UNITED STATES
                     SECURITIES AND EXCHANGE COMMISSION
                          Washington, D.C.  20549


                                 FORM 10-Q

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

            QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                    THE SECURITIES EXCHANGE ACT OF 1934

             FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1997

                      Commission File Number 33-55538


                       SCOTIA PACIFIC HOLDING COMPANY
           (Exact name of Registrant as specified in its charter)



           DELAWARE                          74-2652575
 (State or other jurisdiction             (I.R.S. Employer
      of incorporation or              Identification Number)
         organization)


         P. O. BOX 712                          95565
  125 MAIN STREET, 2ND FLOOR                 (Zip Code)
      SCOTIA, CALIFORNIA
     (Address of Principal
      Executive Offices)


     Registrant's telephone number, including area code: (707) 764-2330


     Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the Registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.
Yes /X/   No /  /

     Number of shares of common stock outstanding at November 3, 1997:  3,000


     Registrant meets the conditions set forth in General Instruction
H(1)(a) and (b) of Form 10-Q and is therefore filing this Form with the
reduced disclosure format.

<PAGE>
                       SCOTIA PACIFIC HOLDING COMPANY

                                   INDEX



PART I.  -  FINANCIAL INFORMATION                                     PAGE

     Item 1.   Financial Statements

          Balance Sheet at September 30, 1997 and December 31, 1996   3
          Statement of Income for the three and nine months ended
               September 30, 1997 and 1996                            4
          Statement of Cash Flows for the nine months ended
               September 30, 1997 and 1996                            5
          Condensed Notes to Financial Statements                     6

     Item 2.   Management's Discussion and Analysis of Financial
                    Condition and Results of Operations               11

PART II.  -  OTHER INFORMATION

     Item 1.   Legal Proceedings                                      13
     Item 6.   Exhibits and Reports on Form 8-K                       13
     Signature                                                        S-1

<PAGE>
                       SCOTIA PACIFIC HOLDING COMPANY

                               BALANCE SHEET
                         (IN THOUSANDS OF DOLLARS)



<TABLE>
<CAPTION>
                                                  SEPTEMBER 30,  DECEMBER 31,
                                                       1997          1996
                                                  ------------- -------------
                                                   (UNAUDITED)
                      ASSETS
<S>                                               <C>           <C>
Current assets:
     Cash and cash equivalents                    $      8,482  $     20,345 
     Receivables:
          Due from Pacific Lumber                       13,644         5,007 
          Accrued interest                                  64           150 
     Prepaid timber harvesting costs                     1,406         1,509 
     Other prepaid expenses and current assets             363            98 
                                                  ------------- -------------
          Total current assets                          23,959        27,109 
Timber and timberlands, net of accumulated
     depletion of $156,315 and $144,679,
     respectively                                      155,201       165,970 
Property and equipment, net of accumulated
     depreciation of $6,136 and $5,458,
     respectively                                        6,557         6,597 
Deferred financing costs, net                           13,783        14,707 
Deferred income taxes                                   29,213        31,377 
Restricted cash                                         28,818        29,967 
Other assets                                             1,748         1,139 
                                                  ------------- -------------
                                                  $    259,279  $    276,866 
                                                  ============= =============
     LIABILITIES AND DEFICIENCY IN NET ASSETS

Current liabilities:
     Due to Pacific Lumber                        $        133  $        174 
     Accrued interest                                    4,946        11,877 
     Other accrued liabilities                           1,670           892 
     Long-term debt, current maturities                 19,335        16,165 
                                                  ------------- -------------
          Total current liabilities                     26,084        29,108 
Long-term debt, less current maturities                300,630       319,965 
                                                  ------------- -------------
          Total liabilities                            326,714       349,073 
                                                  ------------- -------------
Contingencies

Deficiency in net assets:
     Common stock, $1.00 par value, 3,000 shares
          authorized and issued                              3             3 
     Excess of liabilities assumed and common
          stock issued over assets contributed         (59,376)      (59,376)
     Cumulative activity since inception                (8,062)      (12,834)
                                                  ------------- -------------
          Total deficiency in net assets               (67,435)      (72,207)
                                                  ------------- -------------
                                                  $    259,279  $    276,866 
                                                  ============= =============

<FN>
The accompanying notes are an integral part of these financial statements.
</TABLE>

<PAGE>
                       SCOTIA PACIFIC HOLDING COMPANY

                            STATEMENT OF INCOME
                         (IN THOUSANDS OF DOLLARS)



