FLC Flaherty and Crumrine Total Return Fund Inc

FLAHERTY & CRUMRINE/CLAYMORE TOTAL RETURN FUND

To the Shareholders of Flaherty & Crumrine/Claymore Total Return Fund:

The new fiscal year began much like the previous year ended. For the three month period ended February 28, 2010, total return (principal change and income) on net asset value of the Fund was +10.9%. Over the same period, total return on market price of Fund shares was +23.6%.

The strong performance came as credit markets continued to recover from the depths of the financial crisis last year. Economists and investors have expressed confidence that our financial system is back on track, and, although problems persist, seeds of recovery are in place. We share this view and encourage you to visit www.fcclaymore.com to read our Quarterly Economic Update.

Over the past several quarters, the focus of these letters has been the financial crisis and its impact on the Fund's investment portfolio. We experienced gut-wrenching market weakness starting in the second half of 2008 and continuing into early 2009, only to watch prices rebound dramatically in the months since. Never before have we seen such extreme volatility over a relatively short time frame. We expect smoother waters ahead, but, as always, the future will be filled with challenges and opportunities.

We will take advantage of this relative calm to review the market for preferred securities a bit more broadly than our typical quarterly letter. After turbulence, the time seems right to take a step back and regain some perspective on the market. Readers can compare these broad market comments to the Fund's investments summarized on the following pages.

As of February 28, 2010, the market for preferred securities has grown to $378 billion(1) from $231 billion in 2005. The issues that comprise the market are far from homogeneous. An issuer is now able to tailor a preferred security to its specific financing needs by choosing from a wide range of features. Because of the variety of terms preferreds have, it has become easier to define a preferred by what it is not--a preferred security is not senior debt and it is not common stock.

Fifteen percent of the market is "traditional" preferred, i.e. the distributions to investors are DIVIDENDS, and paid from after-tax income of the issuer. These distributions may have after-tax benefits to investors. 85% is "taxable" preferred that pay INTEREST(2); these payments are treated as interest expense for issuers and ordinary income for investors.

Many features of preferred securities are especially beneficial to companies in highly-regulated industries. Preferred issues from utilities, banks and insurance companies comprise over 80% of the preferred market. Of course, as the experience of the past couple of years serves to remind us, regulators can contribute to problems at the companies they regulate. Nonetheless, regulators recognize the critical role of the preferred market, and have helped facilitate growth in the asset class.

Despite a rash of downgrades during the financial crisis, the market is still comprised of mostly investment-grade issues. 64% of preferred issues are rated Baa or higher. A substantially larger portion of the preferred universe is comprised of issuers with SENIOR DEBT rated investment grade. For this reason, preferred securities are widely considered to be the highest yielding asset class of investment grade companies.

(2) We include preferred securities issued in the United States by foreign domiciled entities in the "taxable" category; many of these issues make distributions considered to be dividends for some types of investors.

A word about credit analysis is in order. We have always based investment decisions on our internal credit research, and try to own credits that we believe are investment grade quality. Of course, credit analysis is more art than science, and no one does it perfectly, but we think our team does an outstanding job.

Our focus is first and foremost on preferred securities. The objective of our credit analysis is to develop an in-depth opinion about the quality of each security in the Fund. This approach differs from the rating agencies, where the focus is primarily on the quality of an issuer's most senior debt. Once the senior debt rating is determined, a mechanical "notching" methodology is applied to rate subordinated classes of securities, such as the issuer's preferreds (rating agency methodology brings to mind the Bismarck quote, "laws are like sausages, it is better not to see them being made").

Much has been made recently about potential conflicts at the public rating agencies. Whether the conflicts are real or perceived, the business model of the agencies is likely to change. Regardless of how one views the public rating agencies, we don't face those conflicts and care only about choosing the right investments for the Fund. We pay close attention to the public ratings, but our investment decisions are only made after we do our own homework.

