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     March 31, 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      12866-4755      
  (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 - March 31, 1997                       1
                       and June 30, 1996                                     


                       Statements of Earnings - Three Months                  3
                       and Nine Months Ended March 31, 1997
                       and 1996
                                                          

                       Statements of Cash Flows - Nine Months                 4
                       Ended March 31, 1997 and 1996              


                       Notes to Financial Statements                          5
                       March 31, 1997 and 1996                   
                       
        Item 2         Management's Discussion and Analysis of                7
                       Financial Condition and Results of              
                       Operations.                                        



PART II OTHER INFORMATION                                                   10 

        SIGNATURES                                                          11

                                                                             












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<TABLE>
<CAPTION>

                                      ESPEY MFG. & ELECTRONICS CORP.

                                               Balance Sheets

                                March 31, 1997 and June 30, 1996 

                                                A S S E T S

                                                                      Unaudited                                  
                                                                        1997                     1996
                                                                       March 31           June 30      
CURRENT ASSETS:
<S>                                                                 <C>                   <C> 
        Cash and cash equivelents                                   $     659,198         $   1,112,767
        Short-term investments at cost                              
           (market value March 31, 1997,                                      
             $10,891,321 and June 30, 1996,                                               
               $4,577,305)                                             10,838,480             4,484,312  
                       Total Cash and Short-term
                              Investments                              11,497,678             5,597,079

        Marketable investment securities - current                        100,000             3,021,195

        Trade accounts receivable net of                                         
           $3000 allowance March 31, 1997
           and June 30, 1996                                            1,899,723             1,556,404          
        Other receivables                                                     500                18,177

                       NET RECEIVABLES                                  1,900,223             1,574,581
               
        Inventories:

           Raw materials and supplies                                     530,934               499,900
           Work-in-process                                              1,785,343             1,561,742
           Costs relating to contracts in
               process                                                  5,809,835             8,971,704

                       NET INVENTORIES                                  8,126,112            11,033,346
                                                                                     
        Deferred Income taxes                                               -                       796  
        Prepaid expenses and other current assets                         292,525               272,808

                       TOTAL CURRENT ASSETS                            21,916,538            21,499,805

Deferred income taxes                                                      86,844                 9,088

PROPERTY, PLANT AND EQUIPMENT AT COST                                  12,112,889            11,813,137 

        Less: Accumulated depreciation and
              amortization                                             (8,771,913)           (8,371,987)

               NET PROPERTY, PLANT AND EQUIPMENT                        3,340,976             3,441,150

                       TOTAL                                        $  25,344,358         $  24,950,043
                                                                                                       
                                 - 1 -                                     (Continued)
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<CAPTION>               
     
                                      ESPEY MFG. & ELECTRONICS CORP.

                                        Balance Sheets, Continued

                              March 31, 1997 and June 30, 1996 

                                LIABILITIES AND STOCKHOLDERS' EQUITY

                                                                       Unaudited
                                                                           1997               1996
                                                                        March 31         June 30   
CURRENT LIABILITIES:
<S>                                                                 <C>                   <C>
        Accounts Payable                                            $    339,588          $    158,631
        Accrued expenses:
           Salaries, wages and commissions                               275,894               116,351
           Employees' insurance costs                                     37,174                54,739
           ESOP payable                                                  330,746                  -
           Other                                                          12,319                17,440
           Payroll and other taxes withheld                                        
               and accrued                                               110,516               156,890
           Dividends payable                                                 -                      -     
           Deferred income taxes                                          38,918                    -            
           Income tax payable                                            120,007               119,857
        
                       TOTAL CURRENT LIABILITIES                       1,265,162               623,908
        
        

STOCKHOLDERS' EQUITY:

        Common stock, par value .33-1/3 per
        share.  Authorized 2,250,000 shares;
        issued 1,514,937 shares March 31, 1997
        and June 30, 1996.                                               504,979               504,979

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

        Retained earnings                                             24,185,493            24,316,400
                                                                      35,186,759            35,317,666

        Less:  Common stock subscribed                               ( 4,469,299)          ( 4,469,299)
                Cost of 403,717 shares on March
                31, 1997 and 396,291 shares on
                June 30, 1996 of common stock in
                treasury                                             ( 6,638,264)          ( 6,522,232)

               TOTAL STOCKHOLDERS' EQUITY                             24,079,196            24,326,135

                              TOTAL                                 $ 25,344,358          $ 24,950,043
                                                                                                      

<FN>

        See accompanying notes to financial statements

</FN>
                                                       - 2 -

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<CAPTION>

                                                   ESPEY MFG. & ELECTRONICS CORP.

