investment
Officer, RiverSource
Investments, LLC since
2005; Director,
President and Chief
Executive Officer,
Ameriprise Certificate
Company and;
Chairman of the Board,
Chief Executive Officer
and President,
RiverSource
Distributors, Inc. since
2006; Senior Vice
President - Chief
Investment Officer,
Ameriprise Financial,
Inc.; and Chairman of
the Board and Chief
Investment Officer,
RiverSource
Investments, LLC,
2001-2005

*Interestedperson by reason of being an officer, director, security holder
and/or employee of RiverSource Investments.

The Board has appointed officers who are responsible for day-to-day business
decisions based on policies it has established. The officers serve at the
pleasure of the Board. In addition to Mr. Truscott, who is Vice President, the
other officers are:

Fund Officers

Position held
with the Fund and Principal occupation
Name, address, age length of service during past five years
- ------------------ -------------------------------------- -------------------------------------------

Patrick T. Bannigan President since November 7, 2008 Director and Senior Vice President -
172 Ameriprise Financial Center Asset Management, Products and
Minneapolis, MN 55474 Marketing, RiverSource Investments,
Age 42 LLC and; Director and Vice President -
Asset Management, Products and
Marketing, RiverSource Distributors, Inc.
since 2006; Managing Director and
Global Head of Product, Morgan Stanley
Investment Management, 2004-2006;
President, Touchstone Investments, 2002-
2004

Michelle M. Keeley Vice President since November 7, 2008 Executive Vice President - Equity and
172 Ameriprise Financial Center Fixed Income, Ameriprise Financial, Inc.
Minneapolis, MN 55474 and RiverSource Investments, LLC since
Age 44 2006; Vice President - Investments,
Ameriprise Certificate Company since
2003; Senior Vice President - Fixed
Income, Ameriprise Financial, Inc., 2002-
2006 and RiverSource Investments, LLC,
2004-2006

Amy K. Johnson Vice President since November 7, 2008 Vice President - Asset Management and
5228 Ameriprise Financial Center Trust Company Services, RiverSource
Minneapolis, MN 55474 Investments, LLC since 2006; Vice
Age 42 President - Operations and Compliance,
RiverSource Investments, LLC, 2004-
2006; Director of Product Development -
Mutual Funds, Ameriprise Financial, Inc.,
2001-2004

Scott R. Plummer Vice President, General Counsel and Vice President and Chief Counsel - Asset
5228 Ameriprise Financial Center Secretary since November 7, 2008 Management, Ameriprise Financial, Inc.
Minneapolis, MN 55474 since 2005; Chief Counsel, RiverSource
Age 49 Distributors, Inc. and Chief Legal Officer
and Assistant Secretary, RiverSource
Investments, LLC since 2006; Vice
President, General Counsel and Secretary,
Ameriprise Certificate Company since
2005; Vice President - Asset
Management Compliance, Ameriprise
Financial, Inc., 2004-2005; Senior Vice
President and Chief Compliance Officer,
USBancorp Asset Management, 2002-
2004

Fund Officers

Lawrence P. Vogel Treasurer since 2000 Treasurer, RiverSource Investments, LLC
100 Park Avenue, (J. & W. Seligman & Co. Incorporated
New York, NY 10017 prior to Nov. 2008), of each of the
Age 51 investment companies of the Seligman
Group of Funds since 2000; and
Treasurer, Seligman Data Corp. since
2000. Senior Vice President, Investment
Companies, J. & W. Seligman & Co.
Incorporated of each of the investment
companies of the Seligman group of
funds 1992 to 2008.

Eleanor T.M. Hoagland Chief Compliance Officer since 2004; Chief Compliance Officer, RiverSource
100 Park Avenue, Money Laundering Prevention Officer Investments, LLC (J. & W. Seligman &
New York, NY 10017 and Identity Theft Prevention Officer Co. Incorporated prior to Nov. 2008), for
Age 56 since 2008. each of the investment companies of the
Seligman group of funds since 2004;
Money Laundering Prevention Officer
and Identity Theft Prevention Officer,
RiverSource Investments, LLC for each
of the investment companies of the
Seligman group of funds since November
2008. Managing Director, J. & W.
Seligman & Co. Incorporated and Vice-
President for each of the investment
companies of the Seligman group of
funds 2004 to 2008.

As of November 7, 2008, the Board has organized the following committees
(accordingly, no committee meetings have been held prior to such date):

Board Governance Committee. Recommends to the Board the size, structure and
composition of the Board and its committees; the compensation to be paid to
members of the Board; and a process for evaluating the Board's performance. The
committee also reviews candidates for Board membership including candidates
recommended by shareholders. The committee also makes recommendations to the
Board regarding responsibilities and duties of the Board, oversees proxy voting
and supports the work of the chairperson of the Board in relation to furthering
the interests of the Fund and their shareholders on external matters.

Compliance Committee. This committee supports the Fund's maintenance of a
strong compliance program by providing a forum for independent Board members to
consider compliance matters impacting the Fund or its key service providers;
developing and implementing, in coordination with the Fund's Chief Compliance
Officer (CCO), a process for the review and consideration of compliance reports
that are provided to the Board; and providing a designated forum for the Fund's
CCO to meet with independent Board members on a regular basis to discuss
compliance matters.

Contracts Committee. This committee reviews and oversees the contractual
relationships with service providers and receives and analyzes reports covering
the level and quality of services provided under contracts with the Fund. It
also advises the Board regarding actions taken on these contracts during the
annual review process.

Distribution Committee. This committee reviews and supports product
development, marketing, sales activity and practices related to the Fund, and
reports to the Board as appropriate.

Executive Committee. This committee acts for the Board between meetings of the
Board.

Investment Review Committee. This committee reviews and oversees the management
of the Fund's assets and considers investment management policies and
strategies; investment performance; risk management techniques; and securities
trading practices and reports areas of concern to the Board.

Joint Audit Committee. This committee oversees the accounting and financial
reporting processes of the Fund and internal controls over financial reporting
and oversees the quality and integrity of the Fund's financial statements and
independent audits as well as the Fund's compliance with legal and regulatory
requirements relating to the Fund's accounting and financial reporting,
internal controls over financial reporting and independent audits. The
committee also makes recommendations regarding the selection of the Fund's
independent auditor and reviews and evaluates the qualifications, independence
and performance of the auditor.

The information under the caption "Management of the Fund - Beneficial
Ownership" is hereby superseded and replaced with the following information:

The Trustees beneficially owned shares in each of the Funds and the RiverSource
complex of funds (which includes the Seligman Funds) as follows (information as
of June 30, 2008 unless otherwise indicated):

Aggregate Dollar Range of Shares
Dollar Range of Shares Owned By Owned by Trustee in the
Name Trustee in each Fund RiverSource Complex of Funds*
- ----------------------- --------------------------------- --------------------------------

INDEPENDENT BOARD MEMBERS
Kathleen Blatz None Over $100,000
Arne H. Carlson None Over $100,000
Pamela G. Carlton None $1-$10,000
Patricia M. Flynn None Over $100,000**
Anne P. Jones None Over $100,000
Jeffrey Laikind None Over $100,000
Stephen R. Lewis, Jr. None Over $100,000**
John F. Maher High-Yield Fund: $1-$10,000 Over $100,000
U.S. Government Fund: $1-$10,000
Catherine James Paglia None Over $100,000**
Leroy C. Richie High-Yield Fund: $1-$10,000 Over $100,000
U.S. Government Fund: $1-$10,000
Alison Taunton-Rigby None Over $100,000

AFFILIATED BOARD MEMBERS
William F. Truscott None Over $100,000

* Each new Board Member, other than Ms. Flynn, owns between $1 and $10,000 of
shares in the Seligman Funds. Ms. Flynn owns between $10,001 and $50,000 of
shares in the Seligman Funds. Each New Board Member acquired their shares in
the Seligman Funds after June 30, 2008. Neither of Messrs. Maher or Richie
owns any shares of the RiverSource Funds.

** Total includes deferred compensation invested in share equivalents.

The following information is added to the table under the caption "Management
of the Fund - Compensation":

None of the New Board Members received any compensation from the Fund prior to
their election to the Board.

The information beneath the compensation table under the caption "Management of
the Fund - Compensation" is hereby superseded and replaced with the following
information:

The independent Board members determine the amount of compensation that they
receive, including the amount paid to the Chair of the Board. In determining
compensation for the independent Board members, the independent Board members
take into account a variety of factors including, among other things, their
collective significant work experience (e.g., in business and finance,
government or academia). The independent Board members also recognize

that these individuals' advice and counsel are in demand by other
organizations, that these individuals may reject other opportunities because
the time demands of their duties as independent Board members, and that they
undertake significant legal responsibilities. The independent Board members
also consider the compensation paid to independent board members of other
mutual fund complexes of comparable size. In determining the compensation paid
to the Chair, the independent Board members take into account, among other
things, the Chair's significant additional responsibilities (e.g., setting the
agenda for Board meetings, communicating or meeting regularly with the Fund's
Chief Compliance Officer, Counsel to the independent Board members, and the
Funds' service providers) which result in a significantly greater time
commitment required of the Board Chair. The Chair's compensation, therefore,
has generally been set at a level between 2.5 and 3 times the level of
compensation paid to other independent Board members.

The independent Board members are paid an annual retainer of $95,000. Committee
and sub- committee Chairs each receive an additional annual retainer of $5,000.
In addition, independent Board members are paid the following fees for
attending Board and committee meetings: $5,000 per day of in-person Board
meetings and $2,500 per day of in-person committee or sub-committee meetings
(if such meetings are not held on the same day as a Board meeting). Independent
Board members are not paid for special telephonic meetings. The Board's Chair
will receive total annual cash compensation of $400,000.

The independent Board members may elect to defer payment of up to 100% of the
compensation they receive in accordance with a Deferred Compensation Plan (the
"Deferred Plan"). Under the Deferred Plan, a Board member may elect to have his
or her deferred compensation treated as if they had been invested in shares of
one or more RiverSource funds and the amount paid to the Board member under the
Deferred Plan will be determined based on the performance of such investments.
Distributions may be taken in a lump sum or over a period of years. The
Deferred Plan will remain unfunded for federal income tax purposes under the
Internal Revenue Code of 1986, as amended. It is anticipated that deferral of
Board member compensation in accordance with the Deferred Plan will have, at
most, a negligible impact on Fund assets and liabilities.

The information under the caption "Management of the Fund - Code of Ethics" is
hereby superseded and replaced with the following information:

The funds in the RiverSource complex of funds (which includes the Seligman
Funds), RiverSource Investments, the investment manager for the Seligman Funds,
and Seligman Advisors, the distributor for the Seligman Funds, have each
adopted a Code of Ethics (collectively, the "Codes") and related procedures
reasonably designed to prevent violations of Rule 204A-1 under the Investment
Advisers Act of 1940 and Rule 17j-1 under the 1940 Act. The Codes contain
provisions reasonably necessary to prevent a fund's access persons from
engaging in any conduct prohibited by paragraph (b) of Rule 17j-1, which
indicates that it is unlawful for any affiliated person of or principal
underwriter for a fund, or any affiliated person of an investment adviser of or
principal underwriter for a fund, in connection with the purchase or sale,
directly or indirectly, by the person of a security held or to be acquired by a
fund (i) to employ any device, scheme or artifice to defraud a fund; (ii) to
make any untrue statement of a material fact to a fund or omit to state a
material fact necessary in order to make the statements made to a fund, in
light of the circumstances under which they are made, not misleading; (iii) to
engage in any act, practice or course of business that operates or would
operate as a fraud or deceit on a fund; or (iv) to engage in any manipulative
practice with respect to a fund. The Codes prohibit affiliated personnel from
engaging in personal investment activities that compete with or attempt to take
advantage of planned portfolio transactions for the fund.

All references to "Seligman" under the caption "Management of the Fund - Proxy
Voting Policies" are hereby replaced with "RiverSource Investments." In
addition, the following information is added as the first full paragraph under
that caption:

The following are interim proxy voting policies, procedures and guidelines that
apply only to the Fund and the other Seligman Funds. The Seligman Funds will
adopt the same proxy voting policies, procedures and guidelines as the other
funds managed by RiverSource Investments in 2009.

The seventh and eight paragraphs under the caption "Management of the Fund -
Proxy Voting Policies" are hereby superseded and replaced with the following:

Deviations from Guidelines and Special Situations. RiverSource Investments
recognizes that it may not always be in the best interest of the shareholders
of the Fund to vote in accordance with the Guidelines on a particular issue. In
such circumstances, RiverSource Investments may request permission from the
Board to deviate from the Guidelines. The Board must approve any deviation from
the Guidelines, and similarly, must approve the voting decision for proposals
of a unique nature requiring a case-by-case analysis.

In making requests to the Board regarding deviations from the Guidelines or
proposals requiring a case-by-case analysis, RiverSource Investments may rely
on views of the management of a portfolio company, the views of its own
investment professionals and information obtained from an independent research
firm.

The second item under the caption "Management of the Fund - Proxy Voting
Policies - Guidelines Summary" is hereby superseded and replaced with the
following.:

2. RiverSource Investments generally opposes, and supports the elimination of,
anti-takeover proposals, including those relating to classified Boards,
supermajority votes, issuance of blank check preferred and establishment of
classes with disparate voting rights. However, RiverSource Investments will
vote in support of proposals to adopt poison pills.

The first three paragraphs under the caption "Investment Advisory and Other
Services - Investment Manager" are hereby superseded and replaced with the
following:

With the completion of the Acquisition of Seligman by RiverSource Investments
and with shareholders having previously approved (at a Special Meeting held on
November 3, 2008) a new investment management services agreement between the
Series and RiverSource Investments (the "Management Agreement"), RiverSource
Investments is the new investment manager effective November 7, 2008.

RiverSource Investments, 200 Ameriprise Financial Center, Minneapolis,
Minnesota 55474, is also the investment manager of the other funds in the
Seligman Group of Funds, and is a wholly-owned subsidiary of Ameriprise
Financial. Ameriprise Financial is a financial planning and financial services
company that has been offering solutions for clients' asset accumulation,
income management and protection needs for more than 110 years. In addition to
managing investments for the Seligman Group of Funds, RiverSource Investments
manages investments for the RiverSource funds, itself and its affiliates. For
institutional clients, RiverSource Investments and its affiliates provide
investment management and related services, such as separate account asset
management, and institutional trust and custody, as well as other investment
products.

Effective November 7, 2008, each Fund will pay RiverSource Investments a fee
for managing its assets. The fees paid to RiverSource Investments will be the
same annual fee rates that were paid to Seligman prior to November 7, 2008.

The information contained under the caption "Portfolio Managers" is superseded
and replaced with the following:

The following tables set forth certain additional information from that
discussed in the Prospectuses with respect to the portfolio manager of each
Fund. Unless noted otherwise, all information is provided as of September 30,
2008.

Other Accounts Managed by Portfolio Managers. Table A below identifies, for
each of the portfolio managers of the High-Yield Fund and the U.S. Government
Securities Fund, the number of accounts managed (other than the Fund managed by
its portfolio manager) and the total assets in such accounts, within each of
the following categories: registered investment companies, other pooled
investment vehicles, and other accounts. Table B identifies those accounts that
have an advisory fee based on the performance of the account. For purposes of
the tables below, each series or portfolio of a registered investment company
is treated as a separate registered investment company.

Table A

Seligman High Yield Fund

Registered Investment Other Pooled Investment
Portfolio Manager Companies Vehicles Other Accounts
- ----------------- ------------------------ ----------------------- --------------

Scott Schroepfer 5 Registered Investment None None
Companies with
approximately $2.2
billion in total assets
under management.

Seligman U.S. Government Securities Fund

Registered Investment Other Pooled Investment
Portfolio Manager Companies Vehicles Other Accounts
- ----------------- ------------------------------- -------------------------- -------------------------------

Todd White /(1)/ 12 Registered Investment 5 Other Pooled Investment 40 Other Accounts with
Companies with Vehicles with approximately $16.0 billion in
approximately $10.5 billion in approximately $1.7 total assets under
total assets under billion in total assets management.
management. under management.

John G. McColley /(1)/ None None None

Table B

Seligman High Yield Fund

Mr. Schroepfer manages no other accounts that pay an advisory fee based on the
performance of the account.

Seligman U.S. Government Securities Fund

Registered Investment Other Pooled Investment
Portfolio Manager Companies Vehicles Other Accounts
- ----------------- ------------------------ ----------------------- -----------------------------

Todd White /(1)/ 3 Registered Investment None 1 Other Account with
Companies with approximately $113.3 million
approximately $1.01 in total assets under
billion in total assets management.
under management.

John G. McColley /(1)/ None None None

(1) Information provided as of January 31, 2009.

Compensation/Material Conflicts of Interest. Set forth below is an explanation
of the structure of, and method(s) used to determine portfolio manager
compensation. Also set forth below is an explanation of material conflicts of
interest that may arise between a portfolio manager's management of the Funds'
investments and investments in other accounts.

Compensation:

Portfolio manager compensation is typically comprised of (i) a base salary,
(ii) an annual cash bonus, a portion of which may be subject to a mandatory
deferral program, and may include (iii) an equity incentive award in the form
of stock options and/or restricted stock. The annual bonus is paid from a team
bonus pool that is based on the performance of the accounts managed by the
portfolio management team, which might include mutual funds, wrap accounts,
institutional portfolios and hedge funds. Funding for the bonus pool for fixed
income portfolio managers is determined by the aggregate market competitive
bonus targets for the teams of which the portfolio manager is a member and by
the short-term (typically one-year) and long-term (typically three-year)
performance of those accounts in relation to applicable benchmarks or the
relevant peer group universe. With respect to hedge funds and separately
managed accounts that follow a hedge fund mandate, funding for the bonus pool
is a percentage of performance fees earned on the hedge funds or accounts
managed by the portfolio managers.

Senior management of RiverSource Investments has the discretion to increase or
decrease the size of the part of the bonus pool and to determine the exact
amount of each portfolio manager's bonus paid from this portion of the bonus
pool based on his/her performance as an employee. In addition, where portfolio
managers invest in a hedge fund managed by the investment manager, they receive
a cash reimbursement for the investment management fees charged on their hedge
fund investments.

RiverSource Investments portfolio managers are provided with a benefits
package, including life insurance, health insurance, and participation in a
company 401(k) plan, comparable to that received by other RiverSource
Investments employees. Certain investment personnel are also eligible to defer
a portion of their compensation. An individual making this type of election can

allocate the deferral to the returns associated with one or more products they
manage or support or to certain other products managed by their investment
team. Depending upon their job level, RiverSource Investments portfolio
managers may also be eligible for other benefits or perquisites that are
available to all RiverSource Investments employees at the same job level.

Conflicts of Interest:

RiverSource Investments portfolio managers may manage one or more mutual funds
as well as other types of accounts, including hedge funds, proprietary
accounts, separate accounts for institutions and individuals, and other pooled
investment vehicles. Portfolio managers make investment decisions for an
account or portfolio based on its investment objectives and policies, and other
relevant investment considerations. A portfolio manager may manage another
account whose fees may be materially greater than the management fees paid by
the Fund and may include a performance based fee. Management of multiple funds
and accounts may create potential conflicts of interest relating to the
allocation of investment opportunities, competing investment decisions made for
different accounts and the aggregation and allocation of trades. In addition,
RiverSource Investments monitors a variety of areas (e.g., allocation of
investment opportunities) and compliance with the firm's Code of Ethics, and
places additional investment restrictions on portfolio managers who manage
hedge funds and certain other accounts.

RiverSource Investments has a fiduciary responsibility to all of the clients
for which it manages accounts. RiverSource Investments seeks to provide best
execution of all securities transactions and to aggregate securities
transactions and then allocate securities to client accounts in a fair and
equitable basis over time. RiverSource Investments has developed policies and
procedures, including brokerage and trade allocation policies and procedures,
designed to mitigate and manage the potential conflicts of interest that may
arise from the management of multiple types of accounts for multiple clients.

Portfolio managers may manage accounts in a personal capacity that may include
holdings that are similar to, or the same as, those of the fund. The investment
manager's Code of Ethics is designed to address conflicts and, among other
things, imposes restrictions on the ability of the portfolio managers and other
"investment access persons" to invest in securities that may be recommended or
traded in the fund and other client accounts.

Securities Ownership. As of September 30, 2008, Mr. Schroepfer did not own
shares of the High-Yield Fund. As of March 25, 2009, neither Mr. White nor
Mr. McColley owned shares of the U.S. Government Fund.

The information under the caption "Investment Advisory and Other Services -
Service Agreements" is hereby deleted and replaced with the following
information:

Administrative Services

Under an Administrative Services Agreement, effective November 7, 2008
Ameriprise administers certain aspects of the Funds' business and other affairs
at no cost. Ameriprise provides the Funds with such office space, and certain
administrative and other services and executive and other personnel as are
necessary for Fund operations. Ameriprise pays all of the compensation of Board
members of the Funds who are employees or consultants of RiverSource and of the
officers and employees of the Funds. Ameriprise reserves the right to seek
Board approval to increase the fees payable by the Fund under the
Administrative Services Agreement. However, Ameriprise anticipates that any
such increase in fees would be offset by corresponding

decreases in advisory fees under the Management Agreement. If an increase in
fees under the Administrative Services Agreement would not be offset by
corresponding decreases in advisory fees, the affected Funds will inform
shareholders prior to the effectiveness of such increase.

The following information is hereby added to the end of the section entitled
"Investment Advisory and Other Services - Other Service Providers":

The funds in the Seligman Group of Funds will enter into an agreement with
Board Services Corporation (Board Services) located at 901 Marquette Avenue
South, Suite 2810, Minneapolis, MN 55402. This agreement sets forth the terms
of Board Services' responsibility to serve as an agent of the funds for
purposes of administering the payment of compensation to each independent Board
member, to provide office space for use by the funds and their boards, and to
provide any other services to the boards or the independent members, as may be
reasonably requested.

The following information is added at after the section entitled "Financial
Statements":

Information Regarding Pending and Settled Legal Proceedings

In June 2004, an action captioned John E. Gallus et al. v. American Express
Financial Corp. and American Express Financial Advisors Inc., was filed in the
United States District Court for the District of Arizona. The plaintiffs allege
that they are investors in several American Express Company mutual funds and
they purport to bring the action derivatively on behalf of those funds under
the Investment Company Act of 1940. The plaintiffs allege that fees allegedly
paid to the defendants by the funds for investment advisory and administrative
services are excessive. The plaintiffs seek remedies including restitution and
rescission of investment advisory and distribution agreements. The plaintiffs
voluntarily agreed to transfer this case to the United States District Court
for the District of Minnesota. In response to defendant's motion to dismiss the
complaint, the Court dismissed one of plaintiffs' four claims and granted
plaintiffs limited discovery. Defendants moved for summary judgment in April
2007. Summary judgment was granted in the defendants' favor on July 9, 2007.
The plaintiffs filed a notice of appeal with the Eighth Circuit Court of
Appeals on Aug. 8, 2007.

In December 2005, without admitting or denying the allegations, American
Express Financial Corporation (AEFC, which is now known as Ameriprise
Financial, Inc. (Ameriprise Financial)), entered into settlement agreements
with the Securities and Exchange Commission (SEC) and Minnesota Department of
Commerce (MDOC) related to market timing activities. As a result, AEFC was
censured and ordered to cease and desist from committing or causing any
violations of certain provisions of the Investment Advisers Act of 1940, the
Investment Company Act of 1940, and various Minnesota laws. AEFC agreed to pay
disgorgement of $10 million and civil money penalties of $7 million. AEFC also
agreed to retain an independent distribution consultant to assist in developing
a plan for distribution of all disgorgement and civil penalties ordered by the
SEC in accordance with various undertakings detailed at
http://www.sec.gov/litigation/admin/ia-2451.pdf. Ameriprise Financial and its
affiliates have cooperated with the SEC and the MDOC in these legal
proceedings, and have made regular reports to the RiverSource Funds' Board of
Directors/Trustees.

Ameriprise Financial and certain of its affiliates have historically been
involved in a number of legal, arbitration and regulatory proceedings,
including routine litigation, class actions, and governmental actions,
concerning matters arising in connection with the conduct of their business
activities. Ameriprise Financial believes that the Funds are not currently the
subject of, and that

neither Ameriprise Financial nor any of its affiliates are the subject of, any
pending legal, arbitration or regulatory proceedings that are likely to have a
material adverse effect on the Funds or the ability of Ameriprise Financial or
its affiliates to perform under their contracts with the Funds. Ameriprise
Financial is required to make 10-Q, 10-K and, as necessary, 8-K filings with
the Securities and Exchange Commission on legal and regulatory matters that
relate to Ameriprise Financial and its affiliates. Copies of these filings may
be obtained by accessing the SEC website at www.sec.gov.

There can be no assurance that these matters, or the adverse publicity
associated with them, will not result in increased fund redemptions, reduced
sale of fund shares or other adverse consequences to the Funds. Further,
although we believe proceedings are not likely to have a material adverse
effect on the Funds or the ability of Ameriprise Financial or its affiliates to
perform under their contracts with the Funds, these proceedings are subject to
uncertainties and, as such, we are unable to estimate the possible loss or
range of loss that may result. An adverse outcome in one or more of these
proceedings could result in adverse judgments, settlements, fines, penalties or
other relief that could have a material adverse effect on the consolidated
financial condition or results of operations of Ameriprise Financial.

SUPPLEMENT DATED MARCH 16, 2009 TO THE
PROSPECTUSES
AND
STATEMENTS OF ADDITIONAL INFORMATION
OF EACH OF THE FOLLOWING FUNDS:

Prospectuses, each dated February 2, 2009, for
Seligman Core Fixed Income Fund, Inc., Seligman Municipal Fund Series, Inc.,
Seligman Municipal Series Trust, Seligman New Jersey Municipal Fund, Inc.,
Seligman Pennsylvania Municipal Fund Series and
Seligman TargetHorizon ETF Portfolios, Inc.

Prospectuses, each dated May 1, 2008, for
Seligman Asset Allocation Series, Inc., Seligman Cash Management Fund, Inc.,
Seligman Capital Fund, Inc., Seligman Common Stock Fund, Inc.,
Seligman Communications and Information Fund, Inc., Seligman Growth Fund, Inc.,
Seligman High Income Fund Series, Seligman Income and Growth Fund, Inc.,
Seligman LaSalle Real Estate Fund Series, Inc., Seligman Portfolios, Inc.,
Seligman Value Fund Series, Inc. and Tri-Continental Corporation
(each, a "Fund", and collectively, the "Funds")

On March 13, 2009, without admitting or denying any violations of law or
wrongdoing, J. & W. Seligman & Co. Incorporated (Seligman), Seligman Advisors,
Inc. (now known as RiverSource Fund Distributors, Inc.), Seligman Data Corp.
and Brian T. Zino (collectively, the "Seligman Parties") entered into a
stipulation of settlement with the Office of the Attorney General of the State
of New York ("NYAG") and settled the claims made by the NYAG in September 2006
relating to allegations of frequent trading in certain Seligman Funds. Under
the terms of the settlement, Seligman will pay $11.3 million to four Seligman
Funds as follows: $150,000 to Seligman Global Growth Fund, $550,000 to Seligman
Global Smaller Companies Fund, $7.7 million to Seligman Communications and
Information Fund and $2.9 million to Seligman Global Technology Fund. These
settlement payments are reflected in the net asset values of these four
Seligman Funds. This settlement resolves all outstanding matters between the
Seligman Parties and the NYAG.

