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

                             FORM 10-K
(Mark One)                                            
[x]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) 
OF THE SECURITIES EXCHANGE ACT OF 1934    
For the fiscal year ended  December 31, 1998                  	   		
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 
15(D) OF THE SECURITIES EXCHANGE ACT  OF 1934   
For the transition period from _________ to _________.

Commission file number   1-12043

FAHNESTOCK VINER HOLDINGS INC.
(Exact name of registrant as specified in its charter)

   Ontario, Canada                           98-0080034
  (State or other jurisdiction of            (I.R.S. Employer
  incorporation or organization)             Identification No.)

  P.O. Box 2015, Suite 1110
  20 Eglinton Avenue West
  Toronto, Ontario, Canada                   M4R 1K8
  (Address of principal executive offices)   (Zip Code)

  Registrant's Telephone number, including area code: 
(416) 322-1515

  Securities registered pursuant to Section 12(b) of the Act:
                                             Name of each exchange
  Title of each class                        on which registered          
  Class A non-voting shares                  New York Stock Exchange

  Securities registered pursuant to Section 12(g) of the Act:
  Title of each class
  Not Applicable

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 by check mark if disclosure of delinquent filers pursuant to 
Item 405 of Regulation S-K  is not contained herein, and will not be 
contained, to the best of the registrant's knowledge, in definitive 
proxy or information statements incorporated by reference in Part III 
of this Form 10-K or any amendment to this Form 10-K. [ ]

The aggregate market value of the voting stock of the Company held 
by non-affiliates of the Company cannot be calculated because no 
class of voting stock of the Company is publicly traded. The 
aggregate market value of the Class A non-voting shares held by 
non-affiliates of the Company at December  31, 1998 was 
$214,222,000.

The number of shares of the Company's Class A non-voting shares 
and Class B voting shares (being the only classes of common stock 
of the Company), outstanding on February 28, 1999 was 12,489,819 
and 99,680 shares, respectively.


TABLE OF CONTENTS      
Item Number                                                 Page
PART 1
1.Business                                                   1
2.Properties                                                12
3.Legal Proceedings                                         12
4.Submission of Matters to a Vote of  Security Holders      13

PART II
5.Market for the Registrant's Common Equity and Related 
Stockholder Matters                                         13
6.Selected Financial Data                                   16
7.Management's Discussion and Analysis of Financial 
Condition and Results of Operations                         17
7a.Quantitative and Qualitative Disclosures 
About Market Risk                                           23
8.Financial Statements and Supplementary Data               25
9.Changes in and Disagreements with Accountants 
and Financial Disclosure                                    25

PART III
10.Directors and Executive Officers of the Registrant       25
11.Executive Compensation                                   27
12.Security Ownership of Certain Beneficial Owners and 
Management                                                  31
13.Certain Relationships and Related Transactions           32

PART IV
14.Exhibits, Financial Statement Schedules, and Reports 
on Form 8-K                                                 33

Signatures                                                  34

PART I
Item 1. BUSINESS

Fahnestock Viner Holdings Inc., formerly called E.A. Viner 
Holdings Limited and immediately prior to that called Goldale 
Investments Limited (the "Company"), maintains its registered office 
and principal place of business at 20 Eglinton Avenue West, Suite 
1110, Toronto, Ontario M4R 1K8 and its telephone number is (416) 
322-1515.

The Company was originally incorporated under the laws of British 
Columbia. Pursuant to Certificate and Articles of Continuation 
effective October 12, 1977, the Company's legal existence was 
continued under the Business Corporation Act (Ontario) as if it had
been incorporated as an Ontario corporation.

The Company is a holding company and carries on no active 
business. It owns, directly or through intermediate subsidiaries, 
Fahnestock & Co., Inc. (formerly Edward A. Viner & Co., Inc.), a 
New York corporation ("Fahnestock"), Freedom Investments, Inc., a 
Delaware corporation ("Freedom"), Hudson Capital Advisors Inc., a 
New York corporation ("Hudson Capital") and, since July 1997,  
First of Michigan Corporation, a Michigan corporation ("FOM") and 
since October 1998, Evanston Financial Corporation, Inc..  Pursuant 
to a purchase agreement dated December 1, 1998, all of FOM's 
registered personnel and customer accounts were transferred to 
Fahnestock on January 1, 1999 and certain assets and liabilities were 
transferred to Fahnestock on December 31, 1998. FOM filed to 
withdraw their registration as a broker-dealer with the New York 
Stock Exchange on January 6, 1999. FOM will operate as a division 
of Fahnestock. Fahnestock, Freedom, FOM, Evanston and Hudson 
Capital are sometimes collectively referred to as the "Operating 
Subsidiaries". Through the  Operating Subsidiaries, the Company is 
engaged in the securities brokerage and trading business and offers 
investment advisory and other related financial services. Fahnestock 
(and FOM until January 2, 1999) are the principal Operating 
Subsidiaries. Fahnestock is engaged in the securities brokerage 
business in the United States and, through the agency of local 
licensed broker-dealers, Fahnestock operates offices in Buenos 
Aires, Argentina and Caracas, Venezuela. Hudson Capital is 
engaged in the investment advisory business in the United States. 

In October 1998, E.A. Viner International Co. formed Evanston 
Financial Corporation, Inc. as a mortgage banker specializing in 
refinancing and re-marketing of mortgages on subsidized health-care 
and nursing home facilities. Evanston is readying its application to 
the Federal Home Administration to acquire a federal home loan 
license. 

On July 17, 1997, a subsidiary of Fahnestock acquired 
approximately 99.4% of the outstanding common stock of First of 
Michigan Capital Corporation ("FOMCC") by way of a US$15.00 
per share cash tender offer. On July 31, 1997, the Company acquired 
the remaining outstanding shares pursuant to a back-end "short-
form" merger of the Company's subsidiary with and into FOMCC. 
The total purchase price was $37,609,000. The acquisition was 
accounted for by the purchase method. 

At December 31, 1998, Fahnestock and FOM together employed 
694 full-time registered representatives and 607 employees in 
trading, research, investment banking, investment advisory services, 
public finance and support positions for Fahnestock's 45 offices in 
the United States, FOM's 25 offices (all of which are located in 
Michigan) and for Freedom in its offices in Omaha, Nebraska. 
Fahnestock, FOM and Freedom are broker-dealers registered with 
the Securities and Exchange Commission (the "SEC") and in all 
other jurisdictions where their respective businesses requires 
registration. Fahnestock, in addition to its United States operations, 
conducts business in Caracas and Buenos Aires through local 
broker-dealers who are licensed under the laws of Venezuela and 
Argentina, respectively.

The Operating Subsidiaries are collectively engaged in a broad range 
of activities in the securities brokerage business, including retail 
securities brokerage, institutional sales, bond trading and investment 
banking - offering both corporate and public finance services, 
underwriting, research, market making and investment advisory and 
asset management services. No material part of the Company's 
revenues, taken as a whole, are derived from a single customer or 
group of customers.

Fahnestock, FOM and Freedom are members of the New York Stock 
Exchange, Inc. ("NYSE") and the National Association of Securities 
Dealers, Inc. ("NASD"); and Fahnestock and FOM are members of 
the American Stock Exchange, Inc. ("AMEX"), the Chicago Stock 
Exchange Incorporated ("CSE"), the Chicago Board Options 
Exchange, Inc. ("CBOE"), the Philadelphia Stock Exchange, Inc. 
("PHLX"), the New York Futures Exchange, Inc. ("NYFE"), the 
National Futures Association ("NFA") and the Securities Industry 
Association ("SIA"). In addition, Fahnestock has satisfied the 
requirements of the Municipal Securities Rulemaking Board 
("MSRB") for effecting customer transactions in municipal 
securities.

Fahnestock, which acts as a clearing broker for FOM and Freedom, 
is also a member of the Securities Investor Protection Corporation 
("SIPC"), which provides, in the event of the liquidation of a broker-
dealer, protection for customers' accounts (including the customer 
accounts of other securities firms when it acts on their behalf as a 
clearing broker) held by the firm of up to $500,000 for each 
customer, subject to a limitation of $100,000 for claims for cash 
balances. SIPC is funded through assessments on registered broker-
dealers which may not exceed 1% of a broker-dealer's gross 
revenues (as defined); SIPC assessments were a flat fee of $150  in 
1997 and in 1996 and 1995 was 0.095% of the adjusted combined 
gross revenues of Fahnestock and Freedom  (and until July, 1995, 
Pace Securities Inc.). In addition, Fahnestock has purchased 
protection from Aetna Casualty and Surety Company of an 
additional $9,500,000 per customer. Upon request, Fahnestock, at 
the customer's expense, will obtain additional protection for a 
customer whose securities account is in excess of $10,000,000.

The following table sets forth the amount and percentage of the 
Company's revenues from each principal source for the periods 
indicated and includes the consolidated revenues of FOMCC from 
July 17, 1997, the date of its acquisition.



                                 Year ended December 31,
                          1998   %       1997   %      1996   %
                        (Dollars in thousands, except percentages)

Commissions           $114,889  49%  $103,323  43%  $73,992  35%
Principal 
  transactions, net     32,727  14%    65,972  27%   80,508  38%
Interest                42,028  18%    40,123  17%   32,981  15%
Underwriting fees       12,655   6%    11,042   4%    8,672   4%
Advisory fees           21,742   9%    15,808   7%   14,189   6%
Other                    8,740   4%     5,890   2%    3,646   2%

Total revenues        $232,781 100%  $242,158 100% $213,988 100%

The Company derives most of its revenues from the operations of its 
principal subsidiaries, Fahnestock and FOM. Although maintained 
as separate entities, because Fahnestock acts as clearing broker in 
transactions initiated by FOM and Freedom, the operations of the 
Company's brokerage subsidiaries are closely related. Except as 
expressly otherwise stated, the discussion below pertains to the 
operations of Fahnestock.

COMMISSIONS
A significant portion of Fahnestock's and FOM's revenues is derived 
from commissions from retail and, to a lesser extent, institutional 
customers on brokerage transactions in exchange-listed and over-the-
counter corporate equity and debt securities. Brokerage commissions 
are charged on both exchange and over-the-counter transactions in 
accordance with a schedule which Fahnestock has formulated. In 
certain cases, discounts are granted to customers, generally on large 
trades or to active customers. Fahnestock and FOM also provide a 
range of services in other financial products to retail and institutional 
customers, including the purchase and sale of options on the CBOE, 
the AMEX and other stock exchanges as well as futures on indexes 
listed on various exchanges.

Commission business relies heavily on the services of account 
executives with good sales production records. Competition among 
securities firms for such personnel is intense. Retail clients' accounts 
are serviced by retail account executives (excluding the institutional 
account executives referred to below) in Fahnestock's and FOM's 
offices. Fahnestock's and FOM's institutional clients, which include 
mutual funds, banks, insurance companies, and pension and profit-
sharing funds, are serviced by institutional brokers. (For a discussion 
of regulatory matters, see "Regulation".) The institutional 
department is supported by the research department which provides 
coverage of a number of commercial and industrial as well as 
emerging growth companies and special situation investments. 

Securities Clearance Activities
Fahnestock provides a full range of securities clearance services to 
five non-affiliated securities firms on a fully-disclosed basis. In 
addition to commissions and service charges, Fahnestock derives 
substantial interest revenue from its securities clearing activities. See 
"Interest" and "Securities Borrowed And Loaned." In most cases, 
Fahnestock provides margin financing for the clients of the securities 
firms for which it clears, with the securities firms guaranteeing the 
accounts of their clients. Fahnestock also extends margin credit 
directly to its correspondent firms to the extent that such firms hold 
securities positions for their own account. Because Fahnestock must 
rely on the guarantees and general credit of its correspondent firms, 
Fahnestock may be exposed to significant risks of loss if any of its 
correspondents or its correspondents' customers are unable to meet 
their respective financial commitments. See "Risk Management."

The correspondent clearing procedure for fully-disclosed accounts 
involves a series of steps: The correspondent broker opens an 
account for its customer and takes the customer's order for the 
purchase and sale of securities. The order is then executed by the 
correspondent firm or Fahnestock. Fahnestock completes the 
transaction by taking possession of the customer's cash, if securities 
are being purchased, or certificates, if securities are being sold, 
lending the customer any amounts required if the purchase is being 
made on margin, and making delivery to the broker for the other 
party to the transaction. Fahnestock or the correspondent sends the 
customer a written confirmation containing the details of each 
transaction the day after it is executed, and Fahnestock sends each 
customer a monthly statement for the entire account. The execution, 
clearance, settlement, receipt, delivery and record-keeping functions 
involved in the clearing process require the performance of a series 
of complex steps, many of which are accomplished with data 
processing equipment.

In addition to executing trades, Fahnestock also provides other 
services to its correspondents, including performance of accounting 
functions, provision of office services, custody of securities and 
compliance with regulatory requirements. The responsibilities 
arising out of Fahnestock's clearing relationships are allocated 
pursuant to agreements with its correspondents. To the extent that 
the correspondent broker has financial resources available, this 
allocation of responsibilities protects Fahnestock against claims by 
customers of correspondent brokers where the responsibility for the 
function giving rise to a claim has been allocated to the 
correspondent broker. If the correspondent is unable to meet its 
obligations to its customers, however, dissatisfied customers may 
attempt to obtain recovery from Fahnestock.

Floor Brokerage
In addition to transactions in which Fahnestock executes transactions 
for itself or its own customers, Fahnestock acts as agent for the 
accounts of other brokers. With its memberships on the various 
exchanges, Fahnestock attempts to utilize excess execution capacity 
by executing orders for other brokerage firms. Fahnestock bills such 
other firms at prevailing rates which are set on a basis competitive 
with rates charged by other brokerage firms performing similar 
functions.

PRINCIPAL TRANASACTIONS
Market-Making
Fahnestock acts as both principal and as agent in the execution of its 
customers' orders in the over-the-counter market. Fahnestock buys, 
sells and maintains an inventory of a security in order to "make a 
market" in that security. (To "make a market" in a security is to 
maintain firm bid and offer prices by standing ready to buy or sell 
round lots at publicly quoted prices. In order to make a market it is 
necessary to commit capital to buy, sell and maintain an inventory of 
a security.) As of December 31, 1998, Fahnestock made 
approximately 1,500 dealer markets in the common stock or other 
equity securities of corporate issuers. In executing customer orders 
for over-the-counter securities in which it does not make a market, 
Fahnestock generally charges a commission and acts as agent or will 
act as principal by marking the security up or down in a riskless 
transaction, working with another firm which is a market-maker 
acting as principal. However, when the buy or sell order is in a 
security in which Fahnestock makes a market, Fahnestock normally 
acts as principal and purchases from or sells to its customers at a 
price which is approximately equal to the current inter-dealer market 
price plus or minus a mark-up or mark-down. The stocks in which 
Fahnestock makes a market also include those of issuers which are 
followed by Fahnestock's research department.

The U.S. Justice Department and the SEC have completed an 
investigation of industry over-the-counter trading practices. As a 
result of the investigation, the SEC issued "The 21a Report" 
detailing industry practices, some of which were deemed anti-
competitive. The SEC has effected a "Firm Quote Rule", an "Order 
Exposure Rule" and a "Best Execution Interpretation" (the "Rules"), 
all of which are intended to correct the aforementioned practices and 
offer public customers better executions. The Rules became effective 
on January 10, 1997 and have negatively impacted the day to day 
profitability of Fahnestock's OTC trading department. The impact of 
the Rules has been to narrow the spread (the difference between the 
bid and ask prices) on virtually all of the securities in which 
Fahnestock makes markets, thus reducing potential profitability in 
day to day transactions.

Trading profits or losses depend on (i) the skills of those employees 
engaged in market-making activities, (ii) the capital allocated to 
holding positions in securities and (iii) the general trend of prices in 
the securities markets. Trading as principal requires the commitment 
of capital and creates an opportunity for profits or an exposure to risk 
of loss due to market fluctuations. Fahnestock takes both long and 
short positions in those securities in which it makes a market.

The size of its securities positions on any one day may not be 
representative of Fahnestock's exposure on any other day because 
securities positions vary substantially based upon economic and 
market conditions, allocations of capital, underwriting commitments 
and trading volume. Also, the aggregate value of inventories of 
stocks which Fahnestock may carry is limited by the Net Capital 
Rule. See "Net Capital Requirements" and Item 7, "Management's 
Discussion and Analysis of Financial Condition and Results of 
Operations -- Liquidity and Capital Resources."

