SCHEDULE 14A
                                 PROXY STATEMENT
        PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934

Filed by Registrant [X]
Filed by Party other than the Registrant

Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential for Use of the Commission Only as permitted by Rule 14a-6(e)(2)
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11c or Rule 14a-12

   FLAHERTY & CRUMRINE/CLAYMORE PREFERRED SECURITIES INCOME FUND INCORPORATED
   --------------------------------------------------------------------------
                (Name of Registrant as Specified in Its Charter)

                     ---------------------------------------
                   (Name of Person(s) Filing Proxy Statement)

Payment of Filing Fee (Check the appropriate box):

[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11

(1) Title of each class of securities to which transaction applies:
___________________________
(2) Aggregate number of securities to which transaction applies:
____________________________
(3) Per unit price or other underlying value of transaction computed pursuant to
    Exchange Act  Rule 0-11.  (Set forth the amount  on which the filing  fee is
    calculated and state how it was determined):
_______________________________________________________________________
(4) Proposed maximum aggregate value of transaction:
_________________________________________
(5) Total fee paid:
_______________________________________________________________________

[ ] Fee paid previously with preliminary materials.

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

(1) Amount previously paid:_____________________________________________________
(2) Form, Schedule or Registration Statement No.:_______________________________
(3) Filing Party: ______________________________________________________________
(4) Date Filed: ________________________________________________________________



   FLAHERTY & CRUMRINE/CLAYMORE PREFERRED SECURITIES INCOME FUND INCORPORATED
                                  (NYSE: FFC)
     FLAHERTY & CRUMRINE/CLAYMORE TOTAL RETURN FUND INCORPORATED (NYSE: FLC)
                      301 E. Colorado Boulevard, Suite 720
                           Pasadena, California 91101

                    NOTICE OF ANNUAL MEETINGS OF SHAREHOLDERS
                          To Be Held on April 23, 2004

To the Shareholders:

         Notice is hereby  given that the Annual  Meetings  of  Shareholders  of
Flaherty  &Crumrine/Claymore   Preferred  Securities  Income  Fund  Incorporated
("PREFERRED  SECURITIES  FUND" OR "FFC") and Flaherty  &Crumrine/Claymore  Total
Return Fund  Incorporated  ("TOTAL  RETURN  FUND" OR "FLC")  (EACH A "FUND" AND,
COLLECTIVELY,  THE "FUNDS"),  each a Maryland  corporation,  will be held at the
offices of Willkie Farr & Gallagher  LLP, 787 Seventh  Avenue,  38th Floor,  New
York,  New York  10019  at 8:30  a.m.,  on April  23,  2004,  for the  following
purposes:

         1.       To elect Directors of each Fund (PROPOSAL 1).

         2.       To  approve  an  amendment  to  FFC's  Articles  Supplementary
                  Establishing  and Fixing the Rights and Preferences of Auction
                  Market  Preferred Stock  ("Articles  Supplementary")  (as more
                  fully set forth in the Joint  Proxy  Statement)  (PROPOSAL 2 -
                  FFC ONLY).

         3.       To transact  such other  business as may properly  come before
                  the Meetings or any adjournments thereof.

         The Board of  Directors of each Fund has fixed the close of business on
January 26, 2004 as the record date for the  determination  of  shareholders  of
each Fund entitled to notice of and to vote at the Annual Meetings.


                                           By Order of the Boards of Directors,



February [__], 2004                        R. ERIC CHADWICK
                                           SECRETARY

--------------------------------------------------------------------------------
SEPARATE  PROXY  CARDS  ARE  ENCLOSED  FOR EACH  FUND IN WHICH  YOU OWN  SHARES.
SHAREHOLDERS  WHO DO NOT EXPECT TO ATTEND THE ANNUAL  MEETINGS ARE  REQUESTED TO
COMPLETE,  SIGN AND DATE THE ENCLOSED PROXY CARD(S). THE PROXY CARD(S) SHOULD BE
RETURNED  IN THE  ENCLOSED  ENVELOPE,  WHICH  NEEDS NO  POSTAGE IF MAILED IN THE
CONTINENTAL UNITED STATES.  INSTRUCTIONS FOR THE PROPER EXECUTION OF PROXIES ARE
SET FORTH ON THE INSIDE COVER.
--------------------------------------------------------------------------------



                      INSTRUCTIONS FOR SIGNING PROXY CARDS

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

         1.  Individual  Accounts:  Sign your name  exactly as it appears in the
registration on the proxy card(s).

         2. Joint  Accounts:  Either  party may sign,  but the name of the party
signing should conform exactly to a name shown in the registration.

         3. All Other Accounts: The capacity of the individual signing the proxy
card should be indicated unless it is reflected in the form of registration. For
example:

       REGISTRATION                                 VALID SIGNATURE

       CORPORATE ACCOUNTS

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

       TRUST ACCOUNTS

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

       CUSTODIAN OR ESTATE ACCOUNTS

       (1)      John B. Smith, Cust.,               John B. Smith
                f/b/o John B. Smith, Jr. UGMA
       (2)      John B. Smith, Executor,            John B. Smith, Jr., Executor
                estate of Jane Smith



   FLAHERTY & CRUMRINE/CLAYMORE PREFERRED SECURITIES INCOME FUND INCORPORATED
                                  (NYSE: FFC)
     FLAHERTY & CRUMRINE/CLAYMORE TOTAL RETURN FUND INCORPORATED (NYSE: FLC)

                      301 E. Colorado Boulevard, Suite 720
                           Pasadena, California 91101

                         ANNUAL MEETINGS OF SHAREHOLDERS
                                 April 23, 2004

                              JOINT PROXY STATEMENT

         This document is a joint proxy statement  ("Joint Proxy Statement") for
Flaherty  &Crumrine/Claymore   Preferred  Securities  Income  Fund  Incorporated
("PREFERRED  SECURITIES  FUND" OR "FFC") and Flaherty & Crumrine/Claymore  Total
Return Fund  Incorporated  ("TOTAL  RETURN  FUND" OR "FLC")  (EACH A "FUND" AND,
COLLECTIVELY,   THE  "FUNDS").  This  Joint  Proxy  Statement  is  furnished  in
connection  with the  solicitation  of proxies by each Fund's Board of Directors
(each a "Board" and collectively, the "Boards") for use at the Annual Meeting of
Shareholders  of each Fund to be held on April 23,  2004,  at 8:30 a.m.,  at the
offices of Willkie Farr & Gallagher  LLP, 787 Seventh  Avenue,  38th Floor,  New
York,  New York 10019 and at any  adjournments  thereof  (each a  "Meeting"  and
collectively,  the "Meetings").  A Notice of Annual Meetings of Shareholders and
proxy  card for each Fund of which you are a  shareholder  accompany  this Joint
Proxy  Statement.  Proxy  solicitations  will be  made,  beginning  on or  about
February [--,] 2004, primarily by mail, but proxy solicitations may also be made
by  telephone,  telegraph or personal  interviews  conducted by officers of each
Fund, Flaherty & Crumrine Incorporated ("Flaherty & Crumrine" or the "Adviser"),
the investment adviser of each Fund, Claymore  Securities,  Inc. (the "Servicing
Agent"), the servicing agent of each Fund, and PFPC Inc., the transfer agent and
administrator  of each Fund and a member of The PNC  Financial  Services  Group,
Inc. In addition, FFC has retained Proxy Advantage to assist in the solicitation
of proxies for a fee estimated at $35,000 plus reimbursement of expenses.  Other
costs of  proxy  solicitation  and  expenses  incurred  in  connection  with the
preparation  of this Joint Proxy  Statement  and its  enclosures  will be shared
proportionately by the Funds. Each Fund also will reimburse  brokerage firms and
others for their expenses in forwarding  solicitation material to the beneficial
owners of its shares.

         THE ANNUAL REPORT OF EACH FUND,  INCLUDING AUDITED FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED NOVEMBER 30, 2003, IS AVAILABLE UPON REQUEST,  WITHOUT
CHARGE, BY WRITING TO PFPC INC., P.O. BOX 43027, PROVIDENCE,  RI 02940-3027,  OR
CALLING 1-800-331-1710.

         If the enclosed proxy card is properly executed and returned in time to
be voted at the  relevant  Meeting,  the Shares (as defined  below)  represented
thereby will be voted in accordance with the instructions marked thereon. Unless
instructions to the contrary are marked thereon, a proxy will be voted "FOR" the
election of the nominees for Director and "FOR" the other matters (as applicable
to  each  Fund)  listed  in  the  accompanying  Notice  of  Annual  Meetings  of
Shareholders.  Any  shareholder who has given a proxy has the right to revoke it
at any time prior to its exercise  either by attending the relevant  Meeting and
voting his or her Shares in person or by  submitting a letter of revocation or a
later-dated proxy to the appropriate Fund at the above address prior to the date
of the Meeting.

         In the event that a quorum is not  present at a Meeting or in the event
that a quorum is present but  sufficient  votes to approve any of the  proposals
are  not  received,  the  persons  named  as  proxies  may  propose  one or more
adjournments of the Meeting to permit further  solicitation of proxies. Any such
adjournment  will  require the  affirmative  vote of a majority of those  shares
represented  at the Meeting in person or by proxy.  If a quorum is present,  the
persons named as proxies will vote those proxies which they are entitled to vote
"FOR" the proposal in favor of such an  adjournment  and will vote those proxies
required to be voted  "AGAINST"  the proposal  against any such  adjournment.  A
shareholder  vote may be taken on a proposal in the Joint Proxy  Statement prior
to any such  adjournment  if  sufficient  votes have been received for approval.
Under the  By-Laws of each Fund,  a quorum is  constituted  by the  presence  in
person or by proxy of the holders of a majority of the outstanding shares of the
Fund entitled to vote at the Meeting.  If a proposal is to be voted upon by only
one class of a Fund's  shares,  a quorum of that class of shares must be present
at the Meeting in order for the proposal to be considered.