Supplement, dated May 15, 2008,
to the following Statements of Additional Information:

Statements of Additional Information, each dated February 1, 2008, for:
Seligman Core Fixed Income Fund, Inc., Seligman Municipal Fund Series, Inc.,
Seligman Municipal Series Trust, Seligman New Jersey Municipal Fund, Inc.,
Seligman Pennsylvania Municipal Fund Series and Seligman TargetHorizon ETF
Portfolios, Inc.

Statements of Additional Information, each dated March 3, 2008, for:
Seligman Frontier Fund, Inc. and Seligman Global Fund Series, Inc.

Statements of Additional Information, each dated May 1, 2008, for:
Seligman Asset Allocation Series, Inc., Seligman Capital Fund, Inc.,
Seligman Cash Management Fund, Inc., Seligman Common Stock Fund, Inc.,
Seligman Communications and Information Fund, Inc., Seligman Growth Fund, Inc.,
Seligman High Income Fund Series, Seligman Income and Growth Fund, Inc.,
Seligman LaSalle Real Estate Fund Series, Inc. and Seligman Value Fund Series,
Inc.

(each, a "Fund")

Capitalized terms used but not defined in this Supplement shall have the
meanings given to such terms in each Fund's Statement of Additional Information.

The following information supersedes and replaces item (6) under the heading
"Purchase, Redemption and Pricing of Shares - Purchase of Shares - CDSC
Waivers" in each Fund's Statement of Additional Information:

(6) in connection with participation in the Merrill Lynch Small Market 401(k)
Program, retirement programs administered or serviced by the Princeton
Retirement Group, Paychex, ADP Retirement Services, Hartford Securities
Distribution Company, Inc., or NYLIM Service Company LLC, retirement
programs or accounts administered or serviced by Mercer HR Services, LLC or
its affiliates, or retirement programs or accounts administered or serviced
by firms that have a written agreement with Seligman Advisors that
contemplates a waiver of CDSCs.

SELIGMAN HIGH INCOME FUND SERIES

Seligman U.S. Government Securities Fund
Seligman High-Yield Fund

Statement of Additional Information
May 1, 2008

100 Park Avenue
New York, New York 10017
(212) 850-1864

Toll Free Telephone: (800) 221-2450
For Retirement Plan Information - Toll-Free Telephone: (800) 445-1777

This Statement of Additional Information ("SAI") expands upon and supplements
the information contained in the current Prospectuses of Seligman U.S.
Government Securities Fund and Seligman High-Yield Fund (individually, "a
Fund"), each dated May 1, 2008, offering Class A shares, Class B shares, Class
C shares, Class D shares (Class D shares are not offered after the close of
business on May 16, 2008) and Class R shares, and the current Prospectus for
Seligman High-Yield Fund, dated May 1, 2008, offering Class I shares (together,
"the Prospectuses"). Each of the Seligman High-Yield Fund and the Seligman U.S.
Government Securities Fund is a separate series of Seligman High Income Fund
Series (the "Series"). This SAI, although not in itself a Prospectus, is
incorporated by reference into each of the Fund's Prospectuses in its entirety.
It should be read in conjunction with each Fund's Prospectuses, which you may
obtain by writing or calling the Series at the above address or telephone
numbers, respectively.

The financial statements and notes included in each Fund's Annual Report, which
includes the Report of Independent Registered Public Accounting Firm thereon,
are incorporated herein by reference. An Annual Report for each Fund will be
furnished to you without charge if you request a copy of this SAI.

The website references in this SAI are inactive textual references and
information contained in or otherwise accessible through these websites does
not form a part of this SAI.

Table of Contents

Series History.......................................... 2
Description of the Series and its Investments and Risks. 2
Management of the Series................................ 15
Control Persons and Principal Holders of Securities..... 22
Investment Advisory and Other Services.................. 24
Portfolio Managers...................................... 31
Portfolio Transactions and Other Practices.............. 33
Shares of Beneficial Interest and Other Securities...... 35
Purchase, Redemption, and Pricing of Shares............. 35
Taxation of each Fund................................... 43
Underwriters............................................ 45
Calculation of Yield and Performance Data............... 48
Financial Statements.................................... 51
General Information..................................... 52

TX1A

Series History

The Series was organized as a business trust under the laws of the Commonwealth
of Massachusetts on July 27, 1984.

Description of the Series and its Investments and Risks

Classification

The Series is a diversified open-end management investment company, or mutual
fund, which consists of two separate series, which are Seligman U.S. Government
Securities Fund (the "U.S. Government Securities Fund") and Seligman High-Yield
Fund (the "High-Yield Fund").

Investment Strategies and Risks

The following information regarding each Fund's investments and risks
supplements the information contained in each of the Fund's Prospectuses.

U.S. Government Securities. The U.S. Government Securities Fund intends to
invest at least 80% of its net assets (including amounts borrowed for
investment purposes) in US Government Securities. Securities backed by the full
faith and credit of the US government involve minimal credit risk. These
securities in which the Fund invests are considered among the safest of
fixed-income investments. However, the market value of such securities (and the
market value of those securities backed only by the credit of the US federal
agency or instrumentality or government sponsored enterprise that issued the
security), like those of other debt securities, will fluctuate with changes,
real or anticipated, in the level of interest rates. The Fund's net asset value
per share will fluctuate with changes in the market value of the securities
held in its portfolio. Additionally, the Fund's yield will vary based on the
yield of its portfolio securities.

Securities backed only by the credit of the US federal agency or
instrumentality or government sponsored enterprise that issued the security may
have increased credit risk, including, but not limited to, the risk of
non-payment of principal and/or interest. Some of these securities are
supported by the credit of the government sponsored enterprise itself and the
discretionary authority of the US Treasury to purchase the enterprise's
obligations (e.g., securities of the Federal National Mortgage Association,
Federal Home Loan Mortgage Corporation, and the Federal Home Loan Bank). Others
are supported only by the credit of the government sponsored enterprise itself
(e.g., the Federal Farm Credit Bank). There is no assurance that the US
government will provide financial support to government sponsored enterprises
that are not supported by the full faith and credit of the US government.

Generally, as interest rates rise, the value of the securities held by the Fund
will decline. Conversely, if interest rates decline, the value of the
securities held by the Fund will increase. This effect is usually more
pronounced for longer-term securities. Longer-term securities generally tend to
produce higher yields but are subject to greater market fluctuations as a
result of changes in interest rates than fixed-income securities with shorter
maturities. The Fund may invest in securities of any duration.

High-Yield Securities. The High-Yield Fund intends to invest at least 80% of
its net assets (including amounts borrowed for investment purposes) in
High-Yield Securities, as the term is described in the Fund's Prospectuses.
High-Yield Securities are subject to greater risk of loss of principal and
income than higher-rated bonds and notes and are considered to be predominantly
speculative with respect to the issuer's capacity to pay interest and repay
principal. Accordingly, an investment in the Fund presents substantial risks in
relation to a fund that invests primarily in investment grade instruments.

An economic downturn could adversely impact issuers' ability to pay interest
and repay principal and could result in issuers' defaulting on such payments.
The value of the High-Yield Fund's holdings will be affected, like all
fixed-income securities, by market conditions relating to changes in prevailing
interest rates. However, the value of High-Yield Securities is also affected by
investors' perceptions. When economic conditions appear to be deteriorating,
lower-rated or unrated bonds and notes may decline in market value due to
investors' heightened concerns and perceptions about credit quality.

High-Yield Securities are traded principally by dealers in the over-the-counter
market. The market for these securities may be less active and less liquid than
for higher-rated securities. Under adverse market or economic conditions, the
secondary market for these securities could contract further, causing the
High-Yield Fund difficulties in valuing and selling its securities.

During periods of falling interest rates, issuers of an obligation held by the
High-Yield Fund may prepay or call securities with higher coupons or interest
rates before their maturity dates. If this occurs, the High-Yield Fund could
lose potential price appreciation and could be forced to reinvest the
unanticipated proceeds at lower interest rates, resulting in a decline in the
High-Yield Fund's income.

Capital appreciation bonds, including "zero-coupon" and "pay-in-kind"
securities, may be subject to greater fluctuations in value because they tend
to be more speculative than income-bearing securities. Fluctuations in the
market prices of these securities owned by the High-Yield Fund could result in
corresponding fluctuations and volatility in the net asset value of the shares
of the High-Yield Fund.

If an issuer repays an obligation such as a mortgage-backed security held by
the High-Yield Fund more slowly than anticipated, the High-Yield Fund's returns
could be adversely impacted. This could occur if an underlying mortgage pool
has unusual characteristics or because interest rates have remained too high to
stimulate repayment. In either case, the value of the obligation will decrease
and the High-Yield Fund will be prevented from investing in higher-yielding
securities.

Foreign Securities. The High-Yield Fund may invest up to 10% of its net assets
in debt securities of foreign issuers. Foreign investments may be affected
favorably or unfavorably by changes in currency rates and exchange control
regulations. There may be less information available about a foreign company
than about a US company, and foreign companies may not be subject to reporting
standards and requirements comparable to those applicable to US companies.
Foreign debt securities and their markets may not be as liquid as US securities
and their markets. Securities of foreign companies may involve greater market
risk than securities of US companies, and foreign brokerage commissions and
custody fees are generally higher than in the United States. Investments in
foreign debt securities may also be subject to local economic or political
risks, such as political instability of some foreign governments and the
possibility of nationalization of issuers.

Illiquid Securities. The High-Yield Fund may invest up to 15% of its net assets
in illiquid securities, including restricted securities (i.e., securities not
readily marketable without registration under the Securities Act of 1933, as
amended ("1933 Act")) and other securities that are not readily marketable,
such as repurchase agreements of more than one week's duration. The Series may
purchase restricted securities that may be offered and sold only to "qualified
institutional buyers" under Rule 144A of the 1933 Act, and the investment
manager, acting pursuant to procedures approved by the Series' Board of
Trustees, may determine, when appropriate, that specific Rule 144A securities
are liquid and not subject to the 15% limitation on illiquid securities. Should
this determination be made, the investment manager, acting pursuant to such
procedures, will carefully monitor the security (focusing on such factors,
among others, as trading activity and availability of information) to determine
that the Rule 144A security continues to be liquid. It is not possible to
predict with assurance exactly how the market for Rule 144A securities will
further evolve. This investment practice could have the effect of increasing
the level of illiquidity in the High-Yield Fund, if and to the extent that,
qualified institutional buyers become for a time uninterested in purchasing
Rule 144A securities.

Mortgage-Related Securities.

Mortgage Pass-Through Securities. The U.S. Government Securities Fund may
invest in mortgage pass-through securities. Mortgage pass-through securities
include securities that represent interests in pools of mortgage loans made by
lenders such as savings and loan institutions, mortgage bankers, and commercial
banks. Such securities provide a "pass-through" of monthly payments of interest
and principal made by the borrowers on their residential mortgage loans (net of
any fees paid to the issuer or guarantor of such securities). Although the
residential mortgages underlying a pool may have maturities of up to 30 years,
a pool's effective maturity may be reduced by prepayments of principal on the
underlying mortgage obligations. Factors affecting mortgage prepayments
include, among other things, the level of interest rates, general economic and
social conditions and the location and age of the mortgages. High interest rate
mortgages are more likely to be prepaid than lower-rate

mortgages; consequently, the effective maturities of mortgage-related
obligations that pass-through payments of higher-rate mortgages are likely to
be shorter than those of obligations that pass-through payments of lower-rate
mortgages. If such prepayment of mortgage-related securities in which the U.S.
Government Securities Fund invests occurs, the Fund may have to invest the
proceeds in securities with lower yields.

The Government National Mortgage Association ("GNMA") is a US government
corporation within the Department of Housing and Urban Development, authorized
to guarantee, with the full faith and credit of the US government, the timely
payment of principal and interest on securities issued by institutions approved
by GNMA (such as savings and loan institutions, commercial banks and mortgage
bankers) and backed by pools of Federal Housing Administration insured or
Veterans Administration guaranteed residential mortgages. These securities
entitle the holder to receive all interest and principal payments owed on the
mortgages in the pool, net of certain fees, regardless of whether or not the
mortgagors actually make the payments. Other government-related issuers of
mortgage-related securities include the Federal National Mortgage Association
("FNMA"), a government-sponsored corporation subject to general regulation by
the Secretary of Housing and Urban Development but owned entirely by private
stockholders, and the Federal Home Loan Mortgage Corporation ("FHLMC"), a
corporate instrumentality of the US government created for the purpose of
increasing the availability of mortgage credit for residential housing that is
owned by the twelve Federal Home Loan Banks. FHLMC issues Participation
Certificates ("PCs"), which represent interests in mortgages from FHLMC's
national portfolio. FHLMC guarantees the timely payment of interest and
ultimate collection of principal, but PCs are not backed by the full faith and
credit of the US government. Pass-through securities issued by FNMA are backed
by residential mortgages purchased from a list of approved seller/servicers and
are guaranteed as to timely payment of principal and interest by FNMA, but are
not backed by the full faith and credit of the US government.

Commercial banks, savings and loan institutions, private mortgage insurance
companies, mortgage bankers and other secondary market issuers also create
pass-through securities based on pools of conventional residential mortgage
loans. Securities created by such non-governmental issuers may offer a higher
rate of interest than government-related securities; however, timely payment of
interest and principal may or may not be supported by insurance or guarantee
arrangements, and there can be no assurance that the private issuers can meet
their obligations.

Collateralized Mortgage Obligations. The U.S. Government Securities Fund may
also invest in Collateralized Mortgage Obligations ("CMOs"), including certain
CMOs that have elected to be treated as Real Estate Mortgage Investment
Conduits ("REMICs"). CMOs are fixed-income securities collateralized by pooled
mortgages and separated into short-, medium-, and long-term positions (called
tranches). Tranches pay different rates of interest depending upon their
maturity. CMOs may be collateralized by (a) pass through securities issued or
guaranteed by GNMA, FNMA or FHLMC, (b) unsecuritized mortgage loans insured by
the Federal Housing Administration or guaranteed by the Department of Veteran's
Affairs, (c) unsecuritized conventional Mortgages, (d) other mortgage related
securities or (e) any combination thereof.

Each tranche of a CMO is issued at a specific coupon rate and has a stated
maturity. As the payments on the underlying mortgage loans are collected, the
CMO issuer generally pays the coupon rate of interest to the holders of each
tranche. In a common structure referred to as a "Pay" CMO, all scheduled and
unscheduled principal payments generated by the collateral, as loans are repaid
or prepaid, go initially to investors in the first tranches. Investors in later
tranches do not start receiving principal payments until the prior tranches are
paid in full. Sometimes, CMOs are structured so that the prepayment and/or
market risks are transferred from one tranche to another.

Most CMOs are issued by Federal agencies. However, the only CMOs backed by the
full faith and credit of the US government are CMOs collateralized by pass
through securities guaranteed by GNMA. All CMOs are subject to reinvestment
risk; that is, as prepayments on the underlying pool of mortgages increase, the
maturity of the tranches in the CMO will decrease. As a result, the U.S.
Government Securities Fund may have to invest the proceeds that were invested
in such CMOs in securities with lower yields. Factors affecting reinvestment
risk include the level of interest rates, general economic and social
conditions and the location and age of the mortgages.

Preferred Stock. The High-Yield Fund may invest up to 10% of its total assets
in preferred stock, including non-investment grade preferred stock. Certain
preferred stock issues may offer higher yields than similar bond issues because
their rights are subordinated to the bonds. Consequently, such preferred stock
issues will have a greater risk potential. The investment manager will try to
minimize this greater risk potential through its investment process. However,
there can be no assurance that losses will not occur.

To the extent the High-Yield Fund invests in preferred securities, there are
special risks associated with investing in preferred securities, including:

. Deferral. Preferred securities may include provisions that permit the
issuer, at its discretion, to defer distributions for a stated period
without adverse consequences to the issuer. If the Fund owns a preferred
security that is deferring its distributions, the Fund may be required
to report income for tax purposes although it has not yet received such
income.

. Subordination. Preferred securities are subordinated to bonds and other
debt instruments in an issuer's capital structure with respect to
priority to corporate income and liquidation payments, and therefore
will be subject to greater credit risk than more senior debt instruments.

. Liquidity. Preferred securities may be substantially less liquid than
many other securities, such as common stocks or US government securities.

. Limited Voting Rights. Generally, preferred security holders have no
voting rights with respect to the issuing company unless preferred
dividends have been in arrears for a specified number of periods, at
which time the preferred security holders may elect a number of
directors to the issuer's board. Generally, once all the arrearages have
been paid, the preferred security holders no longer have voting rights.
In the case of certain trust preferred securities, holders generally
have no voting rights, except (i) if the issuer fails to pay dividends
for a specified period of time or (ii) if a declaration of default
occurs and is continuing. In such an event, rights of holders of trust
preferred securities generally would include the right to appoint and
authorize a trustee to enforce the trust or special purpose entity's
rights as a creditor under the agreement with its operating company.

. Special Redemption Rights. In certain varying circumstances, an issuer
of preferred securities may redeem the securities prior to a specified
date. For instance, for certain types of preferred securities, a
redemption may be triggered by a change in income tax or securities
laws. As with call provisions, a redemption by the issuer of the
preferred securities may negatively impact the return of the security
held by the Fund.

Repurchase Agreements. Each Fund of the Series may enter into repurchase
agreements. A repurchase agreement is an agreement under which a Fund acquires
a money market instrument, generally a US government obligation qualified for
purchase by the Fund, subject to resale at an agreed upon price and date. Such
resale price reflects an agreed upon interest rate effective for the period of
time the instrument is held by the Fund and is unrelated to the interest rate
on the instrument. Repurchase agreements could involve certain risks in the
event of bankruptcy or other default by the seller, including possible delays
and expenses in liquidating the securities underlying the agreement, decline in
value of the underlying securities and loss of interest. Repurchase agreements
usually are for short periods, such as one week or less, but may be for longer
periods. Although the U.S. Government Securities Fund may enter into repurchase
agreements with respect to any money market instruments qualified for purchase,
such agreements generally involve only US government securities and will only
involve securities issued or guaranteed by the US government. As a matter of
fundamental policy, each Fund will not enter into repurchase agreements of more
than one week's duration if more than 10% of its total assets would be invested
in such agreements and in restricted and other illiquid securities.

When-Issued and Forward Commitment Securities. Each Fund may purchase
securities on a when-issued or forward commitment basis, in which case delivery
and payment normally take place within 45 days after the date of the commitment
to purchase. The payment obligation and the interest rate that will be received
on the securities are each fixed at the time the buyer enters into the
commitment. A Fund may purchase securities on a when-issued or forward
commitment basis with or without the intention of actually acquiring the
securities, and may sell these securities before the settlement date if it is
deemed advisable.

When investing in when-issued or forward commitment securities, cash and/or
liquid securities equal to the amount of the when-issued or forward commitment
obligations will be segregated at the Series' custodian, and

marked to market daily, with additional cash and/or liquid securities added
when necessary. When the time comes to pay for when-issued or forward
commitment securities, each Fund will meet its respective obligations from then
available cash flow, sale of other securities (those segregated or otherwise)
or, although they would not normally expect to do so, from the sale of the
when-issued or forward commitment securities themselves (which may have a value
greater or less than the Fund's payment obligations). Sale of securities to
meet such obligations carries with it a greater potential for the realization
of capital gain or loss.

Securities purchased on a when-issued or forward commitment basis and the
securities held in each Fund are subject to changes in market value based upon
the public's perception of the creditworthiness of the issuer and changes, real
or anticipated, in the level of interest rates (which will generally result in
similar changes in value, i.e., both experiencing appreciation when interest
rates decline and depreciation when interest rates rise). Therefore, to the
extent a Fund remains substantially fully invested at the same time that it has
purchased securities on a when-issued or forward commitment basis, there will
be a greater possibility that the market value of the Fund's assets will vary
more than otherwise. Purchasing a security on a when-issued or forward
commitment basis can involve a risk that the yields available in the market
when the delivery takes place may be higher than those obtained on the security
so purchased.

Lending of Portfolio Securities. Each Fund of the Series may lend portfolio
securities to brokers or dealers, banks, or other institutional borrowers of
securities. Loaned securities may not be returned by a borrower; however, a
borrower must maintain with a Fund cash or equivalent collateral such as
Treasury Bills, equal to at least 100% of the market value of the securities
loaned. During the time portfolio securities are on loan, the borrower pays a
Fund any income accruing on the loaned securities and a Fund may invest the
cash collateral and earn additional income or may receive an agreed upon amount
of interest income from the borrower. Loans will generally be short-term. Loans
are subject to termination at the option of a Fund or the borrower. Each Fund
may pay reasonable administrative and custodial fees in connection with a loan
and may pay a negotiated portion of the interest earned on the cash or
equivalent collateral to the borrower or placing broker. The lending of
portfolio securities may involve certain risks such as: 1) an increase in the
market value of the borrowed securities without a corresponding increase in the
value of the posted collateral might result in an imbalance in value between
the borrowed securities and the collateral; 2) in the event the borrower sought
protection under the Federal bankruptcy laws, repayment of the borrowed
securities to a Fund might be delayed; and 3) the borrower might refuse to
repay the borrowed securities. Each Fund may lend portfolio securities to the
extent that the investment manager deems appropriate in seeking to achieve a
Fund's investment objective and with only a prudent degree of risk.

Except as otherwise specifically noted above and below, each Fund's investment
policies are not fundamental and the Board of Trustees of the Series may change
such policies without the vote of a majority of a Fund's outstanding voting
securities.

If a Fund invests in other investment companies, shareholders would bear not
only their proportionate share of that Fund's expenses (including operating
expenses and advisory fees), but also similar expenses of the underlying
investment companies, and that Fund's returns will therefore be lower.

Investments to Control. Each Fund may not invest for the purpose of controlling
or managing any company. If a Fund acquires a large percentage of the
securities of a single issuer, it could be deemed to have invested in such
issuer for the purpose of exercising control. If a Fund were to make such
acquisitions, there is a risk that such Fund would become less diversified,
which could increase the volatility of that Fund and increase the Fund's
exposure to market, credit and other risks associated with certain issuers'
financial condition and business operations.

Exchange Traded Funds. The High-Yield Fund may invest in exchange traded funds
("ETFs"). Certain ETFs are traded, like individual stocks, on an exchange, but
they represent a basket of securities that seek to track the performance of
certain indices. The indices include not only broad-market indices but more
specific indices as well, including those relating to particular sectors,
countries and regions. Certain ETFs are traded in the over-the-counter markets,
which present counterparty risk and liquidity risks to the Fund. The High-Yield
Fund may invest in ETFs for short-term cash management purposes or as part of
its overall investment strategy. If the High-Yield Fund invests in ETFs,
shareholders would bear not only the High-Yield Fund's expenses (including
operating expenses and management fees), but also similar expenses of the ETFs,
and that Fund's returns will

therefore be lower. To the extent the High-Yield Fund invests in ETFs, the
High-Yield Fund is exposed to the risks associated with the underlying
investments of the ETFs and the High-Yield Fund's performance may be negatively
affected if the value of those underlying investments declines.

Short Sales. Each Fund may not sell securities short or maintain a short
position.

Options and Other Derivatives. The Funds may invest in certain derivatives
instruments described below for hedging, cash management or investment
purposes. Generally, derivatives may be employed when the investment manager
believes they will provide an effective means of managing risk or portfolio
characteristics. To the extent the Funds engage in the derivatives described
below, there can be no assurance that such derivatives will achieve their
intended benefits, and the Funds may lose money as a result of such use.

The investment manager must seek approval of the Series' Board of Directors to
invest in any derivative if it is of a type the Funds have not previously
utilized. Pursuant to this policy, the Board has approved the investment
manager's request that the Funds be permitted to use options, interest rate
futures, currency futures, options on interest rate and currency futures,
options on currencies, currency forwards, and swap agreements. These
instruments are described below.

Options. The Funds may utilize options. An option is a contract that gives the
holder the right to purchase ("call") or sell ("put") a specified security for
an agreed upon price at any time before the contract's expiration date. Options
may also be based on an index or group of securities, and such options
typically settle by payment of a cash amount rather than delivery of the
underlying securities. The amount paid for an option is known as the premium,
and the exercise price is known as the strike price. The purchaser of an option
has the right, but not the obligation, to purchase or sell a security (or to
receive a cash settlement amount based on movements in the price of the
underlying security, basket of securities, or index). The seller (or "writer")
of an option, conversely, has an obligation to sell or purchase a security if
the option is exercised. Some options have standardized terms and are traded on
securities exchanges. Others are privately negotiated and have no, or only a
limited, trading market.

Options offer large amounts of leverage, which will result in a Fund's net
asset value being more sensitive to changes in the value of the underlying
security. The successful use of options depends in part on the ability of the
investment manager to manage future price fluctuations, and the degree of
correlation between the options and the prices of the underlying securities. If
the investment manager is incorrect in its expectation of changes in market
prices or the correlation between the instruments or indices on which such
options may be written and purchased and the instruments in a Fund's investment
portfolio, the Funds may incur losses that it would not otherwise incur. The
use of options can also increase a Fund's transaction costs. Options
transactions can involve a high degree of risk, including the possibility of a
total loss of the amount invested. The purchaser of an option runs the risk of
losing the entire premium paid if the option expires "out of the money" (i.e.,
if the strike price for a call option is higher than the market price, or the
strike price for a put option is lower than the market price). The seller of an
option earns premium income but is subject to the risk of having to sell the
underlying security at significantly less than its market price (or buy a
security at significantly more than its market price). When options are
purchased on the over-the-counter market, there is a risk that the counterparty
that wrote the option will be unable to perform its obligations under the
option contract. Such over-the-counter options may also be illiquid and, in
such cases, the Funds may have difficulty closing out its position, in which
case the Funds could lose money in the event of adverse price movements.

Interest Rate Futures. The Funds may utilize interest rate futures. An interest
rate futures contract is an agreement to buy or sell a debt security at a
specific date in the future. Futures contracts, which trade on a securities
exchange, are standardized as to quantity, delivery date and settlement
conditions, including specific securities acceptable for delivery against the
futures contract. In the case of index futures, settlement is made in cash
based on the value of a specified underlying index. More commonly, futures
contracts are closed out prior to expiration by an offsetting purchase or sale.
Since the counterparty to every futures contact is a securities exchange,
offsetting transactions are netted to close out positions. The Funds may incur
a loss if the closing transaction occurs at an unfavorable price as compared
with that of the opening trade (including transaction costs). There can be no
assurance that the Funds will be able to enter into an offsetting transaction
with respect to a particular contract at a particular time. If the Funds are
not able to enter into an offsetting transaction, the Funds will continue to be
required to maintain the position, including the maintenance of margins, which
could result in the Funds incurring substantial losses.

