WITNESSETH:

CUSTODY AGREEMENT

THIS AGREEMENT dated as of the _____ day of _____________, 1997 is made by
and between INVESTORS FIDUCIARY TRUST COMPANY, a trust company chartered under
the laws of the state of Missouri, having its trust office located at 000 Xxxx
00xx Xxxxxx, Xxxxxx Xxxx, Xxxxxxxx 00000 ("Custodian"), and PILGRIM GOVERNMENT
SECURITIES INCOME FUND, INC., a California corporation, having its principal
office and place of business at Two Renaissance Square, 00 Xxxxx Xxxxxxx Xxxxxx,
Xxxxx 0000, Xxxxxxx, Xxxxxxx 00000 ("Fund").

WITNESSETH:

WHEREAS, Fund desires to appoint Investors Fiduciary Trust Company as
Custodian of the securities and monies of the investment portfolio of Fund
("Portfolio"); and

WHEREAS, Investors Fiduciary Trust Company is willing to accept such
appointment;

NOW THEREFORE, for and in consideration of the mutual promises contained
herein, the parties hereto, intending to be legally bound, mutually covenant and
agree as follows:

1. APPOINTMENT OF CUSTODIAN. Fund hereby constitutes and appoints Custodian as
custodian of the securities and monies at any time owned by the Fund,
including all existing and future Portfolios.

2. DUTIES AND RESPONSIBILITIES OF CUSTODIAN.

A. Delivery of Assets. Except as permitted by the Investment Company Act
of 1940, Fund will deliver or cause to be delivered to Custodian all
portfolio securities acquired by it and monies owned by it during the
time this Agreement shall continue in effect. Custodian shall have no
responsibility or liability whatsoever for or on account of securities
or monies not so delivered. All securities so delivered to Custodian
(other than bearer securities) shall be registered in the name of Fund
or its nominee, or of a nominee of Custodian, or shall be properly
endorsed and in form for transfer satisfactory to Custodian.

B. Delivery of Accounts and Records. Fund shall turn over to Custodian
all of the Fund's relevant accounts and records previously maintained
by it. Custodian shall be entitled to rely conclusively on the
completeness and correctness of the accounts and records turned over
to it by Fund, and Fund shall indemnify and hold Custodian harmless of
and from any and all expenses, damages and losses whatsoever arising
out of or in connection with any error, omission, inaccuracy or other
deficiency of such accounts and records or in the failure of Fund to
provide any portion of such or to provide in a timely manner any other
information needed by the Custodian knowledgeably to perform its
function hereunder.

C. Delivery of Assets to Third Parties. Custodian will receive delivery
of and keep safely the assets of each Portfolio delivered to it from
time to time segregated in a separate account. Custodian will not
deliver, assign, pledge or hypothecate any such assets to any person
except as permitted by the provisions of this Agreement or any
agreement executed by it according to the terms of Section 2.S. of
this Agreement. Upon delivery of any such assets to a subcustodian
pursuant to Section 2.S. of this Agreement, Custodian will create and
maintain records identifying those assets which have been delivered to
the subcustodian as belonging to the applicable Portfolio. The
Custodian is responsible for the securities and monies of Fund only
until they have been transmitted to and received by other persons as
permitted under the terms of this Agreement, except for securities and
monies transmitted to subcustodians appointed under Section 2.S. of
this Agreement, for which Custodian remains responsible to the extent
provided in Section 2.S. of this Agreement. Custodian may participate
directly or indirectly through a subcustodian in the Depository Trust
Company, Treasury/Federal Reserve Book Entry System or Participant
Trust Company (PTC) or other depository approved by the Fund (as such
entities are defined at 17 CFR Section 270.17f-4(b)) (each a
"Depository" and collectively the "Depositories").

D. Registration of Securities. The Custodian shall at all times hold
registered securities of the Fund in the name of the Custodian, the
Fund, or a nominee of either of them, unless specifically directed by
instructions to hold such registered securities in so-called "street
name," provided that, in any event, all such securities and other
assets shall be held in an account of the Custodian containing only
assets of the Fund, or only assets held by the Custodian as a
fiduciary or custodian for customers, and provided further, that the
records of the Custodian at all times shall indicate the Fund or other
customer for which such securities and other assets are held in such
account and the respective interests therein. If, however, the Fund
directs the Custodian to maintain securities in "street name",
notwithstanding anything contained herein to the contrary, the
Custodian shall be obligated only to utilize its best efforts to
timely collect income due the Fund on such securities and to notify
the Fund of relevant corporate actions including, without limitation,
pendency of calls, maturities, tender or exchange offers. All
securities, and the ownership thereof by Fund, which are held by
Custodian hereunder, however, shall at all times be identifiable on
the records of the Custodian. The Fund agrees to hold Custodian and
its nominee harmless for any liability as a record holder of
securities held in custody.