One additional question that should be on the minds of shareholders: can the Fund continue to produce double-digit quarterly returns? The answer shouldn't be surprising--it's not likely. By a variety of measures, in our view, the preferred market remains attractive relative to other asset classes. But the disparity is not as glaring as it was last spring and, in fact, is now approaching a range we consider normal.

Of course, preferred security prices never experienced anything like the volatility they experienced during the recent financial crisis. Historically, investors have (quite properly) owned these securities for the income they produce; only recently have they attracted the attention of those more inclined toward casinos. Now that the economy is beginning to stabilize, the wrath of recent markets seems to have instilled a new sense of discipline and propriety on companies that lost their way. Nonetheless, we will continue to keep a close eye on how those companies adapt to this new environment.

More information is always available on the Fund's website at www.fcclaymore.com.

Sincerely,

/s/ Donald F. Crumrine /s/ Robert M. Ettinger

Donald F. Crumrine Robert M. Ettinger
Chairman of the Board President
April 21, 2010

Flaherty & Crumrine/Claymore Total Return Fund Incorporated
PORTFOLIO OVERVIEW
FEBRUARY 28, 2010 (UNAUDITED)

FUND STATISTICS
---------------
Net Asset Value $ 15.58
Market Price $ 15.82
Premium 1.54
Yield on Market Price 8.80%
Common Stock Shares
 Outstanding 9,776,333

MOODY'S RATINGS % OF NET ASSETS+
----------------------- ----------------
A 10.4%
BBB 61.4%
BB 22.4%
Below "BB" 2.0%
Not Rated 1.2%
 ----
Below Investment Grade* 17.5%

* BELOW INVESTMENT GRADE BY BOTH MOODY'S AND S&P.

(PIE CHART)

INDUSTRY CATEGORIES % OF NET ASSETS+
------------------- ----------------
Other 5%
Banking 38%
Utilities 26%
Insurance 25%
Energy 5%
Financial Services 1%

TOP 10 HOLDINGS BY ISSUER % OF NET ASSETS+
------------------------- ----------------
Liberty Mutual Group 5.7%
Banco Santander 5.4%
Capital One Financial 4.6%
Comerica 3.6%
Dominion Resources 3.5%
PNC Financial Services 3.5%
Metlife 3.4%
Unum Group 2.9%
Sovereign Bancorp 2.6%
Axis Capital 2.5%

 % OF NET ASSETS**+
 ------------------
Holdings Generating Qualified Dividend
 Income (QDI) for Individuals 25%
Holdings Generating Income Eligible
 for the Corporate Dividend Received
 Deduction (DRD) 15%

** THIS DOES NOT REFLECT YEAR-END RESULTS OR ACTUAL TAX CATEGORIZATION OF FUND
DISTRIBUTIONS. THESE PERCENTAGES CAN, AND DO, CHANGE, PERHAPS SIGNIFICANTLY, DEPENDING ON MARKET CONDITIONS. INVESTORS SHOULD CONSULT THEIR TAX ADVISOR REGARDING THEIR PERSONAL SITUATION.

+ NET ASSETS INCLUDES ASSETS ATTRIBUTABLE TO THE USE OF LEVERAGE.

Flaherty & Crumrine/Claymore Total Return Fund Incorporated
PORTFOLIO OF INVESTMENTS
FEBRUARY 28, 2010 (UNAUDITED)

