UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-QSB


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                                 1-4591
                              --------------------------------------

                  FAIRMOUNT CHEMICAL CO., INC. 
----------------------------------------------
(Exact name of registrant as specified in its charter.)

           New Jersey                                     22-0900720
-------------------------------                       ---------------
(State of other jurisdiction of                      (I.R.S. Employer
incorporation or organization)                    Identification No.)

117 Blanchard Street, Newark, NJ                                07105
---------------------------------------------------------------------
(Address of principal executive offices)                (Zip Code)

 Registrant's telephone number, including area code: (201)-344-5790
                                                    ---------------

  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 [     ] 


  Indicate the number of shares outstanding of each of the issuer's 
classes of common stock, as of the latest practical date:

  Common Stock, $1 Par Value - 8,292,866 shares as of November 14, 1997.




PART I.  FINANCIAL INFORMATION

FAIRMOUNT CHEMICAL CO., INC.
----------------------------


<TABLE>
<CAPTION>


Statements Of Income and Accumulated Deficit

For The Three Months and Nine Months Ended September 30, 1997 and 1996
(Unaudited)


(Dollar amounts rounded to hundreds, except per share data)


                                                     1997                                       1996
                                                   -------                                    -------

                                      Three Months         Nine Months           Three Months          Nine Months 
                                      ------------        ------------           ------------         ------------
<S>                                   <C>                 <C>                    <C>                  <C>
Net Sales                            $  2,471,400        $  9,068,400           $  2,826,500         $  9,393,800
Cost of goods sold                      1,725,700           7,422,200              2,599,400            7,726,600
-----------------------------------------------------------------------------------------------------------------
Gross Profit                              745,700           1,646,200                227,100            1,667,200

Research                                   91,100             326,600                120,400              369,600
Selling, general and
  administrative expense                  492,300           1,456,300                480,700            1,485,500
  ---------------------------------------------------------------------------------------------------------------
Operating (Loss) Income                   162,300            (136,700)              (374,000)            (187,900)

Interest (Income) Expense                  43,800              80,000                 16,200               47,800
Restructuring charge                            -             330,000                      -                    -
Insurance proceeds                              -            (200,000)                     -                    -
Other (Income) Expense                     (8,600)              5,600                   (200)             (60,600)
-----------------------------------------------------------------------------------------------------------------
Net (Loss) Income                         127,100            (352,300)              (390,000)            (175,100)

Accumulated Deficit
  Beginning of Period                 (15,049,400)        (14,570,000)           (14,078,000)         (14,292,900)
  ---------------------------------------------------------------------------------------------------------------
Accumulated Deficit
  End of Period                      $(14,922,300)       $(14,922,300)          $(14,468,000)        $(14,468,000)
  ===============================================================================================================

Income (Loss)  per share             $        .01        $       (.03)          $       (.03)        $      ( .01)
=================================================================================================================

See Accompanying Notes to Financial Statements.


</TABLE>


<TABLE>
<CAPTION>

Balance Sheets

 (Dollar amounts rounded to hundreds)
                                                                September 30, 1997              December 31, 1996
                                                                ------------------              -----------------
                                                                     (Unaudited)
<S>                                                             <C>                             <C>
Assets
------
     Current Assets:               
     Cash                                                        $    683,300                    $   427,900
     Accounts receivable-trade                                      1,773,400                      2,091,000
     Inventories (Note 5)                                           1,589,200                      1,662,400
     Prepaid expenses                                                 280,700                        263,700
     Other current assets                                              45,700                         57,900
     -------------------------------------------------------------------------------------------------------
     Total Current Assets                                           4,372,300                      4,502,900
     -------------------------------------------------------------------------------------------------------
     Property, plant and equipment
       less accumulated depreciation of
       $11,489,900 and $10,986,100                                  4,683,600                      4,775,000
     Deferred costs and other assets                                   56,000                         56,000
     -------------------------------------------------------------------------------------------------------
Total Assets                                                      $ 9,111,900                    $ 9,333,900
============================================================================================================

