UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                          Washington, D. C. 20549
                                     
                                 FORM 10-Q
                                     
     (Mark One)
(X)   Quarterly Report Under Section 13 or 15(D) of The Securities Exchange
      Act of 1934 For Quarter Ended June 30, 1998

                       OR

( )  Transition Report Pursuant to Section 13 or 15(d) of The  Securities
     Exchange Act of 1934


                       Commission File Number 0-275


                              Allen Organ Company
          (Exact name of registrant as specified in its charter)



     Pennsylvania                       23-1263194
  (State of Incorporation)      (I.R.S. Employer Identification No.)



  150 Locust Street, P. O. Box 36, Macungie, Pennsylvania      18062-0036
  (Address of principal executive offices)                     (Zip Code)



Registrant's telephone number, including area code           610-966-2200


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_____
                                     
Number of shares outstanding of each of the issuer's classes of common
stock, as of  August 10, 1998:

                    Class A - Voting          84,112 shares
                    Class B - Non-voting   1,095,958 shares
<PAGE>
                            ALLEN ORGAN COMPANY
                                     
                                   INDEX
                                     
                                                                  
Part I  Financial Information

   Item 1.Financial Statements
          Consolidated Condensed Statements of Income for the six months
          ended June 30, 1998 and 1997                                     

          Consolidated Condensed Balance Sheets at June 30, 1998 and
          December 31, 1997                                                

          Consolidated Condensed Statements of Cash Flows for the six
          months ended June 30, 1998 and 1997                              

          Notes to Consolidated Condensed Financial Statements             

   Item 2.Management's Discussion and Analysis of Financial Condition and
          Results of Operations                                            

Part II Other Information

   Item 4.Submission of Matters to a Vote of Security Holders              
   Item 5.Other Information                                                
   Item 6.Exhibits and Reports on Form 8-K

   Signatures                                                              
<PAGE>
PART I  FINANCIAL INFORMATION
   ITEM 1.FINANCIAL STATEMENTS

                   ALLEN ORGAN COMPANY AND SUBSIDIARIES
                CONSOLIDATED CONDENSED STATEMENTS OF INCOME
                                (Unaudited)
                                     
                           For the 3 Months Ended:      For the 6 Months Ended:
                             6/30/98      6/30/97         6/30/98       6/30/97
                                                                 
                                                                  
Net Sales                 $10,567,919   $9,107,033     $20,795,210   $17,985,992
                                                               
Cost and Expenses                                                 
 Costs of sales             7,439,196    6,307,370      14,323,818    12,180,629
 Selling, general and      
  administrative            2,933,753    1,963,398       5,669,112     3,716,582
 Research and development     835,371      633,407       1,620,537     1,243,027
  Total Costs and Expenses 11,208,320    8,904,175      21,613,467    17,140,238
                                                                   
(Loss) Income from
   Operations                (640,401)     202,858        (818,257)      845,754
                                                                  
Other Income (Expense)                                            
 Interest and other income    230,426      703,407         458,956     1,115,585
 Minority interests in                                            
  consolidated subsidiaries    42,332        7,112          97,226        15,762
  Total Other Income and      
  Expense                     272,758      710,519         556,182     1,131,347
                                                                  
(Loss) Income Before Taxes   (367,643)     913,377        (262,075)    1,977,101
                                                                  
Provision for Taxes           (87,000)     314,000         (82,000)      685,000
                                                                  
Net (Loss) Income         $  (280,643)  $  599,377     $  (180,075)  $ 1,292,101
                                                                  
Basic and Diluted (Loss) 
 Earnings Per Share            $(0.24)       $0.45          $(0.15)        $0.98
                                                                  
Shares Used in Per Share                                                
 Calculation                1,180,554    1,319,271       1,180,554     1,319,271
                                                                  
Dividends Per Share - Cash      $0.14        $0.14           $0.28         $0.28
                                                                  
Total Comprehensive                                               
 (Loss) Income            $  (287,221)  $  873,298     $    (3,611)  $ 1,402,771
                                     