SHARES/$ PAR VALUE
------------ ------------
PREFERRED SECURITIES -- 91.3%
 BANKING -- 37.8%
$ 4,850,000 Astoria Capital Trust I, 9.75% 11/01/29, Series B ............................... $ 5,046,866(1)
 444,755 Banco Santander, 10.50% Pfd., Series 10 ......................................... 12,249,664**(1)(2)
 Barclays Bank PLC:
$ 4,100,000 6.278% ....................................................................... 3,136,500**(1)(2)
 65,000 6.625% Pfd., Series 2 ........................................................ 1,403,350**(1)(2)
 40,000 8.125% Pfd., Series 5 ........................................................ 1,004,000**(2)
 10,000 BB&T Capital Trust V, 8.95% Pfd. ................................................ 276,725
 125,000 BB&T Capital Trust VI, 9.60% Pfd. ............................................... 3,562,500(1)
 40,000 BB&T Capital Trust VII, 8.10% Pfd. .............................................. 1,044,000(1)
$ 7,590,000 Capital One Capital III, 7.686% 08/15/36 ........................................ 7,142,190(1)
$ 1,000,000 Capital One Capital V, 10.25% 08/15/39 .......................................... 1,137,129(1)
$ 2,000,000 Capital One Capital VI, 8.875% 05/15/40 ......................................... 2,136,832
$10,000,000 Colonial BancGroup, 7.114%, 144A**** ............................................ 30,000++
$ 9,670,000 Comerica Capital Trust II, 6.576% 02/20/37 ...................................... 8,098,625(1)
 7,000 FBOP Corporation, Adj. Rate Pfd., 144A**** ...................................... 48,020*++
$ 1,200,000 Fifth Third Capital Trust IV, 6.50% 04/15/37 .................................... 966,000
 2,000 First Republic Preferred Capital Corporation, 10.50% Pfd., 144A**** ............. 1,860,000(1)
 3,000 First Tennessee Bank, Adj. Rate Pfd., 144A**** .................................. 1,709,063*
$ 500,000 First Tennessee Capital I, 8.07% 01/06/27, Series A ............................. 444,062(1)
$ 600,000 First Union Capital II, 7.95% 11/15/29 .......................................... 617,132(1)
 2 FT Real Estate Securities Company, 9.50% Pfd., 144A**** ......................... 1,505,000
 Goldman Sachs:
$ 5,200,000 Capital II, 5.793% ........................................................... 4,173,000(1)
 1,500 STRIPES Custodial Receipts, Pvt. ............................................. 915,000*
$ 1,000,000 HSBC USA Capital Trust II, 8.38% 05/15/27, 144A**** ............................. 957,463(1)
 136,000 HSBC USA, Inc., Adj. Rate Pfd., Series D ........................................ 3,169,140*(1)
$ 1,200,000 JPMorgan Chase Capital XXVII, 7.00% 11/01/39, Series AA ......................... 1,223,328
 19,000 JPMorgan Chase Capital XXVIII, 7.20% Pfd. 12/22/39 .............................. 500,532
 48,600 Keycorp Capital X, 8.00% Pfd. ................................................... 1,214,514(1)
$ 1,000,000 Lloyds Banking Group PLC, 6.657%, 144A**** ...................................... 535,000**(2)+
 25,000 Morgan Stanley Capital Trust VIII, 6.45% Pfd. 04/15/67 .......................... 546,750
$ 2,500,000 National City Preferred Capital Trust I, 12.00% ................................. 2,853,725(1)
 151,059 PFGI Capital Corporation, 7.75% Pfd. ............................................ 3,455,475(1)
 54,995 PNC Financial Services, 9.875% Pfd., Series F ................................... 1,612,041*(1)
 98,800 Sovereign Capital Trust V, 7.75% Pfd. 05/22/36 .................................. 2,411,955(1)
 3,000 Sovereign REIT, 12.00% Pfd., Series A, 144A**** ................................. 3,427,500
$ 1,500,000 Wachovia Capital Trust III, 5.80% ............................................... 1,222,500(1)
 75,637 Wachovia Preferred Funding, 7.25% Pfd., Series A ................................ 1,740,596

Flaherty & Crumrine/Claymore Total Return Fund Incorporated
PORTFOLIO OF INVESTMENTS (CONTINUED)
FEBRUARY 28, 2010 (UNAUDITED)

