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 March 31, 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 May 8, 1998:

                    Class A - Voting               84,112 shares
                    Class B - Non-voting        1,096,136 shares
<PAGE>
                            ALLEN ORGAN COMPANY
                                     
                                   INDEX
                                     
                                                                   
Part I  Financial Information

   Item 1.Financial Statements

          Consolidated Condensed Statements of Income for the three months
          ended March 31, 1998 and 1997                              

          Consolidated Condensed Balance Sheets at March 31, 1998 and
          December 31, 1997                                                 

          Consolidated Condensed Statements of Cash Flows for the three
          months ended March 31, 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 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:
                                           3/31/98       3/31/97
                                                     
                                                     
        Net Sales                       $10,227,291   $ 8,878,959
                                                                  
        Costs and Expenses                       
         Costs of sales                   6,884,622     5,873,259
         Selling, general and       
          administrative                  2,735,359     1,753,184  
         Research and development           785,166       609,620 
            Total Costs and Expenses     10,405,147     8,236,063   
                                                            
        (Loss) Income from Operations      (177,856)      642,896
                                                                
        Other Income and (Expense)               
         Interest and other income          228,530       412,178
         Minority interests in                     
          consolidated subsidiaries          54,894         8,650 
            Total Other Income and          
             Expense                        283,424       420,828
                                                     
        Income Before Taxes on Income       105,568     1,063,724
                                                                 
        Provision for Taxes on Income         5,000       371,000
                                                                 
        Net Income                      $   100,568   $   692,724
                                                     
        Basic and Diluted Earnings          
         Per Share                            $0.09         $0.52
                                                     
        Shares Used in Per Share        
         Calculation                      1,180,718     1,323,883
                                                     
        Dividends Per Share - Cash            $0.14         $0.14
                                                             
        Total Comprehensive Income      $   283,610   $    529,473
                                     
                                                                     
                          See accompanying notes.
<PAGE>
                   ALLEN ORGAN COMPANY AND SUBSIDIARIES
                   CONSOLIDATED CONDENSED BALANCE SHEETS
                                     
                                                  March 31,       Dec 31,
                     ASSETS                          1998          1997
                                                 (Unaudited)     (Audited)
Current Assets                                                
  Cash                                           $ 1,386,653   $ 1,020,348
  Investments Including Accrued Interest          19,047,484    20,040,334
  Accounts Receivable                              5,671,621     5,732,432
  Inventories:                                                
     Raw Materials                                 8,897,149     8,532,962
     Work in Process                               7,420,305     7,343,590
     Finished Goods                                2,497,314     2,046,835
     Total Inventories                            18,814,768    17,923,387
  Prepaid Income Taxes                               270,437       232,895
  Prepaid Expenses                                   648,595       483,300
     Total Current Assets                         45,839,558    45,432,696
Property, Plant and Equipment                     20,349,046    20,084,544
  Less Accumulated Depreciation                  (10,803,642)  (10,569,532)
     Total Property, Plant and Equipment           9,545,404     9,515,012
Other Assets                                                  
  Prepaid Pension Costs                              735,107       795,107
  Inventory Held for Future Service                1,232,059     1,260,346
  Note Receivable                                    203,557       203,557
  Cash Value of Life Insurance                     1,122,495     1,122,495
  Intangible and Other Assets, net                 4,128,868     4,232,791
     Total Other Assets                            7,422,086     7,614,296
     Total Assets                                $62,807,048   $62,562,004
                                    
                  LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES
Current Liabilities                                           
  Accounts Payable                               $   841,977   $   913,110
  Deferred Income Taxes                              179,167        74,091
  Other Accrued Expenses                             914,133       692,282
  Customer Deposits                                1,235,711     1,308,001
     Total Current Liabilities                     3,170,988     2,987,484
Noncurrent Liabilities                                        
  Deferred Liabilities                               719,389       721,264
     Total Liabilities                             3,890,377     3,708,748
Minority Interests                                   266,530       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 Income                                      100,568     3,512,142
     Dividends - Cash 1998 and 1997                 (165,301)     (702,018)
     Balance, End                                 55,660,447    55,725,180
  Accumulated other comprehensive income:                     
     Unrealized Gain on Investments                  311,516       128,474
  Treasury Stock                                              
     1998 - 43,120 Class A shares;
           314,155 Class B shares                (11,618,425)           --
     1997 - 43,120 Class A shares;
           314,155 Class B shares                        --    (11,618,425)
  Total Stockholders' Equity                      58,650,141    58,531,832
  Total Liabilities and Stockholders' Equity     $62,807,048   $62,562,004
                                     