         Each Fund has two classes of capital  stock:  common  stock,  par value
$0.01 per share (the "Common Stock");  and Auction Market Preferred Shares,  par
value $0.01 per share  ("AMPS";  together with the Common Stock,  the "Shares").
Each Share is entitled to one vote at the Meeting,  with pro rata voting  rights
for any fractional  Shares. On the record date,  January 26, 2004, the following
number of Shares of each Fund were issued and outstanding:

                                       1


                                             COMMON STOCK           AMPS
         NAME OF FUND                         OUTSTANDING        OUTSTANDING
         ------------                         -----------        -----------

         Preferred Securities Fund (FFC)      42,052,055    Series M7   -  3,200
                                                            Series T7   -  3,200
                                                            Series W7   -  3,200
                                                            Series Th7  -  3,200
                                                            Series F7   -  3,200
                                                            Series T28  -  2,840
                                                            Series W28  -  2,840

         Total Return Fund (FLC)               9,703,910    Series T7   -  2,570
                                                            Series W28  -  2,570

         To  the   knowledge  of  each  Fund  and  its  Board,   the   following
shareholder(s)  or  "group",  as that term is defined  in  Section  13(d) of the
Securities  Exchange Act of 1934 (the "1934 Act"),  is the  beneficial  owner or
owner of record of more than 5% of the relevant Fund's  outstanding shares as of
January 26, 2004*:



         NAME AND ADDRESS OF BENEFICIAL/                                  AMOUNT AND NATURE
         RECORD OWNER                               TITLE OF CLASS          OF OWNERSHIP               PERCENT OF CLASS
         ------------                               --------------          ------------               ----------------

                                                                                                  
         Cede & Co.**                                   Common       FFC -  41,973,568                     99.81%
         Depository Trust Company                        Stock       (record)
         55 Water Street, 25th Floor                                 FLC -   9,693,833                     99.90%
         New York, NY                                                (record)
         10041
                                                         AMPS        FFC -
                                                                     Series M7    - 3,200 (record)           100%
                                                                     Series T7    - 3,200 (record)           100%
                                                                     Series W7    - 3,200 (record)           100%
                                                                     Series Th7   - 3,200 (record)           100%
                                                                     Series F7    - 3,200 (record)           100%
                                                                     Series T28   - 2,840 (record)           100%
                                                                     Series W28   - 2,840 (record)           100%
                                                                     FLC -
                                                                     Series T7    - 2,570 (record)           100%
                                                                     Series W28   - 2,570 (record)           100%


-----------------
*        As of January 26, 2004, the Directors and officers, as a group, owned
         less than 1% of each class of Shares.
**       A nominee partnership of The Depository Trust Company.



         This  Joint  Proxy  Statement  is being  used in order  to  reduce  the
preparation,  printing, handling and postage expenses that would result from the
use of a separate proxy statement for each Fund.  Shareholders of each Fund will
vote as a single class except as described below under Proposal 1 and Proposal 2
(FFC only) and will vote  separately on each proposal on which  shareholders  of
that Fund are entitled to vote.  Separate proxy cards are enclosed for each Fund
in which a  shareholder  is a record  owner of Shares.  Thus,  if a proposal  is
approved by  shareholders  of one Fund and  disapproved by  shareholders  of the
other Fund,  the proposal  will be  implemented  for the Fund that  approved the
proposal  and will not be  implemented  for the Fund  that did not  approve  the
proposal.  It is therefore essential that shareholders  complete,  date and sign
EACH enclosed proxy card.  SHAREHOLDERS OF EACH FUND ARE ENTITLED TO VOTE ON THE
PROPOSAL(S) PERTAINING TO THAT FUND.

         In order that your Shares may be represented  at the Meetings,  you are
requested to vote on the following matters:

                   SUMMARY OF VOTING RIGHTS ON PROXY PROPOSALS

PREFERRED SECURITIES FUND (FFC)



-------------------------------------------------------------------------------------------------------------------------------
    PROPOSAL                                      COMMON SHAREHOLDERS                            AMPS SHAREHOLDERS
-------------------------------------------------------------------------------------------------------------------------------
                                                                                 
   1. Election of Directors             Common Shareholders as a single class          AMPS Shareholders as a single class
                                        elect four Directors: Martin Brody,            elect two Directors: Nicholas Dalmaso
                                        Donald F. Crumrine, David Gale and             and Morgan Gust
                                        Robert F. Wulf
-------------------------------------------------------------------------------------------------------------------------------

   2. Amendment to Articles             Common and AMPS Shareholders, voting           Common and AMPS Shareholders,
      Supplementary                     together as a single class                     voting together as a single class
-------------------------------------------------------------------------------------------------------------------------------

   3. Other Business                    Common and AMPS Shareholders, voting together as a single class
-------------------------------------------------------------------------------------------------------------------------------


                                       2


                   SUMMARY OF VOTING RIGHTS ON PROXY PROPOSALS

TOTAL RETURN FUND (FLC)



---------------------------------------------------------------------------------------------------------------------------------
      PROPOSAL                                    COMMON SHAREHOLDERS                            AMPS SHAREHOLDERS
---------------------------------------------------------------------------------------------------------------------------------
                                                                               
   1. Election of Directors             Common Shareholders as a single class        AMPS Shareholders as a single class
                                        elect four Directors: Martin Brody,          elect two Directors: Nicholas Dalmaso
                                        Donald F. Crumrine, David Gale and           and Morgan Gust
                                        Robert F. Wulf
---------------------------------------------------------------------------------------------------------------------------------

   2. Other Business                    Common and AMPS Shareholders, voting together as a single class
---------------------------------------------------------------------------------------------------------------------------------


                        PROPOSAL 1: ELECTION OF DIRECTORS

         At the Meetings,  shareholders are being asked to consider the election
of Directors of each Fund.  Each nominee named below has consented to serve as a
Director if elected at the relevant Meeting. If a designated nominee declines or
otherwise  becomes  unavailable  for  election,   however,   the  proxy  confers
discretionary  power  on the  persons  named  therein  to  vote  in  favor  of a
substitute nominee or nominees.

NOMINEES FOR THE BOARD OF DIRECTORS

         The Board of each Fund is divided into three classes, each class having
a term of three years.  The initial  election of each Director Nominee will take
place at the  Meeting and each year  thereafter  the term of office of one class
expires  and the  successor  or  successors  elected to such  class  serve for a
three-year  term.  The classes of  Directors  are the same for each Fund and are
indicated below:

        CLASS I DIRECTORS        CLASS II DIRECTORS          CLASS III DIRECTORS
        -----------------        ------------------          -------------------
        Nicholas Dalmaso            Martin Brody             Donald F. Crumrine
           David Gale                Morgan Gust               Robert F. Wulf

         The  Class I  Directors  of each  Fund all have  been  nominated  for a
one-year term to expire at each Fund's 2005 Annual Meeting of  Shareholders  and
until their  successors  are duly elected and  qualified.  Class II Directors of
each Fund all have been  nominated  for a two-year term to expire at each Fund's
2006 Annual Meeting of Shareholders  and until their successors are duly elected
and  qualified.  Class III Directors of each Fund have all been  nominated for a
three-year term to expire at each Fund's 2007 Annual Meeting of Shareholders and
until their successors are duly elected and qualified.  Each Director has served
in such capacity since each Fund's commencement of operations.

         Under each Fund's Articles of Incorporation, Articles Supplementary and
the  Investment  Company Act of 1940,  as amended (the "1940  Act"),  holders of
AMPS,  voting as a single class,  will be entitled to elect two  Directors,  and
holders of the Common Stock will be entitled to elect the  remaining  Directors.
However,  subject to the  provisions of the 1940 Act and the Fund's  Articles of
Incorporation,  the holders of AMPS,  when dividends are in arrears for two full
years, are able to elect the minimum number of additional  Directors,  that when
combined with the two Directors  elected by the holders of AMPS,  would give the
holders of AMPS a majority of the Directors.  Nicholas  Dalmaso and Morgan Gust,
as Directors,  currently represent holders of AMPS of each Fund. A quorum of the
AMPS  shareholders  must be present at the Meeting of each Fund in order for the
proposal to elect Messrs. Dalmaso and Gust, respectively, to be considered.

                           FUND (CLASS)                 NOMINEE(S) FOR DIRECTOR

                     FFC (Common Stock)                          Brody
                                                               Crumrine
                                                                 Gale
                                                                 Wulf

                     FFC (AMPS)                                 Dalmaso
                                                                 Gust

                     FLC (Common Stock)                          Brody
                                                               Crumrine
                                                                 Gale
                                                                 Wulf

                     FLC (AMPS)                                 Dalmaso
                                                                 Gust

                                        3


INFORMATION ABOUT DIRECTORS AND OFFICERS

         Set forth in the table below are the  existing  Directors  and nominees
for  election to the Boards of  Directors  of the Funds,  including  information
relating to their respective positions held with each Fund, a brief statement of
their principal  occupations during the past five years and other directorships,
if any. Each Director serves in the same capacity for each Fund.



                                                                                   NUMBER OF
                                                                  PRINCIPAL         FUNDS IN
                                           TERM OF OFFICE        OCCUPATION(S)    FUND COMPLEX
NAME, ADDRESS,             POSITION(S)      AND LENGTH OF         DURING PAST       OVERSEEN          OTHER DIRECTORSHIPS
AND AGE                  HELD WITH FUNDS    TIME SERVED*          FIVE YEARS      BY DIRECTOR**         HELD BY DIRECTOR
--------------           ---------------   --------------        -------------    -------------       -------------------
                                                                                    
NON-INTERESTED
DIRECTORS:

MARTIN BRODY                Director     Class II Director             Retired          4            Director, Jaclyn, Inc.
c/o HMK Associates                      FFC - since inception                                      (luggage and accessories);
30 Columbia Turnpike                    FLC - since inception                                       Director Emeritus, Smith
Florham Park, NJ 07932                                                                                 Barney Mutual Funds
Age: 82                                                                                              (18 funds); Director,
                                                                                                      Flaherty & Crumrine
                                                                                                      Preferred Income Fund
                                                                                                   Incorporated and Flaherty &
                                                                                                    Crumrine Preferred Income
                                                                                                        Opportunity Fund
                                                                                                          Incorporated.

DAVID GALE                  Director      Class I Director        President and CEO     4            Director, Golden State
Delta Dividend Group, Inc.              FFC - since inception    of Delta Dividend              Vintners, Inc. (wine  pressing);
220 Montgomery Street,                  FLC - since inception       Group, Inc.                   Director, Flaherty & Crumrine
Suite 426                                                           (investments)                 Preferred Income Fund Incor-
San Francisco, CA 94104                                                                              porated and Flaherty &
Age: 54                                                                                             Crumrine Preferred Income
                                                                                                        Opportunity Fund
                                                                                                          Incorporated.