SHARES/$ PAR VALUE
------------ ------------
PREFERRED SECURITIES -- (CONTINUED)
 BANKING -- (CONTINUED)
$ 2,800,000 Webster Capital Trust IV, 7.65% 06/15/37 ........................................ $ 1,820,000
$ 1,000,000 Wells Fargo Capital XV, 9.75% ................................................... 1,090,700
 ------------
 86,286,877
 ------------
 FINANCIAL SERVICES -- 0.6%
$ 250,000 Ameriprise Financial, Inc., 7.518% 06/01/66 ..................................... 234,375
$ 3,000,000 Gulf Stream-Compass 2005 Composite Notes, 144A**** .............................. 1,147,890
 Lehman Brothers Holdings, Inc.:
 20,000 5.67% Pfd., Series D ......................................................... 9,500*++
 85,000 7.95% Pfd. ................................................................... 11,645*++
 ------------
 1,403,410
 ------------
 INSURANCE -- 20.3%
$ 1,550,000 Ace Capital Trust II, 9.70% 04/01/30 ............................................ 1,801,680(1)(2)
$ 1,661,000 AON Corporation, 8.205% 01/01/27 ................................................ 1,760,328(1)
 Arch Capital Group Ltd.:
 25,750 7.875% Pfd., Series B ........................................................ 645,359**(1)(2)
 36,300 8.00% Pfd., Series A ......................................................... 918,844**(1)(2)
$ 1,550,000 AXA SA, 6.463%, 144A**** ........................................................ 1,236,125**(1)(2)
 66,600 Axis Capital Holdings, 7.50% Pfd., Series B ..................................... 5,702,625(1)(2)
 160,000 Delphi Financial Group, 7.376% Pfd. 05/15/37 .................................... 3,210,000(1)
$ 5,645,000 Everest Re Holdings, 6.60% 05/15/37 ............................................. 4,544,225(1)
 Liberty Mutual Group:
$ 2,500,000 7.80% 03/15/37, 144A**** ..................................................... 2,162,500(1)
$ 7,300,000 10.75% 06/15/58, 144A**** .................................................... 7,957,000
$ 4,750,000 MetLife Capital Trust X, 9.25% 04/08/38, 144A**** ............................... 5,320,000(1)
 101,000 MetLife, Inc., 6.50% Pfd., Series B ............................................. 2,495,963*(1)
 125,000 Principal Financial Group, 6.518% Pfd., Series B ................................ 2,826,563*
 109,000 Scottish Re Group Ltd., 7.25% Pfd. .............................................. 639,013**(2)+
$ 3,615,000 USF&G Capital, 8.312% 07/01/46, 144A**** ........................................ 3,744,966(1)
$ 1,800,000 XL Capital Ltd., 6.50%, Series E ................................................ 1,428,840(2)
 ------------
 46,394,031
 ------------
 UTILITIES -- 26.2%
 33,700 Baltimore Gas & Electric Company, 6.70% Pfd., Series 1993 ....................... 3,295,230*(1)
 105,000 Calenergy Capital Trust III, 6.50% Pfd. 09/01/27 ................................ 4,803,750(1)
$ 3,700,000 COMED Financing III, 6.35% 03/15/33 ............................................. 3,027,199(1)
 66,170 Constellation Energy Group, Inc., 8.625% Pfd. 06/15/63, Series A ................ 1,727,037(1)

Flaherty & Crumrine/Claymore Total Return Fund Incorporated
PORTFOLIO OF INVESTMENTS (CONTINUED)
FEBRUARY 28, 2010 (UNAUDITED)