E. Exchange of Securities. Upon receipt of instructions as defined herein
in Section 3.A, Custodian will exchange, or cause to be exchanged,
portfolio securities held by it for the account of Fund for other
securities or cash issued or paid in connection with any
reorganization, recapitalization, merger, consolidation, split-up of
shares, change of par value, conversion or otherwise, and will deposit
any such securities in accordance with the terms of any reorganization

or protective plan. Without instructions, Custodian is authorized to
exchange securities held by it in temporary form for securities in
definitive form, to effect an exchange of

shares when the par value of the stock is changed, and upon receiving
payment therefor, to surrender bonds or other securities held by it at
maturity or when advised of earlier call for redemption, except that
Custodian shall receive instructions prior to surrendering any
convertible security.

F. Purchases of Investments of the Fund. Fund will, on each business day
on which a purchase of securities shall be made by it, deliver to
Custodian instructions which shall specify with respect to each such
purchase:

1. The name of the Portfolio of the Fund making such purchase;

2. The name of the issuer and description of the security;

3. The number of shares or the principal amount purchased, and
accrued interest, if any;

4. The trade date;

5. The settlement date;

6. The purchase price per unit and the brokerage commission, taxes
and other expenses payable in connection with the purchase;

7. The total amount payable upon such purchase; and

8. The name of the person from whom or the broker or dealer through
whom the purchase was made.

In accordance with such instructions, Custodian will pay for out of
monies held for the account of Fund, but only insofar as monies are
available therein for such purpose, and receive the portfolio
securities so purchased by or for the account of Fund except that
Custodian may in its sole discretion advance funds to the Fund which
may result in an overdraft because the monies held by the Custodian on
behalf of the Fund are insufficient to pay the total amount payable
upon such purchase. Except as otherwise instructed by Fund, such
payment shall be made by the Custodian only upon receipt of
securities: (a) by the Custodian; (b) by a clearing corporation of a
national exchange of which the Custodian is a member; or (c) by a
Depository. Notwithstanding the foregoing, (i) in the case of a
repurchase agreement, the Custodian may release funds to a Depository
prior to the receipt of advice from the Depository that the securities
underlying such repurchase agreement have been transferred by

book-entry into the account maintained with such Depository by the
Custodian, on behalf of its customers, provided that the Custodian's
instructions to the Depository require that the Depository make
payment of such funds only upon transfer by book-entry of the
securities underlying the repurchase agreement in such account; (ii)
in the case of time deposits, call account deposits, currency deposits
and other deposits, foreign

exchange transactions, futures contracts or options, the Custodian may
make payment therefor before receipt of an advice or confirmation
evidencing said deposit or entry into such transaction; and (iii) in
the case of the purchase of securities, the settlement of which occurs
outside of the United States of America, the Custodian may make, or
cause a subcustodian appointed pursuant to Section 2.S.2. of this
Agreement to make, payment therefor in accordance with generally
accepted local custom and market practice.

G. Sales and Deliveries of Investments of the Fund - Other than Options
and Futures. Fund will, on each business day on which a sale of
investment securities of Fund has been made, deliver to Custodian
instructions specifying with respect to each such sale:

1. The name of the Portfolio of the Fund making such sale;

2. The name of the issuer and description of the securities;

3. The number of shares or principal amount sold, and accrued
interest, if any;

4. The date on which the securities sold were purchased or other
information identifying the securities sold and to be delivered;

5. The trade date;

6. The settlement date;

7. The sale price per unit and the brokerage commission, taxes or
other expenses payable in connection with such sale;

8. The total amount to be received by Fund upon such sale; and

9. The name and address of the broker or dealer through whom or
person to whom the sale was made.

In accordance with such instructions, Custodian will deliver or cause
to be delivered the securities thus designated as sold for the account
of Fund to the broker or other person specified in the instructions
relating to such sale. Except as otherwise instructed by Fund, such

delivery shall be made upon receipt of payment therefor: (a) in such
form as is satisfactory to the Custodian; (b) credit to the account of
the Custodian with a clearing corporation of a national securities
exchange of which the Custodian is a member; or (c) credit to the
account of the Custodian, on behalf of its customers, with a
Depository. Notwithstanding the foregoing: (i) in the case of
securities held in physical form, such securities shall be delivered
in accordance with "street delivery custom" to a broker or its
clearing agent; or (ii) in the case of the sale of securities, the
settlement of which occurs outside of the United States of America,
the Custodian may make, or cause a

subcustodian appointed pursuant to Section 2.S.2. of this Agreement to
make, payment therefor in accordance with generally accepted local
custom and market practice.