                               See accompanying notes.
<PAGE>
                   ALLEN ORGAN COMPANY AND SUBSIDIARIES
                   CONSOLIDATED CONDENSED BALANCE SHEETS
                                     
                                                     June 30, 1998 Dec. 31,1997
                     ASSETS                           (Unaudited)    (Audited)  
                                                               
Current Assets                                                
  Cash                                                $  1,738,594 $  1,020,348
  Investments Including Accrued Interest                18,142,217   20,040,334
  Accounts Receivable                                    6,030,058    5,732,432
  Inventories:                                                
     Raw Materials                                       8,343,238    8,532,962
     Work in Process                                     7,469,960    7,343,590
     Finished Goods                                      2,416,334    2,046,835
      Total Inventories                                 18,229,532   17,923,387
  Prepaid Income Taxes                                     386,437      232,895
  Prepaid Expenses                                         706,605      483,300
     Total Current Assets                               45,233,443   45,432,696
Property, Plant and Equipment                           20,693,289   20,084,544
  Less Accumulated Depreciation                        (11,023,472) (10,569,532)
     Total Property, Plant and Equipment                 9,669,817    9,515,012
Other Assets
  Prepaid Pension Costs                                    718,857      795,107
  Inventory Held for Future Service                      1,204,265    1,260,346
  Note Receivable                                          620,227      203,557
  Cash Value of Life Insurance                           1,122,495    1,122,495
  Intangible and Other Assets, net                       4,013,807    4,232,791
     Total Other Assets                                  7,679,651    7,614,296
     Total Assets                                     $ 62,582,911 $ 62,562,004
                                    
                  LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES
Current Liabilities                                           
  Accounts Payable                                    $    726,850 $    913,110
  Deferred Income Taxes                                    175,391       74,091
  Other Accrued Expenses                                 1,034,213      692,282
  Customer Deposits                                      1,557,589    1,308,001
     Total Current Liabilities                           3,494,043    2,987,484
Noncurrent Liabilities                                        
  Deferred Liabilities                                     717,514      721,264
     Total Liabilities                                   4,211,557    3,708,748
  Minority Interests                                       194,222      321,424
                                                              
STOCKHOLDERS' EQUITY                                          
  Common Stock   1998           1997                          
     Class A   127,232 shares;  127,232 shares             127,232      127,232
     Class B 1,410,761 shares;1,410,761 shares           1,410,761    1,410,761
  Capital in Excess of Par Value                        12,758,610   12,758,610
  Retained Earnings                                           
     Balance, Beginning                                 55,725,180   52,915,056
     Net (Loss) Income                                    (180,075)   3,512,142
     Dividends - Cash 1998 and 1997                       (330,535)    (702,018)
     Balance, End                                       55,214,570   55,725,180
  Accumulated other comprehensive income:                     
     Unrealized Gain on Investments                        304,938      128,474
  Treasury Stock                                              
     1998-43,120 Class A shares;314,657 Class B shares (11,638,979)
     1997-43,120 Class A shares;314,155 Class B shares              (11,618,425)
  Total Stockholders' Equity                            58,177,132   58,531,832
  Total Liabilities and Stockholders' Equity          $ 62,582,911 $ 62,562,004
                                                              
                          See accompanying notes.
<PAGE>
                   ALLEN ORGAN COMPANY AND SUBSIDIARIES
              CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
                                (Unaudited)
                                     
                               For the 3 Months Ended:  For the 6 Months Ended:
                                                          