SHARES/$ PAR VALUE
------------ ------------
PREFERRED SECURITIES -- (CONTINUED)
 UTILITIES -- (CONTINUED)
$ 2,500,000 Dominion Resources Capital Trust I, 7.83% 12/01/27 .............................. $ 2,588,492(1)
 Dominion Resources, Inc.:
$ 3,500,000 7.50% ........................................................................ 3,469,329(1)
 66,000 8.375% Pfd., Series A ........................................................ 1,877,700(1)
 83,000 Entergy Arkansas, Inc., 6.45% Pfd. .............................................. 1,849,348*(1)
 50,000 Entergy Louisiana, Inc., 6.95% Pfd. ............................................. 4,689,065*(1)
 39,623 FPC Capital I, 7.10% Pfd., Series A ............................................. 1,012,070(1)
 FPL Group Capital, Inc.:
$ 2,500,000 6.65% 06/15/67 ............................................................... 2,328,265(1)
$ 1,000,000 7.30% 09/01/67, Series D ..................................................... 993,912
 55,000 Georgia Power Company, 6.50% Pfd., Series 2007A ................................. 5,565,313*(1)
 30,445 Indianapolis Power & Light Company, 5.65% Pfd. .................................. 2,640,154*(1)
$ 5,000,000 PECO Energy Capital Trust IV, 5.75% 06/15/33 .................................... 4,040,460(1)
$ 6,000,000 Puget Sound Energy, Inc., 6.974% 06/01/67 ....................................... 5,346,888(1)
 15,000 Southern California Edison, 6.00% Pfd., Series C ................................ 1,366,875*(1)
$ 4,850,000 Southern Union Company, 7.20% 11/01/66 .......................................... 4,377,125(1)
 5,000 Union Electric Company, $7.64 Pfd. .............................................. 500,938*
$ 4,605,000 Wisconsin Energy Corporation, 6.25% 05/15/67 .................................... 4,254,127(1)
 ------------
 59,753,277
 ------------
 ENERGY -- 4.7%
$ 5,600,000 Enbridge Energy Partners LP, 8.05% 10/01/37 ..................................... 5,537,829(1)
 Enterprise Products Partners:
$ 650,000 7.00% 06/01/67 ............................................................... 590,139
$ 500,000 7.034% 01/15/68 .............................................................. 474,449(1)
$ 4,000,000 8.375% 08/01/66, Series A .................................................... 4,049,960
 ------------
 10,652,377
 ------------
 MISCELLANEOUS INDUSTRIES -- 1.7%
 40,000 Ocean Spray Cranberries, Inc., 6.25% Pfd., 144A**** ............................. 2,903,752*(1)
$ 1,000,000 Stanley Works, 5.902% 12/01/45 .................................................. 919,167(1)
 ------------
 3,822,919
 ------------
 TOTAL PREFERRED SECURITIES
 (Cost $218,110,956) .......................................................... 208,312,891
 ------------

Flaherty & Crumrine/Claymore Total Return Fund Incorporated
PORTFOLIO OF INVESTMENTS (CONTINUED)
FEBRUARY 28, 2010 (UNAUDITED)

SHARES/$ PAR VALUE
------------ ------------
CORPORATE DEBT SECURITIES -- 6.1%
 FINANCIAL SERVICES -- 0.4%
 15,000 Ameriprise Financial, Inc., 7.75% 06/15/39 ...................................... $ 388,838
$ 4,726,012 Lehman Brothers, Guaranteed Note, Variable Rate, 12/16/16, 144A**** ............. 581,299++
 ------------
 970,137
 ------------
 INSURANCE -- 4.2%
$ 3,400,000 Liberty Mutual Insurance, 7.697% 10/15/97, 144A**** ............................. 2,988,848(1)
$ 7,000,000 UnumProvident Corporation, 7.25% 03/15/28, Senior Notes ......................... 6,659,457(1)
 ------------
 9,648,305
 ------------
 MISCELLANEOUS INDUSTRIES -- 1.2%
 16,500 Corp-Backed Trust Certificates, 7.00% 11/15/28, Series Sprint ................... 317,625(1)
 Pulte Homes, Inc.:
 25,844 7.375% 06/01/46 .............................................................. 532,968
$ 2,160,000 7.875% 06/15/32 .............................................................. 1,971,000(1)
 ------------
 2,821,593
 ------------
 REAL ESTATE INVESTMENT TRUST (REIT) -- 0.3%
$ 500,000 Duke Realty LP, 8.25% 08/15/19 .................................................. 549,348
 ------------
 549,348
 ------------
 TOTAL CORPORATE DEBT SECURITIES
 (Cost $18,646,426) ........................................................... 13,989,383
 ------------
COMMON STOCK -- 0.2%
 BANKING -- 0.2%
 13,500 CIT Group, Inc. ................................................................. 491,805*+
 ------------
 TOTAL COMMON STOCK
 (Cost $2,533,093) ............................................................ 491,805
 ------------
MONEY MARKET FUND -- 2.6%
 5,780,173 BlackRock Provident Institutional, T-Fund ....................................... 5,780,173
 ------------
 TOTAL MONEY MARKET FUND
 (Cost $5,780,173) ............................................................ 5,780,173
 ------------