Interest rate futures contracts (and options on such contracts) are traded in
an auction environment on the floors of several exchanges - principally, the
Chicago Board of Trade, the Chicago Mercantile Exchange and the New York
Futures Exchange. The Funds would deal only in standardized contracts on
recognized exchanges. Each exchange guarantees performance under contract
provisions through a clearing corporation, a nonprofit organization managed by
the exchange membership. The Funds may invest in futures contracts traded on US
and non-US exchanges.

Currency Futures. The Funds may utilize currency futures. A currency futures
contract is a standardized contract for the future delivery of a specified
amount of a foreign currency at a future date at a price set at the time of the
contract. Currency futures contracts traded in the US are traded on regulated
exchanges. At the maturity of a futures contract, the Funds may either accept
or make delivery of the currency specified in the contract or, prior to
maturity, enter into a closing transaction involving the purchase or sale of an
offsetting contract. A Fund will only enter into a futures contract if it is
expected that the Fund will readily be able to close out such contract. There
can, however, be no assurance that it will be able to do so in any particular
case, in which case the Funds may suffer losses in the event of adverse price
movements.

Options on Interest Rate Futures and Currency Futures. The Funds may utilize
options on both interest rate futures and currency futures (collectively,
"options on futures"). Options on futures are effectively options on the asset
that underlies a futures contract. A call option on a futures contract gives
the holder the right to enter into a long futures contract at a fixed futures
price. A put option on a futures contract gives the holder the right to enter
into a short futures contract at a fixed futures price.

Options on Currencies. The Funds may utilize options on currencies. An option
on a currency is a derivative in which the owner has the right but not the
obligation to exchange money denominated in one currency into another currency
at an agreed-upon exchange rate on a specified date. In general, options on
currencies operate similarly to options on equity securities and are subject to
many similar risks. Options on currencies are traded primarily in the
over-the-counter market, although options on certain currencies are also listed
on several exchanges.

Options on currencies are affected by all of those factors that influence
exchange rates and investments generally. To the extent that these options are
traded in the over-the-counter markets, they are considered to be illiquid by
the Securities and Exchange Commission (the "SEC").

The value of any currency, including the US dollar, may be affected by complex
political and economic factors applicable to the issuing country. In addition,
the exchange rates of currencies (and therefore the values of currency options)
may be significantly affected, fixed, or supported directly or indirectly by
government actions. Government intervention may increase risks involved in
purchasing or selling currency options, since exchange rates may not be free to
fluctuate with respect to other market forces.

The value of a currency option reflects the value of an exchange rate, which in
turn reflects relative values of two currencies, the US dollar and the
applicable foreign currency. Since currency transactions occurring in the
interbank market involve substantially larger amounts than those that may be
involved in the exercise of currency options, investors may be disadvantaged by
having to deal in an odd lot market for the underlying currencies in connection
with options at prices that are less favorable than for round lots. Foreign
governmental restrictions or taxes could result in adverse consequences to the
Funds, including losses.

Options on currencies held by the Funds, to the extent not exercised, will
expire and the Funds would experience a loss to the extent of any premium paid
for the option. The Funds may, for example, use currency options to hedge the
currency exposure of non-US dollar denominated debt instrument holdings, or for
investment purposes to take an interest rate view based on currency valuations.

Currency Forwards. The Funds may utilize currency forwards. A currency forward
contract involves an obligation to purchase or sell a specific currency at a
future date, which may be any fixed number of days from the date of the
contract as agreed by the parties, at a price set at the time of the contract.
The contracts are traded in the interbank market conducted directly between
currency traders (usually large commercial banks) and their customers. A
contract generally has no deposit requirement, and no commissions are charged
at any stage for trades.

At the maturity of a forward contract, the Funds may either accept or make
delivery of the currency specified in the contract, or, at or prior to
maturity, enter into a closing transaction involving the purchase or sale of an
offsetting contract. Closing transactions with respect to forward contracts are
usually effected with the currency trader who is a party to the original
forward contract.

The Funds generally will enter into forward contract if it is expected that the
Funds will be readily able to close out such contract. There can, however, be
no assurance that it will in any particular case be able to do so, in which
case the Funds may suffer losses in the event of adverse currency movements.
The Funds will not enter into forward contracts or maintain an exposure to such
contracts where the consummation of such contracts would obligate the Funds to
deliver an amount of currency in excess of the value of a Fund's portfolio
securities or other assets denominated in that currency. Where the Funds are
obligated to make deliveries under forward contracts, to avoid leverage, they
will "cover" their obligation with liquid assets in an amount sufficient to
meet their respective obligations.

The Funds may use currency forwards, for example, to hedge the currency
exposure of non-US dollar denominated debt instrument holdings, or for
investment purposes to take an interest rate view based on currency valuations.

Swap Agreements. The Funds may utilize swap agreements. The Funds may enter
into interest rate swaps, currency swaps, and other types of swap agreements,
such as caps, collars, and floors. In a typical interest rate swap, one party
agrees to make regular payments equal to a floating interest rate multiplied by
a "notional principal amount" in return for payments equal to a fixed rate
times the same amount, for a specified period of time. In a typical cap or
floor agreement, one party agrees to make payments only under specified
circumstances, usually in return for payment of a fee by the other party. The
Funds may also enter into credit default swap agreements. The credit default
swap agreement may have as reference obligations one or more securities or a
basket of securities that are or are not currently held by the Funds. The
protection "buyer" in a credit default contract is generally obligated to pay
the protection "seller" an upfront or a periodic stream of payments over the
term of the contract provided that no credit event, such as a default, on a
reference obligation has occurred.

The use of swap agreements by the Funds entails certain risks, which may be
different from, or possibly greater than, the risks associated with investing
directly in the securities and other investments that are the referenced asset
for the swap agreement. Swaps are highly specialized instruments that require
investment techniques, risk analyses, and tax planning different from those
associated with stocks, bonds, and other traditional investments. The use of a
swap agreement requires an understanding not only of the referenced asset,
reference rate, or index but also of the swap itself, without the benefit of
observing the performance of the swap under all possible market conditions.
Swap agreements may be subject to liquidity risk, which exists when a
particular swap is difficult to purchase or sell. If a swap transaction is
particularly large or if the relevant market is illiquid (as is

the case with many swaps since none are traded in a public securities market),
it may not be possible to initiate a transaction or liquidate a position at an
advantageous time or price, which may result in significant losses. In
addition, swap transactions may be subject to a Fund's limitation on
investments in illiquid securities.

Swap agreements may be subject to pricing risk, which exists when a particular
swap becomes extraordinarily expensive (or cheap) relative to historical prices
or the prices of corresponding cash market instruments. Under certain market
conditions, it may not be economically feasible to initiate a transaction or
liquidate a position in time to avoid a loss or take advantage of an
opportunity or to realize the intrinsic value of the swap agreement.

Since some swap agreements can have a leverage component, adverse changes in
the value of the underlying asset, reference rate or index can result in a
substantial loss to the Funds. Certain swaps have the potential for unlimited
loss.

Like most other investments, swap agreements are subject to the risk that the
market value of the instrument will change in a way detrimental to a Fund's
interest. The Funds bear the risk that the investment manager will not
accurately forecast future market trends or the values of assets, reference
rates, indexes, or other economic factors in establishing swap positions for
the Funds. If the investment manager attempts to use a swap agreement as a
hedge against, or as a substitute for, a portfolio investment, the Funds will
be exposed to the risk that the swap will have or will develop imperfect or no
correlation with the portfolio investment. This could cause substantial losses
for the Funds. While hedging strategies involving swap instruments can reduce
the risk of loss, they can also reduce the opportunity for gain or even result
in losses by offsetting favorable price movements in other Fund investments.
Many swaps, in particular swaps traded on the over-the-counter markets, are
complex and often valued subjectively. Improper valuations can result in
increased cash payment requirements to counterparties or a loss of value to the
Funds.

The use of a swap agreement also involves the risk that a loss may be sustained
as a result of the insolvency or bankruptcy of the counterparty or the failure
of the counterparty to make required payments or otherwise comply with the
terms of the agreement. Additionally, the use of credit default swaps can
result in losses if the Funds' investment manager does not correctly evaluate
the creditworthiness of the issuer on which the credit swap is based. The swaps
market is a relatively new market and is largely unregulated. It is possible
that developments in the swaps market, including potential government
regulation, could adversely affect the Funds' ability to terminate existing
swap agreements or to realize amounts to be received under such agreements.

Equity-Linked Securities. The High-Yield Fund may invest in equity-linked
securities (each, an "ELS") as part of its overall investment strategy. An ELS
is a debt instrument whose value is based on the value of a single equity
security, basket of equity securities or an index of equity securities (each,
an "Underlying Equity"). An ELS typically provides interest income, thereby
offering a yield advantage over investing directly in an Underlying Equity.
However, the holder of an ELS may have limited or no benefit from any
appreciation in the Underlying Equity, but is exposed to downside market risk.
The Fund may purchase ELSs that trade on a securities exchange or those that
trade on the over-the-counter markets, including Rule 144A securities. The Fund
may also purchase ELSs in a privately negotiated transaction with the issuer of
the ELSs (or its broker-dealer affiliate, collectively referred to in this
section as the "issuer"). The Fund may or may not hold an ELS until its
maturity.

Investments in ELSs subject the Fund to risks, primarily to the downside market
risk associated with the Underlying Equity, and to additional risks not
typically associated with investments in listed equity securities, such as
liquidity risk, credit risk of the issuer, and concentration risk. Most ELSs do
not have any downside protection (though some ELSs provide for a floor on the
downside). In general, an investor in an ELS has the same downside risk as an
investor in the Underlying Equity. The liquidity of an ELS that is not actively
traded on an exchange is linked to the liquidity of the Underlying Equity. The
issuer of an ELS generally purchases the Underlying Equity as a hedge. If the
Fund wants to sell an ELS back to the issuer prior to its maturity, the issuer
may sell the Underlying Equity to unwind the hedge and, therefore, must take
into account the liquidity of the Underlying Equity in negotiating the purchase
price the issuer will pay to the Fund to acquire the ELS.

The liquidity of unlisted ELSs is normally determined by the willingness of the
issuer to make a market in the ELS. While the Fund will seek to purchase ELSs
only from issuers that it believes to be willing to, and capable of,
repurchasing the ELS at a reasonable price, there can be no assurance that the
Fund will be able to sell any

ELS at such a price or at all. This may impair the Fund's ability to enter into
other transactions at a time when doing so might be advantageous. In addition,
because ELSs are senior unsecured notes of the issuer, the Fund would be
subject to the credit risk of the issuer and the potential risk of being too
concentrated in the securities (including ELSs) of that issuer. The Fund bears
the risk that the issuer may default on its obligations under the ELS. In the
event of insolvency of the issuer, the Fund will be unable to obtain the
intended benefits of the ELS. Moreover, it may be difficult to obtain market
quotations for purposes of valuing the Fund's ELSs and computing the Fund's net
asset value.

Price movements of an ELS will likely differ significantly from price movements
of the Underlying Equity, resulting in the risk of loss if the investment
manager is incorrect in its expectation of fluctuations in securities prices,
interest rates or currency prices or other relevant features of an ELS.

Except as otherwise specifically noted above, these investment strategies are
not fundamental and each Fund, with the approval of the Board of Trustees of
the Series, may change such strategies without the vote of shareholders.

Fundamental Restrictions

Each Fund is subject to fundamental policies that place restrictions on certain
types of investments. These policies cannot be changed except by vote of a
majority of each Fund's outstanding voting securities. Under these policies,
each Fund may not:

.. purchase or sell commodities or commodity contracts, except to the extent
permissible under applicable law and interpretations, as they may be amended
from time to time. In addition, the Board has adopted the following
non-fundamental polices: each Fund may purchase and sell commodities and
commodity contracts only to the extent that such activities do not result in
a Fund being a "commodity pool" as defined in the Commodity Exchange Act and
the Commodity Futures Trading Commission's regulations and interpretations
thereunder. The Manager must seek Board approval to invest in any type of
commodity or commodity contract if it is of the type a Fund has not
previously utilized;

.. purchase securities on margin except as permitted by the Investment Company
Act of 1940 (the "1940 Act") or any rule thereunder, any Securities and
Exchange Commission (the "SEC") or SEC staff interpretations thereof or any
exemptions therefrom which may be granted by the SEC;

.. issue senior securities or borrow money, except as permitted by the 1940 Act
or any rule thereunder, any SEC or SEC staff interpretations thereof or any
exemptions therefrom which may be granted by the SEC;

.. make loans, except as permitted by the 1940 Act or any rule thereunder, any
SEC or SEC staff interpretations thereof or any exemptions therefrom which
may be granted by the SEC;

.. underwrite the securities of other issuers except to the extent a Fund may
be deemed an underwriter under the 1933 Act in disposing of a portfolio
security or in connection with investments in other investment companies;

.. purchase or hold any real estate including limited partnership interests in
real property, except each Fund may invest in debt securities secured by
real estate or interests therein or issued by companies which invest in real
estate or interests therein, including REITs;

.. make any investment inconsistent with a Fund's classification as a
diversified investment company under the 1940 Act;

.. invest 25% or more of its total assets, at market value, in any one
industry, except that 25% limitation on industry concentration does not
apply to securities issued or guaranteed by the US government or any of its
agencies or instrumentalities (which may include mortgage-related
securities);

.. purchase or hold the securities of any issuer, if to its knowledge, Trustees
or officers of the Series individually owning beneficially more than 0.5% of
the securities of that other company own in the aggregate more than 5% of
such securities; and

.. engage in transactions with its Trustees and officers, or firms they are
associated with, in connection with the purchase or sale of securities,
except as broker.

Certain of the fundamental policies set forth above prohibit transactions
"except as permitted by the 1940 Act or any rule thereunder, any SEC or SEC
staff interpretations thereof or any exemptions therefrom which may be granted
by the SEC." The following discussion explains the flexibility that the each
Fund gains from these exceptions.

Purchase of securities on margin - A purchase on margin involves a loan from
the broker-dealer arranging the transaction. The "margin" is the cash or
securities that the borrower places with the broker-dealer as collateral
against the loan. However, the purchase of securities on margin is effectively
prohibited by the 1940 Act because a Fund generally may borrow only from banks.
Thus, under current law, this exception does not provide any additional
flexibility to a Fund.

Issuing senior securities - A "senior security" is an obligation with respect
to the earnings or assets of a company that takes precedence over the claims of
that company's common stock with respect to the same earnings or assets. The
1940 Act prohibits a mutual fund from issuing senior securities other than
certain borrowings, but SEC staff interpretations allow a fund to engage in
certain types of transactions that otherwise might raise senior security
concerns (such as short sales, buying and selling financial futures contracts
and selling put and call options), provided that the fund maintains segregated
deposits or portfolio securities, or otherwise covers the transaction with
offsetting portfolio securities, in amounts sufficient to offset any liability
associated with the transaction. The exception in the fundamental policy allows
each Fund to operate in reliance upon these staff interpretations.

Borrowing money - The 1940 Act permits a fund to borrow up to 33 1/3% of its
total assets (including the amounts borrowed) from banks, plus an additional 5%
of its total assets for temporary purposes, which may be borrowed from banks or
other sources.

Making loans - The 1940 Act generally prohibits each Fund from making loans to
affiliated persons but does not otherwise restrict a Fund's ability to make
loans.

Each Fund may not change its investment objective without shareholder approval.

Under the 1940 Act, a "vote of a majority of the outstanding voting securities"
of the Series or of a particular Fund means the affirmative vote of the lesser
of (l) more than 50% of the outstanding shares of the Series or of such Fund;
or (2) 67% or more of the shares present at a shareholders' meeting if more
than 50% of the outstanding shares of the Series or of such Fund are
represented at the meeting in person or by proxy.

The Funds also may not acquire any securities of a registered open-end
investment company or a registered unit investment trust in reliance on
subparagraph (F) or subparagraph (G) of Section 12(d)(1) of the 1940 Act. This
policy is not fundamental.

Each Fund will provide shareholders with at least 60 days prior notice of any
change in that Fund's "80%" investment policy as described in the Prospectuses.
Such notice will be provided in plain English in a separate written document
and will contain the following prominent statement, in bold-face type:
"Important Notice Regarding Change in Investment Policy". This prominent
statement will also appear on the envelope in which the notice is delivered or,
if the notice is delivered separately from other communications to
shareholders, such statement will appear either on the notice or on the
envelope in which the notice is delivered. This policy is not fundamental.

Temporary Defensive Position

In an attempt to respond to adverse market, economic, political, or other
conditions, the High-Yield Fund may invest up to 100% of its assets in cash or
cash equivalents, including, but not limited to, prime commercial paper, bank
certificates of deposit, bankers' acceptances, or repurchase agreements for
such securities, and securities of the US government and its agencies and
instrumentalities, as well as cash and cash equivalents denominated in foreign
currencies. The High-Yield Fund's investments in foreign cash equivalents will
be limited to those that,

in the opinion of the investment manager, equate generally to the standards
established for US cash equivalents. Investments in bank obligations will be
limited at the time of investment to the obligations of the 100 largest
domestic banks in terms of assets which are subject to regulatory supervision
by the US government or state governments, and the obligations of the 100
largest foreign banks in terms of assets with branches or agencies in the
United States. The High-Yield Fund may also invest in high-yield, medium and
lower quality corporate notes.

Portfolio Turnover

Each Fund's portfolio turnover rate is calculated by dividing the lesser of
purchases or sales of portfolio securities for the year by the monthly average
of the value of the portfolio securities owned during the year. Securities
whose maturity or expiration date at the time of acquisition were one year or
less are excluded from the calculation. The portfolio turnover rate for the
U.S. Government Securities Fund for the years ended December 31, 2007 and 2006
were 204.04% and 347.09%, respectively. Conditions in the fixed-income market
in 2007 contributed to a relatively lower portfolio turnover rate for the U.S.
Government Securities Fund as compared to 2006. The portfolio turnover rate for
the High-Yield Fund for the years ended December 31, 2007 and 2006 were 77.94%
and 99.04%, respectively.

Disclosure of Portfolio Holdings

The full portfolio holdings of each Fund, as well as portfolio weightings, are
published quarterly, generally no sooner than 15 calendar days after the end of
each calendar quarter on the website of the Fund's distributor, Seligman
Advisors, Inc. ("Seligman Advisors") (www.seligman.com). In addition, the top
10 holdings of each Fund and the aggregate weighting of the top 10 holdings are
published monthly, generally no sooner than 5 business days after the end of
each month. Seligman employees may freely distribute each Fund's portfolio
holdings information described above to third parties the day after such
information appears on Seligman Advisor's website. The foregoing monthly and
quarterly information will remain available on Seligman Advisor's website for
at least 5 months from the end of the period shown.

In accordance with the policies and procedures approved by the Series' Board of
Trustees, each Fund's portfolio holdings may be disclosed to certain parties
prior to its public release if the disclosure is intended for research or other
legitimate business purposes and the recipient is subject to a duty of
confidentiality. Disclosures of portfolio holdings for such purposes (which may
be on-going) are considered on a case-by-case basis, and the Series' procedures
require the prior written approval of the Chief Investment Officer of J. & W.
Seligman & Co. Incorporated ("Seligman") (or its designee) and the Series'
Chief Compliance Officer ("CCO") with respect to disclosures intended for
research purposes, and the President of Seligman or Seligman Advisors (or their
respective designees) and the Series' CCO with respect to disclosures intended
for other legitimate business purposes. In connection with the CCO's review and
approval, the CCO considers whether such disclosure is in the best interests of
the Funds. If prior approval is granted, the recipient must enter into a
written agreement prior to the release of each Fund's portfolio holdings
information that includes, among other things, a requirement that the holdings
be kept confidential and places limits on the use of the information for
trading purposes. The CCO, who reports directly to the Series' Board of
Trustees regarding compliance with the Series' policies, and Seligman's Chief
Compliance Officer monitor compliance with this policy.

In addition, the Series' policies expressly permit Seligman's employees to
release each Fund's holdings information without a confidentiality agreement as
necessary to facilitate the execution of securities transactions or to respond
to questions about Seligman's views on individual securities or whether each
Fund of the Series owns or does not own a particular security, provided that
individual securities weightings will not be disclosed unless such weightings
are otherwise provided in the quarterly disclosure noted above. Portfolio
managers (or their designees) may also disclose certain information about
individual securities or information about a particular investment style on an
occasional basis to third parties for research purposes, provided that the
information does not include the name of a Fund or the weightings of particular
securities unless otherwise provided in the quarterly disclosure noted above.
The Series may also permit its auditors to have access to each Fund's portfolio
holdings as necessary in connection with their auditing services.

Currently, Seligman has entered into ongoing arrangements to disclose each
Fund's portfolio holdings prior to the public disclosure of such information
with the following third party research providers: Salomon Analytics Inc.,
Vestek Systems, Inc., and Bloomberg POM. The portfolio holdings are released to
these research providers

on an as-needed basis (including daily, if necessary). In addition, Seligman
discloses each Fund's portfolio holdings to State Street Bank and Trust Company
("SSBT") in connection with back-office, custodial and/or administrative
services provided by SSBT, and to Institutional Shareholder Services ("ISS") in
connection with proxy voting. Seligman discloses portfolio holdings to the
third parties listed above, other than ISS, on a daily basis. Accordingly, the
time elapsed between the date of such information and the date of its
disclosure is generally less than 24 hours. Seligman discloses portfolio
holdings to ISS on an as-requested basis, and the time elapsed between the date
of the information and the date of its disclosure will vary based upon the date
specified by the ISS request.

All of the above mentioned disclosures have been approved, as applicable, by
the President of Seligman or Seligman Advisors, Seligman's Chief Investment
Officer and/or the Series' CCO and are made pursuant to the terms of
confidentiality agreements or provisions that prohibit the disclosure and
restrict the use of the holdings information. No compensation is received by
any party in consideration of the disclosure of the Series' portfolio holdings
pursuant to these arrangements.

Management of the Series

Board of Trustees

The Board of Trustees provides broad supervision over the affairs of the Series.

Management Information

Information with respect to the Trustees and officers of the Series is shown
below. Unless otherwise indicated, their addresses are 100 Park Avenue, New
York, NY 10017.

Number
of
Portfolios
Term of Office in Fund
and Length of Complex
Name, (Age), Position(s) Time Principal Occupation(s) During Past 5 Years, Trusteeships Overseen
With Series Served* and Other Information by Trustee
- ------------------------- ------------------ -------------------------------------------------------------------- ----------

INDEPENDENT TRUSTEES

Maureen Fonseca (52)**** July 2007 to Date Head of School, The Masters School (education); Director or 59
Trustee Trustee of each of the investment companies of the Seligman Group
of Funds**; Trustee, New York State Association of Independent
Schools and Greens Farms Academy (education); and
Commissioner, Middle States Association (education).

John R. Galvin (78) 1995 to Date Dean Emeritus, Fletcher School of Law and Diplomacy at Tufts 59
Trustee University; Director or Trustee of each of the investment
companies of the Seligman Group of Funds**; and Chairman
Emeritus, American Council on Germany. Formerly, Director,
Raytheon Co. (defense and commercial electronics); Governor of
the Center for Creative Leadership; and Trustee, Institute for
Defense Analyses. From February 1995 until June 1997, Director,
USLIFE Corporation (life insurance). From June 1987 to June
1992, Supreme Allied Commander, NATO, and the Commander-
in-Chief, United States European Command.

John F. Maher (64) December 2006 Retired President and Chief Executive Officer, and former Director, 59
Trustee to Date Great Western Financial Corporation (bank holding company) and
its principal subsidiary, Great Western Bank (a federal savings
bank). Director or Trustee of each of the investment companies of
the Seligman Group of Funds**. From 1989 to 1999, Director,
Baker Hughes (energy products and services).

Frank A. McPherson (75) 1995 to Date Retired Chairman of the Board and Chief Executive Officer of 59
Trustee Kerr-McGee Corporation (diversified energy and chemical
company); Director or Trustee of each of the investment companies
of the Seligman Group of Funds**; and Director, DCP Midstream
GP, LLP (natural gas processing and transporting), Integris Health
(owner of various hospitals), Oklahoma Medical Research
Foundation, Oklahoma Foundation for Excellence in Education,
National Cowboy and Western Heritage Museum and Oklahoma
City Museum of Art. Formerly, Director, ConocoPhillips
(integrated international oil corporation), Kimberly-Clark
Corporation (consumer products), Oklahoma Chapter of the Nature
Conservancy, Boys and Girls Clubs of Oklahoma, Oklahoma City
Public Schools Foundation, Oklahoma City Chamber of Commerce
and BOK Financial (bank holding company). From 1990 until
1994, Director, the Federal Reserve System's Kansas City Reserve
Bank.

Term of Office
and Length of
Name, (Age), Position(s) Time Principal Occupation(s) During Past 5 Years, Trusteeships
With Series Served* and Other Information
- ---------------------------- -------------------- ----------------------------------------------------------------------

INDEPENDENT TRUSTEES

Betsy S. Michel (65) 1984 to Date Attorney; Director or Trustee of each of the investment companies
Trustee of the Seligman Group of Funds**; and Trustee, The Geraldine R.
Dodge Foundation (charitable foundation) and Drew University
(Madison, NJ). Formerly, Chairman of the Board of Trustees of St.
George's School (Newport, RI) and Trustee, World Learning, Inc.
(international educational training) and Council of New Jersey
Grantmakers.

Leroy C. Richie (66) 2000 to Date Counsel, Lewis & Munday, P.C. (law firm); Director or Trustee of
Trustee each of the investment companies of the Seligman Group of
Funds**. Director, Vibration Control Technologies, LLC (auto
vibration technology); Lead Outside Director, Digital Ally, Inc.
(digital imaging) and Infinity, Inc. (oil and gas exploration and
production); Director, OGE Energy Corp. (energy and energy
services provider offering physical delivery and related services for
both electricity and natural gas); Director and Chairman, Highland
Park Michigan Economic Development Corp; and Chairman,
Detroit Public Schools Foundation. Formerly, Chairman and Chief
Executive Officer, Q Standards Worldwide, Inc. (library of
technical standards); Director, Kerr-McGee Corporation
(diversified energy and chemical company); Trustee, New York
University Law Center Foundation; and Vice Chairman, Detroit
Medical Center and Detroit Economic Growth Corp. From 1990
until 1997, Vice President and General Counsel,, Automotive Legal
Affairs, Chrysler Corporation.

Robert L. Shafer (75) 1984 to Date Ambassador and Permanent Observer of the Sovereign Military
Trustee Order of Malta to the United Nations; and Director or Trustee of
each of the investment companies of the Seligman Group of
Funds**. Formerly, from May 1987 until June 1997 Director,
USLIFE Corporation (life insurance) and from December 1973
until January 1996 Vice President, Pfizer Inc. (pharmaceuticals).