MORGAN GUST (1)             Director     Class II Director        Since March 2002,     4         Director, Flaherty & Crumrine
Giant Industries, Inc.                  FFC - since inception    President of Giant               Preferred Income Fund Incor-
23733 N. Scottsdale Road                FLC - since inception     Industries, Inc.                   porated and Flaherty &
Scottsdale, AZ 85255                                             (petroleum refining               Crumrine Preferred Income
Age: 56                                                          and marketing) and,                    Opportunity Fund
                                                                 for more than five                       Incorporated.
                                                                years prior thereto,
                                                                   Executive Vice
                                                                   President, and
                                                                   various other
                                                                   Vice President
                                                                    positions at
                                                                  Giant Industries,
                                                                        Inc.

ROBERT F. WULF              Director     Class III Director    Financial Consultant;    4        Director, Flaherty & Crumrine
3560 Deerfield Drive South              FFC - since inception  Trustee, University of             Preferred Income Fund Incor-
Salem, OR 97302                         FLC - since inception    Oregon Foundation;                  porated and Flaherty &
Age: 66                                                        Trustee, San Francisco                  Crumrine Preferred
                                                                Theological Seminary                Income Opportunity Fund
                                                                                                          Incorporated.


                                       4




                                                                                               NUMBER OF
                                                                          PRINCIPAL             FUNDS IN
                                                   TERM OF OFFICE        OCCUPATION(S)        FUND COMPLEX
NAME, ADDRESS,                  POSITION(S)         AND LENGTH OF         DURING PAST           OVERSEEN        OTHER DIRECTORSHIPS
AND AGE                       HELD WITH FUNDS       TIME SERVED*          FIVE YEARS          BY DIRECTOR**       HELD BY DIRECTOR
--------------                ---------------      --------------        -------------        -------------     -------------------
                                                                                              
INTERESTED
DIRECTORS:

DONALD F. CRUMRINE (1)(2)(3)  Director,          Class III Director     Chairman of the Board        4      Director, Flaherty &
301 E. Colorado Boulevard     Chairman of       FFC - since inception       and Director of                  Crumrine Preferred
Suite 720                     the Board and     FLC - since inception     Flaherty & Crumrine                   Income Fund
Pasadena, CA 91101            Chief Executive                                                                 Incorporated and
Age: 56                       Officer                                                                        Flaherty & Crumrine
                                                                                                              Preferred Income
                                                                                                              Opportunity Fund
                                                                                                                Incorporated.

NICHOLAS DALMASO (1)          Director,           Class I Director         Senior Managing           2        Trustee, Dreman/
201 N. Hale Street            Vice President    FFC - since inception        Director and                     Claymore Dividend
Wheaton, IL 60187             and Assistant     FLC - since inception     General Counsel of                  and Income Fund,
Age: 38                       Secretary                                  Claymore Securities,                 Advent Claymore
                                                                         Inc. since November,                Equity Income Fund,
                                                                          2001 and Claymore                     MBIA Capital/
                                                                          Advisers, LLC since                 Claymore Managed
                                                                        October, 2003. Partner               Duration Investment
                                                                          of DBN Group since                   Grade Municipal
                                                                        April, 2001. Assistant                Fund and Western
                                                                          General Counsel of                 Asset/Claymore U.S.
                                                                          Nuveen Investments                 Treasury Inflation
                                                                           from July 1999 to                Protection Securities
                                                                         November, 2001. Prior                      Fund.
                                                                        to that, Vice President
                                                                         and Associate General
                                                                         Counsel of Van Kampen
                                                                              Investments.

OFFICERS:

ROBERT M. ETTINGER            President                 Officer               President and         N/A               N/A
301 E. Colorado Boulevard                        FFC - since inception         Director of
Suite 720                                        FLC - since inception     Flaherty & Crumrine
Pasadena, CA 91101
Age: 45

PETER C. STIMES               Chief Financial           Officer            Vice President of        N/A               N/A
301 E. Colorado Boulevard     Officer, Chief     FFC - since inception     Flaherty & Crumrine
Suite 720                     Accounting         FLC - since inception
Pasadena, CA 91101            Officer, Vice
Age: 48                       President,
                              Treasurer and
                              Assistant Secretary


                                       5




                                                                                               NUMBER OF
                                                                          PRINCIPAL             FUNDS IN
                                                   TERM OF OFFICE        OCCUPATION(S)        FUND COMPLEX
NAME, ADDRESS,                  POSITION(S)         AND LENGTH OF         DURING PAST           OVERSEEN        OTHER DIRECTORSHIPS
AND AGE                       HELD WITH FUNDS       TIME SERVED*          FIVE YEARS          BY DIRECTOR**       HELD BY DIRECTOR
--------------                ---------------      --------------        -------------        -------------     -------------------
                                                                                              
OFFICERS:

BRADFORD S. STONE            Vice President            Officer             Since May 2003,          N/A              N/A
392 Springfield Avenue        and Assistant       FFC - since 2003        Vice President of
Mezzanine Suite                 Treasurer       FLC - since inception   Flaherty & Crumrine;
Summit, NJ 07901                                                         from June 2001 to
Age: 44                                                                April 2003, Director of
                                                                        US Market Strategy at
                                                                       Barclays Capital; from
                                                                        February 1987 to June
                                                                       2001, Vice President of
                                                                          Goldman, Sachs &
                                                                         Company as Director
                                                                         of US Interest Rate
                                                                      Strategy and, previously,
                                                                         Vice President of
                                                                            Interest Rate
                                                                            Product Sales

R. ERIC CHADWICK             Vice President,           Officer           Vice President of          N/A              N/A
301 E. Colorado Boulevard       Secretary       FFC - since inception    Flaherty & Crumrine
Suite 720                          and          FFC - since inception    since August 2001,
Pasadena, CA  91101             Assistant                               and previously (since
Age: 28                         Treasurer                              January 1999) portfolio
                                                                        manager of Flaherty &
                                                                      Crumrine. Prior to that,
                                                                        portfolio manager of
                                                                        Koch Industries, Inc.


-----------------------------------
*        Class I Directors of each Fund all have been  nominated  for a one-year
         term to expire at each Fund's 2005 Annual Meeting of  Shareholders  and
         until  their  successors  are  duly  elected  and  qualified.  Class II
         Directors of each Fund all have been  nominated  for a two-year term to
         expire at each  Fund's 2006 Annual  Meeting of  Shareholders  and until
         their successors are duly elected and qualified. Class III Directors of
         each Fund all have been  nominated  for a three-year  term to expire at
         each  Fund's  2007  Annual  Meeting  of  Shareholders  and until  their
         successors are duly elected and qualified.
**       The funds in the fund complex are: Flaherty & Crumrine Preferred Income
         Fund  Incorporated,  Flaherty & Crumrine  Preferred Income  Opportunity
         Fund Incorporated,  Flaherty & Crumrine/Claymore  Preferred  Securities
         Income Fund Incorporated and Flaherty & Crumrine/Claymore  Total Return
         Fund Incorporated (together, the "Flaherty & Crumrine Fund Family").
(1)      As a Director, represents holders of AMPS.
(2)      "Interested  person" of the Funds as  defined in the 1940 Act.  Messrs.
         Crumrine and Dalmaso are each considered an "interested person" because
         of  their  affiliation  with  the  Adviser  and  the  Servicing  Agent,
         respectively.
(3)      During the year ended  November 30, 2003,  Donald F. Crumrine purchased
         100  shares of common stock of Flahery &  Crumrine for $81,212.20, paid
         in cash, from Robert T. Flaherty.




BENEFICIAL OWNERSHIP OF SHARES IN FUNDS AND FUND COMPLEX FOR EACH DIRECTOR AND
NOMINEE FOR ELECTION AS DIRECTOR

         Set forth in the table below is the dollar  range of equity  securities
in each Fund and the aggregate dollar range of equity securities in the Flaherty
& Crumrine Fund Family beneficially owned by each Director.

                                       6




                                                                                          AGGREGATE DOLLAR RANGE OF EQUITY
                                                                                       SECURITIES IN ALL REGISTERED INVESTMENT
                                                        DOLLAR RANGE OF EQUITY           COMPANIES OVERSEEN BY DIRECTOR IN
NAME OF DIRECTOR                                    SECURITIES HELD IN FUND* (1)(2)      FAMILY OF INVESTMENT COMPANIES* (3)
----------------                                    -------------------------------    ---------------------------------------

                                                      FFC                     FLC                       TOTAL
                                                      ---                     ---                       -----

NON-INTERESTED DIRECTORS:

                                                                                                
Martin Brody                                           C                       D                          E

David Gale                                             C                       C                          E

Morgan Gust                                            C                       C                          E

Robert F. Wulf                                         C                       B                          D

INTERESTED DIRECTORS:

Donald F. Crumrine                                   E(4)                    E(4)                       E(4)

Nicholas Dalmaso                                       A                       A                          A


---------------------------
*        Key to Dollar Ranges
A.       None
B.       $1 - $10,000
C.       $10,001 -$50,000
D.       $50,001 - $100,000
E.       over $100,000
         All shares were valued as of December 31, 2003.
(1)      No Director or officer of the Funds owned any shares of AMPS on January
         26, 2004.
(2)      This  information has been furnished by each Director as of January 29,
         2004.  "Beneficial  Ownership" is  determined  in accordance  with Rule
         16a-1(a)(2) of the 1934 Act.
(3)      As a group, less than 1%.
(4)      Includes shares of FFC and FLC held by Flaherty & Crumrine of which the
         reporting person is a shareholder and director.



