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 September 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 November 10, 1998:

                    Class A - Voting          84,112 shares
                    Class B - Non-voting   1,087,058 shares
<PAGE>                 
                            ALLEN ORGAN COMPANY
                                     
                                   INDEX
                                     
                                                                   
Part I  Financial Information

   Item 1.Financial Statements

          Consolidated Condensed Statements of Income for the nine months
          ended September 30, 1998 and 1997                         

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

          Consolidated Condensed Statements of Cash Flows for the nine
          months ended September 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 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 9 Months Ended:
                            9/30/98      9/30/97         9/30/98      9/30/97
                                                                      
                                                                           
Net Sales                $11,812,748   $11,159,819     $32,607,958  $29,145,811
                                                                              
Cost and Expenses                                                
 Costs of sales            9,049,514     7,385,097      23,373,332   19,565,726
 Selling, general and    
  administrative           2,938,614     2,115,943       8,607,726    5,832,525
 Research and development    881,845       683,197       2,502,382    1,926,224
  Total Costs and 
   Expenses               12,869,973    10,184,237      34,483,440   27,324,475
                                                          
(Loss) Income from        
  Operations              (1,057,225)      975,582      (1,875,482)   1,821,336

Other Income and (Expense)                                                
 Interest and other income   252,284       407,606         711,240    1,523,191
 Minority interests in                                           
  consolidated subsidiaries  (44,760)        4,819          52,466       20,581
  Total Other Income and    
  Expense                    207,524       412,425         763,706    1,543,772
                                                        
(Loss) Income Before Taxes  (849,701)    1,388,007      (1,111,776)   3,365,108
                                                                 
Provision for Taxes         (250,000)      255,000        (332,000)     940,000
                                                      
Net (Loss) Income        $  (599,701)  $ 1,133,007     $  (779,776) $ 2,425,108

Basic and Diluted (Loss)                                         
 Earnings Per Share           $(0.51)        $0.88          $(0.66)       $1.89
                                                                 
Shares Used in Per Share                                                   
 Calculation               1,179,170     1,285,336       1,179,170    1,285,336
                                                                           
Dividends Per Share - Cash     $0.14         $0.14           $0.42        $0.42
                                                                 
Total Comprehensive      
(Loss) Income            $  (774,412)  $ 1,316,725     $  (778,023) $ 2,719,496
                                        
                             See accompanying notes.
<PAGE>
                   ALLEN ORGAN COMPANY AND SUBSIDIARIES
                   CONSOLIDATED CONDENSED BALANCE SHEETS
                                        
                                                     September 30,     Dec 31,
                     ASSETS                               1998           1997
                                                       (Unaudited)    (Audited)
Current Assets                                                
  Cash                                                $ 1,496,554  $ 1,020,348
  Investments Including Accrued Interest               18,742,912   20,040,334
  Accounts Receivable                                   6,663,534    5,732,432
  Inventories:                                               
     Raw Materials                                      8,211,182    8,532,962
     Work in Process                                    5,265,121    7,343,590
     Finished Goods                                     2,442,525    2,046,835
       Total Inventories                               15,918,828   17,923,387
  Prepaid Income Taxes                                    720,437      232,895
  Prepaid Expenses                                        639,033      483,300
     Total Current Assets                              44,181,298   45,432,696
Property, Plant and Equipment                          21,053,667   20,084,544
  Less Accumulated Depreciation                       (11,278,925) (10,569,532)
     Total Property, Plant and Equipment                9,774,742    9,515,012
Other Assets                                                  
  Prepaid Pension Costs                                   680,733      795,107
  Inventory Held for Future Service                     1,219,547    1,260,346
  Note Receivable                                         620,227      203,557
  Cash Value of Life Insurance                          1,366,625    1,122,495
  Intangible and Other Assets, net                      4,005,153    4,232,791
     Total Other Assets                                 7,892,285    7,614,296
     Total Assets                                     $61,848,325  $62,562,004


                  LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES
Current Liabilities                                           
  Accounts Payable                                    $ 1,066,684  $   913,110
  Deferred Income Taxes                                    75,096       74,091
  Other Accrued Expenses                                1,013,136      692,282
  Customer Deposits                                     1,539,563    1,308,001
     Total Current Liabilities                          3,694,479    2,987,484
Noncurrent Liabilities                                        
  Deferred Liabilities                                    715,639      721,264
     Total Liabilities                                  4,410,118    3,708,748
  Minority Interests                                      238,982      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                                   (779,776)   3,512,142
     Dividends - Cash 1998 and 1997                      (495,745)    (702,018)
     Balance, End                                      54,449,659   55,725,180
  Accumulated other comprehensive income:                     
     Unrealized Gain (Loss) on Investments                130,227      128,474
  Treasury Stock                                              
     1998-43,120 Class A shares;315,703 Class B shares(11,677,264)
     1997-43,120 Class A shares;314,155 Class B shares             (11,618,425)
  Total Stockholders' Equity                           57,199,225   58,531,832
  Total Liabilities and Stockholders' Equity          $61,848,325  $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 9 Months Ended:
                                                           