James N. Whitson (73) 1993 to Date Retired Executive Vice President and Chief Operating Officer,
Trustee Sammons Enterprises, Inc. (a diversified holding company);
Director or Trustee of each of the investment companies of the
Seligman Group of Funds**; and Director, CommScope, Inc.
(manufacturer of telecommunications equipment). Formerly,
Director and Consultant, Sammons Enterprises, Inc. and Director,
C-SPAN (cable television networks).

INTERESTED TRUSTEES AND PRINCIPAL OFFICERS

William C. Morris*** (70) 1988 to Date Chairman and Director, J. & W. Seligman & Co. Incorporated;
Trustee and Chairman of the Chairman of the Board and Director or Trustee of each of the
Board investment companies of the Seligman Group of Funds**;
Chairman and Director, Seligman Advisors, Inc., Seligman
Services, Inc. and Carbo Ceramics Inc. (manufacturer of ceramic
proppants for oil and gas industry); Director, Seligman Data Corp.;
and President and Chief Executive Officer, The Metropolitan Opera
Association. Formerly, Director, Kerr-McGee Corporation
(diversified energy and chemical company); and Chief Executive
Officer of each of the investment companies of the Seligman Group
of Funds.

Brian T. Zino*** (55) Dir.: 1993 to Date Director and President, J. & W. Seligman & Co. Incorporated;
Trustee, Chief Executive Pres.: 1995 to Date President, Chief Executive Officer and Director or Trustee of each
Officer and President CEO: 2002 to Date of the investment companies of the Seligman Group of Funds**;
Director, Seligman Advisors, Inc. and Seligman Services, Inc.;
Chairman, Seligman Data Corp.; and a member of the Board of
Governors of the Investment Company Institute. Formerly, Director
and Chairman, ICI Mutual Insurance Company.

Number
of
Portfolios
in Fund
Complex
Principal Occupation(s) During Past 5 Years, Trusteeships Overseen
and Other Information by Trustee
- ---------------------------------------------------------------------- ----------

Attorney; Director or Trustee of each of the investment companies 59
of the Seligman Group of Funds**; and Trustee, The Geraldine R.
Dodge Foundation (charitable foundation) and Drew University
(Madison, NJ). Formerly, Chairman of the Board of Trustees of St.
George's School (Newport, RI) and Trustee, World Learning, Inc.
(international educational training) and Council of New Jersey
Grantmakers.

Counsel, Lewis & Munday, P.C. (law firm); Director or Trustee of 59
each of the investment companies of the Seligman Group of
Funds**. Director, Vibration Control Technologies, LLC (auto
vibration technology); Lead Outside Director, Digital Ally, Inc.
(digital imaging) and Infinity, Inc. (oil and gas exploration and
production); Director, OGE Energy Corp. (energy and energy
services provider offering physical delivery and related services for
both electricity and natural gas); Director and Chairman, Highland
Park Michigan Economic Development Corp; and Chairman,
Detroit Public Schools Foundation. Formerly, Chairman and Chief
Executive Officer, Q Standards Worldwide, Inc. (library of
technical standards); Director, Kerr-McGee Corporation
(diversified energy and chemical company); Trustee, New York
University Law Center Foundation; and Vice Chairman, Detroit
Medical Center and Detroit Economic Growth Corp. From 1990
until 1997, Vice President and General Counsel,, Automotive Legal
Affairs, Chrysler Corporation.

Ambassador and Permanent Observer of the Sovereign Military 59
Order of Malta to the United Nations; and Director or Trustee of
each of the investment companies of the Seligman Group of
Funds**. Formerly, from May 1987 until June 1997 Director,
USLIFE Corporation (life insurance) and from December 1973
until January 1996 Vice President, Pfizer Inc. (pharmaceuticals).

Retired Executive Vice President and Chief Operating Officer, 59
Sammons Enterprises, Inc. (a diversified holding company);
Director or Trustee of each of the investment companies of the
Seligman Group of Funds**; and Director, CommScope, Inc.
(manufacturer of telecommunications equipment). Formerly,
Director and Consultant, Sammons Enterprises, Inc. and Director,
C-SPAN (cable television networks).

Chairman and Director, J. & W. Seligman & Co. Incorporated; 59
Chairman of the Board and Director or Trustee of each of the
investment companies of the Seligman Group of Funds**;
Chairman and Director, Seligman Advisors, Inc., Seligman
Services, Inc. and Carbo Ceramics Inc. (manufacturer of ceramic
proppants for oil and gas industry); Director, Seligman Data Corp.;
and President and Chief Executive Officer, The Metropolitan Opera
Association. Formerly, Director, Kerr-McGee Corporation
(diversified energy and chemical company); and Chief Executive
Officer of each of the investment companies of the Seligman Group
of Funds.

Director and President, J. & W. Seligman & Co. Incorporated; 59
President, Chief Executive Officer and Director or Trustee of each
of the investment companies of the Seligman Group of Funds**;
Director, Seligman Advisors, Inc. and Seligman Services, Inc.;
Chairman, Seligman Data Corp.; and a member of the Board of
Governors of the Investment Company Institute. Formerly, Director
and Chairman, ICI Mutual Insurance Company.

Term of Office
and Length of
Name, (Age), Position(s) Time Principal Occupation(s) During Past 5 Years, Trusteeships
With Series Served* and Other Information
- ------------------------------ ------------------- --------------------------------------------------------------------

PRINCIPAL OFFICERS

J. Eric Misenheimer (45) 2005 to Date In addition to his duties with the High-Yield Fund, he is a
Vice President, and Portfolio Managing Director of J. & W. Seligman & Co. Incorporated, as
Manager of High-Yield Fund well as head of its High-Yield Team; and Vice President and Co-
Portfolio Manager of Seligman Core Fixed Income Fund, Inc. and
Seligman Income and Growth Fund, Inc. Prior to April 2005,
Senior Vice President, Director of Taxable High Yield Fixed
Income Investing for Northern Trust Global investments and since
July 1999 management team leader, Northern High Yield Fixed
Income Fund.

Francis L. Mustaro (58) 2006 to Date In addition to his duties with the U.S. Government Securities Fund,
Vice President, and Portfolio he is a Managing Director of J. & W. Seligman & Co. Incorporated;
Manager of U.S. Government head of Seligman's Investment Grade Team; Vice President and
Securities Fund Portfolio Manager of Seligman Cash Management Fund, Inc. and
Seligman Core Fixed Income Fund, Inc.; Vice President and Co-
Portfolio Manager of Seligman Income and Growth Fund, Inc.; and
Vice President of Seligman Portfolios, Inc. and Portfolio Manager
of each of its Seligman Cash Management Portfolio and Seligman
Investment Grade Fixed Income Portfolio. Prior to April 2006,
Managing Director and Senior Portfolio Manager, Core Fixed
Income Group of Citigroup Asset Management.

Eleanor T.M. Hoagland (56) 2004 to Date Managing Director, J. & W. Seligman & Co. Incorporated; and
Vice President and Chief Vice President and Chief Compliance Officer for each of the
Compliance Officer investment companies of the Seligman Group of Funds**.

Thomas G. Rose (50) 2000 to Date Managing Director, Chief Financial Officer and Treasurer, J. & W.
Vice President Seligman & Co. Incorporated; Senior Vice President, Finance,
Seligman Advisors, Inc. and Seligman Data Corp.; and Vice
President of each of the investment companies of the Seligman
Group of Funds**, Seligman Services, Inc. and Seligman
International, Inc.

Lawrence P. Vogel (51) V.P.: 1992 to Date Senior Vice President and Treasurer, Investment Companies, J. &
Vice President and Treasurer Treas.: 2000 to W. Seligman & Co. Incorporated; Vice President and Treasurer of
Date each of the investment companies of the Seligman Group of
Funds**; and Treasurer, Seligman Data Corp.

Frank J. Nasta (43) 1994 to Date Director, Managing Director, General Counsel and Corporate
Secretary Secretary, J. & W. Seligman & Co. Incorporated; Secretary of each
of the investment companies of the Seligman Group of Funds**;
Director and Corporate Secretary, Seligman Advisors, Inc. and
Seligman Services, Inc., and Corporate Secretary, Seligman
International, Inc. and Seligman Data Corp.

In addition to his duties with the High-Yield Fund, he is a N/A
Managing Director of J. & W. Seligman & Co. Incorporated, as
well as head of its High-Yield Team; and Vice President and Co-
Portfolio Manager of Seligman Core Fixed Income Fund, Inc. and
Seligman Income and Growth Fund, Inc. Prior to April 2005,
Senior Vice President, Director of Taxable High Yield Fixed
Income Investing for Northern Trust Global investments and since
July 1999 management team leader, Northern High Yield Fixed
Income Fund.

In addition to his duties with the U.S. Government Securities Fund, N/A
he is a Managing Director of J. & W. Seligman & Co. Incorporated;
head of Seligman's Investment Grade Team; Vice President and
Portfolio Manager of Seligman Cash Management Fund, Inc. and
Seligman Core Fixed Income Fund, Inc.; Vice President and Co-
Portfolio Manager of Seligman Income and Growth Fund, Inc.; and
Vice President of Seligman Portfolios, Inc. and Portfolio Manager
of each of its Seligman Cash Management Portfolio and Seligman
Investment Grade Fixed Income Portfolio. Prior to April 2006,
Managing Director and Senior Portfolio Manager, Core Fixed
Income Group of Citigroup Asset Management.

Managing Director, J. & W. Seligman & Co. Incorporated; and N/A
Vice President and Chief Compliance Officer for each of the
investment companies of the Seligman Group of Funds**.

Managing Director, Chief Financial Officer and Treasurer, J. & W. N/A
Seligman & Co. Incorporated; Senior Vice President, Finance,
Seligman Advisors, Inc. and Seligman Data Corp.; and Vice
President of each of the investment companies of the Seligman
Group of Funds**, Seligman Services, Inc. and Seligman
International, Inc.

Senior Vice President and Treasurer, Investment Companies, J. & N/A
W. Seligman & Co. Incorporated; Vice President and Treasurer of
each of the investment companies of the Seligman Group of
Funds**; and Treasurer, Seligman Data Corp.

Director, Managing Director, General Counsel and Corporate N/A
Secretary, J. & W. Seligman & Co. Incorporated; Secretary of each
of the investment companies of the Seligman Group of Funds**;
Director and Corporate Secretary, Seligman Advisors, Inc. and
Seligman Services, Inc., and Corporate Secretary, Seligman
International, Inc. and Seligman Data Corp.

- --------
* Each Trustee serves for an indefinite term, until the election and
qualification of a successor or until his or her earlier death, resignation
or removal. Each officer is elected annually by the Board.

** The Seligman Group of Funds currently consists of twenty-two registered
investment companies, including the Series.
***Mr. Morris and Mr. Zino are considered "interested persons" of the Series,
as defined in the 1940 Act, by virtue of their positions with Seligman and
its affiliates.
****Dr. Fonseca became a member of the Board of Trustees on July 19, 2007.

The standing committees of the Board include the Board Operations Committee,
Audit Committee and Director Nominating Committee. These Committees are
comprised solely of Trustees who are not "interested" persons of the Series as
that term is defined in the 1940 Act. The duties of these Committees are
described below.

Board Operations Committee. This Committee has authority generally to direct
the operations of the Board, including the nomination of members of other Board
Committees and the selection of legal counsel for the Series. The Committee met
six times during the year ended December 31, 2007. Members of the Committee are
Messrs. McPherson (Chairman), Galvin, Maher, Richie, Shafer and Whitson, and
Mses. Fonseca and Michel. In his capacity as Chairman of the Board Operations
Committee, Mr. McPherson performs duties similar to those of a "lead
independent director," as he chairs meetings of the independent Trustees, and
acts as a point of contact between the independent Trustees and Seligman
between board meetings in respect of general matters.

Audit Committee. This Committee recommends an independent registered public
accounting firm for selection as auditors by the Board annually. In addition,
the Committee assists the Board in its oversight of the Series' financial
reporting process and operates pursuant to a written charter. The Committee met
twice during the year ended December 31, 2007. Members of the Committee are
Messrs. Whitson (Chairman), Galvin, Maher and Richie.

Trustee Nominating Committee. This Committee selects and nominates persons for
election as Trustees by the Board. In addition, if a shareholder meeting is
held where Trustees are to be elected, the Committee will select and nominate
persons for election as Trustees at such shareholder meeting. The Committee may
consider and evaluate nominee candidates properly submitted by shareholders if
a vacancy among the Independent Trustees of the Series occurs and if, based on
the Board's then current size, composition and structure, the Committee
determines that the vacancy should be filled.

A shareholder or group of shareholders (referred to in either case as a
"Nominating Shareholder") that, individually or as a group, has beneficially
owned at least $10,000 of the Series' shares for at least one year prior to the
date the Nominating Shareholder submits a candidate for nomination as a
director may submit one candidate to the Nominating Committee for consideration
at a special meeting or other meeting of shareholders at which directors will
be elected. Nominations will not be considered except in connection with such
meetings of shareholders. To be timely for consideration by the Nominating
Committee, the submission, including all required information, must be
submitted in writing via first class mail to the attention of the Secretary of
the Series at 100 Park Avenue, New York, NY 10017 and received at such time as
may be determined by the Series' Board of Directors in its reasonable
discretion. The Nominating Committee will consider only one candidate submitted
by a Nominating Shareholder for nomination for election. The Nominating
Committee will not consider self-nominated candidates or candidates nominated
by members of a candidate's family, including such candidate's spouse,
children, parents, uncles, aunts, grandparents, nieces and nephews.

The Nominating Committee will consider and evaluate candidates submitted by the
Nominating Shareholder on the basis of the same criteria as those used to
consider and evaluate candidates submitted from other sources. These criteria
may include the candidate's relevant knowledge, experience and expertise, the
candidate's ability to carry out his or her duties in the best interests of the
Series and the candidate's ability to qualify as a disinterested trustee. The
charter for the Nominating Committee, which provides a detailed description of
the criteria used by the Nominating Committee as well as information required
to be provided by shareholders submitting candidates for consideration by the
Nominating Committee, may be obtained by writing to the Secretary of the Series
at the address above.

The Committee met twice during the year ended December 31, 2007. Members of the
Committee are Messrs. Shafer (Chairman) and McPherson, and Ms. Michel.

Beneficial Ownership of Shares

As of December 31, 2007, the Trustees beneficially owned shares in the Series
and the Seligman Group of Funds as follows:

U.S. Government Securities Fund

Aggregate Dollar Range of Shares
Dollar Range of Fund Shares Owned Owned by Trustee in the Seligman
Name By Trustee Group of Funds
- ---- --------------------------------- --------------------------------
INDEPENDENT TRUSTEES

Maureen Fonseca.... None $1-$10,000
John R. Galvin..... $1-$10,000 $50,001-$100,000
John F. Maher...... $1-$10,000 Over $100,000
Frank A. McPherson. $50,001-$100,000 Over $100,000
Betsy S. Michel.... $1-$10,000 Over $100,000
Leroy C. Richie.... $1-$10,000 Over $100,000
Robert L. Shafer... None Over $100,000
James N. Whitson... $10,001-$50,000 Over $100,000

INTERESTED TRUSTEES

William C. Morris.. $10,001-$50,000 Over $100,000
Brian T. Zino...... None Over $100,000

High-Yield Fund

INTERESTED TRUSTEES
William C. Morris.. Over $100,000 Over $100,000
Brian T. Zino...... None Over $100,000

Compensation

Pension or Total Compensation
Aggregate Retirement Benefits from Series and
Compensation Accrued as Part of Fund Complex Paid
Name and Position with Series from Series (1) Fund Expenses to Trustees (1)(2)
- ----------------------------- --------------- ------------------- ------------------

Maureen Fonseca, Trustee(3)... $1,026 N/A $ 43,565
John R. Galvin, Trustee....... 2,177 N/A 106,500
John F. Maher, Trustee(4)..... 2,210 N/A 105,000
Frank A. McPherson, Trustee... 2,204 N/A 106,500
Betsy S. Michel, Trustee...... 2,311 N/A 112,500
Leroy C. Richie, Trustee...... 2,318 N/A 112,500
Robert L. Shafer, Trustee..... 2,311 N/A 112,500
James N. Whitson, Trustee..... 2,177 N/A 106,500

- --------
(1)For the Series' year ended December 31, 2007.
(2)As of December 31, 2007, the Seligman Group of Funds consisted of
twenty-three registered investment companies, including the Series.
(3)Dr. Fonseca became a member of the Board of Trustees on July 19, 2007.
(4)Mr. Maher is deferring his fees.

No compensation is paid by a Fund to Trustees or officers of the Series who are
employees of Seligman.

The Series has a deferred compensation plan under which independent trustees
may elect to defer receiving their fees. A trustee who has elected deferral of
his or her fees may choose a rate of return equal to either (1) the interest
rate on short-term Treasury Bills, or (2) the rate of return on the shares of
certain of the investment companies advised by Seligman, as designated by the
trustee. The cost of such fees and earnings (when incurred) is included in
trustees' fees and expenses, and the accumulated balance thereof is included in
other liabilities in each Fund's financial statements.

The Funds may, but are not obligated to, purchase shares of the other funds in
the Seligman Group of Funds to hedge their obligations in connection with the
deferred compensation plan.

Mr. Maher is currently deferring compensation pursuant to the deferred
compensation plan. Mr. Maher has accrued deferred compensation (including
earning losses) in respect of the Series, in the amount of $2,271 as of
December 31, 2007.

Class A shares may be issued without a sales charge to present and former
directors or trustees (and their family members) of the Series. Class A shares
may be sold at net asset value to these persons since such sales require less
sales effort and lower sales-related expenses as compared with sales to the
general public.

Code of Ethics

Seligman, Seligman Advisors, their subsidiaries and affiliates, and the
Seligman Group of Funds have adopted a Code of Ethics that sets forth the
circumstances under which officers, directors, trustees and employees
(collectively, "Employees") are permitted to engage in personal securities
transactions. The Code of Ethics proscribes certain practices with regard to
personal securities transactions and personal dealings, provides a framework
for the reporting and monitoring of personal securities transactions by
Seligman's Chief Compliance Officer, and sets forth a procedure of identifying,
for disciplinary action, those individuals who violate the Code of Ethics. The
Code of Ethics prohibits Employees (including all investment team members) from
purchasing or selling any security or an equivalent security that is being
purchased or sold by any client, or where the Employee intends, or knows of
another's intention, to purchase or sell a security on behalf of a client. The
Code also prohibits all Employees from acquiring securities in a private
placement or in an initial or secondary public offering unless prior approval
has been obtained from Seligman's Chief Compliance Officer.

The Code of Ethics prohibits (1) each portfolio manager or member of an
investment team from purchasing or selling any security within seven calendar
days either before or after the purchase or sale of the security by a client's
account (including investment company accounts) that the portfolio manager or
investment team manages; (2) each Employee from profiting from short-term
trading (a profitable purchase and sale or vice-versa within 60 days); and
(3) each member of an investment team from profiting from short sales of a
security if, at that time, any client managed by that team has a long position
in that security. Any profit realized pursuant to any of these prohibitions
must be disgorged to a charitable organization.

Employees are required, except under very limited circumstances, to engage in
personal securities transactions through a broker-dealer designated by
Seligman. All transactions by Employees in non-exempt securities must be
pre-cleared by Seligman's compliance system. This system is designed to prevent
transactions in securities that would conflict with the interests of clients.
All Employees are also required to disclose all securities beneficially owned
by them upon commencement of employment and at the end of each calendar year.

A copy of the Code of Ethics is on public file with, and is available upon
request from, the SEC. You can access it through the SEC's Internet site,
www.sec.gov.

Proxy Voting Policies

Introduction. On behalf of each Fund, one or more independent third parties
under the supervision of Seligman votes the proxies of the securities held in
each Fund's portfolio in accordance with Seligman's criteria of what is in the
best interests of that Fund's shareholders.

The financial interest of the shareholders is the primary consideration in
determining how proxies should be voted. Seligman has a responsibility to
analyze proxy issues and to ensure that voting is accomplished in a way
consistent with those financial interests. In the case of social and political
responsibility issues which do not involve financial considerations, it is not
possible to fairly represent the diverse views of the shareholders. As a
result, Seligman's policy generally is to abstain from voting on these issues.
Notwithstanding the above, proposals seeking disclosure of certain matters
relating to social and political issues may be supported if such disclosure is
not deemed to be unduly burdensome.

The Proxy Voting Process. Proxies for securities held in the portfolios of a
Fund will be received, processed and voted by one or more independent third
parties under the supervision of Seligman pursuant to the guidelines (the
"Guidelines") established by Seligman's Proxy Voting Committee (the
"Committee"). A description of the Guidelines can be found below.

The Committee was established to set Seligman's policy and Guidelines, to
consider new corporate governance issues as they arise, to assist in
determining how Seligman will respond to such issues and to provide oversight
of the proxy voting process. The Committee currently consists of Seligman's
Chief Investment Officer (Chair), Seligman's Chief Financial Officer and
Seligman's General Counsel.

Seligman subscribes to a service offered by an independent third party that
provides research on proposals to be acted upon at shareholder meetings and
assistance in the tracking, voting and recordkeeping of proxies.

Conflicts of Interests. Seligman's Chief Compliance Officer maintains a Proxy
Watch List, which contains the names of those companies that may present the
potential for conflict in the voting process with Seligman, Seligman Advisors
or any Seligman affiliate. For example, the Proxy Watch List will include those
portfolio companies for which Seligman separately manages assets in private
accounts or which are significant distributors of Seligman's products and
services. As described below, proxy voting for these companies will be subject
to a higher level of consideration.

Deviations from Guidelines and Special Situations. Seligman recognizes that it
may not always be in the best interest of the shareholders to vote in
accordance with the Guidelines on a particular issue. In such circumstances,
Seligman may deviate from the Guidelines. A member of the Committee must
approve any deviation from the Guidelines. Furthermore, a majority of the
Committee's members must approve any deviation from the Guidelines for issuers
included on the Proxy Watch List.

Similarly, one member of the Committee must approve the voting decision for
proposals of a unique nature requiring a case-by-case analysis. A majority of
the Committee must approve the voting decision for such proposals if the issuer
is included on the Proxy Watch List. Seligman may consider the views of the
management of a portfolio company, as well as the view of Seligman's investment
professionals, when analyzing potential deviations from the Guidelines and for
those proposals requiring a case-by-case evaluation.

Guidelines Summary. The Guidelines are briefly described as follows:

1. Seligman votes with the recommendations of a company's board of directors
on general corporate governance issues such as changing the company's name,
ratifying the appointment of auditors and procedural matters relating to
shareholder meetings.

2. Seligman opposes, and supports the elimination of, anti-takeover
proposals, including those relating to classified Boards, supermajority votes,
poison pills, issuance of blank check preferred and establishment of classes
with disparate voting rights.

3. Seligman abstains from voting on issues relating to social and/or
political responsibility, except for matters relating to disclosure issues if
not deemed unduly burdensome for the company (e.g., political contributions).

4. Seligman votes for stock option plans, increases in the number of shares
under existing stock option plans and other amendments to the terms of such
plans; provided that the overall dilution of all active stock option plans and
stock purchase plans does not exceed 10% on a fully diluted basis and are
otherwise considered to align the interest of the company with those of
shareholders (e.g., all such plans must specifically prohibit repricing).

5. Seligman generally votes with the recommendations of a company's board of
directors on other matters relating to executive compensation, unless
considered excessive.

6. Seligman will withhold voting for the entire board of trustees (or
individual trustees as the case may be) if: (a) less than 75% of the board is
independent; (b) the board has a nominating or compensation committee of which
less than 75% of its members are independent; (c) the board has recommended
shareholders vote for an anti-takeover device which Seligman votes against; or
(d) the board has recommended a matter relating to a stock option plan or stock
purchase plan which Seligman votes against.

7. Seligman will vote for proposals relating to the authorization of
additional common stock up to 5 times that currently outstanding.

8. Seligman will vote for proposals to effect stock splits.

9. Seligman will vote for proposals authorizing share repurchase programs.

10. Seligman will vote against authorization to transact unidentified
business at the meeting.

11. Acquisitions, mergers, reorganizations, reincorporations and other
similar transactions will be voted on a case-by-case basis.

12. Proposals to amend a company's charter or by-laws (other than as
identified above) will be voted on a case-by-case basis.

13. Seligman will vote against all proposals where the company did not
provide adequate information to make a decision.

14. Seligman abstains from voting shares which have recently been sold or
for which information was not received on a timely basis.

Information regarding how each Fund voted proxies relating to portfolio
securities during the most recent 12-month period ended June 30, is available
(i) without charge upon request by calling toll free (800) 221-2450 in the US
or collect (212) 682-7600 outside the US and (ii) on the SEC's website at
www.sec.gov. Information for each new 12-month period ending June 30 will be
available no later than August 31 of that year.

Control Persons and Principal Holders of Securities

Control Persons

As of April 2, 2008, there was no person or persons who controlled either the
U.S. Government Securities Fund or the High-Yield Fund, either through a
significant ownership of shares or any other means of control.

