Southern Timber Partners 2 is a limited partnership formed in
1982 to invest in timberland in the southeastern United States.
At December 31, 1996, the Partnership's properties consisted of
approximately 1,953 acres of timberland on two separate tracts,
and a 76% share of a 1,709 acre tract, all located in Georgia.


                            Contents

                   1     Message to Investors
                   3     Tract Profiles
                   4     Financial Statements
                   6     Notes to the Financial Statements
                  10     Report of Independent Auditors

 
         Administrative Inquiries       Performance Inquiries/Form 10-Ks
         Address Changes/Transfers      First Data Investor Services Group
         Service Data Corporation       P.O. Box 1527
         2424 South 130th Circle        Boston, Massachusetts  02104-1527
         Omaha, Nebraska  68144-2596    Attn.:  Financial Communications
         800-223-3464                   800-223-3464


                      Message to Investors

Presented for your review is the 1996 Annual Report for Southern
Timber Partners 2 (the "Partnership"). This report includes an
update on the status of Partnership's three remaining timberland
tracts, the Claxton tract, the Southern Timberlands tract and the
76% interest in the Laurel View tract.  Following this letter is
a profile of these tracts and the Partnership's audited financial
statements for the year ended December 31, 1996.

Cash Distribution
The Partnership paid a cash distribution in the amount of
approximately $45.00 per Unit on August 9, 1996, from the
Partnership's cash reserves.  Including this distribution,
Limited Partners have received cash distributions totaling $304
per original $500 Unit.  As a result of these distributions,
which represent returns of capital, the size of each Partnership
Unit has been reduced to $196.  The General Partner will continue
to evaluate the Partnership's cash needs to determine if and when
any future distributions can be made.

Partnership Timberland
Market conditions for the sale of timberland remained relatively
favorable during 1996, and as mentioned above, in the fourth
quarter of 1996, the Partnership sold the Gray Tract for net
proceeds of $475,048.  The Partnership's remaining timberland
investments are the Claxton Tract and Southern Timberlands Tract,
which are located in Georgia and total approximately 1,953 acres.
Additionally, the Partnership owns a 76% share in the 1,709 acre
Laurel View Tract, also located in Georgia. The General Partner
has begun marketing the Claxton and Southern Timberlands tracts
for sale, and has engaged a local real estate brokerage firm to
assist with these efforts.  However, there can be no assurance
that any particular price will be obtained or that a sale will
occur by any particular date.

The Partnership completed no timber-only sales during the year
since the majority of the Partnership's timber was harvested in
the late 1980s.  Although the land was reforested after
harvesting, generally the timber must be at least 15 years old
before it can be cut and sold.

Laurel View Tract
The Partnership owns a 76% interest in the Laurel View Tract, a
1,709 acre site located approximately 30 miles south of Savannah,
Georgia.  The Partnership's interest in the tract is owned as
part of a joint venture with an affiliated partnership, Southern
Timber Partners I.  Both partnerships have begun working together
to market the parcel, and discussions have been held with both
principals and brokers regarding a sale.  The General Partner has
determined the Partnership is likely to realize the highest sales
price if the tract is marketed as a site for development rather
than as timberland.  While some local developers have shown an
interest in the tract, the General Partner believes expanding its
marketing efforts will better maximize the tract's value.
Consequently, during the fourth quarter of 1996, the General
Partner engaged the services of CB Commercial, a national
commercial real estate brokerage firm, to assist in marketing the
tract.  CB Commercial will use its national presence to give the
tract broad exposure to a large pool of potential buyers.
Considering the Laurel View Tract is raw land containing few
improvements and that it produces no income other than from the
sale of timber, the General Partner anticipates it may require
several months or longer to secure an appropriate buyer for the
property.  Although the General Partner will attempt to sell the
tract during 1997, there can be no assurance a sale will occur or
that any particular price will be obtained.  In the event that a
sale is not consummated, the Partnership will continue to hold
the property as an investment and continue to search for a
potential purchaser.