Liabilities and
---------------
Stockholders' Equity 
--------------------
Current Liabilities:                             
     Accounts payable                                             $   325,700                    $   563,500
     Accrued compensation                                              16,400                         73,100
     Other accrued liabilities                                        453,600                        243,800
     Short-term bank borrowings                                        60,000                         60,000
     -------------------------------------------------------------------------------------------------------
     Total Current Liabilities                                        855,700                        940,400
     -------------------------------------------------------------------------------------------------------
     Promissory Notes to affiliated party (Note 3)                  1,571,600                              -
     Accrued interest to affiliated party (Notes 3)                         -                        491,600
     Long-term notes payable to affiliated party (Notes 3)                  -                      1,080,000
     Long term bank borrowings                                        373,700                        111,700 
     Accrued pension liability                                        306,400                        353,400
Stockholders' Equity 
     Preferred stock, par value $1 per share
       authorized - 10,000,000 shares;  5,400,000 
       shares issued and outstanding                                5,400,000                      5,400,000
      Common stock, par value $1 per share
       authorized - 15,000,000 shares; 8,293,366 shares        
       issued and outstanding in 1997 and 1996                      8,293,400                      8,293,400
     Less:  Treasury stock (at cost) - 500 shares                        (500)                          (500)
     Capital in excess of par value                                 7,316,000                      7,316,000 
     Accumulated deficit                                          (14,922,300)                   (14,570,000)
     Additional minimum pension liability                             (82,100)                       (82,100) 
     -------------------------------------------------------------------------------------------------------

     Total Stockholders' Equity                                     6,004,500                      6,356,800
     -------------------------------------------------------------------------------------------------------

Total Liabilities and 
Stockholders' Equity                                              $ 9,111,900                    $ 9,333,900
============================================================================================================

See accompanying Notes to Financial Statements.


</TABLE>



<TABLE>
<CAPTION>


Statements of Cash Flows

For The Nine Months Ended September 30, 1997 and 1996
(Unaudited)

(Dollar amounts rounded to hundreds)


                                                                        1997                          1996
                                                                        ----------------------------------
<S>                                                                  <C>                             <C>
Cash Flow From Operating Activities:
     Net (Loss) Income                                            $  (352,300)                   $  (175,100)
Adjustments to reconcile net income to
     net cash provided by operating activities:
     Depreciation                                                     503,800                        630,000
  
Increase (decrease) from changes in:
     Accounts receivable-trade                                        317,600                       (438,500)
     Inventories                                                       73,200                        142,400 
     Prepaid expenses                                                 (17,000)                       (92,600) 
     Other current assets                                              12,200                        (34,000) 
     Accounts payable                                                (237,800)                       128,100
     Accrued compensation                                             (56,700)                        30,300
      Deferred Income                                                       -                        175,000 
     Other liabilities                                                162,800                         52,600
     -------------------------------------------------------------------------------------------------------
Cash Flow Provided By Operating Activities                            405,800                        418,200 
------------------------------------------------------------------------------------------------------------

Cash Flow (Used In) Investing Activities:
     Capital expenditures                                            (412,400)                      (362,000) 
     -------------------------------------------------------------------------------------------------------
     Net Cash Used in Investing Activities                           (412,400)                      (362,000) 
     -------------------------------------------------------------------------------------------------------

Cash Flow From (Used In) Financing Activities:
     Capitalized lease obligations                                          -                        (83,600)
     Bank borrowings                                                  262,000                              -
     -------------------------------------------------------------------------------------------------------
     Net Cash Provided By (Used In) Financing Activities              262,000                        (83,600) 
     -------------------------------------------------------------------------------------------------------

Increase (Decrease) in Cash                                           255,400                        (27,400) 

Cash at Beginning of Period                                           427,900                        432,800
------------------------------------------------------------------------------------------------------------

Cash at End of Period                                             $   683,300                    $   405,400
============================================================================================================

Supplemental Disclosure of Cash Flow Information:

Interest paid                                                     $    62,400                    $    61,700
                                                                       ======                         ======
Income taxes paid                                                 $         -                    $         -
                                                                       ======                         ======

See accompanying Notes to Financial Statements.