                                  9/30/98     9/30/97     9/30/98     9/30/97
CASH FLOWS FROM OPERATING                                                   
 ACTIVITIES
 Net (loss) income             $ (599,701) $ 1,133,007 $ (779,776) $ 2,425,108
 Adjustments to reconcile net                                            
   (loss) income to net 
   cash provided by operating
   activities
  Depreciation and amortization   392,718      269,879  1,160,631      738,399
  Minority interest in              
   consolidated subsidiaries       44,760        9,856    (52,466)      (5,906)
 Change in assets and liabilities,
    (net of acquisition effects)
   (Increase) Decrease in  
     accounts receivable         (633,476)    (782,890)  (931,102)    (958,844)
   (Increase) Decrease in         
     inventories                2,295,422     (631,352) 2,045,358   (3,336,000)
   (Increase) Decrease in  
     prepaid income taxes        (334,000)       8,359   (487,542)     298,224
   (Increase) Decrease in    
     prepaid expenses              67,572       36,118   (155,733)    (116,058)
   (Increase) Decrease in     
     prepaid pension costs         38,124      (75,830)   114,374       40,335
   (Decrease) Increase in   
     accounts payable             339,834       18,916    153,574      181,122
   (Decrease) Increase in   
     accrued expenses             (21,077)    (163,962)   320,854       27,662
   (Decrease) Increase in  
     customer deposits            (18,026)     (24,152)   231,562      541,541
   (Decrease) Increase in other     
     noncurrent liabilities        (1,875)       8,695     (5,625)      48,594
     Net Cash Provided by (Used in)   
      Operating Activities      1,570,275     (193,356) 1,614,109     (115,823)
                                                                        
CASH FLOW FROM INVESTING ACTIVITIES                                       
   Payment for acquisition             --           --         --   (1,512,000)
   Additions to intangibles and    
    other assets                 (110,276)          --   (132,107)     (71,950)
   Increase in note receivable         --      (40,409)  (416,670)     (40,409)
   Net additions to plant and      
     equipment                   (378,713)    (376,501)(1,060,616)  (1,559,647)
   Increase in cash value of  
     life insurance              (244,130)    (251,270)  (244,130)    (251,270)
   Net sale (or purchase) of
     short-term investments      (875,701)   5,002,524  1,300,180    9,451,663
     Net Cash Provided by (Used in) 
      Investing Activities     (1,608,820)   4,334,344   (553,343)   6,016,387
                                                                        
CASH FLOWS FROM FINANCING ACTIVITIES                             
   Reacquired Class B   
    common shares                 (38,285)  (3,763,487)   (58,839)  (5,626,717)
   Dividends paid in cash        (165,210)    (166,435)  (495,745)    (536,717)
   Subsidiary company stock issued   
    to minority shareholders           --           --         --       18,382
   Subsidiary company stock             
    reacquired from minority       
      shareholders                     --      (60,600)   (29,976)     (75,275)
     Net Cash Used In      
      Financing Activities       (203,495)  (3,990,522)  (584,560)  (6,220,327)
                                                                        
NET INCREASE (DECREASE) IN CASH  (242,040)     150,466    476,206     (319,763)
                                                                        
CASH, BEGINNING                 1,738,594      310,973  1,020,348      781,202
                                                                        
CASH, ENDING                   $1,496,554  $   461,439 $1,496,554  $   461,439
                                                            
                                        
                                        
               SUPPLEMENTAL DISCLOSURES OF CASH FLOWS INFORMATION
Cash paid for:                                                         
   Income Taxes                $   84,000  $   223,000 $  120,050  $   618,500
                                                          
                                        
                             See accompanying notes.
<PAGE>
                     ALLEN ORGAN COMPANY AND SUBSIDIARIES

                  NOTES TO CONSOLIDATED 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 9 Months Ended:
                                           9/30/97
                 Net Sales             $29,607,614
                 Net Income              2,509,211
                 Net Income Per Share        $1.95
            
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
  September 30, 1998.