Principal Holders

As of April 2, 2008, the following principal holders owned 5% or more of the
then outstanding shares of capital stock of a Class of shares for the following
Funds:

Percentage of
Total Shares
Name and Address Fund/Class Held
- ---------------- ------------- -------------

MLPF&S FBO Customers, 4800 Deer Lake Drive East, 3rd Floor, Jacksonville, FL 32246 High-Yield 9.95%
Fund/Class A

Citigroup Global House Account, 7th Floor, 333 West 34th Street, New York, NY 10001 High-Yield 5.01%
Fund/Class A

MLPF&S FBO Customers, 4800 Deer Lake Drive East, 3rd Floor, Jacksonville, FL 32246 High-Yield 15.61%
Fund/Class B

Morgan Stanley DW, Attn. Mutual Fund Operations, Harborside Financial Center, Plaza High-Yield 10.79%
Two, Jersey City, NJ 07311 Fund/Class B

Citigroup Global House Account, 7th Floor, 333 West 34th Street, New York, NY 10001. High-Yield
Fund/Class B 6.55%

Citigroup Global House Account, 7th Floor, 333 West 34th Street, New York, NY 10001. High-Yield
Fund/Class C 8.52%

MLPF&S FBO Customers, 4800 Deer Lake Drive East, 3rd Floor, Jacksonville, FL High-Yield
32246............................................................................. Fund/Class D 30.34%

Percentage of
Total Shares
Name and Address Fund/Class Held
- ---------------- ----------------- -------------

Citigroup Global House Account, 7th Floor, 333 West 34th Street, New York, NY 10001.. High-Yield
Fund/Class D 5.87%

State Street Bank & Trust Co., FBO Customers, North Carolina College Savings, 105 High-Yield
Rosemont Avenue, Westwood, MA 02090................................................ Fund/Class I 31.21%

State Street Bank & Trust Co., FBO Customers, North Carolina College Savings, 105 High-Yield
Rosemont Avenue, Westwood, MA 02090................................................ Fund/Class I 23.04%

State Street Bank & Trust Co., FBO Customers, North Carolina College Savings, 105 High-Yield
Rosemont Avenue, Westwood, MA 02090................................................ Fund/Class I 20.05%

Patterson & Co., FBO Customers, 1525 West WT Harris Blvd., Charlotte, NC 28288....... High-Yield
Fund/Class I 13.11%

MLPF&S FBO Customers, 4800 Deer Lake Drive East, 3rd Floor, Jacksonville, FL High-Yield
32246.............................................................................. Fund/Class R 94.35%

MCB Trust Services Custodian FBO Plumbers Local Union No. 93, 700 17th Street, Suite U.S. Government
300, Denver, CO 80202.............................................................. Securities Fund/
Class A 15.93%

MLPF&S FBO Customers, 4800 Deer Lake Drive East, 3rd Floor, Jacksonville, FL U.S. Government
32246.............................................................................. Securities Fund/
Class A 6.25%

Morgan Stanley DW, Attn. Mutual Fund Operations, Harborside Financial Center, Plaza U.S. Government
Two, Jersey City, NJ 07311......................................................... Securities Fund/
Class B 8.12%

MG Trust Company, FBO Cardinal Buses Inc. 401K Plan, 700 17th Street, Suite 300, U.S. Government
Denver CO 80202.................................................................... Securities Fund/
Class R 6.20%

Management Ownership

As of April 2, 2008, Trustees and officers of the U.S. Government Securities
Fund as a group owned less than 1% of the U.S. Government Securities Fund
Class A shares of the then outstanding shares of beneficial interest of the
Fund. As of the same date, Trustees or officers of the Fund did not own any of
the Fund's Class B shares, Class C shares, Class D shares or Class R shares of
the then outstanding shares of beneficial interest of the Series.

As of April 2, 2008, Trustees and officers of the High-Yield Fund as a group
owned less than 1% of the Fund's Class A shares of the then outstanding shares
of beneficial interest of the Fund. As of the same date, Trustees and officers
of the High-Yield Fund did not own any of the Fund's Class B shares, Class C
shares, Class D shares, or Class R shares of the then outstanding shares of
beneficial interest of the Fund. As of the same date, Trustees and officers of
the High-Yield Fund as a group owned 2.77% of the High-Yield Fund's Class I
shares of beneficial interest then outstanding of the Fund.

Investment Advisory and Other Services

Investment Manager

Subject to the control of the Series' Board of Trustees, Seligman manages the
investment of the assets of each Fund of the Series and administers its
business and other affairs pursuant to management agreements approved by the
Series' Board of Trustees and the initial shareholders of each Fund (the
"Management Agreements"). As of the date of this SAI, Seligman also served as
investment manager to twenty-one other US registered investment companies
which, together with the Series, make up the "Seligman Group of Funds." There
are no other management-related service contracts under which services are
provided to each Fund of the Series. No person or persons, other than the
directors, trustees, officers or employees of Seligman and the Series,
regularly advise each Fund or Seligman of the Series with respect to the Funds'
investments.

Seligman is a successor firm to an investment banking business founded in 1864
which has thereafter provided investment services to individuals, families,
institutions, and corporations. Mr. William C. Morris, Chairman and Trustee of
Seligman and Chairman of the Board of Trustees and Trustee of the Series, owns
a majority of the outstanding voting securities of Seligman and is a
controlling person of Seligman.

All of the officers of the Series listed above are officers or employees of
Seligman. Their affiliations with the Series and with Seligman are provided
under their principal business occupations.

Seligman is entitled to receive a management fee from each Fund for its
services to such Fund, calculated daily and payable monthly. For the U.S.
Government Securities Fund, the fee is equal to 0.50% per annum of the Fund's
average daily net assets on an annual basis. The management fee for the
High-Yield Fund is equal to 0.65% of the Fund's average daily net assets on the
first $1 billion of net assets and 0.55% per annum of the Fund's average daily
net assets in excess of $1 billion. The management fees paid by the U.S.
Government Securities Fund for the years ended December 31, 2007, 2006 and 2005
equaled 0.50% of the average daily net assets of such Funds, or $292,788,
$340,058 and $431,891 respectively. The management fees paid by the High-Yield
Fund for the years ended December 31, 2007, 2006 and 2005 equaled 0.65% of the
average daily net assets of such Fund, or $1,927,944, $2,443,687 and
$3,289,129, respectively.

Each Fund of the Series pays all of its expenses other than those assumed by
Seligman, including administration, shareholder services and distribution fees,
fees and expenses of independent attorneys and auditors, taxes and governmental
fees, including fees and expenses of qualifying each Fund and its shares under
Federal and State securities laws, expenses of repurchase or redemption of
shares, expenses of printing and distributing reports, notices and proxy
materials to shareholders, expenses of printing and filing reports and other
documents with governmental agencies, expenses of shareholders' meetings,
expenses of corporate data processing and related services, shareholder record
keeping and shareholder account services, fees and disbursements of transfer
agents and custodians, expenses of disbursing dividends and distributions, fees
and expenses of trustees of the Series not employed by or serving as a Director
of Seligman or its affiliates, insurance premiums, interests on borrowings, and
extraordinary expenses, such as litigation expenses. The Series' expenses are
allocated among the Funds in a manner determined by the Trustees to be fair and
equitable.

Each Fund's Management Agreement provides that Seligman will not be liable to a
Fund for any error of judgment or mistake of law, or for any loss arising out
of any investment, or for any act or omission in performing its duties under
the Management Agreement, except for willful misfeasance, bad faith, gross
negligence, or reckless disregard of its obligations and duties under the
Management Agreement.

Each Fund's Management Agreement was initially approved by the Board of
Trustees at a meeting held on September 30, 1988 and by the shareholders at a
special meeting held on December 16, 1988. The amendments to the Management
Agreement of the High-Yield Fund, to increase the fee rate payable to Seligman
by the Fund, were approved by the Board of Trustees on September 21, 1995 and
by the shareholders at a special meeting held on December 12, 1995. The
Management Agreements will continue in effect until December 31 of each year if
(1) such continuance is approved in the manner required by the 1940 Act (i.e.,
by a vote of a majority of the Board of Trustees or of the outstanding voting
securities of each Fund and by a vote of a majority of the Trustees who are not
parties to the Management Agreement or interested persons of any such party)
and (2) Seligman shall not have notified a Fund at least 60 days prior to
December 31 of any year that it does not desire such continuance. Each
Management Agreement may be terminated by the appropriate Fund, without
penalty, on 60 days' written notice to Seligman and will terminate
automatically in the event of its assignment. Each Fund has agreed to change
its name upon termination of the Management Agreement if continued use of the
name would cause confusion in the context of Seligman's business.

Principal Underwriter

Seligman Advisors (an affiliate of Seligman), located at 100 Park Avenue, New
York, New York 10017, acts as general distributor of the shares of each Fund of
the Series and of each of the other mutual funds in the Seligman Group.
Seligman Advisors is an "affiliated person" (as defined in the 1940 Act) of
Seligman, which is itself an affiliated person of the Series. Those individuals
identified above under "Management Information" as trustees or officers of both
the Series and Seligman Advisors (in which case, directors or trustees) are
affiliated persons of both entities.

Services Provided by the Investment Manager

Under each Fund's Management Agreement, dated December 29, 1988 for the U.S.
Government Securities Fund and December 29, 1988, as amended January 1, 1996,
for the High-Yield Fund, subject to the control of the Series' Board of
Trustees, Seligman manages the investment of the assets of each Fund, including
making purchases and sales of portfolio securities consistent with each Fund's
investment objectives and policies, and administers the business and other
affairs of each Fund. Seligman provides the Series with such office space,
administrative and other services and executive and other personnel as are
necessary for Series operations. Seligman pays all of the compensation of
trustees of the Series who are employees or consultants of Seligman and of the
officers and employees of the Series. Seligman also provides senior management
for Seligman Data Corp. ("SDC"), the Series' shareholder service agent.

Service Agreements

There are no other management-related service contracts under which services
are provided to either Fund of the Series.

Other Investment Advice

No person or persons, other than directors, trustees, officers, or employees of
Seligman, regularly advise the Funds of the Series or Seligman with respect to
the Funds' respective investments.

Dealer Reallowances

Dealers and financial advisors receive a percentage of the initial sales charge
on sales of Class A shares of each Fund of the Series, as set forth below:

Regular Dealer
Sales Charge Sales Charge Reallowance
as a % of As a % of Net as a % of
Amount of Purchase Offering Price(1) Amount Invested Offering Price
------------------ ----------------- --------------- --------------

Less than $100,000.. 4.50% 4.71% 4.00%
$100,000 - $249,999. 3.50 3.63 3.00
$250,000 - $499,999. 2.50 2.56 2.25
$500,000 - $999,999. 2.00 2.04 1.75
$1,000,000 and over. 0 0 0

- --------
(1)"Offering Price" is the amount that you actually pay for each Fund's shares;
it includes the initial sales charge.

Seligman Services, Inc. ("Seligman Services") is a limited purpose
broker/dealer. Prior to January 1, 2006, Seligman Services received commissions
from certain sales of each Fund's shares. Accordingly, for the year ended
December 31, 2005, Seligman Services received commissions from certain sales of
the U.S. Government Securities Fund's shares in the amount of $1,361. Also, for
the year ended December 31, 2005, Seligman Services received commissions from
certain sales of the High-Yield Fund's shares in the amount of $3,306.

Rule 12b-1 Plan

Each Fund of the Series has adopted an Administration, Shareholder Services and
Distribution Plan ("12b-1 Plan") in accordance with Section 12(b) of the 1940
Act and Rule 12b-1 thereunder.

Under its 12b-1 Plan, each Fund may pay to Seligman Advisors an administration,
shareholder services and distribution fee in respect of the Fund's Class A,
Class B, Class C, Class D and Class R shares. (Effective at the close of
business on May 16, 2008, the Funds' Class D shares will be combined with Class
C shares, and Class D shares will no longer be available. After Class D shares
are combined with Class C shares, former Class D shareholders will be subject
to the Funds' Rule 12b-1 Plan in respect of Class C shares, which is identical
in its terms to Class D shares. There is no administration, shareholder
services and distribution fee in respect of either Fund's Class I shares.)
Payments by a Fund under its 12b-1 Plan may include, but are not limited to:
(1) compensation to securities dealers and other organizations ("Service
Organizations") for providing distribution assistance with respect to assets
invested in the Fund; (2) compensation to Service Organizations for providing
administration, accounting and other shareholder services with respect to the
Series' shareholders; and (3) otherwise promoting the sale of shares of the
Fund, including paying for the preparation of advertising and sales literature
and the printing and distribution of such promotional materials and
prospectuses to prospective investors and defraying Seligman Advisors' costs
incurred in connection with its marketing efforts with respect to shares of the
Series. Seligman, in its sole discretion, may also make similar payments to
Seligman Advisors from its own resources, which may include the management fee
that Seligman receives from each Fund, respectively. Payments made by a Fund
under its 12b-1 Plan are intended to be used to encourage sales of shares of
each Fund of the Series, as well as to discourage redemptions.

Fees paid by a Fund under its 12b-1 Plan with respect to any class of shares of
the Fund may not be used to pay expenses incurred solely in respect of any
other class of the Fund or any other Seligman fund. Expenses attributable to
more than one class of a Fund are allocated between the classes of the Fund in
accordance with a methodology approved by the Series' Board of Trustees.
Expenses of distribution activities that benefit both a Fund and other Seligman
funds are allocated among the applicable Fund and funds based on relative gross
sales during the quarter in which such expenses are incurred, in accordance
with a methodology approved by the Board of Trustees of the Series.

Class A

Under the 12b-1 Plan, each Fund, with respect to its Class A shares, is
authorized to pay monthly to Seligman Advisors a service fee at an annual rate
of up to 0.25% of the average daily net asset value of such Fund's Class A
shares. This fee is used by Seligman Advisors exclusively to make payments to
Service Organizations, which have entered into agreements with Seligman
Advisors. Such Service Organizations receive from Seligman Advisors a
continuing fee of up to 0.25% on an annual basis, payable quarterly, of the
average daily net assets of Class A shares attributable to the particular
Service Organization for providing personal service and/or maintenance of
shareholder accounts for each Fund, respectively. The fee payable to Service
Organizations from time to time shall, within such limits, be determined by the
Trustees of the Series. A Fund of the Series is not obligated to pay Seligman
Advisors for any such costs it incurs in excess of the fee described above. No
expense incurred in one year by Seligman Advisors with respect to Class A
shares of a Fund may be paid from Class A 12b-1 fees received from the Fund in
any other year. If a Fund's 12b-1 Plan is terminated in respect of its Class A
shares, no amounts (other than amounts accrued but not yet paid) would be owed
by the Fund to Seligman Advisors with respect to its Class A shares. The total
amount of service fees paid to Seligman Advisors in respect of Class A shares
of the U.S. Government Securities Fund and the High-Yield Fund for the year
ended December 31, 2007 was $88,631 and $433,874, respectively, equivalent to
0.24% and 0.25%, respectively, per annum of each Fund's Class A shares' average
daily net assets.

Class B

Under the 12b-1 Plan, each Fund, with respect to its Class B shares, is
authorized to pay monthly a 12b-1 fee at an annual rate of up to 1% of the
average daily net asset value of such Fund's Class B shares. This fee is
comprised of (1) a distribution fee equal to 0.75% per annum, substantially all
of which is paid directly to one or more third parties that have purchased
Seligman Advisor's rights to this fee (the "Purchasers") to compensate them for
having funded, at the time of sale of a Fund's Class B shares (i) a 4% sales
commission to Service Organizations and (ii) prior to August 1, 2004, a payment
of up to 0.35% of sales to Seligman Advisors to help defray its costs of
distributing Class B shares; and (2) a service fee of up to 0.25% per annum
which is paid to Seligman Advisors. A small portion of the distribution fee is
paid to Seligman Advisors in connection with sales of Class B shares for which
no commissions are paid; Seligman Advisors may pay the entire 12b-1 fee to
Service Organizations who have not received any sales commission for the sale
of Class B shares. The service fee is used by Seligman Advisors exclusively to
make payments to Service Organizations which have entered into agreements with
Seligman Advisors. Such Service Organizations receive from Seligman Advisors a
continuing service fee of up to 0.25% on an annual basis, payable quarterly, of
the average daily net assets of Class B shares of a Fund attributable to the
particular Service Organization for providing personal service and/or
maintenance of shareholder accounts for the Fund. The amounts expended by
Seligman Advisors or the Purchasers in any one year upon the initial purchase
of Class B shares of a Fund may exceed the 12b-1 fees paid by the Series in
that year. Each Fund's 12b-1 Plan permits expenses incurred in respect of Class
B shares in one year to be paid from Class B 12b-1 fees received from the Fund
in any other year; however, in any year a Fund is not obligated to pay any
12b-1 fees in excess of the fees described above. Seligman Advisors and the
Purchasers are not reimbursed for expenses that exceed such fees. If a Fund's
12b-1 Plan is terminated in respect of Class B shares, no amounts (other than
amounts accrued but not yet paid) would be owed by that Fund to Seligman
Advisors or the Purchasers with respect to its Class B shares. The total amount
of distribution and service fees paid in respect of Class B shares of the U.S.
Government Securities Fund and the High-Yield Fund for the year ended
December 31, 2007 was $59,538 and $366,259, respectively, or 1% per annum of
each Fund's Class B shares' average daily net assets.

Class C

Under the 12b-1 Plan, each Fund, with respect to Class C shares, is authorized
to pay monthly to Seligman Advisors a 12b-1 fee at an annual rate of up to 1%
of the average daily net asset value of such Fund's Class C shares. This fee is
used by Seligman Advisors as follows: During the first year following the sale
of Class C shares, a distribution fee of 0.75% of the average daily net assets
attributable to such Class C shares is used, along with any contingent deferred
sales charge ("CDSC") proceeds to (1) reimburse Seligman Advisors for its
(A) payment at the time of sale of Class C shares of a 0.75% sales commission
to Service Organizations or (B) ongoing payment of 0.75% of the average daily
net assets attributable to such Class C shares to Service Organizations who
elect not to receive a time of sale payment and (2) pay for other distribution
expenses, including paying for the preparation of advertising and sales
literature and the printing and distribution of such promotional materials and
prospectuses to prospective investors and other marketing costs of Seligman
Advisors. In addition, during the first year following the sale of Class C
shares, a service fee of up to 0.25% of the average daily net assets
attributable to such Class C shares is used to reimburse Seligman Advisors for
its prepayment to Service Organizations at the time of sale of Class C shares
of a service fee of 0.25% of the net asset value of the Class C share sold (for
shareholder services to be provided to Class C shareholders over the course of
the one year immediately following the sale) and for its ongoing payment of a
service fee of 0.25% of the average daily net assets attributable to such Class
C shares to those Service Organizations who elect not to receive a time of sale
payment. The payment of service fees to Seligman Advisors is limited to amounts
Seligman Advisors actually paid to Service Organizations as service fees at
either the time of sale or the ongoing service fees paid to Service
Organizations who elect not to receive such service fees at the time of sale.
After the initial one-year period following a sale of Class C shares, the 12b-1
fee attributable to such Class C shares is paid to Service Organizations for
providing continuing shareholder services and distribution assistance in
respect of a Fund. The total amount of distribution and service fees paid to
Seligman Advisors in respect of Class C shares of the U.S. Government
Securities Fund and the High-Yield Fund for the year ended December 31, 2007
was $39,929 and $223,245, respectively, or 1% per annum of each Fund's Class C
shares' average daily net assets.

The amounts expended by Seligman Advisors in any one year with respect to Class
C shares of a Fund may exceed the 12b-1 fees paid by the Fund in that year.
Each Fund's 12b-1 Plan permits expenses incurred by Seligman Advisors in
respect of Class C shares in one year to be paid from Class C 12b-1 fees in any
other year; however, in any year a Fund is not obligated to pay any 12b-1 fees
in excess of the fees described above.

As of December 31, 2007, Seligman Advisors incurred $708,395 and $2,956,468 of
expenses in respect of the U.S. Government Securities Fund and the High-Yield
Fund Class C shares, respectively, that were not reimbursed from the amounts
received from each Fund's 12b-1 Plan. These amounts were equal to 18.14% and
16.62%, respectively, of each Fund's Class C shares' net assets as of
December 31, 2007.

If the 12b-1 Plan is terminated in respect of Class C shares of a Fund, no
amounts (other than amounts accrued but not yet paid) would be owed by such
Fund to Seligman Advisors with respect to its Class C shares.

Class D (NOT AVAILABLE AFTER MAY 16, 2008)

Effective at the close of business (4:00 p.m. EST) on May 16, 2008, the Funds'
Class D shares will be combined with Class C shares, and Class D shares will no
longer be available. After Class D shares are combined with Class C shares, all
former Class D shareholders will be subject to the Funds' Rule 12b-1 plan in
respect of Class C shares (as described immediately above), which is identical
in its terms to Class D shares. Accordingly, the description of the Fund's
12b-1 Plan in respect of Class D shares will not be relevant after May 16, 2008.

Under the 12b-1 Plan, each Fund, with respect to its Class D shares, is
authorized to pay monthly to Seligman Advisors a 12b-1 fee at an annual rate of
up to 1% of the average daily net asset value of such Fund's Class D shares.
This fee is used by Seligman Advisors as follows: During the first year
following the sale of Class D shares, a distribution fee of 0.75% of the
average daily net assets attributable to such Class D shares is used, along
with any CDSC proceeds, to (1) reimburse Seligman Advisors for its (A) payment
at the time of sale of Class D shares of a 0.75% sales commission to Service
Organizations or (B) ongoing payment of 0.75% of the average daily net assets
attributable to such Class D shares to Service Organizations who elect not to
receive a time-of-sale payment and (2) pay for other distribution expenses,
including paying for the preparation of advertising and sales literature and
the printing and distribution of such promotional materials and prospectuses to
prospective investors and other marketing costs of Seligman Advisors. In
addition, during the first year following the sale of Class D shares of a Fund,
a service fee of up to 0.25% of the average daily net assets attributable to
such Class D shares is used to reimburse Seligman Advisors for its prepayment
to Service Organizations at the time of sale of Class D shares of the Fund of a
service fee of 0.25% of the net asset value of the Class D shares sold (for
shareholder services to be provided to Class D shareholders of the Fund over
the course of the one year immediately following the sale) and for its ongoing
payment of a service fee of 0.25% of the average daily net assets attributable
to such Class D shares to those Service Organizations who elect not to receive
time-of-sale payment. The payment of service fees to Seligman Advisors is
limited to amounts Seligman Advisors actually paid to Service Organizations as
service fees at either the time of sale or the ongoing services fees paid to
Service Organizations who elect not to receive such service fees at the time of
sale. After the initial one-year period following a sale of Class D shares of a
Fund, the 12b-1 fee attributable to such Class D shares of the Fund is paid to
Service Organizations for providing continuing shareholder services and
distribution assistance in respect of assets invested in the Fund. The total
amount of distribution and service fees paid to Seligman Advisors in respect of
Class D shares of the U.S. Government Securities Fund and the High-Yield Fund
for the year ended December 31, 2007 was $106,110 and $525,887, respectively,
or 1% per annum of each Fund's Class D shares' average daily net assets.

The amounts expended by Seligman Advisors in any one year with respect to Class
D shares of a Fund may exceed the 12b-1 fees paid by the Fund in that year.
Each Fund's 12b-1 Plan permits expenses incurred by Seligman Advisors in
respect of Class D shares in one year to be paid from Class D 12b-1 fees in any
other year; however, in any year a Fund is not obligated to pay any 12b-1 fees
in excess of the fees described above.

As of December 31, 2007, Seligman Advisors incurred $738,418 and $7,226,552 of
expenses in respect of the U.S. Government Securities Fund and the High-Yield
Fund Class D shares, respectively, that were not reimbursed from the amounts
received from each Fund's 12b-1 Plan. These amounts were equal to 6.93% and
16.11%, respectively, of each Fund's Class D shares' net assets as of
December 31, 2007.

If the 12b-1 Plan is terminated in respect of Class D shares of a Fund, no
amounts (other than amounts accrued but not yet paid) would be owed by the Fund
to Seligman Advisors with respect to its Class D shares.

Class R

Under the 12b-1 Plan, each Fund, with respect to Class R shares, is authorized
to pay monthly to Seligman Advisors a 12b-1 fee at an annual rate of up to
0.50% of the average daily net asset value of the Class R shares. This 12b-1
fee is comprised of (1) a distribution fee equal to 0.25% of the average daily
net assets attributable to the Class R shares and (2) a service fee of up to
0.25% of the average daily net asset value of the Class R shares. The 12b-1 fee
is used by Seligman Advisors in one of two ways, depending on the payout option
chosen by Service Organizations. This fee is used by Seligman Advisors as
follows:

Option 1 - Service Organization opts for time-of-sale payment. A distribution
fee of 0.25% of the average daily net assets attributable to such Class R
shares is used, along with any CDSC proceeds, to (1) reimburse Seligman
Advisors for its payment at the time of sale of Class R shares of a 0.75% sales
commission to the Service Organization, and (2) pay for other distribution
expenses, including paying for the preparation of advertising and sales
literature and the printing and distribution of such promotional materials and
prospectuses to prospective investors and other marketing costs of Seligman
Advisors. In addition, during the first year following the sale of Class R
shares, a service fee of up to 0.25% of the average daily net assets
attributable to such Class R shares is used to reimburse Seligman Advisors for
its prepayment to the Service Organization at the time of sale of Class R
shares of a service fee of 0.25% of the net asset value of the Class R shares
sold (for shareholder services to be provided to Class R shareholders over the
course of the one year immediately following the sale). After the initial
one-year period following a sale of Class R shares, the 0.25% servicing fee is
used to reimburse Seligman Advisors for its payments to the Service
Organization for providing continuing shareholder services. The payment of
service fees to Seligman Advisors is limited to amounts Seligman Advisors
actually paid to Service Organizations at the time of sale as service fees.

Option 2 - Service Organization does not opt for time-of-sale payment. The
entire 12b-1 fee attributable to the sale of the Class R shares, along with any
CDSC proceeds, is used to (1) reimburse Seligman Advisors for its on-going
payment of the entire 12b-1 fees attributable to such Class R shares to the
Service Organization for providing continuing shareholder services and
distribution assistance in respect of a Fund and (2) pay for other distribution
expenses, including paying for the preparation of advertising and sales
literature and the printing and distribution of such promotional materials and
prospectuses to prospective investors and other marketing costs of Seligman
Advisors.

The total amount of distribution and service fees paid to Seligman Advisors in
respect of Class R shares of the U.S. Government Securities Fund and the
High-Yield Fund for the year ended December 31, 2007 was $7,342 and $11,961,
respectively, or 0.50% per annum of each Fund's Class R shares' average daily
net assets.

The amounts expended by Seligman Advisors in any one year with respect to Class
R shares of each Fund may exceed the 12b-1 fees paid by such Fund in that year.
Each Fund's 12b-1 Plan permits expenses incurred by Seligman Advisors in
respect of Class R shares in one fiscal year to be paid from Class R 12b-1 fees
in any other fiscal year; however, in any fiscal year a Fund is not obligated
to pay any 12b-1 fees in excess of the fees described above.

As of December 31, 2007, Seligman Advisors incurred $58,469 and $82,903 of
expenses in respect of the U.S. Government Securities Fund and the High-Yield
Fund Class R shares, respectively, that were not reimbursed from the amounts
received from each Fund's 12b-1 Plan. These amounts were equal to 3.07% and
2.15%, respectively, of each Fund's Class R shares' net assets as of
December 31, 2007.

If the 12b-1 Plan is terminated in respect of Class R shares of a Fund, no
amounts (other than amounts accrued but not yet paid) would be owed by such
Fund to Seligman Advisors with respect to Class R shares.

Payments made by the U.S. Government Securities Fund under its 12b-1 Plan for
the year ended December 31, 2007, were spent on the following activities in the
following amounts:

Class A Class B Class C Class D Class R
------- ------- ------- ------- -------

Compensation to underwriters... $ -0- $ 121 $ 1,382 $ 9,493 $ 33
Compensation to broker/dealers. 88,631 14,805 38,547 96,617 7,309
Other Compensation*............ -0- 44,612 -0- -0- -0-

- --------
* Payment is made to the Purchasers to compensate them for having funded, at
the time of sale, payments to broker/dealers and underwriters.

Payments made by the High-Yield Fund under its 12b-1 Plan for the year ended
December 31, 2007, were spent on the following activities in the following
amounts:

Class A Class B Class C Class D Class R
-------- -------- -------- -------- -------

Compensation to underwriters... $ -0- $ 324 $ 11,058 $ 18,991 $ 15
Compensation to broker/dealers. 433,874 91,108 212,187 506,896 11,946
Other Compensation*............ -0- 274,827 -0- -0- -0-

- --------
* Payment is made to the Purchasers to compensate them for having funded, at
the time of sale, payments to broker/dealers and underwriters.