<TABLE>
<CAPTION>
                                       THREE MONTHS ENDED          NINE MONTHS ENDED
                                         SEPTEMBER 30,               SEPTEMBER 30,
                                  --------------------------- ---------------------------
                                       1997          1996          1997          1996
                                  ------------- ------------- ------------- -------------
                                                        (UNAUDITED)
<S>                               <C>           <C>           <C>           <C>
Log sales to Pacific Lumber       $     44,346  $     42,050  $     92,512  $     99,316 
                                  ------------- ------------- ------------- -------------

Operating expenses:
     General and administrative          2,625         2,225         6,302         5,802 
     Depletion and depreciation          5,567         5,222        12,323        12,133 
                                  ------------- ------------- ------------- -------------
                                         8,192         7,447        18,625        17,935 
                                  ------------- ------------- ------------- -------------

Operating income                        36,154        34,603        73,887        81,381 

Other income (expense):
     Interest and other income             641           669         2,018         2,120 
     Interest expense                   (6,700)       (7,016)      (20,369)      (21,261)
                                  ------------- ------------- ------------- -------------
Income before income taxes              30,095        28,256        55,536        62,240 
Provision in lieu of income taxes      (12,263)      (11,598)      (22,629)      (25,547)
                                  ------------- ------------- ------------- -------------
Net income                        $     17,832  $     16,658  $     32,907  $     36,693 
                                  ============= ============= ============= =============

<FN>
The accompanying notes are an integral part of these financial statements.
</TABLE>

<PAGE>
                       SCOTIA PACIFIC HOLDING COMPANY

                          STATEMENT OF CASH FLOWS
                         (IN THOUSANDS OF DOLLARS)



<TABLE>
<CAPTION>
                                                        NINE MONTHS ENDED
                                                          SEPTEMBER 30,
                                                   ---------------------------
                                                        1997          1996
                                                   ------------- -------------
                                                           (UNAUDITED)

<S>                                                <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
     Net income                                    $     32,907  $     36,693 
     Adjustments to reconcile net income to net
          cash provided by operating activities:
          Provision in lieu of income taxes              22,629        25,547 
          Depletion and depreciation                     12,323        12,133 
          Amortization of deferred financing
               costs                                        924           935 
          Increase (decrease) in cash resulting                               
               from changes in:
               Receivables due from Pacific
                    Lumber                               (9,058)       (8,459)
               Accrued interest receivable                   86            80 
               Payables due to Pacific Lumber               (41)         (208)
               Accrued interest payable                  (6,931)       (7,179)
               Other accrued liabilities                    778           429 
          Other                                            (760)         (292)
                                                   ------------- -------------
               Net cash provided by
                    operating activities                 52,857        59,679 
                                                   ------------- -------------

CASH FLOWS FROM INVESTING ACTIVITIES:
     Capital expenditures                                (1,104)       (1,668)
     Net proceeds from sale of assets                        --            32 
                                                   ------------- -------------
               Net cash used for investing
                    activities                           (1,104)       (1,636)
                                                   ------------- -------------
CASH FLOWS FROM FINANCING ACTIVITIES:
     Principal payments on Timber Notes                 (16,165)      (14,103)
     Dividends paid                                     (48,600)      (59,600)
     Restricted cash withdrawals, net                      1,149          914 
                                                   ------------- -------------
               Net cash used for financing
                    activities                          (63,616)      (72,789)
                                                   ------------- -------------

NET DECREASE IN CASH AND CASH EQUIVALENTS               (11,863)      (14,746)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD         20,345        21,542 
                                                   ------------- -------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD         $      8,482  $      6,796 
                                                   ============= =============

SUPPLEMENTARY SCHEDULE OF NON-CASH INVESTING AND
     FINANCING ACTIVITIES:
     Assumption of net tax liabilities by
          Pacific Lumber                           $     20,465  $     23,570 

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
     Interest paid                                 $     26,376  $     27,505 

<FN>
The accompanying notes are an integral part of these financial statements.
</TABLE>

<PAGE>
                       SCOTIA PACIFIC HOLDING COMPANY

                  CONDENSED NOTES TO FINANCIAL STATEMENTS
                         (IN THOUSANDS OF DOLLARS)


1.        GENERAL

          The information contained in the following notes to the financial
statements is condensed from that which would appear in the annual
financial statements; accordingly, the financial statements included herein
should  be reviewed in conjunction with the financial statements and
related notes thereto contained in the Annual Report on Form 10-K filed by
Scotia Pacific Holding Company (the "Company") with the Securities and
Exchange Commission for the fiscal year ended December 31, 1996 (the "Form
10-K").  Any capitalized terms used but not defined in these Condensed
Notes to Financial Statements have the same meaning given to them in the
Form 10-K.  Accounting measurements at interim dates inherently involve
greater reliance on estimates than at year end.  The results of operations
for the interim periods presented are not necessarily indicative of the
results to be expected for the entire year.