                                 6/30/98      6/30/97     6/30/98     6/30/97
CASH FLOWS FROM OPERATING
 ACTIVITIES
 Net (loss) income             $ (280,643) $   599,377  $ (180,075) $ 1,292,101
 Adjustments to reconcile net                                        
   (loss) income to net
   cash provided by operating
   activities
  Depreciation and amortization   389,374      241,590     767,913      468,520
  Minority interest in          
    consolidated subsidiaries     (42,332)      (7,112)    (97,226)     (15,762)
 Change in assets and liabilities,                                              
    (net of acquisition effects)
   (Increase) Decrease in       
     accounts receivable         (358,437)     (87,833)   (297,626)    (175,954)
   (Increase) Decrease in            
     inventories                  613,030   (1,502,425)   (250,064)  (2,704,648)
   (Increase) Decrease in prepaid 
     income taxes                (116,000)     143,000    (153,542)     289,865
   (Increase) Decrease in prepaid 
     expenses                     (58,010)     (77,820)   (223,305)    (152,176)
   (Increase) Decrease in prepaid 
     pension costs                 16,250       48,668      76,250      116,165
   (Decrease) Increase in      
     accounts payable            (115,127)    (126,654)   (186,260)     162,206
   (Decrease) Increase in accrued
     expenses                     120,080      (58,252)    341,931      191,624
   (Decrease) Increase in        
     customer deposits            321,878      744,652     249,588      565,693
   (Decrease) Increase in other  
     noncurrent liabilities        (1,875)      41,774      (3,750)      39,899
     Net Cash Provided by (Used In)    
       Operating Activities       488,188      (41,035)     43,834       77,533
                                                                           
CASH FLOW FROM INVESTING ACTIVITIES                                      
    Payment for acquisition          ----   (1,512,000)       ----   (1,512,000)
    Additions to intangibles and   
      other assets                 (5,348)     (71,950)    (21,831)     (71,950)
    Increase in note receivable  (416,670)        ----    (416,670)        ----
    Net additions to plant and    
      equipment                  (393,378)    (711,482)   (681,903)  (1,183,146)
    Net sale (or purchase) of    
      short term investments      894,913    3,863,863   2,175,881    4,449,139
     Net Cash Provided by          
      Investing Activities         79,517    1,568,431   1,055,477    1,682,043
                                                                           
CASH FLOWS FROM FINANCING ACTIVITIES                                 
    Reacquired Class B common        
      shares                      (20,554)  (1,834,342)    (20,554)  (1,863,230)
    Dividends paid in cash       (165,234)    (184,964)   (330,535)    (370,282)
    Subsidiary stock reacquired    
      from minority shareholder   (29,976)        ----     (29,976)     (14,675)
    Subsidiary company stock issued     
      to minority shareholder        ----         ----        ----       18,382
     Net Cash Used In Financing 
       Activities                (215,764)  (2,019,306)   (381,065)  (2,229,805)
                                                                           
NET INCREASE (DECREASE) IN CASH   351,941     (491,910)    718,246     (470,229)
                                                                           
CASH, BEGINNING                 1,386,653      802,883   1,020,348      781,202
                                                                     
CASH, ENDING                   $1,738,594  $   310,973  $1,738,594  $   310,973
                                     
                                                                          
                                     
            SUPPLEMENTAL DISCLOSURES OF CASH FLOWS INFORMATION
Cash paid for:                                                       
   Income Taxes                    14,000      171,500      36,050      395,500
                                     
                                                           
                          See accompanying notes.
<PAGE>
                   ALLEN ORGAN COMPANY AND SUBSIDIARIES
                                     
           NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                     
1. Interim Financial Statements
   The  results of operations for the interim periods shown in this  report
   are  not necessarily indicative of results to be expected for the fiscal
   year.   In  the opinion of management, the information contained  herein
   reflects  all  adjustments necessary to make the results  of  operations
   for  the interim periods a fair statement of such operations.  All  such
   adjustments are of a normal recurring nature.

   Certain notes and other information have been condensed or omitted  from
   the  interim financial statements presented in the Quarterly  Report  on
   Form  10-Q.   Therefore, these financial statements should  be  read  in
   conjunction with the company's 1997 Annual Report on Form 10-K.