H. Purchases or Sales of Security Options, Options on Indices and
Security Index Futures Contracts. Fund will, on each business day on
which a purchase or sale of the following options and/or futures shall
be made by it, deliver to Custodian instructions which shall specify
with respect to each such purchase or sale:

1. The name of the Portfolio of the Fund making such purchase or
sale;

2. In the case of security options:

a. The underlying security;

b. The price at which purchased or sold;

c. The expiration date;

d. The number of contracts;

e. The exercise price;

f. Whether the transaction is an opening, exercising, expiring
or closing transaction;

g. Whether the transaction involves a put or call;

h. Whether the option is written or purchased;

i. Market on which option traded;

j. Name and address of the broker or dealer through whom the
sale or purchase was made.

3. In the case of options on indices:

a. The index;

b. The price at which purchased or sold;

c. The exercise price;

d. The premium;

e. The multiple;

f. The expiration date;

g. Whether the transaction is an opening, exercising, expiring
or closing transaction;

h. Whether the transaction involves a put or call;

i. Whether the option is written or purchased;

j. The name and address of the broker or dealer through whom
the sale or purchase was made, or other applicable
settlement instructions.

4. In the case of security index futures contracts:

a. The last trading date specified in the contract and, when
available, the closing level, thereof;

b. The index level on the date the contract is entered into;

c. The multiple;

d. Any margin requirements;

e. The need for a segregated margin account (in addition to
instructions, and if not already in the possession of
Custodian, Fund shall deliver a substantially complete and
executed custodial safekeeping account and procedural
agreement which shall be incorporated by reference into this
Custody Agreement); and

f. The name and address of the futures commission merchant
through whom the sale or purchase was made, or other
applicable settlement instructions.

5. In the case of options on index future contracts:

a. The underlying index future contract;

b. The premium;

c. The expiration date;

d. The number of options;

e. The exercise price;

f. Whether the transaction involves an opening, exercising,
expiring or closing transaction;

g. Whether the transaction involves a put or call;

h. Whether the option is written or purchased; and

i. The market on which the option is traded.

I. Securities Pledged or Loaned. If specifically allowed for in the
prospectus of Fund:

1. Upon receipt of instructions, Custodian will release or cause to be
released securities held in custody to the pledgee designated in such
instructions by way of pledge or hypothecation to secure any loan
incurred by Fund; provided, however, that the securities shall be
released only upon payment to Custodian of the monies borrowed, except
that in cases where additional collateral is required to secure a
borrowing already made, further securities may be released or caused
to be released for that purpose upon receipt of instructions. Upon
receipt of instructions, Custodian will pay, but only from funds
available for such purpose, any such loan upon redelivery to it of the
securities pledged or hypothecated therefor and upon surrender of the
note or notes evidencing such loan.

2. Upon receipt of instructions, Custodian will release securities held
in custody to the borrower designated in such instructions; provided,
however, that the securities will be released only upon deposit with
Custodian of full cash collateral as specified in such instructions,
and that Fund will retain the right to any dividends, interest or
distribution on such loaned securities. Upon receipt of instructions
and the loaned securities, Custodian will release the cash collateral
to the borrower.

J. Routine Matters. Custodian will, in general, attend to all routine and
mechanical matters in connection with the sale, exchange,

substitution, purchase, transfer, or other dealings with securities or
other property of Fund except as may be otherwise provided in this
Agreement or directed from time to time by the Fund in writing.

K. Deposit Account. Custodian will open and maintain one or more special
purpose deposit accounts in the name of Custodian ("Accounts"),
subject only to draft or order by Custodian upon receipt of
instructions. All monies received by Custodian from or for the account
of a Portfolio shall be deposited in said Account of the applicable
Portfolio. Barring events not in the control of the Custodian such as
strikes, lockouts or labor disputes, riots, war or equipment or
transmission failure or damage, fire, flood, earthquake or other
natural disaster, action or inaction of governmental authority or
other causes beyond its control, at 9:00 a.m., Kansas City time, on
the second business day after deposit of any check into Fund's
Account, Custodian agrees to make Fed Funds available to the Fund in
the amount of the check. Deposits made by Federal Reserve wire will be
available to the Fund immediately and ACH wires will be available to
the Fund on the next business day. Income earned on the portfolio
securities will be credited to the applicable Portfolio of the Fund
based on the schedule attached as Exhibit A. The Custodian will be
entitled to reverse any credited amounts where credits have been made
and monies are not finally collected. If monies are collected after
such reversal, the Custodian will credit the applicable Portfolio in
that amount. Custodian may open and maintain Accounts in such banks or
trust companies as may be designated by it or by properly authorized
resolution of the governing Board of the Fund, such Account, however,
to be in the name of Custodian and subject only to its draft or order.