To a lesser extent, Fahnestock also buys and sells municipal bonds, 
Ginnie Maes, Unit Investment Trusts and U.S. Treasury Securities as 
well as other fixed income securities for its own account in the 
secondary market and maintains an inventory of municipal bonds 
and other securities and resells bonds from its inventory to dealers as 
well as to institutional and retail customers.

Other Trading Activities
Fahnestock and FOM hold positions in their trading accounts in 
over-the-counter securities and in exchange-listed securities in which 
they do not make a market, and may engage from time to time in 
other types of principal transactions in securities. Fahnestock has 
several trading departments including: a convertible bond 
department, a risk arbitrage department, a corporate bond dealer 
department, a municipal bond department, a government/mortgage 
backed securities department, a department that underwrites and 
trades U.S. government agency issues and a department that trades 
high yield securities (commonly referred to as "junk bonds"). FOM 
has several trading departments including: over-the-counter equities, 
taxable corporate bonds, municipal bonds, UITs and US government 
bonds. These departments continually purchase and sell securities 
and make markets in order to make a profit on the inter-dealer 
spread. Although Fahnestock and FOM from time to time holds an 
inventory of securities, more typically, they seek to match customer 
buy and sell orders. Fahnestock and FOM do not carry "bridge 
loans" (i.e., short-term loans made in anticipation of intermediate-
term or long-term financing). No substantial losses relating to 
Fahnestock's risk arbitrage activities have been incurred.

Investment Income
Dividends and interest earned on securities held in inventory are 
treated as investment income.

Principal transactions, including market-making and other trading 
and investment activities, accounted for approximately 14%, 27% 
and 38%, respectively, of the Company's total revenues for the fiscal 
years ended December 31, 1998, 1997 and 1996, respectively.

Risk Management
Fahnestock's and FOM's principal transactions and brokerage 
activities expose them to credit and market risks. When Fahnestock 
or FOM advances funds or securities to a counterparty in a principal 
transaction or to a customer in a brokered transaction, it is subject to 
the risk that the counterparty or customer will not repay such 
advances. If the market price of the securities purchased or loaned 
has declined or increased, respectively, Fahnestock or FOM may be 
unable to recover some or all of the value of the amount advanced. A 
similar risk is also present where a customer is unable to respond to a 
margin call and the market price of the collateral has dropped. In 
addition, Fahnestock's and FOM's securities positions are subject to 
fluctuations in market value and liquidity.

Fahnestock and FOM monitor market risks through daily profit and 
loss statements and position reports. Each trading department 
adheres to internal position limits determined by senior management 
and regularly reviews the age and composition of its proprietary 
accounts. Positions and profits and losses of each trading department 
are reported to senior management on a daily basis. Fahnestock or 
FOM may from time to time attempt to reduce market risk through 
the utilization of various derivative securities as a hedge to market 
exposure. 

In its market-making activities, Fahnestock must provide liquidity in 
the equities for which it makes markets. This may require 
Fahnestock to position itself for the inevitable reversal in the market, 
however temporary that reversal may be. In the fourth quarter of 
1998, the recovery of the Internet sector from the October lows was 
unprecedented with some stocks tripling in value over a few weeks. 
Fahnestock misjudged the momentum of this rally and was slow to 
take losses, waiting for the reversal that historically should have 
occurred. In a few trading days,  the firm's positions became 
outsized, causing the firm to sustain significant and unrecoverable 
losses over a few days. As a result of this event, Fahnestock has re-
evaluated its risk management policies and has put into place risk 
containment policies to limit position size and to 	monitor 
transactions on a minute-to-minute basis.  The newly strengthened 
risk management policies also limit market-making activities 
entirely in securities that are the focus of day traders acting through 
on-line brokers and those where valuations and price volatility 
exceed certain predetermined boundaries.

In addition to monitoring the credit worthiness of its customers, 
Fahnestock imposes more conservative margin requirements than 
those of the NYSE. Generally, Fahnestock limits customer loans to 
an amount not greater than 65% of the value of the securities (or 
50% if the securities in the account are concentrated in a limited 
number of issues). In comparison, the NYSE permits loans of up to 
75% of the value of the securities in a customer's account.

For further discussion of risk management, see Item 7a, Quantitative 
and Qualitative Disclosures about Market Risk.

INTEREST
Fahnestock derives net interest income from the financing of 
customer margin loans and its securities lending activities. See 
"Customer Financing" and "Securities Borrowed and Loaned."

Customer Financing
Customers' securities transactions are effected on either a cash or 
margin basis. In margin transactions, Fahnestock extends credit to 
the customer, collateralized by securities and/or cash in the 
customer's account, for a portion of the purchase price, and receives 
income from interest charged on such extensions of credit. The 
customer is charged for such margin financing at interest rates based 
upon the brokers call rate (the prevailing interest rate charged by 
banks on collateralized loans to broker-dealers), to which is added an 
additional amount of up to 2%.

In each of the last five years, financing activities conducted on behalf 
of its customers have provided Fahnestock with a substantial source 
of revenue. A substantial portion of these financing activities are 
undertaken in connection with Fahnestock's securities clearance 
business and its own retail business. See "Commissions." The 
amount of Fahnestock's interest revenue is affected by the volume of 
customer borrowing and by prevailing interest rates.

The primary source of funds to finance customers' margin account 
borrowings are collateralized and uncollateralized bank borrowings, 
funds generated by lending securities on a cash collateral basis in 
excess of the amount of securities borrowed and free credit balances 
in customers' accounts. Free credit balances in customers' accounts, 
to the extent not required to be segregated pursuant to SEC rules, 
may be used in the conduct of Fahnestock's business, including the 
extension of margin credit. Subject to applicable regulations, interest 
is paid by Fahnestock on most, but not all, of such free credit 
balances awaiting reinvestment by customers. To the extent that the 
use of free credit balances reduces borrowings, interest expense is 
reduced.

Margin lending by Fahnestock is subject to the margin rules of the 
Board of Governors of the Federal Reserve System, NYSE margin 
requirements and Fahnestock's internal policies. By permitting 
customers to purchase on margin, Fahnestock takes the risk of a 
market decline that would reduce the value of its collateral below the 
customer's indebtedness before the collateral could be sold. Under 
applicable NYSE rules, in the event of a decline in the market value 
of the securities in a margin account, Fahnestock is obligated to 
require the customer to deposit additional securities or cash in the 
account so that at all times the loan to the customer for the purchase 
of marginable securities is no greater than 75% of the market value 
of such securities or cash in the account.

Securities Borrowed and Loaned
In connection with both its trading and brokerage activities, 
Fahnestock borrows securities to cover short sales and to complete 
transactions in which customers have failed to deliver securities by 
the required settlement date, and lends securities to other brokers and 
dealers for similar purposes. When borrowing securities, Fahnestock 
is required to deposit cash or other collateral, or to post a letter of 
credit with the lender and receives a rebate (based on the amount of 
cash deposited) or pays a fee calculated to yield a negotiated rate of 
return.

When lending securities, Fahnestock receives cash or similar 
collateral and generally pays a rebate (based on the amount of cash 
deposited) to the other party to the transaction. Transactions in which 
stocks are borrowed or loaned are generally executed pursuant to 
written agreements with counterparties which require that the 
securities borrowed be marked to market on a daily basis and that 
excess collateral be refunded or that additional collateral be 
furnished in the event of changes in the market value of the 
securities. Margin adjustments are usually made on a daily basis 
through the facilities of various clearing houses.

UNDERWRITING BUSINESS
Fahnestock and FOM manage the underwriting of both corporate 
and municipal securities including the securitization of corporate and 
other obligations, and participates as an underwriter in the syndicates 
of issues managed by other securities firms. The corporate finance 
department is responsible for originating and developing transactions 
which include underwriting, mergers and acquisitions, private 
placements, valuations, financial advisory work and other 
investment banking matters.

The management of and participation in public offerings involve 
significant risks. An underwriter may incur losses if it is unable to 
resell at a profit the securities it has purchased. Under federal and 
state securities and other laws, an underwriter is subject to 
substantial liability for misstatements or omissions that are judged to 
be material in prospectuses and other communications related to 
underwriting.

Underwriting commitments cause a charge against net capital. 
Consequently, the aggregate amount of underwriting commitments 
at any one time may be limited by the amount of net capital 
available. The Company derived 5% of its revenues from 
underwriting in 1998, 4% in both 1997 and 1996. See "Net Capital 
Requirements" and Item 7, "Management's Discussion and Analysis 
of Financial Condition and Results of Operations -- Liquidity and 
Capital Resources."

INVESTMENT ADVISORY BUSINESS
Hudson Capital  and Fahnestock (through its divisions Fahnestock 
Asset Management and Newbold Investment Advisory) provide 
investment advisory services for a fee to their respective clients. 
These equity and debt management service fees are based on the 
value of the portfolio under management. In addition to the 
management fee, transactions executed for such accounts may be 
effected at standard rates of commission or at discounts from 
Fahnestock's customary commission schedule.

At December 31, 1998 Fahnestock and Hudson Capital together had 
approximately $1.2 billion under management. The agreements 
under which the portfolios are managed on behalf of institutions and 
other investors generally provide for termination by either party at 
any time.
                    
ADMINISTRATION AND OPERATIONS
Administration and operations personnel are responsible for the 
processing of securities transactions; the receipt, identification and 
delivery of funds and securities; the maintenance of internal financial 
controls; accounting functions; custody of customers' securities; the 
handling of margin accounts for Fahnestock and its correspondents; 
and general office services. Fahnestock employs approximately 180 
persons in its administration and operations departments at its head 
office and approximately 110 people in its administration and 
operations departments in FOM's Detroit headquarters.
            
There is considerable fluctuation during any year and from year to 
year in the volume of transactions Fahnestock must process. 
Fahnestock records transactions and posts its books on a daily basis. 
Operations personnel monitor day-to-day operations to assure 
compliance with applicable laws, rules and regulations. Failure to 
keep current and accurate books and records can render Fahnestock 
liable for disciplinary action by governmental and self-regulatory 
organizations.

Fahnestock executes its own and certain of its correspondents' 
securities transactions on all United States exchanges of which it is a 
member and in the over-the-counter market. Fahnestock clears all of 
its securities transactions (i.e., it delivers securities that it has sold, 
receives securities that it has purchased and transfers related funds) 
through its own facilities and through memberships in various 
clearing corporations and custodian banks.

Fahnestock believes that its internal controls and safeguards are 
adequate, although fraud and misconduct by customers and 
employees and the possibility of theft of securities are risks inherent 
in the securities industry. As required by the NYSE and certain other 
authorities, Fahnestock carries a broker's blanket insurance bond 
covering loss or theft of securities, forgery of checks and drafts, 
embezzlement, fraud and misplacement of securities. This bond 
provides coverage of up to an aggregate of $15,000,000 with a self-
insurance retention of $100,000. 

COMPETITION
Fahnestock encounters intense competition in all aspects of the 
securities business and competes directly with other securities firms, 
a significant number of which have substantially greater resources 
and offer a wider range of financial services. In addition, there has 
recently been increasing competition from other sources, such as 
commercial banks, insurance companies and certain major 
corporations which have entered the securities industry through 
acquisition, and from other entities. Additionally, foreign-based 
securities firms and commercial banks regularly offer their services 
in performing a variety of investment banking functions including: 
merger and acquisition advice, leveraged buy-out financing, 
merchant banking, and bridge financing, all in direct competition 
with U.S. broker-dealers. These developments have led to the 
creation of a greater number of integrated financial services firms 
that may be able to compete more effectively than Fahnestock for 
investment funds by offering a greater range of financial services.

Fahnestock believes that the principal factors affecting competition 
in the securities industry are the quality and ability of professional 
personnel and relative prices of services and products offered. 
Fahnestock and its competitors employ advertising and direct 
solicitation of potential customers in order to increase business and 
furnish investment research publications in an effort to retain  
existing and attract potential clients. Many of Fahnestock's 
competitors engage in these programs more extensively than does 
Fahnestock.

There is substantial commission discounting by broker-dealers 
competing for institutional and retail brokerage business. The 
continuation of such discounting and an increase in the incidence 
thereof could adversely affect Fahnestock. However, an increase in 
the use of discount brokerages could be beneficial to Freedom.
                    
REGULATION
The securities industry in the United States is subject to extensive 
regulation under both federal and state laws. The SEC is the federal 
agency charged with administration of the federal securities laws. 
Much of the regulation of broker-dealers has been delegated to self-
regulatory organizations, principally the NASD and the national 
securities exchanges such as the NYSE, which has been designated 
as Fahnestock's primary regulator with respect to securities activities 
and the National Futures Association which has been designated as 
Fahnestock's primary regulator with respect to commodities 
activities. The CBOE has been designated Fahnestock's primary 
regulator with respect to options trading activities. These self-
regulatory organizations adopt rules (subject to approval by the SEC 
or the Commodities Futures Trading Commission ("CFTC"), as the 
case may be) governing the industry and conduct periodic 
examinations of Fahnestock's and Freedom's operations. Securities 
firms are also subject to regulation by state securities commissions in 
the states in which they do business. Fahnestock is registered as a 
broker-dealer in 50 states and Puerto Rico. FOM is registered as a 
broker-dealer in all 50 states except Nebraska. FOM's primary 
regulator with respect to securities activities has been designated as 
the NYSE.

The regulations to which broker-dealers are subject cover all aspects 
of the securities business, including sales methods, trade practices 
among broker-dealers, the use and safekeeping of customers' funds 
and securities, capital structure of securities firms, record keeping 
and the conduct of directors, officers and employees. The SEC has 
adopted rules requiring underwriters to ensure that municipal 
securities issuers provide current financial information and imposing 
limitations on political contributions to municipal issuers by brokers, 
dealers and other municipal finance professionals. Additional 
legislation, changes in rules promulgated by the SEC, the CFTC and 
by self-regulatory organizations, or changes in the interpretation or 
enforcement of existing laws and rules may directly affect the 
method of operation and profitability of broker-dealers. The SEC, 
self-regulatory organizations (including the NYSE), and state securities 
commissions may conduct administrative proceedings which can result in 
censure, fine, issuance of cease and desist orders or suspension or 
expulsion of a broker-dealer, its officers, or employees. The principal 
purpose of regulating and disciplining broker-dealers is to protect customers 
and the securities markets, rather than to protect creditors and 
shareholders of broker-dealers.

Fahnestock and Hudson Capital are also subject to regulation by the 
SEC and under certain state laws in connection with their businesses 
as investment advisors. 

Margin lending by Fahnestock is subject to the margin rules of the 
Board of Governors of the Federal Reserve System and the NYSE. 
Under such rules, Fahnestock is limited in the amount it may lend in 
connection with certain purchases of securities and is also required 
to impose certain maintenance requirements on the amount of 
securities and cash held in margin accounts. In addition, Fahnestock 
may (and currently does) impose more restrictive margin 
requirements than required by such rules. See "Customer Financing."
                    
NET CAPITAL REQUIREMENTS
As a registered broker-dealer and a member firm of the NYSE, 
Fahnestock is subject to certain net capital requirements pursuant to 
Rule 15c3-1 (the "Net Capital Rule") promulgated under the 
Securities Exchange Act of 1934 (the "Exchange Act"). The Net 
Capital Rule, which specifies minimum net capital requirements for 
registered brokers and dealers, is designed to measure the general 
financial integrity and liquidity of a broker-dealer and requires that at 
least a minimum part of its assets be kept in relatively liquid form. 

Fahnestock elects to compute net capital under an alternative method 
of calculation permitted by the Net Capital Rule. (FOM and 
Freedom compute net capital under the basic formula as provided by 
the Net Capital Rule.)  Under this alternative method, Fahnestock is 
required to maintain a minimum "net capital", as defined in the Net 
Capital Rule, at least equal to 2% of the amount of its "aggregate 
debit items" computed in accordance with the Formula for 
Determination of Reserve Requirements for Brokers and Dealers 
(Exhibit A to Rule 15c3-3 under the Exchange Act) or $250,000, 
whichever is greater. "Aggregate debit items" are assets that have as 
their source transactions with customers, primarily margin loans. 
Failure to maintain the required net capital may subject a firm to 
suspension or expulsion by the NYSE, the SEC and other regulatory 
bodies and ultimately may require its liquidation. The Net Capital 
Rule also prohibits payments of dividends, redemption of stock and 
the prepayment of subordinated indebtedness if net capital thereafter 
would be less than 5% of aggregate debit items (or 7% of the funds 
required to be segregated pursuant to the Commodity Exchange Act 
and the regulations thereunder, if greater) and payments in respect of 
principal of subordinated indebtedness if net capital thereafter would 
be less than 5% of aggregate debit items (or 6% of the funds required 
to be segregated pursuant to the Commodity Exchange Act and the 
regulations thereunder, if greater). The Net Capital Rule also 
provides that the total outstanding principal amounts of a broker-
dealer's indebtedness under certain subordination agreements (the 
proceeds of which are included in its net capital) may not exceed 
70% of the sum of the outstanding principal amounts of all 
subordinated indebtedness included in net capital, par or stated value 
of capital stock, paid in capital in excess of par, retained earnings 
and other capital accounts for a period in excess of 90 days.