                                                         STATEMENTS OF EARNINGS

                                        Three and Nine Months Ended March 31, 1997 and 1996
                                             
                                                              Unaudited                                    Unaudited
                                                               Three Months                                   Nine Months
                                                          1997              1996                    1997                   1996   
<S>                                               <C>                   <C>                    <C>                   <C>     
Net Sales                                         $  3,805,569          $  4,352,275           $ 12,458,847          $ 12,787,976


Cost of sales                                        3,261,532             3,818,718             10,487,571            11,362,828

               Gross profit                            544,037               533,557              1,971,276             1,425,148

Selling, general and administrative expenses           467,407               397,074              1,374,285             1,251,804
               Operating income                         76,630               136,483                596,991               173,344

Other income
        Interest income                                130,072               133,329                378,595               459,539
        Sundry income                                      668                   667                  3,629                 7,942
                                                       130,740               133,996                382,224               467,481

Earnings before income taxes                           207,370               270,479                979,215               640,825
  

Provision for income taxes                              80,000               101,000                379,000               247,000

               Net earnings                       $    127,370          $    169,479           $    600,215          $    393,825
                                                                                                                              
Earnings per share:


Net earnings                                         $ .12                 $ .13                 $ .54                $  .30
                                                                                                                             

Average number of shares outstanding                1,111,220              1,264,912             1,112,358              1,319,375
                                                                                                                              

<FN>

See accompanying notes to Financical Statements
</FN>
                                                                    - 3 -                                                        
                                                                     
                          
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<CAPTION>
                                      ESPEY MFG. & ELECTRONICS CORP.
                                        Statements of Cash Flows
                              Nine Months Ended March 31, 1997 and 1996
                                                                                      Unaudited
                                                                                      March 31      
                                                                                  1997                1996    
Cash Flows From Operating Activities:
<S>                                                                        <C>                    <C>   
        Net earnings                                                       $     600,215          $    393,825

Adjustments to reconcile net earnings to net
cash provided by operating activities:

        Tax effect of dividends on unallocated ESOP shares                        46,732                45,063  
        Depreciation                                                             399,926               392,542
        Changes in assets and liabilities:
               Decrease (increase) in receivables, net                     (     325,642)         (  1,213,125) 
               Decrease (increase) in inventories, net                         2,907,234          (  1,519,639)  
               Decrease (increase) in other current assets                 (      19,717)              128,898
               Decrease (increase) in income tax refund receivable                  -                 249,886    
               Increase (decrease) in accounts payable                           180,957                21,340
               Increase (decrease) in accrued salaries,                          159,543               185,622
                        wages and commissions
               Increase (decrease) in accrued employee                      (     17,565)                1,653
                       insurance costs                                                               
               Increase (decrease) in other accrued expenses                (      5,121)         (        100) 
               Increase (decrease) in payroll & other                        (     46,374)        (      4,191)
                         taxes withheld and accrued
               Increase (decrease) in income tax payable                             150                   -                    
               Decrease (increase) in deferred income taxes                 (     38,042)         (     47,949)
               Increase (decrease) in accrued ESOP contributions                  330,746              319,715

                                      Net cash provided by (used in)       
                                      operating activities                     4,173,042           ( 1,046,460)

Cash Flows From Investing Activities:

        Additions to property, plant & equipment                           (     299,752)         (    311,623)
        Proceeds from maturity of marketable investment securities             4,880,073            11,445,421 
        Purchases of marketable investment securities                      (   1,958,878)         (  6,706,726) 
               
                                      Net cash provided by(used in)
                                      investing activities                     2,621,443             4,427,072

Cash Flows From Financing Activities:

        Dividends on common stock                                          (     777,854)         (    937,119)         
        Purchase of treasury stock                                         (     116,032)         (  3,696,340)

                                      Net cash used in
                                      financing activities                 (     893,886)         (  4,633,459)

Increase (decrease) in cash and short-term investments                         5,900,599          (  1,252,847)


Cash and short-term investments, beginning of period                           5,597,079             1,699,215

Cash and short-term investments, end of period                             $  11,497,678          $    446,368 
                                                                                                              


Income Taxes Paid                                                          $     367,000          $      -    
<FN>                                                                                                              
See accompanying notes to financial statements. 

</FN>
                                             - 4 -

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</TABLE>
     
                         ESPEY MFG. & ELECTRONICS CORP.

