SECURITIES AND EXCHANGE COMMISSION

                           WASHINGTON, D. C.  20459

                                  FORM   10-Q

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


 For Quarter Ended  September 30, 1997   Commission File Number  I-4383  


                     ESPEY MFG. & ELECTRONICS CORP.                         
        (Exact name of registrant as specified in charter)                     
                                                          

          NEW YORK                                14-1387171                
       (State of Incorporation)                  (I.R.S. Employer's Ident No.)


         233 Ballston Avenue,  Saratoga Springs,  New York      12866           
         (Address of principal executive offices)             (Zip Code)



       Registrant's telephone number, include area code     518-584-4100    




       Number of shares outstanding of issuer's class of common stock
       $.33-1/3 par value as at the end of the period covered by this
       report    1,111,220    .




       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          

  



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                             ESPEY MFG. & ELECTRONICS CORP.

                                      I N D E X





PART I       FINANCIAL INFORMATION                                        PAGE


             Item 1        Financial Statments:


                           Balance Sheets - September 30, 1997               1
                           and June 30, 1997                                    


                           Statements of Earnings - Three Months             3
                           Ended September 30, 1997 and 1996
                                                              

                           Statements of Cash Flows - Three Months           4
                           Ended September 30, 1997 and 1996              


                           Notes to Financial Statements                     5


             Item 2        Management's Discussion and Analysis of           7
                           Financial Condition and Results of               
                           Operations.                                        



PART II      OTHER INFORMATION                                               9 

             SIGNATURES                                                     10
       
                                                                             




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<TABLE>
<CAPTION>






                                  ESPEY MFG. & ELECTRONICS CORP.

                                           Balance Sheets

                            September 30, 1997 and June 30, 1997

                                            A S S E T S

                                                            Unaudited                             
                                                               1997            1997
                                                            September 30      June 30      
CURRENT ASSETS:
<S>                                                      <C>                   <C>    
       Cash                                                  $     700,963     $   1,416,801
       Short-term investments at cost                        
          (market value September 30, 1997,                                  
            $10,761,793 and June 30, 1997,                                       
              $10,746,731)                                      10,720,225        10,706,782  
                    Total Cash and Short-term
                           Investments                          11,421,188        12,123,583

       
       Trade accounts receivable net of                                   
          $3,000 allowance at September 30, 1997
          and June 30, 1997                                      1,675,805         1,142,599       
       Other receivables                                               500            21,231

                    Net Receivables                              1,676,305         1,163,830
              
       Inventories:

          Raw materials and supplies                               513,550           449,416
          Work-in-process                                        3,418,774         3,225,657
          Costs relating to contracts in
          process                                                4,832,185         4,526,802

                    Net Inventories                              8,764,509         8,201,875
                                                                                     
       Deferred income taxes                                        144,036          137,758  
       Prepaid expenses and other current assets                   130,938           192,853

                    Total Current Assets                        22,136,976        21,819,899

DEFERRED INCOME TAXES                                                69,616           74,671

PROPERTY, PLANT AND EQUIPMENT AT COST                           12,071,216        12,043,850 

       Less: Accumulated depreciation and
             amortization                                       (8,843,903)       (8,738,469)

              Net Property, Plant and Equipment                  3,227,313         3,305,381

                    Total                                    $  25,433,905     $  25,199,951
                                                                                              
                             - 1 -                        (CONTINUED)

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<CAPTION>
       
                                  ESPEY MFG. & ELECTRONICS CORP.

                                    Balance Sheets, Continued

                               September 30, 1997 and June 30, 1997 

                               LIABILITIES AND STOCKHOLDERS' EQUITY

                                                                Unaudited
                                                                    1997         1997
                                                              September 30       June 30  
CURRENT LIABILITIES:
<S>                                                       <C>                  <C>    
       Accounts Payable                                      $    305,495        $    245,803
       Accrued expenses:
          Salaries, wages and commissions                         155,310             107,640
          Employees' insurance costs                               33,198              40,573
          ESOP payable                                            113,926                -
          Other                                                     9,887               8,994
          Payroll and other taxes withheld                                
              and accrued                                          63,479              47,564
          Dividends payable                                       777,854                 -    
          Income taxes payable                                     67,745             148,606
       
                    TOTAL CURRENT LIABILITIES                   1,526,894             599,180
       
       

STOCKHOLDERS' EQUITY:

       Common stock, par value .33-1/3 per
       share.  Authorized 2,250,000 shares;
       issued 1,514,937 shares September 30, 1997
       and June 30, 1997.                                         504,979             504,979

       Capital in excess of par value                          10,496,287          10,496,287

