SECURITIES AND EXCHANGE COMMISSION
                             Washington, D. C. 20549
                                    Form 10-Q

            (Mark One)

        [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
            SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED
            MARCH 31, 1997 OR

        [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE   
            SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM
            _______________ TO _______________


        Commission file number 1-2199


                           ALLIS-CHALMERS CORPORATION             
             (Exact name of registrant as specified in its charter)


               Delaware                                  39-0126090   
   (State or other jurisdiction of                  (I.R.S. Employer
   incorporation or organization)                    Identification No.)


      Box 512, Milwaukee, Wisconsin                         53201-0512    
   (Address of principal executive offices)                  (Zip code)


                                  (414)475-2000
               Registrant's telephone number, including area code

   Indicate by check mark whether the registrant (1) has filed all reports
   required to be filed by Section 13 or 15(d) of the Securities Exchange Act
   of 1934 during the preceding 12 months (or for such shorter period that
   the registrant was required to file such reports), and (2) has been
   subject to such filing requirements for the past 90 days.  Yes   X  
    No      

   Indicate by check mark whether the registrant has filed all documents and
   reports required to be filed by Sections 12, 13 or 15(d) of the Securities
   Exchange Act of 1934 subsequent to the distribution of securities under a
   plan confirmed by a court.  Yes   X   No      

   At May 9, 1997 there were 1,003,028 shares of Common Stock outstanding.  

   <PAGE>

   PART I.  FINANCIAL INFORMATION

   ITEM 1.  FINANCIAL STATEMENTS

   ALLIS-CHALMERS CORPORATION AND CONSOLIDATED SUBSIDIARIES

   STATEMENT OF OPERATIONS


                                               Three Months Ended
                                                     March 31    
                                                 1997           1996 
                                            (thousands, except per share)

   Sales                                       $  1,028       $   985
   Cost of sales                                    817           695
                                                -------       -------
       Gross Margin                                 211           290

   Marketing and administrative expense             369           326
                                                -------       -------

       Loss from Operations                        (158)          (36)
                                                -------       -------
   Other income (expense)
      Interest income                                15            33
      Interest expense                               (8)           (9)
      Pension expense                              (466)         (339)
      Other                                          13            12
                                                -------       -------

       Net Loss                                $   (604)      $  (339)
                                                =======       =======

       Net Loss per Common Share               $
                                                   (.60)      $  (.34)
                                                =======       =======


                        STATEMENT OF ACCUMULATED DEFICIT

              Three Months Ended March 31        1997         1996 
                                                    (thousands)

   Accumulated deficit - beginning of year     $ (9,746)      $(8,018)
   Net loss                                        (604)         (339)
                                               --------       -------
   Accumulated deficit - March 31              $(10,350)      $(8,357)
                                               ========       =======

   This interim statement is unaudited.

   The accompanying Notes are an integral part of the Financial Statements.

   <PAGE>
   ALLIS-CHALMERS CORPORATION AND CONSOLIDATED SUBSIDIARIES

   STATEMENT OF FINANCIAL CONDITION

                                            March 31,        December 31,
                                              1997              1996  
                                                   (thousands)
   Assets
    
   Cash and short-term investments             $1,024      $ 1,568
   Trade receivables, net                         739          652
   Non-trade receivables                           52           36
   Inventories, net                                77           93
   Other current assets                         
                                                  133          100
                                              -------       ------
          Total Current Assets                  2,025        2,449

   Net property, plant and equipment            1,024          937
                                              -------       ------
          Total Assets                         $3,049      $ 3,386
                                              =======       ======

   Liabilities and Shareholders' Deficit

   Current maturities of long-term debt        $   55      $    54
   Trade accounts payable                         138           82
   Accrued employee benefits                      150          136
   Accrued pension liability                    7,415        6,949
   Reserve for legal expenses                      50           50
   Other current liabilities                      131          356
                                               ------       ------
          Total Current Liabilities             7,939        7,627

   Accrued pension liability                    8,131        8,131
   Accrued postretirement benefit
      obligations                                 962          993
   Long-term debt                                 265          279

   Shareholders' deficit 
     Common stock, ($.15 par value,
      authorized 2,000,000 shares,
      outstanding 1,003,028 at March 31,
      1997 and December 31, 1996)                 152          152
     Capital in excess of par value             8,155        8,155
     Accumulated deficit (accumulated
      deficit of $424,208 eliminated
      on December 2, 1988)                     (10,350)     (9,746)
     Pension liability adjustment              
                                              (12,205)     (12,205)
                                              -------      -------
          Total Shareholders' Deficit         (14,248)     (13,644)

   Commitments and contingent liabilities                         
                                              -------      -------
          Total Liabilities and Shareholders'
           Deficit                             $3,049      $ 3,386
                                              =======      =======



   This interim statement is unaudited.