2. Pro Forma Financial Information
   The  following pro forma financial information has been prepared  giving
   effect to the April 1, 1997 acquisition of Legacy Audio, Inc. as if  the
   transaction  had taken place at the beginning of the applicable  period.
   The  pro  forma  financial information is not necessarily indicative  of
   the  results  of  operations  which would have  been  attained  had  the
   acquisition been consummated on any of the foregoing dates or which  may
   be attained in the future.
                                    For the 6 Months Ended:
                                           6/30/97
                 Net Sales               $18,447,795
                 Net Income                1,271,914
                 Net Income Per Share          $0.96
            
3. Comprehensive Income
   In  1998, the Company adopted Statement of Financial Accounting Standard
   ("SFAS")  No.  130  on  "Reporting  Comprehensive  Income".   SFAS   130
   establishes new rules for the reporting of comprehensive income and  its
   components;  however  the adoption of SFAS 130  had  no  impact  on  the
   Company's  net  income  or  stockholder's  equity.   SFAS  130  requires
   unrealized   gains   or  losses  on  the  Company's   available-for-sale
   securities to be included in other comprehensive income.  These  amounts
   were  reported  in  stockholder's equity prior to the adoption  of  SFAS
   130.   Prior year financial statements have been reclassified to conform
   to the requirements of SFAS 130.

4. Note Receivable
   The  Company  has  entered  into a second  Split-Dollar  Life  Insurance
   agreement  with  its President who is the owner and beneficiary  of  the
   policy.  The policy owner shall pay the portion of the premium equal  to
   the  value  of  the  economic  benefit  determined  in  accordance  with
   applicable  IRS Revenue Rulings.  The Company shall pay the  balance  of
   the  net  premiums  which  shall  approximate  $400,000  annually.
   
   The  agreement  provides that the Company shall be entitled  to  recover
   the  amount  of  premiums  paid out of the  built  up  cash  value  upon
   termination  of the agreement or out of the proceeds upon the  death  of
   the  insured.   As  security for repayment the Company is  a  collateral
   assignee  of the policy to the extent of any such unreimbursed  premium.
   The   Company  is  also  secured  by  the  personal  obligation  of  its
   President.   The  note receivable exceeds the cash  surrender  value  of
   this policy by approximately $270,000 at June 30, 1998.
           

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND
RESULTS OF OPERATIONS.

Liquidity and Capital Resources:
   Cash flows from operating activities remained approximately the same for
the  six months ended June 30, 1998 and increased in the three month period
ended June 30, 1998 when compared to the same period in 1997, primarily due
to   reductions   in  inventory  in  the  Musical  Instruments   and   Data
Communications segments.

    Cash  flows  from investing activities reflects the Company's  sale  of
short-term investments net of the increase in notes receivable and  amounts
used  to  purchase  equipment.  During the first six  months  of  1998  the
Company  continued  the implementation of its new information  systems  and
acquired  an  additional $250,000 of hardware and  software.   The  Company
estimates that this project will require another $150,000 to complete.


Results of Operations:

Sales and Operating Income
                             For the 3 Months Ended:   For the 6 Months Ended:
                               6/30/98      6/30/97      6/30/98      6/30/97
  Net Sales to Unaffiliated
   Customers
     Musical Instruments     $ 5,647,106  $ 4,908,158  $11,907,615  $10,435,621
     Data Communications       2,793,461    2,129,804    4,946,674    4,283,190
     Electronic Assemblies     1,444,435    1,491,572    2,592,792    2,689,682
     Audio Equipment             682,917      577,499    1,348,129      577,499
       Total                 $10,567,919  $ 9,107,033  $20,795,210  $17,985,992
                                                              
  Intersegment Sales                                                
     Musical Instruments     $    46,943  $    --      $    88,112  $    --
     Data Communications          --           --              594       52,398
     Electronic Assemblies        44,184      422,742      292,149      666,443
     Audio Equipment              87,192        6,583      111,047        6,583
       Total                 $   178,319  $   429,325  $   491,902  $   725,424
                                                                    