</TABLE>


FAIRMOUNT CHEMICAL CO., INC.
----------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
September 30, 1997
------------------

Note 1.  Summary of Significant Accounting Policies
         ------------------------------------------

ORGANIZATION

     The accompanying financial statements, which should be read in 
conjunction with the financial statements of Fairmount Chemical Co., 
Inc. ("the Company") included in the 1996 Annual Report filed on Form 
10-KSB, are unaudited but have been prepared in the ordinary course of 
business for the purpose of providing information with respect to the 
interim period.  The Company believes that all adjustments necessary 
for a fair presentation for such periods have been included.

REVENUE

     Revenue is recognized on the date of invoice to a customer 
(invoices are prepared on or after the date of shipment).

INCOME TAXES

     The Company accounts for income taxes in accordance with the 
Statement of Financial Accounting Standards No. 109, "Accounting for 
Income Taxes."  Under the asset and liability method of Statement 109, 
deferred tax assets and liabilities are recognized for the future tax 
consequences attributable to differences between the financial 
statement carrying amounts of existing assets and liabilities and 
their respective tax bases and operating loss and tax credit 
carryforwards.  Deferred tax assets and liabilities are measured using 
enacted tax rates expected to apply to taxable income in the years in 
which those temporary differences are expected to be recovered or 
settled.

FINANCIAL STATEMENTS

     The statements of income and accumulated deficit for the three 
months and nine months ended September 30, 1997 and 1996, the 
statements of cash flows for the nine months ended September 30, 1997 
and 1996, and the balance sheet as of September 30, 1997 are 
unaudited.  The balance sheet as of December 31, 1996 is audited. 



Note 2.  Income (Loss) Per Share
         -----------------------

     Net income per share is based on earnings divided by the weighted 
average number of shares of common stock outstanding adjusted for 
dilutive common stock equivalents.  Common stock equivalents include 
shares outstanding under stock option plans and preferred stock, as 
converted to common stock in the ratio of one-to-one.  At September 
30, 1997 and 1996 the share base was 13,693,366 respectively.



Note 3.  Long Term Debt To Affiliated Parties
         ------------------------------------

     A.  As of January 1, 1993 the Company owed William E. Leistner 
$5,603,700 (The "Leistner Loan").  At the Board of Directors Meeting 
following the 1993 Annual Meeting, the board approved the sale of 
5,400,000 shares of cumulative convertible Preferred Stock, $1.00 par 
value per share, in a private transaction to Leistner, the Company's 
principal stockholder, in consideration of retirement of debt owed to 
Leistner of $5,400,000.  The balance of the Leistner Loan was paid out 
of corporate funds of approximately $203,700 during May, 1993.  This 
transaction retired the principal of the Leistner Loan.  Accrued 
interest of $491,600 remained.  On July 2, 1997 the Company replaced 
the $491,600 balance of the Leistner Loan, that was due April 1, 1998, 
with a promissory note to the Leistner Estate for the same amount, due 
January 1, 2005. 

     B.  On March 20, 1992, a Credit Facility Loan Agreement ("Credit 
Facility") was created with monies contributed to a fund ("the Fund") 
by William E. Leistner and the Estate of Olga H. Knoepke.  At that 
date, the Fund provided the Company with a $2,494,000 credit facility 
under which all borrowings paid interest at the rate of 5% per annum.  
The outstanding borrowings from the Credit Facility were $1,080,000.  
On July 2, 1997 the Credit Facility was terminated and the Company 
replaced the $1,080,000 of credit facility borrowings with new 
promissory notes due January 1, 2005.  The Leistner Estate received a 
note for $648,000.  Three notes were issued to beneficiaries of the 
Knoepke Estate.  These three notes were issued to the da Mota Family 
Partnership - $224,640, Glen da Mota - $142,560 and Lynn da Mota - 
$64,800.
                              
     All of the promissory notes described above have similar terms 
and conditions.  Interest on the unpaid principal from January 1, 1997 
through December 31, 1997 is at the rate of 6% per annum.  Interest 
payable from January 1, 1998 through December 31, 1998 is at the rate 
of 7% per annum.  Interest payable thereafter commencing with 1999, is 
at the corporate base rate posted by Citibank, N.A. (or its successor) 
on the last banking day of the previous calendar year.  All of the 
promissory notes are subordinated to the Company's line of credit 
financing with Summit Bank and are collaterized by security agreements 
on the Company's accounts receivables, inventories and personal 
property.

