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

                                   FORM 10-Q



[X]   Quarterly Report Pursuant to Section 13 or 15(d) of the
      Securities Exchange Act of 1934.
[ ]   Transition Report Pursuant to Section 13 or 15(d) of the
      Securities Exchange Act of 1934.

For Quarter Ended June 30, 1997    
Commission File Number 0-11951


                                 JSCE, Inc.                                
            (Exact name of registrant as specified in its charter)

           Delaware                                     37-1337160 
         
(State or other jurisdiction of   (IRS Employer Identification No.) 
 incorporation or organization)

   8182 Maryland Avenue,  St. Louis, Missouri          63105  
     (Address of principal executive offices)           (Zip Code)

                               (314) 746-1100                      
              (Registrant's telephone number, including area code)

                               Not Applicable                      
              (Former name, former address and former fiscal year,
               if changed since last report)

      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     

                     APPLICABLE ONLY TO CORPORATE ISSUERS:


      As of June 30, 1997, the registrant had outstanding 1,000
shares of common stock, $.01 par value per share.
<PAGE>
                        PART I - FINANCIAL INFORMATION

Item 1.   Financial Statements
<TABLE>
<CAPTION>
                                   JSCE, Inc.         
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                                 (In millions)
                                  (Unaudited)

                                              Three months ended     Six months ended   
                                                   June 30,               June 30,     
                                             1997        1996       1997       1996 

<S>                                         <C>         <C>      <C>        <C>
Net sales                                   $ 785       $ 844    $ 1,563    $ 1,760

Costs and expenses
  Cost of goods sold                          676         689      1,351      1,400
  Selling and administrative expenses          65          63        129        130

    Income from operations                     44          92         83        230

Interest expense, net                         (47)        (48)       (94)       (99)

            
                                                 
    Income (loss) before income taxes and
      extraordinary item                       (3)         44        (11)       131

Provision for income taxes                      1          17                    51

    Income (loss) before extraordinary item    (4)         27        (11)        80

Extraordinary item
  Loss from early extinguishment of debt,
    net of income tax benefits                             (4)                   (4)

    Net income (loss)                       $  (4)      $  23     $  (11)   $    76
</TABLE>

See notes to consolidated financial statements.
<PAGE>
<TABLE>
<CAPTION>
                                      JSCE, Inc.         
                             CONSOLIDATED BALANCE SHEETS
                          (In millions, except share data)
                                                  
                                                          June 30,          December 31,  
                                                            1997                1996    
                                                        (unaudited)      
<S>                                                      <C>                 <C>
Assets
Current assets
  Cash and cash equivalents                              $    10             $    12
  Receivables, less allowances of
    $9 in 1997 and 1996                                      281                 279
  Refundable income taxes                                      9                   1
  Inventories
    Work-in-process and finished goods                        86                  81
    Materials and supplies                                   121                 126
                                                             207                 207
  Deferred income taxes                                       42                  46
  Prepaid expenses and other current assets                    4                   7
    Total current assets                                     553                 552

Net property, plant and equipment                          1,489               1,466
         
Timberland, less timber depletion                            259                 263

Goodwill, less accumulated amortization of
  $54 in 1997 and $50 in 1996                                243                 246
Other assets                                                 151                 161
                                                         $ 2,695             $ 2,688

Liabilities and Stockholder's Deficit
Current liabilities                                             
  Current maturities of long-term debt                   $     9             $    10
  Accounts payable                                           293                 290
  Accrued compensation and payroll taxes                      88                  92
  Interest payable                                            25                  30
  Other accrued liabilities                                   92                 103
    Total current liabilities                                507                 525

Long-term debt, less current maturities                    1,981               1,934

Other long-term liabilities                                  231                 241

Deferred income taxes                                        362                 363

Stockholder's deficit                                           
  Common stock, par value $.01 per share;
    1,000 shares authorized and outstanding
  Additional paid-in capital                               1,102               1,102
  Retained earnings (deficit)                             (1,488)             (1,477)
    Total stockholder's deficit                             (386)               (375)
                                                         $ 2,695             $ 2,688
</TABLE>
See notes to consolidated financial statements.    
<PAGE>
<TABLE>
<CAPTION>
                                        JSCE, Inc.         
                          CONSOLIDATED STATEMENTS OF CASH FLOWS
                                      (In millions)
                                       (Unaudited)

                                                            Six months ended  
                                                                June 30,      
                                                            1997        1996  