The 12b-1 Plan was initially approved with respect to each Fund on April 8,
1986 by the Board of Trustees of the Series, including a majority of the
Trustees who are not "interested persons" (as defined in the 1940 Act) of the
Series and who had no direct or indirect financial interest in the operation of
the 12b-1 Plan or in any agreement related to the Plan ("Qualified Trustees")
and by the shareholders of each Fund at a meeting of shareholders on April 10,
1986. The Plan was approved with respect to Class B shares of the High-Yield
Fund on March 21, 1996 by the Board of Trustees of the Series, including a
majority of the Qualified Trustees, and became effective in respect of the
Class B shares of the High-Yield Fund on April 22, 1996. The Plan was approved
with respect to Class B shares of the U.S. Government Securities Fund on
September 19, 1996 by the Board of Trustees of the Series, including a majority
of the Qualified Trustees, and became effective in respect of Class B shares of
the U.S. Government Securities Fund on January 1, 1997. The Plan was approved
in respect of Class C shares of both Funds on May 20, 1999 by the Board of
Trustees, including a majority of the Qualified Trustees, and became effective
in respect of Class C shares of both Funds on June 1, 1999. The Plan was
approved in respect of the Class D shares of both Funds on July 15, 1993 by the
Board of Trustees of the Fund, including a majority of the Qualified Trustees,
and became effective in respect of the Class D shares of both Funds on
September 21, 1993. The 12b-1 Plan in respect of each Fund was approved in
respect of Class R shares on March 20, 2003 by the Board of Trustees, including
a majority of the Qualified Trustees, and became effective in respect of Class
R shares of both Series on April 30, 2003. The Plans will continue in effect
until December 31 of each year so long as such continuance is approved annually
by a majority vote of both the Trustees and the Qualified Trustees of the
Series, cast in person at a meeting called for the purpose of voting on such
approval. The Plan may not be amended to increase materially the amounts
payable to Service Organizations (as defined in each of the Fund's
prospectuses) with respect to a class without the approval of a majority of the
outstanding voting securities of such class. If the amount payable in respect
of Class A shares under the Plans is proposed to be increased materially, the
Series will either (1) permit holders of Class B shares to vote as a separate
class on the proposed increase or (2) establish a new class of shares subject
to the same payment under the Plans as existing Class A shares, in which case
the Class B shares will thereafter convert into the new class instead of into
Class A shares. No material amendment to the Plans may be made except by a
majority of both the Trustees and Qualified Trustees.

The 12b-1 Plans require that the Treasurer of the Series shall provide to the
Trustees, and the Trustees shall review, at least quarterly, a written report
of the amounts expended (and purposes therefor) under the Plans. Rule 12b-1
also requires that the selection and nomination of Trustees who are not
"interested persons" of the Fund be made by such disinterested Trustees. The
12b-1 Plan is reviewed annually by the Trustees.

Seligman Services acts as the broker/dealer of record for shareholder accounts
of each Fund that do not have a designated financial advisor and receives
compensation pursuant to each Series' 12b-1 Plan for providing

personal services and account maintenance to such accounts. For the year ended
December 31, 2007, Seligman Services received service fees pursuant to the U.S.
Government Securities Fund's 12b-1 Plan in the amounts of $8,433. For the years
ended December 31, 2007, Seligman Services received service fees pursuant to
the High-Yield Fund's 12b-1 Plan in the amounts of $13,823.

Other Service Providers

SDC, which is owned by certain other investment companies in the Seligman
Group, is the shareholder servicing agent and dividend paying agent for the
Funds. SDC charges the Funds at cost for its services. These costs may include
amounts paid by SDC to financial intermediaries and other third parties who
provide sub-transfer agency services. Certain officers and trustees of the
Series are also officers and directors of SDC. SDC's address is 100 Park
Avenue, New York, New York 10017.

Portfolio Managers

For purposes of this discussion, each member of a Fund's portfolio team is
referred to as a "portfolio manager". The following table sets forth certain
additional information from that discussed in the Prospectuses with respect to
the portfolio managers of each Fund. Unless noted otherwise, all information is
provided as of December 31, 2007.

Other Accounts Managed by Portfolio Managers. The tables below identify, for
each of the portfolio managers of the High-Yield Fund and the Seligman U.S.
Government Securities Fund, the number of accounts managed (other than the Fund
managed by its portfolio manager(s)) and the total assets in such accounts,
within each of the following categories: other registered investment companies,
other pooled investment vehicles, and other accounts. None of the accounts
noted below has an advisory fee based on performance of the account. For
purposes of the tables below, each series or portfolio of a registered
investment company is treated as a separate registered investment company.

Seligman High-Yield Fund

Other Registered
Portfolio Manager Investment Companies Other Pooled Investment Vehicles Other Accounts
- ----------------- ----------------------------- -------------------------------- --------------------------

J. Eric Misenheimer 2 Other Registered 1 Other Pooled Investment 3 Other Accounts with
Investment Companies Vehicle with approximately $607,000 in
with approximately approximately $6.7 million total assets under
$107.1 million in net in net assets under management.
assets under management. management.

Paul A. Langlois 2 Other Registered 1 Other Pooled Investment 1 Other Account with
Investment Companies Vehicle with approximately $146,000 in
with approximately approximately $6.7 million total assets under
$107.1 million in net in net assets under management.
assets under management. management.

Henry P. Rose 2 Other Registered 1 Other Pooled Investment 3 Other Accounts with
Investment Companies Vehicle with approximately $959,000 in
with approximately approximately $6.7 million total assets under
$107.1 million in net in net assets under management.
assets under management. management.

Seligman U.S. Government Securities Fund

Other Registered Other Pooled Investment
Portfolio Manager Investment Companies Vehicles Other Accounts
- ----------------- ------------------------ --------------------------- ---------------------------

Francis L. Mustaro 5 Other Registered 1 Other Pooled Investment 20 Other Accounts with
Investment Companies Vehicle with approximately $310 million
with approximately approximately $1.2 million in total assets under
$292.0 million in net in net assets under management.
assets under management. management.

Compensation/Material Conflicts of Interest. Set forth below is an explanation
of the structure of, and method(s) used to determine, portfolio manager
compensation. Also set forth below is an explanation of material conflicts of
interest that may arise between the portfolio managers' management of their
Fund's investments and investments in other accounts.

Compensation:

For the year ended December 31, 2007, as compensation for his responsibilities,
Mr. Misenheimer received a base salary and a discretionary bonus. The
discretionary bonus was based on numerous qualitative and quantitative factors
relating to Mr. Misenheimer's responsibilities as portfolio manager and High
Yield Team Leader. The factors include, among other things, the investment
performance of the Seligman mutual funds managed by Mr. Misenheimer (including
the High Yield Fund) as compared with these funds' respective Lipper averages,
primarily for the year 2007, but also for the previous years since
Mr. Misenheimer joined Seligman, an evaluation of Mr. Misenheimer's leadership
abilities with respect to his investment team, his contributions to Seligman's
other investment teams, as well as the competitive environment for
Mr. Misenheimer's services.

For the year ended December 31, 2007, as compensation for his responsibilities,
Mr. Mustaro received a base salary and a discretionary bonus. The discretionary
bonus was based on numerous qualitative and quantitative factors relating to
Mr. Mustaro's responsibilities as portfolio manager and Investment Grade Team
Leader. The factors include, among other things, the investment performance of
the Seligman mutual funds managed by Mr. Mustaro (including the U.S. Government
Securities Fund) as compared with these funds' respective Lipper averages,
primarily for the year 2007, but also for the previous year since Mr. Mustaro
joined Seligman, an evaluation of Mr. Mustaro's leadership abilities with
respect to his investment team, his contributions to Seligman's other
investment teams, as well as the competitive environment to retain his services.

As compensation for their responsibilities, each of Messrs. Langlois and Rose
received a base salary and discretionary bonus for the year ended December 31,
2007.

Discretionary bonuses for each of Messrs. Langlois and Rose were based on
numerous qualitative and quantitative factors, including, among other things,
an evaluation of each portfolio manager's skills as a research analyst (i.e.,
quality of research), their particular contributions to their respective
investments teams (as well as their contributions to other Seligman investment
teams), their ability to take initiative with respect to new
roles/responsibilities, their leadership abilities and potential for growth as
a portfolio manager, their ability to assimilate new concepts and ideas, their
ability to work within a team structure, as well as the competitive environment
for the portfolio manager's services.

To reduce the amount of time the portfolio managers dedicate to marketing
efforts and client services, each Fund's investment team has an experienced
product manager that acts as the primary liaison between Seligman Advisors'
marketing department and that investment team.

Conflicts of Interest

Actual or potential conflicts of interest may arise from the fact that
Seligman, and the portfolio managers of each Fund have day-to-day management
responsibilities with respect to accounts of clients of Seligman other than the

Fund ("Other Accounts"). Seligman has policies and procedures intended to
mitigate or manage the conflicts of interest described below. There is no
guarantee that any such policies or procedures will detect each and every
situation in which a conflict of interest arises.

Seligman may receive higher compensation with respect to Other Accounts
(including accounts which are private investment funds or have performance or
higher fees paid to Seligman, or in which one or more portfolio managers have
direct or indirect personal interest in the receipt of such fees) than that
received with respect to each Fund. This may create a potential conflict of
interest for Seligman or its portfolio managers by providing an incentive to
favor these Other Accounts when, for example, placing securities transactions.
In addition, Seligman could be viewed as having a conflict of interest to the
extent that Seligman or an affiliate has a proprietary investment in one or
more Other Accounts, the portfolio managers have personal investments, directly
or indirectly, in one or more Other Accounts or the Other Accounts are
investment options in Seligman's employee benefit plans. Potential conflicts of
interest may arise with both the aggregation and allocation of securities
transactions and allocation of limited investment opportunities. Allocations of
aggregated trades, particularly trade orders that were only partially completed
due to limited availability, and allocation of investment opportunities
generally, could raise a potential conflict of interest, as Seligman may have
an incentive to allocate securities that are expected to increase in value to
favored accounts. Initial public offerings, in particular, are frequently of
very limited availability. Seligman may be perceived as causing accounts it
manages to participate in an offering to increase Seligman's overall allocation
of securities in that offering. A potential conflict of interest also may be
perceived to arise if transactions in one account closely follow related
transactions in a different account, such as when a purchase increases the
value of securities previously purchased by another account or when a sale in
one account lowers the sale price received in a sale by a second account.
Because Seligman manages accounts that engage in short sales of securities of
the type in which many clients may invest, Seligman could be seen as harming
the performance of certain client accounts (i.e., those not engaging in short
sale transactions) for the benefit of the accounts engaging in short sales if
the short sales cause the market value of the securities to fall. Conversely,
Seligman could be seen as benefiting those accounts that may engage in short
sales through the sale of securities held by other clients to the extent that
such sales reduce the cost to cover the short positions.

Seligman and its affiliates may at times give advice or take action with
respect to accounts that differs from the advice given other accounts. A
particular security may be bought or sold only for certain clients even though
it could have been bought or sold for other clients at the same time. Likewise,
a particular security may be bought for one or more clients when one or more
other clients are selling the security. Simultaneous portfolio transactions in
the same security by multiple clients may tend to decrease the prices received
by clients for sales of such securities and increase the prices paid by clients
for purchases of such securities. A conflict may also arise to the extent that
Seligman advises multiple accounts which own different capital structures of an
issuer (e.g., bonds versus common stocks). This conflict may be more pronounced
if such an issuer files for bankruptcy and Seligman participates in
negotiations to restructure that issuer.

Employees of Seligman, including portfolio managers, may engage in personal
trading, subject to Seligman's Code of Ethics. In addition to the general
conflicts noted above, personal trading by employees may create apparent or
actual conflicts to the extent that one or more employees personally benefit or
appear to benefit from subsequent trading by clients in similar securities.

Because portfolio managers of Seligman manage multiple client accounts,
portfolio managers may devote unequal time and attention to the portfolio
management of client accounts.

Securities Ownership. As of December 31, 2007, with respect to the High-Yield
Fund, Mr. Misenheimer and Mr. Langlois each owned between $10,001 and $50,000
of its shares. As of December 31, 2007, with respect to the U.S. Government
Securities Fund, Mr. Mustaro owned between $1 and $10,000 of its shares.

Portfolio Transactions and Other Practices

Portfolio Transactions

Seligman will seek the most favorable price and execution in the purchase and
sale of portfolio securities for each Fund of the Series. When two or more of
the investment companies in the Seligman Group of Funds or

other investment advisory clients of Seligman desire to buy or sell the same
security at the same time, the securities purchased or sold are allocated by
Seligman in a manner believed to be equitable to each. There may be possible
advantages or disadvantages of such transactions with respect to price or the
size of positions readily obtainable or saleable.

Corporate bonds and other fixed-income securities are generally traded on the
over-the-counter market on a "net" basis without a stated commission, through
dealers acting for their own account and not as brokers. The Series will engage
in transactions with these dealers or deal directly with the issuer. Prices
paid to dealers will generally include a "spread," i.e., the difference between
the prices at which a dealer is willing to purchase or to sell the security at
that time. The Management Agreements recognize that in the purchase and sale of
portfolio securities, Seligman will seek the most favorable price and execution
and, consistent with that policy, may give consideration to the research,
statistical and other services furnished by dealers to Seligman for its use in
connection with its services to the Funds as well as to other clients.

The Funds will not incur commissions in connection with the purchase and sale
of fixed-income securities. Because fixed-income securities generally trade on
a net basis, they normally do not incur brokerage commissions. For the years
ended December 31, 2007, 2006 and 2005, the Seligman High-Yield Fund paid total
brokerage commissions to others for execution, research and statistical
services in the amounts of $86,009, $119,351 and $9,000, respectively. Such
variations result primarily from periodic sales of equity securities (as
opposed to fixed-income securities) by the Fund.

Commissions

For the years ended December 31, 2007, 2006 and 2005, the Funds did not execute
any portfolio transactions with, and therefore did not pay any commissions to,
any broker affiliated with the Funds, Seligman, or Seligman Advisors.

Brokerage Selection

Seligman selects broker-dealers with the goal of obtaining "best execution".
Seligman will consider a full range and quality of a broker-dealer's services,
such as price, market familiarity, reliability, integrity, commission rates,
execution and settlement capabilities, ability to handle large orders,
financial condition, technological infrastructure and operational capabilities,
willingness to commit capital and the brokerage and research services provided
or made available by the broker-dealer. These brokerage and research services,
including supplemental investment research, analysis, and reports concerning
issuers, industries, and securities, may be useful to Seligman in connection
with its services to clients other than the Funds. The relative weighting given
to any of the criteria mentioned above depends on a variety of factors
including the nature of the transaction, the market on which a particular trade
is being executed and the number of broker-dealers making a market in the
security to be traded.

Although sales of investment company shares will not be considered in selecting
broker-dealers to effect securities transactions, Seligman offers its
investment products primarily through the broker-dealer selling networks and
expects that nearly all broker-dealers that effect securities transactions for
the investment companies of the Seligman Group of Funds will have a
relationship with Seligman or its affiliates to distribute shares of the
investment companies or other investment products offered by Seligman. Seligman
ranks broker-dealers through an internal voting process which considers the
services provided by broker-dealers excluding investment company or product
sales by that broker-dealer.

In connection with any agency trades, Seligman determines the reasonableness of
the commissions to be paid to a broker-dealer based upon the quality of the
brokerage and research services provided, or arranged for, and as a result, may
select a broker-dealer whose commission costs may be higher than another would
have charged.

Seligman monitors and evaluates the performance and execution capabilities of
broker-dealers through which it places orders and periodically reviews its
policy with regard to negotiating commissions or mark-ups for the Seligman
Funds in light of current market conditions, statistical studies and other
available information.

Regular Broker-Dealers

During the year ended December 31, 2007, neither Fund of the Series acquired
securities of its regular brokers or dealers (as defined in Rule 10b-1 under
the 1940 Act) or of their parents.

Shares of Beneficial Interest and Other Securities

Shares of Beneficial Interest

The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest, $.001 par value. The
Trustees also have the power to create additional series of shares. At present,
shares of beneficial interest of two series have been authorized, which shares
of beneficial interest constitute interests in the U.S. Government Securities
Fund and the High-Yield Fund. Shares of beneficial interest of the U.S.
Government Securities Fund are divided into five classes, designated Class A,
Class B, Class C, Class D and Class R shares of beneficial interest (Class D
shares will be combined with Class C shares at the close of business on May 16,
2008. Accordingly, thereafter there will exist only four classes of shares ).
Shares of beneficial interest of the High-Yield Fund are divided into six
classes, designated Class A, Class B, Class C, Class D, Class I and Class R
shares of beneficial interest (Class D shares will be combined with Class C
shares at the close of business on May 16, 2008. Accordingly, thereafter there
will exist only five classes of shares). Each share of beneficial interest of
each Fund's respective classes is equal as to earnings, assets and voting
privileges, except that each class bears its own separate distribution and,
potentially, certain other class expenses and has exclusive voting rights with
respect to any matter to which a separate vote of any class is required by the
1940 Act or applicable state law. The Series has adopted a Plan ("Multiclass
Plan") pursuant to Rule 18f-3 under the 1940 Act permitting the issuance and
sale of multiple classes of shares of beneficial interest. In accordance with
the Declaration of Trust, the Trustees may authorize the creation of additional
classes of shares of beneficial interest with such characteristics as are
permitted by the Multiclass Plan and Rule 18f-3. The 1940 Act requires that
where more than one class exists, each class must be preferred over all other
classes in respect of assets specifically allocated to such class. Shares of
each Fund entitle their holders to one vote per share. Each Fund's shares have
noncumulative voting rights, do not have preemptive or subscription rights and
are transferable. It is the intention of the Series not to hold Annual Meetings
of Shareholders. The Trustees may call Special Meetings of Shareholders for
action by shareholder vote as may be required by the 1940 Act or Declaration of
Trust. Pursuant to the 1940 Act, shareholders have to approve the adoption of
any management contract, distribution plan and any changes in fundamental
investment policies. Shareholders also have the right to call a meeting of
shareholders for the purpose of voting on the removal of one or more Trustees.
Such removal can be effected upon the action of two-thirds of the outstanding
shares of the Series.

Other Securities

The Series has no authorized securities other than the above-mentioned shares.

Purchase, Redemption, and Pricing of Shares

Purchase of Shares

Class A

Purchase Price. Class A shares of each Fund of the Series may be purchased at a
price equal to the next determined net asset value per share, plus an initial
sales charge.

Employee and Family Members. Class A shares of the Funds may be issued without
a sales charge to present and former directors, trustees, officers, employees
(and their respective family members) of the Series, the other investment
companies in the Seligman Group of Funds, and Seligman and its affiliates.
Family members are defined to include lineal descendants and lineal ancestors,
siblings (and their spouses and children) and any company or organization
controlled by any of the foregoing. Such sales may also be made to employee
benefit plans and thrift plans for such persons and to any investment advisory,
custodial, trust or other fiduciary account managed or advised by Seligman or
any affiliate. The sales may be made for investment purposes only, and shares
may be resold only to the Funds. Class A shares may be sold at net asset value
to these persons since such sales require less sales effort and lower sales
related expenses as compared with sales to the general public.

If you are eligible to purchase Class A shares without a sales charge or
qualify for volume discounts, you should inform your financial advisor,
financial intermediary or SDC of such eligibility and be prepared to provide
proof thereof.

Purchases of Class A shares by a "single person" (as defined below under
"Persons Entitled to Reductions") may be eligible for the following reductions
in initial sales charges:

Discounts and Rights of Accumulation. Reduced sales charges will apply if the
sum of (i) the current amount being invested by a "single person" in Class A
shares of a Fund and in Class A shares of other Seligman mutual funds
(excluding Class A shares of the Seligman Cash Management Fund, Inc.), (ii) the
current net asset value of the Class A shares and Class B shares of other
Seligman mutual funds already owned by the "single person" other than Seligman
Cash Management Fund, Inc. (except as provided in (iii)) and (iii) the current
net asset value of Class A shares of Seligman Cash Management Fund, Inc. which
were acquired by a "single person" through an exchange of Class A shares of
another Seligman mutual fund, exceeds the breakpoint discount thresholds for
Class A shares described in the Prospectus (the "Breakpoint Discounts").

The value of the shares contemplated by items (ii) and (iii) above
(collectively, the "Prior Owned Shares") will be taken into account only if SDC
or the financial intermediary (if you are purchasing through a financial
intermediary) is notified that there are holdings eligible for aggregation to
meet the applicable Breakpoint Discount thresholds. If you are purchasing
shares through a financial intermediary, you should consult with your
intermediary to determine what information you will need to provide them in
order to receive the Breakpoint Discounts to which you may be entitled. This
information may include account records regarding shares eligible for
aggregation that are held at any financial intermediary, as well as a social
security or tax identification number. You may need to provide this information
each time you purchase shares. In addition, certain financial intermediaries
may prohibit you from aggregating investments in the Seligman Group if those
investments are held in your accounts with a different intermediary or with SDC.

If you are dealing directly with SDC, you should provide SDC with account
information for any shares eligible for aggregation. This information includes
account records and a social security or tax identification number. You may
need to provide this information each time you purchase shares.

Letter of Intent. A letter of intent allows you to purchase Class A shares over
a 13-month period with the benefit of the Breakpoint Discounts discussed in the
Prospectus, based on the total amount of Class A shares of the Fund that the
letter states that you intend to purchase plus the current net asset value of
the Prior Owned Shares. Reduced sales charges may be applied to purchases made
within a 13-month period starting from the date of receipt from you of a letter
of intent. In connection with such arrangement, a portion of the shares you
initially purchase will be held in escrow to provide for any sales charges that
might result if you fail to purchase the amount of shares contemplated by the
letter of intent assuming your purchases would not otherwise be eligible for
Breakpoint Discounts. These shares will be released upon completion of the
purchases contemplated by the letter of intent. In the event you do not fulfill
your obligations and the amount of any outstanding sales charge is greater than
the value of the shares in escrow, you will be required to pay the difference.
If the amount of the outstanding sales charge is less than the value of the
shares in escrow, you will receive any shares remaining in escrow after shares
with a value equal to the amount of the outstanding sales charge are redeemed
by the transfer agent.

Persons Entitled To Reductions. Reductions in initial sales charges apply to
purchases of Class A shares in an account held by a "single person." A "single
person" includes an individual; members of a family unit comprising, husband,
wife and minor children; or a trustee or other fiduciary purchasing for a
single fiduciary account. Employee benefit plans qualified under Section 401 of
the Internal Revenue Code of 1986, as amended, organizations tax exempt under
Section 501(c)(3) or (13) of the Internal Revenue Code, and non-qualified
employee benefit plans that satisfy uniform criteria are also considered
"single persons" for this purpose. The uniform criteria are as follows:

1. Employees must authorize the employer, if requested by a Fund, to receive
in bulk and to distribute to each participant on a timely basis any Fund's
Prospectuses, reports, and other shareholder communications.

2. Employees participating in a plan will be expected to make regular
periodic investments (at least annually). A participant who fails to make such
investments may be dropped from the plan by the employer or the Fund 12 months
and 30 days after the last regular investment in his account. In such event,
the dropped participant would lose the discount on share purchases to which the
plan might then be entitled.

3. The employer must solicit its employees for participation in such an
employee benefit plan or authorize and assist an investment dealer in making
enrollment solicitations.

Eligible Employee Benefit Plans. The table of sales charges in each of the
Series' Prospectuses applies to sales to "eligible employee benefit plans,"
except that the Fund may sell shares at net asset value to "eligible employee
benefit plans" which have at least $2 million in plan assets at the time of
investment in a Fund, but, in the event of plan termination, will be subject to
a CDSC of 1 % on shares purchased within 18 months prior to plan termination.
"Eligible employee benefit plan" means any plan or arrangement, whether or not
tax qualified, which provides for the purchase of Fund shares. Sales to
eligible employee benefit plans are believed to require limited sales effort
and sales-related expenses and therefore are made at net asset value. However,
Section 403(b) plans sponsored by public educational institutions are not
eligible for net asset value purchases based on the aggregate investment made
by the plan or number of eligible employees.

Sales to eligible employee benefit plans must be made in connection with a
payroll deduction system of plan funding or other systems acceptable to SDC,
the Series' shareholder service agent. Contributions or account information for
plan participation also should be transmitted to SDC by methods which it
accepts. Additional information about "eligible employee benefit plans" is
available from financial advisors or Seligman Advisors.

Ascensus (formerly, BISYS) Plans. Plans that (i) own Class B shares of any
Seligman mutual fund and (ii) participate in Seligman Growth 401(k) through
Ascensus' third-party administration platform may, with new contributions,
purchase Class A shares at net asset value. Class A shares purchased at net
asset value are subject to a CDSC of 1% on shares purchased within 18 months
prior to plan termination.

Further Types of Reductions. Class A shares may also be issued without an
initial sales charge in the following instances:

(1)to any registered unit investment trust which is the issuer of periodic
payment plan certificates, the net proceeds of which are invested in Fund
shares;

(2)to separate accounts established and maintained by an insurance company
which are exempt from registration under Section 3(c)(11) of the 1940 Act;

(3)to registered representatives and employees (and their spouses and minor
children) of any dealer or bank that has a sales agreement with Seligman
Advisors;

(4)to financial institution trust departments;

(5)to registered investment advisers exercising discretionary investment
authority with respect to the purchase of Fund shares;

(6)to accounts of financial institutions or authorized dealers or investment
advisors that charge account management fees, provided Seligman or one of
its affiliates has entered into an agreement with respect to such accounts;

(7)pursuant to sponsored arrangements with organizations which make
recommendations to, or permit group solicitations of, its employees, members
or participants in connection with the purchase of shares of the Fund;

(8)to other investment companies in the Seligman Group in connection with a
deferred fee arrangement for outside trustees, or through a "fund of funds"
arrangement;

(9)to certain "eligible employee benefit plans" as discussed above;

(10)to those partners and employees of outside counsel to the Series or its
directors or trustees who regularly provide advice and services to the
Series, to other funds managed by Seligman, or to their directors or
trustees;

(11)in connection with sales pursuant to a retirement plan alliance program
which has a written agreement with Seligman Advisors; and

(12)to participants in retirement and deferred compensation plans and trusts
used to fund those plans, including, but not limited to, those defined in
Section 401(a), 401(k), 403(b), or 457 of the Internal Revenue Code and
"rabbi trusts", for which Charles Schwab & Co., Inc. or an affiliate acts a
broker-dealer, trustee, or record keeper.