       Retained earnings                                       23,454,645          24,148,405
                                                               34,455,911          35,149,671

       Less:  Common stock subscribed                         ( 3,910,636)        ( 3,910,636)
               Cost of 403,717 shares on September
               30, 1997 and June 30, 1997 of common
               stock in treasury                              ( 6,638,264)        ( 6,638,264)

              TOTAL STOCKHOLDERS' EQUITY                       23,907,011          24,600,771

                           TOTAL                             $ 25,433,905        $ 25,199,951
                                                                                             

<FN>

       See accompanying notes to financial statements

</FN>
                                                 - 2 -


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<CAPTION>                                                              
                       
       
                                  ESPEY MFG. & ELECTRONICS CORP.

                                     Statements of Earnings

                     Three Months Ended September 30, 1997 and 1996
                                                                


                                                                     Unaudited   
                                                                   Three Months
                                                           September 1997    September 1996
<S>                                                      <C>               <C>      
Net Sales                                                  $    2,503,584  $4,586,892
Cost of sales                                                   2,074,981   3,888,874

                           GROSS PROFIT                           428,603     698,018

Selling, general and administrative
       expenses                                                   507,165     447,335

                           OPERATING INCOME (LOSS)            (    78,562)    250,683

Other Income:

       Interest income                                             149,364    124,661
       Sundry income                                                 1,207        375 

                                                                   150,571    125,036
                                                                                                     

Earnings before income taxes                                        72,009    375,719 

Provision for income taxes                                          27,000    147,000


                           NET EARNINGS                      $      45,009   $228,719
                                                                                                     



Earnings per Share:

Net earnings                                                    $ .04        $ .21
                                                                                                    

Average number of shares outstanding                         1,111,220       1,114,610
                                                                                                    


<FN>
    See accompanying notes to financial statements
      
</FN>


                                      - 3 -


                                                                          
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<CAPTION>           

                                  ESPEY MFG. & ELECTRONICS CORP.
                                    Statements of Cash Flows
                        Three Months Ended September 30, 1997 and 1996
                                                                              Unaudited
                                                                              September 30       
                                                                        1997            1996     
Cash Flows From Operating Activities:
<S>                                                               <C>                 <C>                                        
       Net earnings                                                 $   45,009       $   228,719

       Adjustments to reconcile net earnings to net
       cash used in operating activities:

       Tax effect of dividends on unallocated ESOP shares               39,084            46,732  
       Depreciation                                                    105,434           167,012
       Changes in assets and liabilities:
              Increase in receivables, net                          (  512,475)      ( 2,252,686) 
              Decrease (increase) in inventories, net               (  562,634)        1,379,054 
              Decrease in other current assets                          61,915           100,658   
              Increase (decrease) in accounts payable                   59,692       (    25,481)
              Increase in accrued salaries, wages and commissions       47,670            52,533  
              Decrease in accrued employee insurance costs          (    7,375)      (     6,429) 
              Increase (decrease) in other accrued expenses                893       (     6,043)
              Increase (decrease) in payroll & other taxes withheld
               and accrued                                              15,915       (    85,905)
              Decrease (increase) in deferred income taxes          (    1,223)      (    34,832)
              Increase (decrease) in income taxes payable           (   80,861)          132,440 
              Increase in accrued ESOP contributions                   113,926           110,249

                                  Net cash used in
                                  operating activities              (  675,030)      (   193,979)

Cash Flows From Investing Activities:

       Additions to property, plant & equipment                     (   27,366)      (    110,677)
       Proceeds from maturity of marketable investment securities          -            2,921,195 
       Purchases of marketable investment securities                       -         (    973,403)  
 
                    
                                  Net cash provided by (used in) 
                                  investing activities              (   27,366)         1,837,115

Cash Flows From Financing Activities:

       Purchase of treasury stock                                        -           (    116,032)

                                  Net cash used in
                                  financing activities                   -           (    116,032)

Increase (decrease) in cash and short-term investments              (  702,396)         1,527,104


Cash and short-term investments, beginning of period                 12,123,583         5,597,079

Cash and short-term investments, end of period                      $11,421,187       $ 7,124,183 
                                                                                                   


Income Taxes Paid                                                   $    70,000        $    2,660
                                                                                                   
<FN>
See accompanying notes to financial statements. 

</FN>


                                         - 4 -


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</TABLE>

                           ESPEY MFG. & ELECTRONICS CORP.