<S>                                                       <C>         <C>
Cash flows from operating activities                                        
  Net income (loss)                                       $  (11)     $   76
  Adjustments to reconcile net income (loss) to 
  net cash provided by operating activities
    Extraordinary loss from early extinguishment of debt                   7
    Depreciation, depletion and amortization                  71          67
    Amortization of deferred debt issuance costs               6           7
    Deferred income taxes                                      3          12
    Non-cash employee benefit expense                          4           6
    Change in current assets and liabilities,
      net of effects from acquisitions
        Receivables                                           (3)         31
        Inventories                                            1          29
        Prepaid expenses and other current assets              3           2
        Accounts payable and accrued liabilities             (19)          5
        Interest payable                                      (6)         (7)
        Income taxes payable                                  (9)          1
    Other, net                                                (3)         (4)
  Net cash provided by operating activities                   37         232

Cash flows from investing activities
  Property additions                                         (72)        (54)
  Timberland additions                                        (7)        (11)
  Construction funds held in escrow                            6          (9)
  Acquisition of businesses, net of cash acquired             (9)
  Proceeds from property and timberland disposals              3           5
  Net cash used for investing activities                     (79)        (69)

Cash flows from financing activities
  Net borrowings (repayments) under accounts
    receivable securitization program                          4         (14)
  Proceeds from long-term borrowings                                     260
  Net borrowing (repayment) of long-term debt                 36        (418)
  Deferred debt issuance costs                                            (6)
  Net cash provided by (used for) financing activities        40        (178)

Decrease in cash and cash equivalents                         (2)        (15)
Cash and cash equivalents
  Beginning of period                                         12          27
  End of period                                           $   10      $   12
</TABLE>

See notes to consolidated financial statements.
<PAGE>
                                   JSCE, Inc.         
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                         (Tabular amounts in millions)
                                  (Unaudited)


1. Basis of Presentation

The accompanying consolidated financial statements of JSCE, Inc.
have been prepared in accordance with the instructions to Form 10-Q
and reflect all adjustments which management believes necessary
(which include only normal recurring accruals) to present fairly
the financial position and results of operations.  These
statements, however, do not include all information and footnotes
necessary for a complete presentation of financial position,
results of operations and cash flows in conformity with generally
accepted accounting principles.  Interim results may not
necessarily be indicative of results which may be expected for any
other interim period or for the year as a whole.  For further
information refer to the consolidated financial statements and
footnotes included in the JSCE, Inc. Annual Report on Form 10-K for
the year ended December 31, 1996, filed on February 26, 1997 with
the Securities and Exchange Commission (the "JSCE 1996 10-K").

JSCE, Inc. is a wholly-owned subsidiary of Jefferson Smurfit
Corporation ("JSC").  JSCE, Inc. and where appropriate, its
consolidated subsidiaries, are hereinafter collectively referred to
as "JSCE" or the "Company".  JSC has no operations other than its
investment in the Company.  The Company owns a 100% equity interest
in Jefferson Smurfit Corporation (U.S.) ("JSC (U.S.)").  JSC (U.S.)
has extensive operations throughout the United States.



2. Summarized Financial Information of JSC (U.S.)

The following summarized financial information is presented for JSC
(U.S.), a wholly-owned subsidiary of JSCE.  No separate financial
statements are presented for JSC (U.S.) because the financial
statements of JSC (U.S.) are identical to those of JSCE.  JSC
(U.S.) is the issuer of the 1994 Senior Notes and the 1993 Senior
Notes and is the borrower under the 1994 Credit Agreement, each as
defined in the JSCE 1996 10-K.  JSCE is the guarantor of the 1994
Senior Notes and the 1993 Senior Notes and is the guarantor under
the 1994 Credit Agreement.
<PAGE>
2. Summarized Financial Information of JSC (U.S.)

<TABLE>
<CAPTION>
Condensed consolidated balance sheets:
                                                         June 30,     December 31,
                                                           1997           1996    

<S>                                                     <C>            <C>
Current assets                                          $   553        $   552
Property, plant and equipment and timberlands, net        1,748          1,729
Goodwill                                                    243            246
Other assets                                                151            161
  Total assets                                          $ 2,695        $ 2,688

Current liabilities                                     $   507        $   525
Long-term debt                                            1,981          1,934
Other liabilities                                           593            604
Stockholder's deficit
  Common stock                                                                
  Additional paid-in capital                              1,102          1,102
  Retained earnings (deficit)                            (1,488)        (1,477)
    Total stockholder's deficit                            (386)          (375)
  Total liabilities and stockholder's deficit           $ 2,695        $ 2,688
</TABLE>
<TABLE>
<CAPTION>
Condensed consolidated statements of operations:

                                      Three months ended       Six months ended
                                            June 30,                June 30,     
                                       1997         1996        1997       1996  

<S>                                   <C>          <C>        <C>        <C>
Net sales                             $ 785        $ 844      $ 1,563    $ 1,760
Costs and expenses                      741          752        1,480      1,530
Interest expense, net                    47           48           94         99
Income (loss) before income taxes and
  extraordinary item                     (3)          44          (11)       131
Provision for income taxes                1           17                      51
Extraordinary item
  Loss from early extinguishment of
    debt, net of income tax benefits                  (4)                     (4)

  Net income (loss)                   $  (4)       $  23      $   (11)   $    76
</TABLE>
<PAGE>
Item 2.   Management's Discussion and Analysis of Financial
Condition and Results of Operations

Results of Operations
<TABLE>
<CAPTION>
(In millions)                         Three months ended     Six months ended
                                           June 30,              June 30,     
                                        1997       1996       1997       1996
<S>                                    <C>         <C>       <C>        <C> 
Net sales
  Paperboard/Packaging Products        $ 709       $ 770     $1,420     $1,591
  Newsprint                               76          74        143        169
  Total net sales                      $ 785       $ 844     $1,563     $1,760


Income from operations
  Paperboard/Packaging Products        $  37       $  73     $   76     $  185
  Newsprint                                7          19          7         45
  Total income from operations         $  44       $  92     $   83     $  230
</TABLE>

Net sales for the Company for the three months ended June 30, 1997
were $785 million, a decline of 7% compared to last year and, for
the six months ended June 30, 1997, were $1,563 million, a decline
of 11% compared to last year.  Income from operations for the
Company declined to $44 million for the three months ended June 30,
1997 and to $83 million for the six months ended June 30, 1997. 
The net sales impact of the changes in price and product mix,
shipment volumes, new plants and closed operations are shown in the
chart below.  The lower net sales and income from operations for
the periods stated were due primarily to lower product pricing for
many of the Company's products. 
<TABLE>
<CAPTION>
(In millions)                             Change in net sales analysis         
                                     Three months               Six months 
                                 1997 compared to 1996    1997 compared to 1996
<S>                                     <C>                        <C>
Sales price and product mix
  Paperboard/Packaging Products         $ (84)                     $(200)
  Newsprint                               (28)                       (72)
                                         (112)                      (272)

Sales volume
  Paperboard/Packaging Products            21                         29
  Newsprint                                30                         46
                                           51                         75

Acquisitions and new facilities
  Paperboard/Packaging Products             7                         11

Closed or sold facilities
  Paperboard/Packaging Products            (5)                       (11)  

  Total net sales decrease              $ (59)                     $(197)
</TABLE>
<PAGE>

Paperboard/Packaging Products Segment
For the three months ended June 30, 1997, net sales of the
Paperboard/Packaging Products segment decreased 8% compared to the
same period in 1996 to $709 million and income from operations
decreased 49% compared to the same period in 1996 to $37 million. 
The decrease in net sales and income from operations of this
segment were primarily a result of the significant price reductions
for containerboard and corrugated shipping containers.  Increases
in shipment volume for many of the Company's major products
partially offset the declines due to price.  The major changes in
net sales price and shipments within the product groups of the
Paperboard/Packaging Products segment are discussed below.

Prices of corrugated shipping containers were lower than last year
by 18%, on average, during the second quarter and linerboard prices
fell below $300 per ton.  The reduction in containerboard net sales
price was primarily the result of new capacity within the industry. 
Reclaimed fiber prices during the three months ended June 30, 1997
were 12% higher, on average, compared to last year.

Demand for corrugated shipping containers was strong during the
second quarter causing shipments to increase by 9% compared to last
year.  Folding carton and reclaimed fiber shipments were also
strong, increasing 5% and 11%, respectively, compared to last year.

For the three months ended June 30, net sales of containerboard and
corrugated shipping containers were $343 million, a decline of $67
million compared to last year.  Net sales of the other major
products in this segment for the second quarter were comparable to
last year.

For the six months ended June 30, 1997, net sales of the
Paperboard/Packaging Products segment decreased 11% compared to the
same period in 1996 to $1,420 million and income from operations
decreased 59% compared to the same period in 1996 to $76 million. 
The containerboard and corrugated shipping container price
decreases were also the primary reason for the declines in net
sales and income from operations for the six months ended June 30,
1997.  