Net capital is essentially defined as net worth (assets minus 
liabilities), plus qualifying subordinated borrowings minus certain 
mandatory deductions that result from excluding assets that are not 
readily convertible into cash and deductions for certain operating 
charges. The Rule values certain other assets, such as a firm's 
positions in securities, conservatively. Among these deductions are 
adjustments (called "haircuts") in the market value of securities to 
reflect the possibility of a market decline prior to disposition. 

Compliance with the Net Capital Rule could limit those operations 
of the brokerage subsidiaries of the Company that require the 
intensive use of capital, such as underwriting and trading activities 
and the financing of customer account balances, and also could 
restrict the Company's ability to withdraw capital from its brokerage 
subsidiaries, which in turn could limit the Company's ability to pay 
dividends, repay debt and redeem or purchase shares of its 
outstanding capital stock. Under the Net Capital Rule broker-dealers 
are required to maintain certain records and provide the SEC with 
quarterly reports with respect to, among other things, significant 
movements of capital, including transfers to a holding company 
parent or other affiliate. The SEC may in certain circumstances 
restrict the Company's brokerage subsidiaries' ability to withdraw 
excess net capital and transfer it to the Company or to other of the 
Operating Subsidiaries.

Item 2. PROPERTIES
The Company maintains offices at 20 Eglinton Avenue West, 
Toronto, Ontario, Canada for general administrative activities. Most 
day-to-day management functions are conducted at the executive 
offices of Fahnestock at 125 Broad Street, New York, New York. 
This office also serves as the base for most of Fahnestock's research, 
operations and trading, investment banking and investment advisory 
services, though other offices also have employees who work in 
these areas. Generally, the offices outside of 125 Broad Street, New 
York serve as bases for sales representatives who process trades and 
provide other brokerage services in co-operation with Fahnestock's 
New York office using the data processing facilities located there. 
Freedom conducts its business from its offices located at 11422 
Miracle Hills Dr., Omaha, Nebraska. FOM conducts its business 
from its offices located at 300 River Place, Detroit, Michigan. 
Management believes that its present facilities are adequate for the 
purposes for which they are used and have adequate capacity to 
provide for presently contemplated future uses.

The Company and its subsidiaries own no real property, but occupy 
office space totaling approximately 363,000 square feet in 73 
locations under standard commercial terms expiring between 1999 
and 2013. If any leases are not renewed, the Company believes it 
could obtain comparable space elsewhere on commercially 
reasonable rental terms.

Item 3.  LEGAL PROCEEDINGS 
The Company is involved in certain litigation arising in the ordinary 
course of business. Management believes, based upon discussion 
with legal counsel, that the outcome of this litigation will not have a 
material effect on the Company's financial position. The materiality 
of legal matters to the Company's future operating results depends 
on the level of future results of operations as well as the timing and 
ultimate outcome of such legal matters.

Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Class B voting shares (the "Class B Shares"), the Company's 
only class of voting securities, are not registered under the Exchange 
Act and are not required to be registered. The Class B Shares have 
fewer than 500 shareholders of record. Consequently, the Company 
is not required under Section 14 of the Exchange Act to furnish 
proxy soliciting material or an information statement to holders of 
the Class B Shares. However, the Company is required under 
applicable Canadian securities laws to provide proxy soliciting 
material, including a management proxy circular, to the holders of its 
Class B Shares.

Pursuant to the Company's Articles of Incorporation, holders of 
Class A non-voting shares (the "Class A Shares"), although not 
entitled to vote thereat, are entitled to receive notices of shareholders' 
meetings and to receive all informational documents required by law 
or otherwise to be provided to holders of Class B Shares. In addition, 
holders of Class A Shares are entitled to attend and speak at all 
meetings of shareholders, except class
meetings not including the Class A Shares.

In the event of either a "take-over bid" or an "issuer bid", (as those 
terms are defined in the Securities Act, (Ontario)) being made for the 
Class B Shares and no corresponding offer being made to purchase 
Class A Shares, the holders of Class A Shares would have no right 
under the Articles of Incorporation of the Company or under any 
applicable statute to require that a similar offer be made to them to 
purchase their Class A Shares.

No matters were submitted to the Company's shareholders during the 
fourth quarter of the Company's fiscal year.

PART II
Item 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER 
MATTERS
The Company's Class A Shares are listed and traded on The New 
York Stock Exchange (trading symbol "FVH") and on The Toronto 
Stock Exchange (trading symbol "FHV.A"). The Class B Shares are 
not traded on any stock exchange in Canada or the United States 
and, as a consequence, there is only limited trading in the Class B 
shares. The Company does not presently contemplate listing the 
Class B Shares in the United States on any national or regional stock 
exchange or on NASDAQ.

The following tables set forth the high and low sales prices of the 
Class A Shares on The Toronto Stock Exchange and on The New 
York Stock Exchange. Prices provided are in Canadian dollars or 
U.S. dollars as indicated and are based on data provided by The 
Toronto Stock Exchange and The New York Stock Exchange.

Class A Shares:
                            TSE              NYSE
                       HIGH     LOW      HIGH     LOW
                      (Cdn. Dollars)    (U.S. dollars)
1998
1st Quarter           $26.75   $23.00   $18.50   $16.6875
2nd Quarter            31.75    25.00    22.1875  17.625
3rd Quarter            29.50    20.75    19.875   13.5625
4th Quarter            27.00    20.45    17.875   13.3125

1997
1st Quarter           $25.25   $19.25   $18.375  $14.00
2nd Quarter            28.60    20.75    20.875   14.75
3rd Quarter            28.75    24.00    21.00    17.625
4th Quarter            29.55    25.00    21.50    17.0625

The following table sets forth information about the Company's 
shareholders as at December 31, 1998 as set forth in the records of 
the Company's transfer agent and registrar:

Class A Shares:
Shareholders of record 
having addresses in:   Number of shares   Percentage   Number of shareholders
Canada                  5,593,387          45.7%       197
United States           6,647,850          54.3%       187
Other                          32           -            2 
Total issued and 
outstanding            12,241,269          100%        386


Class B shares
Shareholders of record 
having addresses in:   Number of shares    Percentage   Number of shareholders
Canada (1)             98,135               98.5%       125
United States           1,537                1.5%        70
Other                       8                -            2
Total issued and 
outstanding            99,680              100%         197

(1) The Company has been informed that 50,098 Class B shares 
held by Phase II Financial Limited, an Ontario corporation, are 
beneficially owned by A.G. Lowenthal, a U.S. citizen and resident. 
See Item 12, "Security Ownership of Certain Beneficial Owners and 
Management".


Dividends
Type   Declaration dateRecord datePayment dateAmount per share

Annual     January 25,1996   February 9,1996   February 23,1996     $0.20
Quarterly  April 19,1996     May 9,1996        May 23,1996          $0.05
Quarterly  July 16,1996      August 9,1996     August 23,1996       $0.05
Quarterly  October 17,1996   November 8,1996   November 22,1996     $0.05
Quarterly  January 29,1997   February 10,1997  February 21,1997     $0.06
Quarterly  April 21,1997     May 9,1997        May 23,1997          $0.06
Quarterly  July 21,1997      August 8,1997     August 22,1997       $0.06
Quarterly  October 20,1997   November 7,1997   November 21,1997     $0.06
Quarterly  January 29,1998   February 6,1998   February 20,1998     $0.07
Quarterly  April 20,1998     May 8,1998        May 22,1998          $0.07
Quarterly  July 21,1998      August 7,1998     August 21,1998       $0.07
Quarterly  October 20,1998   November 6,1998   November 20,1998     $0.07
Quarterly  January 28,1999   February 12,1999  February 26,1999     $0.07

Future dividend policy will depend upon the earnings and financial 
condition of the Operating Subsidiaries, the Company's need for 
funds and other factors. However, it is the present intention of the 
Company's management to pay a quarterly dividend in the amount of 
U.S. $0.07 per Class A Share and Class B Share in May, August and 
November, 1999. Dividends may be paid to holders of Class A 
Shares and Class B Shares (pari passu), as and when declared by the 
Company's Board of Directors, from funds legally available therefor.

Certain Tax Matters
The following paragraphs summarize certain United States and 
Canadian federal income tax considerations in connection with the 
receipt of dividends paid on the Class A and Class B Shares of the 
Company. These tax considerations are stated in brief and general  
terms and are based on United States and Canadian law currently in 
effect. There are other potentially significant United States and 
Canadian federal income tax considerations and state, provincial or 
local income tax considerations with respect to ownership and 
disposition of the Class A and Class B Shares which are not 
discussed herein. The tax considerations relative to ownership and 
disposition of the Class A and Class B Shares may vary from 
taxpayer to taxpayer depending on the taxpayer's particular status. 
Accordingly, prospective purchasers should consult with their tax 
advisors regarding tax considerations which may apply to the 
particular situation.

United States Federal Income Tax Considerations
Dividends on Class A and Class B Shares paid to citizens or 
residents of the U.S. or to U.S. corporations (including any Canadian 
federal income tax withheld) will be generally subject to U.S. federal 
ordinary income taxation. Such dividends will not be eligible for the 
deduction for dividends received by corporations (unless such 
corporation owns by vote and value at least 10% of the stock of the 
Company, in which case a portion of such dividend may be eligible 
for such exclusion).

U.S. corporations, U.S. citizens and U.S. residents will generally be 
entitled, subject to certain limitations, to a credit against their U.S. 
federal income tax for Canadian federal income taxes withheld from 
such dividends. Taxpayers may claim a deduction for such taxes if 
they do not elect to claim such tax credit. No deduction for foreign 
taxes may be claimed by an individual taxpayer who does not 
itemize deductions. Because the application of the foreign tax credit 
depends upon the particular circumstances of each shareholder, 
shareholders are urged to consult their own tax advisors in this 
regard. Under certain limited circumstances, non-resident alien and 
foreign corporations will be subject to U.S. federal income taxation 
at graduated rates from dividends or gains with respect to their Class 
A and Class B Shares, if such income or gain is treated as effectively 
connected with the conduct of the recipient's trade or business within 
the United States, and may be entitled to such tax credit or such 
deduction.

Canadian Federal Income Tax Considerations
Dividends paid on Class A and Class B Shares held by non-residents 
of Canada will generally be subject to Canadian withholding tax. 
This withholding tax is levied at the basic rate of 25%, although this 
rate may be reduced by the terms of any applicable tax treaty. The 
Canada - U.S. tax treaty provides that the withholding rate on 
dividends paid to U.S. residents on Class A and Class B Shares is 
generally 15%.

Normal Course Issuer Bid
On June 30, 1998 the Company announced that commencing July 3, 
1998 it intended to purchase up to 790,000 Class A Shares by way of 
a Normal Course Issuer Bid through the facilities of The Toronto 
Stock Exchange and/or The New York Stock Exchange, representing 
approximately 10% of the public float of Class A Shares. For the 
year ended December 31, 1998, through the currently outstanding 
Normal Course Issuer Bid the Company purchased 398,500 Class A 
Shares. In addition, in fiscal 1998, through a Normal Course Issuer 
Bid which expired July 1, 1998, the Company  purchased 17,000 
Class A Shares. The average cost for all shares repurchased in fiscal 
1998 was U.S. $15.14. Any shares purchased by the Company 
pursuant to the Normal Course Issuer Bid will be cancelled. Unless 
terminated earlier by the Company, it may continue to purchase 
shares up to July 2, 1999. The Company may, at its option, apply to 
extend the program for an additional year.

Item 6. SELECTED FINANCIAL DATA
The following table presents selected financial information derived 
from the audited consolidated financial statements of the Company 
for the five years ended December 31, 1998. The selected financial 
information should be read in conjunction with, and is qualified in its 
entirety by reference to, the Consolidated Financial Statements and 
notes thereto included elsewhere in this report. In 1997, the 
Company purchased FOM. The 1997 amounts include the assets and 
liabilities and the operating results of FOM as of and subsequent to 
the period after July 17, 1997. See also Item 1, "Business" and Item 
7, "Management's Discussion and Analysis of Financial Condition 
and Results of Operations".

                                  Year ended December 31,
                     1998       1997       1996       1995       1994
                     (In thousands of US dollars except share amounts)

Revenue              $232,781   $242,158   $213,988   $184,433   $157,253 
Profit before 
extraordinary 
item                 $ 12,447   $ 26,731   $ 30,279   $ 20,899   $ 11,780 
Net profit           $ 12,447   $ 26,731   $ 30,279   $ 20,899   $ 11,780 
Profit before 
extraordinary 
item per share(1)    $0.99      $2.14      $2.46      $1.69      $0.96 
Net profit per 
share(1)
-basic               $0.99      $2.14      $2.46      $1.69      $0.96 
-diluted             $0.96      $2.08      $2.41      $1.68      $0.95 
Total assets         $666,763   $835,146   $519,916   $623,466   $510,636 
Total current 
liabilities          $500,410   $674,181   $384,009   $516,031   $421,818 
Subordinated 
indebtedness,
including 
current portion      $30        $30        $30        $30        $30 
Cash dividends 
per Class A 
Share and 
Class B share        $0.28       $0.24      $0.35      $0.15      $0.15 
Shareholders'   
equity               $166,323    $160,935   $135,877   $107,405   $88,788 
Book value per 
share (1)            $13.48      $12.87     $10.99     $8.92      $7.34 
Number of shares 
of capital stock 
outstanding          12,340,949  12,508,440 12,365,440 12,040,090 12,094,680

(1) The Class A Shares and Class B Shares are combined because 
they are of equal rank for purposes of dividends and in the event of a 
distribution of assets upon liquidation, dissolution or winding up.    

Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 
RESULTS OF OPERATIONS
Business Environment
Fahnestock, the Company's principal operating subsidiary, provides 
brokerage and related investment services. Fahnestock is engaged in 
proprietary trading and offers other related financial services to 
investors in fifteen states from 46 offices in the North Eastern United 
States, the Midwest, Florida and California, and from two associated 
offices in Caracas, Venezuela and Buenos Aires, Argentina. In 
addition, the Company operates in Michigan from 24 retail branch 
offices as First of Michigan, a division of Fahnestock. First of 
Michigan Capital Corporation was acquired on July 17, 1997. FOM 
is engaged in securities brokerage and trading and investment 
banking.  Client assets entrusted to the Company as at December 31, 
1998 totalled approximately $15 billion. Fahnestock is licensed to 
offer brokerage and other financial services in all 50 States. The 
Company provides investment advisory services through Hudson 
Capital and through Fahnestock Asset Management and Newbold 
Investment Advisors, operating as divisions of Fahnestock. Funds 
under management by the asset management groups totalled $1.2 
billion at December 31, 1998. The Company also operates a discount 
brokerage business based in Omaha, Nebraska, through Freedom.

The securities industry is highly competitive and sensitive to many 
factors and is directly affected by general economic and market 
conditions, including the volatility and price level of securities 
markets; the volume, size, and timing of securities transactions; the 
demand for investment banking services and changes in interest 
rates, all of which have an impact on commissions, trading and 
investment income as well as on liquidity. In addition, a significant 
portion of the Company's expenses are relatively fixed and do not 
vary with market activity. Consequently, substantial fluctuations can 
occur in the Company's revenues and net income from period to 
period due to these and other factors.

The Company anticipates increasing competition from commercial 
banks and thrift institutions as these institutions begin to offer more 
investment banking and financial services traditionally only 
provided by securities firms. The growing use of discount brokerage 
firms by investors has impacted traditional retail commission 
business and the presence of on-line trading over the internet has 
begun to significantly impact the means by which retail clients place 
their orders. The Company is also experiencing increasing regulation 
in the securities industry, particularly affecting the over-the-counter 
markets, making compliance with regulations more difficult and 
costly. At present, the Company is unable to predict the extent of 
changes that may be enacted, or the effect on the Company's 
business.