L. Income and other Payments to Fund. Custodian will:

1. Collect, claim and receive and deposit for the account of Fund
all income and other payments which become due and payable on or
after the effective date of this Agreement with respect to the
securities deposited under this Agreement, and credit the account
of Fund in accordance with the schedule attached hereto as
Exhibit A. If for any reason, the Fund is credited with income
that is not subsequently collected, Custodian may reverse that
credited amount;

2. Execute ownership and other certificates and affidavits for all
federal, state and local tax purposes in connection with the
collection of bond and note coupons; and

3. Take such other action as may be necessary or proper in
connection with:

a. the collection, receipt and deposit of such income and other

payments, including but not limited to the presentation for
payment of:

1. all coupons and other income items requiring
presentation; and

2. all other securities which may mature or be called,
redeemed, retired or otherwise become payable and
regarding which the Custodian has actual knowledge, or
should reasonably be expected to have knowledge; and

b. the endorsement for collection, in the name of Fund, of all
checks, drafts or other negotiable instruments.

Custodian, however, will not be required to institute suit or take
other extraordinary action to enforce collection except upon receipt
of instructions and upon being indemnified to its satisfaction against
the costs and expenses of such suit or other actions. Custodian will
receive, claim and collect all stock dividends, rights and other
similar items and will deal with the same pursuant to instructions.

M. Payment of Dividends and other Distributions. On the declaration of
any dividend or other distribution on the shares of the Fund ("Fund
Shares") by the governing Board of the Fund, Fund shall deliver to
Custodian instructions with respect thereto. On the date specified in
such instructions for the payment of such dividend or other
distribution, Custodian will pay out of the monies held for the
account of Fund, insofar as the same shall be available for such
purposes, and credit to the account of the Dividend Disbursing Agent
for Fund, such amount as may be specified in such instructions.

N. Shares of Fund Purchased by Fund. Whenever any Fund Shares are
repurchased or redeemed by Fund, Fund or its agent shall advise
Custodian of the aggregate dollar amount to be paid for such shares
and shall confirm such advice in writing. Upon receipt of such advice,
Custodian shall charge such aggregate dollar amount to the account of
Fund and either deposit the same in the account maintained for the
purpose of paying for the repurchase or redemption of Fund Shares or
deliver the same in accordance with such advice. Custodian shall not
have any duty or responsibility to determine that Fund Shares have
been removed from the proper shareholder account or accounts or that
the proper number of such shares have been cancelled and removed from
the shareholder records.

O. Shares of Fund Purchased from Fund. Whenever Fund Shares are purchased
from Fund, Fund will deposit or cause to be deposited with Custodian
the amount received for such shares. Custodian shall not have any duty
or responsibility to determine that Fund Shares purchased from Fund
have been added to the proper shareholder account or accounts or that
the proper number of such shares have been added to the shareholder
records.

P. Proxies and Notices. Custodian will promptly deliver or mail or have
delivered or mailed to Fund all proxies properly signed, all notices
of meetings, all proxy statements and other notices, requests or
announcements affecting or relating to securities held by Custodian
for Fund and will, upon receipt of instructions, execute and deliver
or cause its nominee to execute and deliver or mail or have delivered
or mailed such proxies or other authorizations as may be required.
Except as provided by this Agreement or pursuant to instructions
hereafter received by Custodian, neither it nor its nominee will
exercise any power inherent in any such securities, including any
power to vote the same, or execute any proxy, power of attorney, or
other similar instrument voting any of such securities, or give any
consent, approval or waiver with respect thereto, or take any other
similar action.

Q. Disbursements. Custodian will pay or cause to be paid insofar as funds
are available for the purpose, bills, statements and other obligations
of Fund (including but not limited to obligations in connection with
the conversion, exchange or surrender of securities owned by Fund,
interest charges, dividend disbursements, taxes, management fees,
custodian fees, legal fees, auditors' fees, transfer agents' fees,
brokerage commissions, compensation to personnel, and other operating
expenses of Fund) pursuant to instructions of Fund setting forth the
name of the person to whom payment is to be made, the amount of the
payment, and the purpose of the payment.

R. Daily Statement of Accounts. Custodian will, within a reasonable time,
render to Fund as of the close of business on each day, a detailed
statement of the amounts received or paid and of securities received
or delivered for the account of Fund during said day. Custodian will,
from time to time, upon request by Fund, render a detailed statement
of the securities and monies held for Fund under this Agreement, and
Custodian will maintain such books and records as are necessary to
enable it to do so and will permit such persons as are authorized by
Fund, including Fund's independent public accountants, access to such
records or confirmation of the contents of such records; and if
demanded, will permit federal and state regulatory agencies to examine
the securities, books and records. Upon the written instructions of
Fund or as demanded by federal or state regulatory agencies, Custodian
will instruct any subcustodian to give such persons as are authorized
by Fund, including Fund's independent public accountants, access to
such records or confirmation of the contents of such records; and if
demanded, to permit federal and state regulatory agencies to examine
the books, records and securities held by subcustodian which relate to
Fund.