                           Notes to Financial Statements
                               ___________________

1. The unaudited interim financial statements have been prepared
   pursuant to the rules and regulations of the Securities and                
   Exchange Commission.  In the opinion of management, the                    
   accompanying unaudited financial statements contain all                    
   adjustments (consisting of only normal recurring accruals)                
   necessary to present fairly the financial position of the                
   Company as of September 30, 1997, and the results of operations
   for each of the three months ended September 30, 1997 and 1996
   and cash flows for each of the three months ended September 30,
   1997 and 1996. The operating results for the three months ended
   September 30, 1997 are not necessarily indicative of the                   
   operating results to be expected for the full fiscal year.                 
   Certain information and footnote disclosures normally included
   in financial statements prepared in accordance with generally
   accepted accounting principals have been condensed or omitted
   pursuant to such rules and regulations applicable to interim 
   financial statements, although management believes the                    
   disclosures are adequate to make the information presented not
   misleading. These financial statements should be read in                   
   conjunction with the Company's most recent audited financial               
   statements included in its 1997 Annual Report to Stockholders
   and its 1997 Form 10-K.

2. The earnings per share computations for September 30, 1997 were
   based on 1,111,220 shares and on 1,114,610 shares for September
   30, 1996.  These represent the average number of shares                   
   outstanding for each respective period.

3. Other income consists principally of interest on Certificates of
   Deposit, Treasury Bills and money market accounts.
 
4. There were no material unusual charges or credits to operations
   or a change in accountants during the most recently completed
   quarter which would require the filing of a Form 8-K. 

5. There were no securities sold by the Company during the current
   quarter which were not registered under the Securities Act of
   1934 in reliance upon an exemption from registration provided 
   in Section 4 (2) of the Act.

                             - 5 -                                            

<PAGE>

6. For purposes of the statements of cash flows, the Company               
   considers all liquid debt instruments with original maturities
   of three months or less to be cash equivalents. 

7. In fiscal 1989 the Company established an Employee Stock                 
   Ownership Plan (ESOP) for eligible non-union employees.  The              
   ESOP used the proceeds of a loan from the Company to purchase
   316,224 shares of the Company's common stock for approximately
   $8.4 million and the Company contributed approximately $400,000 
   to the ESOP which was used by the ESOP to purchase an additional 
   15,000 shares of the Company's common stock.

   The loan from the Company to the ESOP is repayable in annual              
   installments of $1,039,605, including interest, through June 30,
   2004. Interest is payable at a rate of 9% per annum.  The                  
   Company's receivable from the ESOP is recorded as common stock
   subscribed in the accompanying balance sheets.

   Each year, the Company will make contributions to the ESOP which
   will be used to make loan interest and principal payments. With
   each loan and interest payment, a portion of the common stock
   will be allocated to participating employees.  As of September
   30, 1997 there were 152,214 shares allocated to participants. 


8. The Company adopted the provisions of SFAS No. 121, "Accounting
   for the Impairment of Long-Lived Assets and for Long-Lived                
   Assets to Be Disposed Of", as of July 1, 1995.  This accounting
   standard required that certain long-lived assets be reviewed for
   impairment when events or circumstances indicate that the                 
   carrying amount of the assets may not be recoverable.  If such
   review indicates that the carrying value is written down to fair
   value.  Long-lived assets to be disposed of are reported at the
   lower of carrying amount or fair value less cost to sell.  The
   adoption of this accounting standard had no effect on the                 
   financial position or results of operations of the Company.








                                   - 6 -                                    
   
<PAGE>


ESPEY MFG. & ELECTRONICS CORP.
Management's Discussion and Analysis of

Results of  Operations

Sales for the three months ended September 30, 1997
were $2,503,584 as compared to $4,586,892 for the same
period in 1996. This decrease in sales resulted
primarily from the consolidation and relocation of the
facilities and personnel of one of the Company's major
customers. 

The cost of sales, as a percentage of sales,  dropped
slightly to 83% for the first quarter of fiscal 1998 as
compared to the 85% reflected for the same period last
year. The resulting increase in the gross profit margin
can be attributed to many of the contracts shipped in
the current quarter calling for a somewhat higher gross
profit margin than those shipped in the corresponding
quarter in the prior year: however, this was partially
offset by  an increase in selling and general  & 
administrative  expenses of  13%. The increase in
selling and general  & administrative expenses cannot
be attributed to any specific factor.   

The 20% increase in interest income, between the first
quarter of fiscal 1998 and the corresponding quarter of
fiscal 1997, was directly related to the net increase
in cash and short-term investments. The increase in
short-term investments was explained in detail in the
most  recently filed Form 10-K in Item 7, "Management"s
Discussion and Analysis of Financial Condition and
Results of Operations - Liquidity and Capital
Expenditures."  The Company does not feel that there is
any risk associated with its investment policy, since
the majority of our investments are represented by
Certificates of  Deposit,  United States Government
Treasury Securities and a Money Market account.