The Company's long-term plan is to continue to expand existing 
offices by hiring experienced professionals, thus maximixing the 
potential of each office and development of existing trading, 
investment banking, investment advisory and other activities. 
Equally important is the search for viable candidates for acquisition. 
As opportunities are presented, it is the intention of the Company to 
pursue growth by acquisition where a comfortable match can be 
found in terms of corporate goals and personnel and at a price that 
would provide the Company's shareholders with value.

Results of Operations
The investment environment in 1998 was marked by extreme 
volatility. Despite a world-wide economic crisis, U.S. markets 
continued upward, fueled by large cash inflows. This strong market  
resulted in the fourth successive year of popular stock averages 
rising over 20% per annum while interest rates remained at low 
levels. The outlook for 1999 indicates slower growth in corporate 
earnings and in the U.S. economy generally. However, the impact of 
cash flow from the savings of the baby-boom generation continues 
to substantially impact equity markets.  The impact of the internet 
through the ability to access instantaneous information and as a tool 
for trading has added investor interest and volatility to the market.

The Company's revenues in fiscal 1998 decreased by 4% compared 
to fiscal 1997. This was the result of trading losses in NASDAQ 
equities in the fourth quarter of 1998.  Except for these losses, the 
revenues of the Company would have been higher in 1998 compared 
to 1997. The increases in other revenue categories can be attributed  
to both the acquisition of FOM in July 1997 and to generally 
favorable business conditions. Expenses increased by approximately 
8% in 1998 compared to 1997. The increase can be attributed to the 
fact the operations of the Company included FOM for the full year in 
1998 and only part of the year in 1997. Net profit was approximately 
53% lower in 1998 compared to 1997. This can be attributed to the 
trading losses in NASDAQ equities in the fourth quarter of 1998. 
The Company has taken steps to limit its financial exposure in 
NASDAQ market-making activities. (See Item 1 - Risk 
Management)

The following table summarizes the changes in the major revenue 
and expense categories from the consolidated statement of 
operations for the past three fiscal years ended December 31, 1998, 
1997 and 1996.


Period to Period Change  Increase (Decrease)
                                1998 versus 1997          1997 versus 1996
                                Amount     Percentage     Amount    Percentage
Revenues -
Commissions                     $11,566,000    11.2%      $29,331,000   39.6%
Principal transactions, net     (33,245,000)  (50.4)      (14,536,000) (18.1)
Interest                          1,905,000     4.7         7,142,000   21.7
Underwriting fees                 1,613,000    14.6         2,370,000   27.3
Advisory fees                     5,934,000    37.5         1,619,000   11.4
Other                             2,850,000    48.3         2,244,000   61.5

Total revenues                   (9,377,000)   (3.8)       28,170,000   13.2

Expenses -
Compensation                     10,279,000     8.6        17,726,000   17.4
Clearing and exchanges fees        (484,000)   (5.3)        1,856,000   25.6
Communications                    3,051,000    17.1         2,877,000   19.2
Occupancy costs                   2,221,000    20.1           849,000    8.3
Interest                          1,670,000     8.3         3,850,000   23.6
Other                            (1,353,000)   (7.7)        8,430,000   90.9

Total expenses                   15,384,000     7.9        35,588,000   22.2

Profit before taxes             (24,761,000)  (53.3)       (7,418,000) (13.8)
Income taxes                    (10,477,000)  (53.0)       (3,870,000) (16.4)

Net profit                      (14,284,000)  (53.4)       (3,548,000) (11.7)%

Fiscal 1998 compared to Fiscal 1997
In fiscal 1998, there was one economic crisis after another; including 
the collapse of Asian markets, the meltdown in Russia, currency 
devaluations in Brazil and weakness in the U.S. dollar. Yet, despite 
the bad news, the U.S. equity markets continued to be supported by 
unprecedented inflows of cash and a strong U.S. economy, sending 
popular market averages upward by over 20% for the fourth 
consecutive year.

Total revenues for 1998 were $232,781,000, a decrease of 4% from 
$242,158,000 in 1997. Commission income (income realized in 
securities transactions for which the Company acts as agent) 
increased 11% to $114,889,000 compared to $103,323,000. This 
increase is attributable both to the business added by the FOM 
acquisition in July 1997 and to favorable business conditions. 
Principal transactions (revenues from transactions in which the 
Company acts as principal in the secondary market trading of over-
the-counter equities and municipal, corporate and government 
bonds) decreased 50% to $32,727,000 compared to $65,972,000. In 
the fourth quarter of 1998, the Company suffered unprecedented 
trading losses arising from its market-making activities in NASDAQ 
issues.  A sharp upward surge in the internet sector after the October 
lows left the Company with outsized positions from which the 
Company sustained significant and unrecoverable losses. Risk 
containment policies have been put into effect which will limit the 
Company's future exposure to such events.  Underwriting fees in 
1998 were $12,655,000, an increase of 15% over $11,042,000 in 
1997. The Company increased its investment banking revenues in 
1998. Advisory fees were $21,742,000 in 1998, an increase of 38% 
over $15,808,000 in 1997. The addition of new client accounts as 
well as the growth in value of existing client accounts contributed to 
the increase.

Interest income was $42,028,000 in 1998, an increase of 5% over 
$40,123,000 in 1997. Interest expense was $21,831,000 in 1998, an 
increase of 8% over $20,161,000 in 1997. The increase is 
attributable to higher customer debit balances with the inclusion of 
FOM customers for the full year in 1998 compared to approximately 
half of a year in 1997.Net interest income (interest revenue less 
interest expense) increased by 1% in 1998 compared to 1997.

Expenses totaled $211,058,000 in 1998, an increase of 8% 
compared to $195,674,000 in 1997. A large part of the increase can 
be attributed to the inclusion of a full year of FOM operations in 
1998 compared to approximately half of a year in 1997. The 
acquisition of FOM added 26 branch offices to the Fahnestock 
system. Compensation and related expenses were $130,064,000 in 
1998, an increase of 9% over $119,785,000 in 1997. The expected 
increase in compensation and related expenses was partially 
mitigated by reduced compensation to traders as a result of the 
trading losses incurred in the fourth quarter of 1998. 
Communications expenses were $20,930,000, an increase of 17% 
over $17,879,000 in 1997. Occupancy costs were $13,246,000, an 
increase of 20% over $11,025,000 in 1997. The increases in 
communications and occupancy costs can primarily be attributed to 
the increased size of the organization after the acquisition of FOM. 
Clearing and exchange fees were $8,634,000, a decrease of 5% 
compared to $9,118,000 in 1997. Other expenses of $16,343,000 
also decreased in 1998 (by 8%) compared to $17,706,000 in 1997. 
Certain economies of scale were introduced as the FOM and 
Fahnestock operations were consolidated. 

Fiscal 1997 compared to Fiscal 1996
In fiscal 1997, the U.S. economy remained strong with stable interest 
rates and record low unemployment levels. Investors continued their 
commitment to the equity market, sending popular market averages 
upward by over 20% per annum for the third successive year. In July 
1997, the Company purchased FOM, and at year end had 
approximately 215 registered representatives in 26 branch offices to 
bring the total for the Company to 724 investment executives in 75 
offices. Total revenues for 1997 were $242,158,000, an increase of 
13% over $213,988,000 in 1996. Commission in 1997 was 
$103,323,000, an increase of 40% over $73,992,000 in 1996. Of this 
increase, 77% can be attributed to the addition of FOM's business. 
Principal transactions  generated net revenue of $65,972,000 in 
1997, a decrease of 18% compared to $80,508,000 in 1996. Market 
volatility and an uninterrupted and dramatic increase in equity prices 
created a difficult trading environment. Underwriting fees in 1997 
were $11,042,000, an increase of 27% over $8,672,000 in 1996.  The 
Company was able to increase its underwriting business in both the 
public finance area and the structured asset area. Advisory fees in 
1997 were $15,808,000, an increase of 11% over $14,189,000 in 
1996 as a result of the addition of assets under management in 1997.

Interest income was $40,123,000 in 1997, an increase of 22% over 
$32,981,000 in 1996. Interest expense was $20,161,000 in 1997, an 
increase of 24% over $16,311,000 in 1996. The increase is 
attributable to the higher stock loan/stock borrow balances in 1997 
compared to 1996 and higher customer debit balances as a result of 
the acquisition of FOM. Net interest revenue (interest revenue less 
interest expense) increased 20% in 1997 compared to 1996. 

Expenses totaled $195,674,000 in 1997, an increase of 22% over 
$160,086,000 in 1996.  Approximately 90% of the increase in 1997 
can be attributed to the addition of the FOM operations effective 
July 17, 1997 and related acquisition costs. Compensation and 
related expenses were $119,785,000 in 1997, an increase of 17% 
over $102,059,000 in 1996. Communications expenses were 
$17,879,000, an increase of 19% over $15,002,000 in 1996. 
Occupancy costs were $11,025,000 in 1997, an increase of 8% over 
$10,176,000 in 1996. These increases can primarily be attributed to 
the increased size of the organization after the acquisition of FOM. 
Clearing and exchange fees were $9,118,000, an increase of 26% 
over $7,262,000 in 1996 and includes a variable component which 
rises as commission income rises. Other expenses were $17,706,000, 
an increase of 91% over $9,276,000 in 1996. This increase is due to 
several factors including: professional fees incurred as a result of the 
acquisition of FOM and other matters, depreciation and amortization 
on a much larger fixed asset base after the acquisition, licensing and 
filing fees as a result of the acquisition, and other acquisition-related 
costs.

Liquidity and Capital Resources
The decrease in the Company's assets  in 1998 compared to 1997 has 
been primarily the result of the loss of FOM investment executives 
following the acquisition of FOM in July 1997. As a result of 
corporate raids, a significant number of FOM investment executives 
and their clients left the FOM organization. The  level of the 
Company's assets at the end of 1997 represented a significant 
increase over the 1996 level because of the FOM acquisition. 
Customer-related receivables and securities inventory are highly 
liquid and represent a substantial percentage of total assets. The 
principal sources of financing for the Company's assets are 
stockholders' equity, customer free credit balances, proceeds from 
securities lending, bank loans and other payables. The Company has 
not utilized long-term financing. Cash generated from operations, 
increased earnings, proceeds from stock purchased by employee 
stock plans, and cash proceeds upon the exercise of employee stock 
options supplemented bank borrowings during the past three years. 
At December 31, 1998, Fahnestock had bank lines of credit and call 
loan arrangements with outstanding borrowings thereunder of 
$42,217,000.

The Company paid cash dividends to its shareholders totaling 
$3,531,000, during 1998, from internally-generated cash.

Because of the Company's strong financial condition, size and 
earnings history, management believes adequate sources of credit 
would be available to finance higher trading volumes, branch 
expansion, and major capital expenditures, as needed.

Inflation
Because the assets of the Company's brokerage subsidiaries are 
highly liquid, and because securities inventories are carried at current 
market values, the impact of inflation generally is reflected in the 
financial statements. However, the rate of inflation affects the 
Company's costs relating to employee compensation, rent, 
communications and certain other operating costs, and such costs 
may not be recoverable in the level of commissions charged. To the 
extent inflation results in rising interest rates and has other adverse 
effects upon the securities markets, it may adversely affect the 
Company's financial position and results of operations.

Year 2000 Disclosure
The Year 2000 problem arises as the result of computer systems 
having been written using two digits, rather than four, to define the 
year during a period when data processing media put a high value on 
brevity of expression. Any computer, computer program, equipment 
or product that has date-sensitive software or embedded chips, if not 
corrected, could produce inaccurate or unpredictable results 
commencing on January 1, 2000.

The Company is a broker/dealer in securities and as such relies 
heavily on computer technology to conduct its operations. The 
Company relies on both internal systems and on third party vendors. 
As at the date hereof, all vendors of software and hardware and all 
vendors of non-critical systems (elevators, vault, building security, 
etc.) have been contacted and inquiries about their Y2K readiness 
have been made. Certain non-critical systems have been determined 
to be non-Y2K compliant and have been or are being replaced with 
available Y2K-compliant systems. Approximately 95% of all 
vendors (100% of mission-critical vendors) have responded and have 
indicated that they already are or will be compliant.  In terms of the 
Company's internal systems, all programs have been assessed for 
Year 2000 compliance.  The majority of the compilation work has 
been completed and substantially all remediated systems have been 
internally tested on a parallel basis with current production, using 
live files. The remaining programs upon which modification work 
has not yet begun, represent less than 1% of the total number of 
programs running at the Company. Full testing and full Year 2000 
compliance is expected to be completed by June 30, 1999. The 
Company is actively participating in a number of industry 
committees including the Security Industry Association Year 2000 
Committee. The Company validated its connections to various test 
sites in July 1998 and will participate in various industry-wide Year 
2000 tests that are scheduled to run on Saturdays beginning on 
March 6, 1999 (to simulate December 29, 1999) through April 17, 
1999 (to simulate January 4, 2000). Files interfacing with SIAC and 
DTC have already been adapted and are compliant. To date there 
have been no material exceptions in tests that have been completed.

The cost of program remediation and testing, readying the Company 
for Year 2000 has been estimated to be approximately $200,000 - 
$250,000 for fiscal 1998. This includes the costs associated with the 
personnel dedicated to the project.  The cost of new hardware has not 
been included as substantially all purchases are included in the 
general technology upgrade being made in connection with the roll-
out of new desk-top systems company-wide. It is expected that 
similar costs  would be required in fiscal 1999. This range of costs 
does not include normal ongoing costs for computer hardware or 
software revisions that would be required in the normal course of 
business. All funding for the Y2K compliance effort is from 
available cash on hand.

The Company has begun work on a comprehensive contingency plan 
with respect to the Y2K problem, and intends to complete this plan 
by April 30, 1999 as part of its ongoing Y2K compliance effort.

Despite the Company's planning and preparation for Year 2000, 
there can be no assurance that partial or total systems interruptions 
will not occur and that the costs necessary to update hardware and 
software would not have a material adverse impact of the Company's 
business, financial condition, statement of operations and business 
prospects, although the Company believes that such results are 
unlikely.

Factors Affecting "Forward-Looking Statements"
From time to time, the Company may publish "Forward-looking 
statements" within the meaning of Section 27A of the Securities Act 
of 1933, as amended ( the "Act"), and Section 21E of the Exchange 
Act or make oral statements that constitute forward-looking 
statements. These forward-looking statements may relate to such 
matters as anticipated financial performance, future revenues or 
earnings, business prospects, projected ventures, new products, 
anticipated market performance, and similar matters. The Private 
Securities Litigation Reform Act of 1995 provides a safe harbor for 
forward-looking statements. In order to comply with the terms of the 
safe harbor, the Company cautions readers that a variety of factors 
could cause the Company's actual results to differ materially from 
the anticipated results or other expectations expressed in the 
Company's forward-looking statements. These risks and 
uncertainties, many of which are beyond the Company's control, 
include, but are not limited to: (i) transaction volume in the securities 
markets, (ii) the volatility of the securities markets, (iii) fluctuations 
in interest rates, (iv) changes in regulatory requirements which could 
affect the cost of doing business, (v) fluctuations in currency rates, 
(vi) general economic conditions, both domestic and international, 
(vii) changes in the rate of inflation and the related impact on the 
securities markets, (viii) competition from existing financial 
institutions and other new participants in the securities markets, (ix) 
legal developments affecting the litigation experience of the 
securities industry, and (x) changes in federal and state tax laws 
which could affect the popularity of products sold by the Company. 
The Company does not undertake any obligation to publicly update 
or revise any forward-looking statements.


Item 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Risk Management
The Company's principal business activities by their nature involve 
significant market and credit risks. The Company's effectiveness in 
managing these risks is critical to its success and stability. 

As part of its normal business operations, the Company engages in 
the trading of  both fixed income and equity securities in both a 
proprietary and market-making capacity. The Company makes 
markets in over-the-counter equities in order to facilitate order flow 
and accommodate its institutional and retail customers. The 
Company also makes markets in municipal bonds, mortgage-backed 
securities, government bonds and high yield bonds.

Market Risk
Market risk generally means the risk of loss that may result from the 
potential change in the value of a financial instrument as a result of 
fluctuations in interest and currency exchange rates and in equity and 
commodity prices. Market risk is inherent in all types of financial 
instruments, including both derivatives and non-derivatives. The 
Company's exposure to market risk arises from its role as a financial 
intermediary for its customers' transactions and from its proprietary 
trading and arbitrage activities. (See additional discussion of Risk 
Management in Item 1).