CDSC Applicable to Class A Shares. Class A shares purchased without an initial
sales charge due to a purchase of $1,000,000 or more, alone or through a volume
discount, Right of Accumulation or letter of intent, are subject to a CDSC of
1% on redemptions of such shares within 18 months of purchase. Employee benefit
plans eligible for net asset value sales may be subject to a CDSC of 1% for
terminations at the plan level only, on redemptions of shares purchased within
18 months prior to plan termination, except that any such plan that is or was a
separate account client of Seligman at the time of initial investment in a
Seligman mutual fund (or within the prior 30 days) will not be subject to a
CDSC on redemption of any shares. Other available reductions will not be
subject to a 1% CDSC. The 1% CDSC will be waived on shares of each Fund
purchased through Morgan Stanley Dean Witter & Co. by certain Chilean
institutional investors (i.e., pension plans, insurance companies, and mutual
funds). Upon redemption of such shares within an 18-month period, Morgan
Stanley Dean Witter will reimburse Seligman Advisors a pro rata portion of the
fee it received from Seligman Advisors at the time of sale of such shares.

See "CDSC Waivers" below for other waivers which may be applicable to Class A
shares.

Class B

Class B shares of each Fund of the Series may be purchased at a price equal to
the next determined net asset value, without an initial sales charge. However,
Class B shares of each Fund are subject to a CDSC if the shares are redeemed
within six years of purchase at rates set forth in the table below, charged as
a percentage of the current net asset value or the original purchase price,
whichever is less.

Years Since Purchase CDSC
-------------------- ----

Less than 1 year 5%
1 year or more but less than 2 years 4%
2 years or more but less than 3 years 3%
3 years or more but less than 4 years 3%
4 years or more but less than 5 years 2%
5 years or more but less than 6 years 1%
6 years or more 0%

Approximately eight years after purchase, Class B shares will convert
automatically to Class A shares. Shares purchased through reinvestment of
dividends and capital gain distributions on Class B shares also will convert
automatically to Class A shares along with the underlying shares on which they
were earned.

Conversion occurs during the month which precedes the eighth anniversary of the
purchase date. If Class B shares of a Fund are exchanged for Class B shares of
another Seligman Mutual Fund, the conversion period applicable to the Class B
shares acquired in the exchange will apply, and the holding period of the
shares exchanged will be tacked onto the holding period of the shares acquired.
Class B shareholders of a Fund exercising the exchange privilege will continue
to be subject to the Fund's CDSC schedule if such schedule is higher or longer
than the CDSC schedule relating to the new Class B shares. In addition, Class B
shares of the Fund acquired by exchange will be subject to the Fund's CDSC
schedule if such schedule is higher or longer than the CDSC schedule relating
to the Class B shares of the Seligman mutual fund from which the exchange has
been made.

Class C

Class C shares may be purchased at a price equal to the next determined net
asset value without an initial sales charge. However, Class C shares are
subject to a CDSC of 1% if the shares are redeemed within one year of purchase,
charged as a percentage of the current net asset value or the original purchase
price, whichever is less. Unlike Class B shares, Class C shares do not convert
to Class A shares.

Class D (NOT AVAILABLE AFTER MAY 16, 2008)

Effective at the close of business (4:00 p.m. EST) on May 16, 2008, the Funds'
Class D shares will be combined with Class C shares, and Class D shares will no
longer be available. Purchase orders for Class D shares to be effective on or
after May 9, 2008 through May 16, 2008 may, in the Funds' discretion, be
rejected due to operational reasons relating to the combination; if you are
considering purchasing Class D shares during such period, you should consider
Class C shares instead (consult your financial advisor as necessary).

Any orders for exchange or redemption of the Funds' Class D shares to be
effective through May 16, 2008 will continue to be accepted in accordance with
the Prospectus. All orders (i.e., purchases, exchanges and redemptions) for
Class D shares to be effective after the close of business on May 16, 2008
cannot be processed because no Class D shares will be outstanding or offered.
Class D shares are identical in their terms to the Class C shares.

When offered, Class D shares of each Fund of the Series may be purchased at a
price equal to the next determined net asset value, without an initial sales
charge. However, Class D shares of each Fund are subject to a CDSC of 1% if the
shares are redeemed within one year of purchase, charged as a percentage of the
current net asset value or the original purchase price, whichever is less.
Unlike Class B shares, Class D shares do not convert to Class A shares.

Class I

Class I shares may be purchased at a price equal to the next determined net
asset value. Class I shares are not subject to any initial or contingent
deferred sales charges or distribution expense. This Class, however, is only
offered to certain types of investors. Persons who are eligible to purchase
Class I shares of the Seligman High-Yield Fund are described in the Prospectus
for the Class I shares. Unlike Class B shares, Class I shares do not convert to
Class A shares.

Class R

Class R shares may be purchased at a price equal to the next determined net
asset value, without an initial sales charge. However, Class R shares are
subject to a CDSC of 1% if the shares are redeemed within one year of the
plan's initial purchase of Class R shares, charged as a percentage of the
current net asset value or the original purchase price, whichever is less.
Unlike Class B shares, Class R shares do not convert to Class A shares.

Systematic Withdrawals. Class B, Class C, Class D and Class R shareholders of
each Fund who reinvest both their dividends and capital gain distributions to
purchase additional shares of each Fund, respectively, may use that Fund's
Systematic Withdrawal Plan to withdraw up to 12%, 10%, 10% and 10%,
respectively, of the value of their accounts per year without the imposition of
a CDSC. Account value is determined as of the date the systematic withdrawals
begin.

CDSC Waivers. The CDSC on Class B, Class C, Class D and Class R shares of each
Fund (and certain Class A shares, as discussed above) will be waived or reduced
in the following instances:

(1)on redemptions following the death or disability (as defined in
Section 72(m)(7) of the Internal Revenue Code) of a shareholder or
beneficial owner;

(2)in connection with (1) distributions from retirement plans qualified under
Section 401(a) of the Internal Revenue Code when such redemptions are
necessary to make distributions to plan participants (such

payments include, but are not limited to, death, disability, loans,
retirement, or separation of service), (2) distributions from a custodial
account under Section 403(b)(7) of the Internal Revenue Code or an IRA due
to death, or disability, minimum distribution requirements after attainment
of age 70 1/2 or, for accounts established prior to January 1, 1998,
attainment of age 59 1/2, and (3) a tax-free return of an excess
contribution to an IRA;

(3)in whole or in part, in connection with shares sold to current and retired
Trustees of the Series;

(4)in whole or in part, in connection with shares sold to any state, county, or
city or any instrumentality, department, authority, or agency thereof, which
is prohibited by applicable investment laws from paying a sales load or
commission in connection with the purchase of any registered investment
management company;

(5)in whole or in part, in connection with systematic withdrawals;

(6)in connection with participation in the Merrill Lynch Small Market 401(k)
Program, retirement programs administered or serviced by the Princeton
Retirement Group, Paychex, ADP Retirement Services, Hartford Securities
Distribution Company, Inc., or NYLIM Service Company LLC, or retirement
programs or accounts administered or serviced by Mercer HR Services, LLC or
its affiliates;

(7)on incidental redemptions to cover administrative expenses (such expenses
include, but are not limited to, trustee fees, wire fees or courier fees)
not to exceed $25.00 per occurrence;

(8)on redemptions of shares initially purchased by an eligible employee benefit
plan that are not in connection with a plan-level termination; and

(9)on any redemption of Class A shares that are purchased by an eligible
employee benefit plan that is a separate account client of Seligman at the
time of initial investment (or within the prior 30 days) in a Seligman
mutual fund.

If, with respect to a redemption of any Class A, Class B, Class C, Class D or
Class R shares of a Fund sold by a dealer, the CDSC is waived because the
redemption qualifies for a waiver as set forth above, the dealer shall remit to
Seligman Advisors promptly upon notice, an amount equal to the payment or a
portion of the payment made by Seligman Advisors at the time of sale of such
shares.

Payment in Securities. In addition to cash, the Funds may accept securities in
payment for shares of a Fund sold at the applicable public offering price (net
asset value and, if applicable, any sales charge). Generally, the Series will
only consider accepting securities (l) to increase its holdings in a portfolio
security of a Fund, or (2) if Seligman determines that the offered securities
are a suitable investment for a Fund and in a sufficient amount for efficient
management. Although no minimum has been established, it is expected that a
Fund would not accept securities with a value of less than $100,000 per issue
in payment for shares. The Series may reject in whole or in part offers to pay
for shares of a Fund with securities, may require partial payment in cash for
applicable sales charges, and may discontinue accepting securities as payment
for shares of a Fund at any time without notice. The Fund will not accept
restricted securities in payment for a Fund shares. The Series will value
accepted securities in the manner provided for valuing portfolio securities of
the Funds. Any securities accepted by the Funds in payment for a Fund's shares
will have an active and substantial market and have a value which is readily
ascertainable.

Fund Reorganizations

Class A shares of each Fund may be issued without an initial sales charge in
connection with the acquisition of cash and securities owned by other
investment companies. Any CDSC will be waived in connection with the redemption
of a Fund's shares if the Fund is combined with another Seligman mutual fund,
or in connection with a similar reorganization transaction.

Offering Price

When you buy or sell shares of a Fund of the Series, you do so at the Class's
net asset value ("NAV") next calculated after Seligman Advisors accepts your
request. However, in some cases, each Fund of the Series has authorized certain
financial intermediaries (and other persons designated by such financial
intermediaries) to receive purchase and redemption orders on behalf of each
Fund. In such instances, customer orders will be priced at the Class's NAV next
calculated after the authorized financial intermediary (or other persons
designated by such financial intermediary) receives the request. Any applicable
sales charge will be added to the purchase price for Class A shares.

NAV per share of each class of a Fund is determined as of the close of regular
trading on the New York Stock Exchange ("NYSE") (normally, 4:00 p.m. Eastern
time), on each day that the NYSE is open for business. The NYSE is currently
closed on New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day, and
Christmas Day. NAV per share for a class of a Fund is computed by dividing such
class's share of the value of the net assets of such Fund (i.e., the value of
its assets less liabilities) by the total number of outstanding shares of such
class. All expenses of a Fund, including the management fee, are accrued daily
and taken into account for the purpose of determining NAV. The dividends paid
with respect to the Class B, Class C, Class D and Class R shares will generally
be lower than the dividends paid with respect to the Class A shares as a result
of the higher 12b-1 fees with respect to such shares, which in turn will be
lower than the dividends paid with respect to the Class I shares, which have no
12b-1 fee and which may have lower expenses.

With respect to the High-Yield Fund, generally portfolio securities, on an
exchange are valued at the last sale price on the primary exchange or security
market on which such securities primarily are traded. Securities not listed on
an exchange or security market or for which there is no last sales price are
valued by independent pricing services based on bid prices, which consider such
factors as coupons, maturities, credit ratings, liquidity, specific terms and
features, and the US Treasury yield curve, or are valued by Seligman based on
quotations provided by primary market makers in such securities. If Seligman
concludes that the most recently reported (or closing) price of a security held
by the Fund is no longer valid or reliable, or such price is otherwise
unavailable, Seligman will value the security based upon its fair value as
determined in accordance with procedures approved by the Series' Board of
Trustees. In addition, fair value pricing may also be utilized, in accordance
with procedures approved by the Board of Directors in the event of, among other
things, natural disasters, acts of terrorism, market disruptions, intra-day
trading halts or extreme market volatility. With respect to the U.S. Government
Securities Fund, investments in US government and government agency obligations
are valued at current market values or, in their absence, at fair values
determined in accordance with procedures approved by the Series' Board of
Trustees. Securities traded on an exchange are valued at the last sales prices
or, in their absence and in the case of over-the-counter securities, at the
mean of bid and asked prices. For purposes of determining the net asset value
per share of a Fund of the Series, all assets and liabilities initially
expressed in foreign currencies will be converted into US dollars on the basis
of a pricing service that takes into account the quotes provided by a number of
major banks. Short-term obligations with 60 days or less remaining to maturity
are generally valued at current market quotations or amortized cost if Seligman
believes it approximates fair value. Short-term obligations with more than 60
days remaining to maturity will be valued at current market value until the
sixtieth day prior to maturity, and will then be valued as described above for
short-term obligations maturing in 60 days or less. Premiums received on the
sale of call options will be included in the net asset value, and current
market value of the options sold by a Series will be subtracted from net asset
value.

Specimen Price Make-Up

Under the current distribution arrangements between the Series and Seligman
Advisors, Class A shares of each Fund are sold with a maximum initial sales
charge of 4.50% and Class B, Class C, Class D, Class I (High-Yield Fund only)
and Class R shares of each Fund are sold at NAV/(1)/. (Class D shares will be
combined with Class C shares at the close of business on May 16, 2008). Using
each Class's NAV at December 31, 2007 of the U.S. Government Securities Fund
and of the High-Yield Fund, the maximum offering price of each Fund's shares is
as follows:

U.S. Government High-Yield
Securities Fund Fund
--------------- ----------

Class A
Net asset value per share.............................. $6.95 $3.17
Maximum initial sales charge (4.50% of offering price). 0.33 0.15
----- -----
Offering price to public............................... $7.28 $3.32
===== =====

Class B
Net asset value and offering price per share/(1)/...... $6.96 $3.17
===== =====

Class C
Net asset value and offering price per share/(1)/...... $6.96 $3.18
===== =====

Class D/(2)/
Net asset value and offering price per share/(1)/...... $6.96 $3.18
===== =====

Class I
Net asset value and offering price per share........... n/a $3.17
===== =====

Class R
Net asset value and offering price per share/(1)/...... $6.95 $3.17
===== =====

- --------
(1)Class B shares are subject to a CDSC declining from 5% in the first year
after purchase to 0% after six years. Class C shares and Class D shares are
subject to a 1% CDSC if you redeem your shares within one year of purchase.
Class R shares are subject to a 1% CDSC on shares redeemed within one year
of a retirement plan's initial purchase.
(2)Class D shares are not available after the close of business May 16, 2008.

Redemption in Kind

The procedures for selling a Fund's shares under ordinary circumstances are set
forth in each of the Fund's Prospectuses. In unusual circumstances, payment may
be postponed, or the right of redemption postponed for more than seven days,
if: (i) the orderly liquidation of portfolio securities is prevented by the
closing of, or restricted trading on, the NYSE; (ii) during periods of
emergency which make the disposal by a Fund of their shares impracticable or it
is not reasonably practicable for each of the Funds to fairly determine their
respective net assets; or (iii) such other periods as ordered by the SEC for
the protection of a Fund's shareholders. Under these circumstances, redemption
proceeds may be made in securities (i.e., a redemption in kind). If payment is
made in securities, a shareholder may incur brokerage expenses in converting
these securities to cash.

Anti-Money Laundering

As part of each Fund's responsibility for the prevention of money laundering,
you may be required by a Fund, Seligman or their respective service providers
to provide additional information, including information needed to verify the
source of funds used to purchase shares and your identity or the identity of
any underlying beneficial owners of your shares. In the event of delay or
failure by you to produce any requested information, a Fund or its service
providers may refuse to accept a subscription or, to the extent permitted or
required by applicable law, cause a complete redemption of your shares from a
Fund. A Fund, by written notice to you, may suspend payment to you of any
proceeds or distributions if the Fund or its service providers reasonably deem
it necessary to do so in order to comply with applicable laws and regulations,
including any anti-money laundering laws and regulations applicable to the
Fund, Seligman or their respective service providers.

Arrangements Permitting Frequent Trading of Fund Shares.

The Series has no arrangements with any person to permit frequent trading of a
Fund's shares.

Taxation of each Fund

Each Fund is qualified and intends to continue to qualify for tax treatment as
a regulated investment company under Subchapter M of the Internal Revenue Code.
For each year so qualified, each Fund will not be subject to federal income
taxes on its investment company taxable income and net capital gains, if any,
realized during any taxable year, which it distributes to its shareholders,
provided that at least 90% of its investment company taxable income (which
includes net short-term capital gains) is distributed to shareholders each year.

Qualification does not, of course, involve governmental supervision of
management or investment practices or policies. Investors should consult their
own counsel for a complete understanding of the requirements that each Fund
must meet to qualify for such treatment. The information set forth in the
Prospectuses and the following discussion relate solely to the US federal
income taxes on dividends and distributions by each Fund and assumes that each
Fund qualifies as a regulated investment company.

Dividends from net investment income (other than qualified dividend income) and
distributions from the excess of net short-term capital gains over net
long-term capital losses are taxable as ordinary income to shareholders,
whether received in cash or reinvested in additional shares. For taxable years
beginning before January 1, 2011, with respect to the High-Yield Fund,
dividends from qualified dividend income will be taxed at a reduced rate to
individuals of generally 15% (5% for individuals in lower tax brackets).
Qualified dividend income is, in general, dividend income from taxable domestic
corporations and certain foreign corporations (generally foreign corporations
incorporated in a possession of the United States or in certain countries with
a comprehensive tax treaty with the United States, or the stock of which is
readily tradable on an established securities market in the United States). The
amount of dividend income that may be designated as "qualified dividend income"
by a Fund will generally be limited to the aggregate of the eligible dividends
received by a Fund. In addition, each Fund must meet certain holding period
requirements with respect to the shares on which the Fund received the eligible
dividends, and the non-corporate US shareholder must meet certain holding
period requirements with respect to the Fund shares. To the extent designated
as derived from the Funds' dividend income that would be eligible for the
dividends received deduction if the Funds were not a regulated investment
company, distributions are eligible, subject to certain restrictions, for the
70% dividends received deduction for corporations.

If for any year a Fund does not qualify as a regulated investment company, all
of its taxable income (including its net capital gain) will be subject to tax
at regular corporate rates without any deduction for distributions to
shareholders. Such distributions will generally be taxable to the shareholders
as qualified dividend income and generally will be eligible for the dividends
received deduction in the case of corporate shareholders.

Distributions of net capital gains (i.e., the excess of net long-term capital
gains over any net short-term losses) are taxable as long-term capital gain,
whether received in cash or invested in additional shares, regardless of how
long the shares have been held by a shareholder. Non-corporate US shareholders
will be subject to federal income tax on distributions of net capital gains at
a maximum rate of 15% if designated as derived from a Fund's capital gains from
property held for more than one year and recognized in the taxable years
beginning before

January 1, 2011. Net capital gain of a corporate shareholder is taxed at the
same rate as ordinary income. Such distributions are not eligible for the
dividends received deduction allowed to corporate shareholders. Shareholders
receiving distributions in the form of additional shares issued by a Fund will
be treated for federal income tax purposes as having received a distribution in
an amount equal to the cash that could have been elected to be received instead
of the additional shares.

At December 31, 2007, the U.S. Government Securities Fund and the High-Yield
Fund had net capital loss carryforwards for federal income tax purposes of
$8,151,784 and $1,370,110,507, respectively, which are available for offset
against future taxable net capital gains, with $1,438,163 expiring in 2008,
$2,770,254 expiring in 2012, $1,912,635 expiring in 2013 and $2,030,732
expiring in 2014 for the U.S. Government Securities Fund and $255,659,981
expiring in 2008, $668,622,539 expiring in 2009, $444,283,739 expiring in 2010
and $1,544,248 expiring in 2012 for the High-Yield Fund. There is no assurance
that the Funds will be able to utilize all of its capital loss carryforward
before it expires.

Dividends and capital gain distributions declared in October, November or
December, payable to shareholders of record on a specified date in such a month
and paid in the following January will be treated as having been paid by each
Fund of the Series and received by each shareholder in December. Under this
rule, therefore, shareholders may be taxed in one year on dividends or
distributions actually received in January of the following year.

Any gain or loss realized upon a sale or redemption of shares in a Fund by a
shareholder who is not a dealer in securities will generally be treated as a
long-term capital gain or loss if the shares have been held for more than one
year and otherwise as a short-term capital gain or loss. Long-term capital gain
of a non-corporate US shareholder that is recognized in a taxable year
beginning before January 1, 2011 is generally taxed at a maximum rate of 15% in
respect of shares held for more than one year. Net capital gain of a corporate
shareholder is taxed at the same rate as ordinary income. However, if shares on
which a long-term capital gain distribution has been received are subsequently
sold or redeemed and such shares have been held for six months or less (after
taking into account certain hedging transactions), any loss realized will be
treated as long-term capital loss to the extent that it offsets the long-term
capital gain distribution. In addition, no loss will be allowed on the sale or
other disposition of shares of a Fund if, within a period beginning 30 days
before the date of such sale or disposition and ending 30 days after such date,
the holder acquires (including shares acquired through dividend reinvestment)
securities that are substantially identical to the shares of the Fund.

In determining gain or loss on shares of a Fund that are sold or exchanged
within 90 days after acquisition, a shareholder generally will not be permitted
to include in the tax basis attributable to such shares the sales charge
incurred in acquiring such shares to the extent of any subsequent reduction of
the sales charge by reason of the exchange or reinstatement options offered by
the Fund. Any sales charge not taken into account in determining the tax basis
of shares sold or exchanged within 90 days after acquisition will be added to
the shareholder's tax basis in the shares acquired pursuant to the exchange or
reinstatement options.

Each Fund is subject to a 4% nondeductible excise tax on the under-distribution
of amounts required to be paid under a prescribed formula. The formula requires
payment to shareholders during a calendar year of distributions representing at
least 98% of a Fund's ordinary income for the calendar year, at least 98% of
its net capital gain income realized during the one-year period ending on
October 31 during such year, and all ordinary income and net capital gain
income for prior years that was not previously distributed. Each Fund intends
to make sufficient distributions or deemed distributions of its ordinary income
and net capital gain income prior to the end of each calendar year to avoid
liability for the excise tax.

Unless a shareholder includes a certified taxpayer identification number
(social security number for individuals) on the account application and
certifies that the shareholder is not subject to backup withholding, the Fund
is required to withhold and remit to the US Treasury Department a portion of
distributions and other reportable payments to the shareholder. Shareholders
should be aware that, under regulations promulgated by the US Treasury
Department, the Funds may be fined on an annual basis for each account for
which a certified taxpayer identification number (social security number for
individuals) is not provided. In the event that such a fine is imposed, the
Funds may charge a service fee equal to such fine that may be deducted from the
shareholder's account and offset against any of its undistributed dividends and
capital gain distributions. The Funds also reserves the right to close any
account which does not have a certified taxpayer identification number or
social security number, as applicable.

Taxation of a shareholder who, as to the United States, is a nonresident alien
individual, foreign trust or estate, foreign corporation, or foreign
partnership ("foreign shareholder") depends on whether the income from a Fund
is "effectively connected" with a US trade or business carried on by such
shareholder. If the income from a Fund is not effectively connected with a US
trade or business carried on by a foreign shareholder, ordinary income
dividends paid to such foreign shareholders generally will be subject to a 30%
US withholding tax under existing provisions of the Internal Revenue Code
applicable to foreign individuals and entities unless a reduced rate of
withholding or a withholding exemption is provided under applicable treaty or
law. Nonresident shareholders are urged to consult their own tax advisers
concerning the applicability of the US withholding tax.

If the income from a Fund is effectively connected with a US trade or business
carried on by a foreign shareholder, then ordinary income dividends, capital
gain dividends, undistributed capital gains credited to such shareholder and
any gains realized upon the sale of shares of the Fund will be subject to US
federal income tax at the graduated rates applicable to US citizens or domestic
corporations, and a foreign corporate investor will also be subject to a branch
profits tax. In the case of foreign non-corporate shareholders, a Fund may be
required to backup withhold US federal income tax on distributions that are
otherwise exempt from withholding tax (or taxable at a reduced treaty rate)
unless such shareholders furnish the Fund with proper notification of their
foreign status.

The tax consequences to a foreign shareholder entitled to claim the benefits of
an applicable tax treaty may be different from those described herein. Foreign
shareholders are urged to consult their own tax advisers with respect to the
particular tax consequences to them of an investment in the Fund, the procedure
for claiming the benefit of a lower treaty rate and the applicability of
foreign taxes. Transfers by gift of shares of a Fund by an individual foreign
shareholder will not be subject to US federal gift tax, but the value of shares
of a Fund held by such a shareholder at his death will generally be includible
in his gross estate for US federal estate tax purposes, subject to any
applicable estate tax treaty.

Shareholders are urged to consult their tax advisors concerning the effect of
federal income and state and local taxes in their individual circumstances.

Underwriters

Distribution of Securities

The Series and Seligman Advisors are parties to a Distributing Agreement dated
January 1, 1993 under which Seligman Advisors acts as the exclusive agent for
distribution of shares of each Fund of the Series. Seligman Advisors accepts
orders for the purchase of Fund shares, which are offered continuously. As
general distributor of each Fund's shares, Seligman Advisors allows
reallowances to all dealers on sales of Class A shares as set forth above under
"Dealer Reallowances" and, prior to June 4, 2007, Class C shares. Seligman
Advisors retains the balance of sales charges and any CDSCs paid by investors.

Total initial sales charges paid by shareholders of Class A shares and (only
through June 3, 2007) Class C shares of the U.S. Government Securities Fund for
the years ended December 31, 2007, 2006 and 2005 amounted to $6,239, $7,958 and
$8,425, respectively, of which $647, $1,724, and $782, respectively was
retained by Seligman Advisors. Effective June 4, 2007, there is no initial
sales charge on purchases of Class C shares.

Total initial sales charges paid by shareholders of Class A shares and (only
through June 3, 2007) Class C shares of the High-Yield Fund for the years ended
December 31, 2007, 2006 and 2005 amounted to $44,365, $60,238 and $124,828,
respectively, of which $9,144, $13,581 and $15,695 was retained by Seligman
Advisors. Effective June 4, 2007, there is no initial sales charge on purchases
of Class C shares.

Compensation

Seligman Advisors, which is an affiliated person of Seligman, which is an
affiliated person of the Series, received the following commissions (including
sales charges after January 1, 2006 that otherwise would have been paid to
Seligman Services) and other compensation from each Fund during the year ended
December 31, 2007:

Net Underwriting Compensation on
Discounts and Redemptions and
Commissions (Class Repurchases (CDSC on Class
A and Class C Sales A, Class C, Class D and Brokerage Other
Fund Charges Retained)(1) Class R Shares Retained)(2) Commissions Compensation(3)
- ---- -------------------- --------------------------- ----------- ---------------

U.S. Government Securities Fund. $1,466 $ 2,776 $-0- $11,629
High-Yield Fund................. 6,277 19,502 -0- 30,388

- --------
(1)Effective June 4, 2007, there is no initial sales charges on purchases of
Class C shares. Accordingly, any net underwriting discounts and commissions
in respect of Class C shares retained by Seligman Advisors would relate to
purchases prior to June 4, 2007.
(2)Seligman Advisors has sold its rights to collect a substantial portion of
the distribution fees paid by the Funds in respect of their respective Class
B shares and any CDSC imposed on redemptions of Class B shares to the
Purchasers in connection with an arrangement discussed above under "Rule
12b-1 Plan."
(3)During the year ended December 31, 2006, Seligman Advisors received
distribution and service fees in respect of Class B, Class C, Class D and
Class R shares pursuant to each Fund's Rule 12b-1 Plan. These amounts and
the arrangements pursuant to which such compensation is paid are detailed
above under the discussion "Rule 12b-1 Plan."