S. Appointment of Subcustodians

1. Notwithstanding any other provisions of this Agreement, all or
any of the monies or securities of Fund may be held in
Custodian's own custody or in the custody of one or more other
banks or trust companies selected by

Custodian. Any such subcustodian must have the qualifications
required for custodian under the Investment Company Act of 1940,
as amended. Any such subcustodians may participate directly or
indirectly in any Depository. Custodian shall be responsible to
the Fund for any loss, damage or expense suffered or incurred by
the Fund resulting from the actions or omissions of any
subcustodian selected and appointed by Custodian (except
subcustodians appointed at the request of Fund and as provided in
Subsection 2 below) to the same extent Custodian would be
responsible to the Fund under Section 4 of this Agreement if it
committed the act or omission itself. Custodian is not
responsible for Depositories except to the extent such entities
are responsible to Custodian. Upon request of the Fund, Custodian
shall be willing to contract with other subcustodians reasonably
acceptable to the Custodian for purposes of (i) effecting
third-party repurchase transactions with banks, brokers, dealers,
or other entities through the use of a common custodian or
subcustodian, or (ii) providing depository and clearing agency
services with respect to certain variable rate demand note
securities, or (iii) for other reasonable purposes specified by
Fund; provided, however, that the Custodian shall be responsible
to the Fund for any loss, damage or expense suffered or incurred
by the Fund resulting from the actions or omissions of any such
subcustodian only to the same extent such subcustodian is
responsible to the Custodian. The Fund shall be entitled to
review the Custodian's contracts with any such subcustodians
appointed at the request of Fund.

2. Notwithstanding any other provisions of this Agreement, Fund's
foreign securities (as defined in Rule 17f-5(c)(1) under the
Investment Company Act of 1940) and Fund's cash or cash
equivalents, in amounts deemed by the Fund to be reasonably
necessary to effect Fund's foreign securities transactions, may
be held in the custody of one or more banks or trust companies
acting as subcustodians, according to Section 2.S.1; and
thereafter, pursuant to a written contract or contracts as
approved by Fund's governing Board, may be transferred to an
account maintained by such subcustodian with an eligible foreign
custodian, as defined in Rule 17f-5(c)(2), provided that any such
arrangement involving a foreign custodian shall be in accordance
with the provisions of Rule 17f-5 under the Investment Company
Act of 1940 as that Rule may be amended from time to time. The
Custodian shall be responsible for the monies and securities of

Fund held by eligible foreign subcustodians to the extent the
eligible foreign subcustodians are liable to the domestic
subcustodian with which the Custodian contracts for foreign
subcustody purposes.

T. Adoption of Procedures. Custodian and Fund hereby adopt the Funds
Transfer Operating guidelines attached hereto as Exhibit B. Custodian
and Fund may from time to time adopt procedures as they agree upon,
and Custodian may conclusively assume that no procedure approved by
Fund, or directed by Fund, conflicts with or violates any requirements
of its prospectus, articles of incorporation, bylaws, or

any rule or regulation of any regulatory body or governmental agency.
Fund will be responsible to notify Custodian of any changes in
statutes, regulations, rules or policies which might necessitate
changes in Custodian's responsibilities or procedures.

U. Overdrafts. In the event Custodian or any subcustodian shall, in its
sole discretion, advance cash or securities for any purpose (including
but not limited to securities settlements, purchase or sale of foreign
exchange or foreign exchange contracts and assumed settlement) for the
benefit of any Portfolio, the advance shall be payable by the Fund on
demand. Any such cash advance shall be subject to an overdraft charge
at the rate set forth in the then-current fee schedule from the date
advanced until the date repaid. As security for each such advance,
Fund hereby grants Custodian and such subcustodian a lien on and
security interest in all property at any time held for the account of
the applicable Portfolio, including without limitation all assets
acquired with the amount advanced. Should the Fund fail to repay the
advance within a reasonable time after written notice from Custodian,
the Custodian and such subcustodian shall be entitled to utilize
available cash and to dispose of such Portfolio's assets pursuant to
applicable law to the extent necessary to obtain reimbursement of the
amount advanced and any related overdraft charges.

V. Exercise of Rights; Tender Offers. Upon receipt of instructions, the
Custodian shall: (a) deliver warrants, puts, calls, rights or similar
securities to the issuer or trustee thereof, or to the agent of such
issuer or trustee, for the purpose of exercise or sale, provided that
the new securities, cash or other assets, if any, are to be delivered
to the Custodian; and (b) deposit securities upon invitations for
tenders thereof, provided that the consideration for such securities
is to be paid or delivered to the Custodian or the tendered securities
are to be returned to the Custodian.