In addition, the Company's activities expose it to operational risk, 
legal risk and funding risk. Operational risk generally means the risk 
of loss resulting from improper processing of transactions or 
deficiencies in the Company's operating systems or internal controls. 
With respect to its trading activities, the Company has procedures 
designed to ensure that all transactions are accurately recorded and 
properly reflected on the Company's books on a timely basis. With 
respect to client activities, the Company operates a system of internal 
controls designed to ensure that transactions and other account 
activity (new account solicitation, transaction authorization, 
transaction processing, billing and collection) are properly approved, 
processed, recorded and reconciled. Legal risk generally includes the 
risk of non-compliance with legal and regulatory requirements and 
the risk that a counterparty's obligations are unenforceable. The 
Company is subject to extensive regulation in the various 
jurisdictions in which it conducts its business. Through its legal 
advisors and its compliance department, the Company has 
established routines to ensure compliance with regulatory capital 
requirements, sales and trading practices, new products, use and 
safekeeping of customer securities and funds, granting of credit, 
collection activities, and record keeping. The Company has 
procedures designed to assess and monitor counterparty risk. For a 
discussion of funding risk, see  'Liquidity and Capital Resources', 
above.

Value-at-Risk 
Value-at-risk is a statistical measure of the potential loss in the fair 
value of a portfolio due to adverse movements in underlying risk 
factors. In response to the Securities and Exchange Commission's 
market risk disclosure requirements, the Company has performed a 
value-at-risk  analysis of its trading financial instruments and 
derivatives. The value -at-risk calculation uses standard statistical 
techniques to measure the potential loss in fair value based upon a 
one-day holding period and a 95% confidence level. The calculation 
is based upon a variance-covariance methodology, which assumes a 
normal distribution of changes in portfolio value. The forecasts of 
variances and co-variances used to construct the model, for the 
market factors relevant to the portfolio, were generated from 
historical data. Although value-at-risk models are sophisticated 
tools, their use can be limited as historical data is not always an 
accurate predictor of future conditions. The Company attempts to 
manage its market exposure using other methods, including trading 
authorization limits and concentration limits.

At December 31, 1998 and 1997, the Company's value-at-risk for 
each component of market risk was as follows:

(000's omitted)                   1998      1997
Interest rate risk                $298      $120
Equity price risk                  759       680
Diversification benefit           (575)     (313)

Total                             $482      $487

The potential future loss presented by the total value-at-risk 
generally falls within predetermined levels of loss that should not be 
material to the Company's results of operations, financial condition 
or cash flows. The changes in the value-at-risk amounts reported in 
1998 from those reported in 1997 reflect changes in the size and 
composition of the Company's trading portfolio; more particularly an 
increase in the size of the Company's debt portfolio and a decrease in 
the Company's equity portfolio at December 31, 1998 compared to 
December 31, 1997. Further discussion of risk management appears 
in Item 7, Management's Discussion and Analysis of the Results of 
Operations and Item 1,  Risk Management.

The value-at-risk estimate has limitations that should be considered 
in evaluating the Company's potential future losses based on the 
year-end portfolio positions. Recent market conditions including 
increased volatility, may result in statistical relationships that result 
in higher value-at-risk than would be estimated from the same 
portfolio under different market conditions, or the converse may be 
true. Critical risk management strategy involves the active 
management of portfolio levels to reduce market risk. The 
Company's market risk exposure is continuously monitored as the 
portfolio risks and market conditions change.


Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The information required to be furnished in response to this Item is 
submitted hereinafter following the signature pages hereto.

Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND 
FINANCIAL DISCLOSURE

None.

PART III
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
General
Directors of the Company are elected annually by the holders of the 
Class B Shares to serve until the next annual meeting of shareholders 
or until their successors are appointed. Executive officers are 
appointed annually by the directors or until their successors are 
appointed. Certain information concerning the executive officers and 
directors of the Company as at December 31, 1998 is set forth 
below.

Name                     Age     Positions held
John L. Bitove           70      A Director of the Company since 
                                 February 1980; Retired executive.
                                 - Member of the Audit and Compensation and 
                                 Stock Option Committees

Richard Crystal           58     A Director of the Company since 1992; 
                                 Partner, Whitman Breed Abbott & Morgan LLP 
                                 (Attorneys-at-Law), US counsel to the 
                                 Company since 1985.

Albert G. Lowenthal       53     Chairman of the Board, Chief Executive 
                                 Officer and a Director of the Company since 
                                 1985; Chairman of the Board and Chief 
                                 Executive Officer of Fahnestock since 1985; 
                                 prior to 1985, Mr. Lowenthal was President
                                 of Cowen Securities Inc., a New York stock 
                                 brokerage firm and a general partner of 
                                 Cowen & Co., a New York brokerage firm.

Kenneth W. McArthur       63     A Director of the Company since 1996; 
                                 President and C.E.O. of Shurway Capital 
                                 Corporation (a private corporation), since 
                                 July 1993; Senior Vice-President Bank of  
                                 Montreal Investment Counsel between January 
                                 1992 and July 1993; Senior Vice-President 
                                 Nesbitt Thomson Inc. between July 1989 and 
                                 January 1993.
                                 - Member of the Audit Committee

A. Winn Oughtred          56     A Director of the Company since 1979; 
                                 a Director of Fahnestock since 1983; 
                                 Secretary of the Company since June, 1992 
                                 and prior to June, 1991; Partner, 
                                 Borden & Elliot (Law firm), Canadian counsel 
                                 to the Company since 1979.

Elaine K. Roberts         47     President, Treasurer and a Director of the 
                                 Company since 1977; Treasurer and a Director 
                                 of Fahnestock since 1983.

Burton Winberg            74     A Director of the Company since 1979; 
                                 President of Rockport Holdings Limited 
                                 (a real estate development company) since 
                                 1959.  
                                 - Member of the Audit and Compensation and 
                                 Stock Option Committees.


Compliance with Section 16(a) of the Securities Exchange Act of 1934.
Section 16(a) of the Exchange Act requires the Company's directors 
and executive officers, and persons who own more than ten percent 
of a registered class of the Company's equity securities, to file by 
specific dates with the SEC initial reports of ownership and reports 
of changes in ownership of equity securities of the Company. 
Officers, directors and greater than ten percent stockholders are 
required by SEC regulation to furnish the Company with copies of 
all Section 16(a) forms that they file. The Company is required to 
report in this annual report on Form 10-K any failure of its directors 
and executive officers and greater than ten percent stockholders to 
file by the relevant due date any of these reports during the two 
preceding fiscal years.

To the Company's knowledge, based solely on review of copies of 
such reports furnished to the Company during the two fiscal years 
ended December 31, 1998, all Section 16(a) filing requirements 
applicable to the Company's officers, directors and greater than ten 
percent stockholders were complied with. 

Item 11. EXECUTIVE COMPENSATION
General
The following table sets forth total annual compensation paid or 
accrued by the Company to or for the account of the Company's 
chief executive officer and each of the four most highly paid 
executive officers of the Company whose total cash compensation 
for the fiscal year ended December 31, 1998 exceeded $100,000.              

SUMMARY COMPENSATION TABLE 
                     Annual Compensation            Long-term Compensation

                                                  # Securities
Name and Principal                  Other         under                 All
Occupation and                      Annual        options/              Other
Year            Salary    Bonus     Comp     RSA  SARS       LTIP       Comp

A.G. Lowenthal,
Chairman,CEO,
and Director of
the Company,
Chairman, CEO,
and Director
of Fahnestock
1998            300,000   350,000      9,950   0  150,000          0    5,265
1997            300,000     -         11,990   0        0    908,000    6,050
1996            300,000   400,000     10,400   0        0    386,694    6,730

Robert Neuhoff,
Executive Vice
President of
Fahnestock
1998            230,000    87,500         0    0         0        0     5,265
1997            230,000   175,000         0    0         0        0     6,050
1996            230,000   175,000         0    0         0        0     6,730

Robert Sablowsky, (1)
Executive Vice
President of
Fahnestock
1998            200,000   210,000    200,710   0         0         0    5,265
1997            200,000    10,000    193,173   0     20,000        0    6,050
1996             41,025     2,061      8,785   0     20,000        0        0

Eric Shames 
Secretary of
Fahnestock
1998            187,500     50,000         0   0     15,000         0   5,265
1997            150,000     75,000         0   0          0         0   6,050
1996            150,000     75,000         0   0     15,000         0   6,595

Robert Maimone
Senior Vice
President of
Fahnestock
1998             135,000    50,000         0   0          0          0  5,265
1997             135,000    75,000         0   0          0          0  6,050
1996             135,000    75,000         0   0      25,000         0  6,730

(1) Mr. Sablowsky joined Fahnestock on October 18, 1996.

OTHER ANNUAL COMPENSATION - For Mr. Lowenthal, 
includes Directors Fees of Cdn$10,000 per year plus Cdn$600 per 
meeting attended and which were converted to $US at the average 
rate prevailing during the year and for Mr. Sablowsky, includes 
commissions earned on his retail business.
RSA - RESTRICTED STOCK AWARDS - The Company does not have a 
plan for granting restricted stock awards.
LTIP PAYOUTS - See discussion under "Performance-Based 
Compensation Agreement" and  "Stock Appreciation Agreement", 
described herein. LTIP payouts are paid in January following the 
year for which they were accrued.
ALL OTHER COMPENSATION - This represents Company 
contributions to the 401(k) Plan.


OPTION EXERCISES AND YEAR-END VALUE TABLE
                                              # of shares     $ Year end value
                                              underlying        of unexercised
                                              unexercised         in-the-money
                   Shares                     options/SARs             options
                   acquired on    Value       exercisable/        exercisable/
Name               exercise       realized    unexercisable      unexercisable

A.G. Lowenthal      150,000    $1,852,000    150,000/150,000      $1,426,500/0
R. Neuhoff                0             0     25,000/0              $237,750/0
R. Sablowsky              0             0          0/40,000          0/$62,500
E. Shames                 0             0      3,750/26,250     $26,062/78,188
R. Maimone                0             0      6,250/18,750    $43,438/130,312


Details of number of shares and value of exercisable and 
unexercisable options are as follows:
These options are exercisable in $CDN and have been converted at 
the exchange rate as at December 31, 1998.
                    # of     Option   Price at   Value        Total
Name                shares   price    Dec.31/98  per share    value

A.G. Lowenthal
-exercisable      150,000    $7.99    $17.50   $9.51         $1,426,500
-unexercisable    150,000    $17.875  $17.50    n/a           n/a

R. Neuhoff 
-exercisable       25,000    $7.99    $17.50    $9.51         $237,750
-unexercisable          0                                     n/a

R. Sablowsky 
-exercisable            0                                      n/a
-unexercisable     20,000    $14.375   $17.50    $3.125        $62,500
-unexercisable     20,000    $20.875   $17.50     n/a          n/a

E. Shames 
-exercisable        3,750    $10.55    $17.50    $6.95         $26,062
-unexercisable     11,250    $10.55    $17.50    $6.95         $78,188
-unexercisable     15,000    $17.875   $17.50    n/a           n/a

R. Maimone
-exercisable        6,250    $10.55    $17.50    $6.95         $43,438
-unexercisable     18,750    $10.55    $17.50    $6.95         $130,312


OPTION/SAR GRANTS FOR THE YEAR ENDED DECEMBER 31, 1998.

Date of Grant      Name            # shares  Price of Option   Expiration date

January 29, 1998   A.G. Lowenthal   150,000    $17.875     January 28, 2003
January 29, 1998   Eric Shames       15,000    $17.875     January 28, 2003

Pension Plan
Fahnestock has no pension plans for its officers and employees other 
than a savings plan qualified under Section 401(k) of the Internal 
Revenue Code, pursuant to which the Company may make an annual 
cash contribution based on compensation for each employee. Should 
participants in the plan elect to receive their employer contribution in 
the form of Class A Shares, the Company may make an additional 
contribution of Class A Shares equal in market value to 15% of the 
purchase price of the Class A Shares. On January 10, 1996, with 
respect to the 1995 fiscal year, the Company issued 113,000 Class A 
Shares from Treasury at Cdn.$12.24 (US$8.85) per share to the 
Company's 401(k) plan. On January 14, 1997, with respect to the 
1996 fiscal year, the Company issued 70,000 Class A Shares from 
Treasury at U.S.$14.375 per share to the Company's 401(k) plan. On 
January 14, 1998, with respect to the 1997 fiscal year, the Company 
issued 42,000 Class A Shares from Treasury at U.S.$17.6875 per 
share to the Company's 401(k) plan. On January 14, 1999, with 
respect to the 1998 fiscal year, the Company issued 56,000 Class A 
Shares from Treasury at U.S. $15.875 per shares to the Company's 
401(k) plan.

FOM has a savings plan qualified under Section 401(k) of the 
Internal Revenue Code pursuant to which FOM makes regular 
defined cash contributions based on the Plan document. In addition, 
FOM sponsors an unfunded Supplemental Executive Retirement 
Program ("SERP"), which is a non-qualified plan  that provides 
certain former officers additional retirement benefits. 
 
In addition, U.S. employees of the Company and its subsidiaries are 
entitled to group health benefits and group life insurance coverage 
pursuant to plans which do not discriminate in scope, terms, or 
operation in favor of officers or directors of the Company, and 
which are generally available to all salaried U.S. employees.

Employee Stock Option Plans
In 1996, the Company established its 1996 Equity Incentive Plan 
(the "EIP"). The 1986 Incentive Stock Option Plan (the "ISO") and 
the 1986 Employee Stock Option Plan (the "ESO") which were 
established in 1986 expired in April 1996. (The EIP, the ISO and the 
ESO are sometimes hereinafter collectively referred to as the 
"Plans".) The Plans permit the compensation and stock option 
committee of the board of directors of the Company to grant options 
to purchase Class A Shares of the Company to officers and key 
employees of the Company and its subsidiaries. Under an 
amendment to the ESO in June 1992 grants of options are made to 
the Company's independent directors on a formula basis. Options 
generally vest at the rate of 25% of the amount granted for each year 
held. Under the provisions of the Internal Revenue Code, options 
granted under the ISO qualify as "incentive stock options" and 
options granted under the ESO do not qualify. The EIP was amended 
in January 1997 to increase the authorized number of Class A Shares 
that may be subject to options to 1,850,000.  The EIP was further 
amended on March 25, 1997 to limit the number of options granted 
to any senior officer of the Company in any 60 month period to 
500,000 Class A Shares.

The Compensation and Stock Option Committee of the board of 
directors of the Company administers and interprets the provisions 
of the Plans, except as the Plans relate to grants to independent 
directors which are made pursuant to a formula. The committee's 
responsibilities include determining (i) which employees are eligible 
for participation in the Plans, (ii) when to grant options under the 
Plans, (iii) the number of shares that may be subject to options, and 
(iv) the times at which options may be exercised.

Performance-Based Compensation Agreement
In March 1997, the Company entered into a Performance-Based 
Compensation Agreement (the "Comp Agreement") effective 
January 1, 1997 and expiring December 31, 2001 with Albert G. 
Lowenthal, the Chairman and Chief Executive Officer of the 
Company and Fahnestock, pursuant to the recommendation of the 
Company's Compensation and Stock Option Committee and the 
approval of the Board of Directors. The purpose of the Comp 
Agreement was to set the terms under which Mr. Lowenthal's 1997 
non-salary compensation was to be calculated. The Comp 
Agreement provides for (1) a written Performance Goal, the formula 
for  which must be established by the Committee within the first 90 
days of the year and (2) a Stock Appreciation Amount equal to the 
amount by which the market value of the Company's Class A Shares 
at December 31 exceeds the base price as at December 31 of the 
prior year multiplied by a number of shares to be set each year by the 
Committee with in the first 90 days of the year. The sum of all 
performance awards paid under the Comp Agreement shall not 
exceed $5,000,000. 