  Income (loss) from operations
     Musical Instruments     $   204,360  $   187,284  $   974,186  $   734,275
     Data Communications        (912,774)    (190,223)  (1,950,586)    (241,452)
     Electronic Assemblies       108,501      101,263      227,168      248,397
     Audio Equipment             (40,488)     104,534      (69,025)     104,534
       Total                 $  (640,401) $   202,858  $  (818,257) $   845,754


Musical Instruments Segment

    Sales increased $738,948 and $1,471,994 respectively for the three  and
six months ended June 30, 1998 when compared to the same period in 1997 due
to higher order volume.
    The  gross profit percentage was 30% in the first six months of  1998
and  1997.  The current quarter gross profit percentage  was  27%  compared
to 28% in the second quarter of 1997 due to changes in product mix.
    Selling,  general  and administrative expenses increased  approximately
$150,000 and $330,000 during the three and six months ended June 30,  1998,
respectively,  when compared to the same period in 1997.   These  increases
are  due to higher selling expenses associated with the higher sales volume
and  implementation and training costs associated with the new  information
systems.
    Research  and development expenditures increased approximately  $40,000
during  the  first six months of 1998 when compared to the same  period  in
1997 due to new product development.

Data Communications Segment

    Sales  increased $660,000 for the three and six months ended  June  30,
1998  when compared to the same period in 1997 from increased order volume.
Sales  for  the  three  months ended June 30,  1998  includes  $350,000  in
engineering  development  fees received for  a  new  product  developed  in
conjunction with an OEM agreement with one of Eastern Research's customers.
    During  the  last  quarter of 1997 the Company began  to  increase  its
investment  in  the sales and marketing effort at Eastern Research.   These
additional  efforts are focused on expanding channels of  distribution  and
targeting markets for the company's DACS system products.  The Company  has
increased its incoming order volume, however, the sales cycle for the  sale
of these more complex system products are generally in excess of 6 months.
    Gross profit margins decreased to 43.5% and 40.6% respectively for  the
three  and six months ended June 30, 1998 compared to 47.7% and 48.8%  when
compared  to the same period in 1997 from competitive pressures on  selling
prices  and  variations  in  product mix.   The  segment  is  focusing  its
attention  on  more  sophisticated high end products which  generally  have
higher gross margins.
   Sales and marketing expenditures increased approximately $560,000 (130%)
and  $940,000 (110%) respectively for the three and six months  ended  June
30,  1998 when compared to the same period in 1997.  This was primarily due
to  the  expansion  of sales and marketing efforts to further  promote  the
segment's products, obtain additional market share and develop new channels
of distribution.
    General  and  administrative expenses increased approximately  $135,000
(36%)  and  $318,000 (46%) respectively for the three and six months  ended
June  30,  1998  when  compared to the same period in 1997  resulting  from
management and support personnel added to promote and oversee the segment.
    Research and development expenditures increased approximately $ 220,000
and $ 340,000 respectively for the three and six months ended June 30, 1998
when compared to the same period in 1997.  These expenditures have and will
continue to increase in the future reflecting the commitment to new product
development and support.

Electronic Assemblies Segment

    Sales  declined $47,137 and $96,890 respectively for the three and  six
months  ended June 30, 1998 when compared to the same period in  1997  from
changes in product mix and customer delivery requirements.
   The gross profit percentage increased to 11% and 12.6% for the three and
six  months  ended June 30, 1998 compared to 8% and 11% in the same  period
last  year.   These  increases  are due  to  changes  in  product  mix  and
efficiencies realized in the production processes.
    Selling, general and administrative expenses increased slightly in  the
first six months of 1998 when compared to the same period in 1997.