3. INSTRUCTIONS.

A. The term "instructions", as used herein, means written (including

telecopied) or oral instructions to Custodian which Custodian
reasonably believes were given by a designated representative of Fund.
Fund shall provide Custodian, as often as necessary, written
instructions naming one or more designated representatives to give
instructions in the name and on behalf of Fund, which instructions may
be received and accepted from time to time by Custodian as conclusive
evidence of the authority of any designated representative to act for
Fund and may be considered to be in full force and effect (and
Custodian will be fully protected in acting in reliance thereon) until
receipt by Custodian of notice to the contrary. Unless such written
instructions delegating authority to any person to give instructions
specifically limit such authority or require that the approval of
anyone else will first have been obtained, Custodian will be under no
obligation to inquire into the right of the person giving such
instructions to do so. Notwithstanding any of the foregoing provisions
of this Section 3 no authorizations or instructions

received by Custodian from Fund, will be deemed to authorize or permit
any director, trustee, officer, employee, or agent of Fund to withdraw
any of the securities or similar investments of Fund upon the mere
receipt of such authorization or instructions from such director,
trustee, officer, employee or agent. Notwithstanding any other
provision of this Agreement, Custodian, upon receipt (and
acknowledgment if required at the discretion of Custodian) of the
instructions of a designated representative of Fund will undertake to
deliver for Fund's account monies, (provided such monies are on hand
or available) in connection with Fund's transactions and to wire
transfer such monies to such broker, dealer, subcustodian, bank or
other agent specified in such instructions by a designated
representative of Fund.

B. No later than the next business day immediately following each oral
instruction, Fund will send Custodian written confirmation of such
oral instruction. At Custodian's sole discretion, Custodian may record
on tape, or otherwise, any oral instruction whether given in person or
via telephone, each such recording identifying the date and the time
of the beginning and ending of such oral instruction.

C. If Custodian shall provide Fund direct access to any computerized
recordkeeping and reporting system used hereunder or if Custodian and
Fund shall agree to utilize any electronic system of communication,
Fund shall be fully responsible for any and all consequences of the
use or misuse of the terminal device, passwords, access instructions
and other means of access to such system(s) which are utilized by,
assigned to or otherwise made available to the Fund. Fund agrees to
implement and enforce appropriate security policies and procedures to
prevent unauthorized or improper access to or use of such system(s).
Custodian shall be fully protected in acting hereunder upon any

instructions, communications, data or other information received by
Custodian by such means as fully and to the same effect as if
delivered to Custodian by written instrument signed by the requisite
authorized representative(s) of Fund. Fund shall indemnify and hold
Custodian harmless from and against any and all losses, damages,
costs, charges, counsel fees, payments, expenses and liability which
may be suffered or incurred by Custodian as a result of the use or
misuse, whether authorized or unauthorized, of any such system(s) by
Fund or by any person who acquires access to such system(s) through
the terminal device, passwords, access instructions or other means of
access to such system(s) which are utilized by, assigned to or
otherwise made available to the Fund, except to the extent
attributable to any negligence or willful misconduct by Custodian.

4. LIMITATION OF LIABILITY OF CUSTODIAN.

A. Custodian shall at all times use reasonable care and due diligence and
act in good faith in performing its duties under this Agreement.
Custodian shall hold harmless and indemnify Fund from and against any
loss or liability arising out of Custodian's negligence, willful
misconduct, or bad faith. Custodian shall not be responsible

for, and the Fund shall indemnify and hold Custodian harmless from and
against, any loss or liability arising out of actions taken by
Custodian pursuant to this Agreement or any instructions provided to
it hereunder, provided that Custodian has acted in good faith and with
due diligence and reasonable care. Neither party shall be liable to
the other for consequential, special or punitive damages. Custodian
may request and obtain the advice and opinion of counsel for Fund, or
of its own counsel with respect to questions or matters of law, and it
shall be without liability to Fund for any action taken or omitted by
it in good faith, in conformity with such advice or opinion. If
Custodian reasonably believes that it could not prudently act
according to the instructions of the Fund or the Fund's counsel, it
may in its discretion, with notice to the Fund, not act according to
such instructions.

B. Custodian may rely upon the advice and statements of Fund and Fund's
accountants and other persons believed by, it in good faith, to be
expert in matters upon which they are consulted, and Custodian shall
not be liable for any actions taken, in good faith, upon such advice
and statements.

C. If Fund requests Custodian in any capacity to take, with respect to
any securities, any action which involves the payment of money by it,
or which in Custodian's opinion might make it or its nominee liable
for payment of monies or in any other way, Custodian, upon notice to
Fund given prior to such actions, shall be and be kept indemnified by

Fund in an amount and form satisfactory to Custodian against any
liability on account of such action; provided, however, that nothing
herein shall obligate Custodian to take any such action except in its
sole discretion.

D. Custodian shall be entitled to receive, and Fund agrees to pay to
Custodian, on demand, reimbursement for such cash disbursements, costs
and expenses as may be agreed upon from time to time by Custodian and
Fund.

E. Custodian shall be protected in acting as custodian hereunder upon any
instructions, advice, notice, request, consent, certificate or other
instrument or paper reasonably appearing to it to be genuine and to
have been properly executed and shall, unless otherwise specifically
provided herein, be entitled to receive as conclusive proof of any
fact or matter required to be ascertained from Fund hereunder,
instructions or a certificate signed by the Fund's President, or other
authorized officer.