The Performance Goal established in March 1997 resulted in 
$908,000 payable to Mr. Lowenthal for fiscal 1997 based on the 
following formula: (a) 3% of the excess of the Company's actual 
Return on Equity over a Base Return on Equity of 15% (based on  
Shareholders' Equity as at December 31, 1996), up to a 25% Return 
on Equity; (b) plus 4% of the excess of the Company's actual Return 
on Equity over a 25% Return on Equity (based on  Shareholders' 
Equity as at December 31, 1996).  The Stock Appreciation Amount 
was set in March 1997 at 150,000 shares and resulted in $456,000 
payable to Mr. Lowenthal for fiscal 1997. Mr. Lowenthal and the 
Company agreed to accept the amount payable under the 
Performance Goal, which was less than the formula required, as the 
full performance-based compensation for fiscal 1997. The 
Performance Goal established in March 1998 resulted in nil being 
payable to Mr. Lowenthal for fiscal 1998.

Stock Appreciation Agreement
In February, 1995 Fahnestock entered into a Stock Appreciation 
Agreement (the "Stock Appreciation Agreement") with Albert G. 
Lowenthal, the Chairman and Chief Executive Officer of the 
Company and of Fahnestock, pursuant to the recommendation of the 
Company's Compensation Committee and the approval of the Board 
of Directors. The purpose of the Stock Appreciation Agreement is to 
provide additional compensation to Mr. Lowenthal for his past 
services (so as to bring Mr. Lowenthal's compensation more into line 
with the compensation paid to chief executive officers of comparable 
companies in the financial services industry) linked to the future 
market price of the Company's stock.

Under the terms of the Stock Appreciation Agreement, Mr. 
Lowenthal was entitled to receive a cash award in January 1996 of 
U.S.$238,306, being the greater of (x) U.S.$150,000 or (y) the 
difference between Cdn.$9.00 and the Market Value (as defined in 
the Stock Appreciation Agreement) for the Company's Class A 
Shares on The Toronto Stock Exchange as of December 31, 1995, 
multiplied by 100,000. Mr. Lowenthal was entitled to additional 
payment of U.S.$386,694 in January 1997 based upon this formula 
and restricted by the proviso that the aggregate paid with respect to 
1995 and 1996 not exceed U.S.$625,000.

Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
(a) The following table sets forth information as of December 31, 
1998 as to the only persons known to the Company which own 
beneficially more than 5% of the Class B Shares (the only class of 
voting stock of the Company). There are no outstanding rights to 
acquire beneficial ownership of any Class B Shares.


Title of Class  Identity of Person or Group
                Mailing Address              Amount Owned    Percent of Class
Class B         A.G. Lowenthal
                c/o Fahnestock & Co. Inc.
                125 Broad St
                New York, NY 10004            50,484  (1)     50.6%


                O. Roberts
                c/o Fahnestock Viner Holdings Inc.
                Suite 1110, Box 2015
                20 Eglinton Ave. W.
                Toronto, Canada M4R 1K8        44,309 (2)      44.4%
________________________________________
1. All shares are held of record by Phase II Financial Limited, an 
Ontario corporation ("Phase II") wholly-owned by Mr. Lowenthal 
who is Chairman of the Company.
2.  Mrs. Roberts, who is the mother of Elaine Roberts, President of 
the Company, owns 100 shares directly and 44,209 shares indirectly 
through Elka Estates Limited, an Ontario corporation ("Elka") which is 
wholly-owned by Mrs. Roberts.

(b)  The following table sets forth information as of December 31, 
1998 as to the ownership of Class A Shares and Class B Shares, the 
only classes of equity securities of the Company, by persons who are 
directors of the Company, naming them, and as to directors and 
officers of the Company as a group, without naming them.

Title of Class   Identity of Person 
                 or Group              Amount Owned           Percent of Class
Class A Shares   A.G. Lowenthal       2,462,500 (1), (2)         20.2%
                 E.K. Roberts           149,494 (4)               1.2%
                 A.W. Oughtred              500                   *
                 J.L. Bitove             25,580                   0.2%
                 R. Crystal              16,750 (5)               0.1%
                 K.W. McArthur           35,000                   0.3%
                 B. Winberg                 700                   *
                 Officers and Directors 
                 as a group 
                 (7 members)           2,690,524 (1),(2),(4),(5)  21.9%

Class B Shares   A.G. Lowenthal           50,484 (3)              50.6%
                 E.K. Roberts                108                   0.1%
                 A.W. Oughtred                 0                  
                 J.L. Bitove                  20                   *
                 R. Crystal                    0
                 K.W. McArthur                 0
                 B. Winberg                    0
                 Officers and Directors 
                 as a group 
                 (7 members)              50,612                  50.8%
_____________________________________
(1)  Mr. Lowenthal is the sole general partner of Phase II Financial 
L. P., a New York limited partnership, ("Phase II L.P.") which is the 
record holder of 2,150,900 Class A Shares. Mr. Lowenthal holds 
10,250 Class A Shares through the Company's 401(k) plan and 
151,350 Class A Shares directly.
(2)  150,000 Class A Shares are beneficially owned in respect of 
Class A Shares currently issuable upon exercise of options issued 
under the Company's ISO and ESO.
(3)  Phase II, an Ontario corporation wholly-owned by Mr. 
Lowenthal, is the holder of record of all such shares.
(4)  75,000 Class A Shares are beneficially owned in respect of Class 
A Shares currently issuable upon exercise of options issued under 
the Company's ESO.
(5)  16,250 Class A Shares are beneficially owned in respect of Class 
A Shares currently issuable upon exercise of options issued under 
the Company's ESO.

 * less than 1%

(c) There are no arrangements, known to the Company, the operation 
of which may at a subsequent date result in a change of control of 
the Company.
          

Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None of the directors or officers of the Company or any associate of 
any such director or officer was indebted to the Company or its 
subsidiaries at any time during the last three years except as follows:

During the last three years Albert G. Lowenthal and Phase II L.P. 
have maintained margin accounts with Fahnestock. Such margin 
accounts are substantially on the same terms, including interest rates 
and collateral, as those prevailing from time to time for comparable 
transactions with non-affiliated persons and do not involve more 
than the normal risk of collectability. The maximum amount of 
borrowings outstanding during 1998 was $266,000 (nil and 
$178,000 in 1997 and 1996, respectively). Mr. Robert Neuhoff also 
maintains a margin account with Fahnestock. The maximum 
borrowings outstanding during 1998 was $984,000 ($876,000  and 
$427,000 in 1997 and 1996, respectively). 


PART IV
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES  AND REPORTS ON FORM 8-K.

(a)  (i)Financial Statements

             The response to this portion of Item 14 is
             submitted as a separate section of this report.
             See pages F-1 to F-15
  
    (ii)Financial Statement Schedules

             Not Applicable                    

   (iii)Listing of Exhibits

             The exhibits which are filed with this Form
             10-K or are incorporated herein by reference
             are set forth in the Exhibit Index which
             immediately precedes the exhibits to this
             report.

(b)          Reports on Form 8-K

The Company filed a Form 8-K on December 11, 1998. The 
Company issued an earnings alert as a result of trading losses 
sustained in October and November 1998.

 (c)          Exhibits

             See the Exhibit Index included hereinafter.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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, in the City of New York, State of New York, on the ?
day of March, 1999.

FAHNESTOCK VINER HOLDINGS INC.


BY:/s/E.K. Roberts
E.K. Roberts, President

Pursuant to the requirements of the Securities Exchange Act of 1934, 
this report has been signed by the following persons in the capacities 
and on the dates indicated.


Signature               Title                               Date

/s/J.L. Bitove          Director                            March 26, 1999
J.L. Bitove

/s/R. Crystal           Director                            March 26, 1999
R. Crystal

/s/A.G. Lowenthal       Chairman, Chief Executive           March 26, 1999
A.G. Lowenthal          Officer, Director

/s/K.W. McArthur        Director                            March 26, 1999
K.W. McArthur

/s/A.W. Oughtred        Secretary, Director                 March 26, 1999
A.W. Oughtred

/s/E.K. Roberts         President, Treasurer,               March 26, 1999
E.K. Roberts            Chief Financial Officer,
                        Director

/s/ B. Winberg          Director                            March 26, 1999
B. Winberg


            INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
                 FAHNESTOCK VINER HOLDINGS INC.

Management's Responsibility for Consolidated Financial Statements      F-1
Report of Independent Accountants                                      F-2
Consolidated Balance Sheet as of December 31, 1998 and 1997            F-3
Consolidated Statement of Operations for the three years ended
  December 31, 1998, 1997 and 1996                                     F-4
Consolidated Statement of Retained Earnings for the three years 
  ended December 31, 1998, 1997 and 1996                               F-5
Consolidated Statement of Cash Flows for the three years ended
  December 31, 1998, 1997 and 1996                                     F-6
Notes to Consolidated Financial Statements                             F-7



MANAGEMENT'S RESPONSIBILITY FOR CONSOLIDATED FINANCIAL STATEMENTS

The accompanying consolidated financial statements of 
Fahnestock Viner Holdings Inc. were prepared by management in 
accordance with generally accepted accounting principles in the 
United States, which conform in all material respects with 
accounting principles generally accepted in Canada. The significant 
accounting policies of the Company are described in Note 1 to the 
consolidated financial statements.

Management is responsible for the integrity and objectivity 
of the information contained in the consolidated financial statements. 
In order to present fairly the financial position of the Company and 
the results of its operations and the changes in its financial position, 
estimates which are necessary are based on careful judgements and 
have been properly reflected in the consolidated financial statements. 
Management has established systems of internal control which are 
designed to provide reasonable assurance that assets are safeguarded 
from loss or unauthorized use and to produce reliable accounting 
records for the preparation of financial information.

PricewaterhouseCoopers LLP, the Company's independent 
auditors, conduct an audit of the consolidated financial statements in 
accordance with generally accepted auditing standards. Their audit 
includes a review and evaluation of the Company's systems of 
internal control, and such tests and procedures as they consider 
necessary in order to form an opinion as to whether the consolidated 
financial statements are presented fairly in accordance with 
accounting principles generally accepted in the United States.

The Board of Directors is responsible for ensuring that 
management fulfils its responsibilities for financial reporting and 
internal control. The Board of Directors is assisted in this 
responsibility by its Audit Committee, a majority of whose members 
are not officers of the Company. The Audit Committee meets with 
management as well as with the independent auditors to review the 
internal controls, consolidated financial statements, and the auditors' 
report. The Audit Committee reports its findings to the Board of 
Directors for its consideration in approving the consolidated 
financial statements for issuance to the shareholders.
	Management recognizes its responsibility for conducting the 
Company's affairs in compliance with established financial 
standards, and applicable laws and regulations, and for maintaining 
proper standards of conduct for its activities. 

/s/A.G. Lowenthal                      /s/E.K. Roberts
A.G. Lowenthal                         E.K. Roberts
Chairman of the Board                  President and Treasurer
and Chief Executive Officer

February 26, 1999             
F-1


REPORT OF INDEPENDENT ACCOUNTANTS

TO THE SHAREHOLDERS OF FAHNESTOCK VINER HOLDINGS INC.

In our opinion, the accompanying consolidated balance sheet and the 
related consolidated statements of operations, retained earnings, and 
cash flows present fairly, in all material respects, the financial 
position of Fahnestock Viner Holdings Inc. and its subsidiaries at 
December 31, 1998 and 1997, and the results of its operations and its 
cash flows for each of the three years ended December 31, 1998 in 
conformity with generally accepted accounting principles. These 
financial statements are the responsibility of the Company's 
management; our responsibility is to express an opinion on these 
financial statements based on our audit. We conducted our audit of 
these statements in accordance with generally accepted auditing 
standards which require that we plan and perform  the audit to obtain 
reasonable assurance about whether the financial statements are free 
from misstatement. An audit includes examining, on a test basis, 
evidence supporting the amounts and disclosures in the financial 
statements, assessing the accounting principles used and significant 
estimates made by management, and evaluating the overall financial 
statement presentation. We believe that our audit provides a 
reasonable basis for the opinion expressed above.

/s/PricewaterhouseCoopers  LLP

New York, New York
February 26, 1999.
F-2


                        FAHNESTOCK VINER HOLDINGS INC.
                         CONSOLIDATED BALANCE SHEET
                              AS AT DECEMBER 31, 
                                                           1998          1997
Expressed in thousands of U.S. dollars

ASSETS
Current assets
  Cash and short-term deposits                          $11,501       $10,784 
  Restricted deposits (note 2)                            2,312         1,537
  Securities purchased under agreement to resell         12,174           -
  Deposits with clearing organizations                    7,072         4,734 
  Receivable from brokers and clearing 
    organizations (note 1)                              167,018       359,205 
  Receivable from customers                             334,664       350,807 
  Securities owned, at market value (notes 3 and 5)      88,579        63,262 
  Demand notes receivable                                    30            30 
  Other                                                  26,912        27,945 

                                                        650,262       818,304 
Other assets
  Stock exchange seats (approximate market value
     $4798; $5,592 in 1997)                               1,507         1,542 
  Fixed assets, net of accumulated depreciation of
     $8,896; $6,490 in 1997                               9,286         9,128 
  Goodwill, at amortized cost                             5,708         6,172 

                                                         16,500        16,842 

                                                       $666,763      $835,146 

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
  Drafts payable                                        $22,734       $18,507 
  Bank call loans (note 5)                               42,217        23,755 
  Securities sold under agreement to repurchase             664           -
  Payable to brokers and clearing 
    organizations (note 1)                              235,029       422,173 
  Payable to customers                                  115,878       117,033 
  Securities sold, but not yet purchased, 
    at market value (note 3)                             41,104        31,090 
  Accounts payable and other liabilities                 40,119        45,571 
  Income taxes payable                                    2,665        16,052
  Subordinated loans payable (note 4)                        30            30
  
                                                        500,440       674,211 

Commitments and contingencies (note 10)

Shareholders' equity
  Share capital (note 6)
  12,241,269 Class A non-voting shares  
    (1997 - 12,408,760 shares)                            36,392       40,783
  99,680 Class B voting shares                               133          133 

                                                          36,525       40,916 
  Contributed capital (note 7)                             2,196        1,333 
  Retained earnings                                      127,602      118,686 

                                                         166,323      160,935 

                                                        $666,763     $835,146 

The accompanying notes are an integral part of these consolidated financial 
statements.
F-3


                      FAHNESTOCK VINER HOLDINGS INC.
                  CONSOLIDATED STATEMENT OF OPERATIONS
                      FOR THE YEAR ENDED DECEMBER 31, 
                                                1998        1997         1996 
Expressed in thousands of U.S. dollars, except per share amounts
REVENUE:
  Commissions                               $114,889     $103,323     $73,992 
  Principal transactions, net                 32,727       65,972      80,508 
  Interest                                    42,028       40,123      32,981 
  Underwriting fees                           12,655       11,042       8,672 
  Advisory fees                               21,742       15,808      14,189 
  Other                                        8,740        5,890       3,646 

                                             232,781      242,158     213,988 

EXPENSES:
  Compensation and related expenses          130,064      119,785     102,059 
  Clearing and exchange fees                   8,634        9,118       7,262 
  Communications                              20,930       17,879      15,002 
  Occupancy costs                             13,246       11,025      10,176 
  Interest                                    21,831       20,161      16,311 
  Other                                       16,353       17,706       9,276 

                                             211,058      195,674     160,086 

Profit before income taxes                    21,723       46,484      53,902 
Income tax provision (note 8)                  9,276       19,753      23,623 

NET PROFIT FOR YEAR                          $12,447      $26,731     $30,279 

Profit per share (note 9)
          - basic                            $0.99        $2.14       $2.46
          - diluted                          $0.96        $2.08       $2.41

The accompanying notes are an integral part of these consolidated financial 
statements.
F-4


                    FAHNESTOCK VINER HOLDINGS INC.
             CONSOLIDATED STATEMENT OF RETAINED EARNINGS
                  FOR THE YEAR ENDED DECEMBER 31, 
                                                 1998       1997         1996 
Expressed in thousands of U.S. dollars

Retained earnings, beginning of the year      $118,686    $94,957     $68,974 
Net profit for the year                         12,447     26,731      30,279 
Dividends                                       (3,531)    (3,002)     (4,296)

Retained earnings, end of the year            $127,602   $118,686     $94,957 

The accompanying notes are an integral part of these consolidated financial 
statements.
F-5