         Each  Director of each Fund who is not a director,  officer or employee
of Flaherty & Crumrine or any of their  affiliates  receives a fee of $9,000 per
annum plus $500 for each in-person meeting,  and $150 for each telephone meeting
for FFC and $100 for each  telephone  meeting  for FLC. In  addition,  effective
October 17, 2003, the Audit Committee  Chairman  receives an annual fee per Fund
of $2,500. Each Director of each Fund is reimbursed for travel and out-of-pocket
expenses  associated with attending Board and committee  meetings.  The Board of
Directors  of FFC  held ten  meetings  (four of  which  were  held by  telephone
conference  call) and the Board of Directors of FLC held five  meetings  (two of
which were held by  telephone  conference  call)  during  the fiscal  year ended
November  30, 2003,  and all of the  Directors of each Fund then serving in such
capacity attended at least 75% of the meetings of Directors and any Committee of
which he is a member.  In addition,  one meeting of a special "ad hoc" committee
of the Board of Directors was held for FFC. The aggregate  remuneration  paid to
the Directors  and officers of each Fund for the fiscal year ended  November 30,
2003 is set forth below:

--------------------------------------------------------------------------------
                                          BOARD MEETING           TRAVEL AND
                     ANNUAL                    AND               OUT-OF-POCKET
                 DIRECTORS FEES      COMMITTEE MEETING FEES        EXPENSES*
--------------------------------------------------------------------------------
 FFC                 $34,296                 $21,800                $19,154
 FLC                 $13,404                 $10,300                 $6,099
--------------------------------------------------------------------------------

--------------
 *   Includes  reimbursement  for travel  and  out-of-pocket  expenses  for both
     "interested" and "non-interested" Directors ("Independent Directors").

AUDIT COMMITTEE REPORT

         The role of each  Fund's  Audit  Committee  is to  assist  the Board of
Directors  in its  oversight  of (i)  the  integrity  of each  Fund's  financial
statements and the  independent  audit therof;  (ii) each Fund's  accounting and
financial  reporting  policies  and  practices,  its internal  controls  and, as
appropriate,  the internal  controls of certain  service  providers;  (iii) each
Fund's  compliance  with  legal  and  regulatory  requirements;   and  (iv)  the
independent auditor's qualifications, independence and performance. In addition,
pursuant to each Fund's Audit Committee Charter,  each Fund's Audit Committee is
also required to prepare an audit committee  report pursuant to the rules of the
Securities  and  Exchange  Commission  (the "SEC") for  inclusion in each Fund's
annual proxy statement. Each Audit Committee operates pursuant to a Charter that
was most  recently  reviewed and approved by the Board of Directors of each Fund
on January 21, 2004. The Audit Committee Charter appli-

                                        7



cable to each Fund is attached as Annex A to this Joint Proxy Statement.  As set
forth  in the  Charter,  management  is  responsible  for (i)  the  preparation,
presentation  and  integrity  of each  Fund's  financial  statements,  (ii)  the
maintenance of appropriate  accounting  and financial  reporting  principles and
policies, and (iii) the maintenance of internal controls and procedures designed
to  assure  compliance  with  accounting   standards  and  applicable  laws  and
regulations.  The  independent  accountants  are  responsible  for  planning and
carrying out proper audits and reviews of each Fund's  financial  statements and
expressing  an  opinion  as  to  their  conformity  with  accounting  principles
generally accepted in the United States of America.

         In performing its oversight function,  at a meeting held on January 21,
2004, the Audit  Committee  reviewed and discussed with  management of each Fund
and the  independent  accountants,  KPMG LLP  ("KPMG"),  the  audited  financial
statements  of each Fund as of and for the fiscal year ended  November 30, 2003,
and  discussed  the  audit of such  financial  statements  with the  independent
accountants.

         In  addition,  the  Audit  Committee  discussed  with  the  independent
accountants  the  accounting  principles  applied  by each  Fund and such  other
matters  brought to the  attention  of the Audit  Committee  by the  independent
accountants  required by Statement of Auditing Standards No. 61,  Communications
with  Audit  Committees,  as  currently  modified  or  supplemented.  The  Audit
Committee also received from the independent accountants the written disclosures
and  statements   required  by  the  SEC's   independence   rules,   delineating
relationships  between the  independent  accountants and each Fund and discussed
the  impact  that any  such  relationships  might  have on the  objectivity  and
independence of the independent accountants.

         As set forth  above,  and as more fully set forth in each Fund's  Audit
Committee Charter,  the Audit Committee has significant duties and powers in its
oversight  role with  respect  to the  Fund's  financial  reporting  procedures,
internal controls systems, and the independent audit process.

         The  members  of the  Audit  Committee  are not,  and do not  represent
themselves  to  be,  professionally  engaged  in the  practice  of  auditing  or
accounting  and  are  not  employed  by  each  Fund  for  accounting,  financial
management or internal  control.  Moreover,  the Audit  Committee  relies on and
makes  no   independent   verification   of  the  facts   presented   to  it  or
representations  made by management  or  independent  verification  of the facts
presented  to it or  representations  made  by  management  or  the  independent
accountants.  Accordingly,  the Audit Committee's  oversight does not provide an
independent  basis to  determine  that  management  has  maintained  appropriate
accounting and financial reporting principles and policies, or internal controls
and procedures,  designed to assure  compliance  with  accounting  standards and
applicable   laws  and   regulations.   Furthermore,   the   Audit   Committee's
considerations  and discussions  referred to above do not provide assurance that
the audit of each Fund's financial statements has been carried out in accordance
with generally accepted  accounting  standards or that the financial  statements
are presented in accordance with generally accepted accounting principles.

         Based on its consideration of the audited financial  statements and the
discussions  referred to above with management and the  independent  accountants
and subject to the  limitations  on the  responsibilities  and role of the Audit
Committee  set  forth in the  Charter  and  those  discussed  above,  the  Audit
Committee of each Fund  recommended  to the Board of Directors of each Fund that
the audited  financial  statements  be included in each Fund's Annual Report for
the fiscal year ended November 30, 2003.

THIS  REPORT  WAS  SUBMITTED  BY THE AUDIT  COMMITTEE  OF EACH  FUND'S  BOARD OF
DIRECTORS

Martin Brody
David Gale
Morgan Gust
Robert Wulf (Chairman)

January 21, 2004

         The Audit  Committee for FFC met four times and the Audit Committee for
FLC met twice  during  the fiscal  year  ended  November  30,  2003.  Each Audit
Committee is composed entirely of the relevant Fund's  independent (as such term
is defined by the New York Stock Exchange,  Inc.'s listing  standards (the "NYSE
Listing Standards")) Directors, namely Messrs. Brody, Gale, Gust and Wulf.

NOMINATING COMMITTEE

         Each Board of Directors has a Nominating Committee composed entirely of
each Fund's  independent (as such term is defined by the NYSE Listing Standards)
Directors,  namely Messrs.  Brody, Gale, Gust and Wulf. The Nominating Committee
of each Fund did not meet during the fiscal year ended  November 30,  2003.  The
Nominating Committee is

                                        8



responsible for identifying individuals believed to be qualified to become Board
members and  recommending  to the Board of Directors  such nominees to stand for
election as directors at each Fund's annual meeting of shareholders  and to fill
any vacancies on the Board. Each Fund's Nominating Committee has a charter which
is available on the Funds' website (www.fcclaymore.com).

         Each  Fund's  Nominating  Committee  believes  that  it is in the  best
interest of the Fund and its shareholders to obtain highly qualified  candidates
to serve as members of the Board of Directors.  The Nominating  Committees  have
not  established a formal  process for  identifying  candidates  where a vacancy
exists on the Board. In nominating  candidates,  the Nominating  Committee shall
take into consideration such factors as it deems appropriate.  These factors may
include judgment,  skill,  diversity,  experience with investment  companies and
other  organizations  of  comparable  purpose,  complexity,  size and subject to
similar legal  restrictions  and  oversight,  the  interplay of the  candidate's
experience  with the experience of other Board members,  and the extent to which
the  candidate  would be a desirable  addition  to the Board and any  committees
thereof.

         Each Fund's  Nominating  Committee  will consider  director  candidates
recommended by shareholders  and submitted in accordance with applicable law and
procedures  as  described  in this Joint Proxy  Statement  (see  "Submission  of
Shareholder Proposals" below).

OTHER BOARD-RELATED MATTERS

         Shareholders who wish to send  communications  to the Board should send
them to the  address of the Fund and to the  attention  of the  Board.  All such
communications will be directed to the Board's attention.

         The Funds do not have a formal policy regarding Board member attendance
at the Annual Meeting of Shareholders.

COMPENSATION

         The  following  table  sets forth  certain  information  regarding  the
compensation  of each Fund's  Directors  for the fiscal year ended  November 30,
2003.  No  executive  officer  or  person  affiliated  with  the  Fund  received
compensation  from the Fund  during the fiscal year ended  November  30, 2003 in
excess of $60,000.  Directors and executive officers of the Funds do not receive
pension or retirement benefits from the Funds.

                               COMPENSATION TABLE



               NAME OF                             AGGREGATE                   TOTAL COMPENSATION FROM
             PERSON AND                          COMPENSATION                    THE FUNDS AND FUND
              POSITION                          FROM EACH FUND               COMPLEX PAID TO DIRECTORS*
              --------                          --------------               --------------------------

                                                                               
DONALD F. CRUMRINE                                    $0                               $0 (4)
Director, Chairman of the Board
and Chief Executive Officer

NICHOLAS DALMASO                                      $0                               $0 (2)
Director

MARTIN BRODY                                     $13,574 - FFC                       $46,725 (4)
Director                                         $ 5,551 - FLC

DAVID GALE                                       $14,074 - FFC                       $47,725 (4)
Director                                         $ 6,051 - FLC

MORGAN GUST                                      $14,274 - FFC                       $48,125 (4)
Director                                         $ 6,051 - FLC

ROBERT F. WULF                                   $14,174 - FFC                       $48,628 (4)
Director                                         $ 6,051 - FLC


------------------------------
*        Represents the total compensation paid to such persons by the Funds and
         the other funds in the Flaherty & Crumrine Fund Family for, in the case
         of FFC and FLC,  the fiscal  period  from each Fund's  commencement  of
         operations  through  November 30, 2003,  and, in the case of Flaherty &
         Crumrine  Preferred  Income Fund  Incorporated  and Flaherty & Crumrine
         Preferred  Income  Opportunity Fund  Incorporated,  for the fiscal year
         ended November 30, 2003,  which are  considered  part of the same "fund
         complex" because they have a common adviser.  The parenthetical  number
         represents the total number of investment company directorships held by
         the director or nominee in such fund complex as of November 30, 2003.