          The financial statements as of and for the periods ended
September 30, 1997 and September 30, 1996 included herein are unaudited;
however, they include all adjustments of a normal recurring nature which,
in the opinion of management, are necessary to present fairly the financial
position of the Company at September 30, 1997, the results of operations
for the three and nine months ended September 30, 1997 and 1996 and cash
flows for the nine months ended September 30, 1997 and 1996.  Certain
reclassifications of prior period information have been made to conform to
the current presentation.  The Company is a wholly owned subsidiary of
Pacific Lumber which is a wholly owned indirect subsidiary of MGI.  MGI is
a wholly owned subsidiary of MGHI, which is a wholly owned subsidiary of
MAXXAM.

2.        RESTRICTED CASH

          Restricted cash represents the amount deposited into an account
held by the Trustee under the indenture governing the Company's Timber
Notes.  In addition, cash and cash equivalents includes $7,318 and $17,600
at September 30, 1997 and December 31, 1996, respectively, which is
restricted for debt service payments on the Timber Notes.

3.        CONTINGENCIES

          The Company's operations are subject to a variety of California
and federal laws and regulations dealing with timber harvesting, endangered
species and critical habitat, and air and water quality.  Moreover, these
laws and regulations are modified from time to time and are subject to
judicial and administrative interpretation.  Compliance with such laws,
regulations and judicial and administrative interpretations, together with
the cost of litigation incurred in connection with certain timber
harvesting operations of Pacific Lumber increase its cost of logging
operations.  The Company and Pacific Lumber are subject to certain pending
matters described below which could have a material adverse effect on the
Company's financial position, results of operations or liquidity.  There
can be no assurance that certain pending or future governmental
regulations, legislation, judicial or administrative decisions or
California ballot initiatives will not have a material adverse effect on
the Company.

          Regulatory actions and lawsuits are commenced from time to time
seeking to have certain species listed as threatened or endangered under
the ESA and/or the CESA and, in certain instances, to designate critical
habitat for such species.  In May 1996, the USFWS published the Final
Designation of critical habitat for the marbled murrelet, a coastal
seabird, which designated over four million acres as critical habitat for
the marbled murrelet.  Although nearly all of the designated habitat is
public land, approximately 25,000 acres of the Company's timberlands are
included in the Final Designation, the substantial portion of such acreage
being young growth timberlands.  In order to mitigate the impact of the
Final Designation, particularly with respect to timberlands occupied by the
marbled murrelet, Pacific Lumber attempted to develop the Murrelet HCP. 
Due to, among other things, the unfavorable response of the USFWS to
Pacific Lumber's initial Murrelet HCP efforts, the Company and Pacific
Lumber filed the Takings Litigation alleging that certain portions of their
timberlands had been "taken" and are seeking just compensation.  Pursuant
to the Headwaters Agreement entered into by Pacific Lumber, MAXXAM, the
United States and California on September 28, 1996 and described in Note 4
below, the Takings Litigation has been stayed at the request of the
parties.

          On April 25, 1997, the NMFS announced the listing of the coho
salmon as threatened under the ESA in northern California, including lands
owned by the Company.  On October 1, 1997, the Environmental Protection
Information Center, Inc. ("EPIC"), the Sierra Club and others notified
Pacific Lumber, NMFS and other regulatory agencies of their intent to file
suit against these parties to enjoin an alleged take of the coho salmon
within six watersheds on Pacific Lumber and the Company's timberlands.  It
is impossible for the Company to determine the potential adverse effect of
the Final Designation, the listing of the coho salmon and/or any related
litigation on the Company's financial position, results of operations or
liquidity until such time as various regulatory and legal issues are
resolved; however, if the Company is unable to harvest, or is severely
limited in harvesting, on the affected timberlands, such effect could be
materially adverse to the Company.  If the Company is unable to harvest or
is severely limited in harvesting, it intends to seek just compensation from
the appropriate governmental agencies on the grounds that such restrictions
constitute a governmental taking.  See Note 4 below for information regarding
Pacific Lumber's recent submission of a revised draft Multi-Species HCP
pursuant to the Headwaters Agreement.