                   FAHNESTOCK VINER HOLDINGS INC.
                CONSOLIDATED STATEMENT OF CASH FLOWS
                  FOR THE YEAR ENDED DECEMBER 31,
                                               1998         1997         1996
Expressed in thousands of U.S. dollars
Cash flows from operating activities:
Net profit for the year                     $12,447       $26,731     $30,279 
Adjustments to reconcile net profit to 
   net cash provided
   by (used in) operating activities:
   Non-cash items included in net profit:
      Depreciation and amortization           2,905        1,357          955 
   Decrease (increase) in operating assets, 
      net of effects of acquisition of First 
      of Michigan Capital Corporation:
      Restricted deposits                      (775)         365         (660)
      Securities purchased under agreement 
        to resell                           (12,174)         -            -
      Deposits with clearing organizations   (2,338)      (1,033)         (35)
      Receivable from brokers and clearing 
        organizations                       192,187     (165,787)     117,067 
      Receivable from customers              16,143          556      (12,958)
      Securities owned                      (25,317)     (17,693)      (4,742)
      Other assets                            1,033      (13,919)       4,574 
   Increase (decrease) in operating 
      liabilities net of effects of           
      acquisition of First of Michigan 
      Capital Corporation:
      Drafts payable                         4,227         6,069       (4,382)
      Securities sold under agreement 
        to repurchase                          664           -            -
      Payable to brokers and clearing 
        organizations                     (187,144)      226,095     (125,878
      Payable to customers                  (1,155)        5,055       12,386 
      Securities sold, but not 
        yet purchased                       10,014        (2,024)       6,816 
      Accounts payable and other 
        liabilities                         (5,452)        3,010        5,739 
      Income taxes payable                 (13,387)        3,708        2,697 

Cash (used in) provided by 
   operating activities                     (8,122)       72,490       31,858 

Cash flows from investing activities:
     Purchase of First of Michigan Capital 
       Corporation, net
       of cash acquired (note 12)              -         (34,340)         -
     Proceeds from sale of exchange seat       -           1,358          -
     Purchase of fixed assets               (2,564)       (5,152)        (995)

Cash (used in) investing activities         (2,564)      (38,134)        (995)

Cash flows from financing activities:
     Cash dividends paid on Class A 
       non-voting and Class B shares        (3,531)       (3,002)      (4,296)
     Issuance of Class A non-voting shares   1,899         1,577        2,175 
     Repurchase of Class A non-voting 
       shares for cancellation              (6,290)         (482)         -
     Tax benefit from employee options 
       exercised                               863           234          314 
     Increase (decrease) in bank 
       call loans                           18,462       (31,262)     (29,400)

Cash provided by (used in) 
  financing activities                      11,403       (32,935)     (31,207)

Net increase (decrease) in cash 
  and short-term deposits                      717         1,421         (344)
Cash and short-term deposits, 
  beginning of year                         10,784         9,363        9,707 

Cash and short-term deposits, 
  end of year                              $11,501       $10,784       $9,363 

The accompanying notes are an integral part of these consolidated financial 
statements.
F-6

                  FAHNESTOCK VINER HOLDINGS INC.
            Notes to Consolidated Financial Statements
                  (Expressed  in U.S. dollars)
                        December 31, 1998

GENERAL
Fahnestock Viner Holdings Inc. (the "Company") is incorporated 
under the laws of Ontario. The Company's principal subsidiaries, 
Fahnestock & Co. Inc. ("Fahnestock") and First of Michigan 
Corporation ("FOM"), are  members of the New York Stock 
Exchange, the American Stock Exchange and several other regional 
exchanges in the United States.

1. Summary of significant accounting policies
These consolidated financial statements have been prepared in 
accordance with accounting principles generally accepted in the 
United States for the purpose of inclusion in the annual report on 
Form 10-K. In all material respects, they conform with accounting 
principles generally accepted in Canada which have been used to 
prepare the consolidated financial statements for purposes of 
inclusion in the annual report to shareholders, except the calculation 
of earnings per share. 

The preparation of financial statements in conformity with generally 
accepted accounting principles requires management to make 
estimates and assumptions that affect the reported amounts of assets 
and liabilities and disclosures of contingent assets and liabilities at 
the date of the financial statements and the reported amounts of 
revenues and expenses during the reporting period. The most 
significant estimates are related to income taxes and contingencies. 
Actual results could be materially different from these estimates.

Since operations are predominantly based in the United States, these 
consolidated financial statements are presented in U.S. dollars.

The following is a summary of significant accounting policies 
followed in the preparation of these consolidated financial 
statements:

(a) Basis of consolidation
The consolidated financial statements include the accounts of the 
Company and all subsidiaries. The major subsidiaries, wholly-
owned and operated in the U.S., are as follows:

	Fahnestock & Co. Inc.               - broker/dealer in securities
	Freedom Investments, Inc.           - discount broker in securities
	Hudson Capital Advisors, Inc.       - investment advisory services
	First of Michigan Corporation       - broker/dealer in securities 
                                       (until December 31, 1998)

Significant inter-company balances and transactions have been 
eliminated upon consolidation.

(b) Brokerage operations
Transactions in proprietary securities and related revenues and 
expenses are recorded on a trade date basis. Customers' securities 
and commodities transactions are reported on a settlement date basis 
which is generally three business days. Related commission income 
and expense is recorded on a trade date basis. Securities owned and 
securities sold but not yet purchased are reported at market value 
generally based upon quoted prices. Realized and unrealized changes 
in market value are recognized in net trading revenues in the year in 
which the change occurs. Other financial instruments are carried at 
fair value or amounts that approximate fair value.
F-7

(c) Cash and cash equivalents
The Company defines cash equivalents as highly liquid investments 
with original maturities of less than 90 days that are not held for sale 
in the ordinary course of business.

(d) Drafts payable
Drafts payable represent amounts drawn by the Company against a 
bank.

(e) Goodwill
Goodwill, acquired upon the acquisition of Fahnestock, Fahnestock 
International Inc. and First of Michigan Capital Corporation, is being 
amortized to operations on a straight-line basis over twenty years. 
Negative goodwill arising as a result of the acquisition of Hopper 
Soliday Corporation and subsidiaries and Reich & Co., Inc. is being 
amortized to operations on a straight-line basis over twenty years.

(f) Fixed assets
Fixed assets and stock exchange seats are stated at cost. Depreciation 
of furniture and fixtures is provided on the straight-line method 
generally over five to seven years. Leasehold improvements are 
amortized on a straight-line basis over the shorter of the life of the 
asset or the life of the lease. 

(g) Foreign currency translations
Canadian currency balances have been translated into U.S. dollars as 
follows: monetary assets and liabilities at exchange rates prevailing 
at year end;  revenue and expenses at average rates for the year; and 
non-monetary assets and share capital at historic rates.

(h) Income taxes
The Company accounts for income taxes in accordance with 
Statement of Financial Accounting Standard No. 109, "Accounting 
for Income Taxes". Deferred income tax assets and liabilities arise 
from "temporary differences" between the tax basis of an asset or 
liability and its reported amount in the consolidated financial 
statements. Deferred tax balances are determined by applying the 
enacted tax rates.

(i)Securities lending activities
Securities borrowed and securities loaned are carried at the amounts 
of cash collateral advanced or received.

Securities borrowed transactions require the Company to deposit 
cash, letters of credit, or other collateral with the lender. The 
Company receives cash or collateral in an amount generally in 
excess of the market value of securities loaned.

The Company monitors the market value of securities borrowed and 
loaned on a daily basis and may require counterparties to deposit 
additional collateral or return collateral pledged when appropriate.

Included in receivable from brokers and clearing organizations are 
deposits paid for securities borrowed of $138,279,000 (1997-
$299,938,000). Included in payable to brokers and clearing 
organizations are deposits received for securities loaned of 
$226,763,000 (1997-$411,089,000).
F-8

(j) Resale and repurchase agreements
Transactions involving purchases of securities under agreements to 
resell ("reverse repurchase agreements") or sales of securities under 
agreements to repurchase ("repurchase agreements") are treated as 
collateralized financing transactions and recorded at their contractual 
resale or repurchase amounts plus accrued interest.

The Company obtains possession of collateral with a market value 
equal to or in excess of the principal amount loaned under reverse 
repurchase agreements. Collateral is valued daily, and adjusted when 
appropriate.

(k) Segment Reporting
In 1998 the Company adopted Statement of Financial Accounting 
Standards (FAS) 131, Disclosures about Segments of an Enterprise 
and Related Information. FAS 131 supercedes FAS 14, Financial 
Reporting for Segments of a Business Enterprise, replacing the 
"industry segment" approach with the "management approach". The 
management approach designates the internal organization that is 
used by management for making operating decisions and assessing 
performance as the source of the Company's reportable segments. 
FAS 131 also requires disclosures about products and services, 
geographic areas, and major customers. The adoption of FAS 131 
did not affect results of operations or financial position but did affect 
the disclosure of segment information. (See Note 16).

2. Restricted deposits
Deposits of $2,312,000 (1997-$1,537,000) were held at year end in a 
special reserve bank account for the exclusive benefit of customers 
in accordance with regulatory requirements. To the extent permitted, 
these deposits are invested in interest bearing accounts collateralized 
by qualified securities.

3. Securities owned and sold, but not yet purchased (at market value)

                                                     1998              1997
Securities owned consist of:
Corporate equities                            $26,580,000        $28,309,000
Corporate debt                                 18,905,000         13,264,000
U.S. government and agency and state 
  and municipal government obligations         26,098,000         10,029,000
Options                                           138,000            -
Money market funds                             16,858,000         11,660,000

                                              $88,579,000        $63,262,000

Securities sold, but not yet purchased consist of:
Corporate equities                            $21,129,000        $26,706,000
Corporate debt                                  4,376,000          3,266,000
U.S. government and agency and state 
  and municipal government obligations         15,599,000          1,118,000

                                              $41,104,000        $31,090,000
F-9

4. Subordinated loans payable
                                                     1998               1997
Due in 1999 at 5.5%                               $30,000           	$30,000

5. Bank call loans
Bank call loans, primarily payable on demand, bear interest at 
various rates but not exceeding the broker call rate, which was 
6.375% at December 31, 1998. These loans, collateralized by firm 
and customer securities with market values of approximately 
$63,916,000 and $40,935,000, respectively, are primarily with one 
money center bank. Details of the bank call loans are as follows:

December 31,                       1998           1997           1996

Year-end balance                   $42,217,000    $23,755,000    $11,800,000
Weighted interest rate 
  (at end of year)                 6.03%          6.31%          6.34%
Maximum balance 
  (at any month end)               $56,432,000    $45,650,000    $23,150,000
Average amount outstanding 
  (during the year)  (1)           $27,246,000    $23,779,000    $10,867,000
Weighted average interest rate 
  (during the year) (2)            4.30%          4.16%          5.97%

(1)	The average amount outstanding during the year was 
computed by adding amounts outstanding at the end of each month 
and dividing by twelve.

(2)	The weighted average interest rate during the year was 
computed by dividing the actual interest 	expense by the 
average bank call loans outstanding at the end of each month.

Aggregate interest paid by the Company on a cash basis during the 
years ended December 31, 1998, 1997, and 1996 was $16,643,000, 
$21,449,000 and $17,721,000, respectively.

6. Share capital
The Company's authorized share capital consists of (a) an unlimited 
number of first preference shares issuable in series; (b) an unlimited 
number of Class A non-voting shares; and (c) 99,680 Class B voting 
shares.

The Class A non-voting and the Class B voting shares are equal in 
all respects except that the Class A non-voting shares are non-voting.
	
All of the above-referenced classes of shares are without par value.

The Company's issued and outstanding share capital is as follows 
(no first preference shares have been issued):

                                           1998          1997           1996
12,241,269 (12,408,760 in 1997 and
  12,265,760 in 1996) Class A
  non-voting shares                 $36,392,000    $40,783,000    $39,688,000
99,680 Class B voting shares            133,000        133,000        133,000

                                    $36,525,000    $40,916,000    $39,821,000
F-10

The Company has outstanding options with certain employees to 
purchase a total of 1,266,110 Class A non-voting shares as follows:

Date of GrantNumber of SharesOption PriceExpiration Date
January 28, 1994    100,000    Cdn. $12.50      February 28, 1999
March 1, 1994       250,000    Cdn. $12.25      February 28, 1999
June 6, 1994         55,000    Cdn. $9.00       June 5, 1999
January 2, 1996      20,000    Cdn. $12.625     January 1, 2001
May 29, 1996        137,750    Cdn. $15.70      May 28, 2001
July 16, 1996       112,500    Cdn. $15.75      July 15, 2001
December 16, 1996     1,000    U.S. $14.375     December 15, 2001
December 31, 1996     5,000    Cdn. $19.80      December 31, 2001
January 7, 1997     78,820     U.S. $14.50      January 6, 2002
February 26, 1997   75,000     Cdn. $23.90      February 26, 2002
October 20, 1997    20,000     U.S. $20.875     October 19, 2002
December 23, 1997    5,000     U.S. $17.75      December 22, 2002
January 8, 1998    144,540     U.S. $18.00      January 7, 2003
January 29, 1998   185,000     U.S. $17.875     January 28, 2003
April 21, 1998      45,500     U.S. $21.50      April 20, 2003
October 20, 1998    11,000     U.S. $14.25      October 19, 2003

During 1998, options to purchase 206,000 Class A non-voting shares 
(100,000 in 1997 and 212,350 in 1996) were exercised for cash 
totaling $1,156,000 ($571,000 in 1997 and $1,175,000 in 1996). The 
number of options vested at December 31, 1998 was 376,500 
(335,000 in 1997 and 223,750 in 1996). The authorized number of 
Class A non-voting shares that may be made subject to options under 
the Company's employee stock option plans is 2,100,000.

The Company issued Class A non-voting shares from Treasury to 
the Company's 401(k) plan as follows:
                                             Issue price   Total
Year   Number of shares  Date of issue       per share     consideration paid
1996   70,000            January 14, 1997    $14.375       $1,006,000
1997   42,000            January 14, 1998    $17.6875      $743,000
1998   56,000            January 12, 1999    $17.875       $889,000

In 1998, the Company paid cash dividends to holders of Class A 
non-voting and Class B shares as follows (U.S. $0.24 in 1997):

Dividend 
per share    Record Date        Payment Date

US$0.07      February 6, 1998   February 20, 1998
US$0.07      May 8, 1998        May 22, 1998
US$0.07      August 7, 1998     August 21, 1998
US$0.07      November 6, 1998   November 20, 1998

F-11

The Company may purchase up to 790,000 Class A non-voting 
shares by way of a Normal Course Issuer Bid through the facilities 
of The Toronto Stock Exchange and/or the New York Stock 
Exchange. During the year ended December 31, 1998, the Company 
purchased 17,000 Class A non-voting shares for a total consideration 
of $299,000 under a Normal Course Issuer Bid which expired on 
July 1, 1998 and 398,500 Class A non-voting shares for a total 
consideration of $5,991,000 under the currently effective Normal 
Course Issuer Bid (27,000 shares for $482,000 in 1997 and nil in 
1996). Unless terminated earlier by the Company, it may continue to 
purchase shares up to July 2, 1999.

7. Contributed capital
Contributed capital represents the tax benefit on the difference 
between market price and exercise price on employee stock options 
exercised.

8. Income taxes  
The income tax provision shown in the consolidated statement of 
operations is reconciled to amounts of tax that would have been 
payable (recoverable) from the application of combined federal, 
state, provincial and local tax rates to pre-tax profit as follows:

                                           1998           1997           1996

Profit before income tax            $21,723,000    $46,484,000    $53,902,000

U.S. federal tax at 35%             $ 7,589,000    $16,289,000    $18,876,000
Canadian tax at 44%                      17,000        (25,000)       (13,000)
Combined state and local tax          2,877,000      6,558,000      7,378,000

Income taxes before under-noted      10,483,000     22,822,000     26,241,000
Tax effect of non-taxable interest 
  and dividends                        (244,000)       (88,000)      (271,000)
Tax effect of deductible state and 
  local taxes and other differences 
  between accounting and 
  taxable income                       (963,000)    (2,981,000)    (2,347,000)

Income taxes                         $9,276,000    $19,753,000    $23,623,000

Profit before income tax provision
Canadian operations                 $    39,000    $   (56,000)   $   (29,000)
U.S. operations                     $21,684,000    $46,540,000    $53,931,000
					     			
The current U.S. income tax provision in 1998 is $9,276,000 
($19,753,000 in 1997 and $23,623,000 in 1996).  The current 
Canadian income tax provision in 1998 is $39,000 (nil in 1997 and 
1996).

Aggregate deferred tax assets, which relate primarily to fixed assets and 
non-deductible expenses, are included in other assets and 
amounted to approximately $1,445,000.