                                        9



REQUIRED VOTE

         The election of Messrs. Brody, Crumrine,  Gale and Wulf as Directors of
each Fund will require the affirmative  vote of a plurality of the votes cast by
holders of the shares of Common  Stock of each Fund at the  Meeting in person or
by proxy.  The  election of Messrs.  Dalmaso and Gust as  Directors of each Fund
will require the affirmative vote of a plurality of the votes cast by holders of
the shares of AMPS of each Fund at the Meeting in person or by proxy.

         Proposal  1 is a  routine  item.  A routine  item is one  which  occurs
annually and makes no  fundamental  or material  changes to a fund's  investment
objectives, policies or restrictions, or to the investment management contracts.

         EACH BOARD OF DIRECTORS,  INCLUDING ALL OF THE  INDEPENDENT  DIRECTORS,
UNANIMOUSLY  RECOMMENDS  THAT  THE  SHAREHOLDERS  VOTE  "FOR"  EACH  NOMINEE  AS
DIRECTOR.

     PROPOSAL 2: APPROVAL OF AN AMENDMENT TO THE PREFERRED SECURITIES FUND'S
                             ARTICLES SUPPLEMENTARY

         The second  proposal to be considered at the Meeting is amending  FFC's
Articles  Supplementary  Establishing  and Fixing the Rights and  Preferences of
Auction Market  Preferred Stock (the "Articles  Supplementary")  as set forth in
the proposed  Articles of Amendment (the "Proposed  Amendment")  described below
and attached to this Joint Proxy Statement as Annex B.

         The Articles  Supplementary  establish  procedures for regular periodic
auctions for FFC's AMPS. The auctions  establish the dividend rate to be paid to
the  holders  of the  AMPS for the next  dividend  period  and are held by FFC's
auction  agent  at the  times  and  in  the  manner  provided  in  the  Articles
Supplementary.

         The Articles  Supplementary  currently  contain a provision (the "Force
Majeure  Provision")  which  provides  that,  if an auction  date for any series
("Series")  of AMPS is not a business  day because  the New York Stock  Exchange
("NYSE") is closed for business due to an act of God, natural disaster,  extreme
weather, act of war, civil or military disturbance, act of terrorism,  sabotage,
riots or a loss or malfunction of utilities or communications services (each, an
"Extraordinary  Event"),  or if the  auction  agent  is not able to  conduct  an
auction in  accordance  with the auction  procedures  for any such  reason,  the
dividend rate for the next dividend  period for that Series will be the dividend
rate determined on the previous auction date.

         The Proposed  Amendment would revise the Force Majeure Provision to (a)
modify how the dividend  rate to be paid to the holders of AMPS is determined by
creating a distinction  between situations where the NYSE is closed for (i) more
than three  calendar days or (ii) three or fewer  calendar days and (b) provides
that if an Extraordinary Event occurs with respect to a Series of AMPS, existing
holders of such Series will  continue to hold their AMPS until the next  auction
for that Series of AMPS is held. With regard to dividend payments that cannot be
effected due to NYSE closures for an Extraordinary Event, the Proposed Amendment
also creates a distinction  between  deferral of dividend payment dates for more
than three days and three or fewer days.

         The  purpose of the  Proposed  Amendment  is to revise and  clarify the
procedures for auctions and dividend payments for certain situations outside the
control of FFC that force the NYSE to close or prevent  the  auction  agent from
conducting an auction.

         DIVIDEND RATE PROVISION.  The revised Force Majeure Provision  provides
that if an auction  date is not a business  day  because  the NYSE is closed for
more than three consecutive  calendar days (excluding  Saturdays and Sundays and
previously  announced  NYSE  holidays),  or the auction agent cannot  conduct an
auction in accordance  with the auction  procedures  for such period,  due to an
Extraordinary  Event,  then the  dividend  rate to be paid to the holders of the
AMPS will be the dividend rate  determined  on the previous  auction date. If an
auction date is not a business day because the NYSE is closed for three or fewer
than three consecutive  calendar days, or if the auction agent cannot conduct an
auction in  accordance  with the  auction  procedures  for such period due to an
Extraordinary  Event,  then the  dividend  rate to be paid to the holders of the
AMPS will be the dividend rate  determined by auction on the first  business day
(i.e., the first day on which the NYSE is open) following such auction date.

         DIVIDEND PAYMENT PROVISION. The current provision applicable to payment
of a  dividend  where the NYSE is closed  due to an  Extraordinary  Event  would
similarly be modified to distinguish short-term from longer-term closings. Under
the Articles Supplementary currently, special provisions allow the deferral of a
dividend payment to the next business day on which FFC and the auction agent are
able to cause the dividend to be paid using  commercially  reasonable  available
means. The Proposed  Amendment  narrows the circumstances in which this deferral
would apply to where the NYSE is closed for more than three consecutive calendar
days due to an Extraordinary Event.

                                       10



         HOLD OVER PROVISION.  The proposed revised Force Majeure Provision also
provides that in the event an auction for a Series of AMPS cannot be held due to
an  Extraordinary  Event,  each  existing  holder  of such  Series  of AMPS will
continue  to hold all of his or her AMPS until the next  auction for such Series
of AMPS is held  (unless a holder sells his or her AMPS outside of an auction in
a  secondary  trading  market).  This means  that a holder  would,  under  these
circumstances,  be required to hold his or her AMPS for another  dividend period
(which would be seven days in the case of Series M7, T7, W7, TH7 and F7 AMPS and
28 days in the case of Series T28 and W28 AMPS).

         REASONS FOR THE PROPOSED AMENDMENT.  The Proposed Amendment is designed
to bring the Force Majeure  provisions  for FFC into line with those for FLC and
current  practices for newly issued preferred shares of closed-end  funds. It is
also designed to make clear,  rather than implicit,  that holders of a Series of
AMPS will be required to continue to hold their  shares of that Series  until an
auction is held following an Extraordinary  Event. Under the Proposed Amendment,
if a NYSE closing is of short duration,  a new auction will be held,  while only
under  longer-duration  closings (or a longer- duration inability of the auction
agent to conduct an auction)  will the  holders  maintain  the current  dividend
rate. As a result, AMPS holders may benefit.  Rather than receiving the existing
dividend rate for an additional  period in all  instances,  AMPS holders will be
entitled to the rate resulting from an auction when the NYSE is closed for three
days or less due to an  Extraordinary  Event.  The same holds true for  dividend
payment dates. If a NYSE closing is of short duration, the dividend payment date
would be the regular  dividend  payment date  determined in accordance  with the
Articles  Supplementary.  A dividend  payment date would be deferred to the next
business  day on which FFC and the auction  agent are able to cause the dividend
to  be  paid  using  commercially  reasonable  means  only  for  longer-duration
closings.

         At a meeting  held on January 21,  2004,  the Board of Directors of FFC
approved the Proposed Amendment,  subject to shareholder approval and subject to
receipt  of written  confirmation  by the rating  agencies  rating the AMPS,  as
discussed below. The Board considered a number of factors in its  deliberations,
including   that  the  effect  of  the   Proposed   Amendment  to  the  Articles
Supplementary is to ensure that, upon an Extraordinary  Event, FFC's auction for
its AMPS can be conducted pursuant to clear procedures set forth in its Articles
Supplementary;  that the  Proposed  Amendment  will  benefit AMPS holders in the
event of a NYSE closing of three days or less due to an  Extraordinary  Event by
allowing  their  dividend  rate to be  determined  at an auction in the ordinary
course;  and that the Proposed Amendment would bring the Force Majeure Provision
for FFC in line with that for FLC and current industry practice.  The Board also
considered  the  potential  benefit to the Common  Shareholders  of the Proposed
Amendment.  In particular,  they  considered  that the change could mitigate any
disruption  of the Fund's AMPS auction due to an  Extraordinary  Event,  thereby
preserving  any potential  benefit  derived from the Fund being  leveraged  with
AMPS.

REQUIRED VOTE

         Approval of the Articles of Amendment will require the affirmative vote
of a majority  of the  outstanding  shares of stock  entitled  to be cast by the
holders of FFC's Common Stock and AMPS,  voting together as a single class.  The
Proposed Amendment will not be implemented unless Moody's Investor Service, Inc.
("Moody's") and Fitch Ratings  ("Fitch"),  the ratings agencies currently rating
the AMPS,  confirm that the Proposed  Amendment  would not impair their  current
ratings on the AMPS  ("Aaa" and "AAA,"  respectively).  Conversations  have been
held with both  Moody's and Fitch and they have  indicated  preliminarily  their
willingness to confirm their ratings.

THE BOARD OF  DIRECTORS OF FFC UNANIMOUSLY RECOMMENDS THAT THE SHAREHOLDERS VOTE
"FOR" PROPOSAL NO. 2.

                       SUBMISSION OF SHAREHOLDER PROPOSALS

         All  proposals  by  shareholders  of each Fund that are  intended to be
presented at each Fund's next Annual Meeting of  Shareholders to be held in 2005
must be received by the relevant  Fund for  consideration  for  inclusion in the
relevant  Fund's proxy  statement  relating to the meeting no later than October
[--], 2004 and must satisfy the other requirements of federal securities laws.

         Each Fund's By-laws require  shareholders wishing to nominate Directors
or make  proposals to be voted on at the Fund's annual meeting to provide timely
notice of the proposal in writing. To be considered timely, any such notice must
be delivered to or mailed and received at the principal executive offices of the
Fund not later than 60 days prior to the date of the meeting;  provided however,
that if less than 70 days' notice or prior public  disclosure of the date of the
meeting is given or made to shareholders, any such notice by a shareholder to be
timely must be so received  not later than the close of business on the 10th day
following the day on which notice of the date of the annual meeting was given or
such public disclosure was made.

                                       11



         Any such  notice by a  shareholder  shall  set  forth  the  information
required  by the Fund's  By-laws  with  respect to each  matter the  shareholder
proposes to bring before the annual meeting.

                             ADDITIONAL INFORMATION

INDEPENDENT ACCOUNTANTS

         KPMG,  99 High  Street,  Boston,  Massachusetts  02110-2371,  has  been
selected to serve as each Fund's independent  accountants for each Fund's fiscal
year ending  November 30, 2004.  KPMG acted as the  independent  accountants for
each Fund for the fiscal  period from each  Fund's  commencement  of  operations
through  November  30, 2003.  The Funds know of no direct  financial or material
indirect  financial interest of KPMG in the Funds. A representative of KPMG will
not be present at the Meeting,  but will be available by telephone and will have
an opportunity to make a statement,  if asked,  and will be available to respond
to appropriate questions.