Price decreases for corrugated shipping containers, which, on
average, were lower than last year by 20% for the year-to-date
period, appeared to bottom out in the second quarter.  Demand for
corrugated shipping containers has been strong throughout the first
six months of 1997, with sales volume increasing by 8% compared to
last year.  The Company took unplanned downtime at two of its
containerboard mills in the second quarter to reduce excess
inventories.  Demand for containerboard strengthened near the end
of the second quarter, however, and the Company successfully
implemented a $40 per ton price increase for medium, which was
effective June 1.

Reclaimed fiber prices strengthened in the second quarter, and for
the six months ended June 30, 1997 were 4% higher, on average,
compared to last year.  Reclaimed fiber shipments increased 10% for
the year-to-date period.  Based upon the improvement in markets,
the Company announced additional paperboard and packaging price
increases to take effect in the third quarter.  No assurance can be
given however, that the announced increases will be successfully
implemented. 

For the six months ended June 30, net sales of containerboard and
corrugated shipping containers declined $162 million to $690
million.  Net sales of the other major products in this segment for
the year-to-date period were lower than last year by 6% overall
compared to last year, but strengthened during the second quarter.
<PAGE>
Newsprint Segment
Newsprint prices for the three months ended June 30, 1997, were
lower than last year by approximately $166 per metric ton.  The
impact of the price decline was offset by increased sales volume
resulting in a moderate increase in net sales for the three months
ended June 30, 1997.  Income from operations for the period was $7
million, a decrease of $12 million compared to last year.  The
Company began implementing a $75 per metric ton increase in the
price of newsprint during the second quarter of 1997.

For the six months ended June 30, 1997 net sales for the newsprint
segment were $143 million, a decline of $26 million compared to
last year, and income from operations declined $38 million, to $7
million.  The declines were due to newsprint prices, which were
lower on a year-to-date basis by $228 per metric ton, or 31%. 
Sales volume increased 29% for the year-to-date period.

Costs and Expenses
The increase in cost of goods sold as a percent of net sales for
all periods was due primarily to overall lower sales prices in
1997.  In the Paperboard/Packaging Products segment the percentage
increased from 83% in 1996 to 86% in 1997 for the three months
ended June 30 and increased from 81% in 1996 to 86% in 1997 for the
six months ended June 30.  For the newsprint segment, the
percentage increased from 73% in 1996 to 87% in 1997 for the three
month period and increased from 71% in 1996 to 92% in 1997 for the
six month period. 

Selling and administrative expenses as a percent of net sales for
the three months and six months ended June 30, 1997 also increased
compared to last year due primarily to overall lower sales prices. 

Interest expense for the three months ended June 30, 1997 was
comparable to last year and for the six months ended June 30, 1997
declined by $5 million.  The decrease for the year-to-date period
was due primarily to lower average debt levels outstanding.  The
average effective interest rate for the Company's outstanding debt
was comparable for both the 1997 and 1996 periods.

The provision for income taxes for the three months ended June 30,
1997 was $1 million and there was no provision for income taxes for
the six months ended June 30, 1997.  The effective tax rates for
the stated periods differed from the Federal statutory tax rate due
to several factors, the most significant of which was the effect of
permanent differences from applying purchase accounting.

The Company will be required to adopt Statement of Financial
Accounting Standards No. 128, "Earnings Per Share", in the fourth
quarter of 1997.  The effect of the adoption of the new rules is
expected to be immaterial to reported earnings per share for the
three months and six months ended June 30, 1997.
<TABLE>
<CAPTION>
Statistical Data                   Three months ended        Six months ended  
(In thousands of tons,                  June 30,                 June 30,     
 except as noted)                   1997        1996         1997        1996 

<S>                                <C>         <C>          <C>         <C>
Mill production:
  Containerboard                     473         480          952         953
  Recycled boxboard and
    solid bleached sulfate           205         185          408         381
  Newsprint                          159         123          315         275

Sales volume:
  Corrugated shipping containers     533         488        1,032         956
  Corrugated shipping containers
    (billion square feet)            8.1         7.5         15.8        14.7
  Folding cartons                    116         111          227         232
  Fiber reclaimed and brokered     1,171       1,056        2,354       2,135
</TABLE>
<PAGE>
Liquidity and Capital Resources

Operating activities have historically been the major source of
cash to fund the Company's capital expenditures and debt payments. 
Net cash provided by operating activities for the six months ended
June 30, 1997 of $37 million, net borrowings of $40 million and
excess cash at the end of 1996 were used primarily to fund capital
investments and acquisitions totaling $79 million.  During the
first quarter, the Company acquired a corrugated shipping container
plant in Florida and three Chicago-area recycling plants.  The
Company also shut down and sold a small uncoated recycled
paperboard mill in Monroe, MI, which was unprofitable in recent
years.