          In 1994, the BOF adopted certain regulations regarding compliance
with long-term sustained yield ("LTSY") objectives.  These regulations
require that timber companies project timber growth and harvest on their
timberlands over a 100-year planning period and establish a LTSY harvest
level that takes into account environmental and economic considerations. 
Timber companies must submit an SYP demonstrating that the average annual
harvest over any rolling ten-year period will not exceed the LTSY harvest
level and that their projected timber inventory is capable of sustaining
the LTSY harvest level in the last decade of the 100-year planning period. 
On December 17, 1996, Pacific Lumber submitted a proposed SYP to the CDF
which was revised and re-submitted in September 1997.  As revised, the
proposed SYP sets forth an LTSY harvest level substantially the same as
Pacific Lumber's average annual timber harvest over the last six years. 
The proposed SYP also indicates that Pacific Lumber's average annual timber
harvest during the first decade of the SYP would approximate the LTSY
harvest level.  During the second decade of the proposed SYP, Pacific
Lumber's average annual timber harvest would be approximately 10% less than
that proposed for the first decade.  The SYP, when approved, will be valid
for ten years.  Thereafter, revised SYPs are to be prepared every decade
that will address the LTSY harvest level based upon reassessment of changes
in the resource base and protection of public resources.

          The proposed SYP assumes that the transactions contemplated by
the Headwaters Agreement will be consummated and that the Multi-Species HCP
will permit Pacific Lumber to harvest its timberlands (including over the
next two decades a substantial portion of its old growth timberlands not
transferred pursuant to the Headwaters Agreement) to achieve maximum
sustained yield.  The SYP is subject to review and approval by the CDF, and
there can be no assurance that the SYP will be approved in its proposed
form.  Until the SYP is reviewed and approved, the Company is unable to
predict the impact that these regulations will have on its future timber
harvesting practices.  It is possible that the results of the review and
approval process could require the Company to reduce its timber harvest in
future years from the harvest levels set forth in the proposed SYP.  The
Company believes that Pacific Lumber would be able to mitigate the effect
of any required reduction in harvest level by acquisitions of additional
timberlands and making corresponding amendments to the SYP; however, there
can be no assurance that Pacific Lumber would be able to do so, and the
amount of such acquisitions would be limited by Pacific Lumber's available
financial resources.  The Company is unable to predict the impact the
sustained yield regulations will have on its financial position, results of
operations or liquidity.

          Various groups and individuals have filed objections with the CDF
and the BOF regarding the CDF's and the BOF's actions and rulings with
respect to certain of the Company's THPs and other timber harvesting
operations, and the Company expects that such groups and individuals will
continue to file such objections.  In addition, lawsuits are pending or
threatened which seek to prevent the Company from implementing certain of
its approved THPs or which challenge other operations by the Company. 
These challenges have severely restricted Pacific Lumber's ability to
harvest old growth timber on its property.  To date, challenges with
respect to the Company's THPs relating to young growth timber and to its
other operations have been limited; however, no assurance can be given as
to the extent of such challenges in the future.  The Company believes that
environmentally focused challenges to its timber harvesting and other
operations are likely to occur in the future, particularly with respect to
virgin and residual old growth timber.  Although such challenges have
delayed or prevented the Company from conducting a portion of its
operations, they have not had a material adverse effect on the Company's
financial position, results of operations or liquidity.  Nevertheless, it
is impossible to predict the future nature or degree of such challenges or
their impact on the Company's  financial position, results of operations or
liquidity.

          The Company is also involved in various claims, lawsuits and
proceedings.  While there are uncertainties inherent in the ultimate
outcome of such matters and it is impossible to determine the ultimate
costs that may be incurred, management believes that the resolution of such
uncertainties and the incurrence of such costs should not have a material
adverse effect on the Company's financial position, results of operations
or liquidity.