Financial Highlights
For the years ended December 31,
                        1996       1995        1994        1993         1992
Total Assets        $6,627,118  $8,462,220  $8,524,218  $8,800,557  $10,621,193
Total Income           148,128      72,029      28,075      73,458      141,587
Net Loss               (77,658)   (101,492)   (257,299)   (149,663)    (486,961)
Net Loss per Unit        (2.07)      (2.70)      (6.85)      (3.98)      (12.96)
Distributions per Unit   45.00        -           -          45.00         -

                                                                       
Total income increased in 1996, primarily due to higher interest
income resulting from the Partnership's higher average cash
balance in 1996 and larger gain on sales of timberland during
1996, compared to 1995.  The higher income resulted in a lower
net loss for the year.

Net Asset Value
As of December 31, 1996, based on the appraised value of the
tracts and taking into account the Partnership's other assets and
liabilities, the General Partner has determined the Net Asset
Value to be $210.26 per $196 limited partnership Unit.  Limited
Partners should note that appraisals are only estimates of
current value and actual values realizable upon sale may be
substantially different.  Significant factors in establishing an
appraised value are the actual selling price for tracts which the
appraiser believes are comparable and the rates used by the
appraiser to estimate timber growth.  Because of the nature of
the Partnership's properties, there can be no assurance that the
other tracts reviewed by the appraiser are comparable.
Additionally, the appraised value does not reflect the actual
costs which would be incurred in selling the tracts.  As a result
of these factors and the illiquid nature of an investment in
Units of the Partnership, the variation between the appraised
value of the Partnership's tracts and the price at which Units of
the Partnership could be sold is likely to be significant.
Fiduciaries of Limited Partners which are subject to ERISA or
other provisions of law requiring valuation of Units should
consider all relevant factors, including, but not limited to the
Net Asset Value, in determining the fair market value of the
investment in the Partnership for such purposes.

General Information
As you are probably aware, several third parties have commenced
partial tender offers to purchase units of the Partnership at
grossly inadequate prices which are substantially below the
Partnership's Net Asset Value.  In response, we recommended that
limited partners reject these offers because they do not reflect
the underlying value of the Partnership's assets.  To date,
holders of over 98% of the outstanding units agreed that these
offers were inadequate, rejected the offer and did not tender
their units.  Please be assured that if any additional tender
offers are made for your units, we will make every effort to
provide you with our position regarding such offer on a timely
basis.

Summary
In the year ahead, the General Partner will focus on effectively
managing the Partnership's timber stands and marketing the
timberland tracts for sale.  Although the General Partner
anticipates selling the remainder of the Partnership's assets
during 1997, there can be no assurance that the Partnership will
consummate a sale of its assets prior to December 31, 1997, the
Partnership's termination date.  As per the Partnership
Agreement, the General Partner may extend the life of the
Partnership beyond the termination date if it is determined that
a sale of the Partnership's assets at that time would cause undue
loss to the partners.  In the event that a sale is not
consummated, the Partnership will continue to hold the property
as an investment and continue to search for a potential
purchaser.  We will provide you with an update on our progress in
future correspondence.

Very truly yours,

Southern Timber Partners 2

Timber Resources Corp. II
General Partner

/s/ Robert J. Hellman

Robert J. Hellman
President

March 24, 1997



                         Tract Profiles


  Claxton Tract

               Acres:  1,780
            Location:  Laurens County, Georgia (near Macon)
       Purchase Date:  May 18, 1983
1996 Appraised Value: $1,360,000 ($570,000 - timberland, $790,000 - timber )
       Timber Stands:  7% merchantable, 80% premerchantable, 13% clear-cut


                                                                
  Laurel View Tract
  (This tract is owned as part of a joint venture between
  Southern Timber Partners I and Southern Timber Partners 2.
  Southern Timber Partners I owns a 24% interest in the joint
  venture.)