The Company's credit agreement (the "Credit Agreement") contains
various business and financial covenants including, among other
things, maintenance of minimum levels of consolidated earnings
before depreciation, interest, taxes and amortization and
maintenance of minimum interest coverage ratios.  In view of the
economic downturn within the Company's business segments,
particularly in the early part of 1997, the Company sought an
amendment to the Credit Agreement to ease certain of its financial
covenants.  The amendment to the Credit Agreement was granted in
June 1997.  The Credit Agreement also requires prepayments if JSC
(U.S.) has excess cash flows, as defined, or receives proceeds from
certain asset sales, insurance, issuance of equity securities or
incurrence of certain indebtedness.  

Such restrictions, together with the highly leveraged position of
the Company, could restrict corporate activities including the
Company's ability to respond to market conditions, to provide for
unanticipated capital expenditures or to take advantage of business
opportunities.  

At June 30, 1997, the Company had $283 million of unused borrowing
capacity under its Credit Agreement and $129 million of unused
borrowing capacity under its $315 million accounts receivable
securitization program, subject to JSC (U.S.)'s level of eligible
accounts receivable.  The Company believes that cash provided by
operating activities and available financing sources will be
sufficient for the next several years to pay interest on the
Company's obligations, amortize its term loans and fund capital
expenditures.
<PAGE>

                          PART II - OTHER INFORMATION


Item 1.  Legal Proceedings

John Sechler and Hazel Sechler et. al. vs. Smurfit Newsprint
Corporation

On July 1, 1997, Smurfit Newsprint Corporation ("SNC"), a wholly-
owned subsidiary of Jefferson Smurfit Corporation ("JSC"), was
served with a complaint which was filed in the United States
District Court for the Northern District of Georgia that alleges
that Cladwood exterior siding produced by SNC and used in
manufactured or mobile homes deteriorates under normal conditions
and exposure.  The suit purports to be a class action on behalf of
all owners of Cladwood-containing manufactured homes or mobile
homes.  The complaint alleges causes of action for breach of
warranty and negligence, and seeks an unspecified amount of actual,
consequential and punitive damages.  The Company intends to
vigorously defend the action.

Item 2.  Changes in Securities

None

Item 3.  Defaults Upon Senior Securities

None

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

The Registrant's Annual Meeting of Stockholders was held on May 1,
1997.  At the meeting, stockholders voted on (i) the election of
four directors for terms of office expiring at the annual meeting
of stockholders in 2000; (ii) the adoption of the JSC Amended and
Restated 1992 Stock Option Plan and (iii) the ratification of the
appointment of Ernst & Young LLP as independent auditors of the
Company for 1997.  Voting on each matter was as follows:
<TABLE>
<CAPTION>
                                      Votes         Votes     Withheld/     Broker
                                       For         Against   Abstentions    Non-Votes

 <S>                                <C>           <C>          <C>            <C>
 1. Election of Directors
     Donald P. Brennan              108,111,210                368,049
     James S. Hoch                  108,117,137                362,122
     Michael W.J. Smurfit           108,120,088                359,171
     James E. Terrill               108,109,950                369,309

 2. Adoption of Amended and 
      Restated 1992 Stock
      Option Plan                   107,443,127    606,562     130,096        299,474

 3. Ratification of Auditors        108,412,671     30,032      36,556               
</TABLE>

Item 5.  Other Information

Form S-8 regarding the registration of additional shares of JSC
Common Stock issuable under the JSC 1992 Stock Option Plan was
filed with the Securities and Exchange Commission on July 24, 1997.
<PAGE>
Item 6.  Exhibits and Reports on Form 8-K

    a)     The following exhibits are included in this Form 10-Q.
           10.1   Amendment No. 2, dated as of June 15, 1997, to the 
                  Credit Agreement, amended and restated as of May 
                  17, 1996, among JSC, JSCE, Inc. and the banks    
                  parties thereto (incorporated by reference to    
                  Exhibit 10.1 to JSC's quarterly report on Form 10- 
                  Q for the quarter ended June 30, 1997).
           27.1   Financial Data Schedule.

    b)     Reports on Form 8-K

      Form 8-K regarding a complaint filed against a subsidiary of
      JSC was filed with the Securities and Exchange Commission on
      July 15, 1997.

<PAGE>
                                  Signatures


    Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.


                                             JSCE, Inc.       
                                            (Registrant)


Date  July 31, 1997               /s/   Patrick J. Moore     
                                        Patrick J. Moore
                                        Vice President
                                        and Chief Financial Officer
                                        (Principal Accounting Officer)