Audio Equipment Segment

   Sales increased $105,418 and $308,827 for the three and six months ended
June  30,  when compared to the same periods in 1997 on a pro forma  basis.
Gross  profit margins decreased to 35% in the first six months of  1998  as
compared  to  45%  in 1997.  This decrease is attributable  to  changes  in
distribution  from  direct marketing to dealer audition  sites  in  several
markets.  Selling, general and administrative costs increased in the  first
six  months of 1998 when compared to the same period in 1997 from increased
sales  and marketing efforts and additional administrative personnel  added
to support the company's growth.

Other Income and Expense

    Investment income decreased in both the three and six months ended June
30,  1998  due to lower invested balances, as well as gains on  investments
recognized in 1997 that did not recur in 1998.

Factors that May Affect Operating Results

   The statements contained in this report on Form 10-Q that are not purely
historical are forward looking statements within the meaning of Section 27A
of  the  Securities Act of 1933 and Section 21E of the Securities  Exchange
Act  of  1934,  including statements regarding the Company's  expectations,
hopes,  intentions  or  strategies regarding the future.   Forward  looking
statements  include:   statements  regarding  future  products  or  product
development; statements regarding future research and development  spending
and  the  Company's marketing and product development strategy,  statements
regarding  future  production  capacity.  All  forward  looking  statements
included in this document are based on information available to the Company
on  the  date hereof, and the Company assumes no obligation to  update  any
such  forward  looking  statements.  It  is  important  to  note  that  the
Company's actual results could differ materially from those in such forward
looking statements.  Some of the factors that could cause actual results to
differ materially are set forth below.
    The  Company  has  experienced and expects to  continue  to  experience
fluctuations  in  its  results  of operations.   Factors  that  affect  the
Company's  results of operations include the volume and  timing  of  orders
received,  changes  in the mix of products sold, market acceptance  of  the
Company's  and  its  customer's  products, competitive  pricing  pressures,
global  currency  valuations,  the Company's  ability  to  meet  increasing
demand, the Company's ability to introduce new products on a timely  basis,
the timing of new product announcements and introductions by the Company or
its  competitors,  changing customer requirements, delays  in  new  product
qualifications, the timing and extent of research and development  expenses
and fluctuations in manufacturing yields.  As a result of the foregoing  or
other  factors,  there  can  be no assurance  that  the  Company  will  not
experience material fluctuations in future operating results on a quarterly
or  annual basis, which would materially and adversely affect the Company's
business, financial condition and results of operations.

PART II    OTHER INFORMATION

   Item 4.  Submission of Matters to a Vote of Security Holders
   (a)  Annual Meeting:  April 21, 1998
   (b)  Election of the following directors for a one-year term:
        Steven  Markowitz,  Eugene  Moroz,  Leonard  Helfrich,  Martha
        Markowitz,  Orville  Hawk, Albert Schuster,  Jeffrey  Schucker
        and Ernest Choquette.
   (c)  In  addition to the election of directors and the waiver of
        reading  of  the  minutes  of  the  prior  meeting,   the
        shareholders ratified charitable deductions made in  1997  and
        all  contracts, agreements, and employments by  the  Board  of
        Directors  and officers since the previous annual  meeting  in
        May  1997.   All resolutions were adopted by the vote  of  all
        shareholders present, in person or proxy.
   
   Item 5.  Other Information
        Ernest J. Choquette was elected a Director at the annual
        shareholders  meeting on April 21, 1998.   Mr.  Choquette  has
        been  a  member of the law firm of Stevens & Lee,  Reading  PA
        for  almost  twenty years and currently serves as  Co-Chairman
        of their Corporate Group.
   
   Item 6.  Exhibits and Reports on Form 8-K

   (b)  No reports on Form 8-K were filed during the quarter ended 
        June 30, 1998.

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.

                                               Allen Organ Company
                                        (Registrant)

Date:    August 11, 1998                STEVEN MARKOWITZ
                                        Steven Markowitz, President and
                                        Chief Executive Officer

Date:    August 11, 1998                LEONARD W. HELFRICH
                                        Leonard W. Helfrich, 
                                        Vice President-Finance,
                                        Chief Financial and Principal
                                        Accounting Officer