               Acres: 1,709
            Location: Liberty County, Georgia bordering Laurel View River and
                      Jones Creek (approximately 30 miles south of Savannah)
       Purchase Date: September 30, 1987
1996 Appraised Value: $7,370,000 ($6,170,000 - timberland, $1,200,000 - timber)
      Timber Stands: 68% merchantable, 10% premerchantable, 22% non-merchantable

                                                                    

Southern Timberlands Tract

              Acres:  173
           Location:  Emmanuel County, Georgia
      Purchase Date:  December 28, 1983
1996 Appraised Value: $94,000 ($45,000- timberland, $49,000 - timber)
      Timber Stands:  14% merchantable, 86% premerchantable
                                                              

merchantable - timber which is generally fifteen years and older and suitable
for current harvesting

premerchantable -   timber which is less than fifteen years old and not
suitable for current harvesting

clear-cut -    timberland on which all the timber has been harvested


Balance Sheets                              At December 31,  At December 31,
                                                      1996             1995
Assets
Timber and timberland, at cost                    $1,160,233     $3,494,679
Less accumulated depletion                              -        (1,915,663)
 Net timber and timberland                         1,160,233      1,579,016
Cash and cash equivalents                            914,981      2,332,145
Prepaid insurance                                      2,450          4,813
Due from related party                                31,850           -
Investment in joint venture                        4,517,604      4,546,246
  Total Assets                                    $6,627,118     $8,462,220
Liabilities and Partners' Capital
Liabilities:
 Accounts payable and accrued expenses            $   34,800       $ 35,998
 Due to affiliates                                    66,535        131,981
  Total Liabilities                                  101,335        167,979
Partners' Capital (Deficit):
 General Partner                                     (41,996)       (24,311)
 Limited Partners (37,191 units outstanding)       6,567,779      8,318,552
  Total Partners' Capital                          6,525,783      8,294,241
  Total Liabilities and Partners' Capital         $6,627,118     $8,462,220


                                                                

Statements of Partners' Capital (Deficit)
For the years ended December 31, 1996, 1995 and 1994
                                   General       Limited
                                   Partner       Partners       Total
Balance at December 31, 1993      $(20,723)    $8,673,755    $8,653,032
Net Loss                            (2,573)      (254,726)     (257,299)
Balance at December 31, 1994       (23,296)     8,419,029     8,395,733
Net Loss                            (1,015)      (100,477)     (101,492)
Balance at December 31, 1995       (24,311)     8,318,552     8,294,241
Cash distributions                 (16,908)    (1,673,892)   (1,690,800)
Net Loss                              (777)       (76,881)      (77,658)
Balance at December 31, 1996      $(41,996)    $6,567,779    $6,525,783

Statements of Operations
For the years ended December 31,         1996        1995        1994
Income
Gain (loss) on sales of timberland    $ 56,265    $   2,358     $(18,884)
Interest                                88,788       59,220       28,924
Other                                    3,075       10,451       18,035
  Total Income                         148,128       72,029       28,075
Expenses
Property operating                      75,735       96,387      158,673
General and administrative             121,409       84,876       81,989
  Total Expenses                       197,144      181,263      240,662
Other Income (Loss)
Income (loss) from joint venture       (28,642)       7,742      (44,712)

  Net Loss                            $(77,658)   $(101,492)  $(257,299)
Net Loss Allocated:
To the General Partner                $   (777)   $  (1,015)    $(2,573)
To the Limited Partners                (76,881)    (100,477)   (254,726)
                                      $(77,658)   $(101,492)  $(257,299)
Per limited partnership unit
(37,191 outstanding)                    $(2.07)      $(2.70)     $(6.85)




Statements of Cash Flows
For the years ended December 31,                  1996        1995        1994
Cash Flows From Operating Activities
Net Loss                                      $(77,658)  $(101,492)  $(257,299)
Adjustments to reconcile net loss to net cash
provided by (used for) operating activities:
 (Gain) loss on sales of timberland            (56,265)     (2,358)     18,884
 (Income) loss from joint venture               28,642      (7,742)     44,712
 Increase (decrease) in cash arising from
 changes in operating assets and liabilities:
  Accounts receivable                             -         73,539     (73,539)
  Prepaid insurance                              2,363       1,109      (5,922)
  Due from related party                       (31,850)      8,494      (8,494)
  Accounts payable and accrued expenses         (1,198)    (22,901)     (2,077)
  Due to affiliates                            (65,446)     62,395     (16,963)
Net cash provided by (used for) operating
  activities                                  (201,412)     11,044    (300,698)
Cash Flows From Investing Activities
 Proceeds from sales of timberland             475,048   1,632,099     139,023
Net cash provided by investing activities      475,048   1,632,099     139,023
Cash Flows From Financing Activities
 Cash distributions paid                    (1,690,800)       -           -
Net cash used for financing activities      (1,690,800)       -           -
Net increase (decrease) in cash and
 cash equivalents                           (1,417,164)  1,643,143    (161,675)
Cash and cash equivalents,
  beginning of period                        2,332,145     689,002     850,677
Cash and cash equivalents,
  end of period                               $914,981  $2,332,145    $689,002