   The accompanying Notes are an integral part of the Financial Statements.

   <PAGE>
   ALLIS-CHALMERS CORPORATION AND CONSOLIDATED SUBSIDIARIES

   STATEMENT OF CASH FLOWS

                                                 Three Months Ended
                                                      March 31      
                                                   1997       1996 
                                                     (thousands)

   Cash flows from operating activities:
     Net loss                                   $  (604)   $  (339)
     Adjustments to reconcile net loss to
       net cash provided (used) by
       operating activities:
         Depreciation and amortization               35         24
         Change in working capital:
           Increase in receivables, net            (103)      (266)
           Decrease (increase) in inventories        16        (63)
           Increase in trade accounts payable        56         58
           (Decrease) increase in other
             current items                         (244)        89
           Increase in accrued pension
             liability, net                         466        134
         Other                                      (31)       (12)
                                                 ------    -------
           Net cash (used) by operating
            activities                             (409)      (375)

   Cash flows from investing activities:
     Capital expenditures                          (122)       (12)

   Cash flows from financing activities:
     Net proceeds from issuance of
       long-term debt                                 -          -
     Payment of long-term debt                      (13)        (9)
                                                 ------    -------
           Net cash (used) by financing
            activities                              (13)        (9)
                                                 ------    -------
   Net (decrease) in cash and
    short-term investments                         (544)      (396)

   Cash and short-term investments at
    beginning of period                           1,568      1,881
                                                -------    -------
   Cash and short-term investments at 
    end of period                               $ 1,024    $ 1,485
                                                =======    =======
   Supplemental information - interest paid     $     7    $     9
                                                =======    =======



   This interim statement is unaudited.

   The accompanying Notes are an integral part of the Financial Statements.

   <PAGE>

   NOTES TO FINANCIAL STATEMENTS

   NOTE 1 - ACCOUNTING POLICIES

   This interim financial data should be read in conjunction with the
   consolidated financial statements and related notes, management's
   discussion and analysis and other information included in the Company's
   1996 Annual Report.

   All adjustments considered necessary for a fair presentation of the
   results of operations have been included in the unaudited financial
   statements.  The results of operations for any interim period are not
   necessarily indicative of Allis-Chalmers operating results for a full
   year.

   NOTE 2 - POSTRETIREMENT OBLIGATIONS--PENSION PLAN

   Effective January 1, 1994, the Company's independent pension actuaries
   changed the assumptions for mortality and administrative expenses used to
   determine the liabilities of the Allis-Chalmers Consolidated Pension Plan
   (Consolidated Plan).  Primarily as a result of the changes in mortality
   assumptions to reflect decreased mortality rates of the Company's
   retirees, it was determined that the Consolidated Plan was underfunded on
   a present value basis by approximately $10.0 million.  In the fourth
   quarter of 1993, the Company recorded the liability related to this
   underfunded position, resulting in the elimination of its shareholders'
   equity.  Subsequent updates to the underfunding calculation have increased
   the present value of the underfunding obligation to $15.1 million as of
   December 31, 1996.  As a result of the underfunding condition and pursuant
   to ERISA minimum funding requirements, on January 15, 1996 the Company
   made a cash contribution to the Consolidated Plan in the amount of
   $205,000.  Additional cash contributions required to eliminate this
   underfunding were estimated to be $2.3 million in 1996, $3.6 million in
   1997 and $12.2 million between 1998 and 2002.  Except for the contribution
   of $205,000, subsequent contributions due through the date of this report
   have not been paid.  Because unpaid contributions exceed $1,000,000, a
   lien has been filed by the Pension Benefit Guaranty Corporation (PBGC)
   against the Company in favor of the Consolidated Plan.  The unpaid
   contributions result in additional tax liability for the period of
   nonpayment and through the passage of time, may result in Internal Revenue
   Service (IRS) excise tax penalties if they remain unpaid.  Given the
   inability of the Company to fund the entire underfunding obligation with
   its current financial resources, a Notice of Intent to terminate the
   Consolidated Plan was filed with the PBGC on February 12, 1997 to become
   effective April 14, 1997.  The consequence of the Consolidated Plan
   termination is a liability to the PBGC significantly in excess of the
   Company's current net worth.  While discussions with the PBGC have not
   reached a conclusion, the Company intends to continue such discussions
   concerning its obligations under the Consolidated Plan.  Although it is
   not possible to predict the outcome of such discussions, if the Company is
   unable to negotiate a settlement with the PBGC on terms that are
   acceptable to the Company, Allis-Chalmers will be required to evaluate its
   options, which include attempting to raise additional capital to eliminate
   the underfunding or seeking protection from its creditors by commencing
   another voluntary bankruptcy proceeding under the federal bankruptcy laws. 
   The Company does not believe it will be able to raise additional capital
   to meet its obligations under the Consolidated Plan.  In the meantime, the
   Company continues to administer the Consolidated Plan.

   ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS

   Results of Operations

   Sales in the first quarter of 1997 totaled $1,028,000 an increase from
   $985,000 in the first quarter of 1996.  Operations of the Company consist
   of Houston Dynamic Service, Inc. (HDS), the Company's machinery repair and
   service subsidiary.

   Gross margin, as a percentage of sales, was 20.5% in the first quarter of
   1997, a decrease from 29.4% in 1996 primarily due to competitive pricing
   along with the product mix.  

   Marketing and administrative expense was $369,000 in the first quarter of
   1997 compared with $326,000 in the prior year.  A significant portion of
   the Company's administrative expenses relates to expenses for Securities
   and Exchange Commission and other governmental reporting as well as legal,
   accounting and audit, tax, insurance and other corporate requirements of a
   publicly held company.  

   Other expense was $453,000 in the first quarter of 1997 which included a
   non-cash expense of $466,000 for pension expense on the unfunded liability
   of approximately $15.1 million associated with the Consolidated Plan. 
   Pension expense in the first quarter of 1996 was $339,000.

   The Company incurred a net loss of $604,000, or $.60 per common share, in
   the first quarter of 1997 compared with a net loss of $339,000, or $.34
   per common share, in the same period of 1996.  The loss in the first
   quarter of 1997 included an expense of $466,000 for pension expense on the
   unfunded liability of approximately $15.1 million associated with the
   Consolidated Plan.  


   Financial Condition and Liquidity

   Cash and short term investments totaled $1.0 million at March 31, 1997, a
   decrease from $1.6 million from December 31, 1996.

   Trade receivables at March 31, 1997 were $739,000, reflecting an increase
   from the December 31, 1996 level of $652,000, primarily due to the timing
   of the billings for increased sales at the end of the quarter.  

   Non-trade receivables were $52,000 at March 31, 1997 reflecting a slight
   increase from $36,000 at December 31, 1996. 

   Inventory at March 31, 1997 was $77,000, a decrease from $93,000 at year
   end 1996. 

   Long-term debt, including current maturities at March 31, 1997, was
   $320,000, a decrease from $333,000 at December 31, 1996. 

   Other current liabilities at March 31, 1997 were $131,000, a decrease from
   $356,000 at December 31, 1996.  A payment of approximately $198,000 was
   made to the A-C Reorganization Trust for legal costs paid by the A-C
   Reorganization Trust on behalf of the Company, during the first quarter.

   The A-C Reorganization Trust, pursuant to the Plan of Reorganization,
   funds all costs incurred by Allis-Chalmers which relate to implementation
   of the Plan of Reorganization, thus avoiding additional demands on the
   liquidity of the Company.  Such costs include an allocated share of
   certain expenses for Company employees, professional fees and certain
   other administrative expenses.

   In 1988, the Plan of Reorganization provided for the contribution of $53.8
   million to the Company's then-existing 11 salaried and inactive hourly
   pension plans.  This funding, in addition to the then-existing assets in
   the pension plans, was used to establish a high-grade fixed income
   securities portfolio.  The market value of the portfolio assets was
   matched to the present value of the expected pension benefits and
   administrative expenses of the plans in a way intended to make the pension
   fund immune from interest rate fluctuations, thus substantially
   eliminating the need for future Company contributions.  Effective January
   1, 1989, the 11 remaining Allis-Chalmers pension plans were consolidated
   into a single plan, the Consolidated Plan.  Pursuant to its obligations
   under the Plan of Reorganization, the Company continues as the plan
   sponsor for the Consolidated Plan.

   For the years 1989 through 1994, retirees eligible for benefits under the
   Consolidated Plan as a group, outlived the projections based on the
   mortality assumptions used in the Plan of Reorganization for funding the
   Consolidated Plan.  During this period, actual administrative expenses
   were slightly in excess of assumed levels.  The Company was advised by its
   independent actuaries that effective January 1, 1994 it was required to
   reflect such decreased mortality for funding calculation purposes.  This
   change in the mortality assumptions and an increase in the assumption for
   future administrative expenses created an underfunded condition in the
   Consolidated Plan.  Based on the most recent recalculation, the
   underfunding was $15.1 million on a present value basis as of  December
   31, 1996.