     The promissory note to the Leistner Estate for $491,600 is 
subordinated to the Company's line of credit financing with Summit 
Bank and to the new promissory notes, totaling $1,080,000, that 
replaced the Credit Facility.  The Credit Facility has been 
terminated.



Note 4.  Majority Stockholder
         --------------------
   
     The Estate of William E. Leistner owns approximately 57.8% of 
the common stock of the Company.  The estate also owns all 5,400,000 
outstanding shares of the cumulative convertible preferred stock.



Note 5.  Inventory
         ---------

     Inventories at  September 30, 1997 and December 31, 1996 
consisted of the following:

                            September 30, 1997       December 31, 1996
                            ------------------       -----------------
            Finished Goods  $   1,337,300            $   1,455,100
            Raw Material          252,000                  207,300
                                  -------                  -------
                            $   1,589,300            $   1,662,400
                                =========                =========



Note 6.  Contingencies
         -------------

     The Company has received notice from the New Jersey Department of 
Environmental Protection ("NJDEP") that the NJDEP is investigating 
whether any material from the Company has caused or contributed to the 
contamination detected at the Ciuba landfill property in Newark.  The 
NJDEP alleges that there is a possibility that during the 1970's the 
Company disposed of waste generated at the Company's facility through 
contracts with certain garbage removal companies located at the Ciuba 
landfill.  The Company has also received notice from the United States 
Environmental Protection Agency ("USEPA") that the USEPA has 
information indicating that hazardous substances from the Company may 
have been discharged into the Passaic River.  It is the Company's 
understanding that these allegations by the EPA are related to 
historical rather than present events.  The Company has taken the 
position that its material neither caused nor contributed to the 
contamination of the Passaic River and that it has not discharged 
hazardous substances into the Passaic River.  In both bases, it is 
possible that potentially responsible parties will bring claims 
against Fairmount alleging that it is at least partially responsible 
for the contamination.

     During the second quarter of 1997, the Company received notice of 
two claims for personal injuries to individuals working at a location 
adjacent to the Company's property.  The injuries were allegedly 
sustained as a result of the March 25 explosion on the Company's 
property.  The Company has not received details as to the extent of 
the injuries or for a dollar value of the claims.  



Note 7.    Subsequent Event
           ----------------

     On  October 9, 1997  the executors of the Leistner Estate 
endorsed two promissory notes of $648,000 and $491,600 (see Note 3) to 
the order of the Howard Leistner, Hedi Mizrack and Gilbert Leistner 
Irrevocable Grantor Trust (the"Trust").  This trust was established to 
expedite the settlement of the Leistner Estate and to be the 
repository of the common and preferred shares of Fairmount, as well as 
the promissory notes held by the Leistner Estate..  The transfer of 
the common and preferred Fairmount shares have not yet been executed.



FAIRMOUNT CHEMICAL CO., INC.
----------------------------

MANAGEMENT'S DISCUSSION AND
----------------------------
ANALYSIS OF FINANCIAL CONDITION AND
-----------------------------------
RESULTS OF OPERATIONS
---------------------
September 30, 1997
------------------

Liquidity and Capital Resources
-------------------------------

     To meet its liquidity requirements, including its capital 
program, the Company accesses funds generated from operations, its 
available cash balances and its bank line of credit.

     The Company's working capital decreased $46,000 for the first 
nine months of 1997 compared to a increase of $67,800 for the same 
period in 1996.  The decrease was primarily due to lower accounts 
receivable, lower inventories and to a liability reserve for 
restructuring charges; partially offset by lower accounts payable, and 
higher cash balances.  The lower accounts receivable and higher cash 
balances were due to the receipt of large foreign receivables in 
September.

     The Company's capital expenditures in 1997 have been for the 
purchase and installation of production equipment and storage tanks.