                          See accompanying notes.
<PAGE>                                                                        
                   ALLEN ORGAN COMPANY AND SUBSIDIARIES
              CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
                                (Unaudited)
                                     
                                                    For the 3 Months
                                                         Ended:
                                                  3/31/98      3/31/97
  CASH FLOWS FROM OPERATING ACTIVITIES             
   Net income                                  $  100,568    $ 692,724
   Adjustments to reconcile net income to net             
     cash provided by operating activities                
     Depreciation and amortization                378,539      226,930
     Minority interest in consolidated            
      subsidiaries                                (54,894)      (8,650)
   Change in assets and liabilities                       
     Accounts receivable                           60,811      (88,121)
     Inventories                                 (863,094)  (1,202,223)
     Prepaid income taxes                         (37,542)     146,865 
     Prepaid expenses                            (165,295)     (74,356)
     Prepaid pension costs                         60,000       67,497
     Accounts payable                             (71,133)     288,860   
     Accrued expenses                             221,851      249,876
     Customer deposits                            (72,290)    (178,959)
     Other noncurrent liabilities                  (1,875)      (1,875)
       Net Cash (Used In) Provided by            
        Operating Activities                     (444,354)     118,568
                                                          
  CASH FLOW FROM INVESTING ACTIVITIES                     
     Net additions to plant and equipment        (288,525)    (471,664)
     Additions to intangibles and other           
      assets                                      (16,483)          --       
     Net sale (or purchase) of short term       
      investments                               1,280,968      585,276
       Net Cash Provided by (Used In)              
        Investing Activities                      975,960      113,612
                                                          
  CASH FLOWS FROM FINANCING ACTIVITIES                    
     Reacquired Class B common shares                 --       (28,888)
     Dividends paid in cash                      (165,301)    (185,318)
     Subsidiary company stock reacquired from          
      minority shareholders                           --       (14,675)
     Subsidiary company stock issued to                
      minority shareholders                           --        18,382
       Net Cash Used In Financing Activities     (165,301)    (210,499)
                                                                  
  NET INCREASE IN CASH                            366,305       21,681
                                                                      
  CASH, BEGINNING                               1,020,348      781,202
                                                                     
  CASH, ENDING                                 $1,386,653    $ 802,883
                                                                     
            SUPPLEMENTAL DISCLOSURES OF CASH FLOWS INFORMATION
  Cash paid for:                                          
     Income Taxes                              $   22,050    $ 224,000
     Interest                                  $      --     $      --
                                                                        
                          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 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 at the beginning of the applicable  period
   or which may be attained in the future.
                                       For the 3 Months
                                            Ended:
                                           3/31/97
                 Net Sales               $9,340,762
                 Net Income                 671,354
                 Net Income Per Share         $0.51
            

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.

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

Liquidity and Capital Resources:
    Cash  flows from operating activities decreased during the three  month
period  ended  March 31, 1998, primarily due to increased  working  capital
requirements,  particularly inventory.  Inventory  increased  approximately
$700,000,  $170,000  and $224,000 respectively in the Data  Communications,
Electronic Assemblies, and Audio Equipment segments during the three months
ended  March 31, 1998.  Inventory decreased approximately $231,000  in  the
Musical  Instruments  segment.  The Data Communication segment's  inventory
increase is primarily due to increased order backlog and changes in product
mix to system level products which are more complex and require longer lead
times  for  manufacture and pre-shipment testing.   The  increases  in  the
Electronic Assemblies and Audio Equipment segments are due to higher  order
volumes.