         Set forth in the table below are audit fees and non-audit  related fees
billed to each Fund by KPMG for professional  services  received for each Fund's
fiscal period ended November 30, 2003.



               FISCAL PERIOD ENDED               AUDIT-RELATED
FUND               NOVEMBER 30      AUDIT FEES*     FEES**      TAX FEES***  ALL OTHER FEES
----               -----------      -----------     ------      -----------  --------------

                                                                   
FFC                  2003            58,500          12,800        6,000          --

FLC                  2003            58,500           6,400        6,000          --


-------------------------
*    Includes  non-recurring fees billed to each Fund by KPMG in connection with
     the initial offering of Common Stock and AMPS of each Fund.
**   "Audit-Related  Fees"  are  those  fees  billed  to  each  Fund  by KPMG in
     connection  with  their  agreed-upon  procedures  reports  on  each  Fund's
     Articles Supplementary.  Such reports are required quarterly by Moody's and
     Fitch in connection with maintaining public ratings for each Fund's AMPS.
***  "Tax Fees" are those fees  billed to each Fund by KPMG in  connection  with
     tax  consulting  services,  including  primarily  the review of each Fund's
     income tax returns.



         Each Fund's Audit Committee  Charter  requires that the Audit Committee
pre-approve  all audit and non-audit  services to be provided by the auditors to
the Fund,  and all  non-audit  services to be  provided  by the  auditors to the
Fund's investment adviser  ("affiliates") and any service providers controlling,
controlled by or under common  control with the Funds'  investment  adviser that
provide  on-going  services to each Fund, if the engagement  relates directly to
the  operations and financial  reporting of each Fund, or to establish  detailed
pre-approval  policies  and  procedures  for such  services in  accordance  with
applicable laws. All of the audit, audit-related and tax services for which KPMG
billed each Fund fees for each Fund's fiscal period ended November 30, 2003 were
pre-approved by the Audit Committee.

         For each Fund's  fiscal  period ended  November 30, 2003,  KPMG did not
provide  any  non-audit  services  (or bill any fees for such  services)  to the
Funds' investment adviser or any affiliates thereof that provide services to the
Funds.

INVESTMENT ADVISER AND ADMINISTRATOR

         Flaherty & Crumrine  serves as the investment  adviser to each Fund and
its  business  address  is 301  E.  Colorado  Boulevard,  Suite  720,  Pasadena,
California  91101.  PFPC  Inc.  acts as the  administrator  to each  Fund and is
located at 4400 Computer Drive, Westborough, Massachusetts 01581.

                                       12


COMPLIANCE WITH THE SECURITIES EXCHANGE ACT OF 1934

         Section 16(a) of the 1934 Act and Section 30(h) of the 1940 Act require
each Fund's directors and officers,  certain persons  affiliated with Flaherty &
Crumrine and persons who beneficially own more than 10% of a registered class of
each Fund's  securities,  to file reports of ownership  and changes of ownership
with the SEC,  the New York  Stock  Exchange,  Inc.  and each  Fund.  Directors,
officers and  greater-than-10%  shareholders  are required by SEC regulations to
furnish  each Fund with  copies of such forms they file.  Based  solely upon its
review of the copies of such forms  received by it and  written  representations
from certain of such  persons,  each Fund  believes  that during 2003,  all such
filing requirements applicable to such persons were met, except that two filings
on behalf of Mr. Gale,  whose purchase of (i) 1,000 shares of FFC's Commom Stock
during the initial  offering of the Fund's  Common Stock on January 29, 2003 was
filed on October 6, 2003 and (ii) 1,000  shares of FLC's Common Stock during the
initial  offering  of the Fund's  Common  Stock on August 29,  2003 was filed on
January 30, 2004.

BROKER NON-VOTES AND ABSTENTIONS

         A  proxy  which  is  properly  executed  and  returned  accompanied  by
instructions to withhold authority to vote represents a broker "non-vote" (i.e.,
shares held by brokers or nominees  as to which (i)  instructions  have not been
received from the beneficial owners or the persons entitled to vote and (ii) the
broker or  nominee  does not have  discretionary  voting  power on a  particular
matter).  Proxies that reflect  abstentions  or broker  non-votes  (collectively
"abstentions")  will be counted as shares that are present and  entitled to vote
on the matter for  purposes  of  determining  the  presence  of a quorum.  Under
Maryland law,  abstentions  do not constitute a vote "for" or "against" a matter
and will be disregarded in determining the "votes cast" on an issue.

                    OTHER MATTERS TO COME BEFORE THE MEETING

         Each Fund does not intend to present any other business at the relevant
Meeting,  nor is either  Fund aware that any  shareholder  intends to do so. If,
however,  any other matters are properly brought before the Meeting, the persons
named in the  accompanying  form of proxy will vote thereon in  accordance  with
their judgment.

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

                                       13



                                     ANNEX A

                             AUDIT COMMITTEE CHARTER

         1. The Audit  Committee  (the  "Committee")  shall  consist of at least
three members and shall be composed  entirely of independent  directors  (within
the meaning of the  applicable  regulatory  requirements),  all of whom shall be
financially  literate and at least one of whom shall have  accounting or related
financial management expertise as determined by the Fund's Board in its business
judgment.  At least one member of the Committee may qualify and be designated an
"audit committee  financial  expert"  ("ACFE"),  within the meaning of the rules
adopted and implemented under Section 407 of the Sarbanes-Oxley Act of 2002.

         2. The purposes of the Committee are:

                  (a) to assist  Board  oversight  of (i) the  integrity  of the
Fund's financial  statements and the independent audit thereof;  (ii) the Fund's
accounting and financial reporting policies and practices, its internal controls
and, as appropriate,  the internal controls of certain service providers;  (iii)
the Fund's  compliance  with  legal and  regulatory  requirements;  and (iv) the
independent   auditor's  (the  "auditors")   qualifications,   independence  and
performance; and

                  (b) to  prepare  the report  required  to be  prepared  by the
Committee  pursuant to the rules of the Securities and Exchange  Commission (the
"SEC") for inclusion in the Fund's annual proxy statement.

         The auditors shall report directly to the Committee.

         The function of the  Committee is oversight.  The Fund's  management is
responsible for (i) the  preparation,  presentation  and integrity of the Fund's
financial  statements,  (ii)  the  maintenance  of  appropriate  accounting  and
financial  reporting  principles  and  policies  and  (iii) the  maintenance  of
internal  controls and procedures  designed to assure compliance with accounting
standards and applicable laws and regulations.  The auditors are responsible for
planning  and  carrying  out proper  audits and  reviews.  In  fulfilling  their
responsibilities  hereunder,  it is recognized that members of the Committee are
not  employees of the Fund and are not, and do not  represent  themselves to be,
accountants  or auditors by profession or experts in the fields of accounting or
auditing,  notwithstanding  the  possibility  that  one or more  members  may be
designated  an  ACFE.  As  such,  it is not the  duty or  responsibility  of the
Committee  or its members to conduct  "field work" or other types of auditing or
accounting reviews or procedures. Each member of the Committee shall be entitled
to rely on (i) the  integrity  of those  persons  and  organizations  within and
outside the Fund from which it receives information and (ii) the accuracy of the
financial  and  other  information,  including,  for  example,  the  information
contemplated  by paragraph  3(d),  provided to the Committee by such persons and
organizations  absent actual  knowledge to the contrary (which shall be promptly
reported  to the  Fund's  Board).  In  addition,  the  evaluation  of the Fund's
financial  statements by the Committee is not of the same scope as, and does not
involve the extent of detail as, audits performed by the auditors,  nor does the
Committee's  evaluation  substitute  for  the  responsibilities  of  the  Fund's
management  for  preparing,   or  the  auditors  for  auditing,   the  financial
statements. The designation of a person as an ACFE is not intended to impose any
greater  responsibility or liability on that person than the  responsibility and
liability  imposed  on such  person  as a member of the  Committee,  nor does it
decrease the duties and obligations of other Committee members or the Board.

         3. To carry out its purposes,  the  Committee  shall have the following
duties and powers:

                  (a) be directly responsible for the appointment, compensation,
retention and  oversight of the work of the Fund's  auditors or any other public
accounting firm engaged for the purposes of preparing or issuing an audit report
or performing  other audit,  review or attest  services for the Fund  (including
resolution of  disagreements  between  management  and the  independent  auditor
regarding  financial  reporting)  and, in  connection  therewith,  evaluate  the
independence of the auditors;

                  (b) to  pre-approve  all audit and  non-audit  services  to be
provided by the auditors to the Fund, and all non-audit  services to be provided
by the  auditors to the Fund's  investment  adviser  and any  service  providers
controlling,  controlled by or under common  control with the Fund's  investment
adviser that provide  ongoing  services to the Fund, if the  engagement  relates
directly to the operations and financial  reporting of the Fund, or to establish
detailed  pre-approval  policies and  procedures for such services in accordance
with applicable laws;

                  (c) to consider whether the provision by the Fund's auditor of
non-audit  services to its investment adviser or adviser affiliate that provides
ongoing  services to the Fund, which services were not pre-approved by the Audit
Committee, is compatible with maintaining the auditor's independence;

                                       A-1



                  (d) to  meet  with  the  Fund's  auditors,  including  private
meetings  as  necessary:  (i) to review  the  arrangements  for and scope of the
annual  audit and any  special  audits;  (ii) to review  the scope of  non-audit
services being provided; (iii) to discuss any matters of concern relating to the
Fund's  financial  statements,  including  any  adjustments  to such  statements
recommended by the auditors,  or other results of said audits;  (iv) to consider
the auditor's comments with respect to the Fund's financial policies, procedures
and internal  accounting  controls and management's  responses  thereto;  (v) to
obtain  annually in writing from the auditors their letter as to the adequacy of
such controls;  (vi) to review any difficulties the auditors  encountered in the
course of the audit, including any restrictions on their activities or access to
requested  information and any significant  disagreements  with management,  and
management's  response thereto;  (vii) to review the form of report the auditors
propose to render to the Board and shareholders; and (viii) to ensure receipt of
a formal  written  statement  from the auditors at least  annually  specifically
delineating all relationships  between the auditors and the Fund,  including any
relationships  or  services  that  may  impact  the  auditors'  objectivity  and
independence;