                              Notes to Financial Statements
                                  ___________________

1. 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 March 31, 1997, and the results of operations for each of the 
   nine months ended March 31, 1997 and 1996 and cash flows for the nine months 
   ended March 31, 1997 and 1996.  The operating results for the nine months 
   ended March 31, 1997 are not necessarily indicative of the operating results 
   to be expected for the full fiscal year.  These statements should be read in 
   conjunction with the Company's most recent Annual Report to Stockholders and
   Annual Report on Form 10-K.

2. The earnings per share computations for March 31, 1997 were based on         
   1,112,358 shares and on 1,319,375 shares for March 31, 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.

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.



                                         - 5 -

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   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 March 31, 1997 there were 131,439 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 -                             
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                  ESPEY MFG. & ELECTRONICS CORP.

              Management's Discussion and Analysis of

                   Financial Condition and Results of Operations
                                                                
 
Sales for the nine months ended March 31, 1997 were $12,458,847 as compared to 
$12,787,976 for the same period in 1996. Sales volume is largely dependent on 
both lead times required for new orders and the specific delivery needs of our 
customers.

Net earnings for the current nine month period were $600,215  compared to 
$393,825 for the corresponding period last year. This is an increase of 
approximately 52%. Current earnings per common share rose to $.54 per share
from $.30 per common share last year. This increase reflects not only the 
increase in net earnings but the decrease in the average number of common shares
outstanding during the comparable nine month periods from 1,319,375 to
1,112,358.

Similar to the first half of this year, many of the contracts shipped in the 
current quarter carried a somewhat higher gross profit margin than those shipped
during the corresponding half of last year. As a result, Cost of Sales for the 
current nine month period dropped to 84% compared to the 89% reflected last 
year. This factor was the primary reason for the increase in net profits 
although there was a decrease in sales of nearly 3%. The Company is still 
striving to enhance and expand its Sales and Marketing departments. In this 
regard the Company has contacted, and is developing, a number of new customers.
As indicated previously, certain specifics concerning the products that the 
Company is concentrating on are addressed in both the President's message 
accompanying our 1996 Annual Report to Stockholders and in our most recently 
filed Form 10K. 

Selling and General & Administrative expenses show an increase of approximately 
18% for the current nine month period. This is primarily due to the 
reclassification of certain salaries from manufacturing expenses to general
and administrative expenses, in addition to an increase in legal expenses thru 
the Company's efforts to obtain patents on a number of its products. 

In the Statements of Cash Flows the decrease in inventories is due for the most 
part to a decrease in material purchases in keeping with the reduction in our 
current backlog. 

Investment income declined by approximately 22% for the current nine month 
period primarily due to a reduction in our investment base brought about by a 
major repurchase of our common stock during the latter part of our last fiscal 
year. Management presently does not feel that there is any risk associated with 
its investment policy, since the majority of our investments are represented by 
U.S. Government securities, Certificates of Deposit and money market accounts.

                                     - 7 -

<PAGE>

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 also 
eliminated the offsetting accruals from the Balance Sheets.

The Company, when possible, funds all of its operations including Financing 
Activities and Investing Activities with cash flows resulting from Operating 
Activities. Management currently feels that during the next fiscal year, funds 
from Operating Activities will continue to be adequate to meet these needs. For 
the current nine month period capital expenditures were approximately $300,000.

During the nine month period ended March 31, 1997 the Company repurchased 7,426 
shares of its common stock.

Under existing authorizations, as of March 31, 1997, funds in the amount of 
$1,883,969 were available for the continuing repurchase of the Company's shares.

The backlog as of March 31, 1996 was $18,666,969. The backlog as of March 31, 
1997 was $9,404,756. As indicated in prior reports 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 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, if any, this will have
on the receipt of currently pending new business from this customer. The
Company is hopeful that any further delay will be minimal. In spite of this,
in light of our projected expanding customer base, the Company believes that in
the long term it will continue to obtain contracts consistent with our past
experience. The Company conservatively estimates that it currently has
outstanding quotations well in excess of $35,000,000 for both repeat and new
programs, in addition to increase option clauses in various existing contracts.
The Company is presently optimistic that a significant portion of these
quotations and options will result in firm contracts. 

A dividend in the amount of $.70 per share was paid November 22, 1996 to 
shareholders of record on October 28, 1996. 

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

                              - 8 -

<PAGE>


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.


































                              -9-

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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 this quarter.

Item 5.        Other Information     

               None during this quarter.


Item 6.        Exhibits and Reports on Form 8-K

               27     Financial Data Schedule (for electronic filing only)

               





















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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



               
   07 May 1997     
       Date 






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