5. Subsequent Event
  During  October  1998 the Company announced plans to permanently  close  its
  manufacturing plant in Rocky Mount, NC.  Rocky Mount Instruments, Inc. (RMI)
  manufactured  small  organs  and sub-assemblies for  the  Company's  Musical
  Instruments  segment.  RMI employs approximately 60 people,  half  of  which
  will  be  terminated in December 1998, and the remainder  during  first  six
  months  of  1999.   The Company estimates the termination  costs  (including
  employee severance and benefits) related to this closure to be approximately
  $415,000,  which will be included in the operating results  for  the  fourth
  quarter of 1998.

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

Liquidity and Capital Resources:
   Cash flows from operating activities increased during the nine month period
ended  September  30, 1998, primarily due to reductions in  inventory  in  the
Musical Instruments and Electronic Assemblies segments.  These reductions  are
the  result  of improvements in manufacturing methods and inventory management
discussed further below.

   Cash flows used in investing activities reflects the Company's purchase of
equipment  and  increases  in notes receivable, net  of  sales  of  short-term
investments.   During the nine months ended September 30,  1998,  the  Company
continued  the implementation of its new information systems and  acquired  an
additional $300,000 of hardware and software.  The Company estimates that this
project will require another $100,000 to complete.

Results of Operations:

Sales and Operating Income
                           For the 3 Months Ended:     For the 9 Months Ended:
                              9/30/98      9/30/97       9/30/98       9/30/97
 Net Sales to Unaffiliated                                          
  Customers
   Musical Instruments     $ 6,824,925  $ 6,338,653   $18,732,540  $16,774,274
   Data Communications       3,271,863    2,549,548     8,218,537    6,832,738
   Electronic Assemblies     1,123,344    1,614,003     3,716,136    4,303,685
   Audio Equipment             592,616      657,615     1,940,745    1,235,114
     Total                 $11,812,748  $11,159,819   $32,607,958  $29,145,811
                                                                    
  Intersegment Sales                                                 
   Musical Instruments     $    15,922  $        --   $   104,034  $        --
   Data Communications              --        1,473           594       53,871
   Electronic Assemblies        92,788      136,571       384,937      803,014
   Audio Equipment              25,754           --       136,801        6,583
     Total                 $   134,464  $   138,044   $   626,366  $   863,468
                                                                    
 Income (Loss) from Operations                                                
   Musical Instruments     $  (124,768) $   844,286   $   849,418  $ 1,578,561
   Data Communications        (937,965)    (188,241)   (2,888,551)    (429,693)
   Electronic Assemblies       (61,892)     215,539       165,276      463,936
   Audio Equipment              67,400      103,998        (1,625)     208,532
     Total                 $(1,057,225) $   975,582   $(1,875,482) $ 1,821,336


Musical Instruments Segment

   Sales increased $486,272 and $1,958,266 respectively for the three and nine
months ended September 30, 1998 when compared to the same periods in 1997  due
to higher order volume.

   The gross profit percentage decreased to 17% and 25% of sales respectively
for  the three and nine months ended September 30, 1998 compared to 30% in the
same  periods in 1997.  These decreases are primarily due to additional  costs
incurred  as  part  of  a business improvement program initiated  to  up-grade
production  and  product  planning processes.  As part  of  this  program  the
Company is implementing new information systems, the majority of which will be
in  place  early  in  1999.  The Company at the same time has  been  improving
manufacturing  methods  and inventory management,  which  has  resulted  in  a
reduction  in  inventory of approximately $2,500,000 in this segment  for  the
nine  months  ended  September 30, 1998.  During this reorganization,  and  in
reducing  its  work-in-process  and finished goods  inventories,  the  segment
incurred  approximately $750,000 in additional overheads and expenses  related
to  unapplied labor and related overhead as it trained its work force.  By the
end  of  1997,  manufacturing improvements enabled the Company to  stop  organ
production  at its North Carolina facility leaving only subassembly production
there,  consolidating all organ production at the main manufacturing  facility
in   Macungie,  PA.   The  North  Carolina  plant's  remaining  production  of
subassemblies  will  be  phased out in 1999.  Increased  capabilities  at  the
Macungie, PA facility will allow the Company to meet demand for organs.  It is
anticipated  that these business improvement programs will provide  long-term
benefits to the Company.

   Selling,  general  and  administrative  expenses  increased  approximately
$135,000  and $375,000 for the three and nine months ended September 30,  1998
respectively  when compared to the same period in 1997.  These  increases  are
due   to  higher  selling  costs  associated  with  higher  sales  volume  and
implementation and training costs related to the new information systems.

   Research  and  development  expenditures increased  approximately  $90,000
during  the nine months ended September 30, 1998 primarily due to new  product
development.