4.        HEADWATERS AGREEMENT

          On September 28, 1996, the Pacific Lumber Parties entered into
the Headwaters Agreement with the United States and California.  The
Headwaters Agreement provides the framework for the acquisition by the
United States and California of the approximately 5,600 acres of Pacific
Lumber's timberlands commonly referred to as the Headwaters Forest and the
Elk Head Springs Forest (collectively, the "Headwaters Timberlands").  A
substantial portion of the Headwaters Timberlands consists of virgin old
growth timberlands.  Approximately 800 of these acres are owned by the
Company (Pacific Lumber having the exclusive right to harvest on
approximately 300 of these acres).  The Headwaters Timberlands would be
transferred in exchange for (a) property and other consideration from the
United States and California having an aggregate fair market value of $300
million, and (b) approximately 7,755 acres of adjacent timberlands (the
"Elk River Timberlands") to be acquired by the United States and California
from a third party.  The United States and California would also acquire
and retain an additional 1,900 acres of timberlands from such third party.

          Closing of the Headwaters Agreement is subject to various
conditions, including (a) acquisition by the government of the Elk River
Timberlands, (b) approval of an SYP (see Note 3) and a Multi-Species HCP
(covering the Resulting Pacific Lumber Timber Property and the timberlands
to be acquired and retained by the United States and California) and
issuance of a Permit, each in form and substance satisfactory to Pacific
Lumber, (c) the issuance by the Internal Revenue Service and the California
Franchise Tax Board of closing agreements in form and substance sought by
and satisfactory to the Pacific Lumber Parties, (d) the absence of a
judicial decision in any litigation brought by third parties that any party
reasonably believes will significantly delay or impair the transactions
described in the Headwaters Agreement, and (e) the dismissal with prejudice
at closing of the Takings Litigation.

          As part of the Headwaters Agreement, the Pacific Lumber Parties
agreed to not enter the Headwaters Forest or the Elk Head Springs Forest to
conduct logging operations, including salvage logging (the "Moratorium").  The
Moratorium was to terminate if by July 28, 1997 the parties had not
achieved the closing conditions to their respective satisfaction.  On March
11, 1997, the Pacific Lumber Parties agreed to amend the Headwaters
Agreement to extend to February 17, 1998 the period of time during which
these closing conditions must be met.  No written amendment has been
executed, but the Pacific Lumber Parties have continued to observe the
Moratorium.  The extension is subject to the achievement of certain
milestones toward completion of the Headwaters Agreement, including
satisfaction of the Pacific Lumber Parties with the progress of the United
States and California in providing the required consideration.

          The U.S. House and Senate have each passed an appropriations bill
which contains authorization for the expenditure of $250 million of federal
funds toward consummation of the Headwaters Agreement (the "Interior
Appropriations Bill"); however, it is unclear whether President Clinton
will sign the bill.  The federal funding is to remain available until March
1, 1999 and is subject to several conditions, including: (a) contribution
by the State of California of its $130 million portion of funding for the
Headwaters Agreement, (b) approval by the State of California of an SYP
covering the Resulting Pacific Lumber Timber Property, (c) dismissal of the
Takings Litigation, (d) issuance by the United States of the Permit, (e)
completion of an appraisal of the lands and interests being acquired by the
United States (the "Appraisal"), (f) completion of an environmental impact
statement with respect to the Multi-Species HCP, and (g) adequate provision
having been made for access to the Headwaters Timberlands.  Except for
acquisition of lands necessary for roadway access to the Headwaters
Timberlands, the Interior Appropriations Bill requires specific
Congressional authorization of acquisitions that enlarge the Headwaters
Timberlands by over five acres.  The Interior Appropriations Bill also
provides that the acquisition of the Headwaters Timberlands may not be
completed prior to the earlier of (a) 180 days after enactment (extended by
one day for every day beyond 120 days that the Appraisal is not submitted
to Congress), or (b) enactment of any separate authorizing legislation
modifying the Interior Appropriations Bill.

          Pacific Lumber submitted a revised draft of the Multi-Species HCP
to the USFWS, NMFS and other agencies in September 1997.  The Pacific
Lumber Parties and regulatory agencies have had ongoing discussions
regarding the environmental restrictions to be contained in the Multi-
Species HCP, but significant differences remain between what is being
requested by the regulatory agencies and what the Pacific Lumber Parties
are willing to accept.  The Interior Appropriations Bill requires that the
regulatory agencies report to Congress regarding (a) the scientific and
legal standards and criteria under the ESA used to develop the Multi-
Species HCP and the Permit, and (b) should application for the Permit be
denied, the precise substantive rationale for such denial.  The Pacific
Lumber Parties believe that this Congressionally-supervised process may
assist the regulatory authorities and the Pacific Lumber Parties to reach
an acceptable Multi-Species HCP, but no assurances can be made in this
regard.