Net earnings for the three month period  ended
September 30, 1997 were $45,009 or $.04 per share
compared to $228,719 or $.21 per share for the
corresponding period of last year.  The net earnings
decrease was due to reduced sales and  the increase in
selling,  general & administrative expenses.

Liquidity and Capital Expenditures

As of  September 30, 1997 the total cash and short-term
investments was $11,421,188 as compared to $12,123,583
as of June 30, 1997. This decrease in cash and short-
term investments at the end of the period is
substantially attributable to the increases in
inventories and accounts receivable. Most of these
receivables have already been paid, and the Company
feels that its reserve is adequate.

The Company, in the first quarter, funded its
operations with cash flows from operating activities
and investing activities. Management currently feels
that during the balance of the fiscal year, funds from
operating activities will be adequate to meet funding
requirements.  For the first quarter capital
expenditures were approximately $27,366.

Since the debt of the Company's ESOP is not to an
outside party, the company has eliminated from the
Statements of Earnings  the offsetting items of
interest income and interest expense relating to the
ESOP. The Company has eliminated the offsetting
accruals from the Balance Sheets.

Under existing authorizations, as of September 30,
1997, funds in the amount of $1,884,000 were available
for the continuing repurchase of the Company's shares.

Business  Outlook

Customer order patterns are inherently difficult to
predict. As previously disclosed, one of the Company's
major customers has announced the consolidation and
relocation of several of its facilities and various
personnel. The 

                    -7-

<PAGE>
transition stage of this consolidation has caused
delays in both ongoing and newly proposed programs. At
the present time, the Company does not know what effect
this will have on the receipt of currently pending new
business from this customer. The Company is hopeful
that any further delays will be minimal.


The backlog as of September 30, 1996 was $12,218,320.
The backlog as of September 30, 1997 was $7,661,378.
The Company believes that it will continue to obtain
contracts consistent with our past experience. We are
currently anticipating a new contract for our high
power radar transmitters, which, if received, along
with our other anticipated new business will result in
substantially increasing our backlog. Despite the
significant sales decrease in this period, management
anticipates that sales for the final three quarters of
fiscal 1998 will approximate or exceed those for the
final three quarters of fiscal 1997.

The Company is continuing to expand its Sales and
Marketing departments. Various specifics concerning the
products we are concentrating on are addressed in both
the President's message accompanying our 1997 Annual
Report and in our most recently filed Form 10-K in Item
7, "Management's Discussion and Analysis of Financial
Condition and Results of Operations - Business
Outlook. "Management currently anticipates that the
course of action the Company has taken will enhance the
Company's revenues and profitability in future periods.


Other Matters

A dividend in the amount of $.70 per share was declared
payable November 21, 1997 to shareholders of record on
October 24, 1997.

Cautionary Statement for Purposes of the "Safe Harbor"
Provisions of the Private Securities Litigation Reform
Act of 1995

It should be noted that certain statements in this
Management's Discussion and Analysis of Financial
Condition and Results of Operations are "forward-
looking statements" within the meaning of Section 27A
of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended,
and are made pursuant to the safe harbor provisions of
the Private Securities Litigation Reform Act  of 1995.
These forward-looking statements represent the
Company's current expectations or beliefs concerning
future events. The matters covered by these statements
are subject to certain risks and uncertainties that
could cause actual results to differ materially from
those set forth in the forward-looking statements,
including the Company's dependence on timely
development, introduction and customer acceptance of
new products, the impact of competition and price
erosion, as well as supply and manufacturing
constraints and other risks and uncertainties. The
foregoing list should not be construed as exhaustive,
and the Company disclaims any obligation subsequently
to revise any forward-looking statements to reflect
events or circumstances after the date of such
statements or to reflect the occurrence of anticipated
or unanticipated events. The Company wishes to caution
readers not to place undue reliance on any such
forward-looking statements, which speak only as of the
date made.
               
                 - 8 -

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                           ESPEY MFG. & ELECTRONICS CORP.

                    PART II:  Other Information and Signatures



Item 4.      Submission of Matters to a Vote of Security Holders

             None during the quarter.           


Item 5.      Other Information          

             None during the quarter.


Item 6.      Exhibits and Reports on Form 8-K

             None during the quarter.





























                                      - 9 -


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                           S I G N A T U R E S



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.




                                        ESPEY MFG. & ELECTRONICS CORP.




                                                                       
                                        Joseph Canterino, President



                                                                       
                                        Herbert Potoker, Treasurer and
                                        Chief Financial Officer



               
 12 September 1997   
       Date 



















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