                  (e) at least  annually,  obtain  and  review  a report  by the
Fund's  independent  auditor  describing the auditor's  internal quality control
procedures;  any  material  issues  raised by the most recent  internal  quality
control review, or peer review, of the independent auditor, or by any inquiry or
investigation by governmental or professional authorities,  within the preceding
five  years,  respecting  one or  more  independent  audits  carried  out by the
independent  auditor,  and any steps taken to deal with any such issues; and for
the purpose of assessing the auditor's  independence,  all relationships between
the independent auditor and the Fund;

                  (f) to meet with the  Fund's  management  and,  in the case of
audited financial  statements,  the auditors:  (i) to discuss the annual audited
financial  statements  and  semi-annual  financial  statements and any quarterly
financial statements;  (ii) to discuss generally earnings press releases and any
financial  information  and  earnings  guidance  provided to analysts and rating
agencies,  if any (but the  Committee  need not discuss in advance each earnings
release or each instance in which the Fund may provide earnings guidance); (iii)
to review all critical  accounting policies and practices applied by the Fund in
preparing its financial  statements;  (iv) to review all alternative  treatments
within  generally  accepted  accounting  principles  for policies and  practices
related to material items that have been discussed with  management;  and (v) to
review other material written  communications  between the auditor and the Fund,
including any management letter,  report or recommendation on internal controls,
schedule of unadjusted differences, engagement letter and independence letter;

                  (g) to review  with the  Fund's  principal  executive  officer
and/or  principal  financial  officer in connection with their  certification of
Form N-CSR any  significant  deficiencies in the design or operation of internal
controls which could  adversely  affect the Fund's  ability to record,  process,
summarize  and report  financial  data or  material  weaknesses  therein and any
reported  evidence of fraud  involving  management of other employees who have a
significant role in the Fund's internal controls;

                  (h) to  consider  and  evaluate  the  effect  upon the Fund of
significant changes in accounting principles,  practices, controls or procedures
proposed or contemplated by management or the auditors;

                  (i) to discuss  guidelines and policies  governing the process
by which  management  of the Fund  manages the Fund's  exposure to risk,  and to
discuss the Fund's major  financial risk exposures and the steps  management has
taken to monitor and control such exposures;

                  (j) to establish  procedures  for the receipt,  retention  and
treatment of complaints  regarding  accounting,  internal accounting controls or
auditing matters, including procedures for the confidential anonymous submission
by  employees  of the  investment  adviser or any other  provider of  accounting
related  services,  as well as any employees of the Fund, of concerns  regarding
questionable accounting or auditing matters pertaining to the Fund;

                  (k) to  establish  hiring  policies  for  employees  or former
employees of the auditor consistent with government regulations;

                  (l) to review and evaluate the qualifications, performance and
independence of the lead partner of the auditors;

                  (m) to discuss  with  management  the timing and  process  for
implementing  the rotation of the lead audit partner and the reviewing  partner,
and to consider  whether  there  should be a regular  rotation of the audit firm
itself;

                                       A-2



                  (n)  to  cause  the   preparation   of  any  report  or  other
disclosures  required  by the New York  Stock  Exchange  or the  Securities  and
Exchange Commission; and

                  (o) to report its  activities  to the full Board on a periodic
basis and make such recommendations with respect to the matters within the scope
of its authority  and other  matters,  as the  Committee  may deem  necessary or
appropriate; and

                  (p) to prepare and review with the Board an annual performance
evaluation of the Committee,  which  evaluation shall compare the performance of
the Committee with the requirements of this Charter. The performance  evaluation
by the  Committee  shall be  conducted  in such  manner as the  Committee  deems
appropriate.  The report to the Board may take the form of an oral report by the
chairperson of the Committee or any other member of the Committee  designated by
the Committee to make this report.

         4. The Committee shall meet as frequently as necessary to carry out its
obligations and is empowered to hold special meetings as  circumstances  require
and shall periodically meet separately with management and with the auditors.  A
majority of the total  number of members of the  Committee  shall  constitute  a
quorum of the  Committee.  A majority  of the members of the  Committee  present
shall be  empowered  to act on  behalf of the  Committee.  The  Committee  shall
regularly meet (typically,  on the same day as regular Committee  meetings) with
the  Fund's  management  and with the  personnel  of the  Fund's  administrator.
Members of the Committee may participate in a meeting of the Committee in person
or by means of a conference call or similar communications equipment by means of
which all persons participating in the meeting can hear each other.

         5. The Committee may, in its  discretion,  delegate all or a portion of
its duties and responsibilities to a subcommittee of the Committee,  which shall
be comprised of at least one person.  Any actions of the  subcommittee  shall be
presented to the full Committee at the next meeting of the Committee.

         6. The Committee shall have the resources and authority  appropriate to
discharge its  responsibilities,  including the authority to retain, as it deems
necessary  to carry  out its  duties,  special  counsel  and  other  experts  or
consultants  at the  expense  of the Fund.  The Fund shall  provide  appropriate
funding for the Committee to discharge its  responsibilities,  including for the
payment of compensation to (a) any registered  public accounting firm engaged to
prepare  or issue an audit  report  or  perform  other  audit,  review or attest
services  for the Fund,  (b) any  advisers  employed  by the  Committee  and (c)
ordinary administrative expenses.

         7. The  Committee  shall  review the  adequacy of this Charter at least
annually  and  recommend  any  changes to the full  Board.  The Board also shall
review and approve this Charter at least annually.

         8. This Charter may be altered,  amended or repealed,  or a new Charter
may be adopted, by the Board by the affirmative vote of a majority of all of the
members of the Board, including a majority of the "non-interested" Board members
(within the meaning of the Investment Company Act of 1940, as amended).

         9. With respect to any  subsequent  changes to the  composition  of the
Committee,  and otherwise  approximately  once each year, the Fund shall provide
the New York Stock Exchange written confirmation regarding:

                  (a) any determination that the Fund's Board has made regarding
the  independence  of  directors  pursuant  to the  New  York  Stock  Exchange's
governance standards or applicable law;

                  (b) the financial literacy of the Committee members;

                  (c) the  determination  that  at  least  one of the  Committee
members has accounting or related financial management expertise; and

                  (d) the annual review and  reassessment of the adequacy of the
Charter.


         Amended and Re-Adopted:  January 21, 2004

                                       A-3



                                     ANNEX B

                            ARTICLES OF AMENDMENT OF

   FLAHERTY & CRUMRINE/CLAYMORE PREFERRED SECURITIES INCOME FUND INCORPORATED

                  Flaherty & Crumrine/Claymore  Preferred Securities Income Fund
Incorporated (the "Corporation"), a corporation organized and existing under and
by virtue of the Maryland General Corporation Law, hereby certifies that:

FIRST: Part II, Section 7 of the Articles Supplementary  Establishing and Fixing
the Rights and Preferences of Auction Market Preferred Stock of the Corporation,
as filed with the State  Department  of  Assessments  and  Taxation on April 20,
2003,  is hereby  amended as follows:  By deleting in its  entirety  the current
Section 7 of Part II and substituting therefore the following new Section 7:

"7.      FORCE MAJEURE.

               (a) Notwithstanding anything else set forth herein,

                     (i)   if an Auction  Date is not a Business Day because the
                           New York Stock  Exchange is closed for  business  for
                           more than three consecutive  calendar days (excluding
                           Saturdays  and Sundays and  previously  announced New
                           York Stock  Exchange  holidays) due to an act of God,
                           natural disaster,  extreme weather, act of war, civil
                           or military disturbance, act of terrorism,  sabotage,
                           riots  or a  loss  or  malfunction  of  utilities  or
                           communications  services,  or if the Auction Agent is
                           not able to conduct an Auction in accordance with the
                           Auction  Procedures  for any  such  reason,  then the
                           Applicable Rate for the next Dividend Period shall be
                           the  Applicable   Rate  determined  on  the  previous
                           Auction Date; and

                     (ii)  if an Auction  Date is not a Business Day because the
                           New York Stock  Exchange is closed for  business  for
                           three or fewer than three  consecutive  calendar days
                           (excluding   Saturdays  and  Sundays  and  previously
                           announced New York Stock Exchange holidays) due to an
                           act of God, natural disaster, extreme weather, act of
                           war, civil or military disturbance, act of terrorism,
                           sabotage, riots or a loss or malfunction of utilities
                           or communications  services,  or if the Auction Agent
                           is not able to conduct an Auction in accordance  with
                           the Auction Procedures for any such reason,  then the
                           Applicable Rate for the next Dividend Period shall be
                           the  Applicable  Rate  determined  by  auction on the
                           first Business Day following such Auction Date.

               (b) Notwithstanding anything else set forth herein, if a Dividend
                   Payment Date is not a Business Day because the New York Stock
                   Exchange  is  closed  for   business   for  more  than  three
                   consecutive  calendar  days  due to an act  of  God,  natural
                   disaster,  extreme  weather,  act of war,  civil or  military
                   disturbance,  act of terrorism,  sabotage, riots or a loss or
                   malfunction of utilities or  communications  services,  or if
                   the  dividend  payable  on such  date can not be paid for any
                   such reason, then:

                     (i)   The Dividend  Payment Date for the affected  Dividend
                           Period  shall be the next  Business  Day on which the
                           Fund and the  Auction  Agent  are  able to cause  the
                           dividend  to be paid  using  commercially  reasonable
                           best efforts;

                     (ii)  The affected  Dividend Period shall end on the day it
                           would have ended had such event not  occurred and the
                           Dividend  Payment  Date had  remained  the  scheduled
                           date; and

                     (iii) The next  Dividend  Period  will begin and end on the
                           dates on which it would have begun and ended had such
                           event not  occurred  and the  Dividend  Payment  Date
                           remained the scheduled date.