          Although California has not enacted legislation providing funds
for its portion of the acquisition contemplated by the Headwaters
Agreement, representatives of the State of California continue to indicate
that they are considering various methods of furnishing the required
consideration.  

          The parties to the Headwaters Agreement are working to satisfy
the closing conditions; however, there can be no assurance that the
Headwaters Agreement will be consummated.

5.        DEFICIENCY IN NET ASSETS

          A reconciliation of the cumulative activity component of the
Company's deficiency in net assets is as follows:


<TABLE>
<CAPTION>
                                                        NINE MONTHS
                                                           ENDED
                                                       SEPTEMBER 30,
                                                            1997
                                                       -------------
<S>                                                    <C>
Balance at beginning of period                         $    (12,834)
Net income                                                   32,907 
Assumption of net tax liabilities by Pacific Lumber          20,465 
Dividends paid                                              (48,600)
                                                       -------------
Balance at end of period                               $     (8,062)
                                                       =============

</TABLE>

                       SCOTIA PACIFIC HOLDING COMPANY

ITEM 2.        MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
               AND RESULTS OF OPERATIONS


          The following should be read in conjunction with the response to
Part I, Item 1 of this Report and Items 7 and 8 of the Form 10-K.  Any
capitalized terms used but not defined in this Item have the same meaning
given to them in the Form 10-K.

          This section contains statements which constitute "forward-
looking statements" within the meaning of the Private Securities Litigation
Reform Act of 1995.  These statements appear in several places in this Form
10-Q.  Such statements can be identified by the use of forward-looking
terminology such as "believes," "expects," "may," "estimates," "will,"
"should," "plans" or "anticipates" or the negative thereof or other
variations thereon or comparable terminology, or by discussions of
strategy.  Readers are cautioned that any such forward-looking statements
are not guarantees of future performance and involve significant risks and
uncertainties, and that actual results may vary materially from those in
the forward-looking statements as a result of various factors.  These
factors include the effectiveness of management's strategies and decisions,
general economic and business conditions, developments in technology, new
or modified statutory or regulatory requirements and changing prices and
market conditions.  This section and the Company's Form 10-K identify other
factors that could cause such differences.  No assurance can be given that
these are all of the factors that could cause actual results to vary
materially from the forward-looking statements.

RESULTS OF OPERATIONS

          General
          The Mbfe concept was developed for use in structuring the Timber
Notes in order to take account of the relative values of the species and
categories of timber included in the Company Timber.  Under the Mbfe
concept, one thousand board feet, net Scribner scale, of residual old
growth redwood timber equates to one Mbfe.  One thousand board feet, net
Scribner scale, of each other species and category of timber included in
the Company Timber was assigned a value in Mbfe equal to a fraction of an
Mbfe.  This fraction was generally determined by dividing the SBE Price (as
defined below) applicable to such species and category for the first half
of 1992 by the SBE Price applicable to residual old growth redwood for the
first half of 1992.

          The Master Purchase Agreement generally contemplates that all
sales of logs by the Company to Pacific Lumber will be at a price which
equals or exceeds the applicable stumpage price for such species and
category, as set forth in the most recent Harvest Value Schedule published
by the California State Board of Equalization (the "SBE Price").  The
Harvest Value Schedule is published by the California State Board of
Equalization at six month intervals for purposes of computing yield taxes
imposed on the harvesting of timber.  The published SBE Prices are based on
average actual log prices between unrelated parties over a recent twenty-
four month period.  Therefore, SBE Prices may not necessarily be
representative of actual prices that would be realized from unrelated
parties at subsequent dates.

          Logging operations on the Company's timberlands are highly
seasonal.  Logging activity is normally significantly higher in the months
of April through November than in the months of December through March. 
Management expects that the Company's revenues and cash flows will continue
to reflect that seasonality.

          Log sales to Pacific Lumber
          Net sales from logs were $44.3 million and $42.1 million for the
quarters ended September 30, 1997 and 1996, respectively.  The increase in
net sales between the 1997 and 1996 third quarters is due to the increase
in volumes from 64,100 Mbfe to 71,200 Mbfe, but was offset in part by a
decline in SBE prices in most categories of logs.  Net sales from logs were
$92.5 million and $99.3 million for the nine months ended September 30,
1997 and 1996, respectively.  Net sales for the nine months ended September
30, 1997 decreased from the comparative prior year period due to a decline
in SBE prices in most categories of logs partly offset by the increase in
volume from 147,800 Mbfe to 152,800 Mbfe.