Notes to the Financial Statements
December 31, 1996, 1995 and 1994

1. Organization
Southern Timber Partners 2 (the "Partnership") formerly Hutton
Southern Timber Partners 2, was organized as a limited
partnership under the laws of the State of Georgia pursuant to a
Certificate and Agreement of Limited Partnership (the
"Partnership Agreement") dated and filed September 30, 1982.  The
general partner is Timber Resources Corp. II (the "General
Partner") formerly Hutton Timber Resources Corp. II, a Delaware
corporation.  The Partnership was formed for the purpose of
making investments in timberland and timber cutting rights in the
Southeastern United States.  The Partnership will continue until
December 31, 1997, unless terminated sooner in accordance with
the terms of the Partnership Agreement.  However, the Partnership
Agreement states that the General Partner can extend the life of
the Partnership beyond the termination date if it is determined
that a sale of the timberland at that time would cause undue loss
to the partners.

On July 31, 1993, Shearson Lehman Brothers Inc. sold certain of
its domestic retail brokerage and asset management businesses to
Smith Barney, Harris Upham & Co. Incorporated ("Smith Barney").
Subsequent to the sale, Shearson Lehman Brothers Inc. changed its
name to Lehman Brothers Inc. ("Lehman Brothers").  The
transaction did not affect the ownership of the general partner.
However, the assets acquired by Smith Barney included the name
"Shearson" and the name "Hutton."  Consequently, the names of the
Partnership and the General Partner were changed to Southern
Timber Partners 2 and Timber Resources Corp. II respectively, to
delete any reference to "Hutton."

On February 16, 1996, based upon, among other things, the advice
of legal counsel, the General Partner adopted a resolution that
states, among other things, if a Change of Control (as defined
below) occurs, the General Partner may distribute the
Partnership's cash balances not required for its ordinary course
day-to-day operations.  "Change of Control" means any purchase or
offer to purchase more than 10% of the Units that is not approved
in advance by the General Partner.  In determining the amount of
the distribution, the General Partner may take into account all
material factors.  In addition, the Partnership will not be
obligated to make any distribution to any partner and no partner
will be entitled to receive any distribution until the General
Partner has declared the distribution and established a record
date and distribution date for the distribution.  The Partnership
filed a Form 8-K disclosing this resolution on February 26, 1996.

2. Significant Accounting Policies
Basis of Accounting  The accompanying financial statements have
been prepared on the accrual basis of accounting in accordance
with generally accepted accounting principles.  Revenues are
recognized as earned and expenses are recorded as obligations are
incurred.

Timberland Investments Timberland investments include the initial
purchase price of the property, closing costs,  acquisition and
legal fees, as well as land improvements and reforestation costs.

Depletion of timberlands is provided by applying a cost per cord
utilizing estimates of total recoverable timber from each tract.
Such estimates are revised annually to account for additional
growth.

Accounting for Impairment  In March 1995, the Financial
Accounting Standards Board issued Statement of Financial
Accounting Standards No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed Of"
("FAS 121") which requires impairment losses to be recorded on
long-lived assets used in operations when indicators of
impairment are present and the undiscounted cash flows estimated
to be generated by those assets are less than the assets'
carrying amount.  FAS 121 also addresses the accounting for long-
lived assets that are expected to be disposed of.  The
Partnership adopted FAS 121 in the fourth quarter of 1995.