Other Payments

Seligman Advisors pays authorized dealers and investment advisors, from its own
resources, a fee on purchases of Class A shares of the Seligman mutual funds
(other than Seligman TargetHorizon ETF Portfolios, Inc. (the "TargETFunds") and
Seligman Cash Management Fund, Inc. (the "Cash Fund")) of $1,000,000 or more
("NAV sales"), calculated as follows:

Amount of Purchase Payment to Dealer (as a % of NAV Sales)
------------------ ---------------------------------------

$1,000,000 - $3,999,999.. 1.00%
$4,000,000 - $24,999,999. 0.50%
$25,000,000 or more...... 0.25%

With respect to purchases of Class A shares of the TargETFunds, Seligman
Advisors shall pay authorized dealers and investment advisors 0.25% on NAV
sales attributable to such funds. Assets exchanged from the TargETFunds to
another Seligman mutual fund are not eligible for the fees described above.
Class A shares representing only an initial purchase of the Cash Fund are not
eligible for the fees described above; however, such shares will become
eligible for the applicable fee described above once they are exchanged for
Class A shares of another Seligman mutual fund. The calculation of the fee will
be based on assets held by a "single person," including an individual, members
of a family unit comprising husband, wife and minor children purchasing
securities for their own account, or a trustee or other fiduciary purchasing
for a single fiduciary account or single trust. Purchases made by a trustee or
other fiduciary for a fiduciary account may not be aggregated with purchases
made on behalf of any other fiduciary or individual account.

Seligman Advisors also pays authorized dealers and investment advisors, from
its own resources, a fee on assets of certain investments in Class A shares of
the Seligman mutual funds participating in an "eligible employee benefit plan"
that are attributable to the particular authorized dealer or investment
advisor. The shares eligible for the applicable fee described below are those
on which an initial sales charge was not paid because either the participating
eligible employee benefit plan has, for accounts opened prior to January 7,
2008, at least (1) $500,000 invested in the Seligman mutual funds or (2) 50
eligible employees to whom such plan is made available or, for accounts opened
on or after January 7, 2008, at least $2 million in plan assets at the time of
investment in a Fund. The payment schedule, for each calendar year, in respect
of the Seligman mutual funds (other than the TargETFunds and the Cash Fund) is
as follows:

Amount of Purchase Payment to Dealer (as a % of NAV Sales)
- ------------------ ---------------------------------------

Sales up to but not including $4,000,000. 1.00%
$4,000,000 - $24,999,999................. 0.50%
$25,000,000 or more...................... 0.25%

The payment is based on cumulative sales for each plan during a single calendar
year, or portion thereof. Assets exchanged from the TargETFunds to another
Seligman mutual fund are not eligible for the fees described above. Class A
shares representing only an initial purchase of the Cash Fund are not eligible
for the fees described above; however, such shares will become eligible for the
applicable fee once they are exchanged for Class A shares of another Seligman
mutual fund. The payment schedule, for each calendar year, in respect of the
TargETFunds is 0.25% of sales. These fees in respect of eligible employee
benefit plans and the fees on NAV sales described above are not duplicative
(i.e., the fee is paid one time to authorized dealers or investment advisors
for each purchase of Class A shares of $1,000,000 or more participating in an
eligible employee benefit plan).

With respect to the fees relating to eligible employee benefit plans and NAV
sales (each as described above), no fees shall be payable on any assets
invested in a Fund by an eligible employee benefit plan that is a separate
account client of Seligman at the time of initial investment (or within the
prior 30 days) in that Fund.

Seligman and Seligman Advisors may make cash and non-cash payments to banks,
broker-dealers, insurance companies, financial planning firms, third party
administrators and other financial intermediaries (collectively, "Financial
Intermediaries"), subject to Seligman and Seligman Advisors' respective
internal policies and procedures.

Seligman Advisors provides Financial Intermediaries with sales literature and
advertising materials relating to the registered investment companies advised
by Seligman (the "Seligman Funds"). Seligman Advisors also shares expenses with
Financial Intermediaries for costs incurred in hosting seminars for employees
and clients of Financial Intermediaries, subject to Seligman Advisors' internal
policies and procedures governing payments for such seminars. These seminars
may take place at Seligman Advisors' headquarters or other appropriate
locations and may include reimbursement of travel expenses (i.e.,
transportation, lodging and meals) of employees of Financial Intermediaries in
connection with training and education seminars. Subject to Seligman Advisors'
internal policies and procedures, Seligman Advisors may provide any or all of
the following to employees of Financial Intermediaries and their guest(s):
(i) an occasional meal, a sporting event or theater ticket or other comparable
entertainment; (ii) gifts of less than $100 per person per year; and/or
(iii) Seligman Advisors' promotional items of nominal value (golf balls,
shirts, etc.).

In addition, Financial Intermediaries may have omnibus accounts and similar
arrangements with SDC and may be paid by SDC for providing sub-transfer agency
and other services. Such expenses paid by SDC are included in the annual
operating expenses set forth in the Prospectuses.

Seligman and/or Seligman Advisors have revenue sharing arrangements with
certain Financial Intermediaries. Payments to these Financial Intermediaries
are usually structured in any of three ways or a combination thereof: (i) as a
percentage of gross sales; (ii) as a percentage of net assets attributable to
the Financial Intermediary; or (iii) a fixed dollar amount.

The foregoing payments (which may take the form of expense reimbursements) by
Seligman, Seligman Advisors and/or SDC may be made for shareholder servicing,
promotion of Seligman Funds and other services provided by Seligman, such as
advisory services to managed accounts, marketing support and/or access to sales
meetings, sales representatives and management representatives of the Financial
Intermediaries. These payments are in addition to the 12b-1 fees and sales
loads borne by shareholders, as well as the finders' fees and loads paid by
Seligman Advisors, as set forth in the prospectus or otherwise described above.
Such payments may result in, or be necessary for, the inclusion of the Seligman
Funds on a sales list, including a preferred or select sales list, in various
sales programs. Receipt by Financial Intermediaries of the foregoing payments
or services could create an incentive for the Financial Intermediaries to offer
a Seligman Fund in lieu of other mutual funds where such payments or services
are not provided. Shareholders should consult their Financial Intermediaries
for further information.

Calculation of Yield and Performance Data

The Funds may quote performance data in various ways. All performance
information supplied by a Fund in advertising is historical and past
performance is not indicative of future investment results. The rate of return
will vary and the principal value of an investment will fluctuate. Shares, if
redeemed, may be worth more or less than their original cost.

Performance Calculations

Performance quoted in advertising reflects any change in price per share,
assumes the reinvestment of dividends and capital gain distributions, if any,
and may or may not include the effect of a Class's maximum initial sales charge
and/or CDSC, as applicable. Such performance may be quoted as a percentage or
as a dollar amount, may be calculated over any time period and may be presented
in a table, graph or similar illustration. Excluding applicable sales charges
from a performance calculation produces a higher performance figure than if
such sales charges were included in the calculation.

Effective January 7, 2008, the maximum initial sales charge on investments in
Class A shares of less than $100,000 is 4.50%. Although for all periods
presented the Funds' Class A share returns reflect the 4.50% maximum initial
sales charge, the actual returns for periods prior to January 7, 2008 would
have been lower if a 4.75% maximum initial sales charge then in effect was
incurred. Effective June 4, 2007, there is no initial sales charge on purchases
of Class C shares. Although for all periods presented each Fund's Class C share
returns do not reflect an initial sales charge, the actual returns for periods
prior to June 4, 2007 would have been lower if a 1.00% maximum initial sales
charge then in effect was incurred. Effective at the close of business on
May 16, 2008, the Funds will no longer offer Class D shares. For additional
information, see the section of the Prospectus "Deciding Which Class of Shares
to Buy -- Class C or Class D."

Average annual total returns are calculated by determining the growth or
decline in the value of a hypothetical $1,000 investment in the Funds over a
stated period, and then calculating the annual rate required for this
hypothetical investment to grow to the amount that would have been received
upon a redemption at the end of such period (i.e., the average annual compound
rate of return). Average annual total returns include any applicable maximum
sales charge or CDSC.

Cumulative total returns reflect the simple change in the value of a
hypothetical investment in the Funds over a stated period. The cumulative total
return for each Class of shares shown below is calculated by assuming a
hypothetical initial investment of $1,000 at the beginning of the period
specified; subtracting the maximum initial sales charge for Class A shares;
determining total value of all dividends and capital gain distributions, if
any, that would have been paid during the period on such shares assuming that
each dividend or distribution was invested in additional shares at net asset
value; calculating the total value of the investment at the end of the period;
subtracting the CDSC on Class B, Class C, Class D and Class R shares, if
applicable; and finally, by dividing the difference between the amount of the
hypothetical initial investment at the beginning of the period and its total
value at the end of the period by the amount of the hypothetical initial
investment. Ten-year returns for Class B shares reflect automatic conversion to
Class A shares approximately eight years after their date of purchase.

No adjustments have been made for any income taxes payable by investors on
dividends invested or gain distributions taken in shares.

Historical Investment Results

Class A

The annualized yields for the 30-day period ended December 31, 2007 for the
Class A shares of the U.S. Government Securities Fund and of the High-Yield
Fund was 3.57% and 7.53%, respectively. The annualized yields were computed by
dividing each of the U.S. Government Securities Fund's and High-Yield Fund's
net investment income per share earned during the 30-day period by the maximum
offering price per share (i.e., the net asset value plus the maximum initial
sales charge of 4.50% of the net amount invested) on December 31, 2007, which
was the last day of the period. The average number of Class A shares of the
U.S. Government Securities Fund and the High-Yield Fund was 5,370,088 and
52,409,137, respectively, which was the average

daily number of shares outstanding during the 30-day period that were eligible
to receive dividends. Income was computed by totaling the interest earned on
all debt obligations during the 30-day period and subtracting from that amount
the total of all recurring expenses incurred during the period. The 30-day
yield was then annualized on a bond-equivalent basis assuming semi-annual
reinvestment and compounding of net investment income.

The average annual total returns for the Class A shares of the U.S. Government
Securities Fund for the one-, five-, and ten-year periods ended December 31,
2007 were 1.33%, 1.05% and 3.77%, respectively. The average annual total
returns for the Class A shares of the High Yield Fund for the one-, five-, and
ten-year periods ended December 31, 2007 were (3.74)%, 6.95% and 0.17%,
respectively. These returns were computed by assuming a hypothetical initial
payment of $1,000 in Class A shares of the particular Fund, subtracting the
maximum initial sales charge of 4.50% of the public offering price and assuming
that all of the dividends and capital gain distributions of the particular
Fund, if any, were reinvested over the relevant time periods. It was then
assumed that at the end of the one-, five- and ten-year periods, the entire
amounts were redeemed. The average annual total return was then determined by
calculating the annual rate required for the initial investment to grow to the
amount that would have been received upon redemption (i.e., the average annual
compound rate of return).

The cumulative total returns for the Class A shares of the U.S. Government
Securities Fund and of the High-Yield Fund for the ten-year periods ended
December 31, 2007 were 44.82% and 6.17%, respectively. Thus, a $1,000
investment in Class A shares of the U.S. Government Securities Fund made on
December 31, 1997 had a value of $1,448 on December 31, 2007; and a $1,000
investment in Class A shares of the High-Yield Fund made on December 31, 1997
had a value of $1,017 on December 31, 2007.

Class B

The annualized yields for the 30-day period ended December 31, 2007 for the
Class B shares of the U.S. Government Securities Fund and of the High-Yield
Fund were 3.02% and 6.94%, respectively. The annualized yields were computed by
dividing each of the U.S. Government Securities Fund's and High-Yield Fund's
net investment income per share earned during the 30-day period by the maximum
offering price per share (i.e., the net asset value) on December 31, 2007,
which was the last day of the period. The average number of Class B shares of
the U.S. Government Securities Fund and the High-Yield Fund was 876,431 and
10,924,146, respectively, which was the average daily number of shares
outstanding during the 30-day period that were eligible to receive dividends.
Income was computed as discussed above for Class A shares.

The average annual total returns for the Class B shares of the U.S. Government
Securities Fund for the one- , five- and ten-year periods ended December 31,
2007 were (0.15)%, 0.87% and 3.63%, respectively. The average annual total
returns for the Class B shares of the High-Yield Fund for the one-, five- and
ten-year periods ended December 31, 2007 were (4.60)%, 6.78% and (0.06)%,
respectively. These returns were computed assuming a hypothetical initial
payment of $1,000 in Class B shares of the particular Fund and assuming that
all of the dividends and capital gain distributions paid by each Fund's Class B
shares, if any, were reinvested over the relevant time periods. Return from
inception reflects automatic conversion to Class A shares approximately eight
years after inception date. It was then assumed that at the end of the one-,
five- and ten-year periods the entire amounts were redeemed, subtracting the
applicable CDSC. The average annual total return was then calculated by
calculating the annual rate required for the initial payment to grow to the
amount which would have been received upon such redemption (i.e., the average
annual compound rate of return).

The cumulative total returns for Class B shares of the U.S. Government
Securities Fund and of the High-Yield Fund for the ten-year period ended
through December 31, 2007 were 42.88% and (0.62)%, respectively. Thus, a $1,000
investment in Class B shares of the U.S. Government Securities Fund made on
December 31, 1997 had a value of $1,429 on December 31, 2007; and a $1,000
investment in Class B shares of the High-Yield Fund made on December 31, 1997
had a value of $994 on December 31, 2007.

Class C

The annualized yields for the 30-day period ended December 31, 2007 for the
Class C shares of the U.S. Government Securities Fund and of the High-Yield
Fund were 3.02% and 6.92%, respectively. The annualized yields were computed by
dividing each of the U.S. Government Securities Fund's and the High-Yield
Fund's net

investment income per share earned during the 30-day period by the maximum
offering price per share (i.e., the net asset value) on December 31, 2007,
which was the last day of the period. The average number of Class C shares of
the U.S. Government Securities Fund and the High-Yield Fund was 586,594 and
6,671,822, respectively, which was the average daily number of shares
outstanding during the 30-day period that were eligible to receive dividends.
Income was computed as discussed above for Class A shares.

The average annual total returns for the Class C shares of the U.S. Government
Securities Fund for the one- and five-year periods ended December 31, 2007 and
the period from May 27, 1999 (commencement of operations) through December 31,
2007 were 4.15%, 1.25% and 3.53%, respectively. The average annual returns for
the Class C shares of the High-Yield Fund for the one- and five-year periods
ended December 31, 2007 and the period from May 27, 1999 (commencement of
operations) through December 31, 2007 were (0.86)%, 7.14% and (0.31)%,
respectively. These returns were computed by assuming a hypothetical initial
payment of $1,000 in Class C shares of the particular Fund and assuming that
all of the dividends and capital gain distributions by each Fund's Class C
shares, if any, were reinvested over the relevant time periods. It was then
assumed that at the end of the one- and five- year periods and the period since
inception, the entire amounts were redeemed, subtracting the 1% CDSC, if
applicable. The average annual total return was then calculated by calculating
the annual rate required for the initial payment to grow to the amount which
would have been received upon such redemption (i.e., the average annual
compound rate of return).

The cumulative total returns for the Class C shares of the U.S. Government
Securities Fund and of the High-Yield Fund for the period May 27, 1999
(commencement of operation of Class C shares) through December 31, 2007 were
34.80% and (2.62)%, respectively. Thus, a $1,000 investment in Class C shares
of the U.S. Government Securities Fund and of the High-Yield Fund made on
May 27, 1999 had a value of $1,348 and $974, respectively, on December 31, 2007.

Class D

The annualized yields for the 30-day period ended December 31, 2007 for the
Class D shares of the U.S. Government Securities Fund and of the High-Yield
Fund were 3.02% and 6.92%, respectively. The annualized yields were computed by
dividing each of the U.S. Government Securities Fund's and the High-Yield
Fund's net investment income per share earned during the 30-day period by the
maximum offering price per share (i.e., the net asset value) on December 31,
2007, respectively, which was the last day of the period. The average number of
Class D shares of the U.S. Government Securities Fund and the High-Yield Fund
was 1,559,494 and 15,717,805, respectively, which was the average daily number
of shares outstanding during the 30-day period that were eligible to receive
dividends. Income was computed as discussed above for Class A shares.

The average annual total returns for the Class D shares of the U.S. Government
Securities Fund for the one-, five- and ten-year periods ended December 31,
2007 were 4.15%, 1.23% and 3.47%, respectively. The average annual total
returns for the Class D shares of the High-Yield Fund for the one-, five and
ten-year periods ended December 31, 2007 were (0,86)%, 7.15% and (0.12)%,
respectively. These returns were computed by assuming a hypothetical initial
payment of $1,000 in Class D shares of the particular Fund and assuming that
all of the dividends and capital gain distributions paid by each Fund's Class D
shares, if any, were reinvested over the relevant time periods. It was then
assumed that at the end of one-, five- and ten- year periods, the entire
amounts were redeemed, subtracting the 1% CDSC, if applicable. The average
annual total return was then calculated by calculating the annual rate required
for the initial payment to grow to the amount which would have been received
upon such redemption (i.e., the average annual compound rate of return).

The cumulative total returns for the Class D shares of the U.S. Government
Securities Fund and of the High-Yield Fund for the ten-year period ended
December 31, 2007 were 40.59% and (1.21)%, respectively. Thus, a $1,000
investment in Class D shares of the U.S. Government Securities Fund and of the
High-Yield Fund made on December 31, 1997 had a value of $1,406 and $988,
respectively, on December 31, 2007.

Class I

The annualized yield for the 30-day period ended December 31, 2007 for the
Class I shares of the High-Yield Fund was 8.20%. The annualized yield was
computed by dividing the High-Yield Fund's net investment income per share
earned during the 30-day period by the maximum offering price per share (i.e.,
the net asset value) on

December 31, 2007, which was the last day of the period. The average number of
Class I shares of the High-Yield Fund was 2,255,638, which was the average
daily number of shares outstanding during the 30-day period that were eligible
to receive dividends. Income was computed as discussed above for Class A shares.

The average annual total returns for the Class I shares of the High-Yield Fund
for the one- and five-year periods ended December 31, 2007 and for the period
November 30, 2001 (commencement of operations) through December 31, 2007 were
1.18%, 58.39% and 5.76%, respectively. These returns were computed by assuming
a hypothetical initial payment of $1,000 in Class I shares of the Fund and
assuming that all of the dividends and capital gain distributions paid by the
Fund's Class I shares, if any, were reinvested over the relevant time period.
It was then assumed that the end of the one- and five-year periods and the
period since inception, the entire amounts were redeemed. The average annual
total return was then calculated by calculating the annual rate required for
the initial payment to grow to the amount which would have been received upon
such redemption (i.e., the average annual compound rate of return).

The cumulative total return for the Class I shares of the High-Yield Fund for
the period November 30, 2001 (commencement of operations) through December 31,
2007 was 40.63%. These returns were computed assuming that all of the dividends
and capital gain distributions paid by the High-Yield Fund's Class I shares, if
any, were reinvested over the relevant time period. Thus, a $1,000 investment
in Class I shares of the High-Yield Fund made on November 30, 2001 had a value
of $1,406 on December 31, 2007.

Class R

The annualized yield for the 30-day period ended December 31, 2007 for the
Class R shares of the U.S. Government Securities Fund and of the High-Yield
Fund were 3.45% and 7.57%, respectively. The average number of Class R shares
of the U.S. Government Securities Fund and of the High-Yield Fund were $215,883
and $722,387, respectively, which was the average daily number of shares
outstanding during the 30-day period that were eligible to receive dividends.
Income was computed as discussed above for Class A shares.

The average annual total returns for the Class R shares of the U.S. Government
Securities Fund for the one-year period ended December 31, 2007 and for the
period from April 30, 2003 (commencement of offering of Class R shares) through
December 31, 2007 were 4.63% and 1.77%, respectively. The average annual total
returns for the Class R shares of the High-Yield Fund for the one-year period
ended December 31, 2007 and for the period from April 30, 2003 (commencement of
offering of Class R shares) through December 31, 2007 were (0.37)% and 6.15%,
respectively. These returns were computed by assuming a hypothetical initial
payment of $1,000 in Class R shares of the particular Fund and assuming that
all of the dividends and capital gain distributions paid by the Funds' Class R
shares, if any, were reinvested over the relevant time period. It was then
assumed that the end of the one-year period and the period since inception, the
entire amounts were redeemed, subtracting the 1% CDSC, if applicable. The
average annual total return was then calculated by calculating the annual rate
required for the initial payment to grow to the amount which would have been
received upon such redemption (i.e., the average annual compound rate of
return).

The cumulative total return for the Class R shares for the U.S. Government
Securities Fund and of the High-Yield Fund for the period April 30, 2003
(commencement of offering of shares) through December 31, 2007 were 8.52% and
32.17%, respectively. Thus, a $1,000 investment in the Class R share of U.S.
Government Securities Fund and of the High-Yield Fund were made on April 30,
2003 had a value of $1,085 and $1,322, respectively on December 31, 2007.

Financial Statements

The Funds' Annual Reports to Shareholders for the year ended December 31, 2007
contain portfolios of the investments of each of the Funds as of December 31,
2007, as well as certain other financial information as of that date. The
financial statements and notes included in the Annual Reports, which includes
the Reports of Independent Registered Public Accounting Firm thereon, are
incorporated herein by reference. These Reports will be furnished without
charge to investors who request copies of this SAI.

General Information

Information About Business Trusts. As indicated in this SAI, the Series is
organized as a business trust under the laws of the Commonwealth of
Massachusetts. Under the Declaration of Trust, the Series' Trustees are
authorized to classify or reclassify and issue any shares of beneficial
interest of the Series into any number of other funds without further action by
shareholders. The 1940 Act requires that where more than one fund exists, each
fund must be preferred over all other funds in respect of assets specifically
allocated to such fund.

As a general matter, the Series will not hold annual or other meetings of the
shareholders. This is because the Declaration of Trust provides for shareholder
voting only (a) for the election or removal of one or more Trustees if a
meeting is called for that purpose, (b) with respect to any contract as to
which shareholder approval is required by the 1940 Act, (c) with respect to any
termination or reorganization of the Series or any Fund to the extent and as
provided in the Declaration of Trust, (d) with respect to any amendment of the
Declaration of Trust (other than amendments establishing and designating new
funds, abolishing Funds when there are no units thereof outstanding, changing
the name of the Series or the name of any Fund, supplying any omission, curing
any ambiguity or curing, correcting or supplementing any provision thereof
which is internally inconsistent with any other provision thereof or which is
defective or inconsistent with the 1940 Act or with the requirements of the
Internal Revenue Code or applicable regulations for the Series' obtaining the
most favorable treatment thereunder available to regulated investment
companies), which amendments require approval by a majority of the shares
entitled to vote, (e) to the same extent as the stockholders of a Massachusetts
business corporation as to whether or not a court action, proceeding, or claim
should or should not be brought or maintained derivatively or as a class action
on behalf of the Series or the shareholders, and (f) with respect to such
additional matters relating to the Series as may be required by the 1940 Act,
the Declaration of Trust, the By-laws of the Series, any registration of the
Series with the SEC or any state, or as the Trustees may consider necessary or
desirable. Each Trustee serves until the next meeting of shareholders, if any,
called for the purpose of considering the election or reelection of such
Trustee or of a successor to such Trustee, and until the election and
qualification of his successor, if any, elected at such meeting, or until such
Trustee sooner dies, resigns, retires or is removed by the shareholders or
two-thirds of the Trustees.

The shareholders of the Series have the right, upon the declaration in writing
or vote of more than two-thirds of the Series' outstanding shares, to remove a
Trustee. The Trustees will call a meeting of shareholders to vote on the
removal of a Trustee upon the written request of the record holders of ten
percent of its shares. In addition, whenever ten or more shareholders of record
who have been such for at least six months preceding the date of application,
and who hold in the aggregate either shares having a net asset value of at
least $25,000 or at least one percent of the outstanding shares, whichever is
less, shall apply to the Trustees in writing, stating that they wish to
communicate with other shareholders with a view to obtaining signatures to a
request for a meeting for the purpose of voting upon the question of removal of
any Trustee or Trustees and accompanied by a form of communication and request
which they wish to transmit, the Trustees shall within five business days after
receipt of such application either: (1) afford to such applicants access to a
list of the names and addresses of all shareholders as recorded on the books of
the Series; or (2) inform such applicants as to the approximate number of
shareholders of record, and the approximate cost of mailing to them the
proposed communication and form of requests. If the Trustees elect to follow
the latter course, the Trustees, upon the written request of such applicants,
accompanied by a tender of the material to be mailed and of the reasonable
expenses of mailing, shall, with reasonable promptness, mail such material to
all shareholders of record at their addresses as recorded on the books, unless
within five business days after such tender the Trustees shall mail to such
applicants and file with the SEC, together with a copy of the material to be
mailed, a written statement signed by at least a majority of the Trustees to
the effect that in their opinion either such material contains untrue
statements of fact or omits to state facts necessary to make the statements
contained therein not misleading, or would be in violation of applicable law,
and specifying the basis of such opinion. After opportunity for hearing upon
the objections specified in the written statement so filed, the SEC may, and if
demanded by the Trustees or by such applicants shall, enter an order either
sustaining one or more of such objections or refusing to sustain any of them.
If the SEC shall enter an order refusing to sustain any of such objections, or
if, after the entry of an order sustaining one or more of such objections, the
SEC shall find, after notice and opportunity for hearing, that all objections
so sustained have been met, and shall enter an order so declaring, the Trustees
shall mail copies of such material to all shareholders with reasonable
promptness after the entry of such order and the renewal of such tender.

Rule 18f-2 under the 1940 Act provides that any matter required by the
provisions of the 1940 Act or applicable state law, or otherwise, to be
submitted to the holders of the outstanding voting securities of an investment
company such as the Series shall not be deemed to have been effectively acted
upon unless approved by the holders of a majority of the outstanding shares of
each Fund affected by such matter. Rule 18f-2 further provides that a Fund
shall be deemed to be affected by a matter unless it is clear that the
interests of such Fund in the matter are substantially identical or that the
matter does not significantly affect any interest of such Fund. However, the
Rule exempts the selection of independent auditors, the approval of principal
distributing contracts and the election of trustees from the separate voting
requirements of the Rule.

The shareholders of a Massachusetts business trust could, under certain
circumstances, be held personally liable as partners for its obligations.
However, the Declaration of Trust contains an express disclaimer of shareholder
liability for acts or obligations of the Trust. The Declaration of Trust also
provides for indemnification and reimbursement of expenses out of a Fund's
assets for any shareholder held personally liable for obligations of such
Series.

Custodian. State Street Bank and Trust Company, 801 Pennsylvania Avenue, Kansas
City, Missouri 64105, serves as custodian for the Series. It also maintains,
under the general supervision of Seligman, the accounting records and
determines the net asset values for each Series of the Fund.

Independent Registered Public Accounting Firm. Deloitte & Touche LLP,
Independent Registered Public Accounting Firm, has been selected as auditors of
the Series. Their address is Two World Financial Center, New York, New York
10281.