On a cash basis, the Company paid income taxes for the years ended 
December 31, 1998, 1997 and 1996 in the amounts of  $21,170,000, 
$15,588,000 and $19,467,000, respectively.
F-12

9. Profit per share

                                             1998          1997          1996
Basic weighted average number of 
  shares outstanding                   12,575,905    12,494,054    12,296,197
Net effect, treasury stock method         365,412       383,887       287,039

Diluted common shares                  12,941,317    12,877,941    12,583,236

Net profit                            $12,447,000   $26,731,000   $30,279,000

Basic profit per share                      $0.99         $2.14         $2.46
Diluted profit per share                    $0.96         $2.08         $2.41

Statement of Financial Accounting Standards No.128 - Earnings Per 
Share ("FAS 128") requires a change in the method of calculation for 
both primary and fully-diluted earnings per share for periods ended 
after December 15, 1997. Earnings per share for the years ended 
December 31, 1997 and 1996 have been restated to comply with 
FAS 128.

FASB Statement No.123 "Accounting for Stock-Based 
Compensation" ("SFAS 123") was issued in 1995, and if fully 
adopted, changes the method for recognition of cost on stock 
compensation plans similar to those of the Company.

Adoption of SFAS 123's fair value recognition method is optional. 
The Company has chosen to continue to apply Accounting 
Principles Board Opinion No. 25, Accounting for Stock Issued to 
Employees, and related interpretations in accounting for its stock 
compensation plans.

The unaudited proforma results if compensation expense for the 
Company's 1998 grants for stock compensation had been determined 
in accordance with SFAS 123 are as follows:


                    December 31, 1998   December 31, 1997   December 31, 1996
                    As                  As                  As
                    Reported  Proforma  Reported  Proforma  Reported  Proforma
(000s omitted)
Net profit          $12,447   $11,857   $26,731   $26,406   $30,279   $30,117
Basic profit 
  per share         $0.99     $0.94     $2.14     $2.11     $2.46     $2.45
Diluted profit 
  per share         $0.96     $0.92     $2.08     $2.05     $2.41     $2.39

For purposes of the proforma presentation, the Company determined 
fair value using an option pricing model with the following weighted 
average assumptions for grants in 1998: risk-free interest rates 
ranging from 4.02% to 5.63% (5.68% to 6.37% in 1997 and 5.41% 
to 6.66% in 1996), expected dividend yield of 1.4%, expected life of 
5 years and expected volatility ranging from 24% to 30% (28% to 
33% in 1997 and 25% in 1996). The weighted average fair value of 
options granted during 1998 was $1,747,000 ($1,054,000 in 1997 
and $958,000 in 1996). The fair value is being amortized over five 
years on an after-tax basis, where applicable for purposes of 
proforma presentation. Stock options generally expire five years 
after the date of grant or three months after the date of retirement, if 
earlier. Stock options generally vest over a five year period with 0% 
in year one, 25% of the shares becoming exercisable on each of the 
next three anniversaries of the grant date and the balance vesting in 
the last six months of the option life. The vesting period is at the 
discretion of the Compensation and Stock Option Committee and is 
determined at the time of grant.
F-13

The effects of applying SFAS 123 in this proforma presentation are 
not indicative of future amounts because it does not take into 
consideration future grants, any difference between actual and 
assumed forfeitures, and only reflects grants subsequent to 
December 15, 1994.

10. Commitments and contingencies
(a)  The Company and its subsidiaries are obligated under lease 
agreements expiring at various dates through 2013 to pay the 
following future minimum rentals:

1999                   $6,386,000
2000                    5,727,000
2001                    4,998,000
2002                    4,068,000
2003 and thereafter    25,016,000
Total                 $46,195,000

Certain of the leases contain provisions for rent escalation based on 
increases in costs incurred by the lessor.

(b) The Company's rent expense for the years ended December 31, 
1998, 1997 and 1996 was $8,226,000, $6,689,000 and $5,566,000, 
respectively.

(c) The Company, through its subsidiaries, maintains contribution 
based retirement plans covering substantially all full-time U.S. 
employees.  The Fahnestock plan provides that the Company may 
make discretionary contributions.  

The FOM plan contributions are made in accordance with the terms of the 
Plan document. FOM also sponsors an unfunded Supplemental Executive 
Retirement Program ("SERP"), which is a non-qualified plan that provides 
certain former officers additional retirement benefits. Benefits payable 
under the SERP were approximately $2,450,000 at December 31, 1998.

The Company made contributions to the plans of $2,344,000, 
$2,207,000 and $1,922,000  in 1998, 1997 and 1996, respectively.

(d) At December 31, 1998, the Company has collateralized and 
uncollateralized letters of credit for $47,000,000. Collateral for these 
letters of credit include marketable securities of approximately 
$53,000,000, pledged to two financial institutions. No amounts have 
been drawn on the letters of credit at December 31, 1998.

(e) The Company is involved in certain litigation arising in the 
ordinary course of business. Management believes, based upon 
discussion with legal counsel, that the outcome of this litigation will 
not have a material effect on the Company's financial position. The 
materiality of legal matters to the Company's future operating results 
depends on the level of future results of operations as well as the 
timing and ultimate outcome of such legal matters.

(f) The Company's principal subsidiaries, Fahnestock and FOM , are 
subject to the uniform net capital requirements of the Securities and 
Exchange Commission ("SEC") under Rule 15c3-1 (the "Rule"). 
Fahnestock computes its net capital requirements under the 
alternative method provided for in the Rule which requires that 
Fahnestock maintain net capital equal to two percent of aggregate 
customer related debit items, as defined in SEC Rule 15c3-3. At 
December 31, 1998, Fahnestock had net capital of $97,958,000 
which was $89,925,000 in excess of the $8,033,000 required to be 
maintained at that date. FOM computes its net capital under the basic 
formula as provided by the Rule. At December 31, 1998, FOM had 
net capital of $9,969,000 which was $9,719,000 in excess of the 
$250,000 required to be maintained at that date.
F-14

11. Comparative figures
Certain 1996 figures have been reclassified in order to conform with 
the financial statement presentation adopted for 1997.

12. Acquisitions
On July 17, 1997, a subsidiary of the Company acquired 
approximately 99.4% of the outstanding common stock of First of 
Michigan Capital Corporation by way of a tender offer for cash 
consideration. On July 31, 1997, the Company acquired the 
remaining outstanding shares. The total purchase price was 
$37,609,000. The acquisition was accounted for by the purchase 
method as follows:

 Cash                                              $3,269,000 
 Receivable from brokers and others, net           69,885,000 
 Fixed assets                                       3,140,000
 Assets subsequently sold                             264,000 
 Other assets                                      11,713,000 

                                                   88,271,000 
 Deduct: 
 Loans and notes payable                          (43,217,000)
 Other liabilities                                (12,990,000)

 Fair value of assets acquired                     32,064,000 
 Purchase price paid                               37,609,000 
 Excess of cost over fair value allocated 
    to goodwill                                    $5,545,000

13. Financial instruments with off-balance sheet risk and 
concentration of credit risk
In the normal course of business, the Company's securities activities 
involve execution, settlement and financing of various securities 
transactions for customers. These activities may expose the 
Company to risk in the event customers, other brokers and dealers, 
banks, depositories or clearing organizations are unable to fulfill 
their contractual obligations.

The Company is exposed to off-balance sheet risk of loss on 
unsettled transactions in the event customers and other 
counterparties are unable to fulfill their contractual obligations. It is 
the Company's policy to review, as necessary, the credit standing of 
each counterparty with which it conducts business.

Securities sold, but not yet purchased represent obligations of the 
Company to deliver the specified security at the contracted price and 
thereby create a liability to repurchase the security in the market at 
prevailing prices. Accordingly, these transactions result in off-
balance-sheet risk, as the Company's ultimate obligation to satisfy 
the sale of securities sold, but not yet purchased may exceed the 
amount recognized on the balance sheet. Securities positions are 
monitored on a daily basis to minimize the risk of loss.

The Company's customer financing and securities lending activities 
require the Company to pledge customer securities as collateral for 
various financing sources such as bank loans and securities lending. 
At December 31, 1998, approximately $104,211,000 of customer 
securities are pledged as collateral for securities lending activities. 
Included in receivable from brokers and clearing organizations are 
receivables from five major broker-dealers totaling $70,171,000.
F-15

The Company monitors the market value of collateral held and the 
market value of securities receivable from others. It is the 
Company's policy to request and obtain additional collateral when 
exposure to loss exists. In the event the counterparty is unable to 
meet its contractual obligation to return the securities, the Company 
may be exposed to off-balance sheet risk of acquiring securities at 
prevailing market prices.

As part of its trading strategy, the Company uses derivative financial 
instruments. Principal transactions revenue, including derivatives, 
for the year ended December 31, 1998 included revenue from 
trading equities of $14,617,000 ($53,828,000 in 1997) and revenue 
from trading fixed income securities of $18,110,000 ($12,144,000 in 
1997).

Futures contracts, comprised mainly of stock index futures, represent 
commitments to purchase or sell securities at a future date and at a 
specified price. Credit risk and market risk exist with respect to these 
instruments. Credit risk associated with the contracts is limited to 
amounts recorded in the balance sheet. Notional or contractual 
amounts are used to express the volume of these transactions, and do 
not represent the amounts potentially subject to market risk. At 
December 31, 1998, the Company had open contracts to sell stock 
index futures contracts with notional values of approximately 
$18,682,000 ($19,582,000 in 1997). The fair value of these 
derivative financial instruments included in brokers and clearing 
organizations at December 31, 1998 was approximately $1,012,000 
($71,125 in 1997), and the monthly average fair values of the 
instruments during the year were assets of $738,000 and liabilities of 
$265,000 (assets of $133,000 and liabilities of $379,000 in 1997).

Cash is deposited to satisfy initial margin requirements for open 
futures contracts and is included in receivable from brokers and 
clearing organizations with any gain or loss from the unsettled 
futures transactions.

At December 31, 1998 the Company had outstanding commitments 
to buy and sell of $2,280,000 and $5,000,000, respectively,  of 
mortgage-backed securities on a when issued basis. These 
commitments have off-balance sheet risks similar to those described 
above.

14.  Impact of Recently Issued Accounting Standards
The Company has adopted Statement of Financial Accounting 
Standards No. 125, "Accounting for Transfers and Servicing of 
Financial Assets and Extinguishments of Liabilities" and No. 131, 
"Disclosures about Segments of an Enterprise and Related 
Information".

New accounting standards issued but not effective would not have a 
material impact on the Company's financial statements. 

15. Related Party Transactions
The Company has retention notes and accounts receivable for 
employees, net, of approximately $3,447,000 at December 31, 1998. 
These amounts will be forgiven over a three year period from the 
initial date of the loan and are contingent on their continued 
employment with the Company. The unamortized potion of the 
notes become due on demand in the event the employee departs 
during the three year period.
F-16

16. Segment Information
The Company has determined that its reportable segments are those 
that are based on the Company's method of internal reporting, which 
disaggregates its retail business by branch and its proprietary and 
investment banking businesses by product. The Company's segments 
are: Retail Branches which includes all business generated by the 
Company's 73 branches, including commission and fee income 
earned on client transactions; Capital Markets which includes 
market-making activities in over-the-counter equities, institutional 
trading in both fixed income and equities, structured assets 
transactions, bond trading,  trading in mortgage-backed securities, 
corporate underwriting activities, public finance activities, and 
syndicate participation; Interest which is derived from client margin 
accounts, stock loan activities and financing activities;  and Asset 
Management which includes fees from money market funds and the 
investment management services of Hudson Capital and 
Fahnestock's asset management divisions employing various 
programs to professionally manage client assets either in individual 
accounts or in funds.  The Company evaluates the performance of its 
segments and allocates resources to them based upon profitability.

The table below presents information about the reported operating 
income of the Company for the year ended December 31, 1998. The 
Company's business is predominantly in the U.S.  Asset information 
by reportable segment is not reported, since the Company does not 
produce such information for internal use.


Year ended December 31,199819971996
Revenue:
   Retail Branches                $138,862,000    $116,173,000    $96,199,000
   Capital Markets                  38,153,000      74,728,000     73,765,000
   Asset Management                 11,740,000      10,031,000     11,535,000
   Interest                         38,810,000      38,917,000     31,414,000
   Other                             5,216,000       2,309,000      1,075,000
Total                             $232,781,000    $242,158,000   $213,988,000

Operating Income:
   Retail Branches                  $3,579,000      $1,712,000       $972,000
   Capital Markets                  (5,530,000)     19,425,000     27,734,000
   Asset Management                  7,361,000       6,282,000      4,971,000
   Interest                         17,078,000      16,552,000     13,942,000
   Other                              (765,000)      2,513,000      6,283,000
Total                              $21,723,000     $46,484,000    $53,902,000


16. Subsequent event
On January 1, 1999, Fahnestock purchased the operating assets of 
FOM at carrying value and hired all of its personnel. FOM is now 
operating as a division of Fahnestock.

On January 28, 1999, a cash dividend of U.S.$0.07 per share 
(totaling $893,000) was declared payable on February 26, 1999 to 
holders of Class A non-voting and Class B shares of record on 
February 12, 1999. 
F-17


                            EXHIBIT INDEX
Unless designated by an asterisk indicating that such document has 
been filed herewith, the Exhibits listed below have been heretofore 
filed by the Company pursuant to Section 13 or 15(d) of the 
Exchange Act and are hereby incorporated herein by reference to the 
pertinent prior filing.
Number/
Description/
Page

3 (a)
Articles of Incorporation, as amended, of Fahnestock Viner Holdings 
Inc. (previously filed as exhibits to Form 20-F for the fiscal year 
ended December 31, 1986 and 1988).

3(b)
By-Laws, as amended, of Fahnestock Viner Holdings Inc. 
(previously filed as an exhibit to Form 20-F for the fiscal year ended 
December 31, 1987).

10(b)
Supplemental Legend to 1986 Incentive Stock Option Plan 
(previously filed as an exhibit to the registrant's registration 
statement on Form S-8 (file no. 33-38134)

10(c)
Supplemental Legend to 1986 Employee Stock Option Plan  
(previously filed as an exhibit to the registrant's registration 
statement on Form S-8 (file no. 33-38134)

10(d)
Fahnestock Viner Holdings Inc. 1986 Incentive Stock Option Plan , 
Amended and Restated as at April 26, 1991 (previously filed as an 
exhibit to Form 10-K for the year ended December 31, 1992)

10(e)
Fahnestock Viner Holdings Inc. 1986 Employee Stock Option Plan, 
Amended and Restated as at April 26, 1991 (previously filed as an 
exhibit to Form 10-K for the year ended December 31, 1992)

10(f)
Fahnestock Viner Holdings Inc. 1996 Equity Incentive Plan, 
Amended and Restated as at January 7, 1997 (previously filed as an 
exhibit to Form 10-K for the year ended December 31, 1996)

10(g)
Fahnestock Viner Holdings Inc. 1996 Equity Incentive Plan 
Amendment No. 1 dated March 25, 1997 (previously filed as an 
exhibit filed to Form 10-K for the year ended December 31, 1997)

10(h)
Lease document for the premises at 125 Broad Street, New York, 
NY dated May 27, 1997 between NY Broad Holdings, Inc. and 
Fahnestock & Co. Inc. (previously filed as an exhibit filed to Form 
10-K for the year ended December 31, 1997)

10(i)
Lease document for the premises at 300 River Place, Detroit, MI 
dated February 28, 1997 between The Stroh Companies, Inc. and 
First of Michigan Corporation (previously filed as an exhibit filed to 
Form 10-K for the year ended December 31, 1997)

10(j)
Stock Appreciation Agreement between Fahnestock & Co. Inc. and 
Albert G. Lowenthal dated February 15, 1995 (previously filed as an 
exhibit filed to Form 10-K for the year ended December 31, 1997)

10(k)
Performance-Based Compensation Agreement between Fahnestock 
Viner Holdings Inc. and Albert G. Lowenthal dated March 25, 1997 
(previously filed as an exhibit filed to Form 10-K for the year ended 
December 31, 1997)

10(l)
Securities Purchase Agreement dated June 11, 1997, between 1888 
Limited Partnership and  DST Systems Inc. and Purchaser 
(previously filed as an exhibit to Schedule 14D-1 and Schedule 13D 
for First of Michigan Capital Corporation dated June 18, 1997)

21
Subsidiaries of the registrant (filed herewith) *

27
Financial Data Schedules, as required by Item 601(c)(2)(1) of 
Regulations S-K and S-B (filed herewith)  *

E-1