   As a result of the underfunding condition and pursuant to ERISA minimum
   funding requirements, on January 15, 1996 the Company made a cash
   contribution to the Consolidated Plan in the amount of $205,000. 
   Additional cash contributions required to eliminate this underfunding were
   estimated to be $2.3 million in 1996, $3.6 million in 1997 and $12.2
   million between 1998 and 2002.  Except for the contribution of $205,000,
   subsequent contributions due through the date of this report have not been
   paid.  Because unpaid contributions exceed $1,000,000, a lien has been
   filed by the PBGC against the Company in favor of the Consolidated Plan. 
   The unpaid contributions result in additional tax liability for the period
   of nonpayment and through the passage of time, may result in IRS excise
   tax penalties if they remain unpaid.  Given the inability of the Company
   to fund the entire underfunding obligation with its current financial
   resources, a Notice of Intent to terminate the Consolidated Plan was filed
   with the PBGC on February 12, 1997 to become effective April 14, 1997. 
   The consequence of the Consolidated Plan termination is a liability to the
   PBGC in excess of the Company's current net worth.  While discussions with
   the PBGC have not reached a conclusion, the Company intends to continue
   such discussions concerning its obligations under the Consolidated Plan. 
   Although it is not possible to predict the outcome of such discussions, if
   the Company is unable to negotiate a settlement with the PBGC on terms
   that are acceptable to the Company, Allis-Chalmers will be required to
   evaluate its options, which include attempting to raise additional capital
   to eliminate the underfunding or seeking protection from its creditors by
   commencing another voluntary bankruptcy proceeding under the federal
   bankruptcy laws.  The Company does not believe it will be able to raise
   additional capital to meet its obligations under the Consolidated Plan. 
   In the meantime, the Company continues to administer the Consolidated
   Plan.

   The Environmental Protection Agency (EPA) and certain state environmental
   protection agencies have requested information in connection with eleven
   potential hazardous waste disposal sites in which products manufactured by
   Allis-Chalmers before consummation of the Plan of Reorganization were
   disposed.  The EPA has claimed that Allis-Chalmers is liable for cleanup
   costs associated with several additional sites.  The EPA's claims with
   respect to one other site were withdrawn in 1994 based upon settlements
   reached with the EPA in the bankruptcy proceeding.  In addition, certain
   third parties have asserted that Allis-Chalmers is liable for cleanup
   costs or associated EPA fines in connection with additional sites.  In one
   of these instances a former site operator has joined Allis-Chalmers and 47
   other potentially responsible parties as a third-party defendant in a
   lawsuit involving cleanup of one of the sites.  In each instance the
   environmental claims asserted against the Company involve its
   prebankruptcy operations.  Accordingly, Allis-Chalmers has taken the
   position that all cleanup costs or other liabilities related to these
   sites were discharged in the bankruptcy.  In one particular site, the
   EPA's Region III has concurred with the Company's position that claims for
   environmental cleanup were discharged pursuant to the bankruptcy.  While
   each site is unique with different circumstances, the Company has notified
   other Regional offices of the EPA of this determination associated with
   the Region III site.  The Company has not received responses from the
   other Regional offices.  No environmental claims have been asserted
   against the Company involving its postbankruptcy operations.

   The Company's principal sources of cash include earnings from the
   operations of HDS and interest income on marketable securities.  The cash
   requirements needed for the administrative expenses associated with being
   a publicly held company are significant, and the Company will continue to
   use cash generated by operations to fund such expenses.  However, the
   Company does not have sufficient cash to cover the unfunded pension
   liability payments. 

   The necessity to assure liquidity emphasizes the need for the Company to
   continue in a prudent manner its search for appropriate acquisition
   candidates in order to increase the Company's operating base and generate
   positive cash flow.  


   PART II.  OTHER INFORMATION

   ITEM 1. LEGAL PROCEEDINGS

   See PART I. Item 2, "Management's Discussion and Analysis."

   ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

   (a)  Exhibits:  (27) - Financial Data Schedule

   (b)  Reports on Form 8-K 

      On February 14, 1997 the Company filed a Current Report on Form 8-K
      dated February 14, 1997 to report (under Item 5 of Form 8-K) that the
      Company filed a Notice of Intent to Terminate the Consolidated Plan
      with the PBGC.


                                    SIGNATURE


   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.

                                           Allis-Chalmers Corporation
                                                  (Registrant)


                                            /s/ John T. Grigsby, Jr.         
                                           John T. Grigsby, Jr.
                                           Vice Chairman, Executive Vice
                                           President and Chief Financial
                                           Officer

   May 12, 1997


   <PAGE>

                                  EXHIBIT INDEX


   Exhibit No.            Description

      27             Financial Data Schedule