F. Without limiting the generality of the foregoing, Custodian shall be
under no duty or obligation to inquire into, and shall not be liable
for:

1. The validity of the issue of any securities purchased by or for
Fund, the legality of the purchase thereof or evidence of
ownership required by Fund to be received by Custodian, or the
propriety of the decision to purchase or amount paid therefor;

2. The legality of the sale of any securities by or for Fund, or the
propriety of the amount for which the same are sold;

3. The legality of the issue or sale of any Fund Shares, or the
sufficiency of the amount to be received therefor;

4. The legality of the repurchase or redemption of any Fund Shares,
or the propriety of the amount to be paid therefor; or

5. The legality of the declaration of any dividend by Fund, or the
legality of the issue of any Fund Shares in payment of any
dividend.

G. Custodian shall not be liable for, or considered to be Custodian of,
any money represented by any check, draft, wire transfer, clearing
house funds, uncollected funds, or instrument for the payment of money
to be received by it on behalf of Fund, until Custodian actually
receives such money, provided only that it shall advise Fund promptly
if it fails to receive any such money in the ordinary course of
business, and use its best efforts and cooperate with Fund toward the

end that such money shall be received.

H. Except for any subcustodians or eligible foreign custodians appointed
under Section 2.S. to the extent provided therein, Custodian shall not
be responsible for loss occasioned by the acts, neglects, defaults or
insolvency of any broker, bank, trust company, or any other person
with whom Custodian may deal in the absence of negligence or bad faith
on the part of Custodian.

I. Notwithstanding anything herein to the contrary, Custodian may, and
with respect to any foreign subcustodian appointed under Section 2.S.2
must, provide Fund for its approval, agreements with banks or trust
companies which will act as subcustodians for Fund pursuant to Section
2.S of this Agreement.

J. Custodian shall not be responsible or liable for the failure or delay
in performance of its obligations under this Agreement, or those of
any entity for which it is responsible hereunder, arising out of or
caused, directly or indirectly, by circumstances beyond the affected
entity's reasonable control, including, without limitation: any
interruption, loss or malfunction of any utility, transportation,
computer (hardware or software) or communication service; inability to
obtain labor, material, equipment or transportation, or a delay in
mails; governmental or exchange action, statute, ordinance, rulings,
regulations or direction; war, strike, riot, emergency, civil
disturbance, terrorism, vandalism, explosions, labor disputes,
freezes, floods, fires, tornados, acts of God or public enemy,
revolutions, or insurrection.

5. COMPENSATION. Fund will pay to Custodian such compensation as is stated in
the Fee Schedule from time to time agreed to in writing by Custodian and
Fund. Custodian may charge such compensation against monies held by it for
the account of Fund.

Custodian will also be entitled, notwithstanding the provisions of Sections
4.C. or 4.D. hereof, to charge against any monies held by it for the
account of Fund the amount of any loss, damage, liability, advance, or
expense for which it shall be entitled to reimbursement under the
provisions of this Agreement including fees or expenses due to Custodian
for other services provided to the Fund by the Custodian. Custodian will
not be entitled to reimbursement by Fund for any loss or expenses of any
subcustodian, except to the extent Custodian would be entitled to
reimbursement hereunder if it incurred the loss or expense itself directly.

6. TERMINATION. This Agreement shall continue in effect until terminated by
either party by notice in writing received by the other party not less than
ninety (90) days prior to the date upon which such termination shall take
effect. Upon termination of this Agreement, Fund will pay to Custodian such

compensation for its reimbursable disbursements, costs and expenses paid or
incurred to such date. The governing Board of Fund will, forthwith upon
giving or receiving notice of termination of this Agreement, appoint as
successor custodian a qualified bank or trust company. Custodian will, upon
termination of this Agreement, deliver to the successor custodian so
appointed, at Custodian's office, all securities then held by Custodian
hereunder, duly endorsed and in form for transfer, all funds and other
properties of Fund deposited with or held by Custodian hereunder, or will
co-operate in effecting changes in book-entries at the Depositories. In the
event no written order designating a successor custodian has been delivered
to Custodian on or before the date when such termination becomes effective,
then Custodian may deliver the securities, funds and properties of Fund to
a bank or trust company at the selection of Custodian and meeting the
qualifications for custodian, if any, set forth in the governing documents
of the Fund and having not less that Two Million Dollars ($2,000,000)
aggregate capital, surplus and undivided profits, as shown by its last
published report. Upon delivery to a successor custodian, Custodian will
have no further obligations or liabilities under this Agreement. Thereafter
such bank or trust company will be the successor custodian under this
Agreement and will be entitled to reasonable compensation for its services.
In the event that no such successor custodian can be found, Fund will
submit to its shareholders, before permitting delivery of the cash and
securities owned by Fund to anyone other than a successor custodian, the
question of whether Fund will be liquidated or function without a
custodian. Notwithstanding the foregoing requirement as to delivery upon
termination of this Agreement, Custodian may make any other delivery of the
securities, funds and property of Fund which is permitted by the Investment
Company Act of 1940, Fund's governing documents then in effect or apply to
a court of competent jurisdiction for the appointment of a successor
custodian.