          Operating income and income before income taxes
          Operating income was $36.2 million and $34.6 million for the
quarter ended September 30, 1997 and 1996, respectively.  Operating income
was $73.9 million and $81.4 million for the nine months ended September 30,
1997 and 1996, respectively.  Income before income taxes was $30.1 million
and $28.3 million for the third quarter of 1997 and 1996, respectively.  
Income before income taxes was $55.5 million and $62.2 million for the nine
months ended September 30, 1997 and 1996, respectively.  These changes
between the periods are principally due to the changes in net sales
discussed above.

FINANCIAL CONDITION AND INVESTING AND FINANCING ACTIVITIES

          In January and July 1997, the Company repaid approximately $8.7
million and $7.5 million, respectively,  of the aggregate principal amount
outstanding on the Timber Notes in accordance with Scheduled Amortization.

          The Company paid $48.6 million of dividends to Pacific Lumber
during the nine months ended September 30, 1997.  At  September 30, 1997,
the Indenture permitted the payment of $7.8 million of dividends which were
paid on October 20, 1997.

TRENDS

          This section contains statements which constitute "forward-
looking statements" within the meaning of the Private Securities Litigation
Reform Act of 1995.  See above for cautionary information with respect to
such forward-looking statements.

          The Company's business is subject to a variety of California and
federal laws, regulations and judicial and administrative interpretations
dealing with timber harvesting, endangered species and critical habitat,
and air and water quality.  Moreover, these laws and regulations are
modified from time to time and are subject to judicial and administrative
interpretation.  The Company is subject to certain pending matters which
could have a material adverse effect on the Company's consolidated
financial position, results of operations or liquidity.  There can be no
assurance that these pending matters or future governmental regulations,
legislation or judicial or administrative decisions would not have a
material adverse effect on the Company.  See Part II. Item 1. "Legal
Proceedings" and Note 3 to the Financial Statements for further information
regarding regulatory and legal proceedings affecting the Company.  See also
Note 4 to the Financial Statements for information concerning the status of
the Headwaters Agreement.

          Judicial or regulatory actions adverse to the Company, increased
regulatory delays and inclement weather in northern California,
independently or collectively, could impair Pacific Lumber's ability to
conduct normal timber harvesting operations on the Company's timberlands.


                        PART II.  OTHER INFORMATION


ITEM 1.        LEGAL PROCEEDINGS

          Reference is made to Item 3 of the Form 10-K for information
concerning material legal proceedings with respect to the Company.  The
following material developments have occurred with respect to such legal
proceedings since the date of the Form 10-K.  Any capitalized or italicized
terms used but not defined in this Item have the same meaning given to them
in the Form 10-K.

          On October 1, 1997, the Environmental Protection Information
Center, Inc. ("EPIC"), the Sierra Club and others notified Pacific Lumber,
NMFS and other regulatory agencies of their intent to file suit against
these parties to enjoin an alleged take of the coho salmon within six
watersheds on Pacific Lumber and the Company's timberlands.

          With respect to the Marbled Murrelet action described in the Form
10-K, on April 18, 1997, the U.S. Ninth Circuit Court of Appeals reversed
the trial court's decision which had preliminarily enjoined eight already-
approved THPs to the extent they rely on the Federal Owl Plan.  On June 18,
1997 the court granted the defendants' motions for summary judgment
disposing of the remaining issues in this case in favor of the defendants.

          With respect to the Takings Litigation described in the Form 10-
K, the parties have asked the court to extend the stay of each action until
November 14, 1997.

ITEM 6.        EXHIBITS AND REPORTS ON FORM 8-K

          A.        EXHIBITS:

                    27   Financial Data Schedule

          B.        REPORTS ON FORM 8-K:

                    None

                                 SIGNATURE


          Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized, who has signed this report on
behalf of the Registrant and as the principal accounting officer of the
Registrant.


                                  SCOTIA PACIFIC HOLDING COMPANY



Date:  November 5, 1997           By:    /s/ Gary L. Clark
                                           Gary L. Clark
                                     Vice President - Finance
                                        and Administration