Flaherty & Crumrine/Claymore Total Return Fund Incorporated
PORTFOLIO OF INVESTMENTS (CONTINUED)
FEBRUARY 28, 2010 (UNAUDITED)

 VALUE
 ------------
TOTAL INVESTMENTS (Cost $245,070,648***) ............................................ 100.2% $228,574,252
OTHER ASSETS AND LIABILITIES (Net) .................................................. (0.2)% (485,305)
 ----- ------------
NET ASSETS BEFORE LOAN .............................................................. 100.0%+++ $228,088,947
 ----- ------------
LOAN PRINCIPAL BALANCE ......................................................................... (75,800,000)
 ------------
TOTAL NET ASSETS AVAILABLE TO COMMON STOCK ..................................................... $152,288,947
 ============

** Securities distributing Qualified Dividend Income only.

*** Aggregate cost of securities held.

**** Securities exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration to qualified institutional buyers. At February 28, 2010, these securities amounted to $38,114,426 or 16.7% of net assets before the loan. These securities have been determined to be liquid under the guidelines established by the Board of Directors.

(1) All or a portion of this security is pledged as collateral for the Fund's loan. The total value of such securities was $164,291,851 at February 28, 2010.

(2) Foreign Issuer.

+ Non-income producing.

++ The issuer has filed for bankruptcy protection. As a result, the Fund may not be able to recover the principal invested and also does not expect to receive income on this security going forward.

+++ The percentage shown for each investment category is the total value of that category as a percentage of total net assets before the loan.

ABBREVIATIONS:

PFD. -- Preferred Securities
PVT. -- Private Placement Securities
REIT -- Real Estate Investment Trust
STRIPES -- Structured Residual Interest Preferred Enhanced Securities

Flaherty & Crumrine/Claymore Total Return Fund Incorporated
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE TO COMMON STOCK(1)
FOR THE PERIOD FROM DECEMBER 1, 2009 THROUGH FEBRUARY 28, 2010 (UNAUDITED)

 VALUE
 -----------
OPERATIONS:
 Net investment income ....................................................... $ 3,611,532
 Net realized gain/(loss) on investments sold during the period .............. (838,403)
 Change in net unrealized appreciation/depreciation of investments ........... 12,328,577
 ------------
 NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ........................ 15,101,706
DISTRIBUTIONS:
 Dividends paid from net investment income to Common Stock Shareholders(2) ... (3,402,164)
 ------------
 TOTAL DISTRIBUTIONS TO COMMON STOCK SHAREHOLDERS ............................ (3,402,164)
 ------------
NET INCREASE IN NET ASSETS AVAILABLE TO COMMON STOCK FOR THE PERIOD ............ $ 11,699,542
 ============
NET ASSETS AVAILABLE TO COMMON STOCK:
 Beginning of period ......................................................... $140,589,405
 Net increase in net assets during the period ................................ 11,699,542
 ------------
 End of period ............................................................... $152,288,947
 ============

(2) May include income earned, but not paid out, in prior fiscal year.