Cash Equivalents Cash equivalents consist of short-term, highly
liquid investments with maturities of three months or less from
the date of issuance.  The carrying amount approximates fair
value because of the short maturity of these instruments.

Concentration of Credit Risk  Financial instruments which
potentially subject the Partnership to a concentration of credit
risk principally consist of cash in excess of the financial
institutions' insurance limits.  The Partnership invests
available cash with high credit quality financial institutions.

Investment in Joint Venture The Partnership accounts for its
investment in the Joint Venture under the equity method of
accounting.

Income Taxes No provision for income taxes has been made in the
financial statements since such taxes are the responsibility of
the individual partners rather than that of the Partnership.

Use of Estimates 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 disclosure of
contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses
during the reporting period.  Actual results could differ from
those estimates.

The ownership and operation of timber properties involves a
number of risks, among others, changes in governmental
regulations, fire hazards, insect damage, diseases and timber
theft, and risks of market fluctuations.  The General Partner
believes the employment of good forestry management practices
helps to ameliorate the physical risks of timber investments,
however, these risks cannot be eliminated entirely.

3. Partnership Allocations
Distribution of Partnership Funds Net cash from operations and
net proceeds from sales will be distributed from time to time at
the discretion of the General Partner, 99% to the Limited
Partners and 1% to the General Partner until each Limited Partner
has received an amount equal to an 8% cumulative annual return on
his adjusted capital value, as defined in the Partnership
Agreement, plus an amount equal to 100% of his adjusted capital
value.  Thereafter, cash distributions will be distributed 85% to
the Limited Partners and 15% to the General Partner.

Allocation of Income and Loss All income shall be allocated each
year to the General Partner in an amount equal to the net cash
from operations distributed or distributable and net proceeds
from sales distributed or distributable to the General Partner
for such year.  The balance shall be allocated to the Limited
Partners, pro rata, in accordance with their ownership of units.
If for any year, no net cash from operations and net proceeds
from sales are distributed or distributable to the General
Partner, any income for such year shall be allocated 99% to the
Limited Partners and 1% to the General Partner.  All losses,
including losses from the sale of properties, shall be allocated
99% to the Limited Partners and 1% to the General Partner.

Dissolution of Partnership  If, upon dissolution of the
Partnership, the General Partner has a negative capital account,
it shall contribute capital equal to the amount of the deficit.
In no event, however, shall the required capital contribution
exceed 1% of the total capital contributed by the Limited
Partners.

4. Transactions with Related Parties
Amounts earned by the General Partner and its affiliates for
management and supervisory fees totaled $65,587, $73,129 and
$72,275 for the years ended December 31, 1996, 1995 and 1994,
respectively.  Amounts earned by the General Partner and its
affiliates are included in property operating expenses.

In 1996, 1995 and 1994, timberland brokerage fees of $3,996,
$23,199 and $4,171, respectively, were not accrued because it is
not expected that such fees will be paid since they are
subordinate to the limited partners' "Priority Return" as defined
in the Partnership Agreement.

5. Sales of Timberland

During 1996, the Partnership made the following sales of
timberland:

                                                  Net       Gain
                                   Acres       Selling     (Loss)
Date                     Tract      Sold        Price      on Sale
October 30, 1996          Gray       486       $280,545    $24,638
November 20, 1996         Gray       104         61,294      6,284
December 10, 1996         Gray        99         59,017      6,319
December 20, 1996         Gray       104         74,192     19,024
                                               $475,048    $56,265

During 1995, the Partnership made the following sales of
timberland:

                                                   Net         Gain
                                   Acres         Selling      (Loss)
Date                     Tract      Sold          Price       on Sale
April 28, 1995            Gray        74         $42,071      $10,826
August 10, 1995        Claxton     1,185         627,802      (34,454)
October 3, 1995        Claxton       244         116,503       19,834
October 4, 1995           Gray        49          27,199        2,773
December 8, 1995          Gray       317          87,307       15,266
December 14, 1995      Claxton     1,759         731,217      (11,887)
                                              $1,632,099       $2,358

During 1994, the Partnership made the following sales of
timberland:

                                                    Net       Loss
                                   Acres        Selling        on
Date                     Tract      Sold          Price       Sale
June 1, 1994              Gray       287       $ 65,484    $ (8,916)
December 21, 1994         Gray       311         73,539      (9,968)
                                               $139,023    $(18,884)


6. Investment in Joint Venture
On October 13, 1987, the Partnership contributed $3,011,417 in
cash to a newly formed joint venture, Southern Timber Venture
Partners 1 (the "Joint Venture"), formerly Hutton Timber Venture
Partners 1, in exchange for a 76% interest in profits, losses and
distributable cash from the Joint Venture.  An affiliated
partnership, Southern Timber Partners I, formerly Hutton Southern
Timber Partners I, contributed 1,239 acres of timberland with an
appraised value of $946,676 to the Joint Venture in exchange for
the remaining 24% interest in profits, losses and distributable
cash.  The purpose of the Joint Venture is to manage, maintain
and commercially exploit the acquired property in a manner
consistent with each coventurer's objectives for investment.  The
Joint Venture Agreement provides that all major decisions, as
defined, must be approved by each of the coventurers.

On October 15, 1987 the aforementioned contributions were
substantially applied to the acquisition of the Laurel View
Tract, located in Liberty County, Georgia, totaling 1,709 acres.
In order to pay off a Joint Venture promissory note in 1988, the
Partnership contributed $1,486,934, or 76% of total principal and
interest due.  The remainder was contributed by Southern Timber
Partners I.

The General Partner has developed a marketing plan for the tract
and began actively marketing the land during 1996.  However,
there is no assurance that a sale will be consummated prior to
the end of 1997.  The Joint Venture's balance sheets at December
31, 1996 and 1995 and statements of operations for the three
years ended December 31, 1996, 1995 and 1994 are as follows:

Balance Sheets
December 31, 1996 and 1995

Assets                                        1996           1995
Net timberland                            $5,949,788     $5,949,788
Cash                                          38,963         37,152
  Total Assets                            $5,988,751     $5,986,940
Liabilities and Partners' Capital
Liabilities:
 Due to affiliates                        $   42,038       $  5,040
 Deferred income                               2,500           -
  Total Liabilities                           44,538          5,040
Partners' Capital:
 Southern Timber Partners I                1,426,609      1,435,654
 Southern Timber Partners 2                4,517,604      4,546,246
  Total Partners' Capital                  5,944,213      5,981,900
  Total Liabilities and Partners' Capital $5,988,751     $5,986,940



Statements of Operations
For the years ended December 31, 1996, 1995 and 1994

Income                              1996         1995        1994
Timber sales                    $   -         $93,776    $   -
Interest                           1,847        3,410       1,785
Other                              2,500        4,900       5,000
 Total Income                      4,347      102,086       6,785
Expenses
Depletion                           -          27,621        -
Property operating                42,034       62,523      37,553
General and administrative          -           1,756      28,063
 Total Expenses                   42,034       91,900      65,616
 Net Income (Loss)              $(37,687)     $10,186    $(58,831)


7. Reconciliation of Net Loss to Taxable Loss
For the years ended December 31, 1996, 1995 and 1994, taxable
losses of approximately $(76,000), $(103,000), and $(257,000),
respectively, were reported to the partners compared to net
losses of approximately $(78,000), $(101,000), and $(257,000),
respectively, reported in the financial statements.



                 Report of Independent Auditors

To Partners
Southern Timber Partners 2

We have audited the accompanying balance sheets of Southern
Timber Partners 2 as of December 31, 1996 and 1995, and the
related statements of operations, partners' capital (deficit) and
cash flows for each of the three years in the period ended
December 31, 1996.  These financial statements are the
responsibility of the Partnership's management.  Our
responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in accordance with generally accepted
auditing standards.  Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement.  An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation.  We believe that
our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position
of Southern Timber Partners 2 at December 31, 1996 and 1995, and
the results of its operations and its cash flows for each of the
three years in the period ended December 31, 1996, in conformity
with generally accepted accounting principles.

                                                ERNST & YOUNG LLP

Boston, Massachusetts
January 16, 1997