Data Communications Segment

   Segment sales increased $722,315 and $1,385,799 respectively for the three
and  nine months ended September 30, 1998 when compared to the same period  in
1997  from increased order volume.  Sales for the three and nine months  ended
September  30, 1998 include $125,000 and $475,000 respectively, 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 significantly 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 DNX (DACS)  system  products.   Eastern
Research has increased its incoming order volume, however, the sales cycle for
these more complex system products are generally in excess of 6 months.   This
segment  is working towards developing strategic relationships with customers,
which  will  help  expand their channels of distribution.  This  segment  will
continue to invest in sales and marketing programs.

   Gross  profit margins decreased to 38% and 39% respectively for  the  three
and  nine months ended September 30, 1998 when compared to 47% and 48% in  the
same  period  in  1997.  While Eastern Research's gross  profit  margins  have
increased  during  the three and nine months ended September  30,  1998,  this
increase  has been offset by lower gross profits at VIR Linear Switch  due  to
lower sales volume.  This segment has been focusing on more sophisticated high-
end products that generally have higher gross margins.

   Sales  and marketing expenditures increased approximately $553,000  (136%)
and  $1.5  million  (118%) respectively for the three and  nine  months  ended
September  30,  1998  when compared to the same periods  in  1997.   This  was
primarily due to the expansion of its efforts to further promote the segment's
products,  obtain  additional  market  share,  and  develop  new  channels  of
distribution.

   General and administrative expenses increased approximately $83,000  (17%)
and  $401,000 (34%) respectively for the three and nine months ended September
30,  1998  when compared to the same periods in 1997 resulting from management
and support personnel added to promote and oversee the segment.

   Research  and  development expenditures increased  approximately  $142,000
(29%)  and  $482,000 (37%) for the three and nine months ended  September  30,
1998  when compared to the same periods 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 $490,659 and $587,549 respectively for the three and  nine
months ended September 30, 1998 when compared to the same period in 1997  from
lower   incoming  orders,  changes  in  product  mix  and  customer   delivery
requirements.

   The  gross profit percentage decreased to 5.9% and 10.6% in the three  and
nine  months  ending September 30, 1998 compared to 20% and 15% for  the  same
periods  in 1997.  These declines are primarily associated with the  segment's
efforts to restructure operations along with the Musical Instruments segment.

   Selling,  general  and  administrative  expenses  increased  approximately
$65,000 during the nine months ended September 30, 1998 when compared  to  the
same period in 1997.

Audio Equipment Segment

   Sales decreased $64,999 for the three months ended September 30, 1998 when
compared  to  the  same  period in 1997.  Sales  for  the  nine  months  ended
September  30,  1998 increased $243,828 when compared to the same  periods  in
1997 on a proforma basis.

   The  gross  profit  percentage decreased to 40% in the nine  months  ended
September  30, 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 for the  period  increased  as
compared  to  the  prior year from increased sales and marketing  efforts  and
administrative personnel added to support the segment's growth.

Other Income and Expense

   Investment and other income for the nine months ended September  30,  1998
decreased  approximately $810,000 compared to the same period in 1997  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.

Year 2000

   The  Year  2000  issue  relates  to  the  ability  of  computer  systems,
microprocessors and other electronic devices to deal appropriately with  dates
on  or  after January 1, 2000.  The effect of the Year 2000 issue may  include
computer failures and business interruption.

   The  Company  has  taken  action  to  make  its  systems,  products   and
infrastructure Year 2000 compliant. The Company began work several  years  ago
to prepare its products and its financial information and other computer-based
systems  for  the  Year  2000, including replacing  and/or  updating  existing
systems.   Internally the Company is in the process of implementing new,  Year
2000 compliant, information systems that are expected to be in place early  in
1999.   Externally,  the Company has and will survey its suppliers,  financial
institutions, and other organizations that may impact the Company's  operation
to  assess  their  level  of Year 2000 compliance.  This  external  review  is
expected to be completed in early 1999.  The Company will continue to  monitor
its  Year  2000  compliance program, address any material issues  and  develop
contingency  plans, as it deems appropriate.  While the Company has  and  will
take  steps  to address material Year 2000 issues, the failure to identify  or
correct a material internal or external Year 2000 problem could result  in  an
interruption in the Company's business operations.

   While  these Year 2000 efforts will involve additional costs, the  Company
believes,  based on available information, that it will be able to manage  its
total Year 2000 transition without any material adverse effect on its business
operations, products or financial condition.

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
        September 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:  November 11, 1998            STEVEN MARKOWITZ
                                    Steven Markowitz, President and
                                    Chief Executive Officer

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