    Cash  flows  from investing activities reflects the Company's  sale  of
short-term investments.
                                                      

Sales and Operating Income
                                            For the 3 Months
                                                 Ended:
                                         3/31/98        3/31/97  
 Net Sales to Unaffiliated Customers                       
  Musical Instruments                  $ 6,260,509   $ 5,527,463
  Data Communications                    2,153,213     2,153,386 
  Electronic Assemblies                  1,148,357     1,198,110   
  Audio Equipment                          665,212             0
    Total                              $10,227,291   $ 8,878,959
                                                                   
 Intersegment Sales
  Musical Instruments                  $    41,169   $         0
  Data Communications                       62,172       243,701  
  Electronic Assemblies                    247,965        52,398 
  Audio Equipment                           23,855             0
    Total                              $   375,161   $   296,099
                                                                   
 Income (Loss) from Operation          
  Musical Instruments                  $   769,826   $   546,991 
  Data Communications                   (1,037,812)      (51,229)
  Electronic Assemblies                    118,667       147,134  
  Audio Equipment                          (28,537)            0
    Total                              $  (177,856)  $   642,896
                                       

Musical Instruments Segment
    Sales increased $733,046 in the first quarter of 1998 when compared  to
the  same  period  in  1997.  This increase is due  to  increased  incoming
orders, reduction in the order back-log since December 31, 1997 and changes
in product mix.

   Gross profit margins increased to 32.3% of sales in the first quarter of
1998 from 30.0% in the same period in 1997.  This increase is primarily due
to  a  change in product mix which consisted of more larger models  in  the
first quarter of 1998 when compared to the same period in 1997.

    Selling,  general and administrative expenses increased  slightly  when
compared to the same period in 1997.

   Research and development expenditures increased approximately $40,000 in
the  first quarter of 1998 when compared to the same period in 1997 due  to
new product development.

Data Communications Segment
    Sales  in  the  first  quarter of 1998 were  approximately  equal  when
compared to the same period in 1997.  During the prior quarter 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 in the first quarter of 1998 were  approximately
equal  to  the  preceding quarter ended December 31, 1997 and decreased  to
36.9%  of sales from 50.0% when compared to the same period in 1997 due  to
changes  in  product  mix and continued competitive  pressures  on  selling
prices.   The segment is focusing its attention on more sophisticated  high
end products which generally have higher gross margins.

    Sales and marketing expenditures increased approximately $380,000 (89%)
in  the  first  quarter of 1998 when compared to the same  period  in  1997
reflecting the additional sales and marketing efforts initiated to  further
promote  the segments products, obtain additional market share and  develop
new channels of distribution.

    General  and  administrative expenses increased approximately  $180,000
(58%) in the first quarter of 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 expenses increased approximately $140,000 (34%)
in  the  first  quarter of 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  for  the first quarter of 1998 declined $49,753  over  the  same
period   in  1997  from  changes  in  product  mix  and  customer  delivery
requirements.  The gross profit percentage was 14.1% and 14.3% in the first
quarter of 1998 and 1997 respectively.  Selling, general and administrative
expenses  increased slightly in the first quarter of 1998 when compared  to
the same period in 1997.

Audio Equipment Segment
    Sales  for  the first quarter of 1998 increased approximately  $200,000
when  compared  to  the same period in 1997 on a pro  forma  basis.   Gross
profit margins in the first quarter of 1998 remained approximately equal to
the same period in 1997.  Selling, general and administrative costs for the
period  increased in the first quarter 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 due to lower 1998 invested balances, as well
as  gains on investments recognized in the first quarter of 1997 which  did
not recur in 1998.

Provision for Taxes on Income
    The  decrease in the 1998 effective tax rate is attributable to changes
in effective state tax rates.

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;
the  Company's  marketing and product development strategy  and  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 6.  Exhibits and Reports on Form 8-K

   (b)      No reports on Form 8-K were filed during the quarter ended 
            March 31, 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:   May 11, 1998                    STEVEN MARKOWITZ
                                        Steven Markowitz, President and
                                        Chief Executive Officer


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