Flaherty & Crumrine/Claymore Total Return Fund Incorporated
FINANCIAL HIGHLIGHTS(1)
FOR THE PERIOD FROM DECEMBER 1, 2009 THROUGH FEBRUARY 28, 2010 (UNAUDITED) FOR A COMMON STOCK SHARE OUTSTANDING THROUGHOUT THE PERIOD.

PER SHARE OPERATING PERFORMANCE:
 Net asset value, beginning of period ........................................ $ 14.38
 ----------
INVESTMENT OPERATIONS:
 Net investment income ....................................................... 0.37
 Net realized and unrealized gain/(loss) on investments. ..................... 1.18
 ----------
 Total from investment operations ............................................ 1.55
 ----------
DISTRIBUTIONS TO COMMON STOCK SHAREHOLDERS:
 From net investment income .................................................. (0.35)
 ----------
 Total distributions to Common Stock Shareholders ............................ (0.35)
 ----------
 Net asset value, end of period .............................................. $ 15.58
 ==========
 Market value, end of period ................................................. $ 15.82
 ==========
 Common Stock shares outstanding, end of period .............................. 9,776,333
 ==========
RATIOS TO AVERAGE NET ASSETS AVAILABLE TO COMMON STOCK SHAREHOLDERS:
 Net investment income+ ...................................................... 9.88%*
 Operating expenses including interest expense ............................... 2.12%*
 Operating expenses excluding interest expense ............................... 1.46%*
SUPPLEMENTAL DATA:++
 Portfolio turnover rate ..................................................... 4%**
 Net assets before loan, end of period (in 000's) ............................ $ 228,089
 Ratio of operating expenses including interest expense to
 net assets before loan ................................................... 1.43%*
 Ratio of operating expenses excluding interest expense to
 net assets before loan ................................................... 0.98%*

* Annualized.

** Not annualized.

+ The net investment income ratios reflect income net of operating expenses, including interest expense.

++ Information presented under heading Supplemental Data includes loan principal balance.

Flaherty & Crumrine/Claymore Total Return Fund Incorporated
FINANCIAL HIGHLIGHTS (CONTINUED)
PER SHARE OF COMMON STOCK (UNAUDITED)

 TOTAL DIVIDEND
 DIVIDENDS NET ASSET NYSE REINVESTMENT
 PAID VALUE CLOSING PRICE PRICE(1)
 --------- --------- ------------- ------------
December 31, 2009 ................ $0.1160 $14.97 $14.52 $14.64
January 29, 2010 ................. 0.1160 15.52 14.87 14.98
February 26, 2010 ................ 0.1160 15.58 15.82 15.58

Flaherty & Crumrine/Claymore Total Return Fund Incorporated
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

1. AGGREGATE INFORMATION FOR FEDERAL INCOME TAX PURPOSES

At February 28, 2010 the aggregate cost of securities for federal income tax purposes was $245,629,787, the aggregate gross unrealized appreciation for all securities in which there is an excess of value over tax cost was $20,349,413 and the aggregate gross unrealized depreciation for all securities in which there is an excess of tax cost over value was $37,404,948.

2. ADDITIONAL ACCOUNTING STANDARDS

FAIR VALUE MEASUREMENT: The inputs and valuation techniques used to measure fair value of the Fund's investments are summarized into three levels as described in the hierarchy below:

- Level 1 - quoted prices in active markets for identical securities

- Level 2 - other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)

- Level 3 - significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments)

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. A summary of the inputs used to value the Fund's investments as of February 28, 2010 is as follows:

 LEVEL 2 LEVEL 3
 TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
 VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
 FEBRUARY 28, 2010 PRICE INPUTS INPUTS
 ----------------- ------------ ------------ ------------
Preferred Securities
 Banking $ 86,286,877 $ 50,311,446 $ 35,927,411 $ 48,020
 Financial Services 1,403,410 -- 255,520 1,147,890
 Insurance 46,394,031 17,816,070 28,577,961 --
 Utilities 59,753,277 8,086,136 51,667,141 --
 Energy 10,652,377 -- 10,652,377 --
 Miscellaneous Industries 3,822,919 -- 3,822,919 --
Corporate Debt Securities 13,989,383 1,239,431 12,168,653 581,299
Common Stock
 Banking 491,805 491,805 -- --
Money Market Fund 5,780,173 5,780,173 -- --
 ------------ ------------ ------------ -----------
Total Investments $228,574,252 $ 83,725,061 $143,071,982 $ 1,777,209
 ============ ============ ============ ===========

Flaherty & Crumrine/Claymore Total Return Fund Incorporated
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

The following is a reconciliation of Level 3 investments for which significant unobservable inputs were used to determine fair value:

 PREFERRED SECURITIES
 ---------------------
 FINANCIAL CORPORATE DEBT
 TOTAL INVESTMENTS BANKING SERVICES SECURITIES
 ----------------- ------- ---------- --------------
BALANCE AS OF 11/30/09 $1,237,309 $38,500 $ 703,050 $495,759
Accrued discounts/premiums -- -- -- --
Realized gain/(loss) -- -- -- --
Change in unrealized appreciation/
 (depreciation) 539,900 9,520 444,840 85,540
Net purchases/(sales) -- -- -- --
Transfers in and/or out of Level 3 -- -- -- --
 ---------- ------- ---------- --------
BALANCE AS OF 2/28/10 $1,777,209 $48,020 $1,147,890 $581,299

For the period ended February 28, 2010, total change in unrealized gain/(loss) on Level 3 securities still held at period end and included in the change in net assets was $539,900.

[This page intentionally left blank]

[This page intentionally left blank]

DIRECTORS

Donald F. Crumrine, CFA
Chairman of the Board
David Gale
Morgan Gust
Karen H. Hogan
Robert F. Wulf, CFA

OFFICERS

Donald F. Crumrine, CFA
Chief Executive Officer
Robert M. Ettinger, CFA
President
R. Eric Chadwick, CFA
Chief Financial Officer,
Vice President and Treasurer
Chad C. Conwell
Chief Compliance Officer,
Vice President and Secretary
Bradford S. Stone
Vice President and
Assistant Treasurer
Laurie C. Lodolo
Assistant Compliance Officer,
Assistant Treasurer and
Assistant Secretary

INVESTMENT ADVISER

Flaherty & Crumrine Incorporated
e-mail: flaherty@pfdincome.com

SERVICING AGENT

Claymore Securities, Inc.
1-866-233-4001

QUESTIONS CONCERNING YOUR SHARES OF FLAHERTY &
CRUMRINE/CLAYMORE TOTAL RETURN FUND?

- If your shares are held in a Brokerage Account, contact your Broker.

- If you have physical possession of your shares in certificate form, contact the Fund's Transfer Agent --

PNC Global Investment Servicing (U.S.) Inc.
1-800-331-1710

THIS REPORT IS SENT TO SHAREHOLDERS OF FLAHERTY & CRUMRINE/CLAYMORE TOTAL RETURN FUND INCORPORATED FOR THEIR INFORMATION. IT IS NOT A PROSPECTUS, CIRCULAR OR REPRESENTATION INTENDED FOR USE IN THE PURCHASE OR SALE OF SHARES OF THE FUND OR OF ANY SECURITIES MENTIONED IN THIS REPORT.

(FLAHERTY & CRUMRINE/CLAYMORE LOGO)

FLAHERTY & CRUMRINE/CLAYMORE
TOTAL RETURN FUND

Quarterly Report

February 28, 2010

www.fcclaymore.com

Flaherty and Crumrine To... (NYSE:FLC)
Historical Stock Chart
From Jun 2024 to Jul 2024

Flaherty and Crumrine To... (NYSE:FLC)
Historical Stock Chart
From Jul 2023 to Jul 2024