7. NOTICES. Notices, requests, instructions and other writings received by
Fund at Two Renaissance Square, 00 Xxxxx Xxxxxxx Xxxxxx, Xxxxx 0000,
Xxxxxxx, Xxxxxxx 00000, or at such other address as Fund may have
designated to Custodian in writing, will be deemed to have been properly
given to Fund hereunder; and notices, requests, instructions and other
writings received by Custodian at its offices at 000 Xxxx 00xx Xxxxxx, 00xx
Xxxxx, Xxxxxx Xxxx, Xxxxxxxx 00000, or to such other address as it may have
designated to Fund in writing, will be deemed to have been properly given
to Custodian hereunder.

8. MISCELLANEOUS.

A. This Agreement is executed and delivered in the State of Missouri and
shall be governed by the laws of said state.

B. All the terms and provisions of this Agreement shall be binding upon,
inure to the benefit of, and be enforceable by the parties hereto and

their respective successors and permitted assigns.

C. No provisions of the Agreement may be amended or modified, in any
manner except by a written agreement properly authorized and executed
by both parties hereto.

D. The captions in this Agreement are included for convenience of
reference only, and in no way define or limit any of the provisions
hereof or otherwise affect their construction or effect.

E. This Agreement may be executed in two or more counterparts, each of
which will be deemed an original but all of which together will
constitute one and the same instrument.

F. If any part, term or provision of this Agreement is determined to be
illegal, in conflict with any law or otherwise invalid, the remaining
portion or portions shall be considered severable and not be affected,
and the rights and obligations of the parties shall be construed and
enforced as if the Agreement did not contain the particular part, term
or provision held to be illegal or invalid.

G. Custodian will not release the identity of Fund to an issuer which
requests such information pursuant to the Shareholder Communications
Act of 1985 for the specific purpose of direct communications between
such issuer and Fund unless the Fund directs the Custodian otherwise.

H. This Agreement may not be assigned by either party without prior
written consent of the other party.

I. If any provision of the Agreement, either in its present form or as
amended from time to time, limits, qualifies, or conflicts with the
Investment Company Act of 1940 and the rules and regulations
promulgated thereunder, such statues, rules and regulations shall be
deemed to control and supersede such provision without nullifying or
terminating the remainder of the provisions of this Agreement.

J. The representations and warranties and the indemnification extended
hereunder are intended to and shall continue after and survive the
expiration, termination or cancellation of this Agreement.

K. The Custody Agreement between Custodian and Pilgrim GNMA Fund dated as
of

October 1, 1989, is hereby cancelled and superseded effective as of
the date hereof, except that all rights, duties and liabilities which
may have arisen under such Custody Agreement prior to the
effectiveness hereof shall continue and survive. Otherwise, this
Agreement does not in any way affect any other agreements entered into

between the parties hereto.

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their duly respective authorized officers.

INVESTORS FIDUCIARY TRUST COMPANY

By:_________________________________

Title:______________________________

PILGRIM GOVERNMENT SECURITIES INCOME
FUND, INC.

By:_________________________________

Title:______________________________

EXHIBIT A

INVESTORS FIDUCIARY TRUST COMPANY
AVAILABILITY SCHEDULE BY TRANSACTION TYPE

==========================================================================================
TRANSACTION DTC PHYSICAL FED
-------- ---
------------------------------------------------------------------------------------------
TYPE CREDIT DATE FUNDS TYPE CREDIT DATE FUNDS TYPE CREDIT DATE FUNDS TYPE
---- ----------- ---------- ----------- ---------- ----------- ----------

Calls Puts As Received C or F* As Received C or F*
------------------------------------------------------------------------------------------
Maturities As Received C or F* Mat. Date C or F* Mat. Date F
------------------------------------------------------------------------------------------
Tender Reorgs. As Received C As Received C N/A
------------------------------------------------------------------------------------------
Dividends Paydate C Paydate C N/A
------------------------------------------------------------------------------------------
Floating Rate Int. Paydate C Paydate C N/A
------------------------------------------------------------------------------------------
Floating Rate Int. N/A As Rate Received C N/A
(No Rate)
------------------------------------------------------------------------------------------
Mtg. Backed P&I Paydate C Paydate + 1 Bus. Day C Paydate F
------------------------------------------------------------------------------------------
Fixed Rate Int. Paydate C Paydate C Paydate F
------------------------------------------------------------------------------------------
Euroclear N/A C Paydate C
------------------------------------------------------------------------------------------

Legend

C = Clearinghouse Funds
F = Fed Funds
N/A = Not Applicable
* Availability based on how received.

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WITNESSETH:

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