               (c) In the event that either provision (a) or (b) of this Section
                   7 is  applicable  for a  Series  of  Preferred  Shares,  each
                   Beneficial Owner or Existing  Holder,  as the case may be, of
                   such  Series  of  Preferred  Shares  shall  hold  all  of the
                   Preferred Shares of such Series held by such Beneficial Owner
                   or  Existing  Holder  until  the next  Auction  Date for such
                   Series of Preferred  Shares (unless the  Beneficial  Owner or
                   Existing  Holder,  as the  case  may be,  of such  Series  of
                   Preferred Shares sells his or her Preferred Shares outside of
                   an Auction in a secondary trading market)."

                                       B-1



                  SECOND:  The amendment to the Charter of the  Corporation  set
forth in Article  FIRST above was advised by the Board of Directors and approved
by the stockholders.

                  IN  WITNESS   WHEREOF,   the   undersigned   officers  of  the
Corporation have executed these Articles of Amendment and do hereby  acknowledge
that these  Articles of Amendment  are the act and deed of the  Corporation  and
that, to the best of their  knowledge,  information and belief,  the matters and
facts contained  herein with respect to  authorization  and approval are true in
all material respects, under penalties of perjury.



DATE: _______________, 2004                      ____________________________
                                                 Donald F. Crumrine
                                                 Chief Executive Officer

WITNESS:



--------------------------
R. Eric Chadwick
Secretary


                                       B-2




   FLAHERTY & CRUMRINE/CLAYMORE PREFERRED SECURITIES INCOME FUND INCORPORATED

                   PROXY SOLICITED BY THE BOARD OF DIRECTORS

The undersigned holder of shares of Common Stock of Flaherty & Crumrine/Claymore
Preferred Securities Income Fund Incorporated, a Maryland corporation (the
"Fund"), hereby appoints Donald F. Crumrine, Robert M. Ettinger and Teresa M. R.
Hamlin, attorneys and proxies for the undersigned, with full powers of
substitution and revocation, to represent the undersigned and to vote on behalf
of the undersigned all shares of Common Stock, which the undersigned is entitled
to vote at the Annual Meeting of Shareholders of the Fund to be held at the
offices of Willkie Farr & Gallagher LLP, 787 Seventh Avenue, 38th Floor, New
York, New York 10019 at 8:30 a.m., on April 23, 2004, and any adjournments
thereof. The undersigned hereby acknowledges receipt of the Notice of Annual
Meeting and Proxy Statement and hereby instructs said attorneys and proxies to
vote said shares as indicated hereon. In their discretion, the proxies are
authorized to vote upon such other business as may properly come before the
Meeting. A majority of the proxies present and acting at the Meeting in person
or by substitute (or, if only one shall be so present, then that one) shall have
and may exercise all of the power and authority of said proxies hereunder. The
undersigned hereby revokes any proxy previously given.

  -------------                                                  -------------
   SEE REVERSE     CONTINUED AND TO BE SIGNED ON REVERSE SIDE     SEE REVERSE
      SIDE                                                           SIDE
  -------------                                                  -------------



FLAHERTY & CRUMRINE/CLAYMORE
PREFERRED SECURITIES INCOME FUND
C/O PFPC, INC.
P.O. BOX 8586
EDISON, NJ 08818-8586


--- PLEASE MARK
|X| VOTES AS IN
--- THIS EXAMPLE.

THIS PROXY, IF PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED BY THE
UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR
THE ELECTION OF THE NOMINEES AS DIRECTORS AND FOR PROPOSAL 2.

PLEASE REFER TO THE PROXY STATEMENT FOR A DISCUSSION OF THE PROPOSAL.

1. ELECTION OF DIRECTORS. NOMINEES:
(01) Martin Brody, (02) Donald F. Crumrine, (03) David Gale and
(04) Robert F. Wulf

        FOR     ---     ---  WITHHELD
        ALL     | |     | |  FROM ALL
      NOMINEES  ---     ---  NOMINEES

---
| | --------------------------------------
--- For all nominees except as noted above

2. To approve an amendment to the Fund's Articles Supplementary Establishing and
Fixing the Rights and Preferences of Auction Market Preferred Stock.

                                 FOR    AGAINST  ABSTAIN
                                 ---      ---      ---
                                 | |      | |      | |
                                 ---      ---      ---

                            THE BOARD OF  DIRECTORS  RECOMMENDS  THAT THE
                            SHAREHOLDERS  VOTE "FOR" THE  ELECTION OF THE
                            NOMINEES AS DIRECTORS  AND "FOR" THE APPROVAL
                            OF  AN  AMENDMENT  TO  THE  FUND'S   ARTICLES
                            SUPPLEMENTARY  ESTABLISHING  AND  FIXING  THE
                            RIGHTS  AND  PREFERENCES  OF  AUCTION  MARKET
                            PREFERRED STOCK.

                                                                           ---
                            MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT  | |
                                                                           ---

                            PLEASE SIGN,  DATE AND RETURN PROMPTLY IN THE
                            ENCLOSED ENVELOPE

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

Signature:              Date:           Signature:              Date:
          -------------      ----------           -------------      -----------



   FLAHERTY & CRUMRINE/CLAYMORE PREFERRED SECURITIES INCOME FUND INCORPORATED

                   PROXY SOLICITED BY THE BOARD OF DIRECTORS

The undersigned holder of shares of Auction Market Preferred Stock ("AMPS") of
Flaherty & Crumrine/Claymore Preferred Securities Income Fund Incorporated, a
Maryland corporation (the "Fund"), hereby appoints Donald F. Crumrine, Robert M.
Ettinger and Teresa M. R. Hamlin, attorneys and proxies for the undersigned,
with full powers of substitution and revocation, to represent the undersigned
and to vote on behalf of the undersigned all shares of AMPS, which the
undersigned is entitled to vote at the Annual Meeting of Shareholders of the
Fund to be held at the offices of Willkie Farr & Gallagher LLP, 787 Seventh
Avenue, 38th Floor, New York, New York 10019 at 8:30 a.m., on April 23, 2004,
and any adjournments thereof. The undersigned hereby acknowledges receipt of the
Notice of Annual Meeting and Proxy Statement and hereby instructs said attorneys
and proxies to vote said shares as indicated hereon. In their discretion, the
proxies are authorized to vote upon such other business as may properly come
before the Meeting. A majority of the proxies present and acting at the Meeting
in person or by substitute (or, if only one shall be so present, then that one)
shall have and may exercise all of the power and authority of said proxies
hereunder. The undersigned hereby revokes any proxy previously given.

  -------------                                                  -------------
   SEE REVERSE     CONTINUED AND TO BE SIGNED ON REVERSE SIDE     SEE REVERSE
      SIDE                                                           SIDE
  -------------                                                  -------------



FLAHERTY & CRUMRINE/CLAYMORE
PREFERRED SECURITIES INCOME FUND
C/O PFPC, INC.
P.O. BOX 8586
EDISON, NJ 08818-8586


--- PLEASE MARK
|X| VOTES AS IN
--- THIS EXAMPLE.

THIS PROXY, IF PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED BY THE
UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR
THE ELECTION OF THE NOMINEES AS DIRECTORS AND FOR PROPOSAL 2.

PLEASE REFER TO THE PROXY STATEMENT FOR A DISCUSSION OF THE PROPOSAL.

1. ELECTION OF DIRECTORS. NOMINEES:
(01) Nicholas Dalmaso, (02) Morgan Gust

        FOR     ---     ---  WITHHELD
        ALL     | |     | |  FROM ALL
      NOMINEES  ---     ---  NOMINEES

---
| | --------------------------------------
--- For all nominees except as noted above

2. To approve an amendment to the Fund's Articles Supplementary Establishing and
Fixing the Rights and Preferences of Auction Market Preferred Stock.

                                 FOR    AGAINST  ABSTAIN
                                 ---      ---      ---
                                 | |      | |      | |
                                 ---      ---      ---

                            THE BOARD OF  DIRECTORS  RECOMMENDS  THAT THE
                            SHAREHOLDERS  VOTE "FOR" THE  ELECTION OF THE
                            NOMINEES AS DIRECTORS  AND "FOR" THE APPROVAL
                            OF  AN  AMENDMENT  TO  THE  FUND'S   ARTICLES
                            SUPPLEMENTARY  ESTABLISHING  AND  FIXING  THE
                            RIGHTS  AND  PREFERENCES  OF  AUCTION  MARKET
                            PREFERRED STOCK.

                                                                           ---
                            MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT  | |
                                                                           ---

                            PLEASE SIGN,  DATE AND RETURN PROMPTLY IN THE
                            ENCLOSED ENVELOPE

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

Signature:              Date:           Signature:              Date:
          -------------      ----------           -------------      -----------




                        IMPORTANT - IMPORTANT - IMPORTANT


WE NEED THE SUPPORT OF FFC SHAREHOLDERS IN APPROVING PROPOSAL 2:

o        THE FUND HAS  OUTSTANDING  SEVERAL SERIES OF AUCTION  MARKET  PREFERRED
         SECURITIES (AMPS), EACH OF WHICH HOLDS REGULAR AUCTIONS.

o        CURRENTLY, AN EXTRAORDINARY EVENT, SUCH AS OCCURRED ON 9/11/2001, COULD
         DISRUPT ONE OR MORE OF THESE  AUCTIONS AND POSSIBLY  RESULT IN THE FUND
         REDEEMING SHARES OF AMPS.

o        COMMON  STOCKHOLDERS  COULD  EXPERIENCE  AN INCREASE IN THE COST OF THE
         FUND'S LEVERAGE IF AUCTIONS WERE DISRUPTED BY AN  EXTRAORDINARY  EVENT.
         IN  ADDITION,  REDEMPTION  OF AMPS COULD  RESULT IN A REDUCTION  IN THE
         FUND'S DIVIDEND RATE.

o        AMPS HOLDERS COULD LOSE THEIR OPPORTUNITY TO INVEST IN FFC.

o        PROPOSAL 2 MODIFIES  PROCEDURES IN CASE OF AN  EXTRAORDINARY  EVENT, AS
         DESCRIBED IN THE ACCOMPANYING JOINT PROXY STATEMENT.

o        YOUR BOARD OF DIRECTORS  UNANIMOUSLY  RECOMMENDS THAT FFC  SHAREHOLDERS
         APPROVE  PROPOSAL 2 TO AVOID THE  POSSIBILITY  OF ADVERSE  CONSEQUENCES
         FROM AN EXTRAORDINARY EVENT.