Results of Operations
---------------------

     Net sales for the first nine months of 1997 were $9,068,000, a 
decrease of $325,400 or 3.5% versus the same period in 1996.  The 
decrease was primarily due to a decrease in sales volumes of 
photographic chemicals - $1,098,200 and lower prices for polymer 
additives - $9,700; partially offset by higher volumes of hydrazine 
and derivatives - $455,500, hydrazine blends - $169,700 and specialty 
chemicals - $157,300.  Net sales for the three months ended September 
30, 1997 were $2,471,000, a decrease of $355,100 or 12.6%.  The 
decrease in net sales were due to lower volumes of photographic 
chemicals - $344,000, coupled with lower volumes and prices of polymer 
additives - $306,900 and lower volumes of specialty chemicals - $400; 
partially offset by increased volumes of hydrazine blends - $191,700 
and hydrazine derivatives - $104,500.

          The gross profit for the first nine months of 1997 decreased 
$21,000 or 1.3% versus the same period in 1996.  The decrease was due 
to the lower sales volume of photographic chemicals coupled with lower 
margins of polymer additives; partially offset by higher volumes of 
hydrazine derivatives and hydrazine blends, coupled with lower 
manufacturing expenses.  The gross profit for the third quarter of 
1997 increased $518,600 versus the third quarter of 1996.  The 
increase was due to higher volumes of hydrazine blends and hydrazine 
derivatives, coupled with improved margins due to lower manufacturing 
expenses; partially offset by lower volumes of photographic chemicals 
and polymer additives.



Management's Discussion and Analysis of Financial Condition and 
---------------------------------------------------------------
Results of Operations (Cont'd)
-----------------------------

     Research, selling, general and administrative expenses for the 
nine months ended September 30, 1997 decreased $72,200 or 3.9% versus 
the same period in 1996.  Research, selling and general and 
administrative expenses for the three months ended September 30, 1997 
decreased $17,700 or 2.9% versus the same period in 1996.  The 
decreases in the two periods were due to the cost savings resulting 
from the restructuring in the second quarter of 1997.  During the 
third quarter of 1997 some of the cost savings were partially offset 
by expenses for waste removal and for an OSHA consultant.

     The nine months ending September 30, 1997 includes a $350,000 
restructuring charge incurred during the second quarter of 1997.  
During this quarter the Company's management conducted a review of 
operations and of the financial condition of the Company and concluded 
that it was necessary to implement a restructuring of the 
organization.  As a result, in May, the Company reduced the workforce 
by eighteen salaried and hourly employees.  The Company also decided 
to discontinue the manufacturing of a number of small volume products 
that were no longer profitable to produce.  Also included in the nine 
months ending September 30, 1997 is $200,000 for an advance on an 
insurance claim for the March 25, 1997 explosion that destroyed a 
building and the equipment within. No employees were injured.  The 
Company expects the final settlement of this claim to substantially 
exceed this advance and the Company believes an additional piece of 
the settlement should be received by the end of 1997 or early in 1998.

     Other income for the nine months ended September 30, 1997 was 
lower versus 1996 due to higher custom duty refunds in 1996.  The 
refunds are for customs duty paid on imported raw materials which are 
converted to finished products and subsequently exported.

     At the Board of Directors meeting held on September 5,1997 the 
board elected three new outside directors, Howard R. Leistner, Richard 
Mizrack and Dr. Reidar Halle.  At the meeting, the resignation of 
board member Leonard T. Wood was accepted.  Remaining on the board are 
Todd K. Walker, Chairman, Chief Executive Oficer and President and 
James F. Gilday, Corporate Secretary and Chief Financial Officer.



PART II - OTHER INFORMATION


Reports on Form 8-K


No reports have been filed on Form 8-K during this quarter.




FAIRMOUNT CHEMICAL CO., INC.
----------------------------

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.



                              FAIRMOUNT CHEMICAL CO., INC.
                              ----------------------------
                                        Registrant



November 14, 1997             S/Todd K. Walker
-----------------             ----------------------------
Date                          Todd K. Walker
                              Chairman of the Board,
                              Chief Executive Officer
                              


November 14, 1997             S/James F. Gilday
-----------------             ----------------------------
Date                          James F. Gilday
                              Chief Financial Officer &
                              Secretary





1